Note: This is an excerpt translation of the “Yukashoken-Houkokusho” for the convenience of overseas
stakeholders. In cases where any differences occur between the English version and the original Japaneseversion, the Japanese version shall prevail. F-TECH INC. assumes no responsibility for this translation or for
direct, indirect or any other forms of damages arising from the translation.

Consolidated Financial Statements
March 31, 2024

F-TECH INC.
19, Showanuma, Shobu-cho, Kuki City, Saitama, JAPANConsolidated financial statements, etc.
(1) Consolidated financial statementsi)Consolidated balance sheets(Millions of yen)
As of March 31, 2023
AssetsCurrent assets
Cash and deposits
Notes receivable - trade
Accounts receivable - trade
Merchandise and finished goods
Work in process
Raw materials and supplies
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures, net
Machinery, equipment and vehicles, net
Dies and tools, net
Land
Leased assets, net
Construction in progress
Other, net
Total property, plant and equipment
Intangible assets
Software
Other
Total intangible assets
Investments and other assets
Investment securities
Retirement benefit asset
Deferred tax assets
Other
Total investments and other assets
Total non-current assets
Total assets

5,491
628
37,177
5,296
7,632
12,702
3,729(55)
72,603*2

18,88445,363
2,785
6,059
724
13,005
5,461
92,284As of March 31, 2024

*1

*2

248
36
285
*3

-1-

7,464
253
1,963
1,283
10,965103,534
176,137

12,204604
41,3174,423
7,623
13,4383,502(44)83,06921,73550,507
2,646
6,239
371
7,171
5,361
94,033
290
28
319

*3

9,485
269
3,427
1,167
14,350108,702
191,772(Millions of yen)
As of March 31, 2023
Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term loans payable
Current portion of long-term loans payable
Lease obligations
Income taxes payable
Accounts payable - otherNotes payable - facilities
Provision for directors’ bonuses
Other
Total current liabilities
Non-current liabilities
Long-term loans payable
Lease obligations
Deferred tax liabilities
Provision for directors’ retirement benefits
Net defined benefit liability
Negative goodwill
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

*4

*5

-2-

24,16927,832
12,995
1,247
942
1,845
228
85
6,198
75,544As of March 31, 2024

*1
*4

*5

27,902
38,537
12,782
1,029
769
2,214
177
49
8,590
92,05329,908
1,942
2,707
53
1,003
33
187
35,836111,380

22,043
1,671
2,994
56
956
28
226
27,975120,029

6,790
6,733
27,979(60)
41,4436,790
6,404
29,288(79)
42,404

543
386
7,731
(65)
8,595
14,71764,756
176,137

1,154
237
11,93792
13,421
15,916
71,742
191,772

ii)

Consolidated statements of income and comprehensive income(Millions of yen)
Fiscal year ended
March 31, 2023

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
Share of profit of entities accounted for using equity method
Foreign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sales of non-current assets
Gain on bargain purchase
Gain on change in equity
Total extraordinary income
Extraordinary losses
Loss on sales of non-current assets
Loss on retirement of non-current assets
Total extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitProfit (loss) attributable toProfit attributable to owners of parent
Loss attributable to non-controlling interests
Other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controlling interests*1*2*3, *4

261,156
242,414
18,741
16,702
2,038

*1
*2

*3, *4

298,759
276,435
22,323
18,615
3,708

97
59
306
880
343
1,688

149
69
600
1,232
276
2,328

1,758
47
1,806
1,921

2,825
209
3,034
3,001

*5

26
1,237
153
1,416

*5

14
–
157
172

*6

12
24
36
3,300
2,398
(754)
1,643
1,657

*6

3
69
73
3,100
3,139
(1,662)
1,477
1,623

*7

*8

*7

1,734
(77)

1,683
(59)

13
397
3,530
(79)

676
(153)
5,198
143

259

211

4,121
5,778
5,305
472

-3-

Fiscal year ended
March 31, 2024

*8

6,076
7,700
6,509
1,190

iii) Consolidated statements of changes in net assets
Fiscal year ended March 31, 2023
(Millions of yen)
Shareholders’ equity

Balance at beginning of period

Capital stock

Capital surplus

Retained earnings

Treasury shares

Total shareholders’equity

6,790

6,733

26,619(62)

40,081

Changes of items during period
Dividends of surplus

(374)

(374)

Profit attributable to ownersof parent

1,734

1,734

Purchase of treasury shares
Disposal of treasury shares

0

(0)

(0)

1

1

Change in ownershipinterest of parent due totransactions with noncontrolling interests–

Net changes of items otherthan shareholders’ equity
Total changes of items during
periodBalance at end of period

–

0

1,360

1

1,361

6,790

6,733

27,979(60)

41,443

Accumulated other comprehensive income

Balance at beginning of period

Valuationdifference on
available-forsale securities

Deferred
gains orlosses onhedgesForeigncurrencytranslation
adjustment

518

–

4,498

Total
Non-controlling
Remeasurements accumulated
interestsof definedothercomprehensive
benefit plansincome7

5,025

15,472

Total net
assets60,578Changes of items during period
Dividends of surplus(374)

Profit attributable to ownersof parent

1,734

Purchase of treasury shares(0)

Disposal of treasury shares

1

Change in ownershipinterest of parent due totransactions with noncontrolling interests–

Net changes of items otherthan shareholders’ equity

24

386

3,232

(73)

3,570

(754)

2,816

Total changes of items during
period

24

386

3,232

(73)

3,570

(754)

4,178

Balance at end of period

543

386

7,731

(65)

8,595

14,71764,756-4-

Fiscal year ended March 31, 2024
(Millions of yen)
Shareholders’ equity

Balance at beginning of period

Capital stock

Capital surplus

Retained earnings

Treasury shares

Total shareholders’equity

6,790

6,733

27,979(60)

41,443

Changes of items during period
Dividends of surplus

(374)

(374)

Profit attributable to ownersof parent

1,683

1,683

Purchase of treasury shares

(18)

(18)

Disposal of treasury shares–

Change in ownershipinterest of parent due totransactions with noncontrolling interests

(329)

(329)

Net changes of items otherthan shareholders’ equity
Total changes of items during
periodBalance at end of period

–

(329)

1,309

(18)

960

6,790

6,404

29,288(79)

42,404

Accumulated other comprehensive income

Balance at beginning of period

Valuationdifference on
available-forsale securities

Deferred
gains orlosses onhedgesForeigncurrencytranslation
adjustment

543

386

7,731

Total
Non-controlling
Remeasurements accumulated
interestsof definedothercomprehensive
benefit plansincome(65)

8,595

14,717

Total net
assets64,756

Changes of items during period
Dividends of surplus(374)

Profit attributable to ownersof parent

1,683

Purchase of treasury shares(18)

Disposal of treasury shares–

Change in ownershipinterest of parent due totransactions with noncontrolling interests(329)

Net changes of items otherthan shareholders’ equity

611

(149)

4,205

158

4,826

1,198

6,025

Total changes of items during
period

611

(149)

4,205

158

4,826

1,198

6,985

1,154

237

11,93792

13,421

15,916

71,742

Balance at end of period

-5-

iv)

Consolidated statements of cash flows(Millions of yen)
Fiscal year ended
March 31, 2023

Cash flows from operating activities
Profit before income taxes
Depreciation
Loss (gain) on change in equity
Gain on bargain purchaseAmortization of goodwill
Increase (decrease) in assets and liabilities related toretirement benefits
Increase (decrease) in provision for directors’
retirement benefits
Increase (decrease) in provision for directors’
bonusesInterest and dividend income
Interest expenses
Foreign exchange losses (gains)Share of loss (profit) of entities accounted for using
equity method
Loss (gain) on sales of property, plant and equipment
Loss on retirement of property, plant and equipment
Decrease (increase) in notes and accounts receivable- tradeDecrease (increase) in inventories
Increase (decrease) in notes and accounts payable trade
Increase (decrease) in contract liabilities
Decrease (increase) in accounts receivable - other
Other, net
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Purchase of shares of subsidiaries resulting in change
in scope of consolidation
Other, net
Net cash provided by (used in) investing activities

*2

-6-

Fiscal year ended
March 31, 2024

3,300
13,112(153)(1,237)(5)

3,100
14,559
(157)
–
(5)

(255)

81

2

3

40

(36)

(157)
1,758
(752)

(219)
2,825
(854)

(306)

(600)

(13)
24

(11)
69

885

(827)

5,253

2,440

(278)

1,926

603
282
(902)
21,201190(1,730)(2,227)
17,433

701
211
1,759
24,966256(2,816)(2,940)19,466(15,651)
33
(37)
(47)

(8,809)
70
(57)
(164)

(632)

–

(6)
(16,342)57(8,902)

(Millions of yen)
Fiscal year ended
March 31, 2023
Cash flows from financing activities
Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable
Repayments of long-term loans payable
Purchase of treasury shares
Cash dividends paid
Dividends paid to non-controlling interests
Repayments of lease obligations
Proceeds from sales of treasury shares
Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

*1

-7-

Fiscal year ended
March 31, 2024

(11,830)
26,721(11,465)
(0)
(373)
(685)
(821)
1
794
2,340

7,616
3,400
(13,562)
(18)
(373)
(306)
(1,017)––(4,263)

79

413

3,510
1,981
5,491

6,712
5,491
12,204*1

Notes to consolidated financial statements
Basis of presentation and significant accounting policies for preparation of consolidated financial
statements
1. Basis of presentation of consolidated financial statements
The accompanying consolidated financial statements have been prepared in accordance with the provisions set
forth in the Japanese Financial Instruments and Exchange Act and its related accounting regulations, and inaccordance with accounting principles generally accepted in Japan (“Japanese GAAP”), which are different incertain respects as to the application and disclosure requirements of International Financial ReportingStandards (“IFRS”).
As permitted by the Japanese Financial Instruments and Exchange Act, amounts less than one million yen havebeen omitted. As a result, the totals shown in accompanying financial statements do not necessarily agree withthe sum of the individual amounts.
2.

Disclosure of scope of consolidation(1) Number of consolidated subsidiaries: 18
Fukuda Engineering Co., Ltd.
Kyushu F.tech Inc.
Reterra Inc.
F&P Mfg., Inc.
F&P America Mfg., Inc.
F.tech R&D North America Inc.
F-TECH NORTH AMERICA INC.
F&P MFG. DE MEXICO S.A. DE C.V.
F.E.G. DE QUERETARO, S.A. DE C.V.
F.tech Zhongshan Inc.
F.tech Wuhan Inc.
F.tech R&D (Guangzhou) Inc.
Yantai Fuyan Mould Co., Ltd.
F.tech Philippines Mfg., Inc.
F.tech R&D Philippines Inc.
F.tech Mfg. (Thailand) Ltd.
PT. F.tech INDONESIA
India Steel Summit Private Limited
F-TECH NORTH AMERICA INC. was included in the scope of consolidation from the fiscal year
ended March 31, 2024 because it was established and became a Company’s consolidated
subsidiary.
(2) Number of non-consolidated subsidiaries: Two
Laguna Greenland Corp.
F.tech Automotive Components Private Limited
Reason for exclusion from scope of consolidation
The non-consolidated subsidiaries are small in scale and the amounts of their total assets, net sales,
profit (loss) (for the Company’s equity interest), retained earnings (for the Company’s equity
interest) and other financial statement items do not have a significant impact on the Company’s
consolidated financial statements.

-8-

3.

