File: Summary of Financial Results for the 38th Fiscal Year 第 38 期 通期決算短信_20230215133133(ja-en)

FY 2022/12

Updated: 2023/02/15 13:31:33

Consolidated Financial Results [Japanese GAAP]
February 14, 2023

Company name:

Listedexchanges

Nomura System Corporation

Stock code

3940

Representative

Title:

Contact

Title:

stock

Tokyo

URL https://www.nomura-system.co.jp
Representative Director
Director, General Manager
Administration Department(Name) Yoshimitsu Nomura
of(Name) Yasuo Nemoto

Scheduled date of ordinary general
March 24, 2023
meeting of shareholders
Scheduled date of filing of annual
March 24, 2023
securities report
Preparation of supplementary materials forfinancial results:

Yes

Holding of financial results briefing:

Yes(TEL) 03-6277-0133

Scheduled date of commencement ofMarch 27, 2023
dividend payment(For institutional investors and securities analysts )(Amounts are rounded to the nearest million yen)

Results for the fiscal year ended December 1.2022 (January 1, 2022 to December 31, 2022)(1)Operating Results
Net sales

Operating income(Percentages represent year-on-year changes.)
Ordinary income

Net income

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

FY 2022/12

2,696

△3.4

352

△26.0

371

△24.8

256

△26.8

Year ended December 31,
2021

2,791

9.9

476

27.4

493

26.3

349

29.6

Fully diluted
Per share
Net income

Per share
Net income

Shareholders' equity
Net income margin

Total assets
Ordinary income ratio

Net sales
Operating income margin

Yen

Yen

%

%

%

FY 2022/12

5.53

5.50

9.3

12.2

13.1

Year ended December 31,
2021

7.57

7.51

13.9

17.5

17.0

(Referenc Equity ine)affiliates

earnings

of

FY 2022/12―Millions ofyenYear ended
December 31,
2021―

Millions ofyen(NOTE) We conducted a 2-for-1 stock split on July 1, 2022. Net income per share and diluted net income per share are calculated based on the assumption that the stock
split was executed at the beginning of the fiscal year ended December 2021.

(2)Financial Position
Total assets

Net assets

Equity Ratio

Net assets per share

Millions of yen

Millions of yen%

Yen

FY 2022/12

3,143

2,836

90.2

61.11

Year ended December 31,
2021

2,960

2,647

89.4

57.34

(Referenc Shareholders' equitye)

FY 2022/12

2,836Millions ofyenYear ended
December 31,
2021

2,647

Millions ofyen(NOTE) We conducted a 2-for-1 stock split on July 1, 2022. Net assets per share are calculated based on the assumption that the stock split occurred at the beginning of
the year ended December 31, 2021.

(3)Cash Flow
From operating activities
Cash Flows

From investing activities
Cash Flows

From financing activities
Cash Flows

Cash and cash equivalents
Balance at end of year

Millions of yen

Millions of yen

Millions of yen

Millions of yen

FY 2022/12

446

△77

△148

2,069

Year ended December 31,
2021

160

△9

△150

1,848

2.Dividends
Dividend per share
End of first quarter

Year ended
December 31, 2021

End of second

End of the third

quarterquarter

Term end

Total dividend
Dividend payout
amountratio(Total)Total

Net assets
Dividend rate

Yen

Yen

Yen

Yen

Yen

Millions of yen

%

%

-

0.00

-

6.50

6.50

150

42.9

5.9

―14―1

File: Summary of Financial Results for the 38th Fiscal Year 第 38 期 通期決算短信_20230215133133(ja-en)

Updated: 2023/02/15 13:31:33

FY 2022/12

-

0.00

-

3.25

3.25

FY 2023 (Forecast)

-

0.00

-

3.25

3.25

151

58.8

5.5

-

(NOTE)We conducted a 2-for-1 stock split on July 1, 2022. For the year ended December 31, 2021, the amount of actual dividends before the stock split is presented.

