Consolidated Financial Results
for the Fiscal Year Ended May 31, 2023
[Japanese GAAP]IK HOLDINGS Co., Ltd
Tokyo Stock Exchange
Nagoya Stock Exchange
Securities code:
2722
URL:
https://www.ai-kei.co.jp
Representative:
Chairman & CEO
Contact:
Managing Director, Administration
Telephone:052(856)3101
Scheduled date of annual general meeting of shareholders:
Scheduled date to file annual securities report:
Scheduled date to commence dividend payments:
Preparation of supplementary material on financial results:
Holding of financial results briefing:

July 13, 2023

Company name:
Listing:

Hiroshi Iida
Nobuyoshi Takahashi
August 18, 2023
August 21, 2023
Yes
Yes
(Yen amounts are rounded down to millions, unless otherwise noted.)

1. Consolidated Financial Results for Fiscal Year Ended May 31,2023 (June 1, 2022 to May 31, 2023)(Percentages indicate year-on-year changes.)(1) Consolidated Operating Results
Profit attribute to owners of
Net sales
Operating profit
Ordinary profit
parentFiscal year ended

Millions of yen%

Millions of yen

May 31, 2023
14,179(13.2)
May 31, 2022
16,335(21.3)
Note: Comprehensive income
Fiscal Year Ended May 31,2023: ¥(466) million [ ―% ]Fiscal Year Ended May 31,2022: ¥(912) million [ ―% ]Basic earnings per share
Fiscal year ended

%

―
―

(224)
(360)

Diluted earnings per share

Yen

As of

May 31, 2023
May 31, 2022%

Net assets

(463)
(905)

Ratio of ordinary
profit to total assets

Return on equity

Yen

Millions of yen

―
―

(205)
(323)

―
May 31, 2023
(60.34)―
May 31, 2022
(115.95)(Reference) Share of profit (loss) of entities accounted for using equity method
Fiscal Year Ended May 31,2023: ¥―million
Fiscal Year Ended May 31,2022: ¥―million(2) Consolidated financial position
Total assets

Millions of yen%――

Ratio of operating
profit to net sales

%

%

%

(21.1)(30.1)

(2.9)
(4.4)

(1.6)
(2.2)

Equity-to-asset ratio

Net assets per share

Millions of yen

Millions of yen

%

Yen

6,788
7,378

1,970
2,504

28.3
33.5

249.52321.94(Reference) Equity capital
Fiscal Year Ended May 31,2023: ¥1,918 million
Fiscal Year Ended May 31,2022: ¥2,470 million(3) Consolidated cash flows
Cash flows from operating
activities

Cash flows from investing
activities

Cash flows from financing
activities

Cash and cash equivalents at
end of year

Fiscal year ended

Millions of yen

Millions of yen

Millions of yen

Millions of yen

May 31, 2023
May 31, 2022

66
(769)

(279)
(319)

109
(1,135)971
1,075

2. Cash dividends
Annual dividends per shareFirst
quarter-end

Secondquarter-end

Thirdquarter-end

yen

yen

yen

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

Total cash

Fiscalyear-end

dividends(Total)

Total

yen

%

yen Millions of yen%

Fiscal year ended May 31,
2022
Fiscal year ending May 31,
2023

―

0.00

―

12.00

12.00

92

―

3.1

―

0.00

―

0.00

0.00

0

―

―

Fiscal year ending December

―

0.00

―

5.00

5.00

31, 2024 (Forecast)

28.5

3. Consolidated Financial Results Forecast for the Fiscal Year Ending May 31, 2024 (June 1, 2023 to May 31, 2024)(Percentages indicate year-on-year changes.)
Net sales
Six months ending Nov
30, 2023
Fiscal year ending May
31, 2024

Operating profit

Profit attributable toowners of parent

Ordinary profit
%

%

yen

Millions of yen%

Millions of yen

6,619

(8.6)

64

―

63

―

(59)

―

(7.68)

13,588

(4.2)

378

―

377

―

135

―

17.56

Millions of yen%

Basic earnings
per share

Millions of yen

* Notes:(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in the change in scope of consolidation): None
Newly included: － companies
Excluded: － companies(2) Changes in accounting policies, changes in accounting estimates and retrospective restatement
1) Changes in accounting policies due to the revision of accounting standards: None
2) Changes in accounting policies other than 1) above: None
3) Changes in accounting estimates: None
4) Retrospective restatement: None
(3) Total number of issued shares (common shares)① Total number of issued shares at the end of the period (including treasury shares):
As of May 31,2023
8,308,000 shares
As of May 31,2022
8,308,000 shares② Total number of treasury shares at the end of the period:
As of May 31,2023
As of May 31,2022

