Notice of Convocation

The 57th Ordinary General Shareholders’ Meeting

This document has been translated from the Japanese original for reference purpose
only. In the event of any discrepancy between this English version and the Japaneseoriginal, the original shall prevail. The Company assumes no responsibility for thistranslation, or for direct, indirect or any other forms of damages arising from thetranslation.
Please be advised that certain explanations for domestic voting procedures that are
not applicable to the shareholders outside Japan are omitted or modified to avoid
confusion.

1

(Translation)(Code No.: 4665)
June 3, 2019
To Shareholders
Teruji Yamamura
President & CEO
Duskin Co., Ltd.
1-33 Toyotsu-cho, Suita-shi,
Osaka 564-0051 JAPAN

Notice of the 57th Annual General Meeting of Shareholders
The 57th Annual General Meeting of Shareholders will be held as indicated below under the heading of“Details of the Meeting” and your attendance is cordially requested.
If you are unable to attend on this date, you may exercise your voting rights either in writing or via
electronic format (Internet). In this case, you are requested to carefully review the Reference Material
for the Annual General Meeting of Shareholders, attached hereto, and exercise your voting rights by
5:00 pm on Monday, June 24, 2019.
Details of the Meeting
1: Date and Time:

10:00 am on Tuesday, June 25, 2019
(The reception is scheduled to start at 9:00 am.)

2: Venue:

Main Hall, Osaka International Convention Center 5th Floor
5-3-51 Nakanoshima, Kita-ku, Osaka, Japan

3: Purpose of the Shareholders’ Meeting
Items to be reported
1.

Presentation of the business report, the Consolidated Financial Statements for Fiscal 2018
(April 1, 2018 to March 31, 2019) and Result on Consolidated Financial Statement Auditing
Report by Accounting Auditors and the Audit & Supervisory Board

2.

Presentation of the business performance, Fiscal 2018 (April 1, 2018 to March 31, 2019)

Matters to be resolved
Proposal 1:

Proposal for Appropriation of Retained Earnings

Proposal 2:

Election of Nine (9) Members of the Board of Directors

2

4: Matters concerning exercise of voting rights(1) When multiple votes are cast through Internet, the final vote will be considered to be the intended
official vote.
(2) When multiple votes are cast on Internet and by proxy card, regardless of the time of the received
votes, vote on Internet will be considered to be the intended effective vote.
(3) Shareholders may vote their shares by proxy by naming another shareholder who holds voting
rights to attend the shareholders meeting and act as the proxy. In this case, the proxy must submit
proof of identity.
5: Matters concerning materials annexed to this notice and reference materials for the Annual
General Meeting of Shareholders(1) The following matters have been posted on the corporate website (https://www.duskin.co.jp/ir/,
Japanese version only) and are therefore omitted from the materials annexed to this Notice pursuant
to relevant laws and Article 17 of the Company’s Articles of Incorporation:
1) Necessary systems to ensure appropriate execution of operations and its operational status2) Basic Policies related to the Company’s Ownership Control
3) The notes to the consolidated financial statements; and
4) The notes to the non-consolidated financial statements
Audit & Supervisory Board Members audit the business report, consolidated and nonconsolidated financial statements attached to this Notice of convocation, and documents 1) to 4)
as stated above. The Accounting Auditor audits the consolidated and non-consolidated financial
statements attached to this Notice of convocation, and documents 3) to 4) stated above.
(2) If amendments are made to the Shareholders’ Meeting reference materials, the business report,
or the consolidated and non-consolidated financial statements, the amended contents will be posted
immediately on the corporate website (https://www.duskin.co.jp/english/).

When attending the Meeting in person, please present the enclosed voting form at the reception. Please
note that only shareholders are entitled to attend the Meeting.
Please bring this copy of the proxy statement to the Meeting to save resources.

3

Exercise of Voting Right
Voting rights may be exercised by attendance, in writing or via electronic means.

Exercise of voting right

Exercise of voting right

Exercise of voting right

By attendance

In writing by post

Via Electronicmeans/Internet*

Submit Voting Rights Execution

Indicate your approval orAccess voting site:

Form to the reception counter at thedisapproval of the proposals on the

http://www.web54.net *1 and 2

Meeting

enclosed Voting Rights Execution
Form to us by the deadline indicatedbelow.

Meeting Date and Time

Deadline

Deadline

10:00 am, Tuesday

5:00 pm, Monday

5:00 pm, Monday

June 25, 2019 (JST)June 24, 2019 (JST)June 24, 2019 (JST)*1. Voting over the Internet can only be accomplished by accessing the site designated for thispurpose by Duskin (http://www.web54.net). This site is available only in Japanese.
*2. Please note that using Internet may incur cost such as connection fee, and such cost will

be borne by the shareholders.

