Consolidated Financial Results for the Fiscal Year Ended March 31, 2022

(Under Japanese GAAP)May 12, 2022
Listed company name:

Drecom Co., Ltd.

Listing

Tokyo Stock Exchange

Code number

3793

URL:

https://drecom.co.jp/

Representative

President and Representative Director: Yuki Naito

Contact person

Board of Directors: Hideki Goto (TEL) +81 (0)50-3101-9977

Scheduled date of annual general meeting of shareholders: June 24, 2022
Scheduled date to file quarterly securities report: June 24, 2022
Scheduled start date to commence dividend payments: June 10, 2022
Preparation of supplementary materials on quarterly financial results: Yes
Holding of quarterly financial results briefings: Yes(Yen amounts are rounded down to millions, unless otherwise noted.)
1. Consolidated Financial Results for the fiscal year ended March 31, 2022 (From April 1, 2021 to March 31, 2022)(1) Consolidated operating results

Net sales

Operating income

Fiscal year ended%

March 31, 2022
March 31, 2021
Note: Comprehensive income(% is Year-on-year rate of increase / decrease)
Attributable to owners
Ordinary incomeof parent
quarterly net income%%%

10,528

-11.1

1,591

-22.5

1,541

-23.6

807

-50.3

11,840

16.7

2,052

232.7

2,019

217.5

1,624

128.4

For the fiscal year ended March 31 2022 ¥808 million yen (-50.3%)
For the fiscal year ended March 31 2021 ¥1,626 million yen (128.0%)

Net income
per share

Diluted earnings
per share

Return on equity

Fiscal year ended

Yen

Yen

%

March 31, 2022

28.29

28.26

57.00

56.85

March 31, 2021

Ratio of ordinary Ratio of operating
profit to total
income toassetsnet sales
%

%

19.4

16.0

15.1

55.0

25.2

17.3

Reference: Share of profit (loss) of entities accounted for using equity method
For the fiscal year ended March 31, 2022 ¥ - million
For the fiscal year ended March 31, 2021 ¥ - million(2) Consolidated financial position
Total Assets
As ofEquity-to-asset ratio

Net assets per share

million yen

million yen

%

Yen

9,653

4,574

46.9

159.06

9,610

3,855

39.5

132.91March 31, 2022
March 31, 2021
Reference: Equity capital

Net Assets

As of March 31, 2022
As of March 31, 2021

¥4,522 million¥3,794 million(3) Consolidated cash flows
Cash flows fromoperating activities
As ofCash flows frominvesting activities

Cash and cash
equivalents at
end of period

Cash flows fromfinancing activities

million yen

million yen%

Yen

March 31, 2022

1,602

-1,765

-387

4,732

March 31, 2021

3,196

-1,140968

5,283

2. Consolidated cash flows
Annual dividends
First
SecondThird
Fiscalquarter-end quarter-end quarter-end year-end

Total cash
dividends(Total)Total

Ratio of
Payout ratio dividends to(Consolidated) net assets(Consolidated)

Fiscal year ended

Yen

Yen

Yen

Yen

Yen

million yen%%

March 31, 2021

－

0.00

－

0.00

0.00

－

－

－

March 31, 2022
March 31, 2023 (Forecast)

－

0.00

－

5.00

5.00

145

17.7

3.4

－

0.00

－

5.00

5.00

11.8

3. Forecast of consolidated financial results for the fiscal year ending March 31, 2023
(April 1, 2022 – March 31, 2023)(% increase or decrease from the same period of previous year)

Sales

Operating income

Fiscal year ending

March 31, 2023%

13,000

23.5

%

2,000

Profit attributable toEarnings per shareowners of parent

Ordinary income

25.7

%

1,900

23.2

%

1,200

48.6

42.20

* Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in the change inscope of consolidation): None
(2) Changes in accounting policies, changes in accounting estimates, and re-display of amendments(i) Changes in accounting policies due to revisions to accounting standards: Yes(ii) Changes in accounting policies due to other reasons: None(iii) Changes in accounting estimates: None(iv) Retrospective restatement: None
(Note) For details, please refer to p.13 “3. Consolidated Financial Statements and Key Notes (5) Notes to Consolidated
Financial Statements”.
(3) Number of issued shares (common shares)(i) Total number of issued shares at the end of the period (including treasury shares)
As of March 31, 2022

29,072,696 shares

As of March 31, 2021

28,976,700 shares(ii) Number of treasury shares at the end of the period
As of March 31, 2022

637,366 shares

As of March 31, 2021

428,366 shares(iii) Average number of shares outstanding during the period (cumulative from the beginning of the fiscal year)
Fiscal year ended March 31, 2022

28,536,540 sharesFiscal year ended March 31, 2021

28,505,330 shares(Note) 613,300 shares of the Company (6,133 voting rights) owned by Custody Bank of Japan, Ltd. (hereinafter referred
to as “ESOP Trust Unit”) are included in the number of treasury stock at the end of the above period.

