2024
ANNUAL REPORT
Year ended March 31, 2024

DENYO CO., LTD. and Consolidated Subsidiaries

ProfileContents

Since its establishment in 1948, Denyo has beena pioneer in outdoor power source, developing andmanufacturing many original products, including
engine-driven generators, engine-driven welders andengine-driven air compressors. Without contenting
ourselves with our current market position or technicalexpertise, we have boldly taken on new R&D challenges
and, as a result, we now command a 70% share of
the domestic market for engine-driven generators,
our main product. The Denyo Group comprises theCompany and eleven subsidiaries and affiliate, alongwith its production facilities in Southeast Asia and the
U.S., and R&D center in Japan.

Consolidated Financial Highlights

1

To Our Shareholders

2

Review of Operations4

Overview of Product Segment

6

Financial Review

8Consolidated Balance Sheet

10

Company Data

31

Executive Officers

32

Investor Information

35

Generator Driven by a Hydrogen Mixed-Fuel
Combustion Engine Installed in Fukui Plant

Denyo has released the DCA-610SPK-H2 generator driven by a hydrogen mixed-fuel combustion
engine.* Following the delivery of the first unit to
Komatsu’s Oyama Plant, we installed the generator at the Fukui Plant, our mother plant, in March
2024.
The generator at our plant serves two purposes.
We use it as a back-up power supply for the plantin the event of a power outage, which is one of ourmeasures to ensure business continuity. We also

use the facility to showcase and promote the saleof our generators driven by hydrogen mixed-fuelcombustion engines.
Denyo will accumulate expertise for the establishment of a hydrogen supply chain, thus contributing to the realization of a carbon-neutral,hydrogen-based society.
* This product generates power using a mixed fuel that contains up to 50%hydrogen. This makes it possible to reduce CO2 emissions during power
generation by up to 50% compared to use of diesel alone.

Year ended March 31, 2024

Consolidated Financial Highlights
2024

Millions of Yen
2023

2022

Thousands of
U.S. Dollars
2024

Net Sales¥73,141¥64,312¥55,168$483,095

Total Assets

100,541

89,74480,775664,073

Total Net Assets

75,84368,65963,761500,946

Operating Income

7,089

4,874

3,654

46,826Net Income*

5,095

3,634

2,753

33,653

Per Share Data

Yen

Total Net Assets

U.S. Dollars¥3,526.50¥3,193.67¥2,963.99$23.29Net Income*246.83175.64132.02

1.63

Cash Dividends

64.00

50.00

47.00

0.42

Note:Transaction into U.S. dollars has been made, solely for the reader’s convenience, at the rate of ¥151.40 to U.S.$1, prevailing on the Tokyo Foreign Exchange
Market on March 31, 2024.

Net Sales

Net Income*¥ million¥ million

73,141

5,095

64,31262,88755,007

4,071

55,168

3,860

3,634
2,753

2020

2021

2022

2023

2024

2020

2021

2022

2023

2024

* Net Income attributable to owners of the parent.

Total Assets

Total Net Assets¥ million

75,626

79,05780,775

2020

2021

2022

89,7442023¥ million

100,5412024

58,35461,564

63,761

2020

2021

2022

68,6592023

75,8432024

1

Takanori Yoshinaga
President2

In the year ended March 31,2024, the 76th term, the consolidated net sales of the

Denyo Group increased 13.7% year on year to ¥73,141 million (US$483,095 thousand). Ordinary profit increased 42.4% year on year to¥7,378 million (US$48,733 thousand), and profit attributable to owners of parent was ¥5,095 million (US$33,653 thousand), up 40.2%
year on year. Thus, both sales and profits far exceeded the targets in Denyo 2023, the second medium-term management plan.
In the domestic and overseas business environment, infrastructure investment was brisk and event-related demand also remained
strong.
In the overseas business environment in particular, shipments to North America, Asia, the Middle East and other regions increased
as in the previous fiscal year, partly reflecting the depreciation of the yen.
Despite the impact of rising raw materials prices and shortages of production materials, among other events, we were able to improvethe cost to sales ratio due to the increase of production at production plants and the price revisions that have been accepted bycustomers.
Denyo 2026, the third three-year medium-term management plan, begins this fiscal year.
In the year ending March 31, 2025, the first year of the plan, we forecast that demand in North America will slow slightly while
infrastructure investment and public investment are expected to continue and investments in initiatives such as disaster prevention andmitigation will remain steady.
In addition, while we expect profit to decline slightly, partly reflecting rising personnel and logistics costs, we will work on productdevelopment by applying new technologies to achieve Denyo 2026. We will also push forward with the streamlining of production at allof the Group companies around the world, aiming to achieve sustainable growth.
Regarding dividends for the year ended March 31, 2024, we paid an interim dividend of ¥24 (US$0.16) per share, an year-onyear increase of ¥1, and decided to pay an ordinary year-end dividend of ¥40 (US$0.26) per share, up ¥13 year on year . As a result,dividends for the full year came to ¥64 (US$0.42).
Moving forward, we will continue our progressive dividend policy which is the basis of our return of profits and distribute profits toshareholders with a target total payout ratio of 40%.
We wish to thank all shareholders for their continued support for the Denyo Group going forward.

June 2024

Takanori Yoshinaga,
President

4

DENYO CO., LTD. and Consolidated Subsidiaries

1

New office and warehouse buildings completed
at the Hiroshima Sales Office

The new Hiroshima Sales Office building wascompleted in September 2023.
We built the new office building mainly becauseof the aging of the pervious building. In the newbuilding, we have installed barrier-free elevators
and an emergency power generator as measures
to ensure business continuity, ensuring that
employees can work there with a sense of security
and safety.
In April 2024, the warehouse building was also
completed. We installed solar power generating
equipment as a carbon neutrality initiative. The
equipment provides electricity used by the office
and warehouse buildings.
Denyo will continue to proactively improve theworkplace environment as part of its human capitalmanagement.

Year ended March 31, 20242

PL-104LB-G2, a hybrid LED floodlight

In June 2023, Denyo released the PL-104LB-G2 hybrid LED
floodlight, a redesign of a hybrid floodlight developed in 2015.
The PL-104LB-G2 is a hybrid unit driven by a battery anda gasoline engine that features reduced CO2 emissions andnoise while overcoming one of the shortcomings of battery
floodlights, their short continuous lighting time.
Normally, the floodlight is powered by the battery. Whenthe remaining battery life gets low, the built-in generator starts
automatically and begins charging the battery while keeping
the floodlight on.
When charging is completed, the generator stops automatically and the battery is used as the power supply again.
1. Battery modeThis makes it possible to keep the floodlight on for along time per fueling, making the PL-104LB-G2 useful atsites where access to fueling stations is inconvenient, inthe event of a disaster, and in other situations.
Denyo will continue to propose products that cater tothe needs of customers whiledeveloping products with highenvironmental performance toachieve carbon neutrality.

2. Hybrid modePowergenerator

Battery

Power generator: OFF
Battery: ON

3Power generator: ON
Battery: Charging

PL-104LB-G2

Denyo advertisement at Tokyo Dome*On March 1, 2024, we began to display an advertisement
beside the centerfield screen of the Tokyo Dome.
Many different events including concerts and exhibitions,
not to mention professional baseball games, are held at theTokyo Dome throughout the year, and diverse content isdelivered globally from this facility.
Denyo will proactively contribute to sports and culture andpromote global corporate activities.
* Japan’s premier multi-purpose dome stadium located in Koraku in Tokyo’s Bunkyo Ward

5

6

DENYO CO., LTD. and Consolidated Subsidiaries

Overview of Product Segment
Business performance by product category anddomestic market share

Engine Generators
In the generator segment, looking at the products for the domestic
market, shipments of large and other mobile generators which are usedmainly for construction work and events remained steady. Shipmentsof emergency generators to be used during power outages continued
to recover.
Regarding products for overseas markets, sales of products for theUnited States increased significantly and sales of products for Asia also
remained strong. As a result, segment sales increased to ¥61,488 million(US$406,128 thousand), up 14.5% year on year.

Engine Welders
In the engine welders segment, sales increased to ¥4,438 million(US$29,311 thousand), up 0.8% year on year. This mainly reflected
steady shipments of TIG welders and large equipment for overseas
markets, more than offsetting production problems affecting someproducts that were a result of a parts shortage.

Engine Compressors
In the engine compressors segment, while shipments of engine-driven
compressors for overseas markets increased, shipments of those for thedomestic market remained weak. As a result, segment sales declined to¥694 million (US$4,583 thousand), down 4.6% year on year.

70%

Domestic
Market Share(Mobile Type)55%

Domestic
Market Share15%

Domestic
Market ShareOther Products
In the other products segment, sales increased to ¥6,521 million (US$43,074 thousand), up 18.9% year on year. This wasdue to an increase in sales of parts incidental to products, in addition to strong shipments of self-propelled lifters reflecting
the strong construction demand.
Note: Above domestic share is five year mean by our investigation

Denyo Co., Ltd.
and Subsidiaries
Consolidated Financial Statements
for the Year Ended March 31, 2024,
and Independent Auditor's Report

8

DENYO CO., LTD. and Consolidated Subsidiaries

Financial Review
Business Environment and Results
During the fiscal year under review, the Japanese economy recovered modestly against the backdrop of the improvement of corporate
earnings and the employment and income situation amid the ongoingnormalization of economic activity. Meanwhile, the future outlook forthe global economy remained uncertain due in part to the impact of
events such as global monetary restraint and the economic slowdown in China.
Regarding the business environment surrounding the Denyo
Group, demand in the construction market was strong in Japan, withlarge-scale construction projects including the construction of semiconductor plants, amid the ongoing construction in redevelopment
projects in the Tokyo Metropolitan area and infrastructure repair work.
Demand also remained strong in overseas markets, mainly in the
United States.

On the supply front, a parts shortage affected the production ofsome products.
In these conditions, the Denyo Group actively ran booths at
product exhibitions in each region, focused its efforts on promoting the sale of products for overseas markets and sought to ensurestable supply. As a result, net sales increased to ¥73,141 million(US$483,095 thousand), up 13.7% year on year.
On the profit front, rising raw material prices impacted profit but
this was more than offset by the significant increase in sales and otherfactors. As a result, operating profit rose 45.4% year on year to ¥7,089
million (US$46,826 thousand), ordinary profit increased 42.4% year
on year to ¥7,378 million (US$48,733 thousand) and profit attributable to owners of parent rose 40.2% year on year to ¥5,095 million(US$33,653 thousand).

