Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

Annual Securities Report
The 52nd period

April 1, 2023 to March 31, 2024

Japan System Techniques Co., Ltd.

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

Annual Securities Report
1 This document is a printed version of the Annual Securities Report filed in accordancewith Article 24, paragraph (1) of the Financial Instruments and Exchange Act via theElectronic Data Processing System for Disclosure (Electronic Disclosure for Investors’
NETwork [EDINET]) as set forth in Article 27-30-2 of the same act, with a table ofcontents and page numbers added.
2 This document includes, at the end, the audit report attached to the Annual Securities
Report submitted in the manner described above, and the internal control report andconfirmation letter submitted in conjunction with the Annual Securities Report.

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

Contents
Annual Securities Report for the 52nd period

Page
1

Cover
Company Information..........................................................................................................................

2

I.

Company Overview................................................................................................................. ...............

2

1.

Transition of Significant Business Indicators, etc. ..........................................................................

2

2.

Company History..................................................................................................................... ...............

4

3.

Description of Businesses ...................................................................................................................

6

4.

Affiliated Companies ...........................................................................................................................

10

5.

Employees ............................................................................................................................. ................

12

II.

Business Overview ................................................................................................................................

13

1.

Management Policy, Business Environment and Issues to be Addressed....................................

13

2.

Approach to Sustainability and Initiatives.........................................................................................

14

3.

Business Risks .......................................................................................................................................

18

4.

Management’s Analysis of Financial Status, Operating Results and Cash Flows.......................

21

5.

Important Contracts, etc., in Operations ...........................................................................................

25

6.

Research and Development Activities..............................................................................................

25

III.

Information about Facilities.................................................................................................................

26

1.

Capital Expenditures Overview....................................................................................................... ....

26

2.

Major Facilities ......................................................................................................................................

27

3.

Plans for Capital Investment and Disposals of Facility ..................................................................

29

IV.

Information about Reporting Company..............................................................................................

30

1.

Shares, etc. ……………...........................................................................................................................

30

2.

Acquisition and Disposal of Treasury Shares....................................................................................

35

3.

Dividend Policy ............................................................................................................................. .......

36

4.

Corporate Governance……..................................................................................................................

37

V.

Financial Information.............................................................................................................................

53

1.

Consolidated Financial Statements, etc. ............................................................................................

542.

Non-consolidated Financial Statements, etc. ....................................................................................

92

VI.

Outline of Share-related Administration of Reporting Company ..................................................

105

VII.

Reference Information of Reporting Company ..............................................................................

106

1.

Information about Parent of Reporting Company.............................................................................

106

2.

Other Reference Information................................................................................................................

106

Information about Reporting Company’s Guarantor, etc.......................................................

107

Section 1.

Section 2.

Independent Auditor’s Reports
Internal Control Report
Confirmation Letter

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

Cover
Submitted document

Annual Securities Report

Statutory basis

Article 24, paragraph (1) of the Financial Instruments and Exchange Act of Japan

Agency receiving submission

Director-General of the Kinki Local Finance Bureau

Submission dateJune 26, 2024

Fiscal year

52nd period (from April 1, 2023 through March 31, 2024)

Corporate name

Japan System Techniques Kabushiki-gaisha

Name in English

Japan System Techniques Co., Ltd.

Name and position of representative

Takeaki Hirabayashi, President

Location of headquarters

2-3-18 Nakanoshima, Kita-ku, OsakaPhone+81-6-4560-1000 (main switchboard)

Name of contact person

Taku Hirabayashi, Director and Senior Officer

Closest contact address

2-3-18 Nakanoshima, Kita-ku, OsakaPhone+81-6-4560-1000 (main switchboard)

Name of contact person

Taku Hirabayashi, Director and Senior Officer

Place available for public inspection

Tokyo Stock Exchange, Inc.
(2-1, Nihombashi Kabutocho, Chuo-ku, Tokyo)-1-Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

Section 1. Company Information
I. Company Overview
1. Transition of Significant Business Indicators, etc.
(1) Consolidated Business Indicators, etc.
Term

48th Period

49th Period

50th Period

51st Period

52nd Period

Fiscal year ended

March 2020

March 2021

March 2022

March 2023

March 2024

Net sales(Thousand yen)

18,019,792

18,789,152

21,399,553

23,519,516

26,183,521

Ordinary profit(Thousand yen)

1,021,581

1,310,486

2,052,512

2,450,148

2,861,415

Profit (loss) attributable toowners of parent(Thousand yen)

(30,675)

578,879

1,330,558

1,772,210

2,086,939

Comprehensive income(Thousand yen)

(119,317)

749,216

1,342,203

1,868,410

2,295,092

Net assets(Thousand yen)

6,218,217

6,850,375

9,194,483

10,816,240

12,712,107

Total assets(Thousand yen)

12,988,341

12,861,561

15,539,989

17,413,797

20,022,694

Net assets per share(Yen)

288.52316.49373.43439.03516.08

Earnings (loss) per share(Yen)(1.44)

26.99

56.16

72.25

85.08

Diluted earnings per share

(Yen)

-

26.98

-

-

-

Ratio of shareholders’ equity

(%)

47.7

53.0

58.9

61.8

63.2

Return on equity (ROE)

(%)

(0.5)

8.9

16.7

17.8

17.8

(Times)(175.3)

14.1

11.4

12.5

21.2

(Thousand yen)

417,265

2,131,466

1,162,919

1,073,916

1,888,438(Thousand yen)

(527,162)

87,030(80,912)(541,656)(761,475)(Thousand yen)

(185,027)(1,247,242)

486,858(280,816)(424,085)(Thousand yen)

3,908,254

4,853,695

6,463,823

6,793,050

7,515,186

1,164

1,320

1,448

1,687

1,847

Price-earnings ratio
Net cash from operating
activities
Net cash from investing
activities
Net cash from financing
activities
Cash and cash equivalents at
the end of fiscal year
Number of employees

Notes: 1. The number of employees is the number of full-time employees.
2. Diluted earnings per share for the 48th period and for the 50th period and after are not shown because Japan System
Techniques Co., Ltd. (“JAST” or the “Company”) had no outstanding dilutive securities.
3. JAST established a new Board Benefit Trust (BBT) in the 47th period. JAST stock remaining in the BBT (192,708
shares for the 48th, 191,200 shares for the 49th, 298,400 shares for the 50th, 298,400 shares for the 51st, and 298,400
shares for the 52nd) is included in treasury shares in shareholders’ equity and deducted from the number of sharesissued to calculate the average number of shares outstanding during the period for the calculation of earnings (loss)
per share.
4. JAST conducted a 2-for-1 common stock split on October 1, 2022 and April 1, 2024. Net assets per share, earnings(loss) per share, and diluted earnings per share have been calculated as if these stock splits have taken place at the
beginning of the 48th period. The share price at the end of the 52nd period is the ex-rights price after the 2-for-1 stock
split on April 1, 2024. Therefore, the price-earnings ratio for the 52nd period is the share price after the split divided
by earnings per share adjusted to incorporate this split.
5. Beginning with the 50th period, JAST has applied Accounting Standard for Revenue Recognition (AccountingStandards Board of Japan (ASBJ) Statement No. 29, March 31, 2020). All figures for the 50th period and afterward
incorporate this accounting standard.

-2-

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

(2) Non-consolidated Business Indicators, etc., of JAST
Term

48th Period

49th Period

50th Period

51st Period

52nd Period

Fiscal year ended

March 2020

March 2021

March 2022

March 2023

March 2024

Net sales(Thousand yen)

14,427,659

15,203,765

17,082,806

18,552,222

20,431,311

Ordinary profit(Thousand yen)

1,121,163

1,106,164

1,751,066

2,134,219

2,184,722

Profit(Thousand yen)

21,658401,246

999,643

1,630,462

1,614,423

Share capital(Thousand yen)

1,076,669

1,076,669

1,535,409

1,535,409

1,535,409(Shares)

5,612,230

5,612,230

6,209,230

12,418,460

12,418,460

Net assets(Thousand yen)

6,539,989

6,897,566

8,805,037

10,202,132

11,440,344

Total assets(Thousand yen)

12,109,632

11,785,585

13,974,559

15,504,289

17,347,911

304.85320.15358.96415.93466.42

28.00

28.00

40.00

32.00

45.00

(-)

(-)

(-)

(-)

(-)

Number of issued shares

Net assets per share(Yen)

Dividend per share(Yen)[Interim dividend per share]
Earnings per share

(Yen)

1.02

18.71

42.19

66.47

65.82

Diluted earnings per share

(Yen)

-

18.70

-

-

-

Ratio of shareholders’equity

(%)

54.0

58.5

63.0

65.8

65.9

Return on equity (ROE)

(%)

0.3

6.0

12.7

17.2

14.9

Price-earnings ratio(Times)

248.3

20.3

15.1

13.5

27.3

Dividend payout ratio

(%)

688.4

37.4

23.7

24.1

34.2

753

827

871

926

1,009

Number of employees
Shareholder return

(%)

73.5

111.6

187.4

266.3

530.5

[Comparison with TOPIX](%)(88.2)(122.8)(122.3)(125.9)(174.0)Highest share price

(Yen)

1,878

2,150

3,255

Lowest share price

(Yen)

696

1,016

1,417

1,826
(2,820)1,153(2,111)

4,250(1,877)
1,755(1,778)Notes: 1. The number of employees is the number of full-time employees.
2. Diluted earnigns per share for the 48th period and for the 50th period and after are not shown because JAST had nooutstanding dilutive securities.
3. JAST established a new Board Benefit Trust (BBT) in the 47th period. JAST stock remaining in the BBT (192,708 sharesfor the 48th, 191,200 shares for the 49th, 298,400 shares for the 50th, 298,400 shares for the 51st, and 298,400 shares forthe 52nd) is included in treasury shares in shareholders’ equity and deducted from the number of shares issued to
calculate the average number of shares outstanding during the period for the calculation of earnings per share.
4．JAST conducted a 2-for-1 common stock split on October 1, 2022 and April 1, 2024. Net assets per share, earnings per
share, diluted earnings per share, and shareholder return have been calculated as if these stock splits have taken place atthe beginning of the 48th period. For the 51st period, the highest and lowest share prices are the prices after incorporating
the stock splits, and the prices before the stock split are shown in parentheses. The share price at the end of the 52nd
period is the ex-rights price after the 2-for-1 stock split on April 1, 2024. Therefore, the price-earnings ratio for the 52nd
period is the share price after the split divided by earnings per share adjusted to incorporate this split.
5. The highest and lowest share prices are prices on the Tokyo Stock Exchange Prime Market beginning on April 4, 2022,
and prices on the First Section of the Tokyo Stock Exchange before that date. For the 52nd period, the share prices inparentheses are the highest and lowest ex-rights prices after the stock split on April 1, 2024.
6．Beginning with the 50th period, JAST has applied Accounting Standard for Revenue Recognition (ASBJ Statement No.
29, March 31, 2020). All figures for the 50th period and afterward incorporate this accounting standard.
7. The dividend per share of 32 yen for the 51st period includes a commemorative dividend of 5 yen.

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Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

2. Company History
Month & Year
March 1973
July 1977
February 1980
September 1982
April 1987
February 1991
March 1993

October 1994
March 1997
August 1998
April 1999
February 2000
March 2000
May 2001
November 2001
March 2002
February 2003
April 2003
December 2003
April 2004
August 2005
August 2006
September 2006
March 2007
June 2008
October 2008
February 2010
August 2010
December 2010
January 2012
July 2012

February 2013
March 2014
April 2014
November 2014
September 2015
May 2016
June 2017
November 2017
April 2018
July 2018

EventsFounded Japan System Techniques Co., Ltd. for the purpose of software development at 55, Uchihonmachi
Hashizumecho, Higashi-ku (currently Chuo-ku), Osaka
Established the Tokyo Branch Office in Minato-ku, Tokyo
Relocated the Head Office to Sumitomo Nakanoshima Building, 2-18 Nakanoshima 3-chome, Kita-ku, Osaka
Established JAST TECHNIQUES PTE. LTD., a system development company in Singapore
Established a dual head office system, with headquarters in Osaka and Tokyo
Registered as a “systems integrator” company with the Ministry of International Trade and Industry (currently
Ministry of Economy, Trade and Industry)
Relocated the Head Office to Dojima Axis Building, 2-28 Dojimahama 2-chome, Kita-ku, Osaka
Relocated the Tokyo Branch Office to Koishikawa MI Building, 10-20 Koishikawa 5-chome, Bunkyo-ku,
Tokyo
Launched software package GAKUEN series, a school office work support integrated system
Certified as a “systems integrator” company by the Ministry of International Trade and Industry (currently
Ministry of Economy, Trade and Industry)
Launched GAKUEN REVOLUTION (academic affairs), a large-scale integrated school office work support
system for universities
Started to provide outsourcing services
Launched UNIVERSAL PASSPORT, a software package that enables university staff and students to
exchange information over a web-based environment
Acquired all shares of JASTEC (THAILAND) CO., LTD., a system development company in Thailand owned
by JAST TECHNIQUES PTE. LTD.
Obtained the PrivacyMark certification from the Japan Information Technology Services Industry Association
Listed on the JASDAQ market
Launched GAKUEN REVOLUTION (corporations), a large-scale integrated school office work support
system for universities
Listed on the Second Section of the Tokyo Stock Exchange
Relocated the Tokyo Head Office to Taiyo Seimei Shinagawa Building, 16-2 Konan 2-chome, Minato-ku,
TokyoCommunication Business Division obtained ISO14001 certification
Solutions Division No. 1 at Tokyo Head Office obtained ISMS certification
Relocated the Osaka Head Office to Nakanoshima Central Tower, 2-7 Nakanoshima 2-chome, Kita-ku, Osaka
Acquired all shares of Alpha Computer Co., Ltd. (marketer of IT systems to educational institutions), making
it a subsidiary
Launched GAKUEN UNIVERSAL PASSPORT EX
Launched GAKUEN REVOLUTION EX series and GAKUEN EX series related to academic affairs
Launched GAKUEN REVOLUTION EX (accounting and finance)
Tokyo Systems Headquarters obtained ISO27001 (ISMS) certification
Launched corporation-related GAKUEN EX series (accounting and finance)
Launched JMICS, automated electronic health insurance claims checking system service
Entire Tokyo Head Office obtained ISO27001 (ISMS) certification
Medical Information Service Division obtained ISO9001 and ISO27001 certifications
Acquired shares of NewNeeds Co., Ltd., SafeNeeds Co., Ltd. and GuiLin Anxin Software Co., Ltd., making
them subsidiaries
Entire Osaka Head Office obtained ISO9001, ISO14001 and ISO27001 certifications
Relocated the Osaka Head Office to Nakanoshima Festival Tower, 3-18 Nakanoshima 2-chome, Kita-ku,
Osaka
The whole company obtained ISO9001, ISO14001 and ISO27001 certifications
Launched GAKUEN EduTrack an integrated e-learning system
Relocated and expanded the Tokyo Head Office to the upper floors in the same building
Investment in Shanghai Jiafeng Information Technology Co., Ltd. completed, making it a subsidiary
Acquired shares of ISR Co., Ltd., making it a subsidiary
Stock listing moved to the First Section of the Tokyo Stock Exchange
Had a stake in CO-WELL Co., Ltd., and strengthened this collaboration
Established JAST Asia Pacific Co., Ltd., a system development company as ASEAN regional headquarters in
ThailandLaunched GAKUEN UNIVERSAL PASSPORT RX-4-

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

Month & Year
August 2018
November 2018
January 2019
May 2019
September 2019
April 2020
September 2020
October 2020
October 2020
May 2021
July 2021
July 2021
October 2021
April 2022
August 2022
December 2022
March 2023
May 2023
January 2024
April 2024

EventsHealthcare Innovation Business Division Western Japan Region obtained ISO20000 (ITSMS) certification
Acquired shares of Virtual Calibre Group, making it a subsidiary
Entire Healthcare Innovation Business Division Region obtained ISO20000 (ITSMS) certification
Acquired shares of AG NET PTE.LTD., making it a subsidiary
Established a capital and business alliance with TerraSky Co., Ltd.
Launched GAKUEN RX
Launched GAKUEN Subscription
Launched mieHR, a human resource management service
Launched iBss, a business support system for insurers in the JMICS Service of Medical big data business
Launched SMART BankNeo
Established JAST Health Insurance Association
Released Coromiru, a coronavirus information application service through the joint development
Launched Office DX, a facial recognition product
Moved to the Prime Market due to the restructuring of the market classification of the Tokyo Stock Exchange
Established Bright & Better Co., Ltd., a system development company in Thailand
Established Virtual Calibre Consulting India Pvt. Ltd., a system development company in India
50th anniversary of JAST’s establishment
Received DX business operator certification from the Ministry of Economy, Trade and Industry
Acquired shares of K-SHIP Co., Ltd., making it a subsidiary
Absorbed ISR Co.,Ltd.

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Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

3. Description of Businesses
JAST and its 14 consolidated subsidiaries (collectively, the “Group”) engages in four businesses: the digitaltransformation and system integration (DX&SI) business, package business, medical big data business, and global
business. The DX&SI business uses its distinctive strengths to supply a diverse array of information systems andservices in a large number of business sectors. The package business develops and sells products that use JAST’s own
brands and provides associated environment and system development services, chiefly consulting for the use of theseproducts. The medical big data business has several healthcare businesses that make it a one-stop source of services forthe use of medical data and business process reform at health insurance organizations. The global business develops
and sells enterprise resource planning (ERP) and human resource management (HRM) products outside Japan, provides
consulting for the use of these products, and develops IT systems.
The following is the classification by business segment.
Segment

DX&SI
business

SectorMain BusinessCompany NameBusiness applications (office
work processing system) 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,
area marketing analysis using GIS (Geographic
Information System), vehicle dispatch and sales
support systems
 Systems for financial institutions including
accounts, information, global operations,business administration, and card loans
 Systems for the securities industry including
equity trading, investment trusts, dealing, andInternet securities trading
 Systems for the insurance industry including
contract management and non-life new reserves
 Systems for the public sector including phonebilling, tax revenue management, resident
information, postal accounts, and highway ETC(Electronic Toll Collection)
 Systems for application and acceptance of tests
and education support services
 Systems for website production, smartphone app
development, and related network businesses Accounting, personnel, ERP package
introduction support, customer relations
management (CRM) systems, data warehousing
construction, data analysis services, and otheroffice work processing systems
 Office DX solutions using facial recognition
technology (reception system, marketing system,
work attendance record-keeping system) Cashless system for internal use
 Human resource management service “mieHR”
 Oil and gas related business support systems
 Cloud-based order and inventory management
system for retailers
 Sale and maintenance of computers, network
equipment, and software packages

Japan System Techniques
Co., Ltd.
Alpha Computer Co., Ltd.
NewNeeds Co., Ltd.
ISR Co.,Ltd.

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Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

Segment

SectorMain BusinessCompany NameEngineering applications(communications, control,
technology systems)

 Embedded software for smart devices, digitalaudio-visual equipment, and car mounted
systems
 IT/telecom systems for terrestrial digital
broadcasts, mobile communications, carnavigation, and simulators
 Driving support system, Home Energy
Management System (HEMS), IoT-based
system, and other systems

Japan System Techniques
Co., Ltd.
Alpha Computer Co., Ltd.
NewNeeds Co., Ltd.
ISR Co.,Ltd.

Strategic university
management system Development, sales, maintenance, andintroduction support for school office work
support integrated system GAKUEN RX series,
and contract development of related systems
 Development, sales, maintenance, andintroduction support for university integrated
web service system GAKUEN UNIVERSALPASSPORT RX and contract development ofrelated systems
 School operations system consultation, End User
Computing (EUC) support, and Business
Process Reengineering (BPR) support andoperation services
 Provision of GAKUEN QlikView, a decision
support system for university management
 Development, sales, maintenance, andintroduction support for GAKUEN EduTrack, an
online educational support system, andcontracted development of related systems
 Provision of UNIPAPay, an electronic money
issuance and settlement platform and related
services and hardware, including ticket vending
machines and POS registers
 Development, sale, and maintenance ofhardware products such as Certificate-Issuing
Kiosk and IC attendance management terminals
 Provision of cloud-based infrastructure services
for universities
 Provision of software services to universities by
subscription

Japan System Techniques
Co., Ltd.
Alpha Computer Co., Ltd.
Shanghai Jiafeng
Information Technology
Co., Ltd.

Information systems
integration package forfinancial institutions

 Development, sales, maintenance, andintroduction support for BankNeo, a data
integration package for financial institutions,and contracted development of related systems
 Cloud BankNeo Management System using apublic cloud platform for the management byfinancial institutions of goods and cash received
from customers

DX&SI
business

Packagebusiness-7-

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

Segment

SectorInspections, analysis andrelated services for medical
information data

Medicalbig data
business

Main BusinessCompany Name Provision of automated inspection services forhealth insurance claims JMICS (JAST Medical
Insurance Checking System) Cloud services for checking service providers
 Medical cost optimization services such as
generic drug price difference notification andappropriate drug guide Data health plan implementation support
services, including medical expenditure analysis
and analysis-based consulting
 Support for health business for health insurance
associations using systems and business process
outsourcing (BPO) Provision of one-stop Insurers Business Support
System (iBss)
 Service planning & development and help deskfor RezeptPlus*1, a cloud-based health insurance
claims management system for welfare public
assistance Services utilizing anonymously processed healthinsurance claims and special medical
examination data Development of a model for predicting the riskof severe COVID-19 symptoms in collaboration
with academia, provision of Coromiru *2, an app
for predicting COVID-19 infection risk

Japan System Techniques
Co., Ltd.
NewNeeds Co., Ltd.
K-SHIP Co., Ltd.

*1 RezeptPlus is a joint venture with Fujitsu Japan
Limited*2 Coromiru was jointly developed with Data4cs
K.K.
IT services for overseas
officesGlobalbusiness

 Consulting and related services for integrated
ERP implementation
 Consulting and related services for accounting
ERP implementation
 Development, sale, maintenance, andimplementation support of HRM solution
AFHRM, and contract development of related
systems
 Implementation of settlement-related systems
and development of related services for the
manufacturing industry
 Provision of offshore development services atoverseas development sites
 Contracted development of various businessapplications-8-

JASTEC（THAILAND）
CO., LTD.
JAST Asia Pacific Co., Ltd.
Bright & Better Co.,Ltd.
GuiLin Anxin Software Co.,Ltd.
Virtual Calibre SDN. BHD.
Virtual Calibre MSC SDN.
BHD.
Virtual Calibre Consulting
SDN. BHD.
Virtual Calibre Consulting
India Pvt. Ltd.
AG NET PTE.LTD.

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

The diagram below provides a visual representation of the positioning and relationships of businesses within the Group.

-9-Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

4. Affiliated Companies
Name of Company

Location

Main Line ofBusiness

Share Capital

Holding/Held
Ratio of Voting
Rights (%)

Relationship

Million yen(Consolidated subsidiary)
Alpha Computer Co., Ltd.
(Note 4)

Shinagawa-ku,
Tokyo

80

DX&SI business(Sales of computer
systems)

100

DX&SI business(Development andsales of software)

Subcontractor of
100 software development
Debt guarantee

DX&SI business(Development andsales of software)

100

Medical big databusiness (Healthinsurance invoiceprocessing andverifications)100

Global business(Development andsales of software)

49 Concurrent directors

Global business(Development andsales of software)

99.97 Concurrent directors

Global business(Development andsales of software)

48.90

Concurrent directors

Global business(Development andsales of software)90

Subcontractor ofsoftware development

Client of our packages
and other products

Million yen(Consolidated subsidiary)
NewNeeds Co., Ltd.

Kita-ku,
Osaka

10Million yen(Consolidated subsidiary)
ISR Co., Ltd.

Chiyoda-ku,
Tokyo

24

Subcontractor ofsoftware development

Million yen(Consolidated subsidiary)
K-SHIP Co., Ltd.

ToyonakaCity, Osaka

55

1,000 Thai Baht
(Consolidated subsidiary)
JASTEC(THAILAND)
CO.,LTD. (Note 1)

Thailand

3,000
1,000 Thai Baht

(Consolidated subsidiary)
JAST Asia PacificCO., Ltd.

Thailand

10,0001,000 Thai Baht

(Consolidated subsidiary)
Bright & Better Co., Ltd.
(Note 2)Thailand

2,000
10,000 yuan(Consolidated subsidiary)
GuiLin Anxin SoftwareCo., Ltd.

China

210
10,000 yuan(Consolidated subsidiary)
Shanghai Jiafeng
Information Technology
Co., Ltd.

China

440

Package business(Sales anddevelopment ofsoftware)94.45 Concurrent directors

Global business(Development andsales of software)

100 Concurrent directors

Global business(Development andsales of software)

100 Concurrent directors

1,000 Malaysian
Ringgit(Consolidated subsidiary)
Virtual Calibre SDN. BHD. Malaysia

1,000
1,000 Malaysian
Ringgit(Consolidated subsidiary)
Virtual Calibre MSC
SDN.BHD.

Malaysia

3,000- 10 -

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

Name of Company

Location

Share Capital

Main Line ofBusiness

Holding/Held
Ratio of Voting
Rights (%)

Relationship

1,000 Malaysian
Ringgit(Consolidated subsidiary)
Virtual Calibre Consulting
SDN.BHD. (Note 3)

Malaysia

1,500

Global business(Development andsales of software)

30 Secondment of[30] directors

Global business(Development andsales of software)

100
[100]

Global business(Development andsales of software)

100 Concurrent directors

1,000 Indian rupees(Consolidated subsidiary)
Virtual Calibre Consulting
India Pvt. Ltd.

India

20,0001,000 Singapore
dollars(Consolidated subsidiary)
AG NET PTE.LTD.
(Note 4)Singapore

2,774
Million yen

Held(Related company)
Nishi-ku,
Real estate50(23.36) Concurrent directors
Sakai, Osaka
management
Although JAST’s voting rights are less than 50/100, it is considered a JAST’s subsidiary because it is substantiallycontrolled by JAST due to secondment of directors and concurrent directors.
Although JAST’s voting rights are less than 50/100, it is considered a JAST’s subsidiary because it is substantiallycontrolled by JAST due to concurrent directors.
Although JAST’s voting rights are less than 50/100, it is considered a JAST’s subsidiary because Virtual Calibre MSC
SDN. BHD. owns 30/100 of this company and JAST substantially controls this company through secondment of
directors.
This company is a specified subsidiary.
There are no companies reporting securities filings or annual reports.
Figures in parentheses in the holding ratio of voting rights represent the percentage of indirectly held votes.

JUST Co., Ltd.
Notes: 1.
2.
3.

4.
5.
6.

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Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

5. Employees(1) Consolidated basis
As of March 31, 2024
Number of employees

Segment
DX&SI business

723

Package business

228

Medical big data business

157

Global business

617

Corporate (common)

122
Total

1,847

Notes: 1. The number of employees represents the number of full-time employees. The number of temporary employees(including seasonal workers, part-timers, and temporary workers from agencies, excluding permanent part-timers) isomitted because their total number is less than 10/100 of the number of employees.
2. The number of corporate (common) employees represents the number of employees belonging to administrative
departments, etc., which cannot be classified into any particular segment.

(2) Non-consolidated basis
Number of employees

Average age

1,009

Average years of service
35.4

9.6

Segment

As of March 31, 2024
Average annual salary(Thousand yen)
6,213

Number of employees

DX&SI business

589

Package business

223

Medical big data business

93

Corporate (common)

104
Total

1,009

Notes: 1. Average annual salaries are actual figures for the fiscal year ended March 31, 2024, and include bonuses and nonstandard wages.
2. The number of employees represents the number of full-time employees. The number of temporary employees(including seasonal workers, part-timers, and temporary workers from agencies, excluding permanent part-timers) isomitted because their total number is less than 10/100 of the number of employees.
3. The number of corporate (common) employees represents the number of employees belonging to administrative
departments, etc., which cannot be classified into any particular segment.

