English Translation
This document is a translation of the Japanese original. The Japanese original has been disclosed in Japan in accordancewith Japanese accounting standards and the Financial Instruments and Exchange Act. This document does not contain orconstitute any guarantee and the Company will not compensate any losses and/or damage stemming from actions taken
based on this document. In the case that there is any discrepancy between the Japanese original and this document, theJapanese original is assumed to be correct.

Consolidated financial results (Japanese Accounting Standards)
for the fiscal year ended March 31, 2021
Company name:IMAGICA GROUP Inc.

Securities code:

6879

Filing date: May 13, 2021
Stock exchange listing: Tokyo 1st section
URL:

https://www.imagicagroup.co.jp/en/

Representative:
Nobuo Fuse, President
Inquiries:
Masakazu Morita, Director and Managing Executive Officer
Scheduled date for ordinary general meeting of shareholders:June 25, 2021
Scheduled date for commencement of dividend payment:－
Supplemental material of quarterly results:
Yes
Convening briefing of quarterly results:
Yes

Tel:+81-3-6741-5742(Millions of yen, rounded down)
1. Consolidated Financial Results for the fiscal year ended March 31, 2021
(April 1, 2020 – March 31, 2021)(1) Consolidated Operating Results(Percentage represents change from the same period of the previous fiscal year.)Net sales

Fiscal year ended Mar.2021
Fiscal year ended Mar.2020(Note) Comprehensive income:Operating income

Net income attributableto owners of the parent

Ordinary income

Millions ofyen%Millions of yen%

Millions of yen%

Millions of yen%

86,727(7.8)(1,084)－(1,343)

－

3,454

420.2

94,090

4.3

1,351

45.9

416

(47.2)

664－

Fiscal year 2020: 3,490 millions of yen /－%Fiscal year 2019: (537) millions of yen /－%Net profit attributable to
Diluted net profit
owners of parent per attributable to owners of
shareparent per share

ReturnTotal asset ordinary Operating incomeon equity net
income ratio
ratio
income

yen

yen

%

%

%

Fiscal year ended Mar.2021

77.89

－

13.2

(2.2)

(1.3)

Fiscal year ended Mar.2020

15.05

－

2.6

0.7

1.4

(Reference) Equity in net income of affiliates: Fiscal year ended March 31, 2021 : (340) millions of yen
Fiscal year ended March 31, 2020 : (597) millions of yen(2) Consolidated Financial Position
Total assets

Net assets

Net assets per share ofcommon stock

Shareholders' equity
ratio to total assets

Millions of yen

Millions of yen%yen

As of March 31, 2021

60,446

29,83245.4

618.43As of March 31, 2020

62,15427,47840.3

566.19Cash flow from financing
activities

Cash and cash equivalents
at the end of the period

Millions of yen

Millions of yen(Reference) Shareholders’ equity:Year ended March 31, 2021: 27,450 millions of yen
Year ended March 31, 2020: 25,066 millions of yen(3) Consolidated Cash Flows
Cash flow from operating Cash flow from investing
activities
activities
Millions of yen

Millions of yen

Fiscal year ended Mar.2021(592)(1,364)

1,469

6,856

Fiscal year ended Mar.2020

6,974(4,297)(1,291)

7,327

English Translation

2. Dividends
Dividend per share

Fiscal year ended
Mar.2020
Fiscal year ended
Mar.2019
Fiscal year ending
Mar.2021(Forecast)

1stquarterend

2ndquarter- end

3rdquarter- endYear-end

yen

yen

yen

AnnualDividends
total (Annual)

Dividend
payout ratio(Consolidated)

Dividends to
Net Assets(Consolidated)

yen

yen

Millions of yen

%

%

0.00

－

5.00

5.00

221

33.2

0.9

－

0.00

－

0.00

0.00

－

－

－

－

0.00

－

5.00

5.00

－

27.7

3. Consolidated forecast for the fiscal year ending March 31, 2022
(April 1, 2021 - March 31, 2022)(Percentage represents change from the same period of the previous fiscal year.)Net sales

