Note: This document has been translated from the Japanese original for reference purposes only. In the event of any
discrepancy between this translated document and the Japanese original, the original shall prevail.

May 15, 2024

Consolidated Financial Results
for the Fiscal Year Ended March 31, 2024
(Under Japanese GAAP)
Company name:
Listing:
Securities code:
URL:
Representative:
Inquiries:

IWATSU ELECTRIC CO., LTD.
Tokyo Stock Exchange
6704
https://www.iwatsu.co.jp
Shogo Kimura, President
Hidenori Tokida, Director & Executive Officer, General Manager of Corporate
Headquarters
Telephone:+81-3-5370-5111
Scheduled date of annual general meeting of shareholders:June 27, 2024
Scheduled date to commence dividend payments:
June 28, 2024
Scheduled date to file annual securities report:
June 27, 2024
Preparation of supplementary material on financial results:
Yes
Holding of financial results briefing:
Yes (for institutional investors)(Yen amounts are rounded down to millions, unless otherwise noted.)

1. Consolidated financial results for the fiscal year ended March 31, 2024 (April 1, 2023-March 31,
2024)(1) Consolidated operating results(Percentages indicate year-on-year changes.)

Revenue
Fiscal year ended
March 31, 2024
March 31, 2023

Millions of yen% Millions of yen

21,29022,871

Note: Comprehensive income

(6.9)
–

Reference:

Profit attributable toowners of parent

Ordinary profit% Millions of yen

(489)
(989)

–
–

(516)
(911)

% Millions of yen

–
–

526
(1,196)%––

For the fiscal year ended March 31, 2024 ¥741 million [–%]For the fiscal year ended March 31, 2023 ¥(972) million [–%]

Basic earnings per
share
Fiscal year ended
March 31, 2024
March 31, 2023

Operating profit

Diluted earnings
per share

Yen

45.36
(120.15)

Return on equity

Yen

–
–

Ordinary profit/
total assets

Operating profit/
net sales

%

%

%

2.0
(4.8)

(1.3)
(2.5)

(2.3)
(4.3)

Share of profit (loss) of entities accounted for using equity method
For the fiscal year ended March 31, 2024¥– million
For the fiscal year ended March 31, 2023¥– million(2) Consolidated financial position
Total assets
As ofMarch 31, 2024
March 31, 2023

Net assets

Equity-to-asset ratio

Net assets per share

Millions of yen

Millions of yen%

Yen

46,72335,30429,98724,152

61.2
68.4

1,921.77
2,422.88

Reference:

EquityAs of March 31, 2024
As of March 31, 2023

¥28,596 million¥24,152 million(3) Consolidated cash flows
Cash flows fromoperating activities
Fiscal year ended
March 31, 2024
March 31, 2023

Cash flows frominvesting activities

Cash flows fromfinancing activities

Cash and cash
equivalents at end of
periodMillions of yen

Millions of yen

Millions of yen

Millions of yen

776
(439)

(9,395)(467)

11,055
(211)

7,125
4,668

2. Cash dividends
Annual dividends per share

Fiscal year ended
March 31, 2023
Fiscal year ended
March 31, 2024
Fiscal year ending
March 31, 2025
(Forecast)

Total cash
dividends(Total)Firstquarterend

Secondquarterend

Third
quarterend

Fiscalyear-end

Yen

Yen

Yen

Yen

Yen Millions of yen

Total

Ratio of
Payout ratio dividends to(Consolidated) net assets(Consolidated)
%

%

–

0.00

–

0.00

0.00

–

–

–

–

0.00

–

25.00

25.00

373

55.1

1.2

–

0.00

–

–

–

–

Note: The forecast of the fiscal year-end dividend for the fiscal year ending March 31, 2025 is currently undetermined.

3. Forecast of consolidated financial results for the fiscal year ending March 31, 2025 (April 1, 2024March 31, 2025)
As announced in the “Notice Regarding the Implementation of Structural Reforms (in Japanese)”
released today, the Company has decided to implement fundamental structural reforms in order to build
a sustainable profit structure. Regarding the forecast of consolidated financial results for the fiscal year
ending March 31, 2025, the Company will examine future conditions and other matters and will promptly
announce the forecast once it is determined.

* Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in thechange in scope of consolidation): Yes
Excluded: One company (Iwatsu (Malaysia) Sdn. Bhd.)(2) Changes in accounting policies, changes in accounting estimates, and restatement(i) Changes in accounting policies due to revisions to accounting standards and other regulations:None(ii) Changes in accounting policies other than (i): Yes(iii) Changes in accounting estimates: None(iv) Restatement: None
(Note) For details, please refer to “Notes on changes in accounting policies” on page 13.
(3) Number of issued shares (common shares)(i) Number of issued shares at the end of the period (including treasury shares)
As of March 31, 2024

14,980,344 shares

As of March 31, 2023

10,080,344 shares(ii) Number of treasury shares at the end of the period
As of March 31, 2024

100,270 shares

As of March 31, 2023

111,661 shares(iii) Average number of shares during the period
Fiscal year ended March 31, 2024

11,612,010 sharesFiscal year ended March 31, 2023

9,958,449 shares[Reference] Summary of non-consolidated financial results
Non-consolidated financial results for the fiscal year ended March 31, 2024 (April 1, 2023-March 31,2024)(1) Non-consolidated operating results
Revenue
Fiscal year ended
March 31, 2024
March 31, 2023

Operating profit

Millions of yen

16,286
16,588

Ordinary profit% Millions of yen

(1.8)
–

Basic earnings per
share
Fiscal year ended
March 31, 2024
March 31, 2023

(Percentages indicate year-on-year changes.)% Millions of yen(878)(1,164)––

Diluted earnings per
share

Yen

91.31
(86.58)

Profit

Yen

–
–

(752)
(942)

% Millions of yen

–
–

1,060
(862)

%

–
–

(2) Non-consolidated financial position
Total assets
As ofMarch 31, 2024
March 31, 2023
Reference:

Net assets

Equity-to-asset ratio

Net assets per share

Millions of yen

Millions of yen%

Yen

37,11533,72926,43021,352

71.2
63.3

1,776.22
2,141.92

EquityAs of March 31, 2024
As of March 31, 2023

¥26,430 million¥21,352 million* These financial statements are not subject to audit by a certified public accountant or an auditing firm.
* Explanation of appropriate use of earnings forecasts and other special notes
Forward-looking statements in this document, including earnings forecasts, are based on information
currently available to the Company and certain assumptions that the Company considers reasonable, andare not intended to be a guarantee that it will achieve these forecasts. Actual results may differ
significantly due to various factors. Please refer to “Overview of operating results, etc.” on page 2 of theattached materials for assumptions, etc. underlying the earnings forecasts.

IWATSU ELECTRIC CO., LTD. (6704)

Attached Materials
Index
1. Overview of operating results, etc. ........................................................................................................... 2(1) Overview of operating results, etc. ..................................................................................................... 2(2) Future outlook .................................................................................................................................... 4
2. Basic approach to selection of accounting standards ................................................................................ 5
3. Consolidated financial statements and significant notes thereto............................................................... 6(1) Consolidated balance sheet ................................................................................................................ 6(2) Consolidated statements of income and comprehensive Income ....................................................... 8(Consolidated statement of income) ................................................................................................... 8(Consolidated statement of comprehensive income) .......................................................................... 9(3) Consolidated statements of changes in equity .................................................................................. 10(4) Consolidated statement of cash flows .............................................................................................. 12(5) Notes to consolidated financial statements ....................................................................................... 13
Notes on going concern assumption ................................................................................................. 13
Notes on changes in accounting policies .......................................................................................... 13
Segment information ........................................................................................................................ 13
Notes on per share information ........................................................................................................ 15
Notes on significant subsequent events ............................................................................................ 16-1-

IWATSU ELECTRIC CO., LTD. (6704)

