Financial Results for the Second Quarter Ended April 30, 2022
[Japan GAAP] (Consolidated)
Date:

June 10, 2022

Company Name and Code:

Tomoe Engineering Co., Ltd. and Subsidiaries - 6309
(URL: http://www.tomo-e.co.jp/index_e.html)

Stock exchange listing:

1st Section, Tokyo Stock Exchange

Head Office:5-15, Kitashinagawa 5-chome, Shinagawa-ku, Tokyo, Japan

President:

Hitoshi Yamamoto

Investor Relations Contacts:

Toshiaki Yakura, Director, General Manager of Accounting Division, Tel: (03) 3442-5127

Date to report Quarterly Consolidated Financial Statement: June 14, 2022
Date for Dividend Payment:

July 11, 2022

Preparation of Supplementary Explanatory Materials for Quarterly Operating Results: Yes
Briefing Session for Quarterly Operating Results: Yes (For analysts and institutional investors)* Any fractional sums less than one million (or one thousand) yen are disregarded
1. Consolidated Financial Data for the Second Quarter Ended April 30, 2022
(1) Results of Operation (Consolidated)

Quarter Ended April 30, 2022
Quarter Ended April 30, 2021

Quarter Ended April 30, 2022
Quarter Ended April 30, 2021
(Note) Comprehensive income(Percent: Change from the same quarter of the previous year)
Net Sales
Operating Income
Ordinary Income
Millions ofMillions ofMillions of
Yen
Percent
Yen
Percent
Yen
Percent
21,972
1,802
-6.8
1,879
-4.1
23,048
15.6
1,934
38.6
1,958
40.9

Net Income Attributable to
Owners of the Parent
Millions of
Yen
Percent
1,595
9.4
1,458
60.4

Second Quarter ended April 30, 2022: 1,763 million yen (6.1%)

Net Income per Share

Fully Diluted Quarterly
Net Income per ShareYen
159.94146.17

Yen-

Second Quarter ended April 30, 2021: 1,661 million yen (134.9%)(Note) We have applied Accounting Standard for Revenue Recognition (ASBJ Statement No. 29) from the beginning of theconsolidated first quarter, and the figures for the fiscal year ending October 31, 2022, are figures after applying the said accounting
standard. Because a significant impact on net sales arises, the year-on-year percentage change in net sales is not shown.
(2) Financial Condition (Consolidated)

Quarter Ended April 30, 2022
Year Ended October 31, 2021

Total Assets (A)(Millions of Yen)
44,87043,254

Net Assets (B)(Millions of Yen)
33,35531,841Net Assets Ratio(B) / (A) (Percent)
74.3
73.6

(Reference) Net assets
Second Quarter ended April 30, 2022: 33,355 million yen

Year Ended October 31, 2021: 31,841 million yen

2. Dividend Status(Record Date)
Year Ended October 31, 2021
Year Ending October 31, 2022
Year Ending October 31, 2022 (Prospect)First
Quarter-Interim
Term
25.00
25.00

Annual Dividend (Yen)Third
End ofQuarter
Fiscal Year
25.00

(Note) Revisions since the most recently released dividend projection: None

-

25.00

Annual50.00
50.00

3. Forecast for Earnings for the Year Ending October 31, 2022 (Consolidated)(Percent change from the previous Full Business Year)Net Sales
Operating Income
Ordinary Income(Millions of Yen) (Percent) (Millions of Yen) (Percent) (Millions of Yen) (Percent)
Full Business Year
39,650
2,390
-16.0
2,400
-17.4
Net Income Attributable to Net Income per ShareOwners of the Parent(Millions of Yen) (Percent)
Yen
Full Business Year
1,960
-7.0
196.43(Note) Revisions since the most recently released earnings forecast: None
We have applied Accounting Standard for Revenue Recognition from the beginning of the consolidated first quarter, andthe forecasts are based on the said accounting standard. Because a significant impact on net sales arises, the percentagechange against the net sales result for the fiscal year ended October 31, 2021, before application of the said standard, is
not shown.
Notes(1) Significant changes in subsidiaries during this period (changes in specific subsidiaries involving changes in thescope of consolidation): None
Number of new subsidiaries: __(Company names):
Number of eliminated subsidiaries: __(Company names):(2) Adoption of the specific accounting method to create quarterly consolidated financial statements: None
(3) Changes in accounting policies, accounting estimates, and retrospective restatements.
1) Change in accounting policies due to revision of accounting standard: Yes
2) Other changes than the above 1): None
3) Change in accounting estimates: None
4) Retrospective restatements: None
Please refer to the Attachments for the details on page 11, (3) [Notes on Quarterly Consolidated Financial
Statements] of 2. [Quarterly Consolidated Financial Statements and Notes].
(4) Number of outstanding shares (Common stock)1) Number of outstanding shares as of quarter-end and year-end (including treasury stocks)
At April 30, 2022: 10,533,200 shares

