UNOFFICIAL TRANSLATION
The formal official document is in Japanese

Summary of Consolidated Financial Results
for the Fiscal Year ended September 30, 2021 (Japanese Accounting Standards)
November 9, 2021
Listed Company Name: MTI Ltd.
Listing Exchanges: Tokyo Stock Exchange
Securities Code:9438
URL: https://www.mti.co.jp/eng/
Representative:
Toshihiro Maeta, President and Chief Executive Officer
Contact:
Hiroshi Matsumoto, Senior managing Director
Phone: +81-3-5333-6323
Scheduled date of annual meeting of shareholders: December 18, 2021
Scheduled date to submit the Securities Report (Yuka Shoken Houkokusho): December 20, 2021
Scheduled date of dividend payment: December 20, 2021
Supplementary documents for financial results: Yes
Financial results briefing: Yes (for securities analysts and institutional investors (On-demand delivery))(Figures less than one millions of yen are omitted)

1. Consolidated financial results for the year ended September 30, 2021
(October 1, 2020 – September 30, 2021)(1) Consolidated operating results(Percentages represent year-on-year changes)
Net sales

Operating income

Millions of yen

For the year ended September 30, 2021
For the year ended September 30, 2020
(Note) Comprehensive income:% Millions of yen

Profit attributable toowners of parent

Ordinary income% Millions of yen% Millions of yen%

25,743 (1.3)
1,929 (23.0)
1,370 (34.2)(1,164)–26,082 (3.8)
2,507 (15.3)
2,082 (33.5)
506 (66.4)
Year ended September 30, 2021: (1,399) million yen, (–%)
Year months ended September 30, 2020: 121 million yen, (92.5%)
Net income
Net income
Return on
Return on Assets Net income
per shareper share/diluted
Equity％％For the year ended September 30, 2021
(21.28)–(6.4)
4.4
For the year ended September 30, 2020
9.28
9.27
2.6
7.2
(Reference) Equity in earnings (losses) of affiliates: Year ended September 30 2021: (569) millions of yen
Year ended September 30 2020: (431) millions of yen

7.5
9.6

Yen

％

Yen

(2) Consolidated financial position
Total assets

Net assets

Millions of yen

Year ended September 30, 2021
Year ended September 30, 2020
(Reference) Shareholders’ equity:

Equity ratio

Millions of yen

31,90821,24330,54721,510Year ended September 30, 2021: 17,426 millions of yen
Year ended September 30, 2020: 19,166 millions of yen

Net assets per share
%

Yen

54.6
62.7

318.29350.83(3) Consolidated cash flows
Net cash providedby (used in)operating activities

Net cash providedby (used in)investing activities

Net cash provided by(used in) financing
activities

Millions of yen

Millions of yen

Millions of yen

Millions of yen

3,516
3,292

(1,996)(4,807)649
2,449

15,54013,354

For the year ended September 30, 2021
For the year ended September 30, 2020

Cash and cash
equivalent

2. Dividends
Dividend per share
End offirstquarter

For the year ended September 30, 2020
For the year ended September 30, 2021
For the year ending September 30, 2022
(forecast)End ofsecondperiodEnd ofthird
quarter

Yen

Yen

Yen

Yen

Yen

–
–

8.00
8.00

–
–

8.00
8.00

16.00
16.00

–

8.00

–

8.00

16.00

Year end

AnnualDividends on
Amount ofDividend ratio
equitydividends paid
(Consolidated)(Consolidated)(Total)

876
878

%

%

172.5
–
87.6
〜146.0

4.5
4.8

3.

Forecast for consolidated financial results for the fiscal year ending September 30, 2022
(October 1, 2021 – September 30, 2022)
Net sales

For the first half
Full year(Percentages represent year-on-year changes)
Profit attributable to
Net income
Ordinary income
owners of parent
per share

