エスペック（6859） – [Delayed]Consolidated Financial Results for the Fiscal Year Ended March 31, 2022(Under Japanese GAAP)

May 13, 2022 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. Financial Accounting Standards Foundation Member Consolidated Financial Results for the Fiscal Year Ended March 31, 2022 (Under Japanese GAAP) ESPEC CORP. Tokyo Stock Exchanges, Prime Market 6859 https://www.espec.co.jp Satoshi Arata, Representative Director and President Keiji Oshima, Chief Officer of Corporate Control Headquarters +81-6-6358-4741 Company name: Listing Securities code: URL: Representative: Inquiries: Telephone: 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: Holding of financial results briefing: June 23, 2022 June 24, 2022 June 24, 2022 Yes Yes (An on-demand video of the presentation meeting is scheduled to be posted on the Company’s website.) (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 Net sales Operating profit Ordinary profit (Percentages indicate year-on-year changes.) Profit attributable to owners of parent Fiscal year ended March 31, 2022 March 31, 2021 Millions of yen 41,852 38,668 % Millions of yen 1,968 8.2 2,572 (8.9) % Millions of yen 2,322 2,840 (23.5) (31.3) % Millions of yen 1,905 1,961 (18.2) (27.8) % (2.8) (30.4) Note: Comprehensive income For the fiscal year ended March 31, 2022 ¥ 2,820 million (13.8) % For the fiscal year ended March 31, 2021 ¥ 3,271 million 48.8 % Basic earnings per share Diluted earnings per share Return on equity Fiscal year ended March 31, 2022 March 31, 2021 Yen 84.89 85.79 Yen － － Reference: 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 Ratio of ordinary profit to total assets % 3.9 4.9 % 4.2 4.5 Ratio of operating profit to net sales % 4.7 6.7 Note: The Company has applied the “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020) from the beginning of the fiscal year ended March 31, 2022, and the figures for the fiscal year ended March 31, 2022 are shown after the application of this accounting standard. (2) Consolidated financial position Total assets Net assets Equity-to-asset ratio Net assets per share As of March 31, 2022 March 31, 2021 Millions of yen Millions of yen 61,922 58,607 45,592 44,984 Reference: Equity As of March 31, 2022 ¥45,378 million As of March 31, 2021 ¥44,984 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 Millions of yen Millions of yen Millions of yen Millions of yen March 31, 2022 March 31, 2021 2,018 3,041 (932) (2,034) (2,830) (1,503) 16,157 17,301 % 73.3 76.8 Yen 2,028.44 1,967.34 2. Cash dividends Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 Fiscal year ending March 31, 2023 (Forecast) Annual dividends per share First quarter-end Second quarter-end Third quarter-end Fiscal year-end Total Total cash dividends (Total) Payout ratio (Consolidated) Yen － － － Yen 10.00 18.00 24.00 Yen － － － Yen 41.00 Yen Millions of yen 1,175 51.00 42.00 60.00 1,352 45.00 69.00 Ratio of dividends to net assets (Consolidated) % 2.7 3.0 % 59.4 70.7 42.9 Note: Components of the interim dividend for the fiscal year ending March 31, 2023 (forecast) Ordinary dividend ¥22 Commemorative dividend ¥2 Components of the year-end dividend for the fiscal year ending March 31, 2023 (forecast) Ordinary dividend ¥43 Commemorative dividend ¥2 3. Forecasts of consolidated operating results for fiscal 2022, ending March 31, 2023 (From April 1, 2022 to March 31, 2023) Six months ending September 30, 2022 Fiscal year ending March 31, 2023 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 23,500 50,000 % 33.8 19.5 Millions of yen 1,950 5,000 % 392.2 153.9 Millions of yen 2,000 5,100 % 321.2 119.6 Millions of yen 1,300 3,600 % 463.7 88.9 Yen 58.11 160.92 * Notes (1) Changes in significant subsidiaries during the period Newly included: (Company name: ) Excluded: (Company name: ) (changes in specified subsidiaries resulting in the change in scope of consolidation): None (2) Changes in accounting policies, changes in accounting estimates, and restatement 1) Changes in accounting policies due to revisions to accounting standards and other regulations: Yes 2) Changes in accounting policies due to other reasons: None 3) Changes in accounting estimates: None 4) Restatement: None (3) Number of issued shares (common shares) 1) Total number of issued shares at the end of the period (including treasury shares) 2) 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 3) Average number of shares outstanding during the period Fiscal year ended March 31, 2022 Fiscal year ended March 31, 2021 23,781,394 shares 23,781,394 shares 1,410,246 shares 915,593 shares 22,453,148 shares 22,865,944 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 26,307 25,887 % Millions of yen 1,027 1.6 1,473 (13.2) % Millions of yen 1,590 1,808 (30.3) (42.9) % Millions of yen 1,563 1,345 (12.1) (38.8) % 16.3 (38.0) Basic earnings per share Diluted earnings per share Yen 69.65 58.82 Yen － － Fiscal year ended March 31, 2022 March 31, 2021 (2) Non-consolidated financial position As of March 31, 2022 March 31, 2021 Millions of yen Millions of yen 47,035 47,643 37,952 39,200 Reference: Equity As of March 31, 2022 ¥37,952 million As of March 31, 2021 ¥39,200 million Total assets Net assets Equity-to-asset ratio Net assets per share % 80.7 82.3 Yen 1,696.48 1,714.37 * Financial results reports are exempt from audit conducted by certified public accountants or an audit corporation. * Proper use of earnings forecasts, and other special matters Statements concerning the future such as the results forecasts, etc., included in this document are based on currently available information and certain assumptions judged reasonable and actual results, etc., may differ due to various factors. Note: For details, see “Outlook for Fiscal 2022” on p. 4. Index of Attached Material 1. Summary of Business Results —————————————————————————————————————————-2 (1) Overview of Fiscal 2021 Operating Results ———————————————————————————————————-2 (2) Overview of Fiscal 2021 Consolidated Financial Situation —————————————————————————————–3 (3) Overview of Fiscal 2021 Cash Flows ——————————————————————————————————————3 (4) Outlook for Fiscal 2022 ———————————————————————————————————————————-4 (5) Basic Policy on Profit Distributions and Dividends for Fiscal 2021 and Fiscal 2022 ———————————————————–4 2. Basic Stance on the Selection of Accounting Standards ——————————————————————————— 4 3. Consolidated Financial Statements ————————————————————————————————————5 (1) Consolidated Balance Sheets ——————————————————————————————————————5 (2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income ——————————-7 Consolidated Statements of Income ———————————————————————————————————-7 Consolidated Statements of Comprehensive Income ————————————————————————————————8 (3) Consolidated Statements of Changes in Net Assets ————————————————————————————————9 (4) Consolidated Statements of Cash Flows ————————————————————————————————————-11 (5) Notes to the Consolidated Financial Statements —————————————————————————————————-12 Notes on the assumption of a going concern ——————————————————————————————————–12 Important Matters Concerning the Basis for Preparing Consolidated Financial Statements ————————————————–12 Changes in accounting policies ———————————————————————————————————————–15 Additional Information ———————————————————————————————————————————15 Segment Information and Others ———————————————————————————————————————16 Per-Share Information ———————————————————————————————————————————-19 Business Combinations ——————————————————————————————————————————–20 Material Subsequent Events —————————————————————————————————————————20 – 1 – 1. Summary of Business Results Forward-looking statements contained herein are based on the Group’s judgment as of March 31, 2022. The Company has applied the “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020) from the beginning of the fiscal year ended March 31, 2022, and the figures for the fiscal year ended March 31, 2022 are shown after the application of this accounting standard. (1) Overview of Fiscal 2021 Operating Results 1) Operating Results for Fiscal 2021 During fiscal 2021, the year ended March 31, 2022, the ESPEC Group’s business environment remained on a recovery track due to the normalization of the global economy and the spread of COVID-19 vaccinations. With the advance of digitalization and decarbonization in society, electronics-related investment was favorable, and automotive-related investment was also firm. However, concerns have emerged about the global economic impacts of surging high raw material prices and logistics costs and ongoing shortages of semiconductors and electronics components, as well as a deterioration in the situation in Ukraine and lockdowns in China in the fourth quarter. In this environment, the ESPEC Group saw an increase in activity centered on markets related to 5G and IoT, as well as automated driving and electrification of automobiles, resulting in a 36.5% increase in orders received, with reached a new record high of ¥51,303 million. However, on the manufacturing front, the shortage of electronics components was not resolved, and although the Group took countermeasures such as procuring alternatives and making design changes, product delivery times continued to lengthen. As a result, net sales were held to an increase of only 8.2% year on year to ¥41,852 million. On the profit front, operating profit decreased 23.5% year on year to ¥1,968 million due to a deterioration in the cost-of-sales ratio driven by increased procurement costs and increased personal expenses and activity expenses associated with the expansion in orders. Profit attributable to owners of parent decreased only 2.8% year on year to ¥1,905 million, mainly due to a gain on sale of investment securities. Year Ended March 31, 2021 (Millions of yen) Year Ended March 31, 2022 (Millions of yen) Change (%) Orders received Net sales Operating profit Ordinary profit Profit attributable to owners of parent Equipment Business Service Business Other Business Elimination Total Equipment Business 2) Performance by Segment Consolidated results by operating segment for fiscal 2021 Orders received (Millions of yen) Net sales (Millions of yen) Operating profit (loss) (Millions of yen) 37,580 38,668 2,572 2,840 1,961 43,535 6,771 1,265 (269) 51,303 51,303 41,852 1,968 2,322 1,905 34,518 6,407 1,188 (261) 41,852 43,535 34,518 1,370 36.5 8.2 (23.5) (18.2) (2.8) 1,370 618 (23) 2 1,968 41.6 12.6 (33.5) In the environmental test chambers field, particularly the Japanese market, orders-received increased year on year both for versatile standardized products and customized products, while net sales were level year on year. In overseas markets, orders received were brisk, and net sales increased in China, North America, Europe, South Korea, and Southeast Asia. In the energy devices equipment field, both orders received and net sales increased year on year and orders were acquired for evaluation systems for secondary batteries due to recovery in automotive-related investment. In the semiconductor equipment field, orders-received increased year on year while investment related to memory and automobiles continued, but net sales decreased. As a result, the Equipment Business on the whole saw orders received increase 41.6% to ¥43,535 million and net sales increase 12.6% to ¥34,518 million, compared to the last year. On the profit front, operating profit decreased 33.5% year on year to ¥1,370 million, due to a deterioration in the cost-of-sales ratio and an increase in selling, general and administrative expenses. Year Ended March 31, 2021 (Millions of yen) Year Ended March 31, 2022 (Millions of yen) Change (%) Orders received Net sales Operating profit 30,755 30,669 2,062 – 2 – Service Business Orders received Net sales Operating profit Other Business Orders received Net sales Operating profit (loss) In the after-sales service and engineering field, both orders received and net sales increased year on year, due to a strong performance in preventive maintenance services such as maintenance agreements. In laboratory testing services and facility rentals, both orders received and net sales increased year on year, due to a strong performance in laboratory testing services. As a result, the Service Business on the whole saw orders received increase 10.0% year on year to ¥6,771 million and net sales increase 5.7% to ¥6,407 million. On the profit front, operating profit was ¥618 million, an increase of 38.5% year on year due to an increase in net sales. Year Ended March 31, 2021 (Millions of yen) Year Ended March 31, 2022 (Millions of yen) Change (%) In the other business, which is centered on the environmental preservation and plant factory businesses, orders received increased 29.6% year on year to ¥1,265 million, due to an increase in orders received for forest and waterside creation, and capturing orders for plant factories. Net sales decreased 47.0% year on year to ¥1,188 million because of a large plant factory project in the previous fiscal year. On the profit front, operating profit deteriorated by ¥83 million to an operating loss of ¥23 million due to the decrease in net sales. Year Ended March 31, 2021 (Millions of yen) Year Ended March 31, 2022 (Millions of yen) Change (%) 6,153 6,063 446 976 2,241 60 6,771 6,407 618 1,265 1,188 (23) 10.0 5.7 38.5 29.6 (47.0) － (2) Overview of Fiscal 2021 Consolidated Financial Situation Total assets at the end of the fiscal year consolidated accounting period were ¥61,922 million, an increase of ¥3,314 million over the end of the previous fiscal year. Major factors included an increase of ¥275 million in trade receivable (notes and accounts receivable-trade, contract assets, and electronically recorded monetary