Note: 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.

May 13, 2024

Consolidated Financial Results
for the Fiscal Year Ended March 31, 2024
(Under Japanese GAAP)
Company name:
Systena Corporation
Listing:
Tokyo Stock Exchange
Securities code:
2317
URL:
https://www.systena.co.jp/
Representative:
Yoshichika Hemmi, Representative Director and Chairman
Inquiries:
Hiroshi Kotani, Director
Telephone:+81-3-6367-3840
Scheduled date of annual general meeting of shareholders:June 21, 2024
Scheduled date to commence dividend payments:
June 7, 2024
Scheduled date to file annual securities report:
June 21, 2024
Preparation of supplementary material on financial results:
Yes
Holding of financial results briefing:
Yes (for institutional investors and analysts)(Yen amounts are rounded down to millions, unless otherwise noted.)

1. Consolidated financial results for the fiscal year ended March 31, 2024 (from April 1, 2023 to March 31,
2024)(1) Consolidated operating results(Percentages indicate year-on-year changes.)

Net sales

Operating profit

Profit attributable toowners of parent

Ordinary profit

Fiscal year ended

Millions of yen

March 31, 2024

76,940

3.2

9,713

(1.3)

9,942

(0.1)

7,232

(1.2)

March 31, 2023

74,526

14.2

9,844

8.1

9,955

16.1

7,317

22.1

Note: Comprehensive income%

Millions of yen%

Millions of yen

For the fiscal year ended March 31, 2024:
For the fiscal year ended March 31, 2023:

Basic earnings
per share
Fiscal year ended

Diluted earnings
per shareYen%¥7,451 million¥7,340 million

Return on equity

Yen

Millions of yen%[1.5%][20.5%]

Ratio of ordinary
profit to total assets

Ratio of operating
profit to net sales

%

%

%

March 31, 2024

18.67

–

20.0

19.3

12.6

March 31, 2023

18.89

–

22.9

21.6

13.2

Reference:

Share of profit (loss) of entities accounted for using equity method
For the fiscal year ended March 31, 2024:¥51 million
For the fiscal year ended March 31, 2023:¥35 million(2) Consolidated financial position
Total assets
As of

Net assets

Equity-to-asset ratio

Net assets per share

Millions of yen

Millions of yen

March 31, 2024

54,03838,601

70.5

98.34

March 31, 2023

48,87934,650

69.9

88.19

Reference:

EquityAs of March 31, 2024:
As of March 31, 2023:¥38,099 million¥34,168 million%

Yen(3) Consolidated cash flows
Cash flows fromoperating activities

Cash flows frominvesting activities

Fiscal year ended

Millions of yen

March 31, 2024
March 31, 2023

Cash and cash
equivalents at end of
periodCash flows fromfinancing activities

Millions of yen

Millions of yen

Millions of yen

9,036

(251)

(3,504)30,092

7,648(2,016)(2,854)

24,792

2. Cash dividends
Annual dividends per share
First
SecondThird
quarter-end quarter-end quarter-end
Yen
Fiscal year ended

March 31, 2023
Fiscal year ended

March 31, 2024

Yen

Fiscalyear-end

Yen

Total

Yen

Total cash
dividends(Total)Ratio of
Payout ratio dividends to(Consolidated) net assets(Consolidated)

Yen Millions of yen

%

%

–

4.00

–

4.00

8.00

3,112

42.4

9.7

–

5.00

–

5.00

10.00

3,890

53.6

10.7

–

6.00

–

6.00

12.00

Fiscal year ending

March 31, 2025

78.8

(Forecast)

Note: As ranges have been presented for the consolidated earnings forecasts for the fiscal year ending March 31, 2025, the statedpayout ratio for the fiscal year ending March 31, 2025 is based on the minimum value in that range. If presenting this value
based on the maximum value in that range, the dividend payout ratio would be 63.7%.

3. Consolidated earnings forecasts for the fiscal year ending March 31, 2025 (from April 1, 2024 to March
31, 2025)
Net sales
Millionsof yenOperating profit%

Millionsof yen%(Percentages indicate year-on-year changes.)
Profit attributable to Basic earnings
Ordinary profit
owners of parent
per share
Millionsof yen%Millionsof yen%Yen

85,00010.5
8,500(12.5)
8,500(14.5)
5,900(18.4)
15.23
March 31, 2025
to 100,000 to 30.0 to 10,500 to 8.1
to 10,500 to 5.6
to 7,300 to 0.9
to 18.84
Note: The Group has a policy of conducting short-term aggressive investment, which presents numerous elements of uncertainty thatmake it difficult to calculate forecast figures to any reasonable extent. Accordingly, for the consolidated earnings forecasts forthe fiscal year ending March 31, 2025, the forecast figures are presented as ranges. For more details, please refer to “1.
Overview of operating results, etc., (1) Overview of operating results for the period under review, (ii) Forecast for the next
fiscal year” on page 5 of the Attached Materials.
Fiscal year ending* Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in the change
in scope of consolidation): None
(2) Changes in accounting policies, changes in accounting estimates, and restatement(i) Changes in accounting policies due to revisions to accounting standards and other regulations: None(ii) Changes in accounting policies due to other reasons: None(iii) Changes in accounting estimates: Yes(iv) Restatement: None
(3) Number of issued shares (common shares)(i)

Total number of issued shares at the end of the period (including treasury shares)
As of March 31, 2024

450,880,000 shares

As of March 31, 2023

450,880,000 shares(ii) Number of treasury shares at the end of the period
As of March 31, 2024

63,439,188 shares

As of March 31, 2023

63,439,188 shares(iii) Average number of shares outstanding during the period
Fiscal year ended March 31, 2024

387,440,812 sharesFiscal year ended March 31, 2023

387,422,095 shares

Note: The Company has introduced a stock compensation plan, and in calculating the number of treasury shares of commonshares at the end of the period and the average number of shares outstanding during the period, the number of treasury
shares includes shares of the Company held by Japan Custody Bank, Ltd. (the Trust Account) as trust assets for the “Trustfor Granting Shares to Directors” and the “Trust for Granting Shares to Executive Officers.” The number of treasury shares
held by the Trust Account included in the number of treasury shares at the ends of the fiscal years ended March 31, 2024
and March 31, 2023 were 1,567,700 shares, and the numbers of treasury shares held by the Trust Account excluded fromthe calculation of the average number of shares outstanding during the fiscal years ended March 31, 2024 and March 31,
2023 were as follows: the average numbers of treasury shares of common shares held by the Trust Account for the fiscal
years ended March 31, 2024 and March 31, 2023 were 1,567,700 shares and 1,586,417 shares, respectively.

[Reference] Overview of non-consolidated financial results
1. Non-consolidated financial results for the fiscal year ended March 31, 2024 (from April 1, 2023 to March
31, 2024)(1) Non-consolidated operating results(Percentages indicate year-on-year changes.)
Net sales

Operating profit

Ordinary profit

ProfitFiscal year ended

Millions of yen

March 31, 2024

67,603

2.7

8,725

(2.4)

8,887

(1.0)

6,503

(2.1)

March 31, 2023

65,855

13.3

8,936

5.1

8,979

6.2

6,641

19.3

%

Basic earnings
per share
Fiscal year ended

Millions of yen%

Diluted earnings
per share
Yen

Yen

March 31, 2024

16.79

–

March 31, 2023

17.14

–

Millions of yen%

Millions of yen%

(2) Non-consolidated financial position
Total assets
As of

Net assets

Equity-to-asset ratio

Net assets per share

Millions of yen

Millions of yen

March 31, 2024

48,44034,474

71.2

88.98

March 31, 2023

44,13031,362

71.1

80.95

Reference:

EquityAs of March 31, 2024:
As of March 31, 2023:%

Yen¥34,474 million¥31,362 million* Financial results reports are exempt from audit conducted by certified public accountants or an audit
corporation.
* Proper use of earnings forecasts, and other special matters
Forward-looking statements in this material, including earnings forecasts, are based on information currently
available to the Company and on certain assumptions deemed reasonable. Actual results may differ significantly
due to various factors. For assumptions underlying the forecast and cautions regarding the use of earnings
forecasts, please refer to “1. Overview of operating results, etc., (1) Overview of operating results for the period
under review, (ii) Forecast for the next fiscal year” on page 5 of the Attached Materials.

Attached Materials Table of Contents
1.

2.
3.
4.

5.

6.

Overview of operating results, etc. ................................................................................................................................................. 2(1) Overview of operating results for the period under review .................................................................................................. 2(2) Overview of financial position for the period under review .................................................................................................. 5(3) Basic policy on profit distribution and dividends for the fiscal year under review and the next fiscal year..................... 6(4) Business and other risks ........................................................................................................................................................... 7(5) Issues to be addressed .............................................................................................................................................................. 7
Corporate group .............................................................................................................................................................................. 9
Basic approach to the selection of accounting standards .............................................................................................................. 9
Consolidated financial statements ................................................................................................................................................ 10(1) Consolidated balance sheet .................................................................................................................................................... 10(2) Consolidated statement of income and consolidated statement of comprehensive income .............................................. 12
Consolidated statement of income ............................................................................................................................................ 12
Consolidated statement of comprehensive income ................................................................................................................... 13(3) Consolidated statement of changes in equity ........................................................................................................................ 14(4) Consolidated statement of cash flows.................................................................................................................................... 16(5) Notes to the consolidated financial statements ..................................................................................................................... 18(Notes on premise of going concern)........................................................................................................................................ 18(Significant matters that serve as the basis for preparing consolidated financial statements) ................................................... 18(Significant accounting estimates) ............................................................................................................................................ 20(Changes in accounting estimates) ........................................................................................................................................... 21(Additional information) .......................................................................................................................................................... 21(On the consolidated balance sheet) ......................................................................................................................................... 22(On the consolidated statements of income) ............................................................................................................................. 22(On the consolidated statement of comprehensive income)...................................................................................................... 23(On the consolidated statement of changes in equity) .............................................................................................................. 24(On the consolidated statement of cash flows) ......................................................................................................................... 26(Lease transactions) .................................................................................................................................................................. 26(Financial instruments) ............................................................................................................................................................. 26(Securities) ............................................................................................................................................................................... 29(Retirement benefits) ................................................................................................................................................................ 30(Tax effect accounting)............................................................................................................................................................. 31(Revenue recognition) .............................................................................................................................................................. 32(Segment information, etc.) ...................................................................................................................................................... 33(Information on related parties) ................................................................................................................................................ 36(Per share information) ............................................................................................................................................................. 37(Significant subsequent events) ................................................................................................................................................ 37
Non-consolidated financial statements ......................................................................................................................................... 39(1) Non-consolidated balance sheet ............................................................................................................................................. 39(2) Non-consolidated statement of income.................................................................................................................................. 42(3) Non-consolidated statement of changes in equity ................................................................................................................ 44(4) Notes to the non-consolidated financial statements ............................................................................................................. 46(Notes on premise of going concern)........................................................................................................................................ 46(Significant accounting policies) .............................................................................................................................................. 46(Significant accounting estimates) ............................................................................................................................................ 48(Changes in accounting estimates) ........................................................................................................................................... 48(Additional information) .......................................................................................................................................................... 48(On the non-consolidated balance sheet) .................................................................................................................................. 48(On the non-consolidated statements of income) ...................................................................................................................... 49(Securities) ............................................................................................................................................................................... 49(Tax effect accounting)............................................................................................................................................................. 49(Revenue recognition) .............................................................................................................................................................. 50(Significant subsequent events) ................................................................................................................................................ 50
Other ............................................................................................................................................................................................... 51

