日本信号（6741） – [Delayed]Consolidated Financial Results for the Year Ended March 31, 2022 [Japanese GAAP]

Note:This document is a translation of a part of the original Japanese version and provided for reference purposes only. In the event of any discrepancy between the Japanese original and this English translation, the Japanese original shall prevail. Consolidated Financial Results for the Year Ended March 31, 2022 [Japanese GAAP] May 10, 2022 Company name: Nippon Signal Co., Ltd. Stock exchange listing: Tokyo Code number: 6741 URL: https://www.signal.co.jp Representative: Hidehiko Tsukamoto Contact: Hiromasa Fujimoto Phone: 03-3217-7200 Scheduled date of Annual General Meeting of Shareholders: June 24, 2022 Scheduled date of commencing dividend payments: June 03, 2022 Scheduled date of filing annual securities report: June 24, 2022 Availability of supplementary briefing material on annual financial results: Yes Schedule of annual financial results briefing session: Yes President and CEO and COO General Manager, General Affairs Dept. (Amounts of less than one million yen are rounded down) 1. Consolidated Financial Results for the Fiscal Year Ended March 31, 2022 (April 01, 2021 to March 31, 2022)(1) Consolidated Operating Results (% indicates changes from the previous corresponding period.) Fiscal year endedMarch 31, 2022 March 31, 2021 (Note) Comprehensive income: Net sales Operating profit Ordinary profit Million yen 85,047 92,755 Million yen % 5,390 (8.3) 5,713 (16.9) Fiscal year ended March 31, 2022: Fiscal year ended March 31, 2021: % (5.7) (35.9) ¥¥Million yen 6,538 6,463 % 1.2 (33.2) 3,682 million6,668 million [ [Profit attributable to owners of parent Million yen 4,503 4,916 (44.8) %] 153.1 %] % (8.4) (25.3) Basic earnings per share Diluted earnings per share Rate of return on equity Ordinary profit to total assets ratio Operating profit to net sales ratio Fiscal year endedMarch 31, 2022 March 31, 2021 Yen 72.21 78.82 Yen – – % 5.3 6.0 % 4.7 4.6 % 6.3 6.2 (2) Consolidated Financial PositionTotal assets Net assets Capital adequacy ratio Net assets per share As ofMarch 31, 2022 March 31, 2021 Million yen 134,086 141,356 Million yen 86,740 84,694 % 64.7 59.9 Yen 1,390.71 1,357.90 (Reference) Equity: As of March 31, 2022: As of March 31, 2021: ¥¥86,740 million84,694 million(3) Consolidated Cash FlowsFiscal year ended March 31, 2022 March 31, 2021 Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities Cash and cash equivalents at the end of period Million yen 2,099 1,145 Million yen (2,344) (1,911) Million yen (6,750) 1,354 Million yen 6,344 13,250 2. Dividends Fiscal year ended March 31, 2021 March 31, 2022 Fiscal year ending March 31, 2023 (Forecast) Annual dividends 1st quarter-end Yen 2nd quarter-end Yen 3rd quarter-end Yen Year-end Total Total dividends Payout ratio (consolidated) Dividends to net assets (consolidated) – – – 7.00 7.00 7.00 – – – Yen Yen Million yen 20.00 27.00 20.00 27.00 1,684 1,684 % 34.3 37.4 20.00 27.00 – % 2.0 2.0 3. Consolidated Financial Results Forecast for the Fiscal Year Ending March 31, 2023 (April 01, 2022 to March 31, 2023) Operating profit (% indicates changes from the previous corresponding period.) Basic earnings per Profit attributable to owners of parent share % Ordinary profit % Million yen % Million yen % Million yen Net sales Million yen Yen Full year 95,000 11.7 7,000 29.9 7,800 19.3 5,200 15.5 83.37 * Notes: (1) Changes in significant subsidiaries during the period under review (changes in specified subsidiaries resulting in changes in scope of consolidation): No (2) Changes in accounting policies, changes in accounting estimates and retrospective restatement 1) Changes in accounting policies due to the revision of accounting standards: Yes 2) Changes in accounting policies other than 1) above: No 3) Changes in accounting estimates: No 4) Retrospective restatement: No (3) Total number of issued shares (common shares) March 31, 2022: March 31, 2021: 68,339,704 shares 68,339,704 shares 1) Total number of issued shares at the end of the period (including treasury shares): 2) Total number of treasury shares at the end of the period: March 31, 2022: March 31, 2021: 5,968,067 shares 5,967,952 shares 3) Average number of shares during the period: Fiscal Year ended March 31, 2022: Fiscal Year ended March 31, 2021: 62,371,664 shares 62,371,752 shares * Financial results reports are exempt from audit conducted by certified public accountants or an audit corporation. * Proper use of earnings forecasts, and other special matters The statements regarding forecast of financial results in this report are based on the