Consolidated Financial Results for the Second Quarter of
the Fiscal Year Ending March 31, 2022 (JGAAP)
October 29, 2021
Company name:
Tsuzuki Denki Co., Ltd.
Listing Stock Exchange: Tokyo
Stock code:
8157
URL: https://www.tsuzuki.co.jp/
Representative (title): Isao Emori, Representative Director, President and CEO
Contact (title):
Toshihiro Hirai, Director and Managing Executive Officer
Tel: +81-50-3684-7780
Scheduled date for quarterly report submission:
Scheduled date for dividend payment:
Preparation of supplemental explanatory materials:
Results briefing to be held:

November 5, 2021
November 30, 2021
Yes
Yes (for institutional investors and analysts)

1. Consolidated financial results for the second quarter of the fiscal year ending March 31, 2022
(April 1, 2021, to September 30, 2021)(1) Consolidated operating results

Net sales

Millions of yen (rounded down), % figures are year-on-year change
Quarterly profit
Operating income
Ordinary income
attributable toowners of parent

Second quarter,year ending
53,1000.2%
798 260.9%
855 270.9%
492 229.0%
March 31, 2022
Second quarter,year ended
53,006 (6.2%)
221 (79.0%)
230 (78.2%)
149 (77.3%)
March 31, 2021
Note: Comprehensive income was 803 million yen (+56.6%) in the second quarter of year ending March 31, 2022;
512 million yen (-5.3%) in second quarter of year ended March 31, 2021.
Earnings per share
Diluted earnings per(yen)share (yen)Second quarter,year ending
27.95—
March 31, 2022
Second quarter,year ended
8.57—
March 31, 2021
(2) Consolidated financial position
Total assets
Net assets
Shareholders’
Net assets per share(millions of yen)(millions of yen)equity ratio(yen)
Second quarter,year ending
73,83731,54042.4%
1,771.45
March 31, 2022
Year ended
76,20031,17140.6%
1,760.87
March 31, 2021
Reference: Shareholders’ equity at the second quarter of year ending March 31, 2022; 31,284 million yen; in year
ended March 31, 2021; 30,934 million yen.

1

2. Dividends
Dividends per share for the fiscal year (yen)End offirstquarter

End ofsecondquarter

End ofthird
quarterYearendTotal

Year ended
—
15.00
—
31.00
March 31, 2021
Year ending—
23.00
March 31, 2022
Year ending
March 31, 2022—
24.00
(forecast)
Note: Revisions to most recent dividend forecast: None

46.00

47.00

3. Forecast of consolidated financial results for the fiscal year ending March 31, 2022
(April 1, 2021, to March 31, 2022)% figures are year-on-year change
Profit attributable to Earnings
Net sales
Operating income Ordinary income
owners of parent
per share(millions of yen)(millions of yen)(millions of yen)(millions of yen)
(yen)
Full year

122,000

1.7%

4,000

24.9%

4,050

Note: Revisions to most recent earnings forecast: None

2

20.5%

2,700

15.1%

153.08

*Notes(1) Changes in significant subsidiaries (which affected scope of consolidation) during the quarter: None
Newly added ___ companies (names)
No longer consolidated ___ companies (names)(2) Special accounting methods used in preparation of quarterly consolidated financial statements: Yes
Note: For details, please refer to Attachment page 15 “2. Consolidated financial statements and notes (3) Notes
to quarterly consolidated financial statements (Application of special accounting methods in the
preparation of quarterly consolidated financial statements)."(3) Changes in accounting policies, changes in accounting estimates, and restatements
1. Changes in accounting policies due to changes in accounting standards:
2. Changes in accounting policies not due to changes in accounting standards:
3. Changes in accounting estimates:
4. Restatements:

Yes
None
None
None

(4) Number of shares outstanding (common stock)
1. Number of shares outstanding at
Second quarter,Year ended
year end (including treasury
year ending
20,177,894
20,177,894
March 31, 2021
stock)March 31, 2022
Second quarter,
2. Number of shares at year end
Year ended
year ending
2,517,555
2,610,056(treasury stock)
March 31, 2021
March 31, 2022
Second quarter,
Second quarter,
3. Average number of shares overyear ending
17,616,474
year ended
17,458,214
the period
March 31, 2022
March 31, 2021
Note: The number of treasury shares includes those held in the Employee Stock Ownership Plan (ESOP) trust
account (164,300 in the second quarter of year ending March 2022; 210,100 in year ended March 2021),
Directors’ Compensation Board Incentive Plan (BIP) trust account (346,034 in the second quarter of year ending
March 2022; 380,905 in year ended March 2021); and Stock-grant ESOP trust account (474,568 in the second
quarter of year ending March 2022; 486,750 in year ended March 2021).
*The financial information in this quarterly report is not subject to review by certified public accountants or auditing
firms.
*Appropriate use of earnings forecast and other special notes.
(Note on forward-looking statements)
The earnings forecasts and other forward-looking statements contained in this document are based on
information currently available to the Company, and certain assumptions it considers reasonable, but are notintended to be a promise that the Company will make. Actual results may vary materially from forecasts due to avariety of factors.
(How to obtain supplementary explanatory materials for financial results and results briefing materials.)
The Company plans to hold a results briefing for institutional investors and analysts on Wednesday, November
17, 2021. The briefing materials will be posted on the Company’s website promptly after the briefing.

3

Content of attachment
1. Qualitative information on quarterly results ..............................................................................................5(1) Earnings ..............................................................................................................................................................5(2) Financial position ...............................................................................................................................................8
2. Consolidated financial statements and notes ...........................................................................................9(1) Quarterly consolidated balance sheet ............................................................................................................9(2) Quarterly consolidated statements of income and comprehensive income ...........................................11(3) Quarterly consolidated statement of cash flows .........................................................................................13(4) Notes to quarterly consolidated financial statements .................................................................................15(Notes on premise of going concern)..............................................................................................................15(Notes on significant changes in the amount of shareholders equity) .......................................................15(Application of special accounting methods in the preparation of quarterly consolidated financial
statements) .........................................................................................................................................................15(Changes in accounting policies) ....................................................................................................................15(Segment and other information).....................................................................................................................174

1. Qualitative information on quarterly results(1) Earnings
In the first half of the fiscal year ending March 2022, economic conditions in Japan remained severe, despitesome recovery from the impact of the COVID-19 pandemic. While there are prospects for an economic recovery
as vaccine administration progresses, the outlook remains uncertain. Mounting downside risks to the economy
posed by developments in the pandemic in Japan and overseas and the impact of supply chain disruptions must
be monitored closely.
Our group belongs to the information and communications services industry. While we expect ICT demand togrow driven by factors such as changing work styles due to COVID-19 which accelerates digital transformation(DX), there is no room for optimism as some companies continue to constrain their ICT capex due to deteriorating
earnings. The electronic device industry performed well as semiconductor demand grew further due to a recovery
in the automobile industry and growing investment in data centers.
In these circumstances, our group is carrying out the initiatives outlined in our medium-term management plan
ending in the year ending March 2023, titled Innovation 2023, as part of our aim to support the DX efforts of clientcompanies and to be more competitive by becoming an innovation service provider. We see the COVID-19
pandemic as a turning point, and are continuing with initiatives aimed at sustainable growth and enhancing
corporate value by reforming our business structure and strengthening our management base.
In the first half of the second year of our plan, the Group posted net sales of ¥53,100 million (up 0.2% year-onyear), operating income of ¥798 million (up 260.9% year-on-year), ordinary income of ¥855 million (up 270.9%
year-on-year), and profit attributable to owners of parent of ¥492 million (up 229.0% year-on-year).
In the Information Network Solutions segment, following on from the first quarter, we succeeded in winningorders to expand networks, enhance security, and build contact centers, and made solid progress on projects for
medical institutions, many of which were delayed the year earlier due to the pandemic. However, orders and net
sales were below year-earlier levels as large projects that contributed in the previous year dropped out, andcomputer orders declined as remote working related demand ran its course. Meanwhile, profit grew significantly
year-on-year on improved cost of sales for development and construction projects and equipment orders as wellas on profit from growing service sales.
In the Electronic Devices segment, both orders and net sales significantly exceeded year-earlier levels.
Following on from the first quarter, demand from the factory automation (FA) equipment and automotive industries
increased. Demand was especially strong for semiconductors, as well as onboard automotive information devices
and factory servers. Special Olympics-related demand also contributed. Profit also rose substantially year-on-year
due to sales growth and cost cuts.
The following section discusses earnings by segment in the second quarter.
*Note regarding quarterly earnings for the Group
Many of the Group’s customers have business years from April through March of the following year. Further,fulfilment obligations for many transactions are judged to be satisfied at a certain point, so the Group’s sales andprofit tend to be concentrated in September and March, the halfway and endpoints of the fiscal year.

