Consolidated Financial Results for theYear ended March 31, 2019 [Japanese GAAP]May 9, 2019
Company name:
Stock code:
Representative:
Contact:

TOKAI Holdings Corporation
Stock listing:Tokyo Stock Exchange
3167
URL:
http://tokaiholdings.co.jp
Katsukiho Tokita, President & CEO
Kuniyoshi Muramatsu, Managing Executive Officer, General Manager of Administrative Headquarters
Telephone: +81-54-275-0007
Scheduled date of General shareholders' meeting:June 26, 2019
Scheduled date to submit Securities Report:
June 26, 2019
Supplementary materials on financial results:
Yes
Quarterly financial results briefing:
Yes (Institutional Investors only)(Figures are rounded to the nearest million yen)

1. Year ended March 31, 2019Consolidated Financial Results for the Year Ended March 31, 2019 (April 1, 2018
to March 31, 2019)(% figures represent year-on-year changes)(1) Consolidated Operating Results
Sales

Operating Profit

Net Income
Attributable to
Owners of the
ParentRecurring Profit

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

186,069

4.2

10,971(14.0)

11,191(12.4)

6,620

(9.8)

Year ended March 31, 2019Year ended March 31, 2018

(Note) Comprehensive income: 6,127 million yen in the Year ended March 31, 2019 (-3.9%)
6,373 million yen in the Year ended March 31, 2018 (-26.6%)
Net Income
per Share

Net Income per
Share (Diluted)

Return on
EquityRecurring Profit
to Total Assets

Operating Profit
Margin

Yen

Yen

%

%

%

Year ended March 31, 2019

59.36

-

12.6

7.9

6.8

Year ended March 31, 2018

51.19

50.45

11.4

6.8

5.9

(Reference) Equity in affiliates accounted for under the equity method: 4 million yen for the ended March 31, 201919 million yen for the ended March 31, 2018

(2) Consolidated Financial Position
Total Assets

Net Assets

Equity Ratio

Net Assets per Share

Millions of yen

Millions of yen%

Yen

Year ended March 31, 2019

167,606

63,89437.4

478.26

Year ended March 31, 2018

165,993

61,45036.3

460.66(Reference) Equity: 62,627 million yen for the Year ended March 31, 201960,320 million yen for the Year ended March 31, 2018
(Note) Applied "Partial Revision of Accounting Standard for Tax Effect Accounting" (ASBJ Statement No. 28, February
16, 2018) from the beginning of the fiscal year under review, and the consolidated financial position for the previous fiscal
year has been restated retrospectively.

(3) Consolidated Cash Flows
Cash Flows fromOperating Activities

Cash Flows from
Investing Activities

Cash Flows from
Financing Activities

Cash and Cash
Equivalents at theEnd of the Year

Millions of yen

Millions of yen

Millions of yen

Millions of yen

Year ended March 31, 2019

21,605(12,443)(8,147)

4,018

Year ended March 31, 2018

20,909(11,488)(9,527)3,004

2. Dividends
Annual Dividend
End of End of
YearQ2
Q3
end

End of
Q1

Total

Total
Dividends

Payout Ratio(Consolidated)

Dividend on
Equity(Consolidated)

Yen

Yen

Yen

Yen

Yen

Millions of yen%

Year ended March 31, 2018

―

14.00

―

14.00

28.00

3,678

54.7

6.2

Year ending March 31, 2019Year ending March 31, 2019
(Forecast)

―

14.00

―

14.00

28.00

3,678

47.2

6.0

―

14.00

―

14.00

28.00

44.6

3. Consolidated Earnings Forecasts for the Year Ending March 31, 2020 (April 1, 2019 to March 31, 2020)(% figures represent year-on-year changes)

Sales

Operating Profit

Recurring Profit

Millions of yen%

Millions of yen%

Six months ending
September 31, 2019

92,500

4.1

4,410

26.8

Year ending March
31, 2020

200,800

4.8

14,170

8.5

Millions of yen

Net Income Attributable Net Income
to Owners of the Parent per Share

%Millions of yen

%

Yen

4,360

21.7

2,360

35.8

18.02

14,040

5.9

8,230

5.9

62.85

*Notes(1) Changes in significant subsidiaries during the period under review (changes in specified subsidiaries affecting the scope of consolidation): No(2) Changes in accounting policies, estimates, and restatements
1) Changes in accounting policies accompanying revisions in accounting standards, etc.: No
2) Changes in accounting policies other than 1): No
3) Changes in accounting estimates: No4) Restatements: No(3) Number of shares issued (common stock)
1) Shares issued at the end of each period (including treasury stock):

FY3/2019

2) Number of shares of treasury stock at the end of each period:

FY3/2019

8,731,411 shares FY3/2018

8,736,412 shares

3) Average number of shares during the period (cumulative):

FY3/2019

130,947,058 shares FY3/2018

129,348,552 shares

139,679,977 shares FY3/2018

139,679,977 shares(Note) Board benefit trust shares(BBT) is included in the number of year-end treasury stock. (410,800 stocks at FY3/2019, 416,600 stocks at
FY3/2018)

For treasury shares to be deducted in calculation of the average number of shares during the fiscal year, the Company's

shares (412,722 stocks at FY3/2019, 417,158 stocks at FY3/2018) owned by the BBT are included.

