Consolidated Financial Results [Japanese GAAP]
for the Second Quarter of the Fiscal Year Ending January 20, 2023
August 25, 2022
Takasho Co., Ltd.
Stock code:
7590
Stock Exchange Listing:
Tokyo
URL:
https://takasho.co.jp/en
Telephone:+81-73-482-4128
Representative: Nobuo Takaoka, President & CEO
For inquiries:
Atsushi Inoue, Corporate Officer, Corporate Management Headquarters Vice Director
Scheduled date to submit statutory quarterly financial report:
September 1, 2022
Scheduled date of starting payment of dividend:
N/A
Availability of supplementary explanatory material on quarterly results:
Yes
Quarterly results briefing:
Yes (only forinstitutional investors
and analysts)
This is a translation of the original release in Japanese. In the event of any discrepancy, the original release inJapanese shall prevail.
1. Consolidated Financial Results for the Six Months Ended July 20, 2022 (From January 21, 2022, to July20, 2022)*Figures are rounded down to the nearest million yen, except share and per share data*“ %” indicates year-on-year changes from the previous corresponding quarter(1) Consolidated Operating Results（Cumulative）
Net income
Net sales
Operating income
Ordinary income attributable to ownersof the parent
Million yen%
Million yen%
Million yen%
Million yen%
FY2023 2Q(Six months ended July
11,022 △2.2
786 △32.4
1,098 △10.5
679 △21.5
20, 2022)
FY2022 2Q(Six months ended July
11,270
16.1
1,163
42.5
1,227
62.7
865
61.5
20, 2021)(Note) Comprehensive income:
FY2023 2Q (Six months ended July 20, 2022): 1,396 million yen (16.6%),
FY2022 2Q (Six months ended July 20, 2021): 1,196 million yen (153.8 %)FY2023 2Q(Six months ended July20, 2022)
FY2022 2Q(Six months ended July20, 2021)

Basic earnings
per share

Diluted earnings
per share

Yen

Yen
38.75

38.73

59.34

59.22

(2) Consolidated Financial Position
Total assets
As of the end ofMillion yen
FY2023 2Q(As of July 20, 2022)
26,108FY2022 4Q(As of January 20,
23,6652022)

Net assets
Million yen

Shareholders’ equity
ratio

%

14,06053.4

13,06454.8

(Ref.) Shareholders’ equity amount:
FY2023 2Q (As of Jul. 20, 2022): 13,935 million yen
FY2022 4Q (As of Jan. 20, 2022): 12,957 million yen
2. Dividends
1st quarter
Yen

Annual cash dividends per share
2nd quarter3rd quarter
Year-end
Yen
Yen
Yen

FY2022 4Q
0.00－－
ended Jan. 20, 2022
FY2023 2Q
0.00－
ended Jul. 20, 2022
FY2022 4Q
ending Jan. 20, 2023－
(forecast)(Note) Revisions to the dividends forecast since the latest announcement: None

Total
Yen

23.00

23.00

23.00

23.00

3. Forecast for the Fiscal Year Ending January 20, 2023 (From Jan. 21, 2022, to Jan. 20, 2023)* Figures are rounded down to the nearest million yen, except share and per share data
* “ %” indicates year-on-year changes from the previous corresponding period
Net income
Basic
Operating
Ordinary
attributable to
Net sales
Earnings
IncomeIncomeowners of the
Per Share
parent company
Million yen % Million yen % Million yen % Million yen %Yen
FY2023 4Q
23,204 11.7
1,568 6.4
1,639 7.1
1,184 18.3
67.55
(full year)(Notes) Revisions to the forecast since the latest announcement: None

※ Notes;(1) Changes in Significant Subsidiaries during the Current Quarter
Changes in specified subsidiaries that caused a change in the scope of consolidation: None
Newly included companies: None
Newly excluded companies: None
(2) Simplified Accounting Procedures and Specific Accounting Procedures: None
(3) Changes in Accounting Policies and Accounting Estimates(i) Changes in accounting policies as required by newly promulgated account pronouncement: Yes(ii) Changes other than (i) above: None(iii) Changes in accounting estimates: None(iv) Restatement: None
(4) Number of Shares Outstanding (Ordinary Shares)

Number of shares outstanding at end of period(Treasury shares included)
Number of treasury shares at end of period

Average number of shares during 2Q

FY2023 2Q(As of Jul. 20, 2022)