5

Information Network Solutions
In the first half of the year ending March 2022, the Information Network Solutions business booked orders of¥50,175 million (down 0.9% year-on-year), net sales of ¥40,022 million (down 7.3% year-on-year), and operating
income of ¥532 million (up 187.6% year-on-year). While orders and net sales were down on the year earlier,
operating profit increased significantly.
Results by business model
Equipment: In the equipment business, an ongoing project from the previous year to supply smartphones for
insurance industry sales personnel progressed through the first half. We also received orders to supply
equipment for medical and educational institutions. However, the business was affected by theabsence of large orders seen in the same period a year earlier and lower orders for PCs used inremote working, as well as some delivery delays due to the semiconductor shortage. Orders totaled¥20,067 million (down 16.3% year-on-year) and net sales were ¥13,899 million (down 27.1% year-onyear).
Development and construction: Following on from the first quarter of the current year, there was increased
demand for expanded networks and enhanced security projects. However, a decline in orders in thefirst quarter affected sales in the second quarter, leading to net sales of ¥6,214 million (down 0.8%
year-on-year). There were also signs of lower sales due to the shift to the service model (LCM
services). However, we made good progress on winning systems development deals in the second
quarter after numerous delays due to the pandemic, which led to significant growth in orders at ¥8,435
million (up 15.1% year-on-year).
Service: The business posted significant growth from contracts for LCM services won in the first quarter andgrowth in cloud-based contact center services, for orders of ¥21,672 million (up 12.1% year-on-year)
and net sales of ¥19,908 million (up 11.7% year-on-year).
Profit increased significantly from year-earlier levels. In addition to improved cost of sales in development andconstruction projects and equipment contracts, increased service sales from cloud-based contact center and otherservices contributed to profit.
Electronic Devices
The Electronic Devices segment booked orders of ¥18,400 million (up 83.4% year-on-year), net sales of¥13,078 million (up 32.9% year-on-year), and operating income of ¥266 million (up 637.3% year-on-year). Orders,sales, and operating income all improved significantly on the year earlier. Orders in particular grew sharply as
efforts to secure products accelerated during the global semiconductor shortage following on from the firstquarter.
In the devices business, orders and sales were strong. In addition to strong demand from the factory
automation (FA) equipment and automotive industries, the supply-demand situation for semiconductors and othercomponents tightened further, spurring efforts by customers to secure components for strategic reasons.
In the systems business, orders and net sales grew significantly from increased demand for LCD panels for onboard automotive information devices and SSD products. Also, the Olympics sparked higher demand for HDDs
used in consumer electronics, and demand for servers used in factory facilities from the FA equipment market
increased.
Profit grew sharply on the year earlier. In both the devices and systems businesses, there was a positive impact
from higher sales as we worked to procure volume amid a tight supply of parts. In addition, the Company used
teleworking and curtailed business trips in Japan and overseas during the pandemic, lowering costs.

