ANNUAL REPORT 2022

Year ended March 31, 2022

ANNUAL REPORT 2022
ProfileShibaura Mechatronics was established in 1939 as Shibaura Engineering Works Co., Ltd. Initially, our primary focus was on
the motor business, but in 1998 we struck out in a new direction, and reestablished ourselves as a producer of manufacturing
equipment for flat panel displays (FPDs) and semiconductors. We also took on a new name, Shibaura Mechatronics Corporation.
By combining core technologies, cultivated over many years, in precision mechatronics, cleaning, bonding, etching, vacuum
processing and sputtering, we can offer solutions for manufacturing equipment that includes semiconductors, flat panel displays
and electronic components, extending from development and design through to installation and service.

History
1932
Tokyo Electric Company

1939

1949

1991 1996

Oct.,1998

Tokyo Shibaura Electric Co., Ltd. (now, Toshiba Corporation)

Shibaura Engineering Works Co., Ltd.

(Industrial Mechatronics Business)

Toshiba Automation Co., Ltd.

Manufacturing automation equipment

Shibaura Engineering Works Co., Ltd.
Electric motors

Tokuda Seisakusho Co., Ltd.
Vacuum equipment

Toshiba Mechatronics Co., Ltd.

Manufacturing equipment for FPDs,
semiconductors and others

Shibaura Engineering Works Co., Ltd.
Motors, manufacturing equipment for
FPDs and semiconductors, and others

Contents
Financial Highlights・ ・・・・・・・・・・・・・・ 01

To Our Shareholders・・・・・・・・・・・・・・・ 02

Financial Review・・・・・・・・・・・・・・・・・ 03

Forward-Looking Statements
This annual report contains forward-looking statements concerning Shibaura
Mechatronics' future plans, strategies and performance. These forward-looking
statements are not historical facts, rather they represent assumptions and beliefs

Financial Section・・・・・・・・・・・・・・・・・ 05

based on data currently available. Furthermore, they are subject to a numberof risks and uncertainties that, relate to economic conditions, worldwide
megacompetition in the electronics business, customer demand, foreign
currency exchange rates, tax rules, regulations and other factors. Shibaura

Directors, Vice Presidents and Auditors・・・・・ 62

Investor Information・・・・・・・・・・・・・・・ 63

therefore wishes to caution readers that actual results may differ materially fromour expectations.

Financial Highlights
Year ended
March 31,2022

Year ended March 31,
2022

2021

2020

2019

2018

(Thousands of
U.S. dollars)(Note 1)

(Millions of yen)

Consolidated￥ 49,272		 ￥ 44,794		 ￥ 47,141		 ￥ 53,090		 ￥ 49,257
Orders received		 70,880
41,969 		 46,632 		 51,021 		 53,355

			 579,132

Operating income 		

5,050 		 2,957 		 3,123 		 4,000 		 2,498

			41,269Net income 		

2,983 		 1,970 		 1,944 		 2,481 		 1,747

			

24,375

Depreciation and amortization		

1,892		

1,667		

1,389		

1,556		

1,406

			

15,460Capital expenditures		

2,229		

1,242		

2,231		

1,717		

1,126

			

18,215R&D expenses		

2,637		

2,494		

2,729		

2,743		

2,492

			

21,545

Total assets		 68,854		

58,294		

57,421		

61,967		

59,939			 562,582

Net assets		 24,614		

21,855		

19,720		

18,369		

16,129			 201,114$ 402,589

Net sales

Net income per share(yen)(U.S. dollars)￥ 675.41 		 ￥ 446.18		 ￥ 440.73		 ￥ 562.90		 ￥ 365.82

		 $ 5.52

Number of employees		

1,204		

1,224		

1,260		

1,221		

		

1,207

1,204

Note 1 : The U.S. dollar amounts in this report represent translations of Japanese yen, for convenience only, at the rate of ￥122.39 = U.S.$1.00, as of March 31, 2022.
Note 2 : With an effective date of October 1, 2018, the Company conducted a stock consolidation at a ratio of one share for every 10 shares of common stock.
Net income per share is calculated on the assumption that the share consolidation took place in April 2017.

Net Sales(¥Billions)

Orders Received(¥Billions)Operating Income(¥Billions)

Net Income(¥Billions)

70.9

49.3

53.1

47.1

49.3

53.4

51.0

44.8

5.1
46.6

42.0

4.0
3.1

3.0

3.0

2.5

2.5
1.7

'18

'19

'20

'21

'22

'18

'19

'20

'21

'22

'18

'19

'20

'21

'22

'18

'19

1.9

2.0

'20

'21

'22

SHIBAURA MECHATRONICS CORPORATION
Annual Report 202201

To Our Shareholders

Cutting-edge technologies and solutions from our understanding of
manufacturing equipment contribute to our customers’ value creation.
In the business environment in which Shibaura Mechatronics
Group operated in fiscal year 2021, the semiconductor
industry continued to see strong demand from IoT, 5G, AI andother areas, and from continuing capital investments in logic
and foundries, memories, power devices, and wafers. In the
FPD industry, some customers have made moves to resume
investment plans. However, instability in parts and parts supply
remains a concern.
In these circumstances, fiscal year 2021 business results wereas follows.
Sales against the previous fiscal year saw an increase in thesemiconductor business, along with a decrease in the FPD
business, and rose to 49,272 million yen.
In terms of profit, operating income was 5,050 million yen, an
increase from the previous fiscal year that reflects higher sales
in the semiconductor business and an improved profit margin.
Net income attributable to owners of the parent company
recorded a year-on-year increase to 2,983 million yen, eventhough we posted an extraordinary loss of 613 million yen in
the first quarter for the demolition of an aging building, part of
the redevelopment of our Yokohama Operations.
O r d e r s r e c e i v e d w e r e s t r o n g, a s c u s t o m e r s i n t h esemiconductor industry committed to investments in both frontend and back-end processes, and were particularly buoyant
in the third quarter. In the FPD industry, demand for the front-

02

SHIBAURA MECHATRONICS CORPORATION
Annual Report 2022

end process was subdued, but more favorable in the back-end
process. As a result, orders received in fiscal year 2021 were up
against the previous year, at 70,880 million yen.
While there are concerns that fiscal year 2022 will see further
instability in the supply of parts and components, we anticipate
continued strong demand from the semiconductor industry inrespect of IoT, 5G, AI, etc., and capital investment is expected
to remain favorable for logic and foundries, memories, powerdevices and wafers. We also expect to see solid investment in
the FPD industry, primarily for monitors and in-vehicle use.
In this age of IoT, 5G, AI and ever-expanding data growth, wewill continue to contribute to our customers’ value creation with
cutting-edge technologies and solutions for semiconductor and
FPD manufacturing equipment, from design and development
through to service.

Keigo Imamura
Representative Director
President and Chief Executive Officer

Financial Review
Results Summary

on-year increase of 158.1%, and orders received was

In FY2021 Shibaura Mechatronics recorded net sales of 49,272

Sales in the semiconductor back-end process weremillion yen (a year-on-year increase of 10.0%), operating

sustained by continued investment, and equipment forincome of 5,050 million yen (a year-on-year increase ofadvanced packages, FO-PLP, display driver ICs, and other

70.8%), ordinary income of 4,877 million yen (a year-on-year

equipment, all performed well, generating a significant

increase of 73.0%), net income of 2,983 million yen (a year-on-

increase over the previous fiscal year. Although sales fromyear increase of 51.5%), and orders received of 70,880 million

equipment for large panels and for small- and medium-yen (a year-on-year increase of 68.9%).

sized panels were healthy, they were lower than in the

The results for each business segment were as follows:

year-earlier period, the impact of some customers pushing

18,454 million yen, a year-on-year increase of 103.1%.

back their investment plans. In vacuum equipment, sales

1. Fine Mechatronics Segment
Net sales were 31,402 million yen, a year-on-year

for electronic components were firm. In the final result,sales for the segment as a whole were higher than in theincrease of 5.9%, segment income was 2,977 million yen,previous fiscal year.

a year-on-year increase of 49.4%, and orders received was

Segment income increased significantly due to an increase

47,907 million yen, a year-on-year increase of 64.3%.

in sales of equipment for semiconductor back-end

Sales of equipment for the semiconductor front-end

processes, and an improved profit margin.

process increased year-on-year, on steady sales ofOrders received were strong due to continued orders

equipment for logic and foundries, power devices, and Si

for equipment for advanced packages and equipment

wafer cleaning. At the same time, equipment for the FPD

for FO-PLP in the semiconductor back-end process. The

front-end process saw a decrease, the result of sluggish

FPD back-end process also performed steadily, centeredorders since the previous fiscal year. Overall segment sales

on equipment for large panels, and orders for medium-recorded an increase over the previous fiscal year.

sized panels increased for in-vehicle applications. In

Segment income increased, a result that reflectedvacuum equipment, orders for equipment for electronic

increased sales in equipment for the semiconductor front-components increased. As a result, overall segment orders

end process, and a decrease in sales of equipment for thereceived where higher than in the previous fiscal year.

FPD front-end process.
A strong performance in orders received in thesemiconductor front-end process centered on Si wafer

3. Vending Machines and Systems Segment
Although there was a gradual recovery from the impacts

cleaning equipment and equipment for power devices,of the COVID-19 pandemic, and orders were strong, partsand particularly exceeded expectations in the third quarter,

shortages caused prolonged lead times. In the final result,as customers committed to strong investments. Orders fornet sales were 2,186 million yen (up 11.9% year-on-year)

the FPD front-end process remained at a low level, both inand segment income was 53 million yen (up 537.4% year-

equipment for large panels and for small- and medium-on-year).

sized panels. We did receive a good number of orders for
inkjet tablet printing equipment in the healthcare field. As
a result, the segment as a whole recorded a year-on-yearincrease.

4. Real Estate Leasing Segment
Rental income from real estate was largely in line withplans, with net sales of 1,881 million yen, a 1.5% decreaseyear-on-year, and segment income of 529 million yen, a

2. Mechatronics Systems Segment
Net sales were 13,803 million yen, a year-on-year increase

7.2% decrease year-on-year.

of 22.3%, segment income was 2,045 million yen, a year-

SHIBAURA MECHATRONICS CORPORATION
Annual Report 2022

03

Financial Review

Research and Development Expenditure

In ticket vending machines, we have promoted the

The Shibaura Mechatronics Group as a whole recorded

support cash and cashless payments.

development of expanded model configurations that

research and development costs of 2,637 million yen, including
development costs of 549 million yen for basic technologies that
could not be appropriated to any specific segment.

Financial Condition

R&D is advanced by the development and design departments

Total assets at the end of the current fiscal year showed ain business divisions, the Research and Development Division,

year-on-year rise of 10,559 million yen, to 68,854 million

and by the technology divisions in our consolidated subsidiaryyen. This was mainly due to an increase of 6,715 million

companies. In addition, we are pushing forward efficient research

yen in cash and deposits and 2,396 million yen in notes

and development and the commercialization of advanced

receivable, accounts receivable and contract assets.

technologies by strengthening our relations and collaborations

Liabilities showed a year-on-year rise of 7,800 million yen,with Toshiba Group and business partners.

to 44,210 million yen. This was mainly due to an increase in

Research and development expenses and research results fornotes payable, accounts payable and electronically recorded

each segment are as follows:

debt of 3,576 million yen, and advance payments of 3,179
million yen.

1. Fine Mechatronics Segment
R&D expenses for the segment totaled 1,133 million yen.

Net assets increased by 2,759 million yen to 24,614 million
yen. This was mainly due to an increase of 2,983 million yen,

In semiconductor equipment we continued to work on

the result of recording net income attributable to owners ofthe development of wet cleaning equipment for next

parent company.

generation devices, single-wafer nitride-film wet-etchingequipment, single Si wafer cleaning equipment, wetcleaning equipment for masks, and dry-etching equipment

Cash Flowsfor masks.

The balance of cash and cash equivalents (hereinafter referred

In flat panel manufacturing equipment, we have developed

to as “cash”) at the end of the period was 26,301 million yen,a wet process equipment for high-definition small- anda year-on-year increase of 6,715 million yen.

medium-sized panels, and a high-vacuum clean oven for

Net cash from operating activities increased by 8,297 million

flexible OLED.

yen (following an increase of 7,669 million yen in the previous
fiscal year). This was mainly due to an increase in funds from

2. Mechatronics Systems Segment
R&D expenses for the segment totaled 769million yen.

recording income before income taxes, and increases in trade
payables and advance payments.

In semiconductor assembly equipment, we developed

Cash from investment activities decreased by 507 million yen

high-speed, high-accuracy bonding equipment for FO-(following a decrease of 258 million yen in the previous fiscal

WLP / PLP, 2.5D package, and μLED.

year). This was mainly due to a decrease in cash following the

In liquid crystal and OLED module assembly equipment,

acquisition of fixed assets.

we worked on the development of OLB equipment for

Free cash flow, the aggregate of cash flow from operations

small- and medium-sized panels, and for large-sized high-and cash flow from investment activities, increased by 7,790

definition panels.

million yen (following an increase of 7,411 million yen in the

In vacuum equipment, we are working on the development

previous fiscal year).

of sputtering equipment for electronic components.

