Consolidated Financial Results for the Fiscal Year Ended March 31, 2023 (JGAAP)May 12, 2023
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 27, 2023
Scheduled date for dividend payment:
June 27, 2023
Scheduled date for filing consolidated financial statements:
June 6, 2023
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, 2023
(April 1, 2022, to March 31, 2023)(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
123,899
3.8%
5,118
27.6
5,355
26.7%
3,521
25.8%
March 31, 2023
Year ended
119,316(0.6%)
4,012
25.3
4,227
25.8%
2,798
19.2%
March 31, 2022
Note: Comprehensive income was 2,965 million yen (+5.7%) in year ended March 31, 2023; 2,806 million
yen (+30.0%) in year ended March 31, 2022.
Earnings
per share(yen)

Dilutedearnings per
share (yen)Ratio of profit toshareholders’equityRatio ofordinary
income to total
assetsRatio ofoperatingincome tonet salesYear ended
197.48
—
10.4%
6.6%
4.1%
March 31, 2023
Year ended
158.47
—
8.8%
5.4%
3.4%
March 31, 2022
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
83,20735,38742.0%
1,950.05
March 31, 2023
Year ended
79,22633,19941.5%
1,853.68
March 31, 2022
Reference: Shareholders’ equity in year ended March 31, 2023, 34,945 million yen; in year ended March
31, 2022, 32,847 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

4,263

39

(2,612)

20,8455,560(4)(2,413)

19,130Year ended
March 31, 2023
Year ended
March 31, 2022

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
—
23.00
—
25.00
48.00
894
30.3%
2.7%
March 31, 2022
Year ended
—
25.00
—
36.00
61.00
1,137
30.9%
3.2%
March 31, 2023
Year ended
—
38.00
—
38.00
76.00
30.6%
March 31, 2024
Note:
1. 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.
2. For details of the expected dividend for the year ended March 31, 2024 please refer to attachment

page 12 “(5) Dividend policy and dividends for the year under review and coming year“

3. Forecast of consolidated financial results for the fiscal year ending March 3, 2024
(April 1, 2023 to March 31, 2024)% 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

126,500

2.1%

5,300

3.6%

5,250

(2.0%)

4,450

26.4

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

2

248.32

*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, 2023
stock)

Yes
None
None
None

Year ended
March 31,
22,177,894
2022
Year ended
2. Number of shares at year end
Year ended
2,257,664
March 31,2,457,908(treasury stock)
March 31, 2023
2022
Year ended
3. Average number of shares overYear ended
17,830,371
March 31,
17,656,165
the period
March 31, 2023
2022
Note: The number of treasury shares includes those held in the Employee Stock Ownership Plan (ESOP)
trust account (13,300 in year ended March, 2023; 121,000 in year ended March 2022), Directors’Compensation Board Incentive Plan (BIP) trust account (346,034 in year ended March 2023; 346,034 inyear ended March 2022) and Stock-grant ESOP trust account (420,865 in year ended March 2023;
458,056 in year ended March 2022).
20,177,894(Reference) Overview of Non-consolidated Financial Results
1.Non-consolidated financial results for the fiscal year ended March 31, 2023
(April 1, 2022, to March 31, 2023)(1)
Net salesYear ended
March 31, 2023
Year ended
March 31, 2022

Year ended
March 31, 2023
Year ended
March 31, 2022

82,590Millions of yen (rounded down), % figures are year-on-year change
Operating income
Ordinary income
Profit

(9.3%)

2,966

24.7

4,077

31.0%

3,168

38.9%

91,045 (14.5%)

2,379

4.5

3,111

1.7%

2,281

(6.7%)

Earnings per share(yen)

Diluted earnings
per share (yen)177.68—129.20—3

(2) Non-consolidated financial position
Total assets
Net assets
Shareholders’
Net assets per(millions of yen)(millions of yen)equity ratio
share (yen)Year ended
54,53922,33340.9%
1,246.27
March 31, 2023
Year ended
54,523
20,03036.7%
1,130.37
March 31, 2022
Reference: Shareholders’ equity was 22,333 million yen in year ended March 31, 2023; 20,030 million
yen in year ended March 31, 2022.

