February 10, 2021

Summary of Consolidated Financial Results
for the Third Quarter of Fiscal Year Ending March 31, 2021
(Nine Months Ended December 31, 2020)[Japanese GAAP]
Listing: Tokyo Stock Exchange, First Section
Company name: Japan System Techniques Co., Ltd.
4323
URL: https://www.jast.jp
Stock code:
Representative:
Takeaki Hirabayashi, President and CEO
Noboru Nishida, General Manager of General Administration Division
Contact:
Tel: +81-6-4560-1000
Scheduled date of filing of Quarterly Report:
February 12, 2021
Scheduled date of payment of dividend:
Preparation of supplementary materials for quarterly financial results:
None
Holding of quarterly financial results meeting:
None
Note: The original disclosure in Japanese was released on February 10, 2021 at 16:00 (GMT +9).
(All amounts are rounded down to the nearest million yen)

1. Consolidated Financial Results for the Third Quarter Ended December 31, 2020
(April 1, 2020 – December 31, 2020)(1) Consolidated results of operations(Percentages represent year-on-year changes)
Net sales

Operating income

Ordinary income

Million yen%
Million yen%
Million yen
Nine months ended Dec. 31, 2020
12,142(3.0)
86 (39.2)
144
Nine months ended Dec. 31, 20196.7
12,512141 (43.7)
186
Note: Comprehensive income (million yen) Nine months ended Dec. 31, 2020: (193) (-%)
Nine months ended Dec. 31, 2019: (637) (-%)%
(22.2)(26.4)

Profit attributable toowners of parent
Million yen
%
(246)
(584)

Diluted net income per
share
Yen
Yen
(45.94)(109.94)-

Net income per share
Nine months ended Dec. 31, 2020
Nine months ended Dec. 31, 2019(2) Consolidated financial position
Total assets
Net assets
Million yen
Million yen
As of Dec. 31, 2020
11,403
5,873
As of Mar. 31, 2020
12,988
6,218
Reference: Shareholders’ equity (million yen)
As of Dec. 31, 2020:
5,838

Equity ratio
%
51.2
47.7
As of Mar. 31, 2020:

Net assets per share
Yen
1,088.85
1,154.07
6,189

2. Dividends
1Q-endYen-

Fiscal year ended Mar. 31, 2020
Fiscal year ending Mar. 31, 2021
Fiscal year ending Mar. 31, 2021 (forecasts)
Note: Revisions to the most recently announced dividend forecast: None

Dividend per share
2Q-end3Q-endYear-end
Yen
Yen
Yen
0.00
28.00
0.00
28.00

Total
Yen
28.00
28.00

3. Consolidated Earnings Forecasts for the Fiscal Year Ending March 31, 2021 (April 1, 2020 – March 31, 2021)
Net sales
Million yen

Operating income%

Million yen(Percentages represent year-on-year changes)
Profit attributable to
Net income per shareowners of parent

Ordinary income%

Million yen%

Yen

Full year
18,500
2.7
980
0.1
1,025
0.0
Note: Revisions to the most recently announced consolidated earnings forecasts: None%

Million yen

300

-

55.95

* Notes(1) Changes in consolidated subsidiaries during the period (changes in scope of consolidation): None
Newly added: -Excluded: -(2) Application of special accounting methods for presenting quarterly consolidated financial statements: None
(3) 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(4) Number of outstanding shares (common shares)
1) Number of shares outstanding at the end of the period (including treasury shares)
As of Dec. 31, 2020:

5,612,230 shares

As of Mar. 31, 2020:

5,612,230 shares

As of Mar. 31, 2020:

248,984 shares

2) Number of treasury shares at the end of the period
As of Dec. 31, 2020:

250,523 shares

3) Average number of shares outstanding during the period
Nine months ended Dec. 31, 2020:

5,362,125 shares

Nine months ended Dec. 31, 2019:

5,311,874 shares

Note 1: The current quarterly summary report is not subject to quarterly review 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. Qualitative Information on Quarterly
Consolidated Financial Performance, (3) Explanation of Consolidated Forecasts and Other Forward-looking Statements” on page 3
for forecast assumptions and notes of caution for usage.

