日本パレットプール（4690） – Summary of Consolidated Financial Results(Japanese Accounting Standards)for Fiscal Year Ending March 2022

Summary of Consolidated Financial Results (Japanese Accounting Standards) for Fiscal Year Ending March 2022 Listed company name NIPPON PALLET POOL CO.,LTD. Tokyo Stock Exchange Stock exchange May 9, 2022 4690 URL https://www.npp-web.co.jp (Position) President & CEO Mitsuru Uematsu (Position) Head of finance Tomoki Soga Telephone: 06(6373)3231 June 24, 2022 June 27, 2022 Scheduled date of commencement of dividend payments Code Representative Inquiries Scheduled date of general shareholders’ meeting Scheduled date of filing of securities reports Supplementary documents Quarterly results briefing June 27, 2022 : No : No Fiscal year ending March 2022 Fiscal year ended March 2021 1. Results for fiscal year ending March 2022 (from April 1, 2021 to March 31, 2022) (1) Consolidated operating results (Rounded down to the nearest million JPY) (percentages represent year-on-year changes) Revenue Operating income Ordinary profit 1M JPY 7,094 ％ 1.9 1M JPY ％ 1M JPY ％ 459 △21.7 647 △12.5 272 △39.8 Net income for the period 1M JPY ％ 6,962 △0.8 586 13.6 740 10.9 452 3.9 Net income per share JPY 1/100th JPY Diluted net income per share JPY 1/100th JPY Return on equity (ROE) Fiscal year ending March 2022 Fiscal year ended March 2021 162.12 269.12 ― ― Ordinary income as percentage of total assets Operating income on sales ％ 5.5 9.7 ％ 6.3 7.2 (For reference) Equity in earnings of affiliates Fiscal year ending March 2022 ― 1M JPY Fiscal year ended March 2021 ― 1M JPY (Note) NIPPON PALLET POOL conducted a stock split at a ratio of 2 shares per share of common stock on July 1, 2021. Net income per share is calculated assuming that the stock split occurred at the beginning of the previous fiscal year. ％ 6.5 8.4 (2) Consolidated financial position Total assets Net assets Equity ratio Fiscal year ending March 2022 Fiscal year ended March 2021 1M JPY 10,361 10,235 1M JPY 5,063 4,911 Net assets per share JPY 1/100th JPY 3,008.86 2,918.25 ％ 48.9 48.0 (For reference) Shareholders’ equity 1M JPY (Note) NIPPON PALLET POOL conducted a stock split at a ratio of 2 shares per share of common stock on July 1, Fiscal year ending March 2022 Fiscal year ended March 2021 1M JPY 5,063 4,911 2021. Net assets per share is calculated assuming that the stock split occurred at the beginning of the previous fiscal year. ―1― (3) Consolidated cash flows Fiscal year ending March 2022 Fiscal year ended March 2021 2. Dividends Fiscal year ended March 2021 Fiscal year ending March 2022 Fiscal year ending March 2023 (projection) Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities Cash and cash equivalents at end of period 1M JPY 2,750 2,953 1M JPY △2,721 △2,168 1M JPY △141 △511 1M JPY 749 861 Annual dividends per share End of Q1 End of Q2 End of Q3 Year end Annual Total dividends (Total) Payout Ratio Ratio of dividends to net assets JPY JPY JPY JPY 1M JPY ％ ％ 1/100th JPY 1/100th JPY JPY 1/100th JPY 1/100th JPY 1/100th JPY ― 0.00 ― 70.00 70.00 58 13.0 1.2 ― 0.00 ― 40.00 40.00 67 24.7 1.3 ― 0.00 ― 35.00 35.00 11.8 (Note) 1. NIPPON PALLET POOL conducted a stock split at a ratio of 2 shares per share of common stock on July 1, 2021. Results for the fiscal year ending March 2022 and projections for the fiscal year ending March 2023 reflect those after a stock split. For the fiscal year ended March 2021, the actual amount of dividends prior to the stock split is listed. 2. Fiscal year ending March 2022, breakdown of dividends: ordinary dividend per share, 35.00 JPY; commemorative (50th anniversary) dividend per share: 5.00 JPY ―2― 1. Consolidated financial results forecast for fiscal year ending March 2023 (from April 1, 2022 to March 31, 2023) (percentages represent year-on-year changes) Net sales Operating income Ordinary income Net income for the period Net income per share 1M JPY ％ 1M JPY ％ 1M JPY ％ 1M JPY ％ JPY Full year 7,185 1.3 700 52.2 800 23.5 500 83.3 1/100th JPY 297.10 * Notes (1) Changes in accounting policies, changes or restatements of accounting estimates (i) Changes in accounting policies due to revisions to accounting standards, etc. (ii) Changes in accounting policies for reasons other than (i) above (iii) Changes in accounting estimates (iv) Restatements of accounting estimates ： No ： No ： Yes ： No (2) Number of shares issued (common stock) (ii) Treasury stock at end of period (i) Number