Large-Scale Systems Integration Failures, Delivery Delays and Deteriorating Profitability

「During the interim consolidated accounting period, there were no new major risks or significant changes to the business risks described in the annual securities report that management recognized as potentially having a material effect on the financial position, operating results, or cash flows of the consolidated companies, among the matters concerning business conditions and financial matters described in this Semiannual Report.」

「前年度の品質性能問題を踏まえ、ＱＣＤ（品質・コスト・納期）の厳守・安定化の徹底した推進により、顧客信頼性・満足度の向上と製品・サービスの品質・利益向上に取り組む」

「Based on the quality and performance issues of the previous fiscal year, the Company is working to improve customer reliability and satisfaction and the quality and profitability of its products and services by ensuring strict adherence to and stabilizing QCD, defined as quality, cost and delivery.」

「During the interim consolidated accounting period, there were no new major risks or significant changes to the business risks described in the annual securities report that management recognized as potentially having a material effect on the financial position, operating results, or cash flows of the consolidated companies, among the matters concerning business conditions and financial matters described in this Semiannual Report.」

「During the three-month period ended 30 June, there were no new risks that management recognizes as having the potential to materially affect the financial position, operating results or cash flows of the consolidated companies, and no material changes to the business risks described in the annual securities report for the previous fiscal year.」

「In carrying out projects, unforeseen events could result in the suspension or delay of individual projects and deteriorating profitability, and, in large-scale cases, could affect the Group's operating results and financial condition.」

「During the cumulative third quarter under review, there were no significant changes in the matters described in this quarterly report regarding the business and accounting conditions that management recognizes could materially affect the financial position, operating results and cash flows of the consolidated companies, or in the “Business and Other Risks” described in the securities report for the previous fiscal year.」

「In the Business Solutions segment, the Company aims to complete current large-scale projects as planned by ensuring thorough QCD management, while」

「In terms of earnings, operating profit was ¥139 million, down 66.0%, and ordinary profit was ¥97 million, down 70.2%, owing to new capital investment for business expansion and delays in the development schedule for system construction for health insurers, among other factors.」

「During the three-month period ended 30 June, there were no new risks that management recognizes as having the potential to materially affect the financial position, operating results or cash flows of the consolidated companies, and no material changes to the business risks described in the annual securities report for the previous fiscal year.」

「The Company states that it will strengthen project management across the Company to prevent and deter unprofitable projects, and that stronger company-wide project management improved productivity and quality and reduced unprofitable projects.」

「During the cumulative third quarter under review, there were no significant changes in the matters described in this quarterly report regarding the business and accounting conditions that management recognizes could materially affect the financial position, operating results and cash flows of the consolidated companies, or in the “Business and Other Risks” described in the securities report for the previous fiscal year.」

「During the cumulative second quarter under review, there were no significant changes in the matters described in this quarterly report regarding the business and accounting conditions that management recognizes could materially affect the financial position, operating results and cash flows of the consolidated companies, or in the “Business and Other Risks” described in the securities report for the previous fiscal year.」

「During the three-month period ended 30 June, there were no new risks that management recognizes as having the potential to materially affect the financial position, operating results or cash flows of the consolidated companies, and no material changes to the business risks described in the annual securities report for the previous fiscal year.」

「The Group recognizes the importance of project management for system construction, software development and other projects, and works to improve employees' project management skills. In particular, during the process of finalizing requirements specifications, it repeatedly confirms the requirements with customers and works to adhere strictly to schedules. The Group will also work to strengthen project management across the Company to prevent and deter the occurrence of unprofitable projects.」

「During the cumulative second quarter under review, there were no significant changes in the matters described in this quarterly report regarding the business and accounting conditions that could materially affect investors’ decisions, or in the “Business and Other Risks” described in the securities report for the previous fiscal year.」

「As a result, for the consolidated fiscal year, orders received were ¥13,667 million, down 8.1% year on year, and revenue was ¥13,794 million, up 10.8%. In terms of earnings, although some unprofitable projects arose among large-scale SI projects, the effects of ongoing productivity improvement initiatives and other measures resulted in operating profit of ¥585 million, up 27.3%, ordinary profit of ¥585 million, up 25.4%, and net income attributable to owners of the parent of ¥378 million, up 86.2%. The Company therefore made a strong start to the first year of its medium-term management plan.」

「During the nine-month cumulative period, there were no new business or other risks, nor any material changes to the business or other risks described in the securities report for the previous fiscal year.」

「During the six-month cumulative period, there were no new business or other risks, nor any material changes to the business or other risks described in the securities report for the previous fiscal year.」

「During the three-month cumulative period, there were no new business or other risks, nor any material changes to the business or other risks described in the securities report for the previous fiscal year.」

「However, despite taking these measures, unforeseen events could result in the suspension or delay of individual projects and deteriorating profitability, and, in large-scale cases, could affect the Group's performance.」

「During the nine-month cumulative period, there were no new business or other risks, nor any material changes to the business or other risks described in the securities report for the previous fiscal year.」

「During the six-month cumulative period, there were no new business or other risks, nor any material changes to the business or other risks described in the securities report for the previous fiscal year.」

「Recognizing the importance of project management for system construction, software development and other projects, the Group is working to improve employees' project management skills. In particular, during the process of finalizing requirements specifications, it repeatedly confirms the requirements with customers and works to adhere strictly to schedules.」