Summary of Financial Results for the Fiscal Year Ended August 31, 2022
[Japan GAAP] (Consolidated)
Company
Stock Code
Representative

October 11, 2022
Listed on the TSE

Watts Co., Ltd.

2735
URL: https://www.watts-jp.com/
Fumio Hiraoka, President and CEO
Hidehito Mori,
Contact
T E L: +81-6-4792-3236
Executive Managing Director, Head of Corporate Planning Office
Expected date of annual shareholders’ meeting: November 25, 2022
Expected starting date of dividend payment: November 28, 2022
Expected date of filing of annual securities report: November 25, 2022
Preparation of supplementary financial document: Yes
Results briefing: Yes (for institutional investors)（Rounded down to million yen）

1. Consolidated business results for the fiscal year ended August 2022
(September 1, 2021 through August 31, 2022)(1) Consolidated results of operations(% change from the previous corresponding period)
Sales

Operating profit

Million yen%
Million yen
Year ended Aug. 2022
58,34715.1
998
Year ended Aug. 2021
50,702-4.0
1,669(Note) Comprehensive income:Fiscal year ended August 2022: 866 million yen (-8.0%)
Fiscal year ended August 2021: 942 million yen (25.8%)

Recurring profit

%
-40.2
-5.6

Net income
per share

Diluted net income
per share
Yen
Yen
Year ended Aug. 2022
57.83
Year ended Aug. 2021
72.09
(Reference) Investment earnings/loss on equity-method:
Fiscal year ended August 2022: 7 million yen
Fiscal year ended August 2021: -88 million yen

Million yen
1,148
1,586

Return on
equity
%
6.7
8.9

%
-27.6
-8.3

Net income attributableto owners of parent
Million yen
%
781
-19.1
965
24.7

Ratio of recurring
profit to total assets
%
4.9
7.4

Ratio of operating
profit to sales
%
1.7
3.3

(2) Consolidated financial position
Total assets

Shareholders’ equity
ratio

Net assets

Million yen
As of Aug. 2022
25,600
As of Aug. 2021
21,340(Reference) Shareholders’ equity:
As of August 2022: 11,927 million yen
As of August 2021: 11,222 million yen

Million yen
11,931
11,222

Net assets per
share

%
46.6
52.6

Yen
878.58837.60(3) Consolidated results of cash flows

Year ended Aug. 2022
Year ended Aug. 2021

Cash flows fromoperating activities
Million yen
1,721
378

Cash flows frominvesting activities
Million yen
-975
-778

Cash flows fromfinancing activities
Million yen
-328
-51

Cash and cash equivalents
at the end of period
Million yen
6,687
6,169

2. Dividends
Annual dividendYear ended Aug. 2021
Year ended Aug. 2022
Year ending Aug. 2023
(forecast)End of
1Q
Yen-

End of
2Q
Yen
0.00
0.00
0.00

End of3Q
Yen-

Year-end

Annual

Yen
22.00
15.00
15.00

Yen
22.00
15.00
15.00

Total
dividends(Total)Dividend
payout ratio(Consolidated)

Million yen
296
203

%
30.5
25.9
38.4

Rate of total
dividend to
net assets(Consolidated)
%
2.7
1.7

3．Forecast of consolidated business results for the fiscal year ending August 2023
(September 1, 2022 through August 31, 2023)(% change from the previous corresponding period)
Sales

For the six months
ending Feb. 2023
Year ending Aug. 2023

Operating profit

Net income
attributable to ownersof parent

Recurring profit

Net income pershare

Million yen%

Million yen%

Million yen%

Million yen%

Yen29,630

3.9

380

-40.4

340

-49.9

220

-39.1

16.21

60,500

3.7

920

-7.9

850

-26.0

530

-32.2

39.04

*Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries accompanying changes inthe scope of consolidation): Yes
Newly included: 1 (Ontsu F.RETAIL Co., Ltd.)(2) Changes in accounting policies, accounting estimates and restatement①Changes in accounting policies associated with revision of accounting standards:②Changes in accounting policies other than ①③Changes in accounting estimates④Restatement: Yes: None: None: None(3) Shares outstanding (common stock)① Number of shares outstanding at the end of period (treasury stock included)
As of August 2022
13,898,800 shares
As of August 2021
13,958,800 shares② Treasury stock at the end of period:
As of August 2022
323,487 shares
As of August 2021
560,874 shares③Average number of stock during period
Fiscal year ended August 2022
13,508,204 sharesFiscal year ended August 2021
13,397,926 shares(Note) The number of treasury stock at the end of period includes the Company’s shares held by the share issuance trust for directors(FY8/22: - shares, FY8/21: 60,000 shares). In addition, the Company's shares owned by the share issuance trust for directors areincluded in treasury stock deducted for calculation of the average number of shares during period (FY8/22: 27,945 shares,
FY8/21: 60,000 shares).

