Notice: This document has been translated from Japanese original for reference purpose only, without any warranty as to its
accuracy or as to the completeness of the information. The Japanese original version is the sole official version.

Summary of Consolidated Financial Results for the Fiscal Year Ended December 31, 2023
[Japanese GAAP]
February 14, 2024
EM SYSTEMS CO., LTD.
Listed on :Tokyo Stock Exchange, First Section
ＵＲＬ https://emsystems.co.jp
4820
Hiromasa Kunimitsu, Representative director and President , Executive officer

Company nameSecurities Code

Representative
Representative
for inquiries

Megumi Seki, Director, Senior Executive
officer
Scheduled date of Annual General Meeting of Shareholders:
Scheduled date of payment of dividend:
Scheduled date of filing of Annual Securities Report:
Preparation of supplementary materials for financial results:
Holding of financial results meeting:Tel: +81-6-6397-1888
March 28,2024
March 29,2024
March 28,2024
Yes
Yes (for securities analysts)（All amounts are rounded down to the nearest million yen）
1. Consolidated Financial Results for the Fiscal Year Ended December 31, 2023(January 1, 2023 – December 31, 2023)（Percentages represent year-on-year changes）(1) Consolidated management performance (total)
Net sales

Millions ofyen％

20,355

20.3

16,91917.2

Fiscal year ended
Dec. 31, 2023
Fiscal year ended
Dec. 31, 2022
（refer to）
comprehensive
incomeOperating profit

Fiscal year ended

2,081

Dec. 31, 2023

Fiscal year ended
Dec. 31, 2023
Fiscal year ended
Dec. 31, 2022
(Refer to) Equity inearnings of affiliates

Millionsof yenProfit attributable toowners of parent

Ordinary profit％

Millions ofyen％Millions of
yen

％

2,330

(2.7)

2,869

2.8

1,962

3.6

2,395

28.1

2,791

7.0

1,893

3.5

Fiscal year ended
Dec. 31, 2022

1,949

Millionsof yen

(6.8%)

Millions ofyen(5.4%)Net income per share

Diluted net income per
share

Return on equity

Yen 100ths of a yen

Yen 100ths of a yen

％

％

％

27.76

27.68

9.8

10.3

11.4

26.75

26.66

9.9

10.9

14.2

Fiscal year ended
Dec. 31, 2023

(35)

Millions of yen

Ordinary profit on Operating profit
total assets
to net sales

Fiscal year ended
Dec. 31, 2022

(218) Millions of yen.
(2) Consolidated financial position
Total assets
As of Dec 31, 2023
As of Dec 31, 2022
(Refer to) Net capital

As of Dec. 31, 2023

Capital adequacy ratio

Net assets

Millions of yen
29,387
26,34920,464

Millions of yen
20,566
19,503

％
69.6
73.7

Millions of yen

As of Dec. 31, 2022

Net assets per share
Yen 100ths of a yen

289.47274.94
19,424

Millions of yen(3) Consolidated cash flows
Cash flows from operating
activities

Cash flows from investing
activities

Yen 100ths of a yen

Yen 100ths of a yen

Yen 100ths of a yen

Yen 100ths of a yen

1,584(2,038)

993

9,441

2,472

(577)

(1,319)8,881

Fiscal year ended
Dec. 31, 2023
Fiscal year ended
Dec. 31, 2022－

1 －Cash flows from financing Cash and cash equivalents
activities
at end of period

2. State of dividends
Annual dividends

Fiscal year ended
Dec. 31, 2022
Fiscal year ended
Dec. 31, 2023
Fiscal year ended
Dec. 31, 2024
(estimate)

PayoutDividendratio
on equity
Total dividends(consolidate (consolidatd)ed)

End of 1stquarter

End of 2ndquarter

End of 3rdquarter

End of
term

Total

Yen
100ths of
a yen

Yen
100ths of
a yen

Yen
100ths of
a yen

Yen
100ths of
a yen

Yen
100ths ofa yenMillions of
yen

％

％

－

4.00

－

8.00

12.00

848

44.9

4.5

－

7.00

－

7.00

14.00

989

50.4

5.0

－

7.00

－

7.00

14.00

45.8

3. Estimated consolidated results of the Fiscal Year Ending December 31, 2024 (January 1, 2024 – December 31, 2024)

Net salesFirst half
Full year（Percentages represent year-on-year changes）
Net
Profit attributable toincomeOrdinary profit
owners of parent
per share

Operating profit

Millionsof yen％Millionsof yen％Millionsof yen％Millions of
yen

％

Yen
100ths ofa yen

10,69522,014

8.9
8.1

885
2,573

(22.6)
10.4

1,176
3,199

(15.6)
11.5

777
2,160

(1.4)
10.1

11.00
30.56

* Notes(1) Changes in significant subsidiaries during the period (changes in scope of consolidation): None
(2) Changes in accounting policies and accounting-based estimates, and restatements
1) Changes to accounting policies accompanying revision to accounting standards, etc.
: YES2) Changes to accounting policies other than 1.
: None3) Changes to estimates in accounting: None4) Revised restatement: None(3) Number of shares outstanding (ordinary stock)
1. Number of shares outstanding at end
As of Dec. 31,
of term (including own stock)2023
As of Dec. 31,
2. Number of own shares at end of term
2023
3. Average number of shares outstanding
As of Dec. 31,
during term (quarterly total)
2023

