May 11 2018

Summary of Consolidated Financial Results for the Fiscal Year Ended March 31, 2018
[Japanese GAAP]
Listing: Tokyo Stock Exchange, First Section
URL: http://www.jast.jp

Company name: Japan System Techniques Co., Ltd.
Stock code:
4323
Representative:
Takeaki Hirabayashi, President and CEO
Contact:
Noriaki Okado, Director and CFO
Scheduled date of Annual General Meeting of Shareholders:
Scheduled date of payment of dividend:
Scheduled date of filing of Annual Security Report:
Preparation of supplementary materials for financial results:
Holding of financial results meeting:Tel: +81-6-4560-1000
June 26, 2018
June 11, 2018
June 27, 2018
Yes
Yes (for analysts)

Note: The original disclosure in Japanese was released on May 11, 2018 at 18:50 (GMT +9).
(All amounts are rounded down to the nearest million yen)

1. Consolidated Financial Results for the Fiscal Year Ended March 31, 2018 (April 1, 2017 – March 31, 2018)(1) Consolidated results of operations(Percentages represent year-on-year changes)
Profit attributable to
Net sales
Operating income
Ordinary income
owners of parent
Million yen%
Million yen%
Million yen% Million yen%
Fiscal year ended Mar. 31, 2018
15,630
9.9
741
29.9
785
25.8
579
41.0
Fiscal year ended Mar. 31, 2017
14,223
20.3
571
42.2
623
41.4
410
40.7
Note: Comprehensive income (million yen) Fiscal year ended Mar. 31, 2018:
637 (up 48.2 %)Fiscal year ended Mar. 31, 2017:
430 (up 124.1 %)Net income per
Diluted net
Ordinary income Operating income
Return on equity
share
income per shareon total assets
to net sales
Yen
Yen
%
%
%
Fiscal year ended Mar. 31, 2018110.36
9.7
7.0
4.7
Fiscal year ended Mar. 31, 2017
78.26
7.4
6.5
4.0
Reference: Equity in earnings of affiliates (million yen): Fiscal year ended Mar. 31, 2018: Fiscal year ended Mar. 31, 2017: (2) Consolidated financial position
Total assets
Net assets
Million yen
Million yen
As of Mar. 31, 201812,3086,246
As of Mar. 31, 201710,281
5,741
Reference: Shareholders’ equity (million yen)
As of Mar. 31, 2018:
6,200

Equity ratio
%
50.4
55.4
As of Mar. 31, 2017:

Net assets per shareYen
1,181.54
1,084.74
5,692(3) Consolidated cash flows
Cash flows fromoperating activities
Million yen
642
132

Fiscal year ended Mar. 31, 2018
Fiscal year ended Mar. 31, 2017

Cash flows frominvesting activities
Million yen
147
494

Cash flows fromfinancing activities
Million yen
38
(122)

Cash and cash equivalents
at end of period
Million yen
2,785
1,951

2. Dividends
Dividend per share
1Q-end2Q-end3Q-endYear-end

Total
dividends

Total

Yen
Yen
Yen
Yen
Yen
Fiscal year ended Mar. 31, 2017
0.00
25.00
25.00
Fiscal year ended Mar. 31, 2018
0.00
28.00
28.00
Fiscal year ending Mar. 31, 2019
0.00
28.00
28.00
(forecasts)
Note: Breakdown of the year-end dividend for the fiscal year ended March 31, 2018:
Ordinary dividend: 25.00 yen; Commemorative dividend: 3.00 yen

Million yen
131
146

Dividend on
equity(consolidated)
%
%
31.9
2.4
25.4
2.5

Payout ratio(consolidated)

25.1

3. Consolidated Earnings Forecasts for the Fiscal Year Ending March 31, 2019 (April 1, 2018 – March 31, 2019)
Net sales
Full year

Million yen
15,765

Operating income%
0.9

Million yen
865

%
16.7

Ordinary income
Million yen
875

%
11.4

(Percentages represent year-on-year changes)
Profit attributable to
Net income perowners of parent
shareMillion yen
%
Yen
585
1.0
111.47

* Notes(1) Changes in consolidated subsidiaries during the period (changes in scope of consolidation): None
Newly added: -Excluded: -(2) Changes in accounting policies and accounting-based estimates, and restatements
1) Changes in accounting policies due to revisions in accounting standards, others:None2) Changes in accounting policies other than 1) above:None3) Changes in accounting-based estimates:

None4) Restatements:

None

Please refer to “Notes to Consolidated Financial Statements” for further information.