FY2022 4Q(As of Jan.21, 2022)

17,590,114

17,590,114

57,578FY2023 2Q(From Jan.21, 2022,
to Jul. 20, 2022)
17,529,221

63,578FY2022 1Q(From Jan.21,2021,
to Jul. 20, 2021)
14,578,303* This quarterly financial results report is out scope of the quarterly review by a certified public accountant nor
audit firm.
* Explanation on appropriate use of performance forecasts and other special notes.
The performance forecast described in this report are based on information that is available to the Group, as wellas certain assumptions and estimates that are deemed to be reasonable, and we make no assurance that suchdescriptions prove to be correct. Actual figures may significantly differ due to various factors. For information
regarding the forecast of consolidated financial results, due attention should be paid to "Explanation of ForwardLooking Statements" on page 3 of the attached documents.

Table of Contents
1. Status of the Group(1) Business Overview and Results for the Second Fiscal Quarter…………………………………….…
(2) Explanation on the Financial Position …………………………………………………………………
(3) Explanation on Future Performance Forecast …………………………………………………………
2. Quarterly Financial Statements and Notes

133(1) Quarterly Consolidated Balance Sheet …………………………………………………………………
(2) Quarterly Consolidated Statement of Income and Comprehensive Income……………………………
(3) Quarterly Consolidated Statement of Cash Flows……………………………………………………...
(4) Notes to Quarterly Consolidated Financial Statement

468Note on Going Concern ……………………………………………………………………………… 10
10Note on Significant Change in Equity Capital ………………………………………………………
Changes in Accounting Policies ……………………………………………………………………… 10

1. Status of the Group(1) Business Overview and Results for the Second Fiscal Quarter
Business Overview
During the second quarter of the current consolidated fiscal year, the prospects of Japanese economy continue tobe highly uncertain and are unpredictable. The tenacious adversity out of the novel coronavirus and emerging
variants (hereafter referred to as “COVID-19”) pandemic, and other factors, such as the volatile overseas situation
incurred by the Ukraine affairs, further depreciation of the yen in the exchange market as well as sharp appreciationof the commodity prices are rampant and has been increasing this uncertainty.
In this business environment, for the purpose of enhancing our brand value and fueling future growth, our Groupintensified sales promotion campaigns. Leveraging our technology and accelerating digital transformation(hereafter referred to as “DX”), we broadcasted TV commercials in 15 prefectures in Japan, including major cities,
such as Osaka and Aichi, which are linked with our web platform in order to increase customer touchpoint andengagement. Also, we hosted our original exhibition, TGEF2022 (Takasho Garden Exterior Fair 2022), whose
technologically advanced offering with customer engagement and impactful hybrid style using both real andwebsite mobilized a lot of visitors.
2nd Quarter Fiscal 2023 Highlight (January 21, 2022, to July 20, 2022)* Figures are rounded down to the nearest million yen, except share and per share data
* “ %” indicates year-on-year changes from the previous corresponding period
FY2023 2Q(Six months ended
July 20, 2022)

FY2022 2Q(Six months ended
July 20, 2021)

Decrease

Revenue

11,022

11,270△247

97.8

Operating income

786

1,163

△377

67.6

Ordinary income

1,098

1,227

△128

89.5

Net income attributableto owners of the parent

679

865

△185

78.5

Increaseor%Sales Metrics by Business Segments<Pro-use segment>
The sales of Pro-use accounted for a percentage of 61% our sales and has been stable. To accelerate our
successful growth, we promoted our new multidimensional business model; innovative synergy of online, virtual,
and real, more precisely, DX-enabled proposals and sales closing through web-based showrooms and VR parks, aswell as through our original Garden & Exterior showrooms located throughout Japan where customers canexperience and feel a wide selection of our products.
Also, our Group has our own factory in Japan, which enables flexible “mass customization” to each customer’sorder, and it has been promoting hybrid-style proposals, as mentioned above, that utilize content both online andreal by comprehensively proposing "Facade Exterior & Living Garden" lifestyle through abundance of color
variation tailored to each customers’ aesthetics sense, tastes, and interests.
What’s more, sales of living garden products such as "Home Yard Roof," a key product inspired by "5th ROOM"(fifth room) concept, increased by the brand designated orders, due to the new DX-enabled proposals and sales
which links TV commercial and web-based platform.
In addition, the sales of "Low Volt Light," a safe and secure exterior illumination for nighttime gardens,
increased 17.1% compared to the same quarter of previous fiscal year. As a result of those upsides, Pro-use sales
increased from the same quarter of the previous fiscal year.

