Glory : Audited Consolidated Financial Statements

Published August 2, 2024 at 2:41 a.m. UTC

Source: MarketScreener

GLORY LTD. and Consolidated Subsidiaries

Consolidated Financial Statements for the Year Ended March 31, 2024 and Independent Auditor's Report

GLORY LTD. and Consolidated Subsidiaries

Consolidated Balance Sheet

March 31, 2024

						Thousands of
							U.S. Dollars
ASSETS		Millions of Yen			(Note 1)
2024		2023				2024
CURRENT ASSETS:
Cash and cash equivalents (Note 19)	¥ 35,173		¥ 36,693		$	232,425
Short-term investments (Notes 6 and 19)	51		894				337
Receivables (Notes 19 and 24):
Trade notes	627		553				4,143
Electronically recorded monetary claims - operating	3,849		1,821				25,434
Trade accounts	81,193		57,926				536,529
Contract assets	4,378		1,308				28,930
Unconsolidated subsidiaries and associated companies	18		15				118
Other	3,144		2,977				20,775
Investments in leases (Notes 18 and 19)	412		547				2,722
Inventories (Note 7)	111,068		94,999				733,945
Other current assets	5,389		7,178				35,610
Allowance for doubtful accounts	(1,859 )	(1,437)			(12,284)

Total current assets	243,447		203,477				1,608,716
PROPERTY, PLANT AND EQUIPMENT:
Land	11,649		11,892				76,977
Buildings and structures	41,544		39,905				274,525
Machinery, equipment and vehicles	16,721		15,734				110,493
Tools, furniture and fixtures	56,890		54,895				375,933
Right-of-use assets	17,905		13,744				118,317
Construction in progress	490		192				3,237
Total		145,201		136,364				959,499
Accumulated depreciation	(99,019 )	(93,847)			(654,324)

Total property, plant and equipment	46,182		42,517				305,174
INVESTMENTS AND OTHER ASSETS:
Investment securities (Notes 6 and 19)	10,856		9,128				71,737
Investments in unconsolidated subsidiaries and associated
companies (Note 19)	3,713		5,425				24,535
Software	6,234		7,452				41,194
Goodwill (Notes 4 and 17)	84,171		55,528				556,208
Customer relationships	26,838		26,428				177,347
Deferred tax assets (Note 13)	8,044		9,981				53,155
Retirement benefit asset (Note 10)	26,579		14,772				175,636
Other investments and other assets (Note 8)	13,105		8,667				86,598
Allowance for doubtful accounts (Note 8)	(2,101)	(2,106)			(13,883)

Total investments and other assets		177,443		135,278				1,172,556

TOTAL ASSETS	¥ 467,072	¥ 381,273	$ 3,086,446

See notes to consolidated financial statements.

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LIABILITIES AND EQUITY

CURRENT LIABILITIES:

Short-term borrowings (Notes 9 and 19)

Current portion of long-term borrowings (Notes 9 and 19) Current portion of bonds payable (Notes 9 and 19) Current portion of long-term lease liabilities

(Notes 9, 18 and 19) Payables (Note 19):

Trade notes

Electronically recorded obligations - operating Trade accounts

Unconsolidated subsidiaries and associated companies Other

Income taxes payable (Note 19) Accrued expenses

Contract liabilities (Note 24) Provision for stock grant (Note 11) Other

Total current liabilities

NON-CURRENT LIABILITIES:

Bonds payable (Notes 9 and 19)

Long-term borrowings (Notes 9 and 19)

Retirement benefit liability (Note 10)

Lease liabilities (Notes 9, 18 and 19)

Deferred tax liabilities (Note 13)

Provision for stock grant (Note 11)

Other

Total non-current liabilities

CONTINGENT LIABILITIES (Note 21)

EQUITY (Notes 12 and 23):

Share capital,

Authorized: 150,000,000 shares in 2024 and 2023;

Issued: 58,938,210 shares in 2024 and 2023 Capital surplus

Retained earnings

Treasury shares - at cost (Note 11) 2,873,306 shares in 2024 and 2023

Accumulated other comprehensive income:

Valuation difference on available-for-sale securities Foreign currency translation adjustment Remeasurements of defined benefit plans

Total

Non-controlling interests

Total equity

TOTAL LIABILITIES AND EQUITY

- 3 -

						Thousands of
						U.S. Dollars
	Millions of Yen			(Note 1)
2024	2023				2024
¥ 38,286	¥ 45,623		$	252,996
5,672	1,481				37,481
	－	10,000				－
2,808	2,086				18,555
248	429				1,638
9,862	7,276				65,168
17,429	17,767				115,172
31	30				204
14,137	7,850				93,418
11,011	428				72,761
27,499	16,901				181,715
24,277	22,037				160,424
464	48				3,066
9,353	7,538				61,805
	161,083		139,501				1,064,448
10,000	10,000				66,080
37,040	12,055				244,763
1,820	2,166				12,026
6,476	5,412				42,793
10,497	9,721				69,364
315	194				2,081
11,091	6,238				73,290
	77,243		45,787				510,427

12,892		12,892		85,191
－	12,286		－
167,088		141,522		1,104,130
(8,097)	(8,161)	(53,505)
2,758		1,367		18,225
41,062		26,672		271,340
12,170		6,584		80,420
227,875		193,166		1,505,815
870		2,818		5,749
228,746		195,984		1,511,570
¥ 467,072		¥ 381,273		$ 3,086,446

GLORY LTD. and Consolidated Subsidiaries

Consolidated Statement of Operations

Year Ended March 31, 2024

											Thousands of
											U.S. Dollars
			Millions of Yen			(Note 1)
			2024					2023				2024
NET SALES (Notes 24 and 25)	¥	372,478		¥	255,857		$	2,461,362
COST OF SALES (Note 15)			209,892				164,630				1,386,982
Gross profit			162,585				91,226				1,074,373
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES (Notes 14 and 15)			111,308				90,704				735,531
Operating income (Note 25)			51,276				522				338,835
OTHER (EXPENSES) INCOME:
Interest and dividend income			431				339				2,848
Interest expense			(1,922)			(1,138)			(12,700)
Foreign exchange losses, net			(913)			(724)			(6,033)
Share of loss of entities accounted for using equity method
(Note 16)			(916)			(2,978)			(6,052)
Impairment losses (Note 17)			(1,496)			(3,810)			(9,885)
Gain on valuation of derivatives			－			1,443				－
Income from overseas tax benefit rights and others			596				－			3,938
Expenses incurred to recover the system failures			(383)			－			(2,530)
Other, net			141				(314)			931

Other expenses, net			(4,462)			(7,184)			(29,485)

INCOME (LOSS) BEFORE INCOME TAXES			46,814				(6,661)			309,350
INCOME TAXES (Note 13):
Current			(15,813)			(4,621)			(104,493)
Deferred			(731)			2,533				(4,830)

Total income taxes			(16,545)			(2,087)			(109,330)

NET INCOME (LOSS)			30,268				(8,748)			200,013
NET INCOME ATTRIBUTABLE TO NON-CONTROLLING
INTERESTS			(594)			(789)			(3,925)
NET INCOME (LOSS) ATTRIBUTABLE TO OWNERS OF
PARENT	¥	29,674		¥	(9,538)	$	196,088
						Yen				U.S. Dollars
PER COMMON SHARE (Note 2.v):
Basic net income (loss)			¥533.62				¥(167.02)			$3.52
Dividends of surplus applicable to the year			106.00				68.00				0.70

See notes to consolidated financial statements.

GLORY LTD. and Consolidated Subsidiaries

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Consolidated Statement of Comprehensive Income

Year Ended March 31, 2024

									Thousands of
									U.S. Dollars
			Millions of Yen		(Note 1)
			2024	2023					2024
NET INCOME (LOSS)	¥	30,268	¥	(8,748)	$	200,013
OTHER COMPREHENSIVE INCOME (Note 22):
Valuation difference on available-for-sale securities			1,382			706				9,132
Foreign currency translation adjustments			14,816			8,885				97,905
Remeasurements of defined benefit plans, net of tax			5,585			2,537				36,906
Share of other comprehensive income (loss) of entities
accounted for using equity method			8			(16)			52
Total other comprehensive income			21,793			12,111				144,009
COMPREHENSIVE INCOME	¥	52,061	¥	3,362			$	344,022
TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO:

Owners of parent	¥	51,040	¥	2,323			$	337,276
Non-controlling interests			1,021			1,039				6,746

See notes to consolidated financial statements.

