May 9, 2022

Summary of Consolidated Financial Results for the Fiscal Year Ended March 31, 2022 (FY2021)[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, 2022
Scheduled date of payment of dividend:
June 30, 2022
Scheduled date of filing of Annual Securities Report:
June 29, 2022
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, 2022 (April 1, 2021 – March 31, 2022)(1) Consolidated results of operations(Percentages represent year-on-year changes)
Net sales

Operating profit

Millions of yen%
Fiscal years ended
Mar. 31, 2022
31,502
9.3
Mar. 31, 2021
28,819(1.6)
Note: Comprehensive income (Millions of yen)

Net income pershare

Millions of yen

Profit attributable toowners of parent

Ordinary profit

Millions of yen

%

3,904
35.0
4,177
32.5
3,002
2,891 (14.7)
3,153
(9.6)
2,137
Fiscal year ended Mar. 31, 2022:
540 (down 88.2%)
Fiscal year ended Mar. 31, 2021:
4,567 (up 73.4%)%

40.5(17.7)

Diluted net income
per share

Millions of yen

Return on equity%

Ordinary profit on
total assets

Yen
Yen
%
Fiscal years ended
Mar. 31, 2022
129.16
7.8
Mar. 31, 2021
91.92
5.8
Reference: Equity in earnings of associates (Millions of yen) Fiscal year ended Mar. 31, 2022:
Fiscal year ended Mar. 31, 2021:

Operating profit to
net sales

%

%

7.2
5.8

12.4
10.0

84
-

Note: Effective from the beginning of the fiscal year ended on March 31, 2022, Zuken applied the Accounting Standard for Revenue
Recognition (ASBJ Statement No. 29, March 31, 2020), etc. All figures for the fiscal year ended March 31, 2022 incorporate thisaccounting standard.

(2) Consolidated financial position
Total assets

Net assets

Millions of yen

Shareholders’ equity ratio

Millions of yen

Net assets per share%

Yen

As of Mar. 31, 2022
59,10538,61664.7
1,644.76
As of Mar. 31, 2021
57,16838,84267.4
1,656.21
Reference: Shareholders’ equity (Millions of yen)
As of Mar. 31, 2022: 38,238
As of Mar. 31, 2021: 38,505
Note: Effective from the beginning of the fiscal year ended on March 31, 2022, Zuken applied the Accounting Standard for Revenue
Recognition (ASBJ Statement No. 29, March 31, 2020), etc. All figures as of March 31, 2022 incorporate this accounting standard.

(3) Consolidated cash flows
Cash flows fromoperating activities
Fiscal years ended
Mar. 31, 2022
Mar. 31, 2021

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

1,247
2,661

4,703
(1,168)

(765)
(749)

26,90021,412

2. 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

%

%

32.6
28.6

1.9
2.2

Fiscal year ended Mar. 31, 2021
15.00
15.00 30.00
697
Fiscal year ended Mar. 31, 2022
16.00
21.00 37.00
860
Fiscal year ending Mar. 31, 2023
20.00
20.00 40.00(forecast)
Note: The year-end dividend for the fiscal year ended March 31, 2022 includes a special dividend of 5 yen.

30.5

3. Consolidated Forecast for the Fiscal Year Ending March 31, 2023 (April 1, 2022 – March 31, 2023)
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
33,500
6.3
4,100
5.0
4,300
2.9
3,050
Note: Only the full-year forecast is shown because Zuken manages performance on a fiscal year basis.

%

1.6

131.19* 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:

Yes(b) Changes in accounting policies other than (a) above:None(c) Changes in accounting-based estimates:

None(d) Restatements:
None
Note: Please refer to “3. Consolidated Financial Statements and Notes, (5) Notes to Consolidated Financial Statements, Changes in
Accounting Policies” on page 14 for further information.

(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, 2022:

23,267,169 shares

As of Mar. 31, 2021:

23,267,169 shares

As of Mar. 31, 2021:

18,026 shares(b) Number of treasury shares at the end of the period
As of Mar. 31, 2022:

18,471 shares(c) Average number of shares outstanding during the period
Fiscal year ended Mar. 31, 2022:

23,248,912 sharesFiscal year ended Mar. 31, 2021:

23,249,298 shares

Reference: Summary of Non-consolidated Financial Results
Non-consolidated Financial Results for the Fiscal Year Ended March 31, 2022 (April 1, 2021 – March 31, 2022)(1) Non-consolidated results of operations
Net sales
Fiscal years ended
Mar. 31, 2022
Mar. 31, 2021

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

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

11,289
11,135

1.4
(7.8)

1,515
1,342

12.9
(20.1)

2,853
2,662

7.2
4.3

1,985
2,236

(11.2)(1.8)

Net income per share
Fiscal years ended
Mar. 31, 2022
Mar. 31, 2021

Diluted net income per share

Yen

Yen

85.41
96.21

-

(2) Non-consolidated financial position
Total assets

Net assets

Millions of yen

Millions of yen

As of Mar. 31, 2022
43,059As of Mar. 31, 2021
43,654
Reference: Shareholders’ equity (Millions of yen)

35,43437,208
As of Mar. 31, 2022:

Shareholders’ equity ratio

Net assets per share%

35,434

82.3
85.2
As of Mar. 31, 2021:

Yen

1,524.15
1,600.44
37,208* 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 4 for forecast assumptions and notes of caution for usage.