Disclosure about application of equity method(1) Non-consolidated subsidiaries accounted for using the equity method
Not applicable.
(2) Number of associates accounted for using the equity method: Five
Johnan Manufacturing Inc.
JOHNAN AMERICA, Inc.
JOHNAN F.TECH (THAILAND) LTD.
JOHNAN DE MEXICO, S.A. DE C.V.
VEEGEE Auto Components Private Limited(3) Number of non-consolidated subsidiaries not accounted for using the equity method: Two
Laguna Greenland Corp.
F.tech Automotive Components Private Limited
Number of associates not accounted for using the equity method: Five
Progressive Tools & Components Pvt Ltd.
PT. JFD INDONESIA
JOHNAN WUHAN INC.
Johnan Kyushu Manufacturing Inc.
Johnan Foshan Inc.
Reason for exclusion from scope of equity method
The non-consolidated subsidiaries and associates that are not accounted for using the equity method
are excluded from the application of the equity method since such exclusion has no significant
impact on the Company’s consolidated financial statements in terms of profit (loss) (for theCompany’s equity interest), retained earnings (for the Company’s equity interest) and otherfinancial statement items, and overall they are of minor significance.
(4) The fiscal year ends of certain companies accounted for using the equity method are different from theconsolidated fiscal year end. In preparing the consolidated financial statements, the Company uses thefinancial statements of these companies as of their fiscal year end.

4.

Disclosure about fiscal years, etc. of consolidated subsidiaries
Among the consolidated subsidiaries, the fiscal year end of F.tech Philippines Mfg., Inc. and F.tech R&D
Philippines Inc. is January 31 and the fiscal year end of F&P MFG. DE MEXICO S.A. DE C.V., F.E.G. DE
QUERETARO, S.A. DE C.V., F.tech Zhongshan Inc., F.tech Wuhan Inc., F.tech R&D (Guangzhou) Inc.,
Yantai Fuyan Mould Co., Ltd. and PT. F.tech INDONESIA is December 31.
In the preparation of the consolidated financial statements, the financial statements as of the fiscal year endsof the respective subsidiaries are used. However, for major transactions that occurred between these fiscal
year ends and the consolidated fiscal year end, necessary adjustments are made in the consolidated financial
statements.

-9-

5.

Disclosure of accounting policies(1) Accounting policy for measuring significant assetsi)Securities
Available-for-sale securities (other securities)
Securities other than shares, etc. that do not have a market priceStated at fair value based on market prices on the closing date of the accounting period.
(Valuation difference is stated as a component of net assets in the consolidated balance sheets,the cost of securities sold is calculated applying the moving-average method.)
Shares, etc. that do not have a market priceStated at cost determined by the moving-average method.
ii) Derivatives
Stated at fair value.
iii) Inventories
Inventories of the Company and its domestic consolidated subsidiaries are stated at cost determinedby the average cost method (balance sheet amounts are determined based on the method of writing
down book value in accordance with decreased profitability). Inventories of foreign consolidated
subsidiaries are stated at the lower of cost or market, determined by the first-in, first-out method.
(2) Accounting policy for depreciation of significant assetsi)
Property, plant and equipment (excluding leased assets)
Depreciated by the straight-line method.
ii) Intangible assets (excluding leased assets)
Amortized by the straight-line method.
Software (for internal use) is amortized by the straight-line method over the usable period in the
Company (five years).
iii) Leased assets
Leased assets relating to finance lease transactions that do not transfer ownership are depreciated by
the straight-line method assuming the lease periods as useful lives without residual value.
Right-of-use assets are depreciated by the straight-line method over the shorter of the useful life of theasset or lease term.
(3) Accounting policy for significant provisionsi)
Allowance for doubtful accounts
To prepare for losses from bad debts, an estimated uncollectible amount is provided either by making
an estimation using the historical rate of credit loss in the case of general receivables, or based on
individual consideration of collectability in the case of specific receivables such as highly doubtfulreceivables.
ii) Provision for directors’ retirement benefits
At some consolidated subsidiaries, to prepare for the payment of directors’ retirement benefits, theamount to be paid at the fiscal year end, based on the internal rules for directors’ retirement benefits,is provided.
iii) Provision for directors’ bonuses
To prepare for the payment of directors’ bonuses, the amount expected to be paid at the current fiscal
year end is provided.
(4) Accounting method of retirement benefitsi)Methods of attributing estimated retirement benefits to accounting periods
When calculating retirement benefit obligations, the benefit formula method is used to attribute
estimated benefit amounts to periods of service until the fiscal year end.
- 10 -

ii)

Amortization of actuarial gains and losses
Actuarial gains and losses are amortized beginning in the following fiscal years by the straight-line
method over a period which is equal to or less than the average remaining service period of employees(mainly five years) at the time of occurrence. At certain consolidated subsidiaries, actuarial gains andlosses are amortized at the time of occurrence.
iii) Application of simplified method for small businesses
In calculating net defined benefit liability, certain consolidated subsidiaries apply the simplified
method in which the net defined benefit liability and retirement benefit costs are deemed to be theamount of retirement benefits to be paid in cases where all eligible employees retired on a voluntarybasis at the fiscal year-end date.
(5) Accounting policy for significant revenues and expenses
The details of the main performance obligations in the major businesses related to revenue from contracts
with customers of the Company and its consolidated subsidiaries (the “Group”) and the timing at which
the Group typically satisfies these performance obligations (when it typically recognizes revenue) are as
follows:i)
Sale of finished goods
The Group mainly engages in the manufacture and sale of auto parts, dies and facilities. The Group’s
main performance obligations are the sale of finished goods to customers.
In the domestic transactions of finished goods, the Group recognizes revenue at the time when afinished good is delivered to a customer as the Group satisfies a performance obligation by transferring
control of the good to the customer. In export transactions, the Group recognizes revenue at the time
when the Group deems that it satisfies a performance obligation by transferring the risks borne andcontrol of a finished good to a customer based on the terms and conditions of trade set forth in acontract with the customer. The Group receives consideration for transactions generally within threemonths after satisfying performance obligations, and the Group’s contracts with customers do notcontain a significant financing component.
ii) Provision of other offerings
The Group provides technical support services related to the manufacture of auto parts.
The Group recognizes revenue from the provision of technical support services over the time theservices are rendered because they are routine or recurring services in which the receipt andsimultaneous consumption by a customer of the benefits of the Group’s performance of obligations in
a contract with the customer can be readily identified. The Group receives consideration fortransactions related to the provision of technical support services generally in stages by measuring its
progress toward complete satisfaction of that performance obligation based on contract terms.
In buy-sell transactions with repurchase obligation, the Group recognizes ending inventory of supplied
articles remaining at fee-paying suppliers as work in process, and recognizes consideration received
from the fee-paying suppliers as financial liabilities.
(6) Translation basis of significant assets and liabilities denominated in foreign currencies
Receivables and payables denominated in foreign currencies are translated into Japanese yen at the spot
exchange rates prevailing at the consolidated fiscal year end, and the translation adjustment is recognizedin the consolidated statements of income. Assets and liabilities of foreign consolidated subsidiaries aretranslated into Japanese yen at the spot exchange rates as of the fiscal year end, and revenues and expenses
of foreign consolidated subsidiaries are translated into Japanese yen at the average exchange rates.
Translation adjustments are included in foreign currency translation adjustment and non-controllinginterests in net assets in the consolidated balance sheets.
(7) Accounting policy for goodwill
All goodwill and the portion of negative goodwill that was recognized on or before March 31, 2010, havebeen amortized by the straight-line method over periods not exceeding 20 years based on the estimated- 11 -

period during which their effect will be recognized for each investment.
(8) Significant hedge accounting methodi)
Hedge accounting method
Deferred hedge accounting is applied to interest rate swaps in principle.
ii) Hedging instruments and hedged items
Hedging instruments: Interest rate swaps
Hedged items:
Interest on loans payableiii) Hedging policy
Loans payable with floating interest rates are converted into those with fixed interest rates to hedge
the risk of fluctuations in interest rates.
iv) Method of assessing hedge effectiveness
The Company semi-annually compares the cumulative cash flow fluctuations or market fluctuationsof the hedged items, and the cumulative cash flow fluctuations or market fluctuations of hedging
instruments, and assesses hedge effectiveness based on these fluctuations and others.
Hedging relationships to which the Company applies the “Treatment of Hedge Accounting for
Financial Instruments that Reference LIBOR”
Of the above-mentioned hedging relationships, the Company applies the special treatment prescribedin the “Treatment of Hedge Accounting for Financial Instruments that Reference LIBOR” (ASBJ
Practical Solution No. 40, March 17, 2022) to all the hedging relationships subject to the applicationof the Practical Solution. The details of the hedging relationships to which the Company applies thePractical Solution are as presented in “Significant hedge accounting method” above.
(9) Scope of cash and cash equivalents in consolidated statements of cash flows
Cash and cash equivalents consist of cash on hand, demand deposits, and short-term investments that arereadily convertible to known amounts of cash and subject to insignificant risk of change in value and due
within three months from the date of acquisition.

- 12 -

Significant accounting estimates
The Company calculates reasonable monetary amounts for significant accounting estimates based on theinformation available at the time of preparing the consolidated financial statements. Of the amounts reported
as accounting estimates in the consolidated financial statements for the current fiscal year, the following
items have the risk of having a significant impact on the consolidated financial statements for the following
fiscal year:
Fiscal year ended March 31, 2023
1.

Impairment test of non-current assets at F&P America Mfg., Inc.’s Ohio factory and Georgia factory(1) Amount recorded in the consolidated financial statements for the current fiscal year
Given that the Ohio factory and Georgia factory of F&P America Mfg., Inc. (“F&P America”), theCompany’s consolidated subsidiary in the North America segment, posted operating losses for thereasons of production cuts of major customers resulting from a shortage of semiconductors, as well as
soaring raw material, labor and other costs, the Company identified an indication of impairment. As aresult of examining whether to recognize an impairment loss of non-current assets at F&P America’s
Ohio factory and Georgia factory, the total estimated undiscounted cash flows from their respective asset
groups were expected to fall below the carrying amount of the asset groups; however, the fair value ofthe asset groups calculated with the help of an external expert exceeded the carrying amount of 21,896
million yen. The Company, therefore, did not recognize an impairment loss.
(2) Other information that helps users of the consolidated financial statements better understand the detailsof the accounting estimates
In principle, the Group’s business assets are grouped by the categories for management accounting.
F&P America applies US GAAP and non-current assets are grouped by factory as the smallest cashgenerating unit. If an indication of impairment is identified in an asset group, and the total estimatedundiscounted cash flows from the asset group are expected to fall below the carrying amount of the asset
group and the fair value of the asset group is expected to be lower than its carrying amount, the difference
between the fair value and carrying amount is recognized as an impairment loss.
As an indication of impairment was identified at F&P America’s Ohio factory and Georgia factory, theCompany compared the asset groups’ fair value to their carrying amount since the total estimatedundiscounted cash flows from the asset groups are expected to fall below their carrying amount. The
market approach is mainly used in calculating the fair value of the assets. If the fair value fluctuates, it
may significantly affect the determination of whether to recognize an impairment loss and the amountthereof.

2.

Impairment test of non-current assets at F.tech Philippines Mfg., Inc.
(1) Amount recorded in the consolidated financial statements for the current fiscal year
Given that F.tech Philippines Mfg., Inc. (“FPMI”), the Company’s consolidated subsidiary in the Asia
segment, posted operating losses for the reasons of production cuts of major customers resulting from ashortage of semiconductors, as well as soaring transportation and other costs, the Company identified
an indication of impairment. Accordingly, after examining whether to recognize an impairment loss, animpairment loss was not recognized since the present value of future cash flows expected to be derived
from the cash-generating unit (“value in use”) exceeded the carrying amount of non-current assets, etc.
(1,650 million yen).
(2) Other information that helps users of the consolidated financial statements better understand thedetails of the accounting estimates
In principle, the Group’s business assets are grouped by the categories for management accounting.
FPMI applies IFRS and deems its factory as a whole as the smallest cash-generating unit. If an
indication of impairment is identified and the cash-generating unit’s recoverable amount is expected tofall below its carrying amount, the difference between the two is recognized as an impairment loss.
- 13 -

As an indication of impairment was identified at FPMI, the Company compared the cash-generating
unit’s recoverable amount to its carrying amount. The recoverable amount is based on the value in use,which is estimated as the present value of future cash flows expected to be derived from the cashgenerating unit, calculated by applying a pre-tax discount rate to estimated cash flows based on
earnings forecasts and business plans approved by the board of directors. The management’s judgment
concerning these may have a significant impact on estimated future cash flows.
3.

