Consolidated Financial Results for the Fiscal Year Ended March 31, 2021 [Japan GAAP]
Name of listed company: Digital Arts Inc.
Securities code:

2326

Representative:(Title)Contact:(Title)May 7, 2021
Tokyo Stock Exchange
1st Section

Listed on:

URL https://www.daj.jp
Representative Director,(Name) Toshio Dogu
President and CEO
General Manager of the
Administration(Name) Isao Konishi
TEL: 03-5220-6045
Department

Scheduled date to hold theordinary general meeting of June 22, 2021
shareholders:
Scheduled date for filing
June 23, 2021
annual financial report:
Supplementary materials prepared: Yes
Results information meeting held:

Scheduled date to start
dividends distribution:

June 23, 2021

Yes (for institutional investors and financial analysts)(Figures shown are rounded down to the nearest million yen.)

1. Consolidated financial results for the year ended March 31, 2021 (April 1, 2020 – March 31, 2021)(1) Consolidated operating results(Percentage figures represent changes from previous year.)Net sales

Operating profit

Ordinary profit％％
Million yen
Million yen
Million yen
Year ended March
6,825
21.0
2,977
27.9
2,991
31, 2021
Year ended March
5,641
(3.4)
2,328
(11.5)
2,326
31, 2020(Note) Comprehensive Year ended
2,063 million (29.9％) Year ended
income:March 31, 2021
yen
March 31, 2020

Profit per share(basic)Profit per share(diluted)

Yen

Return on equity

％

28.6

2,059

29.5

(11.6)

1,590(18.9)

1,587

million(-19.7％)
yenOrdinary profit to Operating profit to
net sales
total assets％

Yen

Profit attributable toowners of parent％
Million yen％

Year ended March
146.90143.4522.0
23.3
31, 2021
Year ended March
113.69110.8319.4
22.5
31, 2020
Reference: Equity-method
Year ended March 31, － millionyen Year ended March 31,
investment profit (loss): 2021
2020:

％

43.6
41.3
－ millionyen(2) Consolidated financial position
Total assets

Net assets

Equity ratio

Million yen
Million yen
As of March 31,
14,856
10,0622021
As of March 31,
10,8528,680
2020
Reference: Equity capital As of March 31, 2021: 10,041 million yen

Net assets per share
％

Yen

67.6

715.7979.7

617.27

As of March 31, 2020: 8,652 million yen(3) Consolidated cash flows

Million yen

Million yen

Million yen

Cash and cash
equivalents at end of
periodMillion yen

5,221

(830)

(671)

11,382

2,686

111

(709)

7,651

Cash flows fromoperating activities
Year ended March
31, 2021
Year ended March
31, 2020

Cash flows frominvesting activities―1―

Cash flows fromfinancing activities

2. Dividends
Annual dividends
1Q-end2Q-endYear-end

3Q-endAnnual

Total
Dividends to
Payout ratio
dividends
net assets(consolidate
paid(consolidated)(annual)
d)

Yen

Yen

Yen

Yen

Yen

million yen

％

％

－

25.00

－

25.00

50.00

701

44.0

8.5

－

25.00

－

30.00

55.00

771

37.4

8.3

－

30.00

－

35.00

65.00

Year ended
March 31,2020
Year ended
March 31,2021
Year ending March
31, 2022 (forecast)

35.8

3. Forecast of consolidated financial results for the year ending March 31, 2022 (April 1, 2021 – March 31,
2022)(Percentage figures represent changes from previous year for full year figures and from same period of previous year
for interim period figures.)
Profit attributable
Net sales
Operating profit
Ordinary profit
Profit per shareto owners of parent
First six months
Full year

million yen％

million yen％

million yen％

million yen

％

Yen

3,900
8,700

25.7
27.5

1,470
3,700

12.2
24.3

1,470
3,700

11.7
23.7

1,020
2,550

12.2
23.8

72.71
181.77―2―

* Notes(1) Changes in subsidiaries during the fiscal year (Changes in specified
subsidiaries resulting in changes in scope of consolidation)
New -(Company name) , Excluding

-

:

None

(Company name)(2) Changes in accounting policies, changes of accounting estimates and restatement
1) Changes in accounting policies due to revisions of accounting standards, etc.:

:

None

2) Changes in accounting policies due to reasons other than those stated in 1):

:

None

3) Changes in accounting estimates:

:

None

4) Restatement:

:

None

(3) Number of shares outstanding (common stock)1) Number of shares issued and outstanding As of March 31,
2021(including treasury shares)
As of March 31,

2) Number of treasury shares

2021

3) Average number of shares issued andoutstanding in each period

Year ended March
31, 2021

14,133,000 As of March 31, 2020

14,133,000

104,462 As of March 31, 2020

116,042

14,022,503

Year ended March
31, 2020

13,991,859(Reference) Overview of the non-consolidated business results
1. Non-consolidated financial results for the year ended March 31, 2021 (April 1, 2020 – March 31, 2021)(Percentage figures represent changes from previous year.)(1) Non-consolidated operating results
Net salesYear ended March 31, 2021
Year ended March 31, 2020

Operating profit％

Million yen
6,074
5,336

13.8
(7.2)

Profit per share
Year ended March 31, 2021
Year ended March 31, 2020

Ordinary profit％

Million yen
2,947
2,357

25.0
(15.0)

Million yen
2,964
2,359

Profit％ Million yen

25.6(15.1)

％

2,044
1,613

26.7
(9.6)

Diluted profit per share

Yen

Yen

145.81115.29142.38112.39(2) Non-consolidated financial position
Total assets
As of March 31,
2021
As of March 31,
2020
Reference: Equity capital

Net assets

Equity ratio

Net assets per share

Million yen

Million yen％

Yen

14,751

10,07868.3

717.78

10,839

8,714

80.2

620.45

As of March 31, 2021: 10,069 million yen

As of March 31, 2020: 8,696 million yen

2. Forecast of non-consolidated financial results for the year ending March 31, 2022 (April 1, 2021 – March
31, 2022)(Percentage figures represent changes from previous year for full year figures and from same period of previous year
for interim period figures.)
Net salesFirst six months
Full year

Million yen
3,350
7,450

Ordinary profit
％

19.8
22.6

Million yen
1,470
3,600

Profit
％

10.3
21.5

Million yen
1,020
2,450

Profit per share
％

Yen

10.3
19.8

72.71
174.64* Summaries of financial results are not subject to audit.
* Explanation concerning the appropriate use of financial result forecasts and other special notes(Forward looking statements)
Business forecasts and other forward-looking statements in this material contain predictions based on futureassumptions, outlooks and plans as of the date of publication of this material. The Company does not warrant theaccomplishment of the forecasts. Actual results may different significantly from the forecasts due to risks and uncertain
factors associated with the world economy, the state of competition, and fluctuations in foreign exchange rates and―3―interest rates.
For matters relevant to business forecasts, refer to (4) Outlook in 1. Overview of Business Results, Etc. on page 5 of
the Attached Document.
(Obtaining the Supplementary Material for the Financial Results)
The material is available at Digital Arts Inc. corporate website.

