Disclaimer: This document is an English translation of the original document in Japanese and has been
prepared solely for reference purposes. In the event of any discrepancy between this English
translation and the original in Japanese, the original shall prevail in all respects.

Consolidated Financial Results
for the Nine Months Ended December 31, 2023
[Japanese GAAP]
January 31, 2024
Company name: SYSTEM RESEARCH CO., LTD.
Stock exchange listing: Tokyo Stock Exchange
Code number: 3771
URL: https://www.sr-net.co.jp/
Representative: Hiroshi Hirayama, Representative Director and President
Contact: Yoshinobu Ohta, Operating Officer, General Manager, Public Relations Office
Phone: +81-52-413-6820
Scheduled date of filing quarterly securities report: February 9, 2024
Scheduled date of commencing dividend payments: Availability of supplementary briefing materials on quarterly financial results: Not available
Schedule of quarterly financial results briefing session: Not scheduled(Amounts of less than one million yen are rounded down.)
1. Consolidated Financial Results for the Nine Months Ended December 31, 2023 (April 1, 2023 to December
31, 2023)(1) Consolidated Operating Results (cumulative)(% indicates changes from the previous corresponding period.)
Profit attributable to
Net sales
Operating profit
Ordinary profit
owners of parent
Nine months ended
Million yen%
Million yen%
Million yen%
Million yen
December 31, 2023
17,240
8.0
1,965
11.1
1,993
12.0
1,474
December 31, 2022
15,953
20.8
1,767
33.2
1,778
32.8
963
(Note) Comprehensive income: Nine months ended December 31, 2023: ¥1,477 million [70.7%]
Nine months ended December 31, 2022: ¥865 million [(4.5)%]
Basic earnings per
share

Nine months ended
December 31, 2023
December 31, 2022

Diluted earnings per
share

Yen

Yen

176.43115.27-(2) Consolidated Financial Position
Total assets
Million yen

Net assets
Million yen

14,93810,028
As of December 31, 2023
14,181
9,135
As of March 31, 2023
(Reference) Equity: As of December 31, 2023: ¥10,012 million
As of March 31, 2023: ¥9,123 million

Equity ratio
%

67.0
64.3

%

53.0
5.0

2. Dividends
Annual dividends

1stquarter-end

Yen

2nd
quarter-end

3rdquarter-end

Yen

Fiscal year-end

Yen

Total

Yen

Yen

Fiscal year ended
0.00
70.00
70.00
March 31, 2023
Fiscal year ending
0.00
March 31, 2024
Fiscal year ending
March 31, 2024
80.00
80.00
(Forecast)
Note: Revisions to the forecast of cash dividends most recently announced: Yes
Please refer to “Notice on Share Split, Partial Amendment to Articles of Incorporation, and Revisions to
Dividend Forecast” announced today (January 31, 2024; in Japanese).
3. Consolidated Financial Results Forecast for the Fiscal Year Ending March 31, 2024 (April 1, 2023 to March
31, 2024)(% indicates changes from the previous corresponding period.)
Net sales
Million yen%

Operating profit

Ordinary profit

Million yen

Million yen%

Profit attributable toowners of parent% Million yen

Full year
23,815 10.4
2,516
0.5
2,542
1.0
Note: Revisions to the financial result forecast most recently announced: No

1,817

%

Basic earnings
per share

13.4* Notes:(1) Changes in significant subsidiaries during the period : No
(2) Adoption of accounting treatment specific to the preparation of quarterly consolidated financial statements: Yes(3) Changes in accounting policies, changes in accounting estimates, and restatement(i) Changes in accounting policies due to revisions to accounting standards and other regulations: No(ii) Changes in accounting policies due to other reasons: No(iii) Changes in accounting estimates: No(iv) Restatement: No(4) Number of issued shares (common shares)(i) Total number of issued shares at the end of the period (including treasury shares):
As of December 31, 2023: 8,360,000 shares
As of March 31, 2023: 8,360,000 shares(ii) Number of treasury shares at the end of the period:
As of December 31, 2023: 2,112 shares
As of March 31, 2023: 2,008 shares(iii) Average number of shares outstanding during the period (cumulative from the beginning of the fiscal
year):
Nine months ended December 31, 2023: 8,357,951 shares
Nine months ended December 31, 2022: 8,358,024 shares

Yen

217.47

* These quarterly consolidated financial results are outside the scope of quarterly review by certified public
accountants or audit firms.
* Explanation of the proper use of financial results forecast and other notes(Notes on forward-looking statements, etc.)
The financial results forecast and other forward-looking statements herein are based on information currently
available to the Company and certain assumptions that the Company deems reasonable, and the Company does
not intend to guarantee that they will be achieved. In addition, actual results may differ significantly from these
forecasts due to a wide range of factors. For the conditions assumed for the financial results forecast, precautions
for the use of the financial results forecast, etc., please refer to “(3) Explanation of Consolidated Financial Results
Forecasts and Other Forward-looking Information” on page 2 of the attachments.

