For Immediate Release
February 14, 2024

PERSOL HOLDINGS CO., LTD. (TSE 2181)
Consolidated Financial Results for the Nine Months Ended December 31, 2023(IFRS)PERSOL HOLDINGS CO., LTD. (the Company) today announced its consolidated financial results
for the nine months ended December 31, 2023.
(1) Consolidated Operating Highlights
1. Financial Results(In millions of yen, unless otherwise stated)
Nine months
ended December 31,% change
2022
2023
924,042990,627
7.2

Revenue
Operating profit

42,95540,921-4.7

Profit before tax

42,00140,322-4.0

Net Profit

25,405

26,528

4.4

Profit attributable to owners of parent

23,812

25,2095.9Comprehensive income

25,03932,572

30.1

Basic earnings per share (yen)

10.38

11.12

Diluted earnings per share (yen)

10.33

11.05

EBITDA

65,51662,753Adjusted EBITDA

65,00953,443Adjusted net profit

35,22328,298Adjusted EPS (yen)

15.30

12.41

Note:
As of October 1, 2023, the Company conducted a 10-for-1 stock split of shares of common stock. As a result, basic earnings per shareand diluted earnings per share are calculated on the assumption that the stock split was conducted at the beginning of the previous fiscal
year.
EBITDA: Operating profit + Depreciation
Adjusted EBITDA: Operating profit + Depreciation (excluding rent and other equivalents from depreciation of right-of-use assets) ±Increase/decrease in accrued paid leave + Share-based payment expenses ± Other revenues and expenses ± Other non-recurring
profit/loss
Adjusted net profit : Profit attributable to Owners of parent ± Adjustment Item （(Excluding the portion attributable to noncontrollinginterests)） ± Tax reconciliation related to certain adjustment items
Adjustment Item : Increase/decrease in accrued paid leave + Share-based payment expenses ± other expenses and revenues ± Nonrecurring loss/profit
Adjusted EPS : Adjusted net profit/(Average number of shares outstanding during the period - Average number of treasury shares during
the period)

2.

Statement of financial position(In millions of yen, unless otherwise stated)
As of March 31, 2023

As of December 31, 2023

Total assets

488,728

502,669

Total equity

183,529

198,688

Total equity attributable to owners of parent

169,670

183,726-1-

Ratio of equity attributable to owners of theparent

34.7%

36.6%

(2) Dividend Status(In yen, unless otherwise stated)
Fiscal year ended/ending March 31,
2024 (forecast)

2023
Interim dividends

21.00

43.00

Year-end dividends

40.00

4.30

Annual dividends

61.00

-

Notes:①②③④

No revision of dividend forecast from the latest announcement.
As of October 1, 2023, the Company conducted a 10-for-1 stock split for its common stock.
The year-end dividend for the fiscal year ending March 31, 2024 (forecast) with a record date of March 31, 2024 is based on thenumber of shares after the stock split, considering the effect of the stock split.
The forecast of total dividend per share is not shown because a simple comparison is not suitable due to the stock split. The
dividend per share forecast on a pre-split basis is 86 yen per share.

3. Consolidated Financial Forecast for the Fiscal Year Ending March 2024
(In millions of yen, unless otherwise stated)
Forecast for the fiscal year
% change from theending March 31, 2024
previous fiscal year
Full year

Full year

1,314,000

5.7

Operating profit

49,000

14.6

Profit before tax

45,800

11.0

Profit attributable to owners of parent

29,40029.2

Basic earnings per share (yen)

12.89

-

Adjusted EBITDA

69,000-8.3

Adjusted net profit

38,400-2.9

Adjusted EPS (yen)

16.83

-

Revenue

Notes:①②③④

Revisions to financial results forecasts published most recently: Yes
For information concerning revisions to financial results forecasts, see the “Notification of Revisions of the Full-Year Financial
Forecasts without Revision to Year-End Dividends Forecast” released today (February 14, 2024).
Effective in the first quarter of the consolidated fiscal year ending March 31, 2024, the Company changed its accounting policy
from the Japanese GAAP to International Financial Reporting Standards (hereinafter referred to as "IFRS"). Consolidated financial
forecasts are also presented in accordance with IFRS.
Effective on October 1, 2023, the Company executed a 10-for-1 stock split of shares of common stock. In consideration of the
impact of this stock split, basic earnings per share and adjusted EPS are based on the number of shares after the stock split.

-2-

(1)

(2)
①
②
③

Notes
Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in changes in scope of
consolidation): None
New: - (company name)
Excluded: - (company name)
Changes in accounting policies and accounting estimates
Changes in accounting policies required by IFRS: None
Changes in accounting policies other than ①above: None
Changes in accounting estimates: None

(3) Number of shares issued (common stock)

March 31, 2023

(1) Number of shares issued andoutstanding at the end of the period(including treasury stock)(2) Number of shares of treasury stock at
the end of the period(3) Average number of shares outstanding
during the period(cumulative quarterly period)

2,367,048,610

Nine month ended
December 31, 2023
2,331,998,610

91,773,090

46,184,629

Nine months ended
December 31, 2022
2,301,548,844

Nine months ended
December 31, 2023
2,279,510,766

Notes:①
The number of treasury stock at the end of the period includes 24,782,939 shares for the 3rd quarter of the fiscal year ending
March 31, 2024 and 14,203,730 shares for the fiscal year ended March 31, 2023 held by the "Directors' Compensation BIP Trust
Account" and the "Stock Grant ESOP Trust Account" that are included in the above description as treasury stocks.
The quarterly financial results are not subject to quarterly review by certified public accountants or auditing firms.
②
As of October 1, 2023, the Company executed a 10-for-1 stock split of shares of common stock. As a result, (1), (2) and (3) arecalculated on the assumption that the stock split was conducted at the beginning of the previous fiscal year.

Disclaimer
Explanation on the appropriate use of earnings forecasts and other special notes(Cautionary statement regarding forward-looking statements)
Forward-looking statements in this document, such as forecasts and projections based on plans, contain elements ofuncertainty and are subject to change. Accordingly, they are not intended to be a promise by the Company that they
will be achieved. Actual results may differ materially from our current expectations.
Note Regarding Reference Translation
This document has been translated from the Japanese language original for reference purposes only and may not be
used or disclosed for any other purpose without the Company’s prior written consent. In the event of any conflict or
discrepancy between this translated document and the Japanese language original, the Japanese language original shallprevail in all respects. The Company makes no representations regarding the accuracy or completeness of thistranslation and assumes no responsibility for any losses or damages arising from the use of this translation.
(Application of International Financial Reporting Standards (IFRS))
Effective from the 1st quarter of the fiscal year ending March 31, 2024, the Group has adopted International Financial
Reporting Standards (hereinafter referred to as "IFRS"). Financial figures for the nine months of the previous
consolidated fiscal year ended December 31, 2022 and the previous consolidated fiscal year are also presented inaccordance with IFRS.
For the changes between IFRS and Japanese GAAP in relation to financial figures, please refer to "(First-time Adoption)"on page 27.

-3-(1) Management Discussion and Analysis
Since the 1st quarter of FY2023, the Company has disclosed its condensed quarterly
consolidated financial statements in accordance with IFRS. Figures for the same quarter ofthe previous fiscal year and ones for the previous consolidated fiscal year have beenrecalculated under IFRS for comparison and analysis.
For details, please refer to (5) Notes to the Condensed Quarterly Consolidated Financial
Statements (First-time Adoption) under 2. Condensed Consolidated Financial Statements