of shares issued at end of period (including treasury stock) shFiscal year arending March es 2022 shFiscal year arending March es 2022 shyear Fiscal arending March es 2022 (Note) NIPPON PALLET POOL conducted a stock split at a ratio of 2 shares per share of common stock on July 1, Fiscal year ended March 2021 Fiscal year ended March 2021 year Fiscal ended March 2021 (iii) Average number of issued shares shares shares shares 1,700,000 1,682,960 1,700,000 1,682,960 17,040 17,040 2021. The number of shares issued at the end of the period, treasury stock at the end of the period, and average number of issued shares, assume a stock split at the start of the prior fiscal year. * This summary of accounts is not included in audits by certified public accountants or audit firms. * Remarks on proper use of results forecasts and other notes – The forward-looking statements, including results forecasts, in this document are based on information that NIPPON PALLET POOL obtained at the time of publication and certain assumptions that it believes to be reasonable. Actual results may differ materially from the forecasts due to a variety of reasons. For the assumptions of results forecasts and notes on the use of results forecasts, please refer to “1. Qualitative information on results, (4) Future outlook” on page two of the accompanying materials. ―3― ○ Contents of accompanying materials 1. Qualitative information on results………………………………………………………………………….2 (1) Discussion of operating results…………………………………………………………………………2 (2) Discussion of financial position…………………………………………………………………………2 (3) Discussion of cash flows…………………………………………………………………………………3 (4) Future outlook…………………………………………………………………………………………….4 (5) Important events related to status as a going concern……………………………………………….4 2. Basic policy regarding selection of accounting standards……………………………………………….4 3. Consolidated financial statements and major notes………………………………………………………5 (1) Consolidated balance sheets……………………………………………………………………………5 (2) Consolidated statement of income………………………………………………………………………8 (3) Consolidated statements of changes in shareholders’ equity……………………………………….10 (4) Consolidated statements of cash flows……………………………………………………………..….12 (5) Notes on consolidated financial statements……………………………………………………………13 (Notes on the premise as a going concern)……………………………………………………………..13 (Accounting policy changes)………………………………………………………………………………13 (Change in Representation of Figures) (Segment information)………………………………………………………………………………………13 (Equity in earnings of affiliates, etc.)………………………………………………………………………13 (Per-share indicators)………………………………………………………………………………………14 (Significant subsequent events)………………………………………………………………………..…14 ―4― 1. Qualitative information on results (1) Discussion of operating results The Japanese economy this fiscal year generally faced a downturn following the spread of COVID-19 and the rise in crude oil prices. From a global perspective, there have been growing uncertainties, among them heightened geopolitical risks, such as the situation in Ukraine. Given these circumstances, sales declined significantly in the first half of the fiscal year due to inventory reductions and production adjustments at client companies, but in the second half of the year, the situation corrected itself and sales trended upward. As a result, total rental sales for the full fiscal year amounted to 6.54B JPY, an increase of 101M JPY (1.6%) from the prior fiscal year, and total sales for the fiscal year, inclusive of other adjustments, were 7.094B JPY, an increase of 132M JPY (1.9%) from the prior fiscal year. On a cost front, pallet storage fees decreased due to the recovery of pallet rental utilization rates in the second half of the year, but the number of pallets transported, repaired, and cleaned increased in order to accommodate a rapid increase in rental volume. In addition, operating expenses increased by 259M JPY (4.1%) from the prior fiscal year to 6.634B JPY due to the impact of rising crude oil and timber prices. As a result, operating income decreased 127M JPY (21.7%) from the prior fiscal year to 459M JPY, and ordinary income reached 647M JPY, a decrease of 92M JPY (12.5%) from the prior fiscal year. Net income decreased by 180M JPY (39.8%) from the prior fiscal year to 272M JPY due to asset-impairment accounting of corporate assets associated with the restructuring of depot sites. Prior fiscal year (From April 1, 2020 To March 