Financial Statements for the Fiscal Year Ended
March 31, 2023

Contents
01

Consolidated Balance Sheet

03

Consolidated Statement of Income
Consolidated Statement of Comprehensive Income

04

Consolidated Statement of Changes in Equity

05

Consolidated Statement of Cash Flows06

Notes to Consolidated Financial Statements

28

Independent Auditor’s ReportConsolidated Ba la n c e Sh e e t
Daiichi Jitsugyo Co., Ltd. And Consolidated Subsidiaries
March 31, 2023

Millions of yen

ASSETS

2023

2022

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

¥32,309
2,208¥26,782
1,640$241,964
16,542

1,223
34,441
48
4,387
2,387
9
7,141
23,58725,4342,221(125)
135,278

2,312
32,866
5
2,727

9,161
257,931364
32,85917,88074
53,484
176,648
190,480
16,639(936)
1,013,095

9,486
21,345
15,9382,025(109)
115,021

527
2,857
1,733
1,427
729
47
7,323
(4,123)
3,200

527
2,219
1,475
1,458
909
88
6,679
(3,606)
3,073

3,952
21,39912,984
10,6895,462
359
54,847(30,882)
23,964

Investment and other assets:
Investment securities (Notes 6 and 17)

8,079

7,745

60,505Investments in unconsolidated subsidiaries and associatedcompanies

1,962

2,113

14,694

Manufacturing and sales rights
Software
Long-term deposits
Deferred tax assets (Note 12)
Assets for retirement benefits (Notes 3 and 9)
Construction in progress (Software)
Other assets
Allowance for doubtful accounts
Total Investments and other assets

22
1,356
734
543
1,209
33
274
(159)
14,056

45
111
748
484
1,270
1,491
271
(142)
14,140170
10,156
5,498
4,070
9,056
253
2,055
(1,192)
105,269¥152,535¥132,235$1,142,329

TOTAL

LIABILITIES AND EQUITY

2023

2022

¥5,023¥6,962$37,618

120

120

898

2023

Short-term bank loans (Notes 8 and 17)
Current portion of long-term debt (Notes 8 and 17)
Payables (Note 17):

Property, plant and equipment:
Land
Buildings and structures
Machinery and equipment
Furniture and fixtures
Leased assets (Note 16)
Construction in progress
Total
Accumulated depreciation
Net property, plant and equipment

Millions of yen

Current liabilities:

Current assets:
Cash and cash equivalents (Note 17)
Time deposits (Note 17)
Receivables (Note 17):
Notes receivable
Accounts receivable
Unconsolidated subsidiaries and associated companies
Other
Contract assets (Note 13)
Securities (Notes 6 and 17)
Electronically recorded monetary claims (Note 17)
Inventories (Note 7)
Accounts prepaid
Other current assets
Allowance for doubtful receivables
Total current assets

Thousands of
U.S. Dollars(Note 1)

26

45

198

32,75527,686245,304

Unconsolidated subsidiaries and associated companies

942

950

7,057

Other

699

536

5,236

Income taxes payable

1,439

1,375

10,779Accrued expenses

2,381

1,853

17,837

Advances received (Note 13)

38,21927,362286,225

Other current liabilities

4,903

4,399

36,72286,511

71,292647,879

Long-term debt (Notes 8 and 17)

240

360

1,797

Liability for retirement benefits (Note 9)

492

463

3,688

1,123

974

8,413

509

422

3,818

2,365

2,220

17,717

Common stock,authorized - 32,000,000 shares- 11,086,400 shares in 2023 and 2022
issued

5,105

5,105

38,231

Capital surplus

3,826

3,812

28,657

96

96

719

Retained earnings

51,31946,683384,333

Treasury stock, at cost
527,625 shares in 2023 and 377,294 shares in 2022

(1,546)(858)(11,582)

2,991

2,737

22,399Notes payable
Accounts payable

Total current liabilities
Long-term liabilities:

Deferred tax liabilities (Note 12)
Other long-term liabilities
Total long-term liabilities
Commitments and contingent liabilities (Notes 16 and 18)
Equity (Notes 10, 11, and 22):

Stock acquisition rights

Accumulated other comprehensive income (loss):
Unrealized gain on available-for-sale securities
Deferred loss on derivatives under hedge accounting

(217)

(414)

(1,626)

Foreign currency translation adjustments

1,800

1,274

13,482

220

248

1,654

63,596

58,684476,267

62

38

465

63,65858,722476,732¥152,535¥132,235$1,142,329

Defined retirement benefit plans
Total
Non Controlling Interests
Total equity
TOTAL

See notes to consolidated financial statements.

1

DAIICHI JITSUGYO CO., LTD.

2

Consolidated Sta te m e n t o f In c o me

C onsolidated S tatem ent of C hanges in Equity

Daiichi Jitsugyo Co., Ltd. And Consolidated Subsidiaries
Year ended March 31, 2023

Daiichi Jitsugyo Co., Ltd. And Consolidated Subsidiaries
Year ended March 31, 2023

Millions of yen

Net sales (Note 13)
Cost of sales
Gross profit
Selling, general and administrative expenses (Notes 14 and 15)
Operating income

2023

2022

2023

¥153,674
127,003
26,671
19,9536,717¥148,075
123,936
24,13817,2716,866$1,150,859
951,119
199,739
149,432
50,307

406
(45)
199

327
(30)
273
(21)
(5)
237

3,045
(341)
1,493

Other income (expenses):
Interest and dividend income
Interest expense
Purchase discountAccident related loss
Loss on sales on property plant and equipment
Gain on sales of investment securities
Loss on valuation of investment securities
Loss on investments in silent partnerships
Other – net
Other income (expense) – net
Income before income taxes
Income taxes (Note 12):Current
Deferred
Total income taxes
Net income
Net income attributable to non-controlling interests
Net income attributable to owners of the parent

(12)
1,947
(15)
(2)
(153)
2,323

(29)
412
1,163

(95)
14,584(113)(22)(1,153)
17,397

9,040

8,030

67,704

2,814
(47)
2,767
6,273
(43)
¥6,316

2,440
215
2,656
5,374
11
¥5,363

21,080(356)
20,724
46,980(323)$47,303¥591.91
589.58178.0

Number ofshares ofStockcommonCommon Capital acquisition Retained
stock
stock
surplusearnings
rightsoutstanding¥501.02
498.97145.00Daiichi Jitsugyo Co., Ltd. And Consolidated Subsidiaries
Year ended March 31, 2023
Thousands of
U.S. Dollars (Note 1)

Millions of yen

Total comprehensive income attributable to :Owners of the parent
Non-controlling interests

2023

2022

2023

¥6,273¥5,374$46,980

253
197
540
(27)
964
¥7,237

(361)
(273)
1,193
11
570
¥5,944

1,897
1,479
4,048
(204)
7,221
$54,201¥7,265(28)¥5,93212$54,412
(210)

Total

Noncontrollinginterests

Total
equityBALANCE, MARCH 31, 2022
10,709 ¥5,105 ¥3,812 ¥96 ¥46,683 ¥(858) ¥2,737 ¥(414) ¥1,274 ¥248 ¥58,684 ¥38 ¥58,722
Cumulative effects of accountingchangeRestated balance
10,7095,105 3,812
96
46,683(858) 2,737(414) 1,274
248 58,684
38
58,722Adjustment of retained earningfor newly consolidated
subsidiaries
(83)
(83)
(83)
Net income attributable toowners of the parent
6,316
6,316
6,316
Cash dividends,¥178.00 per share(1,596)(1,596)(1,596)
Purchase of treasury stock
(164)
(720)
(720)
(720)
Disposal of treasury stock
14
14
31
46
46
Net change in the year
253
197
525
(27)
949
23
972
BALANCE, MARCH 31, 2023
10,558 ¥5,105 ¥3,826 ¥96 ¥51,319 ¥(1,546) ¥2,991 ¥(217) ¥1,800 ¥220 ¥63,596 ¥62 ¥63,658
Thousands of U.S. Dollars (Note 1)
Accumulated other comprehensive
income (loss)$4.43
4.42
1.33

Consolidated Sta te m e n t o f Co m p r e h e n s i v e I n c o me

Deferred
Unrealized loss on
Definedgain on derivatives Foreign
availableundercurrency retirement
Treasury
for-salehedgetranslation benefit
stock
securities accounting adjustments plans

BALANCE, APRIL 1, 2021
10,691 ¥5,105 ¥3,788 ¥107 ¥42,436 ¥(895) ¥3,099 ¥(141) ¥81 ¥237 ¥53,818 ¥26 ¥53,845
Cumulative effects of accountingchange274
274
274
Restated balance
10,691
5,105 3,788
107
42,711(895) 3,099(141)
81
237 54,093
26
54,120Net income attributable toowners of the parent
5,363
5,363
5,363
Cash dividends,¥145.00 per share(1,390)(1,390)(1,390)Purchase of treasury stock
(1)
(5)
(5)
(5)
Disposal of treasury stock
18
23
42
66
66
Net change in the year
(11)
(361)
(273) 1,192
11
557
12
569

Stock
Common Capital acquisition Retained
stock
surplusearnings
rightsSee notes to consolidated financial statements.

Net income
Other comprehensive income (Note 19):
Unrealized gain (loss) on available-for-sale-securities
Deffered gain (loss) on derivatives under hedge accounting
Foreign currency translation adjustment
Defined retirement benefit plans
Total other comprehensive income
Comprehensive income

Millions of yen
Accumulated other comprehensive
income (loss)

U.S. Dollars(Note 1)Yen

Per share of common stock (Notes 2u and 20):
Basic net income
Diluted net income
Cash dividends applicable to the year (Note 10)

Thousands

Thousands of
U.S. Dollars(Note 1)BALANCE, MARCH 31, 2022
Cumulative effects of accountingchangeRestated balance
Adjustment of retained earningfor newly consolidated
subsidiaries
Net income attributable toowners of the parent
Cash dividends,$1.33 per share
Purchase of treasury stock
Disposal of treasury stock
Net change in the year
BALANCE, MARCH 31, 2023

Deferred
Unrealized loss on
Definedgain on derivatives Foreign
availableundercurrency retirement
Treasury
for-salehedgetranslation benefit
stock
securities accounting adjustments plans

Total

Noncontrollinginterests

Total
equity$38,231 $28,550 $719 $349,609 $(6,429) $20,502 $(3,105) $9,545 $1,858 $439,482 $290 $439,772

38,231 28,550

719

349,609(623)(6,429) 20,502(3,105)

9,545

1,858

439,482(623)

290

439,772(623)

47,303(11,956)

47,30347,303(11,956)(11,956)(5,393)(5,393)(5,393)
106
239
346
346
1,897 1,479
3,936
(204)
7,108
174
7,283
$38,231 $28,657 $719 $384,333 $(11,582) $22,399 $(1,626) $13,482 $1,654 $476,267 $465 $476,732

See notes to consolidated financial statements.

