モーニングスター（4765） – ［Delayed］Consolidated Financial Results (Japanese Accounting Standards) for the Fiscal Year ended March 31, 2022

Morningstar Japan K.K. Consolidated Financial Results (Japanese Accounting Standards) for the Fiscal Year ended March 31, 2022 April 26, 2022 Stock exchange listing: Tokyo Stock Exchange URL https://www.morningstar.co.jp (Title) Representative Director and President (Name) (Name) (Title) Director and Chief Financial Officer Company name Morningstar Japan K.K. Stock code 4765 Representative Person responsible for disclosure Scheduled date of ordinary shareholders’ meeting: June 23, 2022 Scheduled date for filing of annual securities report: June 24, 2022 Scheduled date of payment of dividends: June 1, 2022 Supplementary documents for financial result: None Financial results briefing : None (A video of the briefing will be posted promptly to our website). TEL 03-6229-0810 Tomoya Asakura Kazuhisa Ogawa (Amounts of less than one million yen are rounded down) 1. Consolidated Financial Results for the Fiscal Year ended March 31, 2022 (April 1, 2021 to March 31, 2022) (1) Consolidated Results of Operations Net sales Operating income (Percentages show year-on-year changes) Net income attributable to owners of parent Ordinary income Million yen Fiscal Year ended March 31, 2022 March 31, 2021 (Note) Comprehensive income 8,123 7,485 % 8.5 9.8 Million yen % Million yen % Million yen 2,129 1,765 20.6 14.5 2,403 2,155 11.5 16.0 1,454 1,318 % 10.3 7.1 Fiscal Year ended March 31, 2022 2,000 Million yen ( 28.0 %) Fiscal Year ended March 31, 2021 1,563 Million yen (100.6 %) Net income per share (basic) Net income per share (diluted) Return on equity Ratio of ordinary income to total assets Ratio of operating income to sales Fiscal Year ended 14.1 March 31, 2022 12.6 March 31, 2021 (Reference) Share of (profit) loss of entities accounted for using equity method 16.22 15.34 ― ― yen yen % % 18.2 16.2 % 26.2 23.6 (2) Consolidated financial position Total assets Net assets Equity ratio – Million yen Fiscal Year ended March 31, 2022 Fiscal Year ended March 31, 2021 5 Million yen Million yen Fiscal Year ended March 31, 2022 March 31, 2021 (Reference) Shareholders’ equity Fiscal Year ended March 31, 2022 Fiscal Year ended March 31, 2021 12,273 12,358 14,055 14,189 Million yen (3) Consolidated Cash Flows 11,804 Million yen 12,011 Million yen Net assets per share yen 131.64 133.95 % 84.0 84.6 Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities Cash and cash equivalents at the end of fiscal year Million yen 1,128 2,104 Million yen 1,324 △1,166 Million yen △2,149 △391 Million yen 5,176 4,904 Fiscal Year ended March 31, 2022 March 31, 2021 2. Dividends End of first quarter End of second quarter Dividend End of third quarter Year-end Annual Total dividend (annual) Payout ratio (consolidated) Net dividend rate (consolidated) yen Fiscal Year ended March 31, 2021 March 31, 2022 Fiscal Year ending March 31, 2023 (Note) Forecast of the annual dividend for the year ending March 31, 2023 is yet to be determined. Million yen 1,383 1,524 yen 16.00 17.00 yen 7.50 8.00 yen 8.50 9.00 ― ― ― ― ― ― ― ― ― ― yen % 104.3 104.8 % 13.3 12.9 3. Forecast of Consolidated Financial Results for the Fiscal Year ending March 31, 2023 (April 1, 2022 to March 31, 2023) Consolidated Forecasts for the Fiscal Year Ending March 31, 2023 is yet to be determined. * Notes (1) Changes in significant subsidiaries during Fiscal Year ended March 31, 2022 ( Changes in specified subsidiaries affecting the scope of consolidation): None (2) Changes in accounting policies and estimates, and retrospective restatements: 1) Changes in accounting policies caused by revision of accounting standards: Yes 2) Changes in accounting policies other than 1): 3) Changes in accounting estimates: 4) Retrospective restatements: None None None (3) Number of shares issued (common stock) 1) Number of shares outstanding at end of period (including treasury stocks) As of March 31, 2022 89,673,600 shares As of March 31, 2021 89,673,600 shares As of March 31, 2022 170 shares As of March 31, 2021 170 shares 2) Number of treasury stocks at end of period 3) Average number of shares during period Fiscal Year ended March 31, 2022 89,673,430 shares Fiscal Year ended March 31, 2021 85,976,392 shares (Reference) Summary of Non-Consolidated Financial Results 1. Non-Consolidated Financial Results for the Fiscal Year ended March 31, 2022 (April 1, 2021 to March 31, 2022) (1) Non-Consolidated Financial Results Net sales (Percentages show year-on-year changes.) Operating income Ordinary income Net income Million yen % 1,935 △23.0 2,513 △14.6 Million yen % 477 △30.1 683 △33.0 Million yen 2,652 % 183.7 935 △18.9 Million yen 2783 % 322.6 658 △17.8 Fiscal Year ended March 31, 2022 March 31, 2021 Fiscal Year ended March 31, 2022 March 31, 2021 Net income per share (basic) Net income per share (diluted) yen 31.04 7.66 yen ― ― (2) Non-Consolidated Financial Position Total assets Fiscal Year ended March 31, 2022 March 31, 2021 (Reference) Shareholders’ equity Fiscal Year ended March 31, 2022 10,062 Million yen Fiscal Year ended March 31, 2021 9,179 Million yen Million yen 10,337 9,546 Million yen 10,062 9,179 Equity ratio Net assets % 97.3 96.2 Net assets per share yen 112.21 102.37 2. Forecast of Non-consolidated Financial Results for the Fiscal Year ending March 31, 2023 (April 1, 2022 to March 31, 2023) (Note) Non-consolidated Forecasts for the Fiscal Year Ending March 31, 2023 is yet to be determined. * This financial summary is outside the scope of auditing performed by certified accountants and auditors. * Explanation regarding the appropriate use of financial forecasts and other special items (Dividend forecast of Fiscal Year ending March 31, 2023) The dividend forecast for the Fiscal Year ending March 31, 2023 is yet to be determined. It will be disclosed as soon as the dividend per share is determined after comprehensively taking into account future business performance, etc. (How to obtain the financial results briefing) A briefing of financial results for analysts is scheduled to be held on April 26, 2022 and a video of the briefing will be posted promptly to our website 1. Qualitative information on the results for the Fiscal Year ended March 31, 2022 (1) Explanation of Business Results 1) Overview of consolidated business performance In the current consolidated fiscal year (April 1, 2021 to March 31, 2022), the Japanese economy remained in a severe state due to stagnation of economic activity and sluggish personal consumption caused by the spread of COVID-19 infections and repeated implementation of priority measures such as declarations of a state of emergency and other infection prevention measures. In the investment trust market, which is highly relevant to the Group’s business, the net inflow of publicly offered additional stock investment trusts, excluding ETFs, is 9,688.5 billion yen in the current consolidated fiscal year from 3,117.9 billion yen in the previous consolidated fiscal year (April 1, 2020 to March 31, 2021), an increase of 6,570.6 billion yen (211%). However, the Nikkei Stock Average at the end of the current consolidated fiscal year (March 31, 2022) fell 4.6% from the end of the previous fiscal year to 27,821 yen. Under such a business environment, in the Group’s asset management business, the investment balance of publicly offered index funds provided by SBI Asset Management Co., Ltd. increased by 2.26 times