November 10, 2021

Summary of Consolidated Financial Results
for the Second Quarter of Fiscal Year Ending March 31, 2022
(Six Months Ended September 30, 2021)[Japanese GAAP]
Listing: Tokyo Stock Exchange, First Section
Company name: Japan System Techniques Co., Ltd.
4323
URL: https://www.jast.jp
Stock code:
Representative:
Takeaki Hirabayashi, President and CEO
Hiroyuki Norimoto, General Manager of General Affairs Department
Contact:
Tel: +81-6-4560-1000
Scheduled date of filing of Quarterly Report:
November 11, 2021
Scheduled date of payment of dividend:
Preparation of supplementary materials for quarterly financial results:
Yes
Holding of quarterly financial results meeting:Yes (for analysts)
Note: The original disclosure in Japanese was released on November 10, 2021 at 16:00 (GMT +9).
(All amounts are rounded down to the nearest million yen)

1. Consolidated Financial Results for the Second Quarter Ended September 30, 2021
(April 1, 2021 – September 30, 2021)(1) Consolidated results of operations(Percentages represent year-on-year changes)
Net sales

Profit attributable toowners of parent% Million yen%
686(70.9)(309)-

Operating income

Ordinary income

Million yen%
Million yen%
Million yen
Six months ended Sep. 30, 2021
10,042992
1,004
Six months ended Sep. 30, 2020
8,042
(6.6)
23 (87.9)
58
Note: Comprehensive income (million yen) Six months ended Sep. 30, 2021:
706 (-%)
Six months ended Sep. 30, 2020:(258) (-%)
Diluted net income per
Net income per share
share
Yen
Yen
Six months ended Sep. 30, 2021
120.45Six months ended Sep. 30, 2020
(57.71)
Note: Beginning with the first quarter of the fiscal year ending March 31, 2022, JAST has applied Accounting Standard for Revenue
Recognition (Accounting Standards Board of Japan (ASBJ) Statement No. 29, March 31, 2020). All figures for the six months
ended September 30, 2021 incorporate this accounting standard and comparisons with the first half of the previous fiscal year
are omitted.

(2) Consolidated financial position
Total assets
Net assets
Equity ratio
Net assets per share
Million yen
Million yen%
Yen
As of Sep. 30, 2021
14,212
8,647
60.6
1,397.61
As of Mar. 31, 2021
12,8616,850
53.0
1,265.96
Reference: Shareholders’ equity (million yen)
As of Sep. 30, 2021:
8,611
As of Mar. 31, 2021:
6,813
Note: Beginning with the first quarter of the fiscal year ending March 31, 2022, JAST has applied Accounting Standard for Revenue
Recognition (ASBJ Statement No. 29, March 31, 2020). All figures as of September 30, 2021 incorporate this accounting
standard.

2. Dividends
1Q-endYen-

2Q-end
Yen
0.00
0.00

Fiscal year ended Mar. 31, 2021
Fiscal year ending Mar. 31, 2022
Fiscal year ending Mar. 31, 2022 (forecasts)
Note: Revisions to the most recently announced dividend forecast: None

Dividend per share
3Q-endYen-

Year-end
Yen
28.00

-

30.00

Total
Yen
28.00
30.00

3. Consolidated Earnings Forecasts for the Fiscal Year Ending March 31, 2022 (April 1, 2021 – March 31, 2022)
Net sales
Million yen

Operating income%

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

Ordinary income%

Million yen%

Yen

Full year
19,500
3.8
1,330
9.3
1,360
3.8
Note: Revisions to the most recently announced consolidated earnings forecasts: None%

Million yen

820

41.7

152.37

* Notes(1) Changes in consolidated subsidiaries during the period (changes in scope of consolidation): None
Newly added: -Excluded: -(2) Application of special accounting methods for presenting quarterly consolidated financial statements: None
(3) Changes in accounting policies and accounting-based estimates, and restatements
1) Changes in accounting policies due to revisions in accounting standards, others:

Yes2) Changes in accounting policies other than 1) above:None3) Changes in accounting-based estimates:

None4) Restatements:

None(4) Number of outstanding shares (common shares)
1) Number of shares outstanding at the end of the period (including treasury shares)
As of Sep. 30, 2021:

6,209,230 shares

As of Mar. 31, 2021:

5,612,230 shares

As of Mar. 31, 2021:

230,423 shares

2) Number of treasury shares at the end of the period
As of Sep. 30, 2021:

47,623 shares

3) Average number of shares outstanding during the period
Six months ended Sep. 30, 2021:

5,703,256 shares

Six months ended Sep. 30, 2020:

5,362,306 shares

Note 1: The current quarterly summary report is not subject to quarterly review by certified public accountants or auditing firms.
Note 2: Cautionary statement with respect to forward-looking statements
Forecasts of future performance in these materials are based on assumption judged to be valid and information available to theCompany’s management at the time the materials were prepared, but are not promises by the Company regarding future
performance. Actual results may differ materially from the forecasts. Please refer to “1. Qualitative Information on Quarterly
Consolidated Financial Performance, (3) Explanation of Consolidated Forecasts and Other Forward-looking Statements” on page 3
for forecast assumptions and notes of caution for usage.

Japan System Techniques Co., Ltd. (4323) Financial Results for the Second Quarter of FY3/22

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

2(2) Explanation of Financial Position

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

3

2. Quarterly Consolidated Financial Statements and Notes

4(1) Quarterly Consolidated Balance Sheet

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

6

Quarterly Consolidated Statement of Income
For the Six-month Period

6

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

8(4) Notes to Quarterly Consolidated Financial Statements

10

Going Concern Assumption

10

Significant Changes in Shareholders’ Equity

10

Changes in Accounting Policies

10

Additional Information

11

Segment and Other Information

11

Business Combinations

121

Japan System Techniques Co., Ltd. (4323) Financial Results for the Second Quarter of FY3/22

1. Qualitative Information on Quarterly Consolidated Financial Performance(1) Explanation of Results of Operations
In the first half of the current fiscal year, consumer spending and corporate activities in Japan were severely
restricted by extended states of emergency declared because of the pandemic and other measures to prevent the
spread of infections. In addition, new ways of working and new life styles have emerged because of the pandemic.
Although there are expectations for the economy to improve as more people are vaccinated and other me asures
are taken to stop the pandemic, the outlook for the Japanese economy remains uncertain.
In the IT industry in Japan, according to the latest statistics in the “Survey of Selected Service Industries” by the
Ministry of Economy, Trade and Industry (the final August 2021 figures), net sales continued to climb, rising
0.4% year on year in fiscal 2020 compared with 4.0% annual growth in fiscal 2019. The latest figures for August2021 were up 3.4% year on year.
Consolidated sales of the Japan System Techniques Group (Japan System Techniques Co., Ltd. (JAST) and its
consolidated subsidiaries, hereafter “the Group”) in the first half were 10,042 million yen (up 24.9% year onyear). Operating income was 992 million yen (vs. operating income of 23 million yen in the same period of theprevious fiscal year), ordinary income was 1,004 million yen (vs. ordinary income of 58 million yen in the same
period of the previous fiscal year), and profit attributable to owners of parent was 686 million yen (vs. loss
attributable to owners of parent of 309 million yen in the same period of the previous fiscal year).
Business segment performance was as follows.
(Software business)
Two negative factors that held down the performance of this business in the same period of the previous fiscal
year have largely ended. One is several unprofitable contracted software development projects that weighed on
earnings. The other is the suspension of some software development investments, mainly by major customers,
because of the pandemic. The performance of this business also benefited from strong sales of licenses for
BankNeo, a data integration package for financial institutions. A recovery in sales and earnings in the ASEAN
region also contributed to first half performance. As a result, there was a big improvement in the profitability ofthe software business. First half sales totaled 6,986 million yen (up 26.0% year on year) and the operating income
was 429 million yen (vs. operating loss of 192 million yen in the same period of the previous fiscal year).
(GAKUEN business)
Sooner than expected demand at current customers for replacing the current series of university program productswith the new GAKUEN RX and GAKUEN UNIVERSAL PASSPORT RX series, which have high profit margins,
contributed to the performance of this business. In addition, there was faster than expected progress with sales ofthese two new series to new customers. An increase in the volume of end user computing (EUC: individualized
contracted development of related systems) orders associated with the use of these two new series also
contributed to higher profitability in this business. In previous fiscal years, sales for support services for the useof new software and other work in progress was recognized when the final ap proval of customers was received.
Due to the application of the Accounting Standard for Revenue Recognition beginning with the current fiscal year,
this revenue is recognized based on progress with fulfilling performance obligations involving individual projects.
As a result, net sales in this business totaled 1,721 million yen (up 35.9% year on year) and the operating income
was 498 million yen (up 185.8% year on year).
(System sales business)
Delays in the procurement of IT equipment due to the global semiconductor shortage caused sales of IT
equipment to universities, the main activity of this business, to decline. As a result, net sales totaled 593 million
yen (down 15.0% year on year) and operating income was 2 million yen (down 97.1% year on year).

