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 March 31, 2019
[Japanese GAAP]May 8, 2019
EM SYSTEMS CO., LTD.
Listed on:Tokyo Stock Exchange, First Section
ＵＲＬ http://www.emsystems.co.jp
4820
Securities Code
Representative
Kozo Kunimitsu, Chairman and CEO
Representative
Gen Aota, Managing director in the company, executive officer
Tel: +81-6-6397-1888
for inquiries
and chief of the Administrative Planning HQScheduled date of Annual General Meeting of Shareholders:June 18,2019
Scheduled date of payment of dividend:
June 19,2019
Scheduled date of filing of Annual Securities Report:
June 19,2019
Preparation of supplementary materials for financial results:
Yes
Holding of financial results meeting:Yes (for securities analysts)
Company name（All amounts are rounded down to the nearest million yen）
1. Consolidated Financial Results for the Fiscal Year Ended March 31, 2019 (April 1, 2018 – March 31, 2019)（Percentages represent year-on-year changes）(1) Consolidated management performance (total)
Net sales

Fiscal year ended
Mar. 31, 2019
Fiscal year ended
Mar. 31, 2018

Profit attributable toowners of parent

Ordinary profit

Millions ofyen％Millionsof yen％Millions ofyen％Millions ofyen％

13,133

(5.9)

2,622

(14.4)

3,248(10.2)

1,971(16.8)

13,953

2.0

3,063

17.9

3,618

14.4

2,369

12.0

（refer to）Equity in

Fiscal year ended

earnings of affiliates

Mar. 31, 2019

Fiscal year ended
Mar. 31, 2019
Fiscal year ended
Mar. 31, 2018

Operating profit

1,942

Millions of yen

Fiscal year ended(19.1％）

2,400

Mar. 31, 2018

Millions ofyen（14.8％）Net income per share

Diluted net income pershare

Yen 100ths of a yen

Yen 100ths of a yen

％

％

％

55.73

54.91

12.2

14.7

20.0

66.72

66.56

15.9

16.7

22.0

Return on equity

Ordinary profit on Operating profit
total assets
to net sales(Refer to) Equity in
Fiscal year ended
Fiscal year ended－ Millions of yen－ Millions of yen
earnings of affiliates
Mar. 31, 2019
Mar. 31, 2018（(Note) This company implemented a stock split at a rate of 2 shares per 1 share of ordinary stock with an effective date of March
1st, 2018. We have calculated "quarterly net income per share" and "net income after potential stock adjustment "assumingthat said stock split was conducted at the beginning of previous fiscal year.
(2) Consolidated financial position
Total assets
As of Mar. 31, 2019
As of Mar. 31, 2018

Millions of yen
22,351
21,893(Refer to) Net capital

As of Mar. 31, 2019

Capital adequacy ratio

Net assets

16,489Millions of yen
16,61816,052

％
73.8
72.7

Millions of yen

As of Mar. 31, 2018

Net assets per share
Yen 100ths of a yen

469.07446.82
15,906

Millions of yen(3) Consolidated cash flows
Cash flows from operating Cash flows from investing Cash flows from financing Cash and cash equivalents
activities
activities
activities
at end of period
Fiscal year ended
Mar. 31, 2019
Fiscal year ended
Mar. 31, 2018

Yen 100ths of a yen

Yen 100ths of a yen

Yen 100ths of a yen

Yen 100ths of a yen

1,846

(894)

(1,982)

7,486

2,324

316

(2,033)

8,528

－

1 －

2. State of dividends
PayoutDividendratio
on equity
Total dividends(consolidate (consolidatd)ed)Annual dividends
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

％

％

Fiscal year ended
13.00
12.00
658
27.7
4.4
－
－
－
Mar. 31, 2018
Fiscal year ended
8.00
11.00
19.00
669
34.1
4.1
－
－
Mar. 31, 2019
Fiscal year ended
8.00
11.00
19.00
51.1
Mar. 31, 2020－－
(estimate)(Note) This company implemented a stock split at a rate of 2 shares per 1 share of ordinary stock with an effective date of March 1st,2018. Regarding the dividends of the 2nd quarter of the March 2018 period, we have included the amounts of actual dividends
before said stock split. The annual dividend amount per share calculated under the post-stock split standard is 18.5 yen for
the March 2018 period
3. Estimated consolidated results of the Fiscal Year Ending March 31, 2020 (April 1, 2019 – March 31, 2020)

Net sales
Millionsof yenFirst half
Full year

6,516
13,174（Percentages represent year-on-year changes）
Net
Profit attributable toOrdinary profit
incomeowners of parent
per share

Operating profit
Millionsof yen

％

％

710
1,358

(1.2)
0.3

Millionsof yen％Millions of
yen

％

Yen
100ths of
a yen

1,010
1,980

(43.5)(39.1)

679
1,307(43.3)(33.7)

19.31
37.18

(51.7)(48.2)* 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.
: None2) 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.

