May 15, 2023

Summary of Consolidated Financial Results for the Fiscal Year Ended March 31, 2023 (FY2022)[Japanese GAAP]
Company name:
ZUKEN Inc.
Listing: Tokyo Stock Exchange
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, 2023
Scheduled date of payment of dividend:
June 30, 2023
Scheduled date of filing of Annual Securities Report:
June 29, 2023
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, 2023 (April 1, 2022 – March 31, 2023)(1) Consolidated results of operations(Percentages represent year-on-year changes)
Net sales

Operating profit

Millions of yen%
Fiscal years ended
Mar. 31, 2023
35,073
11.3
Mar. 31, 2022
31,502
9.3
Note: Comprehensive income (Millions of yen)

Net income pershare

Millions of yen

Profit attributable toowners of parent

Ordinary profit

Millions of yen

%

4,428
13.4
4,735
13.4
3,196
3,904
35.0
4,177
32.5
3,002
Fiscal year ended Mar. 31, 2023:
3,707 (up 586.0%)
Fiscal year ended Mar. 31, 2022:
540 (down 88.2%)

%

6.4
40.5

Diluted net income
per share

Millions of yen%

Ordinary profit on
total assets

Return on equity

Yen
Yen
%
Fiscal years ended
Mar. 31, 2023
137.488.1
Mar. 31, 2022
129.16
7.8
Reference: Equity in earnings of associates (Millions of yen) Fiscal year ended Mar. 31, 2023:
Fiscal year ended Mar. 31, 2022:

Operating profit to
net sales

%

%

7.8
7.2

12.6
12.4

268
84

(2) Consolidated financial position
Total assets

Net assets

Shareholders’ equity ratio

Millions of yen

Millions of yen

As of Mar. 31, 2023
62,498
As of Mar. 31, 2022
59,105
Reference: Shareholders’ equity (Millions of yen)

41,35538,616
As of Mar. 31, 2023:

Net assets per share%

40,884

Yen

65.4
64.7
As of Mar. 31, 2022:

1,758.56
1,644.76
38,238(3) Consolidated cash flows
Cash flows fromoperating activities
Fiscal years ended
Mar. 31, 2023
Mar. 31, 2022

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

2,879
1,247

(747)
4,703

(1,023)(765)

28,39926,9002. Dividends
Dividend per share
1Q-end 2Q-end 3Q-end Year-end
Yen

Yen

Yen

Yen

Total
Yen

Total dividends

Payout ratio(consolidated)

Dividend on
equity(consolidated)

Millions of yen

%

%

28.6
32.7

2.2
2.6

Fiscal year ended Mar. 31, 2022
16.00
21.00 37.00
860
Fiscal year ended Mar. 31, 2023
20.00
25.00 45.00
1,046
Fiscal year ending Mar. 31, 2024
25.00
25.00 50.00(forecast)
Note: The year-end dividend for the fiscal year ended March 31, 2022 includes a special dividend of 5 yen.

34.7

3. Consolidated Forecast for the Fiscal Year Ending March 31, 2024 (April 1, 2023 – March 31, 2024)
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
37,000
5.5
4,600
3.9
4,900
3.5
3,350
Note: Only the full-year forecast is shown because Zuken manages performance on a fiscal year basis.

%

4.8

144.09* 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, 2023:

23,267,169 shares

As of Mar. 31, 2022:

23,267,169 shares

As of Mar. 31, 2022:

18,471 shares(b) Number of treasury shares at the end of the period
As of Mar. 31, 2023:

18,611 shares(c) Average number of shares outstanding during the period
Fiscal year ended Mar. 31, 2023:

23,248,639 sharesFiscal year ended Mar. 31, 2022:

23,248,912 shares

Reference: Summary of Non-consolidated Financial Results
Non-consolidated Financial Results for the Fiscal Year Ended March 31, 2023 (April 1, 2022 – March 31, 2023)(1) Non-consolidated results of operations
Net sales
Fiscal years ended
Mar. 31, 2023
Mar. 31, 2022

Operating profit

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

12,042
11,289

6.7
1.4

1,684
1,515

11.1
12.9

3,270
2,853

14.6
7.2

2,342
1,985

18.0
(11.2)Net income per share
Fiscal years ended
Mar. 31, 2023
Mar. 31, 2022

(Percentages represent year-on-year changes)
Ordinary profit
ProfitDiluted net income per share

Yen

Yen

100.7685.41-(2) Non-consolidated financial position
Total assets

Net assets

Millions of yen

Millions of yen

As of Mar. 31, 2023
42,827
As of Mar. 31, 2022
43,059Reference: Shareholders’ equity (Millions of yen)

36,97335,434As of Mar. 31, 2023:

Shareholders’ equity ratio

Net assets per share%

36,973

86.3
82.3
As of Mar. 31, 2022:

Yen

1,590.35
1,524.15
35,434* 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 o f
Operations, etc., (4) Outlook” on page 4 for forecast assumptions and notes of caution for usage.

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2023

Contents of Attachments
1.

Overview of Results of Operations, etc. .............................................................................................................. 2(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 Quarterly 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 ........................................................................................................................................ 19
Segment Information ......................................................................................................................................... 20
Per-share Information ........................................................................................................................................ 21
Subsequent Events............................................................................................................................................. 21

4.

Production, Orders and Sales ............................................................................................................................. 22

5.

Non-consolidated Financial Statements ............................................................................................................. 23(1) Balance Sheet .................................................................................................................................................. 23(2) Statement of Income........................................................................................................................................ 25(3) Statement of Changes in Equity ...................................................................................................................... 26

