Consolidated Financial Results for the Fiscal Year Ended March 31, 2021 (JGAAP)May 14, 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 of general shareholders’ meeting:June 25, 2021
Scheduled date for dividend payment:
June 7, 2021
Scheduled date for filing consolidated financial statements:
June 25, 2021
Preparation of supplemental explanatory materials:
Yes
Results briefing to be held:
Yes (for institutional investors and securities analysts)
1. Consolidated financial results for the fiscal year ended March 31, 2021
(April 1, 2020, to March 31, 2021)(1) Consolidated operating results

Net sales

Millions of yen (rounded down), % figures are year-on-year change
Profit attributable toOperating income
Ordinary income
owners of parent

Year ended
120,004(4.3%)
3,202(28.2%)
3,361(26.6%)
2,346(25.6%)March 31, 2021
Year ended
125,366
5.5%
4,457
34.3%
4,577
31.0%
3,155
42.6%
March 31, 2020
Note: Comprehensive income was 2,157 million yen (+32.1%) in year ended March 31, 2021; 1,633
million yen (+1.8%) in year ended March 31, 2020.
Earnings
per share(yen)

Dilutedearnings per
share (yen)Ratio of profit toshareholders’equityRatio ofordinary
income to total
assetsRatio ofoperatingincome tonet salesYear ended
134.06
—
7.7%
4.4%
2.7%
March 31, 2021
Year ended
182.10
—
10.8%
5.9%
3.6%
March 31, 2020
Reference: Equity in earnings affiliates in year ended March 31, 2021, nil; in year ended March 31, 2020,
nil.
(2) Consolidated financial position
Total assets
Net assets
Shareholders’
Net assets per(millions of yen)(millions of yen)equity ratio
share (yen)Year ended
76,20031,17140.6%
1,760.87
March 31, 2021
Year ended
77,44829,75238.4%
1,706.19
March 31, 2020
Reference: Shareholders’ equity in year ended March 31, 2021, 30,934 million yen; in year ended March
31, 2020, 29,752 million yen.

1(3) Consolidated cash flows
Millions of yen
Cash and cash
equivalents at endof yearCash flows fromoperating activities

Cash flows frominvesting activities

Cash flows fromfinancing activities

749(1,271)(2,029)15,9278,025(8)(4,950)18,456

Year ended
March 31, 2021
Year ended
March 31, 2020

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

End ofsecondquarter

End ofthird
quarterYearend

Total

Total
annualdividend
payment(millionsof yen)Dividend
payoutratio(consolidated)

Ratio ofdividend
payout tonetassetsYear ended
—
10.00
—
45.00
55.00
1,000
30.2%
3.3%
March 31, 2021
Year ended
—
15.00
—
31.00
46.00
853
34.3%
2.7%
March 31, 2020
Year ended
—
23.00
—
24.00
47.00
30.6%
March 31, 2022
Note: The interim dividend for the year ended March 31, 2021 included a commemorative dividend of 5.0
yen per share to mark the transfer of the Company’s listing to the first section of the Tokyo Stock
Exchange.
3. Forecast of consolidated financial results for the fiscal year ending March 31, 2022
(from 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

20.5%

2,700

15.1%

Note: The Company manages earnings on an annual basis, so does not disclose first-half earnings
forecasts.

2

153.69

*Notes(1) Changes in significant subsidiaries (which affected the scope of consolidation) during the fiscal year:
None
Newly added ___ companies (names)
No longer consolidated ___ companies (names)(2) 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:(3) Number of shares outstanding (common stock)
1. Number of shares outstanding at
Year ended
year end (including treasury
March 31, 2021
stock)

None
None
None
None

Year ended
March 31,
22,177,894
2020
Year ended
2. Number of shares at year end
Year ended
2,610,056
March 31,4,739,641(treasury stock)
March 31, 2021
2020
Year ended
3. Average number of shares overYear ended
17,502,032
March 31,
17,328,507
the period
March 31, 2021
2020
Note: The number of treasury shares includes those held in the Employee Stock Ownership Plan (ESOP)
trust account (210,100 in year ended March, 2021), Directors’ Compensation Board Incentive Plan (BIP)
trust account (380,905 in year ended March 2021; 277,431 in year ended March 2020) and Stock-grant
ESOP trust account (486,750 in year ended March 2021; 472,650 in year ended March 2020).
20,177,894*The financial information in this report is not subject to audit 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
not intended to be a promise that the Company will achieve. Actual results may vary materially fromforecasts due to a variety 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 Thursday, May 27,
2021. The briefing materials distributed will be posted on the Company’s website promptly after thebriefing.

