TVE Co., Ltd.
Consolidated Financial Statements andRelated Notes to the Year Ended September 30, 2023
and Independent Auditor's ReportTVE Co., Ltd. and Subsidiaries
Consolidated Balance Sheet
September 30, 2023

Millions of Yen
2023
2022
As Restated(Note 2.u)

ASSETS
CURRENT ASSETS:
Cash and cash equivalents (Note 15)
Receivables (Note 15):
Trade notes
Electronically recorded claims
Trade accounts
Contract assets
Other
Inventories (Note 7)
Prepaid expenses and other current assets
Total current assets
PROPERTY, PLANT, AND EQUIPMENT (Note 8):Land
Buildings and structures
Machinery and equipment
Furniture and fixtures
Leased assets
Construction in progress
Total property, plant, and equipment
INVESTMENTS AND OTHER ASSETS:
Investment securities (Notes 6 and 15)
SoftwareLeased assets
Goodwill
Customer-related assets
Deferred tax assets (Note 11)
Other assets
Total investments and other assets

Thousands of
U.S. Dollars(Note 1)2023
LIABILITIES AND EQUITY¥ 4,707¥ 4,126$ 31,382

126
413
1,825
83
248
2,345
139

147
583
1,614
31
312
2,055
173

845
2,757
12,172557
1,656
15,635
930

9,890

9,043

65,934

466
1,048
596
53
48
36

466
862
560
44
36
145

3,113
6,990
3,976
355
326
244

2,250

2,116

15,004

1,265
151
71
55
111
16
252

1,140
176
41
62
134
94
164

8,440
1,009
479
370
740
113
1,682

1,924

1,814

12,833CURRENT LIABILITIES:
Short-term bank loans
Current portion of long-term debts (Notes 8, 14, and 15)
Payables:Trade notes
Electronically recorded obligations
Trade accounts
Other
Contract liabilities (Note 12)
Income taxes payable
Allowance for losses on contracts (Note 3)
Accrued expenses
Other current liabilities¥ 14,065¥ 12,974

¥

100
215

¥

450
138

$

667
1,438

63
240
331
387
640
9
389
502
66

89
214
346
481
138
188
349
420
19

421
1,606
2,208
2,583
4,272
60
2,599
3,353
444

2,947

2,837

19,651

LONG-TERM LIABILITIES:Long-term debts (Notes 8, 14, and 15)
Deferred tax liabilities (Note 11)
Net defined benefit liability (Note 9)
Other long-term liabilities

305
58
774
14

107
710
10

2,033
387
5,163
97

Total long-term liabilities

1,152

828

7,680

1,739
1,663
6,126

1,739
1,663
5,784

11,597
11,092
40,841(203 )(211 )(1,360 )673
89(123 )
9,965

335
62
(64 )
9,308
0

4,492
599
(821 )
66,440

9,965

9,308

66,440¥ 14,065¥ 12,974$ 93,771

Total current liabilities

COMMITMENTS AND CONTINGENT LIABILITIES (Note 14)
EQUITY (Note 10):
Common stock – authorized, 10,040,000 shares;
issued, 2,678,600 shares in 2023 and 2022
Capital surplus
Retained earnings
Treasury stock – at cost, 123,967 shares in 2023 and 127,547
shares in 2022
Accumulated other comprehensive income:Unrealized gain on available-for-sale securities
Foreign currency translation adjustments
Defined retirement benefit plans
Total
Non-controlling interests
Total equity

TOTAL

Millions of Yen
2023
2022
As Restated(Note 2.u)

Thousands of
U.S. Dollars(Note 1)2023

$ 93,771

TOTAL

See notes to consolidated financial statements.

-5-

TVE Co., Ltd. and Subsidiaries
Consolidated Statement of Operations
Year Ended September 30, 2023

Millions of Yen
2023
2022
SALES (Notes 12 and 18)

Thousands of
U.S. Dollars(Note 1)2023

¥ 9,396¥ 8,514$ 62,642

6,956

6,756

46,376

2,439

1,757

16,266

1,963

1,844

13,092

Operating income

476

(86 )

3,174

OTHER INCOME (EXPENSES):Interest and dividend income
Interest expense
Loss on disposal of property, plant, and equipment
Exchange gain (loss)
Subsidy income
Rent received
Profits on sales of scrap work
Gain on sales of securities
Other – net

47
(4 )
(22 )
(15 )
6
10
6
79
13

44
(11 )
(10 )
18
37
9
6
4
6

319
(32 )
(153 )(103 )
45
68
42
531
89

Other income – net

120

103

806

INCOME BEFORE INCOME TAXES

597

16

3,980

INCOME TAXES (Note 11):
Current
Deferred

175
(13 )

216
(138 )

1,170
(92 )

161

77

1,078

435

(60 )

2,902

COST OF SALES
Gross profit
SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES(Note 13)

Total income taxes
NET INCOME
NET INCOME (LOSS) ATTRIBUTABLE TO NONCONTROLLING INTERESTS(0 )NET INCOME ATTRIBUTABLE TO OWNERS OF THE PARENT

¥ 435

¥

(60 )

Yen

PER SHARE OF COMMON STOCK (Notes 2.q and 17):
Basic net income
Cash dividends applicable to the year

See notes to consolidated financial statements.

-6-

2023

2022

¥186
40

¥(26 )
50$ 2,902
U.S. Dollars
2023

$1.24
0.27

TVE Co., Ltd. and Subsidiaries
Consolidated Statement of Comprehensive Income
Year Ended September 30, 2023

Millions of Yen
2023
2022
As Restated(Note 2.u)

NET INCOME

Thousands of
U.S. Dollars(Note 1)
2023

¥ 435

¥ (60 )

$ 2,902

OTHER COMPREHENSIVE INCOME (LOSS) (Note 16):
Unrealized gain on available-for-sale securities
Foreign currency translation adjustments
Defined retirement benefit plans

338
27
(58 )

51
44
(64 )

2,256
180
(389 )Net other comprehensive (loss) income

307

30

2,047

COMPREHENSIVE INCOME¥ 742¥ (29 )

$ 4,949

TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO:
Owners of the parent
Non-controlling interests¥742¥(29 )(0 )$4,949See notes to consolidated financial statements.

-7-

TVE Co., Ltd. and Subsidiaries
Consolidated Statement of Changes in Equity
Year Ended September 30, 2023
Shares/Millions of Yen
Common Stock Issued
Treasury Stock

BALANCE, OCTOBER 1, 2021
AS RESTATED (Note 2.u)
Net income attributable to owners of the parent
Cash dividends, ¥50 per share
Purchase of treasury stock
Disposal of treasury stock
Cancellation of treasury shares
Change in unrealized loss on available-for-salesecurities
Change in foreign currency translation
adjustments
Change in defined retirement benefit plans as
restated (Note 2.u)Change in non-controlling interests
BALANCE, OCTOBER 1, 2022

SharesAmountSharesAmountCapitalSurplusRetained
Earnings

2,678,600¥ 1,739

384,622¥ (638 )¥ 2,015¥ 5,948

¥ 284

¥ 18

¥

0

(60 )
(103 )
200(40,275 )(217,000 )(217,000 )

66
360

8
(360 )
51
44(64 )2,461,600

1,739

Net income attributable to owners of the parent
Cash dividends, ¥40 per share
Change in ownership interest of parent due totransactions with non-controlling interests
Purchase of treasury stock
Disposal of treasury stock
Cancellation of treasury shares
Change in unrealized loss on available-for-salesecurities
Change in foreign currency translation
adjustments
Change in defined retirement benefit plans
Change in non-controlling interests
BALANCE, SEPTEMBER 30, 2023

