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

December 2021 1st Quarter Financial Statement [Japan Standard] (Consolidated)
May 14th, 2021
Listed company name

EM Systems Co., Ltd.

Code No.

4820

URL: http://www.emsystems.co.jp

Representative:(Job title)

President&Representative
Director

Representative for inquiries(Job title)

Managing director in the company,
General Manager of Administration Headquarters

Listed on: Tokyo
Stock Exchange(Name)
Hiromasa Kunimitsu(Name)
Megumi Seki

Planned date of subMay 14th, 2021
Planned starting date of payment
mission of quarterlyof dividends
reportSupplementary explanatory materials created for quarterly financial statement
Quarterly financial results briefing held (For Use by Analysts)

TEL:+81(0)6-6397-1888

－
: No
: No

(Amounts of less than 1 million yen rounded down)
1. Consolidated results of December 2021 1st Quarter Financial Statement (January 1st 2021 through March 31st, 2021)(1) Consolidated management performance (total)
Sales

December 2021
1st quarter
December 2020
1st quarter(Note) Comprehensive income

Millionsof yen3,294
2,928
December
2021 1st
Quarter(% refers to rate of change over the same quarter in the previous year)
Operating profits%－

Millionsof yen322－

Millionsof yen
449

%
－

262

(51.8)

412(41.7)

297(37.0)

Millions of
yen

( －%)

December2020 1st
Quarter

299

Millions ofyen(38.0 %)

(10.8)
319%

Quarterly net income
belonging to parent
company shareholders
Millions of
%
yen
－
299

Ordinary profits

Quarterly net income per share
Yen 100ths of a yen
4.22
4.18

December 2021 1st quarter
December 2020 1st quarter(Note)

Quarterly net income per share after
potential stock adjustment
Yen 100ths of a yen
4.21
4.15

1. Accompanying the change in closing date (from March 31 to December 31), consolidated fiscal year 2020 is an irregular 9month fiscal period.
2. Due to the change in closing date, the company’s 1st accounting period (From January 1st ,2021 to March 31st,2021 ) is different from the 1st accounting period (From April 1st ,2020 to June 31st,2021 ), the year-on-year rate of change will not belisted for the fiscal period.
(2) Consolidated financial position
Total assets
Millions of yen
December 2021 1st quarter
23,238December 2020
23,096
December(Refer to) Net capi2021 1st
17,340tal
Quarter

Net assets

Capital adequacy ratio

Millions of yen
17,453
17,734
Millions ofyen

1Net assets per share

%
74.6
76.4
December 2020
period17,655

Yen 100ths of a yen
244.12248.55
Millions of yen

2. State of dividends
End of 1st quarter
Yen 100ths of a yen

End of 2nd quarter
Yen 100ths of a yen

Annual dividends
End of 3rd quarter
Yen 100ths of a yen

December 2020–
4.00–
December 2021
December 2021
4.00
(estimate)(Note)1. Revisions from the last published dividend estimates: None–

End of term
Yen 100ths of a
yen
6.00

Total
Yen 100ths of a
yen
10.00

–

6.00

10.00

3. Estimated consolidated results of December 2021 period (January 1st, 2021 through December 31st, 2021)(% refers to rate of change over the previous term)
Net sales

End of 2ndquarter (total)
Full year

Operating profit

Ordinary profit

Profit attributable to own- Net income
ers of parent
per share
Millions of
Yen 100ths％
yenof a yen

Millionsof yen％Millionsof yen％Millionsof yen

％

6,742

6.3

686

(19.5)

937(19.1)

622(22.4)

