ナカバヤシ（7987） – ［Delayed］Consolidated Financial Results for the Year Ended March 31, 2022

Notice: This document is an excerpt translation of the original Japanese document and is only for reference purposes. In the event of any discrepancy between this translated document and the original Japanese document, the latter shall prevail. Consolidated Financial Results for the Year Ended March 31, 2022 (Based on Japanese GAAP) May 13, 2022 NAKABAYASHI CO.,LTD Company name: Stock exchange listings: Tokyo Stock code: Representative Inquiries: URL https://www.nakabayashi.co.jp/ 7987 President and Representative Director Managing Executive Officer and General Manager of Administration Division Hideaki Yumoto Kazunari Sakuta TEL 06-6943-5555 Scheduled date of ordinary general meeting of shareholders: Scheduled date to file Securities Report: Scheduled date to commence divined payments: Preparation of supplementary material on financial results: No Holding of financial results meeting: No June 24, 2022 June 24, 2022 June 27, 2022 1. Consolidated financial results for the year ended March 31, 2022 (from April 1, 2021 to March 31, 2022) (1)Consolidated Operating Results Percentages indicate year-on-year changes (Amounts less than one million yen are rounded down) Net sales Operating profit Ordinary profit Profit attributable to owners of parent Millions of yen % Millions of yen % Millions of yen % Millions of yen % 63,118 63,644 (0.8) (2.5) 1,818 (28.7) 2,550 8.7 2,336 (22.7) 3,023 10.5 1,018 (34.4) 1,552 (0.6) ¥1,218million ［(51.3%)］ ¥2,502million ［(85.4%)］ Earnings per share Diluted earnings per share Ordinary profit/total assets Operating profit/net sales Year ended March 31, 2022 Year ended March 31, 2021 (Note) Comprehensive income: Year ended March 31, 2022: Year ended March 31, 2021: Year ended March 31, 2022 Year ended March 31, 2021 (Reference) Equity in earnings of affiliates Year ended March 31, 2022 Year ended March 31, 2021 (2)Consolidated financial position Yen 39.26 60.20 Profit attributable to owners of parent/equity % 3.9 6.2 Yen – – -million yen -million yen Total assets Net assets Equity Ratio Net assets per share % 4.1 5.4 % 46.1 45.2 % 2.9 4.0 Yen 981.29 1,000.80 As of March 31, 2022 As of March 31, 2021 (Reference) Equity: (3)Consolidated Cash flows As of March 31, 2022 As of March 31, 2021 Millions of yen 58,225 57,113 ¥26,861million ¥25,821million Millions of yen 28,504 28,046 Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities Cash and cashequivalents at end of period Millions of yen 2,226 2,407 Millions of yen (283) (518) Millions of yen (299) (2,269) Millions of yen 8,076 6,426 Annual dividends per share 1st quarter-end 2nd quarter-end 3rd quarter-end Fiscal year-end Total Total cash dividends (Total) Dividend payout ratio (Consolidated) Ratio of dividends to net assets (Consolidated) Yen – – – Yen 10.00 10.00 10.00 Yen Yen Yen Millions of yen – – – 12.00 12.00 22.00 22.00 12.00 22.00 567 586 % 36.5 56.0 35.4 % 2.3 2.2 Year ended March 31, 2022 Year ended March 31, 2021 2. Cash dividends Year ended March 31, 2021 Year ended March 31, 2022 Year ending March 31, 2023 (Forecast) 3. Forecast of consolidated financial results for the year ending March 31, 2023 (from April 1, 2022 to March 31, 2023) Operating profit Ordinary profit Net sales Percentages indicate year-on-year changes Earnings per share Profit attributable to owners of parent Millions of yen % Millions of yen % Millions of yen % Millions of yen % Six months ending September 30, 2022 Full year 29,000 65,000 1.2 3.0 400 34.5 600 2.3 250 119.2 2,550 40.2 3,000 28.4 1,700 66.9 Yen 9.13 62.10 No Yes No No No 4. Notes (1) Changes in significant subsidiaries during the nine months ended March 31, 2022 (changes in specified subsidiaries resulting in the change in scope of consolidation): (2) Changes in accounting policies, changes in accounting estimates, and restatement of prior period financial statements Changes in accounting policies due to revisions to accounting standards and other regulations: Changes in accounting policies due to other reasons: Changes in accounting estimates: Restatement of prior period financial statements: (3) Number of issued shares (common shares) Total number of issued shares at the end of the period (including treasury shares) As of March 31, 2022 28,794,294 shares As of March 31, 2021 28,794,294 shares Number of treasury shares at the end of the period Average number of shares during the period As of March 31, 2022 1,420,245 shares As of March 31, 2021 2,993,787 shares Year ended March 31, 2022 25,944,995 shares Year ended March 31, 2021 25,789,510 shares ※ This financial results report is not subject to the audit by a certificated public accountant or an auditing firm. ※ Explanation and other special notes concerning the appropriate use of business performance forecasts. (Cautionary Statement with Respect to Forward-Looking Statements) The earnings forecasts and other forward-looking statements herein are based on information currently available to the Company and on certain assumptions deemed to be reasonable. Actual results, etc. may differ materially from the forecasts due to various factors. For notes on the assumptions underlying the earnings forecasts and the earnings forecasts, please refer to “1. Overview of Operating Results, (4) Future Outlook” on page 4. ○Accompanying Materials – Contents 1.Overview of Operating Results. ……………………………………………………………………………………………………………………………… (1) Overview of Operating Results for the Fiscal Year under Review………………………………………………………………………….. (2) Overview of Financial Position for the Fiscal Year under Review………………………………………………………………………….. (3) Overview of Cash Flows for the Fiscal Year under Review..