Audited Annual Financial Report2021

FINANCIAL HIGHLIGHTS (consolidated)
2021
Net sales¥92,635

2020

2019

2018

2017

¥116,761¥117,405¥116,862¥111,327¥83,301¥84,493¥83,712¥79,350¥29,930¥29,078¥28,509¥27,503¥3,529¥3,834¥4,640¥4,473¥12,648¥5,742¥6,860¥3,523¥5,309¥1,662¥1,844¥1,747¥7,338¥4,079¥5,016¥1,776¥5,784¥3,475¥5,789¥2,268¥304.06¥169.03¥207.83¥59.37¥85.00¥45.00¥14.00¥12.00¥154,283¥150,724¥148,763¥138,373¥87,018¥83,197¥81,334¥77,120¥1,741¥1,195¥4,687¥1,335¥1,781¥1,868¥2,049¥1,730¥2,378¥1,835¥1,899¥1,648

3,360

3,346

3,273

3,236

$836,738
Cost of sales¥67,730$611,784

Selling, general andadministrative expenses
Operating income¥24,522$221,505¥381$3,449Net income before income taxes¥267$2,420

Income taxes¥3,165$28,597

Net income (loss)¥(2,898)$(26,178)

Comprehensive income

¥43
$391

Per common share:
Net income (loss)¥(120.05)$(1.08)Cash dividends¥199.30$1.80

Total assets¥134,296$1,213,048

Net assets¥82,152$742,052

Capital expenditures(property, plant and equipment)
Depreciation¥1,799$16,251¥1,755$15,857

R & D costs¥2,218$20,037

Number of employees

3,081

Note 1: In millions of yen (thousands of U.S. dollars), except for per-share data and number of employees.
Note 2: Yen amounts have been translated into U.S. dollars, for convenience only, at the exchange rate of ¥110.71=U.S.$1.
See Note 3 of the Notes to the Consolidated Financial Statements.
Note 3: SHIBAURA MACHINE CO., LTD. executed the consolidation of shares at the ratio of 5 shares into 1 share effectivefrom October 1, 2018. Net income per share is recalculated on the assumption that the consolidation of shares was
executed at the beginning of the year ended March 31, 2017. In addition, the cash dividend per share at the end of
March 31, 2019 is the sum of the interim dividend ¥7.50 and the year-end dividend ¥37.50. Since the interim
dividend amount is ¥37.50 when converted based on the consolidation of shares, the annual dividend amountincluding the ¥37.50 year-end dividend amount is ¥75.00 per share.
Note 4: Cash dividends per shares includes a commemorative dividend ¥10.00 at the end of March 31, 2020.
Note 5: Cash dividends per shares includes a special dividend ¥124.30 at the end of March 31, 2021.
Note 6: The Companies have adopted the “Partial Amendments to Accounting Standard for Tax Effect Accounting” (ASBJ
Statement No.28, February 16, 2018). This accounting standard has been retrospectively applied to figures for the
beginning of the year ended March 31, 2017.

1

CONSOLIDATED BALANCE SHEETSHIABURA MACHINE CO., LTD. AND CONSOLIDATED SUBSIDIARIESMarch 31, 2021
Thousands of
U.S. dollars(Note 3)

Millions of yen
ASSETS

2021

2020

2021

Current assets:
Cash and deposits (Notes 18 and 20)
Marketable securities (Notes 18, 20 and 21)
Notes and accounts receivable, trade (Note 20)
Allowance for doubtful receivables
Net receivables¥42,417¥47,907$383,144

－

104

－

27,682

36,064250,045

(37)

(49)

(341)

27,64436,015

249,703

Inventories:
Finished products

6,736

9,052

60,850Work in process

22,327

26,877

201,680

64

67

583

29,12935,997263,113

3,560

2,340

32,164

102,752

122,364

928,124

20,75820,541

187,507

571

561

5,161

744

780

6,725

7,597

5,779

68,624

6

13

60

409

3,142

3,699

1,455

1,100

13,14910,213

10,81692,256¥134,296¥154,283$1,213,048

Raw materials and supplies
Total inventories
Other current assets (Notes 20 and 22)
Total current assets
Property, plant and equipment, net (Note 7)
Intangible assets (Note 8)
Investments and other assets:
Investments in:
Unconsolidated subsidiaries and affiliates (Note 20)
Other securities (Notes 20 and 21)
Long-term loans
Deferred tax assets (Note 4 and 24)
Other investments
Total investments and other assets
Total assets

See accompanying notes to financial statements.

2

Thousands of
U.S. dollars(Note 3)

Millions of yen
LIABILITIES AND NET ASSETS

2021

2020

2021

Current liabilities:
Short-term bank loans (Notes 20 and 31)¥10,090¥10,090

500

－

4,516

17,613

21,279159,093

74

7,218

675

Accrued expenses

2,341

5,351

21,153

Provision for bonuses

1,096

－

9,906

Warranty reserve

591

720

5,344

Advances received

5,345

6,403

48,282Other current liabilities (Notes 20, 22 and 31)

1,316

1,941

11,891

38,96953,006

351,998

Long-term debt (Notes 20 and 31)

3,800

4,300

34,324Long-term accounts payable, other

5

5

52

Current portion of long-term debt (Notes 20 and 31)
Notes and accounts payable, trade (Note 20)
Income taxes payable (Note 24)

Total current liabilities$91,139

Long-term liabilities:

Accrued directors’ retirement benefits

58

41

526

Net retirement benefit liability (Note 23)

8,518

9,770

76,944

Asset retirement obligations

105

52

952

Deferred tax liabilities (Note 24)

570

2

5,152

Other long-term liabilities (Note 31)

115

85

1,047

Total long-term liabilities

13,174

14,258

118,998

52,144

67,264

470,996

Total liabilities
Contingent liabilities (Note 9)
Net assets:
Shareholders’ equity: (Note 16)
Common stock
Authorized- 72,000,000 shares

Issued- 29,977,106 shares

12,484

12,484

112,770

Additional paid-in capital

11,538

11,538104,220

Retained earnings

69,52277,359627,968(16,346)(16,376)(147,652)

77,19885,006697,307

3,749

2,334

33,868－0－Foreign currency translation adjustments

1,737

843

15,692Remeasurements of defined benefit plans (Note 23)(533)(1,165)(4,815)

4,953

2,012

44,74582,15287,018742,052¥134,296¥154,283$1,213,048

Treasury stock, at cost
(5,831,373 shares in 2021, 5,841,960 shares in 2020)
Total shareholders’ equity
Accumulated other comprehensive income
Unrealized holding gain on securities, net of tax (Note 21)
Deferred gains or losses on hedges (Note 22)

Total accumulated other comprehensive income
Total net assets (Note 30)
Total liabilities and net assets

See accompanying notes to financial statements.

3

CONSOLIDATED STATEMENT OF INCOMESHIABURA MACHINE CO., LTD. AND CONSOLIDATED SUBSIDIARIES
Year ended March 31, 2021
Thousands of
U.S. dollars(Note 3)

Millions of yen
2021

2020

2021

Net sales¥92,635¥116,761$836,738

Cost of sales (Note 12)67,73083,301

611,784

24,90433,459224,954

24,52229,930221,505

381

3,529

3,449

Interest and dividend income

271

556

2,453

Rent income

45

50

410

Foreign exchange income

348

76

3,152

Equity in earnings of affiliates

－

728

－

Subsidies for employment adjustment

677

－

6,120

Subsidy income

220

－

1,995

Gain on sales of property, plant and equipment

13

6

125

Gain on sales of shares of subsidiaries and affiliates (Notes 13 and 21)－

10,135－Gain on sales of investment securities (Note 21)

132

26

1,193

Others

282

271

2,556

1,993

11,851

18,004

Interest expense

84

81

764

Brand fee expense

0

124

1

655

862

5,923

78

103

711

Loss on valuation of shares of subsidiaries and affiliates (Note 21)

35

－

322

Loss on valuation of investment securities (Note 21)

－

311

－

Loss on impairment of fixed assets (Note 14)

371

19

3,355

Extra retirement payments (Note 15)

264

911

2,394

Others

615

318

5,562

2,107

2,732

19,033267

12,6482,420

Current

403

7,621

3,645

Deferred

2,762(2,312)

24,952

3,165

5,309

28,597Gross profit
Selling, general and administrative expenses (Notes 11 and 12)
Operating income
Other income:

Other expenses and losses:

Outsourcing expenses
Loss on disposal of property, plant and equipment
and intangible assets

Net income before income taxes
Income taxes (Note 24)

Net income (loss)(2,898)

7,338(26,178)

Net income (loss) attributable to owners of parent¥(2,898)¥7,338$(26,178)

See accompanying notes to financial statements.