(Reference) Overview of Non-Consolidated Operating Performance
Operating Performance for the Year ended March 31, 2019 (April 1, 2018 to March 31, 2019)(1) Non-Consolidated Operating Results(% figures represent year-on-year changes)
Sales

Operating Profit

Millions of yen

Net Income
Attributable to
Owners of the
ParentRecurring Profit%

Millions of yen%

Millions of yen%

Millions of yen%

Year ended March 31, 2019

10,420(21.1)

5,287(35.9)

5,295(35.8)

5,325(33.0)

Year ended March 31, 201813,203

99.9

8,252

472.5

8,248

496.0

7,947

463.4

Net Income per
Share

Net Income per
Share (Diluted)

Yen

Yen

Year ended March 31, 2019

40.67

-

Year ended March 31, 2018

61.45

60.56

(2) Non-Consolidated financial Position
Total Assets

Net Assets

Equity Ratio

Net Assets per Share

Millions of yen

Millions of yen%

Yen

Year ended March 31, 201997,232

39,98541.1

305.35

Year ended March 31, 2018

95,03438,33540.3

292.76(Reference) Equity: 39,985 million yen for the Year ended March 31, 201938,335 million yen for the Year ended March 31, 2018

*Information Regarding Execution of Quarterly Review ProceduresThis quarterly financial statement is not subject to the quarterly review procedures pursuant to the Financial Instruments and Exchange Act, and the review
procedures of quarterly financial statements pursuant to the Financial Instruments and Exchange Act have not been completed as of the release of thisdocument.

* Explanation regarding the Appropriate Uses of Earnings Forecasts and Other Notes
All earnings forecasts provided within this document are based on the most accurate information available at the time of the release of this document. Actual
results may differ from forecasts due to various factors going forward.

TOKAI Holdings Corporation (3167) Financial Results for the year ended March 31, 2019

[Attachment]

Contents
1. Overview of Operating Results and Financial Position········································································ 2(1)Overview of Operating Results ····························································································· 2(2)Overview of Financial Position ······························································································ 4(3)

Overview of Cash Flows ····································································································· 4(4)Basic Profit Distribution Policies and Dividends for the Current and Next Fiscal Years ······················· 5(5)Business and Other Risks ·································································································· 5

2. Status of the Corporate Group ··································································································· 10
3. Group Management Policy ······································································································· 12(1)

Basic Policy of Corporate Management ················································································ 12(2)Target Management Indices ······························································································· 12(3)Management Strategies and Items to Address over the Medium to Long Term································ 13

4. Basic Perspective on Selection of Accounting Standards ·································································· 15
5. Consolidated Financial Statements ····························································································· 16(1)Consolidated Balance Sheets ····························································································· 16(2)Consolidated Statements of Income and Consolidated Statements of Comprehensive Income ············ 19(3)Statement of Changes in Consolidated Shareholders’ Equity ······················································ 21(4)Consolidated Statements of Cash Flows ··············································································· 23(5)Notes to the Consolidated Financial Statements ······································································ 25(Notes on Premise of Going Concern) ················································································· 25(Significant Matters Forming the Basis of Preparing the Consolidated Financial Statements) ············· 25(Changes in Presentation Method) ····················································································· 28(Additional Information) ··································································································· 28(Notes to the Consolidated Balance Sheets) ········································································· 29(Notes to the Consolidated Statements of Income) ································································· 31(Note to the Consolidated Statements of Comprehensive Income) ·············································· 33(Notes to the Statement of Changes in Consolidated Shareholders’ Equity) ·································· 34(Notes to the Consolidated Statements of Cash Flows) ···························································· 36(Segment Information)····································································································· 37(Per-Share Information) ··································································································· 40(Important Subsequent Events) ························································································· 41

6. Non-Consolidated Financial Statements ·························································································· 42(1)Balance Sheets ··············································································································· 42(2)Statements of Income ········································································································ 44(3)Statement of Changes in Shareholders’ Equity········································································ 45

7. Other ································································································································· 47(1)

Changes in Executive Positions····························································································· 47

1

TOKAI Holdings Corporation (3167) Financial Results for the year ended March 31, 2019

1. Overview of Operating Results and Financial Position(1) Overview of Operating Results
Consolidated operating results for the fiscal year under review
During the consolidated fiscal year ended March 31, 2019, the Japanese economy was on a gradual recovery path, witha rally in personal consumption and steady improvement in the employment situation. However, the economic outlook
remains clouded by uncertainties in overseas economies, including trade friction and other factors.
Against this backdrop, during the fiscal year under review, the second year of the TOKAI Group’s Innovation Plan 2020
“JUMP” medium-term management plan, the TOKAI Group continued to cultivate existing businesses, conduct M&A, andparticipate in new businesses to expand its earnings base. In addition to realizing its existing vision of becoming a Total Life
1

2

Concierge (TLC)* , the Group aims for further growth by rolling out ABCIR+S* initiatives focused on utilizing new service
technologies with an eye toward next-generation businesses.
In the fiscal year ended March 31, 2019, with the success of measures to acquire new customers and increase orders,the Group booked sales of 191,600 million yen (+3.0% year on year) and posted significant growth in all profit categories,
with operating profit of 13,057 million yen (+19.0% year on year), recurring profit of 13,259 million yen (+18.5% year on year),and net income attributable to owners of the parent of 7,772 million yen (+17.4% year on year). The results for sales and all
profit categories were at record highs.
As of March 31, 2019, the number of continuing customers rose by 26 thousand from March 31, 2018 to 2,902 thousand,and members of the TLC Membership Service increased by 106 thousand to 805 thousand.
In addition, the Group carried out a number of other initiatives during the fiscal year under review. In June 2018, theGroup established a Kyushu sales office in Fukuoka Prefecture to have a presence in the Kyushu region for the liquefied
petroleum gas (LP gas) business. In September, the Group made CYZE Inc., a provider of in-house developed survey
systems mainly in the online research field, a consolidated subsidiary. In October, the Kanto Bureau of Economy, Trade andIndustry approved the transfer of city gas business operations in Shimonita-machi, Gunma Prefecture. In November, theGroup concluded a business alliance agreement with TOELL Co., Ltd., pertaining to water delivery operations. In February
2019, the Group launched Minna no Hatake, an urban garden service including gardening support. Furthermore, in March,
the Group concluded a partner agreement with iCracked Japan, Inc., and launched an iPhone repair service.
*1 Vision of becoming a TLC: The Group seeks to support comfortable living by customers in a comprehensive and detail-oriented way
through various services it offers, with the aim of enhancing customer satisfaction.
*2 ABCIR+S: An acronym formed from the first letters of AI, Big data, Cloud, IoT, Robotics, and Smartphones. It refers to the Group’s
strategies toward technological innovation.

