Notice: This document has been translated from Japanese original for reference purpose only, without any warranty as to its
accuracy or as to the completeness of the information. The Japanese original version is the sole official version.

Summary of Consolidated Financial Results for the Fiscal Year Ended December 31, 2022
[Japanese GAAP]
Company nameSecurities CodeFebruary 14, 2023
EM SYSTEMS CO., LTD.
Listed on :Tokyo Stock Exchange, First Section
ＵＲＬ https://emsystems.co.jp
4820
Hiromasa Kunimitsu, Representative director and President , Executive officer

Representative
Representative
Megumi Seki, Director, Executive officer
for inquiries
Scheduled date of Annual General Meeting of Shareholders:
Scheduled date of payment of dividend:
Scheduled date of filing of Annual Securities Report:
Preparation of supplementary materials for financial results:
Holding of financial results meeting:Tel: +81-6-6397-1888
March 23,2023
March 24,2023
March 23,2023
Yes
Yes (for securities analysts)（All amounts are rounded down to the nearest million yen）
1. Consolidated Financial Results for the Fiscal Year Ended December 31, 2022(January 1, 2022 – December 31, 2022)（Percentages represent year-on-year changes）(1) Consolidated management performance (total)
Net sales

Fiscal year ended
Dec. 31, 2022
Fiscal year ended
Dec. 31, 2021
（refer to）
comprehensive
incomeOperating profit

Millions ofyen％Millionsof yen％Millions ofyen％Millions ofyen％

16,919

17.2

2,395

28.1

2,791

7.0

1,893

3.5

14,436

－

1,870

－

2,607

－

1,829

－

Fiscal year ended
Dec. 31, 2021

1,850

Fiscal year ended
Dec. 31, 2022

1,949

Millions of yen

5.4%

Yen 100ths of a yen

Diluted net income pershare
Yen 100ths of a yen

26.75
25.72

Net income per share
Fiscal year ended
Dec. 31, 2022
Fiscal year ended
Dec. 31, 2021

Profit attributable toowners of parent

Ordinary profit

Return on equity

Millions ofyen－

Ordinary profit on Operating profit
total assets
to net sales

％

％

％

26.66

9.9

10.9

14.2

25.64

10.1

10.9

13.0

(Refer to) Equity in
Fiscal year ended
Fiscal year ended－ Millions of yen(218) Millions of yen
earnings of affiliates
Dec. 31, 2022
Dec. 31, 2021
(Note)
Following the approval of the "Partial Amendment to the Articles of Incorporation" at the 37th Ordinary General Meeting of
Shareholders held on June 16, 2020, as of the year ending December 2020, the company has changed the settlement date fromMarch 31st to December 31st. Due to the change of the settlement date, the company did not prepare consolidated financial
statements for the fiscal year 2021. Therefore, the year-on-year rate of change is not listed for the entire fiscal period of fiscal
year, 2021.
(2) Consolidated financial position
Total assets
As of Dec 31, 2022
As of Dec 31, 2021
(Refer to) Net capitalMillions of yen
26,34924,809As of Dec. 31, 2022

Capital adequacy ratio

Net assets

19,424

Millions of yen
19,503
18,826

％
73.7
75.5

Millions of yen

As of Dec. 31, 2021

Net assets per share
Yen 100ths of a yen

274.94263.12
18,728Millions of yen(3) Consolidated cash flows
Cash flows from operating Cash flows from investing Cash flows from financing Cash and cash equivalents
activities
activities
activities
at end of period
Fiscal year ended
Dec. 31, 2022
Fiscal year ended
Dec. 31, 2021

Yen 100ths of a yen

Yen 100ths of a yen

Yen 100ths of a yen

Yen 100ths of a yen

2,472

(577)

(1,319)

8,881

1,712

(544)

(693)

8,289

－

1 －

2. State of dividends
PayoutDividendratio
on equity
Total dividends(consolidate (consolidatd)ed)Annual dividends

Fiscal year ended
Dec. 31, 2021
Fiscal year ended
Dec. 31, 2022
Fiscal year ended
Dec. 31, 2023
(estimate)

End of 1stquarter

End of 2ndquarter

End of 3rdquarter

End of
term

Total

Yen
100ths of
a yen

Yen
100ths of
a yen

Yen
100ths of
a yen

Yen
100ths of
a yen

Yen
100ths ofa yenMillions of
yen

％

％

－

4.00

－

7.00

11.00

782

42.8

4.3

－

4.00

－

8.00

12.00

848

44.9

4.5

－

5.00

－

7.00

12.00

38.2

3. Estimated consolidated results of the Fiscal Year Ending December 31, 2023 (January 1, 2023 – December 31, 2023)

Net sales（Percentages represent year-on-year changes）
Net
Profit attributable toOrdinary profit
incomeowners of parent
per share

Operating profit

Millionsof yen％Millionsof yen％Millionsof yen％First half

9,342

14.4

1,033

(24.0)

1,290

Full year

19,608

15.9

2,827

18.0

3,333

Yen
100ths ofa yenMillions ofyen％(19.5)

827(24.0)

11.72

19.4

2,217

17.1

31.39

* Notes(1) Changes in significant subsidiaries during the period (changes in scope of consolidation): None
(2) Changes in accounting policies and accounting-based estimates, and restatements
1) Changes to accounting policies accompanying revision to accounting standards, etc.
: YES2) Changes to accounting policies other than 1.
: None3) Changes to estimates in accounting: None4) Revised restatement: None(3) Number of shares outstanding (ordinary stock)1.

