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, 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 six months ended September 30, 2019 has continued a recovery trend overall,but concerns over the economic slowdown have increased mainly due to the intensification of trade
friction between the United States and China. The Japanese economy has continued a moderate recovery
despite weaknesses seen in exports and production. Overseas, in the United States, although a favorable
employment and income environment continued, economic growth slowed down primarily due to adownturn in exports. In China, the economy continued to slow down mainly due to the impact of trade
friction between the United States and China. The economies of other regions in Asia as a whole slowed
down moderately.
In the automotive industry, in Japan, sales volumes of both registered vehicles and light vehicles wererobust. In North America, sales of passenger cars declined and the shift in demand to light trucks
continued. In China, sales volumes significantly decreased. Sales remained weak in other Asian regions.
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 Japan and Asia as well following North America.
The operating results for the Group during the six months under review are as follows. Althoughproduction was robust in North America, the Group recorded lower sales and profits primarily due to theimpact of decreased production volumes in Japan and Asia as well as foreign exchange fluctuations. Net
sales decreased by 2.6% year on year to 112,355 million yen, operating profit decreased by 28.9% year
on year to 2,129 million yen, ordinary profit decreased by 41.0% year on year to 1,515 million yen, andloss attributable to owners of parent was 127 million yen (a profit attributable to owners of parent of
1,398 million yen in the same period of the previous year) partly due to the impact of increased income
taxes.
Operating results by segment are as follows.
(Japan)Since production volumes required by major customers remained weak, net sales decreased by 6.0% year
on year to 14,194 million yen and operating loss was 432 million yen (an operating profit of 232 million
yen in the same period of the previous year).
(North America)
Net sales rose by 3.2% year on year to 68,992 million yen due to the impact of increased production
volumes required by major customers. The segment recorded an operating profit of 395 million yen (anoperating loss of 319 million yen in the same period of the previous year) mainly as a result of initiativesto improve the production efficiency and reduce costs, in addition to the effect of higher sales.
(Asia)As production volumes required by major customers remained weak, net sales decreased by 12.7% year
on year to 29,167 million yen and operating profit decreased by 31.4% year on year to 1,928 million yen.
(2) Information regarding financial position
As of September 30, 2019, total assets decreased by 5,112 million yen compared with the end of theprevious fiscal year to 131,897 million yen, mainly reflecting decreases in cash and deposits, notes andaccounts receivable - trade, and machinery, equipment and vehicles.
Liabilities decreased by 3,142 million yen from the end of the previous fiscal year to 77,036 million yen,mainly reflecting decreases in notes and accounts payable - trade, current portion of long-term loans
payable, and long-term loans payable.
Net assets decreased by 1,970 million yen from the end of the previous fiscal year to 54,860 million yen
mainly reflecting a decrease in retained earnings.

-1-(3) Information regarding differences between consolidated earnings forecasts and actual results andrevisions to earnings forecasts
Taking recent performance trends into consideration, the Company has revised its consolidated earnings
forecasts, which were announced on May 9, 2019, as described below.
(i) Difference between earnings forecasts and actual results
Difference between earnings forecasts and actual results in the six months ended September 30, 2019
(From April 1, 2019 to September 30, 2019)

Net sales

OperatingprofitOrdinary
profitProfitattributableto owners ofparent

Basicearnings pershare

Million yen

Million yen

Million yen

Million yen

Yen

Previous forecasts (A)110,000
2,300
2,000500
26.77
Actual results (B)112,355
2,129
1,515(127)(6.82)
Difference (B-A)
2,355(170)
(484)
(627)
(33.59)Difference (%)
2.1
(7.4)
(24.2)––(Reference) Actual results forthe second quarter of theprevious fiscal year
115,393
2,995
2,567
1,398
74.89
(Six months ended September
30, 2018)
Reasons for the differences
In operating performance during the six months ended September 30, 2019, sales increased and profits
decreased compared with previous forecasts. In North America, sales increased and profits decreased dueto the fact that operational improvements were still in process, although production remained relativelyrobust. In Japan, sales and profits decreased due to decreases in production volumes at major customers.
In Asia, sales increased owing to the foreign exchange benefit, despite a slight downturn in production,and profits were almost the same as the forecasts. A loss attributable to owners of parent was recorded
primarily due to increased income taxes.
(ii) Earnings forecasts revisions
Revisions to consolidated earnings forecasts for the fiscal year ending March 31, 2020
(From April 1, 2019 to March 31, 2020)

Net sales

OperatingprofitOrdinary
profitProfitattributableto owners ofparent

Basicearnings pershare

Million yen

Million yen

Million yen

Million yen

Yen

Previous forecasts (A)218,000
6,000
5,500
2,500
133.84Current forecasts (B)221,000
5,000
4,300
1,100
58.89
Difference (B-A)
3,000(1,000)(1,200)(1,400)(74.95)Difference (%)
1.4(16.7)(21.8)(56.0)(56.0)(Reference) Actual results forthe previous fiscal year
235,361
6,580
5,968
2,844
152.30(Fiscal year ended March 31,2019)
Reasons for the revisions
With regard to the Company’s consolidated earnings forecasts for the full fiscal year ending March 31,2020, the current forecasts stated above show an increase in sales and a decrease in profits comparedwith previous forecasts, taking into account factors such as production volume changes at major
customers as well as the impact of foreign exchange.
The Company expects net sales to increase mainly due to the impact of increases in production volumes
at customers in North America. The Company expects operating profit to decrease due primarily to a-2-decrease in production volume at major customers in Japan and Asia as well as the impact of employees’strikes at customers in North America.
The average exchange rate for the fiscal year is assumed at 106.84 yen to the U.S. dollar.
Note: The above-stated earnings forecasts are based on information currently available to the Company
and certain assumptions judged to be reasonable. However, as they include risks and uncertainties
which are subject to various future events, actual results may differ from forecasts.