―14―2

File: Summary of Financial Results for the 38th Fiscal Year 第 38 期 通期決算短信_20230215133133(ja-en)

Updated: 2023/02/15 13:31:33

Forecasts for the Fiscal Year Ending December 3.2023 (January 1, 2023 to December 31, 2023)(Percentages represent year-on-year changes for the full fiscal year and year-on-year changes for the quarter.)
Net sales
Millions of yen

Operating income% Millions of yen

Ordinary income% Millions of yen

Per share
Net income

Net income% Millions of yen%

Yen

Second quarter(cumulative)

1,297

△0.7

88

△44.0

88

△47.2

60

△47.8

1.30

Full year

2,750

2.0

275

△21.9

275

△25.9

187

△26.7

4.04

(NOTE)(Appendix) Please refer to "1. Overview of Operating Results, etc., (4) Future Outlook" on page 3.

※ Notes(1)Changes in accounting policies and changes or restatement of accounting estimates
1 Changes in accounting policies caused by revision of accounting standards:

Yes

2 Changes in accounting policies other than (i)

:

None

3 Changes in accounting estimates

:

None

4 Restatement of revisions

:

None

(2)Number of shares outstanding (common shares)
1 Number of shares outstanding at the end of the period
FY 2022/12(including treasury stock)
2 Number of treasury stock at the end of the period
3 Average number of shares during the period

FY 2022/12
FY 2022/12

46,444,800
39,484
46,279,651

Shar Year ended December
es31, 2021

Shar Year ended December
es31, 2021

Shar Year ended December
es31, 2021

46,380,000
219,484
46,125,630

Shar
es
Shar
es
Shar
es

(NOTE)We conducted a 2-for-1 stock split on July 1, 2022. The number of issued shares (common shares) is calculated based on the assumption that the stock split was
executed at the beginning of the fiscal year ended December 2021.

※※

The financial results are outside the scope of audits by a certified public accountant or an auditing firm.
Explanations and other special notes concerning the appropriate use of business performance forecasts
The earnings forecasts and other forward-looking statements herein are based on information currently available to the Company and on certain assumptions deemed
to be reasonable, and do not constitute guarantees by the Company of future performance. Actual results may differ materially from the forecast depending on a range
of factors. Please refer to "1. Overview of Operating Results, etc., (4) Future Outlook" on page 3 for the preconditions for the forecasts and notes on the use of theforecasts.

―14―3

File: Summary of Financial Results for the 38th Fiscal Year 第 38 期 通期決算短信_20230215133133(ja-en)○Accompanying Materials – Contents

1.Overview of Operating Results................................................................................................2(1)Overview of Operating Results for the Fiscal Year under Review....................................................................................2(2)Overview of Financial Position for the Fiscal Year under Review....................................................................................2(3)Overview of cash flows for the fiscal year under review.....................................................................2(4)Future Outlook................................................................................................3(5)Significant Events Related to the Going Concern Assumption..................................................................4
2.Basic Approach to Selection of Accounting Standards..................................................................4
3.Financial Statements and Major Notes..........................................................................................5(1)Balance Sheet...................................................................................................5(2)Income Statement...................................................................................................7(3)Statement of Changes in Shareholders' Equity....................................................................................8(4)Cash flow statement..............................................................................10(5)Notes to Financial Statements..............................................................................11(Notes on the Going Concern Assumption)...........................................................................11(Changes in accounting policies).............................................................................................11(Segment Information)..........................................................................................11(Equity in earnings of affiliates, etc.)................................................................................................11(Per Share Information).............................................................................................12(Significant subsequent events).............................................................................................12―14―4

Updated: 2023/02/15 13:31:33

File: Summary of Financial Results for the 38th Fiscal Year 第 38 期 通期決算短信_20230215133133(ja-en)

