Disclaimer: This document is an English translation of the original document in Japanese and has been
prepared solely for reference purposes. In the event of any discrepancy between this English
translation and the original in Japanese, the original shall prevail in all respects.

Consolidated Financial Results
for the Six Months Ended September 30, 2023
[Japanese GAAP]
October 27, 2023
Company name: SYSTEM RESEARCH CO., LTD.
Stock exchange listing: Tokyo Stock Exchange
Code number: 3771
URL: https://www.sr-net.co.jp/
Representative: Hiroshi Hirayama, Representative Director and President
Contact: Yoshinobu Ohta, Operating Officer, General Manager, Public Relations Office
Phone: +81-52-413-6820
Scheduled date of filing quarterly securities report: November 10, 2023
Scheduled date of commencing dividend payments: Availability of supplementary briefing materials on quarterly financial results: Available
Schedule of quarterly financial results briefing session: Scheduled (for investors and securities analysts)(Amounts of less than one million yen are rounded down.)
1. Consolidated Financial Results for the Six Months Ended September 30, 2023 (April 1, 2023 to September
30, 2023)(1) Consolidated Operating Results (cumulative)(% indicates changes from the previous corresponding period.)
Profit attributable to
Net sales
Operating profit
Ordinary profit
owners of parent
Six months ended
Million yen%
Million yen%
Million yen%
Million yen
September 30, 2023
11,308
7.8
1,186
11.0
1,209
13.0
898
September 30, 2022
10,489
23.2
1,068
44.3
1,069
42.9
477
(Note) Comprehensive income: Six months ended September 30, 2023: ¥901 million [138.0%]
Six months ended September 30, 2022: ¥378 million [(24.9)%]
Basic earnings per
share

Six months ended
September 30, 2023
September 30, 2022

Diluted earnings per
share

Yen

Yen

107.52
57.16-(2) Consolidated Financial Position
Total assets
Million yen

Net assets
Million yen

14,335
As of September 30, 2023
14,181
As of March 31, 2023
(Reference) Equity: As of September 30, 2023: ¥9,437 million
As of March 31, 2023: ¥9,123 million

9,451
9,135

Equity ratio
%

65.8
64.3

%

88.0
(6.5)

2. Dividends
Annual dividends

1stquarter-end

Yen

2nd
quarter-end

3rdquarter-end

Yen

Fiscal year-end

Yen

Fiscal year ended
0.00
March 31, 2023
Fiscal year ending
0.00
March 31, 2024
Fiscal year ending
March 31, 2024
(Forecast)
Note: Revisions to the forecast of cash dividends most recently announced: No

Total

Yen

Yen

70.00

70.00

70.00

70.00

3. Consolidated Financial Results Forecast for the Fiscal Year Ending March 31, 2024 (April 1, 2023 to March
31, 2024)(% indicates changes from the previous corresponding period.)
Net sales
Million yen%

Operating profit

Ordinary profit

Million yen

Million yen%

Profit attributable toowners of parent% Million yen

Full year
23,815 10.4
2,516
0.5
2,542
1.0
Note: Revisions to the financial result forecast most recently announced: No

1,817

%

Basic earnings
per share

13.4* Notes:(1) Changes in significant subsidiaries during the period : No
(2) Adoption of accounting treatment specific to the preparation of quarterly consolidated financial statements: Yes(3) Changes in accounting policies, changes in accounting estimates, and restatement(i) Changes in accounting policies due to revisions to accounting standards and other regulations: No(ii) Changes in accounting policies due to other reasons: No(iii) Changes in accounting estimates: No(iv) Restatement: No(4) Number of issued shares (common shares)(i) Total number of issued shares at the end of the period (including treasury shares):
As of September 30, 2023: 8,360,000 shares
As of March 31, 2023: 8,360,000 shares(ii) Number of treasury shares at the end of the period:
As of September 30, 2023: 2,042 shares
As of March 31, 2023: 2,008 shares(iii) Average number of shares outstanding during the period (cumulative from the beginning of the fiscal
year):
Six months ended September 30, 2023: 8,357,968 shares
Six months ended September 30, 2022: 8,358,037 shares

Yen

217.47

* These quarterly consolidated financial results are outside the scope of quarterly review by certified public
accountants or audit firms.
* Explanation of the proper use of financial results forecast and other notes(Notes on forward-looking statements, etc.)
The financial results forecast and other forward-looking statements herein are based on information currently
available to the Company and certain assumptions that the Company deems reasonable, and the Company does
not intend to guarantee that they will be achieved. In addition, actual results may differ significantly from these
forecasts due to a wide range of factors. For the conditions assumed for the financial results forecast, precautions
for the use of the financial results forecast, etc., please refer to “(3) Explanation of Consolidated Financial Results
Forecasts and Other Forward-looking Information” on page 3 of the attachments.
(Access to supplementary briefing materials on quarterly financial results)
The Company will hold a quarterly financial results briefing session on Monday, November 13, 2023, forinvestors and securities analysts. The materials to be distributed at this session will be posted on the Company’s
website on the same day.

