This is an unofficial translation. In case of any difference in meaning between the original Japanese text and the English translation, Japanese text shall prevail.

Consolidated Summary Report under Japanese GAAP
for the third quarter of the fiscal year ending June 30, 2023
April 28, 2023
Company Name:
Code Number:
Representative:
For inquiry:

AVANT GROUP CORPORATION(Formerly AVANT CORPORATION)
3836(Title) President, Group CEO(Name) Tetsuji Morikawa(Title) Director, Group CFO(Name) Naoyoshi Kasuga

Securities report issue date: May 12, 2023
Supplementary information for financial statements: Available
Explanatory meeting to be held: No

Stock exchange listings: Tokyo
URL: https://www.avantcorp.com/
TEL: (03) 6388-6739

Dividend payment date: -(Millions of yen, rounded down to the nearest unit)

1. Consolidated Financial Results for the Nine Months Ended March 31, 2023
(1) Consolidated results of operations
Net sales
Nine months ended
March 31, 2023
March 31, 2022

%
17.4
-

16,187
13,786Comprehensive income (loss)

EBITDANet profit per
share
Nine months ended
March 31, 2023
March 31, 2022

%
13.0
-

3,244
2,871

for the nine months ended March 31, 2023

Operating profit
%
11.4
-

2,920
2,622

1,921 million yen (19.4%)(Percentages indicate year-on-year changes)
Profit attributable toOrdinary profit
owners of the parent

%
13.5
-

2,910
2,565

for the nine months ended March 31, 2022

1,871
1,572

%
19.0
-

1,609 million yen (-)

Diluted net
profit per share

yen

yen

49.72
41.80

-

(Notes) EBITDA is derived by adding depreciation and amortization of goodwill to operating profit.
The Company has applied the "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020), etc. from the beginning of the firstquarter of the fiscal year ended June 30, 2022, and the figures for the nine months ended March 31, 2022 are after the application of the said accounting standard,etc., so the percentage change from the same quarter of the previous year is not stated.

(2) Consolidated financial condition
Total Assets
As ofMarch 31, 2023
June 30, 2022
(Reference) Equity

Net Assets

Equity Ratios

Unit: million yen

Unit: million yen%

16,69916,617

12,064
10,59772.2
63.8

As of March 31, 2023

12,064 million yen

As of June 30, 2022

10,597 million yen

2. Dividends on common stock
Dividends per share
1st
2nd
3rd
Fiscalquarter-end quarter-end quarter-end year-end
Fiscal year ended June 30, 2022
Fiscal year ending June 30, 2023
Fiscal year ending June 30, 2023 (Forecast)

Annual

yen

yen

yen

yen

yen

-

0.00
0.00

-

13.00

13.00

15.00

15.00

Revisions to the most recently announced dividend forecast: None
(Note)Breakdown of year-end dividend for the fiscal year ended June 30, 2022: ordinary dividend of 12.00 yen and commemorative dividend of 1.00 yen (25thanniversary of the Company's founding)

3. Consolidated earnings forecasts for the fiscal year ending June 30, 2023
(Percentages indicate year-on-year changes)

Net sales

Operating profit

Profit attributable toowners of the parent

Ordinary profit

Net profit
per share

Fiscal Year ending

Unit: million yen%

Unit: million yen%

Unit: million yen%

Unit: million yen%

yenJune 30, 2023

21,800

16.6

3,100

-4.5

3,100

3.7

2,030

-0.7

53.93

(Note)

Revisions to the most recently announced earnings forecast: None

Notes(1) Changes in significant subsidiaries during the period (changes in “Specified Subsidiaries” (Tokutei Kogaisha) accompanying changes
in scope of consolidation): No
Newly added to the scope of consolidation: nil Newly deleted from the scope of consolidation: nil(2) Application of accounting procedures specific to the preparation of quarterly consolidated financial statements: none
(3) Changes in accounting policies, accounting estimates and restatement:(i) Changes in accounting policies due to revision of accounting standards: Yes(ii) Changes in accounting policies due to reasons other than item (i) above: No(iii) Changes in accounting estimates: No(iv) Restatement: No
Note: For details, please refer to "2. Quarterly Consolidated Financial Statements and Major Notes (4) Notes to Quarterly Consolidated Financial
Statements (Changes in Accounting Policies)" on page 15 of the attached document.