* Financial summary is not subject to the auditing procedures by certified public accountants or auditing firms* Explanation regarding appropriate use of business forecasts and other special instructions(Caution concerning forward-looking statements)
The forward-looking statements regarding future performance in this material are based on information currently
available to the Company and certain assumptions that the Company deems to be reasonable at the time this report was
prepared. Therefore, the Company does not make promises about the achievements. Actual results may differ
significantly from the forecasts due to various factors.
Please refer to “(4) future outlook” of “1. Results of operations” on page 4 for the suppositions that form theassumptions for business forecasts and cautions concerning the use of business forecasts.

1. Results of Operations………………………………………………………………………………………………………..
(1) Overview of operating results for the fiscal year under review………………………………………………………….
(2) Overview of financial position for the fiscal year under review…………………………………………………………
(3) Overview of cash flows for the fiscal year under review………………………………………………………………...
(4) Future outlook……………………………………………………………………………………………………………
2. Basic policy regarding selection of accounting standards…………………………………………………………………..
3. Consolidated Financial Statements…………………………………………………………………………………………
(1) Consolidated Balance Sheets……………………………………………………………………………………………
(2) Consolidated Statements of Income and Statements of Comprehensive Income………………………………………
(Consolidated Statements of Income) …………………………………………………………………………………
(Consolidated Statements of Comprehensive Income) ………………………………………………………………..
(3) Consolidated Statements of Changes in Net Assets…………………………………………………………………….
(4) Consolidated Statements of Cash Flows………………………………………………………………………………..
(5) Notes to Consolidated Financial Statements……………………………………………………………………………
(Notes on going concern assumption) …………………………………………………………………………………..
(Changes in accounting policies) ……………………………………………………………………………………….
(Changes in reporting method) ………………………………………………………………………………………….
(Segment information) …………………………………………………………………………………………………..
(Per share information) ………………………………………………………………………………………………….
(Important subsequent events) …………………………………………………………………………………………..
4. Other…………………………………………………………………………………………………..……………………..
(1) Changes in directors……………………………………………………………………………..……………………….
(2) Sales information…………………………………………………………………………..……………………………..