Number of shares outstanding at endof term (including own stock)2.

Number of own shares at end of term

3.

Average number of shares outstanding
during term (quarterly total)

As of Dec. 31,
2022
As of Dec. 31,
2022
As of Dec. 31,
2022

74,514,800
shares3,865,149
shares70,801,285
shares

As of Dec. 31, 2021
As of Dec. 31, 2021
As of Dec. 31, 2021

74,514,800
shares3,335,617
shares71,111,841
shares(Refer to) Summary of Non-Consolidated Financial Results

1. Non-consolidated Financial Results for the Fiscal Year Ended December 31, 2022 (January 1, 2022 – December 31, 2022)(1) Non-consolidated operating results
Net sales

Fiscal year ended
Dec. 31, 2022
Fiscal year ended
Dec. 31, 2021

（Percentages represent year-on-year changes）
Operating profit

Ordinary profit

Net income

Millions ofyen％Millions ofyen％Millionsof yen％Millions ofyen％

16,066

18.2

2,157

24.7

2,838

12

1,967

(3.2)

13,597

－

1,730

－

2,534

－

2,033

－

Net income per share

Diluted net income pershare
Yen 100ths of a yen

Yen 100ths of a yen
Fiscal year ended
27.79
27.71
Dec. 31, 2022
Fiscal year ended
28.60
28.51
Dec. 31, 2021
(Note) Following the approval of the "Partial Amendment to the Articles of Incorporation" at the 37th Ordinary General Meeting of
Shareholders held on June 16, 2020, as of the year ending December 2020, the company has changed the settlement datefrom March 31st to December 31st. Due to the change of the settlement date, the company did not prepare consolidated
financial statements for the fiscal year 2021. Therefore, the year-on-year rate of change is not listed for the entire fiscal
period of fiscal year, 2021.

－

2 －(2) Non-consolidated financial position
Total assets
As of Dec. 31, 2022
As of Dec. 31, 2021
(Refer to)
Shareholders’ equity

Net assets

Millions of yen
25,23023,870
As of Dec.
31, 2022

18,922

Capital adequacy ratio

Millions of yen
18,977
18,217
Millions of
As of Dec.
31, 2021
yen

％
75.0
76.1
18,162

Net assets per share
Yen 100ths of a yen

267.83255.16
Millions ofyen* The current financial report is not subject to audit by certified public accountants or audit firms.
* Explanation of appropriate use of earnings forecasts, and other special items
Note concerning forward-looking statements
Estimates of future performance in this report are based on assumptions judged to be valid and information

available to the Company’s management at the time the materials were prepared, but are not promises by theCompany regarding future performance. Actual results may differ significantly from these forecasts for a numberof reasons. Please refer to “1. Overview of Results of Operations, (4) Outlook” on page 5 for forecast assumptions
and notes of caution for usage.

－

3 －TABLE OF CONTENTS OF ATTACHED MATERIALS
1. OVERVIEW OF MANAGEMENT PERFORMANCE, ETC ----------------------------------------------------- 5(1) EXPLANATION REGARDING OPERATING RESULTS -------------------------------------------------------------- 5(2) OVERVIEW OF FINANCIAL POSITION IN THE CURRENT PERIOD ------------------------------------------------- 6(3) CASH FLOWS ---------------------------------------------------------------------------------------------------- 6(4) OUTLOOK ------------------------------------------------------------------------------------------------------- 7
2. BASIC APPROACH TO THE SELECTION OF ACCOUNTING STANDARDS ------------------------------ 7
3. CONSOLIDATED FINANCIAL STATEMENTS AND MAJOR EXPLANATORY NOTES ------------------- 8(1) CONSOLIDATED BALANCE SHEET ------------------------------------------------------------------------------- 8(2) CONSOLIDATED STATEMENTS OF INCOME AND CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME-------------------------------------------------------------------------------------------------------------------- 10(3) CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ------------------------------------------------------ 13(4) CONSOLIDATED STATEMENT OF CASH FLOWS --------------------------------------------------------------- 15(5) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ------------------------------------------------------- 17－

