Consolidated Financial Results for the Fiscal Year Ended March 31, 2023

(Under Japanese GAAP)May 11, 2023
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 28, 2023
Scheduled date to file annual securities report: June 28, 2023
Scheduled start date to commence dividend payments: June 14, 2023
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, 2023 (From April 1, 2022 to March 31, 2023)(1) Consolidated operating results(% is Year-on-year rate of increase / decrease)

Net sales

Operating income

Fiscal year ended%

March 31, 2023
March 31, 2022
Note: Comprehensive income

Net income attributableto owners of parent

Ordinary income%%%

10,800

2.6

2,281

43.4

2,192

42.2

1,159

43.6

10,528

-11.1

1,591

-22.5

1,541

-23.6

807

-50.3

For the fiscal year ended March 31, 2023 ¥1,159 million yen (43.3%)
For the fiscal year ended March 31, 2022 ¥808 million yen (-50.3%)

Net income
per share

Diluted earnings
per share

Return on equity

Fiscal year ended

Yen

Yen

%

March 31, 2023

40.70

40.62

March 31, 2022

28.29

28.26

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

%

22.9

20.0

21.1

19.4

16.0

15.1

Reference: Share of profit (loss) of entities accounted for using equity method
For the fiscal year ended March 31, 2023 ¥ - million
For the fiscal year ended March 31, 2022 ¥ - million(2) Consolidated financial position
Total Assets
As ofEquity-to-asset ratio

Net assets per share

million yen

million yen%

Yen

12,226

5,631

45.6

195.70

4,574

46.9

159.06

March 31, 2023

9,653

March 31, 2022
Reference: Equity capital

Net Assets

As of March 31, 2023
As of March 31, 2022

¥5,579 million¥4,522 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, 2023

2,665

-2,017658

6,040

March 31, 2022

1,602

-1,765

-387

4,732

2. Cash dividends
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, 2022

－

0.00

－

5.00

5.00

145

17.7

3.4

March 31, 2023
March 31, 2024 (Forecast)

－
－

0.00
0.00

－
－

5.00
5.00

5.00
5.00

145

12.3
13.0

2.8

3. Forecast of consolidated financial results for the fiscal year ending March 31, 2024
(April 1, 2023 – March 31, 2024)(% increase or decrease from the same period of previous year)

Net sales

Operating income

Ordinary income

Profit attributable toEarnings per shareowners of parent

Fiscal year ending

million yen%

million yen%

million yen%

million yen%

yen

March 31, 2024

15,000

38.9

2,000

-12.3

1,900

-13.3

1,100

-5.1

38.59

* 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 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, 2023

29,129,591 shares

As of March 31, 2022

29,072,696 shares(ii) Number of treasury shares at the end of the period
As of March 31, 2023

621,595 shares

As of March 31, 2022

637,366 shares(iii) Average number of shares outstanding during the period (cumulative from the beginning of the fiscal year)
Fiscal year ended March 31, 2023

28,482,068 sharesFiscal year ended March 31, 2022

28,536,540 shares(Note) 595,800 shares of the Company (5,958 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, 2023 (from April 1, 2022 to March 31, 2023)(1) Non-consolidated operating results (Percentages indicate year-on-year changes.)
Net sales

Operating income

Ordinary income

Net income

Fiscal year ended

million yen%

million yen%

million yen%

million yen%

March 31, 2023

9,005

2.2

1,389

30.1

1,540

25.5

744

9.7

March 31, 2022

8,815

-10.9

1,068

-26.1

1,226

-14.7

678

-47.1

Basic earnings
per share

Diluted earnings
per share

Fiscal year ended

Yen

Yen

March 31, 2023

26.14

26.09

March 31, 2022

23.79

23.77

(2) Non-consolidated financial position
Total assets
As ofMarch 31, 2023
March 31, 2022
Reference: Equity

Net assets

Equity-to-asset ratio%

Net assets per share

Millions of yen

Millions of yen

Yen

11,048

4,700

42.1

163.15

8,916

4,058

45.0

141.01

As of March 31, 2023: ¥4,651 million
As of March 31, 2022: ¥4,009 million*Financial statements are not subject to 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 11,2023. 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 2023.