(Reference) Overview of non-consolidated financial results
1. Non-consolidated financial results for the fiscal year ended March 31, 2022 (from April 1, 2021 to March 31, 2022)(1) Non-consolidated operating results (Percentages indicate year-on-year changes.)
Net income

Operating income

Ordinary income

Net income

Fiscal year ended

million yen%

million yen%

million yen%

million yen%

March 31, 2022

8,815

-10.9

1,068

-26.1

1,226

-14.7

678

-47.1

March 31, 2021

9,890

-1.1

1,444

211.9

1,438

256.5

1,283

85.5

Basic earnings
per share

Diluted earnings
per share

Fiscal year ended

Yen

Yen

March 31, 2022

23.79

23.77

March 31, 2021

45.04

44.92

(2) Non-consolidated financial position
Total assets
As ofMarch 31, 2022
March 31, 2021
Reference: Equity

Net assets

Equity-to-asset ratio

Net assets per share

Millions of yen

Millions of yen

%

Yen

8,916

4,058

45.0

141.01

8,898

3,468

38.3

119.43As of March 31, 2022: ¥4,009 million
As of March 31, 2021: ¥3,409 million*Quarterly financial statements are not subject to quarterly review by a certified public accountant or auditing firm.
*Proper use of earnings forecasts, and other special matters(Notes on future descriptions)
The forecasts above are based on information currently available and certain assumptions deemed reasonable by theCompany as of the date of release of this document. Actual future results may differ from forecasts figures due to various
factors(How to obtain supplementary explanatory materials for financial results)
The Company is scheduled to hold a briefing for financial results targeting institutional investors and analysts on May 12,2022. The financial results presentation materials to be distributed at this briefing will be posted on the Company's website
immediately after the briefing.
(Publication of 'Business Plan and Growth Potential Matters')
The Business Plan and Growth Potential Matters is scheduled to be published in June 2022.

Drecom Co., Ltd. (3793) Consolidated Financial Results for the Fiscal Year Ended March 31, 2022
(Under Japanese GAAP)

Table of Contents
1. Overview of Business Results, etc. ········································································································ 2(1) Summary of Operating Results for the Current Period ...................................................................................... 2(2) Summary of Financial Position for the Current Period....................................................................................... 2(3) Summary of cash flows for the period .............................................................................................................. 3(4) Future outlook ................................................................................................................................................. 3
2. Basic approach to the selection of accounting standards ············································································ 4
3. Consolidated Financial Statements and Key Notes ··················································································· 5(1) Consolidated Balance Sheet ............................................................................................................................ 5(2) Consolidated Statements of Income and Consolidated Comprehensive Income Statements ............................. 7
Consolidated Statement of Income................................................................................................................. 7
Consolidated statements of comprehensive income ....................................................................................... 8(3) Consolidated Statement of Changes in Net Assets ........................................................................................... 9(4) Consolidated Statements of Cash Flows ........................................................................................................ 11(5) Notes to Consolidated Financial Statements .................................................................................................. 13(Notes on premise of a going concern) ......................................................................................................... 13(Change in accounting policy) ...................................................................................................................... 13(Information by Segment, etc.) ..................................................................................................................... 14(Per share data) ........................................................................................................................................... 17(Significant Subsequent Events)................................................................................................................... 18
4. Other ·············································································································································· 18

1Drecom Co., Ltd. (3793) Consolidated Financial Results for the Fiscal Year Ended March 31, 2022
(Under Japanese GAAP)

1. Overview of Business Results, etc.
(1) Summary of Operating Results for the Current Period
The Group's raison d'etre is "with entertainment" and our goal is to continue to create services that exceed people's
expectations. We also strive to create unprecedented value and deliver experiences that captivate users. In the medium
term, we aim to become a comprehensive entertainment company that provides a wide variety of digital entertainment
content globally, centered on our IP, and to achieve sustainable growth and increase our corporate value.
In the mainstay game business, our main business is the development and operation of games, and we develop andoperate third-party IP games, game platforms, and original games. In the media business, we are engaged in businessdevelopment with the aim of creating the next generation of core businesses. We have launched new services on a trial
basis, utilizing our knowledge of Internet services, and are conducting a series of trials for their commercialization.
In the current consolidated fiscal year, net sales amounted to 10,528,500 thousand yen (down 11.1% from the previousyear), operating income was 1,591,111 thousand yen (down 22.5% from the previous year), and ordinary income was
1,541,772 thousand yen (down 23.6% from the previous year). In addition, an extraordinary loss of 381,399 thousand
yen was incurred due to impairment losses on two titles released during the period, resulting in net income attributableto owners of the parent of 807,301 thousand yen (down 50.3% from the previous period).
The results for each segment are as follows.