(3) Number of outstanding shares (common shares)
1) Number of shares outstanding at the end of the period (including treasury shares)
As of Mar. 31, 2018:

5,612,230 shares

As of Mar. 31, 2017:

5,612,230 shares

As of Mar. 31, 2017:364,210 shares

2) Number of treasury shares at the end of the period
As of Mar. 31, 2018:364,210 shares

3) Average number of shares outstanding during the period
Fiscal year ended Mar. 31, 2018:

5,248,020 sharesFiscal year ended Mar. 31, 2017:

5,248,020 shares

Reference: Summary of Non-consolidated Financial Results
1. Non-consolidated Financial Results for the Fiscal Year Ended March 31, 2018 (April 1, 2017 – March 31, 2018)(1) Non-consolidated results of operations
Net sales
Million yen%
12,7095.2
12,085
18.9

Fiscal year ended Mar. 31, 2018
Fiscal year ended Mar. 31, 2017

Operating income
Million yen
%
653
22.3
534
28.9

(Percentages represent year-on-year changes)
Ordinary income
ProfitMillion yen% Million yen
%
698
22.4
495
28.7
570
30.3
385
33.3

Diluted net income per
share
Yen
Yen
94.46
73.39
-

Net income per share
Fiscal year ended Mar. 31, 2018
Fiscal year ended Mar. 31, 2017
(2) Non-consolidated financial position

Total assets
Net assets
Million yen
Million yen
As of Mar. 31, 2018
6,344
10,131
As of Mar. 31, 2017
9,515
5,939
Reference: Shareholders’ equity (million yen)
As of Mar. 31, 2018:
6,344

Equity ratio
%
62.6
62.4
As of Mar. 31, 2017:

Net assets per shareYen
1,208.95
1,131.79
5,939

Note 1: The current financial report is not subject to audit by certified public accountants or auditing firms.
Note 2: Cautionary statement with respect to forward-looking statements
Forecasts of future performance in these materials are based on assumption judged to be valid and information available to theCompany’s management at the time the materials were prepared, but are not promises by the Company regarding future
performance. Actual results may differ materially from the forecasts. Please refer to “1. Overview of Results of Operations, (4)Outlook” on page 3 for forecast assumptions and notes of caution for usage.