36,347,400

Number of shares outstanding at endof term (including own stock)

As of Mar. 31,
201936,649,400
shares

As of Mar. 31, 2018

2.

Number of own shares at end of term

As of Mar. 31,
20191,495,0066
shares

As of Mar. 31, 20183.

35,513,775
Average number of shares outstanding
As of Mar. 31,
35,375,368sh
As of Mar. 31, 2018
during term (quarterly total)
2019
ares
shares(Note) This company implemented a stock split at a rate of 2 shares per 1 share of ordinary stock with an effective date ofMarch 1st, 2018. We have calculated the “Average number of shares outstanding during term” for March 2018 2ndquarter assuming that said stock split was conducted at in the previous consolidated fiscal year.

(Refer to)shares

747,206
sharesSummary of Non-consolidated Financial Results

1. Non-consolidated Financial Results for the Fiscal Year Ended March 31, 2019 (April 1, 2018 – March 31, 2019)(1) Non-consolidated operating results（Percentages represent year-on-year changes）
Net sales

Fiscal year ended
Mar. 31, 2019
Fiscal year ended
Mar. 31, 2018

Millions ofyenOperating profit％

Millions ofyen

11,517(6.3)

12,2944.7

Net income

％

％

2,378

(17.2)

3,016

2,872

21.4

3,430

Yen 100ths of a yen

Diluted net income pershare
Yen 100ths of a yen

51.83

51.07

64.11

63.96

Net income per share
Fiscal year ended
Mar. 31, 2019
Fiscal year ended
Mar. 31, 2018

Ordinary profit

Millionsof yen－2 －Millions ofyen％(12.1)

1,833(19.5)

17.7

2,276

15.3

(Note) This company implemented a stock split at a rate of 2 shares per 1 share of ordinary stock with an effective date of March
1st, 2018. We have calculated "net income per share" and " Diluted net income per share "assuming that said stock split was
conducted at the beginning of previous fiscal year.

(2) Non-consolidated financial position
Total assets
As of Mar. 31, 2019
As of Mar. 31, 2018
(Refer to)
Shareholders’ equity

