エン・ジャパン（4849） – 〔Delayed〕Fiscal Year Ended March 31, 2022, Earnings Announcement (Consolidated)

en Japan Inc. Fiscal Year Ended March 31, 2022, Earnings Announcement [under Japanese GAAP] (Consolidated) May 13, 2022 en Japan Inc. 4849 Company Name Stock Code Representative (Title) President Contact (Title) Regular General Shareholders’ Meeting Scheduled date to begin dividend payments Scheduled date for submission of Securities Report Preparation of Summary Supplementary Explanatory Materials Earnings Briefing Listing Exchanges URL https://corp.en-japan.com/ (Name) Takatsugu Suzuki First Section of the Tokyo Stock Exchange June 28, 2022 June 29, 2022 June 29, 2022 Telephone +81-3-3342-4506 Administration Division Director (Name) Toshio Hijikata Yes Yes (for analysts and institutional investors) (Figures rounded down to nearest million yen) 1. FY Ended March 2022 Consolidated Earnings (From April 1, 2021 to March 31, 2022) (1) Consolidated Operating Results (Percentages indicate percent change from the prior fiscal year) Net Sales Operating Income Ordinary Income Profit Attributable to Owners of Parent FYE 03/2022 FYE 03/2021 Million yen 54,544 42,725 % 89.3 -50.9 (Note) Comprehensive income FYE 03/2022: 7,242 million yen (115.7%) FYE 03/2021: 3,357 million yen (-52.3%) % Million yen 9,633 7,771 % Million yen 6,628 3,502 % Million yen 10,138 7,939 27.7 -28.2 27.7 -24.8 24.0 -29.4 EPS Fully Diluted EPS ROE Ordinary Income to Total Assets Operating Income to Net Sales Yen 147.71 78.19 Yen 147.38 77.96 % 17.2 9.5 % 19.7 16.1 FYE 03/2022 FYE 03/2021 (2) Consolidated Financial Position FYE 03/2022 FYE 03/2021 (Reference) Equity (3) Consolidated Cash Flows Total Assets Net Assets Equity Ratio Net Assets per Share Million yen 56,215 46,644 Million yen 41,160 36,856 % 72.2 77.8 FYE 03/2022 40,603 million yen FYE 03/2021 36,311 million yen Net Cash Provided by (Used in) Operating Activities Net Cash Provided by (Used in) Investing Activities Net Cash Provided by (Used in) Financing Activities Cash and Cash Equivalents at End of Period Million yen 11,453 5,652 Million yen -3,086 -2,150 Million yen -1,813 -4,983 Million yen 33,389 26,835 FYE 03/2022 FYE 03/2021 % 17.7 18.2 Yen 903.89 810.66 -1- 2. Dividends Total Dividend Amount (Full year) Total Dividend Payout Ratio (Consolidated) Dividend to Net Asset Ratio (Consolidated) Annual Dividend 2nd Quarter-end Yen 0.00 0.00 3rd Quarter-end Year End Yen 37.10 70.10 1st Quarter-end Yen － － － FYE 03/2021 FYE 03/2022 FYE 03/2023 (projected) 3. FY Ending March 2023 Projected Consolidated Operating Results (From April 1, 2022 to March 31, 2023) Yen Million yen 1,750 3,314 % 47.5 47.5 － Yen － － － 37.10 70.10 70.10 70.10 0.00 % 4.5 8.2 (Percentages indicate percent change from the prior fiscal year) Net Sales Full year Million yen 62,000 Operating Income Ordinary Income Profit Attributable to Owners of Parent % Million yen % 2,118 -68.0 % Million yen 3,085 % Million yen 3,086 -69.6 -68.0 13.7 EPS Yen 47.20 * Notes (1) Change in major subsidiaries during the fiscal year under review (Change in specific subsidiaries that will accompany a change in scope of consolidation): No Addition (Name): None Exclusion (Name) None (2) Changes in accounting policy, changes in accounting estimates, or restatement due to correction a. Changes in accounting policy accompanying amendment of accounting principles: b. Changes in accounting policy other than “a.”: c. Changes in accounting estimates: d. Restatement due to correction: (3) Number of shares issued (common share) a. Number of shares issued at fiscal year-end (including treasury shares) FYE 03/2022 49,716,000 shares FYE 03/2021 49,716,000 shares b. Number of shares of treasury share at fiscal year-end FYE 03/2022 4,795,377 shares FYE 03/2021 4,923,672 shares c. Average number of shares issued during the period FYE 03/2022 44,874,206 shares FYE 03/2021 44,791,225 shares Yes No No No -2- (Reference) Summary of Non-Consolidated Operating Results 1. FYE 03/2022 Non-Consolidated Earnings (From April 1, 2021 to March 31, 2022) (1) Non-Consolidated Operating Results (Percentages indicate percent change from the prior fiscal year) Net Sales Operating Income Ordinary Income FYE 03/2022 FYE 03/2021 Million yen 35,281 26,919 % Million yen 7,393 6,792 31.1 -28.9 % Million yen 10,292 8.8 6,763 -30.1 52.2 -30.6 % 7,341 138.2 -52.6 3,082 Profit % Million yen EPS Fully Diluted EPS Yen 163.24 68.62 FYE 03/2022 FYE 03/2021 (2) Non-Consolidated Financial Position Total Assets Yen 163.61 68.83 FYE 03/2022 FYE 03/2021 Million yen 51,347 45,565 Million yen 41,496 36,698 Net Assets Equity Ratio Net Assets per Share Yen % 80.6 80.2 921.00 816.26 36,562 million yen FYE 03/2022 41,372 million yen (Reference) Equity [This Earnings Announcement [under Japanese GAAP] is outside the scope of audits by certified public accountants or an audit corporation.] [Explanation regarding appropriate use of operating results projections and other special notes] FYE 03/2021 Forward-looking statements including projected operating results contained in this report and supplementary materials are based on information currently available to the Company and on certain assumptions deemed as rational, and are not intended to guarantee achievements by the Company. Actual results may differ significantly from such projections due to various factors. -3- Attachments Table of Contents 1. Overview of Operating Results………………………………………………………………………………………………………………………………………… 5 (1) Overview of Operating Results for the Current Fiscal Year ………………………………………………………………………………………… 5 (2) Overview of Financial Position for the Current Fiscal Year ………………………………………………………………………………………… 6 (3) Overview of Cash Flows for the Current Fiscal Year …………………………………………………………………………………………………. 7 (4) Business Outlook …………………………………………………………………………………………………………………………………………………. 7 (5) Material Events Relating to the Going Concern Assumption ………………………………………………………………………………………. 8 2. Basic Approach to the Selection of Accounting Standards …………………………………………………………………………………………………… 8 3. Consolidated Financial Statements and Key Notes …………………………………………………………………………………………………………….. 9 (1) Consolidated Balance Sheets …………………………………………………………………………………………………………………………………. 9 (2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income ………………………………………. 11 (3) Consolidated Statements of Changes in Net Assets …………………………………………………………………………………………………. 13 (4) Consolidated Statements of Cash Flows ………………………………………………………………………………………………………………… 15 (5) Notes to the Consolidated Financial Statements ……………………………………………………………………………………………………… 17 (Notes Relating to the Going Concern Assumption) ……………………………………………………………………………………………… 17 (Changes in Accounting Policies)……………………………………………………………………………………………………………………….. 20 (Change in Presentation Method) ……………………………………………………………………………………………………………………….. 21 (Consolidated Balance Sheets) …………………………………………………………………………………………………………………………… 22 (Consolidated Statements of Income) ………………………………………………………………………………………………………………….. 22 (Consolidated Statements of Comprehensive Income) …………………………………………………………………………………………… 24 (Consolidated Statements of Cash Flows) ……………………………………………………………………………………………………………. 