May 10, 2021

Summary of Consolidated Financial Results for the Fiscal Year Ended March 31, 2021 (FY2020)[Japanese GAAP]
Company name:
ZUKEN Inc.
Listing: Tokyo Stock Exchange, First Section
Stock code:
6947
URL: https://www.zuken.co.jp
Representative:
Jinya Katsube, President and Representative Director
Contact:
Susumu Yoshida, General Manager of Finance Department
Tel: +81-45-942-1511
Scheduled date of Annual General Shareholders’ Meeting:June 29, 2021
Scheduled date of payment of dividend:
June 30, 2021
Scheduled date of filing of Annual Securities Report:
June 29, 2021
Preparation of supplementary materials for financial results:
None
Holding of financial results meeting:None(All amounts are rounded down to the nearest million yen)

1. Consolidated Financial Results for the Fiscal Year Ended March 31, 2021 (April 1, 2020 – March 31, 2021)(1) Consolidated results of operations(Percentages represent year-on-year changes)
Net sales

Operating profit

Millions of yen%
Fiscal years ended
Mar. 31, 2021
28,819(1.6)
Mar. 31, 2020
29,296
9.4
Note: Comprehensive income (Millions of yen)

Net income pershare

Millions of yen

Profit attributable toowners of parent

Ordinary profit

Millions of yen%

2,891 (14.7)
3,153
(9.6)
2,137
3,391
11.2
3,486
9.2
2,595
Fiscal year ended Mar. 31, 2021:
4,567 (up 73.4%)
Fiscal year ended Mar. 31, 2020:
2,633 (down 14.4%)%(17.7)
22.8

Diluted net income
per share

Millions of yen%

Ordinary profit on
total assets

Return on equity

Yen
Yen
%
Fiscal years ended
Mar. 31, 2021
91.92
5.8
Mar. 31, 2020
111.65
7.7
Reference: Equity in earnings of associates (Millions of yen) Fiscal year ended Mar. 31, 2021:
Fiscal year ended Mar. 31, 2020:

Operating profit to
net sales

%

%

5.8
7.1

10.0
11.6

-

(2) Consolidated financial position
Total assets

Net assets

Shareholders’ equity ratio

Millions of yen

Millions of yen

As of Mar. 31, 2021
57,168
As of Mar. 31, 2020
51,445
Reference: Shareholders’ equity (Millions of yen)

38,84235,013As of Mar. 31, 2021:

Net assets per share%

38,505

Yen

67.4
67.2
As of Mar. 31, 2020:

1,656.21
1,487.50
34,583(3) Consolidated cash flows
Cash flows fromoperating activities
Fiscal years ended
Mar. 31, 2021
Mar. 31, 2020

Cash flows frominvesting activities

Cash flows fromfinancing activities

Cash and cash equivalents at
end of period

Millions of yen

Millions of yen

Millions of yen

Millions of yen

2,661
4,207

(1,168)(1,034)

(749)
(807)

21,412
20,306

2. Dividends
Dividend per share
1Q-end 2Q-end 3Q-end Year-end
Fiscal year ended Mar. 31, 2020
Fiscal year ending Mar. 31, 2021
Fiscal year ending Mar. 31, 2022
(forecast)

Total

Total dividends

Payout ratio(consolidated)

Dividend on
equity(consolidated)

Yen

Yen

Yen

Yen

Yen

Millions of yen

%

%

-

14.00
15.00

-

15.00
15.00

29.00
30.00

674
697

26.0
32.6

2.0
1.9

-

16.00

-

16.00

32.00

29.8

3. Consolidated Forecast for the Fiscal Year Ending March 31, 2022 (April 1, 2021 – March 31, 2022)
Net sales
Millions of yen

Operating profit%

Millions of yen

Ordinary profit% Millions of yen(Percentages represent year-on-year changes)
Profit attributable to
Net income perowners of parent
shareMillions of yen%

Yen

Full year
31,000
7.6
3,500
21.0
3,600
14.2
2,500
Note: Only the full-year forecast is shown because Zuken manages performance on a fiscal year basis.

%

17.0

107.53

* Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in change in scopeof consolidation): None
(2) Changes in accounting policies and accounting-based estimates, and restatements(a) Changes in accounting policies due to revisions in accounting standards, others:None(b) Changes in accounting policies other than (a) above:None(c) Changes in accounting-based estimates:

None(d) Restatements:

None(3) Number of outstanding shares (common stock)(a) Number of shares outstanding at the end of the period (including treasury shares)
As of Mar. 31, 2021:

23,267,169 shares

As of Mar. 31, 2020:

23,267,169 shares

As of Mar. 31, 2020:

17,680 shares(b) Number of treasury shares at the end of the period
As of Mar. 31, 2021:

18,026 shares(c) Average number of shares outstanding during the period
Fiscal year ended Mar. 31, 2021:

23,249,298 sharesFiscal year ended Mar. 31, 2020:

23,249,578 shares

Reference: Summary of Non-consolidated Financial Results
Non-consolidated Financial Results for the Fiscal Year Ended March 31, 2021 (April 1, 2020 – March 31, 2021)(1) Non-consolidated results of operations
Net sales
Fiscal years ended
Mar. 31, 2021
Mar. 31, 2020

(Percentages represent year-on-year changes)
Ordinary profit
ProfitOperating profit

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

11,135
12,072

(7.8)
7.5

1,342
1,680

(20.1)
15.4

2,662
2,553

4.3
18.5

2,236
2,277

(1.8)
27.7

Net income per share
Fiscal years ended
Mar. 31, 2021
Mar. 31, 2020

Diluted net income per share

Yen

Yen

96.21
97.96

-

(2) Non-consolidated financial position
Total assets

Net assets

Millions of yen

Millions of yen

As of Mar. 31, 2021
43,654As of Mar. 31, 2020
39,464
Reference: Shareholders’ equity (Millions of yen)

37,20833,427
As of Mar. 31, 2021:

Shareholders’ equity ratio

Net assets per share%

37,20885.2
84.7
As of Mar. 31, 2020:

Yen

1,600.44
1,437.76
33,427* This financial report is not subject to audit by certified public accountants or auditing firms.
* Cautionary statement with respect to forward-looking statements and other special items
Forecasts of future performance in this report are based on assumption judged to be valid and information available to theCompany’s management at the time this report was prepared, but are not promises by the Company regarding future performance.
Actual results may differ substantially from the forecasts for a number of reasons. Please refer to “1. Overview of Results ofOperations, etc., (4) Outlook” on page 5 for forecast assumptions and notes of caution for usage.

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2021

Contents of Attachments
1.

Overview of Results of Operations, etc. .............................................................................................................. 1(1) Results of Operations ........................................................................................................................................ 2(2) Financial Position .............................................................................................................................................. 3(3) Cash Flows ........................................................................................................................................................ 3(4) Outlook ............................................................................................................................................................. 4

2.

Basic Approach for the Selection of Accounting Standards ................................................................................. 4

3.

Consolidated Financial Statements and Notes ..................................................................................................... 5(1) Consolidated Balance Sheet .............................................................................................................................. 5(2) Consolidated Statements of Income and Comprehensive Income ...................................................................... 7
Consolidated Statement of Income ...................................................................................................................... 7
Consolidated Statement of Comprehensive Income............................................................................................. 8(3) Consolidated Statement of Changes in Equity ................................................................................................... 9(4) Consolidated Statement of Cash Flows ............................................................................................................ 11(5) Notes to Consolidated Financial Statements .................................................................................................... 12
Going Concern Assumption............................................................................................................................... 12
Basis of Presenting the Consolidated Financial Statements ............................................................................... 12
Notes to Consolidated Balance Sheet ................................................................................................................ 14
Notes to Consolidated Statement of Income ...................................................................................................... 14
Notes to Consolidated Statement of Comprehensive Income ............................................................................ 15
Notes to Consolidated Statement of Changes in Equity ..................................................................................... 15
Notes to Consolidated Statement of Cash Flows ............................................................................................... 16
Financial Instruments ........................................................................................................................................ 16
Marketable Securities ........................................................................................................................................ 18
Segment Information ......................................................................................................................................... 19
Per-share Information ........................................................................................................................................ 20
Subsequent Events............................................................................................................................................. 20

4.

