May 12, 2017

Summary of Consolidated Financial Results for the Fiscal Year Ended March 31, 2017
[Japanese GAAP]
Listing: Tokyo Stock Exchange, Second 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 27, 2017
June 12, 2017
June 28, 2017
Yes
Yes (for analysts)

Note: The original disclosure in Japanese was released on May 12, 2017 at 16:30 (GMT +9).
(All amounts are rounded down to the nearest million yen)

1. Consolidated Financial Results for the Fiscal Year Ended March 31, 2017 (April 1, 2016 – March 31, 2017)(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, 2017
14,223
20.3
571
42.2
623
41.4
410
40.7
Fiscal year ended Mar. 31, 2016
11,821
2.7
401
10.4
441
1.2
291
27.7
Note: Comprehensive income (million yen) Fiscal year ended Mar. 31, 2017:
430 (up 124.1 %)Fiscal year ended Mar. 31, 2016:
191 (down 39.0 %)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, 2017
7.4
6.5
4.0
78.26
Fiscal year ended Mar. 31, 2016
5.4
5.0
3.4
55.62
Reference: Equity in earnings of affiliates (million yen): Fiscal year ended Mar. 31, 2017: Fiscal year ended Mar. 31, 2016: (2) Consolidated financial position
Total assets
Net assets
Million yen
Million yen
As of Mar. 31, 201710,281
5,741
As of Mar. 31, 2016
9,019
5,448
Reference: Shareholders’ equity (million yen)
As of Mar. 31, 2017:
5,692

Equity ratio
%
55.4
59.8
As of Mar. 31, 2016:

Net assets per share
Yen
1,084.74
1,028.31
5,396(3) Consolidated cash flows
Cash flows fromoperating activities
Million yen
132
(12)

Fiscal year ended Mar. 31, 2017
Fiscal year ended Mar. 31, 2016

Cash flows frominvesting activities
Million yen
494
119

Cash flows fromfinancing activities
Million yen
(122)
(216)

Cash and cash equivalents
at end of period
Million yen
1,951
1,447

2. Dividends
Dividend per share

Fiscal year ended Mar. 31, 2016
Fiscal year ended Mar. 31, 2017
Fiscal year ending Mar. 31, 2018
(forecasts)

1Q-end2Q-end3Q-endYear-end

Total

Total
dividends

Yen
-

Yen
0.00
0.00

Yen
-

Yen
25.00
25.00

Yen
25.00
25.00

Million yen
131
131

-

0.00

-

25.00

25.00

Dividend on
equity(consolidated)
%
%
45.0
2.4
31.9
2.4

Payout ratio(consolidated)

27.9

3. Consolidated Earnings Forecasts for the Fiscal Year Ending March 31, 2018 (April 1, 2017 – March 31, 2018)
Net sales
Full year

Million yen
14,625

Operating income%
2.8

Million yen
790

%
38.3

Ordinary income
Million yen
795

%
27.4

(Percentages represent year-on-year changes)
Profit attributable to
Net income perowners of parent
shareMillion yen
%
Yen
470
14.4
89.56

* 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:

Yes2) 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, 2017:

5,612,230 shares

As of Mar. 31, 2016:

5,612,230 shares

As of Mar. 31, 2016:

364,210 shares

2) Number of treasury shares at the end of the period
As of Mar. 31, 2017:364,210 shares

3) Average number of shares outstanding during the period
Fiscal year ended Mar. 31, 2017:

5,248,020 sharesFiscal year ended Mar. 31, 2016:

5,248,020 shares

Reference: Summary of Non-consolidated Financial Results
1. Non-consolidated Financial Results for the Fiscal Year Ended March 31, 2017 (April 1, 2016 – March 31, 2017)(1) Non-consolidated results of operations
Net sales
Million yen%
12,08518.9
10,160
4.9

Fiscal year ended Mar. 31, 2017
Fiscal year ended Mar. 31, 2016

Operating income
Million yen
%
534
28.9
414
10.8

(Percentages represent year-on-year changes)
Ordinary income
ProfitMillion yen% Million yen
%
570
30.3
385
33.3
437
2.3
288
29.4

