Translation
Notice: This document is an excerpt translation of the original Japanese document and is only for reference purposes. In the event of any
discrepancy between this translated document and the original Japanese document, the latter shall prevail.

Summary of Consolidated Financial Results
for the Year Ended March 31, 2014
(Based on Japanese GAAP)May 14, 2014
Company name:Howa Machinery, Ltd.

Stock exchange listing: Tokyo, Nagoya
Stock code:
6203
URL
Representative:
Inquiries:

http://www.howa.co.jp/PresidentManaging Director

Kazuhide banno
Hiromitsu Ishihara

Scheduled date of ordinary general meeting of shareholders:
Scheduled date to file Securities Report:

June 26, 2014
June 26, 2014

Scheduled date to commence dividend payments:
Preparation of supplementary material on financial results:

June 27, 2014
Yes

Holding of financial results meeting:

Yes

TEL052-408-1001(for institutional investors and analysts)(Amounts less than one million yen are rounded down)

1. Consolidated financial results for the year ended March 31, 2014 (from April 1, 2013 to March 31, 2014)(1) Consolidated financial results
Percentages indicate year-on-year changes
Net salesYear ended March 31, 2014
Year ended March 31, 2013

Millions of yen
23,29423,872

Operating income% Millions of yen
(2.4)
1,014
(0.8)
1,371

Ordinary income% Millions of yen(26.0)
1,041
17.6
1,365

Net income% Millions of yen(23.7)
1,181
22.7
1,250

Diluted net income
Ordinary
Net income/equity
per share
income/total assets
Yen
Yen%
%
94.29
–
8.1
3.9
99.81
–
9.4
5.1

Net income per share
Year ended March 31, 2014
Year ended March 31, 2013%(5.5)(44.1)

Operatingincome/net sales
%4.4
5.7

(2) Consolidated financial position
Total assets
As of March 31, 2014
As of March 31, 2013

Net assets

Equity ratio

Millions of yen
26,234
26,729Millions of yen
15,366
14,113

Cash flows fromoperating activities
Millions of yen
1,523
(905)

Cash flows frominvesting activities
Millions of yen(461)
9Net assets per share%
58.2
52.4

Yen
1,217.62
1,117.16(3) Consolidated cash flows

Year ended March 31, 2014
Year ended March 31, 2013

Cash and cash equivalents
Cash flows fromat end of period
financing activities
Millions of yen
Millions of yen(1,159)2,700(1,284)2,794

2. Cash dividends
Ratio ofDividend
Total cash
topayout ratio dividends
dividends (Total) (Consolidated)
net assets(Consolidated)

Annual dividends per share
1st quarter-end 2nd quarter-end 3rd quarter-end Fiscal year-end

Total

Yen

Yen

Yen

Yen

Yen

Millions of yen%%

Year ended March 31, 2013
Year ended March 31, 2014

––

0.00
0.00

––

2.00
20.00

2.00
20.00

250
250

20.0
21.2

1.9
1.7

Year ending March 31, 2015 (Forecast)

–0.00

–

20.00

20.00

1–3. Forecast of consolidated financial results for the year ending March 31, 2015 (from April 1, 2014 to March 31, 2015)
Net sales
Millions of yen
Six months ending
September 30, 2014
Full year

Percentages indicate year-on-year changes
Net income
Operating income
Ordinary income
Net income
per share% Millions of yen% Millions of yen% Millions of yen%Yen

11,0000.4350(22.4)350(23.3)

370(24.2)

29.53

23,000

(1.3)

950

(6.3)

960

(7.9)

930

(21.3)

74.22

4. Notes(1) Changes in significant subsidiaries during the year ended March 31, 2014(changes in specified subsidiaries resulting in the change in scope of consolidation):No(2) Changes in accounting policies, changes in accounting estimates, and restatement of prior period financial statements
Changes in accounting policies due to revisions to accounting standards and other regulations:
Yes
Changes in accounting policies due to other reasons:
Changes in accounting estimates:

No
No

Restatement of prior period financial statements after error corrections:No(3) Number of issued shares (common shares)
Total number of issued shares at the end of the period (including treasury shares)
As of March 31, 2014

12,548,134 shares As of March 31, 2013

12,548,134 shares

Number of treasury shares at the end of the period
As of March 31, 2014

17,615 shares As of March 31, 201317,287 shares

Average number of shares during the period
Year ended March 31, 2014

12,530,683 shares Year ended March 31, 20132

12,531,049 shares

Consolidated financial statements
Consolidated balance sheets(Millions of yen)
As of March 31, 2013

As of March 31, 2014

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable – trade

2,802
10,033

2,914
9,254–200494–

257
3,207

240
2,671

Raw materials and supplies
Deferred tax assets

258
41271
180

Other
Allowance for doubtful accounts

485
(12)

192
(12)

17,274

16,20812,019(9,561)

11,790(9,236)