Cash from financing activities decreased by 1,205 million yen(following a decrease of 553 million yen in the previous fiscal

3. Vending Machines and Systems Segment
R&D expenses for the segment totaled 184million yen.

04

SHIBAURA MECHATRONICS CORPORATION
Annual Report 2022year). This was mainly due to a decrease in funds as a resultof repaying short-term loans, and the payment of dividends.

FINANCIAL SECTION
Annual Report 2022 Year ended March 31, 2022

SHIBAURA MECHATRONICS CORPORATION
Annual Report 2022

05

Financial Section

Contents
Consolidated Balance Sheet・ ・・・・・・・・・・・・・ 07
Consolidated Statement of Operations・ ・・・・・・・・ 09

Consolidated Statement of Comprehensive Income・・・・ 10
Consolidated Statement of Changes in Net Assets・ ・・・ 11
Consolidated Statement of Cash Flows・ ・・・・・・・・ 12
Notes to Consolidated Financial Statements・ ・・・・・・ 13
Independent Auditor's Report ・ ・・・・・・・・・・・・ 55

06

SHIBAURA MECHATRONICS CORPORATION
Annual Report 2022

Financial Section

Shibaura Mechatronics Corporation and Subsidiaries
Consolidated Balance Sheet
March 31,2022
2021(Millions of yen)March 31,
2022
(Thousands of
U.S. dollars)(Note 1)

AssetsCurrent assets:
Cash and bank deposits (Note 22)
Notes and accounts receivable, trade (Note 18)
Notes receivable, trade (Note 18)
Accounts receivable, trade (Note 18)
Contract assets
Electronically recorded monetary claims (Note 18)
Allowance for doubtful accounts
Inventories (Note 9)
Accounts receivable, other
Other current assets
Total current assets¥26,316
255
5,972
18,708718(1,522)
3,573
1,846
335
56,201¥19,601
22,538602(1,440)
2,792
1,514
238
45,845215,020
2,082
48,795
152,857
5,866(12,435)
29,19515,0802,743
459,203

Property, plant and equipment:
Land (Note 19)
Buildings and structures (Note 19)
Machinery and equipment
Leased assets
Construction in progress
Total
Accumulated depreciation
Property, plant and equipment, net

120
28,1807,640
97
957
36,994(26,159)
10,835

120
29,5376,847
93
541
37,138(26,377)
10,761

980
230,252
62,425794
7,819
302,270(213,738)
88,532

Investments and other assets:
Investments in securities (Note 8)
Deferred tax assets (Note 12)
Other assets
Allowance for doubtful accounts
Total investments and other assets

53
935
834
(4)
1,818

91
715
887
(5)
1,688

431
7,636
6,817
(37)
14,847¥ 68,854¥ 58,294$ 562,582

Total assets

7

SHIBAURA MECHATRONICS CORPORATION
Annual Report 202207

Financial Section

March 31,2021
2022
(Millions of yen)
Liabilities and net assets
Current liabilities:
Notes and accounts payable, trade (Note 18)
Electronically recorded obligations (Note 18)
Short-term bank loans (Notes 10 and 18)
Current portion of long-term debt (Notes 10and 18)
Current portion of lease obligations (Note 10)
Advances received
Accrued expenses
Accrued income taxes (Note 12)
Provision for loss on order received (Note 9)
Provision for product warranties
Provision for directors' bonuses
Other current liabilities
Total current liabilities
Long-term liabilities:
Long-term debt (Notes 10 and 18)
Net defined benefit liability (Note 15)
Lease obligations (Note 10)Long-term accounts payable-other
Provision for directors’ retirement benefits
Reserve for repair and maintenance
Asset retirement obligations
Long-term guarantee deposits (Note 18)
Total long-term liabilities
Total liabilities

March 31,
2022
(Thousands of
U.S. dollars)(Note 1)

¥11,240
3,021
4,350
800
17
3,852
3,088
1,250
8
120
63
1,298
29,107¥10,684
5,050
17
672
2,749
533
38
550
20,293

91,84024,67935,542
6,536
140
31,47625,23010,211
67983
514
10,602
237,820

5,000
6,620
34
24
310
67
3,078
15,13344,240

5,800
6,792
48
2
23
311
92
3,078
16,14636,43940,85354,089
278
199
2,528
551
25,150123,648
361,468

6,762
9,038
12,695(4,007)24,4886,762
9,038
10,199(4,014)21,98555,24573,843
103,732(32,739)200,081

423
(297)
126
24,614¥ 68,854

16
279
(425)
(130)
21,855¥ 58,294

3,463(2,430)1,033
201,114$ 562,582

Contingent liabilities (Note 16)
Net assets:
Shareholders’ equity:
Capital stock:
Authorized: 10,000,000 shares
Issued: 5,192,619 shares at March 31, 2022 and2021
Capital surplus
Retained earnings
Less treasury stock, at cost
Total shareholders’ equity
Valuation and translation adjustments:
Valuation difference on available-for-sale securities
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Total valuation and translation adjustments
Total net assets
Total liabilities and net assets

The accompanying notes are an integral part of the consolidated financial statements.

08

SHIBAURA MECHATRONICS CORPORATION
Annual Report 2022

8

Financial Section

Shibaura Mechatronics Corporation and Subsidiaries
Consolidated Statement of Operations
Years ended March 31,
2022
2021
(Millions of yen)

Net sales (Note 20)
Cost of sales (Notes 9,11 and 19)
Gross profit
Selling, general and administrative expenses(Notes 11,15 and 24)
Operating income
Other income (expenses):
Interest and dividend income
Gain on sales of investment securities
Gain on sales of property, plant andequipment
Foreign exchange gain,net
Interest expense
Commission fee
Foreign exchange loss, net(Loss) Gain on valuation of derivatives
Other, net
Ordinary income
Extraordinary losses
Business structure improvement
expenses(Note 25)
Income before income taxes
Income taxes (Note 12):Current
Deferred
Net income
Net income attributable to owners of parent

Year ended
March 31,
2022
(Thousands of
U.S. dollars)(Note 1)

¥ 49,272
32,465
16,807¥ 44,794
31,10013,694$ 402,589
265,259
137,330

11,757

10,737

96,061

5,050

2,957

41,269

5
18

7
-

42
144

180
(90)
(28)
(190)
(68)
4,877

18
(94)
(28)
(19)
25
(46)
2,820

1,476
(736)
(232)
(1,557)(554)
39,852(613)-(5,010)

4,264

2,820

34,842

1,503
(222)
1,281
2,983

793
57
850
1,970

12,285(1,818)
10,467
24,375¥ 2,983¥ 1,970$ 24,375

The accompanying notes are an integral part of the consolidated financial statements.

9

SHIBAURA MECHATRONICS CORPORATION
Annual Report 202209

Financial Section

Shibaura Mechatronics Corporation and Subsidiaries
Consolidated Statement of Comprehensive Income

Years ended March 31,
2022
2021
(Millions of yen)

Net income
Other comprehensive income: (Note 13)
Valuation difference on available-for-salesecurities
Remeasurements of defined benefit plans
Foreign currency translation adjustments
Total other comprehensive income
Comprehensive income(Breakdown)Comprehensive income attributable to ownersof parent

Year ended
March 31,
2022
(Thousands of
U.S. dollars)(Note 1)

¥ 2,983¥ 1,970$ 24,375

(16)
128
144
256
¥ 3,239

11
613
19
643
¥ 2,613

(127)
1,039
1,179
2,091
$ 26,466

3,239

2,613

26,466

The accompanying notes are an integral part of the consolidated financial statements.

10

SHIBAURA MECHATRONICS CORPORATION
Annual Report 2022

10

Financial Section

Shibaura Mechatronics Corporation and Subsidiaries
Consolidated Statement of Changes in Net Assets
Shareholders’ equity

Valuation and translation adjustments
Valuation
Remeasurdifference
Foreign
ements ofoncurrency
definedavailabletranslation
benefitfor-saleadjustments
plans
securities

Number ofshares ofcommonstock

Commonstock

Additional
paid-in
capital51,926,194¥ 6,762¥ 9,038

¥ 5

¥ 260

¥ (1,038)¥ 19,720

Net income

–

–

–

1,970

–

–

–

–

1,970

Dividends of surplus (Note 14)

–

–

–

(487)

–

–

–

–

(487)

Purchase of treasury shares

–

–

–

–

(0)

–

–

–

(0)

Disposal of treasury shares

–

–

—

–

9

–

–

–

9

Net change during the year

–

–

–

–

–

11

19

613

643

Balance as of April 1, 2021

51,926,194¥ 6,762¥ 9,038¥ 10,199¥ (4,014)

¥ 16

¥ 279

¥ (425)¥ 21,855

Balance as of April 1, 2020

Retainedearnings

Treasurystock(Millions of yen)
¥ 8,716¥ (4,023)

Total net
assets

Net income

–

–

–

2,983

–

–

–

–

2,983

Dividends of surplus (Note 14)

–

–

–

(487)

–

–

–

–

(487)

Purchase of treasury shares

–

–

–

–

(0)

–

–

–

(0)

Disposal of treasury shares

–

–

–

–

7

–

–

–

7

Net change during the year
Balance as of March 31, 2022

–

–

–

–

–

(16)

144

128

256

51,926,194¥ 6,762¥ 9,038¥ 12,695¥ (4,007)

–

¥ 423

¥ (297)¥ 24,614$ 127$ 2,284$ (3,469)$ 178,569(Thousands of U.S. dollars) (Note 1)
Balance as of April 1, 2021

$55,245$ 73,843$ 83,334$(32,795)

Net income––

24,375––––24,375

Dividends of surplus (Note 14)––(3,977)

–

–

–

–

(3,977)Purchase of treasury shares

–

–

–

(8)

–

–

–

(8)

Disposal of treasury shares

–

–

–

64

–

–

–

64

Net change during the year

–

–

–

–

(127)

1,179

1,039

2,091

$ 55,245$73,843$ 103,732$ (32,739)–$ 3,463$ (2,430)$ 201,114

Balance as of March 31, 2022

The accompanying notes are an integral part of the consolidated financial statements.

11

SHIBAURA MECHATRONICS CORPORATION
Annual Report 2022

11

Financial Section

Shibaura Mechatronics Corporation and Subsidiaries
Consolidated Statement of Cash Flows
Year ended March 31,
2022
2021
(Millions of yen)

Net cash provided by Operating activities
Income before income taxes and non-controlling interest
Depreciation and amortization
Increase in allowance for doubtful accounts
Decrease in net defined benefit liability
Interest and dividend income
Interest expense
Gain on sales of investment securities
Foreign exchange losses
Increase in advances received(Increase) decrease in notes and accounts receivable-trade
Increase in inventories
Increase(decrease) in notes and accounts payable-trade
Business restructuring expenses
Increase (decrease) in accrued consumption taxes
Other, net
SubtotalInterest and dividends received
Interest paid
Income taxes paid
Net cash provided by operating activities

Year ended
March 31,
2022
(Thousands of
U.S. dollars)(Note 1)

¥ 4,264
1,892
79
(45)
(5)
90
(17)
29
3,171
(2,445）(2,378)
4,026
613
(31)
(108)
9,135
5
(90)
(753)
8,297

¥ 2,820
1,667
367
(46)
(7)
94
1
191
4,679
(915)
(1,116)
27
374
8,136
7
(94)
(380)
7,669

$ 34,842
15,460
649
(369)
(42)
736
(143)
241
25,914(19,979)(19,434)
32,896
5,010
(256)
(886)
74,63942(735)(6,147)
67,799Net cash used in Investment activities
Payments into time deposits
Proceeds from sales of investment securities
Purchases of property, plant and equipment
Other, net
Net cash used in investment activities

(0)
40
(405)
(142)
（507）

(0)
(134)
(124)
（258）

(0)
327
(3,310)(1,166)(4,149)Net cash used in Financing activities
Net decrease in short-term loans payable
Repayments of finance lease obligations
Proceeds from long-term loans payable
Repayments of long-term loans payable
Purchases of treasury stock
Cash dividends paid
Net cash used in financing activities

(700)
(18)
(0)
(487)
(1,205)

(50)
(17)
1,200
(1,200)
(0)
(486)
(553)

(5,719)(142)(8)(3,977)(9,846)130
6,715
19,586¥ 26,301

18
6,876
12,709¥ 19,586

1,065
54,869160,029$ 214,898

Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year (Note 22)

The accompanying notes are an integral part of the consolidated financial statements.

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Financial Section

Shibaura Mechatronics Corporation and Subsidiaries
Notes to Consolidated Financial Statements
March 31, 2022
1.

Basis of Presentation

Shibaura Mechatronics Corporation (the “Company”) and its consolidated subsidiaries(collectively, the “Companies” or the “Group”) maintain their accounting records and prepare
their financial statements in accordance with accounting principles generally accepted inJapan. The accompanying consolidated financial statements have been prepared inaccordance with accounting principles generally accepted in Japan, which differ in certain
respects from the application and disclosure requirements of International Financial
Reporting Standards, and have been compiled from the consolidated financial statements
prepared by the Company as required by the Financial Instruments and Exchange Act ofJapan.
The accompanying consolidated financial statements are stated in yen, the currency of thecountry in which the Company is incorporated and operates. The translation of yen amounts
into U.S. dollar amounts has been included solely for the convenience of readers outside
Japan. The translation has been made at the rate of ¥ 122.39 = U.S. $ 1.00, the approximate
rate of exchange in effect on March 31, 2022. This translation should not be construed as arepresentation that yen could be converted into U.S. dollars at the above or any other rate.