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GLORY LTD. and Consolidated Subsidiaries

Consolidated Statement of Changes in Equity

Year Ended March 31, 2024

		Thousands of Shares																															Millions of Yen
																																					Accumulated Other Comprehensive Income
																																				Valuation				Foreign
																																				Difference on				Currency		Remeasurements
	Common			Treasury					Share				Capital				Retained			Treasury	Available-for-Sale		Translation			of Defined						Non-controlling
		Shares			Shares					Capital				Surplus				Earnings					Shares		Securities		Adjustment			Benefit Plans				Total			Interests		Total Equity
BALANCE, APRIL 1, 2022	63,638		(2,866)	¥ 12,892			¥	12,286			¥	166,566			¥	(9,191)		¥ 666		¥	18,050			¥	4,047					¥	205,318			¥ 3,289			¥	208,607
Net income attributable to owners of parent																										(9,538)																								(9,538)								(9,538)
Dividends of surplus, ¥68 per share																										(4,016)																								(4,016)			(1,510)				(5,526)
Purchase of treasury shares				(4,707)																									(10,570)																	(10,570)									(10,570)
Disposal of treasury shares				0																			(0)					253																		253										253
Cancellation of treasury shares	(4,700)	4,700																			(11,347)					11,347
Change in scope of the equity method																										(142)																								(142)								(142)
Net changes in items other than shareholders' equity																																					701					8,622			2,537						11,861				1,039					12,900
BALANCE, MARCH 31, 2023	58,938		(2,873)					12,892							12,286							141,522						(8,161)		1,367						26,672							6,584		193,166					2,818				195,984
Net income attributable to owners of parent																										29,674																									29,674									29,674
Dividends of surplus, ¥74 per share																										(4,148)																								(4,148)			(1,656)				(5,805)
Purchase of treasury shares
Disposal of treasury shares																																63																		63									63
Cancellation of treasury shares
Change in scope of the equity method
Purchase of shares of consolidated subsidiaries																			(12,286)					(722)																								(13,008)									(13,008)
Changes in accounting period of consolidated subsidiaries																										762																									762									762
Net changes in items other than shareholders' equity																																					1,390					14,389			5,585						21,366				(291)			21,074

BALANCE, MARCH 31, 2024		58,938			(2,873)	¥	12,892			¥	－	¥	167,088			¥	(8,097)		¥ 2,758		¥	41,062			¥ 12,170					¥ 227,875			¥	870			¥	228,746
																																				Thousands of U.S. Dollars (Note 1)

																																					Accumulated Other Comprehensive Income
																																				Valuation				Foreign
																																				Difference on				Currency		Remeasurements
												Share				Capital				Retained			Treasury	Available-for-Sale		Translation			of Defined						Non-controlling
												Capital				Surplus				Earnings					Shares		Securities		Adjustment			Benefit Plans				Total			Interests		Total Equity
BALANCE, APRIL 1, 2023								$	85,191		$	81,186		$	935,187		$	(53,928)	$ 9,033		$	176,250		$	43,507				$	1,276,455		$	18,621		$	1,295,076
Net income attributable to owners of parent																										196,088																								196,088								196,088
Dividends of surplus, $0.48 per share																										(27,410)																							(27,410)	(10,942)		(38,359)
Purchase of treasury shares
Disposal of treasury shares																																416																		416								416
Cancellation of treasury shares
Change in scope of the equity method
Purchase of shares of consolidated subsidiaries																			(81,186)					(4,771)																							(85,957)								(85,957)
Changes in accounting period of consolidated subsidiaries																										5,035																								5,035								5,035
Net changes in items other than shareholders' equity																																					9,185					95,083		36,906					141,188			(1,922)				139,258

BALANCE, MARCH 31, 2024									$	85,191			$	－		$	1,104,130		$	(53,505)	$18,225		$	271,340		$	80,420				$	1,505,815		$	5,749		$	1,511,570
See notes to consolidated financial statements.