Performance by segment was as follows.
(Gas and Petroleum)
In the LP gas business, amid intensifying competition from rival operators, the Group focused on customer growththrough measures such as strengthening acquisition in existing service areas, preventing contract cancellations, andexpanding into new areas. As a result, the number of customers rose by 22 thousand from March 31, 2018, to 628 thousand.
Sales rose 1.6% year on year to 65,565 million yen, partly due to a higher unit sales price accompanying an increase in raw
material prices.
In the city gas business, the number of customers rose by 2 thousand from March 31, 2018, to 56 thousand. Sales
totaled 12,412 million yen (+7.4% year on year) due to factors such as a higher unit sales price stemming from the fuel costadjustment regulations.
As a result, segment sales came to 77,977 million yen (+2.5% year on year), while operating profit was 4,434 million yen(-10.7% year on year) on higher procurement costs and lower gas unit consumption due to elevated temperatures.

(Building and Real Estate)2

TOKAI Holdings Corporation (3167) Financial Results for the year ended March 31, 2019

In the Building and Real Estate business, segment sales came to 20,090 million yen (+1.4% year on year) and operating
profit to 954 million yen (+45.5% year on year) on increased orders in home renovation business and robust building
construction and equipment installation business.
(CATV)In the CATV business, the Group aimed to increase customers through enhanced price competitiveness in the form of
discounts offered to customers signing up for broadcasting and communications packaged services, and discounts for
smartphone-related packaged services through alliances with major mobile phone carriers, and also worked to prevent
service cancellations. The Group also worked to improve customer satisfaction in the following areas. In broadcasting
services, it broadcast programs with extensive regional information, and promoted a switch to fiber-optic services, including
support for 4K broadcasting, which was launched in December 2018. In telecommunications services, the Group launched a
new ultra-high-speed fiber-optic network service with a maximum speed of 10Gbps. As a result of such measures,subscribers to the broadcasting service rose by 14 thousand from March 31, 2018, to 789 thousand, and those to thetelecommunications service increased by 17 thousand to 274 thousand.
The number of subscribers grew steadily in existing areas as well as from M&A activities conducted in the previous fiscal
year, resulting in segment sales of 30,511 million yen (+7.5% year on year) and operating profit of 4,442 million yen (+46.4%
year on year).
(Information and Communications Service)
In consumer-oriented services, amid intensifying competition from major mobile carriers, the number of Hikari
Collaboration customers increased by five thousand from March 31, 2018, to 327 thousand. However, the number ofcustomers for conventional internet service providers (ISPs) fell by 46 thousand to 419 thousand. Meanwhile, the number ofcustomers in the TOKAI-brand MVNO service LIBMO rose by 12 thousand to 41 thousand. As a result, segment sales
totaled 30,813 million yen (-2.8% year on year).
In corporate services, sales came to 20,421 million yen (+6.4% year on year), reflecting factors such as an increase inrecurring-revenue operations and an increase in contracted system development projects.
Due to these factors, segment sales were 51,234 million yen (+0.7% year on year), and operating profit was 2,593 million
yen (+39.0% year on year).
(Aqua)In the Aqua business, the Group actively worked to acquire customers mainly for “The gift of delicious water: Ulunom”
brand, targeting large-scale commercial and other facilities. The number of customers increased by 10 thousand from March
31, 2018, to 156 thousand. Efforts were also made to curtail distribution costs through a business alliance with TOELL Co.,Ltd.
As a result, segment sales came to 7,004 million yen (+13.0% year on year) and operating profit to 520 million yen(+1,895.8% year on year).
(Others)
Turning to other businesses, sales in the nursing care business came to 1,075 million yen (+3.8% year on year),
supported by an increase in the number of users. In the shipbuilding business, sales amounted to 1,520 million yen (+5.8%
year on year), reflecting an increase in work volume for ship repairs. In the bridal events business, sales came to 1,477
million yen (-3.7% year on year), reflecting a decline in the number of wedding ceremonies.
As a result, segment sales were 4,781 million yen (+1.6% year on year), and operating profit came to 217 million yen (28.0% year on year).

(2) Overview of Financial Position
As of March 31, 2019, total assets amounted to 167,606 million yen, up 1,612 million yen from March 31, 2018. This

3

TOKAI Holdings Corporation (3167) Financial Results for the year ended March 31, 2019

mainly reflected increases of 1,021 million yen in cash and deposits, 992 million yen in notes and accounts receivable–trade
stemming from growth in large orders, and 449 million yen in merchandise and finished goods on a rise in unit price of yearend inventories due to higher procurement costs (including for LP gas), despite a decrease of 1,101 million yen in investment
securities within investments and other assets driven by a decline in the mark-to-market valuation difference for investment
securities.
Total liabilities stood at 103,711 million yen, down 831 million yen from March 31, 2018. This was primarily due to adecrease of 851 million yen in the “other” category within current liabilities driven by factors such as customer acquisition
costs and lower equipment-related spending.
Net assets came to 63,894 million yen, up 2,444 million yen from March 31, 2018. This mainly reflected the payment of
3,678 million yen in dividends of surplus and a decrease of 974 million yen in valuation difference on available-for-salesecurities, along with the booking of 7,772 million yen in net income attributable to owners of the parent.

