Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending June 30, 2021
(Nine Months Ended March 31, 2021)[Japanese GAAP]
April 23, 2021

Company name: HOPE, INC.
Stock code:
6195
Representative: Takayasu Tokitsu, CEOContact:
Kensuke Ohshima, CFO
Scheduled date of filing of Quarterly Report:
Scheduled date of payment of dividend:
Preparation of supplementary materials for quarterly financial results:
Holding of quarterly financial results meeting:

Listing: TSE-Mothers/FSE Q-Board
URL: https://www.zaigenkakuho.com/
Tel: +81-(0)92-716-1404
May 10, 2021
Yes
None

(All amounts are rounded down to the nearest million yen)

1. Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending June 30, 2021
(July 1, 2020 to March 31, 2021)(1) Consolidated results of operations(Percentages represent year-on-year changes)
Net sales

Operating profit

Millions of yen%

Nine months ended Mar. 31, 2021
21,810Nine months ended Mar. 31, 2020
Note: Comprehensive income (millions of yen)

Millions of yen

Profit attributable toowners of parent

Ordinary profit%

Millions of yen%

Millions of yen%(7,313)--(7,276)(7,295)
Nine months ended Mar. 31, 2021: (7,312) (-%)
Nine months ended Mar. 31, 2020:- (-%)Net income per share

Diluted net income
per share

Yen

Yen

Nine months ended Mar. 31, 2021
(1,196.57)
Nine months ended Mar. 31, 2020
Notes: 1. Diluted net income per share is not presented because net loss was posted although there were outstanding dilutive
shares.
2. Year-on-year changes and figures for the nine months ended March 31, 2020 are not presented because HOPE started
preparing consolidated financial statements from the second quarter of the fiscal year ending June 30, 2021.

(2) Consolidated financial position
Total assets

Net assets

Millions of yen

Equity ratio

Millions of yen%

As of Mar. 31, 2021
7,352
(4,514)(61.7)
As of Jun. 30, 2020
Reference: Shareholders’ equity (millions of yen)
As of Mar. 31, 2021: (4,533)
As of Jun. 30, 2020: Note: Figures as of June 30, 2020 are not presented because HOPE started preparing consolidated financial statements from thesecond quarter of the fiscal year ending June 30, 2021.

2. Dividends
1Q-endDividend per share
3Q-end2Q-endYen

Yen

Year-end

Yen

Total
Yen

Yen

Fiscal year ended Jun. 30, 2020
0.00
15.00
15.00
Fiscal year ending Jun. 30, 2021
0.00
Fiscal year ending Jun. 30, 2021
(forecast)
Notes: 1. Revisions to the most recently announced dividend forecast: None
2. Breakdown of year-end dividend for the fiscal year ended June 30, 2020: Commemorative dividend of 15.00 yen
3. The dividend forecast for the fiscal year ending June 30, 2021 is to be determined.

3. Consolidated Earnings Forecast for the Fiscal Year Ending June 30, 2021 (July 1, 2020 to June 30, 2021)
Net sales
Millions of yen

Operating profit%

Millions of yen(Percentages represent year-on-year changes)
Profit attributable to
Net income perowners of parent
share

Ordinary profit%

Millions of yen%

Millions of yen%

Yen

Full year
34,084- (5,914) to (5,038)- (5,937) to (5,061)- (5,964) to (5,087)- (969.19) to (826.80)
Notes: 1. Revisions to the most recently announced earnings forecast: None
2. Year-on-year changes are not presented because HOPE started preparing consolidated financial statements from thesecond quarter of the fiscal year ending June 30, 2021.

* Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in chan ges inscope of consolidation): Yes
Newly added: 1 (HOPE ENERGY, INC.)