(4) Number of issued shares (common shares)(i) Total number of issued shares
including treasury shares(ii) Number of treasury shares held(iii) Average number of shares

As of March 31, 2023
As of March 31, 2023
Nine months ended March 31, 2023

37,645,851 shares

As of June 30, 2022

2,998 shares

As of June 30, 2022

37,634,014 shares

Nine months ended March 31, 2021

37,625,501 shares
2,998 shares
37,611,645 shares* This report is exempt from the audits of CPAs or Audit firms.
* Explanation of the appropriate use of earnings forecasts and other special notes
Forward-looking statements in this report, including earnings forecasts, are based on information currently available to the Company
and on certain assumptions deemed to be reasonable. These statements are not promised by the Company regarding future performance.
Actual results may differ materially from the forecast depending on a range of factors. Please refer to "Earnings Forecasts" on page 8 forthe assumptions for earnings forecasts and notes for using earnings forecasts.

Accompanying Materials – Table of Contents
1. Qualitative Information on Financial Results for the Current Quarter .................................................... 2(1) Management's Discussion on Business Operations .............................................................................. 2(2) Discussion on Financial Position .......................................................................................... 6(3) Earnings Forecasts ....................................................................................................... 8
2. Quarterly Consolidated Financial Statements and Notes.................................................................. 9(1) Quarterly Consolidated Balance Sheets.......................................................................................... 9(2) Quarterly Consolidated Statements of Income and Statements of Comprehensive Income......................... 11
Quarterly Consolidated Statements of Income .................................................................................11
Quarterly Consolidated Statements of Comprehensive Income ......................................... 12(3) Quarterly Consolidated Statements of Cash Flows ..................................................................... 13(4) Notes to Quarterly Consolidated Financial Statements ..................................................................... 15(Notes on the Going Concern Assumption) .............................................................................. 15(Notes on Substantial Changes in the Amount of Shareholders' Equity) .................................. 15(Changes in Accounting Policies) ........................................................................................................ 15(Additional Information) ........................................................................................................... 15(Segment Information) ............................................................................................. 16(Revenue Recognition) ........................................................................................................... 17

1. Qualitative Information on Financial Results for the Current Quarter(1) Management's Discussion on Business Operations
Consolidated financial results for the nine months ended March 31, 2023 are as follows.
(Millions of yen, rounded down to the nearest unit)
Nine months ended

Nine months ended

March 31, 2022

March 31, 2023

Year-on-Year Change
Amount%Net sales

13,786

16,187

2,400

17.4

Operating profit

2,622

2,920

297

11.4

Ordinary profit

2,565

2,910

345

13.5

Profit attributable to owners of theparent

1,572

1,871

299

19.0

Consolidated net sales were 16,187 million yen (up 17.4% year-on-year) as a result of steady growth in all threebusinesses: Group Governance, Digital Transformation, and Outsourcing, as we proactively responded to growing
investment needs among Japanese companies, our customers, to maintain and strengthen competitiveness by"upgrading corporate management and activities using data and digital technology," which is becoming a mid- tolong-term trend.
The ratio of recurring sales (sales that occur on an ongoing basis, such as software maintenance fees), which is oneof the management indicators in the medium-term management plan, was 34.4%, up 0.3 percentage points from thesame period of the previous year, as the Outsourcing Business, where the recurring sales ratio is constantly maintainedat around 90%, showed a high growth rate, resulting in an increase in the sales composition ratio for the entire Group.
Also, total recurring sales continued to grow steadily, increasing 18.6% year-on-year.
As for profits, in addition to increases in fixed personnel expenses due to improved compensation and an increasein headcount following reinforced recruitment efforts to strengthen competitiveness for the purpose of securing
human resources, and an increase in outsourced processing expenses in response to increased demand from customers,
due to the group reorganization, there were also rebranding expenses reorganization, and costs due to productrationalization and improvement of development environment at the operating companies. However, these factors
were offset by the effect of increased sales in each business segment, resulting in operating profit of 2,920 million
yen (up 11.4% year-on-year), ordinary profit of 2,910 million yen (up 13.5% year-on-year), and profit attributable toowners of the parent of 1,871 million yen (up 19.0% year-on-year).