3

(Attachment)

Contents
1. Overview of results ............................................................................................................................. 5(1) Earnings ............................................................................................................................................. 5(2) Financial position .............................................................................................................................. 8(3) Cash flows ......................................................................................................................................... 8(4) Outlook ............................................................................................................................................... 9(5) Dividend policy and dividends for the year under review and coming year ............................ 9
2. Approach to selection of accounting standards ....................................................................... 10
3. Consolidated financial statements and notes ........................................................................... 11(1) Consolidated balance sheet ......................................................................................................... 11(2) Consolidated statements of income and comprehensive income .......................................... 13(3) Consolidated statement of changes in net assets..................................................................... 15(4) Consolidated statement of cash flows ........................................................................................ 17(5) Notes to consolidated financial statements ................................................................................ 19(Notes on premise of going concern) .......................................................................................... 19(Additional information) ................................................................................................................. 19(Segment and other information) ................................................................................................. 21(Per share information) .................................................................................................................. 25(Major subsequent events) ........................................................................................................... 25

4

1. Overview of results(1) Earnings
While the Japanese economy continues to recover, conditions remain difficult due to the spread of thenovel coronavirus (COVID-19), and the outlook is still uncertain.
In the Information Network Solutions segment, orders were solid from the third quarter onward, with thegrowth in demand for remote working arrangements under work-style reforms, GIGA School Conceptrelated orders, and cloud-based contact center solutions. However, over the year, the COVID-19
pandemic curtailed sales activities, and some customers reduced or postponed their ICT investments.
Orders, net sales, and operating income declined from a year earlier, due to the absence of elevatedreplacement demand for servers and PCs that existed in the year ended March 2020, as technicalsupport for some Microsoft products ended.
The year under review was the first in our medium-term management plan. Tsuzuki Denki Co., Ltd. andits subsidiaries (the “Group”) launched initiatives aimed at becoming an innovation service provider toassist digital transformation (DX) and boost competitiveness of our customers. We focused on developing
data use/application services and services to completely digitize all contract processes to support DX of
our customers, which is accelerating as society enters the “new normal” era. ComDesign Inc., oursubsidiary since September 30, 2020, began contributing to results in the third quarter in line with ourgoal of “reforming our business structure by expanding the services we offer,” one of the key priorities inour medium-term business plan.
In the Electronic Devices business, net sales declined. Sales of LCD panels for onboard automotive
information devices and SSDs increased and orders were above year-earlier levels, but HDD andembedded server business declined due to the pandemic, and there were also adjustments to factory
automation (FA) equipment production amid a tight supply situation for components. However, operating
income increased as costs declined.
As a result, the Group posted net sales of ¥120,004 million, down 4.3% from the previous year,
operating income of ¥3,202 million, down 28.2%, ordinary income of ¥3,361 million, down 26.6%, andprofit attributable to owners of parent of ¥2,346 million, down 25.6%.
Consolidated results by segment are as follows.
Information Network Solutions
In the equipment business, orders and net sales in the fourth quarter were solid due to large orders forlightweight PCs suitable for remote work and GIGA School Concept-related orders. Over the full year,
despite contributions from large smartphone deals for sales personnel in the financial and insurance
industry and server and storage equipment deals for public-sector customers, orders, net sales, and orderbacklog were below previous year levels due to the absence of elevated replacement demand for servers
and PCs that existed in the year ended March 2020, as technical support for some Microsoft products
ended.
In the development and construction business, despite progress on projects that had been delayed in
the third quarter due to COVID-19, projects mainly for customers in the healthcare, travel, apparel, andrailway industries were delayed and development and installation work was postponed. As a result,orders, net sales, and order backlog were down from the previous year.
In the service business, there was ongoing growth in maintenance and operation services for newly
sold equipment. In addition, ComDesign Inc. benefited from growing demand for new and expanded
installation of its cloud-based contact center solutions due to COVID-19. Therefore, orders, net sales, andorder backlog were all up from the previous year.
Income was below year-earlier levels. In addition to lower sales, large equipment installation deals andlower engineer utilization rates due to delayed development and construction projects resulted in higher
expense ratios.

