Consolidated Financial Statements

(Millions of yen)

Assets
  End of FY2021
(March 31, 2022)
End of FY2022
(March 31, 2023)
Current assets    
Cash and deposits 117,687 121,438
Notes receivable - trade 11,572 10,318
Accounts receivable - trade 116,601 133,654
Contract assets 58,155 65,297
Merchandise and finished goods 16,662 18,467
Work in process 4,584 4,932
Raw materials and supplies 21,758 25,006
Other 22,479 24,251
Allowance for doubtful accounts (5,304) (6,106)
Total current assets 364,195 397,261
Non-current assets    
Property, plant and equipment    
Buildings and structures, net 46,089 46,183
Machinery, equipment and vehicles, net 8,159 9,354
Tools, furniture and fixtures, net 6,144 6,550
Land 15,448 15,570
Leased assets, net 57 22
Right-of-use assets 8,083 8,097
Construction in progress 2,961 1,780
Total property, plant and equipment 86,943 87,559
Intangible assets    
Software 13,997 14,137
Goodwill 11,993 14,614
Other 12,472 19,782
Total intangible assets 38,463 48,534
Investments and other assets    
Investment securities 53,241 70,786
Deferred tax assets 7,154 8,921
Other 7,124 6,433
Allowance for doubtful accounts (1,154) (859)
Total investments and other assets 66,366 85,281
Total non-current assets 191,773 221,375
Total assets 555,968 618,637

(Millions of yen)

Liabilities
  End of FY2021
(March 31, 2022)
End of FY2022
(March 31, 2023)
Current liabilities    
Notes and accounts payable - trade 26,590 31,226
Electronically recorded obligations - operating 10,119 10,098
Short-term borrowings 1,576 20,475
Commercial papers 20,000 25,000
Accounts payable - other 19,046 18,741
Income taxes payable 5,926 6,472
Contract liabilities 41,124 45,837
Lease liabilities 2,758 2,219
Provision for bonuses 17,127 20,776
Provision for loss on construction contracts 6,499 7,380
Other 26,424 24,869
Total current liabilities 177,192 213,097
Non-current liabilities    
Long-term borrowings 24,095 4,087
Deferred tax liabilities 2,240 2,519
Retirement benefit liability 4,687 5,081
Lease liabilities 5,619 5,292
Other 1,792 1,732
Total non-current liabilities 38,435 18,713
Total liabilities 215,628 231,811
Net assets
  End of FY2021
(March 31, 2022)
End of FY2022
(March 31, 2023)
Shareholders' equity    
Share capital 43,401 43,401
Capital surplus 54,392 54,392
Retained earnings 221,431 251,277
Treasury shares (1,407) (1,410)
Total shareholders' equity 317,817 347,660
Accumulated other comprehensive income    
Valuation difference on available-for-sale securities 11,592 19,106
Deferred gains or losses on hedges - (98)
Foreign currency translation adjustment 5,137 13,812
Remeasurements of defined benefit plans (976) (854)
Total accumulated other comprehensive income 15,753 31,965
Non-controlling interests 6,769 7,200
Total net assets 340,340 386,825
Total liabilities and net assets 555,968 618,637

(Millions of yen)

  FY2021
(April 1, 2021-March 31, 2022)
FY2022
(April 1, 2022-March 31, 2023)
Net sales 389,901 456,479
Cost of sales 217,091 252,019
Gross profit 172,810 204,459
Selling, general and administrative expenses 142,142 160,050
Operating profit 30,668 44,409
Non-operating income    
Interest income 605 1,058
Dividend income 1,785 1,970
Foreign exchange gains 1,346 -
Share of profit of entities accounted for using equity method 3,128 3,374
Miscellaneous income 679 1,617
Total non-operating income 7,546 8,021
Non-operating expenses    
Interest expenses 684 1,091
Foreign exchange losses - 1,009
Provision of allowance for doubtful accounts 294 21
Commission expenses 244 332
Miscellaneous losses 1,252 1,365
Total non-operating expenses 2,475 3,821
Ordinary profit 35,739 48,608
Extraordinary income    
Gain on sale of non-current assets 33 526
Gain on sale of investment securities 58 834
Gain on step acquisitions - *1 1,066
Total extraordinary income 92 2,428
Extraordinary losses    
Loss on sale of non-current assets 1 5
Loss on retirement of non-current assets 372 432
Impairment losses *2 1,410 *2 558
Loss on valuation of investment securities 1,758 -
Loss on sale of shares of subsidiaries and associates 139 -
Business restructuring expenses *3 2,058 240
Total extraordinary losses 5,740 1,237
Profit before income taxes 30,092 49,799
Income taxes - current 8,165 11,662
Income taxes - deferred (1,732) (3,799)
Total income taxes 6,432 7,863
Profit 23,659 41,936
Profit attributable to non-controlling interests 2,392 3,015
Profit attributable to owners of parent 21,267 38,920

*1 Gain on Step Acquisitions
FY2022 (April 1, 2022-March 31, 2023)
This was recognized as a result of the step acquisition of shares of Yokogawa Fluence Analytics, Inc. (former Fluence Analytics Inc.).

*2 Impairment Losses
I. (Reference) FY2021 (April 1, 2021-March 31, 2022)
Impairment losses were recorded for the following asset groups.

