Consolidated Financial Results for the Fiscal Year Ended March 31, 2022 (JGAAP)May 13, 2022
Company name:
Tsuzuki Denki Co., Ltd.
Listing Stock Exchange: Tokyo
Stock code:
8157
URL: https://www.tsuzuki.co.jp/
Representative (title): Isao Emori, Representative Director, President and CEO
Contact (title):
Toshihiro Hirai, Director and Managing Executive Officer
Tel: +81-50-3684-7780
Scheduled date of general shareholders’ meeting:June 28, 2022
Scheduled date for dividend payment:
June 7, 2022
Scheduled date for filing consolidated financial statements:
June 28, 2022
Preparation of supplemental explanatory materials:
Yes
Results briefing to be held:
Yes (for institutional investors and securities analysts)
1. Consolidated financial results for the fiscal year ended March 31, 2022
(April 1, 2021, to March 31, 2022)(1) Consolidated operating results

Net sales

Millions of yen (rounded down), % figures are year-on-year change
Profit attributable toOperating income
Ordinary income
owners of parent

Year ended
119,316(0.6%)
4,012
25.3
4,227
25.8%
2,798
19.2%
March 31, 2022
Year ended
120,004(4.3%)
3,202(28.2%)
3,361(26.6%)
2,346(25.6%)March 31, 2021
Note: Comprehensive income was 2,806 million yen (+30.0%) in year ended March 31, 2022; 2,157
million yen (+32.1%) in year ended March 31, 2021.
Earnings
per share(yen)

Dilutedearnings per
share (yen)Ratio of profit toshareholders’equityRatio ofordinary
income to total
assetsRatio ofoperatingincome tonet salesYear ended
158.47
—
8.8%
5.4%
3.4%
March 31, 2022
Year ended
134.06
—
7.7%
4.4%
2.7%
March 31, 2021
Reference: Equity in earnings affiliates in year ended March 31, 2022, nil; in year ended March 31, 2021,
nil.
(2) Consolidated financial position
Total assets
Net assets
Shareholders’
Net assets per(millions of yen)(millions of yen)equity ratio
share (yen)Year ended
79,22633,19941.5%
1,853.68
March 31, 2022
Year ended
76,20031,17140.6%
1,760.87
March 31, 2021
Reference: Shareholders’ equity in year ended March 31, 2022, 32,847 million yen; in year ended March
31, 2021, 30,934 million yen.

1(3) Consolidated cash flows
Millions of yen
Cash and cash
equivalents at endof yearCash flows fromoperating activities

Cash flows frominvesting activities

Cash flows fromfinancing activities

5,560

(4)

(2,413)

19,130749(1,271)(2,029)15,927

Year ended
March 31, 2022
Year ended
March 31, 2021

2. Dividends
Dividends per share for the fiscal year (yen)End offirstquarter

End ofsecondquarter

End ofthird
quarterYearend

Total

Total
annualdividend
payment(millionsof yen)Dividend
payoutratio(consolidated)

Ratio ofdividend
payout tonetassetsYear ended
—
15.00
—
31.00
46.00
853
34.3%
2.7%
March 31, 2021
Year ended
—
23.00
—
25.00
48.00
894
30.3%
2.7%
March 31, 2022
Year ended
—
25.00
—
25.00
50.00
32.1%
March 31, 2023
Note:
1.The interim dividend for the year ended March 31, 2021 included a commemorative dividend of 5.0 yen
per share to mark the transfer of the Company’s listing to the first section of the Tokyo Stock Exchange.
2. The interim dividend for the year ended March 31, 2023 included a commemorative dividend of 2.0 yen
per share to celebrate 90th Anniversary of its founding.

3. Forecast of consolidated financial results for the fiscal year ending March 31, 2023
(from April 1, 2022 to March 31, 2023)% figures are year-on-year change
Profit attributable to Earnings
Net sales
Operating income Ordinary income
owners of parent
per share(millions of yen)(millions of yen)(millions of yen)(millions of yen)
(yen)
Full year

120,000

0.6%

4,000

(0.3%)

4,130(2.3%)

2,760(1.4%)

Note: The Company manages earnings on an annual basis, so does not disclose first-half earnings
forecasts.

2

155.76

*Notes(1) Changes in significant subsidiaries (which affected the scope of consolidation) during the fiscal year:
None
Newly added ___ companies (names)
No longer consolidated ___ companies (names)(2) Changes in accounting policies, changes in accounting estimates, and restatements
1. Changes in accounting policies due to changes in accounting standards:
2. Changes in accounting policies not due to changes in accounting standards:
3. Changes in accounting estimates:
4. Restatements:(3) Number of shares outstanding (common stock)
1. Number of shares outstanding at
Year ended
year end (including treasury
March 31, 2022
stock)

Yes
None
None
None

Year ended
March 31,
22,177,894
2021
Year ended
2. Number of shares at year end
Year ended
2,457,908
March 31,2,610,056(treasury stock)
March 31, 2022
2021
Year ended
3. Average number of shares overYear ended
17,656,165
March 31,
17,502,032
the period
March 31, 2022
2021
Note: The number of treasury shares includes those held in the Employee Stock Ownership Plan (ESOP)
trust account (121,000 in year ended March, 2022; 210,100 in year ended March 2021), Directors’Compensation Board Incentive Plan (BIP) trust account (346,034 in year ended March 2022; 380,905 inyear ended March 2021) and Stock-grant ESOP trust account (458,056 in year ended March 2022;
486,750 in year ended March 2021).
20,177,894*The financial information in this report is not subject to audit by certified public accountants or auditing
firms.
*Appropriate use of earnings forecast and other special notes.
(Note on forward-looking statements)
The earnings forecasts and other forward-looking statements contained in this document are based on
information currently available to the Company, and certain assumptions it considers reasonable, but are
not intended to be a promise that the Company will achieve. Actual results may vary materially fromforecasts due to a variety of factors.
(How to obtain supplementary explanatory materials for financial results and results briefing materials.)
The Company plans to hold a results briefing for institutional investors and analysts on Thursday, May 25,
2022. The briefing materials distributed will be posted on the Company’s website promptly after thebriefing.

