Summary of Consolidated Financial Statements for the First Quarter, FY2018 (IFRS)
February 9, 2018
Exchange: First Section of Tokyo Stock Exchange
Name of listed company:

GMO Payment Gateway, Inc.

Stock code:

3769

Representative:

Issei Ainoura

President & Chief Executive Officer

Contact:

Ryu Muramatsu

Director, Executive Vice President

Tel: +81-3-3464-0182

Scheduled submission date of quarterly reportFebruary 13, 2018

Scheduled date of commencementfor dividend payment-

Supplemental materials prepared for financial
results

Yes

Information meeting arranged related tofinancial resultsYes (for institutional
investors andanalysts)

URL: https://corp.gmo-pg.com/en/(Amounts rounded down to the nearest one million yen)

1.

Consolidated Financial Statements for the First Quarter, FY2018(From October 1, 2017 to December 31, 2017)(1) Consolidated Financial Statements (Cumulative)
Revenue

Q1 FY2018(Percentages represent year-on-year % change)

Profit before
income taxes

Operating profit

Million yen% Million yen% Million yen% Million yen% Million yen
6,098 26.4
1,594 28.7
1,585 35.3
854 36.3860

Q1 FY2017

4,826

－

－

1,238

1,171

－

Basic earnings per share

Diluted earnings per
share

Yen

Yen

Q1 FY2018

23.16

23.16

Q1 FY2017

16.41

16.41

Total
comprehensive
incomeProfit attributable toowners of parent

Profit627－% Million yen
41.1
1,051

609

－

1,103

%
△4.7
－

(Note)In order to appropriately basic earnings per share and diluted earnings per share, in regard to the stock attributed to the directors’
remuneration board incentive plan trust, it has the right to a claim of dividend, and is therefore, not included in treasury stock.

(2) Consolidated Financial Position

Q1 FY2018
FY20172.

Total assets
Million yen
96,32584,338

Total equity
Million yen
20,337
20,769Total equity attributable toowners of parent
Million yen
19,22819,675Full-year dividend
End of Q3
Yen

Year-end
Yen

Total
Yen

Total equity attributable toowners of parent to total assets
%
20.0
23.3

Dividends

FY 2017
FY 2018
FY 2018 (forecast)End of Q1
Yen

End of Q2
Yen

0.00
0.00

0.00

0.00

40.00

40.00

0.00

－

49.00

49.00

(Note) Revision to the most recently released dividend forecast: No

3.

Consolidated Financial Forecast for the Fiscal Year Ending September 2018
(From October 1, 2017 to September 30, 2018)(Full year % represents previous term comparison; Interim % represents year-on-year change)
Revenue
Million yen

Operating profit
Million yen%

Profit before
income taxes
Million yen%

Profit attributable toowners of parent
Million yen%

Basic earnings
per shareYen%
2Q of FY 2018
11,967
3,011
2,903
1,825
49.12
－
－
－
－
(cumulative)
Full year
26,107
6,475
6,196
3,933
105.87－－－－(Note 1) Revision of the most recently released financial forecast: Yes(Note 2) Previous-term and year-on-year changes are omitted since the Group started voluntary application of IFRS in the present
consolidated fiscal year.

―1―Notices:(1)

Changes of important subsidiaries during the period (change of specific subsidiaries that leads to a change in thescope of consolidation): No
Number of new subsidiaries: - (Name:), number of excluded subsidiaries: - (Name:)(2) Changes in the accounting policy / changes in the accounting estimation[1] Changes in accounting policy required by IFRS.: No[2] Changes in accounting policy other than [1]: No[3] Changes in accounting estimations: No(3) Number of shares issued (common stock)
Q1 FY2018: 37,150,500
FY 2017: 37,150,500[1] Number of shares issued at the end of the term(including treasury stock)
FY 2017: 2,500[2] Number of treasury shares at the end of the term Q1 FY2018: 2,500Q1
FY2018:37,148,000
Q1 FY2017: 37,148,000[3] Average number of shares during the term
(Note) In order to appropriately disclose the number of treasury shares at the end of the term and average number of shares
during the term (cumulative), in regard to the stock attributed to the directors’ remuneration board incentive plan trust, it has
the right to a claim of dividend, and is therefore not included in treasury stock for a more accurate disclosure of basic earnings
per share.

* These quarterly financial statements are not subject to the quarterly review procedures.
* Notes regarding the appropriate use of financial forecast and other important notes
1. The Group voluntarily adopts IFRS on its consolidated financial statements from the consolidated fiscal year ending September 30,
2018, and discloses IFRS-based condensed consolidated financial statements from its first quarter.
2. The above forecasts are outlooks based on information currently available, and include various uncertain factors. Actual performance
may differ substantially from the forecasts due to changes in business conditions and other factors. For the assumption on which financial
forecasts are based and matters to be considered in using financial forecasts, please refer to “(3) Review of consolidated earnings
forecasts and other forecasts” under “1. Qualitative Information on Consolidated Financial Statements for the Quarter” on page 9 of theattachment.
3 Results Presentation for Investors and Analysts: February 13, 2018. Supporting materials and a video of the presentation will be madeavailable on the company's website after the event.

―2―

○Table of contents of attachment
1. Qualitative Information on Consolidated Financial Statements for the Quarter ............................................................. 4(1) Consolidated operating results ..................................................................................................................................... 4(2) Status of consolidated financial position ....................................................................................................................... 8(3) Review of consolidated earnings forecasts and other forecasts ................................................................................... 9
2. Condensed consolidated Financial Statements and Major Notes ................................................................................ 10(1) Condensed consolidated balance sheet ..................................................................................................................... 10(2) Condensed consolidated statement of income and consolidated statement of comprehensive income..................... 12(3) Condensed consolidated statement of changes in equity........................................................................................... 14(4) Condensed consolidated statement of cash flows ...................................................................................................... 15(5) Notes regarding the going concern assumptions ....................................................................................................... 17(6) Notes regarding condensed consolidated financial statements .................................................................................. 18
5．First-time adoption of IFRS ..................................................................................................................................... 18―3―

1. Qualitative Information on Consolidated Financial Statements for the Quarter(1) Consolidated operating results
Forward-looking statements in the document are based on the judgement of the Group at the end of the quarter
under review. The Group started adoption of International Financial Reporting Standards (hereinafter called as“IFRS”) in place of conventional JGAAP from cumulative first quarter of the current fiscal year. The group presents
earnings figures for the first quarter and the full of the previous consolidated fiscal year under IFRS for comparative
analysis.
①Consolidated operating results
The Group announces its earnings results for the first quarter of the cumulative consolidated fiscal year (October
1, 2017 to December 31, 2017) as follows.
(Unit: Thousand yen)First three months of theprevious consolidated
fiscal year
(From October 1, 2016
to December 31, 2016)

First three months of thecurrent consolidated
fiscal year
(From October 1, 2017
to December 31, 2017)

Rate of change (%)

Revenue

4,826,686

6,098,938

26.4

Operating profit

1,238,899

1,594,464

28.7

Profit before income taxes

1,171,547

1,585,482

35.3

609,762

860,460

41.1

Profit attributable toowners of parent
a. Revenue

The Group’s revenue surged to 6,098,938 thousand yen, up by 26.4 % year-on-year. Steady growth ofEcommerce market, coupled with expansion of the Group’s service coverage in non-Ecommerce field, has led
to an increased revenue in payment processing business. Our money service business revenue also rose withsteady expansion of transaction value in “GMO payment after delivery,” an after-the-fact type of payment
service. Further, payment enhancement business revenue grew, partly thanks to Macro Kiosk Berhad, theGroup’s consolidated subsidiary that provides a comprehensive service of mobile payment, authentication andnotification.
Our revenue breakdown by business model is as follows.
(Unit: Thousand yen)