31, 2021) Current fiscal year (From April 1, 2021 to March 31, 2022) YOY change Amount (1,000 JPY) Composition ratio (%) Amount (1,000 JPY) Composition ratio (%) Amount (1,000 JPY) Ratio (%) Loans Rentals Pallets 5,841,163 83.9 5,934,356 83.6 93,192 Other equipment logistics 597,831 8.6 606,326 8.5 8,494 Total 6,438,994 92.5 6,540,682 92.2 101,687 1.6 1.4 1.6 3,084 224,409 115,764 343,258 155,183 0.0 3.2 1.7 4.9 2.2 0.4 14,109 231,706 129,201 375,017 154,157 24,741 0.2 3.3 1.8 5.3 2.2 0.3 11,025 357.5 7,296 3.3 13,437 11.6 31,759 9.3 △1,025 △0.7 △272 △1.1 Incidental business income 25,013 Annual 6,962,449 100.0 7,094,599 100.0 132,149 1.9 (2) Discussion of financial position (1) Analysis of financial position Current assets The balance of current assets at the end of the current fiscal year was 1.874B JPY (1.877B JPY in the prior fiscal year), a decrease of 2M JPY. This was largely owed to a decrease in cash and deposits (down 111M JPY from the prior fiscal year), although rentals receivable (up 72M JPY yen from the prior fiscal year) and other accounts receivable (up 17M JPY from the prior fiscal year) increased. Detailed sales statement By type Sale By installment/lease Products Reprocessed articles Total Freight revenue ―5― Non-current assets an increase of 128M JPY. The balance of fixed assets at the end of the current fiscal year was 8.487B JPY (8.358B JPY the prior fiscal year), Although there was a decrease in corporate assets (down 136M JPY from the prior fiscal year) and long-term prepaid expenses (down 12M JPY from the prior fiscal year), this was chiefly due to increases in loaned assets (up 63M JPY from the prior fiscal year) and intangible fixed assets (up 63M JPY from the prior fiscal year). Current liabilities The balance of current liabilities at the end of the current fiscal year was 3.336B JPY (the previous fiscal year was 3.291B JPY), an increase of 45M JPY. This was chiefly due to a decrease in unpaid corporate taxes, etc. (84M JPY decrease from the prior fiscal year), long-term loans scheduled to be repaid within one year (down 81M JPY from the prior fiscal year), and unpaid consumption tax (down 54M JPY from the prior fiscal year), but advance payments (up 113M JPY yen from the prior fiscal year), accounts payable (up 88M JPY from the prior fiscal year), and accounts payable-trade (up 77M JPY yen from the prior fiscal year) increased. Non-current liabilities The balance of current liabilities at the end of the current fiscal year was 1.961B JPY (2.033B JPY in the prior fiscal year), or a decrease of 71M JPY. While long-term accounts payable increased (up 34M JPY from the prior fiscal year), this was chiefly owed to a decrease in long-term debt (down 118M JPY from the prior fiscal year). Net assets The balance of net assets at the end of the current fiscal year was 5.063B JPY, an increase of 152M JPY. This is chiefly due to the increase in retained earnings. (3) Discussion of cash flows Cash and cash equivalents for the current fiscal year amounted to 749M JPY, a decrease of 111M JPY. Cash flow from operating activities was 2.75B JPY (down 6.9% from the prior fiscal year) due to factors like net income before tax of 426M JPY and depreciation expenses of 2.429B JPY. Cash flow from investment activities was 2.721B JPY (up 25.5% from the prior fiscal year) due to the acquisition of tangible fixed assets. In terms of cash flows from financing activities, long-term debt was 800M JPY and income from sale-leaseback transactions was 442M JPY, but this was exceeded by outlays of 999M JPY from repayment of long-term loans payable and repayment of installment obligations of 325M JPY, for total expenditures of 141M JPY (72.3% decrease from the prior fiscal year). The trend of cash flow indicators is as follows. 46th term (fiscal year ended March 2018) 47th term (fiscal year ended March 2019) 48th term (fiscal year ended March 2020) 49th term (fiscal year ended March 2021) 50th term (fiscal year ended March 2022) Equity ratio (%) Capital adequacy ratio (on a market value basis) (％) Debt redemption (years) Interest coverage ratio 39.7 20.6 1.8 70.8 39.7 15.8 1.6 88.6 43.3 19.7 1.5 97.6 48.0 28.6 1.4 48.9 17.2 1.5 101.7 110.7 *Equity ratio: Shareholders’ equity/total assets **Equity ratio based on market value: stock market capitalization/total assets *Years of debt redemption: interest-bearing liabilities/operating cash flows *Interest coverage ratio: operating cash flows/interest payments (Note) 1: Each indicator is calculated based on financial figures. 