Financial Results for the Fiscal Year Ended March 31, 2021 [Japan GAAP](Consolidated)
May 14, 2021
Company name: Kokusai Pulp & Paper Co., Ltd.
Stock exchange listing: Tokyo Stock Exchange
Code number: 9274
URL: https://www.kppc.co.jp/
Representative: Tadashi Kurihara, Director of the Board, President & Executive Officer
Contact: Tatsuhiko Tachibana, Managing Executive Officer and General Manager of Administration Division
Phone: +81-3-3542-4169
Scheduled date of Ordinary General Meeting of Shareholders: June 29, 2021
Scheduled date of commencing dividend payments: June 30, 2021
Scheduled date of filing the securities report: June 29, 2021
Preparation of supplementary explanatory materials for financial results: Yes
Convening financial results briefing: Yes(Amounts of less than one million yen are rounded down.)
1. Consolidated Financial Results for the Fiscal Year Ended March 31, 2021 (From April 1, 2020 to March 31,
2021)(1) Consolidated Operating Results(Percentages represent year-on-year changes.)
Profit attributable to
Net sales
Operating profit
Ordinary profit
owners of parent
Million yen

Fiscal year ended
March 31, 2021
430,404
Fiscal year ended
March 31, 2020
381,397(Note) Comprehensive income:%Million yen

12.8(9,035)%–

Million yen(12,041)%

Million yen

%

1,416

15.0

1,232

(50.7)–(0.9)
1,850 (18.9)
2,194 (12.9)
Fiscal year ended March 31, 2021: ¥(1,736) million [–%]
Fiscal year ended March 31, 2020: ¥(2,189) million [–%]

Profit per share

Profit per share- diluted

Yen

Yen

Profit toshareholders’equityTotal assets
Ordinary profit
marginNet sales
Operating profit
margin%%%Fiscal year ended
March 31, 2021
19.70
–
3.1
(5.2)
Fiscal year ended
March 31, 2020
16.86
–
2.5
1.2
(Reference) Share of profit/loss of entities accounted for using equity method
Fiscal year ended March 31, 2021: ¥(2,452) million
Fiscal year ended March 31, 2020: ¥(246) million(2) Consolidated Financial Position
Total assets
Fiscal year ended
March 31, 2021
Fiscal year ended
March 31, 2020
(Reference) Equity:

Net assets

Equity ratio

(2.1)
0.5

Net assets per share

Million yen

Million yen%

Yen

275,119

43,58115.8

605.71

189,317
47,277
24.9
Fiscal year ended March 31, 2021: ¥43,489 million
Fiscal year ended March 31, 2020: ¥47,184 million

649.48

(3) Consolidated Cash FlowsNet cash provided by(used in) operating
activities

Net cash provided by(used in) investing
activities

Net cash provided by(used in) financing
activities

Cash and cash
equivalents at end of
periodMillion yen

Million yen

Million yen

Million yen(6,472)

23,046

6,597

30,543

4,905(5,400)

5,504

7,775

Fiscal year ended
March 31, 2021
Fiscal year ended
March 31, 2020
2. Dividends

Annual dividends
1st quarterend

2ndquarterend

3rdquarterend

Year-end

Yen

Yen

Yen

Yen

Total
Yen

Total
amountof annualdividends

Dividend
payoutratio(consolid
ated)

Ratio ofdividends to net
assets(consolid
ated)Million yen%%

Fiscal year ended
–
0.00
–
10.00
10.00
741
59.3
1.5
March 31, 2020
Fiscal year ended
–
0.00
–
10.00
10.00
732
50.8
1.6
March 31, 2021
Fiscal year ending
March 31, 2022
–
0.00
–
10.00
10.00
–
(Forecast)(Note) The total amount of dividends for the fiscal year ended March 31, 2021 includes dividends of 14 million yen
on the Company’s shares owned by the executive compensation BIP trust.
3. Consolidated Financial Results Forecast for the Fiscal Year Ending March 31, 2022 (April 1, 2021 - March
31, 2022)(Percentages represent year-on-year changes.)
Profit attributable
Basic earnings
Net sales
Operating profit
Ordinary profit
to owners ofper share
parentMillion yen%

Million yen%

Million yen%

Million yen%

Yen

Full year
534,000
–
4,900
–
3,400
–
2,300
–
32.03
(Note) Effective from the beginning of the fiscal year ending March 31, 2022, the Company will adopt the“Accounting Standard for Revenue Recognition” (Corporate Accounting Standard No. 29) and others, andtherefore the consolidated results forecast is for amounts after the adoption of the said accounting standard
and others, and does not include any year-on-year percentage changes.
* Notes:(1) Changes in significant subsidiaries during the fiscal year: Yes(Changes in specified subsidiaries resulting in changes in scope of consolidation)
Newly included: 26 (Company name) Antalis S.A.S.(*), Antalis Limited, Antalis France,
Antalis Gmbh, Antalis Austria Gmbh, Antalis AG,
Antalis Portugal, S.A., Antalis Iberia, S.A., S.A. Antalis,
Antalis Oy, Antalis S.R.O.,
Antalis Poland Spolka Z Ograniczona Odpowiedzialnoscia,
Antalis S.A.(Romania), Inversiones Antalis Holdings SPA,
Antalis Chile SPA, Antalis Asia Pacific Pte. Ltd.,
Antalis Do Brasil Produtos para a industria grafica Ltda,
Antalis Group, Antalis Overseas Holdings Limited,
Antalis Holdings Limited, Antalis Participations,
Antalis Investments, Antalis Holding,Antalis Group (Holdings) Limited, Map Merchant Group Limited,
Map Merchant Holdings Gmbh
Excluded: 3 (Company name)

Spicers Holdings (Asia) Pte Ltd, Antalis Investments, Antalis Holding*It changed its name from Antalis S.A. to Antalis S.A.S. due to the change of its corporate form effective
January 1, 2021.
(2) Changes in accounting policies, changes in accounting estimates and retrospective restatement
1) Changes in accounting policies due to the revision of accounting standards: None
2) Changes in accounting policies other than 1) above: None
3) Changes in accounting estimates: None
4) Retrospective restatement: None
(3) Total number of issued and outstanding shares (common shares)
1) Total number of issued and outstanding shares at the end of the period (including treasury shares):Fiscal year ended March 31, 2021:
75,077,406 sharesFiscal year ended March 31, 2020:
75,077,406 shares2) Total number of treasury shares at the end of the period:
Fiscal year ended March 31, 2021:
3,278,133 sharesFiscal year ended March 31, 2020:
2,427,465 shares
3) Average number of shares during the period:
Fiscal year ended March 31, 2021:
Fiscal year ended March 31, 2020:

71,917,550 shares
73,094,072 shares(Reference) Summary of Non-Consolidated Financial Results
1. Non-Consolidated Financial Results for the Fiscal Year Ended March 31, 2021 (From April 1, 2020 to March 31,
2021)(1) Non-Consolidated Operating Results(Percentages represent year-on-year changes.)
Net sales
Operating profit
Ordinary profit
ProfitMillion yen%

Million yen%

Million yen%

Million yen%

253,111(13.1)

1,490(20.1)(5,876)–(1,820)–291,310

(7.1)

1,864

(10.8)

2,182

(4.5)

1,273

(45.6)

Fiscal year ended
March 31, 2021
Fiscal year ended
March 31, 2020

Profit per share
Fiscal year ended
March 31, 2021
Fiscal year ended
March 31, 2020

Yen

Yen

(25.31)

–

17.42

–

(2) Non-Consolidated Financial Position
Total assets
Fiscal year ended March
31, 2021
Fiscal year ended March
31, 2020

Profit per share diluted

Net assets

Equity ratio

Net assets per share

Million yen

Million yen%

Yen152,378

43,64728.6

607.90152,928

45,46829.7

625.86(Reference) Equity:

Fiscal year ended March 31, 2021: ¥43,647 million
Fiscal year ended March 31, 2020: ¥45,468 million* These financial results are outside the scope of audits by certified public accountants or auditing firms.
* Explanation of the proper use of financial results forecast and other notes(Cautionary notes regarding forward-looking statements)
The results forecast and other forward-looking statements contained in this document are based on the information
currently available to the Company and certain assumptions deemed to be reasonable, and are not intended as aguarantee that the Company will achieve them. Actual results may differ significantly due to various factors. For
assumptions for the results forecast and points to consider in utilizing them, please see “1. Overview of Operating
Results, etc., (4) Future Outlook” of the attachments.
(How to obtain supplementary explanatory materials for financial results)
The Company plans to hold a briefing for institutional investors and analysts on Tuesday, June 8, 2021. The
explanatory materials for financial results distributed at the briefing will be posted on the Company’s website assoon as it is held.