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2022

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 Consolidated Financial Statements ........................................................................................................... 12
Going Concern Assumption ...................................................................................................................................... 12
Basis of Presenting the Consolidated Financial Statements ...................................................................................... 12
Changes in Accounting Policies ................................................................................................................................ 14
Notes to Consolidated Balance Sheet ........................................................................................................................ 15
Notes to Consolidated Statement of Income ............................................................................................................. 15
Notes to Consolidated Statement of Comprehensive Income ................................................................................... 16
Notes to Consolidated Statement of Changes in Equity ............................................................................................ 16
Notes to Consolidated Statement of Cash Flows....................................................................................................... 17
Financial Instruments ................................................................................................................................................ 17
Marketable Securities ................................................................................................................................................ 20
Segment Information ................................................................................................................................................. 21
Per-share Information ................................................................................................................................................ 22
Subsequent Events..................................................................................................................................................... 22

4.

Production, Orders and Sales ..................................................................................................................................... 23

5.

Non-consolidated Financial Statements..................................................................................................................... 24(1) Balance Sheet .......................................................................................................................................................... 24(2) Statement of Income................................................................................................................................................ 26(3) Statement of Changes in Equity .............................................................................................................................. 27

6.

Others ........................................................................................................................................................................ 29

1

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2022

1. Overview of Results of Operations, etc.
(1) Results of Operations
In the current fiscal year, the economy continued to recover gradually as the restrictions on economic activities due
to COVID-19 have been eased. However, the outlook for the economy became increasingly uncertain due to Russia’s
invasion of Ukraine toward the end of the fiscal year.
Manufacturers in the electronics, automotive and industrial equipment sectors are the main customers of the Zuken
Group, and many companies in these sectors continued to make substantial IT investments and overall capital
expenditures continued to recover.
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, increasing sales of core products and launching
new products. Major initiatives of the fiscal year were as follows.
(i) Increased sales of core products
We have upgraded the functions of CR-8000, our core electronic system design solution series for the electronics
manufacturing industry, to enable smooth product design even in remote work environments and took actions toboost sales by promoting migration from the CR-5000 series. Simultaneously, we focused on increasing sales ofE3.series, a wire harness design system, for manufacturers in the automotive and industrial equipment sectors.
Sales were particularly strong in Europe and the U.S.
In addition, we linked these design systems with the DS series of data management systems to offer integrated
solutions that cover all processes from the design to data management along with strengthening our sales
activities focused on our major customers.
Though the crisis caused by the COVID-19 pandemic limited sales activities because of restrictions on face-toface contact we used ZUKEN digital, a new web communication tool, to accurately grasp customer needs andmake timely proposals. Consequently, sales activities surpassed the pre-pandemic level.
(ii) Launched new products
We developed and commenced marketing E3.infinite, a new wire harness design system that dramaticallyupgrades existing systems, to the transportation equipment manufacturers that involve large-scale designing. Thissystem is ideal for distributed/parallel design of large-scale systems as well as for supplier collaboration. The
new wire harness design system also enables generative design process of harness wiring. We will expand salesof E3.infinite along with DS-E3.inifinite, an electrical design data management system for use with it.
In the electronics engineering of manufacturing industries, we developed GENESYS-CR to create a link between
GENESYS, a model-based systems engineering (MBSE) modeling tool of a Zuken U.S. subsidiary, and our core
CR-8000 design system series. This product optimizes the MBSE methodology that requires a lot of time andeffort for full-scale introduction, for electric and electronic design. By digitizing existing design assets at theconceptual design stage, it is possible to consistently manage the design requirements over the whole engineering
process. Going forward, we will actively promote sales to customers who are considering the adoption of the
MBSE 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 according to acommon systems 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

31,502 million yen
4,177 million yen
3,002 million yen
2(up 9.3% year on year)(up 32.5% year on year)(up 40.5% year on year)

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2022

Fiscal year sales increased significantly from one year earlier to a new record high. This is attributable to higher salesof E3.series, a wire harness design system, and strong sales of our core CR-8000 series, an electronic system design
solution series.
Earnings were also much higher because of the increase in sales, with operating profit and ordinary profit reachingrecord highs. Profit attributable to owners of parent increased significantly due to an extraordinary income from salesof strategic shareholdings although there was an extraordinary loss resulting from a defined benefit pension planbuyout conducted by subsidiaries in the United Kingdom.
Product category sales were as follows.
Product category sales
Printed Circuit Board design solutions
Circuit design solutions
IT solutions
Client services

4,262 million yen
6,884 million yen
7,198 million yen
13,146 million yen(up 0.3% year on year)(up 16.2% year on year)(up 2.2% year on year)(up 13.4% year on year)

Major products of Printed Circuit Board design solutions

CR-8000 Design Force
CR-8000 Board Designer
CR-8000 DFM Center
CADSTAReCADSTAR

Major products of Circuit design solutions

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

Major products of IT solutions

DS-CR
DS-2 Expresso
DS-E3
DS-E3.infinite
GENESYS
PreSight visual BOM(2) Financial Position
Total assets at the end of the current fiscal year increased 1,937 million yen from the end of the previous fiscal year
to 59,105 million yen. The main factors include an increase of 5,497 million yen in cash and deposits, which offset a
decrease of 3,619 million yen in investments and other assets primarily due to sales of investment securities.
Liabilities increased 2,163 million yen from the end of the previous fiscal year to 20,489 million yen. The main factors
were increases of 2,028 million yen in income taxes payable and 1,672 million yen in advances received, which offset
a decrease of 1,014 million yen in other non-current liabilities due to a decrease in deferred tax liabilities.
Net assets decreased 225 million yen from the end of the previous fiscal year to 38,616 million yen, and theshareholders’ equity ratio was 64.7%.
(3) Cash Flows
Cash and cash equivalents (hereafter “cash”) at the end of the current fiscal year increased 5,487 million yen over theend of the previous fiscal year to 26,900 million yen.
Cash flows by category were as follows.
Cash flows from operating activities
Net cash provided by operating activities decreased 1,413 million yen from the previous fiscal year to 1,247 million
3

