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, 2022
Filing date: May 13, 2022
Company name:IMAGICA GROUP Inc.
Stock exchange listing: Tokyo Prime
Securities code:
6879
URL:
https://www.imagicagroup.co.jp/en/
Representative:
Nobuo Fuse, President
Tel:+81-3-5777-6295
Inquiries:
Masakazu Morita, Director and Managing Executive Officer
Scheduled date for ordinary general meeting of shareholders:June 28, 2022
Scheduled date for commencement of dividend payment:
June 14, 2022
Expected date of filing of annual securities report:
June 28, 2022
Supplemental material of quarterly results:
Yes
Convening briefing of quarterly results:
Yes(Millions of yen, rounded down)
1. Consolidated Financial Results for the fiscal year ended March 31, 2022
(April 1, 2021 – March 31, 2022)(1) Consolidated Operating Results(Percentage represents change from the same period of the previous fiscal year.)Net sales

Operating income

Net income attributableto owners of the parent

Ordinary income

Millions of yen%

Millions of yen%

Millions of yen

Fiscal year ended Mar.2022

80,184

(7.5)

3,417

-

3,934

Fiscal year ended Mar.2021

86,727(7.8)(1,084)-(1,343)%

Millions of yen

%

-

2,729

(21.0)

-

3,454

420.2

(Note) Comprehensive income: Fiscal year 2022: 3,753 millions of yen /7.5%
Fiscal year 2021: 3,490 millions of yen /-%Net profit attributable to
Diluted net profit
owners of parent per attributable to owners of
shareparent per share
yen

Fiscal year ended Mar.2022

61.49

Fiscal year ended Mar.2021

77.89

ReturnTotal asset ordinary Operating incomeon equity net
income ratio
ratio
income

yen

%

%

%

-

9.3

5.9

4.3

13.2

(2.2)

(1.3)

(Reference) Equity in net income of affiliates: Fiscal year ended March 31, 2022 : (7) millions of yen
Fiscal year ended March 31, 2021 : (340) millions of yen(2) Consolidated Financial Position
Total assets

Net assets

Shareholders' equity
ratio to total assets

Net assets per share ofcommon stock

Millions of yen

Millions of yen%

yen

73,38434,02542.4

701.6360,446

29,83245.4

618.43

Cash flow from operating Cash flow from investing
activities
activities

Cash flow from financing
activities

Cash and cash equivalents
at the end of the period

As of March 31, 2022
As of March 31, 2021
(Reference) Shareholders’ equity:Year ended March 31, 2022: 31,149 millions of yen
Year ended March 31, 2021: 27,450 millions of yen(3) Consolidated Cash Flows

Millions of yen

Millions of yen

Millions of yen

Millions of yen

Fiscal year ended Mar.2022

7,414(3,928)(4,183)

6,419

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

1,469

6,856

English
2. Dividends
Dividend per share

Dividend
payout ratio(Consolidated)

Dividends to
Net Assets(Consolidated)yenMillions of yen

%

%

0.00

0.00

-

-

-

-

15.00

15.00

665

24.4

2.3

-

15.00

15.00

3rd
quarter- end

Year-end

yen

yen

-

0.00

-

-

0.00

-

0.00

yen

Fiscal year ended
Mar.2021
Fiscal year ended
Mar.2022
Fiscal year ending
Mar.2023 (Forecast)

Dividends
total (Annual)

2ndquarter- end

1stquarterendyen

Annual31.7

3. Consolidated forecast for the fiscal year ending March 31, 2023
(April 1, 2022 - March 31, 2023)(Percentage represents change from the same period of the previous fiscal year.)Net sales

Fiscal year ending
Mar.2023

Operating income

Net income
attributableto owners of theparentOrdinary income

Millions of yen%

Millions of yen%

88,000

9.7

3,600

5.3

Millions of yen%

3,300 (16.1)

Millions of yen

Earnings per
shareof common
stock
%

yen

2,100 (23.0)

47.30*Notes:(1) Material changes in subsidiaries during this period (changes in scope of consolidations resulting from change insubsidiaries): Yes(Name) IMAGICA Lab.Inc.
(2) Changes in accounting policies, accounting estimates and retrospective
1) Changes in accounting policies based on revisions of accounting standards: Yes
2) Changes in accounting policies other than ones based on revisions of accounting standard: Yes
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, 2022

44,741,467 shares

As of March 31, 2021

44,741,467 shares

345,938 shares

As of March 31, 2021

353,231 shares

44,392,807 shares

As of March 31, 2021

44,350,392 shares

2) Number of treasury stock at the end of fiscal year
As of March 31, 2022

3) Average number of shares
As of March 31, 2022

(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.

