May 14, 2015

Summary of Consolidated Financial Results for the Fiscal Year Ended March 31, 2015
[Japanese GAAP]
Listing: Tokyo Stock Exchange, Second Section
URL: http://www.jast.jp

Company name: Japan System Techniques Co., Ltd.
Stock code:
4323
Representative:
Takeaki Hirabayashi, President and CEO
Contact:
Noriaki Okado, Director and CFO
Scheduled date of Annual General Meeting of Shareholders:
Scheduled date of payment of dividend:
Scheduled date of filing of Annual Security Report:
Preparation of supplementary materials for financial results:
Holding of financial results meeting:Tel: +81-6-4560-1000
June 19, 2015
June 5, 2015
June 22, 2015
Yes
Yes (for analysts)

Note: The original disclosure in Japanese was released on May 14, 2015 at 17:00 (GMT +9).
(All amounts are rounded down to the nearest million yen)

1. Consolidated Financial Results for the Fiscal Year Ended March 31, 2015 (April 1, 2014 – March 31, 2015)(1) Consolidated results of operations(Percentages for net sales and incomes represent year-on-year changes)
Net sales
Operating income
Ordinary income
Net income
Million yen%
Million yen%
Million yen% Million yen%
Fiscal year ended Mar. 31, 20156.2
363 (15.0)
435
(8.0)
228 (18.0)
11,505
Fiscal year ended Mar. 31, 2014
6.8
427
36.1
474
33.2
278
65.2
10,828
Note: Comprehensive income (million yen) Fiscal year ended Mar. 31, 2015:
314 (up 0.9%)
Fiscal year ended Mar. 31, 2014:
311 (up 60.9%)
Net income per
Diluted net
Ordinary income Operating income
Return on equity
share
income per shareon total assets
to net sales
Yen
Yen
%
%
%
Fiscal year ended Mar. 31, 2015
43.56
4.4
5.0
3.2
Fiscal year ended Mar. 31, 2014
57.03
56.20
5.9
5.6
3.9
Reference: Equity in earnings of affiliates (million yen): Fiscal year ended Mar. 31, 2015: Fiscal year ended Mar. 31, 2014: (2) Consolidated financial position
Total assets
Net assets
Million yen
Million yen
As of Mar. 31, 2015
8,717
5,433
As of Mar. 31, 2014
8,817
5,066
Reference: Shareholders’ equity (million yen)
As of Mar. 31, 2015:
5,353

Equity ratio

Net assets per share
%
Yen
61.4
1,020.03
56.6
954.53As of Mar. 31, 2014:
4,992(3) Consolidated cash flows
Cash flows fromoperating activities
Million yen
(204)
393

Fiscal year ended Mar. 31, 2015
Fiscal year ended Mar. 31, 2014

Cash flows frominvesting activities
Million yen
(281)
(13)

Cash flows fromfinancing activities
Million yen
(102)
149

Cash and cash equivalents
at end of period
Million yen
1,559
2,144

2. Dividends
Dividend per share

Fiscal year ended Mar. 31, 2014
Fiscal year ended Mar. 31, 2015
Fiscal year ending Mar. 31, 2016
(forecasts)

1Q-end2Q-end3Q-endYear-end

Total

Total
dividends

Yen
-

Yen
0.00
0.00

Yen
-

Yen
25.00
25.00

Yen
25.00
25.00

Million yen
130
131

-

0.00

-

25.00

25.00

Dividend on
equity(consolidated)
%
%
43.8
2.7
57.4
2.5

Payout ratio(consolidated)

44.9

3. Consolidated Earnings Forecasts for the Fiscal Year Ending March 31, 2016 (April 1, 2015 – March 31, 2016)
Net salesFirst half
Full year

Million yen
5,500
12,200Operating income
%
1.4
6.0

Million yen
(8)
560

%
54.0

Ordinary income
Million yen
14
620

%
(87.8)
42.2(Percentages represent year-on-year changes)
Profit attributable to
Net income perowners of parent
shareMillion yen%
Yen
2 (96.7)
0.38
292
27.7
55.64

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

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

None4) Restatements:

None

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

(3) Number of outstanding shares (common stock)1) Number of shares outstanding at the end of period (including treasury shares)
As of Mar. 31, 2015:

5,612,230 shares

As of Mar. 31, 2014:

5,594,230 shares

As of Mar. 31, 2014:

364,210 shares

2) Number of treasury shares at the end of period
As of Mar. 31, 2015:

364,210 shares

3) Average number of shares outstanding during the period
Fiscal year ended Mar. 31, 2015:

5,247,753 sharesFiscal year ended Mar. 31, 2014:

4,890,856 shares

Reference: Summary of Non-consolidated Financial Results
1. Non-consolidated Financial Results for the Fiscal Year Ended March 31, 2015 (April 1, 2014 – March 31, 2015)(1) Non-consolidated results of operations
Net sales
Million yen
%
9,682
12.1
8,640
8.6

Fiscal year ended Mar. 31, 2015
Fiscal year ended Mar. 31, 2014

Net income per share
Yen
42.54
59.84

Fiscal year ended Mar. 31, 2015
Fiscal year ended Mar. 31, 2014

Operating income
Million yen
%
374
(7.2)
403
81.5

(Percentages represent year-on-year changes)
Ordinary income
Net income
Million yen% Million yen
%
428
(5.0)
223 (23.7)
450
80.6
292 153.6

Diluted net income per
share
Yen
58.96

(2) Non-consolidated financial position
Total assets
Net assets
Million yen
Million yen
As of Mar. 31, 2015
5,503
8,314
As of Mar. 31, 2014
8,406
5,215
Reference: Shareholders’ equity (million yen)
As of Mar. 31, 2015:
5,503

Equity ratio
%
66.2
62.0
As of Mar. 31, 2014:

Net assets per share
Yen
1,048.61
997.095,214

2. Non-consolidated Earnings Forecasts for the Fiscal Year Ending March 31, 2016 (April 1, 2015 – March 31, 2016)

First half
Full year

Net sales
Million yen
4,700
10,300%
1.8
6.4

Operating income
Million yen%
6(94.6)
520
39.0

Ordinary income
Million yen%
30 (81.9)580
35.5(Percentages represent year-on-year changes)
Net income
Net income per share
Million yen%
Yen
15 (86.1)
2.86
290
29.9
55.26

Note 1: Information regarding the implementation of audit procedure
The current financial statements are exempted from audit procedures based on the Financial Instruments and Exchange Act. At thetime of disclosure, the audit procedure for these consolidated statements has not been completed.
Note 2: Cautionary statement with respect to forward-looking statements
Forecasts of future performance in these materials are based on assumption judged to be valid and information available to theCompany’s management at the time the materials were prepared, but are not promises by the Company regarding future
performance. Actual results may differ materially from the forecasts. Please refer to “1. Analysis of Results of Operations andFinancial Position, (1) Analysis of Results of Operations” on page 2 for forecast assumptions and notes of caution for usage.

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/15

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

2
2
3
4
4

2. Corporate Group6

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

8
8
8
8
9

4. Basic Approach to the Selection of Accounting Standards

9

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

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10
12
12
13
14
16
17
17
17
20
20
20
20
20
21
21
22
23
24
25
26
30
31
32
32
34
35
35
35

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

36
36
38
39
41
41
41
43
43
43
43
43
44
45
45
46

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

46
46
47

1

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/15

1. Analysis of Results of Operations and Financial Position(1) Analysis of Results of Operations
1) Summary of the fiscal year
In the current fiscal year, consolidated results of the Japan System Techniques Group (Japan System Techniques Co.,
Ltd. (JAST) and its consolidated subsidiaries, hereafter “the Group”) showed higher sales and lower profits asfollows: net sales of 11,505 million yen (up 6.2% year on year), operating income of 363 million yen (down 15.0%
year on year), ordinary income of 435 million yen (down 8.0% year on year), and net income of 228 million yen(down 18.0% year on year). Results by segment were as follows.
In the software business (individualized contracted software development), net sales increased but profits decreased.
Sales remained strong because orders from the service/retail industry, the finance/insurance/brokerage industry, thetelecommunications industry, and the manufacturing industry increased while there was a decrease in orders from thepublic sector and medical institutions. General and administrative expenses increased due to higher costs associatedwith the expansion of the Tokyo Head Office and the rebuilding of internal systems. As a result, net sales in thisbusiness totaled 7,823 million yen (up 10.0% year on year) and operating income totaled 204 million yen (down
26.6% year on year).
In the package business (sale and related services of operational reform packages for schools), net sales increased but
profits declined. End user computing (EUC: individualized contracted development of related systems), IT equipment
sales, program product (PP) sales to universities increased year on year, but operation services and implementation
support declined. Net sales in this business totaled 2,131 million yen (up 9.3% year on year), but due to an increase
in research and development expenses for product development, operating income totaled 271 million yen (down
8.5% year on year).
In the system sales business (IT equipment sales and IT/telecom infrastructure construction), net sales and profits
decreased. Orders from system integration (SI) projects for public sectors, and equipment sales to universities
declined. As a result, net sales in this business totaled 1,131 million yen (down 26.2% year on year), and operating
loss totaled 28 million yen (vs. operating income of 41 million yen in the previous fiscal year).
Lastly, in the medical big data business (inspection, analysis and related services of medical information), net sales
totaled 419 million yen (up 78.1% year on year), and operating loss totaled 84 million yen (vs. operating loss of 194
million yen in the previous fiscal year). This was due to the expansion of notification and data analysis services, andcloud services for checking service providers in addition to automated inspection services for health insurance
claims.
2) Forecasts for the new fiscal year
In the fiscal year under review, the overall Japanese economy continued to recover. Economic stimulus measures by
the government and the Bank of Japan’s monetary policy were partly responsible for this trend, leading to yen
depreciation and rising stock prices. Although the consumption tax rise affected personal consumption to someextent, there are expectations for an increase in employment supported by the improved corporate earnings and rises
in capital investment. However, a risk of economic stagnation or a downturn remains because of uncertainties onboth the political and economic fronts, such as slowing growth in China and other major emerging countries, anduncertainty surrounding the debt crisis in Europe.
In the IT industry in Japan, according to the latest statistics in the “Survey of Selected Service Industries” by the
Ministry of Economy, Trade and Industry (the final February figures), net sales rose 3.0% year on year in 2014
(compared with 1.7% annual growth in 2013), pointing to a recovery trend. The monthly figures for February 2015
showed year-on-year growth of only 0.7%, however, suggesting that the strength of recovery remains weak.
Against this backdrop, the Group will be guided by the new fiscal year’s slogan of “go beyond the border.” Each andevery employee will leverage the strengths that JAST has cultivated to date, making a strong commitment in new
areas (internally: achieve unprecedented levels of quality, acquire skills, boost productivity, etc.; externally: achieve2

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/15

unprecedented business success, attain high prices, earn a positive reputation, develop business in new regions, etc.).
As a result, we aim to boost orders volume and enhance profitability in the contracted development business, as wellas to achieve sustained growth by further expanding JAST-driven business centering on proprietary brand products.
Based on the above, we expect increases in sales and profits for the fiscal year ending March 31, 2016; net sales of
12,200 million yen (up 6.0% year on year), operating income of 560 million yen (up 54.0% year on year), ordinary
income of 620 million yen (up 42.2% year on year), and net income of 292 million yen (up 27.7% year on year).

