Consolidated Financial Results for the First Three Quarters of the Fiscal Year Ending March 31, 2023
(April 1, 2022 through December 31, 2022)(Prepared pursuant to Japanese GAAP)All financial information has been prepared in accord with accounting principles generally accepted in Japan.
This is a partial English translation of the original Japanese-language document. All information pertains to consolidated
results unless otherwise noted. Information on the basis of presentation of consolidated financial statements does not appear inthis translation.
February 3, 2023
Company name:
Stock exchange listings:
Stock code:
URL:
Representative:
Contact:
Phone:TIS Inc.
Tokyo Stock Exchange, Prime Market
3626
https://www.tis.com/
Yasushi Okamoto, President
Masahiro Hiwasa, Department Manager of Finance & Accounting Dept., Corporate
Planning SBU.
+81 3-5337-4569

Scheduled dates
Submission of quarterly report:
Commencement of dividend payments:

February 13, 2023-

Supplementary materials to the quarterly results:
Quarterly results presentation held:

Available
Yes (targeted at institutional investors and analysts)
Figures in millions of yen are rounded down to the nearest million

1. Consolidated Results for the First Three Quarters of the Fiscal Year Ending March 31, 2023
(April 1, 2022 – December 31, 2022)(1) Consolidated Financial Results

Percentages indicate year-over-year changes
Net salesFirst Three Qtrs., FY2023
First Three Qtrs., FY2022

Operating income

Net income attributableto owners of the parent
company

Recurring profit

millions of yen%

millions of yen%

millions of yen%

millions of yen%

370,382
353,133

4.9
11.0

44,444
38,25816.2
27.2

45,47038,83017.1
41.0

32,15829,4149.3
62.3

Note: Comprehensive income: First Three Qtrs., FY2023: 29,879 million yen (-33.7%);

Net income
per share – basic
First Three Qtrs., FY2023
First Three Qtrs., FY2022

First Three Qtrs., FY2022: 45,093 million yen (84.6%)

Net income
per share – diluted

yen

yen

131.28117.46-(2) Consolidated Financial Position
Total assets
millions of yen

Net assets
millions of yen

Equity ratio%

434,074
291,233
64.7
End of Third Quarter, FY2023
476,642302,993
61.5
End of FY2022
For reference: Total equity: End of Third Quarter, FY2023: 280,863 million yen End of FY2022: 293,125 million yen*Total equity = Shareholders’ equity plus total accumulated other comprehensive income

2. Cash Dividends for Shareholders of Common Stock
Cash dividends per share
Record date or
periodEnd-Q1End-Q2yen

End-Q3yen

13.00
FY202215.00
FY2023
FY2023(forecast)
Note: Revisions from the latest release of dividends forecasts: None

Year-end

Total

yen

yen

-

31.00

44.00

yen

32.00

47.00

3. Forecast of Consolidated Results for FY2023 (April 1, 2022 – March 31, 2023)

Net sales

Full FY2023(year ending Mar. 31, 2023)

Operating income

Percentages indicate year-over-year changes
Net income
attributable to
Net income per
Recurring profit
owners of the parent
share – basic
company

millions of yen%

millions of yen%

millions of yen%

millions of yen%

yen

505,000

4.7

59,0007.8

60,5008.6

52,00031.8

213.50Note: Revisions from the latest release of earnings forecasts: Yes※ Notes(1) Material reclassifications of subsidiaries during the period: None
(Changes in specified subsidiaries resulting in change in scope of consolidation)
Additions: None
Exclusions: None
(2) Accounting methods specific to quarterly consolidated financial statements: None
(3) Changes in accounting policy, changes in accounting estimates, and retrospective restatement
1) Changes in accordance with amendments to accounting standards, etc.: Yes
2) Changes other than noted in 1) above: None
3) Changes in accounting estimates: None
4) Retrospective restatement: None
(4) Common stock issued
1) Issued shares as of period-end (including treasury stock):
End-Third Quarter, FY2023 (December 31, 2022):
251,160,894 shares
End-FY2022 (March 31, 2022):
251,160,894 shares
2) Treasury stock as of period-end:
End-Third Quarter, FY2023 (December 31, 2022):
9,235,147 shares
End-FY2022 (March 31, 2022):
1,394,103 shares
3) Average number of shares (during the respective nine-month period):First Three Qtrs., FY2023 (ended December 31, 2022):
244,952,271 sharesFirst Three Qtrs., FY2022 (ended December 31, 2021):
250,419,534 shares
Note: Treasury stock includes the number of the Company’s own shares held by TIS INTEC Group Employees’
Shareholding Association Trust and the Board Incentive Plan (BIP) Trust.

Quarterly review status
These materials are not subject to the quarterly review procedures to be conducted by certified public accountants or an audit
firm.
Caution on Forward-Looking Statements and Other Important Matters
At a Board of Directors’ Meeting held on May 11, 2022, TIS Inc. (TIS) resolved to acquire its own (treasury) shares inaccordance with Article 156 of the Companies Act of Japan, as applied pursuant to Paragraph 3, Article 165 of said Act.
Accordingly, “Net income per share – basic” in the Forecast of Consolidated Results for FY2023 has been presented taking
into account the effect of this acquisition of treasury shares.
This report contains forward-looking statements that reflect TIS’s plans and expectations based on information available to
TIS at the time of preparation and on certain other information TIS believes to be reasonable. These forward-looking
statements are not guarantees of future performance, and actual results, performance, achievements or financial position may
differ materially from those expressed or implied herein due to a range of factors.
For the assumptions underlying the forecasts herein and other notice on the use of earnings forecasts, refer to “(3) Consolidated
Earnings Forecast and Caution on Forward-Looking Statements” in the “1. Results of Operations” section on page 11 in the
Accompanying Materials.