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/18

Contents of Attachments

1. Overview of Results of Operations

2(1) Results of Operations

2(2) Financial Position

2(3) Cash Flows3(4) Outlook

3

2. Basic Approach to the Selection of Accounting Standards

4

3. Consolidated Financial Statements and Notes

5(1) Consolidated Balance Sheet

5(2) Consolidated Statements of Income and Comprehensive Income

7

Consolidated Statement of Income

7

Consolidated Statement of Comprehensive Income

8(3) Consolidated Statement of Changes in Equity

9(4) Consolidated Statement of Cash Flows

11(5) Notes to Consolidated Financial Statements

12

Going Concern Assumption

12

Reclassifications

12

Segment and Other Information

12Per-share Information

14

Subsequent Events

14

1

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/18

1. Overview of Results of Operations(1) Results of Operations
In the fiscal year ended on March 31, 2018, the Japanese economy continued to recover at a moderate pacedespite the continuation of geopolitical risk in eastern Asia. The recovery was supported by improvements incorporate profits, the number of jobs and personal income due to the benefits of economic initiatives by theJapanese government.
In the IT industry in Japan, according to the latest statistics in the “Survey of Selected Service Industries” by the
Ministry of Economy, Trade and Industry (the final February figures), net sales continued to climb, rising 2.5%
year on year in Fiscal 2017 (compared with 1.3% annual growth in Fiscal 2016). Despite the higher sales, theoutlook for the IT industry is uncertain because there were some months in fiscal 2017 when sales were lower
than one year earlier.
Consolidated sales and earnings of the Japan System Techniques Group (Japan System Techniques Co., Ltd. andits consolidated subsidiaries, hereafter “the Group”) in the current fiscal year increased as follows: net sales of
15,630 million yen (up 9.9% year on year), operating income of 741 million yen (up 29.9% year on year),ordinary income of 785 million yen (up 25.8% year on year), and profit attributable to owners of parent of 579
million yen (up 41.0% year on year). Results by segment were as follows.
In the software business (individualized contracted software development), sales for the manufacturing industry
and the telecommunications industry increased while there was a decrease in sales for the service/retail industry,finance/insurance/brokerage industry and public sector. Net sales in this business totaled 10,584 million yen (up5.2% year on year) and operating income was 448 million yen (up 13.8% year on year).
In the package business (sale and related services of operational reform packages for schools), there was anincrease in sales of highly profitable items including, implementation support and program products (PP) sales
and maintenance to universities, while IT equipment sales and end user computing (EUC: individualized
contracted development of related systems) sales declined. Net sales in this business totaled 2,254 million yen(down 0.9% year on year) and operating income was 254 million yen (up 16.4% year on year).
In the system sales business (IT equipment sales and IT/telecom infrastructure construction), sales in theuniversities and public sectors increased. Net sales in this business totaled 1,816 million yen (up 62.7% year onyear), and operating income was 46 million yen (up 601.0% year on year).
Lastly, in the medical big data business (inspection, analysis and related services of medical information), newly
introduced cloud services for health insurance claims at local governments performed well. Net sales in thisbusiness totaled 974 million yen (up 25.9% year on year), and operating loss totaled 12 million yen (vs. operating
loss of 45 million yen in the previous fiscal year).
(2) Financial Position
The balance of current assets at the end of the current fiscal year was 9,743 million yen, up 25.7% over the end of
the previous fiscal year. This was mainly due to increases in cash and deposits, notes and accounts
receivable-trade from higher sales at the end of fiscal year and purchased products at the end of fiscal year. Thebalance of non-current assets was 2,565 million yen at the end of the current fiscal year, up 1.4% over the end of
the previous fiscal year.
The balance of current liabilities at the end of the current fiscal year was 4,564 million yen, up 48.3% over theend of the previous fiscal year. This was mainly due to increases in notes and accounts payable-trade, advances
received and short-term loans payable. The balance of non-current liabilities was 1,498 million yen at the end of
the current fiscal year, up 2.5% over the end of the previous fiscal year.
The balance of total net assets was 6,246 million yen at the end of the current fiscal year, up 8.8% over the end of
the previous fiscal year. This was mainly due to increases in retained earnings and valuation difference on
available-for-sale securities.

2

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/18(3) Cash Flows
Cash and cash equivalents increased 833 million yen from 1,951 million yen at the beginning of the current fiscal
year to 2,785 million yen at the end of the current fiscal year.
Cash flows by category were as follows.
Cash flows provided by operating activities totaled 642 million yen, compared with 132 million yen provided in
the previous fiscal year. This difference was mainly due to increases in inventories and proceeds from collectionof notes and accounts payable-trade and notes and accounts receivable-trade.
Cash flows provided by investing activities totaled 147 million yen, compared with 494 million yen provided in
the previous fiscal year. This difference was mainly due to a decrease in proceeds from withdrawal of time
deposits.
Cash flows used in financing activities totaled 38 million yen, compared with 122 million yen used in theprevious fiscal year. This difference was mainly due to an increase in short-term loans payable.
Reference: Cash flow indicators
FY3/14

FY3/15

FY3/16

FY3/17

FY3/18Equity ratio (%)

56.6

61.4

59.8

55.4

50.4

Equity ratio based on market value (%)

39.0

50.0

38.6

50.0

56.4

Interest-bearing debt to cash flow ratio (years)

0.0

-

-

0.5

0.4

Interest coverage ratio (times)
228.6
78.0
431.8
Notes: 1. The above figures are calculated as follows.
Equity ratio: Shareholders’ equity / Total assets
Equity ratio based on market value: Market capitalization / Total assets
Interest-bearing debt to cash flow ratio: Interest-bearing debt / Operating cash flows
Interest coverage ratio: Operating cash flows / Interest payments* Market capitalization is calculated by multiplying the closing share price at the end of the period by the numberof shares outstanding at the end of the period, excluding treasury shares.
* Interest-bearing debt is calculated using total loans-payable on the consolidated balance sheet.
* Interest payments use the amount of interest expenses paid stated on the consolidated statement of cash flows.
2. There are no average debt repayment period and interest coverage ratio figures for FY3/15 and FY3/16 because
the Company had negative operating cash flows.