74,514,800
shares

As of Dec. 31, 2022

74,514,800
shares3,818,649
shares

As of Dec. 31, 2022

3,865,149
shares

70,680,919
shares

As of Dec. 31, 2022

70,801,285
shares(Refer to) Summary of Non-Consolidated Financial Results

1. Non-consolidated Financial Results for the Fiscal Year Ended December 31, 2023 (January 1, 2023 – December 31, 2023)(1) Non-consolidated operating results
Net sales

Fiscal year ended
Dec. 31, 2023
Fiscal year ended
Dec. 31, 2022

Millions ofyen％Millions ofyen

17,288

7.6

16,06618.2

Net income per share
Fiscal year ended
Dec. 31, 2023
Fiscal year ended
Dec. 31, 2022

（Percentages represent year-on-year changes）
Operating profit

Ordinary profit

Net income％

Millionsof yen％Millions of
yen

1,744

(19.2)

2,381(16.1)

1,704(13.4)

2,157

24.7

2,838

12

1,967

(3.2)

Diluted net income pershare

Yen 100ths of a yen

Yen 100ths of a yen

24.12

24.04

27.79

27.71

.

－

2 －

％

(2) Non-consolidated financial position

As of Dec. 31, 2023
As of Dec. 31, 2022
(Refer to)
Shareholders’ equity

Total assets

Net assets

Millions of yen
26,37625,230Millions of yen
19,712
18,977

As of Dec.
31, 2023

19,657

Millions ofyen

Capital adequacy ratio

％
74.5
75.0
As of Dec.
31, 2022

18,922

Net assets per share
Yen 100ths of a yen

278.05267.83
Millions ofyen* The current financial report is not subject to audit by certified public accountants or audit firms.
* Explanation of appropriate use of earnings forecasts, and other special items
Note concerning forward-looking statements
Estimates of future performance in this report are based on assumptions judged to be valid and information

available to the Company’s management at the time the materials were prepared, but are not promises by theCompany regarding future performance. Actual results may differ significantly from these forecasts for a numberof reasons. Please refer to “1. Overview of Results of Operations, (4) Outlook” on page 5 for forecast assumptions
and notes of caution for usage.

－

3 －TABLE OF CONTENTS OF ATTACHED MATERIALS

1.

Overview of management performance, etc. ..............................................................................................5(1) Explanation regarding operating results ..................................................................................................5(2) Overview of financial position in the current period ...............................................................................6(3) Cash flows ................................................................................................................................................7(4) Outlook ....................................................................................................................................................82.

Basic Approach to the Selection of Accounting Standards .........................................................................83.

Consolidated financial statements and major explanatory notes ................................................................9(1)

Consolidated balance sheet ..................................................................................................................9(2)

Consolidated statements of income and consolidated statements of comprehensive income ............11(3)

Consolidated Statement of Changes in Equity ...................................................................................14(4)

Consolidated Statement of Cash Flows ..............................................................................................16(5)

Notes to Consolidated Financial Statements......................................................................................18－

4 －1. Overview of management performance, etc.
(1) Explanation regarding operating results
During the fiscal year ending December 31, 2023, the Japanese economy remained under the influence offluctuating foreign exchange rates as well as high energy and raw material prices, which affected corporate
earnings.
In the medical industry, the Group's main customer base, the introduction of a system that enables online
verification of eligibility information at medical institutions’ points of contact using a My Number Card or
health insurance card is progressing. The Group has been gradually increasing the number of installations,mainly among existing customers, since January 2021, and as of December 31, 2023, we have responded tonearly all customers who have already applied.
In addition, use of these online eligibility verification systems began in January 2023, and the commencementof electronic processing of prescriptions, which are currently paper-based, will gradually also increase thenumber of applications for installation and expand deployment of the system.
In order to improve the Group’s name recognition and expand sales of the next-generation MAPs series products, we began restructuring the Group’s internal organizational structure FY2022 and ran our first TV commercial to increase our market share. In addition, we promoted the website renewal, the utilization of MA tools
and the enhancement of online seminars and installation case study contents. in order to enhance digitalmarketing. Consequently, we have seen steady results in the clinic segment, including an increase in thenumber of system installations.
At the same time, the Group acquired additional Good Cycle System Inc. shares on February 28 and all sharesof Unike Software Research Co., Ltd. and its management company on June 30. While making these into
consolidated subsidiaries contributed significantly to an increase in net sales in the consolidated fiscal year
concerned, sales and administrative expenses also increased due to amortization of goodwill, airing of TV
commercials, and payments of special compensation to employees who contributed to the expansion of businessperformance.
As a result, performance during the consolidated fiscal year concerned cumulative period was 20,355 million
yen in sales (a 20.3% increase compared to the same period in the previous year), 2,330 million yen in operating
profits (a 2.7% decrease) 2,869 million yen in ordinary profits (a 2.8% increase), and 1,962 million yen in thisquarterly net income belonging to parent company shareholders (a 3.6% increase).
By segment results are as follows.
(IT Systems for Pharmacies)
In regard to IT systems and related business for pharmacies, in addition to progress in replacements for“MAPs for PHARMACY DX” among our customers, initial sales also increased due to an increase in the numberof hardware replacements following the end of extended support for Windows 8.1. In addition, with Good Cycle
System Inc. and Unike Software Research Co., Ltd. becoming consolidated subsidiaries, billing sales increased
significantly in line with the increase in the number of customers. However, SG&A expenses have increased
due to the implementation of the Group’s TV commercials, enhanced digital marketing, and special
compensation paid to employees.
Consequently, IT Systems and Related Business for Pharmacies for this consolidated fiscal year resulted in
16,159 million yen in sales (a 19.4% increase compared with the same period in the previous year) and 2,939
million yen in operating profits (a 3.0% decrease).