Millions of Yen
Accumulated Other Comprehensive Income
Unrealized
ForeignDefinedGain (Loss) on
Currency
Retirement
Available-for-Sale
Translation
BenefitSecurities
Adjustments
Plans
Total

127,547(211 )

1,663

5,784

335

62

(64 )

435
(93 )
(0 )
1,050
(4,630 )

(0 )
7

0

338
27
(58 )

¥ 9,366

Non-controlling
Interests

Total Equity¥ 0¥ 9,366(60 )(103 )(60 )(103 )

75

75

51

51

44

44

(64 )

9,308

(0 )

(64 )
(0 )

0

9,308

435
(93 )

435
(93 )

(0 )
(0 )
8

(0 )
(0 )
8

338

338

27
(58 )

27
(58 )
(0 )

(0 )
2,461,600¥ 1,739

123,967¥ (203 )¥ 1,663-8-¥ 6,126

¥ 673

¥ 89

¥ (123 )¥ 9,965¥¥ 9,965

TVE Co., Ltd. and Subsidiaries
Consolidated Statement of Changes in Equity
Year Ended September 30, 2023
Thousands of U.S. Dollars (Note 1)

BALANCE, OCTOBER 1, 2022

CommonStock Issued

TreasuryStock

AmountAmountCapitalSurplusRetained
Earnings$ 11,597$ (1,410 )$ 11,087$ 38,562

Net income attributable to owners of the parent
Cash dividends, $0.27 per share
Change in ownership interest of parent due to transactions
with non-controlling interests
Purchase of treasury stock
Disposal of treasury stock
Cancellation of treasury shares
Change in unrealized loss on available-for-sale securities
Change in foreign currency translation adjustments
Change in defined retirement benefit plans
Change in non-controlling interests
BALANCE, SEPTEMBER 30, 2023

Accumulated Other Comprehensive Income
Unrealized
ForeignDefinedGain (Loss) on
Currency
Retirement
Available-for-Sale
Translation
BenefitSecurities
Adjustments
Plans
Total
$ 2,236$ 419$ (432 )2,902(623 )
(2 )
(1 )
51

7
2,256
180
(389 )$ 62,059

Non-controlling
Interests

Total Equity$ 1$ 62,060

2,902(623 )

2,902(623 )

(2 )
(1 )
58

(2 )
(1 )
58

2,256
180
(389 )

2,256
180(389 )(1 )(1 )$ 11,597$ (1,360 )$ 11,092

See notes to consolidated financial statements.

-9-$ 40,841$ 4,492$ 599$ (821 )$ 66,440$$ 66,440

TVE Co., Ltd. and Subsidiaries
Consolidated Statement of Cash Flows
Year Ended September 30, 2023

Millions of Yen
2023
2022
OPERATING ACTIVITIES:
Income before income taxes¥ 597
Adjustments for:
Income taxes – paid
(634 )
Depreciation and amortization
368
Changes in assets and liabilities:(Increase) decrease in trade receivables and contract
assets(73 )(Increase) decrease in inventories(284 )(Decrease) increase in trade payables(15 )(Decrease) increase in allowance for losses on contracts
40
Increase (decrease) in contract liabilities
500
Other – net
613
Net cash (used in) provided by operating activities
1,111
INVESTING ACTIVITIES:
Decrease in time deposit
Payments for purchases of property, plant, and equipment
Payments for purchases of intangible assets
Proceeds from maturity of insurance funds
Proceeds from sales of securities and investment securities
Purchase of shares of subsidiaries resulting in change in scopeof consolidation
Other
Net cash used in investing activities
FINANCING ACTIVITIES:(Decrease) increase in short-term bank loans-net
Proceeds from issuance of long-term debt
Repayments of long-term debt
Dividends paid
Other
Net cash provided by (used in) financing activities(100 )(572 )
(52 )

¥

16

$ 3,980(268 )
330(4,230 )2,457

400(366 )
117
46(58 )(601 )(382 )(488 )(1,898 )(106 )
272
3,338
4,088
7,413

(359 )
(79 )
656

442

(15 )
(298 )

Thousands of
U.S. Dollars(Note 1)
2023

(667 )(3,819 )(351 )
2,950(1,021 )(3 )(806 )(350 )
400(171 )(93 )(45 )(260 )(98 )(103 )(34 )
214(2,333 )2,667(1,146 )(624 )(302 )(1,738 )FOREIGN CURRENCY TRANSLATION ADJUSTMENTS ON
CASH AND CASH EQUIVALENTS

27

45

186

NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS

580(929 )

3,873

4,126

5,055

27,509¥ 4,707¥ 4,126$ 31,382

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
CASH AND CASH EQUIVALENTS, END OF YEAR

See notes to consolidated financial statements.

- 10 -

450(101 )(1,988 )TVE Co., Ltd. and Subsidiaries
Notes to Consolidated Financial Statements
As of and for the Years Ended September 30, 2023 and 2022
1.

BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS
The accompanying consolidated financial statements have been prepared in accordance with theprovisions set forth in the Japanese Financial Instruments and Exchange Act and its related
accounting regulations and in accordance with accounting principles generally accepted in Japan,
which are different in certain respects as to the application and disclosure requirements ofInternational Financial Reporting Standards.
In preparing these consolidated financial statements, certain reclassifications and rearrangements
have been made to the consolidated financial statements issued domestically in order to present
them in a form which is more familiar to readers outside Japan. In addition, certain reclassifications
have been made to the 2022 consolidated financial statements to conform to the classifications usedin 2023.
The consolidated financial statements are stated in Japanese yen, the functional and presentation
currency of TVE Co., Ltd. (the "Company"). The translations of Japanese yen amounts into U.S.
dollar amounts are included solely for the convenience of readers outside Japan and have been
made at the rate of ¥150 to $1, the approximate rate of exchange at September 30, 2023. Suchtranslations should not be construed as representations that the Japanese yen amounts could be
converted into U.S. dollars at that or any other rate.
Japanese yen figures less than a million yen are rounded down to the nearest million yen, except forper share data.

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESa.

Consolidation – The consolidated financial statements as of September 30, 2023 and 2022,
include the accounts of the Company and all of its subsidiaries (together, the "Group").
All intercompany balances and transactions have been eliminated in consolidation. All material
unrealized profit included in assets resulting from transactions within the Group has also been
eliminated.

b.

Cash Equivalents – Cash equivalents are short-term investments that are readily convertible
into cash and are exposed to an insignificant risk of changes in value.
Cash equivalents include time deposits, certificates of deposit, commercial paper, and bondfunds, all of which mature or become due within three months of the date of acquisition.

c.

Inventories – Inventories are stated at the lower of cost or net selling value. Cost is determinedby the specific identification method for finished products and work in process and by theaverage cost method for raw materials and supplies.

d.

Marketable and Investment Securities – Marketable and investment securities are classified
and accounted for, depending on management's intent, as follows: (1) held-to-maturity debt
securities, for which there is a positive intent and ability to hold to maturity, are reported atamortized cost and (2) available-for-sale securities, which are not classified as either of theaforementioned securities, are reported at fair value, with unrealized gains and losses, net of
applicable taxes, reported in a separate component of equity.
Nonmarketable available-for-sale securities are stated at cost, determined by the movingaverage method. For other-than-temporary declines in fair value, investment securities are
reduced to net realizable value by a charge to the income statement.

- 11 -

e.