Table of Contents - Attachments
1. Qualitative information on quarterly financial results .................................................................................... 2(1) Explanation of Operating Results ............................................................................................................... 2(2) Explanation of Financial Position .............................................................................................................. 2(3) Explanation of Consolidated Financial Results Forecasts and Other Forward-looking Information ......... 3
2. Quarterly Consolidated Financial Statements and Principal Notes ................................................................ 4(1) Quarterly Consolidated Balance Sheets ..................................................................................................... 4(2) Quarterly Consolidated Statements of Income and Comprehensive Income ............................................. 6
Quarterly Consolidated Statements of Income .......................................................................................... 6
Quarterly Consolidated Statements of Comprehensive Income ................................................................ 7(3) Quarterly Consolidated Statements of Cash Flows .................................................................................... 8(4) Notes to the Quarterly Consolidated Financial Statements ........................................................................ 9(Notes on going concern assumption) .............................................................................................................. 9(Notes in the case of significant changes in shareholders’ equity) .................................................................. 9(Accounting policies adopted specially for the preparation of quarterly consolidated financial statements) .... 9
3. Other ............................................................................................................................................................. 10
Status of Production, Receipt of Orders, and Sales(1) Production .............................................................................................................................................. 10(2) Outsourcing ............................................................................................................................................ 10(3) Purchases ................................................................................................................................................ 10(4) Receipt of Orders .................................................................................................................................... 11(5) Sales ....................................................................................................................................................... 111

1. Qualitative information on quarterly financial results(1) Explanation of Operating Results
During the six months ended September 30, 2023, the Japanese economy was on a moderate recovery trend,
as consumer spending and capital investment picked up, thanks to the normalization of economic and social
activities resulting from the easing of measures against COVID-19. Meanwhile, the impact of the rise in prices
and global inflationary pressures brought by the prolonged surge in raw material and energy costs, and otherfactors on the domestic economy and corporate earnings remains uncertain.
In the information service industry, in which the Group operates, the industry’s total net sales for August 2023
grew by 7.7% compared with a year earlier, marking a year-on-year increase for 17 months in a row, according
to the Current Survey of Selected Service Industries released by the Ministry of Economy, Trade and Industry.
Specifically, sales of “Software Ordered,” the main segment, increased by 10.4% year on year, sales of “Software
Products” decreased by 2.1% year on year, and “System Management on Commission” increased by 4.7% year
on year. These results show that although the companies’ IT investment demand remains strong, mainly for the
renewal of corporate systems and digital transformation (DX), actual results differed depending on the type ofoperation.
In this business environment, for the six months ended September 30, 2023, net sales of SI Services Businesswere 4,279 million yen (an increase of 5.7% year on year), due to a steady IT investment demand from theautomotive-related, electrical equipment manufacturing, wholesale and retail industries, the Company’s major
customer sectors. Net sales of the Software Development Business were 6,482 million yen (an increase of 7.9%
year on year), as the Company stably secured continuing contracts with existing customers. Net sales of Software
Products Business, which conducts businesses including sales of packaged software, were 180 million yen (anincrease of 16.0% year on year) due to increased sales of Simplex, sales and customers management software forthe mail order business, among other factors. Net sales of Merchandise Sales were 198 million yen (an increaseof 7.2% year on year) due to the purchase and sale of personal computers and IT devices as well as software
products, among other items. Net sales of Website Administration and Cloud Services (SaaS) in the other category
were 167 million yen (an increase of 68.9% year on year), backed by increases in the number of new EC-mallshop openings and in merchandise value.
In terms of earnings, IT investment by client companies remained strong, and the Company successfully
maintained a high operating rate of engineers. In addition, the Company received high-profit projects from its
major customer sectors while also making efforts such as the risk management (PRM) activities, resulting insecuring profit.
As a result, for the six months ended September 30 2023, net sales were 11,308 million yen (an increase of
7.8% year on year), with operating profit of 1,186 million yen (an increase of 11.0% year on year), ordinary profitof 1,209 million yen (an increase of 13.0% year on year), and profit attributable to owners of parent of 898 million
yen (an increase of 88.0% year on year), on a consolidated basis.
(2) Explanation of Financial Position
1) Analysis of the status of assets, liabilities and net assets
Total assets as of September 30, 2023 increased by 153 million yen year on year to 14,335 million yen, due
to an increase in other under property, plant and equipment, among other factors.
Liabilities as of September 30, 2023 decreased by 162 million yen year on year to 4,883 million yen, due todecreases in income taxes payable and provision for bonuses, among other factors, despite an increase in shortterm borrowings.
Net assets as of September 30, 2023 increased by 315 million yen year on year to 9,451 million yen, due toan increase in retained earnings, among other factors, despite the payment of dividends from retained earnings.