*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 Friday, May 12,2023. The briefing materials distributed will be posted on the Company’s website promptly before thebriefing.

4

(Attachment)

Contents
1. Overview of results ............................................................................................................................. 6(1) Earnings ............................................................................................................................................. 6(2) Financial position ............................................................................................................................ 10(3) Cash flows ....................................................................................................................................... 10(4) Outlook ............................................................................................................................................. 11(5) Dividend policy and dividends for the year under review and coming year .......................... 12
2. Approach to selection of accounting standards ....................................................................... 12
3. Consolidated financial statements and notes ........................................................................... 13(1) Consolidated balance sheet ......................................................................................................... 13(2) Consolidated statements of income and comprehensive income .......................................... 16(3) Consolidated statement of changes in net assets..................................................................... 18(4) Consolidated statement of cash flows ........................................................................................ 22(5) Notes to consolidated financial statements ................................................................................ 24(Notes on premise of going concern) .......................................................................................... 24(Changes in accounting policies) .................................................................................................. 24(Additional information) ................................................................................................................. 24(Segment and other information) ................................................................................................. 26(Per share information) .................................................................................................................. 31(Major subsequent events) ........................................................................................................... 31

5

1. Overview of results(1) Earnings
In the fiscal year ended March 31, 2023, the Japanese economy continued to recover gradually amid
the ongoing normalization of economic and social activity. Nevertheless, the outlook continued toremain uncertain, as the global economic downturn caused by monetary tightening and other factors
weighed on the domestic economy, and as this was further exacerbated by rising prices, supply-side
constraints, and fluctuations in financial and capital markets.
In the information and communications services industry where our Group operates, the COVID-19
pandemic triggered the acceleration of digital transformation (DX) in the corporate sector, and capital
investment in ICT continued to grow. As for the electronic device industry, while the supply-demandbalance for semiconductors was moving toward normalization, the market showed signs of slowing
down due to changes in the operating environment, including a decline in personal consumption as
prices rose globally.
In these circumstances, our Group carried out the initiatives outlined in Innovation 2023, our mediumterm management plan that ran through the fiscal year ended March 31, 2023, as part of our aim tosupport the DX efforts of client companies and become more competitive as an innovation service
provider. We are making steady progress in reforming our business structure and strengthening ourmanagement base as we aim to achieve sustainable growth and enhance our corporate value. In thefiscal year under review, we released several new services, such as Cyber Security Management
Support Service and TCloud for SCM (vehicle Traffic Management System for the Logistics Industry),and promoted efforts to strengthen our service platform through joint creation with partners, including
a business alliance with Digital Platformer Corporation.
In the fiscal year ended March 31, 2023, the final year of our medium-term management plan, we
generated net sales of ¥123,899 million (up 3.8% year on year), operating income of ¥5,118 million (up27.6% year on year), ordinary income of ¥5,355 million (up 26.7% year on year), and profit attributableto owners of parent of ¥3,521 million (up 25.8% year on year).
In the Information Network Solution segment, orders, net sales, and order backlog all rose year on
year due to growth in cloud-based contact center services and other services, and an increase in large
orders for equipment installation. However, a shift to services led to a decline in orders for development
and construction. Profit rose year on year due to increased net sales, improved cost of sales.
In the Electronic Devices segment, although advanced order placements and other arrangements byclients, which had continued from the previous fiscal year, decreased to a degree, sales ofsemiconductors and other electronic components and power semiconductors for products related todecarbonization and energy saving were robust among factory automation (FA), industrial, and onboard
automotive device customers, which are our main markets. As a result, although orders declined year
on year, net sales and order backlog increased year on year. Profit rose year on year due to increased
sales, despite an increase in SG&A expenses.
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 the6Group’s sales and profit tend to be concentrated in September and March, the halfway and endpoints ofthe fiscal year.
Information Network Solutions
In the fiscal year ended March 31, 2023, the Information Network Solutions segment booked orders of ¥102,490
million (up 7.9% year on year), net sales of ¥93,905 million (up 1.7% year on year), and operating income of ¥4,155
million (up 22.2% year on year), so all three indicators rose year on year.
Results by business model
Equipment:

Installation of PCs, network equipment, and other equipment progressed for customers in a wide
range of industries, including the public sector, distribution and retail, and transportation. We madeprogress in resolving shipping delays associated with semiconductor shortages that had continued,
and sales, especially on large orders, were robust in the fourth quarter. As a result, the businessgenerated orders of ¥45,068 million (up 16.7% year on year) and net sales of ¥37,934 million (up2.2% year on year). In addition, with revitalized ordering in the fourth quarter, the order backlog grew
substantially year on year to ¥17,442 million (up 69.1% year on year).

Development and construction: In the fourth quarter, network enhancement and system development projects, suchas network construction for transportation and financial industry clients and electronic medical record
system development for medical institutions, proceeded well. However, due to acceleration of the shift
to cloud-based services (with development and construction work declining as projects shifted to theservice business model), orders and net sales were both lower, at ¥14,039 million (down 8.5% year
on year) and ¥13,840 million (down 4.6% year on year), respectively.
Service:

Because of strengthening the lineup at TSF various cloud-based services, including cloud-based
contact center services, performed well. As a result, orders and net sales were both up year on yearat ¥43,382 million (up 5.7% year on year) and ¥42,121 million (up 3.5% year on year), respectively.
Order backlog grew to ¥3,744 million (up 50.7% year on year) due to the increase in the order backlog
for equipment, which was accompanied by an increase in ancillary maintenance services.

Profit rose year on year due to higher net sales, the increase in service business which had a high profit margin,and
improved cost of sales for equipment orders, despite an increase in SG&A expenses due to the activation of sales
activities

Electronic Devices
In the fiscal year ended March 31, 2023, the Electronic Devices segment booked orders of ¥32,198
million (down 9.4% year on year), net sales of ¥29,993 million (up 11.1% year on year), and operating
income of ¥954 million (up 61.1% year on year). Net sales and operating income rose year on year
despite a decline in orders year on year.
In the devices business, although advanced order placements and other arrangements by clients,
which had continued from the previous fiscal year, declined to a degree, sales of semiconductors andother electronic components and power semiconductors for products related to energy saving wererobust as the factory automation (FA), industrial equipment, and onboard automotive device markets
remained active. As a result, although orders declined year on year, net sales grew significantly.

7

In the systems business, sales of SSDs for in-vehicle products and HDDs for consumer electronics
declined due to production adjustments caused by semiconductor shortages and the end of sales ofsome products. On the other hand, demand for IT investment in industrial equipment was on the riseand sales of embedded devices and memory storage remained strong. In addition, LCD panels for invehicle devices recovered as semiconductor shortages were resolved. As a result, orders declined
year on year, but net sales remained flat.
Profit rose year on year due to higher net sales, despite increased expenses related to the securingof personnel accompanying expansion in existing businesses and the establishment of new businessmodels.

8

The following tables show sales and orders by segment for the fiscal year ending March, 2023.
Net sales (millions of yen)
Year ended
March 2022
Information Network Solutions
92,319Equipment
37,127Development and construction
14,501Service40,690Electronic Devices
26,996
Total
119,316
Note: Inter-segment transactions are offset and eliminated.

Year ended March 2023
Versus previous year
93,905
1,586
101.7%
37,943816
102.2%
13,84095.4%(660)
42,121
1,431
103.5%
29,9932,996
111.1%
123,899
4,582
103.8%

Orders (millions of yen)
Year ended
March 2022
Information Network Solutions
95,008Equipment
38,620Development and construction
15,342Service
41,046
Electronic Devices
35,550Total
130,559
Note: Inter-segment transactions are offset and eliminated.

