Integrated Report 2022
Year Ended March 31, 2022 (From April 1, 2021, to March 31, 2022)

TIS Inc.
Sumitomo Fudosan Shinjuku Grand Tower,
17-1, Nishi-Shinjuku 8-chome, Shinjuku-ku, Tokyo, 160-0023, JapanFor further information, contact:
Corporate Management Dept., Corporate Planning SBU
Tel: +81-3-5337-4569
E-mail: tis_ir@tis.co.jp
https://www.tis.com/
TIS202209

Securities Code: 3626

Introduction

Our mission is to draw on leading-edge digital technology and
TIS INTEC Group Philosophy—OUR PHILOSOPHY

know-how to shape completely new concepts and approaches
that solve issues affecting our world.
Top Message

Guided by this mission, we seek to make society
a more colorful and vibrant place andcreate a tomorrow full of more smiles than yesterday.

TIS INTEC Group Value Creation

IT has the power to make the future brighter.

MissionTo brightly color the future as a mover

Growth Strategy for Value Creation

Our mission, as the TIS INTEC Group, is to fulfill a social role, but our mission also symbolizes a corporate
raison d’être. The word “mover” refers to the people who create objects, services and systems that take theworld—that is, the world around us—to a new level. For us, “mover” encompasses the TIS INTEC Group andthe people at companies under the Group umbrella. As a mover drawing on the power of digital technology,
the TIS INTEC Group will infuse the future—still essentially a blank canvas—with vibrant colors by providing
innovative possibilities and options that appeal to society.

Platform for Value Creation
Corporate Information/Data

12

This integrated report touches on important financial and non-financial information while highlighting
topics that we want to convey to stakeholders, including shareholders and investors, so that they have abetter understanding of the activities undertaken by the TIS INTEC Group to achieve sustainableimprovement in corporate value.
For more information, please refer to the investor and sustainability sections on our website.

Introduction

1

Top Message
TIS INTEC Group Value Creation

Connection with
Strategies (Story)

TIS INTEC Group Philosophy—OUR PHILOSOPHY
Editorial Policy
About the TIS INTEC Group
Positioning in the IT Services Market
Consolidated Financial / Non-Financial Highlights

1
3
5
7
9

11

Top Message

11

16

Growth Trajectory
Value Creation Process
Sources of Value Creation and Competitive Advantage
Sustainability
Materiality
Stakeholder Dialogue

17
19
21
23
25
27

Access an overall picture of corporate activities.
https://www.tis.com/ir/finance/annual_report/

Non-financial
information

Platform for Value Creation

Growth Strategy for Value Creation

Financialinformation

Taking Long-Term Perspective on Target Trajectory
29
Looking Back on Past Medium-Term Management Plans
31
Outline of Medium-Term Management Plan (2021–2023)
32
Key Strategy of Medium-Term Management Plan
33
—DX, Service-style business, payment, global, management capability, HR
Executive Vice President’s Message 1 (Business Strategy)
41
Special Feature Roundtable Discussion:
45
TIS INTEC Group’s Human Resources Strategy x Business
Executive Vice President’s Message 2 (Financial Investment Strategy)
49
Business Strategies by Segment
53

TIS INTEC Group Value Creation

Growth Strategy for Value Creation 28

Integrated Report 2022

Top Message

CONTENTS
Introduction

Editorial Policy

Stakeholder Engagement
60
Message from the Chairman of the Board of Directors
61
External Directors’ Messages
62
Corporate Governance
63
E S G E
Compliance/
Internal
Control/
Preventing
Corruption/
Information
Security73
S G
Risk Management
75
E
Quality Control and Production Innovation
79
S EG S G
For the Global Environment
81
With Employees
85
With
Clients
andBusiness
Partners
87
E S GWith Shareholders and Investors
88
With Local Communities and Society
89

60E

S G

Sustainability information
Find information about sustainability
initiatives.
https://www.tis.com/group/sustainability/

E

S G

E S G

Governance
Environment
SocialCorporate Information/Data

Comprehensiveness

Financial Review
Consolidated Financial Summary
Non-Financial Summary
Corporate Data
Evaluations from External Parties
In Issuing the 2022 Integrated Report

91
93
97
99
101
102

Corporate Information/Data

Scope of reporting: TIS (parent) and TIS INTEC Group
Issued: September 2022

90

Platform for Value Creation

IR information
Find financial results and IR-related
news as well as the latest IR events.
https://www.tis.com/ir/

Disclaimer: Forward-looking statements, such as performance forecasts, described in this report are based on information available to management regarding the TIS INTECGroup—that is, TIS and the subsidiaries under its umbrella—as of the production date and certain assumptions deemed reasonable at this time. No intent of promise is impliedby the Company to achieve such forward-looking statements. Indeed, various factors may cause future results to be substantially different from the assumptions presented inthese materials.
The names of the products and services described in this report are trademarks or else registered trademarks of the respective company.

34About the TIS INTEC GroupTIS INTEC Group Business Activities
Introduction

Providing optimum, one-stop support across client system lifecycles and all types of IT-related services

Three Strengths of the TIS INTEC Group1.
2. Dominant presence in payment services domain
3. Flexible management strategies and speedy decision-making thanks to independent status
Solid management platform

Consulting services
Helping clients use IT to raise business value

Consulting
services

Outsourcing
services

Systemintegration
services

Service offering
style
Provide services that
anticipate clientneeds

TIS INTEC Group by the Numbers
Consolidated
Net Sales(Year ended March 31, 2022)

Consolidated
Operating Income(Year ended March 31, 2022)

Consolidated Operating Income to
Net Sales Ratio¥54.7 billion
Rating（At November 17, 2021）(Year ended March 31, 2022)

14.0 %

61.5 %Net Sales by Client Sector (Year ended March 31, 2022)
Financial sectors
Other
sectors

PublicsectorOthersPublicinstitutions 2.9%

(As of March 31, 2022)

6.6%

Number of Clients(As of March 31, 2022)

Service

Credit card

18.7%

¥482,547
million28.7%

companies(TIS + consolidated subsidiaries+ equity method affiliates)

21,70915,000About
companies

54.5%

Distribution

6.8%

Industrial sectors
Major clients

Banking

7.5%

Insurance

6.5%

Other
financial

3.3%

Assemblybased
Processing- manufacturing
based
9.2%
manufacturing

11.1%

✓ JCB
✓ Mitsubishi UFJ NICOS✓ SMBC Finance Service✓ MUFG Bank
✓ Nippon Life

✓ Asahi Kasei✓ Komatsu✓ Tokyo Gas✓ Recruit

Corporate Information/Data

Percentage of sales fromtop 10 client companies

Industrial
sectors

5

Financialsectors

36.0%

Total

(Year ended March 31, 2022, domestic)

27.4%

130

Major clients

2.9%

6.6%

Number of Employees,
Consolidated

Product and Software Sales
Sale and maintenance of hardware, such as servers
and network equipment, and software.

/Positive(Long-term/
Japan Credit Rating Agency, Ltd.)

Number ofGroup Companies

Operation and Cloud Services
Provides on-demand IT resources using SaaS andother categories of cloud computing, including
system operation through Company-run data centers.

Platform for Value Creation

A

Software development¥259,972 million

Management andcloud services¥159,434 million

Software Development
Offers consulting services related to IT management,
development of IT systems from scratch anddevelopment and maintenance of systems usingbusiness packages to address client-side
management and business issues.

Growth Strategy for Value Creation

Consolidated
Equity Ratio

TIS INTEC Group Value Creation

Other¥2,716 million

Product and softwaresales¥60,424 million

Total

Consolidated ROE

Outsourcing services
Everything from system operation to full businessprocess outsourcing (BPO)Net Sales by Business Segment (Year ended March 31, 2022)¥482,547 million(Year ended March 31, 2022)

IT platform configuration services
Building safe and secure computer networks, from hostto public cloud, matched to client nee(Year ended March 31, 2022)

11.3 %¥482.5 billion

Research
into and accessto leading-edge
technology

IT platform
configuration
services

Research into and access to leading-edge
technology
Always on a quest for the latest IT technology to provide
systems a step ahead of expectations

Top Message

Contractdevelopment style
Provide systems
matched to client
requirements

System integration services
Providing one-stop access to systems perfectly matched
to client needs

Public sector
Major clients✓ Local governments✓ Federation of National

Health Insurance Organizations✓ Japan Housing Finance Agency*Client names are short-form.