8.76

13,974

－

1,508

－

2,017

－

1,357

－

19.10

(Note) 1. Revisions from the last published forecast of financial results: None

2. Following the approval of the "Partial Amendment to the Articles of Incorporation" at the 37th Ordinary General Meeting of Shareholders held on June 16, 2020, as of the year ending December 2020, thecompany has changed the settlement date from March 31st to December 31st. In addition, domestic subsidiaries with fiscal periods ending on dates other than December 31st will make a similar change. Accordingly, consolidated performance for the December 2020 period (the duration after the change to thefiscal period closing date) will be calculated based on the nine-month period from April to December forthe company and domestic subsidiaries with fiscal periods closing in March, and based on the twelvemonth period from January to December for overseas subsidiaries with fiscal periods closing in December. Therefore, regarding the consolidated performance forecast for the December 2021 period, the yearon-year rate of change will not be listed for the entire fiscal period.
* Addendums(1) Changes in major subsidiaries during cumulative quarterly consolidated period (changes in designated subsidiaries accompanied by changes within the scope of consolidation): None
(2) Application of special accounts processing in the creation of the quarterly consolidated financial statement: Yes(Note) For details, please see the attached document P.11 "2. Quarterly consolidated financial statement and major explanatory notes (3) Addendums relating to quarterly consolidated financial statement (application of special accounts processing in
the creation of the quarterly consolidated financial statement)".
(3) Changes to accounting policy, changes to estimates in accounting, revised restatements
1. Changes to accounting policies accompanying revision to accounting standards, etc. : None
2. Changes to accounting policies other than 1.

: None3. Changes to estimates in accounting: None4. Revised restatement: None2(4) Number of shares outstanding (ordinary stock)
1. Number of shares outstanding at endof term (including own stock)
2. Number of own shares at end of term
3. Average number of shares outstanding
during term (quarterly total)

December 2021
1st quarter
December 2021
1st quarter
December 2021
1st quarter

74,514,800 shares
3,483,317 shares
71,033,316 shares

December 2020
periodDecember 2020
periodDecember 2020
1st quarter

74,514,800 shares
3,478,870 shares
71,247,430 shares* The quarter financial statement is not subject to quarterly review by certified public accountants or auditors.
* Explanation regarding appropriate use of estimated results and other special notes
The descriptions of the future such as estimated results contained in this document are based on information possessed bythis company at the present time and certain assumptions this company deems reasonable, and they may differ greatly toactual results due to a variety of factors.

○Table of contents of attached materials
1. QUALITATIVE INFORMATION RELATING TO THIS QUARTER'S FINANCIAL RESULTS -------------------------------------- 4(1) Explanation regarding operating results ------------------------------------------------------------------------------------------------------ 4(2) Explanation regarding financial position ------------------------------------------------------------------------------------------------------ 5(3) Explanation regarding information on future prospects such as forecast of consolidated financial results ----------------- 6
2. QUARTERLY CONSOLIDATED FINANCIAL STATEMENTS AND MAJOR EXPLANATORY NOTES ------------------------- 7(1) Quarterly consolidated balance sheet ---------------------------------------------------------------------------------------------------------- 7(2) Quarterly consolidated statements of income and quarterly consolidated statements of comprehensive income --------- 9(3) Addendums relating to quarterly consolidated financial statement ------------------------------------------------------------------ 113