Fiscal year ending
Mar.2021

Operating income

Net income
attributableto owners of theparentOrdinary income

Earnings per
shareof commonstock

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

yen

75,000(13.5)

1,500

－

1,300

－

800

(76.8)

18.02*Notes:(1) Material changes in subsidiaries during this period (changes in scope of consolidations resulting from change insubsidiaries): Yes(Name) Pixelogic Holdings LLC、SDI Media Group, Inc.
(2) Changes in accounting policies, accounting estimates and retrospective
1) Changes in accounting policies based on revisions of accounting standards: None
2) Changes in accounting policies other than ones based on revisions of accounting standard: None
3) Changes in accounting estimates: Yes
4) Retrospective restatement: None
(3) Number of issued and outstanding shares (common stock)1) Number of issued and outstanding shares at the end of fiscal year (including treasury stock)
As of March 31, 2021

44,741,467 shares

As of March 31, 2020

44,741,467 shares353,231 shares

As of March 31, 2020

468,341 shares

44,350,392 shares

As of March 31, 2020

44,113,005 shares

2) Number of treasury stock at the end of fiscal year
As of March 31, 2021

3) Average number of shares
As of March 31, 2021

(Explanation about the appropriate usage of business prospects and other special notes)
・The above-mentioned business forecasts were based on the information available as of the date of the release of this report.
・Future events may cause the actual results to be significantly different from the forecasts.
(Disclaimer)This document is a translation of the Japanese original. The Japanese original has been disclosed in Japan in accordance with Japanese
accounting standards and the Financial Instruments and Exchange Act. This document does not contain or constitute any guarantee andthe Company will not compensate any losses and/or damage stemming from actions taken based on this document. In the case that
there is any discrepancy between the Japanese original and this document, the Japanese original is assumed to be correct.

English Translation

Table of Contents
Overview of operating results .................................................................................................................. 2

1.
(1)

Overview of operating results for consolidated fiscal year ended March 31, 2021 ..................................................... 2(2)

Overview of financial position for consolidated fiscal year ended March 31, 2021 .................................................... 4(3)

Overview of cash flows for consolidated fiscal year ended March 31, 2021 ............................................................ 5(4)

Forecast of financial results for consolidated fiscal year ending March 31, 2022 ....................................................... 6

2.

Basic policy for the selection of accounting standards ...................................................................................... 6

3.

Consolidated Financial Statements ............................................................................................................ 7(1)

Consolidated Balance Sheets ................................................................................................................. 7(2)

Consolidated Statements of Income and Statements of Comprehensive Income ...................................................... 9(3)

Consolidated Statements of Cash Flow Statement ....................................................................................... 11(4)

Notes to consolidated statements ......................................................................................................... 13(Segment information and others) ............................................................................................................ 13

1

English Translation

1.

Overview of operating results(1) Overview of operating results for consolidated fiscal year ended March 31, 2021
(i) Overview of the consolidated fiscal year ended March 31, 2021
The global spread of the novel coronavirus (COVID-19) during consolidated fiscal year ended March 31, 2021 led to substantial restrictions on socialand economic activities and the persistence of extremely severe conditions. The business environment in Japan showed signs of a gradual recovery
from the third quarter onward and improvement performance of the IMAGICA GROUP was evident, compared to the first half of the fiscal year.
The Group’s financial performance for consolidated fiscal year ended March 31, 2021 resulted in net sales of 86,727 million yen (a decline of 7.8%
year-on-year), an operating loss of 1,084 million yen (compared to operating income of 1,351 million yen in the previous fiscal year), and an
ordinary loss of 1,343 million yen (compared to an ordinary income of 416 million yen in the previous fiscal year). Net income attributable to ownersof the parent was 3,454 million yen (an increase of 420.2% year-on-year), due to 7,138 million yen recorded as a gain on the sale of stocks ofsubsidiaries and a gain on step acquisitions in extraordinary income.