The Company will hold a briefing session for investors as follows. The materials distributed at the briefing will be posted on the
Company’s website immediately after the briefing.
・May 15, 2024 (Wednesday) Company Information Briefing for Institutional Investors and Analysts-1-1. Overview of operating results, etc.
Matters discussed here that are not historical fact reflect judgments made as of the end of the fiscal year underreview.
(1) Overview of operating results for the period under review(i) Operating results for the period under review
During the fiscal year under review (April 1, 2023 to March 31, 2024), the Japanese economy saw amoderate recovery centered on personal consumption, as economic and social activities normalized after the
COVID-19 pandemic. However, prolonged global monetary tightening employed to curb the inflation causedby surging resource and raw materials prices and the downturn in overseas economies resulting from theuncertain international situation continue to present a downward risk on the economy in Japan.
Given these conditions, the Group recognizes that improving productivity is a key issue in securing
earnings amid high inflation. In addition to focusing more on recurring revenue businesses, the Group
continued to expand businesses with high added value such as consulting operations and PMO projects
aimed at the support of promoting DX in the software development business.
Furthermore, we continued to invest proactively in human resources and improve wages and working
conditions to pursue initiatives for the stable acquisition of excellent human resources.
In the Solution Design Business, the Group focused on expanding orders in the in-vehicle and DX service
fields, where significant growth is expected.
In the Framework Design Business, the Group deployed its system development expertise from thefinancial sector to customers in the public and distribution/services sectors, and worked to increase orders inthe business application development and infrastructure (cloud) architecture operations.
In the IT Service Business, the Group focused on providing PMO services, a growth field, in response to
demand for the introduction of various tools and business process improvements aimed at corporate
digitalization as opposed to conventional IT support business, including system operations and help desks.
In the Business Solution Business, the Group focused on service businesses, not product-oriented
businesses, and strove to further strengthen its recurring revenue businesses, centered on the subscription
business and system development and support.
In the Cloud Business, which is responsible for promoting the subscription business, the Group expanded
the functionality of its in-house products Canbus. and Cloudstep and actively offered a “DX Design Lab”
that supports DX promotion starting at the project stage.
As a result of the above, consolidated results for the period under review were net sales of ¥76,940 million(up 3.2% year on year), operating profit of ¥9,713 million (down 1.3% year on year), ordinary profit of¥9,942 million (down 0.1% year on year), and profit attributable to owners of parent of ¥7,232 million(down 1.2% year on year).
The following describes performance by segment. Note that net sales for each segment include intersegment net sales or transfers.
a. Solution Design Business
The Solution Design Business is divided into five categories: in-vehicle, social infrastructure, internet
business, products, and DX services. In this business, the Group is working to win orders from clientswith robust development motivation.
Given these conditions, although unprofitable projects from the first quarter were nearing conclusion in
the second quarter, with the opportunity loss impacts and lost sales opportunities as resources allocated in
response to those projects as well as delays in assigning staff, net sales in this segment were ¥21,267
million (down 5.0% year on year), and operating profit was ¥2,717 million (down 30.8% year on year).
(In-Vehicle)
In the in-vehicle category, the importance of mobility software is increasing in the automobile industry,and orders expanded due to the robust development demand for in-vehicle infotainment, integrated
cockpit systems and electric vehicles. Using our technical capabilities in software development cultivatedin the mobile field, we strengthened our development system to meet the demand of Japanese finishedvehicle manufacturers and Tier-1 suppliers. Going forward, we will focus on expanding mobility
development orders received for next-generation applications.
(Social Infrastructure)
In the social infrastructure category, which supports the mechanisms of society, including
telecommunications infrastructure, payment infrastructure, transportation infrastructure, power grids, andmore, and enriches people’s lives, the Group used its technical capabilities in the fields of embedded-2-systems and web design developed in the in-vehicle and products categories to work on solutions. Given
the increased number of inquiries regarding the replacement and digital transformation (DX) of power,transportation, disaster prevention, satellite, defense, and other systems, the Group will continue topromote expansion into local governments and the public sector.
(Internet Business)
In fields related to the Internet business category, such as Internet services and e-commerce, the Groupalso received an increased number of inquiries due to an increase in demand for cashless payment
settlement, the development of services and generative AI in Fintech domains, and development utilizing
Web3 technologies. We will continue endeavoring to secure more orders by leveraging the strengths wehave cultivated over the years in offering total solutions covering planning, development and verification,
IT consulting and IT services.
(Products)
In the products category, which engages in development, including smartphones, home appliances,robotics, and payment terminals, the Group has numerous inquiries related to the keywords “AI,” “IoT,”
and “mobile,” which are strengths of the Group, leading to expanded orders received. The Group’s onestop support for the entire product lifecycle of not only product development and quality evaluation, butalso infrastructure environment construction, CI/CD environment construction, and support, has been wellreceived. The Group will continue to expand orders received while striving to differentiate itself from its
competitors.
(DX Services)As demand increases for undertaking corporate DX, the Group has continued to expand orders received forsystem development with superior flexibility and expandability such as the optimization of work processes
and data use and operational streamlining through AI and automation as well as development utilizing lowcode and no-code tools. In addition, the Group will continue to actively promote the development of newservices, such as TimeTapps, a cloud attendance management system, and Palette.Link, a groupware thatenhances the quality of relationships, as orders for these services have been strong.
b. Framework Design BusinessIn this business, the Group harnessed its track record in application development in the financial sector to
expand the scope of its offerings to customers in the public and corporate sectors, leading to an increase inorders for system development projects.
In the financial sector, the Group provides core system development services for customers in thebanking industry and life and non-life insurance industries. In addition to long-term system development
work in areas such as contract management systems and accounts systems, sales remained steady due toincreased inquiries for DX projects such as cloud migration and the development of new services aimed at
CX improvement.
In the public sector, orders were received for new projects, primarily related to central government
ministries and agencies, and the respective business areas of system development, infrastructure
construction, and operation and maintenance remained firm. In the period under review, orders received
for projects for local governments made progress, and the Group’s corresponding area expanded.
In addition, in the corporate sector, the Group received increased orders for technical support services
using low-code development tools and system rebuilding focused on system renewal for digitaltransformation (DX). The Group’s “laboratory system” for total system support, from proof of concept
support in the system planning stages to operations and maintenance after system development, has led toincreased competitiveness.
As a result, net sales in this business amounted to ¥6,901 million (up 13.2% year on year) and operating
profit was ¥1,642 million (up 28.3% year on year).
c. IT Service BusinessIn this business, which mainly operates a variety of IT-related outsourcing services, including system
operation and maintenance, helpdesk and user support services, and PMO, economic activities that had
stagnated due to the COVID-19 pandemic resumed, which resulted in increased IT investment appetitefrom companies hoping to increase their competitiveness as well as a lot of inquiries related tomodernization aimed at business standardization and automation.
Given these market conditions, the Group focused on expanding accompanying PMO services that
support business improvement, including the introduction of various tools and business process
rebuilding, based on an accurate understanding of latent customer issues.

-3-In addition, to enhance customer analysis, the Group strived to understand IT investment plans and IT
events and pursued horizontal development by conducting proposal activities targeting existing customer
divisions with which the Group does not have transactions in order to gain the ability to provide betterbusiness development support.
The Group also focused on acquiring new customers in an effort to secure the next group of loyal
clients to ensure the Group’s future.
In the software testing services business, the Group made use of its knowledge of customers in theInternet Business/gaming domains to pivot to clients in the enterprise domain, thereby acquiring newcustomers, procuring human resources with an immediate impact, and strengthening relationships withpartner companies.
Regarding engagement with persons with disabilities, we have focused our efforts on understanding
each person’s individuality and placing the right person in the right position, expanding the breadth ofwork that can allow them to experience growth and improving productivity.
As a result, net sales in this business amounted to ¥18,297 million (up 3.1% year on year) and operating
profit was ¥2,922 million (up 15.9% year on year).
d. Business Solution Business
For this business, where the Group is primarily engaged in B2B sales of IT-related products and system
integration services mainly for foreign-affiliated and medium-sized companies, the outlook is uncertain
because of the weak yen and soaring prices of raw materials and commodities. Even so, the number ofprojects related to the use of DX to increase productivity, reduce costs, and increase competitiveness isgradually trending upward.
Specifically, the Group received a number of orders in the cloud-related system integration business forvarious services including lift and shift, which is a type of the method of cloud migration.
Furthermore, from the end of life (EOL) of server groups, we achieved considerable growth in terms ofservice projects associated with the sales of hardware, including servers, storage, and networking
products.
Furthermore, the Group received many inquiries relating to system development and maintenance andoperation projects to digitalize corporations’ businesses by making use of RPA and data linkage tools, aswell as the security services and support services, increasing the number of orders received.
As a result, net sales in this business amounted to ¥28,434 million (up 7.3% year on year) and operating
profit was ¥2,054 million (up 16.7% year on year).
e. Cloud BusinessIn this business, where the Group provides original services and cloud services to companies and otherentities, and which is responsible for promoting the subscription business model, the Group received
many inquiries regarding its Canbus. no-code DX platform from companies promoting DX, and, because
we received many inquiries for generative AI in particular, we proactively promoted related investment
and sales reinforcement. Although there were a lot of orders, there were also many projects for which fullscale introduction starting with proof of concept was carried over to the next period.
As a result, net sales in this business amounted to ¥2,119 million (up 5.6% year on year) and operating
profit was ¥372 million (down 3.7% year on year).
f. Overseas BusinessIn the U.S., although there have been specification adjustments for some manufacturing companies and adecrease in system testing work, we received repeat orders from Japanese-affiliated firms located in
Silicon Valley for proof of concept development and verification services, which check the effectivenessof elemental technologies of Silicon Valley start-up companies. In addition, the Group continued toreceive inquiries related to in-vehicle system development and verification and therefore focused on
securing orders.
ONE Tech, Inc., a U.S. company the subsidiary has invested in, focused on sales of its proprietary“MicroAI™” to the manufacturing industry and telecommunications companies. StrongKey, Inc., another
U.S.-based company the subsidiary has invested in, focused on sales of security services based on FIDO
authentication and the Public Key Infrastructure (PKI) service (public key infrastructure) supporting the
new smart home communication standard “Matter.”
As a result, net sales in this business amounted to ¥129 million (down 3.4% year on year) and theoperating loss was ¥27 million (versus operating loss of ¥29 million in the same period of the previous
fiscal year).

-4-

g. Investment & Incubation Business
GaYa Co., Ltd., which develops and runs game content for smartphones, runs social media games it hasdeveloped and designs and develops business applications for smartphones and tablets. During the period
under review, we strived to improve various KPIs by releasing features for the game app “Keiba Densetsu
PRIDE” that expand the depth of introducing and developing new racehorses. In addition, in terms ofcontracted development, both game and business development remained strong, and, regarding gamedevelopment in particular, we expanded the scope of responsibilities to include PMO support and focusedon manpower management as well as negotiation with other teams.
As a result, net sales in this business amounted to ¥187 million (down 39.5% year on year) and theoperating profit was ¥33 million (versus operating loss of ¥0 million in the same period of the previous
fiscal year).
(ii) Forecast for the next fiscal year
The outlook for the next fiscal year is as follows.
In terms of the fiscal year under review, the Group recognizes that the acquisition of excellent humanresources is an urgent issue given the increased prices of commodities and wages due to recent inflation as
well as increasingly serious human resource shortages stemming from the declining birthrate and aging
population. The Group will therefore continue to improve wages and working conditions while also actively
investing in recurring revenue businesses with the aim of identifying partner companies and hiring engineers
with high-level technical capabilities in particular as well as achieving M&A and securing earnings.
In addition, aside from increasing productivity, the Group will focus on expanding its high added-value
businesses, including consulting operations and PMO projects aimed at supporting the promotion of DX in
the software development business, to shift increased costs to the price as soon as possible.
As described above, given the Group’s policy of aggressive short-term investment as well as many
uncertainties that make it difficult to calculate reasonable numbers, the Group has decided to use the range
method for its consolidated earnings forecasts for the fiscal year ending March 31, 2025.
The Group’s consolidated earnings forecasts for the fiscal year ending March 31, 2025 are as follows: net
sales of ¥85,000 million to ¥100,000 million (up 10.5% to 30.0% year on year), operating profit of ¥8,500
million to ¥10,500 million (down 12.5% to up 8.1% year on year), ordinary profit of ¥8,500 million to¥10,500 million (down 14.5% to up 5.6% year on year), and profit attributable to owners of parent of ¥5,900
million to ¥7,300 million (down 18.4% to up 0.9% year on year).
(2) Overview of financial position for the period under review(i) Analysis of assets, liabilities and net assets
Total assets at the end of the fiscal year under review amounted to ¥54,038 million (versus ¥48,879 million
at the end of the previous fiscal year), an increase of ¥5,159 million from the end of the previous fiscal year.
Current assets amounted to ¥48,088 million (versus ¥42,275 million at the end of the previous fiscal year),an increase of ¥5,812 million from the end of the previous fiscal year.
This was mainly due to a ¥5,135 million increase in cash and deposits.
Non-current assets amounted to ¥5,950 million (versus ¥6,603 million at the end of the previous fiscal
year), a decrease of ¥653 million from the end of the previous fiscal year. Property, plant and equipment
amounted to ¥1,395 million (versus ¥1,622 million at the end of the previous fiscal year), a decrease of ¥226
million from the end of the previous fiscal year. Intangible assets amounted to ¥254 million (versus ¥317
million at the end of the previous fiscal year), a decrease of ¥62 million from the end of the previous fiscal
year. Investments and other assets amounted to ¥4,299 million (versus ¥4,663 million at the end of theprevious fiscal year), a decrease of ¥364 million from the end of the previous fiscal year. This was mainly
due to a ¥590 million decrease in investment securities.
Total liabilities amounted to ¥15,437 million (versus ¥14,228 million at the end of the previous fiscal
year), an increase of ¥1,208 million from the end of the previous fiscal year. This was mainly due to a ¥411
million increase in provision for bonuses and a ¥341 million increase in accounts payable - trade.
Net assets amounted to ¥38,601 million (versus ¥34,650 million at the end of the previous fiscal year), an
increase of ¥3,950 million from the end of the previous fiscal year. This was mainly due to profit attributableto owners of parent of ¥7,232 million and dividends of surplus of ¥3,501 million.
As a result, the equity-to-asset ratio increased 0.6 percentage points from the end of the previous fiscal
year to 70.5%.
(ii) Analysis of cash flows
Cash and cash equivalents (“net cash”) at the end of the fiscal year under review amounted to ¥30,092
million, up ¥5,300 million from the end of the previous fiscal year.