Japan System Techniques Co., Ltd. (4323) Financial Results for the Third Quarter of FY3/21

Contents of Attachments
1. Qualitative Information on Quarterly Consolidated Financial Performance2(1) Explanation of Results of Operations

2(2) Explanation of Financial Position

3(3) Explanation of Consolidated Forecasts and Other Forward-looking Statements

3

2. Quarterly Consolidated Financial Statements and Notes

4(1) Quarterly Consolidated Balance Sheet

4(2) Quarterly Consolidated Statements of Income and Comprehensive Income

6

Quarterly Consolidated Statement of Income
For the Nine-month Period

6

Quarterly Consolidated Statement of Comprehensive Income
For the Nine-month Period7(3) Quarterly Consolidated Statement of Cash Flows

8(4) Notes to Quarterly Consolidated Financial Statements

9

Going Concern Assumption

9

Significant Changes in Shareholders’ Equity

9

Additional Information

9

Segment and Other Information

10

Business Combinations

11

1

Japan System Techniques Co., Ltd. (4323) Financial Results for the Third Quarter of FY3/21

1. Qualitative Information on Quarterly Consolidated Financial Performance(1) Explanation of Results of Operations
In the first nine months of the current fiscal year, COVID-19 had a severe impact on consumer spending,corporate activities and many other categories of the economy, resulting in sharp downturn of the Japanese
economy. This crisis is still limiting a broad range of activities, particularly due to the state of emergency in manylarge cities. Furthermore, there are still no signs of an end to this crisis and the business environment continues tobe challenging.
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 November figures), net sales continued to climb, rising 4.0%
year on year in fiscal 2019 compared with 1.5% annual growth in fiscal 2018. However, due to the current
increase in the impact of COVID-19 and other reasons, monthly sales have decreased from one year earlier for
four consecutive months since August 2020. Moreover, the outlook for the IT industry is extremely uncertain.
COVID-19 had a negative effect on the Japan Systems Techniques Group (Japan System Techniq ues Co., Ltd.
(JAST) and its consolidated subsidiaries). Nevertheless, the receipt of new orders remained steady due to the useof the internet for sales activities and for other reasons and the workforce utilization rate was steady because of
teleworking. Net sales in the first nine months were 12,142 million yen (down 3.0% year on year), operating
income was 86 million yen (down 39.2% year on year), ordinary income was 144 million yen (down 22.2% year
on year), and there was a loss attributable to owners of parent of 246 million yen (vs. loss of 584 million yen in
the same period of the previous fiscal year) due to an impairment loss of 313 million yen as an extraordinary loss.
Business segment performance was as follows.
In the software business (individualized contracted software development), there was an increase in orders fromthe finance/insurance/brokerage industry and the manufacturing and telecommunications industries but orders
from the service/retail industries and educational institutions decreased. As a result, net sales in this businesstotaled 8,593 million yen (down 2.1% year on year) and the operating loss was 122 million yen (vs. an operating
loss of 102 million yen in the same period of the previous fiscal year).
In the GAKUEN business (development, sale and related services of operational reform packages for schools),
there was an increase in sales of program products (PP) to universities and of maintenance services but IT
equipment sales and end user computing (EUC: individualized contracted development of related systems) sales
decreased. Net sales in this business totaled 1,690 million yen (down 5.0% year on year) and the operating
income was 135 million yen (down 10.6% year on year).
In the system sales business (IT equipment sales and IT/telecom infrastructure construction), sales in the public
sector categories decreased. Net sales in this business totaled 1,031 million yen (down 13.6% year on year) andthe operating income was 111 million yen (down 10.4% year on year).
In the medical big data business (inspections, analysis and related services for medical information data), sales
were much higher mainly because of an increase in support services for health insurance organizations. However,R&D and other expenses increased. Net sales in this business totaled 827 million yen (up 8.5% year on year) andthe operating loss totaled 39 million yen (vs. an operating loss of 26 million yen in the same period of theprevious fiscal year).
Characteristics of quarterly performance
In the JAST Group’s software, GAKUEN and systems sales businesses, the delivery inspection period of mostcustomers is in March, the last month of the fiscal year for most companies, followed by September, the lastmonth of the second quarter. Consequently, first and third quarter earnings are usually much smaller than earnings
in the second and fourth quarters.

