This document has been translated from a part of the Japanese original for the convenience of non-Japanese shareholders. In the event of any discrepancy between thistranslation and the Japanese original, the original shall prevail.

February 7, 2020

Consolidated Financial Results
for the First Nine Months of the Fiscal Year Ending March 31, 2020
<under J-GAAP>
Company name: Pressance Corporation Co., Ltd.
Listing:First Section of the Tokyo Stock Exchange
Section code:
3254
URL:
http://www.pressance.co.jp/
Representative: Yutaka Doi, President and Representative Director
Contact:
Kyosuke Ichikawa, Deputy Manager of Accounting Department
TEL: +81-6-4793-1650

Scheduled date of filing of quarterly securities report:
February 14, 2020
Scheduled starting date for dividend payments:—
Preparation of supplementary quarterly materials for financial results: Yes
Holding of quarterly financial results presentation meeting: No(Values of less than one million rounded down)

1.

Consolidated operating results for the first nine months of the fiscal year ending March 31, 2020
(from April 1, 2019 to December 31, 2019)(Percentages indicate year-on-yearchanges compared to the same
period of the previous FY)
Profit attributable toOperating profit
Ordinary profit
owners of parent% Millions of yen% Millions of yen% Millions of yen%(1) Consolidated operating results (cumulative)
Net sales
Millions of yen
First nine months of the fiscal
year ending March 31, 2020
First nine months of the fiscal
year ended March 31, 2019
Note: Comprehensive income

183,58832.1

31,76318.3

31,27418.3

21,041

17.3

138,987 37.6
26,842 58.9
26,447 59.7
17,933 59.5
First nine months of the fiscal year ending March 31, 2020: 21,007 million yen [17.1 %]First nine months of the fiscal year ended March 31, 2019: 17,932 million yen [59.4 %]Basic earnings per shareYen
336.28291.02First nine months of the fiscal year ending March 31, 2020
First nine months of the fiscal year ended March 31, 2019

Diluted earnings per share
Yen
326.98279.47(2) Consolidated financial position
As of December 31, 2019
As of March 31, 2019
Reference: Equity
As of December 31, 2019:
As of March 31, 2019:

Total assets
Millions of yen
308,555
301,942

Net assets
Millions of yen
115,834
94,618114,454 million yen
92,715 million yen

1Equity ratio
%
37.1
30.7

2.

Dividends

Annual dividends per share
2nd
3rd
Year-endquarter-end
quarter-end
Yen
Yen
Yen
Fiscal year ended March 31, 2019
17.50
23.00
Fiscal year ending March 31, 2020
26.00
Fiscal year ending March 31, 2020 (Forecast)
26.00
Note: Revisions to the dividends forecasts most recently announced: None
1stquarter-end
Yen
-

3.

Annual total
Yen
40.50
52.00

Forecasts of consolidated operating results for the fiscal year ending March 31, 2020
(from April 1, 2019 to March 31, 2020)(Percentages indicate year-on-year changes.)
Profit attributable to Basic earnings
Net sales
Operating profit
Ordinary profit
owners of parent
per share
Millions ofMillions ofMillions ofMillions of
%
%
%
%
Yen
yen
yen
yen
yen
Full year
209,21930.3
32,531
20.0
31,42918.5
21,52017.6
346.67
Note: Revisions to the results forecasts most recently announced: None

*
(1)

(2)

Notes
Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in the change
in scope of consolidation): None
Adoption of specific accounting policies for quarterly consolidated financial statements: Yes(Corporate Income Tax Calculation Standards)
Regarding taxes, a reasonable estimate of the effective tax rate for the projected full-year pretax income for thecurrent fiscal year, including the actual income figure for the first nine months of the fiscal year, has been
arrived at using the tax-effect accounting method.