1. Overview of operating results, etc.
(1) Overview of operating results, etc.
(i) Operating results
The Japanese economy during the current fiscal year showed a trend of gradual recovery as socialand economic activities normalized following the easing of mobility restrictions associated with
COVID-19. Meanwhile, the outlook remains uncertain due to the unstable international
environment, including the situations in Ukraine and the Middle East, soaring raw material and fuelprices, exchange rate fluctuations, and concerns about a slowdown in consumption and corporate
capital investment due to continuous price hikes.
In such circumstances, the Group has been promoting drastic structural reforms to achieve“REBORN,” our medium-term management plan announced in May 2022, which lays out the goals“First tier: Thorough reduction of fixed costs,” “Second tier: Promote growth strategies throughbusiness selection and concentration and alliances,” and “Third tier: Promote growth strategies
through M&A.”
During the current fiscal year, as part of the efforts to promote growth strategies, we concluded acapital and business alliance agreement with Ai Holdings Corporation last December and became
its affiliated company accounted for by the equity-method through a third-party allocation with said
company acting as the underwriter. In order to enhance the corporate value of both companies bycreating synergies based on the relationship with Ai Holdings Corporation, we are building
cooperative systems in the sales, development, manufacturing, and management processes. In
addition, the Company has specific ongoing discussions regarding the acquisition of the core test
and measurement business of Graphtec Corporation, a wholly owned subsidiary of Ai Holdings
Corporation, which plans to invest part of the funds raised through the third-party allocation, theimplementation of joint research and development with Ai Holdings’ group companies, etc.
For the first-tier goal “Thorough reduction of fixed costs,” in order to reduce the cost of Kugayama
Headquarters, we started operating a new core system last May to improve the efficiency of
indirect operations, and last September, we transferred all the shares of the Company’s wholly
owned subsidiary, Iwatsu (Malaysia) Sdn. Bhd., to Silitech Technology Corporation to consolidate
the production system in Japan and reduce costs by improving efficiency. As a result of the efforts
to promote digital transformation, we were certified as a “DX Certified operator” under the DX(Digital Transformation) certification program established by the Ministry of Economy, Trade andIndustry this April. We will build a promotion system based on the three pillars of “Customer DX,”
“Factory DX,” and “In-House DX,” and propose various work styles and cost reduction solutions
by providing value to users and collaborating with robots. In addition, we will expand internal
resources to maximize the profit by standardizing operations and implementing BI tools, etc. toimprove the efficiency of indirect operations.
For the second-tier goal “Promote growth strategies through business selection and concentration
and alliances,” we transferred all shares of groxi Inc. to ELECOM CO., LTD. last June. We areworking to diversify products and services and improve cost competitiveness in our focused area of“Office DX” by selecting and concentrating on businesses and deepening the cooperative
relationship with ELECOM CO., LTD., to which the Company transferred the shares. This pastFebruary, we underwrote a third-party allocation of new shares by Heimann Industries AG, a
German probe manufacturer, to “promote the growth strategy for test and measurement equipment”
and made a capital injection. Through collaboration with Heimann Industries AG, we arepromoting the strengthening of power electronics-related commercial products, which are expected
to grow in the future, and the acceleration of overseas expansion.
As stated above, the initiatives for the second year of the medium-term management plan areprogressing steadily. In order to succeed with the above, we will accelerate efforts to achieve thegoals of the medium-term management plan by “accelerating decision-making,” “visualizing the
profitability of each company,” and “improving customer satisfaction through integrated
development and sales” under the in-house company system we introduced this April, whichclarifies the responsibilities and authorities of each company and corporate division.

-2-

IWATSU ELECTRIC CO., LTD. (6704)
For the current fiscal year, there was an increase in procurement cost attributable to changes in theexternal environment such as soaring fuel prices and significant exchange rate fluctuations, onetime expenses incurred for the implementation of the medium-term management plan, and delay inimprovement in loss from inventory valuation recorded for the previous fiscal year against theoriginal plan. As a result, the revenue for the current fiscal year amounted to ¥21,290 million (adecrease of 6.9% from the end of the previous fiscal year), with an operating loss of ¥489 million(compared to an operating loss of ¥989 million in the previous fiscal year) and an ordinary loss of¥516 million (compared to an ordinary loss of ¥911 million in the previous fiscal year). The profit
attributable to owners of parent amounted to ¥526 million (compared to a loss of ¥1,196 million
attributable to owners of parent in the previous fiscal year), mainly due to a gain of ¥878 million onsale of shares in subsidiaries and associates resulting from the transfer of shares in groxi Inc. and again of ¥222 million on sale of investment securities associated with the reduction of the crossshareholdings, etc.
The following is a breakdown by segment.
Business communication systems
In the business communication systems business, the revenue from sales of cloud solutions mainly forcontact centers remained firm due to orders for large projects and an increase in demand associatedwith the progress of cloud services. However, revenue from contract manufacturing decreased due toshrinking of existing projects and postponement of new projects as well as the impact from the transferof shares in a consolidated subsidiary. As a result, the overall revenue amounted to ¥15,412 million (adecrease of 12.4% from the end of the previous fiscal year), and segment profit/loss was a profit of¥718 million (a decrease of 4.3% from the end of the previous fiscal year), primarily due to higher raw
material procurement costs and an increase in outsourced work associated with the diversification of
network-related equipment, despite a decrease in loss from inventory valuation recorded in the previous
fiscal year due to improvement in the parts procurement environment.
Printing systems
In the printing system business, the domestic demand for consumables increased ahead of the pricerevisions implemented last September and large orders for printing-related commercial products werereceived. As a result, revenue amounted to ¥1,691 million (an increase of 10.1% from the end of theprevious fiscal year), and segment profit/loss resulted in a loss of ¥63 million (a loss of ¥163 million in
the previous fiscal year) due to an increase in revenue and a decrease in loss from inventory valuation
as a result of the organization of product and product lineup associated with the business restructuringin the previous fiscal year.
Test and measurement equipment
In the test and measurement equipment business, orders mainly for electronic components decreased asa backlog from the increase in demand in the previous fiscal year. However, orders for powerelectronics-related products increased, reflecting growing awareness of environmental preservation. As
a result, overall revenue amounted to ¥3,306 million (an increase of 3.7% from the end of the previous
fiscal year), and segment profit/loss recorded a profit of ¥487 million (an increase of 300.0% from theend of the previous fiscal year) due to a better cost-to-sales rate associated with changes in the sales
mix.
Property leasing
In the property leasing business, an anonymous association that became the Company’s consolidated
subsidiary last March acquired non-current assets (beneficial interests in trust) for three rental
apartment properties and started its operation. As a result, sales revenue amounted to ¥879 million (anincrease of 60.1% from the end of the previous fiscal year), and segment profit/loss recorded a profit of¥331 million (an increase of 109.4% from the end of the previous fiscal year), mainly due to improved
occupancy rates of rental office buildings and nearly full occupancy of the newly acquired rental
apartment properties.
(ii) Financial position
Total assets at the end of the fiscal year under review were ¥46,723 million, an increase of ¥11,418
million from the end of the previous fiscal year.
-3-

