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

Consolidated Financial Results
for the Six Months Ended September 30, 2023
<under Japanese GAAP>

F-TECH INC.
19, Showanuma, Shobu-cho, Kuki City, Saitama, JAPAN1. Qualitative information regarding financial results for the period under review(1) Information regarding operating results
The global economy in the six months ended September 30, 2023 continued to face an uncertain outlook
due to the impact of persistently high resource and energy prices amid the protracted situation in
Ukraine, interest rate hikes in Europe and the U.S., and concerns over the economic slowdown in China.
In the automotive industry, although the semiconductor shortage is easing, the business environment
remains challenging due to the tight supply-demand balance for labor in the U.S., the impact of theUnited Auto Workers (UAW) strikes, and sluggish sales for Japanese automakers due to the rapid shift toEVs in China.
In this business environment, the Group launched the 15th medium-term management plan in April 2023.
While maintaining the foundations of the “Back to Basics” and “Challenge for New” policies, the Grouphas established a global policy of “We contribute to society by improving earning power and achieving
sustainable growth” under the slogan of “Pursuing the essence of Monozukuri (manufacturing).” Atregional sites and headquarters, the Group has been accelerating company-wide measures with an eye toenhancing earning power and improving financial structure as set forth in the “Back to Basics” policy,
and strategically pursuing growing business opportunities and establishing sustainability management, inline with the “Challenge for New” policy.
As a result of these activities, during the six months ended September 30, 2023, net sales increased by
14.9% year on year to 139,303 million yen, operating loss was 1,290 million yen (an operating loss of
1,090 million yen in the same period of the previous year), ordinary loss was 915 million yen (ordinary
profit of 213 million yen in the same period of the previous year), and loss attributable to owners ofparent was 516 million yen (profit attributable to owners of parent of 1,118 million yen in the same
period of the previous year).
Profit attributable to owners of the parent for the same period of the previous year has been revised from661 million yen to 1,118 million yen for comparison. This is because the accounting amount of gain on
negative goodwill resulting from the conversion of India Steel Summit Private Limited into a subsidiarywas tentatively 765 million yen in the same period of the previous year, but was fixed at 1,237 million
yen at the end of the previous fiscal year, and this amount was reflected in the same period of theprevious year.
Operating results by segment are as follows.
(Japan)Net sales increased by 36.6% year on year to 13,816 million yen due partly to a trend toward an increasein production volume at major customers resulting from improvement in semiconductor shortages, theeffect of mass production of parts ordered by new customers, and the impact of a weaker yen. In terms ofprofit and loss, operating income rose by 104.4% year on year to 372 million yen, due to an increase inproduction volume.
(North America)
Net sales increased by 23.6% year on year to 97,004 million yen due partly to a trend toward an increasein production volume at major customers resulting from improvement in semiconductor shortages, theeffect of mass production of newly ordered parts, and the impact of a weaker yen. In terms of profit andloss, operating loss was 1,486 million yen (an operating loss of 2,205 million yen in the same period of
the previous year), due to difficulties with hiring new employees amid the tight labor market, rising laborcosts, and declines in production efficiency and quality, which outweighed benefits from an increase inproduction volume and the effect of mass production of newly ordered parts.
(Asia)
While the production volume of major customers remained solid outside the Chinese region, production
volume decreased overall due to the rapid shift to EVs in the Chinese region, and net sales decreased by
12.8% year on year to 28,483 million yen. In terms of profit and loss, operating loss was 173 million yen(operating profit of 705 million yen in the same period of the previous year), due to a decrease inproduction volume.

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(2) Information regarding financial position
As of September 30, 2023, total assets increased by 18,958 million yen compared with the end of theprevious fiscal year to 195,096 million yen, reflecting increases in cash and deposits, buildings andstructures, and machinery, equipment and vehicles. Liabilities increased by 14,686 million yen from theend of the previous fiscal year to 126,067 million yen, reflecting increases in notes and accounts payable- trade, and short-term loans payable. Net assets increased by 4,272 million yen to 69,029 million yen,reflecting an increase in foreign currency translation adjustment.
(3) Information regarding consolidated earnings forecasts and other forward-looking statements
For the fiscal year ending March 31, 2024, we have revised the earnings forecasts announced on May 15,2023, based on currently available information and projections.
For details, please see the Notice Concerning Revision of Earnings Forecasts for the Fiscal Year Ending
March 31, 2024, released today.