information that is available to the Company, as well as certain assumptions that are deemed to be reasonable by management. Therefore, there might be cases in which actual results differ materially from forecast values due to various factors. For the forecasts, please refer to “1. Overview of Business Results, etc. (4) Future Outlook” on page 4 of this report. Table of Contents – Attachments 1. Overview of Operating Results, etc. ………………………………………………………….. ２ (1) Overview of Operating Results for the Fiscal Year under Review ……………………. ２ (2) Overview of Financial Position for the Fiscal Year under Review ……………………. ３ (3) Overview of Cash Flows for the Fiscal Year under Review …………………………….. ３ (4) Future Outlook …………………………………………………………………………………………. ４ 2. Basic Policy on Selection of Accounting Standards……………………………………….. ５ 3. Consolidated Financial Statements and Principal Notes ……………………………….. ６ (1) Consolidated Balance Sheets ………………………………………………………………………. ６ (2) Consolidated Statements of Income and Comprehensive Income …………………….. ８ (3) Consolidated Statements of Changes in Net Assets ………………………………………… 10 (4) Consolidated Statements of Cash Flows ……………………………………………………….. 11 (5) Notes to Consolidated Financial Statements …………………………………………………. 12 (Notes on going concern assumption) …………………………………………………………… 12 (Changes in accounting policies) ……………………………………………………………………. 12 (Changes in presentation methods)…………………………………………………………………. 13 (Segment information, etc.) …………………………………………………………………………… 13 (Per share information) …………………………………………………………………………………. 15 (Significant subsequent events) ……………………………………………………………………… 15 1 1. Overview of Operating Results, etc. (1) Overview of Operating Results for the Fiscal Year under Review In the fiscal year under review (April 1, 2021 to March 31, 2022), while the global economy was generally on a path to recovery as progress was made in the resumption of economic activities due to the roll-out of COVID-19 vaccines and economic stimulus measures, restoring normality to production activities and a rallying of personal spending, the future outlook remains uncertain, due to geopolitical risks resulting from Russia’s invasion of Ukraine, sharp rises in raw materials prices, concerns about monetary tightening in the United States, and other factors. In the Japanese economy as well, the slump in personal spending and stagnation of economic activity, the results of the intermittent issuing of state of emergency declarations, continued until the end of September 2021. From October 2021, the constraints on economic activity gradually eased, and the economy was trending toward recovery, with personal spending showing signs of rallying and corporate earnings picking up, particularly in the manufacturing industry due to an upward trend in exports. However, the future outlook remains uncertain, due to factors such as the sharp rise in resources prices due to Russia’s invasion of Ukraine, concerns about inflation caused by the weakening of the yen, and the shortage of semiconductor chips. Under these circumstances, based on our long-term management plan, the “Vision-2028 EVOLUTION 100,” in our aim to become “Nippon Signal, supporter of structural reforms” by public transport operators, we are pursuing the development of new products and business structure reforms in anticipation of changes in the business environment in and after the COVID-19 era. The Company’s business results in the fiscal year under review were 79,709 million yen in orders received (down 6.4% year-on-year) and 85,047 million yen in net sales (down 8.3% year-on-year). Operating profit was 5,390 million yen (down 5.7% year-on-year), ordinary profit was 6,538 million yen (up 1.2% year-on-year), and profit attributable to owners of parent was 4,503 million yen (down 8.4% year-on-year). An overview of the Company’s business by segment is as follows. [Transportation Infrastructure] In Railway Signal Systems, in the domestic market, even as various products have been affected by the shortage of semiconductor chips, we received orders and recorded sales, including signal safety products such as Automatic Train Control (ATC) systems Centralized Traffic Control (CTC) systems, and interlocking devices for railway operators. We are also developing products related to customers’ reduction of fixed costs in anticipation of the post-COVID-19 era and capital investments focused on security and safety. We are rolling out Traio, our new platform that enables comprehensive monitoring across railway facilities and station devices to facilities around stations, to railway operators all over Japan. service. Further, as