DAIICHIKOSHO

CO.,

LTD.

Translation
This report is a translation of excerpts from original Japanese Flash Report and for reference purpose only. In case of discrepancy between this reportand original Japanese Flash Report, the latter shall prevail.

FY2021, the year ended March 31, 2022

Flash Report on the Consolidated Results for the Year Ended March 31, 2022
[JGAAP]May 12, 2022

Company Name:
DAIICHIKOSHO CO., LTD.
Stock Exchange Listing: Tokyo Stock Exchange
Code Number:
7458
URL:
https://www.dkkaraoke.co.jp/
Representative:
Tadahiro Hoshi, President
Contact:
Yasuhisa Nishihara, General Manager, Accounting Department
Phone:+81-3-3280-2151
Date of the Ordinary General Meeting of Shareholders: June 24, 2022
Start Date for Dividend Payment:
June 27, 2022
Scheduled Date to Submit the Securities Report:
June 28, 2022
Availability of Supplementary Briefing Material on Financial Results: Available
Schedule of Financial Results Briefing Session: None
(Amounts below one million yen are truncated.)

1. Consolidated Performance for the Year Ended March 31, 2022 (From April 1, 2021, to March 31,
2022)(1) Consolidated operating results(Percentage figures indicate increase/decrease from a year earlier.)
Net sales
Millions of yen

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

94,78793,316

Operating income%
1.6(36.2)

Millions of yen(289)(2,693)

Ordinary income%――

Millions of yen

888(1,194)%――

Net income attributable to
Basic earnings per shareowners of parent
Millions of yen%
Yen
Year ended March 31, 2022
5,196
―
95.21
Year ended March 31, 2021
(18,782)―(338.54)(Note) Comprehensive income:Year ended March 31, 2022: 5,170 million yen ― %Year ended March 31, 2021: (17,514) million yen ― %Fully diluted net income
per share
Yen
95.07
―

Ordinary income to total
assets%%Year ended March 31, 2022
5.0
0.5Year ended March 31, 2021
(15.7)(0.6)(Reference) Equity in net income of unconsolidated subsidiaries and affiliates:
Year ended March 31, 2022: ― million yen
Year ended March 31, 2021: ― million yen

Operating income to net
sales
%
(0.3)
(2.9)

Return on equity

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(2) Consolidated financial position
Total assets

105,160
106,030

%
57.4
55.8

Net assets per share
Yen
1,896.65
1,912.19

Net cash providedby (used in)operating activities

Net cash providedby (used in)investing activities

Net cash providedby (used in)financing activities

Cash and cash
equivalents at endof period

Millions of yen

Millions of yen

Millions of yen

Millions of yen

18,165
7,755(9,297)(9,539)As of March 31, 2022
As of March 31, 2021
(Reference) Shareholders’ equity:
As of March 31, 2022:
As of March 31, 2021:

Net assets

Millions of yen

Millions of yen

180,389
186,795

Equity ratio

103,543 million yen
104,258 million yen(3) Consolidated cash flows

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

(8,487)
22,174

68,12567,6802. DividendYear ended March 31, 2021
Year ended March 31, 2022
Year ending March 31, 2023
(forecast)First Quarter
Yen――

Second Quarter
Yen
56.00
56.00

Annual dividend
Third Quarter
Yen――

Year-end
Yen
57.00
57.00

―

56.00

―

57.00

Aggregate amount ofdividend (total)

Payout ratio (consolidated)

Millions of yen

Year ended March 31, 2021
Year ended March 31, 2022
Year ending March 31,
2023 (forecast)

%
―
118.7

6,222
6,169

AnnualYen
113.00113.00113.00

Ratio of dividends to net
assets (consolidated)
%
5.3
5.9

68.5

3. Forecast Consolidated Performance for FY2022, the Year Ending March 31, 2023 (From April 1,
2022, to March 31, 2023)(Percentage figures indicate increase/decrease from a year earlier.)
Operating income
Ordinary income
Millions of yen
Millions of yen
Millions of yen%%%
Net sales

Six months ending
September 30, 2022
Year ending March 31,
2023 (full year)

58,500

48.0

2,400

―

3,000

―

126,000

32.9

10,000―11,000―Net income attributable toowners of parent
Millions of yen%
Six months ending
September 30, 2022
Year ending March 31,
2023 (full year)

Basic earnings per share
Yen

3,400

―

62.28

9,000

73.2

164.86

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*Notes(1) Significant changes in subsidiaries during the period under review (changes to specific subsidiaries resulting inchanges in scope of consolidation): None
(2) Changes in accounting standard, accounting estimation change and error correction
1) Changes due to changes in accounting standard: Yes
2) Changes due to changes in accounting standard except (2) 1): None
3) Changes due to accounting estimation change: None
4) Error correction: None
(Note) For details, please refer to “Changes in Accounting Policies” on page 17.
(3) Number of common shares issued
1) Number of shares issued
As of54,734,200 As of
57,234,200(including treasury shares)
March 31, 2022
shares March 31, 2021
shares2) Number of treasury shares
As of141,260 As of
2,711,167
3) Average number of shares
March 31, 2022
shares March 31, 2021
sharesduring the period
Year ended
54,575,724 Year ended
55,479,828
March 31, 2022
shares March 31, 2021
shares(Reference) Outline of Nonconsolidated Financial Results
1. Nonconsolidated Performance for the Year Ended March 31, 2022 (From April 1, 2021, to March
31, 2022)(1) Nonconsolidated operating results(Percentage figures indicate increase/decrease from a year earlier.)
Operating income
Ordinary income
Millions of yen
Millions of yen
Millions of yen%%%
64,504
5.0
(402)
―
511
―
61,450(40.4)(2,463)―(1,299)―Net salesYear ended March 31, 2022
Year ended March 31, 2021

