Summary of Consolidated Financial Results
for the Second Quarter of the Fiscal Year Ending February 28, 2019
(Six Months Ended August 31, 2018)[Japanese GAAP]
September 28, 2018

Company name: Adastria Co., Ltd.
Listing: TSE 1st section
Stock code:
2685
URL: http://www.adastria.co.jp
Representative: Michio Fukuda, Chairman of the Board
Contact:
Masayuki Kindo, Member of the Board of Directors
Tel: +81-3-5466-2010
Scheduled date of filing of Quarterly Report:
October 15, 2018
Scheduled date of payment of dividend:
October 22, 2018
Preparation of supplementary materials for quarterly financial results: Yes
Holding of quarterly financial results meeting:Yes (for investors)

Note: The original disclosure in Japanese was released on September 28, 2018 at 15:00 (GMT +9).
(All amounts are rounded down to the nearest million yen)

1. Consolidated Financial Results for the Second Quarter of the Fiscal Year Ending February 28, 2019
(March 1, 2018 – August 31, 2018)(1) Consolidated results of operations (cumulative)

Net sales

Operating profit

Million yen

Six months ended Aug. 31, 2018
Six months ended Aug. 31, 2017
Note: Comprehensive income(Percentages represent year-on-year changes)
Net income attributable
Ordinary profit
to owners of the parent%

Million yen%

Million yen%

105,005(2.6)
529 (86.0)
600 (84.6)
107,79310.3
3,790 (52.9)
3,900 (51.5)
Six months ended Aug. 31, 2018:(744) million yen (-%)
Six months ended Aug. 31, 2017:
1,796 million yen (down 47.8%)
Net income per share
Yen

Six months ended Aug. 31, 2018
Six months ended Aug. 31, 2017
Reference: EBITDA

%

(554)
4,794

(1.1)

Diluted net income per share
Yen(11.79)101.92Six months ended Aug. 31, 2018:
Six months ended Aug. 31, 2017:
Six months ended Aug. 31, 2018:
Six months ended Aug. 31, 2017:

EPS before goodwill amortization

Million yen

4,895 million yen (down 41.3%)
8,337 million yen
13.11 yen (down 89.8%)129.08 yen(*) For more details regarding definition, computational method and other matters of these indices, please refer to thesection “Explanation of Results of Operations” on page 2.
Note: The provisional accounting treatment for a business combination was finalized at the end of fiscal year ended on February
28, 2018. As a result, figures for the six months ended August 31, 2017 reflect a significant revision of the initial
allocation of the acquisition cost for the business combination.
(2) Consolidated financial position
Total assets
As of Aug. 31, 2018
As of Feb. 28, 2018
Reference: Shareholders’ equity

Net assets

Million yen

As of Aug. 31, 2018:

88,884
91,12349,650 million yen

1Q-end2Q-endEquity ratio

Million yen

49,65051,030
As of Feb. 28, 2018:

%

55.9
56.0

51,030 million yen

2. Dividends

Yen

Yen

Fiscal year ended Feb. 28, 2018
Fiscal year ending Feb. 28, 2019
Fiscal year ending Feb. 28, 2019 (forecast)
Note: Revision to the most recently announced dividend forecast: None

Dividend per share
3Q-end
Yen

35.00
20.00

-

Year-end
Yen

15.00

-

Total
Yen

50.00

30.00

50.00

3. Consolidated Forecast for the Fiscal Year Ending February 28, 2019 (March 1, 2018 – February 28, 2019)
Net sales
Million yen

Operating profit%

Million yen%

Ordinary profit
Million yen

Full year
227,000
1.9
8,400
67.8
8,700
Note: Revision to the most recently announced consolidated forecast: None
Reference: EBITDA
EPS before goodwill amortization

%

60.3

(Percentages represent year-on-year changes)
Net income attributable
Net income per
to owners of the parent
shareMillion yen

Fiscal year ending Feb. 28, 2019 (forecast):
Fiscal year ending Feb. 28, 2019 (forecast):

4,400

%

409.4

Yen

16,000 million yen (up 5.7%)
121.17 yen (up 2.2%)