―4―

○Table of Contents for the Attached Document
1. Overview of Business Results, Etc2
(1) Overview of business results in the fiscal year under review………………………………………………2(2) Overview of financial position for the fiscal year under review… ………………………………………………4(3) Overview of cash flows in the fiscal year under review ………… ……………………………………………4(4) Outlook……………… ………………………………………………………………………………………………5
2. Basic Approach to Selection of Accounting Standards ……………………………………………………………6
3. Consolidated Financial Statements and PrimaryNotes ……………………………………………………………7(1) Consolidated balance sheet ………………………………………………………………………………………7(2) Consolidated statement of income and consolidated statement of comprehensive income ………………9
Consolidated statement of income ……………………………………………………………………………9
Consolidated statement of comprehensive income ………………………………………………………10(3) Consolidated statement of changes in equity …………………………………………………………………11(4) Consolidated statement of cash flows …………………………………………………………………………12(5) Notes to consolidated financial statements ……………………………………………………………………13(Notes on the premise of a goingconcern) ………………………………………………………………………13(Significant matters that serve as the basis for the preparation of consolidated financial tatements) ……13
(Changes in presentation methods) ………………………………………………………………………………14(Consolidated balance sheet) ……………………………………………………………………………………15(Consolidated statement of income)……………………………………………………………………………15(Consolidated statements of comprehensive income) …………………………………………………………15(Consolidated statement of changes in equity) …………………………………………………………………16(Consolidated statement of cash flows) …………………………………………………………………………17(Financial instruments) ……………………………………………………………………………………………18(Securities) …………………………………………………………………………………………………………21(Retirement benefits) ………………………………………………………………………………………………21(Stock options)……………………………………………………………………………………………………22(Asset retirement obligations) ……………………………………………………………………………………25(Segment information, etc.) ………………………………………………………………………………………25(Related party information)………………………………………………………………………………………27(Per share information) ……………………………………………………………………………………………27(Significant subsequent vents) ……………………………………………………………………………………27―5―

1. Overview of Business Results, Etc.
(1) Overview of business results in the fiscal year under review
During the consolidated fiscal year under review (April 1, 2020 through March 31, 2021), the circumstances
encountered by the Japanese economy were adverse. Economic activity stagnated and contracted due to the COVID19 pandemic, and as a result consumer spending and corporate earnings continued to decline sharply. Since then, theeconomy has begun to rally, reflecting the increase in social and economic activities and the government economic
package. However, the outlook is very uncertain as a state of emergency was declared for the second time following aresurgence of the pandemic.
In the security industry, in which the Digital Arts Group (the “Group”) operates, demand for security products expanded
following a series of damaging incidents caused by diversifying cyberattacks, including ransomware and Emotet. Apartfrom demand from large-sized organizations, new demand for security measures is growing from medium and smallsized enterprises, which were comparatively lagging in these measures.
In the public sector market, the GIGA School Concept envisions the integrated development of an environment with
one learning terminal for each school-aged child and with a high-speed, high-capacity communication network. Progress
was made in the provision of a terminal to every school-aged child.
Amid these circumstances, for the enterprise sector market, the Group implemented activities for increasing
recognition and sales promotion of DigitalArts@Cloud in view of the rapid introduction of cloud technologies to online
services and e-mail environments amid the spread of teleworking. The Group worked towards allowing more users tosolely view secure websites and receive secure e-mail messages in the cloud environment. The Group also developed
the Desk@Cloud communication tool equipped not only with online conferencing and chat features but also with security
functions. Thus, it began to offer solutions that achieve not only security but also improved work efficiency. In the public
sector market, the Company provided a special version of i-FILTER that caters to needs arising from the GIGA School
Concept. At the same time, it ran campaigns, including the provision of free services that conform to the Guidelines on
Education Information Security Policy, in its efforts to expand sales from schools.
Demand in the enterprise and public sector markets has rapidly soared for cloud service products, following the
spread of COVID-19. A large part of the amount of the contract for traditional mainstay license sales products is recorded
as sales in a lump at the time of shipment. For cloud service products, recorded sales are apportioned on a monthly
basis throughout the service provision period. Therefore, the proportion of contracts for cloud service products to thetotal contract amounts grew rapidly in the fiscal year under review, which led to a rise in sales to be deferred to the next
fiscal year and onwards. This resulted in the generation of a wider gap between contract amounts and sales.
As a result of the above, consolidated net sales for the fiscal year under review stood at 6,825 million yen, up 21.0%
year on year, operating profit increased 27.9% year on year, to 2,977 million yen, ordinary profit grew 28.6% year on
year, to 2,991 million yen, and profit attributable to owners of parent increased 29.5% year on year, to 2,059 million yen.
Overview of Consolidated Business Results(Million yen)
Year ended
March 31, 2020

Year ended
March 31, 2021

Net sales

5,641

6,825

＋1,183＋21.0

Operating profit

2,328

2,977

＋649

＋27.9

Ordinary profit

2,326

2,991

＋664

＋28.6

Profit attributable toowners of parent

1,590

2,059

＋469

＋29.5

―6―

Change% Change(Million yen)

FY Mar 2017

(Million yen)

FY Mar 2017

Net sales

FY Mar 2018 FY Mar 2019 FY Mar 2020

FY Mar 2021

Ordinary profit

FY Mar 2018

FY Mar 2019 FY Mar 2020

Operating profit(Million yen)

FY Mar 2017

(Million yen)

Profit attributable to owners of parent

FY Mar 2017

FY Mar 2021

FY Mar 2018 FY Mar 2019 FY Mar 2020 FY Mar 2021

FY Mar 2018 FY Mar 2019 FY Mar 2020

FY Mar 2021

The following describes business performance in separate markets.
Enterprise Sector Market
In the enterprise sector market, i-FILTER and m-FILTER cloud services have increasingly been used to reduce costs
and operations management burdens in response to the spread of COVID-19. In addition, Digital Arts Consulting Inc.,a subsidiary offering security consulting services, enjoyed mounting demand and achieved an increase in sales.
Net sales in this market reached 3,984 million yen, up 21.3% year on year.
Public Sector Market
In the public sector market, the Group has traditionally enjoyed excellent recognition and a large market share as aprovider of Japan-made security solutions. Under the GIGA School Concept, its track record and reliability have earned
high marks, having resulted in significant growth in orders for the i-FILTER series.
As a consequence, net sales in this market stood at 2,408 million yen, up 26.0% year on year.