1. Result of Operations
This year, PERSOL GROUP (the Group) celebrated its 50th anniversary.
At present, the Group provides a wide range of human resources (HR) related services
including temporary staffing and placement service in Japan. In addition, in the Asia-Pacific(APAC) region, the Group operates staffing business and facility management business.
In the nine months ended December 31, 2023 (April to December), the business environment
saw a temporary halt in the recovery of the Japanese economy, partly reflecting downward
factors including high prices and a slowdown in overseas economies.
Despite such circumstances, the ratio of job offers to job seekers (seasonally adjusted)*1 inJapan was 1.27 in December 2023, showing that demand for human resources remained
strong. However, supply and demand began to show differences in certain industries,
depending on the company size. In the APAC region, demand remained as planned, albeit atlevels that differ among countries and regions.
In this business environment, the Company has been proactively investing since thebeginning of the period, mainly in the Career SBU, BPO SBU, and Technology SBU, whichwere designated as the pillars of profit growth in the Mid-term Management Plan 2026, of
which the current period is the first year. Under these circumstances, in the third quarter
under review (October to December 2023), adjusted EBITDA in all SBUs excluding APAC SBU
increased from the second quarter (July to September), partly reflecting the equalization ofquarterly marketing costs*2.
Further, in the nine months ended December 31, 2023 (April to December), BPO SBU saw
operations related to infection control settle down as initially expected. However, revenue inthe other SBUs increased, resulting in overall group revenue of 990,627 million yen (up 7.2%
year on year).
Profits increased at Staffing SBU and Career SBU on brisk corporate demand. Profit declined
at the other SBUs decreased due to temporary factors, such as the absence of COVID-19related operations at BPO SBU, personnel expenses that resulted from the strategic
recruitment of new graduate engineers and mid-career engineers at Technology SBU.
The overall Group's adjusted EBITDA, which the Company began to use as a key profit
indicator from the current fiscal year, stood at 53,443 million yen (down 17.8% year on year)
and operating profit was 40,921 million yen (down 4.7% year on year). Profit before tax was
40,322 million yen (down 4.0% year on year), and net profit attributable to owners of parent
stood at 25,209 million yen (up 5.9% year on year).
(Exchange Rate)
Average exchange rate during the period:(USD) 3rd quarter FY2022: 136.5 yen, 3rd quarter FY2023: 143.3 yen-4-(AUD) 3rd quarter FY2022: 93.3 yen, 3rd quarter FY2023: 94.3 yen*1. Active job openings-to-applicants ratio (seasonally adjusted):
Announced by the Ministry of Health, Labour and Welfare*2. Leveling of marketing costs per quarter:In the past, our company had a tendency for profits to be biased towards the first half of theyear as marketing expenses and other costs concentrated in the second half of the year (fromOctober onwards). For this term, by evenly distributing costs for the entire year on a quarterly
basis, we plan to smoothen profits for each quarter as well.
a. Staffing SBU
In this segment, the Group operates temporary staffing business, including mainly clericaland administrative staff dispatching and wide range of staffing service.
(Nine months ended December 31, 2023 (April to December))
Revenue for the nine months ended December 31, 2023 was 433,117 million yen (up 6.9%
year on year), adjusted EBITDA was 23,873 million yen (up 1.1% year on year), andoperating profit was 21,540 million yen (up 3.1% year on year)
The increases in revenue and profits are attributed mainly to the number of active temporary
staff at 124 thousand persons (up 3.8% year on year) and the average billing rate of 2,274
yen/hr (up 3.2% year on year).
(Three months ended December 31, 2023 (October to December))In the third quarter of the fiscal year ending March 31, 2024 (October to December), adjusted
EBITDA stood at 7,942 million yen (up 20.1% year on year) and operating profit was 7,120
million yen (up 27.8% year on year). This represented significant increases compared toadjusted EBITDA of 9,385 million yen (up 0.7% year on year) and operating profit of 8,386
million yen (up 6.9% year on year) in the first quarter (April to June) and adjusted EBITDA
of 6,546 million yen (down 14.7% year on year) and operating profit of 6,033 million yen(down 19.3% year on year) in the second quarter (July to September).
b. BPO SBUThis segment is a new segment consisting mainly of the business process outsourcing (BPO)
business, which belonged to Staffing SBU until the previous fiscal year.
(Nine months ended December 31, 2023 (April to December))
Revenue for the nine months ended December 31, 2023 was 81,706 million yen (down 7.0%
year on year), adjusted EBITDA was 6,014 million yen (down 57.7% year on year), andoperating profit was 4,402 million yen (down 65.1% year on year)
Revenue, adjusted EBITDA, and operating profit all decreased because operations related to
infection control settled down as initially expected. (The negative impact associated with
COVID-19 on profits was approx. 5.2 billion yen (gross profit from COVID-19 related businessduring the period: approx. 8.2 billion yen in the first nine months of FY2023, approx. 2.9billion yen in the first nine months of FY2024).
(Three months ended December 31, 2023 (October to December))-5-

In the third quarter under review (October to December), adjusted EBITDA was 2,284 million
yen (down 57.7% year on year) and operating profit was 1,758 million yen (down 64.0%
year on year).
c. Technology SBU
This segment had been Professional Outsourcing SBU until the previous fiscal year. Somebusinesses were transferred to BPO SBU. In this segment, the Group operates manufacturing
and development outsourcing business in IT and engineering areas and temporary staffing
business specialized in engineers dispatching.
(Nine months ended December 31, 2023 (April to December))
Revenue for the nine months ended December 31, 2023 was 75,613 million yen (up 14.3%
year on year), adjusted EBITDA was 4,896 million yen (down 2.4% year on year), andoperating profit was 4,287 million yen (down 7.4% year on year).
Revenue increased because the engineering area saw growth in demand, mainly fordevelopment in the manufacturing industry. An additional factor was steady growth in the IT
area. Adjusted EBITDA and operating profit decreased, mainly reflecting an increase inpersonnel expenses that resulted from increasing in number of hiring new graduate and midcareer engineers (up 51.8% year on year).
(Three months ended December 31, 2023 (October to December))In the third quarter under review (October to December), adjusted EBITDA was 2,182 million
yen (up 25.6% year on year) and operating profit stood at 1,948 million yen (up 25.5% year
on year), both having increased significantly. Operating rate as of the end of the third quarter
under review rose both for IT and DX Solutions, being 89.1% (83.8% at the end of Q1 and
85.3% at the end of Q2) and for Engineering, being 94.1% (89.9% at the end of Q1 and93.5% at the end of Q2).
d. Career SBU
In this segment, the Group mainly operates placement business, supporting corporate clients'
mid-career hiring activities, and job recruitment media business.
(Nine months ended December 31, 2023 (April to December))
Revenue for the nine months ended December 31, 2023 was 94,296 million yen (up 25.6%
year on year), adjusted EBITDA was 17,459 million yen (up 14.0% year on year), andoperating profit was 14,206 million yen (up 9.0% year on year).
Revenue increased significantly although some uncertainty in business confidence began toemerge in the placement business and job recruitment media business. In addition, thespecial demand for hiring following the subsiding of COVID-19 began to show a sign of coming
to an end. Adjusted EBITDA and operating profit increased, partly reflecting improvements
made in the efficiency of marketing investment in high-salary career zone businesses, while
selling, general and administrative expenses were increasing mainly due to marketinginvestment and enhancement of hiring activities.
(Three months ended December 31, 2023 (October to December))In the third quarter under review (October to December), adjusted EBITDA was 5,565 million
yen (up 21.6% year on year) and operating profit stood at 4,576 million yen (up 20.6% year
on year), both rising significantly. With the enhanced hiring activities, the preliminary figure-6-

for the headcount (HC) of Career advisor (CA) and others increased steadily, to 2,304 persons(average for the third quarter under review) (up 25.3% year on year). In addition,
productivity (revenue ÷ HC) was 2,574 thousand yen (average for the third quarter underreview) (down 6.3％ year on year).
e. Asia Pacific SBU
In this segment, the Group operates temporary staffing business and placement business in
Asia and staffing business and facility management business in Australia (those businesses
are operated under PERSOLKELLY brand in Asia and under Programmed brand in Australia.)(Nine months ended December 31, 2023 (April to December))
Revenue for the nine months ended December 31, 2023 was 308,363 million yen (up 6.1%
year on year), adjusted EBITDA was 7,565 million yen (down 3.4% year on year), andoperating profit was 5,156 million yen (Operating loss for the same quarter in the previous
fiscal year was 3,615 million yen). In addition to one-time earnings, we recorded an
impairment loss of approximately 8.9 billion yen in the previous third quarter.
Revenue increased due to progress in the recovery from the impact of the spread of COVID19 infection, with steady growth in sales from the facility management business in particular.
(Three months ended December 31, 2023 (October to December))In the third quarter under review (October to December), adjusted EBITDA was 2,218 million
yen (down 30.6% year on year) and operating profit was 1,692 million yen (Operating loss
for the same quarter in the previous fiscal year was 5,790 million yen).
Financial Forecasts of the Fiscal Year Ending March 31, 2024
With the subsiding of COVID-19, demand for human resources, which had been remarkably
overheated, is about to ease again. The placement business is seeing a tendency to selecthuman resources carefully, mainly among major companies, and changes in the behaviors ofpeople desiring a career change, reflecting the uncertainty of the overall economy. Temporary
staffing business is also seeing a temporary halt in the market. To reflect these circumstances,
the Company revised its financial forecasts, which it announced on May 15, 2023, as
described above.
#

#

#

#

(2) Financial Position
1. Consolidated Statement of financial position
Total assets increased 13,940 million yen compared to the end of the previous fiscal year.
Current assets decreased 764 million yen, and non-current assets rose 14,705 million yen.
The decrease in current assets chiefly reflected a decrease in cash and cash equivalents of
955 million yen and a decrease in trade and other receivables of 977 million yen, partially
offset by an increase in contract assets of 1,447 million yen. Non-current assets climbed
mainly due to increases in right-of-use assets of 4,288 million yen, in intangible assets of
3,695 million yen, and in goodwill of 2,249 million yen.
Liabilities decreased 1,217 million yen compared to the end of the previous fiscal year.
Current liabilities increased 3,843 million yen while non-current liabilities decreased 5,061
million yen. Current liabilities increased mainly due to 4,887 million increase in bonds and-7-

borrowings, 2,491 million increase in trade and other receivables while income tax payable
decreased 6,076 million yen. Non-current liabilities decreased mainly due to 10,117 million
yen decrease in bonds and borrowings while lease liabilities increased by 4,229 million yen
Equity increased 15,158 million yen compared to the end of the previous fiscal year. Thiswas mainly due to an increase of 6,292 million yen in retained earnings, which resulted
primarily from the recording of 25,209 million yen in profit attributable to owners of parent
and the payment of dividends of 18,927 million yen, and an increase of 6,006 million yen inother components of equity mainly due to the effects of exchange differences on translationof foreign operations.
As of March 31,2023

As of December 31,
2023

Ratio of operating profit to revenue

3.4％

4.1％

Ratio of adjusted EBITDA to revenue

6.1％

5.4％

Current ratio

120.8％

118.7％

Fixed ratio*

110.4％

109.9％

Fixed long-term precision

83.1%

86.2%

Equity attributable to owners of the parent ratio

34.7％

36.6％

Debt (excluding lease)/equity ratio

0.30

0.25

488,728

502,669

169,670

183,726

101,233

100,278

EBITDA (million yen)

73,06962,753Adjusted EBITDA (million yen)

75,27753,443

Total assets (million yen)
Equity attributable to owners of the parent(million yen)
Cash and cash equivalents at end of period(million yen)

Note:
Effective from the first quarter of the fiscal year ending March 31, 2024, the Group has adopted IFRS for the first time. Noncurrent assets increased due in part to the recoding of right-of-use assets resulting from the transition to IFRS. Accordingly, thefixed ratio increased from the previous fiscal year, when financial statements were disclosed under Japanese GAAP.