Updated: 2023/02/15 13:31:33

1.Overview of Operating Results(1)Overview of Operating Results for the Fiscal Year under Review
In the current fiscal year, the Japanese economy is showing a recovery trend due to the easing of the restriction on the behavior of new-type coronavirus infectious
diseases. However, the situation remains uncertain due to geopolitical risks caused by the deterioration of the situation in Russia and Ukraine, soaring prices, and theimpact of the yen's depreciation.
In the operating environment surrounding us, the spread of telework in conjunction with the spread of the new coronavirus infectious disease has led to the continued
increasing pace of corporate IT spending, including the introduction of online conferencing systems and cloud-based systems, as well as digital transformation (DX)initiatives.
Under these business conditions, we have promoted sales activities centered on our strength of personnel solutions in order to win more orders for prime (prime
contractor projects) for the introduction of SAP ERP packaging. At the same time, the Group aggressively conducted sales of FIS (*) and RPA to stabilize orders andexpand its client base.
In addition, we relocated our Tokyo headquarters for a further leap forward in consulting services. The consulting services we provide are all "people." By expanding
and enhancing our training facilities, we have expanded the scope of recruitment for new graduates and improved and improved our internal training to strengthen ourorganization.
As a result, for the fiscal year under review, net sales decreased 3.4% year on year to ¥2695794000, operating income decreased 26.0% to ¥351880000, ordinary
income decreased 24.8% to ¥370915000, and net income decreased 26.8% to ¥255713000.
Since we are only a single segment of ERP Solutions Business, we have not presented this information by segment.
(※)FIS(Function Implement Service)
In SAP introduction project, client requirements are analyzed from business design and system design, and technical support is provided for design of SAP
realization functions and add-on (built-in) design.

(2)Overview of Financial Position for the Fiscal Year under Review
AssetsTotal assets at the end of the fiscal year under review increased 182890000 yen from the end of the previous fiscal year to 3143237000 yen. This was mainly due
to decreases of ¥195526000 in accounts receivable and contract assets, and increases of ¥220780000 in cash and deposits, ¥46277000 in property, plant and equipment,¥89525000 in investment securities, and ¥33,001 thousand in other (security deposits).

Liabilities
Liabilities at the end of the fiscal year under review decreased by ¥6339000 from the end of the previous fiscal year to ¥307155000. This was mainly due toincreases of 29842000 yen in accounts payable-trade and 12914000 yen in asset retirement obligations, and a decrease of 43273000 yen in income taxes payable.

(Net assets)
Net assets at the end of the fiscal year under review increased by ¥189229000 from the end of the previous fiscal year to ¥2836082000. This was mainly due to anincrease in retained earnings of ¥255713000 due to the recording of net income, a decrease of ¥150022000 due to the payment of dividends, and the disposal oftreasury stock of ¥26025000 and an increase of ¥62113000 in valuation difference on available-for-sale securities.

(3)Overview of cash flows for the fiscal year under review
The balance of cash and cash equivalents (hereinafter referred to as "cash") at the end of the current fiscal year increased by 220780000 yen from the end of theprevious fiscal year to 2068810000 yen.
The status of each cash flow for the current fiscal year is as follows.

Cash flows from operating activities
Net cash provided by operating activities during the fiscal year under review was ¥445841000, compared with net cash provided by operating activities of¥159651000 in the previous fiscal year. This was mainly due to ¥370915000 in income before income taxes, ¥195526000 in changes in notes and accounts receivabletrade, and ¥162930000 in income taxes paid.

Cash flows from investing activities
Net cash used in investing activities during the fiscal year under review was ¥77359000, compared with net cash used in investing activities of ¥8968000 in the―14―5

File: Summary of Financial Results for the 38th Fiscal Year 第 38 期 通期決算短信_20230215133133(ja-en)

Updated: 2023/02/15 13:31:33

previous fiscal year. This was mainly due to purchase of property, plant and equipment of ¥36618000 and payments for lease and guarantee deposits of ¥47271000.

Cash flows from financing avtivities
Net cash used in financing activities during the fiscal year under review was ¥147702000, compared with net cash used in financing activities of ¥150014000 in
the previous fiscal year. Cash dividends of 149,763,000 were the principal component of cash flow.

(Reference) Trends in cash flow indicators
Year ended December Year ended December Year ended December
31, 2019
31, 2020
31, 2021

FY12/18

FY 2022/12

Shareholders' equity ratio (%)

88.8

89.2

89.3

89.4

90.2

Equity ratio based on market value (%)

162.1

255.5

313.9

215.2

171.3

Interest-bearing cash flow
Debt ratio

―

―

―

―

―

Interest coverage・
Ratio

―

―

―

―

―

Equity ratio : Equity capital/Total assets
Shareholders' equity ratio based on market capitalization: Market capitalization/Total assets
Interest-bearing debt to cash flow ratio: Interest-bearing debt/Operating cash flow
Instant Coverage Ratio: Operating Cash Flow/Interest Payments(NOTE) 1. Market capitalization is calculated by multiplying the closing share price at the end of the period by the total number of shares outstanding at the end of theperiod (excluding treasury stock).
2.Interest-bearing debt to cash flow ratio and interest coverage ratio are not stated because interest-bearing debt does not exist in any of the above periods.

