The following information was originally prepared and published by the Company in Japanese as it contains timely disclosure materials to be submitted to the Tokyo Stock Exchange. This English
translation is for your convenience only. To the extent there is any discrepancy between this English translation and the original Japanese version, please refer to the Japanese version.

Summary of Financial Statements for the Fiscal Year Ended December 31, 2019
[IFRS] (Consolidated)
February 14, 2020
Broadleaf Co., Ltd.
Stock Listing: Tokyo Stock Exchange 1st Section
Representative: Kenji Oyama, Representative Director, President & CEO
Scheduled Date for Ordinary General Meeting of Shareholders: March 24, 2020
Scheduled Starting Date for Dividend Payment:
March 25, 2020
Scheduled Submission Date for Securities Report:
March 25, 2020
Earnings Supplementary Explanatory Documents:
Yes
Earnings Results Briefing:
Yes (For institutional investors and analysts)(Amounts are rounded off to the nearest million yen.)

1. Consolidated Financial Results for FY2019 (from January 1, 2019 to December 31, 2019)(1) Consolidated Results of Operations(Percentage below represents increase (decrease) from the same period of previous year)
Revenue

Operating profit

Millions of Yen

FY2019FY2018% Millions of Yen

22,586 6.1
21,285 17.0

% Millions of Yen

4,525 10.0
4,115 36.7

Profit attributable to Total comprehensive
owners of parent
incomeProfit% Millions of Yen

4,486 9.3
4,105 37.3

% Millions of Yen

3,093 16.5
2,656 37.4

Return on equity
attributable to ownersof the parent

Diluted earnings
per share

Basic earnings per share

FY2019FY2018

Profit before tax% Millions of Yen

3,093 16.5
2,656 37.4

Return on assets%

3,057 12.7
2,713 39.0
Operating margin

Yen

Yen

%

%

%

35.40
30.36

34.95
30.15

14.0
13.0

14.7
14.3

20.0
19.3

(Reference) Share of (profit) loss of entities accounted for using equity Method(Note)FY2019: -16 million yen
FY2018: -9 million yen
The Company conducted a 2-for-1 common stock split effective April 1, 2018. The basic earnings per share and the diluted earnings per share
for FY2018 are calculated on the assumption that the said stock split was implemented at the beginning of the previous fiscal year.

(2) Consolidated Financial Position
Total assets

Percentage of equity
attributable to ownersof parent

Equity attributable toowners of parent

Total equity

Equity attributable toowners of parent per
share

Millions of Yen

Millions of Yen

Millions of Yen%

Yen

31,68929,41323,22021,033

23,217
21,03373.3
71.5

265.56240.91

End of FY2019
End of FY2018(3) Cash Flow Status

Operating activities

Investing activities

Cash and cash equivalents
at end of period

Financing activities

Millions of Yen

Millions of Yen

Millions of Yen

Millions of Yen

3,762
4,566

-3,990-2,496-2,366-2,409

3,034
5,627

FY2019FY2018
2. Dividends

Dividends Per Share
End of Q1

FY2018FY2019FY2020 (Forecast)Year-end

Total

Total Dividends(Annual)Ratio of dividends
to equity attributableto owners of parent(Consolidated)

Dividend Payout
Ratio(Consolidated)

End of Q2

End of Q3

Yen

Yen

Yen

Yen

Yen

Millions of Yen

%

%

‒
‒
‒

5.50
6.50
6.60

‒
‒
‒

6.50
6.50
6.60

12.00
13.00
13.20

1,092
1,185

39.5
36.7
37.2

5.2
5.1

3. Earnings Forecast for FY2020 (from January 1, 2020 to December 31, 2020)(Percentages below represent increases (decreases) from the same period of the previous fiscal year.)
Profit attributable to
Basic earnings
Operating profit
Profit before tax
owners of parent
per share

