Disclaimer: This document is an English translation of the original document in Japanese and has been
prepared solely for reference purposes. In the event of any discrepancy between this English
translation and the original in Japanese, the original shall prevail in all respects.

Consolidated Financial Results
for the Three Months Ended June 30, 2023
[Japanese GAAP]
July 28, 2023
Company name: SYSTEM RESEARCH CO., LTD.
Stock exchange listing: Tokyo Stock Exchange
Code number: 3771
URL: https://www.sr-net.co.jp/
Representative: Hiroshi Hirayama, Representative Director and President
Contact: Yoshinobu Ohta, Operating Officer, General Manager, Public Relations Office
Phone: +81-52-413-6820
Scheduled date of filing quarterly securities report: August 10, 2023
Scheduled date of commencing dividend payments: Availability of supplementary briefing materials on quarterly financial results: Not available
Schedule of quarterly financial results briefing session: Not scheduled(Amounts of less than one million yen are rounded down.)
1. Consolidated Financial Results for the Three Months Ended June 30, 2023 (April 1, 2023 to June 30, 2023)(1) Consolidated Operating Results (cumulative)(% indicates changes from the previous corresponding period.)
Profit attributable toNet sales
Operating profit
Ordinary profit
owners of parent
Three months ended
Million yen%
Million yen%
Million yen%
Million yen%
June 30, 2023
5,555
8.3
472
9.7
485
12.4
367
766.1
June 30, 2022
5,128
24.6
430
72.0
431
67.6
42(75.7)(Note) Comprehensive income: Three months ended June 30, 2023: ¥369 million [-%]
Three months ended June 30, 2022: ¥(57) million [-%]
Basic earnings pershare

Three months ended
June 30, 2023
June 30, 2022

Diluted earnings pershareYen

Yen

44.02
5.08-(2) Consolidated Financial Position
Total assets
Million yen

Net assets

13,317
As of June 30, 2023
14,181
As of March 31, 2023
(Reference) Equity: As of June 30, 2023: ¥8,906 million
As of March 31, 2023: ¥9,123 million

Million yen

8,919
9,135

Equity ratio
%

66.8
64.3

2. Dividends
Annual dividends

1stquarter-end

Yen

2nd
quarter-end

3rdquarter-end

Yen

Fiscal year-end

Yen

Fiscal year ended
0.00
March 31, 2023
Fiscal year ending
March 31, 2024
Fiscal year ending
March 31, 2024
0.00
(Forecast)
Note: Revisions to the forecast of cash dividends most recently announced: NoTotalYen

Yen

70.00

70.00

70.00

70.00

3. Consolidated Financial Results Forecast for the Fiscal Year Ending March 31, 2024 (April 1, 2023 to March31, 2024)(% indicates changes from the previous corresponding period.)
Net sales

Six months
endingSeptember 30,2023
Full year

Million yen%

10,948

4.3

Operating profit

Ordinary profit

Million yen

Million yen%803 (24.8)

Profit attributable toowners of parent% Million yen%

Basic earnings
per shareYen

803 (24.8)

580

21.4

69.41

23,815 10.4
2,516
0.5
2,542
1.0
Note: Revisions to the financial result forecast most recently announced: No