Table of Contents - Attachments
1. Qualitative Information on Quarterly Financial Results ................................................................................ 2(1) Explanation of Operating Results ............................................................................................................... 2(2) Explanation of Financial Position .............................................................................................................. 2(3) Explanation of Consolidated Financial Results Forecasts and Other Forward-looking Information ......... 2
2. Quarterly Consolidated Financial Statements and Principal Notes ................................................................ 3(1) Quarterly Consolidated Balance Sheets ..................................................................................................... 3(2) Quarterly Consolidated Statements of Income and Comprehensive Income ............................................. 5
Quarterly Consolidated Statements of Income .......................................................................................... 5
Quarterly Consolidated Statements of Comprehensive Income ................................................................ 6(3) Notes to the Quarterly Consolidated Financial Statements ........................................................................ 7(Notes on going concern assumption) .............................................................................................................. 7(Notes in the case of significant changes in shareholders’ equity) .................................................................. 7(Accounting policies adopted specially for the preparation of quarterly consolidated financial statements) .... 7(Material subsequent events) ............................................................................................................................. 8
3. Other ............................................................................................................................................................... 9
Status of Production, Receipt of Orders, and Sales(1) Production ................................................................................................................................................ 9(2) Outsourcing .............................................................................................................................................. 9(3) Purchases .................................................................................................................................................. 9(4) Receipt of Orders .................................................................................................................................... 10(5) Sales ....................................................................................................................................................... 10

1

1. Qualitative Information on Quarterly Financial Results(1) Explanation of Operating Results
During the nine months ended December 31, 2023, the Japanese economy continued on a moderate recovery
trend, boosted by the improved performance of export-related companies, such as the automotive industry, due
to a steady recovery of the demand for inbound tourism and the depreciation of the Japanese yen. Meanwhile,
the outlook remains uncertain due to the impact of the rise in commodity prices brought by the surge in importprices of raw materials, global inflationary pressures, unstable international affairs, and other factors on thedomestic economy and corporate earnings.
In the information service industry, in which the Group operates, the industry’s total net sales for November
2023 grew by 4.0% compared with a year earlier, according to the Current Survey of Selected Service Industries
released by the Ministry of Economy, Trade and Industry. Specifically, sales of “Software Ordered,” the main
segment, increased by 8.1% year on year, sales of “Software Products” decreased by 13.5% year on year, andsales of “System Management on Commission” increased by 0.7% year on year. Although performance trends
varied depending on the service category, these results show that demand remains robust for IT investment
demand involving digital transformation (DX) to eliminate labor shortages, promote labor-saving and streamline
operations.
In this business environment, for the nine months ended December 31, 2023, net sales of SI Services Businesswere 6,662 million yen (an increase of 9.1% year on year), due to an increase in orders received, backed by steadyIT investment demand from the Company’s major customer sectors, including the automotive-related. Net salesof the Software Development Business were 9,814 million yen (an increase of 6.8% year on year), as theCompany stably secured continuing contracts with existing customers. Net sales of Software Products Business,
which conducts businesses including sales of packaged software, were 269 million yen (an increase of 14.6%
year on year) due to the reactionary demand to the introduction of the invoice system and the enforcement of the
Act concerning Preservation of Electronic Books. Net sales of Merchandise Sales were 287 million yen (anincrease of 4.2% year on year) due to the purchase and sale of personal computers and IT devices as well assoftware products, among other items. Net sales of Website Administration and Cloud Services (SaaS) in theother category were 205 million yen (an increase of 35.9% year on year), backed by an increase in the numberof new EC-mall shop openings.
In terms of earnings, the Company successfully maintained a high operating rate of engineers against a
backdrop of strong IT investment demand from customers. An increase in net sales of SI services, which is ahigh-margin business, and efforts to eliminate unprofitable projects through project risk management (PRM)
activities also led to an increased profit.
As a result, for the nine months ended December 31 2023, net sales were 17,240 million yen (an increase of
8.0% year on year), with operating profit of 1,965 million yen (an increase of 11.1% year on year), ordinary profitof 1,993 million yen (an increase of 12.0% year on year), and profit attributable to owners of parent of 1,474
million yen (an increase of 53.0% year on year), on a consolidated basis.
(2) Explanation of Financial Position
Total assets as of December 31, 2023 increased by 756 million yen year on year to 14,938 million yen, due toincreases in land and other under property, plant and equipment, among other factors.
Liabilities as of December 31, 2023 decreased by 136 million yen year on year to 4,910 million yen, due todecreases in income taxes payable and provision for bonuses, among other factors, despite an increase in shortterm borrowings.
Net assets as of December 31, 2023 increased by 892 million yen year on year to 10,028 million yen, due toan increase in retained earnings, among other factors.
(3) Explanation of Consolidated Financial Results Forecasts and Other Forward-looking Information
No change has been made to the financial results forecasts for the full year ending March 31, 2024, announced
on May 10, 2023.
22. Quarterly Consolidated Financial Statements and Principal Notes(1) Quarterly Consolidated Balance Sheets(Thousand yen)
As of March 31, 2023
AssetsCurrent assets
Cash and deposits
Trade receivables and contract asset
Merchandise
Supplies
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures, net
Land
Other, net
Total property, plant and equipment
Intangible assets
Goodwill
Software
Other
Total intangible assets
Investments and other assets
Other
Total investments and other assets
Total non-current assets
Total assets