…………………………… ..………………………………………… (4) Future Outlook……………………………………………………………………………………………………………………………………………….. 4 2. Basic Concept Regarding Selection of Accounting Standards……………………………………………………………….. 5 3. Consolidated Financial Statements and Major Notes…………………………………………………………………………………………………. (1) Consolidated Balance Sheets…………………………………………………………………………………………………………………………….. (2) Consolidated statements of income and consolidated statements of comprehensive income……………………………………… Consolidated Statements of Income………………………………………………………………………………………………….. Consolidated statements of comprehensive income…………………………………………………………………………………………….. (3) Consolidated statements of changes in equity……………………………………………………………………………. (4) Consolidated statements of cash flows……………………………………………………………………………………………………………….. 13 (5) Notes to Consolidated Financial Statements……………………………………………………………………………………………………….. (Notes on the Going Concern Assumption)………………………………………………………………………………………………………. (Changes in Accounting Policies)……………………………………………………………………………………………………………………. (Segment Information)…………………………………………………………………………………………………………………………………… (Per Share Information)……………………………………………………………………………………………………………… …………………. (Significant Subsequent Events)………………………………………………………………………………………… 4. Others ………………………………………………………………………………………………………………………… 2 2 4 4 6 6 8 8 10 11 15 15 15 16 18 19 20 -1- 1. Overview of Operating Results, etc. (1) Overview of Operating Results for the Fiscal Year under Review In the fiscal year under review, the Japanese economy saw a decline in the number of new infectious diseases and the resumption of socio-economic activities due to the cancellation of the declaration of an emergency, as a result of the prolonged vaccination of COVID-19. However, the outlook remains uncertain, including in the global economy, due to factors such as soaring crude oil prices, the situation in Russia and the Ukraine, and a shortage of semiconductors due to the stagnant supply chain. In the environment surrounding our group, consumer spending and corporate activities have been stagnant for a prolonged period due to the impact of COVID-19. The business environment remains challenging due to the consequent restraint on purchasing by individuals, cost reductions by companies, and rises in raw material prices and personnel costs. Under these circumstances, we formulated our third medium-term management plan (April 1, 2021 to March 31, 2024), “add+ venture 70” (Adventure 70). As conventional business models and processes change dramatically depending on the New normal and DX, we have set 70 new targets to increase corporate value and are working to achieve the targets. To this end, we are working to optimize the allocation of management resources and create synergies among business segments and Group companies as a whole. As a concrete policy required in the era of post-corona, our Group aims to become a leading company in the “Life-related industry” (Note), an industry field that will play a central role in the future, and will advance initiatives to strengthen existing businesses and enter new businesses. Specifically, it refers to the following five fields (1) health and medical care (2) environment (including renewable energy) (3) life and welfare (4) agriculture (5) culture. (NOTE)”Life-related industries” is a concept advocated by Professor Yoshinori Hiroi of Kyoto University On July 1, 2021, Sunlemon Co., Ltd., which manufactures and sells stuffed toys in the mid-to high-priced range, was made a subsidiary. As a result of the Company’s efforts to expand its new product categories that will lead to mental comfort and health by leveraging its planning and design capabilities, results were favorable, including the synergy effect with Nakabayashi. In the future, we will further strengthen the (3) lifestyle and welfare fields of the life-related industry. In addition, on April 4, 2022, we shifted to the “prime market” in the new market segment of the Tokyo Stock Exchange. The status of compliance with the listing maintenance standards of the prime market as of our transition record date does not satisfy the standards for the average daily trading value. However, we believe that moving to the prime market is essential to enhancing our business value, achieving sustainable growth and enhancing corporate value over the medium to long term. Based on this belief, we will take measures to satisfy the listing maintenance standards with respect to the average daily trading value. As a result, Kokusai Chart Corporation which had been a consolidated subsidiary, became a wholly owned subsidiary through a share exchange with an effective date of March 1, 2022. We will strive to increase corporate value by improving the efficiency of our production system, strengthening existing areas, developing new products, utilizing human resources, accelerating decision-making, and reducing listing maintenance costs. Net sales remained unchanged from the previous