AEON DELIGHT CO. LTD. (9787)
Summary Report of Consolidated Financial Results for the Q2 FY2011

Summary Report of Consolidated Financial Results
for the Second Quarter of the Fiscal Year Ending February 28, 2011
(Based on Japanese Accounting Standards)
October 6, 2010
Listed company name:AEON DELIGHT CO., LTD.

Listed exchanges: Tokyo Stock Exchange andOsaka Securities Exchange (First Section)

Stock code:
Representative:

9787(Title)President and CEO

URL http://www.aeondelight.co.jp(Name) Yuiken Tsutsumi

Contact:(Title)General Manager, Corporate
Strategy Dept.

(Name) Yoshiyuki Kyomoto TEL +81-6-6260-5632

Planned date for filing ofquarterly financial statements:

Planned date forcommencement ofdividend payments:

October 14, 2010

November 10, 2010

Preparation of Supplementary Materials to Quarterly Financial Results: Yes
Quarterly Earnings Briefing: Yes (for institutional investors and analysts)(Amounts of less than one million yen have been rounded down.)

1. Consolidated Results for the Second Quarter of the Fiscal Year Ending February 28, 2011 (fromMarch 1, 2010 to August 31, 2010)(1) Consolidated Operating Results (cumulative)(Figures expressed in percentages represent year-on-year percentage changes.)

Net Sales

Operating Income

Ordinary Income

Millions of yen％

68,885

(5.5)

5,021

2.9

72,856

-

4,882

-

Six months ended
August 31, 2010
Six months ended
August 31, 2009％

Millions of yen

Net Income per
Share

Diluted Net Income
per Share

Yen

Yen

69.84

69.69

65.32

65.23

Six months ended
August 31, 2010
Six months ended
August 31, 2009

Net Income％

Millions of yen

％

5,053

4.0

2,770

6.9

4,856

-

2,591

-

Millions of yen(2) Consolidated Financial Position

Total Assets
As of August 31, 2010
As of Feb. 28, 2010
(Reference) Shareholders’ equity

Net Assets

Shareholders’Equity Ratio

Net Assets per
Share

Millions of yen

Millions of yen％

Yen

50,852
48,67033,666
31,36465.9
64.2

844.72787.84As of August 31, 2010: 33,510 million yen

As of February 28, 2010: 31,253 million yen

2. Dividends(Record Date)
Year Ended February 28, 2010
Year Ending February 28, 2011
Year Ending February 28, 2011
(Forecast)

Annual dividends
End of the
End of theYear-end
2nd Quarter
3rd QuarterEnd of the
1st Quarter

Total

Yen

Yen

Yen

Yen

Yen

-

12.00
17.00

-

15.00

27.00

-

22.00

39.00

Note 1: Adjustments to dividend forecast made during the second quarter of fiscal 2011: None
Note 2: The Company merged with CERTO Corp. effective as of September 1, 2010. A merger commemorative dividend of1

AEON DELIGHT CO. LTD. (9787)
Summary Report of Consolidated Financial Results for the Q2 FY2011

5.00 yen per share is included in the dividend forecast of 22.00 yen for the fiscal 2011 ending in February 28, 2011.

3. Forecast of Consolidated Results for the Year Ending February 28, 2011 (from March 1, 2010 to
February 28, 2011)(Figures expressed in percentages represent year-on-year percentage changes.)
Operating
Ordinary
Net Income
Net sales
Net Income
IncomeIncomeper Share
Millions ofyen％Millions ofyen％Millions ofyen％Millions of
yen

％

Yen

181,000 29.0
Full year
6,470 18.4
142.0012,050 20.9 12,105 22.1
Note: Adjustments to consolidated results forecast made during the second quarter of fiscal 2011: None

4. Other Remarks (See “2. Other Remarks” on page 4 of the Attached Materials.)(1) Changes in significant subsidiaries during the period: NoneNote: This refers to changes in specified subsidiaries resulting in changes
in the scope of consolidation during the current quarterly accounting
period.
(2) Application of simplified accounting methods and specific accounting: Yes
methods
Note: This refers to application of simplified accounting methods andaccounting methods specific to the preparation of quarterly
consolidated financial statements(3) Changes in accounting principles, procedures and methods of presentation
1)
Change arising from revisions of: Noneaccounting standards
2)
Change due to reasons other than
: Yes
those described in “1)” above
Note: This refers to changes in the principles, procedures, or methods of presentation for accounting
treatment related with the preparation of the quarterly financial statements as described in“Significant Changes in the Basis for Preparation of the Quarterly Financial Statements”.
(4)

