Consolidated Summary Report of Operating Results for Fiscal 2022
(Year Ended December 31, 2022) [Japan GAAP]
February 7, 2023
Company name

Future Corporation

Listing: Tokyo Stock Exchange

Securities code:

4722

Representative:

Yasufumi Kanemaru, Chairman and President

Contact:

Yasukazu Matsushita, Head of Financial & Accounting GroupURL: https://www.future.co.jp
TEL: 03-5740-5724

Scheduled date of annual general shareholders’ meeting:March 23, 2023

Scheduled date for distributing dividend payments:

March 24, 2023

Scheduled date for filing the securities report:

March 24, 2023

Creation of supplemental material on financial results:

No

Holding of financial results briefing:

Yes (for institutional investors and analysts)(Amount rounded off to million yen)

1.

Consolidated Results for Fiscal 2022 (January 1, 2022 to December 31, 2022)(1)

Consolidated operating results(Percentage figures indicate year-on-year changes.)

Net sales

Profit attributable to owners ofparentOperating income

Million yen%

Million yen%

Million yen%

Fiscal 2022

53,738

10.3

12,229

35.9

9,236

45.0

Fiscal 2021

48,698

9.9

9,000

71.9

6,369

67.8

(Note)

Comprehensive income

Fiscal 2022: 5,657 million yen [(3.8)%]
Fiscal 2021: 5,880 million yen [(43.9)%]
Profit per share

Return on equity (ROE)

Operating income margin

Yen

%

%

Fiscal 2022

104.32

21.3

22.8

Fiscal 2021

71.97

15.9

18.5

(Reference) Share of profit (loss) of entities accounted for using equity method Fiscal 2022: 61 million yen
Fiscal 2021: 30 million yen(Notes)

1.

2.

(2)

The Company has adopted the “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020) and relevant
ASBJ regulations from the beginning of the fiscal year ended December 31, 2022, and each figure for the fiscal year ended December 31,
2022 is the figure after adopting the accounting standard and relevant ASBJ regulations.
The Company conducted a two-for-one stock split of its common stock on January 1, 2022. Profit per share is computed based on theassumption that the stock split was conducted at the beginning of the previous fiscal year.

Consolidated financial position
Total assets

Fiscal 2022
Fiscal 2021
(Reference) Shareholders’ equity(Notes)1.

2.

Shareholders’ equity
ratio

Net assets

Net assets per share

Million yen

Million yen%

Yen

57,85744,82777.5

506.2054,483Fiscal 2022: 44,827 million yen

41,801
76.7
Fiscal 2021: 41,801 million yen

472.19The Company has adopted the “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020) and relevant
ASBJ regulations from the beginning of the fiscal year ended December 31, 2022, and each figure for the fiscal year ended December 31,
2022 is the figure after adopting the accounting standard and relevant ASBJ regulations.
The Company conducted a two-for-one stock split of its common stock on January 1, 2022. Net assets per share is computed based on theassumption that the stock split was conducted at the beginning of the previous fiscal year.

(3)Consolidated cash flow position
Net cash provided by(used in) operating
activities

Net cash provided by(used in) investing
activities

Net cash provided by(used in) financing
activities

Cash and cash
equivalents at the endof the period

Million yen

Million yen%

Yen

Fiscal 2022

10,174(1,009)(3,017)27,552

Fiscal 2021

9,611

(1,689)(2,498)21,4302.

Cash dividends
Ratio of
Dividend
dividends
payoutTotal cash
to netratio
dividends
assets(consolidat(consolidated)ed)

Annual dividends
End offirstquarter

End ofsecondquarter

End ofthird
quarter

Fiscalyear-end

Total

Yen

Yen

Yen

Yen

Yen

Million yen%

Yen

Fiscal 2021

-

23.00

-

28.00

51.00

2,257

35.4

5.6

Fiscal 2022

-

17.00

-

20.00

37.00

3,276

35.5

7.6

Fiscal 2023 (projection)

-

20.00

-

20.00

40.00

(Note)

3.

36.7

The Company conducted a two-for-one stock split of its common stock on January 1, 2022. The dividend amounts for fiscal 2021 are theactual dividend amounts before the stock split was conducted.

Projected Consolidated Results for Fiscal 2023 (January 1, 2023 to December 31, 2023)(Percentage figures indicate year-on-year changes.)
Net sales
Million yen

Profit attributable toowners of parent

Operating income%

Million yen

Profit per
share

%

Million yen%

Yen

First six months(accumulated total)

28,300

9.1

6,600

6.2

4,620

2.3

52.17

Full-year

59,50010.7

13,800

12.8

9,660

4.6

109.08

*

Notes

(1)

Changes in significant subsidiaries during the fiscal year under review (changes in specified subsidiaries accompanied bychanges in the scope of consolidation): None

(2)

Changes in accounting policies or estimates and retrospective restatements
1)
Changes in accounting policies in accordance with revisions of accounting standards: Yes
2)
Changes in accounting policies other than item 1) above: None
3)
Changes in accounting estimates: None4)
Retrospective restatements: None

(Note)(3)

For more information, see “(5) Notes to consolidated financial statements (Changes in accounting policies)” in “4. Consolidated Financial Statements
and Major Notes” on page 15 of the appendix.

Number of outstanding shares (common stock)1)

Total outstanding shares as of the endof the period (including treasury
shares)Fiscal 2022

95,328,000 shares Fiscal 2021

95,328,000 shares

2)

Total treasury shares as of the end of
the period

Fiscal 2022

6,771,952 shares Fiscal 2021

6,801,478 shares

3)

Average number of outstanding shares
during the period under review

Fiscal 2022

88,546,007 shares Fiscal 2021

88,509,695 shares(Note) The Company conducted a two-for-one stock split of its common stock on January 1, 2022. “Total outstanding shares as of the end of theperiod,” “Total treasury shares as of the end of the period,” and “Average number of outstanding shares during the period under review” arecomputed on the assumption that the stock split was conducted at the beginning of the previous fiscal year.