(2) Analysis of Financial Position
1) Balance sheet position
The balance of current assets at the end of the current fiscal year was 6,200 million yen, down 5.5% over the end of
the previous fiscal year. This was mainly due to increases in notes and accounts receivable-trade from higher sales atthe end of fiscal year, and work in process, and a decrease in cash and deposits. The balance of non-current assets
was 2,516 million yen at the end of the current fiscal year, up 11.7% over the end of the previous fiscal year. Thiswas mainly due to an increase in net defined benefit asset, an increase from purchase of investment securities, adecrease in deferred tax assets, and cancellation of long-term time deposits.
The balance of current liabilities at the end of the current fiscal year was 2,026 million yen, down 14.3% over the endof the previous fiscal year. This was mainly due to decreases in income taxes payable, and notes and accounts
payable-trade. The balance of non-current liabilities was 1,258 million yen at the end of the current fiscal year, down
9.2% over the end of the previous fiscal year. This was mainly due to decreases in net defined benefit liability andprovision for directors’ retirement benefits following the retirement of directors.
The balance of net assets was 5,433 million yen at the end of the current fiscal year, up 7.2% over the end of theprevious fiscal year. This was mainly due to increases in retained earnings and remeasurements of defined benefit
plans.

2) Cash flows
Cash and cash equivalents decreased 584 million yen from 2,144 million yen at the start of the current fiscal year to1,559 million yen at the end of the current fiscal year.
Cash flows by category were as follows.
Cash flows used in operating activities totaled 204 million yen, compared with 393 million yen provided in theprevious fiscal year. This difference was mainly due to increases in outlays for inventories and notes and accounts
payable-trade, and a decrease in provision for bonuses, while there was an increase in income from notes and accounts
receivable-trade.
Cash flows used in investing activities totaled 281 million yen, compared with 13 million yen used in the previous
fiscal year. This difference was mainly due to a decrease in proceeds from the collection of guarantee deposits, andincreases in outlays for the purchases of property, plant and equipment and investment securities, while there was anincrease in income from withdrawal of time deposits.
Cash flows used in financing activities totaled 102 million yen, compared with 149 million yen provided in theprevious fiscal year. The main difference factor was a decrease in proceeds from issuance of common shares.

3

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/15

Reference: Cash flow indicators
FY3/11
FY3/12
FY3/13
FY3/14
FY3/1556.6
61.4
Equity ratio (%)
55.2
59.2
55.0
39.0
50.0
Equity ratio based on market value (%)
33.3
38.7
38.2
0.0
Interest-bearing debt to cash flow ratio (years)
0.0
0.1
228.6
Interest coverage ratio (times)
178.8
89.1
Notes: 1. The above figures are calculated as follows.
Equity ratio: Shareholders’ equity / Total assets
Equity ratio based on market value: Market capitalization / Total assets
Interest-bearing debt to cash flow ratio: Interest-bearing debt / Operating cash flows
Interest coverage ratio: Operating cash flows / Interest payments* Market capitalization is calculated by multiplying the closing share price at the end of the period by the
number of shares outstanding at the end of the period, excluding treasury shares.
* Interest-bearing debt is calculated using total loans-payable on the consolidated balance sheet.
* Interest payments use the amount of interest expenses paid stated on the consolidated statement of cash
flows.
2. There are no average debt repayment period and interest coverage ratio figures for FY3/11 and FY3/15
because the Company had negative operating cash flows.
(3) Basic Policy for Profit Distribution, and Dividends in the Current and Next Fiscal Years
The Company’s basic policy for dividends is the same as that for earnings: long-term stable growth. It will examine
specific policies and amounts, in light of the trend in earnings, its financial condition, and various businessenvironments, while taking into consideration the payout ratio. The Company will make effective use of retained
earnings to invest in the training of professional human resources, the creation of new businesses, the promotion ofvarious alliances, and R&D for new products.
The Group will pay a dividend of 25 yen for each common share, in accordance with initial plans, for the fiscal year
ended March 31, 2015, in response to support from shareholders and investors.
The Group plans a dividend of 25 yen for each common share in the fiscal year ending March 31, 2016 in light of theoutlook for stable earnings growth.
(4) Business Risks
Listed below are the risk factors that may affect operating results and financial position as well as the stock price andother performance indices of the Group. Forward-looking statements are based on the judgment of the Group as of thedate of the release of these materials.
1) Risks related to defects in products and services
Information systems development within the IT industry, including the Company, has become increasingly complex
due to the growing sophistication of hardware and networking technologies, advances in operating systems, middlewareand development languages, and the rapid spread and transition in recent years to cloud and other new
information-processing technologies. Meanwhile, the demands of clients regarding quality have become stricter associety shows increased interest in quality and defect issues related to IT products and services given the growing
impact of such defects on society. Against this backdrop, the Group is very careful in thoroughly educating employees
about improving and stabilizing software quality, strengthening screening functions during the quote and order process,
improving quote technology, and enhancing project management. Nevertheless, the Group cannot rule out thepossibility of defects which could cause major projects to become unprofitable due to client indemnities and productrepairs, and together with credit deterioration, result in a material impact on the Group’s business performance.

4Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/15

2) Risks related to information management, misuse, and negligence, etc.
To prevent the leak of confidential or personal information relating to clients or employees, as well as accidents due tonegligence of all kinds, and misuse, the Group has formulated internal guidelines, trained employees, and holds regularinspections conducted by professional organizations. Still, these efforts cannot completely eliminate risk, and thematerialization of such risk could lower the Group’s creditworthiness, require indemnities, and have a material impact
on the Group’s business performance.
3) Risks associated with overreliance on major clients
The Group’s top clients account for a comparatively high proportion of its overall sales. Its top three clients accounted
for approximately 19% of consolidated net sales in the fiscal year under review, and its top five clients approximately
25%. Although the Group’s overreliance on these particular major clients has eased somewhat over the past few years, achange in orders from major clients or in the industry environment for major clients could cause significant fluctuationsin the Group’s business performance.
4) Risks associated with the concentration of earnings towards the fiscal yearend
A unique feature of the Group’s contracted software development, package, and systems equipment sales businesses isthat product inspections tend to concentrate in March which is the last month of the fiscal year for most clients. Delaysin the recognition of revenue due to clients’ postponement of development processes, budget executions, or productinspections could cause fluctuations in the Group’s business performance.
5) Risks associated with the valuation of assets
The Group owns marketable securities, real estate for rent, and other investment assets. The balance of these assets is
considerably smaller than its current assets which can be easily converted to cash. Still, unpredictable or rapid changes
in market prices or the bankruptcy of issuers, while difficult to forecast, could reduce the value of these assets,
impacting the Group’s business performance.
6) Risks related to large natural disasters
The outbreak of a large earthquake or other natural disaster could inflict devastating damage on the Group's mainstay
offices and injure many employees requiring expensive repairs and impacting the Group's business performance.

5Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/15

2. Corporate GroupThe Group is comprised of Japan System Techniques Co., Ltd. and its six consolidated subsidiaries. It operates fourbusinesses including 1) the software business which develops software on contract to meet the specific needs of clients,
2) the package business which develops and sells operations packages mainly for educational institutions, 3) the systemsales business which sells hardware and software, and 4) the medical big data business, which includes a full line ofservices including automated inspection services for health insurance claims, data analysis and notification of the costof medical care.
The table below shows the content of each of the Group’s businesses.
The business classification below is the same as in “5. Consolidated Financial Statements, (5) Notes to Consolidated
Financial Statements (Segment and Other Information)” on page 32.
Businesssegment
Softwarebusiness

Field
Businessapplications(office work
processing
system)Content

Company name- Systems for the manufacturing industry including production
management, logistics management, and order management- Systems for the retail and service industries including store information,
procurement, shipment management, virtual shopping malls, andshopping mileage services- Systems for financial institutions including accounts, information, global
operations, business administration, and card loans- Systems for the securities industry including equity trading, investment
trusts, dealing, and Internet securities trading- Systems for the insurance industry including contract management andnon-life new reserves- Systems for the public sector including phone billing, tax revenue
management, resident information, postal accounts, and highway ETC(electronic toll collection)- Systems for schools and students including entrance examinations,student registries, teaching, and job search support- Systems for website production, smartphone app development, andrelated network businesses- Accounting, personnel, ERP package introduction support, customer
relations management (CRM) systems, data warehousing construction,
biometric identification security systems, and other office work
processing systems- Vehicle dispatch and sales support systems for transport companies- Development, sales, maintenance, and introduction support for“BankNeo,” a data integration package for financial institutions, andcontracted development of related systems

Japan System
Techniques Co., Ltd.

Engineering
applications(communications,control,
technology
systems)- Embedded software for cell phones, digital audio-visual equipment, andcar mounted systems; IT/telecom systems for terrestrial digital
broadcasts, mobile communications, car navigation, and simulators

Event
applications(sports andcultural event
systems)- Sporting and cultural event management systems, such as for ballet andother competitions

6

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

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/15

Businesssegment
Packagebusiness

Field

Content

Company name

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

Japan System
Techniques Co., Ltd.

Systemsales
business

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

Alpha Computer Co.,Ltd.

Medicalbig data
business

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

Japan System
Techniques Co., Ltd.

Alpha Computer Co.,Ltd.

The diagram below provides a visual representation of the positioning and relationships of businesses within the Group.
Clients
Sale of products,
etc.
Consolidated subsidiary

Software development,
package sales and medical
information services

Software development
Consolidated subsidiary

Alpha Computer Co., Ltd.

JASTEC (THAILAND) CO., LTD.

(Head office: Tokyo)(Head office: Bangkok, Thailand)

Consolidated subsidiary

Software development

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

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

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

Japan System Techniques Co., Ltd.

Software development

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

Investments

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

7

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/15

3. Management Policies(1) Basic Management Policy
Japan System Techniques, since its founding, has maintained its complete independence, unaffiliated with any group,
based on the motto of “creating and providing information technology to contribute to society.” While challenging thefrontiers of the latest technologies, the Company has worked on systems development independent of any specificindustry, technology field, or manufacturer. As a comprehensive information services provider, this independence has
allowed it to meet an extremely wide variety of needs as the description in “2. Corporate Group” on page 6 shows. Thisis a major strength of the Company and has contributed significantly to its stable earnings growth. It is the passion ofeach and every employee towards information systems development, and sincerity in dealing with clients, that drives
this growth. As such, the Company believes in “developing human resources” based on the management philosophy
that the most important management priority is for each and every employee to polish his or herself.
(2) Performance Targets
The Company understands the importance of achieving the sales and profit targets it discloses every fiscal year.
From the standpoint of improving enterprise value by seeking returns on shareholders’ equity, the Company’s basic
dividend policy is to aim for stable, long-term growth in line with operating performance, taking the payout ratio into
consideration. The Company also aims to further improve the ratio of net income to shareholders’ equity, or ROE,
which was 4.4% on a consolidated basis in the fiscal year under review.
(3) Medium- and Long-term Business Strategy
A key strength of the Company is that, through a business strategy of covering a wide variety of fields while also
focusing deeply on each and staying ahead of the latest technologies, it can maintain stable earnings, unaffected bybusiness environment changes such as the boom-bust cycles of specific industries or changes in technology trends,
while at the same time aiming for long-term growth.
However, in the uncertain economy of late, and particularly in the IT industry where the environment is extremely
volatile, the Company understands that it will be difficult to achieve growth into the future if it remains overly
dependent on contract development, the IT industry’s mainstay source of earnings to date.
Based on this understanding, the Group has formulated the “JAST Vision 2020” as its basic medium- to long-term
management policy. Specifically, in the contracted development business this policy calls for the Company to reinforce
solution sales, with a focus on expanding direct agreements with end users. At the same time, we will strive tostrengthen management capabilities for production process, lower the cost of production through measures such as
promoting offshore development, and enhance our systems in the Tokyo metropolitan area—Japan’s largest market. We
intend to enhance the overall profitability of this business by increasing our volume of orders in this area. In addition, tocreate new customers and demand by expanding our proprietary brand business, we will further expand our product andservice offerings around our existing brands: GAKUEN, JMICS and BankNeo. Meanwhile, we will persist with R&D
to ensure the continuous launch of new brands. In addition to these initiatives, we will pursue globalization and the
expansion of alliances, including through M&A, in the aim of boosting our proprietary brand business to around 50% of
net sales. Also, to further strengthen the growth base, it will continue to improve project management technologies,
increase added value by enriching the solutions menu, and introduce intensive training and personnel systems capableof nurturing top-class talent.

8Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/15(4) Challenges
Please see “1. Analysis of Results of Operations and Financial Position, (1) Analysis of Results of Operations, 2)
Forecasts for the new fiscal year” on page 2 for a description of current conditions and challenges in the IT industry and
the Group. Based on these understandings, each and every employee has a strong commitment to go beyond borders inorder to boost orders volume and enhance profitability in the contracted development business, as well as to achievesustained growth by further expanding JAST-driven business centering on proprietary brand products. Activities for the
fiscal year ending March 31, 2016 will be guided by the fiscal year slogan “go beyond the border.” In addition, we haveestablished the following nine key challenges.
1) To achieve the objectives of the JAST Vision 2020, have all employees take innovative action with spirit ofchallenge, without fearing risks
2) Further strengthen the structure under which the operation of businesses is headed by executive officers with acompanywide perspective3) Work consistently to acquire capabilities to win out, both in reality and in name, over the industry’s most prominent
manufacturers and vendors
4) Strengthen the next-generation GAKUEN package and other educational solutions, establishing leadership in theJapanese market and increasing sales in the Chinese and ASEAN markets
5) Increase the contribution to companywide profits of the proprietary brand JMICS and BankNeo businesses, andfurther cultivate new businesses
6) In global operations, expand sales and profits in China and the ASEAN region and reinforce alliances both within
and outside the Group
7) Instill and enhance the proprietary brand through independent management that leverages the strengths of individualGroup companies
8) Vigorously take on challenges in new operational domains by boldly promoting middle management
9) Promote corporate reforms to optimize the internal environment by moving forward with personnel systemtransformations and enhancements, and through the stable operation and ongoing improvement of internal systems

4. Basic Approach to the Selection of Accounting Standards
The Group will continue to prepare consolidated financial statements using generally accepted accounting principles
in Japan for the time being to permit comparisons with prior years and with the financial data of other companies.
We will take suitable actions with regard to the application of International Financial Reporting Standards (IFRS) by
taking into account associated factors in Japan and other countries.

9Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/15

5. Consolidated Financial Statements(1) Consolidated Balance Sheet
FY3/14(As of Mar. 31, 2014)(Thousands of yen)
FY3/15(As of Mar. 31, 2015)

AssetsCurrent assets
Cash and deposits

3,319,585

2,762,276

Notes and accounts receivable-trade

2,607,749

2,783,536

Merchandise and finished goods

97,39459,362Work in process

167,776

278,704

Raw materials and supplies

2,347

3,066

Deferred tax assets

259,362

202,070

Other

112,940

116,390

Allowance for doubtful accounts(3,863)(4,519)6,563,292

6,200,887

Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation*2

Buildings and structures, net

*2

Land
Other

551,886

612,788(270,155)(271,071)

281,730*2

142,361*2

341,716
142,361

252,174

288,023(171,771)(189,891)

80,402

98,131

504,495

582,210Goodwill

27,02318,001

Software96,422

149,314

Other

7,189

7,189

130,635

174,505

Investment securities

362,629580,032

Net defined benefit asset

257,001

481,576

Deferred tax assets

234,645

57,219

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

Total intangible assets
Investments and other assets

Guarantee deposits

299,440
*1,*2

Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets

10519,352

342,917*1,*2

352,690(54,288)(54,288)

1,618,782

1,760,149

2,253,912

2,516,865

8,817,204

8,717,753

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/15(Thousands of yen)
FY3/15(As of Mar. 31, 2015)

FY3/14(As of Mar. 31, 2014)
Liabilities
Current liabilities
Notes and accounts payable-trade
Short-term loans payable
Current portion of long-term loans payable

906,653

751,992-

23,367

2,400

1,800

Income taxes payable

293,658

84,486

Provision for bonuses

531,526

446,267

Provision for directors’ bonuses

28,477

20,624

Other

601,663

697,818

2,364,379

2,026,357

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

1,800

-

Provision for directors’ retirement benefits

422,029

350,248

Net defined benefit liability

903,730

772,160

Other

58,856135,979

1,386,415

1,258,387

3,750,795

3,284,745

Capital stock

1,071,446

1,076,669

Capital surplus

1,033,084

1,038,308

Retained earnings

3,025,811

3,299,968

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

Total shareholders’ equity

4,863,803

5,148,407

Valuation difference on available-for-sale securities

52,191

61,263Foreign currency translation adjustment(14,936)(9,647)

Remeasurements of defined benefit plans

91,150153,109

Total accumulated other comprehensive income

128,405

204,724

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

Accumulated other comprehensive income

Subscription rights to shares

514-

Minority interests

73,68679,875

Total net assets

5,066,409

5,433,007

8,817,204

8,717,753

Total liabilities and net assets

11Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/15(2) Consolidated Statements of Income and Comprehensive Income
Consolidated Statement of Income
FY3/14(Apr. 1, 2013 – Mar. 31, 2014)(Thousands of yen)
FY3/15(Apr. 1, 2014 – Mar. 31, 2015)

Net sales

10,828,399

11,505,104

Cost of sales

8,649,893

9,148,950

Gross profit

2,178,505*1,*2

Selling, general and administrative expenses
Operating income

1,750,890

2,356,154*1,*2

1,992,473

427,615363,681Interest income

10,176

10,041Dividend income

5,411

6,219

Foreign exchange gains

7,997

1,303

Rent income

14,56915,564

Commission fee

1,864

1,804

Subsidy income

19,77935,313

Other

9,526

13,875

Total non-operating income

69,324

84,123

Interest expenses

1,673

1,610

Rent expenses

15,845

8,886

Other

5,341

1,347

Total non-operating expenses

22,861

11,844

Ordinary income

474,078435,961

Income before income taxes and minority interests

474,078435,961

Non-operating income

Non-operating expenses

Income taxes-current

304,470

93,387

Income taxes-deferred(116,444)

113,050

Total income taxes

188,025

206,437

Income before minority interests

286,052

229,523

Minority interests in income
Net income

12

7,129

944

278,922

228,579

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/15

Consolidated Statement of Comprehensive Income
FY3/14(Apr. 1, 2013 – Mar. 31, 2014)(Thousands of yen)
FY3/15(Apr. 1, 2014 – Mar. 31, 2015)

286,052

229,523

Valuation difference on available-for-sale securities

17,776

9,071

Foreign currency translation adjustment

7,909

14,073-

61,95825,685

85,103

311,738

314,626

Comprehensive income attributable to owners of parent

296,482

304,898

Comprehensive income attributable to minority interests

15,255

9,728

Income before minority interests
Other comprehensive income

Remeasurements of defined benefit plans, net of tax
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to13

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/15(3) Consolidated Statement of Changes in Equity
FY3/14 (Apr. 1, 2013 – Mar. 31, 2014)(Thousands of yen)
Shareholders’ equity
Capital stock
Balance at beginning ofcurrent period
Cumulative effects ofchanges in accounting
policies
Restated balance
Changes of items during
periodIssuance of newshares-exercise ofsubscription rights to shares

Capital surplus

Retained earnings

Treasury shares

Total shareholders’equity924,223885,8622,865,993(266,494)

4,409,584

924,223885,8622,865,993(266,494)

4,409,584

147,222

147,222

294,445

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

Net income

278,922

278,922

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

147,222

147,222

159,817(44)454,218

1,071,446

1,033,084

3,025,811(266,539)

4,863,803

Accumulated other comprehensive income

Balance at beginning ofcurrent period
Cumulative effects ofchanges in accounting
policies
Restated balance

Total accumulated Subscription
Minorityrights tootherinterests
sharescomprehensive
incomeValuationdifference on
available-for-salesecurities

Foreigncurrencytranslation
adjustment

Remeasurementsof defined benefit
plans

34,414(14,720)-

19,694984

59,275

4,489,539

34,414(14,720)-

19,694984

59,275

4,489,539

Changes of items during
periodIssuance of newshares-exercise ofsubscription rights to shares

Total net
assets294,445

Dividends of surplus(119,104)

Net income

278,922

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

91,150108,711(470)

14,411

122,651

17,776(216)

91,150108,711(470)

14,411

576,870

52,191(14,936)

91,150128,405514

73,686

5,066,409

14

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/15

FY3/15 (Apr. 1, 2014 – Mar. 31, 2015)(Thousands of yen)
Shareholders’ equity
Capital stock
Balance at beginning ofcurrent period
Cumulative effects ofchanges in accounting
policies
Restated balance
Changes of items during
periodIssuance of newshares-exercise ofsubscription rights to shares

Capital surplus

1,071,446

Retained earnings

1,033,084

Treasury shares

3,025,811

Total shareholders’equity(266,539)

4,863,803

176,328
1,071,446

1,033,084

5,223

5,223

3,202,140

176,328(266,539)

5,040,131

10,446

Dividends of surplus(130,750)(130,750)

Net income

228,579

228,579

108,275

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

5,223

5,223

97,8281,076,669

1,038,308

3,299,968(266,539)

5,148,407

Accumulated other comprehensive income

Balance at beginning ofcurrent period
Cumulative effects ofchanges in accounting
policies
Restated balance

Valuationdifference on
available-for-salesecurities

Foreigncurrencytranslation
adjustment

Remeasurementsof defined benefit
plans

52,191(14,936)

91,150Total accumulated Subscription
Minorityrights tootherinterests
sharescomprehensive

Total net
assetsincome128,405514

73,686

5,066,409

176,328
52,191(14,936)

91,150128,405514

73,686

Changes of items during
periodIssuance of newshares-exercise ofsubscription rights to shares

5,242,738

10,446

Dividends of surplus(130,750)

Net income

228,579

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

9,071

5,288

61,95876,318

(514)

6,189

81,993

9,071

5,288

61,95876,318

(514)

6,189

190,269

61,263(9,647)

153,109

204,724-

79,8755,433,007

15

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/15(4) Consolidated Statement of Cash Flows(Thousands of yen)
FY3/14
FY3/15(Apr. 1, 2013 – Mar. 31, 2014) (Apr. 1, 2014 – Mar. 31, 2015)
Cash flows from operating activities

Income before income taxes and minority interests

474,078435,961

Depreciation

75,537

93,930

Amortization of software

14,16525,888

Amortization of goodwill

8,314

8,236

Increase (decrease) in provision for bonuses

148,160(85,321)

Decrease (increase) in net defined benefit asset(15,640)(14,344)

Increase (decrease) in net defined benefit liability

30,16144,784

Interest and dividend income(15,587)(16,260)

1,673

1,610

Decrease (increase) in notes and accounts receivable-trade(266,261)(173,400)

Decrease (increase) in inventories

173,816(75,918)

4,745(154,760)

Other, net(85,198)(9,285)

Subtotal

547,965

81,120Interest expenses

Increase (decrease) in notes and accounts payable-trade

Interest and dividend income received

15,222

17,118Interest expenses paid

(1,720)(1,561)

Income taxes paid

(168,049)(301,019)

Net cash provided by (used in) operating activities

393,417(204,341)

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

59,057

181,033

Purchase of property, plant and equipment(18,670)(133,643)

Proceeds from reversal of insurance funds

8,642

-

Purchase of software(92,324)(17,322)

Purchase of investment securities(102,054)(208,061)

Payments for guarantee deposits(1,429)(47,514)

Proceeds from collection of guarantee deposits

138,420

3,499

Payments for assets retirement-(27,864)

Other, net(5,130)(32,111)

Net cash provided by (used in) investing activities(13,489)(281,985)(20,312)23,367

Repayments of long-term loans payable(2,400)(2,400)

Proceeds from issuance of common shares

293,974

9,932

Cash dividends paid

(119,104)(130,750)(1,283)(2,435)

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

Cash dividends paid to minority shareholders
Other, net(1,097)(134)

Net cash provided by (used in) financing activities

149,776(102,420)

4,403

4,419

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

534,108(584,327)

Cash and cash equivalents at beginning of period

1,609,962

2,144,070*1

Cash and cash equivalents at end of period

16

2,144,070*1

1,559,743

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/15(5) Notes to Consolidated Financial Statements
Going Concern Assumption
Not applicable.