Operating income

Millions of yen%

12,750〜13,250
25,500〜26,500

(2.3)
〜1.6
(0.9)
〜2.9

Millions of yen%

Millions ofyen

900(27.0)〜1,100 〜(10.7)
1,800
(6.7)
〜2,200〜14.0%

Millions of yen

700 (16.7)〜900 〜7.1
1,400
2.1〜1,800 〜31.3

300
〜500
600
〜1,000

%

Yen

–

5.48
〜9.13
10.96
〜18.26–* Notes(1) Important changes of subsidiaries during the term (changes in specified subsidiaries resulting in change in scope of
consolidation): Not applicable
New: –
Exception: –(2) Changes in accounting policies and changes or restatement of accounting estimates(i) Changes in accounting policies due to the modification in accounting methods:(ii) Changes in accounting policies other than (i):(iii) Changes in accounting estimates:(iv) Restatement:

Not applicableNot applicableNot applicableNot applicable(3) Number of outstanding shares (common shares)(i) Number of outstanding shares at the end of period (including treasury shares):9/21: 61,248,200 shares
9/20: 61,144,600 shares(ii) Number of treasury shares at the end of period
9/21: 6,496,273 shares
9/20: 6,511,616 shares(iii) Average number of shares during the period
9/21: 54,699,877 shares
9/20: 54,641,936 shares(Reference) Summary of financial results
1. Nonconsolidated financial results for the year ended September 30, 2021
(From October 1, 2020 - September 30, 2021)(Percentages are shown as year-on-year changes)(1) Nonconsolidated operating results
Net sales
For the year ended
September 30, 2021
For the year ended
September 30, 2020

Operating income

Ordinary income

Net income

Millions of yen％

Millions of yen％

Millions of yen％

Millions of yen％

20,699

(0.8)

2,440

(20.2)

2,287(33.9)

4,970

392.1

20,858

(4.4)

3,057

0.6

3,461

24.4

1,010

–

Net income pershare
For the year ended
September 30, 2021
For the year ended
September 30, 2020

Fully diluted net
income per share
Yen

Yen

90.56

–

18.43

18.42

(2) Nonconsolidated financial position
Total assets
Millions of yen

For the year ended
30,344September 30, 2021
For the year ended
24,810
September 30, 2020
(Reference) Shareholders’ equity
As of September 30, 2021: 20,717 millions of yen

Net assets

Equity ratio

Net assets per share

Millions of yen％

Yen

20,87968.3

377.02

16,61566.1

299.23As of September 30, 2020:

16,401 millions of yen* Status of review
Financial results is out of audit.
* Cautionary statement with respect to forward-looking statements
The forward-looking statements included in this material are based on the Company’s judgments, assumptions, and convictions basedon information available to the Company at the time of publication of this document and may differ materially from actual results for arange of factors, including conditions of Japanese and overseas economies, changes in the situation of operations in Japan and overseas,
and uncertainties and potential risks inherent in forward-looking statements. The risks and uncertainties include unforeseeable effects offuture events.For the assumptions underlying the forecasts and other notice on the use of earnings forecasts, please refer to “(4) Future
outlook” on page 4 in the accompanying material.
While the Company planned to hold a briefing on earnings chiefly for securities analysts and institutional investors on Wednesday,
November 10, 2021, to prevent the spread of infections by the COVID-19 coronavirus the Company will forgo holding at the venue
event and will post the on-demand delivery of the briefing and related materials on its website.

Accompanying materials – Contents
1.

Overview of operating results.....……………….…………………………..……………….

2(1)

Overview of operating results for the current fiscal year…………………….……….

2(2)

Overview of financial position for the current fiscal year…………………………..…

4(3)

Overview of cash flow for the current fiscal year….…………………………..………

4(4)

Future outlook………………………………………………………………………...

4

2.

Basic policy for the selection of accounting standard…………….…………………………

5

3.

Consolidated financial statements and important notes………….…………………………

6(1)

Consolidated balance sheet…………………………………………………………...

6(2)

Consolidated statement of income and comprehensive income……………………...

8(3)

Consolidated statement of changes in shareholders’ equity………………………….

10

(4)

Consolidated statement of cash flows………………………………………………...