(4)Future Outlook
Looking ahead, corporate IT investment is expected to remain firm against the backdrop of demand for switching corporate core systems from systems developed inhouse to ERP packaging and growing demand for cloud-based ERP packaging.
Against this backdrop, we will continue to focus on prime in the human resources field, further expand prime, develop new customers in other fields, such as theaccounting field, and provide high-value-added services in FIS to secure stable earnings. We also established /PMO Consulting Division in the Strategic Planning
Department of PMO(*) as a new organizational unit. DX and corporate transformation are progressing in a wide range of companies, and they are specialized in consulting.
These organizations provide services to enable companies to realize these goals as planned. We will continue to provide new services, such as cloud computing and big
data analysis, with the aim of continuously acquiring projects.
In addition, the Medium-Term Management Plan (from December 2022 to December 2026) announced in March 2022 aims to achieve a EPS20 or higher (132% orhigher compared to EPS15.15 in December 2021) and a PER50 double or higher in the fiscal year ended December 2026, the final year. Under the medium-term
management plan, we moved our head office in September 2022 to expand and enhance our training facilities, which had been the upper limit of the number of employees,
in order to gradually increase sales to ¥3.5 billion and to raise PER levels by improving sales and earnings growth rates. We plan to continue to develop in-house solutions
aimed at increasing prime orders, increase the number of recruits, and make the necessary investments in our medium-term management plan.
For this reason, we are currently forecasting net sales of ¥2750010000, operating income of ¥274757000, ordinary income of ¥274757000, and net income of¥187390000 for the next fiscal year.

(※)PMO(Project Management Office)A management structure that standardizes the governance processes associated with a project and facilitates the sharing of resources, methodologies, tools
and techniques.

―14―6

File: Summary of Financial Results for the 38th Fiscal Year 第 38 期 通期決算短信_20230215133133(ja-en)

Updated: 2023/02/15 13:31:33(5)Significant Events Related to the Going Concern Assumption
Not applicable.

2.Basic Approach to Selection of Accounting Standards
Many of our stakeholders are domestic shareholders, creditors, business partners, etc., and there is little need to procure funds from overseas. Accordingly, the accounting
standard has been applied to Japanese GAAP.

―14―7

File: Summary of Financial Results for the 38th Fiscal Year 第 38 期 通期決算短信_20230215133133(ja-en)

Updated: 2023/02/15 13:31:33

3.Financial Statements and Major Notes(1)Balance Sheet(Thousands of yen)
Prior taxable year
As of December 31, 2021

Current fiscal year
As of December 31, 2022

AssetsCurrent assets
Cash and deposits

1,848,030

Accounts receivable

649,783--

454,257

Work in process

7,173

2,704

Prepaid expenses

12,41319,065

Others

2,117

2,275

2,519,516

2,547,111

Accounts receivable and contract assets

Total current assets

2,068,810

Fixed assets
Property, plant and equipment
Buildings

12,78848,477△12,084△3,755

Buildings, net

703

44,722

Automotive equipment

11,67011,670△3,886△6,478

7,784

5,192

Accumulated depreciation

Accumulated depreciation
Vehicles, net
Tools, furniture and fixtures

11,196

13,274△10,206△7,435

990

5,840

9,477

55,754

Others218

218

Total intangible assets

218

218

Investment securities

334,077

423,602

Long-term prepaid expenses

19,262

27,870

Deferred tax assets

53,51031,393

Others24,28757,288

Total investments and other assets

431,135

540,153

440,831

596,125

2,960,346

3,143,237

Accumulated depreciation
Tools, furniture, and fixtures, net
Total property, plant and equipment
Intangible assets

Investments and other assets

Total noncurrent assets
Total assets―14―8File: Summary of Financial Results for the 38th Fiscal Year 第 38 期 通期決算短信_20230215133133(ja-en)

Updated: 2023/02/15 13:31:33(Thousands of yen)
Prior taxable year
As of December 31, 2021

