The following information was originally prepared and published by the Company in Japanese as it contains timely disclosure materials to be submitted to theTokyo Stock Exchange. This English translation is for your convenience only. To the extent there is any discrepancy between this English translation and theoriginal Japanese version, please refer to the Japanese version.

Summary of Financial Statements for the First Half of the
Fiscal Year Ending December 31, 2019 [IFRS] (Consolidated)
August 2, 2019
Broadleaf Co., Ltd.
Stock Listing: Tokyo Stock Exchange 1st Section
Representative: Kenji Oyama, Representative Director, President & CEO
Scheduled Starting Date for Dividend Payment:
September 19, 2019
Earnings Supplementary Explanatory Documents:
Yes
Earnings Results Briefing:
Yes (For institutional investors and analysts)(Amounts are rounded off to the nearest million yen.)

1. Consolidated Financial Results for the 1st Half of the FY2019 (from January 1, 2019 to June 30, 2019)(1) Consolidated Results of Operations(Percentage below represents increase (decrease) from the same period of previous year)
Profit attributable
Total
Revenue
Operating profit Profit before tax
Profitto owners ofcomprehensive
parentincomeMillions of Yen

H1 FY2019
H1 FY2018% Millions of Yen

11,072 9.7
10,090 27.3

Basic earnings per share
H1 FY2019
H1 FY2018% Millions of Yen

2,080 34.9
1,542 67.9

% Millions of Yen

2,075 34.1
1,548 70.9

% Millions of Yen

1,361 36.4
998 78.5% Millions of Yen

1,361 36.4
998 78.5%

1,320 40.2
942 69.5

Diluted earnings per share

Yen

Yen

15.59
11.39

15.39
11.31

(Note) The Company conducted a 2-for-1 common stock split effective April 1, 2018. The basic earnings per share and the diluted earnings per share for H1
FY2018 are calculated on the assumption that the said stock split was implemented at the beginning of the previous fiscal year.

(2) Consolidated Financial Position
Total assets

Percentage of equity
attributable to owners ofparentEquity attributable toowners of parent

Total equity

Millions of Yen

Millions of Yen

Millions of Yen%

29,937

21,93021,92773.2

29,413

21,033

21,03371.5

End of Q2
FY2019End of FY2018
2. Dividends

Dividends Per Share
End of Q1

End of Q2

End of Q3

Year-end

Total

Yen

Yen

Yen

Yen

Yen

‒
‒

5.50
6.50

‒

6.50

12.00

‒

6.50

13.00

FY2018FY2019FY2019 (Forecast)(Note) Revisions to the latest forecast of dividends: No

3. Earnings Forecast for FY2019 (from January 1, 2019 to December 31, 2019)(Percentages below represent increases (decreases) from the same period of the previous fiscal year.)

Revenue
FY2019(Note)

Operating profit

Profit attributable toowners of parent

Profit before tax

Basic earnings per
share

Millions of Yen%

Millions of Yen%

Millions of Yen%

Millions of Yen%

Yen

22,000

3.4

4,500

9.4

4,500

9.6

2,800

5.4

32.07

Revisions to the latest forecast of earnings: No- 1 -* Notes(1) Changes in significant subsidiaries during the six months ended June 30, 2019 (changes of specified subsidiaries with change ofthe scope of consolidation): No(2) Changes in accounting policies, changes in accounting estimates
1. Changes in accounting policies required by IFRS: Yes
2. Other changes in accounting policies: No
3. Changes in accounting estimates: No(Note) For details, see “2. Summary Consolidated Financial Statements and Major Notes, (6) Notes regarding the summary
consolidated financial statements (Changes in accounting policies)” on page 12 of the attached material.
(3) Number of shares outstanding (common stock)
1. Number of shares outstanding (including
treasury stock)