Accompanying Materials – Contents

1. Results of Operations

2(1) Analysis of Consolidated Operating Results

2(2) Analysis of Financial Condition

10(3) Consolidated Earnings Forecast and Caution on Forward-Looking Statements

11

2. Consolidated Financial Statements

14(1) Consolidated Balance Sheets

14(2) Consolidated Statements of Income and Comprehensive Income

16

Consolidated Statements of Income
For the First Three Quarters

16

Consolidated Statements of Comprehensive Income
For the First Three Quarters

17(3) Notes on the Consolidated Financial Statements

18(Notes on the Going-concern Assumption)

18(Notes on Significant Changes in the Amount of Shareholders' Equity)18(Significant Subsequent Events)18

3. Other Information

20

-1-

1. Results of Operations(1) Analysis of Consolidated Operating Results
In the first nine months of fiscal 2023 (April 1, 2022 – December 31, 2022), while living with
COVID-19, there were signs of a pickup in the Japanese economy, due in part to the effects of various
policies. Looking ahead, it will be necessary to watch carefully for the risk of downward pressure on
Japan's economy due to the effects of a downturn in overseas economies, rising prices, supply-side
constraints, and fluctuations in financial and capital markets amid worldwide monetary tightening, andother factors.
The IT services industry, to which the TIS INTEC Group (“the Group”) belongs, is expected to see
further increases in IT investment demand as the transformation of business processes and businessmodels utilizing digital technologies progresses globally. This is demonstrated by factors such as the
Bank of Japan’s quarterly Short-term Economic Survey of Enterprises in Japan (December 2022),
which showed a 20.3% year-on-year increase in company software investment plans (all industries
including financial institutions).
In this environment, in accordance with its medium-term management plan (2021-2023) currently
being implemented for further growth in achieving “Group Vision 2026”, the Group is continuing towork to accelerate business restructuring with enhancing provided digital transformation value as the
keystone.
Consolidated net sales for the Group in the first nine months of fiscal 2023 rose 4.9% year-on-yearto ¥370,382 million. Operating income rose 16.2% to ¥44,444 million, recurring profit rose 17.1% to¥45,470 million, and net income attributable to owners of the parent company rose 9.3% to ¥32,158
million.
(Unit: millions of yen)First Nine Months,

First Nine Months,

FY2022(Apr. 1 – Dec. 31,

FY2023(Apr. 1 – Dec. 31,

2021)

2022)

Year-on-yearchanges

Net sales

353,133

370,382+4.9%

Cost of sales

261,184

268,650+2.9%

Gross profit

91,948

101,732+10.6%

Gross profit ratio

26.00%

27.50%+1.5P

Selling, general and administrative
expenses

53,69057,287+6.7%

Operating income

38,25844,444+16.2%

Operating income ratio

10.80%

12.00%+1.2P

Recurring profit

38,83045,470+17.1%

29,41432,158+9.3%

Net income attributable toowners of the parent company

Net sales were higher than in the same period of the previous year as a result of meeting the demandfor IT investment, such as customers’ demand for digital transformation. As for operating income,gross profit ratio rose 1.5 percentage points to 27.5% over the previous year’s level due to factors suchas the provision of high value-added businesses and the promotion of productivity and quality
improvement measures, in addition to the increase in income due to higher revenue. This offset theincrease in selling, general and administrative expenses, which were mainly due to investments suchas anticipatory investments to promote structural transformation and investments that will contributeto future growth. As a result, operating income was higher and the operating income ratio increased
1.2 percentage points year-on-year to 12.0%. The improvement in non-operating income in addition to
the increase in recurring profit and net income attributable to owners of the parent company reflect thegrowth in operating income.

-2-

<Analysis of the increase/decrease in key factors of operating income (YOY change)>

Segment results for the period are as follows. In line with the change in the Group-wide
management structure to promote further structural transformation, the Group has changed its segmentclassifications effective from the first quarter of fiscal 2023. Net sales for each segment include intersegment net sales, and year-on-year comparisons (figures) are derived by reclassifying figures for thesame period of the previous year into the new segments after the change.
(Unit: millions of yen)First Nine Months,
FY2022First Nine Months,
FY2023Year-onyear(Apr. 1 – Dec. 31, 2021)(Apr. 1 – Dec. 31, 2022)