fiscal year, but Operating profit and Ordinary profit declined due to a worsening cost of sales ratio caused by rising raw material prices and labor costs, as well as increased Selling, general and administrative expenses. Extraordinary income recorded 354 million yen, including Gain on sale of non-current assets, and Extraordinary losses recorded 639 million yen, including a loss related to the Anti-Monopoly Act. As a result, net income attributable to owners of the parent was 1,018 million yen. Our Group’s operating results for the fiscal year under review are as follows. Net sales Operating profit Ordinary profit 63,118 million yen (Down 0.8% year on year) 1,818 million yen 2,336 million yen (Down 28.7% year on year) (Down 22.7% year on year) Net profit attributable to owners of parent 1,018 million yen (Down 34.4% year on year) -2- Operating results by segment are as follows. ①Business Process Solutions Business In the BPO (business process outsourcing) business, orders recovered due to the resumption of various trial operations and active sales promotion campaigns following the cancellation of municipal grant operations and the declaration of an emergency situation related to COVID-19. Sales of packaging materials such as paper containers and packaging grew due to a recovery in consumer sentiment. In the library solutions business, outsourcing services, such as counter operations from public libraries, and materials digitization operations remained firm, but sales in the library binding business declined. In addition, orders for corporate notebooks and forms declined due to trends associated with the adoption of DX by companies and other entities. The performance of Hiroda Shiko Co., Ltd., which became a consolidated subsidiary through an M&A in May 2021, Consequently, Net sales in this project amounted to 32,791 million yen (down 0.6% year-on-year), while Operating profit contributed. amounted to 889 million yen (up 33.7% year-on-year). ②Consumer Communications Business Sales of airborne-reduction products and remote work-related products have run their course. Stationaries such as files and notebooks remained strong. Olympic-related products underperformed the sales plan originally planned and we disposed of inventories. In addition to planning and sales of products such as the Meguri-ing business the Group has begun initiatives as a new tourism support measure, and the Group’s operating business is gradually showing results as the Emergency Declaration has been lifted. However, Operating profit declined due in part to rising raw material prices, the impact of a worldwide shortage of semiconductors, and the weak yen in foreign exchange rates. The performance of Sunlemon Co., Ltd., which became a consolidated subsidiary through an M&A in July 2021, contributed. Consequently, Net sales in this segment amounted to 21,247million yen (down 0.2% year-on-year), and Operating profit amounted to 643 million yen (down 54.1% year-on-year). ③Office Appliances Business Demand for office shredders continued to be sluggish due to companies restraining capital investment and the shift to DX in the Corona disaster. However, maintenance and inspection operations recovered due to a recovery in the rate of employee attendance at offices. Sales of large shredders and crushers grew due to replacement demand. Layout changes aimed at improving the office environment and taking measures to reduce spills have been Consequently, Net sales in this segment amounted to 7,488 million yen (down 1.0% year-on-year), and Operating profit brisk, and low-party sales have been favorable. amounted to 544 million yen (down 4.2% year-on-year). ④Energy Business Sales and operating profit of wooden biomass power generation declined due to a decrease in unit selling prices with premiums. Solar power generation performed well. As a result, net sales in this business amounted to 1.527 million yen (down 10.4% year on year) and operating profit amounted to 71 million yen (down 68.5% year on year). ⑤Others The Vegetable Plant Business and the Garlic Farm Business, etc. posted net sales of 63 million yen(down 34.0% year on year) and an operating loss of 41 million yen (an operating loss of 36 million yen for the previous year). -3- (2) Overview of Financial Position for the Fiscal Year under Review [Assets] Current assets increased by 1,883 million yen from the end of the previous fiscal year to 30,199 million yen. This was mainly due to decreases of 796 million yen in Notes and accounts receivable – trade, which offset increases of 1,630 million yen in Cash and deposits, 420 million yen in Merchandise and finished goods, and 127 million yen in Raw materials and supplies. Non-current assets decreased by 772 million yen from the end of the previous fiscal year to 28,025 million yen. This was mainly due to decreases of 526 million yen in machinery, equipment and vehicles, 268 million yen in buildings and structures, 178 million yen in Land and 146 million yen in Investment securities, despite an increase of Construction in progress by 400 million yen. As a result, total assets increased 1,111 million yen from the end of the previous fiscal year to 58,225 million yen. [Liabilities] [Net assets] Current liabilities increased by 1,765 million yen from the end of the previous fiscal year to 19,139 million yen. This