(Performance by business segment)
The financial results by business segment are as follows.
Please note that Production Services and Media Localization were integrated from the first quarter of consolidated fiscal year ending March 31,
2021, thereby reducing the four reportable segments to three: Content Creation, Production Services, and Imaging Systems & Solutions.
1) Content Creation
The financial performance of the Content Creation business segment in consolidated fiscal year ended March 31, 2021 resulted in net sales of
19,809 million yen (a decline of 24.4% year-on-year) and an operating loss of 440 million yen (compared to an operating loss of 359 million yen in
the previous fiscal year).
This severe business environment persisted during the first half, leading to a substantial decline in both net sales and profit. The Declaration of aState of Emergency resulted in the postponed release of multiple feature films and suspension of shooting of TV commercials and live music
performance recordings. The number of TV animation series produced also declined and changes in TV broadcasting schedules occurred. However, anumber of the postponed feature films were released, shooting of films, dramas, and other works resumed, and orders for TV commercials andother advertising increased during the second half.
Growth in the online live market has expanded new business opportunities for streaming live music performance recordings, etc. This led to arebound in net sales from the second half, but the large negative impact on financial results during the first half resulted in a decline in sales and an
expansion of the operating loss in the Content Creation Business overall for the full year.

2English Translation(2) Production Services
The financial performance of the Production Services business segment in consolidated fiscal year ended March 31, 2021 resulted in net sales of
48,286 million yen (a decline of 1.6% year-on-year) and an operating loss of 2,222 million yen (compared to an operating loss of 348 million yen in
the previous fiscal year).
In the first half of the fiscal year, media and post-production services*1 struggled from the postponement of multiple feature films and thesuspension of shooting and live music performance recordings. During the second half, orders increased for post-production services for TV
programs, TV commercials, and animation, and encoding for video streaming service providers. The resumption of live music and sports events
streamed online also improved net sales and profits in video streaming and archiving services. The Group also decided to structural reform of the
production services business (Group business reorganization and voluntary retirement) on January 22, 2021 to improve the earning capacity of the
production services business. This structural reform will enable the Group to manage the business with a strong management structure from fiscal
year ending March 31, 2022.
In international media services, the impact from the COVID-19 pandemic caused SDI Media Group, Inc. to close dubbing studios and halt productionof new projects, and resulted in tough conditions that persisted through the whole year. Pixelogic Holdings LLC, which became a consolidated
subsidiary from the third quarter, received steady orders for E2E services*2 for video streaming service providers.
The sale of all shares in SDI Media Group, Inc. was completed on March 26, 2021 and it was removed from the scope of consolidation on March 31,
2021. The consolidated forecast for fiscal year ending March 31, 2022 therefore does not include profit (loss) from the company.
In human talent services, changes in and restrictions on corporate hiring activities persisted and this resulted in a decline in demand in the creative
talent dispatch and referral business compared to the previous year. In the digital content business, Game 3DCG production was firm, benefittingfrom the addition of more locations and establishment of a remote production structure.
The performance described above resulted in a decline in sales and an expansion of the operating loss for the Production Services business segment
as a whole for the full year.
*1 Media and post-production services: Entire range of services relating to video production technology, including post-production services, E2E

services*2, filming, and archiving services.
*2 E2E services: Integrated end-to-end (E2E) service that covers the entire post-editing process from localization (subtitling/dubbing) to distribution*3of feature films, TV dramas, and other source videos.
*3 Distribution: Comprehensive service which includes the creation of data from the original version of the completed work, QC and distribution

tailored to the requirements of release/delivery format of visual contents (theater, VOD, DVD/BD, etc.), and the management of the process andsource materials.
* Companies in the international media services area have a fiscal year-end of December 31. The financial performance for this area duringconsolidated fiscal year ended March 31, 2021 therefore reflects the results for January 1 through December 31, 2020.

3) Imaging Systems & Solutions
The financial performance of the Imaging Systems & Solutions business segment in consolidated fiscal year ended March 31, 2021 resulted in net
sales of 19,669 million yen (a decline of 4.3% year-on-year) and operating income of 2,045 million yen (a decline of 24.6% year-on-year).
In the video systems business area, the online delivery system for TV commercials saw strong sales due to the expansion in market needs. However,some projects for broadcasting stations declined or shrunk in size due to curtailment of investment by each broadcaster. In the imaging businessarea, conditions remained tough for high-speed cameras in Japan, Europe, and the U.S., while sales showed signs of rebounding in the Asian region.
Sales of video and image processing LSI for Taiwan and China remained firm. In the mobile solutions area, demand for mobile data communications
continued to expand throughout the year.
The performance described above resulted in a decline in both sales and profit in the Imaging Systems & Solutions business segment as a whole forthe full year.