IWATSU ELECTRIC CO., LTD. (6704)
Current assets were ¥19,166 million, an increase of ¥2,300 million from the end of the previous
fiscal year, mainly due to increases of ¥2,456 million in cash and deposits resulting from a thirdparty allocation of new shares, ¥233 million in electronically recorded monetary claims - operating,and ¥222 million in merchandise and finished goods, respectively, despite a decrease of ¥431
million in raw materials and supplies.
Non-current assets were ¥27,556 million, an increase of ¥9,117 million from the end of theprevious fiscal year, mainly due to increases of ¥5,085 million in land and ¥3,055 million inbuildings and structures resulting from the acquisition of non-current assets (beneficial interests intrust) by an anonymous association, and an increase of ¥1,121 million in investment securities
resulting from investments in Heimann Industries AG, a probe manufacturer in Germany.
Total liabilities at the end of the fiscal year under review were ¥16,735 million, an increase of¥5,583 million from the end of the previous fiscal year.
Current liabilities were ¥3,616 million, down ¥512 million from the end of the previous fiscal year,
mainly due to decreases of ¥469 million in notes and accounts payable - trade and ¥223 million incontract liabilities.
Non-current liabilities were ¥13,118 million, an increase of ¥6,096 million from the end of theprevious fiscal year, mainly because the borrowing by an anonymous association for acquiring noncurrent assets (beneficial interests in trust) resulted in an increase in long-term borrowings to¥5,989 million.
Net assets at the end of the fiscal year under review were ¥29,987 million, an increase of ¥5,834
million from the end of the previous fiscal year, due to increases of ¥1,857 million in capital and¥1,857 in capital surplus resulting from a third-party allocation of new shares, ¥526 million inretained earnings, mainly due to ¥526 million in a profit attributable to owners of parent company,
etc., and ¥1,391 million in non-controlling interests resulting from the acquisition of theanonymous association as a subsidiary.
(iii) Cash flows
Cash and cash equivalents at the end of the fiscal year under review were ¥7,125 million, an
increase of ¥2,456 million from the end of the previous fiscal year.
Cash flows from operating activities
Net cash provided by operating activities was ¥776 million, an increase of ¥1,216 million from theprevious fiscal year. This was mainly due to ¥1,112 million from depreciation and ¥584 million of
profit before income taxes for an increase of ¥1,252 million in trade receivables.
Cash flows from investing activities
Net cash used in investment activities was ¥9,395 million, a decrease of ¥8,928 million from theprevious fiscal year. This was mainly due to an expense of ¥9,255 million for the purchase of property,
plant and equipment by the anonymous association, etc. for an income of ¥443 million from the sale ofshares in the subsidiaries associated with the changes in scope of consolidation.
Cash flows from financing activities
Net cash provided by financial activities was ¥11,055 million, an increase of ¥11,267 million from theprevious fiscal year. This was mainly due to an income of ¥6,000 million from the long-termborrowings by an anonymous association, an income of ¥1,370 million from proceeds from sale ofshares of subsidiaries resulting in change in scope of consolidation, and an income of ¥3,697 million
from the issuance of shares in connection with a capital increase through third-party allocation.
(2) Future outlook
The Group has formulated a four-year medium-term management plan, “REBORN,” with fiscal 2022
as the starting point, and is promoting with unwavering resolve bold cost structure reforms with no-4-

IWATSU ELECTRIC CO., LTD. (6704)
reservations, growth strategies that contribute to the realization of a carbon-neutral society throughenergy conservation and efficiency improvements, and ESG management.
Meanwhile, although the Group has been making steady progress on the medium-term management
plan as of the second year, changes in external environment such as disruption of the supply chain andsoaring raw material and fuel prices triggered by geopolitical risks and continuing depreciation of theyen has resulted in increases in procurement cost and loss from inventory valuation, etc., greatly
affecting the Group’s profit/loss and causing significant deviation from goals laid out under the
medium-term management plan.
In light of this situation, as announced today (May 15, 2024) in the ”Notice Regarding the
Implementation of Structural Reforms (in Japanese)”, we have decided to implement drastic structuralreforms in order to build a permanently profitable structure. We will announce the consolidated
business results for the next fiscal year as soon as they are finalized after careful examination of future
situations and other factors.