from 453 billion yen at the end of the previous consolidated fiscal year to 1,022.4 billion yen. In addition, the total balance of investment trusts of SBI Bond Investment Management Co., Ltd. and SBI Regional Revitalization Asset Management Co., Ltd., which support the advancement and diversification of securities investment of regional financial institutions, has also increased by 198 billion yen (10.5%) from 1,887.9 billion yen at the end of the previous consolidated fiscal year to 2,085.9 billion yen. The balance of net assets under management of investment trusts managed by the Group increased by 828.5 billion yen (28.0%) from 2,869.1 billion yen at the end of the previous consolidated fiscal year to 3,697.6 billion yen at the end of the current consolidated fiscal year, and trust fees increased. As a result, sales of the asset management business increased by 953 million yen (19.1%) from 4,995 million yen in the previous consolidated fiscal year to 5,949 million yen. As for data solutions in the financial services business, the number of “Wealth Advisors” provided to investment trust sales financial institutions increased by 11,642 units (11.3%) from 103,038 units in the previous consolidated fiscal year to 114,680 units, and data sales of tablet applications increased. In addition, sales of online content for PCs and smartphones continued to expand, and the SaaS (Software as a Service) model business continued to expand. On the other hand, as for stock data, although sales of the stock newspaper WEB version increased, sales decreased due to the suspension of publication of the “stock newspaper” on March 31, 2021. As a result, sales of data solutions decreased by 267 million yen (△14.6%) from 1,835 million yen in the previous consolidated fiscal year to 1,568 million yen in the current consolidated fiscal year. Media solutions in the financial services business continued to be unable to hold face-to-face asset management seminars due to priority measures such as declarations of a state of emergency and other COVID-19 infection prevention measures. But by switching from face-to-face seminars to online-centric and holding hybrid seminars that combine face-to-face and online sales, sales of seminars increased. In addition, web advertising sales increased due to a large increase in the number of web advertisements that promote sponsor brands and products in conjunction with the holding of seminars. However, due to the decrease in sales of Gomez Consulting Business due to the transfer of Gomez Consulting Business through a company split on July 1, 2021, sales of media solutions decreased by 48 million yen (△7.4%) to 605 million yen from 653 million yen in the previous consolidated fiscal year. As a result, sales of the Financial Services Business were 2,173 million yen, a decrease of 315 million yen (△12.7%) from 2,489 million yen in the same period last year. For the consolidated business results for the Fiscal Year ended March 31, 2022, sales were 8,123 million yen, an increase of 637 million yen (8.5%) from 7,485 million yen in previous fiscal year. The cost of sales was 3,654 million yen, an increase of 97 million yen (2.7%) from 3,556 million yen in previous fiscal year. Selling, general and administrative expenses were 2,339 million yen, an increase of 175 million yen (8.1%) from 2,163 million yen in previous fiscal year. As a result, operating income for the Fiscal Year ended March 31, 2022 was 2,129 million yen, an increase of 364 million yen (20.6%) from 1,765 million yen in previous fiscal year. Net amounts of non-operating income and expenses decreased by 116 million yen as compared with the previous fiscal year. As a result, ordinary income for the Fiscal Year ended March 31, 2022 was 2,403 million yen, an increase of 247 million yen (11.5%) from 2,155 million yen in previous fiscal year. As a result of recording a gain on sales of investment securities of 594 million yen and an extraordinary loss due to asset valuation loss, impairment loss, etc. of 520 million yen, net income attributable to owners of parent for the Fiscal Year ended March 31, 2022 was 1,454 million yen, an increase of 135 million yen (10.3%) from 1,318 million yen in previous fiscal year. (Summary of consolidated financial results) Fiscal Year From April 1, 2020 To March 31, 2021 Fiscal Year From April 1, 2021 To March 31, 2022 (Thousand yen) Increase/Decrease Amount Amount Amount Rate (%) Profit rate (%) Net sales 7,485,655 Operating income 1,765,406 Ordinary income 2,155,698 23.6 28.8 8,123,286 2,129,805 2,403,695 637,631 364,398 247,997 8.5 20.6 11.5 Profit rate (%) 26.2 29.6 Net income attributable to owners of parent 1,318,528 17.6 1,454,134 17.9 135,605 10.3 Consolidated sales increased for the 10th consecutive year and recorded the highest sales for the 3rd consecutive year. Operating income increased for the 2nd consecutive year and recorded the highest income for the 2nd consecutive year. Ordinary income increased for the 13th consecutive year and recorded the highest income for the 11th consecutive year. Net income attributable to owners of parent increased for the 13 consecutive year and recorded highest income for the 9th consecutive year. 2) Sales by Segment and Sales by Service are as follows Sales by Segment Fiscal Year From April 1, 2020 To March 31, 2021 Fiscal Year From April 1, 2021 To March 31, 2022 Sales by Service Amount Rate (%) Amount Rate (%) (Thousand yen) Rate of change (%) Asset Management 4,995,873 66.7 5,949,302 73.2 19.1 Consolidated sales 7,485,655 100.0 1,835,871 653,911 2,489,782 24.5 8.7 33.3 1,568,218 605,766 2,173,984 8,123,286 19.3 7.5 26.8 100.0 △14.6 △7.4 △12.7 8.5 Asset Management Business Financial Services Business Data Solutions Media Solutions Total Asset Management Business • Asset Management In addition to expanding the investment balance of publicly offered index funds provided by SBI Asset Management Co., Ltd., the investment balance of privately placed investment trusts of SBI Bond Investment Management Co., Ltd. and SBI Regional Creation Asset Management Co., Ltd., which support securities management of regional financial institutions, has increased. The balance of net assets of investment trusts managed by the Group increased by 828.5 billion yen (28.9%) from 2,869.1 billion yen at the end of the previous consolidated fiscal year to 3,697.6 billion yen at the end of the current consolidated fiscal year, and trust fees increased. As a result, sales of Asset Management of the Fiscal Year ended March 31, 2022 were 5,949 million yen, an increase of 953 million yen (19.1%) from 4,995 million yen in the previous fiscal year. Financial Services Business • Data Solutions Sales of fund data from tablet apps increased as the number of tablet apps provided increased by 11,642 (11.3%) from 103,038 at the end of the previous consolidated fiscal year to 114,680 at the end of the current consolidated fiscal year. On the other hand, as for stock data, although sales of the stock newspaper WEB version increased, the stock newspaper subscription fee has disappeared due to the suspension of the daily paper-based “stock newspaper” on March 31, 2021. As a result, sales of Data Solutions of the Fiscal Year ended March 31, 2022 were 1,568 million yen, a decrease of 267 million yen (-14.6%) from 1,835 million yen in the previous fiscal year. • Media Solutions Face-to-face asset management seminars could not be held due to priority measures such as