3

As of December 31, 2023

7,371,297
4,420,921
2,948
6,397
102,975(427)
11,904,112

7,626,153
4,174,678
2,473
6,406
75,085
11,884,796

374,564
746,460
21,9191,142,943

365,233
1,219,317
355,572
1,940,122

245,754
137,156
6,941
389,852

196,603145,916
8,009
350,529744,851
744,851
2,277,647
14,181,759

762,890762,890
3,053,542
14,938,339

(Thousand yen)
As of March 31, 2023
Liabilities
Current liabilities
Accounts payable - trade
Short-term borrowings
Current portion of long-term borrowings
Income taxes payable
Provision for bonuses
Other
Total current liabilities
Non-current liabilities
Long-term borrowings
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

4

As of December 31, 2023

885,608
741,676458,257
1,130,038
1,169,550
4,385,131

931,459
330,000
744,412187,258
698,428
1,407,517
4,299,075

661,036
661,036
5,046,167

611,073
611,073
4,910,148

550,150
517,550
8,050,238(1,252)
9,116,686

550,150
517,550
8,939,777(1,571)
10,005,905

6,545
6,545
12,3609,135,592
14,181,759

6,681
6,681
15,603
10,028,190
14,938,339

(2) Quarterly Consolidated Statements of Income and Comprehensive Income
Quarterly Consolidated Statements of Income
Nine Months Ended December 31(Thousand yen)
For the nine months ended
December 31, 2022
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
Subsidy income
Other
Total non-operating income
Non-operating expenses
Interest expenses
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sale of investment securities
Total extraordinary income
Extraordinary losses
Loss on retirement of non-current assets
Loss on termination of retirement benefit plan
Total extraordinary losses
Profit before income taxes
Income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent

5

For the nine months ended
December 31, 2023

15,953,941
12,476,439
3,477,502
1,709,915
1,767,586

17,240,297
13,315,848
3,924,449
1,959,131
1,965,317

8
390
13,0394,037
17,475928,4706,468
34,948

5,955
261
6,217
1,778,844

6,336
3
6,339
1,993,925

1,286
1,286

-

1
363,811363,813
1,416,317
449,992
966,325
2,839
963,486

58
58
1,993,867
516,025
1,477,841
3,242
1,474,599

Quarterly Consolidated Statements of Comprehensive Income
Nine Months Ended December 31(Thousand yen)
For the nine months ended
December 31, 2022
ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Remeasurements of defined benefit plans, net of tax
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests

6

For the nine months ended
December 31, 2023

966,325

1,477,841(491)(100,102)(100,594)
865,731136
136
1,477,977

862,891

1,474,735

2,839

3,242

(3) Notes to the Quarterly Consolidated Financial Statements(Notes on going concern assumption)
There are no relevant matters.
(Notes in the case of significant changes in shareholders’ equity)
There are no relevant matters.
(Accounting policies adopted specially for the preparation of quarterly consolidated financial statements)(Calculation of tax expenses)
The Company reasonably estimates the effective tax rate after applying tax effect accounting to profit before
income taxes for the fiscal year ending March 31, 2024, and multiplies profit before income taxes for the quarterby the estimated effective tax rate. However, if the estimated effective tax rate used to calculate tax expenses
would be significantly unreasonable, the normal effective statutory tax rate is used.