2. Basic approach to selection of accounting standards
For the time being, the Group intends to prepare its consolidated financial statements in accordance withJapanese GAAP, taking into account the comparability of the consolidated financial statements between
periods and between companies.
With regard to the adoption of IFRS, the Group will take appropriate action after considering the situationin Japan and overseas.

-5-

IWATSU ELECTRIC CO., LTD. (6704)

3. Consolidated financial statements and significant notes thereto(1) Consolidated balance sheet(Millions of yen)
As of March 31, 2023

As of March 31, 2024

AssetsCurrent assets
Cash and deposits

4,890

7,347

386
567

313
800

Accounts receivable - trade
Merchandise and finished goods

4,064
1,830

3,928
2,052

Work in process
Raw materials and supplies

1,097
3,692

1,203
3,260

337
(1)

261
(1)

16,865

19,166

Buildings and structures, net
Machinery, equipment and vehicles, net

5,052
485

8,107
613

Tools, furniture and fixtures, net
Land

544
9,963

551
15,0495–

16,051

24,322

548

197

1,456

2,577

414
(31)

491
(31)

Notes receivable - trade
Electronically recorded monetary claims - operating

Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment

Other, net
Total property, plant and equipment
Intangible assets
Investments and other assets
Investment securities
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets

-6-

1,838

3,037

18,43827,55635,30446,723

IWATSU ELECTRIC CO., LTD. (6704)(Millions of yen)
As of March 31, 2023

As of March 31, 2024

Liabilities
Current liabilities
Notes and accounts payable - trade

1,582

1,113

Accounts payable - other
Contract liabilities

710
635

774
411

Income taxes payable
Provision for bonuses

77
540

185
463

Provision for product warranties
Other

76
506

109
557

4,129

3,616

Total current liabilities
Non-current liabilities
Long-term borrowings

35

6,025

Deferred tax liabilities
Provision for share awards

3,286
42

3,377
42

Retirement benefit liability
Other

3,097
560

3,078
594

Total non-current liabilities

7,022

13,118

11,151

16,735

Share capital
Capital surplus

6,025
6,948

7,882
8,805

Retained earnings
Treasury shares

10,523(112)

11,049(104)

Total shareholders’ equity

23,384

27,633483

775

Foreign currency translation adjustment
Remeasurements of defined benefit plans

124
160

–
186

Total accumulated other comprehensive income

768

962

–

1,391

24,152

29,98735,30446,723

Total liabilities
Net assets
Shareholders’ equity

Accumulated other comprehensive income
Valuation difference on available-for-sale securities

Non-controlling interests
Total net assets
Total liabilities and net assets-7-

IWATSU ELECTRIC CO., LTD. (6704)(2) Consolidated statements of income and comprehensive Income(Consolidated statement of income)(Millions of yen)
Fiscal year ended
March 31, 2023

Fiscal year ended
March 31, 2024

Revenue
Cost of sales

22,871
16,072

21,29014,308Gross profit

6,799

6,981

Selling, general and administrative expenses

7,788

7,471

Operating loss

(989)

(489)

Interest income
Dividend income

20
48

8
59

Rental income from land and buildings
Commission income

36
2

34
14

Other

59

11

Total non-operating income

167

127

Interest expenses
Share issuance costs

3
–

43
17

Foreign exchange losses
Loss on retirement of non-current assets

41
23

43
30

Other

21

19

Non-operating income

Non-operating expenses

Total non-operating expenses

90

154

(911)

(516)

Gain on sale of investment securities
Gain on sale of shares of subsidiaries and associates

3
–

222
878

Subsidy income
Insurance claim income

15
–

–
26

Total extraordinary income

18

1,127

Ordinary loss
Extraordinary income

Extraordinary losses
Impairment losses

270–

Loss on disaster–

26

Total extraordinary losses

270

26

Profit (loss) before income taxes(1,163)

584

67
(34)

117
(81)

Income taxes - current
Income taxes - deferred
Total income taxes

32

36(1,196)

548

Profit attributable to non-controlling interests–

21

Profit (loss) attributable to owners of parent(1,196)

526

Profit (loss)-8-

IWATSU ELECTRIC CO., LTD. (6704)(Consolidated statement of comprehensive income)(Millions of yen)
Fiscal year ended
March 31, 2023
Profit (loss)

Fiscal year ended
March 31, 2024

(1,196)548

Other comprehensive income
Valuation difference on available-for-sale securities

179

291

Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax

124
(79)

(124)
26

Total other comprehensive income

223

193

Comprehensive income

(972)

741

Comprehensive income attributable to
Owners of parent

(972)