Production, Orders and Sales ............................................................................................................................. 21

5.

Non-consolidated Financial Statements ............................................................................................................. 22(1) Balance Sheet .................................................................................................................................................. 22(2) Statement of Income........................................................................................................................................ 24(3) Statement of Changes in Equity ...................................................................................................................... 25

1

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2021

1. Overview of Results of Operations, etc.
(1) Results of Operations
In the fiscal year ending March 2021, the business climate was challenging due to the weakness of economies
worldwide caused by severe restrictions put in place to deal with the COVID-19 pandemic.
Manufacturers in the electronics, automotive and industrial equipment sectors are the main customers of the Zuken
Group. Although companies in these sectors were cautious about capital expenditures due to the uncertainty, many
companies continued to make substantial IT investments.
The Zuken Group continued to take numerous actions in order to become a “truly global company” able to supply thebest-in-class solutions to manufacturers worldwide. Despite the challenges created by the COVID-19 crisis, we
continued to focus on increasing the efficiency of business activities, upgrading the functions of core products anddeveloping new products. Major initiatives of the fiscal year were as follows.
(i) Continued business operations during the COVID-19 crisis
The Zuken Group quickly leveraged remote accessing tools to allow our employees to work remotely andminimize the impact of COVID-19 on business operations. Many of these initiatives have given us improvementsthat will last beyond the current crisis.
Though the crisis limited sales activities because of restrictions on face-to-face contact. We were able to maintaincommunication with our customers with the introduction of ZUKEN digital, a new web communication tool forthe optimization of one-to-one interaction. The use of this new tool helped to drive orders and sales. In addition,
as we were already engaged in cross-border product development, we were able to quickly and efficiently shift
to remote development and establish an environment that allows working from home. Subsequently, COVID-19
had little to no effect on our product development activities during the fiscal year.
(ii) Upgraded the Functions of core products and development of new products
There were numerous measures to make our core CR-8000 Design Force, an electronic system design solution
series, more competitive. We increased the use of artificial intelligence, upgraded analytic capabilities, maderemote design operations more convenient along with other improvements.
In the automotive and industrial equipment manufacturing sectors we expedited the development activities forE3.infinite, a new wire harness design system that combines and further refines products of Japan and Germany,
along with DS-E3.infinite, an electrical design data management system for use with E3.infinite.
In the field of model-based systems engineering (MBSE), we created a link between GENESYS, a product of a
Zuken U.S. subsidiary with highly advanced MBSE technologies, and the CR-8000 series and rolled out many
activities to promote the use of this new design methodology.
*MBSE is a next-generation methodology that is starting to be used for fabricating products that are complex andrequire very high quality. Companies in the aerospace, automobile and other industries are using MBSE. Thisapproach allows electrical, mechanical, software and other engineers to perform their tasks based on a single
model. The main goal is to optimize at the conceptual planning stage the development of products that require
an intricate combination of a range of technologies.
Consolidated results
Net sales
Ordinary profit
Profit attributable to owners of parent

28,819 million yen
3,153 million yen
2,137 million yen(down 1.6% year on year)(down 9.6% year on year)(down 17.7% year on year)

Although sales were lower than one year earlier, fiscal year sales were still the second-highest ever following therecord-high sales of the previous fiscal year despite the challenging business climate. Increasing demand involving
network security and cloud environments was a major reason for this performance. Sales of network secur ity andstorage products increased at a subsidiary in Japan and there was an increase in sales of IT solutions.
Earnings decreased because the negative effect of lower sales outweighed the benefit of a decrease in expenses
resulting from restrictions on business activities due to COVID-19.
2

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2021

Product category sales were as follows.
Product category sales
Printed Circuit Board design solutions
Circuit design solutions
IT solutions
Client services

4,248 million yen
5,926 million yen
7,042 million yen
11,596 million yen(down 11.2% year on year)(down 19.5% year on year)(up 13.7% year on year)(up 5.9% year on year)

CR-8000 Design Force
CR-8000 DFM Center
CADSTAReCADSTAR

CR-5000 Board Designer

Major products of Printed Circuit Board design
solutionsCR-5000 System Designer

Major products of Circuit design solutions

CR-8000 Design Gateway
CR-8000 System Planner
E3.series
Cabling Designer
Harness Designer

Major products of IT solutions

PreSight visual BOM
DS-CR
DS-2 Expresso
DS-E3
GENESYS(2) Financial Position
Total assets at the end of the fiscal year under review increased 5,722 million yen from the end of the previous fiscal
year to 57,168 million yen. The main factors were increases of 3,728 million yen in investment securities, 1,118
million yen in cash and deposits, and 693 million yen in prepaid expenses.
Liabilities at the end of the fiscal year under review increased 1,893 million yen from the end of the previous fiscal
year to 18,325 million yen. The main factors were increases of 1,016 million yen in deferred tax liabilities and 905
million yen in advances received.
Net assets at the end of the fiscal year under review increased 3,828 million yen from the end of the previous fiscal
year to 38,842 million yen and the shareholders’ equity ratio was 67.4%.
(3) Cash Flows
Cash and cash equivalents (hereafter “cash”) at the end of the fiscal year under review increased 1,105 million yen
over the end of the previous fiscal year to 21,412 million yen.
Cash flows by category were as follows.
Cash flows from operating activities
Net cash provided by operating activities decreased 1,546 million yen from the previous fiscal year to 2,661 million
yen. The main cash inflows were profit before income taxes of 2,978 million yen (a year-on-year decrease of 640
million yen), an increase in advances received of 772 million yen (a year-on-year decrease of 549 million yen),depreciation of 701 million yen (a year-on-year increase of 7 million yen). The main cash outflow was income taxes
paid of 1,053 million yen (a year-on-year decrease of 5 million yen).
Cash flows from investing activities
Net cash used in investing activities increased 134 million yen from the previous fiscal year to 1,168 million yen. The
main cash outflows include purchase of non-current assets of 613 million yen (a year-on-year decrease of 108 million
yen) and purchase of investment securities of 499 million yen (a year-on-year increase of 399 million yen).

3

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2021

Cash flows from financing activities
Net cash used in financing activities decreased 57 million yen from the previous fiscal year to 749 million yen. Thiswas mainly due to cash dividends paid of 697 million yen (a year-on-year increase of 46 million yen).
Cash flow indicators were as follows:
Fiscal years ended

March 31, 2018

March 31, 2019

March 31, 2020

March 31, 2021

Shareholders’ equity ratio

69.0%

69.1%

67.2%

67.4%

Shareholders’ equity ratio based on market prices

78.1%

73.8%

104.2%

114.9%

Interest-bearing debt to cash flow ratio

0.9%

0.9%

2.0%

2.3%

28,300.6

11,290.9

977.3

1,205.4

Interest coverage ratio

Calculation formula: Shareholders’ equity ratio: Shareholders’ equity / Total assets
Shareholders’ equity ratio based on market prices: Market capitalization / Total assets
Interest-bearing debt to cash flow ratio: Interest-bearing debt / Operating cash flows
Interest coverage ratio: Operating cash flows / Interest payments
Notes: 1. All indicators are calculated based on consolidated figures.
2. Market capitalization is calculated based on the number of shares outstanding (excluding treasury shares).
3. Operating cash flows are calculated using the figures for operating cash flows on the consolidated statement of cash
flows.
4. Interest-bearing debt includes all liabilities on the consolidated balance sheet that incur interest.

