May 12, 2014

Summary of Consolidated Financial Results for the Fiscal Year Ended March 31, 2014
[Japanese GAAP]
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:

Listing: Tokyo Stock Exchange, Second Section
URL: http://www.jast.jp
Tel: +81-6-4560-1000
June 20, 2014
June 6, 2014
June 23, 2014
Yes
Yes (for analysts)

Note: The original disclosure in Japanese was released on May 12, 2014 at 17:00 (GMT +9).
(All amounts are rounded down to the nearest million yen)
1. Consolidated Financial Results for the Fiscal Year Ended March 31, 2014 (Apr. 1, 2013 – Mar. 31, 2014)(1) Consolidated results of operations(Percentages for net sales and incomes represent year-on-year changes)
Net sales
Operating income
Ordinary income
Net income
Million yen%

Million yen%

Fiscal year ended Mar. 31, 2014
10,828
6.8
427
36.1
474
Fiscal year ended Mar. 31, 201310,139
12.3
314
10.6
355
Note: Comprehensive income (million yen) Fiscal year ended Mar. 31, 2014:
311 (up 60.9%)
Fiscal year ended Mar. 31, 2013:
193 (up 41.5%)

Million yen

%

33.2
8.7

278
168

65.2
24.3

Net income pershare

Million yen%

Diluted net
Return on equity
income per share

Yen

Yen

Ordinary income Operating income
on total assets
to net sales

%

%

%

Fiscal year ended Mar. 31, 2014
57.03
56.20
5.9
5.6
3.9
Fiscal year ended Mar. 31, 2013
35.52
35.39
3.8
4.6
3.1
Reference: Equity in earnings of affiliates (million yen): Fiscal year ended Mar. 31, 2014: Fiscal year ended Mar. 31, 2013: (2) Consolidated financial position
Total assets

Net assets

Million yen

As of Mar. 31, 2014
As of Mar. 31, 2013
Reference: Shareholders’ equity (million yen)

Equity ratio

Million yen

8,817
8,050
As of Mar. 31, 2014:

Net assets per share
%

5,066
4,489
4,992

56.6
55.0
As of Mar. 31, 2013:

Yen

954.53929.704,429(3) Consolidated cash flows
Cash flows fromoperating activities

Cash flows frominvesting activities

Cash flows fromfinancing activities

Cash and cash equivalents
at end of period

Million yen

Million yen

Million yen

Million yen

393
181

(13)
(449)

149
(145)

2,144
1,609

Fiscal year ended Mar. 31, 2014
Fiscal year ended Mar. 31, 2013
2. Dividends

Dividend per share
1Q-endFiscal year ended Mar. 31, 2013
Fiscal year ended Mar. 31, 2014
Fiscal year ending Mar. 31, 2015
(forecasts)

Total

Yen

Yen

Million yen

%

%

25.00
25.00

25.00
25.00

119
130

70.4
43.8

2.7
2.7

2Q-end3Q-endYear-end

Yen

Yen

Yen

-

0.00
0.00

-

-

0.00

-

25.00

25.00

Payout ratio(consolidated)

Dividend on
equity(consolidated)

Total
dividends

45.2

3. Consolidated Earnings Forecasts for the Fiscal Year Ending March 31, 2015 (Apr. 1, 2014 – Mar. 31, 2015)(Percentages represent year-on-year changes)
Net sales
Operating income
Ordinary income
Net income
Net income per shareFirst half
Full year

Million yen%

Million yen%

Million yen%

Million yen

%

Yen

5,334
11,900

6.5
9.9

1
525

22.8

16
555

(24.4)
17.1

1
290

4.0

0.19
55.26

* 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 “Significant Accounting Policies in the Preparation of Consolidated Financial Statements” for further information.

(3) Number of outstanding shares (common stock)1) Number of shares outstanding at the end of period (including treasury shares)
As of Mar. 31, 2014:

5,594,230 shares

As of Mar. 31, 2013:

5,128,330 shares

As of Mar. 31, 2013:

364,140 shares

2) Number of treasury shares at the end of period
As of Mar. 31, 2014:

364,210 shares

3) Average number of shares outstanding during the period
Fiscal year ended Mar. 31, 2014:

4,890,856 sharesFiscal year ended Mar. 31, 2013:

4,755,128 shares

Reference: Summary of Non-consolidated Financial Results
1. Non-consolidated Financial Results for the Fiscal Year Ended March 31, 2014 (Apr. 1, 2013 – Mar. 31, 2014)(1) Non-consolidated results of operations
Net sales

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

Million yen%

Million yen%

Million yen%

Million yen

%

8,640
7,956

8.6
6.4

403
222

81.5
(18.6)

450
249

80.6
(17.8)

292
115

153.6
(19.5)

Fiscal year ended Mar. 31, 2014
Fiscal year ended Mar. 31, 2013

Net income per share
Fiscal year ended Mar. 31, 2014
Fiscal year ended Mar. 31, 2013

Diluted net income per
share

Yen

Yen

59.84
24.27

58.96
24.18

(2) Non-consolidated financial position
Total assets

Net assets

Million yen

As of Mar. 31, 2014
As of Mar. 31, 2013
Reference: Shareholders’ equity (million yen)

Equity ratio

Million yen

8,406
7,439
As of Mar. 31, 2014:

5,215
4,730
5,214

Net assets per share
%

62.0
63.6
As of Mar. 31, 2013:

Yen

997.09992.664,729

2. Non-consolidated Earnings Forecasts for the Fiscal Year Ending March 31, 2015 (Apr. 1, 2014 – Mar. 31, 2015)(Percentages represent year-on-year changes)
Net sales
Operating income
Ordinary income
Net income
Net income per shareFirst half
Full year

Million yen%

Million yen%

Million yen%

Million yen

%

Yen

4,309
9,500

14.8
10.0

15
470

16.6

32
490

156.8
8.7

17
270

(7.7)

3.24
51.45

Note 1: Information regarding the implementation of audit procedure
The current financial statements are exempted from audit procedures based on the Financial Instruments and Exchange Act. At thetime of disclosure, the audit procedure for these consolidated statements has not been completed.
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. Analysis of Results of Operations andFinancial Position, (1) Analysis of Results of Operations” on page 2 for forecast assumptions and notes of caution for usage.

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/14

Contents of Attachments
1. Analysis of Results of Operations and Financial Position(1) Analysis of Results of Operations(2) Analysis of Financial Position(3) Basic Policy for Profit Distribution, and Dividends in the Current and Next Fiscal Years(4) Business Risks

2
2
3
4
4

2. Corporate Group6

3. Management Policies(1) Basic Management Policy(2) Performance Targets(3) Medium- and Long-term Business Strategy(4) Challenges

8
8
8
8
9

4. Consolidated Financial Statements(1) Consolidated Balance Sheet(2) Consolidated Statements of Income and Comprehensive Income
Consolidated Statement of Income
Consolidated Statement of Comprehensive Income(3) Consolidated Statement of Changes in Equity(4) Consolidated Statement of Cash Flows(5) Notes to Consolidated Financial Statements
Going Concern Assumption
Significant Accounting Policies in the Preparation of Consolidated Financial Statements
Changes in Accounting Policies
Accounting Standards, Others That Have Not Yet Been Applied
Reclassifications
Changes in Accounting-based Estimates
Additional Information
Notes to Consolidated Balance Sheet
Notes to Consolidated Statement of Income
Notes to Consolidated Statement of Comprehensive Income
Notes to Consolidated Statement of Changes in Equity
Notes to Consolidated Statement of Cash Flows
Marketable Securities
Derivative Transactions
Retirement Benefits
Stock Options
Tax Effect Accounting
Business Combinations
Segment and Other Information
Related Party Information
Per-share Information
Subsequent Events
Omission of Disclosure

10
10
12
12
13
14
16
17
17
17
19
19
20
20
20
21
21
22
22
23
24
24
25
28
29
30
30
32
33
33
33

5. Non-consolidated Financial Statements(1) Balance Sheet(2) Statement of Income(3) Statement of Changes in Equity(4) Notes to Non-consolidated Financial Statements
Going Concern Assumption
Significant Accounting Policies
Changes in Accounting Policies
Reclassifications
Changes in Accounting-based Estimates
Additional Information
Notes to Balance Sheet
Notes to Statement of Income
Marketable Securities
Tax Effect Accounting
Subsequent Events

34
34
36
37
39
39
39
41
41
41
41
41
42
42
43
43

6. Others(1) Changes in Directors(2) Goods Manufactured, Orders Received and Sales

44
44
45

1

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/14

1. Analysis of Results of Operations and Financial Position(1) Analysis of Results of Operations
1) Summary of the fiscal year
In the current fiscal year, consolidated results of Japan System Techniques and its consolidated subsidiaries (hereafter“the Group”) were as follows: net sales of 10,828 million yen (up 6.8% year on year), operating income of 427 million
yen (up 36.1% year on year), ordinary income of 474 million yen (up 33.2% year on year), and net income of 278
million yen (up 65.2% year on year). Net sales and profits increased. Results by segment were as follows.
In the software business (individualized contracted software development), net sales and profits increased. Orders
from the telecommunications industry, the public sector and educational institutions declined, but increased from theservice/retail industry, the finance/insurance/brokerage industry, the manufacturing industry, and medical institutions.
Net sales totaled 7,110 million yen (up 9.7% year on year) and operating income totaled 278 million yen (up 70.2%
year on year).
In the package business (sale and related services of operational reform packages for schools), net sales increased but
profits declined. IT equipment sales, implementation support, operation services, and product maintenance increased
year on year, but, end user computing (EUC: individualized contracted development of related systems) and program
product (PP) sales to universities declined. Net sales totaled 1,949 million yen (up 1.9% year on year), but due to anincrease in research and development expenses for product development, operating income totaled 296 million yen(down 3.9% year on year).
In the system sales business (IT equipment sales and IT/telecom infrastructure construction), net sales and profits
decreased. Orders from the public sector increased, though orders from educational institutions decreased. As a result,net sales totaled 1,533 million yen (down 7.0% year on year), and operating income totaled 41 million yen (down
42.4% year on year).
Lastly, in the medical big data business (inspection, analysis and related services of medical information) newly addedfrom the first quarter of the current fiscal year, in addition to automated inspection services for health insurance claims,
the expansion of notification and data analysis services steadily expanded contracts, boosting sales and profits. Net sales
totaled 235 million yen (up 153.7% year on year), and operating loss totaled 194 million yen (vs. operating loss of 230
million yen in the previous fiscal year).
2) Forecasts for the new fiscal year
In the fiscal year under review, the Japanese economy grew as corporate earnings improved and consumer spending
expanded against a backdrop of a weaker yen and rising stock prices. Economic stimulus measures by the government
and the Bank of Japan’s monetary policy were partly responsible for this uptrend. However, a risk of economic
stagnation or a downturn remains because of factors such as falling demand in Japan following the April 2014
consumption tax hike and, in the global economy, slowing growth in China and other major emerging countries.
In the IT industry in Japan, according to latest statistics in “Survey of Selected Service Industries” by the Ministry of
Economy, Trade and Industry” (the final February figures) net sales began to rise from October 2011 after declining formany years. Since then, net sales have continued to climb as the IT industry as a whole stages a recovery. However, therecovery is still weak because 2013 sales growth was only 1.7% and sales were down year-on-year in a few months.
The Group will be guided by the fiscal year’s slogan of “act with thought and speed.” Everyone at the Group has astrong commitment to adapt swiftly to changes involving clients, technologies and markets. The objective is to achieve
consistent growth in association with the shift from the previous business model centered on contracted development
activities. The Group is establishing a business model in which we take our own initiatives centered on proprietarybrand products.
Structural reforms have established a framework in which executive officers oversee each business unit and where the
newly established Management Planning Department oversees implementation of group business strategies. In addition,2

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/14

a global management executive has been appointed to take the lead in the full-scale expansion of activity by the Group
companies and the start of operations in China and other countries. Strategies in each business unit are as follows.
In the software business, a regional-based business structure has been established with the head offices in Tokyo andOsaka. There are three business divisions in the Tokyo head office: the division of contracted development operations
that has been reorganized into three units, each specializing in a particular field; the convergence business division
which is an independent division as in the previous fiscal year; and the sales division. At the Osaka head office,operations has been realigned into three business divisions, each specializing in a particular field. To build new profit
centers, the BankNeo business has become a separate business division of the financial-related business and has beenrealigned into two business divisions with the Financial Business Department, which consists three regional–based
departments. The aim of these organizational changes is support consistent growth in earnings.
In the package business, the Group established business divisions in the greater Kanto and greater Kansai to localize
operations and firmly expand its market share in each region. Also, the Group plans to develop next-generation
mainstay products, enter the education market and grow faster in China. Furthermore, we will continue to work on
making the school operations reform package GAKUEN the dominant brand in the education market in Japan and othercountries.
In the system sales business, the Group will focus on expanding business from core clients and acquiring new clients inhigh-margin SE services, and new solutions utilizing security technology to build a new business platform and maintainearnings expansion.
Lastly, in the medical big data business, measures will continue from the previous fiscal year to increase speed andflexibility by creating a flatter organizational structure. In addition, the Group will strengthen the sales and service
organizations in the Tokyo and Osaka regions in order to capture more orders and improve productivity.
Based on the above, we expected increases in sales and profits; net sales of 11,900 million yen (up 9.9% year on year),
operating income of 525 million yen (up 22.8% year on year), ordinary income of 555 million yen (up 17.1% year onyear), and net income of 290 million yen (up 4.0% year on year).