4

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOMESHIABURA MACHINE CO., LTD. AND CONSOLIDATED SUBSIDIARIES
Year ended March 31, 2021
Thousands of
U.S. dollars(Note 3)

Millions of yen
2021
Net income (loss)

2020

2021

¥(2,898)¥7,338$(26,178)

1,415

(536)

12,785

(0)

0

(3)

Foreign currency translation adjustments

893

(867)

8,071

Remeasurements of defined benefit plans

632

(228)

(5,715)

－

77

－

2,941

(1,554)26,569¥43¥5,784$391

Owners of parent

43

5,784

391

Non-controlling interests

－

－

－

Other comprehensive income (loss): (Note 17)
Unrealized holding gain (loss) on securities, net of tax
Deferred gains or losses on hedges

Share of other comprehensive incomeof affiliates accounted for using equity method
Total other comprehensive income (loss)
Comprehensive income
Comprehensive income attributable to:

See accompanying notes to financial statements.

5

CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETSSHIABURA MACHINE CO., LTD. AND CONSOLIDATED SUBSIDIARIES
Year ended March 31, 2021
Millions of yen
Number of
SharesBalance at April 1, 2019

29,907,106

Common stock

Additional
paid in capital¥12,484¥11,538

Retainedearnings

Treasury stock¥71,983

Net income attributable to owners of parent¥(16,375)¥0¥1,711Remeasurements of defined
Total net assets
benefit plans¥(988)(1)(1,930)Decrease by merger(1,930)

(31)

(31)

Net changes in items other than shareholders’ equity
29,907,106

12,484

11,53877,359Net loss attributable to owners of parent(16,376)

(510)

0

(867)

(176)

(1,554)

2,344

0

843

(1,165)87,018(2,898)Purchases of treasury stock(2,898)(0)Cash dividends(0)(4,931)

Restricted stock compensation(4,931)(7)

30¥69,522¥(16,346)

Net changes in items other than shareholders’ equity
29,977,106¥12,484¥11,538¥83,197
7,338(1)

Cash dividends

Balance at March 31, 2021

¥2,844

Translation
adjustments

7,338

Purchases of treasury stock

Balance at March 31, 2020

Unrealized gain Deferred gains
on securities,
or losses on
net of tax
hedges

22
1,415

(0)

893

632

2,941

¥3,749¥－¥1,737¥(533)¥82,152

Unrealized gain Deferred gains
on securities,
or losses on
net of tax
hedgesTranslation
adjustments

Thousands of U.S. dollars (Note 3)

Balance at March 31, 2020

Common stock

Additional
paid in capital$112,770$104,220

Retainedearnings$698,759

Net loss attributable to owners of parent

Treasury stock$(147,921)$3$7,621$(10,530)(26,178)

Purchases of treasury stock(6)(44,542)

Restricted stock compensation(44,542)

(72)

275

$627,968$(147,652)

Net changes in items other than shareholders’ equity$112,770$104,220$786,004(26,178)(6)

Cash dividends

Balance at March 31, 2021

$21,083

Remeasurements of defined
Total net assets
benefit plans

203
12,785

(3)

8,071

5,715

26,569$33,868$－$15,692$(4,815)$742,052

See accompanying notes to financial statements.

6

CONSOLIDATED STATEMENT OF CASH FLOWSSHIABURA MACHINE CO., LTD. AND CONSOLIDATED SUBSIDIARIES
Year ended March 31, 2021
Thousands of
U.S. dollars(Note 3)

Millions of yen
2021

2020

2021

Operating activities:
Net income before income taxes¥267¥12,648$2,420¥1,755¥1,781

15,857

Loss on impairment of fixed assets

371

19

3,355

Extra retirement payments

264

911

2,394

Allowance for doubtful receivables

249

662

2,257

Provision for bonuses

1,096

－

9,906

Warranty reserve

(128)

115

(1,163)

Directors’ retirement benefit

16

8

151

Net defined benefit liability

(618)

66

(5,591)

Interest and dividend income

(271)

(556)

(2,453)

81

81

737

Adjustments to reconcile net income
before income taxes to net cash provided by operating activities:
Depreciation

Interest expense
Gain on sales of investment securities

(132)

(26)

(1,193)Gain on sales of shares of subsidiaries and affiliates－(10,135)－

Loss on valuation of investment securities

－

311

－

Loss on valuation of shares of subsidiaries and affiliates

35

－

322

64

96

586

－

(728)

－

Notes and accounts receivable, trade

8,382

1,341

75,715Inventories

6,868

6,023

62,038Notes and accounts payable, trade(3,616)(6,973)(32,668)

Advances received(1,058)(1,438)(9,560)Accrued expenses(3,003)495(27,127)

Others(1,587)997(14,336)

Sub total

9,039

5,702

81,648Interest and dividend income received

271

827

2,454

Interest paid

(88)

(80)

(798)

Income taxes paid

(7,857)(1,137)(70,975)

Extra retirement payments(1,172)－(10,589)

192

5,312

1,739

Gain or loss on sales and disposalof property, plant and equipment and intangible assets
Equity in earnings of affiliates
Changes in operating assets and liabilities:

Net cash provided by (used in) operating activities

7

Thousands of
U.S. dollars(Note 3)

Millions of yen
2021

2020

2021

Investing activities:
Purchases of property, plant and equipment(1,545)

Proceeds from sales of property, plant and equipment(1,424)(13,956)

16

13

149

Purchases of intangible assets

(219)

(92)

(1,980)

Proceeds from sales of investment securities

320

208

2,892

Purchase of shares of subsidiaries and affiliates

－

(98)

－

Proceeds from sales of shares of subsidiaries and affiliates－

21,525－

Payments for investments in capital of subsidiaries and affiliates

－

(379)

－

(Increase) decrease in short-term loans receivable

(16)

(3)

(151)

6

3

59

(99)

20

(900)

(1,537)

19,772(13,888)

(0)

(1)

(6)

(4,931)(1,930)(44,542)

(24)

(33)

(225)

(4,956)(1,964)(44,772)

Collection of long-term loans receivable
OthersNet cash provided by (used in) investing activities
Financing activities:
Purchases of treasury stock
Cash dividends paid
OthersNet cash used in financing activities
Effect of exchange rate changes on cash and cash equivalents

708

(701)

6,396

Net increase (decrease) in cash and cash equivalents(5,593)

22,419(50,524)

Cash and cash equivalents at beginning of year

48,011

25,592433,668

Cash and cash equivalents at end of year (Note 18)¥42,417¥48,011$383,144

See accompanying notes to financial statements.

8

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SHIBAURA MACHINE CO., LTD. AND CONSOLIDATED SUBSIDIARIES

1.

Basis of Presenting Consolidated Financial Statements

The accompanying consolidated financial statements of SHIBAURA MACHINE CO., LTD. (the “Company”) and its
consolidated subsidiaries (collectively, the “Companies”) are prepared on the basis of accounting principles generally
accepted in Japan, which are different in certain respects as to the application and disclosure requirements of International
Financial Reporting Standards, and are compiled from the consolidated financial statements prepared by the Company as
required by the Financial Instruments and Exchange Law of Japan. The preparation of these consolidated financial
statements requires management to make estimates and assumptions that affect the reported amounts of assets andliabilities and disclosure of contingent assets and liabilities at the fiscal year end and the reported amounts of revenues andexpenses during the reporting period. Actual results could differ from these estimates.
Certain reclassifications and rearrangements have been made to the consolidated financial statements issued domesticallyin order to present them in a form that is more familiar to readers outside of Japan. In addition, the notes to theconsolidated financial statements include information which is not required under accounting principles generally acceptedin Japan but is presented herein as additional information.

2.