changes

Offering
Service

Net sales

74,91781,516+8.8%

Operating income

3,443

4,499

+30.6%

Business

Operating income ratio

4.6%

5.5%

+0.9P

Business

Net sales

32,04032,223+0.6%

Process
Management

Operating income

3,555

3,644

+2.5%

Financial IT
Business
Industrial IT
Business
Regional IT
Solutions

Other

Operating income ratio

11.1%

11.3%

+0.2P

Net sales

67,83974,079+9.2%

Operating income

9,131

9,907

+8.5%

Operating income ratio

13.5%

13.4%

-0.1P

Net sales

78,86382,621+4.8%

Operating income

10,52012,124+15.3%

Operating income ratio

13.3%

14.7%

+1.4P

Net sales

114,475

115,422+0.8%

Operating income

11,066

13,569+22.6%

Operating income ratio

9.7%

11.8%

+2.1P

Net sales

4,832

6,565

+35.9%

598

643

+7.5%

12.4%

9.8%

-2.6P

Operating income
Operating income ratio-3-1) Offering Service Business
Configures services through own investment based on best practices the Group accumulated andprovides knowledge-intensive IT services.
Segment net sales in the first nine months of fiscal 2023 totaled ¥81,516 million, up 8.8% yearon-year, and operating income increased 30.6% to ¥4,499 million. In addition to capturing demandfor IT investments in areas such as settlement solutions and platforms, growth of overseas sales,
improved profitability, and other factors meant a year-on-year increase in both sales and profits,with the operating income ratio increasing 0.9 percentage points year-on-year to 5.5%
2) Business Process Management
Addresses issues related to business processes with IT technology, business know-how and skilledhuman resources to provide more sophisticated, more efficient outsourcing services.
Segment net sales in the first nine months of fiscal 2023 totaled ¥32,223 million, up 0.6% yearon-year, and operating income increased 2.5% to ¥3,644 million. While data entry operations weresluggish, steady sales and profits were achieved against the backdrop of growing digitalizationneeds, which led to an increase in both sales and profits year-on-year, and pushed up the segment’s
operating income ratio to 11.3%, a year-on-year improvement of 0.2 percentage points.
3) Financial IT Business
Considers business and IT strategies together and leverages both, and supports business progressusing expert business and operating know-how specific to the finance industry.
Segment net sales in the first nine months of fiscal 2023 totaled ¥74,079 million, up 9.2% yearon-year, and operating income increased 8.5% to ¥9,907 million. Expansion of IT investment bycredit card companies and other core clients led to an increase in both sales and profits year-on-year.
The operating income ratio was 13.4%, down 0.1 % percentage points year-on-year, due to theimpact of promotion of measures such as the strengthening of the business structure.
4) Industrial IT Business
Considers business and IT strategies together and leverages both, and supports business progressusing expert business and operating know-how specific to industry sectors other than finance.
Segment net sales in the first nine months of fiscal 2023 totaled ¥82,621 million, up 4.8% yearon-year, and operating income increased 15.3% to ¥12,124 million. In addition to the trend of
expanding IT investments, mainly by manufacturing and energy-related sectors core clients,
profitability and quality improvements, including through promotion of productivity improvement
measures, resulted in a year-on-year increase in sales and profit, and the operating income ratio
increased 1.4 percentage points to 14.7%.
5) Regional IT Solutions
Provides IT professional services extensively, across regions and client sites, and collects anddevelops this know-how as the source of solutions to support efforts to address issues and promotebusiness activities.
Segment net sales in the first nine months of fiscal 2023 totaled ¥115,422 million, up 0.8% yearon-year, and operating income increased 22.6% to ¥13,569 million. The promotion of businessactivities emphasizing profitability along with the trend toward increased IT investment, primarily
by banks and government agencies, helped to offset the exclusion of a company (Chuo System
Corporation) whose shares were transferred outside of the group during the previous fiscal year,
resulting in an increase in sales and profit year-on-year and the operating income ratio increased 2.1
percentage points to 11.8%.

-4-6) OtherConsists of ancillary businesses offering IT services, and other activities.
Segment net sales in the first nine months of fiscal 2023 totaled ¥6,565 million, up 35.9% yearon-year, operating income was up 7.5% to ¥643 million, and the segment’s operating income ratio
was 9.8%, down 2.6 percentage points. This was mainly due to the absorption-type split of theGroup's shared services business from the Company to TIS Business Service Inc., effective April 1,
2022.
As noted above, the Group has been implementing its medium-term management plan (2021-2023)
since the previous fiscal year as a second step towards realizing its “Group Vision 2026”. Under theslogan of “Be a Digital Mover 2023”, the Group is continuing to increasingly focusing on Strategic
Domains* and is working to accelerate business restructuring, with enhancing provided digitaltransformation value as the keystone.
*Note: “Strategic Domains” are the four business domains designated to be built into the corebusinesses of the Group by 2026, as set forth in Group Vision 2026.
In fiscal 2023, the second year of the medium-term management plan (2021-2023), the Group willenergetically implement various measures in line with the following Group management policies.