6

Positioning in the IT Services Market

Examples of IT services in the TIS INTEC Group portfolio that help supportclients’ businesses, the lifestyles of individuals and social infrastructure

Introduction

TIS INTEC Group has cemented a position as a leading, independent prime contractor in Japan’s IT services industry—a market that is expected to continue growing against a backdrop of robust corporate demand for digital technology.

IT Services Market Size in Japan(Billions of yen)
YOY change
20,000

Promoting cashless
settlement in Japan

Credit cards

Branded debit card-relatedCore system development
results
Domestic market share

About

50%

(On annual transaction volume basis for clients served)

Domestic market share

86%

There are about 450 million debit cards affiliatedwith an international brand in Japan. Settlementtransactions have reached about 650 million peryear, with an aggregate value of about ¥2.8
trillion. The TIS INTEC Group boasts anoverwhelming share—about 86%—of themarket, on a transaction-handling financial
institution basis, through such solutions as
DebitCube+, which provides one-stop access toservices required or branded debit card issuanceand operation.

16,000F 3 (F Cube)
Implementation

12,00054 of 99 banks(regional banks)

Implementation base includes more than half ofJapan’s regional banks, and share of top 30
banks in terms of total funds stands at 87%.
Demand for cloud-based application to achieve
connection and strong security over private
networks expanded to more than 30 of 54 banks
introducing F3 into their operations.

13,463.8

14,219.2

5.5%

14,965.0

15,701.4

5.2%

5.6%

4.6%

TastyQubeGrowth
System implementation

Number of access points

About

140,000

4
2

4,000

0

2021

2022

2023

2024

2025

Contributing to stable insurance
system platform creation

For Federation of
National Health Insurance
Associations
Track record in system implementation/
operation/maintenance

Comparison of Japan’s Leading IT Companies (Year ended March 31, 2022)*1

Of the 47 prefecture-based members of theFederation of National Health Insurance
Associations in Japan, the TIS INTEC Group has
been tapped to install, operate and maintainsystems for 12 members.
About 5.4 million people are covered by these
12 insurance associations*.

7

TastyQubeGrowth is highly versatile and can beapplied to any restaurant format, helps tovisualize shop operations, and realizes enhanced
operating efficiency.
Earning high regard for offering necessaryfunctions for restaurant/shop management
in all-in-one package, this solution has been
applied to about 20% of market share, mainly forrestaurants, cafes and pubs.

Contributing to the business of new electric powercompanies in the wake of electricity deregulation

2,600

EneLink

600

50 systems deployed at 30 companies

400

10 of 30 leading PPSs

300

212.5
522.3

200

482.5
414.1
270.3

106.2

0

NRI

CTC

TIS

SCSK BIPROGY NSSOLROE (%)

0

NTT
Data

95%

320

17.0
14.1

14.0

13.2

CTC

SCSK

29.8

NSSOL BIPROGY

5
0

12.2

320.2 306.4
237.4

240

10.6

226.0

210.5

160

164.9

156.2

NSSOL

SCSK

80

5

0

TIS

47.5

400

25

10

(Excludes insurance companies offering specialized ­products,
such as pet insurance and reinsurance)

NRI

50.4

8.6%
27.4

Total Shareholder Return (%)

15

Implementation ratio in
non-life insurance sector

9.7%

15

11.5% 11.0%

10

54.7

8.3%

50

NTT
Data

11.3%

100

200
100

20

17.4%

150

317.6

20

National address master file
“ADDRESS”

All addresses in Japan are assigned a 10-digit code,
creating a master file of some 300,000 kana andkanji-based addresses.
ADDRESS deals with changes in client addresses
caused by the merger of cities, towns and villages,
standardizes address information, and facilitatesefficient profile-building. Applications in the non-life
insurance sector include estimating fire insurance
premiums.

25

250

611.6

21.3

Contribute to greater efficiency in clients’ address
management operations

More than2,551.9500

New electric power businesses

Following the full deregulation of the electricity
retail market that began in April 2016, we havecontributed to the businesses of PPSs and Japan's
power system reforms by providing rate
calculation systems, supply—demand management systems, and other products as part of the
EneLink series.
We will continue to address issues related toelectric power and energy, which are thefoundation of industry and daily life, such as stablesupply, cost reduction, and decarbonization.

Operating Income, Operating Margin (Billions of yen)

Corporate Information/Data

12 of 47 prefectures

20%

0

2026

Platform for Value Creation

identifiers
We enjoy industry’s largest share of data-related
platform services (EDI, EIA, API). We respondquickly to internet-based EDI issues affecting
payment card industry data security standard (PCI
DSS) compliance and the EDI 2024 problem, andhave built an extensive track record in building
and operating industry-oriented EDI platforms.

About(Top 250 companies in the restaurant sector)

4.8%

8,000

* Gartner “Forecast: IT Services, Worldwide, 2020-2026, 2Q22
Update“ Colleen Graham, et al.,/June 27, 2022
End user spending based graph created by TIS based on Gartner
research.
All statements in this report attributable to Gartner represent TIS’s
interpretation of data, research opinion or viewpoints published aspart of a syndicated subscription service by Gartner, Inc., and havenot been reviewed by Gartner. Each Gartner publication speaks asof its original publication date (and not as of the date of thisreport). The opinions expressed in Gartner publications are notrepresentations of fact and are subject to change without notice.

Growth Strategy for Value Creation

EDI

System configuration andoperation track record

Highly evaluated as restaurant
sector-specific shop management system

8

6

4.9%

Net Sales (Billions of yen)Support business DX (optimization, greater
efficiency) in business-to-business transactions

10

16,423.7 17,214.8

NRI

BIPROGY

SCSK

TIS

CTC

NTT
Data

NSSOL

0

TIS

NRI

NTT
Data

BIPROGY

CTC*The above figures are calculated based on 100% of the stock price on March 31,
2017.

Note: Market data (market share) is based on TIS research.
*The scope is the National Health Insurance system and medicalcare system for the elderly in the latter stage of life.

TIS INTEC Group Value Creation

Of 25 companies in Japan with significant
consumer credit transaction volumes, 11 are in
the Group’s client base for core systemdevelopment.
Credit extended for card-facilitated purchases
has reached ¥74 trillion in Japan. The 11
companies that are in the TIS INTEC Group clientbase have aggregate membership of about 200
million people and credit transaction volume
representing about 50% of the total market.

Service provision/systemdevelopment results

Support progress of banking businessoverall through use and application of digital
data generated through client contact

Top Message

Supporting safe and secure,daily credit card settlement*1The full company names used in the above graphs (NTT Data, NRI, CTC, SCSK, BIPROGY, and NSSOL) are: NTT DATA Corporation, Nomura Research Institute, Ltd., ITOCHU
Techno-Solutions Corporation, SCSK Corporation, BIPROGY Inc., and NS Solutions Corporation. NTT Data, NRI, CTC, SCSK, and BIPROGY amounts are based on the IFRS
(International Financial Reporting Standards).

8

Consolidated Financial/Non-Financial Highlights

Non-Financial Highlights

Net Sales

Operating Income,Operating Income to Net Sales Ratio(Millions of yen)

(Millions of yen, %)482,547

443,717 448,383

405,648 420,769

Net Income Attributable to Owners of
the Parent Company (Millions of yen),
Net Income per Share*1 (Yen)44,83932,743

9.0

8.1

10.1

10.2

Results of Employee
Awareness Surveys*2

Number of Days Spent on Learning
and Research per Person*2(Person)

(%)

(Day)

39,462
157.6911.3
26,034TIS INTEC Group116.7819,48361

56

110.51

10.8

38

Fiscal 2018 Fiscal 2019 Fiscal 2020 Fiscal 2021 Fiscal 2022

Fiscal 2018 Fiscal 2019 Fiscal 2020 Fiscal 2021 Fiscal 2022

12.5

51

46

15.2

14.2

12.5

48

45

38

14.4

11.2

13.3

8.1

TIS INTEC Group Value Creation

Fiscal 2018 Fiscal 2019 Fiscal 2020 Fiscal 2021 Fiscal 2022

TIS INTEC Group

19,744

80.48

Fiscal 2018 Fiscal 2019 Fiscal 2020 Fiscal 2021 Fiscal 2022

TIS

21,817 21,709
19,877

29,411 27,692

102.61

20,620TIS

Top Message

38,04345,748

Number of Employees at Year-End(Consolidated)

Net Income Attributable to Owners of the Parent Company
Net Income per Share

Operating Income
Operating Income to Net Sales Ratio 54,739

Introduction

Financial Highlights

Fiscal 2018 Fiscal 2019 Fiscal 2020 Fiscal 2021 Fiscal 2022

Fiscal 2018 Fiscal 2019 Fiscal 2020 Fiscal 2021 Fiscal 2022
* Percentage of respondents answering positively to thequestion “Overall, this company is a good place to work”
in the employee awareness survey.