(3) Overview of Cash Flows
As of March 31, 2019, cash and cash equivalents stood at 4,018 million yen, up 1,014 million yen from March 31, 2018.
Cash flows from each activity during the fiscal year under review and the factors behind them are as follows.

(Cash flows from operating activities)
Net cash provided by operating activities was 21,605 million yen (up 696 million yen year on year). This increase wasattributable to net income before income taxes and the effect of depreciation and amortization expenses (non-cash items).

(Cash flows from investing activities)
Net cash used in investing activities was 12,443 million yen (down 955 million yen year on year), as a result of thepurchase of property, plant and equipment and intangible assets.

(Cash flows from financing activities)
Net cash used in financing activities was 8,147 million yen (up 1,380 million yen year on year). This was due torepayments of lease obligations and payments of dividends.
Below is a summary of major cash flow indicators.
Year ended
Year ended
Year ended
Year ended
March 31, 2015 March 31, 2016 March 31, 2017 March 31, 2018
Equity ratio (%)
Equity ratio on amarket-value basis (%)
Ratio of interest-bearing
debt to cash flow(times)Interest coverage ratio(times)(Notes) Equity ratio:
Equity ratio on a market-value basis:

Year ended
March 31, 2019

25.7

25.6

34.5

36.3

37.4

36.3

41.4

67.4

85.0

71.8

2.7

3.3

2.0

2.4

2.3

28.0

29.3

48.9

46.6

58.2

Shareholders’ equity/Total assets
Total value of shares at market price/Total assets

Ratio of interest-bearing debt to cash flow: Interest-bearing debt/Cash flow from operating activities
Interest coverage ratio:

Cash flow from operating activities/Interest payments* All financial indicators are calculated on a consolidated basis.
* Market capitalization is based on the year-end closing share price multiplied by the number of shares outstanding at year-end(excluding treasury stock).
* Operating cash flow is based on cash flows from operating activities in the consolidated statements of cash flows. Interestbearing debt covers bonds payable and loans payable in the consolidated balance sheets. Interest payments are based on theinterest paid amounts shown in the consolidated statements of cash flows.

(4) Future Outlook
Regarding the future outlook, although gradual economic expansion is forecast for Japan, competition for customers is
intensifying beyond the boundaries of business sectors and formats as companies from other industries enter the market

4TOKAI Holdings Corporation (3167) Financial Results for the year ended March 31, 2019and operators form alliances amid progress with deregulation.
The TOKAI Group’s main business is providing services to retail customers. Our goal is to realize the TLC concept as a
Total Life Concierge providing a range of daily life-related infrastructure.
In addition to the TLC concept, the Group began rolling out ABCIR+S initiatives focused on strengthening and expanding
earnings capability by improving the quality of existing services and creating new services. Through these efforts, we will
strive to achieve the targets laid out in the Innovation Plan 2020 “JUMP” medium-term management plan.
Consolidated earnings forecast for the fiscal year ending March 31, 2020
Sales

200,800 million yen(+4.8% year on year)

Operating profit

14,170 million yen(+8.5% year on year)

Recurring profit

14,040 million yen(+5.9% year on year)

Net Income attributable to owners of the parent

8,230 million yen(+5.9% year on year)

These earnings forecasts are based on the information currently available to the Company. Actual results may differ fromforecasts due to a variety of factors.

(5) Basic Profit Distribution Policies and Dividends for the Current and Next Fiscal Years
The Company’s basic policy on profit distribution is to maintain stable dividends that reflect consolidated earnings.
For the fiscal year ended March 31, 2019, we have set annual dividends of 28 yen per share, comprising an interim
dividend of 14 yen and a year-end dividend of 14 yen.

Similarly, for the fiscal year ending March 31, 2020, we target annual dividends of 28 yen per
share, comprising interim and year-end dividends of 14 yen each.

2. Basic Perspective on Selection of Accounting Standards
As the Group conducts its operations primarily in Japan, with little overseas activity, we intend to comply withJapanese accounting standards for the foreseeable future. However, we will consider the adoption of international
accounting standards, taking into account various situations in Japan and overseas.

5

TOKAI Holdings Corporation (3167) Financial Results for the year ended March 31, 2019

3. Consolidated Financial Statements(1) Consolidated Balance Sheets(Millions of yen)

As of March 31, 2018

As of March 31, 2019

Cash and deposits

3,143

4,164

Notes and accounts receivable–trade23,806

24,798Merchandise and finished goods

3,723

4,173

Work in process

849

660

Raw materials and supplies

817

865

Other

7,990

8,264

Allowance for doubtful accounts

(379)

(419)

40,93142,506

AssetsCurrent assets

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

118,294

121,393

Accumulated depreciation(84,014)(87,636)

Buildings and structures, net*1 34,280

33,756

Buildings and structures

93,93396,983

Accumulated depreciation(70,836)(73,391)

Buildings and structures, net*1 23,096

23,592

Land

22,842

22,921

Leased assets

23,67524,124

Accumulated depreciation(11,948)(11,863)

Leased assets, net

11,727

12,260315

217

14,71315,027(10,165)(10,745)

4,548

4,281

96,81097,030

5,430

5,044

585

544

Other

5,182

5,539

Total intangible assets

11,198

11,128

9,096

7,995

83

58

Deferred tax assets

1,122

2,085

Net defined benefit asset

2,650

2,365

Other

5,013

4,819

Allowance for doubtful accounts

(518)

