Financial Results for the Year Ended March 31, 2017 (J-GAAP)May 12, 2017
Name of listed company: NICHIIGAKKAN CO., LTD.
Listed on:
Securities code:
9792
URL:
Representative:
Akihiko Terada Chairman, President and CEO
Contact:
Nobusuke Mori Executive Vice President
Scheduled date to hold the ordinary general meeting of shareholders: June 27, 2017
Scheduled date to start dividends distribution:
June 28, 2017
Scheduled date for filing annual financial report:
June 28, 2017
Supplementary materials prepared: Yes
Results information meeting held: Yes (for institutional investors and financial analysts)

Tokyo Stock Exchange 1st Section
http://www.nichiigakkan.co.jp
TEL: 03-3291-2121(Figures shown are rounded down to the nearest million yen.)
1. Consolidated financial results for the year ended March 31, 2017(April 1, 2016 – March 31, 2017)(1) Consolidated operating results(Percentage figures represent changes from the previous year.)
Profit attributable to owners
Net Sales
Operating Income
Ordinary Incomeof parent
Million yen%
Million yen%
Million yen%
Million yen%
276,659
1.1
4,206
―
1,429
―
―
Year ended March 31, 2017
1,403
273,5830.6(785)(3,629)―(15,995)―
Year ended March 31, 2016―
(Note) Comprehensive income: Year ended March 31, 2017: 655 million yen (－%) Year ended March 31, 2016: -16,371 million yen (－%)
Net Income
Diluted Net Income
Ordinary Income toOperating Income to
Return on Equity
per Shareper Share
Total Assets
Net Sales
Yen
Yen
%
%
%
Year ended March 31, 2017
21.86
21.84
3.8
0.8
1.5
Year ended March 31, 2016（248.83）－（34.3）（2.0）（0.3）
Reference: Equity-method investment profit (loss): Year ended March 31, 2017: 55 million yen Year ended March 31, 2016: 41 million yen(2) Consolidated financial position

As of March 31, 2017
As of March 31, 2016
Reference: Shareholders’ equity:

Total Assets
Net Assets
Equity Ratio
Million yen
Million yen%
191,708
37,92419.1
184,170
38,101
20.0
As of March 31, 2017: 36,592 million yen As of March 31, 2016: 36,868 million yen

Net Assets per ShareYen
570.05574.35(3) Consolidated cash flows

Year ended March 31, 2017
Year ended March 31, 2016

Cash Flows from Operating Cash Flows from Investing Cash Flows from Financing Cash and Cash Equivalents at
Activities
Activities
Activities
End of Year
Million yen
Million yen
Million yen
Million yen
9,379(3,567)(4,246)
16,1892,546(6,250)5,381
14,373

2. Dividends
Annual dividends
1Q-endYen

2Q-end3Q-endYen

Yen

Year-end
Yen

AnnualYen

Total Dividends
Paid (annual)

Payout Ratio(consolidated)

Dividends to Net
Assets(consolidated)

Million yen%%

Year ended March 31, 2016

—

11.00

—

11.00

22.00

1,412

―

3.1

Year ending March 31, 2017

—

11.00

—

11.00

22.00

1,412

100.6

3.8

Year ending March 31, 2018 (forecast)

—

11.00

—

11.00

22.00

47.1

3. Forecast of consolidated financial results for the year ending March 31, 2018 (April 1, 2017 – March 31, 2018)(Percentage figures represent changes from previous year for full year figures and from same period of previous year for interim period figures.)
Profit attributable to owners Net Income per
Net Sales
Operating Income
Ordinary Incomeof parent
ShareMillion yen%
Million yen%
Million yen%
Million yen%
Yen
First six months
145,900
5.9
3,000
267.9
1,100
—
200
—
3.12
Full year
300,000
8.4
9,300
121.1
6,000
319.9
3,000
113.8
46.73

* Notes(1) Changes in subsidiaries during the fiscal year (Changes in specified subsidiaries resulting in changes in scope of consolidation): None
(2) Changes in accounting policies, changes of accounting estimates and restatement
1) Changes in accounting policies due to revisions of accounting standards, etc.: None
2) Changes in accounting policies due to reasons other than those stated in 1): None
3) Changes in accounting estimates: None
4) Restatement: None
(3) Number of shares outstanding (common stock)1) Number of shares issued and outstanding (including treasury stock)
Year ended March 31, 2017:
73,017,952
2) Number of treasury stockYear ended March 31, 2017:
8,825,656
3) Average number of shares issued and outstanding in each period
Year ended March 31, 2017:64,192,407

Year ended March 31, 2016:

73,017,952

Year ended March 31, 2016:

8,825,918

Year ended March 31, 2016:

64,284,296(Reference) Overview of the non-consolidated business results
1. Non-consolidated financial results for the year ended March 31, 2017 (April 1, 2016 – March 31, 2017)(1) Non-consolidated operating results(Percentage figures represent changes from previous year.)
Net Sales
Operating Income
Ordinary Income
Net Income
Million yen%
Million yen%
Million yen%
Million yen%
239,776
0.4
3,542
2,639
3,044
Year ended March 31, 2017―――
238,8850.0(1,696)(2,772)(15,910)
Year ended March 31, 2016―――
Net Income
per Share
Yen
Year ended March 31, 2017
Year ended March 31, 2016

47.43
(247.51)

Diluted Net Income per
Share
Yen
47.38
—

(2) Non-consolidated financial position
Total Assets
Net Assets
Equity Ratio
Million yen
Million yen%
As of March 31, 2017
150,839
40,92226.8
As of March 31, 2016
149,486
39,261
25.9
Reference: Shareholders’ equity: As of March 31, 2017: 40,390 million yen As of March 31, 2016: 38,749million yen

Net Assets per ShareYen
629.21603.66

2. Forecast of non-consolidated financial results for the year ending March 31, 2018 (April 1, 2017– March 31, 2018)(Percentage figures represent changes from previous year for full year figures and from same period of previous year for interim period figures.)
Net Income per
Net Sales
Operating Income
Ordinary Income
Net Income
Share
Million yen%
Million yen%
Million yen%
Million yen%
Yen
First six months
126,100
5.3
2,400
243.8
2,100
1,300
20.25
―
―
Full year
259,400
8.2
8,300
134.3
7,000
165.2
4,700
54.4
73.22
* Summaries of financial results are not subject to audit.
* Explanation concerning the appropriate use of financial result forecasts and other special notes
The above forecasts are based on information Nichii Gakkan had as of the time this report was prepared and on certain assumptions judged to be reasonable.
Various factors may cause actual results to differ significantly from forecasts. Please refer to the disclaimers, provided under“(1) Analysis of business results”
of “1.Analysis of business results and financial position” on page 4 of the attached document, regarding the assumptions upon which forecasts are based andthe use of forecasts.

○Table of Contents for the Attached Document
1. Overview of Business Results, Etc. …………………………………………………………………………………………………………..

2(1) Analysis of business results ………………………………………………………………………………………………………………

2(2) Analysis of financial position …………………………………………………………………………………………………………….

5(3) Basic principles of profit distribution and dividends for the fiscal year under review and the next fiscal year ………………………...

6(4) Business and other risks ………………………………………………………………………………………………………………….

