Summary of Financial Statements for the Fiscal Year Ended December 31, 2016
[Japanese GAAP] (Non-consolidated)
February 14, 2017
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 28, 2017
Scheduled Starting Date for Dividend Payment:
March 29, 2017
Scheduled Submission Date for Securities Report:
March 29, 2017
Earnings Supplementary Explanatory Documents:
Yes
Earnings Results Briefing:
Yes (For institutional investors and analysts)(Amounts are rounded down to the nearest million yen.)

1. Financial Results for FY 2016 (from January 1, 2016 to December 31, 2016)(1) Results of Operations(Percentages below represent increases (decreases) from the previous year.)
Net Sales
Operating Income
Ordinary Income
Net Income
Millions of Yen%

Millions of Yen%

Millions of Yen%

Millions of Yen%

16,851
16,824

0.2
-11.0

2,227
2,514

-11.4
-39.6

2,230
2,493

-10.5
-39.2

1,142
1,251

-8.7
-42.9

FY2016FY2015

Diluted Earnings
Per Share

Earnings Per ShareFY2016FY2015

Ordinary Income toTotal Assets

Return on Equity

Operating Income to
Net Sales

Yen

Yen

%

%

%

24.05
25.24

24.04
25.22

6.1
6.2

9.0
9.2

13.2
14.9

FY2016: ‒ million yen
FY2015: ‒ million yen(Reference) Share of (Profit) Loss of Entities Accounted for Using Equity Method(Note) The Company conducted a 2-for-1 common stock split effective December 17, 2016. The earnings per share and the diluted earnings per share are calculatedon the assumption that the said stock split was implemented at the beginning of the previous fiscal year.

(2) Financial Position
Total Assets

Net Assets Per Share

Millions of Yen%

Yen

24,07925,565

17,913
19,38574.4
75.7

397.83399.87

End of FY2016
End of FY2015(Reference) Shareholders’ Equity(Note)

Shareholders’ Equity Ratio

Net Assets

Millions of Yen

End of FY2016: 17,906 million Yen

End of FY2015: 19,356 million Yen

The Company conducted a 2-for-1 common stock split effective December 17, 2016. The net assets per share are calculated on the assumption that thesaid stock split was implemented at the beginning of the previous fiscal year.

(3) Cash Flow Status
Operating Activities

Investing Activities

Financing Activities

Cash and Cash Equivalents
at End of Period

Millions of Yen

Millions of Yen

Millions of Yen

Millions of Yen

3,201
655

-656
-1,088-3,317-1,854

7,611
8,384

FY2016FY2015
2. Dividends

Dividends Per Share
End of Q1

End of Q2

Yen

End of Q3

Yen

Year-end

Yen

Total
Yen

Total
Dividends(Annual)Dividend
Payout Ratio

Ratio of
Dividends to
Net Assets%%

Yen Millions of Yen

FY2015
‒
12.50
‒
12.50
25.00
616
49.5
3.1
FY2016
‒
17.50
‒
12.50
30.00
1,011
88.4
5.3
FY2017 (Forecast)
‒
11.00
‒
11.00
22.00
79.2
(Notes)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.
2. Breakdown of dividends for the end of Q2 FY2016: Ordinary dividend 12.50 yen
Commemorative dividend 5.00 yen

3. Earnings Forecast for FY2017 (from January 1, 2017 to December 31, 2017)(Percentages below represent increases (decreases) from the previous fiscal year.)

Net Sales
1st Half of FY2017
FY2017(Note)

Profit Before
Income Taxes

Operating Income

Profit Attributable to
Owners of Parent Company

Basic Earnings
Per Share

Millions of Yen%

Millions of Yen%

Millions of Yen%

Millions of Yen

%

Yen

8,100
17,000

‒

600
2,000

‒

600
1,960

‒

390
1,230

‒

8.81
27.79

‒
‒
‒
‒
The Company voluntary adopts the International Financial Reporting Standards (IFRS) for its securities reports from the fiscal year ending December 31,
2017, and the earnings forecast above is based on the IFRS. As a result, no percentage changes from the results in FY2016 are stated.

* Notes(1) Changes in accounting policies, changes in accounting estimates and restatements of corrections
1. Changes in accounting policies in association with the revision of accounting standards: No
2. Other changes in accounting policies: No
3. Changes in accounting estimates: No
4. Restatements of corrections: No(2) Number of shares outstanding (common stock)
1. Number of shares outstanding(including treasury stock)
2. Number of shares of treasury stock

FY201648,948,400

FY201550,468,400

FY2016

3,939,268

FY20152,061,768

3. Average number of shares outstanding
47,520,749
49,603,693
FY2016FY2015(during the period)(Note) The Company conducted a 2-for-1 stock split effective December 17, 2016. The number of shares outstanding (common
stock) is calculated on the assumption that the said stock split was implemented at the beginning of the previous fiscal
year.
* Indication of audit procedure implementation status
This earnings report is not subject to audit procedures based on the Financial Instruments and Exchange Act. Accordingly, at the time ofthe disclosure of the financial results, the audit procedures based on the Financial Instruments and Exchange Act have not been completed.
* 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 analysts on Wednesday, February 15, 2017.
A video of the briefing and a document to be used in the briefing will be posted on the website as soon as possible after the briefing.

○ Table of Contents of Attached Material
1. Analysis of Results of Operations and Financial Position ·············································································(1) Qualitative information on financial results ·························································································(2) Qualitative information on financial position ·······················································································(3) Basic policy on profit distribution and dividends for FY2016 and FY2017 ····················································(4) Business risk ·····························································································································
2. Status of the Corporate Group ·············································································································
3. Management Policy ·························································································································(1) Basic policy on corporate management ······························································································(2) Target indicators ························································································································(3) Medium- to long-term management strategies ······················································································(4) Challenges to be addressed ············································································································(5) Other significant management items ·································································································
4. Basic Policy in the Selection of Accounting Standards ················································································
5. Financial Statements ························································································································(1) Balance sheet ····························································································································(2) Statement of income ····················································································································(3) Statement of changes in equity ········································································································(4) Statement of cash flow ·················································································································(5) Notes to financial statements ··········································································································(Notes on going concern assumption) ······························································································(Significant accounting policy) ·····································································································(Change in presentation) ·············································································································(Notes to balance sheet) ··············································································································(Notes to statement of income) ······································································································(Notes to statement of changes in equity) ·························································································(Notes to statement of cash flow) ···································································································(Share of profit or loss of entities accounted for using equity method) ························································(Segment information etc.) ··········································································································(Per-share information) ···············································································································(Significant subsequent events) ·····································································································