Imagica Group, Ltd. (6879), Financial Statements for Fiscal Year ending March 31, 2022

1. Overview of Operating Results(1) Overview of operating results for the current period① Overview for the current consolidated fiscal year
The environment surrounding the IMAGICA GROUP was marked by various changes including rapidly unfolding technologicalinnovation and changes in the social environment due to the Covid-19 pandemic. These factors caused changes in our imaging
related businesses with the emergence of the live streaming market and video streaming market. Seeing these changes asopportunities for growth, the Group devised the new mid-term plan "G-EST2025".
The fiscal year ending March 2022, the first fiscal year in the mid-term plan, was positioned as the year in which we would "build
the foundation for transforming into a highly profitable business" while adopting various approaches toward our four basic
strategies.
As a result, the Group's sales for the consolidated fiscal year were 80,184 million yen (down 7.5% year-over-year), due to factors
such as the sale at the end of the previous fiscal year of all shares in the SDI Media Group, Inc., which had been a consolidated
subsidiary, while operating income was 3,417 million yen (compared to an operating loss of 1,084 million in the same period of
the previous year) and ordinary income was 3,934 million yen (compared to an ordinary loss of 1,343 million yen in the same
period of the previous year). These results show that income increased significantly compared to the previous fiscal year. On theother hand, net income attributable to parent company shareholders for the current period was 2,729 million yen (down 21.0%
year-over-year) due to special losses including impairment losses of 120 million yen.
② Performance by business segment
Financial results by business segment are as follows.
This consolidated fiscal year one consolidated subsidiary (Imagica Live, Ltd.) which was previously in the Production Service
business segment was reclassified to the Imaging Systems & Solutions business segment. Comparisons and analyses for the current
consolidated fiscal year are based on conditions after the reclassification.
1) Content Creation business
The Content Creation segment this consolidated fiscal year saw sales of 21,674 million yen (up 9.4% year-over-year) andoperating income of 582 million yen (compared to an operating loss of 440 million yen in the same period of the previous year).
The theater movies category saw strong sales due to delivery of dramas for video streaming service providers in addition totheater movies and TV animations. Orders for production of commercials recovered and profitability improved. Besides video
streaming, live music event recordings also improved, while orders for making music videos were robust.
These developments resulted in improved Content Creation income and profits.

―

2 ―Imagica Group, Ltd. (6879), Financial Statements for Fiscal Year ending March 31, 2022
2) Production Services business
Production Services business for the current fiscal year saw sales of 42,080 million yen (down 10.4% year-over-year) with
operating income of 1,726 million yen (compared to an operating loss of 2,223 million yen for the same period of the previousyear).
In domestic E2E services*1, which saw a tie-up with Pixelogic Holdings LLC (PXL) consolidated from the previous fiscal year
and other developments, service orders for video streaming service providers (video file compression, conversion, and otherencoding, localization) performed well. Orders for digital cinema services for Japanese and non-Japanese works increased
significantly, as the number of feature films increased. . We continue to secure orders for post-production services for featurefilms and animation works.
In overseas E2E services, PXL continues to receive strong orders for localization services from video streaming service
providers, while sales of digital cinema services are on the rise due to the reopening of theaters in Europe and the US.
In post-production services for TV programs and TV commercials*2 sales of services for TV commercials did well and demandfor online submissions expanded as the advertising market recovered.
In game production and personnel services etc.*3, game production-related services enjoyed strong orders for 3D computer
graphics and debugging.
Sales for Production Services business overall decreased due to the sale at the end of the previous fiscal year of all shares in
the SDI Media Group, Inc., a consolidated subsidiary, but profits were up significantly due to strong domestic and overseas E2E
services and the effects of the structural reforms implemented in the previous fiscal year.
*1 E2E services: Refers to an integrated end-to-end (E2E) service that covers the entire post-production process for featurefilms, dramas, animation, and other audio/video content through to media services for localization (subtitling/dubbing) anddistribution of these through all kinds of media, including theaters, TV, and video streaming via the Internet.
*2 As part of the restructuring of the Production Services business, the description of services collectively called “media andpostproduction services” up to last fiscal year has been changed to “E2E services” and “post-production services for TV programs
and TV commercials, etc.”*3 The descriptions of “personnel services” and “digital content” used up to last fiscal year have been changed to “gameproduction, personnel services, etc.”*Overseas E2E services have a settlement date of December 31, so their performance from January 1, 2021 to December 31,
2021 is reflected in the current consolidated fiscal year.
3) Imaging Systems & Solutions business
The Imaging Systems & Solutions business in the current consolidated fiscal year saw sales of 17,639 million yen (down 16.0%
year-over-year) and operating income of 1,740 million yen (down 14.9% year-over-year).
Systems for broadcasting stations struggled to secure orders due to stagnating demand and restrictions on sales activities
due to Covid-19, and while sales of high-speed cameras struggled in Japan in the first half though recovered in the second, sales
continued strongly in the rest of Asia, and Europe and America. The online delivery system for TV commercials continued topost good sales in an expanding market, as sales of video and image processing LSI's continued strongly in Japan and overseas(particularly in the rest of Asia).
Imagica Live, Ltd., which changed segments this consolidated fiscal year to the Imaging Systems & Solutions business, posted
solid orders for sports-related live relays and archive video distribution operations, etc.
Mobile communications line sales were down due to the application of revenue recognition accounting standards. This
resulted in lower income and profits for the Imaging Systems & Solutions business.