Table of Contents of Attachments

1.

Overview of Operating Results, etc. ................................................................................................................... 2(1) Overview of Operating Results for the Current Fiscal Year ....................................................................... 3(2) Overview of Financial Position for the Current Fiscal Year ....................................................................... 3(3) Overview of Cash Flows for the Current Fiscal Year ................................................................................. 3(4) Future Outlook............................................................................................................................................ 4(5) Basic Policy for Profit Distribution and Dividends for the Current Fiscal Year and Next Fiscal Year....... 4

2.

Basic Approach to the Selection of Accounting Standards................................................................................. 53.

Consolidated Financial Statements and Key Notes ............................................................................................ 6(1) Consolidated Balance Sheet ....................................................................................................................... 6(2) Consolidated Statements of Income and Comprehensive Income .............................................................. 8(3) Consolidated Statement of Changes in Equity ..........................................................................................11(4) Consolidated Statement of Cash Flows .................................................................................................... 13(5) Notes to Consolidated Financial Statements ............................................................................................ 15(Notes on Going Concern Assumption) .................................................................................................... 15(Significant Matters Forming the Basis in Preparation of Consolidated Financial Statements)............... 15(Additional Information) .......................................................................................................................... 17(Information Related to Consolidated Balance Sheet).............................................................................. 17(Information Related to Consolidated Statement of Income) ................................................................... 18(Information Related to Consolidated Statement of Changes in Equity).................................................. 19(Information Related to Consolidated Statement of Cash Flows) ............................................................ 21(Information Related to Business Combination, Etc.) .............................................................................. 21(Segment Information, etc.) ...................................................................................................................... 25(Per-share information)............................................................................................................................. 27(Significant Subsequent Events) ............................................................................................................... 28

1

1.

Overview of Operating Results, etc.

(1) Overview of Operating Results for the Current Fiscal Year
The Japanese economy in the fiscal year under review experienced a significant downturn. This was the resultof a decline in domestic demand centering on personal consumption and external demand centering on exports
caused by a substantial restriction on socioeconomic activities such as the declaration of a state of emergency
issued by the government twice due to the spread of COVID-19 worldwide. In the pulp and paper industry,
to which the Company belongs, domestic demand for paper and paperboard has shown negative growth since2011. However, the pace of decline accelerated in the fiscal year under review because of the COVID-19
disaster, and the negative range exceeded that of the period immediately after the 2008 financial crisis (called
Lehman shock in Japan).
On the other hand, the global economy also experienced a sharp downturn significantly influenced by the
restriction on economic activities due to the spread of COVID-19. In Europe, the influence of large-scaleurban blockades and other events following the another wave of infections in various countries meant that
consumption fell sharply and the economy continued to experience a significant downturn. In China, as aresult of the early suppression of COVID-19, the economy recovered quickly, and real GDP in the fourth
quarter of 2020 (Oct.-Dec.) increased by 6.5% year-on-year, showing positive growth for the full year. In
Australia, as in China, the expansion of COVID-19 was suppressed at an early stage, and the economy wasboosted mainly by personal consumption. The real GDP growth rate in the fourth quarter of 2020 (Oct.-Dec.)
exceeded market expectations, showing the highest growth among the major countries.
Under these circumstances, the Group’s consolidated net sales for the fiscal year under review were 430,404
million yen (up 12.8% year-on-year). With regard to profit and loss, gross profit increased significantly owing
to the acquisition of overseas subsidiaries in the previous and fiscal year under review. However, a provisionof allowance for doubtful accounts of 11,627 million yen was recorded due to delays in the collection of tradereceivables related to the filing for provisional liquidation by business partners in Hong Kong and China.
Consequently, operating loss was 9,035 million yen (compared with operating profit of 1,850 million yen in
the previous fiscal year) and ordinary loss was 12,041 million yen (compared with ordinary profit of 2,194
million yen in the previous fiscal year). As a result of the recording of a gain on sales of real estate, profit
attributable to owners of parent was 1,416 million yen (up 15.0% year-on-year).
Net sales by business segment are as follows.
<Wholesale pulp and paper, domestic locations>
In the paper field, amid a shift away from paper caused by digitalization, sales of comic books and educationalreference materials were strong due to demand from people staying at home associated with the spread of
COVID-19. However, demand for flyers, etc. decreased due to the cancelation of events, and both sales
volume and net sales were below the level of those in the previous fiscal year.
In the paperboard field, sales of containerboard base paper, particularly for beverage packaging materials,
remained relatively strong. But sales of white paperboard decreased due to a loss in inbound demand, andsales volume and net sales decreased slightly from the previous fiscal year.
In the paper materials field, due to effects of a decrease in the volume of waste paper generated accompanying
weaker demand for paper and a shortage of containers caused by disruptions in maritime transportation, bothsales volume and net sales decreased slightly from the previous fiscal year. Owing to an increase in demandfor household paper in early spring, the sales volume of pulp increased from the previous fiscal year.
As a result of the above, net sales of the wholesale pulp and paper, domestic locations, were 252,104 million
yen (down 13.3% year-on-year) and segment profit was 3,710 million yen (down 9.2% year-on-year).
<Wholesale pulp and paper, overseas locations>
Overseas locations were affected by the lockdown following the spread of COVID-19 and a shortage ofcontainers caused by disruptions in maritime transportation. However, owing to the full-year contribution of2