(2) Analysis of Financial Position
1) Balance sheet position
The balance of current assets at the end of the current fiscal year was 6,563 million yen, up 7.0% over the end of theprevious fiscal year. This was mainly due to increases in cash and deposits, and notes and accounts receivable-tradefrom higher net sales at the end of fiscal year, and a decrease in work in process. The balance of non-current assets was
2,253 million yen, up 17.5% over the end of the previous fiscal year, mainly due to increases from the purchase ofinvestment securities and long-term time deposits.
The balance of current liabilities at the end of the current fiscal year was 2,364 million yen, up 7.7% over the end of theprevious fiscal year. This was mainly due to increases in provision for bonuses, and income taxes payable, and adecrease in advances received. The balance of non-current liabilities was 1,386 million yen at the end of the fiscal year,
up 1.5% over the end of the previous fiscal year.
The balance of net assets was 5,066 million yen at the end of the current fiscal year, up 12.8% over the end of theprevious fiscal year. The main factors were increases in capital stock and capital surplus due to the exercise ofsubscription rights to shares, and an increase in retained earnings.
2) Cash flows
Cash and cash equivalents (hereafter “funds”) increased 534 million yen from 1,609 million yen at the start of thecurrent fiscal year to 2,144 million yen at the end of the current fiscal year.
Cash flows by category were as follows.
Cash flows provided by operating activities totaled 393 million yen, compared with 181 million yen provided in the3Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/14

previous fiscal year. This was a net result of inflows including decreases in notes and accounts receivable-trade andinventories, an increase in provision for bonuses, and outflows such as decreases in notes and accounts payable-trade
and advances received.
Cash flows used in investing activities totaled 13 million yen, compared with 449 million yen used in the previous fiscal
year. The difference was a net result of inflows from a decrease in payments for guarantee deposits and an increase
from the collection of guarantee deposits, and outflows for the purchases of investment securities and software.
Cash flows provided by financing activities totaled 149 million yen, compared with 145 million yen used in theprevious fiscal year. The main difference factor was an increase from issuance of shares resulting from exercise ofsubscription rights to shares.
Reference: Cash flow indicators
FY3/10FY3/11
FY3/12
FY3/13
FY3/1456.6
Equity ratio (%)
58.1
55.2
59.2
55.0
39.0
Equity ratio based on market value (%)
41.4
33.3
38.7
38.2
0.0
Interest-bearing debt to cash flow ratio (years)
0.4
0.0
0.1
228.6
Interest coverage ratio (times)
106.6
178.8
89.1
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 of 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 FY3/11 because theCompany had negative operating cash flows.
(3) Basic Policy for Profit Distribution, and Dividends in the Current and Next Fiscal Years
The Company’s basic policy for dividends is the same as that for earnings: long-term stable growth. It will examine
specific policies and amounts, in light of the trend in earnings, its financial condition, and various businessenvironments, while taking into consideration the payout ratio. The Company will make effective use of retained
earnings to invest in the training of professional human resources, the creation of new businesses, the promotion ofvarious alliances, and R&D for new products.
The Group will pay a dividend of 25 yen for each common share, in accordance with initial plans, for the fiscal year
ended March 31, 2014, in response to support from shareholders and investors.
The Group plans a dividend of 25 yen for each common share in the fiscal year ending March 31, 2015 in light of theoutlook for stable earnings growth.
(4) Business Risks
Listed below are the risk factors that may affect operating results and financial position as well as the stock price andother performance indices of the Group. Forward-looking statements are based on the judgment of the Group as of thedate of the release of these materials.
1) Risks related to defects in products and services
Information systems development within the IT industry, including the Company, has become increasingly complex
due to the growing sophistication of hardware, dramatic advances in IT/telecom and network technologies, and therapid spread in recent years of “cloud” and other new information-processing technologies. Meanwhile, the demands of4

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/14

clients regarding quality have become stricter as society shows increased interest in quality and defect issues related to
IT products and services given the growing impact of such defects on society. Against this backdrop, the Group is very
careful in thoroughly educating employees about improving and stabilizing software quality, strengthening screening
functions during the quote and order process, improving quote technology, and enhancing project management.
Nevertheless, the Group cannot rule out the possibility of defects which could cause major projects to become
unprofitable due to client indemnities and product repairs, and together with credit deterioration, result in a material
impact on the Group’s business performance.
2) Risks related to information management, misuse, and negligence, etc.
To prevent the leak of confidential or personal information relating to clients or employees, as well as accidents due tonegligence of all kinds, and misuse, the Group has formulated internal guidelines, trained employees, and holds regularinspections conducted by professional organizations. Still, these efforts cannot completely eliminate risk, and thematerialization of such risk could lower the Group’s creditworthiness, require indemnities, and have a material impact
on the Group’s business performance.
3) Risks associated with overreliance on major clients
The Group’s top clients account for a comparatively high proportion of its overall sales. Its top three clients accounted
for approximately 18% of consolidated net sales in the fiscal year under review, and its top five clients approximately
25%. Although the Group’s overreliance on these particular major clients has eased somewhat over the past few years, achange in orders from major clients or in the industry environment for major clients could cause significant fluctuationsin the Group’s business performance.
4) Risks associated with the concentration of earnings towards the fiscal yearend
A unique feature of the Group’s contracted software development, package, and systems equipment sales businesses isthat product inspections tend to concentrate in March which is the last month of the fiscal year for most clients. Delaysin the recognition of revenue due to clients’ postponement of development processes, budget executions, or productinspections could cause fluctuations in the Group’s business performance.
5) Risks associated with the valuation of assets
The Group owns marketable securities, real estate for rent, and other investment assets. The balance of these assets is
considerably smaller than its current assets which can be easily converted to cash. Still, unpredictable or rapid changes
in market prices or the bankruptcy of issuers, while difficult to forecast, could reduce the value of these assets,
impacting the Group’s business performance.
6) Risks related to large natural disasters
The outbreak of a large earthquake or other natural disaster could inflict devastating damage on the Group's mainstay
offices and injure many employees requiring expensive repairs and impacting the Group's business performance. The
Group is working on countermeasures to maintain business operations in preparation for the possibility or outbreak of anatural disaster.

5

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/14

2. Corporate GroupThe Group is comprised of Japan System Techniques Co., Ltd. and its six consolidated subsidiaries. It operates fourbusinesses including 1) the software business which develops software on contract to meet the specific needs of clients,
2) the package business which develops and sells operations packages mainly for educational institutions, 3) the systemsales business which sells hardware and software, and 4) the medical big data business, which includes a full line ofservices including automated inspection services for health insurance claims, data analysis and notification of the costof medical care. This business was added in the first quarter of the current fiscal year.
The table below shows the content of each of the Group’s businesses.
The business classification below is the same as in “4. Consolidated Financial Statements, (5) Notes to Consolidated
Financial Statements (Segment and Other Information)” on page 33.
Businesssegment
Softwarebusiness

Field
Businessapplications(office work
processing
system)Engineering
applications(communications,control,
technology
systems)

Event
applications(sports andcultural event
systems)

Content

Company name- Systems for the manufacturing industry including production
management, logistics management, and order management- Systems for the retail and service industries including store information,
procurement, shipment management, virtual shopping malls, andshopping mileage services- Systems for banks including accounts, information, global operations,and integrated operations packages- Systems for the securities industry including equity trading, investment
trusts, dealing, and Internet securities trading- Systems for the insurance industry including contract management andnon-life new reserves- Systems for the public sector including phone billing, tax revenue
management, resident information, postal accounts, and highway ETC(electronic toll collection)- Systems for schools and students including entrance examinations,student registries, teaching, and job search support- Systems for website production, smartphone app development, andrelated network businesses- Accounting, personnel, ERP package introduction support, ande-commerce (EDI) systems; customer relations management (CRM)
systems; data warehousing construction; biometric identification security
systems; and other office work processing systems- Embedded software for cell phones, digital audio-visual equipment, andcar mounted systems; IT/telecom systems for terrestrial digital
broadcasts, mobile communications, car navigation, optic fiber
communications networks, and simulators- Public transportation systems for road information, road management,
rail operations management, and linear motor car drive control- Electric utility systems for integrated power control and power plant
operations management- Logistics systems for automated warehouse control, automated conveyor
control, and automated packaging/labeling control- Science/technology systems for car design, building/bridge construction,architectural design support, structural analysis, and plastic injection
molding curvature processing- Marathon systems, and other competitive sports data compilation systems- Competitive event management systems for track & field events(national, international, etc.), golf tournaments, handicapped sports,
ballet and other competitions.
- Conference and event management systems for shareholder meeting
management support, visitor management, membership management,
and product campaigns- Sports arena and conference infrastructure control systems including
electronic boards, visual display equipment control, and LAN
coordination

Japan System
Techniques Co., Ltd.

6

JAST TECHNIQUES
PTE. LTD.
JASTEC(THAILAND) CO.,LTD.
NewNeeds Co., Ltd.
SafeNeeds Co., Ltd.
GuiLin Anxin
Software Co., Ltd.

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/14

Businesssegment
Packagebusiness

Field

Content

Company name

Strategic
university
management
system- Large-scale university-edition ERP “GAKUEN REVOLUTION EX”
series development, sales, maintenance, introduction support, andcontract development of related systems- School office work support integrated system “GAKUEN EX” series
development, sales, maintenance, introduction support, and contractdevelopment of related systems- University integrated web service system “GAKUEN UNIVERSALPASSPORT EX” development, sales, maintenance, introduction
support, and contract development of related systems- School operations system consultation, end-user computing (EUC)
support, and business process reengineering (BPR) support andoperation services

Japan System
Techniques Co., Ltd.

Systemsales
business

Information
systemequipment sales- Sale and maintenance of computers, network equipment, and software
packages- Provision of system solutions for universities and public bodies- Information communications network construction

Alpha Computer Co.,Ltd.

Medicalbig data
business

Inspection,
analysis andrelated servicesof medical
information- Automated inspection services for health insurance claims“JMICS”(JAST Medical Insurance Checking System)- Systems for medical information services sector including medical
expense notices- Cloud services for checking service providers

Japan System
Techniques Co., Ltd.

Alpha Computer Co.,Ltd.