Property, Plant, and Equipment – Property, plant, and equipment are stated at cost.
Depreciation of property, plant, and equipment of the Company and its consolidated domestic
subsidiaries is computed substantially by the declining-balance method based on the estimateduseful lives of the assets, except for a foreign subsidiary which uses the straight-line method.
Additionally, the straight-line method is applied to buildings acquired after April 1, 1998, leaseassets, and building improvements and structures acquired on or after April 1, 2016. The range
of useful lives is principally from 28 to 45 years for buildings and structures, from 4 to 12 years
for machinery and equipment, and from 2 to 20 years for furniture and fixtures. The useful lives
for lease assets are the terms of the respective leases.

f.

Long-Lived Assets – The Group reviews its long-lived assets for impairment whenever eventsor changes in circumstance indicate the carrying amount of an asset or asset group may not berecoverable. An impairment loss is recognized if the carrying amount of an asset or asset groupexceeds the sum of the undiscounted future cash flows expected to result from the continued
use and eventual disposition of the asset or asset group. The impairment loss would bemeasured as the amount by which the carrying amount of the asset exceeds its recoverable
amount, which is the higher of the discounted cash flows from the continued use and eventual
disposition of the asset or the net selling price at disposition.

g.

Retirement and Pension Plans – The Company and certain consolidated subsidiaries haveseverance payment plans for employees. They are contributory funded defined benefit pension
plans and defined contribution pension plans.
The Company accounts for the liability for retirement benefits based on the projected benefit
obligations and plan assets at the consolidated balance sheet date. The projected benefit
obligations are attributed to periods on a benefit formula basis. Actuarial gains and losses andpast service costs that are yet to be recognized in profit or loss are recognized within equity(accumulated within other comprehensive income), after adjusting for tax effects, and arerecognized in profit or loss over 10 years, no longer than the expected average remaining
service period of the employees. The discount rate is determined using a single weightedaverage discount rate reflecting the estimated timing and amount of benefit payment.

h.

Allowance for Losses on Contracts – To account for losses on contracts for orders received,
an amount is estimated equal to the amount of foreseeable losses that can be reasonably
estimated at the end of the fiscal year.

i.

Asset Retirement Obligations – Asset retirement obligations are recorded for future liabilities,of an uncertain timing or amount, which relate to legal or constructive obligations todecommission or retire an asset. Such obligations typically arise following the acquisition,
construction, development, or normal operation of a tangible fixed asset. The valuation of theasset retirement obligation is calculated as the sum of the discounted cash flows required forcompleting future asset retirement activities and is first recognized in the period in which the
obligation arises, provided that a reasonable estimate can be made. If a reasonable estimate of
the timing and amount of the asset retirement obligation cannot be made in the same period it
arises, the liability is recognized in the first period in which a reliable estimate can be made.
Upon initial recognition of an asset retirement obligation, the income statement expense iscapitalized, thereby increasing the value of the underlying fixed asset. The capitalized expense
is subsequently charged to the income statement via depreciation, thereby matching the useful
economic life of the asset. Over time, the liability is accreted to its present value each period,
with a finance cost recognized in the income statement. Any subsequent revisions to the timing
or amount of the cash flows are recorded as adjustments to the book value of the asset
retirement liability and the corresponding asset.

- 12 -

j.

Revenue Recognition – The Group's principal businesses include development, manufactureand sale of various industrial valves, maintenance, and electrical equipment related businesses.
Performance obligation under a sales contract for products is satisfied upon delivery of the
products to the customer because the legal ownership, physical possession and significant risks
and economic value associated with the ownership of the products are transferred to thecustomer at that time and the Group is deemed to be entitled to receive payment for thetransaction from our customers. However, revenue is recognized at the time of shipment fordomestic sales. In addition, the group performance obligations for sales contracts of products tooverseas customers are satisfied based on the trade terms established by Incoterms whencontrol and risk are transferred to customers. Upon satisfaction of performance obligations, theGroup recognizes revenue.
For repair and inspection of various industrial valves, maintenance services are provided to thevalves, hence, provision of maintenance is a performance obligation where revenue isrecognized when the maintenance is completed. For electrical equipment related business, theinspection of measuring instruments is a performance obligation. Revenue recognition is overtime as the performance obligation is based on the percentage of completion which is fulfilledover a period of time, except for when the service is excepted to be performed within a shortperiod of time. When accrued costs could not be reasonably estimated to calculate thepercentage of completion, cost recovery method is used when costs can be recovered. If theperformance obligation is point in time, revenue is recognized when the service is provided.

k.

Research and Development Costs – Research and development costs are charged to theincome statement as they are incurred.

l.

Leases – Finance lease transactions are capitalized by recognizing lease assets and leaseobligations in the balance sheet.

m. Bonuses to Directors – Bonuses to directors are accrued for at the end of the year to which
the Directors' services relate.
n.

Income Taxes – The provision for income taxes is calculated based on the 'income before
taxes' included in the consolidated statement of income. The asset and liability approach isused to recognize deferred tax assets and liabilities for the expected future tax consequences of
temporary differences between the carrying amounts and the tax bases of assets and liabilities.
Deferred taxes are measured by applying currently enacted income tax rates to the temporary
differences.

o.

Foreign Currency Transactions – All short-term and long-term monetary receivables andpayables denominated in foreign currencies are translated into Japanese yen at the exchange
rates at the balance sheet date. The foreign exchange gains and losses from translation arerecognized in the consolidated statement of income to the extent that they are not hedged byforward exchange contracts.

p.

Foreign Currency Financial Statements – The balance sheet accounts of the consolidated
foreign subsidiary are translated into Japanese yen at the current exchange rate at the balance
sheet date, except for equity accounts, which are translated at the historical rate. Differences
arising on translation are shown as "Foreign currency translation adjustments" underaccumulated other comprehensive income in a separate component of equity. Income andexpense accounts of the foreign subsidiary are translated into yen at the average exchange rateduring the year.

q.

Per Share Information – Basic net income per share is computed by dividing net income
attributable to common shareholders by the weighted-average number of common shares
outstanding for the period.
Cash dividends per share presented in the accompanying consolidated income statement are
dividends applicable to the respective fiscal years, including dividends to be paid after the endof the year.
The weighted-average number of common shares outstanding for the years ended September
30, 2023 and 2022, were 2,336,704, and 2,308,415, respectively.
- 13 -

r.

Accounting Changes and Error Corrections – Under Accounting Standards Board of Japan("ASBJ") Statement No. 24, "Accounting Standard for Accounting Changes and Error
Corrections" and ASBJ Guidance No. 24, "Guidance on Accounting Standard for Accounting
Changes and Error Corrections," accounting treatments are required as follows: (1) Changes in
Accounting Policies – When a new accounting policy is applied following revision of an
accounting standard, the new policy is applied retrospectively, unless the revised accounting
standard includes specific transitional provisions, in which case the entity shall comply with thespecific transitional provisions. (2) Changes in Presentation – When the presentation of financial
statements is changed, prior-period financial statements are reclassified in accordance with thenew presentation. (3) Changes in Accounting Estimates – A change in an accounting estimate
is accounted for in the period of the change if the change affects that period only and isaccounted for prospectively if the change affects both the period of the change and future
periods. (4) Corrections of Prior-Period Errors – When an error in prior-period financial
statements is discovered, those statements are restated.

s.

Additional Information – Accounting estimates associated with novel coronavirus disease(COVID-19).
The Group is making accounting estimates for recoverability of deferred tax assets, etc. basedon the assumption that the impact of COVID-19 will continue for fiscal year ending September
30, 2024.

t.