At October 31, 2021: 10,533,200 shares

2) Number of treasury stocks as of quarter-end and year-end
At April 30, 2022: 554,940 shares

At October 31, 2021: 554,911 shares

3) Number of average shares (accumulated quarterly total)
At April 30, 2022: 9,978,278 shares

At April 30, 2021: 9,978,325 shares*The quarterly earnings report is exempt from the quarterly review by certified public accountant or audit firm.
*Explanations for appropriate use of the earnings forecast and other special instructions
The forward-looking statements such as a forecast of our financial results described herein are based on theinformation currently available to us and certain assumptions that we believe are reasonable. Actual results could differ
materially due to various factors.
Please refer to the Attachments on page 4, (3) [Analysis of Future Forecast on Quarterly Consolidated Earnings
Forecast] of 1. [Qualitative Information on Quarterly Consolidated Operating Results] for the operating results forecast.

Table of Contents (Supporting Data)

1. Qualitative Information on Quarterly Consolidated Operating Results ....................................................2(1) Analysis of Operating Results ................................................................................................................................2(2) Analysis of Financial Condition ..............................................................................................................................3(3) Analysis of Future Forecast on Quarterly Consolidated Earnings Forecast .......................................................4
2. Quarterly Consolidated Financial Statements and Notes .................................................................................................5(1) Quarterly Consolidated Balance Sheet ....................................................................................................5(2) Quarterly Consolidated Statement of Income & Quarterly Consolidated Statement of Comprehensive
Income ......................................................................................................................................7
Quarterly Consolidated Statement of Income ..............................................................................................7
Quarterly Consolidated Statement of Comprehensive Income .....................................................................8(3) Quarterly Consolidated Statement of Cash Flows ..............................................................................................9(4) Notes on Quarterly Consolidated Financial Statements .....................................................................................11(Note for premise of going concern) ....................................................................................................11(Notes for significant changes in shareholder’s equity) ......................................................................................11(Changes in accounting policies) ...................................................................................................11(Changes in presentation method) .................................................................................................12(Segment information) ............................................................................................................................................13

1

1. Qualitative Information on Quarterly Consolidated Operating Results(1) Analysis of Operating Results
During the second quarter of the current consolidated fiscal year, although Japan’s economy initially got off to goodstart, it shifted to negative growth on factors including slumps in public investment and residential investment as well as
personal consumption’s coming to a standstill due to a resurgence of COVID-19 infections from January onward. On
the other hand, overseas, although the U.S. economy has remained strong and the European economy has recovered
moderately, the growth rate in the Chinese economy has slowed.
Given these circumstances, net sales for the Tomoe Engineering Group for the consolidated second quarter were
21,972 million yen. From an earnings aspect, operating income was 1,802 million yen, 6.8% down from the same
period last year because of lower income in the Machinery & Equipment Business, while ordinary income came to1,879 million yen, 4.1% down from the same period last year. Net income attributable to owners of the parent was
1,595 million yen, 9.4% up from the same period last year reflecting appropriation of profit on sales of noncurrent assets.
As for the effect on net sales due to the change of the revenue recognition standard, net sales decreased 90 million
yen in the Machinery & Equipment Business and 3,215 million yen in the Chemical Products Business respectively.
Operating results by segment were as follows.
(Machinery & Equipment Business)
In the Machinery & Equipment Business, net sales of equipment and construction works for domestic public sector
demand, machinery for domestic private sector demand and overseas markets, and components and repair services
for all fields were stagnant, despite growth in net sales of machinery for domestic public sector demand.
(Millions of Yen)
Product classification