-5-The following outlines the status and underlying change factors of each classification of cash flows for the
fiscal year under review.
(Cash flows from operating activities)
Net cash provided by operating activities amounted to ¥9,036 million (versus ¥7,648 million provided in theprevious fiscal year). The main inflows were profit before income taxes of ¥9,942 million, depreciation of¥576 million, an increase in provision for bonuses of ¥411 million, and an increase in trade payables of ¥341
million. The main outflows were income taxes paid of ¥2,674 million.
(Cash flows from investing activities)
Net cash used in investing activities amounted to ¥251 million (versus ¥2,016 million used in the previous
fiscal year). The main outflows were ¥10,546 million for purchase of investment securities, ¥6,720 million
for purchase of securities, and ¥341 million for purchase of property, plant and equipment and intangible
assets. The main inflows were ¥11,231 million in proceeds from sale of investment securities and ¥6,064
million in proceeds from sale of securities.
(Cash flows from financing activities)
Net cash used in financing activities amounted to ¥3,504 million (versus ¥2,854 million used in the previous
fiscal year). The main outflow was dividends paid of ¥3,504 million.
Trends in the Group’s cash flow indicators are shown below.
Fiscal year ended March Fiscal year ended March Fiscal year ended March
31, 2022
31, 2023
31, 2024
Equity-to-asset ratio (%)

68.5

69.9

70.5

Equity-to-asset ratio on a market value basis (%)

384.0

229.9

195.0

Ratio of interest-bearing debt to cash flows (%)

28.0

20.3

17.2

Interest coverage ratio (times)

777.6

1,077.8

1,244.4

Equity-to-asset ratio: Shareholders’ equity/Total assets
Equity-to-asset ratio on a market value basis: Market capitalization/Total assets
Ratio of interest-bearing debt to cash flows: Interest-bearing debt/Cash flows
Interest coverage ratio: Cash flows/Interest payments* For each indicator, all calculations are based on consolidated financial figures.
* Market capitalization is calculated by multiplying the number of shares outstanding minus the numberof treasury shares by the closing stock price, both as of the end of the fiscal year.
* Interest-bearing debt is all debt on the consolidated balance sheet for which interest is paid.
* Cash flows and interest payments refer to “Cash flows from operating activities” and “Interest paid”
as reported in the consolidated statement of cash flows.
(3) Basic policy on profit distribution and dividends for the fiscal year under review and the next fiscal year
The Company recognizes that returning profits to shareholders is an important management issue, and its basic
policy is to distribute profits in accordance with business performance, with a foundation of ongoing, stabledividends.
The Company will be proactive in targeting a consolidated dividend payout ratio of 40% or more, taking into
consideration its business performance and financial position for each fiscal year, as well as the strengtheningof its management base and future business development.
The Company will also flexibly implement share repurchases as part of its profit return policy, taking into
consideration such factors as its financial condition and stock price trends.
For the fiscal year under review, the Company plans to pay an annual dividend of ¥10 per share, consistingof a year-end dividend of ¥5 per share and an interim dividend of ¥5 per share.
Retained earnings will be effectively used for investment in business fields where growth is expected,
research and development of in-house products, and strengthening of recruitment and training of humanresources in line with business expansion.
For the next fiscal year, the Company plans to pay an annual dividend of ¥12 per share (consisting of aninterim dividend of ¥6 per share and a year-end dividend of ¥6 per share).
Note that the Company’s Articles of Incorporation stipulate that the Company may pay dividends fromsurplus, etc. by resolution of the Board of Directors pursuant to Article 459, Paragraph 1 of the Companies
Act.

-6-

(4) Business and other risks
The following is a list of major risk factors that may affect the Group’s business development. While it is theGroup’s policy to recognize the possibility of the occurrence of these risks and to make every effort to avoid
their occurrence and to address any that may occur, the Group believes that investment decisions regarding thisstock should be made after careful consideration of the following content provided in this section as well asother matters listed.
This section includes forward-looking statements reflecting judgments made as of the end of the fiscal year
under review.
(i) Management of confidential information
Since many of the Company’s operations require a high degree of confidentiality in terms of both technology
and sales strategy and information security is becoming increasingly important, the Company has obtained
ISO 27001 certification, the international standard for information security management, and is taking
rigorous action to ensure this certification is applied and enforced.
If, despite these actions, information leaks were to occur, the Company could face compensation fordamages, decreasing business orders due to loss of trust, and other significant effects on the business, which
could affect the Group’s performance and financial position.
(ii) Legal regulations
The legal regulations surrounding the Group’s business are as follows.
a. Act against Delay in Payment of Subcontract Proceeds, etc. to Subcontractors
This law specifies the obligation to deliver an order form, to prepare and preserve documents, to specify adue date for payment of subcontract proceeds (the obligation to pay within 60 days after delivery orprovision of services), to pay interest on late payment, etc., when a corporation with capital of over ¥300
million subcontracts to a corporation with capital of ¥300 million or less.
The law was amended in June 2003 (effective April 1, 2004) to add subcontracting for the creation of
information-based products (programs, broadcast programs, etc.), provision of services, and manufactureof metal dies to the scope of the law. As a result, subcontracting transactions for the creation of
information-based products (programs) related to the Group are covered and subject to legal regulations.
b. Act on Securing the Proper Operation of Worker Dispatching Businesses and Protecting Dispatched
Workers (“Worker Dispatching Act”)
The purpose of this act is “to take measures for securing proper operation of a worker dispatching businessfor the proper adjustment of labor demand and supply, in conjunction with the Employment Security Act,as well as measures for protecting dispatched workers, and thereby to contribute to the stability of
employment and otherwise to the promotion of the welfare of dispatched workers” (Article 1). In
accordance with this act, the Group has been licensed for general worker dispatching business. Reasons fordisqualification of license for general worker dispatching are stipulated in the items of Article 6 of this act.
Furthermore, Article 14 of this act stipulates that if a general worker dispatching business operator(including its officers) falls under any of the items of Article 6 of the act after license registration, theMinister of Health, Labour and Welfare may rescind the license granted to said general worker dispatchingbusiness operator. Article 14 also stipulates that, when a general worker dispatching business operator
violates the provisions of the act or the Employment Security Act, or any orders or dispositions based onthese provisions, the Minister of Health, Labour and Welfare may order the operator to suspend all or partof the relevant worker dispatching business for a designated period of time.
In addition, the Group submits business reports and settlements of accounts associated with worker
dispatching to the Minister of Health, Labour and Welfare in accordance with this act.
Since the Group has established a system that complies with laws and regulations, and its officers arealso committed to compliance with laws and regulations, there are currently no factors present that could
hinder business activities. Although the Group will continue to make every effort to comply with laws andregulations, any violation of laws and regulations may lead to restrictions on its business, which could
affect the Group’s performance.
(5) Issues to be addressed
Matters discussed here that are not historical fact reflect judgments made by the Group as of the end of the
fiscal year under review.

-7-

As the global situation rapidly changes, including the end of the COVID-19 pandemic, the Ukrainian war, theIsraeli-Palestinian war in Gaza, and carbon neutrality, supply shortages stemming from supply chain
disruptions, increasing transportation costs, and inflation due to decreasing interest rates are causing majorchanges in the global economy.
Meanwhile, Japan, which has faced deflation for thirty years, has been struck by a major wave requiring acomplete withdrawal from cost-cutting management, and only companies that can ride that wave will survive
this turning point.
Given this economic situation, the Group is dramatically altering its course to adopt an inflationary-period
corporate management style. More specifically, the Group is undergoing a self-transformation from thesurvival-oriented management of the deflation period to value-creating management as the Group shifts todynamic management.
The Group also considers human capital management to be of the utmost importance.
In order to respond to the expectations of many clients in various industries in spite of the chronic shortageof IT human resources, the Group will actively invest in human capital, including ongoing wage increases
aimed at acquiring excellent human resources who will serve as the wellspring of new value creation.
The Systena Group will make a concentrated effort to grow and resolve various social issues throughcustomers, thereby contributing to the development of the Japanese—and by extension the global—economy.

-8-2. Corporate group

3. Basic approach to the selection of accounting standards
Since most of the Group’s stakeholders are domestic shareholders, creditors, business partners, etc., and there islittle need to raise funds from overseas, the Group applies accounting standards that are generally accepted inJapan (J-GAAP).

-9-4. Consolidated financial statements(1) Consolidated balance sheet(Millions of yen)
As of March 31, 2023
AssetsCurrent assets
Cash and deposits
Notes receivable - trade
Accounts receivable - trade
Contract assets
Securities
MerchandiseWork in process
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings
Accumulated depreciation
Buildings, net
VehiclesAccumulated depreciation
Vehicles, net
Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net
Land
Other
Accumulated depreciation
Other, net
Total property, plant and equipment
Intangible assets
Software
Software in progress
Other
Total intangible assets
Investments and other assets
Investment securities
Long-term loans receivable from subsidiaries andassociates
Leasehold and guarantee deposits
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets*1- 10 -

As of March 31, 2024

25,033799
13,600
599
–
1,501
–
743
(2)
42,27530,168783
13,576
557
727
1,216
4
1,054
–
48,088

1,143
(399)
743
67
(33)
33
2,416
(1,671)
745
97
11
(9)
1
1,622

1,171
(468)
702
63
(41)
22
2,479
(1,907)
572
97
11
(10)
0
1,395

310
4
3
317

251
–
3
254

2,136

*1

1,546

538

498

1,588
905
33
(538)
4,663
6,603
48,879

1,649
974
129
(498)
4,299
5,950
54,038(Millions of yen)
As of March 31, 2023
Liabilities
Current liabilities
Accounts payable - trade
Short-term borrowings
Accounts payable - other, and accrued expenses
Income taxes payable
Accrued consumption taxes
Provision for bonuses
Other
Total current liabilities
Non-current liabilities
Long-term accounts payable - other
Provision for share-based payments
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets*2- 11 -

6,096
1,550
2,459
1,524
794
1,460
203
14,088

As of March 31, 2024

*2

6,438
1,550
2,463
1,656
926
1,872
366
15,273

16
114
10
140
14,228

13
141
9
164
15,4371,513
6,023
31,709(5,022)
34,223

1,513
6,023
35,440(5,022)
37,955

(91)
36
(54)
481
34,65048,879

17
125
143
501
38,60154,038

(2) Consolidated statement of income and consolidated statement of comprehensive income
Consolidated statement of income(Millions of yen)
Fiscal year ended
March 31, 2023
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
Gain on sale of securities
Gain on sale of investment securities
Share of profit of entities accounted for using equity
methodSubsidy income
Gain on investments in investment partnerships
Other
Total non-operating income
Non-operating expenses
Interest expenses
Loss on valuation of securities
Loss on sale of investment securities
Loss on investments in investment partnerships
Office relocation expenses
Other
Total non-operating expenses
Ordinary profit
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent

*1

*2*3

- 12 -

Fiscal year ended
March 31, 2024

74,52656,132
18,393
8,549
9,844

*1

*2*3

76,94058,862
18,078
8,364
9,713

28
5
–
31

30
11
86
–

35

51

35
–
54
190

39
42
42
304

7
–
–
28
17
27
80
9,955
9,955
2,661
(58)
2,603
7,351
34
7,317

7
14
41
–
–
12
76
9,942
9,942
2,806
(117)
2,688
7,253
20
7,232

Consolidated statement of comprehensive income(Millions of yen)
Fiscal year ended
March 31, 2023
ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests*1- 13 -

Fiscal year ended
March 31, 2024

7,351

7,253

(66)
72

109
115

(16)

(26)

(11)
7,340

*1

198
7,451

7,306

7,431

34

20

(3) Consolidated statement of changes in equity
Fiscal year ended March 31, 2023
(Millions of yen)
Shareholders’ equity

Balance at beginning of period

Share capital

Capital surplus

Retained earnings

Treasury shares

1,513

6,025

27,309(5,042)

Total shareholders’equity29,806

Changes during period
Dividends of surplus(2,917)(2,917)

Profit attributable to owners ofparent

7,317

7,317

Disposal of treasury shares

20

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

(2)

20
(2)

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

–

(2)

4,399

20

4,417

1,513

6,023

31,709(5,022)

34,223

Non-controllinginterests

Total net assets

411

30,173

Accumulated other comprehensive income
Valuation difference
on available-for-salesecurities
Balance at beginning of period(25)

Foreign currencytranslation adjustment(18)