3

(Attachment)

Contents
1. Overview of results ............................................................................................................................. 5(1) Earnings ............................................................................................................................................. 5(2) Financial position .............................................................................................................................. 9(3) Cash flows ......................................................................................................................................... 9(4) Outlook ............................................................................................................................................. 10(5) Dividend policy and dividends for the year under review and coming year .......................... 11
2. Approach to selection of accounting standards ....................................................................... 11
3. Consolidated financial statements and notes ........................................................................... 12(1) Consolidated balance sheet ......................................................................................................... 12(2) Consolidated statements of income and comprehensive income .......................................... 15(3) Consolidated statement of changes in net assets..................................................................... 17(4) Consolidated statement of cash flows ........................................................................................ 21(5) Notes to consolidated financial statements ................................................................................ 23(Notes on premise of going concern) .......................................................................................... 23(Changes in accounting policies) .................................................................................................. 23(Additional information) ................................................................................................................. 24(Segment and other information) ................................................................................................. 26(Per share information) .................................................................................................................. 31(Major subsequent events) ........................................................................................................... 31

4

1. Overview of results(1) Earnings
During the full year ended March 31, 2022, the Japanese economy showed signs of recovery from theimpact of COVID-19, but the outlook is becoming increasingly uncertain due to the growing tension in
Ukraine. We are still cautious about downside risks to the economy due to the effects of such factors as
rising raw material prices, fluctuations in financial and capital markets, and supply-side constraints.
Our Group belongs to the information and communications services industry. While we expect ICT
demand to continue to grow driven by various digital transformation (DX) initiatives, including pandemicinduced changes in work practices, there is no room for optimism as some companies continue to rein in
their ICT capex due to deteriorated earnings. The electronic device industry performed well as
semiconductor demand grew further due to a shift toward electric vehicles in the automobile industry andgrowing investment in data centers.
In these circumstances, our Group is carrying out the initiatives outlined in our medium-term
management plan ending in the year ending March 2023, Innovation 2023, as part of our aim to support
the DX efforts of client companies and to be more competitive by becoming an innovation service provider.
We see the COVID-19 pandemic as a turning point, and are continuing with initiatives aimed atsustainable growth and enhancing corporate value by reforming our business structure and strengthening
our management base. During the fourth quarter of the current fiscal year, we newly released D-VUE DX
Implementation Support Service and D-VUE Cloud Data Lake Platform, which leverage data to promote
the DX initiatives of client companies. In addition, we made steady progress in our efforts to help clientcompanies realize DX, including receiving certification as a DX business operator by the Ministry of
Economy, Trade and Industry.
In the full year of the fiscal year ended March 31, 2022, which is the second year of the medium-term
management plan, the Group posted net sales of ¥119,316 million (down 0.6% year on year), operating
income of ¥4,012 million (up 25.3% year on year), ordinary income of ¥4,227 million (up 25.8% year onyear), and profit attributable to owners of parent of ¥2,798 million (up 19.2% year on year).
In the Information Network Solutions segment, the service business including cloud services grew
substantially. However, orders and net sales were below year-earlier levels as large projects and GIGA
School Concept-related orders that contributed in the previous year dropped out and computer orders
declined as remote working related demand ran its course. Furthermore, delivery delays caused bysemiconductor shortages dragged performance. As for the overall trend, the Group has steadily
implemented one of our key priorities in the medium-term management plan, “Reforming our businessstructure by expanding the service we offer.” As a result, we have made progress in shifting equipment
and development construction to the cloud (i.e., converting them to services). Meanwhile, profit grewsignificantly year on year on improved cost of sales for development and construction projects andequipment orders as well as on profit from growing service sales.
In the Electronic Devices segment, the global expansion of production facilities drove demand in thefactory automation (FA) equipment and industrial equipment markets, while demand for in-vehicle
products and consumer electronics was robust. Although semiconductor supplies were tight, we

5

worked to procure sufficient volume. As a result, segment orders, net sales, and operating income all
significantly exceeded year-earlier levels.
The following section discusses earnings by segment in the period under review.
*Note regarding quarterly earnings for the Group
Many of the Group’s customers have business years from April through March of the following year.
Further, fulfilment obligations for many transactions are judged to be satisfied at a certain point, so theGroup’s sales and profit tend to be concentrated in September and March, the halfway and endpoints ofthe fiscal year.
Information Network Solutions
In the full year of the fiscal year ended March 31, 2022, the Information Network Solutions businessbooked orders of ¥95,008 million (down 2.2% year on year), net sales of ¥92,319 million (down 5.7%
year on year), and operating income of ¥3,400 million (up 14.9% year on year). While orders and net
sales fell from the previous year, operating income significantly exceeded the year-earlier level.
Results by business model
Equipment: In the equipment business, the Group made progress in installing PCs for customers in the
distribution, retail, and public sectors. However, the business was affected by the absenceof large orders related to the GIGA School Concept seen in the previous fiscal year, lower
orders for PCs used for teleworking, and semiconductor shortages causing some delivery
delays. As a result, both orders and net sales were down significantly from a year earlier,
totaling ¥38,620 million (down 11.7% year on year) and ¥37,127 million (down 16.0% year
on year), respectively. As noted above, we have been implementing a shift for someequipment to services by bringing servers, network devices, and PBXs to the cloud.
Development and construction: Although network construction projects and small- and medium-sized
system development projects increased, large-scale infrastructure construction and systemdevelopment projects declined. Consequently, results were flat compared to the previous
fiscal year, with net sales of ¥14,501 million (down 0.1% year on year). However, orders
significantly increased over the previous year, totaling ¥15,342 million (up 7.3% year onyear), as we received new orders for large-scale cloud PBX construction projects andsystem development projects. In addition, as with equipment, there was a partial decline indevelopment and construction due to their conversion into services.
Service:

The service business posted solid results driven by factors such as the growth of cloudservices, including cloud-based contact center services, and newly acquired orders forequipment maintenance services. Orders and net sales exceeded the year-earlier results,
with orders of ¥41,046 million (up 5.0% year on year) and net sales of ¥40,690 million (up4.0% year on year).