Segment Information
In the generator segment, looking at the products for the domestic market, shipments of large and other mobile generators which are usedmainly for construction work and events remained steady. Shipmentsof emergency generators to be used during power outages continued
to recover. Regarding products for overseas markets, sales of products for the United States increased significantly and sales of products
for Asia also remained strong. As a result, segment sales increased
to ¥61,488 million (US$406,128 thousand), up 14.5% year on year.
In the engine welders segment, sales increased to ¥4,438 million(US$29,311 thousand), up 0.8% year on year. This mainly reflected
steady shipments of TIG welders and large equipment for overseas
markets, more than offsetting production problems affecting someproducts that were a result of a parts shortage.
In the engine compressors segment, while shipments of engine-driven compressors for overseas markets increased, shipmentsof those for the domestic market remained weak. As a result, segment
sales declined to ¥694 million (US$4,583 thousand), down 4.6% year
on year.
In the other products segment, sales increased to ¥6,521 million(US$43,074 thousand), up 18.9% year on year. This was due to an increase in sales of parts incidental to products, in addition to strong shipments of self-propelled lifters reflecting the strong construction demand.
Information by geographical area is as follows.
Consolidated results in each segment are based on the results of theCompany and its consolidated subsidiaries located in the specificregion. Accordingly, consolidated results in the Japan segment are forthe period from April 2023 to March 2024. Those in segments otherthan Japan are for January to December 2023 because the fiscal year
end of overseas consolidated subsidiaries is December 31.

Net Income per Share(¥)(Japan)In Japan, shipments of mobile generators, mainly generators for thedomestic rental market, remained strong while shipments of emergency generators for corporate customers also increased. Exports also
remained steady, partly due to the yen’s depreciation, which has beena tailwind. As a result, sales increased to ¥48,630 million (US$321,201
thousand), up 10.8% year on year, and segment profit increased to¥4,237 million (US$27,985 thousand), up 49.5% year on year.
(United States)
In the US, sales increased to ¥19,718 million (US$130,237 thousand), up 24.2% year on year, and segment profit was ¥1,227 million(US$8,105 thousand), up 47.7% year on year. This reflected the effectof the weaker yen, in addition to the shipments of generators for therental market remaining high due to the construction demand, including the demand for infrastructure repair work.
(Asia)In Asia, demand for generators for infrastructure development andmine development remained strong, but this was more than offset byproduction problems at local plants affecting some products that were
the result of a parts shortage. As a result, sales were ¥3,919 million(US$25,885 thousand), down 2.1% year on year, and segment profit
was ¥785 million (US$5,182 thousand), down 16.4% year on year.
(Europe)
In Europe, sales increased to ¥874 million (US$5,772 thousand), up
63.5% year on year, and segment profit rose to ¥76 million (US$500
thousand), up 225.1% year on year. This resulted from an increasein shipments of products compatible with the stage V regulations on
exhaust emissions in Europe, which mainly include products for the
UK market, the main sales destination.

Cash Dividends per Share

246.83185.13(¥)

64.00

Equity Ratio

(%)

74.1

75.1

76.0

2020

2021

2022

73.4

72.4

2023

2024

175.64

194.32

46.00

47.00

47.00
50.00

132.02

2020

2021

2022

2023

2024

2020

2021

2022

2023

2024

Year ended March 31, 2024

Financial Position(Assets)
Total assets at the end of the fiscal year under review were ¥100,541
million (US$664,073 thousand), an increase of ¥10,796 million(US$71,310 thousand) from the end of the previous fiscal year.
Current assets at the end of the fiscal year under review were¥68,239 million (US$450,722 thousand), an increase of ¥6,722 million(US$44,400 thousand) from the end of the previous fiscal year. Thiswas mainly due to an increase in electronically recorded monetaryclaims - operating of ¥4,272 million (US$28,217 thousand) and a risein work in process of ¥611 million (US$4,036 thousand). Non-current
assets at the end of the fiscal year under review were ¥32,301 million(US$213,351 thousand), an increase of ¥4,074 million (US$26,909
thousand) from the end of the previous fiscal year. This mainly reflected an increase in construction in progress of ¥887 million (US$5,856
thousand) and an increase in investment securities of ¥2,931 million(US$19,356 thousand) due to the revaluation of stockholdings.
(Liabilities)
Total liabilities at the end of the fiscal year under review were ¥24,697
million (US$163,127 thousand), increasing ¥3,612 million (US$23,857

thousand) from the end of the previous fiscal year. Current liabilities at the end of the fiscal year under review were ¥20,275 million(US$133,920 thousand), an increase of ¥2,575 million (US$17,009
thousand) from the end of the previous fiscal year. This was mainly
due to an increase in electronically recorded obligations - operatingof ¥962 million (US$6,353 thousand) and a rise in income taxes
payable of ¥672 million (US$4,441 thousand). Non-current liabilities at the end of the fiscal year under review were ¥4,422 million(US$29,207 thousand), up ¥1,037 million (US$6,848 thousand) fromthe end of the previous fiscal year. This was due to an increase indeferred tax liabilities of ¥878 million (US$5,802 thousand).
(Net assets)
Net assets at the end of the fiscal year under review were ¥75,843
million (US$500,946 thousand), an increase of ¥7,184 million(US$47,452 thousand) from the end of the previous fiscal year. Thiswas mainly due to profit attributable to owners of parent of ¥5,095
million (US$33,653 thousand), a ¥2,903 million (US$19,177 thousand) rise in other comprehensive income, and cash dividends paidof ¥1,093 million (US$7,221 thousand).

Cash Flows
Consolidated cash and cash equivalents (hereinafter, cash) were¥24,029 million (US$158,713 thousand) at the end of the fiscal year
under review, increasing ¥1,698 million (US$11,216 thousand) fromthe end of the previous fiscal year, despite the posting of profit before
income taxes of ¥7,338 million (US$48,468 thousand) which wasmore than offset by an increase in trade accounts receivable and thepurchase of property, plant and equipment.
(Cash flows from operating activities)
Net cash provided by operating activities was ¥4,177 million(US$27,586 thousand) (cash provided of ¥2,031 million (US$13,418
thousand) in the previous fiscal year). This was largely due to profit
before income taxes of ¥7,338 million (US$48,468 thousand), an
increase in trade receivables of ¥3,611 million (US$23,852 thousand)and income taxes paid of ¥1,599 million (US$10,561 thousand).

(Cash flows from investing activities)
Net cash used in investing activities was ¥1,835 million (US$12,123
thousand) (cash used of ¥4,117 million (US$27,190 thousand) in theprevious fiscal year). This largely reflected the purchase of property,
plant and equipment of ¥1,656 million (US$10,941 thousand) andproceeds from sales of investment securities of ¥51 million (US$338
thousand).
(Cash flows from financing activities)
Net cash used in financing activities was ¥820 million (US$5,416
thousand) (cash provided of ¥938 million (US$6,193 thousand) in theprevious fiscal year). This was mainly due to an increase in short-termborrowings of ¥381 million (US$2,518 thousand) and dividends paidof ¥1,093 million (US$7,221 thousand).

Dividends
Denyo recognizes the importance of continuing to work to return
profits to shareholders while also investing in equipment and research & development to enhance and maintain product competitiveness and striving to improve profitability and strengthen its financial structure. Our policy is to distribute profits based on thecomprehensive consideration of a wide range of factors including
business performance and the payout ratio while assuming that wewill continue our progressive dividend policy. Our basic policy is to

Return on Average
Shareholders’ Equity

7.4

(%)

Return on Average
Assets (ROA)

2022

Price Earnings Ratio
9.9

5.4

11.3

12.4
9.7

9.4

2023

2024

5.4

5.0

4.3
3.4

4.6

2021

(%)

7.3

6.7
5.7

2020

pay dividends of surplus two times a year: an interim dividend anda year-end dividend.
Regarding dividends for the fiscal year under review, we issued
an interim dividend of ¥24 (US$0.16) per share and decided to pay
an ordinary year-end dividend of ¥40 (US$0.26) per share basedon the policy above. As a result, dividends for the full year came to¥64 (US$0.42). As a consequence, the dividend payout ratio (consolidated) for the fiscal year under review came to 25.9%.

2023

2024

2020

2021

2022

2023

2024

2020

2021

2022

9

10

DENYO CO., LTD. and Consolidated Subsidiaries

Consolidated Balance Sheet
Denyo Co., Ltd. and Subsidiaries · Year Ended March 31, 2024

Thousands of
U.S. Dollars(Note 1)2024

ASSETS

Millions of Yen
2024
2023

CURRENT ASSETS:
Cash and cash equivalents (Note 15)
Receivables (Note 15):
		 Trade notes
		 Electronically recorded monetary claims—operating
		 Trade accounts
		 Associated companies (Note 20)
		Other
		 Allowance for doubtful receivables
Inventories (Note 5)
Prepaid expenses and other current assets¥24,029
13
2,208
7,024
13,9762,840
12(5)17,788355¥22,331
3,021
3,643
13,308
2,086
449
(5)
16,414270$158,713
85
14,582
46,39192,30918,75978(31)
117,491
2,345

			 Total current assets

68,24061,517450,722

PROPERTY, PLANT AND EQUIPMENT:Land
Buildings and structures
Machinery and equipment (Note 14)
Furniture and fixtures
Construction in progress			Total
Accumulated depreciation

6,499
16,862
9,913
2,109
2,531
37,914(18,742)

6,495
16,001
9,432
2,100
1,644
35,672(17,394)

42,929111,372
65,47813,932
16,714250,425(123,789)

			 Net property, plant and equipment

19,172

18,278

126,636

10,482
1,118
380
1,149

7,597
1,072
287
993

69,232
7,383
2,510
7,590

13,1299,949

86,715¥100,541¥89,744$664,073

INVESTMENTS AND OTHER ASSETS:
Investment securities (Notes 4 and 15)
Investments in associated companies (Note 6)
Deferred tax assets (Note 11)
Other assets (Note 14)
			 Total investments and other assets

TOTAL
See notes to consolidated financial statements.