The status of each reportable segment is as follows.
(i) Net sales(Millions of yen, rounded down to the nearest unit)
Group Governance Businesses
Digital Transformation BusinessOutsourcing BusinessEliminationofinter-segment
transactions
Consolidated Net sales

Nine months ended
March 31, 2022
6,806
5,273
2,252

Nine months ended
March 31, 2023
7,824
6,174
2,773

Year-on-Year Change
Amount
%
1,018
900
520

(545)

(584)

(38)

-

13,786

16,187

2,400

17.4

Nine months ended
March 31, 2022
1,554
981
578

Nine months ended
March 31, 2023
1,517
1,241
629

(491)

(466)

24

-

2,622

2,920

297

11.4

15.0
17.1
23.1

(ii) Operating profit(Millions of yen, rounded down to the nearest unit)
Group Governance Businesses
Digital Transformation BusinessOutsourcing BusinessCorporate Expenses and Eliminationof inter-segment transactions
Consolidated operating profit

Year-on-Year Change
Amount
%
(37)
(2.4)
259
26.5
50
8.8

In the Group Governance Business, net sales increased to 7,824 million yen, up 15.0% from the same period of theprevious year. In addition to the core business of consolidated accounting and disclosure solutions, growth in solutions
that contribute to group management information control drove growth, with the increase in sales of consulting
services being the main reason for the rise in sales during the quarter. Meanwhile, aside from an increase in outsourced
processing expenses to meet rising demand, expenses increased for product rationalization and development
environment improvement that were conducted simultaneously with the reorganization, resulting in a year-on-year
decline of margins and a decrease in the amount of profit. As a result, operating profit was 1,517 million yen (up2.4% year-on-year).
In the Digital Transformation Business, the need among customers to utilize data for decision making related to
management and business promotion continues to accelerate and has shifted to a focus on the provision of cloud data
platforms and ever-larger projects. On the other hand, the business intelligence-related development, the traditionalcore of the business also grew was also strong, resulting in an increase in net sales to 6,174 million yen (up 17.1%
year-on-year). Although personnel expenses increased due to higher compensation levels intended to strengthen
competitiveness in order to secure staff, this was offset by the effect of higher sales, and operating profit was 1,241
million yen (up 26.5% year-on-year), significantly higher than the same period a year earlier.
In the Outsourcing Business, while continuing to maintain high net sales growth rates, recurring sales continued tobuild steadily, resulting in net sales increasing to 2,773 million yen (up 23.1% year-on-year). In terms of profitability,
factors that increased costs, such as the promotion of personnel hiring and increased office space to achievesustainable growth in the future, led to margins declining from the year earlier period, but due to sales growth
operating profit increased to 629 million yen (up 8.8% year-on-year).

The number of employees on a consolidated basis was 1,270 at the end of the third quarter, up 44 from the end of theprevious fiscal year.

Quarterly Trends of Number of Employees of the GroupThe status of orders received and sales by segment in the third quarter of the fiscal year under review is as follows.
(i) Orders Received
Fiscal Year ended
June 30, 2022
Third quarter
OrdersOutstanding
Received
OrdersGroup GovernanceBusinesses
Digital Transformation
Business
Outsourcing BusinessElimination of inter-segment
transactions
Total(Millions of yen, rounded down to the nearest unit)
Fiscal Year ending
Year-on-Year Change
June 30, 2023
Third quarter
AmountOrdersOutstanding
OrdersOutstanding
Received
Orders
Received
Orders

6,814

2,358

7,217

2,529

402

171

4,838

809

6,397

1,354

1,559

545

2,511

1,716

2,022

1,695

(489)

(21)

(575)

(319)

(128)

(123)

446

196

13,5894,563

15,508

5,455

1,919

891

(ii) Net Sales
Fiscal Year ended
June 30, 2022
Third quarter
Group Governance Businesses
Digital Transformation BusinessOutsourcing BusinessElimination of inter-segment
transactions
Total