Number of shares outstanding (common stock)1) Number of shares
outstanding at end of
period (including
treasury stock)2) Number of treasury
shares at end of period
3) Average number ofshares outstanding(quarterly cumulative)

As of August 31,
2010

41,400,000
shares

As of February 28,
2010

41,400,000
shares

As of August 31,
2010

1,729,838
shares

As of February 28,
2010

1,729,838
sharesSix months ended
August 31, 2010

39,670,162
sharesSix months ended
August 31, 2009

39,668,346
shares2

AEON DELIGHT CO. LTD. (9787)
Summary Report of Consolidated Financial Results for the Q2 FY2011* Items related to the conduct of quarterly review procedures･ These quarterly financial results are not subject to quarterly review based on the Financial
Instrument and Exchange Act, and a quarterly review based on the Financial Instrument andExchange Act has not been completed at the time these quarterly financial results were disclosed.
* Information concerning proper use of financial forecasts and other special instructions･ Forward-looking statements such as financial forecasts contained in these materials are based on
certain assumptions judged to be reasonable and on the information available when the forecasts
were made. However, actual performance may significantly differ due to a variety of factors. Pleaserefer to “1. (3) Qualitative Information on Consolidated Financial Forecast” on page 4 of Attached
Materials for information concerning the assumptions used for financial forecasts and the properuse of financial forecasts.

3

AEON DELIGHT CO. LTD. (9787)
Summary Report of Consolidated Financial Results for the Q2 FY2011{ Attached Materials Contents
1. Qualitative Information on Current Quarterly Consolidated Performance.................................... 2(1) Qualitative Information on Consolidated Operating Results................................................... 2(2) Qualitative Information on Consolidated Financial Position ................................................... 3(3) Qualitative Information on Consolidated Financial Forecast .................................................. 4
2. Other Remarks ............................................................................................................................ 4(1) Overview of changes in significant subsidiaries during the period ......................................... 4(2) Overview of simplified accounting methods and specific accounting methods ...................... 4(3) Overview of changes in accounting principles and procedures, and methods of presentation4(4) Overview of significant events related to the going concern assumption ............................... 4
3. Quarterly Consolidated Financial Statements ............................................................................. 5(1) Quarterly Consolidated Balance Sheet .................................................................................. 5(2) Quarterly Consolidated Statements of Income ...................................................................... 7(3) Quarterly Consolidated Statements of Cash Flow ................................................................. 8(4) Note on the going concern assumption................................................................................ 10(5) Note on significant changes in shareholders’ equity ............................................................ 10(6) Significant subsequent events ............................................................................................. 10

1

AEON DELIGHT CO. LTD. (9787)
Summary Report of Consolidated Financial Results for the Q2 FY2011