(4) Outlook
In the current uncertain global economy, and particularly in the IT industry where the environment is extremely
volatile, Japan System Techniques Co., Ltd. (JAST) understands that it will be difficult to achieve growth if it
remains overly dependent on contract development, the IT industry’s mainstay source of earnings to date.
Based on this understanding, the Group has formulated the “JAST Vision 2020” to define basic medium- tolong-term management policies with targets for fiscal 2020. This vision sets forth the type of organization wewant to become, including goals for the corporate image, brand image, business fields, the size of our operations
and other items. Group companies will be using many actions in order to accomplish the goals of this vision.
As part of these actions, the Group has selected “Focus on challenges and speed to accomplish JAST Vision
2020” as the slogan for the fiscal year ending March 31, 2019. We will be making changes and enacting reforms
even faster during the fiscal year concerning development operations, sales techniques, internal administrative
procedures and all other aspects of our operations. We are determined to achieve the goals of every department
and person in our Group. As a result, we aim to expand scale of projects and enhance profitability andproductivity in the contracted development business, as well as to achieve sustained growth by further expanding
JAST-driven business centering on proprietary brand products. In addition, we will use R&D activities making
extensive use of advanced technologies to create products that can be successors to our current products. Other
goals in order to achieve sustained growth are reinforcing our overseas sales strategy for our own brand andincreasing the use of alliances and M&A.
3

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/18

Based on this outlook, we expect increases in sales and profits in the fiscal year ending March 31, 2019. We
forecast net sales of 15,765 million yen (up 0.9% year on year), operating income of 865 million yen (up 16.7%
year on year), ordinary income of 875 million yen (up 11.4% year on year), and profit attributable to owners ofparent of 585 million yen (up 1.0% year on year).
2. Basic Approach to the Selection of Accounting Standards
The Group will continue to prepare consolidated financial statements using generally accepted accounting
principles in Japan for the time being to permit comparisons with prior years and with the financial data of othercompanies.
We will take suitable actions with regard to the application of International Financial Reporting Standards (IFRS)
by taking into account associated factors in Japan and other countries.

4

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/18

3. Consolidated Financial Statements and Notes(1) Consolidated Balance Sheet
FY3/17(As of Mar. 31, 2017)(Thousands of yen)
FY3/18(As of Mar. 31, 2018)

AssetsCurrent assets
Cash and deposits

2,365,633

2,994,700

Notes and accounts receivable-trade

4,374,348

4,991,576

Merchandise and finished goods

86,509576,412Work in process

505,244711,654

3,317

2,272

Deferred tax assets

270,257

302,145

Other

149,426

201,206

Allowance for doubtful accounts(3,858)(36,900)

7,750,879

9,743,067

669,615

657,805(347,533)(375,281)

322,081282,523

142,361

142,361

Raw materials and supplies

Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation
Buildings and structures, net
Land
Other

375,955

381,968(241,349)(283,798)

134,606

98,170599,049

523,055

Goodwill

40,491

29,434

Software109,996

86,997

7,626

7,626

158,114124,058

Investment securities

625,020705,240

Net defined benefit asset

479,037

535,482

Deferred tax assets

76,56087,207

Guarantee deposits

376,763

390,110

Other

260,605

245,123

Accumulated depreciation
Other, net
Total property, plant and equipment
Intangible assets

Other
Total intangible assets
Investments and other assets

Allowance for doubtful accounts(44,649)(44,609)

Total investments and other assets

1,773,336

1,918,553

2,530,500

2,565,667

10,281,379

12,308,734

Total non-current assets
Total assets

5Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/18

FY3/17(As of Mar. 31, 2017)(Thousands of yen)
FY3/18(As of Mar. 31, 2018)