(Reference) Overview of non-consolidated results
Non-consolidated Results for Fiscal 2022 (January 1, 2022 to December 31, 2022)(1)

Non-consolidated operating results(Percentage figures indicate year-on-year changes.)

Net sales

Operating revenue

Operating income

ProfitMillion yen%

Million yen%

Million yen%

Million yen%

Fiscal 2022

8,039

6.7

4,418

54.5

5,926

18.8

5,164

39.3

Fiscal 2021

7,532

39.7

2,860

(17.3)

4,989

5.9

3,708

(10.6)

Profit per share
Yen

Fiscal 2022

58.32

Fiscal 2021
(Notes)

1.
2.

(2)

41.90
The Company has adopted the “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020) and relevant
ASBJ regulations from the beginning of the fiscal year ended December 31, 2022, and each figure for the fiscal year ended December 31,
2022 is the figure after adopting the accounting standard and relevant ASBJ regulations.
The Company conducted a two-for-one stock split of its common stock on January 1, 2022. Profit per share is computed based on theassumption that the stock split was conducted at the beginning of the previous fiscal year.

Non-consolidated financial position
Total assets

Fiscal 2022
Fiscal 2021
(Reference) Shareholders’ equity(Notes)1.

2.

*

Shareholders’ equity
ratio

Net assets

Net assets per share

Million yen

Million yen%

Yen

40,83834,34484.1

387.82

43,467
Fiscal 2022: 34,344 million yen

35,468
81.6
Fiscal 2021: 35,468 million yen

400.66The Company has adopted the “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020) and relevant
ASBJ regulations from the beginning of the fiscal year ended December 31, 2022, and each figure for the fiscal year ended December 31,
2022 is the figure after adopting the accounting standard and relevant ASBJ regulations.
The Company conducted a two-for-one stock split of its common stock on January 1, 2022. Net assets per share is computed based on theassumption that the stock split was conducted at the beginning of the previous fiscal year.

This summary of annual financial results is outside the scope of auditing by a certified public accountant or an audit corporation.

* Points to note about the proper use of projections, and other noteworthy events
Any forward-looking statement, including earnings forecasts, contained in this document is based on information currently held by theCompany and assumptions the Company considers to be reasonable, and the Company does not promise to achieve any of them. Actual
results may differ significantly from forecasts due to various uncertain factors.
(Change in the way yen amounts are reported)
The figures for accounts and other items presented in the Company’s consolidated financial statements were previously stated inthousands of yen, but effective from the beginning of the current fiscal year these amounts are now stated in millions of yen. The figures
for the previous fiscal year are also presented in millions of yen for ease of comparison.

Contents
1.

Overview of Operating Results and Other .................................................................................................................................... 2(1) Overview of operating results for fiscal 2022 ......................................................................................................................... 2(2) Overview of the financial position for fiscal 2022 .................................................................................................................. 3(3) Overview of cash flows for fiscal 2022 .................................................................................................................................. 4(4) Future outlook ........................................................................................................................................................................ 4(5) Dividend policy and dividends for the current and next year ................................................................................................. 6

2.

The Future Group.......................................................................................................................................................................... 7

3.

Basic Approach to Selection of Accounting Standards ................................................................................................................. 7

4.

Consolidated Financial Statements and Major Notes .................................................................................................................... 8(1) Consolidated balance sheets ................................................................................................................................................... 8(2) Consolidated statements of income and comprehensive income .......................................................................................... 10(3) Consolidated statements of changes in net assets ................................................................................................................. 12(4) Consolidated statements of cash flows ................................................................................................................................. 14(5) Notes to consolidated financial statements ........................................................................................................................... 16(Notes on premise of a going concern) ................................................................................................................................. 16(Changes in accounting policies) .......................................................................................................................................... 16(Segment information) .......................................................................................................................................................... 17(Per share data) ..................................................................................................................................................................... 19(Significant subsequent events) ............................................................................................................................................ 19

5.

Other ........................................................................................................................................................................................... 20

- 1 -

1.

Overview of Operating Results and Other(1) Overview of operating results for fiscal 2022
(Overview of the fiscal year under review)
Consolidated results of the Group for the fiscal year under review (January 1, 2022 to December 31, 2022)
were as follows:
Net sales
Operating income
Profit attributable to owners of parent¥53,738 million¥12,229 million¥9,236 million(up 10.3% year on year)(up 35.9% year on year)(up 45.0% year on year)

Looking at the economic environment during the current fiscal year, we saw companies continue to actively
harness the power of IT to change their operations, such as promoting digital transformation (DX),
implementing business reforms, and developing new digital services, despite global uncertainty, ongoinginflation, and the rapid depreciation of the yen. Companies are implementing teleworking as part of theirworkplace reform efforts, revamping their overall supply chains, and accelerating the use of IT in areas
related to ESG and the SDGs, and these things boost IT investments in all sectors and fields.
In terms of individual lifestyles, the use of IT-driven services, such as shopping at e-commerce sites, enjoying
entertainment and sports on video and online, and accessing education and self-development services online,
have spread widely.
Working against this backdrop, Future Corporation (the “Company”) won contracts for various types ofprojects from customers in a wide range of industries and made steady progress with a large-scale project.
As a result, consolidated net sales and profits for the current fiscal year increased year on year.
Details of the performance (net sales and operating income) of each segment are as follows.
1)