1. Qualitative Information on Current Quarterly Consolidated Performance(1) Qualitative Information on Consolidated Operating Results
During the first half of the current fiscal year (March 1, 2010 to August 31, 2010), althoughpartial recovery of the Japanese economy was seen as the result of the growth of the Asian
economy and various economic policy measures taken by the government, the future outlook
remains unclear due to the continuing yen appreciation and concerns that the recovery will stall.
Within this business environment, customers are still strongly inclined to reduce facility
maintenance and administration costs and have inhibitions against capital investments. As aresult, the business environment for the AEON DELIGHT Group (the “Company”) continues tobe difficult.
Within this business environment, the Company took the step of merging with CERTO Corp.,
who shares the Company’s vision, in order to create a new business called the “Comprehensive
Facility Management Service (Comprehensive FMS)” aiming at a new stage of growth. As partof these measures, the Comprehensive FMS Business Promotion Office was established withthe aim of expanding the FMS business ahead of the merger.
As the result of measures enacted for expanding business in the first half of the current fiscal
year, business transactions have commenced with a wide variety of customers for various
purposes at facilities, such as international airports, international exhibition halls, researchfacilities for global companies, amusement facilities nationwide, etc.
In this harsh business environment, even more focus has been put on measures for improving
profitability. In the cleaning services business, the horizontal integration of the Company’s
cleaning services model that was introduced from the year before last was implemented, andthis model has given continual returns. In order to apply such a good business practice to thefacilities management business, first the Company started to improve and streamline working
methods at patrol centers by improving work transparency with work schedules and introducing
GPS recorders to optimize patrol routes, etc.
The Company has looked at the rising environmental consciousness around the world as anopportunity to expand business, and has reinforced its environmental load reduction businesssince the year before last. We are beginning to see concrete energy-saving effects being
achieved at the facilities where these environmental services were first provided, and thepromotion of environmental solutions based on this performance and know-how has raised theresults for the first half of fiscal 2011 to about the same level as the results for the entire fiscal
2010.
In the construction work business, as customers continue to try to suppress repair costs and put
off capital investment, we have promoted measures at all our centers to make the rounds of all
customers to listen to their views and conduct proposals from the customers’ perspective toensure that facilities are safe, secure, and comfortable, or to consider the perspective ofimproving asset value.
Overseas, following in the footsteps of the JUSCO Chao Bei Joy City Store that opened in
Beijing, China in May, 2010, a branch of our subsidiary AEON DELIGHT (BEIJING) BUILDING
MAINTENANCE CO., LTD was established in Southern China and operations started at the
AEON Shunde Shopping Center (Yongwang Shunde Shopping Centre) in Foshan, Guangdon
during July. Thanks to these steps, the Company has strengthened the base for businessdevelopment in China.
As a result of these measures, the Company posted the first half-period net sales of 68,885
million yen (94.5% year-on-year). Both operating income and ordinary income were up year-onyear and the Company posted figures of 5,021 million yen (102.9% year-on-year) and 5,053
million yen (104.0% year-on-year), respectively. In addition, an extraordinary loss of 166 million
yen including merger-related expenses of 155 million yen was posted. After posting this2

AEON DELIGHT CO. LTD. (9787)
Summary Report of Consolidated Financial Results for the Q2 FY2011

extraordinary loss and taxes, a record-high first half-period net income of 2,770 million yen(106.9% year-on-year) was achieved.
Results by business segment are described below.
Net sales were 20,669 million yen (97.4% year-on-year) for facilities management business,
16,225 million yen (93.6% year-on-year) for security services business, 21,260 million yen(92.2% year-on-year) for cleaning services business, 8,136 million yen (94.8% year-on-year) for
construction work business, and for the building management sector overall net sales were66,292 million yen (94.4% year-on-year).
Net sales from other operations stood at 2,593 million yen (98.1% year-on-year).
(2) Qualitative Information on Consolidated Financial Position
Total assets as of August 31, 2010 increased by 2,182 million yen (4.5%) compared with thebalance at the end of fiscal 2010 to 50,852 million yen. This resulted mainly from a decrease of
847 million yen in cash and deposits, an increase of 1,390 million yen in notes and accounts
receivable-trade, an increase of 1,820 million yen in deposits for consumption paid to affiliates
under bailment arrangements, and a decrease of 377 million yen in amortization of goodwill.
Liabilities as of August 31, 2010 decreased by 119 million yen (0.7%) compared with thebalance at the end of fiscal 2010 to 17,186 million yen. This decrease is attributable mainly to
an increase of 720 million yen in notes and accounts payable-trade, an increase of 523 million
yen in provision for reward for business performance, and a decrease of 1,102 million yen in“other” under current liabilities.
Net assets as of August 31, 2010 increased by 2,301 million yen (7.3%) compared with thebalance at the end of fiscal 2010 to 33,666 million yen. This increase is attributable mainly to anincrease of 2,770 million yen in retained earnings due to posting of net income for the second
quarter, and a decrease of 595 million yen in retained earnings due to dividend payments.
As a result, the shareholders’ equity ratio as of August 31, 2010 increased by 1.7% to 65.9%,
compared to 64.2% at the end of fiscal 2010.
Cash FlowsThe balance of cash and cash equivalents (hereinafter referred to as “cash”) at August 31, 2010
decreased by 1,038 million yen (13.2%) compared to the balance at the end of fiscal 2010 to
6,835 million yen.
Summarized below are cash flows and their underlying factors for the first half of fiscal 2011.
(Cash flows from operating activities)
Net cash provided by operating activities during the first half of the current fiscal year was 2,076
million yen. The major factors contributing to the net cash inflow were income before income
taxes and minority interests of 4,889 million yen and a 523 million yen provision for bonuses,
which were partially offset by a decrease of 1,410 million yen due to an increase in notes andaccounts receivable-trade and income tax payments of 2,087 million yen.
(Cash flows from investing activities)
Net cash used in investing activities during the first half of the current fiscal year was 2, 479
million yen. The principal factors behind the net cash outflow were outflows of 1,820 million yen
for payment for/collection of deposits of subsidiaries and affiliates, 420 million yen for payment
into/withdrawal of time deposits, and 402 million yen for acquisition of tangible and intangible
fixed assets.
(Cash flows from financing activities)
Net cash used in financing activities during the first half of the current fiscal year was 637 million
yen. The major factor contributing to the net cash outflow was dividend payments of 594 million
yen.