Net income
Millions of yen

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

3,139
(14,957)

Fully diluted net income
per share
Yen
57.44
―

Basic earnings per share
%
―
―

Yen
57.53
(269.60)(2) Nonconsolidated financial position
Total assets

Net assets

Millions of yen

Millions of yen

As of March 31, 2022
140,877
As of March 31, 2021
137,559(Reference) Shareholders’ equity:
As of March 31, 2022: 54,778 million yen
As of March 31, 2021: 57,794 million yen

54,99858,182Equity ratio
%
38.9
42.0

Net assets per shareYen
1,003.41
1,060.01* These consolidated financial results are outside the scope of audit by Certified Public Accountants or auditing
corporations.
* Explanation for the appropriate use of performance forecasts and other special notes:
The statements regarding forecast of financial results in this report are based on the information that is available, as
well as estimates, assumptions and projections that are believed to be reasonable at the time of publication.
Therefore, there might be cases in which actual results greatly differ from forecast values. For the conditions
underlying the assumptions made for financial results forecasts and their use, please see “1. Overview of Operating
Results, etc. (4) Future Outlook” on page 8 of the Attachments.

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Table of Contents - Attachments
1. Overview of Operating Results, etc. ................................................................................................................ 5(1) Overview of Operating Results for the Fiscal Year under Review .............................................................. 5(2) Overview of Financial Position for the Fiscal Year under Review .............................................................. 7(3) Overview of Cash Flows for the Fiscal Year under Review ........................................................................ 7(4) Future Outlook ............................................................................................................................................. 8
2. Basic Policy on Selection of Accounting Standards ........................................................................................ 8
3. Consolidated Financial Statements and Principal Notes ................................................................................. 9(1) Consolidated Balance Sheets ....................................................................................................................... 9(2) Consolidated Statements of Income and Comprehensive Income ............................................................. 11(Consolidated Statements of Income) .................................................................................................... 11(Consolidated Statements of Comprehensive Income) .......................................................................... 12(3) Consolidated Statements of Changes in Equity ......................................................................................... 13(4) Consolidated Statements of Cash Flows .................................................................................................... 15(5) Notes to Consolidated Financial Statements ............................................................................................. 17(Notes on Going Concern Assumption) ................................................................................................. 17(Changes in Accounting Policies) .......................................................................................................... 17(Consolidated Statements of Income) .................................................................................................... 18(Segment Information) ........................................................................................................................... 18(Per Share Information) .......................................................................................................................... 20(Significant Subsequent Events) ............................................................................................................ 20

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1. Overview of Operating Results, etc.
(1) Overview of Operating Results for the Fiscal Year under Review
In the fiscal year ended March 31, 2022 (the “fiscal year under review”), due to the prolonged restrictions on economic
activities caused by the COVID-19 pandemic, and the resurgence of infections in August, Japan’s economy remained in a
tough situation. As vaccinations progressed in Japan, infections calmed down since October, and economic activities
started to show a sign of improvement. The outlook, however, remains unclear as the emergence of new variants may bring
new waves of infection.
In the karaoke industry, where DAIICHIKOSHO CO., LTD. (the “Company,” together with its subsidiaries, the“Group”) operates, amid the issuance of declarations of state of emergency, quasi-emergency measures and related requests
from authorities in large metropolitan areas, such as Tokyo, many karaoke cabins and restaurants both in the night businessand the karaoke cabin markets, were forced to endure long-term shut downs and shorter business hours. Although the
karaoke business tended to recover during the period when restrictions on operation were lifted, such as at the year-end, thesevere business environment, as seen in the emergence of new variants and the self-restraints on business meals bycompanies, continued until the end of the period.
In the Group, both commercial karaoke and karaoke cabin and restaurant businesses that are the Group’s corebusinesses continued to suffer a negative impact of the COVID-19 pandemic. Under the policy “control costs and increase
sales,” the Group worked on the reduction of fixed costs while securing cash on hand. The Group also made efforts toreinforce relationships with its commercial karaoke users to prepare for the market recovery phase while developing newrevenue sources, such as through expanding the parking and delivery businesses.
Also, the Group posted 15,206 million yen of subsidies income (3,781 million yen in the previous fiscal year) in
extraordinary income from various subsidies, such as employment adjustment subsidies and subsidies for shorter businesshours. The Group also recorded costs related to the measures for state of emergency for COVID-19 of 6,452 million yen(8,883 million yen in the previous fiscal year) as loss on COVID-19 in extraordinary losses.
As a result, in the fiscal year under review, net sales amounted to 94,787 million yen (up 1.6% year on year), an
operating loss was recorded of 289 million yen (a loss of 2,693 million yen in the previous year), and ordinary income was
888 million yen (a loss of 1,194 million yen in the previous year). Net income attributable to owners of parent amounted to5,196 million yen (a loss of 18,782 million yen in the previous year) as extraordinary income increased by 10,998 million
yen and extraordinary losses improved by 13,217 million yen from the previous fiscal year.
The Group plans to record approximately 2.0 billion yen in the fiscal year ending March 31, 2023 out of subsidies
covering the fiscal year under review.
Net sales
Operating income
Ordinary income
Net income attributable toowners of parent

FY202093,316(2,693)(1,194)FY2021
94,787(289)
888

Year-on-year change
1,470
2,403
2,083

(Millions of yen)
% change
1.6%――(18,782)

5,196

23,978―Operating results by segment are as follows.