IT Consulting & Service Business
Future Architect, Inc. (including the Technology Division of Future Corporation) decided to introduce
a next-generation banking system to another regional financial institution, a project that will contributeto the Company’s medium- to long-term growth. The installation is the second of its kind. The Company
also worked on various projects as it continued to receive a steady stream of orders from a wide varietyof customers. These included the development of a fully automated system using AI and IoT technology
in the energy industry as well as a mission-critical system designed to accelerate digital commerce forthe apparel industry, and the revamping of customers’ IT infrastructures. In addition to that, theCompany made steady progress with the provision of sustainable DX assistance to various companies
in the logistics and other industries. This, as well as its ongoing efforts to ensure quality control, resulted
in an increase in net sales and operating income year on year.
Future Inspace, Inc. stably acquired commissioned maintenance and operation projects in cooperation
with Future Architect, Inc., and continued to receive orders for new development projects. As a result,net sales and operating income increased year on year.
Future One, Inc., undertook optimization in customizing “InfiniOne,” its original package software,
while strengthening channels with outside sales partners, etc. As a result, its net sales and operating
income increased year on year.
YDC Corporation endeavored to expand its customer base in the logistics field by providing uniqueknow-how to the Group’s customers. However, due to a decrease in SI projects, net sales and operating
income fell year on year.
Both net sales and operating income of dit Co., Ltd. rose year on year. The company received favorable
orders for vulnerability assessment, incident response, network security solution and other cybersecurity-related services, and made progress in the development of WADJET, an integration analytics
platform against cyberattacks.
As a result, the segment saw both net sales and operating income increase to reach 45,593 million yen(up 16.1% year on year) and 12,910 million yen (up 44.7% year on year) respectively.

- 2 -

2)

Business Innovation Business
YOCABITO CO., LTD. recorded lower-than-expected revenue since sales of winter apparel were
weaker than expected because of the weather conditions, and the outdoor goods market continued to befiercely competitive. The depreciation of the yen and a rise in purchase costs, etc. due to rising raw
material costs and logistics costs weighed on profit, resulting in a decrease in net sales and operating
income year on year.
CodeCamp, Inc. enjoyed an uptick in orders from corporate customers from which sales are expectedin the next fiscal year, but orders from individual customers fell in the current fiscal year as morecompetitors entered the market. As a result, net sales and operating income decreased year on year.
Tokyo Calendar Inc.’s sales were boosted by significant growth in magazine sales as a result of thestrengthened digital promotion and stable revenue from net services including Tokyo Calendar Date.
However, the company recorded costs associated with Gourmet Calendar, a new service that started in
January 2023, resulting in an increase in net sales but a decrease in operating income year on year.
LaiBlitz, Inc. saw an increase in system expansion demand from professional baseball teams that intend
to strengthen their team management, and also introduced FastBiz, a packaged membershipmanagement and e-commerce service, to several sports teams including a rugby team, leading to a yearon-year increase in both net sales and operating income.
As a result, the segment saw both net sales and operating income drop year on year, with net sales
totaling 8,274 million yen (down 13.8% year on year) and an operating loss standing at 272 million yen(down from an operating income of 413 million yen for the same period last year).
(Note) Segment results mentioned above are before adjustment for intersegmental sales and transfers.

(2) Overview of the financial position for fiscal 2022
(Assets, liabilities and net assets)
The following is the analysis of financial position for the fiscal year under review.
AssetsLiabilities
Net assets¥57,857 million¥13,030 million¥44,827 million(up 6.2% year on year)(up 2.7% year on year)(up 7.2% year on year)

The following is the analysis of financial position for the fiscal year under review.
1)

AssetsCurrent assets were 38,835 million yen on a consolidated basis at the end of the fiscal year under review,
up 6,723 million yen from the preceding year, and non-current assets amounted to 19,022 million yen,down 3,349 million yen, with total assets standing at 57,857 million yen, up 3,374 million yen. The
main factors included a decline in the market price of investment securities in investments and otherassets (down 4,840 million yen), offset mainly by an increase in cash and deposits (up 6,121 million
yen) that was boosted by increase in profit, an increase in software (up 1,076 million yen), and anincrease in notes and accounts receivable – trade and contract assets (up 1,328 million yen).

2)

Liabilities
Current liabilities were 9,860 million yen at the end of the fiscal year under review, up 1,954 million
yen from the preceding year, and non-current liabilities were 3,169 million yen, down 1,605 million
yen. Hence, total liabilities came to 13,030 million yen, up 348 million yen. The main factors included
a decrease in deferred tax liabilities (down 1,595 million yen year on year) due to a decline in the market
price of investment securities held, offset by an increase in other current liabilities (up 1,346 million),
an increase in accounts payable – other (up 318 million yen), and an increase in accounts payable trade (up 154 million).

3)

Net assets
Net assets were 44,827 million yen at the end of the fiscal year under review, up 3,025 million yen fromthe preceding year. The main factors included a decrease in valuation difference on available-for-salesecurities (down 3,588 million yen), offset by an increase in retained earnings (up 6,556 million yen).

- 3 -(3) Overview of cash flows for fiscal 2022
The following is the analysis of the Group’s consolidated cash flows for the fiscal year under review.
1)

Net cash provided by (used in) operating activities
Net cash from operating activities saw an inflow of 10,174 million yen in total (compared with an
inflow of 9,611 million yen in the previous fiscal year), chiefly due to the posting of profit before
income taxes of 13,266 million yen and depreciation of 1,201 million yen, despite income taxes paid
amounting to 3,972 million yen.

2)

Net cash provided by (used in) investing activities
Net cash from investing activities saw an outflow of 1,009 million yen (compared with an outflow of
1,689 million yen in the previous fiscal year), chiefly due to the posting of purchase of intangible assetsof 1,693 million yen, and purchase of investment securities of 989 million yen, offset mainly byproceeds from sale of investment securities of 1,432 million yen.

3)

Net cash provided by (used in) financing activities
Net cash from financing activities saw an outflow of 3,017 million yen (compared with an outflow of
2,498 million yen in the previous fiscal year), mainly reflecting cash dividends paid of 2,756 million
yen.