Excluded: -(2) Application of special accounting methods for presenting quarterly consolidated financial statements: None
(3) Changes in accounting policies and accounting estimates, and restatements
1) Changes in accounting policies due to revisions in accounting standards, others: None
2) Changes in accounting policies other than 1) above: None
3) Changes in accounting estimates: None
4) Restatements: None

(4) Number of shares outstanding (common shares)
1) Number of outstanding shares as of the end of the period (including treasury shares)

As of Mar. 31, 2021:

6,302,800 shares

As of Jun. 30, 2020:

6,002,800 shares

As of Jun. 30, 2020:

24,960 shares

2) Number of treasury shares as of the end of the period

As of Mar. 31, 2021:

24,981 shares

3) Average number of outstanding shares during the period
Nine months ended Mar. 31, 2021:

6,112,400 shares

Nine months ended Mar. 31, 2020:

5,576,001 shares* The current quarterly financial report is not subject to quarterly review by certified public accountants or auditing firms.
* Explanation of appropriate use of earnings forecasts, and other special items- Forecasts of future performance in these materials are based on assumptions judged to be valid and information available tothe management of HOPE at the time these materials were prepared. Actual results of operations may differ from forecasts
due to uncertainty involving these judgments and assumptions or to changes in business operations and market conditions.
HOPE does not guarantee the certainty of any forward-looking statements.
- Please refer to the section “1. Qualitative Information on Quarterly Consolidated Financial Performance, (3) Explanation ofConsolidated Earnings Forecast and Other Forward-looking Statements” on page 4 of the attachments regarding
preconditions or other related matters for the forecasts.

HOPE, INC. (6195) Consolidated Financial Results for the Third Quarter of FY6/21

Contents of Attachments
1. Qualitative Information on Quarterly Consolidated Financial Performance2(1) Explanation of Results of Operations

2(2) Explanation of Financial Position

4(3) Explanation of Consolidated Earnings Forecast and Other Forward-looking Statements

4

2. Quarterly Consolidated Financial Statements and Notes

5(1) Quarterly Consolidated Balance Sheet

5(2) Quarterly Consolidated Statements of Income and Comprehensive Income

6

Quarterly Consolidated Statement of Income

6

For the Nine-month Period

6

Quarterly Consolidated Statement of Comprehensive Income

7

For the Nine-month Period

7(3) Notes to Quarterly Consolidated Financial Statements

8

Going Concern Assumption

8

Significant Changes in Shareholders’ Equity

8

Additional Information

9

Segment Information

10

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HOPE, INC. (6195) Consolidated Financial Results for the Third Quarter of FY6/21