2. Business and financial issues to address
The nine months ended December 31, 2023 saw no significant change in business andfinancial issues that the Group should address.

3. Consolidated Cash Flows
Cash and cash equivalents (hereinafter "capital") as of December 31, 2023 was 100,278
million yen, down 955 million yen from the end of the previous consolidated fiscal year.
Presented below are an overview of cash flows for the nine months ended December 31,
2023 and main factors behind them.
(Cash flow from operating activities)
Capital generated as a result of operating activities was 49,774 million yen (as compared to55,490 million yen generated in the same period of the previous fiscal year). Major factors
were a profit before tax of 40,322 million yen, depreciation and amortization of 21,831
million yen, and a decrease in trade and other receivables of 6,028 million yen, among
other cash inflows, and income taxes paid of 20,469 million yen and a decrease in accrued
bonus of 8,751 million yen, among other cash outflows.

-8-(Cash flow from investing activities)
Capital used as a result of investing activities was 14,263 million yen (as compared to
18,339 million yen used in the same period of the previous fiscal year). This was mainly
due to spending of 8,848 million yen on the purchase of intangible assets.
(Cash flow from financing activities)
Capital used as a result of financing activities was 37,562 million yen (as compared to 10,211
million yen used in the same period of the previous fiscal year). This was mainly caused by
repayments of short-term borrowings of 156,722 million yen, dividends paid of 18,909 million
yen and repayments of lease liabilities of 12,447 million yen, partially offset by proceeds fromshort-term borrowings of 160,878 million yen.

-9-

Condensed Consolidated Financial Statements(1) Condensed Consolidated Balance Sheet(In millions of yen)
Date ofTransition(April 1, 2022)

As ofMarch 31,
2023

As of
December 31,
2023

AssetsCurrent assets
Cash and cash equivalents

95,933

101,233

100,278

Trade and other receivables

158,857

162,853

161,875

Contract assets

19,07723,53324,980

Other financial assets

94

78

139

Other current assets

8,032

13,74813,408

Total current assets

281,995

301,445

300,680

320

309

320
4,611

Non-current assets
Trade and other receivables
Contract assets

4,230

3,937

Property, plant and equipment

9,989

9,229

9,208

Right-of-use assets

28,39928,16832,456

Goodwill

63,941

58,46560,714

Intangible assets

35,76235,25038,945Investments accounted for using equity

2,771

4,729

4,691

Other financial assets

22,17523,464

26,889Deferred tax assets

23,588method18,46023,410

Other non-current assets

204

317

561

Total non-current assets

186,255

187,283

201,988468,251

488,728

502,669

Total assets- 10 -

(Condensed Consolidated Balance Sheet)(In millions of yen)
Date ofTransition(April 1, 2022)

As ofMarch 31,
2023

As of
December 31,
2023

Liabilities and equity
Liabilities
Current liabilities
Trade and other payables

87,103

93,68896,179Bonds and borrowings

14,96821,17426,062

Lease liabilities

13,63014,005

14,205

Other financial liabilities
Income taxes payable
Provisions

836

989

854

10,745

10,535

4,458

787

1,588

977

Contract liabilities

4,951

6,596

7,048

Other current liabilities

92,854

100,972

103,607

Total current liabilities

225,877

249,552

253,395

Bonds and borrowings

40,00030,11720,000

Lease liabilities

12,622

12,813

17,043

737

809

908

Provisions

4,492

4,660

4,945

Deferred tax liabilities

3,919

4,394

4,783

Other non-current liabilities

3,126

2,850

2,905

Total non-current liabilities

64,89955,64750,585

290,777

305,199

303,981

Share capital

17,47917,47917,479

Capital surplus

12,11012,272

4,193

Retained earnings

141,880

154,926

161,219

Treasury shares-10,351-19,459-9,625

4,290

4,452

10,459165,409

169,670

183,726

Non-current liabilities

Other financial liabilities

Total liabilities
EquityOther components of equity
Total equity attributable to owners of parent
Non-controlling interests

12,064

13,85914,961

Total equity

177,474

183,529

198,688468,251

488,728

502,669

Total liabilities and equity- 11 -

(2) Condensed Consolidated Income Statements and Condensed Comprehensive Income
Statement(Condensed Consolidated Income Statement)(In millions of yen)
Nine months ended December 31,
2022

2023

Revenue

924,042990,627

Cost of sales-711,843-766,268

Gross profit

212,199

224,359

Selling, general and administrative expenses-160,259-184,142

Other income

206

991

Other expenses-9,191-286

Operating profit

42,95540,921

Finance income

311

738

Finance costs-991-1,026

Share of profit of investments accounted for

-273

-311

using equity method
Profit before tax

42,00140,322

Income tax expense-16,596-13,794

Profit25,405

26,528

Owners of parent

23,812

25,209Non-controlling interests

1,593

1,318

Profit25,405

26,528

Basic earnings per share

10.38

11.12

Diluted earnings per share

10.33

11.05

Profit attributable toEarnings per share (Unit: yen)

- 12 -

(Condensed Consolidated Income Statement)(In millions of yen)Three months ended December 31,
2022
2023
Revenue

316,786

335,740

Cost of sales-243,818-260,026

Gross profit

72,96875,714

Selling, general and administrative expenses-55,185-61,555

56

421

Other income
Other expenses-8,975-37

Operating profit

8,863

14,542Finance income

57

298

Finance costs

-574

-322

Share of profit of investments accounted for

-337

-179

Profit before tax

8,009

14,339

Income tax expense-5,604-5,389Profit

2,404

8,949

1,786

8,441

618

508

2,404

8,949

Basic earnings per share

0.80

3.71

Diluted earnings per share

0.79

3.69

using equity method

Profit attributable to
Owners of parent
Non-controlling interests
ProfitEarnings per share (Unit: yen)

- 13 -

(Condensed Consolidated Comprehensive Income Statement)(In millions of yen)
Nine months ended December 31,
2022
2023
Profit25,405

26,528-153

423

Other comprehensive income
Items that will not be reclassified to profit or
loss
Financial assets measured at fair value
through other comprehensive income
Remeasurements of defined benefit plans

33

-75

Total of items that will not be reclassified to

-120

348

3

－

-356

5,422

107

273

-245

5,695

profit or loss
Items that may be reclassified to profit or loss
Cash flow hedges
Exchange differences on translation of foreign
operations
Share of other comprehensive income ofinvestments accounted for using equity
methodTotal of items that may be reclassified to profit
or loss
Other comprehensive income, net of tax

-365

6,044

25,03932,572

Owners of parent

23,424

31,227

Non-controlling interests

1,614

1,344

Comprehensive income

25,03932,572Comprehensive income
Comprehensive income attributable to- 14 -

(Condensed Consolidated Comprehensive Income Statement)(In millions of yen)Three months ended December 31,
2022
2023
Profit

2,404

8,949

150

-77

Other comprehensive income
Items that will not be reclassified to profit or
loss
Financial assets measured at fair value
through other comprehensive income
Remeasurements of defined benefit plans

30

2Total of items that will not be reclassified to

180

-75

-13

－

-3,397

-51

-137

-37

-3,548-88

profit or loss
Items that may be reclassified to profit or loss
Cash flow hedges
Exchange differences on translation of foreign
operations
Share of other comprehensive income ofinvestments accounted for using equity
methodTotal of items that may be reclassified to profit
or loss
Other comprehensive income, net of tax
Comprehensive income-3,368

-163

-963

8,786

Comprehensive income attributable to
Owners of parent-1,565

8,290

Non-controlling interests

602

496

Comprehensive income

-963

8,786

- 15 -

（３）Condensed Consolidated Statement of Changes in Equity
Nine months ended December 31, 2022

(In millions of yen)

Balance at beginning of period
ProfitOther comprehensive income
Comprehensive income
Purchase of treasury shares
Disposal of treasury shares
Dividends
Share-based payment transactions
Increase (decrease) by business combination
Changes in ownership interestin subsidiaries
Loss of control of subsidiaries
Transfer from other components of equity toretained earnings
Other
Total transactions with owners
Balance at end of period

Balance at beginning of period
ProfitOther comprehensive income
Comprehensive income
Purchase of treasury shares
Disposal of treasury shares
Dividends
Share-based payment transactions
Increase (decrease) by business combination
Changes in ownership interestin subsidiaries
Loss of control of subsidiaries
Transfer from other components of equity toretained earnings
Other
Total transactions with owners
Balance at end of period

Equity attributable to owners of parent
Retained
Treasury
earnings
sharesOther components of equity
Exchange
Cash flow
differences onhedgestranslation offoreign
operations

Share capital

Capital surplus

17,479
－
－
－
－
－
－
－
－
－

12,110
－
－
－
－
-826
－
853
－
-81

141,880
23,812－
23,812－－-9,909－－－-10,351－－－-6,097
884
－
－
－
－

－
－
-270
-270
－
－
－
－
－
－

-3
－
3
3
－
－
－
－
－
－

－
－

－
－

－
193

－
－

－
－

－
－

－
－
17,479－-54
12,055－-9,715
155,976－-5,213-15,564

－
－
-270

－
－
－

Equity attributable to owners of parent
Other components of equity
Financial
Remeasureme
Total
assetsnts of definedmeasured at
benefit plans
fair value
through othercomprehensiv
e income
4,309
-16
4,290
－
－
－
-153
33
-387
-153
33
-387
－
－
－
－
－
－
－
－
－
－
－
－
－
－
－
－
－
－