(IT Systems for Clinics)
In regard to IT systems and related business for clinics, in addition to the organizational restructuring implemented in FY2022 , we are also taking a wide range of approaches utilizing web marketing.
Initial sales increased significantly due to the expansion of implementation measures for the online eligibility
verification system as well as expansion in sales of "MAPs for CLINIC," and billing sales in the medical segment also
grew steadily. However, SG&A expenses increased due to initiatives seeking to expand market share in the medical
systems market and due to special compensation paid to employees.
Consequently, IT Systems and Related Business for Clinics for this consolidated fiscal year resulted in 2,802
million yen in sales (a 27.3% increase compared to the same period in the previous year) and 130 million yen in
operating losses (previous period: 409 million yen in operating losses).
(IT Systems for Long-term Care/Welfare)In regard to IT systems and related business for long-term care/welfare, billing sales remain bullish due to anincrease in the number of licenses, while depreciation associated with the release of “MAPs for NURSING CARE”
has commenced and our SG&A expenses have also risen due to our efforts in expanding sales channels.
Consequently, IT Systems and Related Business for Long-term Care/Welfare for this consolidated fiscal year
resulted in 550 million yen in sales (a 2.1% increase compared with the same period in the previous year) and 540
million yen in operating losses (previous period: 211 million yen in operating losses)(Other businesses)
In addition to expansion of the cashless business of ChoQi Co., Ltd., sales also increased due to the contribution of
the temporary staffing business of Unike Software Research Co., Ltd. This increase in sales led to an improvementin the overall profitability of the segment, and operating income was positive.
Consequently, other business for this consolidated fiscal year resulted in 973 million yen in sales (a 36.5% increase
compared to the same period in the previous year) and 48 million yen in operating profits (previous period: 42 million
yen in operating losses).
（Segmented sales and operating profits and losses are the amounts before elimination of internal transactions
between segments.）(2) Overview of financial position in the current period(Assets)
Current assets at the end of the current consolidated fiscal year were 14,800 million yen, an increase of 951
million yen from the end of the previous consolidated fiscal year. This was mainly due to solid performance, as wellas to a 560 million yen increase in cash and deposits and a 321 million yen increase in notes and accounts receivable
resulting from acquisition of shares of Unike Software Research Co., Ltd. and its management company,
Launchpad13 Inc. and acquisition of additional Good Cycle System Inc. shares. Fixed assets totaled 14,587 million
yen, up 2,086 million yen from the end of the previous consolidated fiscal year. This was mainly due to an increaseof 1,286 million yen in goodwill resulting from the aforementioned acquisition of shares, as well as due to anincrease of 1,151 million yen in intangible fixed assets.
As a result, total assets were 29,387 million yen, an increase of 3,037 million yen from the end of the previous
consolidated accounting year.
(Liabilities)
Current liabilities at the end of the current consolidated fiscal year were 5,618 million yen, an increase of 673
million yen from the end of the previous consolidated fiscal year. Although there was a 276 million yen decrease innotes and accounts payable and a 359 million yen decrease in income taxes payable, etc., this was mainly due to a
966 million yen increase in long-term loans scheduled for repayment within a year, a 306 million yen increase inother current liabilities due to an increase in deposits received in connection with the expansion of the cashlessbusiness in the other businesses segment. Fixed liabilities totaled 3,202 million yen, up 1,301 million yen from theend of the previous consolidated fiscal year. This was mainly due to a 926 million yen decrease in net defined
benefit liability in connection with termination of the retirement benefit system, a 396 million yen increase longterm accounts payable, a 1,527 million yen increase in long-term loans payable, and a 329 million yen increase indeferred tax liabilities.
As a result, total liabilities were 8,821 million yen, an increase of 1,974 million yen from the end of the previous
consolidated fiscal year.

－

6 －(Net assets)
Net assets at the end of the current consolidated fiscal year were 20,566 million yen, an increase of 1,062 million
yen over the end of the previous fiscal year. This was mainly due to a 902 million yen increase in retained earnings
as a result of strong business performance.
As a result, the capital adequacy ratio was 69.6% (compared to 73.7% at the end of the previous consolidated fiscal
year).

