ラクーンホールディングス（3031） – Summary of Financial Results (Consolidated) For the Fiscal Year Ended April 30, 2022 (Japanese GAAP)

Summary of Financial Results (Consolidated) For the Fiscal Year Ended April 30, 2022 (Japanese GAAP) Satoshi Konno, Executive Vice President of Finance and Director Tel. +81-3-5652-1711 Listed company: Raccoon Holdings, Inc. 3031 Code: Representative: Isao Ogata, President and Representative Director Contact: Scheduled date of ordinary general meeting of shareholders: July 23, 2022 Scheduled date of commencement of dividend payment: July 25, 2022 Scheduled date of submission of annual securities report: July 28, 2022 Supplementary documents for financial results: Yes Financial results briefing: Yes (for institutional investors and securities analysts) Stock Exchange: Tokyo Stock Exchange URL: http://www.raccoon.ne.jp/ June 10, 2022 1. Consolidated results for the fiscal year ended April 30, 2022 (May 1, 2021 through April 30, 2022) (1) Consolidated operating results (The percentages are year-on-year changes) (Rounded down to the nearest million yen) Net sales EBITDA Operating income Ordinary income Year ended April 30, 2022 Year ended April 30, 2021 Million yen 1,268 1,339 (Note) Comprehensive income Year ended April 30, 2022 Year ended April 30, 2021 Million yen 4,789 4,364 9.7 25.5 % % % Million yen 1,126 1,196 (5.3) 57.8 (5.9) 69.4 ¥354 million ((55.7)%) ¥800 million (77.6%) Net income attributable to owners of parent Million yen 354 800 (55.7) 77.6 % Million yen 1,135 1,216 % (6.7) 71.8 Net income per share Net income per share (diluted) Return on equity Year ended April 30, 2022 Year ended April 30, 2021 Yen 15.97 36.78 Yen 15.90 36.19 (Reference) Equity in earnings of affiliates Year ended April 30, 2022 ¥– million Year ended April 30, 2021 ¥– million Ordinary income to total assets ratio % 8.6 9.3 Operating income to net sales ratio % 23.5 27.4 % 6.7 17.2 (2) Consolidated financial position As of April 30, 2022 As of April 30, 2021 (Reference) Shareholders’ equity (3) Consolidated cash flows As of April 30, 2022 As of April 30, 2021 2. Dividends Fiscal year ended April 30, 2021 Fiscal year ended April 30, 2022 Fiscal year ending April 30, 2023 (forecast) Total assets Net assets Equity ratio Net assets per share Million yen 14,060 12,452 As of April 30, 2022 As of April 30, 2021 Million yen 5,364 5,342 ¥5,289 million ¥5,310 million % 37.6 42.6 Yen 238.12 239.23 Operating activities Investing activities Financing activities Cash and cash equivalents at end of year Million yen 1,856 184 Million yen (197) (43) Million yen (1,128) (1,972) Million yen 5,333 4,802 End of Q1 End of Q2 End of Q3 Year end Annual Dividend per share Total amount of dividends Payout ratio (consolidated) Dividend on equity ratio (consolidated) Yen – – – Yen 8.00 10.00 9.00 Yen – – – Yen 9.00 10.00 9.00 Yen 17.00 20.00 18.00 Million yen 380 447 % 46.2 125.2 49.0 % 7.8 8.4 3. Forecast of consolidated results for the fiscal year ending April 30, 2023 (May 1, 2022 through April 30, 2023) Net sales EBITDA Operating income Ordinary income Million yen % % Million yen % Million yen (The percentages are year-on-year changes) Net income attributable to owners of parent % Million yen Net income per share % Yen – 36.76 – 14.3 – – 1,300 15.4 – – 1,300 14.5 – – 810 128.4 First half Full year Million yen – 1,450 – – 5,500 14.8 – 1 – * Notes (1) Important changes in subsidiaries during the fiscal year (changes in specified subsidiaries resulting in change in the scope of consolidation): None (2) Changes in accounting principles and changes or restatements of accounting estimates (i) Changes in accounting policies associated with revisions to accounting standards, etc.: Yes (ii) Changes in accounting policies other than those specified in (i): None (iii) Changes in accounting estimates: None (iv) Restatement: None (3) Number of issued shares (common shares) (i) Number of issued shares (including treasury stock) at the end of the fiscal year (ii) Number of treasury stock shares at the end of the fiscal year April 30, 2022 April 30, 2022 22,361,043 April 30, 2021 147,616 April 30, 2021 22,361,043 163,668 21,778,030 (iii) Average number of issued shares during the fiscal year Year ended April 30, 2022 22,211,025 Year ended April 30, 2021 *This financial summary is not subject to audit procedures by a certified public accountant or audit corporation. * Explanation about the proper use of results forecasts, and other special notes (Cautionary note on forward-looking statements) The forward-looking statements, including results forecasts, contained in this document are based on information the Company has obtained as of today and certain assumptions the Company considers reasonable. The Company does not guarantee its achievement of the forward-looking statements. Actual results may differ significantly depending on a variety of factors. For the assumptions underlying the results forecasts and notes on their use, please refer to “1. Overview of Operating Results, etc., (4) Future prospects” on page 6 of the accompanying materials. (How to obtain supplementary information for financial results and information on results briefings) Supplementary documents for the financial results will be disclosed on the TDnet (Timely Disclosure network operated by the Tokyo Stock Exchange) shortly. Additionally, the Company will hold a results briefing session for institutional investors and securities analysts via a live stream on Friday, June 10, 2022. The video of this results briefing session will be provided on the website promptly after the session is held. – 2 – ○ Contents of Accompanying Materials 1. Overview of Operating Results, etc. ……………………………………………………………………………………………………………………………………….. 