4 －1. Overview of management performance, etc.
(1) Explanation regarding operating results
During the fiscal year ending December 31, 2022, the Japanese economy showed signs of recovery in some areas
due to the progress of nationwide novel coronavirus vaccination programs, but overall economic recovery slowed dueto the turbulent world situation and sudden fluctuations in the yen exchange rate. There are many causes forconcern, such as high resource prices and rising general prices, and the situation remains uncertain.
In the pharmacy industry, our main clients, the introduction of systems that enable online verification ofeligibility information using one’s Individual Number or health insurance card at the reception counter of medical
institutions, etc., which will, in principle, become mandatory from April 2023(Transitional measures apply until
September 2023) is accelerating due to revisions to the medical system enacted in April 2022. In addition, use of
these online eligibility verification systems, beginning in January 2023, will further strengthen the trend toward
digitization of the medical field, including the commencement of electronic processing of prescriptions, which are
currently paper-based.
Against this backdrop, we have been securing the materials and personnel necessary to install online eligibility
verification systems, and expanding the scope of installations to encompass customers who plan to initialize thesystem.
In July 2022, our group launched the business support system “MAPs for NURSING CARE” for nursing
care/welfare offices, and in December 2022 we launched the business support system “MAPs for PHARMACY DX”
for pharmacies. At the same time, in order to improve the Group's name recognition and expand sales of the nextgeneration MAPs series related products, the Group's first TV commercial was run for the FIFA World Cup and for
year-end TV programs, which have high viewer ratings. In order to support DX in the medical and nursing carefield, we will continue to rebuild our internal organizational structure and implement digital marketing to expand
our market share.
As a result, performance during the consolidated fiscal year concerned was 16,919 million yen in sales (a 17.2%
increase compared to the same period in the previous year), 2,395 million yen in operating profits (a 28.1% increase),
2,791 million yen in ordinary profits (a 7.0% increase), and 1,893 million yen in this quarterly net income belonging
to parent company shareholders (a 3.5% increase).
By segment results are as follows.
(ITS Systems and Related Business for Pharmacies)
In regard to IT systems and related business for pharmacies, the increase of initial sales due to expanded
incorporation of the online eligibility verification system, billing sales have also increased accompanying an increasein the number of customers.
In order to respond to the rapid changes in dispensing pharmacies and support pharmacy management centeredon patient services through pharmacy “DX”, and in line with the concept of the renewal of “MAPs for PHARMACY,”
which was released in 2019, “MAPs for PHARMACY DX" service was launched.
Consequently, IT Systems and Related Business for Pharmacies for this consolidated fiscal year resulted in
13,530 million yen in sales (a 20.5% increase compared with the same period in the previous year) and 3,031 million
yen in operating profits (a 63.6% increase).
(IT Systems and Related Business for Clinics)
Regarding IT systems and related business for Clinics, in order to expand the sales channels nationwide, we aretaking a wide range of approaches by utilizing web marketing in addition to the conventional method of developing
the clinic market.
In addition to an increase in initial sales due to expanded incorporation of the online eligibility verification
system, billing sales have also been bullish due to a steady increase in the number of billing customers who installed
MAPs for CLINIC, etc. At the same time, selling and administrative expenses have also increased due to initiatives
aimed at expanding our share of the market for clinic systems.
Consequently, IT Systems and Related Business for Clinics for this consolidated fiscal year resulted in 2,202
million yen in sales (a 12.5% increase compared to the same period in the previous year) and 409 million yen in
operating losses (previous period: 22 million yen in operating profits).

(IT Systems and Related Business for Long-term Care/Welfare)In our long-term care/welfare system business, billing sales remain bullish due to an increase in the number oflicenses, while initial sales decreased due to order of a large project during the same period in the previous year. In－

5 －addition, depreciation associated with the release of MAPs for NURSING CARE has commenced, and our sales andadministrative expenses have also risen due to our efforts in expanding sales channels.
Consequently, IT Systems and Related Business for Long-term Care/Welfare for this consolidated fiscal year
resulted in 539 million yen in sales (a 3.6% decrease compared with the same period in the previous year) and 211
million yen in operating losses (previous period: 12 million yen in operating losses)(Other businesses)
Sales have increased due to the expansion of our subsidiary cashless business. However, both sales and operating
profits have decreased in the pharmacy segment due to the effects of the COVID-19 pandemic.
Consequently, other business for this consolidated fiscal year resulted in 713 million yen in sales (a 1.1% decrease
compared to the same period in the previous year) and 42 million yen in operating losses (previous period: 27 million
yen in operating losses).
（Segmented sales and operating profits and losses are the amounts before elimination of internal transactions
between segments.）(2) Overview of financial position in the current period(Assets)
Current assets at the end of the current consolidated fiscal year were 13.849 billion yen, an increase of 1.274 billion
yen from the end of the previous consolidated fiscal year. This was mainly due to an increase of 591 million yen in cash
and deposits, 396 million yen in goods and products, and 205 million yen in notes and accounts receivable-trade as aresult of steady business performance. Fixed assets were 12.5 billion yen, an increase of 265 million yen from the endof the previous consolidated fiscal year. This result was mainly from a 585 million yen increase in investment securities
due to new acquisitions, etc.; a 180 million yen increase in software resulting from the full-scale operation of MAPs
for NURSING CARE, a business support system for nursing care and welfare facilities; a software in progress accountdecrease of 270 million yen; an investment real estate decrease of 213 million yen due to depreciation; a goodwill
decrease of 97 million yen; and finally, an increase in other investments of 78 million.
As a result, total assets were 26,349 million yen, an increase of 1,540 million yen compared to the end of theprevious consolidated fiscal year.
(Liabilities)
Current liabilities at the end of the current consolidated fiscal year were 4.944 billion yen, an increase of 777 million yen from theend of the previous consolidated fiscal year. This was mainly the result of an increase in notes and accounts payable-trade of 546 million
yen and accounts payable-other of 491 million yen, which reflected our strong overall performance; other current liabilities decrease of
1.204 billion yen; and finally, an increase of contract liabilities of 995 million yen. Fixed liabilities amounted to 1.901 billion yen, an
increase of 85 million yen from the end of the previous consolidated fiscal year. This was mainly the result of an increase of 72 million
yen in lease obligations.
As a result, total liabilities were 6.846 million yen, an increase of 863 million yen compared to the end of theprevious consolidated fiscal year.
(Net assets)
Net assets at the end of the current consolidated fiscal year were 19.503 million yen, an increase of 677 million yen
over the end of the previous fiscal year. This was mainly due to an increase of 1.083 million yen in retained earnings
as a result of strong business performance, and increases of 477 million yen in treasury stock resulting from acquisitionof treasury stock.
As a result, the capital adequacy ratio was 73.7% (compared to 75.5% at the end of the previous consolidated fiscal
year).