(3) Labor union
No labor union has been formed, but labor-management relations are amicable.
(4) Percentage of female workers in managerial positions, percentage of male workers taking childcare leave, andgender wage gap(i) Non-consolidated basis
FY3/24
Percentage of female
Percentage of male workers
workers in managerial
taking childcare leave (%)
positions (%) (Note 1)(Note 2)
7.7
33.3

Gender wage gap (%) (Note 1)
All workers
77.4

Permanent full-timeworkers

Part-time and fixedterm workers

77.3

66.3

Notes: 1. Gender wage gap is calculated in accordance with the Act on the Promotion of Women’s Active Engagement inProfessional Life (Act No. 64 of 2015).
2. Percentage of workers taking childcare leave is stipulated in Article 71-4, paragraph (1) of the Ordinance for Enforcementof the Act on Childcare Leave, Caregiver Leave, and Other Measures for the Welfare of Workers Caring for Children or
Other Family Members (Ordinance of the Ministry of Labor No.25, 1991), and calculated in accordance with the Act onChildcare Leave, Caregiver Leave, and Other Measures for the Welfare of Workers Caring for Children or Other Family
Members (Act No. 76, 1991)- 12 -

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

II. Business Overview
1. Management Policy, Business Environment and Issues to be Addressed(1) Management policy
JAST, since its inception, has maintained its complete independence by keeping itself unaffiliated with othercorporate groups, based on the corporate philosophy of “making society a better place by creating and providing new
types of IT services.” While consistently pursuing the latest technologies, JAST has remained free to take ondevelopment projects in a wide variety of areas, unconstrained by industry, technology, or platform. We have achieved
long-term, stable growth in business performance by combining unchanging principles that never cease being true
even as the years pass and flexible management that is adapted to match the times or surroundings.
(2) Management strategies, etc.
Although the Japanese economy is showing a recovery trend with the support of consumer spending and an
improvement in the labor market, the outlook is expected to remain uncertain due to high prices of materials andenergy worldwide, exchange rate volatility, and other reasons. In the IT industry, there is rapid progress involving AI
and other digital technologies, increasing diversification of software development methods, including no-code andlow-code platforms, and many digital transformation activities at companies. As a result, growth of the IT market is
expected to continue. Furthermore, this growth will be accompanied by challenges concerning labor shortages andincreasingly heated competition on a global scale.
For more progress in this business climate, the Group has examined additional measures for accomplishing the goalsof the current medium-term plan and established an action plan. In addition, as we celebrate our 50th anniversary,
we are taking action to enable our group to continue creating value for many more years. Actions include theestablishment of a new long-term vision and medium-term plan concerning our corporate image, business portfolio,
scale of operations and other aspects of the Group’s activities.
The central theme of the Group in the fiscal year ending in March 2025 is “use JAST’s DNA for more progress during
the next 50 years.” In the DX&SI business, which is our largest core business, we plan to focus on services, solutions
and other value-added business activities. In addition, we plan to build a new business model in order to make thisbusiness highly profitable and to expand operations to more business domains. In the package, medical big data andother businesses using our own brands, our goals are more upgrades of the functions and quality of all flagshipproducts. To make our brand even more powerful, we also plan to create new businesses and services and move fasterfor their growth, make strategic R&D investments, and establish alliances with other companies. By taking theseactions, we are also aiming to continue to grow in every business domain where we operate. In the global business,
our goals are expanding the SAP business to more markets, upgrading the performance of current products andproviding a broad range of solutions. In addition, we plan to use alliances for the development and sale of new
products for the sustained growth of the global business.
(3) Objective indicators used to assess if management targets have been achieved
JAST understands the importance of achieving the sales and profit targets it announces every fiscal year. Based on
the standpoint of increasing corporate value by earning returns on shareholders’ equity, JAST’s basic policy is a
steady, long-term growth in line with results of operations while taking into consideration the cost of capital. Returnon equity (consolidated), which had declined in recent years due to extraordinary losses and other factors, has also
improved significantly to 17.8% in the fiscal year ended March 31, 2024. This was attributable to new businessdevelopment and improved project quality due to strengthening of sales and management promotion departments, aswell as to the strengthening of management systems at overseas subsidiaries.
(4) Business environment
Although the Japanese economy is showing a recovery trend with the support of consumer spending and an
improvement in the labor market, the outlook remains uncertain due to high prices of materials and energy worldwide,- 13 -

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

exchange rate volatility, and other reasons.
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 March 2024 figures), net sales continued to climb, rising 6.7%
year on year for 2023 compared with 3.8% annual growth in 2022. Despite this growth, the outlook for the IT industry
is extremely uncertain.
(5) Business and financial issues to be prioritizedFirst, in the DX&SI business, we divide our business portfolio into the following three areas and plan to increase
earnings by using alliances and further improving our proposal and negotiation skills to expand the scale of operations
as a core business: “SI” to expand in high-value-added business domains by using proposal-based DX collaborative
development, “Solution” to propose solutions based on advanced technologies to help resolve customers’ issues; and“Service” to provide a wide range of digital services, from operation and maintenance to data science and consulting.
Second, the package business deals in the GAKUEN series package—with the mainstays of GAKUEN, an integrated
school office work support system and UNIVERSAL PASSPORT, an integrated web service system for universities—
and the BankNeo, a data integration package that provides total support for financial institution operations. We will
expand sales of the current businesses by leveraging the powerful GAKUEN brand that we have established and at
the same time, provide and expand new learning environments by developing comprehensive services for education
DX that go beyond the education big data business and IT services. With the BankNeo package, we will promote
cloud computing, continuously create niche solutions, and take on challenges such as creation of new products andcollaborations with other companies to expand into the regional DX market and increase business performance.
Next, in the medical big data business, our ultimate goal is goal is to become a comprehensive provider of health care
DX services. Toward that goal, we aim to expand our one-stop service lineup for insurers that is centered on the
JMICS automated electronic health insurance claims checking system and the iBss business support system forinsurers. We also plan to build a new business model for data utilization services, reinforce consulting operations byusing a team with specialized knowledge, and take other actions in order to enlarge the base for generating earnings.
Furthermore, we use alliances with academic institutions to create new ideas and M&A and business alliances toenter new markets and expand our presence in these markets.
In our global business, we have development and sales bases in major regions of China and South Asia, primarily in
ASEAN countries where economic growth rates are high. In this business, our goal is to accelerate our growth alongwith the expansion of the DX market, chiefly in the world’s most digitally advanced countries. One initiative is theuse of consultation services for using mcframe*1, SAP*2 and other ERP products with the goals of helping customers
with the DX of their operations and of expanding sales channels to the Pacific Rim, Middle East and other regions
where we do not yet operate. We are also upgrading and expanding functions of AGHRM, a cloud personnel
management solution, and using alliances to create and launch new products faster.
*1. mcframe is a registered trademark of Business Engineering Corporation and a generic name for a product group consisting
mainly of SCM/ERP software.
*2. SAP is a registered trademark of SAP SE, and is a group of business applications that are typical of enterprise core system
packages consisting of an accounting system, logistics system, sales system, human resource system, etc. in a company.

2. Approach to Sustainability and Initiatives
The Group’s approach to sustainability and its initiatives are as follows. Forward-looking statements are based on the
judgment of the Group as of the end of the current fiscal year.
(1) Governance
Based on the corporate philosophy of “making society a better place by creating and providing new types of IT services,”the Group strives to do what is best for our four key stakeholders: customers, shareholders, employees and society. We
hope to maximize value for all stakeholders and achieve medium- and long-term growth of corporate value with thesustainable growth of business operations.
- 14 -

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

As a longstanding corporate social responsibility (CSR) initiative, we have incorporated the Seven Key Principles andSeven Core Subjects of the ISO26000, an international standard that defines the principles and subjects of social
responsibility of organizations through their core business, into our business operations. Moreover, we have obtained
environmental management system-related ISO14001 certification (international standard for environmental
management systems) and are, thus, continually implementing the PDCA cycle.
In July 2021, we announced the SDGs Declaration and view the achievement of the sustainable development goals(SDGs) as a shared challenge for all Japan System Techniques employees. We are also working to ensure thecontinuation and improvement of sustainability priority issue initiatives within the PDCA cycle.
The Group has designated these core subjects and priority issues as materialities (material issues) involving
sustainability and is organizing a structure and implementing specific initiatives in order to integrate these issues withits business activities.
ISO26000 Core subjects

JAST Group Initiatives

Organizational governance

Strengthening of corporate governanceContinuous operation and improvement of internal control systems
Establishment of a risk management system
Dialog with stakeholders
Multistakeholder policy

Human rights

Respect for human rights and prohibition of discrimination

Environment

Management activities conforming to ISO14001
Energy-saving programs in offices

Labor practices

Proper work-life balance
Support for diversity
Regular improvement activities by the Occupational Safety and Health Committee
Health and productivity management initiatives

Fair operating practices

Fostering a compliance-oriented mindset (regular awareness-raising training)

Consumer issues

Obtaining ISO9001 and personal information protection management system (P mark)certification

Community involvement and development

Community cleanup activities
Bell mark, eco-cap collection activities
Donations (money and materials)
Volunteer activities (support for disaster-affected areas)

Sustainability priority issues

JAST Group Initiatives

Industry and ICT innovation

Making society a better place by creating and providing new types of IT services
Supporting structure transformation of industry with ITC
Contribution to co-creation and collaboration system establishment and ecosystemtransformation
Working in solidarity with Group and partner companies

Support for ICT-driven learning
activities

Providing a comprehensive solution in building the future of universities
ICT-driven, high-quality classroom support and technology-based education
Facilitating improved educational quality through the use of educational big data
Realization of recurrent education (lifelong learning) environment
AI and IoT research development aimed at the digitalization of education
Providing new services for the Generation Z

Contribution to health care cost
optimization and health promotion

Using medical big data to contribute to health care cost optimization for insurers andpromotion of the health of the insured
Joint research efforts with academia and others to help find solutions to address disease,including infectious diseases, and medical challenges
Open-sourcing medical big data

- 15 -

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

Efficiency enhancement offinancial operations based on
information systems integration
package

Contributing to society via information systems integration package business aimed atfinancial institutions

Contribution to enterprisetransformation via digitalization
promotion

Cashless service for employee cafeterias and offices“mieHR” human resources data platform
Office DX—Facial recognition-based attendance recording

Health and productivity
management initiatives

Health and productivity management promotion
Promotion of regular health examinations and multiphasic health screenings
Elimination of long working hours
Communication promotion initiatives (e.g., events)
Physical and mental health promotion

Provision of learning
opportunities

A robust in-house training system (e.g., in-house professional certification programs)
Internships (providing students with systems engineering work experience)
Supporting education and learning through systems development

Diversity initiatives

Hiring and fair treatment without consideration of race, nationality, gender, etc.
A variety of in-house systems for supporting a variety of work styles
Contract with “Work Happiness Farm” run by S-POOL Plus Inc.

Environmental load mitigation

Initiatives to promote paperless offices via DX promotion
Initiatives to address environmental issues in our offices, data centers and elsewhere(2) Strategies
Regarding the various strategies related to the Group’s materialities stated in “(1) Governance” above, the divisions
in charge of each theme have established policies and plans to resolve the issues and are continuously implementing
the PDCA cycle. Among the Group’s materialities, the policy on human resource development, which includes
ensuring diversity in human resources, and the policy on internal environment improvement are shown below.
Policies on human resource development and internal environment improvement:
Through the JCPL (JAST Certified Project Leader) system, an in-house certification system, we develop IT engineers
with the knowledge and skills necessary for project management and provide a training curriculum aimed atdeveloping DX personnel, as well as conduct working group activities with selected management-level personnel.
In order to improve employee engagement, wellbeing, and employee retention, we strive to establish a system thatallows each employee to fully demonstrate their abilities with a sense of fulfillment in their work while maintaining
a good work-life balance, a comfortable work environment where employees can continue working with peace ofmind, and settings that enable employees to work without restrictions on time and place. Specific measures are as
follows.

- 16 -

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024(i) Measures to improve engagement
Aiming to maintain and improve organizational strength over the medium term, we conduct surveys to objectively
identify organizational issues. Based on the understanding of engagement levels through this survey, we implement
engagement improvement activities.
(ii) Health and productivity management promotion and perspectives on well-being
We are strategically and systematically working on health and productivity management, positioning efforts tounderstand and continuously improve the health status of employees as an essential investment in enhancing individualand organizational performance.
(iii) Telework program
We have realized a location-independent work style by development of operational rules, digitization, paperless work,or other measures with the aim of maintaining and improving organizational and individual productivity, thereby
achieving both diversification of work styles and a favorable work-life balance.
(3) Risk management
The Group is making company-wide efforts to manage risk related to sustainability activities by comprehensively
identifying and responding to issues and assessments from CSR activities and SDGs promotion activities, as well as
requests and expectations from stakeholders. The Group is striving to enhance its risk management system and has
established a system to report the status and results of its efforts to the Board of Directors as appropriate. For detailsof risk management, please refer to “3. Business Risks.”(4) Indicators and targets
Among the indicators and targets relating to the Group’s materialities stated in “(1) Governance” above, the policy
on human resource development, which includes ensuring diversity in human resources, and the policy on internal
environment improvement are shown below.
With regard to the indicators relating to the policy on human resource development, which includes ensuring diversity
in human resources, and the policy on internal environment improvement stated in “(2) Strategies” above, althoughspecific efforts are being made at JAST, along with data management of related indicators, it is difficult to present
them on a consolidated basis because not all companies in the consolidated group are doing so. For this reason, thetargets and results for the following indicators are those of the reporting company, which operates the main businessin the consolidated group.
Indicators relating to policies on human resource development and internal environment improvement, and targets andresults thereof:
Indicator
Percentage of female workers inmanagerial positions
Percentage of male workers taking
childcare leave
Gender wage gap
Note:

TargetResult (FY3/24)

20% by March 2028

7.7%

80% by March 2028

33.3%

85% by March 2028

77.4%

The actual figures of the percentage of female workers in managerial positions, percentage of male workers taking childcare
leave, and gender wage gap are disclosed in “I. Company Overview, 5. Employees, (4) Percentage of female workers inmanagerial positions, percentage of male workers taking childcare leave, and gender wage gap.”- 17 -

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

3. Business Risks
Of the matters related to Business Overview and Financial Information stated in this Annual Securities Report, themanagement has recognized that the items listed below constitute major risk factors that may have a material impact on
the financial position, operating results, and cash flows of consolidated companies. This section contains forward-looking
statements based on the Group’s estimates and assumptions made as of the filing date of this Annual Securities Report.
(i) Risks related to unprofitable projects and defects in products and services
The progress of digital technologies, including AI, big data and blockchain, diversification of development methods
such as low-code/no-code, and the rapid progress and increase in utilization of new information processing
technologies represented by the cloud, have made the information systems we are involved in developing more andmore complex. As a result, there is an increasing risk of unprofitable projects due to the need to go back and redo
certain steps, the result of inadequate definitions of system specifications and incompatibilities, and the inability todetermine accurate estimates. Moreover, the demands of clients regarding quality have become stricter as public
interest in quality and defect issues related to IT products and services increases, given the growing impact of these
defects on society. The Group is thoroughly educating employees about improving and stabilizing the quality of
products and services, strengthening screening functions during the quote and order process, improving quote
technology, and reinforcing project management. Nevertheless, the Group cannot rule out the possibility of
unprofitable projects and defects that could cause higher costs due to client indemnities and product repairs, and withcredit deterioration. These risk factors may result in a material impact on the Group’s business performance.
(ii) Risks related to information management, misuse, and negligence
Because the Group handles critical information, including medical data, it has formulated internal guidelines, trained
employees, and holds regular inspections conducted by professional organizations to thoroughly prevent the leak ofconfidential or personal information involving clients or employees, as well as accidents due to negligence of all
kinds, and misuse. Moreover, cyber-security risks have become a serious management issue as cyber-attacks become
increasingly sophisticated. For this reason, we have established the JAST-SIRT as a CSIRT*1 to monitor and analyze
cyber security threats and strengthen our response capabilities. In addition, we have purchased information leakliability insurance to be prepared for worst-case scenarios. However, accidents and fraud may occur because no
preventive measures are absolutely reliable, and the occurrence of these problems could lower the Group’s
creditworthiness, require indemnities, and result in a material impact on the Group’s business performance.
*1. Stands for Computer Security Incident Response Team, which is a generic name for a group of professionals that responds
to computer security incidents.

(iii) Risks related to litigation
The Group is subject to the risk of litigation related to its operations in all business areas. Litigation or other legal
actions may result in an order to pay an unexpectedly large amount of damages that, depending on the amount, could
have a significant impact on the Group’s performance and financial position.
(iv) Risks related to maintaining a development infrastructure
Due to factors such as the diversification of digital technology and the increasing sophistication of expertise, theindustry faces difficulties in securing excellent human resources. Our group maintains a development infrastructureby hiring new graduates and mid-career employees and obtaining people from subcontractors. However, if the volumeof orders changes and we are unable to hire a sufficient number of people, the Group’s operations may be disrupted.
Furthermore, if the unit price of outsourcing orders rises due to a breakdown in the supply-demand balance, inflationor other factors, the Group’s business performance may be affected. We are working on reducing exposure to theserisk factors by strengthening our internal structure for relationships with excellent partner companies and recruiting
engineers through overseas offshoring and nearshoring in Japan. Furthermore, we are increasing employee
engagement activities to improve retention, working on health and productivity management, and using othermeasures that benefit employees.

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Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024(v) Risks in technological innovation and new product development
The Group makes substantial investments in R&D to develop products and discover new business seeds. However,in a rapidly changing industry, it is not always possible to accurately forecast future demand and constantly develop
and supply new products and services that result in appropriate earnings. If there is a significant difference between
the scale of prior investments and the subsequent monetization of these investments, the forecast of future
performance and growth of the Group may be affected.
(vi) Risks of corporate acquisitions, etc.
When conducting corporate acquisitions and other activities, the Group performs thorough preliminary assessmentsof the financial position and business of the target company and collects and examines the necessary and sufficient
information for decision-making. However, it is not always possible to identify and resolve all concerns in every
project through this preliminary research. Sales and earnings due to the acquisition or other action may be far below
expectations after the acquisition or other action has been completed because of issues that the Group was not awareof occur or the inability to capture synergies as anticipated because of a change in the business climate or business
operations or some other reason. If any of these problems occur, the business performance of JAST and the Groupmay be affected by the impairment of goodwill or other intangible assets in the consolidated financial statements ora decrease in the valuation of shares of affiliated companies in the non-consolidated financial statements. Besides,
although we are working to strengthen the development and sales systems and governance of subsidiaries in order tocontribute to the growth of the corporate value of the Group, a downturn in the business performance of a subsidiaryor deterioration in the geopolitical environment could affect the business performance and financial position of theGroup.
(vii) Risks associated with large-scale disasters and pandemics
To be prepared for a natural disaster, such as a major earthquake or a global outbreak of an infectious disease(pandemic) that would make it difficult to conduct business, the Group has established a business continuity plan andguidelines. Furthermore, the Group has a system and environment to enable an initial response and the rapid
restoration of business operations. The main offices of the Group have advanced disaster prevention capabilities toensure business continuity. The data center used by the Group has high standards regarding security measures anddisaster countermeasures such as earthquake resistance. In addition, we have established the necessary plans andsystems to ensure business continuity during a pandemic and are taking thorough measures to prevent infections.
Consequently, at this time, these risks do not have a significant impact on the Group’s business. However, if an eventor situation beyond a company’s control were to occur and business interruption became unavoidable, the Group’s
performance and financial position could be affected.
(viii) Risk of economic downturn
The Group has taken full advantage of having no affiliations with other companies to operate businesses without
depending on specific industries, technology fields, or manufacturers. This characteristic makes the Group relatively
unaffected by economic trends. However, if the Japanese economy or overseas economy slumps for a prolonged
period of time, the Group’s performance may be affected as client companies curtail system development investments
due to declining profitability.
(ix) Risks associated with the concentration of earnings near the end of each fiscal year
A unique feature of the Group’s businesses is that customers’ inspections of SI development, solutions, services,
packaged products, and other items tend to take place mainly in March, the last month of the fiscal year for mostclients. Since most of our orders are recognized as revenue based on the progress of fulfilling the performanceobligations, quarterly sales and operating profit are generally leveled out. However, for some projects not subject torevenue recognition based on the degree of completion, sales and earnings still tend to be recognized at the end of
the fiscal year.

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Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

Quarterly sales and operating profit for the fiscal years ended March 31, 2023 and 2024:(Million yen)
FY3/23
Q1
Sales
Operating profit

Q2

Q3

Q4

Total

5,119

5,884

5,631

6,884

23,519

261

742

556

825

2,385
(Million yen)

FY3/24
Q1
Sales
Operating profit

Q2

Q3

Q4

Total

5,640

6,492

6,395

7,655

26,183

122

881

610

1,176

2,791

(x) Risk of product obsolescence
The products handled by the Group are procured from manufacturers and distributors, but some products have large
minimum order quantities and are subject to the risk of inventory obsolescence. The Group exercises care toaccurately forecast required quantities while monitoring sales conditions. However, if procured products become
obsolete or if procurement is delayed due to stagnation in the supply chain caused by raw material shortages or otherreasons, resulting in the inability to supply customers promptly and the loss of business opportunities, the Group’sbusiness results may be adversely affected. In addition, if product defects or other problems occur, the Group’sbusiness results may be affected due to compensation to customers, product repairs, and other expenditures.
(xi) Risks associated with the valuation of assets
The Group owns marketable securities and other assets under investments and other assets. The amount of theseassets is considerably smaller than current assets, which can be easily converted to cash. Nevertheless, unpredictableor rapid changes in market prices or the bankruptcy of issuers, while difficult to forecast, could reduce the value ofthese assets, impacting the Group’s performance.
(xii) Risks associated with the global business
The Group has several subsidiaries in China, ASEAN, and South Asia. All of these companies are vulnerable tosuspensions of the provision of systems and services and the effects of exchange rate movements caused by revisions
in policies and laws resulting from political, economic or social changes in countries and regions they operate as well
as by international conflicts and other events. These risk factors may affect the Group’s business performance andfinancial position.
(xiii) Risks related to revenue recognition
Revenues from contracts with customers of JAST and its consolidated subsidiaries mainly consist of software madeto-order. For contracts where the performance obligation is fulfilled over a specified period, the progress of fulfilling
the performance obligation is estimated, except when the period is extremely short, and revenue based on the progress
is recognized for that period. When estimating the total cost of construction, which is the basis for the recognition ofrevenue based on the progress of fulfilling the performance obligation, JAST takes the utmost care and secures project
management. However, errors in estimating the total cost of construction in a timely and appropriate manner could
result in the misrecognition of revenues based on the progress of fulfilling the performance obligation. For projects
where the estimated cost exceeds the estimated revenue, JAST strictly assesses the recoverable amount andrecognizes a loss for the unrecoverable amount. If costs increase in the future, additional losses may be recognized.

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Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

4. Management’s Analysis of Financial Status, Operating Results and Cash Flows(1) Overview of Operating Results
Financial status, operating results and cash flows (hereafter “Operating Results”) of JAST and its consolidated subsidiaries,
hereafter “the Group”) in the current fiscal year are as follows.
(i) Financial Status
Balance sheet of the Group at the end of the current fiscal year is as follows.
(Assets)
The balance of current assets at the end of the current fiscal year was 15,710 million yen (up 10.7% year on year). Thiswas mainly due to increases in cash and deposits, and accounts receivable-trade and contract assets. The balance of noncurrent assets were 4,311 million yen at the end of the current fiscal year (up 33.6% year on year).
(Liabilities)
The balance of current liabilities at the end of the current fiscal year was 5,222 million yen (up 11.0% year on year).
This was mainly due to increases in contract liabilities (advances received for business activities), accrued expenses andincome taxes payable. The balance of non-current liabilities was 2,087 million yen at the end of the current fiscal year
(up 10.2% year on year).
(Net assets)
The balance of total net assets was 12,712 million yen at the end of the current fiscal year (up 17.5% year on year).
(ii) Status of Operating Results
Consolidated sales of the Group were 26,183 million yen (up 11.3% year on year). Operating profit was 2,791 million
yen (up 17.0% year on year), ordinary profit was 2,861 million yen (up 16.8% year on year), and profit attributable toowners of parent was 2,086 million yen (up 17.8% year on year). Business segment performance was as follows.
(DX&SI business)
Segment sales increased 6.4% from one year earlier to 15,251 million yen and the operating profit increased 8.3% to2,250 million yen. The number of large orders received directly from existing and new customers was higher than one
year earlier. As a result, the overall profitability of the business increased.
(Package business)
Segment sales increased 9.9% from one year earlier to 4,933 million yen and the operating profit increased 10.6% to1,383 million yen. There was an increase in sales of program products, installation and support services, and IT
equipment involving the GAKUEN series, a strategic university management system. Sales of program products for
BankNeo, an information systems integration package for financial institutions, were lower than one year earlier.
(Medical big data business)
Segment sales increased 30.8% from one year earlier to 2,644 million yen and the operating profit was up 50.2% to 686
million yen. The performance of this business improved primarily due to increased sales of highly profitable analysis
services, a cloud-based health insurance claims management system for welfare public assistance, and other services.
(Global business)
Segment sales increased 25.5% from one year earlier to 3,354 million yen and the operating prfit increased 48.4% to402 million yen. This can be largely attributed to higher sales resulting from the large number of orders received for
SAP installation support services in Malaysia, even though there were lower sales in SI development projects in China.

(General and administrative expenses not allocated to a reportable segment)
Corporate general and administrative expenses increased 15.5% from one year earlier to 1,931 million yen. This increase
was attributable mainly to more education and training programs as the number of employees increased, more recruiting- 21 -

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

activities, and expenditures involving the addition of office space and upgrading the IT infrastructure.
(iii) Status of Cash Flows
Cash and cash equivalents increased 722 million yen from 6,793 million yen at the beginning of the current fiscal year
to 7,515 million yen at the end of the current fiscal year.
Cash flows by category were as follows.
(Cash Flows from Operating Activities)
Net cash provided by operating activities totaled 1,888 million yen, compared with 1,073 million yen provided in theprevious fiscal year. This difference was mainly due to an increase in profit before income taxes and a decrease inpayments of other payables.
(Cash Flows from Investing Activities)
Net cash used in investing activities totaled 761 million yen, compared with 541 million yen used in the previous fiscal
year. This difference was mainly due to increases in purchase of property, plant and equipment and loan advances while
there were proceeds from purchase of shares of a subsidiary resulting in change in scope of consolidation.
(Cash Flows from Financing Activities)
Net cash used in financing activities totaled 424 million yen, compared with 280 million yen used in the previous fiscal
year. This difference was mainly due to an increase in dividends paid.
(iv) Production, Order Entry and Sales
a. Production
Production performance in each segment in the current fiscal year is as follows:
Name of Segment

FY3/24(Apr. 1, 2023 – Mar. 31, 2024)

Year-on-Year
Comparison (%)

DX&SI business (Thousand yen)

12,166,359

105.5

Package business (Thousand yen)

2,842,899

112.2

Medical big data business (Thousand yen)

1,574,343

128.8

Global business (Thousand yen)

2,324,012

121.7

Total (Thousand yen)
18,907,615
Note: The amounts are based on cost of sales and transactions between segments are eliminated by offsets.

110.0

b. Orders Received
The status of orders received in each segment in the current fiscal year is as follows:
Year-on-Year
Comparison (%)

Year-on-Year
Comparison (%)

109.8

Balance ofOrders Received
4,856,304

122.8

3,115,646

142.5

DX&SI business (Thousand yen)Amount of Orders
Received
16,009,454

Package business (Thousand yen)

5,861,940

Medical big data business (Thousand yen)

2,391,185

113.4

561,549

68.9

Global business (Thousand yen)

3,354,411

125.5

-

-

Total (Thousand yen)
27,616,991
114.4
8,533,500
Note: The amounts are based on sales price and transactions between segments are eliminated by offsets.

120.2

Name of Segment- 22 -

118.5

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

c. Sales Performance
The sales performance in each segment in the current fiscal year is as follows:
FY3/24(Apr. 1, 2023 – Mar. 31, 2024)

Name of Segment

Year-on-Year
Comparison (%)

DX&SI business (Thousand yen)

15,251,285

106.4

Package business (Thousand yen)

4,933,451

109.9

Medical big data business (Thousand yen)

2,644,373

130.8

Global business (Thousand yen)

3,354,411

125.5

Total (Thousand yen)

26,183,521

111.3

Notes: 1. Transactions between segments are eliminated by offsets.
2. The following table indicates sales amounts to major customers and their ratios to total sales amount.

Customers

FY3/23(Apr. 1, 2022 – Mar. 31, 2023)
Amount(%)(Thousand yen)

Customers

FY3/24(Apr. 1, 2023 – Mar. 31, 2024)
Amount(%)(Thousand yen)

NTT COMWARECORPORATION

2,102,664

8.9

NTT COMWARECORPORATION

2,197,223

8.4

TIS Inc.

1,371,510

5.8

TIS Inc.

1,290,283

4.9

Honda Motor Co., Ltd.

1,083,936

4.6

Honda Motor Co., Ltd.

1,196,342

4.6(2) Views and issues analyzed/discussed with regard to the status of operating results, etc. from the management’s
perspective
Views and issues analyzed/discussed with regard to the status of operating results, etc., from the management’s
perspective are as follows.
Forward-looking statements are based on the judgment as of the end of the current fiscal year.
(i) Significant accounting estimates and assumptions thereof
The Group’s consolidated ﬁnancial statements are prepared based on accounting principles generally accepted in Japan.
In preparing these consolidated financial statements, accounting estimates are made based on reasonable criteria formatters requiring estimation.
The information on signiﬁcant accounting estimates and assumptions used for preparing consolidated ﬁnancial
statements is disclosed in “V. Financial Information, 1. Consolidated Financial Statements, etc., (1) Consolidated
Financial Statements, Notes to Consolidated Financial Statements, Signiﬁcant Accounting Estimates.”(ii) Recognition, analysis and discussions of the status of financial position and operating resultsa.

Financial position

Recognition, analysis and discussions of financial status is stated in “II. Business Overview, 4. Management’s
Analysis of Financial Status, Operating Results and Cash Flows, (1) Overview of Operating Results, (i) Financial
Status.”b.

Operating results

Recognition, analysis and discussions of the status of operating results is stated in “II. Business Overview, 4.
Management’s Analysis of Financial Status, Operating Results and Cash Flows, (1) Overview of Operating Results,(ii) Status of Operating Results.”c.

Cash flows

Recognition, analysis and discussions of the status of cash flows is stated in “II. Business Overview, 4.
Management’s Analysis of Financial Status, Operating Results and Cash Flows, (1) Overview of Operating Results,(iii) Status of Cash Flows.” Trends of cash flow-related indicators are as follows:- 23 -

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

Cash flow indicators
FY3/2047.7

FY3/21
53.0

FY3/22
58.9

FY3/2361.8

FY3/2463.2

Equity ratio based on market value (%)

42.1

64.2

101.9

128.3

222.1

Interest-bearing debt to cash flow ratio (years)

3.6

0.2

0.0

0.0

0.0

Equity ratio (%)

Interest coverage ratio (times)
94.1
615.0
1,009.9
1,730.2
4,733.2
Note:
1. The above figures are calculated as follows.
Equity ratio: Shareholders’ equity / Total assets
Equity ratio based on market value: Market capitalization / Total assets
Interest-bearing debt to cash flow ratio: Interest-bearing debt / Operating cash flows
Interest coverage ratio: Operating cash flows / Interest payments* Market capitalization is calculated by multiplying the closing share price at the end of the period by the number ofshares outstanding at the end of the period, excluding treasury shares.
* Interest-bearing debt is calculated using total loans-payable on the consolidated balance sheet.
* Interest payments use the amount of interest expenses paid stated on the consolidated statement of cash flows.

(iii) Capital resources and funds’ liquidity
a. Cash flows
Analysis of cash flows for the current fiscal year is stated in “II. Business Overview, 4. Management’s Analysis ofFinancial Status, Operating Results and Cash Flows, (1) Overview of Operating Results, (iii) Status of Cash Flows.”
b. Financial policy
The basic policy of the Group is to keep the liquidity needed for operating business and funds resources consistently.
Short-term working capital is basically financed by internal funds or short-term loans from financial institutions, while
capital investment funds and long-term working capital are basically financed by long-term loans from financial
institutions.
The Company has commitment line contracts with four banks, totaling 500 million yen as of the end of the current fiscal
year (no outstanding balance of facilities drawn).