7

(Material subsequent events)(Share split and partial amendment to the Articles of Incorporation)
At a Board of Directors meeting held on January 31, 2024, the Company has resolved to perform a share split
and partially amend its Articles of Incorporation as described below.
1. Purpose of the share split
The share split aims at increasing the liquidity of the Company’s shares through a reduced minimum
investment amount to facilitate investment for investors and further expand the Company’s investor base.
2. Overview of the share split(1) Method
On the record date March 31, 2024, each of the Company’s common shares held by shareholders listed orrecorded in the closing register of shareholders on that day will be split into two shares.
(2) Increases in shares upon the share split- Total number of issued shares before the share split- Increase in shares due to the share split- Total number of issued shares after the share split- Total number of authorized shares after the share split(3) Schedule of share split(i) Public notice of record date(ii) Record date(iii) Effective date

8,360,000 shares
8,360,000 shares
16,720,000 shares
54,400,000 shares

March 14, 2024
March 31, 2024
April 1, 2024

(4) Impact on per share information
Basic earnings per share assuming that the share split was performed at the beginning of the fiscal year
ended March 31, 2023 is as follows.
Basic earnings per share (Yen)For the nine months ended
December 31, 2022

57.63

For the nine months ended
December 31, 2023

88.21

3. Partial amendment to the Articles of Incorporation for the share split(1) Reason for the amendment
In line with the above share split, pursuant to Article 184, Paragraph 2 of the Companies Act, theCompany will amend the total number of authorized shares in Article 6 of its Articles of Incorporation
effective April 1, 2024.
(2) Detail of the amendment
The amendment is as follows.

(Underlines indicate amended sections.)

Current Articles of Incorporation(Total number of authorized shares)
Article 6
The total number of shares authorized to beissued by the Company shall be twenty-sevenmillion and two hundred thousand(27,200,000) shares.

Proposed amendment(Total number of authorized shares)
Article 6
The total number of shares authorized to beissued by the Company shall be fifty-four
million and four hundred thousand(54,400,000) shares.

(3) Schedule of the amendment to the Articles of Incorporation
Effective date
April 1, 2024
4. Other
Change in the amount of share capital
There will be no change in the amount of share capital upon this share split.
83. Other
Status of Production, Receipt of Orders, and Sales(1) Production
The amount of production by business category for the nine months ended December 31, 2023 is as follows:
For the nine months ended
December 31, 2023

Business category

Amount of production(million yen)

Change from the previous
corresponding period (%)

SI Services Business

6,662

109.1

Software Development Business

9,814

106.8

Software Products Business

269

114.6

Other

205

135.9

16,952

108.1

Total
(Note) Amounts are presented based on sales prices.

(2) Outsourcing
The amount of outsourcing by business category for the nine months ended December 31, 2023 is as follows:
For the nine months ended
December 31, 2023

Business category

Amount of outsourcing(million yen)

Change from the previous
corresponding period (%)

SI Services Business

2,685

110.8

Software Development Business

3,986

104.9

Software Products Business

58

145.4

Other

0

74.2

6,730

107.4

Total

(3) Purchases
The amount of purchases by business category for the nine months ended December 31, 2023 is as follows:
For the nine months ended
December 31, 2023

Business category

Amount of purchases(million yen)
Merchandise Sales

Change from the previous
corresponding period (%)
233(Note) Amounts are presented based on purchase prices.

9

102.0

(4) Receipt of Orders
The amount of orders received by business category for the nine months ended December 31, 2023 is as follows:
For the nine months ended
December 31, 2023
Business category
Orders received(million yen)

Change fromthe previous
corresponding
period (%)

Backlog oforders(million yen)

Change fromthe previous
corresponding
period (%)

SI Services Business

7,401

110.0

2,718

103.9

Software Development Business

9,991

104.3

2,598

111.6

Software Products Business

264

117.5

100

109.1

Merchandise Sales

259

95.5

21

57.2

17,916

106.6

5,438

107.2

Total

(5) Sales
The amount of sales by business category for the nine months ended December 31, 2023 is as follows:
For the nine months ended
December 31, 2023

Business category

Amount of sales(million yen)

Change from the previous
corresponding period (%)

SI Services Business

6,662

109.1

Software Development Business

9,814

106.8

Software Products Business

269

114.6

Merchandise Sales

287

104.2

Other

205

135.9

17,240

108.0

Total

(Note) The amount of sales by major customer and the share of the sales in total sales are as follows:
Customer

For the nine months ended
December 31, 2022
Amount of sales(million yen)

TOYOTA SYSTEMS CORPORATION

2,306

10

For the nine months ended
December 31, 2023

Share
(%)

Amount of sales(million yen)
14.4

2,687

Share
(%)
15.5