93.54

* Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in changes inscope of consolidation): None
Newly added: -Excluded: -(2) Application of special accounting methods for presenting quarterly consolidated financial statements: None
(3) Changes in accounting policies and accounting-based estimates, and restatements
1) Changes in accounting policies due to revisions in accounting standards, others: None
2) Changes in accounting policies other than 1) above: None
3) Changes in accounting-based estimates: None
4) Restatements: None

(4) Number of outstanding shares (common stock)1) Number of shares outstanding at the end of the period (including treasury shares)
As of Aug. 31, 2018:
48,800,000 shares
As of Feb. 28, 2018:

48,800,000 shares

2) Number of treasury shares at the end of the period
As of Aug. 31, 2018:
1,736,224 shares

As of Feb. 28, 2018:

1,759,875 shares

3) Average number of shares outstanding during the period
Six months ended Aug. 31, 2018:
47,053,776 shares

Six months ended Aug. 31, 2017:

47,041,975 shares

Note 1: The current quarterly financial report is not subject to quarterly review procedures by certified public accountants or
auditing firms.
Note 2: Cautionary statement with respect to forward-looking statements
Forward-looking statements in this report are based on currently available information and certain assumptions judged to bereasonable. Actual results may differ significantly from these forecasts for a number of factors. Please refer to the section “1.
Qualitative Information on Quarterly Consolidated Financial Performance, (3) Explanation of Consolidated Forecast and Other
Forward-looking Statements” on page 3 regarding preconditions or other related matters for the forecast shown above.

Adastria Co., Ltd. (2685) Summary of 2Q Financial Results for February 2019 Fiscal Year

Contents of Attachments
1. Qualitative Information on Quarterly Consolidated Financial Performance2(1) Explanation of Results of Operations

2(2) Explanation of Financial Position

3(3) Explanation of Consolidated Forecast and Other Forward-looking Statements

3

2. Quarterly Consolidated Financial Statements and Notes

4(1) Quarterly Consolidated Balance Sheet

4(2) Quarterly Consolidated Statements of Income and Comprehensive Income

6(3) Quarterly Consolidated Statement of Cash Flows

8(4) Notes to Quarterly Consolidated Financial Statements

9

Going Concern Assumption

9

Significant Changes in Shareholders’ Equity

9

3. Supplementary Information

9(1) Sales for Brands and Regions

9(2) Sales for Merchandise Categories

10(3) Number of Stores

10

- 1 -

Adastria Co., Ltd. (2685) Summary of 2Q Financial Results for February 2019 Fiscal Year

1. Qualitative Information on Quarterly Consolidated Financial Performance(1) Explanation of Results of Operations
Consolidated results(Million yen)First six months of FY2/18
First six months of FY2/19(Mar. 1, 2017 – Aug. 31, 2017) (Mar. 1, 2018 – Aug. 31, 2018)

Net sales

YoY change(Amount)

YoY change(%)

107,793

105,005(2,787)(2.6)

Operating profit

3,790

529

(3,260)(86.0)

Ordinary profit

3,900

600

(3,300)(84.6)Net income attributableto owners of the parent

4,794

(554)

(5,349)-

EBITDA

8,337

4,895

(3,442)(41.3)EPS before goodwill
amortization (Yen)

129.0813.11(115.96)(89.8)