4

= Reference Material =Proposal 1: Proposal for Appropriation of Retained Earnings
Duskin considers the return to shareholders one of the most important priorities and the payment ofcontinuous distributions of earnings is basic to how we organize and manage our businesses. After securing
internal capital resources required for operations, business plans and sound business management, we havedetermined that the year-end dividend should be 20 yen per share, the same amount as one year earlier.

(1) Type of dividend: cash
(2) Particulars and amount of the dividends
20 yen per share of common stock
Total amount of dividends:

1,040,308,040 yen (funds for the dividends: retained earnings)

The Company paid an interim dividend of 20 yen per share, and a commemorative dividend (55thanniversary of founding) of 10 yen per share. The full-year dividend is to total 50 yen per share.
(3) The effective date of the dividends: June 26, 2019

Reference: Basic dividend policy from FY2019
Returning a portion of earnings to shareholders is one of our highest priorities. Our basic policy is to distributeprofits to shareholders based on our performance while maintaining the proper balance between these
distributions and the need for investments for sustained growth and higher corporate value and the need tomaintain financial soundness to be prepared for potential risks involving business operations. A consolidated
payout ratio of 50% is the guideline for the dividend for each fiscal year while maintaining the stability andconsistency of dividend payments.

5

Proposal 2: Election of Nine (9) Members of the Board of Directors
The term of the current nine (9) Directors will expire at the close of this Annual General Meeting of
Shareholders. It is proposed that the total number of Directors remains at nine (9).

CandidateNo.
1

Reappointment

Teruji Yamamura

2

Reappointment

Kenichi Miyajima

3

Reappointment

Kazuo Okai

4

Reappointment

Junichi Narahara

5

Reappointment

Kazushi Sumimoto

6

Reappointment

Taku Suzuki

7

8

9

Titles and Responsibilities(significant concurrent positions)

Name

Reappointment
Candidate for
Independent Outside
Director
Reappointment
Candidate for
Independent Outside
Director
New Candidate for
Independent Outside
Director

Representative Director
President & Chief Executive Officer
Director
Executive Vice President & Operating
OfficerPresident's Office, Food Group,
Corporate AccountDirector
Senior Executive Operating Officer
Human Resources, Legal Affairs &Corporate Compliance, Quality
Assurance & Risk Management, New
Business Development, International
Director
Senior Executive Operating Officer
Strategy Management and Operations,
Direct Selling Group; Care Service
Business Group
Director
Executive Operating Officer
Corporate Planning, General Affairs,
Accounting, Public Relations,
Information System, Production &Logistics
Director
Senior Operating Officer
Rent-All, Health Rent, Life Care,
Uniform Service, Health & Beauty

Number of
Board ofDirectors
meetings
attended

20/20

18/20

20/20

20/20

20/20

20/20

Tadashi Yamamoto

Outside Director

20/20

Tomoya Yoshizumi

Outside Director

20/20

Nobuko Sekiguchi

-

-

6

Reference: Policy for selection of Director candidates
Director candidates must have the proper character, knowledge and ethics for this post and must have nohealth issues that would prevent them from performing their duties.
With regard to internal Directors, the President & CEO requests recommendations for candidates fromcurrent Directors and Audit & Supervisory Board Members, and reviews the recommendations.
Candidates for internal Directors must be capable of consistently executing the medium-to-long-term
growth strategy of the Duskin Group, and making a positive impact on the vitality of our organization.
Candidates are selected by the Board of Directors after taking into account the opinions of the Director
Evaluation Council, which is chaired by an Outside Director and majority of the members are
independent directors.
Candidates for Outside Directors must not be a related party of the Duskin Group and must be able tomaintain their independence. They must also have the business experience and expertise to perform
supervisory and advisory functions for the Board of Directors. In addition, they must be capable ofproviding beneficial advice from many perspectives to ensure management transparency, soundness andfairness. Outside Director candidates are selected by the Board of Directors.
To improve the effectiveness of Directors Evaluation and Nomination System, the Director Evaluation
Council, which was an advisory council for the President & CEO, was changed to an advisory council
for the Board of Directors in April 2019. Along with this change, the council is now comprised of only
independent Directors to enhance its objectivity and transparency.

Candidate No. 1

Teruji Yamamura

Date of birth

Number of shares owned: 33,785

January 28, 1957

Tenure: 15 years(at the conclusion of this Annual General Shareholders’ Meeting)

Position/Career Summary
Apr. 2018
Apr. 2009
Apr. 2007
June 2004
Jan. 1982

Reappointment
Attendance at Board of Directors
meetings during FY 2018:
20/20
100.0%

Representative Director
President & Chief Executive Officer (to the present)
President & Chief Executive Officer
Director
Care Service Business Group, Rent-All, Home Instead
Director & Assistant General Manager
Clean Service Business Group
Joined the Company

Reasons for recommending Teruji Yamamura as a candidate for Director
Since becoming President & CEO in 2009, Mr. Yamamura has been
implementing the reforms to make the Duskin Group get back on track forrecovery. He has been a leader in the structural reforms in the second
three-year phase of the long-term strategy ONE DUSKIN. Due to his trackrecord as President and considerable expertise in franchise businesses,
Duskin believes that he is sufficiently qualified and requests a vote infavor of Mr. Yamamura’s re-election as a Director.

