May 14, 2019

Summary of Consolidated Financial Results for the Fiscal Year Ended March 31, 2019
[Japanese GAAP]
Listing: Tokyo Stock Exchange, First Section
URL: http://www.jast.jp

Company name: Japan System Techniques Co., Ltd.
Stock code:
4323
Representative:
Takeaki Hirabayashi, President and CEO
Contact:
Noriaki Okado, Director and CFO
Scheduled date of Annual General Meeting of Shareholders:
Scheduled date of payment of dividend:
Scheduled date of filing of Annual Security Report:
Preparation of supplementary materials for financial results:
Holding of financial results meeting:Tel: +81-6-4560-1000
June 21, 2019
June 4, 2019
June 24, 2019
Yes
Yes (for analysts)

Note: The original disclosure in Japanese was released on May 14, 2019 at 16:00 (GMT +9).
(All amounts are rounded down to the nearest million yen)

1. Consolidated Financial Results for the Fiscal Year Ended March 31, 2019 (April 1, 2018 – March 31, 2019)(1) Consolidated results of operations(Percentages represent year-on-year changes)
Profit attributable to
Net sales
Operating income
Ordinary income
owners of parent
Million yen%
Million yen%
Million yen% Million yen%
Fiscal year ended Mar. 31, 201916,868
7.9
856
15.5
870
10.8
317 (45.1)
Fiscal year ended Mar. 31, 2018
15,630
9.9
741
29.9
785
25.8
579
41.0
Note: Comprehensive income (million yen) Fiscal year ended Mar. 31, 2019:
238 (down 62.6 %)Fiscal year ended Mar. 31, 2018:
637 (up 48.2 %)Net income per
Diluted net
Ordinary income Operating income
Return on equity
share
income per shareon total assets
to net sales
Yen
Yen
%
%
%
Fiscal year ended Mar. 31, 2019
60.58
5.1
6.7
5.1
Fiscal year ended Mar. 31, 2018110.36
9.7
7.0
4.7
Reference: Equity in earnings of affiliates (million yen): Fiscal year ended Mar. 31, 2019: Fiscal year ended Mar. 31, 2018: (2) Consolidated financial position
Total assets
Net assets
Million yen
Million yen
As of Mar. 31, 201913,520
6,418
As of Mar. 31, 201812,3086,246
Reference: Shareholders’ equity (million yen)
As of Mar. 31, 2019:
6,381

Equity ratio
%
47.2
50.4
As of Mar. 31, 2018:

Net assets per share
Yen
1,202.34
1,181.54
6,200(3) Consolidated cash flows

Fiscal year ended Mar. 31, 2019
Fiscal year ended Mar. 31, 2018

Cash flows fromoperating activities
Million yen
1,342
642

Cash flows from
Cash flows frominvesting activities
financing activities
Million yen
Million yen(1,063)
1,157
147
38

Cash and cash equivalents
at end of period
Million yen
4,204
2,785

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

Total

Total
dividends

Dividend on
equity(consolidated)
%
%
25.4
2.5
46.2
2.3

Payout ratio(consolidated)

Yen
Yen
Yen
Yen
Yen Million yen
Fiscal year ended Mar. 31, 2018
0.00
28.00
28.00
146
Fiscal year ended Mar. 31, 2019
0.00
28.00
28.00
149
Fiscal year ending Mar. 31, 2020
0.00
28.00
28.00
22.2
(forecasts)
Note: Breakdown of the year-end dividend for the fiscal year ended March 31, 2019: Ordinary dividend: 28.00 yen

3. Consolidated Earnings Forecasts for the Fiscal Year Ending March 31, 2020 (April 1, 2019 – March 31, 2020)
Net sales
Full year

Million yen
18,650Operating income%
10.6

Million yen
1,085

%
26.7

Ordinary income
Million yen
1,100

%
26.4

(Percentages represent year-on-year changes)
Profit attributable to
Net income perowners of parent
shareMillion yen
%
Yen
670
110.7
126.24

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

None4) Restatements:

None

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

(3) Number of outstanding shares (common shares)
1) Number of shares outstanding at the end of the period (including treasury shares)
As of Mar. 31, 2019:

5,612,230 shares

As of Mar. 31, 2018:

5,612,230 shares

As of Mar. 31, 2018:364,210 shares

2) Number of treasury shares at the end of the period
As of Mar. 31, 2019:

304,710 shares

3) Average number of shares outstanding during the period
Fiscal year ended Mar. 31, 2019:5,248,998 sharesFiscal year ended Mar. 31, 2018:
5,248,020 shares
Note: The Company’s stock held by the Board Benefit Trust (BBT) is included in the number of treasury shares (49,000
shares as of Mar. 31, 2019), and is deducted from the number of shares that is used to calculate the average number ofshares outstanding during the period.