1. Qualitative Information on Quarterly Consolidated Financial Performance(1) Explanation of Results of Operations
The COVID-19 pandemic severely restricted economic activity in Japan and other countries in the first ninemonths of the fiscal year ending June 30, 2021 and the outlook for the Japanese economy remains unclear.
All business activities are based on the HOPE corporate philosophy of “providing new forms of value to citizens
through local governments and aiming for more growth of our business and our people.” Since HOPE’s
establishment, cumulative additional local government revenue generated by the advertising business is about
8,440 million yen as of the end of the third quarter and the energy business has reduced expenses of local
governments by about 32,000 million yen (estimate of saving during the entire length of all contrac ts received
since the energy business started). These savings have made a significant contribution to local governments
throughout Japan as well as the residents of these communities.
On August 11, 2020, HOPE announced HOPE NEXT 3, a three-year medium-term management plan beginning in
the current fiscal year. To accomplish the goals of this plan, many business activities with the aim of
medium-term growth are under way. Between the middle of December 2020 and late January 2021, the price ofelectricity on the Japan Electric Power Exchange (JEPX) was very high. This big increase in the cost ofelectricity had an enormous negative impact on the performance of the energy business, which is HOPE’s largest
business segment. A number of organizations made announcements concerning the probable causes of this sharp
increase in the price of electricity. According to the Ministry of Economy, Trade and Industry, the primary causes
are a big increase in demand for electricity due to several cold waves and limitations on the output of liquefied
natural gas (LNG) power plants due to a decline in the inventory of LNG, which was partially the result of
problems involving gas liquefaction plants. According to a Comprehensive Renewable Energy Regulations
Inspection Task Force, the problem began with an unusually magnitude and length of restrictions on LNG andpetroleum, which account for a large share of electricity generated in Japan. This situation created a big gap at
JEPX between the volume of bids to buy and sell electricity, resulting in an unprecedented surge in the price ofelectricity.
Reference: “Examination of Electricity Supply and Demand and the Wholesale Electricity Market during the Past
Winter” (March 26, 2021)
Agency for Natural Resources and Energy, the Ministry of Economy, Trade and Industry
https://www.meti.go.jp/shingikai/enecho/denryoku_gas/denryoku_gas/pdf/032_07_00.pdf
Reference: “Opinion concerning Problems concerning the Output Capacity Market, Grid Restrictions and the
Rapid Increase in Spot Prices” (March 29, 2021)
Comprehensive Renewable Energy Regulations Inspection Task Force, Cabinet Officehttps://www8.cao.go.jp/kisei-kaikaku/kisei/conference/energy/20210329/210329energy09.pdf
The high cost of wholesale electricity significantly raised the cost of e lectricity purchased by HOPE. As a result,January 2021 imbalance fees (see note) were about 6,500 million yen, including taxes, and there was a large
operating loss in the third quarter. We are confident that we can continue to maintain sound relationship s withfinancial institutions, primarily our main banks, in order to continue receiving assistance. We plan to continue
examining many ways to procure funds and will make an announcement promptly in accordance with disclosurerules if there is information that requires disclosure.
HOPE has several core strengths. One is the expertise to reproduce new businesses in a broad range of fields
based on a large number of relationships with local governments established over many years of business
operations and legal frameworks consisting of new and amended laws and regulations. Another is the expertise toeasily reproduce business expansion in the local government business domain. Our objective is to use these twophases for growth of the three existing businesses and creation of new businesses. Making advertising a
profit-generating business is one goal. We are continuing to improve profitability by making changes to achieve
the proper size of this business and working on reducing over the next several years the h igh percentage of fiscal
year earnings of this business in the fourth quarter. These steps are aimed at making this business more cost
efficient and increasing the rates we charge for advertising services. In the energy business, which we position asa driver of growth, our goals are more growth in the scale of this business and consistent profitability. Our shortand medium-term strategy has two elements. First is to continue existing measures for growth centered on using

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HOPE, INC. (6195) Consolidated Financial Results for the Third Quarter of FY6/21

competitive bids to capture new contracts. Second is to reduce vulnerability to the price volatility risk involving
the cost of electricity we purchase. This involves achieving the most suitable combination of fixed -priceprocurement using one-to-one transactions and the purchase of electricity at current market prices on the JEPX.
However, the sharp increase in the price of electricity on the JEPX forced us to alter this strategy. In the media
business, the market for promotions targeting local governments still has much potential for more public-private
sector collaboration and measures to become more competitive. Our goal is to position ourselves at the very topof upstream information flows in order to capitalize on opportunities involving this potential. This business is
upgrading content, strengthening information dissemination capabilities and reinforcing the ability to keep up
with the latest information. The objective is firmly establishing the value of the Jichitai Works brand in order tostimulate more growth of the market for promotions targeting local governments. In addition, we believe thatthese activities will make possible even more public-private sector collaboration based on government
information circulation centered on HOPE as well as the use of local government informati on databases forstrengthening, supporting and creating business activities. We will use many activities to accomplish these goals.
These measures will include upgrading and expanding our content production capabilities , increasing B-to-G
marketing activities and making extensive use of Jichitai Works HA×SH, which is an internet platform forsupporting public-private sector collaboration.
In the first nine months of the fiscal year ending June 30, 2021, net sales were 21,810 million yen. The operating
loss was 7,276 million yen, the ordinary loss was 7,295 million yen, and there was a loss attributable to owners ofparent of 7,313 million yen.
Note: An imbalance fee is paid when a company selling electricity is unable to supply the required amount ofelectricity over any 30-minute period and must purchase electricity from a utility to cover the shortfall.
This fee is included in the cost of sales of the energy business.
Business segment performance was as follows.
1) Advertising BusinessIn this business, the Smart Resource service purchases a variety of advertising space from local governments bysubmitting competitive bids and then sells this space to companies. The Machilet service jointly produces withlocal governments publications for residents at no cost and sells advertising space in these publications tocompanies. During the first nine months, there were measures to achieve the proper size of the Machilet service.
Machilet, which is the primary medium of the advertising business, is operating in all areas of Japan while
concentrating on six themes: marriage, raising children, senior nursing care, measures involving vacant houses,
end-of-life messages, and condolence messages. There are also many activities for creating new media. In thethird quarter, through a joint program with Ota ward in Tokyo, we issued in February 2021 Japan’s first Residence
Assistance Conference Guide. The goal of this publication is communities where apartment tenants, apartment
owners and real estate companies can coexist in a mutually beneficial manner.
Segment sales were 1,030 million yen and segment profit was 82 million yen.
2) Energy BusinessThis business, which uses the Genewat brand for the retail of electricity, has the goal of reducing the expenses of
local governments by providing new forms of value based on the concept of electricity as a generic product. On
October 22, 2020, Hope Energy, Inc. was established as a wholly owned subsidiary of HOPE. Preparations havebeen largely completed for the transfer of part of the energy business to Hope Energy and this subsidiary was able
to start business operations on April 1, 2021. As was explained earlier, the sharp increase in the cost ofpurchasing electricity due to the higher cost of electricity on the JEPX had a signi ficant negative impact on theenergy business. In February and March, when this spike in the cost of electricity had largely ended, weestablished measures for the stability of energy business earnings, stronger governance and other revisions to theframework for operating this business. In addition, spring is customarily a season when JPEX prices are stable.
Consequently, the energy business conducted business as usual from January to March. Furthermore, in part
because there is normally a large number of electricity contracts submitted for bids in the third quarter of every
year, the energy business added a record-high 426 new electricity supply contracts during the third quarter.