Recoverability of deferred tax assets at F-TECH INC.
(1) Amount recorded in the consolidated financial statements for the current fiscal year
The balance of deferred tax assets recorded in the consolidated balance sheet for the fiscal year is 1,963
million yen, which includes deferred tax assets of 26 million yen recorded at the Company.
The amount of the deferred tax assets before being offset by deferred tax liabilities was 242 million
yen. A valuation allowance of 3,438 million yen was deducted from deferred tax assets totaling 3,681
million yen for deductible temporary differences and tax loss carried forward.
(2) Other information that helps users of the consolidated financial statements better understand thedetails of the accounting estimates
Deferred tax assets are recognized for all deductible temporary differences and tax loss carried forward
to the extent that taxable profit will be available against which the deductible temporary differences canbe utilized. In determining the recoverability of deferred tax assets, the amount of deferred tax assets tobe recorded is calculated according to the company classification specified in “Implementation
Guidance on Recoverability of Deferred Tax Assets” (ASBJ Guidance No. 26).
Future taxable income to be used in determining the recoverability of deferred tax assets is estimatedbased on the Company’s earnings forecasts drawn up by the management. This estimate that reflects
external factors, including the business environment, contains the Company’s expected future volume
of sales to its main customers and the downward risk of the earnings forecasts. The management’s
judgment concerning these may have a significant impact on the recoverability of deferred tax assets.

Fiscal year ended March 31, 2024
1.

Impairment test of non-current assets at F&P America Mfg., Inc.’s Ohio factory and Georgia factory(1) Amount recorded in the consolidated financial statements for the current fiscal year
Given that the Ohio factory and Georgia factory of F&P America, the Company’s consolidated subsidiaryin the North America segment, posted operating losses for the reasons of rising labor costs amid the tightlabor market and losses incurred during the launch of new models, despite profits secured throughinitiatives to pass on higher costs to product prices after selling price negotiations, the Company identified
an indication of impairment. As a result of examining whether to recognize an impairment loss of noncurrent assets at F&P America’s Ohio factory and Georgia factory, the total estimated undiscounted cash
flows from their respective asset groups were expected to fall below the carrying amount of the asset
groups; however, the fair value of the asset groups calculated with the help of an external expert exceeded
the carrying amount of 24,203 million yen. The Company, therefore, did not recognize an impairment
loss.
(2) Other information that helps users of the consolidated financial statements better understand the detailsof the accounting estimates
In principle, the Group’s business assets are grouped by the categories for management accounting.
F&P America applies US GAAP and non-current assets are grouped by factory as the smallest cashgenerating unit. If an indication of impairment is identified in an asset group, and the total estimatedundiscounted cash flows from the respective asset group are expected to fall below the carrying amountof the respective asset group and the fair value of the asset group is expected to be lower than its carrying
amount, the difference between the fair value and carrying amount is recognized as an impairment loss.

- 14 -

As an indication of impairment was identified at F&P America’s Ohio factory and Georgia factory, theCompany compared the respective asset group’s fair value to their carrying amount since the total
estimated undiscounted cash flows from the respective asset group are expected to fall below theircarrying amount. The market approach is mainly used in calculating the fair value of the assets. If the fairvalue fluctuates, it may significantly affect the determination of whether to recognize an impairment loss
and the amount thereof.
2.

Impairment test of non-current assets at F.tech Philippines Mfg., Inc.
(1) Amount recorded in the consolidated financial statements for the current fiscal year
Given that FPMI, the Company’s consolidated subsidiary in the Asia segment, continued to show
sluggish operating results for the main reasons of lower sales resulting from a shortage ofsemiconductors as well as soaring prices, the Company identified an indication of impairment.
Accordingly, after examining whether to recognize an impairment loss, an impairment loss was notrecognized since the present value of future cash flows expected to be derived from the cash-generating
unit (“value in use”) exceeded the carrying amount of non-current assets (805 million yen).
(2) Other information that helps users of the consolidated financial statements better understand thedetails of the accounting estimates
In principle, the Group’s business assets are grouped by the categories for management accounting.
FPMI applies IFRS and deems its factory as a whole as the smallest cash-generating unit. If an
indication of impairment is identified and the cash-generating unit’s recoverable amount is expected tofall below its carrying amount, the difference between the two is recognized as an impairment loss.
As an indication of impairment was identified at FPMI, the Company compared the cash-generating
unit’s recoverable amount to its carrying amount. The recoverable amount is based on the value in use,which is estimated as the present value of future cash flows expected to be derived from the cashgenerating unit, calculated by applying a discount rate to estimated cash flows based on earnings
forecasts and business plans approved by the board of directors. The management’s judgment
concerning these may have a significant impact on estimated future cash flows.

3.

Recoverability of deferred tax assets at F-TECH INC.
(1) Amount recorded in the consolidated financial statements for the current fiscal year
The balance of deferred tax assets recorded in the consolidated balance sheet for the fiscal year is 3,427
million yen.
The amount of the deferred tax assets before being offset by deferred tax liabilities at the Company was
463 million yen. A valuation allowance of 3,070 million yen was deducted from deferred tax assets
totaling 3,533 million yen for deductible temporary differences.
(2) Other information that helps users of the consolidated financial statements better understand thedetails of the accounting estimates
Deferred tax assets are recognized for all deductible temporary differences and tax loss carried forward
to the extent that taxable profit will be available against which the deductible temporary differences canbe utilized. In determining the recoverability of deferred tax assets, the amount of deferred tax assets tobe recorded is calculated according to the company classification specified in “Implementation
Guidance on Recoverability of Deferred Tax Assets” (ASBJ Guidance No. 26).
Future taxable income to be used in determining the recoverability of deferred tax assets is estimatedbased on the Company’s earnings forecasts drawn up by the management. This estimate that reflects
external factors, including the business environment, contains the Company’s expected future volume
of sales to its main customers and the downward risk of the earnings forecasts. The management’s
judgment concerning these may have a significant impact on the recoverability of deferred tax assets.

- 15 -

New accounting standards to be applied
“Accounting Standard for Current Income Taxes” (ASBJ Statement No. 27, issued by the
Accounting Standards Board of Japan on October 28, 2022)“Accounting Standard for Presentation of Comprehensive Income” (ASBJ Statement No. 25, issued
by the Accounting Standards Board of Japan on October 28, 2022)
“Guidance on Accounting Standard for Tax Effect Accounting” (ASBJ Guidance No. 28, issued by
the Accounting Standards Board of Japan on October 28, 2022)(1) Overview
The ASBJ issued ASBJ Statement No. 28, Partial Amendments to Accounting Standard for Tax EffectAccounting, etc. (hereinafter, “ASBJ Statement No. 28, etc.”) in February 2018. The Japanese Instituteof Certified Public Accountants completed transferring its practical guidelines on tax effect accounting
to the ASBJ. In the course of deliberations on the transfer, it was decided that the following two issues
would be considered again after the release of ASBJ Statement No. 28, etc., and they were
subsequently deliberated and issued.
Classification of tax expenses (taxation on other comprehensive income)Tax effect on the sales of shares of subsidiaries (shares of subsidiaries or associates) when thegroup tax sharing system is applied(2) Scheduled date of application
The accounting standards and guidance will be applied at the beginning of the fiscal year ending March
31, 2025.
(3) Effects of application of the accounting standards and guidance
The impact of the application of the “Accounting Standard for Current Income Taxes,” etc. on the
consolidated financial statements is currently under evaluation.
Changes in presentation
Consolidated statements of cash flows
Since the amount of “Increase (decrease) in contract liabilities” included in “Other, net” presented under“Cash flows from operating activities” in the previous fiscal year became material in terms of amount, it has
been separately presented from the current fiscal year. To reflect this change in presentation, the Company
has made certain reclassifications to its consolidated financial statements for the previous fiscal year.
As a result, the amount of “Other, net” of (298) million yen, which was presented under “Cash flows fromoperating activities” in the consolidated statements of cash flows for the previous fiscal year, has been
reclassified into the amount of “Increase (decrease) in contract liabilities” of 603 million yen and the amountof “Other, net” of (902) million yen.

- 16 -

Notes to consolidated balance sheets*1. Notes matured on the last day of the period were settled on the clearance date.
Since the last day of the current period was a bank holiday, the following notes matured on the last dayof the period are included in the ending balance.
(Millions of yen)
As of March 31, 2023

As of March 31, 2024

Notes receivable - trade–3

Notes payable - trade–

157

Notes payable - facilities–

4*2. Accumulated depreciation of property, plant and equipment is as follows:(Millions of yen)
As of March 31, 2023

As of March 31, 2024

158,961

182,724*3. Investment securities relating to non-consolidated subsidiaries and associates are as follows:(Millions of yen)
As of March 31, 2023

As of March 31, 2024

5,639

6,661

Investment securities (stocks)*4. The Group has entered into overdraft agreements and loan commitment agreements with 17 banks toefficiently raise working capital.
Balance of unexecuted borrowings at end of period under overdraft agreements and loan commitment
agreements is as follows:(Millions of yen)
As of March 31, 2023

As of March 31, 2024

Total amount of overdraft facility limit and loan
commitment

64,29971,899Balance of borrowings outstanding

27,832

38,53736,46733,362Unexecuted balance*5. The amount of contract liabilities of “Other” is as follows:(Millions of yen)
As of March 31, 2023

As of March 31, 2024

888

1,696

Contract liabilities- 17 -

Notes to consolidated statements of income and comprehensive income*1. Revenue from contracts with customers
The Company does not disaggregate revenue from contracts with customers and other sources ofrevenue. The amount of revenue from contracts with customers is presented in “Notes to consolidated
financial statements, Segment information, etc., Segment information, 3. Information on net sales,
profit (loss), assets, liabilities, other items, and disaggregation of revenue, for each reportable segment”
in the consolidated financial statements.
*2. The ending balance of inventories represents the amount after write-down of the book value in accordancewith the decline in profitability and the following loss (reversal) on valuation of inventories is included
in cost of sales.
(Millions of yen)
Fiscal year ended
March 31, 2023

Fiscal year ended
March 31, 2024

107

436

*3. The major items of selling, general and administrative expenses are as follows:(Millions of yen)
Fiscal year ended
March 31, 2023

Fiscal year ended
March 31, 2024

Haulage expenses

2,469

2,454

Salaries, allowance and bonuses

5,029

5,292

Retirement benefit costs

102

155

Provision for directors’ bonuses

86

45

Provision for directors’ retirement benefits

7

3

2,241

2,668

41

15

Research and development expenses
Provision of allowance for doubtful accounts*4. The total research and development expenses included in general and administrative expenses are as
follows:(Millions of yen)
Fiscal year ended
March 31, 2023

Fiscal year ended
March 31, 2024

2,241

2,668

*5. The breakdown of gain on sales of non-current assets is as follows:(Millions of yen)
Fiscal year ended
March 31, 2023

Fiscal year ended
March 31, 2024

Machinery, equipment and vehicles

24

10

Other

1

4

26

14

Total

- 18 -

*6. The breakdown of loss on sales of non-current assets is as follows:(Millions of yen)
Fiscal year ended
March 31, 2023

Fiscal year ended
March 31, 2024

Machinery, equipment and vehicles

11

3

Other

0

0

12

3

Total

*7. The breakdown of loss on retirement of non-current assets is as follows:(Millions of yen)
Fiscal year ended
March 31, 2023

Fiscal year ended
March 31, 2024

Buildings and structures02

Machinery, equipment and vehicles

18

35

Other

4

31

24

69

Total

- 19 -

*8. Reclassification adjustments and tax effects relating to other comprehensive income are as follows:(Millions of yen)
Fiscal year ended
March 31, 2023

Fiscal year ended
March 31, 2024

Valuation difference on available-for-sale securities
Increase (decrease) during the period

12

958

Reclassification adjustments––

Pre-adjustment of tax effect

12

958

Tax effect amount

0

(282)

Valuation difference on available-for-sale securities

13

676

583

(134)

–

–

Pre-adjustment of tax effect

583

(134)

Tax effect amount

(186)

(18)

Deferred gains or losses on hedges

397

(153)

3,530

5,198

3,530

5,198

Increase (decrease) during the period

(77)

140

Reclassification adjustments

(1)

13

(79)

154

–

(10)

(79)

143

259

211

259

211

4,121

6,076

Deferred gains or losses on hedges
Increase (decrease) during the period
Reclassification adjustments

Foreign currency translation adjustment
Increase (decrease) during the period
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax

Pre-adjustment of tax effectTax effect amountRemeasurements of defined benefit plans, net of tax
Share of other comprehensive income of entities
accounted for using equity method
Increase (decrease) during the period
Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income- 20 -

Notes to consolidated statements of changes in net assets
Fiscal year ended March 31, 2023
1. Class and total number of issued shares and class and number of treasury shares(Thousands of shares)
Number of shares asof beginning of
periodNumber of shares
increased during
periodNumber of shares
decreased during
periodNumber of shares asof end of period

Common shares

18,712––

18,712

Total

18,712––

18,712

Common shares

125

0

3

121

Total

125

0

3

121

Issued shares

Treasury shares

Summary of reasons for change:
An increase of 50 shares due to the purchase of shares less than one unit
A decrease of 3,600 shares for providing stock-based compensation to a retired officer

2.