(3) Changes in accounting policies, changes in accounting estimates and restatement after error corrections
a. Changes in accounting policies due to amendments to accounting standards and other regulations: Noneb. Changes in accounting policies due to other reasons than a. above: Nonec. Changes in accounting estimates: None
d. Restatement after error corrections: None(4)

Number of issued shares (common stock)a. Number of issued shares at the end of each period (including treasury shares)
As of December 31, 2019
As of March 31, 201965,198,961 shares
62,941,385 sharesb. Number of treasury shares at the end of each period
As of December 31, 2019
As of March 31, 2019863,506 shares
863,744 sharesc. Average number of shares during the period
First nine months of the fiscal year ending March 31,2020First nine months of the fiscal year ended March 31,2019

62,571,132 shares
61,623,911 shares

Notes:
1. Due to the introduction of the share-based payment type ESOP, a certain number of shares of the Company
held in the trust account is included in the “Number of treasury shares at the end of period” (313,320 sharesfor the 3rd quarter of the fiscal year ending March 31, 2020 and the 313,980 shares for the fiscal year ended
March 31, 2019). And a certain number of shares held in the trust account is included in the treasury sharesthat were deducted in the calculation of the “Average number of outstanding shares during the period”(313,834 shares for the 3rd quarter of the fiscal year ending March 31, 2020 and 313,980 shares for the 3rd2

quarter of the fiscal year ended March 31, 2019).
* Quarterly financial result reports by public accountants or auditing firms are not required* Explanations about the proper use of financial forecasts and other important notes(Caution Concerning Forward-looking Statements)
Forward-looking statements in this document, including the results forecasts, are based on the information
available to the Company at the time of disclosure and on certain assumptions deemed to be practicable by
the Company. These statements do not purport that the Company pledges or ensures to achieve suchstatements. Actual business and other results may differ substantially due to various factors. For preconditions
to the assumptions and other important notes concerning the financial forecasts, please refer to “1. Quarterly
Qualitative Information (3) Explanation for the Forecast of Consolidated Financial Results ending March 31,
2020 on page 6 of the attachment.
(Method of Obtaining Supplementary Materials for Quarterly Financial Results)
Supplementary materials for quarterly financial results are available on the Company’s website.
(Change in the unit of amount unit)
Although the amounts of accounts and other items reported in our quarterly consolidated financial statements
were previously shown in thousands of yen, they are shown in millions of yen from the first quarter and thecumulative first three months of the consolidated fiscal year ending March 31, 2020.
The figures for the previous consolidated fiscal year and the first nine months of the previous consolidated
fiscal year are also shown in millions of yen for easy comparison.

3

1. Quarterly Qualitative Information(1) Business Results
During the first nine months of consolidated fiscal year, the Japanese economy steadily recovered withmoderate increase in consumer spending along with improvements of employment and personal income
environment.
In the real estate industry, on top of mounting construction costs, publicly assessed land values continued torise in Japan’s three largest cities of Tokyo, Osaka, and Nagoya, as well as in other large cities. Although thisand other factors remain causes for concern, the interest rates on housing loans remain low while the Japanese
government’s ongoing measures to help homebuyers, such as a mortgage tax breaks, are still on track,
contributing to a stable economy. The demand for condominiums has also remained healthy as more people
tend to move to cities seeking the convenience of urban living.
In these business circumstances, Pressance Corporation Co, Ltd. (the “Company”) has strived to supply
condominiums in the central area of major cities in Kinki and Tokai-Chukyo regions as well as of regional hub
cities, which are our main sales area, focusing on acquiring lands for development in demanding locations.
Under such business condition, the Company posted the following consolidated performance for the first ninemonths of the fiscal year ending March 31, 2020, net sales amounted to 183,588 million yen (up 32.1% year onyear), operating profit amounted to 31,763 million yen (up 18.3% year on year), ordinary profits amounted to
31,274 million yen (up 18.3% year on year) and profit attributable to owners of the parent amounted to 21,041
million yen (up 17.3% year on year).
In December 2019, the former President & Representative Director and an employee of the Company werearrested and indicted by the Special Investigation Department of the Osaka District Public Prosecutors Officeon suspicion of conspiring with the former President of the Meijo Gakuin, an incorporated educational
institution, (hereinafter referred to as the “Meijo Gakuin”) and others in connection with an embezzlement caseinvolving payments for land sales concerning the Meijo Gakuin. We would like to offer our deepest apologies
to our shareholders and investors for causing trouble and concern.
On December 23, 2019, the Company established the External Management Reform Committee (hereinafterreferred to as the "Committee"), composed of outside experts with no vested interest in the Company, toinvestigate and verify issues related to governance. The Committee is currently conducting an investigation andverification. Based on the recommendations made by the Committee, we will implement measures to prevent
recurrence and reinforce compliance in our efforts to regain the trust of the public.
An overview of operating results by product segment is as follows:

Real Estate Sale BusinessIn the real estate sale business, the sale of family-type condominium “Pressance Loger Ogaki Ekimae” (137units in total) and studio condominium “Pressance THE Kobe” (235 units in total) soundly contributed to total
sales in the first nine months of the fiscal year ending March 2020. The sales of studio condominium amounted
to 50,679 million yen (2,568 units), sale of family-type condominium amounted to 71,221 million yen (1,907
units), sale of condominium building amounted 22,147 million yen (1,178 units), sale of hotel property
amounted to 19,292 million yen (793 units), sale of other type of housing amounted to 2,895 million yen (159
units), sale of other real estate amounted to 11,155 million yen, business accompanying real estate saleamounted to 987 million yen. Total sales of real estate sale business posted 178,378 million yen (up 32.3%
year on year) and operating profit amounted to 31,391 million yen (up 19.3% year on year).
In regard to condominium sales, which is the Pressance Group’s core business, since sales of condominiums
are posted upon delivery following their completion, quarterly financial results may fluctuate significantly
depending on land purchases, development plans, and construction periods.

Other BusinessAs a result of a high occupancy rate of company-owned real estate for rent, sales in other business amounted to
5,209 million yen (up 26.5% year on year), and operating profit came to 1,471 million yen (up 5.5% year onyear).

4

(2) Financial Position
Analysis on Assets, Liabilities and Net Assets
Current Assets
Total current assets as of the end of the first nine months of the fiscal year amounted to 288,316 million yen(up 2.8%), which represents an increase of 7,724 million yen compared to the end of the previous fiscal
year. This was mainly due to a 6,513-million-yen increase in inventory as a result of actively acquiring landfor development.

Fixed Assets
Total fixed assets as of the end of the first nine months of the fiscal year amounted to 20,238 million yen(down 5.2 %), which represents a decrease of 1,111 million yen compared to the end of the previous fiscal
year. This was mainly due to a decrease in real estate for rent by 2,065 million yen as a result oftransferring company-owned properties, real estate for rent, to real estate for sale while long-term loans
receivable from subsidiaries and affiliates increased by 912 million yen.

Liabilities
Total liabilities as of the end of the first nine months of the fiscal year amounted to 192,720 million yen(down 7.0%), which represents a decrease of 14,602 million yen compared to the end of the previous fiscal
year. This was mainly due to a 5,784-million-yen decrease in loan from financial institutions, a 3,500million-yen decrease in bonds with stock acquisition rights through the exercise of rights, and a 4,488million-yen decrease in advances received as a result of the delivery of condominiums, despite a 1,092million-yen increase in income taxes payable.

Net Assets
Total net assets as of the end of the first nine months of the fiscal year amounted to 115,834 million yen (up22.4 %), which represents an increase of 21,215 million yen compared to the end of the previous fiscal year.
This was mainly due to a 17,981-million-yen increase in retained earnings primarily because of the postingof quarterly profit attributable to owners of parent and 1,886-million-yen increases in share capital andcapital surplus, respectively, through the exercise of stock acquisition rights.

Analysis on Cash Flows
Cash and cash equivalents (hereinafter referred to as “net cash”) as of the end of the first nine months of the
fiscal year ending March 31, 2020, totaled 38,624 million yen (down 2.0 %), which represents a decrease of
775 million yen compared to the end of the previous fiscal year.
The status and factors in each cash flow for the first nine months of the fiscal year are as follows:

Cash Flows from Operating Activities
Net cash provided by operating activities came to 10,190 million yen (compared with 4,575 million yen
used in the same period of previous fiscal year).
This was due to a cash inflow resulting mainly from the posting of income before income taxes amounting
to 31,274 million yen. This was in spite of cash outflows mainly due to a 9,434-million-yen payment ofincome taxes; a 4,888-million-yen increase in inventories reflecting the proactive acquisition of land fordevelopment, and a 4,425-million-yen decrease in advances received following delivery of condominiums.