5As a result, net sales in the Information Network Solutions segment were ¥97,848 million, down 4.2%
from the previous year, and operating income was ¥2,960 million, down 31.0%.
Electronic Devices
In the devices business, orders increased as the factory automation equipment and automobile
markets recovered, but net sales declined due to the tight supply of components.
In the system business, demand for HDDs used in consumer electronics and embedded servers for the
distribution market declined due to COVID-19, and the segment was also impacted by production
adjustments for FA equipment due to the tight supply of components. However, significant growth in sales
of LCD panels used in onboard automotive information devices, SSDs, and appliance server for GIGA
School Concept projects resulted in solid increases in orders and net sales.
Income grew year over year. In addition to a solid performance from the onboard automotive
information device business, costs declined as sales activities were curtailed during the pandemic.
In addition, net sales declined due to the transfer of shares in former consolidated subsidiary Mitsuki
Tsuzuki System Co., Ltd. on March 31, 2020.
As a result, net sales in the Electronic Devices segment were ¥22,155 million, down 4.8% from theprevious year and operating income was ¥242 million, up 48.2%.
Sales and orders by segment for the year ended March 31, 2021, are as described below.
Note: During the year under review, the Group revised its business classifications (including subsidiaries)
to gain a more accurate understanding of prevailing conditions. From the second quarter, the Group haschanged classifications of the Information Network Solutions segment from the previous “network
integration,” “system integration,” and “service business” as follows.
Revised classifications
Equipment: Sales of information and communication equipment
Development and construction: Provision of technical services in consulting, design, development, andsystem construction
Service: Operation and maintenance of information and communication equipment and software, etc.,
and provision of monthly cloud and other subscription services

6

Net sales by segment (millions of yen)
Year ended
March 2020
Information Network Solutions
102,104
Equipment
44,790Development and construction
19,668Service
37,645
Electronic Devices
23,261
Total
125,366
Note:
1 Inter-segment transactions are offset and eliminated.
2 The above figures do not include consumption tax.

Year ended March 2021
Versus previous year
97,848(4,256)95.8%
44,207(582)
98.7%
14,518(5,150)73.8%
39,122
1,476
103.9%
22,155(1,105)95.2%
120,004(5,362)
95.7%

Orders by segment (millions of yen)
Year ended
March 2020
Information Network Solutions
99,697Equipment
44,557Development and construction
17,995Service
37,145
Electronic Devices
21,528
Total
121,226
Note:
1 Inter-segment transactions are offset and eliminated.
2 The above figures do not include consumption tax.

Year ended March 2021
Versus previous year
97,134(2,563)
97.4%
43,733(823)
98.2%
14,296(3,698)
79.4%
39,104
1,958
105.3%
24,521
2,993
113.9%
121,655429
100.4%

Order backlog by segment (millions of yen)
Year ended
March 2020
Information Network Solutions
15,298Equipment
9,299
Development and construction
3,853
Service
2,146Electronic Devices
5,516
Total
20,815Note:
1 Inter-segment transactions are offset and eliminated.
2 The above figures do not include consumption tax.

7

Year ended March 2021
Versus previous year
14,584
8,825
3,630
2,128
7,882
22,467

(714)
(473)
(222)
(17)
2,365
1,651

95.3%
94.9%
94.2%
99.2%
142.9%
107.9%

(2) Financial position
Assets totaled ¥76,200 million at the end of the year in review, down by ¥1,247 million from the end of
the previous year. The main factor of decline was a ¥2,528 million decrease in cash and deposits and themain factor of increase was a ¥1,410 million increase in notes and accounts receivable – trade.
Liabilities totaled ¥45,029 million at the end of the year, down by ¥2,666 million from the end of theprevious year. The main factors were a ¥1,987 million decline in trade notes and accounts payable and a¥919 million decline in lease obligations.
Net assets totaled ¥31,171 million at the end of the year, up by ¥1,418 million from the end of theprevious year, and the shareholders’ equity ratio was 40.6% (38.4% at the end of the previous year). The
main factor in net asset growth was ¥2,346 million in profit attributable to owners of parent, and the main
factor in decreasing net assets was a decline of ¥1,097 million in remeasurements of defined benefit
plans.

(3) Cash flows
The Company recorded cash inflows of ¥749 million from operating activities, cash outflows of ¥1,271
million from investing activities, and cash outflows of ¥2,029 million from financing activities.
As a result, cash and cash equivalents declined by ¥2,528 million from the end of the previous year, to¥15,927 million. Cash flows and the main factors influencing them are as described below.
(Cash flows from operating activities)
Cash flows from operating activities came to ¥749 million (¥8,025 million in inflows in year ended March
2020; -90.7% on the year earlier). The main factors in variation were a ¥1,653 million increase in tradereceivables (¥2,438 million decrease in previous year) and ¥2,057 million decrease in notes and accounts
payable – trade (¥74 million decrease in previous year).
(Cash flows from investing activities)
Cash flows from investing activities came to ¥1,271 million in outflows (¥8 million in outflows in year
ended March 2020). The main factors in variation were proceeds of ¥791 million from the sale of property,
plant, and equipment (proceeds of ¥1,297 million in previous year) and proceeds of ¥113 million from thesale of investment securities (¥413 million in previous year).
(Cash flows from financing activities)
Cash flows from financing activities came to ¥2,029 million in outflows (¥4,950 million in outflows inyear ended March 2020; -59.0% on the year earlier). The main factor in variation was an ¥87 million
increase in short-term borrowings (¥2,810 million decrease in previous year).