Dividends(1) Cash dividends paid

Resolution

Class of shares

Total cash
dividend(Millions of yen)

Source ofdividends

Dividend pershare (Yen)Record date

Effective date

Annual General
Meeting of
Shareholders heldon June 23, 2022

Common shares

187

Retained earnings

10

March 31, 2022

June 24, 2022

Meeting of theBoard of Directors
held on November
4, 2022

Common shares

187

Retained earnings

10

September 30,
2022

December 1, 2022

Notes:
1.
The total cash dividend paid based on the resolution at the Annual General Meeting of Shareholders held on June 23,
2022 includes dividends of 910,000 yen paid for the Company’s shares held by Custody Bank of Japan, Ltd. as trust
property of performance-linked stock compensation for the Company’s officers.
2.
The total cash dividend paid based on the resolution at the meeting of the Board of Directors held on November 4, 2022
includes dividends of 870,000 yen paid for the Company’s shares held by Custody Bank of Japan, Ltd. as trust propertyof performance-linked stock compensation for the Company’s officers.

(2) Dividends whose record dates are in the current fiscal year but whose effective dates fall in the next
fiscal year
Resolution

Class of shares

Total cash
dividend(Millions of yen)

Annual General
Meeting of
Shareholders heldon June 22, 2023

Common shares

187

Source ofdividends

Retained earnings

Dividend pershare (Yen)10

Record date

Effective date

March 31, 2023

June 23, 2023

Note: The total cash dividend paid based on the resolution at the Annual General Meeting of Shareholders held on June 22,2023 includes dividends of 870,000 yen paid for the Company’s shares held by Custody Bank of Japan, Ltd. as trust
property of performance-linked stock compensation for the Company’s officers.

- 21 -

Fiscal year ended March 31, 2024
1. Class and total number of issued shares and class and number of treasury shares(Thousands of shares)
Number of shares asof beginning of
periodNumber of shares
increased during
periodNumber of shares
decreased during
periodNumber of shares asof end of period

Common shares

18,712––

18,712

Total

18,712––

18,712

Common shares

121

22

–

144

Total

121

22

–

144

Issued shares

Treasury shares

Summary of reason for change:
Purchase of treasury shares of 22 thousand shares for providing stock-based compensation to officers

2.

Dividends(1) Cash dividends paid

Resolution

Class of shares

Total cash
dividend(Millions of yen)

Source ofdividends

Dividend pershare (Yen)Record date

Effective date

Annual General
Meeting of
Shareholders heldon June 22, 2023

Common shares

187

Retained earnings

10

March 31, 2023

June 23, 2023

Meeting of theBoard of Directors
held on November
7, 2023

Common shares

187

Retained earnings

10

September 30,
2023

December 1, 2023

Notes:
1.
The total cash dividend paid based on the resolution at the Annual General Meeting of Shareholders held on June 22,2023 includes dividends of 870,000 yen paid for the Company’s shares held by Custody Bank of Japan, Ltd. as trust
property of performance-linked stock compensation for the Company’s officers.
2.
The total cash dividend paid based on the resolution at the meeting of the Board of Directors held on November 7, 2023
includes dividends of 1,100,000 yen paid for the Company’s shares held by Custody Bank of Japan, Ltd. as trust propertyof performance-linked stock compensation for the Company’s officers.

(2) Dividends whose record dates are in the current fiscal year but whose effective dates fall in the next
fiscal year
Resolution

Class of shares

Total cash
dividend(Millions of yen)

Annual General
Meeting of
Shareholders heldon June 20, 2024

Common shares

187

Source ofdividends

Retained earnings

Dividend pershare (Yen)10

Record date

Effective date

March 31, 2024

June 21, 2024

Note: The total cash dividend paid based on the resolution at the Annual General Meeting of Shareholders held on June 20,2024 includes dividends of 1,100,000 yen paid for the Company’s shares held by Custody Bank of Japan, Ltd. as trust propertyof performance-linked stock compensation for the Company’s officers.

- 22 -

Notes to consolidated statements of cash flows*1. Reconciliation of ending balance of cash and cash equivalents with account balances per balance sheet(Millions of yen)
Fiscal year ended
March 31, 2023

Fiscal year ended
March 31, 2024

Cash and deposits

5,491

12,204

Cash and cash equivalents

5,491

12,204*2. The major breakdown of assets and liabilities of a newly consolidated subsidiary through shareacquisition
Fiscal year ended March 31, 2023
The breakdown of the assets and liabilities of India Steel Summit Private Limited upon commencementof consolidation as a result of newly including the company in the scope of consolidation through shareacquisition and the reconciliation between the acquisition cost of shares of the company and the net
disbursement for the acquisition are as follows:(Millions of yen)
Current assets

1,496

Non-current assets

2,074

Current liabilities(1,330)Non-current liabilities(218)

Gain on bargain purchase(1,237)

Foreign currency translation adjustment

2

Acquisition-date fair value of shares
held right before business combination(126)

Acquisition cost of shares

661

Cash and cash equivalents(28)

Difference: net disbursement for acquisition

632

Fiscal year ended March 31, 2024
Not applicable.
*3. Description of significant transactions not requiring use of cash or cash equivalents
Assets and liabilities associated with lease transactions newly recorded are as follows:(Millions of yen)
Fiscal year ended
March 31, 2023
Leased assets

Fiscal year ended
March 31, 2024

802

104

Right-of-use assets

2,316

715

Lease obligations

3,052

822

Note:

The amounts of right-of-use assets and lease obligations for the fiscal year ended March 31, 2023 include the increases
of 1,458 million yen and 1,481 million yen, respectively, as a result of the first-time adoption of ASC Topic 842, “Leases.”- 23 -

Notes on leases
As lessee
1. Finance lease transactions
Finance lease transactions that do not transfer ownershipi) Leased assets
Property, plant and equipment
Mainly production facilities (machinery and equipment)ii) Depreciation of leased assets
Depreciation of leased assets is as stated in “5. Disclosure of accounting policies, (2) Accounting policy
for depreciation of significant assets” under “Basis of presentation and significant accounting policies
for preparation of consolidated financial statements.”
2.

Operating lease transactions
Future lease payments under non-cancellable leases of operating lease transactions(Millions of yen)
As of March 31, 2023

As of March 31, 2024

Due within one year

651

781

Due over one year

1,358

1,583

Total

2,010

2,364

Notes on financial instruments
1. Overview of financial instruments(1) Policy on treatment of financial instruments
The Group raises necessary funds (mainly loans from banks and issuance of corporate bonds) according
to the capital expenditure plan to conduct the auto parts related business consisting of the manufactureand sale of auto parts and dies, equipment, tools, etc. for these parts. The Group utilizes derivatives tohedge its exposure to risks described below and adheres to a policy of not conducting derivativetransactions for speculative purposes.
(2) Financial instruments and related risks
Notes and accounts receivable - trade that are operating receivables are exposed to the credit risk ofcustomers. Although operating receivables denominated in foreign currencies, which arise fromintercompany transactions due to the globally developed businesses, are exposed to the risk offluctuations in exchange rates, forward exchange contracts are used to hedge this risk. Investment
securities are principally stocks held for the purposes of increasing transactions with business partners
and strengthening business relationships to stably raise funds, etc. and exposed to the risk of fluctuations
in market prices.
Notes and accounts payable - trade that are operating payables and accounts payable - other are due within
one year. Some of these payables are denominated in foreign currencies due to import of materials, etc.
and exposed to the risk of fluctuations in exchange rates, however, they are within the range of the balanceof accounts receivable - trade denominated in the same foreign currency on a permanent basis. Loanspayable and lease obligations on finance leases are the amounts raised principally for the purpose offunding capital expenditure; these amounts are due for repayment within up to 21 years after the current
fiscal year end. Some of the loans payable and lease obligations are at floating interest rates and exposedto the risk of fluctuations in interest rates, however, derivative transactions (interest rate swaps) are used
to hedge this risk.
Derivative transactions are forward exchange contracts to hedge the foreign currency risk on operatingreceivables arising from intercompany transactions and interest rate swaps to hedge the interest rate risk
on interest paid on loans payable. For hedging instruments and hedged items, hedging policy, method ofassessing hedge effectiveness, and other relevant information in hedge accounting, please refer to- 24 -

“Disclosure of accounting policies, Significant hedge accounting method” mentioned above.
(3) Risk management system for financial instrumentsi)Management of credit risk (customers’ default risk)
For operating receivables, the Company conducts maturity management and balance management by
counterparty through periodical monitoring of major business partners’ status in the operation divisionand the management division of each department in accordance with the internal rules on sales
management, and endeavors to quickly determine and mitigate any concern on the collection ofreceivables due to deteriorated financial conditions. Consolidated subsidiaries also manage operatingreceivables in the same manner in accordance with the Company’s internal rules on sales management.
The Group enters into derivative transactions only with financial institutions with high credit ratings
to mitigate the counterparty risk.
ii) Management of market risk (fluctuation risk of foreign currency exchange and interest rates, etc.)
The Company and some consolidated subsidiaries utilize forward exchange contracts in principle tohedge the foreign currency exchange rate fluctuation risk by currency on a monthly basis for operatingreceivables arising from intercompany transactions. Depending on the status of foreign exchange rates,
forward exchange contracts are entered into for a maximum of 12 months in relation to operatingreceivables denominated in foreign currencies that are certainly expected to arise from forecast royaltytransactions. Some consolidated subsidiaries enter into interest rate swaps to limit the interest rate risk
on interest paid on loans payable.
For investment securities, the Company periodically assesses market value and financial conditions ofissuers (business partners).
For derivative transactions, the Company assesses the positions to conduct hedge transactions on amonthly basis under the hedge policy of the funds and foreign exchange conference, in accordancewith the internal rules on derivatives which stipulate transaction authority, limit amounts and othermatters and the internal rules on foreign exchange risks. Based on this assessment, the accounting
department conducts transactions, and records information on the transactions and checks balanceswith counterparties. Consolidated subsidiaries also manage derivative transactions in the same mannerin accordance with the Company’s internal rules on derivatives and internal rules on foreign exchangerisks.
iii) Management of liquidity risk associated with fund raising (risk of inability to pay on due date)
The Company’s accounting department prepares and updates financial plans annually and monthly
based on reports from each department.
(4) Supplementary explanation concerning fair values of financial instruments
The fair values of financial instruments include the amounts based on market prices and the reasonably
calculated amounts when market prices are not available. In calculating the amounts, several variablefactors are considered. The resulting amounts thus may vary depending on the differences ofpreconditions employed. In addition, the contract/notional amounts of derivative transactions stated in“Notes on derivatives” do not by themselves indicate market risk on derivative transactions.
(5) Concentration of credit risks
As of March 31, 2024, 57.2% of operating receivables were associated with major customers.
2.