Cash Flows from Investment Activities
Net cash used in investment activities came to 1,724 million yen (Compared with 1,696 million yen used in
the same period of previous fiscal year).
This was principally due to the outflows that resulted from loans receivable from subsidiaries and affiliatesof 918 million yen and payments into time deposits of 684 million yen.

Cash Flows from Financing Activities
Net cash used in financing activities came to 9,243 million yen (Compared with 13,513 million yen
provided in the same period of previous fiscal year).
The main reason for this was a decrease in the cash balance caused by a decrease in loan from financial
institutions of 5,784 million yen on a net basis and a cash outflow resulting from a dividend payment
amounting to 3,056 million yen.

5(3) Explanation for the Forecast of Consolidated Financial Results ending March 31, 2020
Condominium sales, our major business, have a tendency to show fluctuation in a specific quarter results due to thetiming of delivery of condominium, since sale of condominium is to be posted on the basis of delivery of thecondominium unit. Our business results in the third quarter of the fiscal year ending March 31, 2020 have been
making sound progress, and there is no change on our forecasts of consolidated financial results in the fiscal year
released on May 10, 2019.

6

2. Quarterly Consolidated Financial Statements(1) Quarterly Consolidated Balance Sheets(Millions of yen)
As of March 31, 2019
AssetsCurrent assets
Cash and deposits
Accounts receivable - trade
Real estate for sale
Real estate for sale in process
Raw materials and supplies
Other
Total current assets
Non-current assets
Property, plant and equipment
Real estate for rent, net
Other, net
Total property, plant and equipment
Intangible assets
Investments and other assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Notes and accounts payable - trade
Electronically recorded obligations - operating
Short-term loans payable
Current portion of long-term loans payable
Income taxes payable
Advances received
Provision for bonuses
Other
Total current liabilities
Non-current liabilities
Bonds with share acquisition rights
Long-term loans payable
Provision for directors’ retirement benefits
Provision for share-based payment
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Total accumulated other comprehensive income
Subscription rights to shares
Non-controlling interests
Total net assets
Total liabilities and net assets

7

As of December 31, 2019

41,99064
9,603
225,302278
3,352
280,591

41,898158
13,677
227,733
287
4,561
288,316

15,251596
15,848332
5,170
21,350301,942

13,186608
13,794283
6,159
20,238308,555

117
7,085
9,920
44,547
5,417
11,503218
4,106
82,916

405
4,367
2,661
53,768
6,509
7,014
135
4,637
79,4993,500
120,119623
146
17124,407207,323

112,372
175
672
113,220
192,720

2,404
3,406
87,777(887)
92,6994,290
5,292
105,758(887)
114,455

0
15
15
123
1,779
94,618301,942

9
(10)
(0)
202
1,177
115,834
308,555

(2) Quarterly Consolidated Statements of Income and Comprehensive Income
Quarterly Consolidated Statements of Income(Millions of yen)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
Purchase discounts
Foreign exchange gains
Commission fee
Penalty income
Other
Total non-operating income
Non-operating expenses
Interest expenses
Share of loss of entities accounted for using equity
methodFinancing expenses
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sales of non-current assets
Total extraordinary income
Extraordinary losses
Loss on sales of non-current assets
Loss on retirement of non-current assets
Total extraordinary losses
Profit before income taxes
Income taxes
Net income
Profit attributable to non-controlling interests
Profit attributable to owners of parent

8First nine monthsof the fiscal year ended
March 31, 2019

First nine monthsof the fiscal year ending
March 31, 2020

138,987
99,61839,36812,526
26,842

183,588
136,241
47,346
15,582
31,763

0
1
0
100
49
40
55
247

12
1
0
13
35
95
83
242

535

708

63

18

30
13
642
26,4473
1731
31,274

3
3

-

0
3
4
26,446
8,515
17,931(2)
17,93331,274
10,25021,024(17)
21,041

Quarterly Consolidated Statements of Comprehensive Income(Millions of yen)

Net income
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
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests

9

First nine monthsof the fiscal year ended
March 31, 2019

First nine monthsof the fiscal year ending
March 31, 2020

17,931

21,024

(7)
3

9
(49)