Game Business
During the period under review, one of our mainstay titles, a third-party IP game title that marked its 7th anniversary,
performed well throughout the year and contributed to earnings. In addition to the release of three new titles, theCompany made efforts to close unprofitable titles and streamline operating costs in order to improve profitability.
As for net sales, titles in operation maintained steady growth despite the tough competition from competing titles. In
addition, the contribution from new titles released during the period was insufficient to offset the impact of the closure ofseveral titles, resulting in a year-on-year decrease in net sales.
Although there was an improvement in profits due to the closing of unprofitable titles, profits decreased from theprevious fiscal year due to an increase in advertising and operation expenses associated with the release of new titles.
As a result, segment sales amounted to 10,358,674 thousand yen (down 11.9% from the previous year), and segment
profit amounted to 1,871,529 thousand yen (down 22.6% from the previous year). In this segment, our core business,
we will continue to strive to maintain stable earnings from titles in operation and aim to increase sales and profits throughthe success of several new titles under development.

Media Business
During the period under review, "Rooot," a Twitter-based fan community promotion service, steadily expanded its
business scale and contributed to earnings. In addition, with the aim of strengthening our IP production capabilities, welaunched new businesses in the non-game entertainment domain, namely the publishing/video business and the Web3
business, in order to focus on IP development, acquisition, nurturing, and diversification of monetization channels.
Net sales increased from the previous fiscal year as "Rooot" steadily expanded its services.
Regarding profit, although the company continues to incur expenses in advance due to aggressive investment in new
business areas, which it sees as a great opportunity to expand its business performance, the amount of loss decreased
from the previous fiscal year due to the effect of increased sales.
As a result, segment sales amounted to 169,825 thousand yen (up 99.7% from the previous year) and segment loss
amounted to 280,418 thousand yen (segment loss of 364,451 thousand yen in the previous year). In this segment, we
will continue to promote aggressive R&D investment with the aim of achieving medium to long-term business growth.
Looking ahead, we will work to further improve profitability in our mainstay game business and aim to grow sales
through the release of new titles. In addition, we will aggressively invest in business development in entertainment areas
other than games, aiming to grow into a comprehensive entertainment company centered on IP.

(2) Summary of Financial Position for the Current Period
Assets, Liabilities and Net Assets(Assets)
Current assets at the end of the current consolidated fiscal year were 6,766,009 thousand yen, a decrease of 903,136
2Drecom Co., Ltd. (3793) Consolidated Financial Results for the Fiscal Year Ended March 31, 2022
(Under Japanese GAAP)

thousand yen from the end of the previous consolidated fiscal year. This was mainly due to a decrease of 550,907
thousand yen in cash and deposits and a decrease of 356,622 thousand yen in accounts receivable-trade. Noncurrent
assets totaled 2,887,461 thousand yen, an increase of 946,184 thousand yen from the end of the previous fiscal year.
This was mainly due to an increase of 862,307 thousand yen in software in progress. As a result, total assets amounted
to 9,653,470 thousand yen.

(Liabilities)
Total liabilities at the end of the current consolidated fiscal year amounted to 5,079,395 thousand yen, a decrease of675,711 thousand yen from the end of the previous consolidated fiscal year. This was mainly due to a decrease of
256,376 thousand yen in income taxes payable and a decrease of 202,000 thousand yen in bank loans payable.

(Net assets)
Total net assets at the end of the current consolidated fiscal year amounted to 4,574,075 thousand yen, an increaseof 718,758 thousand yen from the end of the previous consolidated fiscal year. This was mainly due to the recording of
807,301 thousand yen in net income attributable to parent company shareholders.
As a result, the equity ratio was 46.9% (39.5% at the end of the previous fiscal year).

(3) Summary of cash flows for the period
Cash and cash equivalents ("cash") at the end of the current consolidated fiscal year decreased by 550,907 thousand
yen from the end of the previous consolidated fiscal year to 4,732,985 thousand yen. The status of each cash flow andtheir factors during the current consolidated fiscal year are as follows.

(Cash flow/Net cash used from operating activities)
Cash provided by operating activities amounted to 1,602,824 thousand yen. The main factors leading to increase in
cash were income before income taxes and minority interests of 1,164,568 thousand yen, depreciation and amortizationof 536,543 thousand yen, impairment loss of 285,108 thousand yen, and a decrease in trade receivables of 356,622
thousand yen, while the main cash factors for the decrease were a decline in accrued consumption taxes of 163,115
thousand yen, an increase in consumption taxes receivable of 151,174 thousand yen, and income taxes paid of 635,967
thousand yen.

(Cash flow/net cash used from investing activities)
Net cash used in investing activities was 1,765,956 thousand yen. The main factor was 1,704,144 thousand yen
used for the purchase of intangible fixed assets.

(Cash flow/net cash used from financing activities)
Net cash used in financing activities was 387,775 thousand yen. The main cash inflow was 449,000 thousand yen
in proceeds from long-term loans payable, while the main cash outflows were 697,000 thousand yen for repayment oflong-term loans payable and 149,948 thousand yen for purchase of treasury stock.

