Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong
Limited take no responsibility for the contents of this announcement, make norepresentation as to its accuracy or completeness and expressly disclaim any liability
whatsoever for any loss howsoever arising from or in reliance upon the whole or any
part of the contents of this announcement.

(Incorporated in Japan with limited liability)(Stock Code: 1245)

ANNUAL RESULTS ANNOUNCEMENTFOR THE YEAR ENDED 31 MARCH 2019
ANNUAL RESULTS HIGHLIGHTS#•

Gross pay-ins were ¥141,731 million (or HK$10,023 million # ), recording an
increase of 2.3% as compared with the year ended 31 March 2018;•

Revenue was ¥28,325 million (or HK$2,003 million #), recording an increase of
6.7% as compared with the year ended 31 March 2018;•

Profit before income tax was ¥1,093 million (or HK$77 million#), recording a riseof 413.1% as compared with the year ended 31 March 2018;•

Profit for the year attributable to owners of the Company was ¥610 million (orHK$43 million # ), recording a hike of ¥625 million as compared with the year
ended 31 March 2018;•

The Group operates 53 halls as at the date of this announcement (55 halls as at
31 March 2018);•

Basic earnings per share of the Company was ¥0.510 (or HK$0.036 #) (2018:
basic loss per share ¥0.013); and•The Board has resolved to declare a final dividend of ¥0.07 (or HK$0.005) per
common share (2018: ¥0.12 per common share).
Translated into Hong Kong dollar at the rate of ¥14.14 to HK$1.00, the exchange rate prevailingon 29 March 2019 (i.e. the last business day in March 2019).

Note: The above % increases and decreases refer to the changes in respect of the Japanese Yenamounts but not the translated amounts in Hong Kong dollar.

*

For identification purpose only

–1–The board (the “Board”) of directors (the “Directors”) of NIRAKU GC HOLDINGS, INC.*(the “Company” or “NIRAKU”) is pleased to announce the audited consolidated resultsof the Company and its subsidiaries (the “Group”) for the year ended 31 March 2019
together with the comparative figures for the year ended 31 March 2018 as follows:
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 March 20192019
¥ million
28,325551
54(22,875)(4,502)2018¥ million
26,554606
121(22,640)(3,918)

1,553
52
(507)

723
51
(561)

(455)
(5)

(510)
–

1,093
(549)

213
(273)

Profit/(loss) for the year

544

(60)

Profit/(loss) attributable to:
Owners of the Company
Non-controlling interest

610
(66)

(15)
(45)

544

(60)

0.510

(0.013)

Other comprehensive income/(loss)
Items that have been reclassified or may besubsequently reclassified to profit or loss
Change in value of financial assets
through other comprehensive income
Currency translation differences

(29)
99

(179)
(93)

Total comprehensive income/(loss) for the year

614

(332)

Total comprehensive income/(loss)
attributable to:
Owners of the Company
Non-controlling interest

680
(66)

(287)
(45)

614

(332)

Revenue
Other income
Other gains, net
Hall operating expenses
Administrative and other operating expenses

Note
4
5
5
6
6

Operating profit
Finance income
Finance costs
Finance costs, net
Share of results of an associate

7

Profit before income tax
Income tax expense

8

Earnings/(loss) per share for profit/(loss)
attributable to owners of the Company— Basic and diluted (expressed in    Japanese Yen per share)–2–

9

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 March 2019
Note
ASSETS
Non-current assets
Property, plant and equipment
Investment properties
Intangible assets
Prepayments, deposits and other receivables
Interest in an associate
Financial assets at fair value through profit or loss
Financial assets at fair value through othercomprehensive income
Deferred income tax assets
Long-term bank deposits

Current assets
Inventories
Trade receivables
Prepayments, deposits and other receivables
Current income tax recoverable
Bank deposits with maturity over 3 months
Cash and cash equivalents

Total assets

–3–

11

2019
¥ million

2018¥ million

28,523
650
1,662
4,208
–
100

26,207
662
1,571
3,751
–
52

911
1,588
–

953
1,565
47

37,64234,808

109
53
1,020
–
43
15,176

57
57
1,312
300
43
15,594

16,401

17,36354,04352,171

2019¥ million

2018¥ million

EQUITY
Equity attributable to owners of the Company
Share capital
Reserves

3,000
24,6173,000
24,176

Non-controlling interest

27,617(106)

27,176(40)

Total equity

27,511

27,136

11,792
2,717
2,226
27

10,854
3,247
2,111
8

16,762

16,220

294
4,290
703
4,353
4
126

247
3,886
888
3,793
1
–

9,770

8,815

Total liabilities

26,53225,035

Total equity and liabilities

54,04352,171Note

LIABILITIES
Non-current liabilities
Borrowings
Obligations under finance leases
Provisions and other payables
Derivative financial instruments

13
14

Current liabilities
Trade payables
Borrowings
Obligations under finance leases
Accruals, provisions and other payables
Derivative financial instruments
Current income tax liabilities

12
13
14

–4–

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1

GENERAL INFORMATION
株式会社二ラク•ジー•シー•ホールディングスNIRAKU GC HOLDINGS, INC.* was incorporated inJapan under the Japan Companies Act with limited liability on 10 January 2013. The address of its
registered office is 1-39 Hohaccho 1-chome, Koriyama-shi, Fukushima, Japan.
The Company is an investment holding company. The Company and its subsidiaries comprising theGroup (together, the “Group”) are principally engaged in pachinko and pachislot hall operations,hotel and restaurant operations in Japan; and amusement arcade operations in Southeast Asian
countries.
The Company’s shares were listed on the Main Board of the Stock Exchange of Hong Kong Limited
on 8 April 2015.
These consolidated financial statements are presented in millions of Japanese Yen (“¥”), unlessotherwise stated.

2

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESThis note provides a list of the significant accounting policies adopted in the preparation of these
consolidated financial statements. These policies have been consistently applied to all the years
presented, unless otherwise stated. The financial statements are for the Group consisting of theCompany and its subsidiaries.

3

BASIS OF PREPARATION(i)

Compliance with International Financial Reporting Standards and Hong Kong Companies
Ordinance
The consolidated financial statements have been prepared in accordance with all applicable
International Financial Reporting Standards (“IFRS”) issued by the IASB and requirements of theHong Kong Companies Ordinance Cap. 622.

(ii)

Historical cost convention
The consolidated financial statements have been prepared under the historical cost convention,
as modified by the revaluation of financial assets and financial liabilities (including derivative
financial instruments) which are carried at fair values.