Summary of Significant Accounting Policies(a) Basis of consolidation and accounting for investments in unconsolidated subsidiaries and affiliates
The consolidated financial statements include the accounts of the Companies.
All significant intercompany transactions and accounts and unrealized intercompany profits among consolidated entities
are eliminated in consolidation.
Unconsolidated subsidiaries and affiliates not accounted for by the equity method are stated at cost.
(b) Translation of foreign currencies
Monetary assets and liabilities denominated in foreign currencies are translated into Japanese yen at the exchange rate
prevailing at the balance sheet date, except for those perfectly hedged by forward contracts, which are translated using thecontracted rate.
The foreign exchange gains and losses from translation are recognized in the consolidated statement of income to theextent that they are not hedged by foreign exchange derivatives.
All assets and liabilities of foreign consolidated subsidiaries are translated at the current rates at the respective balance
sheet dates, except for components of shareholders’ equity which are translated at their historical rates. The revenue andexpense accounts of foreign consolidated subsidiaries are translated at the current rates at the respective balance sheet
dates. Differences arising from translation are recognized directly in foreign currency translation adjustments in net assets.
(c) Securities
Marketable securities classified as other securities are carried at fair value with any changes in unrealized holding gain or
loss, net of income taxes, directly included in net assets.
Non-marketable securities classified as other securities are carried at cost. Cost of securities sold is determined by themoving average method.
(d) Inventories
Finished products and work in process are stated at the lower of cost, determined by the individual identification method,or their net realizable value. Raw materials and supplies are stated at the lower of cost, determined by the moving averagemethod, or their net realizable value.
(e) Allowance for doubtful receivables
The allowance for doubtful receivables is stated at the amount determined based on the default ratio sustained over a
specific period in the past and the estimated uncollectible amount determined based on the analysis of certain individual
accounts, including probable bad debt and claims in bankruptcy.
(f)Warranty reserve

Warranty reserve is provided for warranty costs to be incurred during the warranty period based on historical experience.
9

(g) Employee bonuses
The bonuses paid to the employees are accrued based on the estimated amounts incurred and to be paid in thesubsequent period.
(h) Depreciation of property, plant and equipment (excluding leased assets)
Depreciation of buildings is principally computed by the straight-line method, facilities attached to buildings and othernon-building structures acquired on or after April 1, 2016 is computed by the straight-line method and depreciation ofother property, plant and equipment is computed by the declining balance method over the estimated useful lives ofrespective assets, principally ranging from 3 to 60 years for buildings and structures, and from 3 to 22 years for machinery,equipment and vehicles.
(i)

Amortization of intangible assets
Computer software held for internal use is amortized by the straight-line method over the corresponding economic usefullife (5 years). Other intangible assets, including patent rights, are amortized by the straight-line method over the estimateduseful lives of respective assets.
(j)Leased assets

Leased assets under finance lease transactions that do not transfer ownership to the lessee are depreciated by thestraight-line method over the lease term with no residual value.
(k) Derivative financial instruments
All derivatives are stated at fair value. Gains or losses arising from changes in fair value are charged or credited to income
for the period in which they arise, except for derivatives that are designated as hedging instruments. Gains or losses arisingfrom changes in fair value of the derivatives designated as cash flow hedging instruments, net of the applicable income
taxes, are reported as a component of net assets.
(l)

Income taxes
The Companies accrue current income taxes based on taxable income.
The Companies recognize a number of temporary differences for financial reporting purposes, which, in the case of

expenses, are not currently deductible and in the case of income, are not currently taxable.
Income tax effects on such temporary differences between tax and financial reporting purposes are reflected as deferredincome taxes in the consolidated financial statements using the asset and liability method.
(m) Employees’ retirement benefits
Accrued employees’ retirement benefits are provided based on the projected retirement benefit obligation and the fairvalue of plan assets at fiscal year-end.
The retirement benefit obligation for employees is attributed to each period by the benefit formula method.
Actuarial gain or loss is amortized in the following year in which the gain or loss is recognized primarily by the straightline method over a period (10 years), which is shorter than the average remaining years of service of the employees.
(n) Directors’ retirement benefits
Domestic consolidated subsidiaries accrue an estimated amount calculated in accordance with internal rules for
retirement benefits for directors and corporate auditors.
(o) Amounts per share of common stock
Net income per share is computed based on the weighted-average number of shares of common stock outstanding
during a year.
Diluted net income per share is not presented since the Company has never issued any securities with dilutive effect, suchas bonds with warrants and convertible bonds. Cash dividends per share represent the actual amount declared as applicableto the respective years.

10(p) Cash equivalents
In preparing the consolidated statement of cash flows, cash on hand, readily available deposits and short-term highly
liquid investments with maturities of not exceeding three months at the time of purchase are considered to be cash andcash equivalents.
(q) Application of tax effect accounting for transition from consolidated taxation system to group tax sharing
systemThe Company and its domestic consolidated subsidiaries have calculated the amounts of deferred tax assets and deferred
tax liabilities according to the tax acts before amended, for items for which the non-consolidated taxation system has beenreviewed in line with the transition to the group tax sharing system, based on the treatment of Paragraph 3 of “Practical
Solution on the Treatment of Tax Effect Accounting for the Transition from the Consolidated Taxation System to the GroupTax Sharing System” (ASBJ Practical Issues Task Force No.39, March 31, 2020) instead of applying the provision on Paragraph
44 of “Implementation Guidance on Tax Effect Accounting“ (ASBJ Guidance No.28, February 16, 2018), regarding thetransition to group tax sharing system established in “Act for Partial Amendment of the Income Tax Act, etc.” (Act No.8 of2020).

3.

U.S. Dollar Amounts

U.S. dollar amounts are included solely for the convenience of the readers and have been translated at the rate of¥110.71=U.S.$1, the approximate exchange rate prevailing in the Japanese foreign exchange market on March 31, 2021. Thistranslation should not be construed as a representation that the yen amounts actually represent, have been, or could be
converted into U.S. dollars.

4.

Accounting Estimates

Recoverability of deferred tax assets(a) Amount recorded in the consolidated financial statements for the fiscal year
Millions of yen

Thousands of
U.S. dollars

2021

2021

Deferred tax assets (Balance Sheet amount)¥409$3,694

Deferred tax assets (Before offsetting)

2,408

21,751

Deferred tax liabilities (Balance Sheet amount)

570

5,194

Deferred tax liabilities (Before offsetting)

2,569

23,205(b) Information about the contents of accounting estimates related to the identified items①Method of calculation
Determination of recoverability of deferred tax assets is made for the deductible temporary differences and the unused
portion of tax loss carry forwards using taxable income based on future profitability. For the estimate of taxable income, thetiming and amount of future taxable income is reasonably estimated and calculated based on the next fiscal year’s business
plan.
②Key assumptions
When determining the appropriateness of taxable income before temporary differences based on future profitability, anestimate is made of the taxable income for the fiscal year in which the reversal of temporary differences, etc. is expected.
Taxable income is based on the business plans of the next fiscal year for each of the Group’s companies, and such businessplans are prepared by forecasting the timing of realization of backlog of orders for each product and the status of orders
received for the next fiscal year. Moreover, it is assumed that March 31, 2021 was the time of peak impact from COVID-19
and demand will follow a trend of gradual recovery.
③Impact on the consolidated financial statements for the following fiscal year
In the forecast of the timing of realization of order backlog and the status of orders received for the next fiscal year, whichconstitutes a major assumption, there is a risk of a material impact on the determination of the recoverability of deferred tax
assets resulting from changes in the estimate for taxable income due to uncertainties regarding the estimates due to theimpact of future uncertain economic conditions in such events as declines in sales volumes and falls in unit prices of certain

11

products that exceed beyond expectations owing to manifestation of geopolitical risks, or a re-expansion of the impact of
COVID-19.

5.

Accounting Standards Issued but Not yet Effective

Accounting Standard for Revenue Recognition(ASBJ Statement No.29 on March 31, 2020)
Implementation Guidance on Accounting Standard for Revenue Recognition(ASBJ Guidance No.30 on March 26, 2021)
Implementation Guidance on Disclosures about Fair Value of Financial Instruments(ASBJ Guidance No.19 on March 31, 2020)(a) Outline
This is a comprehensive accounting standard for revenue recognition. Specifically, the accounting standard establishes thefollowing five-step model that will apply to revenue from contracts with customers:① : Identify the contract(s) with a customer② : Identify the performance obligations in the contract③ : Determine the transaction price④ : Allocate the transaction price to the performance obligations in the contract⑤ : Recognize revenue when (or as) the entity satisfies a performance obligation(b) Scheduled date of adoption
The Company expects to adopt the accounting standards and related implementation guidance from the beginning of the
fiscal year ending March 31, 2022.
(c) Impacts of the adoption of accounting standard and implementation guidance
The impacts on the Company’s consolidated financial statements from the adoption of this accounting standard andimplementation guidance are being evaluated at the time of the preparation of consolidated financial statements.
Accounting Standard for Fair Value Measurement(ASBJ Statement No.30 on July 4, 2019)
Accounting Standard for Measurement of Inventories(ASBJ Statement No.9 on July 4, 2019)
Accounting Standard for Financial Instruments(ASBJ Statement No.10 on July 4, 2019)
Implementation Guidance on Accounting Standard for Fair Value Measurement(ASBJ Guidance No.31 on July 4, 2019)
Implementation Guidance on Disclosures about Fair Value of Financial Instruments(ASBJ Guidance No.19 on March 31, 2020)(a) Outline
The ASBJ has developed an “Accounting Standard for Fair Value Measurement” and “Implementation Guidance on
Accounting Standard for Fair Value Measurement” (hereinafter collectively, the “Fair Value Measurement Standard”), which
provide guidance for fair value measurement in order to improve comparability with internationally recognized accounting
standards. The Fair Value Measurement Standard is applied with respect to the fair value of the following items;• Financial instruments defined in “Accounting Standard for Financial Instruments”• Inventories held for trading purposes defined in “Accounting Standard for Measurement of Inventories”(b) Scheduled date of adoption
The Company expects to adopt the accounting standards and related implementation guidance from the beginning of the
fiscal year ending March 31, 2022.
(c) Impacts of the adoption of accounting standard and implementation guidance
The impacts on the Company’s consolidated financial statements from the adoption of this accounting standard andimplementation guidance are being evaluated at the time of the preparation of consolidated financial statements.