Year ended March 31, 2024

LIABILITIES AND EQUITYCURRENT LIABILITIES:
Short-term bank loans (Notes 7 and 15)
Current portion of long-term debt (Notes 7, 14 and 15)
Payables (Note 15):
		 Trade notes
		 Electronically recorded obligations—operating
		 Trade accounts
		 Associated companies
		Other
Accrued income taxes (Note 11)
Accrued expenses
Provision for product warranties
Other current liabilities

Millions of Yen
2024
2023

Thousands of
U.S. Dollars(Note 1)2024

¥2,193104¥1,810100$14,484
689

786
3,652
9,153
11
309
1,344
1,496
191
1,036

800
2,690
9,245
4
281
672
1,308
99
691

5,191
24,12260,459
72
2,044
8,879
9,882
1,262
6,836

Total current liabilities

20,27517,700133,920

LONG-TERM LIABILITIES:Long-term debt (Notes 7, 14 and 15)
Liability for retirement benefits (Note 9)
Deferred tax liabilities (Note 11)
Other long-term liabilities

1,773
593
2,046
11

1,694
513
1,168
10

11,708
3,915
13,514
70

				

4,423

3,385

29,207

1,955
1,789
63,103

1,955
1,789
59,101

12,912
11,814
416,793(2,704)(2,720)(17,861)

5,541
3,224
(92)
72,816
3,027

3,500
2,321
(52)
65,8942,765

36,60021,299(607)
480,950
19,99675,84368,659500,946¥100,541¥89,744$664,073

				

Total long-term liabilities

COMMITMENTS AND CONTINGENT LIABILITIES (Notes 14, 16)
EQUITY (Note 10):
Common stock—authorized, 97,811,000 shares;
issued, 22,859,660 shares in 2024 and 22,859,660 shares in 2023
Capital surplus
Retained earnings
Treasury stock—at cost, 2,211,496 shares in 2024 and2,226,890 shares in 2023 (Note 3)
Accumulated other comprehensive income:		 Unrealized gain on available-for-sale securities
		 Foreign currency translation adjustments
		 Defined retirement benefit plans				 Total
Noncontrolling interests
				
TOTAL

Total equity

11

12

DENYO CO., LTD. and Consolidated Subsidiaries

Consolidated Statement of Income and Comprehensive Income
Denyo Co., Ltd. and Subsidiaries · Year Ended March 31, 2024

Millions of Yen
2024
2023

Thousands of
U.S. Dollars(Note 1)2024

NET SALES (Notes 12, 19 and 20)¥73,141¥64,312$483,095

COST OF SALES

56,911

50,677

375,897				

16,23013,635

107,198

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (Note 13)

9,141

8,761

60,372

				

7,089

4,874

46,826OTHER INCOME (EXPENSES):Interest and dividend income
Interest expense
Gain on sale of property, plant and equipment
Loss on sale or disposal of property, plant and equipment
Foreign exchange (loss) gain
Equity in earnings of associated companies
Rent income
Commitment fee
Gain on sale of investment securities
Other—net

348
(99)
7
(48)
(142)
55
92
(7)
1
42

288
(51)
2
(4)
(196)
189
80
(31)
39
28

2,300
(651)
45
(314)
(935)
363
605
(46)
5
270

				

Other income—net

249

344

1,642

INCOME BEFORE INCOME TAXES

7,338

5,218

48,468

INCOME TAXES (Note 11):
Current
Deferred

2,246
(87)

1,658
(150)

14,836
(576)

				

2,159

1,508

14,260NET INCOME

5,179

3,710

34,208NET INCOME ATTRIBUTABLE TO:
Owners of the parent
Noncontrolling interests

5,095
84

3,634
76

33,653555

NET INCOME— (Forward)¥5,179¥3,710$34,208

OTHER COMPREHENSIVE INCOME (Note 17):
Unrealized (loss) gain on available-for-sale securities
Foreign currency translation adjustments
Defined retirement benefit plans
Share of other comprehensive income in associates

2,034
1,119
(40)
7

289
2,073
(18)
2

13,438
7,392
(266)
44

				

3,120

2,346

20,608COMPREHENSIVE INCOME

8,299¥6,056$54,816TOTAL COMPREHENSIVE INCOME
ATTRIBUTABLE TO:
Owners of the parent
Noncontrolling interests¥7,998301¥5,638418$52,831
1,985

Gross profit
Operating income

Total income taxes

Total other comprehensive income

Yen
PER SHARE OF COMMON STOCK (Notes 2.u and 18):
Basic net income
Cash dividends applicable to the year
See notes to consolidated financial statements.

¥246,83
64.00

U.S. Dollars¥175.64
50.00

$1.63
0.42

Year ended March 31, 2024

Consolidated Statement of Changes in Equity
Denyo Co., Ltd. and Subsidiaries · Year Ended March 31, 2024

Thousands

Millions of Yen
Accumulated Other Comprehensive Income

BALANCE,APRIL 1, 2022
Net income attributableto owners of the parent
Cash dividends,¥48 per share
Purchase of treasury
stock
Selling of treasurystock
Net change in the year
BALANCE,MARCH 31, 2023
Net income attributableto owners of the parent
Cash dividends,¥48 per share
Purchase of treasury
stock
Selling of treasurystock
Net change in the year
BALANCE,MARCH 31, 2024

Number of
Shares ofCommonStock
Outstanding

CommonStockCapitalSurplusRetained
Earnings

Treasury
Stock

20,720

1,955

1,789

56,501(2,59863,761(1,034)

(136)

(136)

¥59,101¥(2,720)

291

1,730

(18)

14
2,003

417

14
2420

¥3,500

¥591

¥(52)

¥65,894¥2,765¥68,659

5,095

5,095

5,095

(1,093)(1,093)(1,093)

(2)

(2)

(2)

16

18

¥1,7892,348(1,034)(1)¥1,95561,413(1,034)14

20,648(34)

Total
Equity3,634

13¥1,789591

Noncontrolling
Interests

3,634

(136)

¥1,955

3,209

Total

3,634

(100)

20,633

Unrealized
Gain onForeignDefinedAvailableCurrency Retirement
for-SaleTranslation
BenefitSecurities Adjustments
Plans¥63,103¥(2,704)

2,041

903

(40)

18
2,904

262

18
3,166

¥5,541¥3,224¥(92)¥72,816¥3,027¥75,843

Total

Noncontrolling
Interests

Total
Equity$435,233$18,261$453,494

Thousands of U.S. Dollars (Note 1)
Accumulated Other Comprehensive Income

BALANCE,MARCH 31, 2023

CommonStockCapitalSurplusRetained
Earnings

Treasury
Stock

Unrealized
Gain onForeignDefinedAvailableCurrency Retirement
for-SaleTranslation
BenefitSecurities Adjustments
Plans$12,912$11,814$390,361$(17,969)$23,118

Net income attributableto owners of the parent
Cash dividends,$0.34 per share
Purchase of treasurystock$(341)

33,65333,65333,653(7,221)(7,221)(7,221)

(8)

(8)

(8)

Selling of treasurystock
Net change in the year
BALANCE,MARCH 31, 2024

$15,338

116$12,912

See notes to consolidated financial statements.

$11,814$416,793$(17,861)

13,482

5,961

(266)

116
19,177

1,735

116
20,912$36,600$21,299$(607)$480,950$19,996$500,946

13

14

DENYO CO., LTD. and Consolidated Subsidiaries

Consolidated Statement of Cash Flows
Denyo Co., Ltd. and Subsidiaries · Year Ended March 31, 2024

Millions of Yen
2023
2024

Thousands of
U.S. Dollars(Note 1)2024

OPERATING ACTIVITIES:
Income before income taxes
Adjustments for:		 Income taxes paid
		 Depreciation and amortization
		 Loss on sale or disposal of property, plant and equipment—net
		 Gain on sale of investment securities
		 Equity in earnings of associated companies
		 Changes in assets and liabilities, net of effects:			 (Increase) decrease in trade notes and accounts receivable
			 Increase in inventories
			 Decrease in interest and dividends receivable
			 Increase in trade notes and accounts payable
			 Increase (decrease) in provision for allowance for doubtful accounts
			 Increase in liability for retirement benefits
Other—net				 Total adjustments¥7,338¥5,218$48,468(1,599)
1,228
41
(1)
(55)

(1,407)
1,266
2
(39)
(189)

(10,561)
8,109
269
(5)
(363)

(3,611)
(793)
7
501
(0)
9
1,112
(3,161)(1,215)(2,703)
10
591
0
19
478
(3,187)(23,852)(5,235)
46
3,310
(1)
58
7,343
(20,882)

				

4,177

2,031

27,586INVESTING ACTIVITIES:
Purchases of property, plant and equipment
Purchases of investment securities
Proceeds from sales of investment securities
Investment in loans receivableCollections of loans receivable
Increase in time deposit—net
Other—net(1,656)
(3)
51
(1)
1
(13)
(215)

(4,065)
(3)
70
(1)
1
(119)

(10,941)
(22)
338
(3)
5
(86)
(1,414)

				

(1,836)(4,117)(12,123)

381

2,518
(440)
(9)
(7,741)(264)

Net cash provided by operating activities

Net cash used in investing activities

FINANCING ACTIVITIES:
Increase (decrease) in short-term loans—net
Proceeds from long-term debt
Repayments of long-term debt
Purchases of treasury stock
Dividends paid
Other—net(67)(1)(1,093)
(40)

1,600
509
(6)
(136)
(1,034)
5

				

(820)

938

(5,416)

177

120

1,169

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS—(Forward)¥1,698¥(1,028)$11,216

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR

22,331

23,359147,497

CASH AND CASH EQUIVALENTS, END OF YEAR

¥24,029¥22,331$158,713

Net cash used in financing activities

FOREIGN CURRENCY TRANSLATION ADJUSTMENTS ON CASH AND CASH
EQUIVALENTS

See notes to consolidated financial statements.

Year ended March 31, 2024

Notes to Consolidated Financial Statements
Denyo Co., Ltd. and Subsidiaries · Year Ended March 31, 2024

1. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS
The accompanying consolidated financial statements havebeen prepared in accordance with the provisions set forth in theJapanese Financial Instruments and Exchange Act and its related
accounting regulations and in accordance with accounting
principles generally accepted in Japan ("Japanese GAAP"),
which are different in certain respects as to the application anddisclosure requirements of International Financial ReportingStandards.
In preparing these consolidated financial statements, certain
reclassifications and rearrangements have been made to theconsolidated financial statements issued domestically in order to