24 (Segment Information, etc.) ……………………………………………………………………………………………………………………………….. 24 (Per-Share Information)…………………………………………………………………………………………………………………………………….. 26 -4- 1. Overview of Operating Results (1) Overview of Operating Results for the Current Fiscal Year 1) Operating Results for the Fiscal Year ended March 31, 2022 Net sales in the fiscal year ended March 31, 2022 increased to ¥54,544 million (up 27.7% year on year) mainly due to the steady recovery in the domestic job board and overseas businesses. Total costs increased to ¥44,911 million (up 28.5% year on year) due primarily to an increase in costs accompanied by higher sales in the IT-related temporary staffing business in India, strengthening of advertising on the domestic job board in line with the recovery of demand in job openings, and upfront investment of advertising expenses in core businesses such as engage and AMBI. As a result of the above, operating income was ¥9,633 million (up 24.0% year on year). Ordinary income was ¥10,138 million (up 27.7% year on year) mainly due to gain on investments in partnership, and profit attributable to owners of parent was ¥6,628 million (up 89.3% year on year). Prior Fiscal Year (From April 1, 2020 to March 31, 2021) Current Fiscal Year (From April 1, 2021 to March 31, 2022) (Unit: Million yen) Change Percent change (%) Net Sales Operating Income Ordinary Income Profit Attributable to Owners of Parent Net Sales Domestic Job Board Domestic Permanent Recruitment Overseas HR-Tech Other Business/ Subsidiaries 2) Summary of Major Businesses (Managerial accounting basis) Prior Fiscal Year (From April 1, 2020 to March 31, 2021) Current Fiscal Year (From April 1, 2021 to March 31, 2022) (Unit: Million yen) Change Percent change (%) 42,725 7,771 7,939 3,502 21,774 9,385 8,011 1,215 2,694 54,544 9,633 10,138 6,628 29,460 9,649 10,975 3,920 976 11,819 1,861 2,199 3,126 7,686 264 2,963 2,705 -1,718 27.7% 24.0% 27.7% 89.3% 35.3% 2.8% 37.0% 222.6% -63.8% The difference between the combined net sales of each business and the consolidated net sales is attributable to the adjustment made among the businesses and consolidated adjustments. (Domestic Job Board) Hiring demand, which had declined due to the COVID-19 pandemic, recovered moderately in the Domestic Job Board. In the full-time employment domain, unit price of postings rose in mainly client companies with large hiring budgets, and the number of job openings increased as client companies resumed hiring. In addition, hiring demand for high-class staff such as specialists and those in managerial positions increased to a level that exceeded the pre-COVID-19 level. While the supply-demand balance in the overall recruitment market is gradually becoming tight, net sales increased significantly as the Company has been strengthening acquisition of job seekers through active investment in advertising expenses. As a result of the above, net sales of Domestic Job Board amounted to ¥29,460 million up 35.3% year on year. (Domestic Permanent Recruitment) Hiring demand for high-class staff continued to be solid and net sales increased steadily. As for young people, or those with potential, hiring demand for those without experience recovered in all industries and job types against -5- the backdrop of rapidly growing demand for hiring. By increasing the Company’s operating productivity, net sales reached the same level as the previous year, despite having a smaller workforce than the pre-COVID-19 level. As a result of the above, net sales of Domestic Permanent Recruitment amounted to ¥9,649 million up 2.8% year on year. (Overseas) In India, where the Company operates IT-related temporary staffing as its primary business, net sales increased significantly, exceeding the pre-COVID-19 level due to the small impact from the COVID-19 pandemic and an increase in global IT-related demand. In Vietnam, where operation of job advertisement websites and permanent recruitment is its primary business, net sales increased due to the moderate recovery in the country’s hiring demand. Although net sales temporarily decreased in the third quarter (from July to September 2021 local time) of the fiscal year ended March 31, 2022 due to COVID-19 lockdowns, steady recovery is seen afterwards. As a result of the above, net sales of overseas business amounted to ¥10,975 million up 37.0% year on year. (HR-Tech) The total number of user companies of “engage” greatly increased to 410,000 (as of March 2022). The number of job offerings created via “engage” (both via fee-based and free services) increased steadily, further enhancing usage by client companies. In light of this situation, from the fourth quarter of the fiscal year ended March 31, 2022, upfront investment in advertising expenses has been made to strengthen acquisition of job seekers that, as a result, accelerated the growth of net sales. Net sales of other services, such as ATS and test services, also grew steadily due to the increase in use from the growing numbers hired by companies. As a result of the above, net sales of HR-Tech amounted to ¥3,920 million up 222.6% year on year. (2) Overview of Financial Position for the Current Fiscal Year Assets, Liabilities and Net Assets (Assets) Total assets at the end of the fiscal year ended March 31, 2022 increased by ¥9,571 million compared with the end of the previous fiscal year to ¥56,215 million. Current assets increased ¥8,576 million to ¥42,301 million. This was mainly due to increases in cash and deposits of ¥7,474 million, notes and accounts receivable-trade, and contract assets of ¥1,119 million. Non-current assets increased ¥994 million to ¥13,914 million. This was primarily attributable to increases in investment securities of ¥466 million and shares of subsidiaries and associates of ¥547 million. (Liabilities) Total liabilities were ¥15,054 million, an increase of ¥5,266 million from the end of the previous fiscal year. Current liabilities increased ¥5,240 million to ¥13,501 million. This was mainly due to increases in accounts payable-trade of ¥629 million, accounts payable-other of ¥2,090 million and advances received of ¥1,532 million. Non-current liabilities rose ¥26 million to ¥1,553 million. (Net Assets) Total net assets were ¥41,160 million, up ¥4,304 million from the end of the previous fiscal year. This was mainly due to an increase in retained earnings of ¥3,748 million. Asset information by segment is not prepared since the Group does not use such information on each segment for resource allocation and performance evaluation. -6- 1) Cash Flow (3) Overview of Cash Flows for the Current Fiscal Year Cash Flow Cash and cash equivalents in the fiscal year ended March 31, 2022 increased ¥6,553 million from the previous fiscal year to ¥33,389 million. The status of each type of cash flow and the factors behind them are as follows. (Net cash provided by (used in) operating activities) Net cash provided by operating activities in the fiscal year ended March 31, 2022 was ¥11,453 million compared to the previous fiscal year of ¥5,652 million. This was due to the posting of income before income taxes of ¥9,976 million, depreciation of ¥1,678 million, decrease in notes and accounts receivable-trade of ¥1,900 million, increase in accounts payable-other of ¥2,038 million, increase in advances received of ¥1,422 million, and income taxes paid of ¥2,604 million. (Net cash provided by (used in) investing activities) Net cash used in investing activities during the fiscal year ended March 31, 2022 was ¥3,086 million compared to ¥2,150 million used in the previous fiscal year. This was primarily due to purchase of intangible assets of ¥1,869 million, payments into time deposits of ¥1,395 million, and purchase of shares of subsidiaries and associates of ¥666 million. (Net cash provided by (used in) financing activities) Net cash used in financing activities during the fiscal year ended March 31, 2022 was ¥1,813 million compared to ¥4,983 million used in the previous fiscal year. This was primarily due to cash dividends paid of ¥1,751 million and dividends paid to no-controlling interests of ¥61 million. The en Japan Group procures necessary funds mainly from operating cash flow. The Group has also concluded an overdraft facility agreement (maximum amount: ¥1,000 million) and a committed credit line agreement (maximum amount: ¥5,000 million) with a bank. There were no outstanding borrowings as of the end of the fiscal year ended March 31, 2022. The Company has no plans to construct any major new facilities. (4) Business Outlook (Medium and Long-term Outlook) We recognize that the basic environment of Japan’s human resources business market, to which the en Japan Group belongs, is experiencing steady hiring demand from companies, against the backdrop of a structural shortage of workers caused by a decline in the working age population, changes in industrial structures, and other factors. In addition, changes in the way people work, such as teleworking and freelancing, and the promotion of digitalization at companies, both resulting from the COVID-19 pandemic, are expected to spur changes in job-seekers’ inclination to switch jobs, as well as growth industries. In light of these circumstances, the Group expects that more people will seek to change jobs across industries, which will consequently increase job mobility. In the overseas human resources business market, Vietnam and India, which we are focusing on, are expected to continuously deliver strong economic growth. Given the large population and low average age, we see high growth potential in the human resources business over the medium to long term. Additionally, regardless of the country, the IT and technology markets are expected to grow and the need for human resources in these areas is high. As such, we anticipate strong growth, including offshore development in these two countries. In these circumstances, in addition to increasing job mobility, the Company expects diversified use and selection of its services will further continue among job seekers and the companies hiring them. The Company upholds “To make the world better by increasing the number of people who work hard for others and society” as its Purpose (the Company’s reason for being in society). To realize this, it will aim to appropriately move labor to positions with significant social impact and growth industries, and increase job opportunities by through provision of job recruitment information ensuring both quality and quantity via the use of technology. Going forward, we intend to make active investments to develop “engage” and “human resources platform” as our next core business to significantly increase net sales. Existing businesses will also continuously be regarded as highly profitable businesses and invested in constantly. Human resource investment and strengthening of -7- governance will also be promoted actively to support business growth. “engage” offers a unique service different from that of conventional recruiting media. Companies are able to create their own recruitment websites and offer job recruitment information free of charge and increase their presence to job seekers by collaborating with diverse recruiting networks. With its high user friendliness, the number of user companies are increasing every year, and the scale of service is already the same level as the number of full-time job openings offered by Hello Work. Going forward, we will aim to increase job opportunities by enhancing promotional investments to acquire job seekers and provide optimal job recruitment information to them through utilization of technologies such as AI. The “human resources platform” will provide attractive job recruitment information targeting high-class staff, such as specialists and those in managerial positions, where an increase in hiring demand is expected. By doing so, we will aim to realize appropriate labor mobility to positions with significant social impact and growth industries. Based on such, the Company has formulated a medium-term plan with the fiscal year ending March 31, 2027, set as the final year. Consolidated net sales of ¥120,000 million and consolidated operating income of ¥24,000 million will be pursued for the final year. (Outlook for the Next Fiscal Year) The estimated financial results for the fiscal year ending March 31, 2023, include net sales of ¥62,000 million (up 13.7% year on year), operating income of ¥3,085 million (down 68.0% year on year), ordinary income of ¥3,086 million (down 69.6% year on year), and profit attributable to owners of parent of ¥2,118 million (down 68.0% year on year). As the said fiscal year is regarded as a period of front-loaded investment under the medium-term plan, a significant decrease in profit is expected from an increase in advertising expenses for “engage” and “human resource platform,” which are businesses put to focus. From the perspective of medium to long-term profit growth, the Company’s basic policy is to make strategic investments, such as M&A, while making appropriate investments according to business stage. In addition to such, a basic policy of “50% dividend payout ratio” is set forth as return of profits to shareholders is regarded as an important measure. In accordance with the above policy, for dividends to be paid for the fiscal year ending March 31, 2022, the Company plans to pay a dividend of ¥70.10 per share with a dividend payout ratio of 50%. * The dividend payout ratio is calculated based on profit attributable to owners of parent. * Net income per share used in the calculation of the dividend payout ratio is derived by dividing the profit attributable to owners of parent by the number of shares excluding treasury shares. These treasury shares include the portion of Japan Employee Stock Ownership Plans (J-ESOP). Since dividends are also actually paid with respect to the shares under J-ESOP, this factor is taken into account for the payout ratio set by the Company. (5) Material Events Relating to the Going Concern Assumption The Company had no material items to report. 