Net assets

Millions of yen
21,26521,034As of Mar.
31, 2019

15,830Capital adequacy ratio

Millions of yen
15,962
15,505
Millions of
As of Mar.
yen
31, 2018

％
74.5
73.0
15,359Net assets per share
Yen 100ths of a yen

450.42431.45
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) OVERVIEW OF MANAGEMENT PERFORMANCE IN THE CURRENT PERIOD --------------------------------------- 5(2) OVERVIEW OF FINANCIAL POSITION IN THE CURRENT PERIOD ------------------------------------------------- 6(3) CASH FLOWS ---------------------------------------------------------------------------------------------------- 7(4) OUTLOOK ------------------------------------------------------------------------------------------------------- 7
2. BASIC APPROACH TO THE SELECTION OF ACCOUNTING STANDARDS ------------------------------ 8
3. 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) Overview of management performance in the current period
In the healthcare (clinics and pharmacies) and nursing care industries, the 2018 simultaneous revision of medical
service and long-term care fee was conducted. As a result, we continue to face difficulties in the field of pharmacies,
which are our company's major sales outlet, due to medicine dispensing fees and drug price reforms. In addition,
major pharmacy chains and drug stores are expanding business scale and profit through M&As, etc.
In the healthcare industry, operation of online diagnoses and online guidance on taking medicine commenced as
it became possible to use public insurance for the service last year. In regard to electronic prescriptions,demonstration testing is proceeding, and we expect the service to enter full operation. In addition, in the nursing
care and welfare industries, symbiotic-type services were newly established in systems for both nursing careinsurance and disability welfare in order to make it easier for elderly and disabled individuals to receive services atthe same office.
Amidst this market environment, in November 2018, our group announced the “MAPs Series,” a shared
information system base applicable to all healthcare fields (medical departments, pharmacies and nursing care/welfare). It is a completely cloud-based system that unifies systems in health care fields. Through the various
functions of this system, we will continue to support the operations of clinicians, pharmacists and nursing care /welfare service providers.
Our group aims to provide an environment that enables seamless information coordination between the medical
and nursing care fields, including hospitals, and in collaboration with NEC Corporation (NEC) and CSI Co., Ltd.,
we are engaged in the creation of new services with a focus on the coming super-aging society by promoting
utilization and application of ICT in the healthcare and medical fields.
In addition, in January 2019, we initiated cooperation between our medical-oriented systems and other services
such as the drug evaluation bulletin board maintained by MedPeer Co., Ltd. in order to provide an additional levelof safety for patients and create further social value.
We acquired businesses targeting nursing care service providers from Janis Co., Ltd., which possesses advantages
in the field of disability welfare services, on February 1, 2019. We acquired all shares of M-Win Soft Co., Ltd., which
possesses advantages in the facility-based service field as well as the service field targeting Community-based
Integrated Care centers, on February 28. We are now able to provide services covering a broad range of fields,
including the fields of nursing care service businesses, disability welfare businesses and comprehensive support
businesses. Moving forward, this will enable us to further improve our system businesses targeting nursing careservice providers.
From October, we have been implementing business model reforms to strongly promote transition towardsubscription business model of our services and products with high levels of added value.
In regard to performance in the current consolidated fiscal year, we achieved our sales goals due to orders related
to large chain franchises and bullish potential demand for hardware purchases. In addition, by focusing on thedevelopment of our MAPs Series, we increased capitalization. This kept manufacturing costs were lower thanestimated, which resulted in operating profits higher than estimated.
As a result, our performance was 13,133 million yen in sales (a 5.9% decrease compared to the same period in theprevious year) 2,622 million yen in operating profits (a 14.4% decrease) 3,248 million yen in ordinary profits (a 10.2%
decrease), and 1,971 million yen in quarterly net income attributable to shareholders in parent company (a 16.8%
decrease). As such, we failed to achieve performance equal to the previous consolidated fiscal year
By-segment results are as follows. In addition, the by-segment sales and operating profits and losses listed are
the amounts before elimination of internal transactions between segments.
(IT Systems and Related Business for Pharmacies)
Regarding IT Systems and Related Business for Pharmacies, we have continued to strengthen our approaches
to pharmacy chains and our sales channels through OEM provision, etc., and we have focused our efforts on
expanding sales in systems for pharmacies, namely "Recepty NEXT" and "Bungyo Mate."
Billing sales increased favorably and sales of consumables continued to be bullish. As a result, we achieved ourgoals for sales and operating profits. However, we failed to achieve sales and operating profits equal to the previous
consolidated fiscal year.
Consequently, IT Systems and Related Business for Pharmacies in the current consolidated fiscal year resulted
in 10,476 million yen in sales (a 7.3% decrease compared with the same period in the previous year) and 2,389
million yen in operating profits (a 16.7% decrease).
(IT Systems and Related Business for Clinics)
Regarding IT Systems and Related Business for Clinics, in order to expand our nation-wide sales channels, wehave been cultivating markets in clinics through retail outlets. Furthermore, we have continued to focus efforts
on sales of the medical accounting systems "MRN (*1) Clerk Style" and "Uni-Medical," as well as the electronic
medical records systems "MRN Karte Style" and "Ortia."“Maps for CLINIC,” a diagnostic support system for clinics and one of the products in our “MAPs Series” (a－5 －shared information system base that we announced in November), has been extremely well-received.
Billing sales and sales of consumables were bullish due to sound increases in numbers of customers who
newly started MRN or replaced from the competitors.
On the other hand, we failed to achieve the same number of sales as in the previous fiscal year, and as aresult, we failed by a small margin to achieve sale proceeds equal to the previous consolidated fiscal year.
Consequently, IT Systems and Related Business for Clinics in the current consolidated fiscal year resulted in
1,704 million yen in sales (a 3.5% decrease from the same period in the previous year) and 239 million yen in
operating profits (a 1.1% increase).
(*1) MRN: Medical Recepty NEXT
(Other businesses)
Regarding IT Systems for Nursing Care, we were able to develop a proactive business strategy through M&A
and business acquisition. However, we were not able to contribute to sales or profits for the current
consolidated fiscal year.
Our pharmacy operation business was partially impacted by medicine dispensing fees and drug price reforms,
but sales and operating profits were above initial estimates. Furthermore, Lasante Co., Ltd. achieved plannedsales and operating profits.
Furthermore, in the "commissioned project to install online qualification checking system into receipt
creation support system for pharmacies," with which we were commissioned by the Hiroshima Branch of theJapan Health Insurance Association (Kyokaikenpo), we extended the initial contract periods to continue
providing the service.
At our company, we are proactively engaged in the realization of electronic prescriptions and research anddevelopment as well as verification projects relating to EHR (*2), in order to contribute to future developmentsin the healthcare industry. In the "infectious disease outbreak detection services," which is a joint research
project between the Japan Medical Association, the Japan Pharmaceutical Association, and Nihon University,
the number of pharmacies using it has reached nearly 12,000 nationwide.
Consequently, other business in the current consolidated fiscal year resulted in 1,063 million yen in sales (a3.2% increase over the same period in the previous year) and 0 million yen in operating losses (a 90.2%
decrease).
(*2) EHR: Electronic Health Record(2) Overview of financial position in the current period(Assets)
Current assets decreased 662 million yen from the end of the previous fiscal year to 10,930 million yen at theend of the current fiscal year. This was mainly due to decreases of 1,041 million yen in cash on hand and inbanks. They were paid for the business transfer, acquisition of company by M&A and paid for treasury stock.
Fixed assets increased 1,120 million yen from the end of the previous fiscal year to 11,421 million yen at theend of the current fiscal year. This was mainly due to increases of 916 million yen in software in progress and415 million yen in goodwill.
Consequently, total assets was 22,351 million yen. (a 458 million yen increase over in the previous year.)(Liabilities)
Current liabilities decreased 117 million yen from the end of the previous fiscal year to 3,665 million yen at
the end of the current fiscal year. This was mainly due to increases of 251 million yen in notes and accounts
payable-trade, but decreases of 412 million yen in current portion of long-term loans payable. Noncurrent
liabilities increased 9 million yen from the end of the previous fiscal year to 2,067 million yen at the end of thecurrent fiscal year. This was mainly due to increases of 111 million yen in net defined benefit liability, but
decreases of 102 million yen in long-term loans payable.
Consequently, total liabilities was 5,733 million yen. (a 107 million yen decrease over in the previous year.)(Net assets)
Net assets increased 566 million yen to 16,618 million yen mainly because of a 1,261 million yen increase inretained earnings associated with the fiscal year’s profit.
Consequently, Capital adequacy ratio was 73.8% (72.7% at the same period in the previous year).