(4) Outlook
We expect the outlook to remain uncertain because of the possibility that the COVID-19 pandemic will not end in thenear future. Dramatic changes are taking place worldwide in how products are manufactured because of advances in
artificial intelligence, the increasing speed of communications and other progress. We believe these changes will resultin an expansion of the business domains where the software technologies of the Zuken Group can be used and expectthat these market sectors will continue to grow.
The Zuken Group is determined to achieve more growth in corporate value by supplying innovative solutions that
help client companies upgrade their manufacturing operations.
We forecast net sales of 31,000 million yen, ordinary profit of 3,600 million yen, and profit attributable to owners ofparent of 2,500 million yen in the fiscal year ending March 31, 2022.
* These forecasts are based on information available at the time this report was prepared and actual results may
differ from these forecasts for a number of reasons.

2. Basic Approach for the Selection of Accounting Standards
The Zuken Group will continue to prepare consolidated financial statements in accordance with generally accepted
accounting principles in Japan for the time being to permit comparisons with prior years and with the financial dataof other companies.
We will take suitable actions with regard to the application of International Financial Reporting Standards by taking
into account associated factors in Japan and other countries.

4

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2021

3. Consolidated Financial Statements and Notes(1) Consolidated Balance SheetFY2019(As of Mar. 31, 2020)(Thousands of yen)
FY2020(As of Mar. 31, 2021)

AssetsCurrent assets
Cash and deposits

20,574,644

21,693,586

Notes and accounts receivable-trade

6,407,981

6,806,824

Securities

6,700,000

6,700,000

Merchandise and finished goods

403,944466,069

Work in process

264,482

101,913

1,862

2,158

2,559,117

3,252,730

190,032

272,520

Raw materials and supplies
Prepaid expenses
Other
Allowance for doubtful accounts(29,587)(19,098)

37,072,477

39,276,705

9,398,922

9,470,909

Accumulated depreciation(6,549,021)(6,710,781)

Buildings and structures, net

2,849,901

2,760,128

Machinery, equipment and vehicles

95,91399,720(60,821)(72,860)

35,091

26,860Tools, furniture and fixtures

2,012,463

2,180,037

Accumulated depreciation(1,615,356)(1,775,169)

397,107404,868

3,015,103

3,015,103

Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures

Accumulated depreciation
Machinery, equipment and vehicles, net

Tools, furniture and fixtures, net
Land
Leased assets
Accumulated depreciation
Leased assets, net

134,378

144,212(54,926)(87,718)

79,45256,493

6,376,656

6,263,454

Goodwill

913,777

656,516

Other

602,140

640,839

1,515,917

1,297,355

Investment securities

5,385,293

9,114,007Deferred tax assets

564,101

637,383

Other

548,198

595,923

Total property, plant and equipment
Intangible assets

Total intangible assets
Investments and other assets

Allowance for doubtful accounts(16,752)(16,752)

Total investments and other assets

6,480,840

10,330,561

14,373,415

17,891,371

51,445,892

57,168,076

Total non-current assets
Total assets

5

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2021

(Thousands of yen)
FY2020(As of Mar. 31, 2021)

FY2019(As of Mar. 31, 2020)
Liabilities
Current liabilities
Accounts payable-trade

1,177,418

1,166,026

Income taxes payable

716,954

578,485

Advances received

6,783,516

7,688,741

Provision for bonuses

902,008

925,619

Provision for bonuses for directors (and other officers)

66,600101,900

Other provisions

70,207

8,216

Other

2,303,253

2,181,249

Total current liabilities

12,019,959

12,650,238

Non-current liabilities
Deferred tax liabilities
Retirement benefit liability
Other
Total non-current liabilities
Total liabilities

328

1,017,192

4,192,059

4,457,677

220,237

200,867

4,412,625

5,675,738

16,432,584

18,325,976

10,117,065

10,117,065

Net assets
Shareholders’ equity
Share capital
Capital surplus

8,659,023

8,662,477

Retained earnings

14,175,240

15,614,931

Treasury shares(16,778)(17,734)

32,934,550

34,376,739

Valuation difference on available-for-sale securities

2,266,875

4,510,039

Foreign currency translation adjustment(86,604)

48,857

Total shareholders’ equity
Accumulated other comprehensive income

Remeasurements of defined benefit plans(531,321)(430,263)

Total accumulated other comprehensive income

1,648,949

4,128,633

429,808

336,727

35,013,308

38,842,100

51,445,892

57,168,076

Non-controlling interests
Total net assets
Total liabilities and net assets

6

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2021

(2) Consolidated Statements of Income and Comprehensive Income
Consolidated Statement of Income
FY2019(Apr. 1, 2019 – Mar. 31, 2020)(Thousands of yen)
FY2020(Apr. 1, 2020 – Mar. 31, 2021)

Net sales

29,296,353

28,819,265

Cost of sales

8,524,666

8,774,685

Gross profit

20,771,686

20,044,579

Selling, general and administrative expenses

17,380,445

17,153,194

Operating profit

3,391,241

2,891,384

Interest income

15,286

8,669

Dividend income

66,27867,605-49,018

Subsidy income

36,91765,908

Received incentive

22,257

21,611Other

30,52553,479Total non-operating income

171,266

266,292

Interest expenses

4,305

2,208

Foreign exchange losses

70,127

-

Other

1,315

2,141

Non-operating income

Foreign exchange gains

Non-operating expenses

Total non-operating expenses

75,747

4,349

3,486,759

3,153,326

2,506

1,392

Transfer of rights income

137,358-

Total extraordinary income

139,864

1,392

Ordinary profit
Extraordinary income
Gain on sales of non-current assets

Extraordinary losses
Loss on disposal of non-current assets

5,246

20,368Loss on cancel of contracts-

127,000

Retirement benefit expenses-

24,962

Loss on sales of investment securities
Provision of allowance for doubtful accounts of golf clubmembership
Total extraordinary losses

-

3,499

2,000

-

7,246

175,829

Profit before income taxes

3,619,377

2,978,889

Income taxes-current

1,151,151

912,376

Income taxes-deferred(133,618)(21,716)

Total income taxes

1,017,533

890,660

Profit2,601,844

2,088,229

6,076(48,943)2,595,767

2,137,173

Profit (loss) attributable to non-controlling interests
Profit attributable to owners of parent

7

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2021

Consolidated Statement of Comprehensive Income
FY2019(Apr. 1, 2019 – Mar. 31, 2020)(Thousands of yen)
FY2020(Apr. 1, 2020 – Mar. 31, 2021)

2,601,844

2,088,229

Valuation difference on available-for-sale securities

244,477

2,243,164

Foreign currency translation adjustment(109,588)

135,461

Remeasurements of defined benefit plans, net of tax(103,101)

101,057

31,7872,479,684

2,633,631

4,567,913

2,627,554

4,616,857

6,076(48,943)

ProfitOther comprehensive income

Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests

8

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2021

(3) Consolidated Statement of Changes in Equity
FY2019 (Apr. 1, 2019 – Mar. 31, 2020)(Thousands of yen)
Shareholders’ equity
Retained
Capital surplus
Treasury sharesearnings

Share capital
Balance at beginning of period

10,117,065

8,659,016

12,230,462

Total shareholders’equity(16,365)

30,990,177

Changes during period
Dividends of surplus
Profit attributable to owners ofparentOther(650,989)(650,989)

2,595,767

2,595,767

7

7Purchase of treasury shares(413)

Net changes other thanshareholders’ equity
Total changes during period
Balance at end of period

(413)

-

7

1,944,777(413)

1,944,372

10,117,065

8,659,023

14,175,240(16,778)

32,934,550

Accumulated other comprehensive income
Valuationdifference on
available-forsale securities
Balance at beginning of period

2,022,397

Total
NonRemeasurements accumulated controllingof defined
otherinterests
benefit plans comprehensive
income22,984(428,220)1,617,162
442,715

Foreigncurrencytranslation
adjustment

Total net
assets

33,050,055

Changes during period
Dividends of surplus(650,989)