1,817

13.4

217.47* Notes:(1) Changes in significant subsidiaries during the period : No
(2) Adoption of accounting treatment specific to the preparation of quarterly consolidated financial statements: Yes(3) Changes in accounting policies, changes in accounting estimates, and restatement(i) Changes in accounting policies due to revisions to accounting standards and other regulations: No(ii) Changes in accounting policies due to other reasons: No(iii) Changes in accounting estimates: No(iv) Restatement: No(4) Number of issued shares (common shares)(i) Total number of issued shares at the end of the period (including treasury shares):
As of June 30, 2023: 8,360,000 shares
As of March 31, 2023: 8,360,000 shares(ii) Number of treasury shares at the end of the period:
As of June 30, 2023: 2,042 shares
As of March 31, 2023: 2,008 shares(iii) Average number of shares outstanding during the period (cumulative from the beginning of the fiscalyear):Three months ended June 30, 2023: 8,357,975 shares
Three months ended June 30, 2022: 8,358,048 shares* These quarterly consolidated financial results are outside the scope of quarterly review by certified public
accountants or audit firms.
* Explanation of the proper use of financial results forecast and other notes(Notes on forward-looking statements, etc.)
The financial results forecast and other forward-looking statements herein are based on information currently
available to the Company and certain assumptions that the Company deems reasonable, and the Company does
not intend to guarantee that they will be achieved. In addition, actual results may differ significantly from these
forecasts due to a wide range of factors. For the conditions assumed for the financial results forecast, precautions
for the use of the financial results forecast, etc., please refer to “(3) Explanation of Consolidated Financial Results
Forecasts and Other Forward-looking Information” on page 5 of the attachments.

Table of Contents - Attachments
1. Qualitative information on quarterly financial results ......................................................................... 2(1) Explanation of Operating Results .................................................................................................... 2(2) Explanation of Financial Position ................................................................................................... 2(3) Explanation of Consolidated Financial Results Forecasts and Other Forward-looking Information.............................................................................................................................................................. 32. Quarterly Consolidated Financial Statements and Primary Notes ................................................................. 4(1) Quarterly Consolidated Balance Sheets ..................................................................................................... 4(2) Quarterly Consolidated Statements of Income and Comprehensive Income ............................................. 6
Quarterly Consolidated Statements of Income .......................................................................................... 6
Quarterly Consolidated Statements of Comprehensive Income ................................................................ 7(3) Notes to the Quarterly Consolidated Financial Statements ........................................................................ 8(Notes on going concern assumption) .............................................................................................................. 8(Notes in the case of significant changes in shareholders’ equity) .................................................................... 8(Accounting policies adopted specially for the preparation of quarterly consolidated financial statements) .... 8
3. Other ............................................................................................................................................................... 9
Status of Production, Receipt of Orders, and Sales(1) Production ................................................................................................................................................ 9(2) Outsourcing .............................................................................................................................................. 9(3) Purchases .................................................................................................................................................. 9(4) Receipt of Orders .................................................................................................................................... 10(5) Sales ....................................................................................................................................................... 1011. Qualitative information on quarterly financial results(1) Explanation of Operating Results
During the three months ended June 30, 2023, the Japanese economy stayed on a path of moderate recovery,
especially in consumer spending and corporate capital investment, amid the ongoing normalization of economic
and social activities as COVID-19 has been reclassified to the Class V under the Infectious Diseases Control Law.
Meanwhile, its outlook remains uncertain due to prolonged surging raw materials and energy prices, thedepreciation of the Japanese yen at a record pace, and sharp rise in prices, among other factors.
In the information service industry, in which the Group operates, the industry’s total net sales for May 2023
grew by 8.3% compared with a year earlier, marking a year-on-year increase for 14 months in a row, according
to the Current Survey of Selected Service Industries released by the Ministry of Economy, Trade and Industry.
Specifically, sales of “Software Ordered,” the main segment, increased by 10.9% year on year, and sales of“Software Products” and “System Management on Commission” increased by 7.2% and 3.1%, respectively, year
on year. These results show that companies’ IT investment demand remains strong as they develop products toexpand business and strengthen competitiveness, and reform their business operations utilizing digitaltransformation (DX) technology.
In this business environment, for the three months ended June 30, 2023, net sales of SI Services Businesswere 2,051 million yen (an increase of 4.8% year on year), due to a steady IT investment demand from theautomotive-related, financial, and food manufacturing industries, the Company’s major customer sectors. Netsales of Software Development Business were 3,244 million yen (an increase of 8.9% year on year), as theCompany stably secured continuing contracts with existing customers. Net sales of Software Products Business,
which conducts businesses including sales of packaged software, were 80 million yen (an increase of 34.9% year
on year) due to increased sales of Simplex, sales and customers management software for the mail order business,among other factors. Net sales of Merchandise Sales were 103 million yen (an increase of 25.3% year on year)
due to the purchase and sale of personal computers and IT devices as well as software products, among otheritems. Net sales of Website Administration and Cloud Services (SaaS) in other category were 76 million yen (anincrease of 49.5% year on year), backed by increases in the number of new on-line shop openings and inmerchandise value due to our effective advertising.
In terms of earnings, IT investment by client companies remained strong, and the Company successfully
maintained a high operating rate of engineers. In addition, the Company received high-profit projects while also
working to avoid generating unprofitable projects through project risk management (PRM) activities, resulting
in securing profit.
As a result, for the three months ended June 30 2023, net sales were 5,555 million yen (an increase of 8.3%year on year), with operating profit of 472 million yen (an increase of 9.7% year on year), ordinary profit of 485
million yen (an increase of 12.4% year on year), and profit attributable to owners of parent of 367 million yen(an increase of 766.1% year on year) as a consequence of no significant extraordinary losses incurred during theperiod under review, on a consolidated basis.
(2) Explanation of Financial Position
Total assets as of June 30, 2023 decreased by 864 million yen year on year to 13,317 million yen, due todecreases in cash and deposits, and trade receivables and contract asset, among other factors.
Liabilities as of June 30, 2023 decreased by 648 million yen year on year to 4,397 million yen, due to decreases
in income taxes payable and provision for bonuses, among other factors, despite an increase in short-termborrowings.
Net assets as of June 30, 2023 decreased by 215 million yen year on year to 8,919 million yen, due to thepayment of dividends from retained earnings, among other factors.

