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 Three Months Ended June 30, 2019
<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 three months ended June 30, 2019 has continued a recovery trend overall, butfuture uncertainty has increased. The Japanese economy has continued a moderate recovery despite
weaknesses seen in exports and production. Overseas, the economy in the United States continued amoderate expansion, backed primarily by a favorable employment and income environment, although
uncertainty over the economic outlook grew. While in China, the economy slowed down due to theimpact of trade friction between the United States and China, among other reasons. The economies ofother regions in Asia overall transitioned to a slowdown trend.
In the automotive industry, in Japan, sales of both registered vehicles and light vehicles were strong. In
North America, sales of passenger cars declined and the shift in demand to light trucks continued. InChina, sales volumes significantly decreased. A downward trend in other Asian regions led to weak sales.
Under these circumstances, the Group has been working to provide its customers with new value, and has
made efforts to obtain new business in accordance with the basic policies of “Back to Basics” and“Challenge for New” outlined in the 13th Mid-term plan. This led the Group to win new large-scalebusiness contracts in North America.
The operating results for the Group during the three months under review are as follows. Net sales
decreased by 0.1% year on year to 58,063 million yen. Although production volume increased in North
America, the number of new business contracts awarded in Asia remained weak. Operating profit
increased by 12.4% year on year to 1,764 million yen mainly as a result of initiatives to improve theproduction efficiency and reduce costs. However, ordinary profit decreased by 9.7% year on year to1,429 million yen and profit attributable to owners of parent decreased by 50.3% year on year to 387
million yen primarily due to foreign exchange losses and increased income taxes.
Operating results by segment are as follows.
(Japan)Since production volume required by major customers remained strong, net sales rose by 4.1% year onyear to 7,514 million yen and operating profit rose by 124.7% to 62 million yen.
(North America)
Net sales rose by 6.0% year on year to 36,146 million yen due to the impact of increased production
volume required by customers. The segment recorded an operating profit of 649 million yen (anoperating loss of 125 million yen in the same period of the previous year) mainly as a result of initiatives
to improve the production efficiency and reduce costs, in addition to the effect of higher sales.
(Asia)As production volume required by major customers remained weak, net sales decreased by 14.3% year
on year to 14,403 million yen and operating profit decreased by 39.1% year on year to 899 million yen.
(2) Information regarding financial position
As of June 30, 2019, total assets decreased by 969 million yen compared with the end of the previous
fiscal year to 136,040 million yen, mainly reflecting decreases in notes and accounts receivable - trade,and raw materials and supplies.
Liabilities decreased by 666 million yen from the end of the previous fiscal year to 79,512 million yen,mainly reflecting decreases in notes and accounts payable - trade, and long-term loans payable.
Net assets decreased by 303 million yen from the end of the previous fiscal year to 56,527 million yen
mainly reflecting decreases in valuation difference on available-for-sale securities and non-controllinginterests.
(3) Information regarding consolidated earnings forecasts and other forward-looking statements
The consolidated earnings forecasts for the six months ending September 30, 2019, and the fiscal year
ending March 31, 2020, announced in “Consolidated Financial Results for the Fiscal Year Ended March
31, 2019” on May 9, 2019, have not been changed.

-1-2. Quarterly consolidated financial statements and significant notes thereto(1) Consolidated balance sheets(Millions of yen)
As of March 31, 2019
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Merchandise and finished goods
Work in process
Raw materials and supplies
Other
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
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets
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
Other
Total 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-2-As of June 30, 2019

7,191
33,667
4,450
3,999
9,277
2,866
61,453

6,675
31,534
5,309
4,291
8,762
3,392
59,966

16,096
36,115
3,520
10,65866,392342

15,87834,755
4,786
11,972
67,393
326

6,255
2,579
(12)
8,822
75,556
137,010

6,203
2,164
(13)
8,354
76,074136,040

22,83812,64912,660390
64
8,398
57,002

20,715
15,236
11,509285
41
9,291
57,08019,728
106
920
56
2,365
23,17680,17917,805
112
929
54
3,529
22,43279,512

(Millions of yen)
As of March 31, 2019
Net assetsShareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
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-3-

As of June 30, 2019

6,790
7,222
28,133(18)
42,1276,790
7,222
28,157(18)
42,151

467

390

(418)
(331)
(281)
14,98556,830137,010

(232)
(292)
(134)
14,51056,527136,040

(2) Consolidated statements of income and comprehensive income(Millions of yen)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
Share of profit of entities accounted for using equity
methodForeign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sales of non-current assets
Total extraordinary income
Extraordinary losses
Loss on sales of non-current assets
Loss on retirement of non-current assets
Total extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitProfit attributable toProfit attributable to owners of parent
Profit attributable to non-controlling interests-4-