1

2
2
3
4
4
6
9
9
9
9
9
10
11
12
12
14
15
17
19
19
19
20
21
21
22
25
25
25
26
27

1. Analysis of Results of Operations and Financial Position(1) Qualitative information on financial results(i) Results of operations in the fiscal year ended December 31, 2016
In the fiscal year under review (from January 1, 2016 to December 31, 2016), the outlook for the Japanese economy remained
uncertain due to factors such as the turbulence of the situation in the Middle East, concerns regarding a slump in production andexports in China and other emerging economies in Asia, and the effects of Brexit and uncertainty over the policies of the new
U.S. administration, although there is evidence of an improvement in corporate earnings and employment thanks to the economic
and monetary policies of the government and the Bank of Japan.
In the information service industry, to which the Company belongs, IT investments by companies remained firm, particularly
those in manufacturing in addition the financial and public service sectors, but a cautious view on the economy was observed invarious industries because of the economic uncertainty. Overall, the business climate remained generally solid because IT
investments were expected to increase mainly in strategic areas such as big data, IoT, cloud, and security.
In this business environment, the Company is enhancing its measures to increase the number of customers of its applications,such as the .NS Series and CarpodTab, a tablet-type business support tool, and working for the industry standardization of BL
Parts Order System, an electronic order service for auto parts, with the aim of expanding the customer base and changing therevenue structure. The Company is also promoting efforts to provide higher value-added services for customers by successively
renovating the industry-specific applications the Company offers to customers, strengthening and enhancing automobile-related
database, introducing an EC site for auto repair parts into the market, and developing automobile-related data analytical services.
As a result, in the fiscal year under review, net sales rose 0.2% year on year, to 16,851 million yen, operating income declined
11.4% year on year, to 2,227 million yen, and ordinary income fell 10.5% year on year, to 2,230 million yen. Net income stood
at 1,142 million yen (down 8.7% 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)
FY2015FY2016Year-on-year rate
Domain(From Jan. 1 to(From Jan. 1 toof change
Dec. 31, 2015)
Dec. 31, 2016)
Business Application
Software11,316

10,988-2.9%

System Support

1,266

1,239

-2.1%

Network Service

4,242

4,623

9.0%

Total

16,824

16,851

0.2%(ii) Outlook for the fiscal year ending December 31, 2017
In the automotive aftermarket industry, to which major customers of the Company belong, the business environment is changing
dramatically, with the diversification of car owners’ needs and the entry of entities from outside the industry. Consequently, theCompany must work with its customers to promptly implement strategies that better reflect the views of car owners.
In this environment, the Company will seek to develop new services utilizing large-scale automobile-related information, andwill 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 Company also plans to leverage its knowledge of thespecialist business 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 Company aims to further increase the earnings of the Network Service domain and gain new
customers.
The Company will adopt the IFRS from the fiscal year ending December 31, 2017.
As a result of the above initiatives, in the fiscal year ending December 31, 2017, the Company forecasts consolidated net salesof 17,000 million yen, consolidated operating income of 2,000 million yen, a consolidated profit before income taxes of 1,960
million yen, and a consolidated profit attributable to owners of the parent company of 1,230 million yen.

2(2) Qualitative information on financial position(i) Assets, liabilities, and net assets
Total assets at the end of the fiscal year under review declined 1,486 million yen from the end of the previous fiscal year, to
24,079 million yen (down 5.8% year on year). Current assets fell 624 million yen, to 12,408 million yen (down 4.8%), and noncurrent assets decreased 861 million yen, to 11,670 million yen (down 6.9%). The decrease in current assets was mainly
attributable to a decline in cash and deposits of 772 million yen. The main factor of the decline in non-current assets was a declineof 777 million yen in intangible assets, chiefly due to the amortization of goodwill, which was partially offset by an increase ininvestment securities of 118 million yen.
Liabilities fell by 14 million yen from the end of the previous fiscal year, to 6,165 million yen (down 0.2% year on year). Current
liabilities rose 622 million yen, to 4,960 million yen (up 14.3%). Non-current liabilities were reduced by 636 million yen, to
1,205 million yen (down 34.5%). The main factor of the increase in current liabilities was an increase of 577 million yen inincome taxes payable. The reduction in non-current liabilities was mainly attributable to a decrease in long-term loans payableof 661 million yen.
Net assets slipped 1,472 million yen from the end of the previous fiscal year, to 17,913 million yen (down 7.6% year on year).
The decrease was chiefly attributable to an increase of 1,945 million yen in treasury stock as a result of the repurchase of shareson the open market under a resolution of the Board of Directors and the acquisition of treasury stock based on trust contracts fora board benefit trust (BBT) and an employee stock ownership plan (J-ESOP) and decreases in retained earnings and treasury
stock of 961 million yen, each due to the cancellation of treasury stock.
As a result, the shareholders’ equity ratio fell 1.3 percentage points, from 75.7% at the end of the previous fiscal year to 74.4%.
(ii) Cash flows
Cash and cash equivalents (“cash”) at the end of the fiscal year under review declined 772 million yen from the end of theprevious fiscal year, to 7,611 million yen. Net cash provided by operating activities stood at 3,201 million yen. Net cash used ininvesting activities came to 656 million yen. Net cash used in financing activities was 3,317 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.
(Net cash provided by (used in) operating activities)
Net cash provided by operating activities stood at 3,201 million yen (up 388.1% year on year), reflecting profit before income
taxes of 2,258 million yen, amortization of goodwill of 668 million yen, and depreciation of 660 million, which were partially
offset by income taxes paid of 589 million yen.
(Net cash provided by (used in) investing activities)
Net cash used in investing activities came to 656 million yen (down 39.7% year on year), mainly due to the purchase of intangible
assets of 473 million yen.
(Net cash provided by (used in) financing activities)
Net cash used in financing activities was 3,317 million yen (up 78.9% year on year), chiefly attributable to the purchase oftreasury shares of 1,946 million yen, cash dividends paid of 728 million yen, and repayments of long-term loans payable of 661
million yen.

3

(For reference) Trends in cash flow-related data
FY2014FY2015FY2016

Shareholders’ equity ratio (%)

75.0

75.7

74.4

Market value-based equity ratio (%)

156.3

113.0

118.1

0.2

3.6

0.5

304.8

69.3

310.0

Interest-bearing debt to cash flows (years)
Interest coverage ratio (times)

Equity ratio: Shareholders’ equity/Total assets
Market value--based equity ratio: 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 balance sheet.
(3) Basic policy on profit distribution and dividends for FY2016 and FY2017
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 stabledividends. 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 the annual
shareholders’ meeting. The Articles of Incorporation stipulate that by a resolution of the Board of Directors, the Company 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.
Although the Company conducted a 2-for-1 stock split effective December 17, 2016, there will be no adjustment of the year-end
dividend per share associated with the stock split, and the year-end dividend per share will be 12.5 yen. Combined with theinterim dividend of 17.5 yen (an ordinary dividend of 12.5 yen and a commemorative dividend of 5.0 yen), the annual dividend
per share will be 30.0 yen.
The Company forecasts that the dividend per share for the next fiscal year will be 22.0 yen (an interim dividend of 11 yen and a
year-end dividend of 11 yen).
(4) Business risks
The following is a description of major business risks that may affect the Group’s operating results and financial position. The
Company is aware of the possibility of the occurrence of risk events and strives to prevent the occurrence as far as possible. If
risk events do occur, the Company will take steps to minimize their effects. The risks described below are identified by theCompany as of the end of the fiscal year under review.
(i) Changes in the market environment and laws and regulations
The Company’s main business is providing industry-specific applications in the automotive aftermarket industry. The Company’s
results may thus be affected by the competitive environment, trends in investment in systems, and laws and regulations. The
Company is working to expand its business domains. However, the entry of new competitors in the automotive aftermarket
industry and revisions to automobile-related laws and regulations, including the car inspection system, could adversely affect theCompany’s operating results and financial position.
(ii) Response to technological innovation
To provide competitive products and services in response to the needs of customers and the market, the Company works to gather
information on new technologies and focuses on research and development under its medium-term policies on productdevelopment. The Company also endeavors to launch at the right timing new products that are expected to drive its growth.
However, failure to develop new products at the right timing, leading to delayed launches of products onto the market, chiefly
due to the faster-than-expected emergence of technological innovations, alternative technologies, and competing products andchanges in technology standards and technology platforms on which product development depends, could adversely affect theCompany’s operating results and financial position.
(iii) Network failure
A large part of the Company’s product development and operations depend on computer systems and their networks.
The
Company thus takes steps to ensure their safety and takes out computer liability insurance in case of unexpected problems.
However, the failure of the Company’s systems etc. to operate properly due to natural disasters, including earthquakes and fires,
infection by computer viruses, system trouble caused by cyberterrorism, and failure of network infrastructure, including publiclines, among other problems, could have direct adverse effects on the Company’s operations, among other significant
repercussions, including degradation in the services provided by the Company, and this in turn could adversely affect theCompany’s operating results and financial position.
(iv) Failures in products
In the development and construction of systems in the Company’s operations, failures (malfunctions and bugs) may be found in4