Profit attributable to owners ofparentOther
Purchase of treasury shares
Net changes other thanshareholders’ equity
Total changes during period
Balance at end of period

2,595,767
7(413)
244,477(109,588)(103,101)

31,787(12,906)

18,880244,477(109,588)(103,101)

31,787(12,906)

1,963,252

2,266,875(86,604)(531,321)

1,648,949

429,80835,013,308

9

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2021

FY2020 (Apr. 1, 2020 – Mar. 31, 2021)(Thousands of yen)
Shareholders’ equity
Retained
Capital surplus
Treasury sharesearnings

Share capital
Balance at beginning of period

10,117,065

8,659,023

14,175,240

Total shareholders’equity(16,778)

32,934,550

Changes during period
Dividends of surplus
Profit attributable to owners ofparentOther(697,482)(697,482)

2,137,173

2,137,173

3,453

3,453

Purchase of treasury shares(955)

Net changes other thanshareholders’ equity
Total changes during period
Balance at end of period

(955)

-

3,453

1,439,690(955)

1,442,188

10,117,065

8,662,477

15,614,931(17,734)

34,376,739

Accumulated other comprehensive income
Valuationdifference on
available-forsale securities
Balance at beginning of period

2,266,875

Total
NonRemeasurements accumulated controllingof defined
otherinterests
benefit plans comprehensive
income(86,604)(531,321)
1,648,949
429,808

Foreigncurrencytranslation
adjustment

Total net
assets35,013,308

Changes during period
Dividends of surplus
Profit attributable to owners ofparentOther(697,482)
2,137,173
3,453

Purchase of treasury shares
Net changes other thanshareholders’ equity
Total changes during period(955)
2,243,164

135,461

101,057

2,479,684(93,080)

2,386,603

2,243,164

135,461

101,057

2,479,684(93,080)

3,828,792

Balance at end of period

4,510,039

48,857(430,263)

4,128,633

336,727

38,842,100

10

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2021

(4) Consolidated Statement of Cash FlowsFY2019(Apr. 1, 2019 – Mar. 31, 2020)(Thousands of yen)
FY2020(Apr. 1, 2020 – Mar. 31, 2021)

3,619,377

2,978,889

Depreciation

694,125

701,838

Amortization of goodwill

219,344

247,095

Interest and dividend income(81,565)(76,274)

Foreign exchange losses (gains)

9,494(7,408)Cash flows from operating activities
Profit before income taxes

Loss (gain) on sales of investment securities

-

3,499

Transfer of rights income(137,358)-

Decrease (increase) in trade receivables(584,879)(286,213)

Increase (decrease) in trade payables

351,540(213,418)

Increase (decrease) in advances received

1,321,834

772,813

Decrease (increase) in prepaid expenses(407,794)(674,724)

Increase (decrease) in retirement benefit liability

260,409260,964

Other, net(74,479)(66,757)

Subtotal

5,190,050

3,640,303

Interest and dividends received

81,10376,881

Interest paid

(4,305)(2,208)(1,059,136)(1,053,471)

4,207,711

2,661,505

Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Decrease (increase) in time deposits

93,000-Purchase of property, plant and equipment(446,002)(259,208)

Purchase of intangible assets(275,690)(353,845)

Purchase of investment securities
Purchase of shares of subsidiaries resulting in change
in scope of consolidation
Proceeds from transfer of rights(100,800)(499,999)(432,557)-

137,358-

Other, net(9,875)(55,568)(1,034,567)(1,168,621)

Repayments of short-term borrowings(79,443)-

Repayments of long-term borrowings(25,797)-

Net cash provided by (used in) investing activities
Cash flows from financing activities

Purchase of treasury shares
Dividends paid
Other, net

(413)

(955)

(650,989)(697,482)(50,735)(51,405)(807,380)(749,843)(196,708)

362,536

2,169,055

1,105,578

Cash and cash equivalents at beginning of period

18,137,895

20,306,950

Cash and cash equivalents at end of period

20,306,950

21,412,529

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

11

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2021

(5) Notes to Consolidated Financial Statements
Going Concern Assumption
Not applicable.
Basis of Presenting the Consolidated Financial Statements
1. Scope of consolidation(1) Number of consolidated subsidiaries: 22
Main consolidated subsidiaries: Zuken USA Inc., Zuken GmbH, Zuken Limited, Zuken Tec Inc., Zuken NetWave Inc.
(2) Number of non-consolidated subsidiaries: 1
This subsidiary is not included in the scope of consolidation since it is a small-scale business whose total assets, net sales,
profit (equity in earnings) and retained earnings (equity in earnings) have no significant effect on the overall results ofconsolidated financial statements.
2. Application of equity method
Number of non-consolidated subsidiaries not accounted for under the equity method: 1
This subsidiary is not included in the scope of application of the equity method since it is a small -scale business whose
profit (equity in earnings) and retained earnings (equity in earnings) have no significant effect on the overall results ofconsolidated financial statements.
3. Fiscal year-ends of consolidated subsidiaries
Among the consolidated subsidiaries, the fiscal year-end of Zuken Korea Inc., Zuken Singapore Pte. Ltd. and Zuken Taiwan
Inc. is the end of February, and the fiscal year-end of Zuken Shanghai Technical Center Co., Ltd. and Zuken Vitech Inc.is theend of December.
The consolidated financial statements include the financial statements of consolidated subsidiaries as of their fiscal year -ends.
However, adjustments to the consolidated financial statements are made as needed for significant transactions at the above
five subsidiaries with different fiscal year-ends that occur between their fiscal year-ends and the fiscal year-end for the
consolidated financial statements.
4. Accounting standards(1) Valuation standards and methods for principal assets(a) Securities
Available-for-sale securities
Marketable securities:
Stated at fair value using quoted market price on the balance sheet date. (Unrealized gain or loss
is included in net assets. Cost of securities sold is determined by the moving-average method.)
Non-marketable securities: Stated at cost determined by the moving-average method.
(b) Inventories
Valued at the cost method (the book value on the balance sheet is written down to reflect the effect of lower profitability).
Merchandise:Primarily stated at cost, determined by the moving-average method.
Finished goods and work in process: Stated at cost, determined by the specific identification method at the Company and its
major consolidated subsidiaries, and stated at cost, determined by the periodic averagemethod at some consolidated subsidiaries.
Raw materials: Stated at cost, determined by the moving-average method at the Company, and stated at cost, determined by
the specific identification method at major consolidated subsidiaries.
Supplies:
Stated at cost, determined by the last purchased price method at the Company and its major consolidated
subsidiaries.
(2) Depreciation and amortization of significant depreciable assets(a) Property, plant and equipment (excluding leased assets)
Depreciation of property, plant and equipment at the Company and its domestic consolidated subsidiaries is calculated by the
declining-balance method, except for facilities attached to buildings and structures acquired on or after April 1, 2016 andbuildings (excluding attached facilities) of which depreciation is calculated by the straight -line method. Overseas
consolidated subsidiaries compute depreciation mainly by the straight-line method.
Estimated useful lives of principle assets are as follows:

12

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2021

Buildings and structures:
Tools, furniture and fixtures:

3 years to 60 years
2 years to 20 years(b) Intangible assets (excluding leased assets)
Software for sale at the Company and its domestic consolidated subsidiaries is amortized using the straight -line method
over the period of validity starting when sales begin (not more than three years) and software for internal use at thesecompanies is amortized using the straight-line method over the estimated useful lives (not more than five years).
Amortization of other intangible assets is calculated by the straight-line method.
(c) Leased assets
Depreciation of finance lease transactions where there is no transfer of ownership is calculated based on the straight-line
method, assuming the lease period to be the useful lives and a residual value of zero.
(3) Recognition of significant allowances(a) Allowance for doubtful accounts
To prepare for losses on doubtful accounts such as notes and account receivables-trade and loans receivable, allowances
equal to the estimated amount of uncollectible receivables are booked for general receivables based on the historical write off ratio, and bad receivables based on case-by-case determination of collectibility.
(b) Provision for bonuses
To provide for employee bonus obligation, the Company and some consolidated subsidiaries provide an allowance at theamount based on the estimated bonus obligations.
(c) Provision for bonuses for directors (and other officers)
To provide for bonuses for directors (and other officers), the Company and some consolidated subsidiaries provide anallowance at the amount based on the estimated bonus obligations.
(4) Accounting for retirement benefit(a) Allocation method for the estimated retirement benefit obligations
For the determination of retirement benefit obligations, the benefit formula standard is used as the method for allocating
estimated retirement payments over the period ending in the fiscal year under review.
(b) Accounting for actuarial gain or loss and past service cost
Past service cost is charged to expenses for the fiscal year when they were incurred.
Actuarial gain or loss is amortized and charged to expenses in the year following the fiscal year in which such gain or loss isrecognized by the straight-line method over five years.
(5) Recognition of significant income and expenses
Recognition criteria for net sales and cost of sales of completed construction contracts(a) The portion of contracted work deemed to have been completed by the end of the fiscal year under review
The percentage-of-completion standard (with the percentage of completion estimated on the cost -to-cost basis).
(b) Other contrac1ted works
The completed-contract standard.
(6) Translation of significant foreign currency-denominated assets and liabilities
Foreign currency receivables and payables are translated into Japanese yen at year-end exchange rates and resulting exchange
gains or losses are recognized in earnings currently. All assets and liabilities of overseas consolidated subsidiaries andaffiliates are translated into Japanese yen at year-end exchange rates, and income and expenses into Japanese yen at the
average of the exchange rates in effect during each fiscal period, and resulting exchange gains or losses are included inforeign currency translation adjustment and non-controlling interests under the net assets section.
(7) Amortization method and amortization period of goodwill
Goodwill is amortized using the straight-line method within 15 years, with the number of years determined by the origin of the
goodwill.
(8) Scope of cash and cash equivalents on consolidated statement of cash flows
Cash and cash equivalents consist of cash on hand and readily available deposits and short -term investments which can beeasily converted to cash and are exposed to little risk of change in value.

13

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2021

(9) Other significant accounting policies in the preparation of consolidated financial statements
Accounting for consumption taxes, etc.
Consumption taxes, etc. are accounted by the tax-exclusion method.

Notes to Consolidated Balance Sheet
Investments and other assets for non-consolidated subsidiaries are as follows.
(Thousands of yen)
FY2020(As of Mar. 31, 2021)

FY2019(As of Mar. 31, 2020)
Other (Investments in capital)

11,76911,500FY2019(Apr. 1, 2019 – Mar. 31, 2020)(Thousands of yen)
FY2020(Apr. 1, 2020 – Mar. 31, 2021)

Notes to Consolidated Statement of Income
1. Major items of selling, general and administrative expenses are as follows.

Salaries and allowances

5,983,283

5,938,961

Depreciation

577,270

587,815

Provision for bonuses

604,514

611,517

Provision for bonuses for directors (and other officers)

66,600101,900

Retirement benefit expenses

476,237

499,755

4,041,272

4,174,951

Research and development expenses

2. Total amount of research and development expenses included in general and administrative expenses(Thousands of yen)
FY2019FY2020(Apr. 1, 2019 – Mar. 31, 2020)(Apr. 1, 2020 – Mar. 31, 2021)
4,041,272

4,174,951

3. Breakdown of gain on sales of non-current assets is as follows.
FY2019(Apr. 1, 2019 – Mar. 31, 2020)
2,421

VehiclesTools, furniture and fixtures, and others
Total(Thousands of yen)
FY2020(Apr. 1, 2020 – Mar. 31, 2021)
1,276

85

116

2,506

1,392

4. Breakdown of loss on disposal of non-current assets is as follows.
FY2019(Apr. 1, 2019 – Mar. 31, 2020)
1,869

SoftwareTools, furniture and fixtures, and others
Total

14

(Thousands of yen)
FY2020(Apr. 1, 2020 – Mar. 31, 2021)
19,838

3,377

529

5,246

20,368ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2021

Notes to Consolidated Statement of Comprehensive Income
Re-classification adjustments and tax effect with respect to other comprehensive income
FY2019(Apr. 1, 2019 – Mar. 31, 2020)(Thousands of yen)
FY2020(Apr. 1, 2020 – Mar. 31, 2021)

364,8153,232,226--

Before tax effect adjustments

364,8153,232,226

Tax effect(120,338)(989,061)

Valuation difference on available-for-sale securities

244,477

2,243,164(109,588)

135,461(249,353)(74,692)

Valuation difference on available-for-sale securities:
Amount incurred during the period
Re-classification adjustments

Foreign currency translation adjustment:
Amount incurred during the period
Remeasurements of defined benefit plans, net of tax:
Amount incurred during the period
Re-classification adjustments
Before tax effect adjustments
Tax effectRemeasurements of defined benefit plans, net of tax
Total other comprehensive income

125,005

159,071(124,348)

84,37921,247

16,678(103,101)
31,787101,057
2,479,684

Notes to Consolidated Statement of Changes in Equity
FY2019 (Apr. 1, 2019 – Mar. 31, 2020)
1. Type of share and number of shares of outstanding shares and treasury shares
Number of shares
Increase
as of Apr. 1, 2019
Outstanding shares(Shares)Number of shares
as of Mar. 31, 2020

Decrease

Common stock

23,267,169--

23,267,169

Total

23,267,169--

23,267,169

17,480200-

17,680Treasury shares
Common stock (Note)
Total

17,480200
Note: Number of treasury shares of common stock increased 200 shares due to the acquisition of odd -lot shares.

17,6802. Dividends(1) Dividend payment
Resolution

Type of share

General Shareholders’Meeting on Jun. 27, 2019
Board of Directors’ meetingon Nov. 11, 2019

Commonstock
Commonstock

Total dividends(Thousands of yen)

Dividend pershare (Yen)Record date

Effective date

325,495

14

Mar. 31, 2019

Jun. 28, 2019

325,494

14

Sep. 30, 2019

Dec. 3, 2019(2) Dividends with a record date in the fiscal year under review but an effective date in the following fiscal year
Type of
Total dividends
Source ofDividend per
Resolution
Record dateshare
(Thousands of yen)funds
share (Yen)General Shareholders’CommonRetained
348,742
15 Mar. 31, 2020
Meeting on Jun. 26, 2020
stock
earnings

15

Effective dateJun. 29, 2020

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2021

FY2020 (Apr. 1, 2020 – Mar. 31, 2021)
1. Type of share and number of shares of outstanding shares and treasury shares
Number of shares
Increase
as of Apr. 1, 2020
Outstanding shares(Shares)Number of shares
as of Mar. 31, 2021

Decrease

Common stock

23,267,169--

23,267,169

Total

23,267,169--

23,267,169

Common stock (Note)

17,680346-

18,026

Total

17,680346-

18,026

Treasury shares

Note: Number of treasury shares of common stock increased 346 shares due to the acquisition of odd -lot shares.
2. Dividends(1) Dividend payment
Resolution

Type of share

General Shareholders’Meeting on Jun. 26, 2020
Board of Directors’ meetingon Nov. 9, 2020

Commonstock
Commonstock

Total dividends(Thousands of yen)

Dividend pershare (Yen)Record date

Effective date

348,74215

Mar. 31, 2020

Jun. 29, 2020

348,739

15

Sep. 30, 2020

Dec. 2, 2020

(2) Dividends with a record date in the fiscal year under review but an effective date in the following fiscal year
Type of
Total dividends
Source ofDividend per
Resolution
Record dateshare
(Thousands of yen)funds
share (Yen)General Shareholders’CommonRetained
348,737
15 Mar. 31, 2021
Meeting on Jun. 29, 2021
stock
earnings