2

Japan System Techniques Co., Ltd. (4323) Financial Results for the Third Quarter of FY3/21(2) Explanation of Financial Position
1) Balance sheet
Current assets at the end of the third quarter were 8,428 million yen, down 1,174 million yen from the end of theprevious fiscal year. This was mainly due to a decrease in accounts receivable-trade and an increase in work inprocess. Non-current assets were 2,975 million yen, down 410 million yen from the end of the previous fiscal
year. This was mainly due to decreases in goodwill and customer-related assets.
Current liabilities at the end of the third quarter were 3,935 million yen, down 1,232 million yen from the end of
the previous fiscal year. This was mainly due to decreases in short-term borrowings, provision for bonuses andincome taxes payable, and an increase in advances received. Non-current liabilities were 1,595 million yen, down
6 million yen from the end of the previous fiscal year.
Net assets at the end of the third quarter were 5,873 million yen, down 345 million yen from the end of theprevious fiscal year.
2) Cash flows
Cash and cash equivalents increased 220 million yen from 3,908 million yen at the beginning of the current fiscal
year to 4,129 million yen at the end of the first nine months of the current fiscal year (vs. 4,308 million yen at theend of the same period of the previous fiscal year). Cash flows by category were as follows.
Net cash provided by operating activities totaled 1,001 million yen, an increase of 573 million yen from 428
million yen provided in the same period of the previous fiscal year. This increase was mainly due to a decrease inpayments of other payables, primarily accounts payable, and an increase in proceeds from the collection of tradereceivables.
Net cash provided by investing activities totaled 103 million yen, an increase of 533 million yen from 429 million
yen used in the same period of the previous fiscal year. This was due to a decrease in payment for the purchase ofshares of subsidiaries and proceeds from redemption of investment securities.
Net cash used in financing activities totaled 853 million yen, compared with 127 million yen provided in the same
period of the previous fiscal year. The decrease in cash flows of 980 million yen was mainly due to a decrease in
short-term borrowings.
(3) Explanation of Consolidated Forecasts and Other Forward-looking Statements
Results of operations in the first nine months are generally consistent with our initial plan for the fiscal year.
Consequently, there are no revisions to the November 10, 2020 forecasts for the fiscal year ending March 31,
2021: net sales of 18,500 million yen (up 2.7% year on year), operating income of 980 million yen (up 0.1% year
on year), ordinary income of 1,025 million yen (up 0.0% year on year), and profit attributable to owners of parentof 300 million yen (vs. loss attributable to owners of parent of 30 million yen in the previous fiscal year) .
These projections are based on information available at the time of release of this r eport. Actual results may differ
from projections due to a variety of factors.

3

Japan System Techniques Co., Ltd. (4323) Financial Results for the Third Quarter of FY3/21

2. Quarterly Consolidated Financial Statements and Notes(1) Quarterly Consolidated Balance Sheet
FY3/20(As of Mar. 31, 2020)(Thousands of yen)
Third quarter of FY3/21(As of Dec. 31, 2020)

AssetsCurrent assets
Cash and deposits

3,909,343

4,130,067

Notes and accounts receivable-trade

4,502,676

2,606,317

200,644-

Securities
Merchandise and finished goods

71,634

195,519

Work in process

698,017

1,316,527

Raw materials and supplies
Other
Allowance for doubtful accounts

1,516

2,150

238,579

190,129(19,471)(12,241)

9,602,941

8,428,471

763,597

780,542

Accumulated depreciation(462,594)(491,390)

Buildings and structures, net

301,002289,152

142,361

142,361

Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures

Land
Other

487,040

510,405

Accumulated depreciation(358,559)(386,931)

Other, net

128,480

123,473

571,845554,987

Goodwill

437,343

183,641

Customer-related assets

181,063

110,181

Trademark right

37,348

7,759

Technology assets

66,303

13,775

Software64,54567,277

Total property, plant and equipment
Intangible assets

Other

7,626

7,626

794,230

390,262

Investment securities

558,208

675,181Retirement benefit asset

465,943466,674

Deferred tax assets

436,814352,789

Guarantee deposits

443,489439,749

Other

162,906

110,679

Allowance for doubtful accounts(48,036)(15,098)

Total investments and other assets

2,019,325

2,029,975

Total intangible assets
Investments and other assets

Total non-current assets
Total assets

43,385,400

2,975,225

12,988,341

11,403,697

Japan System Techniques Co., Ltd. (4323) Financial Results for the Third Quarter of FY3/21(Thousands of yen)
Third quarter of FY3/21(As of Dec. 31, 2020)

FY3/20(As of Mar. 31, 2020)
Liabilities
Current liabilities
Notes and accounts payable-trade
Short-term borrowings
Current portion of long-term borrowings

