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 2022 2nd Quarter Financial Statement [Japan Standard] (Consolidated)
August 9th, 2022
Listed on: Tokyo
Stock Exchange

Listed company name

EM Systems Co., Ltd.

Code No.

4820

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

Representative:(Job title)

President&Representative
Director(Name)
Hiromasa Kunimitsu

Representative for inquiries(Job title)

Managing director in the company,
General Manager of Administration Headquarters(Name)
Megumi Seki

Planned date of subAugust 9th,Planned starting date of payment
mission of quarterly
2022
of dividends
reportSupplementary explanatory materials created for quarterly financial statement
Quarterly financial results briefing held (For Use by Analysts)

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

September 2nd2022
: Yes
: Yes

(Amounts of less than 1 million yen rounded down)
1. Consolidated results of December 2022 2nd Quarter Financial Statement (January 1st 2022 through June 30th, 2022)(1) Consolidated management performance (total) (% refers to rate of change over the same quarter in the previous year)
Sales

December 2022
2nd quarter
December 2021
2nd quarter(Note) Comprehensive income

Millionsof yen
8,164

Operating profits%
21.0

Millionsof yen
1,360

6,672

5.5

December
2022 2ndQuarter

1,134

%

Quarterly net income
belonging to parentcompany shareholders
Millions of%
yen
58.4
1,089

Ordinary profits

133.4

Millionsof yen
1,603

56.7

582

(31.6)

1,023(11.7)

687(14.3)

Millions ofyen(59.4)

December
2021 2ndQuarter

711

Millions ofyen(13.1)

Quarterly net income per share
Yen 100ths of a yen
15.35
9.68

December 2022 2nd quarter
December 2021 2nd quarter%

Quarterly net income per share after
potential stock adjustment
Yen 100ths of a yen
15.31
9.65

(2) Consolidated financial position
Total assets
December 2022 2nd
Millions of yen
quarter
24,787
December 2021
24,809December(Refer to) Net
2022 2nd
18,999capitalQuarter

Net assets

Capital adequacy
ratio

net assets per share%
76.6
75.5

Yen 100ths of a yen
268.51
263.12Millions of yen
19,08818,826
Millions ofyenDecember
2021 period

18,728Millions ofyen

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 2021
–
4.00
–
4.00
December 2022
December 2022
(estimate)(Note)1. Revisions from the last published dividend estimates: None1–––

End of term
Yen 100ths of ayen
7.00

Total
Yen 100ths of ayen
11.00

7.00

11.00

3. Estimated consolidated results of December 2022 period (January 1st, 2022 through December 31st, 2022)(% refers to rate of change over the previous term)
Net sales

Full year

Millionsof yen16,436

Operating profit％
13.9

Millionsof yen
2,431

Ordinary profit
Millionsof yen
2,977

％
30.0％
14.2

Profit attributable to own- Net income
ers of parent
per share
Millions ofYen 100ths％
yenof a yen
2,063
12.8
29.07

(Note) 1. Revisions from the last published forecast of financial results: Yes* 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.9 "2. Quarterly consolidated financial statement and major explanatory
notes (3) Addendums relating to quarterly consolidated financial statement (application of special accounts processing in thecreation 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. : Yes
2. Changes to accounting policies other than 1.

: None3. Changes to estimates in accounting: None4. Revised restatement: None(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 2022
2nd quarter
December 2022
2nd quarter
December 2022
2nd quarter

74,514,800 shares
3,755,549 shares
70,960,450 shares

December 2021
periodDecember 2021
periodDecember 2021
2nd quarter

74,514,800 shares
3,335,617 shares
71,042,583 shares* The quarter financial statement is not subject to quarterly review by certified public accountants or auditors.
* 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.