6

2. Overview of Nichii Group …………………………………………………………………………………………………………………....

9

3. Basic Approach to Selection of Accounting Standards ……………………………………………………………………………………....

12

4. Consolidated Financial Statements and Major
Notes…………………………………………………………………………………………………………………………………………..
(1) Consolidated balance sheets ………………………………………………………………………………………………………………

13(2) Consolidated statements of income and comprehensive income …………………………………………………………………………

16(3) Consolidated statements of changes in net assets ………………………………………………………………………………………...

19(4) Consolidated statements of cash flows …………………………………………………………………………………………………...

21

1

13

1. Overview of Business Results, Etc.
(1) Analysis of business results1) Overview of business results
Positioning the fiscal year under review as a turnaround year for achieving the stable growth of long-term profits, NICHIIGAKKAN CO.,LTD. and its consolidated subsidiaries (the “Nichii Gakkan Group”) built a stable and profitable high-growth business foundation that would
be less susceptible to the effects of institutional trends by developing a business line-up that would cover all the items of “social contribution,”“profit distribution” and “futurism.” Setting the strengthening of “organizational strength” and “human resources power” that would
constitute the bedrock of business promotion as an improvement measure for the fiscal year under review, the Nichii Gakkan Group
accelerated its transformation to a corporate structure that would draw a persistent growth path through measures such as faster management
execution based on the enhanced executive officer system at the beginning of the year, the building of an all-participatory management setup
encompassing business sites, branch offices, regional offices and the head office and efforts to improve productivity.
Looking at the business results, consolidated sales increased driven by growth in the Long-term Care Segment and the Child Care Segment,
given that the number of users of residential care services such as fee-charging old people’s homes remained firm and that the Group actively
established registered child care centers and other facilities and maintained high utilization. Income returned to profitability driven by theLong-term Care Segment, which improved earnings due to efficient collaboration among services by revising staff assignment and shift
management.
In the fiscal year under review, the Group posted net sales of 276,659 million yen (compared with 273,583 million yen in the previous fiscal
year), operating income of 4,206 million yen (compared with an operating loss of 785 million yen in the previous fiscal year), ordinary
income of 1,429 million yen (compared with an ordinary loss of 3,629 million yen in the previous fiscal year) and profit attributable toowners of parent of 1,403 million yen (compared with a loss attributable toowners of parent of 15,995 million yen in the previous fiscal

year).
Results by business segment are as follows:
From the fiscal year under review, the China business—the results of which were originally recorded in the Medical Support Segment, Longterm Care Segment, Health Care Segment, Child Care Segment, and Other—is presented separately as the China Business Segment. Childcare courses (babysitting courses, etc.), which were previously included in the Education System, are now included in the Child Care
Segment.
To compare the results in the fiscal year under review and the results in the previous fiscal year in the following results by business segment,
the business segments for the previous fiscal year have been reclassified as described above.
<Medical Support Segment>
Taking advantage of its longstanding management support expertise, the Group sought to promote the provision of high value-added services
and expand operations by strengthening multifaceted proposal-based sales in medical management. In the process of doing so, the Groupfocused on constitutional improvement to produce appropriate income, which would become the source for improving the treatment of staff,
in order to increase income through the acquisition and retention of human resources. The Group also prepared for the opening of a new“clinic receptionist work course” that would contribute to the acquisition of human resources for clinics. Earnings improved as the quality of
the Company’s services was appropriately evaluated, thanks to strategic sales activities that were enhanced in the second half of the fiscal
year under review.
As a result, sales remained weak and declined, but income increased, reflecting improvement to an appropriate level.
Net sales for this segment amounted to 108,322 million yen (compared with 108,785 million yen in the previous fiscal year), and operating
income for the segment was 8,012 million yen (compared with 7,691 million yen in the previous fiscal year).
<Long-term Care Segment>
With the aim of acquiring human resources to provide long-term care services and improving their retention, the Group stepped up activities
to promote employment through training programs aimed at new care workers, improved the treatment of care workers and expanded systems
for their career advancement.
The number of home care service users declined due to a shift to comprehensive businesses in preventive care services for the elderly amid
policy progress in the stricter selection of focus and the streamlining of insurance payments. However, the Group took steps to bolster theservice response to moderately and severely disabled users, and results began to be produced. In residential care services, the number of users
remained firm, particularly those of fee-charging homes for the elderly, which contributed to earnings. In both home care and residential careservices, the income level recovered as a result of a focus on efficiency in staff assignment and shift management.
While the growth in the number of home care service users remained sluggish, sales increased due to the growth in the number of residential
care service users, and income increased thanks to cost control through efficient staff assignment and facility operations.
Net sales for this segment came to 143,788 million yen (compared with 142,896 million yen in the previous fiscal year), and operating
income for the segment was 11,048 million yen (compared with 6,809 million yen in the previous fiscal year).

2

<Health Care Segment>
In Nichii Life housekeeping services, the Group strengthened the development of new customers by actively implementing season-limited
campaigns and promoted the continuous use of the services by enhancing the lineup to meet expanding service needs arising from increases
in elderly households and double-income households. In private brand products, which were born from customer feedback, the sales volume
increased steadily as a result of launching them in a selectable product mix in keeping with changes in users’ lifestyles.
Sales for the segment fell due to the discontinuation of food services and the downsizing of helper dispatch services. However, income for thesegment rose, reflecting steady growth in the numbers of Nichii Life housekeeping service users and private brand products sold.
With respect to operations for accepting foreign housework supporters, on whom a ban was lifted in the national strategy special zones, theGroup advanced preparations to commence services in Japan because it had received permission for operations in Tokyo, Kanagawa
Prefecture and Osaka City.
Net sales in this segment stood at 3,662 million yen (compared with 3,723 million yen in the previous fiscal year), and operating income was
643 million yen (compared with 568 million yen in the previous fiscal year).
<Education Segment>
In the COCO Juku brand, whose strength lies in the acquisition of conversation skills in group lessons, the number of students increased
steadily as a result of pursuing a customer focus, including easy access, ease of learning and friendliness.
The Group sought to increase customer satisfaction, provide effective courses and improve the utilization of teachers by providing lessons
emphasizing hospitable conversation and focusing on events to give lectures on English and cultures of the world by integrating online andschool lessons and appointing Filipino instructors. With the aim of operating community-based schools, the Group also opened schools inresidential areas where children have easy access, and effectively used home-study courses and classes.
The number of students decreased at one-on-one English conversation schools operated by GABA Corporation under the impact of lower
business confidence, resulting in a sales decline for those schools. However, income rose (operating loss shrank) due to advertisements for the
COCO Juku brand that emphasized cost-effectiveness and aggressive promotional events that took advantage of having schools throughout
Japan.
Net sales for the Education Segment totaled 12,771 million yen (compared with 13,003 million yen posted in the previous fiscal year).
Operating loss for the segment was 4,647 million yen (compared with an operating loss of 5,677 million yen posted in the previous fiscal
year).
<Child Care Segment>
In the Child Care Segment, the Group aggressively expanded its business bases centered on registered child care centers in a bid to reduce thenumber of children on the waiting lists for admission to child care facilities in communities and contribute to the active participation of
women. During the fiscal year under review, the number of child care facilities in operation reached 122 due to the opening of 42 new
facilities. The Group concentrated on sales and public relations activities, including efforts to enhance contact with local governments andchild care concierges and host exchange events for community members.
Although sales for the segment increased about 73% due to the maintenance of high utilization mainly in newly opened facilities, income
declined due to prior investments for the active opening of new facilities. However, the improvement has been seen in quarterly income.
In the company-led child care business advanced by the Cabinet Office, the Group announced the nationwide development of company-led
child care facilities under a basic agreement to use child care services concluded with Nippon Life Insurance Company. The Group is
preparing for the establishment of a total of 100 facilities by the end of fiscal 2018 by using real properties owned by Nippon Life Insurance
Company.
Net sales for the Child Care Segment totaled 5,940 million yen (compared with 3,431 million yen in the previous fiscal year). The operating
loss for the segment was 781 million yen (compared with a loss of 883 million yen in the previous fiscal year).
<China Business Segment>
The Group has built a system for providing services in China in 17 companies and six school corporations. In the fiscal year under review, theGroup focused on the establishment of schemes for personnel training and service provision cultivated in Japan by working to spread andpopularize Japanese-style long-term care (self-reliance support) in China. In addition, the Group contracted the “Promotion Project toEstablish Medical Technologies and Service Bases” of the Ministry of Economy, Trade and Industry and worked on activities to disseminate
and enhance long-term care and preventive care, etc. through empirical research for building and promoting the integrated community caresystem in China.
Sales rose with the increased numbers of consolidated subsidiaries and school corporations. However, income fell, reflecting expenses forprior investments, which were unable to be offset because it would take time to acquire customers and human resources to provide services.
The Group has decided to increase its overall productivity by establishing Nichii-HTW China Co., Ltd. with a business operator with IT
system technologies to develop IT systems that will contribute to business promotion for the purpose of providing customers throughout