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2022

yen. The main cash inflows were profit before income taxes of 6,125 million yen (a year-on-year increase of 3,146
million yen), an increase in advances received of 1,472 million yen (a year-on-year increase of 700 million yen),depreciation of 706 million yen (a year-on-year increase of 4 million yen). The main cash outflow was an adjustmentof 5,808 million yen for gain on sales of investment securities (a year-on-year increase of 5,812 million yen) andincome taxes paid of 1,135 million yen (a year-on-year increase of 82 million yen).
Cash flows from investing activities
Net cash provided by investing activities increased 5,872 million yen from the pr evious fiscal year to 4,703 million
yen. The main cash inflow was proceeds from sales of investment securities of 5,808 million yen. The main cash
outflows include purchase of non-current assets of 717 million yen (a year-on-year increase of 104 million yen) andpurchase of shares of subsidiaries and associates of 342 million yen (a year-on-year increase of 323 million yen).
Cash flows from financing activities
Net cash used in financing activities increased 16 million yen from the previous fiscal year to 765 million yen. Thiswas mainly due to cash dividends paid of 720 million yen (a year-on-year increase of 23 million yen).
Cash flow indicators were as follows:
Fiscal years ended

March 31, 2019

March 31, 2020

March 31, 2021

March 31, 2022

Shareholders’ equity ratio

69.1%

67.2%

67.4%

64.7%

Shareholders’ equity ratio based on market prices

73.8%

104.2%

114.9%

118.8%

Interest-bearing debt to cash flow ratio

0.9%

2.0%

2.3%

5.7%

11,290.9

977.3

1,205.4

393.0

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 the impact of the COVID-19 pandemic and the Ukrainian conflict
cannot be foreseen. On the other hand, dramatic changes are taking place worldwide in how products are designed
and manufactured because of advances in technologies and diversification of customer needs. We believe that thesechanges will expand the Zuken Group’s business 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 33,500 million yen, ordinary profit of 4,300 million yen, and profit attributable to owners ofparent of 3,050 million yen in the fiscal year ending March 31, 2023.
* 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, 2022

3. Consolidated Financial Statements and Notes(1) Consolidated Balance Sheet(Thousands of yen)
FY2021(As of Mar. 31, 2022)

FY2020(As of Mar. 31, 2021)
AssetsCurrent assets
Cash and deposits

21,693,586

Notes and accounts receivable-trade

6,806,824--

383,412

Notes receivable-trade27,191,189-

5,647,008

6,700,000

6,700,000

Merchandise and finished goods

466,069

683,085

Work in process

101,913103,141

2,158

1,700

3,252,730

4,276,778

272,520

302,402

Accounts receivable-trade
Securities

Raw materials and supplies
Prepaid expenses
Other(19,098)(29,361)

39,276,705

45,259,357

9,470,909

9,248,463

Accumulated depreciation(6,710,781)(6,543,100)

Buildings and structures, net

2,760,128

2,705,363

Machinery, equipment and vehicles

99,720102,027

Accumulated depreciation(72,860)(74,548)

Machinery, equipment and vehicles, net

26,86027,479Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures

Tools, furniture and fixtures

2,180,037

2,276,056

Accumulated depreciation(1,775,169)(1,884,275)

404,868

391,780

3,015,103

3,015,103

144,212

191,643(87,718)(124,967)

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

56,493

66,676

6,263,454

6,206,402

Goodwill

656,516

184,948

Other

640,839

743,981

1,297,355

928,929

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

Total intangible assets
Investments and other assets
Investment securities
Shares of subsidiaries and associates
Deferred tax assets

9,114,007

3,114,992-

2,002,416

637,383

996,219

Other

595,923

614,323

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

Total investments and other assets

10,330,561

6,711,198

17,891,371

13,846,530

57,168,076

59,105,887

Total non-current assets
Total assets

5

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2022

FY2020(As of Mar. 31, 2021)(Thousands of yen)
FY2021(As of Mar. 31, 2022)

Liabilities
Current liabilities
Accounts payable-trade

1,166,026

1,140,865

Income taxes payable

578,485

2,606,634

Advances received

7,688,741

9,361,007

Provision for bonuses

925,619

1,023,881

Provision for bonuses for directors (and other officers)

101,900

112,100

8,216

11,070Other2,181,249

2,227,089

Total current liabilities

12,650,238

16,482,648

Retirement benefit liability

4,457,677

3,803,764

Other

1,218,060

203,324

Total non-current liabilities

5,675,738

4,007,088

18,325,976

20,489,736

Share capital

10,117,065

10,117,065

Capital surplus

8,662,477

8,662,477

Retained earnings

15,614,931

17,852,882

Treasury shares(17,734)(19,279)

34,376,739

36,613,144

4,510,039

1,463,414

Foreign currency translation adjustment

48,857

153,932

Remeasurements of defined benefit plans(430,263)

8,050

Total accumulated other comprehensive income

4,128,633

1,625,397

Other provisions

Non-current liabilities

Total liabilities
Net assets
Shareholders’ equity

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

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

6

336,727

377,608

38,842,100

38,616,150

57,168,076

59,105,887

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2022

(2) Consolidated Statements of Income and Comprehensive Income
Consolidated Statement of Income
FY2020(Apr. 1, 2020 – Mar. 31, 2021)(Thousands of yen)
FY2021(Apr. 1, 2021 – Mar. 31, 2022)

