デジタル・インフォメーション・テクノロジー（3916） – [Delayed]Summary of Business Results for the Six Months Ended December 31, 2021 [Japan GAAP] (Consolidated)

Summary of Business Results for the Six Months Ended December 31, 2021 [Japan GAAP] (Consolidated) Company Stock Code Representative Contact Digital Information Technologies Corporation 3916 URL: http://www.ditgroup.jp/ Satoshi Ichikawa, President and Representative Director Ken Mochizuki, Director, Executive Officer, General Manager of Corporate Planning Division Expected date of filing of quarterly report: February 14, 2022 Expected starting date of dividend payment: March 10, 2022 Preparation of quarterly supplementary financial document: Yes Quarterly results briefing: Yes (for institutional investors and analysts) February 10, 2022 Listed on the TSE T E L: +81-3-6311-6532 1. Consolidated business results for the six months ended December 31, 2021 (July 1, 2021 through December 31, 2021) (1) Consolidated results of operations (% represents the change from the previous corresponding period) （Rounded down to million yen） Net sales Operating income Ordinary income Net income attributable to owners of parent Million yen 7,685 7,065 % Million yen 973 912 8.8 7.6 % Million yen 981 912 6.7 24.5 % Million yen 686 628 7.6 23.9 % 9.3 23.3 For the six months ended December 31, 2021 December 31, 2020 (Note) Comprehensive income For the six months ended December 31, 2021 December 31, 2020 Six months ended December 31, 2021: 682 million yen (10.9%) Six months ended December 31, 2020: 614 million yen (9.1%) Net income per share Diluted net income per share Yen 45.04 41.20 Yen – – (Note) Diluted net income per share is not presented because there are no dilutive shares. (2) Consolidated financial position Total assets Net assets Million yen 6,820 6,388 Million yen 5,005 4,526 Shareholders’ equity ratio % 73.4 70.9 As of December 31, 2021 June 30, 2021 (Reference) Shareholders’ equity As of December 31, 2021: 5,005 million yen As of June 30, 2021: 4,526 million yen 2. Dividends For the fiscal year End of 1Q End of 2Q Year-end Total Annual dividend End of 3Q ended June 30, 2021 ending June 30, 2022 ending June 30, 2022 (forecast) (Note) Revisions to dividend forecast for the current quarter: None 3．Forecast of consolidated business results for the fiscal year ending June 30, 2022 Yen – – Yen 10.00 15.00 Yen – – Yen 14.00 15.00 Yen 24.00 30.00 (July 1, 2021 through June 30, 2022) (% represents the change from the previous corresponding period) Net sales Operating income Ordinary income Net income attributable to owners of parent Net income per share Million yen % 1,900 10.3 Million yen % 9.8 1,318 10.2 Yen 86.44 8.0 Million yen % 15,600 Million yen % For the fiscal year ending June 30, 2022 1,900 (Note) Revisions to business forecast for the current quarter: None – 1 – ※Notes (1) Changes in significant subsidiaries during the period (changes in specified subsidiaries accompanying changes in the scope of consolidation): None (2) Application of accounting procedures specific to preparation of the consolidated quarterly financial statements: None (3) Changes in accounting policies, accounting estimates and restatement ①Changes in accounting policies associated with revision of accounting standards: ②Changes in accounting policies other than ① ③Changes in accounting estimates ④Restatement : Yes : None : None : None (4) Shares outstanding (common stock) ①Number of shares outstanding at the end of period (treasury stock included) As of December 31, 2021 As of June 30, 2021 ②Treasury stock at the end of period As of December 31, 2021 As of June 30, 2021 15,501,820 shares 15,501,820 shares 253,521 shares 253,489 shares ③Average number of stock during period (quarterly cumulative period) Six months ended December 31, 2021 Six months ended December 31, 2020 15,248,311 shares 15,248,361 shares (Note) The number of treasury stock to be deducted from the calculation of the number of treasury stock at the end of the period and the number of treasury stock during the period includes the Company’s shares held by Custody Bank of Japan, Ltd. as trust assets under the Employees’ Benefit Trust (J-ESOP) Plan *Quarterly financial summary is not subject to the quarterly review procedures by certified public accountants or auditing firms. *Explanation regarding appropriate use of business forecasts and other special instructions Forecasts regarding future performance in this material are based on information currently available to the Company and certain assumptions that the company deems to be reasonable at the time this report was prepared. The Company does not make promises about the achievements. Actual results may differ significantly from the forecasts due to various factors. – 2 – Contents 1. Qualitative Information Regarding Consolidated Quarterly Business Results………………………………………………. (1) Explanation of Business Results…………………………………………………………………………………………. (2) Explanation of Financial Position………………………………………………………………………………………… (3) Explanation of Results Forecasts and Other Future Predictions…………………………………………………………. (4) Other Matters to be Reported………………………………………………………………………………..