Pro-use segment Highlight (January 21, 2022, to July 20, 2022)* Figures are rounded down to the nearest million yen, except share and per share data
* “ %” indicates year-on-year changes from the previous corresponding period

Revenue

FY2023 2Q(Six months ended
July 20, 2022)

FY2022 2Q(Six months ended
July 20, 2021)

Decrease

6,724

6,273

450

-1-

Increase
or

%
107.2

On the other hand, our group company, TAKASHO DIGITEC CO.,LTD. which business are the manufacturing
and sales has been growing and the sales achieved 121.6% compared to the same quarter of previous fiscal year,
due to the cooperation with our landscape building materials company group and the project in non-housing field(Hotel, Japanese hotel and Commercial facilities etc.).
<Home-use segment>
Despite the reactionary drop from last year, sales by home-use segment maintained the same level compared tothe same quarter of previous fiscal year. Positive factors such as YoY 118% growth in the e-commerce and theincreased demand for sunshade-related products by the early end of the rainy season contributed to this result.
Home-use segment Highlight (January 21, 2022, to July 20, 2022)* Figures are rounded down to the nearest million yen, except share and per share data
* “ %” indicates year-on-year changes from the previous corresponding period

Revenue

FY2023 2Q(Six months ended
July 20, 2022)

FY2022 2Q(Six months ended
July 20, 2021)

Decrease

3,280

3,280

0

Increase
or

%
100.0

<Overseas segment>
Overseas sales were negatively affected by people’s reluctancy to buy, caused by soaring maritime freight cost toEurope and the U.S. That caused the delivery schedule adjustment to customers and the consumption decrease.
Furthermore, in U.S., customer attraction at home center and garden center temporary slowed down, inversely
correlated by soaring interest in overseas travel and outdoor activities with eased measures against the spread of
COVID-19. In Europe, people refrained from buying due to the price rise in electricity, gas, and necessities. As aresult of those downsides, overseas sales decreased from the same quarter of the previous fiscal year.
Overseas segment Highlight (January 21, 2022, to July 20, 2022)* Figures are rounded down to the nearest million yen, except share and per share data
* “ %” indicates year-on-year changes from the previous corresponding period

Revenue

FY2023 2Q(Six months ended
July 20, 2022)

FY2022 2Q(Six months ended
July 20, 2021)

Decrease

1,005

1,709

△703

Increase
or

%
58.8

Operating income
Although our Group maintained the same level of gross profit percentage compared to the same quarter of theprevious fiscal year apart from the higher purchase cost, operating income decreased 32.4% from the same quarterof the previous fiscal year, due to the decrease in net sales and incremental expenses in proactive advertising andsales promotion, etc., mainly due to face-to-face and real exhibitions reopened after COVID-19 pandemic.
As for non-operating Profit and Loss, Foreign exchange gain increased compared to the same quarter of theprevious fiscal year due to further depreciation of yen in the exchange market.
Our mission, Future strategies, and SDGs Initiatives.
Passion for our group’s establishment was “Heart and Art”, which has never been changed nor forgotten eversince. Underpinned with passion and mission we have a long history of and reputation for designed gardening andinnovation, inspired by traditional Japanese aesthetics (such as wabi-sabi, elegance and refinement) and British
garden cultures etc., integrating the beauty of nature into daily lives and spiritual values.
As future strategies, in Pro-use segment, our Group will further promote DX-enabled sales promotions such as
hybrid of real and internet, AR/MR, etc., for the purpose of brand value enhancement and sales promotion
reinforcement. Also, we will expand the sales channels by strengthening sales strategy and proposals against
landscapes.
In Home-use segment, our Group will further strengthen e-commerce, which we have witnessed stable growth.
Also, we will develop new products by our own factories and promote the global items which enable to sell all over
the world.