See notes to consolidated financial statements.

3

DAIICHI JITSUGYO CO., LTD.

4

Consolidated Sta te m e n t o f Ca s h F l o w s

Notes to C onsolidated Financial S tatem ents

Daiichi Jitsugyo Co., Ltd. And Consolidated Subsidiaries
Year ended March 31, 2023

Daiichi Jitsugyo Co., Ltd. And Consolidated Subsidiaries
Year ended March 31, 2023

Thousands of
U.S. Dollars(Note 1)Millions of yen

Operating activities:
Income before income taxes and non controlling interests
Adjustments for:
Income taxes - paid
Depreciation and amortization
Gain on sales of investment securities
Loss on valuation of investment securities
Changes in operating assets and liabilities:(Increase) in allowanse for after - sales service
Loss on investments in silent partnerships(Increase) in notes and accounts receivable - trade(Increase) in advance payments to suppliers(Increase) in inventories
Increase (decrease) in notes and accounts payable - trade
Increase in advances from customers
Other - net
Total adjustments
Net cash provided by operating activities

2023

2022

2023

¥9,040¥8,030$67,704(2,601)
1,033(1,947)15(2,190)774(237)(19,485)
7,737(14,584)
113

2
(99)
(9,014)(2,028)
4,694
10,058
(212)
(99)
8,940

(542)
29
(9,303)(1,477)(6,009)(2,573)
5,087
4,984(11,456)(3,426)22(747)(67,508)(15,191)
35,15875,325(1,588)(748)
66,956

Investing activities:(Increase) decrease in time deposit - net
Acquisition of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Acquisition of marketable and investment securities
Proceeds from sales of investment securities
Payments for investments in capital
Payments of loans receivableCollection of loans receivable
Payments of long-term deposits
Other - net
Net cash used in investing activities

(458)
(498)
53
(338)
(227)
2,239
(79)
(2)
0
(41)
12
660

475
(215)
0
(359)
(779)
536
(52)
(1)
5
(38)
20
(409)

(3,434)(3,735)403(2,534)(1,702)
16,775
(591)
(20)
1
(308)
93
4,946

Financing activities:(Decrease) increase in short-term bank loans - net
Repayment of long-term debt
Purchase of treasury stock
Dividends paid
Repayments of finance lease obligations
Other - net
Net cash used in financing activities(1,907)(120)(720)(1,595)(211)(14)(4,569)

35
(195)
(5)
(1,391)(186)
0(1,742)(14,287)(898)(5,393)(11,948)(1,584)(105)(34,218)

301
5,333

1,093
(4,484)

2,259
39,94431,267¥26,782

1,447
200,572$241,964

Foreign currency translation adjustment on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents of newly consolidated subsidiaries,
beginning of year
Cash and cash equivalents,beginning of year
Cash and cash equivalents,end of year
See notes to consolidated financial statements.

5

DAIICHI JITSUGYO CO., LTD.

193
26,782¥32,309

1. BASIS OF PRESENTING CONSOLIDATED FINANCIAL STATEMENTS
The accompanying consolidated financial statements havebeen prepared in accordance with the provisions set forth in
the Japanese Financial Instruments and Exchange Act and its
related accounting regulations and in accordance withaccounting principles generally accepted in Japan (“Japanese
GAAP”), which are different in certain respects as to theapplication and disclosure requirements of International
Financial Reporting Standards.
		 In preparing these consolidated financial statements,
certain reclassifications and rearrangements have been madeto the consolidated financial statements issued domestically inorder to present them in a form which is more familiar toreaders outside Japan. In addition, certain reclassifications
have been made in the 2022 consolidated financial statements
to conform to the classifications used in 2023.
		 The consolidated financial statements are stated inJapanese yen, the currency of the country in which DAIICHIJITSUGYO CO., LTD. (the “Company”) is incorporated andoperates. The translations of Japanese yen amounts into U.S.
dollar amounts are included solely for the convenience ofreaders outside Japan and have been made at the rate of¥133.53 to $1, the approximate rate of exchange at March 31,
2023. 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.
		 Amounts of less than one million yen and one thousand
U.S. dollars have been rounded down to the nearest million
and thousand in the presentation of the accompanying
consolidated financial statements. As a result, the totals in yen
and U.S. dollars do not necessarily agree with the sum of theindividual amounts.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESa. Consolidation
The consolidated financial statements as of March 31, 2023,
include the accounts of the Company and its 17 significant (17 in2022) subsidiaries (together, the “Group”). Consolidation of theremaining unconsolidated subsidiaries would not have a material
effect on the accompanying consolidated financial statements.
		 Under the control and influence concepts, those companies
in which the Company, directly or indirectly, is able to exercise
control over operations are fully consolidated, and thosecompanies over which the Group has the ability to exercise
significant influence are accounted for by the equity method.
		 DC ENERGY GMBH was newly included in the scope of
consolidation from the fiscal year ended March 31, 2023 as it
became material.
		 DJK SOLAR SOLUTION CO., LTD. was excluded from thescope of consolidation from the fiscal year ended March 31,
2023 due to its liquidation.
		 Investments in one (one in 2022) associated company areaccounted for by the equity method.
		 Investments in the remaining unconsolidated subsidiaries
and other associated companies are stated at cost. If the equity
method of accounting had been applied to the investments inthese companies, the effect on the accompanying consolidated
financial statements would not be material.
		 All significant intercompany balances and transactions
have been eliminated in consolidation. All material unrealized
profit included in assets resulting from transactions within theGroup is also eliminated.

b. 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 similar transactions and events
under similar circumstances should in principle be unified forthe preparation of the consolidated financial statements.

However, financial statements prepared by foreign subsidiaries
in accordance with either International Financial ReportingStandards or generally accepted accounting principles in the
United States of America tentatively may be used for the
consolidation process, except for the following items thatshould be adjusted in the consolidation process so that net
income is accounted for in accordance with Japanese GAAP,
unless they are not material: 1) amortization of goodwill; 2)scheduled amortization of actuarial gain or loss of pensions thathas been recorded in equity through other comprehensive
income; 3) expensing capitalized development costs of R&D; 4)cancellation of the fair value model of accounting for property,
plant and equipment and investment properties andincorporation of the cost model of accounting; and 5) recording
a gain or loss through profit or loss on the sale of an investment
in an equity instrument for the difference between theacquisition cost and selling price, and recording impairment loss
through profit or loss for other-than-temporary declines in thefair value of an investment in an equity instrument, where aforeign subsidiary elects to present in other comprehensive
income subsequent changes in the fair value of an investment
in an equity instrument.

c. Unification of Accounting Policies Applied to Foreign
Associated Companies for the Equity Method
The accounting standard requires adjustments to be made toconform the associates' accounting policies for similartransactions and events under similar circumstances to thoseof the parent company when the associates' financial
statements are used in applying the equity method, unless it isimpracticable to determine such adjustments. In addition,
financial statements prepared by foreign associated companies
in accordance with either International Financial ReportingStandards or generally accepted accounting principles in the
United States of America tentatively may be used in applying

6

N ot es to C onso lid a te d F in a n c ia l S t a t e me n t s

the equity method if the following items are adjusted so thatnet income is accounted for in accordance with Japanese
GAAP, unless they are not material: (1) amortization of goodwill;(2) scheduled amortization of actuarial gain or loss of pensions
that has been recorded in equity through other comprehensive
income; (3) expensing capitalized development costs of R&D;
(4) cancellation of the fair value model of accounting forproperty, plant and equipment and investment properties andincorporation of the cost model of accounting; and (5)recording a gain or loss through profit or loss on the sale of aninvestment 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 aforeign subsidiary elects to present in other comprehensive
income subsequent changes in the fair value of an investment
in an equity instrument.

d. Cash Equivalents
Cash equivalents are short-term investments that are readily
convertible into cash and exposed to insignificant risk ofchanges in value. Cash equivalents include time deposits,
certificates of deposit, commercial paper, and bond funds, allof which mature or become due within three months of thedate of acquisition.

e. Inventories
Inventories are stated at the lower of cost, determined by theaverage cost method for merchandise and finished products andwork in process, and by the first-in, first-out method for raw
materials, or net selling value.

f.

Marketable and Investment Securities

Marketable and investment securities are classified andaccounted for, depending on management’s intent, as follows:i) held-to-maturity debt securities for which there is a positive
intent and ability to hold to maturity are reported at amortized
cost; andii) available-for-sale securities are reported at their 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 moving-average method. For other than
temporary declines in fair value, marketable and investment
securities are reduced to net realizable value by a charge toincome.

The range of useful lives is principally from 2 to 50 years forbuildings; from 2 to 26 years for machinery, equipment, andvehicles; and from 2 to 20 years for furniture and fixtures.

h. Investment and Other Assets
Manufacture and selling rights are domestic exclusive rights
to manufacturing, selling, and etc. of binary power generation
systems. It is amortized by the straight-line method based on
a 10-year prospective usable period.
		Software is amortized by the straight-line method basedon a 3 to 8-year prospective usable period.

i.

Long-Lived Assets

The Group reviews its long-lived assets for impairment whenever
events or changes in circumstance indicate the carrying amountof 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 is measured 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 continued use and eventual disposition of the asset or
the net selling price at disposition.

j.

Retirement and Pension Plans

The Company and certain consolidated subsidiaries have defined
benefit pension plans and defined contribution pension plans for
employees.
		 The Company accounts for the liability for retirement
benefits based on the projected benefit obligations and plan
assets at the balance sheet date. The projected benefit
obligations are attributed to periods on a benefit formula basis.
Actuarial gains and losses and past service costs that are yet
to be recognized in profit or loss are recognized within equity(accumulated other comprehensive income), after adjusting fortax effects, and are recognized in profit or loss over 14 years,
no longer than the expected average remaining service periodof the employees.
		 Retirement benefits for directors and Audit & Supervisory
Board members of certain domestic consolidated subsidiaries
are provided at the amount that would be required if all
directors and Audit & Supervisory Board Members retired at
the balance sheet date.

k. Asset Retirement Obligations
g. Property, Plant and Equipment
Property, plant and equipment are stated at cost. 		
Depreciation of property, plant and equipment of theCompany and its consolidated domestic subsidiaries iscomputed substantially by the declining-balance method
based on the estimated useful lives of the assets, while thestraight-line method is principally applied to the property, plantand equipment of consolidated foreign subsidiaries.
		 Depreciation of leased assets is computed by the straightline method based on the lease term of the respective assets.