－

6 －(3) Cash flows
Cash and cash equivalents decreased 1,042 million yen from the end of the previous fiscal year to 7,486
million yen at the end of the current fiscal year. .
The status of each cash flow in the current fiscal year and their factors are as follows.
(Net cash provided by (used in) operating activities)
Net cash provided by operating activities was 1,846 million yen, compared to 2,324 million yen in theprevious year. This was mainly due to an expenditure of 1,323 million yen in income taxes, an incomes of 3,030
million yen in income before income taxes and others in the current fiscal year.
(Net cash provided by (used in) investing activities)
Net cash used in investment activities was 894 million yen, compared to 316 million yen in the previous year.
This is mainly due to an incomes of 1,019 million yen in investment property rental, an expenditure of 970
million yen for purchase of intangible fixed assets, an expenditure of 458 million yen in cash out on loans, an
expenditure of 254 million yen for purchase of tangible fixed asset, an expenditure of 186 million yen for thecost of investment property rental and an expenditure of 125 million yen for business transfer.
(Net cash provided by (used in) financial activities)
Net cash used in financing activities was 1,982 million yen, compared to 2,033 million yen used in theprevious year. This was mainly due to incomes of 196 million yen for the issuance of shares, an expenditure of
517 million yen for the repayment of long-term debt, an expenditure of 903 million yen for the purchase oftreasury stock, and an expenditure of 708 million yen for the payment of dividends.
(Refer to) Cash flow indicators
Fiscal year ended
Mar. 31, 2015

Shareholders’ equity ratio (%)
Shareholders’ equity ratio
based on market value (%)
Ratio of interest-bearing
debt to cash flows (years)
Interest coverage ratio (times)

Fiscal year ended Fiscal year ended Fiscal year ended Fiscal year ended
Mar. 31, 2016
Mar. 31, 2017
Mar. 31, 2018
Mar. 31, 2019

56.8

59.6

65.4

72.7

73.8

82.7

113.4

149.5

214.0

209.2

2.6

1.4

1.0

0.3

0.4

48.5

82.1

121.1

389.6

1,080.2

Shareholders’ equity ratio: Shareholders’ equity / Total assets
Shareholders’ equity ratio based on market value: Market capitalization / Total assets
Ratio of interest-bearing debt to cash flows: Interest-bearing debt / Cash flows
Interest coverage ratio: Cash flows / Interest payments
Notes:1. All indicators are calculated based on consolidated figures.
2. Market capitalization is calculated based on the number of shares outstanding after the deduction oftreasury shares.
3. Cash flows are calculated using the figures for operating cash flows in the consolidated statement ofcash flows.
4. Interest-bearing debt includes all debt on the consolidated balance sheet that incur interest.