3

China with efficient services and increasing customer satisfaction.
Net sales for this segment amounted to 1,966 million yen (compared with 1,604 million yen in the previous fiscal year). Operating loss for thesegment was 1,416 million yen (compared with a loss of 1,033 million yen in the previous fiscal year).
<Other Businesses>
In Other Businesses, the Nichii Gakkan Group made efforts to improve revenues by creating synergies between the businesses of
NICHIIGAKKAN CO., LTD. and those of the Group companies.
Net sales for this segment stood at 207 million yen (compared with 138 million yen in the previous fiscal year). Operating income was 285
million yen (compared with 274 million yen in the previous fiscal year).

42) Outlook for the year ending March 31, 2018
In the area of social security, various measures to enhance the labor supply are being implemented, including the revision of long-term carefees to improve the treatment of long-term care staff in April 2017, the promotion of the establishment of child care facilities to promote theemployment of women and reduce the number of children on the waiting lists for admission to child care facilities, and operations for
accepting foreign housework assistants in national strategy special zones.
The Nichii Gakkan Group will work to further improve the efficiency of business operation and enhance its earnings power by building asystem to promote business in a mobilized manner to promptly meet local needs at the business sites and in the branch offices.
In the principal businesses (medical support, long-term care and child care), the Group will continue to improve the retention of humanresources and develop services tailored to institutional and policy trends.
In the strategic businesses (language, health care and therapy), the Group will increase utilization at bases by promoting community-based
marketing and promotion. In operations for accepting foreign housework assistants in national strategy special zones, the Group plans tocommence services in the first half of the year.
In the globalization businesses (overseas business in China, etc.), local governments in China have begun embarking on the development oflong-term care infrastructure, and interest in Japanese-style long-term care is growing. Accordingly, the Group plans to establish long-termcare facilities in Beijing and Shanghai to further promote understanding of self-reliance support and long-term care for dementia patients. The
Group will also create a role model for long-term care services in China, taking advantage of the connection the Group has made with the
Chinese government and the service provision network and IT platform of local regional operating companies.
Taking these factors into consideration, the Group expects sales and income to increase in the next fiscal year as follows.
[Earnings forecast for the fiscal year ending March 31, 2018](Unit: Million yen)
Profit attributable
Net sales

Operating income

Ordinary income

to owners ofparentFiscal year ending
March 31, 2018
(Forecast)
Actual results forthe previous fiscal
year

300,000

9,300

6,000

3,000

276,659

4,206

1,429

1,403

(2) Analysis of financial position
1) Overview of financial position
During the fiscal year under review, cash and cash equivalents (“cash”) increased 1,816 million yen year on year, to 16,189 million yen. Cashflows from each category of activities and their main factors are described below.
[Cash flows from operating activities]
Net cash provided by operating activities stood at 9,379 million yen.
The main factors were depreciation and amortization and the amortization of goodwill.
[Cash flows from investing activities]
Net cash used in investing activities came to 3,567 million yen.
This was primarily the result of the purchase of property, plant and equipment and the purchase of intangible assets.
[Cash flows from financing activities]
Net cash used in financing activities came to 4,246 million yen.
This was chiefly due to the repayment of long-term loans payable.

5Trends in cash flow indicators for the Group can be seen below.
Year ended March 31, 2016

Year ended March 31, 2017

Equity Ratio (%)

20.0

19.1

Equity ratio based on present value (%)

27.2

28.3

Debt redemption (years)

35.0

10.3

Interest coverage ratio (times)

0.7

2.3

Notes:

Equity ratio: Shareholders’ equity/total assets
Equity ratio based on present value: Total present value of stock/total assets
Debt redemption: Interest-bearing liabilities/operating cash flow
Interest coverage ratio: Operating cash flow/interest payments

1. Each indicator was calculated from consolidated financial results.
2. Total present value of stock is the product of closing stock price at the end of period and the total number of outstanding
shares at the end of period (after deducting treasury stock).
3. Operating cash flow is equal to the cash flows from operating activities in the consolidated statements of cash flow.
Interest-bearing liabilities are all the liabilities on which interest is paid, out of the liabilities in the consolidated balance
sheet. Interest payments are the interest payments as shown in the consolidated statements of cash flow.
(3) Basic principles of profit distribution and dividends for the fiscal year under review and the next fiscal year
Our basic policy is to provide our shareholders with stable and continuous profit distributions. Considering business performance trends from a
mid- to long-term standpoint, we formulated a consolidated dividend policy.
For the year ended March 31, 2016, we are planning to pay a year-end dividend of 11 yen per share.
Cash Dividends per Share (Yen)Record dateYear ending March 31,
2017Year ending March 31,
2018

2Q-endYear-end

Annual11.00 (Actual)

11.00 (Forecast)

22.00 (Forecast)

11.00 (Forecast)

11.00 (Forecast)