2. The stock market capitalization is calculated based on the closing price of shares at the end of the period multiplied by the total number of shares outstanding at the end of the period (after deducting treasury stock). 3. Operating cash flow is based on operating cash flow listed on the cash flow statements, and interest-bearing liabilities cover all liabilities that have paid interest recorded on the balance sheet. ―6― (4) Future outlook In Japan, concerns that COVID-19 may impose restrictions on corporate activities and private consumption have not yet been dispelled, and there is as yet no outlook on when economic activities will rebound after the pandemic is subdued. In addition to the “wood crisis” that is ongoing since the current fiscal year and the rise in crude oil prices, and concerns over the significant impact on the financial and goods markets due to the situation in Russia and Ukraine, the global economy is expected to continue to be under a major downturn going forward. In terms of future business outlook, while we anticipate ongoing trade with petrochemical resin-related companies, which represent one of NIPPON PALLET POOL’s major customers, we are actively monitoring trends in crude oil prices and movements in other sectors, such as automobile production cuts under semiconductor shortages. In addition, rental sales to retail users have been recovering since the second half of the prior fiscal year, and in the future, NIPPON PALLET POOL plans to continue developing a solution business in response to customer issues and requests as concern logistics efficiency, using this to expand sales. At the same time, due to major demand for wood amid shortages, the global “wood crisis” as a result of soaring timber prices, and the rise in crude oil prices, there are concerns that the purchase price of pallets, the chief item NIPPON PALLET POOL lends to its customers, will rise drastically. In addition, due to increases in transportation costs and repair costs, we expect an ongoing downturn on a cost front. NIPPON PALLET POOL plans to continue improving its cost structure by making the most effective use of existing pallets by improving transportation efficiency through the relocation of depots and improving pallet repair and cleaning functions. Effective next fiscal year, we plan to revise the useful life of wooden pallets from 5 to 6 years in order to better reflect the projected service life of these pallets based on updated internal investigations into their durability.As a result, depreciation expenses in the next fiscal year are expected to decrease by about 300M JPY yen compared to the prior method. Based on the above, the earnings forecast for FY 2022 is sales of 7.185B JPY (up 1.3% from the prior fiscal year), operating income of 700M JPY (up 52.2% from the prior fiscal year), ordinary income of 800M JPY (up 23.5% from the prior fiscal year), and income of 500M JPY (up 83.3% from the prior fiscal year). (5) Important events related to status as a going concern None to note at this time. 2. Basic policy regarding selection of accounting standards Currently, the business is limited to Japan, so Japanese standards are being adopted for the time being, but we may consider applying IFRS (International Financial Reporting Standards) while closely monitoring how IFRS is adopted at other companies in Japan in order to determine future policy. ―7― 3. Consolidated financial statements and major notes (1) Balance sheets (Units: 1,000 JPY) Prior fiscal year (ended March 31, 2021) Current fiscal year (ending March 31, 2022) Assets Current assets Cash and deposits Notes receivable Rental accrued Accounts receivable Stocked goods Prepaid expenses Other receivable Misc. Allowance for doubtful accounts Total current assets Non-current assets Tangible assets Loaned assets Loaned equipment Accumulated depreciation Loaned equipment (net) Total loaned assets Company assets Buildings Accumulated depreciation Buildings (net) Structures Accumulated depreciation Structures (net) Machinery and equipment Accumulated depreciation Machinery and equipment (net) Vehicles and transport equipment Accumulated depreciation Vehicles and transport equipment (net) Tools, furniture, and fixtures Accumulated depreciation Tools, furniture, and fixtures (net) Land Total company assets Total tangible fixed