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Financial Section

2.

Summary of Significant Items for the Presentation of Consolidated Financial
Statements(1) Basis of consolidation
The accompanying consolidated financial statements include the accounts of Shibaura
Mechatronics Corporation and eight subsidiaries over which the Company exerts
substantial control, either through majority ownership of voting stock and / or by othermeans. All assets and liabilities of the subsidiaries are revalued at fair value uponacquisition, if applicable. All significant intercompany balances and transactions havebeen eliminated in consolidation.
Investment in an unconsolidated subsidiary that is not deemed material to theconsolidated financial statements is stated at cost.
Certain subsidiaries have a fiscal year end which differs from that of the Company. As
a result, adjustments have been made for any significant transactions which took place
during the intervening period between the year end of the subsidiaries and that of theCompany.
(2) Foreign currency translation
The revenue and expense accounts of the overseas consolidated subsidiaries aretranslated into Japanese yen at the average rate of exchange in effect during each fiscal
year. The balance sheet accounts, except for the components of shareholders’ equity, arealso translated into Japanese yen at the rate of exchange in effect at each balance sheet
date. The components of shareholders’ equity are translated at their historical exchange
rates. Differences arising from translations are presented as “Foreign currencytranslation adjustments,” a component of net assets in the accompanying consolidated
financial statements.
Foreign currency monetary assets and liabilities are translated into Japanese yen at therate of exchange in effect at each balance sheet date and the resulting translation gains
or losses are credited or charged to income.
(3) Cash and cash equivalents
The Company and its subsidiaries consider all highly liquid investments with a maturityof three months or less from their purchase dates to be cash equivalents.
(4) Securities
Marketable securities categorized as other securities are carried at fair value withunrealized holding gains or losses, net of applicable income taxes, accounted for as aseparate component of net assets. Non-marketable securities classified as othersecurities are stated at cost. Cost of securities sold is computed based on the moving
average method.

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Financial Section

2.

Summary of Significant Items for the Presentation of Consolidated Financial
Statements (continued)(5)

Derivatives
All derivatives are carried at fair value except for interest rate swaps which meet specifichedge criteria.

(6) Inventories
Finished goods and raw materials— moving average method (in cases
where profitability has declined, thebook value is reduced accordingly)

Semi-finished goods and work in process— individual cost method (in cases
where profitability has declined, thebook value is reduced accordingly)(7) Depreciation and amortization (except for leased assets)
Depreciation of property, plant and equipment is generally computed by the decliningbalance method, based on the estimated useful lives of the respective assets. The
straight-line method is applied to certain research facilities acquired during the year
ended March 31, 1995, and buildings acquired on or after April 1, 1998. Foreign
consolidated subsidiaries compute depreciation primarily using the straight-line method.
The following summarizes the estimated useful lives of property, plant and equipmentby major category:
Buildings and structures
Machinery and equipment

3 – 60 years
2 – 17 years

Intangible assets, which are included in “other assets” of the accompanying consolidatedbalance sheet, are amortized by the straight-line method. Capitalized software forinternal use is amortized by the straight-line method over a period of 5 years, based on
the estimated useful life of the software.
(8) Allowance for doubtful accounts
The allowance for doubtful accounts is provided at an amount sufficient to coverpossible losses on the collection of receivables. The amount of the allowance isdetermined based on the Company’s historical experience with write-offs, plus anestimate of specific doubtful accounts based on a review of the collectibility of
individual receivables.
(9) Provision for directors’ bonuses
To provide for the payment of bonuses to directors and statutory auditors, an allowance
is made based on the projected amount incurred.

SHIBAURA MECHATRONICS CORPORATION
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15

Financial Section

2. Summary of Significant Items for the Presentation of Consolidated Financial
Statements (continued)(10) Provision for loss on order received
A provision for losses on orders received is provided at an amount to cover the estimatedpossible losses involved on orders for which a loss occurrence is probable and can bereasonably estimated at the balance sheet date.
(11) Provision for product warranties
The provision for product warranties represents management’s best estimate at the timeof sale of the total cost that will be incurred to repair or replace products during thewarranty period. The amount of accrued estimated warranty costs is primarily based on
historical experience.
(12) Provision for retirement benefits
An allowance for employees’ retirement benefits is provided, based on the projected
retirement benefit obligation and the fair value of the pension plan assets as of thebalance sheet date. The retirement benefit obligation for employees is attributed to eachperiod by the straight-line attribution method. Actuarial gains or losses are charged to
expenses from the fiscal year subsequent to the fiscal year when incurred using astraight-line method over a period of 10 years within the average remaining years ofservice of the employees. Prior service cost is amortized by the straight-line method overa period of 10 years, which is within the estimated average remaining years of service ofthe eligible employees.
Unrecognized prior service cost and unrecognized actual gains and losses are included
in remeasurements of defined benefit plans under Remeasurements of defined benefit
plans in net assets after the tax effect adjustment.
(13) Provision for directors’ retirement benefits
Certain directors, audit & supervisory board members and corporate officers of theCompany and certain consolidated subsidiaries are entitled to lump-sum payments under
their respective unfunded retirement benefit plans. Provision for retirement allowances
for these officers has been made at the estimated amounts which would be paid if all
directors, audit & supervisory board members and corporate officers resigned as of thebalance sheet date.
(14) Reserve for repair and maintenance
Certain research facilities acquired during the year ended March 31, 1995 require
periodic repairs and maintenance. An accrual for these repair and maintenance expenses
is recorded based on the current portion of the total expenses estimated for such repairs.

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Financial Section

2. Summary of Significant Items for the Presentation of Consolidated Financial
Statements (continued)(15) Revenues and costs
Regarding contracts with customers, the Company and its consolidated subsidiaries
recognize revenue based on the following five-step approach.
Step 1 : Identification of contracts with customers
Step 2 : Identifying performance obligations (goods or services that should be accounted
for separately)
Step 3 : Calculation of transaction price (total contract consideration)
Step 4 : Allocating the transaction price to each performance obligation
Step 5 : Recognition of revenue when or as each performance obligation is satisfied
Information about contracts and performance obligations
The Company and its consolidated subsidiaries mainly manufacture and sell products
such as semiconductor manufacturing equipment, Flat Panel Display (FPD)
manufacturing equipment, and automatic ticket vending machines. and businessincidental to them. In relation to the sales of semiconductor manufacturing equipment
and FPD manufacturing equipmentwhich are manufactured based on contracts withcustomers, it is essential for the Group to complete the installation of the product at thelocation specified by the customer after delivery and to meet the product specifications
based on the contract. The Group considers that delivery and installation of products
shall be a single performance obligation because the Group only has the capability todeliver and install the products due tothe high degree of interrelationship between
product and installation. Revenue is recognized over time based on progress of theperformance obligation since such productss cannot be used by other customers and theGroup is entitled to payment for a satisified performance obligation accordingly. The
measure of progress is by imput method. Consideration for transactions involving suchproducts is in accordance with the contract, and we receive payments in stages, generallyaccording to the progress of performance obligations. Any products or services whichmeet the criteria in paragraph 95 of the Guidance, we will apply the practical expedientand recognize revenue at a point in time when the performance obligation is fully
satisfied.
Other sales are those where the customer obtains control of the product and theperformance obligation is satisfied upon delivery of the product to the customer,
therefore, revenue is recognized at that point in time. Consideration for transactions
relating to the sale of such products is collected within one year after delivery. In addition,
for any products which meet the requirements of Paragraph 98 of the Guidance, we will
apply the practical expedient and recognize revenue i at a point in time when the
product is shipped.
Information about the transaction price and allocation of performance obligations.
The Group requests customers advance payment of the considerations during the period
from the time an order is received until the performance obligation is satisfied. Postsatisfaction payments are made within one year from the time the performance obligation
is satisfied. Therefore, significant financial components are not included.
Multiple performance obligations per contract were not identified when calculating theallocation of the transaction price to performance obligations. Therefore, we do notallocate the transaction price to the performance obligations.

17

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Financial Section

2. Summary of Significant Items for the Presentation of Consolidated Financial
Statements (continued)(16) Leased assets
The depreciation of leased assets under finance leases is calculated using the straightline method over the lease term with residual value of zero.
(17) Hedge accounting
Interest rate swaps which meet specific hedge criteria and qualify for special hedge
accounting treatment are not remeasured at fair value.
In addition, from the current consolidated fiscal year, "Practical Solution on theTreatment of Hedge Accounting for Financial Instruments that Reference LIBOR"(ASBJ PITF No. 40, September 29, 2020) has been applied.
Hedging instruments and hedged items are summarized as follows:
Hedging instruments
Hedged items
Interest rate swap agreements ･･･ Interest on long-term debt
The Company uses derivative transactions to hedge its exposure to interest rate
fluctuation risk on long-term debt.
For interest rate swaps which meet the criteria for special hedge accounting, theassessment of hedge effectiveness is omitted.
(18) Research and development expenses
Research and development expenses are expensed as incurred and included in cost of
sales or selling, general and administrative expenses.

18

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Financial Section

2. Summary of Significant Items for the Presentation of Consolidated Financial
Statements (continued)(19) Adoption of consolidated taxation system
The Company and some of its domestic consolidated subsidiaries have adopted theconsolidated taxation system.
Application of tax effect accounting on transition from the consolidated taxation system
to the group tax sharing system.
With regard to the transition to the group tax sharing system introduced by the “ActPartially Amending the Income Tax Act, etc.” (Act No. 8 of 2020) and items under the
non-consolidated taxation system reviewed in line with the transition to the group tax
sharing system, the Company and certain consolidated subsidiaries have applied theprovisions of the Tax Act before the revisions in determining the amount of deferred tax
assets and liabilities pursuant to Paragraph 3 of the “Practical Solution on the Treatment
of Tax Effect Accounting for the Transition from the Consolidated Taxation System to
the Group Tax Sharing System” (ASBJ PITF No. 39, March 31, 2020), instead of
applying Paragraph 44 of the “Implementation Guidance on Tax Effect Accounting”(ASBJ Guidance No. 28, February 16, 2018).
From the beginning of the next consolidated fiscal year, “Practical Solution on the
Accounting and Disclosure Under the Group Tax Sharing System“ (ASBJ PITF No. 42,
August 12, 2021) will be applied.
3. Significant Accounting Estimates(1) Allowance for doubtful accounts
The Group has contract assets and receivables in Japan and overseas.
Considering the progress of projects, domestic and overseas economic trends, the credit
status of creditors and the expected timing of collection, we classify receivables as a
general for which the credit risk has not been materialized or doubtful for which therisk, such as customer financing and delays in project, has materialized.
For general receivables, an allowance for doubtful accounts is recorded for each Group
company with an estimate of uncollectible receivables at the end of the fiscal year basedon the actual bad debt ratio against the receivables for the past three years. For doubtfulreceivables, an allowance for doubtful accounts is recorded with an estimate of
uncollectible receivables based on actual expected recoverability of the receivables
based on the facts and circumstances associated with the specific customer or project.
As of the end of the current consolidated fiscal year, the Group recorded an allowancefor doubtful accounts of ¥1,526 million (($12,472 thousand) (¥1,445 million at the endof the previous consolidated fiscal year)). In case the collectability of receivables isaffected by any external factors that cannot be known by the Group as of the end of thecurrent consolidated fiscal year, the amount may increase or decrease in the
consolidated financial statements for the following fiscal year and thereafter.

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Financial Section

3. Significant Accounting Estimates (continued)(2) Estimation of total costs used in the input method
The Group recognizes revenue over time from contracts for the manufacture andinstallation of machinery and equipment that cannot be diverted to other uses based on
the customer contacts. Revenues of ¥26,309 million (($214,964 thousand) (¥19,031
million in the previous consolidated fiscal year) were recorded in the current fiscal year
on contracts that were still in process as of March 31, 2022. The progress is measured
by the comparing input method the costs incurred up to the end of the current
consolidated fiscal year to the estimated total costs.
Estimated total costs are based on a variety of information, including specifications,work details and actual costs incurred in similar contracts in the past.
Contracts are highly customized and based on customer requirements and specifications.
In addition, most of contracts are completed over long periods. As a result, the estimatedtotal costs may change due to the incurrence of manufacturing costs and other costs foradjustments to satisfy customer requirements that are not initially expected. In case theactual results differ from the estimates due to unexpected future events, the Group’s
future income may be changed.
(3)

Recoverability of deferred tax assets
The Group evaluates the recoverability of deferred tax assets based on the future taxable
income before adjusting for temporary differences and deductions and also considers
the reversing schedule of temporary differences and tax loss carried forward based on
the future business plan including tax planning.
For the Company and its consolidated tax group in Japan, the future reasonableestimated period of taxable income before temporary differences and deductions is
assessed as one year in consideration of the business environment in which the Groupis located.
As of the end of the current consolidated fiscal year, the Group records ¥776 million(($6,340 thousand) ( ¥582 million in the previous consolidated fiscal year)) as deferred
tax assets related to corporate tax of the Company and its consolidated tax group in
Japan. In case the future reasonable estimated period of taxable income before
temporary differences and deductions is changed, the deferred tax assets may increaseor decrease in the consolidated financial statements for the following fiscal year andthereafter.