New Accounting Pronouncements –・ "Accounting Standard for Current Income Taxes" (ASBJ Statement No. 27, October 28,
2022, Accounting Standards Board of Japan)・ "Accounting Standard for Presentation of Comprehensive Income" (ASBJ Statement No. 25,
October 28, 2022, Accounting Standards Board of Japan)・ "Guidance on Accounting Standard for Tax Effect Accounting" (ASBJ Guidance No. 28,
October 28, 2022, Accounting Standards Board of Japan)(1) Summary The "Partial Amendments to Accounting Standard for Tax Effect Accounting"(ASBJ Statement No. 28, Accounting Standards Board of Japan), etc. was released in
February 2018, completing the transfer of management of practical guidance on tax effectaccounting from the Japanese Institute of Certified Public Accountants to the AccountingStandards Board of Japan. In the related deliberation process, the following two points
were scheduled for reconsideration after the release of ASBJ Statement No. 28. These
accounting standards represent the announcement of deliberation on these points.
・ The accounting classification for tax expenses (tax on other comprehensive income)・ The tax effect associated with the sale of shares of subsidiaries, etc. (subsidiaries andaffiliates) in cases where the group tax sharing system is applied(2) Scheduled date of application
It is scheduled to be applied from the beginning of the fiscal year ending September 30,
2025.
(3) Effect of application of the aforementioned accounting standards, etc.
The effect of application of the "Accounting Standard for Current Income Taxes," etc. on the
consolidated financial statements is currently under review.

- 14 -

u.

Restatement for the Year Ended September 30, 2022
The Company identified an error related to retirement benefits liability during the fiscal year
ended September 30, 2022. As a result, the Company has restated its previously issued
consolidated financial statements disclosed in the Annual Securities Report, and revised figures
are presented on its consolidated financial statements for the fiscal year ended September 30,
2022.
The following is a summary of the corrections applied on the consolidated financial statements
for the fiscal year ended September 30, 2022:
Millions of Yen
As Previously
Reported3.

Consolidated balance sheet:
Liability for retirement benefits
Defined retirement benefit plans¥

Total liabilities and equity¥ 12,974

630
15

Adjustments

As Restated

¥ 80
(80 )

¥

710
(64 )

¥

¥ 12,974

SIGNIFICANT ACCOUNTING ESTIMATE
Allowance for Losses on Contracts(1) Carrying amounts

Millions of Yen
2023
2022
Allowance for losses on contracts

¥389

¥349

Thousands of
U.S. Dollars
2023$2,599(2) Information on the significant accounting estimate
Calculation method of estimation
The Group records allowance for losses on contracts if the future losses are expected and theamounts can be reasonably estimated at the end of the fiscal year. Losses on contracts
provided for the excess of the estimated costs of the projects over the contract prices.
Key assumptions for the estimation
The total estimated costs are calculated based on order specifications from customers withreference to similar projects in the past in accordance with the Company's accounting policy forthe estimation of the costs.
Impact on the next fiscal year's consolidated financial statements
The total estimated costs involve uncertainty, such as fluctuations in the estimated elements
due to the impact of changes in order specifications from customers until the project iscompleted.
4.

ACCOUNTING CHANGE
Fair Value Measurement – Effective from the beginning of the year ended September 30, 2023, theCompany applied the "Implementation Guidance on Accounting Standard for Fair Value
Measurement" (ASBJ Guidance No. 31, June 17, 2021; the "Fair Value Measurement Guidance").
The new accounting policies will be prospectively applied as stipulated by the Fair Value
Measurement Guidance in accordance with the transitional treatment provided in Paragraph 27-2 ofthe Fair Value Measurement Guidance. The application has no impact on the consolidated financial
statements. The Company does not present notes pertaining to the previous period on investment
trusts in fair value information by level within the fair value hierarchy in the notes on financial
instruments in accordance with Paragraph 27-3 of the Fair Value Measurement Guidance.
- 15 -

5.

CHANGES IN PRESENTATION"Contract liabilities" which was included in "Other current liabilities" in the previous fiscal year, were
presented separately in the current fiscal year due to an increase in quantitative materiality. To
reflect this change in presentation method, in the consolidated statements of income for the previous
fiscal year, ¥158 million ($4,716 thousand) that had been presented as "Other current liabilities" wasreclassified as ¥19 million ($444 thousand) in "Other current liabilities" and ¥138 million ($4,272
thousand) in "Contract liabilities."

6.

MARKETABLE AND INVESTMENT SECURITIESMarketable and investment securities as of September 30, 2023 and 2022, consisted of thefollowing:Thousands of
U.S. Dollars
2023

Millions of Yen
2023
2022
Non-current:
Equity securities
Trust fund investments and other¥ 1,232
33¥ 1,11030$ 8,216
224

Total¥ 1,265¥ 1,140$ 8,440

The costs and aggregate fair values of marketable and investment securities at September 30, 2023
and 2022, were as follows:

September 30, 2023

Cost

Securities classified as:
Available-for-sale:
Equity securities
Other

¥269
26

September 30, 2022

Cost

Securities classified as:
Available-for-sale:
Equity securities
Other

¥632
26

September 30, 2023

Cost

Securities classified as:
Available-for-sale:
Equity securities
Other$1,801
177

Millions of Yen
Unrealized
Unrealized
Gains
Losses

¥959
7

¥0
0

Millions of Yen
Unrealized
Unrealized
Gains
Losses¥485
4¥(10 )(0 )Thousands of U.S. Dollars
Unrealized
Unrealized
Gains
Losses$6,398
47

$0
0

Fair
Value

¥1,229
33

Fair
Value

¥1,107
30

Fair
Value

$8,199224

Investments in equity instruments that do not have a quoted market price were ¥2 million ($17thousand) and ¥2 million as of September 30, 2023 and 2022, respectively.

- 16 -

7.

INVENTORIESInventories at September 30, 2023 and 2022, consisted of the following:

Millions of Yen
2023
2022

8.

Thousands of
U.S. Dollars
2023

Finished products
Work in process
Raw materials and supplies

¥ 171
1,721
451

¥ 157
1,452
444

$ 1,146
11,477
3,012

Total

¥ 2,345¥ 2,055$ 15,635

SHORT-TERM BANK LOANS AND LONG-TERM DEBT
Short-term bank loans at September 30, 2023, consisted of notes to banks and bank overdrafts. The
annual interest rates applicable to the short-term bank loans ranged from 0.35% to 0.50% at
September 30, 2023.
Long-term debt at September 30, 2023 and 2022, consisted of the following:

Millions of Yen
2023
2022

Thousands of
U.S. Dollars
2023

Loans from banks and other financial institutions,due serially to 2025 with interest rates ranging
from 0.25% to 0.8% (2023) and from 0.47% to0.6% (2022):
Collateralized
Unsecured
Lease obligations
Total
Less current portion

¥ 355
36
129
520
(215 )

¥

90
73
82
245
(138 )$ 2,367
244
860
3,471
(1,438 )Long-term debt, less current portion

¥ 305

¥ 107

$ 2,033

Annual maturities of long-term debt at September 30, 2023, were as follows:
Millions ofYen

Thousands of
U.S. Dollars

2024
2025
2026
2027
2028

¥ 215
137
122
43
1

$ 1,438
915
820
288
10

Total

¥ 518

$ 3,471

Years Ending September 30

The carrying amounts of assets pledged as collateral for the collateralized long-term debt at
September 30, 2023, were as follows:

Property, plant, and equipment – net of accumulated
depreciation- 17 -

Millions ofYen

Thousands of
U.S. Dollars¥521$3,477

General agreements with respective banks provide, as is customary in Japan, that additional
collateral must be provided under certain circumstances if requested by such banks and that certain
banks have the right to offset cash deposited with them against any long-term or short-term debt or
obligation that becomes due and, in case of default and certain other specified events, against allother debt payable to the banks. The Company has never been requested to provide any additional
collateral.
9.