Drecom Co., Ltd. (3793) Consolidated Financial Results for the Fiscal Year Ended March 31, 2023
(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 ......................................................................................................................... 3(3) Summary of cash flows .................................................................................................................................... 3(4) Future outlook ................................................................................................................................................. 3
2. Basic approach to the selection of accounting standards ············································································ 4
3. Consolidated 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, 2023
(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 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 game development and operation, and we develop and operate
third-party IP games, game platforms, and original games. In the media business, we publish and sell books and ebooks, including novels and comics, for the purpose of acquiring, developing, and nurturing IP. In addition, we havelaunched new services on a trial basis, utilizing our knowledge of Internet services and advanced technologies, and are
conducting trials for commercialization.
In the current consolidated fiscal year, net sales were 10,800,257 thousand yen (up 2.6% from the previous year),
operating income was 2,281,354 thousand yen (up 43,4% from the previous year), and ordinary income was 2,192,519
thousand yen (up 42.2% from the previous year), with operating income and ordinary income reaching record highs. An
extraordinary loss of 386,259 thousand yen was incurred due to impairment losses on titles under operation, resulting in
net income attributable to shareholders of the parent company of 1,159,125 thousand yen (up 43.6% from the previousyear).
The results for each segment are as follows

Game business
During the fiscal year under review, mainstay IP titles performed well throughout the year and contributed to earnings.
Net sales increased from the previous fiscal year, mainly due to the full-year contribution of titles released in the second
half of the previous fiscal year, in addition to the continued strong performance of our mainstay IP titles.
Net income increased from the previous fiscal year due to the impact of increased revenues from titles under operation,
as well as streamlining of the operation structure and the closure of some unprofitable titles.
As a result, segment sales amounted to 10,517,071 thousand yen (up 1.5% from the previous year) and segment
income amounted to 2,903,312 thousand yen (up 55.1% from the previous year). In this segment, our core business, wewill 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, continued to contribute toearnings. In addition, while working on the publishing and video business to develop, acquire, and nurture IP and diversify
revenue-generating channels, we started publishing a light novel label, "DRE Novels," in October. In addition, we arefocusing on new business development in the Web3 domain.
Net sales increased year-on-year due to the strong performance of "Rooot," a Twitter-based fan community promotion
service, as well as the start of publication of light novels.
As for net income, the amount of loss increased from the same period of the previous year due to the ongoing costadvancement due to investments in new business areas such as publishing, video, and Web3.
As a result of the above, segment sales were 284,835 thousand yen (67.7% increase over the previous year) andsegment loss was 621,957 thousand yen (segment loss of 280,418 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Drecom Co., Ltd. (3793) Consolidated Financial Results for the Fiscal Year Ended March 31, 2023
(Under Japanese GAAP)(2) Summary of Financial Position
Assets, Liabilities and Net Assets(Assets)
Current assets at the end of the current consolidated fiscal year were 7,848,394 thousand yen, an increase of
1,082,385 thousand yen from the end of the previous consolidated fiscal year. This was mainly due to an increase of
1,307,348 thousand yen in cash and deposits. Noncurrent assets totaled 4,378,002 thousand yen, an increase of
1,490,541 thousand yen from the end of the previous fiscal year. This was mainly due to an increase of 1,693,491
thousand yen in software in progress. As a result, total assets amounted to 12,226,397 thousand yen.
(Liabilities)
Total liabilities at the end of the current consolidated fiscal year amounted to 6,595,277 thousand yen, an increase of
1,515,881 thousand yen from the end of the previous consolidated fiscal year. This was mainly due to a 339,237 thousand
yen increase in accrued income taxes and 865,500 thousand yen increase in bank loans.
(Net assets)
Total net assets at the end of the current consolidated fiscal year amounted to 5,631,120 thousand yen, an increaseof 1,057,045 thousand yen from the end of the previous consolidated fiscal year. This was mainly due to the recordingof 1,159,125 thousand yen in net income attributable to parent company shareholders.
As a result, the equity ratio was 45.6% (46.9% at the end of the previous fiscal year).