–5–

(iii) New and amended standards adopted by the GroupThe following new standards and amendments have been issued and are effective for annual
periods beginning on 1 April 2018:
IFRS 2 (Amendment)

Classification and measurement of share-based
payment transactions
IFRS 4 (Amendment)
Applying IFRS 9 Financial Instrument with IFRS 4
Insurance Contract
IFRS 15
Revenue from contracts with customers
IFRS 15 (Amendment)
Clarification to IFRS 15
IFRIC 22
Foreign currency transactions and advance consideration
IAS 40 (Amendment)
Transfers of investment property
Annual improvement Project IFRS 1 Annual improvement Project 2014–2016 Cycle
and IAS 28 (Amendment)
The impact of the adoption of IFRS 15 is disclosed below. The other new or amended
standards did not have any material impact on the Group’s accounting policies.
Adoption of IFRS 15, “Revenue from contracts with customers”
The Group has adopted IFRS 15 from 1 April 2018 which resulted in changes in accounting
policies and adjustments to the amounts recognised in the consolidated financial statements. In
accordance with the transitional provisions in IFRS 15, the Group has adopted the modified
retrospective approach and comparative figures have not been restated.
The accounting policies were changed to comply with IFRS 15. IFRS 15 replaces the provisionof IAS 18 “Revenue” and IAS 11 “Construction Contracts” that relate to the recognition,
classification and measurement of revenue and costs.
The effect of the adoption of IFRS 15 is related to presentation of contract liabilities within“Accruals, provisions and other payables” recognised in the consolidated statement of financial
position as at 1 April 2018 to be consistent with the terminology used under IFRS 15:—

Contract liabilities recognised for unutilised balls and tokens was previously presented
within “Accruals, provisions and other payables”.

—

Contract liabilities recognised for vending machine rental receipt in advance was previously
presented within “Accruals, provisions and other payables”.

The adoption of IFRS 15 has no material impact to the Group’s net assets as at 31 March 2018
and the consolidated results, earnings per share (basic and diluted) and consolidated statementof cash flows for the year ended 31 March 2019.

–6–

(iv) New standards and amendments to existing standards not yet adopted by the GroupThe following are standards and amendments to existing standards that have been publishedand are relevant and mandatory for the Group’s accounting periods beginning on or after 1
April 2019 or later periods, but have not been early adopted by the Group. The Group’s
assessment of the impact of these new standards and interpretations is set out below.
Effective
for accounting
year beginningon or after
IAS 19 (Amendments)
IAS 28 (Amendments)

Employee Benefits
1 January 2019
Long-term interests in associates and joint
1 January 2019ventures
IFRS 9 (Amendments)
Prepayment Features with Negative Compensation 1 January 2019
IFRS 16
Leases
1 January 2019
IFRIC 23
Uncertainty over income tax treatments
1 January 2019
Annual Improvements to IFRSAnnual improvements 2015–2017 Cycle
1 January 2019
IFRS 17
Insurance contracts
1 January 2021
IFRS 10 and IFRS 28 (Amendment) Sale or contribution of assets between an investor To be determined
and its associate or joint venture
IFRS 16 Leases
IFRS 16 provides new provision for the accounting treatment of leases and will will result inalmost all leases being recognised on the consolidated statement of financial position bylessees, as the distinction between operating and finance leases is removed. Under the newstandard, a right-of-use (“ROU”) asset (for the rights to use the leased item) and a financial
liability (for the payment obligations) will be recognised. The only exceptions are short-term andlow-value leases.
The new standard will therefore result in an increase in ROU and an increase in lease liability inthe consolidated statement of financial position. In the combined statement of comprehensive
income, lease will be recognised as depreciation over the terms of the leases and will no longer
be recorded as rental expenses. Interest expense on the lease liability will be presented
separately from depreciation under finance cots. The combination of a straight-line depreciationof the ROU and the effective interest rate method applied to the lease liability will result in ahigher total charge to the profit or loss in the initial year of the leases, and decreasing expenses
during the later part of the lease terms on a lease-by-lease basis. Hence, adopting the newstandard will have effects to the financial performance of the Group by increasing EBITDA and
EBIT. Operating cash flows will increase and financing cash flows will decrease as repayment of
the principal portion of the lease liabilities will be classified as cash flows used in financing
activities.
Nevertheless, it is expected that there will be no material impact on the total expenses to berecognised over the entire lease period and the Group’s total net profit over the lease period is
not expected to be materially affected. As at the reporting date, the Group has non-cancellable
operating lease commitments of ¥10,176 million. Based on a preliminary assessment, the total
assets and total liabilities are expected to be increased with no material impact on the net
assets.
The Group has set up a project team to review the Group’s leasing arrangements in light of the
new standard and will continue to assess the full impact of the adoption of IFRS 16.

–7–

The Group will apply the standard from its mandatory adoption date of 1 April 2019. The Groupintends to elect the modified retrospective approach where the cumulative effects of initiallyapplying IFRS 16 will be recognised as an adjustment to the opening balance of retained profits
without restating the comparative figures.
There are no other standards that are not yet effective and that would be expected to have amaterial impact on the entity in the current or future reporting periods and on foreseeable futuretransactions.
4

REVENUE AND SEGMENT INFORMATION(a)

Revenue

Revenue
Gross pay-ins
Less: gross pay-outs
Revenue from pachinko and pachislot hall business
Revenue from amusement arcades
Vending machine income
Revenue from hotel operations
Revenue from restaurant operations

(b)

2019
¥ million

2018¥ million

141,731(115,850)

138,493(113,230)

25,881
1,535
507
132
270

25,263
417
536
158
180

28,32526,554

Segment information
Management has determined the operating segments based on the reports reviewed by thechief operating decision maker that are used for making strategic decisions. The chief operating
decision-maker is identified as the executive directors of the Company. The executive directors
consider the business from a service perspective and assess the performance of the operating
segments based on a measure of adjusted profit before tax before unallocated corporate
expenses for the purposes of allocating resources and assessing performance. These reports
are prepared on the same basis as this consolidated financial statements.
Management has identified three reportable segments based on the types of services, namely (i)pachinko and pachislot hall operations, (ii) amusement arcade operations, and (iii) others,
representing hotel and restaurant operations.
Segment assets consist primarily of property, plant and equipment, investment properties,
inventories, trade receivables, prepayments, deposits and other receivables, bank deposits andcash and bank balances. They exclude deferred income tax assets, and assets used forcorporate functions including financial assets at fair value through profit or loss, financial assets
at fair value through other comprehensive income and interest in an associate.
Capital expenditure comprises additions to property, plant and equipment, investment
properties and intangible assets. Unallocated corporate expenses and income tax expenses are
not included in segment results.