1

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2023

1. Overview of Results of Operations, etc.
(1) Results of Operations
In the current fiscal year, although the outlook became increasingly uncertain due to the prolonged Ukraine crisis,
accelerating inflation worldwide, and other events, the economy continued to recover slowly as restrictions werereduced as the COVID-19 cases fell to a low level and economic activity returned to normal.
Manufacturers in the electronics, automotive and industrial sectors, which are the main customers of the Zuken Group,
are continuing to make substantial capital expenditures including a large volume of IT investments with the supportof the strong corporate earnings.
The Zuken Group is dedicated to operating as an engineering IT organization capable of providing best-in-classsolutions for a broad range of design and manufacturing problems for manufacturers anywhere in the world. During
the fiscal year, we continued to focus on increasing sales of core products and assisting customers with the use of new
methods for developing products and technologies. Major initiatives of the fiscal year were as follows.
(i) Increased sales of core products
We focused on increasing sales of the CR-8000, our core electronic system design solution series for theelectronics manufacturing industry, and the E3.series, a wire harness design system for manufacturers ofautomobiles and industrial equipment. Sales of these products increased in many market sectors in Europe, North
America and Japan. Sales started for the E3.infinite wire harness design system for manufacturers of automobiles
and other transportation products. Currently, many companies are interested in performing tests to determine thebenefits of replacing an existing design environment with this new system. Sales activities are under way withthe aim of having the E3.infinite used by numerous companies. The DS series of data management systems,
which are used with these both the E3 and CR systems, was sold as an integrated solution extending from design
to data management systems. This resulted in sales growth by making the DS series a part of large projects.
There were highly effective sales activities during the fiscal year that closely reflected proposals for customers,by using the ZUKEN digital web communication tool, as well as face-to-face sales meetings due to the easing ofrestrictions related to the pandemic.
(ii) A new product development method for design optimization beginning with the conceptual design stage
The need for digital technologies and greater efficiency for all design and manufacturing processes of ZUKEN’scustomers is growing as the scale and complexity of manufacturing operations increase. The ZUKEN Group is
meeting this need by focusing on assistance for the use of the model-based systems engineering (MBSE)
methodology, which optimizes designs beginning with the conceptual design stage. This approach is effective forthe development of products that require intricate combinations of electrical, mechanical, software and manyother technologies.
We continued development activities involving GENESYS MBSE modeling tool for products used in Japan andmade this tool even more competitive by making significant improvements in ease of use, performance and searchcapabilities. For the GENESYS-CR, which links GENESYS and the CR-8000 series, we heightened quality andreliability, upgraded functions and made other improvements as we started full-scale sales activities targetingcustomers who are considering the use of MBSE.
Consolidated results
Net sales
Ordinary profit
Profit attributable to owners of parent

35,073 million yen
4,735 million yen
3,196 million yen(up 11.3% year on year)(up 13.4% year on year)(up 6.4% year on year)

Fiscal year sales increased significantly from one year earlier to an all-time high for the second consecutive year. This
is attributable to higher sales of E3.series, a wire harness design system, and strong sales of data management system
DS series.
Earnings were also much higher because of the significant increase in sales, with operating profit and ordinary profit
reaching record highs.
Product category sales were as follows.

2

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2023

Product category sales
Printed Circuit Board design solutions
Circuit design solutions
IT solutions
Client services

4,123 million yen
7,817 million yen
8,290 million yen
14,835 million yen(down 3.3% year on year)(up 13.5% year on year)(up 15.2% year on year)(up 12.8% year on year)

CR-8000 Design Force
CR-8000 Board Designer
CR-8000 DFM Center
CADSTAReCADSTAR
CR-8000 Design Gateway
CR-8000 System Planner
E3.series
E3.infinite
Cabling Designer
Harness Designer
DS-CR
DS-2 Expresso
DS-E3
DS-E3.infinite
GENESYS
PreSight visual BOM

Major products of Printed Circuit Board design solutions

Major products of Circuit design solutions

Major products of IT solutions(2) Financial Position
Total assets at the end of the current fiscal year increased 3,392 million yen from the end of the previous fiscal year
to 62,498 million yen. The main factors include increases of 1,315 million yen in cash and deposits, 824 million yen
in prepaid expenses and 814 million yen in accounts receivable-trade.
Total liabilities increased 652 million yen from the end of the previous fiscal year to 21,142 million yen. The main
factors were an increase of 2,108 million yen in advances received, which offset a decrease of 1,780 million yen inincome taxes payable.
Net assets increased 2,739 million yen from the end of the previous fiscal year to 41,355 million yen, and theshareholders’ equity ratio was 65.4%.
(3) Cash Flows
Cash and cash equivalents (hereafter “cash”) at the end of the current fiscal year increased 1,499 million yen over theend of the previous fiscal year to 28,399 million yen.
Cash flows by category were as follows.
Cash flows from operating activities
Net cash provided by operating activities increased 1,632 million yen from the previous fiscal year to 2,879 million
yen. The main cash inflows were profit before income taxes of 4,649 million yen (a year-on-year decrease of 1,476
million yen), an increase in advances received of 1,886 million yen (a year-on-year increase of 413 million yen),depreciation of 732 million yen (a year-on-year increase of 25 million yen). The main cash outflow was income taxes
paid of 3,167 million yen (a year-on-year increase of 2,031 million yen) and an increase in prepaid expenses of 802
million yen (a year-on-year decrease of 205 million yen).
Cash flows from investing activities
Net cash used in investing activities totaled 747 million yen, compared with 4,703 million yen provided in the previous
fiscal year. This was mainly due to purchase of intangible assets of 860 million yen (a year-on-year increase of 142
million yen).

3

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2023

Cash flows from financing activities
Net cash used in financing activities increased 257 million yen from the previous fiscal year to 1,023 million yen.
This was mainly due to cash dividends paid of 953 million yen (a year-on-year increase of 232 million yen).
Cash flow indicators were as follows:
Fiscal years ended

March 31, 2020

March 31, 2021

March 31, 2022

March 31, 2023

Shareholders’ equity ratio

67.2%

67.4%

64.7%

65.4%

Shareholders’ equity ratio based on market prices

104.2%

114.9%

118.8%

128.0%

Interest-bearing debt to cash flow ratio

2.0%

2.3%

5.7%

3.9%

Interest coverage ratio

977.3

1,205.4393.0

1,232.3

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
Although economic activity is returning to normal as pandemic restrictions end, the outlook remains unclear becauseof uncertainty about the effects of the prolonged Ukraine conflict, inflation and other events. On the other hand,dramatic changes are taking place worldwide in how products are designed and manufactured because of advances intechnologies and the increasing complexity of products. We believe that these changes will expand the Zuken Group’sbusiness domains.
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 37,000 million yen, ordinary profit of 4,900 million yen, and profit attributable to owners ofparent of 3,350 million yen in the fiscal year ending March 31, 2024.
* 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, 2023

3. Consolidated Financial Statements and Notes(1) Consolidated Balance SheetFY2021(As of Mar. 31, 2022)(Thousands of yen)
FY2022(As of Mar. 31, 2023)

AssetsCurrent assets
Cash and deposits

27,191,189

Notes receivable-trade

28,506,871

383,412

227,597

Accounts receivable-trade

5,647,008

6,461,314

Securities

6,700,000

6,700,000

Merchandise and finished goods

683,085593,209

Work in process

103,141

101,238

1,700

1,768

4,276,778

5,101,400

Raw materials and supplies
Prepaid expenses
Other

302,402337,789

Allowance for doubtful accounts(29,361)(37,623)

45,259,357

47,993,566

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

9,248,463

9,171,138

Accumulated depreciation(6,543,100)(6,593,700)