(3) Cash flows
The amount of cash and cash equivalents (hereinafter “funds”) during the consolidated fiscal year concerned
totaled 8.881 million yen, an increase of 591 million yen compared to the end of the previous consolidated fiscal year.
The status of each type of cash flow during the consolidated fiscal year concerned as well as their main factors are
as follows.
(Net cash provided by (used in) operating activities)
Net cash provided by operating activities was 2.472 billion yen. This was mainly due to the earnings before taxes
were 2,789 billion yen as a result of steady business performance, and a recording of 873 in goodwill, taxes paid were1.027 million yen and a decrease of 118 billion yen in provision for bonus in the current consolidated fiscal year.
(Net cash provided by (used in) investing activities)
Funds spent as a result of investment activities amounted to 577 million yen. This was mainly due to income fromleasing investment properties of 1.054 billion yen; purchase of stocks of affiliates of 460 million yen; purchase ofinvestment securities of 322 million yen; purchase of intangible fixed assets related to software development of 392
million yen; and finally, loan expenditure of 211 million yen and payment of 220 billion yen related to leasing
investment properties.
－

6 －(Net cash provided by (used in) financial activities)
Net cash used in financing activities amounted to 1,319 million yen. This was mainly due to cash dividends paidof 714 million yen and 499 million yen in disposal of treasury stock.

(4) Outlook
Regarding the future outlook, due to the spread of new coronavirus infections, there is an urgent need for reforms
in the medical, nursing care and welfare industries and coronavirus measures, medical DX, clinics/pharmacies are
expected to play an increasingly important role for local residents. In addition, drug prices continue to be inunfavorable due to annual medical fee revisions. Pharmacies are shifting from dealing with goods to dealing withpeople, and there is a demand for services that are “closer to home” for patients. The government has announced apolicy to thoroughly promote the use of ICT in the medical field, and is currently promoting the introduction of an
online qualification confirmation system and an electronic prescription system that utilize the My Number Card. Byutilizing ICT, it is expected that the need for information coordination in other occupations including nursing
care/welfare will increase. Through the "Shared information system platform" "MAPs series", our group will utilize
the cloud system to improve safety and work efficiency through the sharing of information, thereby further enhancing
support for the medical, nursing care and welfare workers.
The consolidated results for the fiscal year ending December 2023, reflecting the above circumstances, are as
follows: net sales of 19.608 billion yen (up 15.9% year on year), operating income of 2.827 billion yen (up 18.0% year
on year), ordinary income of 3.333 billion yen (up 19.4% year on year), net income attributable to parent company
shareholders of 2.217 billion yen (up 17.1% year on year).

2. Basic Approach to the Selection of Accounting Standards
The EM SYSTEMS Group currently applies Japanese accounting standards for its consolidated financial
statements. We will take suitable actions with regard to the application of International Financial ReportingStandards (IFRS) by taking into account associated factors in Japan and other countries.

－

7 －3. Consolidated financial statements and major explanatory notes(1) Consolidated balance sheet(Units: millions of yen)
As of December 31, 2021

As of December 31, 2022

AssetsCurrent assets
Cash on hand and in banks
Notes and accounts receivable
Merchandise and products
Raw materials and supplies
OthersAllowance for bad debts
Total current assets
Fixed assets
Tangible fixed assets
Buildings and structures
Accumulated depreciation
Buildings and structures (net)Land
Lease assets
Accumulated depreciation
Lease assets (net)
Rental assets
Accumulated depreciation
Rental assets (net)
Construction in progress
Others
Accumulated depreciation
Others (net)Total tangible fixed assets
Intangible fixed assets
Software
Software in progress
Goodwill
OthersTotal intangible fixed assets
Investments and other assets
Investment securities
Investment real estate
Accumulated depreciation
Investment real estate (net)
Allowance for bad debts
Deferred tax asset
Net defined benefit asset
Other
Allowance for bad debts
Total investments and other assets
Total fixed assets
Total assets

－

8 －

8,289
2,555
688
0
1,040
(0)
12,574

8,881
2,761
1,084
0
1,123
(1)
13,849

1,359
(754)
604
474
15
(10)
4
48
(45)
2
72
848
(674)
174
1,333

1,322
(747)
575
474
144
(46)
97
47
(46)
1
－
972
(749)
222
1,371

1,393
732
285
109
2,521

1,574
461
188
99
2,323

677
10,527(3,794)
6,733
117
558
29
280
(15)
8,380
12,23424,8091,263
10,574(4,054)
6,519
133
534
7
358
(11)
8,805
12,50026,349(Units: millions of yen)
As of December 31, 2021

Liabilities
Current liabilities
Notes and accounts payable
Current portion of long-term loans payable
Accounts payable-other
Lease obligations
Income taxes payable, etc.
Accrued consumption taxes
Provision for bonuses
Provision for points card certificatescontract liability
OthersTotal current liabilities
Non-current liabilities
Lease obligations
Net defined benefit liability
Provision for product warranties
Long-term guarantee deposited
Long-term Accounts payable-other
Deferred tax liabilities
Total non-current liabilities
Total liabilities
Net assets
Shareholder's equity
Capital stock
Capital surplus balance
Retained earnings
Treasury stock
Total shareholder's equity
Cumulative amount of other comprehensive
incomeunrealized holding gains or loss on securities
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Total other cumulative comprehensive
incomeSubscription rights to shares
Non-Controlling Interest
Total net assets
Total liabilities and net assets－