12

1

1. Overview of operating results(1) Overview of operating results for the current fiscal year
In the Group's business environment during the the current fiscal year, the Japanese economy is severely affectedby the prolonged COVID-19 pandemic. Amid this, its impact on the Group was limited and it worked on various
initiatives in the content business and in the healthcare business with a view towards continued growth in the future.
In the content business, the Group increased the number of new subscribers to the AdGuard security-related app,which was in high demand, although the acquisition of new subscribers through mobile phone stores remained
weak. It also increased monthly distribution of original comics to digital comic distributors.
In the healthcare business, the Group facilitated collaboration with its partner, Medipal Holdings Corporation, ina bid to spur more pharmacies to introduce the cloud drug record service, given that the appetite for the introductionof this service was growing due to the revision of the Medical Fee System, and to promote sales of child bearingrelated solutions, such as the maternal health record book app, to local governments.
In part of the content business, inadequacies were found in the processing of points, including an inability to
distinguish between free of charge points and paid points in the system, and it was found that free of charge points
used were posted in sales. The Group consulted the accounting auditor and posted an adjustment to net sales,
including adjustments before the fiscal year under review (minus ¥322 million, of which minus ¥156 million is anadjustment for the fiscal year under review), as a lump sum in the fourth quarter.
As a result, net sales stood at ¥25,743 million yen (down 1.3% year on year) and gross profit at ¥18,741 million
yen (up 1.1% year on year).
Operating income was down 23.0% year on year, to ¥1,929 million, due to the decrease in gross profit reflecting
the adjustment and an increase in selling, general and administrative (SG&A) expenses, due chiefly to a rise inadvertising expenses aimed at expanding the number of paying subscribers of AdGuard, a paid security-related app.
Ordinary income decreased 34.2% year on year, to ¥1,370 million, due chiefly to a drop in non-operating
expenses following increase in investment losses by equity method (increased ¥137 million yen year on year)
despite a fall in operating income.
Loss attributable to owners of parent came to ¥1,164 million (compared to a profit of ¥506 million in the previousyear). This mainly reflected decreases in ordinary income and extraordinary income, despite a decrease in
extraordinary losses, as well as a decision to post neither deferred tax assets nor income taxes - deferred pursuant
to the current accounting standards for the treatment of consolidated results pertaining to corporate taxes forrelevant capital gains as a result of the transfer of the entire shares of Solamichi System Inc., a consolidated
subsidiary of the Company, to CARADA medica Inc., a consolidated subsidiary of the Company.
Consolidated operating results(Period from October 1, 2020 to September 30, 2021)
Fiscal year ended
September 30, 2021

Fiscal year ended
September 30, 2020

ChangeAmountPercentage

Millions of yen

Millions of yen

Millions of yen%

25,74326,082

(339)

(1.3)

7,001

7,130

(129)

(1.8)

Gross profit

18,741

18,951

(209)

(1.1)

SG&A

16,811

16,444+367+2.2

Operating income

1,929

2,507

(577)

(23.0)

Ordinary income
Profit attributable to
Owners of parent

1,370

2,082

(712)

(34.2)(1,164)506(1,671)-

Net sales
Cost of sales

2Breakdown of SG&A
(Period from October 1, 2020 to September 30, 2021)
Fiscal year ended
September 30, 2021

Fiscal year ended
September 30, 2020

ChangeAmountPercentage

Millions of yen

Millions of yen

Millions of yen%

16,811

16,444+367+2.2

Advertising expenses

1,517

1,174

+343

+29.3

Personnel expenses

7,099

6,395

+703

+11.0

Commission fee

3,157

3,343

(185)

(5.5)

Subcontract expenses

1,804

1,426

+377

+26.4

Depreciation

1,132

1,620

(487)

(30.1)

Other

2,100

2,483

(383)

(15.4)