990,491

810,748

1,500,000

807,734

8,400

5,600

Income taxes payable

307,068

36,839Advances received

823,126

975,994

Provision for bonuses
Provision for bonuses for directors (and otherofficers)
Provision for loss on construction contracts

774,631408,851

30,67623,479-17,065

Other
Total current liabilities

733,742849,295

5,168,137

3,935,606

2,800

-

47,64374,659

1,845

3,646

992,271

1,000,257

Non-current liabilities
Long-term borrowings
Provision for share-based remuneration for directors(and other officers)
Provision for retirement benefits for directors (andother officers)
Retirement benefit liability
Deferred tax liabilities

61,06233,430Other496,364

483,085

1,601,987

1,595,079

6,770,124

5,530,686

1,076,669

1,076,669

Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Share capital
Capital surplus

1,113,912

1,113,912

Retained earnings

4,178,503

3,780,668

Treasury shares(233,240)(233,303)

Total shareholders’ equity

6,135,844

5,737,946

Valuation difference on available-for-sale securities

113,396203,717

Foreign currency translation adjustment(30,713)(79,062)

Remeasurements of defined benefit plans(28,978)(24,501)

Total accumulated other comprehensive income

53,704

100,153

28,66834,9106,218,217

5,873,011

12,988,341

11,403,697

Accumulated other comprehensive income

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

5Japan System Techniques Co., Ltd. (4323) Financial Results for the Third Quarter of FY3/21(2) Quarterly Consolidated Statements of Income and Comprehensive Income
Quarterly Consolidated Statement of Income(For the Nine-month Period)First nine months of FY3/20(Apr. 1, 2019 – Dec. 31, 2019)(Thousands of yen)First nine months of FY3/21(Apr. 1, 2020 – Dec. 31, 2020)

Net sales

12,512,223

12,142,877

Cost of sales

9,826,555

9,515,273

Gross profit

2,685,667

2,627,603

Selling, general and administrative expenses

2,544,253

2,541,555

141,41386,048Interest income

10,316

14,357

Dividend income

6,777

6,867

Rental income

3,832

2,065

Operating income
Non-operating income

Foreign exchange gains

-

5,121

Subsidy income

22,70915,833

Other

13,555

17,890Total non-operating income

57,192

62,134

Interest expenses

3,107

2,591

Foreign exchange losses

6,978

-

Non-operating expenses

Rental expenses

135

133

Other

2,154

602

Total non-operating expenses

12,375

3,327

186,230

144,854715,904

313,252

Ordinary income
Extraordinary losses
Impairment loss
Loss on valuation of investment securities
Total extraordinary losses
Loss before income taxes
Income taxes
Loss
Profit (loss) attributable to non-controlling interests
Loss attributable to owners of parent

6-29,535715,904

342,788(529,673)(197,933)

61,63340,185(591,306)(238,118)(7,298)8,206(584,008)(246,325)

Japan System Techniques Co., Ltd. (4323) Financial Results for the Third Quarter of FY3/21

Quarterly Consolidated Statement of Comprehensive Income(For the Nine-month Period)First nine months of FY3/20(Apr. 1, 2019 – Dec. 31, 2019)(Thousands of yen)First nine months of FY3/21(Apr. 1, 2020 – Dec. 31, 2020)(591,306)(238,118)

Loss
Other comprehensive income
Valuation difference on available-for-sale securities

22,56390,321

Foreign currency translation adjustment(59,880)(50,305)

Remeasurements of defined benefit plans, net of tax(9,295)

4,477

Total other comprehensive income
Comprehensive income(46,612)44,492(637,919)(193,625)(630,960)(199,876)(6,958)6,250

Comprehensive income attributable to:Comprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests

7

Japan System Techniques Co., Ltd. (4323) Financial Results for the Third Quarter of FY3/21(3) Quarterly Consolidated Statement of Cash FlowsFirst nine months of FY3/20(Apr. 1, 2019 – Dec. 31, 2019)(Thousands of yen)First nine months of FY3/21(Apr. 1, 2020 – Dec. 31, 2020)(529,673)
59,84520,28156,50037,044947
1,681
715,904(343,947)
28,657(15,577)(17,094)
3,107
1,396,313
421,605(377,939)(319,656)(522,894)(197,933)
79,902
12,53337,78918,0882,097
3,723
313,252(365,735)
10,392(731)(21,224)
2,591
1,876,710
154,352(743,232)(177,395)
259,715