12

6.

Changes in Presentation

Adoption of Accounting Standard for Disclosure of Accounting Estimates
The Companies have adopted the “Accounting Standard for Disclosure of Accounting Estimates” (ASBJ Statement No.31,
March 31, 2020). Therefore, the Companies noted accounting estimates in the consolidated financial statements. However,the details related to the fiscal year ending March 31, 2020 are not included in the notes, in accordance with the transitional
treatment prescribed in the proviso of paragraph 11 of the accounting standard.

7.

Property, Plant and Equipment

Property, plant and equipment at March 31, 2021 and 2020 consisted of the following:Thousands of
U.S. dollars

Millions of yen
2021

2020

2021

Land

¥7,098¥7,049$64,116

Buildings and structures

39,25239,014

354,549

Machinery and equipment

24,13423,938217,995

287

286

2,595

7,238

7,327

65,386

Lease assets

264

240

2,392

Construction in progress

474

135

4,289

Sub total

78,75077,991

711,322

Less accumulated depreciation(57,991)(57,450)(523,815)

Property, plant and equipment, net¥20,758¥20,541$187,507

VehiclesTools, furniture and fixtures

Depreciation expenses for the years ended March 31, 2021 and 2020 were ¥1,755 million ($15,857 thousand) and ¥1,781
million, respectively.

8.

Intangible Assets

Intangible assets at March 31, 2021 and 2020 consisted of the following:Thousands of
U.S. dollars

Millions of yen
2021

2020

2021

Others¥571¥561$5,161

Total

¥571

¥561

$5,161

9.

Contingent Liabilities

As of March 31, 2021, contingent liabilities for loans guaranteed by the Company, principally on behalf of nonconsolidated subsidiaries and affiliated companies, amounted to ¥777 million ($7,026 thousand).

10. Commitment Line
The Company has concluded commitment line contracts with three financial institutions in order to ensure that it cansafely and flexibly meet any demand for funds. The balance of unused committed lines under these contracts at the end of
the fiscal year was as follows:
Thousands of
U.S. dollars

Millions of yen
2021
Total amount of commitment line

2020

2021

¥20,000¥10,000$180,652

Funds borrowed

－

－

－

Unused amount¥20,000¥10,000$180,652

13

11. Selling, General and Administrative Expenses
Major components of selling, general and administrative expenses for the years ended March 31, 2021 and 2020 were as
follows:
Thousands of
U.S. dollars

Millions of yen
2021

2020

2021

Sales commission¥1,223¥1,486$11,049

Shipping expenses

2,842

3,595

25,675

491

625

4,435

Provision for warranty reserve
Personnel-expenses

11,195

11,914

101,129

Retirement benefit expenses

684

652

6,180

Depreciation

738

746

6,672

Rent expenses

911

804

8,237

Travel expenses

561

1,238

5,074

1,404

1,682

12,687

468

588

4,235

Others

4,000

6,596

36,130

Total¥24,522¥29,930$221,505

Research and development expenses
Subcontract expenses

12. Research and Development Costs
Research and development costs charged to income were ¥2,218 million ($20,037 thousand) and ¥2,378 million for theyears ended March 31, 2021 and 2020, respectively.

13. Gain or loss on sales of shares of subsidiaries and affiliates
For the year ended March 31, 2020, the Company sold all of its shares in NuFlare Technology, Inc., which was accounted
for under the equity method.

1414. Loss on Impairment of Fixed Assets
The Companies accounted for impairment losses for the year ended March, 31 2020 as follows:
Millions of yen
2020
Zama, Kanagawa, Japan:
Idle property (company housing)
Buildings and structures

¥19

Total

¥19

Grouping of assets is based on the business units, except for idle assets, which are grouped individually.
The Company wrote down the carrying amount of idle assets to the recoverable amount and recognized loss on
impairment of fixed assets ¥19 million in the consolidated statement of income for the year ended March 31, 2020.
The recoverable amount of the assets is measured at the net selling value, which is calculated based on the memorandum
value.
The Companies accounted for impairment losses for the year ended March, 31 2021 as follows:
Thousands ofMillions of yen
U.S. dollars
2021

2021

Rayong, Thailand:Business assets
Buildings and structures¥346$3,128

Machinery, equipment and vehicles

7

68

Other property , plant and equipment

16

153

Other intangible assets

0

7

¥371

$3,355

Total(a) Back ground to the recognition of impairment loss

The carrying amount of the asset group of SHIBAURA MACHINE MANUFACTURING (THAILAND) CO., LTD. (Located in
Rayong, Thailand) was reduced to the recoverable amount because the estimated future cash flow obtainable from that
asset group fell below the carrying amount, and the amount of reduction was recorded as impairment loss under otherexpenses and losses.
(b) Asset grouping method
The Company, in principle, classifies groups of business assets using a company as the basis unit, and the business assetsof each of its consolidated subsidiaries are treated as one asset group.
For its idle assets, the Company groups each asset individually.
Up until present, the Company had grouped its business assets using a business division as the basis unit. However, since
carrying out organizational restructuring following the adoption of the in-house company system, the Company haschanged to group its business assets in line with the in-house company system as the basis unit from the fiscal year.
(c) Method of computing the recoverable amountThe net selling value is the recoverable amount used in measurement of impairment loss. The net selling value iscalculated based on the real estate appraisal value.

15. Extra retirement payments
Extra retirement payments for the year ended March 31, 2021 and 2020 include special additional retirement bonuses andother expenses with the implementation of the voluntary retirement measures.

15

16. Shareholders’ Equity
The Corporation Law of Japan (the “Law”), which went into effect on May 1, 2006, provides that an amount equal to 10%of the amount to be distributed as distribution of additional paid in capital (other than the capital reserve) and retained
earnings (other than the legal reserve) be transferred to the capital reserve and legal reserve, respectively, until the sum of
the capital reserve and legal reserve equals 25% of the common stock account. Such distributions can be made at any timeby resolution of the shareholders or by the Board of Directors if certain conditions are met, but neither the capital reserve
nor the legal reserve is available for distributions.

17. Other Comprehensive Income
The components of other comprehensive income (loss) for the years ended March 31, 2021 and 2020 were as follows:
Thousands ofMillions of yen
U.S. dollars
2021

2020

2021

Unrealized holding gain (loss) on securities:
Current period changes in unrealized gain (loss)¥2,137¥(906)$19,308

(132)

176

(1,193)

2,005

(730)

18,115(590)

193(5,330)

1,415

(536)

12,785

(0)

0

(4)

(0)

0

(4)

0

(0)

1

(0)

0

(3)

Current period changes

914

(867)

8,264

Reclassification adjustment

(21)

－

(192)

893

(867)

8,071

Current period changes in remeasurements of defined benefit plans

432

(355)

3,905

Reclassification adjustment

200

127

1,810

632

(228)

5,715

－

－

－

632

(228)

5,715

Current period changes

－

15

－

Reclassification adjustment

－

61

－

－

77

－

¥2,941¥(1,554)$26,569

Reclassification adjustment
Total unrealized holding gain (loss) on securities before tax effects

Tax effects
Unrealized holding gain (loss) on securities, net of tax effects
Deferred gains or losses on hedges
Current period changes
Total deferred gains or losses on hedges before tax effects
Tax effects
Deferred gains or losses on hedges, net of tax effects
Foreign currency translation adjustments:

Total Foreign currency translation adjustments
Remeasurements of defined benefit plans

Total remeasurements of defined benefit plans before tax effectTax effects
Remeasurements of defined benefit plans, net of tax effects
Share of other comprehensive income of affiliates accounted forusing equity method

Share of other comprehensive income of affiliates accounted
for using equity method
Total other comprehensive income (loss)

16

18. Cash Flow Information
Cash and Cash Equivalents
The reconciliation between cash and deposits in the accompanying consolidated balance sheet and cash and cash
equivalents in the accompanying consolidated statement of cash flows at March 31, 2021 and 2020 were as follows:
Thousands ofMillions of yen
U.S. dollars
2021
Cash and deposits