Reference: Summary of Non-consolidated Financial Results
1. Non-consolidated Financial Results for the Fiscal Year Ended March 31, 2019 (April 1, 2018 – March 31, 2019)(1) Non-consolidated results of operations
Net sales
Million yen
13,796
12,709Fiscal year ended Mar. 31, 2019
Fiscal year ended Mar. 31, 2018

%
8.6
5.2

Operating income
Million yen
%
730
11.9
653
22.3

(Percentages represent year-on-year changes)
Ordinary income
ProfitMillion yen% Million yen
%
779
11.6
330
(33.3)
698
22.4
495
28.7

Diluted net income per
share
Yen
Yen
62.96
94.46
-

Net income per share
Fiscal year ended Mar. 31, 2019
Fiscal year ended Mar. 31, 2018
(2) Non-consolidated financial position

Total assets
Net assets
Million yen
Million yen
As of Mar. 31, 201912,4396,596
As of Mar. 31, 201810,131
6,344
Reference: Shareholders’ equity (million yen)
As of Mar. 31, 2019:
6,596

Equity ratio
%
53.0
62.6
As of Mar. 31, 2018:

Net assets per shareYen
1,242.82
1,208.95
6,344

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

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/19

Contents of Attachments

1. Overview of Results of Operations

2(1) Results of Operations

2(2) Financial Position

2(3) Cash Flows3(4) Outlook

3

2. Basic Approach to the Selection of Accounting Standards

4

3. Consolidated Financial Statements and Notes

5(1) Consolidated Balance Sheet

5(2) Consolidated Statements of Income and Comprehensive Income

7

Consolidated Statement of Income

7

Consolidated Statement of Comprehensive Income

8(3) Consolidated Statement of Changes in Equity

9(4) Consolidated Statement of Cash Flows

11(5) Notes to Consolidated Financial Statements

12

Going Concern Assumption

12

Reclassifications

12

Additional Information

12

Segment and Other Information

13

Business Combinations

15

Per-share Information

17

Subsequent Events

17

1

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/19

1. Overview of Results of Operations(1) Results of Operations
In the fiscal year ended on March 31, 2019, the Japanese economy continued to recover at a moderate pacedespite the continuation of geopolitical risk in eastern Asia. The recovery was supported by improvements incorporate profits, the number of jobs and personal income due to the benefits of economic initiatives by theJapanese government.
In the IT industry in Japan, according to the latest statistics in the “Survey of Selected Service Industries” by the
Ministry of Economy, Trade and Industry (the final February figures), net sales continued to climb, rising 1.5%
year on year in Fiscal 2018 (compared with 2.5% annual growth in Fiscal 2017). However, the outlook for the IT
industry is uncertain because the sales growth rate was reduced compared with the Fiscal 2017 and there weresome months in Fiscal 2018 when sales were lower than one year earlier.
Consolidated sales and earnings of the Japan System Techniques Group (Japan System Techniques Co., Ltd. andits consolidated subsidiaries, hereafter “the Group”) in the current fiscal year increased as follows: net sales of
16,868 million yen (up 7.9% year on year), operating income of 856 million yen (up 15.5% year on year),ordinary income of 870 million yen (up 10.8% year on year), and profit attributable to owners of parent of 317
million yen (down 45.1% year on year) due to booking of settlement package of 380 million yen as an
extraordinary loss. Results by segment were as follows.
In the software business (individualized contracted software development), sales in the manufacturing industry,
service/retail industry, and finance/insurance/brokerage industry increased while there was a decrease in sales inthe telecommunications industry and public sector. Net sales in this business totaled 11,622 million yen (up 9.8%
year on year) and operating income was 484 million yen (up 8.1% year on year).
In the GAKUEN business (sale and related services of operational reform packages for schools), there wereincreases in IT equipment sales, implementation support sales, end user computing (EUC: individualized
contracted development of related systems) sales and operation services. Net sales in this business totaled 2,586
million yen (up 14.7% year on year) and operating income was 317 million yen (up 24.8% year on year).
In the system sales business (IT equipment sales and IT/telecom infrastructure construction), orders from highly
profitable system integration (SI) projects for public sectors increased from one year earlier while equipment
sales to universities declined. Net sales in this business totaled 1,681 million yen (down 7.4% year on year) andoperating income was 140 million yen (up 204.2% year on year).
Lastly, in the medical big data business (inspection, analysis and related services of medical information data),
sales of automated inspection services for health insurance claims and services for notification of the cost of
medical care were strong. However, expenses increased faster than sales growth in order to build a stronger
organization in this business and for other activities. Net sales in this business totaled 977 million yen (up 0.3%
year on year) and operating loss totaled 95 million yen (vs. operating loss of 12 million yen in the previous fiscal
year).
(2) Financial Position
The balance of current assets at the end of the current fiscal year was 9,610 million yen, up 1.8% over the end of
the previous fiscal year. The balance of non-current assets was 3,909 million yen at the end of the current fiscal
year, up 36.3% over the end of the previous fiscal year. This was mainly due to an increase in goodwill due to theacquisition of overseas subsidiaries.
The balance of current liabilities at the end of the current fiscal year was 5,587 million yen, up 22.4% over theend of the previous fiscal year. This was mainly due to a decrease in notes and accounts payable-trade andincreases in short-term loans payable and accounts payable-other. The balance of non-current liabilities was 1,513
million yen at the end of the current fiscal year, up 1.1% over the end of the previous year.
The balance of total net assets was 6,418 million yen at the end of the current fiscal year, up 2.8% over the end of
the previous fiscal year.

2Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/19(3) Cash Flows
Cash and cash equivalents increased 1,419 million yen from 2,785 million yen at the beginning of the current
fiscal year to 4,204 million yen at the end of the current fiscal year.
Cash flows by category were as follows.
Cash flows provided by operating activities totaled 1,342 million yen, compared with 642 million yen provided in
the previous fiscal year. This difference was mainly due to an increase in proceeds from collection of notes andaccounts receivable-trade and a decrease in outlays for inventories while there was an increase in payments fornotes and accounts payable-trade.
Cash flows used in investing activities totaled 1,063 million yen, compared with 147 million yen provided in theprevious fiscal year. This difference was mainly due to an increase in purchases of shares of subsidiaries.
Cash flows provided by financing activities totaled 1,157 million yen, compared with 38 million yen provided in
the previous fiscal year. This difference was mainly due to an increase in short -term loans payable.
Reference: Cash flow indicators
FY3/15

FY3/16

FY3/17

FY3/18

FY3/19Equity ratio (%)

61.4

59.8

55.4

50.4

47.2

Equity ratio based on market value (%)

50.0

38.6

50.0

56.4

55.9

-

-

0.5

0.4

1.2

Interest-bearing debt to cash flow ratio (years)

Interest coverage ratio (times)
78.0
431.8
478.5
Notes: 1. The above figures are calculated as follows.
Equity ratio: Shareholders’ equity / Total assets
Equity ratio based on market value: Market capitalization / Total assets
Interest-bearing debt to cash flow ratio: Interest-bearing debt / Operating cash flows
Interest coverage ratio: Operating cash flows / Interest payments* Market capitalization is calculated by multiplying the closing share price at the end of the period by the numberof shares outstanding at the end of the period, excluding treasury shares.
* Interest-bearing debt is calculated using total loans-payable on the consolidated balance sheet.
* Interest payments use the amount of interest expenses paid stated on the consolidated statement of cash flows.
2. There are no average debt repayment period and interest coverage ratio figures for FY3/15 and FY3/16 because
the Company had negative operating cash flows.

(4) Outlook
In the current uncertain global economy, and particularly in the IT industry where the environment is extremely
volatile, Japan System Techniques Co., Ltd. (JAST) understands that it will be difficult to achieve growth if it
remains overly dependent on contract development, the IT industry’s mainstay source of earnings to date.
Consequently, to define the medium to long-term basic policies for the management of the JAST Group, weestablish a new three-year medium-term plan every year. Each new plan starts with the fiscal year in which theplan was established. The plan includes the type of organization we want to become, our brand image, ourbusiness fields, the size of our operations and other goals. In this fiscal year, we will continue to take manyactions in order to accomplish the goals of the current medium-term plan.
As part of these actions, the Group has selected “Vision Venture Value Velocity” as the slogan for the fiscal year
ending March 31, 2020. We will be making changes and enacting reforms even faster during the fiscal year
concerning development operations, sales techniques, internal administrative procedures and all other aspect s ofour operations. We are determined to achieve the goals of every department and person in our Group. As a result,
we aim to expand scale of projects and enhance profitability and productivity in the contracted development
business, as well as to achieve sustained growth by further expanding JAST-driven business centering on
proprietary brand products. In addition, we will use R&D activities making extensive use of advanced
technologies to create products that can be successors to our current products. Other goals in order to achievesustained growth are reinforcing our overseas sales strategy for our own brand and increasing the use of alliancesand M&A.
3

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/19

Based on this outlook, we expect increases in sales and earnings in the fiscal year ending March 31, 2020. We
forecast net sales of 18,650 million yen (up 10.6% year on year), operating income of 1,085 million yen (up26.7% year on year), ordinary income of 1,100 million yen (up 26.4% year on year), and profit attributable toowners of parent of 670 million yen (up 110.7% year on year).
2. Basic Approach to the Selection of Accounting Standards
The Group will continue to prepare consolidated financial statements using generally accepted accounting
principles in Japan for the time being to permit comparisons with prior years and with the financial data of othercompanies.
We will take suitable actions with regard to the application of International Financial Reporting Standards (IFRS)
by taking into account associated factors in Japan and other countries.