systems after they are inspected by customers. The Company has taken steps to perfect its development processes and will
endeavor to prevent failures by controlling product quality thoroughly from system development to delivery, while taking
measures such as system testing. However, damage to customers resulting from the Company’s fault and products’ functions
recognized as inadequate could lead to liability for damage and damage to the Company’s reputation, which in turn could
adversely affect the Company’s operating results and financial position.
(v) Leakage of confidential information and personal information and information control
The Company handles classified information, know-how, customer information, and personal information in its productdevelopment and business operations. Thus the Company endeavors to prevent the leaking of confidential information throughunauthorized access to confidential information by way of networks and the taking out of data chiefly by enhancing confidential
information control and employment training and making full use of software for preventing information leaks. However, there
is still some possibility of information leaks resulting from unauthorized access to the Company’s computers from the outside,
errors of officers and employees of the Company, and other unforeseen circumstances. Any information leakage could cause
operating losses, losses from the suspension of business, and a significant adverse impact on the Company’s social credibility,
which in turn could have adverse effects on the Company’s operating results and financial position, including expenses for
dealing with the situation.
(vi) Protection of intellectual property and infringement of intellectual property rights
The Company develops systems and protects intellectual property, applying for trademark registration and patents, for facilitating
business operations. However, the scope of intellectual property rights related to systems and software is not generally clear, andthe intellectual property rights of the Company may not be protected adequately. An infringement of the Company’s intellectual
property rights could have adverse effects on the Company’s business operations.
The Company has experts investigate any infringements of intellectual property rights of third parties by the Company to prevent
the Company from violating any intellectual property rights. The Company has not been sued by any third parties for violating
intellectual property rights or has not been notified of any lawsuits. Under the current patent system, however, there are limits
to investigations, and it is difficult to maintain strict investigations. If any third parties that are not recognized by the Company
have already obtained, or will obtain, intellectual property rights to technologies and know-how, etc. that the Company uses in
its business operations, they could file for suspension of the use of technologies etc. or for damages or could demand royalties
on the intellectual property rights, which in turn could adversely affect the Company’s operating results and financial position.
(vii) Acquisition and cultivation of human resources
The Company believes that it needs to secure highly skilled engineers and sales staff that will provide consulting for customers
in order to expand its business domains. The Company thus acquires excellent human resources through recruiting activities andactively provides education to help employees improve their skills.
However, failure to acquire and cultivate appropriate human resources as planned and an outflow of human resources from theCompany to the outside against a backdrop of the high mobility of human resources and the high pace of technological innovationin the information and communications industry could adversely affect the Company’s operating results and financial position.
(viii) Litigation risk
In the execution of business, the Company works to comply with applicable laws and regulations and to have its employees
understand and pursue compliance. However, there is a possibility of lawsuits being filed against the Company in Japan andoverseas, and lawsuits could have an adverse impact on the Company’s operating results and financial position.
(ix) Overseas operations
The Group is running business in China and the Philippines. Failure to deal with problems and risks in those regions, including
unexpected economic fluctuations, the status of development of information infrastructure, lack of protection of intellectual
property, uncertain international affairs, and changes in laws and regulations and the tax system, could adversely affect theCompany’s operating results and financial position52. Status of the Corporate GroupThe Group consists of the Company, three non-consolidated subsidiaries, and an affiliate.
The Company provides industry-specific business applications through networks, maintenance service and supplies, and network
services on the Industrial Platform mainly in the automotive aftermarket industry. This business is classified into three fields: Business
Application Software, system support, and network service. The Company is a single-segment company having only an IT service
business segment, the relevant information is categorized under the three fields above.
Field

ServiceBusiness Application
Software- Development and sales of industry-specific business applications- Development and sales of work analysis and optimization software- Purchases and sales of PC bodies and printers, etc.

System support- Providing maintenance service for customers that the Company’s system was sold
- Purchases and sales of ledger sheets, OA supplies, etc.

Network service- Providing databases to customers that the Company’s system was sold
- Providing servers for customers that the Company’s system was sold
- Payment/settlement agency service for recycled auto parts- Providing an electric order placing/receiving function for auto parts- Providing tablet-type business support tools- e-commerce, data analytical services, etc.

(1) Business Application Software
The Company provides business applications that help with business creation for businesses in the automotive aftermarket industry,
travel agencies, mobile phone distributors, and machinery tools businesses. The Company’s industry-specific business applications havegeneral-purpose functions, including estimating and billing management, in accordance with industry-specific flows of operations. When
the Company sells personal computers having business applications to customers, it also sells hardware, including liquid-crystal displays,tablets, printers, and peripheral equipment. The Company also engages in commissioned system development in response to customer
needs.
Under many Business Application Software contracts, the Company sells the right to use an application to a leasing company, whichleases the applications to customers mostly for six years.
The Company also provides work analysis and optimization software that facilitates improvement activities at maintenance shops andat manufacturing plants. The Company’s work analysis software employs IE (Industrial Engineering) and has a function of promoting
improvements at production sites. Though the video and time analysis of the movements of people, goods, and machines at production
sites, the software visualizes unreasonableness, waste, and irregularity and helps expedite operations, save labor, and reduce costs. In
addition to work sites, work analysis is used in a wide range of fields, including the transmission of artistry in traditional arts, theeducation of nursing care staff, and the sharing of best practices in the service industry.
(2) System support
The Company has established a support system to deal with troubles of networks, hardware, and servers promptly and has dedicatedstaff members at its customer help desk that operates 365 days a year and 33 bases nationwide. The Company provides a businessapplications maintenance service and hardware maintenance service for customers to whom the Company’s system were sold. The
Company also sells supplies, including ledger sheets, used in business applications.

6(3) Network service
The main services in the network service field are incidental services to customers that have bought network-type, industry-specificbusiness applications. Those services include services indispensable for the use of business applications, including the provision of
databases and servers, payment/settlement agency service in the distribution of recycled parts in the automotive aftermarket industry,
and the provision of electric order placing/receiving function for auto parts between businesses.
The table below describes the main services. The considerations are mainly fixed monthly fees and volume charges.
Service
Providing databases

Providing servers

Payment/settlement
agency service forrecycled parts

Main customer

Description of service
The Company regularly obtains and brings together information on vehicles to belaunched and information on auto parts updated daily and provides most recent
databases under agreements with customers that the Company’s systems were sold.
The consideration is fixed monthly fees.

Maintenance shop,
bodywork shop,
parts dealer,recycling business, used The network-type system is a system based on the use of the Company’s server, andcar dealer, etc.
the Company receives fixed monthly fees as the consideration of server
maintenance.
recycling business,parts dealer, etc.

