This is an unofficial translation. In the event of any discrepancy between the original Japanese text and this English translation, the Japanese text shall prevail.

Consolidated Summary Report under Japanese GAAP
for the second quarter of the fiscal year ending June 30, 2024
Company Name:
Code Number:
Representative:
For inquiry:

January 31, 2024
Listing: Tokyo Stock Exchange
URL: https://www.avantgroup.com/

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

Securities report issue date: February 13, 2024
Supplementary information for financial statements: Yes
Explanatory meeting to be held: Yes

TEL: (03) 6388-6739

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

1. Consolidated results for the second quarter of the fiscal year ending June 30, 2024
(Percentages indicate year-on-year changes)(1) Consolidated operating results
Net sales
Second quarter of the
fiscal year
ending June 30, 2024
ending June 30, 2023
Comprehensive income (loss)

EBITDA*

Operating profit%
11,742
10,523

%

11.6
20.2

2,126
1,989

for the 2Q of the fiscal year ending June 30,
2024

Net profit per
share
Second quarter of the
fiscal year
ending June 30, 2024
ending June 30, 2023

%

6.9
23.1

1,890
1,793

Profit attributable toowners of parent

Ordinary profit
%

5.4
21.0

1,893
1,779

6.4
23.8

for the 2Q of the fiscal year ended June 30,

1,272 million yen (11.1%)

%

2023

1,216
1,142

6.5
32.0

1,145 million yen (27.3%)

Diluted net
profit per share

yen

yen

32.51
30.35

-

(Note) EBITDA is derived by adding depreciation and amortization of goodwill to operating profit.

(2) Consolidated financial position
Total assets
As ofDecember 31, 2023
June 30, 2023

Net assets

Equity ratio%

18,557
18,705

12,587
12,328

As of December 31, 2023

(Reference) Net assets attributable to the company’s shareholders

67.8
65.9

12,587 million yen

As of June 30, 2023

12,328 million yen

2. Dividends on common shares
Dividends per share
1st
2nd
3rd
Fiscalquarter-end quarter-end quarter-end year-end
Fiscal year ended June 30, 2023
Fiscal year ending June 30, 2024
Fiscal year ending June 30, 2024 (Forecast)

Annual

yen

yen

yen

yen

yen

-

0.00
0.00

-

15.00

15.00

-

19.00

19.00

(Note) Revisions to the most recently announced dividend forecast: None

3. Consolidated earnings forecasts for the fiscal year ending June 30, 2024
(Percentages indicate year-on-year changes)

Net sales
Fiscal year
ending June 30, 2024

Operating profit

Profit attributable toowners of parent

Ordinary profit

Net profit
per share

million yen%

million yen%

million yen%

million yen%

yen

24,000

12.0

3,850

17.0

3,850

17.9

2,500

19.4

66.89

(Notes) Revisions to the most recently announced earnings forecast: None
Since the Company manages its operations on an annual basis, the consolidated earnings forecasts for the second quarter (cumulative) are not provided.

Notes(1) Changes in significant subsidiaries during the period (changes in “Specified Subsidiaries” (Tokutei Kogaisha) resulting in change inscope of consolidation): No
Newly added to the scope of consolidation: nil Newly excluded 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: 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 shares issued including
treasury shares(ii) Number of treasury shares held(iii) Average number of shares

As of December 30, 2023
As of December 30, 2023
Second quarter of the fiscal year
ending June 30, 2024

37,645,851 shares

As of June 30, 2023

326,398 shares

As of June 30, 2023

37,434,306 shares

Second quarter of the fiscal year ended
June 30, 2023

37,645,851 shares
2,998 shares
37,629,691 shares(Note) The Company introduced the "Employee Stock Grant Trust" in the first quarter of the 28th consolidated fiscal year and the "Stock Grant Trust for Executive Officers"
in the second quarter of the 28th consolidated fiscal year. Company shares held by the trust are included in the number of treasury stock at the end of the period andthe average number of treasury stock during the period.