6,806
5,273
2,252

(Millions of yen, rounded down to the nearest unit)
Fiscal Year ending
Year-on-Year Change
June 30, 2023
Third quarter
Amount
%
7,824
1,018
15.0
6,174
900
17.1
2,773
520
23.1

(545)

(584)

(38)

－

13,786

16,187

2,400

17.4

Quarterly trends in net sales and operating profit are as follows:
Net sales and operating profit for the last four quarters(Millions of yen, rounded down to the nearest unit)
Fiscal Year ended
June 30, 2022
Fourth quarter
Net sales

Fiscal Year ending
June 30, 2023
Second quarter

First quarter

Third quarter

4,916

5,025

5,497

5,664

Operating profit

624

614

1,178

1,127

Operating profit margin
(%)

12.7

12.2

21.4

19.9

Quarterly trends of net sales, operating profit and operating profit margins
Net Sales(Millions of yen)

Operating Profit

OP Margin

6,000

25%

5,500

19.9%

5,000

20%

4,500
4,000

15%

3,500
3,000
2,500

10%

2,000
1,500

5%

1,000
500
0

0%
Q1

Q2

Q3

FY06/19

Q4

Q1

Q2

Q3

FY06/20

Q4

Q1

Q2

Q3

FY06/21

Q4

Q1

Q2

Q3

FY06/22

Q4

Q1

Q2

Q3

FY06/23

Q4

(2) Discussion on Financial Position(i) Financial position
Total assets at the end of the third quarter were 16,699 million yen (up 82 million yen from the end of the previous
fiscal year). This was mainly due to a 410 million yen decrease in current assets, which was mainly attributable to a
1,271 million yen decrease in cash and deposits and a 553 million yen increase in notes, accounts receivable - tradeand contract assets, while non-current assets increased by 493 million yen, which was mainly attributable to increased
software for sale, with a 279 million yen increase in intangible assets.
On the other hand, total liabilities amounted to 4,635 million yen (down 1,384 million yen from the end of theprevious fiscal year). This was mainly due to a decrease of 586 million yen in income taxes payable, a 398 million
yen decrease in contract obligations, and a 399 million yen decrease in provision for bonuses.
Total net assets amounted to 12,064 million yen (up 1,466 million yen from the end of the previous fiscal year) due
to the recording of 1,871 million yen in profit attributable to owners of the parent and payment of 489 million yen in
dividends from retained earnings. As a result, the equity ratio was 72.2% (63.8% at the end of the previous fiscal
year), an improvement of 8.4 percentage points from the end of the previous fiscal year, and the Company believes
it maintains a highly stable financial balance with low interest-bearing debt.
(ii) Cash Flow
Cash and cash equivalents (hereinafter referred to as "net cash") at the end of the third quarter decreased by 1,271
million yen from the end of the previous fiscal year to 8,730 million yen. The status of each cash flow and its factors
are as follows.
< Cash flows from operating activities >Net cash used in operating activities totaled 93 million yen. (1,384 million yen provided in the same period of theprevious year)
The main factor of increase was profit before income taxes of 2,910 million yen, while the main factors of decrease
were decrease in provision for bonuses of 399 million yen, increase in notes, accounts receivable - trade and contract
assets of 553 million yen, a decrease in contract obligations of 398 million yen and income taxes paid of 1,554 million
yen.
< Cash flows from investing activities >Net cash used in investing activities totaled 674 million yen. (313 million yen used in the same period of the previous
year)
The main accounts of cash outflow were 184 million yen for purchase of property, plant and equipment, 466 million
yen for purchase of intangible assets, 126 million yen for purchase of investment securities, and 120 million yen for
payment of leasehold and guarantee deposits, while the main accounts of cash inflow were 90 million yen forproceeds from redemption of marketable securities and 139 million yen for proceeds from refund of leasehold andguarantee deposits.
< Cash flows from financing activities >Net cash used in financing activities totaled 502 million yen. (428 million yen used in the same period of the previous
year)
The main component of cash outflow was 489 million yen in dividends paid.