an initiative for the automation of train operation, in December 2020, we commenced verification tests for advanced-function Automatic Train Operations (ATO), based on existing Automatic Train Stop (ATS) devices on a section of Kyushu Railway Company’s Kashii Line. As the results of these tests were favorable, the use of these devices was expanded to the whole of the Kashii Line. We will continue to promote the development of products and services that will help our customers overcome their management challenges, such as a decrease in the workforce in the railway In overseas markets, we received orders and recorded sales of railway signal safety products from India, Taiwan, and Korea. Based on our installation track record in these markets, we have engaged in sales and marketing activities in response to infrastructure demand in various Asian countries. For Smart Mobility Systems, particularly Road Traffic Safety Systems, we received orders for and recorded sales of MVNO (network provision service business) and traffic signal equipment, etc. We also worked to expand sales of advanced Pedestrian Information and Communication Systems (PICS) and participated in verification testing of autonomous driving services using a System by coordination between infrastructure and autonomous car that we developed ourselves. 2As a result of the above, orders received was 44,018 million yen (down 12.7% year-on-year) and net sales was 48,831 million yen (down 4.6% year-on-year). Segment profit was 5,267 million yen (down 26.0% year-on-year). [ICT Solutions] new 500 yen coin. to the cloud, etc. Bangladesh. In AFC, particularly Station Service Network Systems, in the domestic market, despite the continued trend of reductions in capital investment by customers due to the impact of the COVID-19 pandemic, we received orders for and recorded sales of various types of platform doors, passenger gates, and ticket vending machines updated to accommodate the Looking to the future, in Station Network Systems, where rapid progress in digital transformation (DX) is being made, we worked on technological development and new product proposals for digital ticketing, e-commerce, transition In overseas markets, we received orders for and recorded sales of AFC systems and other products in Vietnam and In Smart City Systems, particularly Security System Solutions, although the semiconductor chip shortage continues to affect various products, we received orders for and recorded sales of 3D sensors for installation in platform doors, construction machinery, and farm equipment, as well as underground exploration radars, etc. In the robotics field, we strived to expand sales of automated cleaning robots that have bacteria elimination functions and that are able to communicate with elevators. We engaged jointly with our partner companies (Note) in the development of multifunctional railway heavy machinery with the aim of the eliminating heavy-lifting work from railway maintenance operations and improving their efficiency. As a result of the above, orders received was 35,691 million yen (up 2.6% year-on-year) and net sales was 36,216 million yen (down 12.9% year-on-year). Segment profit was 3,300 million yen (up 99.9% year-on-year). (Note) West Japan Railway Company and Man-Machine Synergy Effectors, Inc. (2) Overview of Financial Position for the Fiscal Year under Review Total assets at the end of the fiscal year under review were 134,086 million yen, a decrease of 7,270 million yen compared with the end of the previous fiscal year. This was mainly due to decreases of 6,906 million yen in cash and deposits, 3,899 million yen in inventory assets, and 1,235 million yen in investment securities due to falls in fair value and other reasons, despite an increase of 5,002 million yen in notes and accounts receivable and contract assets. Liabilities decreased by 9,316 million yen compared with the end of the previous fiscal year to 47,345 million yen, due mainly to decreases of 4,748 million yen in short-term borrowings, 3,207 million yen in notes and accounts payable, 838 million yen in provision for loss on orders received, and 501 million yen in income taxes payable. Net assets were 86,740 million yen, an increase of 2,046 million yen compared with the end of the previous fiscal year. This was due mainly to the recording of 4,503 million yen in profit attributable to owner of parent, despite a decrease of 1,684 million yen due to dividends of surplus and a decrease of 845 million yen in valuation difference on The balance of cash and cash equivalents at the end of the fiscal year under review