(3) Summary of cash flows
Cash and cash equivalents ("cash") at the end of the current consolidated fiscal year increased 1,307,511 thousand
yen from the end of the previous consolidated fiscal year to 6,040,496 thousand yen. Cash flows and factors affecting
cash flows in the current consolidated fiscal year are as follows.

(Cash flow from operating activities)
Net cash provided by operating activities amounted to 2,665,778 thousand yen. The main cash increase factors wereincome before income taxes and minority interests of 1,806,259 thousand yen, depreciation and amortization of 269,275
thousand yen, and impairment loss of 386,259 thousand yen, while the main factor for the decrease was income taxes
paid amounting to 334,675 thousand yen.

(Cash flow from investing activities)
Net cash used in investing activities was 2,017,183 thousand yen. The main factor was 2,005,229 thousand yen used
for the purchase of intangible fixed assets.

(Cash flow from financing activities)
Net cash provided by financing activities was 658,833 thousand yen. The main cash inflow was 2,552,958 thousand
yen in proceeds from long-term loans payable, while the main cash outflows were 1,688,500 thousand yen in repaymentof long-term loans payable and 144,781 thousand yen in cash dividends paid.

(4) Future outlook
In the fiscal year ending March 31, 2024 and beyond, we will strive to secure long-term stable earnings by making
additional investments in titles under management and strengthening our business structure in order to build a stronger
business foundation in our mainstay game business, while aiming for sales growth through the release of new titles anddiversification and layering of revenue sources.
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, 2024, we aim to secure long-term stable earnings from titles in operation in thegame business, achieve sales growth through the steady success of three newly released titles, and diversify and stackrevenue sources.
In the media business, we aim to expand the scale of business by continuing to publish "DRE Novels," a light novel
label in the publishing and video domain that was launched last October for the purpose of acquiring, developing, andnurturing IP, and by launching a comic and webtoon label in the fiscal year ending March 2024. We aim to expand the3Drecom Co., Ltd. (3793) Consolidated Financial Results for the Fiscal Year Ended March 31, 2023
(Under Japanese GAAP)

scale of our business by continuing to publish the "DRE Novels" novel label and launching a comic and webtoon label inthe fiscal year ending March 2024. In addition, we will aggressively pursue the ongoing development/provision of newservices that leverage the know-how and advanced technology of our existing businesses.
Based on the above, for the fiscal year ending March 31, 2024, we project consolidated net sales of 15,000,000
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 1,100,000,000 yen.

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

4

Drecom Co., Ltd. (3793) Consolidated Financial Results for the Fiscal Year Ended March 31, 2023
(Under Japanese GAAP)

3. Consolidated statements and key notes(1) Consolidated Balance Sheet(Unit: thousand yen)Previous consolidated fiscal year
(March 31, 2022)

Current consolidated fiscal year
(March 31, 2023)

ASSETS
Current assets
Cash and deposits

4,737,225

6,044,573

Accounts receivable

1,485,317

1,484,658

Work in progress－
10,144

17,482

Prepaid expenses

157,555

148,928

Other

375,766

147,482

Total current assets

6,766,009

7,848,394

184,236

191,229

Accumulated depreciation-13,603-31,029

Buildings (net)170,632

160,200

Goods

5,268

Fixed assets
Tangible Fixed Assets
Buildings

Tools, furniture & fixtures

69,03085,502

Accumulated depreciation-33,995-53,143

Tools, furniture & fixtures (net)35,03432,358

Lease assets

7,232

7,232

Accumulated depreciation-2,007-3,107

Lease assets (net)