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GLORY LTD. and Consolidated Subsidiaries

Consolidated Statement of Cash Flows

Year Ended March 31, 2024

								Thousands of
		Millions of Yen		U.S. Dollars
					(Note 1)
		2024			2023					2024
OPERATING ACTIVITIES:
Income (loss) before income taxes	¥	46,814		¥	(6,661)	$	309,350
Adjustments for:
Income taxes - paid		(5,622)		(6,540)				(37,150)
Depreciation and amortization		13,380			11,762					88,416
Impairment losses		1,496			3,810					9,885
Amortization of goodwill		7,560			6,703					49,957
Increase in allowance for doubtful accounts		105			98					693
Gain on sale of investment securities		(206)		(56)				(1,361)
Share of loss of entities accounted for using equity method		916			2,978					6,052
Changes in assets and liabilities, including net of affects from
newly consolidated subsidiaries:
Increase in trade receivables		(20,278)		(5,631)				(133,998)
Increase in inventories		(9,901)		(21,902)				(65,426)
(Decrease) increase in trade payables		(1,329)		1,873					(8,782)
Increase (decrease) in interest payable		224			(18)				1,480
Decrease in retirement benefit liability		(80)		(246)				(528)
Increase (decrease) in provision for stock grant		537			(213)				3,548
Increase in lease liabilities		858			200					5,669
Decrease in investments in leases		135			228					892
(Increase) decrease in accounts receivable - other		(4)		1,085					(26)
Increase/decrease in consumption taxes payable/consumption
taxes refund receivable		4,569			(243)				30,192
Increase (decrease) in accrued expenses		8,331			(509)				55,051
Other, net		(5,652)		(3,205)				(37,348)
Total adjustments		(4,960	)		(9,825	)				(32,776)
Net cash provided by (used in) operating activities		41,854			(16,486)				276,574
INVESTING ACTIVITIES:
Proceeds from sale of property, plant and equipment		488			13					3,224
Purchase of property, plant and equipment		(6,376)		(5,015)				(42,133)
Purchase of intangible assets		(1,876)		(1,918)				(12,396)
Proceeds from sale and redemption of investment securities		1,138			180					7,519
Purchase of securities		－		(813)				－
Purchase of investment securities		(73)		(2,076)				(482)
Decrease in time deposits - net		8			0					52
Proceeds from distributions from investment partnerships		201			487					1,328
Purchase of shares of subsidiaries resulting in change in scope of
consolidation and others (Note 5)		(28,002)		(227)				(185,039)
Proceeds from purchase of shares of subsidiaries resulting in change in
scope of consolidation		0			－				0
Other, net		912			5					6,026
Net cash used in investing activities		(33,577)		(9,364)				(221,879)
FORWARD	¥	8,276		¥	(25,851)		$	54,688

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GLORY LTD. and Consolidated Subsidiaries
Consolidated Statement of Cash Flows
Year Ended March 31, 2024							(Continued)

								Thousands of
								U.S. Dollars
		Millions of Yen			(Note 1)
		2024		2023						2024
FORWARD	¥	8,276	¥	(25,851)	$	54,688
FINANCING ACTIVITIES:
Net (decrease) increase in short-term borrowings		(8,397)	28,159					(55,488)
Proceeds from long-term borrowings		28,980		1,185					191,502
Repayments of long-term borrowings		(1,628)	(2,681)				(10,757)
Redemption of bonds		(10,000)	－				(66,080)
Repayments of lease liabilities		(2,320)	(2,041)				(15,330)
Purchase of treasury shares		－	(10,570)				－
Proceeds from sales of treasury shares		－	0					－
Dividends paid		(4,147)	(4,014)				(27,403)
Dividends paid to non-controlling interests		(1,656)	(1,510)				(10,942)
Purchase of shares of subsidiaries not resulting in change in scope of
consolidation		(14,787)	－					(97,713)

