This document was prepared using our machine translation, and no manual modification of the content has been made.
This translation is to be used solely as a reference and the consolidated financial statements in this release are unaudited.

Consolidated Financial Results for the Fiscal Year Ended February 29, 2020
[Japanese GAAP]
April 14, 2020
Company name

Listing Market TSE

Rozetta Corp.
Stock Code6182
URL https://www.rozetta.jp
Representative: Junichi Goishi, Representative Director and CEO
Contact: Masayuki Mori, Executive Officer, General Manager of Group Administration Division
TEL 03-5215-5678
Scheduled date of annual
Scheduled date of commencement－
May 27, 2020
general shareholders meetingof dividend payment
Scheduled date of filing ofMay 28, 2020
annual securities report
Preparation of supplementary materials for financial results: Yes
Holding of financial results briefing: Yes(Figures are rounded down to the nearest million yen)
1. Consolidated Financial Results for the Fiscal Year Ended February 29, 2020 (March 1, 2019 to February 29, 2020)(1) Consolidated Results of Operation(Percentages indicate year-on-year changes.)
Net income attributable to
Net sales
Operating income
Ordinary income
owners of parent
Millions ofMillions ofMillions ofMillions of
%
%
%
%
yen
yen
yen
yen
FY2/20
3,910
34.5
448
32.8
445
32.2
308
20.5
FY2/19
2,908
44.9
338
－
337
－
255
－
(Note)（20.0%）（－%）
Comprehensive
FY2/20306 Millions of yen
FY2/19255 Millions of yen
incomeNet income per share

Diluted net income per
share

Yen
29.91
25.26

Yen
29.05
24.25

FY2/20FY2/19(Reference)
Income on equity method investments

FY2/20(2) Consolidated Financial Position
Total assets
Millions of yen
FY2/203,753
FY2/192,642(Reference) Shareholders'equityFY2/20(3) Consolidated Cash Flows
Cash flows fromoperating activities
Millions of yen
FY2/20963
FY2/19825－

Millions of yen

Net assets
Millions of yen
1,504
1,194
1,503

Net income toshareholders'equity%22.9
24.5

Millions of yen

Cash flows frominvesting activities
Millions of yen(1,256)(696)

Ordinary income Operating income
to total assets
to net assets
%
13.9
14.3

FY2/19

Shareholders' equity ratio
%
40.1
45.1
FY2/19

1,191

%
11.5
11.6

－ Millions of yen

Net assets per shareYen
145.60115.73
Millions of yen

Cash flows from
Cash and cash equivalent at
financing activities
the end of the year
Millions of yen
Millions of yen
430
989
(232)
851

2. Dividend payment
Annual dividend per share

FY2/19FY2/20FY2/21 (Forecast)End of Q1

End of Q2

End of Q3

Year-end

Total

Yen

Yen

Yen

Yen

Yen

－
－

0.00
0.00

－
－

0.00
0.00

0.00
0.00

－

0.00

－

0.00

0.00

Total amount Payout ratioof dividends (Consolidated)
Millionsof yen－－Dividend on
equity(Consolidated)

%

%

－
－

－
－

－

3. Consolidated Business Forecasts for FY2/21 (March 1, 2020 to February 28, 2021)
The business forecasts are as follows.
Currently, as the MT business has entered a period of rapid growth since the fourth quarter of the fiscal year ending February 28,
2018, we are concentrating our management policy on maximizing medium-to long-term growth rather than short-term profits.
For the time being, we will not disclose the forecast as a fixed value until sales growth of the MT business settles down (roughly
1.5 times the previous year). This is to make decisive choices that best meet its long-term growth objectives on an occasional
basis, without adjusting expenses in accordance with earnings forecasts.
For the fiscal year ending February 28, 2021, the Company will disclose only the lowest consolidated earnings forecasts and only
disclose record-high net sales (3,910 million yen) or higher and record-high operating income (448 million yen) or higher.
The impact of the Corona calamity on business performance is as follows.
As for the MT business, although there is a risk that events such as exhibitions, which are a means of acquiring new customers,
will be cancelled and there will be an impact on new orders received, the overall results, including those of existing customers in
March last month, were rather strong, and both orders received and translation usage were record highs. This suggests that thetrend toward home work promotion and improvement of business efficiency due to the Corona problem may be consistent with
our previous vision.
As for the traditional human resources outsourced HT business, there is a growing trend to cancel interpretations and language
training conducted on a face-to-face basis and on a collective basis between client companies, and as a result, as disclosed in the"Notice of the Impact of the New Coronaviruses on Business Results" on February 27, 2020, sales and income are expected todecrease significantly during the period of the impact.
As for the product portfolio, the growth of the MT business, which is the STAR business, is more than the decrease of the HT
business, which is shifting from the CASH COW to the DOGS business, we expect to post record-high sales and income on aconsolidated basis.
However, the suspension of economic activities at the national level after the government declared a state of emergency in April
is another dimension of the problem, and it is impossible to predict the length of the period or the extent of the impact.
Accordingly, the forecasts are based on results and conditions that were actually affected by the Corona calamity to date on April
14. The Company does not make any predictions about when the medical, political and economic future of the Corona calamity
will converge.

