Systemsoft Corporation (7527) Consolidated Financial Results for the Fiscal Year Ended September 30,2022

Consolidated Financial Results for the Fiscal Year Ended September 30,2022(Under Japanese GAAP)
November 11, 2022
Listed company name:

Systemsoft Corporation

Listing

Tokyo Stock Exchange

Code number

7527

URL:

https://www.systemsoft.co.jp/

Representative

President and Representative Director: Haruki Yoshio

Contact person

General Manager, Administration Division: Yasunori Tomita, (TEL) +81 (0)92-732-1515

Scheduled date of the Ordinary General Meeting of Shareholders: December 21, 2022
Scheduled date to file annual securities report: December 21, 2022
Scheduled start date to commence dividend payments: December 7, 2022
Preparation of supplementary materials on annual financial results: Yes
Holding of annual financial results briefings: Yes

1.

(Yen amounts are rounded down to millions, unless otherwise noted.)
Consolidated Financial Results for the fiscal year ended September 30, 2022 (from October 1, 2021 to September 30,
2022)(1) Consolidated financial results (cumulative)(% is Year-on-year rate of increase / decrease)
Net sales
Fiscal year ended

Operating income

Net income attributable toowners of parent

Ordinary income

million yen%

million yen%

million yen%

million yen%

September 30, 2022

4,704

-4.4

382

1.3

377

10.0

201

-58.4

September 30, 2021

4,920

71.8

377

―

342

―

483

―

Note: Comprehensive income

For the fiscal year ended, September 30, 2022 ¥119 million yen (-74.7%)
For the fiscal year ended, September 30, 2021 ¥472 million yen (―%)
Net earnings per
share

Diluted net earnings
per share

Return on equity

Ratio of ordinary
income to total
assetsRatio of operating
profit to net sales

Fiscal year ended

yen

yen

%

%

%

September 30, 2022

2.37

2.37

3.5

5.1

8.1

September 30, 2021

6.15

6.06

9.9

5.5

7.7

Note: The "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020) and others are applied from the
beginning of the current fiscal year, and the figures for the fiscal year ended September 30, 2022 are after the application of the said
accounting standard and others. Therefore, the percentage change from the previous fiscal year is calculated based on theapplication of the said accounting standards. As a result, the percentage change from the previous period is based on the calculation
method used by the different standards.

(2) Consolidated financial condition
Total assets

Net assets

Shareholders’ equity ratio

Net assets per share

million yen

million yen%

yen

September 30, 2022

7,224

5,865

80.7

68.79

September 30, 2021

7,467

5,838

77.6

68.90

Fiscal year ended

Reference: Shareholders’ equity

As of September 30, 2022 ¥5,833 million
As of September 30, 2021 ¥5,794 million
Note: The "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020) and others are applied from the
beginning of the current fiscal year, and the figures for the fiscal year ended September 30, 2022 are after the application of the said
accounting standard and others.

1Systemsoft Corporation (7527) Consolidated Financial Results for the Fiscal Year Ended September 30,2022(3) Consolidated Cash Flows
Cash flows fromoperating activities

Cash flows frominvesting activities

Cash and cash
equivalents at
end of period

Cash flows fromfinancing activities

million yen

million yen%

yen

September 30, 2022

168

-195

-104

1,949

September 30, 2021

115

-200

228

2,081

Fiscal year ended

2. Cash dividends
Annual dividends per share
First
SecondThird
quarter-end quarter-end quarter-end

Fiscalyear-end

Total cash
dividends(Total)Total

Payout ratio(Consolidated)

Ratio ofdividends to
net assets(Consolidated)

Fiscal year ended

yen

yen

yen

yen

yen

million yen%%

September 30,
2021

―

0.00

―

2.00

2.00

168

32.5

3.2

September 30,
2022

―

0.00

―

2.00

2.00

169

75.1

2.9

September 30,
2023 (Forecast)

―

―

―

―

―

―

Note: The source of dividends for the fiscal years ended September 30, 2022 and 2021 is entirely capital surplus.
For details, please refer to "Breakdown of dividends using capital surplus as the source of dividends" below.
The dividend for the fiscal year ending September 30, 2023 is undetermined at this time.

3. Forecast of consolidated financial results for the fiscal year ending September 30, 2023
(October 1, 2022 – September 30, 2023)(% increase or decrease from the previous year)

Net sales

Full-year

Operating income

Ordinary income

Profit attributable toowners of parent

Net income per
sharemillion yen%

million yen%

million yen%

million yen

%

yen

4,400

-6.5

310

-19.0

220

-41.7

110

-45.3

1.31

2

Systemsoft Corporation (7527) Consolidated Financial Results for the Fiscal Year Ended September 30,2022* Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in the change inscope of consolidation): None
(Note) Although not a specified subsidiary of the Company, SS Support Co., Ltd. was included in the scope of
consolidation from the current fiscal year following the acquisition of its shares on April 1, 2022.
(2) Changes in accounting policies, changes in accounting estimates, and restatement(i) Changes in accounting policies due to revisions to accounting standards and other regulations: Yes(ii) Changes in accounting policies due to other reasons: None(iii) Changes in accounting estimates: None(iv) Restatement: None
(Note) For details, please refer to "3. Consolidated Financial Statements and Key Notes (5) Notes on consolidated
financial statements " on page 17 of the attached materials.
(3) Number of issued shares (common shares)(i) Total number of issued shares at the end of the period (including treasury shares)
As of September 30, 2022

84,834,140 shares

As of September 30, 2021

84,136,240 shares(ii) Number of treasury stock shares at the end of the period
As of September 30, 2022

31,987 shares

As of September 30, 2021

31,864 shares(iii) Average number of shares outstanding during the period (cumulative from the beginning of the fiscal year)
Fiscal year ended September 30, 2022

84,708,524 sharesFiscal year ended September 30, 2021

78,526,881 shares

Reference: Summary of Non-Consolidated Financial Results1.

