Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy
between this translated document and the Japanese original, the original shall prevail.

May 10, 2022

Consolidated Financial Results
for the Fiscal Year Ended March 31, 2022
(Under Japanese GAAP)
Company name:
Japan Communications Inc.
Listing:
Tokyo Stock Exchange: Prime Market
Securities code:
9424
URL:
URL http://www.j-com.co.jp/
Representative:
Naohisa Fukuda, Representative Director-President
Inquiries:
Mitsuru Kodaira, Executive Officer and CFO
Telephone:+81-3-5776-1700
Scheduled date of ordinary general meeting of shareholders:June 28, 2022
Scheduled date to commence dividend payments:–
Scheduled date to file annual securities report:
June 29, 2022
Preparation of supplementary material on financial results:
Yes
Holding of financial results briefing:
Yes (for institutional investors, analysts and thepress)(Yen amounts are rounded down to millions, unless otherwise noted.)

1. Consolidated financial results for the fiscal year ended March 31, 2022 (from April 1, 2021 to March 31,
2022)(1) Consolidated operating results(Percentages indicate year-on-year changes.)

Net sales

Operating profit

Profit attributable toowners of parent

Ordinary profit

Fiscal year ended

Millions of yen

March 31, 2022

4,634

32.5

279

–

298

–

March 31, 2021

3,497

(0.4)

(248)

–

(242)

–

Note: Comprehensive income%

Millions of yen%

Millions of yen

For the fiscal year ended March 31, 2022:
For the fiscal year ended March 31, 2021:

Basic earnings
per share
Fiscal year ended

Diluted earnings
per share

Yen%

Millions of yen¥254 million¥(270) million

Return on equity

Yen

%

294

–

(273)

–

[–%]
[–%]

Ratio of ordinary
profit to total assets

Ratio of operating
profit to net sales

%

%

%

March 31, 2022

1.79

1.77

64.2

15.7

6.0

March 31, 2021

(1.66)–(68.7)(14.5)(7.1)

Reference:

Share of profit (loss) of entities accounted for using equity method
For the fiscal year ended March 31, 2022:¥5 million
For the fiscal year ended March 31, 2021:¥10 million(2) Consolidated financial position
Total assets
As of

Net assets

Equity-to-asset ratio

Net assets per share

Millions of yen

Millions of yen

March 31, 2022

1,944

785

33.6

3.97

March 31, 2021

1,857

341

14.2

1.60

Reference:

EquityAs of March 31, 2022:
As of March 31, 2021:¥652 million¥263 million%

Yen(3) Consolidated cash flows
Cash flows fromoperating activities
Fiscal year ended

Cash flows frominvesting activities

Millions of yen

Cash and cash
equivalents at end of
periodCash flows fromfinancing activities

Millions of yen

Millions of yen

Millions of yen

March 31, 2022

21

(271)

150

928

March 31, 2021

419

(53)

6

1,025

2. Cash dividends
Annual dividends per share
First
SecondThird
quarter-end quarter-end quarter-end
Yen
Fiscal year ended

March 31, 2021
Fiscal year ended

March 31, 2022

Yen

Yen

Fiscalyear-end
Yen

Total

Total cash
dividends(Total)Yen Millions of yen

Ratio of
Payout ratio dividends to(Consolidated) net assets(Consolidated)
%

%

–

0.00

–

0.00

0.00

–

–

–

–

0.00

–

0.00

0.00

–

–

–

–

0.00

–

0.00

0.00

Fiscal year ending

March 31, 2023–

(Forecast)

3. Overview and management policy for the fiscal year ending March 31, 2023
Since its founding in 1996, the Company has propounded and implemented the MVNO business model, an
innovative form of telecommunications business, having developed its business with the mission of transferring(communicating) data safely, securely, and conveniently. Specifically, the Company is engaged in threebusinesses: mobile communications business (SIM business), communications business through local mobile
networks (local 4G/5G), as well as digital ID (FPoS : Fintech Platform over SIM) business for use on
smartphones.
The Company plans to build a stable revenue stream by continuing the evolution of the SIM business, as well as
to develop the local 4G/5G business and FPoS business to become the pillar of future earnings by investing in
the two businesses.
In the local 4G/5G business, the Company aims to build advanced showcases in the U.S. and leverage theexperience to expand in Japan.
In the FPoS business, the Company has acquired certification under the Digital Signature Act for “my Digital
Certificate” (the issuing entity is my FinTech Inc., a subsidiary of the Company.) based on its patented FPoS
technology, and are working on its actual use as a digital ID that can be used safely, securely, and conveniently
on smartphones.
With the surrounding situation above described, the management of the Company perceives a market
capitalization of 500 billion yen as the growth business scale in three to five years from the launch ofcommercial service of FPoS(expected within this fiscal year).

* Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in the change
in scope of consolidation): None
(2) Changes in accounting policies, changes in accounting estimates, and restatement(i) Changes in accounting policies due to revisions to accounting standards and other regulations: Yes(ii) Changes in accounting policies due to other reasons: None(iii) Changes in accounting estimates: None(iv) Restatement: None
(3) Number of issued shares (common shares)(i)

Total number of issued shares at the end of the period (including treasury shares)
As of March 31, 2022

164,258,239 shares

As of March 31, 2021

164,258,239 shares(ii) Number of treasury shares at the end of the period
As of March 31, 2022

15,004 shares

As of March 31, 2021

15,004 shares(iii) Average number of shares outstanding during the period
Fiscal year ended March 31, 2022

164,243,235 sharesFiscal year ended March 31, 2021

164,243,235 shares[Reference] Overview of non-consolidated financial results
1. Non-consolidated financial results for the fiscal year ended March 31, 2022 (from April 1, 2021 toMarch 31, 2022)(1) Non-consolidated operating results(Percentages indicate year-on-year changes.)

Net sales

Operating profit

Ordinary profit

ProfitFiscal year ended

Millions of yen%

Millions of yen

March 31, 2022

4,510

33.8

352

–

345

–

316

–

March 31, 2021

3,371

1.7

(329)

–

(201)

–

(205)

–

Basic earnings
per share%

Millions of yen%

Millions of yen%

Diluted earnings
per share

Fiscal year ended

Yen

Yen

March 31, 2022

1.92

1.90

March 31, 2021

(1.25)–(2) Non-consolidated financial position
Total assets
As of

Net assets

Millions of yen

Equity-to-asset ratio

Millions of yen

Net assets per share%

Yen

March 31, 2022

2,118

645

27.3

3.51

March 31, 2021

2,088

299

12.5

1.58

Reference:

EquityAs of March 31, 2022:
As of March 31, 2021:¥577 million¥261 million* Financial results reports are exempt from audit conducted by certified public accountants or an audit
corporation.
* Proper use of earnings forecasts, and other special matters
A financial results meeting will be held on Wednesday, May 11, 2022 for institutional investors, analysts andthe press. The Company plans to post a video of this financial results meeting on its website promptly after the
meeting is held.