declarations of a state of emergency and other COVID-19 infection prevention measures, but by switching the face-to-face seminars to online-centric and holding hybrid seminars that combine face-to-face and online sales, sales of seminars and online advertising sales also increased. However, sales of the Gomez Consulting Business decreased due to the transfer of the Gomez Consulting Business on July 1, 2021 through a company split. As a result, sales of Media Solutions of the Fiscal Year ended March 31,2022 were 605 million yen, a decrease of 48 million yen (-7.4%) from 653 million yen in the previous fiscal year. By segment, sales of the Asset Management Business were 5,949 million yen, an increase of 953 million yen (19.1%) from 4,995 million yen in the same period last year. Segment income was 1,557 million yen, an increase of 461 million yen (42.1%) from 1,095 million yen in the previous fiscal year. Sales of the Financial Services Business were 2,173 million yen, a decrease of 315 million yen (-12.7%) from 2,489 million yen in the previous fiscal year. Segment income was 572 million yen, a decrease of 97 million yen (-14.5%) from 669 million yen in the previous fiscal year. In the financial services business, the daily stock newspaper “Kabushikishinbun” was suspended on March 31, 2021. In addition, on July 1, 2021, the Gomez Consulting Business was transferred through a company split. The current financial services business, which does not include stock newspapers (paper media) and Gomez Consulting Business, has sales of 2,093 million yen, an increase of 98 million yen (4.9%) from 1,995 million yen in the previous fiscal year. Operating income increased by 86 million yen (19.8%) from 439 million yen in the previous fiscal year to 526 million yen. 3) Overview of non-consolidated business performance The Company suspended the daily “Stock Newspaper” on March 31, 2021, and on April 1, 2021, the stock newspaper business and the Searchina business, excluding the daily “Stock Newspaper”, were split into companies. It was succeeded by e-Advisor Co., Ltd., a wholly owned subsidiary. As a result, sales related to the stock newspaper business and the Searchina business decreased. In addition, on July 1, 2021, the Gomez Consulting Business was transferred outside the Group due to a company split, resulting in a decrease in sales related to the Gomez Consulting Business. As a result, sales decreased by 578 million yen (-23.0%) from 2,513 million yen in the previous fiscal year to 1,935 million yen, and operating income was 477 million yen from 683 million yen in the previous fiscal year, a decrease of 206 million yen (-30.1%). The Company received a dividend of 1,999 million yen from a subsidiary in order to use it as a source of dividends to our shareholders. As a result, ordinary income increased by 1,717 million yen (183.7%) from 955 million yen in the previous fiscal year to 2,652 million yen, and net income increased by 2,124 million yen (322.6%) to 2,783 million yen from 658 million yen in the previous fiscal year. (2) Explanation on financial position Total assets decreased by 134 million yen from the end of the previous consolidated fiscal year to 14,055 million yen. This was due to an increase of 1,190 million yen in current assets, and a decrease of 1,320 million yen in fixed assets. The increase in current assets was mainly due to increases of 271 million yen in cash and deposits, 305 million yen in accounts receivable, and 613 million yen in other current assets. The increase in cash and deposits was due to the payment of dividends of 1,479 million yen, income of 620 million yen from the sale of investment securities, and cash inflow of 1,128 million yen from operating activities. The increase in accounts receivable is due to the increase in sales. The increase in other current assets was due to an accrued tax of 627 million yen on dividends from subsidiaries. The decrease in fixed assets was due to a decrease of 961 million yen in investment securities and a decrease of 345 million yen in intangible fixed assets. Investment securities decreased due to a decrease in managed investment securities. The decrease in intangible fixed assets was due to amortization, in addition to a loss on retirement of software of 139 million yen and an impairment loss on goodwill of 50 million yen. Total liabilities decreased by 49 million yen from the end of the previous consolidated fiscal year to 1,781 million yen. The decrease in debt was mainly due to a decrease in accounts payable by 50 million yen. When an additional 33% of the shares of Carret Holdings, Inc., the holding company of the US asset management company Carret Asset Management LLC, which is a subsidiary, was acquired, the difference between the investment amount and the equity increase amounted to 427 million yen, resulting in capital surplus decreased by the same amount. As a result, a net income attributable to owners of parent of 1,454 million yen was recorded and dividends of 1,479 million yen were paid during the Fiscal Year (twelve months) ended March 31, 2022, and retained earnings decreased by 25 million yen to 4, 439 million yen. Valuation difference on other securities decreased mainly due to a valuation loss on investment securities of 326 million yen. As a result, total net assets decreased by 85 million yen from the end of the previous consolidated fiscal year to 12,273 million yen. (3) Analysis of cash flow The balance of cash and cash equivalents at the end of the current consolidated fiscal year increased by 271 million yen from the end of the previous consolidated fiscal year to 5,176 million yen. The status of each cash flow is as follows. (Cash flows from operating activities) Cash flows from operating activities decreased by 976 million yen from the previous consolidated fiscal year to 1,128 million yen. This is mainly due to the recording of income before income taxes and minority interests of 2,478 million yen, the amount of income taxes paid of 667 million yen, and the provisional tax to be refunded of 627 million yen related to dividends received from other corporate groups. (Cash flows from investing activities) Cash flows from investing activities increased by 2,491 million yen from the previous consolidated fiscal year to 1,324 million yen. This was mainly due to the fact that while there was no expenditure for the acquisition of investment securities in the current fiscal year, income of 1,609 million yen was generated from the sale and cancellation of the specified comprehensive trust property, and the acquisition of intangible fixed assets was 311 million yen. (Cash flows from financing activities) Cash flows from financing activities decreased by 1,757 million yen from the previous consolidated fiscal year to 2,149 million yen. This was mainly due to the fact that no income was generated from the public offering in the current fiscal year, the dividend payment amount was 1,479 million yen, and the expenditure from the acquisition of subsidiary shares without changing the scope of consolidation was 609 million yen. (4) Explanation about future forecast information such as consolidated earnings forecast In the asset management business, SBI Asset Management Co., Ltd., which provides publicly offered additional stock investment trusts, contributes to the asset formation of investors by providing index funds at low cost and would like to expand the profit of the Group. In addition, SBI