3

HOPE, INC. (6195) Consolidated Financial Results for the Third Quarter of FY6/21

Segment sales were 20,660 million yen and the segment loss was 7,122 million yen.
3) Media BusinessOne element of this business is extensive B-to-G marketing activities aimed at matching the needs of local
governments and companies. These activities leverages our relationships with local governments. This businessalso includes the Jichitai Works magazine, which contains ideas, examples of local government innovations andother useful information for government employees. In the third quarter, we started the Jichitai Works
Ambassador program in February for the purpose of strengthening the Jichitai Works brand. We selected as thefirst ambassador Yuto Yoshida, a former mayor of the city of Yokosuka. On March 30, we issued a Government
Employee Edition of Jichitai Works that contains information for the employees of local governme nts.
Furthermore, we greatly increased the number of these publications from the usual 70,000 to 200,000 in order togive this special edition exposure to a large number of government employees. Strengthening activities to provide
information for employees is speeding up progress involving our government employee platform concept.
Segment sales were 117 million yen and segment profit was 13 million yen.
4) Other businesses
Other businesses include Machiiro, Jichitai Works HA×SH and other services that are not part of the reportablesegments. In prior years, Jichitai Works HA×SH was included in the media business. Beginning with the current
fiscal year, this activity is included in this category because Jichitai Works HA×SH is still in the investment
phase.
Segment sales were 2 million yen and the segment loss was 25 million yen.
(2) Explanation of Financial Position
AssetsTotal assets amounted to 7,352 million yen at the end of the third quarter of the current fiscal year. Current assets
amounted to 6,752 million yen. Major items are cash and deposits of 1,018 million yen, accounts receivable-tradeof 4,599 million yen and other under current assets of 859 million yen. Non-current assets amounted to 599
million yen. Major items are intangible assets of 73 million yen and leasehold and guarantee deposits of 476
million yen.
Liabilities
Liabilities totaled 11,866 million yen. Current liabilities amounted to 11,212 million yen. Major items areaccounts payable-trade of 9,729 million yen and short-term borrowings of 950 million yen. Non-current liabilities
amounted to 654 million yen. Major items are bonds payable of 100 million yen and long-term borrowings of 554
million yen.
Net assets
At the end of the third quarter, there were negative net assets of 4,514 million yen because of loss attributable toowners of parent of 7,313 million yen in the first nine months of the fiscal year. Shareholders’ equity was
negative 4,533 million yen and major items include share capital of 1,125 million yen, capital surplus of 1,079
million yen and retained earnings of negative 6,668 million yen.
(3) Explanation of Consolidated Earnings Forecast and Other Forward-looking Statements
There are no revisions to the forecast for the current fiscal year that was announced in the pr ess release
concerning revision of consolidated forecasts (Japanese version only), which was announced on April 19, 2021.