(iv) Factors that have material impacts on operating results
Factors that have material impacts on operating results are presented in “II. Business Overview, 3. Business Risks.”(v) Analysis of capital resources and the funds’ liquidity
The Group raises funds necessary for its business activities, including working capital and capital investment, throughits funds and loans from financial institutions.
We plan to finance future needs through cash flows from operating activities and loans.
(vi) Awareness of the issues by management and future policies
Issues for future growth are presented in “II. Business Overview, 1. Management Policy, Business Environment andIssues to be Addressed.”(vii) Management policy, management strategies, and objective indicators used to assess if management targets havebeen achieved
The Group recognizes net sales, targets for each category of earnings, and the return on equity (ROE), all on aconsolidated basis, as key management indicators.
In the current fiscal year, net sales were 26,183 million yen, 3.5% higher than the forecast of 25,300 million yen
announced on May 12, 2023; operating profit was 2,791 million yen, 9.9% higher than the forecast of 2,540 million
yen; ordinary profit was 2,861 million yen, 10.1% higher than the forecast of 2,600 million yen; and profit attributableto owners of parent was 2,086 million yen, 11.0% higher than the forecast of 1,880 million yen. The consolidated return- 24 -

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

on equity (ROE) was 17.8%.
On May 13, 2024, we announced the consolidated sales and earnings forecast for the fiscal year ending March 31, 2025:
net sales of 28,570 million yen, operating profit of 3,150 million yen, ordinary profit of 3,200 million yen, and profit
attributable to owners of parent of 2,300 million yen. We are determined to accomplish these goals while taking actions
aimed at continuing to improve the consolidated return on equity (ROE).
Other priorities from a medium to long-term perspective are increasing profitability to a level that exceeds the cost ofcapital and maximizing corporate value. We are also aiming for a consistent increase in the return on invested capital(ROIC) and market capitalization. In the fiscal year that ended in March 2024, the ROIC was 17.2% and market
capitalization was 44.9 billion yen.

5. Important Contracts, etc., in Operations
Not applicable.

6. Research and Development Activities
Total research and development expenses for the current fiscal year amounted to 353,128 thousand yen. Research anddevelopment activities for segments are as follows:
In the DX&SI business, research and development expenses totaled 74,952 thousand yen as a result of research anddevelopment for the creation of new businesses and the development of next-generation products for financial
institutions.
In the package business, research and development expenses totaled 126,339 thousand yen mainly as a result of
upgrades to the performance of BankNeo, an information systems integration package for financial institutions, and thedevelopment of new functions for the GAKUEN series, strategic university management systems.
In the medical big data business, research and development expenses totaled 98,955 thousand yen mainly due toactivities to improve the performance of automated check of health insurance claims and to expand services.
Research and development expenses that do not belong to a specific business totaled 52,880 thousand yen.

- 25 -

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

III. Information about Facilities
1. Capital Expenditures Overview
Capital investment of 525,672 thousand yen was made in the current fiscal year. Details in each segment are as follows:
In the DX&SI business, capital investment of 305,140 thousand yen was made to expand office space and to installequipment and build a system for stabilizing the internal system environment.
In the package business, capital investment of 116,918 thousand yen was made to expand office space and to enhancefacilities and equipment for improving work efficiency.
In the medical big data business, a capital investment of 59,552 thousand yen was made to expand office space and to
install equipment for automated inspection of health insurance claims and for handling the increased volume ofanalytical data processing.
In the global business, a capital investment of 44,060 thousand yen was made to improve work efficiency.
Note: Capital expenditures include investments in intangible assets as well as property, plant and equipment.

- 26 -

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

2. Major Facilities
Major facilities of the Group are as follows:(1) Reporting company
As of March 31, 2024
Book value (Thousand yen)
Office (location)

Segment

Osaka Head Office(Kita-ku, Osaka-shi)

DX&SI business,package business,
medical big data businessOsaka Head Office(Kita-ku, Osaka-shi)

Not part of a specificbusiness

Tokyo Head Office(Minato-ku, Tokyo)

DX&SI business,package business,
medical big data businessTokyo Head Office(Minato-ku, Tokyo)

Not part of a specificbusiness

Description offacilities
Offices anddevelopment
facilities
Offices andofficeequipment
Offices anddevelopment
facilities
Offices andofficeequipment

Buildings
andstructures

Land area(m2)

59,467

Number of
employees

Other

Total

-

124,028

183,495

439

358,978-

112,366

471,34471

57,221-

19,74676,967438

32,371-

3,006

35,37828

Kitashinagawa
Offices andOfficePackage business,development
18,467
6,699
25,16733(Shinagawa-ku,
medical big data businessfacilities
Tokyo)
Kitashinagawa
Offices andOfficeNot part of a specificoffice36,328819
37,147(Shinagawa-ku,
business
equipment
Tokyo)
Training facility and
Employeecompany dormitory
Not part of a specific142,361
welfare37,527457
180,346(Hirakata-shi,business[1,579.92]
facilities
Osaka)
Notes: 1. The Osaka Head Office, Tokyo Head Office, and Kitashinagawa Office are rented offices in buildings. The annual rent
is 586,085 thousand yen.
2. “Other” under book value mainly includes tools, furniture and fixtures such as computers for development andsoftware.

(2) Domestic subsidiaries
As of March 31, 2024
Book value (Thousand yen)
Description of Buildings
Number ofCompany name
Segment
Land area
facilities
employees
and
Other
Total
(m2)
structures
Alpha Computer
Head Office
Offices andDX&SI business,
Co., Ltd.
(Shinagawadevelopment
3,349
1,378
4,728
50
package business(Notes 1, 2)
ku, Tokyo)
facilities
Head office
DX&SI business,
Offices and
NewNeeds Co.,
(Kita-ku,
medical big data
development
423
423
85
Ltd. (Notes 1, 3)
Osaka-shi)businessfacilities
Head office
Offices and
ISR Co., Ltd.
(Chiyoda-ku, DX&SI businessdevelopment
938
5,961
6,899
42
(Notes 1, 4)
Tokyo)
facilities
Head office
Offices andMedical big data
K-SHIP Co., Ltd.
(Toyonakawork
1,362
6,293
7,656
43
businessshi, Osaka)
facilities
Notes: 1. The head office is a rented office in a building.
2. The number of employees includes 2 employees on loan from JAST.
3. The number of employees includes 4 employees on loan from JAST.
4. The number of employees includes 1 employee on loan from JAST.
Office(location)- 27 -

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

(3) Overseas subsidiaries
As of March 31, 2024

Company name
JASTEC(THAILAND)
CO.,LTD.
(Note 1)
GuiLin Anxin
Software Co., Ltd.
(Note 1)
Shanghai Jiafeng
Information
Technology Co.,
Ltd. (Note 1)
JAST Asia PacificCo., Ltd. (Thailand)(Notes 1, 2)
Virtual Calibre
SDN. BHD.
(Note 1)
Virtual Calibre
MSC SDN.BHD.
(Note 1)
Virtual Calibre
Consulting SDN.
BHD. (Notes 1, 2)

Book value (Thousand yen)
Description of Buildings
Land area
facilities
and
Other
Total
(m2)
structures

Office(location)

Segment

Head Office(Thailand)

Global business

Offices anddevelopment
facilities

2,085

-

4,067

6,152

17

Head Office(China)Global business

Offices anddevelopment
facilities

-

-

1,754

1,754

34

Head Office(China)Package business Offices

3,140

-

-

3,140

1

-

32

32

1

-

17,39153,488261-

113,310

147,864

108-

11,341

46,049

158

-

415

5,144

16

-

629

629

9

-

419

419

13

Offices anddevelopment
facilities
Offices andHead Office
Global businessdevelopment
36,097(Malaysia)
facilities
Offices andHead Office
Global businessdevelopment
34,553(Malaysia)
facilities
Offices andHead Office
Global businessdevelopment
34,708(Malaysia)
facilities
Offices and
AG NET PTE.LTD. Head Office
Global businessdevelopment
4,728(Note 1)(Singapore)
facilities
Offices andBright & Better
Head Office
Global businessdevelopment
Co., Ltd. (Note 1)(Thailand)facilities
Virtual Calibre
Offices andHead OfficeConsulting India
Global businessdevelopment(India)Pvt. Ltdfacilities
Notes: 1. The head office is a rented office in a building.
2. The number of employees includes 1 employee on loan from JAST.
Head Office(Thailand)

Global business- 28 -

Number of
employees

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

3. Plans for Capital Investment and Disposals of Facility
The Group formulates capital investment plans based on comprehensive consideration of economic forecasts, industry
trends, investment efficiency, and other factors. In principle, each group company develops its capital expenditure plan
individually, and the reporting company plays a central role in coordinating the plans.
As of March 31, 2024, significant capital investment plans (new construction and renovation) totaled 410 million yen,and the breakdown by segment is as follows:(1) New construction of major facilities
Company
name(Office)

Location

Segment

JAST(TokyoHead
Office)Minato-ku,
Tokyo

DX&SI
business

JAST(TokyoHead
Office)Minato-ku,
Tokyo

Packagebusiness

JAST(TokyoHead
Office)Minato-ku,
Tokyo

Medical big
databusiness

Descriptionof facilities

In-housesystemintegrationand officefacilities
In-housesystemintegrationand officefacilities
Big data
infrastructuredevelopment

Planned investment
Schedule
amountImprovements
Amount Financing
after
Total
already paid method(ThousandCommencement Completion completion(Thousand
yen)
yen)

18,600-Selffinancing

April 2024

March 2025Work
efficiency

2,000

-

Selffinancing

October 2024 March 2025Work
efficiency

40,200-Selffinancing

May 2024

Analysis
March 2025 services
qualityIn-housesystemMinato-ku,
SelfWork
integration
235,022
April 2024 March 2025Tokyofinancingefficiency
and officefacilities
In-house
JAST
Not part of system(OsakaKita-ku,
SelfWorka specificintegration
114,351
April 2024 March 2025
Head
Osaka-shi
financingefficiency
businessand office
Office)facilities
Note: There are no material plans of retirement or sale of major facilities, except those for recurring facility renewal.
JAST(TokyoHead
Office)Not part ofa specificbusiness(2) Major renovation
Not applicable.

- 29 -

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

IV. Information about Reporting Company
1. Shares, etc.
(1) Total number of shares, etc.
(i) Total number of shares
Class

Total number of shares authorized to be issued (Shares)

Common stock

64,000,000

Total

64,000,000

Note: The Board of Directors of JAST approved a resolution on February 29, 2024 for a stock split and partial revision to the Articles
of Incorporation following the split. In association with this stock split, the total number of authorized shares increased by
32,000,000 shares from 32,000,000 shares to 64,000,000 shares on April 1, 2024, the effective date of the stock split.

(ii) Issued shares

Class

Name of stock exchange on
which the company is listed
Number of issued
Number of issued
or name of authorizedshares as of the filingshares as of Marchfinancial instruments firms
date (June 26, 2024)
31, 2024 (Shares)
association with
(Shares)which the company isregistered

Common stock

12,418,460

24,836,920

Prime Market of Tokyo
Stock Exchange

Total

12,418,460

24,836,920-

Description

Standard stock of JAST with norestrictions on rights. The
number of shares per one unit is
100 shares.
-

Note: In accordance with a resolution of the Board of Directors on February 29, 2024, JAST conducted a 2-for-1 stock split on
April 1, 2024. As a result, the number of shares increased by 12,418,460 shares and the total number of shares issued was
24,836,920 shares.

(2) Share acquisition rights(i) Stock option plans
Not applicable.
(ii) Right plans
Not applicable.
(iii) Share acquisition rights for other uses
Not applicable.
(3) Exercises of moving strike convertible bonds, etc.
Not applicable.
(4) Changes in number of issued shares, share capital, and legal capital surplus(Thousand yen, unless otherwise stated)

Date

April 1, 2021 throughMarch 31, 2022 (Note 1)
April 1, 2022 throughMarch 31, 2023 (Note 2)

Increase
Balance of total(decrease) in
number of
total number ofissued sharesissued shares(Shares)(Shares)

Increase(decrease) inshare capital

Balance ofshare capita

Increase(decrease) inlegal capitalsurplus

Balance oflegal capitalsurplus597,000

6,209,230

458,739

1,535,409

458,739

1,497,047

6,209,230

12,418,460-

1,535,409-

1,497,047- 30 -

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

Notes: 1. From June 2, 2021 to September 22, 2021, due to the exercise of share acquisition rights, the total number of issued
shares, share capital, and the legal capital surplus increased by 597,000 shares, 458 million yen and 458 million yen,respectively.
2. JAST conducted a 2-for-1 stock split on October 1, 2022.
3. On February 29, 2024, JAST announced a change in the use of funds from the exercise of share acquisition rights. The
following changes were made to the specific uses and planned times of expenditures that were announced on March 5,2021 in a release concerning the third-party allotment of the second series of warrants with an adjustable exercise priceand the signing of a facility contract with a provision for designating the suspension of the exercise of these warrants.
(i) Reason for the change
Since the procurement of these funds, R&D activities for the contracted development of software and for products
using JAST’s brands have progressed as planned. However, the use of these funds for M&A and capital and businessalliances is expected to require more time than initially planned. Activities have been delayed because the pandemic
forced a long suspension of the provision of information, surveys, meetings, negotiations and other operations requiredfor M&A and alliances. Now that the impact of the pandemic has ended, due in part to the transition of COVID-19 toCategory 5 in May 2023, the volume of M&A and capital and business alliance activities has increased significantly.
For example, JAST established a capital and business alliance in January 2024 with K-SHIP Co., Ltd. To continue anaggressive stance regarding M&A and alliances, JAST has extended the end of the expected period for the use of funds
from the sale of the second series of warrants for M&A and alliances to March 2026.
(ii)) Summary of the change
Before change
Amount(Millions of yen)

Use of funds

Timing of use

R&D for the contracted development of software

210

April 2021 to March 2023

R&D for JAST brand products(GAKUEN, JMICS, BankNeo and others)

550

April 2021 to March 2023

465

April 2021 to March 2024

Expenditures for M&A and capital/business alliances
Total

1,225

After change
Amount(Millions of yen)

Use of funds

Timing of use

R&D for the contracted development of software

210

April 2021 to March 2023

R&D for JAST brand products(GAKUEN, JMICS, BankNeo and others)

550

April 2021 to March 2023

Expenditures for M&A and capital/business alliances

425

April 2021 to March 2026

Total

1,185

4. JAST conducted a 2-for-1 stock split on April 1, 2024. As a result, the total number of shares issued increased by
12,418,460 shares to 24,836,920 shares.

- 31 -

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

(5) Shareholding by shareholder category
As of March 31, 2024
Shareholding status (Number of shares constituting one unit: 100 shares)
Category

Foreign corporations,
Financial
National andetc.
Financial instruments
Other
Individuals
local
institutions business corporations
and others
Nongovernments
Individuals
operators
individuals

Total

Odd-lotshares(Shares)Number of
9
19
22
79
9
2,428
2,566
shareholders
Number ofshares held
12,933
1,475
30,70039,151
31
39,847 124,137
4,760(units)Percentage ofshareholdings
10.41
1.19
24.72
31.53
0.02
32.09
100.00(%)
Note: Out of 5,184 treasury shares, 51 units are included in “Individuals and others,” and 84 shares are included in “Odd-lot shares.”(6) Major shareholders

Name
JUST Corporation
BNYM AS AGT/CLTS NON
TREATY JASDEC(Standing proxy: MUFG Bank, Ltd.)JAST’s Employee Shareholding
Association
Interactive Brokers LLC(Standing proxy: Interactive Brokers
Securities Japan Inc.)
The Master Trust Bank of Japan, Ltd.
(Trust Account)
Custody Bank of Japan, Ltd. (Trust
Account)
Taku Hirabayashi
Takeaki Hirabayashi
The Bank of New York Mellon
140040(Standing proxy: Settlement &Clearing Services Department,
Mizuho Bank, Ltd.)
Custody Bank of Japan, Ltd. (Trust
Account E)
Total

Address
5-601-1, Hamadera Showacho, Nishi-ku,
Sakai-shi, Osaka
240 Greenwich Street, New York, New York
10286 U.S.A.
(2-7-1 Marunouchi, Chiyoda-ku, Tokyo)

As of March 31, 2024
Number of
Shareholding ratio
shares held
(excluding treasury(Shares)shares) (%)
2,900,200

23.36

2,194,700

17.68

2-3-18 Nakanoshima, Kita-ku, Osaka

951,080

7.66

One Pickwick Plaza Greenwich,
Connecticut 06830 USA(3-2-5 Kasumigaseki, Chiyoda-ku, Tokyo)

819,900

6.61

1-8-1 Akasaka, Minato-ku, Tokyo

788,200

6.35

1-8-12 Harumi, Chuo-ku, Tokyo

313,400

2.52

Nishi-ku, Sakai-shi, Osaka

278,640

2.24

Nishi-ku, Sakai-shi, Osaka

194,000

1.56

240 Greenwich Street, New York, NY
10286 U.S.A.
(2-15-1 Konan, Minato-ku, Tokyo)

166,400

1.34

1-8-12 Harumi, Chuo-ku, Tokyo

149,200

1.20

8,755,720

70.54

-

Notes: 1. JAST holds 5,184 treasury shares but is excluded from the above major shareholders. The Company has established a
Board Benefit Trust (BBT), and the 149,200 shares of the JAST’s stock held by Japan Custody Bank, Ltd. (Trust
Account E) are not included in treasury shares above.
2. According to the Change Report that was made available for public inspection on January 12, 2024, the shares of JAST
were held by MIRI Capital Management LLC as of January 4, 2024 with the detail shown below. However, JAST did
not include such information in the table above because it could not confirm the number of shares effectively held by
this company as of March 31, 2024. The detail of the Change Report is as follows:
Number of
Name
Address
share certificates held
Shareholding ratio (%)(thousand shares)
745 Boylston Street, Suite 301,
MIRI Capital Management LLC
3,003
24.18
Boston, MA 02116, USA- 32 -

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

(7) Voting rights(i) Issued shares
As of March 31, 2024
Category

Number of shares(Shares)Number of voting rights(Units)Description

-

-

-

-

-

-

-

-

-

-

-

Shares with no voting rights
Shares with restricted voting rights(treasury shares, etc.)
Shares with restricted voting rights(other)Shares with full voting rights(treasury shares, etc.)

Common stock
5,100

Shares with full voting rights (other)

Common stock
12,408,600

124,086

Common stock

Odd-lot shares

4,760

Total number of issued shares

12,418,460

-

-

-

-

-

Voting rights held by all
124,086
shareholders
Notes: 1. “Shares with full voting rights (other)” of common stock includes 149,200 shares (1,492 voting rights) of JAST held by
the Board Benefit Trust (BBT).
2. “Odd-lot shares” includes 84 treasury shares held by JAST.

(ii) Treasury shares, etc.
As of March 31, 2024
Name of shareholder

Address of shareholder

Number ofshares held in
own name(Shares)

Japan System Techniques
Co., Ltd.

2-3-18 Nakanoshima, Kitaku, Osaka-shi

5,100

-

5,100

0.04

-

5,100

-

5,100

0.04

Total

Number of
Total number of Ratio against
shares held inshares held
total shares
others’ name(Shares)issued (%)(Shares)

Notes: 1. JAST stock held by the BBT (149,200 shares) is included in the number of treasury shares in consolidated and nonconsolidated financial statements.
2. In addition to the above, JAST holds 84 odd-lot shares.

(8) Explanation of the Director and Employee Stock Ownership PlanOn May 23, 2024, the Board of Directors approved a resolution to submit a proposal at the 52nd Annual General
Meeting of Shareholders on June 25, 2024 to establish a Board Benefit Trust-Restricted Stock (BBT-RS) remuneration
plan that distributes restricted stock to eligible individuals during their time at JAST. This resolution was based on theassumption that shareholders would also approve a proposal at this shareholders meeting for the change to theCompany with an Audit & Supervisory Committee corporate governance system. Both proposals were approved at
the shareholders meeting. As a result, the previous remuneration authorization for the prior BBT plan for directors(excluding external directors) has been terminated. The purpose of the BBT-RS plan is to further motivate directors(excluding directors who are members of Audit & Supervisory Committee and external directors, same hereafter
unless stated otherwise) and delegated executive officers (collectively the “Eligible Directors and Officers”) to
contribute to the growth of corporate value.
i. Overview of the BBT-RS planThis is a stock compensation plan in which the Eligible Directors and Officers receive stock compensation throughthe BBT-RS plan. The BBT-RS acquires JAST stock using cash contributions from JAST as the source of funds. The
Eligible Directors and Officers receive JAST stock or a monetary amount equivalent to the market value of the JAST
stock in lieu of stock compensation in accordance with the rules on the stock compensation plan for directors. In- 33 -

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

principle, the Eligible Directors and Officers receive JAST stock once every year at a designated time and receive themonetary amount equivalent to the market value of the JAST stock when they leave JAST. In the BBT-RS plan, points
received by directors under the previous BBT plan are paid to these directors as JAST stock or other means at a time
designated by JAST. When the Eligible Directors and Officers receive JAST stock while they are still at JAST, these
individuals must first sign a stock sale restriction contract with JAST as described in (d) below. In accordance withthis contract, the Eligible Directors and Officers are not allowed to sell or transfer ownership in any other way the
JAST stock they receive while at JAST.
BBT-RS Structure(a) Establishment of the rules on the stock compensation plan for directors(d) Stock sale
restriction contract(e) Granting points

Trustor:
JAST(c) Stockacquisition

Trustee:

Trust
Directions for
non-exercise of
voting rights

Mizuho Trust & Banking Co., Ltd.

administrator

Beneficiaries:(Re-trust: Custody Bank of Japan, Ltd.)JAST stock

officers(g) Granting
stock

Meeting the beneficiary
requirements(f) Non-exercise
of voting rights(b) Entrusting money

Eligible directors andRetired individuals whomeet the beneficiary
requirements(a) JAST will establish the rules on the stock compensation plan for directors within the limits of the compensation
approved in this proposal.
(b) JAST will entrust money in accordance with the approval in this proposal.
(c) The BBT-RS will acquire JAST stock using the money entrusted in (b) as the source of funds, either through thestock exchange or by subscribing to the disposal of treasury shares.
(d) The Eligible Directors and Officers who receive JAST stock while at JAST will sign contracts restricting the sale orother transfer of ownership of this stock until an individual leaves JAST. The contract includes a provision allowing
JAST to acquire the stock with no payment under certain circumstances.
(e) JAST grants points to the Eligible Directors and Officers in accordance with the rules on the stock compensation planfor directors.
(f) The BBT-RS will not exercise voting rights with respect to JAST stock in the trust account in accordance with the
instructions of the trust administrator, which is independent from JAST.
(g) The BBT-RS will grant JAST stock to the Eligible Directors and Officers who meet the requirements for beneficiaries
in the rules on the stock compensation plan for directors at a designated time every year in accordance with the numberof points granted to these beneficiaries. However, if an eligible director or officer meets the requirements in the rules,
a monetary amount equivalent to the market value of the JAST stock will be paid for a certain percentage of the points
when an individual leaves JAST.

ii.

Number of shares acquired by the Trust
The number of shares acquired by the Trust is 298,400. The number of shares to be acquired by the Trust is notdetermined yet.

iii.

Beneficiaries and other individuals entitled to rights under this plan
Directors and delegated executive officers of JAST, excluding directors who are Audit & Supervisory Committee
members and external directors- 34 -

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

2. Acquisition and Disposal of Treasury SharesClass of shares, etc.:
Acquisition of common stock under Article 155, item (vii) of the Companies Act(1) Acquisition by resolution of Annual General Meeting of Shareholders
Not applicable.
(2) Acquisition by resolution of the Board of Directors
Not applicable.
(3) Acquisition not based on resolution at Annual Shareholders meeting or the Board of Directors
Acquisition of common stock pursuant to Article 155, item (vii) of the Companies Act
Category
Number of shares (Shares)

Total amount (Yen)Treasury shares acquired during the fiscal year ended
116
244,290
March 31, 2024 (Note)
Treasury shares acquired during the period for
acquisition
Notes: 1. The period for acquisition begins on the day after the last day of the fiscal year and ends on the day this Annual
Securities Report was submitted.
2. JAST conducted a 2-for-1 stock split on April 1, 2024. The number of shares for the fiscal year ended March 31, 2024
is the number before this stock split and the number for the period for acquisition is the number after this stock split.
3. Treasury shares acquired during the period for acquisition do not include the number of odd-lot shares purchased
between June 1, 2024 and the day this Annual Securities Report was submitted.

(4) Disposal of acquired treasury shares and number of shares held
FY3/24
Category
Acquired treasury shares for which
subscribers were solicited
Acquired treasury shares that were
disposed ofAcquired treasury shares that weretransferred for merger, shareexchange, share issuance andcompany split
Other
Treasury shares held

Period for Acquisition

Total amount ofdisposal(Thousand yen)

Number of shares(Shares)

Total amount ofdisposal(Thousand yen)

Number of shares(Shares)

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

5,184

-

10,368-Notes: 1. The period for acquisition begins on the day after the last day of the fiscal year and ends on the day this Annual
Securities Report was submitted.
2. JAST stock held by the BBT (149,200 shares) is included in the number of treasury shares in consolidated and nonconsolidated financial statements.
3. JAST conducted a 2-for-1 stock split on April 1, 2024. The number of shares for FY3/24 is the number before this stock
split and the number for the period for acquisition is the number after this stock split.

- 35 -

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

3. Dividend Policy
Our basic policy for dividends is to achieve stable growth over the long term like our business performance. We plan
to distribute earnings to shareholders while using as the dividend guidelines a payout ratio of 30% or a dividend on
equity (DOE) ratio of 4%.
We will continue our basic policy of using September 30 and March 31 as the record dates for paying dividends toshareholders of record but leave open the option of paying dividends on other dates as well. Regarding the decisionmaking body for these dividends, the Articles of Incorporation stipulate that dividends may be paid by a resolutionof the Board of Directors.
Taking into consideration earnings in FY3/24, JAST decided to pay a dividend of 45 yen (ordinary dividend of 45yen) on June 11, 2024, based on a resolution by the Board of Directors on April 26, 2024.
The Articles of Incorporation stipulates that JAST may pay interim dividends in accordance with Article 454,
Paragraph 5 of the Companies Act of Japan.
The date of resolution by the Board of Directors, total dividends and dividend per share for the dividends with arecord date belonging to FY3/24 are as follows.
Date of resolution

Total dividends(Thousand yen)

Board of Directors meeting on April 26, 2024

Dividend per share(Yen)
558,597- 36 -

45

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

4. Corporate Governance(1) Overview of corporate governance(i) Fundamental approach to corporate governance
At JAST, our focus is on management ideally suited to the current economic environment while reflecting thefundamental principles of corporate governance. To accomplish this, and in line with a philosophy whichemphasizes what is best for our four key stakeholders—customers, shareholders, employees and society—wepursue win-win relationships with buyers, vendors, and investors, as well as with the public at large. Our goal is
to maximize value for all stakeholders and achieve medium and long-term growth of corporate value with thesustainable growth of the Company. As we take actions to accomplish this goal, our corporate officers will
sincerely consider all essential inputs as they boldly challenge the status quo and continue aiming for a corporatetransformation.
(ii) Overview of our corporate governance structure and reasons for its use
At the Annual General Meeting of Shareholders held on June 25, 2024, shareholders approved changes to the
Articles of Incorporation for changing from the Company with a Board of Auditors to the Company with an Audit& Supervisory Committee corporate governance system. The reason for this change is to further upgrade thisstructure by increasing management transparency and speeding up decision making regarding changes in thebusiness climate.
A. Summary of our corporate governance structure
The major components of the system of internal controls are as follows.
Board of Directors
The Board of Directors consists of 11 members: eight directors (excluding directors who are Audit & Supervisory
Committee members) and three directors who are members of the Audit & Supervisory Committee. There are
five external directors, three directors and two members of the Audit & Supervisory Committee. The Board of
Directors holds regular meetings once every month and meets at other times as needed to enable making
decisions about management quickly.
Audit & Supervisory Committee
This committee, which has three members, meets once every month. Members of this committee attend meetingsof the Board of Directors and other important internal meetings. They state opinions as needed and use othermeasures to oversee the performance of the directors. This committee is chaired by Masami Yabushita. The
members of this committee are shown in section (2) Directors and Audit & Supervisory Committee members.
Nomination and Remuneration Committee
The Nomination and Remuneration Committee is a voluntary unit that provides advice to the Board of Directors.
The purpose is to increase the independence, objectivity and ability to provide explanations for decisions at theBoard of Directors regarding decisions about nomination of director candidates, remuneration of individual
directors and other matters involving directors and to further reinforce the corporate governance structure. The
committee members are three directors, including two independent, external directors, one of whom chairs thecommittee.
Management Meeting
The members of this meeting, which is chaired by the president of JAST, are 10 executive officers and one
director who is a member of the Audit & Supervisory Committee. As a rule, this meeting is held twice every
month. Members discuss management policies and strategies, business plans, and other important matters
involving management and reach decisions. In addition, committee members monitor all types of risk anddetermine countermeasures and take other actions for the efficiency of managing business operations.

