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

Summary of Financial Statements for the Fiscal Year Ended December 31, 2017
[IFRS] (Consolidated)
February 14, 2018
Broadleaf Co., Ltd.
Stock Listing: Tokyo Stock Exchange 1st Section
Representative: Kenji Oyama, Representative Director, President & CEO
Contact:
Kenichi Yamanaka, Director, Executive Vice President & COO
Tel. +81-3-5781-3100
Scheduled Date for Ordinary General Meeting of Shareholders: March 27, 2018
Scheduled Starting Date for Dividend Payment:
March 28, 2018
Scheduled Submission Date for Securities Report:
March 28, 2018
Earnings Supplementary Explanatory Documents:
Yes
Earnings Results Briefing:
Yes (For institutional investors and analysts)(Amounts are rounded down to the nearest million yen.)

1. Consolidated Financial Results for FY2017 (from January 1, 2017 to December 31, 2017)(1) Consolidated Results of Operations(Percentage below represents increase (decrease) from the same period of previous year)
Revenue

Operating profit

Millions of Yen

FY2017FY201618,195
16,760

Profit before tax% Millions of Yen

8.6
-0.2

3,011
2,953

% Millions of Yen

2.0
-3.6

% Millions of Yen

2,989
2,921

2.3
-4.5

3.0
-5.5

Total comprehensive
income% Millions of Yen

1,932
1,876

3.0
-5.5

Return on assets

1,952
1,876

%

4.0
-4.8

Operating margin

Yen

Yen

%

%

%

43.63
39.47

43.60
39.45

9.9
9.6

11.2
11.4

16.5
17.6

(Reference) Share of (profit) loss of entities accounted for using equity Method(Note)% Millions of Yen

1,932
1,876

Return on equity
attributable to ownersof the parent

Basic earnings per share Diluted earnings per share

FY2017FY2016

Profit attributable toowners of parent

Profit

FY2017: -19 million yen
FY2016: -6 million yen

The Company conducted a 2-for-1 common stock split effective December 17, 2016. The basic earnings per share and the diluted earnings per share for
FY2016 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 ownersof parent

Equity attributable toowners of parent

Total equity

Equity attributable toowners of parent per share

Millions of Yen

Millions of Yen

%

Yen

Yen

28,06325,322

19,737
19,15919,737
19,15970.3
75.7

445.80425.67

End of FY2017
End of FY2016(3) Cash Flow Status
Operating activities

FY2017FY2016

Investing activities

Cash and cash equivalents at endof period

Financing activities

Millions of Yen

Millions of Yen

Millions of Yen

Millions of Yen

2,558
3,142

-2,072-684-2,251-3,324

5,970
7,738

2. Dividends
Dividends Per Share
End of Q1

FY2016FY2017

End of Q2

End of Q3

Year-end

Total Dividends(Annual)

Total

Dividend Payout
Ratio(Consolidated)

Ratio ofdividends toequityattributable toowners of parent(Consolidated)

Yen

Yen

Yen

Yen

Yen

Millions of Yen

%

%

‒
‒
‒

17.50
11.00
5.50

‒
‒
‒

12.50
11.00
5.50

30.00
22.00
11.00

1,011
1,015

53.8
50.4
45.8

5.1
5.0

FY2018 (Forecast)(Note 1) The Company conducted a 2-for-1 common stock split effective December 17, 2016. The dividends for the period to the end of Q2 of FY2016 are actual
dividends before the stock split.
(Note 2) Breakdown of dividends for the end of Q2 FY2016: Ordinary dividend 12.50 yen Commemorative dividend 5.00 yen(Note 3) The Company will conduct a 2-for-1 stock split effective April 1, 2018. The dividends in FY2016 and FY2017 are based on shares before the stock split.
(Note 4) FY2018 (Forecast) takes into account the impact of the 2-for-1 stock split effective April 1, 2018.

3. Earnings Forecast for FY2018 (from January 1, 2018 to December 31, 2018)(Percentages below represent increases (decreases) from the same period of the previous fiscal year.)
Revenue
1st Half of FY2018(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

9,400
20,400

18.6
12.1

950
3,300

3.4
9.6

930
3,260

2.7
9.0

600
2,100

7.3
8.7

6.85
24.02

FY2017The basic earnings per share for FY2018 take into account the impact of the 2-for-1 stock split effective April 1, 2018.