(4) Future outlook
For the fiscal year ending March 31, 2023 and beyond, we will work to further improve profitability in our mainstay
game business and aim to grow sales through the release of new titles.
In addition, by aggressively investing and focusing on business development in entertainment areas other than games,
we aim to become a comprehensive entertainment company that provides a diverse range of digital entertainment
content globally, with IP at its core.
In the fiscal year ending March 31, 2023, we aim to expand earnings by contribution from existing titles in operation in
the game business and by steadily releasing three new titles in the second half of the year.
As for new businesses, we will continue to aim for business expansion of "Rooot," a fan community promotion service.
In addition, we will continue to invest aggressively in IP creation in the publishing and video businesses and in R&D in
the Web3 business.
3

Drecom Co., Ltd. (3793) Consolidated Financial Results for the Fiscal Year Ended March 31, 2022
(Under Japanese GAAP)

Based on the above, for the fiscal year ending March 31, 2023, we expect consolidated net sales of 13,000,000
thousand yen, operating income of 2,000,000 thousand yen, ordinary income of 1,900,000 thousand yen, and net income
attributable to owners of the parent of 1,200,000 thousand yen.

2. Basic approach to the selection of accounting standards
Most of the Group's stakeholders are domestic shareholders, creditors and business partners, and in order to ensurecomparability with other domestic companies in the same industry, Japanese GAAP is applied to accounting standards.

4

Drecom Co., Ltd. (3793) Consolidated Financial Results for the Fiscal Year Ended March 31, 2022
(Under Japanese GAAP)

3. Consolidated Financial Statements and Key Notes(1) Consolidated Balance Sheet(Unit: thousand yen)Previous consolidated fiscal year
(March 31, 2021)

Current consolidated fiscal year
(March 31, 2022)

ASSETS
Current assets
Cash and deposits

5,288,132

4,737,225

Accounts receivable

1,841,939

1,485,317

Work in progress

7,077

10,144

Prepaid expenses

174,067

157,555

Other

357,928

375,766

Total current assets

7,669,146

6,766,009

Fixed assets
Tangible Fixed Assets
Buildings
Accumulated depreciation
Buildings (net)
Tools, furniture & fixtures

259,203184,236-173,499-13,60385,704

170,632

82,817

69,030

Accumulated depreciation-67,283-33,995

Tools, furniture & fixtures (net)15,53435,03461,853

7,232

Accumulated depreciation-48,190-2,007

Lease assets (net)

13,663

5,225

Total tangible fixed assets

114,901

210,891

Software407,586

557,325

Software suspense account471,118

1,333,425

Total intangible assets

878,704

1,890,751

Lease assets

Intangible assets

Investments and other assets
Investment securities

7

7

Deferred tax assets

434,953465,737

Deposit318,138

199,404

Other

194,571

120,668

Other investments and other assets

947,671785,818

1,941,277

2,887,461

9,610,423

9,653,470

Total fixed assets
Total assets

5Drecom Co., Ltd. (3793) Consolidated Financial Results for the Fiscal Year Ended March 31, 2022
(Under Japanese GAAP)(Unit: thousand yen)Previous consolidated fiscal year
(March 31, 2021)

Current consolidated fiscal year
(March 31, 2022)

LIABILITIESCurrent liabilities
Accounts payable

363,542

357,864

Short-term debit
Long-term debt due within one year

100,000
640,000

146,000
808,000

Lease obligations
Accounts payable

14,773
660,6101,281
579,036

Income taxes payable
Bonus payment reserve398,455
174,055

142,079
138,497

Asset retirement obligations
Other

150,414680,033－
537,158

Total current liabilities

3,181,884

2,709,917

Long-term debt
Lease obligations

2,430,000
6,387

2,014,000
4,806

Asset retirement obligation
Other

34,060102,774

100,000
250,671

Total fixed liabilities

2,573,222

2,369,478

5,755,106

5,079,395

CapitalCapital surplus

1,761,208
2,017,979

1,792,991
2,050,152

Retained earnings
Treasury stock

146,380-131,058

953,681-274,029

Total shareholders' equity

3,794,509

4,522,796

-92

7

-92

7

58,65149,067

Fixed liabilities

Total liabilities
Net assets
Shareholders' equity

Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Total accumulated other comprehensive
incomeStock acquisition rights
Non-controlling interests
Total net assets
Total liabilities and net assets

6

2,247

2,203

3,855,316

4,574,075

9,610,423

9,653,470

Drecom Co., Ltd. (3793) Consolidated Financial Results for the Fiscal Year Ended March 31, 2022
(Under Japanese GAAP)(2) Consolidated Statements of Income and Consolidated Comprehensive Income Statements
Consolidated Statement of Income(Unit: Thousand yen)Previous consolidated fiscal year
(April 1, 2020 to March31, 2021)