The Company operates Parts Station NET, a recycled parts distribution network
where information on the inventory of recycled parts is shared over the Internet
between sellers, including recycling businesses, and buyers, including parts dealers.
The Company processes payments and settlements for transactions of recycled parts
on behalf of customers and receives fixed-rate fees.

The Company provides the BL Parts Order System, which connects the systems ofProviding a function of Maintenance shop,
buyers of parts, including maintenance shops and bodywork shops, and systems ofelectric order
bodywork shop,
sellers of parts, including parts dealers and recycling businesses, and enables users
placing/receiving for parts dealer,
to inquire about new parts and recycled parts and place or receive orders directly
auto parts
recycling business, etc.
and seamlessly. The Company receives fixed monthly fees or volume charges.
Maintenance shop,
Providing tablet-typebodywork shop,
business support tools
parts dealer

The Company provides CarpodTab, which has a business application that helps
businesses make proposals to car owners using tablets. The application enables
businesses to refer to maintenance history, propose the most appropriate automobile
safety inspections, and give easy-to-understand explanations using images andvideos. The Company receives fixed monthly fees.

e-commerce

Maintenance shop,
car owners, etc.

The Company operates and manages an EC site for auto repair parts, using its parts
database and vehicles database. The site enables users to search for auto repair parts
from among repair parts that parts dealers nationwide place on the site and buy
repair parts on the Internet. The Company receives fees in accordance withtransactions of parts.

Database analyticalservices

Maintenance shop,
bodywork shop,
parts dealer

The Company provides services using the vast amount of automotive data that theCompany has gathered from its strong customer base. The Company gathers,
analyzes, processes, and provides data in response to requests from customers andreceives fixed monthly fees, volume charges, or lump-sum payments at the time ofcontract.

7

[Relations between the Company’s business and customers]
The chart below shows relations between the Company’s business and customers
End users(Car owners)

Customers

Revenue from charges

Payment/settlement agency service for recycled parts(iii) Network service
Providing databases

Sales (providing products and services)
Payment/settlement agency service, etc.

The Company (Broadleaf Co., Ltd.)

Providing servers
BL Parts Order System
CarpodTab
e-commerce
Data analytical services
Other services(ii)System support
Business application maintenance service
Hardware maintenance service
Sales of supplies(i) Business Application Software
Sales of business applications
Sales of hardware
Work analysis software
Other products

8

Payment collection

Sales(providing
products)

Payment
collection

Sales (providing products andmaintenance service)

Payment
collection
Leasing(providing
products)

Sales (providing products)

Payment collection

LeasingCompany
Agency3. Management Policy(1) Basic policy on corporate management
Broadleaf will contribute to the development of industry and to society, cherishing people’s hearts, which is indispensable for creatingstrong links between people and companies, while helping customers under its corporate philosophy “gratitude and joy.” The Company’s
core vision is “Consider, Connect, Expand, Field for Our Future.” The Company aims to achieve growth over the medium to long terms
and enhance its corporate value, growing with customers, by engaging in business that will contribute to customers’ business creation.
(2) Target indicators
The Company aims to enhance corporate value through the effective use of shareholders’ equity. Among its management indicators, theCompany emphasizes return on equity (ROE). The Company will work to enhance ROE by pursuing priority strategies.
(3) Medium- to long-term management strategies
The external environment surrounding the automotive aftermarket has seen significant changes in recent years, including thediversification of the needs and lifestyles of car owners, intensifying competition among the Company’s customers, and the entry ofmajor IT companies into the auto industry in association with the development of information technology. To respond to those changes
quickly and flexibly, the Company believes that strategies from the perspective of car owners, the end users of its services, are required.
The Company will consistently provide new services with its customers to car owners and will expand its industrial platform. Aiming
to evolve into a company that will create innovative business leveraging advanced technologies, the Company will expand into businessdomains other than sales of systems for the domestic automotive aftermarket. The Company will continue to work to enhance corporate
value in the medium to long term through the following priority strategies:(a) Business Application Software- Promoting sales of applications by business type
- Promoting work analysis software(b) Network services- Developing auto parts distribution business and e-commerce business- Creating database analysis services- Expanding into overseas markets in earnest, primarily in Asia
The details of the priority strategies above are described in (4) Challenges to be addressed below.
(4) Challenges to be addressed
The Company identifies the five priority strategies below as challenges to be addressed:(i) Business Application Software(a) Promoting sales of applications by business type
The Company provides industry-specific applications to improve customers’ operations and has a large market share. It will increase
the availability and scalability of applications and will develop cloud data infrastructure systems that enable real-time processing. The
Company will also develop applications leveraging mass data accumulated through different initiatives.
(b) Promoting work analysis software
The Company provides work analysis and optimization software that helps with improvement activities at maintenance shops andmanufacturing plants and will provide software not only for shop floors but also for business succession, traditional art crafts, and theservice business in earnest. In Japan, the Company needs to respond to the retirement of skilled people in the baby boomer generation,
increasing numbers of foreign workers, temporary employees becoming permanent employees, and the cultivation of multi-skilledworkers. The Company will contribute to total optimization at different sites.
(ii) Network services(a) Developing auto parts distribution business and e-commerce businessTo expand its existing network services, the Company will launch new services to promote the parts distribution business. Specifically,
the Company will provide services combining an auto repair parts order placing/receiving platform and logistics platform services forthe auto aftermarket businesses, leveraging its customer base and database in the auto aftermarket, where it has strength. The Company
will mitigate inefficiency in the transactions and distribution of auto parts, a challenge in the industry, and will contribute to revitalizing
the industry and improving efficiency in distribution.
(b) Creating database analysis services
The Company will launch operations for new services, including the research and development of services using big data related tothe automotive sector for car owners. The Company will pursue joint research and alliances with other companies to increase theadded value of databases and creating a next-generation automotive aftermarket business. In this way, the Company aims to create,
for example, a telematics service that will gather vehicle information, including travel distance, from in-vehicle information terminals
and will distribute the information and other charged information services through the promotion of the database business incooperation with entities in the travel and other industries as well as universities and other academic institutions.
(c) Expanding into overseas markets in earnest, primarily in Asia
The automotive aftermarket is expected to develop and expand in Asia, reflecting increasing numbers of automobiles sold and owned.
In this environment, the Company is developing operations, harnessing the expertise that it has developed in Japan and strengthening
ties with partners in China and the Philippines. The Company will conduct a study in individual countries in Southeast Asia and willseek to build parts distribution platforms.

9

(5) Other significant management items
No other significant management items

10

4. Basic Policy in the Selection of Accounting Standards
The Company is voluntarily applying the International Financial Reporting Standards (IFRS), replacing the Japanese GAAP, from theconsolidated financial statements in the 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.