Profit increased significantly over the previous year. In addition to improved cost of sales in development
and construction projects and equipment contracts, increased service sales contributed to profit.

6

Electronic Devices
The Electronic Devices segment booked orders of ¥35,550 million (up 45.0% year on year), net salesof ¥26,996 million (up 21.8% year on year), and operating income of ¥592 million (up 144.8% year onyear). Orders, net sales, and operating income all significantly surpassed year-earlier levels. Orders inparticular grew sharply as efforts to secure components continued to accelerate amid a global shortageof semiconductors from the third quarter.
In the devices business, orders and sales both increased significantly over the previous year.
Production volume of electric vehicles rose on the back of decarbonization efforts, and demandremained robust for factory automation (FA) equipment and industrial equipment industries. Further,customers made progress in strategically securing components in response to the prolonged
semiconductor shortage.
In the systems business, orders and net sales exceeded the previous year. Sales grew for LCD
panels and SSD/HDD products on strong demand for onboard automotive information devices andconsumer electronics and new orders for industrial equipment increased.
Profit grew sharply from the same period a year ago. In response to the tight supply of components, theGroup worked to procure volume for onboard automotive information devices, factory automation (FA)equipment and industrial equipment, and consumer electronics. In addition, the operational efficiency
improved as a result of spinning off the device business.

7

The following tables show sales and orders by segment for the fiscal year ending March, 2022.
Net sales (millions of yen)
Year ended
March 2021
Information Network Solutions
97,848Equipment
44,207Development and construction
14,518Service39,122
Electronic Devices
22,155
Total
120,004
Note: Inter-segment transactions are offset and eliminated.

Year ended March 2022
Versus previous year
92,319(5,528)
94.3%
37,127(7,079)84.0%
14,501(17)
99.9%
40,6901,568
104.0%
26,9964,840
121.8%
119,316
(688)
99.4%

Orders (millions of yen)
Year ended
March 2021
Information Network Solutions
97,134Equipment
43,733Development and construction
14,296
Service
39,104
Electronic Devices
24,521
Total
121,655
Note: Inter-segment transactions are offset and eliminated.

Year ended March 2022
Versus previous year
95,008(2,125)
97.8%
38,620(5,113)88.3%
15,342
1,046
107.3%
41,046
1,941
105.0%
35,55011,029145.0%
130,5598,903
107.3%

Order backlog (millions of yen)
Year ended
March 2021
Information Network Solutions
14,584Equipment
8,825
Development and construction
3,630
Service2,128Electronic Devices
7,882
Total
22,467
Note: Inter-segment transactions are offset and eliminated.

8

Year ended March 2022
Versus previous year
17,274
10,3184,472
2,484
16,43633,710

2,689
1,492
841
355
8,554
11,243118.4%
116.9%
123.2%
116.7%
208.5%
150.0%

(2) Financial position
Assets totaled ¥79,226 million at the end of the year in review, up by ¥3,025 million from the end of theprevious year. The main factor of increase was a ¥ 3,217 million increase in cash and deposits.
Liabilities totaled ¥46,026 million at the end of the year, up by ¥996 million from the end of the previous
year. The main factors behind the increase were a ¥1,026 million increase in income taxes payable and a¥571 million increase in liabilities for retirement benefits, while the main factor of decrease was a ¥567
million decrease in notes and accounts payable – trade.
Net assets totaled ¥33,199 million at the end of the year, up by ¥2,028 million from the end of theprevious year, and the shareholders’ equity ratio was 41.5% (40.6% at the end of the previous year). The
main factors of increase were profit attributable to owners of parent of ¥2,798 million and the disposal oftreasury stock for ¥215 million due to the transfer of shares under the stock-grant schemes for directors
and employees, while the main factor of decrease was a reduction in retained earnings of ¥1,006 million
due to the payment of dividends from surplus.
Due to the application of the Accounting Standard for Revenue Recognition, retained earnings at the startof the year increased by ¥76 million.

(3) Cash flows
The Company recorded cash inflows of ¥5,560 million from operating activities, cash outflows of ¥4
million from investing activities, and cash outflows of ¥2,413 million from financing activities.
As a result, cash and cash equivalents increased by ¥3,202 million from the end of the previous year,to ¥19,130 million. Cash flows and the main factors influencing them are as described below.
(Cash flows from operating activities)
Cash flows from operating activities came to ¥5,560 million (¥749 million in inflows in year ended March
2021, a increase of 641.5%). Major cash inflows included income before income taxes and others of¥4,430 million and depreciation and amortization of ¥2,531 million yen, while major cash outflows
included a ¥860 million increase in notes and accounts receivable – trade and a ¥621 million decrease innotes and accounts payable – trade.
(Cash flows from investing activities)
Cash flows from investing activities came to ¥4 million (¥1,271 million in year ended March 2021, adecrease of 99.6%). Major cash outflows included ¥ 1,061 million for the purchase of property, plant, andequipment, while the major cash inflows included proceeds of ¥908 million yen from the sale of property,
plant, and equipment.

(Cash flows from financing activities)

9Cash flows from financing activities came to ¥2,413 million (¥2,029 million yen in year ended March
2021, an increase of 19.0%). Major cash outflows included ¥1,609 million for repayment of leaseobligations and ¥1,006 million yen for payment of dividends.

Reference: Cash flow related indicators
Year ended March

2019

2020

2021

2022

Shareholders’ equity ratio (%)
36.4
38.4
40.6
Market value based shareholders’
18.6
24.8
38.2
equity ratio (%)
Interest bearing debt to cash flow
19.8
1.7
17.1
ratio (years)
Interest coverage ratio (x)
5.3
56.6
6.1
Notes: Shareholders’ equity ratio = Shareholders’ equity/total assets
Market value based shareholders’ equity ratio = Market capitalization/total assets
Interest bearing debt to cash flow ratio (years) = Interest bearing debt/cash flow
Interest coverage ratio = Cash flow/interest paid

41.5
33.1
2.3
42.5

*All calculations are based on consolidated financial data.
*Market capitalization = fiscal year-end closing share price x number of shares outstanding at fiscal yearend (excluding treasury shares and company shares held in ESOP trust account, Directors’Compensation BIP trust account and Stock-grant ESOP trust account).
*Cash flow used in calculations is cash flow from operating activities.
*Interest bearing debt includes all liabilities on the consolidated balance sheets that incur interest.