Non-Consolidated Financial Results for the fiscal year ended September 30, 2022 (from October 1, 2021 to September
30, 2022)(1) Non-Consolidated financial results(% is Year-on-year rate of increase / decrease)
Net Sales
Fiscal year ended

Operating Income

million yen%

September 30, 2022

2,909

September 30, 2021

2,997

Ordinary income

Net income

million yen%

million yen

%

-2.9

34

―

224

86.7

-86

―

125

Net income per share

million yen

%

79.0

73

―

―

-41

―

Diluted net income per
share

Fiscal year ended

yen

yen

September 30, 2022

0.87

0.86

September 30, 2021

-0.53

―

Note: The "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020) and others are applied from the
beginning of the current fiscal year, and the figures for the fiscal year ended September 30, 2022 are after the application of the said
accounting standard and others. Therefore, the percentage increase/decrease from the previous period is calculated based on theapplication of the said accounting standards. As a result, the percentage change from the previous period is based on a calculation
method using different standards.

3

Systemsoft Corporation (7527) Consolidated Financial Results for the Fiscal Year Ended September 30,2022(2) Non-Consolidated financial condition
Total Assets
Fiscal year ended

Net Assets

Shareholders’ equity ratio

Net assets per share

million yen

million yen

%

yen

6,642

5,579

83.6

65.51

5,601

81.7

66.18

September 30, 2022

September 30, 2021
6,814
Note: Shareholders’ Equity: As of September 30, 2022
As of September 30, 2021

¥5,555 million¥5,565 million*Financial Results reports are exempt from annual review conducted by certified public accountants or an audit corporation.
*Proper use of earnings forecasts, and other special matters
Forward-looking statements, such as each business outlook, described in this document are based on information currently
obtained by the Company and certain assumptions that it deems reasonable, and are not to the effect that the Company
promises to achieve such results. Actual results may differ materially due to various factors.
Please refer to "1. Summary of Business Results, etc. (4) Outlook for the future" on page 8 of the attached document forthe conditions that form the assumptions for business forecasts and cautions concerning the use of business forecasts.

Breakdown of dividends using capital surplus as the source of dividends
The following is a breakdown of the dividends for the fiscal year ended September 30, 2022, for which capital surplus isused as the source of dividends.
Reference date

End of term

2 yen 00 sen

2 yen 00 sen

169 million yen

169 million yen

Dividend per share
Total amount of dividends

Total

Note: Ratio of decrease in net assets: 0.032

The breakdown of dividends for the fiscal year ended September 30, 2021, for which capital surplus is used as the sourceof dividends, is as follows.
Reference date

End of term

Dividend per share
Total amount of dividends

Total

2 yen 00 sen

2 yen 00 sen

168 million yen

168 million yen

Note: Ratio of decrease in net assets: 0.033

4

Systemsoft Corporation (7527) Consolidated Financial Results for the Fiscal Year Ended September 30,2022(Under Japanese GAAP)
Updated: November 11, 2022

Table of Contents
1. Summary of Business Results, etc.

6(1) Summary of business results for the current fiscal year ············································································· 6(2) Summary of financial condition ············································································································ 7(3) Summary of cash flows for the current fiscal year ···················································································· 8(4) Outlook for the future ························································································································· 8
2. Basic approach to the selection of accounting standards

8

3. Consolidated Financial Statements and Key Notes

9(1) Consolidated Balance Sheet ··············································································································· 9(2) Consolidated Statements of Income and Consolidated Comprehensive Income Statements ···························· 11(3) Consolidated Statement of Changes in Shareholders’ equity ····································································· 13(4) Consolidated Statements of Cash Flows ······························································································· 15(5) Notes on consolidated financial statements ··························································································· 17(Notes on going concern assumptions) ............................................................................................................... 17(Change in scope of consolidation or application of equity method) ..................................................................... 17(Change in accounting policy) ............................................................................................................................. 17(Application of Accounting Standard for Measurement of Fair Value, etc.) ............................................................ 18(Segment Information, etc.) ................................................................................................................................. 18(Business Combinations, etc.)............................................................................................................................. 21(Per share information) ....................................................................................................................................... 22(Significant subsequent events) .......................................................................................................................... 23

5

Systemsoft Corporation (7527) Consolidated Financial Results for the Fiscal Year Ended September 30,2022(Under Japanese GAAP)
Updated: November 11, 2022

1. Summary of Business Results, etc.
(1) Summary of business results for the current fiscal year
During the consolidated fiscal year under review (October 1, 2021 to September 30, 2022), the Japanese economy
showed a gradual recovery due to the expansion of vaccinations and the easing of behavioral restrictions, but the yen
continued to depreciate, raw material prices soared, and the tense situation in Ukraine and other factors raised concerns
about an economic downturn due to turmoil in the international community. Accordingly, the outlook for the Japanese
economy remained uncertain.
In the information service industry, of which our group is a part, the government-recommended 4th Industrial
Revolution is accelerating the use of technologies such as AI, IoT, RPA, and blockchain, as well as the sharing economy,
and the efforts of companies to transform themselves into digital native companies. As companies accelerate their efforts,
there is an increasing need to provide technological support and services to support the "new normal," an era of drasticchanges in social concepts. In addition, securing and training on-site engineers and field workers due to the chronic
shortage of human resources is a major challenge, and the market environment remains challenging due to soaring
costs and other factors.
In this environment, the Company has worked to provide SaaS products and improve the value of its services in theoverall system development field, while actively hiring personnel and training quality engineers.
In the future, we aim to create new value by adding the SaaS-based DX domain, RPA solutions, open innovation
offerings, alliance services, FA (financial advisory) and other consulting services that have been the focus of theCompany and its subsidiary SS Technologies, Inc. We aim to create new value and increase our corporate value.
As a result, net sales for the current consolidated fiscal year decreased 215 million yen (4.4%) year on year to 4,704
million yen, and operating income increased 4 million yen (1.3%) year on year to 382 million yen. Ordinary income
increased 34 million yen (10.0%) year on year to 377 million yen, and net income attributable to owners of the parent
decreased 282 million yen (58.4%) year on year to 201 million yen.
Segment results are as follows.
The Company has changed the classification of its reportable segments from the current consolidated fiscal year, andthe following year-on-year comparisons are based on figures for the same period of the previous year prepared according
to the segment classification after the change. For details, please refer to "3. Consolidated Financial Statements and
Key Notes (5) Notes on consolidated financial statements (Segment Information, etc.) 2 Matters related to changes inreportable segments, etc." for details.
(i) Technology business
Leveraging its long-standing expertise in system development related to the real estate business, the Company
provides SaaS, including the SS Cloud Series and SS Payment Series. This has boosted IT in the real estate industry
and contributed to improved productivity, such as increased operational efficiency. Our SS Cloud Series has been
expanded to include a wide variety of services, both developed in-house and in collaboration with other companies, andwe are strong in system development based on Web technology. We have long been providing system development andsolution services, operating rental real estate information websites, and RPA solution services to clients in the real estate,
information and telecommunications, life and non-life insurance, and education sectors.
In the current consolidated fiscal year, some orders received were behind schedule, but the delays were resolved, andongoing projects remained steady. Although sales decreased, segment income increased as a result of cost reduction
efforts.
As a result, net sales in the technology business decreased 385 million yen (10.3%) year on year to 3,349 million yen,and segment income increased 41 million yen (14.2%) year on year to 336 million yen.