claims-operating) a decrease of ¥999 million in securities due to a decrease in monetary trusts, an increase of ¥3,149 million in inventory assets such as raw materials and supplies associated with the increase in order backlog, an increase of ¥595 million in other current assets, an increase of ¥373 million in goodwill, a decrease of ¥785 million in investment securities associated with reducing cross-shareholdings, and an increase of ¥427 million in deferred tax assets. Liabilities were ¥16,330 million, an increase of ¥2,706 million against the end of the previous fiscal year. Major factors included an increase of ¥1,067 million in accounts payable (notes and accounts payable – trade and electronically recorded obligations – operating) due to an increase in production and sales activities from increased sales, and an increase of ¥1,619 million in other current liabilities, mainly contract liabilities associated with the increase in orders received. Net assets were ¥45,592 million, an increase of ¥607 million against the end of the previous fiscal year. Major factors included the recording of ¥1,905 million in profit attributable to owners of parent in fiscal 2021, an increase of ¥539 million in retained earnings resulting from ¥1,350 million in dividends of surplus, a decrease of ¥1,055 million due to the acquisition of treasury shares in accordance with a flexible capital policy in response to changes in the business environment, and an increase of ¥1,278 million in foreign currency translation adjustment. As a result, the equity-to-asset ratio stood at 73.3%, a decrease of 3.5 points from the end of the previous fiscal year. (3) Overview of Fiscal 2021 Cash Flows Cash and cash equivalents (hereinafter, “cash”) at the end of the fiscal year under review were ¥16,157 million, a decrease of ¥1,144 million from the beginning of the fiscal year. This was mainly the result of net cash provided by operating activities of ¥2,018 million, net cash used in investing activities of ¥932 million, net cash used in financing activities of ¥2,830 million, and an increase in effect of exchange rate change on cash and cash equivalents of ¥600 million. The status of each cash flow and the factors behind that for the fiscal 2021 are as follows. Net cash provided by operating activities was ¥2,018 million, compared with net cash provided of ¥3,041 million in the previous fiscal year. The main sources of cash were profit before income taxes of ¥2,711 million, recording depreciation of ¥1,298 million, and outflow of cash of ¥2,388 million for an increase in inventories associated with the increase in order backlog, and an increase in cash of ¥545 million due to increase in trade payables. Net cash used in investing activities was ¥932 million, compared with net cash used of ¥2,034 million in the previous fiscal year. This was primarily due to a payment of ¥846 million for the acquisition of shares of a subsidiary resulting in a change in the scope of consolidation. Net cash used in financing activities was ¥2,830 million, compared with net cash used of ¥1,503 million in the previous fiscal year. This was mainly due to cash dividends paid of ¥1,346 million and purchase of treasury shares of ¥1,066 million. – 3 – Six months ending September 30, 2022 Fiscal year ending March 31, 2023 Equipment Business Service Business Other Business Elimination Total (4) Outlook for Fiscal 2022 Towards realizing the Company’s long-term vision, ESPEC Vision 2025, it has been executing medium-term management plans every four years (Stage I through Stage III), and has now started the final stage, medium-term management plan “Progressive Plan 2025.” Under the new medium-term management plan, the Company will steadily execute investment and strategies for growth under the basic policy, “Breaking through the inertia and the habits of individuals and workplaces and contributing to the practical application of advanced technologies,” as it aims to realize the long-term vision. The business environment in the fiscal year ending March 31, 2023 will be characterized by continued uncertainty, with surging raw materials prices and logistics costs, a shortage of electronics components, as well as a worsening international situation and the spread of infection. However, against the backdrop of digitalization and decarbonization in society, the Company expect demand for environmental testing to remain brisk, mainly in cutting-edge technology fields such as IoT and next-generation automobiles. Based on this business environment, the Company’s forecast for fiscal 2022 (the year ending March 31, 2023) is for net sales of ¥50.0 billion, operating profit of ¥5.0 billion, and profit attributable to owners of parent of ¥3.6 billion. The Company will continue striving to normalize product delivery times and improve earnings, while aiming to increase sales by strengthening its global marketing and expanding the product lineup. Forecasts of consolidated operating results for fiscal 2022, ending March 31, 2023 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 23,500 50,000 % 33.8 19.5 Millions of yen 1,950 5,000 % 392.2 153.9 Millions of yen 2,000 5,100 % 321.2 119.6 Millions of yen 1,300 3,600 % 463.7 88.9 Yen 58.11 160.92 Forecasts of consolidated operating results by segment for fiscal 2022 (Full-term) Orders received (Millions of yen) Net sales (Millions of yen) Operating profit (Millions of yen) 41,900 6,600 1,800 (300) 50,000 42,100 6,500 1,700 (300) 50,000 4,620 350 30 0 5,000 * There are marked seasonal fluctuations in the Group’s performance based on quarterly sales because of a strong trend towards contractual deliveries occurring in the second and fourth quarters as a result of customers’ budget implementation. (5) Basic Policy on Profit Distributions and Dividends for Fiscal 2021 and Fiscal 2022 The Company recognizes the return of profits to shareholders as an important management priority, and believes that constantly raising enterprise value is the key element in ensuring improved shareholder returns. Regarding the dividend for the fiscal year under review, the Company decides dividends in consideration of continuity and the consolidated dividend payout ratio, and plans to pay an increased year-end dividend of ¥42 per share. Together with the payment of an interim dividend of ¥18 per share, the Company will pay an annual dividend of ¥60 per share for fiscal 2021. The Company plans to pay an annual dividend of ¥69 per share in total, comprising a dividend of ¥65 per share and a commemorative dividend of ¥4 per share for the Company’s 75th founding anniversary. The interim dividend will be ¥24 per share (including a commemorative dividend of ¥2). For details of the 75th founding anniversary commemorative dividend, please refer to “Notice Concerning Commemorative Dividend to Mark the Company’s 75th Anniversary” published today (May 13, 2022). 