Machinery

Equipment andconstruction
works

Components
and repair
services

TOTAL

April, 2021
284
973
2,078
3,336
(previous standard)
Public sector April, 2022
473
550
1,932
2,956
(new standard)
April, 2022
473
733
1,932
3,139
(previous standard) *April, 2021
291
0
1,010
1,301
(previous standard)
Private sector April, 2022
141
59
971
1,171
(new standard)
April, 2022
141
0
971
1.112
(previous standard) *April, 2021
1,499
0
1,306
2,806
(previous standard)Overseas
April, 2022
465
34
955
1,454
markets(new standard)
April, 2022
466
0
955
1,422
(previous standard) *April, 2021
2,074
974
4,394
7,443
(previous standard)
TOTAL
April, 2022
1,079
643
3,859
5,583
(new standard)
April, 2022
1,081
733
3,859
5,674
(previous standard) **For net sales in the consolidated quarter under review, the asterisk mark indicates the figure revised due to the effectof the change of the revenue recognition standard.
2

With respect to earnings, operating income was 574 million yen, 37.2% down from the same period one year earlier,reflecting sluggish net sales of equipment and construction works, components and repair services for domestic public
sector demand, and machinery, components and repair services for overseas markets.
(Chemical Products Business)
In the Chemical Products Business, net sales of materials mainly for building and fireproof in the industrial materials andmineral products sectors, materials for paint and ink applications in the fine chemical products sector, and materials forsemiconductor manufacturing devices in the electronic materials sector, and of all other sectors expanded.
(Millions of Yen)
April, 2021
April, 2022
April, 2022
(previous standard)(new standard)(previous standard) *Synthetic resin sector

3,977

2,382

4,779

Industrial materials sector

2,292

3,122

3,323

Mineral products sector

2,194

2,362

2,362

Chemical products sector

3,314

3,976

4,362

Advanced materials sector

1,727

1,931

2,130

Electronic materials sector

1,964

2,491

2,523

134

122

122

Other products (foreign liquor)

Total
15,604
16,38919,605*For net sales in the consolidated quarter under review, the asterisk mark indicates the figure revised due to the effectof the change of the revenue recognition standard.
With respect to earnings during the period, operating income was 1,227 million yen, 20.4% up from the same period
one year earlier, reflecting strong sales in all sectors.
(2) Analysis of Financial Condition[1] Assets, Liabilities, and Net Assets
Total assets as of the end of the consolidated second quarter under review were 44,870 million yen, increased by
1,616 million yen from the end of the previous consolidated fiscal year. This mainly reflected the decrease in cash
and deposits, and investment securities, in addition to the increase in electronically recorded monetary claims, andmerchandise and finished goods.
Liabilities were 11,514 million yen, increased by 102 million yen from the end of the previous consolidated fiscal year,
mainly because of the increase in contract liabilities against advances received, and electronically recorded monetarydebt, despite the decrease in provision for bonuses, and income taxes payable.
Net assets stood at 33,355 million yen, increased by 1,514 million from the end of the previous consolidated fiscal year.
This mainly reflected the increase in retained earnings recorded under quarterly net income attributable to owners of
the parent.
As a result of the above changes, the equity ratio at the end of the consolidated second quarter under review
stood at 74.3%, increased by 0.7 point from 73.6% at the end of the previous consolidated fiscal year.

3[2] Cash Flow Status
Cash and cash equivalents (“cash”) as of the end of the consolidated second quarter under review decreased by 5,412
million yen from the end of the previous consolidated fiscal year to 7,194 million yen, reflecting cash flow used byoperating activities, investment activities and financing activities respectively. The status of each consolidated cash
flow and their factors during the second quarter are as follows:(Net Cash Provided by (Used in) Operating Activities)
Net cash used by operating activities during the consolidated second quarter under review totaled 1,507 million yen.
This mainly reflected the increase of notes, accounts receivable-trade and contract assets by 1,666 million yen, andinventory by 1,226 million yen, and payment of income taxes by 719 million yen, despite the increase of income
before income taxes by 2,335 million yen, and contract liabilities by 664 million yen. Net cash provided by operating
activities decreased by 4,694 million yen compared to 3,186 million yen provided for the same consolidated quarteryear-to-date period of the previous year.
(Net Cash Provided by (Used in) Investing Activities)
Net cash used by investing activities during the consolidated second quarter under review reflected expenditures
totaling 3,794 million yen. This reflected a difference of 4,000 million yen between deposits and disbursements totime deposits, despite the proceeds from sale of property, plant and equipment. Net cash used by investing activities
decreased by 332 million yen compared to 4,127 million yen used for the same consolidated quarter year-to-date
period of the previous year.
(Net Cash Provided by (Used in) Financing Activities)
Net cash used by financing activities during the consolidated second quarter under review came to 249 million yen.
This reflected the payment of cash dividends of 249 million yen. Net cash used in investing activities increased by
4 million yen compared to 244 million yen used for the same consolidated quarter year-to-date period of the previous
year.
(3) Analysis of Future Forecast on Quarterly Consolidated Earnings Forecast
There are no revisions to the consolidated earnings forecast figures for the fiscal year ending October 31, 2022 thatwere announced in the “Financial Results for the Fiscal Year Ended October 31, 2021 [Japan GAAP]” released on
December 14, 2021.