6

Systemsoft Corporation (7527) Consolidated Financial Results for the Fiscal Year Ended September 30,2022(Under Japanese GAAP)
Updated: November 11, 2022(ii) Open Innovation BusinessWe provide consulting services to startup companies to help them launch their businesses and provide a place forinnovation by incorporating technologies and ideas from different industries and fields.
In the current consolidated fiscal year, although revenues decreased due to the closure of offices, consulting services
were in line with plans, and both net sales and segment income increased.
As a result, net sales in the open innovation business increased 316 million yen (29.7%) year on year to 1,384 million
yen, and segment income increased 113 million yen (116.4%) year on year to 210 million yen.
(iii) Other businessSubsidiary S2I Co., Ltd. is in the business of providing IoT-related products and services.
There were no sales in the other segment (sales of 0 million yen in the same period of the previous year). Segment
loss was 0 million yen (segment income of 0 million yen in the same period of the previous year).

(2) Summary of financial condition
Assets, Liabilities and Net Assets
Current assets at the end of the current consolidated fiscal year were 3,994 million yen, a decrease of 163 million yen
from the end of the previous consolidated fiscal year. This was mainly due to a 131 million yen decrease in cash anddeposits and a 131 million yen decrease in notes and accounts receivable-trade and contract assets.
Fixed assets decreased 78 million yen from the end of the previous fiscal year to 3,230 million yen. This was mainly
due to a 40 million yen decrease in goodwill and a 24 million yen decrease in software.
As a result, total assets decreased 242 million yen from the end of the previous fiscal year to 7,224 million yen.
Current liabilities decreased 327 million yen to 775 million yen. This was mainly due to a 255 million yen decrease innotes and accounts payable-trade and a 42 million yen decrease in accounts payable-other.
Fixed liabilities increased 57 million yen to 583 million yen. This was mainly due to a decrease of 100 million yen inbonds payable and an increase of 170 million yen in long-term loans payable.
As a result, total liabilities decreased 269 million yen from the end of the previous fiscal year to 1,359 million yen.
Total net assets increased by 27 million yen from the end of the previous fiscal year to 5,865 million yen. This was
mainly due to an increase in retained earnings resulting from the posting of net income attributable to parent company
and equity ratio reached 80.7%.

7

Systemsoft Corporation (7527) Consolidated Financial Results for the Fiscal Year Ended September 30,2022(Under Japanese GAAP)
Updated: November 11, 2022

(3) Summary of cash flows for the current fiscal year
Cash and cash equivalents (hereinafter referred to as "cash") for the current consolidated fiscal year decreased 131
million yen from the end of the previous consolidated fiscal year to 1,949 million yen.
The status of each cash flow and their factors during the current consolidated fiscal year are as follows.
(Net cash provided by (used in) operating activities)
Net cash increase in operating activities totaled 168 million yen, compared to a 115 million yen increase during thelast fiscal year. This was mainly due to a 121 million yen increase in accounts payable and a 68 million yen decrease in
consumption tax payable.
(Net cash provided by (used in) investing activities)
Net cash used in investing activities totaled 195 million yen, compared with 200 million yen used in the same periodof the previous fiscal year. This was mainly due to a 162 million yen increase in proceeds from sales of investment
securities and a 150 million yen increase in purchase of investments in subsidiaries resulting in change in scope of
consolidation.
(Net cash provided by (used in) financing activities)
Net cash used in financing activities amounted to 104 million yen, compared with 228 million yen provided in the same
period of the previous fiscal year. This was mainly due to a decrease of 200 million yen in proceeds from short-termloans payable and an increase of 200 million yen in repayment of short-term loans payable.

(4) Outlook for the futureWith the goal of "driving DX in society through IT technology and innovation," our group is working to become acompany that creates new value through the fusion of technology and open innovation.
In the SaaS business, the number of users of the SS Cloud series is steadily increasing and we aim to further expand
the number of users.
In line with the review of the timing and scope of the SaaS business to be paid for, we will conservatively estimate anddetermine the contracted projects in the system development business.
In addition, the Company has changed the basis for recording sales for some services (from gross sales to net sales).
The gap with the medium-term management plan has become larger due to a number of factors.
In light of the above, the Company has decided to completely review its business environment and business strategies,
and to formulate a new medium-term management plan.
We are also promoting ReTech (Re-Tech) and FinTech (FinTech) by developing the "SS Cloud Series" and "SS
Payment Series" that leverage our track record and know-how accumulated through system development to date.
Based on these circumstances, the Company forecasts net sales of 4,400 million yen, operating income of 310 million
yen, ordinary income of 220 million yen, and net income attributable to owners of the parent of 110 million yen for the
next fiscal year.