4 (1) Overview of operating results for the fiscal year under review …………………………………………………………………………………………….. 4 (2) Overview of the financial status for the fiscal year under review …………………………………………………………………………………………. 5 (3) Overview of cash flows for the fiscal year under review……………………………………………………………………………………………………… 5 (4) Future prospects ………………………………………………………………………………………………………………………………………………………………. 6 2. Basic Policy on Selection of Accounting Standards …………………………………………………………………………………………………………………. 6 3. Consolidated Financial Statements and Major Notes ……………………………………………………………………………………………………………….. 7 (1) Consolidated balance sheets ……………………………………………………………………………………………………………………………………………… 7 (2) Consolidated statements of income and comprehensive income …………………………………………………………………………………………… 9 (3) Consolidated statements of changes in equity …………………………………………………………………………………………………………………… 11 (4) Consolidated statements of cash flows …………………………………………………………………………………………………………………………….. 12 (5) Notes on consolidated financial statements ………………………………………………………………………………………………………………………. 13 (Notes regarding going concern assumptions) ……………………………………………………………………………………………………………………. 13 (Changes in accounting policies) ………………………………………………………………………………………………………………………………………. 13 (Notes in the case of significant changes in amount of shareholders’ equity) ………………………………………………………………………… 13 (Segment information) …………………………………………………………………………………………………………………………………………………….. 14 (Per share information) ……………………………………………………………………………………………………………………………………………………. 17 (Significant subsequent events) ………………………………………………………………………………………………………………………………………… 18 – 3 – 1. Overview of Operating Results, etc. (1) Overview of operating results for the fiscal year under review During the fiscal year under review (May 1, 2021 through April 30, 2022), the Japanese economy saw frequent restrictions and relaxations of economic activities according to the infection status of the novel coronavirus (COVID-19). With progress in vaccinations, the economy moved toward the normalization of economic activities to relax restrictions upon taking thorough measures against infections, and started to show signs of recovery. Meanwhile, the outlook remains uncertain due mainly to surging crude oil and raw material prices, a Chinese economic slowdown caused by a zero-COVID policy and a weakening of the yen. Under such circumstances, the Raccoon Group worked to expand the infrastructure services it offers for business-to-business transactions based on the management philosophy of “making corporate activities more efficient and convenient.” During the fourth quarter under review, with a gradual decrease in cases of the Omicron variant, restrictions were eased in stages and domestic economic activities became slightly more active. In addition, as demand for the Company’s services continued on the back of the digital shift in B2B transactions, net sales of both the EC business and the Financial business increased. As a result, consolidated net sales for the fiscal year under review were 4,789,984,000 yen (up 9.7% year on year). In terms of expenditures, cost of sales increased due to an increase in the amount of guarantees provided in the Financial business resulting from a gradual relaxation of credit screening criteria in anticipation of recovery in the domestic economy. Nonetheless, screening criteria have been controlled appropriately and the ratio of cost of sales continued to be lower than levels seen before the COVID-19 pandemic. In addition, advertising expenses increased by 19.9% year on year as the Company continued efforts to enhance promotional activities, and personnel cost increased by 11.0% due to reinforcement of personnel, while other expenses decreased. As a result, selling, general and administrative expenses increased by 12.2% year on year. As a result, the Company posted EBITDA of 1,268,568,000 yen (down 5.3%), operating income of 1,126,081,000 yen (down 5.9%), and ordinary income of 1,135,109,000 yen (down 6.7%), for the fiscal year under review, all compared on a year-on-year basis. In addition, the Company recorded an impairment loss of goodwill of 147,564,000 yen as extraordinary losses, as a result of reviewing future plans at RACCOON RENT, Inc., a consolidated subsidiary providing a rent guarantee business, in light of a deterioration in the external environment caused by the prolonged COVID-19 pandemic and other factors. As a result, the Company posted net income attributable to owners of parent of 354,661,000 yen (down 55.7% year on year) for the fiscal year under review. Results by segment are as follows: (i) EC business In Super Delivery, the mainstay service in the EC business, efforts have been made to increase both new membership and gross merchandise value* through improvement in average sale per customer. In the fiscal year under review, the Company strengthened promotional activities aimed at enhancing awareness and increasing the number of customer acquisitions to actively capitalize on the growth in demand on the back of the digital shift of B2B transactions. As a result, as of the end of the fiscal year under review, the number of Super Delivery members stood at 278,219 (up 58,108), the number of