- 37 -

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

B. Reasons for using this structure
The JAST corporate governance structure is shown in the following diagram.

We use this corporate governance structure for the purpose of strengthening the management oversight function
as businesses are operated in accordance with decisions of the Board of Directors. In this structure, members of
the Audit & Supervisory Committee perform the role of overseeing the performance of the directors and attend
meetings of the Board of Directors and other important internal meetings to ensure the legality and suitability of
all activities involving management and how businesses are operated. From this perspective of corporate
governance, we have adopted the current structure.
(iii) Other matters concerning corporate governance
A. Status of the internal control system
JAST has been working in a timely manner to maintain an internal control system mainly by establishing internal
regulations, structuring organizations so that mutual checks and balances function effectively, and evaluating
and improving the internal control system through internal audits. In accounting audits, the status of internal
controls and their operation are reviewed as part of ordinary audit procedures. JAST aims to be fully compliant
with the systems involving internal control evaluations and audits. These initiatives include documentation ofrelated business processes, inspections of the status of controls, and evaluations through verifications using
internal audits. The Board of Directors reviews the internal control system from time to time by evaluating its
operational status and discussing the policy for the maintenance of this system.
B. Risk management system
In the event of an emergency, in accordance with our risk management rules, we will promptly perform a seriesof procedures for fact-checking, investigations, the establishment of a task force, and recovery from theemergency. In addition, the Board of Directors and the Management Meeting discuss risks to JAST and the- 38 -

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

Group to take necessary actions.
C. Status of the system to ensure the suitability of business operations at subsidiaries
JAST has established a system to provide guidance and support to subsidiaries, while respecting the autonomyof their management. Subsidiaries regularly submit business and financial reports to JAST’s Management
Meeting and other units to enable JAST to monitor the management of individual companies. JAST’s internal
audit department also conducts audits of subsidiaries.
D. Overview of the liability limitation agreement
JAST’s Articles of Incorporation stipulate that, pursuant to the provisions of Article 426, Paragraph 1 of theCompanies Act, JAST may, by resolution of the Board of Directors, exempt Directors (including former
directors) from liability for damages to the extent legally allowed. This is to ensure that Directors can fully
perform the expected roles in conducting their duties.
Pursuant to the provisions of Article 427, Paragraph 1 of the Companies Act, JAST has concluded an agreementwith directors (excluding directors who are JAST executives) to limit their liability to compensate for damages
due to a failure to perform their duties; provided, however, that the limit of liability under this agreement is theamount prescribed by laws and regulations.
E. Overview of the directors and officers liability insurance contract
JAST has concluded a directors and officers liability insurance contract with AIG General Insurance Company,
Ltd., as stipulated in Article 430-3, Paragraph 1 of the Companies Act. The insured parties of the insurance
contract are directors (including two external directors who are Audit & Supervisory Committee members),
executive officers and employees in management positions at JAST and its subsidiaries. This insurance contract
covers damages that may occur when an insured individual assumes liability for the performance of his or her
duties or receives a claim related to the pursuit of this liability. The insurance premiums are fully paid by JAST.
There are some exemptions from this insurance coverage to prevent the performance of duties by an insured
individual from no longer being suitable. For example, liability insurance does not cover damages resulting frombehavior of an insured individual that violates a law or regulation.
JAST plans to extend the insurance contract with the same terms at the next renewal.
F. Maximum number of Directors
The JAST Articles of Incorporation stipulate that the number of directors (excluding directors who are Audit&Supervisory Committee members) is no more than 10 and the number of directors who are Audit & Supervisory
Committee members is no more than 5.
G. Resolution requirements for election and dismissal of Directors
The JAST Articles of Incorporation stipulate that resolutions for the election of directors must be approved by amajority of the voting rights held by shareholders present at the meeting who account for not less than one-thirdof the voting rights of all shareholders entitled to vote. Furthermore, resolutions for the dismissal of directors
must be approved by two-thirds or more of the voting rights held by shareholders present at the meeting who
represent a majority of the voting rights of all shareholders entitled to vote.
H. Authority for making decisions on dividends of surplus, etc.
The JAST Articles of Incorporation stipulate that the matters stipulated in all items of Article 459, Paragraph 1of the Companies Act, such as dividends of surplus, are determined by a resolution of the Board of Directors,
unless otherwise provided by laws and regulations. The purpose of this provision is to return profits toshareholders in a flexible manner by giving the Board of Directors the authority to distribute dividends of surplus,
etc.
I. Requirements for special resolutions at General Meetings of Shareholders- 39 -

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

The JAST Articles of Incorporation stipulate that the special resolutions at General Meetings of Shareholders
provided in Article 309, Paragraph 2 of the Companies Act must be approved by two-thirds or more of the voting
rights held by shareholders present at the meeting who represent not less than one-third of the voting rights ofall shareholders entitled to vote. The purpose of this provision is to facilitate the efficient operation of General
Meetings of Shareholders by reducing the quorum for special resolutions at General Meetings of Shareholders.
(iv) Activities of the Board of Directors
JAST held 14 meetings of the Board of Directors during the fiscal year that ended in March 2024. The attendanceof individual Directors and Audit & Supervisory Board members is as follows.
Position

Name

Number ofmeetings held

AttendancePresident

Takeaki Hirabayashi

14

14

Senior Executive Director

Hiroaki Ban

14

14

Executive Director

Noriaki Okado

14

14

Director

Yuji Tsuchiya

14

14

Director

Chiharu Muguruma

14

14

Director (Note 1)

Katsuro Sonoda

14

14

Director

Taku Hirabayashi

1212External Director

Yutaka Hosoe

14

13

External Director

Mitsugi Hanai

14

14

External Director

Toshiyuki Akiba

14

14

Full-time Audit & Supervisory
Masami Yabushita
12
12
Board member
External Audit & Supervisory
Shigeki Taenaka
14
14
Board member
External Audit & Supervisory
Jiro Mogami
14
14
Board member
Note 1: Mr. Sonoda attended the meetings of the Board of Directors two times as a full-time Audit & Supervisory Board
member.

The Board of Directors mainly discusses the following matters.
- Management policies and annual and medium-term management plans of the Group- Next-generation management structure and management succession- Development of the next generation of leaders- Selection of the Representative Director- Revisions to organizational structure- Organizational structure policy- Remuneration system and treatment of directors (and other officers)- Shareholder return (dividend) policy- M&A strategies- Financial strategies- Annual budget in financial accounting and earnings forecast disclosed- Appropriation of surplus- Corporate governance- Evaluation of cross-shareholdings- Establishment of and investment in group companies and capital increase to group companies- Operation of General Meetings of Shareholders- Establishment of important rules and regulations- 40 -

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024(v) Activities of the Nomination and Remuneration Committee
JAST established a Nomination and Remuneration Committee (hereinafter, the “Committee”) on August 22, 2022.
JAST held five meetings of the Committee. The attendance of individual members is as follows.

External Director

Yutaka Hosoe

Number ofmeetings held
5

External Director
External Audit & Supervisory
Board member
External Audit & Supervisory
Board member

Toshiyuki Akiba

5

5

Shigeki Taenaka

55

Jiro Mogami

55Position

Name

Attendance
5

The Committee deliberates mainly on the following matters, in response to inquiries from Directors, and makes
recommendations to the Board of Directors.
- Matters on the election and dismissal of the Representative Director- Matters on the election and dismissal of Directors- Matters on remuneration for Directors (including the maximum amount of remuneration for Directors)- Other material management matters deemed necessary by the Board of Directors(vi) Basic policy on the control over the company
JAST believes that people who make decisions on the JAST’s business and financial policies should be able tomaintain relationships with various stakeholders including shareholders and client companies, as well as to secureand enhance the JAST’s corporate value and the common interests of shareholders over the medium to long term.
On the other hand, as a company whose shares are listed on a financial instruments exchange, we respect free
trading of our shares in the market and will not generally reject large-scale purchases of our shares by specificparties, as long as such purchases contribute to securing and enhancing our corporate value and the common
interests of our shareholders. We also deem that the decision as to whether or not to accept a proposal for a largescale purchase of our shares should ultimately be left to the judgment of our shareholders.
Nevertheless, among proposals for large-scale share acquisitions, there may be those that undermine our corporate
value and the common interests of our shareholders mainly due to a possibility that we may not be able to maintain
good relationships with our stakeholders; those that do not give our shareholders and the Board of Directors thetime and information reasonably necessary for them to consider the details of the proposal and for the Board of
Directors to present an alternative proposal, and those that do not fully reflect the JAST’s corporate value. For sucha proposal, JAST’s Board of Directors believes that it is necessary to protect the corporate value of the Group andthe common interests of shareholders by securing the necessary time and information for its shareholders andnegotiating with the proposer of a large-scale acquisition of JAST’s shares, as the responsibility of those who are
entrusted by shareholders.

- 41 -

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

(2) Directors and Audit & Supervisory Committee membersi.

Directors

11 males, 1 female (Pct. of female officers: 9%)
Official Title

Name

President

Takeaki
Hirabayashi

Director

Hiroaki Ban

Date of Birth

Brief Career History

Number ofTerm of the Company
Office Shares Held(Thousands)

March 1973

Established the Company,
Representative Director
April 23, 1938
Note 4
April 2005
President and CEO
June 2020
President (current)
January 1981 Joined the Company
October 2006 Managing Executive Officer, Alpha
Computer Co., Ltd. (secondment)
June 2010
Director and Managing Executive
Officer, Alpha Computer Co., Ltd.
(secondment)
Officer in Charge of Tokyo Software;
April 2011
and General Manager, Eastern Japan
Software Division, the Company
Director in Charge of Tokyo
June 2012
Software; and General Manager,
Eastern Japan Software Division, theCompany
April 2013
Director in Charge of Tokyo Region,
the Company
Director in Charge of Eastern Japan
April 2014
Region, Medical Big Data Business,and Special Projects, the Company
January 13,
Note 4
Executive Director in Charge ofJune 20191961
Eastern Japan Region, Medical Big
Data Business, and Tokyo New
Business Promotion, the Company
Senior Executive Director in Charge
June 2021
of Eastern Japan Region, Medical Big
Data Business, Tokyo New Business
Promotion, and Global Business, theCompany
Senior Executive Director in Charge
April 2023
of Medical Big Data Business, Tokyo
New Business Promotion, Global
Business, and Tokyo Management
Office, the Company
April 2024
Vice President in Charge of Medical
Big Data Business, Tokyo New
Business Promotion, Global Business,and Staff Departments, the Company(current)- 42 -

388.0084.00

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

Official Title

Name

Date of Birth

Brief Career History

Number oftheTerm ofCompany
OfficeShares Held(Thousands)

March 1983
April 2012

Director

Yuji TsuchiyaJune 8, 1962

Director

Chiharu
Muguruma

October 22,
1964

Joined the Company
Officer; and General Manager,
GAKUEN Division, the Company
Officer in Charge of GAKUEN
April 2014
Business, the Company
Director in Charge of GAKUEN
June 2016
Business, the Company
Director in Charge of GAKUEN
April 2017
Business and New Business
Promotion, the Company
April 2019
Director in Charge of GAKUEN
Business, New Business Promotion,
and BankNeo Business, the Company
Director in Charge of GAKUEN
April 2021
Business, New Business Promotion,
BankNeo Business, and Western
Note 4
Japan System Integration Business,
the Company
June 2021
Director in Charge of Western Japan
Region, GAKUEN Business, New
Business Promotion, and BankNeo
Business, the Company
April 2022
Director in Charge of GAKUEN
Business, New Business Promotion,
BankNeo Business, and WesternJapan System Integration Business,
the Company
April 2024
Director and Executive Officer in
Charge of GAKUEN Business, New
Business Promotion, BankNeo
Business, and Western Japan System
Integration Business, the Company(current)
April 1988
Joined the Company
Officer; and General Manager,
April 2014
Eastern Japan Software Business
Department, the Company
April 2018
Officer in Charge of Eastern Japan
System Integration Business, theCompany
June 2019
Director in Charge of Eastern Japan
System Integration Business, theCompany
January 2020 Director in Charge of Eastern Japan
System Integration Business; and Vice
General Manager, Overseas Business
Division, the Company
Note 4January 2021 Director in Charge of Eastern Japan
System Integration Business; andGeneral Manager, ASEAN Business
Division, the Company
Director in Charge of Eastern Japan
April 2023
System Integration Business; Digital
Transformation Promotion; andGeneral Manager, ASEAN Business
Division, the Company
Director and Executive Officer in
April 2024
charge of Corporate Department,
General Manager, Management
Planning Department, the Company(current)- 43 -

71.40

36.60

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

Official Title

Name

Date of Birth

Brief Career History

Number ofTerm of the Company
Office Shares Held(Thousands)

April 1998
April 2017

Director

Director

Director

Director

Joined the Company
General Manager, Finance andAccounting Department, theCompany
April 2021
General Manager, Tokyo
Administrative Department, Tokyo
Administration Division, theCompany
April 2023
Officer in Charge of Management
Planning & Business Administration; Note 4
Taku Hirabayashi June 7, 1969
and General Manager, Management
Planning Department, the Company
June 2023
Director in Charge of Management
Planning & Business Administration;
and General Manager, Management
Planning Department, the Company
April 2024
Director and Senior Officer in chargeof Finance & IR, the Company(current)
April 1983
Joined Toyota Industries Corporation
Director/Consultant, Admix Partners
June 2004
YK (current)
January 2006 Executive Vice-President, BNI
Systems Corp.
August 16,
April 2007
President, BNI Systems Corp.
Yutaka Hosoe
Note 4
1959
Executive Vice-President, NTT Data
July 2011
China Outsourcing Co., Ltd.
Chief Executive Officer, Innovative
July 2014
Solutions Inc. (current)
June 2017
External Director, the Company(current)
Joined Canon Sales Co., Inc. (nowApril 1980
Canon Marketing Japan Inc.)
March 2004 President, Canon Supercomputing S.I.
Inc.; and President, Canon Solutions
Service Inc., a subsidiary of Canon
Supercomputing S.I. Inc. (serving
concurrently)
Toshiyuki Akiba June 18, 1956 January 2012 Director (part-time), Canon
Note 4
BizAttenda Inc. Director (part-time),
Qualysite Technologies Inc.
July 2013
Director, Ftime Corporation
June 2015
Managing Director, Ftime
Corporation
June 2021
External Director, the Company(current)
August 1998 Participated in establishment of BNIS
Co., Ltd., Director and Vice President
December Vice Chairman and General Manager,
Wuxi Huaxia Computer Technology Co.,
2002
Ltd.
April 2011 Vice Chairman and General Manager,
Wuxi NTT DATA Co., Ltd.
November 14, January 2013 Chairman, Wuxi NTT DATA Co., Ltd.
Gao YongdongNote 4
1964
January 2015 President, NTT DATA (China)
Information Technology Co., Ltd.
June 2017 Chairman and President, NTT DATA
(China) Information Technology Co.,
Ltd. (current)
June 2024
External Director, the Company(current)- 44 -

557.28---

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

Official Title

Name

Date of Birth

Brief Career History

Joined the Company
General Manager, Logistics Business
Division, the Company
April 2015
General Manager, Eastern Japan
System Integration Business Division
Masami Yabushita June 3, 1965
2, the Company
Full-time Audit & Supervisory Board
June 2023
member, the Company
Director, Full-time Audit &June 2024
Supervisory Committee member, theCompany (current)
NovemberJoined LEGAL PROFESSIONALCORPORATION HONRYU
2007
February
Joined Yamashita Kawazoe Law
Office2011
Joined the Kanon Law Office
July 2013
Jiro Mogami August 2, 1978
(current)
External Audit & Supervisory Board
June 2014
member, the Company
June 2024
External Director, Audit &Supervisory Committee member, theCompany (current)
October 2003 Joined Tohmatsu & Co. (now Deloitte
Touche Tohmatsu LLC)
June 2007
Established Machida Accounting
Office (current)
October 11,
November
External Director, ING Co., Ltd.
Misa Machida
1978
2019
(current)
June 2024
External Director, Audit &Supervisory Committee member, theCompany (current)

Number oftheTerm ofCompany
OfficeShares Held(Thousands)

April 1989
April 2014

Director

Director

Director

Total

Note 5

7.60

Note 5-Note 5-

1,144.88

Notes: 1. The Company has introduced the executive officer system to separate the management decision-making andsupervisory functions from the execution of operations.
2. Mr. Yutaka Hosoe, Mr. Toshiyuki Akiba, and Mr. Gao Yongdong are external directors.
3. Mr. Jiro Mogami and Ms. Misa Machida are external directors who are Audit & Supervisory Committee members.
4. The term of office will be one year from the conclusion of the Annual General Meeting of Shareholders held on June25, 2024.
5. The term of office will be two years from the conclusion of the Annual General Meeting of Shareholders held on June25, 2024.

- 45 -

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024/(ii) External directors (and other officers)
JAST has three external directors and two external directors who are Audit & Supervisory Committee members.
Mr. Yutaka Hosoe, External Director, is the Director and Consultant of Admix Partners YK, and the Chief Executive
Officer of Innovative Solutions Inc., and has abundant experience and a broad range of knowledge in the leadingedge IT consulting business and business model reconstruction, including global business. He has made usefulstatements on matters such as the realization of the Group’s growth strategies, evaluation and review of theexecution of strategies, and approaches to risks.
Mr. Toshiyuki Akiba, External Director, has a large network of contacts including IT vendors, abundant experience,
and a broad range of knowledge in the information and communication industry, as he held multiple important
positions including Representative Director at other companies. He has provided useful comments and advice onmatters such as the improvement of the Group’s presence in the market and stock market, as well as businesssuccession to the next generation.
Mr. Gao Yongdong has accumulated abundant experience in the IT industry, including important positions at amajor Japanese SI group company, and JAST expects him to point out and make proposals on issues related to theoverall management of JAST based on his global insight; therefore, JAST has nominated him.
Mr. Jiro Mogami, External Director who is an Audit & Supervisory Committee member, is an attorney at law ofKanon Law Office. From his professional perspective as an attorney at law, he has provided advice andrecommendations on corporate governance and internal control to ensure the validity and appropriateness of thedecision-making of the Board of Directors.
Ms. Misa Machida, External Director who is an Audit & Supervisory Committee member, is a representative ofMachida Accounting Office and External Director of ING Co., Ltd. JAST has nominated her because JAST expects
that she will be able to utilize her knowledge related to accounting and tax affairs in general from the expert
viewpoint as a certified public accountant and certified public tax accountant in the auditing system of JAST.
There are no personal, business, or other interests between JAST and External Directors, and the entities where
they hold concurrent positions.
In appointing External Directors, JAST refers to the criteria for determining the independence of independent
officers stipulated by the Tokyo Stock Exchange and other relevant standards. The JAST’s basic policy is to selectcandidates who can contribute to the sustainable growth of JAST and the enhancement of its corporate value overthe medium to long term, in accordance with the independence criteria stipulated in the “Practical Considerations
in Electing Independent Officer” established by the Tokyo Stock Exchange.
(iii) Mutual coordination among supervision or audits by External Directors and internal audits, audits by the Audit& Supervisory Committee members, and accounting audits, as well as their relationship with internal control
departments
External Directors exchange opinions at meetings of the Audit & Supervisory Committee upon receiving
information shared by the full-time Directors who are Audit & Supervisory Committee members that is not broughtup for discussion at the Board of Directors meetings. They supervise or audit Directors and the Board of Directors
by asking questions and making statements based on their respective areas of expertise and knowledge at the Boardof Directors meetings.
To enhance JAST’s audit systems including internal audits, audits by the Audit & Supervisory Committee members,
and accounting audits, the Audit & Supervisory Committee, the Accounting Auditor, and Internal Audit Department
share information on their audit plans and the status of audits, and exchange opinions on matters including audit
findings as necessary during each fiscal year. The Internal Audit Department, as the secretariat for the internal
control evaluation and reporting, oversees the evaluation of internal control departments and reports its status andresults to the Management Meeting.
(3) Audits(i) Audits by the Audit & Supervisory Committee
The corporate governance structure changed from the Company with a Board of Audit & Supervisory Board
members to the Company with an Audit & Supervisory Committee system in accordance with a proposal approvedat the Annual General Meeting of Shareholders on June 25, 2024.

- 46 -

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

The Audit & Supervisory Committee has three members: one director who is a full-time committee member andtwo external directors.
Based on auditing policies and plans determined by the Audit & Supervisory Committee, members of thiscommittee attend meetings of the Board of Directors and other important internal meetings, examine minutes ofmeetings, contracts, accounting records and other documents, interview people, and receive reports on the resultsof internal audits performed by internal auditors. In addition, committee members exchange opinions with theaccounting auditor as needed to maintain a sound relationship and working closely with this auditor. Committee
members also work closely with the corporate auditors of consolidated subsidiaries for the purpose of increasing
the effectiveness of audits throughout the Group.
(Activities during the fiscal year ended March 2024)
Before the change to the Company with an Audit & Supervisory Committee corporate governance system, theAudit & Supervisory Board of JAST consists of three members: one full-time Audit & Supervisory Board member
and two External Audit & Supervisory Board members. Audits by the Audit & Supervisory Board members are
conducted in accordance with the Rules of the Audit & Supervisory Board and plans of audits by the Audit &Supervisory Board members, as well as in response to changes in the circumstances surrounding JAST.
Mr. Shigeki Taenaka, an External Audit & Supervisory Board member, is a certified public accountant and certified
public tax accountant, and Mr. Jiro Mogami, an External Audit & Supervisory Board member, is an attorney at law.
They have considerable experience and knowledge in areas including corporate finance and internal controls, anduse their professional expertise to perform audits by the Audit & Supervisory Board members.
Mr. Masami Yabushita, a full-time Audit & Supervisory Board member, participates in important meetings such as
the Management Meeting and asks questions to directors and employees to determine the status of the entire Group,
shares information with External Audit & Supervisory Board members as needed, and exchanges opinions with all
Audit & Supervisory Board members at monthly meetings of the Audit & Supervisory Board. The status of audits
by the Audit & Supervisory Board members is regularly reported to the Board of Directors and recommendations
are made as necessary.
The Audit & Supervisory Board held 12 meetings during the fiscal year that ended in March 2024, all of whichwere attended by all Audit & Supervisory Board members. These members review the overall performance of theBoard of Directors through questions and confirmations at meetings of the Board of Directors, based on theinformation shared and opinions exchanged at the Audit & Supervisory Board meetings.
JAST aims to enhance its audit systems including internal audits, audits by the Audit & Supervisory Board
members, and accounting audits. To accomplish this goal, at the beginning of every fiscal year, the Accounting
Auditor, the Internal Audit Department, and the Audit & Supervisory Board explain their respective audit plans
and exchange opinions under the leadership of the Audit & Supervisory Board. The Audit & Supervisory Board
receives reports on the status of reviews and audits from the Accounting Auditor during the period and exchanges
opinions. During the current fiscal year, opinions were exchanged on risks and internal controls of the Group, otherstatements in the business report, and key audit matters (KAM).
The full-time Audit & Supervisory Board member receives regular reports from the Internal Audit Department on
the status of audits and exchanges opinions, and reports the status of internal audits and results to the Audit &Supervisory Board.
In addition, External Directors attend meetings of the Audit & Supervisory Board as necessary when the full-time
Audit & Supervisory Board member reports so that the information that is not brought up for discussion at theBoard of Directors meetings is shared with External Directors.
(ii) Internal audits
Internal audits of JAST are conducted by the Internal Audit Department (consisting of four full-time employees),
which reports directly to the President. For internal audits, the Internal Audit Department conducts operational
audits by selecting departments to be audited based on the Internal Audit Rules and audit plans, and also conducts
audits on important themes. The results of these audits are reported to the President and the Management Meeting
to be discussed as management issues.

- 47 -

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

For the current fiscal year, audits were conducted from the perspective of organizational management and humanresource development in each department in addition to operational audits. The Internal Audit Department
conducted audits of subsidiaries by using on-site visits or web-based examinations to check the status of internal
controls for the entire Group.
The Internal Audit Department, as the secretariat for the internal control evaluation and reporting, summarizedevaluations of all internal control departments and shared the results with the auditing firm, confirming that there
were no significant problems with the internal controls of JAST and its key subsidiaries with respect to theevaluation of internal controls for the current fiscal year.
The status and results of operational audits and internal control evaluations conducted by the Internal Audit
Department are reported to the full-time Directors who are Audit & Supervisory Committee members as
appropriate. Following confirmation by the full-time Directors who are Audit & Supervisory Committee members
and approval by the Representative Director, the status and results are reported to the audited departments. The
status and results are also reported at the Management Meeting.

(iii) Accounting audits
A. Name of the auditing firm
Deloitte Touche Tohmatsu LLC
B. Continuous audit period
Since 2000
C. Certified public accountants who executed the audit duties
Designated Limited Liability Partner, Engagement Partner, Certified Public Accountant: Ikutoshi Senzaki
Designated Limited Liability Partner, Engagement Partner, Certified Public Accountant: Hideya Sudo
D. Other personnel engaged in assisting the accounting audit
Nine certified public accountants and other 20 individuals provide assistance for the accounting audit of JAST.
E. Policy and reasons for selecting the auditing firm
When selecting an Accounting Auditor, JAST chooses an appropriate auditing firm after it obtains written
information on matters including audit implementation systems and estimated audit fees, and holds interviews
with the firm.
JAST appointed Deloitte Touche Tohmatsu LLC as its Accounting Auditor because it has a wealth of audit
experience and an examination system that is in line with JAST’s diversified and global business, in addition to
the fact that the audit period and audit fees are reasonable and appropriate.
F. Evaluation of the auditing firm by the Audit & Supervisory Board members and the Audit & Supervisory Board
Before the change to the Company with an Audit & Supervisory Committee corporate governance system, theAudit & Supervisory Board members and the Audit & Supervisory Board evaluated the auditing firm. Throughthis evaluation, they concluded that Deloitte Touche Tohmatsu LLC is capable of performing suitable audits
because no events have occurred that would impair the eligibility or independence of the Accounting Auditor.

- 48 -

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024(iv) Information about audit fees, etc.
A. Fees paid to auditing certified public accountants, etc.
(Million yen)
FY3/23
Classification
Reporting company

Fees for audit
certification services
43

FY3/24
Fees for non-audit
services-

Fees for audit
certification services
44

Fees for non-audit
services-

Consolidated subsidiaries

-

-

-

-

Total

43

-

44

-

Note: Fees for audit certification services in FY3/23 include an additional payment of 2 million yen.

B. Fees paid to entities in the same network (the Deloitte group) as the auditing certified public accountants, etc.
(excluding A.)(Fiscal years ended March 31, 2023 and 2024)
There are no matters to be noted.
C. Other important details of fees for audit certification services(Fiscal years ended March 31, 2023 and 2024)
There are no matters to be noted.
D. Policy for determining audit fees
Fees to be paid to auditing certified public accountants, etc. are determined, with reference to the actual numberof auditing personnel and the number of working days in the previous fiscal year and with consideration of thecharacteristics of the work in the relevant fiscal year, through the approval procedures stipulated in the internal
rules after obtaining the consent of the Audit & Supervisory Board. For the fiscal year that ended in March 2024,
which was prior to the change to the Company with an Audit & Supervisory Committee corporate governancesystem, the consent of the Audit & Supervisory Board was obtained.
E. Reasons for the Audit & Supervisory Board’s consent to the fees, etc., of the Accounting Auditor
Before the change to the Company with an Audit & Supervisory Committee corporate governance system, theAudit & Supervisory Board reviewed the fees, etc. to be paid to the Accounting Auditor presented by the Boardof Directors by taking into account matters including the audit plan, the number of audit days, and the size andcharacteristics of JAST and verifying the validity of them. As a result, the Audit & Supervisory Board determinedthat it was appropriate to give its consent under Article 399, Paragraph 1 of the Companies Act.
(4) Remuneration, etc. for directors (and other officers)(i) Policy for determining amount or calculation method of remuneration, etc. for directors (and other officers)
JAST has a policy for determining the amount and calculation method of remuneration, etc. for directors (and otherofficers). JAST has adopted a performance-based remuneration system. Remuneration, etc. is determined based on
the evaluation of individual directors (and other officers) by the President, in accordance with a remuneration tablebased on position and performance evaluation rank of directors (and other officers), which was designed to avoid
excessive discrepancies with the level of employee wages.
The proposal for remuneration, etc. for JAST’s directors (and other officers) was approved at the General Meetingof Shareholders on June 20, 2008. At the meeting, shareholders approved total annual remuneration for Directorsof up to 300,000 thousand yen (excluding the portion of employee salaries for Directors concurrently serving as
employees) and total annual remuneration for Audit & Supervisory Board members of up to 60,000 thousand yen.
The person who has the authority to establish the policy for determining the amount and calculation method of
remuneration, etc., for JAST’ Directors is the Representative Director delegated by the Board of Directors, whodetermines the amount of individual remuneration within the total amount of remuneration approved at the General
Meeting of Shareholders. Remuneration, etc. for Audit & Supervisory Board members is determined through- 49 -

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

discussions by the Audit & Supervisory Board members within the total amount of remuneration approved at theGeneral Meeting of Shareholders.
Remuneration for JAST’s directors (and other officers) consists of performance-linked remuneration and nonperformance-linked remuneration. The payment ratio of remuneration is determined as stipulated by JAST’sremuneration rules for directors (and other officers) and rules on the stock compensation plan for directors (andother officers), with comprehensive consideration of the relevant director or other officer’s contribution to JAST,
social status, and the value of the JAST’s shares.
JAST established the Board Benefit Trust (BBT), a stock compensation plan, as performance-linked remuneration
at the 46th Annual General Meeting of Shareholders held on June 26, 2018. JAST uses its stock price as the index
for performance-linked remuneration so that Directors can share with shareholders both the benefits of an increasein the stock price and the risks of a decline in the stock price. Furthermore, in accordance with the Act Partially
Amending the Companies Act (Act No. 70 of 2019) that became effective on March 1, 2021, JAST determined theupper limit of the number of points per fiscal year to be granted to Directors (50,000 points) at the 49th Annual
General Meeting of Shareholders held on June 25, 2021. This was determined with comprehensive considerationof aspects including the current level of compensation paid to directors (and other officers) and the trend of andfuture prospects of changes in the number of Directors, and is judged to be appropriate.
A summary of JAST’s method of determining performance-linked remuneration is as follows.
1) Granting of points
For each fiscal year, Directors (excluding External Directors; the same applies hereafter) are granted thenumber of points determined in accordance with the rules on the stock compensation plan for directors (andother officers) as remuneration for the performance of their duties.
2) Distribution of JAST’s shares, etc.
When a Director retires and satisfies the requirements for beneficiaries stipulated in the rules on the stockcompensation plan for directors (and other officers), all points granted to the Director are converted into
common stock of JAST (one share of the common stock for one point) in principle, and the common stock is
distributed to the Director at the time of his/her retirement.
Targets and results for performance goal indicators for the current fiscal year are as follows.
1) Indicator targets
No target was set because the stock price was used as the indicator.
2) Indicator results
1,395 yen (average closing price of JAST stock on the last day of each month from July 2023 to March 2024)
At the 52nd Annual General Meeting of Shareholders held on June 25, 2024, shareholders approved the proposal
to change to the Company with an Audit & Supervisory Committee corporate governance system and the proposals
for annual remuneration, etc. of up to 300,000 thousand yen for directors (excluding directors who are Audit &Supervisory Committee members) and annual remuneration, etc. of up to 60,000 thousand yen for directors who
are members of this committee.
On May 23, 2024, the Board of Directors approved a resolution to submit a proposal at the 52nd Annual General
Meeting of Shareholders on June 25, 2024 to establish a Board Benefit Trust-Restricted Stock (BBT-RS)
remuneration plan that distributes restricted stock to eligible individuals during their time at JAST. This resolution
was based on the assumption that shareholders would also approve a proposal at this shareholders meeting for thechange to the Company with an Audit & Supervisory Committee corporate governance system. Both proposals
were approved at the shareholders meeting. As a result, the previous remuneration authorization for the prior BBT
plan for directors (excluding external directors) has been terminated. The purpose of the BBT-RS plan is to further
motivate directors (excluding directors who are members of Audit & Supervisory Committee and external
directors) and delegated executive officers to contribute to the growth of corporate value. This information is as
described in “1. Shares, etc. (8) Explanation of the Director and Employee Stock Ownership Plan.”- 50 -

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024(ii) Total amount of remuneration, etc. for officer categories, total amount of remuneration, etc. for remuneration
categories, and the number of recipients

Officer category

Total amount of
remuneration,
etc.
(Thousand yen)

Total amount of remuneration, etc. for remuneration categories(Thousand yen)
Number of
Performance- Of items left, nonrecipients
Fixed
Bonus
linkedmonetary
remuneration
remuneration remuneration, etc.

