Avant : Annual Securities Report for the Fiscal Year ended June 2021

25th Fiscal Year (From July 1, 2020 to June30, 2021)

A n n u a l

S e c u r i t i e s

R e p o r t

This is an unofficial translation. In case of any difference in meaning between the original Japanese text and the English translation, Japanese text shall prevail.

AVANT Corporation

Contents

		Page
25th Annual Securities Report
[Cover] .......................................................................................................................................	1
Part I [Corporate Information] .....................................................................................................................	2
1. [Business Overview] ..................................................................................................................	2
1	[Selected Financial Data] .............................................................................................	2
2	[History]........................................................................................................................	4
3	[Description of Business] ...............................................................................................................	5
4	[Information on Affiliated Companies] .........................................................................................................	7
5	[Information on Employees] ............................................................................................................	8
2. [Business Situation] ..................................................................................................................	10
1	[Management Policy, Business Environment and Issues to be Addressed] ...........	10
2	[Risk factors] .........................................................................................................	14
3	[Management's Discussion and Analysis of Financial Condition, Results of Operations and Cash Flows] ...	18
4	[Important Business Contracts] ................................................................................................	24
5	[R&D Activities] ............................................................................................................	25
3. [Information on Facilities] ..................................................................................................................	26
1	[Summary Capital Expenditures] ......................................................................................................	26
2	[Major Facilities] ......................................................................................................	26
3 [Plans for New Construction and Retirement of Facilities] .............................................................................	27
4. [Information on Parent company] ............................................................................................................	28
1	[Status of Shares etc.] ............................................................................................................	28
2	[Information on Treasury Stock] .............................................................................................	32
3	[Dividend Policy] ..................................................................................................................	32
4	[Information on Corporate Governance] .....................................................................................	33
5. [Financial Statements] ..................................................................................................................	52
1	[Consolidated Financial Statements] .........................................................................................................	53
2	[Parent Company Financial Statements] ........................................................................................................	83
6 [Overview of Share Administration of the Company] ................................................................................	93
7 [Reference Information of the Company] ......................................................................................................	94
1	[Information of Parent Company of the Company] ..........................................................................................	94
2	[Other Reference Information] .....................................................................................................	94
Part II [Information on Guarantee Companies, etc. of the Company] ............................................................................	95
Auditors Report ..................................................................................................................................................................	96
Report on Internal Control .................................................................................................................................................	103
Certificate	..................................................................................................................................................................	105

[Cover]
[Filing Type]	Securities Report
[Governing laws and regulations]	Article 24(1) of the Financial Instruments and Exchange Act
[Filed with]	Kanto Finance Bureau
[Filing date]	September 27, 2021
[Fiscal year]	25th fiscal year (from July 1, 2020 to June 30, 2021)
[Company name]	AVANT CORPORATION
[English translation]	AVANT CORPORATION
[Title and Name of Representative]	Tetsuji Morikawa, President and Group CEO
[Location of Head Office]	2-15-2, Konan, Minato-ku, Tokyo
[Phone]	[phone] (Main number)
[Officer liaison name]	Naoyoshi Kasuga, Director and Group CFO
[Neighboring contact location]	2-15-2, Konan, Minato-ku, Tokyo
[Phone]	[phone] (Representative)
[Officer liaison name]	Naoyoshi Kasuga, Director and Group CFO
[Location for public inspection]	Tokyo Stock Exchange, Inc.
	(2-1, Nihonbashi Kabutocho, Chuo-ku, Tokyo)

- 1 -

Part I [Corporate Information]

1. [Business Overview]

1-1 [Selected Financial Data]

(1) Consolidated financial summary

	Fiscal Year		21st	22nd	23rd	24th	25th
Fiscal Year-End		June 2017	June 2018	June 2019	June 2020	June 2021
Net sales			(thousand	10,532,392	12,110,795	14,077,976	15,691,533	16,236,129
		yen)
Ordinary income		(thousand	1,308,887	1,632,433	1,972,583	2,282,082	2,808,216
	yen)
Profit attributable to owners of	(thousand	663,606	1,062,061	1,317,048	1,537,894	1,888,976
parent company		yen)
Comprehensive income	(thousand	665,659	1,069,302	1,316,735	1,562,619	1,914,609
yen)
Net assets			(thousand	3,873,381	4,792,462	5,898,048	7,194,333	8,787,207
		yen)
Total assets			(thousand	7,325,518	8,814,290	10,415,229	11,780,604	13,956,966
		yen)
Net assets per share		(yen)	103.15	127.63	157.00	191.42	233.70
Net income per share	(yen)	17.67	28.28	35.06	40.92	50.24
Fully diluted			(yen)	-	-	-	-	-
Net income per share
Equity ratio			(%)	52.9	54.4	56.6	61.1	63.0
Return on equity		(%)	18.5	24.5	24.6	23.5	23.6
Price-earnings ratio		(times)	20.2	17.0	28.7	25.3	32.8
Cash flows	from	operating	(thousand	1,070,201	1,159,472	1,320,217	1,890,755	2,561,689
activities			yen)
Cash flows	from	investing	(thousand	(297,429)	(353,910)	(455,340)	(420,430)	(789,786)
activities			yen)
Cash flows	from	financing	(thousand	(232,227)	(184,632)	(232,007)	(294,708)	(359,514)
activities			yen)
Cash and cash equivalents	(thousand	3,947,673	4,566,875	5,195,137	6,370,860	7,786,223
Year-end balance		yen)
Number of employees	(people)	709	806	938	1,055	1,107
(excluding average number of	(34)	(48)	(55)	(16)	(40)
temporary employees)
(Notes)	1.	Net sales do not include consumption taxes.