–8–

The segment information provided to the executive Director for the years ended 31 March 2019and 2018 are as follows:
Pachinko andpachislot halloperations

Segment revenue fromexternal customers— Over time
Segment results
Corporate expenses
Share of loss of an associateYear ended 31 March 2019
Amusement
arcadeoperations

Japan¥ million

SoutheastAsia¥ million

Japan andChina
¥ million¥ million

26,3881,535

402

28,325

2,314

153

(237)

2,230
(1,132)(5)

Profit before income tax
Income tax expense

1,093
(549)

Profit for the year
Other segment items
Depreciation and amortisation
expensesFinance income
Finance costs
Capital expenditures

Total

544

(2,278)
50
(501)
4,606

–9–

(283)
2
(6)
156

(71)
–
–
419

(2,632)
52
(507)
5,181

Pachinko andpachislot halloperations

Segment revenue fromexternal customers— Over time
Segment results
Corporate expenses

Year ended 31 March 2018
Amusement
arcadeoperations

Total

Japan
¥ million

SoutheastAsia¥ million

Japan andChina
¥ million¥ million

25,799417

338

26,554

1,223

(74)

(213)

936
(723)

Profit before income tax
Income tax expense

213
(273)

Loss for the year

(60)

Other segment items
Depreciation andamortisation expenses
Finance income
Finance costs
Capital expenditures(2,243)
49
(539)
1,768

(95)
2
(22)
76

(45)
–
–
75

(2,383)
51
(561)
1,919

The segment assets as at 31 March 2019 and 2018 are as follows:

As at 31 March 2019
Segment assets
Unallocated assets
Deferred income tax assets

Pachinko andpachislot halloperations

Amusement
arcadeoperations

Japan¥ million

SoutheastAsia¥ million

Japan andChina
¥ million

42,933

1,003

1,821

Total

Total assets
As at 31 March 2018
Segment assets
Unallocated assets
Deferred income tax assets¥ million
45,757
6,698
1,588
54,04342,247980

1,108

44,335
6,271
1,565
52,171

Total assets– 10 –

The total of non-current assets other than financial instruments and deferred tax assets,
analysed by location of the assets, is as follows:

Japan, country of domicile
Southeast Asia and China

2019¥ million

2018¥ million

34,016
1,027

31,609629

35,04332,238No single external customer contributed more than 10% revenue to the Group’s revenue for theyears ended 31 March 2019 and 2018.
5

OTHER INCOME AND OTHER GAINS, NET

Other income
Rental income
Income from expired IC and membership cards
Dividend income
Compensation and subsidies
Income from scrap sales of used pachinko and pachislot machines
OthersOther gains, net
Loss on fair value for financial assets at fair value through profit or loss
(Loss)/gain on fair value for derivative financial instruments(Loss)/gain on disposal of property, plant and equipment
Release of obligation under finance leases upon closure of halls
Loss on disposal of investment properties
Net exchange gain/(loss)– 11 –

2019¥ million

2018¥ million

167
29
55
3
265
32

154
31
57
4
331
29

551

606

(2)
(23)
(54)
133
(7)
7

(2)
3
215
–
–
(95)

54

121

6

HALL OPERATING EXPENSES AND ADMINISTRATIVE AND OTHER OPERATING EXPENSES

Auditors’ remuneration— Audit fees
— Other services
Employee benefits expenses— Hall operations— Administrative and others
Operating lease rental expense in respect of land and buildings
Depreciation of property, plant and equipment
Depreciation of investment properties
Write off of other receivables
Amortisation of intangible assets
Reinstatement expenses
Recruitment expenses
Travelling and transportation
Other taxes and duties
Repairs and maintenanceUtilities expenses
Consumables and cleaning
Outsourcing service expenses
G-Prize procurement expenses to wholesalers
Pachinko and pachislot machines expenses (Note (i))
Advertising expenses
Service fee
Impairment loss on property, plant and equipment
Legal and professional fees
Loss on termination of existing/opening of outlets (Note (ii))
Others2019¥ million

2018¥ million

100
7

76
13

5,510
1,683
3,006
2,532
19
–
81
26
65
125
395
291
1,055
1,495
1,048
753
6,971
1,121
32
195
46
240
581

5,176
1,635
2,835
2,315
19
54
49
25
52
132
348
226
952
1,438
962
763
7,699
1,102
35
–
155
46
451

27,37726,558Notes:(i)

Pachinko and pachislot machines are expensed off in the consolidated statement ofcomprehensive income upon installation. The expected useful lives of these machines are lessthan one year.

(ii)

During the year ended 31 March 2019, two pachinko and pachislot halls were closed. The
amount of ¥240 million represents penalty charges for early termination of rental contracts of¥143 million, forfeiture of rental deposits of ¥74 million and miscellaneous expenses in relation
to the closure of halls of ¥23 million.
During the year ended 31 March 2018, a pachinko and pachislot hall and a restaurant wereclosed. The amount of ¥46 million represents penalty charge for early termination of rental
contract of ¥8 million and forfeiture of rental deposits of ¥3 million in relation to the closure of arestaurant and ¥35 million penalty charge in relation to closure of the pachinko and pachislot
hall.

– 12 –

7

FINANCE COSTS, NET2019¥ million

2018¥ million

1
51

3
48

52

51

(196)
(195)
(116)

(195)
(228)
(138)

(507)

(561)

(455)

(510)

2019
¥ million

2018¥ million

Current income tax— Japan— Other Asian countries

518
34

170
9

Deferred income tax

552
(3)

179
94

549

273

Finance income
Bank interest income
Other interest income

Finance costs
Bank borrowings
Obligations under finance leases
Provision for unwinding discountFinance costs, net
8

INCOME TAX EXPENSE

Taxation has been provided at the appropriate rates prevailing in the countries in which the Group
operates.
No provision for Hong Kong profits tax or China income tax have been made for the years ended 31
March 2019 and 2018 as the Group did not generate any assessable profits arising in Hong Kong
and China during the years ended 31 March 2019 and 2018.

– 13 –

9

EARNINGS/(LOSS) PER SHARE
Basic earnings/(loss) per share is calculated by dividing the profit/(loss) attributable to owners of theCompany by the weighted average number of ordinary shares in issue during the years ended 31
March 2019 and 2018.

Profit/(loss) attributable to owners of the Company (¥ million)
Weighted average number of ordinary shares for the purpose of
calculating basic earnings/(loss) per share (thousands)
Basic and diluted earnings/(loss) per share (¥)

2019

2018

610

(15)

1,195,850

1,195,850

0.510(0.013)

No diluted earnings/(loss) per share is presented as there was no potential dilutive shares during theyears ended 31 March 2019 and 2018. Diluted earnings/(loss) per share is equal to the basic
earnings/(loss) per share.
10

DIVIDENDS
During the year ended 31 March 2019, the Company paid interim dividend of ¥96 million (¥0.08 percommon share) and final dividend of ¥143 million (¥0.12 per common share) to its shareholders in
respect of the six months ended 30 September 2018 and the year ended 31 March 2018,
respectively.
The board of directors of the Company declared a final dividend of ¥0.07 per common share totalling¥84 million in respect of the year ended 31 March 2019. These consolidated financial statements do
not reflect this dividend payable.