Liabilities
Current liabilities
Notes and accounts payable-trade
Short-term loans payable
Current portion of long-term loans payable

1,122,286

2,040,633

26,678

218,592

8,400

8,400

Income taxes payable

281,537

271,702

Provision for bonuses

615,341

638,152

Provision for directors’ bonuses

29,17429,087

Provision for loss on construction contracts

1,561

-

Advances received

394,181652,455

Other

599,140

705,120

3,078,301

4,564,144

Long-term loans payable

28,00020,300

Provision for directors’ retirement benefits

413,048426,250

Net defined benefit liability

870,683

920,209

Total current liabilities
Non-current liabilities

Other

150,188

131,268

1,461,920

1,498,027

4,540,222

6,062,172

Capital stock

1,076,669

1,076,669

Capital surplus

994,621994,621

Retained earnings

3,740,158

4,188,119

Treasury shares(266,539)(266,539)

Total shareholders’ equity

5,544,909

5,992,871

85,686

126,589

Foreign currency translation adjustment(13,063)(10,428)

Remeasurements of defined benefit plans

75,227

91,694

Total accumulated other comprehensive income

147,850

207,856

Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity

Accumulated other comprehensive income
Valuation difference on available-for-sale securities

Non-controlling interests
Total net assets
Total liabilities and net assets

6

48,39645,8355,741,157

6,246,562

10,281,379

12,308,734

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/18(2) Consolidated Statements of Income and Comprehensive Income
Consolidated Statement of Income(Thousands of yen)
FY3/17
FY3/18(Apr. 1, 2016 – Mar. 31, 2017) (Apr. 1, 2017 – Mar. 31, 2018)
Net sales

14,223,330

15,630,284

Cost of sales

11,287,537

12,284,883

Gross profit

2,935,792

3,345,400

Selling, general and administrative expenses

2,364,749

2,603,877

571,043

741,522

Interest income

6,140

5,578

Dividend income

5,942

6,108

Rent income

13,844

13,099Compensation income

15,107-

Commission fee

1,718

1,652

Insurance premiums refunded cancellation

-

5,226

Foreign exchange gains

-

1,986

Subsidy income

16,81517,802

Other

10,622

4,924

Total non-operating income

70,191

56,379

1,583

1,469

Operating income
Non-operating income

Non-operating expenses
Interest expenses
Foreign exchange losses

2,176

-

Rent expenses

11,824

8,012

Other

1,698

3,216

Total non-operating expenses

17,282

12,698623,952785,203

Impairment loss

-

6,688

Total extraordinary losses

-

6,688

Profit before income taxes

623,952

778,515

Income taxes-current

291,138

271,766

Income taxes-deferred(78,280)(67,885)

Total income taxes

212,858

203,880

Profit411,094

574,634376(4,527)

410,717579,161

Ordinary income
Extraordinary losses

Profit (loss) attributable to non-controlling interests
Profit attributable to owners of parent

7

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/18

Consolidated Statement of Comprehensive Income
FY3/17(Apr. 1, 2016 – Mar. 31, 2017)(Thousands of yen)
FY3/18(Apr. 1, 2017 – Mar. 31, 2018)

411,094

574,634

34,71940,903

ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Total other comprehensive income
Comprehensive income

(493)

5,365

(15,172)

16,466

19,05362,736430,147

637,370

431,554

639,167(1,406)(1,796)Comprehensive income attributable to:Comprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests

8

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/18(3) Consolidated Statement of Changes in Equity
FY3/17 (Apr. 1, 2016 – Mar. 31, 2017)(Thousands of yen)
Shareholders’ equity
Capital stock
Balance at beginning ofcurrent period
Changes of items during
periodCapital surplus

1,076,669

Retained earnings

998,790

3,460,641

Dividends of surplus
Profit attributable toowners of parent
Change in ownershipinterest of parent due totransactions with
non-controlling interests
Net changes of items otherthan shareholders’ equity
Total changes of items
during period
Balance at end of current
periodTotal shareholders’equityTreasury shares(266,539)

5,269,562(131,200)(131,200)

410,717

410,717(4,169)(4,169)-(4,169)279,516-

275,347

1,076,669

994,6213,740,158(266,539)