4

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/19

3. Consolidated Financial Statements and Notes(1) Consolidated Balance Sheet
FY3/18(As of Mar. 31, 2018)(Thousands of yen)
FY3/19(As of Mar. 31, 2019)

AssetsCurrent assets
Cash and deposits

2,994,700

4,260,305

Notes and accounts receivable-trade

4,991,576

4,341,029

Merchandise and finished goods

576,412

129,795

Work in process

711,654569,537

2,272

2,695

Other

201,206

345,249

Allowance for doubtful accounts(36,900)(38,272)

9,440,922

9,610,340

Raw materials and supplies

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

657,805

720,814

Accumulated depreciation(375,281)(419,276)

Buildings and structures, net

282,523

301,538Land

142,361

142,361

Other

381,968

451,991(283,798)(337,562)

98,170114,428

523,055

558,328

Goodwill

29,434

987,948

Software

86,997

68,396

Other

7,626

7,626

124,058

1,063,972

Investment securities

705,240

688,789

Retirement benefit asset

535,482542,920

Deferred tax assets

389,352

502,531

Guarantee deposits

390,110414,231

Other

245,123

151,359

Allowance for doubtful accounts(44,609)(12,209)

Total investments and other assets

2,220,698

2,287,621

2,867,812

3,909,922

12,308,734

13,520,262

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

Total intangible assets
Investments and other assets

Total non-current assets
Total assets

5Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/19(Thousands of yen)
FY3/19(As of Mar. 31, 2019)

FY3/18(As of Mar. 31, 2018)
Liabilities
Current liabilities
Notes and accounts payable-trade
Short-term loans payable
Current portion of long-term loans payable

2,040,633

1,128,311

218,592

1,543,696

8,400

8,400

Income taxes payable271,702

234,023

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

638,152

722,520

29,087

27,465-37,264

Advances received

652,455

648,746

Other
Total current liabilities

705,120

1,237,384

4,564,144

5,587,812

20,30011,900-20,051

426,250

13,978920,209957,672-586

Non-current liabilities
Long-term loans payable
Allowance for director's share
Provision for retirement benefits for directors (andother officers)
Retirement benefit liability
Deferred tax liabilities
Other

131,268

509,788

1,498,027

1,513,977

6,062,172

7,101,789

Capital stock

1,076,669

1,076,669

Capital surplus

994,621

1,085,695

Retained earnings

4,188,119

4,359,161

Treasury shares(266,539)(277,050)

Total shareholders’ equity

5,992,871

6,244,476

Valuation difference on available-for-sale securities

126,589

114,167

Foreign currency translation adjustment(10,428)(37,345)

Remeasurements of defined benefit plans

91,69460,163

Total accumulated other comprehensive income

207,856

136,986

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

Accumulated other comprehensive income

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

6

45,83537,0106,246,562

6,418,472

12,308,734

13,520,262

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/19(2) Consolidated Statements of Income and Comprehensive Income
Consolidated Statement of Income
FY3/18(Apr. 1, 2017 – Mar. 31, 2018)(Thousands of yen)
FY3/19(Apr. 1, 2018 – Mar. 31, 2019)

Net sales

15,630,284

16,868,799

Cost of sales

12,284,883

13,028,054

Gross profit

3,345,400

3,840,744

Selling, general and administrative expenses

2,603,877

2,984,623

741,522856,121

Interest income

5,578

12,286

Dividend income

6,108

7,016

Rent income

13,0993,619

Commission income

1,652

1,599

Insurance premiums refunded cancellation

5,226

-

Foreign exchange gains

1,986

-

Subsidy income

17,802

18,196

Other

4,924

4,683

Total non-operating income

56,37947,401

1,469

2,833

Operating income
Non-operating income

Non-operating expenses
Interest expenses
Foreign exchange losses-

27,279Rent expenses

8,012

983

Other

3,216

2,061

Total non-operating expenses
Ordinary income

12,69833,158785,203

870,364

Extraordinary losses
Impairment loss

6,688

4,079

-

380,000

6,688

384,079

Profit before income taxes

778,515486,285

Income taxes-current

271,766

268,539

Income taxes-deferred
Total income taxes(67,885)(92,314)203,880

176,224

Profit574,634

310,060

Settlement package
Total extraordinary losses

Loss attributable to non-controlling interests
Profit attributable to owners of parent