6

The following tables show sales and orders by segment in the second quarter of the fiscal year ending March,
2022.
(1) Net sales by segment (millions of yen)
Second quarter,year ended
March 2021
Information Network Solutions
43,162Equipment
19,073Development and construction
6,266
Service
17,822
Electronic Devices
9,843
Total
53,006
Note: Inter-segment transactions are offset and eliminated.

Second quarter, year ending March 2022
Versus second quarter ofprevious year
40,022
13,8996,214
19,90813,07853,100(3,140)(5,173)
(52)
2,085
3,235
94

92.7%
72.9%
99.2%
111.7%
132.9%
100.2%(2) Orders by segment (millions of yen)
Second quarter,year ended
March 2021
Information Network Solutions
50,642Equipment
23,975Development and construction
7,331
Service
19,335
Electronic Devices
10,034
Total
60,677
Note: Inter-segment transactions are offset and eliminated.

Second quarter, year ending March 2022
Versus second quarter ofprevious year
50,17520,067
8,435
21,672
18,40068,576(467)(3,908)
1,104
2,336
8,366
7,898

99.1%
83.7%
115.1%
112.1%
183.4%
113.0%(3) Order backlog by segment (millions of yen)
Second quarter,year ended
March 2021
Information Network Solutions
22,779Equipment
14,201Development and construction
4,918
Service
3,659Electronic Devices
5,707
Total
28,487
Note: Inter-segment transactions are offset and eliminated.

7

Second quarter, year ending March 2022
Versus second quarter ofprevious year
24,7381,958
108.6%
14,993791
105.6%
5,852
934
119.0%
3,892
233
106.4%
13,204
7,496
231.3%
37,942
9,455
133.2%

(2) Financial position
Assets totaled ¥73,837 million at the end of the quarter under review, down by ¥2,363 million from the end of
the previous fiscal year. The main factors were a decline of ¥6,871 million in trade notes and accounts receivableand contract assets, an increase of ¥2,726 million in cash and deposits, and an increase of ¥1,714 million ininventory assets.
Liabilities totaled ¥42,296 million at the end of the quarter, down by ¥2,732 million from the end of the previous
year. The main factor was a decline of ¥3,443 million in trade notes and accounts payable.
Net assets totaled ¥31,540 million at the end of the quarter, increasing ¥369 million from the end of the previous
year, and the shareholders’ equity ratio was 42.4% (40.6% at the end of the previous year). The main factors in
the increase were the disposal of treasury stock for ¥128 million due to the transfer of shares under the stockgrant schemes for directors and employees, an increase of ¥148 million yen in valuation difference on availablefor-sale securities, and an increase of ¥74 million yen in remeasurements of defined benefit plans.
Due to the application of the Accounting Standard for Revenue Recognition, retained earnings at the start of theyear increased by ¥76 million.

(3) Consolidated earnings forecasts and other information concerning the outlook
In the first half of the fiscal year, state-of-emergency declarations and measures to prevent the spread of
COVID-19 raised concerns that extended self-restraint on going out would continue to constrain marketing
activities. However, progress was largely in line with our initial expectations.
For the third quarter onward, there are expectations that economic activities will recover as the state-ofemergency declaration has been lifted. However, the outlook for the global economy remains uncertain, so there
is no change to the consolidated earnings outlook for the year ending March 2022 announced on May 14, 2021.
The Company will promptly inform our stakeholders if material matters arise due to a change in the coronavirus
situation or other factors.

8

2. Consolidated financial statements and notes(1) Quarterly consolidated balance sheet(Millions of yen)
As of March 31, 2021
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable – trade
Notes and accounts receivable – tradeand contract assets
Electronically recorded monetary claims
Inventories
Income taxes receivable
Other
Allowance for doubtful accounts
Total current assets
Noncurrent assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation
Buildings and structures (net)
Machinery, equipment and vehicles
Accumulated depreciation
Machinery, equipment and vehicles
(net)
Land
Lease assets
Accumulated depreciation
Lease assets (net)
Construction in progress
Other
Accumulated depreciation
Other (net)Total property, plant and equipment
Intangible assets
Goodwill
Lease assets
Other
Total intangible assets
Investments and other assets
Investment securities
Long-term loans receivable
Deferred tax assets
Other
Allowance for doubtful accounts
Investments and other assets
Total noncurrent assets
Total assets