Bond Investment Management Co., Ltd. and SBI Regional Revitalization Asset Management Co., Ltd., which manages privately-offered investment trusts, will manage the funds entrusted by regional financial institutions with high profitability, and contribute to the performance of regional financial institutions, while at the same time, increasing the investment balance of the Group and stably expanding our earnings base. In the financial services business, we would like to build a system that can respond swiftly and appropriately to the rapidly changing information environment, and always provide products and services that utilize the latest information equipment and communication tools. In addition, we would like to provide services that meet the specific measures of fiduciary duty (customer-oriented business operation) promoted by sales financial institutions. In particular, we are striving to increase the number of tablet apps that sales staff of financial institutions can use to explain financial products appropriately to individual investors, and we will contribute to fiduciary duty by ensuring that more investors can receive appropriate explanations of financial products. At the same time, we would like to expand the stable earnings base of the Group based on these two core businesses. Currently, the outlook for COVID-19 infections is still uncertain, although it is expected that economic activities will pick up after lifting priority measures to prevent infection was lifted in all regions in March 2022. In the responding to COVID-19, although we were unable to hold face-to-face asset management seminars during the current consolidated fiscal year, sales of web-ads as well as sales of seminars increased from the previous consolidated fiscal year by switching our focus on online seminars from face-to-face seminars and holding hybrid seminars combining face-to-face and online seminars. Meanwhile, the online seminars that have attracted customers on the Internet, which had started to cover the impact of the decrease in the number of seminars held face-to-face by attracting customers to the seminar venue, are now gaining popularity with more than 30,000 participants annually. We will continue to attract customers for online seminars in the fiscal year ending March 2023 to expand the revenue base of media solutions. Regarding the forecast for the current fiscal year (April 1, 2022 to March 31, 2023), it is difficult to predict the financial market trends closely related to our business, including the impact of COVID-19 infections, for the full fiscal year. For this reason, it is difficult to make a rational calculation of the business results at this time, so we have not yet decided. 2. Basic concept regarding the selection of accounting standards The Group currently conducts its business mostly in Japan, and since there are few activities overseas, it has adopted Japanese GAAP in consideration of the cost of adopting IFRS (International Financial Reporting Standards). In the future, we will consider adopting IFRS when the need to adopt IFRS for the Group arises. Consolidated Financial Statements and major notes 3. (1) Consolidated Balance Sheet Fiscal Year ended March 31, 2021 Fiscal Year ended March 31, 2022 (Thousand yen) ASSETS Current assets Cash and cash equivalents Accounts receivable Inventories Other current assets Total current assets Non-current assets Tangible fixed assets Leasehold improvement Accumulated depreciation Leasehold improvement : net Furniture, fixtures and equipment Accumulated depreciation Furniture, fixtures and equipment : net Lease equipment under capital Total tangible fixed assets Intangible fixed assets Goodwill Software Other intangible assets Total intangible assets Investments and other assets Investment securities Deferred tax assets Other investments and other assets Total investments and other assets Total noncurrent assets Deferred assets Stock issuance cost Total deferred assets TOTAL ASSETS (All the figures less than 1,000 are rounded down) (Thousand yen) 4,904,634 1,306,261 1,252 201,592 6,413,742 159,510 △101,091 58,418 309,977 △281,985 27,991 155,615 242,025 1,892,815 1,294,494 304,295 3,491,605 3,585,678 223,214 209,851 4,018,745 7,752,376 23,732 23,732 14,189,850 5,176,612 1,611,378 1,263 814,825 7,604,080 159,445 △107,516 51,929 197,044 △168,111 28,932 69,089 149,951 1,786,713 1,076,849 282,050 3,145,612 2,624,582 345,615 166,511 3,136,709 6,432,274 19,003 19,003 14,055,358 LIABILITIES Current liabilities Accounts payable-trade Accounts payable-other Lease payable Income taxes payable Consumption taxes payable Other current liabilities Total current liabilities Non-current liabilities Long-term lease payable Total non-current liabilities TOTAL LIABILITIES NET ASSETS Shareholders’ equity Common stock Capital surplus Retained earnings Treasury stocks Fiscal Year ended March 31, 2021 Fiscal Year ended March 31, 2022 (Thousand yen) (Thousand yen) 1,795,121 1,781,813 62,838 798,850 128,059 457,220 93,566 254,586 35,798 35,798 1,830,919 3,363,635 4,906,035 4,464,870 △29 12,734,512 △627,728 △95,418 △723,146 347,566 12,358,931 14,189,850 62,618 748,528 69,089 464,822 90,498 346,255 – – 1,781,813 3,363,635 4,478,772 4,439,392 △29 12,281,770 △513,787 36,309 △477,478 469,252 12,273,545 14,055,358 Total shareholders’ equity Accumulated other comprehensive income Valuation difference on other securities Foreign currency translation adjustments Total accumulated other comprehensive income Non-controlling shareholders’ equity TOTAL NET ASSETS TOTAL LIABILITIES AND NET ASSETS (All the figures less than 1,000 are rounded down) (2) Consolidated Statement of income Sales Cost of sales Gross profit Selling, general and administrative expenses Operating income Non-operating income Interest income Dividends income Gain on sale of investment securities Equity in gain of affiliates Foreign exchange gains Other non-operating income Non-operating expenses Interest expenses Foreign exchange losses Stock issuance cost Other non-operating expenses Ordinary income Extraordinary profit Extraordinary loss Gain on sale of investment securities Impairment loss of goodwill Loss on sale of investment securities Loss on valuation of investment securities Impairment loss of intangible fixed assets Income before income taxes Income taxes-current Income taxes-deferred Profit Net income attributable to non-controlling interests Net income attributable to owners of parent (All the figures less than 1,000 are rounded down) Consolidated Statement of Comprehensive income Profit Other comprehensive income Comprehensive income (Breakdown) Valuation difference on available-for-sale securities Foreign currency translation adjustments Deferred gains or losses on hedges 201,598 △116,983 △3,343 Comprehensive income attributable to owners of the parent Comprehensive income attributable to non-controlling interests (All the figures less than 1,000 are rounded down) Fiscal Year From April 1, 2020 To March 31, 2021 Fiscal Year From April 1, 2021 To March 31, 2022 (Thousand yen) 7,485,655 3,556,727 3,928,927 2,163,521 1,765,406 409,706 19,414 2,155,698 – – 2,155,698 673,950 1,481,747 163,218 1,318,528 224,405 140,931 26,295 5,688 10,840 1,544 16,447 – – 2,967 – – – – – 660,110 13,839 197,072 62,335 26,918 – – 7,331 – 7,436 9,278 3,054 594,466 50,408 4,035 326,300 139,365 878,051 △115,515 (Thousand yen) 8,123,286 3,654,398 4,468,888 2,339,083 2,129,805 293,659 19,769 