Orders Received during the Term,
Order Backlog at Year-End(Software Development) (Millions of yen)Orders Received
Order Backlog

238,298

246,330

ROE, ROA(Millions of yen)(%)

Percentage of Female Employees
in Management Positions*2, 3

ROE

271,350

14.0
11.5

12.5
12.2

9.9
10.5

67,716

94,016

10.8

8.17

8.60

9.17

9.84

10.32
467

447

78,125

12.0

71,09664,48865,86764,157

745

760

513

22,184
12,132

15,823
0012

0041

007

0

0

700

38

27
Fiscal 2018 Fiscal 2019 Fiscal 2020 Fiscal 2021 Fiscal 2022

589

537
463

Scope1
Scope2

9.4

9.3
83,797(t-CO2)

Number of employees on childcare leave
Number of male employees on childcare leave

ROA

52,702

237,323

79,277

Greenhouse Gas Emissions*4(%)

36,34575,549Number of Employees onChildcare Leave*2 (Person)

Fiscal 2018 Fiscal 2019 Fiscal 2020 Fiscal 2021 Fiscal 2022

Fiscal 2018 Fiscal 2019 Fiscal 2020 Fiscal 2021 Fiscal 2022

1400

53

80

106

958

Fiscal 2018 Fiscal 2019 Fiscal 2020 Fiscal 2021 Fiscal 2022

Fiscal 2018 Fiscal 2019 Fiscal 2020 Fiscal 2021 Fiscal 2022

2100

885

Fiscal 2018 Fiscal 2019 Fiscal 2020 Fiscal 2021 Fiscal 2022
* Scope 1: Direct emission of greenhouse gases by business
operators* Scope 2: Indirect emission through use of electricity or heat/steam provided by other companies(Millions of yen, %)Total Assets
Equity Ratio

Net Assets

451,072
366,954 370,657
62.0
60.4

382,899476,64260.0
279,429143

TOPIX including dividends

290.5

188.8

22.8

42.8
31.9

58
501

320.2

825

50〜54

889

45〜49

196.4

150.0

39.8
25.7

15

739

156

737

305

762

90
79

401
105

23.30
39.0

8
63

60〜
55〜59

30.00

16.6

9

TIS

35.00

13.30
30.5

Fiscal 2018 Fiscal 2019 Fiscal 2020 Fiscal 2021 Fiscal 2022

(%)

44.00

61.5
302,993

Employee Composition*2 (As of April 1, 2022) (Person)

Total Shareholder Return

43.1
30.7

141.5
110.0

115.9

1,086

40〜44

144.3

99.6

Fiscal 2018 Fiscal 2019 Fiscal 2020 Fiscal 2021 Fiscal 2022

* Total return ratio: Total amount of dividends and treasury
stock buybacks as a percentage of net income.
* Total return ratio and payout ratio in fiscal 2022 are figures
after adjustments.

* The above figures are based on the stock price prevailingon March 31, 2017, which is indexed at 100%.

1,326

35〜39

597
311

791

42
1,046

30〜34
25〜29

Fiscal 2018 Fiscal 2019 Fiscal 2020 Fiscal 2021 Fiscal 2022

706

612

1,563

〜24
(Age)

649
Management positions (male)Management positions (female)

0

0

0

0

932
451

46
10

*1 The Company executed a stock split, with each share of common
stock split into three shares, effective April 1, 2020. Figures
before fiscal 2020 are presented assuming this stock split was
conducted.
*2 The figures include the TIS INTEC Group’s seven principal
companies (TIS, INTEC, AGREX, QUALICA, AJS, TIS System
Service, and TIS Solution Link).
*3 Figures for fiscal 2018, fiscal 2019, fiscal 2020, fiscal 2021, andfiscal 2022 are based respectively on April 1, 2018; April 1, 2019;
April 1, 2020; April 1, 2021, and March 31, 2022.
*4 The figures include TIS, INTEC, AGREX, QUALICA, AJS,
SorunPure, Chuo System, TIS System Service, TIS Solution Link,
TIS Tohoku, TIS Total Service, TIS Nagano, TIS West Japan, TIS
Hokkaido and NEOAXIS. Both Chuo System and NEOAXIS havebeen excluded for 2022.

General positions (male)
General positions (female)

10

Corporate Information/Data

226,298 234,408

63.3
247,957

Dividends per Share*1, Payout Ratio,
Total Return Ratio (Yen, %)Dividends per Share (annual)
Payout Ratio
Total Return Ratio

Platform for Value Creation

Total Assets, Net Assets, Equity Ratio

Growth Strategy for Value Creation

219,225

Free Cash Flow

Top Message

Yasushi Okamoto, president and representative director of TIS, looks back on the year since he assumed his current
role and offers his perspective on Group concepts, progress on the medium-term management plan and the image theGroup seeks to portray.

Looking back on fiscal 2022

1112

Corporate Information/Data

At any opportunity for dialogue, my message always leans
toward sustainability management, hinging on Group

Platform for Value Creation

We will create new value with all who share our value
perspective.

Growth Strategy for Value Creation

OUR PHILOSOPHY
Underpinning value exchange

TIS INTEC Group Value Creation

Yasushi Okamoto, President

In regard to fiscal 2022 accomplishments, I believe wedelivered definitively on both profitability and growthinvestment fronts, substantiated by record-high results even as
we pursued robust growth investment. Against this backdrop,
what really stands out for me as I reflect on the past year as
the new president at TIS is the weight of social responsibility
carried by the TIS INTEC Group.
In recent years, addressing social issues through corporate
activities has been recognized as a key factor in building asustainable society, but trying to solve social issues alone asjust one company—or corporate group—is challenging andhas limitations. However, co-creation, where all partners work
together to create new value, offers tremendous potential.
Over the past year, I myself have endeavored to expand project
participation in pursuing solutions to social issues throughwhat I call “buddy power.” I conveyed the concept to various
clients and all business partners and repeatedly engaged in
discussions that would enable the Group to fully demonstrate
the power of IT, which is indispensable to solutions for today’ssocial issues.
In speaking with many top executives, I was acutely
reminded of the obvious—society is connected, and everyone
has an impact on everyone else. IT exists as a social
infrastructure supporting all sorts of social connections, andthe TIS INTEC Group has a responsibility beyond the mere saleof products and services to play a role that addresses thedemands of society. For example, the spread of cashless
payment options has improved convenience for both sellers
and purchasers. Similarly, if a system we have provided were
to fail, the situation would have major consequences not only
for the client company we serve but also for the people who
use the service that the client company provides. This is not
something new to me, but I am reminded now of theextremely huge impact Group activities can have on society
and businesses worldwide, since they affect the businesses ofour clients and extend even further to the customers of ourclients, and I feel the weight of this responsibility.

Top Message

I feel the weight of social responsibility carried by the
TIS INTEC Group.

concepts, particularly OUR PHILOSOPHY. This basic philosophy
highlights our mission “To brightly color the future as a mover
utilizing digital technology.” It permeates our raison d’être asa corporate group offering ways to address various social
issues through digital technology and underlines the role weplay in society. OUR PHILOSOPHY also plays into our definitionof growth on a groupwide basis, that is, greater progress
toward realization of our mission and improving the quality ofvalue exchange with all stakeholders. Value exchange, as anintegral component of future growth, is a firmly entrenched
concept within the TIS INTEC Group.
Simply put, we work for the public good—for society andfor people—and from our perspective, this creates both
economic and social value. We build teams of people whoshare this perception of value, exchange value to provide
society with new value, and then take an appropriate return.
We utilize the returns to provide society with new value again.
OUR PHILOSOPHY is very similar to the principle of sanpo
yoshi, literally “three-way satisfaction,” practiced by Omi
Shonin, a group of traveling merchants active during the Edoand Meiji periods of Japan. Omi Shonin were models of good
corporate citizenship, guided by sanpo yoshi, wherein business
transactions provided benefits to the buyer, the seller andsociety at large—the three ways. Conversely, co-creation is notpossible with people who do not subscribe to the same values,
no matter how much potential may exist to reap highrevenues in the short term. This applies to cooperation withcompanies not only in Japan but overseas as well. In recent
years, efforts to reinforce the Group’s partnership structure
have hinged on ASEAN-based companies with formidable
weapons in their corporate arsenals. But a priority has beenplaced on companies that understand and accept OUR
PHILOSOPHY.
Like the 17 Sustainable Development Goals (SDGs), social
issues are diverse and complex, and the social responsibility weare obliged to fulfill in providing solutions to these issues isonerous. As daunting as this may be, we have no choice but
to accept the challenge. With this in mind, we have prioritized
four social issues—financial inclusion, health concerns, urban
concentration/rural decline and low-carbon/decarbonizedsociety—that TIS and the TIS INTEC Group have thewherewithal to successfully address, and we aim to ameliorate
associated issues through the power of IT, a composite
capability. We will continually engage in dialogue with people
who share our perception of value, guided by common views
to find solutions, and we will actively consider how to bestdeliver value to society and facilitate co-creation withstakeholders, and always be dynamic in our approach.