2. Basic Approach to the Selection of Accounting Standards It is the en Japan Group’s policy, for the foreseeable future, to continue preparing its consolidated financial statements based on the Japanese accounting standard to secure the comparability of financial data over different periods and among different companies. Concerning the adoption of International Financial Reporting Standards (IFRS), the Group will be taking appropriate measures in consideration of the domestic and international situation. -8- 3. Consolidated Financial Statements and Key Notes (1) Consolidated Balance Sheets (Million yen) Prior Fiscal Year (As of March 31, 2021) Current Fiscal Year (As of March 31, 2022) Assets Current assets Cash and deposits Notes and accounts receivable – trade, and contract assets Notes and accounts receivable-trade Securities Work in process Supplies Other Allowance for doubtful accounts Total current assets Non-current assets Property, plant and equipment Buildings Accumulated depreciation Buildings, net Vehicles Accumulated depreciation Vehicles, net Furniture and fixtures Accumulated depreciation Furniture and fixtures, net Leased assets Accumulated depreciation Leased assets, net Construction in progress Total property, plant and equipment Intangible assets Software Goodwill Other Total intangible assets Investments and other assets Investment securities Long-term loans receivable Deferred tax assets Shares of subsidiaries and associates Other Allowance for doubtful accounts Total investments and other assets Total non-current assets Total assets -9- 26,374 － 4,347 2,031 0 16 1,062 -108 33,724 639 -461 178 36 -18 18 1,002 -814 188 447 -222 225 10 621 3,531 2,840 626 6,999 2,285 874 868 132 1,497 -359 5,299 12,920 46,644 33,849 5,466 － 2,000 5 14 1,042 -76 42,301 646 -412 233 41 -25 16 1,095 -911 184 564 -370 193 7 634 3,691 2,342 853 6,888 2,752 878 876 680 1,572 -367 6,392 13,914 56,215 Liabilities Current liabilities Accounts payable-trade Lease obligations Accounts payable-other Income taxes payable Provision for bonuses Provision for directors’ bonuses Advances received Other Total current liabilities Non-current liabilities Lease obligations Deferred tax liabilities Provision for share benefits Asset retirement obligations Long-term accounts payable-other Other Total non-current liabilities Total liabilities Net assets Shareholders’ equity Capital stock Capital surplus Retained earnings Treasury shares Total shareholders’ equity Accumulated other comprehensive income Valuation difference on available-for-sale securities Foreign currency translation adjustment Total accumulated other comprehensive income Subscription rights to shares Non-controlling interests Total net assets Total liabilities and net assets (Million yen) Prior Fiscal Year (As of March 31, 2021) Current Fiscal Year (As of March 31, 2022) 434 86 2,369 955 1,122 2 2,307 982 8,260 164 126 389 203 642 1 1,527 9,788 1,194 998 39,399 -5,228 36,365 113 -167 -53 136 408 36,856 46,644 1,063 134 4,459 1,189 1,088 27 3,785 1,752 13,501 87 108 424 206 726 － 1,553 15,054 1,194 902 43,147 -5,068 40,176 102 324 426 124 432 41,160 56,215 -10- (2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income Consolidated Statements of Income Prior Fiscal Year (From April 1, 2020 to March 31, 2021) Current Fiscal Year (From April 1, 2021 to March 31, 2022) (Million yen) Net sales Cost of sales Gross profit Selling, general and administrative expenses Advertising expenses Provision for bonuses for directors (and other officers) Salaries and allowances Bonuses Provision for bonuses Commission expenses Other Total selling, general and administrative expenses Operating income Non-operating income Interest income Dividends income Gain on investments in partnership Foreign exchange gains Reversal of allowance for doubtful accounts Subsidies for employment adjustment Miscellaneous income Total non-operating income Non-operating expenses Interest expenses Foreign exchange losses Provision of allowance for doubtful accounts Miscellaneous loss Total non-operating expenses Ordinary income Extraordinary income Gain on sales of non-current assets Gain on sale of investment securities Gain on sales of shares of subsidiaries and associates Total extraordinary income Extraordinary losses Loss on sale of non-current assets Loss on retirement of non-current assets Loss on sale of investment securities Loss on valuation of investment securities Loss on sales of shares of subsidiaries and associates Loss on valuation of shares of subsidiaries and associates Impairment loss Other Total extraordinary losses Income 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 -11- 42,725 8,566 34,159 5,468 － 8,521 1,554 1,068 982 8,791 26,387 7,771 103 10 32 － － 50 58 256 0 5 56 26 88 7,939 2 － 19 22 － 142 － 1,390 15 16 572 9 2,147 5,813 2,341 -80 2,261 3,552 50 3,502 54,544 11,501 43,043 10,843 27 8,164 1,707 1,060 3,617 7,988 33,409 9,633 106 30 282 73 0 － 46 539 5 － 4 24 34 10,138 0 186 － 186 0 16 3 42 8 － 278 － 348 9,976 2,811 464 3,275 6,701 73 6,628 Consolidated Statements of Comprehensive Income Profit Other comprehensive income Valuation difference on available-for-sale securities Foreign currency translation adjustment Total other comprehensive income Comprehensive income Comprehensive income attributable to Comprehensive income attributable to owners of parent Comprehensive income attributable to non-controlling interests (Million yen) Prior Fiscal Year (From April 1, 2020 to March 31, 2021) Current Fiscal Year (From April 1, 2021 to March 31, 2022) 3,552 120 -315 -194 3,357 3,328 29 6,701 -10 551 540 7,242 7,108 133 -12- (3) Consolidated Statements of Changes in Net Assets Prior fiscal year (from April 1, 2020 to March 31, 2021) Shareholders’ equity Capital stock Capital surplus Retained earnings Treasury shares Total shareholders’ equity (Million yen) Subscription rights to shares Non-controlling interests Total net assets Accumulated other comprehensive income Total accumulated other comprehensive income Foreign currency translation adjustment Valuation difference on available-for-sale securities 1,194 1,133 39,588 -4,253 37,663 -7 126 119 154 710 38,648 Balance at beginning of current period Cumulative effects of changes in accounting policies Restated balance Changes of items during the period Dividends of surplus Profit attributable to owners of parent Purchase of treasury shares Disposal of treasury shares Change in scope of consolidation Change in ownership interest of parent due to transactions with non-controlling interests Change of share exchanges Net changes of items other than shareholders’ equity Total changes of items during period Balance at end of current period 1,194 1,133 39,588 -4,253 37,663 -7 126 119 154 710 38,648 -3,565 3,502 -1,000 -1,000 1 25 46 -126 -182 － -3,565 3,502 26 -79 -182 － － － -3,565 3,502 -1,000 26 -79 -182 － 120 -294 -173 -17 -301 -493 － 1,194 998 -134 -189 -975 -1,298 120 -294 -173 -17 -301 -1,792 39,399 -5,228 36,365 113 -167 -53 136 408 36,856 -13- Current fiscal year (from April 1, 2021 to March 31, 2022) Shareholders’ equity Capital stock Capital surplus Retained earnings Treasury shares Total shareholders’ equity (Million yen) Subscription rights to shares Non-controlling interests Total net assets Accumulated other comprehensive income Total accumulated other comprehensive income Foreign currency translation adjustment Valuation difference on available-for-sale securities 1,194 998 39,399 -5,228 36,365 113 -167 -53 136 408 36,856 