2,403,695 594,466 520,110 2,478,052 762,535 1,715,516 261,382 1,454,134 Fiscal Year From April 1, 2020 To March 31, 2021 Fiscal Year From April 1, 2021 To March 31, 2022 (Thousand yen) 1,481,747 81,272 1,563,020 1,422,100 140,919 (Thousand yen) 1,715,516 284,488 2,000,005 113,941 170,547 1,699,802 300,202 Consolidated Statement of Changes in Shareholders’ Equity Fiscal Year ended March 31, 2021 As of April 1, 2020 2,115,620 3,371,967 Shareholders’ equity Common stock Capital surplus Retained earnings Treasury stocks Total shareholders’ equity 1,248,015 4,431,174 △186,865 △1,284,832 9,731,896 △1,284,832 2,496,030 186,835 473,369 1,318,528 1,318,528 1,248,015 286,534 △480 △480 1,248,015 3,363,635 1,534,068 4,906,035 33,696 4,464,870 186,835 △29 3,002,615 12,734,512 Accumulated other comprehensive income Valuation difference on securities △829,327 Foreign currency translation adjustments △735 Deferred gains or losses on hedges Total Non-controlling shareholders’ equity TOTAL NET ASSETS 3,343 △826,718 9,108,582 203,405 △1,284,832 2,496,030 473,369 1,318,528 △480 Fluctuation amount for the current period Dividends from retained earnings Issuance of new shares through public offering Disposal of treasury stock due to the exercise of stock options Net income attributable to owners of parent Increase / decrease in equity due to acquisition of shares of consolidated subsidiary Decrease in equity due to transfer of shares of consolidated subsidiary Net income attributable to non-controlling interests Net changes of items other than shareholders’ equity Total changes during the period As of March 31, 2021 As of April 1, 2020 Fluctuation amount for the current period Dividends from retained earnings Issuance of new shares through public offering Disposal of treasury stock due to the exercise of stock options Net income attributable to owners of parent Increase / decrease in equity due to acquisition of shares of consolidated subsidiary Decrease in equity due to transfer of shares of consolidated subsidiary Net income attributable to non-controlling interests Net changes of items other than shareholders’ equity 19,058 19,058 144,160 163,218 201,598 △113,741 △3,343 84,513 84,513 Total changes during the period As of March 31, 2021 201,598 △94,683 △627,728 △95,418 △3,343 103,571 ― △723,146 144,160 347,566 3,250,348 12,358,931 Consolidated Statement of Changes in Shareholders’ Equity Fiscal Year ended March 31, 2022 As of April 1, 2021 Fluctuation amount for the current period Dividends from retained earnings Net income attributable to owners of parent Increase / decrease in equity due to acquisition of shares of consolidated subsidiary Net income attributable to non-controlling interests Net changes of items other than shareholders’ equity Total changes during the period As of March 31, 2022 As of April 1, 2021 Fluctuation amount for the current period Dividends from retained earnings Net income attributable to owners of parent Increase / decrease in equity due to acquisition of shares of consolidated subsidiary Net income attributable to non-controlling interests Net changes of items other than shareholders’ equity Total changes during the period As of March 31, 2022 Shareholders’ equity Common stock Capital surplus Retained earnings Treasury stocks 3,363,635 4,464,870 4,906,035 △1,479,612 1,454,134 △427,263 Total shareholders’ equity 12,734,512 △1,479,612 1,454,134 △427,263 △29 △427,263 4,478,772 △25,478 4,439,392 3,363,635 △29 △452,741 12,281,770 Valuation difference on securities Accumulated other comprehensive income Foreign currency translation adjustments △627,728 △95,418 △723,146 Total Non-controlling shareholders’ equity TOTAL NET ASSETS 347,566 12,358,931 △1,479,612 1,454,134 △176,783 △604,047 261,382 261,382 113,941 131,727 245,668 37,088 282,757 113,941 △513,787 131,727 245,668 36,309 △477,478 121,686 469,252 △85,385 12,273,545 (4) Consolidated Cash Flow Statement Cash flows from operating activities Income before income taxes Depreciation Amortization of long-term prepaid expenses Amortization of goodwill Amortization of stock issuance cost Loss (△gain) on sale of investment securities Loss (△gain) on valuation of investment securities Loss on retirement of fixed assets Impairment loss Interest and dividend income Foreign exchange losses (△gains) Interest expense Share of (△profit) loss of entities accounted for using equity method Decrease (△increase) in trade payables Decrease (△increase) in inventories Increase (△decrease) in trade receivables Decrease (△increase) in accounts receivable Increase (△decrease) in accounts payable – other Decrease (△increase) in other current assets Increase (△decrease) in other current liabilities Sub total Interest and dividend income received Interest expense paid Income taxes paid Income tax refund amount Net cash provided by (△used in) operating activities Cash flows from investing activities Purchase of property, plant and equipment Purchase of intangible assets Purchase of investment securities Proceeds from sales of investment securities Income from shares of subsidiaries resulting in change in scope of consolidation Proceeds from collection of guarantee deposits Payments for guarantee deposits Net cash provided by (△used in) investing activities Cash flows from financing activities Cash dividends paid Proceeds from short-term borrowings Expenditure for repayment of short-term borrowings Income from issuance of shares Income from disposal of treasury stock Income from sales of shares of subsidiaries resulting in no change in scope of consolidation Expenditure on acquisition of subsidiary shares without change in scope of consolidation Repayments of lease obligations Net cash provided by (△used in) financing activities 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 period Cash and cash equivalents at end of period Fiscal Year From April 1, 2020 To March 31, 2021 Fiscal Year From April 1, 2021 To March 31, 2022 (Thousand yen) 2,155,698 400,741 5,120 115,064 2,966 △26,295 – – – △365,336 △10,380 16,447 △5,688 △8,860 931 34,650 △35,347 60,780 15,683 114,307 2,470,481 61,464 △4,202 △428,961 6,177 2,104,959 △25,323 △585,435 △613,930 42,128 8,757 28,566 △21,750 △1,166,987 △1,284,832 1,000,000 △3,000,000 2,467,534 473,369 3,000 – △50,374 △391,302 △11,348 535,321 4,369,638 4,904,960 (Thousand yen) 2,478,052 449,754 4,927 111,904 9,278 △617,349 326,300 139,365 50,408 △259,407 7,185 – – △349,493 △5 △219 △586,958 △57,116 136,350 △123,566 1,719,409 70,037 – △667,271 5,955 1,128,130 △11,695 △311,807 – 1,609,199 38,750 – 1,324,447 △1,479,612 – – – – – – △609,154 △60,446 △2,149,212 △31,416 271,948 4,904,960 5,176,908 (5) Notes on Consolidated Financial Statements (Notes on the premise of a going concern) Not applicable (Notes on the changes in accounting policies) (Application of Accounting Standards for Revenue Recognition) The Company has applied the Accounting Standards for Revenue Recognition (Corporate Accounting Standards No. 29 of March 31, 2020; hereinafter referred to as “Revenue Recognition Accounting Standards”) since the beginning of the first quarter of the consolidated cumulative fiscal year under review and decided to recognize revenue at an amount expected to receive in exchange for goods or a service at the time of transfer of control of those goods or service promised to a customer. We apply the Revenue Recognition Accounting Standards accounting to the transitional handling specified in the proviso of Section 