2(3) Explanation of Consolidated Financial Results Forecasts and Other Forward-looking Information
No change has been made to the financial results forecasts for the six months ending September 30, 2023 andthe full year ending March 31, 2024, announced on May 10, 2023.

3

2. Quarterly Consolidated Financial Statements and Principal Notes(1) Quarterly Consolidated Balance Sheets(Thousand yen)
As of March 31, 2023
AssetsCurrent assets
Cash and deposits
Trade receivables and contract asset
Merchandise
Supplies
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures, net
Land
Other, net
Total property, plant and equipment
Intangible assets
Goodwill
Software
Other
Total intangible assets
Investments and other assets
Other
Total investments and other assets
Total non-current assets
Total assets

4

As of June 30, 2023

7,371,297
4,420,921
2,948
6,397
102,975(427)
11,904,112

7,225,775
3,719,654
4,093
6,397
109,582(369)
11,065,134

374,564
746,460
21,9191,142,943

368,908
746,460
19,8691,135,238

245,754
137,156
6,941
389,852

229,370
135,468
8,102
372,941

744,851
744,851
2,277,647
14,181,759

743,778
743,7782,251,958
13,317,092

(Thousand yen)
As of March 31, 2023
Liabilities
Current liabilities
Accounts payable - trade
Short-term borrowings
Current portion of long-term borrowings
Income taxes payable
Provision for bonuses
Other
Total current liabilities
Non-current liabilities
Long-term borrowings
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

5As of June 30, 2023

885,608
741,676458,257
1,130,038
1,169,550
4,385,131

859,172
440,000
705,540
144,861
369,552
1,300,465
3,819,592

661,036
661,036
5,046,167

577,712577,712
4,397,304

550,150
517,550
8,050,238(1,252)
9,116,686

550,150
517,550
7,833,156(1,333)8,899,523

6,545
6,545
12,3609,135,592
14,181,759

6,704
6,704
13,561
8,919,788
13,317,092

(2) Quarterly Consolidated Statements of Income and Comprehensive Income
Quarterly Consolidated Statements of Income
Three Months Ended June 30(Thousand yen)
For the three months ended
June 30, 2022