2Japan System Techniques Co., Ltd. (4323) Financial Results for the Second Quarter of FY3/22(Medical big data business)
Sales of automated inspection services for health insurance claims started to recover in the current fiscal year
following the downturn in one year earlier when the number of people using healthcare institutions decreased dueto the pandemic. There were also improvements in the performance of analysis services, services for the
notification of the cost of medical care, cloud services for managing welfare public assistance version of healthinsurance claims, support services for health insurance organizations and other highly profitable businesses.
These positive factors increased profitability of this business. In previous fiscal years, sales for a range ofservices and other work in progress was recognized when the final approval of customers was received. Due tothe application of the Accounting Standard for Revenue Recognition beginning with the current fiscal year, thisrevenue is recognized based on progress with fulfilling performance obligations involving individual projects. As
a result, net sales in this business totaled 740 million yen (up 38.6% year on year) and operating income was 61
million yen (vs. operating loss of 36 million yen in the same period of the previous fiscal year).
(2) Explanation of Financial Position
1) Balance sheet
Current assets at the end of the second quarter were 11,102 million yen, up 1,406 million yen from the end of theprevious fiscal year. This was mainly due to an increase in the collection of accounts receivable -trade linked toperformance, and an increase in cash and deposits resulting from the issuance of new shares through the exerciseof share acquisition rights and the disposal of treasury shares. Non-current assets were 3,110 million yen, down
55 million yen from the end of the previous fiscal year.
Current liabilities at the end of the second quarter were 3,916 million yen, down 471 million yen from the end of
the previous fiscal year. This was mainly due to repayments of short-term borrowings. Non-current liabilities
were 1,648 million yen, up 25 million yen from the end of the previous fiscal year.
Net assets at the end of the second quarter were 8,647 million yen, up 1,796 million yen from the end of theprevious fiscal year. This was mainly due to exercise of share acquisition rights.
Net assets increased as retained earnings were 81 million yen higher at the beginning of the fiscal year due to theapplication of the Accounting Standard for Revenue Recognition.
2) Cash flows
Cash and cash equivalents increased 1,406 million yen from 4,853 million yen at the beginning of the current
fiscal year to 6,259 million yen at the end of the first half of the current fiscal year.
Cash flows by category were as follows.
Net cash provided by operating activities totaled 838 million yen, a decrease of 432 million yen from 1,271
million yen provided in the same period of the previous fiscal year. This decrease was mainly due to increase s ininventories and contract liabilities, and a decrease in proceeds from the collection of trade receivables.
Net cash used in investing activities totaled 57 million yen, an increase of 9 million yen from 66 million yen usedin the same period of the previous fiscal year. This was due to a decrease in purchase of investment securities , anincrease in proceeds from sales of investment securities and an increase in loan advances.
Net cash provided by financing activities totaled 592 million yen, an increase of 1,145 million yen from 552
million yen used in the same period of the previous fiscal year. This was due to increases in proceeds fromissuance of shares and proceeds from disposal of treasury shares.
(3) Explanation of Consolidated Forecasts and Other Forward-looking Statements
There are no revisions to the May 13, 2021 forecasts for the fiscal year ending March 31, 2022: net sales of
19,500 million yen (up 3.8% year on year), operating income of 1,330 million yen (up 9.3% year on year),ordinary income of 1,360 million yen (up 3.8% year on year), and profit attributable to owners of parent of 820
million yen (up 41.7% year on year).