5,225

4,125

Total tangible fixed assets

210,891

196,683

Intangible assets
Software557,325

201,601

Software suspense account

1,333,425

3,026,917

Total intangible assets

1,890,751

3,228,519

7

59,926

465,737

491,226

Investments and other assets
Investment securities
Deferred tax assets
Deposit

199,404

199,404

Other

120,668

202,242

Other investments and other assets

785,818

952,800

Total fixed assets
Total assets

52,887,461

4,378,002

9,653,470

12,226,397

Drecom Co., Ltd. (3793) Consolidated Financial Results for the Fiscal Year Ended March 31, 2023
(Under Japanese GAAP)(Unit: thousand yen)Previous consolidated fiscal year
(March 31, 2022)

Current consolidated fiscal year
(March 31, 2023)

LIABILITIESCurrent liabilities
Accounts payable

357,864

449,977

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

146,000
808,000

100,000
1,780,750

Lease obligations
Accounts payable

1,281
579,036

1,281
554,851

Income taxes payable
Bonus payment reserve

142,079
138,497481,316
129,549

Other

537,158

802,766

Total current liabilities

2,709,917

4,300,494

2,014,000

1,952,750

4,806
100,000

3,524
100,000

Fixed liabilities
Long-term debt
Lease obligations
Asset retirement obligation
Other

250,671

238,507

Total fixed liabilities

2,369,478

2,294,782

5,079,395

6,595,277

Shareholders' equity
Capital

1,792,991

1,811,311

Capital surplus
Retained earnings

2,050,152
953,6812,068,472
1,967,564

Total liabilities
Net assets

Treasury stock-274,029-266,237

Total shareholders' equity

4,522,796

5,581,111

7-2,079Foreign currency translation adjustments－

82

Total accumulated other comprehensive
income7-1,997

Stock acquisition rights

49,06749,067

Non-controlling interests

2,203

2,938

Accumulated other comprehensive income
Valuation difference on available-for-salesecurities

Total net assets
Total liabilities and net assets

6

4,574,075

5,631,120

9,653,470

12,226,397

Drecom Co., Ltd. (3793) Consolidated Financial Results for the Fiscal Year Ended March 31, 2023
(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, 2021 to March 31, 2022)

Current consolidated fiscal year
(April 1, 2022 to March 31, 2023)

Net Sales
Cost of sales

10,528,500
6,731,898

10,800,257
6,242,019

Gross profit

3,796,602

4,558,237

Selling, general and administrative expenses
Salary supplement
Provision for bonuses

463,599
107,764

504,516
106,357

Commission fee
Advertising expenses

113,793
243,741

120,582
208,520

R&D expenses
Other345,240
931,352

354,539982,367

2,205,491

2,276,882

1,591,111

2,281,354

52

54

－
609

3,066
-

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

359

1,938

Total non-operating income

1,020

5,059

Non-operating expenses
Interest expense

44,74741,437

Commission payable
Foreign exchange loss

1,249
4,080

47,673
482

Other

281

4,301

50,35993,895

1,541,772

2,192,519

4,195

－

4,195

－

96,290－－285,108386,259

Total non-operating expenses
Ordinary income
Extraordinary income
Gain on reversal of subscription rights tosharesTotal extraordinary income
Extraordinary loss
Loss on valuation of investment securities
Impairment loss
Total extraordinary loss
Net income before income taxes and minority
interests
Corporate, inhabitant and enterprise taxes

381,399

386,259

1,164,568

1,806,259

386,520669,392

Income tax adjustments-30,828-24,567

Total income taxes

355,692

644,824

Net income

808,876

1,161,435

Net income attributable to noncontrolling interests

1,574

2,309

Net income attributable to owners of the parent

807,301

1,159,1257

Drecom Co., Ltd. (3793) Consolidated Financial Results for the Fiscal Year Ended March 31, 2023
(Under Japanese GAAP)

Consolidated statements of comprehensive income(Unit: Thousand yen)Previous consolidated fiscal year
(April 1, 2021 to March 31, 2022)

Net income or loss
Other comprehensive income
Other securities valuation difference

