Note: This document is a translation of the original Japanese version and provided for reference purposes only. In theevent of any discrepancy between the Japanese original and this English translation, the Japanese original shall prevail.

Consolidated Financial Results
for the Six Months Ended September 30, 2021 (Japanese GAAP)
November 5, 2021

Company name:
Stock code:

Medical System Network Co., Ltd.
4350

Listing: Tokyo Stock Exchange
URL: https://www.msnw.co.jp/eng/

Representative:
Contact:
Tel:

Inao Tajiri, President and Representative Director
Eiji Hirashima, Executive Officer, Director of Finance and Director+81-11-613-7750

Scheduled date for quarterly report submission:
Scheduled date for dividend payment:
Preparation of supplemental explanatory materials:
Results briefing to be held:

November 9, 2021
December 13, 2021
Yes
Yes (for institutional investors and analysts)(Amounts of less than one million yen are rounded down)

1. Consolidated Financial Results for the Six Months Ended September 30, 2021
(April 1 to September 30, 2021)(1) Consolidated operating results
Net sales
Six months ended
September 30, 2021
Six months ended
September 30, 2020

EBITDA

Operating profit

Million yen%

Million yen% Million yen

52,169

2.2

3,253

16.7

51,045

(2.2)

2,787

22.5

(Percentages indicate YoY change)
Profit attributable toOrdinary profit
owners of parent%

Million yen%

Million yen

%

1,862

37.4

2,235

60.0

1,431

147.2

1,355

70.1

1,397

78.1

578

165.1

Note: Comprehensive income for the six months ended September 30, 2021 was 1,451 million yen (+153.1% YoY), and comprehensive income forthe six months ended September 30, 2020 was 573 million yen (+332.7% YoY).
Note: EBITDA = (operating profit + depreciation + goodwill amortization)

Earnings per share
Six months ended
September 30, 2021
Six months ended
September 30, 2020

Diluted earnings
per share

Yen

Yen

47.46

－

19.08

－

Note: Please refer to “Appropriate use of earnings forecast and other special notes 2” for details of earnings per share calculations.

(2) Consolidated financial position
Total assets
As of
September 30, 2021
As ofMarch 31, 2021

Net assets

Equity ratio

Net assets per share

Million yen

Million yen%

Yen62,433

12,50420.0

413.8164,448

11,18717.3

370.23

Reference: Shareholders’ equity amounted to 12,488 million yen as of September 30, 2021 and 11,163 million as of March 31, 2021.
Note: Please refer to “Appropriate use of earnings forecast and other special notes 2” for details of shareholders’ equity, equity ratio, and net
assets per share calculations.

2. Dividends
Dividends per share
End of Q1
Fiscal year ended
March 31, 2021
Fiscal year ending
March 31, 2022
Fiscal year ending
March 31, 2022
(forecast)End of Q2

End of Q3

Year-end

Total

Yen

Yen

Yen

Yen

Yen

－

5.00

－

5.00

10.00

－

5.00
－

5.00

10.00

Note: No revisions have been made to the Company’s most recently announced dividend forecast.

3. Consolidated Earnings Forecast for the Fiscal Year Ending March 31, 2022
(April 1, 2021 to March 31, 2022)
Net sales

Full-year

EBITDA

Operating profit(Percentages indicate YoY change)
Profit attributable
Earnings
Ordinary profit
to owners ofper share
parentMillion yen%

Million yen%

Million yen%

Million yen%

105,700

1.4

6,500

1.2

3,500

2.0

4,000

15.0

Million yen%

Yen

1,800 (18.1)

59.69

Note: No revisions have been made to the Company’s most recently announced consolidated earnings forecast.
Note: EBITDA = (operating profit + depreciation + goodwill amortization)

*Notes(1) Changes in significant subsidiaries during the period under review: None
(Transfers of specified subsidiaries associated with changes in the Company’s scope of consolidation)
Newly added:
None
Excluded:None(2) Distinctive accounting methods applied when preparing quarterly consolidated financial statements: None
(3) Changes in accounting policies, accounting estimates and retrospective restatements
1. Accounting policy changes due to accounting standard revisions, etc.:Yes
2. Other accounting policy changes:
None
3. Changes in accounting estimates:
None
4. Retrospective restatements:
None
Note: Please refer to “(4) Notes to Quarterly Consolidated Financial Statements (Changes in accounting policies)” within “2. Quarterly
Consolidated Financial Statements and Primary Notes” on page 10 of the attached materials for details.