9

As of September 30, 2021

15,94427,94818,671－－

21,076

3,817
7,619
98
1,390
(77)
56,740

3,568
9,334
－
1,925
(73)
54,502

1,696
(891)
805
7
(6)

2,119
(885)
1,233
7
(6)

1

1

1,769
5,777
(3,240)
2,536
821
1,006
(676)
329
6,264

1,775
5,901
(3,584)
2,316
84
1,130
(621)
509
5,919

226
549
2,191
2,967

181
877
2,233
3,292

4,766
34
4,131
1,377
(81)
10,22819,46076,200

4,697
32
4,147
1,300
(55)
10,122
19,33473,837

(Millions of yen)
As of March 31, 2021
Liabilities
Current liabilities
Notes and accounts payable – trade
Short-term loans payable
Current portion of long-term loans payable
Lease obligations
Income taxes payable
Provision for bonuses
Other
Total current liabilities
Noncurrent liabilities
Long-term loans payable
Lease obligations
Deferred tax liabilities
Net defined benefit liability
Long-term accounts payable – other
Other provision
Other
Total noncurrent liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive
incomeNoncontrolling interests
Total net assets
Total liabilities and net assets

15,875
4,894
161
1,428
241
2,415
5,020

10

As of September 30, 2021

30,037

12,432
5,146
3,061
1,436
483
2,197
5,189
29,945

4,443
1,921
7
7,959
26
548
82
14,99145,029

1,463
1,999
6
8,091
26
646
115
12,35042,296

9,812
2,581
21,150(2,472)
31,0729,812
2,581
21,143(2,344)
31,193

1,485

1,634

(3)
52
(1,672)(6)
61(1,597)

(137)

91

236
31,171
76,200256
31,54073,837

(2) Quarterly consolidated statements of income and comprehensive income(Quarterly consolidated statement of income)(Millions of yen)Six months ended
September 30, 2020
Net sales
Cost of sales
Gross profit
Selling, general, and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Foreign exchange gains
Insurance income
Other
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on step acquisitions
Gain on sales of investment securities
Total extraordinary income
Extraordinary loss
Loss on retirement of noncurrent assets
Loss on valuation of investment securities
Total extraordinary losses
Income before income taxes and others
Income taxes
Net income
Profit attributable to noncontrolling interests
Profit attributable to owners of parent

11

Six months ended
September 30, 2021

53,00643,915
9,090
8,869
221

53,10043,310
9,789
8,990
798

1
54
－
－
37
93

1
58
8
33
29
130

63
8
12
84
230

64
－
9
73
855

13
35
49

－
3
3

3
69
73
206
57
149
－
149

1
－
1
857
283
574
81
492

(Quarterly consolidated statement of comprehensive income)(Millions of yen)Six months ended
September 30, 2020
Net income
Other comprehensive income
Valuation difference on available for salesecurities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Other comprehensive income
Comprehensive income
BreakdownComprehensive income attributable to ownersof parent
Comprehensive income attributable tononcontrolling interests

12

Six months ended
September 30, 2021
149

574

354

148

(2)
(7)
19
363
512

(2)
8
74
229
803

512

721

－

81

(3) Quarterly consolidated statement of cash flows(Millions of yen)Six months ended
September 30, 2020
Cash flows from operating activities
Income before income taxes and others
Depreciation and amortization
Goodwill amortization
Increase (decrease) in provision for doubtful
accounts
Increase (decrease) in provision for bonuses
Increase (decrease) in net defined benefit
liability
Increase (decrease) in provision for losses onorders received
Increase (decrease) in other provisions
Interest and dividend income
Interest expenses
Foreign exchange loss (gain)
Loss (gain) on step acquisitions
Loss (gain) on sale of investment securities
Loss (gain) on sale of noncurrent assets
Loss (gain) on valuation of investment
securities
Other non-operating loss (gain)
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Decrease (increase) in other assets
Increase (decrease) in notes and accounts
payable – trade
Increase (decrease) in accrued consumption
taxes
Increase (decrease) in other liabilities
SubtotalInterest and dividends received
Interest paid
Other revenue
Other expenses
Income taxes paid
Refund of income taxes
Cash flows from operating activities

