Financial Statements
Year ended March 31, 2018

SMS CO., LTD.
Sumitomo Fudosan Shibakoen Tower,
2-11-1, Shibakoen, Minato-ku,
Tokyo, 105-0011, Japan

Consolidated Balance Sheets
SMS CO., LTD. and Its Consolidated Subsidiaries
As of March 31, 2017 and 2018
(Millions of yen)
As of March 31, 2017
AssetsCurrent assets
Cash and deposits
Accounts receivable - trade
Merchandise and finished goods
Work in process
Supplies
Accounts receivable - otherPrepaid expenses
Deferred tax assets
Other
Allowance for doubtful accounts
Total current assets

As of March 31, 2018

7,829
3,932
81
18
36
2,491
722
239
11
(128)

9,515
4,308
50
29
20
3,474
571
353
12
(224)

15,235

18,113

Non-current assets
Property, plant and equipment
Buildings
Accumulated depreciation

375
(185)

413
(252)

Buildings, net

189

160

573
(418)

687
(454)

Tools, furniture and fixtures, net

154

233

Machinery, equipment and vehicles
Accumulated depreciation

43
(19)

39
(27)

23

11

Tools, furniture and fixtures
Accumulated depreciation

Machinery, equipment and vehicles, net

368

405

Intangible assets
Goodwill
SoftwareTrademark rights
Customer-related assets
Other

Total property, plant and equipment

11,166
1,544
9,703
2,692
0

11,539
1,382
9,412
2,368
0

Total intangible assets

25,107

24,703

Investments and other assets
Investment securities
Deferred tax assets
Lease and guarantee deposits
Other

*

Total investments and other assets
Total non-current assets
Total assets

－

1

－

1,665
209
612
33

*

1,721
377
746
20

2,521

2,865

27,99627,974

43,231

46,087

(Millions of yen)
As of March 31, 2017
Liabilities
Current liabilities
Accounts payable - trade
Short-term loans payable
Current portion of long-term loans payable
Accounts payable - otherAccrued expenses
Income taxes payable
Accrued consumption taxes
Advances received
Deposits received
Provision for bonuses
Provision for refund
Other

As of March 31, 2018

311
–
1,201
4,236
182
1,139
242
1,077
52
315
143
8

292
8
1,395
5,061
289
1,068
406
1,183
70
445
153
22

Total current liabilities

8,910

10,400Non-current liabilities
Long-term loans payable
Net defined benefit liability
Deferred tax liabilities
Other

10,210
135
2,374
17

9,690
160
2,175
19

Total non-current liabilities

12,737

12,046

Total liabilities

21,64822,446

Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury shares

2,153
4,148
11,662
(0)

2,167
3,965
14,545(0)

17,963

20,677

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustments

Total shareholders’ equity

0
(838)

0
(1,423)

Total accumulated other comprehensive income(838)(1,423)

Subscription rights to shares
Non-controlling interests

110
4,347

135
4,252

Total net assets

21,58323,641

43,231

46,087

Total liabilities and net assets
See the accompanying Notes to Consolidated Financial Statements.

－

2

－

Consolidated Statements of Income
SMS CO., LTD. and Its Consolidated Subsidiaries
Fiscal year ended March 31, 2017 and 2018
(Millions of yen)
Fiscal year ended
March 31, 2017
Net sales
Cost of sales

Fiscal year ended
March 31, 2018

23,054
3,727

Gross profit

26,611
4,338

19,327

22,273*1 15,681*1 18,251

3,646

4,021

–
9
863
31

29
8
950
58

904

1,047

Non-operating expenses
Foreign exchange losses

11–Interest expenses
Share issuance cost
Other

47
29
31

48
–
13

Total non-operating expenses

120

61

4,430

5,007

–
55

5
–

55

5

20
–
*2 151
–
20
–

3
31
*2 28
19
–
14

Selling, general and administrative expenses
Operating income
Non-operating income
Foreign exchange gains
Interest income
Share of profit of entities accounted for using equity method
Other
Total non-operating income

Ordinary income
Extraordinary income
Gain on sales of non-current assets
Gain on sales of shares of subsidiaries and associates
Total extraordinary income
Extraordinary losses
Impairment loss
Loss on sales and retirement of non-current assets
Loss on sales of shares of subsidiaries and associates
Loss on valuation of investment securities
Loss on sales of investment securities
Loss on business withdrawal

192

98

Profit before income taxes

Total extraordinary losses

4,294

4,914

Income taxes – current
Income taxes – deferred

1,384
(93)

1,707
(299)

Total income taxes

1,290

1,408

Profit

3,004

3,506

203

145

2,801

3,361

Profit attributable to non-controlling interests
Profit attributable to owners of parent
See the accompanying Notes to Consolidated Financial Statements.

－

3

－

Consolidated Statements of Comprehensive Income
SMS CO., LTD. and Its Consolidated Subsidiaries
Fiscal year ended March 31, 2017 and 2018
(Millions of yen)
Fiscal year ended
March 31, 2017
ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustments
Share of other comprehensive income of entities accounted
for using equity method
Total other comprehensive income*

Fiscal year ended
March 31, 2018
3,004

3,506

(9)
(1,263)

(0)
(800)

(5)

(25)

(1,278)*(825)

Comprehensive income

1,725

2,680

Comprehensive income attributable to:Comprehensive income attributable to owners of parent
Comprehensive income attributable to non-controlling interests

1,816
(91)

2,776
(95)

See the accompanying Notes to Consolidated Financial Statements.

－

4

－

Consolidated Statements of Changes in Net Assets
SMS CO., LTD. and Its Consolidated Subsidiaries
Fiscal year ended March 31, 2017 and 2018
(Millions of yen)
Shareholders' equity
Capital stock
Balance at April 1, 2016

Capital surplus

Retained earnings

Total shareholders'

Treasury shares

equity

304

－

9,145

(1,036)8,413

Issuance of new shares

1,848

1,848

－

－

3,697

Dividends of surplus

－

－

(283)

－

(283)

Profit attributable to ownersof parent

－

－

2,801

－

2,801

Net increase (decrease)
due to change in scope of
consolidation

－

－

－

－

－

Change in treasury shares ofparent arising fromtransactions with
non-controlling shareholders

－

(3)

－

－

(3)

Purchase of treasury shares

－

－

－

(0)

(0)

Disposal of treasury shares

－

2,302

－

1,036

3,339

Net changes of items otherthan shareholders' equity

－

－

－

－

－

Total changes of items during
the year

1,848

4,148

2,517

1,036

9,550

Balance at March 31, 2017

2,153

4,148

11,662(0)

17,963

Changes of items during period

Accumulated other comprehensive income
Valuationdifference on
available-for-salesecurities
Balance at April 1, 2016

Foreign currencytranslation
adjustments

Total accumulated
othercomprehensive

Subscription rights

Non-controllingto shares

interests

Total net assets

income

9

135

145

80

4,518

13,157Issuance of new shares

－

－

－

－

－

3,697

Dividends of surplus

－

－

－

－

－

(283)