(4) Number of shares outstanding (common stock)
1. Shares outstanding(including treasury stock)

As of September 30, 2021

30,642,600

As of March 31, 2021

30,642,600

2. Treasury shares outstanding

As of September 30, 2021

464,055

As of March 31, 2021

489,055

3. Period-average shares
outstanding (cumulative
quarterly figures)

Six months ended
September 30, 2021

30,163,381

Six months ended
September 30, 2020

30,343,965

Note: Please refer to “Appropriate use of earnings forecast and other special notes 2” for details of calculation method regarding period-end
treasury stock numbers and period-average shares outstanding (cumulative quarterly figures).

*The financial information in this quarterly report is not subject to review by certified public accountants or auditing firms.
*Appropriate use of earnings forecast and other special notes
1. The earnings forecasts and other forward-looking statements contained in this document are based on information
currently available to the Company, and certain assumptions it considers reasonable, but are not intended to be a promisethat the Company will achieve. Actual results may vary materially from forecasts due to a variety of factors. For mattersconcerning earnings forecasts, please refer to page 3 of the attached materials “1. Qualitative Information on Quarterly
Financial Performance (3) Explanation of Consolidated Earnings Forecasts and Other Projections.”
2. In the quarterly consolidated balance sheets, the Company's shares held as trust assets of the Board Benefit Trust (BBT)
are recorded as treasury stock. They are included in treasury stock in calculations of earnings per share, equity ratio, net
assets per share, shareholders’ equity, period-end treasury stock numbers, and period-average shares outstanding(cumulative quarterly figures).

Medical System Network Co., Ltd.(4350) Consolidated Financial Results for the Six Months Ended September 30, 2021

Accompanying Materials – Contents
1. Qualitative Information on Quarterly Financial Performance.......................................................................................... 2(1) Explanation of Operating Results ................................................................................................................................. 2(2) Explanation of Financial Position.................................................................................................................................. 3(3) Explanation of Consolidated Earnings Forecasts and Other Projections ..................................................................... 3
2. Quarterly Consolidated Financial Statements and Primary Notes ................................................................................. 4(1) Consolidated Balance Sheet ........................................................................................................................................ 4(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income ...................................... 6(3) Consolidated Statement of Cash Flows ....................................................................................................................... 8(4) Notes to Quarterly Consolidated Financial Statements .............................................................................................. 10(Notes to going concern assumptions) ......................................................................................................................... 10(Notes in the event of significant changes in shareholders’ equity) .............................................................................. 10(Changes in accounting policies) ................................................................................................................................. 10(Segment information).................................................................................................................................................. 121

Medical System Network Co., Ltd.(4350) Consolidated Financial Results for the Six Months Ended September 30, 2021