7

Candidate No. 2

Kenichi Miyajima

Date of birth

Number of shares owned: 11,300

March 16, 1955

Tenure: 15 years(at the conclusion of this Annual General Shareholders’ Meeting)

Position/Career Summary
June 2018

Apr. 2018
Apr. 2015
June 2012
Reappointment
Attendance at Board of Directors
meetings during FY 2018:
18/20
90.0%

Apr. 2009

June 2004
May 1990

Director
Executive Vice President & Operating Officer
President's Office, Food Group, Corporate Account (tothe present)
Director
Senior Executive Operating Officer
Food Group
Senior Executive Director
President’s Office, Mister Donut Business Group, FoodGroup
Senior Executive Director
President’s Office, Public Relations, Legal Affairs &Corporate Compliance, Quality Assurance & Risk
Management, Product Inspection Center, Food Chain
Business & Development
Executive Director
Clean Service Business Group, Care Service BusinessGroup, Rent-All, Uniform Service, Health & Beauty,Home Instead, Drink Service, Corporate AccountDirector
General Manager, Clean Service Business Group
Joined the Company

Reasons for recommending Kenichi Miyajima as a candidate for Director
Mr. Miyajima was appointed General Manager of Mister Donut BusinessGroup in 2014 after positions in the Clean & Care Service Businesses.
Since 2015, he has supervised the entire Food Group, and focused on thereestablishment of the Mister Donut brand and the development of new
food businesses. Due to his extensive experience with business operations
and considerable expertise in franchise businesses, Duskin believes that
he is sufficiently qualified and requests a vote in favor of Mr. Miyajima’s
re-election as a Director.

8

Candidate No. 3

Kazuo Okai

Date of birth

Number of shares owned: 18,755

June 29, 1957

Tenure: 11 years(at the conclusion of this Annual General Shareholders’ Meeting)

Position/Career Summary
Apr. 2019

June 2018

Reappointment
Attendance at Board of Directors
meetings during FY 2018:
20/20
100.0%

Apr. 2018
June 2015
Apr. 2010
June 2008
Apr. 1980

Director
Senior Executive Operating Officer
Human Resources, Legal Affairs & Corporate
Compliance, Quality Assurance & Risk Management,
New Business Development, International (to thepresent)
Director
Executive Operating Officer
Human Resources, Legal Affairs & Corporate
Compliance, Quality Assurance & Risk Management,
New Business Development, International, ProductInspection Center
Director
Executive Operating Officer
International, Care Service Business Group
Executive Director
General Manager, Clean & Care Development Group
Director
Corporate Planning, Overseas Business Development,
New Business Development
Director
Manager, Overseas Business Development
Chairman & CEO, Duskin Hong Kong Co., Ltd.
Joined the Company

Reasons for recommending Kazuo Okai as a candidate for Director
Mr. Okai has used extensive experience to oversee corporate planning,overseas operations, the Clean & Care Business Group and otheroperations since he joined Duskin. Starting in 2018, he has beensupervising strategic planning for human resources and expansion andestablishment of overseas businesses. As he has extensive experience withbusiness operations and considerable expertise in franchise businesses,
Duskin believes that he is sufficiently qualified and requests a vote infavor of Mr. Okai’s re-election as a Director.

9Candidate No. 4

Junichi Narahara

Date of birth

Number of shares owned: 10,600

February 20, 1958

Tenure: 10 years(at the conclusion of this Annual General Shareholders’ Meeting)

Position/Career Summary
Apr. 2019

June 2018

Apr. 2018

Reappointment
Attendance at Board of Directors
meetings during FY 2018:
20/20
100.0%

Apr. 2015
Mar. 2014
June 2009
Oct. 1982

Director
Senior Executive Operating Officer
Strategy Management and Operations, Direct SellingGroup; Care Service Business Group (to the present)
Director
Executive Operating Officer
Strategy Management and Operations, Direct SellingGroup; Care Service Business Group
General Manager, Strategy Management, Direct SellingGroup
Director
Executive Operating Officer
Strategy Management and Operations, Direct SellingGroup; Corporate AccountGeneral Manager, Strategy Management, Direct SellingGroup
Director
General Manager, Clean & Care Sales Group
Director, Western Japan, Clean & Care Group
Director
General Manager, Mister Donut Business Group
Joined the Company

Reasons for recommending Junichi Narahara as a candidate for Director
Mr. Narahara has been involved in the growth of Mister Donut BusinessGroup for many years since he joined Duskin. Since 2014, he has been
overseeing sales in the Clean & Care Businesses. Since 2018, he has been
taking initiatives to formulate strategies in Direct Selling Group. As he
has extensive experience with business operations and considerable
expertise in franchise businesses, Duskin believes that he is sufficiently
qualified and requests a vote in favor of Mr. Narahara’s re-election as a
Director.