Profit attributable to ownersof parent

－

－

－

－

－

2,801

Net increase (decrease)
due to change in scope of
consolidation

－

－

－

－

－

－

Change in treasury shares ofparent arising fromtransactions with
non-controlling shareholders

－

－

－

－

－

(3)

Purchase of treasury shares

－

－

－

－

－

(0)

Disposal of treasury shares

－

－

－

－

－

3,339

Net changes of items otherthan shareholders' equity

(9)

(974)

(983)

30

(171)

(1,124)

(9)

(974)

(983)

30

(171)

8,425

0

(838)

(838)

110

4,347

21,583

Changes of items during period

Total changes of items during
the year
Balance at March 31, 2017

－

5

－

(Millions of yen)
Shareholders' equity
Capital stock
Balance at April 1, 2017

Capital surplus

Retained earnings

Total shareholders'

Treasury shares

equity

2,153

4,148

11,662(0)

17,963Issuance of new shares

14

14

－

－

29

Dividends of surplus

－

－

(478)

－

(478)

Profit attributable to ownersof parent

－

－

3,361

－

3,361

Net increase (decrease)
due to change in scope of
consolidation

－

(197)

－

－

(197)

Change in treasury shares ofparent arising fromtransactions with
non-controlling shareholders

－

－

－

－

－

Purchase of treasury shares

－

－

－

(0)

(0)

Disposal of treasury shares

－

－

－

－

－

Net changes of items otherthan shareholders' equity

－

－

－

－

－

14

(183)

2,882

(0)

2,713

2,167

3,965

14,545(0)

20,677

Changes of items during period

Total changes of items during
the year
Balance at March 31, 2018

Accumulated other comprehensive income
Valuationdifference on
available-for-salesecurities
Balance at April 1, 2017

Foreign currencytranslation
adjustments

Total accumulated
Subscription rights
otherto shares
comprehensive
incomeNon-controllinginterests

Total net assets

0

(838)

(838)

110

4,347

21,583Issuance of new shares

－

－

－

－

－

29

Dividends of surplus

－

－

－

－

－

(478)

Profit attributable to ownersof parent

－

－

－

－

－

3,361

Net increase (decrease)
due to change in scope of
consolidation

－

－

－

－

－

(197)

Change in treasury shares ofparent arising fromtransactions with
non-controlling shareholders

－

－

－

－

－

－

Purchase of treasury shares

－

－

－

－

－

(0)

Disposal of treasury shares

－

－

－

－

－

－

Net changes of items otherthan shareholders' equity

(0)

(584)

(584)

25

(95)

(655)

Total changes of items during
the year

(0)

(584)

(584)

25

(95)

2,058

Balance at March 31, 2018

0

(1,423)(1,423)

135

4,252

23,641

Changes of items during period

See the accompanying Notes to Consolidated Financial Statements.

－

6

－

Consolidated Statements of Cash FlowsSMS CO., LTD. and Its Consolidated Subsidiaries
Fiscal year ended March 31, 2017 and 2018
(Millions of yen)
Fiscal year ended
March 31, 2017
Cash flows from operating activities
Profit before income taxes
Depreciation
Amortization of goodwill
Loss (gain) on sales and retirement of non-current assets
Impairment loss
Loss (gain) on sales of investment securities
Loss (gain) on valuation of investment securities
Loss (gain) on sales of shares of subsidiaries and associates
Share of (profit) loss of entities accounted for using equity
methodIncrease (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for refund

Fiscal year ended
March 31, 2018
4,294
876
640
–
20
20
–
95

4,914
965
741
26
3
–
19
28

(681)

(106)

(37)
(46)
13

95
126
10

Increase (decrease) in net defined benefit liability
Foreign exchange losses (gains)
Decrease (increase) in notes and accounts receivable - trade
Increase (decrease) in accrued consumption taxes
Decrease (increase) in accounts receivable - other
Decrease (increase) in prepaid expenses
Increase (decrease) in advances received
Increase (decrease) in accounts payable - other
Other, net

23
11
(10)
141
(599)
(20)
13
821
(407)

24
(29)
(279)
159
(956)
182
60
806
(63)

Subtotal

5,169

6,731

Interest and dividend income received
Interest expenses paid
Income taxes paid

10
(48)
(1,211)11(48)(1,883)

Net cash provided by (used in) operating activities

3,919

4,811

(1,199)
655
(67)
(815)
(40)
13
(38)

(998)
1,024
(214)
(707)
–
–
–

–

(1,197)

–

(11)

381

–

Cash flows from investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sales of investment securities
Payments of loans receivable
Purchase of shares of subsidiaries resulting in change inscope of consolidation
Payments for sales of shares of subsidiaries resulting inchange in scope of consolidation
Proceeds from sales of shares of subsidiaries resulting inchange in scope of consolidation
Other, net

76

Net cash provided by (used in) investing activities(1,033)－7－

9(2,095)(Continued)

(Millions of yen)
Fiscal year ended
March 31, 2017
Cash flows from financing activities
Decrease in short-term loans payable
Proceeds from long-term loans payable
Repayments of long-term loans payable
Proceeds from issuance of shares resulting from exerciseof share acquisition rights
Proceeds from issuance of common shares
Proceeds from sales of treasury shares
Cash dividends paid
Payments from changes in ownership interests in
subsidiaries that do not result in change in scope of
consolidation
Other, net

Fiscal year ended
March 31, 2018

(19,000)
12,012
(600)

(32)
973
(1,359)

–

17

3,679
3,324
(289)

–
–
(478)

(3)

(230)

1

2

Net cash provided by (used in) financing activities(875)(1,107)

Effect of exchange rate change on cash and cash equivalents

(17)

19

Net increase (decrease) in cash and cash equivalents

1,993

1,627

Cash and cash equivalents at beginning of year

5,147

7,140

Cash and cash equivalents at end of year*

See the accompanying Notes to Consolidated Financial Statements.

－

8

－

7,140

*

8,768

Notes to Consolidated Financial Statements(Significant matters that serve as the basis for the preparation of consolidated financial statements)
1. Matters related to the scope of consolidation
Number of consolidated subsidiaries: 40
Names of major consolidated subsidiaries
SMS Career CO., LTD.
SENIOR MARKETING SYSTEM ASIA PTE. LTD.
MIMS Pte. Ltd.
MIMS (Shanghai) Ltd.
MIMS (NZ) Limited
KIMS Limited
SENIOR MARKETING SYSTEM SDN. BHD. and others
For the fiscal year ended March 31, 2018, WILLONE Co., Ltd. and eight other subsidiaries were included in the scope of
consolidation due to acquisition of shares or establishment of new companies.
For the fiscal year ended March 31, 2018, SMS Medicare Service CO., LTD. and another subsidiary were excluded fromthe scope of consolidation due to sale of shares.
2. Application of equity method(1) Number of affiliates accounted for using equity method: 3Name of major affiliate
M3 Career, Inc.
(2) Number of affiliates not accounted for using equity method: 1
Name of affiliate not accounted for using equity method
HelpingDoc Private Limited(Reason for exclusion from application of equity method)
The affiliates not accounted for using equity method do not have a material impact in aggregate, and the company’s
profit (amount corresponding to equity holdings) and retained earnings (amount corresponding to equity holdings) do nothave a material effect on the consolidated financial statements. Therefore, they are not accounted for using equity
method.
3. Fiscal year of consolidated subsidiaries
The fiscal year-end of SMS Career CO., LTD., SMS Support Service CO., LTD., SMS Financial Service CO., LTD., Zweig
Co., Ltd., WorkAmbitious Co., Ltd., and WILLONE Co., Ltd. is March 31, which is the same as the Company’s fiscal year-end.
The fiscal year-end of consolidated subsidiaries other than those above is December 31. Since the difference in fiscal
year-ends is not more than three months, financial statements as of December 31 are used in preparing the consolidated financial
statements. For significant transactions that occurred in the period from their fiscal year-end to the Company’s fiscal year-end,
necessary adjustments have been made upon consolidation.
4. Matters related to the accounting policies(1) Basis and method of valuation of significant assets
a. Securities
Available-for-sale securities
Available-for-sale securities without a determinable market value are stated at cost determined by the moving-averagemethod.
b. Inventories
Merchandise and finished goods, work in process and supplies
Inventories are mainly measured at cost determined by the weighted-average method. (The amounts on the consolidatedbalance sheets are calculated using a method of writing down the book value due to decreased profitability..)