―7―Enterprise Sector Market(Million yen)

FY Mar 2017

(Million yen)

FY Mar 2018 FY Mar 2019 FY Mar 2020

FY Mar 2021

FY Mar 2017

Public Sector

FY Mar 2018 FY Mar 2019 FY Mar 2020

FY Mar 2021

Consumer Sector Market
In the consumer sector market, the Group focused on collaborating with mobile network carriers and MVNOs and onsales of i-FILTER for Multiple Devices, which can be used on multiple operating systems using a single serial ID. As aresult, it attained an increase of users. Meanwhile, net sales tumbled due to revisions to the prices for sales to mobile
network carriers.
Net sales in this market amounted to 432 million yen, down 3.0% year on year.

(2) Overview of financial position for the fiscal year under review(Assets)
Total assets in the consolidated fiscal year under review increased 4,003 million yen from the end of the previous
consolidated fiscal year, to 14,856 million yen. This was due mainly to an increase of 3,730 million yen in cash anddeposits.
(Liabilities)
Total liabilities in the consolidated fiscal year under review rose 2,621 million yen from the end of the previous
consolidated fiscal year, to 4,793 million yen. This was due mainly to an increase of 2,140 million yen in advances
received, attributable to an increase in the amount of contracts for which orders were received.
(Net assets)
Net assets in the consolidated fiscal year under review climbed 1,382 million yen from the end of the previous
consolidated fiscal year, to 10,062 million yen. This was chiefly due to the posting of a profit attributable to owners ofparent.

―8―

(3) Overview of cash flows in the fiscal year under review
In the consolidated fiscal year under review, cash and cash equivalents increased 3,730 million yen from the end of
the previous consolidated fiscal year to 11,382 million yen. Cash flows in each category are as follows:(Cash flows from operating activities)
Net cash provided by operating activities stood at 5,221 million yen (net cash provided of 2,686 million yen in theprevious consolidated fiscal year), chiefly reflecting a profit before income taxes of 3,001 million yen and depreciationof 859 million yen.
(Cash flows from investing activities)
Net cash used in investing activities came to 830 million yen (net cash provided of 111 million yen as of the end of
the previous consolidated fiscal year) mainly due to the purchase of intangible assets.
(Cash flows from financing activities)
Net cash used in financing activities was 671 million yen (net cash used of 709 million yen as of the end of theprevious consolidated fiscal year), primarily due to dividends paid, although there were proceeds from disposal oftreasury shares.
The table below shows trends of cash flow indicators.
As of March 31, As of March 31, As of March 31, As of March 31,
2018
2019
2020
2021
Equity ratio (%)

78.2

78.7

79.7

67.6

Equity ratio based on market value (%)

719.8

1,276.0

603.2

915.0

1. The methods to calculate the indicators are as follows:a) Equity ratio: Equity capital / Total assetsb) Equity ratio based on market value: Market capitalization / Total assets(Market capitalization is calculated by multiplying the closing stock price at the end of the fiscal year by the
number of issued shares (excluding treasury shares).)
2. Each indicator is calculated based on consolidated financial numbers.

(4) Outlook
The outlook for the next fiscal year (April 1, 2021 to March 31, 2022) is as follows:
In the security industry, in which the Digital Arts Group (the “Group”) operates, demand for security products expanded
following a series of damaging incidents caused by diversifying cyberattacks, including ransomware and Emotet. Apartfrom demand from large-sized organizations, new demand for security measures is growing from medium and smallsized enterprises, which were comparatively lagging in these measures. In addition, IoT, AI and other technologies wereincreasingly used and the practice of working from home spread quickly to stop the proliferation of the COVID-19
coronavirus, security personnel must now manage increasingly diversifying and advancing risks, and the demand for
security measures is expected to continuously grow.
Expected to continue accelerating are the outsourcing of security operations and the utilization of cloud services toreduce the burden of security operations. In addition, teleworking is spreading as the impact of the COVID-19 pandemic
protracts. Demand is expected to rise not only for security products but also for cloud services that ensure efficientbusiness operations in work-from-home conditions.
Against this backdrop, in the enterprise sector market, the Group will continue to enhance i-FILTER and m-FILTER
products, add functions to them, and accelerate the development of new products that enable an even wider range of
security measures. In addition to security products, the Group will also consider the provision of products and services
for improving operational efficiency.

―9―In the public sector market, the Group will promote sales to schools that have yet to introduce security measures under
the GIGA School Concept. The Group will also improve its products for local governments that are compatible with themodel for enhancing the resilience of local governments' information systems, in an effort to increase its share of security
solutions for local governments.
Meanwhile, in response to the rapid spread of teleworking, the Group will enhance the functions of Desk@Cloud, acommunication tool that enables improvements in work efficiency with online conferencing systems, with the aim ofcreating a new market.
As the Group pursues those initiatives, it expects to post net sales of 8,700 million yen, an ordinary profit of 3,700
million yen, and a profit attributable to owners of parent of 2,550 million yen in the next consolidated fiscal year.
The Company has determined the results forecasts based on information available on the day of publication of thesefinancial results for the fiscal year ended March 31, 2021. Actual results may be different from the forecasts due to avariety of factors. If there are any significant changes, the Company will disclose them appropriately.

―10―Results forecasts for the next fiscal year (consolidated)
Net sales

Profit attributable to ownersof parent

Ordinary profit

Million yen

Million yen

Million yen

8,700

3,700

2,550

6,825

2,991

2,059

Year ending March 31, 2022
(forecast)Year ended March 31, 2021
(results)

Results forecasts for the next fiscal year (non-consolidated)
Net salesYear ending March 31, 2022
(forecast)Year ended March 31, 2021
(results)

Ordinary profit

ProfitMillion yen

Million yen

Million yen

7,450

3,600

2,450

6,074

2,964

2,044

(Figures shown are rounded down to the nearest million yen.)
Note: The forecasts above are based on information available on the day of publication of these financial results for the
fiscal year ended March 31, 2021. Actual results may be different from the forecasts due to a variety of factors.

2. Basic Approach to Selection of Accounting Standards
The Group will prepare consolidated financial statements based on the Japan GAAP for some time to come, considering
a comparison with consolidated financial statements for the previous fiscal year and with financial statements of othercompanies.
The Group will make an appropriate decision about the application of the International Financial Reporting Standards(IFRS), considering circumstances in Japan and overseas.