11

5. Financial Statements(1) Balance sheet(Unit: Thousands of Yen)FY2015(As of Dec. 31, 2015)
AssetsCurrent assets
Cash and deposits
Notes receivable – trade
Accounts receivable – trade
MerchandiseWork in process
Supplies
Prepaid expenses
Deferred tax assets
Accounts receivable – other
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings
Accumulated depreciation
Buildings, net
Structures
Accumulated depreciation
Structures, net
VehiclesAccumulated depreciation
Vehicles, net
Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net
Leased assets
Accumulated depreciation
Leased assets, net
Land
Total property, plant and equipment
Intangible assets
Goodwill
SoftwareTotal intangible assets
Investments and other assets
Investment securities
Shares of subsidiaries and associates
Investments in capital of subsidiaries andassociates
Long-term loans receivable from subsidiaries
and associates
Long-term loans receivable from employees
Long-term accounts receivable – other
Claims provable in bankruptcy, claims provablein rehabilitation and other
Long-term prepaid expenses
Lease and guarantee deposits
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets
12

FY2016(As of Dec. 31, 2016)

8,384,656
68,9812,660,888
215,153
4,509
12,821
166,386
201,544
1,289,046
34,054-4,75813,033,282

7,611,959
51,3892,929,683
94,222
5,367
10,274
218,208
206,165
1,221,099
64,797-4,791
12,408,377

409,082-237,048
172,034
3,932-3,202730
22,063-2,763
19,300663,747-574,24189,506168,272-84,877
83,39592,978457,944357,758-247,411
110,347
4,168-3,307860
22,063-6,44815,615674,919-596,346
78,572
204,632-118,740
85,892
90,918382,206

9,362,268
1,246,711
10,608,979

8,693,535
1,137,651
9,831,187

644,322
203,859

762,386
203,859

163,625

63,62560,00060,000––4,544
61,68913,712

7,160

23,090365,272
5,560-13,712
1,465,730
12,532,655
25,565,938

19,118351,853
5,560-82,296
1,457,502
11,670,895
24,079,272

(Unit: Thousands of Yen)FY2015(As of Dec. 31, 2015)
Liabilities
Current liabilities
Accounts payable – trade
Current portion of long-term loans payable
Lease obligations
Accounts payable – otherAccrued expenses
Income taxes payable
Accrued consumption taxes
Advances received
Deposits received
Provision for bonuses
Provision for compensation for damage
Other
Total current liabilities
Non-current liabilities
Long-term loans payable
Lease obligations
Asset retirement obligations
Deferred tax liabilities
Total non-current liabilities
Total liabilities
Net assets
Shareholders' equity
Capital stock
Capital surplus
Legal capital surplus
Total capital surplus
Retained earnings
Other retained earnings
Retained earnings brought forward
Total retained earnings
Treasury shares
Total shareholders' equity
Valuation and translation adjustments
Valuation difference on available-for-sale securities
Total valuation and translation adjustments
Subscription rights to shares
Total net assets
Total liabilities and assets

13

FY2016(As of Dec. 31, 2016)

480,270624,000
32,6412,396,358
169,794
118,444
67,38830,24474,681
278,406
34,612
31,201
4,338,044

609,484
624,000
31,0862,434,938
152,141
696,221
113,650
59,457
85,347
129,878
23,860–4,960,066

1,675,160
51,126
112,041
3,603
1,841,931
6,179,976

1,013,200
59,165
110,300
23,025
1,205,691
6,165,758

7,147,905

7,147,905

7,147,905
7,147,905

7,147,905
7,147,905

6,362,772
6,362,772-1,322,701
19,335,880

5,816,210
5,816,210-2,249,888
17,862,132

20,48920,48929,592
19,385,961
25,565,938

43,99943,9997,383
17,913,514
24,079,272

(2) Statement of income(Unit: Thousands of Yen)FY2015(From Jan. 1, 2015
to Dec. 31, 2015)
Net sales
Net sales of products
Net sales of goods
Service revenue
Total net sales
Cost of sales
Cost of products soldCost of goods soldCost of sales from services
Total cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Compensation income
Cash rewards received
Gain on sales of goods
Other
Total non-operating income
Non-operating expenses
Interest expenses
Commitment fee
Provision for loss compensation
Commission fee
Commission for purchase of treasury shares
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of non-current assets
Damages received
Gain on reversal of litigation liabilities
Gain on reversal of subscription rights to shares
Total extraordinary income
Extraordinary losses
Loss on retirement of non-current assets
Loss on valuation of investment securities
Loss on valuation of investments in capital ofsubsidiaries and associates
Provision of allowance for doubtful accounts for
subsidiaries and associates
Impairment loss
Loss due to irregularities
Total extraordinary losses
Profit before income taxes
Income taxes – current
Income taxes – deferred
Total income taxes
Profit

FY2016(From Jan. 1, 2016
to Dec. 31, 2016)

10,818,821
668,671
5,336,788
16,824,282

10,551,645
669,778
5,630,103
16,851,527

3,473,158
331,783
1,049,656
4,854,597
11,969,684*1,*2
9,455,476
2,514,208

3,950,519
335,473
906,891
5,192,884
11,658,643*1,*2
9,430,865
2,227,778

1,812
3,787
13,417
3,136
654
11,21034,018

1,589
5,319
4,978
5,538
8,270
6,620
32,316

10,1202,500
21,221
17,0003,659
475
54,9752,493,250

10,321
2,500
9,332
2,000
1,456
4,018
29,6292,230,465

6,430
–
–
–
6,430

–
250,925
54,14622,209327,281*3

228
119,194

*4

14

*4

2,059
7,781

–

159,899–

13,446––
119,4222,380,258
958,481
170,021
1,128,502
1,251,755

54,54961,689299,426
2,258,319
1,109,842
5,490
1,115,332
1,142,986

(3) Statement of changes in equity
FY2015 (from Jan. 1, 2015 to Dec. 31, 2015)

Capital surplus

Balance at beginningof current period
Changes of items
during period
Dividends of surplus
Profit (loss)
Purchase of treasury
shares
Disposal of treasury
sharesRetirement oftreasury shares
Transfer of loss on
disposal of treasury
sharesNet changes of items
other thanshareholders' equity
Total changes of items
during period
Balance at end ofcurrent period

Capital stock

Legal capitalsurplus

Other capitalsurplus7,147,905

7,147,905–(Unit: Thousands of Yen)
Shareholders' equity
Retained earnings
Otherretained
Total
earnings
Total capital
Total retained Treasury shares shareholders'
Retained
equitysurplusearnings
earnings
brought
forward7,147,905

7,120,710-575,111
1,251,755-575,111
1,251,755-141,734

21,274,786-575,111
1,251,755-2,655,299-2,655,299-3,694-3,69443,44439,749-1,430,887-1,430,887

1,430,887–

1,434,582

1,434,582-1,434,582-1,434,582

–

–

–

–

–

-757,938-757,938-1,180,967-1,938,905

7,147,905

7,147,905–

7,147,905

6,362,772

6,362,772-1,322,701

19,335,880

Valuation and translation
adjustments
Valuation
Subscription
Total
Total net assets
difference on
valuation and rights to sharesavailable-fortranslationsale
adjustments
securities
Balance at beginningof current period
Changes of items
during period
Dividends of surplus
Profit (loss)
Purchase of treasury
shares
Disposal of treasury
sharesRetirement oftreasury shares
Transfer of loss on
disposal of treasury
sharesNet changes of items
other thanshareholders' equity
Total changes of items
during period
Balance at end ofcurrent period

7,120,710-10,075-10,075

29,612

21,294,322-575,111
1,251,755-2,655,299
39,749––30,56530,565-20

30,54530,56530,565-20-1,908,360

20,48920,48929,592

19,385,961

15

FY2016 (from Jan. 1, 2016 to Dec. 31, 2016)(Unit: Thousands of Yen)
Shareholders' equity
Retained earnings

Capital surplus

Balance at beginningof current period
Changes of items
during period
Dividends of surplus
Profit (loss)
Purchase of treasury
shares
Disposal of treasury
sharesRetirement oftreasury shares
Transfer of loss on
disposal of treasury
sharesNet changes of items
other thanshareholders' equity
Total changes of items
during period
Balance at end ofcurrent period