- 1 -

2
2
3
3
4
4
5
5
7
7
8
9
11
12
12
12
12
12
13
14
15
15
15

1. Results of Operations(1) Overview of operating results for the fiscal year under review
In the fiscal year under review, the number of COVID-19 cases remained high due to the seventh wave of the infection.
Meanwhile, the Japanese government took various measures, such as stimulating consumption with accumulated householdsavings and removing restrictions on activities during the holiday season, in order for people to return to normal life during the
COVID-19 crisis. However, resource prices continued to soar due to the prolonged invasion of Ukraine by Russia with unclear
prospects, and the rapid depreciation of the yen against the dollar due to the large divergence in monetary policy between Japanand the U.S. reached a level not seen in a quarter of a century. As a result, higher living-related costs, including energy prices,
have led to decreased consumer confidence.
Given this environment, in addition to the 100-Yen shop business in Japan, the Company, which operates the “Watts”, “Watts
with”, “meets.”, “silk”, etc., has been working on diversifying its revenue sources by undertaking other domestic businesses,
centering on the sale of life-style goods and discount goods as well as overseas business.
In the domestic 100-Yen shop business, the Company upgraded its online shop on September 1, 2021, and substantially
increased the product lineups by approximately 10 times to more than 10,000 items. We also began handling Buona Vita andTokino:ne products. In addition, we are introducing self-checkout POS registers to improve in-store productivity through more
efficient purchase process. We are also working to introduce and renew handmade tools and materials sections to further develop
existing shops.
As for new shop openings, the Company opened 193 shops to the full-year plan of 230 shops. Furthermore, on October 1, theCompany acquired all shares of Ontsu F･RETAIL Co., Ltd., which operates 145 100-Yen shops named “FLET’S”etc.,(including 5 FC shops), making it a subsidiary. There were 61 shop closings (including 5 franchised shops), including certain
unprofitable shops and unpredictable closing of shops where the Company’s shops were located in. As a result, the total numberof 100-Yen shops at the end of the fiscal year under review was 1,641, which includes 1,618 directly managed shops (netincrease of 277), and 23 franchised/other shops (unchanged). Of these, the number of "Watts" and "Watts with", the Watts brandshops, increased to 1,029 (net increase of 204), accounting for about 60% of the total.
As for the domestic other business, “Buona Vita,” a life-style goods shop offering comfortable and joyful life, opened aconsignment shop in our 100-Yen shop to supplement the "fashionable taste" to the 100-Yen shop and enhance synergy
between businesses. At the end of the fiscal year under review, the number of Buona Vita shops was 23 (net increase of 2).
“Tokino:ne”, a household items shop, opened the second shop at AEON mall in Chiba City, Chiba Prefecture in March; thenumber of shops was 2. “Value- 100,” the fresh-foods supermarket collaboration, continues with 1 shop (unchanged). "Real", adiscount shop, was 6 shops (unchanged).
Regarding the overseas operation, the Company operates “KOMONOYA”, a fixed-price shop mainly in Southeast Asia. At
the end of the fiscal year under review, “KOMONOYA” operates 37 shops in Thailand (net decrease of 4), and 14 shops in Peru
(net decrease of 5). The Company closed 2 shops in Malaysia and 3 shops in Vietnam. In China, there were 4 shops (unchanged)
named “小物家园”(KOMONOKAEN), a fixed price shop. The total number of own-brand shops “KOMONOYA” and “小物家园”(KOMONOKAEN) was 55 (net decrease of 14).
Through the acquisition of 100-Yen shop operators Ontsu F･Retail Co., Ltd. and Nippan Co., Ltd., sales increased to 58,347
million yen (up 15.1% YoY, 100.6% to the plan) for the fiscal year under review.
Due to the slow growth in the 100-Yen shop same-store sales at 97.9% YoY and amortization of goodwill from M&A,
operating profit was 998 million yen (down 40.2% YoY, 90.8% to the plan) and recurring profit was 1,148 million yen (down
27.6% YoY, 99.9% to the plan).
On the other hand, net income attributable to owners of parent was 781 million yen (down 19.1% YoY, 94.1% to the plan).
This was mainly due to a decrease in tax expenses resulting from the absorption-type merger of our consolidated subsidiaries,
and the recording of deferred tax assets and income taxes-deferred (gains) resulting from the generation of tax loss
carryforwards. (*Year on year: comparison with the results for the previous fiscal year. Ratio to plan: ratio to the business
forecasts for the fiscal year ended August 2022 which were announced in the “Notice Concerning Revision to Business
Forecasts” dated July 11, 2022.)
Since the Group operates under a single segment consisting of the operation of 100-Yen shops associated business, segment
information is omitted.

