August 5, 2020

Summary of Consolidated Financial Results
for the First Quarter of Fiscal Year Ending March 31, 2021
(Three Months Ended June 30, 2020)[Japanese GAAP]
Listing: Tokyo Stock Exchange, First Section
Company name: Japan System Techniques Co., Ltd.
4323
URL: https://www.jast.jp
Stock code:
Representative:
Takeaki Hirabayashi, President and CEO
Contact:
Noriaki Okado, Managing Director and CFO
Tel: +81-6-4560-1000
Scheduled date of filing of Quarterly Report:
August 6, 2020
Scheduled date of payment of dividend:
Preparation of supplementary materials for quarterly financial results: None
Holding of quarterly financial results meeting:
None
Note: The original disclosure in Japanese was released on August 5, 2020 at 16:00 (GMT +9).
(All amounts are rounded down to the nearest million yen)

1. Consolidated Financial Results for the First Quarter Ended June 30, 2020
(April 1, 2020 – June 30, 2020)(1) Consolidated results of operations(Percentages represent year-on-year changes)
Net sales

Operating income

Ordinary income

Million yen%
Million yen%
Million yen
Three months ended Jun. 30, 2020
3,746 (0.6)
(201)
(183)
Three months ended Jun. 30, 2019
3,770 (8.2)
(308)
(299)
Note: Comprehensive income (million yen) Three months ended Jun. 30, 2020: (165) (-%)
Three months ended Jun. 30, 2019: (165) (-%)%-

Profit attributable toowners of parent
Million yen
%
(140)
(223)

Diluted net income per
share
Yen
Yen
(26.28)(42.14)-

Net income per share
Three months ended Jun. 30, 2020Three months ended Jun. 30, 2019(2) Consolidated financial position
Total assets
Net assets
Million yen
Million yen
As of Jun. 30, 2020
13,2305,901
As of Mar. 31, 2020
12,988
6,218
Reference: Shareholders’ equity (million yen)
As of Jun. 30, 2020:
5,870

Equity ratio
%
44.4
47.7
As of Mar. 31, 2020:

Net assets per shareYen
1,094.77
1,154.07
6,189

2. Dividends
1Q-endYen-

Fiscal year ended Mar. 31, 2020
Fiscal year ending Mar. 31, 2021
Fiscal year ending Mar. 31, 2021 (forecasts)
Note: Revisions to the most recently announced dividend forecast: None

Dividend per share
2Q-end3Q-endYear-end
Yen
Yen
Yen
0.00
28.00
0.00

-

28.00

Total
Yen
28.00
28.00

3. Consolidated Earnings Forecasts for the Fiscal Year Ending March 31, 2021 (April 1, 2020 – March 31, 2021)
There is no forecast for the fiscal year ending March 2021 because it is not possible to establish a reliable forecast at this time as weare in the process of closely estimating the impact of the global spread of COVID-19 pandemic on the forecast. An announcement
will be made promptly once it becomes possible to determine a reliable forecast.
Note: Revisions to the most recently announced consolidated earnings forecasts: None

* Notes(1) Changes in consolidated subsidiaries during the period (changes in scope of consolidation): None
Newly added: -Excluded: -(2) Application of special accounting methods for presenting quarterly consolidated financial statements: None
(3) Changes in accounting policies and accounting-based estimates, and restatements
1) Changes in accounting policies due to revisions in accounting standards, others:None2) Changes in accounting policies other than 1) above:None3) Changes in accounting-based estimates:

None4) Restatements:

None(4) Number of outstanding shares (common shares)
1) Number of shares outstanding at the end of the period (including treasury shares)
As of Jun. 30, 2020:

5,612,230 shares

As of Mar. 31, 2020:

5,612,230 shares

As of Mar. 31, 2020:

248,984 shares

2) Number of treasury shares at the end of the period
As of Jun. 30, 2020:

249,984 shares

3) Average number of shares outstanding during the period
Three months ended Jun. 30, 2020:

5,362,514 shares

Three months ended Jun. 30, 2019:

5,307,501 shares

Note 1: The current quarterly summary report is not subject to quarterly review by certified public accountants or auditing firms.
Note 2: Cautionary statement with respect to forward-looking statements
Forecasts of future performance in these materials are based on assumption judged to be valid and information available to theCompany’s management at the time the materials were prepared, but are not promises by the Company regarding future
performance. Actual results may differ materially from the forecasts. There is no forecast for the fiscal year ending March 31, 2021
because it is not possible to establish a reliable estimate of the impact of the COVID-19 pandemic at this time. Please refer to “1.
Qualitative Information on Quarterly Consolidated Financial Performance, (3) Explanation of Consolidated Forecasts and Other
Forward-looking Statements” on page 3 for details.