1. Operating results and financial position(1) Operating results of the year ended March 31, 2022
Since its founding in 1996, the Company has propounded and implemented the MVNO business model, an
innovative form of telecommunications business, having developed its business with the mission oftransferring (communicating) data safely, securely, and conveniently. Specifically, the Company is engaged inthree businesses: mobile communications business (SIM business), communications through local mobile
networks business (local 4G/5G), as well as digital ID (FPoS: Fintech Platform over SIM) business for use on
smartphones.
The Company plans to build a stable revenue stream by continuing the evolution of the SIM business, as wellas to develop the local 4G/5G business and FPoS business to become the pillar of future earnings by investingin the two businesses.
(i) Mobile Communications Business (SIM business)
In the MVNO business model that the Company has created, the Company has continued its efforts toensure a fair competitive environment and has evolved them through repeated deregulation. In particular,
the June 2020 ruling by the Minister for Internal Affairs and Communications that allows the Company toprocure voice communications services from NTT DOCOMO, INC. on a cost basis has contributed
significantly to its earnings. In the SIM business, the Company has been able to offer competitive tariff
plans, such as flat-rate tariff for voice communications services and lower basic monthly fees, and since
July 2020, for seven consecutive quarters leading up to the end of the current fiscal year, both the numberof its line subscriptions and quarterly sales revenue have continued to grow, resulting in a profit for the
first time in seven years in the current fiscal year.
(ii) Local 4G/5G Business through Local Mobile Networks
In the local 4G/5G business, the Company aims to build advanced showcases in the U.S. and leverage theexperience to expand in Japan. In the U.S., the Company has for a long period of time offered businesses
that provide secure communications for financial transactions, such as mobile leased line services for
ATMs, and in parallel, has begun offering SIMs for the Citizens Broadband Radio Service (CBRS), thelocal mobile network system in the U.S. CBRS is a unique network that is built and operated in a specificenvironment, including universities or offices, and is positioned as an alternative to WiFi, but unlike WiFi,
it requires authentication by a SIM. The expansion of CBRS has also created demand, and the Company’s
U.S. subsidiary has joined forces with its key partners to expand its business.
(iii) Digital ID (FPoS) Business for Use on Smartphones
In the FPoS business, the Company has acquired certification under the Digital Signature Act for “myDigital Certificate” (the issuing entity is my FinTech Inc., a subsidiary of the Company.) based on its
patented FPoS technology on November 10, 2021, and the business has received a lot of interest frombanks and other financial institutions, as well as local governments.
This is attributed to the fact that the Ministry of Internal Affairs and Communications Ordinance wasamended on September 29, 2021, limiting the method of electronic application for residence certificates,etc. to the method of identification by the applicant’s digital signature and digital certificate (a digital
certificate for the My Number Card or a digital certificate certified under the Digital Signature Act). Sucha move brought the situation to the attention of all those concerned, as the so-called “smartphone ID”
method of application, which had hitherto been used by some local governments, was no longer allowed,
and the acceptance of applications thereof was suspended. Although some have argued that this revised
Ordinance of the Ministry of Internal Affairs and Communications runs counter to the trend towards
digitization, it has provided an opportunity to reaffirm the broad recognition of online means ofidentification.
As a result of the above, the Group’s consolidated net sales for the current fiscal year were 4,634 million yen,
an increase of 1,136 million yen (up 32.5%) compared to the previous fiscal year (hereinafter referred to as
the “previous year”). This was mainly due to growth in the MVNO business resulting from increased sales ofvoice and data communications services centered on “Nihon Tsushin SIM,” as well as growth in the Enablerbusiness, which includes voice and data communications services provided under partner brands.
Cost of sales was 2,782 million yen, an increase of 559 million yen (up 25.2%) compared to the previous year.
This is because, while there was an increase in costs due to bandwidth acceleration measures with NTT
DOCOMO, INC., along with an increase in users, mainly “Nihon Tsushin SIM” users, 1) inter-connection fees
per unit with carriers for data communication services dropped and 2) the cost ratio improved owing to the
Minister of Internal Affairs and Communications ruling that voice communications services from NTT
DOCOMO, INC., can now be procured on a cost basis.
As a result, gross profit amounted to 1,852 million yen, an increase of 577 million yen (up 45.3%) comparedto the previous year. Operating profit was 279 million yen (248 million yen loss in the previous year), andprofit attributable to owners of the parent was 294 million yen (273 million yen loss in the previous year),resulting in a full-year profit for the first time in seven years.
Financial results by business are as follows(Millions of yen)
Year-on-year changes
Year-on-year changes(%)