Total accumulated
other comprehensive
income(43)

Changes during period
Dividends of surplus(2,917)

Profit attributable to owners ofparent7,317

Disposal of treasury shares

20

Change in ownership interestof parent due to transactions
with non-controlling interests(2)

Net changes in items other thanshareholders’ equity

(66)

55

(11)

70

59

Total changes during period

(66)

55

(11)

70

4,476

Balance at end of period

(91)

36

(54)

481

34,650- 14 -

Fiscal year ended March 31, 2024
(Millions of yen)
Shareholders’ equity

Balance at beginning of period

Share capital

Capital surplus

Retained earnings

Treasury shares

1,513

6,023

31,709(5,022)

Total shareholders’equity34,223

Changes during period
Dividends of surplus(3,501)(3,501)

Profit attributable to owners ofparent

7,232

7,232

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

–

–

3,731

–

3,731

1,513

6,023

35,440(5,022)

37,955

Non-controllinginterests

Total net assets

481

34,650

Accumulated other comprehensive income
Valuation difference
on available-for-salesecurities
Balance at beginning of period(91)

Foreign currencytranslation adjustment
36

Total accumulated
other comprehensive
income(54)

Changes during period
Dividends of surplus(3,501)

Profit attributable to owners ofparent7,232

Net changes in items other thanshareholders’ equity

109

88

198

20

218

Total changes during period

109

88

198

20

3,950

Balance at end of period

17

125

143

501

38,601- 15 -

(4) Consolidated statement of cash flows(Millions of yen)
Fiscal year ended
March 31, 2023
Cash flows from operating activities
Profit before income taxes
Depreciation
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for share-based
payments
Interest and dividend income
Interest expenses
Loss (gain) on sale of securities
Loss (gain) on valuation of securities
Loss (gain) on investments in investment partnerships
Loss (gain) on sale of investment securities
Share of loss (profit) of entities accounted for using
equity method
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Decrease (increase) in advance payments to suppliers
Increase (decrease) in trade payables
Increase (decrease) in accounts payable - other, andaccrued expenses
Increase (decrease) in accrued consumption taxes
Increase (decrease) in advances received
Other, net
SubtotalInterest and dividends received
Interest paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment andintangible assets
Proceeds from sale of property, plant and equipment
and intangible assets
Purchase of securities
Proceeds from sale of securities
Purchase of investment securities
Proceeds from sale of investment securities
Payments of leasehold and guarantee deposits
Proceeds from refund of leasehold and guarantee
deposits
Proceeds from distributions from investment
partnerships
Other payments
Other proceeds
Net cash provided by (used in) investing activities- 16 -

Fiscal year ended
March 31, 2024

9,955
478
(9)
112

9,942
576
(2)
411

16

27

(33)
7
–
–
28
(31)

(42)
7
(86)
14
(42)
41

(35)

(51)

(672)
(349)
25
398

86
281
(19)
341

418

52

2
1
(15)
10,29741(7)(2,683)
7,648

132
(23)
20
11,66750(7)(2,674)
9,036

(386)
–

(101)
100

(1,158)

(341)

27

4

–
–
(19,745)
19,300(81)(6,720)
6,064(10,546)
11,231
(91)

6

30

27

121

(7)
1
(2,016)

(5)
1
(251)

(Millions of yen)
Fiscal year ended
March 31, 2023
Cash flows from financing activities
Proceeds from share issuance to non-controllingshareholders
Purchase of treasury shares of subsidiaries
Proceeds from sale of treasury shares
Dividends paid
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period*1- 17 -

Fiscal year ended
March 31, 2024

40

–

(5)
20
(2,908)(2,854)––(3,504)(3,504)

49

19

2,827
21,964
24,792

5,300
24,79230,092*1

(5) Notes to the consolidated financial statements(Notes on premise of going concern)
No items to report.
(Significant matters that serve as the basis for preparing consolidated financial statements)
1. Matters concerning scope of consolidation(1) Number of consolidated subsidiaries: 9 companies
Names of consolidated subsidiaries
ProVision Co., Ltd.
Tokyoto Business Service Co., Ltd.
GaYa Co., Ltd.
IDY Corporation
TBSOPERATION CO., LTD.
Systena America Inc.
Systena Vietnam Co., Ltd.
MINGAL inc.
and one other company
For the fiscal year under review, e-Pet S.S.Insurance, Inc. and ONE Tech Japan, Inc. have been
excluded from the scope of consolidation with the completion of liquidation.
(2) Names of unconsolidated subsidiaries
No items to report.
2. Matters concerning the application of the equity method(1) Number of associates accounted for by the equity method: 3 companies
HIS Holdings, Inc.
StrongKey, Inc.
ONE Tech, Inc.
(2) Names of significant associates not accounted for by the equity method
No items to report.
(3) Of the companies accounted for by the equity method, three companies (HIS Holdings, Inc.,
StrongKey, Inc. and ONE Tech, Inc.) have a different account closing date from the consolidated
account closing date. The fiscal year end for HIS Holdings, Inc. is August 31, and in preparing theconsolidated financial statements, the Company uses financial statements based on a provisional
settlement of accounts conducted as of February 29. Necessary adjustments are made forsignificant transactions that occurred between this date and the consolidated account closing date.
The fiscal year end for StrongKey, Inc. and ONE Tech, Inc. is June 30 and December 31,
respectively. In preparing the consolidated financial statements, the Company uses financial
statements based on a provisional settlement of accounts conducted on the consolidated accountclosing date.
(4) Treatment of amounts equivalent to goodwill
The amount of goodwill resulting from the application of the equity method for U.S. associates isamortized on a straight-line basis over a period not exceeding 10 years.
3. Matters concerning fiscal year, etc. of consolidated subsidiaries
The account closing date of consolidated subsidiaries is the same as the consolidated account closing
date.
4. Matters concerning accounting policies(1) Valuation standards and valuation methods for significant assets(i) Securities
Trading securities
Stated at fair value (The selling cost is calculated by the moving average method)
Available-for-sale securities
Securities other than stocks and other securities with no market priceStated at fair value (All valuation differences are processed by the direct net assets method, and- 18 -

selling cost is calculated by the moving average method)
Stocks and other securities with no market priceStated at cost determined by the moving average method
Investments in limited liability investment partnerships are accounted for based on the most recent
financial statements available according to the financial reporting date stipulated in the partnershipagreement, and the amount equivalent to the Company’s equity interest in the partnerships isincluded at the net amount.
(ii) Inventories
MerchandiseStated at cost determined by the moving average method (Calculated by writing down bookvalues based on decreased profitability)(2) Method of depreciation and amortization of significant depreciable assets(i) Property, plant and equipment (excluding leased assets)
Declining-balance method (However, the straight-line method is adopted for buildings (excluding
facilities attached to buildings) acquired on or after April 1, 1998, and facilities attached to buildings
and structures acquired on or after April 1, 2016)
The useful lives and residual values of assets are determined based on the standards stipulated in
the Corporation Tax Act. Assets with an acquisition cost of ¥100,000 or more but less than¥200,000 are amortized equally over three years.
(ii) Intangible assets (excluding leased assets)
Straight-line method
Software for internal use is amortized by the straight-line method over the estimated useful life (5years). Software intended for market sale is amortized by the larger of amortization based on theestimated sales revenue over the estimated sales period (within 3 years) or equal amortization over
the remaining salable period.
(iii) Long-term prepaid expenses
Amortized based on the straight-line method(3) Standards for recognition of significant allowances and provisions(i) Allowance for doubtful accounts
The estimated irrecoverable amount based on historical default rates for general receivables andindividual assessments of recoverability for doubtful and other specific receivables is posted toprovide for losses on default of receivables.
(ii) Provision for bonuses
To provide for payment of bonuses to employees, an amount is recorded based on the accrued
burden for the respective fiscal year in question that is the portion of the estimated amount ofbonuses to be paid.
(iii) Provision for share-based compensation
To provide for the future delivery of Company shares to Directors and Executive Officers inaccordance with the Company’s rules on share delivery, the estimated payment amount is recorded
based on the points allotted to Directors and Executive Officers as of the end of the fiscal year underreview.
(4) Standards for recognition of significant revenue and expenses
The following is a description of the major performance obligations related to revenue arising fromcontracts with customers of the Company and its consolidated subsidiaries in their major businesses,
and the normal point in time at which such performance obligations are satisfied (the normal point intime at which revenue is recognized).
(i) Software and system development, and IT services
In the Solution Design Business, Framework Design Business, Overseas Business, and Investment& Incubation Business, the Group mainly provides planning, design, development, and verification
support for software and system development.
In the IT Service Business, the Group mainly provides IT outsourcing services such as operation,
maintenance, and monitoring of systems and networks, as well as helpdesk services.
Contracts in this business involve transactions under contract or quasi-mandate contract, andperformance obligations are recognized as follows depending on the contract.

- 19 -

For transactions entered into under contract, the Company recognizes revenue based on the degreeof progress made in satisfying the performance obligation over a specified period of time.
For transactions under quasi-mandate contract, the Company recognizes revenue as a prorated
portion of the amount promised in the contract with the customer over the period the services areprovided, based on the judgment that the performance obligation is satisfied over time, since theCompany generally provides a certain level of services over the term of the contract.
The consideration for performance obligations is received primarily within one year after
performance obligations are satisfied, and does not include significant financial components.
(ii) Sales of merchandise
In the Business Solution Business, the Group mainly sells servers, computers, peripherals, software,and other IT-related products to enterprises. For these sales of merchandise, revenue is recognizedwhen the merchandise is delivered to the customer or at the time the customer completed inspection.
For sales of merchandise deemed as revenue for which the Company and its consolidated
subsidiaries are agent, revenue is recognized at the net amount received in exchange for goods
provided by the third party less the amount paid to said third party.
In addition, consideration for performance obligations is received primarily within one year after
performance obligations are satisfied, and does not include significant financial components.
(iii) License sales
In the Cloud Business, the Group mainly sells licenses for its in-house services, Canbus., Cloudstep,and Web Shelter, as well as for cloud-based services such as Google Workspace and Microsoft 365.
For sales of licenses for in-house services, the Company recognizes revenue over the license period
specified in the contract, based on the judgment that the performance obligation will be satisfied
over a certain period of time. For other license sales, revenue is recognized when the license is
granted to the customer.
The consideration for performance obligations is received primarily within one year after
performance obligations are satisfied, and does not include significant financial components.
(5) Standards for translating significant foreign currency denominated assets or liabilities into Japanesecurrency
Receivables and payables denominated in foreign currencies are converted into yen at the spot
exchange rate on the consolidated account closing date and translation differences are posted as profit
or loss. Note that the assets and liabilities of overseas subsidiaries, etc. are converted to yen at the spot
exchange rate on the day of the consolidated account closing, while related revenues and expenses areconverted to yen at the average rate during the period. These translation differences are posted as
foreign currency translation adjustments and non-controlling interests under net assets.
(6) Scope of funds in the consolidated statement of cash flows
Cash and cash equivalents comprise cash on hand and demand deposits, and short-term investmentswith a maturity of 3 months or less from the date of acquisition that are readily convertible to cash andthat are subject to an insignificant risk of changes in value.
(Significant accounting estimates)
Progress-based revenue recognition(1) Amounts recorded in the consolidated financial statements for the fiscal year under review(Millions of yen)Previous fiscal year
Net sales (Portion not completed)545

Fiscal year under review
507(2) Details regarding significant accounting estimates for the identified item(i) Calculation method
For performance obligations within software and system development and IT services to be satisfied
over a certain period of time, the Company estimates the degree of progress in satisfying theperformance obligation and recognizes revenue over a certain period of time based on this degree ofprogress in satisfying the performance obligation. The method of estimating the degree of progressin satisfying performance obligations is based on the ratio of the cost incurred (man-hours) to the- 20 -

total project cost (total man-hours) (input method).
(ii) Primary underlying assumptions
Recording sales revenue recognized in accordance with the measured degree of progress insatisfying a performance obligation affects the amount of revenue and profit or loss, depending on
the estimate of the total project cost (total man-hours). The total project cost (total man-hours) is
initially estimated in the working budget. When preparing a working budget, the total project cost(total man-hours) is estimated by setting assumptions for specifications and work content based on
information available at the time of preparation and by estimating in detail the cost (man-hours) ofeach process required to complete the development plan. After development has begun, the actual
cost incurred is managed for each project, and the total project cost (total man-hours) is reviewed ina timely and appropriate manner for changes in work content due to changes in circumstances,including additional development.
(iii) Impact on the consolidated financial statements for the following fiscal year
If the degree of work progress changes due to the occurrence of costs (man-hours) that were notforeseen in the assumptions used to estimate the total project cost, net sales and cost of sales maychange in the consolidated financial statements in the following fiscal year or later.
(Changes in accounting estimates)
Due to the decisions related to Nagoya Business Office, Nagoya Sales Office, and Sapporo Development
Center relocation during the fiscal year under review, the useful lives of non-current assets not expected to
be used after the relocation have been reduced.
Therefore, compared to the conventional method, the operating profit for the fiscal year under review
decreased by ¥13 million, while the ordinary profit and profit before income taxes decreased by ¥2
million.
(Additional information)
Stock compensation plan
The Company has introduced a stock compensation plan for the Company’s Directors (excluding
Outside Directors) and Executive Officers (hereinafter collectively referred to as “Directors, etc.”).
1. Outline of transactions
This is a stock compensation plan under which the Company’s shares, acquired by a trust using
money contributed by the Company, are delivered to Directors, etc. in accordance with the number ofpoints granted in accordance with rules on share delivery established by the Company.
2. Company shares remaining in trust
Company shares remaining in trust are recorded as treasury shares under net assets at the carrying
value in trust (excluding the amount of incidental expenses). The book value and number of thesetreasury shares amounted to ¥706 million and 1,567,700 shares at the end of the previous fiscal year,and ¥706 million and 1,567,700 shares at the end of the fiscal year under review.