(Commercial karaoke business)
In the commercial karaoke business, due to various requests for preventing the COVID-19 pandemic from authorities,
especially in the first half of the fiscal year under review, most of our customers operating at night, such as snack bars, andkaraoke cabins that are our customers continued to suffer from severe business conditions, such as long-term shutdowns
and shorter business hours. In such an environment, we continued to support our customers through offerings and sales ofinfection-prevention goods ongoing from the previous fiscal year, and held online events and other efforts to reinforce therelationships with our customers mainly at nursing facilities in the seniors’ market. Also, in April, we enhanced our productlineup by releasing a new karaoke machine with an antibacterial-treated main unit and remote controller for night karaokebusiness, “Cyber DAM+.” In October, we released new contents “Liview!” where users can enjoy the atmosphere of live
performances in karaoke cabins to improve our Karaoke DAM products by further expanding our visual contents.
Since October when the state of emergency was lifted, more karaoke cabins are being reopened and newly launched.
Although the resurgence of infection in the new year had an impact, the number of DAM units in operation at the end of the
fiscal year under review exceeded that of the previous fiscal year, albeit a little.
As a result, net sales and operating income grew by 2.9% and 11.4%, respectively, year on year.
We transferred fixed costs related to exemption measures during the period of state of emergency of 599 million yen

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(1,887 million yen in the previous fiscal year) to loss on COVID-19.
FY2020Net sales
Operating income

FY2021
51,695
10,93553,18812,186Year-on-year change
1,493
1,250

(Millions of yen)
% change
2.9%
11.4%

(Karaoke cabin and restaurant business)
In the karaoke cabin and restaurant business, while we opened five karaoke cabins and three restaurants, we closed 23
karaoke cabins and six restaurants, resulting in 503 karaoke cabins and 175 restaurants as of the end of the fiscal year underreview.
Two declarations of state of emergency and quasi-emergency measures were taken, and continued to have a serious
impact on our businesses, such as long-term shutdowns and shorter business hours of many of our karaoke cabins andrestaurants in the fiscal year under review. As the states of emergency and quasi-emergency measures were lifted at the endof September, we were able to operate without governmental restrictions at the year-end, which is the busiest season. We,
however, were affected by the spread of infection of new variants after the turn of the year, and full-year sales of existing
karaoke cabins and restaurants decreased by 60% from that before the COVID-19 pandemic as companies continued topractice self-restraint and smaller business meals until the end of the fiscal year.
In such an environment, while we continued to reduce fixed costs and take measures to “control costs and increase
sales,” such as expanding delivery services utilizing kitchens of existing karaoke cabins and restaurants, we promoted theupgrade to “LIVE DAM Ai,” our most premium karaoke model, in BIG ECHO karaoke cabins, and installed harmony
pink/white microphones in all rooms of all cabins, in order to improve customer satisfaction by enhancing the appeal of
karaoke. We also worked to keep our employees and maintain facilities of karaoke cabins and restaurants to prepare for the
return of customer flow by utilizing the employment adjustment subsidies and subsidies for shorter business hours.
As a result, net sales decreased by 5.1% year on year, and an operating loss was recorded at 11,299 million yen.
We transferred fixed costs for karaoke cabins and restaurants shut down during the period of state of emergency of
5,820 million yen (6,935 million yen in the previous fiscal year) to loss on COVID-19.

Net sales
Operating income

FY202025,722(12,088)

FY2021
24,402(11,299)

Year-on-year change(1,319)788(Millions of yen)
% change(5.1%)—(Music software business)
The music software business strived to control selling expenses and other costs amid the impact of delays releases of
new tunes and decline in product sales resulting from the cancellation of events and concerts due to COVID-19.
As a result, net sales and operating income decreased by 7.9% and 68.6%, respectively, year on year.
FY2020Net sales
Operating income

FY2021
6,548
254

6,029
79

Year-on-year change
(518)
(174)

(Millions of yen)
% change(7.9%)(68.6%)(Other businesses)
In the other businesses, BGM broadcasting business used by many restaurants and karaoke cabins continued to be
negatively affected by the COVID-19 pandemic for the second year in a row, while “karaoke@DAM,” net streaming
karaoke service for family use, performed well.
The parking business operates “The Park” brand as its new pillar of revenue, and new store openings including throughthe acquisition of operating assets were robust. The business scale expanded to 1,700 parking facilities and 22,000 parking
spots as of the end of the fiscal year under review.
As a result, net sales and operating income increased by 19.4% and 82.0%, respectively, year on year.
FY2020Net sales
Operating income

FY2021
9,350
553

11,1661,006

6Year-on-year change
1,815
453

(Millions of yen)
% change
19.4%
82.0%

DAIICHIKOSHO

CO.,

LTD.

(2) Overview of Financial Position for the Fiscal Year under Review
Total assets at the end of the fiscal year under review decreased by 6,405 million yen from the end of the previous fiscal
year to 180,389 million yen.
Major changes from the previous fiscal year were decreases in inventories by 1,350 million yen and accounts receivable- other included in “other” by 1,044 million yen in current assets, respectively.
In non-current assets, buildings and structures decreased by 380 million yen, Karaoke equipment for rental - net
decreased by 410 million yen, Karaoke cabin and restaurant facilities - net decreased by 1,305 million yen, and leasehold
and guarantee deposits decreased by 774 million yen year on year.
Liabilities decreased by 5,535 million yen year on year to 75,229 million yen.
The decrease is primarily attributable to decreases in short-term borrowings and of decrease in accounts payable - otherin current liabilities of 11,897 million yen and 3,549 million yen, respectively, as well as an increase in long-termborrowings in non-current liabilities of 9,620 million yen.
Net assets decreased by 869 million yen year on year to 105,160 million yen.
The decrease is primarily attributable to an increase in retained earnings due to net income attributable to owners ofparent of 5,196 million yen and a decrease in retained earnings of 6,165 million yen due to the dividends of surplus.