*Notes(1) Changes in significant subsidiaries during the period(changes in specified subsidiaries resulting in changes in scope of consolidation): Yes
Newly consolidated: Excluded: Intermedia, Inc. Quicktranslate, Inc.
(Note) For details, please refer to "3. Consolidated Financial Statements, (5) Notes on Consolidated Financial Statements(Changes in Significant Subsidiaries during the Fiscal Year under Review)" on page 11 of the Appendix.
(2) Changes in accounting policies, changes in accounting estimates and restatements
1) Changes in accounting policies due to revisions of accounting standards, etc.: None
2) Changes in accounting policies due to other reasons: None
3) Changes in accounting estimates: None
4) Restatements: None
(3) Number of shares outstanding (common stock)1) Number of shares outstanding at the end of
the period (including treasury stock)2) Treasury shares at the end of the year
3) Average number of shares during the period

FY2/2010,330,260 shares

FY2/1910,296,260 shares

FY2/20FY2/20422 shares
10,309,025 shares

FY2/19FY2/19286 shares
10,127,512 shares(Reference) Summary of Non-consolidated Results of Operation
1. Non-consolidated Financial Results for the Fiscal Year Ended February 28, 2020 (March 1, 2019 to February 29, 2020)(1) Non-Consolidated Results of Operation(Percentages indicate year-on-year changes.)
Net sales
Operating income
Ordinary income
Net income
Millions ofMillions ofMillions ofMillions of
%
%
%
%
yen
yen
yen
yen
FY2/20
2,217
66.9
200
932.5
800
－
780
－
FY2/19
1,328
54.6
19
－
15
－
27
－
(Note) The year-on-year increase (decrease) in ordinary income and net income for the fiscal year ending February 29, 2020 is morethan 1,000%, so is indicated by "-."Net income per share
FY2/20FY2/19

Yen
75.69
2.76

(2) Non-consolidated Financial Position
Total assets
Millions of yen
FY2/203,587
FY2/192,380(Reference) Shareholders'
FY2/20equityDiluted net income per
share
Yen
73.51
2.65

Net assets
Millions of yen
1,415
630
1,415

Millions of yen

Shareholders' equity ratio
%
39.5
26.5
FY2/19Net assets per share
Yen
137.05
61.22
630

Millions of yen*This consolidated financial report is not subject to audit by a certified public accountant or an auditing firm.
*Explanations and other special notes concerning the appropriate use of business forecasts(Cautionary Statement with Respect to Forward-Looking Statements)
Forecasts regarding future performance in this material are based on information currently available to the Company and certain
assumptions that the Company deems to be reasonable at the time this report was prepared. The Company does not make promises
about the achievements. Actual results may differ significantly from the forecasts due to various factors. Please refer to "1. Overview
of Results of Operation, (2) Consolidated Business Forecasts" on page 3 of the Appendix for the assumptions underlying the forecasts
and cautions concerning the use thereof.
(Method of Obtaining Financial Results Briefing Materials)
Supplementary materials for financial results were disclosed on the TDnet on the same date. We also plan to hold a briefing for
institutional investors, analysts and long-held individual shareholders online on Tuesday, April 21, 2020. Information about thebriefing is available on our website.

Rozetta Corp. Consolidated Financial Results
For the Fiscal Year Ended February 29, 2020

○Table of Contents of the Appendix
1. Overview of Results of Operation and Financial Position…………………………………………………………………….

2(1) Overview of Results of Operation and Financial Position………………………………………………………………...

2(2) Consolidated Business Forecasts………………………………………………………………………………………….

3

2. Basic Approach to Selection of Accounting Standards………………………………………………………………………..

3

3. Consolidated Financial Statements and Major Notes…………………………………………………………………………

4(1) Consolidated Balance Sheets……………………………………………………………………………………………...

4(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income…………………………..

6

Consolidated Statements of Income…………………………………………………………………………………...

6

Consolidated Statements of Comprehensive Income…………………………………………………………………

7(3) Consolidated Statements of Changes in Shareholders' Equity…………………………………………………………….

8(4) Consolidated Statements of Cash Flows…………………………………………………………………………………..

10(5) Notes on Consolidated Financial Statements……………………………………………………………………………...

12(Notes on Going Concern Assumptions)………………………………………………………………………………...

12(Changes in Significant Subsidiaries during the Fiscal Year under Review)……………………………………………

12(Changes in Presentation Method) ………………………………………………………………………………………

12(Business Combination)………………………………………………………………………………………………….

13(Segment Information)…………………………………………………………………………………………………...

16(Per share Information)…………………………………………………………………………………………………..