9 －As of December 31, 2022

852
－
465
4
663
125
403
4
－
1,648
4,167

1,398
－
957
35
601
222
285
－
999
444
4,944

1
1,039
50
724
－
－
1,815
5,983

74
1,061
20
745
－
－
1,901
6,846

2,785
3,347
14,116(1,539)18,7082,785
3,362
15,199(2,017)
19,329

－
69
(49)

35
85
(26)

19

94

55
42
18,82624,80955
23
19,503
26,349(2) Consolidated statements of income and consolidated statements of comprehensive income(Consolidated statements of income)(Units: millions of yen)Previous fiscal year
(From January 1, 2021
To December 31, 2021)

Current fiscal year
(From January 1, 2022
To December 31, 2022)

14,436
7,345
7,090

16,919
8,644
8,275

22
28
111
1
18
277
2,122
245
317
94
98
405
111
70
67
97
209
20
898

15
24
442
1
18
275
2,459
219
219
87
109
417
130
71
73
97
202
0
1,011

5,219

5,879

1,870

2,395

192
1,019
7
1,219

12
1,055
14
1,083

0
0
465
－
16
482
2,607

4
0
451
218
12
687
2,791

Sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Promotion expenses
Packing and transportation expenses
Advertising expenses
Provision of allowance for doubtful accounts
Provision for product warranties
Directors’ compensations
Salaries and allowances
Bonuses
Provision for bonuses
Share-based compensation expenses
Retirement benefit expenses
Legal welfare expenses
Traveling and transportation expenses
Communication expenses
Depreciation
Amortization of goodwill
Rents
Research and development expenses
Other
Total selling, general and administrative
expenses
Operating profit
Non-operating income
Interest income
Rent income of real estate
Miscellaneous income
Total non-operating income
Non-operating expenses
Interest expenses
Commission fee
Rent expenses on real estates
Equity in losses of affiliates
Miscellaneous loss
Total non-operating expenses
Ordinary profit

－

10 －

(Units: millions of yen)Previous fiscal year
(From January 1, 2021
To December 31, 2021)

Current fiscal year
(From January 1, 2022
To December 31, 2022)

0
0

－
－

8
0
2,599
828
(40)
787
1,811

2
－
2,789
916
(1)
914
1,875

(17)

(18)

1,829

1,893

Extraordinary income
Gain on sales of investment securities
Total extraordinary income
Extraordinary losses
Loss on retirement of non-current assets
Other
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
Net income
Profit(Loss) attributable to Non-controllingshareholders
Profit attributable to owners of parent

－

11 －

（Consolidated statements of comprehensive income）(Units: millions of yen)Previous fiscal year
(From January 1, 2021
To December 31, 2021)

Current fiscal year
(From January 1, 2022
To December 31, 2022)

1,811

1,875

－
37
1
39
1,850

35
15
23
74
1,949

1,868

1,968

(17)

(18)

Net income
Other comprehensive income
unrealized holding gains or loss on securities
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Total other comprehensive income
Comprehensive income（Breakdown）
Comprehensive income concerning parent
company shareholders
Comprehensive income concerning
non-controlling shareholders

－

12 －

(3) Consolidated Statement of Changes in Equity
Previous fiscal year (From January 1st, 2021 to December 31st, 2021)(Units: millions of yen)
Shareholders’ equity

Capital stock Capital surplus
Balance at beginning of current
period

2,785

3,283

Retainedearnings

Treasury shares

13,216（1,610)Total
shareholders’equity17,675

Changes of items during period
Dividends of surplus

（710)

（710)

Profit attributable to owners ofparent

1,829

1,829

Purchase of treasury shares
Disposal of treasury shares

54

Change in ownership interest ofparent due to transactions with
non-controlling interests.

8

（0)

（0)

70

125
8

（219)

Change of scope of consolidation（219)

change of scope of equity
method－Net changes of items other thanshareholders’ equity－

Total changes of items during
period

－

63

899

70

1,033

Balance at end of current period

2,785

3,347

14,116（1,539)18,708

Accumulated other comprehensive income

Balance at beginning of current
periodunrealized
holding gains orloss onsecurities

Foreigncurrencytranslation
adjustment

－

31

Total
Remeasuremen accumulated
ts of defined otherbenefit plans comprehensiv
e income
（51)

（19)

Share
acquisitionrights55

Noncontrollinginterests

Total net
assets23-

17,734

Changes of items during period
Dividends of surplus（710)

Profit attributable to ownersof parent

1,829

Purchase of treasury shares（0)

Disposal of treasury shares

125

Change in ownership interestof parent due to transactions
with non-controlling interests.