Business model

Initial(Initial revenue)
Stock(Monthly revenue)
Fee(Transaction processing
revenue)
Spread(Merchant acquiring
service revenue)
Total

First three months of theprevious consolidated
fiscal year
(From October 1, 2016
to December 31, 2016)

First three months of thecurrent consolidated
fiscal year
(From October 1, 2017
to December 31, 2017)

Rate of change (%)

350,226

251,041△28.3

690,168

795,869

15.3

1,715,389

2,360,807

37.6

2,070,901

2,691,219

30.0

4,826,686

6,098,938

26.4

―4―

b. Operating profit
The Group’s operating profit reached 1,594,464 thousand yen, up by 28.7% year-on-year, on track for theGroup’s earnings forecast for the consolidated full fiscal year.
Segmentwise, payment processing business was 1,677,270 thousand yen, a year-on-year increase of 17.7%,
Money Service Business stood at 387,503 thousand yen, a year-on-year increase of 135.5%, and payment
enhancement business amounted to 47,734 thousand yen, a year-on-year drop of 56.9%.
c. Profit before income taxes
Factors in a. and b. were translated into profit before income taxes of 1,585,482 thousand yen, an increase of
35.3%.

―5―

②Results by segment
Performance by reportable segment is explained below.
(Unit: Thousand yen)Segment

First three months of theprevious consolidated
fiscal year
(From October 1, 2016
to December 31, 2016)

Payment Processing
Business
Revenue
Operating profit
Money Service Business
Revenue
Operating profit
Payment Enhancement
Business
Revenue
Operating profit
Adjustments
Revenue
Operating profit
Total
Revenue
Operating profit

First three months of thecurrent consolidated
fiscal year
(From October 1, 2017
to December 31, 2017)

Rate of change (%)

2,812,430
1,425,528

3,311,505
1,677,270

17.7
17.7

964,546
164,567

1,525,907
387,503

58.2
135.5

1,049,709
110,741

1,261,524
47,734

20.2
△56.9

－
△461,938－△518,043－－

4,826,686
1,238,899

6,098,938
1,594,464

26.4
28.7

a. Payment processing businessFor our payment processing business, the Group’s focus is on online payment, recurring payment and cardpresent payment.
Online payment and recurring payment left solid results with steady growth in Ecommerce market, acquisition ofmajor Ecommerce merchants, and service expansion to a wider merchant base which is not limited to
Ecommerce operators.
With respect to our card-present payment, the Group’s consolidated subsidiary GMO Financial Gate, Inc.
released embedded-type multi-payment terminal in January that it jointly developed with Nayax K.K. in an
attempt to spread self-service type multi-payment method available on vending machines, etc. A decision wasmade to release the multi-payment terminal on beverage vending machines of Ito En, Ltd.
The Group’s focus was also on services to support financial institutions and financial service providers that
promote new businesses to create a cashless society. As part of such services that are tracking solidly, theGroup started offering a payment solution for the above-mentioned entities, “GMO-PG Processing Platform.”
As a result, the segment’s revenue came in at 3,311,505 thousand yen, a year-on-year increase of 17.7%, andits operating profit totaled 1,677,270 thousand yen, a year-on-year increase of 17.7%.

b. Money Service Business
Money Service Business (MSB) includes “early payment service” to help merchants receive sales proceeds
earlier and improve their cash flow, “transaction lending service” to lend growth capital to merchants based on
payment and other data, and “GMO payment after delivery” that the Group’s consolidated subsidiary GMO
Payment Service, Inc. offers.
Points to note on this segment under the first quarter of the consolidated fiscal year under review includes thesteady expansion of “GMO payment after delivery” by GMO Payment Service, Inc. and higher transaction valueof remaining services in the segment.
These factors have led to a revenue of 1,525,907 thousand yen, up by 58.2% year-on-year and an operating
profit of 387,503 thousand yen, up by 135.5%.

―6―

c. Payment enhancement business
Payment enhancement business includes services of mobile payment, authentication and notification
comprehensively provided by our consolidated subsidiary Macro Kiosk Berhad and an online advertising service
that raises the sales of Group’s merchants by analyzing sales status while running their ads on their behalf
based on sales data.
Under the first quarter, even with a headwind of a temporary factor in payment-related external environment,
Macro Kiosk Berhad’s revenue in its mainstay authentication and notification business grew by 38.5% year-onyear. The business was especially strong in emerging markets which remain to be the focus of Macro Kiosk
Berhad. Still, revenue growth of Macro Kiosk Berhad did not push up its profit by a meaningful margin.
As for our online advertising service, a change in external environment for part of the service resulted in a
decline in its ad-placement revenue that led to a year-on-year drop in the service’s revenue.
As a result, the Group recorded a segment revenue at 1,261,524 thousand yen, a year-on-year increase of
20.2%, and a segment operating profit of 47,734 thousand yen, a decrease of 56.9%.
Please see below for the chart of major businesses and companies of such businesses by segment.
Segment

Major service

Major companies of the service

Payment(Online billing and recurring billing)

Processing

Payment processing service

Business(card present payment)

subsidiary)

System development

GMO Payment Gateway, Inc.

Payment processing service

GMO Payment after delivery

Money Service
Business

Remittance service
Transaction lending
Early payment service

Payment
Enhancement
Business

Mobile payment, authentication andnotification
Online advertising service―7―

GMO Payment Gateway, Inc.
GMO Epsilon, Inc. (consolidated subsidiary)
GMO Financial Gate, Inc. (consolidated

GMO Payment Service, Inc. (consolidated
subsidiary)
GMO Payment Gateway, Inc.
GMO Epsilon, Inc. (consolidated subsidiary)
GMO Payment Gateway, Inc.
GMO Epsilon, Inc. (consolidated subsidiary)
GMO Payment Gateway, Inc.
GMO Epsilon, Inc. (consolidated subsidiary)
Macro Kiosk Berhad (consolidated subsidiary)
GMO Payment Gateway, Inc.
GMO Epsilon, Inc. (consolidated subsidiary)(2) Status of consolidated financial position①Assets, liabilities and net assets
a. Assets
Total assets at the end of the first quarter of the consolidated fiscal year under review were up 11,986,817
thousand yen from the end of the previous consolidated fiscal year at 96,325,451 thousand yen. An increase of
cash and cash equivalents by 7,473,314 thousand yen and an increase of operating and other receivables by
4,054,401 thousand yen contributed to the larger assets.
b. Liabilities
Balance of liabilities at the end of the first quarter of the consolidated fiscal year under review stood at
75,988,295 thousand yen, higher than the end of the previous consolidated fiscal year by 12,418,980 thousand
yen. Such increase mainly came from operating and other payables’ expansion of 13,670,348 thousand yen.
c. Equity
Equity balance at the end of the first quarter of the consolidated fiscal year under review was 20,337,156
thousand yen, lower by 432,162 thousand yen than the end of the previous consolidated fiscal year. Payout ofdividends from surplus for 1,485,920 thousand yen led to the smaller equity.
②Status of consolidated cash flows
Cash and cash equivalents (hereinafter called as “fund”) increased by 7,473,314 thousand yen over the firstquarter to 35,006,830 thousand yen. The state of cash flows over the three months under review is discussed
below.
a. Cash flow of operating activities
Fund provided by operating activities in the first quarter amounted to 9,537,512 thousand yen, which contrasts
with the provision of 6,603,857 thousand yen in the same period a year before. Despite an increase in operating
and other receivables of 4,054,401 thousand yen, an increase in operating and other payables of 13,670,349
thousand yen have led to the fund expansion on the whole.
b. Cash flow of investing activities
The amount of fund used for investing activities over the consolidated first quarter under review totaled 381,621
thousand yen, which contrasts with the usage of 689,556 thousand yen in the same period previous year. Thisis due to the outflow of 258,664 thousand yen from an acquisition of intangible assets and purchase ofinvestment securities for 148,934 thousand yen.
c. Cash flow of financing activities
The amount of fund used in financing activities over the consolidated first quarter under review totaled
1,705,941 thousand yen, which contrasts with the provision of 2,981,612 thousand yen in the same periodprevious year. This is due to the payout of dividends for 1,472,199 thousand yen.