Directors (excluding
223,304
177,401
31,672
14,230
14,2307
External Directors)
Audit & Supervisory
Board members(excluding External
20,76917,0693,700
2Audit & Supervisory
Board members)
External directors (and17,485
14,8742,611
5
other officers)
Notes: 1. On June 25, 2024, JAST changed from the Company with an Audit & Supervisory Board to the Company with an Audit& Supervisory Committee corporate governance system. The total amount of remuneration, etc. for officer categories,
total amount of remuneration, etc. for remuneration categories, and the number of recipients are for the fiscal year that
ended in March 2024, which is before the change to the Company with an Audit & Supervisory Committee corporate
governance system.
2. All non-monetary remuneration, etc. is performance-linked remuneration and is stock-based remuneration under the
Board Benefit Trust (BBT).

(iii) Total amount of remuneration, etc. of individuals whose total amount of remuneration, etc. is 100 million yen or
more
Not applicable.
(iv) Significant employee salaries of directors (and other officers) concurrently serving as employees
Not applicable.
(5) Stocks held(i) Criteria for and approach to investment stocks
JAST classifies stocks as investment stocks held for pure investment if they are held for the purpose of making
profit from changes in the value of stocks or dividends on stocks, and other stocks as investment stocks held for
purposes other than pure investment.
(ii) Investment stocks held for purposes other than pure investment
A. Holding policy, method for verifying holding rationale, and verification details of suitability of individual stock
holdings by the Board of Director and others
JAST holds stocks of companies that are expected to maintain and expand JAST’s products and services, andthat JAST deems necessary and important for the smooth promotion of its business. The Board of Directors
verifies the rationale for acquiring and holding such stocks through regular examination and verification ofmatters including the appropriateness of the purpose of holding and whether the benefits and risks associatedwith holding such stocks are commensurate with the cost of capital.
B. Number of stocks and carrying amount on the balance sheet
Number of stocks(Issues)

Total carrying amount(Thousand yen)

Unlisted stocks

1

464

Stocks other than unlisted stocks

1

42,746(Stocks with increased number of shares in the current fiscal year)
Not applicable.

- 51 -

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

(Stocks with decreased number of shares in the current fiscal year)
Not applicable.
C. Number of specified investment shares and deemed stockholdings per issue and the carrying amount on thebalance sheet
Specified investment shares

Issue

FY3/24
Number of shares(Shares)
Carrying amount on
the balance sheet(Thousand yen)
29,000TerraSky Co.,Ltd.

FY3/23
Number of shares Purpose of holding, outline of business alliance, etc., Whether or
not JAST’s(Shares)quantitative effects of holding, and the reason for an
shares are
Carrying amount on
increase in the number of shares
heldthe balance sheet(Thousand yen)
29,000 (Purpose of holding)Strengthen business relationships and enhance
corporate value(Outline of business alliance, etc.)
Yes
Development and human resource education in thebusiness related to BankNeo, our branded product,
project creation and human resource development
in cloud-related business, and others
Note: Quantitative holding effects are difficult to describe but JAST verifies the rationale of holdings based on the purpose ofholding, economic rationale, transaction status, and other factors.
42,74653,070(iii) Investment stocks held for pure investment
Classification
Unlisted stocks

FY3/24
Number of stocks Total carrying amount(Issues)on the balance sheet-

Stocks other than unlisted stocks

5(Thousand yen, unless otherwise stated)
FY3/23
Number of stocks
Total carrying amount(Issues)on the balance sheet-

432,4525

389,239(Thousand yen)Classification

FY3/24
Total gains (losses)
on salesTotal dividends received

Unlisted stocks
Stocks other than unlisted stocks

Total valuation
gains (losses)

-

-

-

8,499

-

234,875

Note: Total valuation gains (losses) for unlisted stocks are not shown because they are stocks with no market price, etc.

(iv) Investment stocks whose purpose of holding was reclassified from pure investment to other than pure investment
during the current fiscal year
Not applicable.
(v) Investment stocks whose purpose of holding was reclassified from other than pure investment to pure investment
during the current fiscal year
Not applicable.

- 52 -

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

Ⅴ. Financial Information
1. Basis for preparation of consolidated and non-consolidated financial statements(1) The consolidated financial statements of JAST are prepared in accordance with the Regulation on Terminology,
Forms, and Preparation Methods of Consolidated Financial Statements (Ministry of Finance Order No. 28 of 1976).
(2) The non-consolidated financial statements of JAST are prepared in accordance with the Regulation on Terminology,
Forms, and Preparation Methods of Financial Statements (Ministry of Finance Order No. 59 of 1963; hereinafter the“Regulation on Financial Statements”).
JAST falls under a company allowed to file specified financial statements and prepares the non-consolidated financial
statements pursuant to the provision of Article 127 of the Regulation on Financial Statements.
2. Audit certificate
JAST ’s consolidated and non-consolidated financial statements for the fiscal year from April 1, 2023 to March 31,
2024 were audited by Deloitte Touche Tohmatsu LLC, in accordance with the provisions of Article 193-2, Paragraph 1of the Financial Instruments and Exchange Act.
3. Special measures to ensure the appropriateness of consolidated financial statements, etc.
JAST has taken special measures to ensure the appropriateness of its consolidated financial statements, etc. Specifically,
to establish a system that allows JAST to understand accounting standards properly and adapt to changes in accounting
standards appropriately, JAST strives to collect necessary information by joining the Financial Accounting Standards
Foundation (FASF), referring to materials disclosed by the FASF, participating in seminars, and other means.

- 53 -

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

1. Consolidated Financial Statements, etc.
(1) Consolidated Financial Statements
i. Consolidated Balance Sheet
FY3/23(As of Mar. 31, 2023)(Thousand yen)
FY3/24(As of Mar. 31, 2024)

AssetsCurrent assets
Cash and deposits

7,206,690

Notes and accounts receivable-trade, and contract assets*2

6,532,385

7,974,566*2

7,175,022

Merchandise and finished goods

172,554

149,333

Work in process

100,612

202,606

8,239

5,339

Other

174,586

212,222

Allowance for doubtful accounts(7,924)(8,096)14,187,144

15,710,994

Raw materials and supplies

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

958,056

1,395,009

Accumulated depreciation(589,641)(673,682)

Buildings and structures, net

368,415

721,326

Land

142,361

142,361

Other

607,152

663,931

Accumulated depreciation(485,935)(462,397)

Other, net

121,216

201,534

631,994

1,065,222

Goodwill

88,499267,027

Customer-related assets

71,56153,821

Software

74,913

161,891

Other

7,626

8,141

242,601

490,881

Investment securities

612,807647,560

Retirement benefit asset

674,681887,689

Deferred tax assets

539,732

508,642

Guarantee deposits

435,927

501,402

Other

93,485

250,789

Total property, plant and equipment
Intangible assets

Total intangible assets
Investments and other assets

Allowance for doubtful accounts(4,577)(40,487)

Total investments and other assets

2,352,057

2,755,595

3,226,652

4,311,699

17,413,797

20,022,694

Total non-current assets
Total assets- 54 -

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

(Thousand yen)
FY3/24(As of Mar. 31, 2024)

FY3/23(As of Mar. 31, 2023)
Liabilities
Current liabilities
Notes and accounts payable-trade

1,495,532

1,429,832-

12,480

Income taxes payable

498,990

570,362

Contract liabilities

354,018

520,178

Provision for bonuses

1,270,424

1,313,103

110,250

133,649

Current portion of long-term borrowings

Provision for bonuses for directors (and other officers)
Provision for loss on construction contracts
Other
Total current liabilities

6,801

14,510967,961

1,228,837

4,703,9785,222,954-

65,960141,759

155,990

Non-current liabilities
Long-term borrowings
Provision for share awards for directors (and otherofficers)
Retirement benefit liability

1,110,713

1,087,676

Asset retirement obligations

239,628

273,506

Deferred tax liabilities

28,46429,824

Other

373,011474,674

1,893,578

2,087,632

6,597,556

7,310,586

Share capital

1,535,409

1,535,409

Capital surplus

1,702,732

1,702,732

Retained earnings

7,389,420

9,079,131

Treasury shares(175,703)(175,947)

10,451,859

12,141,325

Valuation difference on available-for-sale securities

137,114

158,376

Foreign currency translation adjustment

119,184

162,373

Remeasurements of defined benefit plans

60,618

196,499

Total accumulated other comprehensive income

316,917517,248

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

Total shareholders’ equity
Accumulated other comprehensive income

Non-controlling interests
Total net assets
Total liabilities and net assets- 55 -

47,46353,533

10,816,240

12,712,107

17,413,797

20,022,694

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

ii. Consolidated Statements of Income and Comprehensive Income
Consolidated Statement of Income
FY3/23(Apr. 1, 2022 – Mar. 31, 2023)
Net sales*1

23,519,516(Thousand yen)
FY3/24(Apr. 1, 2023 – Mar. 31, 2024)*1

26,183,521

Cost of sales*4, *5 17,143,676*4, *5 18,915,371

Gross profit

6,375,839

7,268,149*2, *3 3,990,171*2, *3 4,476,982

2,385,668

2,791,166

Interest income

16,012

22,797

Dividend income

8,937

8,499

Rental income

3,086

3,155

Commission income

2,100

2,111

Foreign exchange gains

12,286

9,949

Insurance claim income-

14,700Subsidy income

20,79229,587

Other

5,535

17,591

Total non-operating income

68,752

108,392

620

400

Selling, general and administrative expenses
Operating prfit
Non-operating income

Non-operating expenses
Interest expenses
Provision of allowance for doubtful accounts

2,345

35,507

Commission expenses

758

762

Other

547

1,474

4,271

38,143

Ordinary profit

Total non-operating expenses

2,450,148

2,861,415

Profit before income taxes

2,450,148

2,861,415

Income taxes-current

658,607807,544

Income taxes-deferred

13,513(37,290)

Total income taxes

672,121770,254

1,778,027

2,091,161

5,816

4,222

1,772,210

2,086,939

ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent- 56 -

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

Consolidated Statement of Comprehensive Income
FY3/23(Apr. 1, 2022 – Mar. 31, 2023)
Profit(Thousand yen)
FY3/24(Apr. 1, 2023 – Mar. 31, 2024)

1,778,027

2,091,161

Valuation difference on available-for-sale securities

15,346

21,261

Foreign currency translation adjustment

125,124

46,788Remeasurements of defined benefit plans, net of tax(50,087)

135,880

Other comprehensive income

Total other comprehensive income*1

Comprehensive income

90,382*1

203,930

1,868,410

2,295,092

1,858,894

2,287,270

9,516

7,822

Comprehensive income attributable to:Comprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests- 57 -

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

iii. Consolidated Statement of Changes in Equity
FY3/23 (Apr. 1, 2022 – Mar. 31, 2023)(Thousand yen)
Shareholders’ equity

Share capital
Balance at beginning of
periodChanges during period

1,535,409

Dividends of surplus
Profit attributable toowners of parent
Purchase of treasury shares
Change in ownershipinterest of parent due totransactions with noncontrolling interests
Net changes in items otherthan shareholders’ equity
Total changes during period
Balance at end of period

Capital surplus

Retained earnings

1,703,991

5,865,484

Treasury shares(175,264)

Total shareholders’equity8,929,621(248,274)(248,274)

1,772,210

1,772,210(439)(1,258)(439)(1,258)-(1,258)

1,523,936(439)

1,522,238

1,535,409

1,702,732

7,389,420(175,703)

10,451,859

Accumulated other comprehensive income

Balance at beginning of
periodChanges during period
Dividends of surplus
Profit attributable toowners of parent
Purchase of treasury shares
Change in ownershipinterest of parent due totransactions with noncontrolling interests
Net changes in items otherthan shareholders’ equity
Total changes during period
Balance at end of period

Valuationdifference on
available-forsale securities

Foreigncurrencytranslation
adjustment

Remeasurementsof defined benefit
plans

Total
accumulated
othercomprehensive
income121,768(2,240)110,706

230,234

Noncontrollinginterests

34,628

Total net assets

9,194,483(248,274)
1,772,210(439)(1,258)15,346

121,425(50,087)

86,683

12,83599,51815,346

121,425(50,087)

86,683

12,835

1,621,756

137,114

119,184

60,618316,91747,463

10,816,240- 58 -

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

FY3/24 (Apr. 1, 2023 – Mar. 31, 2024)(Thousand yen)
Shareholders’ equity

Share capital
Balance at beginning of
periodChanges during period

1,535,409

Dividends of surplus
Profit attributable toowners of parent
Purchase of treasury shares
Change in ownershipinterest of parent due totransactions with noncontrolling interests
Net changes in items otherthan shareholders’ equity
Total changes during period
Balance at end of period

Capital surplus

Retained earnings

1,702,732

7,389,420

Treasury shares(175,703)

Total shareholders’equity10,451,859(397,228)(397,228)

2,086,939

2,086,939
(244)

(244)
-

-

-

1,689,710(244)

1,689,466

1,535,409

1,702,732

9,079,131(175,947)

12,141,325

Accumulated other comprehensive income

Balance at beginning of
periodChanges during period
Dividends of surplus
Profit attributable toowners of parent
Purchase of treasury shares
Change in ownershipinterest of parent due totransactions with noncontrolling interests
Net changes in items otherthan shareholders’ equity
Total changes during period
Balance at end of period

Valuationdifference on
available-forsale securities

Foreigncurrencytranslation
adjustment

Remeasurementsof defined benefit
plans

Total
accumulated
othercomprehensive
income137,114

119,184

60,618316,917

Noncontrollinginterests

47,463

Total net assets

10,816,240(397,228)
2,086,939(244)
21,261

43,188135,880

200,330

6,070

206,400

21,261

43,188135,880

200,330

6,070

1,895,867

158,376

162,373

196,499

517,248

53,533

12,712,107- 59 -

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

iv. Consolidated Statement of Cash Flows
FY3/23(Apr. 1, 2022 – Mar. 31, 2023)(Thousand yen)
FY3/24(Apr. 1, 2023 – Mar. 31, 2024)

2,450,148

2,861,415

Depreciation

118,347

151,065

Amortization of software

25,11025,531

Amortization of goodwill

23,59924,203

Amortization of customer-related assets

19,083

19,571

Increase (decrease) in provision for bonuses

74,89642,131

Decrease (increase) in retirement benefit asset

30,463(213,008)

Increase (decrease) in retirement benefit liability

48,816(25,790)

Interest and dividend income(24,950)(31,297)

Cash flows from operating activities
Profit before income taxes

Interest expenses
Decrease (increase) in accounts receivable-trade, andcontract assets
Increase (decrease) in contract liabilities

620

400

(937,570)(597,994)(79,016)

164,541

Decrease (increase) in inventories(28,805)(74,574)

Increase (decrease) in trade payables

101,276(70,426)

Other, net(52,232)

331,196

Subtotal

1,769,788

2,606,965

24,95019,259

(620)

(398)

Interest and dividends received
Interest paid
Income taxes paid

(720,202)(737,387)

Net cash provided by (used in) operating activities

1,073,916

1,888,438

Cash flows from investing activities
Payments into time deposits(415,785)(734,702)

Proceeds from withdrawal of time deposits

3,291

701,835

Purchase of property, plant and equipment(80,953)(386,079)

1,481

5,902

Purchase of software(16,724)(114,731)

Purchase of investment securities(46,994)(1,834)

Loan advances(15,906)(271,498)

8,571

14,547

Payments of guarantee deposits(2,631)(118,551)

Proceeds from refund of guarantee deposits
Proceeds from purchase of shares of subsidiaries resulting
in change in scope of consolidation
Other, net

24,94524,472

Proceeds from sale of property, plant and equipment

Proceeds from collection of loans receivable-

Net cash provided by (used in) investing activities- 60 -*2

104,478(950)

14,686(541,656)(761,475)

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

FY3/23(Apr. 1, 2022 – Mar. 31, 2023)(Thousand yen)
FY3/24(Apr. 1, 2023 – Mar. 31, 2024)

Cash flows from financing activities
Net increase (decrease) in short-term borrowings(9,047)-

Repayments of lease liabilities(25,115)(24,860)

Dividends paid

(248,274)(397,228)

(439)

(244)

Purchase of treasury shares
Proceeds from share issuance to non-controllingshareholders
Dividends paid to non-controlling interests

3,740

-

(1,680)(1,752)

Net cash provided by (used in) financing activities(280,816)(424,085)

Effect of exchange rate change on cash and cash equivalents

77,782

19,259Net increase (decrease) in cash and cash equivalents

329,226

722,136

Cash and cash equivalents at beginning of period

6,463,823

Cash and cash equivalents at end of period*1- 61 -

6,793,050

6,793,050*1

7,515,186

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

Notes to Consolidated Financial Statements
Significant Accounting Policies in the Preparation of Consolidated Financial Statements
1. Scope of consolidation(1) Number of consolidated subsidiaries: 14
Names of consolidated subsidiaries:
JASTEC (THAILAND) CO., LTD.
Alpha Computer Co., Ltd.
NewNeeds Co., Ltd.
GuiLin Anxin Software Co., Ltd.
Shanghai Jiafeng Information Technology Co., Ltd.
ISR Co., Ltd.
JAST Asia Pacific Co., Ltd.
Virtual Calibre SDN. BHD.
Virtual Calibre MSC SDN. BHD.
Virtual Calibre Consulting SDN. BHD.
AG NET PTE. LTD.
Bright & Better Co., Ltd.
Virtual Calibre Consulting India Pvt. Ltd.
K-SHIP Co., Ltd.
K-SHIP Co., Ltd. was included in the scope of consolidation due to acquisition of this company’s shares during thecurrent fiscal year.
(2) Name of unconsolidated subsidiary
AGHRM Malaysia SDN. BHD.
Reason for exclusion from scope of consolidation
This unconsolidated subsidiary is excluded from the scope of consolidation because it is a smaller company and thus
has no material impact on the consolidated financial statements in terms of total assets, net sales, profit or loss
(amount proportionate to the JAST’s equity interest), retained earnings (amount proportionate to the JAST’s equity
interest) and other items.
2. Application of equity method(1) Number of unconsolidated subsidiaries accounted for by the equity method
Not applicable.
(2) Name of unconsolidated subsidiary not accounted for by the equity method, etc.
AGHRM Malaysia SDN. BHD.
(Reason for not applying the equity method)
This unconsolidated subsidiary is not accounted for by the equity method because it has only an insignificant effecton the consolidated financial statements in terms of profit or loss (amount proportionate to the JAST’s equity interest),
retained earnings (amount proportionate to the JAST’s equity interest) and other items, and has no significance as awhole in terms of the JAST’s equity interest.
3. Fiscal year of consolidated subsidiaries
At the ten overseas consolidated subsidiaries, the current fiscal year ended on December 31, 2023. The consolidated
financial statements include the financial statements of these consolidated subsidiaries as of December 31, 2023.
Necessary adjustments have been made for the consolidation concerning material transactions arising between January
1, 2024 and March 31, 2024.

- 62 -

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

The fiscal year of the four consolidated subsidiaries in Japan ends on the closing date of consolidated financial
statements.
4. Accounting policies(1) Valuation standards and methods for principal assets
A. Marketable securities(ⅰ) Held-to-maturity debt securities
Stated at cost determined by the amortized cost method (straight-line method).
(ⅱ) Available-for-sale securities
Securities other than shares, etc. that do not have a market priceStated at fair value. (Unrealized gain or loss is included in net assets. Cost of securities sold is determined by themoving-average method.)
Shares, etc. that do not have a market priceStated at cost determined by the moving-average method.
B. Inventories(ⅰ) MerchandiseStated at cost determined by the specific identification method. (The carrying amount on the balance sheet iswritten down to reflect the effect of lower profit margins.)(ⅱ) Finished goods
Stated at cost determined by the periodic average method. (The carrying amount on the balance sheet is written
down to reflect the effect of lower profit margins.)(ⅲ) Work in process
Stated at cost determined by the specific identification method. (The carrying amount on the balance sheet iswritten down to reflect the effect of lower profit margins.)(ⅳ) Supplies
Valued by the last purchased price method.
(2) Depreciation and amortization of significant depreciable assets
A. Property, plant and equipment (excluding lease assets)
Depreciation of property, plant and equipment at JAST and its consolidated subsidiaries in Japan is calculated by
the declining-balance method, except for facilities attached to buildings and structures acquired on or after April 1,
2016, on which depreciation is calculated by the straight-line method.
Depreciation of property, plant and equipment at the overseas consolidated subsidiaries is calculated by the straightline method.
Useful lives of principle assets is as follows.
Buildings and structures:

10–35 years

Other:

4–10 years

B. Intangible assets (excluding lease 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.
C. Leased assets(ⅰ) Lease assets associated with finance lease transactions where there is transfer of ownership
Depreciated by the same method as depreciation method used for non-current assets held by JAST.
(ⅱ) Lease assets associated with finance lease transactions where there is no transfer of ownership
Depreciated by the straight-line method, assuming the lease period to be the useful life and a residual value ofzero.

- 63 -

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

(3) Recognition of significant allowances
A. Allowance for doubtful accounts
To prepare for credit losses on accounts receivable, allowances equal to the estimated amount of uncollectible
receivables are provided for general receivables based on the historical write-off ratio, and bad receivables basedon case-by-case determination of collectibility.
B. Provision for bonuses
To provide for employee bonuses, JAST and its certain consolidated subsidiaries provide an allowance equal to theestimated bonus obligations.
C. Provision for bonuses for directors (and other officers)
To provide for bonuses for directors (and other officers), JAST and its certain consolidated subsidiaries provide anallowance equal to the estimated bonus obligations in the current fiscal year.
D. Provision for share awards for directors (and other officers)
To provide for the payment of JAST’s shares to its directors (and other officers) in accordance with the rules on
the stock compensation plan for directors (and other officers), an allowance is provided based on the estimatedobligations for share awards in the current fiscal year.
E. Provision for loss on construction contracts
To prepare for future losses on construction contracts, such as contracted software production and development,
an allowance is provided for estimated losses on contracts for which losses are expected to be incurred in the next
fiscal year or later and the amount can be reasonably estimated.
(4) Accounting method for retirement benefits(ⅰ) Method of attributing estimated retirement benefit obligations to periods
In calculation of retirement benefit obligations, JAST uses the benefit formula standard as the method for
attributing estimated retirement benefit obligations to periods.
(ⅱ) Amortization of actuarial differences and prior service costs
Actuarial differences are amortized and charged to expense in the year following the fiscal year in which such gainor loss is recognized by the declining-balance method over a certain period (10 years) which is within the estimatedaverage remaining years of service of the eligible employees.
Prior service cost is amortized by the declining-balance method over a certain period (10 years) within estimatedaverage remaining years of service of the eligible employees.
(ⅲ) Accounting method for unrecognized actuarial gains and losses and unrecognized prior service costs
Unrecognized actuarial gains and losses and unrecognized prior service costs are recorded as “Remeasurements ofdefined benefit plans” under “Accumulated other comprehensive income” in the net asset section after adjustingfor tax effects.
(ⅳ) Adoption of the simple method for smaller enterprises, etc.
Certain consolidated subsidiaries apply the simple method to calculate retirement benefit liability and retirement
benefit expenses, using the amount payable for voluntary retirement benefits at the end of the fiscal year as
retirement benefit obligations.
(5) Recognition of significant revenues and expenses
The nature of the main performance obligations related to revenue from contracts with customers in the major
businesses of JAST and its consolidated subsidiaries and the timing when those performance obligations are typicallysatisfied (when revenue is typically recognized) are as follows.
JAST and its consolidated subsidiaries have four business segments: DX&SI business, Package business, Medical
big data business, and Global business. JAST and its consolidated subsidiaries recognize revenue from contracts withcustomers mainly for contracted software production, maintenance and relevant services. For contracts where theperformance obligation is fulfilled over a specified period, the progress of fulfilling the performance obligation isestimated, except when the period is extremely short, and revenue based on the progress is recognized for that period.
The progress is determined mainly by the input method based on the ratio of the actual costs incurred to the estimated- 64 -

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

total construction cost (the cost-to-cost basis). For contracts where the performance obligation is fulfilled at a point
in time, such as the sale of products related to system equipment, revenue is recognized at the point in time when thecustomer accepts the products.
For transactions, such as the sale of products, where JAST and its consolidated subsidiaries function as agents, theamount paid to the supplier of the product is deducted from the total payment received from the customer and theresulting net amount is recognized as revenue.
(6) Method and period of goodwill amortization
Goodwill is amortized over a period of 5 to 10 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 withmaturities less than 3 months.
Significant Accounting Estimates
1. Estimate of total construction cost for revenue recognition over a specified period based on progress(1) Amounts recorded in the consolidated financial statements of the current fiscal year
(Thousand yen)
FY3/24

FY3/23
Net sales from revenue recognized overa specified period based on progress

1,856,776

1,408,009(2) Other information that contributes to the understanding of accounting estimates
For contracts where the performance obligation is fulfilled over a specified period, such as contracted software
production and relevant services, net sales are recorded by recognizing revenue based on the progress for that period.
Net sales from revenue recognized over a specified period based on progress are calculated by multiplying the total
construction revenue by the progress. The progress is determined by the input method based on the ratio of the actual
costs incurred by the end of the current fiscal year to the estimated total construction cost (the cost-to-cost basis). The
total construction cost based on incurred costs is estimated by using the number of man-hours required for the workin consideration of its individualized nature, such as the specifications and work period of contracted software
production and relevant services.
In the event that the estimate of man-hours requires a significant revision, the change in estimate of the total
construction cost due to the revision may have a material impact on the consolidated financial statements for thefollowing fiscal year.
Accounting Standards, Others That Have Not Yet Been Applied- Accounting Standard for Current Income Taxes (ASBJ Statement No. 27, October 28, 2022)- Accounting Standard for Presentation of Comprehensive Income (ASBJ Statement No. 25, October 28, 2022)- Guidance on Accounting Standard for Tax Effect Accounting (ASBJ Guidance No. 28, October 28, 2022)(1) Outline
The above standards and guidance define the accounting classification of income taxes when other comprehensive
income is taxable and the treatment of tax effects on the sale of shares of subsidiaries, etc. when the group taxation
regime is adopted.
(2) Effective date
Scheduled to be effective from the beginning of the fiscal year ending March 31, 2025.
(3) Effects of application of the accounting standards and guidance
The effects of the application are under assessment at the time of preparing these consolidated financial statements.

- 65 -

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

Reclassifications
Not applicable.
Changes in Accounting-based Estimates
Not applicable.
Additional Information
Board Benefit Trust (BBT)
Based on the resolution of the 46th Annual General Meeting of Shareholders, JAST on June 26, 2018 terminated the
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 amount equivalent to the market value of the stockin lieu of stock compensation in accordance with the rules on the stock compensation plan for directors. In principle, adirector becomes eligible for stock compensation only after the individual 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 298,400 shares of JAST with a book value of 171,700
thousand yen as of the end of the previous fiscal year, and held 298,400 shares with a book value of 171,700 thousand
yen as of the end of the current fiscal year.
Note: JAST conducted a 2-for-1 common stock split on April 1, 2024. The number of shares has been calculated as if thisstock split has taken place at the beginning of the fiscal year ended March 31, 2023.
Notes to Consolidated Balance Sheet*1 JAST 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.

Commitment line

FY3/23(As of Mar. 31, 2023)
500,000(Thousand yen)
FY3/24(As of Mar. 31, 2024)
500,000--

500,000

500,000

Credit used
Credit available*2 Notes and accounts receivable-trade, and contract assets arising from contracts with customers were as follows.