Current fiscal year
As of December 31, 2022

Liabilities
Current liabilities
Accounts payable

129,288

159,130

Accounts payable-other

27,67230,752

Income taxes payable

96,28453,010

Deposits received

17,993

19,511Others38,66728,248

Total current liabilities

309,904

290,651

Asset retirement obligations

3,590

16,504

Total noncurrent liabilities

3,590

16,504313,494

307,155

322,841

323,871

Legal capital surplus

279,341

280,371

Other capital surplus

2,639

-

Total capital surplus

281,980

280,371

2,141,192

2,242,861

2,141,192

2,242,861

Long-term liabilities

Total liabilities
Net assets
Shareholders' equity
Common stock
Capital surplus

Retained earnings
Other retained earnings
Retained earnings brought forward
Total retained earnings
Treasury stock△31,671△5,646

Total shareholders' equity

2,714,341

2,841,457

Valuation difference on available-for-sale securities△67,559△5,446

Total valuation and translation adjustments△67,559△5,44671

71

2,646,853

2,836,082

2,960,346

3,143,237

Valuation and translation adjustments

Stock acquisition right
Total net assets
Total liabilities and net assets―14―9File: Summary of Financial Results for the 38th Fiscal Year 第 38 期 通期決算短信_20230215133133(ja-en)

Updated: 2023/02/15 13:31:33(2)Income Statement(Thousands of yen)
Prior taxable year
(January 1, 2021
To December 31, 2021)

Current fiscal year
(January 1, 2022
To December 31, 2022)

Net sales

2,790,775

2,695,794

Cost of sales

2,048,478

2,028,928

Gross profit

742,297

666,865

Selling, general and administrative expenses

266,760

314,986

Operating income

475,537

351,880

17,655

18,794212

242

Non-operating income
Dividends income
OthersTotal non-operating income
Ordinary income

17,866

19,035493,403

370,915

1,196-

Extraordinary income
Gain on sales of noncurrent assets

1,196

-

Income before income taxes

Total extraordinary income

494,599

370,915

Income taxes

147,332

120,498

Income taxes-deferred△2,055△5,296

Total income taxes

145,277

115,202

Net income

349,322

255,713―14―10File: Summary of Financial Results for the 38th Fiscal Year 第 38 期 通期決算短信_20230215133133(ja-en)

Updated: 2023/02/15 13:31:33(3)Statement of Changes in Shareholders' Equity
Previous fiscal year (from January 1, 2021 to December 31, 2021)(Thousands of yen)
Shareholders' equity
Capital surplus
Common stock

Retained earnings
Other retained

Legal capital

Other capital

Total capitalearnings

Total retained

surplussurplussurplusRetained earnings

earnings

Treasury stock

Total shareholders'equitybrought forward
Opening balance

319,988276,488

2,853

2,853

-

276,488

1,918,419

1,918,419△27,423

2,487,471

Change during the year
Issuanceof

new(exerciseofsubscription

shares
2,853

5,705

rights to shares)
Dividend of surplus
Net income△126,549△126,549△126,549

349,322349,322349,322

Purchase of treasury stock
Disposal of treasury stock

2,639

2,639

△29,000△29,000

24,752

27,391

Transfer of loss on disposal of-treasury stock
Items other than shareholders'equityNet change in the year
Total changes in current term
Closing balance

2,853

2,853

2,639

5,492

222,773

222,773△4,248226,870

322,841

279,341

2,639

281,980

2,141,192

2,141,192△31,6712,714,341

Total valuation and Stock acquisitionrighttranslation

Total net assets

Valuation and translation adjustments
Valuationdifference on
available-for-salesecurities
Opening balance△92,135

adjustments△92,135

212

2,395,548

Change during the year
Issuanceof

new(exerciseofsubscription

shares5,705

rights to shares)
Dividend of surplus△126,549

Net income

349,322

Purchase of treasury stock△29,000

Disposal of treasury stock

27,391

Transfer of loss on disposal of-treasury stock
Items other than shareholders'equity24,576

24,576△141

24,43524,576

24,576△141

251,305△67,559△67,55971

2,646,853

Net change in the year
Total changes in current term
Closing balance―14―11File: Summary of Financial Results for the 38th Fiscal Year 第 38 期 通期決算短信_20230215133133(ja-en)

Updated: 2023/02/15 13:31:33

Current fiscal year (from January 1, 2022 to December 31, 2022)(Thousands of yen)
Shareholders' equity
Capital surplus
Common stock