―8―(3) Review of consolidated earnings forecasts and other forecasts
The Group’s core business is positioned in Ecommerce market in Japan. Japan’s B2C Ecommerce for merchandizing
continues to grow rapidly, helped by favorable changes in the group’s external environment such as spreading
smartphone usage and logistic reforms. At the same time, horizon of Ecommerce market is expanded, represented
by expanding B2B and C2C Ecommerce.
For the fiscal year ending September 2018, the Group forecasts expansion in all its segments of payment processing
business, Money Service Business and payment enhancement business by acquisition of large and growthmerchants and financial institutions as well as large businesses, expansion of “GMO payment after delivery” andfurther growth of Macro Kiosk Berhad.
With respect to our earnings forecast for consolidated fiscal year ending September 30, 2018, we take back ourconsolidated earnings forecast under JGAAP we published on November 2, 2017, in accordance with IFRS adoption.
Our forecast in the form of IFRS is as follows: revenue 26,107 million yen (-% year-on-year increase); operating profit
6,475 million yen (-% year-on-year increase); profit before income taxes 6,196 million yen (-% year-on-year increase);
profit attributable to owners of parent 3,933 million yen (-% year-on-year increase). Please note that year-on-yearchanges are not presented since this is the first fiscal year that the Group adopts IFRS.
Please see “Notice of earnings forecast release (IFRS)” we have disclosed today for further details.

―9―2. Condensed consolidated Financial Statements and Major Notes(1) Condensed consolidated balance sheet

Notes

Date of transition to
IFRS(October 1, 2016)(Unit: Thousand yen)
End of previous
End of Q1 of current
consolidated fiscal
consolidated fiscal
year
year
(September 30,(December 31,
2017)
2017)

AssetsCurrent assets
Cash and cash equivalents

25,091,091

27,533,515

35,006,830

Operating and other receivables

19,841,482

42,991,145

47,045,547

39,35094,478125,867

Inventories
Other financial assets

46,14750,89563,990

Other current assets

430,194

408,993462,619

Total current assets

45,448,267

71,079,028

82,704,854

400,648461,558

448,353

4,193,386

4,766,089

4,896,717

2,500,061

2,970,709

3,003,842

3,186,744

3,260,718

3,475,271

425,935

1,792,840

1,777,263

Other noncurrent assets

9,066

7,688

19,146

Total noncurrent assets

10,715,842

13,259,604

13,620,596

56,164,109

84,338,633

96,325,451

Noncurrent assets
Tangible assets
Goodwill and other intangible assets
Investments accounted for using equity
methodOther financial assets
Deferred tax assets

Total assets―10―NotesDate of transition to
IFRS(October 1, 2016)(Unit: Thousand yen)
End of previous
End of Q1 of current
consolidated fiscal
consolidated fiscal
year
year
(September 30,(December 31,
2017)
2017)

Liabilities and equity
Liabilities
Current liabilities
Operating and other payables

33,251,526

53,448,543

67,118,892

43,860820,596

813,715

Borrowings
Other financial liabilities

64,28473,54969,038

Income taxes payable, etc.

846,086

1,574,603

582,556

Other current liabilities

1,329,808

1,992,034

1,872,908

Total current liabilities

35,535,567

57,909,327

70,457,112

Borrowings

45,2452,999,500

2,799,400

Other financial liabilities

124,533

158,154

160,260

Provision

44,842

63,35863,654

Deferred tax liabilities

264,606

230,045296,609

Other noncurrent liabilities

1,097,758

2,208,928

2,211,258

Total noncurrent liabilities

1,576,987

5,659,987

5,531,182

37,112,554

63,569,315

75,988,295

Capital stock

4,712,900

4,712,900

4,712,900

Capital surplus

4,964,712

4,985,781

4,981,677

Retained earnings

8,188,306

9,619,266

9,036,781

Treasury stock△265,236△256,269△256,269

Noncurrent liabilities

Total liabilities
EquityOther items of equity

357,654613,768

753,697

Total equity attributable to owners ofparent17,958,338

19,675,447

19,228,787

Minority interests

1,093,216

1,093,870

1,108,368

Total equity

19,051,554

20,769,318

20,337,156

56,164,109

84,338,633

96,325,451

Total liabilities and equity―11―(2) Condensed consolidated statement of income and consolidated statement of comprehensive income
Condensed consolidated statement of income
Cumulative first quarter of the consolidated year

RevenueFirst three months of previous
consolidated fiscal year
Notes
(From October 1, 2016
to December 31, 2016)
4,826,686(Unit: Thousand yen)First three months of current
consolidated fiscal year
(From October 1, 2017
to December 31, 2017)
6,098,938△1,483,005△2,035,754

3,343,680

4,063,183

37,537

102,517△2,132,179△2,494,932△10,138△76,3031,238,899

1,594,464

Cost of revenue
Gross profit
Other income
Selling, general and administrative
expenses
Other expense
Operating profit
Financial income

24,68659,401

Financial expense△18,361△11,107

Equity method investment gains△73,676△57,276

Profit before income taxes

1,171,547

1,585,482

Income tax expenses△544,339△730,875

627,207854,607

Owners of parent

609,762

860,460

Non-controlling interests

17,445△5,853

Profit627,207854,607

Basic earnings per share (yen)

16.41

23.16

Diluted earnings per share (yen)

16.41

23.16

ProfitProfit attributable toEarnings per share―12―Condensed consolidated statement of comprehensive income
Cumulative first quarter of the consolidated year
First three months of previous
consolidated fiscal year
Notes
(From October 1, 2016
to December 31, 2016)
627,207(Unit: Thousand yen)First three months of current
consolidated fiscal year
(From October 1, 2017
to December 31, 2017)854,607216,273

85,55325,21139,006

241,485

124,560

80,39287,022

154,376△14,500

234,769

72,522476,254

197,082

1,103,462

1,051,689

Owners of parent

1,077,300

1,043,381

Minority interests

26,1618,307

1,103,462

1,051,689

ProfitOther comprehensive income
Items that will not be reclassified to profit
or loss
Fair value of financial assets measured
through other comprehensive income
Shares of other comprehensive incomeof equity method affiliates
Total of Items that will not bereclassified to profit or loss
Items that will be reclassified to profit orloss
Exchange differences on translation offoreign operations
Shares of other comprehensive incomeof equity method affiliates
Total of items that will be reclassified to
profit or loss
Other comprehensive income after income
taxes
Comprehensive income