Capital stock

Legal capitalsurplus

Other capitalsurplus

Total capitalsurplus7,147,905

7,147,905–

7,147,905

Total
Total retained Treasury shares shareholders'equityearnings

6,362,772

6,362,772-728,148
1,142,986-728,148
1,142,986-961,400-961,400

961,400

961,400-961,400-961,400-1,322,701

19,335,880-728,148
1,142,986-1,945,428-1,945,428

56,841

56,841

961,400

–
–

–

–

–

–

-546,561-546,561-927,186-1,473,748

7,147,905

7,147,905–

7,147,905

5,816,210

5,816,210-2,249,888

17,862,132

Valuation and translation
adjustments
Valuation
Total
Subscription
difference on valuation and rights to shares Total net assets
available-for- translationsale
adjustments
securities
Balance at beginningof current period
Changes of items
during period
Dividends of surplus
Profit (loss)
Purchase of treasury
shares
Disposal of treasury
sharesRetirement oftreasury shares
Transfer of loss on
disposal of treasury
sharesNet changes of items
other thanshareholders' equity
Total changes of items
during period
Balance at end ofcurrent period

Retainedearnings
brought
forward20,48920,48929,592

19,385,961-728,148
1,142,986-1,945,428
56,841––

23,51023,510-22,209

1,300

23,51023,510-22,209-1,472,447

43,99943,9997,383

17,913,514

16

(4) Statement of cash flow
(Unit: Thousands of Yen)FY2015(From Jan. 1, 2015
to Dec. 31, 2015)
Cash flows from operating activities
Profit (loss) before income taxes
Depreciation
Impairment loss
Amortization of goodwill
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for loss on damages
Interest and dividend income
Interest expenses
Commitment fee
Commission fee
Commission for purchase of treasury shares
Compensation for damage received
Loss (gain) on sales of property, plant and equipment
Loss (gain) on valuation of investment securities
Loss on valuation of investments in capital ofsubsidiaries and associates
Decrease (increase) in notes and accounts receivable –trade
Decrease (increase) in inventories
Decrease (increase) in accounts receivable – other
Increase (decrease) in notes and accounts payable –trade
Increase (decrease) in accounts payable – other
Increase (decrease) in accrued expenses
Other
SubtotalInterest and dividend income received
Interest expenses paid
Compensation for damage received
Income taxes paid
Cash flows from operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Purchase of shares of subsidiaries and associates
Payments for investments in capital of subsidiaries andassociates
Payments of loans receivable from subsidiaries andassociates
Payments for lease and guarantee deposits
Proceeds from collection of lease and guarantee
deposits
Other, net
Cash flows from investing activities

17

FY2016(From Jan. 1, 2016
to Dec. 31, 2016)

2,380,258
639,255–
668,733
262-205,340-2,862-5,60010,1202,500
17,0003,659–-6,430119,1942,258,319
660,71454,549668,733
68,616-148,528-10,751-6,90910,321
2,500
2,000
1,456
-250,925
–
7,781

–

159,899

146,557-251,203-37,778-36,088

122,618
68,5607,695

129,213-138,158-182,466-294,528
3,085,982
5,600-9,461–-2,426,128
655,993

49,316-17,637-34,075
3,544,570
6,295-10,330
250,925-589,646
3,201,815-80,2996,430-766,087–-203,859-32,298–-473,329-99,855–-23,625-59,900-60,000–-3,895-5,02840,674

18,250

1,692-1,088,971-4,829-656,991

(Unit: Thousands of Yen)FY2015(From Jan. 1, 2015
to Dec. 31, 2015)
Cash flows from financing activities
Proceeds from long-term loans payable
Repayments of long-term loans payable
Proceeds from sales of treasury shares
Purchase of treasury shares
Cash dividends paid
Commitment fee paid
Payment of commission fee
Repayments of lease obligations
Cash flows from financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

2,500,000-1,098,730
39,729-2,674,958-575,111-2,500-17,000-25,489-1,854,060-2,287,038
10,671,694* 8,384,656

18

FY2016(From Jan. 1, 2016
to Dec. 31, 2016)–-661,960
56,841-1,946,885-728,148-2,506-2,000-32,861-3,317,520-772,696
8,384,656* 7,611,959

(5) Notes to financial statements(Notes on going concern assumption)
No notes on going concern assumption.
(Significant accounting policy)
1. Standards and methods for the valuation of securities(1) Shares in subsidiaries and affiliates
The cost method determined by the moving average method is applied.
(2) Other securities(Securities having fair values)
The fair value method based on the market value on the closing date is applied. (The valuation difference is recorded as a componentof net assets. The cost of products sold is calculated by the moving average method.)(Securities not having fair values)
The cost method determined by the moving average method is applied.
2. Standards and methods for the valuation of inventories(1) Merchandise
The cost method determined by the moving average method (the carrying value—balance sheet value—is reduced based on a decline
in profitability) is applied.
(2) Work in process
The cost method based on the specific cost method (the carrying value—balance sheet value—is reduced based on a decline inprofitability) is applied.
(3) Supplies
The cost method determined by the moving average method (the carrying value—balance sheet value—is reduced based on a decline
in profitability) is applied.
3. Depreciation method for non-current assets(1) Property, plant and equipment (except leased assets)
The straight-line method is applied.
Major useful lives are as follows:
Buildings
11 to 43 years
Tools, furniture and fixtures
4 to 6 years(2) Intangible assets (except leased assets)
The straight-line method is applied.
For software for internal use, the straight-line method based on its estimated useful life (five years) at the Company is applied. For
software to be sold on the market, the amortization based on its estimated sales revenue or the equally distributed amount based on
the remaining valid period (within three years), whichever is larger, is posted.
(3) Leased assets
Leased assets relating to finance lease transactions without the transfer of ownership
The straight-line method is applied. The useful life is the leasing period, and the residual value is zero.
(4) Goodwill
Goodwill is amortized by the straight-line method for 20 years.
4. Basis for calculating allowances(1) Allowance for doubtful accounts
In preparation for potential loan losses, the Company posts estimated uncollectible amounts, which are estimated from loan loss ratios
for general reserves and from collectability for each of specific receivables including those with low collectability.
(2) Provision for bonuses
In preparation for the payment of bonuses, the Company posts an amount payable in the fiscal year under review of an estimatedamount payable in the future.
(3) Provision for compensation for damage
In preparation for losses caused by the payment of compensation for damages, the Company posts estimated losses due to theimplementation of compensation.

19

5. Basis for posting revenues and expenses
Basis for posting revenues and expenses related to the development of software produced on order(1) Contracts whose outcome at the end of the fiscal year under review is deemed certain
Percentage-of-completion method (construction-cost-percentage method for estimating the progress of construction)(2) Other construction contracts
Completed-contract method
6. Scope of cash and cash equivalents in the statement of cash flow
Cash and cash equivalents consist of cash in hand, bank deposits that can be withdrawn at any time, and short-term investments withan original maturity of three months or less that can be readily converted into cash and that are subject to only an insignificant risk ofchange in value.
7. Other important matters that constitute the basis for preparation of financial statements
Accounting treatment of consumption taxes
Consumption taxes and local consumption taxes are accounted for by the tax exclusion method.
(Change in presentation)(Statement of income)Cash rewards received and gain on sales of goods, which were included in other in non-operating income in the previous fiscal year,
are presented as separate items in the fiscal year under review because their significance in monetary terms has increased. To reflect
this change in presentation, the financial statements for the previous fiscal year have been replaced.
Other of 15,000,000 yen in non-operating income in the statement of income for the previous fiscal year has been replaced by cash
rewards received of 3,136,000 yen, gain on sales of goods of 654,000 yen, and other of 11,210,000 yen.