22.00 (Forecast)(4) Business and other risks
Potential risks to the operations of each segment of the Nichii Group are described below.
The Group strives to mitigate these risks by enhancing its business portfolio, focusing on developing and providing high value-added services
that are not dependent on the medical insurance and long-term care insurance systems. However, under unexpected circumstances, these risks
could have serious implications for the Group’s business performance and financial position.
The Company identified the following risks at the end of the fiscal year under review, but risks associated with investments in shares in the
Company are not limited to those described below.
1) Business risks[Medical Support Segment]
The Nichii Group’s Medical Support Segment provides, among other services, medical services other than medical practice by medical
institutions, medical-related services, medical practice management consulting, and courses in medical administration. Medical institutions
will see major fluctuations in revenues due to biennial revisions of the medical service fees and medical insurance system reform. The Group
provides services to medical institutions, and the integrated tax and social security reform, percentage changes in medical service fees, oradvances in information technology could affect the Group’s contracts, including contract fees.
The number of students attending the Group’s courses in medical administration could fluctuate dramatically due to changes in theemployment environment and other factors, and this could affect the Group’s performance.
[Long-term Care Segment]
The Nichii Group’s Long-Term Care segment principally provides services regulated under the Long-Term Care Insurance Law and otherrelevant laws. Income from these services could be impacted by the revisions to the long-term care insurance system made every five years orby the revisions to compensation for long-term care made every three years. The Company strives to diversify risks by providing services in6the Health Care Segment that are not covered by long-term care insurance and by expanding its service offerings. Nevertheless, these efforts
may not be sufficient to offset a decrease in income that could be caused by a reduction in compensation for long-term care and other factors,
which could have a significant adverse effect on earnings.
The long-term care facilities (including group homes, pay nursing homes, and day-care facilities) operated by the Group offer communitybased services under lease agreements. The term of most of these lease agreements is 20 years, and declines in occupancy rates caused bydecreases in resident numbers and falls in market rates for residents could have adverse effects on earnings in the Long-Term Care segment.
The number of students attending the Group’s long-term care courses, especially training for newly appointed long-term care workers, could
fluctuate dramatically due to changes in the employment environment and other factors, and this could affect the Group’s performance.
[Education Segment]
The Nichii Group’s Education Segment provides services consisting mainly in the COCO Juku, COCO Juku Junior and GABA English
conversation schools. The amount of the course fees paid at the time of application for courses at these schools that corresponds to lessons yet
to be provided is included in the liability section of the balance sheet as “Advances received.” If a large number of students cancel theirclasses within a short period of time, a substantial amount of the advances received must be reimbursed, which may affect the financial
position and financial results of the Company.
[Child Care Segment]
The Nichii Group’s Child Care Segment provides child care services, including registered child care centers and child care centers in
hospitals and companies, as well as child care courses. Factors such as changes to child care systems could affect the expansion of these
services and the Group’s performance.
[China Business Segment]
The Nichii Group’s China Business consists in the cultivation of human resources to work in areas such as long-term care, post-natal care,housekeeping services and child care business as well as the provision of various services in China. Factors such as unforeseeable changes inlaws and regulations and political or social collapse in China could affect the development of this business and the Group’s performance.
2) Risks due to the internal management system
The Nichii Group is working to strengthen its self-enforcing operational control structure and internal check functions to prevent human error
and fraudulent activities. However, problems in operational control could cause a loss of stakeholder trust and could affect the Group’s
performance.
[Risks due to personal information]
The Nichii Group handles personal information specified in the Act on the Protection of Personal Information. The Group recognizes theprotection of personal information as an extremely important business issue and has established the Personal Information Protection
Committee to ensure the appropriate acquisition and handling of information. In addition, the Group takes preventive steps to block leaks of
personal information, including the establishment of regulations and in-house education and training.
However, personal information leaks could cause a loss of confidence in society and claims for compensation, among other things, which inturn could affect the Group’s results.
3) Official license and legal regulation in personnel business
To provide worker dispatching services in the Medical Support segment and Health Care segment, the Group has already obtained a license
for the general worker dispatching business under the Act for Securing the Proper Operation of Worker Dispatching Undertakings andImproved Working Conditions for Dispatched Workers (Worker Dispatching Law). Under the Worker Dispatching Law, if a business engaged
in a worker dispatching business meets any of the conditions for disqualification or commits illegal acts, its license could be canceled, or it
could be ordered to suspend its business.
The Nichii Group strives to enhance compliance, but if the Group violates laws and regulations, its performance could be adversely affected.
Further, the Worker Dispatching Law and related laws and regulations could be amended in the future according to employment conditions
and other factors and, depending on the nature of the amendment, this could affect the Group’s performance.
4) Risk related to changes in the employment environment
The Nichii Group has its own unique talent acquisition scheme for securing human resources based on a business model dubbed “From
Education to Employment.” However, with decline in the working population forecast, any shortage of human resources arising from changes
in the employment environment could adversely affect the Group’s service provision.
5) Risks due to natural disasters and accidents
The Nichii Group provides services at medical institutions with which the Group has contractual relations, long-term care facilities, schools,

7and other facilities across the country. If natural disasters, including earthquakes and tsunamis, occur, or if infectious diseases, including new
types of influenza, spread, the Group’s staff and facilities could not work in the affected areas. In that case, the Group will strive to maintainits system for providing services by endeavoring to promptly restore the functions of the affected facilities and dispatching support staff.
However, if the Group cannot provide services, its results and financial position could be adversely affected.
Each branch and facility of the Group is reviewing all its countermeasures against risks related to business continuity in emergencies and isseeking to strengthen its crisis management system, putting priority on the safety of customers.
6) Risks related to the application of impairment accounting
The Nichii Gakkan Group may need to realize an impairment loss on land and buildings owned, goodwill and/or other assets if the
profitability of each business declines significantly, which may affect the financial position and financial results of the Group.
If IFRS is adopted, goodwill will become a non-amortizable asset. If in an impairment test, which will be conducted at least once a year, therecoverable value proves to be lower than the book value, an impairment loss could be posted.
7) Risks related to deferred tax assets
The Nichii Group recorded deferred tax assets based on future estimates of taxable income and the results of scheduling temporary
differences. If the Company lowered its taxable income estimate in the future due to deterioration in the operating environment or otherfactors, the need to reverse deferred tax assets could arise and this could affect the Group’s performance and financial position.
8) Risks due to overseas expansion
The Nichii Group is implementing a globalization strategy focused on China business, and is developing business not only in China but alsoin Singapore, Australia, Canada and the Philippines. The Group endeavors to gather information concerning aspects such as political trends,
changes to the law and the public security situation and implement measures to reduce the risks associated with business expansion overseas
and to deal with them appropriately, but the Group’s business progress and operating results may be affected in the event of a change that
could not be predicted or exceeded projections such as the following.
・Unforeseen changes in laws and regulations
・Political or social disorder including acts of terrorism
・Greater than anticipated fluctuation in market or economic trends or exchange rates
・Differences in labor-management relations or business customs