3English Translation(2) Overview of financial position for consolidated fiscal year ended March 31, 2021
1) Assets
Current assets decreased by 4,854 million yen (13.8%) from the end of the previous consolidated fiscal year to 30,440 million yen.
This was mainly due to a decrease in inventories, and notes and accounts receivable-trade.
Non-current assets increased by 3,145 million yen (11.7%) from the end of the previous consolidated fiscal year to 30,005 million yen.
This was mainly due to an increase in goodwill and in investment securities, which exceeded the decline in stocks of subsidiaries and affiliates.
Consequently, total assets decreased by 1,708 million yen (2.7%) from the end of the previous fiscal year to 60,446 million yen.
2) Liabilities
Current liabilities decreased by 3,645 million yen (14.1%) from the end of the previous consolidated fiscal year to 22,117 million yen.
This decrease was mainly due to a decrease in advances received and accounts payable which more than compensated for an increase in short-termloans payable.
Non-current liabilities decreased by 417 million yen (4.7%) from the end of the previous consolidated fiscal year to 8,495 million yen.
This decrease was mainly due to a decrease in long-term loans payable.
The above factors resulted in total liabilities of 30,613 million yen, a decrease of 4,062 million yen (11.7%) from the end of the previous consolidated
fiscal year.
3) Net Assets
Net assets increased by 2,354 million yen (8.6%) from the end of the previous consolidated fiscal year to 29,832 million yen. Shareholders' equity
ratio to total assets was 45.4%.

4

English Translation(3) Overview of cash flows for consolidated fiscal year ended March 31, 2021
Cash and cash equivalents (hereafter, “cash”) on March 31, 2021 decreased by 470 million yen (or 6.4%) compared to the end of the previous fiscal
year, to 6,856 million yen.
The breakdown of cash flows for consolidated fiscal year ended March 31, 2021 and the main factors behind changes in cash flows are summarized
below.
1) Cash flows from operating activities
Net cash used in operating activities was 592 million yen (compared to 6,974 million yen in net cash provided in the previous fiscal year).
This mainly resulted from an increase in cash due to a decrease in inventories and a decrease in cash due to a decrease in advances received.
2) Cash flows from investing activities
Net cash used in investing activities was 1,364 million yen, a decrease of 2,933 million yen (or 68.3%) compared to the end of the previous fiscal year.
This mainly resulted from an increase in cash due to the sale of stock of subsidiaries accompanying a change in the scope of consolidation, and adecrease in cash from the purchase of subsidiary stock accompanying a change in the scope of consolidation and property, plant, and equipment.
3) Cash flows from financing activities
Net cash provided by financing activities was 1,469 million yen (compared to 1,291 million yen in cash used during the previous fiscal year).
This mainly resulted from a decrease in cash from the repayment of long-term loans payable, and an increase in cash from proceeds from long-termand short-term loans payable.

(Reference) Trend of Cash Flow Indicators
FY ended March 31, FY ended March 31, FY ended March 31, FY ended March 31, FY ended March 31,
2017
2018
2019
2020
2021
Shareholders’ equity ratio (%)

38.6

41.7

38.9

40.3

45.4

Shareholders’ equity ratio on a market pricebasis (%)

48.5

76.0

45.5

25.1

39.7

Ratio of net cash to interest-bearing liabilities(year)

371.7

358.2

10,625.2

162.4(2,282.9)

Interest coverage ratio (times)

26.3

26.0

0.4

21.4

(1.7)

*Shareholders’ equity ratio: Shareholders’ equity/Total assets
Shareholders’ equity ratio on a market price basis: Total market value of shares/Total assets
Ratio of net cash to interest-bearing liabilities: Interest-bearing debt/Operating cash flow
Interest coverage ratio: Operating cash flow/Interest payments
Notes:
1. These indicators are calculated based on consolidated financial results.
2. Total market value of stock is calculated by the following formula: closing price at period-end x outstanding shares at period-end (excluding
treasury stock).
3. Operating cash flow is based on net cash provided by operating activities reported on the Consolidated Statements of Cash Flow. Interestbearing debt include all debt reported on the Consolidated Balance Sheets for which interest is paid. The amount of interest payments is theamount of interest expenses paid reported on the Consolidated Statements of Cash Flow.