The above forecasts are based on information currently available to the Company and certain assumptions that are
judged to be reasonable, and are not intended to be a promise by the Company that they will be achieved. Actual results
may differ significantly due to various factors.

2. Basic approach to the selection of accounting standards
Our Group prepares its consolidated financial statements in accordance with Japanese GAAP, as it does not engage
in international business development or fundraising.

8

Systemsoft Corporation (7527) Consolidated Financial Results for the Fiscal Year Ended September 30,2022(Under Japanese GAAP)
Updated: November 11, 2022

3. Consolidated Financial Statements and Key Notes(1) Consolidated Balance Sheet(Unit: thousand yen)
Current consolidated fiscal year
(October 1, 2021 toSeptember 30, 2022)

Previous consolidated fiscal year
(October 1, 2020 to
September 30, 2021)

ASSETS
Current assets
Cash and deposits

2,081,361

1,949,892

Notes and accounts receivable
Notes, accounts receivable and contract
assetsWork in progress

1,678,727――

1,547,341

122,725

35,04921

39

Prepaid expenses

99,803200,236

Other

181,289

292,168

Allowance for doubtful accounts-5,397-30,084

4,158,531

3,994,644

Property, plant and equipment (net)27,85332,976

Tools, equipments and fixtures (net)19,31814,159Total tangible fixed assets

47,172

47,135

Goodwill

2,044,403

2,069,524

Business right

210,420

170,340

Software118,686

94,064

Raw materials and stored products

Total current assets
Fixed assets
Tangible fixed assets

Intangible fixed assets

85,20777,313

2,458,718

2,411,242

Investment securities

483,564

409,531

Stocks of subsidiaries
Other securities of subsidiaries andaffiliates
Long-term prepaid expenses

137,698

137,698

52,038122,984

29,361

12,594

Deferred tax assets

63,31651,897

Other
Total intangible assets
Investments and other assets

Other37,07637,076

Total investments and other assets

803,055

771,782

3,308,946

3,230,160

7,467,478

7,224,804

Total fixed assets
Total assets

9Systemsoft Corporation (7527) Consolidated Financial Results for the Fiscal Year Ended September 30,2022(Under Japanese GAAP)
Updated: November 11, 2022

(Unit: thousand yen)
Current consolidated fiscal year
(October 1, 2021 toSeptember 30, 2022)

Previous consolidated fiscal year
(October 1, 2020 to
September 30, 2021)

LIABILITIESCurrent liabilities
Notes and accounts payable

436,292

181,058

Short-term loans payable

200,000―

Bonds due within one year

100,000

100,000―

120,000

Accounts payable

142,000

99,822

Accrued expenses

17,77911,657

Income taxes payable

82,01084,827

Accrued consumption tax, etc.

74,81043,435

Advance received

11,6798,990

Allowance for loss on orders received

4,929

―

Other

33,610126,058

1,103,113

775,849

Corporate bonds
Long-term debt

380,000

280,000―

170,000

Long-term accrued liabilities
Asset retirement obligations

126,722

115,741

10,145

10,176

8,974

7,372

525,841

583,290

1,628,954

1,359,140

Capital stock

1,663,904

1,706,476

Long-term debt due within one year

Total current liabilities
Fixed liabilities

Other
Total fixed liabilities
Total liabilities
EquityShareholders' equity
Capital surplus

3,879,259

3,712,343

Retained earnings

278,103522,094

Treasury stock-8,064-8,0785,813,203

5,932,836-2,523

1,675

Foreign currency translation adjustments-15,743-101,032

Total accumulated other comprehensive
income (loss)-18,266-99,357

Stock acquisition rights

35,686

24,519Non-controlling interests

7,900

7,665

5,838,523

5,865,664

7,467,478

7,224,804

Total shareholders' equity
Accumulated other comprehensive income(loss)
Valuation difference on available-for-salesecurities

Total net assets
Total liabilities and net assets

10Systemsoft Corporation (7527) Consolidated Financial Results for the Fiscal Year Ended September 30,2022(Under Japanese GAAP)
Updated: November 11, 2022

(2) Consolidated Statements of Income and Consolidated Comprehensive Income Statements
Consolidated statement of income(Unit: Thousand yen)Previous consolidated fiscal year
(October 1, 2020 to
September 30, 2021)

Current consolidated fiscal year
(October 1, 2021 toSeptember 30, 2022)

Sales

4,920,126

4,704,404

Cost of sales

3,619,066

3,367,906

Gross profit

1,301,060

1,336,498

Selling, general and administrative expenses

923,266

953,761

Operating income

377,793382,736

Non-operating income
Interest income

2,735

278

Dividend received

494
15,883

3,404
88,205

7,748
15,000

3,316
1,250

Foreign exchange gains
Subsidy income
Consulting revenue
Other

2,269

726

Total non-operating income

44,13097,18011,561
27,634

17,43816,753393
10,300912
20,000Allowance for doubtful accounts

13,457―520
24,686

Other

15,89522,493

Total non-operating expenses

79,241

102,803342,682

377,113

Non-operating expenses
Interest expenses
Payment fees
Consumption tax difference
Donation
Reorganization costs

Ordinary income
Extraordinary gains
Gain on sales of investment securities

―

4,464

Gain on reversal of provision for loss on transfer

238,106
3,244-

Total extraordinary gains

241,350

4,464

Loss on impairment of fixed assets
Loss on sales of investment securities

4,691
―
―

12,063
3,063

Loss on valuation of investment securities
Loss on store closing

14,109―1,313
31,470Total extraordinary loss

18,80057,714565,232

323,864

77,040111,697

5,174

11,384

Total income taxes

82,215123,081Net income

483,016

200,782

-295

-234

483,312201,017

Marginal gain on stage acquisition

Extraordinary loss

Loss on retirement of fixed assets

Net Income before taxes or net loss before
adjustments to taxes, etc
Corporate tax, municipal tax and business taxes
Adjustment to corporate taxes, etc