The status of issues and initiatives in the Group management policies are presented below.
1) Leverage long-term growth strategy for corporate value and value provided to society throughsustainability management
The Company will continue to promote the resolution of social issues through its business
operations, as well as the advancement of ESG such as the environment, human rights, andhuman capital, and the development of its management foundation through the sophisticationand efficiency of its head office functions.
In accordance with the Basic Direction on Corporate Sustainability, the Group continues topromote initiatives related to the high priority topics of the environment and human rights asurgent and important social issues. Of these initiatives, with regard to human rights issues, theGroup carried out a human rights risk assessment in the previous fiscal year to identify potential
human rights risks and make clear which countries, businesses, and rights holders (persons who
may be negatively impacted by human rights) should be prioritized for future action. In responseto this, during fiscal 2023, in addition to our own Company, we are taking steps to identify
human rights risks stemming from labor problems at outsourced companies and equipment-5-suppliers and to create a mechanism for redress, and to develop a system for the use of theGroup's services for other purposes in a phased manner. Regarding environmental issues, theCompany is working to reduce greenhouse gas emissions from its business activities in an effort
to realize a decarbonized society, aiming to achieve carbon neutrality of the Group’s own
greenhouse gas emissions by fiscal 2040 and net zero greenhouse gas emissions for the entire
value chain by fiscal 2050. In particular, in the operation of the Group's data centers, which
consume the largest amount of electricity, we have decided to use electricity derived fromrenewable energy sources for all electricity used at our four main data centers starting in April
2023, and we are making preparations for this.
In addition, as part of the Group's contribution to regional communities, the Group has begun
to utilize the corporate version of the "hometown tax" and has launched projects in cooperation
with NPOs in three domains that cannot be covered by its business activities (activities that
support future users, activities to promote digital technology’s benefits, and activities to reduce
the negative effects of digital technology in society).
Such steady progress in corporate sustainability initiatives has resulted in its selection as acomponent of the MSCI Japan ESG Select Leaders Index for the first time in June 2022.
As part of its efforts to improve the understanding of the Group's brand and its value, we haveinitiated our owned media, "TIS INTEC Group MAGAZINE”. Under the main theme of thebrand message, “Make society's wishes come true through IT.”, the Group will introduce its
specific initiatives and forward-looking plans to solve social issues in a variety of fields.
From the perspective of improving the management foundation by upgrading and increasing
the efficiency of head office functions, the Company will expand the scope of the “G20 Head
Office Function Upgrade Project” which it has been working on for some time. In addition, as
part of our efforts to share and further upgrade indirect business activities, the Company is also
promoting a shift to shared services and digital transformation of back-office operations for thewhole group through a system centered on TIS Business Service Inc.
2) Accelerate improvement of added value through enhanced DX organizational capacity andinvestment
In addition to further strengthening investments in human resources, R&D, and software,
which are the source of mid- to long-term added value growth, the Group will continue topromote M&A for the purpose of expanding its strategic domains.
As we further strengthen the front line, which is the point of contact with stakeholders, andsince it is necessary to strengthen consulting functions in upstream areas such as strategicplanning and issue formulation to promote digital transformation, especially for customers, theGroup is continuing to enhance its collaboration with our consolidated subsidiary, Miotsukushi
Analytics Co., Ltd., a consolidated subsidiary with strengths in data analysis and AI consulting.
In September 2022, along with the acquisition of Fixel Inc., which is engaged in business system
UI (Note 1)/UX (Note 2) design consulting for enterprises and design system construction &operation support for business firms, we established a dedicated digital transformation designteam to assist our clients with product and service design, business problem identification,ideation, and concept development. With the addition of this company to the Group, the value
provided by digital transformation will be strengthened by combining its excellent design
consulting capabilities with the Company's customer support and system construction
capabilities. Through these strategic allocations of management resources and human resource
development, we will continue to focus on increasing the number of digital transformation
consultants and expanding our value delivery system with respect to clients' digitaltransformation promotion.
In the payments domain, which is one of the Group's strengths, the "credit card processing
service" (Note 3) went into service. In addition, we are developing our business in the overall
settlement area, including digital accounts, mobile wallets, service coordination, security, anddata utilization. In addition to this, in March 2022, ULTRA Inc. , a provider of international
brand prepaid settlement services, became a consolidated subsidiary, and the Group is preparing-6-