Current consolidated fiscal year
(April 1, 2021 to March 31, 2022)

Sales
Cost of sales

11,840,739
7,843,744

10,528,500
6,731,898

Gross profit

3,996,994

3,796,602

Selling, general and administrative expenses
Salary supplement
Provision for bonuses

403,251
147,814463,599
107,764

Commission fee
Advertising expenses

103,697
71,055

113,793
243,741

R&D expenses
Other

366,142852,167

345,240
931,352

1,944,128

2,205,491

2,052,865

1,591,111

31

52

8,072
16,986

－
609

Other

10,360
2,262

－
359

Total non-operating income

37,712

1,020

Interest expense
Commission payable

30,295
24,15544,747
1,249Interest on bonds
Foreign exchange loss

259
16,484

－
4,080

153

281

Total selling, general and administrative
expenses
Operating income
Non-operating revenue
Interest received
Dividends received
Gain on investment in capital
Subsidy income

Non-operating expenses

Other
Total non-operating expenses
Ordinary income
Extraordinary profits
Gain on reversal of subscription rights tosharesTotal extraordinary income
Extraordinary loss
Loss on valuation of investment securities
Impairment loss

71,34750,3592,019,231

1,541,772

－

4,195

－

4,195

－

96,290－285,108

Total extraordinary loss
Net income before income taxes and minority
interests
Corporate, inhabitant and enterprise taxes－

381,399

2,019,231

1,164,568

514,034

386,520

Income tax adjustments-121,229-30,828

Total income taxes

392,804

355,692

Net income

1,626,426

808,876

Net income attributable to noncontrolling interests
Net income attributable to owners of the parent

7

1,743

1,574

1,624,683

807,301

Drecom Co., Ltd. (3793) Consolidated Financial Results for the Fiscal Year Ended March 31, 2022
(Under Japanese GAAP)

Consolidated statements of comprehensive income(Unit: Thousand yen)Previous consolidated fiscal year
(April 1, 2020 to March31, 2021)

Net income or loss
Other comprehensive income
Other securities valuation difference
Total other comprehensive income
Comprehensive income(Breakdown)Comprehensive income for ownersof parent
Comprehensive income fornon-controlling shareholders

8

Current consolidated fiscal year
(April 1, 2021 to March 31, 2022)

1,626,426

808,876

-40

100

-40

100

1,626,385

808,976

1,624,642

807,401

1,743

1,574

Drecom Co., Ltd. (3793) Consolidated Financial Results for the Fiscal Year Ended March 31, 2022
(Under Japanese GAAP)(3) Consolidated Statement of Changes in Net Assets
Previous fiscal year (April 1, 2020 to March 31, 2021)(Unit: Thousand yen)
Capital stock
CapitalBalance at the beginning ofcurrent period

Capital surplus

1,735,288

1,991,623

25,92025,920Retained earnings-1,478,302

Treasury stock-136,203

Total shareholders'equity2,112,405

Changes of items during theperiodIssuance of new shares
Net income attributable toowners of the parent

51,8401,624,683

435

Disposal of treasury stock

1,624,683
5,144

5,580

Net changes of items otherthan shareholders' equity
Total changes of items during theperiodBalance at the end of current
period25,92026,355

1,624,683

5,144

1,682,103

1,761,208

2,017,979

146,380-131,058

3,794,509

Non-controllinginterests

Total net assets

2,436

2,168,542

Accumulated other comprehensive
incomeUnrealised gains
Accumulated other(losses) oncomprehensive
available-for-saleincome Total
securities
Balance at the beginning ofcurrent period

-51

-51

Share warrant

53,752

Changes of items during theperiodIssuance of new shares

51,840Net income attributable toowners of the parent

1,624,683

Disposal of treasury stock

5,580

Net changes of items otherthan shareholders' equity

-40

-40

4,899

-189

4,669

Total changes of items during theperiod

-40

-40

4,899

-189

1,686,773

Balance at the end of current
period-92-92

58,651

2,247

3,855,316

9

Drecom Co., Ltd. (3793) Consolidated Financial Results for the Fiscal Year Ended March 31, 2022
(Under Japanese GAAP)

Current consolidated fiscal year (April 1, 2021 to March 31, 2022)(Unit: Thousand yen)

Capital stock
CapitalBalance at the beginning ofcurrent period

Capital surplus

Retained earnings

1,761,208

2,017,979

31,78331,783

146,380

treasury stock-131,058

Total shareholders'equity3,794,509

Changes of items during theperiodIssuance of new shares
Net income attributable toowners of the parent

63,566807,301

Acquisition of treasury stock

389

Disposal of treasury stock

807,301-149,948-149,948

6,977

7,366

Net changes of items otherthan shareholders' equity
Total changes of items during theperiodBalance at the end of current
period31,78332,172807,301-142,970