Balance at beginning of current period Cumulative effects of changes in accounting policies Restated balance Changes of items during the period Dividends of surplus Profit attributable to owners of parent Purchase of treasury shares Disposal of treasury shares Change in scope of consolidation Change in ownership interest of parent due to transactions with non-controlling interests Change of share exchanges Net changes of items other than shareholders’ equity Total changes of items during period Balance at end of current period 1,194 998 38,301 -5,228 35,266 113 -167 -53 136 408 35,758 -1,098 -1,098 -1,750 6,628 -9 10 -31 -0 49 -1,750 6,628 -0 40 -21 － 12 － -97 109 -1,098 -1,750 6,628 -0 40 -21 － 12 -10 491 480 -11 24 492 － 1,194 902 -96 4,846 159 4,909 -10 491 480 -11 24 5,402 43,147 -5,068 40,176 102 324 426 124 432 41,160 -14- (4) Consolidated Statements of Cash Flows (Million yen) Prior Fiscal Year (From April 1, 2020 to March 31, 2021) Current Fiscal Year (From April 1, 2021 to March 31, 2022) Cash flows from operating activities Income before income taxes Depreciation Amortization of goodwill Impairment loss Bad debts expenses Increase (decrease) in allowance for doubtful accounts Increase (decrease) in provision for bonuses Increase (decrease) in provision for directors’ bonuses Interest and dividend income Subsidies for employment adjustment Interest expenses Foreign exchange losses (gains) Loss (gain) on investments in partnership Loss (gain) on valuation of investment securities Loss (gain) on sale of investment securities Loss (gain) on valuation of shares of subsidiaries and associates Loss (gain) on sales of shares of subsidiaries and associates Loss (gain) on sale of non-current assets Loss on retirement of non-current assets Decrease (increase) in notes and accounts receivable-trade Increase (decrease) in notes and accounts payable-trade Increase (decrease) in accounts payable-other Increase (decrease) in advances received Other Subtotal Interest expenses paid Interest and dividend income received Subsidies for employment adjustment received Income taxes paid Income taxes refund Net cash provided by (used in) operating activities 5,813 1,678 452 572 23 13 -65 -0 -114 -50 0 5 -32 1,390 － 16 -4 -2 142 1,232 -24 -1,615 -283 -556 8,592 -1 106 50 -3,134 39 5,652 9,976 1,678 376 278 36 -27 -24 26 -137 － 5 -20 -282 42 -182 － 3 -0 16 -1,900 645 2,038 1,422 -131 13,838 -3 104 － -2,604 118 11,453 -15- Cash flows from investing activities Payments into time deposits Proceeds from withdrawal of time deposits Purchase of property, plant and equipment Proceeds from sales of property, plant and equipment Purchase of intangible assets Purchase of investment securities Proceeds from sales and redemption of investment securities Purchase of shares of subsidiaries and associates Proceeds from sales of shares of subsidiaries and associates Proceeds from sale of businesses Payments for sales of shares of subsidiaries resulting in change in scope of consolidation Payments for lease and guarantee deposits Proceeds from collection of lease and guarantee deposits Purchase of insurance funds Payments of loans receivable Other proceeds Net cash provided by (used in) investing activities Cash flows from financing activities Purchase of treasury shares Repayments of long-term loans payable Cash dividends paid Dividends paid to non-controlling interests Repayments of lease obligations Payments from changes in ownership interests in subsidiaries that do not result in change in scope of consolidation Other proceeds 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 (decrease) in cash and cash equivalents resulting from change in scope of consolidation Cash and cash equivalents at end of period (Million yen) Prior Fiscal Year (From April 1, 2020 to March 31, 2021) Current Fiscal Year (From April 1, 2021 to March 31, 2022) -511 299 -169 5 -1,649 -517 5 － 20 55 -16 -5 318 -1 -0 16 -2,150 -1,000 -2 -3,564 -69 -0 -346 0 -4,983 -138 -1,620 28,766 -310 26,835 -1,395 783 -106 9 -1,869 -448 390 -666 － － － -13 124 -15 － 119 -3,086 -0 － -1,751 -61 － － 0 -1,813 127 6,681 26,835 -127 33,389 -16- (5) Notes to the Consolidated Financial Statements (Notes Relating to the Going Concern Assumption) The Company had no material items to report. (Basis of Preparing the Consolidated Financial Statements) 1. Scope of Consolidation (1) Number of consolidated subsidiaries: 13 Name of company: en world Japan K. K. en-Asia Holdings Ltd. Navigos Group, Ltd. Navigos Group Vietnam Joint Stock Company Nhan Luc Viet Development&Education Company Limited New Era India Consultancy Pvt. Ltd. Future Focus Infotech Pvt. Ltd. Future Focus Infotech FZE Focus America INC Talent Alliance (Beijing) Technology Development Limited Zeku, Ltd. OWLS, INC. Brocante Inc. The previous consolidated subsidiaries, en world Recruitment (Thailand) Co., Ltd. and en Holdings (Thailand) Ltd., have been excluded from the scope of consolidation effective the fiscal year under review because they have less of an impact on the consolidated financial statements. (2) Names of major unconsolidated subsidiaries: Insight Tech Ltd. and six other companies (Reason for exclusion from consolidation) Unconsolidated subsidiaries are excluded from the scope of consolidation since their total assets, net sales, profit (amount proportional to the equity share), and retained earnings (amount proportional to the equity share), etc., have no material impact on the consolidated financial statements. 2. Application of the Equity Method (1) Number of unconsolidated subsidiaries accounted for by the equity method: – (2) Names of the unconsolidated subsidiaries and affiliates that are not accounted for by the equity method Insight Tech Ltd. and seven other companies (Reason for not applying the equity method) Unconsolidated subsidiaries and affiliates that are not accounted for by the equity method are excluded from the scope of application of the equity method since both of their profit (amount proportional to the equity share) and retained earnings (amount proportional to the equity share), etc., have no material impact on the consolidated financial statements, and they are also immaterial on the whole. -17- 3. Fiscal Year, etc., of Consolidated Subsidiaries Consolidated subsidiaries whose term end differs from the consolidated term end are as follows: Consolidated subsidiaries Navigos Group, Ltd. Navigos Group Vietnam Joint Stock Company Talent Alliance (Beijing) Technology Development Limited Brocante Inc. Nhan Luc Viet Development&Education Company Limited Closing date December 31 December 31 December 31 September 30 December 31 Note 1 Note 1 Note 1 Note 2 Note 1 Note 1 The Group adopts provisional financial statements for the term end of consolidated subsidiaries in preparing the consolidated financial statements. However, those necessary adjustments to consolidation are made to reflect material transactions conducted between this date and the consolidated term end. Note 2 The Group adopts pro forma financial statements as of December 31 in preparing the consolidated financial statements. However, those necessary adjustments to consolidation are made to reflect material transactions