Net sales

For the year ended
March 31, 2021

For the year ended
March 31, 2022

MVNO Business

1,874

2,488

613

32.7

Enabler Business

1,623

2,146

522

32.2

Total

3,497

4,634

1,136

32.5

Sales of 123 million yen (126 million yen in the previous year) from overseas operations in the segment
information are included in the Enabler Business.
(2) Financial position of the year ended March 31, 2022
AssetsCurrent assets at the end of the current fiscal year were 1,410 million yen, a decrease of 111 million yen
compared to the end of the previous year. This was mainly due to a decrease of 96 million yen in cash anddeposits. Non-current assets were 531 million yen, an increase of 201 million yen compared to the end of theprevious year. This was mainly due to increases of 37 million yen in property, plant and equipment and 156
million yen in intangible assets.
As a result, total assets amounted to 1,944 million yen, an increase of 86 million yen compared to the end of
the previous year.
Liabilities
Current liabilities at the end of the current fiscal year were 1,106 million yen, a decrease of 386 million yen
compared to the end of the previous year. This was due in large part to decreases of 353 million yen inaccounts payable-trade, 60 million yen in accounts payable-other, and 36 million yen in unearned revenue.
Non-current liabilities were 53 million yen, an increase of 29 million yen compared to the end of the previous
year. This was mainly due to an increase of 26 million yen in long-term unearned revenue.
As a result, liabilities amounted to 1,159 million yen, a decrease of 356 million yen compared to the end of
the previous year.
Net assets
Net assets at the end of the current fiscal year were 785 million yen, an increase of 443 million yen comparedto the end of the previous year.
As a result, the equity ratio was 33.6% (14.2% at the end of the previous year).
(3) Status of cash flows for the year ended March 31, 2022
Cash and cash equivalents at the end of the current fiscal year were 928 million yen, a decrease of 96 million
yen compared to the end of the previous year.

The status of cash flows and their factors during the current fiscal year are as follows.
Cash flows from operating activities
Net cash provided by operating activities totaled 21 million yen (an inflow of 419 million yen in the previousyear). This was due primarily to a 355 million yen in decrease in notes and accounts payable-trade, while
recording profit before income taxes of 299 million yen.
Cash flows from investing activities
Net cash used in investing activities totaled 271 million yen (an outflow of 53 million yen in the previousyear). This was due primarily to payments for purchase of property, plant and equipment of 97 million yen
and purchase of intangible assets of 171 million yen.
Cash flows from financing activities
Net cash provided by financing activities totaled 150 million yen (an inflow of 6 million yen in the previousyear). This was due primarily to 160 million yen of proceeds from share issuance to non-controllingshareholders.
(4) Outlook for the fiscal year ending March 31, 2023 and beyond
Since its founding in 1996, the Company has propounded and implemented the MVNO business model, an
innovative form of telecommunications business, having developed its business with the mission oftransferring (communicating) data safely, securely, and conveniently. Specifically, the Company is engaged inthree businesses: mobile communications business (SIM business), communications business through local
mobile networks (local 4G/5G), as well as digital ID (FPoS: Fintech Platform over SIM) business for use on
smartphones.
The Company plans to build a stable revenue stream by continuing the evolution of the SIM business, as wellas to develop the local 4G/5G business and FPoS business to become the pillar of future earnings by investingin the two businesses.
In the local 4G/5G business, the Company aims to build advanced showcases in the U.S. and leverage theexperience to expand in Japan.
In the FPoS business, the Company has acquired certification under the Digital Signature Act for “my Digital
Certificate” (the issuing entity is my FinTech Inc., a subsidiary of the Company.) based on its patented FPoS
technology, and are working on its actual use as a digital ID that can be used safely, securely, andconveniently on smartphones.
With the surrounding situation above described, the management of the Company perceives a market
capitalization of 500 billion yen as the growth business scale in three to five years from the launch of commercial
service of FPoS(expected within this fiscal year).

2. Basic concept regarding the selection of accounting standards
The Group prepares its consolidated financial statements in accordance with Japanese GAAP, in light of thecomparability of periods of consolidated financial statements and between companies, as well as the burden of
preparing consolidated financial statements under International Financial Reporting Standards (IFRS). The
Company’s policy is to take an appropriate response with respect to the timing of the adoption of IFRS, taking
into consideration various conditions in Japan and overseas.

3. Consolidated Financial Statements(1) Consolidated Balance Sheet(Thousands of yen)
As of March 31, 2021
AssetsCurrent assets
Cash and deposits
Accounts receivable - trade
Merchandise
Supplies
Accounts receivable - other
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings
Accumulated depreciation
Buildings, net
VehiclesAccumulated depreciation
Vehicles, net
Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net
Leased assets
Accumulated depreciation
Leased assets, net
Construction in progress
Total property, plant and equipment
Intangible assets
Patent right
Trademark right
Software
Software in progress
Total intangible assets
Investments and other assets
Investment securities
Leasehold and guarantee deposits
Other
Total investments and other assets
Total non-current assets
Deferred assets
Share issuance costs
Bond issuance costs
Total deferred assets
Total assets