7(4,527)(7,925)579,161

317,986

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/19

Consolidated Statement of Comprehensive Income
FY3/18(Apr. 1, 2017 – Mar. 31, 2018)(Thousands of yen)
FY3/19(Apr. 1, 2018 – Mar. 31, 2019)574,634

310,060

40,903(12,421)

Foreign currency translation adjustment

5,365(27,816)

Remeasurements of defined benefit plans, net of tax

16,466(31,531)

Total other comprehensive income

62,736(71,769)

637,370

238,291

639,167

247,116(1,796)(8,824)

ProfitOther comprehensive income
Valuation difference on available-for-sale securities

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

8

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/19(3) Consolidated Statement of Changes in Equity
FY3/18 (Apr. 1, 2017 – Mar. 31, 2018)(Thousands of yen)
Shareholders’ equity

Balance at beginning ofcurrent period
Changes of items during
periodCapital stock

Capital surplus

Retained earnings

Treasury shares

Total shareholders’equity1,076,669

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

5,544,909

Dividends of surplus
Profit attributable toowners of parent
Purchase of treasury
shares(131,200)(131,200)

579,161

579,161-

Disposal of treasury shares
Net changes of items otherthan shareholders’ equity
Total changes of items
during period
Balance at end of current
period---447,961-

447,961

1,076,669

994,621

4,188,119(266,539)

5,992,871

Accumulated other comprehensive income
Valuationdifference on
available-for-salesecurities
Balance at beginning ofcurrent period
Changes of items during
period

85,686

Foreigncurrencytranslation
adjustment

Total
Non-controlling
Remeasurements
accumulated
interestsof defined benefit
other
plans
comprehensive
income(13,063)

75,227

147,850

48,396

Dividends of surplus

5,741,157(131,200)

Profit attributable toowners of parent
Purchase of treasury
shares579,161-

Disposal of treasury shares
Net changes of items otherthan shareholders’ equity
Total changes of items
during period
Balance at end of current
periodTotal net assets

40,903

2,635

16,46660,005(2,561)

57,44440,903

2,635

16,46660,005(2,561)

505,405

126,589(10,428)

91,694

207,856

45,835

6,246,562

9

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/19

FY3/19 (Apr. 1, 2018 – Mar. 31, 2019)(Thousands of yen)
Shareholders’ equity

Balance at beginning ofcurrent period
Changes of items during
periodCapital stock

Capital surplus

Retained earnings

Treasury shares

Total shareholders’equity1,076,669

994,621

4,188,119(266,539)

5,992,871

Dividends of surplus
Profit attributable toowners of parent
Purchase of treasury
shares
Disposal of treasury shares
Net changes of items otherthan shareholders’ equity
Total changes of items
during period
Balance at end of current
period(146,944)(146,944)

317,986

317,986

91,074(89,915)(89,915)

79,403

170,478-

91,074

171,042(10,511)

251,605

1,076,669

1,085,695

4,359,161(277,050)

6,244,476

Accumulated other comprehensive income

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

Foreigncurrencytranslation
adjustment

126,589(10,428)

Total
Non-controlling
Remeasurements
accumulated
interestsof defined benefit
other
plans
comprehensive
income91,694

207,856

45,835

Dividends of surplus

317,986(89,915)

Disposal of treasury shares

Total changes of items
during period
Balance at end of current
period6,246,562(146,944)

Profit attributable toowners of parent
Purchase of treasury
sharesNet changes of items otherthan shareholders’ equity

Total net assets

170,478(12,421)(26,917)(31,531)(70,870)(8,824)(79,695)(12,421)(26,917)(31,531)(70,870)(8,824)

171,909

114,167(37,345)

60,163

136,986

37,0106,418,472

10

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/19(4) Consolidated Statement of Cash Flows
FY3/18(Apr. 1, 2017 – Mar. 31, 2018)(Thousands of yen)
FY3/19(Apr. 1, 2018 – Mar. 31, 2019)

Profit before income taxes

778,515486,285

Depreciation

103,097

80,882

Amortization of software

42,77839,438Cash flows from operating activities

Impairment loss

6,688

4,079

Amortization of goodwill

11,05740,268

Increase (decrease) in provision for bonuses

22,701

83,068Decrease (increase) in retirement benefit asset(56,445)(7,438)

Increase (decrease) in retirement benefit liability

48,70437,821

Interest and dividend income(11,687)(19,303)

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

1,469

2,833

(583,009)