2○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 ------------------ 5
2. QUARTERLY CONSOLIDATED FINANCIAL STATEMENTS AND MAJOR EXPLANATORY NOTES--------------------------- 6(1) Quarterly consolidated balance sheet --------------------------------------------------------------------------------------------------------------- 6(2) Quarterly consolidated statements of income and quarterly consolidated statements of comprehensive income ---------- 8(3) Addendums relating to quarterly consolidated financial statement ----------------------------------------------------------------------- 9(Explanatory notes regarding prerequisites of going concern) --------------------------------------------------------------------------------9(Explanatory notes for cases of considerable changes in amounts of shareholder's equity) -----------------------------------------9(Application of special accounts processing in the creation of the quarterly consolidated financial statement) --------------93

1. Qualitative information relating to this quarter's financial results(1) Explanation regarding operating results
Although economic and social activities are gradually returning to normal owing to the progression of COVID19 vaccinations and other factors, the Japanese economy during this 2nd quarter consolidated period remains
unpredictable due to the prolonged situation in Ukraine, the rising prices of goods due to the rapid depreciationof the yen in foreign exchange markets, and other reasons.
In the pharmacy industry, our main clients, in addition to the initialization in October 2021 of a system thatenables online confirmation of eligibility information using one’s Individual Number or health insurance card atthe reception counter of medical institutions, etc. as well as the establishment of new evaluation items that address utilization of ICT and integration of digitalization due to revisions to the medical system conducted inApril 2022, there have been further efforts to promote and enhance systems to transition from drug-focused services to patient-focused services at pharmacies.
Against this backdrop, we have been securing the materials and personnel necessary to install online eligibility verification systems, and expanding the scope of installations to encompass customers who plan to initialize
the system.
In addition, our billing sales volume has also increased due to an increase in the number of customers.
As a result, our business results for this 2nd quarter consolidated cumulative period was 8,164 million yen insales (a 22,4% increase compared to the same period in the previous year), 1,360 million yen in operating profits(a 133.4% increase), 1,603million yen in ordinary profits (a 56.7%increase), and 1,089 million yen in this quarterly net income belonging to parent company shareholders (a 58.4% increase).
By segment results are as follows.
(ITS Systems and Related Business for Pharmacies)
In regard to IT systems and related business for pharmacies, in addition to the increase of initial sales, billing
sales have also increased accompanying an increase in the number of customers due to expanded incorporationof the online eligibility verification system and MAPs for PHARAMCY, as well as due to an increase in the number of existing systems sold.
Consequently, IT Systems and Related Business for Pharmacies for this 2nd quarter consolidated cumulative
period resulted in 6,500million yen in sales (a 27.4% increase compared with the same period in the previousyear) and 1,496 million yen in operating profits (a 153.2% increase).
We also began joint development together with Good Cycle Systems Inc., one of our group companies, of MAPs
for PHARMACY DX (tentative name) as a system to support pharmacies and pharmacists in their shift to patient-focused services.
(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.
In addition to an increase in initial sales due to expanded incorporation of the online eligibility verification
system, billing sales have also been bullish due to an increase in sales of existing systems, as well as due to asteady increase in the number of billing customers who installed MAPs for CLINIC, etc. At the same time, selling and administrative expenses have also increased due to initiatives aimed at expanding our share of the market for clinic systems.
Consequently, IT Systems and Related Business for Clinics for this 2nd quarter consolidated cumulative period resulted in 1,072 million yen in sales (a 16.5% increase compared to the same period in the previous year)
and 184 million yen in operating losses (previous period: 16million yen in operating losses).
(IT Systems and Related Business for Long-term Care/Welfare)In our long-term care/welfare system business, billing sales remain bullish due to an increase in the numberof licenses, while initial sales decreased due to initialization of a large project during the same period in the pre-4