Fair values of financial instruments
Carrying amounts on the consolidated balance sheets, fair values and differences therebetween of thefinancial instruments are shown below.

- 25 -

As of March 31, 2023
(Millions of yen)
Carrying amount on
the consolidatedbalance sheet

Fair value

Difference(1) Investment securities (*2)
Available-for-sale securities (other securities)

1,567

1,567

–

Total assets

1,567

1,567

–

(2) Long-term loans payable (*3)

42,90342,235(667)(3) Lease obligations (*4)

3,189

2,989

(199)

46,09245,225

(867)

581

581

–

Total liabilities(4) Derivatives (*5)(*1) “Cash and deposits,” “Notes receivable - trade,” “Accounts receivable - trade,” “Notes and accounts payable - trade,”“Accounts payable - other,” and “Short-term loans payable” are not presented because they are settled in cash within ashort period of time, and thus, their fair values are approximate to their carrying amounts.
(*2) Equity and other securities without market prices are not included in “(1) Investment securities” above. The carrying
amounts of these financial instruments on the balance sheet are as shown below:(Millions of yen)Classification

As of March 31, 2023

Non-listed shares
Shares of subsidiaries and associates

5,639

Other

257

Total

5,897

(*3) Current portion of long-term loans payable in current liabilities is included.
(*4) The total amount of lease obligations in current liabilities and lease obligations in non-current liabilities is presented.
(*5) Claims and obligations arising from derivative transactions are presented on a net basis.

As of March 31, 2024
(Millions of yen)
Carrying amount on
the consolidatedbalance sheet

Fair value

Difference(1) Investment securities (*2)
Available-for-sale securities (other securities)

2,561

2,561

–

Total assets

2,561

2,561

–

(2) Long-term loans payable (*3)

34,82534,327(498)(3) Lease obligations (*4)

2,700

2,336

(364)

37,526

36,663

(863)

449

449

–

Total liabilities(4) Derivatives (*5)(*1) “Cash and deposits,” “Notes receivable - trade,” “Accounts receivable - trade,” “Notes and accounts payable - trade,”“Accounts payable - other,” and “Short-term loans payable” are not presented because they are settled in cash within ashort period of time, and thus, their fair values are approximate to their carrying amounts.
(*2) Equity and other securities without market prices are not included in “(1) Investment securities” above. The carrying
amounts of these financial instruments on the balance sheet are as shown below:- 26 -

(Millions of yen)Classification

As of March 31, 2024

Non-listed shares
Shares of subsidiaries and associates

6,661

Other

261

Total

6,923

(*3) Current portion of long-term loans payable in current liabilities is included.
(*4) The total amount of lease obligations in current liabilities and lease obligations in non-current liabilities is presented.
(*5) Claims and obligations arising from derivative transactions are presented on a net basis.
Notes:

1. Redemption schedule for monetary receivables after the fiscal year end
As of March 31, 2023
(Millions of yen)
Due within one
year
Cash and deposits
Notes receivable - trade
Accounts receivable - trade
Total

Due after one
Due after five
year through five years through ten
years
years

Due over ten
years

5,491

–

–

–

628

–

–

–

37,177–––43,298–––

As of March 31, 2024
(Millions of yen)
Due within one
year
Cash and deposits
Notes receivable - trade
Accounts receivable - trade
Total

Due after one
Due after five
year through five years through ten
years
years

Due over ten
years

12,204

–

–

–

604

–

–

–

41,317–––

54,126–––

2. Repayment schedule for long-term loans payable, lease obligations, and other interest-bearing debts after the
fiscal year end
As of March 31, 2023
(Millions of yen)
Due within one
year

Due after one
Due after five
year through five years through ten
years
years

Due over ten
years

Short-term loans payable

27,832–––Long-term loans payable

12,99528,0281,880–

Lease obligations

1,247

1,622

156

163

42,07429,650

2,036

163

Total

- 27 -

As of March 31, 2024
(Millions of yen)
Due within one
year

Due after fiveDue after one
year through five years through ten
years
years

Due over ten
years

Short-term loans payable

38,537–––Long-term loans payable

12,782

22,043––

Lease obligations

1,029

1,452

50

168

52,34923,495

50

168

Total

- 28 -

3. Breakdown by the level of fair values of financial instruments, etc.
The fair values of financial instruments are classified into the following three levels depending on the observability
and importance of inputs used for the measurement of their fair values as follows:
Level 1: Fair values measured using quoted prices in active markets for identical assets or liabilities out of theobservable inputs used for the measurement of fair values
Level 2: Fair values measured using the inputs other than those used for Level 1 out of the observable inputs used
for the measurement of fair values
Level 3: Fair values measured using unobservable inputs used for the measurement of fair values
When multiple inputs that have a material impact on the measurement of fair value are used, the fair value isclassified into the lowest level of the fair value hierarchy to which any of these inputs belong.

(1) Financial instruments stated at fair value in the consolidated balance sheets
As of March 31, 2023
Fair value (millions of yen)Classification
Level 1

Level 2

Level 3

Total

Investment securities
Available-for-sale securities (othersecurities)

1,567

–

–

1,567

–

583

–

583

1,567

583

–

2,151

–

1

–

1

–

1

–

1

Derivatives
Interest rate
Total assets
Derivatives
Foreign currency
Total liabilities

As of March 31, 2024
Fair value (millions of yen)Classification
Level 1

Level 2

Level 3

Total

Investment securities
Available-for-sale securities (othersecurities)

2,561

–

–

2,561

Interest rate

–

448

–

448

Foreign currency

–

0

–

0

2,561

449

–

3,011

Derivatives

Total assets- 29 -

(2)Financial instruments other than the financial instruments stated at fair value in the consolidated balance sheets

As of March 31, 2023
Fair value (millions of yen)Classification
Level 1Long-term loans payable (including current
portion of long-term loans payable)
Lease obligations (including current portionof lease obligations)
Total liabilities

Level 2

Level 3

Total–

42,235–42,235

–

2,989

–

2,989

–

45,225–45,225

As of March 31, 2024
Fair value (millions of yen)Classification
Level 1Long-term loans payable (including current
portion of long-term loans payable)
Lease obligations (including current portionof lease obligations)
Total liabilities

Note:

Level 2

Level 3

Total–

34,327–34,327

–

2,336

–

2,336

–

36,663–36,663

Valuation techniques and inputs used for the measurement of fair values
Investment securities
The fair values of listed shares are calculated using quoted market prices, and are classified into Level 1 because they
are traded in active markets.

Derivatives
The fair values of interest rate swaps and forward exchange contracts are calculated using the discounted cash flow
method based on observable inputs such as interest rates and exchange rates, and are classified into Level 2.

Long-term loans payable and lease obligations
The fair values of long-term loans payable and lease obligations are calculated by discounting the total amount ofprincipal and interest at the assumed interest rate of similar new borrowings and lease contracts, and are classified into
Level 2.

- 30 -

Notes on securities
1. Available-for-sale securities (other securities)
As of March 31, 2023
(Millions of yen)Type

Items whose carrying
amount on the consolidatedbalance sheet exceeds
original purchase price

Carrying amount on
the consolidatedbalance sheet

Difference(1) Shares

1,563

842

720

(2) Bonds–––(3) Other

–

–

–

1,563

842

720

(1) Shares

3

4

(0)

(2) Bonds–––(3) Other

–

–

–

3

4

(0)

1,567

847

719

Subtotal
Items whose carrying
amount on the consolidatedbalance sheet does notexceed original purchaseprice

Original purchaseprice

Subtotal

Total

As of March 31, 2024
(Millions of yen)Type

Items whose carrying
amount on the consolidatedbalance sheet exceeds
original purchase price

Carrying amount on
the consolidatedbalance sheet

Difference(1) Shares

2,561

903

1,658

(2) Bonds–––(3) Other

–

–

–

2,561

903

1,658

(1) Shares

–

–

–

(2) Bonds–––(3) Other

–

–

–

–

–

–

2,561

903

1,658

Subtotal
Items whose carrying
amount on the consolidatedbalance sheet does notexceed original purchaseprice

Original purchaseprice

Subtotal

Total- 31 -

Notes on derivatives
1. Derivative transactions to which hedge accounting is not applied(1) Foreign currency
As of March 31, 2023
(Millions of yen)
As of March 31, 2023
Classification

Type of transaction

Contract/notionalamountPortion ofcontract/notionalamount over one
year

Fair value

Valuation gain
(loss)

Forward exchange
contracts
Sell
Transactions otherthan market
transactions

U.S. dollar

267

–

(0)

(0)

Thai baht

50

–

(0)

(0)

377

–

(0)

(0)

695

–

(1)

(1)

Buy
U.S. dollar
Total

As of March 31, 2024
(Millions of yen)
As of March 31, 2024
Classification

Type of transaction

Contract/notionalamountPortion ofcontract/notionalamount over one
year

Fair value

Valuation gain
(loss)

Forward exchange
contracts
Sell
Transactions otherthan market
transactions

U.S. dollar

1,243

–

1

1

Thai baht

53

–

(0)

(0)

Indian rupee

9

–

(0)

(0)

–

–

–

–

1,306

–

0

0

Buy
U.S. dollar
Total(2) Interest rate
As of March 31, 2023
Not applicable.
As of March 31, 2024
Not applicable.

- 32 -

2.

Derivative transactions to which hedge accounting is applied(1) Foreign currency
As of March 31, 2023
Not applicable.
As of March 31, 2024
Not applicable.
(2) Interest rate
As of March 31, 2023
(Millions of yen)Hedge
accounting
methodDeferred hedge
accounting

Type of derivativetransaction
Interest rate swaps
Fixed interest paid
Floating interest
received

Portion ofcontract/notionalamount over one
year

Fair value

7,962

6,635

583

7,962

6,635

583

Contract/notionalamountPortion ofcontract/notionalamount over one
year

Fair value

7,091

5,673

448

7,091

5,673

448

Contract/notional
Major hedged item
amountLong-term loans
payableTotal

As of March 31, 2024
(Millions of yen)Hedge
accounting
methodType of derivativetransaction

Interest rate swaps
Deferred hedge Fixed interest paid
accounting
Floating interest
received

Major hedged item

Long-term loans
payableTotal- 33 -

Notes on retirement benefits
1. Summary of retirement benefit plans adopted
The Company has established a constitution-based defined benefit corporate pension plan. Somedomestic consolidated subsidiaries have established constitution-based defined benefit corporate pension
plans and lump-sum retirement benefit plans. Some foreign consolidated subsidiaries have establisheddefined benefit plans or the defined contribution plans.
Because the Company has participated in JMSA Welfare Pension Fund (multi-employer contributory
pension plan) and cannot reasonably calculate the amount of plan assets in terms of its contributions forthe plan, retirement benefit obligations for the plan are accounted for in the same manner as a defined
contribution plan.
2.