Noncontrollinginterests

Total

Total

165,40923,812-387
23,424-6,09757-9,909853－-81

12,064
1,593
21
1,614
－
－
-248
－
-10
0

177,474
25,405-365
25,039-6,09757-10,158
853
-10
-80

－
-193

－
－

－
-193

－
－

8
－

8
－

－
-193
3,962

－
－
17

－
-193
3,709

－
-15,177
173,656－-250
13,428－-15,427
187,085- 16 -

Nine months ended December 31, 2023

(In millions of yen)
Equity attributable to owners of parent

Share capital

Balance at beginning of period

Capital surplus

Retainedearnings

Other components of equity

TreasurysharesExchangedifferences ontranslation offoreign
operations

Cash flow
hedges17,47912,272

154,926-19,459

150－

Profit－－25,209－－－Other comprehensive income

－

－

－

－

5668

－

－

－

25,209－5668－

Purchase of treasury shares

－

－

－

-0

－

－

Disposal of treasury shares－-1,915

－

2306

－

－

Cancellation of treasury shares－-7,528

－

7528

－

－

Dividends－－-18,927－－－

Share-based payment transactions

－

1473

－

－

－

－

Increase (decrease) by business combination

－

－

－

－

－

－

Changes in ownership interestin subsidiaries
Loss of control of subsidiaries

－

-107

－

－

－

－

－

－

－

－

－

－

Transfer from other components of equity toretained earnings
Other

－

－

10

－

－

－

Comprehensive income

Total transactions with owners
Balance at end of period

－

-0

－

－

－

－

－

-8,078-18,917

9,834

－

－

17,4794,193

161,219-9,6255819－

Equity attributable to owners of parent
Other components of equity

Noncontrollinginterests

Total

Total

Financialassetsmeasured atfair value
through othercomprehensiv
e income
4,287

Remeasureme
nts of defined
benefit plans

14

4,452

169,670

13,859183,529－－－

25,2091,318

26,528

423

-75

6017

6017

26

6044

423

-75

6017

31,227

1,344

32,572

Purchase of treasury shares

－

－

－

-0

－

-0

Disposal of treasury shares

－

－

－

390

－

390

Cancellation of treasury shares

－

－

－

－

－

－

Dividends－－－-18,927-242-19,169

Share-based payment transactions

－

－

－

1473

－

1473

Increase (decrease) by business combination

－

－

－

－

－

－

Changes in ownership interestin subsidiaries
Loss of control of subsidiaries

－

－

－

-107

11

-96

Balance at beginning of period
ProfitOther comprehensive income
Comprehensive income

Transfer from other components of equity toretained earnings
Other
Total transactions with owners
Balance at end of period

Total

－

－

－

－

-10

-10

-10

－

-10

－

－

－

－

－

－

-0

－

-0

-10

－

-10

-17,171-242-17,413

4,700

-60

10,459183,726

14,961

198,688- 17 -

（4）Condensed Quarterly Consolidated Statements of Cash Flows(In millions of yen)

Nine months ended
December 31, 2022

Nine months ended
December 31, 2023

Cash flows from operating activities
Profit before tax

42,00140,322
21,831

Depreciation and amortization

22,561

Impairment losses (reversal of impairment losses)

8,994

－

Decrease (increase) in trade and other receivables

5,020

6,028

Increase (decrease) in trade and other payables

1,161

-733

Decrease (increase) in contract assets-4,941-401-69-1,260Decrease (increase) in prepaid expenses
Increase (decrease) in accrued consumption taxes

4,419

4,313

Increase (Decrease) in accrued bonus-7,807-8,751

Increase (Decrease) in accrued paid vacation

2,202

2,466

Other

6,971

6,629

Subtotal

80,51470,444

Interest and dividends received

274

482

Interest paid

-530

-682

Income taxes refund (paid)-24,768-20,469

Net cash provided by (used in) operating activities

55,49049,774Purchase of property, plant and equipment-2,682-2,469Purchase of intangible assets-7,083-8,848Purchase of shares of subsidiaries and associates-1,301－

Purchase of investments-2,616-762

Purchase of shares of subsidiaries resulting in-3,321-674-1,535－

Cash flows from investing activities

change in scope of consolidation
Payments for acquisition of businesses
Other
Net cash provided by (used in) investing activities

200-1,508-18,339-14,263

Cash flows from financing activities
Proceeds from short-term borrowings

49,797

160,878

Repayments of short-term borrowings-14,190-156,722

Repayments of long-term borrowings-15,504-186

Repayments of lease liabilities-12,075-12,447－-10,000

Redemption of bonds
Purchase of treasury shares-6,098-0

Dividends paid

-9,900-18,909

Other-2,240-174

Net cash provided by (used in) financing activities-10,211-37,562

671

1,096

27,610-955

Cash and cash equivalents at beginning of period

95,933

101,233

Cash and cash equivalents

123,543

100,278

Effect of exchange rate changes on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents- 18 -

（５）Notes to the Condensed Quarterly Consolidated Financial Statements
Notes on Going Concern Assumption
Not applicable.

- 19 -

Segment Information(1) Overview of reportable segments
The reportable segments are constituent parts of the Group for each of which separate
financial information is available. The Board regularly reviews operations in each reportablesegment to evaluate performance and determine the distribution of management resources.
The Group changed its management structure on April 1, 2023. Aiming to enhance its ability
to formulate and pursue strategies, clarify responsibilities, make agile management decisions in
response to rapidly changing business environments, and achieve further growth. To this end,
the Group has five reportable segments: Staffing, BPO, Technology, Career and Asia Pacific.
The segment information for the nine months and three months ended December 31, 2022 isprepared based on the new reportable segments.
(2) Information of reportable segments
Profit in reportable segments is adjusted EBITDA (operating profit + depreciation (excluding
rent and other equivalents from depreciation of right-of-use assets) ± increase/decrease inaccrued paid leave + share-based payment expenses ± other revenues and expenses ±nonrecuring profit/loss).
Intersegment revenues are based on prevailing market prices.
For nine months ended December 31, 2022
(Millions of yen)
Reportable Segment
Staffing

BPO

TechnologyCareer

Other

Asia
Pacific

Total

*1

Total

Adjustme Consolida
nts*2
ted

Revenue
Revenue fromexternalcustomers
Intersegment
revenue
Total
Segment profit(loss)

400,361

83,30660,65773,352

290,748

908,426

15,610924,0365

924,042

4,883

4,535

5,519

1,714

1

16,653

8,335

24,988-24,988－405,245

87,841

66,17675,066

290,749

925,080

23,945

949,025-24,983

924,042

23,607

14,2305,016

15,317

7,835

66,008-338

65,670-660

65,009Depreciation (excluding rent and other equivalents from depreciation of right-of-use assets)

10,422

Increase/decrease in accrued paid leave

2,367

Share-based payment expenses

852

Other income

206

Other expenses

9,191

Other non-recurring profit/loss

573

Operating profit

42,955

Share of profit (loss) of investments accounted for using equity method-273

Finance income

311

Finance costs

991

Profit before tax

42,001- 20 -

For nine months ended December 31, 2023
(Millions of yen)
Reportable Segment
Staffing

BPO

TechnologyCareer

Other

Asia
Pacific

Total

Adjustme Consolida
nts*2
ted

Total

*1

Revenue
Revenue fromexternalcustomers
Intersegment
revenue
Total
Segment profit(loss)

428,786

76,78367,772

92,745308,363974,452

16,172

990,6243

990,627

4,331

4,923

7,840

1,550

－

18,644

9,836

28,481-28,481－433,11781,70675,613

94,296308,363

993,097

26,0081,019,106-28,478

990,627

23,873

6,014

4,896

17,4597,565

59,810-701

59,108-5,66453,443

Depreciation (excluding rent and other equivalents from depreciation of right-of-use assets)

9,115

Increase/decrease in accrued paid leave

2,467

Share-based payment expenses

1,644

Other income

991

Other expenses

286－

Other non-recurring profit/loss

40,921

Operating profit
Share of profit (loss) of investments accounted for using equity method-311

Finance income

738

Finance costs

1,026

Profit before tax

40,322(Notes)1. Other is a business segment that includes operations that are not included in reportable segments, including operations related to theentire Group, education and training, operations related to persons with disabilities, operations related to facility management, theprovision of digital solution services for hiring talents and managing human resources, and the creation of new businesses throughincubation programs.