Effective dateJun. 30, 2021

Notes to Consolidated Statement of Cash Flows
Reconciliation of cash and cash equivalents at end of period and amount of consolidated balance sheet is made as follows.
(Thousands of yen)
FY2019FY2020(Apr. 1, 2019 – Mar. 31, 2020)(Apr. 1, 2020 – Mar. 31, 2021)
20,574,644
Cash and deposits
21,693,586
Time deposit with maturities over three months(267,693)(281,057)

Cash and cash equivalents

20,306,950

21,412,529

Financial Instruments
1. Conditions of financial instruments(1) Policy for handling financial instruments
Safety is the highest priority of the Zuken Group when investing funds in financial instruments, while also taking into accou nt
credit risk, interest rates and other factors. Funds are invested in financial instruments that are believed to have an extre mely
small risk of the value falling below face value.
(2) Details of financial instruments, their risks and risk management system
Notes and accounts receivable-trade, which are operating receivables, are vulnerable to credit risk associated with customers .
The Company performs rigorous credit management for each customer and supervise payment dates and balances. In addition,
there are measures to quickly identify doubtful receivables caused by a decline in a customer’s financial soundness or otherevent and to reduce the amount of these receivables.
Marketable securities and investment securities are mainly stock of companies with relationships with the Zuken Group. These
securities are vulnerable to risk associated with changes in their market prices. The Company periodically checks fair values, thefinancial condition of issuers and other items in order to quickly identify securities that may need to be written down and r educe
the amount of these securities.
Accounts payable-trade, which is operating debt, is mostly due within one year.

16

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2021

(3) Supplemental explanation concerning fair values, etc. of financial instruments
Fair value of the financial instrument is measured at a quoted market price, if available, or reasonably assessed value if a quoted
market price is not available. As the calculation of the reasonably assessed value incorporates varying factors, the amount mayvary if different assumptions are used.
2. Items related to fair values of financial instruments
The book value, fair value, and their differences are shown as follows. However, financial instruments whose fair value isdeemed to be extremely difficult to measure are not included (please refer to Note 2 below.)
FY2019 (As of Mar. 31, 2020)
Book value(Thousands of yen)
Difference

Fair value(1) Cash and deposits

20,574,644

20,574,644-(2) Notes and accounts receivable-trade(3) Marketable securities and investment
securities
Assets total

6,407,981

6,407,981-

11,691,982

11,691,982-

38,674,608

38,674,608-(1) Accounts payable-trade

1,177,418

1,177,418-

1,177,418

1,177,418-

Liabilities total
FY2020 (As of Mar. 31, 2021)

Book value(Thousands of yen)
Difference

Fair value(1) Cash and deposits

21,693,586

21,693,586-(2) Notes and accounts receivable-trade(3) Marketable securities and investment
securities
Assets total

6,806,824

6,806,824-

15,424,207

15,424,207-

43,924,618

43,924,618-(1) Accounts payable-trade

1,166,026

1,166,026-

1,166,026
1,166,026
Liabilities total
Notes 1. Matters concerning determination of fair value of financial instruments and marketable securities-

Assets(1) Cash and deposits, and (2) Notes and accounts receivable-trade
Fair value of the financial instruments in these categories is deemed to be equal to their carrying amount.
(3) Marketable securities and investment securities
For fair value of the financial instruments in these categories, stocks are valued based on their prices on securities
exchanges. Fair value of bond investment trust is deemed to be equal to its carrying amount. Please refer to the section“Marketable Securities” for information about securities categorized by purpose.
Liabilities(1) Accounts payable-trade
Fair value of the financial instrument in this category is deemed to be equal to their carrying amount because they aresettled within a short period of time.
2. Financial instruments whose fair values are deemed to be extremely difficult t o measure
Item

FY2019(As of Mar. 31, 2020)
393,310

Unlisted stocks(Thousands of yen)
FY2020(As of Mar. 31, 2021)
389,800

These instruments are not included in the above table because there are no market prices and the fair values are deemed to
be extremely difficult to measure.
3. Balance of money claims and marketable securities with maturity scheduled to be redeemed in the subsequent fiscal
years

17

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2021

FY2019 (As of Mar. 31, 2020)

Cash and deposits
Notes and accounts
receivable-trade
Total

-

-

(Thousands of yen)Over ten years-

6,407,981---

26,982,626

-

-

-

-

-

(Thousands of yen)Over ten years-

6,806,824---

28,500,410

-

-

-

Acquisition cost(Thousands of yen)
Unrealized gains (losses)

Due within one year
20,574,644

One to five years

Five to ten years

FY2020 (As of Mar. 31, 2021)

Cash and deposits
Notes and accounts
receivable-trade
Total

Due within one year
21,693,586

One to five years

Five to ten years

Marketable Securities
1. Available-for-sale securities
FY2019 (As of Mar. 31, 2020)
Type
Securities with book value exceeds
acquisition cost(1) SharesBook value

4,917,949

1,642,224

3,275,725(2) Bonds---(3) Others

-

-

-

4,917,949

1,642,224

3,275,725

74,032

83,367(9,334)---Sub-total
Securities with book value not exceedingacquisition cost(1) Shares(2) Bonds(3) Others

6,700,000

6,700,000-

Sub-total

6,774,032

6,783,367(9,334)

Total

11,691,982

8,425,592

3,266,390

Note: Unlisted stocks (book value of 393,310 thousand yen) are not included in available-for-sale securities in the above tablebecause there are no market prices and the fair values are deemed to be extremely difficult to measure.
FY2020 (As of Mar. 31, 2021)
Type
Securities with book value exceeds
acquisition cost(1) SharesBook value(Thousands of yen)
Unrealized gains (losses)

Acquisition cost

8,724,207

2,225,591

6,498,616(2) Bonds---(3) Others

-

-

-

8,724,207

2,225,591

6,498,616

-

-

-

-

-

-

Sub-total
Securities with book value not exceedingacquisition cost(1) Shares(2) Bonds(3) Others

6,700,000

6,700,000-

Sub-total

6,700,000

6,700,000

-

Total

15,424,207

8,925,591

6,498,616

Note: Unlisted stocks (book value of 389,800 thousand yen) are not included in available -for-sale securities in the above tablebecause there are no market prices and the fair values are deemed to be extremely difficult to measure.

18

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2021

2. Available-for-sale securities soldFY2019 (Apr. 1, 2019 – Mar. 31, 2020)
Not applicable.
FY2020 (Apr. 1, 2020 – Mar. 31, 2021)
Type

Sales amount(Thousands of yen)
Aggregate losses

Aggregate gains(1) Shares

0

-

3,499

(2) Bonds---(3) Others

-

-

-

0

-

3,499

Total

Segment Information
1. General information about reportable segments
Reportable segments of the Zuken Group are based on the group’s components from which financial information can be obtained
separately, so that CEO can judge how to distribute management resources and to periodically evaluate its performance.
The Zuken Group is engaged in solutions business including research and development, manufacturing and sales activities
involving processes extending from design to production and related client services especially in electronics, automotive andindustrial equipment manufacturing sectors. In the domestic market, the Company and its domestic affiliates are in charge and inoverseas, each sales subsidiary which is an independent management unit in each country is in charge in Europe (mainly UK,
Germany, and France), Americas, and Asia (mainly Korea, Singapore, and China).
Therefore, the Zuken Group consists of segments based on the sales structure. Reportable segments are divided into following
four areas: Japan, Europe, Americas, and Asia. Each reportable segment consists of sales of solutions for processes extending fromdesigns to production and related client services especially in electronics, automotive and industrial equipment manufacturingsectors.
2. Basis of measurement for net sales, profit or loss, segment assets, and other material items for each reportable seg ment
The accounting treatment methods for reportable segments are the same as those listed in the section “Basis of Presenting theConsolidated Financial Statements.”
Profits for reportable segments are operating profit figures in the consolidated statement of income.
Intersegment sales or transfers are based on market price.
3. Information about net sales, profit or loss, segment assets, and other material items for each reportable segment
FY2019 (Apr. 1, 2019 – Mar. 31, 2020)(Thousands of yen)
Reportable segment
Japan