8

Change of scope of
consolidation（219)

change of scope of equity
method－Net changes of items otherthan shareholders’ equity

－

37

1

39

－

18

57

Total changes of items during
period

－

37

1

39

－

18

1,091

Balance at end of current period

－

69

（49)

19

55

42

18,826－13 －Current fiscal year (From January 1st, 2022 to December 31st, 2022)(Units: millions of yen)
Shareholders’ equity

Capital stock Capital surplus
Balance at beginning of current
periodCumulative effects of changes inaccounting policies
Restated balance

2,785

3,347

Retainedearnings

Treasury shares

14,116

Total
shareholders’equity（1,539)18,708

0
2,785

3,347

14,1160（1,539)18,708Changes of items during period
Exercise of share acquisitionrights-Dividends of surplus

（781)

（781)

Profit attributable to ownersof parent

1,893

1,893

Purchase of treasury shares
Disposal of treasury shares

（499)

（499)

22

37

15

Change in ownership interestof parent due to transactions
with non-controlling interests.
Change of scope of
consolidation－－

change of scope of equity
method(29)(29)

Net changes of items otherthan shareholders’ equity－

Total changes of items during
period

－

15

1,083

(477)

621

Balance at end of current period

2,785

3,362

15,199（2,017)

19,329

Accumulated other comprehensive income

Balance at beginning of current
periodCumulative effects of changes inaccounting policies
Restated balance

Total
Remeasuremen accumulated
ts of defined otherbenefit plans comprehensiv
e income

unrealized
holding gains orloss onsecurities

Foreigncurrencytranslation
adjustment

－

69

（49)

19

Share
acquisitionrights55

Noncontrollinginterests

42

Total net
assets18,826
0

－

69

（49)

19

55

42

18,826

Changes of items during period
Dividends of surplus（781)

Profit attributable to ownersof parent

1,893

Purchase of treasury shares（499)

Disposal of treasury shares

37

Change in ownership interestof parent due to transactions
with non-controlling interests.

－

Change of scope of
consolidation－

change of scope of equity
method(29)

Net changes of items otherthan shareholders’ equity

35

15

23

74

－

(18)

56

Total changes of items during
period

35

15

23

74

－

(18)

677

Balance at end of current period

35

85

(26)

94

55

23

19,503－14 －(4) Consolidated Statement of Cash Flows(Units: millions of yen)Previous fiscal year
(From January 1, 2021
To December 31, 2021)

Current fiscal year
(From January 1, 2022
To December 31, 2022)

2,599
876
97
90
(25)

2,789
873
97
(6)
62

(36)

(29)

58

(118)

0

－

－

(342)

1

(3)

(192)
(1,019)
192
0
－
(0)
8
94

(12)
(1,055)
220
4
218
－
2
87

(546)

(205)

(439)
51

(396)
(73)

18

546

(25)
168
(30)
1,940
192
(0)
(421)
－
1,712

97
626
27
3,411
12
(4)
(1,027)80
2,472

Cash flows from operating activities
Profit before income taxes
Depreciation
Amortization of goodwill
Decrease (increase) in net defined benefit asset
Increase (decrease) in net defined benefit liability
Increase (decrease) in provision for productwarranties
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for point cardcertificates
Increase (decrease) in contract liability
Increase (decrease) in allowance for doubtful
accounts
Interest and dividend income
Rent income of real estate
Expenses of real estate rentInterest expenses
Equity gains (losses) of affiliated companies
profit on sale of securities(profit)
Loss on retirement of non-current assets
Share-based compensation expenses
Decrease (increase) in notes and accounts
receivable-trade
Decrease (increase) in inventories
Decrease (increase) in other current assets
Increase (decrease) in notes and accounts payabletrade
Increase (decrease) in accrued consumption taxes
Increase (decrease) in other current liabilities
Other, net
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes paid
Refund of income taxes
Net cash provided by (used in) operating activities

－

15 －

(Units: millions of yen)Previous fiscal year
(From January 1, 2021
To December 31, 2021)

Current fiscal year
(From January 1, 2022
To December 31, 2022)

(116)
(479)
(670)

(65)
(392)
(322)

2

－

1,024
(192)
293
(417)
76
(62)

1,054
(220)
35
(211)
24
(4)

－

(460)

(2)
(544)

(15)
(577)

(24)
(0)
45
(714)
(693)

(38)
(499)
－
(781)
(1,319)

35

15

509
7,982

591
8,289

(202)

－

8,289

8,881

Cash flows from investing activities
Purchase of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from purchase of investments in
subsidiaries resulting in change in scope of
consolidation
Proceeds from rental of real estate for investment
Payments for rental of real estate for investment
Collection of loans receivable
Payments of loans receivable
Proceeds from guarantee deposits received
Repayments of guarantee deposits received
Payments for acquisition of shares of relatedcompanies
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Repayments of lease obligations
Purchase of treasury shares
Cash from Non-controlling shareholders
Cash dividends paid
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Increase in cash and cash equivalents from newly
consolidated subsidiary
Cash and cash equivalents at end of period