Introduction

As a corporate group active in thought and deed, the TIS INTEC Group willcontribute to the realization of a sustainable society.

All employees, actively engaged—that’s the picture of anenhanced frontline.

*1 Medium-Term Management Plan (2021–2023) is described on page 28.

We will create a management structure matched tobusiness models and clarify responsibility and authority.

Improve value provided through DX

We have tremendous strength in payment services
business.

I believe transformation into a
company that leads in solutions tosocial issues is paramount.

13

Prioritizing activities to solve social issues through businesspursuits, we have set sales of ¥50 billion from social issue
solution services as a key performance indicator (KPI) under
the current medium-term management plan and are working

A business exists because of people, and employees are
the most valuable management resource.
We have earmarked a total of about ¥100 billion for growthinvestment during the three years of the current medium-term
management plan, with ¥30 billion to be used to enhancein-house capabilities, namely software investment to create
new services, human resources investment to leverage
structural transformation, and R&D investment to obtainleading-edge technologies, and ¥70 billion to capitalize on
M&A opportunities. Of these allocations, investment in humanresources is the most crucial because our people are thesource of new corporate value. As I mentioned above,
employees are an important stakeholder group for us—the TIS
INTEC Group as a whole—and we encourage value exchange
between employees and their respective companies while

14

Corporate Information/Data

We will undertake activities with future society in mind.

Growth investment

Platform for Value Creation

An important theme in the current medium-term management
plan is to improve the value provided through DX. One type of
DX support offered in the Group’s business portfolio is service-

Growth Strategy for Value Creation*2 Go to page 53 for details on revision of the Group business portfolio (Group
companies and businesses belonging to each reporting segment).

steadily to achieve this target. Payment services are the driving
force of our efforts in this domain, but business pursuits are
not limited to PAYCIERGE. We also emphasize financial
inclusion, conscious of the need to create businesses thatcombine payment services with healthcare, mobility andservices that should be accessible to everyone. We are also
promoting a new decarbonization solution under the brandname Carbony to support realization of a low-carbon/
decarbonized society. On the topic of local government–oriented DX as a contributing factor of regional renaissance,
efforts center on INTEC since the company has particularexpertise in this area. On the issue of health concerns, TIS
offers Healthcare Passport, a solution that supports
coordinated medical care and health information collection
from patients, hospitals, clinics, pharmacies and otherfacilities. The pandemic had some short-term consequences,including a reduction in visits to medical care providers, butfrom the perspective of living longer in good health, whichtranslates into a more vibrant society, the healthcare passport
is an important solution with considerable social significance.
We will thus take the time needed to successfully pursue
opportunities in HealthTech.
Though not included in our social issue solution services
right now, robotics is an area of interest given looming
concerns of a reduced workforce in Japan in the future. We
have been engaged in robotics R&D for several years already,but our role is not to develop robots but to integrate multiple
robots into an IT environment in workplaces and in homes.
Before the robotics business can expand, certain conditions
must be met, including the establishment of laws that allow
driverless delivery robots to self-navigate on public roads aswell as more buildings and whole cities becoming smart.
Nevertheless, upon reflection, it took about 50 years andco-creation activities by many people to get a suite of payment
services up and running. HealthTech and robotics will definitely
have important functions in society in the future. First, we getstarted and build up a circle of peers—buddies, if you will—
while tenaciously engaging in trial and error with a sense ofownership. I am confident that in 10–20 years, these efforts
will yield major success.

TIS INTEC Group Value Creation

As part of efforts to promote structural transformation andgrowth strategies, we introduced a new management
structure in fiscal 2023, aligned to the reality of Group
company business models, and accordingly reorganized
operations into five reporting segments: Offering Services
Business, Business Process Management (BPM), Financial IT
Business, Industrial IT Business and Regional IT Solutions.
Given that many Group companies had been scattered acrossmultiple business segments, the revised segment structure
makes trends in each segment easier to understand. In
addition, employees have a more precise understanding of
the segment to which their respective company belongs andtheir contribution to overall results. Under the new segment
structure, segment owners have been assigned with authority,
and responsibilities have been clearly allocated. I believe
appropriate delegation of authority encourages developmentof the next generation who will carry the management torchand enables a company to achieve sustainable growth. Under
the new management structure, we will accelerate growth ineach segment by promoting dynamic activities based on
independence and autonomy.

style businesses. Behind the development of service-stylebusinesses were such issues as diversifying needs amongclients executing their own business activities as well as the
speed of changes affecting approaches to business,
intensifying competition and globalization. There is now an
overwhelming need for speed in building the requisite
systems. In particular, the service-style business of payment
services—a forte field for us—differs from highly versatilebusiness processing and emphasizes delivery of mission criticalsystems, which are quite simply what give clients theircompetitive edge. It is therefore essential that we augment
standard services with value-added elements that enableclients to distinguish their businesses from competitors. In thepayment services business, we support clients over the longterm, and the services offered are made possible precisely
because the TIS INTEC Group has the necessary development
technology and accumulated IT-building expertise to deliver
exactly what each client needs.
You know, I began pushing for service-style businesses in2018 as the director responsible for building a structure topromote services. The TIS INTEC Group has amassed
technological capabilities and know-how over many years, andas long as we can successfully anticipate market needs, we willcertainly be able to expand service-style businesses. Alongwith perceived potential, however, came some trepidation. I
wondered, do we really have the ability to demonstrate thenecessary dynamic, and are we properly prepared for whateverhardships and difficulties we might encounter? Four years
have passed since then, and obviously, my concerns wereunfounded. Employees know the importance of an
independent and autonomous attitude, and they adapted on
their own to the prevailing situation. Today, I see employees
who are excited about their work.
A payment service of particular note is PAYCIERGE, asolution that provides the framework for highly convenient,worry-free purchasing for all users in various settings where
payment for goods or services is required. PAYCIERGE is being
pushed as a total payment solution brand. We are alreadyseeing a brisk uptick in interest among financial institutions for
DebitSaaS and PrepaidSaaS, but we aim to go further. Looking
to get involved in embedded finance, we are keen to expand
business potential by bringing more companies underconsolidation, including the most recent addition, ULTRA, Inc.,an international-brand prepaid payment servicer. We are also
making steady progress toward the launch of CreditSaaS,
which we aim to position as a pillar of revenue. Goingforward, we will continue to emphasize robust investment in
the domestic payment services business, of course, but also
strive to establish a more tangible presence in Southeast Asia
on the assumption that the TIS INTEC Group will never give up
No.1 status in this business domain.