was mainly due to a decline of 556 million yen in Notes and accounts payable – trade, despite an increase of 2,102 million yen in Short-term borrowings. Non-current liabilities decreased by 1,111 million yen from the end of the previous fiscal year to 10,581 million yen. This was mainly due to a decline of 1,042 million yen in Long-term borrowings. Consequently, Total liabilities increased by 653 million yen from the end of the previous fiscal year to 29,720 million yen. Total net assets increased by 458 million yen from the end of the previous fiscal year to 28,504 million yen. This was mainly due to decreases of 582 million yen in Non-controlling interests and 245 million yen in Capital surplus, while Treasury shares decreased by 807 million yen and Retained earnings increased by 433 million yen. As a result, the equity ratio was 46.1%, up 0.9 percentage points from the end of the previous fiscal year. (3)Overview of Cash Flows for the Fiscal Year under Review Net cash provided by operating activities amounted to 2,226 million yen, a decrease of 181 million yen from the previous fiscal year. The main components of cash inflows were income before income taxes and minority interests of 2,051 million yen and depreciation and amortization of 1,579 million yen. The main components of cash outflows were income taxes paid of 1,428 million. Net cash used in investing activities amounted to 283 million yen, a decrease of 235 million yen from the previous fiscal year. Major inflows included proceeds from sales of Property, plant and equipment of 795 million yen, and payments for purchase of Property, plant and equipment of 1,185 million yen. Net cash used in financing activities amounted to 299 million yen, a decrease of 1,969 million yen from the previous fiscal year. Major inflows included proceeds from long-term loans payable of 4,700 million yen, repayments of Long-term borrowings of 4,129 million yen, cash dividends paid of 566 million yen, and purchase of Treasury shares of 137 million yen. As a result, cash and cash equivalents at the end of the fiscal year under review increased 1,650 million yen from the end of the previous fiscal year to 8,076 million yen. (4)Future Outlook In the future, the Japanese economy is expected to continue to recover toward normalization from the Corona crisis, although the impact of the new Corona contagious disease will remain. However, the outlook remains uncertain, as downward pressure on the growth rate may be exerted by factors such as a deterioration in consumer sentiment due to rising consumer prices, the situation in Russia and Ukraine, and soaring resource prices. Under such circumstances, as stated in the “Notice Regarding Revisions to the Medium-Term Management Plan” announced today (May 13, 2022), the consolidated financial results forecast for the fiscal year ending March 31, 2023 has been revised from the originally planned financial results forecast, and the forecasts are as follows: Net sales 65,000 million yen (up 3.0% year on year), Operating profit 2,550 million yen (up 40.2%), Ordinary profit 3,000 million yen (up 28.4%), and profit attributable to owners of parent 1,700 million yen (up 66.9%). Cost of sales and SG&A expenses are expected to increase due to rising costs related to various manufacturing and transportation costs resulting from soaring prices for imported products due to the yen’s depreciation since last year, soaring raw material costs, and rising crude oil and other resource prices. We will work to mitigate the impact on business performance through further improvements in production efficiency and other measures. However, if various expenses do not rise more than anticipated or pass through cost increases, our business performance may fluctuate. Under these circumstances, in order to become a leading company in the life-related industry, our Group will continue to implement measures to achieve the medium-term numerical targets by working to strengthen profitability, promote growth potential, and increase shareholder value based on the policies of the Third Medium-Term Management Plan (April 1, 2021-March 31, 2024), “ad+ venture 70” (Adventure 70). -4- 2. Basic Concept Regarding Selection of Accounting Standards Our group intends to prepare consolidated financial statements under Japanese GAAP for the foreseeable future, considering the comparability of consolidated financial statements between periods and between companies. With regard to the application of IFRS, the Company’s policy is to respond appropriately, taking into account various domestic and overseas circumstances. -5- 3. Consolidated Financial statements and Major Notes (1)Consolidated Balance Sheets (Millions of yen) As of March 31, 2021 As of March 31, 2022 6,467 11,660 5,572 757 1,510 2,353 (5) 28,315 7,592 5,034 10,042 22,910 28 211 498 260 759 2,876 783 476 1,000 (9) 5,128 28,797 57,113 8,097 10,864 5,993 851 1,637 2,758 (4) 30,199 7,323 4,508 9,863 428 165 22,290 427 224 651 2,729 950 455 954 (7) 5,083 28,025 58,225 Assets Current assets Cash and deposits Notes and accounts receivable – trade Merchandise and finished goods Work in process Raw materials and supplies Other Allowance for doubtful accounts Total current assets Non-current assets Property, plant and equipment Buildings and structures, net Machinery, equipment and