20

(Notes to balance sheet)
1. Guarantee obligation
The Company guarantees part of future lease payments by customers that have leased systems of the Company.
FY2015FY2016(December 31, 2015)(December 31, 2016)
thousand yen

thousand yen

12,248 general customers
304,778 12,287 general customers
293,546(Note) The guarantee obligations above are amounts after the deduction of provision for losses on compensation for damages.
2. To raise working capital efficiently, the Company has concluded monetary loan agreements with banks and has set commitment
lines. Outstanding borrowings under the agreements at the ends of fiscal years are shown below.
FY2015FY2016(December 31, 2015)(December 31, 2016)
thousand yen
thousand yen
Commitment line
2,000,000
2,000,000－－
Outstanding borrowings
Difference

2,000,000

2,000,000(Notes to statement of income)*1 Selling expenses accounted for approximately 54.6% in FY2015 and 53.0% in FY2016. General and administrative expenses
accounted for approximately 45.4% in FY2015 and 47.0% in FY2016.
The main expense items of the selling, general and administrative expenses and their amounts are stated below.
FY2015FY2016(From Jan. 1, 2015 to Dec. 31, 2015)(From Jan. 1, 2016 to Dec. 31, 2016)
thousand yen
thousand yen
Salaries and allowances
3,222,542
3,474,052
Legal welfare expenses
Provision for bonuses

505,298
239,156

528,550
116,818

Traveling and transportation expenses
Research and development expenses

762,925
451,528

688,503
285,142

Depreciation
Amortization of goodwill

144,570668,733

170,447
668,733

Rent expenses

938,060

911,126*2 The amount of research and development expenses included in general and administrative expenses
FY2015(From Jan. 1, 2015 to Dec. 31, 2015)

FY2016(From Jan. 1, 2016 to Dec. 31, 2016)
thousand yen
451,528

thousand yen
285,142*3 Breakdown of gain on sales of non-current assets
FY2015(From Jan. 1, 2015 to Dec. 31, 2015)
thousand yen
Vehicles
6,430 Vehicles*4 Breakdown of loss on retirement of non-current assets
FY2015(From Jan. 1, 2015 to Dec. 31, 2015)
thousand yen
Buildings
70 Buildings
Tools, furniture and fixtures
Leased assets
Total

FY2016(From Jan. 1, 2016 to Dec. 31, 2016)
thousand yen－

FY2016(From Jan. 1, 2016 to Dec. 31, 2016)
thousand yen
2,000

63 Tools, furniture and fixtures
93 Leased assets
228

Total

21

58
－
2,059

(Notes to statement of changes in equity)
FY2015 (From Jan. 1, 2015 to Dec. 31, 2015)
1. Class and number of issued shares and class and number of treasury shares
Number of shares
reduced during
FY2015

Number of shares at
Number of shares
beginning of FY2015 added during FY2015

Number of shares at
end of FY2015

Issued shares
Common shares (Note 1)
Total

26,221,700－

987,500

25,234,200

26,221,700－

987,500

25,234,200

Treasury shares
Common shares (Notes 2, 3, and 4)
92,484
1,954,500
1,016,100
1,030,884
Total
92,484
1,954,500
1,016,100
1,030,884(Notes) 1. The reduction of 987,500 in the number of issued common shares was because of the retirement of 987,500 treasury sharesby resolution of the Board of Directors.
2. The addition of 1,954,500 shares to the common treasury stock resulted from an addition of 1,194,500 shares purchased ina tender offer by resolution of the Board of Directors and an addition of 760,000 shares purchased on the market byresolution of the Board of Directors.
3. The reduction of 1,016,100 shares from the common treasury stock resulted from a reduction of 987,500 shares due to theretirement of treasury stock by a resolution of the Board of Directors, a reduction of 24,100 shares due to the sale of treasury
shares by the trust account exclusively for the Broadleaf Employee Stock Ownership Plan to the Employee Stock OwnershipPlan, a reduction of 4,000 shares due to the exercise of stock options, and a reduction of 500 shares due to the exercise ofsubscription rights to shares.
4. The number of shares of common treasury stock includes the number of Company shares held by the trust accountexclusively for the Broadleaf Employee Stock Ownership Plan (92,400 shares at the beginning of FY2015 and 68,300 sharesat the end of FY2015).
2. Subscription rights to shares
Breakdown ofClassification subscription rights tosharesReportingCompany

Class of shares Number of shares underlying subscription rights to shares
Amount at end
underlying
Reductionof FY2015
At
beginning
AddedduringAt
endof
subscription
during(thousand yen)of
FY2015FY2015FY2015rights to shares
FY20152014 subscription
Common sharesrights to shares (Note)739,200－

500

738,700

29,592

Total
739,200
500
738,700
29,592－－(Note) The reduction in the number of the 2014 subscription rights to shares in FY2015 was because of the exercise of subscription
rights to shares.
3. Dividends(1) Dividend payment
Resolution

Class ofstock

Total amount ofdividends(thousand yen)

Dividend
resource

Ordinary general meetingof shareholders held on
March 26, 2015 (Note 1)

Commonshares262,216

Retainedearnings

Dividend pershare (yen)Record date

10 December 31, 2014

Effective date

March 27, 2015

Meeting of Board of
CommonRetained
Directors held on July 31,
312,895
12.5
June 30, 2015
September 24, 2015
sharesearnings
2015 (Note 2)(Note) 1. The total amount of dividends includes dividends of 924,000 yen for Company shares held by the trust account exclusively
for the Broadleaf Employee Stock Ownership Plan.
2. The total amount of dividends includes dividends of 1,040,000 yen for Company shares held by the trust account exclusively
for the Broadleaf Employee Stock Ownership Plan.

22

(2) Of dividends with a record date falling in FY2015, those with an effective date falling in FY2016
Total amount ofClass of
Dividend Dividend per
Resolution
dividends
Record datestock
resource
share (yen)(thousand yen)

Effective dateOrdinary general meeting
CommonRetainedof shareholders held on
303,395
12.5 December 31, 2015
March 31, 2016
sharesearnings
March 30, 2016 (Note)(Note) The total amount of dividends includes dividends of 853,000 yen for Company shares held by the trust account exclusively for
the Broadleaf Employee Stock Ownership Plan.

23

FY2016 (From Jan. 1, 2016 to Dec. 31, 2016)
1. Class and number of issued shares and class and number of treasury shares
Number of shares at
Number of shares
beginning of FY2016 added during FY2016

Number of shares
reduced during
FY2016

Number of shares at
end of FY2016

Issued shares
Common shares (Note 1 and 2)

25,234,200

25,234,200

1,520,000

48,948,400

Total

25,234,200

25,234,200

1,520,000

48,948,400

Common shares (Notes 3, 4, and 5)

1,030,884

4,502,584

1,594,200

3,939,268

Treasury shares(Note)

Total
1,030,884
4,502,584
1,594,200
3,939,268
1. The addition of 25,234,200 in the number of issued common shares was because of an increase of 25,234,200 shares due toa 2-for-1 common stock split with an effective of December 17, 2016 by a resolution of the Board of Directors.
2. The reduction of 1,520,000 in the number of issued common shares was because of the retirement of 1,520,000 treasury
shares by resolution by the Board of Directors.
3. The addition of 4,502,584 shares to the common treasury stock resulted from an addition of 1,030,884 shares due to a stock
split by resolution of the Board of Directors, an increase of 1,607,700 shares purchased on the market by resolution of theBoard of Directors, and an increase of 1,864,000 shares acquired by the Board Benefit Trust (BBT) and the Employee Stock
Ownership Plan (J-ESOP).
4. The reduction of 1,594,200 shares from the common treasury stock resulted from a decrease of 1,520,000 shares due to theretirement of treasury stock by resolution of the Board of Directors and a decrease of 74,200 shares due to the sale of treasury
shares by the trust account exclusively for the Broadleaf Employee Stock Ownership Plan to the Employee Stock OwnershipPlan.
5. The number of shares of common treasury stock includes the number of Company shares held by the trust accountexclusively for the Broadleaf Employee Stock Ownership Plan, Board Benefit Trust (BBT), and Employee Stock Ownership
Plan (J-ESOP) at the end of FY2016 (1,926,400 shares).