was 6,344 million yen, a decrease available-for-sale securities. (3) Overview of Cash Flows for the Fiscal Year under Review of 6,906 million yen compared with the end of the previous fiscal year. Cash flows in each area of activity are as follows. (Cash flows from operating activities) Net cash provided by operating activities for the year ended March 31, 2022 was 2,099 million yen, compared with a cash inflow of 1,145 million yen in the previous fiscal year. The principal cash inflow factor was 6,531 million yen in profit before tax, despite cash outflow factors of an increase of 4,524 million yen in trade receivables, a decrease of 2,871 million yen in trade payables, and income taxes paid of 1,685 million yen. 3 (Cash flows from investing activities) Net cash used in investing activities for the year ended March 31, 2022 was 2,344 million yen, compared with a cash outflow of 1,911 million yen in the previous fiscal year. The principal cash outflow factor was 2,299 million yen for the acquisition of property, plant and equipment and intangible assets. (Cash flow from financing activities) Net cash used in financing activities for the year ended March 31, 2022 was 6,750 million yen, compared with a cash inflow of 1,354 million yen in the previous fiscal year. The principal cash outflow factors were 4,923 million yen in repayments of short-term borrowings and 1,680 million yen in expenditure due to payment of dividends. (4) Future Outlook In terms of future initiatives, in Railway Signal Systems, we will promote the creation of added value in signal safety devices and other equipment and develop products in response to social issues such as the decline in the workforce, natural disasters, and carbon offsets. In Smart Mobility Systems, with the aim of providing commercial services including first/last one mile (FL1M) services, where self-driving public transportation vehicles connect departure points and transport hubs, such as train stations, as well as transport hubs and destinations, and automatic operation services, available based on coordination between infrastructure, such as traffic lights, and self-driving vehicles, we will participate in validation tests across Japan and work on product development and commercialization to implement such services. In AFC, business opportunities for cashless settlement systems and image processing are expected to expand in anticipation of full-scale development of MaaS. To respond to the new smart mobility society and settlement systems, we will bring new products into the market and create new businesses. In Smart City Systems, we will enhance security gate lineups and accommodate new technologies, such as facial recognition and contactless technologies. Moreover, we will work on the development of autonomous general-purpose humanoid heavy machinery by leveraging the knowledge gained from cleaning robot development. Due to the impact of COVID-19, the trend of reduction in capital investments by our major customers is expected to continue for the immediate future. We will accelerate our transformation through the challenges of developing new products and rolling out new businesses in response to the changes in the business environment in and after the COVID-19 era (labor-saving and personnel-saving moves and work style reforms at our customers) and the rapid progress in digital transformation (DX). Forecast amounts for the next fiscal year are as follows. Net sales (Millions of yen) Segment profit Amount Year-on-year change (%) Amount Year-on-year change (%) 56,000 39,000 95,000 － 95,000 14.7 7.7 11.7 － 11.7 6,200 4,000 10,200 3,200) 7,000 (17.7 21.2 19.1 － 29.9 Notes: Adjustments in segment profit (loss) represent corporate expenses that are not allocated to reportable segments. Corporate expenses are primarily expenses of the administration divisions of the parent company’s headquarters that are not attributable to any of the reportable segments. Transportation Infrastructure ICT Solutions Sub-total Adjustments Total 42. Basic Policy on Selection of Accounting Standards Taking into consideration the comparability of consolidated financial statements across periods and among companies, the Group will maintain its policy of preparing its consolidated financial statements under Japanese GAAP for the immediate future. With regard to the application of International Financial Reporting Standards (IFRS), the Company’s policy is to take appropriate measures after consideration of the situation in Japan and overseas. 