728,287

1,792,991

2,050,152

953,681-274,029

4,522,796

Non-controllinginterests

Total net assets

2,247

3,855,316

Accumulated other comprehensive
incomeBalance at the beginning ofcurrent period

Unrealized gains(losses) on
available-for-salesecurities

Accumulated othercomprehensive
income Total

-92

-92

Share warrant

58,651

Changes of items during theperiodIssuance of new shares

63,566

Net income attributable toowners of the parent

807,301

Acquisition of treasury stock-149,948

Disposal of treasury stock

7,366

Net changes of items otherthan shareholders' equity

100

100

-9,584-43-9,528

Total changes of items during theperiod100

100-9,584-43718,7587

7

49,0672,203

4,574,075

Balance at the end of current
period10

Drecom Co., Ltd. (3793) Consolidated Financial Results for the Fiscal Year Ended March 31, 2022
(Under Japanese GAAP)(4) Consolidated Statements of Cash Flows(Unit: Thousand yen)Previous consolidated fiscal year
(April 1, 2020 to March31, 2021)

Cash flows from operating activities
Income before income taxes and minority
interests
Depreciation and amortization
Amortization of goodwill
Impairment loss

2,019,231

1,164,568

626,679

536,543

25,461

285,108－
41,266

Stock compensation expense
Interest and dividend income
Loss (gain) on valuation of investment
securities
Commission fee
Interest expense
Interest on corporate bonds
Decrease (increase) in trade receivables
Decrease (increase) in inventories(Increase) decrease in consumption taxes
receivable
Decrease (increase) in prepaid expenses
Increase (decrease) in accounts payable
Increase (decrease) in accounts payable-other
Increase (decrease) in accrued consumption
taxes(Increase) decrease in consumption taxes
receivable
Decrease (increase) in prepaid expenses
Other
SubtotalInterest and distributions received
Interest expenses paid
Income taxes paid
Income taxes refunded
Cash flows from operating activities
Cash flows from investing activities
Payments for purchase of property, plant andequipment
Payments for acquisition of intangible fixed
assetsPayments for purchase of investment
securities
Purchase of investments in subsidiaries
resulting in change in scope of consolidation
Proceeds from collection of lease andguarantee deposits
Payment for lease and guarantee deposits
Proceeds from transfer of business
Other
Cash flows from investing activities
Cash flows from financing activities
Net increase (decrease) in short-term loans
Proceeds from long-term loans payable
11

Current consolidated fiscal year
(April 1, 2021 to March 31, 2022)

41,720-8,103-52－

96,29024,15530,29544,747259-109,752

356,622-7,136-2,809－-151,174

202,024-18,678-61,589
84,377-5,67842,453

150,506-163,115

136,190-136,190

103,296
146,124740
182,111

3,403,286

2,273,207

9,597

973

-34,594-181,823
0-43,956-635,967
8,567

3,196,465

1,602,824-11,742-70,500-536,254-1,704,144－-96,290-326,000-129,813－

177,310-215,704－-4,01094,779-50,469-33,287-1,140,170-1,765,956-1,080,000
3,125,845

46,000449,000

Drecom Co., Ltd. (3793) Consolidated Financial Results for the Fiscal Year Ended March 31, 2022
(Under Japanese GAAP)(Unit: Thousand yen)Previous consolidated fiscal year
(April 1, 2020 to March31, 2021)

Current consolidated fiscal year
(April 1, 2021 to March 31, 2022)

Repayment of long-term loans payable
Payments for redemption of bonds-1,011,663-45,000-697,000-

Payments for purchase of treasury stock
Other
Net cash provided by (used in) financing
activities
Net increase (decrease) in cash and cash
equivalents
Cash and cash equivalents at beginning of
periodCash and cash equivalents at end of year－
-20,291-149,948-35,827