RETIREMENT AND PENSION PLANS
The Company and certain consolidated subsidiaries have severance payment plans for employees.
They are contributory funded defined benefit pension plans and defined contribution pension plans.
Under most circumstances, employees of the Company terminating their employment are entitled toretirement benefits determined based on post, grade, years of service, and certain other factors.
Such retirement benefits are made in the form of a lump-sum severance payment from the Company
and a lump-sum severance payment or annuity payments from a trustee and specified retirement
allowance mutual aid.
Employees of certain consolidated subsidiaries are also entitled to retirement benefits under mostcircumstances. Such retirement benefits are made in the form of a lump-sum severance payment
from the subsidiaries and a lump-sum severance payment or annuity payments from smaller
enterprise retirement allowance mutual aid.
Years Ended September 30, 2023 and 2022
(1) The changes in defined benefit obligation for the years ended September 30, 2023 and 2022
were as follows:

Millions of Yen
2023
2022
As Restated(Note 2.u)

Thousands of
U.S. Dollars
2023

Balance at beginning of year (as restated)
Current service cost
Interest cost
Actuarial losses
Benefits paid

¥ 1,700
94
10
57(109 )¥ 1,724941037(166 )$ 11,339
629
71
380(733 )

Balance at end of year

¥ 1,752¥ 1,700$ 11,686(2) The changes in plan assets for the years ended September 30, 2023 and 2022 were as follows:

Millions of Yen
2023
2022

Thousands of
U.S. Dollars
2023

Balance at beginning of year
Expected return on plan assets
Actuarial losses
Contributions from the employer
Benefits paid

¥ 990
14
(6 )
51
(71 )

¥ 1,045
15
(23 )
52
(99 )

$ 6,601
99
(44 )
341
(474 )

Balance at end of year

¥ 978

¥ 990

$ 6,523- 18 -

(3) Reconciliation between the liability recorded in the consolidated balance sheets and thebalances of defined benefit obligation and plan assets was as follows:

Millions of Yen
2023
2022
As Restated(Note 2.u)

Thousands of
U.S. Dollars
2023

Defined benefit obligation
Plan assets
Total
Unfunded defined benefit obligation¥ 1,213(978 )
235
538¥ 1,138(990 )
147
562$ 8,092(6,523 )
1,569
3,594

Net liability arising from defined benefit
obligation

¥ 774

¥ 710

$ 5,163

Millions of Yen
2023
2022
As Restated(Note 2.u)

Thousands of
U.S. Dollars
2023

Liability for retirement benefits

¥ 774

¥ 710

$ 5,163

Net liability arising from defined benefit
obligation

¥ 774

¥ 710

$ 5,163(4) The components of net periodic benefit costs for the years ended September 30, 2023 and2022 were as follows:

Millions of Yen
2023
2022

Thousands of
U.S. Dollars
2023

Service cost
Interest cost
Expected return on plan assets
Recognized actuarial losses

¥ 94
10
(14 )
5

¥ 94
10
(15 )
(3 )

$ 629
71
(99 )
34

Net periodic benefit costs

¥ 95

¥ 85

$ 635

(5) Amounts recognized in other comprehensive income (before income tax effect) in respect ofdefined retirement benefit plans for the years ended September 30, 2023 and 2022, were as
follows:

Millions of Yen
2023
2022
As Restated(Note 2.u)

Thousands of
U.S. Dollars
2023

Actuarial (gains) losses¥ (58 )¥ (64 )$ (389 )Total¥ (58 )¥ (64 )$ (389 )- 19 -

(6) Amounts recognized in accumulated other comprehensive income (before income tax effect) in
respect of defined retirement benefit plans as of September 30, 2023 and 2022, were as
follows:
Thousands of
U.S. Dollars
2023

Millions of Yen
2023
2022
As Restated(Note 2.u)
Unrecognized actuarial losses

¥ 123

¥ 64

$ 821

Total

¥ 123

¥ 64

$ 821

(7) Plan assetsa.

Components of plan assets
Plan assets as of September 30, 2023 and 2022, consisted of the following:

b.

2023

2022

General accountSpecial account:
Domestic bonds
Domestic stocks

71 %

71 %

25
4

25
4

Total

100 %

100 %

Method of determining the expected rate of return on plan assets
The expected rate of return on plan assets is determined considering the long-term rates ofreturn, which are expected currently and in the future from various components of the plan
assets.

(8) Assumptions used for the years ended September 30, 2023 and 2022, were as follows:

Discount rate
Expected rate of return on plan assets

2023

2022

0.6 %
1.5 %

0.6 %
1.5 %

(9) Defined contribution pension plan
Required contributions to the defined contribution pension plan of the Company and certain
consolidated subsidiaries were ¥28 million ($190 thousand) and ¥24 million as at September
30, 2023 and 2022, respectively.

- 20 -

10.

EQUITYJapanese companies are subject to the Companies Act of Japan (the "Companies Act"). The
significant provisions in the Companies Act that affect financial and accounting matters are
summarized below:a.

Dividends
Under the Companies Act, companies can pay dividends at any time during the fiscal year in
addition to the year-end dividend upon resolution at the shareholders' meeting. Additionally, forcompanies that meet certain criteria including (1) having a board of directors, (2) having
independent auditors, (3) having an audit and supervisory board, and (4) the term of service ofthe directors being prescribed as one year rather than the normal two-year term by their articles
of incorporation, the board of directors may declare dividends (except for dividends in kind) at
any time during the fiscal year if a company has prescribed so in its articles of incorporation.
With respect to the third condition above, the board of directors of companies with (a) board
committees (namely, appointment committee, compensation committee, and audit committee)or (b) an audit and supervisory committee (as implemented under the Companies Act effective
May 1, 2015) may also declare dividends at any time because such companies, by nature, meetthe criteria under the Companies Act. The Company was organized as a company with an audit
and supervisory committee effective December 22, 2016, however, the Company cannot do so
because it does not meet the above criteria.
Semiannual interim dividends may also be paid once a year upon resolution by the board of
directors if the articles of incorporation of a company so stipulate. The Companies Act provides
certain limitations on the amounts available for dividends or the purchase of treasury stock. The
limitation is defined as the amount available for distribution to the shareholders, but the amountof net assets after dividends must be maintained at no less than ¥3 million.

b.

Increases/Decreases and Transfer of Common Stock, Reserve, and Surplus
The Companies Act requires that an amount equal to 10% of dividends must be appropriated asa legal reserve (a component of retained earnings) or as additional paid-in capital (a componentof capital surplus), depending on the equity account charged upon the payment of such
dividends, until the aggregate amount of legal reserve and additional paid-in capital equals 25%of the common stock. Under the Companies Act, the total amount of additional paid-in capitaland legal reserve may be reversed without limitation. The Companies Act also provides that
common stock, legal reserve, additional paid-in capital, other capital surplus, and retained
earnings can be transferred among the accounts within equity under certain conditions upon
resolution of the shareholders.

c.

Treasury Stock and Treasury Stock Acquisition Rights
The Companies Act also provides for companies to purchase treasury stock and dispose ofsuch treasury stock by resolution of the board of directors. The amount of treasury stock
purchased cannot exceed the amount available for distribution to the shareholders, which isdetermined by a specific formula. Under the Companies Act, stock acquisition rights arepresented as a separate component of equity. The Companies Act also provides thatcompanies can purchase both treasury stock acquisition rights and treasury stock. Suchtreasury stock acquisition rights are presented as a separate component of equity or deducted
directly from stock acquisition rights.

