Nisshin Seifun : Securities Report 177th Fiscal Term (April 1, 2020 to March 31, 2021)

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.

177th Fiscal Term (April 1, 2020 to March 31, 2021)

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 ........................................................................................................................................	14
(3)	Management's Analysis of Financial Position, Performance and Cash Flows............................................................	19
(4)	Legal and Contractual Matters.................................................................................................................................	28
(5)	Research and Development......................................................................................................................................	29
[3]	Facilities and Capital Expenditures..........................................................................................................................	31
(1)	Capital Expenditures ...............................................................................................................................................	31
(2)	Principal Facilities...................................................................................................................................................	32
(3)	Facility Construction and Disposal Plans .................................................................................................................	35
[4]	Other Matters Related to Nisshin Seifun Group Inc. ...............................................................................................	36
(1)	Share-Related Matters .............................................................................................................................................	36
(2)	Acquisitions of Treasury Shares...............................................................................................................................	56
(3)	Dividend Policy ......................................................................................................................................................	57
(4)	Corporate Governance and Other Matters ................................................................................................................	58
[5]	Financial Accounts ....................................................................................................................................................	85
(1)	Consolidated Financial Statements, etc. ...................................................................................................................	86
(2)	Non-consolidated Financial Statements, etc. ..........................................................................................................	132
[6]	Stock-related Administration..................................................................................................................................	143
[7]	Corporate Reference Data ......................................................................................................................................	144
(1)	Information on the Parent Company of Nisshin Seifun Group Inc...........................................................................	144
(2)	Other Reference Data ............................................................................................................................................	144
Part B: Information on Corporate Guarantor for Nisshin Seifun Group Inc. ........................................................................	145

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 25, 2021
Fiscal period	April 1, 2020 to March 31, 2021 (177th fiscal term)
Company name	NISSHIN SEIFUN GROUP INC.
Representative	Nobuki Kemmoku (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		173rd	174th	175th	176th	177th
Years ended March 31	2017	2018	2019	2020	2021
Net sales	(millions	532,040	540,094	565,343	712,180	679,495
of yen)
Ordinary profit	(millions	30,329	31,800	32,062	31,434	29,886
of yen)
Profit attributable to	(millions	19,466	21,339	22,268	22,407	19,011
owners of parent	of yen)
Comprehensive income	(millions	28,457	25,148	17,043	1,347	49,252
of yen)
Net assets	(millions	406,805	413,794	418,848	409,042	444,774
of yen)
Total assets	(millions	555,337	591,512	594,754	666,215	687,415
of yen)
Net assets per share	(yen)	1,303.45	1,344.68	1,359.49	1,328.71	1,456.37
Earnings per share	(yen)	64.50	71.47	74.98	75.40	63.95
Fully diluted earnings per	(yen)	64.43	71.40	74.90	75.35	63.94
share
Equity ratio	(%)	70.9	67.5	67.9	59.3	63.0
Return on equity	(%)	5.1	5.4	5.5	5.6	4.6
Price-earnings ratio (p/e)	(times)	25.75	29.51	33.88	23.90	28.93
Cash flows from	(millions	35,361	42,869	39,873	38,420	49,506
operating activities	of yen)
Cash flows from	(millions	(5,240)	(18,067)	(19,184)	(96,844)	(17,105)
investing activities	of yen)
Cash flows from	(millions	(11,470)	(18,593)	(10,567)	8,337	(31,264)
financing activities	of yen)
Cash and cash	(millions	90,837	98,461	107,374	56,550	59,152
equivalents at end of year	of yen)
Number of employees		6,324	6,545	6,760	8,962	8,951
[average number of	(persons)	[2,089]	[2,351]	[2,622]	[10,200]	[10,258]
part-time employees]

Notes:

1. Consumption taxes and other taxes are not included in net sales.
2. When calculating net assets per share from the 174th fiscal term, Company shares held by The Master Trust Bank of Japan, Ltd. as trust assets for the stock-based remuneration plan are included in the treasury shares excluded from the number of shares of common stock issued and outstanding at the end of the fiscal year. Furthermore, when calculating earnings per share and fully diluted earnings per share, Company shares held by The Master Trust Bank of Japan, Ltd. as trust assets for the stock-based remuneration plan are included in the treasury shares excluded when calculating the average number of shares of common stock during the fiscal year.
3. "Partial Amendments to Accounting Standard for Tax Effect Accounting" (ASBJ Statement No. 28, February 16, 2018) has been applied from the start of the 175th fiscal term. As a result, the Company has adopted a methodology whereby deferred tax assets are disclosed under "Investments and other assets," and deferred tax liabilities are disclosed under "Non-current liabilities."
   Principal management indicators prior to the 174th fiscal term are shown following retroactive restatement of relevant figures based on this methodology.

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2. Non-consolidated business performance indicators

Fiscal term		173rd	174th	175th	176th	177th
Years ended March 31	2017	2018	2019	2020	2021
Net sales	(millions	25,221	30,056	25,077	20,068	24,335
of yen)
Ordinary profit	(millions	14,509	18,911	13,874	8,190	13,320
of yen)
Profit	(millions	14,608	19,556	14,987	8,460	13,030
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	295,488	299,620	300,019	293,079	304,725
of yen)
Total assets	(millions	329,827	336,153	371,633	385,798	402,329
of yen)
Net assets per share	(yen)	977.65	1,008.14	1,008.91	985.14	1,024.05
Total dividends per share		26.00	29.00	32.00	34.00	37.00
(interim dividend	(yen)	(13.00)	(14.00)	(16.00)	(17.00)	(17.00)
amount)
Earnings per share	(yen)	48.39	65.48	50.44	28.46	43.82
Fully diluted earnings per	(yen)	48.34	65.41	50.39	28.44	43.81
share
Equity ratio	(%)	89.5	89.1	80.7	75.9	75.7
Return on equity	(%)	5.1	6.6	5.0	2.9	4.4
Price-earnings ratio (p/e)	(times)	34.33	32.21	50.36	63.32	42.22
Dividend payout ratio	(%)	53.7	44.3	63.4	119.5	84.4
Number of employees		297	305	337	342	355
[average number of	(persons)	[30]	[38]	[44]	[49]	[55]
part-time employees]
Total shareholder return	(%)	94.3	121.0	146.8	107.5	112.2
(Benchmark: TOPIX	(%)	(114.7)	(132.9)	(126.2)	(114.2)	(162.3)
Total Return Index)
Share-price highs	(yen)	1,895	2,334	2,573	2,677	1,950
Share-price lows	(yen)	1,444	1,631	2,078	1,461	1,518
Notes:

1. Consumption taxes and other taxes are not included in net sales.
2. Share-pricehighs and lows are prices for the Company's shares listed on the First Section of the Tokyo Stock Exchange.
3. When calculating net assets per share from the 174th fiscal term, Company shares held by The Master Trust Bank of Japan, Ltd. as trust assets for the stock-based remuneration plan are included in the treasury shares excluded from the number of shares of common stock issued and outstanding at the end of the fiscal year. Furthermore, when calculating earnings per share and fully diluted earnings per share, Company shares held by The Master Trust Bank of Japan, Ltd. as trust assets for the stock-based remuneration plan are included in the treasury shares excluded when calculating the average number of shares of common stock during the fiscal year.
4. "Partial Amendments to Accounting Standard for Tax Effect Accounting" (ASBJ Statement No. 28, February 16, 2018) has been applied from the start of the 175th fiscal term. As a result, the Company has adopted a methodology whereby deferred tax assets are disclosed under "Investments and other assets," and deferred tax liabilities are disclosed under "Non-current liabilities."
   Principal management indicators prior to the 174th fiscal term year are shown following retroactive restatement of relevant figures based on this accounting standard.

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