Translation
Notice: This document is an excerpt translation of the original Japanese document and is only for reference purposes. In the event of any
discrepancy between this translated document and the original Japanese document, the latter shall prevail.

Summary of Consolidated Financial Results
for the Year Ended March 31, 2021
(Based on Japanese GAAP)May 11, 2021
Company name:Howa Machinery, Ltd.

Stock exchange listing: Tokyo, Nagoya
Stock code:
6203
URL
Representative:
Inquiries:

https://www.howa.co.jp/

President,Managing Director
Managing Director

Takahiro Tsukamoto
Hiromitsu Ishihara

Scheduled date of ordinary general meeting of shareholders:
Scheduled date to file Securities Report:

June 25, 2021
June 25, 2021

Scheduled date to commence dividend payments:
Preparation of supplementary material on financial results:

June 28, 2021
Yes

Holding of financial results meeting:

Yes

TEL

052-408-1001(for institutional investors and analysts)(Amounts less than one million yen are rounded down)

1. Consolidated financial results for the year ended March 31, 2021 (from April 1, 2020 to March 31, 2021)(1) Consolidated operating results
Percentages indicate year-on-year changes
Profit attributable toNet sales
Operating profit
Ordinary profit
owners of parent
Millions of yen% Millions of yen% Millions of yen% Millions of yen%
Year ended March 31, 2021
18,765(7.7)
554 (28.6)
918
12.0
968
63.9
Year ended March 31, 2020
20,321(9.0)
776 (25.2)
820(26.0)591(47.8)

Earnings per share

Profit attributable toOrdinary profit/total Operating profit/net
owners ofassets
sales
parent/equity
Yen%%%–
6.2
3.6
3.0
–
3.9
3.4
3.8

Diluted earnings pershare

Yen
78.1847.75

Year ended March 31, 2021
Year ended March 31, 2020
(2) Consolidated financial position

Total assets
As of March 31, 2021
As of March 31, 2020

Net assets

Equity ratio

Millions of yen
26,461
24,114

Millions of yen
16,114
14,991

Cash flows fromoperating activities
Millions of yen(1,270)
1,192

Cash flows frominvesting activities
Millions of yen(635)(1,052)

Net assets per share%
60.9
62.2

Yen
1,299.91
1,210.30(3) Consolidated cash flows

Year ended March 31, 2021
Year ended March 31, 2020

Cash flows from
Cash and cash equivalents
at end of period
financing activities
Millions of yen
Millions of yen
1,881
3,427
35
3,445

2. Cash dividends
Annual dividends per share
1st quarter-end 2nd quarter-end 3rd quarter-end Fiscal year-end

Year ended March 31, 2020
Year ended March 31, 2021
Year ending March 31, 2022
(Forecast)of dividends
Total cash
Dividend payout Ratio
to net assets
dividends (Total) ratio (Consolidated) (Consolidated)

Total

Yen

Yen

Yen

Yen

Yen

Millions of yen

%%

––

0.00
0.00

––

20.00
20.00

20.00
20.00

247
247

41.9
25.6

1.61.6–0.00

–

20.00

20.00

165.2

3. Forecast of consolidated financial results for the year ending March 31, 2022 (from April 1, 2021 to March 31, 2022)
Net sales
Full year

Millions of yen
18,600Percentages indicate year-on-year changes
Profit attributable toOperating profit
Ordinary profit
Earnings per shareowners of parent% Millions of yen% Millions of yen% Millions of yen%Yen(0.9)
430 (22.5)
450 (51.0)
380 (60.8)
30.66

4. Notes(1) Changes in significant subsidiaries during the year ended March 31, 2021
(changes in specified subsidiaries resulting in the change in scope of consolidation):No(2) Changes in accounting policies, changes in accounting estimates, and restatement of prior period financial statements
Changes in accounting policies due to revisions to accounting standards and other regulations:
Changes in accounting policies due to other reasons:

No
No

Changes in accounting estimates:
Restatement of prior period financial statements:

YesNo(3) Number of issued shares (common shares)
Total number of issued shares at the end of the period (including treasury shares)
As of March 31, 2021

12,548,134 shares As of March 31, 2020

12,548,134 shares

Number of treasury shares at the end of the period
As of March 31, 2021

151,179 shares As of March 31, 2020

163,798 shares

12,393,783 shares Year ended March 31, 2020

12,384,485 shares

Average number of shares during the period
Year ended March 31, 20212

Consolidated financial statements
Consolidated balance sheets(Millions of yen)
As of March 31, 2020

As of March 31, 2021

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade

3,514
6,131

3,462
5,536

Electronically recorded monetary claims - operating
Investments in leases

1,400–

3,218
1,159

Merchandise and finished goods
Work in process

121
4,747

246
4,203

400
298

427
341

Raw materials and supplies
Other
Allowance for doubtful accounts

(0)

(0)

16,614

18,595

11,878

11,711

Accumulated depreciation(9,439)(9,587)

