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, 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
Global economic conditions in the three months ended June 30, 2022 continued to be unstable due tonovel coronavirus infections, the protracted situation in Ukraine, as well as soaring costs of resources andenergy and price hikes caused by the aforementioned factors. Moreover, policy interest rate hikes acrossEuropean and U.S. countries, as well as exchange rate fluctuations and other factors have combined tomake the economic outlook uncertain.
In the automotive industry, the outlook for the production volume of automobile manufacturers remained
uncertain due to supply chain disruptions resulting from the lockdown in Shanghai following aresurgence in novel coronavirus infections in China, in addition to a shortage of semiconductors andrising raw material and transportation costs.
In this business environment, the Group, having launched its 14th medium-term plan in April 2020, hasbeen 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.” As a result, during the three months ended
June 30, 2022, we have won new orders in the North American market and have also acquired a new
subsidiary in India, a market which abounds with future potential, having been able to lay thegroundwork for future growth. On the other hand, our current business performance has been impacted
by a decline in our customers’ production volume due to semiconductor shortages and the Shanghai
lockdown, rising manufacturing costs and selling, general and administrative expenses due to soaring
raw material and transportation costs, and the depreciation of the yen, among other factors.
As a result, during the three months ended June 30, 2022, net sales increased by 28.5% year on year to59,811 million yen, operating loss was 1,095 million yen (an operating profit of 36 million yen in thesame period of the previous year), ordinary loss was 249 million yen (an ordinary loss of 141 million yen
in the same period of the previous year), and profit attributable to owners of parent was 260 million yen(loss attributable to owners of parent of 703 million yen in the same period of the previous year). A gain
on negative goodwill of 765 million yen arising from the acquisition of an Indian subsidiary wasrecorded as extraordinary income.
Operating results by segment are as follows.
(Japan)The production volume of major customers continued to decline on account of semiconductor shortages
and other factors, and net sales fell by 1.6% year on year to 4,695 million yen. In terms of profit and loss,operating loss was 327 million yen (an operating profit of 184 million yen in the same period of theprevious year) due to the impact of a decline in product sales, in addition to reduced production.
(North America)
The production volume of major customers continued to decline on account of semiconductor shortages
and other factors, but net sales rose 35.5% year on year to 37,012 million yen due to the depreciation of
the yen. In terms of profit and loss, operating loss was 1,013 million yen (an operating loss of 788
million yen in the same period of the previous year) due to rising raw material costs and the absence ofcoronavirus-related government subsidies, in addition to the impact of reduced production.
(Asia)Net sales rose 25.0% year on year to 18,103 million yen, owing to a recovery in the production volumeof major customers, the depreciation of the yen and other factors. In terms of profit and loss, operating
profit declined 4.4% year on year to 662 million yen on the impact of rising raw material andtransportation costs.
(2) Information regarding financial position
As of June 30, 2022, total assets increased by 18,117 million yen compared with the end of the previous
fiscal year to 179,049 million yen, reflecting increases in cash and deposits, as well as property, plant andequipment, such as machinery, equipment and vehicles and construction in progress.
Liabilities increased by 14,540 million yen from the end of the previous fiscal year to 114,893 million
yen, reflecting increases in both short-term loans payable and long-term loans payable.
Net assets increased by 3,577 million yen to 64,156 million yen, reflecting an increase in foreign
currency translation adjustment.
-1-(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 whichwere announced in the Consolidated Financial Results for the Fiscal Year Ended March 31, 2022 on May
12, 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, netMachinery, 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 June 30, 2022

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

8,213
36,0149,146
8,610
12,8004,060(17)78,82818,352
36,46715,570
10,97681,366299

19,631
39,241
17,845
13,60890,325
317

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

6,805
2,772
9,577
100,220
179,049

(Millions of yen)
As of March 31, 2022
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
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 June 30, 2022