conducted between this date and the consolidated term end. 4. Summary of Significant Accounting Policies (1) Valuation basis and method for important assets 1) Securities a. Held-to-maturity securities Carried at amortized cost (straight-line method) b. Available-for-sale securities Available-for-sale securities other than shares, etc., without market prices Valued at market as of the balance sheet date. Unrealized gain or loss is included directly in net assets. The cost of securities sold is determined by the moving-average method. Available-for-sale securities that are shares, etc., without market prices Valued at cost determined by the moving-average method The Company accounts for investments in investment limited partnerships and similar associations (investments deemed to be negotiable securities under Article 2, Paragraph 2, of the Financial Instruments and Exchange Act) by booking a net amount equivalent to the equity method value, based on the most recent closing statement that can be obtained in accordance with the account reporting date provided for in the partnership agreement. 2) Inventories a. Work in process b. Supplies Specific identification method (amount reported on the balance sheet is stated by writing down based on decrease in profitability) Most recent purchase cost method (amount reported on the balance sheet is stated by writing down based on decrease in profitability) -18- (2) Depreciation method for major depreciable assets 1) Property, plant and equipment (excluding lease assets) The depreciation of property, plant and equipment at the Company and its consolidated subsidiaries is computed by the declining-balance method using the applicable rates based on the estimated useful lives of the assets. However, the straight-line method is used to depreciate buildings (excluding accompanying facilities). The range of useful lives is as follows: 8–25 years Buildings Furniture and fixtures2–20 years For assets acquired on or before March 31, 2007, the remaining book values are equally depreciated on a straight-line basis over five years, starting from the year following the year during which depreciation to the residual values was completed up to the maximum depreciable amounts. 2) Intangible assets (excluding lease assets) The amortization of intangible assets at the Company and its consolidated subsidiary is computed by the straight-line method. Computer software for internal use is amortized over the estimated useful life (5 years) depending on the nature of the respective software products. 3) Lease assets Lease assets related to the finance lease transactions other than those where the ownership of the lease assets is deemed to be transferred These lease assets are amortized by the straight-line method, assuming that the lease period is the useful life and there is no residual value. (3) Accounting for important reserves 1) Allowance for doubtful accounts The allowance for doubtful accounts is provided for possible bad debt of claims at an amount of possible losses from uncollectible receivables based on the actual loan loss ratio from bad debt for ordinary receivables, and on the estimated recoverability for specific doubtful receivables. 2) Provision for bonuses The provision for bonuses is provided for possible payment of bonuses to employees at an amount to be borne based on the amount estimated to be paid for the fiscal year under review. 3) Provision for directors’ bonuses The provision for bonuses is provided for possible payment of bonuses to directors at an amount based on the amount estimated to be paid and which corresponds to the fiscal year under review. 4) Provision for share benefits A provision for share benefits is provided for possible delivery of stock to employees in accordance with the stock delivery regulation at an amount based on the estimated amount of stock benefits obligation at the end of the fiscal year under review. -19- (4) Accounting standard for significant revenues and expenses Details of main performance obligations of major businesses relating to revenue from contracts with customers of the en Japan Group, and the normal point in time at which such performance obligations are satisfied (the normal point in time at which revenue is recognized) are as follows: 1) Domestic Job Board The domestic job board receives advertising fees from customers by providing advertising services to the Group-operating job board. Target customers are those who have demand for hiring full-time and temporary staff. As the advertising service on the job board is a service offered throughout the contract period, based on the judgement that performance obligations will be satisfied in accordance with the elapse of time, revenue is recognized on a pro rata basis over such contract period. 2) Domestic Permanent Recruitment The domestic permanent recruitment receives recruitment fees from customers by providing permanent recruitment services that introduce workers wishing to change jobs to customers who have demand for hiring mid-career employees. As the permanent recruitment to customers is a success fee-based service offered to conclude employment in a company for workers wishing to change jobs, and based on the judgment that performance obligations will be satisfied when workers join the company, revenue is recognized. 3) Overseas The overseas business operates job boards, provides permanent recruitment services, and temporary staffing services mainly in Shanghai, Vietnam and India. The temporary staffing service receives staffing fees from customers by staffing personnel to customers who have demand for personnel such as specialists. As staffing service is a service offering a contract-based work force, based on the judgement that performance obligations will be satisfied in accordance with the work force provided by temporary staff workers, revenue is recognized according to the actual work performed in the staffing period. Details of the main performance obligations related to the operation of job boards and provision of permanent recruitment services is the same as the domestic businesses described in 1) and 2). 