to develop the “Embedded Finance” business, enabling integrated settlement functions in asingle integrated manner by combining ULTRA’s front-end settlement functions and the Group’s
expertise in conventional back-end function structuring of settlement functions. We will continue
to contribute to the further popularization of cashless settlement services by expanding theservice lineup and business scale of the entire "PAYCIERGE" total brand of retail settlement
solutions in the payment area, which is expected to grow in step with the development of acashless society.
Going forward, the Group will continue to focus on digital transformation in three domains,
and will aim from an integrated perspective to create a virtuous cycle of new value by treating"social digital transformation" to realize a better society, "business digital transformation" toinnovate our customers' businesses, and "internal digital transformation" to evolve the Group
itself, as a single linkage that strongly influences each other.
Note 1: User interface A mechanism for input and display when a user interacts with a PC.
Note 2: User Experience A user experience gained from services, etc.
Note 3: A service that provides a total environment necessary for credit card issuing businessactivities. The company develops and provides highly original systems and card
products that meet the current demands of the credit card industry, such as"sophisticated customer orientation", "flexibility for open innovation", and "highprofitability”. Since it is a SaaS-type of provision format, the necessary functions andservices can be used while controlling costs at the time of introduction.
3) Promote business restructuring and measures to improve medium- to long-term asset and capitalefficiency
The Group intends to promote efforts to boost management stability in line with progress in
structural transformation, and to improve assets and capital efficiency over the medium- to longterm based on such improvements.
With the aim of further improving the effectiveness of business management, we are
introducing business management with increased attention toward capital costs, promoting groupformation management, expanding business through M&As of domestic and overseas
companies, and business portfolio restructuring. To promote further structural transformation andimprove effectiveness, from fiscal 2023 the entire Group has adopted a management structure
based on its business model, and the segment classifications were changed accordingly. In eachsegment, a segment owner will be assigned to clarify authority and responsibility, and promote
the realization of growth strategies that leverage the strengths of each Group company.
Under these circumstances, in light of the transformation in the quality of management,
including steady progress in structural transformation by concentrating management resources instrategic domains and the accompanying strengthening of the earnings base, etc. through profit
growth and improved cash generation capabilities, etc., and as part of our efforts to optimize ourcapital structure, we completed a share buyback of a total of approximately ¥30 billion(8,223,000 shares), including approximately ¥5.5 billion to be returned to shareholders based ona total return ratio of 45%. Of this amount, the Company has decided to retire approximately¥24.5 billion worth of treasury stock (6,715,483 shares, 2.7% of the total number of shares
outstanding before retirement), which was acquired as part of the Company's efforts to optimize
its capital structure, as planned, taking into consideration the Company's policy and the need toeliminate concerns about the future dilution of shares. On the other hand, from the perspective ofshareholder returns, the Company plans to respond to the purchase of treasury stock (equivalent
to approximately ¥5.5 billion) in accordance with the Company's policy on treasury stock
holdings, which in principle limits the Company to holding up to 5% of the total number ofshares outstanding and retiring any holdings exceeding 5% of total outstanding shares.
The Company is also striving to reduce its cross-shareholdings from the perspective ofimproving asset efficiency and financial strength. In order to achieve the target of reducing theratio of balance sheet amount to consolidated net assets to the 10% level as soon as possible, theCompany today (Feb 3, 2023) resolved to sell ¥17.8 billion in the fourth quarter of fiscal 2023.
When combined with the ¥6.4 billion sold during the first nine months of fiscal 2023, the-7-Company plans for a full-year reduction of ¥24.2 billion from ¥54.3 billion at the end of theprevious fiscal year. As a result, the Company will make significant progress toward the early
realization of its goal of a 10% level of the ratio of the amount of cross-shareholdings toconsolidated net assets on the balance sheet.
4) Leverage growth strategy designed to become top-class IT group in ASEAN region, andstrengthen governance position
We intend to expand our global partnership network as well as further deepen our markets bystrengthening relationships with investee companies, and developing joint ventures based on ourbusiness strategy.
As part of this effort, we are accelerating collaboration with PT Aino Indonesia ("AINO") of
Indonesia, which became an equity-method affiliate in March 2022. AINO has already beenrecognized for its achievements in the joint development of "Acasia", a smartphone-basedtransportation payment package for Southeast Asia, and in joint case studies on MaaS (Mobility
as a Service) as a next-generation transportation service. As a core company of the JATeL
consortium (Note 1), AINO has contributed to JATel receiving the order for the first integrated
transportation payment infrastructure "Jak-Lingko" (Note 2) project in Jakarta, Indonesia, and"Acasia" has been adopted as the back-end system of "Jak-Lingko". In June 2022, we added a
MaaS service collaborating with Southeast Asia’s largest ride-hailing service, “Grab”, which isin a capital and business tie-up with the Company. In the future, in addition to the digitalizationof Southeast Asia’s transportation settlements, we plan to expand our business domain into areas
such as Park and Ride and data utilization.
In July 2022, the Company entered into a capital and business tie-up with HanKaiSi Intelligent
Technology Co., Ltd. of China, which develops common chassis for self-driving EVs (electricvehicles). With the automotive industry undergoing a major transition with the shift to EVs andadvances in automated driving technology, and at a time when software is becoming increasingly
important, we aim to create new IT services in the areas of MaaS, smart cities, etc. through ourpartnership with the Company.
Furthermore, in order to better ensure the achievement of the “ASEAN top-class IT group”,
we have added consulting as a new axis in addition to our existing channel technology toenhance our presence and capabilities as a global "consulting + IT” player. In November 2022,
the Company entered into a capital and business tie-up with Vector Consulting Group (Vector
Management Consulting Pvt. Ltd.), a major local management consulting firm in India, and in
January 2023, Vector Consulting Group became an equity method affiliate. Amid the ongoing
global convergence of consulting and technology, by leveraging Vector Consulting Group’s
expertise in the domain of management consulting, the Group aims to realize high value-added
IT services for the clients in India, Japan, the ASEAN region, and China.
Note 1: Joint venture formed by the four companies: PT Jatelindo Perkasa Abadi, AINO,
Thales, and Lyko for the purpose of bidding on PT JAKARTA LINGKOINDONESIA's projects.
Note 2: Integrating the tariff systems of the four public transportation systems that exist in
Jakarta, this service allows users to cross over from public transportation to Ride
hailing (car dispatching service using an app) with a single app. Users can search forroutes, make reservations, purchase tickets, and use the service from the point of
departure to boarding public transportation, and from public transportation drop-off tothe destination, including the means of transportation.
5) Rachet up investment into human resources to sharpen skills and promote diversity
Aiming at added value improvements, the Company will continue its aggressive recruiting
efforts, including improved compensation and training investments, as well as career recruiting.
We are promoting initiatives such as creating an environment and organizational culture where
diverse individuals can thrive, promoting next-generation work-style reforms looking towards a
new work environment, advancing human resource portfolio management by digitalization of
our human resources database, and supporting engagement with employees and autonomous-8-career development through the full-scale operation of HR business partners. Also, to further
accelerate structural transformation, we are striving to strategically secure and foster advanced
human resources in areas such as consulting, global business, and service business and will place
human resources optimally.
Also, to achieve structural transformation toward the realization of the Group Vision 2026, theGroup has set the promotion of solutions to social issues through co-creation with stakeholders
by making full use of digital technology as a goal of the current medium-term management plan,and is focusing on increasing added value through the growth of human resources, which is themost important management capital in order to carry this forward. For some time, the Company
has been promoting investment in human resources to increase employee engagement based on
the three axes of the meaning of work, the working environment, and compensation. In order tofurther promote the reform of the meaning of work and compensation, we decided to introduce a
new personnel system in April 2023 that completely revamps the compensation, evaluation,
grading, and other systems. Under the compensation system, we will prioritize investments inhigh-level personnel and young employees who drive the business forward, with base salary
increases of up to 17% and an average increase of 6%. Through the introduction of the new
system, and by linking it to the enhancement of added value by encouraging high performancethat exceeds expectations, we aim to accelerate corporate growth by improving corporate
competitiveness.
We will continue to make Group-wide proactive investments to increase the value of humanresources, and create a virtuous cycle of high added value for the Company, our employees, andsociety, aiming for the realization of further growth of the Group and improved corporate value,
thereby creating a more prosperous society.