1. Qualitative information relating to this quarter's financial results(1) Explanation regarding operating results
Following the approval of the "Partial Amendment to the Articles of Incorporation" at the 37th Ordinary General Meeting of Shareholders held on June 16, 2020, as of the year ending December 2020, the Group haschanged the settlement date from March 31st to December 31st. For this reason, each segment comparison isbased on the reference figures calculated as “YoY change” for the three months from April to June 2020.
The outlook of Japan's economy during 1st quarter of the current consolidated cumulative period remains uncertain due to the spread of COVID-19, and the end of the pandemic is still nowhere in sight despite recurring
state of emergencies and the implementation of priority measures to prevent infection.
In the pharmacy industry, a major customer of the Group, the number of prescriptions has decreased becauseof postponed prescriptions due to the spread of COVID-19, and the environment surrounding small and medium-sized pharmacies is becoming more severe. In the medical (clinic) industry, the number of patients has
decreased due to restrictions in consultations of medical care subjects, and in the long-term care/welfare-relatedindustry, changes in the business environment of our customers, such as an increase in outpatient care andtemporary closures of short-term accommodation facilities, have had a considerable impact on the Group. Under
such circumstances, the Group has endeavored to continue its business activities and maintain its activity level
while taking measures to prevent infection.
In addition, as part of the introduction of ICT in the medical field, the government is developing a system thatenables My Number or health insurance card chips to be used at medical institution reception desks for checking credentials online. Although full-scale operation has been postponed, the Group has received orders from alarge number of customers as planned, and will continue to introduce and install this online credential confirmation system for its customers.
As a result, our performance for this 1st quarter consolidated cumulative period was 3,294million yen in sales(a 12.5% increase compared to the same period in the previous year), 322million yen in operating profits (a23.2% increase), 449million yen in ordinary profits (a 8.9% increase), and 299 million yen in this quarterly net
income belonging to parent company shareholders (a 0.6% increase).
Although sales were affected by a revision of new business openings and capital investment timing in light ofthe spread of COVID-19, both initial sales and billed sales increased on a Year-over-Year basis as a result of anincrease in the number of existing products sold. On the other hand, selling, general and administrative expenses are increasing due to increased business activity and maintenance of the activity level.
By-segment results are as follows.
(ITS Systems and Related Business for Pharmacies)
In the IT systems and related business for pharmacies, initial sales are increasing due to an increase in thenumber of existing system sales. On a Year-over-Year basis, the main reason for the decrease in operating income was an increase in depreciation expenses from the release of new functions for “MAPs for PHARMACY”
and an increase in selling, general and administrative expenses due to increased sales activity.
Consequently, IT Systems and Related Business for Pharmacies for this 1st quarter consolidated cumulative
period resulted in 2,487 million yen in sales (a 11.4% increase compared with the same period in the previousyear) and 274 million yen in operating profits (a 8.8% decrease).
In addition, the Group has started a business partnership with Good Cycle System Inc. and received OEM
provision from them for “Smart Medication History GooCo,” an electronic medication history tool, and for “Followcare,” a follow-up support tool for patients during their medication period. Accordingly, we will combine thiswith our Group’s existing reception system, “ReceptyNext,” to start selling “ReceptyNext TYPE GooCo.”(IT Systems and Related Business for Clinics)
Regarding IT systems and related business for Clinics, in order to expand the sales channels nationwide, weare taking a wide range of approaches by utilizing web marketing in addition to the conventional method of developing the clinic market.

4In addition to the increase in sales of existing systems, the number of customers has steadily increased due tothe introduction of “MAPs for CLINIC,” etc., and billing sales are also steadily increasing.
Consequently, IT Systems and Related Business for Clinics for this 1st quarter consolidated cumulative period resulted in 462 million yen in sales (a 17.5% increase compared to the same period in the previous year)
and 3 million yen in operating profits (previous period: 15 million yen in operating losses ).

(IT Systems and Related Business for Long-term Care/Welfare)In the IT systems and related business for long-term care/welfare, in addition to the introduction of “Sukoyaka Sun” by large-scale facilities, billing sales are steadily increasing due to an increase in the number of licenses.
In addition, the development of “MAPs for NURSING CARE” resulted in capitalization which led to operating
profit.
Consequently, IT Systems and Related Business for Long-term Care/Welfare for this 1st quarter consolidated
cumulative period resulted in 166 million yen in sales (a 41.7% increase compared with the same period in theprevious year ) and 44 million yen in operating profits (previous period: 38 million yen in operating losses).
(Other businesses)
In addition to an increase in selling, general and administrative expenses from the initial development of the
cashless business, due to the change in the rental conference room operating system, rental conference room
sales are no longer included in the calculation of sales and operating income of other businesses, and both sales
and operating income are decreasing.
Consequently, other business for this 1st quarter consolidated cumulative period resulted in 179 million yen
in sales (a 7.1% decrease compared to the same period in the previous year) and 0 million yen in operating profits (a 94.9% decrease ).
On the other hand, in order to accelerate the business and management support of pharmacies using statistical information and enhance its valuable services, ChoQi Co., Ltd., a subsidiary of the Group, has formed a business partnership with PRESUS CUBE, which provides BI tools for pharmacies and analyzes information.
Through this partnership, the Group will further contribute to medical society.
（Segmented sales and operating profits and losses are the amounts before elimination of internal transactions between segments.）(2) Explanation regarding financial position(Assets)
Current assets at the end of 1st quarter of the current consolidated fiscal year were 10,759 million yen, a decrease of 431 million yen from the end of the previous consolidated fiscal year. This was mainly due to a decrease of 483 million yen in other current assets due to the difference in the payment month of accounts receivable. Fixed assets were 12,478 million yen, an increase of 573 million yen from the end of the previous consolidated fiscal year. This was mainly due to an increase in investment securities of 670 million yen from the acquired shares of NHOSA Corporation.
As a result, total assets were 23,238 million yen, an increase of 141 million yen from the end of the previous consolidated fiscal year.
(Liabilities)
Current liabilities at the end of 1st quarter of the current consolidated fiscal year were 3,898 million yen, an
increase of 422 million yen from the end of the previous consolidated fiscal year. This was mainly the result of
an increase in other current liabilities of 113 million yen due to an increase in bonus reserves of 168 million yen,
an increase in notes and accounts payable of 150 million yen, and an increase in advance payments of 158 million yen. Fixed liabilities were 1,885 million yen, an increase of 0 million yen from the end of the previous consolidated fiscal year. This was mainly due to an increase in retirement benefit liabilities of 18 million yen and adecrease in long-term deposits of 14 million yen.
As a result, total liabilities were 5,784 million yen, an increase of 422 million yen from the end of the previous
consolidated fiscal year.
(Net assets)