the financial results of Spicers Limited from the fiscal year under review and the acquisition of Antalis S.A.S.,
which operates mainly in Europe and South America, in the second half of the fiscal year, sales volume andnet sales increased significantly from the previous fiscal year.
In Europe, while the spread of COVID-19 had a significant impact on the graphic paper business and thesignage & visual communication business, the packaging business remained strong. In Australia, thepackaging business remained strong, and the signage & visual communication business recovered to the level
before the impact of COVID-19. In China, where COVID-19 had been quickly suppressed, sales haverecovered, reflecting stronger demand for containerboard driven by an economic recovery. However, as aresult of the recording of a provision of allowance for doubtful accounts due to delays in the collection of
trade receivables related to the filing for provisional liquidation by business partners in Hong Kong and China,
a significant operating loss was recorded.
As a result of the above, net sales of the wholesale pulp and paper, overseas locations, were 177,052 million
yen (up 97.9% year-on-year) and segment loss was 10,557 million yen (compared with segment profit of 179
million yen in the previous fiscal year).
<Real estate leasing>In the office building market in major cities throughout Japan, the average vacancy rate rose. This was theresult of a movement to reduce office space after the summer due to changes in work patterns such as
teleworking, affected by the spread of COVID-19. Accordingly, the average rent in the Tokyo area started to
decline, and close attention needs to be paid to other areas.
In the Group, owing to the full operation of the KPP Yaesu Building, which is the main property, and higher
unit rents resulting from the replacement of some tenants, net sales increased year-on-year.
As a result of the above, net sales of the real estate leasing were 1,247 million yen (up 2.9% year-on-year)
and segment profit was 629 million yen (up 6.6% year-on-year).
(2) Overview of Financial Position for the Current Fiscal Year
(Assets)
Total assets at the end of the fiscal year under review were 275,119 million yen, up 85,802 million yen fromthe end of the previous fiscal year. This was mainly due to an increase in trade receivables and an increase inmerchandise resulting from the acquisition of Antalis S.A.S.
Liabilities increased by 89,497 million yen to 231,537 million yen from the end of the previous fiscal year.
This was mainly due to an increase in trade payables and short-term borrowings resulting from the acquisitionof Antalis S.A.S. and an increase in long-term borrowings accompanying the purchase of shares ofsubsidiaries.
(Net assets)
Net assets decreased by 3,695 million yen to 43,581 million yen from the end of the previous fiscal year, andthe equity ratio decreased by 9.1 points to 15.8% from the end of the previous fiscal year. This was mainly
due to a decrease in foreign currency translation adjustment caused by the yen’s appreciation andremeasurements of defined benefit plans.
(3) Overview of Cash Flows for the Current Fiscal Year
Cash and cash equivalents at the end of the fiscal year under review (hereinafter referred to as “funds”) were30,543 million yen, up 22,768 million yen from the end of the previous fiscal year. This was mainly a resultof appropriation of funds acquired through profit before income taxes, sales of property, plant and equipment,
and increased short-term borrowings to purchase shares of subsidiaries and purchase treasury shares.

3

Funds used in operating activities totaled 6,472 million yen (compared with funds provided by operating
activities of 4,905 million yen for the previous fiscal year). This was mainly due to a decrease in trade payables.
Funds provided by investing activities totaled 23,046 million yen (compared with funds used in investing
activities of 5,400 million yen for the previous fiscal year). This was mainly due to proceeds from sales ofproperty, plant and equipment and proceeds from purchase of shares of subsidiaries resulting in a change inthe scope of consolidation.
Funds provided by financing activities totaled 6,597 million yen (compared with funds provided by financing
activities of 5,504 million yen for the previous fiscal year). This was mainly due to an increase in short-termborrowings and proceeds from long-term borrowings.
(4) Future Outlook
Looking ahead, the global economy is expected to continue on a recovery trend, owing to the eased restrictions
along with the spread of vaccinations against COVID-19, and supported by fiscal and monetary policies,
although they vary depending on the country, region and industry. In Japan, the economy is expected to headtoward a gradual recovery due to the penetration of measures to prevent the spread of COVID-19 and theprogress of vaccinations. But it remains to be seen when the spread of infections will cease and the economic
uncertainty is expected to persist.
Under these circumstances, the consolidated results forecast for the fiscal year ending March 31, 2022 is asfollows.
Net sales
Results forecast for
the fiscal year ending
March 31, 2022
Operating results forthe fiscal year ended
March 31, 2021
Changes

Operating profit

Ordinary profit

Profit attributableto owners of parent

Million yen

Million yen

Million yen

Million yen

534,000

4,900

3,400

2,300

430,404(9,035)(12,041)1,416

103,596

13,935

15,441884

In the fiscal year ended March 31, 2021, we recorded significant one-time losses such as provision ofallowance for doubtful accounts related to the filing for provisional liquidation by business partners and shareof loss of entities accounted for using the equity method in addition to the impact of COVID-19. As a result,the Group recorded an operating loss and ordinary loss. For the fiscal year ending March 31, 2022, the Group
expects a significant increase in both sales and profit on a consolidated basis. This will be due to a recovery
in the performance of existing businesses, the full-year contribution of the financial results of Antalis S.A.S.,
which was acquired last year, and an increase in sales from the restructured China business.
* Notes on forward-looking information
The results forecast and other forward-looking statements contained herein are based on information currently
available to the Company and certain assumptions deemed to be reasonable. Actual results may differ
substantially due to various factors, and the forecast and other forward-looking statements are not intended asa guarantee that the Company will achieve them.
(5) Basic Policy for Profit Distribution and Dividends for the Current Fiscal Year and Next Fiscal Year
The Company recognizes the return of profits to shareholders as an important management issue, and has
made it a basic policy to enhance corporate competitiveness and shareholder value. It will do this byexpanding and effectively utilizing retained earnings and making stable and continuous payments of dividends.
4Under this basic policy, the annual dividend for the fiscal year under review will be 10 yen per share. The
annual dividend for fiscal 2021 is expected to be 10 yen per share based on the above policy, results forecast
and other factors.

2.

Basic Approach to the Selection of Accounting Standards
For the time being, the Group has a policy to prepare consolidated financial statements in accordance withJapan GAAP, taking into account the comparability of consolidated financial statements over time and among
entities.
Regarding the adoption of the International Financial Reporting Standards (IFRS), the Group will respond
appropriately in consideration of various domestic and international situations.

53.

Consolidated Financial Statements and Key Notes(1) Consolidated Balance Sheet(Million yen)Previous fiscal year
(March 31, 2020)
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Electronically recorded monetary claims - operating
Merchandise
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures, net
Machinery, equipment and vehicles, net
Tools, furniture and fixtures, net
Land
Leased assets, net
Right-of-use assets, net
Construction in progress
Total property, plant and equipment
Intangible assets
Goodwill
Software
Other
Total intangible assets
Investments and other assets
Investment securities
Long-term loans receivable
Deferred tax assets
Retirement benefit asset
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets

6

Current fiscal year
(March 31, 2021)

7,786
95,698
10,926
19,7642,921(550)
136,546

30,546
112,782
12,92840,012
10,138(5,735)
200,672

5,983
273
311
18,498190
2,370
44
27,671

6,935
1,255
1,210
9,581
178
15,576108
34,845

2,365
264
8
2,637

4,235
4,327
213
8,777

20,606
29
337
276
1,968
(756)
22,462
52,771
189,317

17,806
188
1,594
9,230
11,190(9,184)30,82474,447275,119

(Million yen)Previous fiscal year
(March 31, 2020)
Liabilities
Current liabilities
Notes and accounts payable - trade
Electronically recorded obligations - operating
Short-term borrowings
Commercial papers
Lease obligations
Income taxes payable
Provision for bonuses
Provision for bonuses for directors (and otherofficers)
Provision for point card certificates
Provision for product warranties
Provision for loss on business liquidation
Provision for risk costs
Other
Total current liabilities
Non-current liabilities
Long-term borrowings
Lease obligations
Deferred tax liabilities
Provision for retirement benefits for directors (andother officers)
Provision for share-based remuneration for directors(and other officers)
Provision for risk costs
Retirement benefit liability
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
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

7

Current fiscal year
(March 31, 2021)

75,471
3,361
30,303
4,000
611
705
853

81,672
3,552
67,999
4,754
9,273
2,291

40

47

29
48
76
5,792
121,293

26
60
1,298
134
19,882
190,993

13,504
2,021
2,945

15,272
12,490
694

21

16

94

110

317
42
1,797
20,746142,040

316
4,678
431
6,533
40,544
231,537

4,723
8,952
31,151(845)
43,981

4,723
7,833
31,826(1,089)43,293

2,781
1
355
64
3,202
92
47,277
189,3173,798(54)(1,380)(2,167)19592
43,581
275,119

(2) Consolidated Statements of Income and Comprehensive Income
Consolidated Statement of Income(Million yen)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Selling expenses
Employees' salaries and allowances
Provision for bonuses
Provision for bonuses for directors (and other officers)
Retirement benefit expenses
Provision of allowance for doubtful accounts
Provision for retirement benefits for directors (and otherofficers)
Provision for share-based remuneration for directors(and other officers)
Provision for risk costs
Other
Total selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
Foreign exchange gains
Reversal of allowance for doubtful accounts
Other
Total non-operating income
Non-operating expenses
Interest expenses
Loss on sales of trade receivables
Foreign exchange losses
Share of loss of entities accounted for using equity
methodOther
Total non-operating expenses
Ordinary profit