- 2 -(2) Overview of financial position for the fiscal year under review(Assets)
As of the end of the fiscal year under review, current assets stood at 18,561 million yen, an increase of 2,511 million yen
from the end of the previous fiscal year. This was mainly due to increases of 1,302 million yen for merchandise and finishedgoods, 536 million yen for accounts receivable-trade, and 518 million yen for cash and deposits.
Fixed assets stood at 7,039 million yen, increased by 1,747 million yen from the end of the previous fiscal year. This was
mainly due to an increase of 526 million yen in goodwill associated with the acquisition of Ontsu F･Retail Co., Ltd. and Nippan
Co., Ltd., as well as increases of 475 million yen in guarantee deposits, 314 million yen in buildings and structures, 275 million
yen in tools, furniture and fixtures, and 130 million yen in deferred tax assets.
As a result, total assets stood at 25,600 million yen, increased by 4,259 million yen from the end of the previous fiscal year.
(Liabilities)
As of the end of the fiscal year under review, current liabilities stood at 9,932 million yen, an increase of 1,312 million yen
from the end of the previous fiscal year. This was mainly due to an increase of 825 million yen in notes and accounts payabletrade and 655 million yen in electronically recorded obligations, despite a decrease of 271 million yen in income taxes payable.
Fixed liabilities stood at 3,736 million yen, increased by 2,238 million yen from the end of the previous fiscal year. Thiswas mainly due to increases of 1,915 million yen in long-term loans payable and 222 million yen in asset retirement
obligations.
As a result, total liabilities stood at 13,669 million yen, increased by 3,550 million yen from the end of the previous fiscal year.
(Net assets)
As of the end of the fiscal year under review, total net assets stood at 11,931 million yen, an increase of 708 million yen fromthe end of the previous fiscal year. This was mainly due to an increase of 485 million yen in retained earnings and a decrease of
139 million yen in treasury stock resulting from the retirement of treasury stock and the disposal of treasury stock as restricted
stock compensation.
As a result, shareholders’ equity ratio stood at 46.6% (52.6% at the end of the previous fiscal year).
(3) Overview of cash flows for the fiscal year under review
Cash and cash equivalents (hereinafter referred to as “cash”) at the end of the fiscal year under review amounted to 6,687
million yen, an increase of 518 million yen from the end of the previous fiscal year.
Details and breakdown of each cash flow in the fiscal year under review are as follows.
(Cash flows from operating activities)
Net cash provided by operating activities was 1,721 million yen (378 million yen was provided in the previous fiscal year).
This was mainly due to income before income taxes and minority interests of 975 million yen, an increase in notes and accounts
payable-trade of 657 million yen, and depreciation and amortization of 571 million yen. Cash was used mainly for income taxes
paid of 674 million yen.
(Cash flows from investing activities)
Net cash used in investing activities was 975 million yen (778 million yen was used in the previous fiscal year). This was
mainly due to payments for lease and guarantee deposits of 567 million yen and payments for purchase of property, plant andequipment of 542 million yen.
(Cash flows from financing activities)
Net cash used for financing activities was 328 million yen (51 million yen was used in the previous fiscal year). This was
mainly due to long-term loans payable of 3,000 million yen, repayments of long-term loans payable of 2,813 million yen, cash
dividends paid of 296 million yen, and a net decrease in short-term loans payable of 200 million yen.

- 3 -(4) Future outlook
As for the COVID-19 situation, Japan is likely to move from the pre-COVID to the post-COVID era, aided by the progress of
vaccination against the Omicron strain, the lifting of the restriction on the entry of foreign tourists, and a decrease in the demandsupply gap. However, depending on the existence of effective government-led fiscal policies and current trends in the
depreciation of the yen and resource prices, as well as the emergence of new variant of the virus, corporate activities andconsumer spending may stall.
Given this situation, the Group continues to make every effort to offer value-for-money products by investing accumulated
earnings in product development, through low-cost opening and closing of shops and low-cost shop operations. Furthermore, tomeet the diversified consumer needs, the Group will continue to aim for being the 100-Yen shop where customers can find avalue of more than 100 yen.
Furthermore, with the aim of building a new revenue source to complement the 100-Yen shop business, the Group is actively
working on developing lines like “Buona Vita”, “Tokino:ne” and “Real”, to provide the new driving force for further growth in
the future.
As for the overseas business, the Company will strive to expand existing business and develop new markets, in order to further
expand the sales share within the Group and to earn profits.
Based on the above, the Company expects the following performance for the next fiscal year: sales of 60,500 million yen (up3.7% year on year), operating profit of 920 million yen (down 7.9% year on year), recurring profit of 850 million yen (down
26.0% year on year) and net income attributable to owners of parent of 530 million yen (down 32.2% year on year).
(Reference) Cash flow indicators
FY8/18FY8/19FY8/20FY8/21

FY8/22Equity ratio (%)

52.2

47.1

48.7

52.6

46.6

Market value equity ratio (%)

64.5

38.3

58.5

55.7

38.0

Interest-bearing debt to cash flows ratio (years)

1.7

0.4

1.4

3.0

1.7

157.9

522.6

197.5

30.8

157.1

Interest coverage ratio (times)(Notes) Equity ratio: Equity/Total assets
Market value equity ratio: Total market capitalization/Total assets
Interest-bearing debt to cash flows ratio: Interest-bearing debt/Operating cash flow
Interest coverage ratio: Operating cash flow/Interest payment
1. Total market capitalization is calculated by multiplying closing stock price at the end of the period by the total
number of shares issued at the end of the period (excluding treasury stock).
2. Net cash provided by operating activities in the consolidated statements of cash flows is used as ‘Operating cash
flow.’
3. Interest-bearing debt includes all debt on which interest is paid reported on the consolidated balance sheet.
4. For interest payment, interest expenses paid in the consolidated statements of cash flows are used.

2. Basic policy regarding selection of accounting standards
In order to secure comparability with domestic peer companies, the Company applies Japanese accounting standards.