vehicles, net Land Construction in progress Other, net Total property, plant and equipment Intangible assets Goodwill Other Total intangible assets Investments and other assets Investment securities Retirement benefit asset Deferred tax assets Other Allowance for doubtful accounts Total investments and other assets Total non-current assets Total assets -6- (Millions of yen) As of March 31, 2021 As of March 31, 2022 Liabilities Current liabilities Notes and accounts payable – trade Short-term borrowings Accounts payable – other Accrued expenses Income taxes payable Provision for bonuses Provision for loss on Anti-Monopoly Act Other Total current liabilities Non-current liabilities Long-term borrowings Retirement benefit liability Deferred tax liabilities Other Total non-current liabilities Total liabilities Net assets Shareholders’ equity Share capital Capital surplus Retained earnings Treasury shares Total shareholders’ equity Accumulated other comprehensive income Valuation difference on available-for-sale securities Deferred gains or losses on hedges Foreign currency translation adjustment Remeasurements of defined benefit plans Total accumulated other comprehensive income Non-controlling interests Total net assets Total liabilities and net assets 5,908 4,753 3,032 456 872 854 – 1,495 17,373 7,697 3,344 345 305 11,693 29,067 6,666 8,761 10,965 (1,530) 24,863 763 27 80 86 957 2,225 28,046 57,113 5,352 6,855 3,309 425 457 628 300 1,809 19,139 6,654 3,293 348 285 10,581 29,720 6,666 8,515 11,399 (723) 25,858 730 10 134 127 1,003 1,642 28,504 58,225 -7- (2) Consolidated statements of income and consolidated statements of comprehensive income Consolidated Statements of Income Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 (Millions of yen) 63,644 46,625 17,019 2,853 968 309 5,184 476 232 1,031 154 230 512 4 280 2,231 14,469 2,550 170 65 114 294 645 76 48 47 172 3,023 63,118 46,802 16,315 2,750 893 331 5,309 341 192 1,038 165 239 570 – 286 2,376 14,496 1,818 180 65 229 217 692 66 71 36 174 2,336 Net sales Cost of sales Gross profit Selling, general and administrative expenses Freight and packing costs Advertising and promotion expenses Remuneration for directors (and other officers) Salaries, allowances and bonuses Provision for bonuses Retirement benefit expenses Welfare expenses Travel and transportation expenses Communication expenses Rent expenses Provision of allowance for doubtful accounts Depreciation Other Total selling, general and administrative expenses Operating profit Non-operating income Rental income Dividend income Insurance claim income Other Total non-operating income Non-operating expenses Interest expenses Miscellaneous expenses of assets for rent Other Total non-operating expenses Ordinary profit -8- (Millions of yen) Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 Extraordinary income Gain on sale of non-current assets Gain on sale of investment securities Subsidy income Total extraordinary income Extraordinary losses Loss on disposal of non-current assets Impairment losses Loss on sale of investment securities Loss on valuation of investment securities Loss on Anti-Monopoly Act Provision for loss on Anti-Monopoly Act Total extraordinary losses Profit before income taxes Income taxes – current Income taxes – deferred Total income taxes Profit Profit attributable to non-controlling interests Profit attributable to owners of parent 217 3 – 220 82 318 – 29 – – 429 2,813 1,169 (78) 1,090 1,723 170 1,552 320 33 0 354 5 15 1 6 310 300 639 779 70 849 2,051 1,201 183 1,018 -9- Consolidated statements of comprehensive income Profit Other comprehensive income Valuation difference on available-for-sale securities Deferred gains or losses on hedges Foreign currency translation adjustment Remeasurements of defined benefit plans, net of tax Total other comprehensive income Comprehensive income Comprehensive income attributable to Comprehensive income attributable to owners of parent Comprehensive income attributable to non-controlling interests (Millions of yen) Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 1,723 507 6 4 260 778 2,502 2,294 207 1,201 (62) (16) 54 42 17 1,218 1,064 154 -10- (3) Consolidated statements of changes in equity Fiscal year ended March 31, 2021 (Millions of yen) Shareholders’ equity Share capital Capital surplus Retained earnings Treasury shares Total shareholders’ equity 6,666 8,759 9,980 (1,549) 23,856 6,666 8,759 9,980 (1,549) 23,856 Balance at beginning of period Cumulative effects of changes in accounting policies Restated balance Changes during period Increase by share exchanges Dividends of surplus Profit attributable to owners of parent Purchase of treasury shares Disposal of treasury shares Change in ownership interest of parent due to transactions with non-controlling interests Net changes in items other than shareholders’ equity Total changes during period Balance at end of period Balance at beginning of period Cumulative effects of changes in accounting policies Restated balance Changes during period Increase by share exchanges Dividends of surplus Profit attributable to owners of parent Purchase of treasury shares Disposal of treasury shares Change in ownership interest of parent due to transactions with non-controlling interests Net changes in items other than shareholders’ equity Total changes during