Q2 FY201997,896,800

FY201897,896,800

2. Number of shares of treasury stock

Q2 FY201910,473,263

FY2018

10,588,336

3. Average number of shares outstanding
87,341,624
87,661,382
Q2 FY2019
Q2 FY2018(during the period)(Note) The Company conducted a 2-for-1 stock split effective April 1, 2018. The average number of shares for the first half ofthe fiscal year ending December 2018 is calculated on the assumption that the stock split was conducted at the
beginning of the previous period.
* The quarterly earnings report is outside the scope of audit procedures by certified public accountants and audit firm.
* Comment regarding appropriate usage of earnings forecast, and other special notes(Note on forward-looking statements)
The forward-looking statements such as earnings forecasts contained in this document are based on the information currently available
to the Company and certain assumptions which are regarded as legitimate. The Company makes no warranty as to the achievability ofwhat is described in the statements. Actual results may differ from these forecasts due to various factors.
(Availability of earnings supplementary explanatory documents and information on earnings results briefings)
The Company will hold a results briefing for institutional investors and analysts on Monday, August 5, 2019. A document to be usedin the briefing will be posted on the website.

- 2 -○Table of Contents of Attached Material
1. Qualitative Information on Operating Results, etc. for the Six Months Ended June 30, 2019.................................................
(1) Qualitative information on financial results .......................................................................................................................
(2) Qualitative information on financial position ....................................................................................................................
(3) Qualitative Information on consolidated earnings forecast ................................................................................................

4
4
4
5

2. Summary Consolidated Financial Statements and Major Notes ..............................................................................................
(1) Summary consolidated statement of financial position ......................................................................................................
(2) Summary consolidated statement of income ......................................................................................................................
(3) Summary consolidated statement of comprehensive income .............................................................................................
(4) Summary consolidated statement of changes in equity ......................................................................................................
(5) Summary consolidated statement of cash flow ..................................................................................................................
(6) Notes regarding the summary consolidated financial statements .......................................................................................
(Notes on going concern assumption) ..............................................................................................................................
(Changes in accounting policies) .....................................................................................................................................
(Segment information) .....................................................................................................................................................

6
6
7
8
9
11
12
12
12
13

- 3 -

1. Qualitative Information on Operating Results, etc. for the Six Months Ended June 30, 2019(1) Qualitative information on financial results
In the first six months of the fiscal year under review (January 1, 2019 through June 30, 2019), the Japanese economy was on amoderate recovery trend due to steady consumer spending and capital expenditure as the employment and income environment
continued to improve. However, the economic conditions in Japan and abroad remain uncertain due to the escalation of the
trade frictions between the US and China and the UK’s withdrawal from the EU.
In the information service segment, to which the Company belongs, investments of companies continue to be steady on theback of diversified investments in strategic areas, such as digital marketing and big data analysis, and in IT systems in order toimprove productivity due to the promotion of workstyle reform. In this situation, the Group set “Acceleration to a package
vendor to platformer” in its medium-/long-term management policy. In the first six months of the fiscal year under review, theGroup moved forward with the development of the .c (dot c) series, which is a successor of the industry-specificapplication .NS (dot n s) series to enhance services that run on a digital business platform Broadleaf Cloud Platform. In
January 2019, it initiated the provision of the welfare representative service Broadleaf Club VIP Service. To accelerate theincrease in sales of the work analysis/optimization software OTRS, the Company is also currently strengthening sales activities
in Japan for a wide range of industries, such as manufacturing, logistics, healthcare/nursing care, agriculture and education. In
addition, to strengthen its sales channel overseas, the Company concluded a strategic partnership with Kaizen Global
Enterprises (head office: United Arab Emirates), which provides consulting services in more than 60 countries worldwide, inFebruary 2019, enhancing its strategic efforts over the medium-/long term.
As a result, in the first six months of the fiscal year under review (January 1, 2019 through June 30, 2019), the Company
posted revenue of 11,072 million yen (up 9.7% year on year), operating profit of 2,080 million yen (up 34.9% year on year),profit before tax of 2,075 million yen (up 34.1% year on year), and profit attributable to owners of parent of 1,361 million yen(up 36.4% year on year).
The Company has a single business segment, which consists of IT services. A breakdown of sales by business domain is shownin the table below.
(Unit: Millions of Yen)
Domain