- 4 -3. Consolidated Financial Statements(1) Consolidated Balance Sheets(Thousands of yen)Previous fiscal year
(August 31, 2021)
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade
Merchandise and finished goods
Raw materials and supplies
Consumption taxes receivable
Other
Allowance for doubtful accounts
Total current assets
Noncurrent assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation and impairment loss
Buildings and structures, net
VehiclesAccumulated depreciation and impairment loss
Vehicles, net
Tools, furniture and fixtures
Accumulated depreciation and impairment loss
Tools, furniture and fixtures, net
Land
Leased assets
Accumulated depreciation and impairment loss
Leased assets, net
Construction in progress
Total property, plant and equipment
Intangible assets
Amortization of goodwill
Other
Total intangible assets
Investments and other assets
Investment securities
Deferred tax assets
Guarantee deposits
Other
Allowance for doubtful accounts
Total investments and other assets
Total noncurrent assets
Total assets- 5 -Fiscal year under review(August 31, 2022)

6,169,208
2,150,910
7,431,457
12,12375,956
232,481-22,483
16,049,656

6,687,848
2,687,168
8,734,082
25,84722,876431,169-27,599
18,561,392

2,055,446-1,313,149
742,297
26,266-20,833
5,432
3,729,454-3,184,361
545,092
257,800
27,623-26,034
1,589
1,552,212

4,008,560-2,951,551
1,057,009
32,337-26,989
5,348
4,882,184-4,061,385
820,798
257,800
111,042-101,363
9,678
5,000
2,155,635

12,395599,833
612,229

538,691
567,785
1,106,477

327,430
393,3902,289,987
123,665-7,574
3,126,899
5,291,340
21,340,997

350,185
523,698
2,765,694
144,709-7,2383,777,048
7,039,161
25,600,554

(Thousands of yen)Previous fiscal year
(August 31, 2021)
Liabilities
Current liabilities
Notes and accounts payable-trade
Electronically recorded obligations
Short-term loans payable
Current portion of long-term loans payable
Income taxes payable
Accrued consumption taxes
Provision for bonuses
Other
Total current liabilities
Noncurrent liabilities
Long-term loans payable
Retirement benefit liability
Provision for directors’ retirement benefits
Provision for directors' stock-based benefits
Asset retirement obligations
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-sale securities
Foreign currency translation adjustment
Total accumulated other comprehensive income
Stock acquisition right
Total net assets
Total liabilities and net assets- 6 -Fiscal year under review(August 31, 2022)

3,118,081
3,145,453
200,000
528,247
396,644
129,894
186,679
915,676
8,620,678

3,943,822
3,801,090
694,163
124,876
170,774
126,657
1,071,372
9,932,757

396,084
324,078
30,22393,938424,171229,683
1,498,180
10,118,858

2,311,910
412,913
34,295646,815
330,8443,736,777
13,669,535

440,297
1,354,136
9,729,641-273,120
11,250,955

440,297
1,348,550
10,214,752-133,386
11,870,213

9,615-38,432-28,817
11,222,138
21,340,997

4,962
51,85456,816
3,989
11,931,019
25,600,554

(2) Consolidated Statements of Income and Statements of Comprehensive Income(Consolidated Statements of Income)(Thousands of yen)Previous fiscal year
(from September 1, 2020
to August 31, 2021)
Sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating revenues
Interest income
Dividends income
Equity in earnings of affiliates
Foreign exchange gains
Royalty income
Compensation income
Subsidy income
Other
Total non-operating income
Non-operating expenses
Interest expenses
Early-withdrawal penalty
Share of loss of entities accounted for using equity
methodCompensation expenses
Other
Total non-operating expenses
Recurring profit
Extraordinary income
Surrender value of insurance
Gain on sale of investment securities
Gain on sales of noncurrent assets
Insurance claim income
Gain on debt exemption
Provision for directors' stock-based benefits
Total extraordinary income
Extraordinary loss
Loss on retirement of noncurrent assets
Impairment loss
Loss on disaster
Total extraordinary losses
Income before income taxes and minority interests
Income taxes-current
Income taxes-deferred
Total income taxes
Net income
Net income attributable to owners of parent- 7 -Fiscal year under review(from September 1, 2021
to August 31, 2022)