―

3 ―Imagica Group, Ltd. (6879), Financial Statements for Fiscal Year ending March 31, 2022
(2) Overview of financial situation for the current period① Assets
Current assets increased 10,625 million yen (34.9%) to 41,066 million yen. This was primarily due to increases ininventory assets and accounts receivable.
Primarily as a result of increases in buildings and structures, fixed assets increased 2,312 million yen (7.7%) fromthe previous fiscal year to 32,317 million yen.
As a result, total assets increased to 12,938 million yen (21.4%) from the previous fiscal year to 73,384 million yen.
② Liabilities
Current liabilities increased 10,161 million yen (45.9%) from the previous fiscal year to 32,278 million yen mainly
due to increases in contract liabilities, notes and accounts payable.
Fixed liabilities decreased 1,415 million yen (16.7%) from the previous fiscal year to 7,079 million yen, primarily
due to a decrease in long-term loans payable.
As a result, total liabilities increased 8,745 million yen (28.6%) from the previous fiscal year to 39,358 million yen.
③ Net assets
Net assets increased to 4,192 million yen (14.1%) from the previous fiscal year to 34,025 million yen. The ratio of shareholder'sequity to total assets is now 42.4%.
(3) Overview of cash flow for the current perod
Cash and cash equivalents (hereafter, cash) at the end of this consolidated fiscal year decreased 437 million yen (6.4%) fromthe previous fiscal year to 6,419 million yen.
Cash flows this consolidated fiscal year and the reasons are as follows.
1) Cash flow from operating activities
Funds obtained through operating activities were 7,414 million yen (592 million were used in the same period of the previousyear).
This occurred despite a decrease in funds due to increased inventory assets primarily due to increasing contract liabilities,
notes and accounts payable.
2) Cash flows for investment activities
Funds used as a result of investment activities increased 2,564 million yen (187.9 %) from the previous consolidated fiscal
year to 3,928 million yen.
This was mainly caused by a decrease in funds due to the acquisition of tangible fixed assets.
3) Cash flow from financing activities
Funds used for finance activities amounted to 4,183 million yen (1,469 million yen acquired in the same
period of the previous year). Primarily this was caused by a decrease in funds due to the repayment of shortterm and long-term loans payable.
(Reference) Trends in cash flow related indicators
Fiscal year ending
March 2018

Fiscal year ending
March 2019

Shareholders' equity ratio to total
assets

41.7

38.9

40.3

45.4

42.4

Shareholders' equity ratio on amarket price basis (%)

76.0

45.5

25.1

39.7

43.3

Ratio of cash flow to interestbearing liabilities

358.2

10,625.2

162.4(2,282.9)

117.2

26.0

0.4

21.4

(1.7)

35.5

Interest coverage ratio

Fiscal year ending Fiscal year ending
March 2020
March 2021

*Shareholders' equity ratio: Shareholders' equity/total assets
Shareholders' equity ratio on a market price basis: Total market value of shares/total assets
Ratio of cash flow to interest-bearing liabilities: Interest-bearing liabilities/operating
cash flow interest coverage ratio: Operating cash flow/interest payments.
― 4 ―Fiscal year ending
March 2022

Imagica Group, Ltd. (6879), Financial Statements for Fiscal Year ending March 31, 2022
Notes: 1. All indicators are calculated using financial figures on a consolidated basis.
2. Market capitalization is calculated by multiplying the closing share price at the end of the period by the number of shares
outstanding (less treasury stock) at the end of the period.
3. Cash flow from operating activities is the cash flow from operating activities in the consolidated statements of cash flow.
Interest-bearing debt includes all liabilities on the consolidated balance sheets for which interest is paid. Interest payments
are based on the amount of interest paid in the consolidated statements of cash flows.
(4) Future outlook
The fiscal year ending March 2023, the second year of the G-EST2025 mid-term plan, is positioned as the year for "continuing
to build the foundation for conversion to a high profitability Group". Going forward, we intend to continue implementing the fourbasic strategies in the mid-term plan.
1. Expand “Global E2E” business・ Focus continues on services for video streaming service providers which remain strong
・ Make up-front investments for growth
2. Establish a new Live Entertainment business・ Strengthen alliances with key companies in hybrid live and high-definition live viewing
・ Develop new projects in experiential theme parks
3. Generate Additional Business Value in the Imaging Systems & Solutions business・ Expand revenue in high-speed cameras, online delivery system for TV commercials, and video networks for
cardiovascular equipment
・ Improve profits from systems for broadcasting stations
・ Expand optical measurements business4. Complete Transformation in the "Transformational business"
・ Promote business development using proprietary intellectual property
・ Expand content production for video streaming service providers
・ Further cost control over production of movie theater movies, TV animations and TV dramas
Our efforts using the basic strategies have resulted in consolidated performance forecasts for the fiscal year ending March 2023
projecting sales of 88,000 million yen, operating income of 3,600 million yen, ordinary income of 3,300 million yen and net income
attributable to parent company shareholders of 2,100 million yen. Operating income includes approximately 1,600 million yen ofamortization of goodwill and other expenses*. We assume that the impact of the novel coronavirus on business performance willcontinue for a certain period of time in the fiscal year ending March 2023, but the situation will gradually improve.
Specific details on the progress of the mid-term plan "G-EST 2025" will be disclosed at the financial results briefing to be heldon May 17, 2022.
(*Amortization of goodwill and other expenses equals amortization of good will plus amortization of intangible fixed assets
associated with M&A.)<Dividend policy>
The Group considers the return of profits to shareholders an important management objective. Our basic policy is to distribute
earnings in line with consolidated results. We target a consolidated payout ratio of 30% and aim to maintain stable dividends andincrease 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 generalpolicy is to take the special factor into consideration in determining dividends, after consideration of all aspects, including provisionof stable dividends to shareholders, future business development, and retained earnings.
Based on the above the year-end dividend (forecast) for the fiscal year ending March 2023 will be ¥15 per share.

