Consolidated Financial Results [Japanese GAAP]
for the Fiscal Year Ended December 31, 2022
February 13th, 2023
Listed company:
FINDEX Inc
Stock Exchange Listing:Tokyo Stock Exchange
Stock code:
3649
URL:
http://findex.co.jp/en/index.html
Representative:
Teruo Aibara, President & CEO
For inquiries:
Atsushi Fujita, Director and Head of Administration
Contact:+81-89-947-3388
Scheduled date to Annual General Meeting of Shareholders:
Scheduled date of starting payment of dividend:
Scheduled date of filing Annual Securities Report:
Availability of financial results briefing material:
Schedule of financial results briefing:

March 28,2023
March 29,2023
March 29,2023
Available
Yes for analysts

1. Consolidated Financial Results for the Fiscal Year Ended December 31, 2022
(From January 1, 2022, to December 31, 2022)*Figures are rounded down to the nearest million yen, except share and per share data*“ %” indicates year-on-year changes from the previous corresponding period(1) Consolidated Operating Results（Cumulative）
Net income attributable toowners of the parent
company(JPY MM)%(JPY MM)%(JPY MM)%(JPY MM)%FY20224,541 (8.6)
1,028 11.7
1,055 11.8722
13.6
FY2021
4,968
24.1
920 44.7
944 46.8636
47.8(Note) Comprehensive income: FY2022: 724 million yen [13.9%], FY2021: 635 million yen [47.7%]
Net sales

Operating income

Ordinary income

Net income overOrdinary
OperatingShareholder’sincome overincome overEquitytotal assets
sales
(JPY)
(JPY)
%
%
%
FY2022
28.21
19.2
22.1
22.6
FY2021
24.84
19.4
22.6
18.5
(Ref.) Share of profit (loss) of entities accounted for using equity method:
FY2022: - million yen, FY2021: - million yen(Note) No statement is indicated above for the number of diluted earnings per share because there were no diluted
shares with dilutive effect.
Basic earnings
per share

Diluted earnings
per share(2) Consolidated Financial Position
Total assets

Net assets

Net assets ratio(JPY MM)(JPY MM)FY20224,980
4,042
FY2021
4,556
3,512(Ref.) Equity amount: FY2022: 4,038 million yen, FY2021: 3,505 million yen.

%
81.1
76.9

BPS
(Book-value Per Share)(JPY)
157.63136.84

(3) Consolidated Cash Flows
Cash flow fromoperatingactivities(JPY MM)FY2022693
FY2021
750

Cash flow frominvesting activities

Cash flow fromfinancing activities(JPY MM)
(230)
(493)

(JPY MM)
(142)
(183)

Cash and cash
equivalents at theend of period(JPY MM)
2,287
2,045

Payoutratio

Dividens
over
net assets

%
34.2
33.7

%
6.6
6.5

2. Dividends

FY2021
FY2022
FY2023(Forecast)

1Q

Annual cash dividends per share
Year2Q
3Q
end

Total

Total
dividends

(JPY)
-

(JPY)
2.50
3.00

(JPY)
-

(JPY)
6.00
6.50

(JPY)
8.50
9.50

(JPY MM)
219
244

-

4.00

-

7.00

11.00

30.5

3. Forecast for the Fiscal Year Ending December 31, 2023 (From Jan. 1, 2023, to Dec.31, 2023)* Figures are rounded down to the nearest million yen, except share and per share data
* “ %” indicates year-on-year changes from the previous corresponding period
Net income
Operating
Ordinary
Earnings
Net sales
attributableto owners Basic
IncomeIncomePer
Shareof the parent company
FY2023 2Q(Cumulative)
FY2023 4Q(Full year)(JPY MM)%2,145 (4.0)
5,065 11.5

(JPY MM)%322 (29.3)
1,313
27.7

(JPY MM)%(JPY MM)%(JPY)

329 (31.6)
1,330
26.0

228
923

(28.7)
27.7

8.90
36.03

※ Notes;(1) Changes in specified subsidiaries that caused a change in the scope of consolidation: None
Newly included companies: Newly excluded companies: (2) Changes in Accounting Policies and Accounting Estimates(i) Changes in accounting policies as required by newly promulgated account pronouncement: Yes(ii) Changes other than (i) above: None(iii) Changes in accounting estimates: None(iv) Restatement: None
(Note)For more detailed illustration, please refer to “3. Consolidated Financial Statements and Notes (5) Notes toConsolidated Financial Statement (Changes in Accounting Policies)” on page 13 of the attached document.
(3) Number of Shares Outstanding (Ordinary Shares)

Number of shares outstanding at the end of theperiod (Treasury shares included)
Number of treasury shares at the end of the period

FY2022(As of Dec. 31, 2022)

FY2021(As of Dec.31, 2021)

26,608,800

26,608,800

987,475

995,175

Average number of shares at the end of the period
25,617,486
25,608,544(Note) The number of treasury stock at the end of the period includes our shares held by Japan Custody Bank,
Ltd. (Trust Account E). (161,100 shares for FY2022, 168,800 shares for FY2021)
Also, our shares held by Japan Custody Bank, Ltd. (Trust Account E) are included in the treasury stock
deducted in the calculation of the average number of shares during the period. (164,939 shares for FY2022,
173,881 shares for FY2021)

(Ref.) Non-consolidated Financial Results
1. Non-Consolidated Financial Results for the Fiscal Year Ended December 31, 2022
(From January 1, 2022, to December 31, 2022)*Figures are rounded down to the nearest million yen, except share and per share data*“ %” indicates year-on-year changes from the previous corresponding period(1) Non-Consolidated Operating Results（Cumulative）
Net sales
FY2022
FY2021(JPY MM)
4,487
4,924

%
(8.9)
23.7

Basic earnings
per share

Net income
attributable to ownersof the parent company% (JPY MM)
%
9.0
737
9.8
31.2
671
30.5

Operating income

Ordinary income(JPY MM)
1,027
947(JPY MM)
1,056
969

%
8.5
35.5

Diluted earnings
per share

(JPY)
(JPY)
FY202228.79
FY2021
26.24(Note) No statement is indicated above for the number of diluted earnings per share because there were no diluted
shares with dilutive effect.
(2) Non-Consolidated Financial Position
Total assets

Net assets

Net assets ratio(JPY MM)(JPY MM)FY20225,146
4,201
FY2021
4,678
3,671(Ref.) Equity amount: FY2022: 4,201 million yen, FY2021: 3,666 million yen.

