Nisshin Seifun : Securities Report 178th Fiscal Term (April 1, 2021 to March 31, 2022)

Disclaimer: This document is a translation of the Japanese original. The Japanese original has been disclosed in Japan in accordance with Japanese accounting standards and the Financial Instruments and Exchange Act. This document

does not contain or constitute any guarantee and the Company will not compensate any losses and/or damage stemming from actions taken based on this document. In the case that there is any discrepancy between the Japanese original and this document, the Japanese original is assumed to be correct.

178th Fiscal Term (April 1, 2021 to March 31, 2022)

Securities Report

Nisshin Seifun Group Inc.

		Contents
			Page
Report Data.....................................................................................................................................................................	2
Part A: Company Information.................................................................................................................................................	1
[1]	Company Overview.....................................................................................................................................................	1
(1)	Principal Business Performance Indicators.................................................................................................................	1
(2)	History......................................................................................................................................................................	3
(3)	Business Overview....................................................................................................................................................	5
(4)	Subsidiaries and Affiliates .........................................................................................................................................	8
(5)	Employees ..............................................................................................................................................................	10
[2]	Review of Operations and Financial Position ...........................................................................................................	11
(1)	Management Policies, Management Environment and Issues to be Addressed ..........................................................	11
(2)	Business and Other Risks ........................................................................................................................................	16
(3)	Management's Analysis of Financial Position, Performance and Cash Flows............................................................	27
(4)	Legal and Contractual Matters.................................................................................................................................	35
(5)	Research and Development......................................................................................................................................	36
[3]	Facilities and Capital Expenditures..........................................................................................................................	38
(1)	Capital Expenditures ...............................................................................................................................................	38
(2)	Principal Facilities...................................................................................................................................................	39
(3)	Facility Construction and Disposal Plans .................................................................................................................	41
[4]	Other Matters Related to Nisshin Seifun Group Inc. ...............................................................................................	42
(1)	Share-Related Matters .............................................................................................................................................	42
(2)	Acquisitions of Treasury Shares...............................................................................................................................	58
(3)	Dividend Policy ......................................................................................................................................................	59
(4)	Corporate Governance and Other Matters ................................................................................................................	60
[5]	Financial Accounts ....................................................................................................................................................	87
(1)	Consolidated Financial Statements, etc. ...................................................................................................................	88
(2)	Non-consolidated Financial Statements, etc. ..........................................................................................................	138
[6]	Stock-related Administration..................................................................................................................................	149
[7]	Corporate Reference Data ......................................................................................................................................	150
(1)	Information on the Parent Company of Nisshin Seifun Group Inc...........................................................................	150
(2)	Other Reference Data ............................................................................................................................................	150
Part B: Information on Corporate Guarantor for Nisshin Seifun Group Inc. ........................................................................	151

Report Data

Document type	Securities Report (regulatory filing)
Mandatory provision	Financial Instruments and Exchange Act, Article 24, Paragraph 1
Filing submitted to	Director, Kanto Local Finance Bureau
Date of submission	June 28, 2022
Fiscal period	April 1, 2021 to March 31, 2022 (178th fiscal term)
Company name	NISSHIN SEIFUN GROUP INC.
Representative	Kenji Takihara (Representative Director and President)
Head office address	25, Kanda-Nishiki-cho1-chome,Chiyoda-ku, Tokyo Japan
Telephone	[phone]
Administrative contact	Keiji Nigauri
	(General Manager, Accounting Department, Finance and Accounting Division)
Nearest available location	25, Kanda-Nishiki-cho1-chome,Chiyoda-ku, Tokyo Japan
Telephone	[phone]
Administrative contact	Keiji Nigauri
	(General Manager, Accounting Department, Finance and Accounting Division)
Locations where filings are available for	Tokyo Stock Exchange, Inc.
public inspection	(2-1,Nihonbashi-Kabutocho,Chuo-ku, Tokyo)