19(Significant Subsequent Events)…………………………………………………………………………………………

19

-1-

Rozetta Corp. Consolidated Financial Results
For the Fiscal Year Ended February 29, 2020

1. Overview of Results of Operation and Financial Position.
(1) Overview of Results of Operation and Financial Position
1) Overview of Results of Operation for the Fiscal Year under Review
During the fiscal year under review, sales of T-4OO continued to be strong in the MT business. Accordingly, we continuously
increased the staff of all sections, including the marketing and management sections, to fortify our organizational structure before
expanding our business rapidly.
As a result, our group posted net sales of 3,910,479 thousand yen (up 34.5% year on year), operating income of 448,860
thousand yen (up 32.8% year on year), ordinary income of 445,904 thousand yen (up 32.2% year on year), and profit
attributable to owners of parent of 308,365 thousand yen (up 20.5% year on year) for the current fiscal year.
The performance of each business segment is as follows:
1) MT business
As for the MT business, sales were 2,133,879 thousand yen (up 132.7% year on year) due to continuous strong sales of T-400.
Segment income was 236,291 thousand yen (up 89.4% year on year) as a result of a significant increase in SG & A expenses
from the sales division to the administration division in preparation for the rapid expansion of the MT business.
2) HT business
As for the HT business, sales were 1,412,858 thousand yen (down 11.3% year on year). Segment income was 328,040 thousandyen (up 26.9% year on year), as a result of a decrease in cost of sales due to a reduction in manufacturing expenses and laborcosts, and a decrease in SG & A expenses due to a revision of the ratio of administrative costs to the entire group.
3) Crowdsourcing business
As for the Crowdsourcing business, sales were 363,741 thousand yen (down 8.6% year on year), and segment loss was 45,034
thousand yen (segment income of 80,253 thousand yen in the previous fiscal year), as a result of a decrease in intra-grouptransactions.
2) Overview of Financial Position for the Fiscal Year under Review(Assets)
Total assets at the end of the fiscal year under review increased by 1,111,055 thousand yen from the end of the previous fiscal
year to 3,753,905 thousand yen.
Current assets increased by 321,692 thousand yen from the end of the previous fiscal year to 1,644,950 thousand yen. This was
mainly due to an increase of 137,677 thousand yen in cash and deposits.
Non-current assets increased by 789,362 thousand yen from the end of the previous fiscal year to 2,108,955 thousand yen. Thiswas mainly attributable to an increase of 457,396 thousand yen in tools, furniture and fixtures, an increase of 306,335 thousand
yen in software, and an increase of 151,638 thousand yen in software in progress due to upfront investment in development
costs.
(Liabilities)
Liabilities at the end of the fiscal year under review increased by 801,148 thousand yen from the end of the previous fiscal year
to 2,249,833 thousand yen. This was mainly due to an increase of 280,000 thousand yen in short-term borrowings, an increaseof 139,912 thousand yen in long-term debt, and an increase of 255,859 thousand yen in advances received.
(Net assets)
Net assets at the end of the fiscal year under review increased by 309,906 thousand yen from the end of the previous fiscal year
to 1,504,072 thousand yen. This was mainly due to an increase in retained earnings of 308,365 thousand yen resulting from therecording of net income attributable to owners of parent of 308,365 thousand yen.
3) Overview of Cash Flows for the Fiscal Year under Review
Net cash provided by operating activities was 963,581 thousand yen, net cash used in investing activities was 1,256,563
thousand yen, and net cash provided by financing activities was 430,081 thousand yen. As a result, cash and cash equivalents(hereinafter "cash") at the end of the fiscal year under review increased 137,316 thousand yen from the end of the previous
fiscal year to 989,128 thousand yen.
-2-