Net sales

28,819,265

31,502,266

Cost of sales

8,774,685

9,708,034

Gross profit

20,044,579

21,794,232

Selling, general and administrative expenses

17,153,194

17,889,814

Operating profit

2,891,384

3,904,417

Interest income

8,669

9,663

Dividend income

67,60579,378Foreign exchange gains
Share of profit of entities accounted for using equity
methodSubsidy income

49,0183,219-

84,93965,90850,648Other

75,09151,642

Total non-operating income

266,292

279,492

Interest expenses

2,208

3,174

Other

2,141

2,910

Non-operating income

Non-operating expenses

Total non-operating expenses
Ordinary profit

4,349

6,085

3,153,326

4,177,825

1,392

1,075

-

5,808,953

1,392

5,810,029

Extraordinary income
Gain on sale of non-current assets
Gain on sale of investment securities
Total extraordinary income
Extraordinary losses
Loss on disposal of non-current assets

20,36820,552Retirement benefit expenses

24,962

3,509,057

Impairment losses
Loss on cancel of contracts
Loss on sale of investment securities
Total extraordinary losses-

332,369

127,000

-

3,499

-

175,829

3,861,979

2,978,889

6,125,875

Income taxes-current

912,376

3,077,235

Income taxes-deferred(21,716)

4,891

Total income taxes

890,660

3,082,127

Profit2,088,229

3,043,747

Profit (loss) attributable to non-controlling interests(48,943)

40,881

Profit attributable to owners of parent

2,137,173

3,002,866

Profit before income taxes

7

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2022

Consolidated Statement of Comprehensive Income
FY2020(Apr. 1, 2020 – Mar. 31, 2021)(Thousands of yen)
FY2021(Apr. 1, 2021 – Mar. 31, 2022)

2,088,229

3,043,747

2,243,164(3,030,233)

Foreign currency translation adjustment

135,461

105,075

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

101,057

438,313-(16,392)

2,479,684(2,503,236)

4,567,913

540,5114,616,857

499,630(48,943)

40,881

ProfitOther comprehensive income
Valuation difference on available-for-sale securities

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, 2022

(3) Consolidated Statement of Changes in Equity
FY2020 (Apr. 1, 2020 – Mar. 31, 2021)(Thousands of yen)
Shareholders’ equity
Share capital
Balance at beginning of period

Capital surplus

10,117,065

8,659,023

Retainedearnings

Treasury shares

Total shareholders’equity(16,778)

32,934,550

14,175,240

Changes during period
Dividends of surplus(697,482)(697,482)

Profit attributable to owners ofparent2,137,173

2,137,173

Other

3,453

3,453

Purchase of treasury shares

(955)

(955)

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

-

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

Foreigncurrencytranslation
adjustment(86,604)

Total
NonRemeasurements accumulated
controllingof defined
otherinterests
benefit plans comprehensive
income(531,321)

1,648,949

429,808

Total net
assets35,013,308

Changes during period
Dividends of surplus(697,482)

Profit attributable to owners ofparent2,137,173

Other

3,453

Purchase of treasury shares(955)

Net changes other thanshareholders’ equity

2,243,164

135,461

101,057

2,479,684(93,080)

2,386,603

Total changes during period

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

9

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2022

FY2021 (Apr. 1, 2021 – Mar. 31, 2022)(Thousands of yen)
Shareholders’ equity
Share capital
Balance at beginning of period

Retainedearnings

Capital surplus

10,117,065

8,662,477

Cumulative effects of changes
in accounting policies
Restated balance

Treasury shares

Total shareholders’equity(17,734)

34,376,739

15,614,931(44,195)

10,117,065

8,662,477

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

34,332,544

Changes during period
Dividends of surplus(720,720)(720,720)

Profit attributable to owners ofparent3,002,866

3,002,866

Purchase of treasury shares(1,545)(1,545)

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

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

4,510,039

Foreigncurrencytranslation
adjustment
48,857

Total
NonRemeasurements accumulated
controllingof defined
otherinterests
benefit plans comprehensive
income(430,263)

4,128,633

336,727

Cumulative effects of changes
in accounting policies
Restated balance

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

4,510,039

48,857(430,263)

4,128,633

336,727

38,797,905

Changes during period
Dividends of surplus(720,720)

Profit attributable to owners ofparent3,002,866

Purchase of treasury shares(1,545)

Net changes other thanshareholders’ equity(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

10

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2022

(4) Consolidated Statement of Cash FlowsFY2020(Apr. 1, 2020 – Mar. 31, 2021)(Thousands of yen)
FY2021(Apr. 1, 2021 – Mar. 31, 2022)

2,978,889

6,125,875

701,838

706,100-

332,369

Cash flows from operating activities
Profit before income taxes
Depreciation
Impairment losses
Amortization of goodwill

247,095

179,970

Interest and dividend income(76,274)(89,042)

Foreign exchange losses (gains)Share of loss (profit) of entities accounted for using
equity method
Loss (gain) on sale of investment securities(7,408)

8,762-(84,939)3,499(5,808,953)

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

658,974

Increase (decrease) in trade payables(213,418)

117,412

Increase (decrease) in advances received

772,813

1,472,919

Decrease (increase) in prepaid expenses(674,724)(1,007,178)

Increase (decrease) in retirement benefit liability

260,964(259,433)

Other, net(66,757)(95,502)

Subtotal

3,640,303

2,257,334

Interest and dividends received

76,881

129,108

Interest paid

(2,208)(3,174)

Income taxes paid

(1,053,471)(1,135,645)

Net cash provided by (used in) operating activities

2,661,505

1,247,624

Purchase of property, plant and equipment(259,208)(301,628)

Purchase of intangible assets(353,845)(415,954)

Purchase of investment securities
Proceeds from sale and redemption of investment
securities
Purchase of shares of subsidiaries and associates(499,999)--