-9-(2) Analysis of Financial Condition(Assets)
Consolidated total assets as of the end of the third quarter amounted to ¥434,074 million, a decreaseof ¥42,567 million from ¥476,642 million at the end of the previous fiscal year.
Current assets were ¥228,390 million, a ¥30,870 million decrease from ¥259,261 million at theend of the previous fiscal year. The decrease primarily reflects a ¥36,388 million decrease in cash
and deposits.
Fixed assets totaled ¥205,684 million, a ¥11,696 million decrease from ¥217,381 million at theend of the previous fiscal year. The decrease primarily reflects a ¥7,418 million decrease ininvestment securities.
(Liabilities)
As of the end of the third quarter, total liabilities amounted to ¥142,840 million, a ¥30,808 million
decrease from ¥173,649 million at the end of the previous fiscal year.
Current liabilities totaled ¥104,513 million, a ¥34,723 million decrease from ¥139,236 million at
the end of the previous fiscal year. The decrease primarily reflects a ¥19,041 million decrease inincome taxes payable and a ¥11,500 million decrease in short-term borrowings.
Fixed liabilities amounted to ¥38,327 million, a ¥3,915 million increase from ¥34,412 million at
the end of the previous fiscal year. The increase primarily reflects a ¥2,651 million increase in longterm debt.
(Net assets)
Consolidated total net assets as of the end of the third quarter came to ¥291,233 million, a decreaseof ¥11,759 million from ¥302,993 million at the end of the previous fiscal year. This was mainly due
to an increase in treasury stock of ¥29,157 million (net assets decreased) and an increase in retained
earnings of ¥20,702 million yen as a result of net income attributable to owners of the parent
company and dividends from surplus.

- 10 -

(3) Consolidated Earnings Forecast and Caution on Forward-Looking Statements
An extraordinary income of approximately ¥12.8 billion is projected to be recorded in the fourth
quarter of fiscal 2023 as a result of the decision to sell cross-shareholdings. In addition, The Company
has revised its consolidated financial forecast for the full fiscal year ending March 31, 2023,
announced on November 2, 2022, as follows. This is in light of the impact of an extraordinary income(gain on sale of investment securities) of approximately ¥4.3 billion recorded in the third quarter offiscal 2023 and an extraordinary income (gain on sale of shares of subsidiaries) of approximately ¥2.4
billion from the transfer of shares in a consolidated subsidiary of MFEC Public Company Limited(MFEC), an overseas subsidiary of the Company, which is scheduled to be recorded in the fourth
quarter as part of the efforts to accelerate the business restructuring of MFEC. No revisions have been
made to net sales, operating income, and recurring profit at this time, as they are generally in line with
our forecast announced on November 2, 2022. While closely monitoring the impact of infectious
diseases and fluctuations in the financial and capital markets, we will continue to invest in humancapital and other resources that will contribute to business expansion and future growth by accurately
responding to customers’ demand for digital transformation, while aiming to further improve
profitability by providing high added value businesses and promoting productivity and quality
enhancement measures, etc.
(Unit: millions of yen)Previously

Current

released
forecast

released
forecast

Ratio of(A)

(B)

Net sales

505,000

505,000－－

Cost of sales

366,000

366,000－－

Gross profit

139,000

139,000－－

Gross profit ratio

27.5%

27.5%

－

－

Selling, general and administrative expenses

80,00080,000－－Operating income

59,00059,000－－

Increase/decreaseincrease/decrease(B - A)(%)

Operating income ratio

11.7%

11.7%

－

－

Recurring profit

60,50060,500－－Net income attributable toowners of the parent company

39,80052,000+12,200+30.7%

A comparison of the latest full-fiscal year consolidated earnings forecast with the results of theprevious fiscal year is as follows.
(Unit: millions of yen)
Fiscal 2022

Fiscal 2023

Year-on-year

Actual results

ForecastchangeNet sales

482,547

505,000+4.7%

Cost of sales

353,699

366,000+3.5%

Gross profit

128,848

139,000+7.9%

Gross profit ratio

26.7%

27.5%

+0.8P

74,10880,000+7.9%

Operating income

54,73959,000+7.8%

Operating income ratio

11.3%

11.7%

+0.4P

Recurring profit

55,71060,500+8.6%

Net income attributable toowners of the parent company

39,46252,000+31.8%

Selling, general and administrative
expenses- 11 -

＜Analysis of key factors in the increase/decrease in operating income (forecast, year-on-year change)><By segment>(Unit: millions of yen)
Fiscal 2022
Actual results
Offering