Comprehensive income attributable to

Total

―13―

(3) Condensed consolidated statement of changes in equity
First three months of the previous consolidated fiscal year (From October 1, 2016 to December 31, 2016)(Unit: Thousand yen)
Total equity
Other items attributableof equity to owners ofparentCapitalstock

CapitalsurplusRetainedearnings

Treasurystock

4,712,900

4,964,712

8,188,306△265,236

Profit－－609,762－－

Other comprehensive income

－

－

－

－

467,538－－

609,762－

467,538－－ △1,002,996

－

－

－

9,459

－

△9,459－△8,905

－

－

－

28

－

－

Total transactions with owners－△8,876△993,536

Balance as of December 31,
2016

4,712,900

4,955,835

7,804,532

Notes

Balance as of October 1, 2016

Comprehensive income
Dividends
Transfer from accumulated
other comprehensive income
to retained earnings
Changes in the interests incontrolled subsidiary
Share-based paymenttransaction

357,654 17,958,338

Minority
interests

Total assets

1,093,216

19,051,554

609,762

17,445627,207467,538

8,715

476,254

1,077,300

26,161

1,103,462－ △1,002,996－△1,002,996

－

－

－

－

△8,905

3,335△5,569

△28

－

4,126

4,126

－

△9,488 △1,011,901

7,462△1,004,438△265,236

815,704 18,023,737

1,126,840

19,150,577

First three months of the current consolidated fiscal year (From October 1, 2017 to December 31, 2017)(Unit: Thousand yen)

Notes

Capitalstock

CapitalsurplusRetainedearnings

Treasurystock

Total equity
Other items attributableof equity to owners ofparentMinority
interests

Total assets

4,712,900

4,985,781

9,619,266△256,269

1,093,870

20,769,318

Profit

－－860,460－－

860,460△5,853854,607

Other comprehensive income

－

－

－

－

182,921

182,921

14,161

197,082－－

860,460－

182,921

1,043,381

8,307

1,051,689－－ △1,485,920－－ △1,485,920－△1,485,920－－

42,974－△42,974

－

－

－

－

△4,121－－－△4,121－△4,121

－

17

－

－

△17

－

6,190

6,190

△4,104 △1,442,945－△42,991 △1,490,041

6,190△1,483,851△256,269

753,697 19,228,787

1,108,368

20,337,156

Balance as of October 1, 2017

Comprehensive income
Dividends
Transfer from accumulated
other comprehensive income
to retained earnings
Changes in the interests incontrolled subsidiary
Share-based paymenttransaction
Total transactions with owners－

Balance as of December 31,
2017

4,712,900

4,981,677

9,036,781―14―613,768 19,675,447

(4) Condensed consolidated statement of cash flows
First three months of previous
consolidated fiscal year
Notes
(From October 1, 2016
to December 31, 2016)(Unit: Thousand yen)First three months of current
consolidated fiscal year
(From October 1, 2017
to December 31, 2017)

1,171,547

1,585,482

Depreciation

150,591

224,410

Financial income and expense△6,324△48,293

Equity method investment loss
Increase/decrease in inventories(△=increase)
Increase/decrease in operating andother receivables (△=increase)
Increase/decrease in operating andother payables
Other

73,67657,276△11,135△31,388△14,034,747△4,054,401

20,062,235

13,670,349

38,219△265,497

Subtotal

7,444,064

11,137,938

1,790

3,388

△6,168△3,169△835,828△1,600,643

6,603,857

9,537,512△9,227－△8,774△16,708△273,065△258,664－△148,934

30,94758,245△369,329－△68,753△1,686

2,934

96

5,712

△13,968△689,556△381,621

Net cash provided by (used in) operating
activities
Profit before income taxes

Interest and dividends received
Interest paid
Income taxes paid
Net cash provided by (used in)operating activities
Net cash provided by (used in) investing
activities
Payment for deposit of time deposits
Purchase of property, plants andequipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sales and redemptionof investment securities
Purchase of stocks of subsidiaries andaffiliates
Acquisition of other financial assets
Proceeds from sales of other financial
assetsOthersNet cash provided by (used in)investing activities―15―

First three months of previous
consolidated fiscal year
Notes
(From October 1, 2016
to December 31, 2016)(Unit: Thousand yen)First three months of current
consolidated fiscal year
(From October 1, 2017
to December 31, 2017)

Net cash provided by (used in) financing
activities
Proceeds from short-term borrowings

4,002,404－

Repayment of long-term borrowings△7,937△207,688

250－△5,819△4,121△990,095△1,472,199△17,189△21,9312,981,612△1,705,941

8,886,997

7,473,314

25,091,091

27,533,515△8,91523,36533,978,089

35,006,830

Proceeds from issuance of common
stock
Purchase of shares of subsidiaries not
resulting in change in scope of
consolidation
Dividends paid
Other
Net cash provided by (used in)financing activities
Increase and decrease in cash and cash
equivalents (△=decrease)
Balance of cash and cash equivalents atthe beginning of the period
Effect of exchange rate changes on cash
and cash equivalents
Cash and cash equivalents at the end of
period―16―

(5) Notes regarding the going concern assumptions
N/A

―17―

(6) Notes regarding condensed consolidated financial statements
5．First-time adoption of IFRSThe group discloses condensed consolidated financial statements under IFRS from the first quarter of the current
consolidated fiscal year. The most recent consolidated financial statements under JGAAP is for the consolidated
fiscal year ended on September 30, 2017, and transition date to IFRS is October 1, 2016.
(1)

Exemptions on retrospective application

IFRS 1 requires an entity that adopts IFRS for the first time to apply IFRS retrospectively. However, IFRS 1
provides some exemptions. Exemptions adopted by the Group are as follows.
①Business combinations
Under IFRS 1, first-time adopters may choose to apply IFRS 3, “Business Combinations” (hereinafter called as“IFRS 3”) retrospectively or prospectively. The Group has chosen not to apply IFRS 3 retrospectively tobusiness combinations that occurred before transition date. Therefore, business combinations that occurred
before the transition date were treated under JGAAP and are not modified. The amount of goodwill that
occurred as a result of business combination are presented in book value under JGAAP in principle. However,
all goodwill denominated in foreign currencies are reconverted at the exchange rate of the closing date since
IAS 21 “the effects of changes in foreign exchange rates” is retrospectively applied. Impairment test was
performed on goodwill at the time of transition date, irrespective of sign of impairment.
②Exchange differences on translation of foreign operations
IFRS 1 allows first-time adopters to choose to deem the cumulative amount of exchange differences ontranslation of foreign operations to be zero as of the date of transition to IFRS. The Group has chosen to adopt
this exemption.
③Share-based payment
IFRS 1 allows first-time adopters to choose to adopt IFRS 2 “share-based payment” (hereinafter called “IFRS2”) retrospectively or prospectively on share-based payments vested before IFRS transition date. The Groupchose to not adopt IFRS 2 on share-based payments vested before the date of transition to IFRS.
④Designation of financial instruments recognized before the date of transition
IFRS 1 allows classification under IFRS 9 to be determined based on the facts or status as of the date oftransition, not of earlier date. It also allows equity assets to be designated as financial assets measured at afair value through other comprehensive income. The Group applies this exemption and designates equity
assets as financial assets measured at a fair value through other comprehensive income.
(2) Mandatory exceptions under IFRS 1IFRS 1 prohibits retrospective application of IFRS on “estimates,” “derecognition of financial assets or liabilities,”"minority interests,” “classification and measurement of financial assets,” and others. As to these items, the Group
adopts IFRS prospectively from the date of transition.
(3) Reconciliation chart
Please see below for the effects that transition from JGAAP to IFRS gives on the financial position, operating
results and cash flows of the Group. Please note that “reclassification” of the reconciliation chart presents items
that do not affect retained earnings or comprehensive income and that “difference in recognition andmeasurement” presents items that affect retained earnings and comprehensive income.