50,702,569
31,076,847
19,625,721
17,956,171
1,669,549

58,347,501
36,066,010
22,281,490
21,282,978998,512

1,602
998
14,907
3,741
5,239
2,465
9,405
38,360

2,220
1,009
7,952
119,255
3,226
17,535
15,49014,638181,329

4,926
1,320
88,514

10,696
4,860-

20,0406,454
121,256
1,586,653

8,874
7,075
31,505
1,148,335

5,821
6,866
231
8,532
291,302
312,755

6,252
945
29,77736,9757,131
305,506
312,638
1,586,770
608,760
12,179620,940
965,830
965,830

32,616
176,170
1,248
210,035
975,275
324,854-130,764
194,090
781,185
781,185

(Consolidated Statements of Comprehensive Income)Net income
Other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Share of other comprehensive income of associates
accounted for using equity method
Total other comprehensive income
Comprehensive income(Breakdown)Comprehensive income attributable to owners ofparentPrevious fiscal year
(from September 1, 2020
to August 31, 2021)
965,830(Thousands of yen)
Fiscal year under review(from September 1, 2021
to August 31, 2022)
781,185-6,242-13,803-4,652
61,276-3,46929,009-23,515
942,31485,633866,818

942,314866,818- 8 -(3) Consolidated Statements of Changes in Net Assets
Previous fiscal year (from September 1, 2020 to August 31, 2021)(Thousands of yen)
Shareholders’ equity
Capital stock
Balance at the beginning of
period under review
Changes of items during theperiodCapital surplus

440,297

Retained earnings

1,354,136

8,965,680

Total shareholders’equityTreasury stock-273,120

10,486,994

Dividends from surplus-201,868-201,868

Net income attributableto owners of parent

965,830

965,830

Net changes of items
other than shareholders'equityTotal changes of items during
the period
Balance at the end of period
under review--

763,961-

763,961

440,297

1,354,136

9,729,641-273,120

11,250,955

Accumulated other comprehensive income

Balance at the beginning of
period under review

Valuation difference on
available-for-salesecurities

Foreign currencytranslation adjustment

Total accumulated
other comprehensive
income15,857-21,158-5,301

Total net assets

10,481,692

Changes of items during theperiodDividends from surplus-201,868

Net income attributableto owners of parent

965,830

Net changes of items
other than shareholders'equity-6,242-17,273-23,515-23,515

Total changes of items during
the period-6,242-17,273-23,515

740,445

Balance at the end of period
under review

9,615-38,432-28,817

11,222,138- 9 -Fiscal year under review (from September 1, 2021 to August 31, 2022)(Thousands of yen)
Shareholders’ equity
Capital stock
Balance at the beginning of
period under review

Capital surplus

440,297

1,354,136

Retained earnings
9,729,641

Total shareholders’equityTreasury stock-273,120

11,250,955

Changes of items during theperiodDividends from surplus-296,074-296,074

Net income attributableto owners of parent

781,185

781,185

Disposal of treasury shares

60,47373,673

134,147

Cancellation of treasury
shares-66,060

66,060-Net changes of items
other than shareholders'equityTotal changes of items during
the period--5,586

485,111

139,733

619,258

Balance at the end of period
under review

440,297

1,348,550

10,214,752-133,386

11,870,213

Accumulated other comprehensive income

Balance at the beginning of
period under review

Valuation difference
on available-for-salesecurities

Foreign currencytranslation adjustment

Total accumulated
other comprehensive
incomeStock acquisition right

9,615-38,432-28,817-

Total net assets

11,222,138

Changes of items during theperiodDividends from surplus-296,074

Net income attributableto owners of parent

781,185

Disposal oftreasury shares

134,147

Cancellation oftreasury shares-

Net changes of items
other than shareholders'equity-4,65290,286

85,633

3,989

89,622

Total changes of items during
the period-4,65290,286

85,633

3,989

708,880

Balance at the end of period
under review

4,962

51,85456,816

3,989

11,931,019- 10 -

(4) Consolidated Statements of Cash Flows(Thousands of yen)

Net cash provided by (used in) operating activities
Income before income taxes and minority interests
Depreciation and amortization
Impairment loss
Amortization of goodwill
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for directors' bonuses
Increase (decrease) in liabilities relating to retirement
benefits
Increase (decrease) in provision for directors’
retirement benefits
Increase (decrease) in provision for directors' stockbased benefits
Increase (decrease) in provision for loss on businessliquidation
Interest and dividends income
Interest expenses
Loss (gain) on sale of investment securities
Loss on retirement of noncurrent assets
Gain on debt exemption
Decrease (increase) in accounts receivable-trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable-trade
Increase (decrease) in accrued consumption taxes
Other
SubtotalInterest and dividends income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
Net cash provided by (used in) investing activities
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Payments for retirement of property, plant and equipment
Payments for asset retirement obligations
Payments for lease and guarantee deposits
Proceeds from collection of lease and guarantee deposits
Proceeds from sale of investment securities
Proceeds from purchase of shares of subsidiaries resulting inchange in scope of consolidation
Other
Net cash provided by (used in) investing activities
Net cash provided by (used in) financing activities
Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable
Repayment of long-term loans payable
Repayment of lease obligations
Cash dividends paid
Other
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period- 11 -