Retained earnings
Other retained

Legal capital

Other capital

Total capitalearnings

Total retained

surplussurplussurplusRetained earnings

earnings

Treasury stock

Total shareholders'equitybrought forward
Opening balance

322,841

279,341

1,031

1,031

2,639

281,980

2,141,192

2,141,192

�31,6712,714,341

Change during the year
Issuanceof

new(exerciseofsubscription

shares
1,031

2,062

rights to shares)
Dividend of surplus
Net income△150,022△150,022△150,022

255,713

255,713

255,713Purchase of treasury stock

△19

△19

△274

△293

Disposal of treasury stock△6,643△6,643

26,29919,656

4,023

4,023

Transfer of loss on disposal oftreasury stock�4,023

�4,023-

Items other than shareholders'equityNet change in the year
Total changes in current term
Closing balance

1,031

1,031

△2,639△1,608

101,668

101,668

323,871

280,371-

280,371

2,242,861

2,242,861

Total valuation and Stock acquisitionrighttranslation

Total net assets

Valuation and translation adjustments
Valuationdifference on
available-for-salesecurities
Opening balance△67,559

adjustments△67,55971

2,646,853

Change during the year
Issuanceof

new(exerciseofsubscription

shares2,062

rights to shares)
Dividend of surplus△150,022

Net income

255,713Purchase of treasury stock△293

Disposal of treasury stock

19,656

Transfer of loss on disposal of-treasury stock
Items other than shareholders'equity62,113

62,113

62,113

Total changes in current term

62,113

62,113-

189,229

Closing balance△5,446△5,44671

2,836,082

Net change in the year

―14―12

26,025

127,116△5,646

2,841,457

File: Summary of Financial Results for the 38th Fiscal Year 第 38 期 通期決算短信_20230215133133(ja-en)

Updated: 2023/02/15 13:31:33(4)Cash flow statement(Thousands of yen)
Prior taxable year
(January 1, 2021
To December 31, 2021)

Current fiscal year
(January 1, 2022
To December 31, 2022)

Net cash provided by operating activities
Income before income taxes
Depreciation and amortization
Gain on sales of noncurrent assets
Charges for stock compensation

494,599

370,915

4,940

10,984△1,196

-

3,196

7,683

Dividends income△17,655△18,794

Decrease (increase) in notes and accounts receivable-trade (increase in�)△235,195

195,526

Decrease (increase) in inventories (increase in �)

16,025

4,469

Increase (decrease) in notes and accounts payable-trade (decrease in �)△6,472

29,842

Increase (decrease) in accrued consumption taxes (�: decrease)

1,650△25,511

Others

4,540

14,863

Subtotal

264,432

589,977

Dividend received

17,655

18,794

Income taxes paid

△122,436△162,930

159,651445,841△11,670△36,618

2,701-

Payments for lease and guarantee deposits-△47,271

Proceeds from refund of lease and guarantee deposits-

14,270Net cash provided by operating activities
Cash flow from investing activities
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment

Payments for asset retirement obligations-

Cash flow from investing activities△8,968△7,740△77,359

Cash flow from financing activities
Proceeds from issuance of shares upon exercise of subscription rights
to shares

5,564

2,062

Purchase of treasury stock△29,000-

Cash dividends paid

△126,578△149,763

Cash flow from financing activities△150,014△147,702

668

220,780

Cash and cash equivalents at beginning of period

1,847,362

1,848,030

Cash and cash equivalents at end of term

1,848,030

2,068,810

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS―14―13File: Summary of Financial Results for the 38th Fiscal Year 第 38 期 通期決算短信_20230215133133(ja-en)

Updated: 2023/02/15 13:31:33(5)Notes to Financial Statements(Notes on the Going Concern Assumption)
Not applicable.