Top Message

Group Vision 2026 defines the image that TIS wants theGroup to project under the concept “Create Exciting Future,”
and guided by this vision, the Group will utilize advanced
technologies and know-how to realize business innovationand market creation. The current medium-term management
plan is the second step of our journey toward Group Vision
2026. On the theme of improving the value provided in digitaltransformation (DX) services, we will sharpen our ability toaddress social issues by promoting efforts to enhance frontline
capabilities and by pursuing further structural transformation.
Quantitatively, the TIS INTEC Group is making solid strides
toward numerical targets, including net sales of ¥500 billion
and an operating margin of 11.6% by fiscal 2024, thanks tohard-working employees and favorable market conditions
driven by rising demand for DX.
From a qualitative angle, I have emphasized an enhanced
frontline since assuming my current position. The term“enhanced frontline” may evoke the idea of stronger clientoriented marketing and planning capabilities. Of course,
improved consulting capabilities to better realize clients’ DX
requirements is an important theme. But the enhanced
frontline I imagine targets all stakeholders. All employees anddirectors, myself included, must actively consider how best to
disclose information to shareholders and investors in a timely
and appropriate manner, explore value creation more deeply
with business partners, and motivate employees, who are asimportant as any other stakeholder group, and then act ondecisions. I am proud of the many extremely hard-working,highly skilled employees under the Group umbrella. But for along time, contract-based business was the mainstream forsystem integrators, and while they had the technical skills,
they tended to be reactive rather than proactive. If, through anenhanced frontline, the Group as a whole transforms
structurally into a dynamic collection of companies with anawareness of independence and autonomy, I am confident
that the Group can provide higher value to society.
Change requires power as well as time, but without
action, change will not happen. If we remain laid-back intoday’s good times and put off change, will we fall behind thepack in 10 or 20 years? If we resist change and end up as acorporate group that lacks the ability to think, we run the riskof seeing our reputation for providing value steadily decline in
the market’s eyes. The agent of change is not a single person
but rather the sum total of all employees, including me.
Encouraging change is my mission—my biggest challenge—
and I will continue to roll out the discussion caravan to convey
my vision of the Group’s future to employees. I feel a change
in employee awareness and continual progress in structuraltransformation will yield excellent results.

Introduction

Progress on medium-term management planP.17 Growth Trajectory
P.19 Value Creation Process
P.21 Sources of Value Creation andCompetitive Advantage

Growth Strategy for Value Creation

P.23 Sustainability
P.25 Materiality
P.27 Stakeholder Dialogue

Platform for Value Creation

I have said this repeatedly: Be active in thought and deed,
driven by a spirit of independence and autonomy. I take thesewords to heart as well. My role as president is to consider
long-term strategies and to develop the next generation ofmanagement. The underlying mission in OUR PHILOSOPHY isto color the future as a mover using digital technology, andto fulfill this mission, it is my duty to reflect on the TIS INTECGroup’s position in society while promoting business strategies

TIS INTEC Group Value Creation

TIS INTEC Group Value Creation

I want to see a happy society and will roll up my sleeves
and work diligently alongside employees to achieve this.

Top Message

To our stakeholders

and eventually passing the executive baton to the leaders ofa future TIS INTEC Group.
I quite like the Japanese saying Kai yori hajimeyo, whichtranslates roughly as “Lead by example,” and I apply it tomyself. I do not believe a president should merely give orders
from above but rather work right alongside employees,
because the down-in-the-trenches effort reinforces teambuilding and motivates employees. If decisions are made as acompany, based on thorough discussion and examination, andthere is psychological security in knowing that the president
takes final responsibility for these decisions, then employees
do not fear failure and are more inclined to embracechallenges with greater enthusiasm. Depending on thechallenge, progress on an individual basis may be only one
step, but with some 20,000 employees groupwide, that
equates to 20,000 small steps, which will invariably lead tosignificant results.
The other day, at an information meeting for individual
investors, I was asked, “How would you rate your first year aspresident?” I answered “60,” a passing grade, given favorable
progress in numerical performance. It is an honest, personalassessment. The operating environment as well as
circumstances surrounding the TIS INTEC Group haveundergone changes at a dizzying pace, and as long as we arealways looking to take business to a higher level, we will nevereliminate issues to address. That said, the businessenvironment in which we can thrive is growing, expanding
beyond domestic borders to markets overseas. Consequently,
change is a constant companion. With that in mind, I will
never reach a perfect score of 100, but I will strive to get as
close as possible, taking the initiative, along with employees,
to demonstrate our strengths as a systems integrator andcement our position as a company and by extension a
corporate group that is perpetually involved in finding
solutions to social issues and thereby contribute to therealization of a happy society. Going forward, I will emphasizeenhanced value exchange among all stakeholders to help build
a sustainable society and to achieve sustainable improvement
in corporate value. The support and cooperation of all
stakeholders will be even more essential as we strive to reachthese goals.

Introduction

working to realize a virtuous cycle where investment in humanresources promotes growth and development of humanresources, which then leads to higher added value for theGroup.
More to the point, companies provide three types ofvalue. There is value in working for a company, highlighted
through one-on-one conversations and greater engagement,in establishing an environment where employees can fully
demonstrate their skills and achieve results, and in offering
appropriate compensation consistent with performance. In
fiscal 2022, TIS set up the Human Resource Business Partner(HRBP) Office in the Human Resources SBU and assigned
HRBPs to operating divisions. This has enabled the Company
to quickly identify diverse human resource requirements to
execute business activities and promotes speedy responses
through mutual collaboration. Until I became president, I was
involved in interviewing candidates for employment, andcomparing then and now, I feel that young people today arelooking beyond economic value and are very conscious ofsocial impact. That is, they want to be of service to society.
Because companies provide all employees, not just young
people, with a work environment that is free and open andpromotes job satisfaction, we must realize that what we dogoes beyond helping the clients whom we serve directly as weconnect with and contribute to society through these clients,
and we have to apply this concept in our daily businessactivities. This approach will turn into a Group asset and ahuge driver of enhanced corporate value.

Group Management Direction for Fiscal 2023
1. Leverage long-term growth strategy for corporate value and value provided to society through sustainability management
2. Accelerate improvement of added value through enhanced DX organizational capacity and investment
3. Promote business restructuring and measures to improve medium- to long-term asset and capital efficiency

Corporate Information/Data

4. Leverage growth strategy designed to become top-class IT group in ASEAN region, and strengthen governance position
5. Ratchet up investment into human resources to sharpen skills and promote diversity

15

16

Growth Trajectory
Using advanced technologies and know-how accumulated over many years, we seek to create a vibrant, new society and,working alongside our clients, exceed society’s expectations and contribute to a happier world.

October 2020

Announced “Group Vision 2026”, theoverall picture of the Group in 2026.

MFEC Public Company Limited(Thailand) under consolidation.

April 2011
December 2009SORUN Corporation joined the
ITHD Group.

ITHD orchestrated a threecompany merger involving TIS,SORUN and UFIT Co., Ltd., with
TIS as the surviving company.

March 2015

ITHD turned AGREX Inc. into a
100% consolidated subsidiary.

Top Message

INTEC listed on the First
Section of the Tokyo Stock
Exchange.

IT HOLDINGS established throughmanagement integration

Toyama Computer Center, Inc.
(now, INTEC) established.
Began its business at the former
Kitanihon Hoso building.

＾..n ・••"'し• '..よ ,.' .
．．

m .

●渭

旱

I

• •,·

Group
Vision¥695.5TIS listed on the First Section of theTokyo Stock Exchange.

¥369.5
Toyo Information Systems, Co., Ltd.
(now, TIS) established.
Began software development services
in Osaka.

Turned Komatsu Soft Ltd. (now, QUALICA Inc.) into
subsidiary.

February 2002

billion¥192.5billionChanges in total
market value¥84.9

Turned Asahi Kasei Information Systems Co., Ltd.
(now, AJS Inc.) into subsidiary.

12.5%〜13.0%

11.6%

11.3%

Total market value
Net sales

11.4%¥161.9billion*Operating margin¥500.0 billion

10.2%
8.1%

ROE

¥500.0 billion

Spread of newcoronavirus infection ¥482.5 billion¥448.3 billion

7.4%
Abenomics

7.0%

6.0%

Lehmanshock

1.5%¥405.6 billion

5.9%

4.8%

Turned UFIT Co., Ltd., into subsidiary.

April 2005

10.8%

12.9%

9.9%

billionTurned AGREX Inc. into subsidiary.

April 2004

billionGrowth Strategy for Value Creation

April 2000

2026

14.0%

1991

TIS INTEC Group Value Creation

April 1971

Introduction

1986

May 2017

July 2016

April 2008
January
1964

Transition to TIS INTEC Group
under operating holding
company structure

Both TIS and INTEC have been leaders in Japan’s information services industry from the very
beginning, with business growing as each company supported the evolution of an informationdriven society. In April 2008, the two like-minded companies and their respective corporate groups
came together through management integration to form a leading, independent organization.
In July 2016, the corporate group transitioned to an operating holding company structure and,through quick work to unify Group management, strives to deepen the value it provides tosociety. The TIS INTEC Group will continue to grow, guided by an enduring wish and mission tobuild a better society through digital technology, while embracing challenges to contribute to therealization of a sustainable society and sustainable improvement in corporate value.

¥361.0 billion
Platform for Value Creation¥338.3 billion¥327.4 billion*Calculated by closing price on April 1, 2008.