5,808,953(18,784)(342,522)

Other, net(36,784)(45,253)(1,168,621)

4,703,593

Cash flows from investing activities

Net cash provided by (used in) investing activities
Cash flows from financing activities
Purchase of treasury shares(955)(1,545)

Dividends paid

(697,482)(720,720)

Other, net(51,405)(43,637)

Net cash provided by (used in) financing activities(749,843)(765,903)

Effect of exchange rate change on cash and cash
equivalents

362,536

302,186

Net increase (decrease) in cash and cash equivalents

1,105,578

5,487,500

Cash and cash equivalents at beginning of period

20,306,950

21,412,529

Cash and cash equivalents at end of period

21,412,529

26,900,029

11

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2022

(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(1) Number of affiliates accounted for under the equity method: 1 (Business Engineering Corporation)
Business Engineering Corporation was included in the scope of application of the equity method due to additional
acquisition of its shares in the current fiscal year.
(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 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
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 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.

12

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2022

(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:
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.

13

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2022

(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 affiliates
are translated into Japanese yen at year-end exchange rates, and income and expenses into Japanese yen at the average of theexchange 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.

Changes in Accounting Policies
1. Application of the Accounting Standard for Revenue Recognition, etc.
Effective from the beginning of the fiscal year ended on March 31, 2022, Zuken applied the Accounting Standard for Revenue
Recognition (ASBJ Statement No. 29, March 31, 2020) etc. Based on this standard, revenue expected to be received in exchange
for the provision of goods and services is recognized when the control of the promised goods and services is transferred tocustomers. The main changes resulting from this application are as follows.
(1) Revenue recognition for sales of products
For some transactions, Zuken delivers the relevant products and provides free maintenance services within the warranty period
based on the contract with the customer. Previously, Zuken did not recognize revenue for such mai ntenance services. However,Zuken has decided to identify performance obligations related to the delivery of products and performance obligations related tosuch maintenance services and recognize revenue when each performance obligation is satisfied.
(2) Revenue recognition for agent transactions
For some transactions, the Zuken Group previously recognized revenue based on the total amount of consideration received
from the customer. However, for transactions in which the Zuken Group’s role in providing g oods or services to the customer isthat of an agent, the Zuken Group has decided to recognize revenue based on the net amount received from the customer less th eamount paid to the supplier.
For the application of the Accounting Standard for Revenue Recognition, etc., in accordance with the transitional treatmentprescribed in the proviso to Paragraph 84 of this standard, the cumulative effect of the retrospective application of the new
accounting standard, if it is applied prior to the beginning of the current fiscal year, is added to or subtracted from retained
earnings at the beginning of the current fiscal year. The new standard is then applied beginning with this amount of retained
earnings.
As a result, net sales decreased 168,795 thousand yen, cost of sales decreased 187,484 thousand yen, and operating profit,
ordinary profit and profit before income taxes increased 18,688 thousand yen each in the consolidated statement of income forthe current fiscal year. In addition, the new standard reduced retained earnings at the beginning of the current fiscal year by
44,195 thousand yen.
Furthermore, in accordance with the transitional treatment prescribed in Paragraph 89-3 of the Accounting Standard for Revenue
Recognition, Zuken has not presented information on revenue from contracts with customers broken down for the previous fiscal
year.

14

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2022

2. Application of the Accounting Standards for Fair Value Measurement, etc.
Effective from the beginning of the fiscal year ended on March 31, 2022, Zuken applied the Accounting Standard for Fair Value
Measurement (ASBJ Statement No. 30, July 4, 2019), etc. and has applied the new accounting policies set forth by the
Accounting Standard for Fair Value Measurement, etc. prospectively in accordance with the transitional treatment prescribed in
Paragraph 19 of the Accounting Standard for Fair Value Measurement and Paragraph 44 -2 of the Accounting Standard for
Financial Instruments (ASBJ Statement No. 10, July 4, 2019). There is no significant change in the calculation method of fairvalue as a result of this application.
In addition, Zuken decided to disclose notes on fair values of financial instruments grouped into differ ent levels in the notes toFinancial Instruments. However, in accordance with the transitional treatment prescribed in Paragraph 7 -4 of the“Implementation Guidance on Disclosures about Fair Value of Financial Instruments” (ASBJ Guidance No. 19, July 4, 2019),
the related notes are not presented for the previous fiscal year.

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

FY2020(As of Mar. 31, 2021)
Other (Investments in capital)

11,50011,500

FY2020(Apr. 1, 2020 – Mar. 31, 2021)(Thousands of yen)
FY2021(Apr. 1, 2021 – Mar. 31, 2022)

5,938,961

6,320,617

587,815594,699

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

Salaries and allowances
Depreciation
Provision of allowance for doubtful accounts-

10,447

Provision for bonuses

611,517645,282

Provision for bonuses for directors (and other officers)

101,900

112,100

Retirement benefit expenses

499,755

543,6074,174,951

4,190,462

Research and development expenses

2. Total amount of research and development expenses included in general and administrative expenses(Thousands of yen)
FY2020
FY2021(Apr. 1, 2020 – Mar. 31, 2021)(Apr. 1, 2021 – Mar. 31, 2022)
4,174,951

4,190,462

3. Breakdown of gain on sales of non-current assets is as follows.
FY2020(Apr. 1, 2020 – Mar. 31, 2021)(Thousands of yen)
FY2021(Apr. 1, 2021 – Mar. 31, 2022)

1,276

1,024

VehiclesTools, furniture and fixtures

116

51

1,392

1,075

FY2020(Apr. 1, 2020 – Mar. 31, 2021)(Thousands of yen)
FY2021(Apr. 1, 2021 – Mar. 31, 2022)-

16,615

106

3,374

Total
4. Breakdown of loss on disposal of non-current assets is as follows.