720

–

21

Non-controlling interests-9-

IWATSU ELECTRIC CO., LTD. (6704)(3) Consolidated statements of changes in equity
Fiscal year ended March 31, 2023
(Millions of yen)
Shareholders’ equity

Balance at beginning of
periodCumulative effects ofchanges in accounting
policies
Restated balance

Share capital

Capital surplus

6,025

6,948

Retained earnings
11,977

Treasury shares
(135)

(8)
6,025

6,948

11,968

Total shareholders’equity24,815(8)(135)

24,806

Changes during period
Loss attributable toowners of parent
Dividends of surplus
Purchase of treasury
shares
Disposal of treasury
sharesNet changes in items
other than shareholders’equityTotal changes during
periodBalance at end of period(1,196)

(248)

(248)
(0)

(0)

23

23

–

–

(1,444)23(1,421)

6,025

6,948

10,523(112)

23,384

Valuationdifference on
available-for-salesecurities
Balance at beginning of
periodCumulative effects ofchanges in accounting
policies
Restated balance(1,196)304

Accumulated other comprehensive income
Total accumulated
Foreign currency Remeasurements ofotherdefined benefit
translation
comprehensive
plans, net of tax
adjustment
income0239

544

Total net assets

25,359
(8)

304

0

239

544

25,350Changes during period
Loss attributable toowners of parent
Dividends of surplus
Purchase of treasury
shares
Disposal of treasury
sharesNet changes in items
other than shareholders’equityTotal changes during
periodBalance at end of period(1,196)
(248)
(0)
23
179

124

(79)

223

223

179

124

(79)

223

(1,198)

483

124

160

768

24,152- 10 -IWATSU ELECTRIC CO., LTD. (6704)
Fiscal year ended March 31, 2024
(Millions of yen)
Shareholders’ equity

Balance at beginning of
periodChanges during period

Share capital

Capital surplus

6,025

6,948

Retained earnings
10,523

Profit attributable toowners of parent
Issuance of new shares
Purchase of treasury
shares
Disposal of treasury
sharesNet changes in items
other than shareholders’equityTotal changes during
periodBalance at end of period

Total shareholders’equityTreasury shares(112)

23,384

526
1,857

526

1,857

3,714
(0)

(0)

9

9

1,857

1,857

526

8

4,249

7,882

8,805

11,049(104)

27,633

Accumulated other comprehensive income
Valuation
Foreign
Total accumulated Non-controlling
Remeasurements
Total net assets
difference on
currency
otherinterestsof defined benefit
available-for- translation
comprehensive
plans, net of tax
sale securities adjustment
incomeBalance at beginning of
periodChanges during period

483

124

160

768

–

Profit attributable toowners of parent
Issuance of new shares
Purchase of treasury
shares
Disposal of treasury
sharesNet changes in items
other than shareholders’equityTotal changes during
periodBalance at end of period

24,152

526
3,714
(0)
9
291

(124)

26

193

1,391

1,585

291

(124)

26

193

1,391

5,834

775

–

186

962

1,391

29,987- 11 -IWATSU ELECTRIC CO., LTD. (6704)(4) Consolidated statement of cash flows(Millions of yen)
Fiscal year ended
March 31, 2023

Fiscal year ended
March 31, 2024

Cash flows from operating activities
Profit (loss) before income taxes(1,163)584

Depreciation

1,061

1,112

270
(69)

–
(67)

3

43

–

(877)

638
(1,065)(1,252)(446)

Increase (decrease) in trade payables
Other, net

(202)
133

3
1,599

Subtotal

(392)

700

69
(2)

67
(44)

Income taxes paid
Other, net

(129)
15

26
26

Net cash provided by (used in) operating activities

Impairment losses
Interest and dividend income
Interest expenses
Loss (gain) on sale of shares of subsidiaries andassociates
Decrease (increase) in trade receivables
Decrease (increase) in inventories

Interest and dividends received
Interest paid

(439)

776

Cash flows from investing activities
Purchase of property, plant and equipment(293)(9,255)Purchase of investment securities
Proceeds from sale of investment securities

(63)
6

(817)
328

Proceeds from sale of shares of subsidiaries resulting inchange in scope of consolidation–

968

Payments for sale of shares of subsidiaries resulting inchange in scope of consolidation

–

(524)

(190)
140

(150)
150

Payments into time deposits
Proceeds from withdrawal of time deposits
Other, net

(65)

(94)

Net cash provided by (used in) investing activities(467)(9,395)

50
–

6,000
3,697

Dividends paid
Proceeds from share issuance to non-controllingshareholders
Other, net

(247)

(0)

–

1,370

(14)

(11)

Net cash provided by (used in) financing activities(211)

11,05531

19

Net increase (decrease) in cash and cash equivalents(1,086)