In our group, cash flow from operating activities in the first quarter are at a low level due to the payment of income
taxes and the payment of performance-based bonuses to officers and employees, and it gradually increases from thesecond quarter onward, and is typically positive for the full fiscal year (In the fiscal year under review, operating
cashflow has been different from previous years due to factors such as increases in sales of consulting services, which
require working capital upfront, and income taxes paid, but for the full year cashflow is expected to turn positive asin previous years).
Maintenance fees in the consolidated accounting related business and commissions paid for the outsourcing businessare prepaid for the year in advance of the provision of services, so as a result, the original business model has almost
no need for working capital. On the other hand, in the Digital Transformation Business as outsourcing costs and otherexpenses are paid in advance, working capital demand will increase as sales grow. However, by concentrating theexcess funds of the Group as a whole in the holding company, the Group is able to smoothly extend funds across theGroup. In addition to the total amount of cash held, the Group has established a commitment line totaling 3.5 billion
yen with banks with which it does business. Accordingly, at present there are no concerns about funding, and rather,
we intend to use the excess funds for strategic investment in the future.
Quarterly trends of Operating cash flow (Millions of yen)(3) Earnings Forecasts
In September 2018, the Company announced a five-year plan (target to be achieved in five years) as its MediumTerm Management Plan, and the fiscal year ending June 2023 is the final year of the plan. Ahead of finalizing ournext medium-term management plan commencing in the fiscal year ending June 2024, we have defined themateriality of the Avant Group as "to become a software company that helps enhance corporate value," and haveclarified what we aim to become during the period of the next medium-term plan. As a concrete measure to realize
this materiality, we have reorganized the group and been developing business activities as the new Avant Group on
October 1, 2022.
The reorganization of the group will also clarify the direction of each operating company and expand the means ofresponse, thereby enabling us to respond to growing needs better than ever before and achieve sustainable sales
growth. At the same time, in order to maximize the effects of the reorganization, we are aggressively implementing
expenditures for the future, including a review of the Group's branding and a fundamental revision of our productdevelopment strategy, including rationalization of our low-profit products.
Although there is a risk that future trends associated with the new coronavirus infection and inflation caused bysoaring raw material prices may affect the Group's performance, we believe that demand for the Group's businesswill continue to increase, as more companies seek to strengthen data-driven management and group governance.
As a result, the Company expects to achieve net sales of 21,800 million yen and operating profit of 3,100 million
yen in the current fiscal year.
Profits were higher than in the same period of the previous year as of the end of the third quarter. However, in
preparation for the start of the next medium-term management plan, we will continue to aggressively recruit humanresources that will be needed by the operating companies after Group reorganization to execute and accelerate their
growth strategies, and we will also continue our fundamental revision and implementation of our product strategy inthe next quarter, in order "to become a software company that helps enhance corporate value." Accordingly, at present,
we are maintaining our full-year earnings forecast unchanged based on our maximum estimate of the total amount ofexpenses to be incurred in connection with these activities.
In accordance with our existing dividend policy, we will raise the ratio of dividends to net assets, always being
conscious of exceeding the average of all listed companies, while at the same time striving to maintain stabledividends (in principle, dividends per share should not fall below the level of the previous fiscal year). In accordancewith this policy, we forecast a dividend of 15 yen per share for the current fiscal year.

Trends of dividends (adjusted for stock splits)(yen/share)

15.0
13.0
11.0
9.0
7.5
6.0

2018

2019

2020

2021

2022

2023
(Forecast)2. Quarterly Consolidated Financial Statements and Notes(1) Quarterly Consolidated Balance Sheets
Previous Fiscal Year
(June 30, 2022)(Unit: thousand yen)
Third Quarter of the Fiscal Yearending June 30, 2023
(March 31, 2023)

AssetsCurrent assets
Cash and deposits
Notes, accounts receivable – trade, and contract
assetsMarketable securities

9,444,021

8,172,405

3,024,049

3,577,808

590,019500,000

Work in progress
Raw materials and supplies

18,10082,827

19,836
122,317

Prepaid expenses
Other

539,637
46,346

663,785
278,596

Allowance for doubtful accounts(3,685)(4,157)

