November 5 2020

Summary of Consolidated Financial Results for the Second Quarter of the Year Ending March 31, 2021

Company name:

SRA Holdings, Inc.
(URL: https://www.sra-hd.co.jp/)
Stock listing:Tokyo Stock Exchange
Code number:
3817
President:
Toru Kashima
For inquiries, please contact:
Toshiaki Kobayashi, Executive Officer, Group Finance & AccountingTel:+81-3-5979-2666
Scheduled date of submission of quarterly securities report:
November 6, 2020
November 30, 2020
Scheduled commencement of dividend payment:
Quarterly Results Supplemental Materials
Yes
Quarterly Results Presentation Meeting
Yes (for institutional investors) *Held online<Zoom>

1. Consolidated results for the Second quarter of the fiscal year ending March 2021
(from April 1, 2020 to September 30, 2020)(1) Consolidated Operating Results (cumulative total)(All amounts rounded down, % change YoY)
Profit (loss) attributable

Net Sales

Ordinary Profit

Operating Profit

to owners of parent

Second quarter of fiscal
2021
Second quarter of fiscal
2020

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

19,155

(6.1)

2,169

4.8

2,137

9.2

1,041

-

20,402

2.2

2,069

19.8

1,957

(8.5)

(1,131)-

Note：Comprehensive Income
Second quarter of fiscal 2021
Second quarter of fiscal 2020

Second quarter of fiscal
2021
Second quarter of fiscal
2020¥1,439million (-%)¥(716)million (-%)

Net Profit

Net Profit

per Shareper Share after Dilution

Yen

Yen

84.42

-

(91.69)-(2) Consolidated Financial Position

Second quarter of fiscal
2021
Fiscal2020

Total Assets

Net Assets

Shareholders’ Equity Ratio

Millions of yen

Millions of yen%

34,484

20,63859.8

34,93420,052

57.4

Reference: Shareholders’ equity
Second quarter of fiscal 2021 : ¥20,617million
Fiscal 2020
: ¥20,042million

2. Dividends
Dividend per Share
End of First QuarterEnd of Second QuarterEnd of Third Quarter

Year-end

Yen

Yen

Yen

Yen

Yen

―
―

40.00
40.00

―

70.00

110.00―70.00

110.00Fiscal 2020
Fiscal 2021
Fiscal 2021(forecast)

For the Year

Note: Revision of dividend forecast in this quarter: No

3. Consolidated Earnings Forecast for Fiscal 2021 (from April 1, 2020 to March 31, 2021)(% of change from FY 2020）

Net Sales

FY2021

Operating Profit

Ordinary Profit

Profit (loss) attributable

Net Profit

to owners of parent

per Share

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

Yen

42,700

(2.2)

4,500

(9.1)

4,500

(9.1)

3,150

-

255.34

Note: Revision of consolidated results forecast in this quarter:No

4. Others(1) Changes to significant subsidiaries during the current period :No(2) Application of simplified accounting and application of special accounting :(3) Changes in accounting principles and procedures, presentation, etc.
1. Changes caused by revision of accounting standards, etc. :2. Changes other than 1. above:
No

No

No

(4) Number of shares outstanding (common stock)
1. Number of shares outstanding (including treasury stock)
Second quarter of fiscal 2021:
15,240,000 sharesFiscal 2020:
15,240,000 shares
2. Number of treasury stock
Second quarter of fiscal 2021:
2,903,322 sharesFiscal 2020:
2,903,279 shares
3. Average number of shares over period (consolidated total for quarter)
Second quarter of fiscal 2021:
12,336,680 shares
Second quarter of fiscal 2020:
12,336,721 shares*Indication of quarterly review procedure implementation status
This earnings release is not subject to the quarterly review process as required by the Financial Instruments and Exchange Act of Japan.
As of the date when this earning release was issued, the review process on quarterly financial statements as required by the Financial
Instruments and Exchange Act had been finished.

*Explanation relating to the appropriate use of results forecasts, and other noteworthy items
Forward-looking statements in this earnings release, such as forecasts of results of operations, are based on the information currently
available and the certain assumptions that we regard as reasonable and therefore actual results may differ materially from those containedin or suggested by any forward-looking statements.