period Balance at end of period – 6,666 2 8,761 985 10,965 18 (1,530) Accumulated other comprehensive income Valuation difference on available-for-sale securities Deferred gains or losses on hedges Foreign currency translation adjustment Remeasurements of defined benefit plans Total accumulated other comprehensive income Non-controlling interests Total net assets 313 20 76 (193) 215 2,033 26,106 313 20 76 (193) 215 2,033 26,106 2 450 450 763 6 6 27 4 4 80 -11- (567) 1,552 (0) 19 191 191 (567) 1,552 – – (0) 21 – 1,006 24,863 – – (567) 1,552 (0) 21 – 933 1,939 280 280 86 742 742 957 2,225 28,046 Fiscal year ended March 31, 2022 (Millions of yen) Share capital Capital surplus Retained earnings Treasury shares Total shareholders’ equity Shareholders’ equity 6,666 8,761 10,965 (1,530) 24,863 6,666 8,761 10,948 (1,530) Balance at beginning of period Cumulative effects of changes in accounting policies Restated balance Changes during period Increase by share exchanges Dividends of surplus Profit attributable to owners of parent Purchase of treasury shares Disposal of treasury shares Change in ownership interest of parent due to transactions with non-controlling interests Net changes in items other than shareholders’ equity Total changes during period Balance at end of period Balance at beginning of period Cumulative effects of changes in accounting policies Restated balance Changes during period Increase by share exchanges Dividends of surplus Profit attributable to owners of parent Purchase of treasury shares Disposal of treasury shares Change in ownership interest of parent due to transactions with non-controlling interests Net changes in items other than shareholders’ equity Total changes during period Balance at end of period – 6,666 (245) 8,515 450 11,399 807 (723) Accumulated other comprehensive income Valuation difference on available-for-sale securities Deferred gains or losses on hedges Foreign currency translation adjustment Remeasurements of defined benefit plans Total accumulated other comprehensive income Non-controlling interests Total net assets 763 27 80 86 957 2,225 28,046 763 27 80 86 957 2,225 28,028 (17) (567) 1,018 925 (137) 19 (17) 24,846 674 (567) 1,018 (137) 22 2 1,012 25,858 (17) 674 (567) 1,018 (137) 22 2 (251) 3 2 (33) (33) 730 (16) (16) 10 54 54 134 -12- 41 41 127 45 45 (582) (536) (582) 475 1,003 1,642 28,504 (Millions of yen) Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 2,813 1,623 318 247 3 195 – (102) (135) (3) 29 – (71) 76 – (1,203) (73) (681) 66 101 3,204 71 (77) (790) 2,407 (41) 41 (1,659) 1,383 (53) (17) 12 17 15 (38) (134) – (44) (518) 2,051 1,579 15 233 (2) (232) 300 (180) (314) (31) 6 310 (69) 66 (0) 1,058 (516) (537) (241) 155 3,649 69 (64) (1,428) 2,226 (21) 419 (1,185) 795 (47) (15) 185 (15) 15 – (493) 0 79 (283) (4) Consolidated statements of cash flows Cash flows from operating activities Profit before income taxes Depreciation Impairment losses Amortization of goodwill Increase (decrease) in allowance for doubtful accounts Increase (decrease) in provision for bonuses Increase (decrease) in provision for loss on Anti-Monopoly Act Increase (decrease) in retirement benefit liability Loss (gain) on disposal of non-current assets Loss (gain) on sale of investment securities Loss (gain) on valuation of investment securities Loss on Anti-Monopoly Act Interest and dividend income Interest expenses Subsidy income Decrease (increase) in trade receivables Decrease (increase) in inventories Increase (decrease) in trade payables Increase (decrease) in accrued consumption taxes Other, net Subtotal Interest and dividends received Interest paid Income taxes paid Net cash provided by (used in) operating activities Cash flows from investing activities Payments into time deposits Proceeds from withdrawal of time deposits Purchase of property, plant and equipment Proceeds from sale of property, plant and equipment Purchase of intangible assets Purchase of investment securities Proceeds from sale of investment securities Net decrease (increase) in short-term loans receivable Proceeds from collection of long-term loans receivable Purchase of shares of subsidiaries Purchase of shares of subsidiaries resulting in change in scope of consolidation Subsidy income Other, net Net cash provided by (used in) investing activities -13- Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 (Millions of yen) Cash flows from financing activities Net increase (decrease) in short-term borrowings Proceeds from long-term borrowings Repayments of long-term borrowings Purchase of treasury shares Dividends paid Purchase of shares of subsidiaries not resulting in change in scope of consolidation Other, net 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 (1,191) 3,525 (3,956) (0) (565) (80) (2,269) – 0 (380) 6,806 6,426 (44) 4,700 (4,129) (137) (566) (45) (75) (299) 7 1,650 6,426 8,076 -14- (5)Notes to Consolidated Financial Statements (Notes on the Going Concern Assumption) Not applicable. (Changes in Accounting Policies) (Application of Accounting Standard for Revenue Recognition) The Company adopted the “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020, hereinafter referred to as the “Accounting Standard for Revenue Recognition”) from the beginning of the fiscal year under review and recognized revenue when control of promised goods or services