Diluted net income per
share
Yen
Yen
73.39
55.04
-

Net income per share
Fiscal year ended Mar. 31, 2017
Fiscal year ended Mar. 31, 2016
(2) Non-consolidated financial position

Total assets
Net assets
Million yen
Million yen
As of Mar. 31, 2017
5,939
9,515
As of Mar. 31, 2016
8,568
5,650
Reference: Shareholders’ equity (million yen)
As of Mar. 31, 2017:
5,939

Equity ratio
%
62.4
65.9
As of Mar. 31, 2016:

Net assets per shareYen
1,131.79
1,076.69
5,650

Note 1: The current financial report is not subject to audit procedures.
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 4 for forecast assumptions and notes of caution for usage.

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/17

Contents of Attachments

1. Overview of Results of Operations

2(1) Results of Operations

2(2) Financial Position

3(3) Cash Flows3(4) Outlook

4

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

Changes in Accounting Policies

12

Reclassifications

12

Additional Information

12

Segment and Other Information

12Per-share Information

15

Subsequent Events

15

4. Others

15(1) Changes in Directors

15(2) Goods Manufactured, Orders Received and Sales

16

1

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/17

1. Overview of Results of Operations(1) Results of Operations
In the current fiscal year, the overall Japanese economy continued to recover at a moderate pace. The recovery isbacked by the benefits of economic initiatives along with ongoing improvements in the number of jobs and personal
income. However, the outlook remains unclear mainly because of concerns over increased uncertainty about
overseas economies, such as policy changes of the new US government, slowing economic growth in China andother emerging countries in Asia, and the U.K. leaving the EU.
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 rose 1.3% year on year in Fiscal
2016 (compared with 2.6% annual growth in Fiscal 2015), keeping a positive trend. The monthly sales figuresincreased year on year for seven straight months since August 2016, indicating that the IT industry as a whole is on amoderate growth path.
Consolidated results of the Japan System Techniques Group (Japan System Techniques Co., Ltd. and its consolidated
subsidiaries, hereafter “the Group”) in the current fiscal year showed higher sales and profits as follows: net sales of
14,223 million yen (up 20.3% year on year), operating income of 571 million yen (up 42.2% year on year), ordinary
income of 623 million yen (up 41.4% year on year), and profit attributable to owners of parent of 410 million yen (up40.7% year on year). Results by segment were as follows.
In the software business (individualized contracted software development), net sales and profits increased. Sales
remained strong because orders from the service/retail industry, the finance/insurance/brokerage industry, thetelecommunications industry, the public sector, and the manufacturing industry increased while there was a decreasein orders from medical institutions. As a result, net sales in this business totaled 10,058 million yen (up 24.5% year
on year) and operating income was 394 million yen (up 93.5% year on year).
In the package business (sale and related services of operational reform packages for schools), net sales and profits
increased. The IT equipment sales, operation/maintenance services and end user computing (EUC: individualized
contracted development of related systems) sales increased, while there was a decline in sales of program product(PP) sales and implementation support to universities. Net sales in this business totaled 2,274 million yen (up 7.4%
year on year) and operating income was 218 million yen (up 0.1% year on year).
In the system sales business (IT equipment sales and IT/telecom infrastructure construction), net sales and profits
increased. Equipment sales to universities declined, but orders from highly profitable system integration (SI) projects
for public sectors increased. As a result, net sales totaled 1,116 million yen (up 7.5% year on year), and operating
income was 6 million yen (up 20.3% year on year).
Lastly, in the medical big data business (inspection, analysis and related services of medical information), net sales
totaled 774 million yen (up 32.5% year on year), and operating loss totaled 45 million yen (vs. operating loss of 26
million yen in the previous fiscal year). Sales remained strong due to the expansion of cloud services for checking
service providers, services for data analysis and notification of the cost of medical care, and support services for data
health plans and other services in addition to automated inspection services for health insurance claims. However, there
was an increase in up-front costs involving enhancement of organization for future growth.