3

AEON DELIGHT CO. LTD. (9787)
Summary Report of Consolidated Financial Results for the Q2 FY2011(3) Qualitative Information on Consolidated Financial Forecast
Regarding its earnings projection for the fiscal year ending February 28, 2011, AEON
DELIGHT’s forecast released on April 14, 2010 remains unchanged.
2. Other Remarks(1) Overview of changes in significant subsidiaries during the period: None
(2) Overview of simplified accounting methods and specific accounting methods
・ Simplified accounting methods
Method for estimating credit losses on general receivables
Since the difference between the actual credit loss ratio as of August 31, 2010 and the ratio
computed at the end of fiscal 2010 was deemed insignificant, the actual credit loss ratio at theend of fiscal 2010 was used in estimating credit losses.
・ Accounting methods specific to the preparation of quarterly consolidated financial statements:
None(3) Overview of changes in accounting principles and procedures, and methods of presentation
・ Changes in accounting principles and procedures: None・ Changes in methods of presentation
Quarterly Consolidated Balance Sheet-Related
As the materiality of “deposit of subsidiaries and affiliates” that was contained in “other” undercurrent assets during the first half of the previous fiscal year has increased, it is listed
separately for the first half of the current fiscal year. The amount of “deposit of subsidiaries andaffiliates” that was contained in “other” under current assets during the first half of the previous
fiscal year was 1,600 million yen.
Quarterly Consolidated Statement of Income-Related
1. As the amount of “loss on retirement of noncurrent assets” that was contained in “other”
under non-operating expenses during the first half of the previous fiscal year has exceeded
20% of the total amount of non-operating expenses, it is listed separately for the first half ofthe current fiscal year. The amount of “loss on retirement of noncurrent assets” that was
contained in “other” under non-operating expense during the first half of the previous fiscal
year was 14 million yen.
2. As the amount of “proceeds from sales of investment securities” that was contained in“other” under extraordinary income during the first half of the previous fiscal year has
exceeded 20% of the total amount of extraordinary income, it is listed separately for the firsthalf of the current fiscal year. The amount of “proceeds from sales of investment securities”
that was contained in “other” under extraordinary income during the first half of the previous
fiscal year was 1 million yen.
(4) Overview of significant events related to the going concern assumption: None

4

AEON DELIGHT CO. LTD. (9787)
Summary Report of Consolidated Financial Results for the Q2 FY2011

3. Quarterly Consolidated Financial Statements(1) Quarterly Consolidated Balance SheetFY2011(As of August 31, 2010)(millions of yen)
FY2010(As of Feb. 28, 2010)

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade
Deposit of subsidiaries and affiliates
Other
Allowance for doubtful accounts
Total current assets
Noncurrent assets
Property, plant and equipment
Buildings and structures, net
Land
Other, net
Total property, plant and equipment
Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Investment securities
Other
Allowance for doubtful accounts
Total investments and other assets
Total noncurrent assets

Total assets

5

7,116
17,674
4,820
2,979
(102)

7,964
16,284
3,000
2,899
(122)

32,48830,026

1,182
284
1,237

1,185
284
1,271

2,705

2,741

10,918605

11,295629

11,523

11,924

2,107
2,203
(175)

2,050
2,068
(141)