1. Qualitative Information on Quarterly Financial Performance(1) Explanation of Operating Results
During the six months ended September 30, 2021, the Company recorded consolidated net sales of 52,169 million
yen (+2.2% YoY), operating profit of 1,862 million yen (+37.4%YoY), and ordinary profit of 2,235 million yen (+60.0%
YoY). There was solid growth in the number of new network affiliates in the Pharmaceutical Network Business, andwhile prescription unit price fell in the Dispensing Pharmacy Business, the number of prescriptions recovered to a certain
extent. Profit attributable to owners of parent was 1,431 million yen (+147.2% YoY), due to gains on the sale ofinvestment securities and the impact of tax effects from the absorption-type merger with the Company’s consolidated
subsidiary, Home-Visit Nursing Care Station Himawari Co., Ltd., in July 2021.
Results by segment were as follows. Net sales for individual segments include intersegment sales.
1) Community Pharmacy Network Segment
In the Community Pharmacy Network Segment, we aim to provide value throughout the entire pharmaceuticalsupply chain. Our businesses include a pharmaceutical network to support pharmacy management, dispensing
pharmacy operations, pharmaceutical manufacture and marketing, and a digital shift business using thecommunication app LINE.
In the Pharmaceutical Network Business, the environment surrounding the pharmacy industry has become
increasingly severe as the NHI drug price list, which was previously revised every other year, is subject to the annual
revision from April 2021. The number of new network affiliates continued to post solid growth amid mounting needsfor operational stability in these circumstances. As of September 30, 2021, network affiliates totaled 6,700, comprising
419 Group dispensing pharmacies and 6,281 general network affiliates (an increase of 584 from March 31, 2021).
In the Dispensing Pharmacy Business, while the prescription unit price fell, the number of prescriptions recovered
to a certain extent. As of September 30, 2021, the Company had 419 dispensing pharmacies, one care plan center,and eight drug/cosmetic stores.
In the Manufacture and Market Pharmaceuticals Business, we launched nine products (five ingredients) in the six
months ended September 30, 2021, and had 77 products (39 ingredients) available as of September 30, 2021.
In the Digital Shift Business, as of the end of September 2021, the number of registered LINE users exceeded
170,000, the largest among dispensing pharmacies in Japan, with 552 pharmacies using the service.
As a result, segment sales for the six months ended September 30, 2021 were 49,663 million yen (+2.3% YoY)
and operating profit was 2,885 million yen (+21.8% YoY).
2) Leasing and Facility-related Segment
In the Leasing and Facility-related Segment, while real estate lease revenue was generally solid, and orders forconstruction projects increased, occupancy rates at serviced residences for the elderly slumped as sales activities
were restricted due to the COVID-19 pandemic. As a result, segment sales were 1,536 million yen (+6.8% YoY) andoperating profit was 32 million yen (+97.5% YoY).
As of September 30, 2021, occupancy rates were stable at three of our five serviced residences for the elderly. At
the remaining two, Wisteria Senri-Chuo had an occupancy rate of 78.1% (64 out of 82 units occupied), and Wisteria
Minami-Ichijo had an occupancy rate of 70.7% (82 out of 116 units occupied). We plan to carry out marketing activities
to reach our fiscal year-end target occupancy rate of 90%, while taking care to prevent COVID-19 infections.
3) Meal Catering Segment
In the Meal Catering Segment, the number of meals supplied fell during the COVID-19 pandemic, but gross profit
improved as we changed suppliers. Segment sales were 1,166 million yen (-6.5% YoY) and operating profit was 1
million yen (operating loss of 13 million yen in the same period of the previous fiscal year).
4) Other Segment
The Other Segment provides home-visit nursing care. Segment sales were 152 million yen (+38.7% YoY) and the2Medical System Network Co., Ltd.(4350) Consolidated Financial Results for the Six Months Ended September 30, 2021

operating loss was 12 million yen (operating loss of 13 million yen in the same period of the previous fiscal year).

(2) Explanation of Financial Position
As of September 30, 2021, total assets amounted to 62,433 million yen, down 2,014 million yen from their level on
March 31, 2021.
Current assets totaled 18,086 million yen, down 1,227 million yen from March 31, 2021, mainly due to a decline in
cash and deposits. Non-current assets were 44,346 million yen, down 787 million compared to March 31, 2021, mainly
due to declines in goodwill and investment securities.
Liabilities came to 49,928 million yen, down 3,332 million yen compared to March 31, 2021. Current liabilities were24,116 million yen, a decline of 1,302 million yen from March 31, 2021, mainly due to lower income taxes payable. Noncurrent liabilities came to 25,811 million yen, down 2,030 million yen from March 31, 2021, mainly due to lower longterm borrowings.
Net assets totaled 12,504 million yen, up 1,317 million yen compared to March 31, 2021, mainly due to an increase
in retained earnings.
(Cash flows)
As of September 30, 2021, cash and cash equivalents totaled 8,185 million yen, down 1,902 million yen comparedto March 31, 2021. Cash flows during the six months ended September 30, 2021 are detailed below.
(Cash flows from operating activities)
Net cash provided by operating activities was 913 million yen (versus 803 million yen provided during the six months
ended September 30, 2020). This resulted mainly from 1,889 million yen in income taxes paid, 2,236 million yen in profit
before income taxes, and 827 million yen in depreciation.
(Cash flows from investing activities)
Investing activities used net cash of 832 million yen (versus 862 million yen used during the six months ended
September 30, 2020). This was primarily due to 927 million yen spent on the purchase of property, plant and equipment.
(Cash flows from financing activities)
Net cash used in financing activities totaled 1,982 million yen (versus 2,716 million yen used during the six months
ended September 30, 2020). This resulted mainly from 2,195 million yen in repayments of long-term borrowings.