Fiscal
2009

Fiscal
2012

Fiscal2015

Fiscal2018

Fiscal2021

Fiscal2022

Fiscal2023

Fiscal2024(estimates) (Medium-Term
Management Plan)

Mainframe computer/Internet

17

First Medium-Term
Management Plan

Second Medium-Term
Management Plan

Third Medium-Term
Management Plan

Medium-Term Management
Plan (2018–2020)

Medium-Term Management
Plan (2021–2023)

Medium-Term Management
Plan (2024–2026)

Emphasizing independenceGreater sense of unity

Pursue portfolio management

Lay foundation for structuraltransformation

Structural transformation by
improving value provided
in DX services

Accelerate measures to realize
Group Vision 2026

Cloud computing

Corporate Information/Data

Period ofestablishment

DX (AI, robotics, IoT, big data, Fintech, etc.)18

Value Creation Process
We will balance efforts to realize a sustainable society with efforts to achieve sustainable improvement in corporate value
by leveraging unified Group management.

TIS INTEC Group Philosophy OUR PHILOSOPHY

Mission: To brightly color the future as a mover

P.2

VisionGroup Vision 2026
(2026 Corporate ideal) “Create Exciting Future”

Utilizing leading-edge technology and know-how torealize business innovation and market creation

P.30

P.21

P. 25

Medium-Term Management Plan (2021–2023)

Be a Digital Mover 2023 P.32

Create a society in which
diverse human resources areengaged and thrive
Providing optimum, one-stop support across client system
lifecycles and all types of IT-related services

Create a comfortable society
through innovation and joint
activities
Manufacturing CapitalSocial & Related Capital

Systemintegration
services

Outsourcing
services
Contractdevelopment style
Provide systems matched
to client requirements

Create a safe society
through high-quality
services

IT platform
configuration
services

Research
into and accessto leading-edge
technology

Shareholders and Investors

P.56

Sustainable improvement in shareholder value
and return to shareholders
Highly transparent disclosure
Engaging in constructive dialogue

Financial IT
Business

P.57

Industrial IT
Business

Improve value
exchange throughstakeholder
engagementE

S G

Business Partners

Regional IT
SolutionsSocialGovernanceContribute todecarbonized society
and recycling society

Sustainableimprovement instakeholder
engagement

Constantly strive forgovernance that
promotes higher levelof trust from society

E S G

P.85

Provide the best services
Plan/propose new application formats for IT
Lead/support realization of vision and strategies

P.58

Environment

P.81

Clients

Create new added-value
Fair, transparent, open competition andappropriate business practices
Responsible procurement

P.61

Help solve social
issues throughuse of digitaltechnology

Employees
Provide opportunities for growth and personal
development
Provide environment that is safe and comfortable
Promote diversity

Corporate Information/DataIntellectual Capital¥Social value

P.59

Enhance corporate
governance and earn thetrust of society

482.5 billion
Operating income ¥ 54.7 billion
ROE
14.0 %Net sales

BPM

Platform that supports value creation of the Group

P.29

19

Serviceoffering style
Provide services that
anticipate client needs

P.55

Secure growth
opportunities
fueled by trustand fulfilling
expectations

Platform for Value Creation

Natural Capital

Consulting
services

Offering Service
Business

Economic value (Fiscal 2022)

Growth Strategy for Value Creation

Changes in the external environment

TIS INTEC Group Business Activities

Human Capital

Value provided to societyManagement strategies/measures for sustainable growth

TIS INTEC Group Value Creation

Financial Capital

Materiality

Top Message

Management
Resources

Introduction

Management
Philosophy

Community / Society
Provide systems that support a high-level­information society
Living life feeling safe and secure
Reduce environmental impact

20

Sources of Value Creation and Competitive Advantage

Financial Capital¥302.9 billion
61.5%
A / Positive¥100 billion (3 years)

A
A
A
A

Number of employees (consolidated)
Percentage of female employees inmanagement positions
Number of days spent on learningand research per person
Results of employee awarenesssurveys*1

21,709

A

10.3%

C

13.3 days

C

51%

C

Business sites throughout Japan
Overseas sites centered in ASEAN

About 160 sites
10 countries

Number of clientsResults of client satisfaction survey*2
Number of business partners
Results of business partner
satisfaction survey*3
Linkage with startups(CVC investees)

Approx. 15,000 companies
71.7%
About 540 companies

Energy consumption (electricity)

139,560 MWh	Stable financial base	Strong profitability andcapital efficiency

	Diverse human resources
engaged as movers
	Sustainable engagement

Initiatives to Maintain and Strengthen Capital
Promoting structural transformation of business bystrengthening investment / Promoting capital optimization /Reducing cross-shareholdings
Please refer to “Executive Vice President’s Message 2(Financial Investment Strategy)” on page 49.

Strengthening Engagement / Promoting Diversity andInclusion / Supporting Advancement of Diverse Human
Resources / Health Management / Workstyle Reform /Strategic Inclusion in Training and Education

TIS INTEC Group Value Creation

Net assets
Equity ratio
Credit rating
Investments in growth

Features

Top Message

Human Capital

Scope of
Aggregation

InputsManagement Capital

Introduction

The capital that the TIS INTEC Group has developed over the years is an indispensable element for sustainable corporate
value growth and a source of value creation. We aim to create further value through the enhancement and effective
utilization of this capital.

Please refer to “With Employees” on page 85.

Manufacturing Capital

Domestic
D
D

81%

D

43 companies

D	Stable business promotion
through a strong relationshipof trust

Development of high-quality services that respond toenvironmental changes and client needs

Growth Strategy for Value Creation

Social & Related Capital	Outsourcing sites based on
business continuity

Strengthening customer relationships and satisfaction bycapturing a wide range of customer requirements andleveraging them in development and service provision
Please refer to “With Clients and Business Partners”on page 87.

Natural Capital

Figures are as of March 31, 2022.
*1	Percentage of respondents answering positively to the question “Overall, this company is a good place to work” in theemployee awareness survey.
*2 	Percentage of respondents who answered we were “an irreplaceable business partner” in the client satisfaction survey.
*3 	Percentage of respondents who answered “satisfied with our business and relationship” in the business partner
satisfaction survey.

21

	Strong technological capability
	Abundant experience andknow-how	Dedication to improving quality,
productivity, and technology

Please refer to “For the Global Environment” on page 81.

Sharing of development know-how and technical issues /Tech Lead Team activities / Brand maintenance andenhancement

Corporate Information/Data

Extensive service menu
About 500
(aggregate number of solutions)Group awareness63%(among business people)
Original quality management system
Trinity

Promotion of renewable energy use / data center
consolidation

Platform for Value Creation

Intellectual CapitalB	High energy efficiency throughenvironmentally friendly
data centers

Scope of data collection
A. TIS INTEC Group consolidated
B. TIS, INTEC, AGREX, QUALICA, AJS, SorunPure, TIS System Service, TIS Solution Link, TIS Tohoku, TIS Total Service, TIS Nagano, TIS West Japan, and TIS Hokkaido
C. TIS, INTEC, AGREX, QUALICA, AJS, TIS System Service, and TIS Solution Link
D. TIS parent

22

Sustainability

Resolving social issues through business activities

TIS INTEC Group will reinforce its commitment to corporate social responsibility through its contribution to
the sustainable development of society by resolving social issues through its business, and will further
strengthen its corporate sustainability initiatives.

We will expand our services to create both economic and social value based on business opportunities andrisks from global initiatives to realize a sustainable society and enhance corporate sustainability.

Achieving sustainability

TIS INTEC Group Philosophy: OUR PHILOSOPHY

Basic Policy on Corporate Sustainability

Markets

Global initiatives
Climate change/human rights/diversity & inclusion, etc.

Expansion of business/
capturing opportunities

Dialogue

Risks of notengaging

Fostering sound markets

Achieving asustainable
society

Promoting a healthy society

Service

Social impact

Trust

Top Message

Mission: To brightly color the future as a mover

Introduction

Seeking to deepen sustainability management

Sustainableearnings

Materiality (Priority issues)
1. Create a society in which diverse human resources are engaged and thrive 2. Create a comfortable society through innovation and joint activities

Enhanced management geared to social demands

Fiscal 2024

Formulate interim
targets andstrategy

Promotecontrol andmotivation

Demonstrateperformance toachieve goals

Improve value exchangewith stakeholdersn Contribute to recycling societyn Achieve sustainable improvement in stakeholder engagementn Constantly pursue governance that elicits higher level of trust from societyn Low-carbon/decarbonized society n Health concerns

Contribute to sustainable society

Sustainable improvement in corporate value

New social issues
and target
proposals

Equipping Management to Address Social Needs
Our Group is taking various measures to better equip management to focus on ESG to efficiently manage both financial and­non-financial capital and maximize earnings and the provision of value to society in a sustainable manner.
g Perspectives currently in focusn Data-driven managementg Changes in the Group’s sustainability promotion activities

2018–2020: Laying solid foundations

Expansion to the Group value chainn Fostering the means to resolve social issuesn Strengthening co-creation with Group
companiesn Strengthening co-creation with the
supply chain

2024–: Further development
Establishing a presence as asustainability leadern Creating businesses that balance
economic and social value

Endorsed Initiatives
The Group participates in various initiatives aimed at promoting sustainability.