Reference: Cash flow related indicators
Year ended March

2018

2019

2020

Shareholders’ equity ratio (%)
36.2
36.4
38.4
Market value based shareholders’
19.6
18.6
24.8
equity ratio (%)
Interest bearing debt to cash flow
8.4
19.8
1.7
ratio (years)
Interest coverage ratio (x)
12.8
5.3
56.6
Notes: Shareholders’ equity ratio = Shareholders’ equity/total assets
Market value based shareholders’ equity ratio = Market capitalization/total assets
Interest bearing debt to cash flow ratio (years) = Interest bearing debt/cash flow

8

2021
40.6
38.2
17.1
6.1

Interest coverage ratio = Cash flow/interest paid
*All calculations are based on consolidated financial data.
*Market capitalization = fiscal year-end closing share price x number of shares outstanding at fiscal yearend (excluding treasury shares and company shares held in ESOP trust account, Directors’Compensation BIP trust account and Stock-grant ESOP trust account).
*Cash flow used in calculations is cash flow from operating activities.
*Interest bearing debt includes all liabilities on the consolidated balance sheets that incur interest.

(4) Outlook
Looking ahead, we expect that the current uncertainty surrounding the Japanese economy will persist
as the COVID-19 pandemic continues to affect consumption behavior and corporate activities.
In these circumstances, companies in some sectors are making moves to reduce their ICT investment,
while others are using digital technologies to reinvent their businesses with the advent of the “newnormal” era. In particular, transforming work styles, including teleworking, has become a must for many
companies.
The Group is embracing the latest technology to foster innovation and remain our customers’ trusted
partner. To that end we launched a new medium-term business plan this year, entitled Innovation 2023.
Key priorities in our plan include reforming our business structure by expanding the service we offer;promoting data-driven businesses*1; and strengthening our management base to significantly improve thevalue we provide our customers.
Our initiatives focus on developing remote working environments, building zero trust security
infrastructure, and rolling out electronic contract services to support customers’ work-style transformation.
We also aim to upgrade cloud services for contact centers, which have become increasingly vital during
the pandemic. We will also step up our efforts to enhance the profitability of the Electronic Devices
business.
We forecast year ended March 2022 net sales of 122,000 million yen (+1.7% YoY), operating income of
4,000 million yen (+24.9% YoY), ordinary income of 4,050 million yen (+20.5% YoY), and profit
attributable to owners of parent of 2,700 million yen (+15.1% YoY).
Note: It is impossible to forecast when the COVID-19 pandemic will come under control. Depending on its
scope, sales activities may be constrained due to restrictions in going out, impacting earnings. If any
material matters arise, we will promptly inform our stakeholders.
*1 Data-driven businesses: We plan to create new data-centric businesses to support strategic planningand decision-making by comprehensively analyzing and using all forms of data.

(5) Dividend policy and dividends for the year under review and coming year
The Company views shareholder returns as a key management priority, and aims to continue
expanding earnings and increasing dividends, targeting a consolidated payout ratio of about 30%.
The Company also aims to share profit via consistent interim and year-end dividend payments linked toconsolidated earnings and to grow and effectively utilize retained earnings to boost corporate andshareholder value.
Note: The Company plans to deploy retained earnings to enhance its technological capabilities and fund
R&D, invest in business areas that have high growth potential and profitability, develop its human9resources by spending on education, and strengthen its financial position by reducing interest-bearing
debt.
In line with the above policy, the Company increased its year-end dividend per share forecast by ¥10from ¥21 for an ordinary dividend of ¥31 (bringing the annual dividend to ¥46, including ordinary interim
dividend of ¥10 and commemorative dividend of ¥5).
The Company plans to pay an annual dividend per share of ¥47 in the year ending March 2022.

2. Approach to selection of accounting standards
The Group uses Japanese generally accepted accounting principles (JGAAP) to facilitate comparisonswith other Japanese companies in our sector.

