The following information was originally prepared and published by the Company in Japanese as it contains timely disclosure materials 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 original
Japanese version, please refer to the Japanese version.

Summary of Financial Statements for the First Nine Months of the
Fiscal Year Ending December 31, 2019 [IFRS] (Consolidated)
November 1, 2019
Broadleaf Co., Ltd.
Stock Listing: Tokyo Stock Exchange 1st Section
Representative: Kenji Oyama, Representative Director, President & CEO
Scheduled Starting Date for Dividend Payment:–
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 First Nine Months of the FY2019 (from January 1, 2019 to September 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

Q3 FY2019
Q3 FY2018% Millions of Yen

16,840 11.5
15,104 21.0

Basic earnings per share
Q3 FY2019
Q3 FY2018% Millions of Yen

3,558 31.5
2,706 48.8

% Millions of Yen

3,523 30.4
2,701 49.7

% Millions of Yen

2,319 32.9
1,745 50.7

% Millions of Yen

2,320 32.9
1,745 50.7%

2,224 29.5
1,717 43.7

Diluted earnings per share

Yen

Yen

26.55
19.94

26.21
19.80

(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 Q3
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%

28,937
29,41322,322
21,03322,32021,03377.1
71.5

End of Q3 FY2019

End 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

22,300

4.8

4,500

9.4

4,500

9.6

2,800

5.4

32.07

Revisions to the latest forecast of earnings: Yes- 1 -* Notes(1) Changes in significant subsidiaries during the nine months ended September 30, 2019 (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 “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)

Q3 FY201997,896,800

FY201897,896,800

2. Number of shares of treasury stock

Q3 FY201910,473,263

FY2018

10,588,336

3. Average number of shares outstanding
87,369,228
87,541,102
Q3 FY2019
Q3 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 ninemonths of the 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 Friday, November 1, 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 Nine Months Ended September 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 Nine Months Ended September 30, 2019(1) Qualitative information on financial results
In the first nine months of the fiscal year under review (January 1 through September 30, 2019), the Japanese economy was ona moderate recovery trend, attributable to improvements in the employment and income environment. However, the economic
conditions in Japan and abroad remain uncertain due to the effects of the higher consumption tax, anxieties about the future of
the Chinese economy associated with the trade friction between the US and China, and Brexit.
In the information service segment, to which the Company belongs, corporate investments continue to be diversified in strategicareas, such as digital marketing and big data analysis, and in IT systems with an eye on improving productivity on the back of
the promotion of workstyle reform.
In this situation, the Group made “acceleration from a package vendor to platformer” a medium-/long-term management policy.
In the first nine months of the fiscal year under review, the Group moved forward with the development of the next generationof business applications, etc. to enhance services that run on the digital business platform, the Broadleaf Cloud Platform. In
February 2019, the Company concluded a strategic partnership with Kaizen Global Enterprises, which provides consulting
services in more than 60 countries worldwide. In September 2019, it started to provide Kaizen Institute and its group companies
with an OEM version of the work analysis/optimization software OTRS, as part of initiatives for strengthening the Company’ssales channel overseas.
As a result, in the first nine months of the fiscal year under review (January 1 through September 30, 2019), the Company posted
revenue of 16,840 million yen (up 11.5% year on year), operating profit of 3,558 million yen (up 31.5% year on year), profit
before tax of 3,523 million yen (up 30.4% year on year) and profit attributable to owners of parent of 2,320 million yen (up32.9% 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)First Nine Months, FY2018(From January 1 to
September 30, 2018)

First Nine Months, FY2019(From January 1 to
September 30, 2019)Year-on-year rate of change

Platforms

6,879

7,579

10.2％

Applications

8,225

9,261

12.6％

15,104

16,840

11.5％

DomainTotal(Note) From the first nine months 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 growthstrategies. The figures for the first nine months of the previous fiscal year are also indicated based on this newclassification.
(2) Qualitative information on financial position(i) Analysis of financial position(Assets)
Assets at the end of the third quarter of the consolidated fiscal year under review decreased 475 million yen from the end of theprevious consolidated fiscal year, to 28,937 million yen. Current assets fell 3,319 million yen, to 7,299 million yen, and noncurrent assets increased 2,844 million yen, to 21,638 million yen. The decrease in current assets was mainly attributable todecreases in cash and cash equivalents of 3,699 million yen. The main factor contributing to the increase in non-current assets
was 1,599 million yen in additional intangible assets.
(Liabilities)
Liabilities at the end of the third quarter of the consolidated fiscal year under review declined 1,764 million yen from the end of
the previous consolidated fiscal year, to 6,615 million yen. Current liabilities fell 1,924 million yen, to 5,989 million yen, andnon-current liabilities increased by 159 million yen, to 626 million yen. The main factors contributing to the decrease in current
liabilities were reductions in income taxes payable of 666 million yen and in other current liabilities of 681 million yen,respectively. The increase in non-current liabilities was mainly due to an increase in long-term interest-bearing debt of 188
million yen.