4)

Cash and cash equivalents at the end of the period
Cash and cash equivalents at the end of the fiscal year under review stood at 27,552 million yen, withan increase of 6,121 million yen resulting from operating, investing and financing activities.

(4) Future outlook
The Group’s earnings forecast for the fiscal year ending December 31, 2023 is as follows.
Net sales
Operating income
Profit attributable to owners of parent¥59,500 million¥13,800 million¥9,660 million(up 10.7% year on year)(up 12.8% year on year)(up 4.6% year on year)

In the medium to long term, corporations will continue making aggressive investments in information
technology as they move toward DX and adapt to changes in the ways people work, such as remote working,as well as address economic and social issues, including ESG factors and the SDGs.
The Group will strive to accurately grasp the needs of companies promoting these management reforms
through IT, then leverage Group synergies to provide active and multilateral support in an effort to gain evenfurther support from customers in many and diverse industries.
As an effort related to ESG and SDG themes, which are of growing concern, the Group has been disclosing
the GHG emissions since September 2022. In addition to an effort to grasp the change in emissions due tothe work style shift to teleworking, the Group has taken advanced actions including the launch of Future
Sustainatopia that utilizes Group Company LaiBlitz, Inc.’s metaverse platform. We will continue to promote
our measures concerning ESG and the SDGs, and support customers’ environmental and decarbonization
efforts.
Furthermore, by making effective use of intellectual property and conducting flexible strategic investments
including M&As as the Group, we will evolve our business model and achieve further growth from the next
fiscal year onward. In addition, the Group will also invest in its business foundation with a view to the future,such as continuous personnel recruitment and training and R&D. In tandem with this, the Group will
strengthen its governance by strengthening internal communication within the Group and further improving
the accuracy of its quality management.
Noteworthy events in each business segment are as follows.

- 4 -

1)

IT Consulting & Service Business
Future Architect, Inc. has received orders for grand designs from customers implementing management
reforms and core system renewals from diverse industries conscious of the advancement of DX. The
company will ensure the implementation of these projects, while striving to acquire more orders fromcompanies with investment demand, for example by providing customers with DX professional
development programs. It will also strengthen its provision of IT solutions that will contribute to solving
long-standing issues facing an entire industry, such as a next-generation banking system for the regional
financial sector and GlyphFeeds for the media sector, and bolster its initiatives aimed at medium- tolong-term success, such as supporting the realization of digitally sophisticated corporate strategies as awhole. Furthermore, it will enhance its organizational capabilities as a leader of the next generation
through emphasizing the acquisition of excellent talented people, investment in training, quality control
and project management.
Future Inspace, Inc. has started working on a number of system infrastructure renewal and cloud
migration projects for existing customers and expects the scale of these projects to expand until around2023. The company will continue to enhance the quality of its development work and train employeeswith an eye to ensuring steady project implementation and continuously increasing revenue.
YDC Corporation will focus on proposing smart factory solutions to the manufacturing industry andstepping up efforts to propose solutions to new and existing customers by introducing such solutions topilot customers, while in the logistics area, it will aim to acquire new projects by taking further
advantage of the Group synergy.
In addition, the Company released CPQ SaaS, a cloud-based solution for product configuration andquoting, and also launched “Manufacture GX,” a green transformation assistance service for the
manufacturing industry to help realize sustainable growth of manufacturers and a carbon-neutral
society. Through these efforts, the company will strive to increase revenue further.
Future One, Inc. will leverage the strength of its original InfiniOne software package to boost orders
through industry-specific sales strategies and enhance its product lineup all with an eye to higher
revenue.
In order to further enhance its capability to respond to the security lifecycle of companies, dit Co., Ltd.
will strengthen its human resources through recruitment activity and internal training, and promote theprovision of its managed EDR* service and security awareness training service, which are in especiallyhigh demand, for further revenue growth.
* Endpoint Detection and Response (EDR): An endpoint security solution that combines continuous
monitoring and response capabilities

2)

Business Innovation Business
YOCABITO CO., LTD. will further enhance its brand awareness through flagship store promotion,etc., and attract more customers to both the EC site and real stores with an addition of another EC sitethat opened in January, striving to increase profitability.
CodeCamp, Inc. will enhance its service for corporate customers in consideration of the market needs
including DX professional development and reskilling, and continue to focus on growing web-design
service for individual customers, aiming to receive more orders.
In January 2023, Tokyo Calendar Inc. started pre-launch operation of Gourmet Calendar, a restaurant
reservation service that works with its monthly magazine. We will strive to grow Gourmet Calendar,with hopes of positioning the service as another pillar of revenue. Tokyo Calendar Inc. also has been
active in the development for active use of user data, aiming to enhance digital promotion for further
profitability.
LaiBlitz, Inc. promotes the use of FastBiz, a packaged membership management and e-commerce
service, in revitalizing the local community. It also started a community service using a metaverse
platform “MetaStation,” allowing a space where companies can provide various services, aiming for
further profitability.

- 5 -(5) Dividend policy and dividends for the current and next year
The Company determines its dividend by comprehensively taking into account the state of its accounting
period profit and loss, cash flows and treasury stock purchasing while placing shareholder return as its
priority management issue and securing a proper level of internal reserves for the organization to continue
growing in a sustainable manner.
The Company plans to apply a dividend payout ratio standard of at least 35% of consolidated earnings.
Under the above-mentioned policy, we plan to pay a total dividend of 20.00 yen per share as a year-end
dividend from surplus. The full fiscal year dividend comprising the year-end dividend and the previously
paid interim dividend is expected to be 37.00 yen per share (consolidated dividend payout ratio of 35.5%).
Under the above-mentioned policy, we plan to pay an annual dividend of 40.00 yen per share (year-end
dividend of 20.00 yen and interim dividend of 20.00 yen , consolidated dividend payout ratio of 36.7%) asa dividend from surplus for the next fiscal year.