1st Half, FY2018(From Jan. 1 toJun. 30, 2018)

1st Half, FY2019(From Jan. 1 toJun. 30, 2019)Year-on-year rate of change

Platforms

4,552

4,948

8.7%

Applications

5,538

6,123

10.6%

10,09011,072

9.7%

Total

(Note) From the first half of the consolidated fiscal year under review, based on the Medium-term Management Strategies<2019-2021> described in the “FY12/2018 Business Results Briefing,” which was announced on February 14, 2019,the classification of the revenue by segment is changed in line with the progress of the Group’s growth strategies. The
figures for the first three months of the previous fiscal year are also indicated based on this new classification.
(2) Qualitative information on financial position(i) Analysis of financial position(Assets)
Assets at the end of the first half of the consolidated fiscal year under review increased 525 million yen from the end of theprevious consolidated fiscal year, to 29,937 million yen. Current assets fell 1,786 million yen, to 8,833 million yen, and noncurrent assets increased 2,311 million yen, to 21,105 million yen. The decrease in current assets was mainly attributable todecreases in cash and cash equivalents of 2,474 million yen. The main factor contributing to the increase in non-current assets
was 734 million yen in additional property, plant and equipment, and 1,227 million yen additional intangible assets.
(Liabilities)
Liabilities at the end of the first half of the consolidated fiscal year under review declined 372 million yen from the end of theprevious consolidated fiscal year, to 8,008 million yen. Current liabilities fell 491 million yen, to 7,423 million yen, and noncurrent liabilities increased by 119 million yen, to 585 million yen. The main factor for the fall in current liabilities was adecrease in contract liabilities of 272 million yen, income taxes payable of 201 million yen and a decrease in other current
liabilities of 371 million yen, despite an increase in short-term interest-bearing debt of 233 million yen.
- 4 -(Equity)
Equity at the end of the first half of the consolidated fiscal year under review increased 897 million yen from the end of theprevious consolidated fiscal year, to 21,930 million yen. The increase was chiefly attributable to an increase in retained
earnings of 1,003 million yen.
(ii) Analysis of cash flows
Cash and cash equivalents (“cash”) at the end of the first half of the consolidated fiscal year under review declined 2,474
million yen from the end of the previous consolidated fiscal year, to 3,153 million yen.
The following is a description of the situation and major factors of each category of cash flows in the six months ended June 30,
2019.
(Net cash from (used in) operating activities)
Net cash provided by operating activities stood at 898 million yen, mainly reflecting increases in income taxes paid of 990
million yen, operating and other payables of 740 million yen, which partially offset the posting of profit before tax of 2,075
million yen, and depreciation and amortization expenses of 908 million yen.
(Net cash from (used in) investing activities)
Net cash used in investing activities came to 2,039 million yen, mainly due to the acquisition of intangible assets of 1,652
million yen and the acquisition of investments of 1,048 million yen.
(Net cash from (used in) financing activities)
Net cash used in financing activities came to 1,324 million yen, chiefly attributable to cash dividends paid of 568 million yen,
repayments of lease obligations of 441 million yen, and the repayment of long-term loans payable of 316 million yen.
(3) Qualitative Information on consolidated earnings forecast
There have been no changes in the consolidated results forecasts for the fiscal year ending December 31, 2019 announced in
the “Summary of Financial Statements for the Fiscal Year Ended December 31, 2018” on February 14, 2019.
.