2. Adjustments are as follows:(Segment profit (loss))(In millions of yen)
Nine months
ended December 31, 2022
Elimination of inter-segment

Nine months
ended December 31, 2023

-1,098-1,521

Corporate revenue*1

9,699

7,389

Corporate expenses*2-9,261-11,532

Total

-660

-5,664transactions*1 Corporate revenue is mostly business management fees and dividend income from Group companies.
*2 Corporate expenses are mostly expenses related to Group management at the Company- 21 -

For three months ended December 31, 2022
(Millions of yen)
Reportable Segment
Staffing

BPO

TechnologyCareer

Other

Asia
Pacific

Total

*1

Total

Adjustme Consolida
nts*2
ted

Revenue
Revenue fromexternalcustomers
Intersegment
revenue
Total
Segment profit(loss)

136,621

29,15420,96325,462

99,099311,301

5,483

316,7842

316,786

1,814

1,622

1,953

533

0

5,925

3,368

9,293

-9,293－

138,436

30,777

22,91625,99699,099317,226

8,851

326,077-9,291

316,786

6,614

5,396

1,737

4,575

3,196

21,520564

22,085-360

21,724

Depreciation (excluding rent and other equivalents from depreciation of right-of-use assets)

3,446

Increase/decrease in accrued paid leave

783

Share-based payment expenses

285

Other income

56

Other expenses

8,975

Other non-recurring profit/loss

573

Operating profit

8,863

Share of profit (loss) of investments accounted for using equity method-337

Finance income

57

Finance costs

574

Profit before tax

8,009- 22 -

For three months ended December 31, 2023
(Millions of yen)
Reportable Segment
Staffing

BPO

TechnologyCareer

Other

Asia
Pacific

Total

Adjustme Consolida
nts*2
ted

Total

*1

Revenue
Revenue fromexternalcustomers
Intersegment
revenue
Total
Segment profit(loss)

145,137

25,86623,50630,424105,139

330,075

5,664

335,7391

335,740

1,520

1,702

2,691

483

－

6,397

3,794

10,191-10,191－

146,658

27,56926,19730,907105,139

336,472

9,458

345,930-10,190335,740

7,942

2,284

2,182

5,565

2,218

20,194234

20,428-2,024

18,404

Depreciation (excluding rent and other equivalents from depreciation of right-of-use assets)

3,036

Increase/decrease in accrued paid leave

676

Share-based payment expenses

531

Other income

421

Other expenses

37

Other non-recurring profit/loss－

Operating profit

14,542

Share of profit (loss) of investments accounted for using equity method-179

Finance income

298

Finance costs

322

Profit before tax

14,339(Notes)1. Other is a business segment that includes operations that are not included in reportable segments, including operations related to theentire Group, education and training, operations related to persons with disabilities, operations related to facility management, theprovision of digital solution services for hiring talents and managing human resources, and the creation of new businesses throughincubation programs.

2. Adjustments are as follows:(Segment profit (loss))(In millions of yen)Three months
ended December 31, 2022
Elimination of inter-segment

Three months
ended December 31, 2023

-266

-23

Corporate revenue*1

3,256

2,483

Corporate expenses*2-3,350-4,484

Total

-360

-2,024transactions*1 Corporate revenue is mostly business management fees and dividend income from Group companies.
*2 Corporate expenses are mostly expenses related to Group management at the Company- 23 -

(Earnings per Share)

Basic earnings per share and diluted earnings per share are as follows:(First nine-month period)
Nine months ended
December 31, 2022

Nine months ended
December 31, 2023

23,812

25,209－－23,812

25,2092,294,578

2,266,570

10,544

14,0742,305,122

2,280,645

Basic earnings per share (yen)

10.38

11.12

Diluted earnings per share (yen)

10.33

11.05

Profit attributable to owners of parent (million yen)
Adjustment to profit for the period (million yen)
Profit used to calculate diluted earnings per share(million yen)
Weighted average number of common shares(thousand shares)
Increase in number of common shares
Share-based compensation (thousand shares)
Weighted average number of common shares after
dilution (thousand shares)(Three months period)
Three months ended
December 31, 2022

Three months ended
December, 2023

1,786

8,441

－

－

1,786

8,441

2,288,194

2,269,653

12,3587,317

2,300,553

2,276,971

Basic earnings per share (yen)

0.80

3.71

Diluted earnings per share (yen)

0.79

3.69

Profit attributable to owners of parent (million yen)
Adjustment to profit for the period (million yen)
Profit used to calculate diluted earnings per share(million yen)
Weighted average number of common shares(thousand shares)
Increase in number of common shares
Share-based compensation (thousand shares)
Weighted average number of diluted ordinary
shares (thousand shares)

Note:
As of October 1, 2023, the Company conducted a 10-for-1 stock split of shares of common stock. As a result, basic earnings per shareand diluted earnings per share are calculated on the assumption that the stock split was conducted at the beginning of the previous fiscalyear.

- 24 -

(Subsequent Events)

Not applicable.
(First-time Adoption)

The Group is disclosing quarterly consolidated financial statements complying withIFRS from the first quarter of this fiscal year under review. The most recent consolidated
financial statements prepared under Japanese GAAP are those for the fiscal year ended
March 31, 2023. The date of transition to IFRS is April 1, 2022.
(1) Exemptions set out in IFRS 1
In principle, an entity that applies IFRS for the first time (hereinafter “First-time
Adopter”) is requested to retrospectively apply IFRS. However, IFRS 1 - First-time
Adoption of International Financial Reporting Standards (hereinafter “IFRS 1”) sets out
standards to which exemptions have to be applied mandatorily and standards to which
exemptions are applied optionally. The effects of the applied exemptions are adjusted
by retained earnings or other components of equity on the date of transition to IFRS.
When the Group moved from Japanese GAAP to IFRS, it applied the following
exemptions:- Business combination
The First-time Adopter is allowed to choose not to retrospectively apply IFRS 3
Business Combinations (hereinafter “IFRS 3”) to business combinations before the dateof transition to IFRS. The Group has applied the exemption and has chosen not toretrospectively apply IFRS 3 to business combinations before the date of transition. As aresult, goodwill that resulted from business combinations before the date of transition isbased on the book value on the date of transition under Japanese GAAP.
The Group conducted an impairment test related to goodwill on the date of transition
regardless of the existence of signs of impairment.

- Exchange differences on translation of foreign operations
IFRS 1 allows entities to choose to deem cumulative translation differences for foreign
operations as of the date of transition to IFRS to be zero. The Group has chosen to deem
cumulative translation differences for foreign operations to be zero as of the date oftransition.

- Share-based payment transactions
The Group has chosen not to apply IFRS 2 of Share-based payment transactions tostock compensation that was vested before the date of transition.

- LeaseIFRS 1 permits a first-time adopter to assess whether a contract contains a lease
based on the facts and circumstances that exist at the date of transition to IFRSs.
Applying this exemption, the Group has assessed whether the contract contains a leaseon the basis of the facts and circumstances existing at that date.

25

- Decommissioning liabilities included in the cost of property, plant and equipment
Regarding decommissioning liabilities included in the cost of property, plant andequipment, IFRS 1 permits an entity to select either to retrospectively
apply IFRSs requirements for the period back to the time when the liability first arose or
to measure the liability as at the date of transition to IFRSs. The Group has chosen tomeasure the decommissioning liabilities included in the cost of property, plant andequipment as at the date of transition to IFRSs.

- Designation of previously recognized financial instruments
Regarding the classification under IFRS 9 Financial Instruments (hereafter, "IFRS 9"),IFRS 1 permits an entity to make a judgment on the basis of the facts andcircumstances that exist at the date of transition to IFRSs, instead of facts andcircumstances at the time of initial recognition. IFRS 1 also permits an entity todesignate an equity instrument as a financial asset to be measured at fair value throughother comprehensive income, on the basis of the facts and circumstances that exist at
the date of transition to IFRSs.
Regarding the classification under IFRS 9, the Group has made judgments on the basisof the facts and circumstances that existed at the date of transition to IFRSs anddesignated some of its equity instruments as financial assets to be measured at fairvalue through other comprehensive income.

(2) Mandatory exceptions under IFRS 1IFRS 1 prohibits retrospective application of IFRSs in relation to estimates,
derecognition of financial assets and financial liabilities, hedge accounting, noncontrolling interests, classification and measurement of financial products, etc. The
Group applies IFRSs on these topics prospectively from the date of transition to IFRSs.

26

(3) Reconciliations
Reconciliations that are required to be disclosed in the first-time adoption of IFRS areas follows.
The "Impact of change of the fiscal year end" among the reconciliations shows theimpact of unifying the reporting period of subsidiaries and affiliates whose fiscal year
end differed from the Company's. Among the other reconciliations, items which do nothave an impact on retained earnings and comprehensive income are presented in"Reclassification" and those that do have an impact on retained earnings andcomprehensive income are presented in "Recognition and measurement differences."
Reconciliations of equity as of transition date (April 1, 2022)(In millions of yen)
Presectation under Japanese GAAP

Japanese
GAAP

Impact of change inaccounting period

Reclassification

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Contarct assets
Work in process

Million of Yen

Million of Yen

Million of Yen

Other
Allowance for doubtful accounts
Total current assets
Non-current assets

Property, plant and equipment
Intangible assets

Investment securities
Deferred tax assets
Other
Allowance for doubtful accounts
Total non-current assets
Total assets
Liabilities
Current liabilities
Short-term borrowings
Current portion of long-termborrowings
Accounts payable - trade
Accounts payable - other
Income taxes payable
Other provisions
Accrued consumption taxes
Provision for bonuses
Provision for bonuses for directors(and other officers)
Other
Total current liabilities
Non-current liabilities
Bonds payable
Long-term borrowings
Lease liabilities
Asset retirement obligation
Deferred tax liabilities
Retirement benefit liability
Provision for share awards
Provision for share awards for
directors (and other officers)
Other provisions
Other
Total non-current liabilities
Total liabilities
Net assets
Share capital
Capital surplus
Retained earnings
Treasury shares
Total accumulated othercomprehensive income

Share acquisition rights
Non-controlling interests
Total net assets
Total liabilities and net assets