3Japan System Techniques Co., Ltd. (4323) Financial Results for the Second Quarter of FY3/22

2. Quarterly Consolidated Financial Statements and Notes(1) Quarterly Consolidated Balance Sheet(Thousands of yen)
Second quarter of FY3/22(As of Sep. 30, 2021)

FY3/21(As of Mar. 31, 2021)
AssetsCurrent assets
Cash and deposits

4,854,727

6,260,792

Notes and accounts receivable-trade
Notes and accounts receivable-trade, and contract
assetsMerchandise and finished goods

3,953,965--

4,205,921

185,543

163,960

527,715

160,724

Work in process
Raw materials and supplies

2,544

2,983

Other

184,859

320,406

Allowance for doubtful accounts(13,034)(11,956)

9,696,321

11,102,832

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

829,063

831,215

Accumulated depreciation(533,263)(525,772)

Buildings and structures, net

295,799

305,442Land

142,361

142,361

Other

518,695

551,504

Accumulated depreciation(414,255)(431,167)

Other, net

104,440

120,337

542,601

568,141

Goodwill

175,722

167,301

Customer-related assets

Total property, plant and equipment
Intangible assets

106,056

100,787

Trademark right

7,602

7,544

Technology assets

13,496

13,392

Software

68,32975,177

Other

7,626

7,626

378,834

371,830

Investment securities

632,126

596,499

Retirement benefit asset

666,814668,536

Deferred tax assets

416,291

377,709

Guarantee deposits

439,769

439,839

Other

104,010

97,409Total intangible assets
Investments and other assets

Allowance for doubtful accounts(15,208)(9,840)Total investments and other assets

2,243,803

2,170,153

3,165,239

3,110,126

12,861,561

14,212,958

Total non-current assets
Total assets

4Japan System Techniques Co., Ltd. (4323) Financial Results for the Second Quarter of FY3/22(Thousands of yen)
Second quarter of FY3/22(As of Sep. 30, 2021)

FY3/21(As of Mar. 31, 2021)
Liabilities
Current liabilities
Notes and accounts payable-trade
Short-term borrowings
Current portion of long-term borrowings

1,021,837

1,008,011

407,800

8,224

2,800

-

Income taxes payable

473,761

328,602

Advances received

605,148-

Contract liabilities-

1,076,061

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

885,138

747,20262,31914,727

12,79755,866

Other916,547

678,175

4,388,151

3,916,870

84,22886,509

4,239

5,437

1,017,504

1,020,769

Total current liabilities
Non-current liabilities
Provision for share awards for directors (and otherofficers)
Provision for retirement benefits for directors (andother officers)
Retirement benefit liability
Deferred tax liabilities

34,89029,338Other482,171506,670

1,623,034

1,648,725

6,011,185

5,565,595

1,076,669

1,535,409

Capital surplus

1,128,115

1,704,399

Retained earnings

4,605,874

5,221,860

Treasury shares(218,515)(85,306)

Total shareholders’ equity

6,592,143

8,376,362

Valuation difference on available-for-sale securities

186,775

160,563

Foreign currency translation adjustment(81,346)(29,092)

Remeasurements of defined benefit plans

115,566

103,663

Total accumulated other comprehensive income

220,996

235,135

5,530-

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

Accumulated other comprehensive income

Share acquisition rights
Non-controlling interests
Total net assets
Total liabilities and net assets

5

31,70535,8656,850,375

8,647,363

12,861,561

14,212,958

Japan System Techniques Co., Ltd. (4323) Financial Results for the Second Quarter of FY3/22(2) Quarterly Consolidated Statements of Income and Comprehensive Income
Quarterly Consolidated Statement of Income(For the Six-month Period)First six months of FY3/21(Apr. 1, 2020 – Sep. 30, 2020)(Thousands of yen)First six months of FY3/22(Apr. 1, 2021 – Sep. 30, 2021)

Net sales

8,042,391

10,042,475

Cost of sales

6,267,039

7,323,153

Gross profit

1,775,352

2,719,321

Selling, general and administrative expenses

1,752,342

1,726,850

23,010992,471

Interest income

8,611

5,805

Dividend income

3,875

2,920

Rental income

1,568

1,334

Operating income
Non-operating income

Foreign exchange gains

3,581

-

Subsidy income

16,129

5,313

Other

4,356

3,232

Total non-operating income

38,122

18,606

Non-operating expenses
Interest expenses
Foreign exchange losses
Share issuance costs
Rental expenses
Other

1,621

632

-

1,921

-

3,808

130

-

432

536

2,184

6,899

58,9481,004,177

Impairment losses

313,171-

Loss on valuation of investment securities

29,535-

Total non-operating expenses
Ordinary income
Extraordinary losses

Total extraordinary losses

342,707-

Profit (loss) before income taxes(283,758)

1,004,177

Income taxes

19,116

311,841

Profit (loss)(302,874)