Electronically recorded monetary claims – operating
Securities
Merchandise and finished goods
Work in process

Total current assets
Non–current assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation
Buildings and structures, net

2,457

2,554

Machinery, equipment and vehicles

12,176

12,477

Accumulated depreciation(11,287)(11,306)

8891,170

Machinery, equipment and vehicles, net
Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net
Land
Leased assets

1,622

1,674

(1,525)(1,562)

96

111

605

506

444

455

Accumulated depreciation

(290)

(339)

Leased assets, net

154

116

Construction in progress

1015

4,213

4,474

Other

23

41

Total intangible assets

2341

Investment securities

4,159

4,487

Other
Allowance for doubtful accounts

1,149
(92)

1,111
(88)

Total investments and other assets

5,216

5,510

9,454

10,02526,72926,234Total property, plant and equipment
Intangible assets

Investments and other assets

Total non–current assets
Total assets3

(Millions of yen)
As of March 31, 2013

As of March 31, 2014

Liabilities
Current liabilities
Notes and accounts payable – trade

3,806

3,072

Short–term loans payable
Current portion of bonds

901
345

442
247

Accounts payable – otherLease obligations

156
61

205
41

Accrued expenses
Income taxes payable

861
53

909
93

Accrued consumption taxes
Provision for bonuses

76
448

201
440

Provision for directors' bonuses
Provision for loss on construction contracts

7––
10

Provision for loss on removal of fixed assets
Other

52
140

–
71

6,909

5,734

Bonds payable

577

330

Long–term loans payable
Lease obligations

263
97

225
88

594
3,545

719
–

Net defined benefit liability
Provision for environmental safety measures

–124

3,161
124

Asset retirement obligations
Other

78
425

80
404

Total current liabilities
Non–current liabilities

Deferred tax liabilities
Provision for retirement benefits

Total non–current liabilities

5,706

5,133

12,615

10,868

Shareholders' equityCapital stock

9,019

9,019

Retained earnings
Treasury shares

3,884(17)4,815(17)Total shareholders' equity

12,887

13,817

1,111

1,311

(0)
–0128

1,111

1,439

Total liabilities
Net assets

Accumulated other comprehensive income
Valuation difference on available–for–sale securities
Deferred gains or losses on hedges
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Minority interests

114

108

Total net assets

14,11315,366

26,72926,234

Total liabilities and net assets

4Consolidated statements of income and consolidated statements of comprehensive income
Consolidated statements of income(Millions of yen)
Fiscal year ended

Fiscal year ended

March 31, 2013

March 31, 2014

Net sales

23,872

23,294

Cost of sales

19,403

19,039Gross profit

4,469

4,254

Selling, general and administrative expenses

3,097

3,240

Operating income

1,371

1,014

Interest income

10

Dividend income
Insurance income

9935

98
26

Miscellaneous income

4750

Total non–operating income

184

175

Interest expenses
Insurance expenses

3927

1727

Maintenance cost for idle assets
Miscellaneous loss

50
72

4260Total non–operating expenses

190

148

1,365

1,0412237

174
0Non–operating income

Non–operating expenses

Ordinary income
Extraordinary income
Gain on sales of non–current assets
Gain on sales of investment securities
Other02240

177

Loss on product safety measuressubsidiary transfer cost

93
1013–

Provision for loss on removal of fixed assets
Loss on sales of investment securities

52
3––

Loss on disposal of non–current assets
Loss on sales of non–current assets

50812137––192–

Total extraordinary income
Extraordinary losses

Impairment loss
Compensation for damage
Other
Total extraordinary losses
Income before income taxes and minority interests

30654

1,299

1,164

Income taxes – current

80

101

Income taxes – deferred

(46)

(119)

Total income taxes
Income before minority interests
Minority interests in income
Net income534(17)

1,264

1,182

13

1

1,250

1,181

Consolidated statements of comprehensive income (cumulative)(Millions of yen)
Fiscal year ended
March 31, 2013
Income before minority interests

Fiscal year ended
March 31, 2014
1,264

1,182

Valuation difference on available–for–sale securities
Deferred gains or losses on hedges

351(0)

199
0

Total other comprehensive income

351

199

1,616

1,382

1,602
13

1,380
1

Other comprehensive income

Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to minority interests

6Consolidated statements of changes in net assets
Fiscal year ended March 31, 2013
(Millions of yen)
Shareholders' equity
Capital stock
Balance at beginning ofcurrent period

Retained earnings
9,019

Treasury shares

2,759

Total shareholders' equity(17)11,761

Changes of items during
periodDividends of surplus

(125)

(125)

Net income

1,250

1,250

Purchase of treasury
shares(0)(0)

Disposal of treasury
sharesNet changes of items
other than shareholders'equityTotal changes of items
during period
Balance at end of current
period

–

1,125

(0)

1,125

9,019

3,884

(17)