(4) Outlook
Looking forward, the status of pharmacies, our company's major sales outlet, in particular large pharmacies
right outside a hospital, appears severe due to the 2018 simultaneous revision of medical service and Longterm care fees. It is expected that the government will continue to place limitations on medical fees overall.
It is predicted that there will be more of a need for information coordination than ever before in otheroccupations, including nursing care, as the government has expressed the intention to promote thoroughintegration of ICT in the medical and other fields.
In our medical and pharmacy businesses, our group will provide a higher level of support to medical providers
to improve safety and business efficiency by sharing information through the “MAPs Series,” a shared
information system base.
In our nursing care business, we will be active in the fields of disability welfare business, facility-based service
field and the service field targeting Community-based Integrated Care centers , and we will continue to support
service providers in the fields of nursing care service businesses, disability welfare businesses andcomprehensive support businesses.
Estimates for our consolidated performance at the end of Year Ending in March 2020 are 13,174 million yen
in sales (a 0.3% increase compared to the same period in the previous year), 1,358 million yen in operating
profits (a 48.2% decrease compared to the same period in the previous year), 1,980 million yen in ordinary
profits (a 39.1% decrease), and 1,307 million yen in net income for the period attributable to shareholders in－

7 －parent company (a 33.7% decrease). In addition, the aforementioned performance predictions are calculated
based on information available as of the date of release of this document. Actual performance may vary frompredicted values due to various future factors.

2. Basic Approach to the Selection of Accounting Standards
The EM SYSTEMS Group currently applies Japanese accounting standards for its consolidated financial
statements. We will take suitable actions with regard to the application of International Financial ReportingStandards (IFRS) by taking into account associated factors in Japan and other countries.

－

8 －3. Consolidated financial statements and major explanatory notes(1) Consolidated balance sheet(Units: millions of yen)
As of March 31, 2018

As of March 31, 2019

AssetsCurrent assets
Cash on hand and in banks
Notes and accounts receivable
Merchandise and products
Raw materials and supplies
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)
Construction in progress
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 －

8,528
2,189
130
0
762
(19)
11,592

7,487
2,456
164
0
842
(20)
10,930

1,494
(717)
777
608
195
(92)
102
44
(29)
15
－
532
(454)
77
1,580

1,495
(758)
737
589
143
(86)
57
47
(36)
10
210
546
(476)
70
1,676

167
255
254
5
682

82
1,172
669
5
1,930

205
9,960
(2,942)
7,018
143
499
109
61
(0)
8,037
10,30021,8937
9,960(3,137)
6,823
145
572
123
143
(0)
7,814
11,421
22,351

(Units: millions of yen)
As of March 31, 2018

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
Provision for points card certificates
OthersTotal current liabilities
Non-current liabilities
Long-term loans payable
Lease obligations
Net defined benefit liability
Provision for product warranties
Long-term guarantee deposited
Long-term Accounts payable-otherTotal 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
incomeForeign currency translation adjustments
Remeasurements of defined benefit plans
Total other cumulative comprehensive
incomeSubscription rights to shares
Total net assets
Total liabilities and net assets

－

10 －

As of March 31, 2019

760
517
418
48
763
115
350
3
805
3,782

1,011
104
516
34
530
15
399
4
1,049
3,665

137
72
917
214
715
－
2,058
5,840

34
53
1,029
221
721
7
2,067
5,733

2,445
2,808
10,878(208)
15,924

2,558
2,935
12,140(1,097)
16,536

48
(66)

34
(81)

(17)

(46)

145
16,052
21,893

128
16,61822,351

(2) Consolidated statements of income and consolidated statements of comprehensive income(Consolidated statements of income)(Units: millions of yen)Previous fiscal year
(From April 1, 2017
To March 31, 2018)

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
Commission fee
Rent expenses on real estates
Amortization of share issuance cost
Miscellaneous loss
Total non-operating expenses
Ordinary profit