Net sales

ServiceBusiness

Fiscal 2023
Forecast

Year-on-yearchange103,167

109,000+5.7%

Operating income

4,692

6,000

+27.9%

Operating income ratio

4.5%

5.5%

+1.0P

Business
Process

Net sales

42,95144,000+2.4%

Operating income

4,991

5,300

+6.2%

Management

Operating income ratio

11.6%

12.0%

+0.4P

Net sales

91,651

98,500+7.5%

Operating income

12,355

12,700+2.8%

Operating income ratio

13.5%

12.9%

-0.6P

Net sales

108,751

111,900+2.9%

Operating income

15,356

16,700+8.7%

Operating income ratio

14.1%

14.9%

+0.8P

Net sales

156,231

158,800+1.6%

Operating income

16,492

18,200+10.4%

Operating income ratio

10.6%

11.5%

+0.9P

Net sales

6,369

9,400

+47.6%

770

700

-9.2%

12.1%

7.4%

-4.7P

Financial IT
Business
Industrial IT
Business
Regional IT
Solutions

Other

Operating income
Operating income ratio- 12 -

The Company’s medium-term management plan (2021-2023) includes a basic shareholder return
policy that targets a total return ratio of 45%. Also, in order to increase the distribution of profits toshareholders in accordance with business growth in a sustained manner, the Company believes it isdesirable to base shareholder returns on profits derived from operating activities, as they are notaffected by one-time gains or losses.
As mentioned above, as of the date of this report, we have raised our forecast for net income
attributable to owners of the parent company, but this reflects only one-time gains in the form of again on the sale of investment securities, and a gain on the sales of shares of subsidiaries. Income,which is not affected by one-time gains or losses, has been generally in line with the forecast
announced on November 2, 2022. The total return ratio calculated based on this forecast, the current
dividend forecast, and the equivalent of approximately ¥5.5 billion of treasury stock already acquired
for the purpose of returning profits to shareholders is expected to be 44.5%, so the annual dividend
forecast for fiscal 2023 of ¥47 per share (including a year-end dividend of ¥32 per share) remains
unchanged.
Note: Total return ratio: The ratio of the combined value of dividend payments and share buybacks
versus net income attributable to owners of the parent company- 13 -

2. Consolidated Financial Statements(1) Consolidated Balance Sheets
As of March 31, 2022

Items
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable, and contract assets
Lease receivables and lease investment assets
Marketable securities
Merchandise and finished goods
Work in process
Raw materials and supplies
Other current assets
Allowance for doubtful accounts
Total current assets
Fixed assets
Property and equipment
Buildings and structures, net
Machinery and equipment, net
Land
Leased assets, net
Other property and equipment, net
Total property and equipment
Intangible assets
Software
Software in progress
Goodwill
Other intangible assets
Total intangible assets
Investments and other assets
Investment securities
Net defined benefit asset
Deferred tax assets
Other assets
Allowance for doubtful accounts
Total investments and other assets
Total fixed assets
Total assets- 14 -

As of Dec. 31, 2022

millions of yen

millions of yen

114,194
111,361
4,014
298
1,454
1,360
217
26,668(308)
259,261

77,806
111,506
3,933
227
3,907
1,566
197
29,743(499)
228,390

35,471
9,636
9,675
3,723
6,882
65,38933,850
8,479
9,667
4,032
6,557
62,587

14,231
12,255770
1,493
28,75022,666
3,306
732
1,395
28,09976,823
6,656
17,31325,266(2,820)123,241
217,381476,642

69,405
6,987
15,39525,982(2,775)
114,996205,684
434,074

As of March 31, 2022

Items
Liabilities
Current liabilities
Notes and accounts payable
Short-term borrowings
Income taxes payable
Accrued bonuses to directors and employees
Provision for loss on order received
Other allowances
Other current liabilities
Total current liabilities
Non-current liabilities
Long-term debt
Lease obligations
Deferred tax liabilities
Deferred tax liabilities from revaluation of land
Accrued retirement benefits to directors
Other allowances
Net defined benefit liability
Asset retirement obligations
Other non-current liabilities
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Common stock
Additional paid-in capital
Retained earnings
Less treasury stock, at cost
Total shareholders’ equity
Accumulated other comprehensive income
Net unrealized gains on other securities
Deferred gains or losses on hedges
Revaluation reserve for land
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets- 15 -

As of Dec. 31, 2022

millions of yen

millions of yen

22,47535,22921,864
15,8401,092
140
42,593
139,236

22,38023,729
2,822
7,901
426
159
47,093
104,513

2,213
3,554
395
272
0
208
12,534
6,992
8,240
34,412
173,649

4,864
3,749
884
272
0
191
12,6396,956
8,767
38,327
142,840

10,00164,960203,256(3,117)275,100

10,00164,969223,959(32,275)
266,654

20,990(4)(2,672)(70)(219)
18,024
9,867
302,993476,642

15,95324(2,672)922(18)
14,20910,370291,233
434,074(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income
Consolidated Statements of Income
First Three Qtrs.,
First Three Qtrs.,
FY2022
FY2023
Items(Apr. 1 – Dec. 31, 2021) (Apr. 1 – Dec. 31, 2022)
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Other
Total non-operating income
Non-operating expense
Interest expenses
Equity in losses of affiliated companies
Other
Total non-operating expenses
Recurring profit
Extraordinary income
Gain on sales of investment securities
Gain on sales of shares of subsidiaries
Other
Total extraordinary income
Extraordinary loss
Loss on disposal of fixed assets
Loss on valuation of investment securities
Impairment loss
Other
Total extraordinary loss
Income before income taxes
Income taxes: current
Income taxes: deferred
Total income taxes
Net income
Net income attributable to non-controlling interests
Net income attributable to owners of the parent company- 16 -

millions of yen

millions of yen

353,133
261,184
91,94853,69038,258370,382
268,650
101,732
57,28744,444

325
801
793
1,920

345
765
630
1,741

245
910
192
1,348
38,830

174
333
208
716
45,470

494
6,362
6,862

4,639
‒
54
4,694

311
136
758
81
1,287
44,404
10,065
3,861
13,92630,4781,064
29,414

62
309
697
43
1,113
49,051
11,150
4,513
15,66433,386
1,228
32,1585

Consolidated Statements of Comprehensive Income
First Three Qtrs.,
First Three Qtrs.,
FY2022
FY2023(Apr. 1 – Dec. 31, 2021) (Apr. 1 – Dec. 31, 2022)