%
81.6
78.4

2. Non-Consolidated Forecast for the Fiscal Year Ending December 31, 2023
(From Jan. 1, 2023, to Dec.31, 2023)* Figures are rounded down to the nearest million yen, except share and per share data
* “ %” indicates year-on-year changes from the previous corresponding period
Ordinary
Net sales
Net income
Income(JPY MM)%(JPY MM)%(JPY MM)%FY2023 2Q
2,120 (3.0)
327 (34.5)
227 (34.6)(Cumulative)
FY2023 4Q
5,015
11.8
1,325
25.4
920
24.7
(Full year)

BPS（Bookvalue Per Share）(JPY)
163.98143.16

Basic Earnings
Per Share
(JPY)
8.86
35.91

* This consolidated financial results report is out scope of the review by a certified public accountant nor audit
firm.
* Explanation on appropriate use of performance forecasts and other special notes.
(Cautionary Statement Regarding Forward-Looking Statements)
The performance forecast described in this report are based on information that is available to the Group, as well as
certain assumptions and estimates that are deemed to be reasonable, and we make no assurance that suchdescriptions prove to be correct. Actual figures may significantly differ due to various factors. For assumptions
used in forecasting operating results and precautions regarding the use of the forecast, please refer to “1. Status of
the Group (4) Explanation on Future Outlook” on page 6 of the attached document for further information.
(Availability of financial results briefing details)
A summary of the financial results briefing will be available on the Company's website at a later date.

Table of Contents
1. Status of the Group…………………………………………………………………………………………
(1) Business Overview of the Fiscal Year Ended December 31, 2022…………………………………….
(2) Explanation on the Financial Position for the Fiscal Year……………………………………………...
(3) Explanation on Cash Flows for the Fiscal Year………………………………………………………...
(4) Explanation on Future Outlook………………………………………………………………………....
(5) Basic Policy on Profit Distribution and Dividends for the Current and Next Fiscal Years…………….
2. Basic Approach to the Selection of Accounting Standards………………………………………………...
3. Financial Statements and Notes……………………………………………………………………………
(1) Consolidated Balance Sheet…………………………………………………………………………….
(2) Consolidated Statement of Income and Comprehensive Income……………………………………….
Consolidated Statement of Income, Cumulative………………………………………………………

2
2
5
5
6
7
7
8
8
9
9

Consolidated Statement of Comprehensive Income, Cumulative……………………………………..
(3) Consolidated Statement of Changes Equity……………………………………………………………
(4) Consolidated Statement of Cash Flows………………………………………………………………...
(5) Notes to Consolidated Financial Statement…………………………………………………………….
Note on Going Concern………………………………………………………………………………..
Changes in Accounting Policies………………………………………………………………………..
Additional Information………………………………………………………………………………...
Segment Information, etc.……………………………………………………………………………..
Per Share Information………………………………………………………………………………….
Significant Subsequent Event………………………………………………………………………….

10
11
12
13
13
13
13
14
17
17

4. Other……………………………………………………………………………………………………….. 18

1

1. Status of the Group(1) Business Overview of the Fiscal Year Ended December 31, 2022
■ Results
The consolidated financial results for 2022 are as follows.
FY2021
4,968,885
2,412,230

FY20224,541,242
1,818,396(JPY in Thousands)
Change (amount)
Change (%)(427,642)(8.6%)(593,833)(24.6%)Net sales
Cost of sales
Selling, general and
1,635,934
1,694,323
58,3893.6%
administrative expenses
Operating income
920,720
1,028,522
107,801
11.7%
Ordinary income
944,593
1,055,708
111,114
11.8%
Net income attributable to636,027
722,779
86,751
13.6%
owners of the parent
The "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020.) has been
applied from the first quarter of the current fiscal year.
For more detailed illustration, please refer to “3. Financial Statements and Notes (5) Notes to Consolidated
Financial Statements (Changes in Accounting Policies) and (Segment Information, etc.) Segment Information, 2.
Calculation of net sales, income (loss), assets, and other items by reportable segment.”■ Industry Trends and Our Initiatives
The Group (hereafter referred to as “we”) addresses a wide range of medical industry needs and develops thebest-in-class and highly scalable integrated medical solutions, from comprehensive medical systems to medical
equipment. Positioning university hospitals as our lead users, we deliver to large hospitals and small- and mediumsized healthcare organizations nationwide. Also, leveraging its technologies and reputation, we also propose andimplements our office systems to ministries, local governments, and public corporations. Further, unlocking thefuture, we have already embarked on emerging area, such as breakthrough health tech applications and medical
cloud computing.
Healthcare organizations have been forced to transform in the face of the novel coronavirus (hereafter referred toas “COVID-19”) pandemic and its widespread ramifications and challenges it poses. Utilization of Information andCommunication Technology (hereafter, referred to as “ICT”) and artificial intelligence (hereafter, referred to as“AI”), non-contact medical care, has been escalating at a frenetic pace, including the online diagnoses and the
medical robots.
We’ve witnessed incredible technological advances in medical industry and the solutions that support it. Also,
the Japanese government positioned year 2022 as the first year of medical DX (Digital Transformation),announcing that industry, government, and academia will work together to make great strides in digitizing medical
data and to promote the utilization of medical big data. Relevant initiatives are gaining momentum in this area
toward, such as harnessing real-world evidence that boost medical qualities and outcomes. Accordingly, thehealthcare organizations are further encouraged and expected to adopt the state-of-the-art medical IT systems,
which is a critical component in improving care, and of course, these factors will be the tremendous tailwinds forour business.
While demand for system upgrades remained stable throughout this 2022, our business has been impacted by aheadwind. The prolonged outbreak of COVID-19 has changed healthcare organizations' focuses of their capital
expenditures, shifting more to those related to infectious disease control. On the other hands, on the positive side,
the risk of hospitalizations and deaths from COVID-19 thankfully has been declined. Also, more people support thedowngrade of COVID-19 classification from current Category II, second highest in five tier system, to Category V,
which includes seasonal influenza, and the without-mask life.
In these manners, since people are moving on from COVID-19 and returning to their normal, pre- COVID life,
on and after 2023, we predict positive investment attitude by healthcare organizations toward higher diagnostic
support system. Our sales promotional activities, which had been constrained affected by COVID-19, has been also
returning to normal, pre-COVID level.
We have been fostering our efforts to enhance ESG and SDGs management. We have become even moredetermined to make ambitions commitments and foster proactive efforts in our journey towards ESG and SDGs
excellence, as we believe ESG is embedded into our business itself, i.e., the promotion of our solution directly
leads to the solution or mitigation of environmental and social problems. We discuss our “to be” ESG structure that
we should aim for and disclose such initiatives on our web site. As one of those initiatives, we proactively respond2