2

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/17(2) Financial Position
The balance of current assets at the end of the current fiscal year was 7,750 million yen, up 17.5% over the end of
the previous fiscal year. This was mainly due to an increase in notes and accounts receivable-trade from higher sales
at the end of fiscal year, an increase in work in process, and a decrease in cash and deposits. The balance of
non-current assets was 2,530 million yen at the end of the current fiscal year, up 4.5% over the end of the previous
fiscal year.
The balance of current liabilities at the end of the current fiscal year was 3,078 million yen, up 35.9% over the endof the previous fiscal year. This was mainly due to increases in notes and accounts payable-trade, provision forbonuses and income taxes payable. The balance of non-current liabilities was 1,461 million yen at the end of thecurrent fiscal year, up 11.9% over the end of the previous fiscal year. This was mainly due to increases in net defined
benefit liability and provision for directors’ retirement benefits.
The balance of total net assets was 5,741 million yen at the end of the current fiscal year, up 5.4% 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, and a decrease in remeasurements of defined benefit plans.
(3) Cash Flows
Cash and cash equivalents increased 503 million yen from 1,447 million yen at the beginning of the current fiscal
year to 1,951 million yen at the end of the current fiscal year.
Cash flows by category were as follows.
Cash flows provided by operating activities totaled 132 million yen, compared with 12 million yen used in theprevious fiscal year. This difference was mainly due to increases in provision for bonuses and profit before income
taxes, and a decrease in proceeds from collection of notes and accounts receivable-trade.
Cash flows provided by investing activities totaled 494 million yen, compared with 119 million yen provided in theprevious fiscal year. This difference was mainly due to an increase in proceeds from withdrawal of time deposits.
Cash flows used in financing activities totaled 122 million yen, compared with 216 million yen used in the previous
fiscal year. This difference was mainly due to an increase in short-term loans payable and a decrease in payments forinvestments in capital of subsidiaries and associates that do not result in change in scope of consolidation.
Reference: Cash flow indicators
FY3/13

FY3/14

FY3/15

FY3/16

FY3/17

Equity ratio (%)

55.0

56.6

61.4

59.8

55.4

Equity ratio based on market value (%)

38.2

39.0

50.0

38.6

50.0

Interest-bearing debt to cash flow ratio (years)

0.1

0.0

-

-

0.5

Interest coverage ratio (times)
89.1
228.6
78.0
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 number ofshares 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 theCompany had negative operating cash flows.

3

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/17(4) Outlook
In the uncertain global economy of late, and particularly in the IT industry where the environment is extremely
volatile, the Company understands that it will be difficult to achieve growth into the future 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 and targets for fiscal 2020. This vision sets forth the type of organization we want tobecome, including goals for the corporate image, brand image, business fields, the size of our operations and otheritems. 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 “Speed Up!” as the slogan for the fiscal year ending March 31, 2018.
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 aredetermined to achieve the goals of every department and person in our Group. As a result, we aim to expand scale ofprojects and enhance profitability and productivity in the contracted development business, as well as to achievesustained growth by further expanding JAST-driven business centering on proprietary brand products and creating
new services.
Based on the above, we expect increases in sales and profits in the fiscal year ending March 31, 2018; net sales of
14,625 million yen (up 2.8% year on year), operating income of 790 million yen (up 38.3% year on year), ordinary
income of 795 million yen (up 27.4% year on year), and profit attributable to owners of parent of 470 million yen(up 14.4% 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 other companies.
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 FY3/17

3. Consolidated Financial Statements and Notes(1) Consolidated Balance Sheet
FY3/16(As of Mar. 31, 2016)(Thousands of yen)
FY3/17(As of Mar. 31, 2017)

AssetsCurrent assets
Cash and deposits

2,436,624

2,365,633

Notes and accounts receivable-trade

3,436,003

4,374,348

Merchandise and finished goods

78,43486,509Work in process

326,978505,244

Raw materials and supplies

2,692

3,317

Deferred tax assets

191,764

270,257

Other

129,132

149,426

Allowance for doubtful accounts(4,139)(3,858)6,597,491

7,750,879

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

616,203669,615

Accumulated depreciation(310,047)(347,533)

Buildings and structures, net

306,156

322,081Land

142,361

142,361Other284,375

375,955(208,302)(241,349)