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 the immediate future.
Meanwhile, the Group plans to appropriately decide the adoption of the International Financial Reporting Standards (IFRS) after
considering developments regarding accounting standards in Japan and abroad.

―5 ―Imagica Group, Ltd. (6879), Financial Statements for Fiscal Year ending March 31, 2022

3. Consolidated Financial Statements(1) Consolidated Balance Sheets(Thousands of yen)March 31, 2021

March 31 2022

AssetsCurrent assets
Cash and deposits

6,908,657

Notes and accounts receivable- trade

6,420,308

15,159,083－

Notes receivable - trade－353,710

Accounts receivable - trade－

18,321,433－

174,250

Inventories

6,499,812

13,613,658

Other

1,918,018

2,223,017

Contract assets

Allowance for doubtful accounts(44,735)(39,570)

30,440,836

41,066,808

Buildings and structures

3,065,365

5,448,367

Machinery and equipment

85,810832,609

1,705,819

1,705,807

475,187

303,675

Other

1,892,686

1,878,964

Total Property, plant and equipment

7,224,868

10,169,425

12,048,747

11,482,801

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

Land
Lease Assets

Intangible assets
Goodwill
Other2,464,367

2,352,770

Total Intangible assets

14,513,115

13,835,572

Investment securities

3,163,483

2,670,687

Lease and guarantee deposits

1,641,911

2,066,324

Deferred tax asset

2,154,662

3,051,529

Other

1,424,759

672,435

Allowance for doubtful accounts(117,446)(148,462)

Total Investments and other assets

8,267,369

8,312,513

Total Non-current assets

30,005,354

32,317,511

Total assets

60,446,190

73,384,320

Investments and other assets―

6 ―Imagica Group, Ltd. (6879), Financial Statements for Fiscal Year ending March 31, 2022
(Thousands of yen)March 31, 2021

March 31 2022

Liabilities
Current liabilities
Notes and accounts payable- trade5,416,309

8,884,981

Short-term loans payable

7,402,726

4,170,485

Accounts payable

1,212,857

1,824,055

Income taxes payable

211,609

850,863

Advances received

2,811,112－

Contract liabilities－

8,373,707－

41,401

Provision for bonuses

977,286

1,594,260

Provision for loss on order received

79,6603,717

Asset retirement obligations

Provision for loss on litigation

531,408584,309

Other

3,474,389

5,951,109

Total current liabilities

22,117,359

32,278,892

5,384,905

4,019,743

148,018

208,183

Non-current liabilities
Long-term loans payable
Long-term accounts payable-other
Net defined benefit liabilities
Deferred tax liabilities
Asset retirement obligations
Other

550,324

396,815

1,219,724

1,311,241627,722

636,938

565,200

507,067

Total non-current liabilities

8,495,895

7,079,990

Total Liabilities

30,613,255

39,358,882

Net assets
Shareholders’ equity
Capital stock

3,306,002

3,306,002

Capital surplus

13,238,832

13,223,561

Retained earnings

10,966,151

13,785,809

Treasury stock(361,659)(351,569)

Total shareholders’ equity

27,149,326

29,963,804

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

880,107610,074

Revaluation reserve for land

(17,933)(17,933)

Foreign currency translation adjustment(559,947)

595,800

Re-measurements of defined benefit plans(688)(2,483)

Total accumulated other comprehensive income

301,538

1,185,458

Stock acquisition right

11,484－Non-controlling Interests

2,370,585

2,876,174

Total Net assets

29,832,935

34,025,437

Total liabilities and Net assets

60,446,190

73,384,320―

7 ―Imagica Group, Ltd. (6879), Financial Statements for Fiscal Year ending March 31, 2022
(2) Consolidated Statements of Income and Statements of Comprehensive Income

Consolidated Statements of Income(Thousands of yen)

Fiscal year 2020

Fiscal year 2021

Net sales

86,727,250

80,184,157

Cost of sales

66,144,342

56,797,356

Gross profit

20,582,908

23,386,800

Selling, general and administrative expenses

21,667,668

19,969,029

Operating income (loss)(1,084,760)

3,417,771

Non-operating income
Interest income

211,506

1,203

Dividend income

35,62322,240Subsidy income

159,998

667,109

Foreign exchange gains

80,382

46,132

Other

123,818

138,752

Total non-operating income

611,329875,437

Interest expenses

339,794

204,657

Equity in losses of affiliates

340,681

7,224

Non-operating expenses

Other

189,668

146,855

Total non-operating expenses

870,144358,737(1,343,575)

3,934,471

Gain on sales of non-current assets

3,790

4,690

Gain on sales of investment securities－

414,702

Ordinary income (loss)
Extraordinary income

Gain on sale of shares of subsidiaries and associates
Compensation for forced relocation
Gain on step acquisitions
Other
Total extraordinary income