assets ―8― 1,010,768 13,076 697,593 81,576 5,936 20,463 47,651 3,717 △3,634 1,877,149 18,238,225 △11,071,624 7,166,601 7,166,601 529,046 △394,457 134,589 231,419 △212,995 18,423 109,404 △53,502 55,902 27,800 △23,094 4,705 264,711 △211,265 53,445 476,671 743,737 7,910,339 898,839 23,712 769,704 92,018 7,787 19,126 65,437 2,140 △4,328 1,874,439 18,791,761 △11,485,228 7,306,533 7,306,533 438,129 △306,048 132,081 143,608 △133,936 9,671 149,204 △73,242 75,961 24,045 △21,336 2,708 273,778 △229,708 44,070 342,324 606,817 7,913,351 Intangible fixed assets Software Software in progress Misc. Total intangible fixed assets Investments and other assets Investment securities Long-term prepaid expenses Deferred tax assets Lease and guarantee deposits Bankruptcy rehabilitation claims, etc. Allowance for doubtful accounts Total investments and other assets Total fixed assets Total assets (Units: 1,000 JPY) Prior fiscal year (ended March 31, 2021) Current fiscal year (ending March 31, 2022) 79,421 60,390 3,729 143,541 173,566 46,120 27,458 57,413 11,971 △11,971 304,558 8,358,439 10,235,588 203,543 ― 3,729 207,272 182,788 33,866 84,935 65,085 6,255 △6,255 366,675 8,487,299 10,361,739 ―9― (Units: 1,000 JPY) Prior fiscal year (ended March 31, 2021) Current fiscal year (ending March 31, 2022) Liabilities Current liabilities Accounts payable-trade Short-term debt Long-term loans payable, scheduled to be repaid within one year Accounts payable Deferred corporate tax liabilities,etc. Deferred consumption tax liabilities,etc. Advances received Deposits payable Provision for bonuses Deferred installment income Total current liabilities Non-current liabilities Long-term loans payable Provision for retirement benefits Long-term accounts payable Asset retirement obligations Total non-current liabilities Total liabilities Net assets Shareholders’ equity Capital stock Capital surplus Legal capital surplus Total capital surplus Retained earnings Legal retained earnings Other retained earnings Separate reserve fund Retained earnings carried forward Total retained earnings Shareholders’ equity Total shareholders’ equity Valuation/conversion differences, etc. Other securities valuation differences Total valuation/conversion differences, etc. Total net assets Total liabilities and net assets ―10― 605,432 1,030,000 949,810 438,325 155,722 56,525 644 1,224 46,430 6,951 3,291,067 1,360,210 14,987 626,129 31,893 2,033,220 5,324,288 767,955 486,455 486,455 96,342 1,499,500 2,028,859 3,624,701 △17,822 4,861,289 50,011 50,011 4,911,300 10,235,588 682,636 1,030,000 868,404 526,917 71,362 2,053 114,396 1,377 39,040 ― 3,336,189 1,241,812 16,409 660,613 42,931 1,961,765 5,297,955 767,955 486,455 486,455 96,342 1,499,500 2,175,826 3,771,669 △17,822 5,008,256 55,527 55,527 5,063,784 10,361,739 Prior fiscal year (From April 1, 2020 to March 31, 2021) (Units: 1,000 JPY) Current fiscal year (From April 1, 2021 To March 31, 2022) (2) Consolidated statement of income Net sales Rental income Sales income Misc. Total revenue Sales cost Rental cost Cost of sales Misc. Total cost of goods sold Gross revenue rate Provision of unrealized income on installment sales Reversal of unrealized income on installment sales Gross profit-net Sales and general and administrative expenses Advertising expenses Officer remuneration Employee salaries and bonuses Provision for bonuses Provision for retirement benefits Welfare expenses Travel and transportation expenses Rent expenses Depreciation cost Taxes and public dues Allowance for doubtful accounts Misc. Total sales and general and administrative expenses Operating income Non-operating profit Interest income Dividend income Loss compensation Waste disposal income Misc. Total non-operating profit Non-operating expenses Interest paid on Total non-operating expenses Ordinary income Extraordinary gain Gains on sale of non-current assets Total extraordinary income Extraordinary loss Loss on valuation of investment securities Loss on retirement of non-current assets Impairment loss Total extraordinary loss ―11― 6,438,994 343,258 180,196 6,962,449 5,027,944 257,441 143,430 5,428,816 1,533,632 699 5,629 1,538,562 7,769 54,530 448,128 46,430 2,255 53,433 24,617 73,001 38,836 28,732 △1,951 175,867 951,652 586,910 11 4,948 144,253 33,046 411 182,671 28,921 28,921 740,660 350 350 11,281 5,869 27,138 44,288 6,540,682 375,017 178,898 7,094,599 5,221,163 276,750 141,109 5,639,023 1,455,575 ― ― 1,455,575 13,876 