Consolidated net sales in the first half (March 1 - August 31, 2018) decreased 2.6% year-on-year to 105,005
million yen, operating profit decreased 86.0% to 529 million yen, ordinary profit decreased 84.6% to 600 million
yen, and net loss attributable to owners of the parent was 554 million yen (net income of 4,794 million yen in thesame period of the previous fiscal year).
Earnings before interest, taxes, depreciation and amortization (EBITDA) decreased 41.3% to 4,895 million yen
and earnings per share (EPS) before goodwill amortization fell 89.8% to 13.11 yen. (*)
Overseas sales were 16.3% higher than one year earlier because of the first full contribution to first-half sales of
Velvet, LLC, a U.S. company that was consolidated at the end of the first quarter of the previous fiscal year.
Sales in Japan decreased 3.7%. The result was a 2.6% decrease in consolidated net sales.
The primary reason for lackluster sales in Japan was slow sales of summer merchandise in April and May forbrands other than niko and … In response, summer discount sales and the launch of late-summer merchandise
were conducted earlier than initially planned. Although sales started to recover in June due to these activities,
sales were lackluster because of unfavorable weather including extremely high temperatures and heavy rain in
July. As a result, the upturn in second quarter sales was not enough to offset the decline in the first quarter.
(Please refer to the section “3. Supplementary Information, (1) Sales for Brands and Regions” for further
information.)
We opened 52 stores (including 7 overseas) and closed 70 stores (including 18 overseas), resulting in a total
network of 1,485 stores (including 115 overseas) at the end of second quarter of this fiscal year. In China,
unprofitable stores were closed in accordance with the business revitalization policy established in the previous
fiscal year. (Please refer to the section “3. Supplementary Information, (3) Number of Stores” for further
information.)
The gross profit margin decreased 1.9 percentage points from one year earlier to 53.9%. The main cause wasincreased sales of merchandise at discounted prices to reduce inventories in response to slow sales in Japan, as
was explained earlier.
The ratio of selling, general and administrative (SG&A) expenses to sales increased 1.2 percentage points to
53.4%. SG&A expenses slightly decreased year on year. There were no expenses for relocating the head office,which were incurred in the previous fiscal year, while expenditures were made for TV commercials and othermarketing activities and, sales promotion expenses for e-commerce business, and merchandise delivery expenses
increased. As a result, the operating margin decreased 3.0 percentage points to 0.5%.
There were extraordinary losses of 276 million yen for the impairment of store assets.

- 2 -Adastria Co., Ltd. (2685) Summary of 2Q Financial Results for February 2019 Fiscal Year(*) Since the fiscal year that ended in February 2014, the amortization of goodwill, which is not a cash expense,
has created a large gap between changes in cash flows and changes in operating profit and all subsequentlevels of earnings. Furthermore, comparisons with foreign companies are difficult because of differences inaccounting standards of individual countries for recording goodwill amortization. As a result, we disclose
EBITDA and EPS before goodwill amortization as reference financial indicators.
EBITDA
Operating profit + Depreciation + Amortization of goodwill (SG&A expenses)
EPS before goodwill amortization(Net income attributable to owners of the parent + Amortization of goodwill (SG&A expenses andextraordinary losses) + Impairment losses (goodwill)) / Average number of shares outstanding during theperiod(2) Explanation of Financial Position
1) Balance sheet position
Total assets decreased 2,238 million yen from as of February 28, 2018 to 88,884 million yen as of August 31,
2018. This was mainly due to decreases in cash and deposits of 3,743 million yen and goodwill of 1,178 million
yen, while there were increases in other, net under property, plant and equipment of 1,311 million yen and notes
and accounts receivable-trade of 1,173 million yen.
Liabilities decreased 858 million yen to 39,234 million yen. This was mainly due to decreases in electronicallyrecorded obligations-operating of 1,429 million yen and accounts payable-other of 242 million yen, while there
was an increase in notes and accounts payable-trade of 873 million yen.
Net assets decreased 1,379 million yen to 49,650 million yen. This was mainly due to a decrease in retained
earnings of 1,268 million yen.
2) Cash flow position
Cash and cash equivalents (hereinafter “net cash”) as of August 31, 2018 amounted to 15,633 million yen, or
3,747 million yen less than as of February 28, 2018.
A summary of cash flows from each activity during the first half of the current fiscal year is as follows:
Cash flows from operating activities
Net cash provided by operating activities totaled 2,516 million yen (compared with 5,395 million yen provided in
the same period of the previous fiscal year). The main positive factors include depreciation of 3,258 million yen.
Main negative factors include a 1,220 million yen increase in notes and accounts receivable-trade.
Cash flows from investing activities
Net cash used in investing activities totaled 5,326 million yen (compared with 4,396 million yen used in the same
period of the previous fiscal year). This was mainly due to the payments of 4,093 million yen for the purchase ofproperty, plant and equipment, and 1,353 million yen for the purchase of intangible assets.
Cash flows from financing activities
Net cash used in financing activities totaled 888 million yen (compared with 2,971 million yen used in the same
period of the previous fiscal year). This was mainly due to cash dividends paid of 715 million yen.
(3) Explanation of Consolidated Forecast and Other Forward-looking Statements
There are no revisions to the consolidated forecast for the current fiscal year that was announced on April 4,
2018.
- 3 -