968,890-387,775

3,025,185-550,907

2,258,707

5,283,892

5,283,892

4,732,985

12

Drecom Co., Ltd. (3793) Consolidated Financial Results for the Fiscal Year Ended March 31, 2022
(Under Japanese GAAP)(5) Notes to Consolidated Financial Statements(Notes on premise of a going concern)
Nothing applicable.
(Change in accounting policy)(Application of Accounting Standard for Revenue Recognition, etc.)
The "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020. ("AccountingStandard for Revenue Recognition"). and others are applied from the beginning of the current fiscal year, andrevenue is recognized at the amount expected to be received in exchange for the promised goods or services whencontrol of the promised goods or services is transferred to the customer. As a result, the Company changed its
accounting method for billing revenues from users from recognizing sales at the time in-game currency is consumed
to recognizing sales based on the nature of the items provided. The items that the Group provides to users are
generally consumable items (items that are consumed by certain actions of the user and do not bring continuous
benefits to the user). The Group recognizes sales at the time the items are sold because the period between
purchase and consumption of the items is extremely short.
The application of the revenue recognition accounting standard, etc., in accordance with the transitional treatment
stipulated in the provison of paragraph 84 of the revenue recognition accounting standard, etc., has no effect onretained earnings and profit and loss at the beginning of the current fiscal year.
(Application of Accounting Standard for Measurement of Fair Value, etc.)
The "Accounting Standard for Calculation of Fair Value" (ASBJ Statement No. 30, July 4, 2019. ("AccountingStandard for Fair Value Calculation"). The new accounting policy stipulated in the "Accounting Standard for Fair
Value Calculation" (ASBJ Statement No. 30, July 4, 2019) is applied from the beginning of the current fiscal year,
and the transitional treatment stipulated in Paragraph 19 of the "Accounting Standard for Fair Value Calculation"
and Paragraph 44-2 of the "Accounting Standard for Financial Instruments" (ASBJ Statement No. 10, July 4, 2019)
is followed. The Company has decided to apply the new accounting policies prescribed by the Accounting Standard
for Fair Value Calculation and others prospectively in accordance with the treatment. There is no impact from thischange.

13

Drecom Co., Ltd. (3793) Consolidated Financial Results for the Fiscal Year Ended March 31, 2022
(Under Japanese GAAP)(Information by Segment, etc.)【Segment Information】
1. Overview of reportable segments
The Group's reportable segments are components of the Company for which separate financial information is available
and which are subject to periodic review by the Board of Directors for the purpose of determining the allocation ofmanagement resources and evaluating performance.
Therefore, the Company is composed of segments by service and has two reportable segments: "Game Business" and"Media Business.”
In the Game Business, we plan, develop, and operate social games that are played mainly on smartphones. In the MediaBusiness, we are working to create new businesses that will drive our medium and long-term growth by applying the knowhow we have accumulated in the past and the cutting-edge technologies we possess.
2. Calculation of net sales, profit or loss, assets, liabilities and other items by reportable segment
Profit by reportable segment is based on operating income.
Intersegment transactions and transfers are based on prevailing market prices.
3. Information on net sales, income or loss, assets, liabilities and other items by reportable segment
Previous fiscal year (April 1, 2020 to March 31, 2021)

Reporting Segment
Gamebusiness

Adjustment*1

Media
Business

Total(Unit: Thousand yen)Amount recordedin consolidated
financialstatements*2

Sales
11,756,206

84,533

11,840,739－

11,840,739

－

496

496

-496

－

11,756,206

85,03011,841,236-496

11,840,739

Segment profit or loss

2,417,814-364,451

2,053,362-496

2,052,865

Segment assets

3,816,128

71,2083,887,336

5,723,086

9,610,423

Depreciation and amortization

614,987

11,691

626,679－

626,679

Amortization of goodwill

25,461－

25,461－

25,461

Increase in Tangible Fixed
Assets and Intangible Assets

568,136504

568,641－

568,641

Sales to external customers
Intersegment sales andtransfers
Total

Other Items

Note: *1. Adjustments to segment assets mainly consist of cash and deposits and deferred tax assets that do not belong to the reportablesegments.
*2. Segment income (loss) is consistent with operating income in the consolidated statements of income.

14

Drecom Co., Ltd. (3793) Consolidated Financial Results for the Fiscal Year Ended March 31, 2022
(Under Japanese GAAP)

Current Consolidated Fiscal Year (April 1, 2021 to March 31, 2022)

Reporting Segment
Gamebusiness

Adjustment*1

Media
Business

Total(Unit: Thousand yen)Amount recordedin consolidated
financialstatements*2

Sales
10,358,674

169,825

10,528,500－

10,528,500

－

－

－

－

-

10,358,674

169,825

10,528,500－

10,528,500

Segment profit or loss

1,871,529-280,418

1,591,111－

1,591,111

Segment assets

4,354,514

95,9934,450,508

5,202,962

9,653,470

Depreciation and amortization

531,396

5,146

536,543－536,543

Amortization of goodwill

280,012

5,096

285,108－

285,108

Increase in Tangible Fixed
Assets and Intangible Assets

1,863,670

23,902

1,887,573－

1,887,573

Sales to external customers
Intersegment sales andtransfers
Total

Other Items

Note: *1: Adjustments to segment assets mainly consist of cash and deposits and deferred tax assets that do not belong to the reportablesegments.
*2: Segment income (loss) is consistent with operating income in the consolidated statements of income.

【Related Information】
Previous fiscal year (April 1, 2020 to March 31, 2021)
1. Information by product and service
This information is omitted because the same information is disclosed in the segment information.
2. information by region(1) Net sales

This information is omitted because sales to external customers in Japan account for more than 90% of the net sales
in the consolidated statements of income.
(2) Tangible fixed assets

The amount of property, plant and equipment located in Japan exceeds 90% of the amount of property, plant andequipment on the consolidated balance sheet, so this information is omitted.
3. Information by major customer(Unit: Thousand yen)

Name or title of customer

Net sales

Related Segment Name

Bandai Namco Entertainment Inc.