Please visit the following page for details of other initiatives in which the Group collaborates:
https://www.tis.com/group/sustainability/initiatives/23

24

Corporate Information/Data

Notably, the Group signed on to the U.N. Global Compact and was registered as aparticipant as of July 19, 2018.
Acting in accordance with the 10 principles in the four areas of human rights, labor,
the environment, and anti-corruption set forth in the Compact, we encourage every
employee to get involved in fulfilling our corporate social responsibilities and promote
activities that support sustainable social development.

Platform for Value Creation

Building a platformn Studying the value creation processn Setting materialityn Organizing policies & regulations

2021–2023: Growth

We have established a quantitative management system for non-financial information as well as financial capital to ensure that all capital
held by the Group is efficiently linked to earnings. KPIs for non-financial indicators have been introduced into the Group’s organizational
assessments to strengthen the motivation to promote ESG.
n Climate change
Recently, climate change has been having a profound impact on the business environment. As climate change mitigation and adaptation willchange the way society needs to do business, our Group is promoting activities to enhance the sustainability of our business and society byanalyzing and appropriately responding to the risks and opportunities for the Group.
n Human capitalIn our business model, we recognize human resources as our most important capital, and we are actively investing in talent to support each
employee’s new challenges to facilitate business innovation and market creation. We also began to build the capacity of our partnercompanies, starting with the expansion of health management activities.
n Human rights
The Group is always conscious of whether its corporate activities are having a negative impact on its stakeholders, and aims to conduct
corporate activities in such a way as to promote wellbeing among as many people as possible. To this end, we conduct human rights due
diligence in line with the United Nations Guiding Principles on Business and Human Rights, envisage the impact of the Group’s businessactivities on stakeholders, and endeavor to remedy any potentially negative impacts.
n Contributions to local communities
We aim to create a society in which many people can enjoy the benefits of digital technology by helping those who do not have access todigital technology due to geographical or economic reasons or a lack of education.

Growth Strategy for Value Creationn Financial inclusion n Urban concentration/rural decline

Fiscal 2023

4. Enhance corporate governance and earn the trust of society

Select long-term
issues and businessthemesAddress social issues through business activities
Social issues where TIS INTEC Group can contribute

Fiscal 2022

TIS INTEC Group Value Creation

3. Create a safe society through high-quality services

Resolving social issues through the Group’s business activities

Materiality

g Identifying materiality

Supervision

Board of Directors (Directors)
Discussion, reports
Planning, execution

President
Reports

Corporate Sustainability Committee

3. Create a safe society through high-quality services
g. Continuous quality improvementh. Information securityi. Safeguard personal information

Discussion within the GroupTap experts
to verify
appropriatenessdiverse human resources
are engaged and thrive

2. Create a comfortablesociety through innovationand joint activities

3. Create a safe society

through high-quality
services

4. Enhance corporate

governance and earn thetrust of society

Consider resetting pointsof materiality

Stakeholder dialogue

Importance of Materiality Assessment
Promote safe, convenient social foundation that supports people and society

References: Relationship with SDGs

Safeguard personal information
Information security
Continuous quality improvement
Connect with stakeholders and promote joint activities
Promote workstyle reforms
Reduce environmental impact

Promote diversity
Compliance

Human resource development andtraining emphasizing self-fulfillment

Platform for Value Creation

2. Create a comfortable society through innovation andjoint activitiesd. Promote safe, convenient social foundation that supports
people and societye. Connect with stakeholders and promote joint activities
f. Reduce environmental impact

Assess importance to theGroup

Importance to stakeholders

1.	Create a society in which diverse human resources areengaged and thrivea. Promote diversity
b. Promote workstyle reformsc. Human resource development and training emphasizing
self-fulfillment

Guidelines(such as SDGs, GRI,
ISO 26000, etc.)

Assess importance to stakeholders

Growth Strategy for Value Creation

To strengthen measures for corporate sustainability, TIS identified materiality as a key issue for the Group in fiscal 2019, andclarified priority themes where efforts would be focused, considering stakeholders’ expectations of us, our impact on society, and
the Group’s strength.
The Group will promote materiality measures and contribute to the solution of social issues and achievements of the related
United Nations’ Sustainable Development Goals (SDGs) through our corporate and business activities.

We determined materiality
through discussions and decisions
by the Corporate Sustainability
Committee and the Board of
Directors.

1. Create a society in whichSocial issues

The Group’s
basic philosophy,
strategies

g Materiality (key issues) for the TIS INTEC Group

Materiality

We verified the appropriatenessof issues recognized andimportance assessed throughstakeholder dialogue.

TIS INTEC Group Value Creation

Divisions, departments, group companies

We assessed importance from astakeholder perspective, that is,
expectations of and impact on, as
well as from a Group perspective,
notably, the effect on the Group
itself and its growth prospects.

Top Message

Deliberation, reports

We recognized issues by looking
at the kind of initiatives we should
apply to various guidelines andsocial issues, given the Group’s
basic philosophy and strategies.

Materiality identified

Materiality

Direction, supervision

EvaluateappropriatenessMateriality matrix

Chairperson, Corporate Sustainability Officer (Director in chargeof Sustainability), Corporate Sustainability Promotion Officer,
corporate sustainability department heads, full-time directors,
full-time Audit & Supervisory Board members, managers of major relevant divisions, presidents of key operating companies

Assess priority and categorize/consolidate

Recognize issues

IssuesWe have established a management structure centered on
the Corporate Sustainability Committee, which is chairedby the President, to promote corporate sustainability
activities throughout the Group.
In the operation of the Committee, the Head ofCorporate Sustainability is responsible for oversight of theGroup’s corporate sustainability activities, while the Headof Corporate Sustainability Promotion is responsible for
their execution.
The Committee is responsible for planning andpromoting the Group’s sustainability activities andmateriality (human resource management, stakeholder
engagement, environmental conservation, human rights,
quality management, corporate governance and related
issues). The Corporate Communications Office wasestablished to serve as the secretariat to ensure smooth
operation.

Introduction

g Sustainability promotion system

Risk management
Corporate governanceImportance to TIS INTEC Group

Please visit the following page for details of our activities related to materiality:
https://www.tis.com/group/sustainability/materiality/

25

g Sustainable Development Goals

Corporate Information/Data

4. Enhance corporate governance and earn the trust ofsocietyj. Corporate governancek. Compliancel. Risk management

These international goals, running from 2016 to 2030, are described in the 2030 Agenda
for Sustainable Development, adopted at the U.N. Summit in September 2015. The agenda
comprises 17 goals and 169 targets aimed at putting the world on a sustainable path andpledges that no one will be left behind. To achieve these objectives, companies are expectedto participate as vital partners, contributing to the SDGs through their respective corebusinesses.

26

Stakeholder Dialogue

Introduction

The Group considers dialogue with stakeholders to be an important opportunity, and holds regular meetings between external experts and its managers. In addition to communicating the Group’s initiatives, wewill reflect objective opinions and new insights received from different perspectives in our corporate
activities, aiming to create a virtuous cycle that leads to higher quality initiatives.
g Overview of stakeholder dialogue

Top Message

Theme: Progress of Sustainability Initiatives
Date: Thursday, June 16, 2022
Attendees: [External experts] Arisa Kishigami (ESG specialist)[TIS Inc.] Masakazu Kawamura, Executive Officer, Division Manager of Corporate Planning		SBU/Corporate Sustainability Promotion Officer
		Reiko Oka, Executive Officer, Deputy Division Manager of Corporate Planning
SBU, and Department Manager, Corporate Planning Dept.
Profile of Ms. Kishigami
Ms. Kishigami joined FTSE Russell in 2007 and became Head of ESG for the Asia-Pacific region of FTSE Russell in 2015, where she
promoted ESG-conscious corporate and investment behavior in the region. Since becoming independent in April 2019, she has
engaged in activities aimed at establishing a virtuous circle between investment and business activities for a sustainable society.