22,826(Thousand yen)
FY3/24(As of Mar. 31, 2024)
39,432

Accounts receivable-trade

5,073,898

5,759,505

Contract assets

1,435,660

1,376,084

FY3/23(As of Mar. 31, 2023)
Notes receivable-trade- 66 -

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

Notes to Consolidated Statement of Income*1 Revenue from contracts with customers
Net sales are not presented separately into revenues from contracts with customers and other revenues. The amountof revenue from contracts with customers is presented in “(Revenue Recognition), 1. Information on disaggregatedrevenue from contracts with customers” in the Notes to Consolidated Financial Statements.
*2 Major items of selling, general and administrative expenses(Thousand yen)
FY3/24(Apr. 1, 2023–Mar. 31, 2024)

FY3/23(Apr. 1, 2022–Mar. 31, 2023)
Compensations for directors (andother officers)
Wages, sales and other allowances

293,944346,727

1,552,084

1,643,873

Provision for bonuses
Provision for bonuses for directors(and other officers)
Provision for retirement benefits for
directors (and other officers)
Stock compensation expenses for
directors (and other officers)
Retirement benefit expenses

216,507220,302

117,666

136,735352-

21,031

14,23063,74160,872

Research and development expenses

469,246

353,128*3 Total amount of research and development expenses included in general and administrative expenses
FY3/23(Apr. 1, 2022–Mar. 31, 2023)
469,246(Thousand yen)
FY3/24(Apr. 1, 2023–Mar. 31, 2024)
353,128*4 Provision for loss on construction contracts included in cost of sales
FY3/23(Apr. 1, 2022–Mar. 31, 2023)
6,801(Thousand yen)
FY3/24(Apr. 1, 2023–Mar. 31, 2024)
14,510*5 The balance of inventories at the end of the fiscal year is the amount after the write-down of book value due to theeffect of lower profit margins, and the following inventory write-down is included in cost of sales.
FY3/23(Apr. 1, 2022–Mar. 31, 2023)
53,368- 67 -(Thousand yen)
FY3/24(Apr. 1, 2023–Mar. 31, 2024)
46,833

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

Notes to Consolidated Statement of Comprehensive Income*1 Re-classification adjustments and tax effect with respect to other comprehensive income
FY3/23(Apr. 1, 2022–Mar. 31, 2023)
Valuation difference on available-for-salesecurities:
Amount incurred during the year

(Thousand yen)
FY3/24(Apr. 1, 2023–Mar. 31, 2024)

22,11830,644--

Before tax effect adjustments

22,11830,644

Tax effect
Valuation difference on availablefor-sale securities
Foreign currency translation adjustment:(6,772)(9,383)

15,346

21,261

Amount incurred during the year

125,124

46,788Amount incurred during the year

(38,469)

213,848

Re-classification adjustments(33,723)(17,998)

Before tax effect adjustments(72,193)

195,850

Tax effectRemeasurements of defined benefit
plans, net of tax
Total other comprehensive income

22,105(59,969)(50,087)

135,880

90,382203,930

Re-classification adjustments

Remeasurements of defined benefit plans:

Notes to Consolidated Statement of Changes in Equity
FY3/23 (Apr. 1, 2022–Mar. 31, 2023)
1. Type of share and the number of outstanding shares and treasury shares
Number of shares
as of Apr. 1, 2022

Increase(Shares)Number of shares
as of Mar. 31, 2023

Decrease

Outstanding shares
Common stock(Note 1)
Total

6,209,230

6,209,230-

12,418,460

6,209,230

6,209,230-

12,418,460

Treasury shares
Common stock(Notes 2, 3)
Total

76,96677,302-

154,268

76,96677,302-

154,268

Notes: 1.
2.

3.

Number of outstanding shares of common stock increased 6,209,230 shares due to stock split.
Number of treasury shares of common stock increased 77,302 shares:
Increase due to acquisition of odd-lot shares before stock split
150 shares
Increase due to acquisition of odd-lot shares after stock split
36 shares
Increase due to stock split
77,116 shares
Number of treasury shares of common stock includes JAST stock held by the BBT (74,600 shares as of April 1, 2022
and 149,200 shares as of March 31, 2023).

2. Items related to share acquisition rights and treasury share acquisition rights
Not applicable.
3. Dividends(1) Dividend payment
Type of
Total dividends Dividend per share
Record date
Effective dateshare
(Thousand yen)
(Yen)
Board of Directors’Common248,274
40
March 31, 2022
June 9, 2022
meeting on April 28, 2022
stock
Note: The amount of total dividends resolved by the Board of Directors’ meeting on April 28, 2022 includes dividends of 2,984
thousand yen for JAST stock held by the Board Benefit Trust (BBT).
Resolution- 68 -

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

(2) Dividends with a record date in FY3/23, but an effective date in FY3/24
Resolution

Type of share

Total dividends(Thousand yen)

Source offunds

Dividend pershare (Yen)Record date

Effective date

Board of Directors’CommonRetainedmeeting on April
397,22832
March 31, 2023
June 9, 2023
stock
earnings
28, 2023
Note: The amount of total dividends resolved by the Board of Directors’ meeting on April 28, 2023 includes dividends of 4,774
thousand yen for JAST stock held by the Board Benefit Trust (BBT).

FY3/24 (Apr. 1, 2023–Mar. 31, 2024)
1. Type of share and the number of outstanding shares and treasury shares
Number of shares
as of Apr. 1, 2023

Increase(Shares)Number of shares
as of Mar. 31, 2024

Decrease

Outstanding shares
Common stock
Total
Treasury shares
Common stock(Notes 1, 2)
Total
Notes: 1.
2.

12,418,460--

12,418,460

12,418,460--

12,418,460

154,268

116-

154,384

154,268

116-

154,384

Number of treasury shares of common stock increased 116 shares due to acquisition of odd-lot shares.
Number of treasury shares of common stock includes JAST stock held by the BBT (149,200 shares as of April 1, 2023
and 149,200 shares as of March 31, 2024).

2. Items related to share acquisition rights and treasury share acquisition rights
Not applicable.
3. Dividends(1) Dividend payment
Resolution

Type of share

Total dividends(Thousand yen)

Dividend per share(Yen)

Record date

Effective date

Board of Directors’
meeting on April 28,
Common stock
397,22832
March 31, 2023
June 9, 2023
2023
Note: The amount of total dividends resolved by the Board of Directors’ meeting on April 28, 2023 includes dividends of 4,774
thousand yen for JAST stock held by the Board Benefit Trust (BBT).

(2) Dividends with a record date in FY3/24, but an effective date in FY3/25
Resolution

Type of share

Total dividends(Thousand yen)

Source offunds

Dividend pershare (Yen)Record date

Effective date

Board of Directors’CommonRetainedmeeting on April
558,597
45
March 31, 2024
June 11, 2024
stock
earnings
26, 2024
Note: The amount of total dividends resolved by the Board of Directors’ meeting on April 26, 2024 includes dividends of 6,714
thousand yen for JAST stock held by the Board Benefit Trust (BBT).

- 69 -

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

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.

Cash and deposits
Time depositwith maturities over 3 months
Cash and cash equivalents

FY3/23(Apr. 1, 2022–Mar. 31, 2023)
7,206,690(Thousand yen)
FY3/24(Apr. 1, 2023–Mar. 31, 2024)
7,974,566(413,639)(459,379)

6,793,050

7,515,186*2 FY3/24 (Apr. 1, 2023–Mar. 31, 2024)
Major assets and liabilities of new consolidated subsidiary due to purchase of stock during the fiscal year
Assets and liabilities at the initial consolidation of K-SHIP Co., Ltd., which became a subsidiary due to the purchase ofstock, and the acquisition cost of shares and net proceeds from purchase of shares of subsidiaries are as follows.
Current assets(Thousand yen)
128,057

Non-current assets

9,649

Goodwill

200,466

Current liabilities(32,774)

Non-current liabilities(305,398)

Acquisition cost of shares

1

Cash and cash equivalents(104,479)

Proceeds from purchase of shares of subsidiaries

104,478- 70 -

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

Financial Instruments
1. Status of financial instruments(1) Policies on financial instruments
The Group covers necessary funds mainly with its own funds, but also raises funds by borrowing from banks,
depending on the cash flow situation and financial conditions. Temporary surplus funds are invested only in highly
secure financial assets such as deposits with guaranteed principal and fixed interest rates. The Group does not engage
in derivative transactions.
(2) Nature and risks of financial instruments
Notes and accounts receivable-trade, which are trade receivables, are exposed to customers’ credit risk. Investment
securities mainly comprise held-to-maturity bonds and shares of companies with which we have business
relationships, and are exposed to the risk of market price fluctuations.
Accounts payable-trade, which are trade payables, are mostly due within two months. Borrowings are mainly for the
purpose of financing working capital and are exposed to liquidity risk.
(3) Risk management system for financial instruments(ⅰ) Management of credit risk (risk of non-performance by counterparties)
In accordance with the credit management rules, the department in charge regularly monitors the status of business
partners and manages due dates and outstanding balances by business partner in order to early identify and mitigate
concerns about collection due to deterioration of financial conditions and other reasons.
(ⅱ) Management of market risk (risk of exchange rate and interest rate fluctuations)
For investment securities, the Group assesses the fair value and financial conditions of the issuers (business
partners) regularly, and reviews its holdings of such securities on an ongoing basis, taking into consideration market
conditions and the relationship with the business partners.
(ⅲ) Management of liquidity risk in financing (risk of being unable to make payments on due dates)
The Group manages its liquidity risk by having the department in charge prepare and update cash management
plans in a timely manner, maintaining liquidity on hand, and other measures.
(4) Supplementary explanation on fair value of financial instruments
As certain variables are used in the calculation of the value of financial instruments, such value may vary if different
assumptions are applied.
2. Fair value of financial instruments
The carrying amount and fair value of financial instruments and their difference are as follows.
FY3/23 (As of Mar. 31, 2023)
Carrying amount

Fair value(Thousand yen)
Difference(1) Investment securities (*2)(ⅰ) Available-for-sale securities(2) Guarantee deposits
Total assets

589,354589,354-435,927

430,246(5,681)

1,025,282

1,019,601(5,681)(*1) “Cash and deposits,” “Notes and accounts receivable-trade, and contract assets,” “Accounts payable-trade,” and “Income
taxes payable” are omitted because they are cash, and their fair value approximates their carrying amount since they aresettled in a short period of time.
(*2) Shares, etc. that do not have a market price are not included in “(1) Investment securities.” The carrying amount of suchfinancial instruments are as follows.

- 71 -

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

Item

FY3/23 (Thousand yen)

Unlisted shares

23,452

FY3/24 (As of Mar. 31, 2024)
Carrying amount(Thousand yen)
Difference

Fair value(1) Investment securities (*2)(ⅰ) Available-for-sale securities(2) Guarantee deposits
Total assets(3) Long-term borrowings (*3)
Total liabilities

622,988622,988-

501,402489,819(11,582)

1,124,390

1,112,808(11,582)

78,44080,2001,760

78,44080,2001,760(*1) “Cash and deposits,” “Notes and accounts receivable-trade, and contract assets,” “Accounts payable-trade,” and “Income
taxes payable” are omitted because they are cash, and their fair value approximates their carrying amount since they aresettled in a short period of time.
(*2) Shares, etc. that do not have a market price are not included in “(1) Investment securities.” The carrying amount of suchfinancial instruments are as follows.
Item

FY3/24 (Thousand yen)

Unlisted shares

24,571(*3) Current portion of long-term borrowings is included in long-term borrowings.
Note 1:

Redemption schedule of monetary claims and securities with maturities after the consolidated balance sheet date
FY3/23 (As of Mar. 31, 2023)(Thousand yen)
Due after
Due after
Due within
Due after
1 year through 5 years through1 year10 years
5 years
10 years
7,206,690-

Cash and deposits
Notes and accounts receivable-trade, and contract assets

6,532,385

-

-

-

-

101,910---

45,135--

13,739,075

147,045--

Investment securities
Available-for-sale securities with maturities
Bonds
Negotiable certificates of deposit
Total
FY3/24 (As of Mar. 31, 2024)

Cash and deposits(Thousand yen)
Due after
Due after
Due after
1 year through 5 years through10 years
5 years
10 years
7,974,566-

Notes and accounts receivable-trade, and contract assets

7,175,022

-

-

-

-

101,500--

46,290---15,195,879

101,500--

Due within
1 yearInvestment securities
Available-for-sale securities with maturities
Bonds
Negotiable certificates of deposit
Total- 72 -

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

Note 2:

Repayment schedule of short-term borrowings and long-term borrowings after the consolidated balance sheet date
FY3/23 (As of Mar. 31, 2023)
Not applicable.
FY3/24 (As of Mar. 31, 2024)

12,480

11,100Due after
2 years
through
3 years
11,10012,480

11,100

11,100Due after
Due within
1 year through1 year
2 years
Long-term borrowings
Total

Due after
3 years
through
4 years
11,100
11,100(Thousand yen)
Due after
4 years
Due after
through
5 years
5 years
11,10021,560
11,10021,5603. Fair value information by level within the fair value hierarchy
The fair value of financial instruments is classified into the following three levels according to the observability andmateriality of inputs used to measure fair value.
Level 1 fair value: Fair value measured using observable inputs, i.e., quoted prices in active markets for assets or
liabilities that are the subject of the measurement.
Level 2 fair value: Fair value measured using observable inputs other than Level 1 inputs.
Level 3 fair value: Fair value measured using unobservable inputs.
If multiple inputs are used that are significant to the fair value measurement, the fair value measurement is categorized inits entirety in the level of the lowest level input that is significant to the entire measurement.
(1) Financial instruments measured at fair value
FY3/23 (As of Mar. 31, 2023)
Item

Fair value (Thousand yen)
Level 1

Level 2

Level 3

Total

Investment securities
Available-for-sale securities
Shares442,309--442,309

Corporate bonds-

101,910-

101,910

Negotiable certificates of deposit-

45,135-45,135442,309

147,045-589,354

Total assets

FY3/24 (As of Mar. 31, 2024)
Item

Fair value (Thousand yen)
Level 1

Level 2

Level 3

Total

Investment securities
Available-for-sale securities
Shares475,198--

475,198-

101,500-

101,500-

46,290-46,290475,198

147,790-622,988

Corporate bonds
Negotiable certificates of deposit
Total assets(2) Financial instruments other than those measured at fair value
FY3/23 (As of Mar. 31, 2023)
Item
Guarantee deposits
Total assets

Fair value (Thousand yen)
Level 1

Level 2

Level 3

Total-

430,246-

430,246-

430,246-

430,246- 73 -

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

FY3/24 (As of Mar. 31, 2024)
Item
Guarantee deposits
Total assets
Long-term borrowings
Total liabilities

Fair value (Thousand yen)
Level 1

Level 2

Level 3

Total-

489,819-489,819-489,819-489,819-

80,200-80,200-80,200-80,200Note: A description of the valuation techniques and inputs used in the fair value measurements
Investment securities
Listed shares, corporate bonds and negotiable certificates of deposit are valued using quoted prices. As listed shares are traded in active
markets, their fair value is classified as Level 1. On the other hand, the fair value of corporate bonds and negotiable certificates ofdeposit held by JAST are classified as Level 2 because they are not traded frequently in the public market and not considered to havequoted prices in active markets.
Guarantee deposits
The fair value is calculated based on the present value of guarantee deposits, net of future non-refundable guarantee deposits, discounted
at the yield on government bonds, and is classified as Level 2.
Long-term borrowings
The fair value of long-term borrowings is the present value of the total principal and interest of these borrowings calculated by using
the interest rate for each loan as the discount rate and is classified as Level 2. The current portion of long-term borrowings is included
in long-term borrowings.

- 74 -

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

Marketable Securities
1. Held-to-maturity debt securities
FY3/23 (As of Mar. 31, 2023)
Not applicable.
FY3/24 (As of Mar. 31, 2024)
Not applicable.
2. Available-for-sale securities
FY3/23 (As of Mar. 31, 2023)
Type
Securities withcarrying amountexceeding acquisition
costs

Securities withcarrying amount notexceeding acquisition
costs

Carrying amount(Thousand yen)
Unrealized gain (loss)

Acquisition costs

Shares389,239

195,743

193,496

Bonds

101,910

81,327

20,583

Others---Subtotal

491,149

277,070

214,079

Shares53,07069,520(16,450)---

45,13545,135

-

-

-

-

Bonds
Negotiablecertificates ofdeposit
OthersSubtotal

Total

98,205

114,655(16,450)

589,354391,725

197,628

Note: Shares of unconsolidated subsidiaries (carrying amount of 164 thousand yen) and unlisted shares (carrying amount of
23,288 thousand yen) are not included in “Available-for-sale securities” in the above table because they are shares, etc. that
do not have a market price.

FY3/24 (As of Mar. 31, 2024)
Type
Securities withcarrying amountexceeding acquisition
costs

Securities withcarrying amount notexceeding acquisition
costs

Carrying amount(Thousand yen)
Unrealized gain (loss)

Acquisition costs

Shares432,452

197,577

234,875

Bonds

101,500

81,327

20,173

Others---Subtotal

533,952

278,904

255,048

Shares42,746

69,520(26,774)---

46,29046,290

-

-

-

-

Bonds
Negotiablecertificates ofdeposit
OthersSubtotal

Total

89,036

115,810(26,774)

622,988394,715228,273

Note: Shares of unconsolidated subsidiaries (carrying amount of 179 thousand yen) and unlisted shares (carrying amount of
24,392 thousand yen) are not included in “Available-for-sale securities” in the above table because they are shares, etc. that
do not have a market price.

3. Sales of available-for-sale securities
FY3/23 (Apr. 1, 2022–Mar. 31, 2023)
Not applicable.
FY3/24 (Apr. 1, 2023–Mar. 31, 2024)
Not applicable.

- 75 -

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

4. Available-for-sale securities written down due to impairment
FY3/23 (Apr. 1, 2022–Mar. 31, 2023)
Not applicable.
FY3/24 (Apr. 1, 2023–Mar. 31, 2024)
Not applicable.
Derivative Transactions
Not applicable because the Group had no derivative transactions.
Retirement Benefits
1. Retirement benefit plans
JAST has adopted defined benefit plans, which are a lump-sum retirement benefit payment plan in line with JAST’sregulation, and a defined benefit pension plan as well as a defined contribution pension plan. JAST and ISR Co., Ltd.
participate in the Japan Computer Information Service Employee’s Pension Fund. The amount to be contributed to plan
assets accounted for as retirement benefit expenses was 52,561 thousand yen in the consolidated financial statements
for FY3/24.
Alpha Computer Co., Ltd. has adopted a lump-sum retirement benefit payment plan as defined benefit plan, andparticipates in the Nihon IT Software Pension Fund. The amount to be contributed to plan assets accounted for as
retirement benefit expenses was 2,253 thousand yen in the consolidated financial statements for FY3/24.
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 3,719 thousand yen in
the consolidated financial statements for FY3/24.
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 toplan assets is accounted for as retirement benefit expenses.
Japan Computer Information Service Employees’ Pension Fund
(1) Most recent funding status of the multi-employer pension plan(Thousand yen)
FY3/23 (As of Mar. 31, 2022)
Amount of plan assets
Total of actuarial obligations basedon pension finance accounting andthe minimum actuarial reserve
Difference

FY3/24 (As of Mar. 31, 2023)

273,942,108

268,557,476

221,054,258

216,477,612

52,887,849

52,079,864(2) The percentage of the Group’s contribution out of the total contribution to the multi-employer pension plan
FY3/23 (Apr. 1, 2021–Mar. 31, 2022):

0.76%

FY3/24 (Apr. 1, 2022–Mar. 31, 2023):

0.81%(3) Supplementary explanation
The main factors of the difference in (1) above are as follows.
(Thousand yen)
FY3/23 (As of Mar. 31, 2022)
Balance of prior service cost

FY3/24 (As of Mar. 31, 2023)(54,275)(102,998)

Surplus for the fiscal year

52,942,124

52,182,862

Total

52,887,849

52,079,864

The percentages in (2) above do not correspond to the actual share of the Group’s contribution.

- 76 -

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

Nihon IT Software Pension Fund
(1) Most recent funding status of the multi-employer pension plan(Thousand yen)
FY3/23 (As of Mar. 31, 2022)
Amount of plan assets
Total of actuarial obligations basedon pension finance accounting andthe minimum actuarial reserve
Difference

FY3/24 (As of Mar. 31, 2023)

56,574,025

55,007,211

54,852,309

53,285,495

1,721,716

1,721,716(2) The percentage of the Group’s contribution out of the total contribution to the multi-employer pension plan
FY3/23 (Apr. 1, 2021–Mar. 31, 2022):

0.10%

FY3/24 (Apr. 1, 2022–Mar. 31, 2023):

0.11%(3) Supplementary explanation
The main factors of the difference in (1) above are as follows.
(Thousand yen)
FY3/23 (As of Mar. 31, 2022)
General reserve

1,721,716--

1,721,716

1,721,716

Surplus for the fiscal year
Total

FY3/24 (As of Mar. 31, 2023)

1,721,716

The percentages in (2) above do not correspond to the actual share of the Group’s contribution.
2. Defined benefit plans(1) Reconciliation of beginning and ending balances of retirement benefit obligation
FY3/23(Apr. 1, 2022–Mar. 31, 2023)(Thousand yen)
FY3/24(Apr. 1, 2023–Mar. 31, 2024)

1,846,523

1,924,437

157,659

162,887

Interest cost

18,76919,498Actuarial differences

20,483(3,661)(112,218)(227,169)(6,780)(2,173)

1,924,437

1,873,818

Retirement benefit obligations at
beginning of period
Service cost

Payment of retirement benefit
OthersRetirement benefit obligations at endof period
Note: Plans using the simple method are included.

(2) Reconciliation of beginning and ending balances of plan assets

Plan assets at beginning of period

FY3/23(Apr. 1, 2022–Mar. 31, 2023)
1,492,876(Thousand yen)
FY3/24(Apr. 1, 2023–Mar. 31, 2024)
1,488,404

Expected return on plan assets

14,92814,884

Actuarial differences(22,130)

210,187

Contributions by the employer

57,29259,533

Payment of retirement benefit(54,563)(99,177)

1,488,404

1,673,831

Plan assets at end of period- 77 -

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

(3) Reconciliation of ending balances of retirement benefit obligation and plan assets against retirement benefit liability
and retirement benefit asset recognized in the consolidated balance sheet(Thousand yen)
FY3/24(As of Mar. 31, 2024)

FY3/23(As of Mar. 31, 2023)
Retirement benefit obligation ofcontributory plan
Plan assets

813,723

786,142(1,488,404)(1,673,831)(674,681)(887,689)

1,110,713

1,087,676

436,032

199,987

Retirement benefit liability

1,110,713

1,087,676

Retirement benefit asset
Net liability / asset recognized in the
consolidated balance sheet
Note: Plans using the simple method are included.

(674,681)(887,689)

436,032

199,987

Retirement benefit obligation of noncontributory plan
Net liability / asset recognized in the
consolidated balance sheet(4) Components of retirement benefit expenses

Service cost

FY3/23(Apr. 1, 2022–Mar. 31, 2023)
157,659(Thousand yen)
FY3/24(Apr. 1, 2023–Mar. 31, 2024)
162,887

Interest cost

18,76919,498

Expected return on plan assets(14,928)(14,884)

Amortization of actuarial differences(33,662)(17,949)

(61)

(48)

127,776

149,503

Amortization of prior service cost
Retirement benefit expenses fordefined benefit plan
Note: Plans using the simple method are included.

(5) Remeasurements of defined benefit plans
Components of remeasurements of defined benefit plans (before tax effect)
FY3/23(Apr. 1, 2022–Mar. 31, 2023)(61)(Thousand yen)
FY3/24(Apr. 1, 2023–Mar. 31, 2024)(48)

Actuarial differences(76,275)

195,898

Total(76,337)

195,850

Prior service costs(6) Remeasurements of defined benefit plans, cumulative
Components of accumulated remeasurements of defined benefit plans (before tax effect)

Unrecognized prior service costs

236(Thousand yen)
FY3/24(As of Mar. 31, 2024)
187

Unrecognized actuarial differences

87,135

283,034

Total

87,371

283,221

FY3/23(As of Mar. 31, 2023)- 78 -

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

(7) Relevant information on plan assets(ⅰ) Major breakdown of plan assets
The allocation percentage by major investment category to the total amount of plan assets is presented as follows.
FY3/23(As of Mar. 31, 2023)

FY3/24(As of Mar. 31, 2024)

Bonds

57%

54%

Shares40%

43%

Cash and deposits
Total

3%

3%

100%

100%

(ⅱ) 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 investmentsthat comprise the plan assets.
(8) Relevant information on assumptions for actuarial calculation
Principal assumptions for actuarial calculation (presented by the weighted average)
FY3/23(As of Mar. 31, 2023)
Discount rate

1.07%

FY3/24(As of Mar. 31, 2024)
1.07%

Expected long-term return on assets

1.0%

1.0%

Lump sum election rate

100%

100%

3. Defined contribution plan
The amounts to be contributed to the defined contribution plan for JAST and its consolidated subsidiaries for the fiscal
years ended March 31, 2023 and 2024 were 88,326 thousand yen and 94,556 thousand yen, respectively.
Stock Options
Not applicable.

- 79 -

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

Tax Effect Accounting
1. Significant components of deferred tax assets and liabilities(Thousand yen)
FY3/24(As of Mar. 31, 2024)

FY3/23(As of Mar. 31, 2023)
Deferred tax assets
Provision for bonuses

387,799

402,448

Accrued expenses

54,944

58,178

Accounts payable-other

808

2,783

Accrued business office taxes

38,03445,031

Provision for loss on construction contracts

2,082

4,443

Inventories

17,00014,663Long-term accounts payable-other
Provision for share awards for directors (andother officers)
Retirement benefit liability

104,942

112,865

43,40647,764332,400

325,131

Allowance for doubtful accounts

2,821

14,216

Asset retirement obligations

76,61285,654

Tax loss carryforwards (Note 1)

86,271

138,345

31,41829,532

Subtotal deferred tax assets
Less valuation allowance for tax loss
carryforwards (Note 1)
Less valuation allowance for future deductible
temporary differences
Subtotal valuation allowance

Other

1,178,544

1,281,059(86,271)(138,345)(241,483)(250,495)(327,755)(388,841)

Total

850,788892,218

60,51369,897

206,587

271,81072,41971,692

339,520

413,400

511,268

478,818

Deferred tax liabilities
Valuation difference on available-for-salesecurities
Retirement benefit asset
Other
Total
Net deferred tax assets
Note: 1.

Expiration of tax loss carryforwards, the related valuation allowances, and the resulting net deferred tax assets
FY3/23 (As of Mar. 31, 2023)(Thousand yen)Tax loss carryforwards (*1)
Less valuation allowancefor tax loss carryforwards
Deferred tax assets

Over
Over
Over
Over
Within 1
1 year
2 years
3 years
4 yearsyear
to 2 years to 3 years to 4 years to 5 years
4,918
13,139
6,312
3,552
427

Over
5 years

Total

57,92086,271(4,918)(13,139)(6,312)(3,552)(427)(57,920)(86,271)

-

-

-

-

-

-

-

(*1) Tax loss carryforwards are calculated by applying the statutory tax rate.
FY3/24 (As of Mar. 31, 2024)(Thousand yen)Tax loss carryforwards (*1)
Less valuation allowancefor tax loss carryforwards
Deferred tax assets

Over
Over
Over
Over
Within 1
1 year
2 years
3 years
4 yearsyear
to 2 years to 3 years to 4 years to 5 years
13,915
6,713
3,728
462
11,166(13,915)(6,713)(3,728)

(462)

-

-

-

-

(*1) Tax loss carryforwards are calculated by applying the statutory tax rate.

- 80 -

Over
5 years

Total

102,358

138,345(11,166) (102,358)(138,345)---

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

2. Significant sources of differences between the statutory tax and effective tax rate

Statutory tax rate

FY3/23(As of Mar. 31, 2023)
30.6 %(Adjustments)
Permanent difference of entertainment expenses
and other items
Residential tax for the period

FY3/24(As of Mar. 31, 2024)
30.6 %

0.7

0.6

0.3

0.3

Increase (decrease) in valuation allowance

1.9

0.6

Tax credit

(5.5)

(5.4)

Amortization of goodwill

0.3

0.3

Tax effect of undistributed earnings
Tax rate difference between the Company and its
consolidated subsidiaries
Others

0.2

0.2

(0.6)

(0.8)

(0.4)

0.5

Effective tax rate

27.4

26.9

Business Combinations
1. Summary of business combination(1) Acquired company and its business activities
K-SHIP Co., Ltd.
Business activities: Health insurance invoice processing and verifications, verifications of applications forpayments of judo therapy treatment expenses, health management business, and otheractivities(2) Reasons for acquisition
K-SHIP is a provider of insurance services primarily to health insurance organizations. Operations include
verifications of applications for payments for judo therapy treatments, which are mainly inspections of items listed
in invoices, and outsourced invoicing services, health insurance administrative tasks, and other activities. K-SHIP
is one of the largest players and provides services to more than 170 health insurance organizations. On the other
hand, the Group is a comprehensive software development organization that has no affiliations with other corporategroups and a highly distinctive identity. The Group has a system solutions business that always utilizes the latest
advances in technology to serve an extremely broad range of clients in terms of industries, technological fields,
equity relationships and other characteristics. The medical big data business was 8.6% of the Group’s sales in thefiscal year that ended in March 2023. The Group’s business activities are guided by the missions of ”Making medical
data an asset with value” and ”Using ICT for the digital transformation of health insurance operations”. The
objectives are to be a one-stop source of services for health insurers and a provider of services for the utilization ofdata with the aim of extending the healthy life spans of the public and supporting health insurance for the people ofJapan. One of the Group’s highest priorities is the growth of business value in this insurance services sector byincreasing the Group’s market share for more growth of medical big data at the Group.
JAST has purchased K-SHIP stock for the purposes of increasing the number of transactions and the volume of big
data in the health insurance market at all group companies. In addition, JAST plans to use the combination of theGroup’s ICT and digital transformation expertise and K-SHIP’s business operations know-how for the provision ofservices with even greater value to health insurance organizations.
(3) Acquisition date
January 26, 2024 (stock acquisition date)
March 31, 2024 (assumed acquisition date)(4) Legal form of acquisition
Acquisition of shares with cash(5) Company’s name after acquisition
There is no change in the company’s name.
(6) Percentage of voting rights acquired100%- 81 -

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

(7) Basis for choosing the company to acquire
JAST acquired the shares in exchange for consideration in cash.
2. Period of the acquired company’s performance included in the consolidated financial statements
The consolidated statement of income for the current fiscal year does not reflect the performance of the acquiredcompanies since JAST has consolidated only the balance sheet. This is because the assumed acquisition date of March
31, 2024 does not exceed three months from the consolidation closing date of the current fiscal year.
3. Acquisition cost of acquired company and breakdown by type of consideration
Payment for the acquisition:Cash
1 thousand yen
Acquisition cost:
1 thousand yen
4. Details of major acquisition-related costs
Remuneration for advisory members and other related fees: 2.2 million yen
5. Goodwill resulting from the acquisition(1) Value of goodwill
200.466 million yen
The amount of goodwill is calculated provisionally because the allocation of the acquisition cost is incomplete at
the end of the current fiscal year.
(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 ten years by the straight-line method.
6. Breakdown of assets acquired and liabilities assumed on the acquisition dateCurrent assets:
128.057 million yen
Non-current assets:
9.649 million yen
137.707 million yen
Total assets:
Current liabilities:
Non-current liabilities:
Total liabilities:

32.774 million yen
305.398 million yen
338.172 million yen

7. Estimated effect of the business combination on the consolidated statement of income if the business combination had
been completed at the beginning of the current fiscal year
This information is omitted due to immateriality.
Asset Retirement Obligations
Asset retirement obligations included in the consolidated balance sheet
A. Summary of asset retirement obligations
Asset retirement obligations are mainly for returning leased space to its original condition in association forreal estate leasing contracts for business sites of JAST.
B. Method for calculating asset retirement obligations
Asset retirement obligations are calculated by using a period of 15 years starting from the acquisition date as
the estimated expected period of use and a discount rate of mainly 0.212%.
C. Change in asset retirement obligations
Changes in the balance of asset retirement obligations are as follows.