2,456

Cash and cash equivalents at beginning of period

5,755

4,668

Cash and cash equivalents at end of period

4,668

7,125

Cash flows from financing activities
Proceeds from long-term borrowings
Proceeds from issuance of shares

Effect of exchange rate change on cash and cash equivalents- 12 -IWATSU ELECTRIC CO., LTD. (6704)(5) Notes to consolidated financial statements
Notes on going concern assumption
Not applicable.
Notes on changes in accounting policies
1. Changes in inventory valuation method
Previously, the Company principally used the moving average cost method for inventory valuation,
but the Company has switched to principally using the weighted average cost method, starting in
the fiscal year under review. This change has been made in connection to the update of thevaluation method following a change in the core system. As the impact of this change is negligible,
retrospective application has not been performed.
2. Changes in revenue recognition standards
Previously, revenue was recognized at the time of shipment for domestic sales of goods andproducts when the period from the time of shipment to the time when control of the goods or
products is transferred to the customer is a normal period of time, but starting in the fiscal year
under review, the Company has switched to the method where revenue is recognized at the time ofdelivery. This change has been made to more appropriately reflect economic realities following thechanges to the core system. This change in accounting policy has been applied retrospectively, andthe consolidated financial statements for the previous fiscal year have been prepared on aretrospective basis.
As a result, compared to before the retrospective application, the consolidated balance sheet for theprevious fiscal year shows an increase of ¥33 million in merchandise and finished goods and adecrease of ¥50 million and ¥23 million in accounts receivable and retained earnings, respectively.
The consolidated statement of income for the previous fiscal year shows a decrease of ¥32 million
in revenue, an increase of ¥6 million in operating loss, ordinary loss, and loss before income taxes,
respectively, and an increase of ¥14 million in loss and loss attributable to owners of parent. The
consolidated statement of cash flows for the previous fiscal year shows an increase of ¥6 million inloss before income taxes, an increase of ¥35 million in trade receivable, and a decrease of ¥25
million in inventories. Net assets per share decreased ¥2.39 and net loss per share increased ¥1.51
for the previous fiscal year.
The beginning balance of retained earnings in the consolidated statements of changes in equity
after retrospective application decreased by ¥8 million due to the cumulative effect of the changes
in accounting policy reflected in the carrying amount of beginning balance of net assets for theprevious fiscal year.
Segment information
1. Reportable segments(1) Method of determining reportable segments
Reportable segments of the Company are determined as segments which separate financial
information is accessible from among the constituent units of the Company and are subject toperiodic examinations to enable the Company’s Board of Directors to decide how to allocate
management resources and assess performance.
The Company has business divisions or business subsidiaries for each product or service,formulates comprehensive strategies for products and services that they handle in domestic andoverseas, and conducts business activities.
Accordingly, the Company consists of segments based on product and service, and are divided
into four reportable segments: “Business communication systems,” “Printing systems,” “Testand measurement equipment,” and “Property leasing.”- 13 -IWATSU ELECTRIC CO., LTD. (6704)(2) Types of products and services that belong to each reportable segment“Business communication systems” manufactures and sells communication equipment.
“Printing systems” manufactures and sells printing and plate-making equipment. “Test andmeasurement equipment” manufactures and sells electronic measurement equipment. “Property
leasing” engages in the leasing, etc. of real estate.
2. Method for calculating revenue, profit or loss, assets, liabilities and other items by reportablesegment
The accounting methods for the reportable segments are, in general, the same as those used toprepare consolidated financial statements.
As described in the notes to changes in accounting policies, previously, the Company principallyused the moving average cost method for inventory valuation, but the Company has switched toprincipally using the weighted average cost method, starting in the fiscal year under review. Thischange has been made in connection to the update of the valuation method following a change inthe core system. The impact of this change is negligible.
As described in the notes on changes in accounting policies, previously, revenue was recognized at
the time of shipment for domestic sales of goods and products when the period from the time of
shipment to the time when control of the goods or products is transferred to the customer is anormal period of time, but starting in the fiscal year under review, the Company has switched to themethod where revenue is recognized at the time of delivery. This change has been made to more
appropriately reflect economic realities following the changes to the core system. The segment
information for the previous fiscal year is presented based on the calculation method of profit orloss adopted after the change.
3. Information on revenue, profit or loss, assets, liabilities and other items by reportable segment
Fiscal year ended March 31, 2023
(Millions of yen)
Reportable segment
Business
communication systems

Printing
systems

Test andmeasurement
equipment

Property
leasing

Adjustment

Carrying
amount17,596

1,536

3,189

549

－

22,871

－

－

－

－

－

－

Total

17,596

1,536

3,189

549

－

22,871

Segment profit (loss)

749

(163)

121

158

(1,855)(989)

13,504

1,432

2,459

12,4935,414

35,304

716

38

61

157

87

1,061

239

11

34

0

78

364

Revenue
Revenues from externalcustomers
Transactions with othersegments

Segment assets
Other items
Depreciation
Increase in property, plant andequipment and intangible assets

Notes: 1. Adjustments made are as follows:(1) Adjustments of ¥(1,855) million in segment profit (loss) include ¥(1,855) million in corporate expenses notallocated to reportable segments. Corporate expenses are mainly general administrative expenses that are not
attributable to reportable segments.
(2) Adjustments of ¥5,414 million in segment assets include ¥5,414 million in corporate assets not allocated toreportable segments. Corporate assets are mainly surplus funds that are not attributable to reportable segments.
(3) Adjustments of ¥78 million in increase in property, plant and equipment and intangible assets are capital
investments for headquarter departments.