to the Carbon Disclosure Project (CDP).
Also, we progressively respond to worldwide initiatives on human rights and environment protections, such as an
approvement of “My Declaration of Human Right” announcement promulgated by Ministry of Justice, and Task
Force on Climate-related Financial Disclosures (TCFD).
Built on our philosophy “as an R&D-driven company, continues to pursue new ideas and technologies, toward
prosperous society”, we are committed to fulfill our social responsibility as a company that helps healthcareorganizations advance the quality and efficiency of their healthcare services and achieve people's healthier life.
Simultaneously, we will continuously take thorough measures to prevent infection to ensure the safety of our
stakeholders.
■Overview of segments≪System Development Business≫
The following is the results of the System Development business.

Net sales
Operating income

FY2021
4,922,640
1,137,726

FY2022
4,473,474
1,233,811(JPY in Thousands)
Change (amount)
Change (%)(449,166)(9.1%)
96,084
8.4%〇 Medical System
We are a leading company of medical information technology solutions and services and offers a wide range ofintelligent solutions. Amongst of them, “Claio”, electronic image filing system, “CNote”, electronic medical record
system, and “DocuMaker”, document management system, are flagship products and have maintained a highreputation and stable market share in large healthcare organizations.
During this consolidated fiscal year (hereafter referred to as “FY2022”), we focused on sales of the vendorneutral packaged products to our existing customers as well as new customers, and 48 hospitals and 85 clinics
newly adopted, augmented, or updated our solutions, achieving sales of ¥4,352,187 thousand.
As for the progress of the strategic alliance with Toyota Tsusho Corporation, in our first collaborative project toimplement our flagship product Claio to Sakra World Hospital (location, Bangalore, India), we launched test
operations and facilitated toward smoother cutover. We will continue more detailed test and research to create
local-realistic operation. Also, we discussed on promotion, sales channel and maintenance structure with an eye on
successful roll out of Claio and C-Note in India.
Fitting Cloud Inc., our subsidiary which delivers cloud-enabled solutions, launched development and offering of
the next-generation cloud-based infrastructure well designed for patient guidance applications at general hospitals
in 2022. In fact, its solutions have been launched and gone live at Kyoto University Hospital, one of Japan’s toptier university hospitals, in January 2023. Scaling to next height, it released three new products in developing
cloud-based EDC (Electronic Data Collection) systems and cloud-based virtual browsing environment, conducting
exhibition and sales promotion at relevant academic conferences.
〇 Office System
In this segment, we deliver products, mainly such as “DocuMaker Office”, document management systems. Our
main target includes ministry-affiliated organizations and local governments as well as healthcare organizations,for which we can leverage on strengths derived from this DocuMaker Office. Spurred by DX acceleration, thosemain targets have been promoting the introduction of electronic approval systems and official document
management systems, and inquiries and pre-sale consultations have been increasing accordingly.
Sales of this product have been steady to the target for FY2022, with 27 new or additional installations during
FY2022, resulting in cumulative sales of ¥121,286 thousand. During the fourth quarter of FY2022, one project haslaunched operation at a Tokyo Metropolitan Government-affiliated organizations, and other projects, at one
ministry-affiliated organizations and at one municipality, made progress, respectively.
We have established trusted relationship by our proven abilities and solutions and been highly reputed as “Close
on-site engagement with clients, with high consulting skills to identify issues and propose precise solutions” and“High UI/UX, easy-to-use system from the user’s perspective”. We have been steadily winning several large-scale
projects at many public organizations.
Several negotiations have been concurrently under way just before next-year budget fix and proposals. We will
accelerate digitalization in their official document management and approval process, not only of local
governments, but also of independent administrative agencies and foundations.

3

In the medical field, we also expect high demand, especially from large and medium-sized healthcareorganizations, which are our existing clients, and in this fourth quarter of FY2022, 2 installations at large
healthcare organizations made progress. We are pleased to cross-sell these cloud-based services that support theirback-office operations.
≪Health Tech≫
The following is the results of the Health Tech business.