Significant Accounting Policies in the Preparation of Consolidated Financial Statements
1. Scope of consolidation
Number of consolidated subsidiaries: 6
Names of consolidated subsidiaries:
JAST TECHNIQUES PTE. LTD.
JASTEC (THAILAND) CO., LTD.
Alpha Computer Co., Ltd.
NewNeeds Co., Ltd.
SafeNeeds Co., Ltd.
GuiLin Anxin Software Co., Ltd.
Since the executives of SafeNeeds own all shares of GuiLin Anxin Software Co., Ltd. and constitute a majority of the numberof the Board of Representatives, GuiLin Anxin Software is effectively under the control of the Company and included inconsolidation.
2. Application of equity method
The Company has no subsidiaries and affiliates accounted for by the equity method.
3. Fiscal year of consolidated subsidiaries
At the three overseas consolidated subsidiaries, the fiscal year under review ended on December 31, 2014. The consolidated
financial statements include the financial statements of these consolidated subsidiaries as of December 31, 2014. Necessary
adjustments have been made for the consolidation concerning material transactions arising between January 1, 2015 and March
31, 2015.
The fiscal year of the three consolidated subsidiaries in Japan ends on the closing date of consolidated financial statements.
4. Accounting standards(1) Valuation standards and methods for principal assets
1) Marketable securities
a. Held-to-maturity debt securities
Stated at cost determined by the amortized cost method (straight-line method).
b. Available-for-sale securities
Securities with market quotations
Stated at fair value at the end of the fiscal year. (Unrealized gain or loss is included in net assets. Cost of securities sold isdetermined by the moving-average method.)
Securities without market quotations
Stated at cost determined by the moving-average method.
2) Inventories
a. MerchandiseStated at cost determined by the specific identification method. (The carrying value on the balance sheet is written down toreflect the effect of lower profit margins.)
b. Finished goods
Stated at cost determined by the periodic average method. (The carrying value on the balance sheet is written down to reflect
the effect of lower profit margins.)

17

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/15

c. Work in process
Stated at cost determined by the specific identification method. (The carrying value on the balance sheet is written down toreflect the effect of lower profit margins.)
d. Supplies
Valued by the last purchased price method.
(2) Depreciation and amortization of significant depreciable assets
1) Property, plant and equipment (excluding leased assets)
Depreciation of property, plant and equipment at the Company and its consolidated subsidiaries in Japan is calculated by the
declining-balance method, and at the overseas consolidated subsidiaries by the straight-line method.
Useful life of principle assets is as follows:
Buildings and structures:
10-35 years
Other:
4-10 years
2) Intangible assets (excluding leased assets)
Amortization of intangible assets is calculated by the straight-line method.
Software is amortized over an expected internal useful life of 3-5 years by the straight-line method.
3) Leased assets
a. 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.
b. 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.
4) Investments and other assets (other)
Declining-balance method, except for buildings acquired on or after April 1, 1998 (excluding attached structures) on which
depreciation is calculated by the straight-line method.
Useful life of investments and other assets (other) is 47 years (buildings).
(3) Recognition of significant allowances
1) Allowance for doubtful accounts
To prepare for credit losses on accounts receivable, allowances equal to the estimated amount of uncollectible receivables areprovided for general receivables based on the historical write-off ratio, and bad receivables based on case-by-casedetermination of collectibility.
2) Provision for bonuses
To provide for employee bonus obligation, the Company and its certain consolidated subsidiaries provide an allowance equal
to the estimated bonus obligations.
3) Provision for directors’ retirement benefits
To provide for directors’ retirement benefits, the Company and its certain consolidated subsidiaries in Japan provide anallowance for the aggregate amount payable at the end of the current fiscal year pursuant to the Company’s rules on
directors’ retirement benefits.
4) Provision for directors’ bonuses
To provide for directors’ bonuses, the Company and its certain consolidated subsidiaries provide an allowance equal to theestimated bonus obligations in the current fiscal year.
(4) Accounting method for retirement benefits
1) Method of attributing estimated retirement benefit obligations to periods

18Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/15

In calculation of retirement benefit obligations, the Company uses the benefit formula standard as the method for attributing
estimated retirement benefit obligations to periods.
2) Amortization of actuarial differences and prior service costs
Prior service cost is amortized by the declining-balance method over a certain period (10 years) within estimated averageremaining years of service of the eligible employees.
Actuarial differences are amortized and charged to expense in the year following the fiscal year in which such gain or loss isrecognized by the declining-balance method over a certain period (10 years) which is within the estimated average remaining
years of service of the eligible employees.
3) Accounting method for unrecognized actuarial gains and losses and unrecognized past service costs
Unrecognized actuarial gains and losses and unrecognized past service costs would be recorded as “Remeasurements ofdefined benefit plans” under “Accumulated other comprehensive income” in the net asset section after adjusting for tax
effects.
(5) Recognition of significant revenues and expenses
Recognition criteria for revenues and cost of sales for contracted software production
1) Contracts of which the outcome can be reliably estimated
The percentage-of-completion standard (with the percentage of completion estimated on the cost-to-cost basis).
2) Other contracted work
The completed-contract standard.
(6) Method and period of goodwill amortization
Goodwill is amortized over 5 years by the straight-line method.
(7) Scope of cash and cash equivalents on consolidated statement of cash flows
Cash and cash equivalents consist of vault cash, deposits that can be withdrawn on demand, and time deposit with maturities
less than 3 months.
(8) Other significant accounting policies in the preparation of consolidated financial statements
Accounting for consumption taxes
National and local consumption taxes are accounted by the tax-exclusion method. Non-deductible national and local
consumption taxes are charged to expenses in the current fiscal year.

19

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/15

Changes in Accounting Policies
Application of the accounting standard for retirement benefits
The Company has applied the “Accounting Standard for Retirement Benefits (Accounting Standards Board of Japan (ASBJ)
Statement No. 26, May 17, 2012)” and the “Guidance on Accounting Standard for Retirement Benefits (ASBJ Guidance No. 25,
March 26, 2015)” from the current fiscal year, for provisions set forth in the main clauses of Paragraph 35 of the AccountingStandard for Retirement Benefits and Paragraph 67 of the Guidance on Accounting Standard for Retirement Benefits. Accordingly,
the Company reviewed the methods for calculating retirement benefit obligations and service costs, and revised the method of
attributing estimated retirement benefit obligations to periods from the straight-line basis to the benefit formula basis, and revised themethod of determining the discount rate from the method using the approximate number of years of expected average length of theremaining service period of employees to the method using a single weighted average discount rate.
For the application of these accounting standards, etc. in accordance with the transitional accounting treatments set forth in Paragraph
37 of the Accounting Standard for Retirement Benefits, the adjustments associated with the change in calculation methods ofretirement benefit obligations and service costs are recorded in retained earnings at the beginning of the current fiscal year.
The result was decreases of 97,473 thousand yen in deferred tax assets and 169,824 thousand yen in net defined benefit liability, andincreases of 103,978 thousand yen in net defined benefit asset and 176,328 thousand yen in retained earnings at the beginning of thecurrent fiscal year. The effect of this change was to increase operating income, ordinary income and income before income taxes andminority interests by 5,881 thousand yen each in the current fiscal year.
Net assets per share and net income per share increased 33.60 yen and 0.72 yen, respectively.

Accounting Standards, Others That Have Not Yet Been Applied
Not applicable.

Reclassifications
Retirement Benefits
In line with revisions to the “Guidance on Accounting Standard for Retirement Benefits (ASBJ Guidance No. 25, March 26, 2015),”
we have revised the disclosure method of notes related to retirement benefits based on a multi-employer plan and have reclassified
the consolidated financial statements for the previous fiscal year.
The content of consolidated financial statement reclassifications and amounts pertaining to major line items in the consolidated
financial statements for the previous consolidated fiscal year are shown in the appropriate locations.

Changes in Accounting-based Estimates
Not applicable.

Additional Information
Not applicable.

20

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/15

Notes to Consolidated Balance Sheet*1. Accumulated depreciation on investments and other assets (other)(Thousands of yen)
FY3/14(As of Mar. 31, 2014)

FY3/15(As of Mar. 31, 2015)
188,964

192,058*2. Assets pledged as collateral and liabilities with collateral
Assets pledged as collateral
FY3/14(As of Mar. 31, 2014)
57,751
142,361
130,553
330,666

Buildings and structures, net
Land
Investments and other assets (other)
Total(Thousands of yen)
FY3/15(As of Mar. 31, 2015)
54,221
142,361
131,359
327,942

Liabilities with collateral
FY3/14(As of Mar. 31, 2014)
Short-term loans payable
Long-term loans payable

-

Total

(Thousands of yen)
FY3/15(As of Mar. 31, 2015)-

3. The Company has commitment line agreements with 4 banks, in order to raise funds efficiently. The balances of credit
available as of the balance sheet date were as follows.
(Thousands of yen)
FY3/14
FY3/15(As of Mar. 31, 2014)(As of Mar. 31, 2015)
Commitment line
500,000
500,000
Credit used
Credit available
500,000
500,000

Notes to Consolidated Statement of Income*1. Major items of selling, general and administrative expenses(Thousands of yen)
FY3/14
FY3/15(Apr. 1, 2013 – Mar. 31, 2014) (Apr. 1, 2014 – Mar. 31, 2015)
158,732
136,122
726,462
787,436
89,62780,88926,805
18,94024,332
22,77832,164
32,779156,706
269,095

Directors’ compensations
Wages, salaries and other allowances
Provision for bonuses
Provision for directors’ bonuses
Provision for directors’ retirement benefits
Retirement benefit expenses
Research and development expenses*2. Total amount of research and development expenses included in general and administrative expenses(Thousands of yen)
FY3/15(Apr. 1, 2014 – Mar. 31, 2015)
269,095