- 5 -

2. Summary Consolidated Financial Statements and Major Notes(1) Summary consolidated statement of financial position(Unit: Thousands of Yen)FY2018(As of Dec. 31, 2018)
AssetsCurrent assets
Cash and cash equivalents
Operating and other receivables
Inventories
Other current financial assets
Other current assets
Total current assets

Q2 FY2019(As of Jun. 30, 2019)

5,626,723
4,447,390
238,46130
306,121
10,618,726

3,152,742
5,186,109
158,405
1,000
334,559
8,832,814

442,641
11,739,040
4,633,235
37,152
1,405,853
115,372
420,864
18,794,156
29,412,881

1,177,034
11,802,502
5,860,109
31,653
1,646,466
110,437
476,455
21,104,656
29,937,470

Liabilities and Equity
Liabilities
Current liabilities
Operating and other payables
Contract liabilities
Short-term interest-bearing debt
Income taxes payable
Other current financial liabilities
Other current liabilities
Total current liabilities

3,623,665
1,616,791
378,551
1,004,527
72,8201,216,718
7,913,072

3,718,649
1,345,058
611,994
803,978
97,249845,623
7,422,553

Non-current liabilities
Long-term interest-bearing debt
Net defined benefit liability
Non-current provisions
Deferred tax liabilities
Total non-current liabilities
Total liabilities

84,738196,345
133,207
52,097466,386
8,379,457

223,283
194,225
134,870
32,615584,993
8,007,546

EquityCapital stock
Share premium
Treasury shares
Retained earnings
Other components of equity
Total equity attributable to owners of parent
Non-controlling interests
Total equity
Total liabilities and equity

7,147,905
7,180,289-3,500,454
9,759,561
446,124
21,033,424–
21,033,424
29,412,881

7,147,905
7,200,988-3,458,288
10,762,920
273,567
21,927,092
2,832
21,929,925
29,937,470

Non-current assets
Property, plant and equipment
Goodwill
Intangible assets
Investments accounted for using equity method
Other non-current financial assets
Other non-current assets
Deferred tax assets
Total non-current assets
Total assets- 6 -(2) Summary consolidated statement of income(Unit: Thousands of Yen)
1st Half, FY2018(From Jan. 1, 2018
to Jun. 30, 2018)
Revenue
Cost of sales
Gross profit
Selling, general and administrative expenses
Other operating income
Other operating expense
Operating profit
Finance income
Finance cost
Equity in loss of affiliates
Profit before tax
Income tax
ProfitProfit attributable to:
Owners of parent
Non-controlling interests
ProfitEarnings per share
Basic earnings per share (yen)Diluted earnings per share (yen)- 7 -1st Half, FY2019(From Jan. 1, 2019
to Jun. 30, 2019)10,089,720-2,567,953
7,521,767-5,988,769
26,623-17,633
1,541,988
15,293-4,989-4,5081,547,784-549,573
998,211

11,071,558-3,065,442
8,006,116-5,948,089
37,233-15,4712,079,789
11,795-8,890-7,231
2,075,463-714,188
1,361,274

998,211–998,211

1,361,391-117
1,361,274

11.39
11.31

15.59
15.39

(3) Summary consolidated statement of comprehensive income(Unit: Thousands of Yen)
1st Half, FY2018(From Jan. 1, 2018
to Jun. 30, 2018)
ProfitOther comprehensive income
Components that will not be reclassified to profit or loss
Net change in fair value of financial assets of equity
nature measured at fair value through othercomprehensive income
Remeasurements of defined benefit plans
Total components that will not be reclassified to
profit or loss
Components that may be reclassified to profit or loss
Exchange differences on translation of foreign
operations
Share of other comprehensive income of associates
accounted for using equity method
Total components that may be reclassified to profit
or loss
Total other comprehensive income, net of tax
Comprehensive income
Comprehensive income attributable to:
Owners of parent
Non-controlling interests
Profit- 8 -1st Half, FY2019(From Jan. 1, 2019
to Jun. 30, 2019)998,211

1,361,274-47,496-43,7148,603–-38,893-43,714-11,797825-5,671

2,108-17,467

2,933-56,360-40,781

941,851

1,320,493

941,851–
941,851

1,320,610-117
1,320,493

(4) Summary consolidated statement of changes in equity
1st Half, FY2018 (From Jan. 1, 2018 to Jun. 30, 2018)(Unit: Thousands of Yen)
Equity attributable to owners of parent
Other components of equity
Capital stock