participating companies at 3,171 (up 538), and the number of items displayed at 1,431,200 (down 26,709), all compared with the numbers at the end of the previous fiscal year. During the fourth quarter under review, with a gradual decrease in cases of the Omicron variant in Japan, restrictions were eased in stages and the number of buying customers steadily increased, causing a steady increase in the national gross merchandise across Japan. Since the gross merchandise value significantly increased owing to products of special demand in relation to COVID-19 in the fiscal year ended April 30, 2021, the gross merchandise value in Japan for the fiscal year ended April 30, 2022 increased only 1.5% year on year, showing a low level of growth. However, the gross merchandise value of ordinary products in Japan excluding transactions in masks and sterilization goods, which are products of special demand, increased by 8.2% year on year. As for the gross merchandise value overseas, both the number of buying customers and average sales per customer increased despite an increase in negative factors such as shipping costs that remained high, delays in delivery due to container shortages, and a deterioration in overseas conditions. Consequently, the gross merchandise value overseas increased by 38.8% year on year. * To better reflect the nature of transactions facilitated by the Company, what was referred to as “transaction value” in previous materials is now referred to as “gross merchandise value.” As a result, sales in the EC business stood at 2,950,677,000 yen (up 8.5% year on year). In terms of expenditures, the Company continued to implement aggressive promotional activities, resulting in an increase in advertising expenses of 17.3% year on year, while personnel cost increased by 12.7% year on year due to reinforcement of personnel for business expansion. Consequently, segment profit was 1,178,761,000 yen (up 2.6% year on year). – 4 – (ii) Financial business In the Paid service, the number of member companies continued to steadily increase to surpass 4,500. During the fourth quarter under review, a gradual decrease in cases of the Omicron variant and the continued recovery of the domestic economy helped boost the value of transactions per member company. Consequently, the value of transactions outside the Group totaled 25,600,155,000 yen (up 19.4%) and the overall value of transactions (including 9,050,404,000 yen of transactions within the Group) stood at 34,650,560,000 yen (up 13.1%), both compared on a year-on-year basis, recording double digit growth. In Credit Guarantee services, the Company has continued to actively work on business collaborations with regional banks, etc., for the T&G Credit Guarantee service and the URIHO service, and the number of collaborations steadily increased. In addition, the Company ran taxi advertising for URIHO aimed at enhancing awareness, reaching out to more companies and enhancing service awareness. Regarding rent guarantee services, the Company continued its efforts to increase name recognition of its services for both business and residential properties among real estate companies. Guarantees outstanding at the end of the fiscal year under review amounted to 97,106,271,000 yen (30,755,223,000 yen for RACCOON FINANCIAL, Inc. and 66,351,047,000 yen for RACCOON RENT, Inc.), up 15.1% from the end of the previous fiscal year. As a result, sales in the Financial business stood at 2,074,871,000 yen (up 10.1% year on year), recording double digit growth. In terms of expenditures, the amount of guarantees provided increased due to the relaxation of credit screening criteria, but screening criteria has been controlled appropriately and the ratio of cost of sales continued to be lower than levels seen before the COVID-19 pandemic. The Company continued its policy of strengthening promotional activities, resulting in advertising expenses increasing by 32.4% year on year. Personnel cost increased by 12.1% year on year due to reinforcement of personnel for business expansion. Consequently, segment profit totaled 431,584,000 yen (down 17.4% year on year). (2) Overview of the financial status for the fiscal year under review Total assets at the end of the fiscal year under review amounted to 14,060,831,000 yen, up 1,608,646,000 yen from the end of the previous fiscal year. Current assets increased 1,923,720,000 yen to 11,796,462,000 yen. The main factors causing the increase were the increase of 1,357,701,000 yen in accounts receivable – trade due to increased transactions. Non-current assets decreased 315,074,000 yen to 2,264,368,000 yen. The main factors for the decrease include the decrease of 244,125,000 yen in investment securities due to recording a loss on valuation of investment securities and the decrease of 180,345,000 yen in goodwill mainly as a result of the recording of an impairment loss of goodwill of a subsidiary. Liabilities at the end of the fiscal year under review totaled 8,696,242,000 yen, up 1,586,333,000 yen from the end of the previous fiscal year. Current liabilities increased 1,770,413,000 yen to 7,629,575,000 yen. The main factor for the increase is the increase of 2,261,344,000 yen in accounts payable – trade due to increased transactions, while accounts payable – other decreased by 495,184,000 yen. Non-current liabilities decreased 184,079,000 yen to 1,066,666,000 yen. The main factor for the decrease is the decrease of 178,336,000 yen in long-term borrowings due