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HOPE, INC. (6195) Consolidated Financial Results for the Third Quarter of FY6/21

2. Quarterly Consolidated Financial Statements and Notes(1) Quarterly Consolidated Balance Sheet(Thousands of yen)
Third quarter of FY6/21(As of Mar. 31, 2021)
AssetsCurrent assets
Cash and deposits

1,018,085

Accounts receivable-trade

4,599,455
268,660

Merchandise and finished goods

8,686Work in process

179

Supplies

859,583

Other(1,812)

Allowance for doubtful accounts

6,752,839

Total current assets
Non-current assets
Property, plant and equipment

16,307

Intangible assets

73,804

Investments and other assets
Leasehold and guarantee deposits

476,331

Other

44,456

Allowance for doubtful accounts(11,521)

Total investments and other assets

509,266
599,378

Total non-current assets

7,352,218

Total assets
Liabilities
Current liabilities
Accounts payable-trade

9,729,499

Short-term borrowings

950,000

Current portion of long-term borrowings

386,952

Advances received

56,12390,017

Other

11,212,592

Total current liabilities
Non-current liabilities
Bonds payable

100,000

Long-term borrowings

554,396654,396

Total non-current liabilities

11,866,988

Total liabilities
Net assets
Shareholders’ equity
Share capital

1,125,712

Capital surplus

1,079,512

Retained earnings(6,668,143)

Treasury shares(70,902)

Total shareholders’ equity(4,533,821)

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

(74)
(74)
19,126

Share acquisition rights(4,514,769)

Total net assets

7,352,218

Total liabilities and net assets

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HOPE, INC. (6195) Consolidated Financial Results for the Third Quarter of FY6/21(2) Quarterly Consolidated Statements of Income and Comprehensive Income
Quarterly Consolidated Statement of Income(For the Nine-month Period)(Thousands of yen)First nine months of FY6/21(Jul. 1, 2020 – Mar. 31, 2021)
21,810,472

Net sales
Cost of sales

28,358,013

Gross loss

(6,547,541)
729,057

Selling, general and administrative expenses(7,276,599)

Operating loss
Non-operating income

22Interest income
Dividend income

5

Subsidy income

1,451

Penalty income

3,719
275

Other

5,474

Total non-operating income
Non-operating expenses

6,796Interest expenses
Commission expenses

2,072

Share issuance costs

13,165

Other

2,762

Total non-operating expenses

24,797

Ordinary loss

(7,295,921)

Loss before income taxes(7,295,921)

Income taxes-current

19,965

Income taxes-deferred(1,983)

Total income taxes

17,981Loss(7,313,903)

Loss attributable to owners of parent(7,313,903)

6

HOPE, INC. (6195) Consolidated Financial Results for the Third Quarter of FY6/21

Quarterly Consolidated Statement of Comprehensive Income(For the Nine-month Period)(Thousands of yen)First nine months of FY6/21(Jul. 1, 2020 – Mar. 31, 2021)(7,313,903)

Loss
Other comprehensive income

1,814Valuation difference on available-for-sale securities

1,814

Total other comprehensive income(7,312,088)

Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners ofparentComprehensive income attributable tonon-controlling interests(7,312,088)-