Subtotal

615,106

1,264,898

Interest and dividends received
Interest paid
Income taxes paid

17,823(3,069)(201,830)

21,869(2,607)(282,384)

Net cash provided by (used in) operating activities

428,029

1,001,774

56,480(55,842)(15,417)(2,043)-(66,107)(21,203)(20,399)
9,909
200,000(416,822)-(24,704)867
28,086(1,166)
4,431(1,486)

Cash flows from operating activities
Loss before income taxes
Depreciation
Amortization of software
Amortization of goodwill
Amortization of customer-related assets
Amortization of trademark
Amortization of technology assets
Impairment loss
Increase (decrease) in provision for bonuses
Increase (decrease) in retirement benefit liability
Decrease (increase) in retirement benefit asset
Interest and dividend income
Interest expenses
Decrease (increase) in trade receivables
Increase (decrease) in advances received
Decrease (increase) in inventories
Increase (decrease) in trade payables
Other, net

Cash flows from investing activities
Decrease (increase) in time deposits
Purchase of property, plant and equipment
Purchase of software
Purchase of investment securities
Proceeds from sales of investment securities
Proceeds from redemption of investment securities
Purchase of shares of subsidiaries resulting in change inscope of consolidation
Payments of guarantee deposits
Proceeds from refund of guarantee deposits
Other, net
Net cash provided by (used in) investing activities(429,397)

103,977

Cash flows from financing activities
Net increase (decrease) in short-term borrowings
Repayments of lease obligations
Repayments of long-term borrowings
Dividends paid
Purchase of treasury shares
Proceeds from disposal of treasury shares
Dividends paid to non-controlling interests

257,815(12,821)(33,881)(149,982)(80)
69,999(3,759)(692,266)(3,814)(5,600)(151,509)(62)-

Net cash provided by (used in) financing activities

127,289(853,252)(22,396)(31,689)

Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents

103,525

220,810

Cash and cash equivalents at beginning of period

4,204,722

3,908,254

Cash and cash equivalents at end of period

4,308,248

4,129,065

8

Japan System Techniques Co., Ltd. (4323) Financial Results for the Third Quarter of FY3/21(4) Notes to Quarterly Consolidated Financial Statements
Going Concern Assumption
Not applicable.
Significant Changes in Shareholders’ Equity
Not applicable.
Additional Information
Effect of COVID-19 on accounting estimates
There are no significant changes to the assumptions used for accounting estimates, including the assump tions
concerning the further spread of COVID-19, the end of this crisis and other related items that are explained in“Section 5 1. (1) Notes to the Consolidated Financial Statements (Supplementary Information)” of the Securities
Report for the fiscal year that ended in March 2020.
Board Benefit Trust (BBT)
Based on the resolution of the 46th Annual General Meeting of Shareholders, JAST on June 26, 2018 terminatedthe directors’ retirement benefit system and established a Board Benefit Trust (BBT) for the purpose of increasing
motivation for contributing to the medium to long-term growth of sales and earnings and an increase in corporate
value. The BBT plan clearly links the compensation of directors with the JAST stock price. Furthermore,
directors share with shareholders the benefits of a higher stock price as well as the risk of a lower stock price.
1) Overview
This is a stock compensation plan in which directors receive stock compensation through a BBT. The BBT
acquires JAST stock using cash contributions from JAST as the source of funds. Directors (excluding external
directors; same afterward unless indicated otherwise) receive stock compensation or a monetary amountequivalent to the market value of the stock in lieu of stock compensation in accordance with the rules on the stockcompensation plan for directors. In principle, a director becomes eligible for stock compensation only after theindividual is no longer a JAST director.
2) JAST stock held by the BBT
The book value (excluding associated expenses) of JAST stock held by the BBT is shown as treasury shares in the
net assets section of the consolidated balance sheet. As of the end of the third quarter, the BBT held 47,800 sharesof JAST stock with a book value of 87,713 thousand yen.

