Seiko Epson : Ⅴ. Financial Information

1. Financial Information

1. Methods for preparing consolidated financial statements

1. The Company's consolidated financial statements are prepared in accordance with International Financial Reporting Standards (hereinafter "IFRS") as issued by the International Accounting Standards Board which are applied based on the provision of Article 93 of Ordinance on Terminology, Forms and Preparation Methods of Consolidated Financial Statements (Ministry of Finance Order No. 28 of 1976).
2. Figures less than one million yen are rounded down in the Company's consolidated and non-consolidated financial statements.

1. Note on independent audit

In accordance with the provision of Article 193-2 Paragraph 1 of the Financial Instruments and Exchange Law, the Company received audit of its consolidated financial statements of the consolidated fiscal year (from April 1, 2021 to March 31, 2022) from Ernst & Young ShinNihon LLC.

3. Remarkable efforts to ensure fair presentation of consolidated financial statements, etc. and arrangements of internal system to prepare consolidated financial statements, etc. fairly in accordance with IFRS

To ensure the appropriateness of its consolidated financial statements, the Company takes special measures and has arranged a structure that enables the appropriate preparation of consolidated financial statements and other materials based on IFRS. Details are as follows.

1. In order to arrange a structure that enables details regarding accounting standards, etc., to be properly understood and changes to accounting standards, etc., to be handled with accuracy, the Company has joined the Financial Accounting Standards Foundation and receives information regarding accounting standards.
   It also participates in seminars, etc. organized by the Financial Accounting Standards Foundation, audit corporation and others.
2. When applying IFRS, the Company obtains press releases and statements of standards issued by the International Accounting Standards Board as needed to properly understand the latest standards. Also, to ensure the appropriate preparation of consolidated financial statements, etc., based on IFRS, the Company has created Group standards in compliance with IFRS and applies consistent accounting treatments across the entire Group based on these.

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Consolidated financial statements, etc.

(1) Consolidated financial statements

Consolidated Statement of Financial Position

Years ended March 31, 2021 and 2022:

		Millions of yen		Thousands of
			U.S. dollars
	Notes	March 31,		March 31,		March 31,
	2021	2022	2022
Assets
Current assets
Cash and cash equivalents	8, 35	304,007	335,239	2,741,344
Trade and other receivables	9, 35	161,332	168,221	1,375,590
Inventories	10	256,366	308,385	2,521,751
Income tax receivables		3,518	5,057	41,352
Other financial assets	11, 35	1,156	769	6,288
Other current assets	12	13,160		16,797		137,353
Subtotal		739,540	834,469	6,823,689
Assets held for sale		457		-		-
Total current assets		739,997	834,469	6,823,689
Non-current assets
Property, plant and equipment	13, 16, 21	344,637	343,172	2,806,214
Intangible assets	14	27,976	24,218	198,037
Investment property	15	1,246	1,108	9,060
Investments accounted for using the equity		1,718	2,040	16,681
method
Net defined benefit assets	23	140	2,278	18,627
Other financial assets	11, 35	20,213	20,192	165,115
Other non-current assets	12	1,614	4,181	34,189
Deferred tax assets	17	23,770		34,757		284,217
Total non-current assets		421,317	431,950	3,532,177
Total assets		1,161,314		1,266,420		10,355,875