- 14 -IWATSU ELECTRIC CO., LTD. (6704)
2. Segment profit (loss) is adjusted with operating profit (loss) in the consolidated statement of income.

Fiscal year ended March 31, 2024
(Millions of yen)
Reportable segment

Revenue
Revenues from externalcustomers
Transactions with othersegments
Total

Business
communication systems

Printing
systems

Test andmeasurement
equipment

Property
leasing

Adjustment

Carrying
amount15,412

1,691

3,306

879

－

21,290

－

－

－

－

－

－

15,412

1,691

3,306

879

－

21,290

Segment profit (loss)
Segment assets

718

(63)

487

331

(1,963)(489)

12,970

1,124

2,589

20,8339,206

46,723

690

37

60

229

94

1,112

461

90

38

8,562

106

9,257

Other items
Depreciation
Increase in property, plant andequipment and intangible assets

Notes: 1. Adjustments made are as follows:(1) Adjustments of ¥(1,963) million in segment profit (loss) include ¥(1,963) million in corporate expenses notallocated to reportable segments. Corporate expenses are mainly general administrative expenses that are not
attributable to reportable segments.
(2) Adjustments of ¥9,206 million in segment assets include ¥9,206 million in corporate assets not allocated toreportable segments. Corporate assets are mainly surplus funds that are not attributable to reportable segments.
(3) Adjustments of ¥106 million in increase in property, plant and equipment and intangible assets are capital
investments for headquarter departments.
2. Segment profit (loss) is adjusted with operating profit (loss) in the consolidated statement of income.

Notes on per share information
1. Net assets per share(Yen)
As of March 31, 2023

As of March 31, 2024

2,422.88

1,921.77

Net assets per share

Note: The Company’s own shares that remain in the stock-granting ESOP trust and are recorded as treasury shares inshareholders’ equity are included in the number of treasury shares deducted from the total number of issued
shares at the end of the fiscal year for the purpose of calculating net assets per share. The number of treasury
shares at the end of the fiscal year was 72,900 shares for the previous fiscal year and 60,900 shares for thecurrent fiscal year.

- 15 -IWATSU ELECTRIC CO., LTD. (6704)
2. Basic earnings (loss) per share
Fiscal year ended March 31, 2023
Basic earnings (loss) per share(120.15)

Fiscal year ended March 31, 2024
45.36

(Basis of calculation)
Profit (loss) attributable to ownersof parent (Millions of yen)

(1,196)526

Amount not attributable tocommon shareholders (Millions of
yen)

–

–

Profit (loss) attributable to ownersof parent related to common share(Millions of yen)

(1,196)

526

Average number of commonshares during the period (Shares)

9,958,449

11,612,010

Notes: 1. Diluted earnings per share is not presented because there are no potential shares.
2. The Company’s own shares that remain in the stock-granting ESOP trust and are recorded as treasury sharesin shareholders’ equity are included in the treasury shares deducted in the calculation of the average numberof shares during the fiscal year for the purpose of calculating basic earnings per share. The average numberof treasury shares during the fiscal year was 83,600 shares for the previous fiscal year and 62,567 shares forthe current fiscal year.

Notes on significant subsequent events
Determination to implement structural reforms
At the meeting of the Board of Directors held on May 15, 2024, the Company decided to
implement structural reforms in the Group in order to accelerate the selection of and concentration
on businesses to achieve “thorough reduction of fixed costs” and “promotion of growth strategies”
as set forth in “REBORN,” the medium-term management plan.
To strengthen human capital and improve labor productivity, we will shift human resources to thepromotion of digital transformation and high value-added operations, while rationalizing the entire
Group’s workforce. The planned scope of the workforce rationalization, including staff downsizing,
is approximately 200 employees across the Group, which will be implemented around September
2024. In addition, in order to consolidate the Group’s human resources and further improve theefficiency of the group management, the Company is planning to integrate the Group by acquiring
the Company’s subsidiaries and other means, which will be implemented around the fiscal year
ending March 31, 2026.
The amount of expenses and other costs arising in connection with the implementation of thesestructural reforms has not yet been determined.

- 16 -