2021¥42,417¥47,907$383,144

－

104

－

¥42,417¥48,011$383,144

Marketable securities
Cash and cash equivalents

2020

19. Leases
This disclosure has been omitted for the year ended March 31, 2021 based on immateriality.

20. Financial Instruments
Overview(a)

Policy for financial instruments

The Companies invest in short-term deposits for fund management, where temporary cash surplus is invested in low-risk
financial instruments. The Companies raise funds through bank borrowings. The Companies use derivatives only to reducerisk, and do not enter into derivative transactions for speculative trading purposes.
(b) Financial instruments, related risk and risk management system
Operating receivables, such as notes and accounts receivable, trade are exposed to customer credit risk. The Companies
try to reduce this risk by adhering to their sales management rules. Investments, consisting of marketable securities ofcorporations, are exposed to stock price fluctuation risk in the market. To address this risk, the Companies review stock
prices in every quarter. Operating payables, such as notes and accounts payable, trade are mainly due within six months.
Borrowings are mainly used in for normal operations and capital investments. The maturity of borrowings is up to three
years from the balance sheet date at the maximum.
Derivative transactions consist of foreign exchange forward contracts, etc. used for the purpose of hedging foreignexchange risk associated with certain assets and liabilities denominated in foreign currencies. These derivative transactions
are managed under the internal management policies, to the extent deemed necessary. Note 22, “Derivative Financial
Instruments,” provides more information on hedge accounting, hedging instruments and methods, hedging policy, hedged
items and assessments of hedge effectiveness.
The Finance Department of the Companies prepares and updates its cash flow plan to manage liquidity risk. A part ofbank borrowings are subject to terms of financial covenants. If the Companies violate the terms of the financial covenants,
the terms of the borrowings may be possibly revised.
The terms of the financial covenants related to a syndicated loan contract (¥4,000 million ($36,130 thousand) at March 31,2021) are as follows:① At March 31 and September 30 every year, the Company must maintain net assets in the consolidated balance sheetover ¥57,840 million ($522,446 thousand).
② In the consolidated statement of income for the fiscal year ending March 31, the Company must not record operating
loss for two consecutive years.
(c)Supplemental information on the fair value of financial instruments

Fair value of financial instruments is calculated based on market prices, or by using reasonable estimates when market
prices are not available. These estimates include variable factors, and are subject to fluctuation due to a change inunderlying assumptions. The contract amounts of derivatives presented in Note 22, “Derivative Financial Instruments,” below
do not represent the actual market risk associated with derivative transactions.

17Fair value of financial instruments
Carrying value of financial instruments as of March 31, 2021 and 2020, and their fair value were as follows:(Financial instruments whose fair value was extremely difficult to determine were not included.)Year ended March 31, 2021

Millions of yen
Carrying value

Fair value

Difference

Cash and deposits¥42,417¥42,417¥－

Notes and accounts receivable, trade27,682

27,6820Marketable securities and investment securities

7,513

7,513

－

Total assets¥77,613¥77,613¥0

Short-term bank loans¥10,090¥10,090¥－

Notes and accounts payable, trade17,613

17,613－Long-term debt including current portion

4,300

4,309

9

¥32,003¥32,012

¥9

¥(4)

¥(4)

¥－

Total liabilities
Derivatives
Year ended March 31, 2020

Millions of yen
Carrying value

Fair value

Difference

Cash and deposits¥47,907¥47,907¥－

Notes and accounts receivable, trade

36,06436,064(0)Marketable securities and investment securities

5,799

5,799

－

Total assets¥89,771¥89,771¥(0)

Short-term bank loans¥10,090¥10,090¥－

Notes and accounts payable, trade21,27921,279－Long-term debt including current portion

4,300

4,309

9

¥35,669¥35,678

¥9

¥0

¥0

¥－

Total liabilities
Derivatives
Year ended March 31, 2021

Thousands of U.S. dollars

Carrying value

Fair value

Difference$－

Cash and deposits$383,144$383,144

Notes and accounts receivable, trade

250,045

250,049

4

Marketable securities and investment securities

67,86367,863－

Total assets$701,051$701,055$4

Short-term bank loans$91,139$91,139$－

Notes and accounts payable, trade

159,093

159,093－Long-term debt including current portion

38,84038,92484$289,072$289,156

$84

$(45)

$(45)

$－

Total liabilities
Derivatives
Note:
(a)

Derivatives are presented as net amounts receivable or payable with net amounts payable in parentheses.

Method for calculating fair value of financial instruments, short-term investments and derivative transactions①Cash and deposits
The carrying value approximates fair value because these are due within the short-term.
②Notes and accounts receivable, trade
The fair value of notes and accounts receivable, trade is determined by discounting classified based on certain terms andestimated amount to be received which reflects credit risk, using highly secure interest rates for the remaining period except
for those are settled in the short terms.
③Marketable securities and investment securities
Investment securities are listed shares, and based on quoted market prices. Marketable securities are mutual fund, andbased on quoted financial institutions.
18

④Short-term bank loans; ⑤Notes and accounts payable, trade
The carrying value approximates fair value because these are due within the short-term.
⑥Long-term debt including current portion
The fair value of long-term debt is determined based on the present value of the principal and interest, discounted by theinterest rate that would be applied if similar new borrowings were entered into.
⑦Derivatives
Please refer to Note 22, “Derivative Financial Instruments”(b) Financial instruments whose fair value was extremely difficult to determine at March 31, 2021 and 2020 wereas follows:
Thousands of
U.S. dollars

Millions of yen
2021

2020
¥828

Investment securities for which the market prices are not available

2021
¥864

$7,486

Market prices are not available for these items, or the cost of estimating future cash flow is considered prohibitive. As aresult, these items are not included in ③Marketable securities and investment securities in the above table, because theirfair value is not readily determinable.
(c)

The aggregate annual maturities of financial assets at March 31, 2021 and 2020 were as follows:Year ended March 31, 2021

Millions of yen
Due after one year Due after five years
Due within one year
Due after ten years
through five years through ten years

Cash and deposits¥42,413

¥－

¥－

¥－

Notes and accounts receivable, trade27,647

35

－

－

－

－

－

－

¥35

¥－

¥－

Marketable securities and investment securities:

Mutual Fund
Total

¥70,060

Year ended March 31, 2020

Millions of yen
Due after one year Due after five years
Due within one year
Due after ten years
through five years through ten years

Cash and deposits
Notes and accounts receivable, trade

¥－

¥－

¥－

35,733

330

－

－

104

－

－

－

¥330

¥－

¥－

¥47,902

Marketable securities and investment securities:

Mutual Fund
Total

¥83,740

Year ended March 31, 2021

Thousands of U.S. dollars
Due after one year Due after five years
Due within one year
Due after ten years
through five years through ten years

Cash and deposits
Notes and accounts receivable, trade

$－

$－

$－

249,727

318

－

－

－

－

－

－

$632,832

$318

$－

$－

$383,105

Marketable securities and investment securities:

Mutual Fund
Total

19

(d) Annual maturities of short-term bank loans and long-term debt
Year ended March 31, 2021

Short-term bank loans
Long-term debt
Total

Millions of yen
Due within one
year

Due after one
year throughtwo years

Due after two
years throughthree years

Due after three
years throughfour years

Due after four
years throughfive years

Due after fiveyears

¥10,090

¥－

¥－

¥－

¥－

¥－

500

500

3,300

－

－

－

¥10,590¥500¥3,300¥－¥－¥－Due within one
year

Due after one
year throughtwo years

Due after two
years throughthree years

Due after three
years throughfour years

Due after four
years throughfive years

Due after fiveyears

¥10,090

¥－

¥－

¥－

¥－

¥－

－

500

3,300

3,300

－

－

¥10,090

¥500

¥500

¥3,300¥－¥－Due within one
year

Due after one
year throughtwo years

Due after two
years throughthree years

Due after three
years throughfour years

Due after four
years throughfive years

Due after fiveyears

$91,139

$－

$－

$－

$－

$－

4,516

4,516

29,808－－－$95,655$4,516$29,808

$－

$－

$－

Year ended March 31, 2020

Short-term bank loans
Long-term debt
Total

Millions of yen

Year ended March 31, 2021

Short-term bank loans
Long-term debt
Total

Thousands of U.S. dollars

21. Securities
Information regarding marketable securities classified as other securities included in investment securities were as follows:
Millions of yen

Year ended March 31, 2021
Acquisition cost

Carrying value

Unrealized gains¥2,196¥7,513¥5,316¥2,196¥7,513¥5,316Equity securities

Millions of yen

Year ended March 31, 2020
Acquisition cost

Carrying value

Unrealized gains¥2,384¥5,695¥3,311¥2,384¥5,695¥3,311Equity securities

Thousands of U.S. dollars

Year ended March 31, 2021

Acquisition cost

Carrying value

Unrealized gains$19,839$67,863$48,024$19,839$67,863$48,024

Equity securities

Proceeds from sales and gain on sales of investment securities classified as other securities were ¥320 million ($2,892
thousand) and ¥132 million ($1,193 thousand) for the year ended March 31, 2021, and ¥21,570 million and ¥10,162 million
for the year ended March 31, 2020, respectively.
Loss on valuation of shares of subsidiaries and affiliates classified as other securities was ¥35 million ($322 thousand) for
the year ended March 31, 2021. In the recognition of loss on valuation, writing down the carrying value to fair value when
the decline in fair value is deemed to be unrecoverable considering the financial position of the issuers of the securities.
Loss on valuation of investment securities classified as other securities was ¥311 million for the year ended March 31,
2020. In the recognition of loss on valuation, total impairment is recognized when the fair value at the end of the fiscal year
has fallen below 50% of the acquisition cost. When the fair value has fallen between 30% and 50%, an impairment of theamount deemed by taking into account recoverability etc. is recognized.
20

Mutual fund classified as marketable securities totaled ¥104 million as of March 31, 2020. Non-marketable equity
securities classified as other securities primarily consist of ¥84 million ($761 thousand) and ¥84 million as of March 31, 2021
and 2020, respectively.