9

Japan System Techniques Co., Ltd. (4323) Financial Results for the Third Quarter of FY3/21

Segment and Other Information
Segment information
I. First nine months of FY3/20 (Apr. 1, 2019 – Dec. 31, 2019)
1. Information related to net sales and profit or loss for each reportable segment(Thousands of yen)

Softwarebusiness

GAKUEN System sales
businessbusiness

Medicalbig data
business

1. External sales
2. Inter-segment sales
and transfers

8,775,626

1,779,214

1,194,174

763,207 12,512,223

39,50911,513

26,972

Total

8,815,135

1,790,728

1,221,147

Segment profit (loss)(102,530)

151,905

124,515

Total

Amounts shown on
Adjustment quarterly consolidated(Note 1)statement of income(Note 2)

Net sales-

12,512,223

77,995(77,995)-

763,207 12,590,219(77,995)

12,512,223(26,044)(6,432)

141,413-

147,846

Notes: 1. Segment profit (loss) adjustment is eliminations of inter-segment transactions.
2. Segment profit (loss) is consistent with operating income shown on the quarterly consolidated statement of income.
2. Information related to impairment losses on non-current assets, goodwill, etc. for each reportable segment
Significant impairment losses related to non-current assets
In the software business, there was an impairment loss for goodwill and customer-related assets.
The amount of this loss in the first nine months of FY3/20 was 715,904 thousand yen.
Significant change in goodwill
In the software business, there was an impairment loss for goodwill.
The amount of this loss in the first nine months of FY3/20 was 395,830 thousand yen.
In the first quarter of FY3/20, there was a business combination due to the acquisition of the stock of AG NET PTE. LTD. A
provisional amount of goodwill in the software business resulting from this acquisition was used initially because theallocation of the acquisition cost had not been completed. The allocation of the ac quisition cost was completed at the end of
FY3/20, resulting in the finalization of the provisional accounting treatment and a revision in the amount of goodwill. The
revised goodwill resulting from this acquisition is 303,284 thousand yen. For more inform ation, please see “Notes, Business
Combinations.”
II. First nine months of FY3/21 (Apr. 1, 2020 – Dec. 31, 2020)
1. Information related to net sales and profit or loss for each reportable segment(Thousands of yen)

Softwarebusiness

GAKUEN System sales
businessbusiness

Medicalbig data
business

1. External sales
2. Inter-segment sales
and transfers

8,593,054

1,690,835

1,031,248

827,738 12,142,877

42,568

7,942

998

Total

8,635,623

1,698,778

1,032,247

Total

Amounts shown on
Adjustment quarterly consolidated(Note 1)statement of income(Note 2)

Net sales-

12,142,877

51,509(51,509)-827,738 12,194,387(51,509)

12,142,877-

Segment profit (loss)(122,393)
135,865
111,519(39,924)85,067980
86,048Notes: 1. Segment profit (loss) adjustment is eliminations of inter-segment transactions.
2. Segment profit is consistent with operating income shown on the quarterly consolidated statement of income.
2. Information related to impairment losses on non-current assets, goodwill, etc. for each reportable segment
Significant impairment losses related to non-current assets
In the software business, there was an impairment loss for goodwill, customer-related assets, trademark rights andtechnology assets. The amount of this loss in the first nine months of FY3/21 was 313,252 thousand yen.

10

Japan System Techniques Co., Ltd. (4323) Financial Results for the Third Quarter of FY3/21

Significant change in goodwill
In the software business, there was an impairment loss for goodwill.
The amount of this loss in the first nine months of FY3/21 was 196,841 thousand yen.

Business Combinations
Effect of significant revision of initial allocation of acquisition cost on comparative information
A provisional accounting treatment was used in the first quarter of the previous fiscal year for the JAST Group’s
acquisition of AG NET PTE. LTD. on May 31, 2019. The accounting treatment was finalized at the end of theprevious fiscal year.
Due to the finalization of the provisional accounting treatment, comparative information included in the first halfconsolidated financial statements reflects a significant revision of the initial acquisition cost allocation. On theacquisition date (June 30, 2019 for accounting purposes), the acquisition cost was allocated as follows: 73,537
thousand yen to customer-related assets, 39,716 thousand yen to trademark rights, 70,507 thou sand yen totechnology assets, and 31,239 thousand yen to deferred tax liabilities. As a result, provisional goodwill of
455,805 thousand yen was reduced by 152,521 thousand yen to 303,284 thousand yen.
As a result, operating income and ordinary income decreased 1,827 thousand yen each and profit attributable toowners of parent decreased 921 thousand yen in the quarterly consolidated statement of income for the first ninemonths of FY3/20.

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.

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