67,810 444,209 39,040 2,967 54,826 13,579 71,741 67,026 26,117 △5,022 199,596 995,770 459,805 3 6,234 160,075 41,837 6,154 214,305 26,112 26,112 647,998 350 350 ― 917 221,338 222,255 Prior fiscal year (From April 1, 2020 to March 31, 2021) (Units: 1,000 JPY) Current fiscal year (From April 1, 2021 To March 31, 2022) Profit before income taxes 696,721 426,092 ―12― Corporate tax, resident tax, and business tax Adjustments for corporate tax, etc. Total corporate tax Net income for the period Prior fiscal year (From April 1, 2020 to March 31, 2021) (Units: 1,000 JPY) Current fiscal year (From April 1, 2021 To March 31, 2022) 246,490 △2,682 243,807 452,913 183,694 △30,450 153,243 272,848 ―13― at Balance the beginning of the period impact in Cumulative from accounting policies changes balance in Beginning reflecting changes accounting policies Changes during period the from Dividends surplus Net income for the period Net changes of items other than shareholders’ equity (net) Total changes of items for the period Balance at the end of the period at Balance the beginning of the period impact in Cumulative from accounting policies changes balance in Beginning reflecting changes accounting policies Changes during period the from Dividends surplus Net income for the period Net changes of items other than shareholders’ equity (net) Total changes of items for the period Balance at the end of the period (3) Consolidated statements of changes in shareholders’ equity Prior fiscal year (from April 1, 2020 to March 31, 2021) (Units: 1,000 JPY) Shareholders’ equity Capital surplus Retained earnings Capital stock Legal capital surplus Total capital surplus Legal retained earnings Other retained earnings Separate reserve fund Retained earnings carried forward Total retained earnings 767,955 486,455 486,455 96,342 1,499,500 1,634,849 3,230,691 767,955 486,455 486,455 96,342 1,499,500 1,634,849 3,230,691 △58,903 △58,903 452,913 452,913 ― ― ― ― ― 394,009 394,009 767,955 486,455 486,455 96,342 1,499,500 2,028,859 3,624,701 Shareholders’ equity Valuation/conversion differences, etc. Shareholders’ equity Total shareholders’ equity Other securities valuation differences Total net assets Total valuation/conversion differences, etc. △17,822 4,467,279 8,074 8,074 4,475,353 △17,822 4,467,279 8,074 8,074 4,475,353 △58,903 452,913 △58,903 452,913 41,937 41,937 41,937 ― 394,009 41,937 41,937 435,947 △17,822 4,861,289 50,011 50,011 4,911,300 ―14― at Balance the beginning of the period impact in Cumulative from accounting policies changes balance in Beginning reflecting changes accounting policies Changes during period the from Dividends surplus Net income for the period Net changes of items other than shareholders’ equity (net) Total changes of items for the period Balance at the end of the period at Balance the beginning of the period impact in Cumulative from accounting policies changes balance in Beginning reflecting changes accounting policies Changes during period the from Dividends surplus Net income for the period Net changes of items other than shareholders’ equity (net) Total changes of items for the period Balance at the end of the period Current fiscal year (from April 1, 2021 to March 31, 2022) (Units: 1,000 JPY) Shareholders’ equity Capital surplus Retained earnings Capital stock Legal capital surplus Total capital surplus Legal retained earnings Other retained earnings Separate reserve fund Retained earnings carried forward Total retained earnings 767,955 486,455 486,455 96,342 1,499,500 2,028,859 3,624,701 767,955 486,455 486,455 96,342 1,499,500 1,961,881 3,557,723 △66,977 △66,977 △58,903 △58,903 272,848 272,848 ― ― ― ― ― 213,945 213,945 767,955 486,455 486,455 96,342 1,499,500 2,175,826 3,771,669 Shareholders’ equity Valuation/conversion differences, etc. Shareholders’ equity Total shareholders’ equity Other securities valuation differences Total valuation, conversion differences, etc. Total net assets △17,822 4,861,289 50,011 50,011 4,911,300 △66,977 △66,977 △17,822 4,794,311 50,011 50,011 4,844,322 △58,903 272,848 △58,903 272,848 5,516 5,516 5,516 ― 213,945 5,516 5,516 219,461 △17,822 5,008,256 55,527 55,527 5,063,784 ―15― Prior fiscal year (From April 1, 2020 to March 31, 2021) (Units: 1,000 JPY) Current fiscal year (From April 1, 2021 To March 31, 2022) (4) Consolidated statements of cash flows Cash flows from operating activities Profit before income taxes Depreciation expenses Impairment