- 21 -

11.

INCOME TAXESThe Company and its consolidated domestic subsidiaries are subject to Japanese national and local
income taxes which, in the aggregate, resulted in normal effective statutory tax rate of approximately
30.6% for the years ended September 30, 2023 and 2022.
The tax effects of significant temporary differences and tax losses carried forward, which resulted indeferred tax assets and liabilities at September 30, 2023 and 2022, were as follows:

Millions of Yen
2023
2022
As Restated(Note 2.u)Deferred tax assets:
Accrued bonuses
Allowance for losses on contracts
Liability for retirement benefits
Property, plant, and equipment
Inventories
Tax loss carryforwards
Other
Total of tax loss carryforwards andtemporary differenceLess valuation allowance for tax loss
carryforwards
Less valuation allowance for temporary
differences
Total valuation allowance
Deferred tax assets
Deferred tax liabilities:
Unrealized gain on available-for-salesecurities
Total
Net deferred tax assets

¥ 113
120
237
125
58
85
51

98
109
217
130
52
151
40

$

758
803
1,582
835
388
573
343

792

799

5,282

(85 )

(120 )(573 )(453 )(539 )
252(439 )(560 )
238(3,025 )(3,598 )
1,684(293 )(293 )(143 )(143 )(1,958 )(1,958 )94$ (274 )¥ (41 )

- 22 -¥

Thousands of
U.S. Dollars
2023¥

The expiration of tax losses carried forward, the related valuation allowances and the resulting net
deferred tax assets as of September 30, 2023 and 2022, were as follows:

September 30, 2023

1 Yearor LessAfter
1 Yearthrough
2 Years

Millions of Yen
After
After
After
2 Years
3 Years
4 Years
throughthroughthrough
3 Years
4 Years
5 Years

Deferred tax assets
relating to tax loss
carryforwards
Less valuation
allowances for tax
loss carryforwards
Net deferred tax assets
relating to tax loss
carryforwards

¥ 0

(0 )

After
5 Years

Total

¥

¥

85

85

(85 )

(85 )

September 30, 2022
Deferred tax assets
relating to tax loss
carryforwards
Less valuation
allowances for tax
loss carryforwards
Net deferred tax assets
relating to tax loss
carryforwards

September 30, 2023

1 Yearor LessAfter
1 Yearthrough
2 Years

¥ 0

¥ 2

¥ 149

¥ 151

(0 )

(2 )

(118 )(120 )

31

31

Thousands of U.S. Dollars
After
After
After
2 Years
3 Years
4 Years
throughthroughthrough
3 Years
4 Years
5 Years

After
5 Years

Total

$ 6

$ 567

$ 573

(6 )

(567 )(573 )

Deferred tax assets
relating to tax loss
carryforwards
Less valuation
allowances for tax
loss carryforwards
Net deferred tax assets
relating to tax loss
carryforwards

A reconciliation between the normal effective statutory tax rates and the actual effective tax rates
reflected in the consolidated income statement for the year ended September 30, 2023, with thecorresponding figures for 2022, is as follows:
2023

2022

Normal effective statutory tax rate
Expenses not deductible for income tax purposes
Change in valuation allowance for deferred tax assets
Inhabitant tax on per capita basis
Difference in tax rates between foreign subsidiaries
Other – net

30.6 %
2.6
73.1
2.6(1.6 )(80.2 )

30.6 %
42.0
333.6
91.7
(36.2 )
(3.8 )

Actual effective tax rate

27.1 %

457.9 %

- 23 -

12.

REVENUE(1) Disaggregation of Revenue
Disaggregation of revenue is described in Note 18 to the consolidated financial statements.
(2) Basic Information to Understand Revenues from Contracts with Customers
Basic information to understand revenues from contracts with customers is described in Note
2.j. to the consolidated financial statements.
(3) Contract Balances
Receivables from contract with customers, contract assets and contract liabilities at the
beginning and end of the year are as follows:

Millions of Yen
2023
2022
Receivables from contracts with customers:
Balance at beginning of year
Balance at end of year
Contract assets:
Balance at beginning of year
Balance at end of year
Contract liabilities:
Balance at beginning of year
Balance at end of year

Thousands of
U.S. Dollars
2023¥ 2,3442,366¥ 2,556
2,344$ 15,633
15,774

31
83

31

210
557

138
640

93
138

924
4,272

(4) Transaction Prices Allocated to Remaining Performance Obligations
The Group applies the practical expedient not to allocate the transaction prices to the remaining
performance obligations that are over one year since the amount is considered immaterial. For
significant contracts, the amounts of consideration arising from the contracts with the customers
are included in the transaction price.
13.

RESEARCH AND DEVELOPMENT COSTS
Research and development costs expensed to the income statement were ¥127 million ($852
thousand) and ¥217 million for the years ended September 30, 2023 and 2022, respectively.

14.

LEASESThe Group leases certain computer equipment and software.
Total lease payments under finance leases for the years ended September 30, 2023 and 2022, were
¥44 million ($295 thousand) and ¥33 million, respectively.

- 24 -

15.

FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES(1) Group Policy for Financial Instruments
The Group mainly consists of two businesses. One area is the maintenance of valves, for which
the average receivable collection period is a few months. The other area of business is the
manufacture and sale of valves for which the average receivable collection period iscomparatively longer than for valve maintenance revenue. The Group's investment andfinancing operations are governed by the board ratified business plans.
Cash surpluses, if any, are invested in low-risk and highly liquid financial assets. Short-termbank loans are used to finance current operations. Long-term bank loans and leases are used
for both current operations and capital investment. The Group sometimes hedges the risk offloating interest rates of long-term bank loans via interest rate swaps.
(2) Nature and Extent of Risks Arising from Financial Instruments and Risk Management for
Financial Instruments
Trade notes and trade accounts receivable are exposed to customer credit risk. However, theGroup trades almost half of its products and services through Japanese major 'sōgō shōsha'(approximate translation is a 'general trading company') which are diversified, stable and areeasily able to trade on credit. The group trades the other half of its products and services withfinancially stable, non-sōgō shōsha companies, such as Japanese plant makers.
Most of the companies the Group trades with are long-term customers whom the Group has
established as having relatively low credit risk. The Group conducts effective credit exposure
management with a focus on newer customers. Furthermore, the Group frequently makes useof letters of credit when trading with customers based outside of Japan.
Marketable and investment securities are exposed to market price fluctuations. Marketablesecurities are low-risk and highly liquid money market funds and corporate bonds that will be
redeemed in less than one year. Investment securities consist mainly of equity securities ofcompanies related to the Group's business.
Payment terms of trade notes payable, trade accounts payable, and income taxes payable areless than one year. Short-term bank loans are used to fund current operations and the interest
rate is fixed. Long-term bank loans are used for current operations and equipment investment,
and interest rates are fixed and floating. Payables, short-term bank loans, and long-term bankloans with fixed interest rates are exposed to liquidity risk, which the Group manages by making
monthly collection forecasts and holding a cash surplus.
(3) Fair Values of Financial Instruments
Fair values of financial instruments are as follows:
Investments in equity instruments that do not have a quoted market price in an active market
are not included in the following table. The fair values of cash and cash equivalents,
receivables-trade, payables-trade, and short-term borrowings are not disclosed because theirmaturities are short and the carrying values approximate fair value.