22. Derivative Financial Instruments
The Companies have entered into derivative transactions (foreign exchange contracts) in order to manage certain risks
arising from adverse fluctuations in foreign currency exchange rates. The Company does not hold or issue derivative
financial instruments for the purpose of speculative trading. Derivative transactions are entered into by the Finance
Department under the rules approved by the Board of Directors. Derivative transactions are evaluated by the Corporate
Auditing Office.
Derivatives for which hedge accounting is not adopted at March 31, 2021 and 2020 were as follows:Year ended March 31, 2021

Millions of yen
Hedged item

Contract amountContract amountdue after one year

Unrealized gain
(loss)

Fair value

Forward foreign currency exchange contracts:
Foreign exchange contracts:
Sell: U.S. dollars
Buy: Japanese yen

Accounts receivable
Accounts payable

Total

¥－

¥－

181

－

(4)

(4)

¥181

¥－

¥(4)

¥(4)

Year ended March 31, 2020¥－¥－

Millions of yen
Hedged item

Contract amountContract amountdue after one year

Unrealized gain
(loss)

Fair value

Forward foreign currency exchange contracts:
Foreign exchange contracts:
Sell: U.S. dollars
Buy: Japanese yen

Accounts receivable

¥39

¥－

¥(2)

¥(2)

Accounts payable

158

－

2

2

¥198

¥－

¥0

¥0

Total
Year ended March 31, 2021

Thousands of U.S. dollars
Hedged item

Contract amountContract amountdue after one year

Unrealized gain
(loss)

Fair value

Forward foreign currency exchange contracts:
Foreign exchange contracts:
Sell: U.S. dollars

Accounts receivable

Buy: Japanese yen

Accounts payable

Total

21

$－

$－

$－

$－

1,641

－

(45)

(45)

$1,641

$－

$(45)

$(45)

Derivatives for which hedge accounting is adopted at March 31, 2021 and 2020 were as follows:
Millions of yen
Year ended March 31, 2021
Hedged item

Contract amountContract amountdue after one year

Fair value

Accounted for by the deferred hedge method:
Foreign exchange contracts:
Sell: U.S. dollars

Accounts receivable

¥－

¥－

¥－

Buy: U.S. dollars

Accounts payable

－

－

－

Sell: U.S. dollars

Accounts receivable

1,525

－

*

Buy: U.S. dollars

Accounts payable

－

－

－

¥1,525¥－¥－

Accounted for by the allocation method:
Foreign exchange contracts:

Total

Millions of yen

Year ended March 31, 2020
Hedged item

Contract amountContract amountdue after one year

Fair value

Accounted for by the deferred hedge method:
Foreign exchange contracts:
Accounts receivable

¥93

¥－

¥0

Accounts payable

－

－

－

Sell: U.S. dollars

Accounts receivable

2,267

－

*

Buy: U.S. dollars

Accounts payable

85

－

*

¥2,447¥－¥0

Sell: U.S. dollars
Buy: U.S. dollars
Accounted for by the allocation method:
Foreign exchange contracts:

Total

Thousands of U.S. dollars

Year ended March 31, 2021
Hedged item

Contract amountContract amountdue after one year

Fair value

Accounted for by the deferred hedge method:
Foreign exchange contracts:
Sell: U.S. dollars

Accounts receivable

$－

$－

$－

Buy: U.S. dollars

Accounts payable

－

－

－

$13,779

－

*

－

－

－

$13,779$－$－

Accounted for by the allocation method:
Foreign exchange contracts:
Sell: U.S. dollars
Buy: U.S. dollars

Accounts receivable
Accounts payable

Total
Note:

Foreign exchange contracts are accounted for using the allocation method, which is accepted under JGAAP as ashort cut method for foreign currency translation, as part of the accounts receivable and accounts payable.
Therefore, the fair value of foreign exchange contracts is included in the fair value of the underlying accounts
receivable.

2223. Employees’ Retirement Benefits(a) Overview
The Company and certain subsidiaries have funded defined benefit plans, i.e., lump-sum payment plans and defined
benefit pension plans, and defined contribution plans for employees. Certain overseas subsidiaries have unfunded defined
benefit plans for benefit payments to their employees.
Certain domestic subsidiaries participate in multiemployer pension plans. Multiemployer pension plans, in which pension
assets belonging to the Companies are not reasonably determinable, are accounted for as if those are defined contributionplans.
Certain domestic consolidated subsidiaries have adopted the simplified method in calculating their projected benefit
obligation.
(b) Defined benefit plans①The changes in the retirement benefit obligation during the years ended March 31, 2021 and 2020 were as follows:
Thousands ofMillions of yen
U.S. dollars
2021

2020

2021

¥14,457¥14,360$130,592

Service cost

898

918

8,116

Interest cost

0

0

7

Actuarial gain or loss

(46)

139

(416)

Retirement benefit paid

(1,949)(961)(17,605)¥13,362¥14,457$120,695

Retirement benefit obligation at beginning of year

Retirement benefit obligation at end of year

②The changes in pension plan assets during the year ended March 31, 2021 and 2020 were as follows:
Thousands of
U.S. dollars

Millions of yen
2021

2020

2021

Pension plan assets at beginning of year

¥4,687¥4,885$42,341

Expected return on pension plan assets

58

71

532

Actuarial gain or loss

386

(216)

3,489

Contribution by the Companies

185

202

1,680

Retirement benefit paid

(475)

(254)

(4,291)¥4,843¥4,687$43,750

Pension plan assets at end of year

③The following table sets forth the funded status of the plans and the amounts recognized in the consolidated balance
sheet as of March 31, 2021 and 2020 for the defined benefit plans
Thousands of
U.S. dollars

Millions of yen
2021

2020

2021

Funded retirement benefit obligation¥4,575¥4,886$41,329

Pension plan assets at fair value(4,843)(4,687)(43,750)

(268)

199

(2,422)

8,786

9,571

79,366balance sheet

8,518

9,770

76,944Retirement benefit liability

8,518

9,770

76,944¥8,518¥9,770$76,944

Unfunded retirement benefit obligation
Net retirement benefit liability recognized in the consolidated

Net retirement benefit liability recognized in the consolidatedbalance sheet

23

④The components of retirement benefit expense for the years ended March 31, 2021 and 2020 were as follows:
Thousands ofMillions of yen
U.S. dollars
2021
Service cost

2020
¥898

Interest assets

2021
¥918

$8,11600

7Expected return on pension assets

(58)

(71)

(532)

Actuarial gain or loss

200

127

1,810

¥1,040¥975$9,402Retirement benefit expense
Note:

Other than the retirement benefit expense above, ¥264 million ($2,394 thousand) and ¥911 million are posted in
extra retirement payments under other expenses and losses for the years ended March 31, 2021 and 2020,
respectively.

⑤Remeasurements of defined benefit plans included in other comprehensive income (before tax effect) for the years ended
March 31, 2021 and 2020 were as follows:
Thousands of
U.S. dollars

Millions of yen
2021

2020

2021

Actuarial gain or loss

¥632¥(228)$5,715

Total

¥632

¥(228)$5,715⑥Remeasurements of defined benefit plans included in accumulated other comprehensive income (before tax effect) as ofMarch 31, 2021 and 2020 were as follows:
Thousands of
U.S. dollars

Millions of yen
2021

2020

2021

Unrecognized actuarial loss

¥533

¥1,165$4,815

Total

¥533

¥1,165$4,815⑦The fair value of pension plan assets, by major category, as a percentage of total plan assets as of March 31, 2021 and2020 were as follows:
2021

2020

Domestic bonds

52%

53%

Domestic equity securities

12

11

Foreign bonds

14

15

Foreign equity securities

13

11

Insurance assets (General accounts)

7

8

Other

2

2

Total

100%

100%

The expected return on pension plan assets has been estimated based on the anticipated allocation to each asset classand the expected long-term returns on assets held in each category.
⑧The assumptions used in accounting for the above plans were as follows:
2021

2020

Discount rate

0.0%

0.0%

Expected rate of return on pension plan assets

1.2

1.5

Expected rate of salary increase

9.4

9.4

The expected rate of salary increase was the rate of increase points calculated using the age specific index of the expected
rate of salary increase under the retirement benefits point system.