22) Analysis of the status of cash flows
Cash and cash equivalents (hereinafter referred to as “cash”) as of September 30, 2023 amounted to 7,486
million yen, an increase of 150 million yen from 6,348 million yen as of March 31, 2023.
Cash flows from operating activities, investing activities, and financing activities and their major factors forthe six months ended September 30, 2023 are as follows.
(Cash flows from operating activities)
Net cash provided by operating activities during the period under review amounted to 798 million yen (while
net cash provided by operating activities during the same period of the previous fiscal year amounted to 437
million yen) due primarily to the effect of the factors contributing to an increase in cash, such as profit before
income taxes of 1,209 million yen, more than offsetting the effect of the factors contributing to a decrease in cash,
such as decreases of 227 million yen in provision for bonuses and of 395 million yen in income taxes paid.
(Cash flows from investing activities)
Net cash used in investing activities during the period under review amounted to 207 million yen (while net
cash used in investing activities during the same period of the previous fiscal year amounted to 27 million yen)
due primarily to the purchase of property, plant and equipment of 166 million yen, among other factors.
(Cash flows from financing activities)
Net cash used in financing activities during the period under review amounted to 439 million yen (while net
cash used in financing activities during the same period of the previous fiscal year amounted to 375 million yen)
due primarily to proceeds from long-term borrowings and short-term borrowings of 840 million yen, repaymentsof long-term borrowings and short-term borrowings of 694 million yen, and dividends paid of 585 million yen.
(3) Explanation of Consolidated Financial Results Forecasts and Other Forward-looking Information
No change has been made to the financial results forecasts for the six months ended September 30, 2023 andthe full year ending March 31, 2024, announced on October 23, 2023.

3

2. Quarterly Consolidated Financial Statements and Principal Notes(1) Quarterly Consolidated Balance Sheets(Thousand yen)
As of March 31, 2023
AssetsCurrent assets
Cash and deposits
Trade receivables and contract asset
Merchandise
Supplies
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures, net
Land
Other, net
Total property, plant and equipment
Intangible assets
Goodwill
Software
Other
Total intangible assets
Investments and other assets
Other
Total investments and other assets
Total non-current assets
Total assets

4

As of September 30, 2023

7,371,297
4,420,921
2,948
6,397
102,975(427)
11,904,112

7,521,771
4,304,216
3,271
6,406
91,375
11,927,042

374,564
746,460
21,9191,142,943

363,252
746,460
188,998
1,298,711

245,754
137,156
6,941
389,852

212,986
144,0888,056
365,131744,851
744,851
2,277,647
14,181,759

744,613744,6132,408,455
14,335,498

(Thousand yen)
As of March 31, 2023
Liabilities
Current liabilities
Accounts payable - trade
Short-term borrowings
Current portion of long-term borrowings
Income taxes payable
Provision for bonuses
Other
Total current liabilities
Non-current liabilities
Long-term borrowings
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
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

5

As of September 30, 2023

885,608
741,676458,257
1,130,038
1,169,550
4,385,131

899,434
176,000
744,416
364,533
902,203
1,169,610
4,256,196

661,036
661,036
5,046,167

627,722627,722
4,883,918

550,150
517,550
8,050,238(1,252)
9,116,686

550,150
517,550
8,363,848(1,333)9,430,214

6,545
6,545
12,3609,135,592
14,181,759

6,976
6,976
14,3889,451,579
14,335,498

(2) Quarterly Consolidated Statements of Income and Comprehensive Income
Quarterly Consolidated Statements of Income
Six Months Ended September 30(Thousand yen)
For the six months ended
September 30, 2022
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
Subsidy income
Other
Total non-operating income
Non-operating expenses
Interest expenses
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sale of investment securities
Total extraordinary income
Extraordinary losses
Loss on retirement of non-current assets
Loss on termination of retirement benefit plan
Total extraordinary losses
Profit before income taxes
Income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent

6

For the six months ended
September 30, 2023

10,489,948
8,278,697
2,211,250
1,142,428
1,068,822

11,308,312
8,788,047
2,520,264
1,333,370
1,186,894

7
330
4,120
667
5,125

9
24,4902,003
26,502

3,915
185
4,100
1,069,847

4,148
3
4,152
1,209,245

1,286
1,286

-

1
363,811363,813707,320
227,834
479,486
1,706
477,779

58
58
1,209,186
308,488
900,697
2,028
898,669

Quarterly Consolidated Statements of Comprehensive Income
Six Months Ended September 30(Thousand yen)
For the six months ended
September 30, 2022
ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Remeasurements of defined benefit plans, net of tax
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests

7

For the six months ended
September 30, 2023

479,486

900,697(899)(100,102)(101,002)
378,483430
430
901,127

376,776

899,099

1,706

2,028

(3) Quarterly Consolidated Statements of Cash Flows(Thousand yen)
For the six months ended
September 30, 2022
Cash flows from operating activities
Profit before income taxes
Depreciation
Amortization of goodwill
Loss on termination of retirement benefit plan
Increase (decrease) in provision for bonuses
Increase(decrease) for retirement benefits asset liability
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Increase (decrease) in trade payables
Gain on sales of investment securities
Other, net
Subtotal
Income taxes paid
Other, net
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Purchase of intangible assets
Proceeds from sale of investment securities
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Proceeds from short-term borrowings
Repayments of short-term borrowings
Proceeds from long-term borrowings
Repayments of long-term borrowings
Purchase of treasury shares
Dividends paid
Net cash provided by (used in) financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

8

For the six months ended
September 30, 2023

707,320
48,31432,767363,811(185,043)(12,713)(56,676)(798)
33,521(1,286)(100,860)
828,357(387,323)(3,693)437,340

1,209,186
54,00032,767(227,835)
136,294(332)
18,398(24,547)
1,197,931(395,613)(4,265)
798,052(4,881)(36,676)
14,18810(27,359)(166,478)(41,385)(207,863)

440,000(264,000)
400,000(449,992)(98)(501,484)(375,574)
34,405
6,314,386
6,348,792

440,000(264,000)
400,000(430,574)(81)(585,059)(439,715)
150,474
7,336,297
7,486,771

(4) Notes to the Quarterly Consolidated Financial Statements(Notes on going concern assumption)
There are no relevant matters.
(Notes in the case of significant changes in shareholders’ equity)
There are no relevant matters.
(Accounting policies adopted specially for the preparation of quarterly consolidated financial statements)(Calculation of tax expenses)
The Company reasonably estimates the effective tax rate after applying tax effect accounting to profit before
income taxes for the fiscal year ending March 31, 2024, and multiplies profits before income taxes for the quarterby the estimated effective tax rate. However, if the estimated effective tax rate used to calculate tax expenses
would be significantly unreasonable, the normal effective statutory tax rate is used.

93. Other
Status of Production, Receipt of Orders, and Sales(1) Production
The amount of production by business category for the six months ended September 30, 2023 is as follows:
For the six months ended
September 30, 2023
Business category

Change from theprevious
corresponding
period (%)

Amount of production(million yen)
SI Services Business

4,279

105.7

Software Development Business

6,482

107.9

Software Products Business

180

116.0

Other

167

168.9

11,110

107.8

Total
(Note) Amounts are presented based on sales prices.

(2) Outsourcing
The amount of outsourcing by business category for the six months ended September 30, 2023 is as follows:
For the six months ended
September 30, 2023
Business category

Change from theprevious
corresponding
period (%)

Amount of outsourcing(million yen)
SI Services Business

1,677

104.9

Software Development Business

2,654

106.4

40

172.3

4,371

106.2

Software Products Business
Total(3) Purchases
The amount of purchases by business category for the six months ended September 30, 2023 is as follows:
For the six months ended
September 30, 2023
Business category

Change from theprevious
corresponding period(%)

Amount of purchases(million yen)
Merchandise Sales

160(Note) Amounts are presented based on purchase prices.

10

103.3

(4) Receipt of Orders
The amount of orders received by business category for the six months ended September 30, 2023 is as follows:
For the six months ended
September 30, 2023
Business category
Orders received(million yen)

Change fromthe previous
corresponding
period (%)

Backlog oforders(million yen)

Change fromthe previous
corresponding
period (%)

SI Services Business

4,957

108.9

2,658

106.4

Software Development Business

6,500

99.5

2,440

98.9

Software Products Business

171

124.2

95

114.0

Merchandise Sales

169

100.9

20

84.9

11,798

103.6

5,214

102.8

Total

(5) Sales
The amount of sales by business category for the six months ended September 30, 2023 is as follows:
For the six months ended
September 30, 2023
Business category

Change from theprevious
corresponding
period (%)

Amount of sales (million yen)
SI Services Business

4,279

105.7

Software Development Business

6,482

107.9

Software Products Business

180

116.0

Merchandise Sales

198

107.2

Other

167

168.9

11,308

107.8

Total

(Note) The amount of sales by major customer and the share of the sales in total sales are as follows:
Customer

For the six months ended
September 30, 2022
Amount of sales(million yen)

TOYOTA SYSTEMS CORPORATION

1,499

11

For the six months ended
September 30, 2023

Share
(%)

Amount of sales(million yen)
14.2

1,742

Share
(%)
15.4