7

DAIICHI JITSUGYO CO., LTD.

An asset retirement obligation is recorded for a legal obligation
imposed either by law or contract that results from theacquisition, construction, development, and normal operationof a tangible fixed asset and is associated with the retirementof such tangible fixed asset. The asset retirement obligationis recognized as the sum of the discounted cash flows
required for the future asset retirement and is recorded in the
period in which the obligation is incurred if a reasonableestimate can be made. If a reasonable estimate of the asset
retirement obligation cannot be made in the period the asset

retirement obligation is incurred, the liability should berecognized when a reasonable estimate of the asset
retirement obligation can be made. Upon initial recognition ofa liability for an asset retirement obligation, an asset
retirement cost is capitalized by increasing the carrying
amount of the related fixed asset by the amount of theliability. The asset retirement cost is subsequently allocatedto expense through depreciation over the remaining useful lifeof the asset. Over time, the liability is accreted to its present
value each period. Any subsequent revisions to the timing or
the amount of the original estimate of undiscounted cash
flows are reflected as an adjustment to the carrying amount of
the liability and the capitalized amount of the related asset
retirement cost.

l.

Stock Options

The cost of employee stock options is measured based on thefair value at the date of grant and recognized as compensation
expense over the vesting period as consideration for receiving
goods or services. In the consolidated balance sheet, stock
options are presented as stock acquisition rights as a separate
component of equity until exercised.

m. Revenue Recognition
The Company and its consolidated subsidiaries handle goods
and products related to the Plant & Energy Business, Energy
Solutions Business, Industrial Machinery Business, Electronics
Business, Automotive Business, Health care Business, andAviation & Social Infrastructure Business. In selling thesegoods and products, it is deemed that customers acquire
control over such goods and products and our performanceobligations are fulfilled upon delivery or acceptanceinspection. Accordingly, the Company recognizes revenue
upon delivery or acceptance inspection. However, in exporttransactions, revenue is recognized when risk bearing istransferred to customers in accordance with trade terms
defined mainly by Incoterms rules. Moreover, sometransactions mainly in the Plant & Energy Business in which
the role of the Company is considered to be an agent basedon the contents of a relevant contract are accounted for on a
net basis.
		 Meanwhile, revenue related to long-term contracted
construction agreements for some transactions mainly in the
Energy Solutions Business is recognized over time during
which our performance obligations are fulfilled. The progressof the fulfillment of performance obligations is measured
based on the ratio of costs incurred by the end of eachreporting period to the total cost expected to be incurred. In
addition, the Company recognizes revenue using the cost
recovery method if the progress of the fulfillment of its
performance obligations cannot be reasonably estimated but
the costs incurred are expected to be recovered.
		 Transaction prices are calculated by deducting discounts,
incentives, etc. from the consideration agreed in contracts
with customers.
		 Considerations of transactions are generally received
within a year from the fulfillment of the performanceobligations and do not involve significant financial elements.
		 Revenue related to finance leases is recorded by recording
sales and cost of sales on the date of commencement of alease transaction.

n. Research and Development Costs
Research and development costs are charged to income as
incurred.

o. Leases(Lessee)Finance lease transactions are capitalized by recognizing leaseassets and lease obligations in the balance sheet.
(Lessor)Finance leases that are deemed to transfer ownership of theleased property to the lessee are recognized as leasereceivables, and finance leases that are not deemed totransfer ownership of the leased property to the lessee arerecognized as investments in lease.

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 to which such bonuses are
attributable.

q. Income Taxes
The provision for income taxes is computed based on thepretax income included in the consolidated statement ofincome. 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. Deferredtaxes are measured by applying currently enacted income tax
rates to the temporary differences.

r.

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 theextent that they are not hedged by forward exchange
contracts.

s. Foreign Currency Financial Statements
The balance sheet accounts of the consolidated foreignsubsidiaries 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 arisingfrom such translation are shown as “Foreign currencytranslation adjustments” under accumulated othercomprehensive income in a separate component of equity.
		 Revenue and expense accounts of consolidated foreignsubsidiaries are translated into yen at the average exchange
rate.

8

N ot es to C onso lid a te d F in a n c ia l S t a t e me n t s

t. Derivatives and Hedging Activities
The Group uses derivative financial instruments to manage its
exposures to fluctuations in foreign exchange and interest
rates. Foreign exchange forward contracts are utilized by theGroup to reduce foreign currency exchange risks. The Group
does not enter into derivatives for trading or speculative
purposes.
		 Derivative financial instruments are classified andaccounted for as follows: (1) all derivatives are recognized aseither assets or liabilities and measured at fair value, and gains
or losses on derivative transactions are recognized in the
consolidated statement of income; and (2) for derivatives used
for hedging purposes, if such 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 thehedged transactions.
		 Foreign currency forward contracts employed to hedge
foreign exchange exposures for export sales and import purchases
are measured at fair value and the unrealized gains/losses aredeferred until maturity of the hedged transaction. Forward
contracts applied for forecasted (or committed) transactions arealso measured at fair value but the unrealized gains/losses aredeferred until the underlying transactions are completed.
		 Foreign currency forward contracts are utilized to hedge
foreign currency exposures in procurement of machinery fromoverseas customers/suppliers. Trade account receivables/
payables denominated in foreign currencies are translated at
the contracted rates if the forward contracts qualify for hedge
accounting.

u. Per Share Information

		 Diluted net income per share reflects the potential dilutionthat could occur if securities were exercised or converted into
common stock. Diluted net income per share of common
stock assumes full exercise of outstanding warrants.

4. ACCOUNTING CHANGE
The Company has applied the “Implementation Guidance on
Accounting Standard for Fair Value Measurement” (ASBJ
Guidance No. 31, June 17, 2021; hereinafter the “Fair Value
Measurement Guidance”) from the beginning of theconsolidated fiscal year under review. Consequently, in
accordance with the transitional treatment stipulated in		 Cash dividends per share presented in the accompanying
consolidated statement of income are dividends applicable to
the respective fiscal years, including dividends to be paid after
the end of the year.

v. New Accounting Pronouncements• Accounting Standard for Current Income 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) Summary
These accounting standards and guidance define theaccounting classification of income taxes in the case of
taxation on other comprehensive income and thetreatment of tax effects on sales of shares of subsidiaries,
etc. in the case of application of the group taxation regime.

5. CHANGE IN PRESENTATION
Prior to April 1, 2022, Purchase of treasury stock was includedin the other among the financing activities section of thestatement of cash flows.
		 Since during this fiscal year ended March 31,2023, theamount increased significantly due to the reason that theCompany repurchased own shares in accordance with Article

Marketable and investment securities as of March 31,2023
and 2022, consisted of the following:(2) Scheduled date of application

Millions of yen

These accounting standards and guidance are scheduled tobe applied from the beginning of the fiscal year ending
March 31, 2025.

2023

2022

Thousands of
U.S. Dollars

2023

Millions of yen

Assets for retirement benefits(Note 9)Thousands of
U.S. Dollars

2023

2022

2023

¥ 1,209¥ 1,270$ 9,056(2) Information on the significant accounting estimate
Accounting estimate and prerequisite for liability for retirement
benefits and retirement benefit costs is included in aforementioned
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES`s j.
Retirement and Pension Plans.
Discount rate used in calculation for retirement benefits
obligation is determined by considering the rate of yield of leading

The ¥9 million of government bonds are a mortgage forguarantee of dealings.
The costs and aggregate fair values of investment securities
at March 31, 2023 and 2022, were as follows:
Millions of yen

Current:
Government bonds(3) Impact of the application
The amount of impact is under evaluation at the time of
preparation of the consolidated financial statements.

$74

¥9

Non-current:
Marketable equity securities
Government bonds
Other
Total

March 31, 2023

Cost

Unrealized Unrealized
Gains
LossesSecurities classified as:
Available-for-sale:
Equity securities
Held-to-Maturity¥2,987¥9¥4,312¥0$53,760

900

9
1,077

6,744

Millions of yen$60,579

Cost

Unrealized Unrealized
Gains
LossesFair
Value¥2,681¥4,029¥6,658

¥9

¥0

Cost

Unrealized Unrealized
Gains
Losses¥8,089¥7,745

March 31, 2022

March 31, 2023
Securities classified as:
Available-for-sale:
Equity securities
Held-to-Maturity

7.

¥10

$22,372$74$32,296
$0

$909

Fair
Value

$53,760$74

INVENTORIESInventories at March 31, 2023 and 2022, consisted of thefollowing:Thousands of
U.S. Dollars

Millions of yen

Merchandise and finished products
Work in process
Total

DAIICHI JITSUGYO CO., LTD.

¥52

Thousands of U.S. Dollars

Raw materials and supplies

9¥7,178¥10¥6,658

Securities classified as:
Available-for-sale:
Equity securities
Held-to-Maturity

stock which is available from now to the time of payment of pension
benefit.
Expected rate of return on plan assets is determined by considering
present and future expected allocation of pension assets and present
and future expected long term rate of return on the basis of various
assets which compose the pension assets.
Used prerequisite and methods are judged as appropriate but incase of differences occur between prerequisite and actual conditions,or in case of the changes occur in prerequisite, then there is apossibility to have a significant effect on the recognized amount in
the next consolidated fiscal year`s consolidated financial statements
because these prerequisite include the unmanageable uncertainty.

¥121

Fair
Value

¥7,178

3. SIGNIFICANT ACCOUNTING ESTIMATE(1) Carrying amounts

156 of the Companies Act of Japan, as applied pursuant toParagraph 3, Article 165 of the Companies Act of Japan, suchamount is disclosed separately in the financing activities
section of the statement of cash flows as of March 31, 2023.
		 The amount included in the other as of March 31, 2022,
was ¥ 5 million.

6. MARKETABLE AND INVESTMENT SECURITIESBasic net income per share is computed by dividing net
income attributable to common shareholders by the weightedaverage number of common shares outstanding for theperiod, retroactively adjusted for stock splits.

Liability for retirement benefits and retirement benefit costs

Paragraph 27-2 of the Fair Value Measurement Guidance, theCompany intends to prospectively apply the new accounting
policy stipulated in the Fair Value Measurement Guidance.
		 This has no impact on the consolidated financial
statements for the consolidated fiscal year under review.