- 6 -

2.

The Future GroupThe Group (the Company and its related companies) has introduced a holding company structure, and consistsof 19 consolidated subsidiaries and four equity-method affiliates as of December 31, 2022.
The Company, as a holding company, establishes the Group’s growth strategy, monitors management of theGroup companies, and provides specialty services to these companies. Details of the business segments of theGroup and how major related companies in charge are positioned in the relevant segment are as follows.
(IT Consulting & Service Business)
In this business, the Group helps clients solve problems, by sharing management issues with them from amanagerial perspective, understanding the essence of the clients’ businesses and establishing information
systems for them using advanced IT.
Company name
Future Architect, Inc. (subsidiary)
Future Inspace, Inc. (subsidiary)
YDC Corporation (subsidiary)
Future One, Inc. (subsidiary)Business activities
Provision of IT consulting services from an objective andindependent standpoint by using leading-edge information
technology
Additional development as well as maintenance and operation
services for projects primarily developed by Future Architect, Inc.
Provision of IT consulting services, including a solution for
integrating and analyzing quality information, mainly to customers
in the manufacturing business
Development, sales and maintenance of mission-critical packaged
software for sales management, production management, accounting
and other processes as well as provision of cloud-based services

dit Co., Ltd. (subsidiary)

Security consulting and forensic services
Sales of products for network operations and security

Innovation Laboratory, Inc. (subsidiary)

Provision of management consulting services to create innovation

Logizard Co., Ltd. (affiliate)

Development and sales of and support for cloud-based logistics andinventory management software (warehouse management system or
WMS)(Business Innovation Business)
In this business, the Group provides original services using IT and creates business innovations.
Company nameBusiness activities

YOCABITO CO., LTD. (subsidiary)

Sales of sports, outdoor and fitness gear on the Internet

Tokyo Calendar Inc. (subsidiary)

Publication of the magazine “Tokyo Calendar,” provision of
information using websites and smartphone applications, andservices including reservations for tables at restaurants

CodeCamp, Inc. (subsidiary)

Online and offline educational service including operation of theonline programming school “CodeCamp”

LaiBlitz, Inc. (subsidiary)

Development of software related to sports and entertainment andoperation of online services

Among affiliated companies engaged in businesses that are not included in the two businesses mentioned
above, such as investing in, as well as holding and managing securities, the main companies are as follows:• Major affiliated company
Future Investment Corp. (subsidiary)
3.

Basic Approach to Selection of Accounting Standards
Taking into consideration the comparability of consolidated financial statements among enterprises, the Groupprepares consolidated financial statements under Japanese GAAP.
The Company intends to adopt International Financial Reporting Standards (IFRS) appropriately inconsideration of circumstances inside and outside of Japan.

- 7 -

4.

Consolidated Financial Statements and Major Notes(1) Consolidated balance sheets(in millions of yen)Previous consolidated
fiscal year
(December 31, 2021)

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable – trade
Notes and accounts receivable – trade, and contract
assetsSecurities
Merchandise and finished goods
Work in process
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation
Buildings and structures, net
Land
Other
Accumulated depreciation
Other, net
Total property, plant and equipment
Intangible assets
Goodwill
Software
Customer-related assets
Other
Total intangible assets
Investments and other assets
Investment securities
Lease and guarantee deposits
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets- 8 -Consolidated fiscal year
under review(December 31, 2022)

20,5307,220

26,652
-

-

8,549

1,900
1,230
9
1,224
(3)
32,112

1,000
1,116
22
1,498
(3)
38,835

1,685(1,003)682
0
2,969(2,497)
471
1,155

1,815
(1,142)673
0
3,107(2,703)
404
1,078

10
1,915
208
4
2,138

661
2,992
5
3,659

17,697
1,175
19
261
(75)
19,07822,371
54,483

12,856
1,188
244
(4)
14,28419,02257,857(in millions of yen)Previous consolidated
fiscal year
(December 31, 2021)
Liabilities
Current liabilities
Accounts payable – trade
Accounts payable – other
Income taxes payable
Provision for bonuses
Provision for quality assurance
Provision for loss on projects
Other
Total current liabilities
Non-current liabilities
Asset retirement obligations
Deferred tax liabilities
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Total accumulated other comprehensive income
Total net assets
Total liabilities and net assets- 9 -Consolidated fiscal year
under review(December 31, 2022)

913
1,491
2,215
243
34
3,007
7,906

1,067
1,810
2,280
250
60
37
4,354
9,860

350
4,278
147
4,775
12,682

356
2,682
130
3,169
13,0304,000
29,299(2,221)
31,0784,000
3735,856(2,210)37,683

10,7111
9
10,72341,801
54,483

7,123
(5)
25
7,143
44,82757,857

(2) Consolidated statements of income and comprehensive income(in millions of yen)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Directors’ compensations
Salaries and bonuses
Other salaries
Rents
Training expenses
Research and development expenses
Depreciation
Recruiting expenses
Amortization of goodwill
Other
Total selling, general and administrative expenses
Operating income
Non-operating income
Dividend income
Share of profit of entities accounted for using equity
methodOther
Total non-operating income
Non-operating expenses
Foreign exchange losses
Loss on retirement of non-current assets
Loss on investments in investment partnerships
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sale of shares of subsidiaries and associates
Gain on sale of investment securities
Total extraordinary income
Extraordinary losses
Loss on valuation of investment securities
Amortization of goodwill
Total extraordinary losses
Profit before income taxes

Previous consolidated
fiscal year
(From January 1, 2021
to December 31, 2021)
48,69826,14422,553

Consolidated fiscal year
under review(From January 1, 2022
to December 31, 2022)
53,73827,08326,655