―18―

①Reconciliation of equity
Date of transition to IFRS (October 1, 2016)
Presentation under JGAAP

Difference in
Reclassificati
recognition andon (1)
measurement

JGAAP

IFRS

Notes

Presentation under IFRS

Thousand yen Thousand yen Thousand yen Thousand yen
AssetsAssetsCurrent assets

Current assets

Cash and deposits

25,231,522△43,986△96,444

25,091,091

Accounts receivable-trade

3,924,904

15,140,397

776,179

19,841,481 (3),(10)Lease receivable

7,291,439△7,291,439

－

－

－

559,836△513,689

46,14739,350－－39,3506,388,955△6,388,955－－

Inventories
Advance payments-trade
Prepaid expenses

118,723△118,723－－

Deferred tax assets

300,169△300,169－－

1,742,612△1,742,612－－

839,372△442,405

33,227430,194

Allowance for doubtful
accounts△327,887

327,887－－

Total current assets

45,549,162△300,169

199,273

45,448,267

Accounts receivable-other
Other

(10)

(10)

(10)

－

48,367400,648 (2),(10)Intangible assets

4,143,749－

49,637

4,193,386 (4),(10)Investment securities

2,251,124△2,251,124－

2,203,234

309,174△12,348309,174△309,174－962

2,562,598

623,183

31,468△31,468－－

2,500,061 (6),(10)3,186,744 (5),(10)△8,285－－231,035△231,035－－

Deferred tax assets

57,294300,169

68,472425,935

Other

80,437△72,151

780

9,066

△31,468

31,468－－9,637,579

300,169

778,093

10,715,842

55,186,742－

977,366

56,164,109―19―

Goodwill and other intangible
assetsInvestments accounted forusing equity method

－

8,285

Total assets

Tangible assets－

Lease and guarantee
deposits

Total noncurrent assets

Other current assets

Noncurrent assets
352,280

Allowance for doubtful
accounts

Other financial assets

Total current assets

Tangible assets

Long-term prepaid expenses

Operating and otherreceivables

Inventories

Noncurrent assets

Shares of subsidiaries andaffiliates
Investments in othersecurities of subsidiaries andaffiliates
Long-term loans receivablefrom directors andemployees
Claims provable inbankruptcy, claims provablein rehabilitation and otherCash and cash equivalents(10)

Other financial assets

Deferred tax assets
Other noncurrent assets

Total noncurrent assets
Total assets

Presentation under JGAAP

Difference in
Reclassificati
recognition and
IFRS
Notes
on (1)
measurement
Thousand yen Thousand yen Thousand yen Thousand yen
JGAAP

Presentation under IFRS

Liabilities

Liabilities

Current liabilities

Current liabilities

Accounts payable-trade

2,726,492

30,403,674

121,359

33,251,526(10)Operating and other payables－

68,513△24,652

43,860(10)

Borrowings

64,846△64,846－－

Accounts payable-other

2,784,175△2,784,175－－

Income taxes payable

901,767△55,680－

846,086

Accrued consumption taxes

78,482△78,482－－－

64,846△561

64,284447,442△447,442－－

27,634,302 △27,634,302

－

－

62

△62

－

－

Provision for bonuses
Provision for bonuses for
directors

478,808△478,808－－

125,000△125,000

－

－

Other

89,3691,121,409

119,030

1,329,808 (8),(10)35,330,748△10,356

215,175

35,535,567

Long-term borrowings

30,150－15,09545,245(10)

Borrowings

Lease payable
Long-term lease andguarantee deposited
Provision for directors’
remuneration Board Incentive
Plan Trust

115,984

7,397

1,150

124,533(10)

Other financial liabilities

7,397△7,397－－

170,000△170,000

－

－

－

－

44,842

44,842－

264,606－

264,606

Lease payable

Advances received
Deposits received
Unearned revenue

Total current liabilities

Income taxes payable, etc.

(10)

Other financial liabilities

Other current liabilities
Total current liabilities
Noncurrent liabilities

Noncurrent liabilities

Provision(10)

Deferred tax liabilities

263,343△84,250

918,665(7),(8)1,097,758(10)

586,876

10,356

979,754

1,576,987

35,917,624－

1,194,930

37,112,554

Capital stock

4,712,900－－

4,712,900

Capital stock

Capital surplus

4,964,712－－

4,964,712

Capital surplus

Retained earnings

8,893,549－△705,242

8,188,306 (9),(11)Retained earnings

Treasury stock△265,236－－△265,236

Treasury stock

1,066△1,066－－△145,167

1,066

501,754

18,161,825－△203,487

17,958,338

Minority interests

1,107,292－△14,076

1,093,216

Total net assets

19,269,118－△217,563

19,051,554

Total equity

Total liabilities and net assets

55,186,742－

977,366

56,164,109

Total liabilities and equity

Other
Total noncurrent liabilities
Total liabilities

Total noncurrent liabilities
Total liabilities
EquityNet assets

Subscription rights to shares
Total accumulated othercomprehensive income

Other noncurrent liabilities

357,654 (9),(10)Other items of equity
Total equity attributable toowners of parent(10)

Minority interests(Note) Review of acquisition cost allocation
JGAAP amounts on the reconciliation chart above are based on the consolidated balance sheets (JGAAP) as of
September 30, 2016 on which acquisition cost allocation associated with business combinations was not finalized.
Instead, tentative accounting treatment was conducted based on reasonable information available at the time ofcreation of the said financial statements.
Allocation of the said acquisition costs were finalized in the following consolidated fiscal year in accordance with

―20―

JGAAP, and is reflected to JGAAP amounts on the above reconciliation chart. JGAAP amounts on thereconciliation chart are on 5.【Accounting status】of Securities Report of the previous consolidated fiscal year.