12,887

Accumulated other comprehensive income
Valuation difference
on available–for–salesecurities

Balance at beginning ofcurrent period

759

Deferred gains orlosses on hedges

Total accumulated
Remeasurements ofother comprehensive
defined benefit plansincome(0)–759Minority
interests

Total net assets

102

12,624

Changes of items during
periodDividends of surplus(125)

Net income

1,250

Purchase of treasury
shares(0)

Disposal of treasury
sharesNet changes of items
other than shareholders'equity351(0)

351

11363

Total changes of items
during period351(0)

351

11

1,488

Balance at end of current
period1,111(0)

1,111

114

14,113–

7

Fiscal year ended March 31, 2014
(Millions of yen)
Shareholders' equity
Capital stock
Balance at beginning ofcurrent period

Retained earnings
9,019

Treasury shares

3,884

Total shareholders' equity(17)

12,887

Changes of items during
periodDividends of surplus

(250)

(250)

Net income

1,181

1,181

Purchase of treasury
shares

(0)

(0)

(0)

00–

930

(0)

930

9,019

4,815

(17)

13,817

Disposal of treasury
sharesNet changes of items
other than shareholders'equityTotal changes of items
during period
Balance at end of current
periodAccumulated other comprehensive income
Valuation difference
on available–for–salesecurities

Balance at beginning ofcurrent period

1,111Deferred gains orlosses on hedges

Total accumulated
Remeasurements ofother comprehensive
defined benefit plansincome

(0)

–

1,111

Minority
interests

Total net assets

114

14,113(6)(257)

Changes of items during
periodDividends of surplus
Net income

1,181

Purchase of treasury
shares(0)

Disposal of treasury
shares0

Net changes of items
other than shareholders'equity

199

0128

327

1328

Total changes of items
during period

199

0128

327(5)

1,252

Balance at end of current
period

1,311

0128

1,439

108

15,366

8Consolidated statements of cash flows(Millions of yen)
Fiscal year ended
March 31, 2013

Fiscal year ended
March 31, 2014

Cash flows from operating activities
Income before income taxes and minority interests

1,299

1,164

Depreciation
Impairment loss

661
137

672
–

Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses

(112)
87(3)
(8)

Increase (decrease) in provision for directors' bonuses
Increase (decrease) in provision for retirement benefits

0(396)(7)(3,545)–3,289

52(52)–

10Increase (decrease) in net defined benefit liability
Increase (decrease) in provision for loss on removal of fixed
assetsIncrease (decrease) in provision for loss on construction
contracts
Interest and dividend income

(101)

(98)

Interest expenses
Loss (gain) on valuation of investment securities

39
017–

Loss on valuation of golf club memberships
Foreign exchange losses (gains)

2(7)

–
(3)

Loss (gain) on sales of property, plant and equipment
Loss on retirement of property, plant and equipment(1)4(161)
7

Loss (gain) on sales of short–term and long–term investment
securities

(234)

(0)

Decrease (increase) in notes and accounts receivable – trade
Decrease (increase) in inventories

(772)
(629)

284
536

Increase (decrease) in notes and accounts payable – trade
Increase (decrease) in accrued consumption taxes

(634)
(27)

(733)
125

Decrease (increase) in other current assets
Increase (decrease) in other current liabilities

(293)
106

24
(19)

Other, net

(65)

21

Subtotal

(884)

1,518

Interest and dividend income received

101

98

Interest expenses paid
Income taxes paid

(39)
(81)

(17)
(76)

Net cash provided by (used in) operating activities

(905)

1,523

9

(Millions of yen)
Fiscal year ended
March 31, 2013

Fiscal year ended
March 31, 2014

Cash flows from investing activities
Payments into time deposits

(506)

(258)

Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment

1,282
(465)

252
(972)

Proceeds from sales of property, plant and equipment
Purchase of intangible assets

119
(6)

267
(14)

Purchase of investment securities
Proceeds from sales and redemption of investment securities(556)365(31)
277

Payments for investments in capital of subsidiaries andassociates

(221)

–

Other, net

(0)

17

Net cash provided by (used in) investing activities

9(461)

50
30

(60)
200

Repayments of long–term loans payable
Proceeds from issuance of bonds(1,074)
294

(637)
–

Redemption of bonds
Proceeds from sales of treasury shares

(375)
–

(345)
0

Purchase of treasury shares
Cash dividends paid

(0)
(123)

(0)
(248)

Cash dividends paid to minority shareholders
Repayments of lease obligations

(2)
(83)

(6)
(62)

(1,284)(1,159)Cash flows from financing activities
Net increase (decrease) in short–term loans payable
Proceeds from long–term loans payable

Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents

73

Net increase (decrease) in cash and cash equivalents(2,172)(94)

Cash and cash equivalents at beginning of period

4,966

2,794

Cash and cash equivalents at end of period

2,794

2,700

10