621,276 shares
634,376 shares③ Average number of shares outstanding during the period
Fiscal year ended May 31, 2023
Fiscal year ended May 31, 2022

7,682,381 shares
7,809,821 shares[Reference] Overview of non-consolidated financial results
Non-consolidated financial results for the fiscal year ended May 31, 2023 (from June 1, 2022 to May 31,2023)(1) Non-consolidated operating results
Net sales(Percentages indicate year-on-year changes.)
Ordinary profit
ProfitOperating profit

Fiscal year ended

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen

May 31, 2023
May 31, 2022

5,325
10,883(51.1)
(8.8)

60
421

(85.6)
28.4

(477)
90

―
(72.1)

(492)
(147)

Basic earnings
per share%――

Diluted earnings
per shareyenyen

As of May 31,2023(64.16)―(18.90)―Note: Significant fluctuations in non-consolidated operating results in the fiscal year ended May 31, 2023 is due to the shift to a holding company
structure on December 1, 2022.
As of May 31,2022(2) Non-consolidated financial position
Total assets
As of

Net assets

Equity-to-asset ratio

Net assets per share

Millions of yen

Millions of yen

%

yen

4,618
6,175

2,076
2,638

43.8
42.2

263.33339.41

May 31, 2023
May 31, 2022
Reference: Equity
As of May 31, 2023: ¥2,024 million
As of May 31, 2022: ¥2,604 million* Financial results reports are exempt from audit conducted by certified public accountants or an audit corporation* Proper use of earnings forecasts, and other special matters
Forecasts and forward-looking statements in this document are based on management's assumptions and beliefs in light of the information currently
available to it, and are therefore subject to a number of uncertainties. Actual results may differ from these forecasts due to changes in the businessenvironment and other factors.

○Table of Contents of the Appendix
1. Business Performance Overview ………………………………………………………………………………………
(1) Business Performance Overview for Current Term……………………………………………………………
(2) Financial Position Overview for Current Term ……………………………………………………………
(3) Cash Flow Overview for Current Term…………………………………………………………………………
(4) Future Outlook………………………………………………………………………………………………………
2. Basic Policy on Selection of Accounting Standards …………………………………………………………
3. Consolidated Financial Statements and Major Notes …………………………………………………………
(1) Consolidated Balance Sheet………………………………………………………………………………………
(2) Consolidated Statement of Profit and Loss and Consolidated Statement of Comprehensive Income(3) Consolidated Statement of Change in Shareholders’ Equity……………………………………………
(4) Consolidated Statement of Cash Flows…………………………………………………………………………
(5) Notes to Consolidated Financial Statements…………………………………………………………………
(Notes on Going Concern Assumption)……………………………………………………………………………
(Segment Information)………………………………………………………………………………………………
(Per-share Information)……………………………………………………………………………………………
(Important Subsequent Events) ……………………………………………………………………………………