to repayment. Net assets at the end of the fiscal year under review increased 22,313,000 yen from the end of the previous fiscal year to 5,364,588,000 yen. The main factor for the increase is the increase of retained earnings due to recording 354,661,000 yen of net income attributable to owners of parent and the increase of 43,288,000 yen in share acquisition rights due to recording share-based remuneration expenses, offset by the decrease of 49,219,000 yen in treasury shares due to the grant of shares through an employee stock ownership plan (J-ESOP) and the decrease of 424,856,000 yen in retained earnings due to cash dividends paid. (3) Overview of cash flows for the fiscal year under review Cash and cash equivalents (the “funds”) at the end of the fiscal year under review increased 531,047,000 yen from the end of the previous fiscal year to 5,333,916,000 yen. Cash flows from each activity for the fiscal year under review and their primary factors are as follows: (Cash flows from operating activities) (Cash flows from investing activities) Net cash provided by operating activities during the fiscal year under review amounted to 1,856,587,000 yen. The main factor for this is an increase of 2,261,344,000 yen in notes and accounts payable – trade. Net cash used in investing activities during the fiscal year under review amounted to 197,447,000 yen. The main factors for this are the recording of 129,347,000 yen as purchase of intangible assets primarily for developing software and the recording of 100,000,000 yen as purchase of investment securities. – 5 – (Cash flows from financing activities) Net cash used in financing activities during the fiscal year under review amounted to 1,128,092,000 yen. The main factors for this are the recording of 499,436,000 yen as purchase of treasury shares, the recording of 424,856,000 yen as cash dividends paid, and the recording of 220,006,000 yen as repayments of long-term loans payable. For the fiscal year ending April 30, 2023, the Company forecasts net sales of 5,500 million yen, EBITDA of 1,450 million yen, operating income of 1,300 million yen, ordinary income of 1,300 million yen, and net income attributable to owners of parent of (4) Future prospects 810 million yen. The digital shift in the field of business-to-business transactions has been progressing, and the Company expects that the business environment for the Raccoon Group’s services will continue to be favorable. For the EC business, our policy is to expand gross merchandise value by raising average sales per customer through various measures, such as improving convenience of the website, acquisition of products in high demand and strengthening of promotional activities, while also continuing to increase new memberships. In the Financial business, the policy for the Paid service is to increase member companies and improve the operating rate by striving to enhance system convenience. In the Credit Guarantee service, the T&G Credit Guarantee service was integrated into the URIHO service on May 31, 2022. The integration enabled us to provide flexible services to meet each customer’s requirements in addition to a simple and highly convenient URIHO service. While continuing to explore collaboration partners such as regional banks, we will be active in advertising and promotional activities in an effort to enhance name recognition, increase the number of customers, and expand our market share. For the Rent guarantee services, the Company will work to accumulate guarantees outstanding by expanding the targets to which re-guarantees are offered. With regard to the rate of guarantees provided, in order for us to steadily capture opportunities for business growth brought about by the ongoing favorable business environment and the normalization of economic activity, we will more actively offer credit lines compared to the previous fiscal year. The Company therefore anticipates a slight increase in the rate from the fiscal year ended April 30, 2022. In terms of expenditures, advertising expenses are projected to increase as the Company will continue efforts to enhance promotional activities in the next fiscal year both in the EC business and the Financial business. We will also be active in hiring engineers and web designers. For the services to grow, we must further improve system convenience and efficiency, and we will therefore reinforce personnel to perform system construction and modification with a sense of speed. Moreover, the Company has been reliant on system construction with self-developed systems to date, but with a view to improving development speed, the Company will promote active use of system engineering services and other outsourcing contractors moving forward. As such, development costs are expected to increase. Meanwhile, the number of recruits for other positions will be fewer than in the fiscal year ended April 30, 2022. The Company also announced the “Mid-term Management Plan (from the fiscal year ending April 30, 2023 to the fiscal year ending April 30, 2025).” Please see the Plan for more detailed medium- and long-term strategies. The forward-looking statements above are based on information available to the Company at the time of the announcement and certain assumptions that the Company considers reasonable. Actual results may differ significantly due to a variety of uncertain factors. 