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Financial Section

4.

Changes in accounting policies(1) Application of Accounting Standards, etc. for Revenue Recognition“Accounting Standard for Revenue Recognition “(Corporate Accounting Standard
No.29 March 31, 2020. hereinafter referred to as “Accounting Standard for Revenue
Recognition” cormorant.), etc., was be applied from the beginning of the current
consolidated fiscal year. The Group recognizes revenue at the amount expected to bereceived in exchange for goods or services and when control of the promised goods orservices is transferred to the customer.
Regarding the application of revenue recognition accounting standards, the Groupapplied the transitional treatment specified in the paragraph 84 of Accounting Standard
for Revenue Recognition. There is no impact on the opening balance of retained
earnings.
In addition, there is no impact on profit and loss for the current consolidated fiscal year.
In addition, in accordance with the transitional treatment stipulated in paragraph 89-2of the Accounting Standard for Revenue Recognition, the Group does not apply the
Accounting Standard for Revenue Recognition to the presentation for the comparative
information.
In addition, in accordance with the transitional treatment stipulated in paragraph 89-3of the Revenue Recognition Accounting Standard, the Group does not disclosecomparative information in Notes 20 “Revenue Recognition”.
(2) Application of Accounting Standards for Market Value Calculation“Accounting Standard for Market Value Calculation” (Corporate Accounting Standard
No.30 July 4, 2019. Hereinafter referred to as “Accounting Standard for Market Value
Calculation” cormorant.), was applied from the beginning of the current consolidated
fiscal year. In accordance with the paragraph 19 of the Accounting Standard for Market
Value Calculation and the paragraph 44-2 “Accounting Standard for Financial
Instruments” (Corporate Accounting Standards No.10 July 4, 2019), we have decided
to apply the new accounting standards prospectively. This change has no impact on the
consolidated financial statements.
In the notes on “financial instruments”, the breakdown of financial instruments bymarket price level for comparative period is not disclosed in accordance with thetransitional treatment stipulated in paragraph 7-4 of the “Application Guidance on
Disclosure of Market Values, etc,. of Financial Instruments”(Corporate AccountingStandards Application Guidance No.19 July 4, 2019).

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Financial Section

5.

Accounting Standard Issued but Not Yet Effective

Accounting Standards issued by March 31, 2022 but not yet effective are as follows;“Application Guidelines for Accounting Standards Concerning Market Value
Calculations” (Accounting Standards Board of Japan (“ASBJ”) Application Guidance
No.31 June 17, 2021)(1) Summary“Application Guidelines for Accounting Standards Concerning Market Value“(Accounting Standards Board of Japan (“ASBJ”) Accounting Standards Application
Guidelines No.31) amended on June 17, 2021 was announced at the time of publicationthat a certain period of time will be required for the discussion on “calculation of market
value of investment trusts”. Approximately one year after the publication of the“Accounting Standard for Calculation of Market Value,” it was revised and released.
(2) Date of application
The Group will apply the new standard for the fiscal year ending March 31, 2023.
(3) Effect of application
There is no material impact on the consolidated financial statements due to theapplication of the “Application Guidelines for Accounting Standards Concerning
Market Value Calculations”.
6.

Changes in Accounting estimates
Recording of provision for product warranties
Previously, the Company recorded after-sales service costs during the product warranty
period when incurred. Since the proportion of total sales of the Fine Mechatronics
business has been increased which need after-sales costs, the Company determined
there is now sufficient information and past results available to reasonably estimate theafter-sales cost. As a result, we developed a method to reasonably estimate the amount
expected to be necessary in the future from products sold in the current fiscal year inorder to make the current period profit and loss calculation more precise.
As a result, operating income, ordinary income and income before income taxes are
decreased by 120 million yen, respectively.

22

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Financial Section

7.

Additional Information(Performance-based stock compensation plan for the Company’s directors)
The Company has introduced a performance-based stock compensation plan (the “Plan”)
for directors of the Company (excluding outside directors) and executive officers who
have entered into an engagement agreement with the Company (hereinafter “Directors,etc.”).
(1) Transaction summary
The Company will set up a monetary trust. This trust will be used to acquire commonshares of the Company. A director shall be granted shares in each fiscal year. The stockbased compensation will be delivered to the Directors via the trust. Note that in principle
the Directors will receive delivery of said shares at the scheduled time every year.
(2) Shares remaining in the trust
The shares of the Company that remain in the trust are recorded as treasury stock under
net assets at book value (excluding associated costs). The book value and number ofshares of the treasury stock were ¥39 million ($358 thousand) and 11 thousand shares,in the previous consolidated fiscal year and ¥31 million and 9 thousand shares in thecurrent consolidated fiscal year.

23

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Financial Section

8.

Investments in Securities

At March 31, 2022 and 2021, marketable securities classified as other (available-for-sale)securities are summarized as follows:

Other securities
whose market
value recorded in
the balance sheet
exceeds theiracquisition costs:
Equity securities
Debt securities
Other
Total

March 312022
2021
AmountAmountrecorded inrecorded in
Acquisition the balance
Acquisition the balance
sheet
Sheet
costs
costs
Difference
Difference(Millions of yen)
(Millions of yen)

–
–
–
–

–
–
–
–

–
–
–
–

¥ 22
–
–
¥ 22

¥ 39
–
–
¥ 39

March 31,2022
Amountrecorded in
Acquisition the balance
sheet
costs
Difference(Thousands of U.S. dollars)

¥ 16
–
–
¥ 16

–
–
–
–

–
–
–
–

At March 31, 2022 and 2021, non-marketable securities carried at cost are summarized asfollows:
March 31,2021
2022
(Millions of yen)
Investments in affiliates:
Affiliates
Other

¥ 52
1

March 31,
2022
(Thousands of
U.S. dollars)

¥ 52
1

$ 426
5

For the year ended March 31, 2021, no other securities were sold.
For the year ended March 31, 2022, other securities sold are summarized as follows:

Equity securities
Debt securities
Other
Total

24

SHIBAURA MECHATRONICS CORPORATION
Annual Report 2022

Year ended March 31
2022
Total gain on
sales
Sales proceeds(Millions of yen)
¥ 40
¥ 18
－
－
－
－
¥ 18
¥ 40

Total loss on
sales
－
－
－
－

Year ended March 31
2022
Total gain on
Total loss on
sales
sales
Sales proceeds(Thousands of U.S. dollars)
$ 327
$ 144
－
－
－
－
－
－
－
$ 327
$ 144
－

24

–
–
–
–

Financial Section

9.

Inventories

Inventories at March 31, 2022 and 2021 are summarized as follows:
March 31,
2022
(Thousands of
U.S. dollars)

March 31,2021
2022
(Millions of yen)Finished products
Raw materials
Work in process
Total

¥

1,428
164
1,981
¥ 3,573

¥

910
198
1,684
¥ 2,792$ 11,666
1,338
16,191$ 29,195

Inventories as of March 31, 2022 and 2021 were written down due to lower profitability andunrealized loss on inventories was charged to cost of sales in the amounts of ¥358 million($2,927 thousand) and ¥117 million respectively.
The amount of inventories corresponding to the reserve for loss on orders is as follows:
Inventories related to construction contracts for which losses are expected and provision forloss on orders are presented on both sides without offsetting.
March 31,
2022
(Thousands of
U.S. dollars)

March 31,2021
2022
(Millions of yen)Work in process
10.

¥

8

－

$ 67

Short-Term Bank Loans and Long-Term Debt

The weighted average interest rate per annum on the short-term bank loans outstanding at
March 31, 2022 and 2021 was 0.9%.
Long-term debt and lease obligations at March 31, 2022 and 2021 are summarized as follows:
March 31,2021
2022
(Millions of yen)Unsecured:
0.6% to 1.2% loans from banks due 2022
to 2026
Lease obligations
Total
Less current portionLong-term debt and lease obligations, net

March 31,
2022
(Thousands of
U.S. dollars)

5,800
51

5,800
65

47,389
418

5,851
817
¥ 5,0345,865
17¥ 5,848

47,807
6,676$ 41,131

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Financial Section

10.

Short-Term Bank Loans and Long-Term Debt (continued)

Aggregate annual maturities of long-term debt and lease obligations at March 31, 2022 aresummarized as follows:
March 31, 2022
(Millions of(Thousands ofyen)
U.S. dollars)
2022
2023
2024
2025 and thereafter
Total

¥ 817
16
3,414
1,604
¥ 5,851$ 6,676
133
27,89813,099$ 47,807

The Company entered into one-year contracts for commitment lines of credit with six banks
in the aggregated amount of approximately ¥6,000 million ($49,024thousand) to optimize
the free cash flow on August 2, 2021 The outstanding balance of bank borrowings underthese commitment lines at March 31, 2022 was zero.
11.

Research and Development Expenses

Research and development expenses charged to income for the years ended March 31,
2022 and 2021 are as follows:Year ended March 31,
2021
2022
(Millions of yen)
¥ 2,637

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SHIBAURA MECHATRONICS CORPORATION
Annual Report 2022

¥ 2,494

Year ended
March 31,
2022
(Thousands of
U.S. dollars)$ 21,545

26

Financial Section

12.

Income Taxes and Deferred Tax Assets

The major components of deferred tax assets and liabilities as of March 31, 2022 and 2021
are summarized as follows:
March 31,2021
2022
(Millions of yen)
Deferred tax assets:
Net defined benefit liability
Accrued employees’ bonuses
Reserve for repair and maintenanceEnterprise tax payable
Costs of construction for the percentage
of completion
Costs of construction for the input
methodTax loss carried forward
Other
Gross deferred tax assets
Valuation allowances
for tax loss carryforwards
Valuation allowancefor temporary differences
Total deferred tax assets

March 31,
2022
(Thousands of
U.S. dollars)¥ 1,926481
98
88¥ 1,945378
97
39$ 15,734
3,931
797
721

－

115

－

104
－
2,193
4,890

－
－
1,944
4,518

853
－
17,91739,953－－－(3,800)1,090(3,664)854(31,047)
8,906

－

(1)

－

(155)
(155)
¥ 935

(138)
(139)
¥ 715

(1,270)(1,270)$ 7,636

Deferred tax liabilities:
Unrecognized holding gain on othersecurities
Other
Total deferred tax liabilities
Net deferred tax assets

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Financial Section

12.

Income Taxes and Deferred Tax Assets (continued)

Income taxes in Japan applicable to the Company and its domestic consolidated subsidiaries
consist of corporation tax, inhabitants’ taxes and enterprise tax, which, in the aggregate,
resulted in a statutory rate of approximately 30.6% and 30.6% for the years ended March 31,
2022 and 2021. Income taxes of the foreign consolidated subsidiaries are generally based on
the tax rates applicable in their countries of incorporation.
The reconciliations between the effective tax rates reflected in the consolidated statements ofincome and the effective statutory tax rates for the years ended March 31, 2022 and 2021 aresummarized as follows:
March 31,

Effective statutory tax rates
Effect of:
Non-deductible expenses
Change in valuation allowance
Inhabitants tax per capital
Different tax rates applied to foreign consolidated
subsidiaries
Foreign tax
Experimental and research expense tax credit
Difference between assessment year
and previous year
Other
Effective tax rates

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SHIBAURA MECHATRONICS CORPORATION
Annual Report 2022

2022
30.6%

2021
30.6%

0.1
3.0
0.3
0.5

0.7
1.2
0.5
(1.5)

0.8
(5.5)
(0.3)

1.4
(5.1)
0.9

0.6
30.0%

1.5
30.1%

28

Financial Section

13.

Other Comprehensive Income

The following table presents reclassification adjustments and tax effects allocated to eachcomponent of other comprehensive income for the years ended March 31, 2022 and 2021:
Year ended March 31,
2021
2022
(Millions of yen)
Valuation difference on other (availablefor-sale) securities:
Current year gains (losses)
Reclassification adjustments for gains andlosses included in net income
Amount before tax effectTax effect
Valuation difference on available-for-salesecurities
Foreign currency translation adjustment:
Current year gains (losses)
Reclassification adjustments for gains andlosses included in net income
Amount before tax effectTax effectForeign currency translation adjustment
Remeasurements of defined benefit plans:
Current year gains (losses)
Reclassification adjustments for gains andlosses included in net income
Amount before tax effectTax effectRemeasurements of defined benefit plans
Total other comprehensive income

Year ended
March 31,
2022
(Thousands of
U.S. dollars)

¥1

¥ 12

$ 11

(17)
(16)
1
(15)

–
12
(1)
11

(143)
(132)
5
(127)

144

19

1,179

–
144
–
144

–
19
–
19

–
1,179
–
1,179

(13)

422

(107)

140
127
–
127

191
613
–
613

1,146
1,039
–
1,039

¥ 256

¥ 643

$ 2,091

29

SHIBAURA MECHATRONICS CORPORATION
Annual Report 2022

29

Financial Section

14.