888,965

239,066

9,413

Decrease (increase) in inventories(695,079)

587,549

Increase (decrease) in notes and accounts payable-trade918,322(975,040)

Other, net

76,469382,414

Subtotal

902,649

1,641,239

Interest and dividend income received

12,811

20,279Interest expenses paid

(1,488)(2,805)

Income taxes paid

(271,013)(316,427)

Net cash provided by (used in) operating activities

642,959

1,342,285

Decrease (increase) in time deposits

208,092

153,108

Purchase of property, plant and equipment(21,566)(86,174)

Purchase of software(27,205)(28,722)

Proceeds from sales of real estate for rent

10,385

109,183

Purchase of investment securities(32,167)(2,424)

Proceeds from cancellation of insurance funds

12,275

162

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

9,260

-

-

(1,188,033)(24,663)(20,164)

Proceeds from collection of guarantee deposits

13,814

1,945

(805)

(2,739)147,418(1,063,857)

Net increase (decrease) in short-term loans payable

190,736

1,325,894

Repayments of lease obligations(12,232)(13,427)

Repayments of long-term loans payable(7,700)(8,400)(131,200)(146,944)

(764)

-

38,8381,157,122

Cash flows from investing activities

Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities

Cash dividends paid
Dividends paid to non-controlling interests
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents

4,518(16,022)

Net increase (decrease) in cash and cash equivalents

833,735

1,419,528

Cash and cash equivalents at beginning of period

1,951,458

2,785,193

Cash and cash equivalents at end of period

2,785,193

4,204,722

11

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/19(5) Notes to Consolidated Financial Statements
Going Concern Assumption
Not applicable.

Reclassifications
Application of the Partial Amendments to Accounting Standard for Tax Effect Accounting, etc.
Effective from the beginning of the current fiscal year, JAST has applied the “Partia l Amendments to Accounting Standard forTax Effect Accounting” (Accounting Standards Board of Japan (ASBJ) Statement No. 28, February 16, 2018), etc.
Accordingly, deferred tax assets and deferred tax liabilities have been presented in the investments and other assets section
and the non-current liabilities section of the balance sheet, respectively.

Additional Information
Provision for retirement benefits for directors (and other officers)
The JAST Board of Directors resolved at a meeting held on May 11, 2018 to terminate the current system for directors’
retirement benefits at the end of the 46 th Annual General Meeting of Shareholders on June 26, 2018. At this meeting,shareholders approved a resolution to make benefit plan termination payments to director s. JAST plans to make thesetermination payments when eligible directors reach the end of their final terms or resign or retire.
Accordingly, the entire amount of the provision for retirement benefits for directors (and other officers), which was included
in non-current liabilities, has been deleted and there is instead a long -term accounts payable-other of 356.395 million yen forthese benefit plan termination payments that is included in the “other” item of non -current liabilities.
Some consolidated subsidiaries will maintain a provision for retirement benefits for directors (and other officers) in
non-current liabilities for the payment of retirement benefits to benefits in accordance with the payment rules of thesecompanies.
Board Benefit Trust (BBT)
Based on the resolution of the 46 th Annual General Meeting of Shareholders, JAST on June 26, 2018 terminated the directors’
retirement benefit system and introduced a Board Benefit Trust (BBT, hereafter, “the Plan”) for the purpose of increasing
motivation for contributing to medium to long-term improvement in sales and earnings and an increase in corporate value.
The Plan clearly links the compensation of directors with the JAST stock price. Furthermore, directors share withshareholders the benefits of a higher stock price as well as the risk of a lower stock price.
1) Overview of transaction
This is a stock compensation plan under which directors receive stock compensation through a trust (a trust established under
the current system, hereafter “the Trust”). The Trust acquires JAST stock using cash contributions from JAST as the source offunds. Directors (excluding external directors; hereafter same unless indicated otherwise) receive stock compensation or amonetary amount equivalent to the market value of the stock in lieu of stock compensation (hereafter “JAST stock”) in
accordance with the rules on the stock compensation plan for directors. In principle, a director becomes eligible for stockcompensation only upon retirement.
2) JAST stock held by the trust
The book value (excluding associated expenses) of JAST stock held by the trust is shown as treasury stock in the net assets
section of the consolidated balance sheet. As of the end of the current fiscal year, the BBT held 49,000 shares of JAST with abook value of 89.915 million yen.