(3) Cash flows
The amount of cash and cash equivalents (hereinafter “funds”) during the consolidated fiscal year concerned totaled
9,441 million yen, an increase of 560 million yen compared to the end of the previous consolidated fiscal year.
The status of each type of cash flow during the consolidated fiscal year concerned as well as their main factors are as
follows.
(Net cash provided by (used in) operating activities)
Net cash provided by operating activities was 1,584 million yen. Although there were 2,750 million yen inearnings before taxes in the current consolidated fiscal year and 1,249 million yen in amortization, this was mainly
due to 1,074 million decrease in liabilities for retirement benefits and 520 million decrease in trade payables.
(Net cash provided by (used in) investing activities)
Funds spent as a result of investment activities amounted to 2,038 million yen. Although there were 971 million
yen in income from leasing investment properties, this was mainly due to 2,007 million yen paid to acquire stocks ofaffiliates, 586 million yen paid to acquire intangible fixed assets related to software development, 212 million yen
paid in relation to leasing investment properties.
(Net cash provided by (used in) financial activities)
Net cash used in financing activities amounted to 993 million yen. Although there were 2,500 million in loans
from financial institutions, this was mainly due to 410 million in repayments of the same borrowings and 1,060
million in dividend payments.

－

7 －(4) Outlook
Regarding the future outlook, due to the aging of society and declining birthrate, there is an urgent need forreforms in the medical, long-term care and welfare industries, and medical and long-term care/welfare workers,
such as in regard to infection control measures and digital transformation in the medical field, are expected to play
an increasingly important role for local residents.
In addition, drug prices continue to be in unfavorable due to annual medical fee revisions. Pharmacies are
shifting from dealing with goods to dealing with people, and there is a demand for services that are “closer to home”
for patients.
The government has announced a policy to promote digital transformation in the medical field, and is currently
promoting the introduction of an online qualification confirmation system and an electronic prescription systemthat utilize Individual Number Cards. By utilizing ICT, it is expected that the need for information coordination
with other occupations, including long-term care/welfare, will increase.
Through the MAPs series, our shared information system platform, the Group will provide medical and long-termcare/welfare workers with even greater support in improving safety and work efficiency by sharing information
through cloud-based systems.
The projected consolidated results for the fiscal year ending December 2024, reflecting the above circumstances,
are as follows: Net sales of 22,014 million yen (up 8.1% year on year), operating income of 2,573 million yen (up10.4% year on year), ordinary income of 3,199 million yen (up 11.5% year on year), net income attributable toparent company shareholders of 2,160 million yen (up 10.1% year on year)

2. Basic Approach to the Selection of Accounting Standards
The EM SYSTEMS Group has adopted Japanese GAAP for accounting standards to ensure comparability withdomestic peer companies.

－

8 －3. Consolidated financial statements and major explanatory notes(1) Consolidated balance sheet(Units: millions of yen)
As of December 31, 2022

As of December 31, 2023

AssetsCurrent assets
Cash on hand and in banks
Notes and accounts receivable
Merchandise and products
OthersAllowance for bad debts
Total current assets
Fixed assets
Tangible fixed assets
Buildings and structures
Accumulated depreciation
Buildings and structures (net)Land
Lease assets
Accumulated depreciation
Lease assets (net)
Rental assets
Accumulated depreciation
Rental assets (net)Others
Accumulated depreciation
Others (net)Total tangible fixed assets
Intangible fixed assets
Software
Software in progress
Goodwill
OthersTotal intangible fixed assets
Investments and other assets
Investment securities
Investment real estate
Accumulated depreciation
Investment real estate (net)
Allowance for bad debts
Deferred tax asset
Net defined benefit asset
Other
Allowance for bad debts
Total investments and other assets
Total fixed assets
Total assets

－

9 －

8,881
2,761
1,084
1,123
(1)
13,849

9,441
3,082
1,136
1,139
(0)
14,800

1,322
(747)
575
474
144
(46)
97
47
(46)
1
972
(749)
222
1,371

1,368
(793)
575
474
137
(72)
65
47
(46)
0
1,097
(883)
214
1,330

1,574
461
188
99
2,323

2,296
164
1,475
1,250
5,186

1,263
10,574(4,054)
6,519
133
534
7
358
(11)
8,805
12,50026,349962
10,648(4,254)
6,393
209
412
－
103
(11)
8,070
14,587
29,387

(Units: millions of yen)
As of December 31, 2022

Liabilities
Current liabilities
Notes and accounts payable
Current portion of long-term loans payable
Accounts payable-other
Lease obligations
Income taxes payable, etc.
Accrued consumption taxes
Provision for bonuses
contract liability
OthersTotal current liabilities
Non-current liabilities
Long-term loans payable
Lease obligations
Deferred tax liability
Net defined benefit liability
Long-term accounts payable
Provision for product warranties
Long-term guarantee deposited
OthersTotal non-current liabilities
Total liabilities
Net assets
Shareholder's equity
Capital stock
Capital surplus balance
Retained earnings
Treasury stock
Total shareholder's equity
Cumulative amount of other comprehensive
incomeunrealized holding gains or loss on securities
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Total other cumulative comprehensive
incomeSubscription rights to shares
Non-Controlling Interest
Total net assets
Total liabilities and net assets