－

11 －

Current fiscal year
(From April 1, 2018
To March 31, 2019)13,953
6,077
7,876

13,133
5,723
7,410

33
23
52
15
119
254
1,824
230
306
45
99
370
128
64
116
57
245
42
783

21
23
92
(0)
91
259
1,823
226
314
46
115
366
132
75
91
59
226
13
808

4,813

4,787

3,063

2,622

0
1,006
22
1,029

0
1,020
10
1,031

5
1
443
1
22
474
3,618

1
8
381
－
14
405
3,248

(Units: millions of yen)Previous fiscal year
(From April 1, 2017
To March 31, 2018)

Extraordinary income
Gain on sales of non-current assets
Gain on reversal of share acquisition rights
Total extraordinary income
Extraordinary losses
Loss on retirement of non-current assets
Loss on sales of non-current assets
Impairment loss
Loss on liquidation of subsidiaries andassociates
Expenses for advanced repayment of loans
loss on revaluation of investments in securities
Total extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
Net income
Profit attributable to owners of parent

Current fiscal year
(From April 1, 2018
To March 31, 2019)

12
0
13

－
－
－

1
－
20

0
0
20

7

－

8
－

－
198
218
3,030
1,089
(30)
1,058
1,971
1,971

38
3,593
1,224
(0)
1,223
2,369
2,369

－

12 －

（Consolidated statements of comprehensive income）(Units: millions of yen)Previous fiscal year
(From April 1, 2017
To March 31, 2018)

Net income
Other comprehensive income
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 －

Current fiscal year
(From April 1, 2018
To March 31, 2019)

2,369

1,971

12
19
31
2,400

(13)
(15)
(29)
1,942

2,400

1,942

－

－

(3) Consolidated Statement of Changes in Equity
Previous fiscal year (From April 1st, 2017 to March 31st, 2018)(Units: millions of yen)
Shareholders’ equity

Capital stock
Balance at beginning ofcurrent period
Changes of items
during period
Exercise of shareacquisition rights

Capital surplus Retained earnings Treasury shares

2,394

2,702

51

51

9,140

（223)

Total
shareholders’equity14,013

103

Dividends of surplus

（637)

（637)

Profit attributable toowners of parent

2,369

2,369

Purchase of treasury
shares
Disposal of treasury
shares54

Change of scope of
consolidation
Net changes of items
other thanshareholders’ equity
Total changes of items
during period
Balance at end ofcurrent period

（0)

（0)

15

69

6

6

51

105

1,738

15

1,911

2,445

2,808

10,878（208)

15,924

Accumulated other comprehensive income
Total
Foreign currency Remeasurements accumulatedtranslationof defined benefit otheradjustment
planscomprehensive
incomeBalance at beginning ofcurrent period
Changes of items
during period
Exercise of shareacquisition rights

36

（85)

（48)

Share acquisition
Total net assets
rights99

14,063

103

Dividends of surplus（637)

Profit attributable toowners of parent

2,369

Purchase of treasury
shares（0)

Disposal of treasury
shares69

Change of scope of
consolidation

6

Net changes of items
other thanshareholders’ equity
Total changes of items
during period
Balance at end ofcurrent period

12

19

31

46

78

12

19

31

46

1,989

48

（66)

（17)

145

16,052－14 －Current fiscal year (From April 1st, 2018 to March 31st, 2019)(Units: millions of yen)
Shareholders’ equity

Capital stock
Balance at beginning ofcurrent period
Changes of items
during period
Exercise of shareacquisition rights

Capital surplus Retained earnings Treasury shares

2,445

2,808

112

112

10,878

（208)

Total
shareholders’equity15,924225

Dividends of surplus

（710)

（710)

Profit attributable toowners of parent

1,971

1,971

Purchase of treasury
shares
Disposal of treasury
shares

14

（903)

（903)

15

29

Change of scope of
consolidation
Net changes of items
other thanshareholders’ equity
Total changes of items
during period
Balance at end ofcurrent period

112

127

1,261

（888)

612

2,558

2,935

12,140（1,097)

16,536

Accumulated other comprehensive income
Total
Foreign currency Remeasurements accumulatedtranslationof defined benefit otheradjustment
planscomprehensive
incomeBalance at beginning ofcurrent period
Changes of items
during period
Exercise of shareacquisition rights

48

（66)

（17)

Share acquisition
Total net assets
rights145

16,052

225

Dividends of surplus（710)

Profit attributable toowners of parent

1,971

Purchase of treasury
shares（903)

Disposal of treasury
shares29

Change of scope of
consolidation-

Net changes of items
other thanshareholders’ equity
Total changes of items
during period
Balance at end ofcurrent period

（13)

（15)

（29)

（17)

（46)