Net sales
Operating income (loss)

FY2021
49,215(217,006)

FY2022
69,253(205,288)(JPY in Thousands)
Change (amount)
Change (%)
20,037
40.7%-

In this segment, we focused our efforts on domestic sales and on strategy formulation towards successful roll out
in overseas, of our GAP (Note 1), a Gaze Analyzing Perimeter, and GAP-screener (Note 2). The GAP is anaffordable, but breakthrough wearable device that contributes to the early detection of retina diseases such as
glaucoma. This solution eliminates the need for a dark room, which was formerly needed for exam, shortening
exam time and reduces the patient’s burden.
Furthermore, by promoting the use of this solution at comprehensive medical exams and checkup facilities, andby collecting real-world data, contribution to the technological and solution innovation, in various fields such as
pharmaceuticals and life insurance, can be expected.
As of December 31, 2022, including those sold in the previous quarters, this perimetry has been introduced to 35
healthcare organizations in Japan. Domestically, we augmented GAP introduction to university hospitals andclinics. For medical checkup facilities, we lend GAP and charge on a pay per test, so that they can easily conductvisual field test as an optional item.
However, due to our inability to establish a sufficient sales structure in Japan and delays in application for theEuropean Medical Device Regulation (EU-MDR), we were unable to reach our targeted sales volume in both Japanand overseas in FY2022. As a result, there is about 1 to 2 year delay from the original sales plan. Replenishing
resources and conducting delicate scheduling, we will continue to expand sales in FY2023 both in Japan andoverseas.
Additionally, we have been continuously conducting joint research with Kyoto University, we found that the
GAP's usefulness in detecting is not only visual field abnormalities but also MCI (early-stage dementia).
Japan Agency for Medical Research and Development (“AMED”) adopted, in its 2021 Artificial Intelligence
Implementation Research Project for Medical Engineering Collaboration, “the R& D of a screening program forslight cognitive dysfunctions, utilizing digital phenotyping of gaze point response and eyeball movements”.
Innovative medical devices will be introduced over the next several years. In order to solve many problems facedby the aging society, we will continue to engage in R& D and evolve core technologies and products from various
perspectives.
(Note 1) Gaze Analyzing Perimeter, GAP(Notification No. of medical device manufacturing and sales 38B2X10003000002)(Note 2) Gaze Analyzing Perimeter, GAP-screener(Notification No. of medical device manufacturing and sales 38B2X10003000003)

4

(2) Explanation on the Financial Position for the Fiscal YearFY2021
4,556,563
1,044,029
3,512,533

Assets (Total)
Liabilities (Total)
Net assets (Total)

FY2022
4,980,780
937,842
4,042,937(JPY in Thousands)
Change (amount)
424,216(106,186)
530,403(Assets)
Total assets as of FY2022 end amounted to ¥4,980,780 thousand, an increase of ¥424,216 thousand fromFY2021
end.
1.

Current assets
Current assets amounted to ¥4,128,302 thousand as of FY2022 end, an increase of ¥422,700 thousand fromFY2021 end, which is mainly composed of an increase of ¥241,772 thousand in cash and deposits, and anincrease of ¥276,637 thousand in contract assets.

2.

Non-Current assets
Non-current assets amounted to ¥852,477 thousand as of FY2022 end, an increase of ¥1,516 thousand fromFY2021 end, which is mainly composed of an increase of ¥32,031 thousand in tangible assets (primarily due
to an increase of ¥22,575 thousand of building, related to the headquarter relocation) and an increase of¥12,404 thousand in intangible assets (primarily due to an increase of ¥12,404 thousand of software),partially offset by a decrease of ¥42,920 thousand in investments and other assets (primarily due to a decreaseof ¥79,493 thousand of lease deposits).

(Liabilities)
Total liabilities as of FY2022 end amounted to ¥937,842 thousand, a decrease of ¥106,186 thousand fromFY2021 end.
1.

Current liabilities
Current liabilities amounted to ¥654,002 thousand as of FY2022 end, a decrease of ¥171,723 thousand fromFY2021 end, which is mainly composed of a decrease of ¥142,418 thousand in accounts payable trade.

2.

Long-term liabilities
Long-term liabilities amounted to ¥283,839 thousand as of FY2022 end, an increase of ¥65,536 thousand
from FY2021 end, which is mainly composed of an increase end of ¥23,137 thousand of allowance for stockallowances.

(Net assets)
Net assets amounted to ¥4,042,937 thousand as of FY2022 end, an increase of ¥530,402 thousand from FY2021
end. This was primarily due to an increase of ¥527,745 thousand in retained earnings.
(3) Explanation on Cash Flows for the Fiscal Year

Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of theperiodDecrease in cash and cash equivalents resulting fromexclusion of subsidiaries from consolidation
Cash and cash equivalents at the end of the period

FY2021
750,353(493,367)(183,341)
73,644
1,972,330

FY2022
693,848(230,160)(142,020)
321,668
2,045,974(JPY in Thousands)
Change (amount)(56,504)
263,207
41,321
248,023
73,644-(79,895)(79,895)

2,045,974

2,287,747

241,772

Cash and cash equivalents (hereafter “cash”) as of FY2022 end amounted to ¥2,287,747 thousand, an increaseof ¥241,772 thousand from FY2021 end (up 11.8%).

5

Cash flows from each activity and their significant components are as follows:(Cash flows from operating activities)
Net cash provided by operating activities amounted to ¥693,848 thousand, a decrease by ¥56,504 thousandcompared to FY2021.This is mainly attributable to ¥1,060,451 thousand of Income before income taxes, partially
offset by ¥369,723 thousand of Income tax payments.
(Cash flows from investing activities)
Net cash used in investing activities amounted to ¥230,160 thousand, a decrease by ¥263,207 thousand comparedto FY2021. This is mainly attributable to ¥240,633 of acquisition payment for intangible assets (mainly software
for sales).
(Cash flows from financing activities)
Net cash used in financing activities amounted to ¥142,020 thousand, a decrease by ¥41,321 thousand comparedto FY2021. This is mainly attributable to ¥100,000 thousand of proceeds from short-term debt, partially offset by¥232,020 thousand of dividend payments.
(4) Explanation on Future Outlook
The Group's consolidated financial forecast for the fiscal year ending December 31, 2023, is as follows.
(JPY in Thousands)
FY2022
FY2023
Change(Result)(Forecast)
(Full
year)
1st Half
2nd Half
Full year
1st Half
2nd Half
Full year
Nes sales
2,233,641 2,307,601 4,541,242 2,145,000 2,920,000
5,065,000
11.5%
Operating income
455,696
572,826 1,028,522
322,000
991,000
1,313,000
27.7%
Ordinary income
481,236
574,471 1,055,708
329,000 1,001,000
1,330,000
26.0%
Net income
319,996402,782
722,779
228,000
695,000
923,000
27.7%
attributable toowners of theparentAlso, as we announced “Notice of Change in Reporting Business Segments” on January 16, 2023, we havedecided to transform its reportable segments to three as described in below. Full year forecast in three segment net
sales and operating income are as follows, respectively.