76,072

134,606

524,591

599,049

Goodwill

10,00140,491

Software120,195

109,996

Other

7,189

7,626

137,385

158,114

Investment securities

564,136

625,020

Net defined benefit asset

447,426

479,037

Deferred tax assets

65,58076,560

Guarantee deposits

376,493376,763

Other

351,708

260,605

Allowance for doubtful accounts(45,119)(44,649)

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

Total intangible assets
Investments and other assets

Total investments and other assets
Total non-current assets
Total assets

5

1,760,225

1,773,336

2,422,202

2,530,500

9,019,694

10,281,379

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/17(Thousands of yen)
FY3/17(As of Mar. 31, 2017)

FY3/16(As of Mar. 31, 2016)
Liabilities
Current liabilities
Notes and accounts payable-trade
Short-term loans payable
Current portion of long-term loans payable

907,911

1,122,286-

26,678-8,400

Income taxes payable

104,706

281,537

Provision for bonuses

419,637

615,341

Provision for directors’ bonuses

20,93529,174

Provision for loss on construction contracts

6,079

1,561

Other

805,784

993,3212,265,055

3,078,301-

28,000

Provision for directors’ retirement benefits

372,585

413,048

Net defined benefit liability

800,914870,683

Other

132,686

150,188

Total current liabilities
Non-current liabilities
Long-term loans payable

Total non-current liabilities
Total liabilities

1,306,186

1,461,920

3,571,242

4,540,222

1,076,669

1,076,669

Net assets
Shareholders’ equity
Capital stock
Capital surplus

998,790994,621

Retained earnings

3,460,641

3,740,158

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

Total shareholders’ equity

5,269,562

5,544,909

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

50,966

85,686

Foreign currency translation adjustment(14,352)(13,063)

Remeasurements of defined benefit plans

90,40075,227

Total accumulated other comprehensive income

127,013

147,850

51,87548,396

5,448,452

5,741,157

9,019,694

10,281,379

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

6Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/17(2) Consolidated Statements of Income and Comprehensive Income
Consolidated Statement of Income
FY3/16(Apr. 1, 2015 – Mar. 31, 2016)(Thousands of yen)
FY3/17(Apr. 1, 2016 – Mar. 31, 2017)

Net sales

11,821,083

14,223,330

Cost of sales

9,254,306

11,287,537

Gross profit

2,566,777

2,935,792

Selling, general and administrative expenses

2,165,167

2,364,749

401,609571,043

7,262

6,140

Operating income
Non-operating income
Interest income
Dividend income

6,141

5,942

Rent income

14,928

13,844Compensation income-

15,107

1,745

1,718

Subsidy income

8,007

16,815

Other

13,888

10,622

Total non-operating income

51,97570,191

2,023

1,583

Commission fee

Non-operating expenses
Interest expenses
Foreign exchange losses

954

2,176

Rent expenses

7,799

11,824

Other

1,635

1,698

Total non-operating expenses

12,413

17,282

441,171

623,952

Loss on valuation of investment securities

117-

Total extraordinary losses

117-

Profit before income taxes

441,053

623,952

Income taxes-current

125,453

291,138

Income taxes-deferred

42,019(78,280)

Total income taxes

167,473

212,858

Profit273,580

411,094

Profit attributable to non-controlling interests(18,292)

376

Profit attributable to owners of parent

291,873

410,717

Ordinary income
Extraordinary losses

7

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/17

Consolidated Statement of Comprehensive Income
FY3/16(Apr. 1, 2015 – Mar. 31, 2016)(Thousands of yen)
FY3/17(Apr. 1, 2016 – Mar. 31, 2017)273,580

411,094

Valuation difference on available-for-sale securities(10,296)

34,719Foreign currency translation adjustment(8,593)(493)

Remeasurements of defined benefit plans, net of tax(62,709)(15,172)

Total other comprehensive income(81,598)

19,053

191,981430,147

214,162431,554(22,180)(1,406)

ProfitOther comprehensive income

Comprehensive income
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 FY3/17(3) Consolidated Statement of Changes in Equity
FY3/16 (Apr. 1, 2015 – Mar. 31, 2016)(Thousands of yen)
Shareholders’ equity
Capital stock
Balance at beginning ofcurrent period
Changes of items during
periodCapital surplus

