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 Nine Months Ended December 31, 2022
<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 nine months ended December 31, 2022 (from April 1, 2022 to December 31,2022) continued to face an uncertain outlook due to soaring prices, hikes in policy interest rates in eachcountry, fluctuations in the exchange rate, the disruptions surrounding China’s COVID policy and otherfactors.
In the automotive industry, the business environment remained challenging due to production
fluctuations caused by the shortage of semiconductors, as well as soaring raw material costs and thedisruptions surrounding China’s COVID policy.
In this business environment, under the 14th medium-term plan launched in April 2020, the Group has
been actively working to provide customers with new value, in line with the basic policies of “Back toBasics” and “Challenge for New,” under the global policy of “Let’s exceed our limits! We will, withoutcompromise, produce the ‘Best One’ for all our customers.” In the fiscal year under review, following theacquisition of a new subsidiary in India, which abounds with future potential, we decided to establish a
new company in order to revitalize our sales activities in the U.S., where many automakers areconcentrated.
During the nine months ended December 31, 2022, the effect of mass production of newly ordered
products, product sales, and cost reductions helped offset the impact from production fluctuations causedby the shortage of semiconductors, soaring costs of raw materials and other factors. As a result, net sales
increased by 42.0% year on year to 189,986 million yen, operating profit was 109 million yen (anoperating loss of 2,500 million yen in the same period of the previous year), ordinary profit was 292
million yen (an ordinary loss of 2,760 million yen in the same period of the previous year), and profit
attributable to owners of parent was 198 million yen (loss attributable to owners of parent of 3,156
million yen in the same period of the previous year).
Operating results by segment are as follows.
(Japan)The production at major customers fluctuated on account of semiconductor shortages, but net sales rose
10.5% year on year to 16,123 million yen due to the full-scale start of mass production at new customers,
increased product sales and other factors. In terms of profit and loss, operating profit rose 51.7% year onyear to 470 million yen as a result of an increase in product sales and the effect of foreign currencytranslation due to the yen depreciation, despite the impact of soaring raw material costs and other factors.
(North America)
Net sales rose 56.8% year on year to 121,027 million yen due to the full-scale start of mass production of
newly ordered products, the effect of foreign currency translation due to the yen depreciation, and otherfactors, despite sluggish growth in the production volume of major customers due to the shortage ofsemiconductors. In terms of profit and loss, operating loss was 2,323 million yen (an operating loss of
4,226 million yen in the same period of the previous year) on account of the effect of mass production of
newly ordered products, despite soaring raw material costs and the absence of coronavirus-related
government subsidies.
(Asia)The production volume of major customers fluctuated on account of the disruptions surrounding China’s
COVID policy and the shortage of semiconductors, but net sales rose 25.7% year on year to 52,834
million yen and operating profit rose 8.5% year on year to 1,858 million yen, partly owing to theacquisition of India Steel Summit Private Limited as a subsidiary and the effect of foreign currencytranslation due to the yen depreciation.
(2) Information regarding financial position
As of December 31, 2022, total assets increased by 20,079 million yen compared with the end of theprevious fiscal year to 181,011 million yen, reflecting increases in cash and deposits, and machinery,equipment and vehicles.
Liabilities increased by 14,951 million yen from the end of the previous fiscal year to 115,304 million
yen, reflecting increases in long-term loans payable.
Net assets increased by 5,128 million yen to 65,706 million yen, reflecting an increase in foreign
currency translation adjustment.

(3) Information regarding consolidated earnings forecasts and other forward-looking statements
No revisions have been made to the earnings forecasts for the fiscal year ending March 31, 2023
announced on November 4, 2022.