- 25 -

(a) Fair value of financial instruments
Millions of Yen
Fair
Unrealized
Value
Gain/Loss

September 30, 2023

Carrying
AmountMarketable and investment securities¥ 1,263¥ 1,263¥ 1,263¥ 1,263

¥ 129
391

¥ 129
383

¥ 0
(7 )

¥ 520

¥ 512

¥ (7 )

Total assets
Lease obligations
Long-term debt
Total liabilities

Millions of Yen
Fair
Unrealized
Value
Gain/Loss

September 30, 2022

Carrying
AmountMarketable and investment securities¥ 1,138¥ 1,138¥ 1,138¥ 1,138¥¥

Total assets
Lease obligations
Long-term debt
Total liabilities

82
163

¥ 245

82
156

¥ 0
(7 )

¥ 238

¥ (6 )

September 30, 2023

Thousands of U.S. Dollars
Carrying
Fair
Unrealized
AmountValue
Gain/Loss

Marketable and investment securities$ 8,422$ 8,422$ 8,422$ 8,422

$ 860
2,611

$ 860
2,558

$

$ 3,471$ 3,418$ (53 )

Total assets
Lease obligations
Long-term debt
Total liabilities

0
(53 )

(b) Carrying amount of investments in equity instruments that do not have a quoted market
price in an active market

Millions of Yen
2023
2022
Unlisted equity instruments¥2- 26 -¥2

Thousands of
U.S. Dollars
2023
$17

(4) Maturity Analysis for Financial Assets and Securities with Contractual Maturities

Due in1 Year or
Less

Millions of Yen
Due after
Due after
1 Year
5 Years
throughthrough
5 Years
10 Years

Cash and cash equivalents
Receivables:
Trade notes
Electronically recorded claims
Trade accounts
Contract asset¥ 4,707

¥

¥

¥

Total

¥ 7,156¥¥¥

Due in1 Year or
Less

Millions of Yen
Due after
Due after
1 Year
5 Years
throughthrough
5 Years
10 Years

Cash and cash equivalents
Receivables:
Trade notes
Electronically recorded claims
Trade accounts
Contract asset¥ 4,126

¥

¥

¥

Total

¥ 6,502¥¥¥

September 30, 2023

September 30, 2022

September 30, 2023

Due after
10 Years

126
413
1,825
83

Due after
10 Years

147
583
1,614
31

Due in1 Year or
Less

Cash and cash equivalents
Receivables:
Trade notes
Electronically recorded claims
Trade accounts
Contract asset$ 31,382

Total$ 47,713

Thousands of U.S. Dollars
Due after
Due after
1 Year
5 Years
throughthrough
5 Years
10 Years

Due after
10 Years

$

$

$

$

$

$

845
2,757
12,172557

Please see Note 8 for annual maturities of long-term debt.

- 27 -

(5) Financial Instruments Categorized by Fair Value Hierarchy
The fair value of financial instruments is categorized into the following three levels, dependingon the observability and significance of the inputs used in making fair value measurements:
Level 1:

Fair values measured by using quoted prices (unadjusted) in active markets for
identical assets or liabilities

Level 2:

Fair values measured by using inputs other than quoted prices included within
Level 1 that are observable for the assets or liabilities, either directly or indirectly

Level 3:

Fair values measured by using unobservable inputs for the assets or liabilities

If multiple inputs are used that have a significant impact on the measurement of fair value, fairvalue is categorized at the lowest level in the fair value measurement among the levels to which
each of these inputs belongs.
(1) The financial assets and liabilities measured at the fair values in the consolidated balance
sheetMillions of Yen
Level 2
Level 3

Total

¥ 33

¥ 1,22933¥ 1,229¥ 33¥ 1,263

September 30, 2022

Level 1Millions of Yen
Level 2
Level 3

Total

Marketable and investment securities
Mutual funds¥ 1,107¥ 1,107¥ 1,107¥ 1,107

September 30, 2023

Level 1Marketable and investment securities
Mutual funds¥ 1,229

Total assets

Total assets

September 30, 2023

Level 1Marketable and investment securities
Mutual funds$ 8,198

Total assets$ 8,198

Thousands of U.S. Dollars
Level 2
Level 3

Total

$ 224

$ 8,198224$ 224$ 8,422(2) The financial assets and liabilities not measured at the fair values in the consolidatedbalance sheet

September 30, 2023

Level 1

Lease obligations
Long-term debt
Total liabilities- 28 -

Millions of Yen
Level 2
Level 3

Total

¥ 129
383

¥ 129
383

¥ 512

¥ 512

September 30, 2022

Level 1Marketable and investment securities
Mutual funds
Total assets

September 30, 2023

Level 1Millions of Yen
Level 2
Level 3

Total

¥ 82
156

¥ 82
156

¥ 238

¥ 238

Thousands of U.S. Dollars
Level 2
Level 3

Lease obligations
Long-term debt
Total liabilities

Total

$ 861
2,558

$ 861
2,558

$ 3,419$ 3,419

The following is a description of valuation methodologies and inputs used for measurementof the fair value of assets and liabilities:
Marketable and investment securities
The fair values of marketable and investment securities are measured at the quoted market
price on the stock exchange. Since listed equity securities are traded in active markets, thefair values of listed equity securities are categorized as Level 1.
Long-term debt and lease obligations
The fair values of long-term debt and lease obligations are calculated by discounting the
cash flows related to the debt by the Group's assumed corporate borrowing rate for the
fiscal year ended September 30, 2023, and are categorized as Level 2.
16.

OTHER COMPREHENSIVE INCOME
The components of other comprehensive income for the years ended September 30, 2023 and2022, were as follows:

Millions of Yen
2023
2022
As Restated(Note 2.u)Unrealized (loss) gain on available-for-sale securities:(Losses) gains arising during the year
¥ 567
Recycling(79 )Amount before income tax effect487
Income tax effect(149 )

Thousands of
U.S. Dollars
2023

¥ 73
0
73
(22 )

$ 3,782(531 )
3,251(994 )

338

51

2,256

Foreign currency translation adjustments:
Adjustments arising during the year

27

44

180

Defined retirement benefit plans:
Adjustments arising during the year
Reclassification adjustments to profit or loss
Amount before income tax effect

(63 )
5
(58 )

(61 )
(3 )
(64 )

(424 )
34(389 )

(58 )

(64 )

(389 )

¥ 307

¥ 30

$ 2,047

Total

Total
Total other comprehensive income- 29 -

17.

NET INCOME PER SHARE
Reconciliation of the differences between basic and diluted net income per share ("EPS") for theyears ended September 30, 2023 and 2022, is as follows:Year Ended September 30, 2023

Millionsof YenNet Income
Attributableto Owners of
the Parent

Thousandsof Shares

¥ 435

2,336

¥ 186

¥ (60 )

2,308

¥ (26 )

Basic EPS—Net income available tocommon shareholders

Yen

WeightedAverage
SharesU.S.
Dollars

EPS$ 1.242

Year Ended September 30, 2022
Basic EPS—Net income available tocommon shareholders
18.

SEGMENT INFORMATION(1) Description of Reportable Segments
The Group's reportable segments are those for which separate financial information is available
and regular evaluation by the Company's management is performed in order to decide how
resources are allocated among the Group.
The main business of the Group is to manufacture and sell valves and their parts, to repair andmaintain valves, and to manufacture and sell cast metal. The manufacture and sale of valves
and their parts and repair and maintenance of valves are closely related. The Group administers
these businesses and plots strategies for them as a whole.
Therefore, the Group consists of Business A, Business B, Business C and other businesses.
Business A consists of the valve business. Business B consists of the cast metal business.
Business C consists of the electrical equipment business. Other businesses include thedecommissioning of nuclear power plants, metal recycling, regional reconstruction, and otherbusinesses.
The cast metal manufacturing division of the Company deals in the manufacture and sale ofcast metal parts for valves in the Group and the manufacture and sale of cast metal mainly forconstruction machinery outside of the Group.
Segment amounts for Business B relate only to the manufacture and sale of cast metal toexternal customers. Amounts related to the manufacture of cast metal for the manufacture ofvalves within the Group are aggregated to Business A.
(2) Methods of Measurement for the Amounts of Sales, Profit (Loss), Assets, Liabilities, andOther Items for Each Reportable Segment
The accounting policies of each reportable segment are consistent with those disclosed in Note2, "Summary of Significant Accounting Policies." The components of segment profit areconsistent with the components of operating income in the consolidated statement of income.

