TOA : Announcement of FY2019 results

Consolidated Financial Results

for the Fiscal Year Ended March 31, 2020

[Japanese GAAP]

May 13, 2020

Company name: TOA Corporation

Stock exchange listing: Tokyo Stock Exchange

Code number: 6809

URL: https://www.toa.jp/

Representative: Kazuhiro Takeuchi, President, CEO

Contact: Keigo Yoshida, General Manager of Accounting & Financial Department

Scheduled date of Ordinary General Meeting of Shareholders: June 23, 2020

Scheduled date of filing annual securities report: June 23, 2020

Scheduled date of commencing dividend payments: June 24, 2020

Availability of supplementary briefing material on financial results: Yes

Schedule of financial results briefing session: Yes (Only in the form of a video posted on the Company's website.)

(Amounts of less than one million yen are rounded down.)

1. Consolidated Financial Results for the Fiscal Year Ended March 31, 2020 (April 1, 2019 to March 31, 2020)

(1) Consolidated Operating Results		(% indicates changes from the previous corresponding period.)
		Net sales		Operating profit	Ordinary profit	Profit attributable to
			owners of parent
	Fiscal year ended	Million yen	%	Million yen	%	Million yen	%	Million yen	%
	March 31, 2020	45,068	(2.7)	3,465	(11.2)	3,577	(12.7)	2,065	(17.5)
	March 31, 2019	46,338	4.9	3,903	11.2	4,099	15.1	2,504	17.1

(Note) Comprehensive income: Fiscal year ended March 31, 2020: ¥2,490 million [217.0 %] Fiscal year ended March 31, 2019: ¥785 million [(82.2) %]

Basic earnings

Diluted earnings

Rate of return

Ordinary profit to

Operating profit

per share

per share

on equity

total assets

to net sales

Fiscal year ended

Yen

Yen

%

%

%

March 31, 2020

60.99

-

4.8

6.1

7.7

March 31, 2019

73.97

-

5.8

7.1

8.4

(Reference) Share of

profit (loss) of entities accounted for using equity method:

Fiscal year ended March 31, 2020: ¥(2) million

Fiscal year ended March 31, 2019: ¥- million

(2) Consolidated Financial Position

Total assets

Net assets

Equity ratio

Net assets

per share

Million yen

Million yen

%

yen

As of March 31, 2020

58,653

44,780

72.9

1,262.02

As of March 31, 2019

57,742

45,689

74.8

1,275.99

(Reference) Equity: As of March 31, 2020: ¥42,756 million

As of March 31, 2019: ¥43,207 million

(3) Consolidated Cash Flows

Cash flows from

Cash flows from

Cash flows from

Cash and

cash equivalents

operating activities

investing activities

financing activities

at end of period

Fiscal year ended

Million yen

Million yen

Million yen

Million yen

March 31, 2020

1,832

(2,558)

(2,746)

16,108

March 31, 2019

3,261

(2,025)

(865)

19,660

1

2. Dividends

		Annual dividends			Total amount	Dividend	Dividend on
	1st	2nd	3rd	Year-			payout ratio	net assets ratio
	quarter- quarter- quarter-	Total		of dividends
	end				(Consolidated)	(Consolidated)
	end	end	end
Fiscal year ended	yen	yen	yen	yen	yen		Million yen	%	%
-	10.00	-	16.00	26.00	880	35.1	2.0
March 31, 2019
Fiscal year ended	-	10.00	-	16.00	26.00	880	42.6	2.0
March 31, 2020
Fiscal year ending									108.4
March 31, 2021	-	10.00	-	10.00	20.00
(Forecast)

Breakdown of the dividends for the fiscal year ended March 31, 2019: Stable dividend ¥20, Performance-based dividend ¥6

Breakdown of the dividends for the fiscal year ended March 31, 2020: Stable dividend ¥20, Performance-based dividend ¥2, Commemorative dividend ¥4

Dividends for the fiscal year ending March 31, 2021 (Forecast) will be determined by taking into account the performances on stable dividend of ¥20, aiming at a consolidated dividend payout ratio of 35%, as specified in "(5) Basic Policy on Distribution of Profits and Dividends for Current and Next Fiscal Year" on page 7.

3. Consolidated Financial Results Forecast for the Fiscal Year Ending March 31, 2021 (April 1, 2020 to March 31, 2021)

(% indicates changes from the previous corresponding period.)