Exchangedifferences ontranslation offoreign operations

Share premium

Treasury shares

Retained earnings

7,147,905

7,116,269-2,736,155

8,009,349

165,866-36,065–––

52,729––7,147,905

7,116,269-2,736,155

8,062,078

165,866-36,065

Profit–––998,211––

Other comprehensive income

–

–

–

–

–

-17,467

Total comprehensive income

–

–

–

998,211–-17,467

Purchase of treasury shares––-1,005,603

–

–

–

Disposal of treasury shares–

64,993239,830–-8,829–Dividends–––-487,018––

Share-based paymenttransactions

–

–

–

–

82,304–

Reclassification from othercomponents of equity toretained earnings

–

–

–

8,603

–

–

Balance as of January 1, 2018
Changes in accounting
policies
Balance after restatement ofprior period’s financial results
after error corrections

Total transactions with owners
Balance as of June 30, 2018

Warrants–

64,993-765,773-478,414

73,475–

7,147,905

7,181,262-3,501,927

8,581,874

239,341-53,532(Unit: Thousands of Yen)
Equity attributable to owners of parent
Other components of equity
Net change in fairvalue of financial
assets of equity
Remeasurements ofnature measured atdefined benefit
fair value through
plans
other
comprehensive
incomeBalance as of January 1, 2018
Changes in accounting
policies
Balance after restatement ofprior period’s financial results
after error corrections

Total equity

Total

Total

70,255–200,056

19,737,424

19,737,424

–

–

–

52,72952,72970,255–200,056

19,790,153

19,790,153
998,211–––998,211-47,496

8,603-56,360-56,360-56,360

Total comprehensive income-47,496

8,603-56,360

941,851

941,851

Purchase of treasury shares

–

–

–

-1,005,603-1,005,603

Disposal of treasury shares––-8,829295,994

295,994

Dividends–––-487,018-487,018

Share-based paymenttransactions––

82,30482,30482,304

Reclassification from othercomponents of equity toretained earnings–-8,603-8,603–––-8,60364,872-1,114,323-1,114,323

22,759–208,567

19,617,681

19,617,681

ProfitOther comprehensive income

Total transactions with owners
Balance as of June 30, 2018

- 9 -

1st Half, FY2019 (From Jan. 1, 2019 to Jun. 30, 2019)(Unit: Thousands of Yen)
Equity attributable to owners of parent
Other components of equity
Capital stock

Shares withrestriction ontransfer

Share premium

Treasury shares

Retained earnings

7,147,905

7,180,906-3,500,454

9,758,944

363,850

–

–

–

–

38,969––7,147,905

7,180,906-3,500,454

9,797,913

363,850–

Profit–––1,361,391––

Other comprehensive income

–

–

–

–

–

–

Total comprehensive income

–

–

–

1,361,391––

Acquisition of subsidiaries

–

–

–

–

–

–

Disposal of treasury shares–-1,936

6,174–-5,610–

Dividends–––-567,505––

Share-based paymenttransactions–

22,01835,993–

86,955-42,000

Reclassification from othercomponents of equity toretained earnings

–

–

–

171,121––

Balance as of January 1, 2019
Changes in accounting
policies
Balance after restatement ofprior period’s financial results
after error corrections

Total transactions with owners
Balance as of June 30, 2019

Warrants–

20,082

42,167-396,384

81,345-42,000

7,147,905

7,200,988-3,458,288

10,762,920

445,196-42,000(Unit: Thousands of Yen)
Equity attributable to owners of parent
Other components of equity

Balance as of January 1, 2019
Changes in accounting
policies
Balance after restatement ofprior period’s financial results
after error corrections

Exchangedifferences ontranslation offoreign operations

Net change in fairvalue of financial
assets of equity
nature measured atfair value throughothercomprehensive
income-49,109131,383