(4) Outlook
The Japanese economy is likely headed for a gradual recovery from the impact of COVID-19. But theoutlook is still uncertain, as the worsening situation in Ukraine casts a shadow on the global economy.
Some of our customers may be hit hard by the evolving situation, and continued monitoring is warranted.
On the other hand, we expect corporate demand for digital transformation (DX) and investment appetite
for ICT to remain strong.
Against this backdrop, for the fiscal year ending March 31, 2023, we forecast net sales of ¥122,000
million (up 1.7% year on year), operating income of ¥4,000 million (up 24.9% year on year), ordinary
income of ¥4,050 million (up 20.5% year on year), and profit attributable to owners of parent of ¥2,700
million (up 15.1% year on year). We revised our targets from those announced on May 15, 2020 (netsales of ¥126 billion and operating income of ¥4.6 billion) as the underlying conditions have changed
materially since formulating the medium-term management plan due to such factors as the prolonged
spread of COVID-19 and uncertainty linked to the worsening situation in Ukraine.
In the coming fiscal year ending March 31, 2023, which is also the final year of the plan, we aim toincrease earnings by focusing on sales expansion to ensure that we meet customers’ ICT needs, and by
further promoting the structural transformation of the electronic devices segment. We look to do so while
taking advantage of our service infrastructure (our new DX service system called the Total
SolutionService Framework (TSF), consisting of DagreeX, TCloud for Voice, CT-e1, and other services),
which we have built and maintained from the previous fiscal year through the current fiscal year.

10In the fiscal year ending March 31, 2023, the final year of our medium-term management plan, we will
focus on expanding earnings to ensure that we can meet customers’ ICT needs by leveraging the service
infrastructure that we have built and maintained from the previous fiscal year through the current fiscal
year (our new DX service system called the Total SolutionService Framework (TSF), consisting ofDagreeX, TCloud for Voice, CT-e1, and other services). We aim to strengthen the business foundation towithstand changes in the environment by further promoting structural transformation of the Electronic
Devices segment.
Should any matters arise that must be disclosed concerning changes in the business situation due to the
spread of COVID-19 or the conflict in Ukraine, we will do so promptly.

(5) Dividend policy and dividends for the year under review and coming year
The Company views shareholder returns as a key management priority, and aims to continue
expanding earnings and increasing dividends, targeting a consolidated payout ratio of about 30%.
The Company also aims to share profit via consistent interim and year-end dividend payments linked toconsolidated earnings and to grow and effectively utilize retained earnings to boost corporate andshareholder value.
Note: The Company plans to deploy retained earnings to enhance its technological capabilities and fund
R&D, invest in business areas that have high growth potential and profitability, develop its humanresources by spending on education, and strengthen its financial position by reducing interest-bearing
debt.
In line with the above policy, the Company increased its year-end dividend per share forecast by ¥1from ¥24 for an ordinary dividend of ¥25 (bringing the annual dividend to ¥48, including ordinary interim
dividend of ¥23).
The Company plans to pay an annual dividend per share of ¥50 in the year ending March 2023.

2. Approach to selection of accounting standards
The Group uses Japanese generally accepted accounting principles (JGAAP) to facilitate comparisonswith other Japanese companies in our sector.

11

3. Consolidated financial statements and notes(1) Consolidated balance sheet(Millions of yen)

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable – trade
Notes
Accounts receivable – trade
Electronically recorded monetary claims
Contract assets
Inventories
Income taxes receivable
Other
Allowance for doubtful accounts
Total current assets
Noncurrent assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation
Buildings and structures (net)
Machinery, equipment and vehicles
Accumulated depreciation
Machinery, equipment and vehicles (net)Land
Lease assets
Accumulated depreciation
Lease assets (net)
Construction in progress
Other
Accumulated depreciation
Other (net)Total property, plant and equipment
Intangible assets
Goodwill
Lease assets
Other
Total intangible assets
Investments and other assets
Investment securities
Long-term loans receivable
Deferred tax assets
Other
Allowance for doubtful accounts
Investments and other assets

12

As of March 31, 2021

As of March 31, 2022

15,94427,948
－
－
3,817
－
7,619
98
1,390
(77)
56,74019,162－
380
26,870
4,645
862
7,483
－
1,861
(70)
61,195

1,696
(891)
805
7
(6)
1
1,769
5,777
(3,240)
2,536
821
1,006
(676)
329
6,264

2,145
(933)
1,212
7
(6)
1
1,804
5,150
(3,330)
1,820
126
1,177
(713)
463
5,428

226
549
2,191
2,967

135
883
2,053
3,072

4,766
34
4,131
1,377
(81)
10,228

4,096
32
4,204
1,247
(52)
9,528

(Millions of yen)

Total noncurrent assets
Total assets

13

As of March 31, 2021

As of March 31, 2022

19,46076,20018,03079,226

(Millions of yen)

Liabilities
Current liabilities
Notes and accounts payable – trade
Contract liabilities
Short-term loans payable
Current portion of long-term loans payable
Lease obligations
Income taxes payable
Provision for bonuses
Other
Total current liabilities
Noncurrent liabilities
Long-term loans payable
Lease obligations
Deferred tax liabilities
Net defined benefit liability
Long-term accounts payable – other
Other provision
Other
Total noncurrent liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive
incomeNoncontrolling interests
Total net assets
Total liabilities and net assets

14

As of March 31, 2021

As of March 31, 2022

15, 875
－
4,894
161
1,428
241
2,415
5,020
30,03715,307
1,976
5,137
4,291
1,267
1,268
2,303
3,333
34,886