4

23

1
17,932(16)
21,007

17,93421,024(2)(17)

(3) Quarterly Consolidated Statements of Cash Flows(Millions of yen)First nine months of
the fiscal year ended
March 31, 2019
Cash flows from operating activities
Income before income taxes
Depreciation
Amortization of goodwill
Interest and dividend income
Interest expenses
Foreign exchange losses (gains)Share of (profit) loss of entities accounted for using equity
methodDecrease (increase) in inventories
Increase (decrease) in notes and accounts payable - trade
Share-based compensation expenses
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for directors’ retirement benefits
Increase (decrease) in provision for share-based payment
Loss (gain) on sales of non-current assets
Loss on retirement of non-current assets
Increase (decrease) in advances received
Decrease (increase) in consumption taxes refund receivable
Increase (decrease) in accrued consumption taxes
Other
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchase of non-current assets
Proceeds from sales of non-current assets
Purchase of investment securities
Payments of loans receivable from subsidiaries and affiliates
Payments for investments in capital of subsidiaries and affiliates
Payments into time deposits
Other
Net cash provided by (used in) investing activities
Cash flows from financing activities
Proceeds from long-term loans payable
Repayments of long-term loans payable
Proceeds from issuance of common shares
Cash dividends paid
Net increase (decrease) in short-term loans payable
Repayments to non-controlling shareholders
Proceeds from disposal of treasury shares
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

10First nine months of
the fiscal year ending
March 31, 2020

26,446
351
75
(2)
535
(100)

31,274
358
75
(13)
708
(13)

63

18

(15,104)(6,075)
(79)
40
28
(2)
3
(4,572)
654
1,106
(156)
3,211
2
(584)
(7,205)(4,575)(4,888)(2,163)
142
(82)
(623)
29
(4,425)
(248)
153
(16)
20,28413(673)(9,434)
10,190

(101)
15
(1)
(653)
(455)
(500)
0
(1,696)

(121)
(1)
(918)
(684)
1
(1,724)61,506(47,048)
199(2,105)914
46
13,51324
7,266
29,31436,58047,022(45,547)
182(3,056)(7,259)(584)(9,243)0(775)
39,40038,624

3. Others(1) Orders and salesa. Actual orders
First nine months of the fiscal year ended March 31, 2019 (from April 1, 2018 to December 31, 2018)
Name ofsegment

Category

Studiocondominiums
Family-typecondominiums
Sale ofReal estate condominium
buildingsalebusiness
Sale of hotel
property
Sale of othertype of housing
Sale of otherreal estate
Total amount ofreportable segments

Numberof units

Total amount of contracts
AmountYear on(Millions ofyear (%)
yen)

Year onyear (%)

Outstanding balance of contracts
AmountNumberYear onYear on(Millions ofof units
year (%)
year (%)
yen)

2,402

138.2

46,528

152.7

2,021

229.7

39,429

253.6

1,370

92.4

49,662

89.9

1,675

74.6

61,136

68.8

1,275

131.0

19,846

144.1

1,650

158.0

25,768

182.5

960

266.7

23,290

385.5

814

123.3

21,773

185.2

71

144.9

1,125

67.8

17

81.0

448

70.3

–

–

5,384

175.8

–

–

4,398

462.0

6,078

132.0

145,837

132.3

6,177

127.4

152,954116.0

First nine months of the fiscal year ending March 31, 2020 (from April 1, 2019 to December 31, 2019)
Name ofsegment

Category

Studiocondominiums
Family-typecondominiums
Sale ofReal estate condominium
buildingsalebusiness
Sale of hotel
property
Sale of othertype of housing
Sale of otherreal estate
Total amount ofreportable segments

Numberof units

Total amount of contracts
AmountYear on(Millions ofyear (%)
yen)

Year onyear (%)

Outstanding balance of contracts
AmountNumberYear onYear on(Millions ofof units
year (%)
year (%)
yen)