2. Basic Stance on the Selection of Accounting Standards The Company’s policy is to create consolidated financial statements in accordance with Japanese standards, in consideration of enabling comparisons of fiscal periods for the consolidated financial statements and enabling comparisons with other companies, and also on taking into account that many of its stakeholders are shareholders and creditors within Japan. The Company intends to consider the adoption of international accounting standards in light of factors such as trends in the adoption of international accounting standards by peer companies in the same industry in Japan, and changes in the composition of foreign shareholders in those companies. – 4 – (Millions of yen) As of March 31, 2021 As of March 31, 2022 13,398 13,708 － 2,217 3,902 1,563 1,745 2,053 1,640 (47) 40,182 12,276 (7,406) 4,869 2,777 (1,882) 895 5,131 (3,818) 1,312 4,601 826 (157) 669 20 12,368 324 463 787 3,697 406 117 1,081 (33) 5,269 18,424 58,607 13,254 － 13,595 2,607 2,902 2,036 2,805 3,670 2,236 (30) 43,076 12,673 (7,758) 4,915 3,096 (2,088) 1,007 5,309 (4,063) 1,245 4,632 899 (326) 573 13 12,388 698 586 1,284 2,912 502 544 1,215 (2) 5,172 18,845 61,922 3. Consolidated Financial Statements (1) Consolidated Balance Sheets Assets Current assets Cash and deposits Notes and accounts receivable – trade Notes and accounts receivable – trade, and contract assets 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 Goodwill Other Total intangible assets Investments and other assets Investment securities Retirement benefit asset Deferred tax assets Other Allowance for doubtful accounts Total investments and other assets Total non-current assets Total assets – 5 – (Millions of yen) As of March 31, 2021 As of March 31, 2022 2,745 3,484 146 74 356 408 18 15 181 4 3,333 10,769 318 588 67 152 4 22 534 1,164 2,853 13,623 6,895 7,120 31,297 (1,181) 44,132 1,501 (663) 15 (0) 852 － 44,984 58,607 3,478 3,817 － 82 428 487 10 82 178 16 4,953 13,537 269 560 245 93 4 22 534 1,063 2,792 16,330 6,895 7,120 31,836 (2,236) 43,616 1,109 (663) 1,294 21 1,762 213 45,592 61,922 Liabilities Current liabilities Notes and accounts payable – trade Electronically recorded obligations – operating Short-term borrowings Current portion of long-term borrowings Income taxes payable Provision for bonuses Provision for bonuses for directors (and other officers) Provision for share awards for directors (and other officers) Provision for product warranties Provision for loss on orders received Other Total current liabilities Long-term borrowings Deferred tax liabilities Retirement benefit liability Provision for share awards for directors (and other officers) Provision for retirement benefits for directors (and other officers) Asset retirement obligations Deferred tax liabilities for land revaluation Other Total non-current liabilities 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 Revaluation reserve for land Foreign currency translation adjustment Remeasurements of defined benefit plans Total accumulated other comprehensive income Non-controlling interests Total net assets Total liabilities and net assets – 6 – (2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income Consolidated Statements of Income (Millions 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 Salaries and allowances Research and development expenses Provision for bonuses Provision for product warranties Provision for share awards for directors (and other officers) Commission expenses Provision for bonuses for directors (and other officers) Amortization of goodwill Other Total selling, general and administrative expenses Operating profit Non-operating income Interest income Dividend income Subsidy income Foreign exchange gains Other Total non-operating income Non-operating expenses Interest expenses Loss on investments in investment partnerships Commission expenses Other Total non-operating expenses Ordinary profit Extraordinary income Gain on sale of non-current assets Gain on sale of investment securities Total extraordinary income Extraordinary losses Loss on retirement of non-current assets Loss on sale of non-current assets Loss on sale of investment securities Impairment losses Total extraordinary losses Profit before income taxes Income taxes – current Income taxes – deferred Total income taxes Profit Profit attributable to non-controlling interests Profit attributable to owners of parent – 7 – 38,668 25,255 13,412 3,440 1,302 129 128 75 1,255 18 62 4,427 10,839 2,572 17 81 25 120 71 316 26 7 8 5 48 2,840 7 9 17 15 0 0 1 17 2,840 896 (17) 878 1,961 － 1,961 41,852 27,849 14,003 3,891 1,035 153 119 17 1,513 10 99 5,193 12,034 1,968 53 95 4 184 82 419 40 － 8 16 66 2,322 2 396 399 10 0 － － 10 2,711 946 (145) 800 1,910 4 1,905 Consolidated Statements of Comprehensive Income (Millions 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 Total other comprehensive income Comprehensive income Comprehensive income attributable to Comprehensive income attributable to owners of parent Comprehensive income attributable to non-controlling interests 1,961 570 578 160 1,309 3,271 3,271 － 1,910 (391) 1,278 22 909 2,820 2,815 4 – 8 – (3) Consolidated Statements of Changes in Net Assets Year Ended March 31, 2021 (Millions of yen) Shareholders’ equity Share capital Capital surplus Retained earnings Treasury shares Total shareholders’ equity 6,895 7,120 30,325 (1,180) 43,160 6,895 7,120 30,325 (1,180) 43,160 Balance at beginning of current period Cumulative effects of changes in accounting policies Restated balance Changes of items during period Dividends of surplus Profit attributable to owners of parent Purchase of treasury shares Disposal of treasury shares Change in scope of consolidation Other Net changes of items other than shareholders’ equity Total changes of items during period Balance at end of current period Balance at beginning of current period Cumulative effects of changes in accounting policies Changes of items during period Dividends of surplus Profit attributable to owners of parent Purchase of treasury shares Disposal of treasury shares Change in scope of consolidation Other Net changes of items other than shareholders’ equity Total changes of items during period Balance at end of current period － 6,895 － 7,120 972 31,297 (0) (1,181) Accumulated other comprehensive income Valuation difference on available-for-sale securities Revaluation reserve for land Foreign currency translation adjustment Remeasure-ments of defined benefit plans Total accumulated other comprehen-sive income Non-controlling interests Total net assets 930 (662) (535) (161) (428) － 42,731 Restated balance 930 (662) (535) (161) (428) － 42,731 (1,290) 1,961 300 0 (0) (1,290) 1,961 － (0) － 300 0 971 44,132 (1,290) 1,961 (0) － 300 0 1,281 2,253 44,984 － － － 570 570 (0) (0) 1,501 (663) 550 550 15 – 9 – 160 160 (0) 1,281 