－

10 －

As of December 31, 2023

1,398
－
957
35
601
222
285
999
444
4,944

1,121
966
997
36
241
277
348
877
750
5,618

－
74
－
1,061
－
20
745
－
1,901
6,846

1,527
37
329
135
396
3
763
10
3,202
8,821

2,785
3,362
15,199(2,017)
19,3292,785
3,376
16,101(1,990)20,272

35
85
(26)

85
106
－

94

191

55
23
19,503
26,34956
45
20,566
29,387

(2) Consolidated statements of income and consolidated statements of comprehensive income(Consolidated statements of income)(Units: millions of yen)Previous fiscal year
(From January 1, 2022
To December 31, 2022)

Current fiscal year
(From January 1, 2023
To December 31, 2023)

16,9198,644
8,275

20,355
10,433
9,921

15
24
442
1
18
275
2,459
219
219
87
109
417
130
71
73
97
202
0
1,011

33
32
564
0
(1)
323
3,152
387
233
91
34
564
201
92
96
209
253
8
1,311

5,879

7,591

2,395

2,330

12
1,055
14
1,083

16
970
25
1,012

4
451
218
12
687
2,791

7
424
35
6
473
2,869

Sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Promotion expenses
Packing and transportation expenses
Advertising expenses
Provision of allowance for doubtful accounts
Provision for product warranties
Directors’ compensations
Salaries and allowances
Bonuses
Provision for bonuses
Share-based compensation expenses
Retirement benefit expenses
Legal welfare expenses
Traveling and transportation expenses
Communication expenses
Depreciation
Amortization of goodwill
Rents
Research and development expenses
Other
Total selling, general and administrative
expenses
Operating profit
Non-operating income
Interest income
Rent income of real estate
Miscellaneous income
Total non-operating income
Non-operating expenses
Interest expenses
Rent expenses on real estates
Equity in losses of affiliates
Miscellaneous loss
Total non-operating expenses
Ordinary profit

－

11 －

(Units: millions of yen)Previous fiscal year
(From January 1, 2022
To December 31, 2022)

Current fiscal year
(From January 1, 2023
To December 31, 2023)

－
－

33
33

－
2
－
2
2,789
916
(1)
914
1,875

1
9
140
152
2,750
732
33
766
1,984

(18)

21

1,893

1,962

Extraordinary income
Gain on termination of retirement benefit plan
Total extraordinary income
Extraordinary losses
Loss on sales of non-current assets
Loss on retirement of non-current assets
Other
Total extraordinary loss
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
Net income
Profit(Loss) attributable to Non-controllingshareholders
Profit attributable to owners of parent

－

12 －

（Consolidated statements of comprehensive income）(Units: millions of yen)Previous fiscal year
(From January 1, 2022
To December 31, 2022)

Current fiscal year
(From January 1, 2023
To December 31, 2023)

1,875

1,984

35
15
23
74
1,949

50
21
26
97
2,081

1,968

2,059

(18)

21

Net income
Other comprehensive income
unrealized holding gains or loss on securities
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Total other comprehensive income
Comprehensive income（Breakdown）
Comprehensive income concerning parent
company shareholders
Comprehensive income concerning
non-controlling shareholders

－

13 －

(3) Consolidated Statement of Changes in Equity
Previous fiscal year (From January 1st, 2022 to December 31st, 2022)(Units: millions of yen)
Shareholders’ equity

Balance at beginning of current
periodCumulative effects of changes inaccounting policies
Restated balance

Capital stock

Capital surplus

2,785

3,347

Retainedearnings

Treasury shares

14,116

Total
shareholders’equity（1,539)18,708

0
2,785

3,347

14,1160（1,539)18,708Changes of items during period
Exercise of share acquisitionrights-Dividends of surplus

（781)

（781)

Profit attributable to ownersof parent

1,893

1,893

Purchase of treasury shares
Disposal of treasury shares

（499)

（499)

22

37

15

Change in ownership interestof parent due to transactions
with non-controlling interests.
Change of scope of
consolidation－－

change of scope of equity
method(29)(29)

Net changes of items otherthan shareholders’ equity－

Total changes of items during
period

－

15

1,083

(477)

621

Balance at end of current period

2,785

3,362

15,199（2,017)

19,329

Accumulated other comprehensive income

Balance at beginning of current
periodCumulative effects of changes inaccounting policies
Restated balance

Total
Remeasuremen accumulated
ts of defined otherbenefit plans comprehensiv
e income

unrealized
holding gains orloss onsecurities

Foreigncurrencytranslation
adjustment

－

69

（49)

19

Share
acquisitionrights55

Noncontrollinginterests

42

Total net
assets18,826
0

－

69

（49)

19

55

42

18,826

Changes of items during period
Dividends of surplus（781)

Profit attributable to ownersof parent

1,893

Purchase of treasury shares（499)

Disposal of treasury shares

37

Change in ownership interestof parent due to transactions
with non-controlling interests.