- 30 -

(3) Information about Sales, Profit (Loss), Assets, and Other Items
Millions of Yen
2023
A
Sales:
Sale of valves
Sale of parts
Maintenance of valves in nuclear power plants
Maintenance of valves in other plants
Sales of the cast metal business
Maintenance of the electrical equipment
Others
Revenues from contracts with customers
Other revenue
Sales to external customers
Intersegment sales or transfers
Total
Segment profit or (loss)
Segment assets
Other:
Depreciation
Amortization of goodwill
Customer-related asset amortization expense
Increase in property, plant, and equipment andintangible assets

Reportable Segments
BC¥ 1,460
980
1,225
2,912

Total

¥ 1,432¥ 1,460
980
1,225
2,912
1,158
1,432

¥ 1,158

Other

Reconciliations

Consolidated¥ 1,460
980
1,225
2,912
1,158
1,432
226
9,396

6,579

1,158

1,432

9,170

¥ 226
226

6,579
41
6,620
1,385
5,531

1,158
2
1,161
(181 )
973

1,432
1,432
175
1,236

9,170
44
9,214
1,378
7,741

226
29
255
(71 )
303

275

62

2
6
22

340
6
22

8

19

368
6
22

28

646

3

159

809

617

9,396
¥

(73 )
(73 )
(830 )
6,020

9,396
476
14,065

Millions of Yen
2022 As Restated (Note 2.u)A
Sales:
Sale of valves
Sale of parts
Maintenance of valves in nuclear power plants
Maintenance of valves in other plants
Sales of the cast metal business
Maintenance of the electrical equipment
Others
Revenues from contracts with customers
Other revenue
Sales to external customers
Intersegment sales or transfers
Total
Segment profit or (loss)
Segment assets
Other:
Depreciation
Amortization of goodwill
Customer-related asset amortization expense
Increase in property, plant, and equipment andintangible assets

Reportable Segments
BC¥ 1,721
913
795
2,768

Total

¥ 1,032¥ 1,721
913
795
2,768
1,046
1,032

¥ 1,046

Other

Reconciliations

Consolidated¥ 1,721
913
795
2,768
1,046
1,032
237
8,514

6,198

1,046

1,032

8,277

¥ 237
237

6,198
43
6,241
1,097
5,348

1,046
10
1,056
(341 )
802

1,032
1,032
52
2,991

8,277
53
8,330
808
9,142

237
28
265
(54 )
417

255

46

8
5
28

310
5
28

7

12

330
5
28

258

743

26

68

837

484

- 31 -

8,514
¥

(81 )
(81 )
(840 )
3,414

8,514
(86 )
12,974

Thousands of U.S. Dollars
2023
Reportable Segments
B
CA
Sales:
Sale of valves
Sale of parts
Maintenance of valves in nuclear power plants
Maintenance of valves in other plants
Sales of the cast metal business
Maintenance of the electrical equipment
Others
Revenues from contracts with customers
Other revenue
Sales to external customers
Intersegment sales or transfers
Total
Segment profit or (loss)
Segment assets
Other:
Depreciation
Amortization of goodwill
Customer-related asset amortization expense
Increase in property, plant, and equipment andintangible assets$ 9,738
6,537
8,168
19,419Total$ 9,548$ 9,738
6,537
8,168
19,4197,724
9,548$ 7,724

Other

Reconciliations

Consolidated$ 9,738
6,537
8,168
19,419
7,724
9,548
1,508
62,642

43,862

7,724

9,548

61,134$ 1,508
1,508

43,862275
44,137
9,236
36,875

7,724
20
7,744
(1,212 )
6,490

9,548
9,548
1,168
8,243

61,134295
61,4299,192
51,608

1,508
196
1,704
(479 )
2,026

1,837

415

19
45
153

2,271
45
153

56

130

2,457
45
153

189

4,308

25

1,064

5,397

4,119

62,642$(491 )(491 )(5,539 )40,13762,642
3,174
93,771

Associated Information
1.

Information about Products and Services
Millions of Yen
2023

Sales to external customers

Sale of
ValvesSale of
Parts

Maintenanceof Valves in
NuclearPower Plants¥1,460¥980¥1,225Maintenanceof Valves in
Other Plants

Sales of theCast Metal
Business

Maintenanceof theElectrical
Equipment

Other

Total

¥2,912¥1,158¥1,432¥226¥9,396

Millions of Yen
2022

Sales to external customers

Sale of
ValvesSale of
Parts

Maintenanceof Valves in
NuclearPower Plants¥1,721¥913¥795

Maintenanceof Valves in
Other Plants

Sales of theCast Metal
Business

Maintenanceof theElectrical
Equipment

Other

Total

¥2,768¥1,046¥1,032¥237¥8,514

Thousands of U.S. Dollars
2023

Sales to external customers

Sale of
ValvesSale of
Parts

Maintenanceof Valves in
NuclearPower Plants$9,738$6,537$8,168- 32 -

Maintenanceof Valves in
Other Plants

Sales of theCast Metal
Business

Maintenanceof theElectrical
Equipment

Other

Total

$19,419$7,724$9,548$1,508$62,642

2.

Information about Geographical Areas(1) Sales
Geographical sales information for the years ended September 30, 2023 and 2022, is notshown since sales to overseas customers are not material in the context of theconsolidated financial statements.
(2) Property, plant, and equipment
Geographical property, plant, and equipment information is not shown since overseas
property, plant, and equipment is not material in the context of the consolidated financial
statements.

3.

Information about Major Customers
2023
Sales

Name of Customer

Millions ofYen

Thousands of
U.S. Dollars

Related
Segment
Name

Mitsubishi Corporation Power Systems, Inc.
Tokyo Power Technology, Ltd.

¥3,402
1,012$22,6816,751

Business A
Business C

2022
Sales

4.

Name of Customer

Millions ofYen

Related
Segment
Name

Mitsubishi Corporation Power Systems, Inc.
Mitsubishi Heavy Industries, Ltd.

¥3,162
858

Business A
Business A

Information about Amortization of Goodwill

the Valve
Business

Sales ofthe Cast
Metal
Business

Amortization
amountBalanceMillions of Yen
2023
Maintenanceof theElectrical
Equipment
Other

Reconciliations¥ 6
55

the Valve
Business

Sales ofthe Cast
Metal
Business

Amortization
amountBalanceThousands of U.S. Dollars
2023
Maintenanceof theElectrical
Equipment
Other
Reconciliations
$ 45
370

- 33 -

Total
¥ 6
55

Total
$ 45
370

19.

RELATED PARTY DISCLOSURES
Transactions of the Company with Seika Corporation as other associated company for the year
ended September 30, 2023.

Sales

Millions of
Yen
2023

Thousands of
U.S. Dollars
2023

¥590

$3,934The balances due to or from Seika Corporation as other associated company at September 30,
2023.

Receivables******- 34 -

Millions of
Yen
2023

Thousands of
U.S. Dollars
2023

¥231

$1,545