―11―

3. Consolidated Financial Statements and Primary Notes(1) Consolidated balance sheet(Million yen)
Fiscal 2020
(As of March 31, 2020)
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - tradeFinished goods
Supplies
Other

Fiscal 2021
(As of March 31, 2021)

7,651
994
0
0
85

11,382
1,268
0
3
70

8,733

12,725

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

215
(115)

220
(127)

Buildings, net

100

92

17
(12)

18
(4)

Total current assets

VehiclesAccumulated depreciation
Vehicles, net

4

14

443
(325)

469
(369)

117

99

Land

26

26

Construction in progress

0

0

249

233

1,331
79

1,274
128

Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net

Total property, plant and equipment
Intangible assets
Software
Other

1,410

1,403

Investments and other assets
Investment securities
Deferred tax assets
Shares of subsidiaries and associates
Other

Total intangible assets

102
85
1
269

102
123

Total investments and other assets

458

493

Total non-current assets
Total assets

―12―

－
268

2,118

2,130

10,852

14,856

(Million yen)
Fiscal 2020
(As of March 31, 2020)

Fiscal 2021
(As of March 31, 2021)

Liabilities
Current liabilities
Accounts payable - trade
Income taxes payable
Provision for bonuses
Advances received
Other

32
469
119
1,229
274

32
688
194
3,370
456

Total current liabilities

2,125

4,743

Non-current liabilities
Asset retirement obligations
Other

45
0

48
1

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

―13―

46

50

2,172

4,793

713
972
7,340
(380)

713
963
8,699
(342)

8,646

10,034

6

7

6

7

18
9

8
12

8,680

10,062

10,852

14,856

(2) Consolidated statement of income and consolidated statement of comprehensive income
Consolidated statement of income

Net sales
Cost of sales

Fiscal 2020
(from April 1, 2019
to March 31, 2020)
5,641
1,361

(Million yen)
Fiscal 2021
(from April 1, 2020
to March 31, 2021)
6,825
1,946

Gross profit

4,280

4,878

Selling, general and administrative expenses

1,952

1,900

Operating profit

2,328

2,977

0

0
7

Non-operating income
Interest income
Foreign exchange gains
Commission income
Gain on forfeiture of unclaimed dividends
Subsidy income
Miscellaneous income
Total non-operating income
Non-operating expenses
Foreign exchange losses
Miscellaneous loss
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on reversal of share acquisition rights
Gain on sales of non-current assets
Total extraordinary income
Extraordinary losses
Loss on retirement of non-current assets
Loss on valuation of golf club membership
Loss on liquidation of subsidiaries

－
0
0
0
1

－
1
3
1

4

14

4
0

－
0

5

0

2,326

2,991

0
－

9
3

0

12

0
1

0

－

－
2

1

2

Profit before income taxes

2,326

3,001

Income taxes – current
Income taxes – deferred

740
(4)

977
(37)

Total income taxes

735

939

1,590

2,062

(0)

2

1,590

2,059

Total extraordinary losses

ProfitProfit (loss) attributable to non-controlling interests
Profit attributable to owners of parent―14―

Consolidated statement of comprehensive income
Fiscal 2020
(from April 1, 2019
to March 31, 2020)
1,590(Million yen)
Fiscal 2021
(from April 1, 2020
to March 31, 2021)
2,062

(2)

1

(2)

1

Comprehensive income

1,587

2,063

Comprehensive income attributable toComprehensive income attributable to owners ofparentComprehensive income attributable to noncontrolling interests

1,588

2,061

(0)

2

ProfitOther comprehensive income
Foreign currency translation adjustment
Total other comprehensive income―15―(3) Consolidated statement of changes in equity
Fiscal 2020 (from April 1, 2019 to March 31, 2020)(Million yen)SharecapitalBalance at beginning of
period713

Accumulated other
Shareholders' equity
comprehensive
incomeShare
NonTotal
Total net
Foreign accumulat acquisition controlling
assetsTotal
rightsinterests
Capital Retained Treasury
currency ed othershareholde
surplusearnings
sharestranslation comprehers' equity
adjustment nsive
income
827

6,518

(306)

7,752

8

8

23

18

7,802

Changes during period
Dividends of surplus
Change in ownershipinterest of parent due
to transactions with
non-controllinginterests
Profit attributable toowners of parent
Disposal of treasury
sharesPurchase of treasury
sharesNet changes in items
other
than
shareholders' equity
Total changes during
periodBalance at end of period

(768)

(768)

(768)

(0)

(0)

1,590

1,590

226

370

370

(299)

(299)

(299)

(0)

1,590
144

(2)

(2)

(5)

(8)

(16)

－

144

822

(73)

893

(2)

(2)

(5)

(8)

877

713

972

7,340

(380)

8,646

6

6

18

9

8,680

Fiscal 2021 (from April 1, 2020 to March 31, 2021)(Million yen)SharecapitalBalance at beginning of
period713

Accumulated other
Shareholders' equity
comprehensive
incomeShare
NonTotal
Total net
Foreign accumulat acquisition controlling
assetsTotal
rightsinterests
Capital Retained Treasury
currency ed othershareholde
surplusearnings
sharestranslation comprehers' equity
adjustment nsive
income
972

7,340

(380)

8,646

6

6

18

9

8,680

Changes during period
Dividends of surplus
Change in ownershipinterest of parent due
to transactions with
non-controllinginterests
Profit attributable toowners of parent
Disposal of treasury
sharesPurchase of treasury
sharesNet changes in items
other
than
shareholders' equity
Total changes during
periodBalance at end of period

(700)

(700)

(700)

－

－

2,059

2,059

37

29

29

(0)

(0)

(0)

2,059
(8)

1

1

(9)

2

(5)

－

(8)

1,358

37

1,387

1

1

(9)

2

1,382

713

963

8,699

(342)

10,034

7

7

8

12

10,062―16―

(4) Consolidated statement of cash flows(Million yen)
Fiscal 2021
(from April 1, 2020
to March 31, 2021)

Fiscal 2020
(from April 1, 2019
to March 31, 2020)
Cash flows from operating activities
Profit before income taxes
Depreciation
Loss on valuation of golf club membership
Increase (decrease) in provision for bonuses
Interest income
Foreign exchange losses (gains)
Gain on reversal of share acquisition rights
Loss on retirement of non-current assets
Loss (gain) on sales of non-current assets
Loss (gain) on liquidation of subsidiaries
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Increase (decrease) in trade payables
Increase (decrease) in accounts payable - other
Decrease (increase) in other current assets
Increase (decrease) in other current liabilities
Other

2,326
805
1
(8)
(0)
3
(0)
0

3,001
859

－
－
181
(1)
9
(7)
5
(31)
11

－
74
(0)
(9)
(9)
0
(3)
2
1,867
(2)
0
15
9
165
6

Subtotal

3,297

5,977

Interest and dividends received
Income taxes paid

1
(612)

0
(757)

Net cash provided by (used in) operating activities

2,686

5,221

600
(45)

－
(48)

－

6

(740)
300

(787)

Cash flows from investing activities
Decrease (increase) in time deposits
Purchase of property, plant and equipment
Proceeds from sale of property, plant andequipment
Purchase of intangible assets
Proceeds from redemption of securities
Liquidation of subsidiaries
Other

－
(3)

Net cash provided by (used in) investing activities
Cash flows from financing activities
Proceeds from disposal of treasury shares
Purchase of treasury shares
Purchase of shares from non-controllingshareholders
Dividends paid

－
(1)
－

111

(830)

366
(300)

28
(0)

(7)

－

(767)

(699)

(709)

(671)

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

(5)