-1-

* Notes(1) Changes in significant subsidiaries during the fiscal year ended December 31, 2017 (changes of specified subsidiaries with changeof the 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 “3. Consolidated Financial Statements and Major Notes, (5) Notes to consolidated financial statements(Changes in accounting policies)” on page 14 of the attached material.
(3) Number of shares outstanding (common stock)
1. Number of shares outstanding (including
treasury stock)

FY2017

48,948,400

FY201648,948,400

2. Number of shares of treasury stock

FY2017

4,674,068

FY2016

3,939,268

3. Average number of shares outstanding
44,285,469
47,520,749
FY2017FY2016(during the period)(Note) The Company conducted a 2-for-1 common stock split effective December 17, 2016. The number of shares
outstanding (common stock) in FY2016 are calculated on the assumption that the stock split was conducted at the
beginning of the previous fiscal year.
* Summaries of financial statements are not subject to audit.
* 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 theachievability of what is described in the statements. Actual results may differ from these forecasts due to various factors.
- The Company will conduct a 2-for-1 stock split effective April 1, 2018.
(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 Thursday, February 15, 2018.
The video of this results briefing will be posted on the Company’s website with the briefing materials used on the current day
immediately after the results briefing.

-2-

○Table of Contents of Attached Material
1. Overview of Results of Operations, Etc. .................................................................................................................................
(1) Overview of financial results in the fiscal year ended December 31, 2017 .....................................................................
(2) Overview of financial position in the fiscal year under review ........................................................................................
(3) Basic policy on profit distribution and dividends for FY2017 and FY2018 ....................................................................

4
4
4
6

2. Basic Policy on the Selection of Accounting Standards ..........................................................................................................

7

3. Consolidated Financial Statements and Major Notes ..............................................................................................................
(1) Consolidated statement of financial position ...................................................................................................................
(2) Consolidated statement of income and consolidated statement of comprehensive income ..............................................
Consolidated statement of income ...................................................................................................................................
Consolidated statement of comprehensive income ..........................................................................................................
(3) Consolidated statement of changes in equity ...................................................................................................................
(4) Consolidated statement of cash flows ..............................................................................................................................
(5) Notes to consolidated financial statements ......................................................................................................................
(Notes on going concern assumption) ..............................................................................................................................
(Changes in accounting policies) .....................................................................................................................................
(Segment information) .....................................................................................................................................................
(Profit per share) ..............................................................................................................................................................
(Significant subsequent events) .......................................................................................................................................

8
8
9
9
10
11
13
14
14
14
14
15
15

-3-

1. Overview of Results of Operations, Etc.
(1) Overview of financial results in the fiscal year ended December 31, 2017(i) Results of operations in the fiscal year ended December 31, 2017
In the fiscal year under review (from January 1, 2017 to December 31, 2017), the Japanese economy remained on a moderate
recovery trend partly backed by improved corporate earnings and employment and income situations. However, attention
should be paid to the risk of overseas economies, including the effects of the political situation in the United States and Europe
and trends in financial and capital markets, putting downward pressure on the Japanese economy.
In the information service industry, investment is expected to increase in strategic areas such as cloud services, big data
analysis, cyber security measures and expansion into IoT, in addition to the existing types of IT spending for the purposes ofimproving productivity and efficiency. Meanwhile, there are signs of a recovery in capital investment among companies. On
the other hand, the entire industry faces the issue of securing excellent engineers who can adapt to the latest technologies andearly development and offering of high value-added services.
In this environment, the Company launched the sale of the .NS2, a new model added to the .NS Series of its industry-specificapplications, with the aim of expanding its customer base and changing its revenue structure. The Company also took steps toincrease the number of customers for the CarpodTab, a tablet-type business support tool, and continued to take action for theindustry standardization of the BL Parts Order System, an electronic order service for auto parts. Accompanying these
initiatives, the Company stepped up its efforts to provide higher value-added services for customers by successively revamping
the industry-specific applications that the Company offers to customers, strengthening its automobile-related database, anddeveloping automotive data analytical services. During the third quarter of the fiscal year under review, the Company acquired
shares in Tajima Inc., which had been a competitor in systems and other products for auto maintenance businesses, and made ita consolidated subsidiary.
As a result, revenue in the fiscal year under review increased 8.6% year on year, to 18,195 million yen. In terms of profits andlosses, operating profit increased by 2.0% year on year, to 3,011 million yen, profit before tax rose by 2.3% year on year, to2,989 million yen, and profit attributable to owners of parent grew 3.0% year on year, to 1,932 million yen.
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)
DomainFY2016(From Jan. 1 to
Dec. 31, 2016)