Revenue

1st Half of FY2020
FY2020Millions of Yen%

Millions of Yen%

Millions of Yen%

Millions of Yen%

Yen

11,20022,700

1.2
0.5

2,000
4,600

-3.8
1.7

2,000
4,600

-3.6
2.6

1,300
3,100

-4.5
0.2

14.87
35.46

* Notes(1) Changes in significant subsidiaries during the fiscal year ended December 31, 2019 (changes of specified subsidiaries with changeof the scope of consolidation): No(2) Changes in accounting policies, changes in accounting estimates
1. Changes in accounting policies required by IFRS: Yes
2. Other changes in accounting policies: No
3. Changes in accounting estimates: No(Note) For details, see “3. Consolidated Financial Statements and Major Notes, (5) Notes regarding the consolidated financial
statements (Changes in accounting policies)” on page 11 of the attached material.
(3) Number of shares outstanding (common stock)
1. Number of shares outstanding (including
treasury stock)

FY201997,896,800

FY201897,896,800

2. Number of shares of treasury stock

FY201910,469,263

FY2018

10,588,336

3. Average number of shares outstanding
87,383,125
87,482,212
FY2019FY2018(during the period)(Note) The Company conducted a 2-for-1 common stock split effective April 1, 2018. The average number of shares for FY2018
is calculated on the assumption that the said stock split was implemented at the beginning of the previous fiscal year.
(Reference) Summary of nonconsolidated financial results
Nonconsolidated results of operations for FY2019 (from January 1, 2019 to December 31, 2019)(1) Nonconsolidated results of operations(Percentage below represents increase (decrease) from the same period of previous year)
Operating income
Ordinary income
Net income

Net sales
Millions of Yen%

Millions of Yen%

Millions of Yen%

Millions of Yen%

19,86019,013

4.5
10.4

3,416
3,498

-2.3
27.3

3,389
3,507

-3.3
27.8

2,322
2,023

14.8
36.8

FY2019FY2018

Earnings per share

FY2019FY2018(Note)

Diluted earnings per share
Yen

Yen

26.57
23.12

26.24
22.97

The Company conducted a 2-for-1 common stock split effective April 1, 2018. The earnings per share and the diluted earnings per share for
FY2018 are calculated on the assumption that the said stock split was implemented at the beginning of the previous fiscal year.

(2) Nonconsolidated financial position
Total assets

FY2019FY2018(Reference) Shareholders’ equity

Net assets

Shareholders’ equity ratio

Net assets per share

Millions of Yen

Millions of Yen%

Yen

24,85024,731

19,205
18,213

77.3
73.6

219.67208.60FY2019: 19,205 million yen

FY2018: 18,213 million yen* Summaries of financial statements are outside the scope of audit procedures by certified public accountants and audit firm.
* Comment regarding appropriate usage of earnings forecast, and other special notes(Note on forward-looking statements)
The forward-looking statements such as earnings forecasts contained in this document are based on the information currently available
to the Company and certain assumptions which are regarded as legitimate. The Company makes no warranty as to the achievability ofwhat is described in the statements. Actual results may differ from these forecasts due to various factors.
(Availability of earnings supplementary explanatory documents and information on earnings results briefings)
The Company will hold a results briefing for institutional investors and analysts on Monday, February 17, 2020.
The video of this results briefing will be posted on the Company’s website.

○Table of Contents of Attached Material
1. Overview of Results of Operations, Etc. .................................................................................................................................
(1) Overview of financial results in the fiscal year ended December 31, 2019 .....................................................................
(2) Overview of financial position in the fiscal year under review ........................................................................................
(3) Basic policy on profit distribution and dividends for FY2019 and FY2020 ....................................................................

2
2
2
3

2. Basic Policy on the Selection of Accounting Standards ..........................................................................................................

4

3. Consolidated Financial Statements and Major Notes ..............................................................................................................
(1) Consolidated statement of financial position ...................................................................................................................
(2) Consolidated statement of income and consolidated statement of comprehensive income ..............................................
Consolidated statement of income ...................................................................................................................................
Consolidated statement of comprehensive income ..........................................................................................................
(3) Consolidated statement of changes in equity ...................................................................................................................
(4) Consolidated statement of cash flows ..............................................................................................................................
(5) Notes regarding the consolidated financial statements ....................................................................................................
(Notes on going concern assumption) ..............................................................................................................................
(Changes in accounting policies) .....................................................................................................................................
(Segment information) .....................................................................................................................................................
(Profit per share) ..............................................................................................................................................................
(Significant subsequent events) .......................................................................................................................................