10

Candidate No. 5

Kazushi Sumimoto

Date of birth

Number of shares owned: 7,785

November 29, 1960

Tenure: 5 years(at the conclusion of this Annual General Shareholders’ Meeting)

Position/Career Summary
Apr. 2019

June 2018

Apr. 2018

Reappointment
Attendance at Board of Directors
meetings during FY 2018:
20/20
100.0%

Apr. 2017
May 2016
June 2014
Apr. 1983

Director
Executive Operating Officer
Corporate Planning, General Affairs, Accounting,Public Relations, Information System, Production &Logistics (to the present)
Director
Senior Operating Officer
Corporate Planning, General Affairs, Accounting,Public Relations, Information System, Production &Logistics
Director
Senior Operating Officer
Corporate Planning, Production & Logistics
Director
Corporate Planning, Production & Logistics
Director
Corporate Planning, Life Care, Rent-All, Uniform
Service, Health & Beauty
Director
Home InsteadManager, Rent-All
Joined the Company

Reasons for recommending Kazushi Sumimoto as a candidate for Director
Mr. Sumimoto was assigned to Clean & Care Business Group and thenmoved to Rent-All in 2012 where he made a major contribution to thegrowth of this business. Since becoming the Director for corporate
planning in 2016, he has overseen the formulation of growth strategies.
As the Director for Production & Logistics. Since 2017, he has played acentral role in optimizing cost structures. As he has extensive experience
with business operations and considerable expertise in franchisebusinesses, Duskin believes that he is sufficiently qualified and requests avote in favor of Mr. Sumimoto’s re-election as a Director.

11

Candidate No. 6

Taku Suzuki

Date of birth

Number of shares owned: 3,900

October 8, 1965

Tenure: 3 years(at the conclusion of this Annual General Shareholders’ Meeting)

Position/Career Summary
Apr. 2018

Apr. 2017
June 2016
Apr. 1989

Reappointment
Attendance at Board of Directors
meetings during FY 2018:
20/20
100.0%

Director
Senior Operating Officer
Rent-All, Health Rent, Life Care, Uniform Service,
Health & Beauty (to the present)
Director
Life Care, Rent-All, Uniform Service, Health & Beauty
Director
Product Inspection Center
General Manager, Production & Logistics
Joined the Company

Reasons for recommending Taku Suzuki as a candidate for Director
Mr. Suzuki was involved with new business development associated with
the Clean & Care Business Group, laundry plant operations and otheractivities after he joined Duskin. In 2012, he was appointed General
Manager of Production & Logistics, where he enacted production reforms.
Since 2017 as the Director for senior care services, he has demonstrated
strong leadership for establishing and strengthening the businessfoundation in this field. As he has extensive experience with business
operations and considerable expertise in franchise businesses, Duskinbelieves that he is sufficiently qualified and requests a vote in favor of Mr.
Suzuki’s re-election as a Director.

12

Candidate No. 7

Tadashi Yamamoto

Date of birth

Number of shares owned: -November 14 , 1952

Tenure: 4 years(at the conclusion of this Annual General Shareholders’ Meeting)

Position/Career Summary
June 2015
June 2014
June 2012

Mar. 2012
Apr. 2008

Reappointment
Candidate for Independent
Outside Director
Attendance at Board of Directors
meetings during FY 2018:
20/20
100.0%

June 2006

Apr. 1976

Director (to the present)
Resigned from the position of Audit & Supervisory
Board Member, Wacoal Corp.
Audit & Supervisory Board Member
Wacoal Corp.
Resigned from the position of Director
Wacoal Holdings Corp.
Resigned from the position of Director, Wacoal Corp.
Director, Wacoal Holdings Corp.
Senior Managing Corporate Officer
General Manager, International Operations
Wacoal Corp.
Director, Wacoal Holdings Corp.
Managing Corporate Officer
General Manager, Human Resource & Administration
Wacoal Corp.
Joined Wacoal Corp.

Reasons for recommending Tadashi Yamamoto as a candidate for Director
Mr. Yamamoto has a great deal of experience and knowledge in corporate
management as a Director and Senior Managing Corporate Officer at
Wacoal Corporation. In addition, he has considerable expertise concerning
human resource planning, international operations and other fields. Since
becoming a Duskin Outside Director in June 2015, Mr. Yamamoto has
contributed to enhancing corporate governance by providing advice andsupervision regarding management from an objective standpoint
independent of the executives who conduct business operations.
Therefore, Duskin requests a vote in favor of Mr. Yamamoto’s re-election
as an Outside Director.