Year ended March 2023
Versus previous year
102,4907,481
107.9%
45,0686,448
116.7%
14,039(1,303)
91.5%
43,382
2,335
105.7%
32,198(3,352)
90.6%
134,6884,128
103.2%

Order backlog (millions of yen)
Year ended
March 2022
Information Network Solutions
17,274Equipment
10,318Development and construction
4,472
Service
2,484Electronic Devices
16,436
Total
33,710Note: Inter-segment transactions are offset and eliminated.

9Year ended March 2023
Versus previous year

25,85817,442
4,670
3,744
18,64144,499

8,584
7,124
198
1,260
2,204
10,789149.7%
169.1%
104.4%
150.7%
113.4%
132.0%

(2) Financial position
Assets totaled ¥83,207 million at the end of the year in review, up by ¥3,981 million from the end of theprevious year. The main factor of increase was a ¥4,199 million increase in inventories.
Liabilities totaled ¥47,820 million at the end of the year, up by ¥1,794 million from the end of theprevious year. The main factors behind the increase were a ¥3,958 million increase in Long-termborrowings and a ¥1,836 million increase in Notes and accounts payable - trade, while the main factor of
decrease was a ¥4,150 million decrease in current portion of long-term borrowings.
Net assets totaled ¥35,387 million at the end of the year, up by ¥2,187 million from the end of theprevious year, and the shareholders’ equity ratio was 42.0% (41.5% at the end of the previous year). The
main factors of increase was profit attributable to owners of parent of ¥3,521 million, while the main factor
of decrease was a reduction in retained earnings of ¥932 million due to the payment of dividends fromsurplus.

(3) Cash flows
The Company recorded cash inflows of ¥4,263 million from operating activities, cash inflows of ¥39
million from investing activities, and cash outflows of ¥2,612 million from financing activities.
As a result, cash and cash equivalents increased by ¥1,714 million from the end of the previous year,to ¥20,845 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 ¥4,263 million (¥5,560 million in inflows in year ended
March 2022, a decrease of 23.3%). Major cash inflows included income before income taxes and othersof ¥5,579 million and depreciation of ¥2,124 million yen, while major cash outflows included a ¥4,188
million increase in inventories.
Compared with the previous fiscal year, net cash inflow provided by operating activities declined ¥1,297
million. This mainly reflected a ¥4,361 million increase in inventory assets (¥4,188 million yen increase in
the fiscal year under review versus a ¥173 million decline in the previous fiscal year), which offset a¥2,439 million increase in notes and accounts payable – trade (¥1,817 million increase in the fiscal year
under review versus a ¥621 million decline in the previous fiscal year).
(Cash flows from investing activities)
Cash flows from investing activities came to ¥39 million (¥4 million in outflows year ended March 2022).
Major cash inflows included ¥741 million for proceeds from sale of investment securities, while the major
cash outflows included ¥807 million for purchase of intangible assets.
Compared with the previous fiscal year, net cash inflow provided by investing activities increased ¥44
million. This was mainly due to a ¥778 million decline in expenditures for the purchase of property, plantand equipment (¥283 million in the fiscal year under review versus ¥1,061 million in the previous fiscal
year), which more than covered for a ¥642 million decline in proceeds from sales of property, plant andequipment (¥266 million in the fiscal year under review, versus ¥908 million in the previous fiscal year).

10(Cash flows from financing activities)
Cash flows from financing activities came to ¥2,612 million (¥2,413 million in year ended March 2022,
an increase of 8.2%). Major cash outflows included ¥4,291 million for repayments of long-term borrowingsand ¥1,318 million repayments of finance lease liabilities, while the major cash inflows included ¥4,100
million for proceeds from long-term borrowings.
Compared with the previous fiscal year, net cash outflow used in financing activities increased ¥198
million. The main reason for the increase was a ¥4,130 million increase in repayment of long-termborrowings (¥4,291 million in the fiscal year under review versus ¥161 million in the previous fiscal year)
and a ¥535 million decrease in short-term borrowings (¥323 million decline in the fiscal year under review
versus a ¥211 million increase in the previous fiscal year), which offset a ¥4,100 million increase inproceeds from long-term borrowings (none in the previous fiscal year).