7

HOPE, INC. (6195) Consolidated Financial Results for the Third Quarter of FY6/21(3) Notes to Quarterly Consolidated Financial Statements
Going Concern Assumption
There are reasons for significant doubts concerning the going concern assumption due to consistently negative
cash flows in prior years. In addition, due to a very large increase in the JEPX price of electricity between the
middle of December 2020 and late January 2021, there was a 7,276 million yen operating loss, 7,295 million yen
ordinary loss and 7,313 million yen loss attributable to owners of parent in the first nine months of the fiscal year.
Furthermore, net assets were negative 4,514 million yen at the end of the third quarter.
HOPE, which is a company that prepares quarterly consolidated financial statements, is taking the foll owing
actions to end these problems.
1. Stabilize earnings of business operations(1) Management of risk involving volatility of market prices
The HOPE Group has no electricity generation facilities and therefore purchases most of the electricity sold to i ts
customers by using the JEPX. As a result, this business is vulnerable to changes in the cost of electricity. Many
actions have been taken in order to reduce exposure to this price volatility risk. Major initiatives include
establishing new risk management policies and adjusting the amount of electricity purchased by using the JEPX
and one-to-one transactions for each area and season.
(2) Payment in installments of the January 2021 imbalance fees associated with the insufficient supply ofelectricity
On January 29, 2021, the Ministry of Economy, Trade and Industry announced that companies meeting certain
requirements will be allowed to pay January 2021 imbalance fees in equal installments over a period of up to fivemonths. (On March 19, 2021, the ministry increased the maximum number of these installments from five tonine.) HOPE applied for the use of this installment payment program and, after receiving permission from every
electricity distribution company involved, made the first of nine equal installm ent payments in April 2021.
2. Stabilize cash flows(1) Financial covenants
HOPE continues to hold discussions with financial institutions in order to prevent the exercise of the acceleration
clause, which would require the immediate repayment of all applicable debt, due to HOPE’s inability to continue
to fulfill the obligations of its debt covenants.
(2) Procurement of funds
HOPE is maintaining sound relationships with financial institutions, primarily its main banks, and management
believes these institutions will continue to provide assistance. However, we are also continuing to consider manymethods for procuring funds.
The goal of these actions is the stabilization of the earnings of business operations and of cash flows. However,
we are only at the beginning of these actions. Moreover, there is a limit to the degree to which we can reduce ourvulnerability to the volatility of the price of electricity. Consequently, there are significant uncertainties
concerning the going concern assumption.
The going concern assumption was used as the basis for the quarterly consolidated financial statements and thesestatements do not reflect the significant uncertainties concerning this assumption.
Significant Changes in Shareholders’ Equity
Between November 11, 2020 and December 11, 2020, Mizuho Securities Co., Ltd. purchased share acquisitionrights issued by HOPE and sold through a third-party allotment. In the first half, share capital and capital surplus
increased by 810 million yen each. As a result, share capital was 1,125 million yen and capital surplus was 1,079
million yen at the end of the second quarter.
In the first nine months, there was a loss attributable to owners of parent of 7,313 million yen because of theenormous negative impact of the sharp increase in the JEPX price of electricity. As a result, net assets were
negative 4,514 million yen at the end of the third quarter.

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HOPE, INC. (6195) Consolidated Financial Results for the Third Quarter of FY6/21