(3) Explanation of Consolidated Earnings Forecasts and Other Projections
The Company has made no changes to its full-year earnings forecast for the financial year ending March 31, 2022,
which was announced on May 7, 2021.

3

Medical System Network Co., Ltd.(4350) Consolidated Financial Results for the Six Months Ended September 30, 2021

2. Quarterly Consolidated Financial Statements and Primary Notes(1) Consolidated Balance Sheet(Millions of yen)Six months ended
September 30, 2021
(as of September 30, 2021)

Fiscal year ended
March 31, 2021
(as of March 31, 2021)
AssetsCurrent assets
Cash and deposits
Accounts receivable - trade
Unearned revenue from sale of accounts
receivable
Purchased receivables - dispensing fees

10,118
2,646

8,215
2,684

735

719

424

399

Merchandise
Raw materials

4,390
12

4,922
14

Work in process
Supplies

6
75

8
75

Other
Allowance for doubtful accounts

916
(12)

1,059
(12)

19,31318,086

Buildings and structures, net
Land

13,608
9,091

13,4089,087

Construction in progress
Other

64
1,870

234
1,997

Total property, plant and equipment

24,63424,727

13,145304

12,657360

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

Intangible assets
Goodwill
Software
Other

122

116

13,572

13,134

Investment securities
Guarantee deposits

397
2,748

156
2,775

Deferred tax assets
Other

2,958
843

2,761
812

Total intangible assets
Investments and other assets

Allowance for doubtful accounts

(20)

(20)

Total investments and other assets

6,926

6,484

45,13444,34664,44862,433

Total non-current assets
Total assets

4Medical System Network Co., Ltd.(4350) Consolidated Financial Results for the Six Months Ended September 30, 2021

(Millions of yen)Six months ended
September 30, 2021
(as of September 30, 2021)

Fiscal year ended
March 31, 2021
(as of March 31, 2021)
Liabilities
Current liabilities
Accounts payable - trade
Short-term borrowings

9,258
3,916

9,280
4,416

Current portion of long-term borrowings
Income taxes payable

6,045
1,556

5,663
619

Provision for bonuses
Provision for bonuses for directors (and otherofficers)
Provision for point card certificates
Other

1,495

1,523

83

18

2
3,060

—
2,596

Total current liabilities

25,41824,116

21,556

19,757

798

581

196

194

3,347
1,942

3,533
1,744

27,84125,81153,26049,928

Shareholders' equity
Share capital

2,128

2,128

Capital surplus
Retained earnings

1,182
8,305

1,182
9,583

Non-current liabilities
Long-term borrowings
Provision for retirement benefits for directors(and other officers)
Provision for share awards for directors (andother officers)
Retirement benefit liability
Other
Total non-current liabilities
Total liabilities
Net assets

Treasury shares

(344)

(326)

Total shareholders' equity

11,27012,567

(24)

(6)

(3)

(1)

(78)

(71)

(106)

(79)

23

16

11,187

12,50464,44862,433

Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Deferred gains or losses on hedges
Remeasurements of defined benefit plans
Total accumulated other comprehensive
incomeNon-controlling interests
Total net assets
Total liabilities and net assets

5Medical System Network Co., Ltd.(4350) Consolidated Financial Results for the Six Months Ended September 30, 2021

(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income
Consolidated Statement of Income