* 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 do not represent any guarantee 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 regarding 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 Comments on Business Operations .............................................................................. 2(2) Comments 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 Going Concern Assumption) .............................................................................. 15(Notes on Substantial Changes in the Amount of Shareholders' Equity) .................................. 15(Additional Information) ........................................................................................................... 15(Segment Information) ............................................................................................. 17(Revenue Recognition) ........................................................................................................... 17(Significant Subsequent Events) ........................................................................................................... 17- 1 -1. Qualitative Information on Financial Results for the Current Quarter(1) Management Comments on Business Operations
Consolidated financial results for the second quarter of the current fiscal year are as follows.
Fiscal Year ended June30, 2023
Second quarter(Millions of yen, rounded down to the nearest unit)
Fiscal Year ending June
Year-on-Year Change
30, 2024
Second quarter
Amount%Net sales

10,523

11,742

1,219

11.6

Operating profit

1,793

1,890

97

5.4

Ordinary profit

1,779

1,893

113

6.4

Profit attributable to owners ofparent

1,142

1,216

74

6.5

Consolidated net sales were 11,742 million yen (up 11.6% year-on-year) due to strong growth in the Digital
Transformation Promotion business in particular, against a backdrop of investment needed to maintain and enhancecompetitiveness through improvements to corporate management and business activities using data and digitaltechnology. This is turning into a medium- to long-term trend among Japanese companies (our customers). In addition,
the Outsourcing business also maintained high growth.
From the first quarter of this fiscal year, the Company revised the categorizations for its business segments andchanged the previous reportable segments of “Group Governance Business,” “Digital Transformation Business,” and“Outsourcing Business” to the “Consolidated Financial Disclosure Business,” the “Digital Transformation Promotion
Business,” and the “Corporate Management Solutions Business.” In light of this change, results for each reportablesegment for the first quarter of the previous fiscal year were restated in line with the new reportable segments.
The Consolidated Financial Disclosure Business supports value creation through development and maintenance ofour proprietary software “DivaSystem” for consolidated management support and consolidated accounting, as wellas the provision of outsourcing of consolidated and non-consolidated financial statements using this software. With
regards the segment’s position within the Group, we aim to establish a business model that combines both softwareand outsourcing businesses.
The Consolidated Financial Disclosure Business also includes information search services for disclosure documents
provided by Internet Disclosure, Inc, primarily to audit firms.
The Digital Transformation Promotion Business supports the promotion of digital transformation at companies anddata-driven management through consulting and system development services, including the provision of a data
platform for utilizing all kinds of data related to companies, to AI and BI solutions that can analyze, predict andenable data visualization. From major cloud vendors to multi-cloud compatible software, customers can find out
about the latest data utilization methods and generative AI specializing in data utilization, as well as train engineersand develop their own data utilization platform products. The suite of products offered is also slated for expansion.
The Management Solutions Business has a focus on group management, consolidated accounting, and businessadministration and aims to identify and maximize hidden value at companies, and offers one-stop support services
from consulting to system planning, building, installation, and maintenance. In addition to in-house development, it
is also possible to develop in combination with software from other companies. The role of this business is tomaximize the Group’s assets and continue to generate solutions that will provide management data that is useful forthe enhancement of corporate value.
Profits were boosted by a decrease in one-time expenses incurred in the previous fiscal year as a result of group
reorganization and sales growth in the Digital Transformation Promotion business, set against increased fixed
personnel expenses due to higher headcount, outsourced processing expenses as a result of the increase in orders, andinvestment-related expenses to realize future growth, Operating profit was 1,890 million yen (up 5.4% year-on-year),ordinary profit was 1,893 million yen (up 6.4% year-on-year), and net income attributable to owners of the parent
was 1,216 million yen (up 6.5% year-on-year).
- 2 -The status of each reportable segment is as follows.
(i) Net sales(Millions of yen, rounded down to the nearest unit)
Fiscal Year ending June
Change (YoY)
30, 2024
Second quarter
Amount%Fiscal Year ended June30, 2023
Second quarter
Consolidated Financial Disclosure
Business
Digital Transformation Promotion
Business
Management Solutions BusinessElimination of inter-segment
transactions
Consolidated Net sales

3,414

3,606

191

5.6

3,387

4,365

977

28.8

4,011

4,018

6

0.2

(291)

(247)

44

-

10,523

11,742

1,219

11.6

Fiscal Year ended June30, 2023
Second quarter

Fiscal Year ending June30, 2024
Second quarter

784

858

72

9.3

557

758

201

36.2

785

576

(208)