- 21 -

(On the consolidated balance sheet)
1. Items pertaining to subsidiaries and associates are as follows.
Previous fiscal year
(March 31, 2023)(Millions of yen)
Fiscal year under review(March 31, 2024)

Investment securities
492
550(shares)
2. Overdraft agreement
The Company and its consolidated subsidiaries have overdraft agreements with six transacting
banks in order to raise working capital efficiently.
The unused portion of the lines of credit based on these agreements is as follows.
(Millions of yen)Previous fiscal year
Fiscal year under review(March 31, 2023)(March 31, 2024)
Maximum amount of
8,260
8,310
overdraft
Outstanding balance of
1,550
1,550
overdraft
Unused amount
6,710
6,760
(On the consolidated statements of income)
1. Revenue arising from contracts with customers
Net sales are not separately presented for revenue from contracts with customers and other revenue.
The amount of revenue from contracts with customers is presented in “Information on breakdown ofrevenue from contracts with customers” under the revenue recognition section of notes to theconsolidated financial statements.
2. Significant items and amounts of selling, general and administrative expenses are as follows.
(Millions of yen)Previous fiscal year
Fiscal year under review(From April 1, 2022 to (From April 1, 2023 toMarch 31, 2023)
March 31, 2024)
Payroll and allowances
2,775
2,864
Rent expenses
1,147
1,132
Provision for bonuses
158
249
Retirement benefit expenses
243
247
Provision for share-based
36
27
compensation
3. Research and development expenses included in general and administrative expenses(Millions of yen)Previous fiscal year
Fiscal year under review(From April 1, 2022 to March 31, 2023) (From April 1, 2023 to March 31, 2024)
51

11- 22 -

(On the consolidated statement of comprehensive income)
1. Reclassification adjustments and tax effects for other comprehensive income
Previous fiscal year
(From April 1, 2022 toMarch 31, 2023)
Unrealized gain and loss on availablefor-sale securities
Incurred during the period
Reclassification adjustments
Before tax effect adjustment
Tax effect amount
Unrealized gain and loss onavailable-for-sale securities
Foreign currency translation adjustment
Incurred during the period
Foreign currency translation
adjustment
Share of other comprehensive income ofentities accounted for using equity
methodIncurred during the period
Share of other comprehensive
income of entities accounted forusing equity method
Total other comprehensive income- 23 -(Millions of yen)
Fiscal year under review(From April 1, 2023 toMarch 31, 2024)

(64)
(31)
(95)
(29)

116
41
158
(48)

(66)

109

72
72

115
115

(16)
(16)

(26)
(26)

(11)

198

(On the consolidated statement of changes in equity)
Previous fiscal year (From April 1, 2022 to March 31, 2023)
1. Type and number of shares issued and treasury shares(Shares)Number of
Increase in
Decrease in
Number ofshares at theshares during the shares during the shares at the end
beginning of theperiodperiodof the period
periodIssued shares
Common shares

450,880,000––

450,880,000

Total

450,880,000––

450,880,000

63,483,788–

44,60063,439,188

Treasury shares
Common shares1, 2

Total
63,483,788–
44,60063,439,188(Notes) 1. The 44,600 common shares in treasury shares decreased in the period were deliveredfrom trust to eligible persons under the stock compensation plan for Directors and thestock compensation plan for Executive Officers.
2. The 63,439,188 common shares in treasury shares at the end of the period include
1,567,700 shares of the Company’s stock held by Custody Bank of Japan, Ltd. (Trust
Account) as trust assets for the Trust for Granting Shares to Directors and Executive
Officers and the Trust for Granting Shares to Executive Officers.
2. Matters concerning dividends(1) Dividends paid
Total dividend
Class of
Dividend per
Resolution
amount (Millions
Date of record
Effective datesharesshare (Yen)of yen)May 18, 2022
CommonBoard of Directors
1,361
3.5 March 31, 2022
June 9, 2022
sharesmeeting
October 27, 2022
September 30,
December 6,
Common1,556
4.0
Board of Directors
2022
2022
sharesmeeting(Notes) 1. The total dividend amount resolved by the Board of Directors meeting on May 18, 2022
includes ¥5 million in dividends paid to shares of the Company’s stock held by Custody
Bank of Japan, Ltd. (Trust Account) as trust assets for the Trust for Granting Shares to
Directors and Executive Officers and the Trust for Granting Shares to Executive Officers.
2. The total dividend amount resolved by the Board of Directors meeting on October 27, 2022
includes ¥6 million in dividends paid to shares of the Company’s stock held by Custody
Bank of Japan, Ltd. (Trust Account) as trust assets for the Trust for Granting Shares to
Directors and Executive Officers and the Trust for Granting Shares to Executive Officers.
(2) Dividends with a date of record during the fiscal year under review, but an effective date in thefollowing fiscal year
Resolution

Class ofsharesMay 18, 2023
Board of Directors

Commonmeeting(Note)

sharesTotal dividend
amount(Millions of
yen)
1,556

Source ofdividend
Retainedearnings

Dividend pershare (Yen)

4.0

Date of record

Effective date

March 31, 2023

June 7, 2023

The total dividend amount includes ¥6 million in dividends paid to shares of the Company’s
stock held by Custody Bank of Japan, Ltd. (Trust Account) as trust assets for the Trust for
Granting Shares to Directors and Executive Officers and the Trust for Granting Shares to
Executive Officers.

- 24 -

Fiscal year under review (From April 1, 2023 to March 31, 2024)
1. Type and number of shares issued and treasury shares(Shares)Number of
Increase in
Decrease in
Number ofshares at theshares during the shares during the shares at the end
beginning of theperiodperiodof the period
periodIssued shares
Common shares

450,880,000––

450,880,000

Total

450,880,000––

450,880,000

Common shares1, 2

63,439,188––

63,439,188

Total

63,439,188––

63,439,188

Treasury shares(Note)The 63,439,188 common shares in treasury shares at the end of the period include
1,567,700 shares of the Company’s stock held by Custody Bank of Japan, Ltd. (Trust
Account) as trust assets for the Trust for Granting Shares to Directors and Executive
Officers and the Trust for Granting Shares to Executive Officers.

2. Matters concerning dividends(1) Dividends paid
Resolution

Class ofsharesTotal dividend
Dividend peramount (Millions
share (Yen)of yen)Date of record

Effective date

May 18, 2023
Common1,556
4.0 March 31, 2023
June 7, 2023
Board of Directors
sharesmeeting
October 26, 2023
CommonSeptember 30,
December 5,
1,945
5.0
Board of Directors
shares2023
2023
meeting(Notes) 1. The total dividend amount resolved by the Board of Directors meeting on May 18, 2023
includes ¥6 million in dividends paid to shares of the Company’s stock held by Custody
Bank of Japan, Ltd. (Trust Account) as trust assets for the Trust for Granting Shares to
Directors and Executive Officers and the Trust for Granting Shares to Executive Officers.
2. The total dividend amount resolved by the Board of Directors meeting on October 26, 2023
includes ¥7 million in dividends paid to shares of the Company’s stock held by Custody
Bank of Japan, Ltd. (Trust Account) as trust assets for the Trust for Granting Shares to
Directors and Executive Officers and the Trust for Granting Shares to Executive Officers.
(2) Dividends with a date of record during the fiscal year under review, but an effective date in thefollowing fiscal year
Resolution

Class ofshares(May 17, 2024)
Board of Directors

Commonmeeting

sharesTotal dividend
amount(Millions of
yen)
1,945

Source ofdividend
Retainedearnings

Dividend pershare (Yen)

5.0

Date of record

Effective date

March 31, 2024

June 7, 2024

(Note) The total dividend amount includes ¥7 million in dividends paid to shares of the Company’s
stock held by Custody Bank of Japan, Ltd. (Trust Account) as trust assets for the Trust for
Granting Shares to Directors and Executive Officers and the Trust for Granting Shares to
Executive Officers.

- 25 -

(On the consolidated statement of cash flows)
1. Relationship between cash and cash equivalents at end of period and the amount of items shown on
the consolidated balance sheets(Millions of yen)Previous fiscal year
Fiscal year under review(From April 1, 2022 to (From April 1, 2023 toMarch 31, 2023)
March 31, 2024)
Cash and deposits accountTime deposits with maturities
longer than three months
Deposits paid accountCash and cash equivalents

25,03330,168

(481)

(537)

240
24,792462
30,092(Lease transactions)
Previous fiscal year (From April 1, 2022 to March 31, 2023)
Notes are omitted due to immateriality.
Fiscal year under review (From April 1, 2023 to March 31, 2024)
Notes are omitted due to immateriality.
(Financial instruments)
1. Matters concerning status of financial instruments(1) Policy for financial instrument transactions
The Group raises short-term working capital and capital for equipment, etc. as needed throughborrowings from banks. Derivative transactions are strictly managed in accordance with internalmanagement rules governing transactions, and the Company’s fundamental policy is not to engage
in high-risk speculative transactions.
(2) Nature and extent of risks arising from financial instruments and risk management
Notes and accounts receivable - trade, which are trade receivables, are exposed to credit risk from
customers. With respect to this risk, the Company conducts credit checks when beginningtransactions with customers, continuously monitors the collection status, and periodically reviews
credit limits in accordance with the Company’s credit management rules. Consolidated subsidiaries
conduct similar management as in the Company.
The Company periodically monitors the fair value of securities and investment securities as wellas financial condition of their issuers, etc., and continuously reviews its holdings in consideration ofmarket conditions and other factors.
Short-term borrowings and long-term borrowings are mainly used as funding for working capitaland capital investment. Although borrowings with floating interest rates are exposed to interest rate
fluctuation risk, the Company is able to respond flexibly to interest rate fluctuations by maintaining
short borrowing periods.
(3) Supplementary information on fair value, etc. of financial instruments
The fair value of financial instruments reflects variable factors, and is therefore subject to change
depending on different assumptions used.
2. Matters concerning fair value, etc. of financial instruments
The amounts recorded on the consolidated balance sheet, fair values, and the differences between them
are shown below.
Previous fiscal year (As of March 31, 2023)(Millions of yen)
Carrying value on the
consolidated balance
sheet

Fair value

Difference

Investment securities2

796

796

–

Total assets

796

796

–

- 26 -

Fiscal year under review (As of March 31, 2024)(Millions of yen)
Carrying value on the
consolidated balance
sheet

Fair value

Difference

Securities andinvestment securities2

762

762

–

Total assets

762

762

–

(Notes) 1. “Cash and deposits,” “Notes receivable - trade,” “Accounts receivable - trade,”“Accounts payable - trade,” “Short-term borrowings,” and “Accounts payable - other,and accrued expenses” are omitted as their fair values approximate their book values.
This is due to their nature as cash and as accounts settled over the short term.
2. Stocks and other securities with no market price are not included in “Securities andinvestment securities.” The carrying values of these financial instruments on the
consolidated balance sheet were as follows.
(Millions of yen)Classification

Previous fiscal year

Unlisted stocks, etc.