- 1 -

2
2
2
3
3
3
4
4
6
8
10
12
12
13
16
16

1. Business Performance Overview(1) Business Performance Overview for Current Term
In FY 2023, the Japanese economy saw a sign of recovery, as social and economic activities were gradually normalized after
the easing of restrictions on activities for curbing the spread of COVID-19, but the outlook remains uncertain, as the rise incommodity prices became evident due to the global skyrocketing of prices of resources and the fluctuations in exchange rates andgeopolitical risks intensified due to the war between Russia and Ukraine, etc.
In that situation, we revised proposals for projects and strove to improve our planning capability, product competitiveness, andmarket appeal, for the purpose of strengthening our marketing capability through co-op routes, which constitute our revenue
bases. Regarding the Korean cosmetics positioned as new core products, we started selling them as a Japanese general distributorof the popular brands such as “ma:nyo,” “hince,” and “KAHI.” For the TV shopping “Prime Direct,” we have decreased airtime
considerably, to pursue media use efficiency.
In addition, our corporate group shifted to a holding company structure in December 2022, renaming our company “IKHOLDINGS Co., Ltd.” We will further speed up decision making for business administration, formulate strategies flexibly,
allocate managerial resources in an optimal manner, separate supervising and executing functions, delegate authority, and create
new businesses and management personnel, with the aim of maximizing our corporate value as a corporate group.
As a result, the financial results for FY 2023 were sales of 14,179 million yen, down 13.2% year on year, an operating loss of
224 million yen (an operating loss of 360 million yen in the same period of the previous year), an ordinary loss of 205 million
yen (an ordinary loss of 323 million yen in the same period of the previous year), and a loss attribute to owners of parent of 463
million yen (a loss attribute to owners of parent of 905 million yen in the same period of the previous year).
The performance in each segment is as follows: (Sales mean the sales to external customers.)
・Direct marketing business
For TV shopping, we shifted to a policy focused on media use efficiency to improve profitability, and reduced airtime. As aresult, sales dropped considerably. Regarding the real shops of Korean cosmetics, we closed 7 unprofitable directly-managed
shops and 3 franchised shops of “SKINFOOD” and opened 2 shops of “hince” and 1 shop that deals in diverse Korean brands ofcosmetics. As a result, sales were 4,007 million yen, down 22.7% year on year, and operating loss was 327 million yen (805million yen in the same period of the previous year).
・Sales marketing business
The sales from the food product project in the co-op route, which is our core route, were almost unchanged from the previous
year, but the sales from the projects for miscellaneous goods and cosmetics decreased from the previous year. In addition, thesales via the mail-order and real-store routes declined slightly. Accordingly, the sales in this segment were 9,651 million yen,down 9.8% year on year, and operating income was 355 million yen.
As our corporate group shifted to a holding company structure, it became possible to estimate each segment’s share of groupwide expenses. Accordingly, the method for calculating the profit or loss in each segment was changed. Therefore, the year-onyear change in operating income/loss in each segment is omitted.
・IT solution business
Sales were 518 million yen, up 15.1% year on year, as the sales of the chat system “M-Talk,” which is a core product,
increased steadily, but operating income was 13 million yen, down 55.5% year on year, as procurement costs augmented due tothe effects of exchange rates.
(2) Financial Position Overview for Current Term
(Assets)
Current assets at the end of the current consolidated fiscal year were down 825 million yen from the end of the previous fiscal
year. This is mainly because “cash and deposits,” “notes and accounts receivable - trade,” and “merchandise and finished goods”
decreased 104 million yen, 428 million yen, and 154 million yen, respectively.
Non-current assets at the end of the current consolidated fiscal year were up 235 million yen from the end of the previous fiscal
year. This is mainly because “intangible assets” increased 259 million yen.
As a result, the total assets at the end of the current consolidated fiscal year stood at 6,788 million yen, down 589 million yen
from the end of the previous fiscal year.
(Liabilities)
Current liabilities at the end of the current consolidated fiscal year were up 246 million yen from the end of the previous fiscal
year. This is mainly because “short-term loans payable” augmented 550 million yen, and “accounts payable - trade” and “income
taxes payable” decreased 220 million yen and 77 million yen, respectively.
Non-current liabilities at the end of the current consolidated fiscal year were down 301 million yen from the end of the- 2 -previous fiscal year. This is mainly because “long-term loans payable” decreased 311 million yen.
As a result, the liabilities at the end of the current consolidated fiscal year stood at 4,818 million yen, down 55 million yen
from the end of the previous fiscal year.
(Net assets)
The net assets at the end of the current consolidated fiscal year were down 534 million yen from the end of the previous fiscal
year. This is mainly because “retained earnings” declined 555 million yen through the posting of a net loss.
(3) Cash Flow Overview for Current Term
The cash and cash equivalents (hereinafter referred to as “funds”) at the end of the current consolidated fiscal year stood at 971
million yen (1,075 million yen in the same period of the previous year).
The status of each cash flow and its factors are as described below.
(Cash flow from operating activities)
Through operating activities, funds increased 66 million yen (decreased 769 million yen in the same period of the previousyear). The main factors in increasing funds were an impairment loss of 190 million yen, a 428-million-yen decrease in notes andaccounts receivable - trade, and a 213-million-yen decrease in inventory assets. The main factors in decreasing funds were a net
loss before taxes and other adjustments of 397 million yen, a 220-million-yen decrease in accounts payable - trade, and apayment of income taxes of 190 million yen.
(Cash flow from investing activities)
Through investing activities, funds decreased 279 million yen (decreased 319 million yen in the same period of the previousyear). The main factor in decreasing funds were purchase of property, plant and equipment of 146 million yen and purchase ofintangible assets of 118 million yen.
(Cash flow from financing activities)
Through financing activities, funds increased 109 million yen (increased 1,135 million yen in the same period of the previousyear). The main factors in increasing funds were a net increase in short-term loans payable of 550 million yen and proceeds fromlong-term loans payable of 400 million yen. The factors in decreasing funds were repayments of long-term loans payable of 750
million yen f and dividends paid of 90 million yen.
(4) Future Outlook
The outlook for the economy remains uncertain, due to the global skyrocketing of prices of resources and the risk of exchange
rate fluctuations, although there is a sign of economic recovery as economic activities are being normalized after the easing ofrestrictions on activities for coping with COVID-19.
In this situation, our corporate group has formulated a new mid-term management plan (IK WAY to 2026) as a rolling plan, inorder to achieve a V-shaped recovery of revenues. In order to improve our business portfolio management to complete the midterm management plan, we will review the businesses in which we invest intensively and enhance product development andmarketing for products for co-op routes, which constitute our revenue base. In addition, we will promote the Korean cosmetics“ma:nyo,” “hince,” “KAHI,” “OLIVEYOUNG,” and “SKINFOOD” as priority products, for which we have established aposition as a general distributor in Japan. For sales channels via TV shopping programs, we will review and narrow down airtime
to improve media use efficiency.
Through these measures, we aim to make all business segments profitable and achieve a V-shaped recovery of consolidated
business performance.
The full-year consolidated earnings forecast for the next term calls for sales of 13,580 million yen, an operating income of 378
million yen, an ordinary income of 377 million yen, and a profit attributable to owners of parent of 135 million yen.