Defined benefit plans(1) Reconciliation between the balance at beginning of period and the balance at end of period ofretirement benefit obligations (excluding plans to which the simplified method was applied)(Millions of yen)
Fiscal year ended
March 31, 2023

Fiscal year ended
March 31, 2024

7,643

7,886

Service cost

472

516

Interest cost

30

30

Actuarial loss (gain)

(93)

(5)

Benefits paid

(248)

(363)

81

71

7,886

8,137

Balance at beginning of period

Other
Balance at end of period(2) Reconciliation between the balance at beginning of period and the balance at end of period of plan
assets (excluding plans to which the simplified method was applied)(Millions of yen)
Fiscal year ended
March 31, 2023

Fiscal year ended
March 31, 2024

6,874

7,226

Expected return on plan assets

124

119

Actuarial gain (loss)

103

145

Contributions paid by the employer

361

369

Benefits paid

(247)

(355)

8

40

7,226

7,546

Balance at beginning of period

Other
Balance at end of period- 34 -

(3) Reconciliation between the balance at beginning of period and the balance at end of period of net
defined benefit liability for plans to which the simplified method was applied(Millions of yen)
Fiscal year ended
March 31, 2023

Fiscal year ended
March 31, 2024

93

90

Benefit costs

26

29

Benefits paid

(17)

(14)

Contributions paid by the employer

(11)

(11)

90

95

Balance at beginning of period

Balance at end of period(4) Reconciliation between the balances at end of period of retirement benefit obligations and plan
assets, and net defined benefit liability and net defined benefit asset recorded in the consolidatedbalance sheet(Millions of yen)
As of March 31, 2023

As of March 31, 2024

Funded retirement benefit obligations

7,449

7,564

Plan assets(7,226)(7,546)

222

17

Unfunded retirement benefit obligations

528

668

Total net liability (asset) for retirement benefits

750

686

Net defined benefit liability

1,003

956

Net defined benefit asset

(253)

(269)

Total net liability (asset) for retirement benefits

750

686

Fiscal year ended
March 31, 2023

Fiscal year ended
March 31, 2024

Service cost

472

516

Interest cost

30

30

Expected return on plan assets

(124)

(119)

Net actuarial loss amortization

(276)

3

26

29

128

461

Note:

Includes plans to which simplified methods were applied.

(5) Retirement benefit costs(Millions of yen)

Retirement benefit costs calculated using simplified
methods
Total- 35 -

(6) Remeasurements of defined benefit plans
The breakdown of the items recorded in remeasurements of defined benefit plans (before deducting
tax effect) in the consolidated statement of income and comprehensive income is as follows:(Millions of yen)
Fiscal year ended
March 31, 2023

Fiscal year ended
March 31, 2024

(79)

154

(79)

154

Actuarial gains and losses
Total(7) Accumulated remeasurements of defined benefit plans
The breakdown of the items recorded in accumulated remeasurements of defined benefit plans (before
deducting tax effect) in accumulated other comprehensive income in the consolidated balance sheet is
as follows:(Millions of yen)
Fiscal year ended
March 31, 2023

Fiscal year ended
March 31, 2024

(53)

100

(53)

100

Actuarial gains and losses that are yet to be recognized
Total(8) Plan assetsi)
Breakdown of major categories of plan assets
The ratio of major categories to total plan assets is as follows:
As of March 31, 2023
Bonds

10.9%

16.4%

Equity securities

17.6%

18.7%

Cash and deposits

56.4%

51.0%

Other

15.0%

13.9%

100.0%

100.0%

Totalii)

As of March 31, 2024

Method to determine rate of expected long-term return
The rate of expected long-term return is determined in consideration of the present and expectedasset mix and the present and expected long-term return rate on the various assets that comprise theplan assets.

(9) Actuarial assumptions
Major bases for actuarial calculations at end of period
As of March 31, 2023

3.

As of March 31, 2024

Discount rate

0.1%

0.1%

Long-term expected rate of return

1.7%

1.7%

Expected rate of salary increase

3.0%

3.0%

Defined contribution plan
The required contribution amount to defined contribution plans (including employees’ pension fundplan in multi-employer contributory pension plans which is accounted for in the same manner) was 565
million yen in the previous fiscal year and 568 million yen in the current fiscal year.

- 36 -

4.

Multi-employer contributory pension plans
The required contribution amount to the multi-employer contributory pension plan-type defined benefit
plans, which is accounted for in the same manner as a defined contribution plan, was 43 million yen forthe previous fiscal year and 34 million yen for the current fiscal year.
(1) Latest funding position of the multi-employer contributory pension plans
JMSA Welfare Pension Fund(Millions of yen)

As of March 31, 2023

As of March 31, 2024

Amount of plan assets

2,260

2,598

Amount of reserve for the purpose of pension financing
calculation

2,086

2,026

173

571

Difference(2) Ratio of the Group’s members to the entire plan
JMSA Welfare Pension FundPrevious fiscal year
18.0% (As of March 31, 2023)
Current fiscal year
18.3% (As of March 31, 2024)- 37 -

Notes on tax effect accounting
1. Breakdown of deferred tax assets and deferred tax liabilities by major component(Millions of yen)
As of March 31, 2024

As of March 31, 2023
Deferred tax assets
Tax loss carry forwards (Note 2)

3,823

3,903

Excess depreciation

1,400

2,576

Elimination of unrealized gains on non-current assets

1,126

1,094

Impairment loss

318

340

Net defined benefit liability

263

274

Accrued bonuses

408

465

Loss on valuation of inventories

167

153

1,495

2,153

9,002

10,964

Valuation allowance for tax loss carry forwards (Note 2)(2,938)(3,742)

Valuation allowance for the total of deductible temporary
difference, etc.

(1,633)(1,435)

Valuation allowance subtotal (Note 1)(4,571)(5,178)

Total deferred tax assets

4,431

5,786

Depreciation (foreign consolidated subsidiaries)(4,692)(4,538)Valuation difference on available-for-sale securities

(216)

(499)

Net defined benefit asset

(18)

(18)

Other

(246)

(296)

(5,174)(5,352)

(743)

433

Other
Deferred tax assets subtotal

Deferred tax liabilities

Total deferred tax liabilities
Net deferred tax assets (liabilities)
Notes:

1. Valuation allowance increased by 606 million yen. This increase is mainly due to an increase in valuation
allowance for deductible temporary difference as a result of a decrease in taxable income at some consolidated
subsidiaries.
2. Amounts of tax loss carry forwards and related deferred tax assets by expiration of carry forwards

As of March 31, 2023

(Millions of yen)
Within one
year

Over one
Over twoOver threeyear andyears andyears andwithin two within three within four
years
years
years

Over four
years andwithin five
years

Over five
years

Total

Tax loss carry forwards
(a)

282

7

140

20

19

3,352

3,823

Valuation allowance

(282)

(7)

(17)

(20)

(19)

(2,591)(2,938)Deferred tax assets

–

–

123

–

–

761

(b) 885(a)Tax loss carry forwards represent the amount after being multiplied by the statutory income tax rate.

(b)

For tax loss carry forwards of 3,823 million yen (amount after being multiplied by the statutory income tax rate),
deferred tax assets of 885 million yen were recorded. The deferred tax assets of 885 million yen were recognizedprincipally in relation to the balance of tax loss carry forwards for Reterra Inc. of 33 million yen (amount after
being multiplied by the statutory income tax rate), that for F&P America Mfg., Inc. of 663 million yen (amountafter being multiplied by the statutory income tax rate), that for F.tech Mfg. (Thailand) Ltd. of 141 million yen- 38 -

(amount after being multiplied by the statutory income tax rate), and that for F.E.G. DE QUERETARO, S.A. DE
C.V. of 46 million yen (amount after being multiplied by the statutory income tax rate). Tax loss carry forwards forwhich these deferred tax assets were recorded arose due mainly to the recording of loss before income taxes in priorperiods and the fiscal year ended March 31, 2023. The Company has determined, based on expected future taxable
income, etc., that the deferred tax assets related to the tax loss carry forwards are recoverable.
As of March 31, 2024

(Millions of yen)
Within one
year

2.

Over one
Over twoOver threeyear andyears andyears andwithin two within three within four
years
years
years

Over four
years andwithin five
years

Over five
years

Total

Tax loss carry forwards
(a)

–

8

23

4

112

3,755

3,903

Valuation allowance

–

(8)

(23)

(4)

–

(3,706)(3,742)

Deferred tax assets

–

–

–

–

112

49

(b) 161(a)Tax loss carry forwards represent the amount after being multiplied by the statutory income tax rate.

(b)

For tax loss carry forwards of 3,903 million yen (amount after being multiplied by the statutory income tax rate),
deferred tax assets of 161 million yen were recorded. The deferred tax assets of 161 million yen were recognizedprincipally in relation to the balance of tax loss carry forwards for F.tech Zhongshan Inc. of 112 million yen (amountafter being multiplied by the statutory income tax rate), that for F.E.G. DE QUERETARO, S.A. DE C.V. of 33
million yen (amount after being multiplied by the statutory income tax rate), and that for Reterra Inc. of 15 million
yen (amount after being multiplied by the statutory income tax rate). Tax loss carry forwards for which thesedeferred tax assets were recorded arose due mainly to the recording of loss before income taxes in prior periods andthe current fiscal year. The Company has determined, based on expected future taxable income, etc., that thedeferred tax assets related to the tax loss carry forwards are recoverable.

Reconciliation of significant difference between statutory income tax rate and effective income tax rate
after application of tax effect accounting(%)
As of March 31, 2023
Statutory income tax rate

As of March 31, 2024

30.1

30.1

Change in valuation allowance

7.5

19.4

Foreign tax credit

11.6

3.8

Tax rate differences in foreign consolidated subsidiaries

5.2

9.1

Expenses not deductible permanently for tax purposes

7.2

21.6

Inhabitant per capita tax

0.4

0.5

Share of profit (loss) of entities accounted for using equity
method

(4.2)

(7.4)

Elimination of dividend income in consolidation

2.5

2.0

(11.3)–

Effect of exchange rate fluctuations in foreign subsidiaries–(31.5)

Other

0.7

0.0

Effective income tax rate after application of tax effectaccounting

49.8

47.6

(Adjustments)

Gain on bargain purchase- 39 -

Notes on business combinations, etc.
Transactions under common control, etc.
(Additional acquisition of shares in a consolidated subsidiary)
On December 21, 2023, the Company decided on and implemented an acquisition of shares in F&P America
Mfg., Inc., a consolidated subsidiary of the Company, through a debt-equity swap in which the Company
converted the subsidiary’s debt into a contribution in kind in exchange for equity.
1.

Summary of transaction(1) Name and business description of the combined company
Name of company:
F&P America Mfg., Inc.
Description of business:
Manufacturing and sale of auto parts and dies, equipment, tools, etc.
for these parts(2) Date of business combination
December 21, 2023
(3) Legal form of business combination
Acquisition of shares through a debt-equity swap(4) Name of company after business combination
No change(5) Other matters relating to summary of transaction
The Company performed a debt-equity swap for the capital increase of F&P America Mfg., Inc. tostabilize its financial position.

2.

Summary of accounting treatment
The transaction was accounted for as a transaction with non-controlling shareholders, which is atransaction under common control in accordance with the “Accounting Standard for Business
Combinations” and the “Implementation Guidance on Accounting Standard for Business Combinations
and Accounting Standard for Business Divestitures.”3.

Matters concerning the additional acquisition of shares in a subsidiary
Acquisition cost of the acquired company and breakdown by type of
consideration
Aggregate face value of debt converted into
Consideration for acquisition
contribution in kind
Acquisition cost4.

46 million U.S. dollars(6,601 million yen)
46 million U.S. dollars(6,601 million yen)

Matters concerning change in ownership interest of the Company due to transactions with noncontrolling interests(1) Main reason for change in capital surplus
Additional acquisition of shares in the consolidated subsidiary(2) Amount of capital surplus decreased due to transactions with non-controlling interests
329 million yen- 40 -

Notes on asset retirement obligations
Not applicable.
Notes on real estate for lease, etc.
The Company and a consolidated subsidiary own rental properties in Mie Prefecture and other areas. In thefiscal year ended March 31, 2023, net rental revenue from the rental properties amounted to 23 million yen(rental revenue was recorded in non-operating income). In the fiscal year ended March 31, 2024, net rental
revenue from the rental properties amounted to 31 million yen (rental revenue was recorded in non-operating
income).
Carrying amount on the consolidated balance sheet, increase (decrease) in the current fiscal year and fairvalue of these real estate properties for lease, etc. are as follows:(Millions of yen)
Fiscal year ended
March 31, 2023

Fiscal year ended
March 31, 2024

Carrying amount on the consolidatedbalance sheet
Balance at beginning of period

595

618

Increase (decrease) during period

23

(155)

Balance at end of period

618

462

906

722

Fair value at end of period
Notes:

1. Carrying amount on the consolidated balance sheet is calculated by subtracting accumulated depreciation andaccumulated impairment loss from acquisition cost.
2. Of the increase (decrease) during the fiscal year ended March 31, 2023, the increase was attributable mainly toforeign currency translation difference of 23 million yen. Of the increase (decrease) during the fiscal year ended
March 31, 2024, the increase was attributable mainly to foreign currency translation difference of 24 million yen,while the decrease was attributable mainly to the use of idle land and buildings as production lines of 179 millionyen.
3. Fair values at end of period are based on certain appraisal values and indicators that are considered toappropriately reflect market prices.