－

Change of scope of
consolidation－

change of scope of equity
method(29)

Net changes of items otherthan shareholders’ equity

35

15

23

74

－

(18)

56

Total changes of items during
period

35

15

23

74

－

(18)

677

Balance at end of current period

35

85

(26)

94

55

23

19,503－14 －Current fiscal year (From January 1st, 2023 to December 31st, 2023)(Units: millions of yen)
Shareholders’ equity

Balance at beginning of current
periodCumulative effects of changes inaccounting policies
Restated balance

Retainedearnings

Capital stock

Capital surplus

Treasury shares

2,785

3,362

15,199

2,785

3,362

15,199Total
shareholders’equity（2,017)

19,329（2,017)

19,329－－Changes of items during period
Exercise of share acquisitionrights-Dividends of surplus（1,060)（1,060)

1,962

1,962

Profit attributable to ownersof parent
Purchase of treasury shares－

Disposal of treasury shares

14

26

40

change of scope of equity
method－Net changes of items otherthan shareholders’ equity－

Total changes of items during
period

－

14

902

26

942

Balance at end of current period

2,785

3,376

16,101（1,990)20,272

Accumulated other comprehensive income

Balance at beginning of current
periodCumulative effects of changes inaccounting policies
Restated balance

Total
Remeasuremen accumulated
ts of defined otherbenefit plans comprehensiv
e income

unrealized
holding gains orloss onsecurities

Foreigncurrencytranslation
adjustment

35

85

（26)

94

Share
acquisitionrights

Noncontrollinginterests

55

23

Total net
assets

19,503

－
35

85

（26)

94

55

23

19,503

Changes of items during period（1,060)

Dividends of surplus
Profit attributable to ownersof parent

1,962

Purchase of treasury shares－

Disposal of treasury shares

40

change of scope of equity
method－Net changes of items otherthan shareholders’ equity

50

21

26

97

0

21

120

Total changes of items during
period

50

21

26

97

0

21

1,062

Balance at end of current period

85

106

－

191

56

45

20,566－15 －(4) Consolidated Statement of Cash Flows(Units: millions of yen)Previous fiscal year
(From January 1, 2022
To December 31, 2022)

Current fiscal year
(From January 1, 2023
To December 31, 2023)

2,789
873
97
(6)
62

2,750
1,249
209
7
(1,074)

(29)

(17)

(118)
(342)

(57)
(281)

(3)

(1)

(12)
(1,055)
220
4
218
－
2
－
－
87

(16)
(970)
212
7
35
1
9
140
(33)
91

(205)

269

(396)
(73)

9
(53)

546

(520)

97
626
－
27
3,411
12
(4)
(1,027)
80
2,472

17
203
396
43
2,627
16
(7)
(1,100)48
1,584Cash flows from operating activities
Profit before income taxes
Depreciation
Amortization of goodwill
Decrease (increase) in net defined benefit asset
Increase (decrease) in net defined benefit liability
Increase (decrease) in provision for productwarranties
Increase (decrease) in provision for bonuses
Increase (decrease) in contract liability
Increase (decrease) in allowance for doubtful
accounts
Interest and dividend income
Rent income of real estate
Expenses of real estate rentInterest expenses
Equity gains (losses) of affiliated companies
profit on sale of securities(profit)
Loss on retirement of non-current assets
Loss (gain) on step acquisitions(profit)
Gain on termination of retirement benefit plan
Share-based compensation expenses
Decrease (increase) in notes and accounts
receivable-trade
Decrease (increase) in inventories
Decrease (increase) in other current assets
Increase (decrease) in notes and accounts payabletrade
Increase (decrease) in accrued consumption taxes
Increase (decrease) in other current liabilities
Increase (decrease) in long-term accounts payable
Other, net
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes paid
Refund of income taxes
Net cash provided by (used in) operating activities

－

16 －

(Units: millions of yen)Previous fiscal year
(From January 1, 2022
To December 31, 2022)

Current fiscal year
(From January 1, 2023
To December 31, 2023)

(65)
(392)
(322)

(170)
(586)
(14)

－

(2,007)

1,054
(220)
35
(211)
24
(4)

971
(212)
9
－
116
(98)

(460)

－

(15)
(577)

(47)
(2,038)

－
－
(38)
(499)
(781)
(1,319)

2,500
(410)
(35)
－
(1,060)
(993)

15

20

591
8,289
8,881

560
8,881
9,441

Cash flows from investing activities
Purchase of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from purchase of investments in
subsidiaries resulting in change in scope of
consolidation
Proceeds from rental of real estate for investment
Payments for rental of real estate for investment
Collection of loans receivable
Payments of loans receivable
Proceeds from guarantee deposits received
Repayments of guarantee deposits received
Payments for acquisition of shares of relatedcompanies
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Proceeds from long-term accounts payable
Repayments of long-term accounts payable
Repayments of lease obligations
Purchase of treasury shares
Cash dividends paid
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

－

17 －

(5) Notes to Consolidated Financial Statements(Going Concern Assumption)
Not applicable.
(Accounting policy revisions)(Application of Implementation Guidance on Accounting Standard for Fair Value Measurement )The Implementation Guidance on Accounting Standard for Fair Value Measurement (ASBJ Guidance No. 31,
June 17, 2021; hereinafter “the Implementation Guidance”) applies from the beginning of the first quarter of thecurrent fiscal year, and in accordance with the provisions on transition set forth in Item 27-2 of the
Implementation Guidance, we have decided to prospectively adopt the new accounting policy stipulated therein.
There will have no impact on our consolidated financial statements.