2. Basic Policy on Selection of Accounting Standards
Our corporate group has adopted Japanese GAAP as our accounting standard, considering the period comparability of theconsolidated financial statements and the comparability between companies.
Regarding the application for IFRS (International Financial Reporting Standards), we will take appropriate measures whileconsidering domestic and international situations.

- 3 -3. Consolidated Financial Statements and Major Notes(1) Consolidated Balance Sheet(Thousands of yen)
FY 2022(As of May 31, 2022)
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Merchandise and finished goods
Raw materials and supplies
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation
Buildings and structures, net
Land
Other
Accumulated depreciation
Other, net
Total property, plant and equipment
Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Investment securities
Long-term loans receivable
Deferred tax assets
Guarantee deposits
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets- 4 -FY 2023(As of May 31, 2023)

1,075,932
2,612,223
2,405,121
15,299445,800(1,239)6,553,139

971,9222,183,608
2,250,407
13,676309,328(841)
5,728,103

245,813(158,574)
87,23980,216
169,406(139,646)
29,760197,216

247,663(165,272)
82,39180,216
203,524(150,721)
52,803
215,41172,038136,115
208,153

117,314350,142
467,456

41,485
104,577
92,709144,839
47,368(11,2189
419,761
825,132
7,378,271

24,42887,477
113,328
127,660
35,419(10,535)
377,780
1,060,647
6,788,751

(Thousands of yen)
FY 2022(As of May 31, 2022)
Liabilities
Current liabilities
Accounts payable - trade
Short-term loans payable
Current portion of long-term loans payable
Accounts payable - other
Income taxes payable
Provision for bonuses
Provision for loss on business
Other
Total current liabilities
Non-current liabilities
Long-term borrowings
Net defined benefit liability
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders' equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Total shareholders' equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Total accumulated other comprehensive income
Subscription rights to shares
Total net assets
Total liabilities and net assets- 5 -FY 2023(As of May 31, 2023)

893,214800,000
692,777
720,741
115,846
33,53015,660248,135
3,519,906

672,377
1,350,000
653,296738,271
38,575
12,324
4,021
297,478
3,766,344

1,044,007
140,835
168,875
1,353,717
4,873,623

732,989
155,510
163,512
1,052,011
4,818,355

620,949
680,4121,401,804(233,023)
2,470,143

620,949
681,430
846,187(228,211)
1,920,355

1,165
(902)
263
34,2402,504,647
7,378,271－(2,344)(2,344)
52,384
1,970,395
6,788,751