Information on Dividends

The Company paid cash dividends as follows:
Date of board
resolution
May 21,
2021

Class ofstock
Commonstock

Total dividend
amountDividends
per share¥ 487 million¥110.00

Recorddate
March 31,2021

Effective
date
June 8,2021

Approval of dividends payments for which the record date is in the fiscal year and effective
date is in the following fiscal year is planned as follows:
Date of board
resolution
May 20,2022
15.

Class ofstock
Commonstock

Total dividend
amount¥ 1,018 million

Source ofdividends
Retainedearnings

Dividends
per share¥230.00

Recorddate
March 31,2022

Effective
date
June 7,2022

Retirement Benefits

The Company and its domestic consolidated subsidiaries have defined benefit pension plans
and lump-sum retirement payment plans which cover substantially all employees who retire
from the Companies. Eligible employees may also receive additional payments under theplans.
Certain consolidated subsidiaries use a simplified method for calculating retirement benefit
expenses and liabilities.
1

Defined benefit plans(1) The changes in the retirement benefit obligation for the years ended March 31, 2022 and2021 are as follows:Year ended March 31,
2021
2022
(Millions of yen)
Balance at the beginning of the year
Service costs
Interest costs
Actuarial (gain) loss
Retirement benefit paid
Balance at the end of the year

30

SHIBAURA MECHATRONICS CORPORATION
Annual Report 2022

¥ 9,006
349
31
39
(560)
¥ 8,865¥ 9,488
359
32
(145)
(728)
¥ 9,006

Year ended
March 31,
2022
(Thousandsof U.S.
dollars)$ 73,586
2,854
252
321
(4,574)$ 72,439

30

Financial Section

15.

Retirement Benefits (continued)(2) The changes in plan assets for the years ended March 31, 2022 and 2021 are as follows:Year ended March 31,
2021
2022
(Millions of yen)
Balance at the beginning of the year
Expected return on plan assets
Actuarial (gain) loss
Contributions by the Company
Retirement benefit paid
Balance at the end of the year

¥ 3,563
71
26
493
(385)
¥ 3,768¥ 3,295
66
277
345
(420)
¥ 3,563

Year ended
March 31,
2022
(Thousandsof U.S.
dollars)$ 29,114
582
214
4,030
(3,153)$ 30,787(3) The changes in net defined benefit liability that are calculated by the simplified method
for the years ended March 31, 2022 and 2021 are as follows:Year ended March 31,
2022
2021
(Millions of yen)
Balance at the beginning of the year
Retirement benefit expense
Retirement benefit paid
Other
Balance at the end of the year

¥ 1,349211(49)
11¥ 1,522¥ 1,258
227
(135)
(1)
¥ 1,349

Year ended
March 31,
2022
(Thousandsof U.S.
dollars)$ 11,024
1,724
(403)
93
$ 12,438

31

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Annual Report 2022

31

Financial Section

15.

Retirement Benefits (continued)(4) The following table sets forth the funded status of the plans and the amounts recognizedin the consolidated balance sheet as of March 31, 2022 and 2021 for the Group’s defined
benefit plans:¥ 5,746(3,768)
1,978
4,641

¥ 5,890(3,563)
2,327
4,464

March 31,
2022
(Thousandsof U.S.
dollars)$ 46,952(30,787)
16,16537,925

6,620

6,792

54,089

6,620

6,792

54,089¥ 6,620¥ 6,792$ 54,089

March 31,2021
2022
(Millions of yen)
Funded retirement benefit obligation
Plan assets at fair value
Unfunded retirement benefit obligation
Net liability for retirement benefits in thebalance sheet
Liability for retirement benefits
Net liability for retirement benefits in thebalance sheet
Notes:Net defined benefit liability calculated by the simplified method is included.

(5) The components of retirement benefit expense for the years ended March 31, 2022 and2021 are as follows:

¥ 349
31
(71)
154
(14)

¥ 359
32
(66)
208
(17)

March 31,
2022
(Thousandsof U.S.
dollars)$ 2,854
252
(582)
1,261
(115)

211

228

1,724

¥ 660

¥ 744

$ 5,394

March 31,2021
2022
(Millions of yen)
Service costs
Interest costs
Expected return on plan assets
Amortization of actuarial loss
Amortization of prior service cost
Retirement benefit expense calculated by thesimplified method
Retirement benefit expense for defined
benefit plans

32

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Annual Report 2022

32

Financial Section

15.

Retirement Benefits (continued)(6) The components of remeasurements of defined benefit plans included in othercomprehensive income (before tax effect) for the years ended March 31, 2022 and 2021 are
as follows:
March 31,2021
2022
(Millions of yen)
Prior service cost
Actuarial gains
Total

¥ 14
(142)
¥ (128)¥ 17(630)¥ (613)

March 31,
2022
(Thousandsof U.S.
dollars)$ 115(1,154)$ (1,039)(7) The components of remeasurements of defined benefit plans included in accumulated
other comprehensive income (before tax effect) as of March 31, 2022 and 2021 are as
follows:
March 31,2021
2022
(Millions of yen)
Unrecognized prior service cost
Unrecognized actuarial losses
Total

–
297
¥ 297

¥ (14)
439¥ 425

March 31,
2022
(Thousandsof U.S.
dollars)–$ 2,430$ 2,430(8) The fair value of plan assets, by major category, as a percentage of total plan assets as ofMarch 31, 2022 and 2021 are as follows:
March 31,

Bonds
SharesCash and deposits
General accounts
Other
Total

2022
16.3%
24.0%
0.0%
39.3%
20.4%
100.0%

2021
15.8%
24.8%
0.0%
40.0%
19.4%
100.0%

33

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Annual Report 2022

33

Financial Section

15.

Retirement Benefits (continued)(9) The expected return on assets has been estimated based on the anticipated allocation toeach asset class and the expected long-term returns on assets held in each category.
The assumptions used in accounting for the above plans are as follows:
March 31,

Discount rateLong-term expected return on plan assets
Salary increase rate
Lump-sum election rate22022
0.31－0.36%
2.0%
3.9%
67.0%

2021
0.31－0.36%
2.0%
3.9%
82.0%

Defined contribution plans

The amount required to be contributed to the defined contribution plans is ¥18 million ($149
thousand) for the year ended March 31, 2022
16.

Contingent Liabilities

The Company had the following contingent liability as of March 31, 2022 and 2021 :March 31,2022
2021(Millions of yen)
Guarantee for housing loans of employees

34

SHIBAURA MECHATRONICS CORPORATION
Annual Report 2022

¥2

¥2

March 31,
2022
(Thousands of
U.S. dollars)
$ 15

34

Financial Section

17.

Derivatives and Hedging Activities

The Company has entered into interest-rate swap contracts to manage its exposure to interestrate risk on long-term debt. As a matter of policy, the Company does not enter into derivativetransactions for trading purposes. The Company does not anticipate nonperformance by anyof the counterparties to the above transactions, all of whom are domestic financial institutions
with high credit ratings.
In accordance with the Company’s policy, derivative transactions are entered into under thedecision-making rules approved by the Management Strategy Committee of the Company.
The Treasury Division with the responsibility to enter into such contracts monitors andcontrols the inherent risk and performance on a daily basis and reports these to managementof the Company, if and when necessary.
In accordance with the special hedge accounting under the Accounting Standard for Financial
Instruments, the Company does not record certain interest-rate swap arrangements at fairvalue but charges or credits the net cash flows from the swap arrangements to the interest
arising from the respective hedged borrowings.
At March 31, 2022 and 2021, the fair value information for derivatives, for which hedge
accounting was applied, was not presented since all derivatives were accounted for using thespecial hedge accounting and accordingly their fair value was recorded as part of the fairvalue of the hedged borrowings.

35

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35

Financial Section

17.

Derivatives and Hedging Activities (continued)

Ⅰ. Derivative transactions which do not qualify for hedge accounting
Currency-related transactions

Contract
amountForeign Exchange
Forward Contracts
To sell foreign
currencies
U.S. Dollars
Total
To buy foreign
currencies
U.S. Dollars
Total

Total
To buy foreign
currencies
U.S. Dollars
Total

¥－
¥－

¥ (139)¥ (139)¥ (139)¥ (139)

¥－
¥－

¥－
¥－

¥－
¥－

¥－
¥－

Total
To buy foreign
currencies
U.S. Dollars
Total

36

SHIBAURA MECHATRONICS CORPORATION
Annual Report 2022

As of March 31, 2021
Contract
amountover 1 year Fair value(Millions of yen)

Unrealizedgain(loss)¥ 1,259¥ 1,259

¥ 218
¥ 218

¥ (54)¥ (54)¥ (54)¥ (54)

¥－
¥－

¥－
¥－

¥－
¥－

¥－
¥－

Contract
amountForeign Exchange
Forward Contracts
To sell foreign
currencies
U.S. Dollars

Unrealizedgain(loss)¥ 1,417¥ 1,417

Contract
amountForeign Exchange
Forward Contracts
To sell foreign
currencies
U.S. Dollars

As of March 31, 2022
Contract
amountover 1 year Fair value(Millions of yen)

As of March 31, 2022
Contract
Unrealized
amountgain(loss)
over 1 year Fair value(Thousands of U.S. dollars)$ 11,580$ 11,580$－$－$ (1,137)$ (1,137)$ (1,137)$ (1,137)

$－
$－

$－
$－

$－
$－

$－
$－

36

Financial Section

17.

Derivatives and Hedging Activities (continued)

Notes:
Fair value is principally based on obtaining quotes from counterparty financial institutions.
Ⅱ. Derivative transactions which qualify for hedge accounting
Interest-related transaction
As of March 31, 2022
Type of derivativetransaction
Interest rate swap transaction
Pay fixed/Receive variable

Principal item
hedgedContract
amountContract
amountover 1 year

Fair value(Millions of yen)
Long-term debt

¥ 2,500¥ 1,700¥－

As of March 31, 2021
Type of derivativetransaction
Interest rate swap transaction
Pay fixed/Receive variable

Principal item
hedgedContract
amountContract
amountover 1 year

Fair value(Millions of yen)
Long-term debt

¥ 2,500¥ 2,500¥－

As of March 31, 2022
Type of derivativetransaction
Interest rate swap transaction
Pay fixed/Receive variable

Principal item
hedgedContract
amountContract
amountover 1 year

Fair value(Thousands of U.S. dollars)Long-term debt

$ 20,427$ 13,890$－

Notes:
The fair value of interest rate swaps accounted for using the special treatment is included in
the fair value of the underlying long-term debt.

37

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37

Financial Section

18.

Financial Instruments① Matters relating to financial instruments(1)

Policy of financial instruments
The Group makes capital investments primarily through bank loans to secure thenecessary principal and maintain liquidity. Derivatives are used, not for speculative
nor trading purposes, but to manage risk of foreign currency exchange rates andinterest rate fluctuations arising from business operations.

(2)

Contents and risk management for financial instruments
Receivables such as trade notes and accounts receivable are exposed to a customer’s
credit risk. Receivables from each customer are constantly checked to reduce risk of
the customer’s default.
Investment securities are equity securities of customers of the Group and exposed tothe market price fluctuation risk.
While foreign currency-denominated operating receivables are exposed to exchange
rate fluctuation risk, the Group hedges this risk by, as a general rule, primarily
utilizing forward exchange contracts for foreign currency-denominated operating
payables. Trade payables, which are operating payables, are settled within a year.
Short-term bank loans are used to primarily to procure working capital, while longterm debt is used to procure funds required for long-term stability. Although someitems with variable interest rates are exposed to interest rate fluctuation risk,
derivative transactions (interest rate swaps) are utilized in part to fix interest payments.
To control credit risk related to derivatives, based on internal guidelines, the Group
enters into derivative transactions with counterparties with high credit ratings. In
addition, the Treasury Division of the Group regularly monitors risk and gain or loss,
and reports them to management of the Company.
Operating payables and bank loans are exposed to liquidity risk.
Each entity of the Group performs cash management using monthly cash flow
information.

(3)

Supplementary information on fair value of financial instruments
Because various assumptions and factors are reflected in estimating fair value,
different assumptions could result in different fair value. The contract or notionalamounts of derivatives which are shown in the below table do not represent theamounts exchanged by the parties and do not measure the Companies’ exposure tocredit or market risk.

38

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38

Financial Section

18.

Financial Instruments (continued)② Matters concerning the fair value of financial instruments, etc.
Amounts as of March 31, 2022 and 2021 on the accompanying consolidated balance sheet
fair value and the difference between them are as follows.
March 31, 2022
Carrying value

Fair value

Difference(Millions of yen)
(1) Notes receivable, trade

255

255

5,972

5,972

－

718

718

－

(4) Notes and accounts payable, trade(11,240)(11,240)－(5) Electronically recorded obligations - operating(3,021)(3,021)－(6) Short-term bank loans(4,350)(4,350)

－

(800)

(800)

－

(2) Accounts receivable, trade(3) Electronically recorded monetary claims- operating(7) Current portion of long-term debt－

(8) Long-term debt

(5,000)(4,964)36(9) Other long-term liabilities(3,078)(2,697)(10) Derivative transactions

(140)

(140)

381
－

March 31, 2021
Carrying value

Fair value

Difference(Millions of yen)
(1) Notes and accounts receivable, trade22,53822,538

－

602

602

－

(3) Notes and accounts payable, trade(10,684)(10,684)－－(2) Electronically recorded monetary claims- operating(4) Short-term bank loans(5,050)(5,050)(5) Long-term debt

(5,800)(5,757)

43(6) Other long-term liabilities(3,078)(2,809)(7) Derivative transactions

(60)

(60)

269
－

March 31, 2022
Carrying value

Fair value

Difference(Thousands of U.S. dollars)(1) Notes receivable, trade

2,082

2,082

－

(2) Accounts receivable, trade

48,795

48,795－(3) Electronically recorded monetary claims- operating

5,866

5,866

－

(4) Notes and accounts payable, trade(91,840)(91,840)－(5) Electronically recorded obligations - operating(24,679)(24,679)－(6) Short-term bank loans(35,542)(35,542)－(7) Current portion of long-term debt

(6,536)(6,536)－(8) Long-term debt

(40,853)(40,561)292(9) Other long-term liabilities(25,150)(22,040)

3,110(10) Derivative transactions(1,147)(1,147)－39

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Annual Report 2022

39

Financial Section

18.