FY3/14(Apr. 1, 2013 – Mar. 31, 2014)
156,706

21

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/15

Notes to Consolidated Statement of Changes in Equity
FY3/14 (Apr. 1, 2013 – Mar. 31, 2014)
1. Type of share and the number of outstanding shares and treasury shares
Number of shares
as of Apr. 1, 2013

(Shares)

Increase

Number of shares
as of Mar. 31, 2014

Decrease

Outstanding shares
Common stock (Note 1)

5,128,330

465,900-

5,594,230

Total

5,128,330

465,900-

5,594,230

Common stock (Note 2)

364,14070-

364,210

Total

364,14070-

364,210

Treasury shares

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

Item

Reportingcompany

Subscription rights toshares (2011)

Number of shares under subscription rights to shares
Type of shares
Balance as of(Shares)underMar. 31, 2014
subscription
As of Apr. 1,
As of Mar. 31, (Thousands of
Increase
Decreaserights to shares
yen)
2013
2014
Common stock

974,900-

465,900

509,000

514-

974,900-

465,900

509,000

514

Total

Notes: 1. Number of shares under subscription rights to shares is the number of shares assuming that all subscription rights havebeen exercised.
2. Number of subscription rights to shares (2011) decreased due to the exercise of subscription rights to shares.
3. Dividends(1) Dividend payment
Resolution

Total dividends(Thousands of yen)Type of share

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

Dividend pershare (yen)Record date

Effective date25

March 31, 2013

June 6, 2013

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

Type ofshare

Total dividends(Thousands ofyen)

Source of funds

Board of Directors’ meeting on
May 12, 2014

Commonstock

130,750

Retained earnings

22

Dividend pershare (yen)Record date

25 March 31, 2014

Effective dateJune 6, 2014

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/15

FY3/15 (Apr. 1, 2014 – Mar. 31, 2015)
1. Type of share and the number of outstanding shares and treasury shares
Number of shares
as of Apr. 1, 2014

(Shares)

Increase

Number of shares
as of Mar. 31, 2015

Decrease

Outstanding shares
Common stock (Note)

5,594,230

18,000-5,612,230

Total

5,594,230

18,000-5,612,230

Common stock

364,210--364,210

Total

364,210--364,210

Treasury shares

Note: Number of outstanding shares of common stock increased 18,000 shares due to exercise of subscription rights to shares.
2. Items related to subscription rights to shares and treasury subscription rights to shares
Subscription rights toshares (itemized)

Item

Reportingcompany

Subscription rights toshares (2011)

Number of shares under subscription rights to shares
Type of shares
Balance as of(Shares)underMar. 31, 2015
subscription
As of Apr. 1,
As of Mar. 31, (Thousands of
Increase
Decreaserights to shares
yen)
2014
2015
Common stock

509,000-

509,000---

509,000-

509,000

-

-

Total

Notes: 1. Number of shares under subscription rights to shares is the number of shares assuming that all subscription rights havebeen exercised.
2. Subscription rights to shares (2011) were extinguished, as the April 11, 2014 deadline for the exercise period has passed.
3. Dividends(1) Dividend payment
Resolution

Total dividends(Thousands of yen)Type of share

Board of Directors’ meeting on
Common stock
May 12, 2014

Dividend pershare (yen)Record date

Effective date25

March 31, 2014

June 6, 2014

130,750(2) Dividends with a record date in the current fiscal year but an effective date in the following fiscal year
Resolution

Type ofshare

Total dividends(Thousands ofyen)

Source of funds

Board of Directors’ meeting on
May 14, 2015

Commonstock

131,200

Retained earnings

Dividend pershare (yen)Record date

25 March 31, 2015

Effective dateJune 5, 2015

Notes to Consolidated Statement of Cash Flows*1. Reconciliation of cash and cash equivalents at the end of the fiscal year and amount of balance sheet is made as follows.
(Thousands of yen)
FY3/14
FY3/15(Apr. 1, 2013 – Mar. 31, 2014)(Apr. 1, 2014 – Mar. 31, 2015)
Cash and deposits
3,319,585
2,762,276
Time deposit with maturities over 3 months(1,175,514)(1,202,532)

Cash and cash equivalents

2,144,070

1,559,743

23

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/15

Marketable Securities
1. Held-to-maturity debt securities
FY3/14 (As of Mar. 31, 2014)(Thousands of yen)
Type
Securities with fair value
exceeding carrying value
Securities with fair value
not exceeding carrying
value

Carrying value

Fair value

Unrealized gain (loss)

Corporate bonds

-

-

-

Others---Subtotal---

Corporate bonds

-

-

-

Others

-

-

-

-

-

-

-

-

-

Subtotal
Total

FY3/15 (As of Mar. 31, 2015)(Thousands of yen)
Type
Securities with fair value
exceeding carrying value
Securities with fair value
not exceeding carrying
value

Carrying value

Fair value

Unrealized gain (loss)

Corporate bonds

-

-

-

Others---Subtotal---

Corporate bonds

205,502203,200(2,302)---

205,502203,200(2,302)

205,502203,200(2,302)OthersSubtotal
Total

2. Available-for-sale securities
FY3/14 (As of Mar. 31, 2014)(Thousands of yen)
Type
Securities with carrying
value exceedingacquisition costs

Carrying value

Unrealized gain (loss)

262,709200,260

62,449Bonds

99,92081,327

18,593

Subtotal

Securities with carrying
value not exceedingacquisition costs

Acquisition costs

Shares362,629

281,587

81,042

Shares

-

-

-

Bonds

-

-

-

Subtotal
Total

-

-

-

362,629

281,587

81,042

FY3/15 (As of Mar. 31, 2015)(Thousands of yen)Type

Carrying value

Acquisition costs

Unrealized gain (loss)

Securities with carrying
value exceedingacquisition costs

Shares176,501

102,647

73,854

Bonds

104,850

81,327

23,523281,351

183,974

97,377

Securities with carrying
value not exceedingacquisition costs

Shares93,179100,010(6,831)

Bonds

-

-

-

93,179100,010(6,831)

374,530

283,984

90,545

Subtotal

Subtotal
Total

24

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/15

3. Sales of other securities
FY3/14 (Apr. 1, 2013 – Mar. 31, 2014)
Type(Thousands of yen)
Sales amount

Aggregate gain

Aggregate loss

Shares

-

-

-

Bonds

1,005

306

-

-

-

-

1,005

306

-

OthersTotal
FY3/15 (Apr. 1, 2014 – Mar. 31, 2015)
Type(Thousands of yen)
Sales amount

Aggregate gain

Aggregate loss

Shares

-

-

-

Bonds

-

-

-

Others

-

-

-

-

-

-

Total
4. Other securities written down due to impairment
Not applicable in FY3/14 and FY3/15.

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

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

25

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/15

Retirement Benefits
FY3/14 (Apr. 1, 2013 – Mar. 31, 2014)
1. Retirement benefit plans
The Company has adopted defined benefit plans, which are a lump-sum retirement benefit payment plan in line with theCompany’s regulation, and a defined benefit pension plan as well as a defined contribution pension plan. The Company
participates in the Japan Computer Information Service Employee’s Pension Fund, and this welfare pension fund is applied by
the exceptional treatment as stipulated by Clause 33 of the Practical Guidance for Accounting for Retirement Benefits. The
amount to be contributed to plan assets accounted for as retirement benefit expenses was 29,547 thousand yen in the consolidated
financial statements for FY3/14.
Alpha Computer Co., Ltd. has adopted a lump-sum retirement benefit payment plan as defined benefit plan, and participates in
the Kanto IT Software Welfare Pension Fund. The amount to be contributed to plan assets accounted for as retirement benefit
expenses was 1,392 thousand yen in the consolidated financial statements for FY3/14.
NewNeeds Co., Ltd. participates in the Small Enterprise Retirement Allowance Mutual Aid Fund for retirement fund. The
amount to be contributed to plan assets accounted for as retirement benefit expenses was 2,040 thousand yen in the consolidated
financial statements for FY3/14.
An overseas consolidated subsidiary has a retirement benefit plan based on its local program.
Following is the information regarding the multi-employer pension plan under which the amount to be contributed to plan assets is
accounted for as retirement benefit expenses.
Japan Computer Information Service Employees' Pension Fund
(1) Information regarding funding status of the plan as a whole (as of March 31, 2013)(Thousands of yen)Amount of plan assets
553,988,242
Total of actuarial obligations based on pension finance581,269,229
accounting and the minimum actuarial reserve
Difference(27,280,986)(2) The percentage of contribution by the Company out of the total contribution to the plan
0.41% (From April 1, 2012 to March 31, 2013)
Kanto IT Software Welfare Pension Fund
(1) Information regarding funding status of the plan as a whole (as of March 31, 2013)(Thousands of yen)Amount of plan assets
222,956,639
Total of actuarial obligations based on pension finance
206,135,147
accounting and the minimum actuarial reserve
Difference
16,821,492(2) The percentage of contribution by the consolidated subsidiaries out of the total contribution to the plan
0.04% (From April 1, 2012 to March 31, 2013)
2. Defined benefit plans(1) Reconciliation of beginning and ending balances of retirement benefit obligation(Thousands of yen)
Retirement benefit obligations at beginning of period
1,592,443
Service cost
111,779
Interest cost
25,111
Actuarial differences
7,693
Payment of retirement benefit(66,749)
Others999
Retirement benefit obligations at end of period
1,671,278

26

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/15(2) Reconciliation of beginning and ending balances of plan assets(Thousands of yen)896,224
22,40588,46844,052(26,535)
1,024,615

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

903,730
646,729(4) Components of retirement benefit expenses(Thousands of yen)
111,779
25,111(22,405)(15,276)(488)
98,720Service cost
Interest cost
Expected return on plan assets
Amortization of actuarial differences
Amortization of prior service cost
Retirement benefit expenses for defined benefit plan(5) Remeasurements of defined benefit plans
Components of remeasurements of defined benefit plans(Thousands of yen)
1,881
139,656
141,538

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

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

27

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/15

FY3/15 (Apr. 1, 2014 – Mar. 31, 2015)
1. Retirement benefit plans
The Company has adopted defined benefit plans, which are a lump-sum retirement benefit payment plan in line with theCompany’s regulation, and a defined benefit pension plan as well as a defined contribution pension plan. The Company
participates in the Japan Computer Information Service Employee’s Pension Fund, and this welfare pension fund is applied by
the exceptional treatment as stipulated by Clause 33 of the Accounting Standard for Retirement Benefits. The amount to becontributed to plan assets accounted for as retirement benefit expenses was 30,349 thousand yen in the consolidated financial
statements for FY3/15.
Alpha Computer Co., Ltd. has adopted a lump-sum retirement benefit payment plan as defined benefit plan, and participates in
the Kanto IT Software Welfare Pension Fund. The amount to be contributed to plan assets accounted for as retirement benefit
expenses was 1,540 thousand yen in the consolidated financial statements for FY3/15.
NewNeeds Co., Ltd. participates in the Small Enterprise Retirement Allowance Mutual Aid Fund for retirement fund. The
amount to be contributed to plan assets accounted for as retirement benefit expenses was 1,908 thousand yen in the consolidated
financial statements for FY3/15.
An overseas consolidated subsidiary has a retirement benefit plan based on its local program.
Following is the information regarding the multi-employer pension plan under which the amount to be contributed to plan assets is
accounted for as retirement benefit expenses.
Japan Computer Information Service Employees' Pension Fund
(1) Information regarding funding status of the plan as a whole (as of March 31, 2014)(Thousands of yen)Amount of plan assets
636,261,314
Total of actuarial obligations based on pension finance
648,005,851
accounting and the minimum actuarial reserve (Note)
Difference(11,744,536)
Note: In the previous fiscal year, this item was shown as “amount of actuarially computed benefit obligation.”(2) The percentage of contribution by the Company out of the total contribution to the plan
0.42% (From April 1, 2013 to March 31, 2014)
Kanto IT Software Welfare Pension Fund
(1) Information regarding funding status of the plan as a whole (as of March 31, 2014)(Thousands of yen)Amount of plan assets
252,293,875
Total of actuarial obligations based on pension finance
227,330,857
accounting and the minimum actuarial reserve (Note)
Difference
24,963,018
Note: In the previous fiscal year, this item was shown as “amount of actuarially computed benefit obligation.”(2) The percentage of contribution by the consolidated subsidiaries out of the total contribution to the plan
0.05% (From April 1, 2013 to March 31, 2014)28