The diagram below provides a visual representation of the positioning and relationships of businesses within the Group.
Clients
Sale of products,
etc.
Consolidated subsidiary
Alpha Computer Co., Ltd.
(Head office: Tokyo)

Software development,
package sales and medical
information services

Consolidated subsidiary
NewNeeds Co., Ltd.
(Head office: Osaka)

Software development
Consolidated subsidiary
GuiLin Anxin Software Co., Ltd.
(Head office: Guilin, China)

Software development
Consolidated subsidiary
SafeNeeds Co., Ltd.
(Head office: Osaka)
Sale of packages, etc.

Consolidated subsidiary
JASTEC (THAILAND) CO., LTD.
(Head office: Bangkok, Thailand)

Japan System Techniques Co., Ltd.

Software development

Software development

Software development
Consolidated subsidiary
JAST TECHNIQUES PTE. LTD.
(Head office: Singapore)

Investments

Related company
JUST Co., Ltd.
(Head office: Osaka)* Since the executives of SafeNeeds own all shares of GuiLin Anxin Software Co., Ltd. and constitute a majority of thenumber of the Board of Representatives, GuiLin Anxin Software is effectively under the control of the Company andincluded in consolidation.

7

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/14

3. Management Policies(1) Basic Management Policy
Japan System Techniques, since its founding, has maintained its complete independence, unaffiliated with any group,
based on the motto of “creating and providing information technology to contribute to society.” While challenging thefrontiers of the latest technologies, the Company has worked on systems development independent of any specificindustry, technology field, or manufacturer. As a comprehensive information services provider, this independence has
allowed it to meet an extremely wide variety of needs as the description in “2. Corporate Group” on page 6 shows. Thisis a major strength of the Company and has contributed significantly to its stable earnings growth. It is the passion ofeach and every employee towards information systems development, and sincerity in dealing with clients, that drives
this growth. As such, the Company believes in “developing human resources” based on the management philosophy
that the most important management priority is for each and every employee to polish his or herself.
(2) Performance Targets
The Company understands the importance of achieving the sales and profit targets it discloses every fiscal year.
From the standpoint of improving enterprise value by seeking returns on shareholders’ equity, the Company aims forearnings per share (EPS), which reached 121.58 yen in the fiscal year ended March 31, 2006 due to one-off factors that
lifted net income, to exceed 100 yen (EPS was 57.03 yen in the fiscal year under review) in an early future throughimproving the profitability of core businesses. The Company also aims to further improve the ratio of net income toshareholders’ equity, or ROE, which was 5.9% on a consolidated basis in the fiscal year under review.
(3) Medium- and Long-term Business Strategy
A key strength of the Company is that, through a business strategy of covering a wide variety of fields while also
focusing deeply on each and staying ahead of the latest technologies, it can maintain stable earnings, unaffected bybusiness environment changes such as the boom-bust cycles of specific industries or changes in technology trends,
while at the same time aiming for long-term growth.
However, in the uncertain 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 will maintain its long-term contract development business with large clients, itstraditional earnings foundation, while also believes it is vital to develop proprietary brand products and services capableof creating new demand and attracting new clients, and to create new growth drivers capable of reforming the businessformat by globalizing and expanding its alliances, including through M&A activity. Concrete initiatives includecommercializing proprietary brand services including healthcare-related services, integrated package solutions forfinancial institutions, and smartphone apps. Also, the Group began building alliances including with Chinese firms. To
translate these initiatives into new sources of earnings, the Group will focus on enriching its products and services,conducting marketing activities, and strengthening its management structure. Also, to further strengthen the growth base,it will continue to improve project management technologies, increase added value by enriching the solutions menu,
and introduce intensive training and personnel systems capable of nurturing top-class talent.

8Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/14(4) Challenges
Please see “1. Analysis of Results of Operations and Financial Position, (1) Analysis of Results of Operations, 2)
Forecasts for the new fiscal year” on page 2 for a description of current conditions and challenges in the IT industry and
the Group. Based on these understandings, Each and every employee has a strong commitment to adapt swiftly tochanges involving clients, technologies and markets with the goal of maximizing earnings from activities that match thecharacteristics of each market sector. Activities in the fiscal year ending on March 31, 2015 will be guided by the fiscal
year slogan “generating the best results by reading markets accurately and acting with thought and speed.” In addition,
we have established the following nine key challenges.
1) Have all employees go on the offense and lead the times to make change
2) Have each of the Kanto and Kansai divisions move forward with management with the mind of an independentcompany
3) Shift to an operating structure in which businesses are headed by executive officers
4) Release the next-generation GAKUEN package to control the market in Japan and speed up growth in China
5) Create powerful brands with innovative management that utilizes the distinctive strengths of each group company
6) Grow in global markets and sustain this growth7) Set the stage for more growth by making all employees “problem solving experts”
8) Pass the baton to a new generation of leaders at each management level
9) Promote corporate reforms by improving the personnel system and rebuilding internal systems

9

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/14

4. Consolidated Financial Statements(1) Consolidated Balance Sheet(Thousands of yen)
FY3/14(As of Mar. 31, 2014)

FY3/13(As of Mar. 31, 2013)
AssetsCurrent assets
Cash and deposits

2,938,177

3,319,585

Notes and accounts receivable-trade

2,337,520

2,607,749

Merchandise and finished goods

145,160

97,394Work in process

291,906

167,776

Raw materials and supplies

3,112

2,347

Deferred tax assets

194,068

259,362

Other

224,350

112,940

Allowance for doubtful accounts(3,056)(3,863)

6,131,241

6,563,292

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

*2

Land

*2

Other

550,476

551,886(232,452)(270,155)

318,024*2

142,361*2

281,730
142,361

240,953

252,174(144,711)(171,771)

96,24280,402556,627

504,495

Goodwill

35,33827,023

Software

18,56396,422

Other

7,189

7,189

Total intangible assets

61,091

130,635

233,938

362,629

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

Investments and other assets
Investment securities
Long-term loans receivable

2,694

-

-

257,001

Deferred tax assets

245,413

234,645

Guarantee deposits

329,950

299,440

Prepaid pension cost

115,869-

Net defined benefit asset

Other

*1,*2

433,876*1,*2

519,352

Allowance for doubtful accounts(60,549)(54,288)

Total investments and other assets

1,301,192

1,618,782

1,918,912

2,253,912

8,050,153

8,817,204

Total non-current assets
Total assets

10Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/14(Thousands of yen)
FY3/14(As of Mar. 31, 2014)

FY3/13(As of Mar. 31, 2013)
Liabilities
Current liabilities
Notes and accounts payable-trade901,615906,653

Short-term loans payable

17,309-Current portion of long-term loans payable

2,400

2,400

Income taxes payable

154,452

293,658

Provision for bonuses

383,366

531,526

Provision for directors’ bonuses

24,82928,477

Other

710,917

601,663

2,194,889

2,364,379

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

4,200

1,800

Provision for retirement benefits

888,617-

Provision for directors’ retirement benefits

397,697

422,029

Net defined benefit liability
Other
Total non-current liabilities
Total liabilities-

903,730

75,20958,856

1,365,724

1,386,415

3,560,614

3,750,795

924,223

1,071,446

Net assets
Shareholders’ equity
Capital stock
Capital surplus

885,862

1,033,084

Retained earnings

2,865,993

3,025,811

Treasury shares(266,494)(266,539)

Total shareholders’ equity

4,409,584

4,863,803

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

34,41452,191

Foreign currency translation adjustment(14,720)(14,936)

Remeasurements of defined benefit plans-

91,15019,694

128,405

984

514

Total accumulated other comprehensive income
Subscription rights to shares
Minority interests

59,27573,686

Total net assets

4,489,539

5,066,409

8,050,153

8,817,204

Total liabilities and net assets

11Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/14(2) Consolidated Statements of Income and Comprehensive Income
Consolidated Statement of Income
FY3/13(Apr. 1, 2012 – Mar. 31, 2013)(Thousands of yen)
FY3/14(Apr. 1, 2013 – Mar. 31, 2014)

Net sales

10,139,381

10,828,399

Cost of sales

8,094,068

8,649,893

Gross profit

2,045,313

2,178,505

Selling, general and administrative expenses*1,*2

Operating income

1,731,089*1,*2

1,750,890

314,223

427,615Interest income

9,338

10,176

Dividend income

3,768

5,411

Foreign exchange gains

5,506

7,997

Rent income

14,876

14,569Commission fee

1,974

1,864

Subsidy income

4,096

19,779Other

15,945

9,526

Total non-operating income

55,50669,324

2,036

1,673

Rent expenses

9,483

15,845

Other

2,266

5,341

Total non-operating expenses

13,78622,861

Ordinary income

355,943

474,078

Income before income taxes and minority interests

355,943

474,078

Income taxes-current

165,471304,470

Income taxes-deferred

15,217(116,444)

Total income taxes

180,688

188,025

Income before minority interests

175,255

286,052

Non-operating income

Non-operating expenses
Interest expenses

Minority interests in income
Net income

12

6,368

7,129

168,886

278,922

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/14

Consolidated Statement of Comprehensive Income
FY3/13(Apr. 1, 2012 – Mar. 31, 2013)(Thousands of yen)
FY3/14(Apr. 1, 2013 – Mar. 31, 2014)

175,255

286,052

Valuation difference on available-for-sale securities

15,363

17,776

Foreign currency translation adjustment

3,093

7,909

Income before minority interests
Other comprehensive income

Total other comprehensive income*1

Comprehensive income

18,457*1

25,685

193,712311,738

Comprehensive income attributable to owners of the parent

181,001

296,482

Comprehensive income attributable to minority interests

12,711

15,255Comprehensive income attributable to13

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/14(3) Consolidated Statement of Changes in Equity
FY3/13 (Apr. 1, 2012 – Mar. 31, 2013)(Thousands of yen)
Shareholders’ equity
Capital stock
Balance at beginning ofcurrent period
Changes of items during
periodIssuance of newshares-exercise ofsubscription rights to shares

Capital surplus

919,665

881,304

4,558

4,558

Retained earnings

Total shareholders’equityTreasury shares

2,815,796(266,494)

4,350,271

9,116

Dividends of surplus(118,689)(118,689)

Net income

168,886

168,886

Purchase of treasury shares
Net changes of items otherthan shareholders’ equity
Total changes of items
during period
Balance at end of current
period

-

-

4,558

4,558

50,197-59,313924,223885,8622,865,993(266,494)

4,409,584

Accumulated other comprehensive income
Valuationdifference on
available-for-salesecurities
Balance at beginning ofcurrent period
Changes of items during
periodIssuance of newshares-exercise ofsubscription rights to shares

19,051

Foreigncurrencytranslation
adjustment

Remeasurementsof defined benefit
plans(11,471)-

Total accumulated Subscription
Minorityrights tootherinterests
sharescomprehensive

Total net
assetsincome
7,579

1,001

27,305

4,386,158

9,116

Dividends of surplus(118,689)

Net income

168,886

Purchase of treasury shares
Net changes of items otherthan shareholders’ equity
Total changes of items
during period
Balance at end of current
period15,363(3,248)-

12,114(16)

31,97044,06815,363(3,248)-

12,114(16)

31,970103,381

34,414(14,720)-

19,694984

59,275

4,489,539

14

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/14

FY3/14 (Apr. 1, 2013 – Mar. 31, 2014)(Thousands of yen)
Shareholders’ equity
Capital stock
Balance at beginning ofcurrent period
Changes of items during
periodIssuance of newshares-exercise ofsubscription rights to shares

Capital surplus

924,223885,862

147,222

147,222

Retained earnings

Treasury shares

2,865,993

Total shareholders’equity(266,494)

4,409,584

294,445

Dividends of surplus(119,104)(119,104)

Net income

278,922

278,922

Purchase of treasury shares
Net changes of items otherthan shareholders’ equity
Total changes of items
during period
Balance at end of current
period(44)(44)