-2-

As for the overseas segment, our Group are planning to start trading with large home centers and further
strengthen sales promotion, especially in Europe (France, Italy etc.), which were relatively left behind in ouroverseas geographical sales efforts. Also, we will strengthen sales promotion by developing the new products andproposing the product mix for people to enjoy themselves in all of the garden.
In addition, our competitive advantageous business model “mass customization”, which accommodates eachcustomer’s needs by tools, equipment, and system, significantly contributes to our success. Under this model, ourGroup will further promote tailored Garden & Exterior, not as the producer of consumer items, but as the creator of
professional materials and space.
Our Group’s employees are precious human capital, and continue to nurture them toward “all-engagement,
diversity & Inclusion” working environment and culture.
Also, as a member of our society, we have been promoting Eco Garden (recycle, reduce, reuse) ensuring
sustainable consumption and production patterns.
(2) Explanation on the Financial Position
1) Status of Assets, Liabilities, and Net assets
Total assets at the end of the current second quarter amounted to 26,108,846 thousand yen, an increase of
2,442,852 thousand yen from the end of the previous consolidated fiscal year, primarily due to an increase of note
receivable, account receivable and contract assets, and merchandise and finished goods.
Total liabilities at the end of the current second quarter amounted to 11,256,607 thousand yen, an increase of
1,282,362 thousand yen from the end of the previous consolidated fiscal year, mainly due to an increase of shortterm loans payable.
Total net assets at the end of the current second quarter amounted to 14,060,338 thousand yen, an increase of
995,870 thousand yen from the end of the previous consolidated fiscal year, mainly due to an increase of retained
earnings and foreign currency translation adjustments.
2) Status of Cash Flows
Operating Activities: Net cash outflow from operating activities during the current second quarter was 236,334
thousand yen, compared to a net cash inflow of 1,292,908 thousand yen in the same quarter of the previous fiscal
year, primarily due to 748,385 thousand yen increase of merchandise and finished goods (171,470 thousand yen
increase in 2022 2Q) and 304,872 thousand yen decrease of note and accounts payable (1,465,991 thousand yen
increase in 2022 2Q).
Investing Activities: During the current second quarter, our Group used 376,955 thousand yen of net cash ininvesting activities, compared to a net cash outflow of 279,796 thousand yen in the same quarter of the previous
fiscal year, primarily due to 278,926 thousand yen payments for tangible fixed asset purchases (194,324 thousand
yen payments in 2022 2Q).
Financing Activities: During the current second quarter, our Group increased 416,820 thousand yen of net cash infinancing activities, compared to a net cash outflow of 1,402,122 thousand yen in the same quarter of the previous
fiscal year, primarily due to 925,698 thousand yen net increase of short-term loans payable (107,000 thousand yen
payments in 2022 2Q).
(3) Explanation on Future Performance Forecast
At present, there are no changes to the consolidated earnings forecast for the full year announced on March 3,
2022.

-3-

2. Quarterly Financial Statements and Notes(1) Quarterly Consolidated Balance SheetFY2022 4Q(As of Jan. 20, 2022)
ASSETS
CURRENT ASSETS:
Cash and deposits
Note receivable, account receivable
Note receivable, account receivable andcontract assets
Electronically recorded receivables
Merchandise and finished goods
Work in process
Raw materials and supplies
Other current assets
Allowance for doubtful accounts
Total current assets
NON-CURRENT ASSETS:
Tangible assets
Property, plant and equipment (net)
Buildings and structures, net
LandConstruction in progress
Others (net)Total tangible assets
Intangible assets
Goodwill
OthersTotal intangible assets
Investments and other assets
Investment securities
Deferred tax assets
OthersAllowance for doubtful accounts
Total investment and other assets
Total non-current assets
TOTAL ASSETSLIABILITIESCURRENT LIABILITIES:Note and accounts payable
Electronically recorded payables
Short-term borrowings
Current portion of long-term borrowings
Income taxes payable
Provision for bonuses
Other current liabilities
Total current liabilities
LONG-TERM LIABILITIES:Long-term borrowings
Retirement benefit liability
Asset retirement obligations
Other long-term liabilities
Total long-term liabilities
TOTAL LIABILITIESNET ASSETS
Shareholders’ equity-4-(Thousands of yen)
FY2023 2Q(As of Jul. 20, 2022)