2023

2022

2023

¥21,408¥19,402$160,328

1,401

1,392

10,497

777

550

5,823

¥23,587¥21,345$176,648

10

N ot es to C onso lid a te d F in a n c ia l S t a t e me n t s

8. SHORT-TERM BANK LOANS AND LONG-TERM DEBT
Short-term bank loans at March 31, 2023 and 2022, consistedof notes to banks and bank overdrafts. The annual interest
rates applicable to the short-term bank loans ranged from
0.40% to 6.29% and 0.42% to 1.40% at March 31, 2023 and2022, respectively.
Long-term debt at March 31, 2023 and 2022, consisted of
the following:
Millions of yen

2023

2022

Thousands of
U.S. Dollars

2023

Loan from financial institution, due seriallyto 2025, with interest rates ranging to
0.45% (2023 and 2022)

Maximum amount of the loan commitment
Amount loaned
Unused credit balance

Millions of yen

Thousands of
U.S. Dollars¥12,000$89,867

3,000

22,466¥9,000$67,401¥480$2,695

Total

360

480

2,695

(120)

(120)

(898)

¥240

¥360

¥3,727¥3,608$27,915Interest cost

21

16

160

Current service cost

229

225

1,720

Expected return on plan assets

(29)

(23)

(224)

Interest cost

21

16

160

Amortization of prior service cost

24

(5)

186

Actuarial (gains) losses

(169)

43

(1,271)

Recognized actuarial (gains) losses

(27)

24

(206)

Benefits paid

(131)

(68)

(982)

Unfunded retirement benefit plans cost

28

43

215

28

(97)

215

Extra retirement payment

38

23

289

¥3,706¥3,727$27,758

Balance at beginning of year

Thousands of
U.S. Dollars¥4,534¥4,471$33,955

29

23

224

Actuarial losses

(208)

(57)

(1,559)Contributions from the employer

198

194

1,488

Prior service cost
Actuarial (gains) losses

Expected return on plan assets

Millions of yen

2024

¥120

$898

2025

120

898

Balance at end of year

2026

120

898

¥360

$2,695(3) Reconciliation between the liability recorded in the
consolidated balance sheet and the balances of defined
benefit obligation and plan assets

Benefits paid

(131)

(97)

(982)

¥4,423¥4,534$33,125

Thousands of
U.S. Dollars

DAIICHI JITSUGYO CO., LTD.

2023

2022

2023

Funded defined benefit obligation¥3,214¥3,263$24,070

Plan assets(4,423)(4,534)(33,125)(1,209)(1,270)(9,055)

Unfunded defined benefit obligation
Net asset arising from defined
benefit obligation

492

463

3,688

¥(716)¥(806)$(5,368)

Millions of yen

Thousands of
U.S. Dollars

2023

2022

2023

Liability for retirement benefits

¥492

¥463

$3,688

Assets for retirement benefits(1,209)(1,270)(9,056)

Net asset arising from defined
benefit obligation¥(716)¥(806)$(5,368)

19

10

146

¥305

¥315

$2,287(5) Amounts recognized in other comprehensive income(before income tax effect) in respect of defined retirement
benefit plans for the years ended March 31, 2023 and2022, were as follows:

2023

Millions of yen

11

Net periodic benefit costs

2022

Balance at beginning of year

The contributory funded defined benefit pension plan,
which was established under the Japanese Welfare Pension
Insurance Law, covers a substitutional portion of thegovernmental pension program managed by the Company onbehalf of the government and a corporate portion establishedat the discretion of the Company.
The liability for retirement benefits for directors and Audit& Supervisory Board members was ¥24 million($184 thousand) and ¥20 million at March 31, 2023 and 2022,
respectively. The retirement benefits for directors and Audit &Supervisory Board members are paid subject to the approvalof the shareholders.
The liability for employees’ retirement benefits at
March 31, 2023 and 2022, consisted of the following:

Others2023

Year ending March 31:

The Company and certain domestic consolidated subsidiaries
have severance payment plans for employees, directors, andAudit & Supervisory Board members.
Under most circumstances, employees terminating theiremployment are entitled to retirement benefits determinedbased on the rate of pay at the time of termination, years ofservice, and certain other factors. Such retirement benefits
are made in the form of a lump-sum severance payment fromthe Company or from certain consolidated subsidiaries andannuity payments from a trustee. In certain circumstances,
the Company might pay the severance premium on
termination of employment.
The Company and certain domestic consolidated
subsidiaries have non-contributory and contributory funded
defined benefit pension plans for employees which cover theirbenefits. Other consolidated subsidiaries have unfunded
retirement benefit plans.

2023$1,720

Service cost$1,797

9. RETIREMENT AND PENSION PLANS

2022
¥225

2023

Thousands of
U.S. Dollars

Total

2023
¥229

2022

Millions of yen

2027 and thereafterThousands of
U.S. Dollars

Millions of yen

2023(2) The changes in plan assets for the years ended March 31,
2023 and 2022, were as follows:

Annual maturities of long-term debt as of March 31, 2023,
were as follows:(4) The components of net periodic benefit costs for theyears ended March 31, 2023 and 2022, were as follows:

Thousands of
U.S. Dollars

Millions of yen

Balance at end of year¥360

Long-term debt, less current portion

In order to procure operating funds efficiently and stably, loan
commitments were signed with five banks. The unused
credit balance under those loans as of March 31, 2023, was
as follows:(1) The changes in defined benefit obligation for the years
ended March 31, 2023 and 2022, were as follows:

OthersUnsecuredLess current portion

Contributory funded defined benefit pension plan

Thousands of
U.S. Dollars

Millions of yen

Total

2023

2022

2023

¥24

¥24

$186

(66)

6

(495)

¥(41)¥31$(308)(6) Amounts recognized in accumulated other comprehensive
income (before income tax effect) in respect of defined
retirement benefit plans as of March 31, 2023 and 2022,
were as follows:
Millions of yen

Unrecognized prior service cost
Unrecognized actuarial gains
Total

Thousands of
U.S. Dollars

2023

2022

2023

¥47

¥72

$357

(385)

(451)

(2,887)¥(337)¥(379)$(2,529)(7) Plan assets(1). Components of plan assets
		 Plan assets as of March 31, 2023 and 2022, consisted
		 of the following:
2023

2022

Debt investments

50.3%

57.9%

Equity investments

17.5

15.3

General account

5.4

5.0

Others

26.8

21.8

Total

100%

100%

(2). Method of determining the expected rate of return on		plan assets
The expected rate of return on plan assets isdetermined considering the long-term rates of return
which are expected currently and in the future fromthe various components of the plan assets.

12N ot es to C onso lid a te d F in a n c ia l S t a t e me n t s(8) Assumptions used for the years ended March 31,2023 and2022, were set forth as follows:
2023

2022

Discount rate

1.2%

0.7%

Expected rate of return on plan assets

1.2%

0.7%

11. STOCK OPTIONSThe stock options outstanding as of March 31, 2023, are as follows:

The required amount of contribution to the definedcontribution plan for the Company and some of its
consolidated subsidiaries was ¥115 million ($862 thousand) for
the year ended March 31,2023.

10. EQUITY
Japanese companies have been 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. For
companies that meet certain criteria including (1) having a
Board of Directors, (2) having independent auditors, (3) having
an Audit & Supervisory Board, and (4) the term of service ofthe directors being prescribed as one year rather than thenormal two-year term by its articles of incorporation, the Boardof Directors may declare dividends (except for dividends-inkind) at any time during the fiscal year if the company hasprescribed so in its articles of incorporation. The Company
meets all the above criteria and, accordingly, the Board of
Directors may declare dividens (except for dividens-in-kind) at
any time during the fiscal year.
The Companies Act permits companies to distributedividends-in-kind (noncash assets) to shareholders subject to acertain limitation and additional requirements.
Semiannual interim dividends may also be paid once a year
upon resolution by the Board of Directors if the articles ofincorporation of the company so stipulate. The Companies Act
provides certain limitations on the amounts available fordividends or the purchase of treasury stock. The limitation isdefined 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.

13

DAIICHI JITSUGYO CO., LTD.

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 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 legal reserve and additional paid-in
capital equals 25% of the common stock. Under theCompanies 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, andretained earnings can be transferred among the accounts
within equity under certain conditions upon resolution of theshareholders.

c. Treasury Stock and Treasury Stock Acquisition Rights
The Companies Act also provides for companies to purchasetreasury stock and dispose of such treasury stock byresolution of the Board of Directors. The amount of treasury
stock purchased cannot exceed the amount available for
distribution to the shareholders, which is determined by aspecific formula.
Under the Companies Act, stock acquisition rights arepresented as a separate component of equity.
The Companies Act also provides that companies canpurchase both treasury stock acquisition rights and treasury
stock. Such treasury stock acquisition rights are presented asa separate component of equity or deducted directly fromstock acquisition rights.

Stock
Options

Persons
GrantedNumber of
Options Granted

Date of
Grant

Exercise
Price

Exercise
Period2011 Stock18

17,400

September 2, 2011

¥1

From September 2, 2011

Options

Persons

Shares($0.01)to September 1, 2041

2013 Stock

19

25,000

Options

Persons

Shares2015 Stock

15

23,400

Options

Persons

Shares2017 Stock15

26,800

Options

Persons

Shares2019 Stock12

23,600

Options

Persons

Shares

September 3, 2013

September 2, 2015

September 4, 2017

September 4, 2019¥1

From September 3, 2013($0.01)to September 2, 2043

¥1

From September 2, 2015($0.01)to September 1, 2045

¥1

From September 4, 2017($0.01)to September 3, 2047

¥1

From September 4, 2019($0.01)to September 3, 2049

The stock option activity is as follows:

For the Year ended March 31, 2023

2011
Stock Options(Shares)2013
Stock Options(Shares)

2015
Stock Options(Shares)2017
Stock Options(Shares)2019
Stock Options(Shares)

11,40019,800Non-vested
March 31, 2022 — Outstanding
GrantedCanceled
VestedMarch 31, 2023 — Outstanding
VestedMarch 31, 2022 — Outstanding

1,200

4,800

5,000

VestedExercised
Canceled
March 31, 2023 — Outstanding
Exercise price

1,200

4,800

5,000

11,40019,800

¥1

¥1

¥1

¥1

¥1

($0.01)($0.01)($0.01)($0.01)($0.01)¥1,665¥1,740¥2,630¥2,635¥2,148($12.47)($13.03)($19.70)($19.73)($16.09)