(3) Overview of Cash Flows for the Fiscal Year under Review
Cash and deposits (hereinafter referred to as “funds”) at the end of the fiscal year under review increased by 445 million
yen from the previous fiscal year to 68,125 million yen.
The following is an overview of cash flows in the fiscal year under review.
(Cash Flows from Operating Activities)
Funds provided by operating activities increased by 10,409 million yen year on year to 18,165 million yen, mainly
due to income before income taxes of 7,695 million yen, depreciation of 11,840 million yen, impairment losses of 1,862
million yen, a decrease in accounts payable – other of 3,577 million yen and income taxes paid of 1,028 million yen.
(Cash Flows from Investing Activities)
Funds used in investing activities decreased by 242 million yen year on year to 9,297 million yen, mainly due topurchase of property, plant and equipment of 6,261 million yen, purchase of intangible assets of 2,985 million yen ofand payments for acquisition of video licenses of 1,283 million yen.
(Cash Flows from Financing Activities)
Funds used in financing activities amounted to 8,487 million yen (22,174 million yen provided in the previous
fiscal year) mainly due to proceeds of long-term borrowings of 11,250 million yen, repayments of long-term borrowingof 11,707 million yen and dividends paid of 6,162 million yen.
(Reference) Cash flow indicators
As of March 31
2018

2019

2020

2021

2022

Equity ratio (%)

68.7

69.3

74.0

55.8

57.4

Equity ratio at market value (%)

178.3

169.8

89.4

125.2

105.3

0.7

0.7

0.5

6.5

2.6

103.5

188.7

243.8

39.2

90.9

Ratio of interest-bearing debt to cash
flow (years)
Interest coverage ratio (times)
Notes:

Equity ratio is shareholders’ equity divided by total assets.
Equity ratio at market value is market capitalization divided by total assets.
Ratio of interest-bearing debt to cash flow is interest-bearing debt divided by cash flow.
Interest coverage ratio is cash flow divided by interest expenses.

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1.

All figures are calculated on a consolidated basis.

2.

Market capitalization is calculated by multiplying closing share price at fiscal year-end by the number of shares issued
less treasury shares at fiscal year-end.

3.

Cash flows from operating activities on the consolidated statements of cash flows are used as “cash flow.”

4.

Interest-bearing debt represents the sum of all liabilities on the consolidated balance sheets subject to interest payment.
Interest paid on the consolidated statements of cash flows is used as “interest expenses.”

5.

The Company applied the “Partial Amendments to Accounting Standard for Tax Effect Accounting” (AccountingStandards Board of Japan (ASBJ) Statement No. 28, February 16, 2018) and others from the beginning of fiscal year
ended at March 31, 2019. Equity ratio (and equity ratio at market value) for the fiscal year ended March 31, 2018 are after
the retroactive application of these accounting standards.

(4) Future Outlook
The economic outlook is foreseen to continue its uncertain path, as political instability arises in foreign countries andprice hikes of commodities including fuel prices continue, in addition to the fact that it is still unclear whether the persisting
COVID-19 pandemic will settle down.
In the karaoke industry, it is expected that both the night business and karaoke cabin market will continue to face asevere business environment for a while.
The Group’s commercial karaoke business is also expected to take some time to recover the number of karaoke
machines in operation that fell due to the COVID-19 pandemic. In the karaoke cabin and restaurant business, we areworking to make an environment where our customers can enjoy karaoke safely and with peace of mind by continuing
thorough basic operations such as disinfection of karaoke rooms. It is expected, however, that the impact of the COVID-19
pandemic will remain in the fiscal year ending March 31, 2023 to some extent.
It is expected, however, that as a wide range of generations in Japan have taken up vaccination, and the virus itself isreported to have attenuated, economic activities are expected to gradually recover close to normal even if the COVID-19
pandemic will not settle down completely.
In such a situation, the most urgent task for the Group is to revive the number of DAM units in operation, which had
declined due to the pandemic, and to promptly bring the karaoke and restaurants business, which recorded an operating loss
for two years in a row, back to profitability.
In the medium term, as karaoke has become a part of the lifestyle of a wide range of generations, and is believed tocontribute to the extension of a healthy life expectancy especially in the so-called ultra-aging society, we believe that thedemand for karaoke will recover to the level before the COVID-19 pandemic. Even in such a severe business environment,
we will continue to invest in commercial karaoke and karaoke and restaurants businesses that are the Group’s corebusinesses to enhance the appeal of karaoke, and strengthen our market competitiveness and earning power in an aim to
make a big leap after the end of the COVID-19 pandemic. We also aim to grow sustainably by focusing on developing new
businesses such as the coin-parking lot business.
Based on the above, we expect net sales of 126.0 billion yen, operating income of 10.0 billion yen and ordinary
income of 11.0 billion yen in the next fiscal year. Net income attributable to owners of parent is expected to be 9.0 billion
yen, including subsidies of approximately 2.0 billion yen covering the fiscal year ended March 31, 2022.
The earnings forecast has been made based on information available as of the publication date of this material, andactual operating results may differ from such forecasts due to various factors.
The earning forecast has also been made based on the assumption that COVID-19 will not resurge on a nationwide
basis and will gradually settle.

2. Basic Policy on Selection of Accounting Standards
The Group’s policy for the time being is to apply Japanese GAAP. The Group will consider whether to apply
International Financial Reporting Standards (IFRS) taking into account trends of other companies in Japan.