Net loss attributable to non-controllingshareholders
Net income attributable to owners of parent or net
loss attributable to owners of parent

Consolidated statements of comprehensive income

11

9,804

Systemsoft Corporation (7527) Consolidated Financial Results for the Fiscal Year Ended September 30,2022(Under Japanese GAAP)
Updated: November 11, 2022

(Unit: Thousand yen)Previous consolidated fiscal year
(October 1, 2020 to
September 30, 2021)

Net income
Other comprehensive income
Valuation difference on available-for-salesecurities
Exchange conversion adjustment accountTotal other comprehensive income
Comprehensive income(Breakdown)Comprehensive income for ownersof parent
Comprehensive income fornon-controlling shareholders

12

Current consolidated fiscal year
(October 1, 2021 toSeptember 30, 2022)

483,016

200,782

5,440

4,198

-15,654-85,289-10,214-81,091

472,802

119,691

473,097

119,926

-295

-234

Systemsoft Corporation (7527) Consolidated Financial Results for the Fiscal Year Ended September 30,2022(Under Japanese GAAP)
Updated: November 11, 2022

(3) Consolidated Statement of Changes in Shareholders’ equity
Previous consolidated fiscal year (October 1, 2020 to September 30, 2021)(Unit: thousand yen)

Shareholders' equity
Capital stock
Balance at the beginning of current
periodCapital surplus Retained earnings

Treasury stock

Total
shareholders'equity-8,0503,950,907

1,511,404

3,151,487

152,500

152,500

305,000

Increase due to merger

1,210,015

1,210,015

Dividends from surplus-136,017-136,017-703,933

Changes during the period
Exercise of stock acquisitionrights

Net income attributable toowners of the parent

483,312Acquisition of treasury stock

483,312-13

Transfer from capital surplus toretained earnings
Changes in items other thanshareholders' equity (net)Total changes of items during theperiodBalance at the end of current
period-13-498,725

498,725―

152,500

727,772

982,037-13

1,862,296

1,663,904

3,879,259

278,103-8,064

5,813,203

Accumulated other comprehensive income

Balance at the
beginning of current
periodChanges during theperiodExercise of stockacquisition rights
Increase due tomergerDividends fromsurplus
Net income
attributable toowners of the parent
Acquisition oftreasury stock
Transfer from
capital surplus toretained earnings
Changes in items
other thanshareholders' equity(net)
Total changes of items
during the period
Balance at the end ofcurrent period

Valuationdifference onother securities

Foreignexchange
conversion
adjustments-7,963-88

Other
Stock acquisition Non-controllingcomprehensive
rightsinterests
incomecumulative total-8,05213,801

8,196

Total net assets

3,964,852

305,000
1,210,015-136,017
483,312
-13
―

5,440

-15,654-10,21421,884-295

11,375

5,440-15,654-10,21421,884-295

1,873,671-2,523-15,743-18,266

35,6867,900

5,838,523

13

Systemsoft Corporation (7527) Consolidated Financial Results for the Fiscal Year Ended September 30,2022(Under Japanese GAAP)
Updated: November 11, 2022

Current consolidated fiscal year (October 1, 2021 to September 30, 2022)(Unit: thousand yen)

Shareholders' equity
Capital stock
Balance at the beginning of current period
Cumulative effect of a change inaccounting policy
Balance at beginning of current period
reflecting change in accounting policy

1,663,904

Capital surplus

Retained earnings

Treasury stock

Total shareholders'equity3,879,259

278,103-8,064

5,813,203

1,693
1,663,904

3,879,259

279,797

1,693-8,064

5,814,897

Changes during the period

42,571

Exercise of stock acquisition rights
Dividends from surplus

42,57185,143-168,208-168,208

Net income attributable to shareholdersof the parent company

201,017

Acquisition of treasury stock

201,017-13

Transfer from capital surplus toretained earnings
Changes in items other thanshareholders' equity (net)Total changes of items during the period
Balance at the end of current period-13―-41,279

41,27942,571-166,916

242,297-13

117,939

1,706,476

3,712,343

522,094-8,0785,932,836

Accumulated other comprehensive income

Balance at the
beginning of current
periodCumulative effect ofa change inaccounting policy
Balance at beginningof current period
reflecting change inaccounting policy

Other
Stock acquisition Non-controlling
Valuation
Foreign currency
Total net assets
comprehensive
rightsinterests
difference ontranslation
incomeother securities
adjustments
Cumulative total-2,523-15,743-18,266

35,6867,900

5,838,523
1,693-2,523-15,743-18,266

35,6867,900

5,840,217

Changes during theperiodExercise of stockacquisition rights
Dividends fromsurplus
Net income
attributable toshareholders of theparent company
Acquisition oftreasury stock
Transfer from
capital surplus toretained earnings
Changes in items
other thanshareholders' equity(net)
Total changes of items
during the period
Balance at the end ofcurrent period

85,143-168,208

201,017

-13

―

4,198

-85,289-81,091-11,166-234-92,492

4,198-85,289-81,091-11,166-234

25,446

1,675-101,032-99,357

24,5197,665

5,865,664

14

Systemsoft Corporation (7527) Consolidated Financial Results for the Fiscal Year Ended September 30,2022(Under Japanese GAAP)
Updated: November 11, 2022

(4) Consolidated Statements of Cash Flows(Unit: thousands of yen)Previous consolidated fiscal year
(October 1, 2020 to
September 30, 2021)

Current consolidated fiscal year
(October 1, 2021 toSeptember 30, 2022)

565,232

323,864

Cash flow from operating activities
Net income before income taxes and minority
interests
Depreciation

176,349

125,055

Impairment loss
Amortization of goodwill
Increase (decrease) in allowance for doubtful
accounts
Increase (decrease) in allowance for loss ontransfer
Increase (decrease) in allowance for loss on order
received
Interest and dividends income―
101,148