Rozetta Corp. Consolidated Financial Results
For the Fiscal Year Ended February 29, 2020
(Cash flows from operating activities)
Net cash provided by operating activities was 963,581 thousand yen. Cash inflow was mainly attributable to income before
income taxes of 407,215 thousand yen, depreciation and amortization of 412,621 thousand yen, and an increase in advances
received of 255,859 thousand yen. Cash outflow was mainly attributable to an increase in notes and accounts receivable-tradeof 61,910 thousand yen and a decrease in notes and accounts payable-trade of 52,492 thousand yen.
(Cash flows from investing activities)
Net cash used in investing activities was 1,256,563 thousand yen. Cash outflow included purchase of intangible assets of
742,432 thousand yen, purchase of property, plant and equipment of 501,647 thousand yen, and payment for investments incapital of subsidiaries and associates resulting in change in scope of consolidation of 8,436 thousand yen.
(Cash flows from financing activities)
Net cash provided by financing activities was 430,081 thousand yen. This was mainly attributable to proceeds from long-term
debt of 400,000 thousand yen and proceeds from issuance of shares due to the exercise of share subscription rights of 5,542
thousand yen.
(2) Consolidated Business Forecasts
Our two management themes for the future are:1) Spur the development/sales of T-3MT, which has been newly released as a technological innovation since T-4OO
As for the development, we will further improve the accuracy of translations, and as for the sales, we will greatly expand our sales
structure, to accelerate sales growth as we complete our 15 years of upfront investment and enter the investment-return period.
2) Development and marketing of the T-4PO wearable device
In addition to the machine translation service, which translates technical documents for business translation, in FY2/21, the Company
will release the first version of T-4PO, a wearable interpretation device, which has been its founding vision, and commence marketing
activities.
The business forecasts are as follows.
Currently, as the MT business has entered a period of rapid growth since the fourth quarter of the fiscal year ending February 28,
2018, we are concentrating our management policy on maximizing medium-to long-term growth rather than short-term profits. We
will not disclose the forecast as a fixed value until sales growth of the MT business settles down (roughly 1.5 times the previousyear). This is to make decisive choices that best meet its long-term growth objectives on an occasional basis, without adjusting
expenses in accordance with earnings forecasts. For the fiscal year ending February 28, 2021, the Company will only announce theforecast as the lowest line exceeding the record high net sales (3,910 million yen) and the record high operating income (448 million
yen).
The impact of the Corona calamity on business performance is as follows.
As for the MT business, although there is a risk that events such as exhibitions, which are a means of acquiring new customers, will
be cancelled and there will be an impact on new orders received, the overall results, including those of existing customers in Marchlast month, were rather strong, and both orders received and translation usage were record highs. This suggests that the trend toward
home work promotion and improvement of business efficiency due to the Corona problem may be consistent with our previous
vision.
As for the traditional human resources outsourced HT business, there is a growing trend to cancel interpretations and language
training conducted on a face-to-face basis and on a collective basis between client companies, and as a result, as disclosed in the"Notice of the Impact of the New Coronaviruses on Business Results" on February 27, 2020, sales and income are expected todecrease significantly during the period of the impact.
As for the product portfolio, the growth of the MT business, which is the STAR business, is more than the decrease of the HT
business, which is shifting from the CASH COW to the DOGS business, we expect to post record-high sales and income on aconsolidated basis.
However, the suspension of economic activities at the national level after the government declared a state of emergency in April isanother dimension of the problem, and it is impossible to predict the length of the period or the extent of the impact.
Accordingly, the forecasts are based on results and conditions that were actually affected by the Corona calamity to date on April
14. The Company does not make any predictions about when the medical, political and economic future of the Corona calamity will
converge.

2. Basic Approach to Selection of Accounting Standards
In light of the comparability of consolidated financial statements between periods and between companies, our group intends toprepare consolidated financial statements under Japanese GAAP for the time being.
With regard to the application of the International Financial Reporting Standards (IFRS), our policy is to respond appropriately
while taking into consideration various circumstances in Japan and overseas.
-3-

Rozetta Corp. Consolidated Financial Results
For the Fiscal Year Ended February 29, 2020

3. Consolidated Financial Statements and Major Notes(1) Consolidated Balance Sheets(Thousands of yen)Previous fiscal year
(February 28, 2019)
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable
Inventories
Other
Allowance for doubtful receivables
Total current assets
Non-current assets
Property, plant and equipment
Building and structure
Tools, furniture and fixtures
Construction in Progress
Accumulated depreciation
Total property, plant and equipment
Intangible assets
Goodwill
Software
Software in progress
Other
Total intangible assets
Investments and other assets
Long-term loan
Deferred tax asset
Other
Allowance for doubtful receivables
Total investments and other assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Notes and accounts payable-trade
Short-term borrowings
Long-term debt due within one year
Accounts payable-other
Income taxes payable
Provision for bonuses
Advances received
Other
Total current liabilities
Non-current liabilities
Long-term debt
Total non-current liabilities
Total liabilities-4-

Current fiscal year
(February 29, 2020)

853,378
360,515
51,23766,716(8,589)1,323,258

991,056
427,847
29,045
210,151(13,151)
1,644,950

16,747351,372
34,476(166,106)236,489

80,646
808,768－(333,809)
555,605

89,513432,361
423,287468
945,631

74,992738,697
574,926446
1,389,062

1,009
56,796
86,638(6,974)137,471
1,319,592
2,642,850

359
66,001
106,318(8,391)
164,287
2,108,955
3,753,905

140,961－
231,601
110,829
111,002
26,577440,309
95,231
1,156,513

88,469280,000
237,655
205,792
34,45750,652
696,169
224,555
1,817,750

292,171
292,171
1,448,684

432,083
432,0832,249,833

Rozetta Corp. Consolidated Financial Results
For the Fiscal Year Ended February 29, 2020
(Thousands of yen)Previous fiscal year
(February 28, 2019)
Net assets
Shareholders' equity
Common stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders' equity
Share subscription rights
Non-controlling interests
Total net assets
Total liabilities and net assets

250,794
1,230,983(289,839)(435)
1,191,502
458
2,206
1,194,166
2,642,850-5-Current fiscal year
(February 29, 2020)

253,565
1,232,754
18,525(861)
1,503,983
89－
1,504,072
3,753,905

Rozetta Corp. Consolidated Financial Results
For the Fiscal Year Ended February 29, 2020
(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income(Consolidated Statements of Income)(Thousands of yen)Previous fiscal year
(From March 1, 2018 to
February 28, 2019)
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Remuneration for directors
Salaries, allowances and bonuses
Advertising expenses
Provision for doubtful receivables
Provision for bonuses
Other
Total selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividends income
Subsidy income
Foreign exchange gain
Other
Total non-operating income
Non-operating expenses
Interest expenses
Settlement
Foreign exchange loss
Other
Total non-operating expenses
Ordinary income
Special income
Gain on sale of investment securities
Income on sales of non-current assets
Surrender value of insurance
Gain on reversal of share subscription rights
Total special income
Special loss
Loss on retirement of non-current assets
Total special loss
Income before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
Net income
Loss attributable to non-controlling interests
Net income attributable to owners of parent-6-