Previous fiscal year
(From April 1, 2019 toMarch 31, 2020)
381,397357,689
23,708Current fiscal year
(From April 1, 2020 toMarch 31, 2021)
430,404
378,489
51,915

5,517
7,050
840
39
177
141
2

9,747
16,7492,243
46705
11,627
(5)

46

35

8,042
21,8571,850

23
19,776
60,950(9,035)

692
439
84
259
1,476

273
443
274
368
1,360

658
34
50
246

1,221
233
2,452

142
1,132
2,194

460
4,366
(12,041)8

(Million yen)Previous fiscal year
(From April 1, 2019 toMarch 31, 2020)
Extraordinary income
Gain on sales of non-current assets
Gain on sales of investment securities
Gain on reversal of asset retirement obligations
Gain on bargain purchase
Other
Total extraordinary income
Extraordinary losses
Loss on retirement of non-current assets
Impairment loss
Loss on liquidation of business
Loss on valuation of investment securities
Loss on cancellation of leases
Other
Total extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent

9

Current fiscal year
(From April 1, 2020 toMarch 31, 2021)

2,238
958
40
13
3,250

10,599
924
1,679
763
13,966

18
3,523
14
38
3,595
1,849
1,151
(519)
632
1,217
(14)
1,232

7
218
181
229
119
5
763
1,161
3,537
(3,647)
(109)
1,271
(145)
1,416

Consolidated Statement of Comprehensive Income(Million yen)

ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests

Previous fiscal year
(From April 1, 2019 toMarch 31, 2020)
1,217

Current fiscal year
(From April 1, 2020 toMarch 31, 2021)
1,271(2,680)
(11)
(232)
(355)

1,017
(55)
(956)
(2,232)

(126)

(779)

(3,407)(2,189)(3,007)(1,736)(2,173)(1,590)

(15)

(145)

10

(3) Consolidated Statement of Changes in Equity
Previous fiscal year (From April 1, 2019 to March 31, 2020)(Million yen)
Shareholders’ equity

Balance at beginning of
periodChanges during period
Dividends of surplus
Profit attributable toowners of parent
Purchase of treasury
shares
Disposal of treasury
sharesChange in scope ofequity method
Net changes in items
other thanshareholders' equity
Total changes during
periodBalance at end of period

Capital stock

Capital surplus

Retained earnings

Treasury shares

Total shareholders’equity

4,723

8,952

30,554(721)

43,508

(746)

(746)

1,232

1,232
(126)

(126)

2

2

110

110

−

−

596

(123)

472

4,723

8,952

31,151(845)

43,981

Accumulated other comprehensive income
Valuation
Foreign currency Remeasurements Non-controlling
Total net assets
difference on Deferred gains orinterests
translationof defined benefit
available-for-sale losses on hedgesplansadjustment
securities
Balance at beginning of
periodChanges during period
Dividends of surplus
Profit attributable toowners of parent
Purchase of treasury
shares
Disposal of treasury
sharesChange in scope ofequity method
Net changes in items
other thanshareholders' equity
Total changes during
periodBalance at end of period

5,461

13

713

420

107

50,225
(746)
1,232
(126)
2
110

(2,680)

(11)

(357)

(355)

(14)

(3,421)(2,680)

(11)

(357)

(355)

(14)

(2,948)

2,781

1

355

64

92

47,27711

Current fiscal year (From April 1, 2020 to March 31, 2021)(Million yen)
Shareholders’ equity

Balance at beginning of
periodChanges during period
Dividends of surplus
Profit attributable toowners of parent
Purchase of treasury
shares
Disposal of treasury
sharesChange in ownershipinterest of parent
due to transactions
with noncontrolling interests
Net changes in items
other thanshareholders' equity
Total changes during
periodBalance at end of period

Capital stock

Capital surplus

Retained earnings

Treasury shares

Total shareholders’equity

4,723

8,952

31,151(845)

43,981

(741)

(741)

1,416

1,416
(263)

(263)

19

19

(1,118)(1,118)−(1,118)

675

(244)

(687)

4,723

7,833

31,826(1,089)43,293

Accumulated other comprehensive income
Valuation
Foreign currency Remeasurements Non-controlling
Total net assets
difference on Deferred gains orinterests
translationof defined benefit
available-for-sale losses on hedgesplansadjustment
securities
Balance at beginning of
periodChanges during period
Dividends of surplus
Profit attributable toowners of parent
Purchase of treasury
shares
Disposal of treasury
sharesChange in ownershipinterest of parent
due to transactions
with noncontrolling interests
Net changes in items
other thanshareholders' equity
Total changes during
periodBalance at end of period

2,781

1

355

64

92

47,277
(741)
1,416
(263)
19

(1,118)

1,017

(55)

(1,735)(2,232)(0)(3,007)

1,017

(55)

(1,735)(2,232)(0)(3,695)

3,798

(54)

(1,380)(2,167)92

43,581

12

(4) Consolidated Statement of Cash Flows(Million yen)
Current fiscal year
(From April 1, 2020 toMarch 31, 2021)

Previous fiscal year
(From April 1, 2019 toMarch 31, 2020)
Net cash provided by (used in) operating activities
Profit before income taxes
Depreciation
Impairment loss
Amortization of goodwill
Gain on bargain purchase
Share of loss (profit) of entities accounted for using
equity method
Loss (gain) on valuation of investment securities
Increase (decrease) in retirement benefit liability
Increase (decrease) in provision for retirement benefits
for directors (and other officers)
Increase (decrease) in provision for share-based
remuneration for directors (and other officers)
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for bonuses for directors(and other officers)
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for point card certificatesInterest and dividend income
Interest expenses
Loss (gain) on sales and retirement of non-current assets
Loss (gain) on sales of investment securities
Gain on reversal of asset retirement obligations
Reversal of foreign currency translation adjustments
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Decrease (increase) in other assets
Increase (decrease) in trade payables
Increase (decrease) in other liabilities
Other
SubtotalInterest and dividends received
Interest paid
Income taxes paid
Net cash provided by (used in) operating activities
Net cash provided by (used in) investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment and intangible
assetsProceeds from sales of property, plant and equipment andintangible assets
Purchase of investment securities
Proceeds from sales of investment securities
Payments for acquisition of businesses
Loan advances
Collection of loans receivable
Purchase of shares of subsidiaries resulting in change inscope of consolidation
Proceeds from purchase of shares of subsidiaries
resulting in change in scope of consolidation
Other
Net cash provided by (used in) investing activities

1,849
826
3,523
203

1,161
4,707
218
485
(1,679)

246

2,452

(208)

229
(570)
(5)

44

15

(174)

531

13

(72)

(930)

10,501
(2)
(717)
1,221
(10,590)
(924)
(296)
5,984
1,902
(892)
(14,386)(2,754)(1,366)(4,846)717(1,247)(1,096)(6,472)(1,131)658(2,218)
(958)
(40)
36
14,924542(65)(12,043)
522
36
5,655
1,137
(656)
(1,231)
4,905
(10)

(2)
10

(2,077)(1,776)

2,345

20,133(448)
1,205(4,180)
4,311

(101)
1,978
(3,551)(179)
96(6,565)

(714)
7,154

16
(5,400)13

023,046

(Million yen)
Current fiscal year
(From April 1, 2020 toMarch 31, 2021)