24

(c) Defined contribution plans
The required contributions to defined contribution plans of the Company and certain domestic consolidated subsidiaries
for the years ended March 31, 2021 and 2020 were ¥159 million ($1,444 thousand) and ¥169 million, respectively.
(d) Multiemployer pension plans
The required contributions to the multiemployer pension plans for the years ended March 31, 2021 and 2020 were ¥30
million ($279 thousand) and ¥30 million, respectively.
①Funded status of the multiemployer pension plans as of the most recent calculation dates
Thousands of
U.S. dollars

Millions of yen
2021
Amount of pension assets

2020

2021

¥119,769¥127,216$1,081,833

pension financial calculation (Note)

136,406

141,568

1,232,109

Difference¥(16,637)¥(14,351)$(150,277)

Total amount of actuarial obligations and minimum reserve in the

Note: This item was presented as “Amount of obligations” in the previous fiscal year.
②The Companies’ portion of contributions in multiemployer pension plans
2021

2020

The Companies’ portion in the total contributions of themultiemployer plans

0.630%

0.612%The difference above was principally attributable to the differences in retained earnings of ¥(4,405) million ($(39,796)
thousand) and ¥(828) million in the pension financial calculation, at March 31, 2021 and 2020, respectively special reserve of¥2,524 million ($22,806 thousand) and ¥3,363 million at March 31, 2021 and 2020 and unrecognized prior service cost of¥14,756 million ($133,287 thousand) and ¥16,886 million at March 31, 2021 and 2020, respectively.
Prior service cost of the plans is amortized by the straight-line method over 20 years. The Companies paid and recognizedpremium contributions of ¥27 million ($249 thousand) and ¥31 million for amortization of prior service cost in the
consolidated financial statements for the years ended March 31, 2021 and 2020, respectively.
The Companies’ portion of contributions described above was not equal to the actual share to be allocated to theCompanies.

24. Income Taxes
Income taxes in Japan applicable to the Company and its domestic consolidated subsidiaries generally comprise
corporation, enterprise and prefectural and municipal inhabitants taxes. The statutory tax rates for both years ended March
31, 2021 and 2020 were approximately 29.9%, respectively.
The reconciliation between the statutory tax rate and effective tax rate for the years ended March 31, 2021 and 2020 wereas follows:
2021

2020

Statutory tax rate

29.9%

29.9%

Per-capita portion of inhabitant tax

13.1

0.3

Permanently non-deductible expenses

2.3

0.3

Permanently non-taxable revenue such as dividends income(29.0)(0.8)

1,087.5(0.2)

Effects of elimination in consolidation

2.4

25.6

Difference in statutory tax rates for foreign subsidiaries

5.0

0.1

Expiration of loss carryforward

41.1

0.9

Tax on pensions

18.4(12.1)

Others

11.2

(2.0)

1,181.9%

42.0%

Change in valuation allowance

Effective tax rate

25

The significant components of deferred tax assets and liabilities at March 31, 2021 and 2020 were as follows:
Thousands ofMillions of yen
U.S. dollars
2021

2020

2021

Deferred tax assets:
Tax loss carry forwards (Note)¥1,932¥256$17,459

402

322

3,632

Net defined benefit liability

2,347

2,589

21,200Devaluation of inventories

906

709

8,185

Unrealized intercompany profit on inventories

341

500

3,087

Provision for bonuses

375

－

3,391

Accrued employee’s bonuses

－

633

－

Devaluation of securities

175

257

1,583

Enterprise taxes payable

24

390

224

1,715

2,145

15,493¥8,220¥7,805$74,254

Allowance for doubtful receivables

Other
Total deferred tax assets
Valuation allowance of tax loss carry forwards (Note)(1,904)(256)(17,205)

Valuation allowance of deductible temporary difference(3,907)(2,642)(35,296)

Subtotal Valuation allowance(5,812)(2,899)(52,501)

Net deferred tax assets¥2,408¥4,905$21,753

Deferral of gain on sale of fixed assets

(84)

(87)

(761)

Unrealized holding gain on securities(1,567)(978)(14,156)

Deferred tax liabilities:

Asset retirement obligations

(24)

(5)

(223)

Foreign consolidated subsidiaries’ retained earnings

(728)

(678)

(6,576)Enterprise taxes receivable

(126)

(0)

(1,138)Others

(38)

(15)

(352)

¥(2,569)¥(1,765)$(23,206)¥(160)¥3,139$(1,453)

Total deferred tax liabilities
Net deferred tax assets

Note 1: The amount of valuation allowance increased by ¥2,913 million ($26,313 thousand) for the year ended March 31,
2021. This increase was mainly due to an increase of ¥1,629 million ($14,723 thousand) in valuation allowance fortax loss carryforwards at the Company.
Note 2: A breakdown of tax loss carryforwards and valuation allowance by expiry date as of March 31, 2021 and 2020 wereas follows:
Millions of yen

Tax loss carryforwards

Due in one
years or lessDue after one
year throughtwo years

¥65

¥17

2021
Due after two Due after three Due after four
year through year through year through After five years
three years
four years
five years
¥19

¥51

Total

¥45

¥1,733¥1,932

Valuation allowance

(65)

(17)

(19)

(51)

(45)

(1,705)(1,904)

Deferred tax assets

¥－

¥－

¥－

¥－

¥－

¥28

¥28

Millions of yen

Tax loss carryforwards

Due in one
years or lessDue after one
year throughtwo years

¥110

¥61

2020
Due after two Due after three Due after four
year through year through year through After five years
three years
four years
five years
¥16

¥18

¥50

¥－

¥256
(256)
¥－

Valuation allowance

(110)

(61)

(16)

(18)

(50)

－

Deferred tax assets

¥－

¥－

¥－

¥－

¥－

¥－

26

Total

Thousands of U.S. dollars
2021
Due after two Due after three Due after four
year through year through year through After five years
three years
four years
five years

Due in one
years or lessDue after one
year throughtwo years

Tax loss carryforwards

$588

$161

$173

$464

$412

$15,660$17,459

Valuation allowance

(588)

(161)

(173)

(464)

(412)

(15,406)(17,205)

Deferred tax assets

$－

$－

$－

$－

$－

$254

$254

Total

25. Business Combinations
There was no applicable matter for the years ended March 31, 2021.

26. Asset Retirement Obligations
This disclosure has been omitted for the year ended March 31, 2021 based on immateriality.

27. Rental Property
This disclosure has been omitted for the year ended March 31, 2021 based on immateriality.

28. Segment Information(a) General information about reportable segments
The reportable segments of the Companies are the business units for which the Company is able to obtain respective
financial information separately in order for Board of Directors to conduct periodic assessments to determine distribution ofmanagement resources and evaluate their business results.
The Companies’ business is classified into certain segments based on the types of products and services. The Companies’
segments are categorized into the following three reportable segments: “Molding Machinery”, “Machine Tools” and “Control
Systems” based on the similarities of the economic nature, type of business and manufacturing method:
Molding Machinery:

Injection molding machines, Die casting machines, Plastic extrusion

Machine Tools:

Large size machine tools, Portal type machine tools, Machining centers, Horizontal boringmachines, High-precision machines

Control Systems:

Controller, Industrial robot, Servo motor, Servo amplifier(b) Basis of measurement for reportable segment profit or loss, segment assets and other material items
The accounting treatment for the reportable business segments is generally the same as described in Note 2, “Summaryof Significant Accounting Policies.” Reportable segment income is calculated on the basis of operating income. The prices ofintersegment transactions and transfers are calculated based on the market prices.
(c) Changes in reportable segments
At the beginning of the fiscal year ended March 31, 2021, the Company conducted organizational restructuring following
the adoption of the in-house company system to enhance the management efficiency and profitability of the Company. As aresult of this organizational restructuring, the industrial robots business and the electronic control devices business weretransferred from the “Other Products” segment to the “Control Systems” segment.
Note that the segment information presented for the fiscal year ended March 31, 2020 has been restated to reflect the
new segment classification.