10

2,082

3,730

Cash and cash equivalents at beginning of period

5,569

7,651

Cash and cash equivalents at end of period

7,651

11,382―17―

(5) Notes to consolidated financial statements(Notes on the premise of a going concern)
There are no applicable matters.
(Significant matters that serve as the basis for the preparation of consolidated financial statements)
1. Matters related to the scope of consolidation(1) Number of consolidated subsidiaries: 4Names of consolidated subsidiaries
Digital Arts Consulting Inc.
Digital Arts America, Inc.
Digital Arts Asia Pacific Pte. Ltd.
Digital Arts Europe Limited(2) Names, etc. of non-consolidated subsidiaries
There are no applicable matters.
Liquidation of Digital Arts Investment, Inc., which was a non-consolidated subsidiary in the previous consolidated
fiscal year, was completed in the consolidated fiscal year under review.
2. Matters related to the application of the equity method(1) Number of non-consolidated subsidiaries to which the equity method is applied: ―(2) Names, etc. of non-consolidated subsidiaries to which the equity method is not applied
There are no applicable matters.
Liquidation of Digital Arts Investment, Inc., which was a non-consolidated subsidiary to which the equity method
was not applied in the previous consolidated fiscal year, was completed in the consolidated fiscal year under review.
3. Fiscal years of consolidated subsidiaries
The fiscal year end of all consolidated subsidiaries is the same as the end of the consolidated fiscal year.
4. Matters related to accounting policies(1) Valuation standards and valuation methods for significant assets
A. Securities(a) Bonds held for maturity
The amortized cost method (interest method) is applied.
(b) Shares in subsidiaries
The moving average cost method is applied.
B. Inventories(a) Finished goods
The gross average cost method is applied. (The balance sheet amount is calculated by the book value writedown method based on reduction in profitability.)(2) Depreciation/amortization method for significant depreciable/amortizable assets
A. Property, plant and equipment
The declining balance method is applied.
The useful life and the residual value are calculated based on the same standards as those set out in the
Corporation Tax Act. The straight-line method is applied for facilities attached to buildings acquired on April 1, 2016or later.
B. Intangible assets―18―

The straight-line method is applied.
The straight-line method based on the availability period in the company (five years) is used for software in thecompany. For software for sale in the market, a method based on estimated sales quantities (or revenue) or theremaining lifetime (three years) is used.
C. Long-term prepaid expenses
The straight-line method is applied.
The amortization period is calculated based on the same standards as those set out in the Corporation Tax Act.
(3) Standards for recognition of significant allowances
A. Provision for bonuses
For the payment of employees’ bonuses, of the estimated payment amount, the amount to be paid in the
consolidated fiscal year under review is posted.
(4) Standards for translating significant assets or liabilities that are in foreign currency into yen
Monetary claims and obligations in foreign currency are translated into yen using the spot exchange rate on the
consolidated settling day, and translation adjustments are treated as a profit or loss. Assets and liabilities at overseas
subsidiaries, etc. are translated into yen using the spot exchange rate on the consolidated settling day. Revenue andexpense are translated into yen using the average rate during the period, and translation adjustments are included in
the foreign currency translation adjustment in net assets.
(5) Scope of funds in the consolidated statement of cash flows
Funds in the consolidated statement of cash flows (cash and cash equivalents) consist of cash on hand, deposits
that can be withdrawn as needed, and short-term investments that can be realized easily and only have insignificant
value fluctuation risk and whose redemption date arrives within three months of the acquisition date.
(6) Other significant matters that serve as a basis for the preparation of consolidated financial statements
A. Treatment of consumption tax
Consumption tax and local consumption tax are excluded from accounting. Non-recoverable consumption tax andlocal consumption tax are treated as expenses in the consolidated fiscal year under review.
(Changes in presentation methods)(Consolidated statement of income)Subsidy income, which was included in miscellaneous income under non-operating income in the previous
consolidated fiscal year, began to be presented independently in the consolidated fiscal year under review because it
became more important than before. Consolidated financial statements for the previous consolidated fiscal year werereclassified to reflect this change in presentation methods.
As a result, the 2 million yen, which was presented as miscellaneous income under non-operating income in the
consolidated statement of income for the previous consolidated fiscal year, has been reclassified into 0 million yen as
subsidy income and 1 million yen as miscellaneous income.
(A change in unit used for presentation)
In the consolidated fiscal year under review, amounts of money began to be presented in millions of yen instead of
the previous thousands of yen.

―19―

(Consolidated balance sheet)*1. The item related to non-consolidated subsidiaries is as follows.
Fiscal 2020
(As of March 31, 2020)
Shares of subsidiaries and associates

Fiscal 2021
(As of March 31, 2021)－million yen

1million yen(Consolidated statement of income)*1. The major items of selling, general and administrative expenses and the amounts are as follows.
Fiscal 2020
(from April 1, 2019
to March 31, 2020)

Fiscal 2021
(from April 1, 2020
to March 31, 2021)

Advertising expenses

207million yen

168million yen

Salaries and allowances

580

631

Provision for bonuses

64

110

*2. Total amount of research and development expenses included in general and administrative expenses are as follows.
Fiscal 2020
(from April 1, 2019
to March 31, 2020)
0million yen

Fiscal 2021
(from April 1, 2020
to March 31, 2021)
1million yen*3. The details of loss on retirement of non-current assets are as follows.
Fiscal 2020
(from April 1, 2019
to March 31, 2020)
Tools, furniture and fixtures

0million yen

Fiscal 2021
(from April 1, 2020
to March 31, 2021)
0million yen*4. Details of the loss on liquidation of subsidiaries are as follows.
Fiscal 2020 (from April 1, 2019 to March 31, 2020)
There are no applicable matters.
Fiscal 2021 (from April 1, 2020 to March 31, 2021)
The loss on liquidation of subsidiaries resulted from the completion of the liquidation of Digital Arts Investment, Inc.
(Consolidated statements of comprehensive income)*1. Reclassification adjustment and tax effect related to other comprehensive income
Fiscal 2020
(from April 1, 2019
to March 31, 2020)
Foreign currency translation
adjustment:
Amount that occurred in thefiscal year under review
Reclassification adjustment

Fiscal 2021
(from April 1, 2020
to March 31, 2021)(2)million yen

1million yen－－

Before tax effect adjustment(2)

1

Tax effectForeign currency translation
adjustment
Total other comprehensive income

-

-

(2)

1

(2)

1

―20―

(Consolidated statement of changes in equity)
Fiscal 2020 (from April 1, 2019 to March 31, 2020)
1. Class and number of issued shares and class and number of treasury shares
Number of shares Increase in number of Decrease in number of Number of shares at
at beginning ofshares during
shares during
end of consolidated
consolidated fiscal
fiscal year underconsolidated fiscal consolidated fiscal
year under review year under review
year under review
review
Issued shares
14,133,000－－

14,133,000

14,133,000－－

14,133,000

Common shares (Note)