-26.6

(333)

(302)

31

-

1,793

1,890

97

5.4

(ii) Operating profit(Millions of yen, rounded down to the nearest unit)

Consolidated Financial Disclosure
Business
Digital Transformation Promotion
Business
Management Solutions BusinessCorporate Expenses andElimination of inter-segment
transactions
Consolidated operating profit

Change (YoY)
Amount%In the Consolidated Financial Disclosure Business, an improved pricing model for the Consolidated Accounts
Software business is currently being rolled out under the new structure, but the outsourcing business continues tomaintain high growth and contribute to revenue growth. As a result, sales rose 5.6% year-on-year to 3,606 million
yen and net sales increased to 3,606 million yen (up 5.6% year-on-year). In terms of profitability, the Outsourcing
business drove growth, resulting in operating profit of 857 million yen (up 9.3% year-on-year).
In the Digital Transformation Promotion Business, the need to utilize data for decision-making related to
management and business promotion continues to accelerate, and the number of projects related to cloud data
platform construction is on the rise, with an increase in large-scale projects and in the scale of ongoing projects. The
increase in the number of large projects and the scale of ongoing projects was a significant driver of revenue growth.
As a result, net sales increased to 4,365 million yen (up 28.8% year-on-year). Although personnel costs for humanresources to provide services and increased along with ongoing rises in requisite subcontracting expenses, this wasoffset by the increased revenue, and operating profit was 758 million yen (up 36.2% year-on-year), significantly
higher than the same period of the previous year.
In the Management Solutions Business, net sales were 4,018 million yen (up 0.2% year-on-year). Although the CPM
solutions business increased revenues, the qualitative shift in business areas following the reorganization has not yet
been fully realized, and sales growth stagnated, resulting in the segment as a whole remaining virtually unchanged
compared to the previous year. Operating profit decreased to 576 million yen (down 26.6% year-on-year) due to thelow sales growth as a result of these factors, as well as an increase in personnel expenses to secure personnel to drive
future growth and an increase in amortization expenses associated with software investments.

- 3 -The number of employees on a consolidated basis was 1,415 at the end of the second quarter, up 26 from the end of
the previous fiscal year.
Number of Employees of the Group (quarterly)

The status of orders received and sales by segment for the second quarter of the fiscal year under review is as follows.
(i) Orders Received(Millions of yen, rounded down to the nearest unit)
Fiscal Year ending
Change (YoY)
June 30, 2024
Second quarter
AmountOrdersOutstanding
OrdersOutstanding
Received
Orders
Received
OrdersFiscal Year ended
June 30, 2023
Second quarter
OrdersOutstanding
Received
OrdersConsolidated Financial
Disclosure Business
Digital Transformation
Promotion Business
Management Solutions BusinessElimination of inter-segment
transactions
Total

3,604

3,606

3,561

3,904

(43)

297

3,488

1,159

4,105

1,445

616

285

3,425

2,411

3,618

2,713

192

302

(468)

(1,579)(161)(1,661)307(81)

10,0505,598

11,123

6,402

1,072

804

(ii) Net Sales(Millions of yen, rounded down to the nearest unit)
Fiscal Year ending
Change (YoY)
June 30, 2024
Second quarter
Amount%Fiscal Year ended
June 30, 2023
Second quarter
Consolidated Financial
Disclosure Business
Digital Transformation
Promotion Business
Management Solutions BusinessElimination of inter-segment
transactions
Total

3,414

3,606

191

5.6

3,387

4,365

977

28.8

4,011

4,018

6

0.2

(291)

(247)

44

-

10,523

11,742

1,219

11.6

Quarterly trends in net sales and operating profit are as follows.
Net sales and operating profit for the last four quarters- 4 -(Millions of yen, rounded down to the nearest unit)
Fiscal Year ending
June 30, 2024
First quarter
Second quarter

Fiscal Year ended
June 30, 2023
Third quarter
Fourth quarter
Net sales

5,664

5,236

5,646

6,096

Operating profit

1,127

368

681

1,209

Operating profit margin (%)