Buildings and structures, net

2,439

2,123

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

Machinery, equipment and vehicles

12,475

12,601

Accumulated depreciation(11,774)(11,835)

Machinery, equipment and vehicles, net

700

766

1,671

1,741(1,541)(1,607)

130

133

Land

549

549

Leased assets
Accumulated depreciation

9(6)

9(8)

2

1Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net

Leased assets, net
Construction in progress

521

210

4,343

3,784

Software in progress
Other–
45

256
54

Total intangible assets

45

310

Investments and other assets
Investment securities

2,580

3,185

Retirement benefit asset
Other–
574

114
511

Allowance for doubtful accounts

(43)

(40)

Total property, plant and equipment
Intangible assets

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

3

3,111

3,770

7,500

7,865

24,114

26,461

(Millions of yen)
As of March 31, 2020

As of March 31, 2021

Liabilities
Current liabilities
Accounts payable - trade

2,667

2,322

Electronically recorded obligations - operating
Short-term borrowings

526
748

381
1,799

Lease obligations
Accounts payable - other1235

1293

Accrued expenses
Income taxes payable

784
73838
134

Accrued consumption taxes
Provision for bonuses

232
330

20315Provision for loss on construction contracts
Provision for environmental safety measures

257

13–

Other

191

113

5,852

6,233

Long-term borrowings
Lease obligations

1,281
1

2,354
0

Deferred tax liabilities
Retirement benefit liability

202
1,084

157
1,065

Asset retirement obligations
Other

89
611

91
444

Total non-current liabilities

3,270

4,112

9,122

10,346

Shareholders' equity
Share capital

9,019

9,019

Retained earnings
Treasury shares

5,551
(152)

6,271
(140)

Total shareholders' equity

14,41815,150

446

866

1102

(3)
101

Total current liabilities
Non-current liabilities

Total liabilities
Net assets

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans

18(1)Total accumulated other comprehensive income

570

964

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

42–

14,991

16,114

24,114

26,461

Consolidated statements of income and consolidated statements of comprehensive income
Consolidated statements of income(Millions of yen)Fiscal year ended
March 31, 2020

Fiscal year ended
March 31, 2021

Net sales

20,321

18,765

Cost of sales

16,41915,282Gross profit

3,901

3,483

Selling, general and administrative expenses

3,125

2,928

776

554

00

Dividend income
Insurance claim income

116
23104
7

Subsidy income
Miscellaneous income

140

298
34

Total non-operating income

181

445

511

Financing commission fee
Insurance expenses

29
19019

Maintenance cost for idle assets
Foreign exchange losses

2229

19
4

Miscellaneous losses

3026

Total non-operating expenses

13881820

918

–

79

Gain on sale of non-current assets
Gain on revision of retirement benefit plan

42015–

Subsidies for employment adjustment
Reversal for environmental safety measures–2945–

Other

0

3

Total extraordinary income

54

143

Loss on product safety measures
Impairment losses

1164

–
2

Loss related to COVID-19
Farewell ceremony expenses

–
23110
–

Loss on valuation of investment securities
Other

60
15–
2

Total extraordinary losses

175

115

Profit before income taxes

699

946

Income taxes - current
Income taxes - deferred114(1)

170(193)

Total income taxes

112

(22)

Profit586

968

Loss attributable to non-controlling interests

(4)

(0)

Profit attributable to owners of parent

591

968

Operating profit
Non-operating income
Interest income

Non-operating expenses
Interest expenses

Ordinary profit
Extraordinary income
Gain on sale of investment securities

Extraordinary losses

5Consolidated statements of comprehensive income(Millions of yen)

ProfitOther comprehensive income

Fiscal year ended

Fiscal year ended

March 31, 2020

March 31, 2021
586

968

Valuation difference on available-for-sale securities
Deferred gains or losses on hedges

(464)
1420
(4)

Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax

(0)
(160)

(0)
(20)

Total other comprehensive income

(624)

394

(37)

1,363

(33)

1,363

(4)

(0)

Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests

6Consolidated statements of changes in equity
Fiscal year ended March 31, 2020
(Millions of yen)
Shareholders' equity
Share capital
Balance at beginning ofperiod

Capital surplus

9,019

Retained earnings
0

Total shareholders'equity

Treasury shares

5,207

(151)

14,075

Changes during period
Dividends of surplus

(247)

(247)

Profit attributable toowners of parent

591

591

Purchase of treasury
shares
Disposal of treasury
shares

(0)

(0)

(0)

(0)

00

Net changes in items
other than shareholders'equity–Total changes during
periodBalance at end of period

–

(0)

343

(0)

343

9,019

–

5,551

(152)

14,418

Accumulated other comprehensive income

Balance at beginning ofperiod

Valuationdifference onavailable-forsale securities

Deferred gains
or losses onhedges

911

(0)

Total
accumulated
otherof defined benefit
comprehensive
plansincomeForeigncurrencytranslation
adjustment

Remeasurements

103

179

1,194

Non-controllinginterests

Total net assets

915,279Changes during period
Dividends of surplus

–

(247)