Financial Instruments (continued)(*)“Cash and deposits” are omitted because they are cash and the market value is close to
the book value because the deposits are settled in a short period of time.
(*) Liabilities are presented in parentheses in the above table.
Notes:a)

As non-marketable equity securities of ¥52 million ($426 thousand) do not have a quoted
market price and their future cash flows cannot be estimated, the Group considers it notreasonably possible to determine their fair value. Hence, the items are not included in
the previous table.

b)Financial assets due subsequent to the balance sheet dateCash and bank deposits of ¥26,316 million ($215,020 thousand), Notes receivable, tradeof ¥255 million ($2,082 thousand), Accounts receivable, trade of ¥5,972 million($48,795 thousand), Electronically recorded monetary claims-operating of ¥718 million($5,866 thousand) are due within one year subsequent to March 31, 2022 and Cash andbank deposits of ¥19,601 million, Notes and accounts receivable, trade of ¥22,538
million, Electronically recorded monetary claims of ¥602 million are due within one
year subsequent to March 31, 2021.

③ Matters concerning the breakdown of financial products by fair value level.
The fair value of financial instruments is classified into the following three levels
according to the observability and importance of the input related to the calculation of
the fair value.
Level1：Of the inputs related to the calculation of the observable fair value, the fair value
calculated from the market price of the asset or liability formed in the active market andsubject to the calculation of the fair value.
Level2：Of the inputs related to the calculation of the observable fair value, the fair value
calculated using the inputs related to the calculation of the fair value other than the level
1 input.
Level3：The fair value calculated using inputs related to the calculation of unobservablefair value.
When multiple inputs that have a significant influence on the fair value calculation areused, the fair value is classified into the lowest priority level in the fair value calculation
among the levels to which those inputs belong.

40

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Annual Report 2022

40

Financial Section

18. Financial Instruments (continued)(1) Financial instruments recorded on the consolidated balance sheet at fair value.
March 31, 2022
Fair value(Millions of yen)
Derivative transactions
Currency related
Liabilities Total

Level1¥－¥－

Level2

Level3

Total

¥－
¥－

¥ 140
¥ 140

¥ 140
¥ 140

March 31, 2022
Fair value(Thousands of U.S. dollars)

Derivative transactions
Currency related
Liabilities Total

Level1$ －$－Level2

Level3$ 1,147$ 1,147

Total$ 1,147$ 1,147$－$－(2) Financial instruments other than those listed on the consolidated balance sheet at fairvalue.
March 31, 2022
Fair value(Millions of yen)
Notes receivable, trade
Accounts receivable, trade
Electronically recorded monetaryclaims - operating
Assets Total
Notes and accounts payable, trade
Electronically recorded obligations- operating
Short-term bank loans
Current portion of long-term debt
Long-term debt
Other long-term liabilities
Liabilities Total

Level1¥－

Level2¥ 255
5,972

Level3
¥－
－

Total
¥ 255
5,972

718

－

718

¥－

¥ 6,945¥－¥ 6,945－－

11,240－－

11,240

－
－
－
－

4,350

－
－
－
－

4,350

－
－

¥－

3,021
800
4,964
2,697
¥ 27,073

3,021
800
4,964
2,697
¥ 27,073¥－

41

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Annual Report 2022

41

Financial Section

18.

Financial Instruments (continued)
March 31, 2022
Fair value(Thousands of U.S. dollars)

－

Total
$ 2,082
48,795

5,866

－

5,866

$ －

$ 56,743$ －$ 56,743－－

91,840－－91,84035,542－－－－35,542Other long-term liabilities

－
－
－
－

Liabilities Total$ －Notes receivable, trade
Accounts receivable, trade
Electronically recorded monetaryclaims - operating
Assets Total
Notes and accounts payable, trade
Electronically recorded obligations- operating
Short-term bank loans
Current portion of long-term debt
Long-term debt

Level1$ －－－Level2$ 2,082
48,79524,6796,536
40,561
22,040$ 221,200

Level3$ －$ －24,6796,536
40,561(*) Calculation of fair value Explanation of the valuation technique used and the input
related to the calculation of fair value.
Derivative transactions
The fair value of exchange contracts is calculated by the discounted present value method
using observable inputs such as exchange rates, and is classified as Level 2 fair value.
Notes and accounts receivable, trade, and electronically recorded monetary claims –operating
These market values are calculated by the discounted present value method based on theinterest rate that takes into account the amount of receivables, the period up to the fullamount, and credit risk for each receivable classified by a certain period. In addition, it isclassified into the fair value of level 2.
Notes, accounts payable, trade, electronically recorded obligations – operating and shortterm bank loans
These fair values are calculated by the discounted present value method based on theinterest rate that takes into account future cash flows, the period until the repayment date,and credit risk for each debt classified by a certain period. In addition, it is classified into
the fair value of level 2.
Long-term debt （ Including current portion of long-term debt ） and other long-term
liabilities

42

These fair values are calculated by the discounted present value method based on the total
amount of principal and interest, the remaining period of the debt, and the interest rate thattakes into account credit risk. In addition, it is classified into the fair value of level 2.
42
SHIBAURA MECHATRONICS CORPORATION
Annual Report 2022

22,040$ 221,200

Financial Section

19. Investment in Rental Property
The Company owns an office building (including land) for rent by third parties in Yokohama
city, part of which is used by the Company.
Information on Consolidated Balance Sheet
Carrying amountMarch 31,
Decrease
2022(Millions of yen)
¥ 5,269¥ 205¥ 5,064

Fair value
March 31,2022

Fair value
March 31,2021

Rental property

Carrying amountMarch 31,
Decrease
2021(Millions of yen)
¥ 5,458¥ 189¥ 5,269

Rental property

Fair value
Carrying amount
April 1,March 31,
March 31,
Decrease
2021
2022
2022
(Thousands of U.S. dollars)$ 43,050$ 1,677$ 41,373$ 66,679

April 1,
2021
Rental property

April 1,2020

¥ 8,161¥ 7,937

Notes:a)

The carrying amount on the consolidated balance sheet is determined at the amount ofacquisition costs less accumulated depreciation and impairment loss.

b)

Decrease represents depreciation during the year.

c)

Fair value at March 31, 2022 and 2021 is internally determined by the Company basedon the real-estate appraisal standard.

Information on Consolidated Statement of Operations

Rental property

Year ended March 31, 2022
Rental income Rental costs
Difference(Millions of yen)
¥ 1,458¥ 1,040¥ 418

Rental property

Year ended March 31, 2021
Rental income Rental costs
Difference(Millions of yen)
¥ 1,528¥ 1,073¥ 455

Rental property

Year ended March 31, 2022
Rental income Rental costs
Difference(Thousands of U.S. dollars)$ 11,910$ 8,497$ 3,41343

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Annual Report 2022

43

Financial Section

19.

Investment in Rental Property (continued)

Notes:
Because the rental property includes an office space internally used by the Company, rental
income related to such office space is not included in the above table. Costs incidental to thisreal estate, such as depreciation, repair cost, insurance cost, taxes and public charges, areincluded in rental costs.
20.

Revenue Recognition(1) Information that disaggregates revenue from contracts with customers
Information for the fiscal year ended March 31, 2022
Revenue from contracts with customers disaggregated by type of goods or services is asfollows :Year ended March 31, 2022
Fine
mechatronics
Sales
SPE (Semiconductor)
FPD (Flat Panel Display)
OthersMechatronics
systems

Vending
machines &systems

Real estateleasing

Total¥(Millions of yen)
¥ 21,055¥ 6,893－¥ 27,948

8,198

5,794

¥

－

－

13,992
5,451

－

2,149

1,116

2,186

－

Revenue generated from contracts
with customers
Other income

31,402－13,803
－

2,186
－

－
1,881

47,391
1,881

Sales to external customers

31,40213,803

2,186

1,881

49,272

Year ended March 31, 2022
Fine
mechatronics
Sales
SPE (Semiconductor)
FPD (Flat Panel Display)
Others
Revenue generated from contracts
with customers
Other income
Sales to external customers

Mechatronics
systems

Vending
machines &systems

Real estateleasing

Total(Thousands of U.S. dollars))$ 172,032$ 56,321－$ 228,353

66,98447,344$－－

114,328

17,5589,116

17,858－44,532

256,574

112,781

17,858－387,213

－

$

－

－

－

15,376

15,376

256,574

112,781

17,85815,376

402,589

Notes:The “others” category includes vending machines and automatic ticket vending
machines.
“Other income” includes operating lease income in accordance with ASBJ Statement
No.13, “Accounting Standard for Lease Transactions” income from rental property.

44

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44

Financial Section

20. Revenue Recognition (continued)(2) Information that is the basis for understanding the revenue generated from contracts withcustomers
The basic information for understanding for revenue recognition is disclosed withinfootnote “2. Summary of Significant Items for the Presentation of Consolidated Financial
Statements (15) Revenues and costs.
(3) Information that explains the relationship between satisfaction of performance obligations
under contracts with customers and cash flows generated from such contracts and current
consolidated fiscal year regarding the amount and timing of revenue expected to berecognized from contracts with customers existing at the end of the fiscal year from thenext consolidated fiscal year onwards.
① Receivables arising from contracts with customers, balance of contract assets andcontract liabilities,etc.
The breakdown of receivables, contract assets and contract liabilities arising fromcontracts with customers is as follows :Year ended March 31,2022(Millions of yen)(Thousands of
U.S. dollars)
Receivables arising from contracts withcustomers
Notes receivable, trade¥255$ 2,082

Accounts receivable, trade

5,972

48,795

Electronically recorded monetary claims

718

5,866

Contract assets

18,708152,857

Contract liabilities

3,685

30,105

Notes:
・Contract liabilities are included in “ advance receipts” under current liabilities in
the consolidated balance sheet.
・The amount of contract liabilities at the beginning of the fiscal year and recognized
as revenue in the fiscal year was ¥472 million ($3,861 thousand).
Changes in contract liabilities are mainly due to receipt of advances received(increase in contract liabilities) and recognition of revenue (decrease in contarct
liabilities).
② Transaction price allocated to remaining performance obligations
The transaction price allocated to the remaining performance obligations as of the endof the current consolidated fiscal year is ¥17,613 million ($143,909 thousand). The
Company and its consolidated subsidiaries plan to recognize the remaining
performance obligations as revenue within approximately two years.
As a practical expedient, transactions with an initial expected contract period of one
year or less are not included. In addition, there are no material amounts in considerationfrom contracts with customers that are not included in the transaction price.

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Financial Section

21.

Segment Information① Segment information(1) Overview of reporting segments
The Company’s reporting segments are determined as the Group’s units for which discrete
financial information is available, which the Board of Directors regularly monitors in orderto decide on the allocation of business resources and evaluate business performance.
The Company adopts the division system in its Group organization based on the productor service lines.
Each division draws up a domestic and overseas comprehensive strategy for its products
or services to manage and develop operations.
The Company has four reporting segments: Fine mechatronics, Mechatronics systems,
Vending machines & systems, and Real estate leasing．
The product or service lines belonging to each reporting segment are as follows.
Fine mechatronics:
Semiconductor manufacturing equipment (Cleaning equipment, etching equipment,
ashing equipment, semiconductor inspection equipment), FPD manufacturing
equipment (Cleaning equipment, peeling equipment, etching equipment, developing
equipment, alignment film inkjet coating equipment, cell assembly equipment ), Inkjet
tablet printing equipment, Laser application equipment, Microwave applicationequipment, Vacuum pump.
Mechatronics systems:
Semiconductor manufacturing equipment (Flip chip bonding equipment, die bonding
equipment), FPD manufacturing equipment (Outer lead bonding equipment), Vacuum
application equipment (blasting equipment, vacuum bonding equipment, industrial
vacuum vapor deposition equipment), Secondary battery manufacturing equipment,
Solar cell manufacturing equipment, Precision parts manufacturing equipment,
Automated equipment,and others.
Vending machines & systems:
Vending machines, ticket vending machines, and others.
Real estate leasing:
Real estate leasing and management, and other businesses.
(2) Methods of calculating amounts for net sales, income or loss, assets and other items byreporting segment
The accounting policies applied by each reporting business segment are those outlined in“Significant items for the preparation of consolidated financial statements”.
Reporting segment is an ordinary income basis.
Internal sales between segments are mainly based on price to be applied for third-party
transactions.