Current fiscal year
(From March 1, 2019 toFebruary 29, 2020)

2,908,042
1,123,670
1,784,371

3,910,479
1,362,244
2,548,234

120,392
511,309
183,932247
19,606
610,839
1,446,327
338,044

155,021672,062
221,115
6,129
24,951
1,020,094
2,099,374
448,860

55
18
－
10
2,233
2,317

166
19
1,425
－
1,194
2,805

2,723
－
－
321
3,045
337,316

2,084
2,400
72
1,204
5,761
445,904

199
786
11,513－
12,499

－
－
－
369
369

3,149
3,149
346,667
116,054(24,462)
91,591
255,075(793)
255,869

39,05739,057407,215
110,260(9,204)
101,056
306,159(2,206)308,365

Rozetta Corp. Consolidated Financial Results
For the Fiscal Year Ended February 29, 2020
(Consolidated Statements of Comprehensive Income)(Thousands of yen)Previous fiscal year
(From March 1, 2018 to
February 28, 2019)
Net income
Comprehensive income(Comprehensive income attributable to)
Owners of parent
Non-controlling interests-7-

Current fiscal year
(From March 1, 2019 toFebruary 29, 2020)

255,075
255,075

306,159
306,159

255,869(793)

308,365(2,206)

Rozetta Corp. Consolidated Financial Results
For the Fiscal Year Ended February 29, 2020
(3) Consolidated Statements of Changes in Shareholders' Equity
Previous fiscal year (From March 1, 2018 to February 28, 2019)(Thousands of yen)
Shareholders' equity
Common stock
Opening balance

Capital surplus

Retained earnings

230,093

1,210,282

20,701

20,701(545,709)

Treasury stock(225)

Total shareholders'equity894,440

Change during the year
Issuance of new shares
Net income attributable to ownersof parent

41,402
255,869

Purchase of treasury stock

255,869
(210)

(210)

Net change in items other thanshareholders' equity
Total changes of items during theyear

20,701

20,701

255,869(210)

297,061

Ending balance

250,794

1,230,983(289,839)(435)

1,191,502

Share subscription
rightsOpening balance

Non-controllinginterests

458

Total net assets－

894,898

Change during the year
Issuance of new shares

41,402

Net income attributable to ownersof parent

255,869

Purchase of treasury stock(210)

Net change in items other thanshareholders' equity

－

2,206

2,206

Total changes of items during the
year

－

2,206

299,267

Ending balance

458

2,206

1,194,166-8-

Rozetta Corp. Consolidated Financial Results
For the Fiscal Year Ended February 29, 2020
Current fiscal year (From March 1, 2019 to February 29, 2020)(Thousands of yen)
Shareholders' equity
Common stock
Opening balance

Capital surplus

Retained earnings

250,794

1,230,983

2,771

2,771

(289,839)

Treasury stock(435)

Total shareholders'equity1,191,502

Change during the year
Issuance of new shares
Net income attributable to ownersof parent

5,542
308,365

Purchase of treasury stock

308,365(426)

Purchase of investments inconsolidated subsidiaries(1,000)(426)(1,000)Net change in items other thanshareholders' equity
Total changes of items during theyear
Ending balance

2,771

1,771

308,365(426)

312,481

253,565

1,232,754

18,525(861)

1,503,983

Share subscription
rightsOpening balance458

Non-controllinginterests

Total net assets

2,206

1,194,166

Change during the year
Issuance of new shares

5,542

Net income attributable to ownersof parent

308,365

Purchase of treasury stock(426)

Purchase of investments inconsolidated subsidiaries(1,000)Net change in items other thanshareholders' equity(369)(2,206)(2,575)

Total changes of items during the
year

(369)