4,936,083

417,882

121,825

438,754

2,076,728－－

25,077

7,138,428

1,301,107

263－

50,714

102,982

Extraordinary losses
Loss on sales of non-current assets
Loss on retirement of non-current assets
Impairment loss

410,443

1,280,371

Business restructuring expenses

1,716,210－

Office transfer related expenses

21,166586,397

41,21467,513

Total extraordinary losses

Other

2,240,013

2,037,265

Net income before income tax

3,554,839

3,198,313

Income Taxes Current

774,733

1,351,725

Income Taxes Deferred (loss)(128,541)(1,018,408)

Income taxes

646,191

333,317

Net income

2,908,647

2,864,995

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

135,277

Net income attributable to owners of the parent

3,454,638

2,729,718―

8 ―Imagica Group, Ltd. (6879), Financial Statements for Fiscal Year ending March 31, 2022

Consolidated Statements of Comprehensive Income(Thousands of yen)

Fiscal year 2020

Net income

Fiscal year 2021

2,908,647

2,864,995

Valuation difference on available-for-sale securities

690,975(266,504)

Foreign currency translation adjustment(109,391)

1,156,758

393(1,795)581,977

888,458

3,490,624

3,753,454

Comprehensive income attributable to owners of parent

4,117,494

3,613,638

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

139,815

Other comprehensive income

Re-measurements of defined benefit plans
Total other comprehensive income
Comprehensive income(Breakdown)―

9 ―Imagica Group, Ltd. (6879), Financial Statements for Fiscal Year ending March 31, 2022
(3) Consolidated Statements of Cash Flow Statement(Thousands of yen)

Fiscal year 2020

Fiscal year 2021

Cash flows from operating activities
Income before income taxes

3,554,839

3,198,313

Depreciation and Amortization

2,757,520

2,059,069

Amortization of goodwill

871,375

1,406,351

Impairment loss

410,443

1,280,371

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

62,677

Increase (decrease) in allowance for doubtful accounts

7,930

22,559

Increase (decrease) in provision for bonuses(272,580)

585,000

Interest and dividend income(249,299)(23,443)

Subsidy income(159,998)(667,109)Interest expenses

339,794

204,657

Equity in (earnings) losses of affiliates

340,681

7,224(2,076,728)－－(414,702)(4,936,083)(417,882)

47,187

98,292(121,825)(438,754)

Office transfer related expenses

21,166586,397

Business restructuring expenses

1,716,210－

Decrease (increase) in notes and accounts receivable-trade(52,438)－

Loss (gain) on step acquisitions
Loss (gain) on sales of investment securities
Loss (gain) on sales of socks of subsidiaries and affiliates
Loss (gain) on sales of non-current assets
Compensation for forced relocation

Decrease (increase) in trade receivables and contract assets
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable-trade－(1,992,676)

2,741,123(6,770,229)

26,0132,431,249

Increase (decrease) in advance payment(1,635,027)－

Increase (decrease) in contract liabilities
Other, net
Subtotal－

5,393,275(792,888)

344,666

2,518,250

6,955,306

Interest and dividend income received

248,536

22,585

Subsidies received

159,535

22,617

Interest expenses paid

(354,142)(209,152)

Proceeds from compensation for forced relocation

121,825

1,858,926

Office transfer related expenses paid

(17,082)(530,888)

Business restructuring expenses paid

(1,400,653)(315,537)

Income taxes paid

(1,868,750)(389,105)(592,481)

7,414,751

Net cash provided by (used in) operating activities
Cash flows from investing activities
Payments into time deposits
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Proceeds from sale of investment securities
Purchase of shares of subsidiaries resulting in change in scope of
consolidation
Proceeds from sale of shares of subsidiaries resulting in change
in scope of consolidation
Payments of leasehold and guarantee deposits
Other, net
Net cash provided by (used in) investing activities

―

10 ―

(394,699)－(1,500,380)(3,996,470)

5,302

11,277(709,320)(612,816)

5,000

944,982(60,000)－

5,859,020

417,882(23,298)(546,979)(4,545,874)(146,229)(1,364,250)(3,928,354)

Imagica Group, Ltd. (6879), Financial Statements for Fiscal Year ending March 31, 2022
(Thousands of yen)

Fiscal year 2020

Fiscal year 2021

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

3,596,512(2,023,493)

Proceeds from long-term loans payable

4,939,764－

Repayment of long-term loans payable(4,048,685)(1,974,386)(221,365)－

Cash dividends paid
Proceeds from share issuance to non-controlling shareholders－

267,500

Others, net(2,797,224)(453,581)

Net cash provided by (used in) financing activities

1,469,000(4,183,962)

Effect of exchange rate change on cash and cash equivalents

2,723

211,125

Net increase (decrease) in cash and cash equivalents(485,008)(486,439)

Cash and cash equivalents at beginning of period

7,327,842

6,856,953

14,11948,6936,856,953

6,419,206

Increase (decrease) in cash and cash equivalents resulting fromchange in scope of consolidation
Cash and cash equivalents at end of period