	Net sales	Operating profit	Ordinary profit	Profit attributable to	Basic earnings
	owners of parent	per share
	Million yen	%	Million yen	%	Million yen	%	Million yen	%	Yen
Full year	40,500	(10.1)	700	(79.8)	750	(79.0)	600	(71.0)	18.45

* Notes:

1. Changes in significant subsidiaries during the period under review (changes in specified subsidiaries resulting in changes in scope of consolidation): No
2. Changes in accounting policies, changes in accounting estimates and retrospective restatement
3. 1. Changes in accounting policies due to the revision of accounting standards: Yes
   2. Changes in accounting policies other than 1) above: No
   3. Changes in accounting estimates: No
   4. Retrospective restatement: No
4. Total number of issued shares (common shares)
5. 1. Total number of issued shares at the end of the period (including treasury shares):

March 31, 2020: 34,536,635 shares

March 31, 2019: 34,536,635 shares

1. Total number of treasury shares at the end of the period: March 31, 2020: 657,114 shares
   March 31, 2019: 674,539 shares
2. Average number of shares during the period:

Fiscal year ended March 31, 2020: 33,874,001 shares

Fiscal year ended March 31, 2019: 33,862,209 shares

2

(Reference) Overview of Non-consolidated Financial Results

1. Non-consolidated Financial Results for the Fiscal Year Ended March 31, 2020 (April 1, 2019 to March 31, 2020)

(1) Non-consolidated Operating Results			(% indicates changes from the previous corresponding period.)
			Net sales			Operating profit		Ordinary profit	Profit
	Fiscal year ended		Million yen	%		Million yen	%		Million yen	%	Million yen	%
	March 31, 2020		31,713	(3.4)		1,597	3.7		2,008	(0.7)	1,549	2.1
	March 31, 2019		32,815	4.9		1,540	0.3		2,022	10.2	1,517	7.5
			Basic earnings	Diluted earnings
			per share	per share
	Fiscal year ended		Yen			Yen
	March 31, 2020		45.75			-
	March 31, 2019		44.81			-
(2) Non-consolidated Financial Position
			Total assets	Net assets	Equity ratio	Net assets
			per share
	As of March 31, 2020	Million yen			Million yen		%		Yen
		40,008			32,709		81.8	965.48
	As of March 31, 2019		37,642			31,587		83.9	932.82

(Reference) Equity: As of March 31, 2020: ¥32,709 million As of March 31, 2019: ¥31,587 million

• These financial results are outside the scope of audit by a certified public accountant or an audit corporation.
• Explanation of the proper use of financial results forecast and other notes

Forecasts presented herein are the current prospects based on information currently available and contain elements of uncertainty. Actual results may therefore differ from the above forecasts due to subsequent changes in the circumstances.

In order to prevent the spread of Coronavirus disease (COVID-19), the Company plans to post a financial results briefing video and a supplementary briefing material on financial results on its website instead of holding a financial results briefing session for institutional investors as in the past.

3

Table of Contents
1.	Overview of Operating Results, Etc. .............................................................................................................	5
(1)	Overview of Operating Results for the Fiscal Year Under Review ..........................................................	5
(2)	Overview of Financial Position for the Fiscal Year Under Review...........................................................	6
(3)	Overview of Cash Flows for the Fiscal Year Under Review.....................................................................	6
(4)	Future Outlook ..........................................................................................................................................	6
(5)	Basic Policy on Distribution of Profits and Dividends for Current and Next Fiscal Year.........................	7
2.	Basic Views on the Selection of Accounting Standards ................................................................................	7
3.	Consolidated Financial Statements and Primary Notes .................................................................................	8
(1)	Consolidated Balance Sheets.....................................................................................................................	8
(2)	Consolidated Statements of Income and Comprehensive Income ..........................................................	10
		Consolidated Statements of Income........................................................................................................	10
		Consolidated Statements of Comprehensive Income..............................................................................	11
(3)	Consolidated Statements of Changes in Net Assets ................................................................................	12
(4)	Consolidated Statements of Cash Flows .................................................................................................	14
4.	Non-consolidated Financial Statements.......................................................................................................	15
(1)	Non-consolidated Balance Sheets ...........................................................................................................	15
(2)	Non-consolidated Statements of Income.................................................................................................	17
(3)	Non-consolidated Statements of Changes in Net Assets .........................................................................	18

4

1. Overview of Operating Results, Etc.

(1) Overview of Operating Results for the Fiscal Year Under Review

During the fiscal year ended March 31, 2020, the economy continued to slow down due to factors including the U.S-China trade frictions and uncertainty in the UK after its withdrawal from the EU. In addition, the impact of the novel coronavirus (COVID-19) began to emerge, and the global economy is expected to slow down rapidly.