19.9

7.0

12.1

19.8

Net sales, operating profit and operating profit margin (quarterly)- 5 -(2) Comments on Financial Position(i) Financial position
Total assets at the end of the second quarter were 18,557 million yen (down 148 million yen from the end of theprevious fiscal year). This was mainly due to a 762 million yen increase in notes and accounts receivable-trade andcontract assets, and a 252 million yen increase in prepaid expenses, while cash and deposits decreased by 917 millionyen.
On the other hand, total liabilities amounted to 5,969 million yen (down 407 million yen from the end of the previous
fiscal year). This was mainly due to a 205 million yen increase in income taxes payable, offset by a 359 million yen
decrease in contract liabilities, and a 253 million yen decrease in provision for bonuses.
Total net assets were 12,587 million yen (up 258 million yen from the end of the previous fiscal year), reflecting net
income attributable to parent company shareholders of 1,216 million yen for the quarter, purchase of treasury stockof 449 million yen and payment of dividends from surplus of 564 million yen. As a result, the equity ratio was 67.8%(65.9% at the end of the previous fiscal year), an improvement of 1.9 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 "cash") at the end of the period under review decreased 917
million yen from the end of the previous fiscal year to 9,964 million yen. The status of various cash flows and relevant
factors are as follows.
< Cash flows from operating activities >Net cash provided by operating activities was 349 million yen.
(717 million yen used in the same period of the previous year)
The main positive factors were profit before income taxes and minority interests of 1,893 million yen and refund ofincome taxes of 539 million yen, while the main negative factors were increases in accounts receivable and contract
assets of 762 million yen, a decrease in contract liabilities of 359 million yen, a decrease in allowance for bonuses of
253 million yen and income taxes paid of 671 million yen.
< Cash flows from investing activities >Funds used in investing activities totaled 239 million yen.
(622 million yen used in the same period of the previous year)
Major expenditures included 111 million yen for the purchase of property, plant and equipment, 42 million yen forthe purchase of intangible fixed assets and 57 million yen for the purchase of investment securities.
< Cash flows from financing activities >Net cash used in financing activities was 1,025 million yen.
(499 million yen used in the same period of the previous year)
The main component of cash outflow was 564 million yen in cash dividends paid and 449 million yen for purchaseof treasury stock.

- 6 -In the Group, cash flow from operating activities in the first quarter is at a low level due to the payment of income
taxes and the payment of performance-based bonuses to officers and employees, gradually increasing from the second
quarter onward, and is typically positive for the full fiscal year.
Maintenance fees in the Management Solutions Business and commissions paid in the Consolidated Financial
Disclosures Business are prepaid a year in advance of the provision of services, so as a result, the original businessmodel has almost no need for working capital. On the other hand, in the Digital Transformation Promotion Business,
as outsourcing costs and other expenses are paid in advance, working capital demand will increase as sales grow.
However, by concentrating the excess funds of the Group as a whole in the holding company, the Group is able tosmoothly extend funds across the Group. In addition to the total cash held, the Group has established a commitmentline 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.
Operating cash flow (Quarterly, Millions of yen)

Operating cash flow (quarter)
Operating cash flow (accumulated)- 7 -(3) Earnings Forecasts
In August 2023, the Company announced a five-year plan (including targets to be achieved in five years), which
ends in the fiscal year ending June 2028, as its new Medium-Term Management Plan, with the fiscal year ending
June 2024 as the first year of the plan. Ahead of the start of the new Medium-Term Management Plan, we havedefined the materiality of the Avant Group as “to become a software company that helps enhance corporate value.”
As a concrete measure to clarify what we aim to become during the period of the new Medium-Term Management
Plan and realize this materiality, we reorganized the group on October 1, 2022 and have been developing businessactivities as the new Avant Group since that time. Through such initiatives, we have clarified the direction of each
operating company. At the same time, by positioning each operating company in growth markets, we have created astructure that will enable us to achieve sustainable sales growth. However, we do not believe that we will reap thefull benefits of the Group's reorganization in the early stages of the new Medium-Term Management Plan. Rather,
we expect the effects will gradually emerge over the five-year period. In addition, while the restructuring associatedwith the Group’s reorganization has been completed, it is our policy to continuously and flexibly make growthinvestment that is required for realization of this materiality.
Unstable factors such as inflation caused by soaring raw material prices and concerns over economic slowdown due
to financial tightening pose a risk of affecting the Group’s performance, which, on the contrary, is considered to leadto more companies seeking to strengthen data-driven management and group governance, and therefore we believethat demand for the Group’s business will continue to increase over the medium to long term.
As a result, the Company expects to achieve net sales of 24,000 million yen and operating profit of 3,850 million
yen in the current fiscal year.
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). There will be
no change to the policy itself, and we forecast a dividend of 19 yen per share for the current fiscal year, in the hopeof achieving the target of a ratio of dividends to net assets of 8% that we have set to achieve within the period of the
new Medium-Term Management Plan.
Dividends (adjusted for stock splits)(yen/share)- 8 -2. Quarterly Consolidated Financial Statements and Notes(1) Quarterly Consolidated Balance Sheets(Thousands of yen)
As of June 30, 2023