Millions of yen

Location Use Category Impairment losses
Denmark Business assets Goodwill 1,084
Japan Business assets Buildings and structures 7
Machinery, equipment and vehicles 8
Tools, furniture and fixtures 50
Software 68
United States Idle assets Leased assets 191
  Total 1,410

The Group's business assets are grouped based on management accounting classification. Furthermore, idle assets have been grouped by individual property.
The book values mainly with respect to the goodwill arising at the time of acquisition of shares of the Denmark based consolidated subsidiary, Grazper Technologies ApS were reduced to their respective recoverable amounts and the amount of said reductions have been recorded as impairment losses on account of the business results of these companies falling below the initially forecasted business plans due to the impact of changes in the business environments surrounding the company. The recoverable amounts for the said asset group are measured by value in use and are calculated by discounting future cash flows at a rate of 10%.
As no future use is expected for idle assets, the book values for each asset group have been reduced to their respective recoverable amounts (true cash value), and the reductions have been recorded as impairment losses.

II. FY2022 (April 1, 2022-March 31, 2023)
Impairment losses were recorded for the following asset groups.

Millions of yen

Location Use Category Impairment losses
United Kingdom Business assets Goodwill 261
Norway Business assets Other intangible assets 296
  Total 558

The Group's business assets are grouped based on management accounting classification.
The book value with respect to the goodwill arising at the time of acquisition of shares of the UK-based consolidated subsidiary, Yokogawa RAP Limited, was reduced to its recoverable amount and the amount of said reduction has been recorded as impairment loss because the non-consolidated business performance of the company is expected to fall below the initially forecasted business plans in line with changes made to the company's positioning with respect to business expansion.
The recoverable amount for the said asset group is measured by value in use and is calculated by discounting future cash flows at a rate of 10%.
The book value with respect to the other intangible assets arising at the time of acquisition of shares of the Norway based consolidated subsidiary, Yokogawa TechInvent AS, was reduced to its recoverable amount and the amount of said reduction has been recorded as impairment loss on account of the business results of the company falling below the initially forecasted business plans due to the impact of changes in the business environments surrounding the company.
The recoverable amounts for the said asset group are measured by value in use and are calculated by discounting future cash flows at a rate of 10%.

*3 Business Restructuring Expenses
(Reference) FY2021 (April 1, 2021-March 31, 2022)
Business restructuring expenses pertaining to extraordinary measures with the aim of optimizing the Group overall were recorded and the expenses were mainly related to the transfer of the aviation equipment business.

(Millions of yen)

  FY2021
(April 1, 2021-March 31, 2022)
FY2022
(April 1, 2022-March 31, 2023)
Cash flows from operating activities    
Profit before income taxes 30,092 49,799
Depreciation 16,935 18,037
Amortization of goodwill 1,020 1,659
Increase (decrease) in allowance for doubtful accounts 185 128
Increase (decrease) in provision for bonuses 123 3,091
Increase (decrease) in retirement benefit liability (64) 49
Interest and dividend income (2,391) (3,029)
Interest expenses 684 1,091
Share of loss (profit) of entities accounted for using equity method (3,128) (3,374)
Loss (gain) on sale of investment securities (58) (834)
Loss (gain) on valuation of investment securities 1,758 -
Loss (gain) on sale of non-current assets (32) (520)
Loss on retirement of non-current assets 372 432
Loss (gain) on step acquisitions - (1,066)
Increase (decrease) in allowance for soft error (259) (272)
Impairment losses 1,410 558
Decrease (increase) in trade receivables 13,684 (13,692)
Decrease (increase) in inventories (4,906) (5,415)
Increase (decrease) in trade payables 858 3,421
Increase (decrease) in accounts payable - other 714 587
Increase (decrease) in accrued expenses (173) (874)
Other, net 1,822 (253)
Subtotal 58,648 49,521
Interest and dividends received 2,214 2,983
Interest paid (690) (1,002)
Income taxes refund (paid) (8,528) (11,080)
Net cash provided by (used in) operating activities 51,644 40,422
Cash flows from investing activities    
Payments into time deposits (892) (3,284)
Proceeds from withdrawal of time deposits 705 278
Purchase of property, plant and equipment (8,281) (8,637)
Proceeds from sale of property, plant and equipment 140 554
Purchase of intangible assets (9,838) (12,205)
Purchase of investment securities (1,310) (2,540)
Proceeds from sale and redemption of investment securities 807 1,087
Proceeds from sale of businesses - 428
Purchase of shares of subsidiaries and associates (438) (2,021)
Purchase of shares of subsidiaries resulting in change in scope of consolidation (9,330) (6,744)
Other, net 111 145
Net cash provided by (used in) investing activities (28,327) (32,939)
  FY2021
(April 1, 2021-March 31, 2022)
FY2022
(April 1, 2022-March 31, 2023)
Cash flows from financing activities    
Net increase (decrease) in short-term borrowings (1,388) (1,144)
Net increase (decrease) in commercial papers - 5,000
Proceeds from long-term borrowings 4,000 -
Repayments of long-term borrowings (4,080) -
Repayments of lease liabilities (3,116) (3,432)
Dividends paid (9,072) (9,078)
Dividends paid to non-controlling interests (2,261) (2,274)
Purchase of shares of subsidiaries not resulting in change in scope of consolidation (242) -
Other, net (3) (2)
Net cash provided by (used in) financing activities (16,165) (10,932)
Effect of exchange rate change on cash and cash equivalents 7,186 4,286
Net increase (decrease) in cash and cash equivalents 14,337 836
Cash and cash equivalents at beginning of period 101,204 115,541
Cash and cash equivalents at end of period 115,541 116,378

Top