4,135
18,36450,852

3,977
18,644
48,670AEON DELIGHT CO. LTD. (9787)
Summary Report of Consolidated Financial Results for the Q2 FY2011

FY2011(As of August 31, 2010)

FY2010(As of Feb. 28, 2010)

Current liabilities
Notes and accounts payable-trade
Short-term loans payable
Current portion of long-term loans payable
Income taxes payable
Provision for reward for business performance
Provision for directors' bonuses
Other

9,695
26
25
2,200
1,261
48
3,091

8,974
55
25
2,191
738
101
4,194

Total current liabilities

16,34916,281

Noncurrent liabilities
Long-term loans payable
Provision for retirement benefits
Provision for directors' retirement benefits
Other

18
472
43
302

31
577
65
350

Total noncurrent liabilities

837

1,024

17,186

17,306

3,238
2,964
27,542
(461)

3,238
2,964
25,366(461)

33,283

31,107

Valuation and translation adjustments
Valuation difference on available-for-sale securities
Foreign currency translation adjustment

226
0

149
(3)

Total valuation and translation adjustments

226

145

Subscription rights to shares

156

110

33,666

31,36450,852

48,670Liabilities

Total liabilities
Net assets
Shareholders' equity
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders' equity

Total net assets

Total liabilities and net assets

6

AEON DELIGHT CO. LTD. (9787)
Summary Report of Consolidated Financial Results for the Q2 FY2011(2) Quarterly Consolidated Statements of Income
Second Quarter Consolidated Statements of Income (cumulative)
First six months of
FY2010(March 1, 2009 –August 31, 2009)(millions of yen)First six months of
FY2011(March 1, 2010 –August 31, 2010)

Net sales
Cost of sales

72,85662,18868,88558,291Gross profit

10,667

10,593

Selling, general and administrative expenses

5,785

5,572

Operating income

4,882

5,021

Non-operating income
Interest income
Dividends income
Equity in earnings of affiliates
Other

14
22
5
10

16
23
18
52

Total non-operating income

53

110

16
17
15
29

1
1
26
24
24

79

78

4,856

5,053

-

49
16
3

1
1
-

70

3

140
3

155
10

144

166

Income before income taxes and minority interests

4,782

4,889

Income taxes-current
Income taxes-deferred

1,916
224

2,068
51

Total income taxes

2,141
50

2,119
-

2,591

2,770

Non-operating expenses
Interest expenses
Compensation for accident expenses
Loss on cancellation of company housing
Loss on retirement of noncurrent assets
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Proceeds from sales of investment securities
Gain (loss) on sales of membership
Reversal of allowance for doubtful accounts
Surrender profit of insurance
Other
Total extraordinary income
Extraordinary loss
Cost of merger
Impairment loss
Other
Total extraordinary losses

Minority interests in income
Net income

7

AEON DELIGHT CO. LTD. (9787)
Summary Report of Consolidated Financial Results for the Q2 FY2011(3) Quarterly Consolidated Statements of Cash Flow(cumulative)

Net cash provided by (used in) operating activities
Income before income taxes and minority interests
Depreciation and amortization
Amortization of goodwill
Impairment loss
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for retirement benefits
Increase (decrease) in provision for directors' retirement
benefits
Interest and dividends income
Interest expenses
Decrease (increase) in notes and accounts receivable-trade
Increase (decrease) in notes and accounts payable-trade
Increase (decrease) in accounts payable-other
Decrease (increase) in accounts receivable-other
Other, net
SubtotalInterest and dividends income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
Net cash provided by (used in) investment activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Purchase of investments in subsidiaries
Purchase of investments in subsidiaries resulting in change inscope of consolidation
Payments for deposit of subsidiaries and affiliates
Collection of deposit of subsidiaries and affiliates
Other, net
Net cash provided by (used in) investment activities
Net cash provided by (used in) financing activities
Net increase (decrease) in short-term loans payable
Repayment of long-term loans payable
Liquidation of claims credit loans payable
Cash dividends paid
Other, net
Net cash provided by (used in) financing activities

8

First six months of
FY2010(March 1, 2009 –August 31, 2009)(millions of yen)First six months
of FY2011(March 1, 2010 –August 31, 2010)