11

TRADE RECEIVABLES

Trade receivables
Less: provision for impairment of trade receivables

2019¥ million

2018¥ million

53
–

57
–

53

57

Trade receivables represent income receivable from vending machines. The credit terms granted by
the Group generally ranged from 0 to 30 days.
Provision for impaired receivables have been included in “administrative and other operating
expenses” in the consolidated statement of comprehensive income. Amounts charged to theallowance account are generally written off when there is no expectation of recovering the amount.

– 14 –

As at 31 March 2019 and 2018, the ageing analysis of the trade receivables, based on invoice date,is as follows:

Less than 30 days
31 days to 90 days

2019
¥ million

2018¥ million

52
1

53
4

53

57

The maximum exposure to credit risk at the reporting date is the carrying value of the receivables
mentioned above. The Group does not hold any collateral as security.
The carrying amounts of trade receivables approximate their fair values as at 31 March 2019 and
2018.
12

TRADE PAYABLES
The ageing analysis of the trade payables based on invoice dates as at 31 March 2019 and 2018
were as follows:

Less than 30 days
31–90 days
Over 90 days

2019
¥ million

2018¥ million

47
242
5

72
162
13

294

247

The carrying amounts of trade payables approximate their fair values as at 31 March 2019 and 2018.
13

BORROWINGS

Non-current portion
Bank loans
Syndicated loans

Current portion
Bank loans
Syndicated loans

Total borrowings– 15 –

2019¥ million

2018¥ million

3,247
8,545

2,761
8,093

11,792

10,854

1,047
3,243

813
3,073

4,290

3,886

16,082

14,740As at 31 March 2019 and 2018, the Group’s borrowings were repayable as follows:

Within 1 year
Between 1 and 2 years
Between 2 and 5 years
Over 5 years

2019¥ million

2018¥ million

4,290
2,445
5,676
3,671

3,886
2,821
4,991
3,042

16,082

14,740

The average effective interest rates (per annum) at the end of each reporting period were set out asfollows:

Bank loans
Syndicated loans

2019

2018

1.91%
1.0%

0.8%
1.1%

As at 31 March 2019, the borrowings under sales and leaseback arrangements with a third party
lessor amounted to ¥2,686 million (2018: ¥1,674 million). These sales and leaseback arrangements
included sell of certain leasehold improvements and pachislot machines at an aggregate
consideration of ¥2,801 million and lease-back to the Group for a total lease payment of ¥2,979
million covering the periods ranged between 24 months to 84 months. During the lease period, theGroup cannot transfer or pledge to any party the relevant leasehold improvements and pachislot
machines. For leasehold improvement, the Group has an option to renew for a further term of 1 year
on the 20th of the preceding month before the end of each lease term at no cost.
At the end of each reporting period, the total borrowings are pledged by certain assets and theircarrying values are shown as below:

Property, plant and equipment
Investment properties
Deposits and other receivables

2019¥ million

2018¥ million

11,050
650
180

8,340
662
582

11,8809,584

The undrawn borrowing facilities of the Group at each reporting period are as follows:

Floating rate
— Expiring over 1 year

2019
¥ million

2018¥ million

995

1,663

The carrying amounts of borrowings of the Group approximate their fair values as at 31 March 2019and 2018.

– 16 –

14

OBLIGATIONS UNDER FINANCE LEASES
2019¥ million

2018¥ million

Gross finance lease liabilities — minimum lease payments
No later than 1 year
Later than 1 year and no later than 2 years
Later than 2 year and no later than 5 years
Later than 5 years

833
564
157
2,642

1,041
817
1,206
1,985

Future finance charges on finance leases

4,196
(776)

5,049
(914)

Present values of finance lease liabilities

3,420

4,135

2019
¥ million

2018¥ million

No later than 1 year
Later than 1 year and no later than 2 years
Later than 2 year and no later than 5 years
Later than 5 years

703
451
100
2,166

888
683
918
1,646

Total obligations under finance leases
Less: Amount included in current liabilities

3,420
(703)

4,135
(888)

Non-current obligations under finance leases

2,717

3,247

The present values of finance lease liabilities are as follows:

Assets arranged under finance leases represent buildings for pachinko and pachislot halls, pachinko
and pachislot machines, and gaming machines for amusement arcades. The average lease term
range from 1 to 20 years with effective interest rate range from 2.45% to 4.42% per annum as at 31
March 2019 (2018: 3.22% to 4.42% per annum) for pachinko and pachislot business; and from 2 to
3 years with effective interest rate range from 8.06% to 20.0% for amusement arcade business. No
arrangements have been entered into for contingent rental payments during the reporting periods.

– 17 –

15

BUSINESS COMBINATION
Acquisition of Dream Games Singapore Pte. Ltd.
On 20 November 2017, the company has completed the acquisition of 100% issued share capital ofDream Games Singapore Pte. Ltd. and its subsidiaries (“Dream Games”) at a cash consideration of¥1,870 million. Dream Games is engaged in the operation of entertainment and amusement facilities
in Cambodia and Vietnam. The acquisition represents a strategic opportunity for the Group toestablish its leading presence in gaming and entertainment industry in Southeast Asia and broaden
the types of entertainment provided by the Group.
Net cash outflow arising from acquisition of subsidiaries amounted to ¥1,753 million.
The following table summarises the consideration paid for Dream Games, and the fair value of theassets acquired and liabilities assumed at the acquisition date.
As at
date ofacquisition¥ million
Recognised amounts of identifiable assets acquired and liabilities assumed:
Cash and cash equivalents
Prepayments, deposits and other receivables
Inventories
Property, plant and equipment
Deferred tax assets
Intangible assets
Provision and other payables
Borrowings and obligation under finance leases
Deferred tax liabilities
Current income tax liabilities

117
236
21
579
15
408
(170)
(351)
(89)
(5)

Total identifiable net assets
Goodwill

761
1,109

Net assets acquired

1,870

Purchase consideration settled in cash

1,870

The fair value is being valued by Roma Group Limited, an independent qualified professional valuer,
not connected to the Group.
The goodwill arose in the acquisition of Dream Games included amounts in relation to the benefit ofexpected synergies, revenue growth, future business development and expansion in Asian markets.
None of goodwill recognised is expected to be deductible for income tax purpose.
Acquisition related costs of Dream Games of ¥24 million have been charged to “administrative andother operating expenses” in the consolidated statement of comprehensive income for the year
ended 31 March 2018.