13

Six months ended
September 30, 2021

206
1,189
－

857
1,277
45

25

(29)

(269)

(217)

(203)

173

(96)

－

191
(56)
63
8
(13)
(35)
3

98
(59)
64
1
－
(3)
1

69

－

(24)
6,883
(2,297)
(30)

(53)
7,179
(1,706)(534)(3,398)(3,454)

(913)

(749)

(533)
767
56
(63)
37
(12)
(636)
4
154

867
3,758
59
(64)
62
(9)
(97)
226
3,935

(Millions of yen)Six months ended
September 30, 2020
Cash flows from investing activities
Outflows from transfers to time deposits
Purchase of property, plant and equipment
Proceeds from sale of property, plant andequipment
Purchase of intangible assets
Proceeds from sale of intangible assets
Purchase of investment securities
Proceeds from sale of investment securities
Purchase of shares in subsidiary resulting inchange in scope of consolidation
Outflows from payment of loans receivable
Proceeds from collection of loans receivable
Other
Cash flows from investing activities
Cash flows from financing activities
Net increase (decrease) in short-termborrowings
Repayment of finance lease obligations
Repayment of long-term borrowings
Acquisition of treasury stock
Proceeds from disposal of treasury stock
Dividend payments
Dividends paid to noncontrolling interests
Cash flows from financing activities
Effect of exchange rate changes on cash andcash equivalents
Net increase (decrease) in cash and cash
equivalents
Cash and cash equivalents at beginning of theperiodCash and cash equivalents at end of the period

14

Six months ended
September 30, 2021

(0)
(704)

－
(813)

259

821

(387)
107
(22)
53

(476)
114
(21)
303

(246)

－

－
1
73
(865)

(0)
1
19
(50)

37

246

(791)
(10)
(264)
385
(818)
－
(1,462)

(821)
(80)
(0)
128
(578)
(62)
(1,167)(10)

8(2,183)

2,726

18,45615,927

16,272

18,653

(4) Notes to quarterly consolidated financial statements(Notes on premise of going concern)
Not applicable.

(Notes on significant changes in the amount of shareholders equity)
Not applicable.
(Application of special accounting methods in the preparation of quarterly consolidated financial statements)(Calculation of tax expense)
Tax expenses are calculated by reasonably estimating the effective tax rate after applying tax effect accounting
to income before income taxes for the fiscal year, including the second quarter, and multiplying quarterly income
before income taxes by the estimated effective tax rate.
Note: Income taxes – deferred are included in income taxes.
(Changes in accounting policies)(Application of Accounting Standard for Revenue Recognition)
The Company began applying the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29,
March 31, 2020, “revenue recognition standard” below) from the start of the first quarter. The Company
recognizes revenue when control of promised goods or services is transferred to the customer, in the amount
expected to be received in exchange for the goods or services.
Previously, the Company applied the percentage of completion method for systems development contracts
when the outcome was deemed certain. However the Company has changed its revenue recognition method.
Now, when control over goods or services is transferred to the customer over a certain period, the Company
recognizes revenue for that period as its obligation to transfer the goods or services to the customer is satisfied.
To measure the progress toward fulfilling obligations for each reporting period, costs incurred until the last day ofthe period as a percentage of total expected costs are calculated. Also, when it is not possible to reasonably
estimate progress in the initial phase of a contract, but the Company expects to recover costs incurred, theCompany recognizes revenue under the cost recovery method. For contracts with a very short period from thestart of the transaction until the obligation is expected to be fully satisfied, the Company applies an alternative
treatment under which revenue is not recognized for a set period but only when the obligation is fully satisfied.
The Company has applied the revenue recognition standard in accordance with transitional treatmentprescribed in the proviso to paragraph 84 of the Accounting Standard for Revenue Recognition. The cumulative
effect of retroactively applying the new accounting policy prior to the beginning of the first quarter was added to or
deducted from retained earnings at the beginning of the first quarter, and the new accounting policy was applied
from the opening balance at the start of the first quarter. However, the Company has followed the treatmentprescribed in paragraph 86 of the Accounting Standard for Revenue Recognition, and did not retrospectively
apply the new accounting policy to contracts for which almost all of the revenue was recognized under theprevious treatment before the start of the first quarter. In addition, the Company has applied the treatmentprescribed in proviso 1 of paragraph 86 of the Accounting Standard for Revenue Recognition and accounted forcontract changes made before the beginning of the first quarter based on the contract terms after reflecting allcontract changes, and added or subtracted the cumulative effect of such changes to retained earnings at the
beginning of the first quarter.
As a result, second quarter net sales increased by ¥1,042 million, cost of sales increased by ¥826 million, andoperating income, ordinary income, and income before income taxes each increased by ¥216 million. Retained
earnings at the start of the year increased by ¥76 million. Because the Company applied the revenue recognition
standard, what was displayed as “Notes and accounts receivable – trade” under the current assets section of theprevious year’s balance sheet is “Notes and accounts receivable – trade, and contract assets” in the current year.
Further, in accordance with the transitional treatment prescribed in paragraph 89-2 of the Accounting Standard for15