－

9

－

(2) Depreciation and amortization method of significant depreciable assets
a. Property, plant and equipment
Property, plant and equipment is depreciated using the declining-balance method. Buildings and accompanying fixturesand structures acquired on or after April 1, 2016 are depreciated using the straight-line method.
Major useful lives are as follows:
6 to 15 years
Buildings
Tools, furniture and fixtures
3 to 9 years
2 to 5 years
Machinery, equipment and vehicles
b. Intangible assets
Intangible assets are amortized using the straight-line method.
Major useful lives are as follows:
SoftwareEstimated period of internal use (within 5 years)
Not amortized
Trademark rights
12 years
Customer-related assets(3) Basis of significant allowances and provisions
a. Allowance for doubtful accounts
For normal trade receivables, allowance for doubtful accounts is provided at an amount determined based on thehistorical experience of bad debt. For certain receivables such as doubtful receivables, uncollectible amounts areindividually estimated.
b. Provision for bonuses
Provision for bonuses is provided for the payment of employees’ bonuses based on the estimate of future payments
attributed to the fiscal year.
c. Provision for refund
In order to meet refund payments due to applicants’ resignation based on the refund clause stipulated in job placement
contracts between the Company and clients, provision for refund is provided at an amount estimated based on historicalexperience.
(4) Methods for significant hedge accounting
a. Hedge accounting method
Deferral hedge accounting is applied. For interest rate swaps, special accounting treatment is applied if the criteria for
special accounting treatment are met. For currency swaps, the allocation method is applied if the criteria for the allocation
method are met.
b. Hedging instruments and hedged items
Interest rate swaps and currency swaps
Hedging instruments:
Long-term loans payable and associated interest denominated in foreign currencies
Hedged items:c. Hedge policy
As a policy, the Company uses interest rate swaps and currency swaps in order to mitigate and avoid interest rate
fluctuation risk and foreign exchange fluctuation risk.
d. Method of evaluating hedge effectivenessHedge effectiveness is evaluated by comparing the total changes in values of hedging instruments and hedged items forthe periods from the commencement of hedge contracts to the evaluation dates. For interest rate swaps which meet thecriteria for special accounting treatment, the evaluation of hedge effectiveness is omitted.
(5) Accounting treatments for retirement benefit
a. The method of attributing expected benefit to periods
The straight-line method is used as the method of attributing expected benefit to periods through the fiscal year-end in
calculating the projected benefit obligations.
b. The method of recognizing actuarial gain or loss
Actuarial gain or loss is charged to income in the fiscal year when such gain or loss is incurred.

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10

－

(6) Basis of translation of significant assets and liabilities denominated in foreign currencies into Japanese yen
All monetary assets and liabilities denominated in foreign currencies are translated into yen at the exchange rates
prevailing as of the fiscal year-end, and resulting gains and losses are included in income.
Assets and liabilities of overseas consolidated subsidiaries are translated into yen at the year-end exchange rates, andincome and expenses are translated into yen at average exchange rates during the year. Differences arising from thetranslations are included in “Foreign currency translation adjustments” and “Non-controlling interests” under net assets.
(7) Amortization of goodwill – method and period of amortization
Goodwill is amortized over its effective period, not exceeding 20 years, on a straight-line basis.
(8) Cash and cash equivalents in consolidated statements of cash flows
The Company considers cash on hand, readily available deposits, and all easily convertible short-term instruments with amaturity of three months or less when purchased that are exposed to insignificant risk of changes in value to be cash andcash equivalents.
(9) Other significant matters for preparation of consolidated financial statementsa. Accounting treatment of consumption taxes
Consumption taxes are accounted for by the tax-excluded method.
b. Consolidated taxation system
The Company and certain consolidated subsidiaries have applied the consolidated taxation system, with the Company
being a parent company under the system.
(Consolidated balance sheets)* Investment in non-consolidated subsidiaries and affiliates included in investment securities is as follows:(Millions of yen)
As of March 31, 2017
Investment securities (shares)

As of March 31, 2018

1,635

1,707

(Consolidated statements of income)*1 Major items and amounts included in selling, general and administrative expenses are as follows:(Millions of yen)
Fiscal year ended
March 31, 2018

Fiscal year ended
March 31, 2017
Salaries and allowance
Advertising expenses
Amortization of goodwill
Depreciation
Business consignment expenses
Legal welfare expenses
Rents
Provision for bonuses
Retirement benefit expenses
Provision of allowance for doubtful accounts

－

11

－

5,072
2,787
640
876
2,261
727
891
334

5,867
3,413
741
965
2,502
904
1,122
266

37
32

41
146

*2 Loss on sales of shares of subsidiaries and associates is as follows:
Fiscal year ended
March 31, 2017
Losses mainly on sale of shares of eChannelling PLC

Fiscal year ended
March 31, 2018

Losses mainly on sale of shares of SMS Medicare Service CO., LTD(Consolidated statements of comprehensive income)* Reclassification adjustments and tax effects in connection with other comprehensive income(Millions of yen)
Fiscal year ended
March 31, 2018

Fiscal year ended
March 31, 2017
Valuation difference on available-for-sale securities:
Amount arising during the year

(0)

(0)

Reclassification adjustments(9)–

Amount before tax effects

(9)

(0)

Tax effects

00Valuation difference on available-for-sale securities

(9)

(0)

Amount arising during the year

(1,212)(800)

Reclassification adjustments

(51)

–

(1,263)(800)

Amount arising during the year

(5)

(25)

Reclassification adjustments––

Share of other comprehensive income of entities
accounted for using equity method

(5)

(25)

(1,278)(825)

Foreign currency translation adjustments:

Foreign currency translation adjustments
Share of other comprehensive income of entities
accounted for using equity method:

Total other comprehensive income(Consolidated statements of changes in net assets)
Fiscal year ended March 31, 2017
1. Matters regarding class and number of issued shares and class and number of treasury shares(Shares)Number of shares at
beginning of year

Increase

Number of shares at
end of year

Decrease

Issued shares:
Common stock (Note 1)
Total

41,887,200

1,495,400－

43,382,600

41,887,200

1,495,400－

43,382,600

1,330,272

41

1,330,200

113

1,330,272

41

1,330,200

113

Treasury shares:
Common stock (Note 2)
Total(Notes) 1.