1,076,669

Retained earnings

1,038,308

3,299,968

Dividends of surplus
Profit attributable toowners of parent
Change in treasury sharesof parent arising fromtransactions with
non-controllingshareholders
Net changes of items otherthan shareholders’ equity
Total changes of items
during period
Balance at end of current
periodTotal shareholders’equityTreasury shares(266,539)

5,148,407(131,200)(131,200)

291,873

291,873(39,517)(39,517)-(39,517)160,672-

121,155

1,076,669

998,790

3,460,641(266,539)

5,269,562

Accumulated other comprehensive income

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

Foreigncurrencytranslation
adjustment

Remeasurementsof defined
benefit plans

61,263(9,647)

153,109

Total accumulated
Non-controlling
otherinterests
comprehensive
income204,724

79,875

Dividends of surplus
Profit attributable toowners of parent
Change in treasury sharesof parent arising fromtransactions with
non-controllingshareholders
Net changes of items otherthan shareholders’ equity
Total changes of items
during period
Balance at end of current
periodTotal net assets

5,433,007(131,200)
291,873(39,517)(10,296)(4,704)(62,709)(77,710)(28,000)(105,710)(10,296)(4,704)(62,709)(77,710)(28,000)

15,44450,966(14,352)

90,400127,01351,8755,448,452

9

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/17

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 treasury sharesof parent arising fromtransactions with
non-controllingshareholders
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

Remeasurementsof defined
benefit plans

50,966(14,352)

90,400Total accumulated
Non-controlling
otherinterests
comprehensive
income127,01351,875

Dividends of surplus
Profit attributable toowners of parent
Change in treasury sharesof parent arising fromtransactions with
non-controllingshareholders
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

10

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/17(4) Consolidated Statement of Cash Flows
FY3/16(Apr. 1, 2015 – Mar. 31, 2016)(Thousands of yen)
FY3/17(Apr. 1, 2016 – Mar. 31, 2017)

Profit before income taxes

441,053

623,952

Depreciation

77,333

87,631

Amortization of software

37,45038,257

Amortization of goodwill

14,92914,793

Increase (decrease) in provision for bonuses(26,473)

191,434

Decrease (increase) in net defined benefit asset

34,150(31,610)

Cash flows from operating activities

Increase (decrease) in net defined benefit liability

29,63070,122

Interest and dividend income(13,404)(12,082)-(15,107)

Compensation income
Interest expenses
Decrease (increase) in notes and accounts receivable-trade

2,023

1,583

(654,038)(901,382)

Increase (decrease) in advances received

125,419

152,612

Decrease (increase) in inventories(67,152)(185,304)

Increase (decrease) in notes and accounts payable-trade155,986

186,408

Other, net(71,783)

28,962

Subtotal

85,126250,270

Interest and dividend income received

15,38913,564

Interest expenses paid

(1,956)(1,700)(110,930)(144,722)-

15,107(12,370)

132,520

Income taxes paid
Proceeds from compensation
Net cash provided by (used in) operating activities
Cash flows from investing activities
Decrease (increase) in time deposits

206,411

672,825

Purchase of property, plant and equipment(15,725)(137,295)

Purchase of software(25,427)(12,860)

Purchase of investment securities
Purchase of shares of subsidiaries resulting in change inscope of consolidation
Payments for investments in capital of subsidiaries andassociates resulting in change in scope of consolidation
Payments for guarantee deposits(2,278)(1,971)-(26,827)(2,007)-(35,915)(651)

Other, net(5,452)799

Net cash provided by (used in) investing activities

119,604

494,018

Net increase (decrease) in short-term loans payable(21,893)

26,678

Repayments of lease obligations(11,507)(11,151)

Cash flows from financing activities

Proceeds from long-term loans payable-

42,000

Repayments of long-term loans payable(1,800)(48,035)

Cash dividends paid
Payments for investments in capital of subsidiaries andassociates that do not result in change in scope of
consolidation
Dividends paid to non-controlling interests(131,200)(131,200)(48,000)-(2,324)(1,164)

Net cash provided by (used in) financing activities(216,725)(122,873)(2,758)298

Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents(112,250)

503,965

Cash and cash equivalents at beginning of period

1,559,743

1,447,493

Cash and cash equivalents at end of period

1,447,493

1,951,458

11

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/17(5) Notes to Consolidated Financial Statements
Going Concern Assumption
Not applicable.