5
5
6
6
7
8
10
11
11
11
12
12
12

- 1 -

1. Overview of Results of Operations, Etc.
(1) Overview of financial results in the fiscal year ended December 31, 2019(i) Results of operations in the fiscal year ended December 31, 2019
In the fiscal year under review (from January 1, 2019 to December 31, 2019), despite the uncertainty regarding the future that ismainly attributable to increasing geopolitical risks caused by the U.S.-China trade friction and concerns over the Middle Eastsituation, the Japanese economy has seen a gradual recovery thanks to the improved corporate earnings and employment/income
environments.
In the information service industry to which the Group belongs, corporate capital investment demand is rising, centered arounddigital transformation (DX) that transforms business models by using IT, which includes systems for increasing productivity forthe purpose of facilitating and promoting work style reform as well as in strategic areas such as digital marketing and big data
analytics.
Under these conditions, the Group has advocated the management policy of “acceleration from a package vendor to platformer”
and enhanced development investment to improve the additional value of the Broadleaf Cloud Platform digital platform while
promoting the expansion of the customer base.
As a result, revenue in the fiscal year under review increased 6.1% year on year, to 22,586 million yen. Operating profit rose to4,525 million yen (up 10.0% year on year), profit before tax stood at 4,486 million yen (up 9.3% year on year), and profit
attributable to owners of parent recorded 3,093 million yen (up 16.5% year on year).
The Company has a single business segment, which consists of IT services. A breakdown of revenue by category is shown in thetable below.
(Unit: Millions of Yen)FY2018FY2019Classification(From Jan. 1(From Jan. 1
Year-on-year rate of change
to Dec. 31, 2018)
to Dec. 31, 2019)
Platforms
Applications
Total