(386)

Total investments and other assets

17,447

16,937

125,455

125,0973

2

166,391

167,606

Machinery, equipment and vehicles

Construction in progress
Other, net
Accumulated depreciation
Other, net
Total property, plant and equipment
Intangible assets
Goodwill
Leased assets

Investments and other assets
Investment securities
Long-term loans receivable

Total non-current assets
Deferred assets
Total assets

6

TOKAI Holdings Corporation (3167) Financial Results for the year ended March 31, 2019

(Millions of yen)
As of March 31, 2018

As of March 31, 2019

Liabilities
Current liabilities
Notes and accounts payable–trade

15,67015,021

Short-term loans payable

23,672

22,265Current portion of bonds

198

168

lease obligations

3,488

3,533

Income taxes payable

2,966

3,491

Provision for bonuses

1,329

1,285

328

419

Other

16,051

15,199Total current liabilities

63,70561,385398

230

Other accruals

Non-current liabilities
Bonds payable

26,711

27,940

Lease obligations

9,684

9,961

Other accruals

132

149

Net defined benefit liability

575

719

Other

3,336

3,325

Total non-current liabilities

40,83742,325

104,543

103,711

Capital stock

14,00014,000Capital surplus

25,52525,527Retained earnings

17,76821,863

Treasury stock(2,223)(2,222 )Total shareholders’ equity

55,06959,167

2,548

1,573

-

(319)

Foreign currency translation adjustment

(3)

(10)

Remeasurements of defined benefit plans

2,706

2,217

Total accumulated other comprehensive income

5,250

3,460

Non-controlling interests

1,130

1,267

Total net assets

61,45063,894

166,391

167,606

Long-term loans payable

Total liabilities
Net assets
Shareholders’ equity

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains (losses) on hedges

Total liabilities and net assets

7

TOKAI Holdings Corporation (3167) Financial Results for the year ended March 31, 2019(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income(Consolidated Statements of Income)(Millions of yen)
Fiscal year ended

Fiscal year ended

March 31, 2018

March 31, 2019

Sales

186,069

191,600

Cost of sales

110,733

115,441

Gross profit

75,33676,159Selling, general and administrative expenses

64,365

63,101

Operating profit

10,971

13,057

Interest income

109Dividend income

192

181

Commission fee

91

42

Other

480

421

Total non-operating profit

774

655

Interest expenses

436

360

Other

118

92

Total non-operating expenses

555

453

11,191

13,259Gain on sales of non-current assets

2

1

Transmission line facility subsidies

161

177

1

5

Gain on sales of investment securities

528

0Gain on bargain purchase135-

Total extraordinary income

829

183

0

4

Loss on retirement of non-current assets

925

821

Impairment loss

66

73

Non-operating profit

Non-operating expenses

Recurring profit
Extraordinary income

Subsidy income

Extraordinary losses
Loss on sales of non-current assets

Loss on sales of investment securities

0-

Loss on valuation of investment securities

15

50

Gain on step acquisitions

105

-

-

30

Total extraordinary losses

1,113

1,029

Net income before income taxes

10,907

12,413

Income taxes (current)

3,662

4,287

Income taxes (deferred)

514

209

Total income taxes

4,176

4,496

Net income

6,730

7,917

109

144

6,620

7,772

Other

Net income attributable to non-controlling interests
Net income attributable to owners of the parent

8

TOKAI Holdings Corporation (3167) Financial Results for the year ended March 31, 2019

(Consolidated Statements of Comprehensive Income)(Millions of yen)
Fiscal year ended

Fiscal year ended

March 31, 2018

March 31, 2019

6,730

7,917

Valuation difference on available-for-sale securities

421

(974)

Deferred gains (losses) on hedges

(720)

(319)

Foreign currency translation adjustment(3)3Remeasurements of defined benefit plans, net of tax

(61)

(489)

8

(9)

(356)

(1,789)

6,373

6,127

6,265

5,982

108

145

Net income
Other comprehensive income

Share of other comprehensive income of entities accounted for using
the equity method
Total other comprehensive income
Comprehensive income(Breakdown)Comprehensive income attributable to owners of the parent
Comprehensive income attributable to non-controlling interests

9

TOKAI Holdings Corporation (3167) Financial Results for the year ended March 31, 2019(3) Statement of Changes in Consolidated Shareholders’ Equity
Year ended March 31, 2018 (April 1, 2017–March 31, 2018)(Millions of yen)
Shareholders’ equity
Capital stock

Balance at beginning of period

Capital surplus

14,00024,286

Retainedearnings

Total shareholders’

Treasury stock

15,048equity(3,285)50,048Change during the year
Dividends of surplus - other capital surplus(100)

Dividends of surplus(3,900)(3,900)Net income attributable to owners of the parent

6,620

6,620

Conversion of convertible bonds with stockacquisition rights

1,338

Acquisition of treasury shares
Disposition of treasury shares

0

1,061

2,400

(1)

(1)

1

2

Purchase of shares of consolidated subsidiaries

0

Net changes of items other than shareholders' equity
Total change during the year
Balance at end of period

－

1,238

2,720

1,062

5,021

14,00025,525

17,768

ᇞ2,22355,069

Accumulated other comprehensive income
Valuation
Foreign
Non-controlling
Deferred gains
Remeasurements Total accumulateddifference on
currencyinterests
or losses onof defined benefit other comprehensive
available-for-saletranslation
hedgesplans
incomesecurities
adjustment
Balance at beginning of
period

2,126

720

ሺ9)

2,768

5,605

791

Total net
assets56,446

Change during the year
Dividends of surplus other capital surplus(100)