Revenue Recognition, the prior year's consolidated financial statements have not been reclassified to conform to
the new presentation.
(Application of Accounting Standard for Fair Value Measurement)
The Company applied the Accounting Standard for Fair Value Measurement (ASBJ Statement No. 30, July 4,
2019, “fair value standard” below) from the start of the first quarter. In accordance with the transitional treatmentprescribed in paragraph 19 of the fair value standard and paragraph 44-2 of the Accounting Standard for Financial
Instruments (ASBJ Statement No. 10, July 4, 2019), the new accounting policy prescribed in the fair value
standard will be applied prospectively. There is no impact on the quarterly consolidated financial statements.

16

(Segment and other information)
Segment information
I Second quarter of previous year (April 1, 2020, to September 30, 2020)
1. Information on net sales and profit or loss by reporting segment(Millions of yen)Amountrecorded inquarterly
Adjustments
consolidated(Note 1)
financialstatements(Note 2)

Reporting segment
Information
Network
SolutionsElectronic
Devices

Total

Net sales
Net sales from externalcustomers
Intersegment net sales andtransfers
Total
Segment profit

43,162

9,843

53,006－53,006

2

113

115

(115)

－

43,165

9,956

53,121(115)

53,006

185

36

221

0

221

Notes:
1 Adjustments to segment profit are elimination of intersegment transactions.
2 Segment profit is adjusted with operating income in the quarterly consolidated income statements.
II Second quarter in current year (April 1, 2021, to September 30, 2021)
1. Information on sales and profit or loss by reporting segment(Millions of yen)Amountrecorded inquarterly
Adjustments
consolidated(Note 1, 2, 3)
financialstatements(Note 2)

Reporting segment
Information
Network
SolutionsElectronic
Devices

Total

Net sales
Net sales from externalcustomers
Intersegment net sales andtransfers
Total
Segment profit

40,022

13,07853,100－53,100

7

77

85

(85)

－

40,02913,15653,186(85)

53,100

532

266

798

0

798

Notes:
1 Adjustments to segment profit are elimination of intersegment transactions.
2 Segment profit is adjusted with operating income in the quarterly consolidated income statements.
2. Notes relating to changes in reporting segments, etc.
As noted in the section on accounting policy changes, the Company changed its accounting policy and applied
the Accounting Standard for Revenue Recognition from the start of the first quarter, and segment profit and loss
calculation methods have changed accordingly.
Due to the above changes, compared with the previous accounting treatment, Information Network Solutions
net sales increased by ¥1,042 million and segment profit by ¥216 million.

17