―21―First quarter of the previous consolidated fiscal year (December 31, 2016)
Presentation under JGAAP

Difference in
Reclassificati
recognition and
IFRS
Notes
on (1)
measurement
Thousand yen Thousand yen Thousand yen Thousand yen
JGAAP

AssetsAssetsCurrent assets

Current assets

Cash and deposits

34,256,834△53,214△225,530

33,978,089

Accounts receivable-trade5,143,984

27,435,036

1,297,208

33,876,229 (3),(10)Lease receivable

7,696,856△7,696,856

－

－

－

729,374△673,584

55,78950,635－－50,635

8,795,573△8,795,573－－

Prepaid expenses

149,997△149,997－－

Deferred tax assets

196,825△196,825－－

11,527,272△11,527,272－－

855,007△546,528

30,756339,235

Allowance for doubtful
accounts△605,030

605,030－－

Total current assets

68,067,956△196,825

428,849

68,299,980

Inventories
Advance payments-trade

Accounts receivable-other
Other

(10)

(10)

(10)

－

44,143

379,456 (2),(10)Intangible assets

4,287,356－

139,958

4,427,315 (4),(10)Investment securities

2,442,604△2,442,604－

2,413,479

303,808

246,821

303,808△303,808－

840

2,809,046

627,015

31,598△31,598－－

Long-term prepaid expenses

10,518△10,518－－

Lease and guarantee
deposits

286,545△286,545－－

Deferred tax assets

81,583

196,825

175,138

453,547

Other

79,896△69,377

1,170

11,688△31,598

31,598－－

10,241,945

196,825

1,234,247

11,673,018

78,309,902－

1,663,096

79,972,998

Total assets

Other financial assets

Other current assets

Noncurrent assets
335,312

Total noncurrent assets

Operating and otherreceivables

Total current assets

Tangible assets

Allowance for doubtful
accounts

Cash and cash equivalents

Inventories

Noncurrent assets

Shares of subsidiaries andaffiliates
Investments in othersecurities of subsidiaries andaffiliates
Long-term loans receivablefrom directors andemployees
Claims provable inbankruptcy, claims provablein rehabilitation and other

Presentation under IFRS

―22―

Tangible assets
Goodwill and other intangible
assets－2,964,108 (6),(10)Investments accounted forusing equity method－

3,436,901 (5),(10)(10)

Other financial assets

Deferred tax assets
Other noncurrent assets

Total noncurrent assets
Total assets

Presentation under JGAAP

Difference in
Reclassificati
recognition and
IFRS
Notes
on (1)
measurement
Thousand yen Thousand yen Thousand yen Thousand yen
JGAAP

Presentation under IFRS

Liabilities

Liabilities

Current liabilities

Current liabilities

Accounts payable-trade

3,203,818

49,763,181

346,762

53,313,762(10)

Operating and other payables

Short-term borrowings

4,050,617

17,560△20,5144,047,662(10)

Borrowings－

62,033△782

61,251(10)

Other financial liabilities

Accounts payable-other

13,204,995△13,204,995－－

Income taxes payable

331,043△39,590

135,936

427,389

Accrued consumption taxes

152,610△152,610－－

Advances received

461,995△461,995－－

Deposits received

36,827,228△36,827,228－－

Income taxes payable, etc.

Provision for bonuses

331,899△331,899－

Other

113,671

1,173,595

123,7121,410,979 (8),(10)58,677,878△1,948585,115

59,261,045

Total current liabilities－

Total current liabilities
Noncurrent liabilities

Noncurrent liabilities

Provision for directors’
remuneration Board Incentive
Plan Trust

Other
Total noncurrent liabilities
Total liabilities

Other current liabilities－

25,92012,60338,523(10)

Borrowings－

103,332925

104,258(10)

Other financial liabilities

170,000△170,000

－

－

－

－

44,96444,964－

280,9261,900

282,827

Provision(10)417,398△238,231

911,634(7),(8)1,090,801(10)

587,398

1,948

972,028

1,561,375

59,265,276－

1,557,144

60,822,421

Deferred tax liabilities
Other noncurrent liabilities
Total noncurrent liabilities
Total liabilities
EquityNet assets
Capital stock

4,712,900－－

4,712,900

Capital surplus

4,955,835

Retained earnings

8,476,423－－

4,955,835

Capital surplus－△671,890

7,804,532 (9),(11)Retained earnings

Treasury stock△265,236－－△265,236

Treasury stock

Subscription rights to shares

1,037△1,037－－

Total accumulated othercomprehensive income

43,583

1,685

770,435

17,924,544

647

98,54518,023,737

Minority interests

1,120,080

△647

7,406

1,126,840

Total net assets

19,044,625－

105,952

19,150,577

Total equity

Total liabilities and net assets

78,309,902－

1,663,096

79,972,998

Total liabilities and equity

Capital stock

815,704 (9),(10)Other items of equity
Total equity attributable toowners of parent(10)

Minority interests(Note) Review of acquisition cost allocation
JGAAP amounts on the reconciliation chart above are based on the consolidated balance sheets (JGAAP) as ofDecember 31, 2016 on which acquisition cost allocation associated with business combinations was not finalized.
Instead, tentative accounting treatment was conducted based on reasonable information available at the time ofcreation of the said financial statements.
Allocation of the said acquisition costs were finalized in the consolidated fiscal year of the quarterly closing date inaccordance with JGAAP, and is reflected to JGAAP amounts on the above reconciliation chart.
As a result, intangible assets, other under noncurrent liabilities, and minority interests under JGAAP on the above
reconciliation chart are larger by 431,725 thousand yen, 278,978 thousand yen, and 158,821 thousand yen respectively,
and shares of subsidiaries and affiliates and retained earnings above are smaller by 5,250 thousand yen and 11,325
thousand yen respectively compared to those on the consolidated balance sheet (JGAAP) as of December 31, 2016.

―23―

Most recent date of creating consolidated financial statements (September 30, 2017)
Presentation under JGAAP

Difference in
Reclassificati
recognition and
IFRS
Notes
on (1)
measurement
Thousand yen Thousand yen Thousand yen Thousand yen
JGAAP

Presentation under IFRS

AssetsAssetsCurrent assets

Current assets

Cash and deposits

27,623,466△48,292△41,658

27,533,515

Accounts receivable-trade

6,254,193

35,519,416

1,217,536

42,991,145 (3),(10)Lease receivable

6,426,827△6,426,827

－

－

－

1,267,515△1,216,619

50,895

94,478－－94,478Inventories

16,806,222△16,806,222－－

Prepaid expenses

173,200△173,200－－

Deferred tax assets

1,251,001△1,251,001－－

Accounts receivable-other

14,678,576△14,678,576

－

－

Other

Advance payments-trade

1,433,354△1,047,601

23,240408,993

Allowance for doubtful
accounts△2,393,788

2,393,788－－

Total current assets

72,347,531△1,251,001△17,501

71,079,028

(10)

(10)

(10)

－

61,969461,558 (2),(10)Intangible assets

4,505,631－

260,458

4,766,089 (4),(10)Investment securities

2,704,216△2,704,216－

2,318,656

420,998

231,055

420,998△420,998

－

－

467

3,108,972

151,279

3,260,718

49,359△49,359

－

－

－

6,907

△6,907－－

325,555△325,555－－

Deferred tax assets

16,8481,251,001

524,989

1,792,840

Other79,200△72,292

780

7,688

△49,359

49,359－－10,778,069

1,251,001

1,230,533

13,259,604

83,125,601－

1,213,031

84,338,633

Total assets―24―

Tangible assets
Goodwill and other intangible
assets(5)2,970,709 (6),(10)Lease and guarantee
deposits

Total noncurrent assets

Other current assets

Total current assets

399,588

Allowance for doubtful
accounts

Other financial assets

Noncurrent assets

Tangible assets

Long-term prepaid expenses

Operating and otherreceivables

Inventories

Noncurrent assets

Shares of subsidiaries andaffiliates
Investments in othersecurities of subsidiaries andaffiliates
Long-term loans receivablefrom directors andemployees
Claims provable inbankruptcy, claims provablein rehabilitation and otherCash and cash equivalents(5),(10)(10)Investments accounted forusing equity method

Other financial assets

Deferred tax assets
Other noncurrent assets

Total noncurrent assets
Total assets

Presentation under JGAAP

Difference in
Reclassificati
recognition and
IFRS
Notes
on (1)
measurement
Thousand yen Thousand yen Thousand yen Thousand yen
JGAAP

Presentation under IFRS

Liabilities

Liabilities

Current liabilities

Current liabilities
3,521,081

49,945,600△18,138

53,448,543(10)Operating and other payables－

827,286△6,690820,596(10)

Borrowings

74,918－△1,36973,549(10)

Other financial liabilities

Accounts payable-other

12,558,354△12,558,354－－

Income taxes payable

Accounts payable-trade

Lease payable

1,693,502

118,898－

1,574,603

Accrued consumption taxes

711,427△711,427－－

Advances received

491,722△491,722－－

Deposits received

37,406,767△37,406,767－－

Unearned revenue

11,886△11,886－－

Provision for bonuses
Provision for bonuses for
directors

410,197△410,197－－

57,900△57,900

－

－

Other

882,799994,267

114,967

1,992,034

57,820,557－

88,76957,909,327

Total current liabilities

Income taxes payable, etc.