Reference: Cash flow related indicators
Year ended March

2020

2021

2022

Shareholders’ equity ratio (%)
38.4
40.6
41.5
Market value based shareholders’
24.8
38.2
33.1
equity ratio (%)
Interest bearing debt to cash flow
1.7
17.1
2.3
ratio (years)
Interest coverage ratio (x)
56.6
6.1
42.5
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

2023
42.0
33.7
2.6
37.2

*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
We expect to see a further increase in customers' willingness to invest in ICT amid the ongoing trend
toward normalization of economic activity in Japan.
Digital transformation (DX) continues to be an important issue for companies, and to effectively capturesuch needs, we will implement the three-year medium-term plan, Transformation 2026, formulated basedon the newly established long-term vision.
For the fiscal year ending March 31, 2024, we forecast net sales of ¥126,500 million (up 2.1% year onyear), operating income of ¥5,300 million (up 3.6% year on year), ordinary income of ¥5,250 million (down
2.0% year on year), and profit attributable to owners of parent of ¥4,450 million (up 26.4% year on year).

11

The Company will promptly inform our stakeholders if material matters arise due to a change incircumstances or other factors.

(5) Dividend policy and dividends for the year under review and coming year
The Company considers returning profits to shareholders as a management priority. Our basic policy is
to continuously distribute profits twice a year in the form of interim and year-end dividends based on ourbusiness performance, and to enhance corporate and shareholder value by effectively utilizing retained
earnings.
In the fiscal year under review, based on the target consolidated payout ratio of around 30%, we plan to
pay a year-end dividend of ¥36.0 per share, which, combined with an interim dividend of ¥25.0 per share,
would result in an annual dividend of ¥61.0 per share.
For the next fiscal year, we have decided to target a consolidated payout ratio of 40% and set theminimum DOE (dividend on equity ratio) at 3.5% to enhance profit distribution in line with businessperformance and ensure stable dividends. Note that profit attributable to owners of parent, which serves
as the basis for calculating dividend payments, only includes profit resulting from business activities andexcludes extraordinary gains and losses. Based on this, for the next fiscal year, we plan to pay an interim
dividend of ¥38.0 per share and a year-end dividend of ¥38 per share, for an annual dividend of ¥76.0 per
share.

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.

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

AssetsCurrent assets
Cash and deposits
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
Total noncurrent assets

13

As of March 31, 2022

As of March 31, 2023

19,162
380
26,870
4,645
862
7,483
－
1,861
(70)
61,19520,877120
26,867
4,383
878
11,68314
2,377(5)67,196

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

2,122
(1,003)
1,118
7
(6)
1
1,804
4,367
(3,260)
1,106
124
1,217
(868)
349
4,504

135
883
2,053
3,072

45
632
1,933
2,610

4,096
32
4,204
1,247
(52)
9,528
18,030

3,471
28
4,265
1,180
(49)
8,896
16,011

(Millions of yen)

Total assets

14

As of March 31, 2022

As of March 31, 2023

79,226

83,207

(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
Provision for share awards
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

15

As of March 31, 2021

As of March 31, 2022

15,307
1,976
5,137
4,291
1,267
1,268
2,303
3,333
34,88617,144
2,780
4,853
141
888
968
2,513
3,769
33,060

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

4,111
998
7
8,826
28
637
149
14,76047,8209,812
2,581
23,018(2,257)33,1559,812
2,581
25,607(1,979)36,022

1,343

1,132

(37)
145
(1,760)2
193(2,405)(307)(1,076)352
33,19979,226441
35,387
83,207

(2) Consolidated statements of income and comprehensive income(Consolidated statement of income)(Millions of yen)
Fiscal year ended
March 31, 2022
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
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of investment securities
Total extraordinary income
Extraordinary 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