692,336

Profit attributable to non-controlling interests

6,605

5,401

Profit (loss) attributable to owners of parent(309,480)

686,9346

Japan System Techniques Co., Ltd. (4323) Financial Results for the Second Quarter of FY3/22

Quarterly Consolidated Statement of Comprehensive Income(For the Six-month Period)First six months of FY3/21(Apr. 1, 2020 – Sep. 30, 2020)(Thousands of yen)First six months of FY3/22(Apr. 1, 2021 – Sep. 30, 2021)(302,874)

692,336

Valuation difference on available-for-sale securities

98,309(26,211)

Foreign currency translation adjustment(56,881)

52,431Remeasurements of defined benefit plans, net of tax

2,984(11,903)

Total other comprehensive income

44,413

14,316(258,461)

706,652(264,023)

701,073

5,562

5,579

Profit (loss)
Other comprehensive income

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

7

Japan System Techniques Co., Ltd. (4323) Financial Results for the Second Quarter of FY3/22(3) Quarterly Consolidated Statement of Cash FlowsFirst six months of FY3/21(Apr. 1, 2020 – Sep. 30, 2020)(Thousands of yen)First six months of FY3/22(Apr. 1, 2021 – Sep. 30, 2021)

Cash flows from operating activities
Profit (loss) before income taxes(283,758)

1,004,177

Depreciation

54,211

52,553

Impairment losses

313,171-

Amortization of software

7,954

12,145

Amortization of goodwill

28,712

16,311

Amortization of customer-related assets

13,319

9,790

Amortization of trademark

1,875

471

Amortization of technology assets
Increase (decrease) in provision for bonuses

3,328

837

(51,620)(138,301)

Increase (decrease) in retirement benefit liability

8,641

3,264

Decrease (increase) in retirement benefit asset(501)(1,721)(12,487)(8,726)

Interest and dividend income
Interest expenses
Decrease (increase) in trade receivables
Decrease (increase) in trade receivables and contract
assetsIncrease (decrease) in advances received

1,621

632

1,431,972

-

-

4,415

479,248--

681,518

Decrease (increase) in inventories(506,936)

233,619

Increase (decrease) in trade payables(13,265)(26,541)

Other, net

44,108(563,446)

Subtotal

1,519,597

1,281,000

12,972

5,159

Increase (decrease) in contract liabilities

Interest and dividends received
Interest paid

(1,638)(540)

Income taxes paid

(259,458)(447,072)

Net cash provided by (used in) operating activities

1,271,473

838,5468

Japan System Techniques Co., Ltd. (4323) Financial Results for the Second Quarter of FY3/22

First six months of FY3/21(Apr. 1, 2020 – Sep. 30, 2020)(Thousands of yen)First six months of FY3/22(Apr. 1, 2021 – Sep. 30, 2021)(35,541)(29,637)

Cash flows from investing activities
Purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment

-

6,260

Purchase of software(10,830)(11,414)Purchase of investment securities(19,498)(728)-

22,601(773)(46,587)-

2,155

Proceeds from refund of guarantee deposits

2,038

1,171

Payments of guarantee deposits(1,101)

(920)

-

490

Proceeds from sale of investment securities
Loan advances
Collection of loans receivable

Proceeds from sale of membership
Other, net
Net cash provided by (used in) investing activities

(475)

(475)

(66,180)(57,084)

Cash flows from financing activities
Net increase (decrease) in short-term borrowings(392,268)(400,000)

Repayments of lease obligations(4,208)(13,510)

Repayments of long-term borrowings(4,200)(2,800)-913,240

Proceeds from issuance of shares
Purchase of treasury shares

(62)

-

-

248,042Dividends paid

(151,509)(152,028)

Net cash provided by (used in) financing activities(552,248)