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Consolidated Financial Statements and Primary Notes(1) Consolidated Balance Sheets(Millions of yen)

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Notes receivable - trade
Accounts receivable - trade
Inventories
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation
Buildings and structures, net
Karaoke equipment for rental
Accumulated depreciation
Karaoke equipment for rental, net
Karaoke cabin and restaurant facilities
Accumulated depreciation
Karaoke cabin and restaurant facilities, net
Land
Other
Accumulated depreciation
Other, net
Total property, plant and equipment
Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Investment securities
Long-term loans receivable
Deferred tax assets
Leasehold and guarantee deposits
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets

9

FY2020(As of March 31, 2021)

FY2021(As of March 31, 2022)

68,508
3,546
－
－
8,946
6,722
(944)
86,78068,214
－
44
4,082
7,596
4,796
(457)
84,277

14,521(9,223)
5,297
49,627(42,922)
6,705
46,570(34,884)
11,68540,681
6,673(5,360)1,313
65,683

13,953(9,036)
4,916
50,813(44,518)
6,294
44,978(34,598)
10,38040,341
6,830(5,776)
1,053
62,987

92
6,140
6,232

996
5,861
6,858

4,811
760
6,912
14,224
1,521(131)
28,098100,014
186,795

4,507
508
6,520
13,4491,346(64)
26,267
96,112
180,389

DAIICHIKOSHO

CO.,

LTD.

(Millions of yen)

Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term borrowings
Accounts payable - other
Income taxes payable
Contract liabilities
Provision for bonuses
Other
Total current liabilities
Non-current liabilities
Long-term borrowings
Deferred tax liabilities
Provision for retirement benefits for directors (and otherofficers)
Retirement benefit liability
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Revaluation reserve for land
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Share acquisition rights
Non-controlling interests
Total net assets
Total liabilities and net assets

10

FY2020(As of March 31, 2021)

FY2021(As of March 31, 2022)

2,591
17,996
10,003
1,736
－
1,168
3,216
36,712

2,614
6,098
6,453
1,985
968
1,141
2,395
21,65832,08589

41,705
77

899

993

7,556
3,422
44,05280,765

7,846
2,946
53,57075,22912,3504,114
98,783(10,958)
104,289

12,3504,114
87,733(570)
103,628

810
(733)
32
(140)
(31)
388
1,383
106,030
186,795

606
(733)
69
(26)
(84)
219
1,397
105,160
180,389

DAIICHIKOSHO

CO.,

LTD.

(2) Consolidated Statements of Income and Comprehensive Income(Consolidated Statements of Income)(Millions of yen)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Advertising expenses
Promotion expenses
Packing and freight expenses
Remuneration for directors (and other officers)
Provision for retirement benefits for directors (and otherofficers)
Salaries and bonuses
Provision for bonuses
Retirement benefit expenses
Rent expenses
Depreciation
Other
Total selling, general and administrative expenses
Operating loss
Non-operating income
Interest income
Dividend income
Commission income
Insurance claim income
Cooperative monetary aid received
Compensation income
Other
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Provision of allowance for doubtful accounts
Commission expenses
Cancellation penalty
Other
Total non-operating expenses
Ordinary income (loss)
Extraordinary income
Gain on sale of non-current assets
Gain on sale of investment securities
Subsidies income
Total extraordinary income
Extraordinary losses
Loss on disposal of non-current assets
Impairment losses
Loss on sale of investment securities
Loss on valuation of investment securities
Loss on COVID-19
Total extraordinary losses
Income (loss) before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
Net income (loss)
Net income attributable to non-controlling interests
Net income (loss) attributable to owners of parent

11

FY2020(From April 1, 2020, to
March 31, 2021)

FY2021(From April 1, 2021, to
March 31, 2022)

93,316
67,073
26,242

94,78765,951
28,835

920
870
657
1,296

1,047
913
682
1,168

144

162

12,281
882
567
1,040
792
9,480
28,935(2,693)

12,780
875
564
1,074
741
9,114
29,124
(289)

45
118
126
419
275
570
500
2,057

22
197
142
355
255
11
645
1,630

207
23
64
97
62
104
559
(1,194)

199
48
－
15
61
126
452
888

530
0
3,781
4,313

104
－
15,20615,311

231
12,6060
1
8,883
21,722(18,604)
813
(698)
115
(18,719)62(18,782)

80
1,862
0
108
6,452
8,505
7,695
1,971
500
2,471
5,223
26
5,196

DAIICHIKOSHO

CO.,

LTD.

(Consolidated Statements of Comprehensive Income)(Millions of yen)

Net income (loss)
Other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests

12

FY2020(From April 1, 2020, to
March 31, 2021)

FY2021(From April 1, 2021, to
March 31, 2022)(18,719)

5,223

1,032
59
113
1,205
(17,514)

(203)
36
114
(52)
5,170

(17,577)

5,143

62

26

DAIICHIKOSHO

CO.,

LTD.