FY2017(From Jan. 1 to
Dec. 31, 2017)

Year-on-year rate ofchangeBusiness Application Software

10,894

11,737

7.7%

System Support

1,243

1,264

1.6%

Network Service

4,623

5,194

12.3%

Total

16,76018,195

8.6%(ii) Outlook for the fiscal year ending December 31, 2018
In the automotive aftermarket industry, to which major customers of the Company belong, the business environment ischanging dramatically, with the diversification of car owners’ needs and the entry of entities from outside the industry.
Consequently, the Company must work with its customers to promptly implement strategies that better reflect the views of car
owners.
In this environment, the Group will seek to develop new services utilizing large-scale automobile-related information, and will
also step up initiatives to increase the added value of databases and strengthen alliances with other companies for the
expansion of the next-generation automotive aftermarket business. The Group also plans to leverage its expertise in theindustry-specific applications and databases it provides to business operators in the automotive aftermarket industry to develop
new businesses and services. By contributing to more efficient, energetic parts distribution in the automotive aftermarket
industry through such initiatives, the Group aims to further increase the earnings of the Network Service domain and gain new
customers.
As a result of the above initiatives, in the fiscal year ending December 31, 2018, the Company forecasts consolidated net salesof 20,400 million yen, consolidated operating profit of 3,300 million yen, consolidated profit before tax of 3,260 million yen,
and consolidated profit attributable to owners of parent of 2,100 million yen.
(2) Overview of financial position in the fiscal year under review(i) Assets, liabilities, and net assets
Total assets at the end of the fiscal year under review increased 2,741 million yen from the end of the previous fiscal year, to-4-

28,063 million yen (up 10.8% year on year). Current assets fell 904 million yen, to 11,400 million yen (down 7.3%), and noncurrent assets increased 3,645 million yen, to 16,663 million yen (up 28.0%). The decrease in current assets was mainly
attributable to a decline in cash and cash equivalents of 1,768 million yen. The main factors of the increase in non-current
assets were a rise of 1,708 million yen in goodwill and an increase of 1,840 million yen in intangible assets.
Liabilities rose by 2,163 million yen from the end of the previous fiscal year, to 8,326 million yen (up 35.1% year on year).
Current liabilities increased 2,497 million yen, to 7,478 million yen (up 50.1%). Non-current liabilities declined 335 million
yen, to 848 million yen (down 28.3%). The main factor for the increase in current liabilities was an increase in operating andother payables of 2,455 million yen. The reduction in non-current liabilities was mainly attributable to a decrease in long-term
interest-bearing debt of 611 million yen.
Total equity rose 578 million yen from the end of the previous fiscal year, to 19,737 million yen (up 3.0% year on year). The
increase in total equity was chiefly attributable to an increase of 873 million yen in retained earnings.
As a result, the percentage of equity attributable to owners of parent fell 5.4 percentage points from 75.7% at the end of theprevious fiscal year to 70.3%.
(ii) Cash flows
Cash and cash equivalents (“cash”) at the end of the fiscal year under review declined 1,768 million yen from the end of theprevious fiscal year, to 5,970 million yen. Net cash provided by operating activities stood at 2,558 million yen. Net cash used
in investing activities came to 2,072 million yen. Net cash used in financing activities was 2,251 million yen.
The following is a description of the situation and major factors of each category of cash flows in the fiscal year under review.
(Cash flows from (used in) operating activities)
Net cash provided by operating activities stood at 2,558 million yen (down 18.6% year on year), reflecting profit before tax of
2,989 million yen and depreciation and amortization expense of 679 million yen, which were partially offset by income taxes
paid of 1,167 million yen.
(Cash flows from (used in) investing activities)
Net cash used in investing activities came to 2,072 million yen (up 202.9% year on year), mainly due to the acquisition of
intangible assets of 1,227 million yen and the purchase of shares of subsidiaries resulting in change in scope of consolidationof 865 million yen.
(Cash flows from (used in) financing activities)
Net cash used in financing activities was 2,251 million yen (down 32.3% year on year), chiefly attributable to cash dividends
paid of 1,049 million yen, repayments of long-term loans payable of 668 million yen, and the purchase of treasury shares of
530 million yen.
(For reference) Trends in cash flow-related data
FY2015FY2016FY2017