-2-2. Quarterly consolidated financial statements and significant notes thereto(1)Consolidated balance sheets(Millions of yen)
As of March 31, 2022

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 December 31, 2022

1,981
36,3278,754
7,500
11,7753,387(2)69,723

8,494
34,202
6,835
8,023
13,3084,759(19)75,605

18,352
36,467
15,57010,97681,366299

19,64446,03815,285
14,18995,156
296

7,412
2,130
9,542
91,208160,931

6,914
3,038
9,952
105,405
181,011(Millions of yen)

Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term loans payableCurrent 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
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, 2022

As of December 31, 2022

22,96636,540
10,244652
44
8,371
78,81923,75526,85912,707388
56
12,38776,153

16,735
51
919
39
3,787
21,533
100,353

33,561
51
1,016
35
4,486
39,151
115,304

6,790
6,733
26,619(62)
40,081

6,790
6,733
26,428(60)
39,891

518

383

4,498
7
5,025
15,47260,578160,931

448
9,907
8
10,74815,06665,706
181,011(2)Consolidated statements of income and comprehensive income(Millions of yen)
Nine months ended
December 31, 2021

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 expenses
Share of loss of entities accounted for using equity
methodOther
Total non-operating expenses
Ordinary profit (loss)
Extraordinary income
Gain on sales of non-current assets
Gain on sales of investment securities
Gain on negative goodwill
Gain on cancellation of leases
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
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 of parent
Comprehensive income attributable to non-controllinginterests-5-Nine months ended
December 31, 2022

133,787
125,721
8,065
10,566(2,500)

189,986
177,592
12,393
12,283
109

50
60

63
103-

79

72
167
350

933
196
1,376

552

1,172

22-

36
610
(2,760)

20
1,193
292

83
4
84
172

25
765
790

8
55
63(2,651)
1,175(313)861(3,512)

13
27
40
1,042
1,478
(442)
1,036
6(3,156)
(355)

198
(191)

(25)
3,012
(82)

(125)
461
6,140(1)

23

261

2,928
(584)

6,736
6,742

(979)

5,922

394

820

(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.
Changes in accounting policies(Application of Accounting Standards Codification (ASC) Topic 842, “Leases”)
The Company’s consolidated subsidiaries that adopt US GAAP have adopted ASC Topic 842, Leases
from the first quarter ended June 30, 2022. As a result, lessee’s lease transactions are, in principle, allrecorded as assets and liabilities on the balance sheet.
In accordance with the transitional measures provided in this accounting standard, the cumulative effect ofadopting this accounting standard is recognized at the beginning of the first quarter ended June 30, 2022,
which is the date of initial application of this accounting standard.
As a result, “Other” presented under property, plant and equipment, “Other” presented under current
liabilities, and “Other” presented under non-current liabilities each increased by 1,171 million yen, 272
million yen, and 899 million yen, respectively, as of December 31, 2022, compared with the amounts thatwould have been recorded under the previous accounting standard. The effect on the beginning balance ofretained earnings and profit and loss for the nine months ended December 31, 2022 is immaterial.
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 third quarter ended December 31, 2022,
and next by multiplying the quarterly profit (loss) before income taxes by such estimated effective tax
rate.
Additional information
There are no material changes to the assumptions of accounting estimates regarding the impact from thenovel coronavirus infection stated in the securities report for the previous consolidated fiscal year
(Additional information).

-6-

Segment information, etc.
Segment information
I. Nine months ended December 31, 2021
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
Total
Segment profit (loss)

North America

Asia

Total14,592
10,803

77,163
1,033

42,031
2,088

133,787
13,92625,39578,197

44,120147,713310(4,226)

1,712(2,203)

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(2,203)(297)

Operating loss in the consolidated statements ofincome and comprehensive income(2,500)3. Disclosure of impairment loss on non-current assets and goodwill, etc. for each reportable segment
Not applicable.

-7-II. Nine months ended December 31, 2022
1. Disclosure of net sales and profit (loss) for each reportable segment(Millions of yen)
Reportable segments
Japan
Net sales
Net sales to external customers
Intersegment sales and transfers
TotalSegment profit (loss)

North America

Asia

Total

16,123
12,119121,027878

52,834
1,592

189,986
14,58928,243

121,906

54,426

204,575

470(2,323)1,858

5

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)
ProfitAmount5

Reportable segments total
Elimination of intersegment transactions

104

Operating profit in the consolidated statements ofincome and comprehensive income

109

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 765 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 tentatively calculated since the allocation ofacquisition costs has not been completed as of December 31, 2022. The amount is not allocated toreportable segments as it is recorded in extraordinary income.
Significant events after reporting period
Not applicable.

-8-