– 18 –

MANAGEMENT DISCUSSION AND ANALYSIS
BUSINESS OVERVIEW
With the implementation of strategic sales plan and overhaul of the corporate structure,
our core pachinko and pachislot business recorded a strong improvement in current
year. Despite the market downturn, our revenue was maintained and operating income
was substantially improved.
Apart from our domestic business, we also endeavour to expand our overseas markets.
During the year, we opened an amusement arcade in Cambodia under our whollyowned subsidiary, Dream Games. We also stepped into the eSports business via
investing in a Hong Kong established private company named Yes! E-Sports Asia
Holdings Limited (“YEAH”) which its main focus is in the Pan-Asian region. Soon in June
this year, we will commence a food and beverage business in Shenzhen, the Shenzhen
Upper Hills YOKOCHO Japanese food court (the “Shenzhen Upper Hills YOKOCHO”),
which the idea is inspired by the concept of “Yokocho” alleyway.
In Southeast Asian countries with fast-growing economies where citizens have moredisposal income and leisure time, expansion of leisure and entertainment market isforeseen. This will lead to the emergence of mature societies and markets in the near
future, which Japan had once experienced. In addition, Shenzhen is one of the major
cities in China, which its vibrant economy and rapid growing of intellectual technology
has attracted more foreign investment. We are confident that we can convey theexcellence and pleasure of Japanese gastronomy, culture, and service to the global
audience.
The Group strives to expand its business with a focus on Asia as a whole, by providing
places for people to gather and enjoy as well as places for communities where people
can interact with each other. To that end, in the medium term, we aim to expand ourentertainment business in a broad sense, encompassing the amusement business, thefood and beverage business, and our mainstay pachinko hall business, both in Japanand across the Asian region.
“Providing happy time for people by making the world cheerful, fun and entertaining” —this philosophy not only applies to our core pachinko hall business, but is also a shared
philosophy for the business portfolio of the entire Group. Moreover, this philosophy is
not limited to a specific country or region, but has universal meaning. With an eye to the
future, we will accelerate the pace of our own globalisation and build a robust andfuture-oriented foundation for business.

– 19 –

Pachinko business
The pachinko industry remains difficult with markets shrinking across the entire industry,
more pachinko hall operators are experiencing management difficulties and a trend
toward closing of pachinko halls. It is believed that this declining trend will continue forthe time being, with no immediate solutions to resolve market-wide issues such as
unveil new markets of younger people and prevent departure of existing players.
Furthermore, in the future, the pachinko industry will likely be confronted with otherissues further constraining its profitability, such as change of gambling property forgaming machine due to the revision of gaming machine regulations, the increase in
consumption tax, and measures to protect against gambling dependency following thelifting of casino restrictions, among others.
Given this industry environment, for our pachinko hall business we have further
promoted the implementation of sales policies necessary for achieving continuous
profitable growth and cost efficiency, in compliance with various regulations, while atthe same time striving to provide a gaming environment that meets the needs of diverse
fans as an important sales strategy. As a result, despite the ongoing severity of thesituation the pachinko industry as a whole is facing — such as the market shift followingchanges of machine standards regulations and the decrease in sales (gross pay-in) thathas accompanied this shift — we have successfully maintained our sales scale and haveachieved an expansion of customer visits.
Despite the macro environment of pachinko industry is seen to be severe, we regard
this market phenomenon as an opportunity for future growth, and we will focus on areas
with existing pachinko halls where we can demonstrate our strengths. We intend toestablish a foundation for future growth through opening of new halls seeking
opportunity for acquisitions of other halls and allying with business partnerships.
Apart from persistently configure products to accommodate the characteristics of eachregion, improve the gaming environment and customer service, we will also work toenhance our overall organisation by implementing cost efficiency plan and work in unity
to create halls that win the support of customers.

– 20 –

Amusement arcade business (Dream Games)
Dream Games is currently operating gaming arcades in Vietnam and Cambodia, which
are extremely fast-growing countries with high potential and young people which is anadvantage to leisure and entertainment business.
Operating mainly in shopping malls with strong ability to attract customers, including
Aeon Mall, Dream Games currently operates a total of nine outlets, of which seven are
in Vietnam and two in Cambodia. Vietnam and Cambodia are undergoing rapid
economic expansion and their leisure markets can be expected to keep expanding. In
these countries, both the average age and the overall proportion of young people are on
an increasing trend, but facilities designed for people to enjoy leisure time are still
limited, and it is expected that use of amusement facilities will further expand within theleisure market.
In addition, this amusement arcade business is extremely compatible with the pachinko
hall business we have cultivated over the years. Through this acquisition, we havesucceeded in enhancing synergy for the Group including human resources efficiency.
We plan to further invest in management resources, to achieve further business growthin the future.
We will continue to open new outlets in Vietnam and Cambodia with an aim to increase
our market share while also developing various modes of business. At the same time,
we will fix our gaze on other Southeast Asian markets and plan to develop a wide varietyof amusement businesses across Asia in the future. By accurately grasping the
economic growth of Asian countries, the accompanying expansion of leisure market,
and their needs, we plan to actively invest in business expansion and promote growth
as one of our mainstays for group profit in the medium term.
Overseas restaurant business (Yokocho business)
In mid 2019, we will open the Shenzhen Upper Hills YOKOCHO which is located inside
an urban complex centre named Shenzhen Upper Hills.
The Shenzhen Upper Hills development has a total area of 1.2 million square meters, alarge-scale urban complex comprising commercial facilities, offices, hotels, conferencehalls, residential areas, with an excellent location near the center of Shenzhen. Directly
connected to two public parks, it has an abundant natural environment and is linked tothe subway by a dedicated thoroughfare, and with its ability to draw customers, it isexpected to benefit not only from domestic Chinese demand but also large inbounddemand.
The Shenzhen Upper Hills YOKOCHO will comprise a food court of approximately 3,000
square meters in area, with the participation of 16 diversified well-known Japaneserestaurants, cafes, and sake bars. By fusing and coordinating these various aspects ina cross-cutting and innovative manner, we are confident that we can mutually enhancethe overall value of this business.

– 21 –

Through Shenzhen Upper Hills YOKOCHO, our Group intends to convey the excellenceand pleasure of Japanese gastronomy, culture, and service to a global audience,starting from Shenzhen, a city of discerning tastes.
Domestic food businessIn the domestic restaurant business, as a franchisee of the “Lizarran” Spanish
restaurant, developed by the Spain-based Comess Group, which principally operates
restaurants in Europe, we are currently operating three restaurants in three locations —Shinbashi, Nishi-Shinjuku and Takadanobaba, where our newly opened restaurant is.
The “Lizarran” brand, developed by the Comess Group of Spain, is a brand that is full of
fun — not only serving food but also offering an entertaining style of service.
We are confident that moving ahead, in developing a larger number of restaurants, wewill be able to fully utilize all of the efficient store operation, service, and quality
maintenance and management systems we have cultivated through our pachinkobusiness. We plan to continue expanding these restaurants in Japan’s major urban
areas.
eSports businessSeeing the potential growth in eSports business, in November 2018, we stepped in theeSports business through investment in a 40% equity interest in YEAH.
Recent statistic has shown that global eSports market revenue will reach USD1.79
billion by 2022, with annual growth rate of nearly 30%, particularly in the Pan-Asian
region, and the size of the market is expected to keep growing in the future. With YEAH,
we will build strong business networks with strategic partners in each country, making
full use of the business know-how possessed by each partner, and through this unique“eSports + entertainment” platform, we plan to provide new entertainment with a focus
on China (including Hong Kong and Macao), Taiwan, Japan, South Korea, Singapore,
Malaysia, Thailand, and Vietnam, among others.
STRATEGIES AND FUTURE DEVELOPMENTManagement strategy
This year, the Group formulated its medium-term management strategy to build a robust
foundation for becoming the No. 1 “total entertainment company” in Asia in the future.
As part of this management strategy, we will make bold strategic investments in thedomestic Japanese amusement industry, centering on the pachinko hall business, withthe construction of a solid business foundation in Japan a top priority. At the same time,by further promoting our own globalisation, we will focus on solidifying the businessfoundation of each overseas business with the intention of securing a stable foundationfor earnings and growth trajectory. Through this, we will establish a foundation for ourGroup’s survival as a “hundred-year company”.