(2,206)309,90689－

1,504,072

Ending balance-9-Rozetta Corp. Consolidated Financial Results
For the Fiscal Year Ended February 29, 2020
(4) Consolidated Statements of Cash Flows(Thousands of yen)Previous fiscal year
(From March 1, 2018 to
February 28, 2019)
Cash flows from operating activities
Income before income taxes
Depreciation
Amortization of goodwill
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in accrued bonuses
Interest and dividend income
Loss (gain) on sales of investment securities
Loss (gain) on sales of non-current assets
Loss on retirement of non-current assets
Gain on reversal of share subscription rights
Interest expenses
Settlement
Surrender value of insurance
Increase (decrease) in advances received(Increase) decrease in notes and accounts receivabletrade(Increase) decrease in inventories
Increase (decrease) in trade payables
Other
Sub-totalInterest and dividends received
Interest paid
Settlement paid
Income taxes paid
Income taxes refund
Cash flows from operating activities
Cash flows from investing activities
Payments for property, plant and equipment
Proceeds from sale of property, plant and equipment
Payments for intangible assets
Proceeds from sale of investment securities
Payments for investments in capital of subsidiaries andassociates resulting in change in scope of consolidation
Payment for loans receivable
Proceeds from loans receivable
Payments into time deposits
Proceeds from withdrawal of time deposits
Payments for lease and guarantee deposits
Collection of lease and guarantee deposits
Proceeds from cancellation of insurance funds
Cash flows from investing activities
Cash flows from financing activities
Net increase (decrease) in short-term borrowings
Proceeds from long-term debt
Repayment of long-term debt
Proceeds from issuance of common stock upon
exercise of share subscription rights
Purchase of investments in subsidiaries that does not
result in change in scope of consolidation
Purchase of treasury stock
Proceeds from stock issuance to non-controllinginterests
Cash flows from financing activities- 10 -

Current fiscal year
(From March 1, 2019 toFebruary 29, 2020)

346,667
203,298
21,262
37
6,187
(73)
(199)
(786)
3,149
－
2,723
－
(11,513)
303,508407,215412,62122,011
5,979
24,074(186)－－
39,057
(369)
2,084
2,400
－
255,859(92,414)(61,910)(21,251)
29,67538,160828,43173(2,723)－(29,064)
28,285825,00222,191(52,492)
78,534
1,157,070
186(2,084)(2,400)(189,210)20
963,581(164,223)
786(573,468)200(501,647)－(742,432)－－(8,436)(1,300)443(1,238)15,373－－27,164(696,262)(3,570)
1,635(1,001)－(2,586)
1,474－(1,256,563)(14,940)－(261,759)

280,000
400,000(254,034)

41,402

5,542－(1,000)

(210)

(426)

3,000

－

(232,507)

430,081

Rozetta Corp. Consolidated Financial Results
For the Fiscal Year Ended February 29, 2020
Effect of exchange rate change on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of the year
Cash and cash equivalents at end of the year

- 11 -(261)

216(104,028)
955,840
851,811

137,316
851,811
989,128

Rozetta Corp. Consolidated Financial Results
For the Fiscal Year Ended February 29, 2020
(5) Notes on Consolidated Financial Statements(Notes on Going Concern Assumptions)Not applicable.
(Changes in Significant Subsidiaries during the Fiscal Year under Review)
During the fiscal year under review, we conducted an absorption-type merger of Intermedia, Inc. by GLOVA Corp., ourconsolidated subsidiary, and an absorption-type merger of Quicktranslate, Inc. by anydooR, Inc. As a result, Intermedia, Inc. andQuicktranslate, Inc. have ceased to exist, and therefore, they have been excluded from the scope of consolidation from the fiscal
year under review.
(Changes in Presentation Method)(Changes due to Application of "Partial Amendments to Accounting Standard for Tax Effect Accounting")
The Company has applied the "Partial Amendments to Accounting Standard for Tax Effect Accounting" (ASBJ Statement No.
28, February 16, 2018) from the beginning of the fiscal year under review. Accordingly, deferred tax assets are presented underinvestments and other assets, and deferred tax liabilities are presented under non-current liabilities.
As a result, 34,247 thousand yen of "Deferred tax assets" under "Current assets" section has been included in 56,796 thousand
yen of "Deferred tax assets" in the previous fiscal year's consolidated balance sheet.
(Consolidated Balance Sheets)
Accounts payable-other, which had been included in "Other" under "Current liabilities" until the previous fiscal year, ispresented separately from the current fiscal year due to its materiality. To reflect this change in presentation, the consolidated
financial statements for the previous fiscal year have been reclassified.
As a result, 206,061 thousand yen included in "Other" under "Current liabilities" in the previous fiscal year's consolidatedbalance sheet has been reclassified as 110,829 thousand yen in "Accounts payable-other" and 95,231 thousand yen in "Other."- 12 -

Rozetta Corp. Consolidated Financial Results
For the Fiscal Year Ended February 29, 2020
(Business Combination)(Business Combination by Acquisition)
At the meeting of the Board of Directors held on August 15, 2019, we resolved to acquire all the equity interest in RPA
Consulting LLC with an effective date of September 1, 2019, and make it a wholly owned subsidiary of the Company, andconcluded an equity transfer agreement with equity owners, and acquired equity interest.
(1) Overview of the Business Combination
1) Company name and business description of the acquired company
Company name: RPA Consulting LLC
Business description: Consulting, advisory, and development support for RPAs
2) Major reason for the business combination
The precision of machine translation has exceeded the level that had been targeted since the founding of the Company, andas a result of the realization of the goal of "liberate Japan from linguistic impairment," which has been the mission since
the founding of the Company, the Company has newly adopted the mission of "releasing humanity from the shackles ofmanual labor" as Chapter 2 of the Mission. As a specific methodology, we decided to promote the AI RPA, which
combines the superior RPA know-how of RPA Consulting LLC and our AI technology to add AI (Artificial Intelligence) to
the RPA (Robotic Process Automation).
3) Effective date of the business combination
September 1, 20194) Legal form of the business combination
Acquisition of equity interest5) Company name following the business combination
There is no change.
6) Acquired equity
100%7) Principal basis for determining the acquirerThis was determined based on the fact that we acquired an equity interest in RPA Consulting LLC in which cash wasprovided as a consideration.
(2) Period in which the acquired company's business performance is reflected in the consolidated financial statements
From September 1, 2019 to February 29, 2020
(3) Breakdown of the acquisition cost
Consideration paid for acquisitionCash
21,000 thousand yen
Total acquisition cost