16

Fiscal year ended
March 31, 2023

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

123,899
99,72024,17819,060
5,118

8
104
59
74
43
73
364

5
98
42
73
56
93
370

130
19
150
4,227

114
18
133
5,355

219
219

423
423

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

172
3
22
－
198
5,579
1,545
299
1,844
3,734
213
3,521

(Consolidated statement of comprehensive income)(Millions of yen)
Fiscal year ended
March 31, 2022
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

17

Fiscal year ended
March 31, 2023

2,976

3,734

(142)

(211)

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

39
47
(645)
(769)
2,965

2,627

2,752

178

213

(3) Consolidated statement of changes in net assets
Fiscal year ended March 31, 2022
(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 treasurystock
Net changes of items
other thanshareholders’ equity
Total changes during
the year
Balance at end of the
year

9,812

2,581

21,150(2,472)

76
9,812

2,581

31,072
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

(0)

18

Accumulated other comprehensive income

Disposal oftreasury stock
Net changes of
items other thanshareholders’ equity

Total changes
during year
Balance at end ofyear

Valuation
Deferreddifference
gains oron available
losses on
for salehedgessecurities

NonForeign
Remeasurements
Other
controllingcurrencyof defined benefit comprehensive interests
translation
plans
incomeadjustment

Total net
assets

215
(142)

(33)

93

(87)

(170)

115

(54)

(142)

(33)

93

(87)

(170)

115

1,951

1,343

(37)

145

(1,760)

(307)

352

33,19919

Fiscal year ended March 31, 2023
(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 treasurystock
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

23,018(2,257)33,155
－

9,812

2,581

23,018(2,257)33,155

(932)

(932)

3,521

3,521
(5)

(5)

283

283

－

－

2,588

278

2,867

9,812

2,581

25,607(1,979)36,022

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

1,343

(37)

NonForeign
Remeasurements
Other
controllingcurrencyof defined benefit comprehensive interests
translation
plans
incomeadjustment

145(1,760)

(307)

352

Total net
assets33,199
－

1,343

(37)

145

(1,760)

(307)

352

33,199(932)

Profit attributable toowners of parent

3,521

Purchase oftreasury stock
Disposal oftreasury stock

(5)
283

20

Accumulated other comprehensive income
Valuation
Deferreddifference
gains oron available
losses on
for salehedgessecurities
Net changes of
items other thanshareholders’ equity

Total changes
during year
Balance at end ofyear

NonForeign
Remeasurements
Other
controllingcurrencyof defined benefit comprehensive interests
translation
plans
incomeadjustment

Total net
assets

(211)

39

47

(645)

(769)

89

(679)

(211)

39

47

(645)

(769)

89

2,187

1,132

2

193

(2,405)(1,076)441

35,38721

(4) Consolidated statement of cash flows(Millions of yen)
Fiscal year ended
March 31, 2022
Cash flows from operating activities
Income before income taxes and others
Depreciation and amortization
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 shareawardsInterest and dividend income
Interest expenses
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

22

Fiscal year ended
March 31, 2023

4,430
2,531
90

5,579
2,124
90

(36)

(68)

(111)

209

531

(633)

81

7

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

(104)
114
(419)
22
172
(176)
587
(4,188)
(444)

(621)

1,817

(354)

113

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

1,144
5,947
104
(114)
176
(1,855)44,263

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

Fiscal year ended
March 31, 2023

(17)
5
(1,061)

(0)
－
(283)

908

266

(812)
290
(98)
765

(807)
52
(24)
741

Outflows from payment of loans receivable(2)－

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

4
14
(4)

4
88
39

211

(323)

－
(161)
(1,609)(0)215(1,006)(62)(2,413)

4,100(4,291)(1,318)
(5)
283
(932)
(124)
(2,612)