Previous fiscal year
(from September 1, 2020
to August 31, 2021)

Fiscal year under review(from September 1, 2021
to August 31, 2022)

1,586,770
375,722305,506
5,721-3,958-17,007-17,900
26,149975,275
571,326
176,170
120,930
2,670-60,02288,834

2,451

4,071

28,693-93,938-75,596--2,6004,926-6,866
7,131-291,302
188,585-327,397-902,068-290,251
172,169
768,877
3,567-12,298-381,885
378,261-3,23010,696-945
32,616-168,989-65,044657,740
70,22886,0492,404,439
3,213-10,957-674,774
1,721,920-319,611
1,660-442,354-68,332-81,771
67,20916,183-542,040-107,936-14,520-8,898-567,262
66,367
6,026-

191,877

48,043-778,973

600-975,787

200,000
400,000-511,510-6,286-201,671
67,500-51,968
30,540-422,139
6,591,348
6,169,208-200,000
3,000,000-2,813,810-18,758-296,038-328,607
101,113518,639
6,169,208
6,687,848

(5) Notes to Consolidated Financial Statements(Notes on going concern assumption)
Not applicable.
(Notes if there is a significant change in the amount of shareholders' equity)
Based on a resolution of the Board of Directors meeting held on October 12, 2021, the Company disposed of 178,387 sharesof treasury stock as restricted stock compensation. In addition, the Company cancelled 60,000 shares of its treasury stock pursuant
to the resolution of the Board of Directors meeting on February 21, 2022. As a result, capital surplus and treasury stock decreased
by 5,586 thousand yen and 139,733 thousand yen, respectively.
As a result, at the end of the fiscal year under review, capital surplus was 1,348,550 thousand yen, and treasury stock was
133,386 thousand yen.
(Changes in accounting policies)(Application of accounting standard for revenue recognition)
The Company has applied the "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020;
hereinafter the "Accounting Standard for Revenue Recognition") and other standards from the beginning of the fiscal year underreview.
The Company follows the transitional treatment stipulated in the provisions of paragraph 84 of the Accounting Standard for
Revenue Recognition. The adoption of the Accounting Standard for Revenue Recognition did not have a material impact on the
consolidated financial statements or retained earnings at the beginning of the fiscal year.
(Application of accounting standard for calculation of fair value)
The Company has applied the Accounting Standard for Calculation of Fair Value (ASBJ Statement No. 30, July 4, 2019,
hereinafter referred to as the "Accounting Standard for Calculation of Fair Value") and other standards from the beginning of the
fiscal year under review. The Company has decided to apply the new accounting policy stipulated by the Accounting Standard
for Calculation of Fair Value, etc. in accordance with the transitional treatment stipulated in paragraph 19 of the AccountingStandard for Market Value and paragraph 44-2 of the Accounting Standard for Financial Instruments (ASBJ Statement No. 10,
July 4, 2019).
There is no impact on the consolidated financial statements.
(Changes in reporting method)
Consolidated Balance Sheets
Goodwill, which was included in "Other" under "Intangible assets" in the previous fiscal year, is separately stated from thefiscal year under review because it exceeded 1/100 of the total amount of assets.
To reflect this change in reporting method, the consolidated financial statements for the previous fiscal year have been
reclassified.
As a result, 612,229 thousand yen presented in "Other" under "Intangible assets" in the consolidated balance sheets for theprevious fiscal year has been reclassified as 12,395 thousand yen for "Goodwill" and 599,833 thousand yen for "Other."(Segment information)
Since the Group has a single segment consisting of the operation of 100-Yen shops and associated business, thisinformation is omitted.