Increase in issued shares (1,495,400 shares) is due to the issuance of new shares (1,469,800 shares) in overseas markets
and the exercise of subscription rights to shares (25,600 shares).
2. Decrease in treasury shares is due to the disposal of treasury shares (1,330,200 shares) in overseas markets.

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12

－

2. Matters regarding subscription rights to sharesClassification

The
Company(Parent
company)

Number of shares subject to subscription rights to shares (shares)

Description of subscription
rights to sharesClass of sharessubject to
subscription
rights to shares

August 2011No.7 Stock Option

Commonstock

38,400－32,0006,400

0July 2012No.8 Stock Option

Commonstock

72,000－14,40057,60016

July 2013
No.9 Stock Option

Commonstock

72,000－9,600

62,40021

July 2014
No.10 Stock Option

Commonstock

200,000－－

200,000

66

July 2016
No.11 Stock Option

Commonstock－

18,000－18,000

4

July 2016
No.12 Stock Option

Commonstock－

206,000－

206,000

1－

382,400

224,000

56,000550,400

110

Total

Beginning ofyear

Increase

Decrease

Balance at endof year(Millions ofyen)

End of year

(Notes) 1.

The stock options above will be exercisable in the following schedule: No. 7 Stock Option on August 19, 2016; No.8
Stock Option on July 20, 2017; No.9 Stock Option on July 18, 2018; No.10 Stock Option on July 17, 2021; No.11
Stock Option on July 20, 2019; and No.12 Stock Option on July 1, 2019.
2. Decreases are due to the exercise and the expiration of subscription rights to shares.

3. Matters regarding dividend(1) Dividend payment
Resolution
Ordinary General
Meeting of
Shareholders heldon June 24, 2016Class

Dividend amount(Millions of yen)

Common stock

Dividend per share
(Yen)

283

7

Record date

Effective date

March 31, 2016

June 27, 2016

(2) Of the dividends whose record date belongs to the fiscal year ended March 31, 2017, the dividend whose effective date falls
in the fiscal year ending March 31, 2018
Dividend
Dividend
Resolution
Class
Resource
amountRecord date
Effective date
per share(Millions of yen)
(Yen)
Ordinary General
Meeting of
Shareholders heldon June 22, 2017

Commonstock

Retainedearnings

477

－

13

11

－

March 31, 2017

June 23, 2017

Fiscal year ended March 31, 2018
1. Matters regarding class and number of issued shares and class and number of treasury shares(Shares)Number of shares at
beginning of year

Increase

Number of shares at
end of year

Decrease

Issued shares:
Common stock (Note 1)
Total

43,382,600

38,400－43,421,000

43,382,600

38,400－43,421,000

113

42

－

155

113

42

－

155

Treasury shares:
Common stock (Note 2)
Total(Notes) 1. Increase in issued shares (38,400 shares) is due to the exercise of subscription rights to shares.
2. Increase in treasury shares (42 shares) is due to the acquisition of treasury shares.
2. Matters regarding subscription rights to sharesClassification

The
Company(Parent
company)

Number of shares subject to subscription rights to shares (shares)

Description of subscription
rights to sharesClass of sharessubject to
subscription
rights to shares

August 2011No.7 Stock Option

Common
stock

6,400

－

－

6,400

0

July 2012No.8 Stock Option

Commonstock

57,600－43,20014,400

4

July 2013
No.9 Stock Option

Commonstock

62,400－4,800

57,60024

July 2014
No.10 Stock Option

Commonstock

200,000－－

200,000

90

July 2016
No.11 Stock Option

Commonstock

18,000－－18,00011

July 2016
No.12 Stock Option

Commonstock

206,000－

2,000

204,000

1

May 2017
No.13 Stock Option

Commonstock－

159,000

1,000

158,0002－

550,400

159,000

51,000658,400

135

Total

Beginning ofyear

Increase(Notes) 1.

Decrease

End of year

Balance at endof year(Millions ofyen)

The stock options above will be exercisable in the following schedule: No. 7 Stock Option on August 19, 2016; No.8
Stock Option on July 20, 2017; No.9 Stock Option on July 18, 2018; No.10 Stock Option on July 17, 2021; No.11
Stock Option on July 20, 2019; No.12 Stock Option on July 1, 2019; and No.13 Stock Option on July 1, 2020.
2. The breakdown of decreases is as follows:
Subscription rights to shares (shares)
ExerciseNo.8 Stock Option
No.9 Stock Option
No.12 Stock Option
No.13 Stock Option

Expiration

38,400
－
－
－

4,800
4,800
2,000
1,000

－

14

－

3. Matters regarding dividend(1) Dividend payment
Resolution
Ordinary General
Meeting of
Shareholders heldon June 22, 2017Class

Dividend amount(Millions of yen)

Dividend per share
(Yen)

477

11

Common stock

Record date

Effective date

March 31, 2017

June 23, 2017(2) Of the dividends whose record date belongs to the fiscal year ended March 31, 2018, the dividend whose effective date falls
in the fiscal year ending March 31, 2019.
Dividend
Dividend
Resolution
Class
Resource
amountper share
Record date
Effective date(Millions of yen)
(Yen)
Ordinary General
Meeting of
Shareholders heldon June 21, 2018

Commonstock

Retainedearnings

564

13

March 31, 2018

June 22, 2018

(Consolidated statements of cash flows)* Reconciliation of cash and cash equivalents in the consolidated statements of cash flows to accounts and amounts in theaccompanying consolidated balance sheets(Millions of yen)
Fiscal year ended
Fiscal year ended
March 31, 2017
March 31, 2018
Cash and deposits

7,829

9,515

Time deposits with maturity in excess of threemonths

(688)

(747)

Cash and cash equivalents

7,140

8,768

(Leases)
Disclosure is omitted due to immateriality.
(Financial instruments)
1. Status of financial instruments(1) Policy on financial instruments
As a policy, the Company generally operates its business using funds provided by operating activities, and invests temporary
surplus funds in very safe financial instruments. The Company does not enter into financial transactions for trading or
speculative purposes.
(2) Types of financial instruments, related risk and risk management
Accounts receivable - trade and accounts receivable - other are exposed to the credit risk of customers; however, the risk islimited because most of these receivables are due within two months. In accordance with the Company’s credit management
policy, the Company manages such risk by monitoring due dates and outstanding balances by customer and evaluating their
credit status.
Accounts payable - other and income taxes payable have payment due dates within one year, in general. Current liabilities
including these payables are exposed to liquidity risk at time of settlement. However, the Company avoids such risk byreviewing the cash management plan on a monthly basis.
Long-term loans payable are primarily for share acquisitions related to M&A transactions. The Company manages interest
rate fluctuation risk and the foreign exchange fluctuation risk of each contract by using derivative transactions such as interest
rate swaps and currency swaps as hedging instruments.
(3) Supplemental information regarding fair value of financial instruments
The fair value of financial instruments is based on their market prices, if available. Where there is no market price available,
－