EuropeAmericas

Adjustment
Asia

Total

amountAppropriated amountin the consolidated
financial statements(Note 1)

(Note 2)

Net sales
Sales to third parties

21,228,330

4,654,408

2,063,016

1,350,598

29,296,353-

29,296,353

Intersegment sales or transfers

1,070,003

952,423

56,55596,7802,175,763(2,175,763)

29,296,353

22,298,334

5,606,831

2,119,571

1,447,378

31,472,116(2,175,763)

Segment profit

Total

2,656,588

240,028

115,655

372,433

3,384,706

6,535

3,391,241

Segment assets

22,839,235

6,161,296

1,496,278

1,653,481

32,150,291

19,295,601

51,445,892

Depreciation

544,439

106,321

17,40725,956694,125-

694,125

Amortization of goodwill

94,85898,60525,880-219,344-219,344608,520
equipment and intangible assets
Notes: 1. Contents of adjustments are as follows.

107,809

8,060

7,244

731,634-

731,634

Other items

Increase in property, plant and(1) Adjustment amount in segment profit includes amount of 6,535 thousand yen eliminated for intersegment transactions.
(2) Adjustment amount in segment assets includes amount of -4,870,157 thousand yen eliminated for intersegment transactions andtotal company assets of 24,165,758 thousand yen. The total company assets are mainly composed of surplus funds (deposits andmarketable securities), and long-term invested assets (investment securities) of the Company.

19

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2021

2. Segment profit is adjusted with operating profit in the consolidated statement of income.

FY2020 (Apr. 1, 2020 – Mar. 31, 2021)(Thousands of yen)
Reportable segment
Japan

EuropeAmericas

Adjustment
Asia

amountTotal

Appropriated amountin the consolidated
financial statements(Note 1)

(Note 2)

Net sales
Sales to third parties

21,108,651

4,497,330

1,958,050

1,255,232

28,819,265-

Intersegment sales or transfers

1,002,620

934,976

50,230108,072

2,095,900(2,095,900)-

22,111,272

5,432,307

2,008,280

1,363,304

30,915,165(2,095,900)

28,819,265

Total

28,819,265

Segment profit

2,359,957

62,215134,060

339,048

2,895,281(3,897)2,891,384

Segment assets

23,647,836

6,933,455

1,635,837

1,731,178

33,948,307

23,219,769

57,168,076

Depreciation

558,347

103,971

13,992

25,527

701,838-

701,838

Amortization of goodwill

134,895

99,57912,621-

247,095-

247,095

525,762
equipment and intangible assets
Notes: 1. Contents of adjustments are as follows.

79,299

8,226

2,593

615,881-615,881

Other items

Increase in property, plant and(1) Adjustment amount in segment profit includes amount of -3,897 thousand yen eliminated for intersegment transactions.
(2) Adjustment amount in segment assets includes amount of -5,023,933 thousand yen eliminated for intersegment transactions andtotal company assets of 28,243,702 thousand yen. The total company assets are mainly composed of surplus funds (deposits andmarketable securities), and long-term invested assets (investment securities) of the Company.
2. Segment profit is adjusted with operating profit in the consolidated statement of income.

Per-share Information(Yen)
FY2020(Apr. 1, 2020 – Mar. 31, 2021)

FY2019(Apr. 1, 2019 – Mar. 31, 2020)
Net assets per share

1,487.50

1.656.21

Net income per share
111.65
Notes: 1. Diluted net income per share is not presented since there is no dilutive share.
2. Basis for calculation of net income per share is as follows.
FY2019(Apr. 1, 2019 – Mar. 31, 2020)

91.92

FY2020(Apr. 1, 2020 – Mar. 31, 2021)

Net income per share
Profit attributable to owners of parent(Thousands of yen)Amount not available to common shareholders(Thousands of yen)
Profit attributable to owners of parent
applicable to common stock (Thousands of yen)
Average number of shares outstanding during
period (Shares)

Subsequent Events
Not applicable.

20

2,595,767

2,137,173--

2,595,767

2,137,173

23,249,578

23,249,298

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2021

4. Production, Orders and Sales(1) Sales and Orders(a) Sales
Segment
Japan
EuropeAmericas
Asia
Total

FY2019(Apr. 1, 2019 – Mar. 31, 2020)
AmountComposition (%)
21,228,330
72.5
4,654,408
15.9
2,063,016
7.0
1,350,598
4.6
29,296,353
100.0(Thousands of yen)
FY2020(Apr. 1, 2020 – Mar. 31, 2021)
AmountComposition (%)
21,108,651
73.2
4,497,330
15.6
1,958,050
6.8
1,255,232
4.4
28,819,265
100.0(b) Orders received and order backlog(Thousands of yen)
FY2019FY2020(Apr. 1, 2019 – Mar. 31, 2020)(Apr. 1, 2020 – Mar. 31, 2021)
Segment
Orders received
Order backlog
Orders received
Order backlog
Japan
22,100,211
7,662,755
22,358,992
8,913,096
Europe4,759,748
1,685,342
4,663,535
2,015,861
Americas2,146,215
1,424,182
1,861,370
1,339,921
Asia
1,451,654
439,523
1,328,205
534,471
Total
30,457,830
11,211,804
30,212,102
12,803,350
Notes: 1. Intersegment transactions have been eliminated.
2. The above amounts are based on selling prices and the amounts do not include consumption taxes.
(Reference) Results by product category are as follows.
(a) Sales
Product category
Printed Circuit Board design solutions
Circuit design solutions
IT solutions
Client services
OthersTotal

FY2019(Apr. 1, 2019 – Mar. 31, 2020)
AmountComposition (%)
4,782,582
16.3
7,361,105
25.1
6,193,266
21.1
10,948,790
37.5
10,6070.0
29,296,353
100.0(b) Orders received and order backlog(Thousands of yen)
FY2020(Apr. 1, 2020 – Mar. 31, 2021)
AmountComposition (%)
4,248,201
14.7
5,926,048
20.6
7,042,313
24.4
11,596,494
40.3
6,206
0.0
28,819,265
100.0(Thousands of yen)
FY2019FY2020(Apr. 1, 2019 – Mar. 31, 2020)(Apr. 1, 2020 – Mar. 31, 2021)
Product category
Orders received
Order backlog
Orders received
Order backlog
Printed Circuit Board design solutions
4,913,702
812,423
4,249,753
835,729
Circuit design solutions
7,268,256
1,084,438
6,247,186
1,430,141
IT solutions
6,128,067
983,467
7,242,890
1,190,389
Client services
12,137,899
8,331,135
12,465,606
9,346,289
Others
9,904
339
6,666
800
Total
30,457,830
11,211,804
30,212,102
12,803,350
Notes: 1. The above amounts are based on selling prices and the amounts do not include consumption taxes.
2. Name of major products by product category are as follows.
CR-8000 Design Force
CR-5000 Board Designer
Major products of Printed Circuit Board design
CR-8000 DFM Center
solutions
CADSTAReCADSTAR
CR-8000 Design Gateway
CR-5000 System Designer
CR-8000 System Planner
Major products of Circuit design solutions
E3.series
Cabling Designer
Harness Designer
PreSight visual BOM
DS-CR
Major products of IT solutions
DS-2 Expresso
DS-E3
GENESYS

21

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2021

5. Non-consolidated Financial Statements(1) Balance SheetFY2019(As of Mar. 31, 2020)(Thousands of yen)
FY2020(As of Mar. 31, 2021)