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/15

2. Defined benefit plans(1) Reconciliation of beginning and ending balances of retirement benefit obligation(Thousands of yen)
Retirement benefit obligations at beginning of period
1,671,278
Cumulative effects of changes in accounting policies(273,802)
Restated balance
1,397,476
Service cost
121,808
Interest cost
14,634
Actuarial differences(6,274)
Payment of retirement benefit(60,688)
Others
1,193
Retirement benefit obligations at end of period
1,468,150(2) Reconciliation of beginning and ending balances of plan assets(Thousands of yen)
1,024,615
25,615
107,636
45,210(25,511)
1,177,566

Plan assets at beginning of period
Expected return on plan assets
Actuarial differences
Contributions by the employer
Payment of retirement benefit
Plan assets at end of period(3) Reconciliation of ending balances of retirement benefit obligation and plan assets against net defined benefit liability and net
defined benefit asset recognized in the consolidated balance sheet(Thousands of yen)
Retirement benefit obligation of contributory plan
695,989
Plan assets(1,177,566)(481,576)
Retirement benefit obligation of non-contributory plan
772,160
Net liability / asset recognized in the consolidated balance sheet
290,583
Net defined benefit liability
Net defined benefit asset
Net liability / asset recognized in the consolidated balance sheet

772,160(481,576)
290,583(4) Components of retirement benefit expenses(Thousands of yen)
121,808
14,634(25,615)(28,769)(387)
81,670Service cost
Interest cost
Expected return on plan assets
Amortization of actuarial differences
Amortization of prior service cost
Retirement benefit expenses for defined benefit plan(5) Remeasurements of defined benefit plans, net of tax
Components of remeasurements of defined benefit plans, net of tax(Thousands of yen)
(387)
85,14084,753

Prior service costs
Actuarial differences
Total(6) Remeasurements of defined benefit plans, cumulative
Components of remeasurements of defined benefit plans(Thousands of yen)
1,494
224,797
226,291

Unrecognized prior service costs
Unrecognized actuarial differences
Total

29

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/15(7) Relevant information on plan assets
1) Major breakdown of plan assets
The allocation percentage by major investment category to the total amount of plan assets is presented as follows.
(%)
Bonds
53
Shares44
Cash and deposits
3
Total
100
2) Method of determining expected long-term return on assets
The expected long-term return on plan assets is determined by considering the current and expected portfolio structure of the plan
assets as well as the current and expected future long-term rate of return on various investments that comprise the plan assets.
(8) Relevant information on assumptions for actuarial calculation
Principal assumptions for actuarial calculation at the end of the fiscal year under review (presented by the weighted average).
Discount rate: 1.07%
Expected long-term return on assets: 2.5%
3. Defined contribution plan
The amount to be contributed to the defined contribution plan for the Company and its consolidated subsidiaries was 68,913
thousand yen.

Stock Options
Not applicable.

30

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/15

Tax Effect Accounting
1. Significant components of deferred tax assets and liabilities
FY3/14(As of Mar. 31, 2014)
Deferred tax assets (current)
Provision for bonuses
Accrued expenses
Accounts payable-otherAccrued business office taxes
Other
Total
Deferred tax assets (non-current)
Provision for directors’ retirement benefits
Net defined benefit liability
Allowance for doubtful accounts
Real estate for rent (land)
Asset retirement obligations
Accounts payable-other
Other
Subtotal deferred tax assets
Valuation allowance
Total
Deferred tax liabilities (non-current)
Valuation difference on available-for-sale securities
Other
Total
Net deferred tax assets(Thousands of yen)
FY3/15(As of Mar. 31, 2015)

189,435
27,694
6,943
23,683
11,606259,362

146,758
21,642
17,4559,489
6,724
202,070

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

114,389
91,742
17,556
18,33328,492
14,62339,166324,304(212,730)
111,573

28,851
18,77747,628234,645

29,28225,07154,35457,2192. Significant sources of differences between the statutory tax and effective tax rate(%)
FY3/14(As of Mar. 31, 2014)

FY3/15(As of Mar. 31, 2015)

Statutory tax rate
Adjustments
Permanent difference of entertainment expenses and other items
Residential tax for the period
Increase in valuation allowance
Adjustment due to tax rate change
Tax credit
Others
Effective tax rate
Note: Difference between statutory and effective tax rate after tax effect accounting is not presented because the difference isless than 5% of statutory effective tax in FY3/14.

35.6
1.9
1.2
6.6
7.1
(5.6)
0.6
47.4

3. Revised amount of deferred tax assets and deferred tax liabilities following the change in the corporate tax rate, etc.
Following the promulgation on March 31, 2015 of the “Act for Partial Revision of the Income Tax Act, etc.” (Act No. 9 of 2015),
and “Act for Partial Revision of the Local Tax Act, etc.” (Act No. 2 of 2015), corporate tax rate, etc. have been revised for the fiscal
years beginning on or after April 1, 2015. Consequently, the statutory effective tax rate for the calculation of deferred tax assets anddeferred tax liabilities will be lowered from 35.6% to 33.1% for temporary differences that are expected to be used in the fiscal year
beginning April 1, 2015. The rate will be lowered further, to 32.3%, for temporary differences that are expected to be used in thefiscal year beginning April 1, 2016.
Due to this change in tax rates, there were a decrease of 20,411 thousand yen in deferred tax assets (after deducting deferred tax
liabilities) and increases of 30,740 thousand yen in income taxes-deferred, 2,951 thousand yen in valuation difference on
available-for-sale securities, and 7,377 thousand yen in remeasurements of defined benefit plans.

31

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/15

Business Combinations
Not applicable.
Segment and Other Information
Segment information
1. Overview of reportable segment
Segments used for financial reporting are the Company and subsidiaries’ constituent units for which separate financial information isavailable and for which the Board of Directors performs periodic studies for the purposes of determining the allocation of resourcesand evaluating performance.
The Group has four reportable business segments: software business, package business, system sales business and medical big databusiness each of which conducts its business in line with the comprehensive strategy it has devised for products and services in both
domestic and overseas markets.
The software business handles the contracted software development. The package business is engaged in development, sale, andprovision of related services of operational reform packages for schools. The system sales business conducts IT equipment sales,
IT/telecom infrastructure construction. The medical big data business, which includes a full line of services including automatedinspection services for health insurance claims, data analysis and notification of the cost of medical care.
2. Calculation method for net sales, profit or loss, assets, liabilities, and other items for each reportable segment
The accounting method used for reportable business segments is generally the same as the methods listed in “Significant Accounting
Policies in the Preparation of Consolidated Financial Statements.”
Profits for reportable business segments are operating income figures.
Inter-segment sales and transfers are based on market prices.
Application of the accounting standard for retirement benefits
The Company has applied the “Accounting Standard for Retirement Benefits (Accounting Standards Board of Japan (ASBJ)
Statement No. 26, May 17, 2012)” and the “Guidance on Accounting Standard for Retirement Benefits (ASBJ Guidance No. 25,
March 26, 2015)” from the current fiscal year, for provisions set forth in the main clauses of Paragraph 35 of the AccountingStandard for Retirement Benefits and Paragraph 67 of the Guidance on Accounting Standard for Retirement Benefits.
Accordingly, the Company reviewed the methods for calculating retirement benefit obligations and service costs, and revised themethod of attributing estimated retirement benefit obligations to periods from the straight-line basis to the benefit formula basis,and revised the method of determining the discount rate from the method using the approximate number of years of expected
average length of remaining service period of employees to the method using a single weighted average discount rate. The effectof this change on segment profit is insignificant.

32

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/15

3. Information related to net sales, profit or loss, assets, liabilities, and other items for each reportable segment
FY3/14 (Apr. 1, 2013 – Mar. 31, 2014)(Thousands of yen)

Softwarebusiness

Packagebusiness

Systemsales
business

Medical big
databusiness

7,110,634

1,949,373

1,533,039

17,690-55,478

7,128,325

1,949,373

1,588,517

278,545296,960

41,219(194,966)

4,582,224

1,304,269

934,698

339,573

Total

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

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

235,351 10,828,399-

10,828,399

73,169(73,169)-

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

10,828,399

421,759

5,855

427,615

7,160,766

1,656,438

8,817,204-

Other items
Depreciation
50,146
21,7801,844
12,71086,48286,482
Increase in property, plant andequipment and intangible
4,838
1,270
986
16,12923,22487,168110,392
assets
Notes:
1. Segment profit (loss) represents eliminations for inter-segment transactions.
2. Segment assets in the above adjustment consist mainly of corporate assets that cannot be attributed to any of thereportable segments.
3. Segment profit (loss) is adjusted with operating income shown on the consolidated statement of income.
FY3/15 (Apr. 1, 2014 – Mar. 31, 2015)(Thousands of yen)

Softwarebusiness

Packagebusiness

Systemsales
business

7,823,402

2,131,478

1,131,123

67,233-33,694

7,890,636

2,131,478

204,479
4,434,169

Medical big
databusiness

Total

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

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

419,100 11,505,104-

11,505,104

100,928(100,928)-

1,164,817

419,100 11,606,033(100,928)

11,505,104

271,659(28,990)(84,030)

363,118563

363,681

1,393,463

825,288355,084

7,008,006

1,709,746

8,717,753-

Other items
Depreciation
78,847
21,1992,416
14,260116,724
116,724
Increase in property, plant andequipment and intangible
5,684
4,612
9,339
5,319
24,956
122,109
147,066
assets
Notes:
1. Segment profit (loss) represents eliminations for inter-segment transactions.
2. Segment assets in the above adjustment consist mainly of corporate assets that cannot be attributed to any of thereportable segments.
3. Segment profit (loss) is adjusted with operating income shown on the consolidated statement of income.
Related information
1. Information by product or service
This information is omitted because the same information is presented in segment information.
2. Information by region(1) Net sales
Geographical information concerning sales to external customers in Japan is not presented since sales to external customers
exceeded 90% of net sales shown on the consolidated statement of income.
(2) Property, plant and equipment
Geographical information concerning property, plant and equipment is not presented since property, plant and equipment in Japanexceed 90% of property, plant and equipment on the consolidated balance sheet.

33

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/15

3. Information by major client
FY3/14 (Apr. 1, 2013 – Mar. 31, 2014)
Company name

Net sales

DUSKIN CO., LTD.