Percentage of equity attributable to owners ofparent (%)

76.2

75.7

70.3

Market value-based percentage of equity
attributable to owners of parent (%)

110.6

112.3

165.3

Interest-bearing debt to cash flows (years)

4.0

0.5

0.4

Interest coverage ratio (times)

56.9

284.0

462.0

Percentage of equity attributable to owners of parent: Equity attributable to owners of parent/Total assets
Market value-based percentage of equity attributable to owners of parent: Market capitalization/Total assets
Interest-bearing debt to cash flows: Interest-bearing debt/Cash flows
Interest coverage ratio: Cash flows/Interest payments(Note 1) Market capitalization is calculated based on the number of issued shares less the number of shares of treasury stock.
(Note 2) Cash flows are net cash provided (used in) operating activities.
(Note 3) Interest-bearing debt denotes all liabilities bearing interest of the liabilities posted on the consolidated statement offinancial position.

-5-(3) Basic policy on profit distribution and dividends for FY2017 and FY2018
The Company positions returning profits to shareholders as an important management issue. Its basic policy is securing
internal reserves for future business development and the reinforcement of the management structure and continuing to
distribute stable dividends. We aim for a payout ratio of approximately 20%.
To secure opportunities for returning profits to shareholders, we distribute dividends twice a year: interim dividends and yearend dividends. Interim dividends are determined by the Board of Directors, and year-end dividends are determined by theannual shareholders’ meeting. The Articles of Incorporation stipulate that by a resolution of the Board of Directors, theCompany may pay interim dividends to the shareholders or registered pledgees of shares stated or recorded in the final
shareholder registry on June 30 every year.
With respect to dividends for the fiscal year under review, we will pay an annual dividend of 22.0 yen, including the interim
dividend of 11.0 yen.
The Company forecasts that the dividend per share for the next fiscal year will be 11.0 yen (an interim dividend of 5.5 yen anda year-end dividend of 5.5 yen). This is an amount that takes into account the 2-for-1 common stock split effective April 1,
2018.
If the stock split is not taken into account, the dividend per share for the next fiscal year will be 22.0 yen, the same as in thefiscal year under review.

-6-2. Basic Policy on the Selection of Accounting Standards
The Group has decided to voluntarily apply the International Financial Reporting Standards (IFRS), replacing the Japanese GAAP,
from the consolidated financial statements in the annual securities report for the fiscal year ended December 31, 2016 to increase
convenience for the stakeholders, including shareholders and investors in Japan and overseas, by improving the international
comparability of financial information and expanding the scope of disclosure.

-7-

3. Consolidated Financial Statements and Major Notes(1) Consolidated statement of financial position(Unit: Thousands of Yen)FY2016(As of December 31, 2016)
AssetsCurrent assets
Cash and cash equivalents
Operating and other receivables
Inventories
Other current financial assets
Other current assets
Total current assets

FY2017(As of December 31, 2017)

7,738,206
4,199,180
109,866417
256,566
12,304,234

5,970,318
4,984,981
128,353–
316,609
11,400,260

426,750
10,031,002
1,142,446
70,896
1,148,794
26,024
171,824
13,017,736
25,321,970