－

16 －

(5) Notes to Consolidated Financial Statements(Going Concern Assumption)
Not applicable.
(Accounting policy revisions)(Application of Accounting Standard for Revenue Recognition, etc.)
The "Accounting Standard for Revenue Recognition" (Corporate Accounting Standards Statement No. 29, March
31, 2020 [hereinafter referred to as the "Accounting Standard for Revenue Recognition")] was adopted by theCompany and its subsidiaries effective the beginning of the current fiscal year. According to its terms, theCompany now recognizes revenue at the amount expected to be received in exchange for the promised goods orservices at the point at which control of the promised goods or services have been transferred to the customer.
As a result, we have changed the method of recognizing maintenance sales, which is determined to be related toour group as an agent, from being based on the gross amount to being based on the net amount. In addition, withrespect to points granted to customers, the Company previously recorded the amount expected to be used out ofthe points issued as provisional points, a liability, to prepare for the use of the points granted, and recorded theamount of the provisional points as an expense. The Company has changed the method of recognizing the points
granted by taking into account the expected future lapse of the points, and the Company now recognizes theperformance obligation after allocating the awarded points to the stand-alone selling price, taking into account thepossibility of future expiration.
The application of revenue recognition accounting standards, etc. follows the transitional treatment stipulated
in the proviso of paragraph 84 of the Accounting Standard for Revenue Recognition, and the cumulative effect ofretrospective application of the new accounting policy prior to the beginning of the current fiscal year is added toor deducted from retained earnings at the beginning of the current consolidated fiscal year, with the new
accounting policy being applied considering the balance at the beginning of the current fiscal year.
As a result, in contrast to the conventional accounting treatment, net sales and cost of sales decreased by 401
million yen each, and operating income, ordinary income, and net income before income taxes increased by 0
million yen each in the current consolidated fiscal year.
Due to the application of the Accounting Standard for Revenue Recognition, sales deposits and deferred income
previously found under "Provision for point card certificates" and "Other" included in "Current liabilities" in the
consolidated balance sheet for the previous consolidated fiscal year are now included in "Contract liabilities.” Inaccordance with the transitional treatment prescribed in Paragraph 89-2 of the Accounting Standard for Revenue
Recognition, no reclassification has been made for the previous fiscal year using the new posting method. In
addition, in accordance with the transitional treatment prescribed in Paragraph 89-3 of the Accounting Standard
for Revenue Recognition, the Company has not posted the breakdown of information related to revenue fromcontracts with customers for the previous fiscal year.
(Application of Accounting Standard for Calculation of Market Value)
The "Accounting Standard for Calculation of Market Value" (Corporate Accounting Standards Statement No. 30,
July 4, 2019; hereinafter referred to as "Accounting Standard for Calculation of Market Value") went into effectfrom the beginning of the current fiscal year, and the new accounting policy stipulated by the "AccountingStandard for Calculation of Market Value" is considered effective going forward in accordance with thetransitional treatment prescribed in paragraph 19 of the Accounting Standard for Calculation of Market Value andparagraph 44-2 of the "Accounting Standard for Financial Instruments" (Corporate Accounting Standards
Statement No. 10, July 4, 2019). Note, however, that the above does not entail any impact on the consolidated
financial statements.

－

17 －

(Segment and Other Information)
Segment information
1. Overview of reportable segment
Segments used for financial reporting are the EM SYSTEMS Group’s constituent units forwhich separate financial information is available and for which the Board of Directors performs
periodic studies for the purposes of determining the allocation of resources and evaluating
performance.
The EM SYSTEMS Group consists of business units organized according to product categories
and business operations that are divided among different companies. For the purpose of financial
reporting, there are four reportable segments: IT Systems and Related Business for Pharmacies,
IT Systems and Related Business for Clinics, IT Systems for Long-term care/welfare and Other
Businesses.
Major products for each reportable segment are as follows:
Reportable segment

Major products

IT Systems and Related
Business for Pharmacies

Development and sales of systems for pharmacies

IT Systems and Related
Business for Clinics

Development and sales of systems for clinics

IT Systems for Long-termcare/welfare

Development and sales of systems for nursing care service providers

Other Businesses

Management of pharmacies, operation of rental conference rooms, andcashless projects

2. Calculation methods for net sales, profit/loss, assets, liabilities and other items for each reportable segment
The accounting methods for reportable segments comply with accounting policies used for the
preparation of the consolidated financial statements.
Profit for reportable segments is operating profit figures.
Inter-segment sales and transfers are based on prevailing market prices.

－

18 －

3. Information related to net sales, profit/loss, assets, liabilities and other items for each reportable segment
Previous fiscal year (From January 1st, 2021 to December 31st, 2021)(Units: millions of yen)

Reportable segment

Amounts
recorded in

IT Systems

IT Systems

and Related

and Related

Business for

Business for

Pharmacies

Clinics

IT Systems
for Long-termcare/welfare

Adjustment
Other
Businesses(Note1.2.3)

Total

consolidated
financialstatements(Note4)

Net sales
External sales

11,225

1,957

560

692

14,436－

14,436

2

－

－

28

30

(30)

－

11,228

1,957

560

720

14,467(30)

14,436

Segment profit

1,852

22

(12)

(27)

1,835

35

1,870

Segment assets

4,370

1,027

984

660

7,042

17,76624,809Depreciation

200

290

77

4

573

302

875

Increase in property, plant andequipment and intangible assets

144

15

274

4

438

190

629

Inter-segment sales and transfers
Total

Other items

Note
1. Segment profit is adjusted to be consistent with operating profit recorded in the consolidated financial
statements.
2. Adjustment of segment assets includes corporate assets of 18.312 billion yen and inter-segment elimination of 546 million yen. Corporate assets consist mainly of cash and deposits, investment real estate and other assetsthat do not belong to any reportable segment.
3. Adjustments to depreciation expenses and increases in tangible fixed assets and intangible fixed assets inother items are considered to be related to corporate assets.
4. Segment income or loss (△) is adjusted with operating income in the consolidated financial statements.