5

Net assets at the end of 1st quarter of the current consolidated fiscal year were 17,453 million yen, a decrease of
281 million yen from the end of the previous consolidated fiscal year. This was mainly due to a decrease in retained earnings of 345 million yen and an increase in non-controlling interests of 34 million yen from the payment of dividends.
As a result, equity ratio was 74.6% (76.4% at the end of the whole consolidated fiscal year).
(3) Explanation regarding information on future prospects such as forecast of consolidated financial results
Estimated consolidated results for the full year ending December 2021 are unchanged from the information
provided in estimated Consolidated Results for the Full Year announced via the Summary of Accounts that was
released on February 10, 2021. In the future, if it becomes necessary to revise estimated results, we plan to disclose said revisions immediately.

62. Quarterly consolidated financial statements and major explanatory notes(1) Quarterly consolidated balance sheet(Units: millions of yen)Previous consolidated
fiscal year
(December 31st, 2020)
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 (net)Land
Lease assets (net)
Rental assets (net)
Construction in progress
Others (net)Total tangible fixed assets
Intangible fixed assets
Software
Software in progress
Reputation
OthersTotal intangible fixed assets
Investments and other assets
Investment securities
Investment real estate (net)
Net defined benefit asset
OthersAllowance for bad debts
Total investments and other assets
Total fixed assets
Total assets

7This 1st quarter consolidated fiscal period(March 31st, 2021)

7,982
2,004
248
0
968
(14)
11,191

7,905
1,920
462
0
485
(14)
10,759

660
525
13
5
－
237
1,441

640
474
7
4
40
203
1,371

1,532
555
383
119
2,591

1,533
597
358
117
2,606

9
6,938
120
805
(0)
7,872
11,90523,096

679
6,930
123
767
(0)
8,499
12,47823,238

(Units: millions of yen)Previous consolidated
fiscal year
(December 31st, 2020)
Liabilities
Current liabilities
Notes and accounts payable
Accounts payable-other
Lease obligations
Income taxes payable, etc.
Provision for bonuses
Provision for points card certificates
OthersTotal current liabilities
Fixed liabilities

Lease obligations
Net defined benefit liability
Provision for product warranties
Long-term guarantee deposits
Total fixed 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 income
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Total other cumulative comprehensive income
Subscription rights to shares
Minority interests
Total net assets
Total liabilities and net assets

8This 1st quarter consolidated fiscal period(March 31st, 2021)

833
506
24
176
344
3
1,586
3,476

984
487
17
190
513
4
1,700
3,898

5
1,065
86
728
1,885
5,362

4
1,084
83
713
1,885
5,784

2,785
3,283
13,216(1,610)17,675

2,785
3,292
12,871(1,610)17,338

31
(51)
(19)
55
23
17,73423,096

48
(46)
2
55
57
17,45323,238

(2) Quarterly consolidated statements of income and quarterly consolidated statements of comprehensive income(Quarterly consolidated statements of income)(1st quarter consolidated cumulative period)(Units: millions of yen)

Sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profits
Non-operating profits
Interest income
Real estate rental income
OthersTotal non-operating profits
Non-operating expenses
Interest expense
Real estate rental expenses
OthersTotal non-operating expenses
Ordinary profits
Special profits
Gain on reversal of subscription rights to shares
Total special profits
Special losses
Losses on disposal of fixed assets
Total special losses
Quarterly net income before adjustment for taxes, etc.
Corporation tax, etc.
Quarterly net income
Loss attributable to non-controlling interests
Profit attributable to owners of parent