147,222

147,222

159,817(44)454,218

1,071,446

1,033,084

3,025,811(266,539)

4,863,803

Accumulated other comprehensive income
Valuationdifference on
available-for-salesecurities
Balance at beginning ofcurrent period
Changes of items during
periodIssuance of newshares-exercise ofsubscription rights to shares

34,414Foreigncurrencytranslation
adjustment

Remeasurementsof defined benefit
plans(14,720)-

Total accumulated Subscription
Minorityrights tootherinterests
sharescomprehensive

Total net
assetsincome19,694984

59,275

4,489,539

294,445

Dividends of surplus(119,104)

Net income

278,922

Purchase of treasury shares
Net changes of items otherthan shareholders’ equity
Total changes of items
during period
Balance at end of current
period(44)
17,776(216)

91,150108,711(470)

14,411

122,651

17,776(216)

91,150108,711(470)

14,411

576,870

52,191(14,936)

91,150128,405514

73,686

5,066,409

15

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/14(4) Consolidated Statement of Cash Flows(Thousands of yen)
FY3/13
FY3/14(Apr. 1, 2012 – Mar. 31, 2013) (Apr. 1, 2013 – Mar. 31, 2014)
Cash flows from operating activities
Income before income taxes and minority interests

355,943

474,078

Depreciation

66,46875,537

Amortization of software

8,819

14,165

Amortization of goodwill

6,236

8,314

Increase (decrease) in provision for bonuses(16,167)

148,160

Increase (decrease) in provision for retirement benefits

38,725-Decrease (increase) in prepaid pension costs

9,104

-

Decrease (increase) in net defined benefit asset-(15,640)

Increase (decrease) in net defined benefit liability-

30,161(13,106)(15,587)

Interest and dividend income
Interest expenses

2,036

1,673

(504,480)(266,261)

Decrease (increase) in inventories

17,135

173,816

Increase (decrease) in notes and accounts payable-trade239,856

4,745

Other, net

153,052(85,198)

Subtotal

363,624

547,965Interest and dividend income received

13,383

15,222

Decrease (increase) in notes and accounts receivable-trade

Interest expenses paid

(2,036)(1,720)

Income taxes paid

(193,446)(168,049)

Net cash provided by (used in) operating activities

181,525

393,417

Cash flows from investing activities
Decrease (increase) in time deposits(338)

59,057Purchase of property, plant and equipment(208,669)(18,670)

Proceeds from reversal of insurance funds

-

8,642

Purchase of software(5,742)(92,324)

Purchase of investment securities(2,128)(102,054)

Payments for guarantee deposits(197,157)(1,429)Proceeds from collection of guarantee deposits

16,959138,420

Payments for asset retirement obligations
Purchase of share of subsidiaries resulting in change in scopeof consolidation
Other, net(33,739)-(18,788)-127(5,130)Net cash provided by (used in) investing activities(449,477)(13,489)(867)(20,312)

Cash flows from financing activities
Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable

7,800

-

Repayment of long-term loans payable(42,287)(2,400)

Proceeds from issuance of common shares
Cash dividends paid

9,099

293,974(118,689)(119,104)

Cash dividends paid to minority shareholders(478)(1,283)

Other, net(270)(1,097)(145,693)

149,776

Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents

7,903

4,403

Net increase (decrease) in cash and cash equivalents(405,741)

534,108

Cash and cash equivalents at beginning of period

2,015,704

1,609,962

Cash and cash equivalents at end of period*116

1,609,962*1

2,144,070

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/14(5) Notes to Consolidated Financial Statements
Going Concern Assumption
Not applicable.

Significant Accounting Policies in the Preparation of Consolidated Financial Statements
1. Scope of consolidation
Number of consolidated subsidiaries: 6
Names of consolidated subsidiaries:
JAST TECHNIQUES PTE. LTD.
JASTEC (THAILAND) CO., LTD.
Alpha Computer Co., Ltd.
NewNeeds Co., Ltd.
SafeNeeds Co., Ltd.
GuiLin Anxin Software Co., Ltd.
Since the executives of SafeNeeds own all shares of GuiLin Anxin Software Co., Ltd. and constitute a majority of the numberof the Board of Representatives, GuiLin Anxin Software is effectively under the control of the Company and included inconsolidation.
2. Application of equity method
The Company has no subsidiaries and affiliates accounted for by the equity method.
3. Fiscal year of consolidated subsidiaries
At the three overseas consolidated subsidiaries, the fiscal year under review ended on December 31, 2013. The consolidated
financial statements include the financial statements of these consolidated subsidiaries as of December 31, 2013. Necessary
adjustments have been made for the consolidation concerning material transactions arising between January 1, 2014 and March
31, 2014.
The fiscal year of the three consolidated subsidiaries in Japan ends on the closing date of consolidated financial statements.
4. Accounting standards(1) Valuation standards and methods for principal assets
1) Marketable securities
Available-for-sale securities
Securities with market quotations
Stated at fair value at the end of the fiscal year. (Unrealized gain or loss is included in net assets. Cost of securities sold isdetermined by the moving-average method.)
Securities without market quotations
Stated at cost determined by the moving-average method.
2) Inventories
a. MerchandiseStated at cost determined by the specific identification method. (The carrying value on the balance sheet is written down toreflect the effect of lower profit margins.)
b. Finished goods
Stated at cost determined by the periodic average method. (The carrying value on the balance sheet is written down to reflect
the effect of lower profit margins.)c. Work in process
Stated at cost determined by the specific identification method. (The carrying value on the balance sheet is written down toreflect the effect of lower profit margins.)

17

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/14

d. Supplies
Valued by the last purchased price method.
(2) Depreciation and amortization of significant depreciable assets
1) Property, plant and equipment (excluding leased assets)
Depreciation of property, plant and equipment at the Company and its consolidated subsidiaries in Japan is calculated by the
declining-balance method, and at the overseas consolidated subsidiaries by the straight-line method.
Useful life of principle assets is as follows:
Buildings and structures:
10-35 years
Other
4-10 years
2) Intangible assets (excluding leased assets)
Amortization of intangible assets is calculated by the straight-line method.
Software is amortized over an expected internal useful life of 3-5 years by the straight-line method.
3) Leased assets
Depreciation of leased assets is calculated based on the straight-line method, assuming the lease period to be the useful life
and a residual value of zero.
4) Investments and other assets (other)
Declining-balance method, except for buildings acquired on or after April 1, 1998 (excluding attached structures) on which
depreciation is calculated by the straight-line method.
Useful life of investments and other assets (other) is 47 years (buildings).
(3) Recognition of significant allowances
1) Allowance for doubtful accounts
To prepare for credit losses on accounts receivable, allowances equal to the estimated amount of uncollectible receivables areprovided for general receivables based on the historical write-off ratio, and bad receivables based on case-by-casedetermination of collectibility.
2) Provision for bonuses
To provide for employee bonus obligation, the Company and its certain consolidated subsidiaries in Japan provide anallowance equal to the estimated bonus obligations.
3) Provision for directors’ retirement benefits
To provide for directors’ retirement benefits, the Company and its certain consolidated subsidiaries in Japan provide anallowance for the aggregate amount payable at the end of the current fiscal year pursuant to the Company’s rules on
directors’ retirement benefits.
4) Provision for directors’ bonuses
To provide for directors’ bonuses, the Company and certain consolidated subsidiaries in Japan provide an allowance equal tothe estimated bonus obligations in the current fiscal year.
(4) Accounting method for retirement benefits
1) Method of attributing estimated retirement benefit obligations to periods
In calculation of retirement benefit obligations, the Company uses the periodic straight line method for attributing estimatedretirement benefit obligations to periods.
2) Amortization of actuarial differences and prior service costs
Prior service cost is amortized by the declining-balance method over a certain period (10 years) within estimated averageremaining years of service of the eligible employees.

18Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/14

Actuarial differences are amortized and charged to expense in the year following the fiscal year in which such gain or loss isrecognized by the declining-balance method over a certain period (10 years) which is within the estimated average remaining
years of service of the eligible employees.
(5) Recognition of significant revenues and expenses
Recognition criteria for revenues and cost of sales for contracted software production
1) Contracts of which the outcome can be reliably estimated
The percentage-of-completion standard (with the percentage of completion estimated on the cost-to-cost basis).
2) Other contracted work
The completed-contract standard.
(6) Method and period of goodwill amortization
Goodwill is amortized over 5 years by the straight-line method.
(7) Scope of cash and cash equivalents on consolidated statement of cash flows
Cash and cash equivalents consist of vault cash, deposits that can be withdrawn on demand, and time deposit with maturities
less than 3 months.
(8) Other significant accounting policies in the preparation of consolidated financial statements
Accounting for consumption taxes
National and local consumption taxes are accounted by the tax-exclusion method. Non-deductible national and local
consumption taxes are charged to expenses in the current fiscal year.

Changes in Accounting Policies
Application of the accounting standard for retirement benefits
Following the application of the “Accounting Standard for Retirement Benefits (Accounting Standards Board of Japan (ASBJ)
Statement No. 26, May 17, 2012; excluding the provisions set forth in Clause 35) and “Guidance on Accounting Standard for
Retirement Benefits (ASBJ Guidance No. 25, May 17, 2012; excluding the provisions set forth in Clause 67),” the Company haschanged its accounting treatment to record the retirement benefit obligations as a net defined benefit liability or a net defined benefit
assets after deducting plan assets, and recorded the unrecognized actuarial differences and unrecognized prior service costs as a net
defined benefit liability and a net defined benefit assets from the current fiscal year.
For the application of this accounting standard, in accordance with the transitional accounting treatments set forth in Clause 37 of the
Accounting Standard for Retirement Benefits, the monetary effect of this change has been included in the remeasurements of defined
benefit plans of accumulated other comprehensive income at the end of the current fiscal year.
The result was a net defined benefit assets of 257,001 thousand yen, a net defined benefit liability of 903,730 thousand yen, and anincrease of 91,150 thousand yen in accumulated other comprehensive income at the end of the current fiscal year.
Net assets per share increased 17.43 yen.

Accounting Standards, Others That Have Not Yet Been Applied- Accounting Standard for Retirement Benefits ASBJ Statement No. 26, May 17, 2012)- Guidance on Accounting Standard for Retirement Benefits (ASBJ Guidance No. 25, May 17, 2012)
1. Summary
The revisions to the accounting standards include accounting method for unrecognized actuarial differences and unrecognizedprior service costs, calculation method of retirement benefit obligation and service costs, as well as the expansion of disclosure.
2. Effective date
The above changes in the calculation method for retirement benefit obligation and service costs will be effective at the beginningof the fiscal year ending March 31, 2015.

19

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/14

As the transitional measures were established, the Company does not apply these standards retrospectively to the consolidated
financial statements in prior periods.
3. Effects of the application of the above accounting pronouncements
The effects of the application of above accounting pronouncements, the Company expects deferred tax assets and net defined
benefit liability to decrease 97,473 thousand yen and 169,824 thousand yen, respectively, and net defined benefit assets andretained earnings to increase 103,978 thousand yen and 176,328 thousand yen, respectively, at the beginning of the fiscal year
ending March 31, 2015.
In addition, operating income, ordinary income, and income before income taxes and minority interests are expected to be
increased by 5,881 thousand yen each in the fiscal year ending March 31, 2015.