Differences inrecognition andmeasurement
Million of Yen

107,545
150,173
18,658333－
10,740-554
286,897-11,524
7,390
4,649
－
－
20
1
537

-88
1,294
-4,230-333
94-1,519552-4,230－－－－－-1,208－-1,208－－13,414－
95,129
－
－

－
－
254
－
3,112
－
－

308
4,230
-4,8204,820-34,300
34,300
2,771

12
－
1,140
23,579
－
1,462
－

8,664
10,324
12,208-1,527138,213425,110

126
10
199
-153
3,549
4,087

7,432
－
-12,193
1,681
4,230
－

5,951
8,125
-9
－
40,26139,052

162
11,304824
2,694

13,998-13,998

-16
－

－
630
81,813－
11,211
714－
17,432
17,847
71

－
-45
6,649
－
-465
73
－
0
-497
-45

1,608
86,587-88,462
815
－
－
4,951
-17,431-17,350-25

26,706
167,893928
10,115

10,00030,000
1,997
－
4,430
3,039
414
810
835

IFRS

Notes

Million of Yen

Presentation under IFRS

AssetsCurrent assets
Cash and cash equivalents
Trade and other receivables
Contract assets

95,933
158,857
19,077－
94
8,032－
281,995

1
3,4

12,021
-68
－
21
－
－
－
－
－
－

13,63087,103－836
10,745
787
4,951
－
－
－

9,17
9
8
8,9

29,307－35,91147,868

－
－
-16
－
60
1,111
24
1
0

30,000-30,000
－
9
1
－
-439
-811
-836

－
－
10,642
727
－
-231
－
－
－

92,854 8,9,18 Other current liabilities
225,877
Total current liabilities
Non-current liabilities
40,000Bonds and borrowings－
12,622
17
Lease liabilities
Other financial liabilities
737 8,11
4,492
10
Provisions
3,919
12
Deferred tax liabilities
－
11
－
11
－
11

81
1,239
52,850220,7430
431,225
11,340

-81
2,157
－
－

－
-313
10,82458,693－
3,126
64,899290,777

17,47919,168158,282-10,351-1,530－-5,974
-918
－
7,609

－
0
－
－
－

－
-1,083-15,483－-1,78817,47912,110141,880-10,351
4,290

183,048716

0-18,356

165,4090
21,317204,367
425,110－-7,969-7,252
4,087

0
－
－
－

－
-1,283-19,640
39,052－
12,064
177,474
468,251

27

2
1,3
2
4

Other financial assets
Other current assets

Total current assets
Non-current assets
Trade and other receivables
320
4,6
4,230
Contract assets
9,989
Property, plant and equipment
28,39917
Right-of-use assets
63,941
15
Goodwill
35,762
14
Intangible assets
2,771
5
Investments accounted for using
equity method
22,175 5,6,16 Other financial assets
18,460
12
Deferred tax assets
204
6
Other non-current assets－
4
186,255
Total non-current assets
468,251
Total assets
Liabilities and equity
Liabilities
Current liabilities
14,968
7
Bonds and borrowings
－
7

9
9
9

11
11,18

16,19
13,16

Lease liabilities
Trade and other payables
Other financial liabilities
Income taxes payable
Provisions
Contract liabilities

Other non-current liabilities
Total non-current liabilities
Total liabilities
EquityShare capital
Capital surplus
Retained earnings
Treasury shares
Other components of equity
Total equity attributable to owners ofparentNon-controlling interests
Total equity
Total liabilities and equity

Reconciliations of equity as of transition date (December 31, 2022)(In millions of yen)
Presectation under Japanese GAAP

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Contarct assets
Work in process
Other
Allowance for doubtful accounts
Total current assets
Non-current assets

Property, plant and equipment
Intangible assets

Investment securities
Deferred tax assets
Other
Allowance for doubtful accounts
Total non-current assets
Total assets
Liabilities
Current liabilities
Short-term borrowings
Current portion of bonds payable
Current portion of long-termborrowings
Accounts payable - trade
Accounts payable - other
Income taxes payable
Other provisions
Accrued consumption taxes
Provision for bonuses
Provision for bonuses for directors(and other officers)
Other
Total current liabilities
Non-current liabilities
Bonds payable
Long-term borrowings
Lease liabilities
Asset retirement obligation
Deferred tax liabilities
Retirement benefit liability
Provision for share awards
Provision for share awards for
directors (and other officers)
Other provisions
Other
Total non-current liabilities
Total liabilities
Net assets
Share capital
Capital surplus
Retained earnings
Treasury shares
Total accumulated othercomprehensive income

Share acquisition rights
Non-controlling interests
Total net assets
Total liabilities and net assets

Japanese
GAAP

Impact of change inaccounting period

Reclassification

Differences inrecognition andmeasurement

IFRS

Notes

Presentation under IFRS

AssetsCurrent assets
Cash and cash equivalents
Trade and other receivables
Contract assets

120,056
157,354
26,412
1,123－
15,271-587
319,632

3,562-5,771
1,400
－
－
531
9
-267

-75
2,781
-3,935-1,123
1,974-4,134577-3,935－－－－－-1,555－-1,555

123,543
154,365
23,876－
1,974
10,113－313,872

1
3,4－－
15,672－
101,193
－
－

－
－
-594
－
-11,276
－
－

316
3,935
-6,0986,098-36,286
36,286
4,735

－
－
662
22,369
4,897
1,530
131

316
3,935
9,643
28,46758,52737,8164,867

4,612,5468,460
12,780-1,706
148,946468,579

-575
27
-165
82
-12,503-12,7715,614－-12,291
1,624
3,935
－

5,290
10,438-44－
45,27543,71925,202
10,000
7,817

11,158－-7,757

10,060-10,000
-60

－
－
－

－
564
93,250
－
6,417
806
－
22,095
9,165
151

－
4
-3,919
－
75
71
－
-176
249
18

1,952
87,958-89,330
512
－
－
6,005
-21,919-9,415-169

11,683
0
－
－
1,342
－
－
－
－
－

13,63588,527
－
512
7,835
878
6,005
－
－
－

9,17
8,9
8
8

32,281
207,754-955-1,22924,406－37,54450,569－30,190
3,666
－
4,538
4,171
512
1,016
1,027

－
-73
-243
－
-40
-123
-198
0
0

30,117-30,117
－
15
1
－
-314
-1,017-1,027

－
－
9,905
774
－
-363
－
－
－

93,277 8,9,18 Other current liabilities
257,094
Total current liabilities
Non-current liabilities
30,117
Bonds and borrowings－
13,328
17
Lease liabilities
790 8,11
Other financial liabilities
4,499
10
Provisions
3,685
12
Deferred tax liabilities
－
11
－
11
－
11

46
1,383
46,555
254,309－-23-702-1,932

-46
2,388
－
－

－
-822
9,494
60,063－
2,926
55,347
312,441

17,47913,468
175,471-15,564
8,731

－
-19
-7,977－-2,933

－
0
－
－
－

－
-1,393-11,5170-2,087

17,47912,055
155,976-15,564
3,709

199,586-10,930

0-14,999

173,656

0
14,682
214,269
468,579－
91-10,839-12,771

-0
－
－
－

－
-1,344-16,344
43,719－13,428187,085499,527

28

2
1,3
2
4

Other financial assets
Other current assets

Total current assets
Non-current assets
Trade and other receivables
Contract assets
Property, plant and equipment
17
Right-of-use assets
15
Goodwill
14
Intangible assets
Investments accounted for using
5
equity method
22,875 5,6,16
Other financial assets
18,926
12
Deferred tax assets
278
6
Other non-current assets－
4
185,654
Total non-current assets
499,527
Total assets
Liabilities and equity
Liabilities
Current liabilities
46,422
7
Bonds and borrowings
－
7
－
7

9
9
9

11
11,18

16,19
13,16

Lease liabilities
Trade and other payables
Other financial liabilities
Income taxes payable
Provisions
Contract liabilities

Other non-current liabilities
Total non-current liabilities
Total liabilities
EquityShare capital
Capital surplus
Retained earnings
Treasury shares
Other components of equity
Total equity attributable to ownersof parent
Non-controlling interests
Total equity
Total liabilities and equity

Reconciliations of equity as of transition date (March 31, 2023)(In millions of yen)
Presectation under Japanese GAAP

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Contarct assets
Work in process
Other
Allowance for doubtful accounts
Total current assets
Non-current assets

Property, plant and equipment
Intangible assets

Investment securities
Deferred tax assets
Other
Allowance for doubtful accounts
Total non-current assets
Total assets
Liabilities
Current liabilities
Short-term borrowings
Current portion of bonds payable
Current portion of long-term
Accounts payable - trade
Accounts payable - other
Income taxes payable
Other provisions
Accrued consumption taxes
Provision for bonuses
Provision for bonuses for directors
Other
Total current liabilities
Non-current liabilities
Bonds payable
Long-term borrowings
Lease liabilities
Asset retirement obligation
Deferred tax liabilities
Retirement benefit liability
Provision for share awards
Provision for share awards for
Other provisions
Other
Total non-current liabilities
Total liabilities
Net assets
Share capital
Capital surplus
Retained earnings
Treasury shares
Total accumulated othercomprehensive income

Share acquisition rights
Non-controlling interests
Total net assets
Total liabilities and net assets

Japanese
GAAP

Impact of change inaccounting period

Reclassification

Differences inrecognition andmeasurement

IFRS

1
3,4

Presentation under IFRS

AssetsCurrent assets
Cash and cash equivalents
Trade and other receivables
Contract assets