21,000 thousand yen(4) Details and amount of major acquisition-related expenses
Due diligence expenses
900 thousand yen(5) Amount of goodwill recognized, reason thereof, method and period of amortization
1) Amount of goodwill
7,490 thousand yen
2) Reason
Due to prospective earning power expected from future business development.
3) Method and period of amortization
Straight-line method over 5 years(6) Breakdown of assets acquired and liabilities assumed on the date of the business combination
Current assets
17,984 thousand yen
Total assets
17,984 thousand yen
Current liabilities
Total liabilities

4,475 thousand yen
4,475 thousand yen- 13 -

Rozetta Corp. Consolidated Financial Results
For the Fiscal Year Ended February 29, 2020
(7) Estimated amount of impact on the consolidated statements of income for the current fiscal year assuming that the businesscombination has been completed on the commencement date of the consolidated fiscal year, and the calculation method thereof
Net sales
21,810 thousand yen
Operating income
12,776 thousand yen
Ordinary income
12,776 thousand yen
Income before income taxes
12,776 thousand yen(Method of Calculating Approximate Amounts)
The approximate amount of impact is the difference between net sales and income information that was calculated basedon the assumption that the business combination had been completed at the beginning of the fiscal year and net sales andincome information in the consolidated statements of income of the acquirer.
This note has not been audited.

- 14 -

Rozetta Corp. Consolidated Financial Results
For the Fiscal Year Ended February 29, 2020
(Transactions under Common Control)
At the meeting of the Board of Directors held on January 11, 2019, we resolved to conduct an absorption-type merger ofIntermedia, Inc. by GLOVA Corp., our consolidated subsidiary, and an absorption-type merger of Quicktranslate, Inc. byanydooR, Inc., and conducted an absorption-type merger on March 1, 2019.
I. Absorption-type merger of Intermedia, Inc. by GLOVA Corp.
Summary of transactions(1) Company name and business description of the companies subject to the business combination
1) Surviving company
Company name: GLOVA Corp.
Business description: translation, interpretation, and corporate language training
2) Absorbed company
Company name: Intermedia, Inc.
Business description: technical translation, copy writing, DTP, design and printing(2) Effective date of the business combination
March 1, 2019(3) Legal form of the business combination
Absorption-type merger in which GLOVA Corp. is the surviving company and Intermedia, Inc. is the absorbed company(4) Company name following the business combination
GLOVA Corp.
(5) Other matters related to overview of the transaction
Aim of the business combination is to further improve management efficiency.
II. Absorption-type merger of Quicktranslate, Inc. by anydooR, Inc.
Summary of transactions(1) Company name and business description of the companies subject to the business combination
1) Surviving company
Company name: anydooR, Inc.
Business description: the user-participatory bilingual platform service on the website
2) Absorbed company
Company name: Quicktranslate, Inc.
Business description: translator matching service(2) Effective date of the business combination
March 1, 2019(3) Legal form of the business combination
Absorption-type merger in which anydooR, Inc. is the surviving company and Quicktranslate, Inc. is the absorbed company(4) Company name following the business combination
Xtra, Inc.
(5) Other matters related to overview of the transaction
Aim of the business combination is to further improve management efficiency.
III. Overview of accounting treatment
In accordance with the "Accounting Standards for Business Combinations" and the "Implementation Guidance on AccountingStandards for Business Combinations and Accounting Standards for Business Divestitures," the Company treats thesetransactions as transactions under common control.

- 15 -

Rozetta Corp. Consolidated Financial Results
For the Fiscal Year Ended February 29, 2020
(Segment Information)
1. Overview of Reportable Segments
Our reportable segments are components of the Company for which separate financial information is available and which are
regularly reviewed by the Board of Directors in order to determine the allocation of management resources and evaluate businessperformance. Our business is centered on the machine translation business, while peripheral businesses are the translation
outsourcing business and the crowdsourcing business.
(1) MT business
The Machine Translation business provides machine-translation services using artificial intelligence (AI) based on its
corporate mission of "liberate Japan from linguistic impairment."
In addition, we have provided Robotic Process Automation (RPA) using knowledge gained from translation, based on the
mission of "releasing humanity from the shackles of manual labor," as Chapter 2 of the mission.
(2) HT business
The Human Translation business provides outsourced services, such as traditional human translation, interpretation, andlanguage training.
(3) Crowdsourcing business
The crowdsourcing business provides a crowdsourcing website on which global jobs such as multilingual translation andfield surveys can be requested.
2. Method of calculating net sales, income (loss), assets and other items by reportable segment
The accounting methods used for the reportable segments are based on the accounting policies adopted for the preparation of theconsolidated financial statements.
Segment income is based on operating income. Intersegment sales and transfers are based on prevailing market prices.