Reclassifications(Consolidated statement of income)“Foreign exchange gains,” included in “Other” under non-operating income in the previous fiscal year, is reclassified and presented
as a separate line item in the current fiscal year since the amount exceeded 10/100 of total non-operating income. The prior-period
consolidated financial statements are restated to conform to the current-period presentation.
“Other” under non-operating income (21,451 thousand yen) shown in the prior-period consolidated statement of income isreclassified and divided into “Foreign exchange gains” (5,506 thousand yen) and “Other” (15,945 thousand yen).
“Loss on retirement of non-current assets” under non-operating expenses, presented as separate items in the previous fiscal year, areincluded in “Other” in the current fiscal year given the reduced materiality of impact of the amount on the consolidated financial
statements. The prior-period consolidated financial statements are restated to conform to the current-period presentation.
“Loss on retirement of non-current assets” (123 thousand yen) under non-operating expenses shown in the prior-period consolidated
statement of income are reclassified and included in “Other.”(Consolidated statement of cash flows)“Purchase of investment securities” and “Proceeds from collection of guarantee deposits,” included in “Other, net” under cash flows
from investing activities in the previous fiscal year, is reclassified and presented as a separate line item in the current fiscal year since
they have increased materiality in the context of financial statements. The prior-period consolidated financial statements are restatedto conform to the current-period presentation.
“Other, net” under cash flows from investing activities (14,958 thousand yen) shown in the prior-period consolidated statement ofcash flows is reclassified and divided into “Purchase of investment securities” (-2,128 thousand yen), “Proceeds from collection ofguarantee deposits” (16,959 thousand yen) and “Other, net” (127 thousand yen).

Changes in Accounting-based Estimates
Not applicable.

Additional Information
Not applicable.

20

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/14

Notes to Consolidated Balance Sheet*1. Accumulated depreciation on investments and other assets (other)(Thousands of yen)
FY3/13(As of Mar. 31, 2013)

FY3/14(As of Mar. 31, 2014)
185,744

188,964*2. Assets pledged as collateral
FY3/13(As of Mar. 31, 2013)
61,903
142,361
133,172
337,437

Buildings and structures, net
Land
Investments and other assets (other)
Total(Thousands of yen)
FY3/14(As of Mar. 31, 2014)
57,751
142,361
130,553
330,666

3. The Company has commitment line agreements with 4 banks, in order to raise funds efficiently. The balances of credit
available as of the balance sheet date were as follows.
(Thousands of yen)
FY3/13
FY3/14(As of Mar. 31, 2013)(As of Mar. 31, 2014)
Commitment line
500,000
500,000
Credit used
Credit available
500,000
500,000

Notes to Consolidated Statement of Income*1. Major items of selling, general and administrative expenses(Thousands of yen)
FY3/13
FY3/14(Apr. 1, 2012 – Mar. 31, 2013) (Apr. 1, 2013 – Mar. 31, 2014)
166,408
158,732
673,424
726,462
62,431
89,62724,09126,80525,75624,33233,222
32,164
176,509
156,706

Directors’ compensations
Wages, salaries and other allowances
Provision for bonuses
Provision for directors’ bonuses
Provision for directors’ retirement benefits
Retirement benefit expenses
Research and development expenses*2. Total amount of research and development expenses included in general and administrative expenses(Thousands of yen)
FY3/14(Apr. 1, 2013 – Mar. 31, 2014)
156,706

FY3/13(Apr. 1, 2012 – Mar. 31, 2013)
176,50921

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/14

Notes to Consolidated Statement of Comprehensive Income*1. Re-classification adjustments and tax effect with respect to other comprehensive income(Thousands of yen)
FY3/13
FY3/14(Apr. 1, 2012 – Mar. 31, 2013) (Apr. 1, 2013 – Mar. 31, 2014)
Valuation difference on available-for-sale securities:
Amount incurred during the year
Re-classification adjustments
Before tax effect adjustments
Tax effect
Valuation difference on available-for-sale securities
Foreign currency translation adjustment:
Amount incurred during the year
Total other comprehensive income

23,842
23,842(8,479)15,36327,923(306)
27,617(9,840)17,776

3,093
18,457

7,909
25,685

Notes to Consolidated Statement of Changes in Equity
FY3/13 (Apr. 1, 2012 – Mar. 31, 2013)
1. Type of share and the number of outstanding shares and treasury shares
Number of shares
as of Apr. 1, 2012

(Shares)

Increase

Number of shares
as of Mar. 31, 2013

Decrease

Outstanding shares
Common stock (Note)

5,111,730

16,600-5,128,330

5,111,730

16,600-5,128,330

Common stock

364,140--

364,140

Total

364,140--

364,140

Total
Treasury shares

Note: Number of outstanding shares of common stock increased 16,600 shares due to exercise of subscription rights to shares.
2. Items related to subscription rights to shares and treasury subscription rights to shares

Item

Reportingcompany

Subscription rights toshares (itemized)

Number of shares under subscription rights to shares
Type of shares(Shares)
undersubscription
As of Mar.
As of Apr. 1,
Increase
Decreaserights to shares
31, 2013
2012

Subscription rights toshares (2011)

Common stock

991,500-

16,600974,900

984-

991,500-

16,600974,900

984

Total
Notes:

Balance as ofMar. 31, 2013
(Thousands ofyen)

1. Number of shares under subscription rights to shares is the number of shares assuming that all subscription rights havebeen exercised.
2. Number of subscription rights to shares (2011) decreased due to the exercise of subscription rights to shares.

3. Dividends(1) Dividend payment
Resolution

Total dividends(Thousands of yen)Type of share

Board of Directors’ meeting on
Common stock
May 9, 2012

Dividend pershare (yen)Record date

Effective date25

March 31, 2012

June 6, 2012

118,689(2) Dividends with a record date in the current fiscal year but an effective date in the following fiscal year
Resolution

Type ofshare

Total dividends(Thousands ofyen)

Source of funds

Board of Directors’ meeting on
May 10, 2013

Commonstock

119,104

Retained earnings

22

Dividend pershare (yen)Record date

25 March 31, 2013

Effective dateJune 6, 2013

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/14

FY3/14 (Apr. 1, 2013 – Mar. 31, 2014)
1. Type of share and the number of outstanding shares and treasury shares
Number of shares
as of Apr. 1, 2013

(Shares)

Increase

Number of shares
as of Mar. 31, 2014

Decrease

Outstanding shares
Common stock (Note 1)

5,128,330

465,900-

5,594,230

Total

5,128,330

465,900-

5,594,230

Common stock (Note 2)

364,14070-

364,210

Total

364,14070-

364,210

Treasury shares

Notes: 1. Number of outstanding shares of common stock increased 465,900 shares due to exercise of subscription rights to shares.
2. Number of treasury shares of common stock increased 70 shares due to acquisition of odd-lot shares.
2. Items related to subscription rights to shares and treasury subscription rights to shares

Item

Reportingcompany

Subscription rights toshares (itemized)

As of Apr. 1,
2013

Subscription rights toshares (2011)

Common stock

974,900-

974,900

Total
Notes:

Number of shares under subscription rights to shares(Shares)

Type of shares
undersubscription
rights to shares

Decrease

As of Mar.
31, 2014

Balance as ofMar. 31, 2014
(Thousands ofyen)-

465,900

509,000

514-

465,900

509,000

514

Increase

1. Number of shares under subscription rights to shares is the number of shares assuming that all subscription rights havebeen exercised.
2. Number of subscription rights to shares (2011) decreased due to the exercise of subscription rights to shares.

3. Dividends(1) Dividend payment
Resolution

Total dividends(Thousands of yen)Type of share

Board of Directors’ meeting on
Common stock
May 10, 2013

Dividend pershare (yen)Record date

Effective date25

March 31, 2013

June 6, 2013

119,104(2) Dividends with a record date in the current fiscal year but an effective date in the following fiscal year
Resolution

Type ofshare

Total dividends(Thousands ofyen)

Source of funds

Board of Directors’ meeting on
May 12, 2014

Commonstock

130,750

Retained earnings

Dividend pershare (yen)Record date

25 March 31, 2014

Effective dateJune 6, 2014

Notes to Consolidated Statement of Cash Flows*1. Reconciliation of cash and cash equivalents at the end of the fiscal year and amount of balance sheet is made as follows.
(Thousands of yen)
FY3/13
FY3/14(Apr. 1, 2012 – Mar. 31, 2013)(Apr. 1, 2013 – Mar. 31, 2014)
Cash and deposits
2,938,177
3,319,585
Time deposit with maturities over 3 months(1,328,215)(1,175,514)

Cash and cash equivalents

1,609,962

2,144,070

23

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/14

Marketable Securities
1. Available-for-sale securities
FY3/13 (As of Mar. 31, 2013)(Thousands of yen)
Type
Securities withcarrying value
exceeding acquisition
costs
Securities withcarrying value notexceeding acquisition
costs

Carrying value

Acquisition costs

Unrealized gain (loss)

Shares124,729

87,96036,768

Bonds

99,40081,327

18,073

224,129

169,287

54,841

Shares9,110

10,245(1,134)

Bonds

698

980

(281)

9,809

11,225(1,416)

233,938

180,51253,425

Subtotal

Subtotal
Total

FY3/14 (As of Mar. 31, 2014)(Thousands of yen)
Type
Securities withcarrying value
exceeds acquisition
costs
Securities withcarrying value notexceeding acquisition
costs

Carrying value

Acquisition costs

Unrealized gain (loss)

Shares262,709200,260

62,449Bonds

99,92081,327

18,593362,629

281,587

81,042

Shares

-

-

-

Bonds

-

-

-

-

-

-

362,629

281,587

81,042

Subtotal

Subtotal
Total

2. Sales of other securities
FY3/13 (Apr. 1, 2012 – Mar. 31, 2013)
Not applicable.
FY3/14 (Apr. 1, 2013 – Mar. 31, 2014)
Type(Thousands of yen)
Sales amount

Aggregate gain

Aggregate loss

Shares

-

-

-

Bonds

1,005

306

-

Others

-

-

-

1,005

306

-

Total
3. Other securities written down due to impairment
Not applicable in FY3/13 and FY3/14.

Impairment loss is recognized for other securities in the case where the fair value at the end of each quarterly period is at the level of
50% or less of the acquisition cost or the fair value at the end of half period is at the level of more than 50% but not more than 70%of the acquisition cost for two consecutive periods, the whole difference is impaired.

Derivative Transactions
Not applicable because the Group had no derivative transactions.

24

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/14

Retirement Benefits
FY3/13 (Apr. 1, 2012 – Mar. 31, 2013)
1. Retirement benefit plans
The Company has adopted defined benefit plans, which are a lump-sum retirement benefit payment plan in line with theCompany’s regulation, and a defined benefit pension plan as well as a defined contribution pension plan. The Company
participates in the Japan Computer Information Service Employee’s Pension Fund, and this welfare pension fund is applied by
the exceptional treatment as stipulated by Clause 33 of the Practical Guidance for Accounting for Retirement Benefits. The
amount to be contributed to plan assets accounted for as retirement benefit expenses was 28,924 thousand yen in the
consolidated financial statements for FY3/13.
Alpha Computer Co., Ltd. has adopted a lump-sum retirement benefit payment plan as defined benefit plan, and participates in
the Kanto IT Software Welfare Pension Fund. The amount to be contributed to plan assets accounted for as retirement benefit
expenses was 1,192 thousand yen in the consolidated financial statements for FY3/13.
NewNeeds Co., Ltd. participates in the Small Enterprise Retirement Allowance Mutual Aid Fund for retirement fund. The
amount to be contributed to plan assets accounted for as retirement benefit expenses was 1,581 thousand yen in the consolidated
financial statements for FY3/13.
An overseas consolidated subsidiary has a retirement benefit plan based on its local program.
Following is the information regarding the multi-employer pension plan under which the amount to be contributed to plan assets is
accounted for as retirement benefit expenses.
Japan Computer Information Service Employees' Pension Fund
(1) Information regarding funding status of the plan as a whole (as of March 31, 2012)(Thousands of yen)Amount of plan assets
470,484,694
Amount of actuarially computed benefit obligation
522,506,206
Difference(52,021,511)(2) The percentage of contribution by the Company out of the total contribution to the plan
0.39% (From April 1, 2011 to March 31, 2012)
Kanto IT Software Welfare Pension Fund
(1) Information regarding funding status of the plan as a whole (as of March 31, 2012)(Thousands of yen)Amount of plan assets
186,189,698
Amount of actuarially computed benefit obligation
186,648,697
Difference(458,998)(2) The percentage of contribution by the consolidated subsidiaries out of the total contribution to the plan
0.04% (From April 1, 2011 to March 31, 2012)
2. Retirement benefit obligations(Thousands of yen)
(1) Retirement benefit obligation(1,592,443)(2) Plan assets at fair value
896,224(3) Unfunded projected benefit obligation ((1) + (2))(696,218)(4) Unrecognized actuarial differences(74,159)(5) Unrecognized prior service cost (increase in obligation)(2,370)(6) Ne amount stated on the consolidated balance sheet ((3) + (4) + (5))(772,748)(7) Prepaid pension cost
115,869(8) Provision for retirement benefits ((6) – (7))(888,617)
Note: Retirement benefit obligation of the certain consolidated subsidiaries in Japan using the simple method.