13,741,316

13,330,593

398,117473,047

SoftwareOther

676,429521

955,455
225

Total intangible assets

676,951955,681

Investment securities
Long-term prepaid expenses

511,133
29,713696,898
68,421

Leasehold and guarantee deposits
Deferred tax assets

560,883
568,997575,243
465,448

Other

129,933

134,393

1,800,661

1,940,405

2,875,730

3,369,134

16,617,046

16,699,727

Total current assets
Non-current assets
Property, plant and equipment
Intangible assets

Investments and other assets

Total investments and other assets
Total non-current assets
Total assets

(Unit: thousand yen)
Third Quarter of the Fiscal Yearending June 30, 2023
(March 31, 2022)

Previous Fiscal Year
(June 30, 2022)
Liabilities
Current liabilities
Notes and accounts payable - trade
Lease obligations

662,316
12,428644,068
12,042

Accounts payable – other, and accrued expenses
Income taxes payable

392,568
586,626

551,714-

Contract obligations
Asset retirement obligations

2,355,344
15,606

1,956,842-

Provision for bonuses
Provision for bonuses to directors and other officers

1,050,315
170,813650,604
116,610

17,743556,718

39,356
417,748

5,820,483

4,388,986

18,324
180,576

9,289
210,801

Allowance for loss on orders received
Other
Total current liabilities
Non-current liabilities
Lease obligations
Asset retirement obligations
Deferred tax liabilities-

26,143

198,900

246,235

6,019,383

4,635,222

Share capital
Capital surplus

329,128
265,928

345,113
281,913Retained earnings
Treasury shares

9,872,031(608)

11,256,495(608)

Total shareholders' equity

10,466,479

11,882,913

103,126

154,287

236
27,820210
27,092

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

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustments
Total accumulated other comprehensive income
Total net assets
Total liabilities and net assets

131,183

181,591

10,597,663

12,064,505

16,617,046

16,699,727

(2) Quarterly Consolidated Statements of Income and Statements of Comprehensive Income
Quarterly Consolidated Statements of Income
Nine months ended March 31

Net sales
Cost of sales

Nine Months Ended
March 31, 2022
(From July 1, 2021
to March 31, 2022)
13,786,664
7,095,963(Unit: thousand yen)
Nine Months Ended
March 31, 2023
(From July 1, 2022
to March 31, 2023)
16,187,646
8,855,221

Gross profit

6,690,700

7,332,424

Selling, general and administrative expenses

4,067,792

4,411,618

Operating profit

2,622,908

2,920,805

196

96

Dividend income
Gain on investments in investment partnerships

3,268
7,478

4,048
-

Subsidy income
Miscellaneous income

2,127
563

531
3,736

148

88

13,782

8,500

581

386

64,529

-

4,270

2,581
4,233

Foreign exchange loss
Share issuance expenses

779
281

28
228

Compensation for damages
Other

647

10,831
289

Total non-operating expenses

71,08918,581

Ordinary profit

2,565,601

2,910,725

Profit before income taxes

2,565,601

2,910,725

Income taxes – current
Income taxes – deferred

1,105,964(112,465)

934,910
104,490

993,499

1,039,401

1,572,101

1,871,324

Non-operating income
Interest income

Other
Total non-operating income
Non-operating expenses
Interest expense
Share of loss of entities accounted for using equity
methodLoss on investments in investment partnerships
Commission expenses

Total income taxes
ProfitProfit attributable to noncontrolling interests
Profit attributable to owners of the parent--

1,572,101

1,871,324

Quarterly Consolidated Statements of Comprehensive Income
Six months ended March 31
Nine Months Ended
March 31, 2022
(From July 1, 2021
to March 31, 2022)
1,572,101(Unit: thousand yen)
Nine Months Ended
March 31, 2023
(From July 1, 2022
to March 31, 2023)
1,871,324

Valuation difference on available-for-sale securities
Deferred gains or losses on hedges

23,361
94

51,160(25)

Foreign currency translation adjustments
Share of other comprehensive income of affiliates
accounted for by the equity method
Total other comprehensive income

13,363(2,501)

708

1,773

ProfitOther comprehensive income

37,52850,407

Comprehensive income

1,609,630

1,921,731

Comprehensive income attributable toComprehensive income attributable to owners of theparentComprehensive income attributable to noncontrollinginterests