Adastria Co., Ltd. (2685) Summary of 2Q Financial Results for February 2019 Fiscal Year

2. Quarterly Consolidated Financial Statements and Notes(1) Quarterly Consolidated Balance Sheet(Million yen)
Second quarter of FY2/19(As of Aug. 31, 2018)

FY2/18(As of Feb. 28, 2018)
AssetsCurrent assets
Cash and deposits

19,446

15,702

Notes and accounts receivable-trade

8,810

9,984

Inventories

18,073

17,814

Other

3,570

3,623

Allowance for doubtful accounts

(116)

(71)

Total current assets

49,78547,053

Store interior equipment, net

7,301

7,374

Other, net

5,022

6,334

Total property, plant and equipment

12,324

13,708Non-current assets
Property, plant and equipment

Intangible assets
Goodwill

1,959

781

Other

4,255

4,929

Total intangible assets

6,214

5,710

Investment securities

1,101

1,028

Lease and guarantee deposits

18,263

17,784

Other

3,711

3,913

Allowance for doubtful accounts

(278)

(313)

Total investments and other assets

22,79922,412

41,33841,831

91,123

88,884

Notes and accounts payable-trade

10,227

11,101

Electronically recorded obligations-operating

9,898

8,469

Short-term loans payable

2,657

2,536

Accounts payable-other

9,418

9,175

Income taxes payable

1,322

1,487

Provision for bonuses

2,413

2,508

698

820

Investments and other assets

Total non-current assets
Total assets
Liabilities
Current liabilities

Provision for point card certificates
Provision for loss on business liquidation
Other provision
Other
Total current liabilities

1,141

959

140

273

527

464

38,446

37,797

Non-current liabilities
346

267

Other

Provision

1,299

1,169

Total non-current liabilities

1,645

1,437

40,092

39,234

Total liabilities- 4 -Adastria Co., Ltd. (2685) Summary of 2Q Financial Results for February 2019 Fiscal Year

(Million yen)
Second quarter of FY2/19(As of Aug. 31, 2018)

FY2/18(As of Feb. 28, 2018)
Net assets
Shareholders’ equity
Capital stock

2,660

2,660

Capital surplus

7,227

7,227

Retained earnings

45,24543,976

Treasury shares(4,652)(4,574)

Total shareholders’ equity

50,48049,290235

163

Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Deferred gains or losses on hedges

(76)

30

Foreign currency translation adjustment

391

166

Total accumulated other comprehensive income

550

360

Total net assets
Total liabilities and net assets- 5 -51,03049,65091,123

88,884

Adastria Co., Ltd. (2685) Summary of 2Q Financial Results for February 2019 Fiscal Year

(2) Quarterly Consolidated Statements of Income and Comprehensive Income
Quarterly Consolidated Statement of Income(For the Six-month Period)First six months of FY2/18(Mar. 1, 2017 – Aug. 31, 2017)(Million yen)First six months of FY2/19(Mar. 1, 2018 – Aug. 31, 2018)

Net sales

107,793

105,005

Cost of sales

47,69348,356Gross profit

60,09956,649Selling, general and administrative expenses

56,30956,119Operating profit

3,790

529

45

12

Non-operating income
Dividend income
House rent income

55

47

Other

171

183

Total non-operating income

272

244

Non-operating expenses
Interest expenses
Share of loss of entities accounted for using equity
methodForeign exchange losses

10

18

39

-

17

52

Loss on valuation of derivatives

18

47

Cost of lease revenue

48

44

Other

26

11

Total non-operating expenses

161

173

3,900

600

Gain on sales of non-current assets

25-

Gain on sales of investment securities

4,373

-

Total extraordinary income

4,398

-

151

276

Total extraordinary losses

151

276

Net income before income taxes

8,148

323

Income taxes-current

3,323

1,142

Ordinary profit
Extraordinary income

Extraordinary losses
Impairment loss

29

(263)

Total income taxes

3,353

878

Net income (loss)

4,794

(554)

Net income (loss) attributable to owners of the parent

4,794

(554)

Income taxes-deferred- 6 -Adastria Co., Ltd. (2685) Summary of 2Q Financial Results for February 2019 Fiscal Year