Previous fiscal year
(From April 1, 2019 toMarch 31, 2020)
Net cash provided by (used in) financing activities
Net increase (decrease) in short-term borrowings
Net increase (decrease) in commercial papers
Proceeds from long-term borrowings
Repayments of long-term borrowings
Repayments of lease obligations
Purchase of treasury shares
Proceeds from sales of treasury shares
Dividends paid
Payments from changes in ownership interests in
subsidiaries that do not result in change in scope of
consolidation
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Increase (decrease) in cash and cash equivalents resulting
from change in scope of consolidation
Cash and cash equivalents at end of period

14

2,575
1,000
6,000
(2,935)
(263)
(126)
(746)

14,607(4,000)2,327(687)(3,441)
(263)
19
(741)

-

(1,223)

5,504
(72)
4,937
2,838

6,597
(403)
22,768
7,775

(1)

-

7,775

30,543

(5) Notes to Consolidated Financial Statements(Notes on Going Concern Assumption)
Not applicable.
(Significant Matters Forming the Basis in Preparation of Consolidated Financial Statements)
Matters concerning accounting policies(1) Basis and methods of valuation of significant assets
1)

Securities
Available-for-sale securities
Securities with market value
Stated at market value based on the market price and others at the last day of the fiscal year
(valuation difference is reported as a component of net assets, and the cost of securities sold is
calculated by the moving-average method).
Securities with no market value
Stated at cost based on the moving-average method.

2)

Derivatives
Stated at market value (hedge transactions are accounted for by hedge accounting).

3)

Inventories
Stated at cost primarily based on the moving-average method (the balance sheet amount is calculated bydevaluing the book value based on a decline in profitability).

(2) Method of depreciation and amortization for significant depreciable assets
1)

Property, plant and equipment (excluding leased assets and right-of-use assets)
The Company and its consolidated subsidiaries principally use the declining-balance method.
(However, the Company and its domestic consolidated subsidiaries use the straight-line method forbuildings (excluding attached facilities) acquired on or after April 1, 1998 and facilities attached tobuildings and structures acquired on or after April 1, 2016.)

2)

Intangible assets (excluding leased assets)
The Company and its consolidated subsidiaries principally use the straight-line method. Software forinternal use is amortized using the straight-line method over the period of internal use (5 years).

3)

Leased assets
The straight-line method is used with the lease period as the useful life and the residual value as zero.

4)

Right-of-use assets
The straight-line method is used with the lease period as the useful life and the residual value as zero.

(3) Accounting standards for significant allowances and provisions
1)

Allowance for doubtful accounts
To prepare for losses on trade receivables, loans receivable and others, the estimated uncollectableamounts regarding general receivables are recorded based on the actual default ratio, and the estimateduncollectible amounts regarding certain receivables such as doubtful receivables are recorded byseparately examining their collectability.

2)

Provision for bonuses
The Company and some of its consolidated subsidiaries provide for bonus payments to employees at an
estimated amount to be paid for the fiscal year under review.

15

3)

Provision for bonuses for directors (and other officers)
The Company and some of its consolidated subsidiaries provide for bonus payments to directors (andother officers; including executive officers) based on an estimated amount to be paid.

4)

Provision for point card certificates
To prepare for the cost of exchanging the points granted based on the collection of waste paper under the
ecomo (waste paper recycling points system) for recycling coupons, the amount corresponding to thepoints expected to be used in the future is recorded against the unused points balance.

5)

Provision for product warranties
Certain consolidated subsidiaries provide for repair costs on products covered under warranty to be
incurred in the future based on the estimated warranty costs at the end of the fiscal year.

6)

Provision for loss on business liquidation
Provision for loss on business liquidation is recorded at the amount of losses expected to arise in the
future.

7)

Provision for retirement benefits for directors (and other officers)
Certain consolidated subsidiaries provide for the payment of retirement benefits for directors (and otherofficers; including executive officers) at an amount required to be paid at the end of the fiscal year basedon their internal regulations.

8)

Provision for share-based remuneration for directors (and other officers)
The Company provides for share-based remuneration for directors (and other officers; including
executive officers) based on the estimated share-based payment obligation at the end of the fiscal year.

9)

Provision for risk costs
Certain overseas consolidated subsidiaries provide for risk costs such as litigation risks and tax risks at
the estimated amount of losses in consideration of the probability of their occurrence.

(4) Other significant matters for preparation of consolidated financial statements
1)

Method of hedge accounting
Deferred hedge accounting is applied. The appropriation treatment is applied for hedging foreignexchange fluctuation risk when the requirements for the treatment are met, while the special treatment
is applied for interest rate swaps when the requirements for the treatment are met.

2)

Accounting procedures for consumption taxes and others
Tax-exclusive method is adopted.

3)Matters concerning amortization of goodwill
Goodwill is amortized on a straight-line basis mainly over a period of 10 or 12 years. Insignificant
amounts are fully amortized in the fiscal year incurred.

4)

Method of accounting for retirement benefitsa. Period attribution method for the estimated retirement benefits: In calculating retirement benefit
obligations, the method of attributing the estimated retirement benefits to the period up to the endof the fiscal year under review is based on the benefit formula basis.
b.

Method of expensing actuarial differences and prior service costs: Prior service costs are fully
charged to income as incurred. Actuarial differences are amortized using the straight-line methodfrom the fiscal year following their accrual over a certain number of years within the averageremaining service period of employees (1–4 years) and the average remaining service period of
employees (6 years) at the time of their accrual.

c.

Adoption of simplified method for small corporations, etc.: Certain consolidated subsidiaries adopt
the simplified method, which assumes retirement benefit obligations to be equal to the benefits
payable if all eligible employees voluntarily terminated their employment at the end of the fiscal
year, for the calculation of the retirement benefit liability and retirement benefit expenses.

16

(5) Scope of funds in the consolidated statement of cash flows
Funds consist of cash on hand, demand deposits, and short-term investments with maturities of 3 months
or less from the date of acquisition, which are readily convertible into cash and bear only an insignificant
risk of price fluctuation.
(Additional Information)(Inability or delays in the collection of receivables)
Samson Paper Holdings Limited (listed on the Hong Kong Stock Exchange; hereinafter referred to as“Samson”), the parent company of the business partner of DaiEi Papers (H.K.) Limited (hereinafter referred
to as “Hong Kong DaiEi”) and Keishin Papers Trade (Shanghai) Co., Ltd. (hereinafter referred to as “Keishin
Papers”), both of which are the Company’s consolidated subsidiaries, disclosed that it had filed for “lighttouch” provisional liquidation for its reorganization to the Bermuda Supreme Court on July 20, 2020. As aresult, delays occurred in the collection of trade receivables held by Samson Paper Company Limited andSamson Paper (Beijing) Company Limited (hereinafter referred to as the “Business Partners”), both of which
are Samson’s consolidated subsidiaries.
Of 13,548 million yen in trade receivables held by Hong Kong DaiEi and Keishin Papers against the Business
Partners, the Company recorded 11,475 million yen in provision of allowance for doubtful accounts as selling,
general and administrative expenses. Trade receivables of 8,133 million yen, which are not expected to becollected within 1 year, have been transferred to “other” in investments and other assets.
The Company, Hong Kong DaiEi and Keishin Papers strive to collect trade receivables by continuously
focusing on negotiations for their collection and filing lawsuits against Business Partners demanding paymentof sales proceeds.
The provision of allowance for doubtful accounts is calculated by subtracting from the balance of tradereceivables the amount secured by real estate collateral and the amount of money received after the fiscal
year-end. Allowance for doubtful accounts may fluctuate in and after the following fiscal year if a payment ismade by compulsory execution against the bank account secured through court proceedings or a liquidating
dividend derived from the sale of real estate held by the Business Partners is paid.
(Information Related to Consolidated Balance Sheet)1

Amounts related to unconsolidated subsidiaries and affiliates are as follows.