SRA Holdings, Inc. (3817) Summary of Second-Quarter Consolidated Financial Results for the Year Ending March 31, 2021

1) Qualitative Information Concerning Second-Quarter Consolidated Business Results(1) Explanation Concerning Business Results
Our consolidated business results for the second quarter of the fiscal year were as follows.
Despite the limited impact of COVID-19, even though sales of the System Operations and Infrastructure
Development business increased, sales of the Systems Development and sales of the Products Sales businesses
decreased. Therefore, consolidated net sales amounted to ¥19,155 million, a 6.1% decrease from the same period of
the previous fiscal year. At the profit level, gross profit remained virtually flat while the gross profit margin improved.
Additionally, due to efforts to enhance the efficiency of selling, sales, general and administrative (SG&A) (sales
administrative) expenses, operating profit increased 4.8% from the same period of the previous year to ¥2,169 million.
Ordinary profit increased 9.2% year on year to ¥2,137 million and profit attributable to owners of parent increased to¥1,041 million despite the recording of extraordinary losses (loss on valuation of investment securities), as both these
profit categories also achieved increases.
A summary of consolidated business results for the second quarter by business segment is shown below.
1) Systems Development
The Systems Development business recorded a decrease in sales in manufacturing industries although sales to service
industries increased. As a result, net sales decreased 2.2% year on year to ¥9,907 million.
2) System Operations and Infrastructure Development
Orders from companies increased. As a result, net sales of the System Operations and Infrastructure Development
business increased 3.2% from the same period in the previous fiscal year to ¥2,692 million.
3) Product Sales
Despite an increase in device sales by overseas subsidiaries, device sales by Advanced Integration Technology, Inc.
and SRA decreased. As a result, net sales of the Product Sales business decreased 14.4% from the same period in theprevious fiscal year to ¥6,555 million.

Based on the Medium-Term Management Strategy (year ending March 31, 2020 to year ending March 31, 2022),
the SRA Group aims to improve corporate value and enhance shareholder returns and will strive to strengthen thefoundation of its existing businesses while also vigorously promoting new businesses as the Group works in unison
toward 1) achieving sustainable growth, 2) improving profitability and 3) furthering enhancing shareholder returns.
We have positioned fiscal 2021 (year ending March 31, 2021) as a “year for business development” and willleverage our achievements in the previous fiscal year to further promote our growth strategies (Transforming the
SRA business model, Expanding our global business and Responding to digital transformation (DX)) and we will
focus on attaining the targets for the final fiscal year of this strategy.

1

SRA Holdings, Inc. (3817) Summary of Second-Quarter Consolidated Financial Results for the Year Ending March 31, 2021

(2) Explanation Concerning Financial Condition
Total assets at the end of the second quarter amounted to ¥34,484 million, a decrease of 1.3% from the end of theprevious fiscal year. Total liabilities decreased 7.0% from the end of the previous fiscal year to ¥13,846 million andnet assets increased 2.9% to ¥20,638 million from the end of the previous fiscal year.
Details of the principal increases and decreases from the end of the previous fiscal year are as follows.
(Assets)
Cash and deposits increased ¥2,008 million to ¥7,497 million and work in process increased ¥373 million to ¥1,353
million. On the other hand, notes and accounts receivable - trade decreased ¥1,734 million to ¥5,672 million due tothe collection of trade receivables and accounts receivable - other decreased ¥562 million to ¥2,559 million.
(Liabilities)
Advances received increased ¥281 million to ¥3,571 million. On the other hand, accounts payable – trade decreased¥906 million to ¥3,081 million and accrued expenses decreased ¥330 million to ¥564 million(Net Assets)
Valuation difference on available-for-sale securities increased ¥323 million to ¥1,039 million due to changes in themarket prices of investment securities and retained earnings increased ¥177 million to ¥16,241 million.
(3) Explanation Concerning Consolidated Results Forecast and Other Future Projections
No revision has been made to forecasts in the Summary of Consolidated Financial Results for the Year Ending March
31, 2020 released on May 27, 2020. In the future, we will quickly disclose relevant information if there is a need torevise the forecast of financial results.