Business segment

847,635 thousand yen

Software business

FY3/15 (Apr. 1, 2014 – Mar. 31, 2015)
Company name
NTT COMWARE CORPORATIONNet sales

Business segment

1,021,979 thousand yen

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

Information related to goodwill amortization and the unamortized balance for each reportable segment
FY3/14 (Apr. 1, 2013 – Mar. 31, 2014)
Softwarebusiness

Packagebusiness

System sales
business

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

Amortization for the period

8,314

-

-

-

-

8,314

Balance at the end of period

27,023----27,023

FY3/15 (Apr. 1, 2014 – Mar. 31, 2015)
Softwarebusiness

Packagebusiness

System sales
business

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

Amortization for the period

8,236

-

-

-

-

8,236

Balance at the end of period

18,001----

18,001

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

Related Party Information
Not applicable.

34

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/15

Per-share Information
FY3/14(Apr. 1, 2013 – Mar. 31, 2014)(Yen)
FY3/15(Apr. 1, 2014 – Mar. 31, 2015)

Net assets per share954.53

1,020.03

Net income per share

57.03

43.56

Diluted net income per share

56.20

-

Notes: 1. Diluted net income per share is not shown for FY3/15 as no potentially dilutive shares exist following the April 11,
2014 conclusion of the exercise period for subscription rights to shares.
2. The basis of calculation is as follows.
(Thousands of yen)
FY3/14
FY3/15(As of Mar. 31, 2014)(As of Mar. 31, 2015)
Net assets per share
5,066,409

5,433,007

Deduction on total net assets

74,20079,875[Subscription rights to shares]

[514]

[-]

Total net assets on balance sheet[Minority interests][73,686][79,875]

Net assets applicable to common stock

4,992,209

5,353,131

5,230,020 shares

5,248,020 shares

Number of common stock used in calculation of net
assets per share(Thousands of yen)
FY3/15(Apr. 1, 2014 – Mar. 31, 2015)

FY3/14(Apr. 1, 2013 – Mar. 31, 2014)
Net income per share

228,579

278,922

Net income--

278,922

228,579

4,890,856 shares

5,247,753 shares--

Increase in common stock

72,340 shares- shares[Subscription rights to shares][72,340 shares][- shares]

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

Summary of potential stock not included in thecalculation of diluted net income per share since there
was no dilutive effect--Note: As noted in the section “Changes in Accounting Policies,” the Company has started to apply the Accounting Standard for
Retirement Benefits, etc. based on the transitional accounting treatments set forth in Clause 37 of the Accounting Standard
for Retirement Benefits.
As a result, net assets per share and net income per share increased 33.60 yen and 0.72 yen, respectively in FY3/15.

Subsequent Events
Not applicable.

Omission of Disclosure
Disclosure of the notes on consolidated statement of comprehensive income, financial instruments, asset retirement obligations
and rental and other properties was omitted due to the minor necessity of disclosure.

35

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/15

6. Non-consolidated Financial Statements(1) Balance Sheet(Thousands of yen)
FY3/15(As of Mar. 31, 2015)

FY3/14(As of Mar. 31, 2014)
AssetsCurrent assets
Cash and deposits

2,605,211

Notes receivable-trade

1,943,231

25,408*2

Accounts receivable-trade2,167,044

52,284*2

2,493,905

Merchandise and finished goods

7,881

14,914Work in process

97,750206,588

Raw materials and supplies

2,312

3,007

Prepaid expenses

92,67996,353

Deferred tax assets

243,183*2

Accounts receivable-other

185,926
*2

3,246

1,735

Other

11,178

9,877

Allowance for doubtful accounts(3,466)(4,268)5,252,430

5,003,556

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

Buildings

275,722

Structures*1

Tools, furniture and fixtures

68,453*1Land
Total property, plant and equipment

*1

*1

93

142,361

328,27562

85,636*1

142,361

486,630

556,335

101,051

152,810Intangible assets
SoftwareTelephone subscription right
Total intangible assets

6,180

6,180

107,231

158,990362,629580,032

1,049,903

997,367

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

*2

26,232

131,510275,684

Long-term time deposits

300,000

100,000

Deferred tax assets

276,268

121,223

Guarantee deposits

274,784*1

Real estate for rent

130,553

310,756*1

131,359

Membership

45,32445,324

Insurance funds

33,306

65,587

Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets

36

9,738

9,738

(54,288)(67,404)

2,559,731

2,595,903

3,153,593

3,311,228

8,406,023

8,314,784

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/15(Thousands of yen)
FY3/15(As of Mar. 31, 2015)

FY3/14(As of Mar. 31, 2014)
Liabilities
Current liabilities
Accounts payable-trade*2

562,378*2555,967

Accounts payable-other*2

160,525*2

158,282

Accrued expenses

208,650

193,427

Income taxes payable272,129

67,535

Accrued consumption taxes

80,571145,043

Advances received

48,46861,883

Provision for bonuses

493,202405,302

Provision for directors’ bonuses

21,93813,124Other

21,35321,051

1,869,218

1,621,619

Provision for retirement benefits

889,969

756,168

Provision for directors’ retirement benefits

376,105

298,432-

4,896

Total current liabilities
Non-current liabilities

Provision for loss on guarantees
Other

55,438130,548

1,321,513

1,190,044

3,190,731

2,811,664

1,071,446

1,076,669

Legal capital surplus

1,033,084

1,038,308

Total capital surpluses

1,033,084

1,038,308

32,66532,6652,999,000

3,159,000

292,929

401,753

3,324,594

3,593,418

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

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

Total shareholders’ equity

5,162,586

5,441,856

Valuation difference on available-for-sale securities

52,191

61,263

Total valuation and translation adjustments

52,191

61,263514-

5,215,292

5,503,120

8,406,023

8,314,784

Valuation and translation adjustments

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

37

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/15(2) Statement of Income
FY3/14(Apr. 1, 2013 – Mar. 31, 2014)(Thousands of yen)
FY3/15(Apr. 1, 2014 – Mar. 31, 2015)

Net sales

8,640,137

9,682,373

Cost of sales

6,895,403

7,725,869

Gross profit

1,744,734*1

Selling, general and administrative expenses
Operating income

1,341,586

1,956,504*1

1,582,437

403,147

374,066

Interest and dividend income

41,74738,094

Rent income

13,696

13,569Commission fee

1,864

1,804

Non-operating income

Interest on securities

2,400

2,793

Subsidy income

19,386

20,637

Other

6,715

6,891

Total non-operating income

85,81083,791

Interest expenses

853

1,082

Rent expenses

15,845

8,886

-

4,896

Provision of allowance for doubtful accounts

19,224

13,116

Other

2,333

1,758

Non-operating expenses

Provision for loss on guarantees

Total non-operating expenses
Ordinary income

38,25629,739450,701

428,119

Extraordinary losses
Loss on valuation of shares of subsidiaries and associates
Total extraordinary losses
Income before income taxes-

20,535-

20,535

450,701

407,583

Income taxes-current

269,175

69,941

Income taxes-deferred(111,126)

114,396

Total income taxes

158,049

184,337

Net income

292,651

223,24538

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/15(3) Statement of Changes in Equity
FY3/14 (Apr. 1, 2013 – Mar. 31, 2014)(Thousands of yen)
Shareholders’ equity
Capital surplus

Retained earnings
Other retained earnings

Capitalstock

Balance at beginning ofcurrent period
Cumulative effects of changes
in accounting policies
Restated balance

LegalcapitalsurplusTotal
capitalsurplus924,223885,862924,223

147,222

Legalretainedearnings

Total
Treasuryshareholders’sharesequityTotal
retainedearnings

Generalreserve

Retainedearnings
brought
forward885,862 32,665

3,000,000

118,382

3,151,047(266,494)

4,694,639

885,862

885,862 32,665

3,000,000

118,382

3,151,047(266,494)

4,694,639

147,222

147,222

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

294,445

Provision of general reserve

1,000

-

-

Dividends of surplus(1,000)(119,104)(119,104)(119,104)

Net income

292,651

292,651

292,651

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

147,222

147,222

(44)

(44)

-

(1,000)174,547

173,547(44)

467,947

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

2,999,000

292,929

3,324,594(266,539)

5,162,586

Valuation and translation adjustments
Valuation difference on
available-for-salesecurities
Balance at beginning ofcurrent period
Cumulative effects of changes
in accounting policies
Restated balance

Total valuation andtranslation adjustments

Subscription rights tosharesTotal net assets

34,587

34,587984

4,730,211

34,587

34,587984

4,730,211

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

294,445

Provision of general reserve-

Dividends of surplus(119,104)

Net income

292,651

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

17,604(470)

17,133

17,604

17,604(470)

485,081

52,191

52,191514

5,215,292

39

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/15

FY3/15 (Apr. 1, 2014 – Mar. 31, 2015)(Thousands of yen)
Shareholders’ equity
Capital surplus

Retained earnings
Other retained earnings

Capitalstock

Balance at beginning of
1,071,446
current period
Cumulative effects of changes
in accounting policies
Restated balance

1,071,446

LegalcapitalsurplusTotal
capitalsurplusLegalretainedearnings

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

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

Total
Treasuryshareholders’sharesequityTotal
retainedearnings

Generalreserve

Retainedearnings
brought
forward2,999,000

292,929

3,324,594

176,328

176,328

469,258

3,500,923

2,999,000(266,539)

5,162,586
176,328(266,539)

5,338,915

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

5,223

5,223

5,223

10,446

Provision of general reserve

160,000(160,000)--

Dividends of surplus(130,750)(130,750)(130,750)

Net income

223,245

223,245

223,245

Purchase of treasury shares
Net changes of items otherthan shareholders’ equity
Total changes of items during
periodBalance at end of current
period5,223
1,076,669

5,223

5,223

-

160,000(67,504)

92,495-102,941

1,038,308 1,038,308 32,665

3,159,000

401,753

3,593,418(266,539)

5,441,856

Valuation and translation adjustments
Valuation difference on
available-for-salesecurities
Balance at beginning ofcurrent period
Cumulative effects of changes
in accounting policies
Restated balance

Total valuation andtranslation adjustments

52,191

52,191

Subscription rights tosharesTotal net assets

514

5,215,292
176,328

52,191

52,191514

5,391,621

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

10,446

Provision of general reserve-

Dividends of surplus(130,750)

Net income

223,245

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

9,071

9,071

(514)

8,557

9,071

9,071

(514)

111,499

61,263

61,263-

5,503,12040

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/15(4) Notes to Non-consolidated Financial Statements
Going Concern Assumption
Not applicable.

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

41

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/15(4) Real estate for rent
Declining-balance method, except for buildings acquired on or after April 1, 1998 (excluding attached structures) on which
depreciation is calculated by the straight-line method.
Useful life of principle assets is as follows:
Real estate for rent (building):
47 years
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 areprovided for general receivables based on the historical write-off ratio, and bad receivables based on case-by-case determinationof collectibility.
(2) Provision for bonuses
To provide for employee bonus obligation, an allowance is provided in the amount equal to the estimated bonus obligations.
(3) Provision for retirement benefits
To provide for accrued retirement benefits for employees, an allowance is provided based on projected benefit obligations andplan assets at the end of the current fiscal year.
The actuarial difference is expensed in the following fiscal years using the declining-balance method based on the certain years(10 years) within the average length of remaining service period of employees.
The prior service cost is expensed using the declining-balance method based on a certain years (10 years) within the average
length of remaining service period of employees from the year when it is recognized.
(4) Provision for directors’ retirement benefits
To provide for directors’ retirement benefits, an allowance is provided for the aggregate amount payable at the end of thecurrent fiscal year pursuant to the Company’s rules on directors’ retirement benefits.
(5) Provision for directors’ bonuses
To provide for directors’ bonuses, an allowance is provided in the amount equal to the estimated bonus obligations in thecurrent fiscal year.
(6) Provision for loss on guarantees
To prepare for losses associated with debt guarantees extended to related companies, the expected losses are booked in an
amount based on the financial condition and other aspects of companies that received these guarantees.
4. Recognition of revenues and expenses(1) Recognition criteria for revenues and cost of sales for contracted software production
1) Contracts of which the outcome can be reliably estimated
The percentage-of-completion standard (with the percentage of completion estimated on the cost-to-cost basis).
2) Other contracted work
The completed-contract standard.
5. Other significant accounting policies in the preparation of financial statements(1) Accounting method for retirement benefits
Accounting method for outstanding balance of unrecognized actuarial differences and unrecognized prior service costs related toretirement benefit is different from those for the consolidated financial statements.
(2) Accounting for consumption taxes
National and local consumption taxes are accounted by the tax-exclusion method.