5,544,909

Accumulated other comprehensive income

Balance at beginning ofcurrent period
Changes of items during
periodValuationdifference on
available-for-salesecurities

Foreigncurrencytranslation
adjustment

50,966(14,352)

Total
Remeasurements
accumulated Non-controllinginterestsof defined benefit
other
plans
comprehensive
income90,400127,01351,875

Dividends of surplus
Profit attributable toowners of parent
Change in ownershipinterest of parent due totransactions with
non-controlling interests
Net changes of items otherthan shareholders’ equity
Total changes of items
during period
Balance at end of current
periodTotal net assets

5,448,452(131,200)
410,717(4,169)34,7191,289(15,172)

20,837(3,478)17,35834,7191,289(15,172)

20,837(3,478)292,705

85,686(13,063)

75,227

147,850

48,396

5,741,157

9

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/18

FY3/18 (Apr. 1, 2017 – Mar. 31, 2018)(Thousands of yen)
Shareholders’ equity
Capital stock
Balance at beginning ofcurrent period
Changes of items during
periodCapital surplus

1,076,669

Retained earnings

994,6213,740,158

Dividends of surplus
Profit attributable toowners of parent
Change in ownershipinterest of parent due totransactions with
non-controlling interests
Net changes of items otherthan shareholders’ equity
Total changes of items
during period
Balance at end of current
periodTotal shareholders’equityTreasury shares(266,539)

5,544,909(131,200)(131,200)

579,161

579,161--

447,961-

447,961

1,076,669

994,621

4,188,119(266,539)

5,992,871

Accumulated other comprehensive income

Balance at beginning ofcurrent period
Changes of items during
periodValuationdifference on
available-for-salesecurities

Foreigncurrencytranslation
adjustment

85,686(13,063)

Total
Remeasurements
accumulated Non-controllinginterestsof defined benefit
other
plans
comprehensive
income75,227

147,850

48,396

Dividends of surplus
Profit attributable toowners of parent
Change in ownershipinterest of parent due totransactions with
non-controlling interests
Net changes of items otherthan shareholders’ equity
Total changes of items
during period
Balance at end of current
periodTotal net assets

5,741,157(131,200)
579,161

40,903

2,635

16,46660,005(2,561)

57,44440,903

2,635

16,46660,005(2,561)

505,405

126,589

10,42891,694

207,856

45,835

6,246,562

10

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/18(4) Consolidated Statement of Cash Flows(Thousands of yen)
FY3/18
FY3/17(Apr. 1, 2016 – Mar. 31, 2017) (Apr. 1, 2017 – Mar. 31, 2018)
Cash flows from operating activities
Profit before income taxes

623,952

778,515

Depreciation

87,631103,097

Amortization of software

38,25742,778-

6,688

Impairment loss
Amortization of goodwill

14,793

11,057

Increase (decrease) in provision for bonuses

191,434

22,701

Decrease (increase) in net defined benefit asset(31,610)(56,445)

Increase (decrease) in net defined benefit liability

70,122

48,704

Interest and dividend income(12,082)(11,687)

Compensation income(15,107)

-

1,583

1,469

(901,382)(583,009)

Interest expenses
Decrease (increase) in notes and accounts receivable-trade
Increase (decrease) in advances received

152,612

239,066(185,304)(695,079)

Increase (decrease) in notes and accounts payable-trade186,408

918,322

Other, net

28,962

76,469Subtotal

250,270902,649

Interest and dividend income received

13,564

12,811

Decrease (increase) in inventories

Interest expenses paid

(1,700)(1,488)(144,722)(271,013)

Proceeds from compensation

15,107-

Net cash provided by (used in) operating activities

132,520642,959

Income taxes paid

Cash flows from investing activities
Decrease (increase) in time deposits

672,825

208,092

Purchase of property, plant and equipment(137,295)(21,566)

Purchase of software(12,860)(27,205)

Proceeds from sales of real estate for rent-

10,385(1,971)(32,167)

Proceeds from cancellation of insurance funds-

12,275

Proceeds from sales of investment securities
Purchase of shares of subsidiaries resulting in change inscope of consolidation
Payments for guarantee deposits