25

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/14

3. Retirement benefit expenses(Thousands of yen)
(1) Service cost
137,030(2) Interest cost
23,879(3) Expected return on plan assets(19,080)(4) Amortization of actuarial differences
5,910(5) Amortization of prior service cost
(614)(6) Other
63,593(7) Retirement benefit expenses ((1) + (2) + (3) + (4) + (5) + (6))
210,718
Note: “(6) Other” represents premium payments for the defined contribution pension plan.
4. Assumptions used in accounting for the retirement benefit obligations(1) Periodic distribution of estimated retirement benefit obligations
Straight-line.
(2) Discount rate
1.6%(3) Expected return on assets
2.5%(4) Amortization of actuarial differences
The actuarial difference is expensed in the following fiscal years using the declining-balance method based on the certain years (10years) within the average length of remaining service period of employees.
(5) Amortization of prior service cost
The prior service cost is expensed by the declining-balance method based on the certain years (10 years) within the average length ofremaining service period of employees from the year when it is recognized.
FY3/14 (Apr. 1, 2013 – Mar. 31, 2014)
The Company has adopted defined benefit plans, which are a lump-sum retirement benefit payment plan in line with theCompany’s regulation, and a defined benefit pension plan as well as a defined contribution pension plan. The Company
participates in the Japan Computer Information Service Employee’s Pension Fund, and this welfare pension fund is applied by
the exceptional treatment as stipulated by Clause 33 of the Practical Guidance for Accounting for Retirement Benefits. The
amount to be contributed to plan assets accounted for as retirement benefit expenses was 29,547 thousand yen in the
consolidated financial statements for FY3/14.
Alpha Computer Co., Ltd. has adopted a lump-sum retirement benefit payment plan as defined benefit plan, and participates in
the Kanto IT Software Welfare Pension Fund. The amount to be contributed to plan assets accounted for as retirement benefit
expenses was 1,392 thousand yen in the consolidated financial statements for FY3/14.
NewNeeds Co., Ltd. participates in the Small Enterprise Retirement Allowance Mutual Aid Fund for retirement fund. The
amount to be contributed to plan assets accounted for as retirement benefit expenses was 2,040 thousand yen in the consolidated
financial statements for FY3/14.
An overseas consolidated subsidiary has a retirement benefit plan based on its local program.
Following is the information regarding the multi-employer pension plan under which the amount to be contributed to plan assets is
accounted for as retirement benefit expenses.

26

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/14

Japan Computer Information Service Employees' Pension Fund
(1) Information regarding funding status of the plan as a whole (as of March 31, 2013)(Thousands of yen)Amount of plan assets
553,988,242
Amount of actuarially computed benefit obligation
581,269,229
Difference(27,280,986)(2) The percentage of contribution by the Company out of the total contribution to the plan
0.41% (From April 1, 2012 to March 31, 2013)
Kanto IT Software Welfare Pension Fund
(1) Information regarding funding status of the plan as a whole (as of March 31, 2013)(Thousands of yen)Amount of plan assets
222,956,639
Amount of actuarially computed benefit obligation
206,135,147
Difference
16,821,492(2) The percentage of contribution by the consolidated subsidiaries out of the total contribution to the plan
0.04% (From April 1, 2012 to March 31, 2013)
2. Defined benefit plans(1) Reconciliation of beginning and ending balances of retirement benefit obligation(Thousands of yen)
Retirement benefit obligations at beginning of period
1,592,443
Service cost
111,779
Interest cost
25,111
Actuarial differences
7,693
Payment of retirement benefit(66,749)
Others999
Retirement benefit obligations at end of period
1,671,278(2) Reconciliation of beginning and ending balances of plan assets(Thousands of yen)896,224
22,40588,46844,052(26,535)
1,024,615

Plan assets at beginning of period
Expected return on plan assets
Actuarial differences
Contributions by the employer
Payment of retirement benefit
Plan assets at end of period(3) Reconciliation of ending balances of retirement benefit obligation and plan assets against net defined benefit liability and net
defined benefit asset recognized in the consolidated financial statements(Thousands of yen)
Retirement benefit obligation of contributory plan
767,614
Plan assets(1,024,615)(257,001)
Retirement benefit obligation of non-contributory plan903,730
Net liability / asset recognized in the consolidated balance sheet
646,729
Net defined benefit liability
Net liability / asset recognized in the consolidated balance sheet

27

903,730
646,729

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/14(4) Components of retirement benefit expenses(Thousands of yen)
111,779
25,111(22,405)(15,276)(488)
98,720Service cost
Interest cost
Expected return on plan assets
Amortization of actuarial differences
Amortization of prior service cost
Retirement benefit expenses for defined benefit plan(5) Remeasurements of defined benefit plans
Components of remeasurements of defined benefit plans(Thousands of yen)
1,881
139,656
141,538

Unrecognized prior service costs
Unrecognized actuarial differences
Total(6) Relevant information on plan assets
1) Major breakdown of plan assets

The allocation percentage by major investment category to the total amount of plan assets is presented as follows.
(%)
Bonds
50
Shares47
Cash and deposits
3
Total
100
2) Method of determining expected long-term return on assets
The expected long-term return on plan assets is determined by considering the current and expected portfolio structure of the plan
assets as well as the current and expected future long-term rate of return on various investments that comprise the plan assets.
(7) Relevant information on assumptions for actuarial calculation
Principal assumptions for actuarial calculation at the end of the fiscal year under review (presented by the weighted average).
Discount rate: 1.6%
Expected long-term return on assets: 2.5%
3. Defined contribution plan
The amount to be contributed to the defined contribution plan for the Company and its consolidated subsidiaries was 67,256
thousand yen.

Stock Options
Not applicable.

28

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/14

Tax Effect Accounting
1. Significant components of deferred tax assets and liabilities
FY3/13(As of Mar. 31, 2013)
Deferred tax assets (current)
Provision for bonuses
Accrued expenses
Accrued business office taxes
Other
Total
Deferred tax assets (noncurrent)
Provision for directors’ retirement benefits
Net defined benefit liability
Provision for retirement benefits
Allowance for doubtful accounts
Real estate for rent (land)
Asset retirement obligations
Accrued expenses
Other
Subtotal deferred tax assets
Valuation allowance
Total
Deferred tax liabilities (noncurrent)
Valuation difference on available-for-sale securities
Other
Total
Net deferred tax assets(Thousands of yen)
FY3/14(As of Mar. 31, 2014)

146,459
21,506
13,067
13,035
194,068

189,435
34,63823,683
11,606259,362

142,204
275,095
35,97920,181
24,945
5,553
21,764
525,724(239,958)
285,766

150,935
227,634
19,32620,181
18,41416,002
17,085469,580(187,305)
282,274

19,11921,23340,352
245,41328,851
18,77747,628234,645

2. Significant sources of differences between the statutory tax and effective tax rate(%)
FY3/13(As of Mar. 31, 2013)

FY3/14(As of Mar. 31, 2014)

Statutory tax rate
38.0
Adjustments
Permanent difference of entertainment expenses and other items
3.3
Residential tax for the period
1.6
Increase in valuation allowance
12.1
Amortization of goodwill
0.7
Tax credit(4.4)
Reductions of deferred tax assets at year end for adjustment due
to tax rate change
Others(0.5)
Effective tax rate
50.8
Note: Difference between statutory and effective tax rate after tax effect accounting is not presented because the difference isless than 5% of statutory effective tax in FY3/14.
3. Revised amount of deferred tax assets and deferred tax liabilities following the change in the corporate tax rate, etc.
Following the promulgation on March 31, 2014 of the “Act for Partial Revision of the Income Tax Act, etc.” (Act No. 10 of 2014),
special corporate tax for reconstruction will be no longer imposed for the fiscal years beginning on or after April 1, 2014.
Consequently, the statutory effective tax rate for the calculation of deferred tax assets and deferred tax liabilities will be loweredfrom 38.0% to 35.6% for temporary differences, which is expected to be used for the fiscal year beginning from April 1, 2014.
Due to this change in tax rates, there were a decrease of 21,438 thousand yen in deferred tax assets (after deducting deferred tax
liabilities) and an increase of 21,438 thousand yen in income taxes-deferred.

29-

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/14

Business Combinations
Not applicable.

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 isavailable and for which the Board of Directors performs periodic studies for the purposes of determining the allocation of resourcesand evaluating performance.
The Group has four reportable business segments: software business, package business, system sales business and medical big databusiness 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.
The medical big data business has been disclosed as a reportable business segment beginning from the first quarter of the current
fiscal year for enhancing group management in light of the growing monetary importance of the business. The segment
information for FY3/13 has been prepared based on the reportable segment categories after the revision as shown in “3.
Information related to net sales, profit or loss, assets, liabilities, and other items for each reportable segment.”
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
FY3/13 (Apr. 1, 2012 – Mar. 31, 2013)(Thousands of yen)

Softwarebusiness

Packagebusiness

Systemsales
business

6,484,521

1,913,044

1,649,054

5,904

-

49,192

6,490,425

1,913,044

1,698,247

Medical big
databusiness

Total

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

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

92,761 10,139,381-

10,139,381

55,097(55,097)-

92,761 10,194,478(55,097)

10,139,381-

163,655

309,153

71,572(230,157)

314,223-

314,223

4,155,642

1,160,087

1,161,305

230,500

6,707,535

1,342,617

8,050,153

Other items
Depreciation
44,317
18,974
2,133
5,998
71,424
3,863
75,288
Increase in property, plant andequipment and intangible
5,793
7,040
2,651
1,148
16,633
197,778
214,412
assets
Notes:
1. There is no adjustment to segment profit or loss because all of the operating expenses are allocated to eachreportable segment.
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 to be consistent with operating income shown on the consolidated statement ofincome.

30

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/14

FY3/14 (Apr. 1, 2013 – Mar. 31, 2014)(Thousands of yen)
Medical big
databusiness

Softwarebusiness

Packagebusiness

Systemsales
business

7,110,634

1,949,373

1,533,039

17,690-55,478

7,128,325

1,949,373

1,588,517

278,545296,960

41,219(194,966)

421,759

4,582,224

1,304,269

934,698

339,573

7,160,766

Total

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

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

235,351 10,828,399-

10,828,399

73,169(73,169)-

235,351 10,901,568(73,169)

10,828,399

5,855

427,615

1,656,438

8,817,204-

Other items
Depreciation
50,146
21,7801,844
12,71086,48286,482
Increase in property, plant andequipment and intangible
4,838
1,270
986
16,12923,22487,168110,392
assets
Notes:
1. Segment profit (loss) in the above adjustment consist mainly of corporate expenses that cannot be attributed to anyof the reportable segments.
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 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 in Japanexceed 90% of property, plant and equipment on the consolidated balance sheet.
3. Information by major client
FY3/13 (Apr. 1, 2012 – Mar. 31, 2013)
Company name

Net sales

NTT COMWARE WEST CORPORATION

916,076 thousand yen

Business segment
Software business

FY3/14 (Apr. 1, 2013 – Mar. 31, 2014)
Company name

Net sales

DUSKIN CO., LTD.