12,063
130,592―

24,686-11,579―-594-4,929-3,229-3,682

Interest expense
Loss on disposal of fixed assets

11,561
4,691

17,4389,804

Loss (gain) on sales of securities
Loss (gain) on valuation of securities―
14,109-1,401
1,313

Loss on store closures(Gain) loss on step acquisitions―-238,106

31,470―(Increase) decrease in trade receivables(Increase) decrease in trade receivables andcontract assets(Increase) decrease in inventories
Decrease (increase) in marketable securities
Increase (decrease) in notes and accounts
payable-trade
Increase (decrease) in accounts payable-other-629,408――

131,386-37,235
25,45590,098―213,334-255,234-166,802-44,920

Increase (decrease) in accrued consumption taxes
Foreign exchange loss (gain)

37,070-15,883-31,375-88,205

Other

40,740-150,985

Subtotal

86,853

317,038

Interest and dividends received

3,229-12,492

Amount of interest paid
Income taxes paid or refunded (paid)

10,47037,827-14,518-144,484

115,417

168,505

Payments for acquisition of tangible fixed assets
Payments for retirement of tangible fixed assets-6,862-1,294-16,564―

Payments for acquisition of intangible fixed assets
Payments for purchase of investment securities-4,087-175,000-29,958-160,000

Proceeds from sales of investment securities
Payments for loans receivable――

162,779-2,400

Proceeds from collection of loans receivable
Payment for guarantee money deposited

336-8,040414―

Proceeds from collection of guarantee deposited
Payments for acquisition of shares of nonconsolidated subsidiaries
Payments for acquisition of shares in subsidiaries
and affiliates
Cash flow from investment activities

21,783――-150,000-27,158―-200,323-195,729

Cash flow from operating activities
Cash flow from investment activities

15

Systemsoft Corporation (7527) Consolidated Financial Results for the Fiscal Year Ended September 30,2022(Under Japanese GAAP)
Updated: November 11, 2022

(Unit: thousands of yen)Previous consolidated fiscal year
(October 1, 2020 to
September 30, 2021)

Current consolidated fiscal year
(October 1, 2021 toSeptember 30, 2022)

200,000―――-200,000
300,000

Repayment of long-term debt
Payments for redemption of bonds―-100,000-10,000-100,000

Dividends paid
Proceeds from issuance of shares upon exerciseof stock acquisition rights
Other-136,017-168,208

265,000

73,977-13-13

Cash flow from financial activities

228,968-104,244

Cash flow from financial activities
Proceeds from short-term loans payable
Repayment of short-term borrowings
Proceeds from long-term debt

Increase (decrease) in cash and cash equivalents

144,062-131,468

1,789,340

2,081,361

Increase (decrease) in cash and cash equivalents
resulting from change in scope of consolidation

674―

Increase in cash and cash equivalents associatedwith the merger

147,283―

Cash and cash equivalents at end of period

2,081,361

1,949,892

Cash and cash equivalents at beginning of period

16

Systemsoft Corporation (7527) Consolidated Financial Results for the Fiscal Year Ended September 30,2022(Under Japanese GAAP)
Updated: November 11, 2022

(5) Notes on consolidated financial statements(Notes on going concern assumptions)
Nothing applicable.

(Change in scope of consolidation or application of equity method)
Effective April 1, 2022, the Company acquired shares of SS Support Corporation, and as a result, the company was
included in the scope of consolidation from this fiscal year.

(Change in accounting policy)(Application of accounting standard for revenue recognition, etc.)
The "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020. (hereinafter referred
to as the "Accounting Standard for Revenue Recognition") and others are applied from the beginning of the current fiscal
year, and revenue is recognized at the amount expected to be received in exchange for the promised goods or services
when control of the promised goods or services is transferred to the customer.
In the past, the percentage-of-completion method was applied to made-to-order software development contracts if theoutcome of the construction activity is deemed certain during the course of the activity, while the completed-contract
method was applied to other contracts. Effective from the beginning of the fiscal year ended March 31, 2022, theCompany changed its accounting method to recognize revenue over a period of time as the performance obligation totransfer goods or services to customers is satisfied, provided that control over the goods or services is transferred tocustomers over a specified period of time. For performance obligations to be satisfied over a specified period of time, if
the degree of progress toward satisfying the performance obligation cannot be reasonably estimated at the initial stageof the contract, the Company does not recognize revenue at the initial stage of the contract but recognizes revenue when
the degree of progress can be reasonably estimated.
In addition, some made-to-order software development contracts that are determined to be a single performanceobligation as a whole, although the contract with the customer is divided into processes, are combined and revenue isrecognized over a certain period of time based on a reasonable estimate of the degree of progress.
The measurement of progress toward satisfying performance obligations is based on the percentage of development
costs incurred by the end of each reporting period to the total expected development costs. For software development
contracts with a very short period of time between the transaction start date and the point in time when the performanceobligation is expected to be fully satisfied, an alternative treatment is applied, whereby revenue is not recognized over a
specified period of time and revenue is recognized when the performance obligation is fully satisfied.
In accordance with the transitional treatment prescribed in the proviso of Paragraph 84 of the Accounting Standard for
Revenue Recognition, the cumulative effect of retrospective application of the new accounting policy prior to thebeginning of the current fiscal year is added to or deducted from retained earnings at the beginning of the current fiscal
year, and the new accounting policy is applied from such beginning balance. The new accounting policy is applied fromthe balance at the beginning of the current fiscal year.
As a result, net sales, operating income, ordinary income, and income before income taxes and minority interests eachincreased by 2,091 thousand yen in the current fiscal year. In addition, the balance of retained earnings at the beginningof the current period increased by 1,693 thousand yen.
Due to the application of the revenue recognition accounting standard, "Notes and accounts receivable," which waspresented in "Current assets" in the consolidated balance sheet for the previous consolidated fiscal year, is included in"Notes and accounts receivable, trade and contract assets" from the beginning of the current consolidated fiscal year. In
accordance with the transitional treatment prescribed in Paragraph 89-2 of the Accounting Standard for Revenue
Recognition, no reclassification has been made for the previous consolidated fiscal year using the new presentation.