-3-2. Quarterly consolidated financial statements and significant notes thereto(1) Consolidated balance sheets(Millions of yen)
As of March 31, 2019

As of September 30, 2019

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

4,822
30,494
6,059
3,812
8,903
2,864
56,956

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

15,53533,086
6,526
11,356
66,505
304

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

6,233
1,909
(12)
8,130
74,940131,897

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

19,587
17,052
10,63634261
8,521
56,202

19,728
106
920
56
2,365
23,17680,17916,366
115
887
53
3,411
20,83377,036

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-4-(Millions of yen)
As of March 31, 2019

As of September 30, 20196,790
7,222
28,133(18)
42,127

6,790
7,222
27,642(18)
41,636467

420(418)
(331)
(281)
14,98556,830137,010(1,090)(254)(925)
14,14954,860131,897

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
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-5-(2) Consolidated statements of income and comprehensive income(Millions of yen)Six months ended
September 30, 2018
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
methodOther
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
Other
Total extraordinary incomeExtraordinary 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 (loss) attributable to owners of parent
Profit attributable to non-controlling interests
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-6-

Six months ended
September 30, 2019

115,393
104,134
11,2598,264
2,995

112,355
102,117
10,237
8,108
2,129

44
29

38
29

142

77

122
338

85
230

607
127
31
766
2,567

554
229
59
844
1,515

12
–
12

6
1
7

5
21
26
2,553
963
(66)
897
1,655

0
21
22
1,501
1,091
312
1,403
97

1,398
257

(127)
224

(67)
672
73

(50)
(985)7410(17)689
2,345(979)(882)

1,763(771)

581

(111)

(3) Consolidated statements of cash flows(Millions of yen)Six months ended
September 30, 2018
Cash flows from operating activities
Profit before income taxes
Depreciation
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- tradeDecrease (increase) in inventories
Increase (decrease) in notes and accounts payable trade
Increase (decrease) in accrued expenses
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 securities
Other, net
Net cash provided by (used in) investing activities
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
Repayments of installment payables
Dividends paid to non-controlling interests
Repayments of finance lease obligations
Proceeds from sale and leaseback transactions
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, 2019

2,553
5,978
(2)

1,501
5,471
(2)

53

40

(3)

9(29)

(3)

(73)
607
13(68)
554
80

(142)

(77)

(6)
21(6)
21

4,588

2,572

1,350

(1,342)(1,072)(2,887)101(212)
13,724111(613)(882)
12,339

(95)
526
6,294
106(564)(1,187)
4,648(2,894)25(50)(18)(5)(2,943)(4,983)58(32)(45)
0(5,002)(6,794)
5,184(6,844)
(0)
(186)
(165)
(537)
(436)
686
(9,094)

4,585
2,294
(7,277)
–
(187)
(155)
(699)
(416)
–
(1,856)

(12)

(159)

289
5,871
6,160

(2,369)
7,191
4,822

(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.
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 second quarter ended September 30,2019, and next 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 1,438 million yen, “Other” of current liabilities increased by 133 million yen,and “Other” of non-current liabilities increased by 1,192 million yen as of September 30, 2019. The
impacts on the beginning balance of retained earnings and profit or loss for the six months ended
September 30, 2019 were 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 the US GAAP. ASC 606 requires such
subsidiaries to recognize revenue when promised goods or services are transferred to customers in an
amount reflecting consideration to which they expect to be entitled in exchange for 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 six months ended September 30, 2019 increased by 625 million yen, respectively. There is no
impact on the beginning balance of retained earnings.

-8-

Segment information, etc.
Segment informationI.
Six months ended September 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

Total

66,855740

33,4291,579

115,393
8,547

21,334

67,59635,009123,940

232

(319)

2,810

2,723

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)AmountProfit3.

Asia

15,1086,226

Segment profit (loss)

2.

North America

Reportable segments total
Elimination of intersegment transactions

2,723
271

Operating profit in the consolidated statements ofincome and comprehensive income

2,995Disclosure of impairment loss on non-current assets and goodwill, etc. for each reportable segment
Not applicable.

II. Six months ended September 30, 2019
1. Disclosure of net sales and profit for each reportable segment(Millions of yen)
Reportable segments
Japan
Net sales
Net sales to external customers
Transactions with other segments
Total
Segment profit (loss)

2.

Asia

Total

14,194
5,196

68,992730

29,167
1,367

112,355
7,295

19,391

69,72330,535

119,650(432)

395

1,928

1,890Differences 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)AmountProfit3.

North America

Reportable segments total
Elimination of intersegment transactions

1,890
238

Operating profit in the consolidated statements ofincome and comprehensive income

2,129Disclosure of impairment loss on non-current assets and goodwill, etc. for each reportable segment
Not applicable.

-9-Significant events after the reporting period
Not applicable.

- 10 -