42. Quarterly Consolidated Financial Statements and Notes(1) Quarterly Consolidated Balance Sheet (Second Quarter)(Thousands of Yen)
AssetsEnd of Previous YearEnd of Second Quarter(October. 31, 2021)(April 30, 2022)

Current Assets
Cash and Deposits

12,607,490

11,194,949

Notes and Accounts Receivable-Trade

11,694,334−−

12,217,941

Electronically Recorded Monetary Claims

3,279,411

4,510,199

Merchandise and Finished Goods

3,589,851

4,450,778

Work in Process

1,290,848

1,459,198

Raw Materials and Supplies

743,778

1,010,166

Others263,549

256,106

Allowance for Doubtful Accounts
Total Current Assets-64,455-70,534

33,404,810

35,028,807

5,236,376

5,086,196

Accumulated Depreciation-2,183,281-2,116,315

Buildings and Structures, Net

3,053,095

2,969,880

Machinery, Equipment and Vehicles

3,992,687

4,118,781-3,555,668-3,719,650

437,019399,1312,302,076

2,302,547

16,246

69,046

1,097,469

1,131,481

Accumulated Depreciation-995,989-1,029,114

Others, Net

101,480

102,367

5,909,917

5,842,973

81,07374,187

Investment Securities

1,425,438

1,318,604

Guarantee Deposits

402,260

551,528

1,956,842

1,984,380

Deferred Tax Assets

13,508

7,370

Others82,04584,692

Allowance for Doubtful Accounts-21,892-21,992

Total Investments and Other Assets

3,858,203

3,924,582

Total Noncurrent Assets

9,849,194

9,841,743

Total Assets

43,254,004

44,870,551

Notes, Accounts Receivable-Trade and Contract
AssetsNoncurrent Assets
Property, Plant and Equipment
Buildings and Structures

Accumulated Depreciation
Machinery, Equipment and Vehicles, Net
Land
Construction in progress
OthersTotal Property, Plant and Equipment
Intangible Assets
Investments and Other Assets

Net Defined Benefit Assets5

(Thousands of Yen)
Liabilities and Net Assets

End of Previous YearEnd of Second Quarter(October. 31, 2021)(April 30, 2022)

Liabilities
Current Liabilities
Notes and Accounts Payable-Trade4,208,592

4,272,370

Electronically Recorded Monetary Debt

2,306,052

2,447,777

Accounts Payable-Others

685,729

718,999

Income Taxes Payable

775,198

616,801

Advances Received

308,942−−976,759

1,406,031

1,009,869

Provision for Directors' Bonuses

80,97942,552

Allowance for Product Warranty

363,270

224,646

Others536,079

338,908

10,670,876

10,648,685

Contract Liabilities
Provision for Bonuses

Total Current Liabilities
Noncurrent Liabilities
Provision for Directors' Retirement Benefits

5,460

5,460

Net Defined Benefit Liabilities

67,772

68,624

Deferred Tax Liabilities

668,441

792,153

Total Noncurrent Liabilities

741,673866,237

Total Liabilities

11,412,550

11,514,922

Capital Stock

1,061,210

1,061,210

Capital Surplus

1,483,410

1,483,410

Retained Earnings

28,721,695

30,068,189

Treasury Stock-364,081-364,148

Total Shareholders’ Equity

30,902,234

32,248,660

Accumulated Other Comprehensive Income
Valuation Difference on Available-for-Sale
Securities
Deferred Gains or Losses on Hedges