Three months ended
June 30, 2018

Three months ended
June 30, 201958,11052,400
5,710
4,140
1,569

58,06352,238
5,825
4,061
1,764

27
26

15
18

88

49

106
100
349

–
45
128

313
–
23336
1,581

281
147
35
464
1,429

9911012
1,588
522
45567
1,021

0
12
13
1,417
662
116
779
638

780
241

387
250

(Millions of yen)Three months ended
June 30, 2018
Other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests-5-

Three months ended
June 30, 2019

(116)
(281)
48

(55)
179
37(103)

(16)

(453)
567

144
782

282

534

284

247

(3) 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.
Application of special accounting for preparing quarterly consolidated financial statements
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 first quarter ended June 30, 2019, andnext by multiplying the quarterly profit (loss) before income taxes by such estimated effective tax rate.
Changes in accounting policies
Application of IFRS 16 Leases
Starting from the first quarter ended June 30, 2019, IFRS 16 Leases has been applied to the Group
companies except for the following companies: the Company itself and its subsidiaries in Japan that haveadopted Japanese GAAP, and its subsidiaries in the United States that have adopted the generally accepted
accounting principles in the United States (US GAAP). IFRS 16 requires a lessee to recognize, inprinciple, all lease transactions as assets and liabilities in the balance sheet. There are no material changes
in accounting for leases as a lessor.
The Group reflects the cumulative effect of applying this accounting standard as an adjustment to thebalances of retained earnings as well as related non-current assets and liabilities as of the beginning of thefirst quarter ended June 30, 2019 in accordance with the transition under IFRS 16.
As a result, compared with the amounts under the previous accounting standard, “Other” of property, plantand equipment increased by 1,504 million yen, “Other” of current liabilities increased by 27 million yen,and “Other” of non-current liabilities increased by 1,343 million yen as of June 30, 2019. The impacts on
the beginning balance of retained earnings and profit or loss for the three months ended June 30, 2019were immaterial.
Application of Accounting Standards Codification (ASC) 606 Revenue from Contracts with Customers
Starting from the first quarter ended June 30, 2019, ASC 606 Revenue from Contracts with Customers has
been applied to the overseas subsidiaries that have adopted US GAAP. ASC 606 requires such subsidiaries
to recognize revenue when control over promised goods or services is transferred to customers in an
amount of consideration to which they expect to be entitled in exchange for transferring those goods orservices.
The Group applies this accounting standard in accordance with the transition procedure under ASC 606.
As a result, compared with the amounts under the previous accounting standard, net sales and cost of sales
for the three months ended June 30, 2019 increased by 337 million yen, respectively. There is no impact
on the beginning balance of retained earnings.

-6-Segment information, etc.
Segment informationI.
Three months ended June 30, 2018
1. Disclosure of net sales and profit for each reportable segment(Millions of yen)
Reportable segments
JapanNet sales
Net sales to external customers
Transactions with other segments
Total

34,095
390

16,796
750

58,1104,143

10,22034,485

17,54762,25327(125)

1,477

1,380

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)AmountProfitReportable segments total

1,380

Elimination of intersegment transactions

189

Operating profit in the consolidated statements ofincome and comprehensive income

3.

Total

Asia

7,218
3,002

Segment profit (loss)

2.

North America

1,569Disclosure of impairment loss on non-current assets and goodwill, etc. for each reportable segment
Not applicable.

II. Three months ended June 30, 2019
1. Disclosure of net sales and profit for each reportable segment(Millions of yen)
Reportable segments
JapanNet sales
Net sales to external customers
Transactions with other segments
TotalSegment profit

2.

North America

7,514
2,903

36,146410

14,403657

58,063
3,970

10,41736,557

15,06062,034

62

649

899

1,612

Differences between total amounts of profit (loss) for reportable segments and amounts in the
consolidated statements of income and comprehensive income and main details of these differences(matters relating to difference adjustments)(Millions of yen)AmountProfitReportable segments total

1,612

Elimination of intersegment transactions

152

Operating profit in the consolidated statements ofincome and comprehensive income

3.

Total

Asia

1,764

Disclosure of impairment loss on non-current assets and goodwill, etc. for each reportable segment
Not applicable.

-7-

Significant events after reporting period
Not applicable.

-8-