10

3. Consolidated financial statements and notes(1) Consolidated balance sheet(Millions of yen)
As of March 31, 2020
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable – trade
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

11

As of March 31, 2021

18,473
26,537
3,390
8,485
1
1,428
(77)
58,23915,94427,948
3,817
7,619
98
1,390
(77)
56,740

1,753
(924)
829
7
(5)

1,696
(891)
805
7
(6)

1

1

2,221
5,712
(2,402)
3,310
267
951
(700)
250
6,882

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

－
640
2,417
3,057

226
549
2,191
2,967

3,770
35
4,182
1,339
(58)
9,269
19,20877,448

4,766
34
4,131
1,377
(81)
10,22819,46076,200(Millions of yen)
As of March 31, 2020
Liabilities
Current liabilities
Notes and accounts payable – trade
Short-term loans payable
Current portion of long-term loans
payableLease obligations
Income taxes payable
Provision for bonuses
Provision for losses on orders received
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

12

As of March 31, 2021

17,863
4,802

15, 875
4,894

20

161

1,443
806
2,536
98
5,880
33,449

1,428
241
2,415
－
5,020
30,037

4,170
2,825
7
6,805
27
366
43
14,24547,695

4,443
1,921
7
7,959
26
548
82
14,99145,0299,812
2,581
21,021(3,785)29,6299,812
2,581
21,150(2,472)
31,072

690

1,485

(1)
10
(575)

(3)
52
(1,672)

123

(137)

－
29,75277,448236
31,171
76,200(2) Consolidated statements of income and comprehensive income(Consolidated statement of income)(Millions of yen)
Fiscal year ended
March 31, 2020
Net sales
Cost of sales
Gross profit
Selling, general, and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Dividends income of insurance
Foreign exchange gains
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 noncurrent assets
Gain on sales of investment securities
Total extraordinary income
Extraordinary loss
Loss on sales of noncurrent assets
Impairment loss
Loss on retirement of noncurrent assets
Loss on sales of investment securities
Loss on sales of subsidiaries’ stocks
Special retirement expenses
Loss on valuation of investment securities
Total extraordinary losses
Income before income taxes and others
Income taxes – current
Income taxes – deferred
Total income taxes
ProfitProfit attributable to noncontrolling interests
Profit attributable to owners of parent

13

Fiscal year ended
March 31, 2021

125,366
102,290
23,075
18,6184,457

120,004
98,53821,465
18,263
3,202

4
98
124
18
71
316

2
97
150
－
62
312

141
－
54
196
4,577

123
8
22
154
3,361

－
－
32
32

13
2
36
52

－
－
－
－
101
185
6
293
4,317
1,270
(109)
1,161
3,155
－
3,155

55
44
4
69
－
－
－
174
3,238
617
200
818
2,419
72
2,346

(Consolidated statement of comprehensive income)(Millions of yen)
Fiscal year ended
March 31, 2020
ProfitOther 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 toowners of parent
Comprehensive income attributable tononcontrolling interests

14

Fiscal year ended
March 31, 2021

3,155

2,419

(345)

795

(1)
(26)
(1,148)(1,522)
1,633

(2)
42
(1,097)
(261)
2,157

1,633

2,084

－

72

(3) Consolidated statement of changes in net assets
Fiscal year ended March 31, 2020
(Millions of yen)
Shareholders' equity
Retained
Shareholders'Capital surplus
Treasury stockearnings
equityCapital stock
Balance at beginningof fiscal year
Changes during theyear
Dividend fromsurplusProfit attributable toowners of parent
Purchase of treasury
stock
Disposal of treasury
stock
Cancellation oftreasury stock
Net changes of items
other thanshareholders’ equity
Total changes during
the year
Balance at end of the
year

9,812

3,100

19,973(5,816)

27,070

(709)

(709)

3,155

3,155
(0)

(0)

113

113

(519)

(1,398)

1,918

－

－

(519)

1,047

2,031

2,558

9,812

2,581

21,021(3,785)29,629

Accumulated other comprehensive income

Balance at
beginning of fiscal
year
Changes during
year
Dividend of
surplus

Valuation
Deferreddifference
gains oron available
losses on
for salehedgessecurities

1,036

－

NonForeign
Remeasurements
Other
controllingcurrencyof defined benefit comprehensive interests
translation
plans
incomeadjustment

36

572

1,646

－

3,155

Purchase oftreasury stock
Disposal oftreasury stock
Cancellation oftreasury stock

Total changes
during year
Balance at end ofyear

28,716(709)

Profit attributable toowners of parent

Net changes of
items other thanshareholders’ equity

Total net
assets

(0)
113
－
(345)

(1)

(26)

(1,148)(1,522)－(1,522)

(345)

(1)

(26)

(1,148)(1,522)

－

1,036

690

(1)

10

(575)

123

－

29,75215

Fiscal year ended March 31, 2021
(Millions of yen)