53. Consolidated Financial Statements and Principal Notes (1) Consolidated Balance Sheets As of March 31,2021 As of March 31,2022 (Million yen) Assets Current assets Cash and deposits Notes and accounts receivable – trade Notes receivable – trade Accounts receivable – trade Contract assets Electronically recorded monetary claims – operating 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 Tools, furniture and fixtures, net Land Leased assets, net Construction in progress Total property, plant and equipment Intangible assets Investments and other assets Investment securities Long-term loans receivable Retirement benefit asset Deferred tax assets Other Allowance for doubtful accounts Total investments and other assets Total non-current assets Total assets 13,303 55,696 – – – 1,658 4,825 12,672 2,723 2,065 (2) 92,943 6,897 1,173 1,223 5,488 101 1,628 16,513 1,803 24,670 3 2,529 1,162 1,754 (23) 30,097 48,413 141,356 6,397 – 693 30,109 29,894 1,188 3,774 9,110 3,436 2,052 (1) 86,657 6,796 1,055 1,560 5,488 89 1,621 16,611 1,900 23,435 2 2,551 1,273 1,677 (23) 28,916 47,429 134,086 6 (Million yen) As of March 31,2021 As of March 31,2022 Liabilities Current liabilities Notes and accounts payable – trade Electronically recorded obligations – operating Short-term borrowings Lease liabilities Income taxes payable Contract liabilities Provision for bonuses Provision for loss on orders received Other Total current liabilities Non-current liabilities Long-term deposits received Long-term accounts payable – other Lease liabilities Deferred tax liabilities Retirement benefit liability 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 Remeasurements of defined benefit plans Total accumulated other comprehensive income Total net assets Total liabilities and net assets 13,574 4,007 16,531 6 1,387 – 2,628 1,515 6,973 46,624 95 81 19 564 9,276 10,037 56,662 10,000 7,585 62,939 (6,570) 73,954 10,650 90 10,740 84,694 141,356 10,367 4,231 11,782 61 886 1,270 2,603 676 5,157 37,037 99 52 109 602 9,444 10,307 47,345 10,000 7,585 65,806 (6,570) 76,821 9,805 114 9,919 86,740 134,086 7(2) Consolidated Statements of Income and Comprehensive Income (Million yen) For the fiscal year ended March 31,2021 For the fiscal year ended March 31,2022 Net sales Cost of sales Gross profit Selling, general and administrative expenses Operating profit Non-operating income Interest income Dividend income Dividend income of life insurance Foreign exchange gains Rental income from real estate Nursing services income Other Total non-operating income Non-operating expenses Interest expenses Commission expenses Rental expenses on real estate Taxes and dues Nursing services expense Cost of the infection control under COVID-19 Other Total non-operating expenses Ordinary profit Extraordinary income Gain on sale of non-current assets Gain on sale of investment securities Total extraordinary income Extraordinary losses Loss on sale and retirement of non-current assets Loss on sale of investment securities Loss on valuation of investment securities Total extraordinary losses Profit before income taxes Income taxes – current Income taxes – deferred Total income taxes Profit (Details) Profit attributable to owners of parent 92,755 72,949 19,805 14,092 5,713 3 354 170 18 312 38 84 983 43 13 49 16 42 42 25 233 6,463 0 826 826 6 0 0 6 7,282 2,248 118 2,366 4,916 4,916 85,047 65,474 19,573 14,182 5,390 1,308 0 492 144 168 312 37 151 36 – 49 30 41 – 2 160 6,538 0 – 0 7 – 0 7 6,531 1,674 353 2,027 4,503 4,503 8 (Million yen) For the fiscal year ended March 31,2021 For the fiscal year ended March 31,2022 Other comprehensive income Valuation difference on available-for-sale securities Remeasurements of defined benefit plans, net of tax Total other comprehensive income Comprehensive income (Details) Comprehensive income attributable to owners of parent 1,635 116 1,751 6,668 6,668 (845) 24 (820) 3,682 3,682 9(3) Consolidated Statements of Changes in Net Assets For the fiscal year ended March 31,2021 Shareholders’ equity Accumulated other comprehensive income Share capital Capital surplus Retained earnings Treasury shares Total shareholders’ equity Valuation difference on available-for-sale securities Remeasurements of defined benefit plans (Million yen) Total accumulated other comprehensive income Total net assets 10,000 7,585 59,644 (6,570) 70,659 9,014 (26) 8,988 79,648 – (0) 3,294 (0) 3,294 1,635 10,000 7,585 62,939 (6,570) 73,954 10,650 For the fiscal year ended March 31,2022 1,635 1,751 1,751 116 116 90 1,751 5,046 10,740 84,694 (Million yen) Shareholders’ equity Accumulated other comprehensive income Share capital Capital surplus Retained earnings Treasury shares Total shareholders’ equity Valuation difference