2. Basic Policy on Selection of Accounting Standards The Raccoon Group intends to continue preparing its consolidated financial statements using Japanese GAAP for the foreseeable future, taking into consideration the comparability of consolidated financial statements by term and comparability between companies. The Raccoon Group intends to appropriately address the adoption of International Financial Reporting Standards considering circumstances in Japan and overseas. – 6 – 3. Consolidated Financial Statements and Major Notes (1) Consolidated balance sheets (Thousand yen) End of previous consolidated fiscal year (As of April 30, 2021) End of consolidated fiscal year under review (As of April 30, 2022) Assets Current assets Cash and deposits Accounts receivable – trade Rights to claim compensation Supplies Prepaid expenses Other Allowance for doubtful accounts Total current assets Non-current assets Property, plant and equipment Buildings Accumulated depreciation Buildings, net Tools, furniture and fixtures Accumulated depreciation Tools, furniture and fixtures, net Land Total property, plant and equipment Intangible assets Software Software in progress Goodwill Other Total intangible assets Investments and other assets Investment securities Lease and guarantee deposits Deferred tax assets Other Total investments and other assets Total non-current assets Total assets 4,817,162 4,882,133 48,320 259 206,871 71,663 (153,669)9,872,741 622,859 (63,438) 559,420 55,164 (36,279) 18,884 882,140 191,348 27,526 243,128 1,777 463,780 433,898 11,263 196,877 13,177 655,216 5,343,305 6,239,835 46,923 276 196,794 145,458 (176,131) 11,796,462 626,157 (90,714) 535,442 45,990 (26,742) 19,247 882,140 188,373 83,962 62,782 1,440 336,559 189,773 316 285,927 14,960 490,978 1,460,445 1,436,830 2,579,442 12,452,184 2,264,368 14,060,831 – 7 – Liabilities Current liabilities Accounts payable – trade Current portion of long-term borrowings Accounts payable – other Income taxes payable Allowance for guarantees Provision for bonuses Provision for share-based remuneration Provision for sales promotion expenses Deposits received Asset retirement obligations Other Total current liabilities Non-current liabilities Long-term borrowings Asset retirement obligations Other Total non-current liabilities Total liabilities Net assets Shareholders’ equity Capital stock Capital surplus Retained earnings Treasury shares Total shareholders’ equity Share acquisition rights Total net assets Total liabilities and net assets (Thousand yen) End of previous consolidated fiscal year (As of April 30, 2021) End of consolidated fiscal year under review (As of April 30, 2022) 4,178,065 220,006 674,055 175,425 80,668 75,484 44,532 19,770 9,858 － 381,294 5,859,162 1,198,336 1,035 51,375 1,250,746 7,109,908 1,852,237 1,514,092 2,443,083 (499,076) 5,310,337 31,938 5,342,275 6,439,410 178,336 178,870 130,019 99,196 85,429 24,723 18,480 22,918 4,270 447,920 7,629,575 1,020,000 － 46,666 1,066,666 8,696,242 1,852,237 1,514,092 2,372,888 (449,857) 5,289,361 75,227 5,364,588 12,452,184 14,060,831 – 8 – (2) Consolidated statements of income and comprehensive income (Consolidated statements of income) (Thousand yen) Previous consolidated fiscal year (From May 1, 2020 to April 30, 2021) Consolidated fiscal year under review (From May 1, 2021 to April 30, 2022) Net sales Cost of sales Gross profit Selling, general and administrative expenses Operating income Non-operating income Commission income Gain on investments in investment partnerships Miscellaneous income Total non-operating income Non-operating expenses Interest expenses Commission expenses Taxes and due Miscellaneous loss Total non-operating expenses Ordinary income Extraordinary losses Loss on valuation of investment securities Impairment losses Office relocation expenses Total extraordinary losses Income before income taxes Income taxes – current Income taxes – deferred Total income taxes Net income Net income attributable to owners of parent 4,364,721 650,075 3,714,646 2,518,476 1,196,169 4,929 39,771 3,687 48,388 10,647 11,326 4,892 726 27,592 － － 1,216,965 10,856 10,856 1,206,109 360,291 44,848 405,140 800,968 800,968 4,789,984 838,352 3,951,631 2,825,550 1,126,081 3,548 13,560 3,099 20,208 5,879 5,060 90 150 11,181 1,135,109 325,750 147,564 － 473,314 661,795 396,184 (89,050) 307,133 354,661 354,661 – 9 – (Consolidated statements of comprehensive income) (Thousand yen) Previous consolidated fiscal year (From May 1, 2020 to April 30, 2021) Consolidated fiscal year under review (From May 1, 2021 to April 30, 2022) Net income Comprehensive income (Comprehensive income attributable to) Comprehensive income attributable to owners of parent 800,968 800,968 800,968 354,661 354,661 354,661 – 10 – (3) Consolidated statements of changes in equity Previous consolidated fiscal year under review (from May 1, 2020, to April 30, 2021) Shareholders’ equity Capital stock Capital surplus Retained earnings Treasury shares (Thousand yen) Share acquisition rights Total net assets Total shareholders’ equity 1,187,195 849,051 1,952,147 － 3,988,394 11,317 3,999,711 Issuance of new shares 665,041 665,041 (310,032) 800,968 1,330,082 (310,032) 800,968 (499,076) (499,076) 1,330,082 (310,032) 800,968 (499,076) 20,621 20,621 Total changes during period 665,041 665,041 490,936 (499,076) 1,321,942 20,621 1,342,563 Balance at end of period 1,852,237 1,514,092 2,443,083 (499,076) 5,310,337 31,938 5,342,275 Consolidated fiscal year under review (from May 1, 2021, to April 30, 2022) Shareholders’ equity Capital stock Capital surplus Retained earnings