Dividends of surplus(3,900)Net income attributableto owners of the parent

6,620

Conversion of
convertible bonds withstock acquisition rights

2,400

Acquisition of treasury
shares(1)

Disposition of treasury
shares2

Purchase of shares of
consolidated
subsidiaries

0

Net changes of items
other thanshareholders' equity

421

(720)

5

(61)

(355)

338

(16)

Total change during the
year

421

(720)

5

(61)

(355)

338

5,004

Balance at end of period

2,548

－

(3)

2,706

5,250

1,130

61,45010

TOKAI Holdings Corporation (3167) Financial Results for the year ended March 31, 2019Year ended March 31, 2019 (April 1, 2018–March 31, 2019)(Millions of yen)
Shareholders’ equity
Capital stock

Balance at beginning of period

14,000Capital surplus

25,525Retainedearnings

Total shareholders’

Treasury stock

17,768equity(2,223)55,069Change during the year
Dividends of surplus - other capital surplus－

Dividends of surplus(3,678)(3,678)Net income attributable to owners of the parent

7,772

7,772

Conversion of convertible bonds with stockacquisition rights－

Acquisition of treasury shares(0)

Disposition of treasury shares

2

(0)

1

3

Purchase of shares of consolidated subsidiaries－

Net changes of items other than shareholders' equity
Total change during the year
Balance at end of period

－

2

4,094

0

4,097

14,00025,527

21,863(2,222)

59,167

Accumulated other comprehensive income
Valuation
Foreign
Non-controlling
Deferred gains
Remeasurements Total accumulateddifference on
currencyinterests
or losses onof defined benefit other comprehensive
available-for-saletranslation
hedgesplans
incomesecurities
adjustment
Balance at beginning of
period

2,548

－

(3)

2,706

5,250

1,130

Total net
assets61,450Change during the year
Dividends of surplus other capital surplus－

Dividends of surplus(3,678)Net income attributableto owners of the parent

7,772

Conversion of
convertible bonds withstock acquisition rights－

Acquisition of treasury
shares(0)

Disposition of treasury
shares3

Purchase of shares of
consolidated
subsidiaries－

Net changes of items
other thanshareholders' equity

(974)

(319)

(6)

(489)

(1,790)137(1,652)

Total change during the
year

(974)

(319)

(6)

(489)

(1,790)

137

2,444

Balance at end of period

1,573

(319

(10

2,217

3,460

1,267

63,894

11

TOKAI Holdings Corporation (3167) Financial Results for the year ended March 31, 2019(4) Consolidated Statements of Cash Flows(Millions of yen)
Fiscal year ended

Fiscal year ended

March 31, 2018

March 31, 2019

Cash flows from operating activities
Net income before income taxes and minority interests

10,907

12,413

Depreciation

14,173

13,960

Amortization of goodwill

1,173

1,130

Gain on bargain purchase

(135)

－

66

73

Increase in net defined benefit asset and liability

(283)

(328

Interest and dividend income

(202)

(191)

(Gain) loss on sale of investment securities

(528)

(0)

Interest expenses

436

360

(Gain) loss on sales of non-current assets(2)

3

Loss (gain) on valuation of investment securities

15

50

Loss on retirement of non-current assets

925

821

Loss (gain) on step acquisitions

105－

Increase (decrease) in notes and accounts payable(306)(1,269)(Increase) decrease in inventories

(333)

(306)

0

(550)

Impairment loss

Decrease (increase) in guarantee deposits

757

(673)

Increase (decrease) in accounts payable–other

530

(724)

Increase (decrease) in accrued consumption taxes

(173)

362

Other

(864)

(283)

Subtotal

26,26024,847

Income taxes paid

(5,351)(3,241)

Net cash provided by operating activities

20,90921,605Interest and dividend income received

265

242

Purchase of securities

(134)

(313)

Proceeds from sales of securities884

6(11,665)(12,423)

Proceeds from sales of tangible and intangible assets

197

214

Proceeds from contribution received for construction

187

441

1,175

(202)

56

－

Loan advances

－

(200)

Collection of loans receivable

54

25

(159)

(234)

(11,488)(12,443)

Increase (decrease) in notes and accounts payable–trade

Cash flows from investing activities

Purchase of tangible and intangible assets

Purchase of shares of subsidiaries resulting in change
in scope of consolidation
Proceeds from purchase of shares of subsidiaries
resulting in change in scope of consolidation

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

12

TOKAI Holdings Corporation (3167) Financial Results for the year ended March 31, 2019

(Millions of yen)
Fiscal Year Ended

Fiscal Year Ended

March 31, 2018

March 31, 2019

Cash flows from financing activities
Interest expenses paid

(448)

(371)

Net increase (decrease) in short-term loans payable

1,313

1,075

Repayments of lease obligations(3,560)(3,717)

Proceeds from long-term loans payable

10,701

10,500

Repayment of long-term loans payable(12,483)(11,753)

Redemption of bonds

(668)

(198)

Redemption of convertible bond-type bonds with share acquisition rights

(400)

－

Proceeds from share issuance to non-controlling shareholders

20－

Payments for acquisition of treasury stock

(1)

(0)

Proceeds from disposal of treasury shares

00(3,994)(3,673)(5)(7)(9,527)(8,147)

Cash dividends paid
Dividends paid to non-controlling interests
Net cash provided by (used in) financing activities

(0)

(0)

Net increase (decrease) in cash and cash equivalents

(106)

1,014

Cash and cash equivalents at beginning of period

3,111

3,004

Cash and cash equivalents at end of period

3,004

4,018

Effect of exchange rate change on cash and cash equivalents

13

TOKAI Holdings Corporation (3167) Financial Results for the year ended March 31, 2019(5) Notes to the Consolidated Financial Statements(Notes on Premise of Going Concern)
No items to report.