－

18 －

(Segment and Other Information)
Segment information
1. Overview of reportable segment
Segments used for financial reporting are the EM SYSTEMS Group’s constituent units forwhich separate financial information is available and for which the Board of Directors performs
periodic studies for the purposes of determining the allocation of resources and evaluating
performance.
The EM SYSTEMS Group consists of business units organized according to product categories
and business operations that are divided among different companies. For the purpose of financial
reporting, there are four reportable segments: IT Systems and Related Business for Pharmacies,
IT Systems and Related Business for Clinics, IT Systems for Long-term care/welfare and Other
Businesses.
Major products for each reportable segment are as follows:
Reportable segment

Major products

IT Systems and Related
Business for Pharmacies

Development and sales of systems for pharmacies

IT Systems and Related
Business for Clinics

Development and sales of systems for clinics

IT Systems for Long-termcare/welfare

Development and sales of systems for nursing care service providers

Other Businesses

Management of pharmacies, cashless projects , development ofstatistical information analysis and temporary help business

2. Calculation methods for net sales, profit/loss, assets, liabilities and other items for each reportable segment
The accounting methods for reportable segments comply with accounting policies used for the
preparation of the consolidated financial statements.
Profit for reportable segments is operating profit figures.
Inter-segment sales and transfers are based on prevailing market prices.

－

19 －

3. Information related to net sales, profit/loss, assets, liabilities and other items for each reportable segment
Previous fiscal year (From January 1st, 2022 to December 31st, 2022)(Units: millions of yen)

Reportable segment

Amounts
recorded in

IT Systems

IT Systems

and Related

and Related

Business for

Business for

Pharmacies

Clinics

IT Systems forLong-termcare/welfare

Adjustment
Other
Businesses(Note1.2.3)

Total

consolidated
financialstatements(Note4)

Net sales
initial sales

6,463

1,135

40

－

7,639

－

7,639

system usage fee sales

4,422

791

199

－

5,413

－

5,413

consumable goods sales

1,863

61

－

－

1,925

－

1,925

maintenance service sales

765

214

299

－

1,279

－

1,279

other businesses

－

－

－

661

661

－

661

13,515

2,202

539

661

16,919－16,91913,515

2,202

539

661

16,919－16,919

15

－

－

51

66

(66)

－

13,530

2,202

539

713

16,986(66)

16,919Segment profit

3,031

(409)

(211)

(42)

2,367

28

2,395

Segment assets

5,409

1,187

1,010

729

8,338

18,011

26,349Depreciation

361

190

96

4

652

220

873

Increase in property, plant andequipment and intangible assets

299

34

241

0

575

20

595

Revenue from contracts withcustomers
External sales
Inter-segment sales and transfers
Total

Other items

Note
1. Segment profit is adjusted to be consistent with operating profit recorded in the consolidated financial
statements.
2. Adjustment of segment assets includes corporate assets of 18.722 billion yen and inter-segment elimination of 711 million yen. Corporate assets consist mainly of cash and deposits, investment real estate and other assetsthat do not belong to any reportable segment.
3. Adjustments to depreciation expenses and increases in tangible fixed assets and intangible fixed assets inother items are considered to be related to corporate assets.
4. Segment income or loss (△) is adjusted with operating income in the consolidated financial statements.

－

20 －

Information on amount of sales and profit and loss by reportable segment and breakdown of income
Current fiscal year (From January 1st, 2023 to December 31st, 2023)(Units: millions of yen)

Reportable segment

Amounts
recorded in

IT Systems

IT Systems

and Related

and Related

Business for

Business for

Pharmacies

Clinics

IT Systems forLong-termcare/welfare

Adjustment
Other
Businesses

Total(Note1.2.3)

consolidated
financialstatements(Note4)

Net sales
initial sales

7,441

1,731

37

－

9,210

－

9,210

system usage fee sales

5,823

840

232

－

6,896

－

6,896

consumable goods sales

1,951

61

－

－

2,012

－

2,012

maintenance service sales

923

169

280

－

1,374

－

1,374

other businesses

－

－

－

860

860

－

860

16,140

2,802

550

860

20,355－

20,355

16,140

2,802

550

860

20,355－

20,355

18

－

－

112

131

(131)

－

16,159

2,802

550

973

20,487(131)

20,355

Segment profit

2,939

(130)

(540)

48

2,316

13

2,330

Segment assets

9,137

1,249

902

876

12,167

17,22029,387

687

203

153

4

1,048

200

1,249

3,158

83

175

0

3,417

(20)

3,397

Revenue from contracts withcustomers
External sales
Inter-segment sales and transfers
Total

Other items
Depreciation
Increase in property, plant andequipment and intangible assets

Note
1. Segment profit is adjusted to be consistent with operating profit recorded in the consolidated financial
statements.
2. Adjustment of segment assets includes corporate assets of 17.224 billion yen and inter-segment elimination of 4 million yen. Corporate assets consist mainly of cash and deposits, investment real estate and other assets that
do not belong to any reportable segment.
3. Adjustments to depreciation expenses and increases in tangible fixed assets and intangible fixed assets inother items are considered to be related to corporate assets.
4. Segment income or loss (△) is adjusted with operating income in the consolidated financial statements.