Current consolidated fiscal year
(April 1, 2022 to March 31, 2023)

808,876

1,161,435

100-2,087

Foreign currency translation adjustments－

82

Total other comprehensive income

100-2,005808,976

1,159,430

807,401

1,157,120

1,574

2,309

Comprehensive income(Breakdown)Comprehensive income for ownersof parent
Comprehensive income fornon-controlling shareholders

8Drecom Co., Ltd. (3793) Consolidated Financial Results for the Fiscal Year Ended March 31, 2023
(Under Japanese GAAP)(3) Consolidated statement of changes in net assets
Previous fiscal year (April 1, 2021to March 31, 2022)(Unit: Thousand yen)
Capital stock
CapitalBalance at the beginning of theperiodCapital 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
Disposal of treasury stock389

807,301-149,948-149,948

6,977

7,366

Net changes of items otherthan shareholders' equity
Total changes of items during theperiod31,78332,172807,301-142,970

728,287

Balance at the end of the period

1,792,991

2,050,152

953,681-274,029

4,522,796

Accumulated other comprehensive
incomeUnrealized gains
Accumulated other(losses) oncomprehensive
available-for-saleincome Total
securities
Balance at the beginning of theperiod-92-92

Share warrant

58,651

Non-controllinginterests

2,247

Total net assets

3,855,316

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

100-9,584-43718,758

Balance at the end of the period

7

7

49,0672,203

4,574,075

9

Drecom Co., Ltd. (3793) Consolidated Financial Results for the Fiscal Year Ended March 31, 2023
(Under Japanese GAAP)

Current consolidated fiscal year (April 1, 2022 to March 31, 2023)(Unit: Thousand yen)

Capital stock
CapitalBalance at the beginning ofcurrent period

Capital surplus

1,792,991

2,050,152

18,32018,320Retained earnings

Total shareholders'equitytreasury stock

953,681-274,029

4,522,796

Changes of items during theperiodIssuance of new shares

36,640Net income attributable toowners of the parent

1,159,125

1,159,125

Acquisition of treasury stock

-24

-24

Disposal of treasury stock

7,816

7,816

Dividends from surplus-145,243-145,243

Net changes of items otherthan shareholders' equity
Total changes of items during theperiodBalance at the end of current
period18,32018,3201,013,882

7,792

1,058,314

1,811,311

2,068,472

1,967,564-266,237

5,581,111

Accumulated other comprehensive income
Unrealized
gains (losses)
on available-forsale securities
Balance at the beginning ofcurrent period

7

Accumulated
othercomprehensive
incometotal amountForeigncurrencytranslation
adjustments-

7

Share warrant

49,067

Non-controlling
Total net assetsinterests

2,203

4,574,075

Changes of items during theperiodIssuance of new shares

36,640Net income attributable toowners of the parent

1,159,125

Acquisition of treasury stock-24

Disposal of treasury stock

7,816

Dividends from surplus-145,243

Net changes of items otherthan shareholders' equity-2,08782-2,005

Total changes of items during theperiod-2,08782-2,005

Balance at the end of current
period-2,07982-1,99710735-1,269-735

1,057,045

49,067

2,938

5,631,120

Drecom Co., Ltd. (3793) Consolidated Financial Results for the Fiscal Year Ended March 31, 2023
(Under Japanese GAAP)(4) Consolidated statements of cash flows(Unit: Thousand yen)Previous consolidated fiscal year
(April 1, 2021 to March 31, 2022)

Cash flows from operating activities
Income before income taxes and minority
interests
Depreciation and amortization
Impairment loss
Stock compensation expense
Interest and dividend income
Loss (gain) on valuation of investment
securities
Commission fee
Interest expense
Decrease (increase）in notes and accounts
receivable-trade
Decrease (increase) in inventories
Decrease (increase) in consumption taxes
receivable
Decrease(increase) in prepaid expenses

Current consolidated fiscal year
(April 1, 2022 to March 31, 2023)