2

SRA Holdings, Inc. (3817) Summary of Second-Quarter Consolidated Financial Results for the Year Ending March 31, 2021

3. Consolidated Financial Statements(1) Consolidated Balance Sheets(Millions of Yen)
As of March 31, 2020

As of September 30, 2020

ASSETS
Current assets:
Cash and deposits

5,489

7,497

Notes and accounts receivable - trade

7,406

5,672

64

138

1,176

1,013

980

1,353

Short-term loans receivable

3,160

3,221

Accounts receivable – other

3,121

2,559

Other

649

645

Allowance for doubtful accounts

(11)

(6)

22,03622,095

Buildings

405

409

Accumulated depreciation

(280)

(287)

Buildings, net

124

122

Machinery, equipment and vehicles

579

498

Accumulated depreciation

(533)

(456)

Machinery, equipment and vehicles, net

45

41

Other

163

155

Accumulated depreciation

(116)

(109)

Other, net

46

46

Total property, plant and equipment

217

210

372

346

372

346

8,530

8,397

852

868

Deferred tax assets

2,171

1,826

Guarantee deposits

410

402

Retirement benefit asset

50

51

Other

320

312

Allowance for doubtful accounts

(8)

(8)

Allowance for investment loss

(18)

(17)

Securities
Merchandise and finished goods
Work in process

Total current assets
Non-current assets:
Property, plant and equipment

Intangible assets
Other
Total intangible assets
Investments and other assets
Investment securities
Long-term loans receivable

3

SRA Holdings, Inc. (3817) Summary of Second-Quarter Consolidated Financial Results for the Year Ending March 31, 2021

Total investments and other assets

12,308

11,832

Total non-current assets

12,89812,388

Total assets

34,93434,484

4

SRA Holdings, Inc. (3817) Summary of Second-Quarter Consolidated Financial Results for the Year Ending March 31, 2021

(Millions of Yen)
As of March 31, 2020

As of September 30, 2020

LIABILITIESCurrent liabilities:
Accounts payable – trade

3,987

3,081

Short-term borrowings

198

195

Accrued expenses

895

564

Income taxes payable

548

453

Accrued consumption taxes

629

442

Advances received

3,289

3,571

Provision for bonuses

546

681

Provision for bonuses for directors and other officers

23

89

Provision for loss on construction contracts

330

330

Other

148

135

10,599

9,546

40

25

4,018

4,044

218

225

5

4

4,282

4,299

14,881

13,846

Share capital

1,000

1,000

Capital surplus

4,702

4,702

Retained earnings

16,063

16,241

Treasury shares(2,402)(2,402)

Total shareholders’ equity

19,363

19,541

Valuation difference on available-for-sale securities

715

1,039

Foreign currency translation adjustment

218

259

Remeasurements of defined benefit plans

(256)

(222)

Total accumulated other comprehensive income

678

1,075

10

20

Total net assets

20,052

20,638

Total liabilities and net assets

34,93434,484

Total current liabilities
Non-current liabilities:
Deferred tax liabilities
Retirement benefit liability
Provision for retirement benefits for directors and otherofficers
Other
Total non‐current liabilities
Total liabilities
NET ASSETS
Shareholders’ equity

Accumulated other comprehensive income

Share acquisition rights

5

SRA Holdings, Inc. (3817) Summary of Second-Quarter Consolidated Financial Results for the Year Ending March 31, 2021

(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income(Quarterly Consolidated Statements of Income)(Consolidated Cumulative Total for Second Quarter)(Millions of Yen)
Six months ended
September 30, 2019

Six months ended
September 30, 2020

Net sales

20,402

19,155

Cost of sales

15,918

14,687Gross profit

4,483

4,468

Selling, general and administrative expenses

2,414

2,299

Operating profit

2,069

2,169

Interest income

90

87

Dividend income

46

60

Compensation income

－

30

Other

17

11

Total non-operating income

154

189

Interest expenses

23

1Foreign exchange losses

225

189

Stock transfer agency service fee

89Share of loss of entities accounted for using equity method

－

3

Other

8

17

266

221

1,957

2,137

Gain on sales of investment securities

14

96

Gain on reversal of share acquisition rights

25

0

Other

－

0

Total extraordinary income

39

97

3,344

567

0

4

Total extraordinary losses

3,345

571

Profit (loss) before income taxes(1,348)

1,663

Income taxes-current

455

455

Income taxes-deferred

(671)

166

Total income taxes

(216)

622

Non-operating income

Non-operating expenses

Total non-operating expenses
Ordinary profit
Extraordinary income

Extraordinary losses
Loss on valuation of investment securities
Other

6

SRA Holdings, Inc. (3817) Summary of Second-Quarter Consolidated Financial Results for the Year Ending March 31, 2021

Profit (loss)(1,131)

1,041

Profit (loss) attributable to owners of parent(1,131)

1,041

7

SRA Holdings, Inc. (3817) Summary of Second-Quarter Consolidated Financial Results for the Year Ending March 31, 2021

(Quarterly Consolidated Statements of Comprehensive Income)(Consolidated Cumulative Total for Second Quarter)(Millions of Yen)