13

Candidate No. 8

Tomoya Yoshizumi

Date of birth

Number of shares owned: 200

June 10, 1953

Tenure: 2 years(at the conclusion of this Annual General Shareholders’ Meeting)

Position/Career Summary
June 2017
June 2017
June 2015
June 2013

June 2011

Reappointment
Candidate for Independent
Outside Director
Attendance at Board of Directors
meetings during FY 2018:
20/20
100.0%

June 2008
June 2007
Apr. 1978

Director (to the present)
Resigned from Ajinomoto Co., Inc.
Advisor, Ajinomoto Co., Inc.
Corporate Vice President & General Manager,
North America Division,
Bioscience & Finechemicals Business Division
Ajinomoto Co., Inc.
President, AJINOMOTO NORTH AMERICA, INC(current Ajinomoto Health & Nutrition North America,
Inc.)
Member of the Board & Corporate Vice President
General Manager, North America Division
Bioscience & Finechemicals Business Division
Ajinomoto Co., Inc.
President, Ajinomoto U.S.A.
(current Ajinomoto Health & Nutrition North America,
Inc.)
Member of the Board & Corporate Vice President
President, Amino Acids Company
Member of the Board, Ajinomoto Co., Inc.
Joined Ajinomoto Co., Inc.

Reasons for recommending Tomoya Yoshizumi as a candidate for Director
Mr. Yoshizumi has a great deal of experience and knowledge in corporate
management as a Member of the Board and Corporate Vice President at
Ajinomoto Co., Inc. At Ajinomoto, he was engaged in strategic production
planning, the Medium-Term Management Plan and implementing M&A
strategies for the Ajinomoto Group. For four years from 2011, hesupervised business operations in North America as General Manager,
North America Division and President of AJINOMOTO NORTHAMERICA, INC. Since becoming a Duskin Outside Director in June
2017, Mr. Yoshizumi has contributed to enhancing corporate governanceby providing advice and supervision regarding management from an
objective standpoint independent of the executives who conduct business
operations. Therefore, Duskin requests a vote in favor of Mr. Yoshizumi’s
re-election as an Outside Director.

14

Candidate No. 9

Nobuko Sekiguchi

Date of birth

Number of shares owned: -July 3, 1968
Position/Career Summary
Mar. 2019
Apr. 2016
Apr. 2011
Apr. 2007
Nov. 2005

New Candidate for Independent
Outside Director

Resigned from CAPCOM CO., LTD.
Managing Corporate Officer
Head of Corporate Planning & Human Resources
Division
Corporate Officer
Head of Corporate Planning Division
General Manager of Accounting Department
Joined CAPCOM CO., LTD.

Reasons for recommending Nobuko Sekiguchi as a candidate for Director
After working as a management consultant, Ms. Sekiguchi joined
CAPCOM CO., LTD. where as a Managing Corporate Officer, she wasengaged in leadership roles involving corporate planning and personnel
system reforms. Included in her corporate planning responsibilities were
the formulation of its Med-Term Plan, the annual budget management,
organizational restructuring, and M&A transactions. Due to her
experience and knowledge, Ms. Sekiguchi is expected to enhance
corporate governance by providing advice and supervision regarding
management from an objective standpoint independent of the executives
who conduct Duskin’s business operations. Therefore, Duskin requests avote in favor of Ms. Sekiguchi’s election as a new Outside Director.

1. The nominees have no special interests in Duskin.
2. Duskin has designated Mr. Tadashi Yamamoto and Mr. Tomoya Yoshizumi as Independent Directors inaccordance with regulations of the Tokyo Stock Exchange. If these Director candidates are re-elected,
Duskin plans to again designate them as Independent Directors. Also, if Ms. Nobuko Sekiguchi is elected,
Duskin plans to designate her as an Independent Director.
3. Duskin has contracts with Mr. Tadashi Yamamoto and Mr. Tomoya Yoshizumi that limit their liability as
provided in Article 423, Paragraph 1 of the Companies Act within the amount prescribed by laws orordinances. If these two individuals are elected as Outside Directors, Duskin plans to extend these contracts.
Also, if Ms. Nobuko Sekiguchi is elected as an Outside Director, Duskin will also enter into the same
contract with Ms. Sekiguchi.

15

Reference: Standards for independence of Outside Directors and Audit & Supervisory Board
Members

The independence of an Outside Director or Outside Audit & Supervisory Board Member requiresthat none of the following items is applicable to these individuals. These standards are based on the
independence standards of the Securities Listing Regulations Enforcement Rules of the Tokyo Stock
Exchange and also include standards established by Duskin.