Additional Information(Significant Accounting Policies for the Preparation of Quarterly Consolidated Financial Statements)
HOPE started preparing quarterly consolidated financial statements from the second quarter of the fiscal year
ending June 30, 2021. Basis of preparation of the quarterly consolidated financial statements is as follows.
1. Matters concerning the scope of consolidation
Number of consolidated subsidiaries: 1
Name of principal consolidated subsidiary: HOPE ENERGY, INC.
2. Matters concerning application of the equity method
Not applicable.
3. Matters concerning accounting period of consolidated subsidiary
The fiscal year of consolidated subsidiary ends on the quarterly consolidated balance sheet date .
4. Accounting standards(1) Valuation criteria and methods for marketable securities
Other securities
Securities with market quotations
Stated at market value at the accounting closing date (valuation difference is comprehensively reported as acomponent of net assets and the cost of securities sold is computed using the moving -average method.)
Securities without market quotations
Stated at cost by the moving-average method.
(2) Valuation criteria and methods for inventories
a. Merchandise and finished goods and work in process
Stated at cost on an individual specified cost basis (the balance sheet value is computed by the method ofdevaluing book price to reflect declines in profitability).
b. Supplies
Stated at cost, cost being determined by the last purchased cost method (the balance sheet value is computedby the method of devaluing book price to reflect declines in profitability) .
(3) Depreciation and amortization methods for non-current assets
a. Property, plant and equipment
Declining-balance method except for buildings (excluding attached structures) acquired on or after April 1,
1998, which are accounted for by the straight-line method.
Useful lives of principle assets are as follows:
Buildings: 10 years
Vehicles: 5 to 6 years
Tools, furniture and fixtures: 2 to 8 years
b. Intangible assets
The straight-line method. Software for internal use is amortized over an expected useful life of five years.
(4) Recognition of allowances
Allowance for doubtful accounts
To prepare for losses on doubtful accounts such as notes and account receivables -trade and loans receivable,
allowances equal to the estimated amount of uncollectible receivables are booked for general receivable s basedon the historical write-off ratio, and bad receivables based on case-by-case determination of collectibility.
(5) Cash and cash equivalents in the Consolidated Statement of Cash Flows
Cash and cash equivalents consist of cash on hand, bank deposits which can be withdrawn at any time, andshort-term investments with the duration of three months or less which can be easily converted to cash and are
exposed to little risk of change in value.
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HOPE, INC. (6195) Consolidated Financial Results for the Third Quarter of FY6/21(6) Other significant accounting policies in the preparation of consolidated financial statements
Accounting for consumption taxes
National and local consumption taxes are accounted by the tax-exclusion method. Non-deductible national andlocal consumption taxes are charged to expenses for the fiscal year when they were incurred.
Segment Information
1. Overview of reportable segment(1) Method for identifying reportable segments
Segments used for financial reporting are HOPE’s constituent units for which separate financial information isavailable and for which the Board of Directors performs periodic studies for the purposes of determining theallocation of resources and evaluating performance.
There are three reportable segments: advertising, energy, and media, which are based on HOPE’s core advertising,energy, and media businesses.
(2) Information related to changes in reportable segments, etc.
Change in method for measuring profit (loss) of reportable segments
Beginning in the first quarter of FY6/21, the standards used for the allocation of corporate expenses h ave beenrevised for the purpose of more accurately showing the actual profitability of each segment.
(3) Types of products and services in each reportable segment
Products and services in the reportable segments are as follows.
Reportable segments

Advertising

Products and services
Smart Resource service
Ads in public info publications, banner ads, etc.
Smart Creation service
MachiletGenewat

EnergyMedia

Jichitai Works, B-to-G marketing

2. Information related to net sales and profit or loss for each reportable segment
First nine months of FY6/21 (Jul. 1, 2020 – Mar. 31, 2021)
Reportable segment

Advertising

EnergyMedia

Subtotal

Other(Note 1)

Total

(Thousands of yen)Amounts shownon quarterly
Adjustment consolidated(Note 2)statement ofincome(Note 3)

Net sales
External sales
1,030,037 20,660,313 117,184 21,807,535
2,936 21,810,472
21,810,472
Inter-segment
sales and transfers
Total
1,030,037 20,660,313 117,184 21,807,535
2,936 21,810,472
21,810,472
Segment profit
82,463 (7,122,359)
13,595 (7,026,301) (25,955) (7,052,255) (224,343)(7,276,599)(loss)
Notes: 1. Other consists of the businesses which are not included in any of the reportable segments and mainly includes
Machiiro and Jichitai Works HA×SH services.
2. The negative 224,343 thousand yen adjustment to segment profit (loss) is corporate expenses that are not allocatedto any of the reportable segments. Corporate expenses mainly consist of selling, general and administrative
expenses that are not attributable to any of the reportable segments.
3. Segment profit (loss) is adjusted to be consistent with operating loss shown on the quarterly consolidated statementof income.
This financial report is solely a translation of “Kessan Tanshin” (in Japanes e, including attachments), which has been
prepared in accordance with accounting principles and practices generally accepted in Japan, for the convenience of readers
who prefer an English translation.

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