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Imagica Group, Ltd. (6879), Financial Statements for Fiscal Year ending March 31, 2022
(4) Notes to consolidated financial statements(Notes on premise of a going concern)
None.
(Changes in accounting policy etc.)(Changes in accounting policy)(Changes accompanying application of Accounting Standards for Recognizing Revenue etc.)
The Accounting Standards for Recognizing Revenue, (Corporate Accounting Standard No. 29, March 31, 2020; hereafter"Revenue Recognition Accounting Standards") were applied from the start of this consolidated fiscal year. These standards
prescribe that payment expected to be received in exchange for a good or service is recognized as revenue at the point in time
when control of the good or service is transferred to the customer. This resulted in the following changes to recognition ofrevenue.
(1) Recognition of revenue from product export sales
Previously the Company recognized revenue from export sales of imaging equipment etc., at the time of export customs
clearance. This has changed and the revenue is now recognized when it is determined that control of the asset has beentransferred to the customer in accordance with the terms of the transaction.
(2) Revenue recognition for transactions with multiple performance obligations in one contract
In our Content Creation business, in the case of transactions with multiple performance obligations in a single contract wepreviously recognized revenue when all performance obligations were completed if they were highly interrelated. Now
however, in the case of items for which the service is determined to be complete after the customer conducts an acceptanceinspection, we have changed to a method in which that determination is made for each individual performance obligationand the revenue is deemed received at the point in time at which the inspection is completed.
(3) Revenue recognition for transactions conducted by agent
Previously we recognized revenue from sales of mobile communications lines based on the total amount received fromthe customer. However, as a result of determining the role (principal or agent) used in provision of goods or services to thecustomer, we have changed to a method that recognizes revenue as the net amount obtained after deducting amounts paid
to the supplier from the total.
When applying the Revenue Recognition Accounting Standards an amount representing the cumulative effect after
retroactive application of the new accounting policy prior to the start of the current fiscal year is added to or subtracted fromretained earnings at the start of the current fiscal year in accordance with the requirements of the proviso of paragraph 84 of
the Standards on how to handle the transition.
However applying the provisions of paragraph 86 of the Standards, the new accounting policy was not applied retroactively
to contracts for which almost the entire amount of revenue was recognized according to the previous method that was being
used before the start of the current consolidated fiscal year.
The "Notes and accounts receivable" that were stated in "Current assets" in the consolidated balance sheets for the previous
consolidated fiscal year, are, from this consolidated fiscal year, shown included in "Notes receivable", "Accounts receivable", and"Contract assets" and are shown as "Current liabilities".
"Advances received" are included under "Contract liabilities" from this fiscal year onward. In addition, while in the consolidated
statements of cash flow for the previous fiscal year, the "increase/decrease in notes and accounts receivable-trade" (increase)are stated in the "cash flow from operating activities", from this consolidated fiscal year these are included in "increase/decreaseof notes and accounts receivable-trade and contract assets" (increase). The "increase/decrease of advanced payments"(decrease) are included in "increase/decrease of contract liabilities" (decrease) from this consolidated fiscal year.
However in accordance with the provisions for transitional treatment prescribed in the Revenue Recognition AccountingStandards paragraph 89-2, no reclassification has been made for the previous consolidated fiscal year using the new statement
method.
As a result the retained earnings at the start of this consolidated fiscal year decreased 9,934 thousand yen. Also, comparedto the situation prior to application of the Revenue Recognition Accounting Standards, sales for this consolidated fiscal year
decreased 5,947,684 thousand yen while the cost of sales decreased 5,936,563 thousand yen, with operating income, ordinary
income and net profit before tax adjustments etc. each decreasing 11,120 thousand yen.
The impact on per-share Information is stated in the relevant sections.

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Imagica Group, Ltd. (6879), Financial Statements for Fiscal Year ending March 31, 2022
(Changes in line with application of "Accounting Standards for Calculation of Market Value")"Accounting Standards for Calculation of Market Value" (Corporate Accounting Standard No. 30, July 4, 2019; hereafter"Market Value Calculation Accounting Standards") were applied from the start of this consolidated fiscal year. It was decided
that going forward the new accounting policy that prescribes market value accounting standards etc. would be applied inaccordance with the transitional treatment prescribed in the Market Value Accounting Standards paragraph 19 andparagraph 44-2 of the Financial Product Accounting Standards (Corporate Accounting Standard No. 10, July 4, 2019). Thischange has not impacted the consolidated financial statements.
(Changes in accounting policy that are difficult to distinguish from changes in accounting estimates)
Previously, the Company and its domestic consolidated subsidiaries mainly used the declining balance method for
depreciation and amortization of tangible fixed assets (excluding leased assets), but from this consolidated fiscal year wechanged to the straight-line method.
Responding to the transition from an era in which state-of-the-art equipment functionality and editing services were ourstrengths to an era that demands consistent performance of complex tasks in a secure environment for simultaneous
worldwide distribution, prior to the fiscal year ending March 2021 the Group made changes to its overseas strategy, carriedout structural reforms and a whole Group reorganization and began making more effective use of fixed assets, while
reinvigorating our human resources by creating an office environment suited to new ways of working.
Taking implementation of the above measures as an opportunity, we examined the actual use of our tangible fixed assets.
The result led us to believe that the risk of technological and economic obsolescence was low. Further, based on the new GEST2025 medium-term management plan we expect our assets to continue stable operations over their useful lives. We
therefore decided to adopt the straight-line depreciation method which distributes costs uniformly, more rationally reflecting
how those assets are used.
The changes we implemented brought results. Operating income, ordinary income and net profit before tax adjustments
etc. for this period each increased 143,917 thousand yen compared to what the previous method would have produced.