1,281 852 Shareholders’ equity Share capital Capital surplus Retained earnings Treasury shares (Millions of yen) Total shareholders’ equity 6,895 7,120 31,297 (1,181) 44,132 Restated balance 6,895 7,120 31,285 (1,181) 44,120 Year Ended March 31, 2022 Balance at beginning of current period Cumulative effects of changes in accounting policies Changes of items during period Dividends of surplus Profit attributable to owners of parent Purchase of treasury shares Disposal of treasury shares Change in scope of consolidation Other Net changes of items other than shareholders’ equity Total changes of items during period Balance at end of current period Balance at beginning of current period Cumulative effects of changes in accounting policies Changes of items during Period Dividends of surplus Profit attributable to owners of parent Purchase of treasury shares Disposal of treasury shares Change in scope of consolidation Other Net changes of items other than shareholders’ equity Total changes of items during period Balance at end of current period Accumulated other comprehensive income Valuation difference on available-for-sale securities Revaluation reserve for land Foreign currency translation adjustment Remeasure-ments of defined benefit plans Total accumulated other comprehen-sive income Non-controlling interests Total net assets 1,501 (663) 15 (0) 852 － 44,984 Restated balance 1,501 (663) 15 (0) 852 － 44,972 (12) (1,350) 1,905 (3) 551 31,836 － 6,895 － 7,120 (391) (391) 1,109 － － (663) 1,278 1,278 1,294 – 10 – (1,066) 11 (1,055) (2,236) (12) (1,350) 1,905 (1,066) 11 － (3) (503) 43,616 (12) (1,350) 1,905 (1,066) 11 － (3) 22 22 21 909 909 1,762 213 1,123 213 213 619 45,592 (Millions of yen) Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 (4) Consolidated Statements of Cash Flows Cash flows from operating activities Profit before income taxes Depreciation Impairment losses Amortization of goodwill Increase (decrease) in allowance for doubtful accounts Increase (decrease) in provision for bonuses for directors (and other officers) Increase (decrease) in provision for share awards for directors (and other officers) Increase (decrease) in retirement benefit liability Interest and dividend income Interest expenses Decrease (increase) in trade receivables Decrease (increase) in inventories Increase (decrease) in trade payables Other, net Subtotal Interest and dividends received Interest paid Income taxes refund (paid) Net cash provided by (used in) operating activities Cash flows from investing activities Net decrease (increase) in trust beneficiary right Purchase of property, plant and equipment and intangible assets Proceeds from sale of property, plant and equipment and intangible assets Purchase of investment securities Proceeds from sale and redemption of investment securities Payments for investments in capital Proceeds from collection of loans receivable Purchase of shares of subsidiaries resulting in change in scope of consolidation Other, net Net cash provided by (used in) investing activities Cash flows from financing activities Dividends paid Net increase (decrease) in short-term borrowings Repayments of long-term borrowings Purchase of treasury shares Other, net Net cash provided by (used in) financing activities Effect of exchange rate change on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Increase in cash and cash equivalents resulting from inclusion of subsidiaries in consolidation Cash and cash equivalents at end of period – 11 – 2,840 1,061 1 62 7 0 89 9 (99) 26 2,661 (299) (2,000) (554) 3,806 98 (26) (836) 3,041 315 (1,711) 10 (70) 14 (593) 0 － － (2,034) (1,288) (99) (53) (0) (60) (1,503) 277 (218) 16,779 740 17,301 2,711 1,298 － 99 (52) (7) 18 20 (148) 40 389 (2,388) 545 97 2,624 197 (41) (761) 2,018 (65) (680) 5 － 643 － 0 (846) 10 (932) (1,346) (152) (76) (1,066) (188) (2,830) 600 (1,144) 17,301 － 16,157 (5) Notes to the Consolidated Financial Statements Notes on the assumption of a going concern Not applicable Important Matters Concerning the Basis for Preparing Consolidated Financial Statements 1. Scope of Consolidation (1) Number of consolidated subsidiaries: 13 Name of main consolidated subsidiary: ESPEC NORTH AMERICA, INC. Note: From fiscal 2021, ESPEC THERMAL TECH SYSTEM CORP. has been included in the scope of consolidation because the (2) Name of main non-consolidated subsidiary: ESPEC ENGINEERING VIETNAM CO., LTD. Company has acquired 80% of its shares. Reason for exclusion from scope of consolidation: The non-consolidated subsidiaries have been excluded from the scope of consolidation because of their small size and because their total assets, net sales, net income (corresponding to equity) and retained earnings (corresponding to equity) have a negligible effect on the consolidated financial statements of the ESPEC Group. 2. Application of the Equity Method (1) Number of non-consolidated subsidiaries accounted for using the equity method: None (2) Number of affiliates accounted for using the equity method: None (3) Some non-consolidated subsidiaries (ESPEC ENGINEERING VIETNAM CO., LTD. and others) not accounted for using the equity method have been excluded from the scope of companies accounted for by the equity method as they have a negligible effect on the consolidated net income and retained earnings of the ESPEC Group, and are immaterial overall. 3. Fiscal Year of Consolidated Subsidiaries The fiscal year-ends of consolidated subsidiaries SHANGHAI ESPEC ENVIRONMENTAL EQUIPMENT CORP., ESPEC ENVIRONMENTAL EQUIPMENT (SHANGHAI) CO., LTD., ESPEC TEST TECHNOLOGY (SHANGHAI) CO., LTD., ESPEC TEST EQUIPMENT (GUANGDONG) CO., LTD., and ESPEC (CHINA) LIMITED are December 31. These subsidiaries are included in the scope of consolidation based on a provisional financial closing of accounts on March 31, the consolidated closing date. 4. Summary of Significant Accounting Policies (1) Valuation standards and accounting treatment for important assets Among available-for-sale securities, with those other than non-listed stocks, etc. the value is determined by the market price, with unrealized gains and losses, net of applicable taxes, reported in a separate component of net assets, and the cost of stocks sold determined by the moving average method. With non-listed stocks, etc. the cost is determined by the moving average method. 