- 12 -

(Per share information)
Previous fiscal year
(from September 1, 2020
to August 31, 2021)
Net assets per share

Fiscal year under review(from September 1, 2021
to August 31, 2022)

837.60 yen

878.58 yen

Net income per share
72.09 yen
57.83 yen
(Notes) 1. Diluted net income per share is not presented because there were no dilutive shares in the previous fiscal year, andtherefore there were no dilutive shares in the fiscal year under review.
2. The Company's shares owned by the share issuance trust for directors are included in the treasury stock deducted in thecalculation of the total number of shares outstanding at the end of period, which is the basis for calculating net assets per
share. (previous fiscal year: 60,000 shares, fiscal year under review: - shares).
3. The Company's shares owned by the share issuance trust for directors are included in the treasury stock deducted in thecalculation of the average number of shares during period, which is the basis for calculating net income per share.
(previous fiscal year: 60,000 shares, fiscal year under review: 27,945 shares).
4. The basis for calculating net income per share is as follows.

Net income attributable to owners of parent (thousand yen)Previous fiscal year

Fiscal year under review(from September 1, 2020
to August 31, 2021)(from September 1, 2021
to August 31, 2022)

965,830

781,185

Amount that does not belong to common shareholders(thousand yen)--

Net income attributable to owners of parent available tocommon shareholders(thousand yen)

965,830

781,185

Average number of common shares during the period(shares)

13,397,926

13,508,204

Outline of dilutive shares not included in the calculation ofdiluted net income per share due to the absence of dilutive
effects.

- 13 --

Stock acquisition rights by
resolution of the Board of
Directors on March 22, 2022
(Number of stock acquisitionrights issued: 1,246
Common shares: 124,600)

(Important subsequent events)(Transactions under common control)
The Group's 100-Yen shop business is operated by its sales subsidiaries Watts East Japan Sales Co., Ltd. and Watts West Japan
Sales Co., Ltd. On October 1, 2021, the Company acquired the shares of Ontsu F Retail Co., Ltd., which operates a 100-Yen shop
business, making it a subsidiary. The Company has now determined that the integration of their business with the Company's
100-Yen shop business has been almost completed, and reorganized the business to match the actual operation method.
1. Overview of absorption-type company split transactions between consolidated subsidiaries(1) The name of the relevant business and the outline of the business
Names of the business: Businesses operated by Ontsu F Retail Co., Ltd. in Eastern Japan (Northern Japan,
Koshinetsu, Kanto, Tokai regions)
Outline of the business: Operation of 100-Yen shops, etc.
(2) Date of business combination
September 1, 2022
(3) Legal form of business combination
Absorption-type company split with Ontsu F Retail Co., Ltd. as the splitting company and Watts East Japan
Sales Co., Ltd. as the successor company.
2. Overview of absorption-type merger transactions between consolidated subsidiaries(1) Name of the merged company and the outline of the business① Merging company (surviving company)
Name of the company: Watts West Japan Sales Co., Ltd.
Outline of the business: Operation of 100-Yen shops, etc.
② Merged company (absorbed company)
Name of the company: Ontsu F.RETAIL Co., Ltd.
Outline of the business: Operation of 100-Yen shops, etc.
(2) Date of business combination
September 1, 2022
(3) Legal form of business combination
Absorption-type merger with Ontsu F Retail Co., Ltd. as the splitting company and Watts West Japan Sales Co.,
Ltd. as the successor company.
3. Summary of Accounting Procedures Implemented
Based on the "Accounting Standard for Business Combinations" and the "Guidance on Accounting Standard for Business
Combinations and Accounting Standard for Business Divestitures," these transactions are accounted for as transactions undercommon control.

- 14 -

4. Other(1) Changes in directors① Change in the representative director
No items to report② Changes in other directors
No items to report(2) Sales information
Since the Group operates under a single segment, the figures are based on sales by region and business division.
Business Divisions

Area

Amount(thousand yen)

Hokkaido area

2,207,154

Tohoku area

2,173,962

Kanto area

14,438,540

Chubu area

7,559,167

Kinki area

14,819,397

Chugoku/Shikoku area

5,640,830

Kyushu area

4,988,221

100-Yen shop business

51,827,275

Wholesale

6,400,696

Revenue from contracts with customers

58,227,971

Other revenue

119,529

Sales to outside customers

58,347,501(Note) As described in "3. Consolidated Financial Statements, (5) Notes to Consolidated Financial Statements (Changes inaccounting policies)," the Company has applied the revenue recognition accounting standards from the beginning of
the fiscal year under review. As a result, the method of aggregating sales in the “Sales information” has been changed
to conform to that method beginning in the fiscal year under review.
Comparative information with the previous fiscal year is omitted for the fiscal year under review.

- 15 -