For the three months ended
June 30, 2023

5,128,232
4,092,251
1,035,981
605,161
430,820

5,555,783
4,375,461
1,180,322
707,429472,893

0
330
2,040
580
2,951

3
12,9701,586
14,559

1,740
185
1,925
431,847

1,849
3
1,853
485,599

1,286
1,286-

363,811363,811
69,321
26,06943,251766
42,48500485,599
116,420
369,179
1,201
367,978

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
Subsidy income
Other
Total non-operating income
Non-operating expenses
Interest expenses
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sale of investment securities
Total extraordinary income
Extraordinary losses
Loss on retirement of non-current assets
Loss on termination of retirement benefit plan
Total extraordinary losses
Profit before income taxes
Income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent6Quarterly Consolidated Statements of Comprehensive IncomeThree Months Ended June 30(Thousand yen)
For the three months ended
June 30, 2022

For the three months ended
June 30, 2023

43,251

369,179(149)(100,102)(100,252)(57,000)

158
158
369,337(57,767)

368,136

766

1,201

ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Remeasurements of defined benefit plans, net of tax
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests7(3) Notes to the Quarterly Consolidated Financial Statements(Notes on going concern assumption)
There are no relevant matters.
(Notes in the case of significant changes in shareholders’ equity)
There are no relevant matters.
(Accounting policies adopted specially for the preparation of quarterly consolidated financial statements)(Calculation of tax expenses)
The Company reasonably estimates the effective tax rate after applying tax effect accounting to profit before
income taxes for the fiscal year ending March 31, 2024, and multiplies profits before income taxes for the quarterby the estimated effective tax rate. However, if the estimated effective tax rate used to calculate tax expenses
would be significantly unreasonable, the normal effective statutory tax rate is used.

83. Other
Status of Production, Receipt of Orders, and Sales(1) Production
The amount of production by business category for the three months ended June 30, 2023 is as follows:
For the three months ended
June 30, 2023
Business category

Change from theprevious
corresponding
period (%)

Amount of production(million yen)
SI Services Business

2,051

104.8

Software Development Business

3,244

108.9Software Products Business

80134.9

Other76

149.5

5,452

108.0

Total
(Note) Amounts are presented based on sales prices.

(2) Outsourcing
The amount of outsourcing by business category for the three months ended June 30, 2023 is as follows:
For the three months ended
June 30, 2023
Business category

Change from theprevious
corresponding
period (%)

Amount of outsourcing(million yen)
SI Services Business
Software Development Business
Software Products BusinessTotal

792

103.6

1,331

108.2

19159.4

2,143

106.8

(3) Purchases
The amount of purchases by business category for the three ended June 30, 2023 is as follows:
For the three months ended
June 30, 2023
Business category

Change from theprevious
corresponding period(%)

Amount of purchases(million yen)
Merchandise Sales

85(Note) Amounts are presented based on purchase prices.

9117.5

(4) Receipt of Orders
The amount of orders received by business category for the three months ended June 30, 2023 is as follows:
For the three months ended
June 30, 2023
Business category
Orders received(million yen)

Change fromthe previous
corresponding
period (%)

Backlog oforders(million yen)

Change fromthe previouscorresponding
period (%)

SI Services Business

2,521

110.5

2,451

105.7

Software Development Business

3,201

98.5

2,378

107.7

Software Products Business

74138.7

99103.2

Merchandise Sales

8184.5

27

49.6

5,879

103.5

4,956

105.9

Total

(5) Sales
The amount of sales by business category for the three months ended June 30, 2023 is as follows:
For the three months ended
June 30, 2023
Business category

Change from theprevious
corresponding
period (%)

Amount of sales (million yen)
SI Services Business

2,051

104.8

Software Development Business

3,244108.9

Software Products Business

80134.9Merchandise Sales

103

125.3

Other76

149.5

5,555

108.3

Total(Note) The amount of sales by major customer and the share of the sales in total sales are as follows:
Customer

For the three months ended
June 30, 2022
Amount of sales(million yen)

TOYOTA SYSTEMS CORPORATION

732

10

For the three months ended
June 30, 2023

Share(%)

Amount of sales(million yen)
14.2

847

Share(%)
15.2