Average stock price at exercise

Fair value price at grant date14

N ot es to C onso lid a te d F in a n c ia l S t a t e me n t s

12. INCOME TAXES

13. REVENUEThe Company and its domestic subsidiaries are subject toJapanese national and local income taxes, which, in theaggregate, resulted in normal effective statutory tax rate of
30.6% for the years ended March 31, 2023 and 2022.
The tax effects of significant temporary differences andtax loss carryforwards which resulted in deferred tax assets
and liabilities at March 31, 2023 and 2022, were as follows:
Thousands of
U.S. Dollars

Millions of yen

2023

2022

2023

Deferred tax assets:
Allowance for doubtful accounts
Allowance for bonus payable

¥58

¥52

$436

303

293

2,270

Liability for retirement benefits

104

102

785

Evaluation loss on investment
securities

151

155

1,132

Provision for product warranties

59

98

445

Investment in and advances tounconsolidated subsidiaries
and associated companies

290

291

2,172

Revenue recognition for tax
purposes

616

183

4,618

Impairment loss

95

442

718

Tax loss carryforwards

72

29

540

Inventory valuation loss

143

101

1,073

Other

1,075

847

8,052

Less valuation allowance

(747)

(625)

(5,600)

2,222

1,974

16,645

Unrealized gain on availableforsale securities(1,231)(1,122)(9,219)Assets for retirement benefits

(341)

(361)

(2,555)

Cost of sales recognition for tax
purposes

(528)

(385)

(3,957)

Total
Deferred tax liabilities:

The expiration of tax loss carryforwards, the related valuation
allowances and the resulting net deferred tax assets as ofMarch 31, 2023 is as follows:

March 31, 2023

Millions of yen
After
After
After
After
1 year 2 years 3 years 4 years
1 year through through through through Afteror less 2 years 3 years 4 years 5 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

March 31, 2023

Thousands of U.S. Dollars
After
After
After
After
1 year 2 years 3 years 4 years
1 year through through through through Afteror less 2 years 3 years 4 years 5 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(72)

EnergySolutions
Business

Industrial
MachineryBusiness

Electronics
Business

Automotive
Business

Aviation &SocialHealthcare Infrastructure
Business
BusinessJapan¥10,964¥7,929¥13,129¥11,164¥14,845¥10,603

China

1,218

2,067

2,552

19,1085,625

930,581

Asia

3,735

892

7,688

16,053

1,046

705

30,121

Other

Total

¥231

¥71,306

Geographical areas:¥2,438

U.S.A.

975

1,290

170

1,282

9,843

60

79

13,701

Europe

292

6,329

225

940

97

56

0

7,942

Other

5

0

12

1

¥17,192¥18,509¥48,561¥31,459

Total¥23,76620¥11,435¥2,518¥231¥153,674

Other

Total

¥179

¥68,962

Millions of yen

2022$540 $540
Plant &
EnergyBusiness

EnergySolutions
Business

Industrial
MachineryBusiness

Electronics
Business

Automotive
Business

Aviation &SocialHealthcare Infrastructure
Business
BusinessJapan¥7,807¥13,368¥9,979¥9,634¥15,463¥10,070

China

957

1,061

3,115

25,1597,425

137,719

Asia

2,439

58

5,715

14,735

1,204

954

25,108

U.S.A.

338

1,141

370

2,142

7,738

156

0

11,888Europe

333

3,375

79

423

148

4

4

4,368

Other

5

15

3

0

2

27

¥19,275¥52,098¥31,980(540) (540)
Geographical areas:

2023

2022

30.6%

30.6%

Total

¥11,881¥19,004¥11,189

Expenses not deductible for income tax purposes

1.8

1.8

Exclusion from charges against revenue

(6.8)

(3.1)

Thousands of U.S. Dollars

2023

(373)

(457)

(2,799)Tax deduction

(0.1)

(0.3)

Other

(327)

(136)

(2,456)Per capita portion of inhabitant tax

0.3

0.3

(2,802)(2,463)(20,987)¥(579)¥(489)$(4,342)

Lower income tax rates applicable to income incertain foreign countries

(0.6)

(1.6)

Less valuation allowance

1.1

(0.5)

Elimination of inter-company dividend income

5.0

2.4

Retained earnings in certain foreign countries

(0.9)

1.7

Net deferred tax liabilities

Plant &
EnergyBusiness

Total

Retained earnings in certain
foreign countries
Total

Millions of yen

Total

A reconciliation between the normal effective statutory tax
rate and the actual effective tax rate reflected in theaccompanying consolidated statements of income for the Year
ended March 31, 2023, with the corresponding figures for
2022, is as follows:

Normal effective statutory tax rate

Revenues from contracts with customers on a disaggregated basis for the year ended March 31, 2023 and 2022, were as follows:2023¥72 ¥72(72)(1) Disaggregation of Revenue¥2,459¥2,466¥179¥148,075

Other

Total

$1,734$534,014

Plant &
EnergyBusiness

EnergySolutions
Business

Industrial
MachineryBusiness

Electronics
Business

Automotive
Business

Aviation &SocialHealthcare Infrastructure
Business
BusinessJapan$82,115$59,382$98,324$83,613$111,174$79,407

China

9,124

15,482

19,115143,099

42,12974

229,025
225,580

Geographical areas:$18,261

Investment gain on equity method

(0.1)

(0.1)

Withholding tax on dividends from foreign subsidiaries

1.1

0.4

Asia

27,971

6,680

57,580120,227

7,834

5,285

(0.8)

1.5

U.S.A.

7,306

9,665

1,275

9,601

73,715450593

102,609

30.6%

33.1%

Europe2,191

47,400

1,689

7,040

732

420

2

59,477

Other

44

2

89

14

$128,755$138,614$363,671$235,601

Other—net
Actual effective tax rate

Total

$177,985

151$85,638$18,857$1,734$1,150,859

Note: The “Other” segment is a business segment that is not included in the reportable segments and includes machinery andfixtures lease services and insurance agency business. The breakdown of lessors’ revenue from leasing included in net sales toexternal customers is omitted as it is immaterial.

15

DAIICHI JITSUGYO CO., LTD.

16

N ot es to C onso lid a te d F in a n c ia l S t a t e me n t s(2)	Basic Information to Understand Revenues fromContracts with Customers(4)	Transaction Prices Allocated to Remaining
Performance Obligations

Basic information to understand revenues is as stated in ”2.
Summary of significant accounting policies m. Revenue
recognition.”

The following table shows the summary of the transaction
prices allocated to remaining performance obligations that are
unsatisfied as of March 31, 2023 and 2022:(3) Contract Balances
Receivables from contract with customers , contract assets
and contract liabilities at the beginning and end of the years
ended March 31 , 2023 and 2022 are as follows:
Millions of yen

Thousands of
U.S. Dollars

2023

2022

2023

Balance at beginning of year¥44,653¥34,635$334,405

Balance at end of year

42,84444,653

320,857

Thousands of
U.S. Dollars

Millions of yen

2023
Within one year

(2) As Lessor

2022

56,996

Total

18,784

426,841¥200,302 ¥109,564 $1,500,056

Contract assets:
2,387

17,88027,361

21,345204,905

Balance at end of year

38,21927,361

286,221(1) Group Policy for Financial Instruments(2) Nature and Extent of Risks Arising from Financial
Instruments

Contract liabilities:
Balance at beginning of year

14. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses for the fiscal
years ended March 31, 2023 and 2022, principally consisted of
the following:Thousands of
U.S. Dollars

Millions of yen

2023

2022

2023

¥7,808¥ 6,841$58,476

Retirement benefit costs

378

378

2,836

Depreciation and amortization

818

474

6,129

Salaries and fees

Research and development costs
Rental expense

372

397

2,788

¥1,429¥ 1,369$10,707

Receivables, such as trade notes and trade accounts, areexposed to customer credit risk. Although receivables inforeign currencies are exposed to the market risk offluctuation in foreign currency exchange rates, those risks arehedged by using forward foreign currency contracts.
Marketable and investment securities, mainly held-tomaturity securities and equity instruments of customers andsuppliers of the Group, are exposed to the risk of market pricefluctuations. Payment terms of payables, such as trade notes
and trade accounts, are mainly less than one year. Althoughpayables in foreign currencies are exposed to the market riskof fluctuation in foreign currency exchange rates, those risks
are hedged by using forward foreign currency contracts.

(3) Risk Management for Financial Instruments
Credit risk management

15. RESEARCH AND DEVELOPMENT COSTS
Research and development costs charged to income for theyears ended March 31, 2023 and 2022, were ¥372 million

2022

2023

Due within one year

¥99

¥148

$747

Due after one year

106

133

794

¥205

¥282

$1,541Total

17. FINANCIAL INSTRUMENTS AND RELATED DISCLOSURESThe Group uses financial instruments, mainly short-term debt,
including bank loans, based on its capital financing plan. Cashsurpluses, if any, are invested in low-risk financial assets. Shortterm bank loans are used to fund the Group’s ongoing operations.
Derivatives are used, not for speculative purposes, but tomanage exposure to financial risks as described in (2) below.

Receivables from contracts withcustomers:

Balance at beginning of year
Balance at end of year

2023

2023

¥143,306 ¥ 90,779 $1,073,214

Exceeds one year

The Group leases machinery, equipment, and other assets.
Total rental revenues for the years ended March 31, 2023
and 2022, were ¥8 million ($63 thousand) and ¥214 million,
respectively.
The minimum rental commitments under noncancellable
operating leases at March 31, 2023 and 2022, were as follows:

Thousands of
U.S. Dollars

Millions of yen

Credit risk is the risk of economic loss arising from acounterparty’s failure to repay or service debt according to thecontractual terms. The Group manages its credit risk fromreceivables on the basis of internal guidelines, which include
monitoring of payment terms and balances of major($2,788 thoutand) and ¥397 million, respectively.

customers by each business administration department to
identify the default risk of customers at early stages. With
respect to held-to-maturity financial investment, the Groupmanages its exposure to credit risk by limiting its funding tohigh credit rated bonds in accordance with its internal
guidelines. Please see Note 18 for details about derivatives.
The maximum credit risk exposure of financial assets islimited to their carrying amounts as of March 31, 2023 and2022.
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. Such foreign exchange risk is hedged
principally by forward foreign currency contracts.
Interest rate swaps are used to manage exposure to market
risks from changes in interest rates of loan payables.
Marketable and investment securities are managed bymonitoring market values and the financial positions of issuers
on a regular basis.
Liquidity risk management
Liquidity risk comprises the risk that the Group cannot meetits contractual obligations in full on maturity dates. The Groupmanages its liquidity risk by holding an adequate volume ofliquid assets at the level of one month’s sales volume, alongwith adequate financial planning by the corporate treasury
department.