1. A Director (except an Outside Director of Duskin), Audit & Supervisory Board Member (except
an Outside Audit & Supervisory Board Member of Duskin) or employee of one of Duskin Group*companies* Duskin and subsidiaries of Duskin

2. A Director, Audit & Supervisory Board Member or employee of a major shareholder* of Duskin
or a company or other organization where Duskin is a major shareholder* An individual, company or other entity that owns at least 10% of Duskin’s voting rights

3. A Director, Audit & Supervisory Board Member or employee of a company with a major business
relationship* with Duskin Group* A company where, in the most recent fiscal year, amounts paid to or received from Duskin Group for business
transactions are more than the larger of 1% of the consolidated sales of Duskin Group or the company (including
the parent company and subsidiaries) or ¥1 billion

4. An individual that has received substantial donations* from Duskin Group or a Director, Audit &Supervisory Board Member or employee of a company or other organization that has received
such donations* Substantial donations are cash and other items with a value of the larger of 1% of consolidated sales of Duskin
Group in the most recent fiscal year or ¥100 million.

5. An attorney, accountant, consultant who has received substantial payments* or other items ofvalue (or an individual belonging to a company or other organization that has received thesepayments) other than Director or Audit & Supervisory Board Member compensation from Duskin
Group* Cash or other items with a value of the larger of 1% of consolidated sales of Duskin Group in the most recent
fiscal year or ¥100 million

6. An individual who was ever in any position described in the above items 1 and 2
7. An individual who was within the past three years in any position described in the above items 3through 5
8. Spouses and first or second-degree relatives of individuals described in the above items 1
through 7
9. An individual who has been a Duskin Outside Director for five years or a Duskin Outside Audit& Supervisory Board Member for eight years
10. An individual with any other reasons for doubt about independence concerning the performanceof duties as a Duskin Outside Director or Outside Audit & Supervisory Board Member

16Consolidated Balance Sheets(millions of yen)

FY2018as ofMar. 31,2019

FY2017as ofMar. 31,2018

Current assets
Cash and deposits
Notes and accounts receivable trade
Lease receivables and investment
assetsSecurities
Merchandise and finished goods
Work in process
Raw materials and supplies
Other
Allowance for doubtful accounts

63,94815,881

67,611
18,846

10,211

9,950

1,196

1,326

23,404
7,994
193
1,459
3,635
-28

24,461
7,738
142
1,598
3,585
-37

Non-current assets

130,275

128,446

48,60449,344

16,03816,996

6,706

6,491

22,663574
2,621

22,750178
2,927

10,556

8,474

429
10,127549
7,925

Account

Account

AssetsProperty, plant and equipment
Buildings and structures
Machinery, equipment andvehiclesLand
Construction in progress
Other
Intangible assets
Goodwill
Other
Investment and other assets
Investment securities
Long-term loans receivable
Deferred tax assets
Guarantee deposits
Other
Allowance for doubtful accounts
Total Assets

FY2018as ofMar. 31,2019

FY2017as ofMar. 31,2018

34,330
6,845
－
1,308
3,491
9
8,730

33,985
6,834
173
1,403
3,397
18
8,112

9,206

9,314

4,738
10,009
8,191
585
786
26
75

4,731
14,286
12,882
578
788
18
－

329

－

14
44,33918
48,271

138,954
11,352
11,091
118,075-1,565

139,388
11,352
11,087
120,519-3,571

10,673

8,026

9,920

9,878

-1

1

-139

-54

894

-1,79818
237
149,884
194,2239361
147,786
196,058

Liabilities

71,11470,62762,458
0
2,092
5,543
1,048
-30

60,523
3
3,073
5,751
1,310
-34

194,223

196,058

Current liabilities
Notes and accounts payable-trade
Short-term loans payable
Income taxes payable
Provision for bonuses
Asset retirement obligations
Accounts payable-other
Guarantee deposit received forrental products
Other
Non-current liabilities
Net defined benefit liability
Asset retirement obligations
Long-term guarantee deposited
Long-term accounts payable-other
Deferred tax liabilities
Reserves for losses on liquidation ofsubsidiaries and affiliates
Other
Total liabilities

Net Assets
Shareholders' equity
Capital stock
Capital surplus
Retained earnings
Treasury shares
Accumulated other comprehensive
incomeValuation difference on availablefor-sale securities
Deferred gains or losses on hedges
Foreign currency translation
adjustment
Remeasurements of defined benefit
plans
Share acquisition rights
Non-controlling interests
Total Net Assets
Total Liabilities and Net Assets

Note: All financial figures are in millions of yen, all amounts less than a million are dropped.

17

Consolidated Statements of Income(millions of yen)Account
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
Rent income on facilities
Commission fee
Share of profit of entities accounted forusing equity method
Miscellaneous income
Non-operating expenses
Interest expenses
Rent expenses on facilities
Cancellation penalty
Compensation expenses
Subsidies return loss
Miscellaneous loss
Ordinary profit
Extraordinary income
Gain on sales of non-current assets
Gain on sales of investment securities
Insurance claim income
Other
Extraordinary losses
Loss on sales of non-current assets
Loss on abandonment of non-current assets
Impairment loss
Loss on disaster
Provision of reserves for losses on liquidation ofsubsidiaries and affiliates
Loss on sales of investment securities
Other
Profit before income taxes
Income taxes-current
Income taxes-deferred
ProfitLoss attributable to non-controlling interests
Profit attributable to owners of parent