450,885

371,132

7,785

16,043Foreign Currency Translation Adjustment

213,842475,463

Total Adjustment on Net Defined Benefit
Total Accumulated Other Comprehensive
IncomeTotal Net Assets

266,705

244,328

939,220

1,106,967

31,841,454

33,355,628

Total Liabilities and Net Assets

43,254,004

44,870,551

Net Assets
Shareholders’ Equity6(2) Quarterly Consolidated Statement of Income & Quarterly Consolidated Statement of Comprehensive
IncomeQuarterly Consolidated Statement of Income (Second Quarter)(Thousands of Yen)
Second Quarter Ended
April 30, 2021

Second Quarter Ended
April 30, 2022

Net Sales

23,048,240

21,972,451

Cost of Sales

17,519,565

16,410,974

5,528,674

5,561,476

3,594,090

3,759,268

1,934,583

1,802,208

Interest Income

1,532

759

Dividends Income

13,861

17,633

Rent Income

3,658

3,658

Foreign Exchange Gain

4,736

43,654

Others

14,742

21,291

38,531

86,997

Interest Expenses

1,336

1,232

Commission Paid

7,487

7,487

Sales Discount

3,237

−

Others

2,334

1,236

Total Non-Operating Expenses

14,396

9,956

Ordinary Income

1,958,718

1,879,248

Profit on Sales of Noncurrent Assets−

456,447

Gain on Sale of Investment Securities

23,927−

Gain on Liquidation of Affiliated Company

62,996−

Total Extraordinary Profits

86,924456,447

Income before Income Taxes and Minority Interests

2,045,642

2,335,696

Income Taxes-Current

579,427569,249

Income Taxes-Deferred

7,642

170,496

Total Income Taxes

587,070

739,746

Net Income or Net Loss (-)

1,458,572

1,595,950

1,458,572

1,595,950

Gross Profit
Selling, General and Administrative Expenses
Operating Income
Non-Operating Income

Total Non-Operating Income
Non-Operating Expenses

Extraordinary Profits

Net Income or Net Loss (-)
Attributable to Owners of the Parent

7

Quarterly Consolidated Statement of Comprehensive Income (Second Quarter)(Thousands of Yen)
Second Quarter Ended

Second Quarter Ended

April 30, 2021

April 30, 2022

1,458,572

1,595,950

108,679-79,753

Deferred Gains or Losses (-) on Hedges

3,965

8,258

Foreign Currency Translation Adjustment

96,821

261,621

Net Defined Benefit-6,424-22,377

203,041

167,747

1,661,613

1,763,698

1,661,613

1,763,698

Net Income
Other Comprehensive Income
Valuation Difference on Available-for-sale Securities

Total Other Comprehensive Income
Comprehensive Income(Breakdown)Comprehensive Income Attributable to Owners of the
Parent8

(3) Quarterly Consolidated Statement of Cash Flows(Thousands of Yen)
Second Quarter Ended

Second Quarter Ended

April 30, 2021

April 30, 2022

Net Cash Provided by (Used in) Operating Activities
Income before Income Taxes

2,045,642

2,335,696

Depreciation and Amortization

193,093

181,288

Increase (Decrease) in Provision for Bonuses(261,230)(397,617)

Increase (Decrease) in Provision for Directors' Bonuses(26,377)(38,427)

Increase (Decrease) in Allowance for Product Warranty
Increase (Decrease) in Net Defined Benefit Liability

95,609(138,624)(7,207)851

Decrease (Increase) in Net Defined Benefit Asset(26,209)(27,537)

(211)

287

(15,393)(18,393)

1,336

1,232

(31,568)(15,820)－(456,447)

Loss on Sale of Investment Securities (Gain)(23,927)－

Loss on Liquidation of Affiliated Company (Gain)(62,996)－(74,054)－－(1,666,043)

Decrease (Increase) in Inventories

619,723(1,226,302)

Increase (Decrease) in Notes and Accounts Payable-Trade622,742

151,044

Increase (Decrease) in Accounts Payable-Others

42,33057,179

Increase (Decrease) in Advances Received

216,355－－664,626

Increase (Decrease) in Consumption Taxes Payable

85,143(166,407)

Others, Net(46,083)(46,615)

3,346,716(806,028)

Interests and Dividends Income Received

15,397

18,436

Interest Expenses Paid

(1,343)(1,239)

Income Taxes Returned (Paid)(173,997)(719,015)