on available-for-sale securities Remeasurements of defined benefit plans Total accumulated other comprehensive income Total net assets 10,000 7,585 62,939 (6,570) 73,954 10,650 90 10,740 84,694 Balance at beginning of period Changes during period Dividends of surplus Profit attributable to owners of parent Change from merger of consolidated and unconsolidated subsidiaries Purchase of treasury shares Disposal of treasury shares Net changes in items other than shareholders’ equity Total changes during period Balance at end of period Balance at beginning of period Changes during period Dividends of surplus Profit attributable to owners of parent Change from merger of consolidated and unconsolidated subsidiaries Purchase of treasury shares Disposal of treasury shares Net changes in items other than shareholders’ equity Total changes during period Balance at end of period (1,621) 4,916 (1,621) 4,916 (0) (0) (0) 0 – 0 – (1,684) 4,503 (1,684) 4,503 47 47 (0) (0) (1,621) 4,916 – (0) 0 (1,684) 4,503 47 (0) – (845) 24 (820) (820) – – 2,867 (0) 2,867 (845) 10,000 7,585 65,806 (6,570) 76,821 9,805 24 114 (820) 2,046 9,919 86,740 10(4) Consolidated Statements of Cash Flows Cash flows from operating activities Profit before income taxes Depreciation Loss (gain) on sale and retirement of non-current assets Loss (gain) on sale of investment securities Interest and dividend income Interest expenses Decrease (increase) in trade receivables Decrease (increase) in inventories Increase (decrease) in trade payables Increase (decrease) in contract liabilities Increase (decrease) in retirement benefit liability Other, net Subtotal Interest and dividends received Interest paid Income taxes paid Income taxes refund 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 Other, net Net cash provided by (used in) investing activities Cash flows from financing activities Net increase (decrease) in short-term borrowings Proceeds from deposits received from an affiliated company Proceeds from deposits received from an unaffiliated entity Repayments of lease liabilities Dividends paid Decrease (increase) in treasury shares 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 Increase in cash and cash equivalents resulting from merger with unconsolidated subsidiaries Cash and cash equivalents at end of period (Million yen) For the fiscal year ended March 31,2021 For the fiscal year ended March 31,2022 7,282 2,052 6 (826) (357) 43 3,281 (2,884) (4,288) (697) 70 (134) 3,547 357 (43) (2,718) 1 1,145 (54) 54 (2,241) 0 (621) (220) 868 303 (1,911) 3,205 (40) (185) (6) (1,618) (0) 1,354 95 684 12,566 – 13,250 6,531 2,233 6 – (493) 36 (4,524) 3,923 (2,871) (446) 331 (1,398) 3,328 493 (36) (1,685) – 2,099 (54) 54 (1,798) 0 (500) (96) 0 50 (2,344) (4,923) – (130) (16) (1,680) (0) (6,750) 51 (6,943) 13,250 37 6,344 11 (5) Notes to Consolidated Financial Statements (Notes on going concern assumption) Not applicable (Changes in accounting policies) (Accounting standard for revenue recognition) The Company has adopted the “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020; hereinafter “Revenue Recognition Standard”) and other standards from the beginning of the fiscal year under review. The Company recognizes revenue when control of a promised good or service is transferred to a customer in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods and services. With this adoption, for contracts to which the completed-contract method had previously been applied, the Company has shifted to a method by which it recognizes revenue over time in proportion to the fulfillment of performance obligations. In cases where percentage of completion related to fulfillment of performance obligations cannot be reasonably estimated but for which costs that are incurred when fulfilling those performance obligations are expected to be recovered, the costs that are expected to be recovered are recognized as revenue until the fulfillment of performance obligations can be reasonably estimated. For transactions in which the Company acts as an agent, whereas previously the total amount of the consideration received from the customer was recognized as revenue, the Company now recognizes the net amount as revenue. The Company applies the Revenue Recognition Standard, etc. in accordance with the transitional treatment provided for in the proviso to Paragraph 84 of the Revenue Recognition Standard. The cumulative impact of retrospectively applying the new accounting policies to prior periods is adjusted to retained earnings at the beginning of the reporting period, with the new accounting policies applied from the beginning