Japan System Techniques Co., Ltd. (4323) Financial Results for the First Quarter of FY3/21

Contents of Attachments
1. Qualitative Information on Quarterly Consolidated Financial Performance2(1) Explanation of Results of Operations

2(2) Explanation of Financial Position

3(3) Explanation of Consolidated Forecasts and Other Forward-looking Statements

3

2. Quarterly Consolidated Financial Statements and Notes

4(1) Quarterly Consolidated Balance Sheet

4(2) Quarterly Consolidated Statements of Income and Comprehensive Income

6

Quarterly Consolidated Statement of Income
For the Three-month Period

6

Quarterly Consolidated Statement of Comprehensive Income
For the Three-month Period7(3) Quarterly Consolidated Statement of Cash Flows

8(4) Notes to Quarterly Consolidated Financial Statements

9

Going Concern Assumption

9

Significant Changes in Shareholders’ Equity

9

Additional Information

9

Segment and Other Information

10

Business Combinations

11

1

Japan System Techniques Co., Ltd. (4323) Financial Results for the First Quarter of FY3/21

1. Qualitative Information on Quarterly Consolidated Financial Performance(1) Explanation of Results of Operations
In the first quarter of the current fiscal year, COVID-19 had a severe impact on consumer spending, corporate
activities and many other categories of the economy. The resulting downturns in jobs and personal income had anenormous effect on the Japanese economy. Although the state of emergency ended near the end of May, there arestill no signs of an end to this crisis and the outlook remains challenging.
In the IT industry in Japan, according to the latest statistics in the “Survey of Selected Service Industries” by the
Ministry of Economy, Trade and Industry (the final May figures), net sales continued to climb, rising 4.0% year
on year in Fiscal 2019 compared with 1.5% annual growth in fiscal 2018. However, due in part to COVID-19, net
sales in Japan’s IT industry were down 4.1% in May 2020 from in the same period of the previous fiscal year andthe outlook for the industry is extremely uncertain.
Although COVID-19 affected the business activities of the Japan System Techniques Group (Japan System
Techniques Co., Ltd. (JAST) and its consolidated subsidiaries), the impact on first quarter performance was not
significant. This was mainly because of the consistent receipt of new o rders as sales activities were shifted to theinternet and the ability to hold capacity utilization steady by using teleworking. First quarter net sales were 3,746
million yen (down 0.6% year on year) and there was an operating loss of 201 million yen (vs. operating loss of
308 million yen in the same period of the previous fiscal year), an ordinary loss of 183 million yen (vs. ordinary
loss of 299 million yen in the same period of the previous fiscal year), and a loss attributable to owners of parentof 140 million yen (vs. loss of 223 million yen in the same period of the previous fiscal year). Business segment
performance was as follows.
In the software business (individualized contracted software development), there was an increase in orders fromthe finance/insurance/brokerage industry but orders from the manufacturing, telecommunications, andservice/retail industries decreased. Overall, sales were about the same as in the same period of the previous fiscal
year and there were declines in outsourced processing and other costs. As a result, net sales in this businesstotaled 2,716 million yen (down 1.8% year on year) and the operating loss was 148 million yen (vs. an operating
loss of 183 million yen in the same period of the previous fiscal year).
In the GAKUEN business (development, sale and related services of operational reform packages for schools),
there were increases in IT equipment sales, sales of program products (PP) to universities and implementation
support sales. End user computing (EUC: individualized contracted development of related systems) sales
decreased. Net sales in this business totaled 553 million yen (up 21.3% year on year) and the operating loss was
11 million yen (vs. an operating loss of 42 million yen in the same period of the previous fiscal year).
In the system sales business (IT equipment sales and IT/telecom infrastructure construction), sales in the core
university and public sector categories decreased but there were strong sales at highly profitable projects andselling and other expenses decreased. Net sales in this business totaled 236 million yen (down 33.2% year onyear) and the operating income was 6 million yen (vs. an operating loss of 29 million yen in the same period of
the previous fiscal year).
In the medical big data business (inspections, analysis and related services for medical information data), sales
were much higher mainly because of an increase in support services for health insurance organizations. However,R&D and other expenses increased. Net sales in this business totaled 240 million yen (up 23.3% year on year) andthe operating loss totaled 54 million yen (vs. an operating loss of 53 million yen in the same period of theprevious fiscal year).
Characteristics of quarterly performance
Most customer inspections and other confirmation activities for accepting the delivery of JAST Group products
take place in March and September, which are the last month of the fiscal year and the last month of the first halfof the fiscal year, respectively, of most companies in Japan. Consequently, first and third quarter earnings areusually much smaller than earnings in the second and fourth quarters.