(2) Consolidated Statement of Profit and Loss and Consolidated Statement of Comprehensive Income(Consolidated Statement of Profit and Loss)(Thousands of yen)
FY 2022(From June 1, 2021 to May
31, 2022)

FY 2023(From June 1, 2022 to May
31, 2023)

16,335,372
8,934,976
7,400,396
7,760,431(360,035)

14,179,066
8,228,197
5,950,868
6,175,745(224,877)

993
863
1,042
855
4,407
33,824
2,415
9,600
－
8,147
62,150

739
8,048
590
544
－
－
1,356
－
20,542
9,616
41,437

8,370－
15,6601,503
25,533(323,419)

10,229
4,232
6,303
990
21,757(205,196)

13,943－－
13,943－30,0006,471
36,471

21,997－
251,844
115,151
17,545406,538(716,014)
173,137
19,329192,467(908,481)(2,948)(905,533)－
9,999
190,381－
27,958228,339(397,064)
86,573(20,105)
66,468(463,533)－(463,533)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating loss
Non-operating income
Interest income
Dividend income
Commission income
House rent income
Subsidy income
Foreign exchange gains
Gain on sale of investment securities
Employee dispatch burden
Cooperation money income
Other
Total non-operating income
Non-operating expenses
Interest expenses
Store closure penalty
Provision for loss on business
Other
Total non-operating expenses
Ordinary loss
Extraordinary income
Reversal of provision for surcharge
Gain on transfer of trade marks
Gain on sale of shares of subsidiaries and associates
Total extraordinary income
Extraordinary losses
Loss on retirement of non-current assets
Loss on valuation of investment securities
Impairment losses
The cost of customer compensation, etc.
Loss on litigation
Total extraordinary losses
Loss before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
Loss
Loss attributable to non-controlling interests
Loss attributable to owners of parent- 6 -(Consolidated Statement of Comprehensive Income)(Thousands of yen)
FY 2022(From June 1, 2021 to May
31, 2022)

FY 2023(From June 1, 2022 to May
31, 2023)(908,481)(463,533)(3,618)(87)(3,706)(912,187)(1,165)(1,442)(2,608)(466,1419(909,610)(466,141)(2,577)－

Loss
Other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Total other comprehensive income
Comprehensive income(Comprehensive income attributable to)Comprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests- 7 -(3) Consolidated Statement of Change in Shareholders’ Equity
Previous consolidated fiscal year (June 1, 2021 – May 31, 2022)(Thousands of yen)
Shareholders' equity

Capital stock
Balance at beginning of period

Capital surplus

620,949

Retained earnings

Treasury shares

Total shareholders'equity2,400,412(156,964)

3,539,242

674,845

Changes during period
Dividends of surplus(94,085)(94,085)

Loss attributable to owners ofparent(905,533)(905,533)

Purchase of treasury shares
Disposal of treasury shares

3,567

Capital increase of
consolidated subsidiaries

2,000(80,087)(80,087)

4,028

7,596
2,000

Adjustment for change inscope of consolidation

1,010

1,010

Net changes in items otherthan shareholders' equity
-

5,567

(998,607)(76,059)(1,069,099)

620,949

680,4121,401,804(233,023)

2,470,143

Total changes during period
Balance at end of period

Accumulated other comprehensive income

Balance at beginning of period

Valuationdifference on
available-for-salesecurities

Foreign currencytranslation
adjustment

Total accumulated
othercomprehensive
incomeShare acquisitionrightsNon-controllinginterests

Total net assets

4,784

(444)

4,340

11,315

2,577

3,557,475

Changes during period
Dividends of surplus(94,085)

Loss attributable to owners ofparent(905,533)

Purchase of treasury shares(80,087)

Disposal of treasury shares

7,596

Capital increase of
consolidated subsidiaries

2,000

Adjustment for change inscope of consolidation

1,010

Net changes in items otherthan shareholders' equity(3,618)(457)(4,076)22,925(2,577)

16,270Total changes during period(3,618)(457)(4,076)22,925(2,577)(1,052,828)

Balance at end of period

1,165

(902)

263

34,240-2,504,647- 8 -Current consolidated fiscal year (June 1, 2022 – May 31, 2023)(Thousands of yen)
Shareholders' equity

Capital stock
Balance at beginning of period

Capital surplus

620,949

Retained earnings

Treasury shares

Total shareholders'equity1,401,804(233,023)

2,470,143

680,412

Changes during period
Dividends of surplus(92,083)(92,083)