15

－

fair value is reasonably estimated. Because estimations of fair value incorporate variable factors, the fair value may vary whendifferent assumptions are applied.
2. Matters regarding fair value of financial instruments
The carrying amount, fair value and the difference between them are as follows. Financial instruments for which fair value isextremely difficult to estimate are excluded from the following table (See Note 2 below).
As of March 31, 2017
(Millions of yen)
Carrying amount

Fair value

Difference(1) Cash and deposits

7,829

7,829

－

(2) Accounts receivable - trade

3,932

3,932

－

(128)

(128)

－

3,804

3,804

－

2,491

2,491

－

14,125

14,125－(4) Long-term loans payable (*2)

11,411

11,280(130)(5) Accounts payable - other

4,236

4,236

－

(6) Income taxes payable

1,139

1,139

－

Total liabilities

16,787

16,657

(130)

－

－

－

Allowance for doubtful accounts (*1)(3) Accounts receivable - otherTotal assets

Derivative transactions(*1) The amount is presented as allowance for doubtful accounts receivable - trade.
(*2) The amount includes current portion of long-term loans payable.
As of March 31, 2018
(Millions of yen)
Carrying amount

Fair value

Difference(1) Cash and deposits

9,515

9,515

－

(2) Accounts receivable - trade

4,308

4,308

－

(224)

(224)

－

4,084

4,084

－

3,474

3,474

－

17,074

17,074－(4) Long-term loans payable (*2)

11,086

11,046(39)(5) Accounts payable - other

5,061

5,061

－

(6) Income taxes payable

1,068

1,068

－

Total liabilities

17,216

17,176

(39)

－

－

－

Allowance for doubtful accounts (*1)(3) Accounts receivable - otherTotal assets

Derivative transactions(*1) The amount is presented as allowance for doubtful accounts receivable - trade.
(*2) The amount includes current portion of long-term loans payable.
－

16

－

(Notes) 1. Measurement method of fair value of financial instruments and information on securities
Assets(1) Cash and deposits, (2) Accounts receivable - trade, (3) Accounts receivable - other
Since these items are settled in a short period of time, their carrying amount approximates fair value. Since it isextremely difficult to estimate credit risk of each receivable, the Company estimates the fair value of accounts
receivable - trade by deducting allowance for doubtful receivables from the carrying amount, considering thatallowance for doubtful accounts approximates the amount of credit risk.
Liabilities(4) Long-term loans payable (including current portion)
Since the interest on these loans payable is fixed rate or fixed using interest rate swaps, the fair value is calculatedby discounting the total of principal and interest classified by the remaining period to the maturity using an assumed
interest rate applicable to a similar type of new borrowings.
(5) Accounts payable - other, (6) Income taxes payable
Since these items are settled in a short period of time, their carrying amount approximates fair value.
Derivative transactions
Interest rate swaps under the special accounting treatment and currency swaps under the allocation method areaccounted for as an integral component of long-term loans payable designated as hedged items. Thus, their fair value
is included in those of the loans payable.
2. Financial instruments whose fair value is extremely difficult to determine(Millions of yen)Classification

As of March 31, 2017

As of March 31, 2018

Investment securities
Unlisted shares

1,665

1,721

These securities are not included in the table above, as there were no market prices available and it is extremely
difficult to determine the fair value.
3. Maturity analysis for financial assets and securities with contractual maturities
As of March 31, 2017
(Millions of yen)Due in one year or
less

Due after one year
through five years

Due after five years
through ten years

Due after ten years

Cash and deposits

7,792

－

－

－

Accounts receivable -trade

3,932

－

－

－

Accounts receivable -other

2,491

－

－

－

Total

14,215－－－

As of March 31, 2018
(Millions of yen)Due in one year or
less

Due after one year
through five years

Due after five years
through ten years

Due after ten years

Cash and deposits

9,447

－

－

－

Accounts receivable -trade

4,308

－

－

－

Accounts receivable -other

3,474

－

－

－

Total

17,230

－

－

－

－

17

－

4. Maturity analysis for bonds, long-term loans payable, leases payable and other interest-bearing debts and otherinterest-bearing debts
As of March 31, 2017
(Millions of yen)
Due after
Due after
Due after
Due after
one year
two years
three years
four years
Due after
Due in one
throughthroughthroughthroughfive years
year or lesstwo years
three years
four years
five years
－
－
－
－
－
－
Short-term loans payable
Long-term loans payable

1,201

1,201

1,201

1,201

1,201

5,405

Total

1,201

1,201

1,201

1,201

1,201

5,405

Due after
one yearthrough
two years－

Due after
two years
throughthree years－

Due after
three years
throughfour years－

Due after
four years
throughfive years
－

1,395

1,395

1,395

1,298

4,204

1,395

1,395

1,395

1,298

4,204

As of March 31, 2018
(Millions of yen)Due in one
year or less
Short-term loans payable
Long-term loans payable

8
1,395

Total

1,404

(Securities)
1. Impairment of securities
Fiscal year ended March 31, 2017
None to report.
Fiscal year ended March 31, 2018
The disclosure is omitted due to immateriality.
2. Available-for-sale securities sold during the fiscal year
Fiscal year ended March 31, 2017
The disclosure is omitted due to immateriality.
Fiscal year ended March 31, 2018
None to report.

－

18

－

Due after
five years－

(Derivative transactions)
1. Derivatives transactions for which hedge accounting has not been applied
None to report.
2. Derivatives transactions for which hedge accounting has been applied(1) Currency-related
As of March 31, 2017
(Millions of yen)
Hedge accounting
methodTransaction
Currency swaps

Allocation method

Receive: U.S. dollar /Pay: Yen

Main hedged
itemLong-termloans payable

Contract amount

12,012Contract amountover one year
10,210Fair value(Note)(Note) Currency swaps under the allocation method are accounted for as an integral component of long-term loans payable
designated as hedged items. Thus, their fair value is included in those of the loans payable.
As of March 31, 2018
(Millions of yen)
Hedge accounting
methodTransaction
Currency swaps

Allocation method

Receive: U.S. dollar/
Pay: Yen

Main hedged
itemLong-termloans payable

Contract amountContract amountover one year
12,012

9,009

Fair value(Note)(Note) Currency swaps under the allocation method are accounted for as an integral component of long-term loans payable
designated as hedged items. Thus, their fair value is included in those of the loans payable.
(2) Interest rate-related
As of March 31, 2017
(Millions of yen)
Hedge accounting
methodSpecial accounting
treatment

Transaction
Interest rate swaps
Receive: Floating /Pay: Fix

Main hedged
itemLong-termloans payable

Contract amount

12,012Contract amountover one year
10,210Fair value(Note)(Note) Interest rate swaps under special accounting treatment are accounted for as an integral component of long-term loans
payable designated as hedged items. Thus, their fair value is included in those of the loans payable.
As of March 31, 2018
(Millions of yen)
Hedge accounting
methodSpecial accounting
treatment

Transaction
Interest rate swaps
Receive: Floating /Pay: Fix

Main hedged
itemLong-termloans payable

Contract amount

12,012Contract amountover one year
9,009

Fair value(Note)(Note) Interest rate swaps under special accounting treatment are accounted for as an integral component of long-term loans
payable designated as hedged items. Thus, their fair value is included in those of the loans payable.