In such an environment, we engage in activities to further strengthen our "connection with our customers" through interactions with both people and goods in order to realize our corporate value "Smiles for the Public." In the domestic market, we have provided value in line with the social circumstances, including preparation for natural disasters, inbound demand, and work style reform, centered on the disaster reduction and prevention markets, and the transportation infrastructure market. Overseas, we acquired additional shares of a consolidated subsidiary in Singapore, with the aim of expanding our Asia & Pacific business by further accelerating decision making and promoting a business based on local production and local consumption. In addition, we established a joint venture with a Chinese communications equipment manufacturer, with the aim of quickly planning, developing and introducing products based on a locally- focused strategy. We aim to become the leader in the Chinese market in terms of the market share.

As a result, net sales during the fiscal year ended March 31, 2020 amounted to ¥45,068 million (down ¥1,269 million, or 2.7%, year on year). In terms of profits, as selling, general and administrative expenses increased, operating profit amounted to ¥3,465 million (down ¥437 million, or 11.2%, year on year), ordinary profit to ¥3,577 million (down ¥522 million, or 12.7%, year on year), and profit attributable to owners of parent to ¥2,065 million (down ¥438 million, or 17.5%, year on year).

Performance by segment is as follows.

Effective from the fiscal year ended March 31, 2019, the accounting method for reportable segments has changed. As a result of this change, comparison was made with the figures for the same period of the previous fiscal year recalculated to reflect the new segmentation. For details, see the Segment Information below.

(Japan)

Net sales amounted to ¥29,412million (down ¥540 million, or 1.8%, year on year), and segment profit (operating profit) to ¥6,775 million (up ¥163 million, or 2.5%, year on year).

Net sales declined as the increase in sales of "Horn Array Speakers" and "Slim Array Speakers for Disaster Prevention" to municipalities was offset by factors including a decline in the shipments for railway cars. Meanwhile, segment profit increased due to a decline in selling, general, and administrative expenses.

(Asia & Pacific)

Net sales amounted to ¥7,455 million (up ¥272 million, or 3.8%, year on year), and segment profit (operating profit) to ¥1,373 million (up ¥127 million, or 10.3%, year on year).

Net sales and segment profit increased due to the progress of delivery of subway projects and others for the transportation infrastructure markets in Thailand and delivery to large sports facilities and airports in Indonesia.

(Europe, Middle East & Africa)

Net sales amounted to ¥4,381 million (down ¥924 million, or 17.4%, year on year), and segment profit (operating profit) to ¥513 million (down ¥417 million, or 44.9%, year on year).

Net sales and segment profit decreased due to the decline in sales caused by the slowdown of the economies in Europe and the Middle East in addition to the appreciation of yen and a decline in large-scale projects.

5

(The Americas)

Net sales amounted to ¥2,148 million (down ¥25 million, or 1.2%, year on year), and segment profit (operating profit) to ¥138 million (down ¥93 million, or 40.4%, year on year).

Net sales decreased due to the impact of the appreciation of the yen, despite an increase in sales of audio equipment to retailers in the Americas. Segment profit decreased due to a decrease in sales and an increase in selling, general and administrative expenses.

(China & East Asia)

Net sales amounted to ¥1,670 million (down ¥50 million, or 2.9%, year on year), and segment profit (operating profit) to ¥181 million (down ¥20 million, or 10.1%, year on year).

Net sales declined due to the impact of the appreciation of the yen, despite an increase in sales in Taiwan and Hong Kong. Segment profit decreased due to a decrease in sales and an increase in selling, general and administrative expenses.

(2) Overview of Financial Position for the Fiscal Year Under Review

Total assets at the end of the fiscal year ended March 31, 2020 increased ¥910 million from the end of the previous fiscal year to ¥58,653 million. Assets increased due an increase in inventory assets and property, plant and equipment, and other factors, despite decreases in cash and deposits as well as securities. Liabilities increased due to factors including an increase in short-term borrowings and an increase in accounts payable - other due to capital investment. Net assets decreased, due to factors including a decline in capital surplus, despite an increase in retained earnings.