FY2018FY2017

Apr. 1, 2018 -(Mar. 31, 2018 )Apr. 1, 2017 -(Mar. 31, 2019 )
158,699
86,13872,56064,606
7,954
2,373
261
369
162
186

161,03187,80873,222
65,664
7,557
1,747
345
346
152
174

683

220

709
316
3
79
48
47
－
137
10,011
431
164
66
190
9
1,971
34
183
1,025
179

508
326
7
57
35
42
45
137
8,978
163
133
24
－
5
1,228
93
173
840
0

329

－

211
7
8,471
2,701
-156
5,926
-58
5,984

93
27
7,913
2,821
-228
5,320
-4
5,324

Note: All financial figures are in millions of yen, all amounts less than a million are dropped.

18

Consolidated Statements of Changes in Net Assets(April 1, 2018 – March 31, 2019)(millions of yen)

Shareholders' equity
Capital stock
Balance at beginning ofcurrent period
Changes of items during theperiodRetainedearnings

Capital surplus

11,352

11,087

120,519

Total
shareholders'equityTreasury shares-3,571

139,388

Dividends of surplus-2,672-2,672

Profit attributable to ownersof parent

5,984

5,984

Purchase of treasury shares
Retirement of treasury shares-0

Disposal of treasury shares

0Changes in equity of theparent company related totransactions with noncontrolling shareholder
Net changes of items otherthan shareholders' equity
Total changes of items during
the period
Balance at end of current
period-3,754-3,754

5,757

－

2

3

-5,7564

4－

4-2,444

2,005

-434

11,352

11,091

118,075-1,565

138,954

Accumulated other comprehensive income

Balance at beginning of current
periodChanges of items during theperiodValuationdifferenceonavailable-forsale
securities

Deferred
gains orlosses onhedges9,8781Foreigncurrencytranslation
adjustment‐54

Remeasurements of defined
benefit plans

Total
accumulated
othercomprehensive
income‐1,798

8,026

Share
acquisitionrights

Noncontrollinginterests

Total
net assets

9361

147,786

Dividends of surplus‐2,672

Profit attributable to owners ofparent

5,984

Purchase of treasury shares‐3,754Retirement of treasury shares－

Disposal of treasury shares

3

Changes in equity of the parent
company related to transactions
with non-controlling shareholder
Net changes of items other thanshareholders' equity
Total changes of items during theperiodBalance at end of current period

4
41

-2

-84

2,692

2,647

9

‐124

2,532

41

-2

-84

2,692

2,647

9

‐124

2,098

9,920

-1

‐139

894

10,67318

237

149,884

Note: All financial figures are in millions of yen, all amounts less than a million are dropped.

19

Non-Consolidated Balance Sheets
FY2018as ofMar. 31,2019

Account

FY2017as ofMar. 31,2018

FY2018as ofMar. 31,2019

FY2017as ofMar. 31,2018

Current liabilities
Accounts payable-trade
Accounts payable-otherAccrued expenses
Income taxes payable
Deposits received
Guarantee deposits received forrental products
Provision for bonuses
Asset retirement obligations
Other

43,161
5,891
7,442
1,020
924
14,42242,852
6,144
6,785
1,004
951
14,315

9,829

9,965

2,543
9
1,078

2,488
18
1,177

Non-current liabilities
Provision for retirement benefits
Provision for loss on guarantees
Asset retirement obligations
Long-term guarantee deposited
Long-term deposits received
Long-term accounts payable-other
Other
Total Liabilities

12,676
7,156
－
482
988
4,020
17
11
55,837

13,472
8,004
113
491
970
3,860
17
15
56,324

115,371
11,352
1,090
1,090

116,595
11,352
1,090
1,090

Retained earnings
Legal retained earnings
Other retained earnings
Reserve for business development
Reserve for reduction entry
General reserve
Retained earnings brought forward

104,493
2,777
101,715869
63
96,800
3,982

107,723
2,777
104,946869－
96,8007,276Treasury shares-1,564-3,571

9,880

9,835

9,880

9,833

－

1

18

9

125,271
181,109

126,440
182,765

Account

AssetsCurrent assets
Cash and deposits
Notes receivable-trade
Accounts receivable-trade
Lease receivables
Securities
Merchandise and finished goods
Work in process
Raw materials and supplies
Prepaid expenses
Short-term loans receivable
Short-term loans receivable fromsubsidiaries and associates
Other
Allowance for doubtful accounts
Non-current assets
Property, plant and equipment
Buildings
Structures
Machinery and equipment
VehiclesTools, furniture and fixtures
Fixed assets for rent
Land
Construction in progress
Intangible assets
Goodwill
Trademark right
SoftwareTemporary account for intangible
fixed assets
Other
Investments and other assets
Investment securities
Shares of subsidiaries and associates
Investments in capital
Investments in capital of subsidiaries
and associates
Long-term loans receivable
Long-term loans receivable fromsubsidiaries and associates
Long-term prepaid expenses
Deferred tax assets
Guarantee deposits
Other
Allowance for doubtful accounts
Allowance for investment loss
Total Assets(millions of yen)