Quarterly Consolidated Statement of Comprehensive Income(For the Six-month Period)(Million yen)First six months of FY2/18(Mar. 1, 2017 – Aug. 31, 2017)

First six months of FY2/19(Mar. 1, 2018 – Aug. 31, 2018)

4,794

(554)

(3,077)(72)

Net income (loss)
Other comprehensive income
Valuation difference on available-for-salesecurities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of
the parent
Comprehensive income attributable tonon-controlling interests

- 7 -

(10)

107

90

(224)

(2,997)

(189)

1,796

(744)

1,796

(744)

-

-

Adastria Co., Ltd. (2685) Summary of 2Q Financial Results for February 2019 Fiscal Year

(3) Quarterly Consolidated Statement of Cash FlowsFirst six months of FY2/18(Mar. 1, 2017 – Aug. 31, 2017)(Million yen)First six months of FY2/19(Mar. 1, 2018 – Aug. 31, 2018)

Net income before income taxes

8,148

323

Depreciation

3,427

3,258

Impairment loss

151

276

Cash flows from operating activities

1,277

1,172

Increase (decrease) in allowance for doubtful accounts

59

(9)

Increase (decrease) in provision for bonuses

139

95

Increase (decrease) in provision for point card certificates
Increase (decrease) in provision for loss on businessliquidation
Loss (gain) on sales of non-current assets

10

122

-

(182)

Amortization of goodwill

Loss (gain) on sales of investment securities
Share of (profit) loss of entities accounted for using
equity method
Decrease (increase) in notes and accounts receivable-trade

(25)

-

(4,373)

-

39

-

(879)

(1,220)Decrease (increase) in inventories

(523)

197

Increase (decrease) in notes and accounts payable-trade

2,140

(538)

402

(170)

Increase (decrease) in accounts payable-other
Increase (decrease) in accrued consumption taxes

(148)

188

Other, net

(241)

(116)

Subtotal

9,605

3,398

46

13

Interest and dividend income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities

(10)

(18)

(4,246)

(877)

5,395

2,516

(4,366)(4,093)105-(1,417)(1,353)(57)(0)

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
Proceeds from sales of investment securities

5,082

-

Payments for lease and guarantee deposits(1,589)

(484)

538

626

(3,713)

-

1,023

-

Proceeds from collection of lease and guarantee deposits
Purchase of shares of subsidiaries resulting in change inscope of consolidation
Proceeds from acquisition of business
Other, net
Net cash provided by (used in) investing activities

(2)

(20)

(4,396)(5,326)

(231)

(57)

Cash flows from financing activities
Increase (decrease) in short-term loans payable
Repayments of long-term loans payable
Cash dividends paid

(725)

-

(1,903)

(715)

(3)

(1)

(107)

(114)

(2,971)

(888)

(6)

(49)

Net increase (decrease) in cash and cash equivalents(1,979)(3,747)

Cash and cash equivalents at beginning of period

20,706

19,381

Cash and cash equivalents at end of period

18,727

15,633Purchase of treasury shares
Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents- 8 -Adastria Co., Ltd. (2685) Summary of 2Q Financial Results for February 2019 Fiscal Year

(4) Notes to Quarterly Consolidated Financial Statements
Going Concern Assumption
Not applicable.
Significant Changes in Shareholders’ Equity
Not applicable.
3. Supplementary Information(1) Sales for Brands and Regions
Brand / region

First six months of FY2/19
Sales (million yen)

YoY change (%)

Composition (%)

GLOBAL WORK

18,726

17.8

(4.8)

niko and ...

15,124

14.4

11.1

STUDIO CLIP

11,883

11.3

(4.2)

LOWRYS FARM

10,3009.8(14.5)LEPSIM

7,174

6.8

(3.6)

JEANASIS

5,708

5.5

(4.4)

BAYFLOW

4,050

3.9

7.2

RAGEBLUE

3,609

3.5

(12.8)

Others (Notes 3 and 4)

13,04812.4(25.3)

Total (Adastria)

89,626

85.4

(7.1)

ALICIA CO., LTD. (Note 3)

4,210

4.0

(16.7)ELEMENT RULE Co., Ltd. (Note 4)

3,933

3.7

-

Other consolidated subsidiaries

1

0.0

-

97,772

93.1

(3.7)

2,616

2.5

(12.3)

China

793

0.7

(11.4)

Taiwan

1,149

1.1

42.5

591

0.6

40.2

Total (Japan)
Hong Kong

South Korea
USA (Note 5)
Total (Overseas)
Notes:

2,083

2.0

87.0

7,233

6.9

16.3

Total (Group)
105,005
100.0
1. The number of stores is categorized by using brand operating divisions and geographic regions.