5

English Translation(4) Forecast of financial results for consolidated fiscal year ending March 31, 2022
Changes in the business environment precipitated by rapid technological innovation and the COVID-19 pandemic have also caused many changes inimaging-related businesses, such as the rapid expansion of the online live and video streaming markets.
The Group regards these changes as growth opportunities and has designated fiscal year ending March 31, 2022 as the year to build the foundation
for transforming into a highly profitable business. We will pursue the following key initiatives in each business segment:1) Content Creation: Acquire production projects for video streaming service providers, promote expansion to multiple media by utilizing the Group
intellectual property (IP), and improve productivity through comprehensive cost management and pursuit of digitalization.
2) Production Services: Expand E2E services for video streaming service providers, expand localization in Japanese and digital cinema services,
strengthen the solution service in the game business area, and improve productivity by reducing fixed costs through structural reform and throughremote production.
3) Imaging Systems & Solutions: Expand sales by accessing new sales channels for imaging systems for broadcasting stations and providing new
solutions, develop the solution business for the vehicle crash test market, and launch and expand sales of a cloud-based video production workflow
service (subscription-based model).
In light of the Group’s pursuit of these key initiatives, the financial forecast for consolidated fiscal year ending March 31, 2022 is 75 billion yen in net
sales, 1.5 billion yen in operating income, 1.3 billion yen in ordinary income, and 800 million yen in net income attributable to owners of the parent.
We also expect COVID-19 to continue to impact financial performance for some time.
The Group has also formulated the “Integration to 2021” Mid-term Business Strategy for fiscal year ending March 31, 2022 and is working on
implementing it. We plan to disclose our progress on “Integration to 2021” and future initiatives in the financial results briefing scheduled on May 19,
2021.
<Dividend policy>
The Group considers the return of profits to shareholders as an important management objective. Our basic policy is to distribute earnings in line withconsolidated results. We target a consolidated payout ratio of 30% and aim to maintain stable dividends and increase the level of dividends.
If any special factor, such as an extraordinary gain or loss, significantly impacts the net income of a given fiscal year, our general policy is to take thespecial factor into consideration in determining dividends, after consideration of all aspects, including provision of stable dividends to shareholders,
future business development, and retained earnings.
Based on the policy stated above, we have set the year-end dividend of 5 yen per share for fiscal year ending March 31, 2022.

2.

Basic policy for the selection of accounting standards
Considering comparability of consolidated financial statements over time, the Group will continue to use the Japanese accounting standards in theimmediate future.
Meanwhile, the Group plans to appropriately decide the adoption of the International Financial Reporting Standards (IFRS) after consideringdevelopments regarding accounting standards in Japan and abroad.

6

English Translation

3.

Consolidated Financial Statements(1) Consolidated Balance Sheets(Thousands of yen)March 31, 2020

March 31, 2021

AssetsCurrent assets
Cash and deposits

7,339,777

6,908,657

Notes and accounts receivable- trade16,609,098

15,159,083

Inventories

9,734,028

6,499,812

Other

1,665,660

1,918,018

Allowance for doubtful accounts(53,471)(44,735)

35,295,092

30,440,836

Buildings and structures

3,343,459

3,065,365

Machinery and equipment

133,153

85,810Total current assets
Non-current assets
Property, plant and equipment

Land1,705,819

1,705,819

Lease Assets

735,973475,187

Construction in progress

341,285

526,880

Other

1,563,637

1,365,805

Total Property, plant and equipment

7,823,328

7,224,868

Intangible assets
Goodwill

3,167,870

12,048,747

Other

5,328,189

2,464,367

Total Intangible assets

8,496,059

14,513,115

Investment securities

2,296,170

3,163,483

Stocks of subsidiaries and affiliates

2,691,296

1,095,950

Lease and guarantee deposits

1,466,390

1,641,911

Deferred tax asset

1,852,835

2,154,662

Other

2,361,601

328,808

Investments and other assets

Allowance for doubtful accounts(128,070)(117,446)