…………… 2. Consolidated Quarterly Financial Statements and Main Notes……………………………………………………………… (1) Consolidated Quarterly Balance Sheets………………………………………………………………………………….. (2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income…………………………. 10 (Consolidated Quarterly Statements of Income) (Second Quarter Cumulative)……………………………………………………………………………………… 10 (Consolidated Quarterly Statements of Comprehensive Income) (Second Quarter Cumulative)………………………………………………………………………………………. 11 (3) Consolidated Statements of Cash Flows…………………………………………………………………………………. (4) Notes to Quarterly Consolidated Financial Statements………………………………………………………………….. (Notes on going concern assumption)……………………………………….…………………………………………. (Notes regarding substantial changes in shareholders’ equity)………………………………………………………… (Segment Information)…………………………………………………………………………………………………. 4 4 7 7 8 9 9 12 13 13 13 13 – 3 – 1. Qualitative Information Regarding Consolidated Quarterly Business Results (1) Explanation of Business Results During the subject second quarter cumulative period (July 1, 2020 to December 31, 2021), the business environment showed a gradual recovery trend as the number of people with infections gradually declined after the lifting of the State of Emergency at the end of September. However, when the Omicron variant was reported in South Africa in November, the number of infected people increased again in various countries, the outlook became once again uncertain from the end of the second quarter of the current fiscal year. In the information service industry, to which our company belongs, it remained difficult to avoid the impact of the infection, although the degree of impact varies depending on the business portfolio including customer composition and other aspects. Even under these circumstances, according to the Bank of Japan’s Tankan survey released on December 13, 2021, the FY2021 software investment plan (total for all industries and enterprises of all sizes) continued to expand, rising 13.5% from the previous fiscal year, although it was a survey at a time when the number of people with infections showed a downward trend. For our group as well, the progress in fields such as Artificial Intelligence (AI), Internet of Things (IoT), and Robotic Process Automation (RPA, the automation and efficiency enhancement of tasks using software robots) have led to increased opportunities to enter new businesses and the expansion of business scope. Under the COVID-19 crisis, the need for strengthening measures for cyber security and improving the efficiency of working styles further increased, and this provided a tailwind for our group, which has effective solutions for these issues. Under such conditions, the DIT Group formulated the following five business strategies, and continues to take proactive measures to achieve them. · Renovation (Expand and stabilize business foundation through reform of existing businesses) · Innovation (Create new value centered on in-house products) · Shift from competition to collaboration (Expand business through cooperative efforts) · Shift from development to services (Expand business from service-oriented perspective) · Secure and develop human assets (Hire and train personnel) In addition, on August 20, 2021, we announced the new medium-term management plan and the DIT Group’s vision for 2030. In the 2030 Vision, we have set the DIT’s future vision (DIT Services：providing a higher level of value, DIT Spirits: a group of professionals) to build a “Trusted and Chosen DIT Brand, and also set the following management targets as the “Challenge 500(*)”. Management Targets Medium-term management targets by FY6/30 Organic growth + New businesses, M&A, etc. Net sales 30 billion yen or more Operating Income 4 billion yen or more (*) Challenge 500 Targeting 50 billion yen sales toward FY6/30! 50 billion yen 5 billion yen – 4 – As a step toward achieving this 2030 Vision, we set the period from FY6/22 to FY6/24 as the period for “promoting business structural improvement” to build up business capabilities by promoting the creation of a company and structure that will enable the next growth. We also set the period from FY6/25 to FY6/27 as the period for “achieving a growth trajectory” to establish a business style and put the overall business on a growth track, and the period from FY6/28 to FY6/30 as the period for “establishing the DIT brand”, that is trusted and chosen by all stakeholders. During FY6/22, the first year of the current medium-term management plan, DIT has promoted our business with focusing on the two axes: “expand and stabilize the business foundation” and “expand growth factors.” With regard to “expand and stabilize