1) Marketable securities: 2) Derivatives: Market value 3) Inventories: Work in process is mainly stated by the specific identification method; other inventories are mainly stated using the acquisition cost method, cost being determined by the weighted average method (the book value in the balance sheet is reduced when the profitability has declined). (2) Method for depreciating and amortizing important assets 1) Property, plant and equipment (excluding lease assets): The Company uses the straight-line method. Estimated useful lives are as follows: Buildings 15-50 years 2) Intangible assets (excluding lease assets): The Company uses the straight-line method. Estimated useful lives are as follows: Software used by the Company 5 years – 12 – Depreciation equivalents are accounted for by the straight-line method, assuming the lease period to be the useful lives and the residual value to be zero. 3) Lease assets: (3) Accounting for important allowances 1) Allowance for doubtful accounts: 2) Allowance for bonuses: 3) Allowance for directors’ bonuses: 4) Reserve for product warranties: 5) Allowance for loss on orders received: 6) Allowance for directors’ retirement benefits: 7) Executive share benefit reserve: Additional Information The allowance for doubtful accounts provides for possible losses arising from default on accounts receivable. It comprises a general reserve for accounts receivable based on historical default rates, and an estimated credit loss for accounts receivable based on an individual assessment of each account. The allowance for employees’ bonuses is based on the estimated requirements for the fiscal year. The allowance for directors’ bonuses is based on the estimated requirements for the fiscal year. The reserve for product warranties is provided to cover the after service expenses, which are free during the warranty period, and are calculated based on historical claim rates for warranty expenses proportional to net sales. The allowance for loss on orders received provides for possible losses in the future arising from the orders the Company received. The amount of potential loss on orders received as of the end of the fiscal year under review in this report that can be rationally estimated is recorded as an allowance for conceivable losses on orders received in subsequent fiscal years. For the Company’s domestic consolidated subsidiaries, the Board of Directors has decided to terminate retirement benefits for directors. The Company books an allowance for the monetary amount for the period served by current directors up to the date of termination of retirement benefits. The Company posted provision for delivery of shares based on the estimated amount of the share-benefit obligation at the end of the fiscal year under review in preparation for providing Company shares to the Directors, etc. Performance-linked share-based remuneration system Since August 2018, the Company has introduced a performance-linked share-based remuneration system (hereinafter referred to as “the System”), for the Company’s Directors (excluding Outside Directors) and Executive Officers (hereinafter, Directors other than Outside Directors and Executive Officers who do not concurrently serve as Directors are collectively referred to as “Directors, etc.”). The System is a performance-linked, share-based remuneration system under which the Company shares are acquired through a trust (hereinafter, referred to as “the Trust”) using funds contributed by the Company, and the Directors, etc. are provided with the Company shares and money equivalent to the market value of the Company shares (hereinafter referred to as “the Company shares, etc.”) through the Trust in accordance with the Regulations for Delivery of Shares to Officers stipulated by the Company. Regarding the accounting procedure for the System, the Company applies the gross method whereby the Trust’s assets, liabilities, and profit and loss are included in the Company’s consolidated financial statements. Moreover, the Company posted provision for delivery of shares to officers based on the estimated amount of the share-benefit obligation at the end of fiscal 2021 in preparation for providing Company shares to the Directors, etc. in accordance with the Regulations for Delivery of Shares to Officers. The following shows the book value and the number of treasury stocks held. Book value of treasury stocks Book value of treasury stocks held by the Company Book value of treasury stocks held by the Trust Number of treasury stocks Number of treasury stocks held by the Company Number of treasury stocks held by the Trust Previous consolidated fiscal year March 31, 2021 This consolidated fiscal year March 31, 2022 1,181 Millions of yen 2,236 Millions of yen 787 Millions of yen 1,854 Millions of yen 393 Millions of yen 382 Millions of yen 915,593 shares 731,793 shares 183,800 shares 1,410,246 shares 1,231,846 shares 178,400 shares – 13 – (4) Change in accounting method of retirement benefits 1) Attribution method for projected retirement benefits As regards calculating retirement benefit obligations, at the end of the consolidated fiscal year under review the Company changed its method for attributing projected retirement benefits to accounting periods from the straight-line method to the benefit formula method. 2) Amortization method of actuarial gains or losses Actuarial gains or losses are amortized from the consolidated fiscal year following the consolidated fiscal year in which they arise, using the straight-line method over a fixed number of years (10 years), but no more than the average remaining years of service of employees. (5) Standard for recording significant revenues and expenses 1) Details of the main obligations based on contracts with customers in the main businesses The Group’s main businesses comprise the Equipment Business and the Service Business. Their performance obligations include manufacturing and sales of environmental testing chambers, etc., installation of the products, onsite calibration operations, relocation, maintenance, repair, and laboratory testing services. With the exception of deposits, the consideration for transactions is mainly received within one year from the satisfaction of the performance obligations and does not include a significant financial component. 2) Ordinary timing for recognition of revenue from main performance obligations a. For provision of products and services that does not involve installation and onsite calibration operations, the performance obligation is satisfied at the time when the product is delivered or the service provided, and so revenue is recognized at the time of product delivery or service provision. b. For provision of products and services that involves installation and onsite calibration operations, the performance obligation is satisfied at the time when the product installation and onsite calibration operations are completed, and so revenue is recognized at the time of completion of product installation and onsite calibration. c. For sales of certain products and relocation of products, etc., the customer controls the product as the asset is generated or the value of the asset increases, and revenue is therefore recognized by estimating the progress of the satisfaction of the performance obligation is estimated and recognizing revenue by set periods based on the degree of progress. The method for estimating the progress of satisfaction of the performance obligation is the input method based on cost. The measurement of the degree of progress is based on the ratio of the costs incurred by the period end to the total estimated cost for each contract. d. For product maintenance contracts and so forth, the performance obligations are satisfied over a certain period, and revenue is recognized according to the degree of progress on satisfaction of the performance obligations over the contract period. 