Total Investments and other assets

10,540,222

8,267,369

Total Non-current assets

26,859,610

30,005,354

62,154,703

60,446,190

Total assets

7

English Translation(Thousands of yen)March 31, 2020

September 30, 2020

Liabilities
Current liabilities
Notes and accounts payable- trade

6,060,774

5,416,309

Short-term loans payable

5,004,318

7,402,726

Accounts payable

3,027,865

1,212,857

Income taxes payable

1,504,588

211,609

Advances received

4,939,345

2,811,112

Provision for bonuses

1,245,383

977,286

Provision for directors compensations based on profit

106,568－

Provision for loss on order received

218,878

79,660－531,408

Other

3,654,716

3,474,389

Total current liabilities

25,762,438

22,117,359

5,510,940

5,384,905

174,097

148,018

Provision for loss on litigation

Non-current liabilities
Long-term loans payable
Long-term accounts payable-other
Deferred tax liabilities

283,312550,324

Net defined benefit liabilities

1,233,649

1,219,724

Asset retirement obligations

49,714

627,722

Other

1,662,082

565,200

Total non-current liabilities

8,913,796

8,495,895

34,676,235

30,613,255

Capital stock

3,306,002

3,306,002

Capital surplus

14,871,552

13,238,832

Retained earnings

7,730,081

10,966,151

Total Liabilities
Net assets
Shareholders’ equity

Treasury stock(479,516)(361,659)

Total shareholders’ equity

25,428,120

27,149,326

Accumulated other comprehensive income
Valuation difference on available-for-sale securities

187,009880,107

Revaluation reserve for land

(17,933)(17,933)

Foreign currency translation adjustment(529,312)(559,947)

Re-measurements of defined benefit plans
Total accumulated other comprehensive income
Stock acquisition right(1,082)(688)(361,318)

301,538

11,484

11,484Non-controlling Interests

2,400,180

2,370,585

Total Net assets

27,478,467

29,832,935

Total liabilities and Net assets

62,154,703

60,446,190

8

English Translation(2) Consolidated Statements of Income and Statements of Comprehensive Income
Consolidated Statements of Income(Thousands of yen)

Fiscal year 2019

Fiscal year 2020

Net sales

94,090,704

86,727,250

Cost of sales

70,321,653

66,144,342

Gross profit

23,769,050

20,582,908

Selling, general and administrative expenses

22,417,329

21,667,668

Operating profit (loss)

1,351,721(1,084,760)

Interest income

189,665

211,506

Dividend income

43,48635,623

Rental income

71,181

65,200Subsidy income

19,745

159,998

Non-operating income－

80,382Other64,496

58,618

Total non-operating income

388,574

611,329

Interest expenses

337,478

339,794

Equity in losses of affiliates

597,858

340,681

Foreign exchange losses

193,201－

Other

195,455

189,668

1,323,993

870,144416,302(1,343,575)

Gain on sales of non-current assets

1,650,783

3,790

Gain on sales of investment securities

30,063－Gain on sale of shares of subsidiaries and associates

7,750

4,936,083－

2,076,728

Foreign exchange gains

Non-operating expenses

Total non-operating expenses
Ordinary income (loss)
Extraordinary income

Gain on step acquisitions
Other
Total extraordinary income－

121,825

1,688,596

7,138,428

Extraordinary losses－

263

Loss on retirement of non-current assets

35,63950,714

Impairment loss

220,351

410,443

Loss on sales of non-current assets－

1,716,210

Other

102,250

62,381Business restructuring expenses
Total extraordinary losses

358,240

2,240,013

Income before income taxes

1,746,657

3,554,839

Income Taxes Current

2,190,709

774,733

Income Taxes Deferred (loss)(553,874)(128,541)

Income taxes

1,636,835

646,191

Net income

109,8222,908,647

Net loss attributable to non-controlling interests(554,234)(545,990)