the business foundation,” the overall business showed strong growth as we allocated resources appropriately to high- demand markets in both the Business Solutions business and the Embedded Solutions business, which offset the slump in the System Sales business. In terms of “expand growth factors”, DIT achieved steady growth as a result of ongoing efforts to enhance product appeal and strengthen sales of WebARGUS¹, an original product built on proprietary technology, and xoBlos², an innovation platform for Microsoft Excel users. Medium-to Long-term Growth Model As mentioned above, the business itself performed steadily, as in the previous fiscal year. However, due to an increase in personnel expenses and recruitment expenses as a result of business expansion, and the refund of taxes and public charges in the first quarter of the previous fiscal year, SG&A expenses increased by 111,967 thousand yen compared to the previous fiscal year, resulting in a slow growth in profits. In the second quarter of the current fiscal year, the Company posted record-high net sales and operating income, with net sales of 3,968 million yen (up 9.2% year on year) and operating income of 551 million yen (up 9.2%). – 5 – As a result, net sales in the subject second quarter cumulative period amounted to 7,685,346 thousand yen (up 8.8% year on year), with operating income of 973,084 thousand yen (up 6.7%), ordinary income of 981,786 thousand yen (up 7.6%), and net income attributable to owners of parent of 686,710 thousand yen (up 9.3%). (*1) WebARGUS is a new type of website security solution that detects the tampering of websites as it occurs, and immediately restores the site to its original state. Instant detection and restoration protect corporate and other websites from malicious, unknown cyber-attacks, while at the same time prevents the escalation of the damage, such viruses spreading via the tampered website. (*2) xoBlos is an innovation platform for Excel to automate inefficient Excel-based tasks, allowing for dramatic improvements in efficiency in a short period. (Excel® is a registered trademark in the U.S. and other countries by the U.S. Microsoft Corporation) Results by segment are as follows. Of note, figures for sales by segment and segment income (operating income) are prior to offsets for intracompany transactions. ① Software Development Business In the Business Solutions Unit (business system development and operation support), sales and profits grew steadily even under the COVID-19 crisis thanks to the success of the business portfolio review that we have been promoting. Operation support services have grown remarkably over the past few years, but in the current fiscal year, our core business system development services grew significantly. In business system development, sales from the mainstay financial services sector declined due to job rotation by division, mainly for long-term workers. However, sales from the pharmaceutical sector grew significantly, while the acquisition of telecommunications, manufacturing, and ERP-related projects progressed more than expected. As a result, sales grew steadily and profits improved significantly. In operation support, sales and profits both increased year on year as we steadily responded to needs for cloud infrastructure building and other services, despite some impacts from business reforms at our mainstay customers. In the Embedded Solutions Unit (embedded systems development and embedded systems verification), sales and profits grew steadily even under the COVID-19 crisis. This was attributable to the fact that semiconductor-related sales grew significantly and verification operations expanded more than in the past. In embedded system development, sales and profits both increased year on year, supported by strong demand for IoT-related products, including those related to mobile devices and consumer electronics. Other factors include sales of mainstay automobile-related products showed a slight increase, being out of the stagnant period, and semiconductor-related sales grew significantly. In embedded system verification, both sales and profits both increased significantly year on year. This was attributable to significant growth in the automotive verification business, as well as steady growth in 5G-related products (mobile devices and base stations) and medical-related products. In both the Business Solutions and Embedded Solutions units, the majority of work continued to be done via remote work, but we were able to keep this to a level that did not have a significant impact on our business. In the Original Product Unit, we were able to exceed the previous year results despite the remaining restrictions on business negotiations due to COVID-19. In the cyber security business, we posted solid growth in both sales and profits due to the accumulation of licensing sales of WebARGUS. We worked to expand sales of