Telephone subscription rights
Buildings, etc.
Software and others
Total

15

20,261

562

20,36820,552ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2022

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

FY2020(Apr. 1, 2020 – Mar. 31, 2021)
Valuation difference on available-for-sale securities:
Amount incurred during the period

3,232,226

1,442,622-(5,808,953)

Before tax effect adjustments

3,232,226(4,366,330)

Tax effect(989,061)

1,336,097

Valuation difference on available-for-sale securities

2,243,164(3,030,233)

135,461

105,075

Amount incurred during the period(74,692)(11,572)

Re-classification adjustments

Re-classification adjustments

Foreign currency translation adjustment:
Amount incurred during the period
Remeasurements of defined benefit plans, net of tax:
159,071436,288

Before tax effect adjustments

84,379424,715

Tax effect

16,67813,598Remeasurements of defined benefit plans, net of tax

101,057

438,313

Share of other comprehensive income of entities
accounted for using equity method:Amount incurred during the period
Total other comprehensive income-(16,392)

2,479,684(2,503,236)

Notes to Consolidated Statement of Changes in Equity
FY2020 (Apr. 1, 2020 – Mar. 31, 2021)
1. Type of share and number of shares of outstanding shares and treasury shares
Number of shares
as of Apr. 1, 2020

Increase(Shares)Number of shares
as of Mar. 31, 2021

Decrease

Outstanding shares
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 current fiscal year but an effective date in the following fiscal year
Resolution
General Shareholders’Meeting on Jun. 29, 2021

Type ofshare
Commonstock

Total dividends(Thousands of yen)
348,737

16

Source offunds
Retainedearnings

Dividend pershare (Yen)Record date

Effective date

15

Mar. 31, 2021

Jun. 30, 2021

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2022

FY2021 (Apr. 1, 2021 – Mar. 31, 2022)
1. Type of share and number of shares of outstanding shares and treasury shares
Number of shares
as of Apr. 1, 2021

Increase(Shares)Number of shares
as of Mar. 31, 2022

Decrease

Outstanding shares
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

Effective dateJun. 30, 2022

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)
FY2020
FY2021(Apr. 1, 2020 – Mar. 31, 2021)(Apr. 1, 2021 – Mar. 31, 2022)
Cash and deposits

21,693,586

27,191,189

Time deposit with maturities over three months(281,057)(291,160)

Cash and cash equivalents

21,412,529

26,900,029

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.

17

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2022

(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.
FY2020 (As of Mar. 31, 2021)
Book valueMarketable securities and investment
securities
Assets total(Thousands of yen)
Difference

Fair value

15,424,207

15,424,207-

15,424,207

15,424,207-

Notes: 1. Matters concerning determination of fair value of financial instruments and marketable securities
AssetsMarketable securities and investment securities
For fair value of the financial instruments in these categories, stocks are valued based on their p rices on securities
exchanges. Fair value of bond investment trusts is deemed to be equal to its carrying amount. Please refer to the section“Marketable Securities” for information about securities categorized by purpose.
2. Financial instruments whose fair values are deemed to be extremely difficult to measure(Thousands of yen)
ItemBook value389,800

Unlisted stocks

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.
FY2021 (As of Mar. 31, 2022)
Book valueMarketable securities and investment
securities
Shares of subsidiaries and associates
Assets total(Thousands of yen)
Difference

Fair value

9,425,192

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

4,795,312

2,792,896

11,427,608

14,219,334

2,791,726(*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.
(Thousands of yen)
ItemBook value389,800

Unlisted stocks

Note: Balance of money claims and marketable securities with maturity scheduled to be redeemed in the subsequent fiscal years
FY2020 (As of Mar. 31, 2021)

Cash and deposits
Notes and accounts
receivable-trade
Total

-

-

(Thousands of yen)Over ten years-

6,806,824---

28,500,410

-

-

-

Due within one year
21,693,586

One to five years

18

Five to ten years

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2022

FY2021 (As of Mar. 31, 2022)

Cash and deposits
Notes receivable-trade
Accounts receivabletrade
Total

-

-

(Thousands of yen)Over ten years-

5,647,008---

33,221,610

-

-

-

Due within one year
27,191,189
383,412One 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 i nputs 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.
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)(Thousands of yen)
Item

Fair value
Level 1

Level 2

Level 3

Total

Marketable securities andinvestment securities
Available-for-salesecurities
Shares2,725,192--

2,725,192

Assets total

2,725,192--

2,725,192(2) Financial instruments other than those recorded in the consolidated balance sheet at fair value
FY2021 (As of Mar. 31, 2022)(Thousands of yen)
Item

Fair value
Level 1

Level 2

Level 3Marketable securities andinvestment securities
Available-for-salesecurities
Bond investment trusts
6,698,830
Shares of subsidiaries and4,795,312
associates
Assets total
4,795,312
6,698,830
Note: Explanation of the evaluation method and inputs used for calculating fair values

Total

-

6,698,830-

4,795,312-

11,494,142

Securities and investment securities
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.