1,609,630

1,921,731--

(3) Quarterly Consolidated Statements of Cash Flows(Unit: thousand yen)
Nine Months Ended
March 31, 2023
(From July 1, 2022
to March 31, 2023)

Nine Months Ended
March 31, 2022
(From July 1, 2021
to March 31, 2022)
Cash flows from operating activities
Profit before income taxes

2,565,601

2,910,725

Depreciation

258,436

317,753

Share-based payment expenses

12,182

14,982

Increase (decrease) in allowance for doubtful accounts

658

471

Increase (decrease) in provision for bonuses
Increase (decrease) in provision for bonuses for
directors (and other officers)
Increase (decrease) in provision for loss on orders
received
Interest and dividend income(23,220)(399,711)(42,292)(47,580)

22,725

21,612(3,464)(4,145)

581

386

4,270

4,233

281

228

64,529-(7,478)2,581(2,127)(531)(242,458)(553,789)

12,194(41,225)

168,735(18,248)

329,660(53,305)

Interest expenses
Commission expenses
Share issuance expenses
Share of loss (profit) of entities accounted for using
equity method
Loss (gain) on investments in investment partnerships
Subsidy income
Decrease (increase) in notes and accounts receivabletrade and contract assets(Increase) decrease in inventories
Increase (decrease) in notes and accounts payable trade
Increase (decrease) in accounts payable and accrued
expenses
Increase (decrease) in accrued consumption taxes

69,978(66,038)

Increase (decrease) in contract obligations(736,877)(398,502)

Increase (decrease) in deposits received(66,720)(78,710)

Other, net

1,274(154,905)

Subtotal

2,386,471

1,456,283

Interest and dividends received

3,576

4,336

Interest payments

(581)

(386)

Amount of subsidies received

2,127

531

Income taxes paid

(1,007,487)(1,554,377)

Net cash provided by (used in) operating activities

1,384,107(93,613)

(Unit: thousand yen)
Nine Months Ended
March 31, 2023
(From July 1, 2022
to March 31, 2023)

Nine Months Ended
March 31, 2022
(From July 1, 2021
to March 31, 2022)
Cash flows from investing activities
Proceeds from redemption of marketable securities-

90,019Purchase of property, plant and equipment
Payments for asset retirement obligations(84,721)(13,810)(184,462)(12,269)

Purchase of intangible assets
Purchase of investment securities(236,949)(11,413)(466,570)(126,846)

Payment of leasehold and guarantee deposits(181,170)(120,775)

Proceeds from refund of leasehold and guarantee deposits

216,875

139,792

Purchase of insurance funds(4,459)(4,459)Other, net

1,776

11,532(313,873)(674,041)

Repayment of finance lease obligations
Disbursement of commissions paid

(10,635)(3,922)(9,419)(4,131)Dividends paid

(413,602)(489,092)

(281)

(228)

Net cash provided by (used in) financing activities(428,441)(502,872)

Effect of exchange rate change on cash and cash equivalents

10,834(1,457)

Net increase (decrease) in cash and cash equivalents

652,627(1,271,985)

Cash and cash equivalents at beginning of period

7,786,223

10,002,870

Cash and cash equivalents at end of period

8,438,850

8,730,885

Net cash provided by (used in) investing activities
Cash flows from financing activities