2

Japan System Techniques Co., Ltd. (4323) Financial Results for the First Quarter of FY3/21(2) Explanation of Financial Position
1) Balance sheet
Current assets at the end of the first quarter were 9,750 million yen, up 147 million yen from the end of theprevious fiscal year. This was mainly due to an increase in cash and deposits resulting from the collection of
accounts receivable-trade and the receipt of advances and to an increase in work in process. Non-current assets
were 3,479 million yen, up 94 million yen from the end of the previous fiscal year.
Current liabilities at the end of the first quarter were 5,734 million yen, up 565 million yen from the end of theprevious fiscal year. This was mainly due to increases in accrued expenses, which is included in other, andadvances received and decreases in the provision for bonuses, accounts payable-trade and income taxes payable.
Non-current liabilities were 1,594 million yen, down 7 million yen from the end of the previous fiscal year.
Net assets were 5,901 million yen at the end of the first quarter, down 316 million yen from the end of theprevious fiscal year. This was mainly due to the payment of dividends and the loss attributable to owners ofparent in the first quarter.
2) Cash flows
Cash and cash equivalents increased 1,689 million yen from 3,908 million yen at the beginning of the current
fiscal year to 5,597 million yen at the end of the first quarter.
Cash flows by category were as follows.
Net cash provided by operating activities totaled 1,924 million yen, an increase of 1,013 million yen from 911
million yen provided in the same period of the previous fiscal year. This increase was mainly due to a decrease inpayments of other payables, primarily accounts payable, and increases in proceeds from advances received andproceeds from the collection of trade receivables.
Net cash used in investing activities totaled 45 million yen, a decrease of 376 million yen from 421 million yen
used in the same period of the previous fiscal year. This was due to a decrease in payment for the purchase ofshares of subsidiaries.
Net cash used in financing activities totaled 151 million yen, compared with 292 million yen provided in the same
period of the previous fiscal year. The decrease in cash flows of 444 million yen was mainly due to a decrease in
short-term borrowings.
(3) Explanation of Consolidated Forecasts and Other Forward-looking Statements
There is no forecast for the fiscal year ending March 31, 2021 because it is not possible to establish a reliable
estimate of the impact of the COVID-19 pandemic on the JAST Group’s activities at this time. An announcement
will be made promptly once it becomes possible to determine a reliable forecast.

3

Japan System Techniques Co., Ltd. (4323) Financial Results for the First Quarter of FY3/21

2. Quarterly Consolidated Financial Statements and Notes(1) Quarterly Consolidated Balance Sheet
FY3/20(As of Mar. 31, 2020)(Thousands of yen)First quarter of FY3/21(As of Jun. 30, 2020)

AssetsCurrent assets
Cash and deposits

3,909,343

5,598,656

Notes and accounts receivable-trade

4,502,676

2,785,869

200,644

200,401

Securities
Merchandise and finished goods

71,63489,548Work in process

698,017907,125

Raw materials and supplies
Other
Allowance for doubtful accounts

1,516

1,895

238,579

179,455(19,471)(12,740)

9,602,941

9,750,211

763,597

763,372

Accumulated depreciation(462,594)(470,494)

Buildings and structures, net

301,002292,877

142,361

142,361

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

Land
Other

487,040

496,952

Accumulated depreciation(358,559)(359,307)

Other, net

128,480

137,645571,845572,883

Goodwill

437,343

399,050

Customer-related assets

181,063

164,584

Trademark right

37,34834,234

Technology assets

66,30360,775

Software64,54564,344

Total property, plant and equipment
Intangible assets

Other

7,626

7,626

794,230

730,615

Investment securities

558,208

623,577

Retirement benefit asset

465,943

466,139

Deferred tax assets

436,814535,879

Guarantee deposits

443,489

442,037

Other

162,906

155,782

Allowance for doubtful accounts(48,036)(47,023)