3) Information regarding performance obligations in the case where warranties and related obligations are included in contracts Sales contracts for environmental testing chambers and so forth contain product warranty obligations to provide free repair or exchange for faults due to product defects arising within around one year to five years after delivery. These warranty obligations are recognized as reserve for product warranties since they provide customers with a warranty that the product will function as intended in accordance with the specifications stipulated in the contract with the customer. (6) Standards for Translation of Material Foreign Currency-Denominated Assets and Liabilities Into Japanese Yen Monetary receivables and payables denominated in foreign currencies are translated into Japanese yen at the current exchange rates at the balance sheet date, with the foreign currency exchange gains and losses from translation recognized in the statement of income. The assets and liabilities of foreign subsidiaries, etc. are translated into Japanese yen at the current exchange rates at the balance sheet date. Revenue and expenses of foreign subsidiaries, etc. are translated into Japanese yen at the average rate for the year. Differences arising from such translation are shown as “Foreign currency translation adjustments” as separate components of net assets. (7) Method and Period of Goodwill Amortization Goodwill is amortized by the straight-line method, equally allocating the cost over a period of no longer than 20 years. (8) Scope of Cash and Cash Equivalents on the Consolidated Statements of Cash Flows Cash and cash equivalents include cash in hand and deposits as well as short-term investments that are readily convertible into cash and that are exposed to insignificant risk of changes in value, all of which mature or become due within three months of the date of acquisition. (9) Other Significant Notes on Preparation of Consolidated Financial Statements Treatment of Consumption Tax: Figures are presented exclusive of consumption taxes and local consumption taxes for accounting purposes. – 14 – Changes in accounting policies 1. Application of Accounting Standard for Revenue Recognition, etc. The Company has applied the “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020; hereinafter referred to as “Revenue Recognition Accounting Standards”), etc. from the beginning of the first quarter of the fiscal year ended March 31, 2022, and recognizes revenue as the amount expected to be received in exchange for the promised goods or services when the control of the goods or services is transferred to the customer. In applying the Revenue Recognition Accounting Standards, etc., the Company follows the transitional treatment set forth in the proviso of Paragraph 84 of the Revenue Recognition Accounting Standards. The cumulative effect of retroactively applying the new accounting policy to periods prior to the beginning of the first quarter of the fiscal year ended March 31, 2022 has been added to or subtracted from retained earnings at the beginning of the first quarter of fiscal 2021, and the new accounting policy has been applied from the beginning balance of that period. However, the Company has applied the method stipulated in Paragraph 86 of the Revenue Recognition Standards, and has accordingly not retroactively applied the new accounting policy to contracts for which the nearly the entire amount of revenue had been recognized prior to the beginning of the first quarter of fiscal 2021. In addition, the Company has applied the method stipulated in proviso (1) to Paragraph 86 of the Revenue Recognition Standards, wherein accounting procedures are conducted based on contract conditions after reflecting any changes in contracts made prior to the beginning of the first quarter of fiscal 2021, and then the cumulative effect is added to or subtracted from retained earnings at the beginning of the first quarter of fiscal 2021. The resulting impact on the consolidated financial statements for the fiscal year ended March 31, 2022 is inconsequential. As a result of applying the Revenue Recognition Accounting Standards, etc., “notes and accounts receivable-trade”, which was presented under “current assets” in the consolidated balance sheets of the previous fiscal year, has been included in “notes and accounts receivable-trade, and contract assets” from the current consolidated fiscal year. The Company has not reclassified the previous fiscal year using the new presentation method in accordance with the transitional treatment prescribed in Paragraph 89-2 of the Revenue Recognition Accounting Standards. In addition, information showing a breakdown of revenue generated from contracts with customers is not presented for the fiscal year ended March 31, 2021 in accordance with the transitional treatment prescribed in Paragraph 89-3 of the Revenue Recognition Accounting Standards 2. 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; hereinafter, “Fair Value Measurement Accounting Standards”) from the beginning of the first quarter of the fiscal year ended March 31, 2022. In accordance with the transitional treatment prescribed in Paragraph 19 of the Fair Value Measurement Accounting Standards and Paragraph 44-2 of the “Accounting Standard for Financial Instruments” (ASBJ Statement No. 10, July 4, 2019), the Company will apply the new accounting policies set forth in the Fair Value Measurement Accounting Standards, etc. at a future date. This has no impact on the quarterly consolidated financial statements for the fiscal year ended March 31, 2022. Additional information Impacts of the COVID-19 pandemic As a result of the impacts of the COVID-19 pandemic, requests for self-restraint regarding movement and travel restrictions continue to impose unavoidable limitations on the Group’s operating activities. Consequently, accounting decisions are being made with the assumption that circumstances will gradually normalize from the consolidated fiscal year under review. As the impact of COVID-19 on economic activities remains highly uncertain, a change to the abovementioned assumptions may affect the Company’s financial condition and business results in the future. – 15 – Segment Information and Others Segment Information 1. Overview of reportable segments ESPEC’s reportable segments refer to those components of the Company for which separate financial information is available and such information is reviewed regularly by the Board of Directors in determining the allocation of resources and in evaluating performance. The Company classifies its business activities into segments according to the business format. There are three reportable segments: Equipment Business, Service Business, and Other Business. The Equipment Business provides environmental test chambers, energy device equipment and semiconductor equipment. The Service Business is engaged in after-sales service and engineering and laboratory testing services and facility rentals. The Other Business is involved with environmental preservation and plant production systems. 