-2-2. Quarterly consolidated financial statements and significant notes thereto(1)Consolidated balance sheets(Millions of yen)
As of March 31, 2023

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Merchandise and finished goods
Work in process
Raw materials and supplies
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures, net
Machinery, equipment and vehicles, net
Construction in progress
Other, net
Total property, plant and equipment
Intangible assets
Investments and other assets
Investment securities
Other
Total investments and other assets
Total non-current assets
Total assets-3-

As of September 30, 2023

5,491
37,806
5,296
7,632
12,702
3,729(55)
72,603

10,51239,755
6,498
8,240
13,7164,343(54)
83,012

18,88445,36313,00515,03092,284285

22,33751,598
9,032
15,104
98,073
328

7,464
3,500
10,965103,534
176,137

8,767
4,914
13,681
112,084
195,096(Millions of yen)

Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term loans payable
Current portion of long-term loans payable
Income taxes payable
Provision for directors’ bonuses
OtherTotal current liabilities
Non-current liabilities
Long-term loans payable
Provision for directors’ retirement benefits
Net defined benefit liability
Negative goodwill
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets-4-

As of March 31, 2023

As of September 30, 2023

24,16927,832
12,995942
85
9,520
75,54429,88436,20013,877375
32
11,57691,94629,908
53
1,003
33
4,836
35,836111,380

27,899
55
1,059
30
5,075
34,120126,067

6,790
6,733
27,979(60)
41,443

6,790
6,733
27,276(79)
40,721

543

941

386
7,731
(65)
8,595
14,71764,756
176,137445
11,751(45)
13,092
15,21569,029195,096(2)Consolidated statements of income and comprehensive income(Millions of yen)Six months ended
September 30, 2022

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit (loss)
Non-operating income
Interest income
Dividend income
Share of profit of entities accounted for using equity
methodForeign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expensesOther
Total non-operating expenses
Ordinary profit (loss)
Extraordinary income
Gain on change in equity
Gain on sales of non-current assets
Gain on negative goodwill
Total extraordinary income
Extraordinary losses
Loss on sales of non-current assets
Loss on retirement of non-current assets
Total extraordinary losses
Profit (loss) before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
Profit (loss)
Profit (loss) attributable toProfit (loss) attributable to owners of parent
Profit (loss) attributable to non-controlling interests
Other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners ofparent
Comprehensive income attributable to noncontrolling interests-5-

Six months ended
September 30, 2023

121,260
114,257
7,002
8,093(1,090)139,303
131,589
7,714
9,005(1,290)

39
31

58
31

16

287

1,747
115
1,951

1,237
167
1,782

630
16
647
213

1,276
131
1,407(915)

21
1,237
1,258

157
6
163

6
10
17
1,454
951(391)
560
894

1
10
12(764)
1,392(1,275)117(881)

1,118(224)

(516)
(365)

(107)
294
7,240(0)

467
60
4,940
6

358

206

7,785
8,679

5,681
4,799

7,390

3,980

1,288

818

(3) Consolidated statements of cash flows(Millions of yen)Six months ended
September 30, 2022
Cash flows from operating activities
Profit (loss) before income taxes
Depreciation
Loss (gain) on change in equity
Amortization of goodwill
Increase (decrease) in assets and liabilities related toretirement benefits
Increase (decrease) in provision for directors’
retirement benefits
Increase (decrease) in provision for directors’
bonusesInterest and dividend income
Interest expenses
Foreign exchange losses (gains)Share of loss (profit) of entities accounted for using
equity method
Loss (gain) on sales of property, plant and equipment
Loss on retirement of property, plant and equipment
Decrease (increase) in notes and accounts receivable- trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable trade
Gain on negative goodwill
Increase (decrease) in contract liabilities
Decrease (increase) in accounts receivable - other
Other, net
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Purchase of investment securitiesPurchase of shares of subsidiaries resulting in change
in scope of consolidation
Other, net
Net cash provided by (used in) investing activities-6-