4) HR-Tech HR-Tech receives user fees from customers mainly through their use of recruitment support tools that are accompanied when services for generally creating and posting their own recruitment websites are offered free of charge. As the use of recruitment support tools is billed in line with the number applied through the own recruitment websites posted free of charge under contracts, based on the judgement that performance obligations will be satisfied at the time of application, revenue is recognized when applied. (5) Method and period of amortization of goodwill The amount of goodwill and negative goodwill is equally amortized over the estimated years during which the effects are estimated to emerge. (6) Scope of cash and cash equivalents in the consolidated statements of cash flows Cash and cash equivalents in the consolidated statements of cash flows include cash on hand, demand deposits, and short-term investments due within three months from the date of acquisition that are easily convertible into cash with little or no risk from fluctuation in value. (Changes in Accounting Policies) (Application of Accounting Standard for Revenue Recognition, etc.) “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020; hereinafter “Revenue Recognition Accounting Standard”) and related guidelines have been adopted from the beginning of the fiscal year under review. In line with this adoption, revenue is recognized at the time control of promised goods or services is transferred to the customer in the amount they are expected to receive in exchange for those goods or services. Accordingly, the total amount of consideration received from customers in the Group’s job advertising business, previously recognized as revenue at one point of time, has been changed to a way of recognizing revenue over a certain period of time as performance obligations is satisfied. Furthermore, transactions such as posting of job advertisements through an agency, previously recognized as revenue in net amount, has been changed to a way of recognizing revenue in total amount, if the Group corresponds to the -20- agent itself. The application of the Revenue Recognition Accounting Standard and related guidelines is subject to the transitional treatment provided for in the proviso to paragraph 84 of the Revenue Recognition Accounting Standard. The cumulative effect from the retrospective application of the new accounting policy to periods prior to the beginning of the fiscal year under review has been added to or deducted from the opening balance of retained earnings of the fiscal year under review, so as to apply the new accounting policy from the balance at the beginning of the said period. As a result, in the consolidated statements of income for the fiscal year under review, net sales increased by ¥2,046 million, selling, general and administrative expenses increased by ¥2,543 million, while operating income, ordinary income and income before income taxes decreased by ¥496 million, respectively. The balance of retained earnings at the beginning of the period decreased by ¥1,098 million. In accordance with the transitional treatment provided for in paragraph 89-3 of the Revenue Recognition Accounting Standard, notes related to revenue recognition for the previous fiscal year are not included. (Application of Accounting Standard for Fair Value Measurement, etc.) “Accounting Standard for Fair Value Measurement” (ASBJ Statement No. 30, July 4, 2019; hereinafter “Fair Value Measurement Standard”) and other standards have been adopted from the beginning of the fiscal year under review. In accordance with the transitional treatment provided for in paragraph 19 of the Fair Value Measurement Standard and paragraph 44-2 of “Accounting Standard for Financial Instruments” (ASBJ Statement No. 10, July 4, 2019), the Company will continue to apply the new accounting policies prescribed by the Fair Value Measurement Standard and other standards. There are no impacts on the consolidated financial statements. (Change in Presentation Method) (Consolidated Balance Sheets) “Notes and accounts receivable-trade,” which were presented under “current assets” in the consolidated balance sheets for the previous fiscal year, is included in “notes and accounts receivable-trade, and contract assets” from the fiscal year under review. However, in accordance with the transitional treatment provided for in paragraph 89-2 of the Revenue Recognition Accounting Standard, no reclassification has been made for the previous fiscal year by the new presentation method. (Consolidated Statements of Income) “Commission expenses” included in “other” under “selling, general and administrative expenses” in the previous fiscal year is presented as an independent item from the fiscal year under review as it has exceeded 10/100 of the total amount of selling, general and administrative expenses. To reflect the way this presentation is changed, the consolidated financial statements for the previous fiscal year have been reclassified. As a result, “other” of ¥9,774 million included under “selling, general and administrative expenses” in the consolidated statements of income for the previous fiscal year has been reclassified into “commissions expenses” of ¥982 million and “other” of ¥8,791 million. In addition, as “interest expenses” included in “miscellaneous loss” under “non-operating expenses” is presented as an independent item from the fiscal year under review as it has exceeded 10/100 of the total amount of non-operating expenses. To reflect the way this presentation is changed, the consolidated financial statements for the previous fiscal year have been reclassified. As a result, “miscellaneous loss” of ¥26 million included under “non-operating expenses” has been reclassified into “interest expenses” of ¥0 million and “miscellaneous loss” of ¥26 million in the consolidated statements of income for the previous fiscal year. -21- (Consolidated Balance Sheets) *1 Amount of receivables from contracts with customers in notes and accounts receivable – trade, and contract assets respectively was as follows. Notes receivable-trade Accounts receivable-trade Contract assets Contract liabilities Current Fiscal Year (As of March 31, 2022) 0 million yen 5,438 million yen 28 million yen Current Fiscal Year (As of March 31, 2022) 3,785 million yen *2 Amount of contract liabilities in advances received was as follows. *3 Overdraft Facility Agreement The Company has concluded an overdraft facility agreement and a committed credit line agreement with one of its primary financing banks. The unused balance at the end of the fiscal year under review was as follows. Prior Fiscal Year (As of March 31, 2021) Current Fiscal Year (As of March 31, 2022) 6,000 million yen – million yen 6,000 million yen 6,000 million yen – million yen 6,000 million yen Limit of overdraft line and total of committed credit line Outstanding borrowings Balance (Consolidated Statements of Income) *1 Gain on sales of non-current assets was as follows. Prior Fiscal Year (From April 1, 2020 to March 31, 2021) Current Fiscal Year (From April 1, 2021 to March 31, 2022) Furniture and fixtures Vehicles Total 1 million yen 0 million yen 2 million yen – million yen 0 million yen 0 million yen *2 Loss on sale of non-current assets was as follows. Prior Fiscal Year (From April 1, 2020 to March 31, 2021) Current Fiscal Year (From April 1, 2021 to March 31, 2022) Furniture and fixtures Total – million yen – million yen 0 million yen 0 million yen *3 Loss on retirement of non-current assets was as follows. Prior Fiscal Year (From April 1, 2020 to March 31, 2021) Current Fiscal Year (From April 1, 2021 to March 31, 2022) Buildings Software Furniture and fixtures Software in progress Total 15 million yen 1 million yen 0 million yen – million yen 16 million yen 7 million yen 25 million yen 92 million yen 17 million yen 142 million yen -22- *4 Impairment loss is as follows. Prior fiscal year (from April 1, 2020 to March 31, 2021) The Group recorded an impairment loss for the following asset group. (1) Outline of asset groups for which impairment loss was recognized Type Purpose of use Location Buildings Furniture and fixtures Common assets Shinjuku-ku, Tokyo