105

		Millions of yen		Thousands of
			U.S. dollars
	Notes	March 31,		March 31,		March 31,
	2021	2022	2022
Liabilities and equity
Liabilities
Current liabilities
Trade and other payables	18, 35	134,149	146,201	1,195,527
Income tax payables		7,305	12,233	100,032
Bonds issued, borrowings and lease liabilities	19, 35	28,127	26,297	215,038
Other financial liabilities	35	2,361	4,497	36,773
Provisions	20	11,014	10,993	89,892
Other current liabilities	22	122,973	131,817	1,077,904
Subtotal		305,931	332,040	2,715,185
Liabilities directly associated with assets held for		12	-	-
sale
Total current liabilities		305,943	332,040	2,715,185
Non-current liabilities
Bonds issued, borrowings and lease liabilities	19, 35	237,780	216,853	1,773,268
Other financial liabilities	35	2,730	3,788	30,975
Net defined benefit liabilities	23	33,087	24,210	197,972
Provisions	20	7,757	8,042	65,761
Other non-current liabilities	22	13,483	13,680	111,865
Deferred tax liabilities	17	7,582		2,064		16,877
Total non-current liabilities		302,421	268,640	2,196,745
Total liabilities		608,365	600,680	4,911,930
Equity
Share capital	24	53,204	53,204	435,064
Capital surplus	24	84,418	84,010	686,973
Treasury shares	24	(40,874)	(40,808)	(333,698)
Other components of equity	24	54,869	89,068	728,334
Retained earnings		399,306		480,154		3,926,355
Equity attributable to owners of the parent		550,924	665,628	5,443,028
company
Non-controlling interests		2,025		112		915
Total equity		552,949	665,740	5,443,944
Total liabilities and equity		1,161,314		1,266,420		10,355,875

106

Consolidated Statement of Comprehensive Income

Years ended March 31, 2021 and 2022:

							Thousands of
		Millions of yen			U.S. dollars
		Year ended			Year ended
		March 31,			March 31,
	Notes	2021			2022		2022
Revenue	7, 26	995,940			1,128,914	9,231,449
Cost of sales	10, 13, 14, 28	(643,563)			(710,462)		(5,809,649)
Gross profit		352,377			418,451	3,421,792
Selling, general and administrative expenses	13, 14, 27, 28	(290,735)			(328,814)	(2,688,805)
Other operating income	29	3,225			10,214	83,522
Other operating expense	13, 16, 30	(17,213)			(5,372)		(43,928)
Profit from operating activities		47,654			94,479	772,581
Finance income	31	1,317			4,698	38,416
Finance costs	31	(4,137)			(2,128)	(17,401)
Share of profit of investments accounted for using the		99			113	924
equity method
Profit before tax		44,933			97,162	794,521
Income taxes	17	(13,937)			(4,859)		(39,733)
Profit for the period		30,995			92,302	754,779
Profit for the period attributable to:
Owners of the parent company		30,922			92,288	754,665
Non-controlling interests		73			14		114
Profit for the period		30,995			92,302		754,779

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Other comprehensive income

Items that will not be reclassified subsequently to profit or loss, net of tax

Remeasurement of net defined benefit liabilities (assets) Net gain (loss) on revaluation of financial assets measured at FVTOCI (Note)

Subtotal

Items that may be reclassified subsequently to profit or loss, net of tax

Exchange differences on translation of foreign operations

Net changes in fair value of cash flow hedges

Share of other comprehensive income of investments accounted for using the equity method

Subtotal

Total other comprehensive income, net of tax

Total comprehensive income for the period

Total comprehensive income for the period attributable to:

Owners of the parent company Non-controlling interests

Total comprehensive income for the period

						Thousands of
	Millions of yen			U.S. dollars
	Year ended			Year ended
	March 31,			March 31,
Notes	2021			2022		2022
32	20,220			10,541	86,196
32	1,505			(199)	(1,627)
	21,726			10,341	84,561
32	17,172			34,573	282,713
32	(1,130)			(1,085)	(8,872)
32	54			95	776
	16,096			33,582	274,609
	37,822			43,924	359,179
	68,818			136,226		1,113,958
	68,564			136,206	1,113,795
	254			20		163
	68,818			136,226		1,113,958

(Note) FVTOCI: Fair Value Through Other Comprehensive Income

Earnings per share for the period:

Basic earnings per share for the period Diluted earnings per share for the period

		Yen		U.S. dollars
		Year ended		Year ended
		March 31,		March 31,
Notes	2021			2022		2022
33	89.38	266.73	2.18
33	89.35	266.64	2.18

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