1. Overview of Cash Flows for the Fiscal Year Under Review

Cash and cash equivalents at the end of the fiscal year ended March 31, 2020 (hereinafter "cash") decreased by ¥3,552 million from the end of the previous fiscal year to ¥16,108 million. The status of cash flows and their contributing factors during the fiscal year under review are as follows.

(Cash flows from operating activities)

Net cash provided by operating activities amounted to ¥1,832 million. This was mainly attributable to ¥3,297 million of profit before income taxes, depreciation of ¥1,437 million, an increase of ¥975 million in inventories, and ¥1,106 million of income taxes paid.

(Cash flows from investing activities)

Net cash used in investing activities amounted to ¥2,558 million. This was mainly attributable to the construction of a research and development facility and the purchase of manufacturing equipment that amounted to ¥2,391 million.

(Cash flows from financing activities)

Net cash used in financing activities amounted to ¥2,746 million. This was mainly attributable to ¥879 million of cash dividends paid, and ¥2,458 million used to acquire shares of a subsidiary without a change in the scope of consolidation.

(4) Future Outlook

The Company has been advancing the three-yearmedium-term management plan concluding in March 2021. We have strengthen further our "connection with our customers," by making our products more IoT- compatible as well as by deploying sales and engineering strategies closely matched to customer needs. Furthermore, we have striven to realize the "5 TOAs in the World," in which each global region will become

6

an independent business, by strengthening the marketing function of each, and further accelerating product development to meet each market's needs.

However, looking forward, the novel coronavirus (COVID-19) is spreading around the world, and we expect that the stagnation of global economic activities will have an avoidable impact on the performance of the TOA Group.

Amid this situation, at present, our performance forecasts for the fiscal year ending March 31, 2021 are: Net sales of ¥40,500 million, operating profit of ¥700 million, ordinary profit of ¥750 million, and profit attributable to owners of parent of ¥600 million.

There are possibilities that the Company's earnings will significantly fluctuate based on how the novel coronavirus continues to spread or settles down going forward. For details, please refer to "Notification regarding a Correction of the Medium-Term Management Plan's Results Targets" issued today.

(5) Basic Policy on Distribution of Profits and Dividends for Current and Next Fiscal Year

The Company views an increase of returns of profits to shareholders as an important managerial task. Regarding the distribution of profits, in addition to our basic policy of providing stable dividends, we

endeavor to provide returns to shareholders by taking our business performance into consideration. We also aim to maintain sufficient internal reserves, so as to secure a stable management foundation in the long term, and to raise the competitiveness of the Company through actively carrying out R&D investments. By endeavoring to strengthen our financial structure, we aim to increase our corporate value.

In addition, to further specify our policy of providing dividends based on business performance, we adopt a basic policy of maintaining an annual dividend of ¥20 (Interim dividend: ¥10; Year-end dividend: ¥10), and aim for a consolidated dividend payout ratio of 35% based on our business performance. The amount of dividends paid will also be determined by considering the overall balance with our internal reserves, so as to enable sustainable growth of the Company.

The Company celebrated its 70th anniversary in the fiscal year ended March 31, 2020. To express its appreciation for shareholders' support, the Company decided to pay a commemorative dividend of ¥4 per share along with the year-end dividend for the fiscal year ended March 31, 2020.

For the fiscal year ended March 31, 2020, the Company plans to pay an annual dividend of ¥26 per share (stable annual dividend of ¥20, performance-based dividend of ¥2 and commemorative dividend of ¥4), which includes the interim dividend of ¥10 per share already paid. For the fiscal year ending March 31, 2021, in addition to the stable annual dividend of ¥20 (Interim dividend: ¥10; Year-end dividend: ¥10), we will determine the dividend amount by aiming for a consolidated dividend payout ratio of 35% based on our business performance.

2. Basic Views on the Selection of Accounting Standards

In consideration of the ease of comparison of the consolidated financial statements, in terms of comparison with previous years and comparison with other companies, the TOA Group plans to continue adopting Japanese GAAP in the preparation of its consolidated financial statements.

With regard to the adoption of IFRS, in view of the various circumstances within and outside of Japan, the Group will adopt the IFRS appropriately, as necessary.