571
5,589
282
1,096
609
601
366
466
39
3,929
13,553
9,000

567
6,086
295
945
615
980
444
767
44
3,677
14,426
12,229

229

338

30

61

31
291

15
415

2
0
2
9,289

30
3
34
2
70
12,574

6
0
7

732
732

23
88
112
9,185

40
40
13,266- 10 -

(in millions of yen)

Income taxes – current
Income taxes – deferred
Total income taxes
Profit(Breakdown)
Profit attributable to owners of parent
Profit attributable to non-controlling interests
Other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income
Comprehensive income(Breakdown)Comprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests

Previous consolidated
fiscal year
(From January 1, 2021
to December 31, 2021)
2,898
(109)
2,788
6,396

Consolidated fiscal year
under review(From January 1, 2022
to December 31, 2022)
4,028
1
4,029
9,236

6,369
27

9,236
-

(517)
5
0

(3,588)
(6)
15

(4)

0

(516)
5,880

(3,579)
5,657

5,853

5,657

27

-

- 11 -

(3) Consolidated statements of changes in net assets
Previous consolidated fiscal year (from January 1, 2021 to December 31, 2021)(in millions of yen)
Shareholders’ equity
Capital stock
Balance at the beginningof the period

Capital surplus

4,000

Retained earnings
21

Total shareholders’equityTreasury shares

25,150(2,235)26,936

Changes of items during
the period
Dividends from surplus(1,902)(1,902)

Profit attributable toowners of parent

6,369

6,369

Purchase of treasury
shares

(0)

(0)

14

44

Disposal of treasury
shares30

Purchase of shares of
consolidated
subsidiaries

(51)

(317)

-

(21)

4,149

14

4,142

4,000

-

29,299(2,221)

31,078(369)

Net changes of items
other thanshareholders’ equity
Total changes of items
during the period
Balance at the end of theperiodAccumulated other comprehensive income

Balance at the beginningof the period

Valuationdifference on
available-for-salesecurities

Deferred gains orlosses on hedges

Foreign currencytranslation
adjustment

Total accumulated
othercomprehensive
incomeNon-controllinginterests

Total net assets

11,229(4)

13

11,23953

38,228Changes of items during
the period
Dividends from surplus(1,902)

Profit attributable toowners of parent

6,369

Purchase of treasury
shares(0)

Disposal of treasury
shares44

Purchase of shares of
consolidated
subsidiaries(369)

Net changes of items
other thanshareholders’ equity

(517)

5

(4)

(516)

(53)

(569)

Total changes of items
during the period

(517)

5

(4)

(516)

(53)

3,572

Balance at the end of theperiod10,7111

9

10,723-41,801- 12 -

Consolidated fiscal year under review (from January 1, 2022 to December 31, 2022)(in millions of yen)
Shareholders’ equity
Capital stock
Balance at the beginningof the period

Capital surplus

4,000

Retained earnings-

Cumulative effects due
to changes inaccounting policies
Balance at the beginningof the current fiscal year
reflecting changes inaccounting policies

Total shareholders’equityTreasury shares

29,299(2,221)

31,078

64

4,000

-

29,36464(2,221)

31,142

Changes of items during
the period
Dividends from surplus(2,744)(2,744)

Profit attributable toowners of parent

9,236

9,236

Purchase of treasury
shares
Disposal of treasury
shares

37

(0)

(0)

10

48

Net changes of items
other thanshareholders’ equity
Total changes of items
during the period
Balance at the end of theperiod

-

37

6,492

10

6,540

4,000

37

35,856(2,210)37,683

Accumulated other comprehensive income
Valuation difference
Deferred gains or losses
Foreign currency
on available-for-saletranslation adjustment
on hedges
securities
Balance at the beginningof the period

10,711

1

9

Total accumulated
other comprehensive
income10,723Cumulative effects due
to changes inaccounting policies
Balance at the beginningof the current fiscal year
reflecting changes inaccounting policies

Total net assets

41,80164

10,7111

9

10,72341,865

Changes of items during
the period
Dividends from surplus(2,744)

Profit attributable toowners of parent

9,236

Purchase of treasury
shares(0)

Disposal of treasury
shares48

Net changes of items
other thanshareholders’ equity(3,588)(6)

16(3,579)(3,579)Total changes of items
during the period(3,588)(6)

16(3,579)2,961

Balance at the end of theperiod

7,123

(5)

25

7,143

44,827- 13 -

(4) Consolidated statements of cash flows(in millions of yen)Previous consolidated
fiscal year
(From January 1, 2021
to December 31, 2021)
Net cash provided by (used in) operating activities
Profit before income taxes
Depreciation
Amortization of goodwill
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for quality assurance
Increase (decrease) in provision for loss on projects
Interest and dividend income
Interest expenses
Share of (profit) loss of entities accounted for using
equity method
Loss (gain) on investments in investment partnerships
Foreign exchange losses (gains)
Loss (gain) on sale of shares of subsidiaries andassociates
Loss (gain) on sale of investment securities
Loss (gain) on valuation of investment securities
Decrease (increase) in notes and accounts receivable –trade
Decrease (increase) in notes and accounts receivable –trade and contract assets
Decrease (increase) in inventories
Increase (decrease) in accounts payable – trade
Increase (decrease) accounts payable – other
Decrease (increase) in other assets
Increase (decrease) in other liabilities
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities- 14 -

Consolidated fiscal year
under review(From January 1, 2022
to December 31, 2022)

9,185
1,018
128
(3)
(13)
(27)
(13)
(231)
0

13,266
1,201
44
(71)
6
25
37
(340)
0

(30)

(61)

2

34
41

(6)

-

(0)
23

(732)
40

722

-

-

(1,268)