Changes in Accounting Policies
Application of Practical Solution on a Change in Depreciation Method due to Tax Reform 2016
Following the revision of the Corporation Tax Act, the Company has applied the “Practical Solution on a Change in Depreciation
Method due to Tax Reform 2016” (Accounting Standards Board of Japan (ASBJ) Practical Issues Task Force (PITF) No. 32, June17, 2016) from the current fiscal year, and changed the depreciation method for facilities attached to buildings and structuresacquired on or after April 1, 2016, from the declining-balance method to the straight-line method.
This change has no effect on profit or loss in the current fiscal year.

Reclassifications
Consolidated Statement of Income“Foreign exchange losses,” included in “Other” under non-operating expenses in the previous fiscal year, is reclassified andpresented as a 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 non-operating expenses (2,590 thousand yen) shown in the prior-period consolidated statement of income isreclassified and divided into “Foreign exchange losses” (954 thousand yen) and “Other” (1,635 thousand yen).

Additional Information
Application of Implementation Guidance on Recoverability of Deferred Tax Assets
Effective from the current fiscal year, the Company has applied the “Implementation Guidance on Recoverability of Deferred
Tax Assets” (ASBJ Guidance No. 26, March 28, 2016).

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 and services
in both domestic and overseas markets.
The software business handles the contracted software development. The package business is engaged in development, sale, andprovision 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, which includes a full line of services including automatedinspection 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 based on accounting policies used for the preparation of theconsolidated financial statements.
Profits for reportable business segments are operating income figures.
Inter-segment sales and transfers are based on market prices.

12

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/17

3. Information related to net sales, profit or loss, assets, liabilities, and other items for each reportable segment
FY3/16 (Apr. 1, 2015 – Mar. 31, 2016)(Thousands of yen)
Adjustment(Note 1)
(Note 2)

Amounts shown on
consolidated
financialstatements(Note 3)-

11,821,083

140,288(140,288)-

584,479 11,961,371(140,288)

11,821,083

Softwarebusiness

Packagebusiness

Systemsales
business

Medical big
databusiness

8,080,536

2,117,057

1,039,010

125,909-

14,3788,206,445

2,117,057

1,053,388

203,703

218,686

5,467(26,066)

401,791(181)

401,6094,758,022

1,340,092

965,341

379,884

7,443,340

1,576,353

9,019,694

Total

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

584,479 11,821,083-

Other items
Depreciation
73,86323,706
2,691
11,497111,758
111,758
Increase in property, plant andequipment and intangible
29,321
6,724
3,165
3,728
42,9409,720
52,660assets
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.
FY3/17 (Apr. 1, 2016 – Mar. 31, 2017)

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

Medical big
databusiness

Total(Thousands of yen)Amounts shown on
Adjustment
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

774,179 14,223,330-

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

Other items
Depreciation
81,76921,425
4,481
15,317
122,994
122,994
Increase in property, plant andequipment and intangible
85,884
41,415
1,746
12,914
141,960
18,960160,921
assets
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.

13

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/17

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 external customers
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 inJapan exceed 90% of property, plant and equipment on the consolidated balance sheet.
3. Information by major client
FY3/16 (Apr. 1, 2015 – Mar. 31, 2016)
Company name
NTT COMWARE CORPORATIONNet sales

Business segment

1,369,203 thousand yen

Software business

FY3/17 (Apr. 1, 2016 – Mar. 31, 2017)
Company name
NTT COMWARE CORPORATIONNet sales

Business segment

1,468,452 thousand yen

Software businessInformation related to impairment of non-current assets for each reportable segment
Not applicable.