8

2. Overview of Nichii GroupThe Nichii Group consists of Nichii Gakkan Company and its 63 subsidiaries and three affiliates, and is engaged in six segments (Medical
Support, Long-Term Care, Health Care, Education, Child Care and China business).
In the Medical Support segment, the Group provides contract administration services to medical institutions and pharmacies, sells medical
equipment to them, and disinfects and sterilizes equipment in medical institutions. The Group’s services in this segment also include medical
business consulting, the operation of clinics in Singapore, medical courses including courses for medical administration.
The Long-Term Care segment provides institutional services such as long-term care insurance. These services include home-care services(including home-care support, home-visit care, home-visit bathing, home-visit nursing care, and day care services) and facility-care services(including care for residents in specific facilities and care for group home residents with dementia). In this segment, the Group also sells andleases welfare equipment, provides welfare services for the disabled, and runs long-term care courses, especially training for newly appointed
long-term care workers, etc.
The Health Care segment sells health care products as services not covered by institutional services, and also provides a housekeeping service
and a care staff dispatching service, produces and sells flowers, plants, seeds and seedlings, operates and manages sightseeing facilities, breeds
and sells pet dogs, and operates grooming salons and hotels exclusively for dogs.
The Education segment provides language education to meet the needs of a wide range of age groups, through activities such as the provision of
one-on-one English conversation lessons by GABA Corporation, the expansion of COCO Juku and COCO Juku Junior group lessons, and thedevelopment of an overseas study support system.
The Child Care segment provides a range of services including the operation of in-hospital child care centers, the operation of directly managed
in-company child care centers and company-led child care facilities, and the provision of child care courses (babysitting courses, etc.).
The China Business segment cultivates post-natal care workers, provides post-natal care services, cultivates long-term care workers, provides
long-term care services, cultivates housekeepers, provides housekeeping services, and sells sanitary goods, cultivates human resources for childcare, provides child care services and sells child care goods in China.
In addition, the Group, primarily subsidiaries, offers data processing, stores and delivers goods, publishes and sells books, and engages inleasing.
The table below shows the main services and products in each business category of the Group and the main companies that provide thoseservices and products. These business categories are roughly the same as business segments.

Segments

Principal Businesses/Products

Principal Companies

Medical practice services such as reception, medical fee claims, accounting,computer operations, and medical record management; sale, disinfection andMedical Support

sterilization services (inside the hospital) for medical equipment; medical
affairs consulting; operation, etc. of clinics in Singapore; provision of courses

NICHIIGAKKAN CO., LTD.
Nihon Support Service Co., Ltd.
NICHII INTERNATIONAL CLINIC
PTE.LTD.

in medical administration.
Home-care support (creation of care plan); home-visit care; home-visit
bathing; home-visit nursing care; day care; care service for specified facility
Long-Term Care

residents; care for group home residents with dementia; sale and rental of
welfare equipment; welfare services for the disabled; provision of training for

NICHIIGAKKAN CO., LTD.
Nichii Carenet Co., Ltd.
Nichii Carepalace Company

newly appointed long-term care workers and training for experienced
certified care workers
Sale of health care products; housekeeping services; care staff dispatching
service; production and sale of flowers, plants, seeds and seedlings; operation NICHIIGAKKAN CO., LTD.
Health Careand management of sightseeing facilities; cultivation of therapy dogs andNichii Carenet Co., Ltd.

implementation of therapy activities; breeding and sale of pet dogs; operation Nichii Green Farm Companyof grooming salons exclusively for dogs, etc.
NICHIIGAKKAN CO., LTD.
GABA Corporation
SELC AUSTRALIA PTY LTD.
Education

English conversation schools; operation of members’ sports
clubs, focused on swimming schools

SELC ENGLISH LANGUAGE
CENTRE CANADA LTD.
SELC CAREER COLLEGE CANADA LTD.

SELC-Global Center Philippines
Corporation
JSS Corporation

9

Segments

Principal Businesses/Products

Principal Companies

Operation of in-hospital child care centers; operation of directly managed
Child Carein-company child care centers; operation of company-led child care facilities;

NICHIIGAKKAN CO., LTD.
Sawayaka Hoiku Company.

provision of babysitting courses, etc.
Cultivation of post-natal care workers and provision of post-natal careservices; cultivation of long-term care workers and provision of long-term
China Businesscare services; cultivation of housekeepers and provision of housekeeping

Subsidiaries in China

services; sale of sanitary goods; cultivation of human resources for child careand provision of child care services; sale of child care goods in China.
Nihon Support Service Co., Ltd.
Other

Data processing; goods storage and delivery service;

Tokyo Marunouchi Publishing

publication and sale of books; leasing

Co., Ltd.
Nihon Credit Lease Corp.

Other Businesses(consolidated subsidiaries)

Nihon Support
Service Co., Ltd.

Tokyo Marunouchi
Publishing Co., Ltd.

Nihon Credit
Lease Corp.

Data processing
Goods storage and delivery service

Publication andsale of educational books, etc.

Leasing

NICHIIGAKKAN CO., LTD.

Medical Support Segment

Education Segment

Long-Term Care Segment

Child Care Segment

Provision of medical
clerk services, etc.

Provision of language
education courses, etc.

Provision of
long-term care services

Provision ofchild care services

Provision of medical
administration courses

NICHIIGAKKAN CO., LTD.

Provision of
long-term care courses

Provision of child care courses

NICHIIGAKKAN CO., LTD.

NICHIIGAKKAN CO., LTD.

Nichii Carenet Co., Ltd.

Sawayaka Hoiku Company.

NICHIIGAKKAN CO., LTD.
GABA Corporation
Nihon Support Service Co.,Ltd.

SELC AUSTRALIA PTY LTD.

NICHII INTERNATIONAL
CLINIC PTE.LTD.

SELC CAREER COLLEGE
CANADA LTD.
SELC ENGLISH LANGUAGE
CENTRE CANADA LTD.

SELC-Global Center Philippines
Corporation

China Business Segment
Cultivation of post-natal carers andprovision of post-natal services

Cultivation of long-term carers andprovision of long-term care services
Cultivation of housekeepers andprovision of housekeeping services
Sale of sanitary products

Nichii Carepalace Company

Cultivation of child carers andprovision of child care services

Health Care Segment

Cultivation of child carers andprovision of child care services

Provision of services not coveredby long-term care insurance

Subsidiaries in China

NICHIIGAKKAN CO., LTD.
JSS Corporation*
Nichii Carenet Co., Ltd.

Nichii Green Farm Company

Provision of services

Customers
Japan

Japan

Medical institution

Japan
Students

Japan

Long-term care facilities

China

Users of child care services

Users of long-term care services

Students

Users post-natal carers andprovision of post-natal services

Users of long-term care services

Students
Lifestyle support services

Users of housekeeping services

Students

Users of child care services
Students

Note: Asterisk indicates equity-method affiliate

10(For reference)In the fiscal year ending March 31, 2017, the Group will change its reportable segments as follows.
・The therapy business and the grooming business will be separated from the Health Care segment and become independent
as the Therapy segment.
・The care staff dispatching service will be transferred from the Health Care segment to the Long-Term Care segment.
The table below shows the main services and products in each business category and the positioning of each business.
Segments

Principal Businesses/Products
Medical practice services such as reception, medical fee claims, accounting,computer operations, and medical record management; sale, disinfection andMedical Support

sterilization services (inside the hospital) for medical equipment; medical
affairs consulting; operation, etc. of clinics in Singapore; provision ofcourses in medical administration

Principal Companies
NICHIIGAKKAN CO., LTD.
Nihon Support Service Co., Ltd.
NICHII INTERNATIONAL CLINIC
PTE.LTD.