7

3. Consolidated Financial Statements and Primary Notes

(1) Consolidated Balance Sheets

				(Million yen)
			As of March 31, 2019	As of March 31, 2020
Assets
Current assets
Cash and deposits	17,014	15,610
Notes and accounts receivable - trade	10,305	10,312
Securities	3,500	1,200
Merchandise and finished goods	6,175	6,845
Work in process	846	1,045
Raw materials and supplies	2,994	3,065
Other	671	880
Allowance for doubtful accounts		(85)	(75)
Total current assets	41,423	38,885
Non-current assets
Property, plant and equipment
Buildings and structures	7,631	10,159
Accumulated depreciation	(5,022)	(3,922)
Buildings and structures, net			2,609	6,237
Machinery, equipment and vehicles	1,579	1,590
Accumulated depreciation		(1,219)	(1,225)
Machinery, equipment and vehicles, net	360	365
Tools, furniture and fixtures			3,818	3,933
Accumulated depreciation	(3,444)	(3,281)
Tools, furniture and fixtures, net			374	651
Land	2,450	2,451
Leased assets	731	1,433
Accumulated depreciation	(351)	(598)
Leased assets, net			380	835
Construction in progress	1,571	38
Total property, plant and equipment			7,747	10,579
Intangible assets
Goodwill	551	507
Software	914	721
Software in progress	42	149
Other	194	220
Total intangible assets			1,703	1,599
Investments and other assets
Investment securities	5,524	6,163
Deferred tax assets	353	334
Retirement benefit asset	15	7
Other	977	1,085
Allowance for doubtful accounts		(1)	(0)
Total investments and other assets	6,869	7,589
Total non-current assets			16,319	19,768
Total assets		57,742	58,653

8

(Million yen)

As of March 31, 2019

As of March 31, 2020

Liabilities

Current liabilities

Notes and accounts payable - trade

Short-term borrowings

Lease obligations

Income taxes payable

Provision for bonuses

Provision for product warranties

Other

Total current liabilities

Non-current liabilities

Lease obligations

Deferred tax liabilities

Retirement benefit liability

Other

Total non-current liabilities

Total liabilities

Net assets

Shareholders' equity

Share capital

Capital surplus

Retained earnings

Treasury shares

Total shareholders' equity

Accumulated other comprehensive income Valuation difference on available-for-sale securities Foreign currency translation adjustment Remeasurements of defined benefit plans

	4,066	3,409
	934	1,915
	107	236
	417	332
	168	157
	14	19
	2,364	3,112
	8,073	9,183
	341	647
	284	466
	2,625	2,841
	727	734
	3,979	4,689
	12,053	13,872
	5,279	5,279
	6,866	5,058
	29,050	30,236
	(394)	(385)
	40,802	40,189
	3,250	3,682
	(868)	(1,009)
	23	(104)

Total accumulated other comprehensive income		2,404	2,567
Non-controlling interests	2,481	2,024
Total net assets		45,689	44,780
Total liabilities and net assets		57,742	58,653

9

(2) Consolidated Statements of Income and Comprehensive Income

Consolidated Statements of Income

	(Million yen)
For the fiscal year ended	For the fiscal year ended
March 31, 2019	March 31, 2020

Net sales

Cost of sales

Gross profit

Selling, general and administrative expenses Operating profit

Non-operating income Interest income Dividend income

Insurance claim and dividend income Other

Total non-operating income Non-operating expenses

Interest expenses Foreign exchange losses

Share of loss of entities accounted for using equity method

Other

Total non-operating expenses Ordinary profit Extraordinary income

Subsidy income

Total extraordinary income

Extraordinary losses

Dismantlement expenses

Loss on liquidation of subsidiaries and associates Total extraordinary losses

Profit before income taxes Income taxes - current Income taxes - deferred Total income taxes Profit

Profit attributable to non-controlling interests Profit attributable to owners of parent

	46,338			45,068
26,152		24,983
	20,185			20,085
16,282		16,620
	3,903			3,465
	31			43
88		95
	27			23
147		99
	295			261
	43			72
42		46
	-		2
12		27
	98			149
4,099		3,577
-		120
	-			120
	-			168
-		232
	-			401
4,099		3,297
	1,105			915
73		61
	1,178			976
2,921		2,320
	417			254
2,504		2,065

10

Consolidated Statements of Comprehensive Income

		(Million yen)
	For the fiscal year ended	For the fiscal year ended
	March 31, 2019	March 31, 2020
Profit	2,921	2,320
Other comprehensive income