(3) Consolidated Statements of Changes in Net Assets
FY2020 (from April 1, 2020, to March 31, 2021)(Millions of yen)
Shareholders’ equity

12,350

4,003

123,891(4,589)Total
shareholders’equity135,656

12,350

4,003

123,891(4,589)135,656

Share capital
Balance at beginning of period
Cumulative effects of changes inaccounting policies
Restated balance

Capital surplus

Retainedearnings

Treasury shares

Changes during period
Dividends of surplus
Net income (loss) attributable toowners of parent
Purchase of treasury shares(6,325)(6,325)(18,782)(18,782)(6,368)(6,368)－－

Disposal of treasury shares
Cancellation of treasury shares
Change in ownership interest ofparent due to transactions with
non-controlling interests
Net changes in items other thanshareholders’ equity
Total changes during period

111

111
4,114

－
12,350

Balance at end of period

111(25,108)
98,783(6,368)(10,958)(31,366)
104,289

Accumulated other comprehensive income
Valuationdifference on
available-for-salesecurities

Revaluation
reserve forland

Foreigncurrencytranslation
adjustment

Remeasurementsof defined benefit
plans

Total
accumulated
othercomprehensive
incomeShare
acquisitionrightsNon-controllinginterests

Total net
assetsBalance at beginning of
period

(221)

(733)

(26)

(254)

(1,236)

310

1,475

136,205

Cumulative effects ofchanges in accounting
policies
Restated balance

(221)

(733)

(26)

(254)

(1,236)

310

1,475

136,205

Changes during period
Dividends of surplus
Net income (loss)
attributable to owners ofparentPurchase of treasury
shares
Disposal of treasury
sharesCancellation of treasury
sharesChange in ownershipinterest of parent due totransactions with
non-controlling interests
Net changes in items
other than shareholders’equityTotal changes during period
Balance at end of period(6,325)(18,782)(6,368)
－
－
111
1,032

－

59

113

1,205

77

(91)

1,191

1,032
810

－
(733)

59
32

113
(140)

1,205
(31)

77
388

(91)
1,383

(30,174)
106,030

13

DAIICHIKOSHO

CO.,

LTD.

FY2021 (from April 1, 2021, to March 31, 2022)(Millions of yen)
Shareholders’ equity
Share capital

Capital surplus

Retainedearnings

Treasury shares

4,114

98,783(10,958)

12,350

Balance at beginning of period
Cumulative effects of changes inaccounting policies
Restated balance

Totalshareholders’equity104,28965
12,3504,114

65

98,848(10,958)

104,355

Changes during period
Dividends of surplus
Net income (loss) attributable toowners of parent
Purchase of treasury shares(6,165)(6,165)

5,196

5,196

Disposal of treasury shares(40)(10,104)

Cancellation of treasury shares
Change in ownership interest ofparent due to transactions with
non-controlling interests
Net changes in items other thanshareholders’ equity
Total changes during period(0)282
10,104

(0)
242
－
－

－
12,350

Balance at end of period(11,114)87,733－
4,114

10,387(570)(726)
103,628

Accumulated other comprehensive income
Valuationdifference on
available-for-salesecurities

Balance at beginning of
periodCumulative effects ofchanges in accounting
policies
Restated balance

810

Revaluation
reserve forland

Foreigncurrencytranslation
adjustment

Remeasurementsof defined benefit
plans

Total
accumulated
othercomprehensive
incomeShare
acquisitionrights

(733)

32

(140)

(31)

388

Non-controllinginterests

1,383

Total net
assets106,030
65

810

(733)

32

(140)

(31)

388

1,383

106,095

Changes during period
Dividends of surplus
Net income (loss)
attributable to owners ofparentPurchase of treasury
shares
Disposal of treasury
sharesCancellation of treasury
sharesChange in ownershipinterest of parent due totransactions with
non-controlling interests
Net changes in items
other than shareholders’equityTotal changes during period
Balance at end of period(6,165)
5,196
(0)
242
－
－
(203)

－

36

114

(52)

(169)

13

(208)

(203)
606

－
(733)

36
69

114
(26)

(52)
(84)

(169)
219

13
1,397

(934)
105,160

14

DAIICHIKOSHO

CO.,

LTD.

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

Cash flows from operating activities
Income (loss) before income taxes
Depreciation
Amortization of goodwill
Impairment losses
Increase (decrease) in provision for retirement benefits for
directors (and other officers)
Interest and dividend income
Interest expenses
Foreign exchange losses (gains)
Loss (gain) on sale of investment securities
Loss (gain) on valuation of investment securities
Loss (gain) on disposal of non-current assets
Subsidy income
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Transfer of cost of sales on karaoke equipment for rental
Decrease (increase) in advance payments to suppliers
Increase (decrease) in trade payables
Increase (decrease) in accounts payable – other
Other, net
SubtotalInterest and dividends received
Interest paid
Subsidies received
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment
Purchase of intangible assets
Payments for acquisition of video licenses
Proceeds from sale of investment securities
Purchase of investment securities
Purchase of shares of subsidiaries resulting in change in scopeof consolidation
Proceeds from purchase of shares of subsidiaries resulting inchange in scope of consolidation
Payments for acquisition of businesses
Loan advances
Proceeds from collection of loans receivable
Payments of leasehold and guarantee deposits
Proceeds from refund of leasehold and guarantee deposits
Other, net
Net cash provided by (used in) investing activities

15

FY2020(From April 1, 2020, to
March 31, 2021)

FY2021(From April 1, 2021, to
March 31, 2022)(18,604)
15,057646
12,606

7,695
11,840
118
1,862

(44)

94

(164)
207
(56)
(0)
1
(299)
(3,781)
1,498(1,072)109(51)(2,519)
2,314
889
6,736
164
(198)
3,061
(2,007)
7,755

(220)
199
(64)
0
108
(23)
(15,206)
(554)
1,355
108
(74)
7
(3,577)
(254)
3,414
220
(199)
15,759(1,028)18,165(602)
534(5,797)
1,047(3,139)
(924)
1
(400)

(45)
785
(6,261)649(2,985)(1,283)
0
(50)

－

(251)

28

－

－
(503)
344
(901)
624
151
(9,539)(1,067)
(82)
383
(144)
643
412
(9,297)DAIICHIKOSHO

CO.,

LTD.