Profit (loss)

Six months ended

Six months ended

September 30, 2019

September 30, 2020

(1,131)

1,041

Valuation difference on available-for-sale securities

385

323

Foreign currency translation adjustment

(2)

40

Remeasurements of defined benefit plans, net of tax

32

33

Total other comprehensive income

415

397

(716)

1,439

(716)

1,439

－

－

Other comprehensive income

Comprehensive income(Comprehensive income attributable to)Comprehensive income attributable to owners ofparentComprehensive income attributable to noncontrolling interests

8

SRA Holdings, Inc. (3817) Summary of Second-Quarter Consolidated Financial Results for the Year Ending March 31, 2021

(3) Quarterly Consolidated Statements of Cash Flows(Millions of Yen)
Six months ended
September 30, 2019

Six months ended
September 30, 2020

(1,348)1,663

Depreciation

293

63

Increase (decrease) in retirement benefit liability

46

26

Increase (decrease) in provision for retirement benefits for
directors and other officers

17

6

Increase (decrease) in provision for bonuses

176

134

18

66

Increase (decrease) in allowance for doubtful accounts

(1)

(4)

Increase (decrease) in allowance for investment loss

0

(0)

(9)

－

(136)

(148)

Interest expenses

23

1Commission expenses

76Foreign exchange losses (gains)

225

189

Share of loss (profit) of entities accounted for using equity
method(7)

3

Loss (gain) on valuation of investment securities

3,344

567

Loss (gain) on sales of investment securities

(14)

(96)

Loss on retirement of non-current assets

04

Decrease (increase) in trade receivables

868

1,720

Decrease (increase) in inventories

(22)

(266)

Increase (decrease) in trade payables

(305)

(896)

43

227

Increase (decrease) in other liabilities

(865)

(41)

Increase (decrease) in accrued consumption taxes

(158)

(187)

Other, net

(11)

(56)

Subtotal

2,184

2,982

Interest and dividends received

150

144

Interest paid

(23)

(10)

(1,462)

(155)

849

2,960

(62)

(28)

Cash flows from operating activities
Profit (loss) before income taxes

Increase (decrease) in provision for bonuses for directors andother officers

Increase (decrease) in provision for loss on construction
contracts
Interest and dividend income

Decrease (increase) in other current assets

Income taxes paid
Net cash provided by operating activities
Cash flows from investing activities
Purchase of property, plant and equipment

9

SRA Holdings, Inc. (3817) Summary of Second-Quarter Consolidated Financial Results for the Year Ending March 31, 2021

Proceeds from sales of property, plant and equipment

－

0

(279)

(48)

(1,029)

(291)

29

423

Loan advances

(181)

(61)

Proceeds from collection of loans receivable

156

28

Payments into time deposits

(200)

(0)

Payments of guarantee deposits

(3)

(0)

Proceeds from refund of guarantee deposits

0－

Other, net(0)6(1,569)27

Net increase (decrease) in short-term borrowings

500－

Purchase of treasury shares－(0)

Dividends paid

(863)

(863)

Commissions paid

(5)

(5)

Other, net

(1)

(1)

(370)

(869)

(36)

(33)

Net increase (decrease) in cash and cash equivalents(1,126)

2,084

Cash and cash equivalents at beginning of period

3,997

5,370

Cash and cash equivalents at end of period

2,870

7,454

Purchase of intangible assets
Purchase of investment securities
Proceeds from sales of investment securities

Net cash provided by (used in) investing activities
Cash flows from financing activities

Net cash used in financing activities
Effect of exchange rate change on cash and cash equivalents

10

SRA Holdings, Inc. (3817) Summary of Second-Quarter Consolidated Financial Results for the Year Ending March 31, 2021

(4) Notes Concerning Consolidated Financial Statements for the Second Quarter(Notes Concerning Premise of Going Concern)
None(Notes on Significant Changes in Shareholders’ Equity)
None

11

SRA Holdings, Inc. (3817) Summary of Second-Quarter Consolidated Financial Results for the Year Ending March 31, 2021

(Segment Information and others)[Segment Information]
I. Consolidated cumulative total for second quarter of the previous fiscal year (April 1, 2019 to September 30,
2019)
1. Information concerning net sales and income or losses for each reporting segment(Millions of Yen)
AmountSystemOperations

Systems
Development

andInfrastructurerecorded on
Product

Adjustment

Total

Sales

*1

amountthe quarterly
consolidated
statements ofDevelopment

income*2

Sales(1) Sales to
Customers

10,131

2,608

7,662

20,402－

20,402

4

117

87

209

(209)

－

Total sales

10,135

2,725

7,749

20,611(209)

20,402

Segment income

1,654

663

498

2,815

(746)

2,069

(2) Intersegment
sales ortransfers

Notes:
1. The segment income adjustment of minus ¥746 million is a company-wide expense not apportioned to any reporting segment.
Company-wide expenses are general and administrative expenses and R&D expenses not attributed to any reporting segment.
2. Segment income is adjusted in operating income on the quarterly consolidated statements of income.