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESa. Consolidation—The consolidated financial statements asof March 31, 2024, include the accounts of the Company
and its 11 subsidiaries, including mainly "Denyo Kosan Co.,
Ltd.," "Nishihatsu Co., Ltd.," "Denyo America Corporation,""Denyo Manufacturing Corporation," "Denyo Asia Pte. Ltd.,""Denyo United Machinery Pte. Ltd.," "Denyo Europe B.V.,""Denyo Vietnam Co., Ltd." and "P.T. Dein Prima Generator"(together, the "Group").
		 Under the control and influence concepts, thosecompanies in which the Company, directly or indirectly,
is able to exercise control over operations are fully
consolidated, and those companies over which theGroup has the ability to exercise significant influence areaccounted for by the equity method.
		 The investment in "New Japan Machinery Corporation,"an associated company, is accounted for by the equity
method.
		 All significant intercompany balances and transactions
have been eliminated in consolidation. All material
unrealized profit included in assets resulting fromtransactions within the Group is also eliminated.
		 "Denyo America Corporation," "Denyo Manufacturing
Corporation," "Denyo Asia Pte. Ltd.," "Denyo United
Machinery Pte. Ltd.," "Denyo Europe B.V.," "Denyo Vietnam
Co., Ltd." and "P.T. Dein Prima Generator" and two othersubsidiaries were consolidated using the financial
statements as of December 31 because the difference
between the fiscal year-end date of the subsidiaries andthat of the Company does not exceed three months.
Significant transactions between December 31 andMarch 31 are reflected in the accompanying consolidated
financial statements.
b. Unification of Accounting Policies Applied to Foreign
Subsidiaries for the Consolidated Financial Statements—
Under Accounting Standards Board of Japan ("ASBJ")
Practical Issues Task Force ("PITF") No. 18, "Practical
Solution on Unification of Accounting Policies Applied
to Foreign Subsidiaries for the Consolidated Financial
Statements," the accounting policies and procedures
applied to a parent company and its subsidiaries for similartransactions and events under similar circumstances
should in principle be unified for the preparation of theconsolidated financial statements. However, financial
statements prepared by foreign subsidiaries in accordance

present them in a form which is more familiar to readers outside
Japan.
The consolidated financial statements are stated in Japaneseyen, the currency of the country in which Denyo Co., Ltd. (the"Company") is incorporated and operates. The translations ofJapanese yen amounts into U.S. dollar amounts are included
solely for the convenience of readers outside Japan and havebeen made at the rate of ¥151.40 to $1, the approximate rate ofexchange at March 31, 2024. Such translations should not be
construed as representations that the Japanese yen amounts
could be converted into U.S. dollars at that or any other rate.

with either International Financial Reporting Standards orgenerally accepted accounting principles in the UnitedStates of America (Financial Accounting Standards Board
Accounting Standards Codification) tentatively may be
used for the consolidation process, except for the following
items that should be adjusted in the consolidation process
so that net income is accounted for in accordancewith Japanese GAAP, unless they are not material: (a)amortization of goodwill; (b) scheduled amortization of
actuarial gain or loss of pensions that has been recorded inequity through other comprehensive income; (c) expensing
capitalized development costs of R&D; and (d) cancellationof the fair value model of accounting for property, plant andequipment and investment properties and incorporation of
the cost model of accounting; and (e) recording a gain orloss through profit or loss on the sale of an investment in an
equity instrument for the difference between the acquisition
cost and selling price, and recording impairment loss
through profit or loss for other-than-temporary declines
in the fair value of an investment in an equity instrument,
where a foreign associate elects to present in othercomprehensive income subsequent changes in the fairvalue of an investment in an equity instrument.
c. Cash and Cash Equivalents—Cash and cash equivalents
include cash on hand, bank deposits able to be withdrawn
on demand and short-term investments with an original
maturity of three months or less and are exposed toinsignificant risk of fluctuations in value.
d. Marketable and Investment Securities—Marketable
and investment securities are classified and accounted
for depending on management's intent. Available-for-salesecurities 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 atcost determined by the moving-average method. For otherthan-temporary declines in fair value, investment securities
are reduced to net realizable value by a charge to income.
		 Effective April 1, 2021, the Company applied ASBJ
Statement No. 30, "Accounting Standard for Fair Value
Measurement" and ASBJ Guidance No. 31, "Implementation
Guidance on Accounting Standard for Fair Value
Measurement," and revised related ASBJ Statements and
ASBJ Guidance (the "New Accounting Standards"). Under

15

16

DENYO CO., LTD. and Consolidated Subsidiaries

the New Accounting Standards, nonmarketable availablefor-sale equity securities are stated at cost, while under theprevious accounting standards, nonmarketable availablefor-sale securities are stated at cost. The Company applied
the New Accounting Standards prospectively. As a result,
there is no impact on the financial statements.
e. Allowance for Doubtful Accounts—The allowance for
doubtful accounts is stated in amounts considered tobe appropriate based on the Company's past credit loss
experience and an evaluation of potential losses in thereceivables outstanding.
f. Inventories—Inventories are stated at the lower of cost,
determined by the first-in, first-out method for finishedproducts and work in process, and by the average method
for raw materials, or net selling value.
g. Property, Plant and Equipment—Property, plant andequipment are stated at cost. Depreciation of property,
plant and equipment of the Company and its consolidated
domestic subsidiaries is computed by the decliningbalance method based on the estimated useful lives of
the assets, while the straight-line method is applied tobuildings of the Company and its consolidated domestic
subsidiaries acquired on or after April 1, 1998, building
improvements and structures of the Company and its
consolidated domestic subsidiaries acquired on or after
April 1, 2016, and all property, plant and equipment ofconsolidated foreign subsidiaries. The range of useful lives
is principally from 7 to 50 years for buildings and structures,and from 2 to 12 years for machinery and equipment.
h. Long-Lived Assets—The Group reviews its long-lived
assets for impairment whenever events or changes incircumstance indicate the carrying amount of an asset
or asset group may not be recoverable. An impairment
loss is recognized if the carrying amount of an asset
or asset group exceeds 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 be measured as the amountby 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 dispositionof the asset or the net selling price at disposition.
i. Provision for Product Warranties—The provision for
product warranties is recorded to provide for future potential
costs, such as costs related to after-sales services within
the warranty period based on past experience.
j. Accrued Bonuses—Accrued bonuses to employees areprovided for at the estimated amounts that the Company
and its domestic subsidiaries are obligated to pay toemployees after the fiscal year-end, based on services
provided during the current period.
k. Retirement and Pension Plans—The Company, its
domestic subsidiaries and a certain foreign subsidiary
maintain defined benefit pension plans. Some foreignsubsidiaries maintain defined contribution pension plans.
		 The Company accounts for the liability for retirement
benefits based on the projected benefit obligations andplan assets at the balance sheet date. The projected
benefit obligations are attributed to periods on a benefit
formula basis.
		 The unrecognized actuarial gains and losses areamortized on a straight-line basis over a period of 5 years,
no longer than the expected average remaining service

period of the employees, from the year incurred. Actuarial
gains and losses that are yet to be recognized in profit
or loss are recognized within equity (accumulated othercomprehensive income), after adjusting for tax effects.
l. Employee Stockownership Plan—In accordance with
PITF No. 30, "Practical Solution on Transactions of Delivering
the Company's Own Stock to Employees etc. throughTrusts," upon transfer of treasury stock to the employee
stockownership trust (the "Trust") by the entity, any difference
between the book value and fair value of the treasury stock
is recorded in capital surplus. At year-end, the Company
records (1) the Company stock held by the Trust as treasury
stock in equity, (2) all other assets and liabilities of the Truston a line-by-line basis, and (3) a liability/asset for the net of(i) any gain or loss on delivery of the stock by the Trust to
the employees, (ii) dividends received from the entity for thestock held by the Trust, and (iii) any expenses relating to theTrust.
m. Revenue Recognition—The Group manufactures andsells industrial electrical machineries, such as enginedriven generators, engine-driven welders and enginedriven compressors, sells parts related to these products,
and provides installation services. The Group identifies its
performance obligations as the provision of products orservices that meet the specifications and quality promised
to customers. The sales contracts with customers include
the Group’s obligation to guarantee that the products
continually conform to the agreed specifications within thecertain warranty period after the sales, but do not include
the guarantee as additional services to customers. So theprovision for product warranties is recorded to provide for
future costs related to these warranties.
		 Revenue from the sales of products and parts is recognizedat the time the products and parts are delivered to customers
because the Group determines that customers obtain controlof the products and parts, and the performance obligations
are satisfied at the time of delivery of the products and parts
based on the contract terms. However, for sales in Japan, aperiod between shipping and the transfer of control is typicalin most cases, revenue is mainly recognized at the time ofshipping.
		 Revenue from the services such as installation works ismainly recognized at the time of inspection by customers
because the Group determines that the performanceobligations are satisfied at the time of completion ofservices.
		 To determine a transaction price, variable considerationsuch as discount, rebate and incentive payment isdeducted from consideration promised in the contract
with customers. The Group usually receives consideration
within one year after the performance obligations are
satisfied according to payment terms separately set forth,which does not include a significant financing component.
		 For subcontract processing transactions with supply ofmaterials for value that are repurchase agreements, theoutstanding supplies at recipient of supplies is recognized
as inventories. At the same time, the amount equivalent
to the outstanding supplies at recipient of supplies isrecognized as "Liabilities for subcontract processing
transactions with supply of materials for value."n. Research and Development Costs—Research anddevelopment costs are charged to income as incurred.
o. Leases—In March 2007, the ASBJ issued ASBJ Statement

Year ended March 31, 2024

No. 13, "Accounting Standard for Lease Transactions,"
which revised the previous accounting standard for leasetransactions.
		 Under the previous accounting standard, finance leases
that were deemed to transfer ownership of the leased
property to the lessee were capitalized. However, otherfinance leases were permitted to be accounted for as
operating lease transactions if certain "as if capitalized"
information was disclosed in the notes to the lessee's
financial statements. The revised accounting standard
requires that all finance lease transactions be capitalized
by recognizing lease assets and lease obligations in thebalance sheet. In addition, the revised accounting standard
permits leases that existed at the transition date and that
do not transfer ownership of the leased property to thelessee to continue to be accounted for as operating leasetransactions.
		 The Company applied the revised accounting standard
effective April 1, 2008.
		 All other leases are accounted for as operating leases.
p. Bonuses to Directors and Audit & Supervisory Board
Members—Bonuses to directors and Audit & Supervisory
Board members are accrued at the end of the year towhich such bonuses are attributable.
q. Income Taxes—The provision for income taxes iscomputed based on the pretax income included in the
consolidated statement of income and comprehensive
income. The asset and liability approach is used 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.
r. Foreign Currency Transactions—All short-term and longterm monetary receivables and payables denominated inforeign currencies are translated into Japanese yen at theexchange rates at the balance sheet date. The foreignexchange gains and losses from translation are recognizedin the accompanying consolidated statement of income
and comprehensive income.
s. Foreign Currency Financial Statements—The balance
sheet accounts of the consolidated foreign subsidiaries
are translated into Japanese yen at the current exchange
rate as of the balance sheet date except for equity, which
is translated at the historical rate. Differences arising fromsuch translation are shown as "Foreign currency translation
adjustments" under accumulated other comprehensive
income in a separate component of equity. Revenue andexpense accounts of consolidated foreign subsidiaries aretranslated into Japanese yen at the average exchange rate.
t. Derivatives and Hedging Activities—The Group uses
derivative financial instruments to manage its exposures
to fluctuations in foreign exchange, interest rates andraw material costs. Foreign exchange forward contracts,
currency swaps, interest rate swaps and commodity swaps
are utilized by the Group to reduce the risk of fluctuation offoreign currency exchange, interest rate and raw material
costs. The Group does not enter into derivatives for tradingor speculative purposes.
		 Derivative financial instruments are classified andaccounted for as follows: (a) all derivatives, except for
those that qualify for hedge accounting, are recognized aseither assets or liabilities and measured at fair value, andgains or losses on derivative transactions are recognizedin the income statement and (b) for derivatives used
for hedging purposes, if derivatives qualify for hedge
accounting because of high correlation and effectivenessbetween the hedging instruments and the hedged items,
gains or losses on derivatives are deferred until maturity of
the hedged transactions.
		 Interest rate swaps which qualify for hedge accounting
and meet specific matching criteria are not remeasured atmarket value but the differential paid or received under theswap agreements is recognized and included in interest
expense.
		 The commodity swaps which qualify for hedge
accounting are measured at market value at the balance
sheet date and the unrealized gains or losses are deferred
until maturity as deferred gain (loss) on derivatives underhedge accounting as a separate component of equity.
u. Per Share Information—Basic net income per share iscomputed by dividing net income attributable to commonshareholders by the weighted-average number of commonshares outstanding for the period, retroactively adjusted forstock splits.
		 Cash dividends per share presented in the accompanying
consolidated statement of income and comprehensive
income are dividends applicable to the respective fiscal
years, including dividends to be paid after the end of theyear.
v. New Accounting Pronouncements—Accounting Standard for Corporate, Inhabitant and Enterprise
Taxes (ASBJ Statement No. 27, October 28, 2022)—Accounting Standard for Presentation of Comprehensive
Income (ASBJ Statement No. 25, October 28, 2022)—Guidance on Accounting Standard for Tax Effect Accounting(ASBJ Guidance No. 28, October 28, 2022)(1) Overview
In February 2018, ASBJ issued ASBJ Statement No. 28,"Partial Amendments to Accounting Standard for Accounting
for Tax Effect Accounting" and others ("ASBJ Statement No.
28, etc."), and completed the transfer of practical guidelines ontax effect accounting from Japanese Institute of Certified Public
Accountants to ASBJ, and in the course of its deliberations, thefollowing two issues, which had been to be discussed again after
the release of ASBJ Statement No. 28, etc., were discussed andreleased.
• Classification of tax expenses (Taxation on Other
Comprehensive Income)• Tax effect on sales of shares of subsidiaries or affiliates
when the Group Taxation Regime is applied(2) Scheduled date of adoption
The standards will be adopted from the beginning of the fiscal
year ending March 31, 2025.
(3) Impact of adopting the accounting standards
The Company is in the process of measuring the effect ofapplying the standards in future applicable periods.