17

Systemsoft Corporation (7527) Consolidated Financial Results for the Fiscal Year Ended September 30,2022(Under Japanese GAAP)
Updated: November 11, 2022

(Application of Accounting Standard for Measurement of Fair Value, etc.)
The "Accounting Standard for Calculation of Fair Value" (ASBJ Statement No. 30, July 4, 2019. ("Accounting Standard
for Fair Value Calculation"). The new accounting policy prescribed by the Accounting Standard for Fair Value Calculation,etc., is applied from the beginning of the current fiscal year, in accordance with the transitional treatment prescribed in
Paragraph 19 of the Accounting Standard for Fair Value Calculation and Paragraph 44-2 of the Accounting Standard for
Financial Instruments (ASBJ Statement No. 10, issued on July 4, 2019). In accordance with the treatment, the new
accounting policy stipulated by the fair value accounting standard will be applied prospectively. There is no impact on
the consolidated financial statements.

(Segment Information, etc.)[Segment Information]
1 Outline of reportable segments
The Company's reportable segments are components of the Company for which separate financial information isavailable and are subject to periodic review by the Board of Directors for the purpose of determining the allocation ofmanagement resources and evaluating performance.
The Company formulates comprehensive strategies for each of its major services, and its divisional units (units) areresponsible for managing these strategies and developing business activities.
Therefore, the Company consists of two reportable segments, "Technology Business" and "Open Innovation
Business," which are organized by major services.
The Technology Business mainly provides system development and solution services. The "Open Innovation
Business" provides consulting services to startup companies for business launches, etc. and operates shared offices toprovide a place for innovation.
2 Matters related to changes in reportable segments, etc.
Effective from the current fiscal year, the "Investment Business" segment was discontinued due to a change in fundmanagement policy.
As a result, the reporting segments were changed from the previous three segments of "Technology Business," "OpenInnovation Business," and "Investment Business" to two segments of "Technology Business" and "Open Innovation
Business.
As described in "Changes in Accounting Policies," the Company has applied the Accounting Standard for Revenue
Recognition and other accounting standards from the beginning of the current fiscal year, and has changed its accounting
method for revenue recognition, and therefore, the calculation method of profit or loss by business segment has beenchanged in the same manner.
As a result of this change, net sales and segment income of "Technology business" increased by 2,091 thousand yen
in the consolidated fiscal year under review compared with the previous method.
3 Calculation method for the amount of net sales, profit or loss, assets, liabilities and other items by reportable segment
The accounting methods used for the reported business segments are generally the same as those used in the
preparation of the consolidated financial statements. Profits of reportable segments are based on operating income.
Intersegment revenues and transfers are based on prevailing market prices.

18

Systemsoft Corporation (7527) Consolidated Financial Results for the Fiscal Year Ended September 30,2022(Under Japanese GAAP)
Updated: November 11, 2022

4 Information on net sales, income or loss, assets and other items by reportable segment
Previous consolidated fiscal year (October 1, 2020 to September 30, 2021)
Information on net sales, income or loss, assets and other items by reportable segment(Unit: thousands of yen)
Reporting Segment
Technology
business

Open
Innovation
Business

Other*
Investment

Total

Subtotal

Sales
Sales to external customers

3,731,118

1,031,476

156,9314,919,526

600

4,920,126

Sales or transfers inside or
between segments

4,159

35,953―

40,112―

40,112

3,735,277

1,067,429

156,931

4,959,639

600

4,960,239

Segment profit orLoss

295,092

97,233

148,674

540,999

157

541,157

Segment assets

4,811,816

1,586,967

286,7076,685,492

16,824

6,702,316

154,445

17,434―

171,879―

171,879

5,244

5,706

―

10,950―10,950Subtotal

Other items
Depreciation andamortization
Increase in tangible fixed
assets and intangible fixed
assetsNote: *"Other" refers to business segments not included as reporting segments.

Current consolidated fiscal year (October 1, 2021 to September 30, 2022)
Information on net sales, income or loss, assets and other items by reportable segment
Reporting Segment
Technology
Business

Open
Innovation Business

Other*

Total

Total

Sales
Sales to externalcustomers
Sales or transfers
inside or between
segments

3,348,406

1,355,998

4,704,404―

4,704,404

1,006

28,095

29,101―

29,101

Subtotal

3,349,412

1,384,093

4,733,505―

4,733,505

Segment profit orLoss

336,967

210,387

547,354△314

547,039

Segment assets

4,430,699

2,003,508

6,434,208

16,2996,450,508

97,48023,130120,611―

120,611

16,521

18,22434,745―34,745

Other items
Depreciation andamortization
Increase in tangible
fixed assets andintangible fixed assets

Note: *"Other" refers to business segments not included as reporting segments.

19

Systemsoft Corporation (7527) Consolidated Financial Results for the Fiscal Year Ended September 30,2022(Under Japanese GAAP)
Updated: November 11, 2022

5 Difference between the total amount of reportable segments and the amount recorded in the consolidated financial
statements, and main contents of the difference (matters related to difference adjustment)(Unit: thousands of yen)
Sales

Previous consolidated fiscal year

Current consolidated fiscal year

Total of reportable segments

4,959,639

4,733,505

Net sales in "Other" segment600―-40,112-29,101

4,920,126

4,704,404

Elimination of inter-segment
transactions
Net sales in consolidated financial
statements(Unit: thousands of yen)
ProfitPrevious consolidated fiscal year

Current consolidated fiscal year

540,999

547,354157-314

Corporate expenses*-163,363-164,303

Operating income in consolidated
financial statements

377,793382,736

Total of reportable segments
Profit in "Other" category

Note: ”Corporate expenses” are mainly general and administrative expenses that do not belong to any particular reportable segment.
(Unit: thousands of yen)assetsPrevious consolidated fiscal year

Current consolidated fiscal year

Total of reportable segments

6,685,492

6,434,208

Assets in the "Other" category

16,824

16,299Corporate assets*

765,161774,296

Total assets in consolidated financial
statements

7,467,478

7,224,804

Note: ”Corporate assets” are mainly head office buildings that do not belong to any reportable segment.