Name
Medical Business

Public Business

Health Tech BusinessBusiness
Development and sales of medical
system, maintenance, consulting
services
Development and sales of public
document management solutions, eapproval software, maintenance
Development and sales of medical
devices and research on related areas(JPY in Thousands)
FY2023 (Full year)
Net sales
Operating Income
4,705,000

1,298,000

160,000

13,000200,000

2,000

We expect to deliver net sales and operating income growth for FY2023, compared with actuals for FY2022.
Conventional medical system market has been increasingly evolved into cloud-based systems, and with the adventof bipolar market in terms of price and functionality, we will have more update and new adoption projects foruniversity hospitals and large healthcare organizations.
Also, we will intensify our efforts on overseas sales of our main solutions and lucrative, vendor-neutral package
solution sales driven by our strategy, we predict FY2023 net sales and each profit for medical business, which is
our core business, outperform those of FY2022.
We predict FY2023 net sales and each profit for public business also outperform those of FY2022, driven by
unexpectedly higher demands and strong growth forecast way surpassing mid to long term targets.
As mentioned previously, health Tech business has been lagging behind original plan by 1 to 2 years.

6Nonetheless, we predict improved net sales and operating income for this segment, driven by the reinforced sales
and implementation structure for domestic healthcare organizations, coupled with the full-swing sales promotion in
European markets. Concurrently, we steadily proceed pharmaceutical regulatory filing in India and other ASEAN
regions.
The forward-looking statements in this document are based on information available to us as of the date of thisannouncement. Accordingly, actual results and developments may differ materially from those expressed or impliedby these statements due to various factors. If it becomes necessary to revise the forecast, we will disclose such
revisions as soon as possible.
(5) Basic Policy on Profit Distribution and Dividends for the Current and Next Fiscal Years
The Group intends to maximize its corporate value by establishing its position in the market through innovative
solution and advanced consulting capabilities. To achieve this, maintaining an optimal balance between corporate
value and shareholder value, our policy is to pay dividends based on a comprehensive assessment of our businessperformance, financial condition, and achievement of our business plan, while maintaining and expanding internal
reserves to continue to make necessary re-investments in an agile and flexible manner.
Taking into consideration our business performance and future business development, we have decided to pay a
year-end dividend of ¥6.50 per share for FY2022.
The interim dividend for FY2023 is planned to be ¥4.00 per share and a year-end dividend ¥7.00 per share inlight of our earnings forecast.
Retained earnings will be effectively re-invested to secure talented human resources and to enhance software
assets for sale, which are the fundamental factors for our successful growth. We are committed to returns profits toshareholders over the long term.

2. Basic Approach to the Selection of Accounting Standards
For the time being, our policy is to prepare its consolidated financial statements in accordance with Japanese
GAAP, taking into consideration the comparability from period to period (horizontal analysis) and thecomparability among companies (vertical analysis).

7

3. Financial Statements and Notes(1) Consolidated Balance Sheet(JPY in Thousands)

FY2021(As of Dec. 31, 2021)
ASSETS
CURRENT ASSETS:
Cash and deposits
Notes and accounts receivable - trade
Notes receivable – trade
Accounts receivable - trade
Contract assets
Merchandise and finished goods
Work in process
Raw Materials and supplies
Other current assets
Total current assets
NON-CURRENT ASSETS:
Tangible assets
Buildings
Accumulated depreciation
Buildings, net
Others
Accumulated depreciation
Others, net
Total tangible assets
Intangible assets
Software
OthersTotal intangible assets
Investments and other assets
Investment securities
Leasehold deposits
Deferred tax assets
OthersTotal Investments and other assets
Total non-current assets
TOTAL ASSETSLIABILITIESCURRENT LIABILITIES:
Accounts payable - trade
Short-term borrowings
Accounts payable - other
Income taxes payable
Other current liabilities
Total current liabilities
LONG-TERM LIABILITIES:
Provision for share-based remuneration
Other long-term liabilities
Total long-term liabilities
TOTAL LIABILITIESNET ASSETS
Shareholders’ equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Stock acquisition rights
Non-controlling interests
TOTAL NET ASSETSTOTAL LIABILITIES and NET ASSETS

8

FY2022(As of Dec.31,2022)

2,171,974
1,218,805
123,858
16,492
142,988
31,481
3,705,601

2,413,747
32,3801,052,240
276,637
165,417
3,975
146,61237,291
4,128,302

54,854(26,719)
28,134
172,026(128,904)
43,121
71,25685,899(35,189)
50,709181,573(128,995)
52,578103,287

238,600
344
238,944251,005344
251,349

56,700237,728
114,509131,823
540,760
850,961
4,556,563

56,700158,234
139,836
143,068
497,839
852,477
4,980,780

223,627
20,00098,621
223,933
259,544825,726

81,209142,630
227,529
202,633
654,002

163,649
54,653
218,303
1,044,029

186,787
97,052283,839
937,842

254,259
224,259
3,844,949(818,446)
3,505,021
4,743
2,769
3,512,533
4,556,563

254,259
224,259
4,372,694(812,506)
4,038,706
4,230
4,042,937
4,980,780

(2) Consolidated Statement of Income and Comprehensive Income(Consolidated Statement of Income, Cumulative)（JPY in Thousands）
FY2021(As of Dec. 31, 2021)
Revenue
Cost of revenue
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Foreign exchange gain
Subsidy income
Government grant income
Royalty income
Other-non-operating income
Total non-operating income
Non-operating expenses
Interest expense
Amortization of organizing expenses
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on reversal of share acquisition rights
Total Extraordinary income
Income before income taxes and otheradjustments
Income tax -current
Income tax -deferred
Total income taxes
Net income
Net income (loss) attributable tonon-controlling interests
Net income attributable to owners of the parent