1. Diluted net income per share is not prepared because there are no dilutive shares.
2. The number of employees is the number of employed persons (excluding those seconded from our group to non- group companies and includes those seconded from non-group companies to our group companies).
3. On December 1, 2016, the Company conducted a 2-for-1 stock split of common stock. Net income per share have been calculated as if this stock split had taken place at the beginning of the 20th fiscal year.
4. On November 1, 2017, the Company conducted a 2-for-1 stock split of common stock. Net assets per share and net income per share are calculated as if this stock split had taken place at the beginning of the 21st fiscal year.
5. On December 1, 2019, the Company conducted a 2-for-1 stock split of common stock. Net assets per share and net income per share are calculated as if this stock split had taken place at the beginning of the 23rd fiscal year.
6. • 2 -

(2) Parent company financial summary

	Fiscal Year		21st	22nd	23rd	24th	25th
	Fiscal Year-End		June 2017	June 2018	June 2019	June 2020	June 2021
Net sales or operating revenue	(thousand	1,743,500	1,751,837	1,851,240	2,355,778	2,661,884
yen)
Ordinary income		(thousand	561,938	679,684	729,784	1,141,659	1,348,123
	yen)
Net income			(thousand	478,788	642,379	771,939	1,252,154	1,464,244
		yen)
Paid-in capital		(thousand	288,400	288,400	295,525	303,271	311,568
	yen)
Number of issued shares	Co., Ltd.	9,388,000	18,776,000	18,785,094	37,586,982	37,603,203
Net assets			(thousand	2,979,276	3,480,465	4,044,164	5,054,779	6,219,564
		yen)
Total assets			(thousand	5,388,194	6,029,542	6,769,764	6,994,627	8,899,512
		yen)
Net assets per share		(yen)	158.69	185.38	215.30	134.49	165.41
Dividend per share		(yen)	16	12	7.5	9	11
(Including interim dividends per	(yen)	(-)	(-)	(-)	(-)	(-)
share)
Net income per share	(yen)	25.50	34.22	41.10	33.32	38.95
Fully diluted			(yen)	-	-	-	-	-
Net income per share
Equity ratio			(%)	55.3	57.7	59.7	72.3	69.9
Return on equity		(%)	17.2	19.9	20.5	27.5	26.0
Price-earnings ratio		(times)	28.0	28.1	49.0	31.1	42.3
Dividend payout ratio	(%)	31.4	35.1	36.5	27.0	28.2
Number of employees		56	33	37	36	45
(excluding average	number of	(people)	(9)	(1)	(3)	(2)	(2)
temporary employees)
Total shareholder return	(%)	195.5	264.8	549.6	584.3	1,228.8
(Comparative	index: TOPIX	(%)	(135.7)	(148.9)	(136.6)	(107.1)	(174.7)
with dividends)
Highest stock price		(yen)	1,550	1,093	2,364	1,198	1,872
	(1,835)	(2,195)	(2,497)
Lowest stock price		(yen)	808	818	911	645	951
	(1,020)	(1,384)	(1,775)
(Notes)	1.	Net sales and operating revenue do not include consumption taxes.

1. Diluted net income per share is not prepared because there are no dilutive shares.
2. The number of employees is based on the number of employees employed (including employees seconded from outside the company to us, excluding those seconded from us to outside the company).
3. The highest and lowest share prices are based on the First Section of the Tokyo Stock Exchange from March 7, 2018 and are based on the Second Section of the Tokyo Stock Exchange prior to March 6, 2018, and the Tokyo Stock Exchange JASDAQ (Growth) prior to September 21, 2017. The maximum and minimum stock values for the years ending June 2017 and June 2018 are shown after the stock split, and the maximum and minimum stock values before the stock split are shown in parentheses.
4. On December 1, 2016, the Company conducted a 2-for-1 stock split of common stock. Net income per share have been calculated as if this stock split had taken place at the beginning of the 20th fiscal year. The amount of dividends per share for the 20th fiscal period and prior is the actual amount of dividends before the stock split.
5. On November 1, 2017, the Company conducted a 2-for-1 stock split of common stock. Net assets per share and net income per share are calculated as if this stock split had taken place at the beginning of the 21st fiscal year. The amount of dividends per share for the 21st fiscal period and prior is the actual amount of dividends before the stock split.
6. On December 1, 2019, the Company conducted a 2-for-1 stock split of common stock. Net assets per share and net income per share are calculated as if this stock split had taken place at the beginning of the 23rd fiscal year.
7. • 3 -