－

19

－

(Retirement benefit)
1. Summary of retirement benefit plans
The Group has only a lump-sum payment plan.
2. Defined benefit plan
(1) Reconciliation between beginning balance and ending balance of projected benefit obligations(Millions of yen)
Fiscal year ended
March 31, 2018

Fiscal year ended
March 31, 2017
Balance at beginning of year

111

135

Service cost

31

38

Interest cost(0)0Actuarial gain or loss

5

2

Retirement benefits paid

(9)

(16)

Decrease due to change in scope of
consolidation

(3)

－

135

160

Balance at end of year

(2) Reconciliation between the ending balance of projected benefit obligations and net defined benefit liability recorded on the
consolidated balance sheets(Millions of yen)
As of March 31, 2017

As of March 31, 2018

Unfunded retirement benefit obligations

135

160

Net defined benefit liability

135

160

(3) The components of retirement benefit expenses and their amounts(Millions of yen)
Fiscal year ended
March 31, 2017

Fiscal year ended
March 31, 2018

Service cost

31

38

Interest cost(0)0

Amortization of actuarial gain or loss

5

2

Total retirement benefit expenses

3741(4) The major assumptions used for the actuarial calculation (weighted average)
As of March 31, 2017

As of March 31, 2018

0.1%

0.1%

Discount rate

－

20

－

(Stock options)
1. The amount of costs incurred for the stock option plans and the account recorded are as follows:(Millions of yen)

Share-based compensation expenses included in general andadministrative expenses

Fiscal year ended
March 31, 2017

Fiscal year ended
March 31, 201831

33

2. Outline, number and status of changes in number of stock options(1) Outline of stock options
No.7 Stock Option

No.8 Stock Option

No.9 Stock Option

4 directors, 9 employees

5 directors, 9 employees

4 directors, 13 employees

54,400 shares

91,200 shares

100,800 shares

August 18, 2011

July 19, 2012

July 18, 2013

The grantee shall be in theposition of director or
employee of the Company or

The grantee shall be in theposition of director or
employee of the Company or

Vesting condition

The grantee shall be in theposition of director or
employee of the Company or
its associates. This shall not
apply in cases where thegrantee resigned the position
due to expiration of the termof office, retired due to theage of retirement or other
legitimate reasons.
Other terms and conditions
shall be stipulated in thecontract for allotment ofsubscription rights to shares.

its associates. This shall not
apply in cases where thegrantee resigned the position
due to expiration of the termof office, retired due to theage of retirement or other
legitimate reasons.
Other terms and conditions
shall be stipulated in thecontract for allotment ofsubscription rights to shares.

its associates. This shall not
apply in cases where thegrantee resigned the position
due to expiration of the termof office, retired due to theage of retirement or other
legitimate reasons.
Other terms and conditions
shall be stipulated in thecontract for allotment ofsubscription rights to shares.

Service period

August 18, 2011 –August 18, 2016

July 19, 2012 –July 19, 2017

July 18, 2013 –July 17, 2018

Exercise period

August 19, 2016 –August 18, 2021

July 20, 2017 –July 19, 2022

July 18, 2018 –July 17, 2023

Position and number ofgrantees
Number of options granted(Notes 1 and 2)
Date of grant

－

21

－

No.10 Stock Option

No.11 Stock Option

No.12 Stock Option

Position and number ofgrantees
Number of options granted(Notes 1 and 2)

1 director

3 directors

3 directors, 40 employees

200,000 shares

18,000 shares

206,000 shares

Date of grant

July 17, 2014

August 9, 2016

August 9, 2016

The grantee shall be in theposition of director of theCompany. This shall not
apply in cases where thegrantee resigned the position
due to expiration of the termof office or other legitimate
reasons.
Other terms and conditions
shall be stipulated in thecontract for allotment ofsubscription rights to shares.

The grantee shall be in theposition of director of theCompany. This shall not
apply in cases where thegrantee resigned the position
due to expiration of the termof office or other legitimate
reasons.
Other terms and conditions
shall be stipulated in thecontract for allotment ofsubscription rights to shares.

Only when EBITDA for the
fiscal year ending March 31,
2019 exceeds (a), (b), or (c)stated below, subscription
rights to shares shall become
exercisable. Of thesubscription rights allotted toeach grantee, the number ofrights which become
exercisable (“exercisable
ratio”) shall be determined asfollows:(a) EBITDA exceeds ¥4,977
million: exercisable ratio is
10%(b) EBITDA exceeds ¥6,462
million: exercisable ratio is50%(c) EBITDA exceeds ¥8,216
million: exercisable ratio is
100%

Vesting condition

Other terms and conditions
shall be stipulated in thecontract for allotment ofsubscription rights to shares.
Service period

July 17, 2014 –July 16, 2021

August 9, 2016 –July 19, 2019－

Exercise period

July 17, 2021 –July 16, 2024

July 20, 2019 –July 19, 2026

July 1, 2019 –June 30, 2024

－

22

－

No.13 Stock Option
Position and number ofgrantees
Number of options granted(Notes 1 and 2)
Date of grantVesting condition

2 directors, 44 employees
159,000 shares
June 19, 2017
Only when operating income
for the fiscal year ending
March 31, 2020 exceeds (a),(b), or (c) stated below,
subscription rights to sharesshall become exercisable. Of
the subscription rights allottedto each grantee, the numberof rights which become
exercisable (“exercisable
ratio”) shall be determined asfollows:(a) Operating income exceeds¥4,853 million: exercisable
ratio is 10%(b) Operating income exceeds¥6,301 million: exercisable
ratio is 50%(c) Operating income exceeds¥8,011 million: exercisable
ratio is 100%
Other terms and conditions
shall be stipulated in thecontract for allotment ofsubscription rights to shares.

Service period－

Exercise period

July 1, 2020 –June 30, 2025

(Notes)1. It is converted and stated as number of shares.
2. Based on the resolution of the Board of Directors’ meeting held on November 19, 2014, the Company implemented a2-for-1 stock split effective January 1, 2015. The number of shares above represents those after the stock split.