Loss attributable to owners ofparent(463,533)(463,533)

1,017

Disposal of treasury shares

4,812

5,829

Net changes in items otherthan shareholders' equity
Total changes during period
Balance at end of period

－

1,017

(555,617)

4,812(549,787)

620,949

681,430

846,187(228,211)

1,920,355

Accumulated other comprehensive income

Balance at beginning of period

Valuationdifference on
available-for-salesecurities

Foreign currencytranslation
adjustment

Total accumulated
othercomprehensive
incomeShare acquisitionrightsTotal net assets

1,165

(902)

263

34,2402,504,647

Changes during period
Dividends of surplus(92,083)

Loss attributable to owners ofparent(463,533)
5,829

Disposal of treasury shares
Net changes in items other thanshareholders' equity(1,165)(1,442)(2,608)18,143

15,535

Total changes during period(1,165)(1,442)(2,608)18,143(534,252)－(2,344)(2,344)

52,384

1,970,395

Balance at end of period- 9 -(4) Consolidated Statement of Cash Flows(Thousands of yen)
FY 2022(From June 1, 2021 to May
31, 2022)

FY 2023(From June 1, 2022 to May
31, 2023)(716,014)
253,561
251,844
12,732
28,372400(468)(2,438)15,660(397,064)
47,241
190,381
35,62526,886(1,081)(21,206)
14,675(11,639)(17,447)－(13,943)(2,415)(1,857)8,370(28,985)(4,407)－－－21,997－201,748(472,774)(134,935)(105,043)(28,304)
105,530
166,326(33,700)(496,192)
1,837(8,699)17,132－(33,320)(250,248)－(769,489)－(1,356)(8,787)
10,229(1,306)－(20,542)(30,000)(6,471)－
9,999
428,615
213,684(220,837)
80,1603,010(182,544)
49,757(21,050)
186,381
8,786(10,392)－
20,542－(190,424)
51,52866,421(256,489)(38,126)(10,000)
29,216(62,000)－(1,350)24,118(16,972)
11,822－－(319,782)(146,002)(118,075)－
3,204－
10,000－
16,250(4,252)
19,09930,000(89,529)(279,305)

Cash flows from operating activities
Loss before income taxes
Depreciation
Impairment losses
Amortization of goodwill
Share-based payment expenses
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses
Increase (decrease) in retirement benefit liability
Increase (decrease) in provision for loss on business
Increase (decrease) in provision for the cost of customer
compensation, etc.
Increase (decrease) in provision for surcharge
Loss (gain) on sale of investment securities
Interest and dividend income
Interest expenses
Foreign exchange losses (gains)
Subsidy income
Cooperation money income
Gain on transfer of trade marks
Loss (gain) on sale of shares of subsidiaries and associates
Loss on retirement of non-current assets
Gain on reversal of loss on valuation of investment securities
Decrease (increase) in notes and accounts receivable - trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable - trade
Decrease (increase) in consumption taxes refund receivable
Increase (decrease) in accrued consumption taxes
Increase (decrease) in accounts payable – other
Decrease (increase) in other assets
Increase (decrease) in other liabilities
SubtotalInterest and dividends received
Interest paid
Subsidies received
Cooperation money received
Surcharge paid
Income taxes paid
Income taxes refund
Cash flows from operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sale of investment securities
Purchase of shares of subsidiaries and associates
Proceeds from sale of shares of subsidiaries and associates
Loan advances
Proceeds from collection of loans receivable
Payments of guarantee deposits
Proceeds from refund of guarantee deposits
Proceeds from transfer of trade marks
Payments for acquisition of businesses
Cash flows from investing activities- 10 -

(Thousands of yen)
FY 2022(From June 1, 2021 to May
31, 2022)

FY 2023(From June 1, 2022 to May
31, 2023)

800,000
1,100,000(671,655)(92,781)
1,135,563
28,89875,189967,145

550,000
400,000(750,499)(90,490)109,010(135)(104,010)
1,075,932

33,597－

1,075,932

971,922

Cash flows from financing activities
Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable
Repayments of long-term loans payable
Dividends paid
Cash flows from financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Increase in cash and cash equivalents resulting from merger
with unconsolidated subsidiaries
Cash and cash equivalents at end of period- 11 -

(5) Notes to Consolidated Financial Statements(Notes on Going Concern Assumption)
There is no related information.