balance. However, the Company applies the method provided for in Paragraph 86 of the Revenue Recognition Standard, and does not apply the new accounting policies retrospectively to contracts for which substantially all revenue amounts had been recognized prior to the beginning of the reporting period in accordance with the previous treatment. In addition, applying the method stipulated in proviso (1) to Paragraph 86 of the Revenue Recognition Standard, contract modifications that occurred prior to the beginning of the reporting period were accounted for based on the terms of the contract after reflecting all contract modifications, with the cumulative impact adjusted to retained earnings at the beginning of the reporting period. As a result of this change, net sales for the fiscal year under review increased by 1,147 million yen and cost of sales increased by the same amount, but there was no impact on operating profit, ordinary profit, and profit before tax. This change also had no effect on the beginning balance of retained earnings. Due to the adoption of the Revenue Recognition Standard and other standards, “notes and accounts receivable – trade,” which was presented under “current assets” in the Consolidated Balance Sheet of the previous fiscal year, has been included under “notes receivable – trade,” “accounts receivable – trade,” and “contract assets” from the fiscal year under review, and “other,” which was presented under “current liabilities,” has been included under “contract liabilities” and “other” from the fiscal year under review. In addition, “increase (decrease) in advances received,” which was presented under “cash flow from operating activity” in the Consolidated Statement of Cash Flows of the previous fiscal year, has been included under “increase (decrease) in “contract liabilities” from the fiscal year under review. However, in accordance with the transitional treatment set forth in Paragraph 89-2 of the Revenue Recognition Standard, figures for the previous period have not been reclassified based on the new presentation method. (Accounting standard for fair value measurement) The Company has adopted the “Accounting Standard for Fair Value Measurement” (ASBJ Statement No. 30, July 4, 2019; hereinafter “Fair Value Measurement Standard”) and other standards from the beginning of the fiscal year under review, and will prospectively apply the new accounting policies stipulated by the Fair Value Measurement Standard, etc. in accordance with the transitional treatment provided in Paragraph 19 of the Fair Value Measurement Standard and Paragraph 44-2 of the “Accounting Standard for Financial Instruments” (ASBJ Statement No. 10, July 4, 2019). 12This adoption has no effect on the consolidated financial statements. (Changes in presentation methods) (Consolidated Statements of Income and Comprehensive Income) “Foreign exchange gains,” which was included in “other” under “non-operating income” in the previous fiscal year, is separately stated from the fiscal year under review because it exceeded 10% of the total amount of non-operating income. In addition, “taxes and dues,” which was included in “other” under “non-operating expenses” in the previous fiscal year, is separately stated from the fiscal year under review because it exceeded 10% of the total amount of non-operating expenses. presentation method. The consolidated financial statements for the previous fiscal year have been restated to reflect these changes in As a result, the 103 million yen presented as “other” under “non-operating profit” in the Consolidated Statements of Income and Comprehensive Income of the previous fiscal year has been restated as 18 million yen in “foreign exchange gains” and 84 million yen in “other.” In addition, the 41 million yen presented as “other” in “non-operating expenses” has been restated as 16 million yen in “taxes and dues” and 25 million yen in “other.” (Segment information, etc.) [Segment information] 1. Overview of reportable segments The Company’s reportable segments are segments for which discrete financial information is available and which are regularly reviewed by the Board of Directors to determine the allocation of management resources and assess business results The Company’s business comprises segments by products and services provided. The Company classifies the two businesses of “Transportation Infrastructure” and “ICT Solutions” as reportable segments. The Transportation Infrastructure segment mainly conducts the manufacture, sale, and maintenance services of railway signal safety equipment and facilities and road traffic safety systems. The ICT Solutions segment mainly conducts the manufacture, sale, and maintenance services of AFC equipment and parking lot equipment. 