Total investments and other assets

2,019,325

2,176,393

Total intangible assets
Investments and other assets

Total non-current assets
Total assets

43,385,400

3,479,892

12,988,341

13,230,104

Japan System Techniques Co., Ltd. (4323) Financial Results for the First Quarter of FY3/21(Thousands of yen)First quarter of FY3/21(As of Jun. 30, 2020)

FY3/20(As of Mar. 31, 2020)
Liabilities
Current liabilities
Notes and accounts payable-trade
Short-term borrowings
Current portion of long-term borrowings

990,491

751,706

1,500,000

1,503,815

8,400

8,400

Income taxes payable

307,068

75,069Advances received

823,126

1,495,058

Provision for bonuses
Provision for bonuses for directors (and otherofficers)
Provision for loss on construction contracts

774,631

350,367

30,676

8,138-

10,622

Other
Total current liabilities

733,742

1,530,865

5,168,137

5,734,044

2,800

700

47,64355,521

1,845

2,460

992,271996,954

Non-current liabilities
Long-term borrowings
Provision for share-based remuneration for directors(and other officers)
Provision for retirement benefits for directors (andother officers)
Retirement benefit liability
Deferred tax liabilities

61,06253,766Other496,364

484,977

1,601,987

1,594,379

6,770,124

7,328,424

1,076,669

1,076,669

Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Share capital
Capital surplus

1,113,912

1,113,912

Retained earnings

4,178,503

3,886,066

Treasury shares(233,240)(233,240)

Total shareholders’ equity

6,135,844

5,843,407

Valuation difference on available-for-sale securities

113,396

145,704

Foreign currency translation adjustment(30,713)(91,200)

Remeasurements of defined benefit plans(28,978)(27,486)

Total accumulated other comprehensive income

53,70427,01828,66831,254

6,218,217

5,901,679

12,988,341

13,230,104

Accumulated other comprehensive income

Non-controlling interests
Total net assets
Total liabilities and net assets

5Japan System Techniques Co., Ltd. (4323) Financial Results for the First Quarter of FY3/21(2) Quarterly Consolidated Statements of Income and Comprehensive Income
Quarterly Consolidated Statement of Income(For the Three-month Period)First three months of FY3/20(Apr. 1, 2019 – Jun. 30, 2019)(Thousands of yen)First three months of FY3/21(Apr. 1, 2020 – Jun. 30, 2020)

Net sales

3,770,217

3,746,215

Cost of sales

3,154,602

3,017,984

Gross profit

615,614728,230

Selling, general and administrative expenses

924,077

929,725

Operating loss

(308,463)(201,495)

Interest income

3,152

5,718

Dividend income

2,838

3,469

Rental income

1,578

803

Non-operating income

Foreign exchange gains
Subsidy income
Other
Total non-operating income

-

2,599

11,596

3,139

943

3,428

20,10919,158Non-operating expenses
Interest expenses

765

722

9,870

-

Rental expenses

128

127

Other

282

206

11,047

1,056

Ordinary loss

(299,400)(183,393)

Loss before income taxes(299,400)(183,393)

Income taxes(70,361)(46,862)Loss(229,039)(136,531)

Foreign exchange losses

Total non-operating expenses

Profit (loss) attributable to non-controlling interests
Loss attributable to owners of parent

6(5,363)

4,396(223,676)(140,928)

Japan System Techniques Co., Ltd. (4323) Financial Results for the First Quarter of FY3/21

Quarterly Consolidated Statement of Comprehensive Income(For the Three-month Period)First three months of FY3/20(Apr. 1, 2019 – Jun. 30, 2019)(Thousands of yen)First three months of FY3/21(Apr. 1, 2020 – Jun. 30, 2020)(229,039)(136,531)

Loss
Other comprehensive income
Valuation difference on available-for-sale securities

8,316

32,308Foreign currency translation adjustment

59,205(62,289)

Remeasurements of defined benefit plans, net of tax(3,564)

1,492

Total other comprehensive income
Comprehensive income

63,956(28,488)(165,082)(165,020)(160,513)(167,614)(4,569)2,594

Comprehensive income attributable to:Comprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests

7

Japan System Techniques Co., Ltd. (4323) Financial Results for the First Quarter of FY3/21(3) Quarterly Consolidated Statement of Cash FlowsFirst three months of FY3/20(Apr. 1, 2019 – Jun. 30, 2019)(Thousands of yen)First three months of FY3/21(Apr. 1, 2020 – Jun. 30, 2020)(299,400)(183,393)

Depreciation

14,144

16,124

Amortization of software

6,714

3,969

Amortization of goodwill

22,00914,274

Amortization of customer-related assets

15,966

6,634

-

925

Cash flows from operating activities
Loss before income taxes

Amortization of trademark
Amortization of technology assets

-

1,642

(386,757)(424,142)

Increase (decrease) in retirement benefit liability

2,058

7,089

Decrease (increase) in retirement benefit asset(5,173)(195)

Interest and dividend income(5,990)(9,188)765

722

Decrease (increase) in trade receivables

1,588,636

1,694,552

Increase (decrease) in advances received

389,430

672,828

Decrease (increase) in inventories(225,196)(227,887)

Increase (decrease) in trade payables(273,864)(235,938)

Other, net

238,098

853,300

Subtotal

1,081,439

2,191,318

6,233

8,980

Increase (decrease) in provision for bonuses

Interest expenses

Interest and dividends received
Interest paid

(577)

(739)

Income taxes paid

(175,586)(274,813)

Net cash provided by (used in) operating activities

911,508

1,924,746

Decrease (increase) in time deposits

17,450-Purchase of property, plant and equipment(16,041)(16,995)

Purchase of software(2,633)(10,530)(450)(18,360)(416,822)

-

186

1,908

(2,194)(1,027)

(807)

(237)

(421,314)(45,241)

Net increase (decrease) in short-term borrowings

455,779

3,815

Repayments of lease obligations(11,131)(2,188)

Repayments of long-term borrowings(2,100)(2,100)Cash flows from investing activities

Purchase of investment securities
Purchase of shares of subsidiaries resulting in change inscope of consolidation
Proceeds from refund of guarantee deposits
Payments of guarantee deposits
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities

Purchase of treasury shares

(80)

-

Dividends paid

(149,982)(151,509)

Net cash provided by (used in) financing activities

292,485(151,982)

Effect of exchange rate change on cash and cash equivalents

12,303(38,122)

Net increase (decrease) in cash and cash equivalents

794,983

1,689,399

Cash and cash equivalents at beginning of period

4,204,722

3,908,254

Cash and cash equivalents at end of period

4,999,706

5,597,654

8

Japan System Techniques Co., Ltd. (4323) Financial Results for the First Quarter of FY3/21(4) Notes to Quarterly Consolidated Financial Statements
Going Concern Assumption
Not applicable.
Significant Changes in Shareholders’ Equity
Not applicable.
Additional Information
Effect of COVID-19 on accounting estimates
There are no significant changes to the assumptions used for accounting estimates, including the assumptions
concerning the further spread of COVID-19, the end of this crisis and other related items that are explained in“Section 5 1. (1) Notes to the Consolidated Financial Statements (Supplementary Information)” of the Securities
Report for the fiscal year that ended in March 2020.
Board Benefit Trust (BBT)
Based on the resolution of the 46th Annual General Meeting of Shareholders, JAST on June 26, 2018 terminatedthe directors’ retirement benefit system and established a Board Benefit Trust (BBT) for the purpose of increasing
motivation for contributing to the medium to long-term growth of sales and earnings and an increase in corporate
value. The BBT plan clearly links the compensation of directors with the JAST stock price. Furthermore,
directors share with shareholders the benefits of a higher stock price as well as the risk of a lower stock price.
1) Overview
This is a stock compensation plan in which directors receive stock compensation through a BBT. The BBT
acquires JAST stock using cash contributions from JAST as the source of funds. Directors (excluding external
directors; same afterward unless indicated otherwise) receive stock compensation or a monetary amountequivalent to the market value of the stock in lieu of stock compensation in accordance with the rules on the stockcompensation plan for directors. In principle, a director becomes eligible for stock compensation only after theindividual is no longer a JAST director.
2) JAST stock held by the BBT
The book value (excluding associated expenses) of JAST stock held by the BBT is shown as treasury shares in the
net assets section of the consolidated balance sheet. As of the end of the first quarter, the BBT held 47,800 sharesof JAST stock with a book value of 87,713 thousand yen.