As of March 31, 2022

1,025,466
338,688
74,997514286,139△3,717
1,521,668

928,688378,641
47,55271
576
57,440△2,692
1,410,277

82,357△82,357－
9,794△9,794－
749,510△730,277
19,232
263,727△263,727－
65,47784,71084,111△83,292
818
7,027△4,881
2,145
795,689△766,969
28,719263,727△263,727－
90,093
121,777

2,573
947
26,17520,18449,8803,834
2,097
73,999125,984
205,916

56,990138,642
120
195,753
330,344

63,281
140,335456
204,073
531,767

1,432
4,051
5,483
1,857,497

376
1,937
2,313
1,944,359

(Thousands of yen)
As of March 31, 2021
Liabilities
Current liabilities
Accounts payable - trade
Current portion of long-term borrowings
Accounts payable - other
Income taxes payable
Unearned revenue
Deposits received
Valuation Reserve For Inventory PurchaseCommitments
Other
Total current liabilities
Non-current liabilities
Long-term accounts payable - other
Long-term unearned revenue
Total non-current liabilities
Total liabilities
Net assets
Shareholders' equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Total shareholders' equity
Accumulated other comprehensive income
Foreign currency translation adjustment
Total accumulated other comprehensive
incomeShare acquisition rights
Non-controlling interests
Total net assets
Total liabilities and net assets

As of March 31, 2022

775,032
9,600
145,500
51,846
154,770
26,942

421,105－
85,27062,055
117,785
27,918218,829

263,951

109,656
1,492,178

127,992
1,106,078－
23,96923,9691,516,147

2,149
50,92053,0701,159,149

4,528,440
2,868,630△7,272,002△2,192
122,876

4,528,440
2,977,376△6,977,888△2,192525,737

140,788

126,815140,788

126,815

38,69038,994
341,349
1,857,497

67,86464,792785,210
1,944,359

(2) Consolidated Statements of Income and Comprehensive Income
Consolidated Statement of Income(Thousands of yen)
Fiscal year ended
March 31, 2021
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit (loss)
Non-operating income
Interest income
Share of profit of entities accounted forusing equity method
Foreign exchange gains
Miscellaneous income
Total non-operating income
Non-operating expenses
Interest expenses
Amortization of share issuance costs
Amortization of bond issuance costs
Foreign exchange losses
Share acquisition rights issuance costs
Miscellaneous losses
Total non-operating expenses
Ordinary profit (loss)
Extraordinary income
Gain on sale of non-current assets
Total extraordinary income
Extraordinary losses
Settlement payments
Total extraordinary losses
Profit (loss) before income taxes
Income taxes - current
Total income taxes
Profit (loss)
Loss attributable to non-controlling interests
Profit (loss) attributable to owners of parent

Fiscal year ended
March 31, 2022

3,497,933
2,223,005
1,274,928
1,523,909△248,980

4,634,379
2,782,108
1,852,270
1,572,745
279,525

29

215

10,271

5,834

－
4,564
14,864

17,263
5,728
29,043

245
1,869
2,238
2,825
649
283
8,111
△242,227

52
1,055
2,114
－
－
6,407
9,630
298,938

－
－

100
100

28,122
28,122△270,349
4,630
4,630
△274,980△1,390△273,590－－
299,038
30,42930,429268,608△25,505
294,114

Consolidated Statement of Comprehensive Income(Thousands of yen)
Fiscal year ended
March 31, 2021
Profit (loss)
Other comprehensive income
Foreign currency translation adjustment
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to ownersof parent
Comprehensive income attributable to noncontrolling interests

Fiscal year ended
March 31, 2022

△274,980

268,608

4,278
4,278
△270,702△13,972△13,972
254,636△269,311

280,142△1,390△25,505

(3) Consolidated Statement of Changes in Equity
Previous fiscal year (From April 1, 2020 to March 31, 2021)(Thousands of yen)
Shareholders' equity
Share capital
Balance at beginning of
periodCapital surplus