22,96636,540
10,244652
448,37178,819

24,44943,415
10,426459
24
9,791
88,565

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

20,339
52
984
37
4,913
26,327
114,893

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

6,790
6,733
26,836(61)
40,298

518

498

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

85
7,905
7
8,497
15,35964,156
179,049

(2) Consolidated statements of income and comprehensive income(Millions of yen)Three months ended
June 30, 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
methodForeign exchange losses
Other
Total non-operating expenses
Ordinary loss
Extraordinary income
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 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-

Three months ended
June 30, 2022

46,55743,081
3,475
3,439
36

59,811
56,8302,981
4,076(1,095)

17
29

14
34

33

-

43
123

1,019
63
1,131

191

262

-

16

86
23
301(141)6286(249)

0
0

6765
771

0
24
24(165)
611
(78)
533
(698)

1
6
7
514
629(399)
230
283

(703)
4

260
23

72
2,024(3)(56)
88
4,265(0)

47

226

2,140
1,442

4,523
4,807

929

3,733512

1,073

(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 1,217 million yen, 231
million yen, and 985 million yen, respectively, as of June 30, 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 three months ended June 30, 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 first quarter ended June 30, 2022, andnext 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. Three months ended June 30, 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

North America

Total

Asia

4,771
3,504

27,307324

14,478550

46,557
4,378

8,276

27,631

15,02850,936

184(788)

693

88

Segment profit (loss)

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)
ProfitAmount88

Reportable segments total
Elimination of intersegment transactions(52)

Operating profit in the consolidated statements ofincome and comprehensive income

36

3. Disclosure of impairment loss on non-current assets and goodwill, etc. for each reportable segment
Not applicable.
II. Three months ended June 30, 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
Total
Segment profit (loss)

North America

Total

Asia

4,695
2,741

37,012
260

18,103364

59,811
3,365

7,436

37,272

18,46863,177(327)(1,013)

662

(678)

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)
ProfitAmount(678)

Reportable segments totalElimination of intersegment transactions(416)

Operating loss in the consolidated statements ofincome and comprehensive income(1,095)-7-

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 asa 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 of acquisition
costs has not been completed as of June 30, 2022. The amount is not allocated to reportable segments as
it is recorded in extraordinary income.
Business combinations, etc.
(Business combination through acquisition)
The Company resolved to make India Steel Summit Private Limited a subsidiary by acquiring shares ofthe company at the extraordinary meeting of the Board of Directors held on March 24, 2022. India SteelSummit Private Limited became a subsidiary of the Company on May 31, 2022 through the acquisition ofshares.
1. Summary of business combination(1) Name and business description of the acquired company
Name of company shares of which are acquired: India Steel Summit Private Limited
Description of business: Steel processing, press parts manufacturing and mold manufacturing(2) Main reason for business combination
It is aimed to demonstrate maximum superiority, having our mold business, the Company’s forte,as our core in the India market where growth is expected.
(3) Date of business combination
May 31, 2022 (deemed date of acquisition: March 31, 2022)(4) Legal form of business combination
Share acquisition(5) Name of company after business combination
No change(6) Voting right ratio acquired
Voting right ratio held right before business combination 10%
Voting right additionally obtained on the date of business combination 90%
Voting right ratio held after business combination 100%(7) Grounds for reaching the decision on acquisition of corporation
The Company acquires shares in consideration of cash.
2. Period for which the operations of the acquired company are included in the quarterly consolidated
statements of income for the period
From April 1, 2022 to June 30, 2022
3. Acquisition cost of the acquired company and breakdown by type of consideration
Consideration for acquisition―Cash 415 million Indian rupees (661 million yen)
Acquisition cost
415 million Indian rupees (661 million yen)
4. Descriptions and amounts of main acquisition-related expenses
Advisory fees and commissions 7 million yen-8-5. Amount of gain on negative goodwill incurred and reason for incurrence(1) Amount of gain on negative goodwill incurred
765 million yen
The above amount is calculated tentatively.
(2) Reason for incurrence
Since net assets at fair value at the time of business combination exceeded the acquisition cost.
Significant events after reporting period
Not applicable.

-9-