4,782
367
446
140
450
27

4,889
316
377
523
(104)

(3)

(22)

(37)
16
689
(752)
(868)
61
(736)
4,584
38
(11)
(2,336)
2,275

(39)
1
(1,410)
720
(732)
(38)
(353)
4,127
38
(1)
(2,087)
2,076

715
(234)
13
(55)
(1,608)

(500)
80
(261)
114
(141)
-

284

-

(43,900)
44,80066
81(37,320)
35,50049(2,479)(1,031)(684)(1,500)(475)(15)(3,708)

(28)
(12)
(594)
(2)
(637)

AEON DELIGHT CO. LTD. (9787)
Summary Report of Consolidated Financial Results for the Q2 FY2011(millions of yen)

Effect of exchange-rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

9First six months of
FY2010(March 1, 2009 –August 31, 2009)First six months
of FY2011(March 1, 2010 –August 31, 2010)2(1,348)
6,970
5,621

2
(1,038)
7,873
6,835

AEON DELIGHT CO. LTD. (9787)
Summary Report of Consolidated Financial Results for the Q2 FY2011(4) Note on the going concern assumption: None
(5) Note on significant changes in shareholders’ equity: None
(6) Significant subsequent events
AEON DELIGHT entered into a merger agreement with CERTO Corporation effective September
1, 2010. The outline of the merger is as follows:
1) The corporate names and principal businesses of the parties to the merger, the legal form of
the merger and the post-merger corporate name as well as an outline of the merger including
the purpose of the merger
I. The corporate names and principal businesses of the parties to the merger
a. Surviving entity
Corporate name:Principal business:

AEON DELIGHT CO., LTD.
Comprehensive building maintenance services

b. Outline of the entity ceasing to exist (as of February 20, 2010)
Corporate name:
CERTO Corporation
Principal business:
Supply business, vending machine business
Capital stock
1,222 million yen
Operating income
68,093 million yen
Current net income
1,841 million yen
Total assets
30,202 million yen
Net assets
16,211 million yen
II. Legal form of the merger and the post-merger corporate name
The Merger will be effected by the merger of CERTO with and into AEON DELIGHT, with
AEON DELIGHT as the surviving entity.
III. Outline of the merger including the purpose of the merger
a. Purpose of the Merger
The AEON DELIGHT Group takes up the mission to meet the growing social demands
for greater safety and comfort as a leading company in the building maintenance industry
under the Management Principle of “pursuing the creation of ‘environmental value’ for its
customers.” The AEON DELIGHT Group offers its services to buildings for a wide rangeof purposes including large-scale commercial complexes.
CERTO takes up the mission “to eternally deliver with reliability and quality” in order tomeet customer demands in continually changing societies. CERTO provides officesupplies and packaging materials to businesses and offers vending machine operation
services.
AEON DELIGHT and CERTO have agreed to integrate their management resources,
further the AEON Group “DNA” that is embodied in its “customer comes first” principle,
and create a facilities management service to meet the diverse needs of its customers
and take into consideration people working or staying in buildings as Comprehensive
Facility Management Service (Comprehensive FMS).
A pioneer in the comprehensive FMS business, the new AEON DELIGHT aims toachieve world-class scale of operations and profitability by tapping into a greater numberof marketing opportunities created through the merger synergies, all-in-one services
made possible by the AEON DELIGHT Group’s extensive network, and high productivity
backed by knowledge in service science.
b. Outline of the merger
・ Date of the merger

10AEON DELIGHT CO. LTD. (9787)
Summary Report of Consolidated Financial Results for the Q2 FY2011

September 1, 2010
・ Structure of the merger
AEON DELIGHT shall be the surviving company based on the structure of the merger.
・ Number of shares or equity issued by AEON DELIGHT in exchange for one CERTO
share in accordance with the merger
AEON DELIGHT will issue 1.30 shares of its common stock in exchange for every
CERTO common share.
2) Outline of accounting treatment
The Merger will be treated as an incorporation transaction under common control according to
the Accounting Standard for Business Combinations. As such, accounting statements weremade prescribed in the provisions of Item 247 of the “Guidance on Accounting Standard forBusiness Combinations and Accounting Standard for Business Divestitures” in ASBJ
Guidance No. 10. Thus, there will be no “goodwill” incurred.

11