9,543

10,192

6.8%

11,742

12,394

5.6%

21,285

22,586

6.1%(Note) From the consolidated fiscal year under review, based on the Medium-term Management Strategies <2019-2021>
described in the “FY12/2018 Business Results Briefing,” which was announced on February 14, 2019, the classificationof the revenue by segment is changed in line with the progress of the Group’s growth strategies. The figures for theprevious consolidated fiscal year are also indicated based on this new classification.
(ii) Outlook for the fiscal year ending December 31, 2020
With respect to consolidated results for the fiscal year ending December 31, 2020, the Company forecasts 22,700 million yen inrevenue, 4,600 million yen in operating profit, 4,600 million yen in profit before tax and 3,100 million yen in profit attributableto owners of parent.
The Company will move forward steadily with its efforts to renew contracts with the users of existing systems and acquire newcustomers, while at the same time enhancing its initiatives for expanding the use of the electronic trading platform for car repair
parts operated by the Company. On the other hand, in order to expand the business areas in the future, we will continue developing
the services relating to the Broadleaf Cloud Platform.
(2) Overview of financial position in the fiscal year under review(i) Assets, liabilities, and net assets
Total assets at the end of the fiscal year under review increased 2,276 million yen from the end of the previous fiscal year, to31,689 million yen (up 7.7% year on year). Current assets fell 2,632 million yen, to 7,987 million yen (down 24.8%), and noncurrent assets increased 4,907 million yen, to 23,702 million yen (up 26.1%). The decrease in current assets was mainly
attributable to a decrease in cash and cash equivalents of 2,593 million yen. The increase in non-current assets was caused
primarily by a rise in property, plant and equipment of 1,584 million yen and a rise in intangible assets of 2,264 million yen.
Liabilities rose by 89 million yen from the end of the previous fiscal year, to 8,469 million yen (up 1.1% year on year). Current
liabilities decreased 813 million yen, to 7,100 million yen (down 10.3%). Non-current liabilities climbed 903 million yen, to
1,369 million yen (up 193.5%). The main factor contributing to the decrease in current liabilities was a decrease in contract
liabilities of 565 million yen. The increase in non-current liabilities was mainly attributable to an increase in long-term interestbearing debt of 849 million yen.
Total equity rose 2,186 million yen from the end of the previous fiscal year, to 23,220 million yen (up 10.4% year on year). The
increase in total equity was chiefly attributable to an increase of 2,169 million yen in retained earnings.
- 2 -As a result, the percentage of equity attributable to owners of parent rose 1.8 percentage points from 71.5% at the end of theprevious fiscal year to 73.3%.
(ii) Cash flows
Cash and cash equivalents (“cash”) at the end of the fiscal year under review declined 2,593 million yen from the end of theprevious fiscal year, to 3,034 million yen. Net cash provided by operating activities stood at 3,762 million yen. Net cash used ininvesting activities came to 3,990 million yen. Net cash used in financing activities was 2,366 million yen.
The following is a description of the situation and major factors of each category of cash flows in the fiscal year under review.
(Cash flows from (used in) operating activities)
Net cash provided by operating activities stood at 3,762 million yen (down 17.6% year on year), reflecting profit before tax of
4,486 million yen and depreciation and amortization expense of 1,881 million yen, which were partially offset by income taxes
paid of 1,951 million yen.
(Cash flows from (used in) investing activities)
Net cash used in investing activities came to 3,990 million yen (up 59.8% year on year), mainly due to the acquisition of
intangible assets of 3,184 million yen.
(Cash flows from (used in) financing activities)
Net cash used in financing activities was 2,366 million yen (down 1.8% year on year), chiefly attributable to cash dividends paidof 1,136 million yen and repayments of leases payable of 877 million yen.
(3) Basic policy on profit distribution and dividends for FY2019 and FY2020
The Company positions returning profits to shareholders as an important management issue. Its basic policy is securing internal
reserves for future business development and the reinforcement of the management structure and continuing to distribute stabledividends. We aim for a payout ratio of approximately 20%.
To secure opportunities for returning profits to shareholders, we distribute dividends twice a year: interim dividends and yearend dividends. Interim dividends are determined by the Board of Directors, and year-end dividends are determined by the annual
shareholders’ meeting. The Articles of Incorporation stipulate that by a resolution of the Board of Directors, the Company may
pay interim dividends to the shareholders or registered pledgees of shares stated or recorded in the final shareholder registry on
June 30 every year.
With respect to dividends for the fiscal year under review, we will pay an annual dividend of 13.0 yen, including the interim
dividend of 6.5 yen.
The Company forecasts that the dividend per share for the next fiscal year will be 13.2 yen (an interim dividend of 6.6 yen anda year-end dividend of 6.6 yen).

- 3 -2. Basic Policy on the Selection of Accounting Standards
The Group has decided to voluntarily apply the International Financial Reporting Standards (IFRS), replacing the Japanese GAAP,
from the consolidated financial statements in the annual securities report for the fiscal year ended December 31, 2016 to increase
convenience for the stakeholders, including shareholders and investors in Japan and overseas, by improving the international
comparability of financial information and expanding the scope of disclosure.

- 4 -3. Consolidated Financial Statements and Major Notes(1) Consolidated statement of financial position(Unit: Thousands of Yen)FY2018(As of December 31, 2018)
AssetsCurrent assets
Cash and cash equivalents
Operating and other receivables
Inventories
Other current financial assets
Other current assets
Total current assets

FY2019(As of December 31, 2019)

5,626,723
4,447,390
238,46130
306,121
10,618,726

3,033,768
4,300,009
252,684
5,000
395,541
7,987,002

442,641
11,739,040
4,633,235
37,152
1,405,853
115,372
420,864
18,794,156
29,412,881

2,026,600
11,802,504
6,897,109
94,655
1,953,076
234,224
693,392
23,701,560
31,688,562

Liabilities and Equity
Liabilities
Current liabilities
Operating and other payables
Contract liabilities
Short-term interest-bearing debt
Income taxes payable
Other current financial liabilities
Other current liabilities
Total current liabilities

3,623,665
1,616,791
378,551
1,004,527
72,8201,216,718
7,913,072

3,613,128
1,051,622
754,091
655,300
76,986
948,841
7,099,967

Non-current liabilities
Long-term interest-bearing debt
Net defined benefit liability
Non-current provisions
Deferred tax liabilities
Total non-current liabilities
Total liabilities