- 41 -

Notes on revenue recognition
1. Disaggregation of revenue from contracts with customers
The disaggregation of revenue from contracts with customers is as stated in “Notes to consolidated
financial statements, Segment information, etc.”
2. Useful information in understanding revenue from contracts with customers
Useful information in understanding revenue from contracts with customers is as provided in “5.
Disclosure of accounting policies, (5) Accounting policy for significant revenues and expenses” under“Basis of presentation and significant accounting policies for preparation of consolidated financial
statements.”
3. Reconciliation of satisfaction of performance obligations within contracts with customers and cash flows
arising from such contracts, and the amount and timing of revenues arising from contracts withcustomers existing at the end of the fiscal year expected to be recognized in and after the next fiscal year.
Fiscal year ended March 31, 2023
(1) Balance of contract liabilities, etc.
(Millions of yen)
Fiscal year ended March 31, 2023
Beginning balance
Receivables from contracts withcustomers
Contract liabilities

Ending balance
36,32737,806245

888

Contract liabilities are related to advances such as deposits received from customers based on the termsof sales contracts primarily for dies and equipment. Contract liabilities are reversed upon recognition ofrevenue. The amount of revenue recognized for the fiscal year ended March 31, 2023 that was includedin the beginning balance of contract liabilities is immaterial.
The amount of revenue recognized for the fiscal year ended March 31, 2023 from performanceobligations that were satisfied (or partially satisfied) in prior fiscal years (mainly changes in transaction
price) is immaterial.
(2) Transaction price allocated to the remaining performance obligations
The Group has applied the practical expedient to and thus omitted the presentation of the transaction
price allocated to the remaining performance obligations because of the absence of significant contracts
whose contract term was initially expected to exceed one year. Also, the consideration promised incontracts with customers does not have any significant amounts not included in the transaction price.
Fiscal year ended March 31, 2024
(1) Balance of contract liabilities, etc.
(Millions of yen)
Fiscal year ended March 31, 2024
Beginning balance
Receivables from contracts withcustomers
Contract liabilities

Ending balance
37,80641,921888

1,696

Contract liabilities are related to advances such as deposits received from customers based on the termsof sales contracts primarily for dies and equipment. Contract liabilities are reversed upon recognition ofrevenue. The amount of revenue recognized for the fiscal year ended March 31, 2024 that was includedin the beginning balance of contract liabilities is immaterial.
- 42 -

The amount of revenue recognized for the fiscal year ended March 31, 2024 from performanceobligations that were satisfied (or partially satisfied) in prior fiscal years (mainly changes in transaction
price) is immaterial.
(2) Transaction price allocated to the remaining performance obligations
The Group has applied the practical expedient to and thus omitted the presentation of the transaction
price allocated to the remaining performance obligations because of the absence of significant contracts
whose contract term was initially expected to exceed one year. Also, the consideration promised incontracts with customers does not have any significant amounts not included in the transaction price.

- 43 -

Segment information, etc.
Segment information
1. Description of reportable segments
The reportable segments of the Company are components for which discrete financial information isavailable and whose operating results are regularly reviewed by the Board of Directors to make decisions
about resource allocation and assess their performance.
The Company is engaged in the manufacture and sale of auto parts, etc. As of the end of the current fiscal
year, four companies including the Company in Japan as well as six local corporations in North America
and nine local corporations in Asia each conduct the business operations. These local corporations, which
are independent management units, formulate comprehensive strategies and develop business activities
in each area.
For this reason, the Company consists of regional segments based on the manufacturing and sales systems
and has three reportable segments, namely Japan, North America and Asia.
2.

Explanation of measurements of net sales, profit (loss), assets, liabilities, and other items for eachreportable segment
The accounting procedures for reportable segments are consistent with those stated in “Basis ofpresentation and significant accounting policies for preparation of consolidated financial statements.”
Profit of reportable segments is based on operating profit.
Transactions with other segments are based on prevailing market prices.

3.

Information on net sales, profit (loss), assets, liabilities, other items, and disaggregation of revenue,
for each reportable segment
Fiscal year ended March 31, 2023
(Millions of yen)
Reportable segments
Total
Japan

North America

Asia

Net sales
Net sales to external customers
Transactions with othersegments

23,355

169,650

68,149261,156

13,989

1,312

2,162

17,464

Total

37,345

170,962

70,311

278,620

Segment profit (loss)

417(1,040)

2,340

1,716

69,588105,623

45,404

220,616

3,836

6,026

3,572

13,435

5,504

–

–

5,504

2,035

12,9902,385

17,410

Segment assets
Other items
Depreciation
Investments in entities
accounted for using equity
methodIncrease in property, plant andequipment and intangible assets- 44 -

Disaggregation of goods and services by type(Millions of yen)
Reportable segments
Total
Japan

North America

Asia

Net sales
Auto parts

20,501

157,620

59,228237,350

Dies/facilities

1,458

8,052

2,924

12,435

Other

1,395

3,977

5,997

11,370

Revenue from contracts withcustomers

23,355

169,650

68,149261,156

Revenue from other sources

–

–

–

–

23,355

169,650

68,149261,156

Net sales to external customers

Disaggregation of revenue by timing of recognition(Millions of yen)
Reportable segments
Total
Japan

North America

Asia

Net sales
Goods transferred at a point in
time

22,162

169,650

66,697

258,510Services transferred over time

1,193

–

1,451

2,645

Revenue from contracts withcustomers

23,355

169,650

68,149261,156

Revenue from other sources

–

–

–

–

23,355

169,650

68,149261,156

Net sales to external customers- 45 -

Fiscal year ended March 31, 2024
(Millions of yen)
Reportable segments
Total
Japan

North America

Asia

Net sales
Net sales to external customers
Transactions with othersegments

30,612

206,501

61,645

298,759

11,231

1,611

2,915

15,759

Total

41,844

208,11364,560314,518

Segment profit

1,352

758

1,511

3,622

Segment assets

74,877

114,086

49,148238,112

2,131

9,268

3,558

14,958

6,526

–

–

6,526

727

5,855

1,359

7,943

Other items
Depreciation
Investments in entities
accounted for using equity
methodIncrease in property, plant andequipment and intangible assets
Disaggregation of goods and services by type(Millions of yen)
Reportable segments
Total
Japan

North America

Asia

Net sales
Auto parts

27,485

195,132

54,041

276,659

Dies/facilities

1,442

6,729

1,775

9,947

Other

1,683

4,640

5,827

12,152

Revenue from contracts withcustomers

30,612

206,501

61,645

298,759

Revenue from other sources

–

–

–

–

30,612

206,501

61,645

298,759

Net sales to external customers

Disaggregation of revenue by timing of recognition(Millions of yen)
Reportable segments
Total
Japan

North America

Asia

Net sales
Goods transferred at a point in
time

29,364

206,501

60,783296,649

Services transferred over time

1,248

–

861

2,109

Revenue from contracts withcustomers

30,612

206,501

61,645

298,759

Revenue from other sources

–

–

–

–

30,612

206,501

61,645

298,759

Net sales to external customers- 46 -

4.

Differences between total amounts for reportable segments and amounts in the consolidated financial
statements and main details of these differences (matters relating to difference adjustments)(Millions of yen)
Fiscal year ended
March 31, 2023

Net sales

Fiscal year ended
March 31, 2024

Reportable segments total

278,620

314,518

Elimination of intersegment transactions(17,464)(15,759)

Net sales in the consolidated financial statements

261,156

298,759(Millions of yen)

Fiscal year ended
March 31, 2023

ProfitReportable segments total
Elimination of intersegment transactions
Operating profit in the consolidated financial statements

Fiscal year ended
March 31, 2024

1,716

3,622

321

85

2,038

3,708
(Millions of yen)

Fiscal year ended
March 31, 2023

AssetsFiscal year ended
March 31, 2024

Reportable segments total

220,616

238,112

Elimination of intersegment transactions(44,472)(46,335)(6)(5)

176,137

191,772

Other adjustments
Total assets in the consolidated financial statements(Millions of yen)
Reportable segments total
Other items

Fiscal year
ended March
31, 2023

Fiscal year
ended March
31, 2024

Depreciation

13,435Investments in entities
accounted for using equity
methodIncrease in property, plantand equipment andintangible assets
Note:

Amounts in the consolidated
financial statements

Adjustments
Fiscal year
ended March
31, 2023

Fiscal year
ended March
31, 2024

Fiscal year
ended March
31, 2023

Fiscal year
ended March
31, 2024

14,958

(322)

(399)

13,112

14,559

5,504

6,526

–

–

5,504

6,526

17,410

7,943

(503)

(313)

16,907

7,629

Adjustments of depreciation and those of increase in property, plant and equipment and intangible assets are theeffects of intersegment consolidation adjustments.

- 47 -

Information associated with reportable segments
Fiscal year ended March 31, 2023
1. Information by product or service
This information has been omitted as net sales to external customers in a single product or service
category account for more than 90% of net sales recorded in the consolidated statements of income.
2.

Information by geographical region(1) Net salesJapan
22,850Note:

U.S.A.

(Millions of yen)Canada113,114China

31,650Other

49,887

Total

43,653

261,156

Net sales are segmented by country or region based on customer locations.

(2) Property, plant and equipment
Japan13,361

3.

U.S.A.

(Millions of yen)Canada22,620China

18,423Mexico12,349Other

18,708

Total

6,821

Information for major customers

92,284(Millions of yen)Counterparty

Revenues

Relevant segment

Honda Motor Co., Ltd. and its group companies

157,845

All reportable segments

General Motors Company and its group companies

29,900

All reportable segments

Fiscal year ended March 31, 2024
1. Information by product or service
This information has been omitted as net sales to external customers in a single product or service
category account for more than 90% of net sales recorded in the consolidated statements of income.
2.

Information by geographical region(1) Net salesJapan
29,400Note:

U.S.A.

(Millions of yen)Canada132,140

China

46,119Other

41,266

Total

49,832

298,759

Net sales are segmented by country or region based on customer locations.

(2) Property, plant and equipment
Japan12,223

3.

U.S.A.

(Millions of yen)Canada24,798

China

18,957

Mexico11,705

Other

19,641

Total

6,706

Information for major customers

94,033(Millions of yen)Counterparty

Revenues

Relevant segment

Honda Motor Co., Ltd. and its group companies

182,243

All reportable segments

General Motors Company and its group companies

29,953All reportable segments

Disclosure of impairment loss on non-current assets for each reportable segment
Fiscal year ended March 31, 2023
Not applicable.
- 48 -

Fiscal year ended March 31, 2024
Not applicable.
Amortization and unamortized balance of goodwill for each reportable segment
Fiscal year ended March 31, 2023
Not applicable.
Amortization and unamortized balance of negative goodwill that arose from business combinations
conducted before April 1, 2010 are as follows:(Millions of yen)Japan

North America

Unallocatedamounts andelimination

Asia

Total

Amortization during
period

1

0

3

–

5

Balance at end of
period

8

4

20

–

33

Fiscal year ended March 31, 2024
Not applicable.
Amortization and unamortized balance of negative goodwill that arose from business combinations
conducted before April 1, 2010 are as follows:(Millions of yen)Japan

North America

Unallocatedamounts andelimination

Asia

Total

Amortization during
period

1

0

3

–

5

Balance at end of
period

7

3

17

–

28

Information about gain on bargain purchase for each reportable segment
Fiscal year ended March 31, 2023
A gain on bargain purchase of 1,237 million yen was recorded in the first quarter of the fiscal year
ended March 31, 2023 as a result of acquiring shares in India Steel Summit Private Limited to make ita consolidated subsidiary.
The provisional accounting treatment was applied in the first quarter of the fiscal year ended March
31, 2023, but was finalized at the end of the fiscal year ended March 31, 2023. As a result, thetentatively calculated amount of gain on bargain purchase of 765 million yen increased by 471 million
yen to 1,237 million yen due to the finalization of the accounting treatment.
The amount is not allocated to reportable segments as it is recorded in extraordinary income.
Fiscal year ended March 31, 2024
Not applicable.