Net Cash Provided by (Used in) Operating Activities

3,186,771(1,507,847)

Increase (Decrease) in Allowance for Doubtful Accounts
Interests and Dividends Income
Interest Expenses
Foreign Exchange Loss (Gain)
Loss on Sale of Noncurrent Assets (Gain)

Decrease (Increase) in Notes and Accounts ReceivableTrade
Decrease (Increase) in Notes, Accounts Receivable-Tradeand Contract Assets

Increase (Decrease) in Contract Liabilities

Sub Total9

(Thousands of Yen)
Second Quarter Ended

Second Quarter Ended

April 30, 2021

April 30, 2022

Net Cash Provided by (Used in) Investment Activities
Disbursement to Time Deposits(8,000,000)(8,000,000)

Withdrawal from Time Deposits

4,000,000

4,000,000

Purchase of Property, Plant and Equipment(169,134)(119,392)

Proceeds from Sale of Property, Plant and Equipment

9,265

491,734

Purchase of Intangible Fixed Assets(4,198)(13,412)Purchase of Investment Securities(10,448)(7,334)

Proceeds from Sale of Investment Securities

47,889－Payments of Loans Receivable

(720)

(540)

Collection of Loans Receivable

760

610

Guarantee Deposits (Increase)(598)(145,021)

Others, Net

141(1,426)(4,127,042)(3,794,782)

(104)

(66)

Cash Dividends Paid

(244,469)(249,457)

Net Cash Provided by (Used in) Financing Activities(244,573)(249,524)

61,184

139,612Net Increase (Decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Period(1,123,660)(5,412,541)

11,857,553

12,607,490

Cash and Cash Equivalents at End of This Quarter

10,733,893

7,194,949

Net Cash Provided by (Used in) Investment Activities
Net Cash Provided by (Used in) Financing Activities
Purchase of Treasury Stock

Cash and Cash Equivalents
Effect of Exchange Rate Change on Cash and Cash
Equivalents10(4) Notes on Quarterly Consolidated Financial Statements(Note for premise of going concern)
There are no pertinent matters to report.
(Notes for significant changes in shareholder’s equity)
There are no pertinent matters to report.
(Changes in accounting policies)(Application of Accounting Standard for Revenue Recognition)
We have applied Accounting Standard for Revenue Recognition (ASBJ Statement No. 29; hereinafter referred to as
Accounting Standard for Revenue Recognition) from the beginning of the consolidated first quarter under review, andwhen control of the promised goods or services is transferred to the customer, we recognize as revenue the amount
expected to be received in exchange for the said goods or services. As a result, for recognition of revenue, mainly thefollowing changes have arisen.
1) Performance obligation identification and transaction price allocation
Regarding construction contracts that include machinery sales and construction, we have changed to the method of
allocating transaction prices on the basis of standalone selling prices after recognizing the performance obligations
relating to machinery sales and construction as separate performance obligations, and then recognizing revenue wheneach of the performance obligations is satisfied.
2) Revenue recognition for construction contracts
In the past, regarding construction contracts for which the outcomes of the construction activities were deemed certain
during the courses of the activities, we applied the percentage-of-completion method, and for other construction
contracts, we applied the completed-contract method. However, we have changed to the method of recognizing
revenue over a specified period of time as the performance obligations are satisfied.

Furthermore, regarding

construction for which the percent complete relating to satisfying the performance obligation cannot reasonably be
estimated, we recognize revenue based on the completed-contract method.
3) Revenue recognition for agent transactions
Regarding transactions for which it is judged that the Company’s performance obligations in the contracts with customers
are agent services to make arrangement for goods or services to be provided by other principals, we record revenue on
a net basis by offsetting net sales to customers that were formerly recorded on a gross basis with the corresponding
costs of sales.
4) Sales discounts
Sales discounts, which we formerly included in non-operating expenses, are deducted from net sales.
Regarding application of Accounting Standard for Revenue Recognition, we comply with the transitional treatmentprescribed in the Article 84 provision of Accounting Standard for Revenue Recognition. The cumulative effect ofretroactively applying the new accounting policy to periods prior to the beginning of the consolidated first quarter has
been added to or subtracted from the retained earnings at the beginning of the quarter under review, and we apply the
new accounting policy beginning from the relevant balance at the beginning of the period. However, applying themethod prescribed in Article 86 of Accounting Standard for Revenue Recognition, we have not retroactively applied the
new accounting policy to contracts for which almost all the revenue amounts were recognized in compliance with theprior treatment until before the beginning of the consolidated first quarter under review.
11