17

18

DENYO CO., LTD. and Consolidated Subsidiaries

3. STOCK GRANTING TRUST ("J-ESOP" and "BBT")The Company has introduced a Stock Granting Trust ("J-ESOP")
for the purpose of enhancing the benefits package to employees
and providing incentives for raising corporate value.
The Company grants employees points according to theircontinued services and results, and when the employees
retire, the Company delivers to them its own stock (or pays anequivalent amount in cash) corresponding to the number of theiraccumulated points through the Trust.

The Company has introduced a stock compensation plan for
directors called the "Board Benefit Trust (BBT)." The Company
grants its directors points according to the Company's businessresults, etc., and the Company delivers to the directors who havebeneficiary rights its own stock corresponding to the number of
their accumulated points determined on a given date every year
through the Trust.
These Trusts held treasury stock as follows which was
included in the balance sheet of the Company:
Thousands of
U.S. Dollars
2024

Millions of Yen
2024
2023
¥486
(740)

Treasury stock(Number of shares (thousands of shares))

¥486
(756)

$3,092

4. MARKETABLE AND INVESTMENT SECURITIESMarketable and investment securities as of March 31, 2024 and 2023, consisted of the following:Thousands of
U.S. Dollars
2024

Millions of Yen
2024
2023
Non-current:
Marketable equity securities
Nonmarketable equity securities¥9,609873¥6,724
873$63,467
5,765

Total

¥10,482¥7,597$69,232

The cost and aggregate fair values of marketable and investment securities at March 31, 2024 and 2023, were as follows:
Millions of Yen
Unrealized
Gains

Unrealized
LossesMarch 31, 2024

Cost

Fair Value

Securities classified as available-for-sale—
Equity securities¥1,753¥7,856¥9,609¥1,800¥4,924¥6,724

March 31, 2023
Securities classified as available-for-sale—
Equity securities

Thousands of U.S. Dollars
March 31, 2024

Cost

Unrealized
Gains

Securities classified as available-for-sale—
Equity securities$11,579$51,888

Unrealized
LossesFair Value$63,467

The proceeds, realized gains and realized losses of the available-for-sale securities which were sold during the years ended March 31,
2024 and 2023, were as follows:
Thousands of U.S. Dollars

Millions of Yen
March 31, 2024
Available-for-sale—Equity securities

Proceeds

Realized
Gains

¥51

¥1

¥70

¥39

March 31, 2023
Available-for-sale—Equity securities

Realized
Loss

Proceeds

Realized
Gains

$338

$5

Realized LossYear ended March 31, 2024

5. INVENTORIESInventories at March 31, 2024 and 2023, consisted of the following:
Millions of Yen
2024
2023

Thousands of
U.S. Dollars
2024

Finished products and merchandiseWork in process
Raw materials and supplies¥5,7602,714
9,314¥5,2442,103
9,067$38,048
17,92761,516

Total¥17,788¥16,414$117,491

6. INVESTMENTS IN ASSOCIATED COMPANIESInvestments in associated companies at March 31, 2024 and 2023, were as follows:
Millions of Yen
2024
2023

Thousands of
U.S. Dollars
2024

Investments—New Japan Machinery Corporation¥1,118¥1,072$7,383

Total¥1,118¥1,072$7,383

7. SHORT-TERM BANK LOANS AND LONG-TERM DEBT
Short-term bank loans at March 31, 2024 and 2023, consisted of bank overdrafts. The weighted-average interest rates applicable to theshort-term bank loans were 1.4% and 0.4% at March 31, 2024 and 2023, respectively.
Long-term debt at March 31, 2024 and 2023, consisted of the following:

Millions of Yen
2024
2023

Thousands of
U.S. Dollars
2024

Unsecured loans from banks, with interest
rate at 5.0% and 4.2% (2024 and 2023)
Lease obligations
		TotalLess current portion¥1,496
381
1,877
(104)

¥1,438
356
1,794
(100)

$9,882
2,515
12,397(689)

Long-term debt, less current portion¥1,773¥1,694$11,708

Annual maturities of long-term debt at March 31, 2024, were as follows:Year Ending March 31

Millions of Yen

Thousands of
U.S. Dollars

2025
2026
2027
2028
2029
2030 and thereafter

¥104
1,160
99
98
96
320

$689
7,661
655
646
633
2,113

Total

¥1,877$12,397

8. COMMITMENT LINE CONTRACTS
In order to raise funds efficiently, the Company has entered into a commitment line contract with four financial institutions, of which
Mizuho Bank, Ltd. is the arranger. The contract provided the Company with a commitment line of ¥3,000 million ($19,815 thousand) as
of March 31, 2024. The Company had no borrowings outstanding under the agreement as of March 31, 2024.

19

20

DENYO CO., LTD. and Consolidated Subsidiaries

9. RETIREMENT AND PENSION PLANS
The Company has a defined benefit pension plan anddomestic subsidiaries also participate in the same plan. A
certain foreign subsidiary has its own defined benefit pension
plan and other foreign subsidiaries have defined contributionplans. In addition, the Company and domestic subsidiaries

have a stock granting retirement plan.
The projected benefit obligation of a certain domestic
subsidiary is calculated using a simplified method, whichis permitted for small companies in accordance with theaccounting standard for retirement benefits.

(1) The changes in defined benefit obligation for the years ended March 31, 2024 and 2023, were as follows:
Millions of Yen
2024
2023

Thousands of
U.S. Dollars
2024

Balance at beginning of year
Current service cost
Interest cost
Actuarial losses (gains)
Benefits paid
Others¥2,758
202
28
99
(209)
14

¥2,712
188
26
(15)
(163)
10

$18,218
1,338
187
653
(1,384)
91

Balance at end of year

¥2,892¥2,758$19,103(2) The changes in plan assets for the years ended March 31, 2024 and 2023, were as follows:
Millions of Yen
2024
2023

Thousands of
U.S. Dollars
2024

Balance at beginning of year
Expected return on plan assets
Actuarial losses
Contributions from the employer
Benefits paid
Others¥2,427
30
(13)
234
(185)
1

¥2,424
27
(52)
186
(158)
0

$16,032
201
(87)
1,546
(1,222)
5

Balance at end of year

¥2,494¥2,427$16,475(3) Reconciliation between the liability recorded in the consolidated balance sheet and the balances of defined benefit obligationand plan assets was as follows:
Millions of Yen
2024
2023

Thousands of
U.S. Dollars
2024

Funded defined benefit obligation
Plan assets¥2,8292,494¥2,681
2,427$18,684
16,475

			Total
Unfunded defined benefit obligation
Liability for stock granting retirement

335
63
195

254
77
182

2,209
419
1,287

Net liability arising from defined benefit obligation

¥593

¥513

$3,915

Millions of Yen
2024
2023

Thousands of
U.S. Dollars
2024

Liability for retirement benefits

¥593

¥513

$3,915Net liability arising from defined benefit obligation

¥593

¥513

$3,915

Year ended March 31, 2024

(4) The components of net periodic benefit costs for the years ended March 31, 2024 and 2023, were as follows:
Millions of Yen
2024
2023

Thousands of
U.S. Dollars
2024

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

¥203
28
(30)
54
55

¥188
26
(27)
12
39

$1,338
187
(201)
357
366

Net periodic benefit costs

¥310

¥238

$2,047(5) Amounts recognized in other comprehensive income (before income tax effect) in respect of defined retirement benefit plans
for the years ended March 31, 2024 and 2023, were as follows:
Millions of Yen
2024
2023
¥(58)

Actuarial gains¥(26)

Thousands of
U.S. Dollars
2024$(383)(6) Amounts recognized in accumulated other comprehensive income (before income tax effect) in respect of defined retirement
benefit plans as of March 31, 2024 and 2023, were as follows:
Millions of Yen
2024
2023
¥(132)

Unrecognized actuarial gains¥(74)

Thousands of
U.S. Dollars
2024$(875)(7) Plan assets
a. Components of plan assets
		 Plan assets as of March 31, 2024 and 2023, consisted of the following:
2024

2023

General account managed by a life insurance company
Other

98.4%
1.6

97.0%
3.0

Total

100.0%

100.0%

b. 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 of return which are expected currently
and in the future from the various components of the plan assets.
(8) Assumptions used for the years ended March 31, 2024 and 2023, are set forth as follows:

Discount rate
Expected rate of return on plan assets
Expected rate of future salary increase