Buildings and structures, net

2,705,363

2,577,438

Machinery, equipment and vehicles

102,027

155,743(74,548)(80,641)

Accumulated depreciation
Machinery, equipment and vehicles, net

27,47975,102Tools, furniture and fixtures

2,276,056

2,528,402

Accumulated depreciation(1,884,275)(1,980,038)

Tools, furniture and fixtures, net
Land
Leased assets

391,780

548,364

3,015,103

3,009,821

191,643

182,097(124,967)(73,217)

66,676

108,879

6,206,402

6,319,606

Goodwill

184,948

147,863

Other

743,981854,403

Total intangible assets

928,929

1,002,267

Investment securities

3,114,992

3,243,357

Shares of subsidiaries and associates

Accumulated depreciation
Leased assets, net
Total property, plant and equipment
Intangible assets

Investments and other assets
2,002,416

2,266,680

Deferred tax assets

996,219

1,042,524

Other

614,323649,296

Allowance for doubtful accounts(16,752)(19,127)

Total investments and other assets

6,711,198

7,182,731

13,846,530

14,504,605

59,105,887

62,498,172

Total non-current assets
Total assets

5

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2023

FY2021(As of Mar. 31, 2022)(Thousands of yen)
FY2022(As of Mar. 31, 2023)

Liabilities
Current liabilities
Accounts payable-trade

1,140,865

751,939

Income taxes payable

2,606,634

826,012Advances received

9,361,007

11,469,101

Provision for bonuses

1,023,881

1,150,839

Provision for bonuses for directors (and other officers)

112,100

102,725

Other provisions

11,070

8,819

Other

2,227,089

2,613,485

Total current liabilities

16,482,648

16,922,923

3,803,764

3,982,222

203,324

237,108

4,007,088

4,219,330

20,489,736

21,142,254

Share capital

10,117,065

10,117,065

Capital surplus

8,662,477

8,662,477

Retained earnings

17,852,882

20,096,025

Treasury shares(19,279)(19,737)

36,613,144

38,855,831

1,463,414

1,622,185

Non-current liabilities
Retirement benefit liability
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity

Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment

153,932

417,293

Remeasurements of defined benefit plans

8,050(11,251)

1,625,397

2,028,227

Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

6

377,608

471,859

38,616,150

41,355,918

59,105,887

62,498,172

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2023

(2) Consolidated Statements of Income and Comprehensive Income
Consolidated Statement of Income
FY2021(Apr. 1, 2021 – Mar. 31, 2022)(Thousands of yen)
FY2022(Apr. 1, 2022 – Mar. 31, 2023)

31,502,266

35,073,421

Net sales
Cost of sales

9,708,034

11,130,712

Gross profit

21,794,232

23,942,708

Selling, general and administrative expenses

17,889,814

19,514,344

Operating profit

3,904,417

4,428,364

Interest income

9,663

21,531Dividend income

79,37832,681

Foreign exchange gains
Share of profit of entities accounted for using equity
methodSubsidy income

3,219

-

84,939268,165

50,64896,502

Other

51,642

39,641

Total non-operating income

279,492

458,522

3,174

2,336

-

147,003

2,910

1,719

Non-operating income

Non-operating expenses
Interest expenses
Foreign exchange losses
Other
Total non-operating expenses
Ordinary profit

6,085

151,059

4,177,825

4,735,827

Extraordinary income
Gain on sale of non-current assets

1,075

10,432Gain on sale of investment securities

5,808,953-

Total extraordinary income

5,810,029

10,432

20,552

8,909-

87,8393,509,057-

Extraordinary losses
Loss on disposal of non-current assets
Loss on valuation of investment securities
Retirement benefit expenses
Impairment losses

332,369-

3,861,979

96,749Profit before income taxes

6,125,875

4,649,510

Income taxes-current

3,077,235

1,444,067

Income taxes-deferred

4,891(99,718)

Total income taxes

3,082,127

1,344,349

Profit

3,043,747

3,305,161

40,881

108,8223,002,866

3,196,338

Total extraordinary losses

Profit attributable to non-controlling interests
Profit attributable to owners of parent

7

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2023

Consolidated Statement of Comprehensive Income
FY2021(Apr. 1, 2021 – Mar. 31, 2022)(Thousands of yen)
FY2022(Apr. 1, 2022 – Mar. 31, 2023)

3,043,747

3,305,161(3,030,233)

150,046

ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment

105,075

263,360

Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income

438,313(19,301)(16,392)

8,725(2,503,236)

402,830

540,5113,707,991

499,630

3,599,169

40,881

108,822

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, 2023

(3) Consolidated Statement of Changes in Equity
FY2021 (Apr. 1, 2021 – Mar. 31, 2022)(Thousands of yen)
Shareholders’ equity
Retained
Capital surplus
Treasury sharesearnings

Share capital
Balance at beginning of period
Cumulative effects of changes
in accounting policies
Restated balance

10,117,065

8,662,477

15,614,931

Total shareholders’equity(17,734)

34,376,739(44,195)
10,117,065

8,662,477

15,570,736(44,195)(17,734)

34,332,544

Changes during period
Dividends of surplus
Profit attributable to owners ofparentPurchase of treasury shares
Net changes other thanshareholders’ equity
Total changes during period
Balance at end of period(720,720)(720,720)

3,002,866

3,002,866(1,545)(1,545)--2,282,146(1,545)2,280,600

10,117,065

8,662,477

17,852,882(19,279)

36,613,144

Accumulated other comprehensive income
Valuationdifference on
available-forsale securities
Balance at beginning of period
Cumulative effects of changes
in accounting policies

4,510,039

Restated balance

4,510,039

Total
NonRemeasurements accumulated controllingof defined
otherinterests
benefit plans comprehensive
income48,857(430,263)
4,128,633
336,727

Foreigncurrencytranslation
adjustment

Total net
assets38,842,100(44,195)

48,857(430,263)

4,128,633

336,727

38,797,905

Changes during period
Dividends of surplus
Profit attributable to owners ofparentPurchase of treasury shares
Net changes other thanshareholders’ equity(720,720)
3,002,866(1,545)(3,046,625)

105,075

438,313(2,503,236)

40,881(2,462,354)

Total changes during period(3,046,625)

105,075

438,313(2,503,236)

40,881(181,754)

Balance at end of period

1,463,414

153,932

8,050

1,625,397

377,608

38,616,150

9

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2023

FY2022 (Apr. 1, 2022 – Mar. 31, 2023)(Thousands of yen)
Shareholders’ equity
Retained
Capital surplus
Treasury sharesearnings

Share capital
Balance at beginning of period

10,117,065

8,662,477

17,852,882

Total shareholders’equity(19,279)