Items
Net income
Other comprehensive income
Net unrealized gains on other securities
Deferred gains or losses on hedge
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Share of other comprehensive income of equitymethod affiliates
Total other comprehensive income
Comprehensive income(Composition)
Comprehensive income attributable to owners of theparent company
Comprehensive income attributable to noncontrolling interests- 17 -

millions of yen

millions of yen

30,47833,386

14,277
32
(214)
207

(5,038)
59
897
203

312

370

14,61545,093(3,507)29,87944,092

28,342

1,001

1,536

(3) Notes on the Consolidated Financial Statements(Notes on the Going-concern Assumption)
Not applicable(Notes on Significant Changes in the Amount of Shareholders’ Equity)
TIS Inc. acquired 8,223,000 shares of its treasury stock in accordance with the resolution at the Board of
Directors’ Meeting held on May 11, 2022. Due to this acquisition and other events, treasury stock increased by¥30,004 million during the first three quarters of FY2023 and amounted to ¥32,275 million at the end of the third
quarter of FY2023.
The acquisition of treasury stock based on the resolution of the Board of Directors’ Meeting completed withthe contracted acquisition on December 19, 2022.

(Significant Subsequent Events)(Sale of subsidiary shares)
The Board of Directors of MFEC Public Company Limited (MFEC), a consolidated subsidiary of theCompany, resolved on December 1, 2022, to sell 499,998 shares of Vulcan Digital Delivery Co., Ltd. (VDD), a
consolidated subsidiary of MFEC, to Bluebik Group Public Company Limited (BBIK) and concluded a sharetransfer agreement on December 22, 2022.
The 499,998 shares are scheduled to be sold during March 2023, following approval of the transaction at
the Extraordinary General Meeting of Shareholders to be held on February 13, 2023 at BBIK. With thistransaction, VDD will be excluded from the Company’s scope of consolidation in the fourth quarter.
1) Reason for the sale of shares
MFEC is a leading player in providing enterprise IT solutions in Thailand, and is listed on the Stock
Exchange of Thailand. The decision for this share transfer was made as part of MFEC's efforts toaccelerate the achievement of structural changes in its business operations.
2) Name of counterparty to sale
Bluebik Group Public Company Limited
3) Date of sale
March 2023 (scheduled)
4) Name of subsidiary, business activities, and details of transactions with the Company
Name: Vulcan Digital Delivery Co., Ltd.
Business activities: IT services and system integration
Details of transactions with the Company: none5) Number of shares to be sold, sale value, gain/loss on the sale, and percentage of ownership after the sale
Number of shares to be sold: 499,998
Sale price: ¥2,625 million (691 million Thai baht)
Gain/loss on sale: The Company expects to post extraordinary income of ¥2,435 million (641 million
Thai baht) as gain on the sale of subsidiary shares in the fourth quarter.
Percentage of ownership after the sale: -%*Yen amounts are converted at the rate as of the end of December 2022 (1 Thai baht = 3.8 yen).

- 18 -

(Retirement of treasury stock)
At a meeting of the Board of Directors held on February 3, 2023, the Company resolved to retire treasury
stock based on Article 178 of the Companies Act of Japan, as follows.
1) Reason for retirement
In principle, the Company retains treasury stock up to 5% of the total number of shares outstanding, andretires treasury stock held in excess of 5% of the total number of shares outstanding.
The Company purchased a total of approximately ¥30 billion of treasury stock in the first nine monthsof fiscal 2023, of which the Company plans to follow this policy with respect to treasury stock (equivalent
to approximately ¥5.5 billion) acquired from the standpoint of returns to shareholders.
Conversely, as part of the Company’s efforts to optimize its capital structure, the Company acquired
treasury stock (equivalent to approximately ¥24.5 billion). In consideration of the Company's policy and toeliminate concerns about future dilution of shares, the Company plans to retire the treasury stock from theoutset, and this retirement will be conducted as planned.
2) Method of retirement
Reduction from other additional paid-in capital3) Type of shares to be retired
Common stock4) Number of shares to be retired
6,715,483 shares(Percentage of total shares outstanding before retirement 2.7%)
5) Scheduled retirement dateFebruary 28, 2023 (scheduled)
6) Total number of shares outstanding after retirement244,445,411shares(Sales of investment securities)
The Company’s Board of Directors resolved on February 3, 2023 to sell a portion of the owned crossshareholdings, and the Company expects to record a gain on sales of investment securities (extraordinary
income) on sale of investment securities in the fourth quarter of fiscal 2023.
1) Reason for sales of investment securities
This sale is part of the Company's efforts to improve asset efficiency and financial strength.
The Company is making efforts to reduce its cross-shareholdings with the goal of reducing the ratio ofthe value of its cross-shareholdings to consolidated net assets on the consolidated balance sheet to the 10%
level. This sale is positioned as a contribution to the early realization of that goal.
2) Details of sales of investment securities
Shares Sold: Two listed securities held by the Company
Scheduled date of sale February 3, 2023
Gain on sale 12.8 billion yen (estimate)- 19 -

3. Other Information
INTEC Inc., a consolidated subsidiary of the Company, is currently in litigation with Mitsubishi Shokuhin Co.,
Ltd., which filed a claim for compensation in connection with services including systems development provided
by INTEC Inc. (Amount of compensation demanded: 12,703 million yen; date the complaint was received:
December 17, 2018).

- 20 -