- 49 -

Related parties
Fiscal year ended March 31, 2023
1.

Related-party transactions(1) Transactions between the company filing the consolidated financial statements and relatedpartiesi)

Type

The parent company and major shareholders (limited to companies) of the company filingthe consolidated financial statements
Name

Honda
Major
Motor Co.,
shareholder
Ltd.

Note:

Capital stock
or stakeTransaction
Nature of Voting rights Relationship Description
amountbusiness or holding ratio with theof(Millions of occupation(Millionsofrelated party transactions
(%)
yen)
yen)
Manufacture
Purchaser of Sale ofand sale ofproducts of finished
goods(Owned)motor
the Group
86,067
vehicles and Direct 13.63 and seller of Purchase ofpassengers
parts and raw raw
materials
car bodies
materials

Minato-ku,
Tokyo

Note:

Endingbalance(Millions ofyen)Accounts
12,382 receivable trade
7,162

1,864

Accounts
payable trade

1,177

Officers and major individual shareholders (limited to individuals) of the company filingthe consolidated financial statements

Name

Location

Capitalstock or
stake
(Millionsof yen)Officerand hisor herclose
familymemberLine item

Terms and conditions of transactions and policy on determination thereof(1) Selling prices are determined by making an estimate based on economic rationality in view of market prices
and the Company’s manufacturing technologies, submitting the estimate to the customer and then negotiatingon price.
(2) In purchases of raw materials, prices are determined through negotiations on price by reference to market prices.

ii)

Type

Location

AkihideFukuda––Nature ofbusinessor
occupation

Executive
SeniorAdvisorof theCompany

Votingrightsholdingratio

Relationshipwith therelated party

Descriptionoftransactions

Advisory
contract

Advisory
fees

Transaction
amount(Millionsof yen)Line
item

Endingbalance(Millionsof yen)(%)(Owned)Direct4.76

30–

Advisory fees are determined based on the contract entered into through consultation between both parties after
comprehensively taking into account past experience and others.

- 50 -–

(2) Transactions between consolidated subsidiaries of the company filing the consolidated financial
statements and related partiesi)Companies which have the same parent company as the company filing the consolidated
financial statements and subsidiaries of other associates of the company filing the consolidated
financial statements
Type

Name

LocationTransaction
Nature of Voting rights Relationship Description
amountCapital stockbusiness or holding ratio with theofor stake(Millions ofoccupation
relatedpartytransactions
(%)
yen)

Honda
Development
Subsidiary
and
Ohio,
of major
Manufacturing U.S.A.
shareholderof America,
LLC

Manufactureand sale of
USD motor
561 million vehicles andpassengers
car bodies

Subsidiary
Honda Canada, Ontario,of major
Inc.
Canadashareholder

Manufactureand sale of
CAD motor
226 million vehicles andpassengers
car bodies

Note:

–

–

Purchaser of Sale ofproducts of finishedgoods
the Groupand seller of Purchase ofparts and raw raw
materials
materials
Purchaser of
products ofSale ofthe Groupfinished
and seller ofgoods
parts and raw
materials

Line item

Accounts
62,808 receivable tradeEndingbalance(Millions of
yen)
4,871

26,769Accounts
payable trade

2,757

24,294

Accounts
receivable trade

3,186

Terms and conditions of transactions and policy on determination thereof(1) Selling prices are determined by making an estimate based on economic rationality in view of market prices andthe Company’s manufacturing technologies, submitting the estimate to the customer and then negotiating on price.
(2) In purchases of raw materials, prices are determined through negotiations on price by reference to market prices.

2.

Notes on the parent company or major associates
Not applicable.

- 51 -

Fiscal year ended March 31, 2024
1.

Related-party transactions(1) Transactions between the company filing the consolidated financial statements and relatedpartiesi)

Type

The parent company and major shareholders (limited to companies) of the company filingthe consolidated financial statements
Name

Honda
Major
Motor Co.,
shareholder
Ltd.

Note:

Transaction
Nature of Voting rights Relationship Description
amountholdingratiobusiness orwith theof(Millions of occupation(Millionsofrelated party transactions
(%)
yen)
yen)
Manufacture
Purchaser of Sale ofand sale ofproducts of finished
goods(Owned)motor
the Group
86,067
vehicles and Direct 13.63 and seller of Purchase ofpassengers
parts and raw raw
car bodies
materials
materials

Minato-ku,
Tokyo

Note:

(Millions ofyen)Accounts
15,528 receivable trade
9,358

2,079

Accounts
payable trade

1,294

Officers and major individual shareholders (limited to individuals) of the company filingthe consolidated financial statements

Name

Location

Capitalstock or
stake
(Millionsof yen)Officerand hisor herclose
familymemberLine item

Endingbalance

Terms and conditions of transactions and policy on determination thereof(1) Selling prices are determined by making an estimate based on economic rationality in view of market prices
and the Company’s manufacturing technologies, submitting the estimate to the customer and then negotiatingon price.
(2) In purchases of raw materials, prices are determined through negotiations on price by reference to market prices.

ii)

Type

Location

Capital stock
or stake

AkihideFukuda––Nature ofbusinessor
occupation

Executive
SeniorAdvisorof theCompany

Votingrightsholdingratio

Relationshipwith therelated party

Descriptionoftransactions

Advisory
contract

Advisory
fees

Transaction
amount(Millionsof yen)Line
item

Endingbalance(Millionsof yen)(%)(Owned)Direct4.76

30–

Advisory fees are determined based on the contract entered into through consultation between both parties after
comprehensively taking into account past experience and others.

- 52 -–

(2) Transactions between consolidated subsidiaries of the company filing the consolidated financial
statements and related partiesi)Companies which have the same parent company as the company filing the consolidated
financial statements and subsidiaries of other associates of the company filing the consolidated
financial statements
Type

Name

LocationTransaction
Nature of Voting rights Relationship Description
amountCapital stockbusiness or holding ratio with theofor stake(Millions ofoccupation
relatedpartytransactions
(%)
yen)

Honda
Development
Subsidiary
and
Ohio,
of major
Manufacturing U.S.A.
shareholderof America,
LLC

Manufactureand sale of
USD motor
561 million vehicles andpassengers
car bodies

Subsidiary
Honda Canada, Ontario,of major
Inc.
Canadashareholder

Manufactureand sale of
CAD motor
226 million vehicles andpassengers
car bodies

Note:

–

–

Purchaser of Sale ofproducts of finishedgoods
the Groupand seller of Purchase ofparts and raw raw
materials
materials
Purchaser of
products ofSale ofthe Groupfinished
and seller ofgoods
parts and raw
materials

Line item

Endingbalance(Millions ofyen)

72,882

Accounts
receivable trade

7,031

61,445

Accounts
payable trade

3,219

36,830Accounts
receivable trade

3,864

Terms and conditions of transactions and policy on determination thereof(1) Selling prices are determined by making an estimate based on economic rationality in view of market prices andthe Company’s manufacturing technologies, submitting the estimate to the customer and then negotiating on price.
(2) In purchases of raw materials, prices are determined through negotiations on price by reference to market prices.

2.

Notes on major associates
Condensed financial information of major associates
The condensed financial information of a major associate, Johnan Manufacturing Inc., as of March 31,
2023 and 2024 was as follows:(Millions of yen)
Johnan Manufacturing Inc.
As of March 31, 2023

As of March 31, 2024

Total current assets

10,056

10,355

Total non-current assets

8,312

7,819

Total current liabilities

9,812

8,964

Total non-current liabilities

1,544

1,453

Total net assets

7,011

7,756

Net sales

19,336

21,533

Profit before income taxes

310

1,413

Profit

217

987

Note:

Johnan Manufacturing Inc. has become a major associate since the fiscal year ended March 31, 2024 due to anincrease in its significance.

- 53 -

Per share information(Yen)
Fiscal year ended
March 31, 2023
Net assets per share
Basic earnings per share
Notes:

Fiscal year ended
March 31, 2024

2,691.60

3,006.59

93.30

90.62

1. Diluted basic earnings (loss) per share is not presented since no potential shares exist.
2. Since the second quarter of the fiscal year ended March 31, 2021, the Company has acquired the Company’s sharesthrough the “Officers’ Stock Benefit Trust,” and the shares of the Company held by the Officers’ Stock Benefit Trust(88,882 shares for the fiscal year ended March 31, 2023 and 102,491 shares for the fiscal year ended March 31,2024) are included in the number of treasury shares deducted in the calculation of the average number of shares
during the period, to calculate basic earnings per share.
3. Since the second quarter of the fiscal year ended March 31, 2021, the Company has acquired the Company’s sharesthrough the “Officers’ Stock Benefit Trust,” and the shares of the Company held by the Officers’ Stock Benefit Trust(87,600 shares for the fiscal year ended March 31, 2023 and 110,500 shares for the fiscal year ended March 31,2024) are included in the number of treasury shares deducted from the total number of shares issued at the end of
period, to calculate net assets per share.
4. Basis for calculating basic earnings per share is as follows:
Fiscal year ended
March 31, 2023

Fiscal year ended
March 31, 2024

Basic earnings per share
Profit attributable to owners of parent (Millions of yen)

1,734

1,683

–

–

Profit attributable to owners of parent related tocommon shares (Millions of yen)

1,734

1,683

Average number of shares (Thousands of shares)

18,58918,575

Amounts not attributable to common shareholders(Millions of yen)

Significant subsequent event
Not applicable.

- 54 -

v)

Annexed consolidated detailed schedules
Annexed detailed schedule of corporate bonds
Not applicable.
Annexed detailed schedule of borrowings
Balance atBalance at end Average interest
beginning ofof current periodratecurrent period(Millions of yen)(%)
(Millions of yen)Classification

Payment due

Short-term loans payable

27,832

38,537

5.01–

Current portion of long-term loans payable

12,995

12,782

2.44–

Current portion of lease obligations

1,247

1,029

2.92

–

Long-term loans payable (excluding current portion)

29,90822,0433.32

2025–2031

Lease obligations (excluding current portion)

1,942

1,671

4.49

2025–2044

73,92576,063––

Total
Notes:

1. The average interest rate is calculated using the interest rate and balance at end of period.
2. Repayment of long-term loans payable and lease obligations (excluding current portion) above scheduled within five
years after the closing date of the accounting period are as follows:(Millions of yen)
Due after one year
through two years

Due after two years
through three years

8,553

6,920

4,371

2,198

892

252

160

146

Long-term loans payable
Lease obligations

Due after three years
through four years

Due after four years
through five years

Annexed detailed schedule of asset retirement obligations
Not applicable.
(2) Other information
Quarterly information for the fiscal year ended March 31, 2024
Three months
ended June 30,
2023
Net sales (Millions of yen)Six months ended
September 30,
2023

Nine months
ended December
31, 2023

Fiscal year ended
March 31, 2024

71,199139,303

215,055

298,759

Profit (loss) before income taxes (Millions of
yen)

468

(764)

109

3,100

Profit (loss) attributable to owners of parent(Millions of yen)

(327)

(516)

(489)

1,683

(17.64)(27.78)(26.33)90.62

First quarter

Second quarter

Third quarter

Fourth quarter(10.14)1.46

117.00

Basic earnings (loss) per share (Yen)

Basic earnings (loss) per share (Yen)(17.64)- 55 -