10. EQUITY
Japanese 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

2024

2023

Mainly 0.60%
Mainly 1.25%
Mainly 1.90%

Mainly 0.60%
Mainly 1.25%
Mainly 1.90%

an Audit & Supervisory Board, and (4) the term of service of thedirectors being prescribed as one year rather than the normal
two-year term by its articles of incorporation, the Board of
Directors may declare dividends (except for dividends-in-kind) at
any time during the fiscal year if the company has prescribed soin its articles of incorporation. With respect to the third condition
above, the Board of Directors of companies with (a) board
committees (namely, appointment committee, compensationcommittee and audit committee) or (b) an audit and supervisory

21

22

DENYO CO., LTD. and Consolidated Subsidiaries

committee (as implemented under the Companies Act effective
May 1, 2015) may also declare dividends at any time becausesuch companies, by nature, meet the criteria under theCompanies Act. The Company is organized as a company with
an audit and supervisory committee, effective June 29, 2021.
The Company meets all the above criteria and, accordingly, theBoard of Directors may declare dividends (except for dividendsin-kind) at any time during the fiscal year.
		 The Companies Act permits companies to distributedividends-in-kind (noncash assets) to shareholders subject toa certain limitation and additional requirements.
		 Semiannual interim dividends may also be paid once a
year upon resolution by the Board of Directors if the articles
of incorporation of the company so stipulate. The Companies
Act provides certain limitations on the amounts available fordividends or the purchase of treasury stock. The limitation
is defined as the amount available for distribution to theshareholders, but the amount of net assets after dividends
must be maintained at no less than ¥3 million.
b.	Increases/Decreases and Transfer of Common Stock, Reserveand Surplus
	The Companies Act requires that an amount equal to 10%
of dividends must be appropriated as a legal reserve (acomponent of retained earnings) or as additional paid-in capital(a component of capital surplus), depending on the equity
account charged upon the payment of such dividends, until theaggregate amount of the legal reserve and additional paid-in
capital equals 25% of the common stock. Under the Companies
Act, the total amount of additional paid-in capital and 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 canbe 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 purchasetreasury stock and dispose of such treasury stock by resolutionof the Board of Directors. The amount of treasury stock
purchased cannot exceed the amount available for distribution
to the shareholders which is determined by a specific formula.
Under the Companies Act, stock acquisition rights arepresented as a separate component of equity. The Companies
Act also provides that companies can purchase both treasury
stock acquisition rights and treasury stock. Such treasury stockacquisition rights are presented as a separate component ofequity or deducted directly from stock acquisition rights.

11. INCOME TAXESThe Company and its domestic subsidiaries are subject toJapanese national and local income taxes which, in the aggregate,
resulted in a normal effective statutory tax rate of approximately
30.6% for the years ended March 31, 2024 and 2023.

The tax effects of significant temporary differences and tax
loss carryforwards which resulted in deferred tax assets andliabilities at March 31, 2024 and 2023, are as follows:

Millions of Yen
2024
2023

Thousands of
U.S. Dollars
2024

Deferred tax assets:
¥213
63
127
87
131
19
166
74
21
213
(83)

¥204
33
124
49
157
17
122
74
21
203
(89)

$1,409
420
837
573
868
125
1,096
490
136
1,408
(549)

			Total

1,031

915

6,813

Deferred tax liabilities:
Reserve for deferred gains on sales of property
Unrealized gain on available-for-sale securities
Other

346
2,334
17

347
1,437
12

2,288
15,418111

			Total

2,697

1,796

17,817¥(1,666)¥(881)$(11,004)

Accrued bonuses
Provision for product warranties
Research and development costs
Accrued enterprises taxes
Unrealized gain on sale of inventory
Unrealized gain on sale of property
Liability for retirement benefits
Loss on revaluation of investment securities
Tax loss carryforwards
Other
Less valuation allowance

Net deferred tax liabilities

As the difference between the normal effective statutory tax rate and the actual effective tax rate reflected in the accompanying
consolidated statement of income and comprehensive income for the year ended March 31, 2024, is less than 5% of the normal
effective statutory tax rate, a reconciliation is omitted.

Year ended March 31, 2024

A reconciliation between the normal effective statutory tax rates and the actual effective tax rates reflected in the accompanying
consolidated statement of income and comprehensive income for the year ended March 31, 2023, is as follows:
2023
Normal effective statutory tax rate
Expenses not deductible for income tax purposes
Income not recognizable for income tax purposes
Per capita portion of inhabitants’ taxes
Tax credits
Lower income tax rates applicable to income in certain foreign countries
Valuation allowance
Other—net

30.6%
2.1
(0.3)
0.6
(1.1)
(1.1)
(0.1)
(1.8)

Actual effective tax rate

28.9%

At March 31, 2024, some subsidiaries have tax loss carryforwards aggregating approximately ¥95 million ($629 thousand)which are available to be offset against taxable income of such subsidiaries in future years.

12. REVENUE(1) Disaggregation of Revenues
Revenues from contracts with customers on a disaggregated basis for the years ended March 31, 2024 and 2023, were as follows:(a) Sales results by productMillions of Yen
2024

Thousands of U.S. Dollars

Generators Welders Compressors Others

Total

Generators Welders Compressors Others

Total

Products and services
Revenues from contracts
with customers
Other revenue¥61,488¥4,438¥694¥6,521 ¥73,141$406,128$29,311$4,583 $43,073 $483,095

61,4884,438

694

6,521 73,141

406,128

29,311

4,583

Total

¥61,488¥4,438¥694¥6,521 ¥73,141$406,128$29,311$4,583 $43,073 $483,095

Asia

Other
Areas

Total

2023

Generators Welders Compressors Others

43,073 483,095

Total

Products and services
Revenues from contracts
with customers
Other revenue¥53,700¥4,402¥727¥5,483 ¥64,312

53,700

4,402

727

5,483

Total

¥53,700¥4,402¥727¥5,483 ¥64,312

64,312(b) Sales results by region
Millions of Yen

Thousands of U.S. Dollars

2024

Japan

North andCentralAmerica

Asia

Other
Areas

Total

Japan

North andCentralAmerica

Products and services
Revenues from contracts
with customers
Other revenue¥38,390¥25,231¥6,643¥2,877¥73,141$253,566$166,649$43,877$19,003$483,095

38,39025,231

6,643

2,877

73,141

253,566

166,649

43,87719,003

483,095

Total¥38,390¥25,231¥6,643¥2,877¥73,141$253,566$166,649$43,877$19,003$483,095

2023

Japan

North andCentralAmerica

Asia

Other
Areas

Total

Products and services
Revenues from contracts
with customers
Other revenue¥34,245¥21,617¥5,903¥2,547¥64,312

34,245

21,617

5,903

2,547

64,312

Total¥34,245¥21,617¥5,903¥2,547¥64,31223

24

DENYO CO., LTD. and Consolidated Subsidiaries(2) Basic Information to Understand Revenues from Contracts with Customers
Basic information to understand revenues from contracts with customers is as stated in Note 2.m.
(3) Contract Balances
Contract liabilities consist mainly of advances received from customers before the performance obligations are satisfied andare reversed according to the recognition of revenue.
Contract liabilities at the beginning and end of the years ended March 31, 2024 and 2023, were as follows:
Millions of Yen Millions of Yen
2024
2023

Thousands of
U.S. Dollars
2024

Contract liabilities:
Balance at beginning of year
Balance at end of year

¥274
304

¥91
274

$1,8092,009

		 Of revenue recognized during the current fiscal year, the amounts included in the balance at beginning of year were ¥155
million ($1,023 thousand) and ¥83 million for the years ended March 31,2024 and 2023.
(4)	Transaction Prices Allocated to Remaining Performance Obligations
There were no significant contracts having an original expected duration of over one year at end of current fiscal year. For
contracts with an initially anticipated contract period within one year, description of transaction price allocated to remaining
performance obligations of the Group has been omitted applying a practical expedient. Moreover, there were not any
material consideration from contracts with customers which was not included in the transaction price.

13. RESEARCH AND DEVELOPMENT COSTS
Research and development costs charged to income were ¥582 million ($3,844 thousand) and ¥656 million for the years ended
March 31, 2024 and 2023, respectively.

14. LEASESThe Group leases certain vehicles and other assets under finance leases. Also, some foreign subsidiaries leases lands orother assets under operating leases which are included in non-current other assets in the consolidated balance sheet as rightof use assets applying International Financial Reporting Standards (IFRS) 16 or Accounting Standards Codification (ASC) 842.
Lease obligations were as follows:
Millions of Yen
2024
2023
Due within one year

Thousands of
U.S. Dollars
2024

Due after one year

¥32
349

¥27
329

$208
2,307

Total

¥381

¥356

$2,515

15. FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES(1) Group Policy for Financial Instruments
The Group invests cash surpluses in low-risk financial
assets such as commercial paper. Bank loans are used
to fund its ongoing operations. Derivatives are not used
for speculative purposes, but to manage exposure tofinancial risks as described in Note 16.
(2) Nature and Extent of Risks Arising from Financial
Instruments
Receivables, such as trade notes and trade accounts, areexposed to customer credit risk. Receivables in foreign
currencies are exposed to the market risk of fluctuation inforeign currency exchange rates.
Investment securities, mainly equity instruments ofcustomers and suppliers of the Company, are exposed to
the risk of market price fluctuations.
Payment terms of payables, such as trade notes andtrade accounts, are almost less than six months. Payables
in foreign currencies are exposed to the market risk offluctuation in foreign currency exchange rates.
Maturities of bank loans are less than six and elevenyears after the balance sheet date. A part of such bankloans is exposed to market risks from changes in variableinterest rates.
Derivatives mainly include interest rate swaps, commodity
swaps, forward foreign currency contracts, which are usedas necessary to manage exposure to market risks fromYear ended March 31, 2024

changes in interest rates of bank loans, from changes in
raw material (copper) prices, and from changes in foreign
currency exchange rates of receivables and advances.
Please see Note 16 for more detail about derivatives.
(3) Risk Management for Financial Instruments
Credit risk management
Credit risk is the risk of economic loss arising from acounterparty’s failure to repay or service debt according to
the contractual terms. The Company manages its credit risk
from receivables based on internal guidelines, which include
monitoring of payment term and balances of major customers
by the Sales Planning department to identify the default riskof customers at an early stage. Each consolidated subsidiaryalso manages its credit risk from receivables by an equivalentmethod.
Market risk management (foreign exchange risk and interest
rate risk)
Foreign currency trade receivables and payables are exposed
to market risk resulting from fluctuations in foreign currency
exchange rates. The Group reduces such foreign exchange
risk by balancing foreign currency trade receivables andpayables. Forward foreign currency contracts are used forsome foreign currency trade receivables and advances.
The Company keeps its borrowings within acceptable
limits and uses derivatives of interest rate swaps as necessary
to manage exposure to market risks from changes in interest
rates of loan payables. And the Company uses commodity
swaps to manage exposure to market risks from changes in
raw material (copper) prices.