Valuation difference on available-for-sale securities

Foreign currency translation adjustment

Share of other comprehensive income of entities accounted for using equity method Remeasurements of defined benefit plans, net of tax

Total other comprehensive income

Comprehensive income

Comprehensive income attributable to

Comprehensive income attributable to owners of parent Comprehensive income attributable to non-controlling interests

		(1,417)			431
		(734)		(139)
		-		0
		16		(121)
		(2,136)			170
		785		2,490
		484		2,228
		301		261

11

(3) Consolidated Statements of Changes in Net Assets

Fiscal Year Ended March 31, 2019 (April 1, 2018 to March 31, 2019)

(Million yen)

Shareholders' equity

Capital

Retained

Treasury

Total

Share capital

shareholders'

surplus

earnings

shares

equity

Balance at beginning of period

5,279

6,866

27,324

(393)

39,077

Changes during period

Dividends of surplus

(778)

(778)

Profit attributable to owners of parent

2,504

2,504

Purchase of treasury shares

(0)

(0)

Disposal of treasury shares

0

0

0

Change in ownership interest of parent

-

due to transactions with non-controlling

interests

Net changes in items other than

shareholders' equity

Total changes during period

-

0

1,725

(0)

1,725

Balance at end of period

5,279

6,866

29,050

(394)

40,802

Accumulated other comprehensive income

Valuation

Remea-

Total

Non- controlling

Foreign currency

accumulated

Total net assets

difference on

surements of

translation

other

interests

available-for-sale

adjustment

defined benefit

comprehensive

securities

plans

income

Balance

at

beginning

of

4,668

(253)

11

4,425

2,283

45,786

period

Changes during period

Dividends of surplus

(778)

Profit

attributable

to

2,504

owners of parent

Purchase

of

treasury

(0)

shares

Disposal

of

treasury

0

shares

Change

in

ownership

interest of parent due to

-

transactions

with

non-

controlling interests

Net changes

in

items

other than shareholders'

(1,417)

(614)

12

(2,020)

197

(1,822)

equity

Total

changes

during

(1,417)

(614)

12

(2,020)

197

(96)

period

Balance at end of period

3,250

(868)

23

2,404

2,481

45,689

12

Fiscal Year Ended March 31, 2019 (April 1, 2019 to March 31, 2020)

																		(Million yen)
												Shareholders' equity
											Capital			Retained		Treasury		Total
										Share capital					shareholders'
										surplus			earnings		shares
															equity
	Balance at beginning of period	5,279	6,866		29,050	(394)		40,802
	Changes during period
	Dividends of surplus					(880)				(880)
	Profit attributable to owners of parent				2,065				2,065
	Purchase of treasury shares							(0)		(0)
	Disposal of treasury shares			13				9		22
	Change in ownership interest of parent		(1,821)							(1,821)
	due to transactions with non-controlling
	interests
	Net changes in items other than
	shareholders' equity
	Total changes during period		-	(1,807)		1,185	8		(613)
	Balance at end of period		5,279	5,058		30,236	(385)		40,189
									Accumulated other comprehensive income
									Valuation	Foreign currency	Remea-			Total		Non- controlling
											accumulated		Total net assets
								difference on	surements of
								translation			other		interests
								available-for-sale	adjustment	defined benefit			comprehensive
									securities	plans
												income
Balance	at	beginning	of		3,250	(868)	23			2,404		2,481		45,689
period
Changes during period
	Dividends of surplus												(880)
	Profit	attributable	to											2,065
	owners of parent
	Purchase	of	treasury											(0)
	shares
	Disposal	of		treasury											22
	shares
	Change	in	ownership
	interest of parent due to											(1,821)
	transactions	with	non-
	controlling interests
	Net changes		in	items		431	(140)	(127)			162		(457)		(294)
	other than shareholders'
	equity
Total	changes		during		431	(140)	(127)			162		(457)		(908)
period
Balance at end of period			3,682	(1,009)	(104)		2,567		2,024		44,780