(Millions of yen)

FY2020(From April 1, 2020, to
March 31, 2021)
Cash flows from financing activities
Net increase (decrease) in short-term borrowings
Proceeds from long-term borrowings
Repayments of long-term borrowings
Redemption of bonds
Dividends paid
Purchase of treasury shares
Other, net
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

4,842
31,850(1,600)(160)(6,363)(6,368)(24)
22,17456
20,44747,232
67,68016

FY2021(From April 1, 2021, to
March 31, 2022)(1,855)
11,250(11,707)－(6,162)(0)(12)(8,487)64
445
67,68068,125DAIICHIKOSHO

CO.,

LTD.

(5) Notes to Consolidated Financial Statements(Notes on Going Concern Assumption)
Not applicable.

(Changes in Accounting Policies)(Adoption of the Accounting Standard for Revenue Recognition, etc.)
The Company adopted the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31,
2020; hereinafter the “Revenue Recognition Standard”), etc. from the beginning of the fiscal year under review.
Accordingly, the Company recognizes revenue at an amount it expects to receive in exchange for a promised good orservice at a time when control over such good or service transfers to a customer.
Main changes attributable to the adoption of the Revenue Recognition Standard, etc. are as follows:(1) Revenue recognition with regard to customer loyalty programs
As for the provision of services under customer loyalty programs, which grant points at the time of sales at
karaoke cabins and restaurants, etc., the Company had previously recognized revenue at the time of sales. The
Company however has changed the methodology and identifies points granted as performance obligations andallocates transaction prices based on standalone selling prices calculated with factors taken into consideration,such as the number of points expected to expire in the future without being redeemed.
(2) Revenue recognition with regard to installment sales
As for installment sales, the Company had previously recognized revenue based on the installment method, but
has changed the methodology and recognizes revenue at the time when performance obligations are satisfied bytransferring the goods or services to customers.
(3) Revenue recognition with regard to agent transactions
As for transactions in which the Company acts as an agent in providing products to customers, the Company had
previously recognized revenue at gross amounts received from customers. The Company has changed themethodology and recognizes revenue at amounts received from customers, net of amounts to be paid to
suppliers.
In adopting the Revenue Recognition Standard, etc., the Company applied the transitional treatment stipulated in theproviso to Paragraph 84 of the Revenue Recognition Standard. Accordingly, the Company adjusted the cumulative impactof retrospectively applying the new accounting policies to past periods to retained earnings at the beginning of the fiscal
year under review, and applies the new accounting policies from the beginning balance.
In addition, the Company reclassified notes and accounts receivable - trade presented in current assets in the
consolidated balance sheets for the previous fiscal year separately into notes receivable - trade and accounts receivable trade from the fiscal year under review, and reclassified accounts payable - other and “other” presented in current liabilities
in the previous fiscal year into accounts payable - other, contract liabilities and “other” from the fiscal year under review
As a result, compared to the results before the application of the Revenue Recognition Standard, notes and accounts
receivable - trade decreased by 4,127 million yen, notes receivable - trade increased by 44 million yen, accounts receivable- trade increased by 4,082 million yen, accounts payable - other decreased by 135 million yen, contract liabilities increased
by 968 million yen, and “other” in current liabilities decreased by 900 million yen on the consolidated balance sheets on thefiscal year under review. Likewise, net sales decreased by 249 million yen, cost of sales decreased by 237 million yen,selling, general and administrative expenses decreased by 67 million yen, operating loss improved by 55 million yen, andordinary income and income before income taxes each increased by 55 million yen on the consolidated statements ofincome in the fiscal year under review.
The beginning balance of retained earnings in the consolidated statements of changes in net assets increased by 65
million yen due to the cumulative effects of changes in accounting policies being reflected in net assets at the beginning of
period.
Effects on per share information are described in the “Per Share Information” section.
(Adoption of the Accounting Standard for Fair Value Measurement, etc.)
The Company adopted the Accounting Standard for Fair Value Measurement (ASBJ Statement No. 30, July 4, 2019;
hereinafter the “Fair Value Standard”), etc. from the beginning of the fiscal year under review. According to the transitional
treatment stipulated in Paragraph 19 of the Fair Value Standard and Paragraph 44-2 of Accounting Standard for Financial
Instruments (ASBJ Statement No. 10, July 4, 2019), the Company will prospectively apply the new accounting policies set
forth by the Fair Value Standard, etc. The consolidated financial statements will not be affected.

17

DAIICHIKOSHO

CO.,

LTD.

(Consolidated Statements of Income)Subsidies income
Following the issuance of the declaration of state of emergency due to the spread of COVID-19, employment
adjustment subsidies, which are subsidies that are provided to cover salaries, etc. for the period during which employees are
furloughed, as well as subsidies, etc. that are received from the national government, local municipalities, etc., have beenposted in subsidies income.
Loss on COVID-19
Following the issuance of the declaration of state of emergency due to the spread of COVID-19, we implemented ameasure to furlough (special leave of absence) employees in predetermined areas. In addition, karaoke cabins andrestaurants operated by the Company as well as those operated by our clients closed temporarily or opened for shorter hours,
following the requests from the national government and local municipalities.
In light of these events, fixed costs of karaoke cabins and restaurants operated by the Company during the period ofclosure and fixed costs in relation to leasing of commercial karaoke equipment, including salaries for the period during
which employees were furloughed, have been posted in loss on COVID-19.

(Segment Information)
1.