(Changes in accounting policies)(Accounting standard for revenue recognition)"Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020, "Revenue Recognition Accounting Standard"), etc. is applied from the
beginning of the current fiscal year, and revenue is recognized at the amount expected to be received in exchange for the promised goods or services when control of thepromised goods or services is transferred to the customers. As a result, revenue recognition for the development of order-made software under contract was previously
based on the percentage-of-completion method for contracts where there is certainty of outcome in the portion of progress, and on the completion method for othercontracts. However, with the exception of very short-term contracts, revenue is recognized over a certain period of time as performance obligations are satisfied. The
method of estimating the degree of progress in satisfying performance obligations is calculated as the ratio of cumulative actual costs incurred to the estimated total cost
(input method) if the results of performance obligations can be reasonably measured.
The application of the Revenue Recognition Accounting Standards, etc. is in accordance with the transitional treatment stipulated in the exception of Article 84 of the
Revenue Recognition Accounting Standards. However, there is no impact on the profit and loss for the current fiscal year and the beginning retained earnings.
Due to the adoption of the Revenue Recognition Accounting Standards, the Company has decided to include "Accounts receivable" which was presented as "Current
assets" in the balance sheet for the previous fiscal year in "Accounts receivable and contract assets" from the current fiscal year.

(Accounting Standard for Calculation of Market Value)
The Company will apply the "Accounting Standard for Calculation of Market Value" (ASBJ Statement No. 30, July 4, 2019, hereinafter referred to as the "Market
Value Accounting Standard"), etc. from the beginning of the fiscal year under review, and apply the new accounting policy stipulated by the Current Value AccountingStandard in accordance with the transitional treatment stipulated in Article 19 of the Current Value Accounting Standard and Article 44-2 of the Financial Instruments
Accounting Standard (ASBJ Statement No. 10, July 4, 2019). There is no impact on the financial statements.

(Segment Information)
Segment Information
Disclosure is omitted because ERP Solution Business is the only single segment.

(Equity in earnings of affiliates, etc.)
Not applicable because we do not have an affiliate.

―14―14File: Summary of Financial Results for the 38th Fiscal Year 第 38 期 通期決算短信_20230215133133(ja-en)

Updated: 2023/02/15 13:31:33(Per Share Information)
Prior taxable year
(January 1, 2021
To December 31, 2021)

Current fiscal year
(January 1, 2022
To December 31, 2022)

Net assets per share

57.34 yen

61.11 yen

Net income per share

7.57 yen

5.53 yen

Fully diluted
Net income per share

7.51 yen

5.50 yen(NOTE) 1. We conducted a 2-for-1 stock split on July 1, 2022. Net assets per share, net income per share and diluted net income per share have been calculated on theassumption that the stock split was implemented at the beginning of the previous fiscal year.
2. The basis for calculating net income per share is as follows.
Prior taxable year
(January 1, 2021
To December 31, 2021)

Item

Current fiscal year
(January 1, 2022
To December 31, 2022)

Net income per share
Net income (thousand yen)349,322

255,713――349,322

255,713

46,125,630

46,279,651――

Increase in common stock (shares)

387,986

252,874(Stock acquisition rights (shares))(387,986)(252,874)――

Amount not attributable to common shareholders
Net income attributable to common stock (thousand yen)
Average number of shares of common stock outstanding during the period(shares)
Diluted EPS Net income for computation
Adjustment to net income (thousand yen)

Summary of potential shares not included in the calculation of diluted net income
per share because they have no dilutive effect(Significant subsequent events)(Acquisition of Treasury Stock)
At the meeting of the Board of Directors held on February 14, 2023, the Company resolved to repurchase treasury stock in accordance with the Articles ofIncorporation stipulated in Article 459, Section 1 of the Companies Act, as described below, and the specific methods of repurchase.
1.Reason for Conducting the Share Repurchase
We were informed by Yoshimitsu Nomura, our representative director, that we have the intention to sell some of our shares. By acquiring these shares as treasury
stock, we will improve our capital efficiency, enable us to implement flexible capital policies in response to changes in the business environment, including considerationof an incentive plan. We have also determined that the reduction in the shareholding ratio of the controlling shareholder will lead to improved governance and liquidity,
and will lead to an increase in the value of shares per share.
2.Details of acquisition(1) Class of shares to be acquired Our common stock(2) Total number of shares to be acquired: 500,000 shares (maximum)(1.08% of the total number of issued shares (excluding treasury stock))(3) Total purchase price of shares: ¥59,000,000 (maximum)(4) Acquisition date February 15, 2023
(5) Method of acquisition: Purchase through off-floor purchase transaction (ToSTNeT-3) of treasury shares on the Tokyo Stock Exchange―14―15