36,613,144

Changes during period
Dividends of surplus
Profit attributable to owners ofparentPurchase of treasury shares
Net changes other thanshareholders’ equity
Total changes during period
Balance at end of period(953,195)(953,195)

3,196,338

3,196,338
(457)

(457)

-

-

2,243,143(457)

2,242,686

10,117,065

8,662,477

20,096,025(19,737)

38,855,831

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

1,463,414

Total
NonRemeasurements accumulated controllingof defined
otherinterests
benefit plans comprehensive
income153,932
8,050
1,625,397
377,608

Foreigncurrencytranslation
adjustment

Total net
assets38,616,150

Changes during period
Dividends of surplus
Profit attributable to owners ofparentPurchase of treasury shares
Net changes other thanshareholders’ equity
Total changes during period
Balance at end of period(953,195)
3,196,338(457)
158,771

263,360(19,301)

158,771

263,360(19,301)

402,830

94,2502,739,767

1,622,185

417,293(11,251)

2,028,227

471,859

41,355,918

10

402,830

94,250497,080

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2023

(4) Consolidated Statement of Cash FlowsFY2021(Apr. 1, 2021 – Mar. 31, 2022)(Thousands of yen)
FY2022(Apr. 1, 2022 – Mar. 31, 2023)

6,125,875

4,649,510

Depreciation

706,100

732,013

Impairment losses

332,369-

Cash flows from operating activities
Profit before income taxes

Amortization of goodwill

179,970

47,681

Interest and dividend income(89,042)(54,212)

8,762(9,351)(84,939)(268,165)-

87,839Foreign exchange losses (gains)Share of loss (profit) of entities accounted for using
equity method
Loss (gain) on valuation of investment securities
Loss (gain) on sale of investment securities
Decrease (increase) in trade receivables
Increase (decrease) in trade payables(5,808,953)-

658,974(527,909)

117,412(245,315)

Increase (decrease) in advances received

1,472,919

1,886,055

Decrease (increase) in prepaid expenses(1,007,178)(802,172)

Increase (decrease) in retirement benefit liability(259,433)(118,149)

Other, net(95,502)272,579

Subtotal

2,257,334

5,886,701

Interest and dividends received

129,108

162,740

Interest paid

(3,174)(2,336)

Income taxes paid

(1,135,645)(3,167,322)

Net cash provided by (used in) operating activities

1,247,624

2,879,783-

206,400

Purchase of property, plant and equipment(301,628)(457,778)

Purchase of intangible assets(415,954)(402,277)

Proceeds from sale of investment securities

5,808,953-

Purchase of shares of subsidiaries and associates(342,522)(99,986)

Other, net(45,253)

6,272

Net cash provided by (used in) investing activities

4,703,593(747,369)

Cash flows from investing activities
Decrease (increase) in time deposits

Cash flows from financing activities
Purchase of treasury shares(1,545)(457)

Dividends paid

(720,720)(953,195)

Other, net(43,637)(70,184)

Net cash provided by (used in) financing activities(765,903)(1,023,836)

Effect of exchange rate change on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents

302,186

390,737

5,487,500

1,499,314

Cash and cash equivalents at beginning of period

21,412,529

26,900,029

Cash and cash equivalents at end of period

26,900,029

28,399,343

11

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2023

(5) Notes to Quarterly Consolidated Financial Statements
Going Concern Assumption
Not applicable.
Basis of Presenting the Consolidated Financial Statements
1. Scope of consolidation(1) Number of consolidated subsidiaries: 21
Main consolidated subsidiaries: Zuken USA Inc., Zuken GmbH, Zuken Limited, Zuken Tec Inc., Zuken NetWave Inc.
DiverSync Corporation was excluded from the scope of consolidation in the current fiscal year, because of the comple tionof its liquidation.
(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(1) Number of affiliates accounted for under the equity method: 1 (Business Engineering Corporation)(2) 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 signi ficant 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
Other than shares, etc. with no market price: Stated at fair value. (Unrealized gain or loss is included in net assets. Cost of
securities sold is determined by the moving-average method.)
Shares, etc. with no market price:
Mainly 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 profitab ility).
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 and12

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2023

buildings (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:
Buildings and structures:
3 years to 60 years
Tools, furniture and fixtures:
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 writeoff 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 current fiscal year.
(b) Accounting for actuarial gain or loss and past service cost
Past service cost is charged to expenses for the fiscal year when they are 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
Significant performance obligations in major businesses concerning revenue from contracts with customers of the Company
and its consolidated subsidiaries and the normal time when these obligations are satisfied (normal time of revenue
recognition) are as follows.
The Zuken Group sells solutions involving processes extending from designs to production, primarily for manufacturers in
the electronics, automobile and industrial equipment industries, and provides client services associated with these solutions.
For the sale of solutions, the satisfaction of a performance obligation is judged to occur when a product is delivered to acustomer because the customer has acquired control of the product at that time. Consequently, revenue is recognized when
the product is delivered. For some products for which the Zuken Group performs the role of an agent for the provision of agood or service to the customer, the net amount obtained by deducting the amount paid to the supplier from the amountreceived from the customer is recognized as revenue. For the provision of client services, which are primarily productmaintenance service contracts for a designated period, revenue is recognized as the associated obligation is satisfied during
the contractual maintenance period.
Consideration for transactions are received within one year of the satisfaction of the corresponding obligation and there areno significant financial components.
(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 current earnings. All assets and liabilities of overseas consolidated subsidiaries and affi liates
are translated into Japanese yen at year-end exchange rates, and income and expenses into Japanese yen at the average of the13

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2023

exchange rates in effect during each fiscal period. The resulting exchange gains or losses are included in foreign currencytranslation adjustment and non-controlling interests in the net assets section.
(7) Goodwill amortization method and amortization period
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 the 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 a change in value.

Notes to Consolidated Balance Sheet
Investments and other assets for non-consolidated subsidiaries are as follows.
FY2021(As of Mar. 31, 2022)
2,002,416(Thousands of yen)
FY2022(As of Mar. 31, 2023)
2,266,680

11,50011,500

FY2021(Apr. 1, 2021 – Mar. 31, 2022)(Thousands of yen)
FY2022(Apr. 1, 2022 – Mar. 31, 2023)

Salaries and allowances
Depreciation

6,320,617
594,699

7,116,908
606,793

Provision of allowance for doubtful accounts
Provision for bonuses
Provision for bonuses for directors (and other officers)

10,447645,282
112,100
543,607
4,190,462

8,352
703,696
102,725
314,046
4,604,374

Shares of subsidiaries and associates
Other (Investments in capital)

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

Retirement benefit expenses
Research and development expenses

2. Total amount of research and development expenses included in general and administrative expenses(Thousands of yen)
FY2021
FY2022(Apr. 1, 2021 – Mar. 31, 2022)(Apr. 1, 2022 – Mar. 31, 2023)
4,190,462

4,604,374

3. Breakdown of gain on sales of non-current assets is as follows.

1,024(Thousands of yen)
FY2022(Apr. 1, 2022 – Mar. 31, 2023)
5,280
5,115

51

36

1,075

10,432

FY2021(Apr. 1, 2021 – Mar. 31, 2022)
226
3,374

(Thousands of yen)
FY2022(Apr. 1, 2022 – Mar. 31, 2023)
3,551
3,201

335
16,6152,156-

20,5528,909

FY2021(Apr. 1, 2021 – Mar. 31, 2022)
Buildings, etc.
VehiclesTools, furniture and fixtures
Total
4. Breakdown of loss on disposal of non-current assets is as follows.