As a result, in the second quarter of the current consolidated fiscal year, net sales decreased 3,306,598,000 yen, costof sales decreased 3,301,825,000 yen, operating income decreased 4,773,000 yen, and ordinary income and income
before income taxes and minority interests decreased 821,000 yen.
Because we applied Accounting Standard for Revenue Recognition, the notes and accounts receivable-trade that wereshown under current assets in the consolidated balance sheet for the previous consolidated fiscal year are shown
included in notes and accounts receivable - trade, and contract assets beginning from the consolidated first quarter. In
addition, the advances received that were shown under current assets are shown included in contract liabilities.
Increase (decrease) in notes and accounts receivable-trade, which was shown in net cash provided by (used in)operating activities in the quarterly consolidated statement of cash flows for the second quarter of the previous
consolidated fiscal year, is shown included in increase (decrease) in notes, accounts receivable-trade and contract
assets from the consolidated second quarter under review, and increase (decrease) in advances received is shown
included in increase (decrease) in contract liabilities.

Furthermore, in compliance with the transitional treatmentprescribed in Article 89-2 of Accounting Standard for Revenue Recognition, for the previous consolidated fiscal year andthe second quarter of the previous consolidated fiscal year, we have not performed a restatement by using the newpresentation method.
(Application of Accounting Standard for Fair Value Measurement)
We have applied Accounting Standard for Fair Value Measurement (ASBJ Statement No. 30; hereinafter referred to as
Accounting Standard for Fair Value Measurement) from the beginning of the consolidated first quarter under review, andin compliance with the transitional treatment prescribed in Article 19 of Accounting Standard for Fair Value Measurement
and Article 44-2 of Accounting Standard for Financial Instruments (ASBJ Statement No. 10), we will in the future apply
the new accounting policy prescribed by Accounting Standard for Fair Value Measurement. Furthermore, there is noeffect on the quarterly consolidated financial statements.
(Changes in presentation method)(Quarterly consolidated statement of cash flow)
Since increase (decrease) in accrued consumption taxes, which was included in others, net under net cash provided by(used in) operating activities in the second quarter of the previous consolidated fiscal year, increased in quantitative
materiality, we present it separately beginning from the consolidated second quarter under review. To reflect thispresentation method change, we have performed a reclassification of the quarterly consolidated financial statements forthe second quarter of the previous consolidated fiscal year.
As a result, we have reclassified the 39,060,000 yen shown in others, net under net cash provided by (used in) operating
activities in the quarterly consolidated statement of cash flows for the second quarter of the previous consolidated fiscal
year as 85,143,000 yen in increase (decrease) in accrued consumption taxes and (46,083,000) yen in others, net.

12

(Segment information, etc.)[Segment information]
Second Quarter Ended April 30, 2021
Information Pertaining to the Amount of Net Sales, Profit or Loss of Each Reporting Segment(Thousands of Yen)
Reported Segment
Machinery & Equipment
Business

Chemical Products
Business

7,443,720

Total

Grand Total

15,604,519

23,048,240

23,048,240

-

-

-

-

Total

7,443,720

15,604,519

23,048,240

23,048,240

Segment Profit

915,126

1,019,456

1,934,583

1,934,583

Net Sales
Net Sales to UnaffiliatedCustomers
Internal Net Sales among
Segments or AmountTransferred(Note) The total amount of segment profit is identical to the operating income reported on the Quarterly Consolidated Statements of Income.

Second Quarter Ended April 30, 2022
Information Pertaining to the Amount of Net Sales, Profit or Loss of Each Reporting Segment(Thousands of Yen)
Reported Segment
Machinery & Equipment
Business

Chemical Products
Business

5,583,096

Total

Grand Total

16,389,354

21,972,451

21,972,451

-

-

-

-

Total

5,583,096

16,389,354

21,972,451

21,972,451

Segment Profit

574,586

1,227,622

1,802,208

1,802,208

Net Sales
Net Sales to UnaffiliatedCustomers
Internal Net Sales among
Segments or AmountTransferred(Note) The total amount of segment profit is identical to the operating income reported on the Quarterly Consolidated Statements of Income.

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