- 12 -

(Segment Information)[Segment information]
1.

Outline of segments to be reported
The financial information on each segment to be reported can be obtained and is regularly reviewed, in order for the boardof directors to determine the allocation of managerial resources and evaluate business performance.
Direct Marketing Business: Retail business, such as the sale of cosmetic products of SKINFOOD via TV shopping
programs, online stores, and real stores
Sales Marketing Business: Wholesale to consumers' co-operative, mail-order companies, retail stores, overseas partnercompanies, etc.
IT Solution Business: Sale of chat systems and voice call recording systems, etc.

2.

Methods for calculating sales, profit/loss, assets, and other items in each segment
The accounting for each business segment follows the accounting standards adopted for consolidated financial statements.
The profit of each segment means an operating income.
The internal sales or transfer between segments is based on prevailing market prices.
(Items regarding changes in the segments to be reported)
As our corporate group shifted to a holding company structure on December 1, 2022, it became possible to estimate eachsegment’s share of group-wide expenses and assets, which were difficult to divide into segments and included the Sales
Marketing Business. Accordingly, the method for calculating the profit or loss in each segment was changed, and a new
method has been used from the third quarter of FY 2023.
Regarding the profit or loss in each segment in the previous fiscal year, it is difficult to apply the new method after theshift to the holding company structure, so the calculation method before the shift was applied.
Since the shift to the holding company structure, we have been disclosing the assets allocated to respective segments.
The assets in each segment in the previous fiscal year, which were calculated with the method used in said year, areomitted, because assets were not allocated to respective segments before the shift to the holding company structure.

3. Information on Sales, Profits or Losses, Assets, Liabilities, and Other Items for each Segment
The previous consolidated fiscal year (June 1, 2021 – May 31, 2022)(Thousands of yen)
Reporting segment

Consolidated
Adjustment
Balance sheet
Amount*1, *2
amount*3

DirectMarketingBusiness

Sales
MarketingBusiness

IT Solutions
Business

5,184,804

10,699,680

450,887

16,335,372－

16,335,372

Intersegment sales or transferred
amount

660,706

201,506

1,910

864,123(864,123)

－

Total

5,845,511

10,901,187

452,797

17,199,496(864,123)

16,335,372

Segment income (loss)(805,843)

395,322

29,822(380,697)

20,661(360,035)

Segment assets

2,253,726

6,203,141

223,683

8,680,550(1,302,279)

7,378,271

192,615

57,822

3,260

253,699(138)

253,561－

12,000732

12,732－

12,732

253,523

106,499

5,587

365,609－

365,609

Total

Net sales
Sales to external customers

Other items
Depreciation
Amortization of goodwill
Increase in property, plant, andequipment and intangible assets

Notes
1. The adjustment of segment profit/loss (20,661) thousand yen is attributable to the removal from consolidated results.
2. The adjustment of segment assets (-1,302,279) thousand yen is the eliminated amount of receivables and payables between
segments.
3. Segment profit/loss was adjusted with the operating loss in the consolidated profit-and-loss statement.

- 13 -

The current consolidated fiscal year (June 1, 2022 – May 31, 2023)(Thousands of yen)
Reporting segment
Adjustment
Amount*1

Consolidated
Balance sheet
amount*2

14,177,746

1,320

14,179,066－

978,724(978,724)－

9,968,411

518,766

15,156,470(977,404)

14,179,066(327,724)

355,148

13,27540,699(265,577)(224,877)