(8),(10)

Total current liabilities
Noncurrent liabilities

Noncurrent liabilities
Long-term borrowings
Lease payable
Provision for directors’
remuneration Board Incentive
Plan Trust

Other
Total noncurrent liabilities
Total liabilities

Other current liabilities

2,999,500－－

2,999,500(10)Borrowings

158,075－

79

158,154(10)

Other financial liabilities

210,495△210,495

－

－

－

－

63,35863,358－

232,777△2,732230,045

Provision(10)

250,780△22,282

1,980,430(7),(8)2,208,928(10)

3,618,851－

2,041,136

5,659,987

61,439,408－

2,129,906

63,569,315

Deferred tax liabilities
Other noncurrent liabilities
Total noncurrent liabilities
Total liabilities
EquityNet assets
Capital stock

4,712,900－－

4,712,900

Capital stock

Capital surplus

4,934,784－

50,997

4,985,781

Capital surplus

Retained earnings

10,837,387－△1,218,121

9,619,266 (9),(11)Retained earnings

Treasury stock△256,269－－△256,269

Treasury stock

923

△923

－

－

364,344

1,937

247,486

613,768

20,594,071

1,013△919,637

19,675,447

Minority interests

1,092,121△1,013

2,762

1,093,870

Total net assets

21,686,192－△916,874

20,769,318

Total liabilities and net assets

83,125,601－

1,213,031

84,338,633

Subscription rights to shares
Total accumulated othercomprehensive income―25―(9),(10)

Other items of equity
Total equity attributable toowners of parent(10)

Minority interests
Total equity
Total liabilities and equity

Notes regarding the reconciliation of equity(1) Adjustment of line items
The Group has reclassified line items to comply with IFRS rules. Major changes are noted below.
・For cash and deposits under JGAAP, time deposits with a deposit term of three months or longer are included
under other financial assets (current) under IFRS.
・ ”Accounts receivable-trade,” “lease receivable,” “advance payments-trade,” “accounts receivable-other” and“allowance for doubtful accounts” under JGAAP are combined together and included in “operating and otherreceivables” under IFRS.
・”Investments accounted for using equity method” under “shares of subsidiaries and affiliates” under JGAAP ispresented as an independent item under IFRS.
・”Investment securities” under JGAAP is included in “other financial assets” under IFRS.
・”Accounts payable-trade,” “accounts payable-other” and “deposits received” under JGAAP are combined together
and included in “operating and other payables” under IFRS.
・Deferred tax assets and deferred tax liabilities are reclassified into noncurrent assets or noncurrent liabilities.
・Subscription rights to shares was an independent item under JGAAP, and is included in other items of equity
under IFRS.
(2) Tangible assets
The Group principally applied declining balance method for depreciation of tangible assets (excluding leaseassets) under JGAAP, and applies straight line method under IFRS.
(3) Financial instruments (loan agreement)
Lease transactions to clients and a series of transactions under consignment agreements were accounted for as
separate transactions under JGAAP. However, under IFRS, the Group treats them together as financial
instruments (loan agreement) in accounting treatment in light of their overall economic effect.
(4) Goodwill
The Group amortized goodwill evenly over a period of 10-20 years under JGAAP. From the date of transition to
IFRS onward, the Group has stopped such amortization and instead performs impairment test every fiscal year.
(5) Equity instruments
In principle, the Group measures unlisted equity instruments at acquisition price under JGAAP, and measures atfair value under IFRS. Therefore, there are changes in other financial assets (noncurrent). Further, gain/loss on
sales of equity instruments and impairment loss were recognized as net gain/loss under JGAAP. For the financial
assets designated to be measured at a fair value through other comprehensive income under IFRS, changes in
the fair value of such financial assets are recognized as part of other comprehensive income and are reclassified
into retained earnings.
(6) Investments accounted for using equity method
Goodwill in equity method affiliate is amortized under JGAAP, and is not amortized under IFRS.
(7) Share-based payment transaction by directors’ remuneration Board Incentive Plan Trust
For share-based payment transaction by directors’ remuneration Board Incentive Plan Trust, under JGAAP, theGroup recognized expenses and provision at fair value based on the share price of the time the Trust purchased
the Group’s shares. Under IFRS, they are recognized as cash-settled share-based payment transactions. The
Group recognizes the fair value of payment amount as liabilities, and records changes in the fair value of suchliabilities as net gain/loss until the right to receive the remuneration is vested under no condition.

―26―

(8) Accrued paid leave
Accrued paid leave was not accounted for as liabilities under JGAAP, and is recorded as liabilities on transition to
IFRS.
(9) Reclassification of exchange differences on translation of foreign operations
The Group has adopted exemptions under IFRS 1 on first-time adoption, and has reclassified the entire
cumulative exchange differences on translation as of the transition date into retained earnings.
(10) Alignment of reporting periods
For a consolidated subsidiary whose closing date is different from that of its parent company with a gap of threemonths or less, under JGAAP, the Group adjusted and consolidated material transactions during the gap period
based on the financial statements of the subsidiary. Under IFRS, the subsidiary’s financial statements are createdbased on its provisional closing at its parent company’s closing date and consolidated.
(11) Reconciliation of retained earnings
Date of transition to
IFRS(October 1, 2016)
Thousand yen(December 31, 2016)
Thousand yen－

Reconciliation of goodwill amountFirst quarter of theprevious consolidated
fiscal year

61,238Previous consolidated
fiscal year
(September 30, 2017)
Thousand yen
322,064

Reconciliation of operating loans

72,347

59,77970,340Reconciliation of directors’
remuneration Board Incentive Plan
Trust

△615,945△649,899△1,407,801

Reconciliation of accrued paid
leave
Reclassification on cumulative
exchange differences ontranslation of foreign operations△91,079△91,079△98,406△97,162△97,162△97,162

26,59845,233△7,155△705,242△671,890△1,218,121

Other
Total

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②Reconciliation of comprehensive income
First quarter of the previous consolidated fiscal year (October 1, 2016 to December 31, 2016)
Line item under JGAAP

Difference in
Reclassificati
recognition andon (1)
measurement

JGAAP

IFRS

Notes

Line item under IFRS

Thousand yen Thousand yen Thousand yen Thousand yen
Revenue
Cost of revenue
Gross profit