847,635 thousand yen

Information related to impairment of noncurrent assets for each reportable segment
Not applicable.

31

Business segment
Software businessJapan System Techniques Co., Ltd. (4323) Financial Results for FY3/14

Information related to goodwill amortization and the unamortized balance for each reportable segment
FY3/13 (Apr. 1, 2012 – Mar. 31, 2013)
Softwarebusiness

Packagebusiness

System sales
business

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

Amortization for the period

6,236

-

-

-

-

6,236

Balance at the end of period

35,338----35,338

FY3/14 (Apr. 1, 2013 – Mar. 31, 2014)
Softwarebusiness

Packagebusiness

System sales
business

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

Amortization for the period

8,314

-

-

-

-

8,314

Balance at the end of period

27,023----27,023

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

Related Party Information
Not applicable.

32

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/14

Per-share Information
FY3/13(Apr. 1, 2012 – Mar. 31, 2013)(Yen)
FY3/14(Apr. 1, 2013 – Mar. 31, 2014)

Net assets per share

929.70954.53

Net income per share

35.52

57.03

Diluted net income per share

35.39

56.20

Note: The basis of calculation is as follows.
(Thousands of yen)
FY3/14(As of Mar. 31, 2014)

FY3/13(As of Mar. 31, 2013)
Net assets per share
4,489,539

5,066,409

Deduction on total net assets

60,26074,200[Subscription rights to shares]

[984]

[514]

Total net assets on balance sheet[Minority interests][59,275][73,686]

Net assets applicable to common stock

4,429,279

4,992,209

4,764,190 shares

5,230,020 shares

FY3/13(Apr. 1, 2012 – Mar. 31, 2013)(Thousands of yen)
FY3/14(Apr. 1, 2013 – Mar. 31, 2014)

168,886

278,922

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

Net income per share
Net income--

168,886

278,922

4,755,128 shares

4,890,856 shares--

Increase in common stock

17,363 shares

72,340 shares[Subscription rights to shares][17,363 shares][72,340 shares]

Amount not available to common shareholders
Net income applicable to common stock
Average number of shares outstanding during period
Diluted net income per share
Adjusted to net income

Summary of potential stock not included in thecalculation of diluted net income per share since there
was no dilutive effect--

Subsequent Events
Not applicable.

Omission of Disclosure
Disclosure of the notes on financial instruments, asset retirement obligations and rental and other properties was omitted due tothe minor necessity of disclosure.

33

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/14

5. Non-consolidated Financial Statements(1) Balance Sheet
FY3/13(As of Mar. 31, 2013)(Thousands of yen)
FY3/14(As of Mar. 31, 2014)

AssetsCurrent assets
Cash and deposits

2,433,600

Notes receivable-trade2,605,211

2,874

Accounts receivable-trade*2

1,675,180

Merchandise and finished goods
Work in process

25,408*2

2,167,044

7,867

7,881

100,952

97,750Raw materials and supplies

3,053

2,312

Prepaid expenses

91,17992,679Deferred tax assets

178,488

243,183

Accounts receivable-other*2

122,411

*2

3,246

Other

5,240

11,178

Allowance for doubtful accounts(1,554)(3,466)

4,619,294

5,252,430

Total current assets
Non-current assets
Property, plant and equipment
Buildings*1

Structures

311,041*1

Tools, furniture and fixtures

*1

124

*1

84,061Land*1

Total property, plant and equipment

142,361

275,72293

68,453*1

142,361

537,588486,630

18,311

101,051

Intangible assets
SoftwareTelephone subscription right

6,180

6,180

Total intangible assets

24,491

107,231233,239

362,629

1,029,367

1,049,903

2,694

-

33,415-Investments and other assets
Investment securities
Shares of subsidiaries and affiliates
Long-term loans receivable
Long-term loans receivable from subsidiaries andaffiliates
Prepaid pension cost

*2

115,869

131,510Long-term time deposits

200,000

300,000

Deferred tax assets

239,568

276,268

Guarantee deposits

274,871274,784

Real estate for rent

*1

Membership
Insurance funds
Other

*2

133,172*1

130,553

45,32445,32431,02433,306

17,267

9,738

Allowance for doubtful accounts(97,626)(54,288)

Total investments and other assets

2,258,190

2,559,731

2,820,270

3,153,593

7,439,565

8,406,023

Total non-current assets
Total assets

34

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/14

FY3/13(As of Mar. 31, 2013)(Thousands of yen)
FY3/14(As of Mar. 31, 2014)

Accounts payable-trade*2

322,824*2

562,378

Accounts payable-other*2

202,539*2

160,525

Liabilities
Current liabilities

Accrued expenses

228,316

208,650

Income taxes payable

126,332

272,129

Accrued consumption taxes

65,96180,571

Advances received

64,17048,468Provision for bonuses

351,902493,202

Provision for directors’ bonuses

19,70921,938Other

21,10921,353

1,402,867

1,869,218

Provision for retirement benefits

865,662

889,969

Provision for directors’ retirement benefits

356,405

376,105

Provision for loss on guarantees

16,220-Total current liabilities
Non-current liabilities

Other

68,19955,4381,306,486

1,321,513

2,709,354

3,190,731

924,223

1,071,446

Legal capital surplus

885,862

1,033,084

Total capital surpluses

885,862

1,033,084

32,66532,6653,000,000

2,999,000

118,382

292,929

3,151,047

3,324,594

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

Retained earnings
Legal retained earnings
Other retained earnings
General reserve
Retained earnings brought forward
Total retained earnings
Treasury shares(266,494)(266,539)

Total shareholders’ equity

4,694,639

5,162,586

Valuation and translation adjustments
Valuation difference on available-for-sale securities

34,58752,191

Total valuation and translation adjustments

34,58752,191984

514

4,730,211

5,215,292

7,439,565

8,406,023

Subscription rights to shares
Total net assets
Total liabilities and net assets

35

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/14(2) Statement of Income
FY3/13(Apr. 1, 2012 – Mar. 31, 2013)(Thousands of yen)
FY3/14(Apr. 1, 2013 – Mar. 31, 2014)

Net sales

7,956,269

8,640,137

Cost of sales

6,357,946

6,895,403

Gross profit

1,598,322

Selling, general and administrative expenses*1

Operating income

1,376,193

1,744,734*1

1,341,586

222,129

403,147

Interest and dividend income

32,18341,747

Rent income

14,74013,696

Commission fee

1,974

1,864

Non-operating income

Interest on securities

2,400

2,400

Subsidy income

1,320

19,386

Other

10,838

6,715

Total non-operating income

63,45785,810Non-operating expenses
Interest expenses

517

853

Rent expenses

9,483

15,845

Provision for loss on guarantees

4,218

-

Provision of allowance for doubtful accounts

19,905

19,224

Other

1,939

2,333

36,06338,256

Ordinary income

Total non-operating expenses

249,523450,701

Income before income taxes

249,523450,701

Income taxes-current

124,950

269,175

Income taxes-deferred

9,185(111,126)

Total income taxes

134,135

158,049

Net income

115,387

292,65136

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/14(3) Statement of Changes in Equity
FY3/13 (Apr. 1, 2012 – Mar. 31, 2013)(Thousands of yen)
Shareholders’ equity
Capital surplus

Retained earnings
Other retained earnings

Capitalstock

Balance at beginning ofcurrent period

Legal
Total
Legal
capital capital retained
surplus surpluses earnings

919,665 881,304 881,304

32,665Generalreserve

Retainedearnings
brought
forward

Total retained
earnings

2,970,000

151,684

3,154,349

TreasurysharesTotalshareholders’equity(266,494)

4,688,824

Changes of items during period
Issuance of newshares-exercise of subscription
rights to shares

4,558

4,558

4,558

9,116

Provision of general reserve

30,000(30,000)--

Dividends of surplus(118,689)(118,689)(118,689)

Net income

115,387

115,387

115,387

Purchase of treasury shares
Net changes of items otherthan shareholders’ equity
Total changes of items during
periodBalance at end of current
period

4,558

4,558

-

-

4,558

-

30,000(33,301)(3,301)-

5,814

924,223 885,862 885,862

32,6653,000,000

118,382

3,151,047(266,494)

4,694,639

Valuation and translation adjustments
Valuation difference on
available-for-salesecurities
Balance at beginning ofcurrent period

Total valuation andtranslation adjustments

19,051

19,051

Subscription rights toshares1,001

Total net assets

4,708,877

Changes of items during period
Issuance of newshares-exercise of subscription
rights to shares

9,116

Provision of general reserve-

Dividends of surplus(118,689)

Net income

115,387

Purchase of treasury shares
Net changes of items otherthan shareholders’ equity
Total changes of items during
periodBalance at end of current
period15,535

15,535(16)

15,51915,535

15,535(16)

21,33334,587

34,587984

4,730,211

37

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/14

FY3/14 (Apr. 1, 2013 – Mar. 31, 2014)(Thousands of yen)
Shareholders’ equity
Capital surplus

Retained earnings
Other retained earnings

Capitalstock

Balance at beginning ofcurrent period

Legalcapitalsurplus

Total
Legal
capital retained
surpluses earnings

924,223885,862

885,862 32,665

147,222

147,222

147,222

Generalreserve

Retainedearnings
brought
forward3,000,000

118,382

Total
Treasuryshareholders’sharesequityTotal
retainedearnings

3,151,047 (266,494)

4,694,639

Changes of items during period
Issuance of newshares-exercise of subscription
rights to shares

294,445

Provision of general reserve(1,000)

1,000

-

-

Dividends of surplus(119,104)(119,104)(119,104)

Net income

292,651

292,651

292,651

Purchase of treasury shares
Net changes of items otherthan shareholders’ equity
Total changes of items during
periodBalance at end of current
period147,222
1,071,446

147,222

147,222-(1,000)174,547

1,033,084 1,033,084 32,665

2,999,000

292,929

(44)

(44)

(44)

467,947

3,324,594 (266,539)

5,162,586

173,547

Valuation and translation adjustments
Valuation difference on
available-for-salesecurities
Balance at beginning ofcurrent period

Total valuation andtranslation adjustments

34,587

34,587

Subscription rights toshares984

Total net assets

4,730,211

Changes of items during period
Issuance of newshares-exercise of subscription
rights to shares

294,445

Provision of general reserve-

Dividends of surplus(119,104)

Net income

292,651

Purchase of treasury shares
Net changes of items otherthan shareholders’ equity
Total changes of items during
periodBalance at end of current
period(44)
17,604

17,604(470)

17,133

17,604

17,604(470)

485,081

52,191

52,191514

5,215,292

38

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/14(4) Notes to Non-consolidated Financial Statements
Going Concern Assumption
Not applicable.