Net sales
Cost of sales

Six months ended
September 30, 2020
(from April 1, 2020
to September 30, 2020)
51,04530,542(Millions of yen)Six months ended
September 30, 2021
(from April 1, 2021
to September 30, 2021)
52,16930,307Gross profit

20,502

21,861

Selling, general and administrative expenses

19,147

19,999Operating profit

1,355

1,862

Non-operating income
Interest and dividend income

54Outsourcing service income
Rental income from facilities

36
50

37
52

Subsidy income
Miscellaneous income

55
60

366
59

Total non-operating income

207

520

Non-operating expenses
Loss on sale of receivables

25

27Interest expenses
Miscellaneous losses

111
28

95
24

Total non-operating expenses

165

146

1,397

2,235

Gain on sale of non-current assets
Gain on sale of investment securities

1
—

0
112

Gain on sale of businesses

4—

Total extraordinary income

6113

Ordinary profit
Extraordinary income

Extraordinary losses
Loss on sale of non-current assets

19

10

Loss on retirement of non-current assets
Impairment losses

7
143

5
90

Loss on store closings
Other

12
1

5
0

Total extraordinary losses

183

112

Profit before income taxes

1,219

2,236

Income taxes - current

627

622

Income taxes - deferred

13

189

Total income taxes

640

812

Profit578

1,424

Profit (loss) attributable to non-controlling interests—(6)

Profit (loss) attributable to owners of parent

578

1,431

6

Medical System Network Co., Ltd.(4350) Consolidated Financial Results for the Six Months Ended September 30, 2021

Consolidated Statement of Comprehensive Income
Six months ended
September 30, 2020
(from April 1, 2020
to September 30, 2020)
578(Millions of yen)Six months ended
September 30, 2021
(from April 1, 2021
to September 30, 2021)
1,424

(9)

17

(2)

1

5

7

(5)

27

Comprehensive income

573

1,451

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

573

1,458

—

(6)

ProfitOther comprehensive income
Valuation difference on available-for-salesecurities
Deferred gains or losses on hedges
Remeasurements of defined benefit plans, net oftax
Total other comprehensive income7Medical System Network Co., Ltd.(4350) Consolidated Financial Results for the Six Months Ended September 30, 2021

(3) Consolidated Statement of Cash Flows(Millions of yen)Six months ended
September 30, 2021
(from April 1, 2021
to September 30, 2021)

Six months ended
September 30, 2020
(from April 1, 2020
to September 30, 2020)
Cash flows from operating activities
Profit before income taxes

1,219

2,236

Depreciation
Impairment losses

859
143

827
90

Amortization of goodwill
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for bonuses for
directors (and other officers)
Increase (decrease) in allowance for doubtful
accounts
Increase (decrease) in provision for point cardcertificates
Increase (decrease) in provision for loss on store
closing
Increase (decrease) in provision for shareawards for directors (and other officers)
Increase (decrease) in provision for retirement
benefits for directors (and other officers)
Increase (decrease) in provision for shareawardsIncrease (decrease) in retirement benefit liability

572
93

564
27

41

(65)

(5)

(0)

(0)

(2)

(9)

—

6

16

8

(217)

(69)

—

186

198

Interest and dividend income
Interest expenses

(5)
111

(4)
95

Loss (gain) on sale of investment securities
Loss (gain) on sale of non-current assets

—
17

(112)
9

Loss on retirement of non-current assets
Loss (gain) on sale of businesses

7
(4)

5
—

(221)

(7)

42

16

37

24

(346)
(1,016)

(531)
1

(308)

45

116

(322)

Subtotal

1,479

2,893

Interest and dividends received
Interest paid

4
(109)

4
(94)

Income taxes paid
Net cash provided by (used in) operating
activities(570)(1,889)803

913

Decrease (increase) in trade receivables
Decrease (increase) in unearned revenue fromsale of accounts receivable
Decrease (increase) in purchased receivables dispensing fees
Decrease (increase) in inventories
Increase (decrease) in trade payables
Increase (decrease) in accrued consumption
taxes
Other

8

Medical System Network Co., Ltd.(4350) Consolidated Financial Results for the Six Months Ended September 30, 2021