total security services (DIT Security) with WebARGUS as its core through increasing the lineup of these products and collaboration with an external cyber security specialist (F-Secure Corporation and SSH Communications Security). In the business efficiency improvement business, while it was difficult to acquire new customers due to COVID-19, we were able to increase both sales and profits by promoting the horizontal development to other departments of existing customers. In addition, we worked to strengthen product appeal by expanding linkage functions with various systems, such as RPA and ERP to expand sales. There has been a gradual increase in inquiries for DD-CONNECT, an electronic contract outsourcing service that responds to the new normal society caused by the COVID-19 disaster, and we received orders from major companies, etc. On September 15, 2021, we launched “shield cms”, a website creation platform that combines safety and flexibility in preparation, as our original product. The lineup of our original products is gradually increasing, and we will continue to work to expand sales. As a result, net sales in the Software Development business amounted to 7,393,819 thousand yen (up 9.6% year-on-year), with segment income (operating income) of 945,682 thousand yen (up 7.5%). – 6 – ② System Sales Business The main product of the System Sales segment is “Rakuichi,” an operations and management support system for small and medium-sized enterprises manufactured by Casio Computer Co., Ltd. Since this is a product that is mainly sold face-to-face, it was affected by the COVID-19 crisis, resulting in a decrease in both sales and segment income compared to the previous year. As a result, net sales in the System Sales segment amounted to 299,396 thousand yen (down 8.1% year on year), with segment income (operating income) of 27,372 thousand yen (down 15.5%). (2) Explanation of Financial Position ① Assets, Liabilities and Net Assets The status of assets, liabilities, and net assets in the end of the subject second quarter cumulative period is as follows. ① Current Assets Current assets amounted to 6,303,389 thousand yen at the end of the second quarter, an increase of 639,193 thousand yen compared to the end of the previous fiscal year. This was mainly due to increases of 387,232 thousand yen in cash and deposits and 2,320,531 thousand yen in accounts receivable and contract assets, and a decrease of 2,084,985 thousand yen in accounts receivable. ② Noncurrent Assets Noncurrent assets amounted to 517,497 thousand yen at the end of the second quarter, a decrease of 206,840 thousand yen compared to the end of the previous fiscal year. This was due mainly to decreases of 8,967 thousand yen in property, plant and equipment, 1,317 thousand yen in intangible fixed assets, and 196,555 million yen in investments and other assets. ③ Current Liabilities Current liabilities amounted to 1,695,611 thousand yen at the end of the second quarter, a decrease of 55,038 thousand yen compared to the end of the previous fiscal year. This was due mainly to increases of 28,043 thousand yen in accounts payable- trade, and 28,142 thousand yen in provision for bonuses, against decreases of 27,891 thousand yen in income taxes payable, and 83,373 thousand yen in “other.” ④ Noncurrent Liabilities Noncurrent liabilities amounted to 119,973 thousand yen at the end of the second quarter, an increase of 8,808 thousand yen compared to the end of the previous fiscal year. This was mainly due to an increase of 13,935 thousand yen in provision for share based remuneration, and a decrease of 5,346 thousand yen in “other.” ⑤ Net Assets ② Cash Flows Net assets amounted to 5,005,302 thousand yen at the end of the second quarter, an increase of 478,583 thousand yen compared to the end of the previous fiscal year. This was due mainly to an increase of 483,329 thousand yen in retained earnings, and a decrease of 7,866 thousand yen in valuation difference on available-for-sale securities. Cash and cash equivalents at the end of the second quarter increased by 387,232 thousand yen from the end of the previous fiscal year to 3,713,932 thousand yen. The factors contributing the changes in cash flows during the six months of the current fiscal year are as follows. (Cash Flows from Operating Activities) Net cash provided by operating activities amounted to 416,145 thousand yen (531,094 thousand yen provided by the same quarter of the previous year). This was due to the recording of profit before income taxes of 981,786 thousand yen, proceeds from an increase in allowance for bonuses of 28,142 thousand yen, expenditures for an increase in trade receivables and contract assets of 235,546 thousand yen, expenditures for a decrease in accounts payable and accrued expenses of 56,745 thousand yen, expenditures for an increase in other assets 33,244 thousand yen, and expenditures for income taxes paid of 331,883 