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Financial Section

21. Segment Information (continued)(3) Information on sales, income or loss, assets and other items by reporting segment
Information for the fiscal years ended March 31, 2022 and 2021 is summarized as follows:Year ended March 31, 2022
Fine
mechatronics
Sales
Sales to external customers
Intersegment sales or transfers

Mechatronics
systems

Vending
machines &systems

Real estateleasing

Total(Millions of yen)
¥ 31,402
33¥ 13,803
204¥ 2,186－¥ 1,88191¥ 49,272
328

Total sales
Segment income

31,4352,977

14,007
2,045

2,186
53

1,972
529

49,6005,604

Segment assets

28,584

10,058

1,841

5,990

46,473

1,173
4
3

367
0
－

57
0
8

295
–
–

1,892
4
11

1,599

529

22

79

2,229

Other
Depreciation and amortization
Interest income
Interest expense
Increase in tangible and intangible
fixed assets

Year ended March 31, 2021
Fine
mechatronics
Sales
Sales to external customers
Intersegment sales or transfers

Mechatronics
systems

Vending
machines &systems

Real estateleasing

Total(Millions of yen)
¥ 29,64441¥ 11,286217¥ 1,9540¥ 1,910–¥ 44,794
258

Total sales
Segment income

29,685
1,993

11,503
792

1,954
8

1,910
570

45,052
3,363

Segment assets

26,470

8,044

1,685

6,041

42,240

908
5
5

392
0
0

59
0
7

308
–
–

1,667
5
12

923

252

19

48

1,242

Other
Depreciation and amortization
Interest income
Interest expense
Increase in tangible and intangible
fixed assets

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Financial Section

21.

Segment Information (continued)
Year ended March 31, 2022
Fine
mechatronics

Sales
Sales to external customers
Intersegment sales or transfers

Mechatronics
systems

Vending
machines &systems

Real estateleasing

Total(Thousands of U.S. dollars)$ 256,574
266$ 112,781
1,668$ 17,858－$ 15,376
747$ 402,589
2,681

Total sales
Segment income

256,840
24,332

114,449
16,70817,858429

16,123
4,319

405,270
45,788Segment assets

233,548

82,177

15,04548,943379,713

9,587
33
26

2,998
0
－

465
0
62

2,410
–
–

15,46033
88

13,069

4,322

177

647

18,215

Other
Depreciation and amortization
Interest income
Interest expense
Increase in tangible and intangible
fixed assets(4) Reconciliations between the reporting segment total and the amounts presented in the
consolidated financial statements.
a) Segment income
Year ended March 31,
2022
2021
(Millions of(Millions of
yen)
yen)
Reporting segments

Year ended
March 31,
2022
(Thousands of
U.S. dollars)¥ 5,604¥ 3,363

Unallocated amounts

(550)

(447)

(4,492)

Other

(177)

(96)

(1,444)¥ 4,877¥ 2,820$ 39,852

Consolidated$ 45,788

Notes:
Included in the “Unallocated amounts” above are unallocable operating expenses whichprimarily relate to research and development expenses incurred over the entire Group
as part of the Company’s research and development activities.

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Financial Section

21. Segment Information (continued)b) Segment assets
As of March 31,
2022
2021
(Millions of(Millions of
yen)
yen)
Reporting segments¥ 46,473

Unallocated amounts
Consolidated

As ofMarch 31,
2022
(Thousands of
U.S. dollars)¥ 42,240$ 379,713

22,381

16,054

182,869¥ 68,854¥ 58,294$ 562,582

Notes:
Included in the “Unallocated amounts” above are unallocable assets which primarily
consist of surplus funds (cash and bank deposits) and investment funds (investment
securities) owned by the Company and deferred tax assets.
c) OtherYear ended March 31, 2022

Depreciation and amortization
Interest income
Interest expense
Increase in tangible andintangible fixed assets

Reportingsegments

Adjustment
amount¥ 1,892
4
11(Millions of yen)
¥
–
0
79

2,229

Consolidated¥ 1,892
4
90

–

2,229

Reportingsegments

Adjustment
amountConsolidated(Thousands of U.S. dollars)$ 15,460$–$ 15,460
33
1
34
88
648
736
18,215–

18,215

Year ended March 31, 2021

Depreciation and amortization
Interest income
Interest expense
Increase in tangible andintangible fixed assets

Reportingsegments

Adjustment
amountConsolidated¥ 1,667
5
12(Millions of yen)
¥
–
0
82

¥ 1,667
5
94

1,242

–

1,242

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Financial Section

21. Segment Information (continued)② Related information(1) Information by each product and service
Information by each product and service is omitted because equivalent information has
been disclosed in segment information.
(2) Information by geographical areaa) SalesYear ended March 31, 2022
Japan

¥ 16,205

Northeastern Asia
Other
(Millions of yen)
¥ 31,971¥ 1,096

Total¥ 49,272

Year ended March 31, 2021
Japan

¥ 14,255

Northeastern Asia
Other
(Millions of yen)
¥ 30,041

¥ 498

Total

¥ 44,794

Year ended March 31, 2022
Japan

Northeastern Asia

Other

Total

(Thousands of U.S. dollars)$ 132,404$ 261,230$ 8,955$ 402,589

Notes:
Sales are based on the location of customers, classified by country or region.
b) Tangible fixed assets
As of March 31, 2022
Japan

¥ 10,817

Northeastern Asia
(Millions of yen)
¥ 18

Total

¥ 10,835

As of March 31, 2021
Japan

Northeastern Asia

Total

(Millions of yen)
¥ 10,753¥ 8¥ 10,761

As of March 31, 2022
Japan

$ 88,389

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Northeastern Asia
(Thousands of U.S. dollars)
$ 143

Total

$ 88,532

50

Financial Section

21. Segment Information (continued)c) Information by main customer
Year ended March 31, 2022: Not applicableYear ended March 31, 2021:Not applicable③ Impairment losses on fixed assets by reporting segment
Year ended March 31, 2021: Not applicableYear ended March 31, 2022
(Millions of yen)
Fine mechatronics¥ 214
Year ended March 31, 2022
(Thousands of U.S. dollars)Fine mechatronics$ 1,752④ Depreciation and remaining balance of goodwill by reporting segment
Year ended and as of March 31, 2022: Not applicableYear ended and as of March 31, 2021: Not applicable⑤ Gain on negative goodwill by reporting segment
Year ended March 31, 2022: Not applicableYear ended March 31, 2021: Not applicable

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Financial Section

22. Cash and Cash Equivalents
Reconciliations of cash and cash equivalents as of March 31, 2022 and 2021 between theamounts shown in the consolidated balance sheets and the consolidated statements of cash
flows are as follows:
As of March 31,
2022
2021
(Millions of(Millions of
yen)
yen)
Cash and time deposits

As ofMarch 31,
2022
(Thousands of
U.S. dollars)¥26,316¥ 19,601$ 215,020

(15)

(15)

(121)

¥ 26,301¥ 19,586$ 214,898

Time deposits with maturities inexcess of three months
Cash and cash equivalents

23.

Non-cash Transactions

Lease assets and lease obligations recorded relating to lease transactions were ¥4 million and¥4 million, respectively for the year ended March 31, 2022. In addition, in the fiscal year
ended March 31, 2021, it was 6 million yen and 6 million yen, respective.
24.

Selling, General and Administrative Expenses

For the years ended March 31, 2022 and 2021, major selling, general and administrative
expenses are summarized as follows:Year ended March 31,
2021
2022
(Millions of yen)
Packing and delivery expenses
Sales commissions
Advertising expenses
Employees’ salaries and allowances
Provision for director’s bonuses
Provision of allowance for doubtful
accounts
Retirement benefit expenses
Provision for directors’ retirement
benefits
Depreciation
Rent expenses
Research and development expenses

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¥ 95
363
12
5,433
63
189

¥ 79
391
9
4,918
38

297

369
359

2
1,396
103
2,634

1
1,145
88
2,493

Year ended
March 31,
2022
(Thousands of
U.S. dollars)
$ 779
2,964
99
44,395
514
1,540
2,426
20
11,406842
21,52552

Financial Section

25. Business structure improvement expenses
The Business structure improvement expenses for the year ended March 31,2022 are as
follows :Expenses associated with the demolition of an aged building as part of theredevelopment of the Yokohama Office, which consisted of 399 million yen ($3,258
thousand) in building demolition costs and 214 million yen ($1,752 thousand) in
impairment losses.
Details of impairment losses are as follows.

Use

Location

Classification

Yokohama Office Building No.1

Buildings andKanagawa Pref. 247-8610, JAPAN

OthersBusiness
2-5-1, Kasama, Sakae-ku, Yokohama, structures
assetsAmount of money(Thousands(Millionsofof yen)U.S.dollars)
214

1,751

0

1

(Background of the impairment loss)
At the Board of Directors meeting on May 31, 2021, the Company resolved to demolish anaged building in the Yokohama Office, so the book value of the asset was reduced to therecoverable amount, and the reduced amount was presented as Business structure
improvement expenses in the extraordinary loss in the prior year.
(Grouping method)
The Company groups long-lived assets into asset groups mainly business segments for whichinvestment decisions are made. The subsidiaries are grouped on a company-by-company
basis in consideration of their size and other factors. Idle assets or assets for which a decision
has been made to dispose and no alternative investments are planned are classified intoanother asset group.
(Method for calculating recoverble amount)
The recoverable amount is calculated based on the net realizable value which is evaluated aszero.
26. Related Party Transactions
Year ended and as of March 31, 2021: Not applicableYear ended and as of March 31, 2020:Not applicable

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Financial Section

27.

Per Share Information

Basic net income per share is computed based on the net income available for distribution toshareholders of common stock and the weighted-average number of shares of common stock
outstanding during each year. Diluted net income per share is computed based on the net
income available for distribution to the shareholders and the weighted-average number ofshares of common stock outstanding during each year, assuming full dilution of common
stock equivalents. Net assets per share are computed based on the weighted-average numberof shares of common stock outstanding at each balance sheet date.
As of March 31,
2022
2021
(Yen)
Net income:– Basic
Net assets¥ 675.41
5,571.64¥ 446.18
4,949.41

As ofMarch 31,
2022
(U.S. dollars)$ 5.5245.52

Notes:The information regarding diluted net income per share for the years ended March 31, 2022
and 2021 is omitted because there was no stock with dilutive effect.
The weighted average number of shares of common stock outstanding excludes treasury
stock shares held by the Company. Treasury stock shares held in trust as a performance-based
stock compensation plan for the Company’s directors and executive officers, are included inthose treasury stock shares for the years ended March 31, 2022 and 2021.
The basis of calculating net income per share were as follows:
As ofMarch 31,
2022
(Thousands of
U.S. dollars)
1,970$ 24,375

As of March 31,
2022
2021
(Millions of yen)
Net income
Net income attributable to non-controllinginterests
Net income attributable to owners of parent
Weighted average number of shares ofcommon stock outstanding

¥

2,983

¥

2,983
1,970
(Thousand shares)
4,417

24,375

4,414

28. Significant subsequent event
Not applicable

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Financial Section

Independent Auditor’s Report
To the Board of Directors of Shibaura Mechatronics Corporation
OpinionWe have audited the consolidated financial statements of Shibaura Mechatronics Corporation and its
consolidated subsidiaries (the Group), which comprise the consolidated balance sheet as at March 31,
2022, and the consolidated statement of operations, consolidated statement of comprehensive income,consolidated statement of changes in net assets and consolidated statement of cash flows for the year
then ended, and notes to the consolidated financial statements.
In our opinion, the accompanying consolidated financial statements present fairly, in all material
respects, the consolidated financial position of the Group as at March 31, 2022, and its consolidated
financial performance and its consolidated cash flows for the year then ended in accordance withaccounting principles generally accepted in Japan.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the
Audit of the Consolidated Financial Statements section of our report. We are independent of theGroup in accordance with the ethical requirements that are relevant to our audit of the consolidated
financial statements in Japan, and we have fulfilled our other ethical responsibilities in accordancewith these requirements. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the consolidated financial statements of the current period. These matters were addressedin the context of our audit of the consolidated financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters.