Home-care support (creation of care plan); home-visit care; home-visit
bathing; home-visit nursing care; day care; care service for specified facility
Long-Term Care

residents; care for group home residents with dementia; sale and rental of
welfare equipment; welfare services for the disabled; provision of training
for newly appointed long-term care workers and training for experienced

NICHIIGAKKAN CO., LTD.
Nichii Carenet Co., Ltd.
Nichii Carepalace Company

certified care workers; provision of care staff dispatching service, etc.

Health Care

Sales of health care products; housekeeping service; care

NICHIIGAKKAN CO., LTD.

staff dispatching service

Nichii Carenet Co., Ltd.
NICHIIGAKKAN CO., LTD.
GABA Corporation
SELC AUSTRALIA PTY LTD.
SELC ENGLISH LANGUAGE

Education

English conversation schools; operation of members’ sports

CENTRE CANADA LTD.

clubs, focused on swimming schools

SELC CAREER COLLEGE CANADALTD.
SELC-Global Center Philippines
Corporation
JSS Corporation

Operation of in-hospital child care centers; operation of directly managed
Child Carein-company child care centers; operation of company-led child carefacilities; provision of babysitting courses

NICHIIGAKKAN CO., LTD.
Sawayaka Child Care Co., Ltd.

Involvement in a wide range of business activities in China including
cultivation of post-natal carers and provision of post-natal services,
China Business

cultivation of long-term carers and provision of long-term care services,
cultivation of housekeepers and provision of housekeeping services, sale ofSubsidiaries in China

sanitary products, cultivation of child carers and provision of child careservices, sale of child care products
NICHIIGAKKAN CO., LTD.
Nichii Green Farm Company

Therapy

Cultivation of therapy dogs and implementation of therapy activities;

NICHII INTERNATIONAL

breeding and sale of pet dogs; operation of grooming salons and hotels

HOLDINGS AUSTRALIA PTY.LTD

exclusively for dogs; production and sale of flowers, plants, seeds and

NICHII LABRADOODLES

seedlings; operation and management of sightseeing facilities, etc.

AUSTRALIA PTY.LTD
SUNSET HILLS PTY LTD
CLOUD CATCHER PTY.LTD

Other

Data processing, goods storage and delivery service, publication and sale ofbooks, lease business, etc.

Nihon Support Service Co., Ltd.
Tokyo Marunouchi Publishing Co., Ltd.
Nihon Credit Lease Corp.

11

Other Businesses(consolidated subsidiaries)
Nihon Support
Service Co., Ltd.

Tokyo Marunouchi
Publishing Co., Ltd.

Nihon Credit
Lease Corp.

Data processing
Goods storage and delivery service

Publication andsale of educational books, etc.

Leasing

NICHIIGAKKAN CO., LTD.

Medical Support Segment

Education Segment

Long-Term Care Segment

Child Care Segment

Provision of medical
clerk services, etc.

Provision of language
education courses, etc.

Provision of
long-term care services

Provision ofchild care services

NICHIIGAKKAN CO., LTD.

Provision of
long-term care courses

Provision of child care courses

NICHIIGAKKAN CO., LTD.

NICHIIGAKKAN CO., LTD.

Provision of medical
administration courses

NICHIIGAKKAN CO., LTD.

China Business segment

Therapy Segment

Cultivation of post-natal carers andprovision of post-natal services

Cultivation of therapy dogs andprovision of therapy dogs services

Cultivation of long-term carers andprovision of long-term care services

Operation of grooming salons

GABA Corporation
Nihon Support
Service Co., Ltd.

Nichii Carenet Co., Ltd.

Sawayaka Hoiku Company.

SELC AUSTRALIA PTY LTD.
NICHII INTERNATIONAL
CLINIC PTE.LTD.

Cultivation of housekeepers andprovision of housekeeping services

Nichii Carepalace Company

SELC-Global Center Philippines
Corporation

NICHIIGAKKAN CO., LTD.

Sale of sanitary products
Nichii Green Farm Company

SELC CAREER COLLEGE
CANADA LTD.
SELC-G LANGUAGE
CENTRE CANADA LTD.

Breeding and sale of pet dogs

Cultivation of child carers andprovision of child care services

Health Care Segment

Sale of child care products

NICHII INTERNATIONAL HOLDINGSAUSTRALIA PTY.LTDNICHII LABRADOODLES AUSTRALIA P TY.LTD

Provision of services not covered

Subsidiaries in China

NICHIIGAKKAN CO., LTD.

SUNSET HILLS PTY LTD

Nichii Carenet Co., Ltd.

CLOUD CATCHER PTY.LTD

JSS Corporation*

Provision of services

Customers
Japan

Japan

Medical institution

Japan

Students

Students

Japan

China

Long-term care facilities

Users of child care services

Users post-natal carers andprovision of post-natal
services

Japan
Users of long-term careservices

Users of long-term careservices

Users of long-term careservices

Pet dog purchaser

Students

Lifestyle support services

Users of housekeeping
services

Users of child care services

Students

Users of child care services

Australian
Users of child care services

Students
International student

Note: Asterisk indicates equity-method affiliate

3. Basic Approach to Selection of Accounting Standards
The Nichii Group adopts Japanese accounting standards to ensure comparability of financial statements between companies and periods, andprepares its consolidated financial statements in accordance with Ordinance on Terminology, Forms, and Preparation Methods of Consolidated
Financial Statements (excluding Chapter 7 and Chapter 8) (Finance Ministry Ordinance No. 28 of 1976).
We will examine the adoption of international financial reporting standards in light of the situation both inside and outside of Japan.

124. Consolidated Financial Statements and Major Notes(1) Consolidated balance sheets(Thousand yen)
Fiscal 2016
(As of March 31, 2016)
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable—trade
Short-term investment securities
Merchandise and finished goods
Work in progress
Raw materials and supplies
Deferred tax assets
Other
Less: allowance for doubtful accounts

Fiscal 2017
(As of March 31, 2017)13,530,688
32,803,595
3,020,964
1,037,203
13,335205,143
1,477,876
11,178,378(85,387)

16,357,197
32,855,836
200,416
1,076,922
8,570
232,5882,314,021
11,687,703(9,802)

63,181,798

64,723,455※２ 51,585,011※２ 52,811,993(27,584,443)(29,723,740)

Buildings and structures—net

24,000,568

23,088,252

Machinery, equipment and vehicles
Accumulated depreciation

89,085(74,257)

88,992(78,155)

Total current assets
Fixed assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation

Machinery, equipment and vehicles—net
Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures—net

14,828

10,836※２ 4,531,686※２ 4,633,559(3,632,140)(3,829,133)

899,545804,426

8,157,252
45,584,267(6,276,345)

8,444,356
54,742,692(7,839,548)

Lease assets—net

39,307,921

46,903,144

Construction in progress

878,358

1,354,524

73,258,475

80,605,541

Intangible assets
Goodwill
Software
Software in progress
Lease assets
Other

15,776,886
2,577,303
2,253,761
221,353
193,646

14,225,873
2,701,829
2,367,560
170,901
207,001

Total intangible assets

21,022,951

19,673,166

Land
Lease assets
Accumulated depreciation

Total property, plant and equipment

13

(Thousand yen)
Fiscal 2016
(As of March 31, 2016)
Investment and other asset
Investment securities
Long-term loans receivable
Long-term prepaid expenses
Guarantee deposits
Deferred tax assets
Other
Allowance for investment loss
Less: allowance for doubtful accounts
Total investments and other assets