Profit attributable toowners of parent–

591

Purchase of treasury
shares–(0)

Disposal of treasury
shares–0

Net changes in items
other than shareholders'equity

(464)

1(0)

(160)

(624)

(6)

(631)

Total changes during
period(464)1(0)

(160)

(624)

(6)

(287)

Balance at end of period446110218570

2

14,991

7Fiscal year ended March 31, 2021
(Millions of yen)
Shareholders' equity
Share capital
Balance at beginning ofperiod

Retained earnings

9,019

Total shareholders'equityTreasury shares

5,551

(152)

14,418Changes during period
Dividends of surplus

(247)

(247)

Profit attributable toowners of parent

968

968

Restricted stock
payment

1111

Purchase of treasury
shares

(0)

(0)

0(1)

Disposal of treasury
shares(1)

Net changes in items
other than shareholders'equity–Total changes during
periodBalance at end of period

–

719

11731

9,019

6,271

(140)

15,150

Accumulated other comprehensive income

Balance at beginning ofperiod

Valuationdifference on
available-forsale securities

Deferred gains
or losses onhedges

446

1

Total
accumulatedof defined benefit
othercomprehensiveplansincomeForeigncurrencytranslation
adjustment

Remeasurements

102

18570

Non-controllinginterests

Total net assets

2

14,991

Changes during period
Dividends of surplus–(247)

Profit attributable toowners of parent–

968Restricted stock
payment–

11

Purchase of treasury
shares–(0)

Disposal of treasury
shares–(1)

Net changes in items
other than shareholders'equity

420

(4)

(0)

(20)

394

(2)

391

Total changes during
period

420

(4)

(0)

(20)

394

(2)

1,123

Balance at end of period

866

(3)

101

(1)

964

–

16,1148

Consolidated statements of cash flows(Millions of yen)

Cash flows from operating activities
Profit before income taxes

Fiscal year ended

Fiscal year ended

March 31, 2020

March 31, 2021
699

946

Depreciation
Impairment losses

47564455
2

Subsidy income
Subsidies for employment adjustment(1)–(298)(45)

Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses

(18)
(12)

(2)
(14)

Decrease (increase) in retirement benefit asset
Increase (decrease) in retirement benefit liability

–
(803)

(114)
(38)

Increase (decrease) in accrued payments due to change inretirement benefit plan

450

(182)

Increase (decrease) in demolition expenses for non-current
assets(17)–

Increase (decrease) in provision for loss on construction
contracts(24)11Increase (decrease) in provision for environmental safetymeasures

(29)

(57)

Interest and dividend income
Interest expenses(116)
5(105)
11

Financing commission fee
Loss (gain) on valuation of investment securities

2960

0–

Loss (gain) on sale of investment securities
Foreign exchange losses (gains)

–
2(79)
(0)

Loss (gain) on sale of property, plant and equipment
Loss (gain) on disposal of property, plant and equipment

(3)
5(15)
1

Decrease (increase) in trade receivables
Decrease (increase) in investments in leases

943–(1,221)(509)

Decrease (increase) in inventories
Increase (decrease) in trade payables

(580)
72

391
(498)

Increase (decrease) in accrued consumption taxes
Decrease (increase) in other current assets

209
(49)

(211)
(37)

Increase (decrease) in other current liabilities
Other, net

(36)
(39)

(30)
46

Subtotal

1,286(1,596)

Interest and dividends received
Subsidies received

116
1105
327

Interest paid
Income taxes paid

(5)
(206)

(12)
(94)

Net cash provided by (used in) operating activities

1,192(1,270)9

(Millions of yen)Cash flows from investing activities
Payments into time deposits

Fiscal year ended

Fiscal year ended

March 31, 2020

March 31, 2021
(60)

(57)

54(981)72(580)

Proceeds from sale of property, plant and equipment
Purchase of intangible assets

1(7)17(173)Purchase of investment securities
Proceeds from sale and redemption of investment securities(7)
4(314)
380

Purchase of shares of subsidiaries
Proceeds from collection of loans receivable

(40)
10–
25

Loan advances
Other, net(25)
(1)

–(5)

Net cash provided by (used in) investing activities(1,052)(635)

Cash flows from financing activities
Net increase (decrease) in short-term borrowings

(20)

1,000

Proceeds from long-term borrowings
Repayments of long-term borrowings

969
(643)

1,799
(676)

Net decrease (increase) in treasury shares
Dividends paid

(0)
(247)

10(247)

Dividends paid to non-controlling interests
Repayments of lease obligations

(2)
(20)

(2)
(1)

Net cash provided by (used in) financing activities

35

1,881

Proceeds from withdrawal of time deposits
Purchase of property, plant and equipmentEffect of exchange rate change on cash and cash equivalents(5)

7

Net increase (decrease) in cash and cash equivalents

169(18)Cash and cash equivalents at beginning of period

3,275

3,445

Cash and cash equivalents at end of period

3,445

3,427

10