13

(4) Consolidated Statements of Cash Flows

						(Million yen)
			For the fiscal year ended	For the fiscal year ended
			March 31, 2019	March 31, 2020
Cash flows from operating activities
Profit before income taxes	4,099	3,297
Depreciation				1,068	1,437
Increase (decrease) in retirement benefit liability				(47)	27
Interest and dividend income				(120)	(139)
Foreign exchange losses (gains)				(157)	(17)
Share of loss (profit) of entities accounted for using				-		2
equity method
Interest expenses				43	72
Subsidy income				-	(120)
Increase (decrease) in accounts payable - other			94	(85)
Decrease (increase) in trade receivables				352	(19)
Decrease (increase) in inventories			(1,215)	(975)
Increase (decrease) in trade payables				255	(667)
Other, net			(70)	67
Subtotal				4,302	2,878
Interest and dividends received			118	133
Interest paid				(42)	(72)
Income taxes (paid) refund			(1,117)	(1,106)
Net cash provided by (used in) operating activities				3,261	1,832
Cash flows from investing activities
Payments into time deposits				(827)	(595)
Proceeds from withdrawal of time deposits			749	744
Purchase of property, plant and equipment				(1,615)	(2,391)
Proceeds from sales of property, plant and equipment			3	6
Purchase of intangible assets				(293)	(243)
Other, net			(42)	(79)
Net cash provided by (used in) investing activities				(2,025)	(2,558)
Cash flows from financing activities
Net increase (decrease) in short-term borrowings				100	986
Purchase of treasury shares			(0)	(0)
Proceeds from sales of treasury shares				0	-
Repayments of finance lease obligations			(74)	(315)
Dividends paid				(777)	(879)
Dividends paid to non-controlling interests			(113)	(78)
Payments from changes in ownership interests in				-		(2,458)
subsidiaries that do not result in change in scope of
consolidation
Net cash provided by (used in) financing activities			(865)	(2,746)
Effect of exchange rate change on cash and cash				(380)		(78)
equivalents
Net increase (decrease) in cash and cash equivalents			(10)	(3,552)
Cash and cash equivalents at beginning of period				19,670	19,660
Cash and cash equivalents at end of period			19,660	16,108

14

4. Non-consolidated Financial Statements

(1) Non-consolidated Balance Sheets

					(Million yen)
		As of March 31, 2019	As of March 31, 2020
Assets
Current assets
Cash and deposits			7,226	6,576
Notes receivable - trade			2,492	2,104
Accounts receivable - trade			5,669	5,470
Securities			3,500	1,200
Finished goods			2,829	3,466
Work in process			2	80
Raw materials and supplies			293	262
Prepaid expenses			137	155
Other			254	293
Allowance for doubtful accounts			(50)	(53)
Total current assets			22,355	19,556
Non-current assets
Property, plant and equipment
Buildings, net			1,705	4,710
Structures, net			6	161
Machinery and equipment, net			0	0
Tools, furniture and fixtures, net			135	429
Land			2,217	2,217
Leased assets, net			11	8
Construction in progress			1,446	28
Total property, plant and equipment			5,525	7,557
Intangible assets
Software			779	594
Software in progress			37	149
Other			70	64
Total intangible assets			887	809
Investments and other assets
Investment securities			5,522	6,161
Shares of subsidiaries and associates			2,491	4,949
Investments in capital of subsidiaries and			670		670
associates
Other			191	303
Allowance for doubtful accounts			(1)	(0)
Total investments and other assets			8,875	12,084
Total non-current assets			15,287	20,451
Total assets			37,642	40,008

15

(Million yen)

As of March 31, 2019

As of March 31, 2020

Liabilities

Current liabilities

Accounts payable - trade

Lease obligations

Accounts payable - other

Income taxes payable

Accrued expenses

Other

Total current liabilities

Non-current liabilities

Lease obligations

Provision for retirement benefits

Deferred tax liabilities

Other

Total non-current liabilities

Total liabilities

Net assets

Shareholders' equity

Share capital

Capital surplus

Legal capital surplus

Other capital surplus

Total capital surpluses

Retained earnings

Legal retained earnings

Other retained earnings

General reserve

Retained earnings brought forward

	1,459	1,580
	2	2
	525	1,629
	206	229
	533	480
	207	85
	2,935	4,008
	9	6
	2,204	2,174
	293	513
	613	595
	3,120	3,289
	6,055	7,298
	5,279	5,279
	6,808	6,808
	0	13
	6,808	6,822
	679	679
	2,930	2,930
	13,032	13,701

Total retained earnings		16,642	17,311
Treasury shares	(394)	(385)
Total shareholders' equity		28,336	29,027
Valuation and translation adjustments
Valuation difference on available-for-sale securities		3,250	3,682
Total valuation and translation adjustments	3,250	3,682
Total net assets		31,587	32,709
Total liabilities and net assets		37,642	40,008