(Segment Information)
Segment Information

1. Overview of Reportable Segments
The Group’s reportable segments are constituent units of the Group for which discrete financial information can beobtained, and for which the Board of Directors can decide on the allocation of management resources and evaluate
operating performance. Consequently, the segments are principal categories that allow for regular consideration.
The Group establishes operational headquarters by product and service. Each operational headquarters drafts
comprehensive strategies for the products and services it handles, and conducts business activities accordingly.
Consequently, in principle the product- and service-specific operational headquarters that form this base comprise theGroup’s five reportable segments: Gas and Petroleum, Building and Real Estate, CATV, Information andCommunications, and Aqua.
The Gas and Petroleum segment sells LP gas, liquefied natural gas, other high-pressure gases, and petroleum
products; supplies city gas; sells related products; performs construction of related facilities and equipment; and operates
security business.
The Building and Real Estate segment constructs residential facilities and other buildings; develops, sells, and leases
real estate; sells construction materials and residential equipment; performs construction on buildings and ancillary
structures and facilities; and operates home renovation business.
The CATV segment operates broadcasting and internet connectivity utilizing CATV networks.
The Information and Communications services segment develops computer software; processes information;
provides internet connectivity; sells communications equipment; and performs agent operations.
The Aqua segment produces and sells bottled drinking water.

2. Method of Calculation of Amounts in Sales, Profit and Losses, Assets, Liabilities, and Other Items for
Each Reportable Segment
The accounting methods used in reportable business segments are the same as applied in “Significant Matters
Forming the Basis of Preparing the Consolidated Financial Statements.”
Profit for reportable segments is based on operating profit, and intersegment sales and transfers are conducted at
prevailing market prices.

14

TOKAI Holdings Corporation (3167) Financial Results for the year ended March 31, 2019

3. Information Related to Sales, Profit and Losses, Assets, Liabilities, and Other Items for Each
Reportable Segment
For the fiscal year ended March 31, 2018 (From April 1, 2017 to March 31, 2018)
OthersReportable segments

Gas and Building
Petrole- and Real CATV
Estateum
Sales
Sales to externalcustomers
Intersegment sales andtransfer
Subtotal
Segment profit (loss)
Segment assets
Other items
Depreciation
Goodwill amortization
Increase in property,
plant and equipment
and intangible assets

Information andCommunications

76,07319,80728,38650,894

217

1,204

777

3,295

76,291
4,967
60,57221,011655
24,884

29,163
3,035
34,58754,1901,866
32,318

4,287
413
5,382

692
—
714

5,513
730
6,309

2,553
28
3,177

Note 1

Aqua

Total

(Millions of yen)Amount in
Adjustments consolidated
Note 2statements ofNote 3incomeTotal

6,200 181,363

4,706

186,069—

186,069

5,658

190

5,848

(5,848)—6,363 187,021
26 10,550
4,853 157,216

4,896
301
4,941

191,918
10,852
162,157(5,848)118
3,836

186,069
10,971
165,993

83
0
110

13,677
1,173
16,309495—
352

14,173
1,173
16,661

163

546
—
615

13,594
1,173
16,198(Notes) 1. The “Others” category is a business segment not included in the reportable segments. This category includes businesses
such as bridal events, ship repair, insurance, and nursing care.
2. Adjustments are as follows:(1) Adjustments to segment profit (loss) are eliminations due to intersegment transactions.
(2) Upward adjustments in segment assets, depreciation, property, plant and equipment, and intangible assets are due toincreases in companywide assets, depreciation, property, plant and equipment, and intangible assets that are notallocated to individual reportable segments.
3. Segment profit (loss) is adjusted to match operating profit in the consolidated statements of income.

For the fiscal year ended March 31, 2019 (From April 1, 2018 to March 31, 2019)
OthersReportable segments

Gas and Building
Petrole- and Real CATV
Estateum
Sales
Sales to externalcustomers
Intersegment sales andtransfer
Subtotal
Segment profit (loss)
Segment assets
Other items
Depreciation
Goodwill amortization
Increase in property,
plant and equipment
and intangible assets

Information andCommunications

77,977

20,09030,511

51,234

231

1,108

733

3,155

78,208
4,434
62,10521,199954
24,306

31,244
4,442
34,95354,3902,593
31,948

4,328
454
5,273

681
1
170

5,091
661
6,886

2,809
6
2,385

Note 1

Aqua

Total

(Millions of yen)Amount in
Adjustments consolidated
Note 2statements ofNote 3incomeTotal

7,004 186,818

4,781

191,600—

191,600

5,409

171

5,580

ሺ5,580)—7,185 192,227
520 12,945
4,845 158,159

4,953
217
5,259

197,180
13,162
163,419

ሺ5,580)
ሺ105)
4,187

191,600
13,057
167,60690
6212

13,543
1,130
15,531416—
461

13,9601,130
15,993

180

543
—
602

13,453
1,124
15,319(Notes) 1. The “Others” category is a business segment not included in the reportable segments. This category includes businesses
such as bridal events, ship repair, insurance, and nursing care.
2. Adjustments are as follows:(1) Adjustments to segment profit (loss) are eliminations due to intersegment transactions.
(2) Upward adjustments in segment assets, depreciation, property, plant and equipment, and intangible assets are due toincreases in companywide assets, depreciation, property, plant and equipment, and intangible assets that are notallocated to individual reportable segments.
3. Segment profit (loss) is adjusted to match operating profit in the consolidated statements of income.