(148)
(115)
182
29
126
10,827233(0)(1,449)
9,611

111
136
299
(60)
1,083
13,793354(0)(3,972)
10,174(in millions of yen)Previous consolidated
fiscal year
(From January 1, 2021
to December 31, 2021)
Net cash provided by (used in) investing activities
Purchase of securities
Proceeds from redemption of securities
Purchase of property, plant and equipment
Purchase of intangible assets
Payments for asset retirement obligations
Purchase of shares of subsidiaries resulting in change
in scope of consolidation
Proceeds from sale of shares of subsidiaries andassociates
Proceeds from liquidation of subsidiaries andassociates
Purchase of investment securities
Proceeds from sale of investment securities
Proceeds from redemption of investment securities
Payments for investments in capital
Payments for lease and guarantee deposits
Proceeds from collection of lease and guarantee
deposits
Proceeds from sale of golf membership
Other
Net cash provided by (used in) investing activities
Net cash provided by (used in) financing activities
Repayments of short-term loans payable
Repayments of long-term loans payable
Repayments of finance lease obligations
Purchase of shares of subsidiaries not resulting inchange in scope of consolidation
Cash dividends paid
Other
Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the period
Cash and cash equivalents at the end of the period- 15 -

Consolidated fiscal year
under review(From January 1, 2022
to December 31, 2022)(1,102)
200
(274)
(748)
(43)

(1,100)2,000(76)(1,693)
(1)

-

(509)

13

-

19

-

(40)
3
(15)

(989)
1,432
200
(279)
(6)

276

11

19
3
(1,689)3(1,009)

(3)
(142)

(13)
(74)
(172)

(450)

-

(1,902)(0)(2,498)(2,756)(0)(3,017)

(3)

(26)

5,419
16,01021,4306,121
21,43027,552

(5) Notes to consolidated financial statements(Notes on premise of a going concern)
Not applicable.
(Changes in accounting policies)(Adoption of Accounting Standard for Revenue Recognition, etc.)
The Group has adopted the “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29,
March 31, 2020) and relevant ASBJ regulations effective from the beginning of the current fiscal year,
and it now recognizes revenue at the time the control of promised goods or services is transferred to thecustomer in the amount expected to be received upon exchange of said goods or services.
The Group conducted the principal-versus-agent assessment and found that it met the definition of theagent in some of the IT Consulting & Service Business segment’s maintenance and operation services.
Hence, the Group now recognizes revenue as the net amount.
For sales of the Group’s software licenses as well as server equipment and other products that comewith maintenance services, the Group now recognizes revenue from contracts in which it does not havea performance obligation to be fulfilled over time, such as maintenance services, at the time of sales,
and recognizes revenue from contracts that come with maintenance services over the contract term
during which the Group has a performance obligation, separately from contracts for sale of goods.
In addition, the Group previously recognized coupons it issued and points paid to other companies in
its e-commerce and mail-order business as selling, general and administrative expenses, but now
recognizes revenue by deducting these items from net sales. The Group also previously deductedshipping fees paid by customers from selling, general and administrative expenses, but now recognizes
them as revenue since the shipping service is included in the performance obligation to provide products
and reports shipping fees paid for the service as cost of sales instead of selling, general andadministrative expenses as it previously did.
The adoption of the Accounting Standard for Revenue Recognition and relevant ASBJ regulations issubject to the transitional treatment provided for in the proviso to paragraph 84 of the AccountingStandard for Revenue Recognition. The cumulative effect of the retrospective adoption, assuming the
new accounting policy had been adopted to periods prior to the start of the current fiscal year, wasadded to or subtracted from the opening balance of retained earnings of the current fiscal year, and thus
the new accounting policy was adopted from such opening balance. However, in accordance with themethod provided for in paragraph 86 of the Accounting Standard for Revenue Recognition, the new
accounting policy was not adopted retrospectively to contracts for which almost all revenue amounts
were recognized using the previous treatment prior to the beginning of the current fiscal year.
As a result, net sales, cost of sales, and selling, general and administrative expenses for the current
fiscal year respectively decreased by 2,374 million yen, 1,257 million yen, and 930 million yen.
Operating income, ordinary income, and profit before income taxes also decreased by 186 million yen.
Net asset per share and profit per share decreased by 0.74 yen and 1.47 yen, respectively. The opening
balance of retained earnings increased by 64 million yen.
Due to the adoption of the Accounting Standard for Revenue Recognition, etc., “notes and accounts
receivable – trade,” which were included in “current assets” in the consolidated balance sheet for theprevious fiscal year, are included in “notes and accounts receivable – trade, and contract assets”
effective from the current fiscal year. “Decrease (increase) in notes and accounts receivable – trade,”which were included in “cash flows from operating activities” in the consolidated balance sheet for theprevious fiscal year, are included in “decrease (increase) in notes and accounts receivable – trade andcontract assets” effective from the current fiscal year. In accordance with the transitional treatmentprescribed in paragraph 89-2 of the Accounting Standard for Revenue Recognition, no reclassification
has been made to the consolidated financial statements for the previous fiscal year to conform to thenew presentation method.
(Adoption of Accounting Standard for Fair Value Measurement, etc.)
The Group has adopted the “Accounting Standard for Fair Value Measurement” (ASBJ Statement No.
30, July 4, 2019 ) and relevant ASBJ regulations from the beginning of the current fiscal year, and it
has adopted the new accounting policy provided for by the Accounting Standard for Fair Value
Measurement, etc. prospectively in accordance with the transitional measures provided for in paragraph
19 of the Accounting Standard for Fair Value Measurement, and paragraph 44-2 of the “AccountingStandard for Financial Instruments” (ASBJ Statement No. 10, July 4, 2019). This change has no effecton the consolidated financial statements.
- 16 -

(Segment information)[Segment information]
1. Overview of reportable segments
The reportable segments of the Group are constituent units of the Company for which separate
financial information can be obtained, and the Board of Directors examines such information on aregular basis to determine the allocation of management resources and evaluate businessperformance.
The Group defines the classification of business segments by comprehensively taking into accountmain services, solutions, customers and markets, and has two reportable segments: the IT
Consulting & Service Business and Business Innovation Business.
The business operations of the two reportable segments are as follows:
Reportable segments

Business operations

IT Consulting & Service BusinessIn this business, the Group helps clients solve problems, by sharing management
issues with them from a managerial perspective, understanding the essence of theclients’ businesses and establishing information systems for them using advanced
IT.