Fiscal year under review

500

558

3. Investments in partnerships and similar entities recorded at the net amount of equity
interest on the consolidated balance sheet are omitted. The amount of these investmentson the consolidated balance sheet is as follows.
(Millions of yen)Previous fiscal year
Investment securities

Fiscal year under review

840

953

4. Scheduled amount of redemption of monetary claims due after the consolidated accountclosing datePrevious fiscal year (As of March 31, 2023)(Millions of yen)
Over
1
year
but
Over
5
years
but
Within 1 year within 5 years within 10 years Over 10 years
Notes receivable 799
–
–
–
trade
Accounts receivable
13,600–––- tradeFiscal year under review (As of March 31, 2024)
Within 1 year
Notes receivable trade
Accounts receivable- trade(Millions of yen)Over 1 year but Over 5 years but Over 10 years
within 5 years within 10 years

783

–

–

–

13,576–––- 27 -

5. Scheduled amount of repayment of short-term borrowings and long-term borrowings
after the consolidated account closing datePrevious fiscal year (As of March 31, 2023)(Millions of yen)
Over
3
Over
4
Over
2
Over 1 year years but years but years but
Within 1 but
Over 5within 2 within 3
yearwithin4
within
5
years
years
years
years
years
Short-term
1,550
–
–
–
–
–
borrowings
Fiscal year under review (As of March 31, 2024)
Over 2
Over 1 year years
Within 1 but
within 2 withinbut
year
3
years
years
Short-termborrowings

1,550

–

Over 3
years butwithin 4
years–(Millions of yen)Over 4
years but
Over 5within 5
years
years

–

–

–

3. Matters concerning breakdown per level of fair value, etc. of financial instruments
The fair value of financial instruments is classified into the following three levels based on theobservability and materiality of the inputs used to calculate fair value.
Level 1 fair value: Fair value calculated with observable inputs which are quoted prices for
identical assets or liabilities for calculation of fair value in active markets.
Level 2 fair value: Fair value calculated with observable inputs other than in Level 1.
Level 3 fair value: Fair value calculated using unobservable inputs.
When multiple inputs that have a significant impact on the calculation of fair value are used, fair value
is assigned to the level with the lowest applicable priority among the relevant levels.
(1) Financial instruments recorded on the consolidated balance sheet at fair value
Previous fiscal year (As of March 31, 2023)(Millions of yen)Classification

Fair value
Level 1

Level 2

Level 3

Total

Investment
securities
Stocks

208

–

–

208

Other

587

–

–

587

796

–

–

796

Total assets

Fiscal year under review (As of March 31, 2024)(Millions of yen)Classification

Fair value
Level 1

Level 2

Level 3

Total

Securities andinvestment
securities
Stocks

452

–

–

452

Other

309

–

–

309

Total assets

762

–

–

762

- 28 -

(2) Financial instruments other than those recorded on the consolidated balance sheet at fair value
Previous fiscal year (As of March 31, 2023)
No items to report.
Fiscal year under review (As of March 31, 2024)
No items to report.
(Securities)
Previous fiscal year (As of March 31, 2023)
1. Available-for-sale securities

StocksCarrying valueon theconsolidatedbalance sheet
–

Other

Type
Securities whosecarrying values on the
consolidated balance
sheet exceed
acquisition cost
Securities whosecarrying values on the
consolidated balance
sheet do not exceed
acquisition cost
Total

(Millions of yen)
Acquisition cost

Difference
–

–

–

–

–

Stocks

208

315

(106)

Other

587

647

(60)

796

963

(167)

(Note) Unlisted stocks, etc. (carrying value of ¥7 million on the consolidated balance sheet) are notincluded in “Available-for-sale securities” above because they are stocks, etc. without market
prices.
2. Available-for-sale securities sold during the fiscal year under review (From April 1, 2022 to March
31, 2023)(Millions of yen)Type

Amount of sales

Total gain on sale

Total loss on sale

Stocks

4,613

91

141

Other

14,687246

165

19,300

338

307

Total

Fiscal year under review (As of March 31, 2024)
1. Trading securities
Classification(Millions of yen)
Fiscal year under review

Valuation differences included in the profit (loss)
for the fiscal year under review- 29 -(14)

2. Available-for-sale securities

StocksCarrying valueon theconsolidatedbalance sheet
5

Other

Type
Securities whosecarrying values on the
consolidated balance
sheet exceed
acquisition cost
Securities whosecarrying values on the
consolidated balance
sheet do not exceed
acquisition cost
Total

(Millions of yen)
Acquisition cost

Difference
5

0

–

–

–

Stocks

28

31

(2)

Other

–

–

–

34

36

(1)

(Note) Unlisted stocks, etc. (carrying value of ¥7 million on the consolidated balance sheet) are notincluded in “Available-for-sale securities” above because they are stocks, etc. without market
prices.
3. Available-for-sale securities sold during the fiscal year under review (From April 1, 2023 to March
31, 2024)(Millions of yen)Type

Amount of sales

Total gain on sale

Total loss on sale

Stocks

5,501

166

22

Other

5,729

43

229

11,231

210

251

Total

(Retirement benefits)
Previous fiscal year (From April 1, 2022 to March 31, 2023)
1. Outline of retirement benefit plans adopted
The Company and some of its consolidated subsidiaries have both a defined contribution pension
plan and a prepaid retirement benefit plan.
2. Matters on retirement benefit obligations
Due to adoption of a defined contribution pension plan, there are no retirement benefit obligations.
3. Matters on retirement benefit expenses(1) Contributions to defined contribution pension plan(2) Prepaid retirement benefits
Retirement benefit expenses(Millions of yen)
269
1,254
1,524

Fiscal year under review (From April 1, 2023 to March 31, 2024)
1. Outline of retirement benefit plans adopted
The Company and some of its consolidated subsidiaries have both a defined contribution pension
plan and a prepaid retirement benefit plan.
2. Matters on retirement benefit obligations
Due to adoption of a defined contribution pension plan, there are no retirement benefit obligations.

- 30 -

3. Matters on retirement benefit expenses(1) Contributions to defined contribution pension plan(2) Prepaid retirement benefits(Millions of yen)
266
1,352

Retirement benefit expenses

1,618(Tax effect accounting)
1. Deferred tax assets and deferred tax liabilities by major classification

Deferred tax assets
Accrued enterprise tax
Accrued business office tax
Provision for bonuses
Provision for share-based compensation
Loss on valuation of membership
Unrealized profit
Loss carried forward
Unrealized gain and loss on available-forsale securities
Allowance for doubtful accounts
Other
Subtotal of deferred tax assets
Valuation allowance
Total deferred tax assets
Deferred tax liabilities
Unrealized gain and loss on available-forsale securities
Total deferred tax liabilities
Net deferred tax assets

Previous fiscal year
(March 31, 2023)(Millions of yen)
Fiscal year underreview(March 31, 2024)

127
19
457
34
24
10
362

124
20
581
43
24
8
323

40

–

287
46
1,410
(505)
905

278
43
1,448
(466)
982

–

(7)

–
905

(7)
974

2. Major components of significant differences arising between the effective statutory tax rate andeffective income tax rate after application of tax effect accounting
Previous fiscal year
Fiscal year under review(March 31, 2023)(March 31, 2024)
Effective statutory tax rate
30.6%
30.6%
(Adjustments)
Share of loss of entities accounted for using(0.1%)(0.2%)
equity method
0.4%
0.5%
Inhabitant tax on per capita basis
Change in valuation allowance(0.2%)(0.1%)Tax credits for wage increases(4.9%)(4.3%)
0.4%
0.5%
Other
Effective income tax rate after application of
26.2%
27.1%
tax effect accounting- 31 -

(Revenue recognition)
1. Information on breakdown of revenue from contracts with customers
Previous fiscal year (From April 1, 2022 to March 31, 2023)(Millions of yen)
Reportable segment
Solution
DesignBusiness

Goods or services
transferred over a
period of time
Goods or services
transferred at asingle point in time
Revenue arisingfrom contracts withcustomers
Net sales toexternal customers

Framework
IT Service
DesignBusiness
Business

Business
Solution
Business

Cloud
Business

Overseas
Business

Investment&
Incubation
Business

Total

22,3006,095

17,357

702

534

71

282

47,345–––25,773

1,407

–

–

27,18022,3006,095

17,357

26,475

1,942

71

282

74,52622,3006,095

17,357

26,475

1,942

71

282

74,526

Fiscal year under review (From April 1, 2023 to March 31, 2024)(Millions of yen)
Reportable segment
Solution
DesignBusiness

Framework
IT Service
DesignBusiness
Business

Business
Solution
Business

Cloud
Business

Overseas
Business

Investment&
Incubation
Business

Total

Goods or services
21,246
6,901
18,079
791
501
65
164
47,749transferred over a
period of time
Goods or services–––
27,613
1,577––
29,190transferred at asingle point in time
Revenue arisingfrom contracts with
21,246
6,901
18,07928,4042,078
65
164
76,940
customers
Net sales to21,246
6,901
18,07928,4042,078
65
164
76,940external customers
2. Fundamental explanation of revenue arising from contracts with customers
The fundamental explanation for revenue is as described in “(Significant matters that serve as the basis for
preparing consolidated financial statements) 4. Matters concerning accounting policies (4) Standards forrecognition of significant revenue and expenses”
3. Information about the relationship between the satisfaction of performance obligations under contracts withcustomers and cash flows from these contracts, and the amount and timing of revenue expected to berecognized in subsequent fiscal years from contracts with customers that exist at the end of the fiscal year
under review.
(1) Balance of contract assets and contract liabilities, etc.
Previous fiscal year

(Millions of yen)
Fiscal year underreview

Contract assets (Balance at beginning of
period)695

599

Contract assets (Balance at end of period)

599

557

Contract liabilities (Balance at beginning of
period)81

83

Contract liabilities (Balance at end of period)

83

59- 32 -

Contract assets relate to the rights of the Company and its consolidated subsidiaries to consideration not
yet billed, though their contractual performance obligations have been satisfied as of the end of the
fiscal year. Contract assets are reclassified to receivables arising from contracts with customers when
the Company and its consolidated subsidiaries’ rights to the consideration are unconditional.
Contract liabilities mainly relate to advance payments for customer order-based contracts andsuspense payments for ongoing orders. Contract liabilities are reversed upon recognition of revenue.
(2) Transaction price allocated to remaining performance obligations
The Company and its consolidated subsidiaries apply the practical expedient method in the notes totransaction prices allocated to remaining performance obligations. Contracts with an initial expected
contract term of one year or less are not included in these notes.
(Segment information, etc.)
Segment information
1. Overview of reportable segments
The Company’s reportable segments are those components of the Group for which separate
financial information is available and are subject to periodic review by the Board of Directors todetermine the allocation of management resources and evaluate their performance.
The Group has established business divisions by product and service. These divisions formulatecomprehensive strategies for their respective products and services and carry out business activities.
Therefore, the Group consists of segments that are separated by products and services based on
business divisions, and the business activities of each are as follows.
Business segment

Businesses

Planning, design, development, and verification support forautonomous driving and in-vehicle systems, various products, andSolution Design
telecommunications carrier services. Planning, design, development,
and verification support for Internet businesses, business applications,
Business
web services, social infrastructure-related systems, IoT, artificial
intelligence, and robotics-related services.
Development of core systems in the areas of finance (non-life
Framework Design
insurance, life insurance, and banking), industry, public sector, andBusinessothers. Development of infrastructure systems.
Provision of IT outsourcing services such as PMO services, theoperation, maintenance, and monitoring of systems and networks,
helpdesk services and user support, development support and quality
IT Service Businessevaluation related to mobile device apps and Internet contents, data
entry, and high-volume output.
Sale of servers, computers, peripherals, software, and other IT-related
products to enterprises. Provision of services related to IT equipment,
Business Solution
including building infrastructure and virtualization. Planning,
Businessdevelopment, and provision of product implementation services suchas RPA and business intelligence (BI) tools.
Provision of in-house services Canbus., Canbus.IoT, Cloudstep, and
Web Shelter. Provision and implementation support of cloud-based
Cloud Businessservices such as Google Workspace and Microsoft 365.
Provision of mobile communications-related technical support,
development and verification support, and various solutions; trend
Overseas Businessresearch and commercialization of the latest technologies and services.
Investment & Incubation New businesses, and planning, development, and sale of game content
for smartphones and tablets by subsidiaries.
Business
2. Calculation method of net sales, profit or loss, assets, and other items by reportable segment
Accounting methods for reported business segments are the same as those described in “Significant
matters that serve as the basis for preparing consolidated financial statements.”
Profit by reportable segment is based on operating profit.
Inter-segment net sales and transfers are based on prevailing market prices.

- 33 -

3. Information on net sales, profit or loss, assets, and other items by reportable segment
I. Previous fiscal year (From April 1, 2022 to March 31, 2023)(Millions of yen)
Reportable segment
Investment Adjustment&
2, 3Incubation
Business

Solution Framework
IT Service
DesignDesignBusiness
Business BusinessBusiness
Solution
Business

Cloud
Business

Overseas
Business

22,3006,095

17,357

26,475

1,942

71

282

–

74,526

74

–

396

34

65

62

27

(660)

–

Total

22,375

6,095

17,753

26,510

2,007

134

309

(660)

74,526

Segment profit(loss)

3,926

1,279

2,521

1,760

386

(29)

(0)

–

9,844

Segment assets

5,799

908

6,149

7,977

257

677

293

26,81548,879

229

38

161

39

7

1

0

–

478

187

16

200

105

1

–

–

555

1,067

387

–

–

–

–

105

–

–

492

Total1

Net sales
Net sales toexternalcustomers
Intersegment net
sales andtransfers

Other items
Depreciation
Increase inproperty,plant andequipment
andintangible
assetsInvestmentsin equity
methodassociates(Notes) 1.