Part A: Company Information

[1] Company Overview

1. Principal Business Performance Indicators

1. Consolidated business performance indicators

Fiscal term		174th	175th	176th	177th	178th
Years ended March 31	2018	2019	2020	2021	2022
Net sales	(millions	540,094	565,343	712,180	679,495	679,736
of yen)
Ordinary profit	(millions	31,800	32,062	31,434	29,886	32,626
of yen)
Profit attributable to	(millions	21,339	22,268	22,407	19,011	17,509
owners of parent	of yen)
Comprehensive income	(millions	25,148	17,043	1,347	49,252	28,892
of yen)
Net assets	(millions	413,794	418,848	409,042	444,774	460,643
of yen)
Total assets	(millions	591,512	594,754	666,215	687,415	723,073
of yen)
Net assets per share	(yen)	1,344.68	1,359.49	1,328.71	1,456.37	1,510.35
Earnings per share	(yen)	71.47	74.98	75.40	63.95	58.88
Fully diluted earnings per	(yen)	71.40	74.90	75.35	63.94	58.88
share
Equity ratio	(%)	67.5	67.9	59.3	63.0	62.1
Return on equity	(%)	5.4	5.5	5.6	4.6	4.0
Price-earnings ratio (p/e)	(times)	29.51	33.88	23.90	28.93	28.97
Cash flows from	(millions	42,869	39,873	38,420	49,506	41,833
operating activities	of yen)
Cash flows from	(millions	(18,067)	(19,184)	(96,844)	(17,105)	(15,517)
investing activities	of yen)
Cash flows from	(millions	(18,593)	(10,567)	8,337	(31,264)	(17,850)
financing activities	of yen)
Cash and cash	(millions	98,461	107,374	56,550	59,152	68,728
equivalents at end of year	of yen)
Number of employees		6,545	6,760	8,962	8,951	8,918
[average number of	(persons)	[2,351]	[2,622]	[10,200]	[10,258]	[9,794]
part-time employees]

Note: "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020) and relevant implementation guidance has been applied from the start of the 178th fiscal term. Principal business performance indicators for the fiscal year ended March 31, 2022 reflect the application of this accounting standard.

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2. Non-consolidated business performance indicators

Fiscal term		174th	175th	176th	177th	178th
Years ended March 31	2018	2019	2020	2021	2022
Net sales	(millions	30,056	25,077	20,068	24,335	29,445
of yen)
Ordinary profit	(millions	18,911	13,874	8,190	13,320	16,772
of yen)
Profit	(millions	19,556	14,987	8,460	13,030	16,831
of yen)
Paid-in capital	(millions	17,117	17,117	17,117	17,117	17,117
of yen)
Shares issued and	(thousand	304,357	304,357	304,357	304,357	304,357
outstanding	shares)
Net assets	(millions	299,620	300,019	293,079	304,725	308,172
of yen)
Total assets	(millions	336,153	371,633	385,798	402,329	380,464
of yen)
Net assets per share	(yen)	1,008.14	1,008.91	985.14	1,024.05	1,035.63
Total dividends per share		29.00	32.00	34.00	37.00	39.00
(interim dividend	(yen)	(14.00)	(16.00)	(17.00)	(17.00)	(19.00)
amount)
Earnings per share	(yen)	65.48	50.44	28.46	43.82	56.59
Fully diluted earnings per	(yen)	65.41	50.39	28.44	43.81	56.59
share
Equity ratio	(%)	89.1	80.7	75.9	75.7	81.0
Return on equity	(%)	6.6	5.0	2.9	4.4	5.5
Price-earnings ratio (p/e)	(times)	32.21	50.36	63.32	42.22	30.15
Dividend payout ratio	(%)	44.3	63.4	119.5	84.4	68.9
Number of employees		305	337	342	355	372
[average number of	(persons)	[38]	[44]	[49]	[55]	[60]
part-time employees]
Total shareholder return	(%)	128.7	156.6	114.2	119.3	113.0
(Benchmark: TOPIX	(%)	(115.8)	(110.0)	(99.6)	(141.5)	(144.3)
Total Return Index)
Share-price highs	(yen)	2,334	2,573	2,677	1,950	1,953
Share-price lows	(yen)	1,631	2,078	1,461	1,518	1,547
Notes:

1. Share-pricehighs and lows are prices for the Company's shares listed on the First Section of the Tokyo Stock Exchange.
2. "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020) and relevant implementation guidance has been applied from the start of the 178th fiscal term. Principal business performance indicators for the fiscal year ended March 31, 2022 reflect the application of this accounting standard.

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