Significant Accounting Policies
1. Valuation standards and methods for marketable securities(1) Subsidiaries’ stocks
Stated at cost determined by the moving-average method.
(2) Available-for-sale securities
1) Securities with market quotations
Stated at fair value at the end of the fiscal year. (Unrealized gain or loss is included in net assets. Cost of securities sold isdetermined by the moving-average method.)2) Securities without market quotations
Stated at cost determined by the moving-average method.
2. Valuation standards and methods for inventories(1) MerchandiseStated at cost determined by the specific identification method. (The carrying value on the balance sheet is written down toreflect the effect of lower profit margins.)(2) Finished goods
Stated at cost determined by the periodic average method. (The carrying value on the balance sheet is written down to reflect
the effect of lower profit margins.)(3) Work in process
Stated at cost determined by the specific identification method. (The carrying value on the balance sheet is written down toreflect the effect of lower profit margins.)(4) Supplies
Valued by the last purchased price method.
3. Depreciation and amortization of noncurrent assets(1) Property, plant and equipment (excluding leased assets)
Depreciation of property, plant and equipment is calculated by the declining-balance method.
Useful life of principle assets is as follows:
Buildings:
10-35 years
Tools, furniture and fixtures:
4-10 years(2) Software (excluding leased assets)
Software for internal use is amortized over an expected useful life of 3-5 years by the straight-line method.
(3) Leased assets
Depreciation of leased assets is calculated based on the straight-line method, assuming the lease period to be the useful life anda residual value of zero.
(4) Real estate for rent
Declining-balance method, except for buildings acquired on or after April 1, 1998 (excluding attached structures) on which

39

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/14

depreciation is calculated by the straight-line method.
Useful life of principle assets is as follows:
Real estate for rent (building):
47 years
4. Recognition of allowances(1) Allowance for doubtful accounts
To prepare for credit losses on accounts receivable, allowances equal to the estimated amount of uncollectible receivables areprovided for general receivables based on the historical write-off ratio, and bad receivables based on case-by-casedetermination of collectibility.
(2) Provision for bonuses
To provide for employee bonus obligation, an allowance is provided in the amount equal to the estimated bonus obligations.
(3) Provision for retirement benefits
To provide for accrued retirement benefits for employees, an allowance is provided based on projected benefit obligations andplan assets at the end of the current fiscal year.
The actuarial difference is expensed in the following fiscal years using the declining-balance method based on the certain years(10 years) within the average length of remaining service period of employees.
The prior service cost is expensed using the declining-balance method based on a certain years (10 years) within the average
length of remaining service period of employees from the year when it is recognized.
(4) Provision for directors’ retirement benefits
To provide for directors’ retirement benefits, an allowance is provided for the aggregate amount payable at the end of thecurrent fiscal year pursuant to the Company’s rules on directors’ retirement benefits.
(5) Provision for loss on guarantees
To prepare for losses associated with debt guarantees extended to related companies, the expected losses are booked in an
amount based on the financial condition and other aspects of companies that received these guarantees.
(6) Provision for directors’ bonuses
To provide for directors’ bonuses, an allowance is provided in the amount equal to the estimated bonus obligations in thecurrent fiscal year.
5. Recognition of revenues and expenses
Recognition criteria for revenues and cost of sales for contracted software production
1) Contracts of which the outcome can be reliably estimated
The percentage-of-completion standard (with the percentage of completion estimated on the cost-to-cost basis).
2) Other contracted work
The completed-contract standard.
6. Other significant accounting policies in the preparation of financial statements(1) Accounting method for retirement benefits
Accounting method for outstanding balance of unrecognized actuarial differences and unrecognized prior service costs related toretirement benefit is different from those for the consolidated financial statements.
(2) Accounting for consumption taxes
National and local consumption taxes are accounted by the tax-exclusion method. Non-deductible national and local
consumption taxes are charged to expenses in the current fiscal year.

40Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/14

Changes in Accounting Policies
Not applicable.

Reclassifications
Balance sheet, statement of income and statement of changes in equity were prepared based on the form prescribed in Article 127,
Paragraph 1 of the Regulations for Non-consolidated Financial Statements.
Statement of income“Loss on retirement of non-current assets” under non-operating expenses, presented as separate items in the previous fiscal year, areincluded in “Other” in the current fiscal year given the reduced materiality of impact of the amount on the financial statements. The
prior-period financial statements are restated to conform to the current-period presentation.
“Loss on retirement of non-current assets” (123 thousand yen) under non-operating expenses shown in the prior-period statement ofincome are reclassified and included in “Other.”

Changes in Accounting-based Estimates
Not applicable.

Additional Information
Not applicable.

Notes to Balance Sheet*1. Assets pledged as collateral

Buildings
Structures
Land
Real estate for rent
Total

FY3/13(As of Mar. 31, 2013)
61,779124
142,361
133,172
337,437(Thousands of yen)
FY3/14(As of Mar. 31, 2014)
57,65893
142,361
130,553
330,666

FY3/13(As of Mar. 31, 2013)(Thousands of yen)
FY3/14(As of Mar. 31, 2014)*2. Monetary claim or monetary liabilities to affiliates

Short-term monetary claims

80,17937,095Long-term monetary claims

40,376-

Short-term monetary liabilities

25,30142,295

3. Guarantee liabilities
Guarantees for affiliate’s bank loans
FY3/13(As of Mar. 31, 2013)(Thousands of yen)
FY3/14(As of Mar. 31, 2014)

JAST TECHNIQUES PTE. LTD.

19,70021,299

SafeNeeds Co., Ltd.

26,60024,200Foreign currency-denominated guarantees are translated into yen at the exchange rate in effect on the fiscal year balance sheet
date.

41

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/14

4. The Company has commitment line agreements with 4 banks, in order to raise funds efficiently. The balances of credit
available as of the balance sheet date were as follows.
(Thousands of yen)
FY3/14(As of Mar. 31, 2014)

FY3/13(As of Mar. 31, 2013)
Commitment line
Credit used
Credit available

500,000

500,000--

500,000

500,000

Notes to Statement of Income*1. Selling expenses represent approximately 22% of the total selling, general and administrative expenses, and general andadministrative expenses approximately 78% in FY3/13, and selling expenses represent approximately 23% of the total selling,
general and administrative expenses, and general and administrative expenses approximately 77% in FY3/14.
Major items of selling, general and administrative expenses(Thousands of yen)
FY3/13
FY3/14(Apr. 1, 2012 – Mar. 31, 2013) (Apr. 1, 2013 – Mar. 31, 2014)
Directors’ compensations

127,346

128,498

Wages, sales and other allowances

503,983

518,907

Provision for bonuses

48,25870,365

Provision for directors’ bonuses

19,70921,938Retirement benefit expenses

29,05027,218Provision for directors’ retirement benefits

21,124

19,700Depreciation

43,691

24,838

Research and development expenses

176,509

156,706

Rent expenses

83,031

71,962

2. Transactions with subsidiaries and affiliates(Thousands of yen)
FY3/13
FY3/14(Apr. 1, 2012 – Mar. 31, 2013) (Apr. 1, 2013 – Mar. 31, 2014)
Amount of business transactions
Net sales
Operating expenses
Amount of non-business transactions

167,048

101,526

63,297

92,24924,01628,596

Marketable Securities
The subsidiary stock (1,049,903 thousand yen and 1,029,367 thousand yen were booked for subsidiaries on the balance sheet in
FY3/14 and FY3/13, respectively) do not have market prices which makes it extremely difficult to ascertain their fair value; thisinformation is therefore omitted.

42Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/14

Tax Effect Accounting
1. Significant components of deferred tax assets and liabilities(Thousands of yen)
FY3/14(As of Mar. 31, 2014)

FY3/13(As of Mar. 31, 2013)
Deferred tax assets (current)
Provision for bonuses
Accrued expenses
Accrued business office taxes
Asset retirement obligations
Other
Total
Deferred tax assets (noncurrent)
Provision for directors’ retirement benefits
Provision for retirement benefits
Allowance for doubtful accounts
Real estate for rent (land)
Asset retirement obligations
Share of subsidiaries
Other
Subtotal deferred tax assets
Valuation allowance
Total
Deferred tax liabilities (noncurrent)
Valuation difference on available-for-sale securities
Other
Total
Net deferred tax assets

133,722
19,61913,067
12,079178,488

175,580
32,50022,6996,908
5,495
243,183

126,880
269,256
34,754
20,181
23,88021,608496,561(217,550)
279,011

133,893
270,011
19,32620,181
17,33325,545
27,150513,442(190,386)
323,056

19,11920,32339,443
239,568

28,851
17,937
46,788276,268

2. Significant sources of differences between the statutory tax and effective tax rate(%)
FY3/13(As of Mar. 31, 2013)
Statutory tax rate
Adjustments
Permanent difference of entertainment expenses and otheritems
Residential tax for the period
Increase (decrease) in valuation allowance
Tax credit
Reductions of deferred tax assets at year end for
adjustment due to tax rate change
Others
Effective tax rate

FY3/14(As of Mar. 31, 2014)
38.0

38.0

0.9

0.0

2.2
16.4
(3.8)

1.1
(6.4)
(2.2)

-

4.5

0.1
53.8

0.1
35.1

3. Revised amount of deferred tax assets and deferred tax liabilities following the change in the corporate tax rate, etc.
Following the promulgation on March 31, 2014 of the “Act for Partial Revision of the Income Tax Act, etc.” (Act No. 10 of 2014),
special corporate tax for reconstruction will be no longer imposed for the fiscal years beginning on or after April 1, 2014.
Consequently, the statutory effective tax rate for the calculation of deferred tax assets and deferred tax liabilities will be loweredfrom 38.0% to 35.6% for temporary differences, which is expected to be used for the fiscal year beginning from April 1, 2014.
Due to this change in tax rates, there were a decrease of 20,235 thousand yen in deferred tax assets (after deducting deferred tax
liabilities) and an increase of 20,235 thousand yen in income taxes-deferred.

Subsequent Events
Not applicable.

43

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/14

6. Others(1) Changes in Directors
1) Changes in representative
Not applicable.
2) Changes in other directors
Candidates for director
Not applicable.
Retiring directors
Director

Osamu Yamamoto

Director

Masamichi Maruyama

Director

Keisuke Kamijo

Candidates for corporate auditors
Full-time corporate auditor

Katsuro Sonoda

Part-time corporate auditor

Jiro Mogami (current Lawyer)

Note: Mr. Jiro Mogami is a candidate to become an external auditor.
Retiring corporate auditors
Full-time corporate auditor

Tadao Nagamidori

Part-time corporate auditor

Hakaru Mori

3) Effective dateJune 20, 201444

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/14(2) Goods Manufactured, Orders Received and Sales
Reportable segment categories are revised from the first quarter of the current fiscal year as described in the section "4. Consolidated
Financial Statements, (5) Notes to Consolidated Financial Statements (Segment and Other Information)." Year-on-year changes arepresented by using adjusted figures for FY3/13 according to new reportable segment categories.
1) Goods Manufactured
Goods manufactured in the fiscal year under review are broken down by segment as follows.
Operating segment(Thousands of yen)

FY3/14(Apr. 1, 2013 – Mar. 31, 2014)

Year-on-year (%)

Software business

5,824,640

109.4

Package business

1,191,642

97.7

System sales business

1,318,399

93.5

Medical big data business

315,210223.5

8,649,893

106.9

Total

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 fiscal year under review are broken down by segment as follows.
Operating segment

Orders received

Year-on-year (%)(Thousands of yen)Order backlog

Year-on-year (%)

Software business

6,815,292

Package business

1,935,381

105.6

398,611

96.6

System sales business

1,548,895

123.1

154,902

111.4

Medical big data business
Total

101.5

1,046,857

78.0

163,48546.3

202,79373.8

10,463,054

103.0

1,803,165

83.2

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.
3) SalesSales in the fiscal year under review are broken down by segment as follows.
FY3/14
Operating segment(Apr. 1, 2013 – Mar. 31, 2014)
Software business
7,110,634(Thousands of yen)
Year-on-year (%)
109.7

Package business

1,949,373

101.9

System sales business

1,533,039

93.0

235,351253.7

10,828,399

106.8

Medical big data business
Total

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)
FY3/13
FY3/14(Apr. 1, 2012 – Mar. 31, 2013)(Apr. 1, 2013 – Mar. 31, 2014)
Customers
Customers
Amount
DUSKIN CO., LTD.
NTT COMWARE
WEST CORPORATIONTIS Inc.

%

660,528

Amount%6.5

DUSKIN CO., LTD.

847,635

7.8

916,076

9.0

NTT COMWARE WEST
CORPORATION

667,352

6.2

424,232

4.2

TIS Inc.

449,359

4.1

3. The above amounts do not include consumption taxes.

This financial report is solely a translation of “Kessan Tanshin” (in Japanese, including attachments), which has been prepared inaccordance with accounting principles and practices generally accepted in Japan, for the convenience of readers who prefer an
English translation.

45