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Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

Beginning balance
Purchase of property, plant andequipment
Accretion
Payments for asset retirement
obligations
Increase due to change in estimate
Increase due to acquisition of
consolidated subsidiaryEnding balance(Thousand yen)
FY3/24(Apr. 1, 2023–Mar. 31, 2024)
250,789

FY3/23(Apr. 1, 2022–Mar. 31, 2023)
132,613
18,96034,863

1,933

1,923

(3,300)(11,400)

100,582(3,542)-

7,438

250,789

280,073

Rental and Other Properties
This information is omitted due to immateriality.
Revenue Recognition
1. Information on disaggregated revenue from contracts with customers
FY3/23 (Apr. 1, 2022–Mar. 31, 2023)(Thousand yen)

Industry

Reportable segment
Package
Medical big
businessdata business
3,595
-

Total

Telecommunications

DX&SI
business
3,201,315-

3,204,910

Finance/insurance

1,901,536

865,440

1,800

994

2,769,771

Service/retail

4,763,900-

383,229

1,999,236

7,146,366

Education

1,290,839

3,598,525

2,665

3,455

4,895,485

Manufacturing

2,457,389

-

2,443

667,553

3,127,386

Medical care

Globalbusiness

47-886,494251

886,793

Public sector and others
Revenue from contracts withcustomers
Other revenues

720,458

21,783

744,599

1,961

1,488,802

14,335,487

4,489,345

2,021,231

2,673,452

23,519,516

-

-

-

-

-

External sales

14,335,487

4,489,345

2,021,231

2,673,452

23,519,516

FY3/24 (Apr. 1, 2023–Mar. 31, 2024)(Thousand yen)

Telecommunications
Finance/insurance
Service/retailIndustry

Education
Manufacturing
Medical care

DX&SI
business
3,325,714

Reportable segment
Package
Medical big
businessdata business
10,949-Total

Globalbusiness-

3,336,663

833,622757,667-

1,320

1,592,610

6,116,122

14,912245,813896,789

7,273,638

849,672

4,112,264

6,000

120

4,968,057

3,120,407

14,609392,9972,454,507

5,982,522

77-

1,267,561

171

1,267,811

Public sector and others
Revenue from contracts withcustomers
Other revenues

1,005,668

23,047732,000

1,500

1,762,217

15,251,285

4,933,451

2,644,373

3,354,411

26,183,521

-

-

-

-

-

External sales

15,251,285

4,933,451

2,644,373

3,354,411

26,183,521- 83 -

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

2. Basic information in understanding revenue from contracts with customers
This information is as described in “Significant Accounting Policies in the Preparation of Consolidated Financial
Statements, 4. Accounting policies, (5) Recognition of significant revenues and expenses.”
3. Reconciliation of satisfaction of performance obligations under contracts with customers and cash flows arising fromsuch contracts, and the amount and timing of revenue expected to be recognized in the next fiscal year and thereafterarising from contracts with customers that existed at the end of the fiscal year
FY3/23 (Apr. 1, 2022–Mar. 31, 2023)(1) Balances of receivables from contracts with customers, contract assets, and contract liabilities(Thousand yen)
FY3/23
Beginning balance
Receivables from contracts with customers

Ending balance
4,604,147

5,096,724

Contract assets

929,182

1,435,660

Contract liabilities

430,851

354,018

Contract assets primarily relate to the right of JAST and its consolidated subsidiaries to unbilled consideration forcontracts where the performance obligation is fulfilled over a specified period, such as contracted software production
and relevant services. Once JAST and its consolidated subsidiaries have an unconditional right to consideration,
contract assets are reclassified to receivables from contracts with customers.
Contract liabilities primarily relate to advances received from customers for contracts where the performanceobligation is fulfilled over a specified period, such as contracted software production, maintenance and relevant
services. Contract liabilities are reversed as revenue is recognized.
Revenue recognized in FY3/23 that was included in the beginning balance of contract liabilities was 328,539 thousandyen.
(2) Transaction price allocated to the remaining performance obligations
The description of the remaining performance obligations is omitted since JAST and its consolidated subsidiaries haveno significant contracts with an original expected contractual duration of one year or more at the end of FY3/23.
FY3/24 (Apr. 1, 2023–Mar. 31, 2024)(1) Balances of receivables from contracts with customers, contract assets, and contract liabilities(Thousand yen)
FY3/24
Beginning balanceEnding balance

Receivables from contracts with customers

5,096,724

5,798,937

Contract assets

1,435,660

1,376,084

354,018

520,178

Contract liabilities

Contract assets primarily relate to the right of JAST and its consolidated subsidiaries to unbilled consideration forcontracts where the performance obligation is fulfilled over a specified period, such as contracted software production
and relevant services. Once JAST and its consolidated subsidiaries have an unconditional right to consideration,
contract assets are reclassified to receivables from contracts with customers.
Contract liabilities primarily relate to advances received from customers for contracts where the performanceobligation is fulfilled over a specified period, such as contracted software production, maintenance and relevant
services. Contract liabilities are reversed as revenue is recognized.
Revenue recognized in FY3/24 that was included in the beginning balance of contract liabilities was 283,762 thousandyen.
(2) Transaction price allocated to the remaining performance obligations
The description of the remaining performance obligations is omitted since JAST and its consolidated subsidiaries haveno significant contracts with an original expected contractual duration of one year or more at the end of FY3/24.

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Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

Segment and Other Information
Segment information
1. Overview of reportable segment
Segments used for financial reporting are JAST and its subsidiaries for which separate financial information is available
and for which the Board of Directors performs periodic studies for the purposes of determining the allocation of resourcesand evaluating performance.
The Group devises the comprehensive strategy for products and services in Japan and overseas, and has four reportablebusiness segments: DX&SI business, package business, medical big data business and global business.
The DX&SI business uses its distinctive strengths to supply a diverse array of information systems and services in a large
number of business sectors. The package business develops and sells products that use JAST’s own brands and provides
associated environment and system development services, chiefly consulting for the use of these products. The medical
big data business has several healthcare businesses that make it a one-stop source of services for the use of medical data
and business process reform at health insurance organizations. The global business develops and sells enterprise resource
planning (ERP) and human resource management (HRM) products outside Japan, provides consulting for the use of theseproducts and develops IT systems.
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 profit figures.
Inter-segment sales and transfers are based on market prices.

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Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

3. Information related to net sales, profit or loss, assets, liabilities, and other items for each reportable segment
FY3/23 (Apr. 1, 2022 – Mar. 31, 2023)
DX&SI
business

Medicalbig data
business

Packagebusiness

Globalbusiness

Total(Thousand yen)Amounts
shown onAdjustment
consolidated(Note 1)
financial(Note 2)statements(Note 3)

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

14,335,487 4,489,345
89,922

2,021,231 2,673,452 23,519,516-

23,519,516

182,390(182,390)-

2,021,231 2,723,765 23,701,906(182,390)

23,519,516

42,155

14,425,409 4,531,501

Segment profit

2,078,787 1,250,729

Segment assets

8,087,574 3,551,540

457,10750,312

4,057,641(1,671,973)

2,385,668

1,639,504 2,126,797 15,405,417

271,017

2,008,379

17,413,797

Other items
Depreciation
61,30527,621
19,21454,400
162,541
162,541
Increase in property, plant and
41,63519,03429,85532,268
122,793
122,793equipment and intangible assets
Notes:
1. Segment profit in the above adjustment represents corporate expenses. These corporate expenses mainly include generaland administration expenses that cannot be attributed to any of 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 is adjusted with operating profit shown on the consolidated statement of income.
FY3/24 (Apr. 1, 2023 – Mar. 31, 2024)
DX&SI
business

Medicalbig data
business

Packagebusiness

Globalbusiness

Total(Thousand yen)Amounts
shown onAdjustment
consolidated(Note 1)
financial(Note 2)statements(Note 3)

Net sales
1. External sales

15,251,285 4,933,451

2. Inter-segment sales and transfers
Total

127,579

2,644,373 3,354,411 26,183,521-

26,183,521

206,086(206,086)-

2,646,943 3,424,531 26,389,607(206,086)

26,183,521

5,817

15,378,864 4,939,268

Segment profit

2,250,991 1,383,294

Segment assets

8,838,361 3,992,196

2,570
686,468

70,1204,722,930(1,931,764)

2,791,166

2,602,764 2,382,183 17,815,505

402,176

2,207,188

20,022,694

Other items
Depreciation
80,67432,79026,31056,393
196,168
196,168
Increase in property, plant and
305,140
116,918
59,55244,060525,672
525,672
equipment and intangible assets
Notes:
1. Segment profit in the above adjustment represents corporate expenses. These corporate expenses mainly include generaland administration expenses that cannot be attributed to any of 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 is adjusted with operating profit shown on the consolidated statement of income.

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Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

Related information
FY3/23 (Apr. 1, 2022 – Mar. 31, 2023)
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(Thousand yen)OverseasJapan
20,831,987

Total
2,687,528

23,519,516(2) Property, plant and equipment(Thousand yen)Overseas

Japan

Total

579,246

52,747

631,994

3. Information by major client(Thousand yen)
Business segment

Net sales

Company name2,102,664

NTT COMWARE CORPORATION

DX&SI business

FY3/24 (Apr. 1, 2023 – Mar. 31, 2024)
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(Thousand yen)OverseasJapan
22,821,428

Total
3,362,092

26,183,521(2) Property, plant and equipment(Thousand yen)Overseas

Japan

Total

868,300

196,9211,065,222

3. Information by major client(Thousand yen)
Business segment

Net sales

Company name2,197,223

NTT COMWARE CORPORATION

DX&SI businessInformation related to impairment losses of non-current assets for each reportable segment
FY3/23 (Apr. 1, 2022 – Mar. 31, 2023)
Not applicable.
FY3/24 (Apr. 1, 2023 – Mar. 31, 2024)
Not applicable.
Information related to goodwill amortization and the unamortized balance for each reportable segment
FY3/23 (Apr. 1, 2022 – Mar. 31, 2023)
DX&SI
business(Thousand yen)
Packagebusiness

Medical big
data business

Amortization for the period--

Elimination or
Global businesscorporate
23,599-Balance at end of period

-

-

-

- 87 -

88,499-Total
23,59988,499Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

FY3/24 (Apr. 1, 2023 – Mar. 31, 2024)
DX&SI
business(Thousand yen)
Packagebusiness

Medical big
data business

Amortization for the period--

Balance at end of period--

Elimination or
Global businesscorporate
24,203-

200,466

66,560-

Total
24,203
267,027

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

Per-share Information

Net assets per share

FY3/23(Apr. 1, 2022 – Mar. 31, 2023)
439.03(Yen)
FY3/24(Apr. 1, 2023 – Mar. 31, 2024)
516.08

Earnings per share
72.25
85.08
Notes: 1. Diluted earnings per share is not presented since JAST has no outstanding dilutive securities.
2. JAST conducted a 2-for-1 common stock split on April 1, 2024.
Net assets per share and earnings per share have been calculated as if this stock split has taken place at the beginning of the
fiscal year ended March 31, 2023.
3. The basis of calculation is as follows.
(Thousand yen)
FY3/23
FY3/24(As of Mar. 31, 2023)(As of Mar. 31, 2024)
Net assets per share
10,816,240

12,712,107

Deduction on total net assets

47,46353,533(Non-controlling interests)(47,463)(53,533)

10,768,776

12,658,574

24,528,384 shares

24,528,152 shares

Total net assets on balance sheet

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

FY3/23(Apr. 1, 2022 – Mar. 31, 2023)(Thousand yen)
FY3/24(Apr. 1, 2023 – Mar. 31, 2024)

Earnings per share
1,772,210

Profit attributable to owners of parent

2,086,939

Amount not available to common shareholders
Profit attributable to owners of parent applicable to1,772,210
2,086,939
common shares
Average number of shares outstanding during period
24,528,584 shares
24,528,214 shares
Note: JAST has established a new Board Benefit Trust (BBT). The JAST stock remaining in the BBT (298,400 shares as of March
31, 2023 and 298,400 shares as of March 31, 2024) is included in treasury shares in shareholders’ equity and deducted fromthe number of shares outstanding at the end of the period that is used to calculate net assets per share. Moreover, the BBT
shares (298,400 shares as of March 31, 2023 and 298,400 shares as of March 31, 2024) are included in treasury shares deductedfrom the number of shares used to calculate the average number of shares outstanding during the period that is used to calculateearnings per share.

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Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

Subsequent Events
Following the resolution approved by the Board of Directors meeting held on February 29, 2024, JAST implemented astock split and has made an associated revision to the Articles of Incorporation.
1. Stock split(1) Purpose of stock split
The purpose of the stock split is to make investment easier for investors by reducing the value of JAST’s investment unit,
thereby expanding the investor base and increasing the liquidity of its shares.
(2) Method of stock split
Shareholders listed in the final shareholder register on the record date of March 31, 2024 have received two shares ofcommon stock for each share held on the record date.
(3) Number of shares increased by the stock split
Total number of shares issued prior to the stock split:
Number of shares increased by the stock split:
Total number of shares issued following the stock split:
Total number of authorized shares following the stock split:

12,418,460 shares
12,418,460 shares
24,836,920 shares
64,000,000 shares(4) Schedule
Public notice of record date:
Record date:
Effective date:

March 15, 2024
March 31, 2024
April 1, 2024

2. Partial revision to the Articles of Incorporation following the stock split(1) Reason for the revision
In association with this stock split, the JAST Articles of Incorporation was partially amended on April 1, 2024 inaccordance with Article 184, Paragraph 2 of the Companies Act.
(2) Details of the revision (Underlined parts are revised.)
Current
Article 6: (Total Number of Shares Authorized)
The total number of shares authorized to be issued by theCompany shall be 32,000,000 shares.

After revision
Article 6: (Total Number of Shares Authorized)
The total number of shares authorized to be issued by theCompany shall be 64,000,000 shares.

(3) Effective date
April 1, 2024

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Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024(ⅴ) Annexed consolidated detailed schedules
Annexed consolidated detailed schedule of corporate bonds
Not applicable.
Annexed consolidated detailed schedule of borrowings

Item

Balance as ofApr. 1, 2023

Current portion of long-termborrowings
Current portion of lease liabilities
Long-term borrowings (excluding
current portion)
Lease liabilities (excluding current
portion)
Other interest-bearing debt
Total

(Thousand yen, unless otherwise stated)
Average
Repayment dueinterest rate
(Year)(%)

Balance as ofMar. 31, 2024-

12,4801.2-

17,21830,942---65,9601.22026 to 2032

23,14392,781-2026 to 2030

-

-

-

-

40,362

202,164--

Notes: 1. The average interest rate on lease liabilities is not presented because lease liabilities are recorded on the consolidatedbalance sheet at the amount before deducting the amount equivalent to interest included in the total lease payments.
2. The repayment schedule within five years after the consolidated balance sheet date of long-term borrowings (excluding
current portion) and lease liabilities (excluding current portion) is as follows.
(Thousand yen)

Long-term borrowings
Lease liabilities

Over 1 year
to 2 years
11,100Over 2 years
to 3 years
11,100Over 3 years
to 4 years
11,100Over 4 years
to 5 years
11,10023,597

20,648

17,684

16,827

Over 5 years
21,56014,022Annexed consolidated detailed schedule of asset retirement obligations
This information is omitted because the items to be presented in this schedule are presented as notes stipulated in Article
15-23 of the Regulation on Consolidated Financial Statements.

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Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

(2) Other Information
Quarterly results for the fiscal year ended March 31, 2024
(Cumulative period)
Net salesFirst three months First six months(Thousand yen, unless otherwise stated)
First nine months Current fiscal year

5,640,211

12,132,581

18,527,947

26,183,521

Profit before income taxes

134,440

1,008,926

1,648,323

2,861,415

Profit attributable to owners of parent

61,902651,258

1,099,120

2,086,939

2.52

26.55

44.81

85.08

Second Quarter

Third Quarter

Fourth Quarter

24.03

18.26

40.27

Earnings per share (Yen)(Accounting period)
Earnings per share (Yen)First Quarter
2.52- 91 -

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

2. Non-consolidated Financial Statements, etc.
(1) Non-consolidated Financial Statements
i. Non-consolidated Balance Sheet(Thousand yen)
FY3/24(As of Mar. 31, 2024)

FY3/23(As of Mar. 31, 2023)
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade, and contract
assetsMerchandise and finished goods

4,896,049*1

5,221,967

Work in process
Raw materials and supplies

5,766,061*1

5,577,243

128,353

120,981

44,662

23,384

8,118

Prepaid expenses*1

110,684

3,916*1

120,300

Accounts receivable-other

*1

8,686

*1

8,721

Other

*1

12,638*1

15,388

Allowance for doubtful accounts
Total current assets(3,655)(4,148)

10,427,505

11,631,849

328,636594,965

Non-current assets
Property, plant and equipment
Buildings
Structures

5,844

5,396

Tools, furniture and fixtures

84,341

110,885Land

142,361

142,361

1,066-

562,250

853,609

Software75,053

156,238

Telephone subscription right

6,180

6,180

Total intangible assets

81,233

162,418

Construction in progress
Total property, plant and equipment
Intangible assets

Investments and other assets
Investment securities
Shares of subsidiaries and associates
Investments in capital of subsidiaries andassociates
Long-term loans receivable from subsidiaries andassociates
Prepaid pension cost

544,683

577,163

2,183,505

2,185,706

75,95345,218142,567

386,392

570,660

594,717

Deferred tax assets

489,358

512,993

Guarantee deposits

399,890

458,494

Insurance funds

64,98761,883

Other

4,126

178,044

Allowance for doubtful accounts(42,435)(300,580)

Total investments and other assets

4,433,299

4,700,034

5,076,783

5,716,062

15,504,289

17,347,911

Total non-current assets
Total assets- 92 -

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

FY3/23(As of Mar. 31, 2023)(Thousand yen)
FY3/24(As of Mar. 31, 2024)

Liabilities
Current liabilities
Accounts payable-trade*1

916,555

Accounts payable-other*1

166,452*1*1

1,094,648

Accrued expenses*1

296,437*1

188,887359,795

Income taxes payable

439,120489,976

Accrued consumption taxes

194,372

261,943

Contract liabilities

262,549

351,786

1,167,316

1,204,050

35,02537,983

6,801

14,510

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

*1

Total current liabilities
Non-current liabilities
Provision for share awards for directors (andother officers)
Provision for retirement benefits

104,555*1

138,7543,589,185

4,142,336

141,759

155,990991,918

973,168

Asset retirement obligations

223,887

260,308

Long-term accounts payable-other343,188368,601

Other

12,217

7,162

1,712,971

1,765,230

5,302,157

5,907,567

1,535,409

1,535,409

Legal capital surplus

1,497,047

1,497,047

Other capital surplus

250,404

250,404

Total capital surpluses

1,747,452

1,747,452

32,66532,665General reserve

5,207,000

6,400,000

Retained earnings brought forward

1,718,193

1,742,389

6,957,858

8,175,054(175,703)(175,947)

10,065,017

11,281,968

137,114

158,376

137,114

158,376

10,202,132

11,440,344

15,504,289

17,347,911

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

Retained earnings
Legal retained earnings
Other retained earnings

Total retained earnings
Treasury shares
Total shareholders’ equity
Valuation and translation adjustments
Valuation difference on available-for-salesecurities
Total valuation and translation adjustments
Total net assets
Total liabilities and net assets- 93 -

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

ii.

Non-consolidated Statements of Income
FY3/23(Apr. 1, 2022 – Mar. 31, 2023)(Thousand yen)
FY3/24(Apr. 1, 2023 – Mar. 31, 2024)

Net sales*2

18,552,222*2

20,431,311

Cost of sales*2

13,733,626*2

14,982,940

Gross profit
Selling, general and administrative expenses

4,818,595

5,448,370*1, *2 3,017,008*1, *2 3,350,961

1,801,586

2,097,409

Operating profit
Non-operating income
Interest and dividend income*2254,292*2

292,643

Rental income

3,086

3,155

Commission income

2,097

2,108

Interest on securities

2,400

2,400

-

14,700Insurance claim income
Reversal of allowance for doubtful accounts

61,988

5,771

Subsidy income

9,843

16,601

Foreign exchange gains

6,377

13,532

Other

2,770

2,297

342,856

353,2099,470

263,916

Total non-operating income
Non-operating expenses
Provision of allowance for doubtful accounts
Commission expenses
Other
Total non-operating expenses
Ordinary profit
Extraordinary losses
Loss on valuation of investments in capital ofsubsidiaries and associates

753

762

0

1,219

10,223

265,897

2,134,219

2,184,722-

Total extraordinary losses
Profit before income taxes*330,735-30,735

2,134,219

2,153,986

Income taxes-current

488,416

572,581

Income taxes-deferred

15,340(33,018)

Total income taxes
Profit- 94 -

503,757

539,562

1,630,462

1,614,423

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

iii. Non-consolidated Statement of Changes in Equity
FY3/23 (Apr. 1, 2022 – Mar. 31, 2023)(Thousand yen)
Shareholders’ equity
Capital surplus

SharecapitalRetained earnings
Other retained earnings

Legal
capitalsurplus

OthercapitalsurplusTotal
capitalsurplusLegalretainedearnings

Balance at beginning of period 1,535,409 1,497,047

250,404

1,747,452

32,665Generalreserve

Retained earnings
brought forward

Total
retainedearnings

4,313,000

1,230,005

5,575,670

894,000(894,000)-

Dividends of surplus(248,274)(248,274)

Profit1,630,462

1,630,462

Changes during period
Provision of general reserve

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

-

-

-

-

-

894,000

488,187

1,382,187

1,535,409 1,497,047

250,404

1,747,452

32,6655,207,000

1,718,193

6,957,858

Shareholders’ equity

Valuation and translation adjustments

Valuation difference
Total shareholders’
Treasury shareson available-for-sale
equitysecurities
Balance at beginning of period(175,264)

8,683,268

121,768

Total valuationand translation
adjustments

Total
net assets

121,768

8,805,037

Changes during period
Provision of general reserve--

Dividends of surplus(248,274)(248,274)

Profit1,630,462

1,630,462

(439)

(439)

Purchase of treasury shares
Net changes in items otherthan shareholders’ equity
Total changes during period
Balance at end of period(439)

15,346

15,346

15,346(439)

1,381,748

15,346

15,346

1,397,094(175,703)

10,065,017

137,114137,114

10,202,132- 95 -

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

FY3/24 (Apr. 1, 2023 – Mar. 31, 2024)(Thousand yen)
Shareholders’ equity
Capital surplus

SharecapitalRetained earnings
Other retained earnings

Legal
capitalsurplus

OthercapitalsurplusTotal
capitalsurplusLegalretainedearnings

Balance at beginning of period 1,535,409 1,497,047

250,404

1,747,452

32,665Generalreserve

Retained earnings
brought forward

Total
retainedearnings

5,207,000

1,718,193

6,957,858

1,193,000(1,193,000)-

Changes during period
Provision of general reserve
Dividends of surplus(397,228)(397,228)

Profit

1,614,423

1,614,423

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

-

-

-

-

-

1,193,000

24,1951,217,195

1,535,409 1,497,047

250,404

1,747,452

32,6656,400,000

1,742,389

8,175,054

Shareholders’ equity
Treasury shares
Balance at beginning of period(175,703)

Valuation and translation adjustments

Valuation difference
Total shareholders’on available-for-sale
equitysecurities
10,065,017

137,114

Total valuationand translation
adjustments

Total
net assets

137,114

10,202,132

Changes during period
Provision of general reserve
Dividends of surplus
ProfitPurchase of treasury shares
Net changes in items otherthan shareholders’ equity
Total changes during period
Balance at end of period

(244)

-

-

(397,228)(397,228)

1,614,423

1,614,423

(244)

(244)
21,261

21,261

21,261(244)

1,216,951

21,261

21,2611,238,212(175,947)

11,281,968

158,376

158,376

11,440,344- 96 -

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

Notes to Non-consolidated Financial Statements
Significant Accounting Policies
1. Valuation standards and methods for assets(1) Valuation standards and methods for marketable securities(ⅰ) Subsidiaries’ stocks
Stated at cost determined by the moving-average method.
(ⅱ) Held-to-maturity debt securities
Stated at cost determined by the amortized cost method (straight-line method).
(ⅲ) Available-for-sale securities- Securities other than shares, etc. that do not have a market priceStated at fair value. (Unrealized gain or loss is included in net assets. Cost of securities sold is determined by themoving-average method.)- Shares, etc. that do not have a market priceStated at cost determined by the moving-average method.
(2) Valuation standards and methods for inventories(ⅰ) MerchandiseStated at cost determined by the specific identification method. (The carrying amount on the balance sheet is written
down to reflect the effect of lower profit margins.)(ⅱ) Finished goods
Stated at cost determined by the periodic average method. (The carrying amount on the balance sheet is written
down to reflect the effect of lower profit margins.)(ⅲ) Work in process
Stated at cost determined by the specific identification method. (The carrying amount on the balance sheet is written
down to reflect the effect of lower profit margins.)(ⅳ) Supplies
Valued by the last purchased price method.
2. Depreciation and amortization of non-current assets(1) Property, plant and equipment (excluding leased assets)
The declining-balance method, except for facilities attached to buildings and structures acquired on or after April 1,
2016, on which depreciation is calculated by the straight-line method.
Useful lives 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(ⅰ) Lease assets associated with finance lease transactions where there is transfer of ownership
Depreciated by the same method as depreciation method used for non-current assets held by the Company.
(ⅱ) Lease assets associated with finance lease transactions where there is no transfer of ownership
Depreciated by the straight-line method, assuming the lease period to be the useful life and a residual value of zero.
3. 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 are provided for general receivables based on the historical write-off ratio, and bad receivables based on- 97 -

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

case-by-case determination 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 and plan 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 acertain period (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 period (10 years) within the
average length of remaining service period of employees from the year when it is recognized.
(4) Provision for bonuses for directors (and other officers)
To provide for bonuses for directors (and other officers), an allowance is provided in the amount equal to the estimatedbonus obligations in the current fiscal year.
(5) Provision for share awards for directors (and other officers)
To provide for the payment of JAST’s shares to its directors (and other officers) in accordance with the rules on thestock compensation plan for directors (and other officers), an allowance is provided based on the estimatedobligations for share awards in the current fiscal year.
(6) Provision for loss on construction contracts
To prepare for future losses on construction contracts, such as contracted software production and development, anallowance is provided for estimated losses on contracts for which losses are expected to be incurred in the next fiscal
year or later and the amount can be reasonably estimated.
4. Recognition of revenues and expenses
The nature of the main performance obligations related to revenue from contracts with customers in the major
businesses of JAST and the timing when those performance obligations are typically satisfied (when revenue istypically recognized) are as follows.
JAST has four business segments: DX&SI business, Package business, Medical big data business, and Global
business. JAST recognizes revenue from contracts with customers mainly for contracted software production,
maintenance and relevant services. For contracts where the performance obligation is fulfilled over a specified period,
the progress of fulfilling the performance obligation is estimated, except when the period is extremely short, andrevenue based on the progress is recognized for that period. The progress is determined mainly by the input method
based on the ratio of the actual costs incurred to the estimated total construction cost (the cost-to-cost basis). For
contracts where the performance obligation is fulfilled at a point in time, such as the sale of products, revenue isrecognized at the point in time when the customer accepts the products.
For transactions, such as the sale of products, where JAST functions as an agent, the amount paid to the supplier ofthe product is deducted from the total payment received from the customer and the resulting net amount is recognized
as revenue.
5. Other significant accounting policies in the preparation of non-consolidated financial statements(1) Accounting method for retirement benefits
Accounting method for outstanding balance of unrecognized actuarial differences and unrecognized prior service
costs related to retirement benefit is different from those for the consolidated financial statements.

- 98 -

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

Significant Accounting Estimates
1. Estimate of total construction cost for revenue recognition over a specified period based on progress(1) Amounts recorded in the non-consolidated financial statements for the current fiscal year
(Thousand yen)
FY3/23
Net sales from revenue recognized overa specified period based on progress

FY3/24
1,844,911

1,379,496(2) Other information that contributes to the understanding of accounting estimates
For contracts where the performance obligation is fulfilled over a specified period, such as contracted software
production and relevant services, net sales are recorded by recognizing revenue based on the progress for that period.
Net sales from revenue recognized over a specified period based on progress are calculated by multiplying the total
construction revenue by the progress. The progress is determined by the input method based on the ratio of the actual
costs incurred by the end of the current fiscal year to the estimated total construction cost (the cost-to-cost basis).
The total construction cost based on incurred costs is estimated by using the number of man-hours required for thework in consideration of its individualized nature, such as the specifications and work period of contracted software
production and relevant services.
In the event that the estimate of man-hours requires a significant revision, the change in estimate of the total
construction cost due to the revision may have a material impact on the non-consolidated financial statements for thefollowing fiscal year.
Reclassifications
Not applicable.
Changes in Accounting-based Estimates
Not applicable.