- 4 -(Equity)
Equity at the end of the third quarter of the consolidated fiscal year under review increased 1,289 million yen from the end of
the previous consolidated fiscal year, to 22,322 million yen. The increase was chiefly attributable to an increase in retained
earnings of 1,394 million yen.
(ii) Analysis of cash flows
Cash and cash equivalents (“cash”) at the end of the third quarter of the consolidated fiscal year under review declined 3,699
million yen from the end of the previous consolidated fiscal year, to 1,928 million yen.
The following is a description of the situation and major factors of each category of cash flows in the nine months ended
September 30, 2019.
(Net cash from operating activities)
Net cash provided by operating activities stood at 1,376 million yen, mainly reflecting increases in income taxes paid of 1,945
million yen, which partially offset the posting of profit before tax of 3,523 million yen, and depreciation and amortization
expenses of 1,388 million yen.
(Net cash from investing activities)
Net cash used in investing activities came to 2,961 million yen, mainly due to the acquisition of intangible assets of 2,255 million
yen.
(Net cash from financing activities)
Net cash used in financing activities came to 2,112 million yen, chiefly attributable to cash dividends paid of 1,136 million yen,
and repayments of lease obligations of 662 million yen.
(3) Qualitative information on consolidated earnings forecast
In view of recent trends in performance, the consolidated financial forecast announced on February 14, 2019 has been revised.
For more details, please refer to the “Notice Concerning Revision of Consolidated Earnings Forecasts” dated November 1, 2019.
.

- 5 -

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

Q3 FY2019(As of September 30, 2019)

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

1,928,027
4,860,102
185,236–
326,039
7,299,404

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

1,128,168
11,802,502
6,231,794
27,426
1,852,046
106,117489,937
21,637,989
28,937,393

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

3,310,523
1,196,716
515,034
338,805
92,861
535,273
5,989,212

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

272,935
195,123
134,863
22,829625,751
6,614,963

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
7,200,371-3,458,288
11,153,433
276,20722,319,627
2,804
22,322,431
28,937,393

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)First Nine Months, FY2018(From January 1, 2018
to September 30, 2018)

First Nine Months, FY2019(From January 1, 2019
to September 30, 2019)

Revenue
Cost of sales
Gross profit
Selling, general and administrative expenses
Other operating income
Other operating expense
Operating profit
Finance income
Finance costs
Equity in loss of affiliates
Profit before tax
Income tax
Profit15,103,511-3,801,838
11,301,673-8,617,718
39,537-17,787
2,705,705
9,957-7,784-6,5812,701,297-955,871
1,745,426

16,840,304-4,657,858
12,182,446-8,671,108
53,497-7,1533,557,681
8,012-33,428-8,991
3,523,275-1,203,880
2,319,394

Profit attributable to:
Owners of parent
Non-controlling interests
Profit

1,745,426–
1,745,426

2,319,540-145
2,319,394

19.94
19.80

26.55
26.21

Earnings per share
Basic earnings per share (yen)Diluted earnings per share (yen)- 7 -(3) Summary consolidated statement of comprehensive income(Unit: Thousands of Yen)First Nine Months, FY2018(From January 1, 2018
to September 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 -First Nine Months, FY2019(From January 1, 2019
to September 30, 2019)

1,745,426

2,319,394-22,058-97,286

8,603–-13,455-97,286-11,573

1,459-3,089389-14,662

1,848-28,117-95,438

1,717,309

2,223,956

1,717,309–
1,717,309

2,224,102-145
2,223,956

(4) Summary consolidated statement of changes in equity
First Nine Months, FY2018 (From January 1, 2018 to September 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

–––1,745,426––

Other comprehensive income

–

–

–

–

–

-14,662

Total comprehensive income

–

–

–

1,745,426–-14,662

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

–

–

–

Disposal of treasury shares–

64,993239,830–-8,829–Dividends–––-967,192––

Share-based paymenttransactions

–

–

–

–

123,454–

Reclassification from othercomponents of equity toretained earnings

–

–

–

8,603

–

–

Total transactions with owners–

64,993-765,773-958,589

114,625–

7,147,905

7,181,262-3,501,927

8,848,915

280,491-50,727

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

Balance as of September 30,
2018

Warrants(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
1,745,426–––

1,745,426-22,058

8,603-28,117-28,117-28,117

Total comprehensive income-22,058

8,603-28,117

1,717,309

1,717,309

Purchase of treasury shares

–

–

–

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

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

295,994

Dividends–––-967,192-967,192

Share-based paymenttransactions––

123,454

123,454

123,454

Reclassification from othercomponents of equity toretained earnings–-8,603-8,603––