4,443
1,921
7
7,959
26
548
82
14,99145,029

152
1,658
7
8,531
29
629
130
11,13946,026

9,812
2,581
21,150(2,472)
31,0729,812
2,581
23,018(2,257)33,155

1,485

1,343

(3)
52
(1,672)(37)
145(1,760)

(137)

(307)

236
31,171
76,200352
33,19979,226

(2) Consolidated statements of income and comprehensive income(Consolidated statement of income)(Millions of yen)
Fiscal year ended
March 31, 2021
Net sales
Cost of sales
Gross profit
Selling, general, and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Insurance income
Dividends income of insurance
Foreign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on step acquisitions
Gain on sales of noncurrent assets
Gain on sales of investment securities
Total extraordinary income
Extraordinary loss
Loss on sales of noncurrent assets
Impairment loss
Loss on retirement of noncurrent assets
Loss on sales of investment securities
Loss on valuation of investment securities
Other

Total extraordinary losses
Income before income taxes and others
Income taxes – current
Income taxes – deferred
Total income taxes
ProfitProfit attributable to noncontrolling interests
Profit attributable to owners of parent

15

Fiscal year ended
March 31, 2022

120,004
98,53821,465
18,263
3,202

119,316
96,80422,511
18,498
4,012

2
97
－
150
－
62
312

8
104
59
74
43
73
364

123
8
22
154
3,361

130
－
19
150
4,227

13
2
36
52

－
－
219
219

55
44
4
69
－
－
174
3,238
617
200
818
2,419
72
2,346

－
－
3
2
6
5
16
4,430
1,436
17
1,453
2,976
178
2,798

(Consolidated statement of comprehensive income)(Millions of yen)
Fiscal year ended
March 31, 2021
ProfitOther comprehensive income
Valuation difference on available for salesecurities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Other comprehensive income
Comprehensive income
BreakdownComprehensive income attributable toowners of parent
Comprehensive income attributable tononcontrolling interests

16

Fiscal year ended
March 31, 2022

2,419

2,976

795

(142)

(2)
42
(1,097)
(261)
2,157

(33)
93
(87)
(170)
2,806

2,084

2,627

72

178

(3) Consolidated statement of changes in net assets
Fiscal year ended March 31, 2021
(Millions of yen)
Shareholders' equity
Retained
Shareholders'Capital surplus
Treasury stockearnings
equityCapital stock
Balance at beginningof fiscal year
Cumulative effect ofchange in accounting
policyBalance at beginningof fiscal year reflectingchange in accounting
policyChanges during theyear
Dividend fromsurplusProfit attributable toowners of parent
Purchase of treasury
stock
Disposal of treasury
stock
Cancellation oftreasury stock
Net changes of items
other thanshareholders’ equity
Total changes during
the year
Balance at end of the
year

9,812

2,581

21,021(3,785)29,629

9,812

2,581

21,021(3,785)29,629(1,093)(1,093)

2,346

2,346

411

(664)

(664)

442

854

(411)

(1,122)

1,534

－

－

－

129

1,313

1,443

9,812

2,581

21,150(2,472)

31,072

Accumulated other comprehensive income

Balance at
beginning of fiscal
year
Cumulative effect ofchange inaccounting policy
Balance at
beginning of fiscal
year reflectingchange inaccounting policy
Changes during
year
Dividend of
surplus

Valuation
Deferreddifference
gains oron available
losses on
for salehedgessecurities

690

(1)

NonForeign
Remeasurements
Other
controllingcurrencyof defined benefit comprehensive interests
translation
plans
incomeadjustment

10

(575)

123

－

Total net
assets29,752
－

690

(1)

10

(575)

123

－

29,752(1,093)

Profit attributable toowners of parent

2,346

17

Purchase oftreasury stock
Disposal oftreasury stock
Cancellation oftreasury stock
Net changes of
items other thanshareholders’ equity

Total changes
during year
Balance at end of
year

(664)
854
－
795

(2)

42

(1,097)

(261)

236

(24)

795

(2)

42

(1,097)

(261)

236

1,418

1,485

(3)

52

(1,672)

(137)

236

31,17118

Fiscal year ended March 31, 2022
(Millions of yen)

Balance at beginningof fiscal year
Cumulative effect ofchange in accounting
policyBalance at beginningof fiscal year reflectingchange in accounting
policyChanges during theyear
Dividend fromsurplusProfit attributable toowners of parent
Purchase of treasury
stock
Disposal of treasury
stock
Cancellation oftreasury stock
Net changes of items
other thanshareholders’ equity
Total changes during
the year
Balance at end of year

Shareholders' equity
Retained
Capital stock Capital surplus
Treasury stock Shareholders'earnings
equity
9,812

2,581

21,150(2,472)

31,072

76
9,812

2,581

76

21,227(2,472)

31,149(1,006)(1,006)

2,798

2,798
(0)

(0)

215

215
－

－

－

1,791

214

2,006

9,812

2,581

23,018(2,257)33,155

Accumulated other comprehensive income

Balance at
beginning of fiscal
year
Cumulative effect ofchange inaccounting policy
Balance at
beginning of fiscal
year reflectingchange inaccounting policy
Changes during
year
Dividend of
surplus

Valuation
Deferreddifference
gains oron available
losses on
for salehedgessecurities

1,485

(3)

NonForeign
Remeasurements
Other
controllingcurrencyof defined benefit comprehensive interests
translation
plans
incomeadjustment

52(1,672)

(137)

236

Total net
assets31,171
76

1,485

(3)

52

(1,672)

(137)

236

31,248(1,006)

Profit attributable toowners of parent

2,798

Purchase oftreasury stock
Disposal oftreasury stock

(0)
215

19

Cancellation oftreasury stock
Net changes of
items other thanshareholders’ equity

Total changes
during year
Balance at end of
year

－
(142)

(33)

93

(87)

(170)

115

(54)

(142)

(33)

93

(87)

(170)

115

1,951

1,343

(37)

145

(1,760)

(307)