– 22 –

The outline of our management strategy is as follows:1.

Invest management resources in domestic Japanese amusement businessWe will continue to position the establishment of a solid business foundation as ourmost important management issue by actively and intensively investing management
resources in the domestic Japanese amusement business, centered on thepachinko business.

2.

Build a base for overseas business as a profitable businessWith regard to our overseas businesses (overseas arcade game business, overseas
food service business, overseas entertainment business) centered on the rapidly
growing Asian region, as we aim to become the No. 1 “total entertainment
company” in Asia, we will build a solid foundation for profitable businesses that arestable and have growth potential.

3.

Strengthen head office functions to facilitate management of the Group as it
expands
By strengthening the functions of the head office, we aim to improve the corporate
value of the Group by establishing a business foundation of each Group operatingcompany, establishing a stable earnings structure, and promoting corporate
governance.

By firmly implementing the medium-term business strategy above, we are confident that
we can weather the severe business environment that we anticipate, strengthen our
structural business base for the future, and create systems for further growth.
By making people’s lives more “cheerful, fun, and entertaining”, our next goal is towelcome the 100th anniversary in better shape, in light of many opinions from ourcustomers. To that end, we aim to expand our businesses not only in Japan but also
across the entire Group, increase corporate value, and maintain better relationships with
our stakeholders, including our employees, and to grow together.
FINANCIAL REVIEWRevenue from Pachinko and Pachislot Business
Revenue from pachinko and pachislot is derived from gross pay-in netted with gross
pay-out.
Revenue from pachinko and pachislot business recorded an increase of ¥618 million, or
2.4%, from ¥25,263 million in 2018 to ¥25,881 million in 2019. The rise was attributable
to the full year effect of revenue generated from a new hall which was opened in
December 2017 as well as general improvement in hall performance despite the slump
in pachinko industry.

– 23 –

Gross pay-ins
For the year ended 31 March 2019, the Group’s gross pay-ins from pachinko andpachislot business amounted to ¥141,731 million, comprising revenue from suburban
halls of ¥135,064 million (2018: ¥131,811 million) and urban halls of ¥6,667 million(2018: ¥6,682 million), representing an increase of ¥3,253 million, or 2.5%, and slight
drop of ¥15 million, or 0.2%, respectively, as compared to last year. The overall increase
was mainly generated from Hitachi-Omiya hall which was opened in late December
2017.
Gross pay-out
Gross pay-out increased from ¥113,230 million in 2018 to ¥115,850 million in 2019, an
increase of ¥2,620 million, or 2.3%, generally mirrored the increase in gross pay-ins.
Revenue margin
The revenue margin in current year maintained at similar level as that of last year, with
an immaterial increase of 0.1% from 18.2% in 2018 to 18.3% in 2019.
Revenue from Amusement Arcade Business
In November 2017, the Group acquired 100% of equity interest in Dream Games, acompany engages in the operation of entertainment and amusement facilities in
Cambodia and Vietnam. As a result of the acquisition, the financial results of Dream
Games and its subsidiaries were consolidated into the Group’s financial statements.
For the year ended 31 March 2019, the revenue contributed from amusement arcade
business amounted to ¥1,535 million (2018: ¥417 million), of which ¥1,274 million(2018: ¥349 million) and ¥261 million (2018: ¥68 million) were derived from Vietnam andCambodia, respectively. Apart from the improvement in the performance of amusement
arcade business, the surge of revenue is mainly due to the full year effect ofconsolidated revenue in current year, while the amount in last year represented 4months’ revenue subsequent to acquisition of Dream Games.
Other revenue
Other revenue represents incomes from vending machines and hotel and restaurant
operations.
Vending machines income amounted to ¥507 million in 2019. The decrease of ¥29
million as compared to ¥536 million in 2018 was resulted from decrease in number ofvending machines.
Revenue from hotel operations decreased from ¥158 million in 2018 to ¥132 million in2019 as a result of decrease in average occupancy rate from 75.7% in 2018 to 62.9%
in 2019 due to increasing competition in the vicinity.

– 24 –

Revenue from restaurant increased from ¥180 million in 2018 to ¥270 million in 2019.
The hike was due to (i) full year effect of Shinbashi restaurant which was opened inAugust 2017 netted with closure of restaurant in Akasakamitsue in late February 2018;(ii) increase in revenue from restaurant in Nishishibashi by ¥17 million as compared toprior year; and (iii) opening of Komeda Café in two pachinko halls which generated
additional income of ¥80 million.
Hall operating expenses
Hall operating expenses rose by ¥235 million, or 1.0%, from ¥22,640 million in 2018 to¥22,875 million in the current year. Major components of hall operating expenses are
pachinko and pachislot machine expenses, staff cost for hall staff and rental expenses,
amounting to ¥6,971 million, ¥5,510 million and ¥2,902 million, respectively, in 2019(2018: ¥7,699 million, ¥5,176 million and ¥2,728 million, respectively). The slightincrease in hall operating expenses is mainly resulted from the full year hall expenses ofDream Game netted with plunge in pachinko and pachislot machine expenses.
Administrative and other operating expenses
Administrative and other operating expenses decreased by ¥584 million, or 14.9%, from¥3,918 million in 2018 to ¥4,502 million in 2019, primarily due to the full year results ofDream Game business and provision of impairment loss of ¥195 million made in current
year but nil in previous year; netted with continuous implementation of cost savings
measures.
Finance costs, net
Finance costs, net declined by ¥55 million, or 10.8%, from ¥510 million in 2018 to ¥455
million in 2019. The drop was attributable to the centralisation of borrowings fromindividual subsidiaries level to the Company, allowing higher cost savings on
borrowings.
Profit/(loss) attributable to owners of the Company, basic earnings/(loss) per
share and dividend
Profit attributable to owners of the Company of ¥610 million was recorded for the year
ended 31 March 2019, as compared to the loss attributable to owners of ¥15 million in
2018. The turnaround from loss to profit was mainly attributable to additional revenue
driven from the new pachinko hall and Dream Games business, general improvement inhall performance, together with the decline in machine expenses.
Basic earnings per share was ¥0.510 (basic loss per share in 2018: ¥0.013). The Board
has declared a final dividend of ¥0.07 (or HK$0.005) per common share for the year
ended 31 March 2019 (2018: ¥0.12 per common share) on 24 May 2019.