PricewaterhouseCoopers Aarata LLC
Otemachi Park Building, 1-1-1 Otemachi, Chiyoda-ku, Tokyo 100-0004, Japan
T: +81 (3) 6212 6800, F: +81 (3) 6212 6801, www.pwc.com/jp/assurance
SHIBAURA MECHATRONICS CORPORATION
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Financial Section

Collectability of contract assets under the input method
Key audit matter description
How our audit addressed the key audit matter
The Group manufactures and sells semiconductor We performed the following principal audit
and flat panel display (“FPD”) manufacturing
procedures to address the collectability ofequipment. As of March 31, 2022, the Group
contract assets under input method:
recorded contract assets related to its contracts
with customers which are recognized in· We evaluated the design and implementationaccordance with the input method of 18,708
and tested the operating effectiveness of themillion yen and an allowance for doubtful
Group's internal controls over the collectability
accounts of 1,526 million yen against theseof contract assets under the input method,
receivables in the consolidated financial· We performed following procedures to assessstatements.
the effectiveness of the management’s process
to evaluate the collectability of contract assets:
As described in Notes to Consolidated Financial- We inquired with management regarding
Statements, 3. Significant Accounting Estimates,
the economic environments of the(1) Allowance for doubtful accounts, generally,
semiconductor and FPD business and thethe Group manages its credit risk for contract
net realizable value of the assets underassets by receiving cash in advance and using
construction,
letters of credit. However, due to changes in the- For contract assets related to contracts
economic environment in China and Taiwan,
under input method that are overdue forwhere the Group's customers are concentrated, as
the expected acceptance date, we inquired
well as changes in the supply and demand ofwith the executive general manager ofelectronic products which use semiconductors
each business regarding the status of theand FPDs, the Group's customers may delay
project and read the minutes of meetings
investment plans for manufacturing lines andrelated to project management to examine
their payment schedules. As a result, the timing
the customer's investment plan and theof collection of contract assets under the input
Group's response,
method may be delayed from the initial expected· We inspected the results of the Group's
collection date. In addition, because the Group's
evaluation of the customer's credit standing
products are equipped with cutting-edge
and the net realizable value of assets undertechnologies for semiconductor and FPD
construction,
manufacturing, unexpected defects may occur· We verified the customer acceptance and cash
and the timing of customer acceptance may result
receipts from the customer after the balance
in delays to the project and therefore payment.
sheet date.
Consequently, the Group distinguishes general
receivables from doubtful ones by considering the
progress of the project, the delay in customer
financing and plant construction, the credit statusof the customer, and the expected timing ofcollection.
Although the Group examines the reasons for thechange in the expected timing of collection ofcontract assets and reflects it in its assessment ofcollectability, the assessment of the collectabilityof contract assets related to contracts under the
input method depends on management
judgment. We determined that the collectabilityof contract assets related to contracts under the
input method was a key audit matter.

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Estimation of total costs used in the input method for performance obligations satisfied over time
Key audit matter description
How our audit addressed the key audit matter
As described in Notes to Consolidated Financial We performed the following principal audit
Statements, 3. Significant Accounting
procedures to address the estimation of total
Estimates, (2) Estimated total costs used in thecosts on input method contracts:
input method, the Group recognizes revenue
over time from contracts for the manufacture· We evaluated the design and implementationand installation of machinery and equipment
and tested the operating effectiveness of thethat cannot be diverted to other uses based onGroup's internal controls over the estimation
the customer contracts. The Group recordedof total costs at the timing of project
revenue of 26,309 million yen for the current
commencement and monitoring thosefiscal year for these contracts based on the input
estimates for revisions during construction,
method to measure satisfaction of a
· We performed following procedures to assess
performance obligation completed over time, as
the effectiveness of the management’s processof the end of the consolidated fiscal year. The
to evaluate the estimation of total costs:
progress is measured by the input method- We compared and analyzed thecomparing the costs incurred up to the end of
estimated total cost at the end of thethe current consolidated fiscal year to theprevious consolidated fiscal year to theestimated total costs.
actual incurred cost at the completion ofprojects in the current consolidated fiscal
Estimated total costs for each contract are
year,
determined based on a variety of factors- We examined whether estimated total(inputs) including specifications, bill ofcosts for ongoing projects changed aftermaterials required, and actual costs incurred forthe balance sheet date but prior to thesimilar contracts in the past. Contracts for theissuance of our report,
manufacture and installation of machinery and· We observed activities at the Group’s
equipment that cannot be diverted to other uses
manufacturing plants to examine that thebased on the customer contacts are defined
physical progress was consistent with thebased on customer requirements with
progress rate for the input method,
specifications, and contractual obligations are· For projects under construction as of the end
highly customized. In addition, most of theof the current consolidated fiscal year, we
contracts are satisfied over long periods. As a
selected projects based on materiality andresult, the estimated total costs may change due
compared the estimated total costs with theto the incurrence of additional manufacturing
actual costs incurred for similar projects intime and effort and other costs to finalize thethe past. In addition, we evaluated the
product to meet specifications to satisfy
expected manufacturing costs as a proportion
customer requirements that are not initiallyof the total estimated total costs as compared
expected.
to the assembly schedule and similar projects
completed previously to ensure
The estimation of manufacturing costs to satisfy
reasonableness.
customer requirements on the input method
involves a high degree of uncertainty anddepends on management judgement.
Therefore, we determined the estimation of
total costs on input method contracts for
performance obligations satisfied over time wasa key audit matter.

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Financial Section

Recoverable period of the deferred tax assets assumed for the consolidated tax group in Japan
Key audit matter description
How our audit addressed the key audit matter
As described in Notes to Consolidated Financial
We performed the following principal audit
Statements, 3. Significant Accounting Estimates,
procedures to ensure the reasonableness of the(3) Recoverability of deferred tax assets, therecoverable period of the deferred tax assets
Group applies the tax consolidation rules
for the consolidated tax group in Japan:
applicable in Japan. The Group records deferred
tax assets related to corporate tax under the tax· We evaluated the design andconsolidation rules in Japan of 776 million yen as
implementation and tested the operatingof March 31, 2022 in the consolidated financial
effectiveness of the Group's internal controls
statements.
over the recoverability of deferred tax
assets,The Group evaluates if deferred tax assets are· We performed following procedures torecoverable based on future taxable profit before
assess the effectiveness of the management’s
temporary differences and deductions. The
process to determine the recoverable period
Group determined that the reasonable futureof the deferred tax assets:
estimated taxable income period is one year for- We understood management’s decision
the following reasons:process for the budget and mid-term
management plan, and inquired with· The Group has customer contracts with an
management on the uncertainty in theunfulfilled order backlog scheduled for delivery
plans,
over periods ranging between six months and- We compared current year budget
one year,against the actual result, and the mid· The Group manufactures and sells
term management plan against thesemiconductors and FPD manufacturing
actual result,equipment, for which future estimates of· We also performed following procedures totaxable income for periods exceeding moreassess the reasonableness of the futurethan one year are subject to volatility inestimated taxable income perioddemand,determined by the Group:· Long-term demand of manufacturing- We verified the recoverability of theequipment is subject to uncertainty due todeferred tax assets are developed based
market expansion and rapid advances in new
on the following year’s budget
technologies for the electronics products.
approved by the board,- We compared and analyzed the
In its assessment of the recoverability of deferredfluctuation of taxable income in priortax assets, there is management judgment toyears and verified the changes due todetermine the reasonable future estimatedthe volatility in demand,- We inspected contracts and purchasetaxable income period. We determined that theorders from the Group’s customers torecoverable period of the deferred tax assets forvalidate the existence of the unfulfilled
the consolidated tax group in Japan was a keyorder backlog scheduled for delivery
audit matter.
over periods ranging between six
months and one year at the end of thecurrent fiscal year.

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Financial Section

Other Information
The other information comprises the information included in the Annual report, but does not include
the consolidated financial statements and our auditor’s report thereon. Management is responsible forthe other information. In addition, those charged with governance are responsible for overseeing
the Group’s reporting process of the other information.
Our opinion on the consolidated financial statements does not cover the other information and we do
not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read theother information and, in doing so, consider whether the other information is materially inconsistent
with the consolidated financial statements or our knowledge obtained in the audit or otherwise
appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of thisother information, we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of Management and Those Charged with Governance for theConsolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with accounting principles generally accepted in Japan, and for such internal
control as management determines is necessary to enable the preparation of consolidated financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing theGroup’s ability to continue as a going concern and disclosing, as applicable, matters related to going
concern.
Those charged with governance are responsible for overseeing the Group’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to issue anauditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is nota guarantee that an audit conducted in accordance with auditing standards generally accepted inJapan will always detect a material misstatement when it exists. Misstatements can arise from fraud
or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these consolidated financial
statements.
As part of an audit in accordance with auditing standards generally accepted in Japan, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:• Identify and assess the risks of material misstatement of the consolidated financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks, andobtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The riskof not detecting a material misstatement resulting from fraud is higher than for one resulting fromerror, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or theoverride of internal control.

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Financial Section• Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, while the purpose of the consolidated
financial statement audit is not to express an opinion on the effectiveness of the Group’s internal
control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the Group’s ability to continue as a going concern.
If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’sreport to the related disclosures in the consolidated financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to
the date of our auditor’s report. However, future events or conditions may cause the Group to cease
to continue as a going concern.
• Evaluate whether the presentation and disclosures of the consolidated financial statements are inaccordance with accounting principles generally accepted in Japan, the overall presentation,
structure and content of the consolidated financial statements, including the disclosures, andwhether the consolidated financial statements represent the underlying transactions and events ina manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities orbusiness activities within the Group to express an opinion on the consolidated financial statements.
We are responsible for the direction, supervision and performance of the group audit. We remainsolely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies ininternal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence, and to communicate with them all relationships andother matters that may reasonably be thought to bear on our independence, and where applicable,
related safeguards.
From the matters communicated with those charged with governance, we determine those mattersthat were of most significance in the audit of the consolidated financial statements of the current
period and are therefore the key audit matters. We describe these matters in our auditor’s report
unless law or regulation precludes public disclosure about the matter or when, in extremely rare
circumstances, we determine that a matter should not be communicated in our report because theadverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
Convenience translation
The U.S. dollar amounts in the accompanying consolidated financial statements with respect to theyear ended March 31, 2022 are presented solely for convenience. Our audit also included thetranslation of Japanese yen amounts into U.S. dollar amounts and, in our opinion, such translation
has been made on the basis described in Note 1 to the consolidated financial statements.

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Financial Section

Interest required to be disclosed by the Certified Public Accountants Act of Japan
Our firm and its designated engagement partners do not have any interest in the Group which is
required to be disclosed pursuant to the provisions of the Certified Public Accountants Act of Japan.

自動署名 EL

自動署名 Co1

Nobuhiro Nasu

Takahiro Ohara

Designated Engagement Partner
Certified Public Accountant

Designated Engagement Partner
Certified Public Accountant

September 20, 2022

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Directors, Vice Presidents and Auditors
As of June 23, 2022

Directors and Vice Presidents
Keigo Imamura

Hisashi Shindo

Representative Director

Executive Vice President

President and Chief Executive Officer

Executive General Manager of Marketing & Sales Division

Kenichi Ikeda

Tomomi Harano

Director

Vice President

Executive Vice President and Chief Financial Officer

Deputy Executive General Manager of Fine Mechatronics

Executive General Manager of Corporate Management Division

Division

Yoshiaki Kurokawa

Shigeru Sakata

Director

Vice President

Senior Vice President

Deputy Executive General Manager of Mechatronics System

Executive General Manager of Fine Mechatronics Division

Division		

Kazutoshi Horiuchi

Shinichi Ogimoto

Director

Vice President

Senior Vice President

Executive General Manager of Production & Procurement

Executive General Manager of Mechatronics System Division

Division		

Tomoko Inaba
Outside Director

Hiroshi Nishimura
Vice President
Executive General Manager of Technology & Development

Yuichiro Takada

Division

Outside Director

Auditors
Yasuhiko Yamato
AuditorKazuya Kaneko
Outside Auditor

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SHIBAURA MECHATRONICS CORPORATION
Annual Report 2022

Kazumasa Uchida
Outside Auditor

Hiroyuki Matsumoto
Outside Auditor

Investor Information
As of March 31, 2022

Date Established

October 12, 1939

Capital6,762Million-Yen

Number of Employees

Consolidated

Common Stock: 1,204

Authorized			: 10,000,000 shares

Issued and outstanding : 5,192,619 shares

Number of Shareholders

5,115

Stock Listings

The Tokyo Stock Exchange (Code : 6590)

Transfer Agent for
Common Stock

Sumitomo Mitsui Trust Bank, Limited

Independent Auditor

PricewaterhouseCoopers Aarata LLC

Headquarters

2-5-1, Kasama, Sakae-ku, Yokohama, Kanagawa Pref. 247-8610, Japan
TEL : +81-45-897-2421 FAX : +81-45-897-2470

1-4-1, Marunouchi, Chiyoda-ku, Tokyo, Japan

https://www.shibaura.co.jp/

Common Stock Price Range (The Tokyo Stock Exchange)
Year ended March 31,

2022

2021

2020

2019

2018

High (yen)10,020

6,050

4,655

4,350(484)528

Low (yen)

5,500

2,050

2,052

3,040(334)240

Note : With an effective date of October 1, 2018, the Company conducted a stock consolidation at a ratio of one share for every 10 shares of common stock. Stock prices
for March 2019 list the highest and lowest stock prices recorded after the stock consolidation, and figures in parentheses indicate the highest and lowest stock prices
prior to the share consolidation.

Principal Shareholders
Number of shares hold

Percentage of total shares outstanding(thousand shares)(%)

Toshiba Corporation

519

11.73

The Master Trust Bank of Japan, Limited (trust accounts)

453

10.24

Shin-Etsu Engineering Co., Ltd.

259

5.86

NuFlare Technology, Inc.

259

5.86

SHIBAURA MECHATRONICS CORPORATION
Annual Report 202263

2-5-1, Kasama, Sakae-ku, Yokohama, Kanagawa Pref.
247-8610, JAPANTEL ：+81-45-897-2421
FAX ：+81-45-897-2470
https://www.shibaura.co.jp/

SKB0324B 2209
EDC220048