－

19 －

Information on amount of sales and profit and loss by reportable segment and breakdown of income
Current fiscal year (From January 1st, 2022 to December 31st, 2022)(Units: millions of yen)

Reportable segment

Amounts
recorded in

IT Systems

IT Systems

and Related

and Related

Business for

Business for

Pharmacies

Clinics

IT Systems forLong-termcare/welfare

Adjustment
Other
Businesses(Note1.2.3)

Total

consolidated
financialstatements(Note4)

Net sales
initial sales

6,463

1,135

40

－

7,639

－

7,639

system usage fee sales

4,422

791

199

－

5,413

－

5,413

consumable goods sales

1,863

61

－

－

1,925

－

1,925

maintenance service sales

765

214

299

－

1,279

－

1,279

other businesses

－

－

－

661

661

－

661

13,515

2,202

539

661

16,919－16,91913,515

2,202

539

661

16,919－16,919

15

－

－

51

66

(66)

－

13,530

2,202

539

713

16,986(66)

16,919Segment profit

3,031

(409)

(211)

(42)

2,367

28

2,395

Segment assets

5,409

1,187

1,010

729

8,338

18,011

26,349Depreciation

361

190

96

4

652

220

873

Increase in property, plant andequipment and intangible assets

299

34

241

0

575

20

595

Revenue from contracts withcustomers
External sales
Inter-segment sales and transfers
Total

Other items

Note
1. Segment profit is adjusted to be consistent with operating profit recorded in the consolidated financial
statements.
2. Adjustment of segment assets includes corporate assets of 18.722 billion yen and inter-segment elimination of 711 million yen. Corporate assets consist mainly of cash and deposits, investment real estate and other assetsthat do not belong to any reportable segment.
3. Adjustments to depreciation expenses and increases in tangible fixed assets and intangible fixed assets inother items are considered to be related to corporate assets.
4. Segment income or loss (△) is adjusted with operating income in the consolidated financial statements.

－

20 －

Related information
Previous fiscal year (January. 1, 2021 – December. 31, 2021)
1. Information about products and services
Descriptions of products and services are omitted because this information is presented in the segment
information.
2. Geographical information(1) Net sales
This information is omitted because sales to external customers in Japan accounted for more than 90% of
net sales in the consolidated statement of income.
(2) Property, plant and equipment
This information is omitted because property, plant and equipment in Japan exceeded 90% of property,
plant and equipment in the consolidated balance sheet.
3. Information of specific major customer
This information is omitted because no specific customers accounted for 10% or more of net sales in the
consolidated statement of income.

－

21 －

Current fiscal year (January. 1, 2022 – December. 31, 2022)
1. Information about products and services
Descriptions of products and services are omitted because this information is presented in the segment
information.
2. Geographical information(1) Net sales
This information is omitted because sales to external customers in Japan accounted for more than 90% of
net sales in the consolidated statement of income.
(2) Property, plant and equipment
This information is omitted because property, plant and equipment in Japan exceeded 90% of property,
plant and equipment in the consolidated balance sheet.
3. Information of specific major customer
This information is omitted because no specific customers accounted for 10% or more of net sales in the
consolidated statement of income.
【Impairment loss of non-current assets by reportable segment】
Previous fiscal year (Jan. 1, 2021 – Dec. 31, 2021)
Not applicable.
Current fiscal year (Jan. 1, 2022 – Dec. 31, 2022)
Not applicable.
【Amortization of goodwill and unamortized balance by reportable segment】
Previous fiscal year (Jan. 1, 2021 – Dec. 31, 2021)(Units: millions of yen)Amortization forthe period

IT Systems andRelated Businessfor Pharmacies

IT Systems andRelated Businessfor Clinics--

IT Systems forLong-termcare/welfare

Other Businesses

Total

75

22

97

166

119

285

Unamortizedbalance at theperiod-end
Current fiscal year (Jan. 1, 2022 – Dec. 31, 2022)(Units: millions of yen)Amortization forthe period
Unamortizedbalance at the

IT Systems andRelated Businessfor Pharmacies

IT Systems andRelated Businessfor Clinics

-

-

75

22

97

-

-

91

97

188

IT Systems forLong-termcare/welfare

period-end【Gain on negative goodwill by reportable segment】
Previous fiscal year (Jan. 1, 2021 – Dec. 31, 2021)
Not applicable.
Current fiscal year (Jan. 1, 2022 – Dec. 31, 2022)
Not applicable.

－

22 －

Other Businesses

Total

（Per Share Information）(Units: Yen 100ths of a yen)Previous fiscal year
(From January. 1, 2021 To December 31, 2021)(From

Current fiscal year
January 1, 2022 To December 31, 2022)

Net assets per share

263.12

Net247.30
assets per share
234.53274.94

Net income per share

25.72

Net income
19.74 per share
27.87

26.75

Diluted net income per share

25.64

Diluted19.47
net income27.46
per share

26.66

Notes: 1. The basis of calculating net income per share and diluted net income per share is as follows:(Units: millions of yen)Previous fiscal year
(From January 1, 2021
To December 31, 2021)

Current fiscal year
(From January 1, 2022
To December 31, 2022)

Net income per share
Profit attributable to owners of parent
Amounts not available to common stock
shareholders
Profit attributable to owners of parent
available to common stock
Average number of shares of common stock
outstanding during the period (Shares)

1,829

1,893

－

－

1,829

1,893

71,111,841

70,801,285－－

222,934

222,945

Diluted net income per share
Adjusted profit attributable to owners ofparentIncrease in the number of shares ofcommon stock (Shares)－

Summary of potential stock not included in－

the calculation of “Diluted net income pershare” since there was no dilutive effect（Subsequent Events）
Not applicableThis financial report is solely a translation of the Company’s Kessan Tanshin (including attachments) in Japanese,
which has been prepared in accordance with accounting principles and practices generally accepted in Japan, for theconvenience of readers who prefer an English translation.

－

23 －