Net cash (used in) provided by financing activities		(13,957)	8,526					(92,228)
EFFECT OF EXCHANGE RATE CHANGE ON CASH AND
CASH EQUIVALENTS		2,183		1,702					14,425
NET DECREASE IN CASH AND CASH EQUIVALENTS		(3,498)	(15,622)				(23,115)
NET INCREASE IN CASH AND CASH EQUIVALENTS
RESULTING FROM CHANGE IN FISCAL YEAR OF
CONSOLIDATED SUBSIDIARIES		1,977		－				13,064
CASH AND CASH EQUIVALENTS AT BEGINNING OF										242,470
PERIOD		36,693		52,316

CASH AND CASH EQUIVALENTS AT END OF PERIOD	¥	35,173	¥	36,693		$	232,425

See notes to consolidated financial statements.

(Concluded)

- 8 -

GLORY LTD. and Consolidated Subsidiaries

Notes to Consolidated Financial Statements

Year Ended March 31, 2024

BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS
The accompanying consolidated financial statements have been prepared in accordance with the provisions set forth in the Japanese Financial Instruments and Exchange Act and its related accounting regulations and in accordance with accounting principles generally accepted in Japan ("Japanese GAAP"), which are different in certain respects as to the application and disclosure requirements of International Financial Reporting Standards ("IFRS").
In preparing these consolidated financial statements, certain reclassifications and rearrangements have been made to the consolidated financial statements issued domestically in order to present them in a form which is more familiar to readers outside Japan. In addition, certain reclassifications have been made in the 2023 consolidated financial statements to conform to the classifications used in 2024.
The consolidated financial statements are stated in Japanese yen, the currency of the country in which GLORY LTD. (the "Company," together with its consolidated subsidiaries, the "Group") is incorporated and operates. Japanese yen figures less than one million yen are rounded down to the nearest million yen and U.S. dollar figures less than one thousand dollars are rounded down to the nearest thousand dollars, except for per share data. The translations of Japanese yen amounts into U.S. dollar amounts are included solely for the convenience of readers outside Japan and have been made at the rate of ¥151.33 to $1, the rate of exchange at March 31, 2024. Such translations should not be construed as representations that the Japanese yen amounts could be converted into U.S. dollars at that or any other rate.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
1. Consolidation - The consolidated financial statements as of March 31, 2024, include the accounts of the Company and its 99 significant (87 in 2023) subsidiaries. Consolidation of the remaining subsidiaries would not have a material effect on the accompanying consolidated financial statements.
  Consolidated Subsidiaries

March 31, 2024			March 31, 2023
Name		Year-End	Name	Year-End
GLORY Products Ltd.		March 31	GLORY Products Ltd.	March 31
GLORY NASCA Ltd.		March 31	GLORY NASCA Ltd.	March 31
Hokkaido GLORY Co., Ltd.		March 31	Hokkaido GLORY Co., Ltd.	March 31
GLORY Denshi Kogyo		December 31	GLORY Denshi Kogyo	December 31
(Suzhou) Ltd.			(Suzhou) Ltd.
GLORY (PHILIPPINES), INC.		March 31	GLORY (PHILIPPINES), INC.	March 31
Sitrade Italia S.p.A.		March 31	Sitrade Italia S.p.A.	December 31
Glory Global Solutions Ltd.		March 31	Glory Global Solutions Ltd.	March 31
Glory Global Solutions		March 31	Glory Global Solutions	March 31
(International) Ltd.			(International) Ltd.
Glory Global Solutions		March 31	Glory Global Solutions	March 31
(France) S.A.S.			(France) S.A.S.
Glory Global Solutions Inc.		March 31	Glory Global Solutions Inc.	March 31
Glory Global Solutions (Singapore)		March 31	Glory Global Solutions (Singapore)	March 31
Pte. Ltd.			Pte. Ltd.
Glory Global Solutions (Shanghai) Co.,		December 31	Glory Global Solutions (Shanghai)	December 31
Ltd.			Co., Ltd.
Acrelec Group S.A.S.		December 31	Acrelec Group S.A.S.	December 31
Revolution Retail Systems, LLC		September 30	Revolution Retail Systems, LLC	September 30
Flooid Topco Limited		December 31	73 other companies	March 31
84 other companies		March 31		December 31
		December 31
	- 9 -

From the fiscal year ended March 31, 2024, the Company acquired additional shares in Unified Financial Limited (operating as OneBanx), which was previously accounted for by the equity method, and included it in the scope of consolidation. The Company newly established Acrelec Italia S.R.L. and included it in the scope of consolidation. The Company acquired all shares in Flooid Topco Limited and included 13 companies including its subsidiaries in the scope of consolidation.