(4) Concentration of Credit Risk
There are no significant account receivables from any major
customer of the Group as of March 31, 2023 and 2022.

16. LEASES(1) As Lessee
Total rental expenses including lease payments under financeleases for the years ended March 31, 2023 and 2022, were¥685 million ($5,134 thousand) and ¥752 million, respectively.

		 Obligations under finance leases and future minimum
payments under noncancelable operating leases were as
follows:
Millions of yen

2022

2023

Operating
LeasesOperating
LeasesOperating
LeasesDue within one year

¥489

¥470

$3,665

Due after one year

1,645

302

12,322¥2,134¥772$15,987

Total

17

Thousands of U.S. Dollars

2023

DAIICHI JITSUGYO CO., LTD.

18

N ot es to C onso lid a te d F in a n c ia l S t a t e me n t s(5) Fair Values of Financial Instruments(a) Fair value of financial instruments
Millions of yen

Cash and cash equivalents$241,964$241,964

Time deposits

16,542

16,542

Receivables

300,316

300,282

Electronically recorded monetaryclaims53,48453,484

Fair
Value

Cash and cash equivalents¥32,309¥32,309

Held-to-maturity

74

74

Time deposits

2,208

2,208

Equity securities

53,76053,760Receivables

40,10140,096$666,142$666,108¥(4)Held-to-maturity
Equity securities
Total

PayablesShort-term bank loans
Long-term debt
Total

10

7,178

7,178

¥88,950¥88,945¥34,423¥34,423

5,023

5,023

360

354

¥39,806¥39,8010

At March 31, 2022

Carrying
AmountCash and cash equivalents¥26,782¥26,782

Time deposits

1,640

1,640

Receivables

37,91137,908

Electronically recorded monetaryclaims

9,486

9,486

¥(4)

¥(0)

(5)
¥(5)

Fair
Value

Held-to-maturity

910

Equity securities

6,658

6,658

¥82,489¥82,486

Short-term bank loans
Long-term debt
Total

DAIICHI JITSUGYO CO., LTD.

0$(34)$257,795

Short-term bank loans

37,61837,618Long-term debt

2,696

2,657

(38)

$298,112$298,071$(40)

Unrealized
Gain (Loss)

0

¥(2)

¥29,218¥29,217

¥(1)

6,962

6,962

480

476

(3)

¥36,661¥36,655¥(5)Investments in equity instruments that
do not have a quoted market price in an
active market
Investments in investment limited
partnerships(Silent partnership investment)

Cash and cash equivalents
The carrying values of cash and cash equivalents approximate
fair value because of their short maturities.

2023

2022

2023

¥2,798¥3,190$20,955¥64

The carrying values of electronically recorded monetary claims
approximate fair value because of their short maturities.

The fair values of marketable and investment securities aremeasured at the quoted market price of the stock exchange
for the equity instruments, and at the quoted price obtained
from the financial institution for certain debt instruments. Fairvalue information for marketable and investment securities byclassification is included in Note 6.
Receivables and payables
The fair values of receivables and payables are measured at theamount to be received or paid at maturity discounted at theGroup’s assumed corporate discount rate. The foreign currency
forward contracts are utilized to hedge foreign currency
exposures in the procurement of raw machinery from overseas
customers/suppliers. Trade account receivables/payables
denominated in foreign currencies are translated at the contracted
rates if the forward contracts qualify for hedge accounting.

$484

Millions of yen

Millions of yen

Due in 1 year Due after 1 year
or less
through 5 years

Cash and cash equivalents¥32,309
Time deposits
2,208
Receivables
39,866
Electronically recorded
7,141
monetary claimsMarketable and investment securities
Government bonds
9
Total¥81,536

Due after
5 years

¥235

¥235

Due in 1 year Due after 1 year
or less
through 5 years

Cash and cash equivalents¥26,782
Time deposits
1,640
Receivables
37,763
Electronically recorded
9,486
monetary claimsMarketable and investment securities
Government bonds
Total¥75,673

Due after
5 years

¥153

9
¥163

Due in 1 year Due after 1 year
or less
through 5 years

Cash and cash equivalents$241,964
Time deposits
16,542
Receivables
298,555
Electronically recorded
53,484monetary claimsMarketable and investment securities
Government bonds
74
Total$610,620

Level1

Level2Marketable and investment
securities
Available-for-sale securities
Equity securities

Level3

Total¥7,178¥7,178

Total¥7,178¥7,178

Derivative transactions
Foreign currency forward contracts¥(298)¥(298)Total¥(298)¥(298)At March 31, 2022

Level1

Level2Marketable and investment
securities
Available-for-sale securities
Equity securities

Level3Total¥6,658¥6,658

Total¥6,658¥6,658

Derivative transactions
Foreign currency forward contracts¥(625)¥(625)Total¥(625)¥(625)

Thousands of U.S. Dollars

Thousands of U.S. Dollars
At March 31, 2023

At March 31, 2023

Millions of yen

Millions of yen
At March 31, 2022

Level1:Fair values measured by using quoted prices(unadjusted)in active markets for identical assets or liabilities
Level2:Fair values measured by using inputs other than quoted
prices included within Level1 that are observable forthe assets or liabilities, either directly or indirectly
Level3:Fair values measured by using unobservable inputs forthe assets or liabilities
If multiple inputs are used that have a significant impact
on the measurement of fair value, fair value is categorized at
the lowest level in the fair value measurement among thelevels to which each of these inputs belongs.
(a)	The financial assets and liabilities measured at the fair values
in the consolidated balance sheet

Time deposit
The carrying values of time deposit approximate fair value
because of their short maturities.

Thousands of
U.S. Dollars(6) Maturity Analysis for Financial Assets andSecurities with Contractual Maturities

At March 31, 2023

Marketable and investment securities¥(3)Millions of yen$(2)Electronically recorded monetary claimsMarketable and investment
securities

Payables$(34)$257,797

Total

Millions of yen

Total

Total

Fair value information for derivatives is included in Note 18.
(b) Carrying amount of financial instruments whose fair value
cannot be reliably determined

Marketable and investment
securities

Payables9

Unrealized
Gain (Loss)

7,141

Marketable and investment
securities

19

Fair
Value

Carrying
Amount7,141

Unrealized
Gain (Loss)

At March 31, 2023

Carrying
Amount

At March 31, 2023

Electronically recorded monetaryclaimsDerivatives

Thousands of U.S. Dollars

Fair values of financial instruments are based on quoted prices
in active markets. If a quoted price is not available, otherrational valuation techniques are used instead. Please see
Note 18 for details on fair values of derivatives.

Due after
5 years$1,761

At March 31, 2023

Level1Marketable and investment
securities
Available-for-sale securities
Equity securities

Level2

Level3Total$53,760$53,760

Total$53,760$53,760

Derivative transactions
Foreign currency forward contracts$(2,233)$(2,233)

Total$(2,233)$(2,233)(b)	The financial assets and liabilities not measured at the fairvalues in the consolidated balance sheet
Millions of yen

At March 31, 2023
$1,761

Please see Note 8 for annual maturities of long-term debt
and Note 16 (1) for obligations under finance leases.

Short-term bank loans and long-term debt

(7) Financial Instruments Categorized by Fair Value
Hierarchy

The carrying values of short-term bank loans approximate fairvalue because of their short maturities. The fair values of longterm debt are determined by discounting the cash flows related
to the debt at the Group’s assumed corporate borrowing rate.

The fair value of financial instruments is categorized into thefollowing three levels, depending on the observability andsignificance of the inputs used in making fair value
measurements:

Level1

Receivables

Level2

Level3Total¥40,096¥40,096

Marketable and investment
securities
Held-to-maturity securities
Government bonds

¥10

10

Total

¥10 ¥40,096¥40,106¥34,423¥34,423

PayablesLong-term debt
Total

354

354

¥34,778¥34,778

20

N ot es to C onso lid a te d F in a n c ia l S t a t e me n t s

Receivables

Millions of yen

At March 31, 2022

Level1

Receivables

Level2

Level3Total¥37,908¥37,908

Marketable and investment
securities
Held-to-maturity securities
Government bonds

¥10

10

Total

¥10 ¥37,908¥ 37,918¥29,217¥29,217

476

476¥29,693¥29,693

PayablesLong-term debt
Total

Thousands of U.S. Dollars

At March 31, 2023

Level1

Receivables

Level2$300,282

Level3Total$300,282

Marketable and investment
securities
Held-to-maturity securities
Government bonds

$74

74

Total

$74 $300,282$300,357$257,795$257,795

2,657

2,657

$260,452$260,452

Receivables are first classified into groups based on
maturities. Then, the fair values of receivables are measured
by using discounted present value techniques considering
assumptions including expected future cash flows anddiscount rates taking into account maturity and credit risk,
and are categorized as Level2.
PayablesThe fair values of each group of payables are measured byusing discounted present value techniques considering
assumptions including expected future cash flows anddiscount rates taking into account maturity and credit risk,
and are categorized as Level2.

PayablesTotal

The fair values of long-term debt are measured by using
discounted present value techniques based on the interest
rates that would be applicable to new similar types ofborrowings with similar terms and remaining maturities, andare categorized as Level2.

The following is a description of valuation methodologies andinputs used for measurement of the fair value of assets andliabilities
Marketable and investment securities
The fair values of listed equity securities and government
bonds are measured at the quoted market prices. Since listed
equity securities and government bonds are traded in active
markets, the fair values of listed equity securities andgovernment bonds are categorized as Level1.

¥(39)
(51)
(6)
9
(3)
(0)

¥(39)
(51)
(6)
9
(3)
(0)

(70)
21
(0)
0
¥(142)

(70)
21
(0)
0
¥(142)Thousands of U.S. Dollars
Contract
Amount Due
Fair
after One Year
Value

Unrealized
Gain (Loss)

Foreign currency forward contracts:
Selling$141
S$$5,358
U.S.$
4,493
1,998
JP ¥
2,412
CNY
37
BuyingJP ¥14,270
U.S.$
6,592
S$
382
EURO€
163
Total
$33,711$2,139

At March 31, 2023

The fair values of foreign currency forward contracts aremeasured by using discounted present value techniques
considering observable inputs such as interest rates andforeign currency exchange rate, and are categorized as
Level2.