1,164,568

1,806,259

536,543

269,275

285,108
41,720386,259
40,728-52-3,121

96,290－－47,67344,74741,437356,622658-2,809-12,725-151,174

162,542-18,678

3,257-5,678

92,11342,453-12,938

Decrease(increase) in notes and accounts
payable-trade
Increase (decrease) in accrued liabilities
Increase (decrease) in accrued consumption
taxes
Increase (decrease) in advances received
Increase (decrease) in accrued bonuses-163,115

26,595-136,190
740

207,569
536

Other

182,111-22,926

Subtotal

2,273,207

3,033,198

973

5,112

-43,956-635,967-37,856-334,675Interest and distributions received
Interest expenses paid
Income taxes paid
Income taxes refunded
Cash flows from operating activities

8,567

-

1,602,824

2,665,778-70,500-21,288-1,704,144-2,005,229-96,290-59,920-129,813－

177,310

118,734-4,01094,779-1,000－Cash flows from investing activities
Payments for purchase of tangible fixed
assetsPayments for purchase 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

11-33,287-48,479-1,765,956-2,017,183

Drecom Co., Ltd. (3793) Consolidated Financial Results for the Fiscal Year Ended March 31, 2023
(Under Japanese GAAP)(Unit: Thousand yen)Previous consolidated fiscal year
(April 1, 2021 to March 31, 2022)

Cash flows from financing activities
Net increase (decrease) in short-term loans

Current consolidated fiscal year
(April 1, 2022 to March 31, 2023)

46,000-46,000

Proceeds from long-term loans payable
Repayment of long-term loans payable

449,000-697,000

2,552,958-1,688,500

Payments for purchase of treasury stock
Dividends paid

-149,948－-24-144,781

Other-35,827-14,818

Cash flows from financing activities-387,775

658,833－82-550,907

1,307,511

5,283,892

4,732,985

4,732,985

6,040,496

Cash and cash equivalent translation adjustment
Increase (decrease) in cash and cash
equivalents
Cash and cash equivalents at beginning of
periodCash and cash equivalents at end of year

12

Drecom Co., Ltd. (3793) Consolidated Financial Results for the Fiscal Year Ended March 31, 2023
(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 "Guidance on Accounting Standard for Measurement of Fair Value" (ASBJ Guidance No. 31, June 17, 2021;
hereinafter referred to as the "Guidance on Accounting Standard for Measurement of Fair Value") was applied fromthe beginning of the current fiscal year. The new accounting policy stipulated in the "Guidance on AccountingStandard for Measurement of Fair Value" is applied from the beginning of the current fiscal year, and the new
accounting policy will be applied prospectively in accordance with the transitional treatment stipulated in Section 272 of the Guidance on Accounting Standard for Measurement of Fair Value. There is no impact from this change.

13

Drecom Co., Ltd. (3793) Consolidated Financial Results for the Fiscal Year Ended March 31, 2023
(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”.
The Game business is engaged in the planning, development and operation of games played mainly on smartphones.
In the Media business, we publish and sell novels, comics, and other books, as well as e-books. We are also working tocreate new businesses that will support our medium- and long-term growth by applying the know-how we have cultivatedin the past and the cutting-edge technologies we possess.
2. Calculation of net sales, income or loss, assets, liabilities and other items by reportable segment
Income 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, 2021 to March 31, 2022)
Reporting Segment
Gamebusiness

Adjustment*1

Mediabusiness

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

Net Sales
10,358,674

169,825

10,528,500－

10,528,500

－

－

－

－

－

10,358,674

169,825

10,528,500－

10,528,500

Segment income 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

Impairment loss

280,012

5,096

285,108－

285,108

Increase in Tangible andIntangible Fixed 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.