– 25 –CAPITAL STRUCTURE
The Group principally meets its working capital and other liquidity requirements througha combination of capital contributions, including cash flow from operations and bankborrowings. The Group’s daily operation is mainly financed by operating cash flows, andrelies on short- and long-term borrowings for financing working capital, future expansion
plans and unexpected needs. The Group’s treasury objective is mainly to ensure there
is sufficient cash flow to meet the payment of expenses, loans and to fund any capital
expenditure and commitment that the Group may have from time to time. The Group’s
cash surpluses are placed in short-term and long-term fixed deposits to maintainliquidity. The Group has not experienced any difficulty in repaying its borrowings.
The Group’s principal business activities are carried out in Japan, with income,expenditure, assets and liabilities mainly denominated in Japanese Yen, as such, theGroup does not have any material foreign exchange exposure.
The table below sets forth the information regarding the cash and cash equivalents,bank deposits, bank borrowings, obligations under finance leases, working capital, total
equity and gearing ratio of the Group as at 31 March 2019 and 2018, and operating
cash flows before movements in working capital of the Group for the years ended 31
March 2019 and 2018, respectively:
As at 31 March
2019
2018
¥ million¥ million
Cash and cash equivalents
Bank deposits

Bank loans
Syndicated loans
Obligations under finance leases

Working capital
Total equity
Gearing ratio

15,17643

15,59490

15,21915,684

4,294
11,7883,420

3,574
11,166
4,135

19,502

18,875

6,631
27,511
70.9%

8,548
27,136
69.6%

For the year ended
31 March2019
2018¥ million¥ million
Operating cash flows before movements
in working capital

4,278– 26 –

2,925

Net current assets of the Group totalled ¥6,631 million as at 31 March 2019 (31 March
2018: ¥8,548 million), and current ratio was 1.68 as at 31 March 2019 (31 March 2018:1.97). As at 31 March 2019, there were cash and cash equivalents of ¥15,176 million(31 March 2018: ¥15,594 million), in which ¥14,340 million was denominated inJapanese Yen, ¥445 million was denominated in United States dollar, ¥252 million was
denominated in Hong Kong dollar and ¥139 million was denominated in othercurrencies. The Group had total borrowings of ¥19,502 million as at 31 March 2019 (31March 2018: ¥18,875 million). Current portion of borrowings and current portion of
obligations under finance leases amounted to ¥4,993 million as at 31 March 2019 (31March 2018: ¥4,774 million).
The Group’s bank borrowings during the current period comprised bank loans andsyndicated loans. As at 31 March 2019, the total bank borrowings amounted to¥16,082 million (31 March 2018: ¥14,740 million) with the average effective interest
rates ranged from 0.99% to 1.91% (31 March 2018: 0.8% to 1.1%) per annum.
Approximately 9.3% of bank borrowings as at 31 March 2019 were fixed rateborrowings.
HEDGING OF FLOATING RATE BORROWINGS AND FOREIGN EXCHANGE
As at 31 March 2019, the Group had three floating to fixed interest rate swap contracts
with three banks in Japan (i.e. the Group pays fixed interest rates and receives interests
at floating rate). These interest rate swap contracts were entered into as a measure to
manage interest rate risk in relation to loans of the Group. As interest rates of some of
the Group’s loans are on a floating rate basis, the floating to fixed interest rate swap
contracts enabled the Group to reduce the volatility in the amount of interest being paid.
For the year ended 31 March 2019, the loss on fair value for interest rate swap
contracts amounted to ¥23 million.
The Group’s debts were primarily denominated in Japanese Yen. After the acquisition ofDream Games, the Group maintains an appropriate level of external borrowings in
Vietnam Dong for natural hedging of Vietnam Dong attributed to projects in Vietnam.
The Vietnam Dong exposure of the Group is mainly derived from the translation of noncurrent assets and liabilities of the Vietnam subsidiary with functional currency ofVietnam Dong and the Vietnam Dong deposits held for future development costs. As at
31 March 2019, the translation of non-current assets and liabilities of subsidiaries withfunctional currency other than Japanese Yen to Japanese Yen by using exchange rates
at that day resulted in a gain of ¥99 million is recognised in equity. Apart from this, theGroup does not have any material foreign exchange exposure.

– 27 –

GEARING RATIOThe gearing ratio, defined as the aggregate of interest-bearing loans and obligations
under finance leases, divided by total equity, was 70.9% as at 31 March 2019 (31March 2018: 69.6%). The increase of 1.3% as compared with that as at 31 March 2018was mainly due to the increase in total borrowings of ¥627 million and total equity of¥375 million.
CAPITAL EXPENDITURE
Capital expenditure mainly comprises expenditure for (i) the purchase of property, plantand equipment mainly used for construction of buildings, and (ii) the purchase of
equipment and tools for the expansion and maintenance of our pachinko and pachislot
hall and amusement arcade operations. The table below shows a breakdown of thecapital expenditure for the indicated periods:
As at 31 March
2019
2018
¥ million¥ million
Property, plant and equipment
Investment properties
Intangible assets
Others

5,084
14
83
–

1,915
3
–
1

5,181

1,919

CHARGES ON ASSETS
As at 31 March 2019 and 2018, the carrying values of charged assets were as below:

Property, plant and equipment
Investment properties
Deposits and other receivables

2019¥ million

2018¥ million

11,050
650
180

8,340
662
582

11,8809,584

CONTINGENT LIABILITIESThe Group did not have any material contingent liabilities as at 31 March 2019 and2018.