-

9,260

(26,827)-(651)(24,663)-

13,814799(805)

494,018

147,418

Purchase of investment securities

Proceeds from collection of guarantee deposits
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Net increase (decrease) in short-term loans payable

26,678

190,736

Repayments of lease obligations(11,151)(12,232)

Proceeds from long-term loans payable

42,000-

Repayments of long-term loans payable(48,035)(7,700)Cash dividends paid

(131,200)(131,200)

Dividends paid to non-controlling interests
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents(1,164)(764)(122,873)

38,838298

4,518

Net increase (decrease) in cash and cash equivalents

503,965

833,735

Cash and cash equivalents at beginning of period

1,447,493

1,951,458

Cash and cash equivalents at end of period

1,951,458

2,785,19311

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/18(5) Notes to Consolidated Financial Statements
Going Concern Assumption
Not applicable.

Reclassifications
Consolidated Balance Sheet“Advances received,” included in “Other” under current liabilities in the previous fiscal year, is reclassified and presented asa separate line item in the current fiscal year since it has increased materiality in the context of financial statements. The
prior-period consolidated financial statements are restated to conform to the current-period presentation.
“Other” under current liabilities (993,321 thousand yen) shown in the prior-period consolidated statement of income isreclassified and divided into “Advances received” (394,181 thousand yen) and “Other” (599,140 thousand yen).

Segment and Other Information
Segment information
1. Overview of reportable segment
Segments used for financial reporting are the Company and subsidiaries’ constituent units for which separate financial
information is available and for which the Board of Directors performs periodic studies for the purposes of determining theallocation of resources and evaluating performance.
The Group has four reportable business segments: software business, package business, system sales business and medical
big data business each of which conducts its business in line with the comprehensive strategy it has devised for products andservices in both domestic and overseas markets.
The software business handles the contracted software development. The package business is engaged in development, sale,and provision of related services of operational reform packages for schools. The system sales business conducts IT
equipment sales, IT/telecom infrastructure construction. The medical big data business provides a full line of services
including automated inspection services for health insurance claims, data analysis and notification of the cost of medical care.
2. Calculation method for net sales, profit or loss, assets, liabilities, and other items for each reportable segment
The accounting method used for reportable business segments is generally the same as the methods listed in “Significant
Accounting Policies in the Preparation of Consolidated Financial Statements.”
Profits for reportable business segments are operating income figures.
Inter-segment sales and transfers are based on market prices.
3. Information related to net sales, profit or loss, assets, liabilities, and other items for each reportable segment
FY3/17 (Apr. 1, 2016 – Mar. 31, 2017)(Thousands of yen)

Softwarebusiness

Packagebusiness

Systemsales
business

10,058,212

2,274,452

1,116,485

88,843-

128,039

10,147,056

2,274,452

1,244,525

Medicalbig data
business

774,179 14,223,330

Total

Amounts shown
Adjustment on consolidated(Note 1)
financial(Note 2)statements(Note 3)

Net sales
1. External sales
2. Inter-segment sales andtransfers
Total
Segment profit (loss)
Segment assets-

14,223,330

216,883(216,883)-

774,179 14,440,213(216,883)

14,223,330-

394,092

218,9396,578(45,567)

574,042(2,998)571,0435,629,282

1,450,745

1,123,729

422,747

8,626,504

1,654,875

10,281,379

81,76921,425

4,481

15,317

122,994-

122,994

85,884

41,415

1,746

12,914

141,960

18,960160,921

Other items
Depreciation
Increase in property, plantand equipment and intangible
assets12Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/18

Notes:

1. Segment profit (loss) in the above adjustment represents eliminations for inter-segment transactions.
2. Segment assets in the above adjustment consist mainly of corporate assets that cannot be attributed to any of thereportable segments.
3. Segment profit (loss) is adjusted with operating income shown on the consolidated statement of income.