424,747
11,739,040
2,982,588
57,0791,238,994
13,340206,881
16,662,670
28,062,930

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

3,140,345
655,086
601,139
85,072
498,475
4,980,118

5,595,736
645,323
568,415
83,140584,924
7,477,539

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

1,072,366–
110,300–
1,182,666
6,162,784

461,122
227,131
139,786
19,927
847,967
8,325,505

7,147,905
7,114,654-2,252,885
7,136,345
13,167
19,159,187
19,159,187
25,321,970

7,147,905
7,116,269-2,736,155
8,009,349
200,056
19,737,424
19,737,424
28,062,930

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

EquityCapital stock
Share premium
Treasury shares
Retained earnings
Other components of equity
Total equity attributable to owners of parent
Total equity
Total liabilities and equity-8-(2) Consolidated statement of income and consolidated statement of comprehensive income
Consolidated statement of income(Unit: Thousands of Yen)FY2016(From January 1, 2016
to December 31, 2016)

FY2017(From January 1, 2017
to December 31, 2017)

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
Profit

16,760,167-5,190,434
11,569,733-8,806,416
318,759-129,246
2,952,830
7,266-32,389-6,381
2,921,326-1,045,790
1,875,536

18,194,991-4,889,201
13,305,790-10,300,878
23,160-17,1713,010,901
15,517-18,041-18,923
2,989,455-1,057,351
1,932,104

Profit attributable to owners of parent

1,875,536

1,932,104

39.47
39.45

43.63
43.60

Earnings per share
Basic earnings per share (yen)Diluted earnings per share (yen)-9-Consolidated statement of comprehensive income(Unit: Thousands of Yen)FY2016(From January 1, 2016
to December 31, 2016)
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- 10 -FY2017(From January 1, 2017
to December 31, 2017)

1,875,536

1,932,104

27,263

15,861–

2,056

27,263

17,917-15,192-6,210-11,223

7,732-26,415

1,521

847

19,4381,876,383

1,951,542

1,876,383

1,951,542

(3) Consolidated statement of changes in equity
FY2016 (From January 1, 2016 to December 31, 2016)(Unit: Thousands of Yen)
Equity attributable to owners of parent
Capital stock
Balance as of January 1, 2016

Share premium

Treasury shares

Retained earnings

7,147,905

7,128,960-1,330,018

6,941,080

Profit

–––1,875,536

Other comprehensive income

–

–

–

–

Total comprehensive income

–

–

–

1,875,536

Purchase of treasury shares––-1,946,885–

Disposal of treasury shares–-14,305

56,842–

Cancellation of treasury shares–-967,177

967,177–

Dividend–––-720,179

Reclassification from share premium
to retained earnings–

967,177–-967,177

Reclassification from othercomponents of equity to retained
earnings–––-7,781Other changes

–

–

–

14,867–-14,305-922,867-1,680,271

7,147,905

7,114,654-2,252,885

7,136,345

Total transactions with owners
Balance as of December 31, 2016

(Unit: Thousands of Yen)
Equity attributable to owners of parent
Other components of equity
Net change in fairvalue of financial
Exchange
assets of equity
differences on nature measured attranslation offair value throughforeign operations
othercomprehensive
incomeWarrants

Balance as of January 1, 2016

Total equity

Total

Total

29,592-11,171

8,326

26,74819,914,674

19,914,674

Profit

––––1,875,536

1,875,536

Other comprehensive income–-26,415

27,263

847

847

847

Total comprehensive income–-26,415

27,263847

1,876,383

1,876,383

Purchase of treasury shares

–

–

–

–

-1,946,885-1,946,885

Disposal of treasury shares

–

–

–

–

42,53642,536

Cancellation of treasury shares

–

–

–

–

–

–

Dividend

–

–

–

–

-720,179-720,179

Reclassification from share premium
to retained earnings

–

–

–

–

–

–

Reclassification from othercomponents of equity to retained
earnings

–

–

7,781

7,781

–

–

-22,209––-22,209-7,342-7,342

Total transactions with owners

Other changes-22,209–

7,781-14,428-2,631,871-2,631,871

Balance as of December 31, 2016

7,383

-37,586

43,37013,167

19,159,187

19,159,187- 11 -

FY2017 (From January 1, 2017 to December 31, 2017)(Unit: Thousands of Yen)
Equity attributable to owners of parent
Capital stock
Balance as of January 1, 2017