Investment securities (shares)

2

Previous fiscal year (March
31, 2020)
4,848 million yen

Accumulated depreciation of property, plant and equipment
Previous fiscal year (March
31, 2020)

Current fiscal year (March 31,
2021)

9,516 million yen

33,819 million yen

Previous fiscal year (March
31, 2020)

Current fiscal year (March 31,
2021)

2,000 million yen

1,292 million yen

Accumulated depreciation of property,
plant and equipment

3

Current fiscal year (March 31,
2021)
1,520 million yen

Repurchase obligation following securitization

Repurchase obligation following
securitization of receivables

17

(Information Related to Consolidated Statement of Income)1.

Impairment loss
In the previous fiscal year, the Group recorded impairment losses for the following assets.
Location
Chuo-ku, Tokyo

Purpose of use
Business assets

Type
SoftwareAmount3,523 million yen

The Group primarily groups its assets by the management accounting segmentation (company, branch)utilized to monitor receipts and disbursements on an ongoing basis.
As a result of discontinuing the development project of the software for internal use, the book value of the
portion that is not expected to be used in the future was reduced to the recoverable amount, and the relevant
decrease was recorded as an impairment loss. The recoverable amount is regarded as zero.
In the fiscal year under review, the Group recorded impairment losses for the following assets.
Location
Ichihara-shi, Chiba

Purpose of use
Business assets

Germany, Austria

Business assets

Portugal, Spain

Business assets

Eastern Europe

Business assets

Type
Furniture and fixtures
Furniture and fixtures, right-ofuse assets and other intangible
assetsOther intangible assets
Furniture and fixtures, and otherintangible assets

Total

Amount18 million yen
40 million yen
119 million yen
40 million yen
218 million yen

The Group primarily groups its assets by the management accounting segmentation (region, company,
branch) utilized to monitor receipts and disbursements on an ongoing basis.
For asset groups that are not expected to be used in the future, the book value is reduced to the recoverable
amount, and the relevant decrease is recorded as an impairment loss. The recoverable amount is regarded
as zero.
For asset groups that continuously record operating losses and have estimated cash flows that are less thanthe book value of each asset, the book value is reduced to the recoverable amount, and the relevant decrease
is recorded as an impairment loss.
The recoverable amount is measured based on their value in use and was calculated by discounting thefuture cash flows by the discount rate (6.75% to 9%).
2.

Share of loss of entities accounted for using equity method
Current fiscal year (From April 1, 2020 to March 31, 2021)
As Universal Pulp and Paper (Shandong) Co., Ltd., a subsidiary of Mission Sky Group Limited, theCompany’s equity-method affiliate, faced a cash flow crisis, its creditors filed for bankruptcy with the
district court, which accepted the filing. The resulting share of loss of entities accounted for using theequity method of 2,463 million yen was recorded.

18

(Information Related to Consolidated Statement of Changes in Equity)
Previous fiscal year (From April 1, 2019 to March 31, 2020)
1.

Matters Concerning Types and Total Number of Outstanding Shares and Treasury Shares
Number of shares atthe beginning of the
fiscal year underreview (thousand
shares)Increase in numberof shares during the
fiscal year underreview (thousand
shares)Decrease in numberof shares during the
fiscal year underreview (thousand
shares)Number of shares atthe end of the fiscal
year under review(thousand shares)

Outstanding shares
Common shares
75,077−−75,077
Total
75,077−−75,077
Treasury shares
Common
1,935
498
6
2,427
shares(Note 1, 2, 3)
Total
1,935
498
6
2,427
(Notes) 1. The increase in the number of treasury shares (common shares) is due to the open-market purchase of
498,000 treasury shares.
2. The decrease in the number of treasury shares (common shares) is all due to the exercise of stock options.
3. Treasury shares (common shares) include the treasury shares owned by the executive compensation BIP
trust.

2.

Matters Concerning Dividends(1) Cash dividends paid

(Resolution)

Type of shares

Total amount ofdividends(million yen)

Dividends per
share (yen)Record date

Effective dateOrdinary General
Meeting ofCommon shares
746
10 March 31, 2019
June 28, 2019
Shareholders on
June 27, 2019
(Notes) The total amount of dividends resolved at the Ordinary General Meeting of Shareholders held on June 27, 2019
includes dividends of 15 million yen on the Company’s shares owned by the executive compensation BIP trust.

(2) Dividends whose record date is in the fiscal year under review and that come into effect in the next fiscal
year(Resolution)

Type ofsharesTotal amountof dividends(million yen)

Source ofdividends

Dividends
per share(yen)

Record date

Effective
date

Ordinary General
CommonRetained
March 31,
June 29,
Meeting of
10741
earnings
2020
2020
sharesShareholders on
June 26, 2020
(Notes) The total amount of dividends resolved at the Ordinary General Meeting of Shareholders held on June 26, 2020
includes dividends of 14 million yen on the Company’s shares owned by the executive compensation BIP trust.

19Current fiscal year (From April 1, 2020 to March 31, 2021)
1.

Matters Concerning Types and Total Number of Outstanding Shares and Treasury Shares
Number of shares atthe beginning of the
fiscal year underreview (thousand
shares)Increase in numberof shares during the
fiscal year underreview (thousand
shares)Decrease in numberof shares during the
fiscal year underreview (thousand
shares)Number of shares atthe end of the fiscal
year under review(thousand shares)

Outstanding shares
Common shares
75,077−−75,077
Total
75,077−−75,077
Treasury shares
Common
2,427
901
50
3,278
shares(Note 1, 2, 3)
Total
2,427
901
50
3,278
(Notes) 1. The increase in the number of treasury shares (common shares) is due to the open-market purchase of
901,000 treasury shares.
2. The decrease in the number of treasury shares (common shares) is due to the issuance of the Company’s
shares by the executive compensation BIP trust.
3. Treasury shares (common shares) include the treasury shares owned by the executive compensation BIP
trust.

2.

Matters Concerning Dividends(1) Cash dividends paid

(Resolution)

Type of shares

Total amount ofdividends(million yen)

Dividends per
share (yen)Record date

Effective dateOrdinary General
Meeting ofCommon shares
741
10 March 31, 2020
June 29, 2020
Shareholders on
June 26, 2020
(Notes) The total amount of dividends resolved at the Ordinary General Meeting of Shareholders held on June 26, 2020
includes dividends of 14 million yen on the Company’s shares owned by the executive compensation BIP trust.

(2) Dividends whose record date is in the fiscal year under review and that come into effect in the next fiscal
year(Resolution)

Type ofsharesTotal amountof dividends(million yen)

Source ofdividends

Dividends
per share(yen)

Record date

Effective
date

Ordinary General
CommonRetained
March 31,
June 30,
Meeting of
10732
earnings
2021
2021
sharesShareholders on
June 29, 2021
(Notes) The total amount of dividends resolved at the Ordinary General Meeting of Shareholders held on June 29, 2021
includes dividends of 14 million yen on the Company’s shares owned by the executive compensation BIP trust.