5,600,181
3,096,998

5,729,871--

3,445,868

586,558
3,998,831
506,015
1,344,812
927,886△140,872
15,920,412

733,9634,719,112
573,740
1,613,208
1,090,366△150,163
17,755,967

3,643,980
1,043,608
208,158
904,004
5,799,751

3,769,033
1,123,571
222,673
1,222,510
6,337,788

24,747472,197496,945

58,901
480,196
539,097

225,576
121,401
1,124,846△22,939
1,448,884
7,745,581
23,665,994

253,229
52,1181,190,490△19,846
1,475,992
8,352,879
26,108,846

3,513,059
1,071,036
3,734,870
39,140338,590
21,684
1,255,864
9,974,245

3,333,709
1,286,041
4,755,803
36,000406,136
26,276
1,412,641
11,256,607

111,000
9,086
222,914284,279
627,280
10,601,526

93,00010,287
231,705
456,907791,900
12,048,508

Share capital
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive
incomeStock subscription rights
Non-controlling interests
TOTAL NET ASSETSTOTAL LIABILITIES and NET ASSETS-5-

3,043,623
3,094,927
6,137,003△16,651
12,258,902

3,043,623
3,096,529
6,413,198△15,079
12,538,271

101,669

120,787

11,335496,568
88,81185,937
1,105,543
85,111

698,384

1,397,380

1,681
105,500
13,064,468
23,665,994

1,435
123,251
14,060,338
26,108,846

(2) Quarterly Consolidated Statement of Income and Comprehensive Income(Quarterly Consolidated Statement of Income, Cumulative)(Thousands of yen)

Net sales
Cost of revenue
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Royalty income
Foreign exchange gain
Miscellaneous income
Total non-operating income
Non-operating expenses
Interest expense
Sales discounts
Commitment fee
OtherTotal non-operating expenses
Ordinary income
Extraordinary gains
Gain on sales of non-current assets
Total extraordinary gains
Extraordinary losses
Loss on retirements of non-current assets
Loss on sales of non-current assets
Total extraordinary losses
Income before income taxes
Income tax - current
Income tax adjustment
Total income taxes
Quarterly net income
attributable to noncontrolling interests
attributable to owners of the parent

FY2022 2Q(From Jan. 21, 2021,
to Jul. 20, 2021)
11,270,212
6,220,461
5,049,750
3,885,867
1,163,883

FY2023 2Q(From Jan. 21, 2022,
to Jul. 20, 2022)
11,022,284
6,070,931
4,951,352
4,165,137
786,215

5,548
2,292
21,08451,313
46,106
126,345

3,863
2,496
22,262
269,009
63,773
361,405

38,251
18,6652,353
3,426
62,697
1,227,531

36,242
1,961
10,756
48,961
1,098,660

3,558
678
4,236
1,223,295
265,532
91,662
357,194
866,100
1,075
865,024

-6-

2,287
2,287
1,100,947
384,762
32,400417,163683,784
4,479
679,305

(Quarterly Consolidated Statement of Comprehensive Income, Cumulative）(Thousands of yen)

Quarterly net income
Other comprehensive income
Valuation difference on available-for-salesecurities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive
incomeQuarterly comprehensive income
attributable to owners of parent
attributable to non-controlling interests

FY2022 2Q(From Jan. 21, 2021,
to Jul. 20, 2021)
866,100

FY2023 2Q(From Jan. 21, 2022,
to Jul. 20, 2022)
683,784

14,72919,11818,382
251,185
46,50374,602622,246△3,699330,801

712,267

1,196,901
1,191,317
5,583

1,396,052
1,378,301
17,751-7-

(3) Quarterly Consolidated Statement of Cash Flows(Quarterly Consolidated Statement of Cash Flows, Cumulative)(Thousands of yen)
FY2022 2Q(From Jan. 21, 2021,
to Jul. 20, 2021)
OPERATING ACTIVITIES:
Income before income taxes
Adjustments for:
Depreciation
Amortization of goodwill
Increase (△indicates decrease) in allowancefor doubtful accounts
Increase (△indicates decrease) in provision
for bonuses
Interest and dividend income received
Interest expenses paid
Foreign exchange loss (△indicates gain)
Loss on retirements of non-current assets
Decrease (△indicates increase) in tradenotes and accounts receivable
Decrease (△indicates increase) ininventories
Decrease (△indicates increase) in otherassetsIncrease (△indicates decrease) in trade notes
and accounts payable
Increase (△indicates decrease) in otherliabilities
Increase (△indicates decrease) in
consumption tax payable
Other-net
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes-paid
Net cash provided by (used in) operating
activities
INVESTING ACTIVITIES:
Purchases of property, plant and equipment
Purchases of intangible assets
Purchases of investment securities
Other-net
Net cash provided by (used in) investing
activities
FINANCING ACTIVITIES:
Proceeds from short-term debt
Repayments of short-term debt
Proceeds from long-term debt
Repayments of long-term debt
Proceeds from sales of treasury stock
Payments for purchases of treasury stock
Dividends paid
Other-net
Net cash provided by (used in) financing
activities-8-