592,943(35,214)31,654

Net increase (decrease) in cash and cash equivalents

617,828

1,406,061

Cash and cash equivalents at beginning of period

3,908,254

4,853,695

Cash and cash equivalents at end of period

4,526,083

6,259,757

Proceeds from disposal of treasury shares

Effect of exchange rate change on cash and cash equivalents

9Japan System Techniques Co., Ltd. (4323) Financial Results for the Second Quarter of FY3/22(4) Notes to Quarterly Consolidated Financial Statements
Going Concern Assumption
Not applicable.
Significant Changes in Shareholders’ Equity
The following changes in equity resulted from the issuance of new shares and disposal of treasury shares due tothe exercise of the second series of warrants with an adjustable exercise price that were issued on March 22, 2021
and sold by using a third-party allotment in accordance with a resolution approved by the JAST Board of
Directors on March 5, 2021: Increases of 458,739 thousand yen in share capital, 458,739 thousand yen in capitalsurplus and 116,125 thousand yen in other capital surplus and a decrease of 133,209 thousand yen in treasury
shares. At the end of September 2021, share capital was 1,535,409 thousand yen, capital surplus was 1,704,399
thousand yen and treasury shares was 85,306 thousand yen.
Changes in Accounting Policies
Application of the Accounting Standard for Revenue Recognition
JAST started to apply the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31,2020) at the beginning of the first quarter of the current fiscal year. Based on this standard, revenue expected tobe received in exchange for the provision of goods and services is recognized when the control of the goods andservices is transferred to customers. As a result, the major change involves some contracts where sales wererecognized when a final acceptance inspection was performed in accordance with the applicable inspection
standards. For contracts where JAST has fulfilled its obligation to the customer over a specified period, theamount of progress of fulfilling the obligation is estimated, except when the period is extremely short, andrevenue based on the progress is recognized for that period. In addition, the total payment received from
customers for a product or service was recognized as revenue in prior years. Now, for transactions where theGroup functions as an agent for the provision of a product or service to a customer, the amount paid to the
supplier of the product or service is deducted from the payment received from a customer and the resulting net
amount is recognized as revenue.
For the application of the Accounting Standard for Revenue Recognition, in accordance with the transitional
measures in the proviso to Paragraph 84 of this standard, the cumulative effect of the retrospective application of
the new accounting standard, if it is applied prior to the first quarter of the current fiscal year, is added to or
subtracted from retained earnings at the beginning of the first quarter of the current fiscal year. The new standard
is then applied beginning with this amount of retained earnings. In addition, JAST has applied the method
prescribed in Paragraph 86, Article 1 of the Accounting Standard for Revenue Recognition, and accounted forcontract changes made prior to the beginning of the first quarter of the current fiscal year based on the contract
terms after reflecting all contract changes, and added or subtracted the cumulative effect of such changes toretained earnings at the beginning of the first quarter of the current fiscal year.
As a result, the application of the new standard resulted in reductions of 25,200 thousand yen in net sales and110,390 thousand yen in cost of sales, and an increase of 85,190 thousand yen each in operating income, ordinary
income and profit before income taxes. In addition, the new standard increased retained earnings at the beginningof the first half by 81,080 thousand yen.
“Notes and accounts receivable-trade” that was presented in the current assets section of the consolidated balance
sheet in the previous fiscal year is presented as “Notes and accounts receivable-trade, and contract assets,” and“Advances received” that was presented in the current liabilities section is presented as “Contract liabilities” fromthe first quarter of the current fiscal year. In accordance with the transitional measures prescribed in Paragraph89-2 of the Accounting Standard for Revenue Recognition, no reclassification has been made to the prior year ’s
consolidated financial statements to conform to the new presentation. Furthermore, in ac cordance with thetransitional measures prescribed in Paragraph 28-15 of the Accounting Standard for Quarterly Financial
Reporting (ASBJ Statement No. 12, March 31, 2020), JAST has not presented information on revenue fromcontracts with customers broken down for the first half of the previous fiscal year.

10Japan System Techniques Co., Ltd. (4323) Financial Results for the Second Quarter of FY3/22