1,612,261

3,888,581

177,496

5,678,339

1,110,412

6,788,751

213

24,353

2,910

27,476

19,76447,241

Amortization of goodwill

14,831

12,0008,794

35,625－35,625

Increase in property, plant, andequipment and intangible assets

266,685

25,7437,870

300,299244,753545,053

DirectMarketingBusiness

Sales
MarketingBusiness

IT Solutions
Business

4,007,151

9,651,827

518,766

Intersegment sales or transferred
amount662,140

316,584

Total

4,669,292

Segment income (loss)
Segment assets

Total

Net sales
Sales to external customers

Other items
DepreciationNotes
1. (1) The adjustment of segment profit/loss (-265,577) thousand yen is composed of mainly the group-wide expense for operating
the holding company, which is not allocated to business segments.
(2) The adjustment of segment assets (1,110,412) thousand yen includes the deletion of inter-segment transactions (-3,507,893)
thousand yen and group-wide assets (4,618,305) thousand yen, which are not allocated to business segments.
(3) The adjustment of depreciation (19,764) thousand yen is composed of mainly the depreciation of group-wide assets, which
are not allocated to business segments.
(4) The adjustment of the increases in tangible and intangible fixed assets (244,753) thousand yen is the capital investment of
the holding company not attributable to business segments.
2. Segment profit/loss was adjusted with the operating loss in the consolidated profit-and-loss statement.
【Related information】
The previous consolidated fiscal year (June 1, 2021 – May 31, 2022)
1. Information on each Product and each Service
Omitted because this information has been disclosed in the section of segment information.
2. Information on each Region(1) Net sales
Omitted because sales to external customers in Japan account for more than 90% of net sales in the consolidated statements ofincome.
(2) Property, plant and equipment
Omitted because our company has no property, plant and equipment located outside Japan.
3. Information on each Major Customer
Omitted because there are no customers that account for 10% or more of net sales in the consolidated statements of income.
The current consolidated fiscal year (June 1, 2022 – May 31, 2023)
1. Information on each Product and each Service
Omitted because this information has been disclosed in the section of segment information.
2. Information on each Region(1) Net sales
Omitted because sales to external customers in Japan account for more than 90% of net sales in the consolidated statements of- 14 -

income.
(2) Property, plant and equipment
Omitted because our company has no property, plant and equipment located outside Japan.
3. Information on each Major Customer
Omitted because there are no customers that account for 10% or more of net sales in the consolidated statements of income.
[Information on impairment loss on non-current assets in each segment]
The previous consolidated fiscal year (June 1, 2021 – May 31, 2022)(Thousands of yen)

Impairment losses

Direct Marketing
Business

Sales Marketing
Business

251,844－

IT Solutions
Business

Consolidated/
eliminated
－

－

Total
251,844

The current consolidated fiscal year (June 1, 2022 – May 31, 2023)(Thousands of yen)

Impairment losses

Direct Marketing
Business

Sales Marketing
Business

190,381－

IT Solutions
Business

Consolidated/
eliminated
－

－

Total
190,381[Information on amortization of goodwill and unamortized balance in each segment]
The previous consolidated fiscal year (June 1, 2021 – May 31, 2022)(Thousands of yen)
Direct Marketing
Business

Sales Marketing
Business

IT Solutions
Business

Consolidated/
eliminatedReimbursement for thecurrent period－

12,000732－

12,732

Balance at end of period－

31,00041,038－72,038Total

The current consolidated fiscal year (June 1, 2022 – May 31, 2023)(Thousands of yen)
Direct Marketing
Business

Sales Marketing
Business

IT Solutions
Business

Reimbursement for thecurrent period

14,831

12,0008,794－

35,625

Balance at end of period

66,06919,00032,244－

117,314[Information on the gain on negative goodwill in each segment]
The previous consolidated fiscal year (June 1, 2021 – May 31, 2022)
There is no related information.
The current consolidated fiscal year (June 1, 2022 – May 31, 2023)
There is no related information.

- 15 -

Consolidated/
eliminated

Total

(Per-share Information)
FY 2022(From June 1, 2021 to May 31,
2022)

FY 2023(From June 1, 2022 to May 31,
2023)

Net assets per share (yen)321.94249.52

Profit (loss) per share (yen)(115.95)(60.34)－－

Diluted profit per share (yen)(Notes) 1. Diluted profit per share is not presented because a net loss per share was posted for the period despite the existence ofdiluted shares.
2. The basis for calculation of net income per share and diluted net income per share is as follows
FY 2022(From June 1, 2021 to May 31,
2022)

FY 2023(From June 1, 2022 to May 31,
2023)(1) Loss attributable to owners of parent
Loss attributable to owners of parent on common stock(905,533)(463,533)－－(905,533)(463,533)

7,809,821

7,682,381－－

Increase in common stock (shares)－－(of which subscription rights to shares (shares))

(－)

(－)

－

－

(thousand yen)Amount not attributable to common shareholders (thousand
yen)
Loss attributable to owners of parent on common stock(thousand yen)
The average number of stocks outstanding (shares)(2) Diluted profit per share
Adjustment on the profit attributable to owners of parent(thousand yen)

Residual shares not included in the calculation of diluted
profit per share because they have no dilutive effect(Important Subsequent Events)
There is no related information.

- 16 -