Other items

Depreciation andamortization
Increase in tangible andintangible fixed assets

Total of reportablesegments

Other

Adjustment amount(Unit: thousands of yen)Amount recorded inconsolidated financial
statements

Previous
Current
Previous
Current
Previous
Current
Previous
Current
consolidated consolidated consolidated consolidated consolidated consolidated consolidated consolidated
fiscal year
fiscal year
fiscal year
fiscal year
fiscal year
fiscal year
fiscal year
fiscal year

171,879

120,611

―

―

4,469

4,444

176,349

125,055

10,95034,745―――

11,777

10,95046,52220

Systemsoft Corporation (7527) Consolidated Financial Results for the Fiscal Year Ended September 30,2022(Under Japanese GAAP)
Updated: November 11, 2022

(Business Combinations, etc.)
Business combination through acquisition
1 Outline of the business combination(1) Name of the acquired company and its business
Name of acquired company: SS Support Corporation
Business Description: On-site mobilization and maintenance of electrical, plumbing, air conditioning, ventilation,and other facilities when problems occur.
Rush services such as investigation of the problem and emergency work(2) Main reason for the business combination
The purpose is to achieve greater operational efficiency and productivity and to further promote DX for real estate
operators by developing and providing real estate operators with a one-stop cloud system that handles everythingfrom subscription application procedures to subscriber status monitoring, in addition to emergency response
services in the event of a problem.
(3) Date of business combination
April 1, 2022
(4) Legal form of the business combination
Acquisition of shares for cash(5) Name of the company after the merger
The name will remain unchanged(6) Percentage of voting rights acquired
87.7%(7) Main basis for determining the acquiring company
The Company's consolidated subsidiary SS Technologies Corporation acquired the shares for cash consideration.
2 Period of the acquired company's results included in the consolidated financial statements
From April 1, 2022 to September 30, 2022
3 Breakdown by type of acquisition cost and consideration of the acquired company
The acquisition cost, which is undisclosed due to contractual confidentiality obligations, was determined by taking
into consideration the results of a third-party valuation of the shares.
4 Description and amount of major acquisition-related expenses
Fees and commissions for advisory services 520 thousand yen
5 Amount of goodwill incurred, reason for incurrence, amortization method and amortization period(1) Amount of goodwill incurred
155,713 thousand yen(2) Cause of occurrenceThis is the excess return expected from future business development.
(3) Amortization method and period
Equal amortization over 20 years
In the third quarter consolidated accounting period, based on the reasonable information available at the time of
preparation of the quarterly consolidated financial statements, the Company had applied provisional accounting
treatment for the allocation of acquisition costs and at the end of the current fiscal year, the allocation has been
completed.

21

Systemsoft Corporation (7527) Consolidated Financial Results for the Fiscal Year Ended September 30,2022(Under Japanese GAAP)
Updated: November 11, 2022

6 Amounts of assets received and liabilities assumed on the date of business combination and their breakdown
Current assets
143,854 thousand yen
Total assets

143,854 thousand yen

Current liabilities

149,567 thousand yen

Total liabilities

149,567 thousand yen

7 Estimated amount and calculation method of the effect on the consolidated statement of income for the current
consolidated fiscal year as if the business combination had been completed on the first day of the consolidated fiscal
year
Net sales
12,480 thousand yen
Operating income

11,274 thousand yen

Ordinary income

11,274 thousand yen

Income before income taxes and minority interests

11,274 thousand yen

Net income attributable to parent company shareholders

9,808 thousand yen

Net income per share

0.12 yen(Method of calculating the estimated amount)
The difference between the net sales and profit/loss information calculated as if the business combination had
been completed at the beginning of the consolidated fiscal year and the net sales and profit/loss information in
the consolidated statement of income of the acquired company is the estimated amount of impact.
(Per share information)
Previous consolidated fiscal year
(October 1, 2020 to
September 30, 2021)

Current consolidated fiscal year
(October 1, 2021 toSeptember 30, 2022)

Net assets per share

68.90 yen

68.79 yen

Net income (loss) per share

6.15 yen

2.37 yen

Net income per share after adjustment ofpotential shares

6.15 yen

2.37 yen

Note: The basis for calculating net income (loss) per share and diluted net income per share is as follows
Previous consolidated fiscal year
(October 1, 2020 to
September 30, 2021)

Current consolidated fiscal year
(October 1, 2021 toSeptember 30, 2022)(1) Net income (loss) per share(Basis for calculation)
Net income (loss) attributable to ownersof the parent (thousand yen)

483,312201,017――

Net income (loss) attributable to ownersof the parent attributable to common
stock (thousand yen)

483,312201,017

Average number of shares of common
stock during the period (shares)

78,526,881

84,708,524――

1,203,122

90,640

Amount not attributable to commonshareholders (thousand yen)

(2) Net income per share after adjustment
for residual securities(Basis for calculation)
Adjustment of net income attributable toowners of the parent (thousand yen)
Increase in the number of common
stocks (shares)
Outline of latent shares not included in thecalculation of diluted net income per share
due to the absence of dilutive effects

Fourth series of stock acquisition Fourth series of stock acquisitionrightsrights(Number of shares: 1,427,300 shares) (Number of shares: 1,427,300 shares)

22

Systemsoft Corporation (7527) Consolidated Financial Results for the Fiscal Year Ended September 30,2022(Under Japanese GAAP)
Updated: November 11, 2022

(Significant subsequent events)
Nothing applicable.

23