Share premium

Treasury shares

Retained earnings

7,147,905

7,114,654-2,252,885

7,136,345

Profit

–––1,932,104

Other comprehensive income

–

–

–

–

Total comprehensive income

–

–

–

1,932,104

Purchase of treasury shares––-530,475–

Disposal of treasury shares–

557

47,205–

Dividend–––-1,049,308

Reclassification from share premium
to retained earnings

–

1,058

–

-1,058

Share-based payment transactions

–

–

–

–

Reclassification from othercomponents of equity to retained
earnings–––-8,968Other changes

–

–

–

234

–

1,615

-483,270-1,059,100

7,147,905

7,116,269-2,736,155

8,009,349

Total transactions with owners
Balance as of December 31, 2017

(Unit: Thousands of Yen)
Equity attributable to owners of parent
Other components of equity

Exchangedifferences ontranslation offoreign
operations

Warrants

Balance as of January 1, 2017

Net change infair value offinancial assets
of equity nature Remeasurements
measured at fairof definedvalue throughbenefit plansothercomprehensive
incomeTotal equity

Total

Total

7,383

-37,586

43,370–13,167

19,159,187

19,159,187

Profit

–

–

–

–

–

1,932,104

1,932,104

Other comprehensive income

–

1,521

15,861

2,056

19,43819,43819,438–

1,521

15,861

2,056

19,438

1,951,542

1,951,542

Purchase of treasury shares

–

–

–

–

–

-530,475-530,475

Disposal of treasury shares

-80

–

–

–

-80

47,682

47,682

Dividend

–

–

–

–

–

-1,049,308-1,049,308

Reclassification from share premium
to retained earnings

–

–

–

–

–

–

–

Share-based payment transactions

158,797－－－

158,797

158,797

158,797

Reclassification from othercomponents of equity to retained
earnings––

11,024-2,056

8,968

–

–

Total comprehensive income

-234

–

–

–

-234

–

–

Total transactions with owners

Other changes

158,483–

11,024-2,056

167,451-1,373,304-1,373,304

Balance as of December 31, 2017

165,866-36,065

70,255–200,056

19,737,424

19,737,424- 12 -

(4) Consolidated statement of cash flows(Unit: Thousands of Yen)FY2016(From January 1, 2016
to December 31, 2016)
Cash flows from operating activities
Profit before tax
Depreciation and amortization expense
Impairment loss
Share-based payment expenses
Compensation for damage received
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 employees’ bonuses payable
Increase (decrease) in consumption taxes payable
Other, net
SubtotalInterest received
Dividends received
Interest expenses paid
Compensation for damage received
Income taxes (paid) refund
Cash flows from (used in) operating activities
Cash flows from investing activities
Acquisition of property, plant and equipment
Proceeds from sales of property, plant and equipment
Acquisition of intangible assets
Acquisition of investments
Purchase of shares of subsidiaries resulting in change
in scope of consolidation
Payments for lease and guarantee deposits
Proceeds from collection of lease and guarantee
deposits
Acquisition of investments accounted for using equity
methodOther, net
Cash flows from (used in) investing activities
Cash flows from financing activities
Repayments of long-term loans payable
Repayments of lease obligations
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 end of period- 13 -FY2017(From January 1, 2017
to December 31, 2017)

2,921,326
677,156
54,550–-250,925
25,1236,381-183,232
122,618
235,676-148,529
45,916-73,006
3,433,054
1,333
5,320
-11,064
250,925-537,592
3,141,976

2,989,455
678,591
9,900
158,797–
2,523
18,923-362,055
62,248-333
119,646
48,848-1,164
3,725,380
1,992
3,098
-5,536–-1,167,155
2,557,778-32,351–-473,330-99,856-43,673
50,407-1,226,809-15,000–-865,414-6,044-12,917