9

Japan System Techniques Co., Ltd. (4323) Financial Results for the First Quarter of FY3/21

Segment and Other Information
Segment information
I. First three months of FY3/20 (Apr. 1, 2019 – Jun. 30, 2019)
1. Information related to net sales and profit or loss for each reportable segment
Softwarebusiness

GAKUEN System sales
businessbusiness(Thousands of yen)

Medicalbig data
business

Total

Amounts shown on
Adjustment quarterly consolidated(Note 1)statement of income(Note 2)

Net sales
1. External sales
2. Inter-segment sales
and transfers

2,765,431

456,157

353,670

194,957

3,770,217-

3,770,217

14,453

2,049

7,254

-

23,757(23,757)-

Total

2,779,885

458,207360,925

194,957

3,793,974(23,757)

3,770,217

Segment profit (loss)(183,731)(42,932)(29,397)(53,623)(309,684)

1,221(308,463)

Notes: 1. Segment profit (loss) adjustment is eliminations of inter-segment transactions.
2. Segment profit (loss) is consistent with operating loss shown on the quarterly consolidated statement of income.
2. Information related to impairment losses on non-current assets, goodwill, etc. for each reportable segment
Significant change in goodwill
In the first quarter of FY3/20, there was a business combination due to the acquisition of the stock of AG NET PTE. LTD. A
provisional amount of goodwill in the software business resulting from this acquisition was used initially because theallocation of the acquisition cost had not been completed. The allocation of the acquisition cost was completed at the end of
FY3/20, resulting in the finalization of the provisional accounting treatment and a revision in the amount of goodwill. The
revised goodwill resulting from this acquisition is 303,284 thousand yen. For more information, please see “Notes, Business
Combinations.”
II. First three months of FY3/21 (Apr. 1, 2020 – Jun. 30, 2020)
1. Information related to net sales and profit or loss for each reportable segment
Softwarebusiness

GAKUEN System sales
businessbusiness

Medicalbig data
business

Total(Thousands of yen)Amounts shown on
Adjustment quarterly consolidated(Note 1)statement of income(Note 2)

Net sales
1. External sales
2. Inter-segment sales
and transfers

2,716,187

553,450

236,135

240,441

3,746,215-

3,746,215

14,683

495

1,727

-

16,906(16,906)-

Total

2,730,871

553,945

237,863

240,441

3,763,121(16,906)

3,746,215

Segment profit (loss)(148,012)(11,478)
6,621(54,265)(207,134)
5,639(201,495)
Notes: 1. Segment profit (loss) adjustment is eliminations of inter-segment transactions.
2. Segment profit (loss) is consistent with operating loss shown on the quarterly consolidated statement of income.
2. Information related to impairment losses on non-current assets, goodwill, etc. for each reportable segment
Not applicable.

10Japan System Techniques Co., Ltd. (4323) Financial Results for the First Quarter of FY3/21

Business Combinations
Effect of significant revision of initial allocation of acquisition cost on comparative information
A provisional accounting treatment was used in the first quarter of the previous fiscal year for the JAST Group’s
acquisition of AG NET PTE. LTD. on May 31, 2019. The accounting treatment was finalized at the end of theprevious fiscal year.
Due to the finalization of the provisional accounting treatment, comparative information included in the firstquarter consolidated financial statements reflects a significant revision of the initial acquisition cost allocation.
On the acquisition date (June 30, 2019 for accounting purposes), the ac quisition cost was allocated as follows:
73,537 thousand yen to customer-related assets, 39,716 thousand yen to trademark rights, 70,507 thousand yen totechnology assets, and 31,239 thousand yen to deferred tax liabilities. As a result, provisional goodwi ll of
455,805 thousand yen was reduced by 152,521 thousand yen to 303,284 thousand yen.
As the purchase of the stock of AG NET is June 30, 2019 for accounting purposes, this acquisition had no effecton the consolidated statement of income for the first quarter of the fiscal year that ended in March 2020.

This financial report is solely a translation of “Kessan Tanshin” (in Japanese, including attachments), which has been
prepared in accordance with accounting principles and practices generally accepted in Japan, for the convenience of readers
who prefer an English translation.

11