19

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2022

Marketable Securities
1. Available-for-sale securities
FY2020 (As of Mar. 31, 2021)
Type
Securities with book value that 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.
FY2021 (As of Mar. 31, 2022)
Type
Securities with book value that exceeds
acquisition cost(1) SharesBook value(Thousands of yen)
Unrealized gains (losses)

Acquisition cost

2,244,850

92,9072,151,942(2) Bonds---(3) Others

-

-

-

Sub-total

2,244,850

92,9072,151,942

Securities with book value not exceedingacquisition cost(1) Shares

480,342499,999(19,657)(2) Bonds---(3) Others

6,700,000

6,700,000-

Sub-total

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.
2. Available-for-sale securities soldFY2020 (Apr. 1, 2020 – Mar. 31, 2021)(Thousands of yen)Type

Sales amount

Aggregate gains

Aggregate losses(1) Shares

0

-

3,499

(2) Bonds---(3) Others

-

-

-

0

-

3,499

Total

20

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2022

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

Sales amount

Aggregate gains

Aggregate losses(1) Shares

5,808,953

5,808,953-(2) Bonds

-

-

-

-

-

-

5,808,953

5,808,953-(3) Others
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 statemen t of income.
Intersegment sales or transfers are based on market price.
3. Information about net sales, profit or loss, segment assets, and other material it ems for each reportable segment
FY2020 (Apr. 1, 2020 – Mar. 31, 2021)(Thousands of yen)
Reportable segment

Net sales
Sales to third parties
Intersegment sales or transfers
Total

Total

Adjustment
amount(Note 1)

Appropriated amountin the consolidated
financial statements(Note 2)Japan

EuropeAmericasAsia

21,108,651
1,002,620

4,497,330
934,976

1,958,050
50,2301,255,232
108,072

28,819,265
2,095,900(2,095,900)

28,819,265
28,819,265

22,111,272

5,432,307

2,008,280

1,363,304

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

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

Other items
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
Increase in property, plant and525,762
79,2998,226
2,593
615,881615,881equipment and intangible assets
Notes: 1. Contents of adjustments are as follows.
(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.

21

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2022

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

Appropriated amountin the consolidated
financial statements(Note 2)Japan

EuropeAmericas

Asia

Net sales
Solutions
Client services

13,796,557
8,636,541

2,772,256
2,628,635

1,219,996
1,026,823

567,263854,192

18,356,073
13,146,192-

18,356,073
13,146,192

Sales to third parties
Intersegment sales or transfers

22,433,098
1,178,165

5,400,892
963,524

2,246,819
66,643

1,421,455
113,482

31,502,266
2,321,816(2,321,816)

31,502,266
31,502,266

Total

Total

Adjustment
amount(Note 1)

23,611,264

6,364,416

2,313,463

1,534,938

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

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

Other items
Depreciation
563,200
96,64010,06136,198706,100
706,100
Amortization of goodwill
130,998
48,971
179,970
179,970
Investment in companies
2,002,416
2,002,416
2,002,416
accounted for using equity method
Increase in property, plant and633,751
59,795
14,6603,322
711,529
711,529
equipment and intangible assets
Notes: 1. Contents of adjustments are as follows.
(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.

Per-share Information(Yen)
FY2021(Apr. 1, 2021 – Mar. 31, 2022)

FY2020(Apr. 1, 2020 – Mar. 31, 2021)
Net assets per share

1,656.21

1,644.76

Net income per share
91.92
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.
FY2020(Apr. 1, 2020 – Mar. 31, 2021)

129.16FY2021(Apr. 1, 2021 – Mar. 31, 2022)

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.

22

2,137,173

3,002,866--

2,137,173

3,002,866

23,249,298

23,248,912

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2022

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

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
FY2020(Apr. 1, 2020 – Mar. 31, 2021)
Segment
Orders received
Order backlog
Japan
22,358,992
8,913,096
Europe4,663,535
2,015,861
Americas1,861,370
1,339,921
Asia
1,328,205
534,471
Total
30,212,102
12,803,350
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

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(b) Orders received and order backlog(Thousands of yen)
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(Thousands of yen)
FY2021(Apr. 1, 2021 – Mar. 31, 2022)
Orders received
Order backlog
24,076,563
10,556,561
5,853,810
2,598,141
2,440,821
1,693,588
1,391,398
525,607
33,762,594
15,373,898(Thousands of yen)
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(Thousands of yen)
FY2020
FY2021(Apr. 1, 2020 – Mar. 31, 2021)(Apr. 1, 2021 – Mar. 31, 2022)
Product category
Orders received
Order backlog
Orders received
Order backlog
Printed Circuit Board design solutions
4,249,753
835,729
4,335,436
941,949
Circuit design solutions
6,247,186
1,430,141
6,913,672
1,514,492
IT solutions
7,242,890
1,190,389
7,775,450
1,790,392
Client services
12,465,606
9,346,289
14,728,184
11,126,676
Others
6,666
800
9,850
387
Total
30,212,102
12,803,350
33,762,594
15,373,898
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

23

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2022

5. Non-consolidated Financial Statements(1) Balance Sheet(Thousands of yen)
FY2021(As of Mar. 31, 2022)

FY2020(As of Mar. 31, 2021)
AssetsCurrent assets
Cash and deposits

12,429,694

17,556,664

291,515

238,093

Accounts receivable-trade

2,747,885

2,410,582

Securities

6,700,000

6,700,000

50,34972,283

66,426-

291,880

322,165

22,577,751

27,299,790

Buildings

2,637,829

2,584,349

Structures

28,577

26,417

Vehicles

6,845

15,797

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

107,813118,2363,009,559

3,009,559

6,725

2,822

5,797,350

5,757,181

Other

308,780

374,977

Total intangible assets

308,780

374,977

Investment securities

9,114,007

3,114,992

Shares of subsidiaries and associates

2,156,823

3,639,220

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

1,035,847

110,664

244,730

816,869

942,367-

538,409357,850

372,335

Total property, plant and equipment
Intangible assets

Investments and other assets

Other
Allowance for doubtful accounts(14,902)(259,975)