9

FY2022(As of Dec.31,2022)

4,968,885
2,412,230
2,556,655
1,635,934
920,720

4,541,242
1,818,396
2,722,846
1,694,323
1,028,522

22
10,087
3,200
8,740
1,390
795
24,23647
16,896
7,671
1,390
1,627
27,6332361
363
944,593448
448
1,055,708

-

4,743
4,743

944,593

1,060,451

319,720(10,923)
308,796
635,796371,708(35,497)336,210724,240

(230)

1,461

636,027

722,779

(Consolidated Statement of Comprehensive Income, Cumulative）（JPY in Thousands）
FY2021(As of Dec. 31, 2021)
Net income
Comprehensive income(Components)
attributable to owners of parent
attributable to non-controlling interests

10

FY2022(As of Dec.31,2022)

635,796
635,796724,240
724,240

636,027(230)

722,779
1,461

(3) Consolidated Statement of Changes Equity
Fiscal year ended December 31,2021 (From January 1, 2021 to December 31,2021)

Balance at the
beginningof the period
Changes during
the period
Dividends ofsurplusProfit attributabletoowners of parent
Disposal oftreasurysharesChange in scopeof consolidation
Net changes in
items other thanshareholders'equityTotal changes
during the period
Balance at the endof the period

Shareholders’ equity
Retained
Treasury
earnings
sharesSharecapitalCapitalsurplus254,259

224,259

3,415,181(825,158)(JPY in Thousands)
NonTotal net
controlling
assetsinterests

Total
shareholders’equityShareacquisitionrights3,068,542

4,743

-

3,073,285(206,259)(206,259)(206,259)

636,027

636,027

636,027

6,711

6,711

6,711

-

2,769

2,769

-

-

429,767

6,711

436,479-2,769

439,248

254,259

224,259

3,844,949(818,446)

3,505,021

4,743

2,769

3,512,533

Fiscal year ended December 31,2022 (From January 1, 2022 to December 31,2022)

Balance at the
beginningof the period
Cumulative
effects of changes
in accounting
policies
Restated balance
Changes during
the period
Dividends ofsurplusProfit attributabletoowners of parent
Disposal oftreasurysharesChange in scopeof consolidation
Net changes in
items other thanshareholders'equityTotal changes
during the period
Balance at the endof the period

Shareholders’ equity
Retained
Treasury
earnings
sharesSharecapitalCapitalsurplus254,259

224,259

3,844,949(818,446)

23,175254,259

224,259

3,868,124(JPY in Thousands)
NonTotal net
controlling
assetsinterests

Total
shareholders’equityShareacquisitionrights3,505,021

4,743

2,769

23,175(818,446)

3,528,196

3,512,533

23,175
4,743

2,769

3,535,708(232,041)(232,041)(232,041)

722,779

722,779

722,779

5,940

5,940

13,832

13,832

5,940
13,832-(4,743)

1,461(3,281)--

504,569

5,940

510,509(4,743)

1,461

507,228

254,259

224,259

4,372,694(812,506)

4,038,706

-

4,230

4,042,937

11

(4) Consolidated Statement of Cash Flows（JPY in Thousands）
FY2021(As of Dec. 31, 2021)
Cash flow from operating activities
Income before income taxes and otheradjustments
Depreciation
Amortization of software
Increase (decrease) in provision for sharebased remuneration
Interest and dividend income
Foreign exchange losses (gains)
Government grant income
Interest expenses on borrowings and bonds
Gain on reversal of share acquisition rights
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Increase (decrease) in trade payables
Increase (decrease) in accounts payableother
Other
SubtotalInterest and dividends received
Subsidies received
Interest paid
Income taxes paid
Total operating activities
Cash flow from investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchases of tangible assets
Purchases of intangible assets
Purchase of investment securities
Proceeds from sales of shares of subsidiaries
and associates
Payments for investments in capital
Payment for leasehold deposits
Proceeds from refund of leasehold deposits
Other
Total investing activities
Cash flow from financing activities
Proceeds from short-term borrowings
Repayments of short-term borrowings
Proceeds from share issuance to noncontrolling shareholders
Dividends to shareholders
Total financing activities
Net increase (decrease) in cash and cash
equivalents
Cash and cash equivalents at the beginning of
the period
Decrease in cash and cash equivalents resulting
from exclusion of subsidiaries fromconsolidation
Cash and cash equivalents at the end of theperiod12

FY2022(As of Dec.31,2022)

944,593

1,060,451

75,943
231,991

61,855
193,105

27,921

29,077(22)(10,390)(8,740)2(511,959)
28,527
198,991(47)(16,896)(7,671)448(4,743)(107,514)(41,263)(143,221)(57,859)

49,55046,813965,812
22
8,740
(2)
(224,219)
750,353(73,354)
999,77525
64,220(448)(369,723)
693,848(153,000)
156,000(69,332)(199,976)(56,700)(156,000)
156,000(72,767)(240,633)
-

1,650

-

(105,220)(138,409)
76,040(4,419)(493,367)(1,280)83,372
1,148(230,160)

20,000-100,000(10,000)

3,000-(206,341)(183,341)(232,020)(142,020)

73,644

321,668

1,972,330

2,045,974-(79,895)