Information related to goodwill amortization and the unamortized balance for each reportable segment
FY3/16 (Apr. 1, 2015 – Mar. 31, 2016)
Softwarebusiness

Packagebusiness

System sales
business

Medical big
data business(Thousands of yen)
Elimination or
Total
corporate

Amortization for the period

8,000

6,928

-

-

-

14,929Balance at the end of period

10,001----

10,001

FY3/17 (Apr. 1, 2016 – Mar. 31, 2017)
Softwarebusiness

Packagebusiness

System sales
business

Medical big
data business(Thousands of yen)
Elimination or
Total
corporate

Amortization for the period

14,793----

14,793

Balance at the end of period

40,491----40,491

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

14

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/17

Per-share Information
FY3/16(Apr. 1, 2015 – Mar. 31, 2016)(Yen)
FY3/17(Apr. 1, 2016 – Mar. 31, 2017)

Net assets per share

1,028.31

1,084.74

Net income per share

55.62

78.26

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)
FY3/16
FY3/17(As of Mar. 31, 2016)(As of Mar. 31, 2017)
Net assets per share
5,448,452

Total net assets on balance sheet

5,741,157

Deduction on total net assets

51,87548,396[Non-controlling interests][51,875][48,396]

Net assets applicable to common shares

5,396,576

5,692,760

5,248,020 shares

5,248,020 shares

FY3/16(Apr. 1, 2015 – Mar. 31, 2016)(Thousands of yen)
FY3/17(Apr. 1, 2016 – Mar. 31, 2017)

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

Net income per share
291,873

410,717--

Profit attributable to owners of parent applicable tocommon shares

291,873

410,717

Average number of shares outstanding during period

5,248,020 shares

5,248,020 shares

Profit attributable to owners of parent
Amount not available to common shareholders

Subsequent Events
Not applicable.

4. Others(1) Changes in Directors
1) Changes in representative
Not applicable.
2) Changes in other directors
Candidate for director
Director
Yutaka Hosoe
Note: Mr. Yutaka Hosoe is a candidate for an external director.
3) Effective dateJune 27, 201715

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/17(2) Goods Manufactured, Orders Received and Sales
1) Goods manufactured
Goods manufactured in the current fiscal year are broken down by segment as follows.

(Thousands of yen)
FY3/17
Operating segment
Year-on-year (%)(Apr. 1, 2016 – Mar. 31, 2017)
Software business
123.8
8,555,444
Package business
1,299,459
104.3
System sales business
118.2
884,793
Medical big data business
547,839
156.3
Total
11,287,537
122.0
Notes: 1. The above amounts are based on cost of sales; inter-segment transactions have been eliminated.
2. The above amounts do not include consumption taxes.

2) Orders received
Orders received in the current fiscal year are broken down by segment as follows.
Operating segment
Software business
Package business
System sales business
Medical big data business

Orders received
Year-on-year (%)
Order backlog
11,111,822
132.9
2,599,250
2,305,813
105.4
705,986
948,587
78.7
208,144476,68345.0
386,544
Total
14,842,907
115.9
3,899,925
Notes: 1. The above amounts are based on selling prices; inter-segment transactions have been eliminated.
2. The above amounts do not include consumption taxes.

(Thousands of yen)
Year-on-year (%)
168.2
104.6
55.4
56.5
118.9

3) SalesSales in the current fiscal year are broken down by segment as follows.

(Thousands of yen)
FY3/17
Operating segment
Year-on-year (%)(Apr. 1, 2016 – Mar. 31, 2017)
Software business
124.5
10,058,212
Package business
2,274,452
107.4
System sales business
107.5
1,116,485
Medical big data business
774,179
132.5
Total
14,223,330
120.3
Notes: 1. Inter-segment transactions have been eliminated.
2. The following table indicates sales amounts to major customers and their ratios to total sales amount.
(Thousands of yen)
FY3/16
FY3/17(Apr. 1, 2015 – Mar. 31, 2016)(Apr. 1, 2016 – Mar. 31, 2017)
Customers
Customers
Amount%AmountNTT COMWARE
1,369,203
11.6
CORPORATIONTIS Inc.
527,626
4.5
Duskin Co., Ltd.
568,808
4.8
3. The above amounts do not include consumption taxes.

NTT COMWARECORPORATIONTIS Inc.
Duskin Co., Ltd.

%1,468,452

10.3

896,707732,723

6.3
5.2

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.

16