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Imagica Group, Ltd. (6879), Financial Statements for Fiscal Year ending March 31, 2022
(Segment information and other items)[Segment information]
1. Overview of reportable segments(1) Method for determining reportable segments
The reportable segments of the Group are constituent units of the Company and its consolidated subsidiaries for which
separate financial information is available and which are subject to periodic review by the Board of Directors for the purpose ofdetermining the allocation of management resources and evaluating performance.
The Group is engaged in a wide range of businesses in the Content Creation field, and has three reportable segments: Content
Creation business, Production Services business and Imaging Systems & Solutions business.
The Content Creation business plans and produces movie theater movies, TV dramas, animations, and web-related videos. It also
produces commercials and Internet and other advertisements, and is involved in publishing and production of music videos as wellas providing integrated production services in the space surrounding video such as live music and events.
The Production Services business segment offers one-stop global video technology services from shooting to editing anddistribution, including services such as shooting, relays, program/commercial/PR/etc., video and audio editing, digital synthesis,
virtual effects and computer graphics production, digital cinema, localization and distribution, as well as offering game production
and personnel services.
The Imaging Systems & Solutions business segment operates in areas such as developing, manufacturing, importing, selling,
and providing maintenance services for cutting edge hardware and software related to video and imaging and developing andselling video and image processing LSIs.
(2) Note concerning changes in reportable segments(Reporting Segments changed)
From this consolidated fiscal year one consolidated subsidiary (Imagica Live, Ltd.) that had previously been classified under
Production Service business was reclassified into the Imaging Systems & Solutions business segment.
Relevant "information for each reportable segment including net sales, profit or loss, assets, liabilities, and other items" forthe previous consolidated fiscal year is disclosed based on the new classification.
(Changes in accounting policy)
As described in "Changes in accounting policy", the Revenue Recognition Accounting Standards were applied from the startof this consolidated fiscal year and as the method of accounting used for recognizing revenue was changed, the method for
calculating profits and losses for each business segment was changed in the same manner.
As a result of these changes, in comparison to accounting under the previous method, net sales for this consolidated fiscal
year increased 70,401 thousand yen in the Content Creation business segment, decreased 12,612 thousand yen in the
Production Services business segment and decreased 6,005,472 thousand yen in the Imaging Systems & Solutions businesssegment. Profits increased 1,492 thousand yen in the Content Creation business segment and decreased 12,612 thousand yen
in the Production Services business segment.
(Change in depreciation and amortization method used for tangible fixed assets)
As stated in "Changes in accounting policy that are difficult to distinguish from changes in accounting estimates", theCompany and its domestic consolidated subsidiaries have changed the depreciation and amortization method for tangible fixed
assets (excluding leased assets) from the declining-balance method to the straight-line method from the current fiscal year.
As a result of this change this consolidated fiscal year profits increased 10,542 thousand yen in the Content Creation businesssegment, 42,347 thousand yen in the Production Services business segment, 60,085 thousand yen in the Imaging Systems &Solutions business segment, and 30,941 thousand yen as "Adjustments".
2. Method for calculating sales, profit or loss, assets, liabilities, and other items for each reportable segment
The accounting methods for reportable business segments are generally the same as those used in consolidated financial
statements.
Profits of reportable segments are based on operating income.
Intersegment sales or transfers are based on prevailing market prices.

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Imagica Group, Ltd. (6879), Financial Statements for Fiscal Year ending March 31, 2022
3. Information concerning sales, profit or loss, assets, liabilities and other items
Previous consolidated fiscal year (from April 1, 2020 to March 31, 2021)(Thousands of yen)Content Creation

Imaging Systems &Solutions

Production
Services

Sub total

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

19,630,096

46,037,741

20,603,612

86,271,450

179,763936,209403,158

1,519,131

19,809,860

46,973,950

21,006,771

87,790,582(440,895)(2,223,448)

2,046,577(617,766)

Adjustments(Note 1)

Amount in the
Quarterly
Consolidated
Statements ofIncome (Note 2)

Net sales
Sales to externalcustomers
Inter-segment
sales or transfers
Total

455,800

86,727,250(1,519,131)－(1,063,331)

86,727,250

Segment income(466,994)(1,084,760)(loss)
Notes: 1. Adjustments are as follows.
(1) Sales to outside customers Include new business-related income and real estate rental income.
(2) The (466,994) thousand yen segment profit or loss (loss) adjustment consists mainly of a 1,130,385 thousand yen profit
related to the Company and (1,597,379) thousand yen of elimination of intersegment transactions.
(3) The amount of 6,615,705 thousand yen as an adjustment for segment assets includes corporate assets of 15,179,695
thousand yen not allocated to reportable segments and elimination of intersegment transactions amounting to(8,563,990) thousand yen. Corporate assets consist mainly of cash and deposits and fixed assets such as investment
securities.
(4) An adjustment for depreciation and amortization of 113,279 thousand yen includes 136,418 thousand yen
depreciation and amortization related to corporate assets and elimination of intersegment transactions of (23,138)
thousand yen.
(5) An adjustment of 46,273 thousand yen increasing tangible and intangible fixed assets includes acquisition of corporate
assets of 47,117 thousand yen and elimination of intersegment transactions of (844) thousand yen.
2. Segment profit and loss (loss) is adjusted with operating loss in the consolidated financial statements.