2,045,974

2,287,747

(5) Notes to Consolidated Financial Statement【Note on Going Concern】: N/A【Changes in Accounting Policies】(Application of accounting standard for revenue recognition)
The "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020. Hereinafterreferred to as the "Accounting Standard for Revenue Recognition”) has been applied from the beginning of thecurrent fiscal year, and sales is recognized at the amount expected to be received in exchange for the promised
goods or services when control of the promised goods or services has been transferred to the customer.
As a result of this change, after reviewing the identification and satisfaction of performance obligations, theCompany has decided to recognize revenue over a certain period of time for some software development andsystem sales projects (excluding contracts with a very short term or those with a negligible monetary impact) ,whereas it had previously recognized revenue at a single point.
The Company has followed the transitional treatment prescribed in the provision of Paragraph 84 of the
Accounting Standard for Revenue Recognition, and the cumulative effect of retrospective application of the new
accounting policy prior to the beginning of the current fiscal year has been included in retained earnings at the
beginning of the current fiscal year.
As a result, for the current fiscal year, net sales increased 216,572 thousand yen, cost of sales increased 39,099
thousand yen, and operating income, ordinary income, and income before income taxes and other adjustments
increased 177,472 thousand yen, respectively. Also, the balance of retained earnings at the beginning of the current
fiscal year increased by 23,175 thousand yen.
Due to the application of Accounting Standard for Revenue Recognition "notes and accounts receivable," which
was included in "current assets" in the consolidated balance sheet for the previous fiscal year, is included in " notes
receivable – trade, accounts receivable – trade and contract assets" in the consolidated balance sheet for the current
fiscal year. In accordance with the transitional treatment stipulated in Paragraph 89-2 of the Accounting Standard
for Revenue Recognition, no reclassification has been made to conform to the new presentation for the previous
fiscal year. Also, in accordance with the transitional treatment stipulated in Paragraph 89-3 of the abovementioned
standard, notes related to revenue recognition for the previous fiscal year are not presented.
(Application of Accounting Standard for Fair Value Measurement, etc.)
The “Accounting Standard for Fair Value Measurement” (ASBJ Statement No. 30, July 4, 2019), etc., have been
applied since the beginning of the current consolidated fiscal year. In accordance with the transitional treatmentprescribed in Paragraph 19 of the “Accounting Standard for Fair Value Measurement” and Paragraph 44–2 of the“Accounting Standard for Financial Instruments” (ASBJ Statement No. 10, July 4, 2019), the Company has
decided to apply the new accounting policies set forth by the Accounting Standard for Fair Value Measurement,
etc. in the future. These changes had no impact on the Company’s quarterly consolidated financial statements.
【Additional Information】(Accounting Treatment for Employee Stock Ownership Plan, J-ESOP）
At the Board of Directors meeting held on October 29, 2015, the Company resolved to introduce the "employee
stock ownership plan (hereinafter referred to as “J-ESOP”)," an incentive plan to provide employees withownership interest (stock) of the Company purchased from the market. The purpose of this incentive plan is tofurther correlate the Company's stock price and performance with the treatment of employees, further sharing
economic benefits with shareholders, and to increase employees' motivation and morale toward the stock price andperformance enhancement.
In accordance with this introduction, Trust & Custody Services Bank, Ltd. (Trust Account E) (currently Custody
Bank of Japan, Ltd. (Trust Account E)) acquired 194,200 shares of the Company's stock between November 13,
2015, and November 26, 2015.
For accounting treatment of J-ESOP, the gross method is applied to record the assets and liabilities of the trust as
corporate assets and liabilities in the consolidated balance sheets, in accordance with the " Practical Solution on
Transactions of Delivering the Company’s Own Stock to Employees etc. through Trusts" (Practical Issues Task
Force No. 30, issued on March 26, 2015).
Treasury stock held by Custody Bank of Japan; Ltd. (Trust Account E) is presented as treasury stock in the net
assets section of the consolidated balance sheets. The amount recorded at the end of the previous fiscal year was
130,217 thousand yen and the number of shares was 168,800. The amount of the current fiscal year was 124,277
thousand yen and the number of shares was 161,100.

13

【Segment Information, etc.】(Segment Information)
1. Overview of Reportable Segments
The Group's reportable segments are components for which discrete financial information is available andwhich are subject to periodic review by the Board of Directors to determine the allocation of management
resources and evaluate their performance.
The Group’s business is composed of System Development and Health Tech, and the business activities ofeach reportable segment are as follows.
(System Development Business)
Medical system development, medical data integration and analysis, office system development(Health Tech Business)
Consultation for healthcare organization, medical data analysis, telehealth2.

Calculation of net sales, income (loss), assets, and other items by reportable segment
The accounting method of the reported business segments is in accordance with the accounting policies
adopted to prepare the consolidated financial statements. Profits of reportable segments are operating
income-based figures. Intersegment sales and transfers are based on prevailing market prices.
As described in "Changes in Accounting Policies," we have applied the Accounting Standard for Revenue
Recognition from the beginning of the current fiscal year, and has changed its accounting method forrevenue recognition, and therefore, the calculation method of reportable segment income or loss has beenchanged in the same manner.
Due to this change, sales to external customers in the "system development business" segment increased by
211,326 thousand yen and segment income increased 173,943 thousand yen in the current fiscal year comparedto the previous accounting policy. In the same way, sales to external customers in the "Health Tech Business"segment increased by 5,246 thousand and segment loss decreased 3,528 thousand yen in the current fiscal year
compared to the previous accounting policy.

14

3.