Segment profit (loss) is consistent with operating profit in the consolidated statement ofincome.
2. The ¥26,815 million adjustment to segment assets consists wholly of corporate assets that do
not belong to any reportable segment, and is mainly cash and deposits and investment
securities. Depreciation of property, plant and equipment and intangible assets included incorporate assets is allocated to reportable segments.
3. The adjustment of ¥555 million for increase in property, plant and equipment and intangible
assets under other items is mainly capital investment to enlarge Company floor space.

- 34 -

II. Fiscal year under review (From April 1, 2023 to March 31, 2024)(Millions of yen)

Reportable segment
Investment Adjustment&
2, 3Incubation
Business

Solution Framework
IT Service
DesignDesignBusiness
Business BusinessBusiness
Solution
Business

Cloud
Business

Overseas
Business

21,246

6,901

18,07928,404

2,078

65

164

–

76,940

20

–

217

30

40

64

23

(396)

–

Total

21,267

6,901

18,29728,434

2,119

129

187

(396)

76,940

Segment profit(loss)

2,717

1,642

2,922

2,054

372

(27)

33

–

9,713

Segment assets

5,287

817

6,753

8,195

272

786

227

31,69954,038

280

40

182

63

8

1

–

–

576

93

18

81

49

4

0

–

44

291

410

–

–

–

–

140

–

–

550

Net sales
Net sales toexternalcustomers
Intersegment net
sales andtransfers

Total1Other items
Depreciation
Increase inproperty,plant andequipment
andintangible
assetsInvestmentsin equity
methodassociates(Notes) 1.

Segment profit (loss) is consistent with operating profit in the consolidated statement ofincome.
2. The ¥31,699 million adjustment to segment assets consists wholly of corporate assets that do
not belong to any reportable segment, and is mainly cash and deposits and investment
securities. Depreciation of property, plant and equipment and intangible assets included incorporate assets is allocated to reportable segments.
3. The adjustment of ¥44 million for increase in property, plant and equipment and intangible
assets under other items is mainly capital investment for corporate site renewal.

Related information
Previous fiscal year (From April 1, 2022 to March 31, 2023)
1. Information by product and service
This information is omitted because the same information is disclosed as segment information.
2. Information by geographic area
(1) Net sales
This information is omitted because net sales to external customers in Japan are in excess of
90% of net sales on the consolidated statement of income.
(2) Property, plant and equipment
This information is omitted because the amount of property, plant and equipment located in- 35 -

Japan exceeds 90% of the amount of property, plant and equipment on the consolidatedbalance sheet.
3. Information by major customer
This information is omitted because there are no customers that account for 10% or more of net
sales on the consolidated statement of income.
Fiscal year under review (From April 1, 2023 to March 31, 2024)
1. Information by product and service
This information is omitted because the same information is disclosed as segment information.
2. Information by geographic area
(1) Net sales
This information is omitted because net sales to external customers in Japan are in excess of
90% of net sales on the consolidated statement of income.
(2) Property, plant and equipment
This information is omitted because the amount of property, plant and equipment located inJapan exceeds 90% of the amount of property, plant and equipment on the consolidatedbalance sheet.
3. Information by major customer
This information is omitted because there are no customers that account for 10% or more of net
sales on the consolidated statement of income.
Information about impairment loss on non-current assets by reportable segment
Previous fiscal year (From April 1, 2022 to March 31, 2023)
No items to report.
Fiscal year under review (From April 1, 2023 to March 31, 2024)
No items to report.
Information about amortization and unamortized balance of goodwill by reportable segment
Previous fiscal year (From April 1, 2022 to March 31, 2023)
No items to report.
Fiscal year under review (From April 1, 2023 to March 31, 2024)
No items to report.
Information about gain on bargain purchase by reportable segment
Previous fiscal year (From April 1, 2022 to March 31, 2023)
No items to report.
Fiscal year under review (From April 1, 2023 to March 31, 2024)
No items to report.
(Information on related parties)
Previous fiscal year (From April 1, 2022 to March 31, 2023)
1. Transactions with related parties
No items to report.
2. Notes on parent company and significant associates
No items to report.
Fiscal year under review (From April 1, 2023 to March 31, 2024)
1. Transactions with related parties
No items to report.

- 36 -

2. Notes on parent company and significant associates
No items to report.
(Per share information)(Yen)
Previous fiscal year
(From April 1, 2022 to March 31,
2023)

Fiscal year under review(From April 1, 2023 to March 31,
2024)

Net assets per share
88.19
98.34
Basic earnings per share
18.89
18.67
(Notes) 1. Diluted earnings per share is not shown in the above table, as there are no residual shareswith dilutive effects.
2. The basis for calculation of basic earnings per share is as follows.
Previous fiscal year
(From April 1, 2022 toMarch 31, 2023)

Fiscal year under review(From April 1, 2023 toMarch 31, 2024)

Basic earnings per share
Profit attributable to owners ofparent7,317
7,232(Millions of yen)Amount not attributable to common––shareholders (Millions of yen)
Profit attributable to owners ofparent available to common shares
7,317
7,232
(Millions of yen)
Average number of shares during the387,422,095
387,440,812
period (Shares)
3. The Company has introduced a stock compensation plan, and in calculating the average
number of common treasury shares during the period, the number of treasury shares
includes shares of the Company held by Custody Bank of Japan, Ltd. (Trust Account) as
trust assets for the Trust for Granting Shares to Directors and Executive Officers and theTrust for Granting Shares to Executive Officers.
The number of treasury shares held by the trust account included in the number of treasury
shares at the end of the fiscal year under review and previous fiscal year was 1,567,700
shares. The average number of treasury shares held by the trust account excluded from thecalculation of the average number of shares during the fiscal year under review andprevious fiscal year were 1,567,700 shares and 1,586,417 shares, respectively.
(Significant subsequent events)
Acquisition of treasury shares
During the Board of Directors meeting held on May 13, 2024, the Company made the following
resolution regarding the acquisition of treasury shares pursuant to Article 459, Paragraph 1 of theCompanies Act and Article 37 of the Company’s Articles of Incorporation.
(1) Reason for acquiring treasury shares
Return more profits to shareholders and enable the implementation of a flexible capital policy inresponse to business environment changes.
(2) Details of matters related to acquisition(i) Class of shares to be acquired(ii) Total number of shares to be acquired

Common shares
25,000,000 shares (maximum)(6.4% of total number of issued shares (excluding
treasury shares))(iii) Total amount of share acquisition costs ¥10.0 billion (maximum)- 37 -

(iv) Acquisition period(v) Acquisition method

May 14, 2024 to May 13, 2025
Market purchases on the Tokyo Stock Exchange(discretionary trade by a securities company)- 38 -

5. Non-consolidated financial statements(1) Non-consolidated balance sheet(Millions of yen)
As of March 31, 2023
AssetsCurrent assets
Cash and deposits
Notes receivable - trade
Accounts receivable - trade
Contract assets
Securities
MerchandiseWork in process
Advance payments to suppliers
Prepaid expenses
Short-term loans receivable
Short-term loans receivable from subsidiaries andassociates
Other
Total current assets
Non-current assets
Property, plant and equipment
Buildings
Accumulated depreciation
Buildings, net
Structures
Accumulated depreciation
Structures, net
VehiclesAccumulated depreciation
Vehicles, net
Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net
Land
Total property, plant and equipment
Intangible assets
Software
Software in progress
Other
Total intangible assets- 39 -

As of March 31, 2024

21,361798
12,619
572
–
1,438
–
1
321
0

25,863783
12,576
512
727
1,133
4
0
355
0

0

–

281
37,396529
42,489

872
(326)
545
0
(0)
0
60
(27)
33
1,884
(1,314)
569
92
1,240

896
(386)
510
0
(0)
0
55
(33)
22
1,877
(1,480)
397
92
1,021

256
4
1
262

219
–
1
220

(Millions of yen)
As of March 31, 2023
Investments and other assets
Investment securities
Shares of subsidiaries and associates
Investments in capital
Long-term prepaid expenses
Long-term loans receivable
Long-term loans receivable from subsidiaries andassociates
Leasehold and guarantee deposits
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Accounts payable - trade
Short-term borrowings
Accounts payable - other
Income taxes payable
Accrued consumption taxes
Accrued expenses
Advances received
Deposits received
Provision for bonuses
Other
Total current liabilities
Non-current liabilities
Long-term lease and guarantee deposited
Provision for share-based payments
Total non-current liabilities
Total liabilities

*1

1,535
1,429
0
2
0

856
1,394
0
96
1

432

370

1,323
766
0
(259)
5,231
6,733
44,130

1,380
839
0
(228)
4,708
5,951
48,440

5,974
1,550
1,824
1,326
619
32
52
80
1,169
15
12,6449
114
123
12,768- 40 -

As of March 31, 2024

*1

6,263
1,550
1,869
1,495
759
47
39
198
1,568
24
13,8159141
150
13,965

(Millions of yen)
As of March 31, 2023
Net assets
Shareholders’ equity
Share capital
Capital surplus
Legal capital surplus
Other capital surplus
Total capital surplus
Retained earnings
Other retained earnings
General reserve
Retained earnings brought forward
Total retained earnings
Treasury shares
Total shareholders’ equity
Valuation and translation adjustments
Valuation difference on available-for-sale securities
Total valuation and translation adjustments
Total net assets
Total liabilities and net assets- 41 -

As of March 31, 2024

1,513

1,513

1,428
4,623
6,051

1,428
4,623
6,051

0
28,91028,910(5,022)
31,4540
31,913
31,913(5,022)
34,456(91)(91)
31,362
44,13017
1734,474
48,440(2) Non-consolidated statement of income(Millions of yen)
Fiscal year ended
March 31, 2023
Net sales
Service sales
Net sales of goods
Total net sales
Cost of sales
Cost of service sales
Cost of goods soldBeginning merchandise inventory
Cost of purchased goods
Total
Ending merchandise inventory
Cost of goods soldTotal cost of sales
Gross profit
Selling, general and administrative expenses
Remuneration for directors (and other officers)
Payroll and allowances
Provision for share-based payments
Retirement benefit expenses
Bonuses
Provision for bonuses
Legal welfare expenses
Travel and transportation expenses
Recruiting expenses
Advertising expenses
Supplies expenses
Taxes and dues
Commission expenses
Rent expenses
Depreciation
Research and development expenses
Provision of allowance for doubtful accounts
Other
Total selling, general and administrative expenses
Operating profit- 42 -

Fiscal year ended
March 31, 2024

38,51827,33665,85538,75828,84567,603

26,84427,745

1,104
23,45024,554
1,438
23,11549,95915,895

1,438
24,132
25,571
1,133
24,43752,183
15,420

323
2,158
36
196
56
124
389
107
150
266
35
399
870
1,057
361
22
(9)
413
6,959
8,936

314
2,243
27
203
59
219
401
125
167
106
19
419
450
1,012
441
–
0
483
6,694
8,725

(Millions of yen)
Fiscal year ended
March 31, 2023
Non-operating income
Interest income
Dividend income
Gain on sale of securities
Gain on sale of investment securities
Gain on investments in investment partnerships
Compensation income for damage
Reversal of allowance for doubtful accounts
Other
Total non-operating income
Non-operating expenses
Interest expenses
Loss on valuation of securities
Loss on sale of investment securities
Loss on investments in investment partnerships
Provision of allowance for doubtful accounts
Consumption tax difference
Office relocation expenses
Other
Total non-operating expenses
Ordinary profit
Extraordinary losses
Loss on liquidation of subsidiaries and associates
Total extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
Profit*1*1- 43 -

Fiscal year ended
March 31, 2024

4
13
–
31
–
16
–
31
96

*1

2
19
86
–
51
–
30
39
230

7
–
–
16
4
8
11
6
53
8,979

7
14
41
–
–
4
–
0
68
8,887

–
–
8,979
2,361
(23)
2,337
6,641

9
9
8,877
2,494
(120)
2,373
6,503

(3) Non-consolidated statement of changes in equity
Fiscal year ended March 31, 2023
(Millions of yen)
Shareholders’ equity
Capital surplus

Retained earnings
Other retained earnings

Share capital

Legal capitalsurplus

OthercapitalsurplusTotal
capitalsurplus

1,428

4,623

6,051

Total
retainedearnings

TreasurysharesTotalshareholders’equity(5,042)

27,709Generalreserve

Retainedearnings
brought
forward025,18625,186

Dividends of surplus(2,917)(2,917)(2,917)

Profit

6,641

6,641

6,641

Balance at beginning of period

1,513

Changes during period

Disposal of treasury shares

20

20

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

–

–

–

–

–

3,724

3,724

20

3,744

1,513

1,428

4,623

6,051

0

28,91028,910(5,022)