As of December 31, 2023

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade, and contract
assetsSecurities
Work in process

10,317,243

9,399,642

2,963,130

3,725,854

500,000
13,620500,000
24,512

Raw materials and supplies
Prepaid expenses

112,676
824,824

89,893
1,077,480

Other
Allowance for doubtful accounts

623,801(3,622)

379,162(3,888)15,351,673

15,192,657

487,466

490,059

728,306

694,973

225

45,115

Total intangible assets

728,532

740,089

Investments and other assets
Investment securities

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

772,046915,262

Long-term prepaid expenses
Leasehold and guarantee deposits

66,028575,243

82,552602,353

Deferred tax assets
Other

590,209134,393399,757
134,393

2,137,920

2,134,318

3,353,919

3,364,468

18,705,593

18,557,125

Total investments and other assets
Total non-current assets
Total assets- 9 -(Thousands of yen)
As of June 30, 2023

As of December 31, 2023

Liabilities
Current liabilities
Notes and accounts payable - trade
Lease liabilities

634,758
12,257

719,809
10,641

Accounts payable - other, and accrued expenses
Income taxes payable

512,708
354,192

577,747
560,039

Contract liabilities
Provision for bonuses
Provision for bonuses for directors (and otherofficers)
Provision for loss on orders received

2,796,086
1,038,329

2,436,262
785,168

172,380

79,50061,594

174

539,81230,650534,127

6,122,119

5,734,120

Provision for share awards
Other
Total current liabilities
Non-current liabilities
Lease liabilities
Asset retirement obligations
Deferred tax liabilities
Total non-current liabilities
Total liabilities

6,039

1,147

210,900
38,016

234,517-254,956

235,664

6,377,076

5,969,784

Net assets
Shareholders' equity
Share capital

345,113345,113

Capital surplus
Retained earnings

281,913
11,477,458

281,913
12,129,640

Treasury shares(608)(449,780)

12,103,876

12,306,886

Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Deferred gains or losses on hedges

183,925

243,267302

277

Foreign currency translation adjustment

40,411

36,909Total shareholders' equity

Total accumulated other comprehensive income
Total net assets
Total liabilities and net assets- 10 -

224,639

280,453

12,328,516

12,587,340

18,705,593

18,557,125

(2) Quarterly Consolidated Statements of Income and Statements of Comprehensive Income
Quarterly Consolidated Statements of Income
Second Quarter of the Current Fiscal YearNet sales
Cost of sales

Second Quarter of the Previous
Fiscal Year
(From July 1, 2022
to December 31, 2022)
10,523,013
5,680,573(Thousands of yen)
Second Quarter of the Previous
Fiscal Year
(From July 1, 2023
to December 31, 2023)
11,742,720
6,569,620

Gross profit

4,842,439

5,173,100

Selling, general and administrative expenses

3,049,115

3,282,659

Operating profit

1,793,323

1,890,441

57

45

3,200

5,258
8,789

Non-operating income
Interest income
Dividend income
Gain on investments in investment partnerships
Subsidy income
Other