Software
Buildings, etc.
Tools, furniture and fixtures
Telephone subscription rights
Total

14

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2023

Notes to Consolidated Statement of Comprehensive Income
Re-classification adjustments and tax effect with respect to other comprehensive income
FY2021(Apr. 1, 2021 – Mar. 31, 2022)(Thousands of yen)
FY2022(Apr. 1, 2022 – Mar. 31, 2023)

Amount incurred during the period

1,442,622

216,205

Re-classification adjustments

Valuation difference on available-for-sale securities:(5,808,953)-

Before tax effect adjustments(4,366,330)

216,205

Tax effect

1,336,097(66,158)

Valuation difference on available-for-sale securities(3,030,233)

150,046

105,075

263,360

Foreign currency translation adjustment:
Amount incurred during the period
Remeasurements of defined benefit plans, net of tax:
Amount incurred during the period(11,572)2,088

436,288(29,566)

Before tax effect adjustments

424,715(27,478)

Tax effect

13,598

8,176

438,313(19,301)(16,392)

8,725(2,503,236)

402,830

Re-classification adjustments

Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of entities
accounted for using equity method:Amount incurred during the period
Total other comprehensive income

Notes to Consolidated Statement of Changes in Equity
FY2021 (Apr. 1, 2021 – Mar. 31, 2022)
1. Type of share and number of shares of outstanding shares and treasury shares
Number of shares
Increase
as of Apr. 1, 2021
Outstanding shares(Shares)Number of shares
as of Mar. 31, 2022

Decrease

Common stock

23,267,169--

23,267,169

Total

23,267,169--

23,267,169

Common stock (Note)

18,026445-

18,471

Total

18,026445-

18,471

Treasury shares

Note: Number of treasury shares of common stock increased 445 shares due to the acquisition of odd-lot shares.
2. Dividends(1) Dividend payment
Resolution

Type of share

General Shareholders’Meeting on Jun. 29, 2021
Board of Directors’ meetingon Nov. 8, 2021

Commonstock
Commonstock

Total dividends(Thousands of yen)

Dividend pershare (Yen)Record date

Effective date

348,737

15

Mar. 31, 2021

Jun. 30, 2021

371,982

16

Sep. 30, 2021

Dec. 2, 2021

(2) Dividends with a record date in the current fiscal year 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
488,22221 Mar. 31, 2022
Meeting on Jun. 29, 2022
stock
earnings

15

Effective dateJun. 30, 2022

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2023

FY2022 (Apr. 1, 2022 – Mar. 31, 2023)
1. Type of share and number of shares of outstanding shares and treasury shares
Number of shares
Increase
as of Apr. 1, 2022
Outstanding shares(Shares)Number of shares
as of Mar. 31, 2023

Decrease

Common stock

23,267,169--

23,267,169

Total

23,267,169--

23,267,169

18,471140-

18,611

Treasury shares
Common stock (Note)
Total

18,471140
Note: Number of treasury shares of common stock increased 140 shares due to the acquisition of odd-lot shares.

18,611

2. Dividends(1) Dividend payment
Resolution

Type of share

General Shareholders’Meeting on Jun. 29, 2022
Board of Directors’ meetingon Nov. 7, 2022

Commonstock
Commonstock

Total dividends(Thousands of yen)

Dividend pershare (Yen)Record date

Effective date

488,222

21

Mar. 31, 2022

Jun. 30, 2022

464,972

20

Sep. 30, 2022

Dec. 2, 2022

(2) Dividends with a record date in the current fiscal year 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’CommonRetained581,21325 Mar. 31, 2023
Meeting on Jun. 29, 2023
stock
earnings

Effective dateJun. 30, 2023

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)
FY2021
FY2022(Apr. 1, 2021 – Mar. 31, 2022)(Apr. 1, 2022 – Mar. 31, 2023)
Cash and deposits
Time deposit with maturities over three months

27,191,189(291,160)

28,506,871(107,527)

Cash and cash equivalents

26,900,029

28,399,343

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, and shares of subsidiaries and associates are mainly stock of companies withrelationships with the Zuken Group and bond investment trusts. These securities are vulnerable to risk associated with changes
in their market prices. The Company periodically checks fair values, the financial condition of issuers and other items in or der toquickly identify securities that may need to be written down and reduce 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, 2023

(3) Supplemental explanation concerning fair values, etc. of financial instruments
As the calculation of fair value of the financial instruments incorporates varying factors, the amount may vary 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.
FY2021 (As of Mar. 31, 2022)
Book valueMarketable securities and investment
securities
Shares of subsidiaries and associates

9,425,192

Assets total(Thousands of yen)
Difference

Fair value
9,424,022(1,170)2,002,416

4,795,312

2,792,896

11,427,608

14,219,334

2,791,726

FY2022 (As of Mar. 31, 2023)
Book valueMarketable securities and investment
securities
Shares of subsidiaries and associates(Thousands of yen)
Difference

Fair value

9,641,397

9,640,957(440)

2,266,680

7,560,000

5,293,319

11,908,077
17,200,957
5,292,879
Assets total(*1) Cash and deposits, notes receivable-trade, accounts receivable-trade, and accounts payable-trade are omitted, because they
include cash, and fair value of deposits, notes receivable-trade, accounts receivable-trade, and accounts payable-trade are
deemed to be equal to their carrying amount as they are settled within a short period of time.
(*2) Shares with no market price are not included in “marketable securities and investment securities.” Book value of thesefinancial instruments are as follows.
Item(Thousands of yen)
FY2022

FY2021

301,960

389,800

Unlisted stocks

Note: Balance of money claims and marketable securities with maturity scheduled to be redeemed in the subsequent fiscal years
FY2021 (As of Mar. 31, 2022)
Due within one year
Cash and deposits
27,191,189
Notes receivable-trade383,412
Accounts receivable5,647,008
trade
Total
33,221,610
FY2022 (As of Mar. 31, 2023)
Due within one year
Cash and deposits
28,506,871
Notes receivable-trade227,597
Accounts receivable6,461,314
trade
Total
35,195,783--(Thousands of yen)Over ten years
-