(Millions of yen)Six months ended
September 30, 2021
(from April 1, 2021
to September 30, 2021)

Six months ended
September 30, 2020
(from April 1, 2020
to September 30, 2020)
Cash flows from investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment
Proceeds from sale of property, plant andequipment
Purchase of intangible assets

(1)

(0)

12
(529)

—
(927)

56

19

(73)

(112)

—

379

29

—

Proceeds from sale of investment securities
Proceeds from liquidation of subsidiaries andaffiliates
Purchase of shares of subsidiaries resulting inchange in scope of consolidation
Proceeds from sale of businesses
Loan advances

—

(209)

13
(8)

11
(1)

Proceeds from collection of loans receivable
Payments of guarantee deposits

2
(315)

6
(54)

Proceeds from refund of guarantee deposits
Other

31
(80)

18
36

Net cash provided by (used in) investing activities

(862)

(832)

—
(2,343)498(2,195)

(190)
(30)

(134)
—

(152)

(152)

(2,716)(1,982)(2,775)(1,902)

11,681

10,088

8,905

8,185

Cash flows from financing activities
Net increase (decrease) in short-term borrowings
Repayments of long-term borrowings
Repayments of lease obligations
Purchase of treasury shares
Dividends paid
Net cash provided by (used in) financing
activities
Net increase (decrease) in cash and cash
equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

9Medical System Network Co., Ltd.(4350) Consolidated Financial Results for the Six Months Ended September 30, 2021

(4) Notes to Quarterly Consolidated Financial Statements(Notes to going concern assumptions)None to be reported.
(Notes in the event of significant changes in shareholders’ equity)
None to be reported.
(Changes in accounting policies)(Application of Accounting Standard for Revenue Recognition, etc.)
The Company began applying the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31,
2020, hereinafter, “revenue recognition standard”) and related implementation guidance at the beginning of the current
fiscal year. The Company recognizes revenue when control of promised goods or services is transferred to the customer,in the amount expected to be received in exchange for the goods or services.
The Company previously recognized the gross amount received from the customer as revenue for certain transactions.
Following the change, when the Company acts as an agent in providing goods or services to the customer, it will recognize
revenue based on the net amount received from the customer less the amount paid to the supplier.
Regarding points awarded under the customer loyalty program at the time of sale, the Company previously recognizedrevenue at the time of sale and booked the amount expected to be needed to redeem the points in the future as a provision
for point card certificates, and recorded this under selling, general and administrative expenses. However, since the points
are insignificant from a monetary perspective, the Company now applies a method that does not identify separate
performance obligations.
The Company participates in point programs operated by third parties and awards those parties’ points at the time of
product sales. Previously the Company recognized revenue at the time of sale and booked the amount equivalent topoints awarded under selling, general and administrative expenses. However, this amount does not constitute a separate
performance obligation, and the Company now excludes the amount paid to other companies at the time of sale fromrevenue as an amount collected on behalf of third parties.
Regarding construction contracts, the Company previously applied the percentage of completion method when theoutcome of the construction activity was deemed certain. However, we have changed our revenue recognition method.
When control over goods or services is transferred to the customer over a certain period, we now recognize revenue forthat period as our performance obligation to transfer the goods or services to the customer is satisfied. To measure theprogress toward fulfilling performance obligations for each reporting period, costs incurred until the last day of the period
as a percentage of total expected costs are calculated. When it is not possible to reasonably estimate progress in theinitial phase of a contract, but the Company expects to recover costs incurred, the Company recognizes revenue under
the cost recovery method. For contracts with a very short period from the start of the transaction until the performanceobligation is expected to be fully satisfied, we apply an alternative treatment under which revenue is not recognized for aset period but only when the performance obligation is fully satisfied.
The Company has applied the revenue recognition standard in accordance with transitional treatment prescribed in theproviso to paragraph 84 of the revenue recognition standard. The cumulative effect of retroactively applying the new
accounting policy prior to the beginning of the current fiscal year was added to or deducted from retained earnings at the
beginning of the fiscal year, and the new accounting policy was applied from the opening balance at the start of the fiscal
year, but there was no impact on the opening balance.
As a result, in the six months ended September 30, 2021, net sales declined by 332 million yen, cost of sales declined
by 299 million yen, selling, general and administrative expenses declined by 32 million yen, and ordinary profit and profit
before income taxes each increased by 2 million yen. There was no impact on operating profit.
In accordance with the transitional treatment prescribed in paragraph 28-15 of the Accounting Standard for Quarterly
Financial Reporting (ASBJ Statement No. 12, March 31, 2020), the Company has not presented information on revenue
from contracts with customers broken down for the six months ended September 30, 2020.
The company applied the Accounting Standard for Fair Value Measurement (ASBJ Statement No. 30, July 4, 2019,10