- 16 -

Rozetta Corp. Consolidated Financial Results
For the Fiscal Year Ended February 29, 2020
3. Information on net sales, income (loss), assets and other items by reportable segment
Previous fiscal year (From March 1, 2018 to February 28, 2019)(Thousands of yen)
Reportable Segments
Adjustment(Note 1,3)

Amounts on the
consolidated
financialstatements(Note 2)MT businessHT business

Crowdsourcing
business

916,908

1,593,020

398,1132,908,042－

2,908,042

4,165

171,940

245,095

421,200(421,200)

－

Total

921,073

1,764,960

643,2083,329,242(421,200)

2,908,042

Segment income (loss)

124,783

258,50980,253

463,546(125,502)

338,044

1,021,436

694,349

437,128

2,152,914

489,936

2,642,850

188,190

6,219

8,887

203,298－

203,298－

1,076

13,475

14,552

6,709

21,262703,978

28,53977,814810,332－

810,332

Total

Net sales
Net sales tounaffiliatedcustomers
Intersegment sales ortransfer

Segment assets
Other
Depreciation
Amortization of
goodwill
Increase in property,
plant and equipment,
and intangible assets(Note)
1.
Adjustments to segment income of (125,502) thousand yen include elimination of inter-segment transactions of (69,796)
thousand yen, amortization of goodwill not attributable to reportable segments of (6,709) thousand yen, and corporate expensesof (48,995) thousand yen. Corporate expenses mainly consist of expenses related to the administrative departments of the parent
company that are not attributable to reportable segments.
2.
Segment income (loss) is adjusted with operating income in the consolidated statements of income.
3.
Adjustments to segment assets of 489,936 thousand yen are corporate assets not attributable to reportable segments. They mainly
consist of surplus operating funds (cash and deposits), goodwill, deferred tax assets, and assets related to the administrative
division.

- 17 -

Rozetta Corp. Consolidated Financial Results
For the Fiscal Year Ended February 29, 2020
Current fiscal year (From March 1, 2019 to February 29, 2020)(Thousands of yen)
Reportable Segments
Adjustment(Note 1,3)

Amounts on the
consolidated
financialstatements(Note 2)MT businessHT business

Crowdsourcing
business

2,133,879

1,412,858

363,741

3,910,479－

3,910,479

81,013

8,337

98,755

188,107(188,107)

－

Total

2,214,893

1,421,196

462,496

4,098,586(188,107)

3,910,479

Segment income (loss)

236,291

328,040(45,034)

519,296(70,436)448,860

2,247,360

750,529

271,685

3,269,575

484,330

3,753,905

381,433

10,594

20,592412,621－412,621

749

7,786

13,47522,011－22,011

1,188,861

1,208

54,0081,244,079－

1,244,079

Total

Net sales
Net sales tounaffiliatedcustomers
Intersegment sales ortransfer

Segment assets
Other
Depreciation
Amortization of
goodwill
Increase in property,
plant and equipment,
and intangible assets(Note)
1.
Adjustments to segment income of (70,436) thousand yen include elimination of intersegment transactions of 14,879 thousand
yen and corporate expenses not attributable to reportable segments of (85,316) thousand yen. Corporate expenses mainly consistof expenses related to the administrative departments of the parent company that are not attributable to reportable segments.
2.
Segment income (loss) is adjusted with operating income in the consolidated statements of income.
3.
Adjustments to segment assets of 484,330 thousand yen are corporate assets not attributable to reportable segments. They mainly
consist of surplus operating funds (cash and deposits), deferred tax assets, and assets related to the administrative division.

- 18 -

Rozetta Corp. Consolidated Financial Results
For the Fiscal Year Ended February 29, 2020
(Per share Information)
Previous fiscal year
(From March 1, 2018
to February 28, 2019)

Current fiscal year
(From March 1, 2019
to February 29, 2020)

Net assets per share

115.73 yen

145.60 yen

Net income per share

25.26 yen

29.91 yen

Diluted net income per share

24.25 yen

29.05 yen

(Note) The basis for calculating net income per share and diluted net income per share is as follows.
Previous fiscal year
(From March 1, 2018
to February 28, 2019)

Current fiscal year
(From March 1, 2019
to February 29, 2020)

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

255,869

308,365－－

Net income attributable to owners of parent
related to common stock (thousands of yen)

255,869

308,365

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

10,127,512

10,309,025

Adjustment to net income attributable to ownersof parent (thousands of yen)－－

Increase in number of common shares (shares)

424,017305,188（424,017）（305,188）－－

Amount not attributable to commonshareholders (thousands of yen)

Diluted net income per share(Share subscription rights (shares))
Outline of potential shares that had not been
included in the calculation of diluted net income
per share because they had no dilutive effect(Significant Subsequent Events)
Not applicable.

- 19 -