Balance at beginningof fiscal year
Changes during theyear
Dividend fromsurplusProfit attributable toowners of parent
Purchase of treasury
stock
Disposal of treasury
stock
Cancellation oftreasury stock
Net changes of items
other thanshareholders’ equity
Total changes during
the year
Balance at end of year

Shareholders' equity
Retained
Capital stock Capital surplus
Treasury stock Shareholders'earnings
equity
9,812

2,581

21,021(3,785)29,629(1,093)(1,093)

2,346

2,346

411

(664)

(664)

442

854

(411)

(1,122)

1,534

－

－

－

129

1,313

1,443

9,812

2,581

21,150(2,472)

31,072

Accumulated other comprehensive income

Balance at
beginning of fiscal
year
Changes during
year
Dividend of
surplus

Valuation
Deferreddifference
gains oron available
losses on
for salehedgessecurities

690

(1)

NonForeign
Remeasurements
Other
controllingcurrencyof defined benefit comprehensive interests
translation
plans
incomeadjustment

10

(575)

123

－

2,346

Purchase oftreasury stock
Disposal oftreasury stock
Cancellation oftreasury stock

Total changes
during year
Balance at end ofyear

29,752(1,093)

Profit attributable toowners of parent

Net changes of
items other thanshareholders’ equity

Total net
assets

(664)
854
－
795

(2)

42

(1,097)

(261)

236

(24)

795

(2)

42

(1,097)

(261)

236

1,418

1,485

(3)

52

(1,672)

(137)

236

31,17116

(4) Consolidated statement of cash flows(Millions of yen)
Fiscal year ended
March 31, 20210
Cash flows from operating activities
Income before income taxes and others
Depreciation and amortization
Impairment loss
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 noncurrent assets
Loss (gain) on sale of investment securities
Loss (gain) on valuation of investment securities
Loss on disposal of noncurrent assets
Loss (gain) on sale of subsidiaries’ stocks
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
Special retirement expenses paid
Other
Income taxes paid
Refund of income taxes
Cash flows from operating activities

17

Fiscal year ended
March 31, 2021

4,317
2,247
－
－

3,238
2,408
44
45

(96)

23

(24)

(133)

(235)

(171)

(56)

(98)

187
(102)
141
(18)
－
－
(32)
6
－
101
43
2,438
(447)
534

181
(99)
123
8
(13)
53
33
－
4
－
(190)
(1,653)
891
73

(74)

(2,057)

615

(332)

(98)
9,448
102
(141)
(185)
151
(1,351)
0
8,025

(566)
1,811
99
(123)
－
190
(1,234)5
749

(Millions of yen)
Fiscal year ended
March 31, 2020
Cash flows from investing activities
Outflows from transfers to time deposits
Proceeds from withdrawal of 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 accompanying sale of shares insubsidiary resulting in change in scope of
consolidation

Fiscal year ended
March 31, 2021

(0)
30
(917)

(0)
－
(1,245)

1,297

791

(1,258)
314
(43)
413

(945)
255
(38)
113

－

(148)

(133)

－

Outflows from payment of loans receivable－(3)

Proceeds from collection of loans receivable
Other
Cash flows from investing activities
Cash flows from financing activities
Net increase (decrease) in short-termborrowings
Proceeds from long-term borrowings
Repayment of long-term borrowings
Repayment of lease obligations
Acquisition of treasury stock
Proceeds from disposal of treasury stock
Dividend payments
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

8
281
(8)

5
(54)
(1,271)(2,810)87

4,180(4,098)(1,625)
(0)
113
(709)
(4,950)400(23)(1,590)(664)
854(1,093)(2,029)

(19)