Fiscal 2017
(As of March 31, 2017)※１ 2,281,430※１ 1,567,930

8,442,236
2,545,462
13,053,827
518,006※１ 741,536

8,022,901
2,297,901
13,739,404
717,096※１ 739,777(140,000)(735,588)(379,098)

26,706,911

26,705,912

120,988,337

126,984,620

184,170,136

191,708,076

884,520
20,307,461
4,444,089
1,358,392
1,199,674
1,496,584
16,300,768
11,206,334
1,468
4,892,578
38,0006,041,741

840,286
20,269,380
4,869,890
1,431,046
1,990,593
1,414,113
15,914,778
11,337,562
4,990,083
38,0005,435,045

Total current liabilities

68,171,614

68,530,780

Non-current liabilities
Long-term loans payable
Lease obligations
Long-term advances received
Deferred tax liabilities
Asset retirement obligations
Net defined benefit liability
Other

19,548,389
43,399,237
3,248,604
377,666
2,308,169
7,015,433
1,999,142

17,563,057
52,192,808
3,716,866
7,321
2,378,419
7,311,817
2,082,623

Total fixed assets
Total assets
Liabilities
Current liabilities
Notes and accounts payable—trade
Short-term loans payable
Current portion of long term loans payable
Lease obligations
Income taxes payable
Accrued consumption taxes
Accrued expenses
Advances received
Deferred tax liabilities
Provision for bonuses
Provision for directors’ bonuses
Other

Total non-current liabilities
Total liabilities

14

77,896,643

85,252,913

146,068,258

153,783,694

(Thousand yen)
Fiscal 2016
(As of March 31, 2016)
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury stock, at cost
Total shareholders’ equity

Fiscal 2017
(As of March 31, 2017)

11,933,790
17,354,214
19,635,508(11,377,668)

11,933,790
17,277,876
20,006,631(11,376,929)

37,545,845

37,841,369

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustments
Remeasurements of defined benefit plans

12,815333,133(1,022,986)

20,543(457,572)(811,515)

Total accumulated other comprehensive income(677,038)(1,248,544)

511,733
721,337

531,839799,717

Subscription rights to shares
Non-controlling interests
Total net assets
Total liabilities and net assets

15

38,101,877

37,924,381

184,170,136

191,708,076

(2) Consolidated statements of income and comprehensive income(Consolidated statements of income)(Thousand yen)
Fiscal 2016
(from April 1, 2015
to March 31, 2016)

Fiscal 2017(from April 1, 2016
to March 31, 2017)

Net sales
Cost of sales

273,583,422
223,872,201

276,659,882
224,459,969

Gross profit

49,711,220

52,199,913

Selling, general and administrative expenses
Advertising and promotion expenses
Directors’ compensation
Salaries and benefits
Provision for employee bonuses
Provision for directors’ bonuses
Provision for directors’ retirement benefits
Stock-based compensation expenses
Legal welfare expenses
Travel and transportation expenses
Rent expenses
Provision of allowance for doubtful accounts
Depreciation and amortization
Amortization of goodwill
Other6,315,391
169,358
18,887,041
1,166,308
38,000549,61728,534
3,304,586
1,653,906
3,288,174
10,2991,353,246
2,141,812
11,590,309

4,432,329
184,847
17,956,358
1,119,010
38,000611,243
29,2753,280,131
1,522,707
3,426,398
3,988
1,593,053
2,144,110
11,651,837

50,496,590

47,993,291(785,369)

4,206,621

169,256
220,968
340,101
106,349
41,349270,480

151,528
188,103
176,310401,60973,67055,250426,047

1,148,505

1,472,519

3,456,218
59,065477,447

4,103,515
36,745
109,805

3,992,731

4,250,066(3,629,594)

1,429,074-

8,158
50,6101,144-

59,913

Total selling, general and administrative expenses
Operating income (loss)
Non-operating income
Interest income
Rent income
Subsidy income
Foreign exchange gains
Incentive income
Share of profit of entities accounted for using equity method
Other
Total non-operating income
Non-operating expenses
Interest expenses
Rent expenses
Other
Total non-operating expenses
Ordinary income (loss)
Extraordinary income
Gain on reversal of subscription rights to shares
Gain on reversal of loss on cancellation of lease agreement
Other
Total extraordinary income

16

(Thousand yen)
Fiscal 2016
(from April 1, 2015
to March 31, 2016)
Extraordinary losses
Loss on retirement of property, plant and equipment, net
Loss on sales of property, plant and equipment, net
Loss on valuation of shares of subsidiaries and associates
Provision of allowance for doubtful accounts
Impairment loss
Other

Fiscal 2017(from April 1, 2016
to March 31, 2017)※１ 23,451※２ 547※１ 15,350※２ 507

701,999
408,463※３ 5,718,710※３ 120,936

744,905

2,221

Total extraordinary losses

7,598,078

139,016

Net income (loss) before taxes(11,227,673)

1,349,971

1,309,512
3,573,033

1,502,718(1,417,447)

Income taxes—current
Income taxes—deferred
Total income taxes

4,882,545

85,271

Net income (loss)(16,110,218)

1,264,700(114,286)(138,527)(15,995,932)

1,403,227

Profit (loss) attributable to non-controlling interests
Profit (loss) attributable to owners of parent

17

(Consolidated statements of comprehensive income)(Thousand yen)
Fiscal 2016
(from April 1, 2015
to March 31, 2016)
Net income
Other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustments
Remeasurements of defined benefit plans, net of tax
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to:Comprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests

18

Fiscal 2017(from April 1, 2016
to March 31, 2017)(16,110,218)

1,264,700(8,663)247,374(500,100)

7,739(828,077)
211,471※１ (261,389)※１ (608,866)(16,371,608)

655,833(16,240,632)

831,721(130,975)(175,888)

(3) Consolidated statements of changes in net assets
Fiscal 2016 (from April 1, 2015 to March 31, 2016)(Thousand yen)
Accumulated other
Shareholders’ equity
comprehensive
incomeValuation
Treasury stock, at Total shareholders’ difference on
Capital surplus Retained earnings
cost
equityavailable for-salesecurities

Capital stock
Balance at the beginning of theperiodChanges of items during theperiodIncrease (decrease) due tochange in equity of subsidiaries,
etc.
Dividends from retained
earnings
Profit (loss) attributable toownersof parent

11,933,790

17,354,214

37,399,513(1,361,086)(15,995,932)(15,995,932)(26)

Disposal of treasury stock

Balance at the end of the period

56,765,561(1,361,086)

Purchase of treasury stock

Change of scope of
consolidation
Changes other thanshareholders’equity during the period (net)Total changes of items during
theperiod(9,921,957)(1,455,863)(1,455,863)

152

125

(406,959)

21,479(406,959)(8,663)--(17,764,004)(1,455,711)(19,219,715)(8,663)

11,933,790

17,354,214

19,635,508(11,377,668)

37,545,845

12,815

Accumulated other comprehensive income

Balance at the beginning of theperiodChanges of items during theperiodIncrease (decrease) due tochange in equity of subsidiaries,
etc.
Dividends from retained
earnings
Profit (loss) attributable toownersof parent