84 of the Revenue Recognition Accounting Standards. We have applied new accounting policies from the balance at the beginning of the first quarter of the current consolidated fiscal year by adding or subtracting an affected cumulative amount when the new accounting policies are retroactively applied before the beginning of the first quarter of that fiscal year. However, for the contracts for which almost all revenues have been recognized under the previous accounting method before the beginning of this consolidated fiscal year, the method stipulated in Article 86 of the Revenue Recognition Accounting Standard is not applied retroactively. The impact of this change on the profit & loss for the consolidated fiscal and the beginning balance of retained earnings was insignificant. (Application of Accounting Standards for Market Value Calculation) We have applied the Accounting Standards for Market Value Calculation (Corporate Accounting Standards No. 30 of July 4, 2019; hereinafter referred to as “Market Value Calculation Accounting Standards”) since the beginning of the first quarter of the current consolidated fiscal year and decided to apply the new accounting policies specified by the Market Value Calculation Accounting Standards over the future according to the transitional handling specified in Section 19 of the Market Value Calculation Accounting Standards and Section 44-2 of the Accounting Standards for Financial Instruments (Corporate Accounting Standards No. 10 of July 4, 2019). There is no impact of this change on the consolidated financial statements. (Important Matters as a Basis for Preparing Consolidated Financial Statements) 1. Matters concerning scope of consolidation As of March 31, 2022, the Group consists of the Company and the following 10 subsidiaries. (1) Names of consolidated subsidiaries E-Advisor Co., Ltd. SBI Asset Management Group Co., Ltd. Morningstar Asset Management Co., Ltd. SBI Asset Management Co., Ltd. Carret Holdings Inc. Carret Asset Management LLC SBI Bond Investment Management Co., Ltd. SBI Regional Revitalization Asset Management Co., Ltd. SBI Alternative Asset Management Co., Ltd. (2) Names of non-consolidated subsidiaries, etc. SBI Alternative Fund GK (Reason for excluding from the scope of consolidation) SBI Alternative Investments Co., Ltd. was excluded from the scope of consolidation because it merged with SBI Asset Management Co., Ltd. on May 1, 2021. SBI Alternative Fund GK is a business operator of an anonymous partnership business that manages investment trusts by the anonymous partnership method. Almost all profits and losses of the subsidiary, including the business of the anonymous partnership, belong to the anonymous partnership member and do not formally or substantially belong to the subsidiary or its parent company. Moreover, there are few transactions with the subsidiary. Since there is a risk that the consolidation of the subsidiary can significantly mislead the judgment of stakeholders, the subsidiary is excluded from the scope of consolidation in accordance with Section 19 of the Business Accounting Standards Application Guideline No. 22 “Application Guidelines for Determining the Scope of Subsidiaries and Affiliates in Consolidated Financial Statements”. 2. Matters concerning the application of the equity method (1) PT. Bina Investama Infonet has been excluded from the scope of the equity method due to the decline in its equity ratio due to the sale of its shares. (2) There are no affiliates accounted for by the equity method. 3. Matters concerning the fiscal year etc. of consolidated subsidiaries Of the consolidated subsidiaries, Carret Holdings Inc., and Carret Asset Management LLC . have a closing date of December 31. In preparing consolidated financial statements, the balance sheet as of December 31, 2021, and income statement and cash flow statement from January 1, 2021 to December 31, 2021 of Carret Holdings Inc. and Carret Asset Management LLC are consolidated. For important transactions that occurred between the consolidated closing date and fiscal year end of above companies, the necessary adjustments for consolidation are made. 4. Matters concerning accounting policy (1) Valuation basis and valuation method of important assets 1) Securities Debt to maturity Cost method Other securities Securities with market value Securities without market value Moving average cost method 2) Inventory 1) Tangible fixed assets The straight-line method 2) Intangible fixed assets The market value method based on the market price etc. of the account closing date (net unrealized gains (losses) are directly included in net assets, and cost of sales is computed using the moving average cost method) Cost method (method of devaluation of book value due to decline in profitability) Stocks … Total average method (2) Depreciation method of important depreciable assets The straight-line method Of software, software for internal use purposes is based on the straight-line method based on the in-house usable period (5 years), and software for market sales is based on the straight-line method based on the expected validity period (within 3 years) (3) Accounting standard for material allowances Allowance for bad debt Estimated uncollectible amounts are recorded for specific receivables, such as bad debts, taking into consideration recoverability individually. (4) Basis for converting significant foreign currency assets or liabilities into Japanese currency Assets and liabilities of foreign subsidiaries are converted into yen at the closing exchange rate on the closing date, and the conversion difference is included in the translation adjustment account and non-controlling interests in net assets. (5) Important hedge accounting methods 1) Hedge accounting method Deferred hedge processing is used. 2) Hedging method and hedged item Hedging method … Stock index futures Hedged item … Investment securities 3) Hedging policy To reduce the risk of price fluctuations, we hedge within the scope of the target assets. 4) Method of assessing hedge effectiveness During the period from the start of hedging to the time of effectiveness determination, the cumulative changes in the market value of the hedged item and the hedging instrument are compared, and judgment is made based on the amount of change in both. (6) Matters concerning amortization of goodwill Amortization of goodwill is equally amortized over 20 years. (7) Deferred stock delivery expenses Evenly depreciated for 3 years. (8) Scope of funds in consolidated statement of cash flows Cash (cash and cash equivalents) in the consolidated statement of cash flows consists of cash on hand, deposits that can be withdrawn on an as-needed basis, and short-term investments that can easily be redeemed with a redemption period within three months from the acquisition date, that bear only a small risk of value fluctuations. (9) Other important matters for preparing consolidated financial statements Accounting for consumption taxes This is based on the tax exclusion method. (Notes on Consolidated Balance Sheet) *1 Breakdown of inventories Fiscal Year ended March 31, 2021 Fiscal Year ended March 31, 2022 (Thousand yen) Supplies 1,252 *2 Investments in non-consolidated subsidiaries and affiliates (Thousand yen) Fiscal Year ended March 31, 2021 Fiscal Year ended March 31, 2022 Investment securities (shares) 5,070 (Notes on Consolidated Statement of Income) * Major items of selling and general administrative expenses Fiscal Year ended March 31, 2021 (April 1, 2020 – March 31, 2021) (Thousand yen) Fiscal Year ended March 31, 2022 (April 1, 2021 – March 31, 2022) Employee’s salaries Executive’s salaries Retirement benefit costs 873,400 371,029 12,727 1,003,493 356,587 12,232 1,263 5,000 (Notes on shareholders’ equity) I Fiscal Year ended March 31, 2021 (April 1, 2020 – March 31, 2021) 1. Type and total number of outstanding shares Beginning of fiscal year Increase number of fiscal year Decrease number of fiscal year Ending of fiscal year Outstanding shares Common stock Total 83,973,600 83,973,600 5,700,000 5,700,000 ― ― 83,973,600 83,973,600 (Note) The increase in the number of shares for the current consolidated fiscal year of 5,700,000 is due to the issuance of new shares through public offering. 