Treasury shares (Thousand yen) Share acquisition rights Total net assets Total shareholders’ equity 1,852,237 1,514,092 2,443,083 (499,076) 5,310,337 31,938 5,342,275 (424,856) 354,661 (424,856) 354,661 (456) (456) 49,675 49,675 (424,856) 354,661 (456) 49,675 43,288 43,288 Balance at beginning of period Changes during period Dividends of surplus Net income attributable to owners of parent Purchase of treasury shares Net changes in items other than shareholders’ equity Balance at beginning of period Changes during period Dividends of surplus Net income attributable to owners of parent Purchase of treasury shares Disposal of treasury shares Net changes in items other than shareholders’ equity Total changes during period － － (70,194) 49,219 (20,975) 43,288 22,313 Balance at end of period 1,852,237 1,514,092 2,372,888 (449,857) 5,289,361 75,227 5,364,588 – 11 – (4) Consolidated statements of cash flows Cash flows from operating activities Income before income taxes Depreciation Amortization of goodwill Share-based remuneration expenses Increase (decrease) in allowance for doubtful accounts Increase (decrease) in allowance for guarantees Interest and dividend income Interest expenses Loss (gain) on investments in investment partnerships Loss (gain) on valuation of investment securities Impairment losses Relocation expenses Decrease (increase) in notes and accounts receivable – trade Decrease (increase) in rights to claim compensation Decrease (increase) in inventories Increase (decrease) in notes and accounts payable – trade Increase (decrease) in deposits received Increase (decrease) in advances received Decrease (increase) in prepaid expenses Decrease/increase in consumption taxes receivable/payable Other Subtotal Interest and dividend income received Interest expenses paid Payments of relocation expenses Income taxes paid Income taxes refund Cash flows provided by (used in) operating activities Cash flows from investing activities Purchase of property, plant and equipment Purchase of intangible assets Purchase of investment securities Proceeds from distributions from investment partnerships Payments for lease and guarantee deposits Proceeds from refund of leasehold and guarantee deposits Other Cash flows provided by (used in) investing activities Cash flows from financing activities Net increase (decrease) in short-term loans payable Repayments of long-term loans payable Cash dividends paid Proceeds from issuance of shares resulting from exercise of subscription rights to shares Purchase of treasury shares Proceeds from disposal of treasury shares Other Cash flows provided by (used in) financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period – 12 – (Thousand yen) Previous consolidated fiscal year (From May 1, 2020, to April 30, 2021) Consolidated fiscal year under review (From May 1, 2021, to April 30, 2022) 1,206,109 105,640 38,451 25,143 (74,268) (44,404) (62) 10,647 (39,771) － － 10,856 (674,039) (4,558) (153) (187,368) 1,246 884 (19,286) (55,025) 172,340 472,380 62 (8,951) (7,899) (273,479) 2,654 184,766 (4,217) (77,269) － 33,089 － 4,200 685 (43,512) (2,640,000) (344,996) (310,032) 1,325,560 (96) － (2,892) (1,972,456) (1,831,201) 6,634,071 4,802,869 661,795 110,824 32,781 43,288 22,462 18,528 (66) 5,879 (13,560) 325,750 147,564 － (1,357,701) 1,396 (17) 2,261,344 13,059 41,866 10,076 (40,049) 13,103 2,298,329 66 (5,840) － (439,013) 3,046 1,856,587 (1,360) (129,347) (100,000) 30,883 (8) 2,384 － (197,447) － (220,006) (424,856) － (499,436) 21,259 (5,053) (1,128,092) 531,047 4,802,869 5,333,916 (5) Notes on consolidated financial statements (Notes regarding going concern assumptions) Not applicable (Changes in accounting policies) (Application of Accounting Standard for Revenue Recognition etc.) The Company has adopted the “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29; March 31, 2020, hereinafter “Accounting Standard for Revenue Recognition”), etc., since the beginning of the consolidated fiscal year under review. The Company recognizes revenue at the time when the control over committed goods or services is transferred to customers in an amount that is expected to be received in exchange for those goods or services. There was no impact of this change in accounting policies on the Company’s profits and losses for the consolidated fiscal year under review. In applying the Accounting Standard for Revenue Recognition etc., the Company follows the transitional treatment stipulated in the provisions of paragraph 84 of the Accounting Standard for Revenue Recognition, and there was no impact of the application of the accounting standards on the Company’s profits and losses for the consolidated fiscal year under review or retained earnings at the beginning of the consolidated fiscal year under review. (Application of Accounting Standard for Fair Value Measurement etc.) The Company has adopted the “Accounting Standard for Fair Value Measurement” (ASBJ Statement No. 30; July 4, 2019, hereinafter “Accounting Standard for Fair Value Measurement”), etc., since the beginning of the consolidated fiscal year under review. The Company applies the new accounting policy stipulated in the Accounting Standard for Fair Value Measurement, etc., into the future in accordance with the transitional treatment stipulated in the provisions of paragraph 19 of the Accounting Standard for Fair Value Measurement and paragraph 44-2 of the “Accounting Standard for Financial Instruments” (ASBJ Statement No. 10; July 4, 