12

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/19

Segment and Other Information
Segment information
1. Overview of reportable segment
Segments used for financial reporting are the Company and subsidiaries’ constituent units for which separate financial
information is available and for which the Board of Directors performs periodic studies for the purposes of determining theallocation of resources and evaluating performance.
The Group has four reportable business segments: software business, GAKUEN business, system sales business and medical
big data business each of which conducts its business in line with the comprehensive strategy it has devised for products andservices in both domestic and overseas markets.
The software business handles the contracted software development. The GAKUEN business is engaged in development, sale,and provision of related services of operational reform packages for schools. The system sales business conducts IT
equipment sales, IT/telecom infrastructure construction. The medical big data business provides a full line of services
including automated inspection services for health insurance claims, data analysis and notification of the cost of medical ca re.
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
FY3/18 (Apr. 1, 2017 – Mar. 31, 2018)(Thousands of yen)
Medicalbig data
business

Total

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

Softwarebusiness

GAKUENbusiness

Systemsales
business

10,584,499

2,254,674

1,816,591

974,518

15,630,284-

15,630,284

64,152

7,691

24,220-96,064(96,064)-

10,648,651

2,262,365

1,840,812

974,518

15,726,348(96,064)

15,630,284

448,413254,779

46,115(12,506)

736,8024,720

741,5225,872,256

1,656,469

2,451,669

545,412

10,525,807

1,782,927

12,308,734

Net sales
1. External sales
2. Inter-segment sales andtransfers
Total
Segment profit (loss)
Segment assets
Other items
Depreciation
95,91225,153
3,189
18,838143,093
143,093
Increase in property, plantand equipment and intangible
30,434
6,837
1,808
7,764
46,845
14,15961,004assets
Notes: 1. Segment profit (loss) in the above adjustment represents eliminations for inter -segment transactions.
2. Segment assets in the above adjustment consist mainly of corporate assets that cannot be a ttributed to any of thereportable segments.
3. Segment profit (loss) is adjusted with operating income shown on the consolidated statement of income.

13

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/19

FY3/19 (Apr. 1, 2018 – Mar. 31, 2019)(Thousands of yen)
Medicalbig data
business

Total

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

Softwarebusiness

GAKUENbusiness

Systemsales
business

11,622,519

2,586,636

1,681,806

977,836

16,868,799-

16,868,799

66,676

4,448

4,316

-

75,441(75,441)-

11,689,195

2,591,085

1,686,123

977,836

16,944,240(75,441)

16,868,799

484,941

317,871

140,281(95,728)

847,365

8,755

856,121

7,969,515

2,051,533

1,231,512

659,846

11,912,407

1,607,855

13,520,262

Net sales
1. External sales
2. Inter-segment sales andtransfers
Total
Segment profit (loss)
Segment assets
Other items
Depreciation
82,894
19,542
3,713
13,675
119,826
119,826
Increase in property, plantand equipment and intangible
92,47817,9703,222
12,899126,570
1,753
128,323
assets
Notes: 1. Segment profit (loss) in the above adjustment represents eliminations for inter-segment transactions.
2. Segment assets in the above adjustment consist mainly of corporate assets that cannot be attributed to any of thereportable segments.
3. Segment profit (loss) is adjusted with operating income shown on the consolidated statement of income.
4. In FY3/19, the Package business segment was renamed the GAKUEN business segment. The change does not
influence the segment information. The segment information for FY3/18 is prepared and disclosed using the new
segment name.
Related information
1. Information by product or service
This information is omitted because the same information is presented in segment information.
2. Information by region(1) Net sales
Geographical information concerning sales to external customers in Japan is not presented since sales to externalcustomers exceeded 90% of net sales shown on the consolidated statement of income.
(2) Property, plant and equipment
Geographical information concerning property, plant and equipment is not presented since property, plant and equipment
in Japan exceed 90% of property, plant and equipment on the consolidated balance sheet.
3. Information by major client
FY3/18 (Apr. 1, 2017 – Mar. 31, 2018)
Company name
NTT COMWARE CORPORATIONNet sales

Business segment

1,369,670 thousand yen

Software businessNet sales

Business segment

1,532,644 thousand yen

Software business

FY3/19 (Apr. 1, 2018 – Mar. 31, 2019)
Company name
DUSKIN CO., LTD.