61

24

3,202

1,714

15,927

19,13019,13020,84523

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

(Changes in accounting policies)(Application of Accounting Standard for Fair Value Measurement)
The Company applied the Accounting Standard for Fair Value Measurement (ASBJ Statement No. 31,
June 17, 2021, “fair value standard” below) from the start of the first quarter. In accordance with thetransitional treatment prescribed in paragraph 27-2 of the fair value standard, the new 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 ¥195
million yen and 121,000 respectively for the year ended March 2022, and ¥21 million yen and 13,300
respectively for the year ended March 2023.
(3) Book value of borrowings applying the gross value method¥266 million in the year ended March 2022, and ¥133 million in the year ended March 2023.
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.

24

(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 by
the Directors’ Compensation BIP trust were ¥421 million and 346,034 respectively in the previous fiscal
year and ¥353 million and 290,547 in the year under review. The book value of treasury stock andnumber of shares held by the Stock-grant ESOP trust were ¥463 million and 458,056 respectively in theprevious fiscal year and ¥427 million and 420,865 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.

26

3. Segment sales, profit or loss, assets, liabilities, and other items
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 externalcustomers
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 income statements.

27

Fiscal year ended March 2023
(Millions of yen)Amountrecorded in
Adjustments consolidated(Note 1, 2, 3)
financialstatements(Note 4)

Reporting segment
Information
Network
SolutionsElectronic
Devices

93,90529,993

123,899－

123,899

24

173

197

(197)

－

93,93030,166124,096(197)

123,899

Segment profit

4,155

954

5,109

8

5,118

Segment assets

64,71921,86086,579(3,372)

83,207

Segment liabilities

41,944

8,967

50,912(3,091)47,820

2,097

27

2,124

－

2,124

90

－

90

－

90

1,266

28

1,294

－

1,294

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 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 net sales in
the consolidated statement of income.

Fiscal year ended March 2023
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, 2021, to March 31, 2022)
Not applicable
Fiscal year under review (April 1, 2022, to March 31, 2023)
Not applicable29

Information on amortization of goodwill and unamortized balance by reportable segment
Fiscal year ended March 2022
(Millions of yen)
Reporting segment
Information
Network
Solutions

Adjustments

Electronic
Devices

Total

Total

Balance at end
135
135
135
－
－
of year
Note: Information on amortization of goodwill is omitted because the same information is disclosed in thesegment information.
Fiscal year ended March 2023
(Millions of yen)
Reporting segment
Information
Network
Solutions

Adjustments

Electronic
Devices

Total

Total
Information
Network
Solutions

Balance at end
45
45
45
－
－
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, 2021, to March 31, 2022)
Not applicable
Fiscal year under review (April 1, 2022, to March 31, 2023)
Not applicable30

(Per share information)
Fiscal year ended March 2022
Net assets per share (yen)Basic earnings per share (yen)Fiscal year ended March 2023

1,853.68
158.47

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

1950.05
197.48

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 121,000 shares held in the Employee Stock Ownership Plan (ESOP) trust
account in the year ended March 2022, and 13,300 shares in the year ended March 2023;
346,034 shares in the Directors' Compensation BIP trust account in the year ended March2022 and 290,547 shares in the year ended March 2023; and 458,056 shares held in the
Stock-grant ESOP trust account in the year ended March 2022 and 420,865 shares in theyear ended March 2023.
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 162,192 shares in the year ended March, 2022 and 63,208 shares in theyear ended March 2023 in the Employee Stock Ownership Plan (ESOP) trust account; 355,751
shares in the year ended March 2022 and 311,721 shares in the year ended March 2023 in the
Directors’ Compensation BIP trust account; and 471,152 shares in the year ended March 2022 and
439,727 shares in the year ended March 2023 in the Stock-grant ESOP trust account.
2. The basis for calculation of basic earnings per share is as follows:
Fiscal year ended
March 2022
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 2023

2,798

3,521

－

－

2,798

3,521

17,656

17,830