is transferred to customers in an amount that is expected to be received in exchange for those goods or services. As a result, for transactions where variable consideration is included in the consideration in the contract with the customer, variable consideration is included in the transaction price only to the extent that it is probable that a significant reduction in the recorded revenue will not occur by the time the uncertainty regarding the amount of the variable consideration is resolved. In addition, freight, packing costs, and sales promotion expenses, which were previously recorded in Selling, general and administrative expenses, are deducted from Net sales. With regard to the application of the Accounting Standard for Revenue Recognition, in accordance with the transitional treatment stipulated in the provisions of paragraph 84 of the Accounting Standard for Revenue Recognition, the cumulative effect of retrospective application of a new accounting policy prior to the beginning of the fiscal year under review has been adjusted to Retained earnings at the beginning of the fiscal year under review, and a new accounting policy has been applied from the beginning of the fiscal year under review. However, the new accounting policy has not been applied retrospectively to contracts for which the method set forth in paragraph 86 of the Accounting Standard for Revenue Recognition has been applied and substantially all revenue amounts have been recognized in accordance with previous treatment prior to the beginning of the current fiscal year. Consequently, Net sales decreased by 207 million yen and Selling, general and administrative expenses decreased by 206 million yen and Operating profit, Ordinary profit and income before income taxes and minority interests decreased by 0 million yen for the current fiscal year, respectively. Due to the reflection of the cumulative effect on net assets at the beginning of the fiscal year under review, Retained earnings’ balance at the beginning of the consolidated statement of changes in Shareholders’ equity decreased by 17 million yen. The effect of this change on net assets per share and net income per share for the fiscal year under review is insignificant. (Application of Accounting Standard for Calculation of Fair Value) The Accounting Standard for Calculation of Fair Value (ASBJ Statement No. 30, July 4, 2019, hereinafter referred to as the “Accounting Standard for Calculation of Fair Value”) and other standards have been applied from the beginning of the current fiscal year, and in accordance with the transitional treatment stipulated in paragraph 19 of the Accounting Standard for Calculation of Fair Value and paragraph 44-2 of the Accounting Standard for Financial Instruments (ASBJ Statement No. 10, July 4, 2019), the new accounting policy stipulated by the Accounting Standard for Calculation of Fair Value will be applied in the future. This change did not have a material impact on the consolidated financial statements. -15- (Segment Information) 1 The outline of any Reporting Segment The Reportable segments of the Company are components of the Company for which separate financial information is available and which are regularly reviewed by the Board of Directors for the purpose of deciding how to allocate resources and assessing performance. We have established in-house companies and consolidated subsidiaries for each product and service, and each in-house company and consolidated subsidiary formulates comprehensive domestic and overseas strategies for the products and services it handles and conducts business activities. Accordingly, we have four Reportable segments: Business Process Solutions, Consumer Communication, Office Appliances, and Energy, which are segments by product and service based on in-house companies and consolidated subsidiaries. The Business Process Solutions segment manufactures and sells BPO businesses such as printing, data printing, and binding, library solutions, data printing services, and notebooks, as well as temporary staffing. The Consumer Communications segment manufactures and sells notebooks, alums, files, storage consolidation supplies, gadget peripheral goods, printer paper, child car seats, and other products. The Office Appliances segment manufactures and sells shredders, bookbinding machines, electronic medical record wagons, drip stands and other products, sells office furniture, wooden furniture and other products, and recycles wastepaper. The Energy Business is engaged in wooden biomass power generation and solar power generation. 2 Calculation methods for Net sales, income (loss), assets, liabilities, and other items by Reportable segment Inter-segment sales and transfers of reportable segments are based on prevailing market prices. 