Total

Operating results by segment are as follows.
① Content business
The content business includes B2C monthly billing services excluding the Luna-Luna healthcare service forwomen and the KARADAmedica health Q&A service in cooperation with healthcare professionals, as well as
the B2B original comic distribution business that offers original comic content to comic distributors.
This segment served 3.52 million paying subscribers. The figure was down by 360,000 from the end of
September 2020. The net decrease in paying subscribers continued, but the pace of decrease was gradually
reduced by strong acquisition of new subscriptions to the AdGuard security-related app via mobile phone
stores.
Net sales stood at ¥18,851 million (down 7.6% year on year). Although the original comic distribution
business posted record revenue, it was not enough to offset a year-on-year decrease in the number of paying
subscribers. Operating income also dropped 18.7% year on year to ¥5,940 million, due chiefly to soaring
expenses for advertising the AdGuard security-related app.
② Healthcare business
The healthcare business includes B2C monthly billing services under the Luna-Luna and KARADAmedica
brands and B2B and B2B2C healthcare services for medical institutions and local governments, such as thecloud drug record service, online medical examinations, online medication advice and the maternal health record
book app.
This segment served 640,000 paying subscribers. The figure was 70,000 smaller than at the end of September
2020. It made the most intensive efforts to increase the number of pharmacies introducing the cloud drug record
service. The desire to introduce the service has been increasing due to the revision of the Medical Fee System.
As of the end of September 2021, it had been adopted by 765 pharmacies, up 408 from the end of September
2020.
Net sales came to ¥3,791 million (up 4.1% year on year), after growth in initial introduction sales based on
an increase in the number of pharmacies introducing the cloud drug record service over the same period theprevious year. Operating loss decreased to ¥1,267 million (compared to the loss of ¥1,530 million recorded forthe same period the previous year), aided by an increase sales despite the continuing burden of upfront
investment spending.
③ Other business
Other business includes the B2B fintech business, the AI business operated by consolidated subsidiary AutomagiInc., and the B2B solutions business, which engages in the contracted development of systems and applications.
In this segment, net sales stood at ¥4,350 million (up 41.3% year on year), reflecting a rise in sales in the AI
business and digital transformation support business for major companies. The operating loss decreased to ¥105
million (compared to a loss of ¥617 million recorded for the same period the previous year), aided by an increasein sales.

3(2) Overview of financial position for the current fiscal year
As of the end of the fiscal year under review, total assets increased ¥1,361 million from September 30, 2020, to¥31,908 million.
Current assets increased ¥1,519 million mainly due to a rise in cash and deposits. Non-current assets fell ¥157
million due to a decline in goodwill and customer-related assets, despite an increase in software.
Current liabilities increased ¥1,889 million, primarily reflecting a rise in income taxes payable. Non-current
liabilities fell ¥260 million mainly due to a declined in long-term liabilities.
Net assets decreased ¥267 million, reflecting dividends paid and the posting of ¥1,164 million as a loss
attributable to owners of parent, which offset an increase in non-controlling interests.
(3) Overview of cash flow position for the current fiscal year
As of the end of the fiscal year under review, cash and cash equivalents amounted to ¥15,540 million, an increaseof ¥2,186 million from September 30, 2020. Cash flow by activity and principal factors in the fiscal year underreview were as follows.
Net cash provided by operating activities was ¥3,516 million (inflow of ¥3,292 million in the previous fiscal
year). This is mainly a reflection of profit before income taxes and depreciation, which more than offset income
taxes paid.
Net cash used in investing activities stood at ¥1,996 million (outflow of ¥4,807 million in the previous fiscal
year). Principal factors included the acquisition of intangible assets (mainly purchase of software).
Net cash provided by financing activities came to ¥649 million (inflow of ¥2,449 million in the previous fiscal
year). Principal factors included proceeds from non-controlling interests which more than offset dividends paid
and repayments of long-term loans payable.
(Reference) Cash flows indicators
Fiscal year ended Fiscal year ended Fiscal year ended Fiscal year ended Fiscal year ended
September 30,
September 30,
September 30,
September 30,
September 30,
2017
2018
2019
2020
2021
Equity ratio (%)
Equity ratio based on market
value (%)
Ratio of cash flows to interestbearing liabilities (%)
Interest coverage ratio (times)

71.2

75.2

72.3

62.7

54.6

154.0

143.9

140.4

158.2

131.9

-

-

1.7

101.2

81.9

5,646.4

25,971.6

8,912.8

804.9

517.7

Equity ratio: Shareholders’ equity / Total assets Equity ratio
Based on market value: Market capitalization / Total assets Ratio of cash flows to interest-bearing liabilities: Interest-bearing liabilities/ Net cash provided by operating activities.
Interest coverage ratio: Net cash provided by operating activities Interest payments.
Notes: 1. These indicators are calculated based on consolidated financial results.
2. Cash flows refers to net cash provided by operating activities in the consolidated statements of cash flows.
3. Interest-bearing liabilities refer to all liabilities in the consolidated balance sheet for which interest is paid. Interest payment
refers to the interest payment amount in the consolidated cash flows statement.