20

(Information Related to Consolidated Statement of Cash Flows)
Relationship between cash and cash equivalents at end of period and amounts stated in the consolidatedbalance sheet

Cash and deposits
Time deposits with maturities of morethan 3 months
Cash and cash equivalents

Previous fiscal year (FromApril 1, 2019 to March 31,
2020)
million
7,786
yen
(10)

Current fiscal year (FromApril 1, 2020 to March 31,
2021)
30,546
million
yen
(2)

7,775

30,543(Information Related to Business Combination, Etc.)
Business combination through acquisition (Wilmaridge Pty Ltd)
(1) Outline of the business combination
1)

Name of the acquired company and description of its business
Acquired company
Wilmaridge Pty Ltd
Business description

2)

Wholesale and processing of paper and packaging materials, printing
and wholesale of food packaging materials

Main reasons for the business combination
The Company resolved at the Board of Directors meeting held on November 26, 2019, that Spicers
Australia Pty Ltd, a business company of Spicers Limited (Address: Melbourne, Victoria, Australia;
hereinafter referred to as “Spicers”), the Company’s consolidated subsidiary, would enter into a business
transfer agreement with Wilmaridge Pty Ltd (Address: Melbourne, Victoria, Australia; hereinafterreferred to as “Wilmaridge”) to acquire Wilmaridge’s wholesale business of paper, paperboard, etc.
(hereinafter referred to as “Direct Paper”).
This business acquisition was executed on February 28, 2020, after the conditions were met upon theapproval of the Australian Competition and Consumer Commission on February 20, 2020.
With eight locations in Australia and four in New Zealand, Spicers has established a strong position in
the Australian and New Zealand markets as a leading wholesaler of paper, packaging materials andpaper-related products. In addition to entering the signature and display market, which is expected to
expand, the Spicers is also focusing on wrapping and packaging products, and has strength in the winelabel and copying paper markets.
On the other hand, Direct Paper has three locations in Australia, and focuses on sales and conversion ofcommercial printing paper, packaging materials and food packaging materials. Accordingly, theacquisition of this business is expected to diversify Spicers’ business portfolio and further enhance
Spicer’s presence in the Australian market by capturing a growing packaging segment. Based on theabove, the business transfer agreement was concluded.

3)

Date of the business combination
February 28, 2020

4)

Legal form of the business combination
Business acquisition

5)

Name of the company after the business combination
No change21

6)Main grounds for determining the acquiring company
Spicers Australia Pty Ltd, the Company’s consolidated subsidiary, acquired the business in exchange forcash.

(2) Period of the acquired company's financial results included in the consolidated statement of income
Because the fiscal year-end of Spicers Australia Pty Ltd differs from the consolidated fiscal year-end by 3months, its financial results from March 1, 2020 to December 31, 2020 are included.
(3) Acquisition cost of the acquired business and the breakdown thereof by type of consideration
Consideration for the acquisition (cash)
3,468 million yen (A$48 million)
Acquisition cost

3,468 million yen (A$48 million)(4) Amount of goodwill that occurred, the cause of its occurrence, the amortization method and theamortization period
1)

Amount of goodwill that occurred

1,785 million yen

2)

Cause of occurrence

Excess profitability expected from future business development

3)

Amortization method and period

Straight-line depreciation over 10 years(5) Amount of assets received and liabilities assumed on the date of the business combination and thebreakdown thereof
Current assets
Non-current assets

2,181 million yen
75 million yen

Total assets

2,257 million yen

Current liabilities

575 million yen

Non-current liabilities
Total liabilities- million yen
575 million yen

Business combination through acquisition (Antalis S.A.S.)(1) Outline of the business combination
1)

Name of the acquired company and description of its business
Acquired company
Antalis S.A.S. (hereinafter referred to as "Antalis")
Business description

2)

Wholesale of paper, packaging materials, and consumable parts for
signatures and displays

Main reasons for the business combination
The Group has established the management philosophy of realizing a recycling-oriented society andwidely contributing to the promotion of education, culture, and industry, and it engages in a broad rangeof businesses mainly in Japan and the Asia-Pacific region. In the second medium-term management plan
“Business Development Period” that commenced in this fiscal year, the Group aims to achievesustainable growth by incorporating growth through the acquisition of external resources (inorganic
growth) as one of its basic strategies.
On the other hand, Antalis is Europe’s largest paper merchant, and a leading wholesaler of paper andpaper-related products mainly in Europe, and in South America and the Asia-Pacific region. Antalis also22has strength in its packaging business and visual communications business (such as signatures anddisplays), both of which have high growth potential as post-graphic paper, and is promoting businessportfolio reform and investment in e-commerce.
Antalis, which has a business base in European countries, and the Company, which has a business basemainly in the Asia-Pacific region, have a strong complementary relationship. It was judged that theGroup can expect to pursue synergies, such as product development and brand power development, bycollaborating with Antalis. Accordingly, the put option agreement and the share purchase agreement wereconcluded. It is also judged that, by acquiring Antalis, the Group will further strengthen its
competitiveness through the trade business of the Company’s overseas business and the paper wholesale
business of Antalis. Going forward, the Group will aggressively expand its business not only in the AsiaPacific region but also in Europe and other regions of the world, with the aim of achieving sustainable
development.
3)

Date of the business combination
July 21, 2020

4)

Legal form of the business combination
Purchase of shares in exchange for cash

5)

Name of the company after the business combination
No change

6)

Percentage of voting rights acquired
83.60%

7)

Main grounds for determining the acquiring company
The Company purchased shares in exchange for cash.

(2) Period of the acquired company's financial results included in the consolidated statement of income
Because the fiscal year-end of Antalis S.A.S. differs from the consolidated fiscal year-end by 3 months,
its financial results from July 1, 2020 to December 31, 2020 are included.
(3) Acquisition cost of the acquired business and the breakdown thereof by type of consideration
Consideration for the acquisition (cash anddeposits)
Acquisition cost

955 million yen
955 million yen(7.7 million euros)(4) Amount of gain on bargain purchase and the cause of its occurrence
1)

Gain on bargain purchase: 1,679 million yen
The amount of gain on bargain purchase is a tentatively calculated amount because allocation of theacquisition cost has not been completed in the fiscal year.

2)

Cause of occurrence
The market value of net assets at the time of the business combination exceeded the acquisition cost.

(5) Amount of assets received and liabilities assumed on the date of the business combination and thebreakdown thereof
Current assets
71,758 million yen
Non-current assets

29,592 million yen

Total assets

101,351 million yen

23Current liabilities

83,691 million yen

Non-current liabilities

14,487 million yen

Total liabilities

98,178 million yen(Transactions, etc. under Common Control)
Additional purchase of shares of a subsidiary (Antalis S.A.S.)(1) Outline of the transaction
1)

Name of the party to the business combination and description of its business
Name of the party to the business combination Antalis S.A.S.
Business description

Wholesale of paper, packaging materials, and consumable parts for
signatures and displays

2)

Date of the business combination
November 5, 2020 (Deemed acquisition date: September 30, 2020)

3)

Legal form of the business combination
Purchase of shares from non-controlling shareholders

4)

Name of the company after the business combination
No change

5)

Other matters concerning the outline of the transaction
The Company made Antalis S.A.S. its wholly-owned subsidiary as a result of the tender offer andsqueeze-out.

(2) Outline of the accounting procedures implemented
The transaction is accounted for as one with non-controlling shareholders among transactions undercommon control in accordance with the “Accounting Standard for Business Combinations” and the“Guidance on Accounting Standard for Business Combinations and Accounting Standard for Business
Divestitures.”(3) Matters stated in the case where shares of subsidiaries are additionally purchased
Consideration for the acquisition (cash anddeposits)
Acquisition cost

1,223 million yen
1,223 million yen(9.9 million euros)(4) Matters concerning changes in the Company's equity due to transactions with non-controllingshareholders
1)

Major causes of changes in capital surplus
Additional purchase of shares of subsidiaries

2)

The amount of capital surplus decreased due to transactions with non-controlling shareholders
1,118 million yen

Additional purchase of shares of a subsidiary (Keishin Papers Trade (Shanghai) Co., Ltd.)(1) Outline of the transaction
1)

Name of the party to the business combination and description of its business
Name of the party to the business combination Keishin Papers Trade (Shanghai) Co., LTD.
Business description

Sales of paper, packaging materials, pulp, etc.

24

2)

Date of the business combination
October 28, 2020

3)

Legal form of the business combination
Purchase of shares by subscription to third-party allotment in exchange for cash

4)

Name of the company after the business combination
No change

5)

Other matters concerning the outline of the transaction
The transaction was implemented with the aim of strengthening the financial position and securing funds
necessary for further business expansion through the allocation of new shares to a third party.