232,320

49,422

165,700

116,042

Total

232,320

49,422

165,700

116,042

Common shares
Total
Treasury shares(Note) An increase in the number of common shares in treasury shares, 49,422 is due to the purchase of treasury
shares. A decrease in the number of treasury shares, 165,700 is due to the exercise of stock options.
2. Matters related to share acquisition rights and treasury share acquisition rights
Class of Class of shares underlying share acquisition rights
sharesAmount at
endof fiscal
underlying Beginning of Increase
Decrease
End of fiscal year undershare
fiscal year during fiscal during fiscal
year underacquisition
review
under
year under year underreviewrights(million yen)review
review
review

Classification

Breakdown of shareacquisition rights

Reportingcompany(parent
company)

Share acquisitionrights as stock options

―

―

―

―

―

18

Total

―

―

―

―

―

18

3. Matters related to dividends(1) Dividends paid

Resolution
Annualshareholders’meeting on June24, 2019
Board of Directors
meeting on
October 29, 2019

Total amount of
Dividend per share
Class of shares dividends (million
(yen)
yen)

Record date

Effective dateCommon shares

417

30

March 31, 2019

June 25, 2019

Common shares

351

25

September 30,
2019

December 3, 2019(2) Of dividends whose record date is in the consolidated fiscal year under review, those whose effective date in the next
consolidated fiscal year

Resolution

Class ofsharesTotal amountof dividends(million yen)

Financialsource ofdividends

Dividend pershare (yen)Annualshareholders’meeting on June
19, 2020

Commonshare

350

Retainedearnings

25―21―

Record date

Effective date

March 31, 2020

Monday, June 22,2020

Fiscal 2021 (from April 1, 2020 to March 31, 2021)
1. Class and number of issued shares and class and number of treasury shares
Number of shares Increase in number of Decrease in number of Number of shares at
at beginning ofshares during
shares during
end of consolidated
consolidated fiscal
fiscal year underconsolidated fiscal consolidated fiscal
year under review year under review
year under review
review
Issued shares
14,133,000－－

14,133,000

14,133,000－－

14,133,000

Common shares (Note)

116,04220

11,600104,462

Total

116,04220

11,600104,462

Common shares
Total
Treasury shares(Note) An increase in the number of common shares in treasury shares, 20, is due to the purchase of treasury shares. A
decrease in the number of treasury shares, 11,600, is due to the exercise of stock options.
2. Matters related to share acquisition rights and treasury share acquisition rights

Classification

Reportingcompany(parent
company)

Breakdown of shareacquisition rights

Class ofClass of shares underlying share acquisition rights
sharesAmount at
endof fiscal
underlying Beginning of Increase
Decrease
End of fiscal year undershare
fiscal year during fiscal during fiscal
year underacquisition
review
under
year under year underreviewrights(million yen)review
review
review

Share acquisitionrights as stock
options

―

―

―

―

―

8

Total

―

―

―

―

―

8

3. Matters related to dividends(1) Dividends paid

Resolution
Annualshareholders’meeting on June
19, 2020
Board of Directors
meeting on
October 29, 2020

Total amount ofdividends (million Dividend per share
Class of shares
yen)
(yen)

Record date

Effective dateCommon shares

350

25

March 31, 2020

Monday, June 22,
2020

Common shares

350

25

September 30,
2020

December 2, 2020

(2) Of dividends whose record date is in the consolidated fiscal year under review, those whose effective date in the next
consolidated fiscal year

Resolution

Class ofsharesTotal amountof dividends(million yen)

Financialsource ofdividends

Dividend pershare (yen)Annualshareholders’meeting on June22, 2021

Commonshares420

Retainedearnings

30(Consolidated statement of cash flows)―22―

Record date

Effective date

March 31, 2021

June 23, 2021

*1. Cash and cash equivalents at the end of the fiscal year and their relationships with items in the consolidated balance
sheetsFiscal 2020
(from April 1, 2019
to March 31, 2020)

Fiscal 2021
(from April 1, 2020
to March 31, 2021)

Cash and deposit account7,651million yen

11,382million yen

Cash and cash equivalents

7,651

11,382(Financial instruments)
1. Matters related to the status of financial instruments(1) Policy on financial instruments
The Group’s fund management is centered on short-term deposits. The Group also invests in government bonds,
which are very safe and highly rated corporate and other bonds.
(2) Description of financial instruments and their risks
Notes and accounts receivable-trade, operating receivables, are exposed to customers’ credit risk.
Securities and investment securities are public and corporate bonds and are exposed to risks of fluctuations in market
price.
(3) Risk management system related to financial instruments(i) Credit risk (risk related to business connections’ contract non-performance) management
The sales management section and administrative department of the Company regularly monitor the status ofoperating receivables at the main trading partners under the Company’s credit management regulations and control
the due dates and balances for individual partners. In this way, the Company strives to identify concerns overcollections caused by deterioration in partners’ financial situation early and mitigate them. The Company conducts
similar credit management at consolidated subsidiaries under its credit management regulations.
As for short-term fund management, the Company only uses bank deposits and investments in highly rated funds
to avoid as much credit risk as possible.
(ii) Market risk (interest-rate fluctuation risk, etc.) management
The Company determines its fund management portfolio while expecting its financing needs, and avoids market
risk as much as possible.
(iii) Management of liquidity risk in financing (risk of failure to pay on due dates)
The Company manages liquidity risk chiefly by having the administrative department create financial plans in atimely manner.
(4) Additional information on matters related to the market prices of financial instruments, etc.
The market prices of financial instruments are based on market prices and rationally calculated prices if no market
prices are available. The calculated prices include variable factors, which may change if different assumptions are used.

―23―

2. Matters related to the market prices of financial instruments, etc.
Consolidated balance sheet amounts, market prices and differences between them are as follows:
Fiscal 2020 (As of March 31, 2020)(1) Cash and deposits(2) Notes and accounts receivable trade(3) Securities and investment
securities
Bonds held to maturity
Total assets(1) Income taxes payable
Total liabilities

Consolidated balance
sheet amount (million
yen)Market price (million yen)

Difference (million yen)

7,651

7,651

－

994

994

－

102

101

(0)

8,748

8,748

(0)

469

469

－

469

469

－

Consolidated balance
sheet amount (million
yen)Market price (million yen)

Difference (million yen)

11,382

11,382

－

1,268

1,268

－

102

102

(0)

12,752

12,752

(0)

688

688

－

688

688

－

Fiscal 2021 (As of March 31, 2021)(1) Cash and deposits(2) Notes and accounts receivable trade(3) Securities and investment
securities
Bonds held to maturity
Total assets(1) Income taxes payable
Total liabilities―24―