2. Subscription rights to shares
Breakdown ofClassification subscription rights tosharesReportingCompany

2014 subscription
rights to shares (Note Common shares
1 and 2)738,700

738,700

1,108,800

368,600

7,383–

738,700

738,700

1,108,800

368,600

7,383

Total
(Note)Class of shares Number of shares underlying subscription rights to shares Amount at end
underlyingof FY2016
Added
Reduction
subscription(thousandAt beginning
At end ofduringduringrights to shares of FY2016
yen)
FY2016FY2016FY2016

1. The addition in the number of the 2014 subscription rights to shares in FY2016 was because of a 2-for-1 common stock
split with an effective date of December 17, 2016 by resolution of the Board of Directors.
2. The reduction in the number of the 2014 subscription rights to shares in FY2016 was because of the annulment ofsubscription rights.

3. Dividends(1) Dividend payment
Class ofstock

Total amount ofdividends(thousand yen)

Dividend
resource

Ordinary general meeting ofCommonshareholders held on March
shares30, 2016 (Note 1)

303,395

Retainedearnings

Resolution

Dividend pershare (yen)Record date

12.5 December 31, 2015

Effective date

March 31, 2016

Meeting of Board of
CommonRetained
Directors held on July 28,
424,753
17.5
June 30, 2016
September 12, 2016
sharesearnings
2016 (Note 2 and 3)(Note) 1. The total amount of dividends includes dividends of 853,000 yen for Company shares held by the trust account exclusively
for the Broadleaf Employee Stock Ownership Plan.
2. The dividend per share includes a commemorative dividend of 5.0 yen in commemoration of the 10th anniversary.
3. The total amount of dividends includes dividends of 7,115,000 yen for Company shares held by the trust account exclusively
for the Broadleaf Employee Stock Ownership Plan and the Board Benefit Trust (BBT).

24

(2) Of dividends with a record date falling in FY2016, those with an effective date falling in FY2017
Total amount of
Dividend
Class of
Dividend
Resolution
dividends
per share
Record datestock
resource(thousand yen)
(yen)

Effective dateOrdinary general meetingof shareholders held on
CommonRetained
586,69412.5 December 31, 2016
March 29, 2017
March 28, 2017 (Note 1
sharesearnings
and 2)(Note) 1. The Company conducted a 2-for-1 common stock split with an effective date of December 17, 2016. The dividend per shareis an amount after the stock split.
2. The total amount of dividends includes dividends of 24,080,000 yen for Company shares held by the trust accountexclusively for the Broadleaf Employee Stock Ownership Plan, the Board Benefit Trust (BBT), and the Employee Stock
Ownership Plan (J-ESOP).
(Notes to statement of cash flow)* Relationship between cash and cash equivalents at the end of the fiscal year and the accounts on the balance sheet
FY2015FY2016(From Jan. 1, 2015
(From Jan. 1, 2016
to Dec. 31, 2015)
to Dec. 31, 2016)
thousand yen
thousand yen
Cash and deposits
8,384,656
7,611,959
Cash and cash equivalents

8,384,656

7,611,959(Share of profit or loss of entities accounted for using equity method)
FY2015 (From Jan. 1, 2015 to Dec. 31, 2015)
The statement is omitted because the Company’s equity-method affiliates are not important in terms of earnings and retained earnings
criteria.
FY2016 (From Jan. 1, 2016 to Dec. 31, 2016)
The statement is omitted because the Company’s equity-method affiliates are not important in terms of earnings and retained earnings
criteria.
(Segment information etc.)(Segment information)
Since the Company has only a single business segment (IT services), the statement is omitted.

25

(Per-share information)
FY2015(From Jan. 1, 2015
to Dec. 31, 2015)

FY2016(From Jan. 1, 2016
to Dec. 31, 2016)

Net assets per share¥399.87¥397.83

Net income per share¥25.24¥24.05

Diluted net income per share¥25.22¥24.04(Notes) 1. The Company conducted a 2-for-1 common stock split with an effective date of December 17, 2016. The net assets per
share, net income per share, and diluted net income per share are calculated on the assumption that the stock split was
implemented at the beginning of FY2015.
2. The basis for the calculation of net income per share and diluted net income per share is shown in the table below.
FY2015(From Jan. 1, 2015
to Dec. 31, 2015)

FY2016(From Jan. 1, 2016
to Dec. 31, 2016)

Net income per share
Net income (thousand yen)

1,251,755

1,142,986––

Net income associated with common shares(thousand yen)

1,251,755

1,142,986

Average number of shares during the fiscal year

49,603,693

47,520,749

Amount not attributable to the holders of commonshares (thousand yen)

Diluted net income per share
Adjustment to net income (thousand yen)––

Increase in the number of common shares

27,382

20,351(Of the increase above, an increase in commonshares associated with subscription rights to shares)(27,382)(20,351)

Description of dilutive securities that are not
A type of subscription rights to
A type of subscription rights toincluded in the calculation of diluted net income persharessharesshare because they do not have any dilution effects(1,843 subscription rights)(1,843 subscription rights)
3. In the calculation of net assets per share, the Company shares held by the trust account exclusively for the Broadleaf
Employee Stock Ownership Plan are included in the treasury shares to be deducted from the issued shares at the end of the
fiscal year (136,600 shares in FY2015 and 62,400 shares in FY2016).
In the calculation of net income per share and diluted net income per share, the Company shares held by the trust accountexclusively for the Broadleaf Employee Stock Ownership Plan are included in the treasury shares to be deducted in thecalculation of the average number of shares during the fiscal year (164,179 shares in FY2015 and 105,319 shares in FY2016).
4. In the calculation of net assets per share, the Company shares held by the Board Benefit Trust (BBT) are included in thetreasury shares to be deducted from the issued shares at the end of the fiscal year (708,600 shares in FY2016).
In the calculation of net income per share and diluted net income per share, the Company shares held by the BBT are
included in the treasury shares to be deducted in the calculation of the average number of shares during the fiscal year
(382,872 shares in FY2016).
5. In the calculation of net assets per share, the Company shares held by the Employee Stock Ownership Plan (J-ESOP) are
included in the treasury shares to be deducted from the issued shares at the end of the fiscal year (1,155,400 shares in
FY2016).
In the calculation of net income per share and diluted net income per share, the Company shares held by the J-ESOP are
included in the treasury shares to be deducted in the calculation of the average number of shares during the fiscal year
(393,066 shares in FY2016).

26

(Significant post-balance sheet events)
Not applicable.

27