99,757
160,980
25,951384－
17,780-572
304,281

1,553
-9
1,519
－
－
-351
-53
2,658

-77
1,881
-3,937-384
78-2,124626-3,937－－－－－-1,556－-1,556－－
14,849－86,320－－12,05813,741
12,535-1,627
137,877
442,159

－
－
-319
－
-845
－
－
-121
33
-10
-2
-1,266
1,392

309
3,937
-5,803
5,803-33,632
33,632
4,542
5,681
－
-12,162
1,629
3,937
－

－
－
503
22,364
6,623
1,617
187
5,846
9,634
-44
－
46,73445,17711361
10,00060－
602
91,934－
11,4181535－
18,967
19,868129
29,541
195,421

-247
－
0
－
-15
3233
－
-883
52
－
-40
-866
91
1123
2,448

10,060-10,000-60
1,937
93,101-95,167
989
－
－
6,596
-18,927-19,001-221
30,693－－－－
12,068
0
－
－
－
－
－
－
－
－
39,614
51,682－
30,116
3,421
－
4,659
4,018
311
1085
1104
45
1,242
46,005
241,426

－
0
-175
－
1
348
22
0
0
－
24
223
2,671

30,117-30,117
－
15
－
－
-333
-1,086-1,104
-45
2,553
－
－

－
－
9,567
793
－
27
－
－
－
－
-969
9,418
61,10017,47913,455
168,890-19,459
5,150

－
-17
-2,481
－
1,141

－
0
－
－
－

－
-1,167-11,4810-1,840Total current assets
Non-current assets
309
4,6
Trade and other receivables
3,937
Contract assets
9,229
Property, plant and equipment
28,16817
Right-of-use assets
58,465
15
Goodwill
35,25014Intangible assets
4,729
5
Investments accounted for using
23,464 5,6,16
Other financial assets
23,410
12
Deferred tax assets
317
6
Other non-current assets－
4
187,283
Total non-current assets
488,728
Total assets
Liabilities and equity
Liabilities
Current liabilities
21,174
7
Bonds and borrowings－
7－
7
14,005 9,17
Lease liabilities
93,6888,9Trade and other payables
－
8
989
8
Other financial liabilities
10,535
Income taxes payable
1588
Provisions
6,596
Contract liabilities
－
9
－
9
－
9
100,972 8,9,18 Other current liabilities
249,552
Total current liabilities
Non-current liabilities
30,117
Bonds and borrowings－
12,813
17
Lease liabilities
809 8,11
Other financial liabilities
4,660
10
Provisions
4,394
12
Deferred tax liabilities
－
11
－
11
－
11
－
11
2,850 11,18
Other non-current liabilities
55,647
Total non-current liabilities
305,199
Total liabilities
Equity17,479
Share capital
12,272
Capital surplus
154,926 16,19
Retained earnings-19,459
Treasury shares
4,452 13,16
Other components of equity

185,517-1,3570-14,489

169,670

015,214
200,732
442,159－
77-1,279
1,392

-0
－
－
－

－
-1,433-15,923
45,177－
13,859183,529488,72829

101,233
162,853
23,533－78
13,748－301,445

Notes

2
1,3
2
4

Other financial assets
Other current assets

Total equity attributable to ownersof parent
Non-controlling interests
Total equity
Total liabilities and equity

Notes on reconciliation of capital(Reclassification)(1) Cash and deposits
Time deposits whose deposit term is more than three months, which were included
in cash and deposits under the Japanese GAAP, are presented by including themin "Other financial assets" under IFRS.

(2) Work in process"Work in process," which was listed separately under the Japanese GAAP, ispresented by including it in "Other current assets" under IFRS.

(3) Current assets (Other)
Other accounts receivable and advances paid, which were included in "Other"under "Current assets" under the Japanese GAAP, are presented by including themin "Trade and other receivables" under IFRS, and deposits paid, advance payments,and short-term loans receivable are presented by including them in "Other financial
assets" under current assets under IFRS.

(4) Allowance for doubtful accounts"Allowance for doubtful accounts," which was listed separately under "Current
assets" under the Japanese GAAP, has been reclassified under IFRS so that it ispresented as a net amount through direct deduction from "Trade and otherreceivables" under current assets. "Allowance for doubtful accounts" under"Investment and other assets" has also been reclassified to be presented as a net
amount through direct deduction from "Trade and other receivables" under noncurrent assets.

(5) Investment securities"Investments accounted for using equity method," which were included
in "Investment securities" under the Japanese GAAP, are listed separately under
IFRS while other securities are presented by including them in "Other financial
assets" under non-current assets.

(6) Investments and other assets (others)
Long-term accounts receivable, which were included in "Other" under investments
and other assets under the Japanese GAAP, are included in ”Trade and otherreceivables” under non-current assets under IFRS while long-term loans receivable,
etc. are presented by including them in "Other financial assets" under non-current
assets and long-term prepaid expense, etc. is presented by including it in "Other
non-current assets."(7) Bonds and borrowings

30

"Current portion of bonds payable" and "Current portion of long-term borrowings,"
which were listed separately under the Japanese GAAP, are reclassified as "Bonds
and borrowings" under current liabilities under IFRS.

(8) Accounts payable - other
Salaries payable, etc., which were included in "Accounts payable - other" under theJapanese GAAP, are presented by including them in "Trade and other payables" under
IFRS while accounts payable – facilities are presented by including them in "Other
financial liabilities" under current liabilities.

(9) Current liabilities (Other)
Lease liabilities, which were included in "Other" under current liabilities under theJapanese GAAP, are listed separately as current liabilities under IFRS.
Further, guarantee deposits received are included in "Trade and other payables"
under current liabilities, refund liability is included in "Other financial liabilities" undercurrent liabilities, and deposits received are included in "Other current liabilities.""Accrued consumption taxes," "Provision for bonuses," and "Provision for bonuses
for directors (and other officers)," which were listed separately under the Japanese
GAAP, are presented by including them in "Other current liabilities" under IFRS.

(10) Asset retirement obligations"Asset retirement obligations," which were listed separately as an item under noncurrent liabilities under the Japanese GAAP, are included in "Provisions" under noncurrent liabilities under IFRS.

(11) Non-current liabilities (Other)
Guarantee deposits received, which were included in "Other" under non-current
liabilities under the Japanese GAAP, are included in "Other financial liabilities" under
non-current liabilities under IFRS.
The provision for directors' retirement benefits, which was included in "Other
provisions" under non-current liabilities under the Japanese GAAP, and "Retirement
benefit liability," "Provision for share awards," and "Provision for share awards for
directors (and other officers)," which were listed separately under the Japanese
GAAP, are presented by including them in "Other non-current liabilities" under IFRS.

(Recognition and measurement differences)(12) Deferred tax assets and deferred tax liabilities
Reflecting the application of IFRS, the collectability of all deferred tax assets has
been reconsidered. Further, deferred tax assets and deferred tax liabilities have beenrecorded to reflect temporary differences that have arisen due to reconciliations
associated with the transition from Japanese GAAP to IFRS.

(13) Transfer of cumulative translation differences related to foreign subsidiaries

31

At the time of the initial adoption, the Company selected the exemption provided in
IFRS 1 and transferred all of the cumulative translation differences that existed at
the date of transition to retained earnings.

(14) Intangible assets with an indefinite useful life
Among intangible assets that were amortized under the Japanese GAAP, theamortization of those classified as intangible assets with an indefinite useful life
under IFRS has been cancelled retrospectively to the period back to the time ofacquisition.

(15) Goodwill
Under the Japanese GAAP, goodwill was to be amortized evenly over the periods inwhich the effects of the goodwill were expected to be produced. Under IFRS, goodwill
is not amortized.

(16) Financial assets measured at fair value through other comprehensive income
Impairment losses that were recognized in past fiscal years in relation to financial
assets measured at fair value through other comprehensive income have beentransferred from retained earnings to other components of equity. Further, whileunlisted shares without market prices and money invested were evaluated with thecost method under the Japanese GAAP, they are measured based on fair value under
IFRS.

(17）Lease
Under the Japanese GAAP, lessee's leases were classified into finance leases andoperating leases, and the method for regular lease transactions was applied to theaccounting for operating leases. Under IFRS, lessee's leases are not separated
into finance leases and operating leases, so "right-of-use assets" and "leaseliabilities" are recorded for all lease transactions, in principle.