In the fiscal year ended March 31, 2024, Acrelec Taiwan and other two companies were excluded from the scope of consolidation since they were liquidated.

To increase the accuracy of the consolidated financial information, a provisional settlement of accounts has been made on March 31 for GLORY Denshi Kogyo (Suzhou) Ltd., Glory Global Solutions (Shanghai) Co., Ltd., GLORY IPO China Ltd., Flooid Topco Limited and 12 other companies, and 5 other companies, while for Acrelec Group S.A.S. and 27 other companies, their financial statements as of December 31 have been consolidated as the difference is no more than three months, and any significant differences in intercompany accounts and transactions arising from intervening intercompany transactions during the period from January 1 through March 31 have been adjusted as necessary. From the fiscal year ended March 31, 2024, Sitrade Italia S.p.A., which had a fiscal year end of December 31, changed its fiscal year end to March 31. As a result of this change in fiscal year, profits and losses for the period from January 1, 2023 to March 31, 2023 were adjusted as changes in retained earnings.

Under the control and influence concepts, those companies in which the Company, directly or indirectly, is able to exercise control over operations are fully consolidated, and those companies over which the Group has the ability to exercise significant influence are accounted for by the equity method.

The investment in AdInte co., ltd. and 4 other companies are accounted for by the equity method. In the fiscal year ended March 31, 2024, FueTrek Co., Ltd. was excluded from the scope of the equity method due to the sale of its shares. In addition, Unified Financial Limited, which was accounted for by the equity method, was excluded from the scope of the equity method since the Company acquired its additional shares and included it in the scope of consolidation.

Investments in an unconsolidated subsidiary and two associated companies are stated at cost. If the equity method of accounting had been applied to the investments in these companies, the effect on the accompanying consolidated financial statements would not be material.

The excess of the cost of acquisition over the fair value of the equity of an acquired subsidiary at the date of acquisition, which is presented as goodwill in the consolidated balance sheet, is being amortized over a reasonable estimated period.

All significant intercompany balances and transactions have been eliminated in consolidation. All material unrealized profit included in assets resulting from transactions within the Group is eliminated.

Unification of Accounting Policies Applied to Foreign Subsidiaries for the Consolidated Financial Statements - Under Accounting Standards Board of Japan ("ASBJ") Practical Issues Task Force ("PITF") No. 18, "Practical Solution on Unification of Accounting Policies Applied to Foreign Subsidiaries for the Consolidated Financial Statements" (September 14, 2018), the accounting policies and procedures applied to a parent company and its subsidiaries for similar transactions and events under similar circumstances should in principle be unified for the preparation of the consolidated financial statements. However, financial statements prepared by foreign subsidiaries in accordance with either IFRS or generally accepted accounting principles in the United States of America (Financial Accounting Standards Board Accounting Standards Codification) tentatively may be used for the consolidation process, except for the following items that should be adjusted in the consolidation process so that net income is accounted for in accordance with Japanese GAAP, unless they are not material: (a) amortization of goodwill; (b) scheduled amortization of actuarial gain or loss of pensions that has been recorded in equity through other comprehensive income; (c) expensing capitalized development costs of R&D; (d) cancellation of the fair value model of accounting for property, plant and equipment and investment properties and incorporation of the cost model of accounting; and (e) recording a gain or loss through profit or loss on the sale of an investment in an equity instrument for the difference between the acquisition cost and selling price, and recording impairment loss through profit or loss for other-than- temporary declines in the fair value of an investment in an equity instrument, where a foreign subsidiary elects to present in other comprehensive income subsequent changes in the fair value of an investment in an equity instrument.
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