Net income attributable to owners of parent

664,057

3,454,638

9

English Translation

Consolidated Statements of Comprehensive Income(Thousands of yen)

Fiscal year 2019

Net income

Fiscal year 2020

109,8222,908,647(555,045)

690,975

1,346－(79,554)(109,391)

Other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Re-measurements of defined benefit plans(14,001)

393

Total other comprehensive income(647,254)

581,977

Comprehensive income(537,431)

3,490,624

Comprehensive income attributable to owners of parent

10,357

4,117,494

Comprehensive income attributable to non-controllinginterests(547,788)(626,869)(Breakdown)

10English Translation(3)

Consolidated Statements of Cash Flow Statement(Thousands of yen)

Fiscal year 2019

Fiscal year 2020

Cash flows from operating activities
Income before income taxes (loss)

1,746,657

3,554,839

Depreciation and Amortization

2,777,709

2,757,520

576,956

871,375

Amortization of goodwill
Impairment loss

220,351

410,443

Increase (decrease) in net defined benefit liabilities(114,517)(19,166)

Increase (decrease) in allowance for doubtful accounts

11,869

7,930

Increase (decrease) in provision for bonuses

143,999(272,580)

Interest and dividend income(233,151)(249,299)

Interest expenses

337,478

339,794

Equity in (earnings) losses of affiliates

597,858

340,681

Loss (gain) on sales of investment securities(16,412)－

Loss (gain) on sales of socks of subsidiaries and affiliates(7,750)(4,936,083)－(2,076,728)

Loss (gain) on step acquisitions
Subsidy income
Business restructuring expenses(19,745)(159,998)－

1,716,210

Loss (gain) on sales of non-current assets(1,615,143)

47,187

Decrease (increase) in notes and accounts receivable-trade

2,248,159(52,438)

Decrease (increase) in inventories

1,528,726

2,741,123

Increase (decrease) in notes and accounts payable-trade(480,136)

26,013

Increase (decrease) in advance payment(482,079)(1,635,027)

Increase (decrease) in consumption taxes payable or receivable

1,115,632(720,363)

Increase (decrease) in account payable(715,304)

399,326

Other, net

764,244(467,767)

Subtotal

8,385,402

2,622,993

Interest and dividend income received

232,698

248,536

Interest expenses paid

(325,682)(354,142)

19,745

159,535

Subsidies received－(1,400,653)

Income taxes paid

(1,337,915)(1,868,750)

Net cash provided by (used in) operating activities

6,974,248(592,481)－(394,699)

Business restructuring expenses paid

Cash flows from investing activities
Payments into time deposits
Payments of short-term loans receivable(15,000)－

Collection of short-term loans receivable

583,446

142,957

Long-term loan advances(1,791,800)－

Purchase of property, plant and equipment(1,468,069)(1,500,380)

Proceeds from sales of property, plant and equipment

2,674,252

5,302

Purchase of intangible assets(881,215)(709,320)－(60,000)

Purchase of shares of subsidiaries resulting in change in scope of
consolidation
Purchase of investments in affiliates(2,975,955)(467,768)

Purchase of shares of subsidiaries resulting in change in scope of
consolidation－(4,099,820)

Proceeds from sale of shares of subsidiaries resulting in change in scopeof consolidation－

5,859,020(423,124)(139,541)(4,297,465)(1,364,250)

Other, net
Net cash provided by (used in) investing activities

11English Translation(Thousands of yen)

Fiscal year 2019

Fiscal year 2020

Cash flows from financing activities
Net increase (decrease) in short-term loans payable

245,688

3,596,512

Proceeds from long-term loans payable

1,090,500

4,939,764

Repayment of long-term loans payable(2,473,788)(4,048,685)(220,266)(221,365)(7,828)(2,794,252)

Cash dividends paid
Purchase of investments in subsidiaries do not result in change in scopeof consolidation
Proceeds from share issuance to non-controlling shareholders

267,500－

Repayments of finance lease obligations(445,758)(431,750)

Others, net
Net cash provided by (used in) financing activities

252,457

428,777(1,291,495)

1,469,000

Effect of exchange rate change on cash and cash equivalents(124,518)

2,723

Net increase (decrease) in cash and cash equivalents

1,260,768(485,008)

Cash and cash equivalents at beginning of period

6,067,073

7,327,842－

14,1197,327,842

6,856,953

Increase (decrease) in cash and cash equivalents resulting from change inscope of consolidation
Cash and cash equivalents at end of period

12English Translation(4) Notes to consolidated statements(Segment information and others)
I.