(Note) 1. Matters related to calculation methods for the market prices of financial instruments
Assets(1) Cash and deposits, (2) Notes and accounts receivable - trade
They are settled in the short term, and their market prices are similar to their book values. Thus, the market
prices are deemed to be their book values.
(3) Securities and investment securities
The market prices of public and corporate bonds are presented by financial institutions, etc.
For information on securities according to holding purposes, refer to the note on securities.
Liabilities(1) Income taxes payable
They are settled in the short term, and their market prices are similar to their book values. Thus, the market
prices are deemed to be their book values.
2. Monetary claims and securities with maturity periods to be redeemed after the consolidated closing dateFiscal 2020 (As of March 31, 2020)
More thanMore than afive years, More than 10
Within a year year, within
within 10 years (million(million yen) five years
years (million
yen)(million yen)
yen)
7,651

－

－

－

994

－

－

－

(1) Government bonds, local government bonds

－

－

－

－

(2) Corporate bonds

－

－

100

－

8,646

－

100

－

Cash and deposits
Notes and accounts receivable - trade
Securities and investment securities
Bonds held to maturity

Total
Fiscal 2021 (As of March 31, 2021)

More thanMore than afive years, More than 10
Within a year year, within
within 10 years (million(million yen) five years
years (million
yen)(million yen)
yen)
Cash and deposits

11,382－－－

Notes and accounts receivable - trade

1,268

－

－

－

(1) Government bonds, local government bonds

－

－

－

－

(2) Corporate bonds

－

100

－

－

12,650100－－

Securities and investment securities
Bonds held to maturity

Total

―25―

(Securities)
Bonds held to maturity
Fiscal 2020 (As of March 31, 2020)

Classification

Market price exceeds
consolidated balance
sheet amountMarket price does notexceed consolidatedbalance sheet amount

Consolidated
Market price (million Difference (million
balance sheet
yen)
yen)
amount (million yen)

(1) Government bonds,
local government
bonds, etc.

－

－

－

(2) Corporate bonds

－

－

－

(3) Other－－－

Subtotal－－－(1) Government bonds,
local government
bonds, etc.

－

－

－

(2) Corporate bonds

102

101

(0)

(3) Other

－

－

－

102

101

(0)

102

101

(0)

Subtotal
Total

Fiscal 2021 (As of March 31, 2021)

Classification

Market price exceeds
consolidated balance
sheet amountMarket price does notexceed consolidatedbalance sheet amount

Consolidated
Market price (million Difference (million
balance sheet
yen)
yen)
amount (million yen)

(1) Government bonds,
local government
bonds, etc.

－

－

－

(2) Corporate bonds

－

－

－

(3) Other－－－

Subtotal－－－(1) Government bonds,
local government
bonds, etc.

－

－

－

(2) Corporate bonds

102

102

(0)

(3) Other

－

－

－

102

102

(0)

102

102

(0)

Subtotal
Total(Retirement benefits)
1. Outline of the retirement benefits system
The Company and its consolidated subsidiaries have a defined contribution pension plan.
2. Retirement benefit expenses
Fiscal 2020 (from April 1, 2019 to March 31, 2020)
The amount that was required for contribution to the defined contribution pension plan was 22 million yen.

―26―

Fiscal 2021 (from April 1, 2020 to March 31, 2021)
The amount that was required for contribution to the defined contribution pension plan was 27 million yen.
(Stock options)
1. Amount posted as profit due to the forfeiture of unexercised stock options
Fiscal 2020
(from April 1, 2019
to March 31, 2020)
Gain on reversal of share acquisition rights

Fiscal 2021
(from April 1, 2020
to March 31, 2021)
0

―27―

9

2. Description of stock options, their scale and changes(1) Description of stock options

Company
Category and number of persons subject
to grants
Stock options by class of shares
Grant date

Vesting conditions

Requisite service period

Exercise period

2015
Stock options

2016
Stock options

Reporting company

Same as on the left

Four directors
151 employees

Three directors
96 employees

Common shares 350,100 shares

Common stock 848,000 shares

November 27, 2015

December 13, 2016

Being a director or an employee ofthe reporting company and not
being subject to salary reduction or
stricter disciplinary action provided
for in the rules of employment of thereporting company from the grant
date (November 27, 2015) to thevesting date (July 1, 2017)
Share acquisition rights can be
exercised up to the percentage ofthe allocated share acquisitionrights specified in each item below
by each holder of share acquisitionrights only if operating profit
reaches the level specified in each
item below in the fiscal year ended
March 31, 2017, the fiscal year
ended March 31, 2018, or the fiscal
year ended March 31, 2019.
(i) If operating profit exceeds 1.5
billion yen, 20% of shareacquisition rights can be
exercised(ii) If operating profit exceeds 2.0
billion yen, 50% of shareacquisition rights can be
exercised(iii) If operating profit exceeds 2.5
billion yen, 100% of shareacquisition rights can be
exercised
In the items above, the operating
profit stated in the consolidated
statements of income in the
Company’s annual securities report(or the statements of income if noconsolidated statements of income
are prepared) shall be referenced.
If the concept of items to bereferenced changes significantly
due to the application of theInternational Financial ReportingStandards, etc. indicators to bereferenced shall be determined by
the Board of Directors.
No requisite service periods are
determined.

Being a director or an employee ofthe reporting company and not
being subject to salary reduction or
stricter disciplinary action provided
for in the rules of employment of thereporting company from the grant
date (December 13, 2016) to thevesting date (July 1, 2018)
Share acquisition rights can be
exercised up to the percentage ofthe allocated share acquisitionrights specified in each item below
by each holder of share acquisitionrights only if operating profit
reaches the level specified in each
item below in the fiscal year ended
March 31, 2018, the fiscal year
ended March 31, 2019, or the fiscal
year ended March 31, 2020.
(i) If operating profit exceeds 2.0
billion yen, 20% of shareacquisition rights can be
exercised(ii) If operating profit exceeds 2.5
billion yen, 50% of shareacquisition rights can be
exercised(iii) If operating profit exceeds 2.8
billion yen, 100% of shareacquisition rights can be
exercised
In the items above, the operating
profit stated in the consolidated
statements of income in the
Company’s annual securities report(or the statements of income if noconsolidated statements of income
are prepared) shall be referenced.
If the concept of items to bereferenced changes significantly
due to the application of theInternational Financial ReportingStandards, etc. indicators to bereferenced shall be determined by
the Board of Directors.
No requisite service periods are
determined.

From the vesting date to May 31,
2027.
The person must continue to be adirector or an employee of theCompany to exercise shareacquisition rights.

From the vesting date to May 31,
2028.
The person must continue to be adirector or an employee of theCompany to exercise shareacquisition rights.

―28―

2018
Stock options
Company
Category and number of persons subject
to grants
Stock options by class of shares
Grant date

Reporting company
Three directors
151 employees
Common shares 1,413,300 shares
March 5, 2018

Vesting conditions

Being a director or an employee ofthe reporting company and not
being subject to salary reduction or
stricter disciplinary action provided
for in the rules of employment of thereporting company from the grant
date (March 5, 2018) to the vestingdate (July 1, 2021)
Each holder of share acquisitionrights can exercise the shareacquisition rights allocated to them
only if operating profit exceeds 4.0
billion yen in the fiscal year ending
March 31, 2021.
In the items above, the operating
profit stated in the consolidated
statements of income in the
Company’s annual securities report(or the statements of income if noconsolidated statements of income
are prepared) shall be referenced.
If the concept of items to bereferenced changes significantly
due to the application of theInternational Financial ReportingStandards, etc. indicators to bereferenced shall be determined by
the Board of Directors.