－

21 －

Related information
Previous fiscal year (January. 1, 2022 – December. 31, 2022)
1. Information about products and services
Descriptions of products and services are omitted because this information is presented in the segment
information.
2. Geographical information(1) Net sales
This information is omitted because sales to external customers in Japan accounted for more than 90% of
net sales in the consolidated statement of income.
(2) Property, plant and equipment
This information is omitted because property, plant and equipment in Japan exceeded 90% of property,
plant and equipment in the consolidated balance sheet.
3. Information of specific major customer
This information is omitted because no specific customers accounted for 10% or more of net sales in the
consolidated statement of income.

－

22 －

Current fiscal year (January. 1, 2023 – December. 31, 2023)
1. Information about products and services
Descriptions of products and services are omitted because this information is presented in the segment
information.
2. Geographical information(1) Net sales
This information is omitted because sales to external customers in Japan accounted for more than 90% of
net sales in the consolidated statement of income.
(2) Property, plant and equipment
This information is omitted because property, plant and equipment in Japan exceeded 90% of property,
plant and equipment in the consolidated balance sheet.
3. Information of specific major customer
This information is omitted because no specific customers accounted for 10% or more of net sales in the
consolidated statement of income.
【Impairment loss of non-current assets by reportable segment】
Previous fiscal year (Jan. 1, 2022 – Dec. 31, 2022)
Not applicable.
Current fiscal year (Jan. 1, 2023 – Dec. 31, 2023)
Not applicable.
【Amortization of goodwill and unamortized balance by reportable segment】
Previous fiscal year (Jan. 1, 2022 – Dec. 31, 2022)(Units: millions of yen)Amortization forthe period
Unamortizedbalance at the

IT Systems andRelated Businessfor Pharmacies

IT Systems andRelated Businessfor Clinics

-

-

75

22

97

-

-

91

97

188

IT Systems forLong-termcare/welfare

Other Businesses

Total

period-end
Current fiscal year (Jan. 1, 2023 – Dec. 31, 2023)(Units: millions of yen)Amortization forthe period

IT Systems andRelated Businessfor Pharmacies

IT Systems andRelated Businessfor Clinics

112

-

75

22

209

1,384

-

15

74

1,475

IT Systems forLong-termcare/welfare

Other Businesses

Total

Unamortizedbalance at theperiod-end【Gain on negative goodwill by reportable segment】
Previous fiscal year (Jan. 1, 2022 – Dec. 31, 2022) Not applicable.
Current fiscal year (Jan. 1, 2023 – Dec. 31, 2023) Not applicable.

－

23 －

（Per Share Information）(Units: Yen 100ths of a yen)Previous fiscal year
(From January. 1, 2022 To December 31, 2022)

Current fiscal year
(From January 1, 2023 To December 31, 2023)

Net assets per share

274.94

Net assets per share

289.47

Net income per share
Diluted net income per share

26.75
26.66

Net income per share
Diluted net income per share

27.76
27.68

Notes: 1. The basis of calculating net income per share and diluted net income per share is as follows:(Units: millions of yen)Previous fiscal year
(From January 1, 2022
To December 31, 2022)

Current fiscal year
(From January 1, 2023
To December 31, 2023)

Net income per share
Profit attributable to owners of parent
Amounts not available to common stock
shareholders
Profit attributable to owners of parent
available to common stock
Average number of shares of common stock
outstanding during the period (Shares)

1,893

1,962

－

－

1,893

1,962

70,801,285

70,680,919－－

222,945

222,918

Diluted net income per share
Adjusted profit attributable to owners ofparentIncrease in the number of shares ofcommon stock (Shares)－

Summary of potential stock not included in
the calculation of “Diluted net income per－share” since there was no dilutive effect（Subsequent Events）(Acquisition of treasury stock)
At a meeting of the Board of Directors held on February 14, 2024, the Company issued a resolution relating toacquisition of treasury stock in accordance with Article 156 of the Companies Act as interpreted and applied to Article
165-3 of the same act.
(1) Reason for acquisition of treasury stock
To implement a flexible capital policy in response to changes in the business environment and to improve capitalefficiency.
(2) Details relating to the acquisition
1. Type of shares to be acquired: Ordinary shares of the Company
2. Total number of shares to be acquired: 1,600,000 shares (maximum)(2.26% of the total number of shares issued (excluding treasury stock))
3. Total amount of shares to be acquired: 1,000,000,000 yen (maximum)
4. Acquisition period: From February 15, 2024 to December 30, 2024
5. Acquisition method: Purchase on the Tokyo Stock Exchange

－

24 －

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

－

25 －