Occurrence of Quality Issues and Loss-Making Projects

「大規模な不採算プロジェクトが前年度で解決したことやAI駆動開発等のAI活用による生産性向上などにより、前年同期の大幅な減益を上回る増益となりました。」

「Operating profit increased, exceeding the significant decline recorded in the same period of the previous year, due to the resolution of large-scale unprofitable projects in the previous fiscal year and productivity improvements from the use of AI, including AI-driven development.」

「Provision for loss on orders　212　3,105 / Provision for product warranties　5,120　13,932」

「受注損失引当金……… 受注契約に係る将来の損失に備えるため、当連結会計年度末における受注のうち発生する原価の見積額が受注額を超過する可能性が高いものについて、損失見込額を計上しております。」

「Provision for loss on orders 212 6,659」

「Provision for product warranties — 5,120」

「Revenue in the embedded sector increased approximately 4% year on year and is showing signs of recovery from the quality-related measures taken in the previous fiscal year.」

「Revenue in the embedded sector grew approximately 14% year on year, showing a steady recovery from the quality-related measures taken in the previous fiscal year.」

「Although the issue was resolved by the interim period, continuing orders were secured for the project and the Group also worked to strengthen sales activities, including acquiring new customers, revenue in the field declined by approximately 1% year on year.」

「In the embedded systems field, an issue requiring remedial action arose with certain customers at the beginning of the fiscal year and required resources to address, causing revenue to stagnate. However, the issue was resolved during the cumulative third quarter of the current consolidated fiscal year, and the Group secured continuing orders for the project. Going forward, the Group will work to recover both revenue and profit in this field.」

「In the embedded systems field, an issue requiring remedial action arose with certain customers and required resources to address, causing revenue to stagnate. However, the issue was resolved during the cumulative second quarter of the current consolidated fiscal year, and the Group secured continuing orders for the project.」

「Provision for loss on orders 2,487 1,819」

「Provision for loss on orders　14,335　2,487」

「Provision for loss on orders 14,335 6,425」

「Provision for loss on orders　14,335　352」

「Provision for loss on orders　14,335　1,892」

「Work in process related to commissioned software projects expected to incur losses and the provision for loss on orders are presented separately without offsetting. / ¥14.335 million」

「Provision for loss on orders 7,512 23,728」

「Provision for loss on orders　7,512　10,538」

「Provision for loss on orders 7,512 7,167」

「Work in process related to commissioned software projects expected to incur losses and the provision for loss on orders are presented separately without offsetting. / Current consolidated fiscal year: ¥7.512 million」

「Provision for loss on orders 238 7,202」

「Provision for loss on orders 238 7,260」

「Provision for loss on orders 238 5,285」

「Provision for loss on orders　Previous consolidated fiscal year: ¥214,000　Current consolidated fiscal year: ¥238,000」

「Provision for loss on orders　214　846」

「Provision for loss on orders　214　457」

「Provision for loss on orders 214 2,038」

「Provision for loss on orders　Previous consolidated fiscal year: ¥32.022 million　Current consolidated fiscal year: ¥214,000」

「Provision for loss on orders　32,022　565」

「This was mainly due to a ¥45 million decrease in income taxes payable and a ¥30 million decrease in the provision for loss on orders.」

「The amounts charged to cost of sales for the provision for loss on orders were as follows: Previous consolidated fiscal year: —; Current consolidated fiscal year: ¥32.022 million」

「However, if a quality issue arises in the services provided by the Group, additional costs to address the issue and damages claims could affect the Group's operating results and financial condition.」