vious year. We also experienced an increase in manufacturing costs due to investments in new system development personnel in response to revisions to the Long-Term Care Act in excess of those expected in the same period of the previous year.
Consequently, IT Systems and Related Business for Long-term Care/Welfare for this 2nd quarter consolidated
cumulative period resulted in 268 million yen in sales (a 11.4% decrease compared with the same period in theprevious year) and 55 million yen in operating profits (previous period: 4 million yen in operating profits )(Other businesses)
Both sales and operating profits in our pharmacy business decreased due to the impact of the spread of
COVID-19.
Consequently, other business for this 2nd quarter consolidated cumulative period resulted in 347 million yen
in sales (a 2.3% decrease compared to the same period in the previous year) and 22million yen in operating
losses (previous period: 11 million yen in operating losses).
（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 this 2nd quarter consolidated accounting period came to 12,362 million yen, adecrease of 212 million yen compared to the end of the previous consolidated fiscal year. Primarily, this is due toa 241million yen decrease in notes and accounts receivable. Fixed assets came to 12,425 million yen, an increaseof 190 million yen over the end of the previous consolidated fiscal year. This was primarily due to an increase of
365 million yen in investment securities and a decrease of 202 million yen in software.
As a result, total assets were 24,787 million yen, a decrease of 21 million yen from the end of the previous consolidated fiscal year
(Liabilities)
Current liabilities during this 2nd quarter consolidated accounting period came to 3,788 million yen, a decrease of 378 million yen compared to the end of the previous consolidated fiscal year. This was primarily due todecreases of 111 million yen in provision for bonuses due to payment of bonuses as well as 107 million yen innotes and accounts payable. Fixed liabilities came to 1,910 million yen, an increase of 94 million yen comparedto the end of the previous consolidated fiscal year. This was primarily due to an increase of 73 million yen inlease obligations resulting from the acquisition of lease assets.
As a result, total liabilities were 5,699 million yen, a decrease of 283 million yen from the end of the previous
consolidated fiscal year.
(Net assets)
Net assets at the end of this 2nd quarter consolidated accounting period came to 19,088 million yen, an increase of 262 million yen compared to the end of the previous consolidated fiscal year. This was primarily due toacquisition of 344 million yen in treasury stock, while retained earnings increased by 561 million yen.
As a result, equity ratio was 76.6% (75.5% at the end of the previous 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 2022 have been changed from the information provided in Estimated Consolidated Results for the Full Year announced via the Summary of Accountsfor Fiscal Year Ending December 2021 that was released on February 9, 2022. For details, please see to the Notification on Estimated Results for 2nd Quarter Consolidated Accounting Period in Fiscal Year Ending December 2022 and Variance from Actual Values & Revision to Estimated Consolidated Results for the Full Year, released on August 9, 2022.

5

2. Quarterly consolidated financial statements and major explanatory notes(1) Quarterly consolidated balance sheet(Units: millions of yen)Previous consolidated
fiscal year(December 31st, 2021)
AssetsCurrent assetsCash 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

6This 2nd quarter consolidated fiscal period(June 30th, 2022)

8,289
2,555
688
0
1,040
(0)
12,574

8,418
2,314
634
0
995
(1)
12,362

604
474
4
2
72
174
1,333

586
474
115
1
71
159
1,408

1,393
732
285
109
2,521

1,191
860
237
104
2,393

677
6,733
29
955
(15)
8,380
12,23424,809

1,043
6,622
29
941
(13)
8,623
12,42524,787

(Units: millions of yen)Previous consolidated
fiscal year
(December 31st, 2021)
Liabilities
Current liabilities
Notes and accounts payable
Accounts payable-other
Lease obligations
Income taxes payable, etc.
Provision for bonuses
Provision for points card certificatesContract liability
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

7This 2nd quarter consolidated fiscal period(June 30th, 2022)

852
465
4
663
403
4－
1,773
4,167

744
494
37
596
292
1,042
580
3,788

1
1,039
50
724
1,815
5,983

74
1,072
24
739
1,910
5,699

2,785
3,347
14,116(1,539)18,7082,785
3,347
14,678(1,883)18,92669(49)
19554218,826
24,809115(42)7255
33
19,08824,787

(2) Quarterly consolidated statements of income and quarterly consolidated statements of comprehensive income(Quarterly consolidated statements of income)(2nd 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
Dividend income
Real estate rental income
OthersTotal non-operating profits
Non-operating expenses
Interest expense
Real estate rental expenses
Equity Losses of Affiliated Companies
OthersTotal non-operating expenses
Ordinary 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 2nd quarter consolidated cumulative period(From January 1st, 2021
To June 30th, 2021)
6,672
3,551
3,120
2,537
582

This 2nd quarter consolidated
cumulative period(From January 1st, 2022
To June 30th, 2022)
8,164
4,051
4,1132,753
1,360

1190
492
4
6880－
517
5
5250235－
12248
1,023

4
208
65
4
283
1,603

11
1,021
341
679
(7)
687

00
1,603
522
1,080
(8)
1,089

(Quarterly consolidated statements of comprehensive income)(2nd 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 2nd quarter consolidated cumulative period(From January 1st, 2021
To June 30th, 2021)
679

This 2nd quarter consolidated
cumulative period(From January 1st, 2022
To June 30th, 2022)
1,080

21
10
31711

46
7
53
1,134

719

1,142(7)(8)

8

(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 2nd quarter consolidated cumulative period.

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.

9