- 99 -

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

Additional Information
Board Benefit Trust (BBT)
Based on the resolution of the 46th Annual General Meeting of Shareholders, JAST on June 26, 2018 terminated the
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 amount equivalent to the market value of the stockin lieu of stock compensation in accordance with the rules on the stock compensation plan for directors. In principle, adirector becomes eligible for stock compensation only after the individual 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 298,400 shares of JAST with a book value of 171,700
thousand yen as of the end of the previous fiscal year, and held 298,400 shares with a book value of 171,700 thousand
yen as of the end of the current fiscal year.
Note: JAST conducted a 2-for-1 common stock split on April 1, 2024. The number of shares has been calculated as if this stock split
has taken place at the beginning of the fiscal year ended March 31, 2023.

Notes to Balance Sheet*1 Monetary claims and monetary liabilities to affiliates (excluding those separately presented)(Thousand yen)
FY3/24(As of Mar. 31, 2024)

FY3/23(As of Mar. 31, 2023)

2

Short-term monetary claims

61,29739,628

Short-term monetary liabilities

130,927

147,334

Guarantee liabilities
Guarantees for affiliate’s bank loans(Thousand yen)
FY3/24(As of Mar. 31, 2024)

FY3/23(As of Mar. 31, 2023)
NewNeeds Co., Ltd.

70,00070,000JAST guarantees the overdraft contract that NewNeeds Co., Ltd. has entered into with financial institutions, and theamount of the overdraft line of credit is shown in the above table.
3 JAST 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.
(Thousand yen)
FY3/24(As of Mar. 31, 2024)

FY3/23(As of Mar. 31, 2023)
Commitment line

500,000

Credit used
Credit available- 100 -

500,000--

500,000

500,000

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

Notes to Statement of Income*1 Selling expenses represent approximately 26% of the total selling, general and administrative expenses, and generaland administrative expenses approximately 74% in FY3/23, and selling expenses represent approximately 34% of
the total selling, general and administrative expenses, and general and administrative expenses approximately 66%
in FY3/24.
Major items of selling, general and administrative expenses
FY3/23(Apr. 1, 2022–Mar. 31, 2023)
Compensations for directors (andother officers)
Wages, sales and other allowances(Thousand yen)
FY3/24(Apr. 1, 2023–Mar. 31, 2024)

177,115

209,344

1,090,069

1,117,642

Provision for bonuses
Provision for bonuses for directors(and other officers)
Retirement benefit expenses
Stock compensation expenses for
directors (and other officers)
Depreciation

184,630

186,82935,02537,98347,55847,473

21,031

14,23065,20689,190Research and development expenses

469,246

353,128

Rent expenses

135,554

141,176*2 Transactions with subsidiaries and affiliates
FY3/23(Apr. 1, 2022–Mar. 31, 2023)(Thousand yen)
FY3/24(Apr. 1, 2023–Mar. 31, 2024)

Amount of business transactions
Net sales

109,613

91,731

Operating expenses

749,592

792,803245,345

283,228

Amount of non-business transactions*3 Loss on valuation of investments in capital of subsidiaries and associates
This is related to Shanghai Jiafeng Information Technology Co., Ltd., a consolidated subsidiary of JAST.
Marketable Securities
Shares of subsidiaries (carrying amount of 2,183,505 thousand yen and 2,185,706 thousand yen in FY3/23 and FY3/24,
respectively) are not presented because they are shares, etc. that do not have a market price.

- 101 -

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

Tax Effect Accounting
1. Significant components of deferred tax assets and liabilities
FY3/23(As of Mar. 31, 2023)(Thousand yen)
FY3/24(As of Mar. 31, 2024)

Deferred tax assets
Provision for bonuses

357,432

368,680

Accrued expenses

50,46752,985808

2,783

Accrued business office taxes

35,31038,600

Provision for loss on construction contracts

2,082

4,443

Long-term accounts payable-other
Provision for share awards for directors (andother officers)
Provision for retirement benefits

104,786

112,865

43,40647,764

303,725

297,984

Allowance for doubtful accounts

14,11293,307

Asset retirement obligations

71,97179,706

Shares of subsidiaries and associates

463,427

472,839

Accounts payable-other32,17834,961

Subtotal deferred tax assets

Other

1,479,711

1,606,921

Less valuation allowance(707,675)(793,615)

772,036

813,305

60,51369,897

174,736

182,10247,42748,311

282,677

300,311489,358

512,993

Total
Deferred tax liabilities
Valuation difference on available-for-salesecurities
Prepaid pension cost
Other
Total
Net deferred tax assets

2. Significant sources of differences between the statutory tax and effective tax rate
FY3/23(As of Mar. 31, 2023)

FY3/24(As of Mar. 31, 2024)

Statutory tax rate

30.6 %

30.6 %(Adjustments)
Permanent difference of entertainment expenses
and other items
Residential tax for the period

(2.6)

(3.1)

0.3

0.3

Increase (decrease) in valuation allowance

1.6

4.0

Tax credit

(6.3)

(7.1)

Others(0.0)

0.4

Effective tax rate

23.6

25.0

- 102 -

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

Business Combinations
This information is not presented because it is the same as described in “(Business Combinations)” in the Notes toConsolidated Financial Statements.
Revenue Recognition
Basic information in understanding revenue from contracts with customers is not presented because it is the same as
described in “(Revenue Recognition)” in the Notes to Consolidated Financial Statements.
Subsequent Events
This information is not presented because it is the same as described in “(Subsequent Events)” in the Notes toConsolidated Financial Statements.

- 103 -

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024(ⅳ) Annexed non-consolidated detailed schedules
Annexed detailed schedule of property, plant and equipment, etc.

Item

Type of assets(Thousand yen)
Accumulated
Depreciation
Balance as of depreciation
orMar. 31, 2024oramortizationamortization

Balance as ofApr. 1, 2023

Increase

328,636

332,447

066,119594,965585,982

5,844

-

-

448

5,396

2,434

84,34164,138037,594

110,885

371,825

142,361---

142,361

-

1,066

-

1,066

-

-

-

562,250

396,585

1,066

104,161

853,609960,24275,053

106,790-

25,605

156,238

-

6,180

-

-

-

6,180

-

81,233

106,790-

25,605

162,418-

Decrease

Property, plantand equipment
Buildings
Structures
Tools, furniture andfixtures
Land
Construction inprogress
Total property, plantand equipment
Intangible
assetsSoftwareTelephone subscription
rightTotal intangible assets

Annexed detailed schedule of provisions
Account
Allowance for doubtful
accounts
Provision for bonuses
Provision for bonuses for
directors (and other officers)
Provision for loss on
construction contracts
Provision for retirement
benefits
Provision for share awards for
directors (and other officers)

Balance as ofApr. 1, 2023

Increase(Thousand yen)
Balance as ofMar. 31, 2024

Decrease

46,090268,064

9,426

304,728

1,167,316

1,204,050

1,167,316

1,204,050

35,02537,98335,02537,983

6,801

14,5106,801

14,510991,918

99,826

118,576

973,168

141,759

14,230-155,990(2) Components of major assets and liabilities
This information is omitted because the Group has prepared the consolidated financial statements.
(3) Other information
Not applicable.

- 104 -

Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

Ⅵ. Outline of Share-related Administration of Reporting Company
Fiscal year

April 1 to March 31

Annual General Meeting of
Shareholders

June

Record date

March 31

Record date of dividends ofsurplusNumber of sharesconstituting one unit
Acquisition of odd-lot
shares

September 30
March 31

Handling office
Shareholder register
administrator

100 shares(Special account)
4-5-33 Kitahama, Chuo-ku, Osaka
Stock Transfer Agency Business Planning Department, Sumitomo Mitsui Trust Bank, Limited(Special account)
1-4-1, Marunouchi, Chiyoda-ku, Tokyo
Sumitomo Mitsui Trust Bank, Limited

AgencyAcquisition fee

Method of public notice───────
Separately specified amount equivalent to share trading brokerage fees
JAST posts electronic public notices on its website; when an electronic public notice cannot be
used due to an accident or any other unavoidable reason, the notice will be placed in The Nihon
Keizai Shimbun.
The JAST website
https://www.jast.jp/en/
Shareholders of record on March 31 of every fiscal year who own at least 600 shares (six units)of JAST stock are eligible to receive the following special benefit.
Based on the number of shares held and the length of the shareholding, shareholders can selectsocially and environmentally responsible products, food products, household products,
experiences, money for a charitable donation, or other items in JAST’s gift catalog.

Special benefits forshareholders

Shareholder benefits
Shareholders with a holding
Shareholders with a holding
period of under three years
period of at least three years (note)
600 to 999
Worth 3,000 yen
Worth 5,000 yen
1,000 or more
Worth 7,000 yen
Worth 12,000 yen
Note: A holding period of at least three years is defined as a shareholder in the shareholder
register as of March 31 and September 30 for at least seven consecutive six-month periods withthe same shareholder number.
Number ofshares held

Notes: 1. In accordance with the JAST’s Articles of Incorporation, a shareholder holding odd-lot shares does not have any rights
other than those listed below:(1) Rights listed in every item of Article 189, Paragraph 2 of the Companies Act;
(2) Rights to make a request pursuant to the provisions of Article 166, Paragraph 1 of the Companies Act; and(3) Rights to receive allotment of shares for subscription and allotment of share acquisition rights for subscription in
proportion to the number of shares held.
2. The shareholder benefit program may be revised or terminated due to changes in results of operations, JAST’s policy
regarding these benefits or some other reason.

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Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

Ⅶ. Reference Information of Reporting Company
1. Information about Parent of Reporting Company
Not applicable, because JAST does not have a parent company.
2. Other Reference Information
From the beginning of the current fiscal year until the filing date of this Annual Securities Report, JAST has filed thefollowing documents:(1) Annual Securities Report and attached document thereof and Confirmation Letter
Filed for the 51st fiscal year ended March 31, 2023 (from April 1, 2022 to March 31, 2023) with the Director-Generalof the Kinki Local Finance Bureau on June 29, 2023.
(2) Internal Control Report and attached document thereof
Filed with the Director-General of the Kinki Local Finance Bureau on June 29, 2023.
(3) Quarterly Reports and Confirmation Letter
Filed for the first quarter (from April 1 to June 30, 2023) of the 52nd fiscal year ended March 31, 2024 with the
Director-General of the Kinki Local Finance Bureau on August 14, 2023.
Filed for the second quarter (from July 1 to September 30, 2023) of the 52nd fiscal year ended March 31, 2024 with
the Director-General of the Kinki Local Finance Bureau on November 13, 2023.
Filed for the third quarter (from October 1 to December 31, 2023) of the 52nd fiscal year ended March 31, 2024 with
the Director-General of the Kinki Local Finance Bureau on February 14, 2024.
(4) Extraordinary Report
Filed the Extraordinary Report pursuant to the provisions of Article 19, Paragraph 2, (ix)-2 of the Cabinet Office
Order on Disclosure of Corporate Affairs (resolutions made at the General Meeting of Shareholders) with the
Director-General of the Kinki Local Finance Bureau on June 29, 2023.

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Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

Section 2. Information about Reporting Company’s Guarantor, etc.
Not applicable.

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Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

Independent Auditor’s Report and Internal Control Audit Report
June 25, 2024
To the Board of Directors ofJapan System Techniques Co., Ltd.

Deloitte Touche Tohmatsu LLCOsaka office
Designated Limited Liability Partner,
Engagement Partner,
Certified Public Accountant:

Ikutoshi Senzaki

Designated Limited Liability Partner,
Engagement Partner,
Certified Public Accountant:

Hideya Sudo

Audit of Consolidated Financial Statements
Audit Opinion
Pursuant to the provisions of Article 193-2, Paragraph 1 of the Financial Instruments and Exchange Act, we have audited
the consolidated financial statements of Japan System Techniques Co., Ltd. (the “Company”) and its consolidated
subsidiaries (the “Group”) provided in the “Financial Information” section in the Company’s Annual Securities Report,
namely, the consolidated balance sheet as of March 31, 2024, and the consolidated statement of income, consolidated
statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows
for the fiscal year from April 1, 2023 to March 31, 2024, and the notes to significant accounting policies in the preparationof consolidated financial statements and other notes and the annexed consolidated detailed schedules.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial
position of the Group as of March 31, 2024, and its consolidated financial performance and cash flows for the fiscal year
then ended in accordance with accounting principles generally accepted in Japan.
Basis for Audit Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibilities underthose standards are further described in the “Auditor’s Responsibilities for the Audit of the Consolidated Financial
Statements” section of our report. We are independent of the Group in accordance with the provisions of the Code ofProfessional Ethics in Japan, and we have fulfilled our other ethical responsibilities as auditors. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of theconsolidated financial statements of the current fiscal year. Those matters were addressed in the context of our audit of
the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters.

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Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

Estimate of total construction cost for revenue recognition over a specified period based on progress
Key audit matter description

How the key audit matter was addressed in the audit

As described in “Significant Accounting Policies in the
Preparation of Consolidated Financial Statements, 4.
Accounting policies, (5) Recognition of significant revenues
and expenses” and “Significant Accounting Estimates, 1.
Estimate of total construction cost for revenue recognition overa specified period based on progress” in the Notes toConsolidated Financial Statements, the Company records net
sales for contracts where the performance obligation is fulfilledover a specified period, such as contracted software production
and relevant services, which are the Company’s major
businesses, by estimating the progress of fulfilling theperformance obligation and recognizing revenue based on the
progress for that period. Net sales for the current fiscal year
amounted to 26,183,521 thousand yen, of which 1,408,009
thousand yen was from revenue recognized over a specified
period based on progress.
Net sales from revenue recognized over a specified period basedon progress are calculated by multiplying the total construction
revenue by the progress. The progress is determined by the input
method based on the ratio of the actual costs incurred by the endof the current fiscal year to the estimated total construction cost(the cost-to-cost basis). Contracted software production andrelevant services, mainly including a contracted system
integration service, are of highly individualized nature, such as
due to different specifications and work periods. Any revisions
to specifications after the start of contracted software
production and relevant services may change the man-hours
required for the work. Therefore, in estimating the total
construction cost, which is the basis for net sales from revenue
recognized over a specified period based on progress, it isnecessary to update the estimate of the number of man-hours
required to complete the work in a timely manner, andappropriate estimates require management’s judgment.
Given the above, we considered the estimate of total
construction cost for revenue recognition over a specified
period based on progress in contracted software production andrelevant services to be of particular importance and determined
this matter as a key audit matter.

Our audit procedures related to the estimate of total construction
cost for revenue recognition over a specified period based onprogress included the following, among others:• We examined the effectiveness of the development andoperation of internal controls over the estimate of total
construction cost.
• We compared the total construction cost in the previous fiscal
year and the actual costs incurred in the current fiscal year for
projects to which progress-based revenue recognition wasapplied in the previous fiscal year to examine the accuracy ofthe estimate of total construction cost.
• After questioning each business head manager and reviewing
monthly management meeting minutes, monthly reports andother documents to determine whether there were any projects
that would require revisions to the original estimates, wequestioned the managers of projects concerned and reviewed
relevant documents pertaining to the progress of the projects
to ensure that the total construction cost was reviewed in atimely manner.
• We compared the original estimate of total construction costwith the actual costs incurred, questioned the managers ofprojects concerned about the factors contributing to thediscrepancies for projects with large discrepancies, andreviewed relevant documents related to the progress, to ensurethat the revised estimate of total construction cost has been
updated appropriately.
• We analyzed the cost accruals of significant projects to which
net sales were recorded by recognizing revenue over a
specified period based on progress, from the perspectives suchas whether there were any projects with cost accruals that were
not initially anticipated. For projects concerned, wequestioned the managers of the projects concerned and, if
necessary, performed additional procedures to examine theappropriateness of the cost accruals.
• Net sales from revenue recognized over a specified period
based on progress were reconciled with the contract and costcalculation documents for estimating the total construction
cost, and recalculated on the cost to cost basis.

Other Information
Other information included in the Annual Securities Report is information other than the consolidated financial statements
and non-consolidated financial statements and their audit reports. Management is responsible for preparing and disclosing
the other information. In addition, the Audit & Supervisory Committee is responsible for overseeing the performance of
directors concerning the development and operation of the reporting process for the other information.
Our audit opinion on the consolidated financial statements does not cover the other information, and we do not express
any form of assurance conclusion thereon.
Our responsibility in the audit of the consolidated financial statements is to read the other information and, in doing so,
consider whether the other information is materially inconsistent with the consolidated financial statements or our
knowledge obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, weare required to report that fact.
We have nothing to report in this regard.
Responsibilities of Management and the Audit & Supervisory Committee for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordancewith accounting principles generally accepted in Japan, and for the development and operation of such internal controls
as management determines necessary to enable the preparation and fair presentation of consolidated financial statementsthat are free from material misstatements, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue
as a going concern, disclosing, as applicable, information related to going concern in accordance with accounting
principles generally accepted in Japan and using the going concern basis of accounting unless management either intends
to liquidate the Group or to cease operations or has no realistic alternative.
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Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

development and operation of the Group’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our responsibilities are to obtain a reasonable assurance about whether the consolidated financial statements as a whole
are free from material misstatements, whether due to fraud or error, and to issue an auditor’s report that includes ouropinion on the consolidated financial statements based on our audit from an independent point of view. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the decisions of users these consolidated financial statements.
In accordance with auditing standards generally accepted in Japan, we exercise professional judgment and maintainprofessional skepticism throughout the audit. We also:• Identify and assess the risk of material misstatement of the consolidated financial statements, whether due to fraud
or error, and design and perform audit procedures responsive to those risks. The procedures selected to be applied
depend on the auditor’s judgment. In addition, we obtain audit evidence that is sufficient and appropriate to provide
a basis for our opinion.
• Obtain, when performing risk assessment procedures, an understanding of internal controls relevant to the audit todesign audit procedures that are appropriate in the circumstances, but not for the purpose of auditing the consolidated
financial statements to express an opinion on the effectiveness of the Group’s internal controls.
• Evaluate the appropriateness of accounting policies used by the management and their method of application, as wellas the reasonableness of accounting estimates made by the management and related notes.
• Conclude on the appropriateness of management’s use of the going concern basis for preparing the consolidated
financial statements. And, based on the audit evidence obtained, determine whether a material uncertainty exists
related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern.
If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to therelated notes to the consolidated financial statements or, if these notes are inadequate, to express a qualified opinion
with exceptions on the consolidated financial statements. Our conclusions are based on the audit evidence obtainedby or on the date of our auditor’s report. However, future events or conditions may cause the Group to cease tocontinue as a going concern.
• Evaluate whether the overall presentation of the consolidated financial statements and the notes are in accordancewith accounting principles generally accepted in Japan, as well as the overall presentation, structure and content of
the consolidated financial statements, including the notes, and whether the consolidated financial statements
represent the underlying transactions and accounting events in a manner that achieves a fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the Group to express an opinion
on the consolidated financial statements. We are responsible for the direction, supervision, and performance of theaudit of the consolidated financial statements. We remain solely responsible for our audit opinion.
We communicate with the Audit & Supervisory Committee regarding the planned scope and timing of the audit andsignificant audit findings, including any significant deficiencies in internal control that we identify during our audit, andother matters required by auditing standards.
We also provide the Audit & Supervisory Committee with a statement that we have complied with the provisions of theCode of Professional Ethics in Japan regarding independence and notify committee members of the matters that may
reasonably be thought to affect our independence. If applicable, we also provide information about any activities taken toeliminate obstacles to our independence and about the use of safeguards for reducing these obstacles to a permissiblelevel.
Of the matters communicated with the Audit & Supervisory Committee, we determine those matters that were of mostsignificance in the audit of the consolidated financial statements for the current fiscal year as key audit matters. We
describe these matters in our auditor’s report unless laws and regulations preclude public disclosure about the matters or,in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to outweigh the public interest benefits of this communication.
Audit of Internal Control
Audit Opinion
Pursuant to the provisions of Article 193-2, Paragraph 2 of the Financial Instruments and Exchange Act, we have audited
the Internal Control Report of the Company as of March 31, 2024.
In our opinion, the accompanying Internal Control Report, in which the Company states that internal controls for financial
reporting were effective as of March 31, 2024, presents fairly, in all material respects, the assessment of internal controls
for financial reporting, in accordance with assessment standards for internal controls for financial reporting generally
accepted in Japan.
Basis for Audit Opinion
We conducted our internal control audit in accordance with auditing standards for internal controls for financial reporting
generally accepted in Japan. Our responsibilities under those standards are further described in the “Auditor’s
Responsibilities for the Audit of the Internal Control” section of our report. We are independent of the Group in accordancewith the provisions of the Code of Professional Ethics in Japan, and we have fulfilled our other ethical responsibilities asauditors. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.

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Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

Responsibilities of Management and the Audit & Supervisory Committee for the Internal Control ReportManagement is responsible for the development and operation of internal controls for financial reporting, and the
preparation and fair presentation of the Internal Control Report in accordance with assessment standards for internal
controls for financial reporting generally accepted in Japan.
The Audit & Supervisory Committee is responsible for overseeing and examining the development and operation ofinternal controls for financial reporting.
Internal controls for financial reporting may not fully prevent or detect misstatements in financial reporting.
Auditor’s Responsibilities for the Audit of the Internal Control
Our responsibilities are to obtain a reasonable assurance about whether the Internal Control Report is free from material
misstatements and to issue an internal control audit report that includes our opinion on the Internal Control Report basedon our internal control audit from an independent point of view.
In accordance with auditing standards for internal controls for financial reporting generally accepted in Japan, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:• Perform audit procedures to obtain audit evidence about the results of the assessments of internal controls forfinancial reporting in the Internal Control Report. The procedures are selected and applied by the auditor’s judgment
based on the significance of effects on the reliability of financial reporting.
• Evaluate the overall presentation of the Internal Control Report, including the appropriateness of the scope,
procedures, and results of management’s assessments of internal controls for financial reporting.
• Obtain sufficient appropriate audit evidence about the results of the assessments of internal controls for financial
reporting in the Internal Control Report. We are responsible for the direction, supervision, and performance of theaudit of the Internal Control Report. We remain solely responsible for our audit opinion.
We communicate with the Audit & Supervisory Committee regarding the scope and timing of the planned internal control
audit, the results of this audit, significant deficiencies in internal controls to be disclosed that we identify during our audit
and those that were corrected, and other matters required by auditing standards for internal control.
We also provide the Audit & Supervisory Committee with a statement that we have complied with the provisions of theCode of Professional Ethics in Japan regarding independence and notify committee members of the matters that may
reasonably be thought to affect our independence. If applicable, we also provide information about any activities taken toeliminate obstacles to our independence and about the use of safeguards for reducing these obstacles to a permissiblelevel.
Information about Audit Fees
Fees received by our firm and individuals belonging to the network of our firm for audit certification services of the Groupand for non-audit services are shown in (3) Audits in the Corporate Governance section included in Information about
Reporting Company of this Annual Securities Report.
Interest Required to Be Disclosed by the Certified Public Accountants Act of Japan
Our firm and its engagement partners do not have any interest in the Group that is required to be disclosed pursuant to
the provisions of the Certified Public Accountants Act of Japan.

Notes: 1. The original copy of this audit report is kept separately by the Company (the reporting company of the Annual
Securities Report).
2. The associated XBRL data are not included in the scope of the audit.

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Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

Independent Auditor’s Report
June 25, 2024
To the Board of Directors ofJapan System Techniques Co., Ltd.

Deloitte Touche Tohmatsu LLCOsaka office
Designated Limited Liability Partner,
Engagement Partner,
Certified Public Accountant:

Ikutoshi Senzaki

Designated Limited Liability Partner,
Engagement Partner,
Certified Public Accountant:

Hideya Sudo

Audit of Non-consolidated Financial Statements
Audit Opinion
Pursuant to the provisions of Article 193-2, Paragraph 1 of the Financial Instruments and Exchange Act, we have audited
the non-consolidated financial statements of Japan System Techniques Co., Ltd. (the “Company”) provided in the“Financial Information” section in the Company’s Annual Securities Report, namely, the non-consolidated balance sheet
as of March 31, 2024, and the non-consolidated statement of income and non-consolidated statement of changes in equity
and the notes to significant accounting policies for the 52nd fiscal year from April 1, 2023 to March 31, 2024, and therelated notes and the annexed detailed schedules.
In our opinion, the accompanying non-consolidated financial statements present fairly, in all material respects, thefinancial position of the Company as of March 31, 2024, and its financial performance for the fiscal year then ended inaccordance with accounting principles generally accepted in Japan.
Basis for Audit Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibilities underthose standards are further described in the “Auditor’s Responsibilities for the Audit of the Non-consolidated Financial
Statements” section of our report. We are independent of the Company in accordance with the provisions of the Code ofProfessional Ethics in Japan, and we have fulfilled our other ethical responsibilities as auditors. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the nonconsolidated financial statements for the current fiscal year. Those matters were addressed in the context of our audit of
the non-consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters.
Estimate of total construction cost for revenue recognition over a specified period based on progress
As described in “Significant Accounting Policies, 4. Recognition of revenues and expenses” and “Significant Accounting
Estimates, 1. Estimate of total construction cost for revenue recognition over a specified period based on progress” in the Notes
to Non-consolidated Financial Statements, the Company records net sales for contracts where the performance obligation is
fulfilled over a specified period, such as contracted software production and relevant services, which are the Company’s major
businesses, by estimating the progress of fulfilling the performance obligation and recognizing revenue based on the progress forthat period. Net sales for the current fiscal year amounted to 20,431,311 thousand yen, of which 1,379,496 thousand yen was fromrevenue recognized over a specified period based on progress.
Key audit matter description and how the key audit matter was addressed in the audit for this matter are not presented because
they are the same as described in “Key Audit Matters (Estimate of total construction cost for revenue recognition over a specified
period based on progress)” in the audit report on the consolidated financial statements.

Other Information
Other information included in the Annual Securities Report is information other than the consolidated financial statements
and non-consolidated financial statements and their audit reports. Management is responsible for preparing and disclosing
the other information. In addition, the Audit & Supervisory Committee is responsible for overseeing the performance of
directors concerning the development and operation of the reporting process for the other information.
Our audit opinion on the non-consolidated financial statements does not cover the other information, and we do not
express any form of assurance conclusion thereon.
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Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

Our responsibility in the audit of the non-consolidated financial statements is to read the other information and, in doingso, consider whether the other information is materially inconsistent with the non-consolidated financial statements or
our knowledge obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, weare required to report that fact.
We have nothing to report in this regard.
Responsibilities of Management and the Audit & Supervisory Committee for the Non-consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the non-consolidated financial statements inaccordance with accounting principles generally accepted in Japan, and for the development and operation of such internal
controls as management determines necessary to enable the preparation and fair presentation of non-consolidated financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the non-consolidated financial statements, management is responsible for assessing the Company’s ability
to continue as a going concern, disclosing, as applicable, information related to going concern in accordance withaccounting principles generally accepted in Japan and using the going concern basis of accounting unless management
either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Audit & Supervisory Committee is responsible for overseeing the performance of directors concerning thedevelopment and operation of the Company’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Non-consolidated Financial Statements
Our responsibilities are to obtain a reasonable assurance about whether the non-consolidated financial statements as awhole are free from material misstatements, whether due to fraud or error, and to issue an auditor’s report that includes
our opinion on the non-consolidated financial statements based on our audit from an independent point of view.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the decisions of users of these non-consolidated financial statements.
In accordance with auditing standards generally accepted in Japan, we exercise professional judgment and maintainprofessional skepticism throughout the audit. We also:• Identify and assess the risk of material misstatement of the non-consolidated financial statements, whether due tofraud or error, and design and perform audit procedures responsive to those risks. The procedures selected to be
applied depend on the auditor’s judgment. In addition, we obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion.
• Obtain, when performing risk assessment procedures, an understanding of internal controls relevant to the audit todesign audit procedures that are appropriate in the circumstances, but not for the purpose of auditing the nonconsolidated financial statements to express an opinion on the effectiveness of the Company’s internal controls.
• Evaluate the appropriateness of accounting policies used by the management and their method of application, as wellas the reasonableness of accounting estimates made by the management and related notes.
• Conclude on the appropriateness of management’s use of the going concern basis for preparing the non-consolidated
financial statements. And, based on the audit evidence obtained, determine whether a material uncertainty exists
related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern.
If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to therelated notes to the non-consolidated financial statements or, if these notes are inadequate, to express a qualified
opinion with exceptions on the non-consolidated financial statements. Our conclusions are based on the audit
evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company
to cease to continue as a going concern.
• Evaluate whether the overall presentation of the non-consolidated financial statements and the notes are in accordancewith accounting principles generally accepted in Japan, as well as the overall presentation, structure and content of
the non-consolidated financial statements, including the notes, and whether the non-consolidated financial statements
represent the underlying transactions and accounting events in a manner that achieves a fair presentation.
We communicate with the Audit & Supervisory Committee regarding the planned scope and timing of the audit andsignificant audit findings, including any significant deficiencies in internal control that we identify during our audit, andother matters required by auditing standards.
We also provide the Audit & Supervisory Committee with a statement that we have complied with the provisions of theCode of Professional Ethics in Japan regarding independence and notify committee members of the matters that may
reasonably be thought to affect our independence. If applicable, we also provide information about any activities taken toeliminate obstacles to our independence and about the use of safeguards for reducing these obstacles to a permissiblelevel.
Of the matters communicated with the Audit & Supervisory Committee, we determine those matters that were of mostsignificance in the audit of the non-consolidated financial statements for the current fiscal year as key audit matters. We
describe these matters in our auditor’s report unless laws and regulations preclude public disclosure about the matters or,in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to outweigh the public interest benefits of this communication.
Information about Audit Fees
Information about audit fees is described in the audit report on the consolidated financial statements.

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Japan System Techniques Co., Ltd. (Securities code: 4323)
Annual Securities Report for the Fiscal Year Ended March 2024

Interest Required to Be Disclosed by the Certified Public Accountants Act of Japan
Our firm and its engagement partners do not have any interest in the Company that is required to be disclosed pursuant
to the provisions of the Certified Public Accountants Act of Japan.

Notes: 1. The original copy of this audit report is kept separately by the Company (the reporting company of the Annual
Securities Report).
2. The associated XBRL data are not included in the scope of the audit.

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