thousand yen. (Cash Flows from Investing Activities) (Cash Flows from Financing Activities) Net cash provided by investing activities amounted to 189,270 thousand yen (12,412 thousand yen provided for the same quarter of the previous year). This was mainly due to payments for purchase of investment securities of 25,435 thousand yen, payments for insurance reserves of 2,159 thousand yen, and proceeds from cancellation of insurance reserves of 220,102 thousand yen. Net cash used in financing activities amounted to 221,368 thousand yen (175,194 thousand yen used in the same period of the previous fiscal year), due to repayment of lease obligations of 6,125 thousand yen and cash dividends paid of 215,178 thousand yen. (3) Explanation of Results Forecasts and Other Future Predictions No revisions have been made to the full-year consolidated business forecasts announced on August 12, 2021. We will disclose changes to our forecasts as necessary in light of future social conditions. – 7 – (4) Other Matters to be Reported ① Passing of the Honorary Chairman Norikazu Ichikawa, our founder and honorary chairman, passed away on November 21, 2021. Mr. Ichikawa was our emotional support and has given us advice on management. Nevertheless, we believe that there will be no significant impact on our management, as he has already retired from the frontline, and we will inherit his management philosophy and corporate philosophy. ② Transition to a New Market Segment, “Prime Market” At the Board of Directors meeting held on December 13, 2021, we resolved to apply for the “prime market” as a new market segment scheduled for transition to April 4, 2022. With this, as stated in the “Results of Selection of New Market Segment” published by the Tokyo Stock Exchange on January 11, 2022, our company will be transferred to the “prime market” from April 4, 2022. We will strive to achieve sustainable growth and increase corporate value over the medium to long term through initiatives aimed at realizing “DIT 2030 Vision”, while maintaining a high level of governance so that we can meet the expectations of our stockholders as a company suited to the Prime Market, the top-tier market. – 8 – 2. Consolidated Quarterly Financial Statements and Major Notes (1) Consolidated Quarterly Balance Sheets ASSETS Current assets FY6/21 (June 30, 2021) (Thousand yen) 2Q FY6/22 (December 31, 2021) Cash and deposits Notes and accounts receivable – trade Trade and contract assets Merchandise Work in process Other, net Allowance for doubtful accounts Total current assets Noncurrent assets Property, plant and equipment: Intangible assets Investments and other assets Other, net Allowance for doubtful accounts Total investments and other assets Total noncurrent assets Total assets LIABILITIES Current liabilities Accounts payable-trade Income taxes payable Provision for bonuses Provision for loss on order received Other, net Total current liabilities Noncurrent liabilities Retirement benefit liability Provision for share based remuneration Other, net Total noncurrent liabilities Total liabilities Net assets Shareholders’ equity Capital Capital surplus Retained earnings Treasury stock Total shareholders’ equity Accumulated other comprehensive income Valuation difference on available- for-sale securities Foreign currency translation adjustments Total accumulated other comprehensive income Total net assets Total liabilities and net assets – 9 – 3,333,158 2,084,985 – 15,550 131,693 99,025 -217 5,664,195 110,096 15,916 631,090 -32,765 598,325 724,337 6,388,533 487,519 367,757 – – 895,372 1,750,650 5,933 74,320 30,910 111,164 1,861,814 453,156 459,214 3,949,586 -347,191 4,514,765 8,010 3,942 11,953 4,526,718 6,388,533 3,720,390 – 2,320,531 31,695 98,817 132,157 -202 6,303,389 101,129 14,598 434,483 -32,714 401,769 517,497 6,820,886 515,563 339,866 28,142 40 811,998 1,695,611 6,153 88,255 25,564 119,973 1,815,584 453,156 459,214 4,432,916 -347,254 4,998,031 143 7,126 7,270 5,005,302 6,820,886 (2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income (Consolidated Quarterly Statements of Income) (Second Quarter Cumulative) (Thousand yen) 2Q FY6/21 (July 1, 2020 to December 31, 2020) 2Q FY6/22 (July 1, 2021 to December 31, 2021) Net sales Cost of sales Gross profit Selling, general and administrative expenses Operating Income Non-operating income Interest income Dividends income Commission fee Subsidy income Insurance premiums refunded cancellation Gain on forfeiture of unclaimed dividends Other, net Total non-operating revenues Non-operating expenses Interest expenses Loss on insurance cancellation Exchange loss Other, net Total non-operating expenses Ordinary Income Income before income taxes and others Income taxes – current Income taxes-deferred Total income tax Net income Net income attributable to owners of parent 7,065,964 5,307,238 1,758,726 846,447 912,278 170 159 1,786 312 679 694 134 3,936 224 1,343 