Overview of reportable segments

Reportable segments of the Group consist of units for which separate financial information is available and are
regularly reviewed by the Company’s Board of Directors to determine allocation of management resources and evaluate
performance.
The Group operates business headquarters by product and service at its head office, each of which formulates acomprehensive strategy for its products and services and performs business activities.
Accordingly, the Group consists of segments by product and service based on business headquarters, and has threereportable segments, namely, Commercial Karaoke business, Karaoke Cabin and Restaurant business and Music Software
business.
Commercial Karaoke business sells and leases commercial karaoke equipment, and provides audio source and video
contents to on-line karaoke operators. Karaoke Cabin and Restaurant business operates karaoke cabins and restaurants.
Music Software business produces and sells music and visual software.

2. Information on the calculation method for the amounts of sales, income or loss, assets, liabilities
and other items by reportable segment
Segment income is based on operating income.
Assets are not allocated to business segments.
As described in in “(5) Notes to Consolidated Financial Statements (Changes in Accounting Policies),” the Company
adopted the Revenue Recognition Standard, etc. from the beginning of the fiscal year under review, and changed its
accounting method for revenue recognition. The calculation method of segment income or segment loss have been changed
accordingly.
As a result of the change, in the fiscal year under review, segment income of Commercial Karaoke increased by 45
million yen, while sales of Karaoke Cabin and Restaurant decreased by 67 million yen, a segment loss in the Karaoke Cabin
and Restaurant improved by 9 million yen, and sales of Music Software decreased by 182 million yen from those before thechange.

18

DAIICHIKOSHO

CO.,

LTD.

3. Information on the amounts of sales, income or loss, assets, liabilities and other items by reportablesegment
FY2020 (From April 1, 2020, to March 31, 2021)(Millions of yen)
Commercial
karaoke

Reportable segments
KaraokeMusiccabin andsoftwarerestaurant

Subtotal

Other(Note 1)

Total

Adjusted
amount(Note 2)

Postedamount to theconsolidated
statements ofincomeSales
Sales to third parties
Intersegment sales
and transfers
Total
Segment income orsegment loss
(Operating income oroperating loss)
Other items
Depreciation andamortization
Amortization of
goodwill

Notes:

51,69525,722

6,548

83,9659,350

93,316－

93,316

－

－

－

－

－

－

－

－

51,69525,722

6,548

83,9659,350

93,316－

93,316

10,935(12,088)

254

(898)

553

(345)

(2,347)(2,693)

8,916

3,109

36

12,062725

12,788168

12,956

32

598

－

631

14

646

－

646

1. The category “Other” comprises a business segment not attributable to reportable segments, including
parking, real estate leasing and BGM broadcasting businesses.
2. The (2,347) million yen adjustment posted to segment income or segment loss is primarily composed ofgeneral and administrative expenses incurred by the administrative department at the head office that are
not attributable to any particular reportable segment.

FY2021 (From April 1, 2021, to March 31, 2022)(Millions of yen)
Commercial
karaoke

Reportable segments
KaraokeMusiccabin andsoftwarerestaurant

Subtotal

Other(Note 1)

Total

Adjusted
amount(Note 2)

Postedamount to theconsolidated
statements ofincomeSales
Sales to third parties
Intersegment sales
and transfers
Total
Segment income or
Segment loss
(Operating income or
Operating loss)
Other items
Depreciation andamortization
Amortization of
goodwill

Notes:

53,18824,402

6,029

83,62011,166

94,787－

94,787

－

－

－

－

－

－

－

－

53,18824,402

6,029

83,62011,166

94,787－

94,787

12,186(11,299)

79

966

1,006

1,973

(2,262)

(289)

7,091

2,233

23

9,349

677

10,026163

10,190

－

46

－

46

72

118

－

118

1. The category “Other” comprises a business segment not attributed to reportable segments, including
parking, real estate leasing and BGM broadcasting businesses.
2. The (2,262) million yen adjustment posted to segment income or segment loss is primarily composed ofgeneral and administrative expenses incurred by the administrative department at the head office that are
not attributable to any particular reportable segment.

19

DAIICHIKOSHO

CO.,

LTD.

(Per Share Information)

Net assets per share

FY2020
FY2021(From April 1, 2020, to March (From April 1, 2021, to March
31, 2021)
31, 2022)
1,912.19 yen
1,896.65 yen

Basic earnings (net loss) per share(338.54) yen

95.21 yen

Fully diluted net income per share－

95.07 yen

Notes:

1. Fully diluted net income per share is not described for the fiscal year ended March 31, 2021 as a net loss
per share was recorded, although there were potential shares.
2.

As described in “(5) Notes to Consolidated Financial Statements (Changes in Accounting Policies),” theCompany adopted the Accounting Standard for Revenue Recognition, etc. As a result, net assets per share,
basic earnings per share and fully diluted net income per share in the fiscal year under review increased by
0.88 yen, 1.01 yen and 1.01 yen, respectively.

3. The basis of calculation of basic earnings (net loss) per share and fully diluted net income per share are as
follows:
FY2020(From April 1, 2020, to March 31,
2021)

FY2021(From April 1, 2021, to March 31,
2022)(18,782)

5,196

－

－

Net income (loss) attributable to owners ofparent relating to common shares(Millions of yen)

(18,782)

5,196

Average number of common shares during theperiod (Thousand shares)

55,47954,575Adjustment to net income attributable to ownersof parent (Millions of yen)－－

Increase in number of common shares(Thousand shares)－

80[Of which, share acquisition rights](Thousand shares)

－

[80]

－

－

Basic earnings (net loss) per share
Net income (loss) attributable to owners ofparent (Millions of yen)Amount not attributable to common shareholders(Millions of yen)

Fully diluted net income per share

Overview of potential shares not included in thecalculation of fully diluted net income per share
due to lack of dilutive effect(Significant Subsequent Events)
Not applicable.

20