31,454

Valuation and translation
adjustments
Valuation
Total
difference valuationonandavailable- translation
for-saleadjustsecurities
ments
Balance at beginning of period

(25)

(25)

Total net
assets27,684

Changes during period
Dividends of surplus(2,917)

Profit6,641

Disposal of treasury shares
Net changes in items other thanshareholders’ equity

20
(66)

(66)

(66)

Total changes during period

(66)

(66)

3,678

Balance at end of period

(91)

(91)

31,362- 44 -

Fiscal year ended March 31, 2024
(Millions of yen)
Shareholders’ equity
Capital surplus

Retained earnings
Other retained earnings

Share capital

Legal capitalsurplus

OthercapitalsurplusTotal
capitalsurplus

1,428

4,623

6,051

Total
retainedearnings

TreasurysharesTotalshareholders’equity(5,022)

31,454Generalreserve

Retainedearnings
brought
forward0

28,91028,910

Dividends of surplus(3,501)(3,501)(3,501)

Profit

6,503

6,503

6,503

Balance at beginning of period

1,513

Changes during period

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

–

–

–

–

–

3,002

3,002

–

3,002

1,513

1,428

4,623

6,051

0

31,913

31,913(5,022)

34,456

Valuation and translation
adjustments
Valuation
Total
difference valuationonandavailable- translation
for-saleadjustsecurities
ments
Balance at beginning of period

(91)

(91)

Total net
assets31,362

Changes during period
Dividends of surplus(3,501)

Profit6,503

Net changes in items other thanshareholders’ equity

109

109

109

Total changes during period

109

109

3,112

Balance at end of period

17

17

34,474- 45 -

(4) Notes to the non-consolidated financial statements(Notes on premise of going concern)
No items to report.
(Significant accounting policies)
1. Valuation standards and valuation methods for securities(1) Trading securities
Stated at fair value (The selling cost is calculated by the moving average method)(2) Shares of subsidiaries and associates
Stated at cost determined by the moving average method(3) Available-for-sale securities
Securities other than stocks and other securities with no market priceStated at fair value (All valuation differences are processed by the direct net assets method,and selling cost is calculated by the moving average method)
Stocks and other securities with no market priceStated at cost determined by the moving average method
Investments in limited liability investment partnerships are accounted for based on the most recent
financial statements available according to the financial reporting date stipulated in the partnershipagreement, and the amount equivalent to the Company’s equity interest in the partnerships isincluded at the net amount.
2. Valuation standards and methods for inventories
MerchandiseStated at cost determined by the moving average method (Writing down book values based on
decreased profitability)
3. Method of depreciation of non-current assets(1) Property, plant and equipment (excluding leased assets)
Declining-balance method (However, the straight-line method is adopted for buildings (excluding
facilities attached to buildings) acquired on or after April 1, 1998, and facilities attached tobuildings and structures acquired on or after April 1, 2016)
The useful lives and residual values of assets are determined based on the standards stipulated in
the Corporation Tax Act.
Assets with an acquisition cost of ¥100,000 or more but less than ¥200,000 are amortized equally
over three years.
(2) Intangible assets (excluding leased assets)
Straight-line method
Software for internal use is amortized using the straight-line method over the estimated internal
useful life (5 years).
(3) Long-term prepaid expenses
Amortized based on the straight-line method
4. Standards for recognition of allowances and provisions(1) Allowance for doubtful accounts
The estimated irrecoverable amount based on historical default rates for general receivables andindividual assessments of recoverability for doubtful and other specific receivables is posted toprovide for losses on default of receivables.
(2) Provision for bonuses
To provide for the payment of bonuses to employees, the amount accrued for the fiscal year underreview is recorded based on the estimated amount of bonus payments.
(3) Provision for share-based compensation
To provide for the future delivery of Company shares to Directors and Executive Officers inaccordance with the Company’s rules on share delivery, the estimated payment amount is- 46 -

recorded based on the points allotted to Directors and Executive Officers as of the end of the fiscal
year under review.
5. Standards for recognition of revenue and expenses
The following is a description of the major performance obligations related to revenue arising fromcontracts with the customers in the Company’s major businesses, and the normal point in time atwhich such performance obligations are satisfied (the normal point in time at which revenue isrecognized).
(1)Software and system development, and IT services
In the Solution Design Business and Framework Design Business, the Group mainly provides
planning, design, development, and verification support for software and system development.
In the IT Service Business, the Group mainly provides IT outsourcing services such as
operation, maintenance, and monitoring of systems and networks, as well as helpdesk services.
Contracts in this business involve transactions under contract or quasi-mandate contract, andperformance obligations are recognized as follows depending on the contract.
For transactions entered into under contract, the Company recognizes revenue based on the
degree of progress made in satisfying the performance obligation over a specified period of time.
For transactions under quasi-mandate contract, the Company recognizes revenue as a prorated
portion of the amount promised in the contract with the customer over the period the services areprovided, based on the judgment that the performance obligation is satisfied over time, since theCompany generally provides a certain level of services over the term of the contract.
The consideration for performance obligations is received primarily within one year after
performance obligations are satisfied, and does not include significant financial components.
(2) Sales of merchandise
In the Business Solution Business, the Group mainly sells servers, computers, peripherals,
software, and other IT-related products to enterprises. For these sales of merchandise, revenue isrecognized when the merchandise is delivered to the customer or at the time the customer
completed inspection.
For sales of merchandise deemed as revenue for which the Company is an agent, revenue isrecognized at the net amount received in exchange for goods provided by the third party less theamount paid to said third party.
In addition, consideration for performance obligations is received primarily within one year
after performance obligations are satisfied, and does not include significant financial components.
(3) License sales
In the Cloud Business, the Group mainly sells licenses for its in-house services, Canbus.,
Cloudstep, and Web Shelter, as well as for cloud-based services such as Google Workspace andMicrosoft 365. For sales of licenses for in-house services, the Company recognizes revenue overthe license period specified in the contract, based on the judgment that the performance obligation
will be satisfied over a certain period of time. For other license sales, revenue is recognized when
the license is granted to the customer.
The consideration for performance obligations is received primarily within one year after
performance obligations are satisfied, and does not include significant financial components.
6. Standards for translating significant foreign currency denominated assets or liabilities into Japanesecurrency
Receivables and payables denominated in foreign currencies are converted into yen at the spot
exchange rate at the end of the fiscal year and translation differences are posted as profit or loss.

- 47 -

(Significant accounting estimates)
Progress-based revenue recognition(1) Amounts recorded in the non-consolidated financial statements for the fiscal year under review(Millions of yen)

Net sales (Portion notcompleted)

Previous fiscal year

Fiscal year under review

520

466

(2) Details regarding significant accounting estimates for the identified item
The method of calculating the amounts in (1) is the same as that described in under “(2) Details
regarding significant accounting estimates for the identified item” in the progress-based revenue
recognition section of notes (significant accounting estimates) to the consolidated financial
statements.
(Changes in accounting estimates)
Due to the decisions related to Nagoya Business Office, Nagoya Sales Office, and Sapporo Development
Center relocation during the fiscal year under review, the useful lives of non-current assets not expected
to be used after the relocation have been reduced.
Therefore, compared to the conventional method, the operating profit for the fiscal year under review
decreased by ¥13 million, while the ordinary profit and profit before income taxes decreased by ¥2
million.
(Additional information)
Stock compensation plan
The Company has introduced a stock compensation plan for the Company’s Directors (excluding
Outside Directors) and Executive Officers (hereinafter collectively referred to as “Directors, etc.”).
1. Outline of transactions
This is a stock compensation plan under which the Company’s shares, acquired by a trust using
money contributed by the Company, are delivered to Directors, etc. in accordance with the number ofpoints granted in accordance with rules on share delivery established by the Company.
2. Company shares remaining in trust
Company shares remaining in trust are recorded as treasury shares under net assets at the carrying
value in trust (excluding the amount of incidental expenses). The book value and number of thesetreasury shares amounted to ¥706 million and 1,567,700 shares at the end of the previous fiscal year,and ¥706 million and 1,567,700 shares at the end of the fiscal year under review.
(On the non-consolidated balance sheet)
1. Overdraft agreements
The Company has overdraft agreements with six transacting banks in order to raise working capitalefficiently.
The unused portion of the lines of credit based on these agreements is as follows.
(Millions of yen)Previous fiscal year
(March 31, 2023)

Fiscal year under review(March 31, 2024)

8,100

8,100

1,550

1,550

6,550

6,550

Maximum amount of
overdraft
Outstanding balance of
overdraft
Unused amount- 48 -

(On the non-consolidated statements of income)1. The following items related to transactions with subsidiaries and associates are included.
(Millions of yen)Previous fiscal year
Fiscal year under review(From April 1, 2022 to (From April 1, 2023 toMarch 31, 2023)
March 31, 2024)
Provision of allowance for4–
doubtful accounts
Reversal of allowance for–30
doubtful accounts
The total amount of non-operating income for subsidiaries and associates was ¥12 million for theprevious fiscal year, exceeding 10% of the total amount of non-operating income.
(Securities)
Previous fiscal year (From April 1, 2022 to March 31, 2023)
Shares of subsidiaries and associates (carrying value of ¥1,323 million and ¥105 million on the nonconsolidated balance sheet, respectively) are stocks, etc. with no market prices. Accordingly, they areomitted.
Fiscal year under review (From April 1, 2023 to March 31, 2024)
Shares of subsidiaries and associates (carrying value of ¥1,288 million and ¥105 million on the nonconsolidated balance sheet, respectively) are stocks, etc. with no market prices. Accordingly, they areomitted.
(Tax effect accounting)
1. Deferred tax assets and deferred tax liabilities by major classification

Deferred tax assets
Accrued enterprise tax
Accrued business office tax
Provision for bonuses
Allowance for doubtful accounts
Provision for share-based compensation
Loss on valuation of membership
Loss on valuation of shares of subsidiaries
and associates
Unrealized gain and loss on available-forsale securities
Other
Subtotal of deferred tax assets
Valuation allowance
Total deferred tax assets
Deferred tax liabilities
Unrealized gain and loss on available-forsale securities
Total deferred tax liabilities
Net deferred tax assets- 49 -

Previous fiscal year
(March 31, 2023)(Millions of yen)
Fiscal year underreview(March 31, 2024)

108
14
358
144
34
24

108
15
479
135
43
24

869

847

40

–

36
1,632
(865)
766

35
1,689
(842)
846

–

(7)

–
766

(7)
839

2. Major components of significant differences arising between the effective statutory tax rate andeffective income tax rate after application of tax effect accounting
Fiscal year under review
Previous fiscal year
(March 31, 2024)(March 31, 2023)
Effective statutory tax rate
30.6%
30.6%
(Adjustments)
Tax credits for wage increases(5.0%)(4.3%)
Other
0.4%
0.4%
Effective income tax rate after application of
26.0%
26.7%
tax effect accounting(Revenue recognition)
Notes have been omitted because the fundamental explanation of revenue arising from contracts withcustomers is identical to the “(Revenue recognition)” section of notes to the consolidated financial statements.
(Significant subsequent events)
Notes have been omitted because the information on the acquisition of treasury shares is identical to the“(Significant subsequent events)” section of notes to the consolidated financial statements.

- 50 -

6. Other
Production, orders, and sales results(1) Production results
Production results per business segment for the fiscal year under review are as follows.
Fiscal year under review(From April 1, 2023 to March 31, 2024)(Millions of yen)

Year-on-year change (%)

Solution Design Business

15,285

101.9

Framework Design Business

4,730

111.7

IT Service Business

12,620101.1

Business Solution Business

1,682

134.8

34,319104.1

Business segment

Total(Notes) 1. Within the Group, only segments that involve made-to-order activities are shown due to the nature ofservices.
2. The above amounts are stated at production cost.
(2) Order results
Order results per segment for the fiscal year under review are as follows.
Order value
Year-on-year
Backlog of orders
Business segmentchange (%)(Millions of yen)
(Millions of yen)
Solution Design Business
20,013
87.9
6,615

Year-on-yearchange (%)
84.3

Framework Design Business

7,053

104.4

3,265

104.9

IT Service Business

18,370

102.6

6,817

104.5

Business Solution Business

2,496

157.8

834

165.6

47,934

97.8

17,533

97.4

Total

(Note) Within the Group, only segments that involve made-to-order activities are shown due to the nature ofservices.
(3) Sales results
Sales results per business segment for the fiscal year under review are as follows.
Fiscal year under review(From April 1, 2023 to March 31, 2024)(Millions of yen)

Year-on-year change (%)

Solution Design Business

21,246

95.3

Framework Design Business

6,901

113.2

IT Service Business

18,079104.2

Business Solution Business

28,404

107.3

Cloud Business

2,078

107.0

Overseas Business

65

90.6

Investment & Incubation Business

164

58.1

76,940103.2

Business segment

Total(Note) Inter-segment transactions are offset and eliminated.

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