Sales and Income or Loss by Reportable Segment
FY2021 (From January 1, 2021, to December 31, 2021)
Reportable segment
Systemdevelopment

HealthTech

Sub total(JPY in thousands)
Reported
amount for
Adjustment
consolidated(Note1)
financialstatements(Note 2)

Sales
Sales for external
4,919,669
49,215
4,968,885
4,968,885
customers
Internal sales ortransfers between
2,970
2,970
(2,970)segments
Total
4,922,640
49,215
4,971,856(2,970)4,968,885
Segment income
1,137,726(217,006)
920,720
920,720(loss)
Segment assets
4,398,754
262,651
4,661,405(104,842)
4,556,563
Other
Depreciation
271,634
36,300307,935
307,935
Increase intangible and217,956
33,186251,142251,142
intangible assets(Note) 1. Adjustments are derived from elimination of intersegment transactions.
(Note) 2. Aggregated amount of segment income or loss equals amount of operating income reported forconsolidated financial statements.
FY 2022 (From January 1, 2022, to December 31, 2022)
Reportable segment
Systemdevelopment

HealthTech

Sub total(JPY in thousands)
Reported
amount for
Adjustment
consolidated(Note1)
financialstatements(Note 2)

Sales
Sales for external
4,471,988
69,2534,541,242
4,541,242
customers
Internal sales ortransfers between
1,485
1,485
(1,485)segments
Total
4,473,474
69,2534,542,727(1,485)
4,541,242
Segment income
1,233,811(205,288)
1,028,522
1,028,522(loss)
Segment assets
4,799,825
207,118
5,006,944(26,164)
4,980,780
Other
Depreciation
223,023
31,937
254,960
254,960
Increase intangible and282,426
25,846308,273308,273
intangible assets(Note) 1. Adjustments are derived from elimination of intersegment transactions.
(Note) 2. Aggregated amount of segment income or loss equals amount of operating income reported forconsolidated financial statements.

15

(Related information)
FY2021 (From January 1, 2021, to December 31, 2021)
1. Information by product/service
This information is omitted because the same information is disclosed in the segment information.
2.

Information by region(1) Net sales
Sales to external customers in Japan are more than 90% of net sales in the consolidated statements ofincome, and information by region is omitted.
(2) Tangible assets
Tangible assets affiliated to Japan are more than 90% of tangible assets in the consolidated balance sheets,
and information by region is omitted.

3.

Information by major customer
Company
NEC Corporation(JPY in thousands)
Related Segment
System development

Net sales
591,114

FY 2022 (From January 1, 2022, to December 31, 2022)
1. Information by product/service
This information is omitted because the same information is disclosed in the segment information.
2.

Information by region(1) Net sales
Sales to external customers in Japan are more than 90% of net sales in the consolidated statements ofincome, and information by region is omitted.
(2) Tangible assets
Tangible assets affiliated to Japan are more than 90% of tangible assets in the consolidated balance sheets,
and information by region is omitted.

3.

Information by major customer: N/A(Information on Amortization and Unamortized balance of Goodwill by Reportable Segment)
FY 2021 (From January 1, 2021, to December 31, 2021): N/A
FY 2022 (From January 1, 2022, to December 31, 2022): N/A(Information on gain on negative goodwill by Reportable segment)
FY 2021 (From January 1, 2021, to December 31, 2021): N/A
FY 2022 (From January 1, 2022, to December 31, 2022): N/A(Information on Impairment of Non-current Assets by Reportable Segment)
FY 2021 (From January 1, 2021, to December 31, 2021): N/A
FY 2022 (From January 1, 2022, to December 31, 2022): N/A

16

【Per Share Information】
FY2021
FY2022(As of Dec. 31, 2021)(As of Dec.31,2022)
Book-value Per Share
136.84 yen
157.63 yen
Basic earnings per share
24.84 yen
28.21 yen
Diluted earnings per share(Note): 1. No statement is indicated above for the number of diluted earnings per share because there were no
diluted shares with dilutive effect.
(Note): 2. Earnings per share and Diluted earnings per share were calculated based on the following:
FY2021
FY2022(As of Dec. 31, 2021)(As of Dec.31,2022)
Book-value Per Share
Net income attributable to shareholders
636,027
722,779of the parent (thousand yen)Amount not belonging to commonshareholders’ (thousand yen)
Net income attributable to shareholdersof the parent attributable to common
636,027
722,779
stock (thousand yen)
Average number of shares of common
25,608,544
25,617,486
stock during the fiscal year (share)
Diluted earnings per share
Net income adjustments attributable toowners of parent company (thousandyen)
Increase in shares of common stock(share)

-

-

-

-

5th series of stock acquisition
5th series of stock acquisitionrights by resolution of therights by resolution of the
Residual securities excluded in the
Board of Directors meeting held Board of Directors meeting held
calculation of profit after adjustment for
on February 25, 2020
residual securities due to the fact that these on February 25, 2020
Number of share acquisition
Number of share acquisition
securities had no dilutive effectrights: 2,830
rights: 2,830
Common stock (share): 283,000 Common stock (share): 283,000(Note): For the purpose of basic earnings per share and diluted earnings per share, the average number of theCompany's shares held by Japan Custody Bank, Ltd. (Trust Account E) during the previous consolidated fiscal year
and the current consolidated fiscal year are 173,881 shares and 164,939 shares, respectively.
【Significant Subsequent Event】: N/A

17

4. OtherOur group has two reportable segments: System development and Healthtech.
Production, Order, Sales
1) Actual Result of Production for FY2022
Business segment

Production

YoY (%)(JPY in Thousands)

System development
1,373,110
Healthtech
162,998
Total
1,536,109(Note): Figures above is calculated by total manufacturing cost for the current fiscal year.

91.7
91.7
91.7

2) Order Status for FY2022
Business segment
System development
Healthtech
Total

Order received(JPY in Thousands)

YoY (%)

3,409,475
120,049
3,529,524

Order backlog(JPY in Thousands)

95.3
134.7
96.3

1,090,061
23,628
1,113,690

YoY (%)
135.2
84.7
133.5

3) Sales Result for FY2022
Business segment

Sales amount(JPY in Thousands)

System development
4,473,474
Healthtech
69,253Adjustments(1,485)
Total
4,541,242(Note) Adjustments are derived from elimination of intersegment transactions.

YoY (%)
90.9
140.7
50.0
91.4

This document has been translated from the Japanese original for reference purposes only. In the event of any
discrepancy between this translated document and the Japanese original, the original shall prevail.

18