84,738196,345
133,207
52,097466,386
8,379,457

933,932
185,866
134,834
114,337
1,368,970
8,468,936

EquityCapital stock
Share premium
Treasury shares
Retained earnings
Other components of equity
Total equity attributable to owners of parent
Non-controlling interests
Total equity
Total liabilities and equity

7,147,905
7,180,289-3,500,454
9,759,561
446,124
21,033,424－
21,033,424
29,412,881

7,147,905
7,199,403-3,456,820
11,928,868
397,573
23,216,929
2,697
23,219,626
31,688,562

Non-current assets
Property, plant and equipment
Goodwill
Intangible assets
Investments accounted for using equity method
Other non-current financial assets
Other non-current assets
Deferred tax assets
Total non-current assets
Total assets- 5 -(2) Consolidated statement of income and consolidated statement of comprehensive income
Consolidated statement of income(Unit: Thousands of Yen)FY2018(From January 1, 2018
to December 31, 2018)
Revenue
Cost of sales
Gross profit
Selling, general and administrative expenses
Other operating income
Other operating expense
Operating profit
Finance income
Finance costs
Equity in loss of affiliates
Profit before tax
Income tax
ProfitProfit attributable to:
Owners of parent
Non-controlling interests
ProfitEarnings per share
Basic earnings per share (yen)Diluted earnings per share (yen)- 6 -FY2019(From January 1, 2019
to December 31, 2019)21,285,103-5,451,763
15,833,340-11,750,826
57,054-25,057
4,114,511
12,252-12,367-9,153
4,105,244-1,449,621
2,655,622

22,585,813-6,393,692
16,192,122-11,730,000
80,237-17,262
4,525,097
2,729-26,651-15,573
4,485,602-1,392,860
3,092,741

2,655,622－
2,655,622

3,092,992-251
3,092,741

30.36
30.15

35.40
34.95

Consolidated statement of comprehensive income(Unit: Thousands of Yen)FY2018(From January 1, 2018
to December 31, 2018)
ProfitOther comprehensive income
Components that will not be reclassified to profit or loss
Net change in fair value of financial assets of equity
nature measured at fair value through othercomprehensive income
Remeasurements of defined benefit plans
Total components that will not be reclassified to
profit or loss
Components that may be reclassified to profit or loss
Exchange differences on translation of foreign
operations
Share of other comprehensive income of associates
accounted for using equity method
Total components that may be reclassified to profit
or loss
Total other comprehensive income, net of tax
Comprehensive income
Comprehensive income attributable to:
Owners of parent
Non-controlling interests
Profit- 7 -FY2019(From January 1, 2019
to December 31, 2019)

2,655,622

3,092,741

61,128-42,164

9,053

1,982

70,181-40,182-8,2704,239-4,774

601-13,044

4,840

57,136-35,3422,712,759

3,057,400

2,712,759－
2,712,759

3,057,651-251
3,057,400

(3) Consolidated statement of changes in equity
FY2018 (From January 1, 2018 to December 31, 2018)(Unit: Thousands of Yen)
Equity attributable to owners of parent
Other components of equity
Capital stock

Exchangedifferences ontranslation offoreign operations

Share premium

Treasury shares

Retained earnings

7,147,905

7,116,269-2,736,155

8,009,349

165,866-36,065－－－

52,729－－7,147,905

7,116,269-2,736,155

8,062,078

165,866-36,065

Profit－－－2,655,622－－

Other comprehensive income

－

－

－

－

－

-13,044

Total comprehensive income

－

－

－

2,655,622－-13,044

Purchase of treasury shares－－-1,005,603

－

－

－

Disposal of treasury shares－

64,020241,303－-8,829－Dividends－－－-967,192－－

Share-based paymenttransactions

－

－

－

－

211,682－

Reclassification from othercomponents of equity toretained earnings

－

－

－

9,053

－

－

Other changes

－

－

－

－

-4,868－－64,020-764,300-958,139

197,985－

7,147,905

7,180,289-3,500,454

9,759,561

363,850-49,109

Balance as of January 1, 2018
Changes in accounting
policies
Balance after restatement ofprior period’s financial results
after error corrections