352

33,19920

(4) Consolidated statement of cash flows(Millions of yen)
Fiscal year ended
March 31, 2021
Cash flows from operating activities
Income before income taxes and others
Depreciation and amortization
Impairment loss
Goodwill amortization
Increase (decrease) in provision for doubtful
accounts
Increase (decrease) in provision for bonuses
Increase (decrease) in net defined benefit
liability
Increase (decrease) in provision for losses onorders received
Increase (decrease) in other provisions
Interest and dividend income
Interest expenses
Foreign exchange loss (gain)
Loss (gain) on step acquisitions
Loss (gain) on sale of noncurrent assets
Loss (gain) on sale of investment securities
Loss (gain) on valuation of investment securities
Loss on disposal of noncurrent assets
Other non-operating loss (gain)
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Decrease (increase) in other assets
Increase (decrease) in notes and accounts
payable – trade
Increase (decrease) in accrued consumption
taxes
Increase (decrease) in other liabilities
SubtotalInterest and dividends received
Interest paid
Other
Income taxes paid
Refund of income taxes
Cash flows from operating activities

21

Fiscal year ended
March 31, 2022

3,238
2,408
44
45

4,430
2,531
－
90

23

(36)

(133)

(111)

(171)

531

(98)

－

181
(99)
123
8
(13)
53
33
－
4
(190)
(1,653)
891
73

81
(113)
130
－
－
－
(217)
6
3
(180)
(860)
173
(445)

(2,057)

(621)

(332)

(354)

(566)
1,811
99
(123)
190
(1,234)
5
749

750
5,789
113
(130)
180
(619)
226
5,560

(Millions of yen)
Fiscal year ended
March 31, 2021
Cash flows from investing activities
Outflows from transfers to time deposits
Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment
Proceeds from sale of property, plant andequipment
Purchase of intangible assets
Proceeds from sale of intangible assets
Purchase of investment securities
Proceeds from sale of investment securities
Purchase of shares in subsidiary resulting inchange in scope of consolidation
Outflows from payment of loans receivable
Proceeds from collection of loans receivable
Other
Cash flows from investing activities
Cash flows from financing activities
Net increase (decrease) in short-termborrowings
Proceeds from long-term borrowings
Repayment of long-term borrowings
Repayment of lease obligations
Acquisition of treasury stock
Proceeds from disposal of treasury stock
Dividend payments
Dividends paid to noncontrolling interests
Cash flows from financing activities
Effect of exchange rate changes on cash andcash equivalents
Net increase (decrease) in cash and cash
equivalents
Cash and cash equivalents at beginning of theperiodCash and cash equivalents at end of the period

22

Fiscal year ended
March 31, 2022

(0)－(1,245)(17)
5(1,061)

791

908

(945)
255
(38)
113

(812)
290
(98)
765

(148)

－

(3)

(2)

5
(54)
(1,271)

4
14
(4)

87

211

400
(23)
(1,590)(664)
854(1,093)－(2,029)－(161)(1,609)(0)215(1,006)(62)(2,413)22

61(2,528)3,202

18,45615,927

15,927

19,130(5) Notes to consolidated financial statements(Notes on premise of going concern)
Not applicable.

(Changes in accounting policies)(Application of Accounting Standard for Revenue Recognition)
The Company began applying the Accounting Standard for Revenue Recognition (ASBJ Statement No.
29, March 31, 2020, “revenue recognition standard” below) from the start of the first quarter. The
Company recognizes revenue when control of promised goods or services is transferred to the customer,in the amount expected to be received in exchange for the goods or services.
Previously, the Company applied the percentage of completion method for systems development
contracts when the outcome was deemed certain. However, the Company has changed its revenue
recognition method. Now, when control over goods or services is transferred to the customer over acertain period, the Company recognizes revenue for that period as its obligation to transfer the goods orservices to the customer is satisfied. To measure the progress toward fulfilling obligations for eachreporting period, costs incurred until the last day of the period as a percentage of total expected costs arecalculated. Also, when it is not possible to reasonably estimate progress in the initial phase of a contract,
but the Company expects to recover costs incurred, the Company recognizes revenue under the cost
recovery method. For contracts with a very short period from the start of the transaction until theobligation is expected to be fully satisfied, the Company applies an alternative treatment under whichrevenue is not recognized for a set period but only when the obligation is fully satisfied.
The Company has applied the revenue recognition standard in accordance with transitional treatmentprescribed in the proviso to paragraph 84 of the Accounting Standard for Revenue Recognition. The
cumulative effect of retroactively applying the new accounting policy prior to the beginning of the firstquarter was added to or deducted from retained earnings at the beginning of the first quarter, and the new
accounting policy was applied from the opening balance at the start of the first quarter. However, theCompany has followed the treatment prescribed in paragraph 86 of the Accounting Standard for Revenue
Recognition, and did not retrospectively apply the new accounting policy to contracts for which almost allof the revenue was recognized under the previous treatment before the start of the first quarter. In
addition, the Company has applied the treatment prescribed in proviso 1 of paragraph 86 of the
Accounting Standard for Revenue Recognition and accounted for contract changes made before thebeginning of the first quarter based on the contract terms after reflecting all contract changes, and addedor subtracted the cumulative effect of such changes to retained earnings at the beginning of the firstquarter.
As a result, net sales in the period increased by ¥602 million, cost of sales increased by ¥486 million,
and operating income, ordinary income, and income before income taxes each increased by ¥115 million.
Retained earnings at the start of the year increased by ¥76 million. Because the Company applied therevenue recognition standard, what was displayed as “Notes and accounts receivable – trade” under thecurrent assets section of the previous year’s balance sheet is “Notes and accounts receivable – trade,and contract assets” in the current year. Further, in accordance with the transitional treatment prescribedin paragraph 89-2 of the Accounting Standard for Revenue Recognition, the prior year's consolidated
financial statements have not been reclassified to conform to the new presentation.
(Application of Accounting Standard for Fair Value Measurement)
The Company applied the Accounting Standard for Fair Value Measurement (ASBJ Statement No. 30,
July 4, 2019, “fair value standard” below) from the start of the first quarter. In accordance with thetransitional treatment prescribed in paragraph 19 of the fair value standard and paragraph 44-2 of the
Accounting Standard for Financial Instruments (ASBJ Statement No. 10, July 4, 2019), the new23

accounting policy prescribed in the fair value standard will be applied prospectively. There is no impact on
the quarterly consolidated financial statements.