2. Type and number of treasury stock Beginning of fiscal year Increase number of fiscal year Decrease number of fiscal year Ending of fiscal year Treasury stock Common stock Total 1,081,700 1,081,700 ― ― 1,081,000 1,081,000 170 170 (Note) The decrease in the number of shares for the current consolidated fiscal year of 1,081,000 is due to the disposal of treasury stock through public offering. 4. Self-stock acquisition rights 3. Stock option Not applicable Not applicable 5. Dividends (1) Dividends paid Resolution of May 19, 2020 board of directors Kind of shares Common stock Source of dividends Total dividends (Thousand yen) Dividend per share (yen) Date of right allotment Effective date Retained earnings 663,139 8.00 June 1, 2020 March 31, 2020 Resolution of September 16, 2020 board of directors Kind of shares Source of dividends Total dividends (Thousand yen) Dividend per share (yen) Date of right allotment Effective date Common stock Retained earnings 621,693 7.50 September 30, 2020 November 16, 2020 (2) Dividends for which the record date belongs to the current consolidated fiscal year and the effective date of dividends belongs to the following consolidated fiscal year. Resolution of May 14, 2021 board of directors Kind of shares Common stock Source of dividends Total dividends (Thousand yen) Dividend per share (yen) Date of right allotment Effective date Retained earnings 762,224 8.50 June 1, 2021 March 31, 2021 II Fiscal Year ended March 31, 2022 (April 1, 2021 – March 31, 2022) 1. Type and total number of outstanding shares Beginning of fiscal year Number of increase for fiscal year Number of decrease for fiscal year Ending of fiscal year ― ― ― ― ― ― ― ― 89,673,600 89,673,600 170 170 Number of increase for fiscal year Number of decrease for fiscal year Ending of fiscal year Outstanding shares Common stock Total 89,673,600 89,673,600 2. Type and number of treasury stock Beginning of fiscal year Treasury stock Common stock Total 3. Stock Option Not applicable 170 170 4. Self-stock acquisition rights Not applicable 5. Dividends (1) Dividends paid Resolution of Kind of shares Source of dividends Total dividends (Thousand yen) Dividend per share (yen) Date of right allotment Effective date May 14, 2021 board of directors Common stock September 22, 2021 board of directors Common stock Retained earnings Retained earnings 762,224 717,387 8.50 8.00 March 31, 2021 September 30, 2021 June 1, 2021 December 1, 2021 (2) Dividends for which the record date belongs to the current consolidated fiscal year and the effective date of dividends belongs to the following consolidated fiscal year. Resolution of (plan) Kind of shares May 19, 2022 board of directors Common stock Source of dividends Retained earnings Total dividends (Thousand yen) Dividend per share (yen) Date of right allotment Effective date 807,060 9.00 June 1, 2022 March 31, 2022 * 1 Relationship between the balance of cash and cash equivalents at the end of the period and the amount (Notes on Consolidated Cash Flow Statement) of items posted on the consolidated balance sheet Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 Cash and cash equivalents Deposit to securities company account (of other current assets) Balance of cash and cash equivalents at the end of Fiscal Year (Thousand yen) 4,904,634 325 4,904,960 (Thousand yen) 5,176,612 296 5,176,908 * 2 Main breakdown of assets and liabilities of the company that became a consolidated subsidiary due to the acquisition of shares Fiscal Year ended March 31, 2021 (April 1, 2020 – March 31, 2021) The amounts of assets and liabilities of the company that became a new consolidated subsidiary due to the acquisition of shares in the current consolidated fiscal year are omitted because they are not significant. Fiscal Year ended March 31, 2022 (April 1, 2021 – March 31, 2022) Not applicable (Notes on Tax) Fiscal Year ended March 31, 2021 1 Deferred tax assets and deferred tax liabilities by Fiscal Year ended March 31, 2022 1 Deferred tax assets and deferred tax liabilities by major cause Breakdown (Deferred tax asset) Disallowed business tax payable Disallowed account payable Unrealized profit Other securities valuation difference Other Total deferred tax assets (Thousand yen) 32,605 5,091 23,601 165,735 △3,819 major cause Breakdown (Deferred tax asset) Disallowed business tax payable Disallowed account payable Unrealized profit Other securities valuation difference Loss of impairment Other 223,214 Total deferred tax assets (Thousand yen) 41,506 16,970 14,718 124,819 122,910 24,690 345,615 “Impairment loss” (4,077 thousand yen in the previous consolidated fiscal year), which was included in “Others” in the previous consolidated fiscal year, is posted independently because it has become more important. 2 Breakdown of the main items that caused the 2 Breakdown of the main items that caused the difference between the legally effective tax rate and the tax burden rate after application of tax effect accounting Description is omitted because the difference between the statutory effective tax rate and the tax burden rate after application of tax effect accounting is less than 5% of the statutory effective tax rate. difference between the legally effective tax rate and the tax burden rate after application of tax effect accounting Description is omitted because the difference between the statutory effective tax rate and the tax burden rate after application of tax effect accounting is less than 5% of the statutory effective tax rate. (Segment information etc.) [Segment information] 1. Summary of reporting segments The Group’s reporting segments have separate financial information available from the Group’s constituent units and are subject to regular review by the Board of Directors to determine resource allocation decisions and assess performance. The main business contents by reporting segment (as of March 31, 2022) are as follows. (Asset Management Business) Business that provides investment management and investment advice such as investment trust setting, solicitation, and management based on the Financial Instruments and Exchange Act Service classification Main business contents Asset management Establishment of investment trusts centered on publicly offered additional stock investment trusts and privately offered bond-type investment trusts, investment management such as offering and management, investment advisory services for funds of funds, defined contribution pension-related consulting, etc. (Note) Companies belonging to the segment SBI Asset Management Group Co., Ltd., SBI Asset Management Co., Ltd., Morning Star Asset Management Co., Ltd., Carret Holdings, Inc., Carret