(4) Future outlook
The Company will work hard to expand sales and cut losses of its healthcare business, which is expected to play a
key role in increasing revenue and earnings in the future. In the content business, it will make every effort to increase
the number of paying subscribers by expanding sales of the AdGuard security-related app and striving to bolster theoriginal comic distribution business.
The Company takes medium- and long-term perspectives in its engagement in the healthcare business, which hasstrong potential for future growth and compared with BtoC transactions, may move toward a more stable stock-type4

business through the establishment of long-term business relationships with customers. Therefore, theCompany
is committed to implementing a variety of measures to achieve sales growth.
Among others, the cloud drug record service will help the healthcare business attain continuous sales growth,since the appetite for introducing the service has been growing among pharmacies due to the revision of the Medical
Fee System. The Company will accelerate sales tie-ups with companies that provide IT solutions to pharmacies tomake sure that more stores will introduce the service, while simultaneously strengthening collaboration with its
partner, Medipal Holdings Corporation.
It will also enhance childcare-related services with a focus on local governments that have introduced theBoshimo, a maternal health record book app, and will advance digital cooperation among local governments,
hospitals, and residents, thereby advancing its Boshimo childcare digital transformation platform strategy to enable
the healthcare business to make a contribution to profit in the medium term.
Earnings forecast for the six months of the fiscal year ending September 30, 2022
(Period from October 1, 2021 to March 30, 2022)
Consolidated
Net sales(Millions of yen)

YoY(%)

12,750 ~ 13,250(2.3) ~ +1.6

Operating income

900 ~1 ,100

(27.0) ~ (10.7)

Ordinary income

700 ~ 900

(16.7) ~ +7.1

Profit attributable toowners of parent

300 ~ 500-

Earnings forecast for the fiscal year ending September 30, 2022
(Period from October 1, 2021 to September 30, 2022)
Consolidated(Millions of yen)

YoY(%)Net sales

25,500 ~ 26,500(0.9) ~ +2.9

Operating income

1,800 ~ 2,200(6.7) ~ +14.0

Ordinary income

1,400 ~ 1,800+2.1 ~ +31.3

Profit attributable toowners of parent

600 ~ 1,000-

2. Basic policy for the selection of accounting standards
The Group intends to compile its consolidated financial statements based on the Japanese accounting standard forthe time being, considering the possibility of comparing the terms of financial statements and performances
between companies.
It will adopt the International Financial Reporting Standards (IFRS), factoring in the situations in Japan andabroad.

5

3．Consolidated financial statements and important notes(1) Consolidated balance sheet（Unit: thousands of yen）
Previous fiscal year
(As of September 30, 2020)
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade
Advance payments-trade

Current fiscal year
(As of September 30, 2021)

13,354,028
4,840,902
466,495

15,540,084
4,501,674
281,543

453,713271,568
51,914
341,334(36,222)460,171
93,63860,276358,622(33,173)

19,743,732

21,262,838

397,543(308,891)

338,130(256,359)

88,652

81,771

1,201
(451)

277
(255)

750

22

507,795(403,441)

567,859(446,650)

Tools, furniture and fixtures, net

104,354

121,208

Total property, plant and equipment

193,757

203,001

Software
Goodwill
Customer-related assets
Other

1,281,608
692,054
1,755,000
35,437

1,791,596
556,4211,333,800
30,009Total intangible assets

3,764,099

3,711,827

Investment securities
Lease and guarantee deposits
Deferred tax assets
Other
Allowance for doubtful accounts

4,536,380
493,882
1,766,869
74,487(25,824)

4,511,728
318,761
1,803,442
108,143(10,904)

Total investments and other assets

6,845,793

6,731,170

10,803,650

10,646,000

30,547,383

31,908,839

Prepaid expenses
Accounts receivable-other
Income taxes receivable
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Facilities attached to buildings
Accumulated depreciation
Facilities attached to buildings, net
VehiclesAccumulated depreciation
Vehicles, net
Tools, furniture, and fixtures
Accumulated depreciation

Intangible assets

Investments and other assets

Total non-current assets
Total assets

6

（Unit: thousands of yen）
Previous fiscal year
(As of September 30, 2020)