27

(d) Reportable segment information
Reportable segment information of the Companies for the years ended March 31, 2021 and 2020 were as follows:Year ended
March 31, 2021

Millions of yen
Reportable segments
Molding
Machinery

Net sales:
Externalcustomers

Machine
Tools

Control
Systems

Sub total

Other
Products

Total

Adjustments Consolidated¥64,308¥20,866¥5,838¥91,014¥1,620¥92,635¥－¥92,635

－

19

1,555

1,575

405

1,980

(1,980)－Total

64,30820,886

7,394

92,5892,026

94,615(1,980)92,635

Segment income¥1,157¥(828)

¥(39)

¥289

¥35

¥325

¥56

¥381

Segment assets¥67,308¥29,191¥9,254¥105,754¥4,762¥110,516¥23,779¥134,296¥1,045¥479¥186¥1,711¥44¥1,755¥－¥1,755

510

181

242

935

863

1,799

－

1,799

Inter-segment

OthersDepreciation
Capitalexpenditures
Year ended
March 31, 2020

Millions of yen
Reportable segments
Molding
Machinery

Net sales:
Externalcustomers

Machine
Tools

Control
Systems

Sub total

Other
Products

Total

Adjustments Consolidated¥77,206¥29,684¥6,930¥113,821¥2,939¥116,761¥－¥116,761

－

13

2,237

2,250

678

2,928

(2,928)－

Total

77,206

29,697

9,168

116,072

3,617

119,689(2,928)116,761

Segment income¥3,747

¥300

¥(39)

¥4,007¥(528)¥3,478¥50¥3,529Segment assets¥71,929¥34,787

10,678¥117,395¥5,882¥123,277¥31,005¥154,283¥1,021¥560¥144¥1,726¥54¥1,781¥－¥1,781

1,111

194

100

1,405

335

1,741

－

1,741

Inter-segment

OthersDepreciation
Capitalexpenditures
Year ended
March 31, 2021

Thousands of U.S. dollars
Reportable segments
Molding
Machinery

Net sales:
Externalcustomers

Machine
Tools

Control
Systems

Sub total

Other
Products

Total

Adjustments Consolidated$580,875$188,483$52,739$822,097$14,641$836,738$－$836,738－

177

14,051

14,227

3,663

17,890(17,890)－

Total

580,875

188,660

66,790836,325

18,304

854,629(17,890)

836,738

Segment income$10,457$(7,487)$(354)$2,616$321$2,937$512$3,449Segment assets$607,970$263,679$83,590$955,239$43,017$998,255$214,793$1,213,048$9,444$4,327$1,687$15,457$400$15,857$－$15,857

4,615

1,641

2,193

8,449

7,802

16,251－

16,251

Inter-segment

OthersDepreciation
Capitalexpenditures

Note:“Other products” is a business segment that is not included in the reportable segments. It included businessactivities related to casting, machining and environmental measurements, etc.
28

(e) Difference between total reportable segments and consolidated financial statements
The main differences between total reportable segments and consolidated financial statements for the years ended March
31, 2021 and 2020 were as follows:
Sales

Thousands of
U.S. dollars

Millions of yen
2021

Total reportable segments

2020

2021

¥92,589¥116,072$836,325

Other products

2,026

3,617

18,304

Eliminations(1,980)(2,928)(17,890)¥92,635¥116,761$836,738

Net sales in the consolidated financial statements
IncomeThousands of
U.S. dollars

Millions of yen
2021

Total reportable segments

2020

2021

¥289

¥4,007$2,616

Other products

35

(528)

321

Eliminations

56

50

512

¥381

¥3,529$3,449Operating income in the consolidated financial statements
AssetsThousands of
U.S. dollars

Millions of yen
2021

Total reportable segments

2020¥105,754

2021¥117,395$955,239

Other products

4,762

5,882

43,017Company-wide assets

24,126

31,488217,927

Eliminations(4,347)(482)(3,135)¥134,296¥154,283$1,213,048

Net assets in the consolidated financial statements
Note:

Company-wide assets are mainly cash and cash equivalents, securities and investment securities that are notallocated to the reportable segments.

29

(f) Other information①Information about products and services
Information about products and services is not disclosed because reportable segment information is based on products
and services.
②Information about geographical areas
Sales information by country or geographical areas for the years ended March 31, 2021 and 2020 were as follows:
Thousands ofMillions of yen
U.S. dollars
2021

2020

2021

Japan

¥40,850¥55,393$368,987

United States

12,042

11,216

108,774

China

21,976

22,603

198,509

Other Asia

14,09322,439127,305

Other

3,671

5,107

33,164

Total¥92,635¥116,761$836,738

Note:

Sales figures are classified based on customer locations.

Property, plant and equipment information by country or geographical areas as of March 31, 2021 and 2020 were as
follows:
Thousands of
U.S. dollars

Millions of yen
2021
Japan

2020

2021

¥18,214¥17,627$164,525

175

198

1,582

Asia

2,369

2,715

21,400Total¥20,758¥20,541$187,507

North America③Information about major customers
Information about major customers is not disclosed, because net sales to any customer did not exceed 10% of theconsolidated net sales for the years ended March 31, 2021 and 2020.
(g) Information about impairment loss on fixed assets for each reportable segment
Information about impairment loss on long-lived assets for the years ended March 31, 2021 and 2020 were as follows:
Thousands ofMillions of yen
U.S. dollars
2021

2020

2021

¥371

¥－

$3,355

Machine Tools

－

－

－

Control Systems

－

－

－

Other products

－

－

－

Adjustments

－

19

－

¥371

¥19

$3,355

Molding Machinery

Total(h) Information about amortization of goodwill and unamortized balance for each reportable segment
There was no amortization of goodwill for the year ended March 31, 2021 and 2020.
(i)

Information about gain on negative goodwill for each reportable segment
There was no applicable matter for the years ended March 31, 2021 and 2020.

30

29. Related Party Transactions(a) Transactions with related parties
This disclosure has been omitted for the year ended March 31, 2021 and 2020 based on immateriality.
(b) Summary of financial information for significant affiliate company
There was no applicable matter for the years ended March 31, 2021 and 2020.

30. Net Income and Net Assets per Share
Net income and net assets per share as of and for the years ended March 31, 2021 and 2020 were as follows:
Yen
2021

U.S. dollars
2020

2021

Net income (loss) per share¥(120.05)¥304.06$(1.08)

Net assets per share

3,402.36

3,605.47

30.73

Basic information for the calculation of net income per share was as follows:
Thousands of shares
2021
Weighted-average number of shares of common stock2020

24,141

24,135
Thousands of
U.S. dollars

Millions of yen
2021
Net income (loss)

2021¥(2,898)¥7,338$(26,178)－－－¥(2,898)¥7,338$(26,178)

Net income not applicable to shareholders of common stock
Net income (loss) applicable to shareholders of common stock

2020

Basic information for the calculation of net income per share was as follows:
Thousands of shares
2021
Number of shares at year-end

2020

24,145

24,135
Thousands of
U.S. dollars

Millions of yen
2021
Net assets
Non-controlling interests in consolidated subsidiaries
Net assets applicable to shareholders of common stock

31

2020

2021

¥82,152¥87,018$742,052－－－¥82,152¥87,018$742,052

31. Short-term Bank Loans and Long-term Debt
The annual interest rates applicable to the short-term bank loans outstanding as of March 31, 2021 and 2020 ranged
principally from 0.50% to 0.58% and 0.51% to 0.58%, respectively. Long-term debt as of March 31, 2021 and 2020 consistedof the following:Thousands of
U.S. dollars

Millions of yen
2021

2020

2021

Loans, principally from Japanese banks and insurance companies:
maturing 2023, interest 0.54% - 0.85%
Less current portion¥4,300¥4,300$38,840

4,300

4,300

38,840

500

－

4,516

¥3,800¥4,300$34,324

The aggregate annual maturities of long-term debt at March 31, 2021 were as follows:Year ending March 31

Millions of yen

Thousands of
U.S. dollars

2022

¥500

$4,516

2023

500

4,516

2024

3,300

29,8082025－－

2026 and later－－¥4,300$38,840

Total

The aggregate annual maturities of finance lease obligations at March 31, 2021 were as follows:
Thousands ofYear ending March 31
Millions of yen
U.S. dollars
2022

¥40

$366

2023

35

318

2024

20

187

2025

13

118

2026 and later

10

92

¥119

$1,081Total

32. Subsequent Event
Cash dividends
The following appropriation of retained earnings, which has not been reflected in the accompanying consolidated
financial statements for the year ended March 31, 2021, was approved at the meeting of the Board of Directors held on May
12, 2021.
Type of shares
Meeting of the Board of
Directors held on May 12, 2021

Common stock

Cash dividends

Cash dividends
per share¥905¥37.50($8,179)($0.34)32

Record date

Effective date

March 31, 2021

May 31, 2021