19,02334,540-86,656–-4,829-684,043

6,603-2,072,263-661,960-32,861-720,179-1,946,885
42,536-4,507-3,323,856-667,850-46,130-1,049,308-530,475
47,682-4,500-2,250,582-24,381-2,821-890,304
8,628,510
7,738,206-1,767,888
7,738,206
5,970,318

(5) Notes to consolidated financial statements(Notes on going concern assumption)
Not applicable.
(Changes in accounting policies)
The Group applies the following standard from the consolidated fiscal year under review.
Standard
Name of Standard
Overview of new requirements / revisions
IAS 7

Statement of Cash Flows

Revisions to the disclosure of changes in liabilities arising from financing activities

The application of the above standard does not have a significant impact on the consolidated financial statements of the Group.
(Segment information)(1) Overview of the reportable segments
The Group provides its customers with industry-specific business applications through networks, maintenance service andsupplies, and various network services on the Industrial Platform mainly in the automotive aftermarket industry. The Groupdevelops business in a single-segment of an IT service business to the business fields of business application software, system
support, and network service.
(2) Segment income and results
Since the Group has only a single business segment, the statement is omitted.
(3) Revenue from major products and services
Revenue from major products and services is as follows.
Revenue by major product and service
FY2016(From Jan. 1 to Dec. 31, 2016)(Unit: Thousands of yen)
FY2017(From Jan. 1 to Dec. 31, 2017)

Business Application Software

10,893,660

11,737,167

System Support

1,243,245

1,263,728

Network Service

4,623,262

5,194,096

16,760,167

18,194,991

Total(4) Information on regions
The breakdown of revenue from external customers and non-current assets by region is as follows.
(i) Revenue from external customers
Since revenue from external customers in Japan makes up a substantial portion of revenue in the consolidated statement ofincome, the statement is omitted.
(ii) Non-current assets
Since the amount of non-current assets located in Japan makes up a substantial portion of non-current assets in the
consolidated statement of financial position, the statement is omitted.
(5) Information on major customers
Of revenue from external customers, those who account for 10% or more of revenue in the consolidated statement of income
are as follow.
Name of customer

FY2016(From Jan. 1 to Dec. 31, 2016)(Unit: Thousands of yen)
FY2017(From Jan. 1 to Dec. 31, 2017)

Ricoh Leasing Co., Ltd.

3,370,378

3,317,356

Sharp Finance Corporation

1,151,419

2,071,410- 14 -

(Profit per share)
Basic earnings per share and diluted earnings per share and the basis of their calculation are as follows.
FY2016FY2017(From Jan. 1 to Dec. 31, 2016) (From Jan. 1 to Dec. 31, 2017)
Profit attributable to owners of parent (thousand yen)

1,875,536

1,932,104––

Diluted profit attributable to owners of parent (thousand yen)

1,875,536

1,932,104

Average number of common shares during the period (shares)

47,520,749

44,285,469

20,351

24,25747,541,100

44,309,726

Basic earnings per share (yen)

39.47

43.63

Diluted earnings per share (yen)

39.45

43.60

Adjustment to profit (thousand yen)

Impact of dilutive common shares with dilutive effects
Warrants (shares)
Diluted average number of common shares during the period(shares)(Notes) 1. In the previous fiscal year and the fiscal year under review, warrants of stock options granted in 2014 (1,843
warrants in the previous fiscal year and 1,772 warrants in the fiscal year under view) are not included in thecalculation of diluted earnings per share because these warrants do not have dilutive effects.
2. The Company conducted a 2-for-1 common stock split effective December 17, 2016. Basic earnings per share anddiluted earnings per share are calculated on the assumption that the common stock split was conducted at the
beginning of the previous fiscal year.
(Significant subsequent events)
Stock split and the partial amendment of the Articles of Incorporation associated with the stock split
At the meeting of the Board of Directors held on February 14, 2018, the Company resolved to conduct a stock split andpartially amend the Articles of Incorporation associated with the stock split. Details are as follow.
1. Purpose of the stock split
The purpose of the stock split is to increase the liquidity of the Company’s shares and expand the investor base by reducing
the amount per investment unit.
2. Overview of the stock split(1) Method of split
The Company will split its shares at a rate of two shares for every one share of common stock owned by shareholders whoare stated or recorded in the shareholder registry with March 31, 2018 as the record date (substantively March 30 (Friday)).
(2) Number of shares to increase as a result of the stock split(i)
Total number of shares outstanding before the stock split