Medical System Network Co., Ltd.(4350) Consolidated Financial Results for the Six Months Ended September 30, 2021

hereinafter, “fair value measurement standard”) and related implementation guidance from the beginning of the current
fiscal year. In accordance with the transitional treatment prescribed in paragraph 19 of the fair value measurement
standard and paragraph 44-2 of the Accounting Standard for Financial Instruments (ASBJ Statement No. 10, July 4, 2019),
the new accounting policy prescribed in the fair value measurement standard will be applied prospectively. There was no
impact on the quarterly consolidated financial statements.

11Medical System Network Co., Ltd.(4350) Consolidated Financial Results for the Six Months Ended September 30, 2021

(Segment information)
I. Six months ended September 30, 2020 (from April 1, 2020 to September 30, 2020)
Information on sales and profit (loss) by reporting segment(Millions of yen)
Reporting segments
Community Leasing andPharmacy
FacilityNetwork
related
Segment
Segment

Meal
Catering
Segment

Other
Segment

Total

Amounts on
consolidated
Adjustments
statement of(Note 1)income(Note 2)

Net sales
Sales to externalcustomers
Intersegment sales ortransfers

48,539

1,146

1,248

110

51,045－51,045

0

291

－

－

292

(292)

－

Total

48,540

1,438

1,248

110

51,337(292)

51,045

Segment profit (loss)

2,369

16

(13)

(13)

2,359

(1,003)

1,355

Notes: 1. The negative 1,003 million yen adjustment to segment profit (loss) includes 145 million yen in elimination ofintersegment transactions and 1,148 million yen in companywide expenses not allocated to reporting segments.
Companywide expenses mainly refer to general expenses that do not belong to reporting segments.
2. Segment profit (loss) is adjusted with operating profit (loss) in the quarterly consolidated statement of income.
II. Six months ended September 30, 2021 (from April 1, 2021 to September 30, 2021)
1. Information on sales and profit (loss) by reporting segment(Millions of yen)
Reporting segment
Community Leasing andPharmacy
FacilityNetwork
related
Segment
Segment

Meal
Catering
Segment

Other
Segment

Total

Amounts on
consolidated
Adjustments
statement of(Note 1)income(Note 2)

Net sales
Sales to externalcustomers
Intersegment sales ortransfers

49,663

1,186

1,166

152

52,169－52,169

0

350

－

－

350

(350)

－

Total

49,663

1,536

1,166

152

52,519(350)

52,169Segment profit (loss)

2,885

32

1

(12)

2,906

(1,043)

1,862

Notes: 1. The negative 1,043 million yen adjustment to segment profit (loss) includes 117 million yen in elimination ofintersegment transactions and 1,161 million yen in companywide expenses not allocated to reporting segments.
Companywide expenses mainly refer to general expenses that do not belong to reporting segments.
2. Segment profit (loss) is adjusted with operating profit (loss) in the quarterly consolidated statement of income.
2. Changes in reporting segments, etc.
As noted in the section on accounting policy changes, the Company changed its accounting policy and applied the
Accounting Standard for Revenue Recognition from the start of the current fiscal year, and segment profit and loss
calculation methods have changed similarly.
The effect of this change was to reduce sales in the Community Pharmacy Network Segment by 309 million yen andsales in the Leasing and Facility-related Segment by 22 million yen for the six months ended September 30, 2021. The
new accounting treatment had no effect on segment profit or loss during the period under review.

12