（13)

（15)

（29)

（17)

566

34

（81)

（46)

128

16,618－15 －(4) Consolidated Statement of Cash Flows(Units: millions of yen)Previous fiscal year
(From April 1, 2017
To March 31, 2018)

Cash flows from operating activities
Profit before income taxes
Depreciation
Amortization of goodwill
Amortization of share issuance cost
Impairment loss
Loss on liquidation of subsidiaries and associates
Expenses for advanced repayment of loans(Gains) and losses on revaluation of investments insecurities
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 provision for point cardcertificates
Increase (decrease) in allowance for doubtful
accounts
Interest and dividend income
Rent income of real estate
Expenses of real estate rentInterest expenses
Loss on retirement of non-current assets
Share-based compensation expenses
Gain on reversal of share acquisition rights
Loss (gain) on sales of non-current assets
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
Other, net
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities

－

16 －

Current fiscal year
(From April 1, 2018
To March 31, 2019)

3,593
539
57
1
20
7
8

3,030
485
59
－
20
－
－

－

198

(2)
42

(13)
111

37

6

(43)

49

1

0

14

(0)

(0)
(1,006)
246
5
1
51
(0)
(12)

(0)
(1,020)
186
1
0
51
－
－

399

(248)

29
(339)

(33)
(41)

(270)

239

(23)
(22)
0
3,336
0
(5)
(1,006)
2,324

(100)
308
(118)
3,171
0
(1)
(1,323)
1,846

(Units: millions of yen)Previous fiscal year
(From April 1, 2017
To March 31, 2018)

Cash flows from investing activities
Purchase of property, plant and equipment
Proceeds from sales of property, plant andequipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from purchase of investments in
subsidiaries resulting in change in scope of
consolidation
Payments from transfer of business
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
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Net increase (decrease) in short-term loans payable
Repayments of long-term loans payable
Repayments of lease obligations
Proceeds from issuance of common shares
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
Increase in cash and cash equivalents from newly
consolidated subsidiary
Cash and cash equivalents at end of period

－

17 －

Current fiscal year
(From April 1, 2018
To March 31, 2019)

(11)

(254)

21

－

(304)
(198)

(970)
－

－

58

－
1,008
(246)
13
(10)
19
(0)
23
316

(125)
1,019
(186)
8
(458)
8
(1)
7
(894)

(300)
(1,126)
(71)
100
(0)
(636)
(2,033)

－
(517)
(48)
196
(903)
(708)
(1,982)

5

(13)

612
7,901

(1,042)
8,528

14

－

8,528

7,486

(5) Notes to Consolidated Financial Statements
Going Concern Assumption
Not applicable.
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 three reportable segments: IT Systems and Related Business for
Pharmacies, IT Systems and Related Business for Clinics, 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

Other Businesses

Development and sales of systems for nursing care providers,management of a fitness club, nursery school and pharmacy

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.

－

18 －

3. Information related to net sales, profit/loss, assets, liabilities and other items for each reportable segment
Previous fiscal year (From April 1st, 2017 to March 31st, 2018)(Units: millions of yen)Amounts

Reportable segment

recorded in
IT Systems

IT Systems

and Related

and Related

Other

Business for

Business for

Businesses

Pharmacies

Clinics

Adjustment

Total

consolidated
financialstatements(Note)Net sales
External sales

11,261

1,760

1,025

14,048(94)

13,953

45

4

3

54

(54)

-

11,307

1,765

1,029

14,102(148)

13,953

Segment profit

2,870

237

9

3,116

(53)

3,063

Segment assets

3,506

859

870

5,236

16,656

21,893

Depreciation

212

99

24

337

202

539

Increase in property, plant andequipment and intangible assets

185

197

38

421

-

421

Inter-segment sales and transfers
Total

Other items

Note: Segment profit is adjusted to be consistent with operating profit recorded in the consolidated financial
statements.
Current fiscal year (From April 1st, 2018 to March 31st, 2019)(Units: millions of yen)Amounts

Reportable segment

recorded in
IT Systems

IT Systems

and Related

and Related

Other

Business for

Business for

Businesses

Pharmacies

Clinics

Adjustment

Total

consolidated
financialstatements(Note)Net sales
External sales

10,472

1,704

1,057

13,234(100)

13,133

4

－

5

9

(9)

－

10,476

1,704

1,063

13,243(109)

13,133

Segment profit

2,389

239

0

2,630

(7)

2,622

Segment assets

4,219

1,155

1,248

6,623

15,72822,351

Depreciation

187

62

40

290

195

485

Increase in property, plant andequipment and intangible assets

717

477

44

1,239

－

1,239

Inter-segment sales and transfers
Total

Other items

Note: Segment profit is adjusted to be consistent with operating profit recorded in the consolidated financial
statements.