Application of the Accounting Standard for Fair Value Measurement
JAST has applied the Accounting Standard for Fair Value Measurement (ASBJ Statement No. 30, July 4, 2019)and other standards from the beginning of the first quarter of the current fiscal year.
JAST has applied the new accounting policies set forth by the Accounting Standard for Fair Value Measurement
prospectively in accordance with the transitional measures in Paragraph 19 of the Accounting Standard for Fair
Value Measurement and Paragraph 44-2 of the Accounting Standard for Financial Instruments (ASBJ Statement
No. 10, July 4, 2019).
There is no effect of the application of these standards on the quarterly consolidated financial statement s.
Additional Information
Board Benefit Trust (BBT)
Based on the resolution of the 46th Annual General Meeting of Shareholders, JAST on June 26, 2018 terminatedthe directors’ retirement benefit system and established a Board Benefit Trust (BBT) for the purpose of increasing
motivation for contributing to the medium to long-term growth of sales and earnings and an increase in corporate
value. The BBT plan clearly links the compensation of directors with the JAST stock price. Furthermore,
directors share with shareholders the benefits of a higher stock price as well as the risk of a lower stock price.
1) Overview
This is a stock compensation plan in which directors receive stock compensation through a BBT. The BBT
acquires JAST stock using cash contributions from JAST as the source of funds. Directors (excluding external
directors; same afterward unless indicated otherwise) receive stock compensation or a monetary amountequivalent to the market value of the stock in lieu of stock compensation in accordance w ith the rules on the stockcompensation plan for directors. In principle, a director becomes eligible for stock compensation only after theindividual is no longer a JAST director.
2) JAST stock held by the BBT
The book value (excluding associated expenses) of JAST stock held by the BBT is shown as treasury shares in the
net assets section of the consolidated balance sheet. The BBT held 45,800 shares with a book value of 84,043
thousand yen as of the end of the second quarter of the current fiscal year.
Segment and Other Information
Segment information
I. First six months of FY3/21 (Apr. 1, 2020 – Sep. 30, 2020)
1. Information related to net sales and profit or loss for each reportable segment(Thousands of yen)Amounts shown on
Adjustment quarterly consolidated(Note 1)statement of income(Note 2)

Softwarebusiness

GAKUEN System sales
businessbusiness

Medicalbig data
business

Total

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

5,543,152

1,266,745

698,260

534,233

8,042,391-

8,042,391

29,392

7,942

485

-

37,820(37,820)-

Total

5,572,544

1,274,687

698,745534,233

8,080,212(37,820)

8,042,391

Net sales

Segment profit (loss)(192,164)
174,494
68,395(36,582)
14,143
8,867
23,010Notes: 1. Segment profit (loss) in the above adjustment represents eliminations of inter-segment transactions.
2. Segment profit (loss) is consistent with operating loss shown on the quarterly consolidated statement of income.
2. Information related to impairment losses on non-current assets, goodwill, etc. for each reportable segment
Significant impairment losses related to non-current assets
In the software business, there was an impairment loss for goodwill, customer-related assets, trademark rights andtechnology assets. The amount of this loss in the first six months of FY3/21 was 313,171 thousand yen.

11

Japan System Techniques Co., Ltd. (4323) Financial Results for the Second Quarter of FY3/22

Significant change in goodwill
In the software business, there was an impairment loss for goodwill.
The amount of this loss in the first six months of FY3/21 was 196,790 thousand yen.
II. First six months of FY3/22 (Apr. 1, 2021 – Sep. 30, 2021)
1. Information related to net sales and profit or loss for each reportable segment
Systemsales
business

Softwarebusiness

GAKUENbusiness

6,986,697

1,721,348

593,81329,815

2,475

3,109

7,016,513

1,723,824

596,923(Thousands of yen)

Medicalbig data
business

Total

Amounts shownon quarterly
Adjustment
consolidated(Note 1)statement ofincome (Note 2)

Net sales
1. External sales
2. Inter-segment sales andtransfers
Total

740,615 10,042,475-

10,042,475

35,400(35,400)-

740,615 10,077,876(35,400)

10,042,475-

Segment profit
429,492
498,659
2,000
61,308991,461
1,009
992,471
Notes: 1. Segment profit in the above adjustment represents eliminations for inter-segment transactions.
2. Segment profit is consistent with operating income shown on the quarterly consolidated statement of income.
2. Information related to impairment losses on non-current assets, goodwill, etc. for each reportable segment
Not applicable.
3. Information related to revisions for reportable segments
As described in Changes in Accounting Policies, JAST has applied the Accounting Standard for Revenue Recognition fromthe beginning of the first quarter of FY3/22 and changed the accounting method for revenue recognition. Accordingly, themethod for calculating segment profit has been changed as well.
The effect of this change was to decrease net sales by 60,515 thousand yen and to increase segment profit by 6,740 thousand
yen for the first six months of FY3/22 in the software business. Net sales and segment profit increased 47,625 thousand yen
and 45,974 thousand yen, respectively, in the GAKUEN business. Furthermore, net sales and segment profit decreased
110,310 thousand yen and 9,776 thousand yen, respectively, in the system sales business, and increased 98,000 thousand yen
and 42,251 thousand yen, respectively, in the medical big data business.

Business Combinations
Not applicable.

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

12