2,198

91.5

41,146

88.4

1,868

92.4

34,609

87.8

1,611

117.6

60,135

121.1

1,827

109.1

66,502

108.8

1,137

89.2

22,244

112.1

1,863

112.9

29,524

114.6

309

32.2

7,440

31.9

570

70.0

13,856

63.6

203

285.9

4,241

376.9

63

370.6

1,804

401.9

–

–

7,923

147.2

–

–

5,968

135.7

5,458

89.8

143,131

98.1

6,191

100.2

152,265

99.5

Notes:
1. In the table above, “total amount of orders” has been replaced with “total amount of contracts.
2. Consumption taxes are not included in the above amounts.
3. Amounts of additional constructions are included in the above amounts.
4. The sale of condominium building refers to the method of wholesaling the whole or part of each condominium
building mainly to condominium dealers.
5. The sale of other type of housing refers to the sale of houses other than newly built condominiums, including
used houses and detached houses.
6. The sale of other real estate refers to the sale of real estate other than housing, including commercial stores andlands for development.
7. The total amount of contracts and outstanding balance of contracts for sale of other real estate in the first ninemonths of the previous fiscal year refer to land for development.
The total amount of contracts for sale of other real estate in the first nine months of the fiscal year refers tolands for development (7,282 million yen) and office buildings (641 million yen). The outstanding balance ofcontracts refers to land for development.
8. Number of units in the total amount of contracts and the outstanding balance of contracts may fluctuate due tochange of business plan and others.

11

b. Actual sales
The first nine months of FY ended March 31, 2019(from April 1, 2018 to December 31, 2018)
AmountNumberYear onYear on(Millions ofof units
year (%)
year (%)
yen)

The first nine months of FY ending March 31, 2020
(from April 1, 2019 to December 31, 2019)
AmountNumberYear onYear on(Millions ofof units
year (%)
year (%)
yen)

1,883

114.1

34,202

120.6

2,568

136.4

50,679

148.2

1,839

142.2

68,933

152.6

1,907

103.7

71,221

103.3

765

70.4

10,872

63.7

1,178

154.0

22,147

203.7

980

535.5

17,625

642.3

793

80.9

19,292

109.5

62

177.1

803

64.9

159

256.5

2,895

360.3

–

–

986

46.7

–

–

11,155

1,131.4

–

–

1,443

168.8

–

–

987

68.4

5,529

130.1

134,867

138.3

6,605

119.5

178,378

132.3

Other

–

–

4,120

118.6

–

–

5,209

126.5

Total

5,529

130.1

138,987

137.6

6,605

119.5

183,588

132.1

Name ofsegment

Category

Studiocondominiums
Family-typecondominiums
Sale ofcondominium
building
Real estate
Sale of hotel
sale
propertybusiness
Sale of othertype of housing
Sale of otherreal estateBusiness
accompanying
real estate sale
Total amount ofreportable segments

Notes:
1. Consumption taxes are not included in the above amounts.
2. Amounts of additional constructions are included in the above amounts.
3. The sale of condominium building refers to the method of wholesaling the whole or part of each condominium
building mainly to condominium dealers.
4. The sale of other type of housing refers to the sale of houses other than newly built condominiums, including
used houses and detached houses.
5. The sale of other real estate refers to the sale of real estate other than housing, including commercial stores andlands for development.
6. Business accompanying real estate sale includes income from post-delivery optional construction work such as
floor coating and income from intermediation fees from real estate sales.
7. The amount of sales of other real estate in the first nine months of the previous fiscal year refers to lands fordevelopment.
The amount of sales of other real estate in the first nine months of this fiscal year refers to lands fordevelopment (10,513 million yen) and office buildings (641 million yen).
c.

Others
The former President & Representative Director and an employee of the Company were arrested and indictedby the Special Investigation Department of the Osaka District Public Prosecutors Office on suspicion ofconspiring with the former President of the Meijo Gakuin, an incorporated educational institution, (hereinafterreferred to as the "Meijo Gakuin") and others in connection with an embezzlement case involving payments
for land sales concerning the Meijo Gakuin.
At the end of the first nine months of the fiscal year ending March 31, 2020, a down payment of 2,126 million
yen by the Company on the land transaction was recorded in real estate for sale in process.
Although there is a possibility that it may have an impact on the Company's future consolidated earnings, it
has not been reflected in the quarterly consolidated financial statements because it is difficult to reasonably
estimate the impact at this time.

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