22

3,046

(2,528)15,40918,456

18,45615,92718

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

(Additional information)
1 Transactions to deliver the Company’s shares to employees via a trust(Employee Stock Ownership Plan (ESOP) trust)
To provide benefits to its employees, the Company enters transactions to deliver its own shares to the
Employee Stock Ownership Plan via a trust. For accounting treatment of the relevant trust agreements,
the Company applies Practical Solution on Transactions of Delivering the Company’s Own Stock to
Employees etc. through Trusts (Practical Issues Task Force (PITF) No. 30, March 26, 2015). The
Company recognizes the difference on disposal when treasury shares are disposed of to the trust, andthe gains or losses on sales of shares sold by the trust to the ESOP, dividends from the Company on its
shares held by the trust, and trust-related expenses are recognized as liabilities.
(1) Overview of transactions
The Company has set up a trust whose beneficiaries are employees who are members of the ESOP
fulfilling certain conditions. Over a three-year period, the trust purchases the number of shares the ESOPis expected to purchase by third-party allocation, and subsequently, on a certain day every month, it sells
the shares to the ESOP. Upon termination of the trust, if there are trust earnings due to share priceappreciation, beneficiaries receive money in proportion to their contributions. If a loss on transfer arises
due to a decline in the share price and there are liabilities associated with trust assets, the Company will
reimburse the bank in a lump sum under guarantee provisions of the loan agreement. Therefore, there
will be no additional burden for employees.
(2) Company shares owned by the trust
The Company’s shares in the trust are recorded as treasury stock under net assets at the trust’s bookvalue (excluding incidental expenses). The book value of treasury stock and number of shares were ¥340
million and 210,100 respectively for the year ended March 2021.
(3) Book value of borrowings applying the gross value method¥400 million in the year ended March 2021.
2 Stock-grant schemes for directors, executive officers, and employees(Directors’ Compensation BIP trust and Stock-grant ESOP trust)
The Company has established a Directors’ Compensation Board Incentive Plan (BIP) trust for directors
and executive officers (excluding outside directors and nonresidents of Japan, “directors and others”
below). The purpose is to improve the Company’s medium to long-term earnings and corporate value,
and raise awareness of shareholder-oriented management.
It has also enhanced employee benefits with the establishment of a stock-grant ESOP trust for
employees. The purpose is to improve the Company’s medium- to long-term corporate value by raisingawareness of improvements in earnings and share price appreciation.
(1) Overview of transactions
The Directors’ Compensation BIP trust is a stock-based remuneration plan. The trust uses
remuneration of directors and others contributed by the Company as funds to acquire the Company’s
shares and provides directors and others with the shares and cash equivalent to the shares’ conversion
value.
The Stock-grant ESOP trust is an incentive plan. The trust acquires the Company’s shares and delivers
them to employees who fulfil certain conditions in accordance with the stock-grant rules.
(2) Company shares owned by the trusts
The Company’s shares in the trusts are recorded as treasury stock under net assets at the trusts’ bookvalue (excluding incidental expenses). The book value of treasury stock and number of shares held by

19

the Directors’ Compensation BIP trust were ¥267 million and 277,431 respectively in the previous fiscal
year and ¥463 million and 380,905 in the year under review. The book value of treasury stock andnumber of shares held by the Stock-grant ESOP trust were ¥456 million and 472,650 respectively in theprevious fiscal year and ¥492 million and 486,750 in the year under review.

20

(Segment and other information)
Segment information
1. Overview of reporting segments
The Group’s reporting segments are the constituent units of the Group for which separate financial
statements are available, and are periodically reviewed by the Board of Directors to decide on the
allocation of business resources and evaluate performance.
The Group is engaged in information network systems business. The Company and its consolidated
subsidiaries operate businesses as independent management units. It has grouped its businesses into
two segments, Information Network Solutions and Electronic Devices, based on similarities in economic
characteristics such as the services and product line-up they provide to customers. Segment businesses
are as follows.
Information Network Solutions segment◆ Equipment: Sales of information and communication equipment◆ Development and construction: Provision of technical services in consulting, design, development,
and system construction◆ Service: Operation and maintenance of information and communication equipment and software, andprovision of monthly cloud and other subscription services
Electronic Devices segment◆ Provision of device solutions and contract design and development
2. Calculation of segment sales, profit or loss, assets, liabilities, and other items
The accounting treatment for the reporting segments is generally the same as that used when
preparing consolidated financial statements.
Operating income figures are used for reporting segment profit.
Intersegment net sales and transfers are based on third-party transaction prices.

21

3. Segment sales, profit or loss, assets, liabilities, and other items
Fiscal year ended March 2020
(Millions of yen)Amountrecorded in
Adjustments consolidated(Note 1, 2, 3)
financialstatements(Note 4)

Reporting segment
Information
Network
SolutionsElectronic
Devices

102,104

23,261

125,366－

125,366

20

220

241

(241)

－

102,124

23,482

125,607(241)

125,366

Segment profit

4,289

163

4,452

4

4,457

Segment assets

46,471

18,636

65,107

12,341

77,448Segment liabilities

40,685

7,020

47,705(10)

47,695

2,220

27

2,247

－

2,247

2,861

2

2,864

－

2,864

Total

Sales
Sales to externalcustomers
Intersegment sales andtransfers
Total

Other
Depreciation
Increase in tangible andintangible fixed assets
Notes:

1 Adjustments to segment profit are elimination of intersegment transactions.
2 Adjustments to segment assets are elimination of intersegment transactions and assets related tooperating funds, long-term investment funds, and management divisions at submitting company.
3 Adjustments to segment liabilities are elimination of intersegment transactions.
4 Segment profit is adjusted with operating income in the consolidated income statements.