Total transactions with owners
Balance as of December 31,
2018

Warrants(Unit: Thousands of Yen)
Equity attributable to owners of parent
Other components of equity
Net change in fairvalue of financial
assets of equity
Remeasurements ofnature measured atdefined benefit
fair value through
plans
other
comprehensive
incomeBalance as of January 1, 2018
Changes in accounting
policies
Balance after restatement ofprior period’s financial results
after error corrections

Total equity

Total

Total

70,255－200,056

19,737,424

19,737,424

－

－

－

52,72952,72970,255－200,056

19,790,153

19,790,153
2,655,622－－－

2,655,622

61,128

9,053

57,136

57,136

57,136

Total comprehensive income

61,128

9,053

57,1362,712,759

2,712,759

Purchase of treasury shares

－

－

－

-1,005,603-1,005,603

Disposal of treasury shares－－-8,829296,494

296,494

Dividends－－－-967,192-967,192

Share-based paymenttransactions－－

211,682

211,682

211,682

Reclassification from othercomponents of equity toretained earnings－-9,053-9,053－－

Other changes－－-4,868-4,868-4,868－-9,053

188,932-1,469,488-1,469,488

131,383－

446,124

21,033,424

21,033,424

ProfitOther comprehensive income

Total transactions with owners
Balance as of December 31,
2018

- 8 -

FY2019 (From January 1, 2019 to December 31, 2019)(Unit: Thousands of Yen)
Equity attributable to owners of parent
Other components of equity
Capital
stock

Share
premium

TreasurysharesRetainedearnings

Warrants

Shares withrestriction ontransfer

Exchangedifferences ontranslation offoreign
operations

7,147,905

7,180,289-3,500,454

9,759,561

363,850－-49,109－－－38,969－－－7,147,905

7,180,289-3,500,454

9,798,530

363,850－-49,109

Profit－－－3,092,992－－－

Other comprehensive income

Balance as of January 1, 2019
Changes in accounting
policies
Balance after restatement ofprior period’s financial results
after error corrections

－

－

－

－

－

－

4,840

Total comprehensive income

－

－

－

3,092,992

－

－

4,840

Acquisition of subsidiaries

－

－

－

－

－

－

－

Disposal of treasury shares－-2,904

7,642－-5,610－－

Dividends－－－-1,135,758

－

－

－

Share-based paymenttransactions－

22,01835,993－

179,504-14,000－

Reclassification from othercomponents of equity toretained earnings

－

－

－

173,103－－－

Total transactions with owners－

19,114

43,635-962,655

173,894-14,000－

7,147,905

7,199,403-3,456,820

11,928,868

537,744-14,000-44,269

Balance as of December 31,
2019(Unit: Thousands of Yen)
Equity attributable to owners of parent
Other components of equity
Net change in fairvalue of financial
assets of equity
Remeasurements ofnature measured atdefined benefit
fair value through
plans
other
comprehensive
incomeBalance as of January 1, 2019
Changes in accounting
policies
Balance after restatement ofprior period’s financial results
after error corrections

Non-controllinginterests

Total

Total

Total equity

131,383－

446,124

21,033,424－

21,033,424

－

－

－

38,969－38,969131,383－

446,124

21,072,393－

21,072,393
3,092,741－－－

3,092,992-251-42,164

1,982-35,342-35,342－-35,342

Total comprehensive income-42,164

1,982-35,3423,057,651-251

3,057,400

Acquisition of subsidiaries

－

－

－

－

2,948

2,948

Disposal of treasury shares－－-5,610

-872

－

-872

Dividends－－－-1,135,758－-1,135,758

Share-based paymenttransactions－－

165,504

223,515－

223,515

Reclassification from othercomponents of equity toretained earnings-171,121-1,982-173,103－－－

Total transactions with owners-171,121-1,982-13,209-913,115

2,948-910,167

Balance as of December 31,
2019-81,903－397,573

23,216,929

2,697

23,219,626

ProfitOther comprehensive income- 9 -(4) Consolidated statement of cash flow
(Unit: Thousands of Yen)FY2019(From January 1, 2019
to December 31, 2019)