(18) Accrued paid leave
Accrued paid leave, which was not recorded under the Japanese GAAP, is recorded
and presented by including it in "Other current liabilities" and "Other non-current
liabilities."32

(19) Reconciliation of retained earnings(In millions of yen)
Date of Transition(April 1, 2022)

As of

As of

December 31,

March 31,

2022

2023

Deferred tax assets and deferred
tax liabilities

9,828

9,910

11,133

Transfer of cumulative translationdifferences related to foreignsubsidiaries

5,090

5,090

5,090

Intangible assets with anindefinite useful life

2,354

2,490

2,536

－

4,952

6,675

1,402

1,430

1,465

47

-142

-206

-35,894-37,544-39,614

1,686

2,293

1,435

-15,483-11,517-11,481Goodwill
Financial assets measured at fairvalue through othercomprehensive income
Leasing
Accrued paid leave
Other
Total

33

Reconciliations of profits/losses and comprehensive income for the nine months ended
December 31, 2022
(In millions of yen)
Presectation under Japanese GAAP

902,067
692,787
209,279
163,845

Impact of thechange of fiscal
year end
21,976
18,397
3,578
1,739

－
－
45,4341176
725
45,886
281
246
－
－
－

－
－
1839
81
135
1785
-2
8494
－
－
－

45,921
14,6092444
28,866

Valuation difference on available-forsale securities
Retirement benefit adjustments

Deferred gains or losses on hedges
Foreign currency translation
adjustment
Share of other comprehensive incomeof entities accounted for using equity
methodTotal other comprehensive income
Comprehensive income

Net sales
Cost of sales
Gross profit
Selling, general and administrative
expenses

Operating profit
Non-operating income
Non-operating expenses
Ordinary profit
Extraordinary income
Extraordinary loss

Profit before income taxes
Income taxes - current
Income taxes - deferred
Net profit
Other comprehensive income

Japanese GAAP

Reclassification

－
-624
624
-562

Recognition andmeasurement
differences

IFRS

Notes

－
1283
-1,283-4,763924,042711,8434
212,199
160,259 2,3,4,6

206
8715
-7,322-1,258-860-47,671-278-8,741
520
858
-403

－
475
3,004
－
－
－
－
－
-208
133
130

206
9191
42,955
－
－
－
－
－
311
991
-273

-6,711
1019-525-7,206－
1919-1,919
－

2,792
-952
－
3,745

42,001
16,596－25,405

5
5

-64

－

－

-89

-153

4

－

－

－

33

33

6

－
10,395－-10,822

－
－

3
71

3
-356

7

417

-310

－

－

107

10,74839,614-11,131-18,338

－
－

3,763

-365
25,039

1
1
1
1
1
1
1
1,4
1

Presentation under IFRSRevenue
Cost of sales
Gross profit
Selling, general and administrative
expenses
Other income
Other expenses
Operating profit

Finance income
Finance costs
Share of loss (profit) of entities
accounted for using equity method
Profit before tax
Income tax expense
ProfitOther comprehensive income
Items that will not be reclassified to
profit or loss
Financial assets measured at fair value
through other comprehensive income
Remeasurements of defined benefit
plans
Items that may be reclassified to profit
or loss
Cash flow hedges
Exchange differences on translation offoreign operations
Share of other comprehensive incomeof investments accounted for using
equity method
Other comprehensive income, net of tax
Comprehensive income

Reconciliations of profits/losses and comprehensive income for the three months ended
December 31, 2022
(In millions of yen)
Presectation under Japanese GAAP

315,317
243,053
72,26357,545

Impact of thechange of fiscal
year end
1,469
570
899
-351

－
－
14,718264454
14,527
29
101
－
－
－

－
－
1,250
244
3
1,491
-14
8,494
－
－
－

56
8,475
-7,613-508-458-16,018-14-8,596
77
603
-391

－
499
508
－
－
－
－
－
-19
-29
54

56
8,975
8,863
－
－
－
－
－
57
574
-337

14,455
3,400
2,122
8,932

-7,018794-393-7,418－
1,728-1,728
－

571
-319
－
891

8,009
5,604
－
2,404

5
5

Valuation difference on available-forsale securities
Retirement benefit adjustments

134

－

－

16

150

4

－

－

－

30

30

6

Deferred gains or losses on hedges
Foreign currency translation
adjustment
Share of other comprehensive incomeof entities accounted for using equity
methodTotal other comprehensive income
Comprehensive income

－
666

－
-4,125

－
－

-13
62

-13
-3,397

7

275

-412

－

－

-137

1,077
10,009-4,540-11,958

－
－

95
986

-3,368-963

Net sales
Cost of sales
Gross profit
Selling, general and administrative
expenses

Operating profit
Non-operating income
Non-operating expenses
Ordinary profit
Extraordinary income
Extraordinary loss

Profit before income taxes
Income taxes - current
Income taxes - deferred
Net profit
Other comprehensive income

Japanese GAAP

Reclassification

－
-576
576
-229

34

Recognition andmeasurement
differences

IFRS

－
771
-771
-1,778

Notes

316,786
243,818
4
72,96855,185 2,3,4,6
1
1
1
1
1
1
1
1,4
1

Presentation under IFRSRevenue
Cost of sales
Gross profit
Selling, general and administrative
expenses
Other income
Other expenses
Operating profit

Finance income
Finance costs
Share of loss (profit) of entities
accounted for using equity method
Profit before tax
Income tax expense
ProfitOther comprehensive income
Items that will not be reclassified to
profit or loss
Financial assets measured at fair value
through other comprehensive income
Remeasurements of defined benefit
plans
Items that may be reclassified to profit
or loss
Cash flow hedges
Exchange differences on translation offoreign operations
Share of other comprehensive incomeof investments accounted for using
equity method
Other comprehensive income, net of tax
Comprehensive income

Reconciliations of profits/losses and comprehensive income for the fiscal year ended
March 31, 2023
(In millions of yen)
Presectation under Japanese GAAPNet sales
Cost of sales
Gross profit
Selling, general and administrative
expenses

Operating profit
Non-operating income
Non-operating expenses
Ordinary profit
Extraordinary income
Extraordinary loss

Profit before income taxes
Income taxes - current
Income taxes - deferred
Net Profit
Other comprehensive income

Japanese GAAP

Reclassification

Recognition andmeasurement
differences

IFRS

Notes

1,223,967
941,323
282,643
229,581

Impact of thechange of fiscal
year end
18,643
17,371
1,272
2,668

－
－
53,061
2,261
1,630
53,693290
13,267－－－－－-1,396-108
205-1,710
-26
212
－
－
－

262
13,388-11,573-2,152-1,835-51,982-263-13,479
598
1,235
-689

－
499
2,661
－
－
－
－
－
-28
334
183

262
13,88842,754
－
－
－
－
－
570
1,569
-505

40,716
20,121-2,241
22,835-1,950278-478-1,750－-2,719
2,719
－

2,482
-1,208－
3,691

41,24916,471－
24,777

－
-897
897
-655

－
2,953
-2,953-6,115

1,242,611
960,7514
281,859
225,479 2,3,4,6
1
1
1
1
1
1
1
1,4
1

5
5

Valuation difference on available-forsale securities
Retirement benefit adjustments

12

－

－

158

170

4

－

－

－

31

31

6

Deferred gains or losses on hedges
Foreign currency translation
adjustment
Share of other comprehensive incomeof entities accounted for using equity
methodTotal other comprehensive income
Comprehensive income

－
6,857

－
-6,947

－
－

3
67

3
-22

7

281

-79

－

－

201

7,151
29,987-7,027-8,776

－
－

260
3,951

384
25,161

35

Presentation under IFRSRevenue
Cost of sales
Gross profit
Selling, general and administrative
expenses
Other income
Other expenses
Operating profit

Finance income
Finance costs
Share of loss (profit) of entities
accounted for using equity method
Profit before tax
Income tax expense
Net Profit
Other comprehensive income
Items that will not be reclassified to
profit or loss
Financial assets measured at fair value
through other comprehensive income
Remeasurements of defined benefit
plans
Items that may be reclassified to profit
or loss
Cash flow hedges
Exchange differences on translation offoreign operations
Share of other comprehensive incomeof investments accounted for using
equity method
Other comprehensive income, net of tax
Comprehensive income

Notes on reconciliations of profits/losses and comprehensive income(1) Reconciliation of presented items
Of the items that were included in "non-operating income," "non-operating
expenses," "Extraordinary income," and "Extraordinary losses" under the Japanese
GAAP, finance-related items are recorded as "Finance income" or "Finance costs" under
IFRS, and the other items are reclassified as "Other income," "Other expenses," or"Share of profit of investments accounted for using equity method" under IFRS.

(2) Reconciliation of recorded amount of goodwill
Goodwill is amortized under the Japanese GAAP but not amortized under IFRS.
Accordingly, amortization of goodwill has been discontinued since the date oftransition.

(3）Unused paid leave
Unused paid leave, which was not recorded under the Japanese GAAP, is recognized
as personnel expenses under IFRS.

(4) Reconciliation of finance income and costs
Under the Japanese GAAP, (loss) gain on sale of investment securities or impairment
losses was profit or loss. Under IFRS, concerning equity instruments designated to bemeasured at fair value through other comprehensive income, fluctuation of fair value isrecognized as other comprehensive income and is transferred to retained earnings in
the case of derecognition. Further, while lease payments related to operating leases
were recorded in "Cost of sales" and "Selling, general and administrative expenses"
under the Japanese GAAP, IFRS requires recognition of lease liabilities for all leases, inprinciple, and interest costs are recorded in "Finance costs."(5) Income tax expense
Under the Japanese GAAP, "Income taxes - current" and "Income taxes - deferred"
were presented separately. Under IFRS, they are collectively presented as "Income tax
expense." In addition, reflecting the application of IFRS, collectability of all deferred
tax assets has been reconsidered.

(6) Remeasurements of defined benefit plans
Under the Japanese GAAP, actuarial gains/losses on retirement benefit obligations
and past service cost were recognized as other comprehensive income when suchgains/losses or cost were generated and collectively recorded as expenses for the fiscal
year when they were generated. Under IFRS, remeasurements of defined benefit plans
are recognized as other comprehensive income and past service cost is recognized as
profit or loss when it is generated.

36

(7) Exchange differences on translation of foreign operations
At the time of the initial adoption, the Company selected the exemption provided in
IFRS 1 and transferred all of the cumulative translation differences that existed at thedate of transition to retained earnings.

Reconciliation of cash flows
Under the Japanese GAAP, lease payments related to operating leases were classified
as cash flows from operating activities. IFRS requires recognition of lease liabilities for allleases, in principle, and expenditure for the repayment of lease liabilities is classified
as cash flows from financing activities.

37