16

(2) Non-consolidated Statements of Income

				(Million yen)
			For the fiscal year ended	For the fiscal year ended
			March 31, 2019	March 31, 2020
Net sales			32,815	31,713
Cost of sales	20,594	19,154
Gross profit			12,221	12,558
Selling, general and administrative expenses			10,680	10,960
Operating profit			1,540	1,597
Non-operating income
Interest and dividend income			388	417
Foreign exchange gains	45	-
Miscellaneous income			57	66
Total non-operating income	490	484
Non-operating expenses
Interest expenses	4	5
Foreign exchange losses			-	62
Miscellaneous loss	4	5
Total non-operating expenses			8	73
Ordinary profit			2,022	2,008
Extraordinary income
Subsidy income	-	120
Total extraordinary income			-	120
Extraordinary losses
Dismantlement expenses			-	168
Total extraordinary losses			-	168
Profit before income taxes			2,022	1,960
Income taxes - current			402	387
Income taxes - deferred			102	23
Total income taxes			504	410
Profit			1,517	1,549

17

(3) Non-consolidated Statements of Changes in Net Assets

Fiscal Year Ended March 31, 2019 (April 1, 2018 to March 31, 2019)

(Million yen)

						Shareholders' equity
			Capital surplus			Retained earnings
	Share							Other retained earnings
	Legal		Other		Total	Legal		Retained	Total retained
	capital	capital		capital		capital	retained	General	earnings
			earnings
		surplus		surplus		surplus	earnings	reserve	brought
									forward
Balance at	5,279	6,808		0		6,808	679	2,930	12,293	15,903
beginning of period
Changes during
period
Dividends of									(778)	(778)
surplus
Profit									1,517	1,517
Purchase of
treasury shares
Disposal of				0		0
treasury shares
Net changes in
items other than
shareholders'
equity
Total changes	-	-		0		0	-	-	738	738
during period
Balance at end of	5,279	6,808		0		6,808	679	2,930	13,032	16,642
period

18

					(Million yen)
	Shareholders' equity	Valuation and translation adjustments
			Valuation	Total valuation and	Total net assets
	Treasury	Total shareholders'	difference on
	translation
	shares	equity	available-for-sale
	adjustments
			securities
Balance at beginning of	(393)	27,598	4,668	4,668	32,266
period
Changes during period
Dividends of surplus		(778)			(778)
Profit		1,517			1,517
Purchase of treasury	(0)	(0)			(0)
shares
Disposal of treasury	0	0			0
shares
Net changes in items			(1,417)	(1,417)	(1,417)
other than
shareholders' equity
Total changes during	(0)	738	(1,417)	(1,417)	(679)
period
Balance at end of period	(394)	28,336	3,250	3,250	31,587

19

Fiscal Year Ended March 31, 2020 (April 1, 2019 to March 31, 2020)

									(Million yen)
					Shareholders' equity
			Capital surplus			Retained earnings
	Share						Other retained earnings
	Legal		Other	Total	Legal		Retained		Total
	capital	capital		capital	capital	retained	General	earnings		retained
		surplus		surplus	surplus	earnings	reserve	brought		earnings
								forward
Balance at	5,279	6,808		0	6,808	679	2,930	13,032		16,642
beginning of period
Changes during
period
Dividends of								(880)		(880)
surplus
Profit								1,549		1,549
Purchase of
treasury shares
Disposal of				13	13
treasury shares
Net changes in
items other than
shareholders'
equity
Total changes	-	-		13	13	-	-	669		669
during period
Balance at end of	5,279	6,808		13	6,822	679	2,930	13,701		17,311
period

20

					(Million yen)
	Shareholders' equity	Valuation and translation adjustments
			Valuation	Total valuation and	Total net assets
	Treasury	Total shareholders'	difference on
	translation
	shares	equity	available-for-sale
	adjustments
			securities
Balance at beginning of	(394)	28,336	3,250	3,250	31,587
period
Changes during period
Dividends of surplus		(880)			(880)
Profit		1,549			1,549
Purchase of treasury	(0)	(0)			(0)
shares
Disposal of treasury	9	22			22
shares
Net changes in items			431	431	431
other than
shareholders' equity
Total changes during	8	691	431	431	1,122
period
Balance at end of period	(385)	29,027	3,682	3,682	32,709

21