2. Information concerning impairment loss on fixed assets or goodwill for each reporting segment
None

12

SRA Holdings, Inc. (3817) Summary of Second-Quarter Consolidated Financial Results for the Year Ending March 31, 2021

II. Consolidated cumulative total for second quarter of the fiscal year under review (April 1, 2020 to September 30,
2020)
1. Information concerning net sales and income or losses for each reporting segment(Millions of Yen)
AmountSystemOperations

Systems
Development

andInfrastructurerecorded on
Product

Adjustment

Total

Sales

*1

amountthe quarterly
consolidated
statements ofDevelopment

income*2

Sales(1) Sales to
Customers

9,907

2,692

6,555

19,155－

19,155

18

121

47

187

(187)

－

Total sales

9,926

2,813

6,602

19,342(187)

19,155

Segment income

1,524

765

648

2,937

(768)

2,169

(2) Intersegment
sales ortransfers

Notes:
1. The segment income adjustment of minus ¥768 million is a company-wide expense not apportioned to any reporting segment.
Company-wide expenses are general and administrative expenses and R&D expenses not attributed to any reporting segment.
2. Segment income is adjusted in operating income on the quarterly consolidated statements of income.

2. Information concerning impairment loss on fixed assets or goodwill for each reporting segment
None

13

SRA Holdings, Inc. (3817) Summary of Second-Quarter Consolidated Financial Results for the Year Ending March 31, 2021

(Significant subsequent events)
Not applicable

14

SRA Holdings, Inc. (3817) Summary of Second-Quarter Consolidated Financial Results for the Year Ending March 31, 2021

3. Other Information
1. Status of Production, Orders and Sales⚫ Production amounts
Production by segment in the second quarter of the fiscal year under review is as follows.
Segment information by type of businessSix months ended% change YoY

September 30, 2020

Systems Development (Millions of Yen)
System Operations and Infrastructure
Development (Millions of Yen)
Total (Millions of Yen)

10,118

(4.4)

2,741

4.9

12,860(2.6)

Notes:
1. Amounts are based on sales price.
2. The amounts above do not include consumption tax.
3. Intersegment transactions are offset.

⚫ Purchase amounts
Purchases by segment in the second quarter of the fiscal year under review are as follows.
Segment information by type of businessSix months ended% change YoY

September 30, 2020

Product Sales (Millions of Yen)

3,333

(14.3)

Total (Millions of Yen)

3,333

(14.3)

Notes:
1. Amounts are based on purchase price.
2. The amounts above do not include consumption tax.
3. Intersegment transactions are offset.

15

SRA Holdings, Inc. (3817) Summary of Second-Quarter Consolidated Financial Results for the Year Ending March 31, 2021

⚫ Status of orders
Status of orders by segment in the second quarter of the fiscal year under review is as follows.
OrdersSegment information by type of businessreceived(Millions ofOrder backlog% change YoY(Millions of
Yen)

Yen)
Systems Development% change YoY

10,714

(3.7)

4,910

(2.1)

2,090

(7.0)

1,829

(1.1)

Product Sales

6,205(10.0)

3,873

20.4

Total

19,010(6.2)

10,613

5.3

System Operations and Infrastructure
Development

Notes:
1. Amounts are based on sales price.
2. The amounts above do not include consumption tax.
3. Intersegment transactions are offset.

⚫ Sales amounts
Sales by segment in the second quarter of the fiscal year under review are as follows.
Segment information by type of businessSix months ended% change YoY

September 30, 2020

Systems Development (Millions of Yen)

9,907

(2.2)

2,692

3.2

Product Sales (Millions of Yen)

6,555

(14.4)

Total (Millions of Yen)

19,155(6.1)

System Operations and Infrastructure
Development (Millions of Yen)

Notes:
1. Amounts are based on sales price.
2. The amounts above do not include consumption tax.
3. Intersegment transactions are offset.

16