Six months ended
September 30, 2023

1,454
5,984
(2)

(764)
7,064
(157)
(2)

9

31

(1)

1

(7)

(52)

(71)
630
(1,171)

(89)
1,276
(801)

(16)

(287)

(15)
10(4)
10

2,599

1,147

1,285

(591)

(1,066)

3,894(1,237)
1,403
(474)
1,014
10,327
106(631)(1,368)8,434

355(226)
1,526
12,331132(1,305)(1,906)9,251(9,476)104(17)(24)(5,515)
108
(35)
(23)

(632)

-(13)
(10,061)(52)(5,517)

(Millions of yen)Six months ended
September 30, 2022
Cash flows from financing activities
Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable
Repayments of long-term loans payable
Purchase of treasury shares
Cash dividends paid
Dividends paid to non-controlling interests
Repayments of lease obligations
Proceeds from sales of treasury shares
Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period-7-

Six months ended
September 30, 2023

(8,613)
20,734(5,711)
(0)
(186)
(665)
(505)
1430
5,485

5,375
3,200
(6,656)
(18)
(187)
(306)
(532)
874

697

413

4,556
1,981
6,537

5,021
5,491
10,512

(4) Notes to quarterly consolidated financial statements
Uncertainties of entity’s ability to continue as going concern
Not applicable.
Substantial changes in the amount of shareholders’ equity
Not applicable.
Changes in the scope of consolidation and equity method application(Significant changes in the scope of consolidation)
F-Tech North America Inc., a newly established company, is included in the scope of consolidation fromthe first quarter of the current fiscal year.
Application of special accounting for preparing quarterly consolidated financial statements(Calculation of tax expenses)
Tax expenses in the quarterly consolidated financial statements for a portion of consolidated subsidiaries
are calculated first by reasonably estimating the effective tax rate after applying tax effect accounting
against profit before income taxes for the fiscal year including the second quarter ended September 30,
2023, and next by multiplying the quarterly profit (loss) before income taxes by such estimated effective
tax rate.
Segment information, etc.
Segment information
I. Six months ended September 30, 2022
1. Disclosure of net sales and profit (loss) for each reportable segment(Millions of yen)
Reportable segments
JapanNet sales
Net sales to external customers
Intersegment sales and transfersTotal
Segment profit (loss)

North America

Total

Asia

10,117
7,678

78,468595

32,674890

121,260
9,164

17,79579,06433,564130,424

182(2,205)705(1,318)

2. Differences between total amounts of profit (loss) for reportable segments and amounts in theconsolidated statements of income and comprehensive income and main details of these differences(matters relating to difference adjustments)(Millions of yen)
ProfitAmountReportable segments total
Elimination of intersegment transactions(1,318)227

Operating loss in the consolidated statements ofincome and comprehensive income(1,090)3. Disclosure of impairment loss on non-current assets and goodwill, etc. for each reportable segment(Significant gain on negative goodwill)
A gain on negative goodwill of 1,237 million yen was recorded in the first quarter ended June 30, 2022
as a result of acquiring shares in India Steel Summit Private Limited to make it a consolidated
subsidiary. The amount of gain on negative goodwill is disclosed based on the amount after asignificant revision of the initial allocation of acquisition cost due to the finalization of the provisionalaccounting treatment for the business combination.

-8-II. Six months ended September 30, 2023
1. Disclosure of net sales and profit (loss) for each reportable segment(Millions of yen)
Reportable segments
JapanNet sales
Net sales to external customers
Intersegment sales and transfers
TotalSegment profit (loss)

North America

Total

Asia

13,816
4,528

97,004774

28,483
1,350

139,303
6,653

18,345

97,77829,834145,957372(1,486)(173)(1,287)

2. Differences between total amounts of profit (loss) for reportable segments and amounts in theconsolidated statements of income and comprehensive income and main details of these differences(matters relating to difference adjustments)(Millions of yen)
ProfitAmountReportable segments total
Elimination of intersegment transactions(1,287)(3)

Operating loss in the consolidated statements ofincome and comprehensive income(1,290)3. Disclosure of impairment loss on non-current assets and goodwill, etc. for each reportable segment
Not applicable.
Significant events after reporting period
Not applicable.

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