loss Increase (decrease) in provision for bonuses (△ indicates a decrease) Increase (decrease) in provision for retirement benefits (△ indicates a decrease) Increase (decrease) in allowance for doubtful accounts (△ decreases) Interest and dividend income Interest expenses Loss (gain) on sales of investment securities (△ indicates gain) Loss on retirement of non-current assets Loss (gain) on sale of fixed assets (△ indicates gain) Decrease (increase) in receivables (△ indicates increase) Decrease (increase) in inventories (△ indicates increase) Increase (decrease) in accounts payable (△ indicates decrease) Increase (decrease) in accrued consumption tax, etc. (△ indicates decrease) Misc. Subtotal Interest and dividend income received Interest expenses paid Corporate taxes paid Cash flows from operating activities Cash flows from investing activities Payments into time deposits Proceeds from withdrawal of time deposits Proceeds securities from redemption of investment Purchase of investment securities Purchase of property, plant, and equipment Proceeds from sales of property, plant, and equipment Purchase of intangible assets Misc. Cash flows from investing activities Cash flows from financing activities Proceeds from long-term loans payable Repayments of long-term loans payable Proceeds from sale and leaseback Repayment of installments payable Cash dividends paid Cash flows from financing activities Conversion difference for cash and cash equivalents Increase (decrease) in cash and cash equivalents (△ indicates decrease) Cash and cash equivalent balance at the start of the ―16― 696,721 2,434,652 27,138 △2,433 △4,784 △1,951 △4,959 28,921 11,281 84,417 △350 78,029 △2,541 18,599 △44,201 △71,580 3,246,958 4,963 △29,036 △269,695 2,953,190 △138,003 138,000 50,000 △1,187 △2,113,578 350 △96,508 △7,852 △2,168,779 500,000 △1,079,832 420,438 △293,017 △58,903 △510,314 ― 273,096 588,761 426,092 2,429,364 221,338 △7,390 1,421 △5,022 △6,238 26,112 ― 77,667 △870 △92,646 △1,850 2,478 △54,471 19,466 3,035,452 6,238 △24,860 △266,042 2,750,788 △148,912 148,911 ― △1,227 △2,557,750 870 △151,076 △11,868 △2,721,052 800,000 △999,804 442,800 △325,757 △58,903 △141,665 ― △111,930 861,857 period Cash and cash equivalent balance at the end of the period Prior fiscal year (From April 1, 2020 to March 31, 2021) (Units: 1,000 JPY) Current fiscal year (From April 1, 2021 To March 31, 2022) 861,857 749,927 ―17― (5) Notes on consolidated financial statements Notes on premise as a going concern None to note at this time. Changes to accounting policies 1. The Accounting Standards on Revenue Recognition (Corporate Accounting Standards No. 29, March 31, 2020; hereinafter, “Revenue Recognition Accounting Standards” were applied as of the start of this fiscal year. Pursuant to this, revenue is now being recognized based on the expected amount that would be received in exchange for an agreed-upon good or service as of the time the good or service is assigned or delivered to the client. Pursuant to this, the following revisions were made. (1) Pool fees Pool fees are paid for NIPPON PALLET POOL’s “pallet pool system” (a system that improves logistics efficiency by allowing many customers to share and circulate the same pallets). Previously, income from these fees was recognized as of the time pallets were shipped from client facilities, but this is now being recognized based on when the loan of each individual pallet concludes. (2) One-time charges NIPPON PALLET POOL provides rental services via a “one-time charge” that provides a streamlined method of issuing estimates for the rental period and charging flat fees therefor. Previously, the total amount of income was recognized at the start of the rental period, but this has now been changed to a calculation of income spanning a given rental period that assumes and incorporates these start dates. (3) Long-term installment sales In the past, the total amount of claims from installment sales was recorded as sales at the time of product delivery, and unrealized profit on accounts receivable as of the collection date was deferred as deferred installment sales income, but this has been changed to recognizing all related revenues and profits at the time of delivery of the product. Following the adoption of Revenue Recognition Accounting Standards in accordance with the transitional handling stipulated in the proviso of the Revenue Recognition Accounting Standards, Clause 84, the