FY2018(From January 1, 2018
to December 31, 2018)
Cash flows from operating activities
Profit before tax
Depreciation and amortization expense
Share-based payment expenses
Finance costs (income)Equity in loss (earnings) of affiliates
Decrease (increase) in operating and other receivables
Decrease (increase) in inventories
Increase (decrease) in operating and other payables
Decrease (increase) in prepaid expenses
Decrease (increase) in long-term prepaid expenses
Increase (decrease) in accrued expenses
Increase (decrease) in employees' bonuses payable
Increase (decrease) in contract liabilities
Increase (decrease) in consumption taxes payable
Increase (decrease) in other current liabilities
Other, net
SubtotalInterest received
Dividends received
Interest expenses paid
Income taxes paid
Cash flows provided by (used in) operating activities
Cash flows from investing activities
Acquisition of property, plant and equipment
Acquisition of intangible assets
Acquisition of investments
Proceeds from sales and redemption of investments
Purchase of investments in subsidiaries resulting inchange in scope of consolidation
Loan advances
Collection of loans receivable
Payments for lease and guarantee deposits
Proceeds from collection of lease and guarantee deposits
Acquisition of investments accounted for using equity
methodOther, net
Cash flows provided by (used in) investing activities
Cash flows from financing activities
Repayments of long-term loans payable
Repayments of lease obligations (during the previous
consolidated fiscal year)
Cash dividends paid
Purchase of treasury shares
Proceeds from sales of treasury shares
Commitment line related expenses
Cash flows provided by (used in) financing activities
Impact of exchange fluctuations for cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Balance of cash and cash equivalents at end of period- 10 -

4,105,244
844,193
206,814114
9,153
532,973-110,324
138,805-27,553-6,495
185,164
396,397-513,761
23,69922,339-24,942
5,781,820
1,698
3,194
-4,124-1,216,297
4,566,291

4,485,602
1,880,815
221,504
23,922
15,573140,178-12,487-32,282-73,224-87,607-164,900-61,556-565,169-33,279-27,287
6,454
5,716,257
741
3,291-6,982-1,951,150
3,762,157-88,996-2,317,835-113,550－-41,793-3,183,773-1,107,346
745,500－-64,215-1,6372,180-30,408
29,656-302,430
2,276-18,171
7,735－-70,975

24,577-2,496,013

43,483-3,989,710-653,350-316,000-59,559-877,186-967,192-1,005,603
296,494-19,500-2,408,710-1,135,758－
4,738-41,500-2,365,706-5,163303-343,594
5,970,318
5,626,723-2,592,956
5,626,723
3,033,768