[Segment Information]
Fiscal year 2019 (from April 1, 2019 to March 31, 2020)
Information regarding net sales, profit (loss) and assets by reportable segment(Thousands of yen)Content Creation

Production
Services

Imaging Systems &Solutions

Sub total

Net sales
Sales to externalcustomers
Inter-segment sales
or transfers
Total
Segment income (loss)
Segment assets

25,938,151

48,046,082

20,015,927

94,000,161

267,442

1,045,479

535,816

1,848,739

26,205,594

49,091,562

20,551,744

95,848,901(359,560)(348,063)

2,714,477

2,006,853

14,781,406

32,239,835

10,906,01

57,927,259

Adjustments(Note 1)

Amount in the
Quarterly
Consolidated
Statements of Income(Note 2)

Net sales
Sales to externalcustomers
Inter-segment sales
or transfers

90,542

94,090,704(1,848,739)－(1,758,196)

94,090,704

Segment income (loss)(655,131)

1,351,721

Segment assets

4,227,443

62,154,703

Total

Notes:
1.
Adjustments is as follows(1)
Sales to external customers consisting of income related to new business development and real estate leasing and building management.
(2)
The segment income (loss) adjustment of (655,131) thousand yen consists of 1,038,865 thousand yen in incomes of holding companies(consolidated financial statement-submitting companies) and intersegment transaction eliminations of (1,693,997) thousand yen.
(3)
The adjustment of 4,227,443 thousand yen in segment assets includes 14,700,511 thousand yen in Company assets not allocated toindividual segments and intersegment transaction eliminations of (10,473,067) thousand yen. Company assets consist mainly of cash anddeposits, and investment securities and other non-current assets of holding companies (consolidated financial statement-submitting
companies).
2.
The segment income (loss) adjustment is based on the operating profit item in the Consolidated Statements of Income.

13

English Translation

II.

Fiscal year 2020(from April 1, 2020 to March 31, 2021)
Information regarding net sales, profit (loss) and assets by reportable segment(Thousands of yen)Content Creation

Production
Services

Imaging Systems &Solutions

Sub total

Net sales
Sales to externalcustomers
Inter-segment sales
or transfers
Total
Segment income (loss)
Segment assets

19,630,096

47,379,971

19,261,382

86,271,450

179,763906,351

407,700

1,493,815

19,809,860

48,286,322

19,669,083

87,765,266(440,895)(2,222,275)

2,045,404(617,766)

11,289,502

30,573,710

11,942,169

53,805,383

Adjustments(Note 1)

Amount in the
Quarterly
Consolidated
Statements of Income(Note 2)

Net sales
Sales to externalcustomers
Inter-segment sales
or transfers

455,800

86,727,250(1,493,815)－(1,038,015)

86,727,250

Segment income (loss)(466,994)(1,084,760)

Segment assets

6,640,807

60,446,190

Total

Notes:
1.
Adjustments is as follows(1)
Sales to external customers consisting of income related to new business development and real estate leasing and building management.
(2)
The segment income (loss) adjustment of (466,994) thousand yen consists of 1,130,385 thousand yen in incomes of holding companies(consolidated financial statement-submitting companies) and intersegment transaction eliminations of (1,597,379) thousand yen.
(3)
The adjustment of 6,640,807 thousand yen in segment assets includes 15,179,695 thousand yen in Company assets not allocated toindividual segments and intersegment transaction eliminations of (8,538,888) thousand yen. Company assets consist mainly of cash anddeposits, and investment securities and other non-current assets of holding companies (consolidated financial statement-submitting
companies).
2.
The segment income (loss) adjustment is based on the operating loss item in the Consolidated Statements of Income.

14