1,529 845 3,943 912,271 912,271 289,084 -5,104 283,980 628,291 628,291 7,685,346 5,753,845 1,931,500 958,415 973,084 174 159 700 8,161 – 419 217 9,832 196 – 933 – 1,130 981,786 981,786 303,890 -8,814 295,076 686,710 686,710 – 10 – (Consolidated Quarterly Statements of Comprehensive Income) (Second Quarter Cumulative) Net income Accumulated other comprehensive income Valuation difference on available- for-sale securities Foreign currency translation adjustments Total other comprehensive income Comprehensive income (Breakdown) Comprehensive income attributable to owners of parent (Thousand yen) 2Q FY6/21 (July 1, 2020 to December 31, 2020) 2Q FY6/22 (July 1, 2021 to December 31, 2021) 628,291 -11,860 -1,647 -13,508 614,783 614,783 686,710 -7,866 3,184 -4,682 682,028 682,028 – 11 – (Thousand yen) 2Q FY6/21 (July 1, 2020 to December 31, 2020) 2Q FY6/22 (July 1, 2021 to December 31, 2021) (3) Consolidated Statements of Cash Flows Net cash provided by (used in) operating activities Income before income taxes and others Depreciation Increase (decrease) in allowance for doubtful accounts Increase (decrease) in provision for loss on order received Increase (decrease) in provision for bonuses Increase (decrease) in net defined benefit liability Increase (decrease) in provision for share based remuneration Interest and dividends income Interest expenses Decrease (increase) in notes and accounts receivable- trade Decrease (increase) in notes and accounts receivable- trade and contract assets Decrease (increase) in inventories Increase (decrease) in notes and accounts payable – trade Increase (decrease) in accounts payable – other and accrued expenses Decrease (increase) in other assets Increase (decrease) in other liabilities Insurance income Other, net Subtotal Interest and dividends income received Interest expenses paid Proceeds from insurance income Subsidies received Income taxes paid Net cash provided by (used in) operating activities Net cash provided by (used in) investing activities Purchases of investment securities Purchases of property, plant and equipment Purchases of intangible assets Collection of loans receivable Purchase of insurance funds Proceeds from cancellation of insurance funds Payments for lease and guarantee deposits Proceeds from collection of lease and guarantee deposits Net cash provided by (used in) investing activities Net cash provided by (used in) financing activities Repayments of lease obligations Purchase of treasury stock Cash dividends paid Net cash provided by (used in) financing activities Effect of exchange rate change on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period – 12 – 912,271 14,982 -119 -2,833 93,563 171 13,935 -330 224 -97,532 – 44,958 23,066 -102,178 -44,402 -38,337 – 705 818,146 330 -224 – – -287,157 531,094 -435 -628 – 129 -2,344 15,711 -20 – 12,412 -6,022 – -169,171 -175,194 -1,654 366,658 2,393,468 2,760,127 981,786 13,604 -66 40 28,142 220 13,935 -333 196 – -235,546 16,791 28,043 -56,745 -33,244 -25,659 -49 8,564 739,680 333 -196 49 8,161 -331,883 416,145 -25,435 – -1,500 191 -2,159 220,102 -1,989 60 189,270 -6,125 -63 -215,178 -221,368 3,184 387,232 3,326,700 3,713,932 (4) Notes on Quarterly Consolidated Financial Statements (Notes on going concern assumption) Not applicable. Not applicable. (Notes regarding substantial changes in shareholders’ equity) (Segment Information) Segment Information Ⅰ 2Q FY6/21 (July 1, 2020 to December 31, 2020) 1. Information Relating to the Amounts of Net Sales, Profit, and Loss Reporting Segments Software Development Business System Sales Business Total Adjustment amount (Note 1) (Thousand yen) Amount recorded on consolidated quarterly statements of income (Note 2) Net sales Intrasegment net sales and transfers Net sales to outside customers 6,746,444 319,519 7,065,964 7,065,964 1,067 6,430 7,497 -7,497 Total 6,747,511 325,950 7,073,461 -7,497 7,065,964 Segment income (loss) 879,864 32,384 912,248 30 912,278 (Notes) 1. Adjustment to segment income of 30 thousand yen is mainly intersegment eliminations. 2. Segment income is adjusted with operating income in the consolidated quarterly statements of income. Ⅱ 2Q FY6/22 (July 1, 2021 to December 31, 2021) 1. Information Relating to the Amounts of Net Sales, Profit, and Loss Reporting Segments Software Development Business System Sales Business Total Adjustment amount (Note 1) (Thousand yen) Amount recorded on consolidated quarterly statements of income (Note 2) Net sales Net sales to outside customers 7,393,019 292,326 7,685,346 7,685,346 Intrasegment net sales and transfers 800 7,069 7,869 -7,869 Total 7,393,819 299,396 7,693,215 -7,869 7,685,346 Segment income (loss) 945,682 27,372 973,054 30 973,084 (Notes) 1. Adjustment to segment income of 30 thousand yen is mainly intersegment eliminations. 2. Segment income is adjusted with operating income in the consolidated quarterly statements of income. – – – – – 13 –