2019). There was no impact of this change in accounting policies on the Company’s consolidated financial statements. (Notes in the case of significant changes in amount of shareholders’ equity) Not applicable – 13 – (Segment information) [Segment information] 1. Summary of reporting segments The Company’s reporting segments are organizational units for which separate financial information is available, and they are regularly reviewed by the Board of Directors to determine the allocation of management resources and assess business results. In the Raccoon Group, the Company, which is a holding company, formulates comprehensive strategies and engages in overall management, while each business company conducts its own business activities based on those management strategies. Each business company provides infrastructure services for business-to-business transactions with the aim of making corporate activities more efficient and convenient. Business activities are undertaken in an effort to increase sales and profits while striving to improve services. Accordingly, the Raccoon Group is comprised of segments by service based on business companies, with the two reporting segments of the EC business and Financial business. The EC business conducts business centered around the operation of Super Delivery, a business-to-business (BtoB) transaction website. The Financial business engages in the operation of the Paid service, a BtoB deferred payment service for transactions between enterprises, the operation of the T&G Credit Guarantee service and the URIHO service, services to provide guarantees for accounts receivables of enterprises from their business partners, and a rent guarantee service. 2. The method of measurements of sales, profits or losses, assets, liabilities, and other items by reporting segment The method of accounting for reporting business segments is generally the same as that stated in the basis for preparing consolidated financial statements. Profits for reporting segments are figures based on operating income. Inter-segment sales and transfers are determined according to prevailing market prices. 3. Information on sales, profits or losses, assets, liabilities, and other items by reporting segment Previous consolidated fiscal year under review (from May 1, 2020, to April 30, 2021) Reporting segment EC Financial Total Sales Sales to external customers Inter-segment sales and transfers Total Segment profit Segment assets Segment liabilities Other items Depreciation Amortization of goodwill Extraordinary losses Increase in property, plant and equipment and intangible assets 2,720,228 1,644,493 4,364,721 4,364,721 － 239,416 239,416 (239,416) 2,720,228 1,149,432 3,676,579 2,395,353 38,197 － － 21,556 1,883,909 522,515 6,465,617 5,411,272 34,421 38,451 10,856 55,260 4,604,138 (239,416) 4,364,721 1,671,948 (475,778) 1,196,169 10,142,196 2,309,987 12,452,184 7,806,625 (696,717) 7,109,908 72,618 38,451 10,856 33,021 － － 105,640 38,451 10,856 76,816 17,630 94,447 (Notes) 1. The segment profit adjustment of minus 475,778,000 yen includes company-wide revenues and expenses not distributed to the reporting segments. The company-wide revenues are mostly comprised of management consulting fees and such from each reporting segment and the company-wide expenses are general and administrative expenses and such which are not attributable to reporting segments. 2. Segment profits are adjusted to operating income in the consolidated statements of income. 3. Segment assets are adjusted to total assets in the consolidated balance sheets. 4. Segment liabilities are adjusted to total liabilities in the consolidated balance sheets. Adjustment (Note 1) － (Thousand yen) Consolidated financial statement amount (Notes 2, 3, 4) － – 14 – Consolidated fiscal year under review (from May 1, 2021, to April 30, 2022) Reporting segment EC Financial Total (Thousand yen) Adjustment (Note 1) Consolidated financial statement amount (Notes 2, 3, 4) － － 2,950,677 1,839,307 4,789,984 4,789,984 － 235,564 235,564 (235,564) 2,950,677 1,178,761 4,096,931 2,805,606 37,981 － － － － 2,074,871 431,584 5,025,548 (235,564) 4,789,984 1,610,346 (484,265) 1,126,081 82,779,913 12,376,844 1,683,986 14,060,831 6,906,957 9,712,564 (1,016,322) 8,696,242 34,385 32,781 147,564 － 72,367 32,781 38,457 － 147,564 325,750 110,824 32,781 473,314 － 325,750 325,750 147,564 147,564 － 147,564 37,125 35,355 72,481 67,852 140,333 Sales Sales to external customers Inter-segment sales and transfers Total Segment profit Segment assets Segment liabilities Other items Depreciation Amortization of goodwill Extraordinary losses (Loss on valuation of investment securities) (Impairment losses) Increase in property, plant and equipment and intangible assets (Notes) 1. The segment profit adjustment of minus 484,265,000 yen includes company-wide revenues and expenses not distributed to the reporting segments. The company-wide revenues are mostly comprised of management consulting fees and such from each reporting segment and the company-wide expenses are general and administrative expenses and such which are not attributable to reporting segments. 2. Segment profits are adjusted to operating income in the consolidated statements of income. 3. Segment assets are adjusted to total assets in the consolidated balance sheets. 