(Additional information)
1 Transactions to deliver the Company’s shares to employees via a trust(Employee Stock Ownership Plan (ESOP) trust)
To provide benefits to its employees, the Company enters transactions to deliver its own shares to the
Employee Stock Ownership Plan via a trust. For accounting treatment of the relevant trust agreements,
the Company applies Practical Solution on Transactions of Delivering the Company’s Own Stock to
Employees etc. through Trusts (Practical Issues Task Force (PITF) No. 30, March 26, 2015). The
Company recognizes the difference on disposal when treasury shares are disposed of to the trust, andthe gains or losses on sales of shares sold by the trust to the ESOP, dividends from the Company on its
shares held by the trust, and trust-related expenses are recognized as liabilities.
(1) Overview of transactions
The Company has set up a trust whose beneficiaries are employees who are members of the ESOP
fulfilling certain conditions. Over a three-year period, the trust purchases the number of shares the ESOPis expected to purchase by third-party allocation, and subsequently, on a certain day every month, it sells
the shares to the ESOP. Upon termination of the trust, if there are trust earnings due to share priceappreciation, beneficiaries receive money in proportion to their contributions. If a loss on transfer arises
due to a decline in the share price and there are liabilities associated with trust assets, the Company will
reimburse the bank in a lump sum under guarantee provisions of the loan agreement. Therefore, there
will be no additional burden for employees.
(2) Company shares owned by the trust
The Company’s shares in the trust are recorded as treasury stock under net assets at the trust’s bookvalue (excluding incidental expenses). The book value of treasury stock and number of shares were ¥340
million yen and 210,100 respectively for the year ended March 2021, and ¥195 million yen and 121,000
respectively for the year ended March 2022.
(3) Book value of borrowings applying the gross value method¥400 million in the year ended March 2021, and ¥266 million in the year ended March 2022.
2 Stock-grant schemes for directors, executive officers, and employees(Directors’ Compensation BIP trust and Stock-grant ESOP trust)
The Company has established a Directors’ Compensation Board Incentive Plan (BIP) trust for directors
and executive officers (excluding outside directors and nonresidents of Japan, “directors and others”
below). The purpose is to improve the Company’s medium to long-term earnings and corporate value,
and raise awareness of shareholder-oriented management.
It has also enhanced employee benefits with the establishment of a stock-grant ESOP trust for
employees. The purpose is to improve the Company’s medium- to long-term corporate value by raisingawareness of improvements in earnings and share price appreciation.
(1) Overview of transactions
The Directors’ Compensation BIP trust is a stock-based remuneration plan. The trust uses
remuneration of directors and others contributed by the Company as funds to acquire the Company’s
shares and provides directors and others with the shares and cash equivalent to the shares’ conversion
value.
The Stock-grant ESOP trust is an incentive plan. The trust acquires the Company’s shares and delivers
them to employees who fulfil certain conditions in accordance with the stock-grant rules.
(2) Company shares owned by the trusts
The Company’s shares in the trusts are recorded as treasury stock under net assets at the trusts’ bookvalue (excluding incidental expenses). The book value of treasury stock and number of shares held by24

the Directors’ Compensation BIP trust were ¥463 million and 380,905 respectively in the previous fiscal
year and ¥421 million and 346,034 in the year under review. The book value of treasury stock andnumber of shares held by the Stock-grant ESOP trust were ¥492 million and 486,750 respectively in theprevious fiscal year and ¥463 million and 458,056 in the year under review.

25

(Segment and other information)
Segment information
1. Overview of reporting segments
The Group’s reporting segments are the constituent units of the Group for which separate financial
statements are available, and are periodically reviewed by the Board of Directors to decide on the
allocation of business resources and evaluate performance.
The Group is engaged in information network systems business. The Company and its consolidated
subsidiaries operate businesses as independent management units. It has grouped its businesses into
two segments, Information Network Solutions and Electronic Devices, based on similarities in economic
characteristics such as the services and product line-up they provide to customers. Segment businesses
are as follows.
Information Network Solutions segment◆ Equipment: Sales of information and communication equipment◆ Development and construction: Provision of technical services in consulting, design, development,
and system construction◆ Service: Operation and maintenance of information and communication equipment and software, andprovision of monthly cloud and other subscription services
Electronic Devices segment◆ Provision of device solutions and contract design and development
2. Calculation of segment sales, profit or loss, assets, liabilities, and other items
The accounting treatment for the reporting segments is generally the same as that used when
preparing consolidated financial statements.
Operating income figures are used for reporting segment profit.
Intersegment net sales and transfers are based on third-party transaction prices.

As noted in the section on accounting policy changes, the Company began applying the AccountingStandard for Revenue Recognition and other accounting standards beginning with the consolidated
income statements for the year ended March 2022, and has changed its accounting method for revenue
recognition, and segment profit and loss calculation methods have changed accordingly.
Due to the above change, compared with the previous accounting treatment, Information Network
Solutions net sales increased by ¥602 million and segment profit by ¥115 million.

26

3. Segment sales, profit or loss, assets, liabilities, and other items
Fiscal year ended March 2021
(Millions of yen)Amountrecorded in
Adjustments consolidated(Note 1, 2, 3)
financialstatements(Note 4)

Reporting segment
Information
Network
SolutionsElectronic
Devices

97,84822,155120,004－

120,004

10

207

218

(218)

－

97,85822,363

120,222(218)

120,004

Segment profit

2,960

242

3,202

0

3,202

Segment assets

45,182

19,25864,44011,691

76,131

Segment liabilities

37,904

7,058

44,963(2)

44,960

2,385

22

2,408

－

2,408

Goodwill amortization

45

－

45

－

45

Impairment loss

44

－

44

－

44

2,162

4

2,167

－

2,167

Total

Sales
Sales to externalcustomers
Intersegment sales andtransfers
Total

Other
Depreciation

Increase in tangible andintangible fixed assets
Notes:

1 Adjustments to segment profit are elimination of intersegment transactions.
2 Adjustments to segment assets are elimination of intersegment transactions and assets related tooperating funds, long-term investment funds, and management divisions at submitting company.
3 Adjustments to segment liabilities are elimination of intersegment transactions.
4 Segment profit is adjusted with operating income in the consolidated income statements.