Previous 1st quarter consolidated cumulative period(From April 1st, 2020
To June 30th, 2020)
2,928
1,460
1,467
1,205
262

This 1st quarter consolidated
cumulative period(From January 1st, 2021
To March 31st, 2021)
3,294
1,666
1,628
1,305
322

0
240
2
243

0
244
6
251

0
90
2
92
412

0
120
4
125
449

15
15

－
－

0
0
427
129
297
－
297

1
1
447
149
297
(1)
299

9

(Quarterly consolidated statements of comprehensive income)(1st quarter consolidated cumulative period)(Units: millions of yen)

Quarterly net income
Other comprehensive income
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Total other comprehensive income
Quarterly comprehensive income(Breakdown)
Quarterly comprehensive income concerning parent
company shareholders
Quarterly comprehensive income concerning
non-controlling shareholders

Previous 1st quarter consolidated cumulative period(From April 1st, 2020
To June 30th, 2020)
297

This 1st quarter consolidated
cumulative period(From January 1st, 2021
To March 31st, 2021)
297

(6)
7
1
299

16
5
21
319

299

321

–

(1)

10

(3) Addendums relating to quarterly consolidated financial statement(Explanatory notes regarding prerequisites of going concern)
There is no applicable information.
(Explanatory notes for cases of considerable changes in amounts of shareholder's equity)
There is no applicable information.
(Application of special accounts processing in the creation of the quarterly consolidated financial statement)
We have calculated tax expenses by multiplying quarterly net income before taxes and effective tax ratethat were reasonably estimated, following application of tax effect accounting for the income before taxes of
the consolidated accounting period including this 1st quarter consolidated cumulative period.

（Segment and Other Information）
Segment information
Ⅰ.Previous first quarter consolidated cumulative period (From April 1st, 2020 to June 30th, 2020)
1. Information related to net sales, profit/loss for each reportable segment(Units: millions of yen)

Reportable segment
IT Systems

IT Systems

and Related

and Related

Business for

Business for

Pharmacies

Clinics

IT Systems
for Long-termcare/welfare

Quarterly

Adjustment
Other Businesses(Note)1

Total

consolidated
incomestatement
amountNet sales
External sales
Inter-segment sales and transfers
Total
Segment profit or loss

(Note)2

2,232

393

117

192

2,936

(8)

2,928

0

－

－

0

0

(0)

－

2,232

393

117

193

2,936

(8)

2,928

300

(15)

(38)

6

252

9

262

(Note) 1: Adjustment of segment profit or loss are the amounts before elimination of internal transactions between
segments.
(Note) 2: Segment profit is adjusted to be consistent with operating profit recorded in the consolidated financial
statements.
2. Impairment loss of non-current assets by reportable segment（Impairment loss of non-current assets）
Not applicable.
（Significant changes in goodwill）
Not applicable.
（Gain from negative goodwill）
Not applicable.

11

Ⅱ.Current first quarter consolidated cumulative period (From January 1st, 2021 to 31st, March 2021)
1. Information related to net sales, profit/loss for each reportable segment(Units: millions of yen)

Reportable segment
IT Systems

IT Systems

and Related

and Related

Business for

Business for

Pharmacies

Clinics

IT Systems
for Long-termcare/welfare

Quarterly

Adjustment
Other Businesses

consolidated(Note)1

Total

incomestatement
amountNet sales
External sales
Inter-segment sales and transfers
Total
Segment profit or loss

(Note)2

2,486

462

166

179

3,294

－

3,294

0

－

－

－

0

(0)

－

2,487

462

166

179

3,295

(0)

3,294

274

3

44

0

322

0

322

(Note) 1: Adjustment of segment profit or loss are the amounts before elimination of internal transactions between
segments.
(Note) 2: Segment profit is adjusted to be consistent with operating profit recorded in the consolidated financial
statements.
2. Impairment loss of non-current assets by reportable segment（Impairment loss of non-current assets）
Not applicable.
（Significant changes in goodwill）
Not applicable.
（Gain from negative goodwill）
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 the convenience of readers who prefer an English translation.

12