Requisite service period

No requisite service periods are
determined.

Exercise period

From the vesting date to May 31,
2028.
The person must continue to be adirector or an employee of theCompany to exercise shareacquisition rights.

―29―

(2) Scale of stock options and related changes
The stock options below are those that existed in the fiscal year under review (fiscal year ended March 31, 2021).
The number of stock options has been converted to the number of shares.
(i) Number of stock options
2015
Stock options

2016
Stock options

2018
Stock options

As of March 31, 2020－

372,300

1,188,300

Granted－－－Forfeited－

372,300

57,400

Vested－－－Yet to be vested－－

1,130,900

160,000

316,900

－

－

－

－

Exercised

2,800

8,800

－

Forfeited

400

1,200

－

156,800

306,900－

2015
Stock options

2016
Stock options

2018
Stock options

2,034

2,639

3,400

8,819

8,500

－

2 yen

24 yen1 yen

Before vesting (shares)

After vesting (shares)
As of March 31, 2020
VestedYet to be exercised(ii) Unit price information

Exercise price (yen)Average stock price when
exercised (yen)Fair unit value (grantdate) (yen)

3. Method for estimating the number of stock options vested
It is basically difficult to reasonably estimate the number of stock options to be forfeited, and only the actual number ofstock options forfeited is reflected.

―30―(Additional information)
Transactions granting employees and others stock acquisition rights which involve considerations with vesting
conditions before the applied day of Practical Solution on Transactions Granting Employees and Others Stock Acquisition
Rights, which Involve Considerations, with Vesting Conditions (PITF No. 36; January 12, 2018) are still accounted forusing the previously adopted accounting treatment in accordance with Paragraph 10 (3) of PITF No. 36.
1. Overview of stock acquisition rights which involve considerations with vesting conditions
Notes are omitted because the same description is given in “2. Description of stock options, their scale and changes”
above.
2. Outline of accounting treatment adopted
When share acquisition rights are issued, the amount paid in on the issuance of share acquisition rights will be recorded
as share acquisition rights in net assets. When share acquisition rights are exercised, and new shares are issued, theamount paid in on the issuance of share acquisition rights and the amount paid in on the exercise of share acquisitionrights will be transferred to share capital and legal capital surplus, respectively.
When share acquisition rights have lapsed, the amount that corresponds to the lapse will be recorded as profit withinthat accounting period.
(Asset retirement obligations)
Asset retirement obligations posted in the consolidated balance sheets(1) Outline of the asset retirement obligations
Obligations of restoration related to lease agreements at the head office and other offices(2) Method for calculation of the asset retirement obligations
The period of use is estimated to be one to 15 years from the acquisition. The discount rate is 0.15% to 1.73%. The
amount of asset retirement obligations is calculated based on those assumptions.
(3) Increase/decrease in the asset retirement obligations
Fiscal 2020
(from April 1, 2019
to March 31, 2020)

Fiscal 2021
(from April 1, 2020
to March 31, 2021)

Balance at beginning of fiscal year
Increase due to purchase ofproperty, plant and equipment
Adjustment due to passage of time

45million yen

45million yen

－

2

0

0

Balance at end of fiscal year

45

48

(Segment information, etc.)
Segment information
Previous consolidated fiscal year (from April 1, 2019 to March 31, 2020) and consolidated fiscal year under review(from April 1, 2020 to March 31, 2021)
The Group has only one segment, which is the security business, and segment information is omitted.
Related information
Fiscal 2020 (from April 1, 2019 to March 31, 2020)
1. Information by product/service
The Group has only one product and service category, and information by product/service is omitted.

―31―

2. Information by region(1) Net sales
Sales to external customers in Japan are more than 90% of net sales in the consolidated statements of income, andinformation by region is omitted.
(2) Property, plant and equipment
The amount of property, plant and equipment in Japan is more than 90% of the amount of property, plant andequipment in the consolidated balance sheets, and information on property, plant and equipment is omitted.
3. Information by major customer
The Group engages in only one segment, the security business.
(Million yen)
Customer name

Net sales

SB C&S Corp.

1,166

Daiwabo Information System Co., Ltd.

1,109

Fiscal 2021 (from April 1, 2020 to March 31, 2021)
1. Information by product/service
The Group has only one product and service category, and information by product/service is omitted.
2. Information by region(1) Net sales
Sales to external customers in Japan are more than 90% of net sales in the consolidated statements of income, andinformation by region is omitted.
(2) Property, plant and equipment
The amount of property, plant and equipment in Japan is more than 90% of the amount of property, plant andequipment in the consolidated balance sheets, and information on property, plant and equipment is omitted.
3. Information by major customer
The Group engages in only one segment, the security business.
(Million yen)
Customer name

Net sales

Daiwabo Information System Co., Ltd.

1,409

SB C&S Corp.

1,287

―32―

(Related party information)
Transactions with related parties
Transactions between the company submitting consolidated financial statements and related parties
Officers and major individual shareholders of the company submitting consolidated financial statements
Fiscal 2020 (from April 1, 2019 to March 31, 2020)
There are no applicable matters.
Fiscal 2021 (from April 1, 2020 to March 31, 2021)
There are no applicable matters.
(Per share information)
Fiscal 2020
(from April 1, 2019
to March 31, 2020)

Fiscal 2021
(from April 1, 2020
to March 31, 2021)

Net assets per share

617.27 yen

715.79 yen

Profit per share

113.69 yen

146.90 yen

Diluted profit per share

110.83 yen

143.45 yen(Note) Base for calculating profit per share and diluted profit per share
Item

Fiscal 2020
(from April 1, 2019
to March 31, 2020)

Fiscal 2021
(from April 1, 2020
to March 31, 2021)

Profit per share
Profit attributable to owners of parent (million yen)

1,590

2,059

Amount not attributable to common shareholders(million yen)
Profit attributable to owners of parent related tocommon shares (million yen)

－

－

1,590

2,059

13,991,859

14,022,503－－

Increase in the number of common shares

361,483

337,562(Of the increase, the number of share acquisitionrights) (shares)

361,483

337,562

Average number of common shares during the term
Diluted profit per share
Adjustment of profit attributable to owners of parent(million yen)

Share acquisition rights
Outline of potential shares that are not included in thecalculation of the diluted profit per share because they
do not have any diluting effects

Resolution on November 10,
2016
Number of potential shares:
372,300
Resolution on February 16,
2018
Number of potential shares:
1,188,300(Significant subsequent events)
There are no applicable matters.

―33―

Share acquisition rights
Resolution on February 16,
2018
Number of potential shares:
1,130,900