4. Segment liabilities are adjusted to total liabilities in the consolidated balance sheets. – 15 – [Related information] Previous consolidated fiscal year (from May 1, 2020, to April 30, 2021) 1. Information by product and service The classifications of products and services are identical to the reporting segments, and the information is omitted. The information is omitted as sales to external customers in Japan account for more than 90% of sales in the consolidated The information is omitted as the Company does not have any property, plant and equipment outside Japan. 3. Information by major customer The information is omitted as no external customer accounts for 10% or more of sales in the consolidated statements of income. Consolidated fiscal year under review (from May 1, 2021, to April 30, 2022) 1. Information by product and service The classifications of products and services are identical to the reporting segments, and the information is omitted. The information is omitted as sales to external customers in Japan account for more than 90% of sales in the consolidated The information is omitted as the Company does not have any property, plant and equipment outside Japan. 3. Information by major customer The information is omitted as no external customer accounts for 10% or more of sales in the consolidated statements of income. [Information on items related to impairment loss on non-current assets by reporting segment] Previous consolidated fiscal year (from May 1, 2020, to April 30, 2021) Not applicable Consolidated fiscal year under review (from May 1, 2021, to April 30, 2022) The information is omitted as the same information is disclosed in the segment information. [Information on the amortization and unamortized balance of goodwill by reporting segment] Previous consolidated fiscal year under review (from May 1, 2020, to April 30, 2021) EC Financial Corporate (common) Total 2. Information by region (1) Sales statements of income. (2) Property, plant and equipment 2. Information by region (1) Sales statements of income. (2) Property, plant and equipment Amortization Unamortized Amortization Unamortized (Thousand yen) (Thousand yen) 38,451 243,128 32,781 62,782 － － － － Consolidated fiscal year under review (from May 1, 2021, to April 30, 2022) EC Financial Corporate (common) Total － － － － 38,451 243,128 32,781 62,782 – 16 – [Information on gain on bargain purchase by reporting segment] Not applicable (Per share information) Previous consolidated fiscal year (From May 1, 2020, to April 30, 2021) Consolidated fiscal year under review (From May 1, 2021, to April 30, 2022) (Yen) 238.12 15.97 15.90 354,661 － 354,661 － 94,565 [94,565] (Note) Net income per share and net income per share (diluted) are calculated based on the following. Previous consolidated fiscal year (From May 1, 2020, to April 30, 2021) Consolidated fiscal year under review (From May 1, 2021, to April 30, 2022) Net income per share Net assets per share Net income per share Net income per share (diluted) Net income attributable to owners of parent (Thousand yen) Amount not attributable to shareholders of common shares (Thousand yen) Net income attributable to owners of parent attributable to common shares (Thousand yen) Average number of common shares during the period (Shares) Net income per share (diluted) Adjustment of net income attributable to owners of parent (Thousand yen) Increase in number of common shares (Shares) [of which share acquisition rights (Shares)] Outline of potential common shares not used to calculate net income per share (diluted) because they do not have dilution effect 239.23 36.78 36.19 800,968 － 800,968 － 355,403 [355,403] － － (Note) The Company’s shares remaining in the employee stock ownership plan (J-ESOP), which have been recorded as treasury shares in shareholders’ equity, are included in the treasury shares deducted from the total number of issued shares at the end of the term for the purpose of calculating “Net assets per share” (163,600 shares for the previous fiscal year and 147,313 shares for the fiscal year under review). In addition, these are included in the treasury shares deducted when calculating the average number of issued shares during the term for the purpose of calculating “Net income per share” and “Net income per share (diluted)” (1,345 shares for the previous fiscal year and 149,812 shares for the fiscal year under review). 21,778,030 22,211,025 – 17 – (Significant subsequent events) (Acquisition and cancellation of treasury shares) At the Board of Directors meeting held on June 10, 2022, the Company passed a resolution regarding the matters related to acquisition of treasury shares according to the provisions of Article 156 of the Companies Act, applicable pursuant to the provisions of Paragraph 3, Article 165 of said Act, and decided to cancel treasury shares pursuant to the provisions of Article 178 of the Companies Act. 1. Reasons for acquisition of treasury shares To enhance shareholder returns and improve capital efficiency 2. Matters related to acquisition of treasury shares (1) Class of shares to be acquired: (2) Total number of shares to be acquired: (3) Aggregate amount of acquisition cost: (4) Period of acquisition: (5) Method of acquisition: Common stock 160,000 shares (Upper limit) 300,000,000 yen (Upper limit) June 13, 2022, to August 31, 2022 Market purchase on the Tokyo Stock Exchange 3. Matters related to cancellation of treasury shares (1) Class of shares to be cancelled: (2) Total number of shares to be cancelled: (3) Scheduled date of cancellation: Common stock All treasury shares acquired in 2 above September 15, 2022 – 18 –