cumulative effect resulting from retroactive application of the new accounting policy to prior to the start of the current fiscal year has been incorporated into retained earnings as of the start of the current fiscal year, with the new policy in effect on the balance for the current fiscal year. As a result, the impact on sales, operating income, ordinary income, and net income before taxes for the current fiscal year is minor. In addition, the balance of retained earnings at the beginning of the period decreased by 66M JPY. 2. The Accounting Standards for Calculation of Market Value (see Corporate Accounting Standards No. 30, July 4, 2019 (hereinafter, “Market Value Standards”) and other standards were adopted from the start of the current fiscal year, and with a new accounting policy aligned with the transitional handling procedures stipulated in Clause 19 of the Market Value Standards and in Clause 44-2 of the Accounting Standards for Financial Instruments (Corporate Accounting Standards No. 10, July 4, 2019), and this methodology will be applied going forward. This has no impact on the financial statements. (Change in Representation of Figures) (Cash Flow Calculation) 1. For the previous fiscal year, the “short-term loan revenue” and “short-term loan expenditure” under “Cash Flow from Financing Activities” were represented separately but as these items are short-term and have a rapid turnover, the net amount will be represented by “short-term loan net increase/decrease (△ means decrease)” (0 yen for the current year) from the current fiscal year onward. We are currently adjusting our financial statements for the previous fiscal year to reflect this change. As a result, in the cash flow statement for the previous fiscal year, the 8,860,000 thousand yen “short-term loan revenue” and △8,860,000 thousand yen “short-term loan expenditure” under “Cash Flow from Financing Activities” has been changed to 0 yen under the item “short-term loan net increase/decrease (△ means decrease)”. Additionally, as the “short-term loan net increase/decrease (△ means decrease)” for this fiscal year is 0 yen, “short-term loan net increase/decrease (△ means decrease)” is not represented in the statement. 2. The revenue from sales and leaseback was previously represented as a part of the “expenditure for purchase of tangible fixed assets” under “Cash Flow from Financing Activities” up until the previous fiscal year but from this fiscal year onwards, it will be represented as “sales and leaseback revenue” under “Cash Flow from Financing Activities” to shed more light on our financing activities. We are currently adjusting our cash flow statement for the previous fiscal year to reflect this change. As a result, the 420,438 thousand yen “expenditure for purchase of tangible fixed assets” under the “Cash Flow from Financing Activities” on the cash flow statement for the previous fiscal year has been changed to “sales and leaseback revenue”. Segment information Segment information NIPPON PALLET POOL’s chief business revolves around the rental of pallets. Sales and other income (income associated with transportation business and ancillary business) are incidental to the rental business, and represent a single segment of indivisible sales, so are therefore omitted. ―18― Equity in earnings of affiliates, etc. None to note at this time. Data per share Net assets per share Net income per share Item Item Significant subsequent events None to note at this time. Prior fiscal year (From April 1, 2020 To March 31, 2021) Current fiscal year (From April 1, 2021 to March 31, 2022) 2,918.25 JPY 3,008.86 JPY 269.12 JPY 162.12 JPY (Note) 1. Diluted net income per share for the period is not listed, as there were no dilutive shares applicable. 2. NIPPON PALLET POOL conducted a stock split on July 1, 2021, at a ratio of 2 shares per share of common stock. The net assets per share, net income per share, and average number of shares issued assume a stock split at the start of the prior fiscal year. 3.The basis for calculation of net income per share is as follows. Prior fiscal year (From April 1, 2020 To March 31, 2021) Current fiscal year (From April 1, 2020 To March 31, 2021) Net income for the term (1,000 JPY) 452,913 272,848 Amount not attributable to common shareholders (1,000 JPY) Net income on common stock (1,000 JPY) Average number of shares during the period (1,000 shares) ― 452,913 1,682 ― 272,848 1,682 ―19―