Asset Management LLC, , SBI Bond Investment Management Co., Ltd., SBI Regional Revitalization Assets Co., Ltd., SBI Alternative Asset Management Co., Ltd. ,SBI Alternative Fund G. K. (Financial Services Business) Business that collects information on finance, websites, etc., compares, analyzes, evaluates, and processes the accumulated information, provides it to customers, and provides consulting. Service classification Main business contents Daily web-based “stock newspaper” sales, stock and corporate information distribution, fund analysis report, domestic stock report, US stock report, provision of custom fund data to financial institutions and media such as “Star Rating”, selection / announcement / license provision of Fund of the Year, provision of domestic investment trust comparison analysis tool / overseas fund comparison analysis tool, provision of stock information of domestic listed companies owned by overseas institutional investors, Morning Star Direct Japan Version development and provision, localization of various investment tools developed by Morning Star in the United States, provision of paid information for Morning Star Mobile, provision of paid information for WEB, consulting for financial product sales institutions, consulting for defined contribution pension plans, provision of investment advice for employees of companies that adopt defined contribution pension plans, development and provision of e-learning tools, development and provision of various investment education related products, defined contribution pension plan, individual defined contribution pension plan (iDeCo), small investment tax exemption system (NISA) related WEB operation and planning, content creation and provision, investment solution development provision, provision of Hong Kong and mainland China market data and corporate information to financial institutions, sales of tablet application data ETF (Listed Investment Trust Plan) evaluation information, corporate creditworthiness evaluation / bond rating, virtual currency evaluation information, etc. Advertising on our website (Morningstar website, Chinese information site “Searchna”), consulting income related to advertising of financial product sales institutions in various media, marketing consulting, advertising agency business, newspaper advertising, implementation of seminars on IR / life planning / asset operation etc., life planning support work such as provision of simulation tools, development and provision of e-learning tools, development and provision of various investment education related products, etc. Data Solutions Media Solutions (Note) Company belonging to the segment, Morningstar Japan KK, E-Advisor Co., Ltd. 2. Procedure for calculating the amount of sales, profits or losses, assets, liabilities and other items in the reporting segment The method of accounting for the reported business segments is the same as described in “Important matters that are the basis for preparing consolidated financial statements.” Profit for the reporting segment is based on operating income. The amount of sales, profits, assets, liabilities and other items of the “asset management business” is the total of the amounts of sales, profits, assets, liabilities and other items of the following subsidiaries. SBI Asset Management Group Co., Ltd., SBI Asset Management Co., Ltd., Morning Star Asset Management Co., Ltd., Carret Holdings, Inc., Carret Asset Management LLC, SBI Alternative Investments Co., Ltd. , SBI Bond Investment Management Co., Ltd., SBI Regional Creation Asset Management Co., Ltd., SBI Alternative Asset Management Co., Ltd. Of the consolidated subsidiaries, Carret Holdings Inc., and Carret Asset Management LLC. have a closing date of December 31. In preparing the segment information, Carret Holdings, Inc. and Carret Asset Management LLC have decided on assets, liabilities and other items as of December 31, 2020, the figures for sales, profits, and other items from January 1, 2020 to December 31, 2020 are used. For important transactions that occurred between the consolidated closing date and fiscal year end of above companies, the necessary adjustments for consolidation are made. For the amount of sales, profits, assets, liabilities and other items of the “Financial Service Business”, the aggregated figures of the sales, profits, assets, liabilities and other items of Morningstar Japan KK and e-Advisor Co., Ltd. are used. Internal sales or transfers between segments are determined by consultation taking into account market prices. 3. Information on sales and income or loss for each reporting segment Fiscal Year ended March 31, 2021 (April 1, 2020 – March 31, 2021) Total 4,995,946 2,513,770 7,509,716 Segment operating income 1,095,577 669,829 1,765,406 Sales Sales to external customers Internal sales or transfers between segments Segment assets Segment liabilities Other Depreciation expense Amortization of goodwill Increase in tangible and intangible fixed assets Sales Sales to external customers Internal sales or transfers between segments Total Segment operating income Segment assets Segment liabilities Other Depreciation expense Amortization of goodwill Increase in tangible and intangible fixed assets Reporting segment Asset Management Business Financial Services Business Total (Thousand yen) Matters concerning difference adjustment Amount recorded on consolidated financial statements 4,995,873 2,489,782 7,485,655 – 7,485,655 72 23,988 24,060 △24,060 – 7,422,203 9,186,982 16,609,186 3,901,808 12,415 89,399 348,446 388,325 25,665 4,250,254 400,741 115,064 15,365 606,326 621,691 – △24,060 – △2,419,338 △2,419,338 – – 7,485,655 1,765,406 14,189,848 1,830,916 400,741 115,064 621,691 Reporting segment Financial Services Business Total Asset Management Business 5,949,302 2,173,984 8,123,286 – (Thousand yen) Matters concerning difference adjustment Amount recorded on consolidated financial statements 73 24,088 24,161 △24,161 5,949,376 1,557,255 7,426,371 3,949,248 15,461 86,238 2,198,072 572,549 8,147,448 2,129,805 9,084,079 16,510,451 4,236,905 449,754 111,904 287,657 434,292 25,665 △24,161 – △2,455,092 △2,455,092 – – 8,581 280,112 288,693 – 288,693 8,123,286 – 8,123,286 2,129,805 14,055,358 1,781,813 449,754 111,904 Fiscal Year ended March 31, 2022 (April 1, 2021 – March 31, 2022) 4. Difference between the total of reporting segments and the consolidated income statement and the main content of the difference (matters concerning difference adjustment) Fiscal Year ended March 31, 2021 (Thousand yen) Fiscal Year ended March 31, 2022 Sales Total of reporting segment Elimination of transactions between segments Net sales in the consolidated income statement Segment operating income Fiscal Year ended March 31, 2021 Total of reporting segment Elimination of transactions between segments Operating income in the consolidated income statement Segment assets Total of reporting segment Elimination of transactions between segments Assets in the consolidated balance sheet Segment liabilities Total of reporting segment Elimination of transactions between segments Liabilities in the consolidated balance sheet 7,509,716 △24,060 7,485,655 1,765,406 – 1,765,406 Fiscal Year ended March 31, 2021 16,609,189 △2,419,338 14,189,850 Fiscal Year ended March 31, 2021 4,250,257 △2,419,338 1,830,919 (Thousand yen) Fiscal Year ended March 31, 2022 8,147,448 △24,161 8,123,286 2,129,805 – 2,129,805 (Thousand yen) Fiscal Year ended Mar