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

14

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/19

Information related to goodwill amortization and the unamortized balance for each reportable segment
FY3/18 (Apr. 1, 2017 – Mar. 31, 2018)
Softwarebusiness
Amortization for the period
11,057
Balance at the end of period

29,434

FY3/19 (Apr. 1, 2018 – Mar. 31, 2019)
Softwarebusiness
Amortization for the period
40,268
Balance at the end of period

GAKUENbusiness

System sales
business
-

-

-

-

GAKUENbusiness

987,948

System sales
business
-

-

-

-

(Thousands of yen)
Medical big Elimination or
Total
data businesscorporate
11,057--29,434(Thousands of yen)
Medical big Elimination or
Total
data businesscorporate
40,268--987,948

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

Business Combinations
Business combination through acquisition
1. Summary of business combination(1) Acquired companies and their business activities
1) Virtual Calibre SDN. BHD.
Business activities: Software development and consultation services2) Virtual Calibre MSC SDN. BHD.
Business activities: Software development and multimedia app design3) Virtual Calibre Consulting SDN. BHD.
Business activities: IT management and consultation services(2) Reasons for acquisition
The JAST Group has been active in the ASEAN region for more than 25 years, primarily at JAST TECHNIQUES PTE.
LTD. in Singapore and JASTEC (THAILAND) CO., LTD. in Thailand. JAST believes this region is a highly attractive
market because of the outlook for a continuation of rapid economic expansion and a growing middle class that will
create a large consumer market.
Adding the Virtual Calibre Group to the JAST Group will expand our operations in Malaysia as well as the entire
ASEAN region. This expansion is expected to contribute to the growth of JAST subsidiaries in the ASEAN region andto more opportunities for the growth of the SAP business in Japan over the medium and long term. These benefits are
expected to enable the JAST Group to grow even faster. Due to this outlook, the decision was made to acquire the
Virtual Calibre Group.
(3) Acquisition date
October 11, 2018 and November 26, 2018 (stock acquisition date)
September 30, 2018 (assumed acquisition date)(4) Legal form of acquisition
Acquisition of shares with cash(5) Company’s names after acquisition
There is no change in the company’s names.
(6) Percentage of voting rights acquired1) Virtual Calibre SDN. BHD.
100%2) Virtual Calibre MSC SDN. BHD.
100%3) Virtual Calibre Consulting SDN. BHD.
Virtual Calibre MSC SDN. BHD. acquired 30% of the voting rights of Virtual Calibre Consulting SDN. BHD. JAST
makes Virtual Calibre Consulting SDN. BHD. a consolidated subsidiary too because two companies belonging to the
JAST Group or Virtual Calibre Group account for the majority of administrative operations and for other reasons.

15

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/19(7) Basis for choosing the company to acquire
JAST acquired the shares in exchange for consideration in cash.
2. Period of the acquired companies’ performance included in the consolidated financial statements
From October 1, 2018 to December 31, 2018
3. Acquisition cost of acquired companies and breakdown by type of consideration
Payment for the acquisition:
Cash1,653.094 million yen
1,653.094

Acquisition cost:

4. Details of major acquisition-related costs
Remuneration for advisory members and other related fees: 68.007 million yen
5. Goodwill resulting from the acquisition(1) Value of goodwill
999.538 million yen
The amount of goodwill is calculated provisionally because the allocation of the acquisition cost is incomplete at theend of the third quarter.
(2) Source of goodwill
The source is primarily the expectation of excess earnings power emerging from business development in the future.
(3) Amortization method and amortization period
Goodwill is amortized over eight years by the straight-line method.
6. Breakdown of assets acquired and liabilities assumed on the acquisition dateCurrent assets:

748.266 million yen

Non-current assets:

20.920 million yen

Total assets:

769.187 million yen

Current liabilities:

85.970 million yen

Non-current liabilities:

6.758 million yen

Total liabilities:

92.729 million yen

7. Estimated effect of the business combination on the consolidated statement of in come if the business combination had beenat the beginning of the current fiscal year.
This information is omitted due to immateriality.

16

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/19

Per-share Information

Net assets per share

FY3/18(Apr. 1, 2017 – Mar. 31, 2018)
1,181.54(Yen)
FY3/19(Apr. 1, 2018 – Mar. 31, 2019)
1,202.34

Net income per share
110.36
60.58
Notes: 1. Diluted net income per share is not presented since the Company has no outstanding dilutive securities.
2. The basis of calculation is as follows.
(Thousands of yen)
FY3/18
FY3/19(As of Mar. 31, 2018)(As of Mar. 31, 2019)
Net assets per share
6,246,562

Total net assets on balance sheet

6,418,472

Deduction on total net assets

45,83537,010[Non-controlling interests][45,835][37,010]

Net assets applicable to common shares
Number of common shares used in calculation of net
assets per share

6,200,727

6,381,462

5,248,020 shares

5,307,520 shares

FY3/18(Apr. 1, 2017 – Mar. 31, 2018)(Thousands of yen)
FY3/19(Apr. 1, 2018 – Mar. 31, 2019)579,161

317,986--

579,161

317,986

5,248,020 shares

5,248,998 shares

Net income per share
Profit attributable to owners of parent
Amount not available to common shareholders
Profit attributable to owners of parent applicable tocommon shares
Average number of shares outstanding during period

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

17