18. DERIVATIVESDAIICHI JITSUGYO CO., LTD.

At March 31, 2023

Contract
AmountUnrealized
Gain (Loss)$(148)
(108)
121
0

$(148)
(108)
121
0

(5)
(42)
2
(0)
$(181)

(5)
(42)
2
(0)
$(181)

Derivative Transactions to Which Hedge Accounting is Applied

Derivatives

The Group enters into foreign currency forward contracts tohedge foreign exchange risk associated with certain assets andliabilities denominated in foreign currencies.
		 All derivative transactions are entered into hedge foreign
currency exposures incorporated within the Group’s business.
Accordingly, market risk in these derivatives is basically offset
by opposite movements in the value of hedged assets or
liabilities.
		 Derivative transactions entered into by the Group havebeen made in accordance with internal policies which regulate
their authorization.

Contract
AmountForeign currency forward contracts:
Selling
S$
¥617
U.S.$
473
INR
107
JP ¥
92
CNY
27
EURO€
14
Buying
JP ¥
1,487
U.S.$
561
S$
114
EURO€
1
Total
¥3,496

Long-term debt

Long-term debt

21

At March 31, 2022

Millions of yen
Contract
Amount Due
Fair
after One Year
Value

Derivative Transactions to Which Hedge Accounting Is Not Applied

At March 31, 2023

Contract
AmountForeign currency forward contracts:
Selling
S$
¥715
U.S.$
600
JP ¥
322
CNY
4
Buying
JP ¥
1,905
U.S.$
880
S$
51
EURO€
21
Total
¥4,501

Millions of yen
Contract
Amount Due
Fair
after One Year
Value

¥18
266

¥285

Unrealized
Gain (Loss)¥(19)(14)
16
0¥(19)
(14)
16
0

(0)
(5)
0
(0)
¥(24)

(0)
(5)
0
(0)
¥(24)

HedgedItem

Millions of yen
Contract
Amount Due
Contract
after One Year
AmountForecasted transactions
Foreign currency forward contracts:
Selling
Order Backlog ¥6,736
U.S.$
CNY
˝
3,262
EURO€
˝
1,677
THB
˝
69
UK£
˝
4
BuyingReleased Order 18,267
KRW
EURO€
˝
2,062
U.S.$
˝
2,051
˝
1,623
SW
DKK
˝
1,388
CNY
˝
889
S$
˝
4
Assigned transactions
Foreign currency forward contracts:
Selling
Receivables
2,029
U.S.$
˝
725
CNY
˝
190
EURO€
˝
0
JP ¥
BuyingPayables and other
155
EURO€
˝
125
U.S.$
˝
16
CNY
˝
11
SW
˝
2
DKK
˝
1
THB
Total
¥41,294

Fair
Value

¥314
156
919

¥195
(14)
(47)
(3)
(0)

10,847
9
143
231

(459)
52
2
(21)
38
(17)
0

24
0

¥12,647

Note2
Note2
Note2
Note2
Note2
Note2
Note2
Note2
Note2
Note2
¥(274)At March 31, 2022

HedgedItem

Millions of yen
Contract
Amount Due
Contract
after One Year
AmountForecasted transactions
Foreign currency forward contracts:
Selling
Order Backlog ¥5,985
U.S.$
CNY
˝
867
EURO€
˝
468
UK£
˝
25
JP ¥
˝
21
THB
˝
3
BuyingReleased Order
1,622
U.S.$
EURO€
˝
641
CNY
˝
60
SW₣
˝
19
DKK
˝
4
Assigned transactions
Foreign currency forward contracts:
Selling
Receivables
2,175
U.S.$
˝
737
CNY
˝
143
EURO€
˝
2
S$
˝
2
JP ¥
BuyingPayables and other
391
U.S.$
˝
165
EURO€
˝
23
CNY
Total
¥13,363

At March 31, 2023

HedgedItem¥4¥(537)
(66)
(15)
(0)
0
(0)

170
49

95
34
3
1
0

1
87

Note 2
Note 2
Note 2
Note 2
Note 2¥313

Thousands of U.S. Dollars
Contract
Amount Due
Contract
after One Year
AmountForecasted transactions
Foreign currency forward contracts:
Selling
Order Backlog $50,446
U.S.$
CNY
˝
24,431EURO€˝
12,559
THB
˝
517
UK£
˝
37
BuyingReleased Order 136,802
KRW
EURO€
˝
15,445U.S.$
˝
15,365˝
12,156SW
DKK
10,394
CNY
˝
6,663
S$
˝
31
Assigned transactions
Foreign currency forward contracts:
Selling
Receivables
15,198
U.S.$
˝
5,431
CNY
˝
1,426
EURO€
˝
0
JP ¥
BuyingPayables and other
1,166
EURO€
U.S.$
˝
941
CNY
˝
123
˝
85
SW
DKK
˝
19
THB
˝
10
Total
$309,255

Fair
Value

Note 2
Note 2
Note 2¥(483)

Fair
Value

$2,351
1,173
6,887

$1,463
(106)
(354)
(24)
(1)

81,236
71
1,073
1,734

(3,443)
394
19
(159)
288
(128)
0

180
6

Note2
Note2
Note2
Note2

$94,715

Note2
Note2
Note2
Note2
Note2
Note2
$(2,052)

Notes: 1. The fair value of derivative transactions is measured at thequoted price obtained from the financial institution.
2. Fair value of the foreign currency forward contracts assigned
for receivables and payables is included in the fair value of
receivables and payables disclosed at Note 17. (5) (a).

22

N ot es to C onso lid a te d F in a n c ia l S t a t e me n t s

19. OTHER COMPREHENSIVE INCOME
The components of other comprehensive income for the years ended March 31, 2023 and 2022, were as follows:

Thousands of
U.S. Dollars

Millions of yen

Unrealized gain (loss) on available-for-sale securities:
Gain (loss) arising during the year
Reclassification adjustments to profit or loss
Amount before income tax effect
Income tax effect
Total
Deferred gain (loss) on derivatives under hedge accounting:
Gain (loss) arising during the year
Amount before income tax effect
Income tax effectTotal
Foreign currency translation adjustments:
Adjustments arising during the year
Total
Defined retirement benefit plans(Loss) gain arising during the year
Reclassification adjustments to profit or loss
Amount before income tax
Income tax effectTotal
Total other comprehensive income

2. Method of the stock splitc)	Business Combination through Acquisition

With Saturday, September 30, 2023, as the record date, eachshare of the Company’s common stock held by shareholders
who are listed or recorded in the shareholders registry as of theend of September 30, 2023, will be split at a ratio of 3 for 1.

At the Board of Directors meeting on June 14, 2023, theCompany resolved to acquire all of the shares of Wave
Engineering Corporation (hereinafter “Wave Engineering”) andmake it a subsidiary. The Company concluded a share transfer
agreement on June 30, 2023, and subsequently acquired all
the shares on July 31, 2023.

2023

2022

2023

¥2,309(1,947)
361
(108)
253

¥(326)
(236)
(563)
201
(361)

$17,296(14,586)
2,710
(812)
1,897

3. Number of shares to be increased by the stock split

286
286
(88)
197

(393)
(393)
120
(273)

2,143
2,143
(664)
1,479

Total number of shares authorized after the stock split 96,000,000 shares

540
540

1,193
1,193

4,048
4,048

(37)
(2)
(39)
12
(27)
¥964

0
19
20
(9)
11
¥570

(277)
(20)
(298)
94
(204)
$7,221

Total number of shares issued before the stock split

11,086,400 shares

Number of shares to be increased by the stock split

22,172,800 shares

Total number of shares issued after the stock split

33,259,200 shares

4. Schedule for the stock split
Date of public notice of record date
Record date
Effective date

5. Effect on per-share information
If the stock split had been carried out at the beginning of theprevious fiscal year, the per-share information would be as
follows.
Millions of yen

20. NET INCOME PER SHARE

Year ended March 31, 2023

Basic EPS
Net income available to common shareholders

Millionsof yenThousandsof Shares

Net Income Attributableto Owners of the Parent

WeightedAverage Shares¥6,316

10,671

Effect of dilutive securities
Warrants

Yen

U.S. Dollars
EPS¥591.91¥6,316

10,713¥5,363

Effect of dilutive securities
Warrants

10,704¥589.58$4.42¥501.02$4.09¥498.97$4.0843

Diluted EPS
Net income for computation¥5,363

10,748

21. SUBSEQUENT EVENTSa) Appropriations of retained earnings
The following appropriations of retained earnings at March 31,
2023, were approved at the shareholders’ meeting of theCompany held on June 22, 2023:

DAIICHI JITSUGYO CO., LTD.

Millions of yen

Thousands of
U.S. Dollars¥1,203$9,0142023¥2,004.65 ¥1,823.62$15.01167.01

1.48¥196.53 ¥ 166.32$1.47

197.306. OtherYear ended March 31, 2022

Basic EPS
Net income available to common shareholders

Net assets per share of common
stock
Net income per share of common
stock
Diluted net income per share ofcommon stockThousands of
U.S. Dollars$4.4342

Diluted EPS
Net income for computation

23

2022

2023

A reconciliation of the differences between basic and diluted net income per share (“EPS”) for the years ended March 31, 2023 and2022, is as follows:

Year-end cash dividends, ¥114.00 ($0.85) per share

Friday, September 15, 2023
Saturday, September 30, 2023
(substantially September 29)
Sunday, October 1, 2023b)	Stock Split and Partial Amendment to the Articles
of Incorporation in Connection with Stock Split
At the Board of Directors meeting on May 30, 2023, theCompany resolved to carry out a stock split.

1. Purpose of the stock split
The aim is to reduce the amount per investment unit of theCompany’s shares, thereby further expanding the range ofinvestors and enhancing the liquidity of the Company’s shares.

There will be no changes in the amount of capitalization upon this stock
split.

7. Partial amendment to the Articles of Incorporation inconnection with the stock split(1) Reason for the amendment to the Articles of Incorporation
Following the stock split, the Articles of Incorporation of
the Company will be partially amended, effective from
Sunday, October 1, 2023, in accordance with Article 184,
Paragraph 2 of the Companies Act.
(2) Details of amendment to the Articles of Incorporation
Details of the amendment are as follows.
(Amended parts are underlined.)
Current Articles of Incorporation

After the Amendment(Total number of sharesauthorized to be issued)
Article 5. The total number ofshares authorized to be issued
by the Company shall be
32,000,000 shares.