－
531
1,577

Total non-operating income

5,366

15,719273

154

Loss on investments in investment partnerships
Commission expenses

2,707
2,843

6,663
3,458

Foreign exchange losses
Stock issuance expenses

1,574
228

2,240

Compensation for damage
Other

10,831289－－

Non-operating expenses
Interest expenses

Total non-operating expenses

202
1,423

－

18,784

12,516

Ordinary profit

1,779,941

1,893,644

Profit before income taxes

1,779,941

1,893,644

Income taxes - current
Income taxes - deferred

431,800
206,024

550,130
126,689

Total income taxes

637,824

676,819

1,142,116

1,216,824--

1,142,116

1,216,824

ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent- 11 -

Quarterly Consolidated Statements of Comprehensive Income
Second Quarter of the Current Fiscal Year
Second Quarter of the Previous
Fiscal Year
(From July 1, 2022
to December 31, 2022)
1,142,116(Thousands of yen)
Second Quarter of the Previous
Fiscal Year
(From July 1, 2023
to December 31, 2023)
1,216,824

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

5,655
(31)

59,341(25)

Foreign currency translation adjustment
Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income(3,944)(3,502)

1,773-

ProfitOther comprehensive income

3,452

55,813Comprehensive income

1,145,568

1,272,638

Comprehensive income attributable toComprehensive income attributable to owners ofparentComprehensive income attributable to non-controllinginterests

1,145,568

1,272,638--- 12 -

(3) Quarterly Consolidated Statements of Cash Flows(Thousands of yen)

Second Quarter of the Previous
Fiscal Year
(From July 1, 2022
to December 31, 2022)

Second Quarter of the Previous
Fiscal Year
(From July 1, 2023
to December 31, 2023)

1,779,941

1,893,644

203,130

242,303

9,637

9,175

Cash flows from operating activities
Profit before income taxes
Depreciation
Share-based payment expenses
Increase (decrease) in allowance for doubtful accounts
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
Increase (decrease) in provision for share awards
Interest and dividend income
Interest expenses

464

266

△434,899△253,160△88,868△92,880△9,248△61,419－

30,650△3,257△5,303

273

154

2,843

3,458

Stock issuance expenses

228－

Loss (gain) on investments in investment partnerships

2,707(2,126)

Subsidy income
Decrease (increase) in notes and accounts receivable-tradeand contract assets
Decrease (increase) in inventories

(531)

(202)

(534,395)(762,752)(9,105)

11,891

Commission expenses

Increase (decrease) in trade payables
Increase (decrease) in accounts payable - other, andaccrued expenses
Increase (decrease) in accrued consumption taxes(43,159)

85,051(142,351)(15,384)(136,592)(33,456)

Increase (decrease) in contract liabilities(262,266)(359,824)

Increase (decrease) in deposits received

25,77030,788Other, net(291,544)(245,088)

Subtotal

158,77475,784

Interest and dividends received

3,448

5,303

Interest paid

(273)

(154)

Subsidies received

531

202

Income taxes paid

(880,110)(671,250)－

539,970(717,626)

349,855

Income taxes refunded
Net cash provided by (used in) operating activities
Cash flows from investing activities
Proceeds from redemption of securities

90,019－Purchase of property, plant and equipment(113,390)(111,907)

Payments for asset retirement obligations

(269)

－

Purchase of intangible assets(375,342)(42,861)

Purchase of investment securities(114,152)(57,086)

Payments of leasehold and guarantee deposits(120,775)(27,109)

151－

Proceeds from refund of leasehold and guarantee
deposits
Other, net
Net cash provided by (used in) investing activities- 13 -

11,657(824)(622,102)(239,788)

(Thousands of yen)

Second Quarter of the Previous
Fiscal Year
(From July 1, 2022
to December 31, 2022)

Second Quarter of the Previous
Fiscal Year
(From July 1, 2023
to December 31, 2023)

Repayments of finance lease liabilities(6,398)(6,507)

Commission fee paid

(4,131)(5,126)－(449,172)(489,092)(564,642)

Cash flows from financing activities

Purchase of treasury shares
Dividends paid

(228)

－

Net cash provided by (used in) financing activities(499,851)(1,025,449)

Effect of exchange rate change on cash and cash equivalents(3,039)(1,793)

Net increase (decrease) in cash and cash equivalents(1,842,620)(917,176)