2. Method of calculating the monetary values of net sales, income or loss, assets, and other items of each reportable segment Accounting treatment methods for reportable segments are the same as the methods shown in the “Important Matters Concerning the Basis for Preparing Consolidated Financial Statements.” Inter-segment sales and transfers are based on market prices and certain other factors. 3. Information concerning the monetary values of net sales, income or loss, assets and other items of each reportable segment Previous consolidated fiscal year (from April 1, 2020 to March 31, 2021) Reportable segment Equipment Business Service Business Other Business Total Adjustment *1 (Millions of yen) Carried amount on consolidated financial statements *2 Net sales Sales to external customers 30,649 5,778 2,239 38,668 19 284 1 305 (305) Total 30,669 6,063 2,241 38,973 2,062 446 60 2,569 34,772 5,797 1,034 41,604 17,003 758 62 796 263 － 274 19 － 7 1,041 62 1,078 Internal sales or transfers between segments Segment profit Segment assets Other Depreciation expenses Amortization of goodwill Increases in property, plant and equipment and intangible assets *1. Adjustments are as follows. － (305) 3 － － 101 38,668 － 38,668 2,572 58,607 1,041 62 1,179 1) “Adjustment” for segment sales mainly represents eliminations of inter-segment transactions. 2) “Adjustment” for segment profit mainly represents eliminations of inter-segment transactions. 3) “Adjustment” for segment assets mainly represents eliminations of inter-segment transactions and company-wide assets. Company-wide assets of ¥17,186 million primarily consist of surplus working capital at the parent company (cash and deposits, short-term investment securities, etc.), long-term investment funds (investment securities) and assets related to administrative divisions. 4) “Adjustment” for depreciation expenses mainly represents eliminations of inter-segment transactions. 5) “Adjustment” for increases in property, plant and equipment and intangible assets mainly represents eliminations of intersegment transactions and company-wide assets. *2. Segment profit is adjusted to be consistent with the operating profit stated in the consolidated statements of profit. – 16 – This consolidated fiscal year (from April 1, 2021 to March 31, 2022) Reportable segment Equipment Business Service Business Other Business Total Adjustment *1 (Millions of yen) Carried amount on consolidated financial statements *2 Net sales Sales to external customers 34,499 6,167 1,184 41,852 － Internal sales or transfers between segments 18 239 3 261 (261) Total 34,518 6,407 1,188 42,114 Segment profit (loss) 1,370 618 (23) 1,966 42,346 5,772 1,251 49,370 12,551 Segment assets Other Depreciation expenses Amortization of goodwill Increases in property, plant and equipment and intangible assets *1. Adjustments are as follows. 961 99 640 271 － 207 19 － 6 1,253 99 855 (261) 2 － － 54 41,852 － 41,852 1,968 61,992 1,253 99 910 1) “Adjustment” for segment sales mainly represents eliminations of inter-segment transactions. 2) “Adjustment” for segment profit (loss) mainly represents eliminations of inter-segment transactions. 3) “Adjustment” for segment assets mainly represents eliminations of inter-segment transactions and company-wide assets. Company-wide assets of ¥12,996 million primarily consist of surplus working capital at the parent company (cash and deposits, short-term investment securities, etc.), long-term investment funds (investment securities) and assets related to administrative divisions. 4) “Adjustment” for depreciation expenses mainly represents eliminations of inter-segment transactions. 5) “Adjustment” for increases in property, plant and equipment and intangible assets mainly represents eliminations of inter-segment transactions and company-wide assets. *2. Segment profit is adjusted to be consistent with the operating profit stated in the consolidated statements of profit. Related Information Previous consolidated fiscal year (from April 1, 2020 to March 31, 2021) 1. Information by product and service Sales to external customers 30,649 5,778 2,239 38,668 Equipment Business Service Business Other Business Total 2. Information by region (1) Net sales (2) Property, plant and equipment Japan U.S. China Others in Asia Others Total 20,823 3,452 7,320 4,831 2,240 38,668 Japan U.S. China Others in Asia Others Total 9,184 1,641 1,337 202 2 12,368 (Millions of yen) (Millions of yen) (Millions of yen) – 17 – This consolidated fiscal year (from April 1, 2021 to March 31, 2022) 1. Information by product and service Sales to external customers 34,499 6,167 1,184 41,852 Equipment Business Service Business Other Business Total (Millions of yen) (Millions of yen) (Millions of yen) (Millions of yen) Total (Millions of yen) Total 2. Information by region (1) Net sales (2) Property, plant and equipment Japan U.S. China Others in Asia Others Total 20,771 4,466 9,083 4,897 2,633 41,852 Japan U.S. China Others in Asia Others Total 9,040 1,743 1,384 215 4 12,388 Information on non-current assets and impairment loss by reportable segment Previous consolidated fiscal year (from April 1, 2020 to March 31, 2021) Equipment Business Service Business Other Business Corporate and elimination Impairment losses － － － 1 1 This consolidated fiscal year (from April 1, 2021 to March 31, 2022) Equipment Business Service Business Other Business Corporate and elimination Impairment losses － － － － － Information on amortization of goodwill and unamortized balance by reportable segment Previous consolidated fiscal year (from April 1, 2020 to March 31, 2021) Equipment Business Service Business Other Business Corporate and elimination Amortization Unamortized balance Amortization Unamortized balance 62 324 99 698 This consolidated fiscal year (from April 1, 2021 to March 31, 2022) Equipment Business Service Business Other Business Corporate and elimination (Millions of yen) Total 62 324 99 698 (Millions of yen) Total － － － － － － － － Information on gain on negative goodwill by reportable segment Previous consolidated fiscal year (from April 1, 2020 to March 31, 2021) No items to report