14

Drecom Co., Ltd. (3793) Consolidated Financial Results for the Fiscal Year Ended March 31, 2023
(Under Japanese GAAP)

Current Consolidated Fiscal Year (April 1, 2022 to March 31, 2023)(Unit: Thousand yen)Amount recordedin consolidated
financialstatements*2

Reporting Segment
Gamebusiness

Adjustment*1

Mediabusiness

Total

Net Sales
10,517,071

283,185

10,800,257－

10,800,257

－

1,650

1,650

-1,650－10,517,071

284,835

10,801,907-1,65010,800,257

Segment income or loss

2,903,312-621,957

2,281,354-

2,281,354

Segment assets

5,257,941

242,456

5,500,398

6,725,999

12,226,397

Depreciation and amortization

236,283

1,880

238,163

31,112

269,275

Impairment loss

386,259－

386,259－

386,259

1,992,925

16,5372,009,463

18,3352,027,799

Sales to external customers
Intersegment sales andtransfers
Total

Other Items

Increase in Tangible andIntangible Fixed Assets

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, 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 fixed tangible assets in Japan exceeds 90% of the fixed tangible assets 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

Bandai Namco Nexus Inc.

2,048,344

Game businessApple Inc.

1,628,897

Game business

15

Drecom Co., Ltd. (3793) Consolidated Financial Results for the Fiscal Year Ended March 31, 2023
(Under Japanese GAAP)

Current Consolidated Fiscal Year (April 1, 2022 to March 31, 2023)
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 fixed tangible assets located in Japan exceeds 90% of the amount of fixed tangible assets 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.

4,372,063

Game business,
Media business

Bandai Namco Nexus Inc.

1,543,257

Game businessApple Inc.

1,487,120

Game business【Information on Impairment Losses on Fixed Assets by reportable segment】
Previous 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－

Current Consolidated Fiscal Year (April 1, 2022 to March 31, 2023)
Game businessImpairment loss

Media business

386,259－(Unit: Thousand yen)

Corporate andelimination

Total
－

【Information on amortization and unamortized balance of goodwill by reportable segment】
Previous Consolidated Fiscal Year (April 1, 2021 to March 31, 2022)
Not applicable
Current Consolidated Fiscal Year (April 1, 2022 to March 31, 2023)
Not applicable【Information on gain on negative goodwill by reportable segment】
Not applicable16

386,259

Drecom Co., Ltd. (3793) Consolidated Financial Results for the Fiscal Year Ended March 31, 2023
(Under Japanese GAAP)(Per share data)
Previous consolidated fiscal year
(From April 1, 2021 toMarch 31, 2022)

Current consolidated fiscal year
(From April 1, 2022 toMarch 31, 2023)

Net assets per share

159.06 yen

195.70 yen

Net income per share

28.29 yen

40.70 yen

Diluted net income per share

28.26 yen

40.62 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, 2021 toMarch 31, 2022)

Current consolidated fiscal year
(From April 1, 2022 toMarch 31, 2023)

807,301

1,159,125－－

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

807,301

1,159,125

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

28,536,540

28,482,068－－

26,652

51,138(26,652)(51,138)－－

Previous consolidated fiscal year
(March 31, 2022)

Current Consolidated Fiscal Year
(March 31, 2023)

4,574,075

5,631,120

51,27052,006(of which stock acquisition rights (thousandyen))(49,067)(49,067)(of which, noncontrolling interests (thousandyen))(2,203)(2,938)

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

4,522,804

5,579,114

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

28,435,330

28,507,996

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
2.

Basis for calculation of net assets per share is as follows

Total net assets (thousands of yen)Amount deducted from total net assets(thousand yen)17

Drecom Co., Ltd. (3793) Consolidated Financial Results for the Fiscal Year Ended March 31, 2023
(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, is included in the number of treasury stock deducted from the average number of shares
during the period for the calculation of net income per share (479,421 shares in the previous consolidated fiscal
year and 601,314 shares in the current consolidated fiscal year). Also, in the calculation of net assets per share,
the number of treasury stock is included in the number of shares deducted from the total number of shares issued
and outstanding at the end of the period (613,300 shares in the previous consolidated fiscal year and 595,800
shares in the current consolidated fiscal year).
(Significant Subsequent Events)
Not applicable

4. Other
Not applicable18