446,124

21,033,424–

21,033,424

–

–

–

38,969–38,969-49,109131,383

446,124

21,072,393–

21,072,393
1,361,274

Non-controllinginterests

Total

Total

Total equity

–

–

–

1,361,391

-117

2,933

-43,714-40,781-40,781–-40,781

Total comprehensive income

2,933-43,714-40,781

1,320,610-117

1,320,493

Acquisition of subsidiaries

–

–

–

–

2,949

2,949

Disposal of treasury shares––-5,610-1,372–-1,372

Dividends–––-567,505–-567,505

Share-based paymenttransactions––

44,956

102,967–

102,967

Reclassification from othercomponents of equity toretained earnings–-171,121-171,121

–

–

–

–

-171,121-131,775-465,911

2,949-462,962-46,176-83,452

273,567

21,927,092

2,832

21,929,925

ProfitOther comprehensive income

Total transactions with owners
Balance as of June 30, 2019- 10 -

(5) Summary consolidated statement of cash flow
(Unit: Thousands of Yen)
Notes
Cash flows from operating activities
Profit before tax
Depreciation and amortization expense
Share-based payment expenses
Finance income and costs
Equity in loss (earnings) of affiliates
Decrease (increase) in operating and other receivables
Decrease (increase) in inventories
Increase (decrease) in operating and other payables
Increase (decrease) in accrued expenses
Increase (decrease) in employees' bonuses payable
Increase (decrease) in contract liabilities
Increase (decrease) in consumption taxes payable
Other, net
SubtotalInterest received
Dividends received
Interest expenses paid
Income taxes paid
Cash flows from (used in) operating activities
Cash flows from investing activities
Acquisition of property, plant and equipment
Acquisition of intangible assets
Acquisition of investments
Proceeds from sale of investments
Purchase of investments in subsidiaries resulting inchange in scope of consolidation
Payments for lease and guarantee deposits
Proceeds from collection of lease and guarantee deposits
Other, net
Cash flows from (used in) investing activities
Cash flows from financing activities
Repayments of long-term loans payable
Repayments of lease obligations (during the first six
months of the previous consolidated fiscal year)
Cash dividends paid
Purchase of treasury shares
Proceeds from sales of treasury shares
Other, net
Cash flows from (used in) financing activities
Impact of exchange fluctuations for cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Balance of cash and cash equivalents at the end of thequarter- 11 -

1st Half, FY2018(From Jan. 1, 2018
to Jun. 30, 2018)

1st Half, FY2019(From Jan. 1, 2019
to Jun. 30, 2019)

1,547,784
374,875
82,304-10,304
4,508-26,545
3,110-149,699
187,044
222,073-219,561-9,101
49,631
2,056,118
334
1,597-2,514-540,022
1,515,514

2,075,463
908,498
95,345-2,9057,231-740,341
81,804
91,773-168,023-133,747-271,733-73,775
20,561
1,890,150
70
1,646-3,163-990,259
898,443-39,193-985,601––-28,807-1,652,392-1,048,346
745,500–-64,215-29,619
21,97924,590-1,007,843-15,717
4,754
20,444-2,038,779-341,350-316,000-28,686-441,140-487,018-1,005,603
297,157-17,400-1,582,899-567,505–
4,238-3,247-1,323,653-5,201-9,992-1,080,430
5,970,318-2,473,981
5,626,723