42

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/15

Changes in Accounting Policies
Application of the accounting standard for retirement benefits
The Company has applied the “Accounting Standard for Retirement Benefits (Accounting Standards Board of Japan (ASBJ)
Statement No. 26, May 17, 2012)” and the “Guidance on Accounting Standard for Retirement Benefits (ASBJ Guidance No. 25,
March 26, 2015)” from the current fiscal year, for provisions set forth in the main clauses of Paragraph 35 of the AccountingStandard for Retirement Benefits and Paragraph 67 of the Guidance on Accounting Standard for Retirement Benefits. Accordingly,
the Company reviewed the methods for calculating retirement benefit obligations and service costs, and revised the method of
attributing estimated retirement benefit obligations to periods from the straight-line basis to the benefit formula basis, and revised themethod of determining the discount rate from the method using the approximate number of years of expected average length of theremaining service period of employees to the method using a single weighted average discount rate.
For the application of these accounting standards, etc. in accordance with the transitional accounting treatments set forth in Paragraph
37 of the Accounting Standard for Retirement Benefits, the adjustments associated with the change in calculation methods ofretirement benefit obligations and service costs are recorded in retained earnings at the beginning of the current fiscal year.
The result was decreases of 97,473 thousand yen in deferred tax assets and 169,824 thousand yen in provision for retirement benefits,
and increases of 103,978 thousand yen in prepaid pension cost and 176,328 thousand yen in retained earnings at the beginning of thecurrent fiscal year.
The effect of this change was to increase operating income, ordinary income and income before income taxes and minority interests
by 5,881 thousand yen each in the current fiscal year.
Net assets per share and net income per share increased 33.60 yen and 0.72 yen, respectively.

Reclassifications
Not applicable.

Changes in Accounting-based Estimates
Not applicable.

Additional Information
Not applicable.

Notes to Balance Sheet*1. Assets pledged as collateral and liabilities with collateral
Assets pledged as collateral
FY3/14(As of Mar. 31, 2014)
57,65893
142,361
130,553
330,666

Buildings
Structures
Land
Real estate for rent
Total

(Thousands of yen)
FY3/15(As of Mar. 31, 2015)
54,15962
142,361
131,359
327,942

Liabilities with collateral
FY3/14(As of Mar. 31, 2014)
Short-term loans payable
Long-term loans payable

-

Total

43

(Thousands of yen)
FY3/15(As of Mar. 31, 2015)-

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/15*2. Monetary claim or monetary liabilities to affiliates
FY3/14(As of Mar. 31, 2014)
37,09542,295

Short-term monetary claims
Long-term monetary claims
Short-term monetary liabilities(Thousands of yen)
FY3/15(As of Mar. 31, 2015)
52,431
26,232
68,105

3. Guarantee liabilities
Guarantees for affiliate’s bank loans(Thousands of yen)
FY3/14
FY3/15(As of Mar. 31, 2014)(As of Mar. 31, 2015)
JAST TECHNIQUES PTE. LTD.
21,29922,734
SafeNeeds Co., Ltd.
24,20031,800Foreign currency-denominated guarantees are translated into yen at the exchange rate in effect on the fiscal year balance sheet
date.

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

Commitment line
Credit used
Credit available(Thousands of yen)
FY3/15(As of Mar. 31, 2015)
500,000
500,000

Notes to Statement of Income*1. Selling expenses represent approximately 23% of the total selling, general and administrative expenses, and general andadministrative expenses approximately 77% in FY3/14, and selling expenses represent approximately 24% of the total selling,
general and administrative expenses, and general and administrative expenses approximately 76% in FY3/15.
Major items of selling, general and administrative expenses

Directors’ compensations
Wages, sales and other allowances
Provision for bonuses
Provision for directors’ bonuses
Retirement benefit expenses
Provision for directors’ retirement benefits
Depreciation
Research and development expenses
Rent expenses(Thousands of yen)
FY3/15
FY3/14(Apr. 1, 2013 – Mar. 31, 2014) (Apr. 1, 2014 – Mar. 31, 2015)
128,498
101,031569,175
518,90770,36563,64821,93813,124
27,21825,776
19,70016,886
24,83850,724
156,706
269,095
71,962
100,147

2. Transactions with subsidiaries and affiliates(Thousands of yen)
FY3/14
FY3/15(Apr. 1, 2013 – Mar. 31, 2014) (Apr. 1, 2014 – Mar. 31, 2015)
Amount of business transactions
Net sales
Operating expenses
Amount of non-business transactions

101,526
92,24928,59644

110,338
235,487
27,568

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/15

Marketable Securities
The subsidiary stock (997,367 thousand yen and 1,049,903 thousand yen were booked for subsidiaries on the balance sheet in
FY3/15 and FY3/14, respectively) do not have market prices which makes it extremely difficult to ascertain their fair value; thisinformation is therefore omitted.

Tax Effect Accounting
1. Significant components of deferred tax assets and liabilities(Thousands of yen)
FY3/15(As of Mar. 31, 2015)

FY3/14(As of Mar. 31, 2014)
Deferred tax assets (current)
Provision for bonuses

175,580

134,155

Accrued expenses

25,557

19,746

Accounts payable-other

6,943

17,455

Accrued business office taxes

22,699

8,958

Asset retirement obligations

6,908

-

Other

5,495

5,611

243,183

185,926

Provision for directors’ retirement benefits

133,893

96,512

Provision for retirement benefits

270,011

155,828

Allowance for doubtful accounts

19,326

21,798

Real estate for rent (land)

20,181

18,333

Asset retirement obligations

17,333

26,682

Shares of subsidiaries and associates

25,54529,847

Accounts payable-other

16,002

14,623Other

11,148

11,760Subtotal deferred tax assets

513,442375,387

Valuation allowance(190,386)(201,254)

323,056

174,132

Valuation difference on available-for-sale securities

28,851

29,282

Other

17,937

23,626

Total
Deferred tax assets (non-current)

Total
Deferred tax liabilities (non-current)

Total
Net deferred tax assets

46,78852,909276,268

121,223

2. Significant sources of differences between the statutory tax and effective tax rate(%)
FY3/14(As of Mar. 31, 2014)
Statutory tax rate
Adjustments
Permanent difference of entertainment expenses and otheritems
Residential tax for the period
Increase (decrease) in valuation allowance
Tax credit
Reductions of deferred tax assets at year end for
adjustment due to tax rate change
Others
Effective tax rate

45

FY3/15(As of Mar. 31, 2015)
38.0

35.6

0.0

(2.3)

1.1
(6.4)
(2.2)

1.3
7.6
(4.0)

4.5

7.0

0.1
35.1

45.2

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/15

3. Revised amount of deferred tax assets and deferred tax liabilities following the change in the corporate tax rate, etc.
Following the promulgation on March 31, 2015 of the “Act for Partial Revision of the Income Tax Act, etc.” (Act No. 9 of 2015),
and “Act for Partial Revision of the Local Tax Act, etc.” (Act No. 2 of 2015), corporate tax rate, etc. have been revised for the fiscal
years beginning on or after April 1, 2015. Consequently, the statutory effective tax rate for the calculation of deferred tax assets anddeferred tax liabilities will be lowered from 35.6% to 33.1% for temporary differences that are expected to be used in the fiscal year
beginning April 1, 2015. The rate will be lowered further, to 32.3%, for temporary differences that are expected to be used in thefiscal year beginning April 1, 2016.
Due to this change in tax rates, there were a decrease of 25,760 thousand yen in deferred tax assets (after deducting deferred tax
liabilities) and increases of 28,712 thousand yen in income taxes-deferred, and 2,951 thousand yen in valuation difference on
available-for-sale securities.

Subsequent Events
Not applicable.

7. Others(1) Changes in Directors
1) Changes in representative
Not applicable.
2) Changes in other directors
Candidate for director
Director

Shunichi Nakamura

Note: Mr. Shunichi Nakamura is a candidate for an external director.
3) Effective dateJune 19, 201546

Japan System Techniques Co., Ltd. (4323) Financial Results for FY3/15(2) Goods Manufactured, Orders Received and Sales
1) Goods Manufactured
Goods manufactured in the fiscal year under review are broken down by segment as follows.
(Thousands of yen)
FY3/15
Operating segment
Year-on-year (%)(Apr. 1, 2014 – Mar. 31, 2015)
Software business
112.9
6,576,342
Package business
1,269,746
106.6
System sales business
71.4
941,310
Medical big data business
361,550
114.7
Total
9,148,950
105.8
Notes: 1. The above amounts are based on cost of sales; inter-segment transactions have been eliminated.
2. The above amounts do not include consumption taxes.
2) Orders Received
Orders received in the fiscal year under review are broken down by segment as follows.
Operating segment
Orders received
Year-on-year (%)
Order backlog
Software business
8,044,490
118.0
1,267,946
Package business
2,337,366
120.8
604,499
System sales business
1,186,053
76.6
209,832
Medical big data business
425,958260.5
209,651
Total
11,993,869
114.6
2,291,929
Notes: 1. The above amounts are based on selling prices; inter-segment transactions have been eliminated.
2. The above amounts do not include consumption taxes.
3) Sales(Thousands of yen)
Year-on-year (%)
121.1
151.7
135.5
103.4
127.1

Sales in the fiscal year under review are broken down by segment as follows.
(Thousands of yen)
FY3/15
Operating segment
Year-on-year (%)(Apr. 1, 2014 – Mar. 31, 2015)
Software business
110.0
7,823,402
Package business
2,131,478
109.3
System sales business
73.8
1,131,123
Medical big data business
419,100
178.1
Total
11,505,104106.2
Notes: 1. Inter-segment transactions have been eliminated.
2. The following table indicates sales amounts to major customers and their ratios to total sales amount.
(Thousands of yen)
FY3/14
FY3/15(Apr. 1, 2013 – Mar. 31, 2014)(Apr. 1, 2014 – Mar. 31, 2015)
Customers
Customers
Amount%Amount%NTT COMWARE
NTT COMWARE
748,947
6.9
1,021,979
8.9
CORPORATIONCORPORATION
DUSKIN CO., LTD.
847,635
7.8 DUSKIN CO., LTD.
649,224
5.6
TIS Inc.
449,359
4.1 TIS Inc.
525,172
4.6
3. The above amounts do not include consumption taxes.
4. On July 1, 2014, NTT COMWARE CORPORATION merged its five regional group companies including NTT
COMWARE WEST CORPORATION. Accordingly, total sales amount of NTT COMWARE CORPORATION includes
results of NTT COMWARE WEST CORPORATION.

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

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