4,528,440

2,868,630

Retained earnings△6,998,412

Treasury shares△2,192

Total shareholders'equity396,466

Changes during period
Profit (loss)
attributable to owners ofparentNet changes in items
other than shareholders'equityTotal changes during period
Balance at end of period△273,590△273,590－－△273,590－△273,590

4,528,440

2,868,630△7,272,002△2,192

122,876

Accumulated other comprehensive income

Balance at beginning of
periodForeign currencytranslation
adjustment

Total accumulated
other comprehensive
income136,509

136,509

Share acquisitionrights－Non-controllinginterests

15,885

Total net assets

548,861

Changes during period
Profit (loss)
attributable to owners ofparentNet changes in items
other than shareholders'equityTotal changes during period
Balance at end of period△273,590
4,278

4,278

38,69023,10966,078

4,278

4,278

38,69023,109△207,511

140,788

140,788

38,69038,994

341,349

Current fiscal year (From April 1, 2021 to March 31, 2022)(Thousands of yen)
Shareholders' equity
Share capital
Balance at beginning of
periodCapital surplus

4,528,440

2,868,630

Retained earnings△7,272,002

Treasury shares△2,192

Total shareholders'equity122,876

Changes during period
Profit (loss)
attributable to owners ofparentChange in ownershipinterest of parent due totransactions with noncontrolling interests
Net changes in items
other than shareholders'equityTotal changes during period
Balance at end of period

294,114294,114108,746

108,746－

108,746

294,114－402,860

4,528,440

2,977,376△6,977,888△2,192525,737

Accumulated other comprehensive income

Balance at beginning of
periodForeign currencytranslation
adjustment

Total accumulated
other comprehensive
income140,788

140,788

Share acquisitionrights38,690Non-controllinginterests

38,994

Total net assets

341,349

Changes during period
Profit (loss)
attributable to owners ofparentChange in ownershipinterest of parent due totransactions with noncontrolling interests
Net changes in items
other than shareholders'equity294,114108,746△13,972△13,972

29,17425,79840,999Total changes during period△13,972△13,972

29,17425,798443,860

Balance at end of period

126,815

126,815

67,86464,792785,210

(4) Consolidated Statement of Cash Flows(Thousands of yen)
Fiscal year ended
March 31, 2021
Cash flows from operating activities
Profit (loss) before income taxes
Depreciation
Interest and dividend income
Interest expenses
Share of loss (profit) of entities accounted
for using equity method
Foreign exchange losses (gains)
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Increase (decrease) in trade payables
Decrease (increase) in accounts receivable other
Increase (decrease) in unearned revenue
Increase (decrease) in Long-term unearned
revenue
Increase/decrease in consumption taxes
payable/consumption taxes refund receivable
Other, net
SubtotalInterest and dividends received
Interest paid
Income taxes refund (paid)
Settlement paid
Net cash provided by (used in) operating
activities
Cash flows from investing activities
Purchase of property, plant and equipment
Purchase of intangible assets
Payments of leasehold and guarantee deposits
Proceeds from refund of leasehold andguarantee deposits
Other, net
Net cash provided by (used in) investing
activities
Cash flows from financing activities
Repayments of long-term borrowings
Proceeds from issuance of share acquisitionrightsRepayments of lease liabilities
Proceeds from share issuance to noncontrolling shareholders
Net cash provided by (used in) financing
activities
Effect of exchange rate change on cash and cash
equivalents
Net increase (decrease) in cash and cash
equivalents
Cash and cash equivalents at beginning of
periodCash and cash equivalents at end of period

Fiscal year ended
March 31, 2022

△270,349
8,311
△29
245

299,038
22,562△215
52△10,271△5,834

2,794△32,030
28,959456,637△16,733△36,426
25,527△355,377

128,706△524△10,204△39,243

2,310

22,81573,072

2,366

74,283452,43629△245△4,480△28,122

108,433
26,441215△52△4,631－

419,617

21,973△19,132△36,506△22△97,421△171,698△2,303

1,765

－

△10

△336

△53,906△271,759△21,600△9,600

4,047

－

△525

－

24,500160,050

6,422

150,450

1,913

2,557

374,047△96,778

651,419

1,025,466

1,025,466

928,688