Business Innovation BusinessIn this business, the Group provides original services using IT and createsbusiness innovations.

2. Methods of calculating net sales, income or loss, assets, liabilities, and other items by reportablesegment
The accounting method applied to the above-mentioned business segments is a method in
accordance with the accounting policy applied to the preparation of the consolidated financial
statements.
Income of reportable segments is based on operating income.
Intersegment sales and transfers are based on market prices.

- 17 -

3. Information on the amounts of net sales, profit or loss, assets, liabilities, and other items byreportable segment
Previous consolidated fiscal year (from January 1, 2021 to December 31, 2021)(in millions of yen)
Reportable segments
IT Consulting Business
Innovation& ServiceBusiness
Business

Other(Note 1)

Total

Total

Adjustments(Note 2)

Amount stated in
the financial
statements(Note 3)

Net sales
Sales to outside clients

39,1609,521

48,682

16

48,698-48,698Intersegment sales ortransfer

98

74

172

270

443

(443)

48,69839,2589,596

48,854286

49,141(443)

Segment profit

Total

8,925

413

9,338

262

9,600

(600)

9,000

Segment assets

23,5183,521

27,0394,518

31,55722,92654,483

935

64

999

5

1,004

13

1,018

128

-

128

-

128

-

128

Other items
Depreciation
Amortization of
goodwill

Increase in property,
plant and equipment
859
162
1,021
19
1,040
99
1,140
and intangible assets(Notes)1. “Other” is a segment for operations not included in reportable segments. The segment covers investment in, holdingof, and management of securities.
2. Adjustments to segment profit and segment assets represent the amount of intersegment transactions eliminated andincome, expenses and assets of the holding company excluding the technology segment.
3. Segment profit is adjusted with operating income in consolidated financial statements.

Consolidated fiscal year under review (from January 1, 2022 to December 31, 2022)(in millions of yen)
Reportable segments
IT Consulting Business
Innovation& ServiceBusiness
Business

Other(Note 1)

Total

Total

Adjustments(Note 2)

Amount stated in
the financial
statements(Note 3)

Net sales
Sales to outside clients

45,487

8,204

53,691

46

53,738-53,738Intersegment sales ortransfer

106

69

176

381

558

(558)

-

Total

45,5938,274

53,868428

54,296(558)

53,738Segment profit (loss)

12,910(272)

12,638(72)

12,566(336)

12,229Segment assets

30,323

4,457

34,7806,200

40,981

16,87657,857

Depreciation

1,021

115

1,137

16

1,153

47

1,201

Amortization of
goodwill

10

34

44

-

44

-

44

Other items

Increase in property,
plant and equipment
1,722
204
1,926
18
1,944
25
1,970
and intangible assets(Notes)1. “Other” is a segment for operations not included in reportable segments. The segment covers investment in, holdingof, and management of securities.
2. Adjustments to segment profit (loss) and segment assets represent the amount of intersegment transactions
eliminated and income, expenses and assets of the holding company excluding the technology segment.
3. Segment profit (loss) is adjusted with operating income in consolidated financial statements.
4. As stated in Changes in accounting policies, the Company has adopted the Accounting Standard for Revenue
Recognition and relevant ASBJ regulations from the beginning of the fiscal year ended December 31, 2022 andchanged the accounting method of revenue recognition. Accordingly, the Company also changed the method to
calculate profit and loss by business segment.

- 18 -

(Per share data)
Previous consolidated fiscal year
(From January 1, 2021 to December
31, 2021)

Consolidated fiscal year under review(From January 1, 2022 to December
31, 2022)

Net assets per share¥472.19¥506.20

Profit per share¥71.97¥104.32(Notes)

1. Diluted profit per share is not recorded because there are no potential shares.
2. The Company conducted a two-for-one stock split of its common stock on January 1, 2022. Net assets per share and profit per
share are computed based on the assumption that the stock split was conducted at the beginning of the previous fiscal year.
3. Profit per share is calculated based on the following:

Previous consolidated fiscal year
(From January 1, 2021 to December
31, 2021)

Consolidated fiscal year under review(From January 1, 2022 to December
31, 2022)

Profit attributable to owners of parent(millions of yen)

6,369

9,236

Amount not attributable to commonshareholders (millions of yen)

-

-

6,369

9,236

88,509,695

88,546,007

Profit per share

Profit attributable to owners of parent
related to common stock (millions of yen)
Average number of outstanding shares
during the period under review (share)(Significant subsequent events)
Not applicable.

- 19 -

5.

Other
Orders received(in millions of yen)

Category

Previous consolidated fiscal year
(From January 1, 2021 to December 31,
2021)

Consolidated fiscal year under review(From January 1, 2022 to December 31,
2022)

Orders received

Orders received

Order backlog

Order backlog

IT Consulting & Service Business

41,280

11,63647,957

14,106

Business Innovation Business

2,246

306

2,911

703

43,526

11,94250,86814,809

Total

Category

Third quarter of the consolidated fiscal
year under review(from July 1, 2022 to September 30, 2022)
Orders received

IT Consulting & Service BusinessBusiness Innovation Business
Total

Order backlog

Fourth quarter of the consolidated fiscal
year under review(from October 1, 2022 to December 31,
2022)
Orders received

Order backlog

11,47015,805

10,051

14,106

535

352

1,182

703

12,006

16,157

11,23314,809- 20 -