FY3/18 (Apr. 1, 2017 – Mar. 31, 2018)(Thousands of yen)

Softwarebusiness

Packagebusiness

Systemsales
business

10,584,499

2,254,674

1,816,591

64,152

7,691

24,22010,648,651

2,262,365

1,840,812

448,413254,779

46,1155,872,256

1,656,469

2,451,669

Medicalbig data
business

974,518 15,630,284

Total

Amounts shown
Adjustment on consolidated(Note 1)
financial(Note 2)statements(Note 3)

Net sales
1. External sales
2. Inter-segment sales andtransfers
Total
Segment profit (loss)
Segment assets-

15,630,284

96,064(96,064)-

974,518 15,726,348(96,064)

15,630,284

736,8024,720

741,522545,412 10,525,807

1,782,927

12,308,734-(12,506)

Other items
Depreciation
95,91225,153
3,189
18,838143,093
143,093
Increase in property, plantand equipment and intangible
30,434
6,837
1,808
7,764
46,845
14,15961,004assets
Notes:
1. Segment profit (loss) in the above adjustment represents eliminations for inter-segment transactions.
2. Segment assets in the above adjustment consist mainly of corporate assets that cannot be attributed to any of thereportable segments.
3. Segment profit (loss) is adjusted with operating income shown on the consolidated statement of income.
Related information
1. Information by product or service
This information is omitted because the same information is presented in segment information.
2. Information by region(1) Net sales
Geographical information concerning sales to external customers in Japan is not presented since sales to externalcustomers exceeded 90% of net sales shown on the consolidated statement of income.
(2) Property, plant and equipment
Geographical information concerning property, plant and equipment is not presented since property, plant and equipment
in Japan exceed 90% of property, plant and equipment on the consolidated balance sheet.
3. Information by major client
FY3/17 (Apr. 1, 2016 – Mar. 31, 2017)
Company name
NTT COMWARE CORPORATIONNet sales

Business segment

1,468,452 thousand yen

Software businessNet sales

Business segment

1,369,670 thousand yen

Software business

FY3/18 (Apr. 1, 2017 – Mar. 31, 2018)
Company name
NTT COMWARE CORPORATION

Information related to impairment loss of non-current assets for each reportable segment
Not applicable.

13

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/18

Information related to goodwill amortization and the unamortized balance for each reportable segment
FY3/17 (Apr. 1, 2016 – Mar. 31, 2017)
Softwarebusiness

Packagebusiness

System sales
business(Thousands of yen)
Elimination or
Total
corporate

Medical big
data business

Amortization for the period

14,793----

14,793

Balance at the end of period

40,491----40,491

FY3/18 (Apr. 1, 2017 – Mar. 31, 2018)
Softwarebusiness

Packagebusiness

System sales
business(Thousands of yen)
Elimination or
Total
corporate

Medical big
data business

Amortization for the period

11,057----

11,057

Balance at the end of period

29,434----29,434

Information related to gain on bargain purchase for each reportable segment
Not applicable.

Per-share Information
FY3/17(Apr. 1, 2016 – Mar. 31, 2017)(Yen)
FY3/18(Apr. 1, 2017 – Mar. 31, 2018)

Net assets per share

1,084.74

1,181.54

Net income per share

78.26

110.36

Notes: 1. Diluted net income per share is not presented since the Company has no outstanding dilutive securities.
2. The basis of calculation is as follows.
(Thousands of yen)
FY3/17
FY3/18(As of Mar. 31, 2017)(As of Mar. 31, 2018)
Net assets per share
Total net assets on balance sheet
Deduction on total net assets

5,741,157

6,246,562

48,39645,835[Non-controlling interests][48,396][45,835]

Net assets applicable to common shares

5,692,760

6,200,727

5,248,020 shares

5,248,020 shares

FY3/17(Apr. 1, 2016 – Mar. 31, 2017)(Thousands of yen)
FY3/18(Apr. 1, 2017 – Mar. 31, 2018)

410,717579,161

Number of common shares used in calculation of net
assets per share

Net income per share
Profit attributable to owners of parent--

Profit attributable to owners of parent applicable tocommon shares

410,717579,161

Average number of shares outstanding during period

5,248,020 shares

5,248,020 shares

Amount not available to common shareholders

Subsequent Events
Not applicable.
This financial report is solely a translation of “Kessan Tanshin” (in Japanese, including attachments), which has been
prepared in accordance with accounting principles and practices generally accepted in Japan, for the convenience of readers
who prefer an English translation.

14