(Total number of sharesauthorized to be issued)
Article 5. The total number ofshares authorized to be issued
by the Company shall be
96,000,000 shares.

(3) Schedule of amendment to the Articles of Incorporation
Effective Date
Sunday, October 1, 2023

1. Summary of business combination(1) Name and details of business of acquiree
Name:

Wave Engineering Corporation

Details of business:

Design, production, and consultation related tomachinery and parts for a variety of plants, including but
not limited to petrochemical and fertilizer plants(2) Main reason for business combination
As a supplier of industrial machinery for customers inJapan and around the world, the Company is conducting
business in seven fields as a solution provider in tune with
global demands.
Wave Engineering, which is now incorporated into theGroup, specializes in Feasibility Study (FS) and Front End
Engineering Design (FEED). It is involved in the sales ofsoftware from Aspen Technology, Inc., based in the USA,utilizes said software for simulation purposes, and offers
design and consultancy services for oil, petrochemical, andchemical plants, among its other businesses. Moreover,the shift towards carbon neutrality is increasing
opportunities to explore and consider hydrogen andammonia.
The collaborative integration of Wave Engineering
brings together its robust simulation engineering prowesswith the Group’s existing plant engineering functionalities.
This synergy will propel the Company closer to its ambitionof being a next-generation engineering trading firm,delivering one-stop engineering solutions (FS-FEED-EPC)
and fortifying its engineering stature.
Looking ahead, Wave Engineering’s collaborative
endeavors with the Company’s Engineering Division, thegroup company, Daiichi Engineering Co., Ltd., which is
involved in the design, procurement, and construction ofenvironment-related plant facilities, and Tsubame BHB Co.,
Ltd., in which the Company has invested, will be pivotal.
This alliance will seek to contribute to the sustainability of
the global environment, focusing on innovative production
processes and the design of plants dedicated to blue andgreen ammonia synthesis.
In addition to the plant & energy industries, theCompany also envisions Wave Engineering playing asignificant role in the Group’s other businesses, including
the automotive business, healthcare business, and aviation& social infrastructure business.
This share acquisition represents a conduit to harness
mutual synergies and impact the development of a variety
of industries through the creation of new businesses andthe opening up of the carbon-neutral market, leading tofurther growth of the Group and elevation of its corporate
value.

24

N ot es to C onso lid a te d F in a n c ia l S t a t e me n t s(3) Date of business combination
July 31, 2023 (Deemed acquisition date: September 30,
2023)(4) Legal form of business combination
Share acquisition with cash consideration(5) Name of entity after business combination
No change(6) Ratio of voting rights to be acquired
100.0%(7) Main grounds for determining acquirer
Due to the Company’s acquisition of shares with cash
consideration

3. Breakdown and amount of main acquisition-related
costs(3) Information about Sales, Profit (Loss), Assets, Liabilities and Other Items
Millions of yen

Advisory service fees and other charges:¥68 million

2023
Reportable segments

4. Amount, reason, method, and period of amortization
with respect to goodwill incurred
Not determined at this time.

5. Amount and breakdown of main assets acquired andliabilities assumed on the date of businesscombination
Not determined at this time.

Sales to external customers
Intersegment sales ortransfers
Total
Segment profit (loss)
Segment assets

Consideration for acquisition

Other:

Acquisition cost

¥1,120 million

Depreciation¥1,120 million

Other¥17,192 ¥18,509 ¥23,766 ¥48,561 ¥31,459 ¥11,435¥231 ¥153,674

The Group is required to report financial and descriptive
information about its reportable segments. Reportablesegments are operating segments or aggregations ofoperating segments that meet specified criteria. Operating
segments are components of an entity about which separate
financial information is available and for which suchinformation is evaluated regularly by the chief operating
decision-maker in deciding how to allocate resources and inassessing performance. Generally, segment information isrequired to be reported on the same basis as is used internallyfor evaluating operating segment performance and deciding
how to allocate resources to operating segments.

Increase in property, plantand equipment andintangible assets

Energy Solutions Business: Machinery and equipment for
Lithium - ion battery production.
Industrial Machinery Business: Machinery and equipment forplastics, rubber, steel, and food industries.
Electronics Business: Machinery and equipment for theindustries of electronics, IT, electric machinery, precision,
optical, audio, and musical instruments.
Automotive Business: Machinery and equipment for
automotive industries.
Health care Business: Machinery and equipment forpharmaceuticals and medical industries.
Aviation & Social Infrastructure Business: Machinery andequipment for aviation and disaster prevention.

The Group’s reportable segments are those for which separate
financial information is available and regular evaluation by theCompany’s management is being performed in order to decide
how resources are allocated among the Group. As such, theGroup’s reportable segments consist of the Plant & Energy
Business, Industrial Machinery Business, Electronics Business,
Automotive Business, Pharmaceuticals Business, and Aviation
Business.
Plant & Energy Business: Machinery and equipment forenergy development and production, oil and gas refining,chemical, engineering, construction, and pulp and paperindustries.

25

DAIICHI JITSUGYO CO., LTD.

(2) Methods of Measurement for the Amounts ofSales, Profit (Loss), Assets, Liabilities 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”. The profit showing in theGroup`s reportable segments are arranged on the basis ofoperating income.

¥2,518 ¥153,442
2,447

508

532

468

263

601

72

19,041

24,234

48,82432,061

11,507

2,518

155,890231

156,121

855

(68)

642

3,215

909

1,192

(45)

6,701

(93)

6,607

109

6,717

22,933

19,101

19,19536,766

19,44011,352

3,384

132,174374

132,549

19,985

152,535

80

1

41

81

53

95

18

374

102

476

556

1,033

1,290

2,447

¥153,674(2,447)(2,447) 153,674

1,290

1,290

1,290

¥13 ¥318¥120 ¥439¥397 ¥837

Aviation &Plant &
Energy Industrial
Social InfraEnergy Solutions Machinery Electronics Automotive Health care structure
Business Business Business Business Business Business Business Subtotal

Other

Reconciliations Consolidated¥11,881 ¥19,004 ¥19,275 ¥52,098 ¥31,980 ¥11,189¥179 ¥148,075¥9¥26 ¥67 ¥86 ¥115

Millions of yen

2022
Reportable segments

Total

Sales
Sales to external customers
Intersegment sales ortransfers
Total(1) Description of Reportable Segments

Reconciliations Consolidated

17,701

Investment in an equity
method company

22. SEGMENT INFORMATION

Total

Sales

2. Acquisition cost of acquiree and the breakdown by
type of consideration
Cash

Aviation &Plant &
Energy Industrial
Social InfraEnergy Solutions Machinery Electronics Automotive Health care structure
Business Business Business Business Business Business Business Subtotal

Segment profit (loss)
Segment assets

39

607

568

911

460

6

11,921

19,612

19,84353,00932,441

11,195¥2,466 ¥147,895

2,466

2,594

27

2,622

150,489207

150,697¥148,075(2,622)(2,622) 148,075

610

696

646

3,125

1,238

1,161

(79)

7,398

(118)

7,280

(413)

6,866

17,52020,974

16,672

34,905

15,28910,454

2,237

118,055541

118,597

13,637132,235

106

2

29

60

41

137

38

417

86

503

270

774

Other:
Depreciation
Investment in an equity
method company
Increase in property, plantand equipment andintangible assets

1,254

¥5

¥58 ¥64 ¥38 ¥131

1,254

1,254

1,254

¥8 ¥306¥26 ¥333¥387 ¥720

26

Thousands of U.S. Dollars

2023
Reportable segments
Aviation &Plant &
Energy Industrial
Social InfraEnergy Solutions Machinery Electronics Automotive Health care structure
Business Business Business Business Business Business Business Subtotal

Other$128,755 $138,614 $177,985 $363,671 $235,601$1,734 $1,150,859

Total

Reconciliations Consolidated

Sales
Sales to external customers
Intersegment sales ortransfers
Total
Segment profit (loss)
Segment assets$85,638$18,857 $1,149,124
18,32918,329$1,150,859

3,807

3,990

3,508

1,972

4,507

543

132,562

142,604

181,493

365,644

240,108

86,182

18,857

1,167,454

1,734

1,169,189(18,329)

6,407

(510)

4,809

24,082

6,811

8,926

(343)

50,183(698)

49,485822

50,307

171,750

143,051

143,755

275,340

145,587

85,01525,348989,8492,808

992,658

149,671

1,142,329

605

12

311

613

401

717

141

2,803

764

3,568

4,169

7,737

(18,329) 1,150,859

Other:
Depreciation
Investment in an equity
method company

9,666

Increase in property, plantand equipment andintangible assets
$74

9,666

$198 $501 $645$865$98 $2,384

9,666

9,666

$905 $3,290 $2,979 $6,270

Notes: 1) Transfers between segments are made at arm’s-length prices.
2) Segment profit is adjusted to ensure consistency with the operating income set forth in the consolidated statements of income.
3) No impairment loss was recognized in 2023 and 2022.
4) Segment assets`s reconcilations amount for the years ended March 31, 2023 and 2022, were ¥19,985 million ($149,671 thousand) and ¥13,637
million, respectivelly include the amount classified as an entire company`s assets which haven`t allocated to the each segments. The majoramount are the parent comapny`s surplus funds(cash and fixed term deposit) and funds for long term investment(Investment securities) andassets related to management division.

(4) Information about products and services
Information about products and services is omitted as it is presented in the description of reportable segments.

(5) Information about geographical areasa. SalesJapan¥71,306

China¥30,581Asia¥30,121

Millions of yen

2023
Americas¥13,701

Europe¥7,942

Other
¥20

Total
¥153,674

Europe¥4,368

Other
¥27

Total
¥148,075

Europe$59,477

Other
$151

Total
$1,150,859

Millions of yenJapan¥68,962

China¥37,719

Asia¥25,1082022
Americas¥11,888
Thousands of U.S. Dollars

Japan$534,014

China$229,025

Asia$225,580

2023
Americas$102,609

Notes:	Sales are classified by country or region based on the location of customers.

b.Property, plant and equipment
Millions of yen

2023
Japan
¥2,397

Asia
¥467

Other
¥334

Total
¥3,200

Other
¥92

Total
¥3,073

Millions of yen

2022
Japan
¥2,656

Asia¥325

Thousands of U.S. Dollars

2023
Japan
$17,954

27

DAIICHI JITSUGYO CO., LTD.

Asia
$3,504Other$2,506

Total$23,964

28

29

DAIICHI JITSUGYO CO., LTD.

30

31

DAIICHI JITSUGYO CO., LTD.