– 28 –

SIGNIFICANT INVESTMENTS, MATERIAL ACQUISITIONS AND DISPOSALS OF
SUBSIDIARIES, AND FUTURE PLANS FOR MATERIAL INVESTMENTS OR CAPITALASSETS
Save for those disclosed in this annual results announcement, the Group had no planauthorised by the Board for other material investments or additions of capital assets asat the date of this annual results announcement.
There is no important events affecting the Company that have occurred since the end of
the financial year.
EMPLOYEES AND REMUNERATION POLICY
As at 31 March 2019, the Group had 1,846 employees. The remuneration policy of theGroup (including those for directors and employees) is determined by the Remuneration
Committee under the Board as per the performance, qualifications and competence ofthe employees.
FINAL DIVIDENDThe Board has declared a final dividend of ¥0.07 per common share for the year ended
31 March 2019 (31 March 2018: ¥0.12 per common share) on 24 May 2019, the final
dividend will be payable on 11 July 2019 to the shareholders of the Company (the“Shareholders”) whose names appear on the register of members of the Company atclose of business on 11 June 2019.
The exchange rate for the conversion of Japanese Yen to Hong Kong dollar for thedividend distributed to the Shareholders in the currency other than Japanese Yen isbased on the average currency rates prevailing five trading days immediately prior to 24
May 2019 (being 17 May 2019 and 20 to 23 May 2019).
CORPORATE GOVERNANCE
During the year ended 31 March 2019, the Company has adopted and complied with all
the applicable principles and code provisions of the Corporate Governance Code andCorporate Governance Report (the “CG Code”) contained in Appendix 14 to the Rules
Governing the Listing of Securities on the Stock Exchange (the “Listing Rules”), with the
exception for code provision A.2.1, which requires the roles of chairman and chief
executive to be separated and should be performed by different individuals, and codeprovision E.1.3, which requires that notice for an annual general meeting should be sent
to the shareholders at least 20 clear business days before the meeting.

– 29 –

Code provision A.2.1
Under code provision A.2.1 of the CG Code, the roles of chairman and chief executive
should be separate and should not be performed by the same individual. Our Chairman
currently holds both positions. Since April 2010, our Chairman has been the key leaderof our Group who has been primarily involved in the formulation of business strategies
and determination of the overall direction of our Group. He has also been chiefly
responsible for our Group’s operations as he directly supervises our Executive Officers(other than himself) and members of our senior management. Taking into account thecontinuation of the implementation of our business plans, the Directors (including our
independent non-executive Directors) consider our Chairman is the best candidate forboth positions and the present arrangements are beneficial to and in the interests of ourCompany and Shareholders as a whole.
Code provision E.1.3
Code provision E.1.3 stipulates that notice for an annual general meeting (the “AGM”)
should be sent to its shareholders by the issuer at least 20 clear business days before
the meeting. The AGM of the Company for the year ended 31 March 2018 was held on
28 June 2018 (“2018 AGM”), while the notice for the 2018 AGM was despatched on 7
June 2018. The above arrangement complied with the articles of incorporation of theCompany (the “Articles of Incorporation”) prepared pursuant to the Companies Act inrespect of the minimum notice period of 21 calendar days for AGM but the notice period
for the 2018 AGM was less than 20 clear business days before the 2018 AGM.
Under the Companies Act and the Articles of Incorporation, the Company is required tohold an AGM within three months after the expiration of each financial year (i.e. on or
before 30 June 2018 for the financial year ended 31 March 2018).
The Companies Act also requires the notice for the AGM to be despatched together
with the audited financial statements under the Japanese Generally Accepted
Accounting Principles, which must be approved by the Board. On the other hand, theannual report must contain audited financial statements prepared under the IFRS as
required under the Listing Rules. As a result, more time was required to finalise theannual report of the Company for the year ended 31 March 2018 which accompaniedthe 2018 AGM notice despatched to the Shareholders.
DIRECTORS’ SECURITIES TRANSACTIONSThe Company has adopted the Model Code for Securities Transactions by Directors of
Listed Issuers as set out in Appendix 10 to the Listing Rules (the “Model Code”) as its
own code of conduct regarding securities transactions by Directors. Having madespecific enquiry with all Directors, the Directors confirmed that they had complied withthe required standard set out in the Model Code and the Company’s code of conduct
during the year ended 31 March 2019.

– 30 –

PURCHASE, SALE OR REDEMPTION OF LISTED SECURITIESThe Company did not redeem any of its listed securities during the year ended 31
March 2019. Neither the Company nor any of its subsidiaries purchased or sold any of
the Company’s listed securities during the year ended 31 March 2019.
AUDIT COMMITTEE
The audit committee of the Company had reviewed, together with the management andexternal auditor, the accounting principles and policies adopted by the Group and theaudited consolidated financial statements for the year ended 31 March 2019.
REVIEW OF THE PRELIMINARY RESULTS ANNOUNCEMENT
The figures in respect of the Group’s consolidated statement of financial position,
consolidated statement of comprehensive income, and the related notes thereto for theyear ended 31 March 2019 as set out in this preliminary results announcement havebeen agreed by the Group’s auditor, PricewaterhouseCoopers, to the amounts set out
in the Group’s audited consolidated financial statements for the year. The work
performed by PricewaterhouseCoopers in this respect did not constitute an assurance
engagement in accordance with Hong Kong Standards on Auditing, Hong Kong
Standards on Review Engagements or Hong Kong Standards on Assurance
Engagements issued by the Hong Kong Institute of Certified Public Accountants andconsequently no assurance has been expressed by PricewaterhouseCoopers on thispreliminary results announcement.
ANNUAL GENERAL MEETING AND RECORD DATE
The annual general meeting of the Company (“2019 AGM”) will be held on 27 June 2019at 1-39 Hohaccho 1-chome, Koriyama-shi, Fukushima, Japan. Notice of the 2019 AGM
will be published and issued to Shareholders in due course. The right to attend and voteat the 2019 AGM will be granted to the Shareholders whose names appear on the
Company’s share register at the close of business on Friday, 21 June 2019.
In order for those Shareholders whose names have not been registered on the
Company’s share register to be eligible to attend and vote at the 2019 AGM, all properly
completed, duly stamped and executed transfer documents accompanied by therelevant share certificates should be lodged with the Company’s share registrar,
Computershare Hong Kong Investor Services Limited at Shops 1712–1716, 17th Floor,
Hopewell Centre, 183 Queen’s Road East, Wan Chai, Hong Kong before 4:30 p.m.
(Hong Kong time) on Friday, 21 June 2019.

– 31 –

PUBLICATION OF ANNUAL RESULTS ANNOUNCEMENT AND ANNUAL REPORTThis annual results announcement is published on the websites of the Stock Exchange(www.hkexnews.hk) and the Company (www.ngch.co.jp), and the annual report of theCompany for the year ended 31 March 2019 containing all the information required by
the Listing Rules will be dispatched to the Shareholders and will be published on therespective websites of the Stock Exchange and the Company in due course.
On behalf of the BoardNIRAKU GC HOLDINGS, INC.*
株式会社ニラク▪ジー▪シー▪ホールディングス
Chairman, Executive Director and Chief Executive Officer
Hisanori TANIGUCHI (formerly known as JEONG Seonggi)
Fukushima, Japan, 24 May 2019
As at the date of this announcement, the executive Director is Hisanori TANIGUCHI(formerly known as JEONG Seonggi); the non-executive Director is Hiroshi BANNAI; andthe independent non-executive Directors are Hiroaki MORITA, Michio MINAKATA andYoshihiro KOIZUMI.
*

for identification purpose only

– 32 –