3 Net sales, Income (Loss), Assets, Liabilities and Other Items by Reportable Segment Previous fiscal year (April 1, 2020, to March 31, 2021) Reportable segments Business Process Solutions business Consumer Communications Business Offices Appliances Business Energy Business Total Other (NOTE)1 Total 32,996 21,280 7,566 1,705 63,548 96 63,644 63,644 1,406 1,281 937 – 3,625 43 3,668 (3,668) Total 34,402 22,562 1,705 67,174 139 67,313 (3,668) 63,644 665 26,391 1,402 18,765 228 2,864 (36) 2,827 (277) 2,550 3,341 53,317 82 53,400 3,713 57,113 8,504 568 4,819 48 – 3 – 915 245 251 1,460 1,463 159 1,623 159 87 – 247 247 – 247 (Millions of yen) Consolidated Financial Statements Amount recorded (NOTE)4 Adjusted amount (NOTE) 2・3 – – Net sales Net sales to External Customers Inter-segment Net sales or transfers Segment profit (loss) Segment assets Other Fields Depreciation and amortization Amortized amount of Goodwill Increased amount of Property, plant and equipment and Intangible assets (NOTE) 1 “Other” is a business segment that is not included in the Reportable segments, and includes the vegetable plant business 1,121 1,738 1,750 451 68 96 19 12 1,769 and the Garlic farm business, etc. 2 Adjusted amount of (277) million yen for Segment profit (loss) includes 167 million yen for the elimination of intersegment transactions, an adjustment of 2 million yen for inventories, and (447) million yen for corporate expenses that are not allocated to each Reportable segment. Corporate expenses are mainly Selling, general and administrative expenses not attributable to Reportable segments -16- 3 Adjusted amount of 3,713 million yen to Segment assets includes an elimination of (4,385) million yen for intersegment transactions, 8,101 million yen for corporate assets not allocated to each Reportable segment, and an adjustment of (2)million yen for inventories. Corporate assets mainly consist of surplus operating funds (cash and short-term loans receivable), long-term invested funds (Investment securities) and assets related to administrative divisions that are not attributable to Reportable segments. 4 Segment profit (loss) is adjusted with Operating profit in the Consolidated statements of income. Current fiscal year (From April 1, 2021 to March 31, 2022) (Millions of yen) Reportable segments Business Process Solutions business Consumer Communications Business Offices Appliances Business Energy Business Total Other (NOTE)1 Total 32,791 21,247 7,488 1,527 63,054 63 63,118 63,118 1,480 1,073 779 – 3,333 49 3,382 (3,382) Total 34,272 22,320 8,268 1,527 66,388 112 66,500 (3,382) 63,118 889 643 544 71 2,149 (41) 2,108 (289) 1,818 Segment assets 26,741 19,188 5,047 3,142 54,120 96 54,216 4,009 58,225 49 – 2 – 877 235 255 1,417 1,420 159 1,579 141 92 – 233 233 – 233 Adjusted amount (NOTE) 2・3 Consolidated Financial Statements Amount recorded (NOTE)4 – – Net sales Net sales to External Customers Inter-segment Net sales or transfers Segment profit (loss) Other Fields Depreciation and amortization Amortized amount of Goodwill Increased amount of Property, plant and equipment and Intangible assets 838 140 37 116 1,133 0 1,133 12 1,146 (NOTE)1. “Other” is a business segment that is not included in the Reportable segments, and includes the vegetable plant business and the Garlic farm business, etc. 2. Adjusted amount of (289) million yen for Segment profit (loss) includes 170 million yen for the elimination of intersegment transactions, (2) million yen for the adjustment of inventories, and (456) million yen for corporate expenses that are not allocated to each Reportable segment. Corporate expenses are mainly Selling, general and administrative expenses not attributable to Reportable segments. 3. Adjusted amount of 4,009 million yen to Segment assets includes an elimination of (4,195) million yen for intersegment transactions, (8,209) million yen for corporate assets not allocated to each Reportable segment, and an adjustment of (5) million yen for inventories. Corporate assets mainly consist of surplus operating funds (cash and short-term loans receivable), long-term invested funds (Investment securities) and assets related to administrative divisions that are not attributable to Reportable segments. 4. Segment profit (loss) is adjusted with Operating profit in the Consolidated statements of income. -17- (Per Share Information) Net assets per share Earnings per share (NOTE) 1. Diluted Earnings per share is not presented because there were no dilutive shares. 2. The basis for calculating Earnings per share is as follows. End of previous fiscal year (April 1, 2020 To March 31, 2021) Current Consolidated Fiscal Year (April 1, 2021 From March 31, 2022) 1,000.80 yen 60.20 yen 981.29 yen 39.26 yen End of previous fiscal year (April 1, 2020 To March 31, 2021) Current Consolidated Fiscal Year (April 1, 2021 From March 31, 2022) Earnings per share Profit attributable to owners of parent (Millions of yen) Amounts not attributable to common stock (Millions of yen) Profit attributable to owners of parent attributable to common stock (Millions of yen) Average number of shares of common stock outstanding during the period (thousands of shares) 3. The basis for calculation of net assets per share is as follows. Total Net assets (Millions of yen) Amount deducted from the sum of Net assets (million yen) (Non-controlling interests) (Millions of yen) Net assets attributable to common stock at end of year (millions of yen) Number of shares of common stock at the end of the fiscal year used for the calculation of net assets per share End of previous fiscal year (As of March 31, 2021) Current Consolidated Fiscal Year (As of March 31, 2022) 1,552 – 1,552 25,789 28,046 2,225 (2,225) 25,821 25,800 -18- 1,018 – 1,018 25,944 28,504 1,642 (1,642) 26,861 27,374 (thousand shares) (Significant Subsequent Events) Not applicable. -19- 4. Others Not applicable. -20-