Total transactions with owners–-8,603106,022-1,553,347-1,553,347

48,197–

277,961

19,954,115

19,954,115

ProfitOther comprehensive income

Balance as of September 30,
2018

- 9 -

First Nine Months, FY2019 (From January 1, 2019 to September 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

7,180,289-3,500,454

9,759,561

363,850

–

–

–

–

38,969––7,147,905

7,180,289-3,500,454

9,798,530

363,850–

Profit–––2,319,540––

Other comprehensive income

–

–

–

–

–

–

Total comprehensive income

–

–

–

2,319,540––

Acquisition of subsidiaries

–

–

–

–

–

–

Disposal of treasury shares–-1,936

6,174–-5,610–

Dividends–––-1,135,758––

Share-based paymenttransactions–

22,01835,993–130,252-28,000

Reclassification from othercomponents of equity toretained earnings

–

–

–

171,121––

Total transactions with owners–

20,082

42,167-964,637

124,642-28,000

7,147,905

7,200,371-3,458,288

11,153,433

488,492-28,000

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

Balance as of September 30,
2019

Warrants(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
2,319,394

Non-controllinginterests

Total

Total

Total equity

–

–

–

2,319,540

-145

1,848

-97,286-95,438-95,438–-95,438

Total comprehensive income

1,848-97,286-95,438

2,224,102-145

2,223,956

Acquisition of subsidiaries

–

–

–

–

2,949

2,949

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

Dividends–––-1,135,758–-1,135,758

Share-based paymenttransactions––

102,252

160,263–

160,263

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

Total transactions with owners–-171,121-74,479-976,868

2,949-973,919-47,261-137,024

276,20722,319,627

2,804

22,322,431

ProfitOther comprehensive income

Balance as of September 30,
2019- 10 -

(5) Summary consolidated statement of cash flow
(Unit: Thousands of Yen)First Nine Months, FY2018 First Nine Months, FY2019(From January 1, 2018
(From January 1, 2019
to September 30, 2018)
to September 30, 2019)
Cash flows from operating activities
Profit before tax
Depreciation and amortization expense
Share-based payment expenses
Finance costs (income)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 provided by (used in) operating activities
Cash flows from investing activities
Acquisition of property, plant and equipment
Acquisition of intangible assets
Acquisition of investments
Proceeds from sales and redemption of investments
Purchase of investments in subsidiaries resulting inchange in scope of consolidation
Loan advances
Collection of loans receivable
Payments for lease and guarantee deposits
Proceeds from collection of lease and guarantee deposits
Other, net
Cash flows provided by (used in) investing activities
Cash flows from financing activities
Repayments of long-term loans payable
Repayments of lease obligations (during the first ninemonths of the previous consolidated fiscal year)
Cash dividends paid
Purchase of treasury shares
Proceeds from sales of treasury shares
Other, net
Cash flows provided by (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 -

2,701,297
573,480
123,454-2,173
6,581
335,416-57,241-261,869
195,113-23,385-359,710-552
110,614
3,341,026
387
1,597-3,421-1,207,824
2,131,765

3,523,275
1,388,112
158,252
25,416
8,991-419,177
54,744-296,923-206,018-411,501-420,076-66,706-12,537
3,325,851
77
1,646-6,912-1,945,125
1,375,536-68,199-1,442,367––-41,548-2,255,345-1,048,346
745,500–-64,215-1,637
1,855-30,102
25,224
24,741-1,490,486-301,300
1,939-15,754
7,197
10,715-2,961,157-497,350-316,000-43,590-661,607-967,192-1,005,603
297,157-17,403-2,233,981-1,135,758–
4,238-3,247-2,112,374-4,791-702-1,597,493
5,970,318-3,698,697
5,626,723

4,372,825

1,928,027

(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 nine 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 ina contract, and the judgment under IAS 17 Leases (hereinafter, “IAS 17”) and IFRIC 4 “Judgment on whether a lease is included
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 theunsettled portion of the total lease payment on the start date of the lease. If calculation of the interest rate of the lease is difficult,the Group’s additional borrowing interest rate is used, and the Group generally uses the additional borrowing interest rate as thediscount 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 averageof 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 is adjusted
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 the lease
period.

-A replacement for impairment loss review is based on the evaluation of the disadvantages of applying IAS 37 “Non-current
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 nine months 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 611,887
thousand yen, while cash flows from operating activities increased by the same amount during the first nine months of the- 12 -

consolidated 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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