48,948,400 shares

(ii)
(iii)

48,948,400 shares
97,896,800 shares

Number of shares to increase as a result of the stock split
Total number of shares outstanding after the stock split(iv)
Total number of authorized shares after the stock split
320,000,000 shares* (i) through (iii) above are based on the total number of shares outstanding as of Wednesday, January 31, 2018 and couldchange as a result of the exercise of warrants.
(3) Change of the amount of capital
The amount of capital will not change due to the stock split on this occasion.
3. Schedule of the stock split (planned)(1) Public notice of the record date March 15, 2018
(2) Record date
March 31, 2018(3) Effective date

April 1, 2018

- 15 -

4. Adjustment to the exercise price of warrants
Associated with the stock split on this occasion, the Company will make an adjustment to the exercise price per share of
warrants on or after April 1, 2018 as follows.
Exercise price before
Exercise price after
Name of warrants
adjustment
adjustment
First series of warrants (resolved on March 24, 2010)

250 yen

125 yenThird series of warrants (resolved on April 30, 2014)

806 yen

403 yen

5. Partial amendment of the Articles of Incorporation associated with the stock split(1) Partial amendment of the Articles of Incorporation associated with the stock split
Associated with the stock split on this occasion, the Company will change the total number of authorized shares in Article 6of the Articles of Incorporation effective April 1, 2018 with the resolution of the Board of Directors pursuant to theprovisions of Article 184, Paragraph 2 of the Companies Act.
(2) Details of the amendment of the Articles of Incorporation(The amendment is underlined)
After amendment

Current Articles of Incorporation(Total Number of Authorized Shares)
Article 6: The total number of authorized shares of theCompany shall be 160,000,000 shares.

(Total Number of Authorized Shares)
Article 6: The total number of authorized shares of theCompany shall be 32,000,000 shares.
Supplementary provision
The amendment of Article 6 shall come into effect on
April 1, 2018. This supplementary provision shall bedeleted on the effective date.

(New)

6. Dividend forecast for the fiscal year ending December 31, 2018
The dividend forecast for the fiscal year ending December 31, 2018 is as stated in “3. Earnings Forecast for FY2018 (fromJanuary 1, 2018 to December 31, 2018)” and the attached material “1. Overview of Results of Operations, Etc., (3) Basic
policy on profit distribution and dividends for FY2017 and FY2018.”
7. Impact on profit per share, etc.
Profit per share, etc. on the assumption that the stock split was conducted at the beginning of the previous fiscal year is asfollow.
FY2016FY2017(From Jan. 1 to Dec. 31, 2016)(From Jan. 1 to Dec. 31, 2017)
Equity attributable to owners of parent per share(yen)

212.84222.90

Basic earnings per share (yen)

19.73

21.81

Diluted earnings per share (yen)

19.73

21.80

Purchase of treasury shares
At the meeting of the Board of Directors held on February 14, 2018, the Company resolved to purchase treasury shares andon its specific purchase method pursuant to the provisions of Article 156 of the Companies Act as applied by the reading ofterms pursuant to the provisions of Article 165, Paragraph 3 of the same Act.
1. Reason for purchasing treasury shares
The Company will purchase treasury shares for the purpose of executing a flexible capital policy and shareholder returns
according to changes in the business environment by improving the capital efficiency.
2. Details of resolution of the Board of Directors on the purchase of treasury shares(1) Class of shares to purchase
Common stock of the Company- 16 -

(2) Total number of shares to purchase1,000,000 shares (maximum) (ratio to the total number of shares outstanding (excluding treasury shares): 2.26%)(3) Total purchase price
1,005,000,000 yen (maximum)(4) Purchase method
Consignment of purchase via the Tokyo Stock Exchange Trading Network System for Off-floor Purchase of a Company’s
Treasury Shares (ToSTNeT-3)
3. Date of purchaseFebruary 15, 2018- 17 -