－

19 －

4. Reconciliation of amounts recorded in consolidated financial statements with total reportable segments(Units: millions of yen)

Net sales

Previous fiscal year

Total for reportable segments
Transfer to non-operating income
Eliminations for inter-segment
transactions
Net sales on the consolidated
financial statements

Current fiscal year

14,102

13,243

(94)

(100)

(54)

(9)

13,953

13,133(Units: millions of yen)

ProfitPrevious fiscal year

Current fiscal year

Total for reportable segments

3,116

2,630

Transfer to non-operating income
Eliminations for inter-segment
transactions
Net sales on the consolidated
financial statements

(21)

(25)

(31)

17

3,063

2,622
(Units: millions of yen)

AssetsPrevious fiscal year

Total for reportable segments

Current fiscal year
5,236

6,623

Transfer to non-operating income
17,24916,486
Eliminations for inter-segment
(592)
(757)
transactions
Net sales on the consolidated
21,89322,351
financial statements
Note: Corporate assets mainly include cash and deposits and real estate for investment that are not attributableto reportable segments.
(Units: millions of yen)Amounts recorded inconsolidated financial
statements

Adjustment

Total reportable segment
Other items
Previous
fiscal year

Current
fiscal year

Previous
fiscal year

Current
fiscal year

Previous
fiscal year

Current
fiscal year

Depreciation

337

290

202

195

539

485

Increase in property, plantand equipment andintangible assets

421

1,239

－

－

421

1,239

Related information
Previous fiscal year (Apr. 1, 2017 – Mar. 31, 2018)
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.
－20 －Current fiscal year (Apr. 1, 2018 – Mar. 31, 2019)
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 (Apr. 1, 2017 – Mar. 31, 2018)(Units: millions of yen)
IT Systems andRelated Businessfor Pharmacies

IT Systems andRelated Businessfor Clinics

Other Businesses

Impairment loss
17
2
Current fiscal year (Apr. 1, 2018 – Mar. 31, 2019)

Total

0

20

(Units: millions of yen)

Impairment loss

IT Systems andRelated Businessfor Pharmacies

IT Systems andRelated Businessfor Clinics

Other Businesses

13

2

4

Total

20

【Amortization of goodwill and unamortized balance by reportable segment】
Previous fiscal year (Apr. 1, 2017 – Mar. 31, 2018)(Units: millions of yen)Amortization forthe period

IT Systems andRelated Businessfor Pharmacies

IT Systems andRelated Businessfor Clinics

Other Businesses

34

-

22

57

-

203

254

Total

Unamortizedbalance at the50
period-end
Current fiscal year (Apr. 1, 2018 – Mar. 31, 2019)(Units: millions of yen)Amortization forthe period
Unamortizedbalance at the

IT Systems andRelated Businessfor Pharmacies

IT Systems andRelated Businessfor Clinics

Other Businesses

34

-

25

59

16

-

653

669

period-end【Gain on negative goodwill by reportable segment】
Previous fiscal year (Apr. 1, 2017 – Mar. 31, 2018)
Not applicable.
Current fiscal year (Apr. 1, 2018 – Mar. 31, 2019)
Not applicable.
－

21 －

Total

（Per Share Information）(From(Units: Yen 100ths of a yen)Previous fiscal year
April 1, 2017 To March 31, 2018)

Current fiscal year
April 1, 2018 To March 31, 2019)(From

Net assets per share

446.82

Net assets per share

469.07

Net income per share

66.72

Net income per share

55.73

Diluted net income per share

66.56

Diluted net income per share

54.91

Notes: 1. The Company conducted a common stock split according to a ratio of 1:2 effective on March 1, 2018. Net
assets per share, net income per share and diluted net income per share are calculated as if this stock
split had taken place at the beginning of the fiscal year ended March 31, 2017.
2. 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 April 1, 2017
To March 31, 2018)

Current fiscal year
(From April 1, 2018
To March 31, 2019)

Net income per share
Profit attributable to owners of parent

2,369

1,971

Amounts not available to common stock
shareholders

－

－

2,369

1,971

35,513,775

35,375,368－－

82,699527,479

Profit attributable to owners of parent
available to common stock
Average number of shares of common stock
outstanding during the period (Shares)

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）
Not applicable.

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.
－

22 －