Total investments and other assets

14,970,541

9,627,927

21,076,671

15,760,086

43,654,422

43,059,876

Total non-current assets
Total assets

24

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2022

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

FY2020(As of Mar. 31, 2021)
Liabilities
Current liabilities
Accounts payable-trade396,457

Accounts payable-other729,174

746,393

Income taxes payable

237,275

2,210,528

Advances received

943,535

910,863

Provision for bonuses

365,076359,961

426,017

Provision for bonuses for directors (and other officers)

78,00080,000Other

199,285

193,9112,948,803

4,927,676

898,378-

2,483,326

2,563,172-

21,00096,85096,85018,255

16,7293,496,810

2,697,752

6,445,614

7,625,428

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

11,025,000

12,525,000

Retained earnings brought forward

2,605,601

2,363,020

13,941,684

15,199,103(17,734)(19,279)

32,698,768

33,954,641

Valuation difference on available-for-sale securities

4,510,039

1,479,806

Total valuation and translation adjustments

4,510,039

1,479,806

37,208,808

35,434,448

43,654,422

43,059,876

Total current liabilities
Non-current liabilities
Deferred tax 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

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

Total net assets
Total liabilities and net assets

25

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2022

(2) Statement of Income
FY2020(Apr. 1, 2020 – Mar. 31, 2021)(Thousands of yen)
FY2021(Apr. 1, 2021 – Mar. 31, 2022)

Net sales

11,135,371

11,289,628

Cost of sales

2,699,842

2,699,501

Gross profit

8,435,528

8,590,127

Selling, general and administrative expenses

7,093,182

7,074,477

Operating profit

1,342,346

1,515,650

2,262

1,035

Non-operating income
Interest income
Dividend income

1,079,490

1,133,073

Foreign exchange gains

123,199

99,735

Rental income

135,490

139,307

Other
Total non-operating income

99,44386,753

1,439,886

1,459,905

118,150

120,262

1,366

2,114

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

119,517

122,376

2,662,715

2,853,178

Extraordinary income
Gain on sale of non-current assets

542

544

-

5,808,953

542

5,809,498

Loss on disposal of non-current assets
Loss on valuation of investments in capital ofsubsidiaries and associates
Loss on valuation of shares of subsidiaries and associates
Provision of allowance for doubtful accounts for
subsidiaries and associates
Provision for loss on business of subsidiaries andassociates

998

15,081-

3,669,127-

492,810-245,072-

21,000Total extraordinary losses

998

4,443,092

2,662,259

4,219,584

Income taxes-current

370,467

2,331,247

Income taxes-deferred

54,866(97,359)

Total income taxes

425,333

2,233,888

2,236,925

1,985,696

Gain on sales of investment securities
Total extraordinary income
Extraordinary losses

Profit before income taxes

Profit26

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2022

(3) Statement of Changes in Equity
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 capitalsurplus8,657,753

8,657,753

Legalretainedearnings
311,082

Generalreserve

Retainedearnings
brought
forwardTotal
retainedearnings

9,525,000

2,566,158

12,402,241

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

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

Profit2,236,925

2,236,925

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

Shareholders’ equity

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

Total
shareholders’equity31,160,281

1,500,000

39,443

1,539,443

311,082 11,025,000-

2,605,601

13,941,684

Valuation and translation
adjustments
Valuation
Total valuationdifference onand translation
available-for-saleadjustments
securities
2,266,875

2,266,875

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(955)

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

2,243,164

2,243,164

2,243,164(955)

1,538,487

2,243,164

2,243,164

3,781,652(17,734)

32,698,768

4,510,039

4,510,039

37,208,808

27

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2022

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

10,117,065

Legalcapitalsurplus

Total capitalsurplus8,657,753

8,657,753

Legalretainedearnings

Retainedearnings
brought
forwardTotal
retainedearnings

2,605,601

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

Cumulative effects ofchanges in accounting
policies
Restated balance

10,117,065

8,657,753

8,657,753

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

Shareholders’ equity

Treasury shares
Balance at beginning of period(17,734)

Cumulative effects ofchanges in accounting
policies
Restated balance

Totalshareholders’equity32,698,768-

Valuation and translation
adjustments
Valuation
Total valuationdifference onand translation
available-for-saleadjustments
securities
4,510,039

4,510,039(7,557)(17,734)

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(1,545)(720,720)(720,720)

1,985,696

1,985,696(1,545)(1,545)

Net changes other thanshareholders’ equity(3,030,233)(3,030,233)(3,030,233)

Total changes during period(1,545)

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

Balance at end of period(19,279)

33,954,641

1,479,806

1,479,806

35,434,448

28

ZUKEN Inc. (6947) Financial Results for the Fiscal Year Ended March 31, 2022

6. Others(1) Change in Representative Director
Not applicable.
(2) Changes in Other Board Members (Scheduled for June 29, 2022)
Following the introduction of the Executive Officer System, the Company plans to make the following changes inpositions of other Board Members.
Name
Kazuhiro Kariya
Yasuo Ueno

Takeo Osawa

Koichi Saotome

Hiroyuki Fujiwara

New position
Senior Managing Executive Officer,
General Manager of R&D Division
Senior Managing Executive Officer,
General Manager of Business
Division
Executive Officer,
General Manager of A&M Business
Unit, Business Division
Executive Officer,
Office Manager of Europe R&D
Management Office
Executive Officer,
General Manager of EDA Business
Unit, Business Division

Current position
Senior Managing Director,
General Manager of R&D Division
Senior Managing Director,
General Manager of Business
Division
Director,
General Manager of A&M Business
Unit, Business Division
Director,
Office Manager of Europe R&D
Management OfficeDirector,
General Manager of EDA Business
Unit, Business DivisionThis 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.

29