3,624,547

Game Business

Bandai Namco Nexus Inc.

2,639,924

Game BusinessApple Inc.

1,950,152

Game Business

15

Drecom Co., Ltd. (3793) Consolidated Financial Results for the Fiscal Year Ended March 31, 2022
(Under Japanese GAAP)

Current Consolidated Fiscal Year (April 1, 2021 to March 31, 2022)
1. Information by product and service
This information is omitted because the same information is disclosed in the segment information.
2. information by region(1) Net sales
This information is omitted because sales to external customers in Japan account for more than 90% of the net
sales in the consolidated statements of income.
(2) Tangible fixed assets
The amount of property, plant and equipment located in Japan exceeds 90% of the amount of property, plant andequipment on the consolidated balance sheet, so this information is omitted.

3. Information by major customer(Unit: Thousand yen)

Name or title of customer

Net sales

Related Segment Name

Bandai Namco Entertainment Inc.

3,409,932

Game Business,
Media Business

Bandai Namco Nexus Inc.

2,048,344

Game BusinessApple Inc.

1,628,897

Game Business【Information on Impairment Losses on Fixed Assets by reportable segment】
Previous Consolidated Fiscal Year (April 1, 2020 to March 31, 2021)
Not applicable
Current Consolidated Fiscal Year (April 1, 2021 to March 31, 2022)
Game BusinessImpairment loss

Media Business

280,012(Unit: Thousand yen)

Corporate andelimination

5,096

Total
-

285,108【Information on amortization and unamortized balance of goodwill by reportable segment】
Previous Consolidated Fiscal Year (April 1, 2020 to March 31, 2021)
Game Business(Unit: Thousand yen)

Corporate andelimination

Media Business

Total

Reimbursement of
the period

25,461--

25,461

Residual high at theend of the period

-

-

-

-

Current Consolidated Fiscal Year (April 1, 2021 to March 31, 2022)
Not applicable【Information on gain on negative goodwill by reportable segment】
Not applicable16Drecom Co., Ltd. (3793) Consolidated Financial Results for the Fiscal Year Ended March 31, 2022
(Under Japanese GAAP)(Per share data)
Previous consolidated fiscal year
(From April 1, 2020 toMarch 31, 2021)

Current consolidated fiscal year
(From April 1, 2021 toMarch 31, 2022)

Net assets per share

132.91 yen

159.06 yen

Net income per share

57.00 yen

28.29 yen

Diluted net income per share

56.85 yen

28.26 yen

Note: 1. Basis for calculation of net income per share and diluted net income per share is as follows.
Previous consolidated fiscal year
(From April 1, 2020 toMarch 31, 2021)

Current consolidated fiscal year
(From April 1, 2021 toMarch 31, 2022)

1,624,683

807,301－－

Net income attributable to parent company
shareholders related to common stock(thousand yen)

1,624,683

807,301

Average number of shares of common stockduring the period (shares)

28,505,330

28,536,540－－

72,03426,652(72,034)(26,652)

Net income per share
Net income attributable to owners of the parent(thousand yen)Amount not attributable to common shareholders(thousand yen)

Diluted net income per share
Adjustment of net income attributable to ownersof the parent (thousands of yen)
Increase in common stock (shares)(of which stock acquisition rights (shares))
Summary of potential stock not included in thecalculation of diluted net income per share due tothe absence of dilutive effects－－

Previous consolidated fiscal year
(March 31, 2021)

Current Consolidated Fiscal Year
(March 31, 2022)

Total net assets (Thousands of yen)

3,855,316

4,574,075

Amount deducted from total net assets(thousand yen)

60,89851,270(of which stock acquisition rights (thousandyen))(58,651)(49,067)(of which, noncontrolling interests (thousandyen))(2,247)(2,203)

Net assets related to common stock at the end of
the period (thousand yen)

3,794,417

4,522,804

Number of shares of common stock used in thecalculation of net assets per share at the end of
the fiscal year (shares)

28,548,334

28,435,330

2.

Basis for calculation of net assets per share is as follows

17

Drecom Co., Ltd. (3793) Consolidated Financial Results for the Fiscal Year Ended March 31, 2022
(Under Japanese GAAP)

3.

The number of the Company's shares held by the ESOP Trust Account, which are recorded as treasury stock inshareholders' equity, are included in treasury stock, which is deducted from the average number of shares
outstanding during the period for the calculation of net income per share (407,300 shares in the previous
consolidated fiscal year and 613,300 shares in the current consolidated fiscal year). The number of treasury stockis included in the number of shares deducted from the total number of shares issued and outstanding at the endof the period for the calculation of net assets per share (407,300 shares in the previous consolidated fiscal year
and 613,300 shares in the current consolidated fiscal year).
(Significant Subsequent Events)
Not applicable

4. Other
Not applicable18