-

-

-

-

-

-

-

-

(Thousands of yen)Over ten years
-

-

-

-

-

-

-

One to five years

Five to ten years

One to five years

Five to ten years

3. Fair values of financial instruments grouped into different levels
The fair values of financial instruments are classified into the following three levels based on the observability and materiality of
inputs used to calculate the fair values.
Level 1 fair value: Of the inputs used for calculating observable fair value, fair values calculated using market prices for
assets and liabilities subject to the calculation of fair values in an active market.
Level 2 fair value: Of the inputs used for calculating observable fair value, fair values calculated using inputs concerning the
calculation of fair value other than the inputs used for level 1 fair value.
Level 3 fair value: Fair value calculated by using inputs concerning the calculation of fair values that cannot be observed.

17

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2023

When more than one input that has a significant effect on the calculation of fair value is used, the resulting fair value isclassified as the lowest level for fair value calculation from among the levels of the inputs used.
(1) Financial instruments recorded in the consolidated balance sheet at fair value
FY2021 (As of Mar. 31, 2022)
Item
Marketable securities andinvestment securities
Available-for-salesecurities
SharesAssets total(Thousands of yen)
Fair value
Level 1

Level 2

2,725,192
2,725,192

Level 3

-

Total

-

FY2022 (As of Mar. 31, 2023)
Item
Marketable securities andinvestment securities
Available-for-salesecurities
SharesAssets total

2,725,192
2,725,192(Thousands of yen)

Fair value
Level 1

Level 2

2,941,397
2,941,397

Level 3

-

Total

-

2,941,397
2,941,397(2) Financial instruments other than those recorded in the consolidated balance sheet at fair value
FY2021 (As of Mar. 31, 2022)
Item
Marketable securities andinvestment securities
Available-for-salesecurities
Bond investment trusts
Shares of subsidiaries andassociates
Assets total(Thousands of yen)
Fair value
Level 1

Level 2

Level 3

Total-

6,698,830-

6,698,830

4,795,312--

4,795,312

4,795,312

6,698,830-

11,494,142

FY2022 (As of Mar. 31, 2023)(Thousands of yen)
Fair value

Item

Level 1
Level 2
Level 3Marketable securities andinvestment securities
Available-for-salesecurities
Bond investment trusts
6,699,560
Shares of subsidiaries and7,560,000
associates
Assets total
7,560,000
6,699,560
Note: Explanation of the evaluation method and inputs used for calculating fair values

Total

-

6,699,560-

14,259,560

7,560,000

Securities and investment securities, and shares of subsidiaries and associates
Listed stock is valued by using market prices. These fair values are classified as level 1 fair value because listed
securities are traded in an active market.
Bond investment trusts are valued by using the reference prices announced by financial institutions that trade thesebonds. These prices are not recognized as market prices in an active market and, as a result, the fair values are
categorized as level 2 fair value.

18

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2023

Marketable Securities
1. Available-for-sale securities
FY2021 (As of Mar. 31, 2022)
Type
Securities with book value that exceeds
acquisition cost(1) Shares(2) Bonds

Book value

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

Acquisition cost

2,244,850-(3) Others(Thousands of yen)
Unrealized gains (losses)

92,907-2,151,942
-

-

-

-

2,244,850

92,9072,151,942

480,342-499,999-(19,657)-

6,700,000

6,700,000-

7,180,342

7,199,999(19,657)

Total
9,425,192
7,292,906
2,132,285
Note: Unlisted stocks (book value of 389,800 thousand yen) are not included in available-for-sale securities in the above tablebecause these securities are shares with no market price.
FY2022 (As of Mar. 31, 2023)
Type
Securities with book value that exceeds
acquisition cost(1) Shares(2) Bonds(3) Others
Sub-total
Securities with book value not exceedingacquisition cost(1) Shares(2) Bonds(3) Others
Sub-total

Book value(Thousands of yen)
Unrealized gains (losses)

Acquisition cost

2,941,397-

592,906-

2,348,491-

2,941,397

592,906

2,348,491---

6,700,000

6,700,000-

6,700,000

6,700,000-

Total
9,641,397
7,292,906
2,348,491
Note: Unlisted stocks (book value of 301,960 thousand yen) are not included in available-for-sale securities in the above tablebecause these securities are shares with no market price.
2. Available-for-sale securities soldFY2021 (Apr. 1, 2021– Mar. 31, 2022)
Type(1) Shares(2) Bonds(3) Others
Total

Sales amount

Aggregate gains(Thousands of yen)
Aggregate losses

5,808,953-

5,808,953--

5,808,953

5,808,953-

FY2022 (Apr. 1, 2022 – Mar. 31, 2023)
Not applicable.
3. Securities purpose of ownership revision
FY2021 (Apr. 1, 2021– Mar. 31, 2022)
Due to the purchase of additional stock of Business Engineering Co., Ltd., which was classified as available -for-sale securities
in previous years, has been reclassified as shares of subsidiaries and associates (book value of 2,002,416 thousand yen).

19

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2023

FY2022 (Apr. 1, 2022– Mar. 31, 2023)
Not applicable.
4. Marketable securities written down for impairment
Unlisted stocks in available-for-sale securities were written down by 87,839 thousand yen in FY2022.
When determining the impairment of marketable securities, a security is written down to nothing if the fair value at the end of a
fiscal period is significantly below the acquisition cost.

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 andbreakdown of revenue
FY2021 (Apr. 1, 2021 – Mar. 31, 2022)(Thousands of yen)
Reportable segment

Japan

EuropeAmericas

Adjustment
Asia

Total

amountAppropriated amountin the consolidated
financial statements(Note 1)

(Note 2)

Net sales
Solutions

13,796,557

2,772,256

1,219,996

567,263

18,356,073-

18,356,073

Client services

8,636,541

2,628,635

1,026,823

854,192

13,146,192-

13,146,192

Sales to third parties

22,433,098

5,400,892

2,246,819

1,421,455

31,502,266-

31,502,266

Intersegment sales or transfers

1,178,165

963,524

66,643

113,482

2,321,816(2,321,816)-

23,611,264

6,364,416

2,313,463

1,534,938

33,824,082(2,321,816)

31,502,266

Total
Segment profit

3,091,741

308,898

125,142

373,700

3,899,484

4,933

3,904,417

Segment assets

25,419,532

5,958,628

1,781,469

1,902,677

35,062,308

24,043,579

59,105,887

Depreciation

563,200

96,64010,06136,198706,100-

706,100

Amortization of goodwill

130,998

48,971--

179,970-

179,970

2,002,416---

2,002,416-

2,002,416

633,751
equipment and intangible assets
Notes: 1. Contents of adjustments are as follows.