(5) Notes regarding the consolidated financial statements(Notes on going concern assumption)
Not applicable.
(Changes in accounting policies)
Starting from the fiscal year under review, the Group has applied IFRS 16 Leases (released in January 2016, hereinafter, “IFRS16”). For the application of IFRS 16, the transitional provision under C5 (b) is taken, and the cumulative effects of the start ofapplication is recognized as retained earnings on the date of application (January 1, 2019).
During the period of comparison, the Company, as a borrower, classifies the type of lease with which risk and economic value
for owning it is transferred effectively as a finance lease, and posts assets/liabilities related to lease transactions. Other types oflease contracts are classified as operating leases, and the lease payment based on the operating lease is recognized as expenses
on a straight-line basis during the lease period.
In the transition to IFRS 16, shortcuts on a practical level under IFRS 16 C3 are chosen regarding whether a lease is included ina contract, and the judgment under IAS 17 Leases (hereinafter, “IAS 17”) and IFRIC 4 “Judgment on whether a lease is included
in a contract” is continued.
Lease liabilities in a lease transaction are initially measured as the present value discounted using a calculated interest rate of theunsettled portion of the total lease payment on the start date of the lease. If calculation of the interest rate of the lease is difficult,the Group’s additional borrowing interest rate is used, and the Group generally uses the additional borrowing interest rate as thediscount rate.
With regard to the right of use asset, the initial measurement is conducted on the initial measured amount of lease liabilities
adjusted by prepaid lease payments, etc. Depreciation is conducted for the right of use asset on a regular basis during the lease
period.
The Group includes the right of use assets in property, plant and equipment and lease liabilities in interest-bearing debt in the
consolidated statement of financial position.
The Group judges based on the substance of a contract whether the contract is a lease or not, or whether a lease is included in
the contract, even if the contract is not a type of lease from the standpoint of the law.
With regard to a lease for which the lease period is terminated within 12 months and a lease with a small amount of underlying
assets, the lease fee related to the lease is recognized as expenses during the lease period.
The Group recognizes lease liabilities for leases, to which IAS 17 was applied in the past for classification as operating leases,on the start date of the application of IFRS 16. The lease liabilities are measured with the present value of the remaining leasefee discounted using the borrower’s additional borrowing interest rate on the start date of the application. The weighted averageof the borrower’s additional borrowing interest rate applied to lease liabilities, which is recognized in the consolidated statementof financial position on the start date of the application, is 0.54%.
For the measurement of the right of use assets, a method is adopted in which the measured amount of lease liabilities is adjusted
by prepaid lease fee and unsettled lease fee.
In addition, the Group uses the following shortcut methods on a practical level for the application of IFRS 16.
- A single discount rate is applied to a portfolio of leases with rationally similar characteristics- With regard to a contract with an extension or cancellation option, ex-post judgment is made for the calculation of the lease
period.
- A replacement for impairment loss review is based on the evaluation of the disadvantages of applying IAS 37 “Non-current
provisions, contingent liabilities, and contingent assets” to a lease immediately before the start date of the application.
- Initial direct cost is excluded from the right of use assets on the start date of the application.
As a result, in the (beginning-of-year) consolidated statement of financial position of the consolidated fiscal year under review,property, plant and equipment, and interest-bearing debt increased by 942,455 thousand yen and 886,287 thousand yen,respectively.
The impact on the consolidated statement of income is limited.
In addition, in the consolidated statement of cash flow, cash flows from financing activities declined by 810,561 thousand yen,while cash flows from operating activities increased by the same amount during the consolidated fiscal year under review.

- 11 -

The list of adjustment below indicates the non-cancelable operating lease contract to which IAS 17 was applied, which wasdisclosed at the end of the previous consolidated fiscal year, and lease liabilities on the start date of the application recognizedin the consolidated statement of financial position.
(Unit: Thousands of Yen)
AmountNon-cancellable operating lease contract disclosed on December 31, 2018452,272

Non-cancellable operating lease contract disclosed on December 31, 2018
(after discounting by additional borrowing rate)

429,418

Finance lease obligations (as of December 31, 2018)

147,288

Cancellable lease operating lease contract

418,276

Other

38,592

Lease obligations as of January 1, 2019

1,033,574(Segment information)(1) Overview of the reportable segments
The Group provides its customers with industry-specific business applications through networks, maintenance service andsupplies, and various network services on the Industrial Platform mainly in the automotive aftermarket industry. The Groupdevelops business in a single-segment of an IT service business to the service categories of platforms and applications.
(2) Segment income and results
Since the Group has only a single business segment, the statement is omitted.
(Profit per share)
Basic earnings per share and diluted earnings per share and the basis of their calculation are as follows.
FY2018FY2019(From January 1, 2018
(From January 1, 2019
to December 31, 2018)
to December 31, 2019)
Profit attributable to owners of parent (thousand yen)
Adjustment to profit (thousand yen)

2,655,622

3,092,992––

Diluted profit attributable to owners of parent (thousand yen)

2,655,622

3,092,992

Average number of common shares during the period (shares)

87,482,212

87,383,125

Impact of dilutive common shares with dilutive effects
Warrants (shares)

53,424

17,898Stock benefit trust (shares)

537,182

1,093,342

88,072,818

88,494,365

Basic earnings per share (yen)

30.36

35.40

Diluted earnings per share (yen)

30.15

34.95

Diluted average number of common shares during the period(shares)(Note) The Company conducted a 2-for-1 common stock split effective April 1, 2018. The basic earnings per share and the
diluted earnings per share for FY2018 are calculated on the assumption that the said stock split was implemented at the
beginning of FY 2018.
(Significant subsequent events)
Not applicable.

- 12 -