The Company continuously reviews portfolios of securities
by periodically monitoring fair values of each security and thefinancial condition of the issuer as well as market conditions
and the relationship with the issuer.
In conducting derivative transactions, the division in chargeof each derivative transaction follows the internal policies
which prescribe the authority and the limit for each transaction.
The transaction data is reported to the management meetingon a monthly basis.
Liquidity risk management
Liquidity risk comprises the risk that the Company cannot
meet its contractual obligations in full on maturity dates. The
Company manages its liquidity risk by holding an adequate
volume of liquid assets along with adequate financial planningby the corporate treasury department.
(4) Fair Values of Financial Instruments
Fair values of financial instruments are as follows:
Investments in equity instruments that do not have aquoted market price in an active market are not includedin the following table. The fair values of cash and cash
equivalents, receivables (trade notes, electronicallyrecorded monetary claims-operating and trade accounts),
payables (trade notes, electronically recorded obligationsoperating and trade accounts) and short-term bank loans
are not disclosed because their maturities are short andthe carrying values approximate fair value. Also, please
see Note 16 for details of the fair values of derivatives.

(a) Fair value of financial instruments
Millions of Yen
March 31, 2024

Carrying Amount

Fair Value

Unrealized Gain/Loss

Investment securities¥9,609¥9,609Total¥9,609¥9,609Long-term debt

¥1,496¥1,496¥0

Total¥1,496¥1,496¥0Investment securities¥6,724¥6,724

Total¥6,724¥6,724Long-term debt(including Current portion of long-term debt)¥1,438¥1,438

Total¥1,438¥1,438March 31, 2023

Thousands of U.S. Dollars
March 31, 2024

Carrying Amount

Fair Value

Unrealized Gain/Loss

Investment securities$63,467$63,467

Total$63,467$63,467

Long-term debt(including Current portion of long-term debt)$9,882$9,882¥0

Total$9,882$9,882

¥0

25

26

DENYO CO., LTD. and Consolidated Subsidiaries(b) Carrying amount of investments in equity instruments that do not have a quoted market price in an active market
Millions of Yen
2024
2023
¥873

Unlisted equity instruments¥873

Thousands of
U.S. Dollars
2024$5,765(c) Maturity analysis for financial assets and securities with contractual maturities
Millions of Yen
Due inDue after One
One YearYear throughor Less
Five Years

March 31, 2024
Cash and cash equivalents

Thousands of U.S. Dollars
Due inDue after One
One YearYear throughor Less
Five Years

Time deposits other than cash equivalents
Receivables¥24,02913
26,048$158,713
85
172,041

Total¥50,090$330,839

March 31, 2023
Cash and cash equivalents
Receivables¥21,331
22,058

Total¥43,389

Please see Note 7 for annual maturities of long-term debt and Note 14 for lease obligations.
(5) Financial Instruments Categorized by Fair Value Hierarchy
The fair value of financial instruments is categorized into
the following three levels, depending on the observability
and significance of the inputs used in making fair value
measurements: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.

Level 1: Fair values measured by using quoted prices(unadjusted) in active markets for identicalassets or liabilities.
Level 2: Fair values measured by using inputs otherthan quoted prices included within Level 1

If multiple inputs are used that have a significant impact
on the measurement of fair value, fair value is classified
at the lowest level in the fair value measurement among
the levels to which each of these inputs belongs.

(a) The financial assets and liabilities measured at the fair values in the consolidated balance sheet
March 31, 2024

Level 1Marketable and investment securities—
Investment securities

Millions of Yen
Level 2
Level 3Thousands of U.S. Dollars
Level 2
Level 3
Total

Total

Level 1

¥9,609¥9,609¥63,467¥63,467

Total assets¥9,609¥9,609¥63,467¥63,467

March 31, 2023

Level 1Marketable and investment securities—
Investment securities¥6,724¥6,724

Total assets¥6,724¥6,724

Millions of Yen
Level 2
Level 3Total

Year ended March 31, 2024(b) The financial assets and liabilities not measured at the fair values in the consolidated balance sheet
Millions of Yen
Level 2
Level 3

Total

Marketable and investment securities—
Commercial paper¥1,000¥1,000$6,605$6,605

Total assets¥1,000¥1,000$6,605$6,605Long-term debt (including Current
portion of long-term debt)¥1,496¥1,496$9,882$9,882

Total liabilities¥1,496¥1,496$9,882$9,882Millions of Yen
Level 2
Level 3

Total

Marketable and investment securities—
Commercial paper¥1,000¥1,000Total assets¥1,000¥1,000Long-term debt

¥1,438¥1,438

Total liabilities¥1,438¥1,438March 31, 2024

March 31, 2023

Level 1

Level 1

Level 1Thousands of U.S. Dollars
Level 2
Level 3Total

The following is a description of valuation methodologies and inputs used for measurement of the fair value of assets andliabilities:
Marketable and Investment Securities
The fair values of commercial paper approximate carrying amounts because of its short maturities. Therefore, the carrying
amounts are regarded as the fair values. The fair values of investment securities are measured at the quoted market prices.
Since listed investment securities are traded in active markets, the fair values are categorized as Level 1. The fair valuesof other securities are classified as Level 2.
Long-Term Debt (including Current portion of long-term debt)
The fair values of long-term debt are measured by using discounted present value techniques considering assumptions
including expected future cash flows and discount, and are classified as Level 2. However, the fair values of long-term
debt on floating rate approximate carrying amounts because it reflects market interest rates in short times. Therefore, thecarrying amounts are regarded as the fair values.

16. DERIVATIVESThe Group enters into derivatives, in the normal course ofbusiness, to reduce the exposure to fluctuations in foreignexchange rates, raw material prices and interest rates. The
primary derivative instruments used by the Company areforeign currency forward contracts, commodity swaps andinterest rate swaps.
It is the Group’s policy to use derivatives only for the
purpose of reducing market risks associated with assets andliabilities.

Because the counterparties to these derivatives arelimited to major international financial institutions, the Group
does not anticipate any losses arising from credit risk.
Derivative transactions entered into by the Group havebeen made in accordance with internal policies which
regulate the authorization and credit limit amount.

Derivative Transactions to Which Hedge Accounting Is Not Applied
There are no applicable transactions.
Derivative Transactions to Which Hedge Accounting Is Applied
There are no applicable transactions.

27

28

DENYO CO., LTD. and Consolidated Subsidiaries

17. OTHER COMPREHENSIVE INCOME
The components of other comprehensive income, including reclassification adjustments and tax effects for the years ended March 31,
2024 and 2023, were as follows:
Thousands of
U.S. Dollars
2024

Millions of Yen
2024
2023
Unrealized gain on available-for-sale securities:
Gains arising during the year
Reclassification adjustments to profit or loss
Amount before income tax effect
Income tax effectTotal
Foreign currency translation adjustments—
Adjustments arising during the year
Total
Defined retirement benefit plans:
Adjustments arising during the year
Reclassification adjustments to profit or loss
Amount before income tax effect
Income tax effect
Total
Share of other comprehensive income inassociates— Gains arising during the year
Total
Total other comprehensive income¥2,932
(1)
2,931
(897)

¥436
(15)
421
(132)

$19,370(5)
19,365(5,927)¥2,034¥289$13,438¥1,119¥2,073$7,392¥1,119¥2,073$7,392

¥(81)
23
(58)
18

¥(40)
14
(26)
8

$(533)
150
(383)
117

¥(40)

¥(18)

$(266)

¥7

¥2

$44

¥7

¥2

$44

¥3,120¥2,346$20,608

18. NET INCOME PER SHARE
Basis for the computation of net income per share ("EPS") for the years ended March 31, 2024 and 2023, is as follows:Year Ended March 31, 2024
Basic EPS—Net income available to common shareholders

Millions
Thousands ofof YenSharesNet Income
Attributable to
Owners of the
WeightedParent
Average Shares

Yen

U.S. Dollars

EPS¥5,095

20,642¥246.83$1.63¥3,634

20,687¥175.64$1.32

Year Ended March 31, 2023
Basic EPS—Net income available to common shareholders

As noted in Note 2.l, the Company applied PITF No. 30, "Practical Solution on Transactions of Delivering the Company's Own Stock to
Employees etc. through Trusts." In calculating the number of weighted-average shares above, the number of shares that are held by theTrust (746 thousand shares in 2024 and 763 thousand shares in 2023) is reflected.

Year ended March 31, 2024

19. SEGMENT INFORMATION
Under ASBJ Statement No. 17, “Accounting Standard for Segment Information Disclosures” and ASBJ Guidance No. 20,“Guidance on Accounting Standard for Segment Information
Disclosures,” an entity is required to report financial and descriptive information about its reportable segments. Reportablesegments are operating segments or aggregations of operating
segments that meet specified criteria. Operating segments arecomponents of an entity about which separate financial information is available and such information is evaluated regularly by
the chief operating decision maker in deciding how to allocate
resources and in assessing performance. Generally, segment
information is required to be reported on the same basis as isused internally for evaluating operating segment performanceand deciding how to allocate resources to operating segments.
(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 being
performed in order to decide how resources are allocatedamong the Group. Therefore, geographic segments of theGroup consist of Japan, United States of America, Asia andEurope. Japan includes the Company, “Denyo Kosan Co.,
Ltd.” and “Nishihatsu Co., Ltd.” United States of America
mainly includes “Denyo Manufacturing Corporation.” Asia
mainly includes “Denyo United Machinery Pte. Ltd.” Europe
consists of “Denyo Europe B.V.”(2) Methods of Measurement for the Amounts of Sales,
Profit (Loss), Assets and Other Items for Each Reportable
Segment
The accounting policies of each reportable segment areconsistent with those disclosed in Note 2, “Summary of
Significant Accounting Policies.”(3) Information about Sales, Profit (Loss), Assets and Other Items
Millions of Yen
2024
Reportable Segment
Japan

United Statesof America

Asia

Europe

Total

Sales:
Sales to external customers
Intersegment sales or transfers¥48,630
5,575¥19,718
678¥3,919
6,167

¥874
6

¥73,141
12,426¥(12,426)

Total¥54,205¥20,396¥10,086¥880¥85,567¥(12,426)¥73,141

Segment profit
Segment assets¥4,237
81,524¥1,227
11,258¥784
13,440¥76746¥6,324
106,968¥765(6,427)¥7,089100,541

714
1,118

222

292

0

1,228
1,118

1,228
1,118

1,697

171

45

1,913

1,913

Other:
Depreciation and amortization
Investments in associated companies
Increase in property, plant andequipment and intangible assets

Reconciliations Consolidated¥73,141

Millions of Yen
2023
Reportable Segment
Japan

United Statesof America

Asia

EuropeTotal¥43,893¥15,882¥4,003¥534¥64,312

6,075

479

6,146

4

12,704¥(12,704)