15

TOKAI Holdings Corporation (3167) Financial Results for the year ended March 31, 2019

Reference Information
For the fiscal year ended March 31, 2018 (From April 1, 2017 to March 31, 2018)
1. Information by Product and Service
This information is omitted because the same information is written in the Segment Information section.

2. Information by Region(1) Sales
This information is omitted because sales to customers in Japan account for more than 90% of sales in the
consolidated statements of income.

(2) Property, Plant and Equipment
This information is omitted because property, plant and equipment in Japan account for more than 90% of property,
plant and equipment in the consolidated balance sheets.

3. Information by Major Customer
This information is omitted because no customers account for 10% or more of sales in the consolidated statements ofincome.

For the fiscal year ended March 31, 2019 (From April 1, 2018 to March 31, 2019)
1. Information by Product and Service
This information is omitted because the same information is written in the Segment Information section.

2. Information by Region(1) Sales
This information is omitted because sales to customers in Japan account for more than 90% of sales in the
consolidated statements of income.

(2) Property, Plant and Equipment
This information is omitted because property, plant and equipment in Japan account for more than 90% of property,
plant and equipment in the consolidated balance sheets.

3. Information by Major Customer
This information is omitted because no customers account for 10% or more of sales in the consolidated statements ofincome.

Information Related to Impairment Loss of Non-current Assets by Reportable Segment
For the fiscal year ended March 31, 2018 (From April 1, 2017 to March 31, 2018)(Millions of yen)

Impairment loss

Gas andPetroleum

Building andReal Estate——

Information
andCATV
Communications
—
45

Aqua

Corporate or
elimination

Others
—

21

Total

—

66

For the fiscal year ended March 31, 2019 (From April 1, 2018 to March 31, 2019)(Millions of yen)

Impairment loss

Gas andPetroleum

Building andReal Estate

52—

Information
andCATV
Communications
—
20

16

Aqua

Corporate or
elimination

Others
—

—

—

Total
73

TOKAI Holdings Corporation (3167) Financial Results for the year ended March 31, 2019

Information Related to Amortization of Goodwill and Unamortized Balance by Reportable Segment
For the fiscal year ended March 31, 2018 (From April 1, 2017 to March 31, 2018)(Millions of yen)Amortization forthe year ended
March 31, 2018
Balance as ofMarch 31, 2018

Information
andCommunications

Corporate or
elimination

Gas andPetroleum

Building andReal Estate

413

—

730

28

—

0

—

1,173

1,100

—

4,329

—

—

0

—

5,430

CATV

Aqua

OthersTotal

For the fiscal year ended March 31, 2019 (From April 1, 2018 to March 31, 2019)(Millions of yen)Amortization forthe year ended
March 31, 2019
Balance as ofMarch 31, 2019

Information
andCommunications

Corporate or
elimination

Gas andPetroleum

Building andReal Estate

454

1

661

6

—

6

—

1,130

1,086

86

3,667

128

—

75

—

5,044

CATV

Aqua

Others

Total

Information on Negative Goodwill Generated for Each Reportable Segment
For the fiscal year ended March 31, 2018 (April 1, 2017 to March 31, 2018)
The CATV segment booked 135 million yen in negative goodwill, reflecting the net assets acquired and liabilities
assumed with the consolidation of TV Tsuyama Inc. exceeding the acquisition cost for the acquired company.

For the fiscal year ended March 31, 2019 (April 1, 2018 to March 31, 2019)No items to report.

(Per-Share Information)
Year ended March 31, 2018Year ended March 31, 2019

(April 1, 2017–March 31, 2018)(April 1, 2018–March 31, 2019)

Net assets per share (yen)460.66478.26

Net income per share (yen)

51.19

59.36

Diluted net income per share (yen)

50.45

—

(Notes) 1. No data for diluted net income per share is provided, since no dilutive shares exist.
2. The standards used to calculate net income per share are as follows.

17

TOKAI Holdings Corporation (3167) Financial Results for the year ended March 31, 2019Year ended March 31, 2018 Year ended March 31, 2019
(April 1, 2017–(April 1, 2018–

March 31, 2018)

March 31, 2019)

Net income per share
Net income attributable to owners of the parent (millions of yen)

6,620

7,772

Amounts not attributable to ordinary shareholders (millions of yen)

—

—

6,620

7,772

129,348

130,947

—

—

1,889

—

Net income for common stock attributable to owners of the parent(millions of yen)
Average number of shares outstanding during the period(thousands of shares)
Diluted net income per share
Adjusted net income attributable to owners of the parent (millionsof yen)Increase in common stock (thousands of shares)
Overview of dilutive shares omitted from the calculation of diluted
net income per share as they have no dilutive effect——

3. The number of shares of common stock at the end of the fiscal year used in the calculation of net assets per share excludes
the Company’s shares held by the Trust & Custody Service Bank Ltd. (Trust Account E) (416,600 shares for the fiscal year
ended March 31, 2018, 410,800 shares for the fiscal year ended March 31, 2019). The average number of shares
outstanding of common stock during the period used in the calculation of net income per share excludes the Company’s
shares held by the Trust & Custody Service Bank Ltd. (Trust Account E) (417,158 shares for the fiscal year ended March 31,
2018, 412,722 shares for the fiscal year ended March 31, 2019).

(Important Subsequent Events)
No items to report.

18

TOKAI Holdings Corporation (3167) Financial Results for the year ended March 31, 2019

4. Other(1) Changes in Executive Positions
1) Changes in President & CEO
No items to report2) Other Changes in Executive Positions (Scheduled for June 26, 2019)
1. New director candidates
Director

Toshinori Nakamura

Director

Shoji Uematsu* Mr. Shoji Uematsu is a candidate for outside director.
2. Scheduled retirement director
Director

Kazuhiro Maruyama

19