Liabilities
51,016
9,557
20
7,754
14
23,404
6,244
5
753
551
5

55,367
13,262
44
7,669
29
24,461
5,926
4
918
509
4

112

109

2,603
-12
130,092
37,39012,454
820
712
0
1,597
54
21,540
209
9,746
12
46
6,489

2,442
-17
127,397
38,315
13,176
808
834
0
1,639
58
21,684
113
7,570
17
50
5,526

3,026

1,787

171
82,95655,31920,2000188
81,511
59,222
14,639
0

68

0

0

2

468

399

438
1,494
4,989
71
-28
-68
181,109

611
1,326
5,179
159
-30
－
182,765

Net Assets
Shareholders' equity
Capital stock
Capital surplus
Legal capital surplus

Valuation and translation adjustments
Valuation difference on availablefor-sale securities
Deferred gains or losses on hedges
Share acquisition rights
Total Net Assets
Total Liabilities & Net Assets

Note: All financial figures are in millions of yen, all amounts less than a million are dropped.
20

Non-Consolidated Statements of Income(millions of yen)Account

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Interest income on securities
Dividend income
Rent income on facilities
Commission fee
Miscellaneous income
Non-operating expenses
Interest expenses
Rent expenses on facilities
Cancellation penalty
Disposal and removal expenses
Provision for loss on guarantees
Subsidies return loss
Miscellaneous loss
Ordinary profit
Extraordinary income
Gain on sales of non-current assets
Gain on sales of investment securities
Insurance claim income
Other
Extraordinary losses
Loss on sales of non-current assets
Loss on abandonment of non-current assets
Impairment loss
Loss on disaster
Loss on sales of investment securities
Loss on valuation of shares of subsidiaries
and associates
Provision of allowance for investment loss
Other
Income before income taxes
Income taxes-current
Income taxes-deferred
ProfitNote:

FY2018
April 1, 2018()
March 31, 2019
129,592
75,011
54,581
49,327
5,254
3,568
19
242
1,511
865
289
638
293
18
91
54
38
－
－
89
8,529
320
163
66
85
4
1,903
34
132
794
146
211

FY2017
April 1, 2017()
March 31, 2018
132,537
76,88355,65350,737
4,915
2,978
18
324
1,173
844
268
348
417
16
64
32
41
113
45
104
7,476
134
106
24
－
3
1,176
93
154
834
0
93

513

－

68
1
6,945
1,937
-190
5,198

－
0
6,434
2,042
-310
4,703

All financial figures are in millions of yen, all amounts less than a million are dropped.

21

Non-Consolidated Statements of Changes in Net Assets(April 1, 2018 – March 31, 2019)(millions of yen)
Shareholders' equity
Capital surplus

Retained earnings
Other retained earnings

Capital
stock

Legal
capitalsurplus

OthercapitalsurplusTotal
capitalsurplusLegalretainedearnings

Reserveforbusinessdevelopment

Reserveforreduction
entry

Generalreserve

Retainedearnings
brought
forward11,352

1,090

－

1,090

2,777

869

－

96,8007,276

107,723

Dividends of surplus‐2,672‐2,672

Profit

5,198

5,198

-5,756-5,756-63－

Balance at beginning ofcurrent period
Changes of items during
the period

Purchase of treasury
sharesRetirement of treasury
shares
Disposal of treasury
shares
Reversal of reserve
for reduction entry
Net changes of items
other than shareholders’equityTotal changes of items
during the period
Balance at end of current
period

-0

-0

0

0
63

－

－

－

－

－

－

63

－

-3,294-3,23011,352

1,090

－

1,090

2,777

869

63

96,800

3,982

104,493

Shareholders' equity
Total
shareholders'equityTreasurysharesBalance at beginning ofcurrent period
Changes of items during
the period

Total
retainedearnings-3,571

116,595

Valuation and translation adjustments
Valuation
Total
difference
Deferred gains
valuation
on availableor losses onandfor-salehedgestranslation
securities
adjustments

9,833

1

9,835

Share
acquisitionrightsTotal net
assets9

126,440

Dividends of surplus‐2,672‐2,672

Profit

5,198

5,198

‐3,753‐3,753‐3,753

5,757

－

－

2

3

3

－

－

Purchase of treasury
sharesRetirement of treasury
shares
Disposal of treasury
shares
Reversal of reserve
for reduction entry
Net changes of items
other thanshareholders’ equity
Total changes of items
during the period
Balance at end ofcurrent period
Note:

46

-1

45

9

54

2,006

-1,223

46

-1

45

9

-1,169-1,564

115,371

9,880

－

9,880

18

125,271

All financial figures are in millions of yen, all amounts less than a million are dropped.

22