Total¥49,968¥16,361¥10,149¥538¥77,016¥(12,704)¥64,312Segment profit
Segment assets¥2,83372,575¥831
10,687¥939
12,449¥23659¥4,626
96,370¥248(6,626)¥4,87489,744

732
1,072

262

272

0

1,266
1,072

1,266
1,072

4,109

15

89

4,213

4,213

Sales:
Sales to external customers
Intersegment sales or transfers

Other:
Depreciation and amortization
Investments in associated companies
Increase in property, plant andequipment and intangible assets

Reconciliations Consolidated¥64,31229

30

DENYO CO., LTD. and Consolidated Subsidiaries

Thousands of U.S. Dollars
2024
Reportable Segment
Japan

United Statesof America

Asia

Europe

Total

Sales:
Sales to external customers
Intersegment sales or transfers$321,201
36,822$130,237
4,477$25,885
40,737$5,77241$483,095
82,077$(82,077)

Total$358,023$134,714$66,622$5,813$565,172$(82,077)$483,095

Segment profit
Segment assets$27,985
538,465$8,10574,358$5,182
88,769$500
4,931$41,772
706,523$5,054(42,450)$46,826
664,073

4,715
7,383

1,464

1,930

0

8,109
7,383

11,207

1,132

297

Other:
Depreciation and amortization
Investments in associated companies
Increase in property, plant andequipment and intangible assets

Reconciliations Consolidated$483,095

8,109
7,383

12,636

12,636

Related Information(1) Information about Products and Services
Information about products and services for the years ended
March 31, 2024 and 2023, is omitted since sales to externalcustomers in a single product line (generators, welders,
compressors, and other related products) accounted formore than 90% of the total consolidated sales.

(2) Information about Major Customers
Sales to major customers for the years ended March 31, 2024 and 2023, are summarized as follows:
Millions of Yen
Name of Customers
Multiquip Inc.

2024
¥19,7182023¥15,882

Thousands of U.S.
Dollars
2024$130,237

Related Segment
United States of America

20. RELATED-PARTY TRANSACTIONSThe Company sold its products to New Japan Machinery Corporation, an associated company. The transactions were made with usual
terms and conditions.
The transactions with the associates for the years ended March 31, 2024 and 2023, and related balances at March 31, 2024 and2023, were mainly as follows:
Millions of Yen
2024
2023

Thousands of
U.S. Dollars
2024

Transactions—Sales¥3,708¥2,710$24,493

Balances:
Trade accounts receivable
Electronically recorded monetary claims—operating

¥724
2,098

¥862
1,210

$4,78013,857

21. SUBSEQUENT EVENT
Appropriations of Retained Earnings
The following appropriation of retained earnings at March 31, 2024, was approved at the Company's Board of Directors'
meeting held on May 16, 2024:

Year-end cash dividends, ¥40 ($0.26) per share******

Millions of Yen

Thousands of
U.S. Dollars¥857$5,664

Year ended March 31, 2024

Company Data
Company outline (As of March 31, 2024)
Company Name

Denyo Co., Ltd.

Established

July 2, 1948

Head Office

2-8-5, Nihonbashi-horidomecho, Chuo-ku,
Tokyo 103-8566, Japan
Tel:81-3-6861-1111 / Fax:81-3-6861-1181

Paid-in Capital¥1,954,833,520 (U.S.$ 12,911,714)

Authorized Shares

97,811,000

Issued Shares

22,859,660

Shareholders

5,432

Financial Year

April 1 to March 31

Employees

596 (1,408 consolidated)

Branch and Sales Offices

22

Directors, Audit Supervisory Board Members (As of June 27, 2024)
Representative Director, Chairman

Shoichi Shiratori

President

Takanori Yoshinaga

Director, Managing Executive Officer

Masao Yamada

Chief Executive,
Development Division,
Responsible for Production Division,
Overseas Manufacturing Subsidiary

Director, Managing Executive Officer

Makoto Tanabe

Chief Executive,
Administration Division,
General Manager, Personnel
Department

Director, Senior Executive Officer

Kenichi Otomo

Chief Executive International Sales &Marketing Division,
Responsible for Overseas Sales
Subsidiary

Director, Senior Executive Officer

Masakazu Minato

Chief Executive, Sales Division,
General Manager,
Sales Support Department

Outside Director

Yoshio Takeyama

Director, Audit & Supervisory Committee Member

Toru Hiroi

Director, Audit & Supervisory Committee Member

Kazuyoshi Kubo

Outside Director, Audit & Supervisory Committee
MemberKeiko Yamagami

Outside Director, Audit & Supervisory Committee
Member

Masako Natori

Outside Director, Audit & Supervisory Committee
MemberMakoto Koto

31

32

DENYO CO., LTD. and Consolidated Subsidiaries

Executive Officers (As of September 1, 2024)
Senior Executive Officer

Noboru Chosei

Chief Executive
Quality Management Division

Senior Executive Officer

Hirokazu Tsukasaki

Chief Executive, Production Division

Executive Officer

Shoichi Fujimoto

General Manager, Engineering Department
Development Division

Executive Officer

Shoichiro Fujimoto

General Manager,
Planning & Coordination Office

Executive Officer

Kenjiro Shirai

General Manager, Finance Department
Administration Division

Executive Officer

Koji Ikeda

General Manager, East Japan Sales Department
Sales Division

Executive Officer

Yoshihisa Furuta

Director of Denyo Kosan Co., Ltd.

Executive Officer

Takatoshi Ikeda

President of Denyo Manufacturing Corporation

Executive Officer

Junichiro Higaki

General Manager, Quality Management Department
Quality Management Division

Executive Officer

Takashi Ebihara

Deputy General Manager, West Japan Sales Department
Sales Division

Executive Officer

Takeshi Yamaguchi

General Manager, Information System Department
Administration Division

Year ended March 31, 2024

Business Lines
Manufacture and sales of:Generators

Engine-driven Generators
Stand-by Generating Sets
General-use Generating Sets
AC Generators

Welders

Engine-driven Welders
Welding Generators
Welding Jigs
Automatic Welding Equipment

Compressors

Engine-driven Air Compressors
Motor-driven Air Compressors

Other Products

Self-propelled Lifters
Construction-related Machinery
Repair Parts

Plants and R&D Center and Service Center
Fukui Plant

Wakasa-cho, Fukui Prefecture

Shiga Plant

Konan, Shiga Prefecture

Laboratory & Training Center

Sakado, Saitama Prefecture

Service Center Kanto

Sakura, Chiba Prefecture

Fukui Plant

Laboratory & Training Center

33

34

DENYO CO., LTD. and Consolidated Subsidiaries

Denyo Group Companies
Denyo Kosan Co., Ltd.
2-8-5, Nihonbashi-horidomecho, Chuo-ku, Tokyo 103-8566, Japan
Paid-in Capital: ¥50 million
Business: Services and sales of industrial electrical machinery and parts
Nishihatsu Co., Ltd.
140, Chichika, Karatsu, Saga 847-0831, Japan
Paid-in Capital: ¥50 million
Business: Manufacture and sales of industrial electrical machinery
Denyo America Corporation
1450 Minor Road, Danville, Kentucky 40422 U.S.A
Paid-in Capital: US$ 5 million
Business: Sales of parts for industrial electrical machinery
Denyo Manufacturing Corporation
1450 Minor Road, Danville, Kentucky 40422 U.S.A
Paid-in Capital: US$ 6 million
Business: Manufacture and sales of industrial electrical machinery to the U.S. market
Denyo Asia Pte. Ltd.
No.9 Neythal Road, Singapore 628614
Paid-in Capital: ¥600 million
Business: Sales of industrial electrical machinery
Denyo United Machinery Pte. Ltd.
No.9 Neythal Road, Singapore 628614
Paid-in Capital: S$ 3 million
Business: Sales, leasing and rental of industrial electrical machinery
Denyo Europe B.V.
Naamrijk 1, 3454 PX De Meern, The Netherlands
Paid-in Capital: €4 million
Business: Sales of industrial electrical machinery
Denyo Vietnam Co.,Ltd.
Plot A3,Thang Long Industrial Park II, Lieu Xa Commune,Yen My, Hung Yen, Vietnam
Paid-in Capital: US$ 10 million
Business: Manufacture and sales of industrial electrical machinery
Denyo Trading Vietnam Co., Ltd.
Room 606.03, 6th Floor, Indochina Plaza Hanoi Tower, No. 241 Xuan Thuy Street,
Dich Vong Hau Ward, Cau Giay District, Hanoi City, Vietnam
Paid-in Capital: US$ 900 thousand
Business: Services and sales of industrial electrical machinery and repair parts
P.T. Dein Prima Generator
JL. Raya Bekasi Km.28, Medan Satria,Bekasi 17132 Jawa Barat, Indonesia
Paid-in Capital: Rp 13,563 million
Business: Manufacture and sales of industrial electrical machinery to the Indonesia market
New Japan Machinery Corporation
3-6-5, Shinyokohama, Kohoku-ku, Yokohama, Kanagawa 222-0033, Japan
Paid-in Capital: ¥495 million
Business: Sales and rental service of industrial electrical machineryYear ended March 31, 2024

Investor Information
Investor Information(As of March 31, 2024)

Head Office

2-8-5, Nihonbashi-horidomecho, Chuo-ku,
Tokyo 103-8566, Japan
Tel: 81-3-6861-1111 Fax: 81-3-6861-1181

Financial Year

April 1 to March 31

Common Stock

Authorized shares: 97,811,000
Issued shares: 22,859,660(Included 1,422,964 shares of Company’s own stock)

Stock Listing

Tokyo Stock Exchange, Prime Section (Code: 6517)

Shareholders

5,432

Transfer Agency

Tokyo Securities Transfer Agent Co., Ltd.
3-11, Kanda Nishiki-cho, Chiyoda-ku, Tokyo
101-0054, Japan

Major Shareholders(As of March 31, 2024)

Shares Held(Thousands)

Voting Right Ratio(%)

The Master Trust Bank of Japan, Ltd.
(Trust Account)

1,956

9.12

The SFP Value Realization Master Fund Ltd.

1,795

8.37

Kyuei Corporation

1,417

6.61

Mizuho Trust & Banking Co., Ltd.

1,055

4.92

The Dai-ichi Life Insurance Co., Ltd.

872

4.06

Custody Bank of Japan, Ltd.
(Trust E Account)

739

3.45

Denyo Shin-eikai Group

672

3.13

Custody Bank of Japan, Ltd. (Trust Account)

570

2.66

The Chase Manhattan Bank, N. A. London
Special Omnibus Secs Lending Account

553

2.58

Tsurumi Manufacturing Co., Ltd

543

2.53

Shareholders

35