FY2023 2Q(From Jan. 21, 2022,
to Jul. 20, 2022)

1,223,295

1,100,947

306,029
1,636

355,447
5,845

6,286

6,078

△48,266

4,592△7,841
38,251
12,074
3,558△6,35936,242
32,466-△1,306,108△366,822△171,470△748,385△44,463△2,612

1,465,991△304,872

84,380△50,962△125,016

23,65921,911
1,460,248
7,841△40,517△134,663

25,016110,2826,359△35,787△317,190

1,292,908△236,334△194,324△74,994△160△10,317△278,926△79,884△160△17,983△279,796△376,955

5,550,000△5,657,000
180,000△1,118,184△74△291,566△65,297

21,552,060△20,626,361△21,1402,928△403,110△87,555△1,402,122

416,820

FOREIGN CURRENCY TRANSLATION ADJUSTMENTS ON
CASH AND CASH EQUIVALENTS

85,289326,160

NET INCREASE (△INDICATES DECREASE) IN CASH
AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS, BEGINNING OF
YEAR
CASH AND CASH EQUIVALENTS, END OF YEAR

△303,720

129,689

3,942,313

5,600,181

3,638,592

5,729,871-9-

(4) Notes to Quarterly Consolidated Financial Statement(Note on Going Concern): None
(Note on Significant Change in Equity Capital): None
(Changes in Accounting Policies):<Application of Accounting Standard for Revenue Recognition>
The "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020. Hereinafterreferred to as the "Accounting Standard for Revenue Recognition”) has been applied from the beginning of thefirst quarter of the current fiscal year, and revenue is recognized at the amount expected to be received in
exchange for the promised goods or services when control of the promised goods or services has been transferredto the customer.
In accordance with the alternative treatment prescribed in Paragraph 98 of the "Guidance on AccountingStandard for Revenue Recognition" (ASBJ Guidance No. 30, March 26, 2021), for domestic sales of products, ourCompany recognizes revenue at shipping point if the interval between shipment and transfer of the control isnormal.
The major changes resulting from the application of the Accounting Standard for Revenue Recognition are as
follows
 Sales promotion expenses and sales discount: A portion of sales promotion expenses previously recorded inselling, general and administrative expenses and sales discount previously recorded in non-operating expenses
are deducted from net sales.
The Company has followed the transitional treatment prescribed in the provision of Paragraph 84 of the
Accounting Standard for Revenue Recognition, and the cumulative effect of retrospective application of the new
accounting policy prior to the beginning of the first quarter of the current fiscal year has been included in retained
earnings at the beginning of the first quarter of the current fiscal year.
Consequently, the effect of this change on profit and loss for the first quarter of the current fiscal year isimmaterial. There is no effect on the beginning balance of retained earnings for the first quarter of the current
fiscal year.
Due to the application of Accounting Standard for Revenue Recognition "notes and accounts receivable," which
was included in "current assets" in the consolidated balance sheet for the previous fiscal year, is included in"notes, accounts receivable and contract assets" in the consolidated balance sheet for the first quarter of thecurrent fiscal year.
In accordance with the transitional treatment prescribed in Paragraph 89-2 of the Accounting Standard for
Revenue Recognition, no reclassification has been made to reflect the new presentation for the previous
consolidated fiscal year.

<Application of Accounting Standard for Fair Value Measurement>
The " Accounting Standard for Fair Value Measurement " (ASBJ Statement No. 30, July 4, 2019; hereinafterreferred to as the " Accounting Standard for Fair Value Measurement ") has been applied from the beginning of
the first quarter of the current fiscal year, and in accordance with the transitional treatment stipulated in Paragraph
19 of the Accounting Standard for Fair Value Measurement and Paragraph 44-2 of the Accounting Standard for
Financial Instruments (ASBJ Statement No. 10, July 4, 2019), the new accounting policy will be applied
prospectively. There is no impact on the quarterly consolidated financial statements.

10