Foreign currencytranslation
adjustments

Remeasurementsof defined
benefit
plans

Total
accumulated
othercomprehensive
incomeStock acquisitionrightsNon-controllinginterests

Total net assets

69,069(522,886)(432,337)-

352,000

56,685,224(1,361,086)(15,995,932)

Purchase of treasury stock(1,455,863)

Disposal of treasury stock

125

Change of scope of
consolidation
Changes other thanshareholders’equity during the period (net)Total changes of items during
theperiodBalance at the end of the period(406,959)
264,063(500,100)(244,700)

511,733

369,336

636,369

264,063(500,100)(244,700)

511,733

369,336(18,583,346)

333,133(1,022,986)(677,038)

511,733

721,337

38,101,877

19

Fiscal 2017 (from April 1, 2016 to March 31, 2017)(Thousand yen)
Accumulated other
Shareholders’ equity
comprehensive
incomeValuation
Treasury stock, at Total shareholders’ difference on
Capital surplus Retained earnings
cost
equityavailable for-salesecurities

Capital stock
Balance at the beginning of theperiodChanges of items during theperiodIncrease (decrease) due tochange in equity of subsidiaries,
etc.
Dividends from retained
earnings
Profit (loss) attributable toownersof parent

11,933,790

17,354,214

19,635,508(76,337)(1,412,233)(1,412,233)

1,403,227

1,403,227(425)

Disposal of treasury stock

Balance at the end of the period

37,545,845

12,815(76,337)

Purchase of treasury stock

Change of scope of
consolidation
Changes other thanshareholders’equity during the period (net)Total changes of items during
theperiod(11,377,668)

(740)

(740)

1,479

1,054

380,554

380,554
7,727-(76,337)

371,123739

295,524

7,727

11,933,790

17,277,876

20,006,631(11,376,929)

37,841,369

20,543

Accumulated other comprehensive income

Balance at the beginning of theperiodChanges of items during theperiodIncrease (decrease) due tochange in equity of subsidiaries,
etc.
Dividends from retained
earnings
Profit (loss) attributable toownersof parent

Foreign currencytranslation
adjustments

Remeasurementsof defined
benefit
plans

Total
accumulated
othercomprehensive
incomeStock acquisitionrightsNon-controllinginterests

Total net assets

333,133(1,022,986)(677,038)

511,733

721,337

38,101,877(76,337)(1,412,233)
1,403,227

Purchase of treasury stock(740)

Disposal of treasury stock

1,054

Change of scope of
consolidation
Changes other thanshareholders’equity during the period (net)Total changes of items during
theperiodBalance at the end of the period

380,554(790,705)

211,471(571,506)

20,10678,380(473,020)(790,705)

211,471(571,506)

20,10678,380(177,495)(457,572)(811,515)(1,248,544)

531,839799,71737,924,381

20

(4) Consolidated statements of cash flows(Thousand yen)
Fiscal 2016
(from April 1, 2015
to March 31, 2016)
Cash flows from operating activities:
Income (loss) before income taxes
Depreciation and amortization
Amortization of goodwill
Impairment loss
Increase (decrease) in provision for directors' retirement
benefits
Increase (decrease) in provision for bonuses
Increase (decrease( in provision for directors' bonuses
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in net defined benefit liability
Increase (decrease) in allowance for investment loss
Interest and dividends income
Interest expenses
Share of (profit) loss of entities accounted for using equity
methodLoss on valuation of shares of subsidiaries and associates
Loss on retirement of property, plant and equipment, net(Gain) loss on sales of property, plant and equipment, net
Stock-based compensation expenses(Increase) decrease in notes and accounts receivable-trade(Increase) decrease in inventories(Increase) decrease in other current assets
Decrease (increase) in claims provable in bankruptcies(Increase) decrease in other fixed assets
Increase (decrease) in notes and accounts payable—trade
Increase (decrease) in accrued consumption taxes
Increase (decrease) in other current liabilities
Increase (decrease) in other non-current liabilities
Other, net
Sub-totalInterest and dividends income received
Proceeds from dividend income from entities accounted forusing equity method
Interest expenses paid
Income taxes paid
Net cash provided by operating activities

21

Fiscal 2017(from April 1, 2016
to March 31, 2017)(11,227,673)
5,945,753
2,141,812
5,718,710

1,349,971
5,895,983
2,144,110
120,936(166,513)-(165,861)(1,700)397,303461,780140,000(170,988)
3,456,218

75,173(25,707)509,527(153,256)
4,103,515(41,349)(55,250)

701,999
23,451547
360,903
173,457(478,476)(643,033)
11,07580,165(24,123)(2,097,807)
1,894,571
596,544910,159

15,350(1,144)29,275
221,922(101,114)(134,469)
1,499
263,580(217,774)(85,682)
76,865580,549(295,988)

7,996,928

14,317,873

41,57442,933

6,250

8,750

(3,456,334)(2,041,494)(4,101,253)(889,256)

2,546,924

9,379,047

(Thousand yen)
Fiscal 2016
(from April 1, 2015
to March 31, 2016)
Cash flows from investing activities:
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of short-term investment securities
Proceeds from sales of short-term investment securities
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sales of investment securities
Purchase of shares of subsidiaries resulting in change in scopeof consolidation
Purchase of investments in subsidiaries resulting in change inscope of consolidation
Payments of loans receivableCollection of loans receivable
Payments for guarantee deposits
Proceeds from collection of guarantee deposits
Subsidy income
Other, net
Net cash used in investing activities
Cash flows from financing activities:
Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable
Repayment of long-term loans payable
Proceeds from sales of treasury stock
Purchase of treasury stock
Cash dividends paid by parent company
Dividends paid to non-controlling interests
Repayments of lease obligations
Purchase of investments in subsidiaries not resulting inchange in scope of consolidation
Other, net
Net cash provided by (used in) financing activities

Fiscal 2017(from April 1, 2016
to March 31, 2017)(799,844)
1,499,844(1,520,837)
1,700,000(2,046,714)
486(1,791,095)(1,005,610)-(311,274)
311,274(502,798)
2,319,644(2,186,276)
7,161(1,953,717)(19,059)
500,000-※３ (470,421)※３ (1,394,781)※３ (499,278)(1,566,380)
668,814(589,923)
600,873
310,418(315,311)(673,760)
194,293(1,435,673)
841,508
470,067(158,956)(6,250,061)(3,567,267)

18,338,627(8,813,574)
125(1,455,863)(1,360,387)(9,600)(1,262,905)(38,041)
2,821,502(4,328,556)
42(740)(1,410,995)(7,500)(1,215,967)(48,532)(83,101)(6,013)

16,913

5,381,875(4,246,443)

Effect of exchange rate changes on cash and cash equivalents(20,018)(37)

Net increase (decrease) in cash and cash equivalents

1,658,720

1,565,298

Cash and cash equivalents at beginning of year
Increase in cash and cash equivalents from newly consolidated
subsidiary

9,821,045

14,373,159

2,893,394

250,970※１ 14,373,159※１ 16,189,428

Cash and cash equivalents at end of year22