Cash and cash equivalents at beginning of period

10,002,870

10,881,311

Cash and cash equivalents at end of period

8,160,250

9,964,135- 14 -

(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.
(Additional Information)<Transaction for the Delivery of Company Shares to Employees through a Trust >The Company has introduced a benefit trust as a welfare benefit for employees and as an incentive for theenhancement of the Company’s corporate value.
1. Overview of transaction
Under this scheme, pursuant to the Stock Delivery Regulations established by the Company in advance,
employees who satisfy certain requirements are granted points, and shares of the Company are delivered tothose employees to whom points have been granted and who satisfy the requirements for beneficiaries set forthin the Stock Delivery Regulations according to the number of points those beneficiaries have been granted. The
shares to be granted, including those granted in future, will be acquired using money in a trust established inadvance by the Company, and the trust’s assets will be administered separately.
2. Company shares remaining in the trust
The Company shares remaining in the trust are recorded as treasury shares under net assets at their book value
in the trust (excluding associated costs). In this first quarter, there were 323,400 such treasury shares with abook value of 449,172 thousand yen.

- 15 -

(Segment Information)
Previous second quarter (From July 1, 2022 to December 31, 2022)
1. Information on net sales and profits or losses by reported segment(Thousands of yen)

Net sales
Net sales to external customers
Inter-segment net sales or transfers
Total
Segment profit

Consolidated
Financial
Disclosure Business

Reportable segments
DigitalTransformation
Promotion Business

3,147,881
266,515
3,414,397
784,684

3,386,324
1,620
3,387,944
557,114

Management
Solutions Business
3,988,807
23,1704,011,978785,082

Total

10,523,013
291,306
10,814,319
2,126,880

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

Amount2,126,880
392,372(731,668)
5,738
1,793,323(Note) Corporate expenses are mainly general and administrative expenses not attributable to the reportable segments.

Current second quarter (From July 1, 2023 to December 31, 2023)
1. Information on net sales and profits/losses by reported segment(Thousands of yen)

Net sales
Net sales to external customers
Inter-segment net sales or transfers
Total
Segment profit

Consolidated
Financial
Disclosure Business

Reportable segments
DigitalTransformation
Promotion Business

3,403,720
202,437
3,606,157
857,385

4,354,902
10,3444,365,246
758,864

Management
Solutions Business
3,984,098
34,473
4,018,572
576,299

Total

11,742,720
247,255
11,989,975
2,192,549

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

Amount2,192,549
450,733(749,461)(3,380)1,890,441(Note) Corporate expenses are mainly general and administrative expenses not attributable to the reportable segments.

3. Matters concerning changes to the reportable segments, etc.
From the first quarter of this fiscal year, the Company has revised the categorizations of its business segments andchanged from the previous reportable segments of “Group Governance Business,” “Digital Transformation Business,”and “Outsourcing Business” to “Consolidated Financial Disclosure Business,” “Digital Transformation Promotion
Business,” and “Management Solutions Business.” Segment information for the six months ended December 31,
2022 has been prepared according to the categorization method after the change.

- 16 -

(Revenue Recognition)
Breakdown of net sales from contracts with customers
As described in "Segment Information", the classification of reportable segments has been changed from the firstquarter of the current consolidated fiscal year, and the classification of reportable segments has been changed fromthe second quarter of the previous consolidated fiscal year.
Figures for the quarterly consolidated cumulative period are based on the classification after the change.
Previous second quarter (From July 1, 2022 to December 31, 2022)(Thousands of yen)Goods or services transferred at a point
in timeGoods or services that are transferredover a period of time
Net sales to external customers

Consolidated
Financial
Disclosure Business

Reportable segments
DigitalTransformation
Promotion Business

117,275

28,302

143,411

288,989

3,030,606

3,358,021

3,845,395

10,234,023

3,147,881

3,386,324

3,988,807

10,523,013

Management
Solutions Business

Total

Current second quarter (From July 1, 2023 to December 31, 2023)(Thousands of yen)
Consolidated
Financial
Disclosure Business
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
Promotion
Business

Management
Solutions Business

Total

74,08527,994

82,687

184,767

3,329,634

4,326,907

3,901,411

11,557,952

3,403,720

4,354,902

3,984,098

11,742,720(Significant Subsequent Events)
Not applicable.

- 17 -