(2.6)

2. The above figures are sales to external customers and do not include internal sales between consolidated
subsidiaries.
3. On August 1, 2018, Adastria conducted an absorption-type split where three business units including the
PAGEBOY business unit of ALICIA CO., LTD. were divested and then transferred to Adastria.
4. On March 1, 2018, Adastria conducted an absorption-type split where the BARNYARDSTORM and BABYLONE
business units of Adastria were divested and then transferred to consolidated subsidiary ELEMENT RULE Co.,Ltd.
5. As Velvet, LLC (USA) became a consolidated subsidiary at the end of the first quarter of FY2/18, YoY change on
USA is the comparison of six months (January to June) of FY2/19 to three months (April to June) of FY2/18.

- 9 -Adastria Co., Ltd. (2685) Summary of 2Q Financial Results for February 2019 Fiscal Year

(2) Sales for Merchandise Categories
Category

First six months of FY2/19
Sales (million yen)

YoY change (%)

Composition (%)

Men’s apparel (bottoms, tops)

14,201

13.5

Lady’s apparel (bottoms, tops)

69,700

66.4

Others21,104

20.1

(3.7)

(2.7)

(1.3)

Total
105,005
100.0
1. The others category includes additions to the provision for point card certificates and other items.

Notes:

2. The above figures are sales to external customers and do not include internal sales between consolidated
subsidiaries.

(2.6)(3) Number of Stores
Number of stores
Brand / region

First six months of FY2/19

As of Feb.
28, 2018

As of Aug.
31, 2018

GLOBAL WORK

Absorption-type split
210-

niko and ...

132

-

4

-

(1)

3

135

STUDIO CLIP

195

-

1

-

(4)

(3)

192

LOWRYS FARM

149

-

2

-

(6)

(4)

145

LEPSIM

138

-

2

-

(3)

(1)

137

JEANASIS

76

-

1

-

(3)

(2)

74

BAYFLOW

39

-

6

-

-

6

45

OpenedChangedClosedIncrease/decrease

6

-

(1)

5

215

RAGEBLUE

57

-

3

-

(2)

1

58

Others (Notes 3 and 4)

279

14

11

-

(13)

12

291

Total (Adastria)

1,275

14

36

-

(33)

17

1,292

ALICIA CO., LTD. (Note 3)

100

(82)

1

2

(19)

(98)

2

ELEMENT RULE Co., Ltd.
(Note 4)

-

68

8

-

-

76

76

1,375

-

45

2

(52)

(5)

1,370

Hong Kong

24

-

1

-

(1)

-

24

China

49

-

-

-

(14)

(14)

35

Taiwan

31

-

6

-

(2)

4

35

South Korea

11

-

-

-

-

-

11

Total (Japan)

USA

Notes:

11

-

-

-

(1)

(1)

10

Total (Overseas)

126

-

7

-

(18)

(11)

115

Total (Group)

1,501

-

52

2

(70)

(16)

1,485

1. The number of stores is categorized by using brand operating divisions and geographic regions.
2. The number of stores includes e-commerce websites of other companies and e-commerce websites of Adastria.
3. On August 1, 2018, Adastria conducted an absorption-type split where three business units including the
PAGEBOY business unit of ALICIA CO., LTD. were divested and then transferred to Adastria.
4. On March 1, 2018, Adastria conducted an absorption-type split where the BARNYARDSTORM and BABYLONE
business units of Adastria were divested and then transferred to consolidated subsidiary ELEMENT RULE Co.,
Ltd.

This financial report is solely a translation of the Company’s Kessan Tanshin (including attachments) in Japanese, which
has been prepared in accordance with accounting principles and practices generally accepted in Japan, for theconvenience of readers who prefer an English translation.

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