(2) Outline of the accounting procedures implemented
The transaction is accounted for as one with non-controlling shareholders among transactions undercommon control in accordance with the “Accounting Standard for Business Combinations” and the“Guidance on Accounting Standard for Business Combinations and Accounting Standard for Business
Divestitures.”(3) Matters stated in the case where shares of subsidiaries are additionally purchased
Consideration for the acquisition (cash anddeposits)
Acquisition cost

1,959 million yen
1,959 million yen(US$18.7 million)(4) Matters concerning changes in the Company's equity due to transactions with non-controllingshareholders
1)

Major causes of changes in capital surplus
Additional purchase of shares of subsidiaries

2)

The amount of capital surplus decreased due to transactions with non-controlling shareholders- million yen(Segment Information, etc.)[Segment Information]
1.

Outline of Reportable Segments
The Company’s reportable segments are components of the Group for which separate financial information
is available and which are subject to periodic review by the Board of Directors in determining theallocation of management resources and in assessing performance.
The allocation of management resources is determined and performance is assessed for the Company byaccounting unit based on its business and locations in Japan, and for its consolidated subsidiaries
principally by company, and the Group identifies them as business segments. By consolidating thesebusiness segments by business and location (domestic and overseas) in consideration of the similarity ineconomic characteristics and other factors, the Group has three reportable segments: “wholesale pulp andpaper, domestic locations,” “wholesale pulp and paper, overseas locations” and “real estate leasing.”
In the “wholesale pulp and paper, domestic locations” and “wholesale pulp and paper, overseas locations,”
the Group sells paper, paperboard, pulp, waste paper and other paper-related materials. In the “real estateleasing,” the Group rents real estate.

25

2.

Method Used to Calculate Net Sales, Profit or Loss, Assets and Other Items by Reportable Segment
The method of accounting for reported business segments is generally the same as that described in“Significant Matters Forming the Basis in Preparation of Consolidated Financial Statements.”
Profit in the reportable segments is based on operating profit.
Intersegment revenues and transfers are based on prevailing market prices.

3.

Information on Net Sales, Profit or Loss, Assets and Other Items by Reportable Segment
Previous fiscal year (From April 1, 2019 to March 31, 2020)(Million yen)

Adjustment(Note 1)

Amountrecorded inconsolidated
financialstatements(Note 2)

Reportable segment
Wholesale pulp Wholesale pulp
and paper,and paper,
domestic
overseas
locationslocations
Net sales
Net sales to externalcustomers
Intersegment net
sales or transfers
Total
Segment profit
Segment assets
Other items
Depreciation
Amortization of
goodwill
Investment in entities
accounted for using
equity method
Increase in property,
plant and equipment
and intangible assets(Notes) 1.

2.

Real estateleasing

Total

290,738

89,446

1,212

381,397−

381,397

5,109

428

12

5,550

(5,550)−295,848
4,088
119,694

89,874179
43,4751,224
590
15,886

386,947
4,858
179,056(5,550)(3,007)
10,261

381,397
1,850
189,317

313

299

181

794

31

826

105

98

−

203

−

203

601

4,001

−

4,603

−

4,603

1,866

2,566

180

4,613

9

4,622

Details of the adjustment are as follows.
(1) The adjustment to segment profit of (3,007) million yen consists of intersegment eliminations of(8) million yen and corporate expenses of (2,998) million yen. Corporate expenses are mainly
general and administrative expenses at administrative divisions of the head office that are not
attributable to any reportable segment.
(2) The adjustment to segment assets of 10,261 million yen consists of intersegment eliminations of(10,242) million yen and corporate assets of 20,504 million yen. Corporate assets are mainly
surplus operating funds, long-term investment funds and assets related to administrative divisionsof the head office that are not attributable to any reportable segment.
Segment profit is adjusted with operating profit in consolidated financial statements.

26

Current fiscal year (From April 1, 2020 to March 31, 2021)(Million yen)

Adjustment(Note 1)

Amountrecorded inconsolidated
financialstatements(Note 2)

Reportable segment
Wholesale pulp Wholesale pulp
and paper,and paper,
domestic
overseas
locationslocations
Net sales
Net sales to externalcustomers
Intersegment net
sales or transfers
Total
Segment income(loss)
Segment assets
Other items
Depreciation
Amortization of
goodwill
Investment in entities
accounted for using
equity method
Increase in property,
plant and equipment
and intangible assets(Notes) 1.

2.

Real estateleasing

Total

252,104

177,052

1,247

430,404−

430,404

4,902

251

17

5,171

(5,171)−

257,006

177,304

1,264

435,575(5,171)

430,404

3,710(10,557)629(6,217)(2,817)(9,035)

136,782

145,994

6,873

289,649(14,529)

275,119

555

3,939

180

4,675

31

4,707

105

380

−

485

−

485

571

711

−

1,283

−

1,283

674

7,600

17

8,293

53

8,346

Details of the adjustment are as follows.
(1) The adjustment to segment profit (loss) of (2,817) million yen consists of intersegment eliminationsof 4 million yen and corporate expenses of (2,821) million yen. Corporate expenses are mainly
general and administrative expenses at administrative divisions of the head office that are not
attributable to any reportable segment.
(2) The adjustment to segment assets of (14,529) million yen consists of intersegment eliminations of(32,925) million yen and corporate assets of 18,395 million yen. Corporate assets are mainly
surplus operating funds, long-term investment funds and assets related to administrative divisionsof the head office that are not attributable to any reportable segment.
Segment profit (loss) is adjusted with operating profit (loss) in consolidated financial statements.

(Per-share information)
Previous fiscal year (From April
Current fiscal year (From April 1,
1, 2019 to March 31, 2020)
2020 to March 31, 2021)
Net assets per share
649.48 yen
605.71 yen
Profit per share
16.86 yen
19.70 yen
Profit per share - diluted(Notes) 1. Profit per share - diluted is not stated as there are no dilutive shares which have a dilutive effect.
2. In calculating “net assets per share,” the Company’s shares owned by the executive compensation
BIP trust are included in treasury shares to be deducted from the total number of outstanding sharesat the end of the fiscal year (1,495,000 shares in the previous fiscal year, and 1,445,000 shares in
the fiscal year under review). In calculating “profit per share,” the Company’s shares owned by the
executive compensation BIP trust are included in treasury shares to be deducted in the calculationof average number of shares during the fiscal year (1,498,000 shares in the previous fiscal year, and1,459,000 shares in the fiscal year under review).

27

3.

The basis for calculating the amount of net assets per share is as follows.

Total net assets (million yen)Amount to be deducted from total net assets(million yen)(Non-controlling interests (million yen))
Net assets at the end of the fiscal year
related to common shares (million yen)
Number of common shares at the end of the
fiscal year used for calculation of net assets
per share (thousand shares)
4.

Previous fiscal year end(March 31, 2020)
47,277

Current fiscal year end(March 31, 2021)
43,581

92

92

(92)

(92)

47,184

43,48972,64971,799Previous fiscal year (FromApril 1, 2019 to March 31,
2020)

Current fiscal year (FromApril 1, 2020 to March 31,
2021)

1,232

1,416

−

−

1,232

1,416

73,094

71,918−−The basis for calculating profit per share is as follows.

Profit per share
Profit attributable to owners of parent(million yen)Amount not attributable to commonshareholders (million yen)
Profit attributable to owners of parent
related to common shares (million yen)
Average number of common shares during
the fiscal year (thousand shares)
Outline of dilutive shares not included in thecalculation of profit per share - diluted
because they have no dilutive effect(Significant Subsequent Events)
Not applicable.

28