AssetsCurrent assets
Cash and deposits

12,083,975

12,429,694

223,893291,515

Accounts receivable-trade

2,794,357

2,747,885

Securities

6,700,000

6,700,000

88,71650,34965,29866,426250,311

291,880

22,206,553

22,577,751

Buildings

2,715,507

2,637,829

Structures

31,35328,577

Vehicles

10,927

6,845

Notes receivable-trade

Inventories
Short-term loans receivable from subsidiaries andassociates
Other
Total current assets
Non-current assets
Property, plant and equipment

Tools, furniture and fixtures
Land
Leased assets

107,631

107,813

3,009,559

3,009,559

6,104

6,725

5,881,084

5,797,350

Other

260,237

308,780

Total intangible assets

260,237

308,780

Investment securities

5,381,782

9,114,007

Shares of subsidiaries and associates

2,138,039

2,156,823

Investments in capital of subsidiaries and associates
Long-term loans receivable from subsidiaries andassociates
Long-term trade accounts receivables fromsubsidiaries and associates
Deferred tax assets

2,429,229

2,429,229

108,785

110,664594,665

816,869

Total property, plant and equipment
Intangible assets

Investments and other assets

145,548-

Other

333,083

357,850

Allowance for doubtful accounts(14,902)(14,902)

Total investments and other assets
Total non-current assets
Total assets

22

11,116,231

14,970,541

17,257,554

21,076,671

39,464,108

43,654,422

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2021

(Thousands of yen)
FY2020(As of Mar. 31, 2021)

FY2019(As of Mar. 31, 2020)
Liabilities
Current liabilities
Accounts payable-trade672,988396,457

Accounts payable-other943,296

729,174

Income taxes payable

339,523

237,275

Advances received

883,458

943,535

Provision for bonuses

360,369

365,076

Provision for bonuses for directors (and other officers)

50,00078,000Other

186,961

199,285

3,436,597

2,948,803

Total current liabilities
Non-current liabilities
Deferred tax liabilities-

898,378

Provision for retirement benefits

2,484,919

2,483,326

Long-term accounts payable-other

96,85096,850Other

18,585

18,2552,600,354

3,496,810

6,036,951

6,445,614

10,117,065

10,117,065

Legal capital surplus

8,657,753

8,657,753

Total capital surpluses

8,657,753

8,657,753

311,082

311,082

General reserve

9,525,000

11,025,000

Retained earnings brought forward

2,566,158

2,605,601

12,402,241

13,941,684(16,778)(17,734)

31,160,281

32,698,768

Valuation difference on available-for-sale securities

2,266,875

4,510,039

Total valuation and translation adjustments

2,266,875

4,510,039

33,427,156

37,208,808

39,464,108

43,654,422

Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Share capital
Capital surplus

Retained earnings
Legal retained earnings
Other retained earnings

Total retained earnings
Treasury shares
Total shareholders’ equity
Valuation and translation adjustments

Total net assets
Total liabilities and net assets

23

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2021

(2) Statement of Income
FY2019(Apr. 1, 2019 – Mar. 31, 2020)(Thousands of yen)
FY2020(Apr. 1, 2020 – Mar. 31, 2021)

Net sales

12,072,710

11,135,371

Cost of sales

3,162,497

2,699,842

Gross profit

8,910,213

8,435,528

Selling, general and administrative expenses

7,229,770

7,093,182

Operating profit

1,680,443

1,342,346

Interest income

2,442

2,262

Dividend income

868,495

1,079,490-

123,199

131,334

135,490

Non-operating income

Foreign exchange gains
Rental income
Other

72,03899,443

1,074,310

1,439,886

Rental costs on real estate

130,523

118,150

Foreign exchange losses

70,068-

Total non-operating income
Non-operating expenses

Other

1,071

1,366

201,662

119,517

2,553,091

2,662,715-

542

177,000-

18,554-

195,554

542

Loss on disposal of non-current assets

1,641

998

Loss on valuation of shares of subsidiaries and associates
Provision of allowance for doubtful accounts of golf clubmembership

35,047

-

2,000

-

Total extraordinary losses

38,688998

2,709,957

2,662,259

Income taxes-current

486,565

370,467

Income taxes-deferred(54,221)54,866

Total income taxes

432,344425,333

2,277,613

2,236,925

Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sale of non-current assets
Reversal of provision for loss on business of subsidiaries
and associates
Reversal of allowance for doubtful accounts for
subsidiaries and associates
Total extraordinary income
Extraordinary losses

Profit before income taxes

Profit24

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2021

(3) Statement of Changes in Equity
FY2019 (Apr. 1, 2019 – Mar. 31, 2020)(Thousands of yen)
Shareholders’ equity
Capital surplus

Retained earnings
Other retained earnings

Share capital

Balance at beginning of period

10,117,065

Legalcapitalsurplus8,657,753

Total capitalsurplusLegalretainedearnings

8,657,753

311,082

Generalreserve

Retainedearnings
brought
forwardTotal
retainedearnings

8,325,000

2,139,534

10,775,617

1,200,000(1,200,000)

Changes during period
Provision of general reserve
Dividends of surplus(650,989)(650,989)

Profit2,277,613

2,277,613

Purchase of treasury shares
Net changes other thanshareholders’ equity
Total changes during period
Balance at end of period

-

-

-

-

1,200,000

426,623

1,626,623

10,117,065

8,657,753

8,657,753

311,082

9,525,000

2,566,158

12,402,241

Valuation and translation
adjustments
Valuation
Total
Total valuationdifference onshareholders’and translation
available-for-sale
equityadjustments
securities
29,534,070
2,022,397
2,022,397

Shareholders’ equity

Treasury shares
Balance at beginning of period(16,365)

Total net assets

31,556,468

Changes during period
Provision of general reserve
Dividends of surplus(650,989)(650,989)

Profit2,277,613

2,277,613

(413)

(413)

Purchase of treasury shares
Net changes other thanshareholders’ equity
Total changes during period
Balance at end of period(413)

244,477

244,477

244,477(413)

1,626,210

244,477

244,477

1,870,687(16,778)

31,160,281

2,266,875

2,266,875

33,427,156

25

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2021

FY2020 (Apr. 1, 2020 – Mar. 31, 2021)(Thousands of yen)
Shareholders’ equity
Capital surplus

Retained earnings
Other retained earnings

Share capital

Balance at beginning of period

10,117,065

Legalcapitalsurplus

Total capitalsurplusLegalretainedearnings

8,657,753

8,657,753

311,082

9,525,000

Retainedearnings
brought
forward2,566,158

1,500,000(1,500,000)

Generalreserve

Total
retainedearnings
12,402,241

Changes during period
Provision of general reserve
Dividends of surplus(697,482)(697,482)

Profit2,236,925

2,236,925

1,500,000

39,443

1,539,443

311,082 11,025,000

2,605,601

13,941,684

Purchase of treasury shares
Net changes other thanshareholders’ equity
Total changes during period
Balance at end of period

-

-

-

10,117,065

8,657,753

8,657,753-

Valuation and translation
adjustments
Valuation
Total
Total valuationdifference onshareholders’and translation
available-for-sale
equityadjustments
securities
31,160,281
2,266,875
2,266,875

Shareholders’ equity

Treasury shares
Balance at beginning of period(16,778)

Total net assets

33,427,156

Changes during period
Provision of general reserve
Dividends of surplus(697,482)(697,482)

Profit2,236,925

2,236,925

(955)

(955)

Purchase of treasury shares
Net changes other thanshareholders’ equity(955)

Total changes during period(955)(17,734)

Balance at end of period

2,243,164

2,243,164

2,243,164

1,538,487

2,243,164

2,243,164

3,781,652

32,698,768

4,510,039

4,510,039

37,208,808

This financial report is solely a translation of “Kessan Tanshin” (in Japanese, including attachments), which has been preparedin accordance with accounting principles and practices generally accepted in Japan, for the convenience of readers who prefer
an English translation.

26