Selling, general andadministrative expenses

Operating profit
Non-operating profit

4,346,814－

479,872△1,109,296－△373,709

3,237,517－

106,162

3,343,680－

13,706

23,83037,537△2,045,646－△86,532△2,132,179－△28,443

18,304△10,138

1,191,871△14,736

61,7651,238,899

37,298△37,298－－

4,826,686 (2),(8) Revenue△1,483,005 (2),(8) Cost of revenue
Gross profit(8)

Other income(3),(4) Selling, general and(6),(8) administrative expenses(8)

Other expense
Operating profit△134,656

134,656－－

Extraordinary profit

－

－

－

－

Extraordinary loss

△45

45

－

－

－

23,592

1,093

24,686(8)

Financial income－△5,716△12,644△18,361(8)

Financial expense

Non-operating expenses－△110,163

36,486(4),(5) Equity method investment△73,676(8)
gains

Profit before income taxes

1,094,468△9,62286,701

1,171,547

Corporate, inhabitant andenterprise taxes△396,328△105,136△42,874

Income taxes-deferred△105,136

105,136－－

593,002△9,622

43,826627,207

Net profit△544,339 (7),(8) Income tax expenses

Other comprehensive income
16,778－63,61380,392Other valuation difference on
available-for-sale securities

206,813－9,460

216,273△34,842－

214,430

179,588

188,749－

287,504

476,254781,752△9,622

331,331

1,103,462

Comprehensive income

ProfitOther comprehensive income

Foreign currency translation
adjustment

Amount corresponding to theequity holdings of the equity
method affiliates
Total other comprehensive
incomeProfit before income taxes―28―

Exchange differences ontranslation of foreign operations
Changes in fair value offinancial assets measured
through other comprehensive
incomeShares of other comprehensive
income of equity method
affiliates
Other comprehensive income
after income taxes
Comprehensive income

Previous consolidated fiscal year (October 1, 2016 to September 30, 2017)
Line item under JGAAP

Difference in
Reclassificati
recognition andon (1)
measurement

JGAAP

IFRS

Notes

Line item under IFRS

Thousand yen Thousand yen Thousand yen Thousand yen
Revenue

21,794,783－△740,361

Cost of revenue△6,687,176－

156,937

Gross profit

15,107,607－△583,424

14,524,183－

238,476△2,733

235,743

Selling, general andadministrative expenses

21,054,421 (2),(8) Revenue△6,530,238 (2),(8) Cost of revenue
Gross profit(8)

Other income(3),(4) Selling, general and△443,854 △10,536,010(6),(8) administrative expenses△10,092,156－－△283,835

8,315△275,520

5,015,450△45,358△1,021,696

3,948,395

110,555△110,555－－△386,051

386,051－－

Extraordinary profit

188,161△188,161－－

Extraordinary loss

△457,561

457,561－－－

69,207

2,077

71,285(8)

Financial income－△28,799△14,892△43,692(8)

Financial expense－△539,944

151,014△388,930 (5),(8)Equity method investment
gains

Profit before income taxes

4,470,554－△883,496

3,587,058

Profit before income taxes

Corporate, inhabitant andenterprise taxes△2,472,115

984,104

331,226

984,104△984,104－－

2,982,543－△552,269

2,430,273

Operating profit
Non-operating profit
Non-operating expenses

Income taxes-deferred
Profit before minority interests

Operating profit

ProfitOther comprehensive income

Foreign currency translation
adjustment

92,460－31,380123,840

Other valuation difference on
available-for-sale securities

225,503－△316,789△91,285

190,147－

55,831

245,979

508,111－△229,577

278,534

3,490,654－△781,847

2,708,807

Comprehensive income

Other expense△1,156,785 (7),(8) Income tax expenses

Other comprehensive income

Amount corresponding to theequity holdings of the equitymethod affiliates
Total other comprehensive
income(8)―29―

Exchange differences ontranslation of foreign operations
Changes in fair value offinancial assets measured
through other comprehensive
incomeShares of other comprehensive
income of equity method
affiliates
Other comprehensive income
after income taxes
Comprehensive income

Notes regarding Reconciliation of income and comprehensive income(1) Adjustment of line items
The Group has reclassified some line items to comply with IFRS rules. Major reclassifications are as follows.
・Out of line items presented under JGAAP as ”non-operating profit,” “non-operating expenses,” “extraordinary
profit” or “extraordinary loss,” the Group records finance-related gain/loss as “financial income” or “financial
expense,” and presents remaining line items as “other income,” “other expense,” “equity method investment gains”
or other line items under IFRS.
・Under JGAAP, the Group recorded “corporate, inhabitant and enterprise taxes” and “income taxes-deferred”
separately. Under IFRS, the Group combines and presents them as “income tax expenses.”(2) Adjustment on revenue
Of the Group’s transactions recorded on gross under JGAAP, the transactions in which we are judged to havebeen engaged as agents were recorded on net under IFRS.
(3) Change in depreciation method
The Group basically adopted declining balance method for depreciation of tangible noncurrent assets (excluding
lease assets) under JGAAP, and adopts straight line method under IFRS. The Group has adjusted cost of revenue
and selling, general and administrative expenses that include depreciation expenses, and has recalculated
gain/loss from tangible asset sales that was previously recorded based on the conventional depreciation method.
(4) Adjustment on goodwill amount
Goodwill is amortized under JGAAP, and is not amortized under IFRS.
(5) Adjustment on the amount of Investments accounted for using equity method
The Group amortized goodwill in equity method affiliate under JGAAP, and does not amortize it under IFRS.
(6) Accrued paid leave
Accrued paid leave was not accounted for under JGAAP. Under IFRS, it is recorded as personnel expenses.
(7) Income tax expenses
Income tax expenses were recorded due to the temporary difference in connection with adjustment of other itemson the statements of financial position.
(8) Alignment of reporting periods
For a consolidated subsidiary whose closing date is different from that of its parent company with a gap of threemonths or less, under JGAAP, the Group adjusted and consolidated material transactions during the gap period
based on the financial statements of the subsidiary. Under IFRS, the subsidiary’s financial statements are createdbased on its provisional closing at its parent company’s closing date for consolidation.

―30―

③ Adjustment of cash flows
First quarter of the previous consolidated fiscal year (October 1, 2016 to December 31, 2016) and previous
consolidated fiscal year (October 1, 2016 to September 30, 2017)
In the consolidated statements of cash flows for the first quarter of the previous consolidated fiscal year disclosed inaccordance with IFRS, cash flows from operating activities decreased by 81,434 thousand yen, cash flows frominvesting activities decreased by 32,798 thousand yen, and cash flows from financing activities decreased by 1,671
thousand yen, compared with the consolidated statements of cash flows prepared in accordance with JGAAP.
In the consolidated statements of cash flows for the previous consolidated fiscal year disclosed in accordance with
IFRS, cash flows from operating activities increased by 100,598 thousand yen, cash flows from investing activities
decreased by 27,631 thousand yen, and cash flows from financing activities decreased by 8,525 thousand yen,
compared with the consolidated statements of cash flows prepared in accordance with JGAAP.
These differences are principally due to the alignment of reporting periods. For a consolidated subsidiary whose
closing date is different from that of its parent company with a gap of three months or less, under JGAAP, the Groupadjusted and consolidated material transactions during the gap period based on the financial statements of thesubsidiary. Under IFRS, the subsidiary’s financial statements are created based on its provisional closing at its
parent company’s closing date and consolidated.

―31―