27

Fiscal year ended March 2022
(Millions of yen)Amountrecorded in
Adjustments consolidated(Note 1, 2, 3)
financialstatements(Note 4)

Reporting segment
Information
Network
SolutionsElectronic
Devices

92,31926,996

119,316－

119,316

31

165

197

(197)

－

92,35027,162

119,513(197)

119,316

Segment profit

3,400

592

3,993

18

4,012

Segment assets

63,86820,92084,789(5,563)

79,226

Segment liabilities

42,767

8,541

51,308(5,282)

46,026

2,506

25

2,531

－

2,531

90

－

90

－

90

3,722

79

3,802

－

3,802

Total

Sales
Sales to external customers
Intersegment sales andtransfers
Total

Other
Depreciation
Goodwill amortization
Increase in tangible andintangible fixed assets
Notes:

1 Adjustments to segment profit are elimination of intersegment transactions.
2 Adjustments to segment assets are elimination of intersegment transactions and assets related tooperating funds, long-term investment funds, and management divisions at submitting company.
3 Adjustments to segment liabilities are elimination of intersegment transactions.
4 Segment profit is adjusted with operating income in the consolidated statement of income.

28

Related information
Fiscal year ended March 2021
1. Information by product and service
This is omitted because it is disclosed in the segment information.
2. Information by region(1) Net sales
This is omitted because net sales to external customers in Japan exceed 90% of the net sales in the
consolidated statement of income.
(2) Property, plant, and equipment
This is omitted because property, plant, and equipment located in Japan exceeds 90% of the property,
plant, and equipment on the consolidated balance sheet.
3. Information by major customer
This is omitted because none of the Company’s customers account for more than 10% of net sales in
the consolidated statement of income.

Fiscal year ended March 2022
1. Information by product and service
This is omitted because it is disclosed in the segment information.

2. Information by region(1) Net sales
This is omitted because net sales to external customers in Japan exceed 90% of the net sales in the
consolidated statement of income.
(2) Property, plant, and equipment
This is omitted because property, plant, and equipment located in Japan exceeds 90% of the property,
plant, and equipment on the consolidated balance sheet.

3. Information by major customer
This is omitted because none of the Company’s customers account for more than 10% of the net sales
in the consolidated statement of income.

Information on impairment loss on fixed assets by reportable segment
Previous fiscal year (April 1, 2020, to March 31, 2021)
This information is omitted because the same information is disclosed in the segment information.
Fiscal year under review (April 1, 2021, to March 31, 2022)
Not applicable29

Information on amortization of goodwill and unamortized balance by reportable segment
Fiscal year ended March 2021
(Millions of yen)
Reporting segment
Information
Network
Solutions

Adjustments

Electronic
Devices

Total

Total

Balance at end
226
226
226
－
－
of year
Note: Information on amortization of goodwill is omitted because the same information is disclosed in thesegment information.
Fiscal year ended March 2022
(Millions of yen)
Reporting segment
Information
Network
Solutions

Adjustments

Electronic
Devices

Total

Total
Information
Network
Solutions

Balance at end
Balance at
135
135
135
－
of yearend of year
Note: Information on amortization of goodwill is omitted because the same information is disclosed in thesegment information.
Information on gain on negative goodwill by reportable segment
Previous fiscal year (April 1, 2020, to March 31, 2021)
Not applicable
Fiscal year under review (April 1, 2021, to March 31, 2022)
Not applicable30

(Per share information)
Fiscal year ended March 2021
Net assets per share (yen)Basic earnings per share (yen)Fiscal year ended March 2022

1,760.87
134.06

Net assets per share (yen)Basic earnings per share (yen)Note: Diluted earnings per share is not statedbecause there are no dilutive shares.

1,853.68
158.47

Note: Diluted earnings per share is not statedbecause there are no dilutive shares.

Notes:
1. Treasury shares held in the Employee Stock Ownership Plan (ESOP) trust account, Directors’Compensation BIP trust account, and Stock-grant ESOP trust account are deducted from thetotal number of shares outstanding at the end of the year for calculating net assets per share.
This comprised 210,100 shares held in the Employee Stock Ownership Plan (ESOP) trust
account in the year ended March 2021, and 121,000 shares in the year ended March 2022;
380,905 shares in the Directors' Compensation BIP trust account in the year ended March
2021 and 346,034 shares in the year ended March 2022; and 486,750 shares held in the
Stock-grant ESOP trust account in the year ended March 2021 and 458,056 shares in theyear ended March 2022.
Treasury shares held in the Employee Stock Ownership Plan (ESOP) trust account, Directors’Compensation BIP trust account, and Stock-grant ESOP trust account are deducted in thecalculation of average number of shares outstanding during the year for calculating basic earnings
per share. This comprised 93,133 shares in the year ended March, 2021 and 162,192 shares in theyear ended March 2022 in the Employee Stock Ownership Plan (ESOP) trust account; 335,853
shares in the year ended March 2021 and 355,751 shares in the year ended March 2022 in the
Directors’ Compensation BIP trust account; and 482,896 shares in the year ended March 2021 and
471,152 shares in the year ended March 2022 in the Stock-grant ESOP trust account.
2. The basis for calculation of basic earnings per share is as follows:
Fiscal year ended
March 2021
Profit attributable to owners of parent (millions ofyen)Amounts not attributable to ordinary shareholders(millions of yen)
Profit attributable to owners of parent (millions ofyen) related to common stock
Average number of shares (thousands)(Major subsequent events)
Not applicable.

31

Fiscal year ended
March 2022

2,346

2,798

－

－

2,346

2,798

17,502

17,656