－

23

－

(2) Number and status of changes in number of stock options
The following tables are based on the stock options that existed for the fiscal year ended March 31, 2018. The number ofstock options is converted and stated as the number of shares.
a. Number of stock options(Shares)No.7 Stock Option

No.8 Stock Option

No.9 Stock Option

Outstanding at March 31, 2017－57,60062,400Granted－－－Increase due to stock split

－

－

－

Forfeited

－

4,800

4,800

Vested－52,800－

Outstanding at March 31, 2018－－57,600

6,400

－

－

Vested－52,800－

Increase due to stock split

－

－

－

Exercised－

38,400－Forfeited

－

－

－

6,400

14,400－No.10 Stock Option

No.11 Stock Option

No.12 Stock Option

200,000

18,000206,000

Granted－－－Increase due to stock split

－

－

－

Forfeited

－

－

2,000

Vested－－－200,000

18,000204,000

Outstanding at March 31, 2017

－

－

－

Vested－－－Increase due to stock split

－

－

－

Exercised－－－

Forfeited－－－

Outstanding at March 31, 2018

－

－

－

Non-vested:

Vested:Outstanding at March 31, 2017

Outstanding at March 31, 2018

Non-vested:
Outstanding at March 31, 2017

Outstanding at March 31, 2018
Vested:－24－

No.13 Stock Option
Non-vested:－

Outstanding at March 31, 2017
Granted

159,000－

Increase due to stock split
Forfeited

1,000

Vested－Outstanding at March 31, 2018

158,000

Vested:Outstanding at March 31, 2017－

Vested－Increase due to stock split－

Exercised－

Forfeited－

Outstanding at March 31, 2018－

(Note) Based on the resolution of the Board of Directors’ meeting held on November 19, 2014, the Company implemented a 2-for-1
stock split effective January 1, 2015. The number of shares above represents those after the stock split.
b. Price information of stock options

Exercise price
Average market price of the stockat the time of exercise
Fair unit value(date of grant)

Exercise price
Average market price of the stockat the time of exercise
Fair unit value(date of grant)(Yen)
No.7 Stock Option

No.8 Stock Option

No.9 Stock Option

213

468

743

－

3,610

－

112

293

457

No.10 Stock Option

No.11 Stock Option

No.12 Stock Option

1,471

2,409

2,380

－

－

－

844

1,137

6

No.13 Stock Option
Exercise price
Average market price of the stockat the time of exercise
Fair unit value(date of grant)

3,055
－
15

(Note) Based on the resolution of the Board of Directors’ meeting held on November 19, 2014, the Company implemented a 2-for-1
stock split effective January 1, 2015. The number of shares above represents those after the stock split.
－

25

－

3. Methods to estimate fair values of stock options
The methods to estimate fair values of No. 13 stock option granted for the fiscal year ended March 31, 2018 are as follows:
No.13 Stock Option
a. Valuation techniqueMonte Carlo simulation
b. Major assumptions and estimation method
No.13 Stock Option
Volatility of stock price (Note 1)

52.45%

Remaining period to maturity

8 years

Estimated dividend (Note 2)¥11 per share

Risk-free interest rate (Note 3)(0.01)%(Note) 1. Volatility of stock price is estimated based on the actual stock prices from May 1, 2009 to May 12, 2017.
2. Actual dividend for the fiscal year ended March 31, 2017.
3. Yield of Japanese government bonds corresponding to the estimated remaining period.
4. Method of estimating number of stock options vested
Since it is difficult to reasonably estimate the number of stock options that will expire in the future, only the number of options
that has been forfeited is reflected.
(Tax-effect accounting)
1. Major components of deferred tax assets and deferred tax liabilities(Millions of yen)
As of March 31, 2017
Deferred tax assets:
Enterprise tax payable
Provision for bonuses
Provision for refund
Legal welfare expenses payable
Allowance for doubtful accounts
Amortization of software
Provision for retirement benefits
Incidental costs of share acquisition
Loss carryforward
Other
Subtotal
Valuation allowance
Total deferred tax assets
Offset by deferred tax liabilities
Deferred tax assets, net
Deferred tax liabilities:
Customer-related assets
Valuation difference on available-for-sale securities
Other
Total deferred tax liabilities
Offset by deferred tax assets
Deferred tax liabilities, net

As of March 31, 2018

50
67
49
22
31
125
45
88
579
65
1,125
(579)
545
(96)
449

82
101
53
14
34
191
53
93
406
21
1,054
(323)
730
－
730

2,458
0
12
2,470
(96)
2,374

2,175
0
－
2,175
－
2,175

2. Reconciliation between the statutory tax rate and the effective tax rate reflected in the consolidated statements of income
The disclosure is omitted because the difference between the statutory tax rate and the effective tax rate reflected in the
consolidated statements of income is 5% or less of the statutory tax rate.

－

26

－

(Asset retirement obligations)
The Group has obligations to restore assets to their original state on leaving the properties based on real estate lease contracts foroffice spaces, which are asset retirement obligations.
Based on the lease contracts, the Group has paid deposits, which normally cover significant portion of restoration costs, andrecorded the amounts as lease and guarantee deposits. Instead of recording liabilities for asset retirement obligations, the Groupreasonably estimates the amounts which would not be recoverable at the end of the lease periods and recognizes expenses for theyear by amortizing the amounts of deposits over the expected periods of use.
For the estimate, the Group assumes the expected periods of use to be a lease period from the commencement of real estate lease
contracts to the end of the lease term.
The total amount assumed to be non-recoverable as of March 31, 2018 is ¥128 million, of which the amount recognized as
expenses for the fiscal year ended March 31, 2018 is ¥38 million.

(Segment information and other)【Segment information】
Overview of reportable segments
The Company and its consolidated subsidiaries consist of a single business, which aims to build information infrastructure
suitable for the aging society, and operations incidental thereto.
Accordingly, there is no segment information to be disclosed and as such the disclosure is omitted.
【Related information】
Fiscal year ended March 31, 2017
1. Information by products and services
The Company and its consolidated subsidiaries consist of a single business, which aims to build information infrastructure
suitable for the aging society, and operations incidental thereto. Accordingly, there is no segment information to be disclosed andas such the disclosure is omitted.
2. Information by geographical areas(1) Net sales(Millions of yen)
Japan

Other
18,268

Total
4,786

23,054(Note) The amount of net sales is classified by country and region based on customers’ location.
(2) Property, plant and equipment(Millions of yen)
Japan

Other
216

Total
151

368

3. Information on major customers
Information on major customers is omitted since there is no single customer with 10% or more of the amount of net sales
presented in the consolidated statements of income.
Fiscal year ended March 31, 2018
1. Information by products and services
The Company and its consolidated subsidiaries consist of a single business, which aims to build information infrastructure
suitable for the aging society, and operations incidental thereto. Accordingly, there is no segment information to be disclosed andas such the disclosure is omitted.