Current fiscal year
(As of September 30, 2021)

1,101,925
451,780
1,333,898
492,594
701,022
109,550

1,147,543
451,780
1,230,095
493,342
2,156,218
461,410

110,690
23,302441,940

115,396
23,447
576,648

Total current liabilities

4,766,705

6,655,884

Non-current liabilities
Long-term loans payable

Liabilities
Current liabilities
Accounts payable-trade
Current portion of long-term loans payable
Accounts payable-otherAccrued expenses
Income taxes payable
Accrued consumption taxes
Provision for point usage
Provision for directors’ bonuses
Other2,881,570

2,429,790

Net defined benefit liability
Other

1,381,767
6,756

1,572,854
6,935

Total non-current liabilities

4,270,094

4,009,579

9,036,799

10,665,464

Capital stock
Capital surplus
Retained earnings
Treasury shares

5,138,116
6,551,222
10,707,058(3,283,663)

5,197,909
6,660,831
8,665,046(3,281,839)

Total shareholders’ equity

19,112,733

17,241,947

Total liabilities
Net assets
Shareholders’ equity

Accumulated other comprehensive income
Valuation difference on available-for-sale securities

19,897

165,205

Foreign currency translation adjustment
Remeasurements of defined benefit plans(11,666)
46,0105,908
13,879Total accumulated other comprehensive income

54,241

184,993

Subscription rights to shares
Non-controlling interests

345,2991,998,309

161,887
3,654,545

Total net assets

21,510,583

21,243,375

30,547,383

31,908,839

Total liabilities and net assets

7

(2) Consolidated statement of income and consolidated comprehensive income
Consolidated statement of income
Previous fiscal year
(from October 1, 2019
to September 30, 2020)
26,082,051
7,130,326
18,951,725（Unit: thousands of yen）
Current fiscal year
(from October 1, 2020
to September 30, 2021)
25,743,006
7,001,132
18,741,873

Selling, general and administrative expenses

16,444,519

16,811,994

Operating income

2,507,205

1,929,879

Interest income
Dividend income
Amortization of negative goodwill
Foreign exchange gains
Subsidy income
Cancellation of treasury share acquisition rights gains

215
10,1304,069

234

Gain on share exchange
Reversal of allowance for doubtful accounts
Other

－
138
21,815

12,102

Total non-operating income

41,569112,267

Net sales
Cost of sales
Gross profits

Non-operating income

－
5,199
－

Non-operating expenses
Interest expenses
Share of loss of entities accounted for using equity method
Foreign exchange losses
Cancellation of treasury share acquisition rights losses
Other
Total non-operating expenses
Extraordinary income
Gain on sale of non-current assets
Gain on sales of investment securities
Gain on change in equity
Gain on reversal of share acquisition rights－
17,473

4,094

6,793

431,156
14,660569,114－
16,004

Ordinary income－－
32,394
28,63821,424－71,55023,981

465,915

671,438

2,082,859

1,370,708－
428,437
67,032
41,665

3,030
3,184
80,08254,810Gain on step acquisitions

272,326－

Total extraordinary income

809,461

141,107664
166,935
1,416,842
93,956Extraordinary losses
Loss on sales of non-current assets
Loss on retirement of non-current assets
Impairment loss
Loss on valuation of investment securities
Retirement benefit expenses

－

8,223
65,492
428,318
11
23,702

Total extraordinary losses

1,678,399

525,748

Income before income taxes

1,213,921

986,066

Income taxes-current
Income taxes-deferred

1,074,548(196,627)

2,538,565(22,880)

877,9212,515,685

Profit(loss)

336,000(1,529,619)

Loss attributable to non-controlling interests(170,942)(365,396)

Profit(loss) attributable to owners of parent

506,943(1,164,222)

Total income taxes

8Consolidated statement of comprehensive income
Previous fiscal year
(from October 1, 2019
to September 30, 2020)
336,000（Unit: thousands of yen）
Current fiscal year
(from October 1, 2020
to September 30, 2021)(1,529,619)(291,833)(3,636)
40,674

102,593
16,843(32,130)

40,46842,836(214,327)

130,143

Comprehensive income

121,673(1,399,475)(Comprehensive income attributable to)Comprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests

292,616(1,033,469)(170,942)(366,006)

Profit(loss)
Other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income9(3) Consolidated statement of changes in equity
Previous fiscal year (from October 1, 2019 to September 30, 2020)(Unit: thousands of yen)
Shareholders’ equity

Balance at beginning of current
periodCapital stock

Capital surplus

5,135,680

6,706,846

2,436

2,436

Retainedearnings

Treasury stock

Total
shareholders’equity10,989,009(3,233,136)

19,598,399

Changes of items during period
Issuance of new shares exercise ofsubscription rights to shares
Dividends of surplus
Profit(loss) attributable to ownersof parent
Increase (decrease) consolidated
subsidiaries
Net changes of items other thanshareholders’ equity
Change in equity in affiliates
accounted for by equity method
treasury stock

4,872(876,893)(876,893)

506,943506,943(158,059)(158,059)
87,99987,999(50,527)(50,527)－

Cancellation of treasury shares
Net changes of items other thanshareholders’ equity
Total changes of items during period
Balance at end of current period

2,436(155,623)(281,950)(50,527)(485,665)

5,138,116

6,551,222

10,707,058(3,283,663)

19,112,733

Total otherRemeasurements
accumulatedof defined benefit
comprehensive
plansincomeSubscription
rights toshares

Noncontrollinginterests

343,187

1,584,173

Accumulated other comprehensive income

Balance at beginning of current
periodValuationdifference on
available-forsale securities

Foreigncurrencytranslation
adjustment

271,565(8,332)

5,335

268,568

Total net
assets21,794,328

Changes of items during period
Issuance of new shares
exercise of subscription rights
to shares

4,872

Dividends of surplus
Profit(loss) attributable toowners of parent
Increase(decrease)consolidated subsidiaries
Net changes of items otherthan shareholders’ equity
Change in equity in affiliates
accounted for by equity
method treasury stock
Cancellation of treasury
sharesNet changes of items otherthan shareholders’ equity
Total changes of items during
periodBalance at end of current period(876,893)
506,943(158,059)
87,999(50,527)－(251,668)(3,333)40,674(214,327)

2,112

414,135

201,920(251,668)(3,333)40,674(214,327)

2,112

414,135(283,745)

19,897(11,666)

46,01054,241

345,2991,998,309

21,510,583

10Current fiscal year (from October 1, 2020 to September 30, 2021)(Unit: thousands of yen)
Shareholders’ equity

Balance at beginning of current
periodCapital stock

Capital surplus

5,138,116

6,551,222

59,79359,793Retainedearnings

Treasury stock

Total
shareholders’equity10,707,058(3,283,663)

19,112,733

Changes of items during period
Issuance of new shares exercise ofsubscription rights to shares
Dividends of surplus
Profit(loss) attributable to ownersof parent
Increase (decrease) consolidated
subsidiaries
Net changes of items other thanshareholders’ equity
Change in equity in affiliates
accounted for by equity method
treasury stock

119,586(877,789)(877,789)(1,164,222)(1,164,222)

67,75767,757－

Cancellation of treasury shares(17,941)△16,117△16,117

17,941－

Net changes of items other thanshareholders’ equity
Total changes of items during period
Balance at end of current period

59,793

109,608(2,042,011)

1,823(1,870,786)

5,197,909

6,660,831

8,665,046(3,281,839)

17,241,947

Total otherRemeasurements
accumulatedof defined benefit
comprehensive
plansincomeSubscription
rights toshares

Noncontrollinginterests

345,2991,998,309

Accumulated other comprehensive income

Balance at beginning of current
periodValuationdifference on
available-forsale securities

Foreigncurrencytranslation
adjustment

19,897(11,666)

46,01054,241

Total net
assets21,510,583

Changes of items during period
Issuance of new shares
exercise of subscription rights
to shares

119,586

Dividends of surplus(877,789)

Profit(loss) attributable toowners of parent
Increase(decrease)consolidated subsidiaries
Net changes of items otherthan shareholders’ equity
Change in equity in affiliates
accounted for by equity
method treasury stock
Cancellation of treasury
sharesNet changes of items otherthan shareholders’ equity
Total changes of items during
periodBalance at end of current period(1,164,222)
67,757－(16,117)－
145,308