Construction in progress Assets for business Chennai City, Republic of India Amount of impairment loss 167 million yen 3 million yen 52 million yen 24 million yen 89 million yen Assets for business Ho Chi Minh City, Socialist Republic of Vietnam Software Goodwill Goodwill Other Other Chiyoda-ku, Tokyo 235 million yen (2) Reason for recognizing impairment loss The Group groups assets for business and others based on categories of managerial accounting in which earnings and expenses are ascertained on an ongoing basis. With regard to common assets, the Company reduced the book value of non-current assets to the recoverable amount and recorded the amount of the reduction as an impairment loss under extraordinary losses because the Company no longer expects their book value to be recoverable due to the decision to close some offices, as well as other reasons. With regard to business assets in India, the Company reduced the book value of non-current assets to the recoverable amount and recorded the amount of the reduction as an impairment loss under extraordinary losses because the Company no longer expects their book value to be recoverable due to a change in their usage. With regard to business assets in Vietnam, the Company reduced the book value to the recoverable amount and recorded the amount of the reduction as an impairment loss under extraordinary losses because the Company no longer expects them to generate the revenue that was initially expected of them. The unamortized balance of goodwill was recorded as an impairment loss under extraordinary losses because the Company no longer expects it to generate the revenue that was expected of it at the time of acquisition. All recoverable amounts are calculated based on the value in use, and are recognized as zero. Current fiscal year (from April 1, 2021 to March 31, 2022) The Group recorded an impairment loss for the following asset group. (1) Outline of asset group for which impairment loss was recognized Type Purpose of use Location Amount of impairment loss Goodwill Other Shinjuku-ku, Tokyo 278 million yen (2) Reason for recognizing impairment loss The Group groups assets for business and others based on categories of managerial accounting in which earnings and expenses are ascertained on an ongoing basis. The unamortized balance of goodwill was recorded as an impairment loss under extraordinary losses because the Company no longer expects it to generate the revenue that was expected of it at the time of acquisition. The recoverable amount is calculated based on the value in use, and is recognized as zero. -23- (Consolidated Statements of Comprehensive Income) * Adjustments and Taxes in Other Comprehensive Income Valuation difference on available-for-sale securities Amount incurred during the term Recycling amount Amount before tax adjustment Taxes Valuation difference on available-for-sale securities Foreign currency translation adjustment Amount incurred during the term Total other comprehensive income (Consolidated Statements of Cash Flows) Consolidated Balance Sheets Prior Fiscal Year (From April 1, 2020 to March 31, 2021) Current Fiscal Year (From April 1, 2021 to March 31, 2022) 174 million yen -0 million yen 173 million yen -53 million yen 120 million yen -315 million yen -194 million yen 137 million yen -152 million yen -15 million yen 4 million yen -10 million yen 551 million yen 540 million yen *1 Relationship between Cash and Cash Equivalents at End of Period and the Line Item Amounts Stated on the Prior Fiscal Year (From April 1, 2020 to March 31, 2021) Current Fiscal Year (From April 1, 2021 to March 31, 2022) Cash and deposits 26,374 million yen 33,849 million yen Balance of items corresponding to cash equivalents in the securities account Time deposits deposited for a period of more than three months 2,031 million yen 2,000 million yen -1,570 million yen -2,459 million yen Cash and cash equivalents 26,835 million yen 33,389 million yen (Segment Information, etc.) (Segment Information) I Prior fiscal year (from April 1, 2020 to March 31, 2021) Description is omitted since the en Japan Group is formed under a single segment. II Current fiscal year (from April 1, 2021 to March 31, 2022) Description is omitted since the en Japan Group is formed under a single segment. -24- 2. 3. 2. 3. (Related Information) Prior fiscal year (from April 1, 2020 to March 31, 2021) 1. Information by Product and Service Description is omitted since the en Japan Group is formed under a single segment. Information by Region (1) Net Sales (2) Property, plant and equipment Japan 34,679 Japan 255 Asia 8,046 (Million yen) Total 42,725 Vietnam 300 Asia 65 (Million yen) Total 621 Information by Major Clients Presentation is omitted as there are no net sales for outside clients that account for 10% or more of the net sales recorded in the consolidated statements of income. Current fiscal year (from April 1, 2021 to March 31, 2022) 1. Information by Product and Service Description is omitted since the en Japan Group is formed under a single segment. Information by Region (1) Net Sales Japan Asia 43,551 10,993 (Million yen) Total 54,544 (2) Property, plant and equipment Japan Vietnam Asia 327 236 70 (Million yen) Total 634 Information by Major Clients Presentation is omitted as there are no net sales for outside clients that account for 10% or more of the net sales recorded in the consolidated statements of income. (Information on Impairment Losses of Property, Plant and Equipment by Reportable Segment) Prior fiscal year (from April 1, 2020 to March 31, 2021) Description is omitted since the en Japan Group is formed under a single segment. Current fiscal year (from April 1, 2021 to March 31, 2022) Description is omitted since the en Japan Group is formed under a single segment. (Information on Amortization of Goodwill and Unamortized Balance by Reportable Segment) Description is omitted since the en Japan Group is formed under a single segment. (Information on Gain on Negative Goodwill by Reportable Segment) The Company had no material items to report. -25- (Per-Share Information) Net Assets per Share EPS Fully Diluted EPS Prior Fiscal Year (From April 1, 2020 to March 31, 2021) Current Fiscal Year (From April 1, 2021 to March 31, 2022) 810.66 yen 78.19 yen 77.96 yen 903.89 yen 147.71 yen 147.38 yen (Notes) 1. Shares of the Company remaining in trust that are posted as treasury shares under shareholders’ equity are included in the number of treasury shares deducted when calculating the average number of shares during the period for the sake of calculating EPS. They are also included in the number of treasury shares deducted from the total number of shares issued as of the end of the period for the sake of calculating net assets per share. In calculating EPS, the average number during the period of the treasury shares deducted was 2,391,708 in the fiscal year ended March 31, 2021 and 2,364,732 for the fiscal year ended March 31, 2022. In addition, in calculating net assets per share, the number of shares at the end of the period of the treasury shares deducted was 2,384,400 in the fiscal year ended March 31, 2021 and 2,347,500 in the fiscal year ended March