4,889,888

3,152,742

(6) Notes regarding the summary consolidated financial statements(Notes on going concern assumption)
Not applicable.
(Changes in accounting policies)
The important accounting policy applied to the Summary Quarterly Financial Statements was also applied to the consolidated
financial statements for the previous consolidated fiscal year, excluding the following.
The income tax expense during the first six months of the consolidated fiscal year under review is calculated based on theeffective tax rate for the fiscal year of estimate.
Lease
The Group has applied IFRS 16 Leases (released in January 2016, hereinafter, “IFRS 16”) since the first quarter of theconsolidated fiscal year. For the application of IFRS 16, the transitional provision under C5 (b) is taken, and the cumulative
effects of the start of application is recognized as retained earnings on the date of application (January 1, 2019).
During the period of comparison, the Company, as a borrower, classifies the type of lease with which risk and economic value
for owning it is transferred effectively as a finance lease, and posts assets/liabilities related to lease transactions. Other types oflease contracts are classified as operating leases, and the lease payment based on the operating lease is recognized as expenses
on a straight-line basis during the lease period.
In the transition to IFRS 16, shortcuts on a practical level under IFRS 16 C3 are chosen regarding whether a lease is included
in a contract, and the judgment under IAS 17 Leases (hereinafter, “IAS 17”) and IFRIC 4 “Judgment on whether a lease isincluded in a contract” is continued.
Lease liabilities in a lease transaction are initially measured as the present value discounted using a calculated interest rate of
the unsettled portion of the total lease payment on the start date of the lease. If calculation of the interest rate of the lease isdifficult, the Group’s additional borrowing interest rate is used, and the Group generally uses the additional borrowing interest
rate as the discount rate.
With regard to the right of use asset, the initial measurement is conducted on the initial measured amount of lease liabilities
adjusted by prepaid lease payments, etc. Depreciation is conducted for the right of use asset on a regular basis during the lease
period.
The Group includes the right of use assets in property, plant and equipment and lease liabilities in interest-bearing debt in thesummary consolidated statement of financial position.
The Group judges based on the substance of a contract whether the contract is a lease or not, or whether a lease is included in
the contract, even if the contract is not a type of lease from the standpoint of the law.
With regard to a lease for which the lease period is terminated within 12 months and a lease with a small amount of underlying
assets, the lease fee related to the lease is recognized as expenses during the lease period.
The Group recognizes lease liabilities for leases, to which IAS 17 was applied in the past for classification as operating leases,on the start date of the application of IFRS 16. The lease liabilities are measured with the present value of the remaining leasefee discounted using the borrower’s additional borrowing interest rate on the start date of the application. The weighted
average of the borrower’s additional borrowing interest rate applied to lease liabilities, which is recognized in the Summary
Quarterly Financial Statements on the start date of the application, is 0.54%.
For the measurement of the right of use assets, a method is adopted in which the measured amount of lease liabilities isadjusted by prepaid lease fee and unsettled lease fee.
In addition, the Group uses the following shortcut methods on a practical level for the application of IFRS 16.
- A single discount rate is applied to a portfolio of leases with rationally similar characteristics-

With regard to a contract with an extension or cancellation option, ex-post judgment is made for the calculation of thelease period.

-

A replacement for impairment loss review is based on the evaluation of the disadvantages of applying IAS 37 “Noncurrent provisions, contingent liabilities, and contingent assets” to a lease immediately before the start date of the-application.
Initial direct cost is excluded from the right of use assets on the start date of the application.

As a result, in the (beginning-of-year) Summary Quarterly Financial Statements of the first half of the consolidated fiscal year
under review, property, plant and equipment, and interest-bearing debt increased by 942,455 thousand yen and 886,287
thousand yen, respectively.
The impact on the summary consolidated statement of income is limited.
In addition, in the summary consolidated statement of cash flow, cash flows from financing activities declined by 406,774- 12 -

thousand yen, while cash flows from operating activities increased by the same amount during the first six months of theconsolidated fiscal year under review.
The list of adjustment below indicates the non-cancelable operating lease contract to which IAS 17 was applied, which wasdisclosed at the end of the previous consolidated fiscal year, and lease liabilities on the start date of the application recognizedin the summary consolidated statement of financial position.
(Unit: Thousands of Yen)
AmountNon-cancellable operating lease contract disclosed on December 31, 2018
Non-cancellable operating lease contract disclosed on December 31, 2018
(after discounting by additional borrowing rate)
Finance lease obligations (as of December 31, 2018)
Cancellable lease operating lease contract
Other
Lease obligations as of January 1, 2019452,272

429,418
147,288418,276
38,592
1,033,574(Segment information)
Since the Group has only a single business segment (IT services), the statement is omitted.

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