59,795

14,6603,322

711,529-

711,529

Other items

Investment in companies
accounted for using equity method
Increase in property, plant and(1) Adjustment amount in segment profit includes amount of 4,933 thousand yen eliminated for intersegment transactions.
(2) Adjustment amount in segment assets includes amount of -3,328,077 thousand yen eliminated for intersegment transactions andtotal company assets of 27,371,656 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.

20

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2023

FY2022 (Apr. 1, 2022 – Mar. 31, 2023)(Thousands of yen)
Reportable segment

Japan

EuropeAmericas

Adjustment
Asia

amountTotal

Appropriated amountin the consolidated
financial statements(Note 1)

(Note 2)

Net sales
Solutions

14,884,065

3,270,309

1,490,843

592,858

20,238,076-

20,238,076

Client services

9,480,724

3,060,701

1,316,363

977,555

14,835,344-

14,835,344

Sales to third parties

24,364,789

6,331,010

2,807,206

1,570,414

35,073,421-

35,073,421

Intersegment sales or transfers

1,414,861

1,144,391

85,666

120,138

2,765,057(2,765,057)-

25,779,650

7,475,402

2,892,872

1,690,552

37,838,478(2,765,057)

35,073,421

Total
Segment profit (loss)

3,659,089

432,840(113,453)

412,0114,390,488

37,876

4,428,364

Segment assets

27,805,565

7,313,579

3,374,879

2,233,779

40,727,803

21,770,368

62,498,172

565,760

111,534

10,07344,645732,013-732,013-47,681--47,681-47,681Other items
Depreciation
Amortization of goodwill
Investment in companies

2,266,680---

2,266,680

615,459
equipment and intangible assets
Notes: 1. Contents of adjustments are as follows.

236,602

10,554

4,039

866,654

accounted for using equity method
Increase in property, plant and-2,266,680
866,654(1) Adjustment amount in segment profit (loss) includes amount of 37,876 thousand yen eliminated for intersegment transactions.
(2) Adjustment amount in segment assets includes amount of -4,437,125 thousand yen eliminated for intersegment transactions andtotal company assets of 26,207,494 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 (loss) is adjusted with operating profit in the consolidated statement of income.

Per-share Information(Yen)
FY2022(Apr. 1, 2022 – Mar. 31, 2023)

FY2021(Apr. 1, 2021 – Mar. 31, 2022)
Net assets per share

1,644.76

1,758.56

Net income per share
129.16
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.
FY2021(Apr. 1, 2021 – Mar. 31, 2022)

137.48Net 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.

21

FY2022(Apr. 1, 2022 – Mar. 31, 2023)

3,002,866

3,196,338--

3,002,866

3,196,338

23,248,912

23,248,639

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2023

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

FY2021(Apr. 1, 2021 – Mar. 31, 2022)
AmountComposition (%)
22,433,098
71.2
5,400,892
17.1
2,246,819
7.1
1,421,455
4.6
31,502,266
100.0(b) Orders received and order backlog
FY2021(Apr. 1, 2021 – Mar. 31, 2022)
Segment
Orders received
Order backlog
Japan
24,076,563
10,556,561
Europe5,853,810
2,598,141
Americas2,440,821
1,693,588
Asia
1,391,398
525,607
Total
33,762,594
15,373,898
Note: Intersegment transactions have been eliminated.
(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

FY2021(Apr. 1, 2021 – Mar. 31, 2022)
AmountComposition (%)
4,262,916
13.5
6,884,653
21.9
7,198,240
22.8
13,146,192
41.8
10,2630.0
31,502,266
100.0(b) Orders received and order backlog(Thousands of yen)
FY2022(Apr. 1, 2022 – Mar. 31, 2023)
AmountComposition (%)
24,364,789
69.5
6,331,010
18.1
2,807,206
8.0
1,570,414
4.4
35,073,421
100.0(Thousands of yen)
FY2022(Apr. 1, 2022 – Mar. 31, 2023)
Orders received
Order backlog
25,499,907
11,691,679
6,278,877
2,705,320
3,143,001
2,185,245
1,626,323
627,367
36,548,110
17,209,613(Thousands of yen)
FY2022(Apr. 1, 2022 – Mar. 31, 2023)
AmountComposition (%)
4,123,936
11.8
7,817,245
22.3
8,290,717
23.6
14,835,344
42.3
6,176
0.0
35,073,421
100.0(Thousands of yen)
FY2021
FY2022(Apr. 1, 2021 – Mar. 31, 2022)(Apr. 1, 2022 – Mar. 31, 2023)
Product category
Orders received
Order backlog
Orders received
Order backlog
Printed Circuit Board design solutions
4,335,436
941,949
4,104,044
961,463
Circuit design solutions
6,913,672
1,514,492
7,715,005
1,468,171
IT solutions
7,775,450
1,790,392
8,313,597
1,843,363
Client services
14,728,184
11,126,676
16,407,471
12,934,413
Others
9,850
387
7,990
2,200
Total
33,762,594
15,373,898
36,548,110
17,209,613
Note: Name of major products by product category are as follows.
CR-8000 Design Force
CR-8000 Board Designer
Major products of Printed Circuit Board design
CR-8000 DFM Center
solutions
CADSTAReCADSTAR
CR-8000 Design Gateway
CR-8000 System Planner
E3.series
Major products of Circuit design solutions
E3.infinite
Cabling Designer
Harness Designer
DS-CR
DS-2 Expresso
DS-E3
Major products of IT solutions
DS-E3.infinite
GENESYS
PreSight visual BOM

22

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2023

5. Non-consolidated Financial Statements(1) Balance SheetFY2021(As of Mar. 31, 2022)(Thousands of yen)
FY2022(As of Mar. 31, 2023)

AssetsCurrent assets
Cash and deposits

17,556,664

16,264,136

238,093

210,939

Accounts receivable-trade

2,410,582

2,417,649

Securities

6,700,000

6,700,000

Inventories
Other

72,283322,165

70,472
358,107

27,299,790

26,021,305

Buildings

2,584,349

2,465,022

Structures

26,417

26,408

Vehicles

15,797

9,953

Notes receivable-trade

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

Tools, furniture and fixtures
Land
Leased assets

118,236

126,5023,009,559

3,009,559

2,822

13,583

5,757,181

5,651,030

Other374,977

449,076

Total intangible assets

374,977

449,076

Investment securities

3,114,992

3,243,357

Shares of subsidiaries and associates

3,639,220

4,374,472

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

1,035,847

1,035,847

244,730-

942,367

1,265,122

Total property, plant and equipment
Intangible assets

Investments and other assets

538,409458,521

Other

372,335

345,560

Allowance for doubtful accounts(259,975)(16,405)