Other, net

(4) Notes to Quarterly Consolidated Financial Statements(Notes on the Going Concern Assumption)
Not applicable.
(Notes on Substantial Changes in the Amount of Shareholders' Equity)
Not applicable.
(Changes in Accounting Policies)<Application of the "Guidance on Accounting Standard for Measurement of Fair Value">
The Company adopted the "Guidance on Accounting Standard for Measurement of Fair Value (ASBJ Guidance No.
31, June 17, 2021). Hereafter referred to as the "Guidance on Accounting Standard for Fair Value Calculation")" fromthe beginning of the first quarter of the current fiscal year and will apply the new accounting policy in accordancewith the transitional treatment stipulated in Paragraph 27-2 of the Guidance on Accounting Standard for Measurementof Fair Value. There is no impact on the quarterly consolidated financial statements.
(Additional Information)<Application of the "Treatment of Accounting and Disclosure for Application of the Group Totalization System">
Effective from the first quarter of the current fiscal year, the Company and some of its domestic consolidated
subsidiaries have shifted from a consolidated tax payment system to a group totalization system. In accordance withthis change, the accounting treatment and disclosure of income taxes, local income taxes, and tax effect accounting
are in accordance with "Treatment of Accounting and Disclosure for Application of the Group Totalization System(PITF No. 42, August 12, 2021; hereinafter referred to as "PITF No. 42"). In addition, in accordance with Paragraph
32 (1) of the PITF No. 42, the Company has deemed that there is no impact from the change in accounting policy
upon the application of PITF No. 42.
<Accounting estimates related to the spread of new coronavirus infections>
There has been no significant change in the assumptions regarding the impact of the new coronavirus infection
described in (Additional Information) (Accounting Estimates Regarding the Spread of the New Coronavirus
Infection) in the Annual Securities Report for the previous fiscal year.

(Segment Information)
Nine months ended March 31, 2022 (From July 1, 2021 to March 31, 2022)
1. Information on net sales and profits or losses by reported segment(Thousands of yen)Group GovernanceBusiness
Net sales
Sales to customers
Intersegment sales
Total
Segment profit

Reportable segments
DigitalTransformation
Business

6,781,129
25,057
6,806,187
1,554,657

5,247,275
26,207
5,273,482
981,217

Outsourcing
Business
1,758,259
494,579
2,252,839
578,278

Total

13,786,664
545,844
14,332,509
3,114,153

2. Difference between the total amount of income (loss) of reportable segments and the amount recorded in thequarterly consolidated statements of income, and major details of said difference (matters related to difference
reconciliation)(Thousands of yen)
ProfitAmountReportable segments total
Elimination of transactions between the Company and segments
Corporate expenses (Note)
OthersOperating profit in the quarterly consolidated statements of income

3,114,153
563,814(1,055,599)
540
2,622,908(Note) Corporate expenses are mainly general and administrative expenses not attributable to reportable segments.

Nine months ended March 31, 2023 (From July 1, 2022 to March 31, 2023)
1. Information on net sales and profits or losses by reported segment(Thousands of yen)Group GovernanceBusiness
Net sales
Sales to customers
Intersegment sales
Total
Segment profit

Reportable segments
DigitalTransformation
Business

7,785,553
39,111
7,824,664
1,517,624

6,171,090
3,130
6,174,221
1,241,035

Outsourcing
Business
2,231,002
542,349
2,773,351
629,058

Total

16,187,646
584,590
16,772,236
3,387,718

2. Difference between the total amount of income (loss) of reportable segments and the amount recorded in thequarterly consolidated statements of income, and major details of said difference (matters related to difference
reconciliation)(Thousands of yen)
ProfitAmountReportable segments total
Elimination of transactions between the Company and its segments
Corporate expenses (Note)
OthersOperating profit in the quarterly consolidated statements of income(Note) Corporate expenses are mainly general and administrative expenses not attributable to reportable segments.

3,387,718
625,710(1,099,072)
6,448
2,920,805

(Revenue Recognition)
Breakdown of net sales from contracts with customers
Nine months ended March 31, 2022 (From July 1, 2021 to March 31, 2022)(Thousands of yen)Group GovernanceBusiness
Goods or services transferred at a point
in timeGoods or services that are transferredover a period of time
Net sales to external customers

Reportable segments
DigitalTransformation
Business

Outsourcing
Business

Total

401,820

61,449131,376594,646

6,379,308

5,185,825

1,626,883

13,192,018

6,781,129

5,247,275

1,758,259

13,786,664

Nine months ended March 31, 2023 (From July 1, 2022 to March 31, 2023)(Thousands of yen)Group GovernanceBusiness
Goods or services transferred at a point
in timeGoods or services that are transferredover a period of time
Net sales to external customers

Reportable segments
DigitalTransformation
Business

Outsourcing
Business

Total

183,513286,764

115,960

586,238

7,602,039

5,884,326

2,115,041

15,601,407

7,785,553

6,171,090

2,231,002

16,187,646