17,574(32,130)

130,752(183,411)

1,656,236

1,603,577

145,308

17,574(32,130)

130,752(183,411)

1,656,236(267,208)

165,205

5,908

13,879184,993

161,887

3,654,545

21,243,375

11

（4）Consolidated statement of cash flows
Previous fiscal year
(from October 1, 2019
to September 30, 2020)
Cash flows from operating activities
Income before income taxes
Depreciation
Impairment loss
Amortization of goodwill
Amortization of negative goodwill
Increase (decrease) in allowance for doubtful accounts（Unit: thousands of yen）
Current fiscal year
(from October 1, 2020
to September 30, 2021)

1,213,921
1,703,477
1,416,842
302,346(4,069)(11,391)

986,066
1,238,825
428,318
215,632(32,686)
124,694(10,346)
4,094

4,705
153,130
(234)
6,793

－
(17,968)

Increase (decrease) in provision for point usage
Increase (decrease) in net defined benefit liability
Interest and dividend income
Interest expenses
Share of (profit) loss of entities accounted for using equity
methodLoss (gain) on step acquisitions

431,156

569,114(272,326)

Loss (gain) on change in equity
Loss (gain) on sales of non-current assets
Loss on retirement of non-current assets
Loss (gain) on sales of investment securities
Loss (gain) on valuation of investment securities
Gain on reversal of share acquisition rights(67,032)
664
166,935(428,437)
93,956(41,665)－(80,082)
5,193
65,492(3,184)
11(54,810)Decrease (increase) in trade receivables
Decrease (increase) in advance payments to suppliers
Decrease (increase) in prepaid expenses
Decrease (increase) in accounts receivable-other
Increase (decrease) in trade payables
Increase (decrease) in accounts payable-other(173,686)(179,547)(85,894)(161,665)(206,142)
183,759

343,745
184,974(6,343)
177,933
40,719(113,766)

Increase (decrease) in accrued expenses
Increase (decrease) in accrued consumption taxes
Other, net

33,563(51,555)
491,325(1,902)351,860
159,647

Subtotal

4,440,291

4,653,873

10,346(4,094)(1,153,905)

234(6,793)(1,130,434)

3,292,637

3,516,879

Interest and dividends received
Interest paid
Income taxes refund (paid)
Net cash provided by (used in) operating activities

12Previous fiscal year
(from October 1, 2019
to September 30, 2020)
Cash flows from investing activities
Purchase of property, plant and equipment(66,854)（Unit: thousands of yen）
Current fiscal year
(from October 1, 2020
to September 30, 2021)

Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Proceeds from sale of intangible assets
Purchase of investment securities
Proceeds from sale of investment securities
Purchase of shares of subsidiaries and associates

2,450(1,618,390)－(54,379)
918,824(725,092)（134,086)
220(1,641,958)
4,250(83,303)
17,353(274,144)

Payments for transfer of business
Payments for sales of shares of subsidiaries resulting inchange in scope of consolidation
Proceeds from collection of lease and guarantee deposits
Other, net(3,242,593)(80,000)(36,882)－

17,770(1,870)232,661(37,266)

Net cash provided by (used in) investing activities(4,807,018)(1,996,273)

Proceeds from short-term borrowings
Repayments of short-term borrowings
Proceeds from short-term borrowings
Repayments of long-term borrowings
Proceeds from issuance of shares
Proceeds from share issuance to non-controllingshareholders
Cash dividends paid
Payments from changes in ownership interests in
subsidiaries that do not result in change in scope of
consolidation
Purchase of treasury share acquisition rights
Purchase of treasury shares of subsidiaries－(2,000)3,500,000

4,000,000(4,000,000)

Net cash provided by (used in) financing activities

Cash flows from financing activities(263,030)
3,796－(451,780)
70,302410,000

2,115,000(876,893)(877,789)(222,600)－－(100,000)(181,550)(25,000)

2,449,272

649,182

Effect of exchange rate change on cash and cash equivalents(2,423)

16,267

Net increase (decrease) in cash and cash equivalents

932,467

2,186,056

Cash and cash equivalents at beginning of period

12,421,560

13,354,028

Cash and cash equivalents at end of period

13,354,028

15,540,084

13