2. Method of calculation of net sales, income (loss), assets, liabilities, and other items by reportable segment The method of accounting for reported business segments is stated with the amounts based on the accounting standards adopted for the preparation of the consolidated financial statements. Profit figures for reportable segments are based on operating profit. As stated in changes in accounting policies, the Company has adopted the Revenue Recognition Standard from the beginning of the fiscal year under review. Because the accounting methods concerning revenue recognition have been changed, the method of calculating profit (loss) of business segments has also been similarly changed. Due to these changes, net sales in the Transportation Infrastructure segment for the fiscal year under review increased by 562 million yen, and net sales in the ICT Solutions segment increased by 584 million yen. However, because cost of sales increased by the same amounts, there is no impact on segment profit. 13 3. Information on net sales, profit (loss), assets, liabilities, and other items by reportable segment and classification For the year ended March 31, 2021 (from April 1, 2020 to March 31, 2021) Reportable segment Transportation Infrastructure ICT Solutions Total Adjustments (Millions of yen) Consolidated Balance Sheet Amount of revenues Net sales Net sales to external customers 51,189 41,565 92,755 Intersegment internal sales or transfers Total Segment profit Segment assets Other items Depreciation Increase in property, plant and equipment and intangible assets (decrease) － 51,189 7,114 66,267 1,008 1,785 － 41,565 1,650 47,088 809 889 － 92,755 8,764 113,356 1,817 2,674 Notes: 1. Adjustments in segment profit (loss) represent corporate expenses that are not allocated to reportable segments. Corporate expenses are primarily expenses of the administration divisions of the parent company’s headquarters that are not attributable to any of the reportable segments. 2. Segment profit is profit after adjustment of operating profit in the consolidated financial statements. 3. Adjustments of segment assets are primarily surplus operating funds (cash and deposits), long-term investment assets (investment securities), and assets of the administration divisions of the parent company. 4. Adjustments of depreciation are insignificant. 5. Adjustments of property, plant and equipment and intangible assets are insignificant. For the year ended March 31, 2022 (from April 1, 2021 to March 31, 2022) Reportable segment Transportation Infrastructure ICT Solutions Total Adjustments (Millions of yen) Consolidated Balance Sheet Amount Net sales Net sales to external customers 48,831 36,216 85,047 Intersegment internal sales or transfers Total Goods or services transferred at a point in time Goods or services transferred over time Total Segment profit Segment assets Other items Depreciation Increase in property, plant and equipment and intangible assets (decrease) － 48,831 12,497 36,334 48,831 5,267 67,109 1,134 1,521 － 36,216 11,626 24,589 36,216 3,300 44,420 782 678 － 85,047 24,123 60,924 85,047 8,567 111,530 1,917 2,200 Notes: 1. Adjustments in segment profit (loss) represent corporate expenses that are not allocated to reportable segments. Corporate expenses are primarily expenses of the administration divisions of the parent company’s headquarters that are not attributable to any of the reportable segments. － － － 234 237 3,051) 28,000 (－ － － － － － 3,177) 22,556 (253 316 92,755 － 92,755 5,713 141,356 2,052 2,912 85,047 － 85,047 24,123 60,924 85,047 5,390 134,086 2,170 2,516 14 2. Segment profit is profit after adjustment of operating profit in the consolidated financial statements. 3. Adjustments of segment assets are primarily surplus operating funds (cash and deposits), long-term investment assets (investment securities), and assets of the administration divisions of the parent company. 4. Adjustments of depreciation are insignificant. 5. Adjustments of property, plant and equipment and intangible assets are insignificant. For the year ended March 31, 2021 (from April 1, 2020 to March 31, 2021) 1,357.90 yen 78.82 yen For the year ended March 31, 2022 (from April 1, 2021 to March 31, 2022) 1,390.71 yen 72.21 yen Note: Data on diluted earnings per share is not presented above, as there were no potential shares with a dilutive effect. (Per share information) Net assets per share Basic earnings per share (Significant subsequent events) Not applicable 15