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27

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2. Information by geographical areas(1) Net sales(Millions of yen)
Japan

Other
21,502

Total
5,109

26,611(Note) The amount of net sales is classified by country and region based on customers’ location.
(2) Property, plant and equipment(Millions of yen)
Japan

Other
228

Total
176

405

3. Information on major customers
Information on major customers is omitted since there is no single customer with 10% or more of the amount of net sales
presented in the consolidated statements of income.
【Information on impairment loss of non-current assets by reportable segment】
The disclosure is omitted since there is only one segment in the Group.
【Information on amortization of goodwill and balance of unamortized goodwill by reportable segment】
The disclosure is omitted since there is only one segment in the Group.
【Information on negative goodwill incurred by reportable segment】
None to report.
【Related party transactions】
1. Related party transactions
Transactions between the Company and related parties
Fiscal year ended March 31, 2017
None to report.
Fiscal year ended March 31, 2018
None to report.
2. Notes on parent company or major affiliates
Summary of financial information of major affiliates
As of and for the fiscal year ended March 31, 2018, M3 Career, Inc. was a major affiliate of the Company and its condensed
financial information is as follows:(Millions of yen)
M3 Career, Inc.
2017

2018

Total current assets

3,315

4,140

Total non-current assets

1,263

1,197

Total current liabilities
Total non-current liabilities

1,378
－

1,848
95

Total net assets

3,199

3,393

Net sales
Profit before income taxes

8,495
2,556

10,8792,843

Profit

1,723

2,010

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28

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(Amounts per share)

Fiscal year ended
March 31, 2017
Net assets per share (Yen)Profit per share (Yen)
Diluted profit per share (Yen)

Fiscal year ended
March 31, 2018394.7667.49

443.44
77.43

67.28

77.14

(Note) The basis for calculating profit per share and diluted profit per share is as follows:
Fiscal year ended
March 31, 2017
Profit per share:
Profit attributable to owners of parent(Millions of yen)

Fiscal year ended
March 31, 2018

2,801

3,361

－

－

Profit attributable to common stock owners ofparent (Millions of yen)

2,801

3,361

Weighted average number of shares (Shares)

41,504,114

43,407,666－－

Increase in number of common stock (Shares)

131,866

167,568(Of which, exercise of subscription rights to shares[Shares])(131,866)(167,568)

Amount not attributable to common stock
shareholders (Millions of yen)

Diluted profit per share:
Adjustment to profit attributable to owners ofparent (Millions of yen)

Details of potential shares excluded from calculationof diluted profit per share due to no dilutive effectNo.11 Subscription rights to sharesbased on the resolution of theBoard of Directors’ meeting heldon July 20, 2016:
Common stock 18,000 shares

No.12 Subscription rights to sharesbased on the resolution of theBoard of Directors’ meeting heldon July 20, 2016:
Common stock 183,600 shares

No.12 Subscription rights to sharesbased on the resolution of theBoard of Directors’ meeting heldon July 20, 2016:
Common stock 205,298 shares

No.13 Subscription rights to sharesbased on the resolution of theBoard of Directors’ meeting heldon May 29, 2017:
Common stock 158,000 shares

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29

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(Significant subsequent events)
At the Board of Directors’ meeting held on May 23, 2018, the Company resolved to implement a stock split and make a partial
amendment to the Articles of Incorporation associated with the stock split.
1. Purpose
The purpose of the stock split is to expand the Company’s shareholder base by lowering the monetary amount of its share tradingunit.
2. Outline(1) Method of the stock split
The Company will implement a 2-for-1 stock split based on the number of holding shares of shareholders stated or recordedon the shareholders register as of June 30, 2018 (Saturday) (effectively, June 29, 2018 (Friday), since June 30 is a holiday for
the Company’s administrator of shareholders register).
(2) Number of shares to be increased by the stock split
Number of shares issued and outstanding before the stock split

43,421,000 shares

Number of shares to be increased by the stock split

43,421,000 shares

Number of shares issued and outstanding after the stock split

86,842,000 shares

Number of authorized shares after the stock split

288,000,000 shares(Note) “Number of shares issued and outstanding” and “Number of shares to be increased” above are based on number ofshares issued and outstanding as of May 23, 2018, and are subject to change due to the exercise of subscription rights
to shares.
(3) Schedule of the stock split
Date of public notice

June 13, 2018 (Wednesday)

Base dateJune 30, 2018 (Saturday) (effectively, June 29, 2018 (Friday))

Effective dateJuly 1, 2018 (Sunday)(4) Adjustments for exercise price of subscription rights to shares
As a result of the stock split, the exercise price per share subject to subscription rights to shares is also adjusted on and after
July 1, 2018 (Sunday), as follows:(Yen)
Subscription rights to shares

Exercise price before the stock split

Exercise price after the stock split

No.7 Stock Option

213

107

No.8 Stock Option

468

234

No.9 Stock Option

743

372

No.10 Stock Option

1,471

736

No.11 Stock Option

2,409

1,205

No.12 Stock Option

2,380

1,190

No.13 Stock Option

3,055

1,528

(5) Effect on amounts per share
Amounts per share for the fiscal years ended March 31, 2017 and 2018 based on the assumption that the stock split was
executed on April 1, 2016 are as follows:(Yen)
Fiscal year ended
March 31, 2017

Fiscal year ended
March 31, 2018

Profit per share

33.74

38.72

Diluted profit per share

33.64

38.57

3. Partial Amendment to Articles of Incorporation(1) Reason for amendment
In order to increase the number of authorized shares after the stock split, the Company resolved at the Board of Directors’
meeting to amend Article 5 of the Articles of Incorporation effective July 1, 2018 (Sunday), in accordance with the stipulation
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30

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in Article 184, paragraph 2 of the Companies Act.
(2) Details of amendment
The amendment is as follows (The amendment is underlined):
Current Articles of Incorporation

Proposed Amendment(Total number of authorized shares)
Article 5 The total number of authorized shares tobe issued by the Company shall be
144,000,000.

(Total number of authorized shares)
Article 5 The total number of authorized shares tobe issued by the Company shall be
288,000,000.

(3) Schedule of amendment
Effective dateJuly 1, 2018 (Sunday)

4. Other information
There is no increase in capital as a result of the stock split.

【Consolidated statements schedules】【Details of bonds】
None to report.
【Details of loans payable】

Classification

Balanceat beginning of year
(Millions of yen)

Balanceat end of year
(Millions of yen)

Average interest rate(%)

Repayment date

Short-term loans payable

－

8

0.00

－

Current portion of
long-term loans payable

1,201

1,395

0.55

－

Long-term loans payable(excluding current portion)

10,210

9,690

0.41

From 2019 to 2026

Total

11,411

11,094(Notes)－－1. The average interest rate represents the weighted-average rate applicable to the balance at end of year.
2. The five-year repayment schedule of long-term loans payable (excluding current portion) subsequent to the fiscal year
end is as follows:(Millions of yen)
Due after one year
through two years

Long-term loans payable

Due after two years
through three years

1,395

1,395

Due after three years
through four years

Due after four years
through five years

1,395

1,298

【Details of asset retirement obligations】
For asset retirement obligations, instead of recording liabilities for asset retirement obligations, the Group reasonably estimates
the amounts which would not be recoverable at the end of the lease periods and recognizes expenses for the year by amortizing
the amounts of deposits over the expected periods of use.
Thus, there is nothing to report.

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31

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【Other】
Quarterly information for the fiscal year ended March 31, 2018
Year-to-date data

First quarter

Second quarter

Fiscal year ended
March 31, 2018

Third quarter

Net sales (Millions of yen)

7,073

13,162

19,22826,611

Profit before income taxes(Millions of yen)

1,987

2,662

2,976

4,914

Profit attributable to owners ofparent (Millions of yen)

1,444

1,859

2,040

3,361

Profit per share (Yen)

33.30

42.85

47.02

77.43

Quarterly data
Profit per share (Yen)First quarter

Second quarter

33.30

9.54

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32

－

Third quarter

Fourth quarter
4.17

30.41