22

Fiscal year ended March 2021
(Millions of yen)Amountrecorded in
Adjustments consolidated(Note 1, 2, 3)
financialstatements(Note 4)

Reporting segment
Information
Network
SolutionsElectronic
Devices

97,84822,155120,004－

120,004

10

207

218

(218)

－

97,85822,363

120,222(218)

120,004

Segment profit

2,960

242

3,202

0

3,202

Segment assets

45,182

19,25864,44011,691

76,131

Segment liabilities

37,904

7,058

44,963(2)

44,960

2,385

22

2,408

－

2,408

Goodwill amortization

45

－

45

－

45

Impairment loss

44

－

44

－

44

2,162

4

2,167

－

2,167

Total

Sales
Sales to external customers
Intersegment sales andtransfers
Total

Other
Depreciation

Increase in tangible andintangible fixed assets
Notes:

1 Adjustments to segment profit are elimination of intersegment transactions.
2 Adjustments to segment assets are elimination of intersegment transactions and assets related tooperating funds, long-term investment funds, and management divisions at submitting company.
3 Adjustments to segment liabilities are elimination of intersegment transactions.
4 Segment profit is adjusted with operating income in the consolidated statement of income.

23

Related information
Fiscal year ended March 2020
1. Information by product and service
This is omitted because it is disclosed in the segment information.
2. Information by region(1) Net sales
This is omitted because net sales to external customers in Japan exceed 90% of the net sales in the
consolidated statement of income.
(2) Property, plant, and equipment
This is omitted because property, plant, and equipment located in Japan exceeds 90% of the property,
plant, and equipment on the consolidated balance sheet.
3. Information by major customer
This is omitted because none of the Company’s customers account for more than 10% of net sales in
the consolidated statement of income.

Fiscal year ended March 2021
1. Information by product and service
This is omitted because it is disclosed in the segment information.

2. Information by region(1) Net sales
This is omitted because net sales to external customers in Japan exceed 90% of the net sales in the
consolidated statement of income.
(2) Property, plant, and equipment
This is omitted because property, plant, and equipment located in Japan exceeds 90% of the property,
plant, and equipment on the consolidated balance sheet.

3. Information by major customer
This is omitted because none of the Company’s customers account for more than 10% of the net sales
in the consolidated statement of income.

24

(Per share information)
Fiscal year ended March 2020
Net assets per share (yen)Basic earnings per share (yen)Fiscal year ended March 2021

1,706.19
182.10Net assets per share (yen)Basic earnings per share (yen)Note: Diluted earnings per share is not statedbecause there are no dilutive shares.

1,760.87
134.06

Note: Diluted earnings per share is not statedbecause there are no dilutive shares.

Notes:
1. Treasury shares held in the Employee Stock Ownership Plan (ESOP) trust account, Directors’Compensation BIP trust account, and Stock-grant ESOP trust account are deducted from the total
number of shares outstanding at the end of the year for calculating net assets per share. This comprised
210,100 shares held in the Employee Stock Ownership Plan (ESOP) trust account in the year ended
March 2021; 277,431 shares in the year ended March 2020 and 380,905 shares in the year ended March
2021 in the Directors’ Compensation BIP trust account; and 472,650 shares in the year ended March
2020 and 486,750 shares in the year ended March 2021 in the Stock-grant ESOP trust account.
Treasury shares held in the Employee Stock Ownership Plan (ESOP) trust account, Directors’Compensation BIP trust account, and Stock-grant ESOP trust account are deducted in the calculation of
average number of shares outstanding during the year for calculating basic earnings per share. This
comprised 99,000 shares in the year ended March, 2020 and 93,133 shares in the year ended March
2021 in the Employee Stock Ownership Plan (ESOP) trust account; 284,440 shares in the year ended
March 2020 and 335,853 shares in the year ended March 2021 in the Directors’ Compensation BIP trust
account; and 476,613 shares in the year ended March 2020 and 482,896 shares in the year ended March
2021 in the Stock-grant ESOP trust account.
2. The basis for calculation of basic earnings per share is as follows:
Fiscal year ended
March 2020
Profit attributable to owners of parent (millions ofyen)Amounts not attributable to ordinary shareholders(millions of yen)
Profit attributable to owners of parent (millions ofyen) related to common stock
Average number of shares (thousands)(Major subsequent events)
Not applicable.

25

Fiscal year ended
March 2021

3,155

2,346

－

－

3,155

2,346

17,32817,502