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Imagica Group, Ltd. (6879), Financial Statements for Fiscal Year ending March 31, 2022
Current consolidated fiscal year (April 1, 2021 to March 31, 2022)(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

21,328,985

40,902,341

16,981,276

79,212,603

345,204

1,178,645

658,7102,182,560

21,674,190

42,080,986

17,639,986

81,395,164

582,216

1,726,100

1,740,806

4,049,124

Adjustments(Note 1)

Amount in the
Quarterly
Consolidated
Statements ofIncome (Note 2)

Net sales
Sales to externalcustomers
Inter-segment
sales or transfers
Total

971,553

80,184,157(2,182,560)－(1,211,006)

80,184,157(631,352)
Notes: 1. Adjustments are as follows.

3,417,771

Segment income(1) Sales to outside customers Include new business-related income and real estate rental income.
(2) The adjustment of segment profits amounting to (631,352) thousand yen mainly includes profits of 666,930 thousand
yen related to the Company and elimination of intersegment transactions of (1,298,283) thousand yen(3) The 1,155,918 thousand yen adjustment for segment assets includes corporate assets of 15,472,585 thousand yen notallocated to a reportable segment and inter-segment elimination of (14,316,666) thousand yen. Corporate assets
consist mainly of cash and deposits and fixed assets such as investment securities.
(4) The 92,419 thousand yen adjustment for depreciation and amortization includes depreciation and amortization of
111,104 thousand yen related to corporate assets and elimination of inter-segment transactions of (18,684) thousandyen.
(5) An adjustment increase in tangible and intangible fixed assets of 267,853 thousand yen includes acquisition of
corporate assets of 270,299 thousand yen and elimination of inter-segment transactions of (2,446) thousand yen.
2. Segment profits are adjusted with operating income in the consolidated statements of income.

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Imagica Group, Ltd. (6879), Financial Statements for Fiscal Year ending March 31, 2022
(Per-share information)
Fiscal Year 2021
(April 1, 2021 to March 31, 2022)

Fiscal Year 2020
(April 1, 2020 to March 31, 2021)
Net assets per share

618.43 yen

701.63 yen

Net income per share

77.89 yen

61.49 yen

Notes: 1. As there are no residual shares that could dilute stock value diluted net income per share is not shown.
2. As stated in "Changes in accounting policy", the "Revenue Recognition Accounting Standards" have been applied. This
had only a minor impact on net income per share for the current fiscal year.
3. Net income per share is calculated on the following basis.
Fiscal Year 2020
(April 1, 2020 to March 31, 2021)

Fiscal Year 2021
(April 1, 2021 to March 31, 2022)

Net income per share
Net income (thousands of yen) attributable to parent
company shareholders

3,454,638

2,729,718

Amount not attributable to ordinary shareholders(thousands of yen)－－

Net income (thousands of yen)
attributable to shareholders of theparent company for common stock

3,454,638

2,729,718

Average number of shares of common stock during
period (shares)

44,350,392

44,392,807
Stock acquisition rights by resolutionof the Board of Directors on July 11,2019

Summary of potential stock not included in thecalculation of diluted net income per share due tothe absence of a dilutive effect.

Stock acquisition rights by resolutionof the Board of Directors meeting ofJuly 11, 2019
Third series of stock acquisition rights
42,901 stock acquisition rights(4,290 thousand shares of common
stock)

Third series of stock acquisition rights
42,901 stock acquisition rights(4,290 thousand shares of common
stock)

Fourth series of stock acquisition
40,000 stock acquisition rights(4,000 shares of common stock)(4,000 shares of common stock)

Fourth series of stock acquisitionrights 40,000 stock acquisition rights
The above stock acquisition rights
were acquired and canceled on
All have been acquired and canceled.

4. Basis for calculating net assets per share is as follows.
Fiscal Year 2020
(April 1, 2020 to March 31, 2021)

Fiscal Year 2021
(April 1, 2021 to March 31, 2022)

29,832,935

34,025,437

2,382,070

2,876,174(of which, stock acquisition rights (thousands of yen))(11,484)－(of which, non-controlling interest (thousands of yen))(2,370,585)(2,876,174)

Net assets at period end related to common shares(thousands of yen)

27,450,865

31,149,262

Number of shares of common stock at end of periodused for calculating net assets per-share

44,388,236

44,395,529

Total net assets (thousands of yen)Amount deducted from total net assets(thousands of yen)

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Imagica Group, Ltd. (6879), Financial Statements for Fiscal Year ending March 31, 2022
(Significant subsequent events)
No relevant matters to be noted.
4. Others, net(1) Changes in executives
Will be disclosed when decided.

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