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

23

9,627,927

10,706,477

15,760,086

16,806,584

43,059,876

42,827,890

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2023

FY2021(As of Mar. 31, 2022)(Thousands of yen)
FY2022(As of Mar. 31, 2023)

Liabilities
Current liabilities
Accounts payable-trade

426,017331,438

Accounts payable-other746,393878,068

Income taxes payable

2,210,528

266,373

Advances received

910,863969,513

Provision for bonuses

359,961

432,334

Provision for bonuses for directors (and other officers)

80,00062,937

Other

193,911

207,600

4,927,676

3,148,266

2,563,172

2,586,848

21,000-96,85096,85016,72922,504

2,697,752

2,706,203

7,625,428

5,854,469

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

12,525,000

13,825,000

Total current liabilities
Non-current liabilities
Provision for retirement benefits
Provision for loss on business of subsidiaries andassociates
Long-term accounts payable-other
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Share capital
Capital surplus

Retained earnings
Legal retained earnings
Other retained earnings
General reserve
Retained earnings brought forward

2,363,020

2,452,403

15,199,103

16,588,486(19,279)(19,737)

33,954,641

35,343,567

Valuation difference on available-for-sale securities

1,479,806

1,629,852

Total valuation and translation adjustments

1,479,806

1,629,852

35,434,448

36,973,420

43,059,876

42,827,890

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

Total net assets
Total liabilities and net assets

24

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2023

(2) Statement of Income
FY2021(Apr. 1, 2021 – Mar. 31, 2022)(Thousands of yen)
FY2022(Apr. 1, 2022 – Mar. 31, 2023)

Net sales

11,289,628

12,042,319

Cost of sales

2,699,501

3,006,542

Gross profit

8,590,127

9,035,776

Selling, general and administrative expenses

7,074,477

7,351,494

Operating profit

1,515,650

1,684,281

1,035

9,553

1,133,073

1,414,538

Non-operating income
Interest income
Dividend income
Foreign exchange gains

99,73568,656

Rental income

139,307

136,829

Other
Total non-operating income

86,75389,3301,459,905

1,718,907

120,262

132,177

2,114

171

Non-operating expenses
Rental costs on real estate
Other
Total non-operating expenses
Ordinary profit

122,376

132,349

2,853,178

3,270,840

544

-

-

245,072

Extraordinary income
Gain on sale of non-current assets
Reversal of allowance for doubtful accounts for
subsidiaries and associates
Reversal of provision for loss on business of subsidiaries
and associates
Gain on sales of investment securities-

21,0005,808,953-

Total extraordinary income

5,809,498

266,072

Loss on disposal of non-current assets

15,081

3,278

Loss on valuation of shares of subsidiaries and associates

Extraordinary losses
492,810

592,995

Loss on valuation of investment securities-

87,839Loss on liquidation of subsidiaries
Loss on valuation of investments in capital ofsubsidiaries and associates
Provision of allowance for doubtful accounts for
subsidiaries and associates
Provision for loss on business of subsidiaries andassociates
Total extraordinary losses-

785

3,669,127-

245,072-

21,000-4,443,092

684,900

Profit before income taxes

4,219,584

2,852,012

Income taxes-current

2,331,247

495,704

Income taxes-deferred(97,359)

13,729Total income taxes

2,233,888

509,434

Profit1,985,696

2,342,578

25

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2023

(3) Statement of Changes in Equity
FY2021 (Apr. 1, 2021 – Mar. 31, 2022)(Thousands of yen)
Shareholders’ equity
Capital surplus

Retained earnings
Other retained earnings

Share capital

Balance at beginning of period
Cumulative effects ofchanges in accounting
policies
Restated balance

10,117,065

10,117,065

Legalcapitalsurplus

Total capitalsurplus8,657,753

8,657,753

8,657,753

8,657,753

Legalretainedearnings

Total
retainedearnings

Retainedearnings
brought
forward2,605,601

13,941,684(7,557)(7,557)

311,082 11,025,000

2,598,043

13,934,126

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

Generalreserve

311,082 11,025,000

Changes during period
Provision of general reserve
Dividends of surplus(720,720)(720,720)

Profit1,985,696

1,985,696

1,500,000(235,023)

1,264,976

311,082 12,525,000

2,363,020

15,199,103

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
32,698,768
4,510,039
4,510,039

Shareholders’ equity

Treasury shares
Balance at beginning of period
Cumulative effects ofchanges in accounting
policies(17,734)

Restated balance(17,734)(7,557)32,691,210

Total net assets

37,208,808(7,557)4,510,039

4,510,039

37,201,250

Changes during period
Provision of general reserve
Dividends of surplus
ProfitPurchase of treasury shares
Net changes other thanshareholders’ equity(1,545)

Total changes during period(1,545)

Balance at end of period(19,279)(720,720)(720,720)

1,985,696

1,985,696(1,545)(1,545)(3,030,233)(3,030,233)(3,030,233)

1,263,430(3,030,233)(3,030,233)(1,766,802)

33,954,641

1,479,806

1,479,806

35,434,448

26

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2023

FY2022 (Apr. 1, 2022 – Mar. 31, 2023)(Thousands of yen)
Shareholders’ equity
Capital surplus

Retained earnings
Other retained earnings

Share capital

Balance at beginning of period

10,117,065

Legalcapitalsurplus

Total capitalsurplus8,657,753

8,657,753

Legalretainedearnings

311,082 12,525,000

Retainedearnings
brought
forward2,363,020

1,300,000(1,300,000)

Generalreserve

Total
retainedearnings
15,199,103

Changes during period
Provision of general reserve
Dividends of surplus(953,195)(953,195)

Profit2,342,578

2,342,578

1,300,000

89,383

1,389,383

311,082 13,825,000

2,452,403

16,588,486

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
33,954,641
1,479,806
1,479,806

Shareholders’ equity

Treasury shares
Balance at beginning of period(19,279)

Total net assets

35,434,448

Changes during period
Provision of general reserve
Dividends of surplus(953,195)(953,195)

Profit2,342,578

2,342,578

(457)

(457)

Purchase of treasury shares
Net changes other thanshareholders’ equity
Total changes during period
Balance at end of period(457)

150,046

150,046

150,046(457)

1,388,926

150,046

150,046

1,538,972(19,737)

35,343,567

1,629,852

1,629,852

36,973,420

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

27