TIS INTEC Group Value Creation

Growth Strategy for Value Creation
P.29 Taking Long-Term Perspective on Target Trajectory
P.31 Looking Back on Past Medium-Term Management Plans
P.32 Outline of Medium-Term Management Plan
(2021–2023)

P.41 Executive Vice President’s Message 1 (Business Strategy)
P.45 Special Feature Roundtable Discussion:
TIS INTEC Group’s Human Resources Strategy x BusinessP.49 Executive Vice President’s Message 2(Financial Investment Strategy)* Please visit the following page to read the entire dialogue:
https://www.tis.com/group/sustainability/stakeholder/dialogue2022/index.html

P53 Business Strategies by Segment

Corporate Information/Datathat we lacked the perspective of society as a whole, including
negative factors that could impact users and consumers. I also
felt the need to be attentive so that our services would not be
used in unintended ways. Through this dialogue, I’ve learned
the importance of disseminating information in a broad anddeep way.
Oka: Another challenge is that the value of our services
depends on the digital literacy of users, so the results are notequally beneficial. For example, those who are not good atmanaging passwords may abandon or risk losing our services.
I felt the need to reevaluate areas that we have taken for
granted.

Platform for Value Creation

Kishigami: Providing access to our financial system is asocial issue. To increase the number of people with suchaccess, the Group actively engages in IT-based projects topromote cashless operations. Despite many positive factors,
there are also potentially negative and harmful effects, suchas unintentional access by children through mobile phones
and people becoming financially overextended due to weakfinancial literacy. I feel that perhaps you should enhance yourdisclosure of such risks from the consumer’s perspective while
also making efforts to increase financial literacy in general.
Kawamura: For example, we are making very strong efforts
to prevent fraudulent payments. On the other hand, I realized

Growth Strategy for Value Creation

In this dialogue, we explained our efforts to create social value and solve societal issues and how we have communicated themto the public, such as societal issue solution services being adopted as one of the KPIs in our Medium-term Management Plan
(2021–2023), utilization of human resources, diversity, and provision of safe products. We received objective and frank commentsfrom Ms. Kishigami.
This section introduces (a portion of) the contents related to the societal issue solution services, which was the focus of this
dialogue.

P.33 Key Strategy of Medium-Term Management Plan
—DX, Service-style business, payment, global,
management capability, HR

g In conclusion

Kawamura: We became convinced that we could improve the value of the Group significantly if we could enhance our entire
social ecosystem. We also realized that there are always negative factors associated with positive change and confirmed theimportance of efforts to mitigate such factors. We will continue using insights gained from this dialogue to enhance value
exchange with various stakeholders and become a corporate group that is needed by society, while also fostering a happier society.

2728

Make society’s wishes come true through IT.

Taking Long-Term Perspective on Target Trajectory

Using advanced technology and know-how, we will add a new dimension of vitality to society and bringsmiles to the faces of more people. Our presence will shape the future of this kind of society.
The TIS INTEC Group will continue to make society’s wishes come true through the power of IT.
Introduction

The society of the future is uncharted territory, shaped by intense but still unfolding changes, and the power of IT will be
indispensable to paint this new world in bright colors. By moving forward on structural transformation to addresschanges in society and demonstrating the composite strengths of the TIS INTEC Group, we will create an enduring
presence that helps make society’s wishes come true.

2050

World in 2050
In making assumptions for 2050, we took into account 24 political, economic and social themes, in parallel withtechnological progress and the impact that such advances might have, and performed PEST analysis.

Economy• Hub of global economy will shift to emerging countries of Asia that continue to enjoy high economic growth• Disparity between countries will shrink, paralleling economic growth, but personal income gap will widen

Society• Population growth is particularly noticeable in Asia, where the benefits of economic progress have extended average life expectancy
and produced an aging society• Technological innovation is fueling economic growth in urban areas while regional economies, impacted by a decrease inpopulation and little promise of a demographic turnaround, are in decline

Technology• Technological innovation will accelerate, technological breakthroughs will become more frequent, and technology will have a major impact
on political, economic and social activity

Above

2026

70%

Group Vision 2026
“Create Exciting Future”
Utilize advanced technologies and know-how torealize business innovation and market creation

March 2024

Strategic domain ratio

Four social issues TIS identified as priorities
where Group strengths can contribute to solutions
Health concerns

Urban concentration and regional decline

Low-carbon/decarbonized society

60%
Please see
page 32.

Basic Policies

Virtuous cycle of value created jointly
by society and employees

Expandinvestment togenerate
strengths

Resource layer
Shift to human resources composition conducive
to structural transformation success

IT Offering Services

IT system
configuration andoperation

Specific
responses

Business Function
Services

Strategic Partnership
Business

Provide IT
engineeringexpertise

Service domains

IT domains

Service domains

Business Function Service (BFS)

For clients at the top of their industry, we will draw on industry foresight andbusiness knowledge that other companies cannot match—our businesstools—to explore and promote business strategies with clients and underpin
business basics.

We will combine industry and business knowledge accumulated within theGroup and utilize advanced technologies to anticipate client needs and provide
business functions as services to enhance their value chains.

IT Offering Service (IOS)

Frontier Market Creation Business (FCB)

We will combine leading-edge technologies and know-how accumulated as acorporate group to create and quickly provide IT solution services that
anticipate client needs.

We will utilize Group technology, operating know-how and customer bases tocreate new markets and business models matched to evolving industry andsocial needs and develop businesses for these markets on our own.

Corporate Information/Data

29

Medium-Term Management Plan (2021–2023)
Be a Digital Mover 2023
Accelerate structural transformation
by improving value provided in DX services

BPO services

Evolution ofstrategic domains

Strategic Partnership Business (SPB)

Diversification of human resources, sharper skills

Medium-Term Management Plan
2018–2020

Network
infrastructureservices

IT domains

Deepen andextend global
operations

Strategic domain ratio

Marketable
services

Platform for Value Creation

Business layer
Turn SI capabilities into strength that underpins
transformation into global DX partner

March 201835%

Frontier Market
Creation Business

Stakeholder layer

Generate virtuous cycle of value exchange andsustainable growth between society and employees

Improve value
provided by DX

Strategic Domains in 2026

Business
CreatorSupportingclients’ businesses

Strategic domain ratio

Strategic Domains*
Strategic Partnership Business: Lay both a revenue base and atechnology/know-how base
IT Offering Services: Prior-investment business functioning as
pillar of profit
Business Function Services: Recognized as Group forte, driverof growth
Frontier Market Creation Business: Driver of explosive growththrough creative destruction of prevailing walls

Business Domains in 2016

Medium-Term Management Plan (2021–2023)

March 2021

51%

Seeking Position on Global StageBe seen by leading companies in different industries as having
an appealing presence, always trusted as a strategic partner
Always embrace reform in existing industries and markets,and earn reputation as market-creating innovator
Transcend the limits of an IT enterprise; be a leading company
with innovative market concepts
Proudly demonstrate high profile and showcase solid standing
as a corporate group chosen by clients, society, employees—
everyone* Strategic Domains: Four business domains
will form the core of the TIS INTEC Group by
2026, as described in Group Vision 2026.

Growth Strategy for Value Creation

Financial inclusion

TIS INTEC Group Value Creation

2026 Corporate Ideal*View of the world in 2050 drawn at Sustainability Project in 2019.

Based on long-term trends, we identified four social issues—financial
inclusion, urban concentration and rural decline, low-carbon/decarbonizedsociety and health concerns—that we have the capabilities to address.

Taking advantage of the shift to an operating holding
company structure in July 2016, TIS drafted a newgroup vision that imagined the TIS INTEC Group in
2026. This guides efforts to combine the capabilities ofGroup executives and employees alike and takecorporate value to new heights.
We want clients to rely on us as a strategic partner.
To this end, we will always embrace reforms in existing
industries and markets and strive to be an innovator
creating new markets as well.

Strategic domain ratio

Top Message

Politics• Predict pension and social security system failure due to changing demographics• Trend to limit impact of corporate activities on society, with tougher restrictions on use of fossil fuels and use of resources as measures todeal with climate changeGroup Vision 2026
“Create Exciting Future”
Utilize advanced technologies and know-how torealize business innovation and market creation30

Outline of Medium-Term Management Plan (2021–2023)

We look back on the three medium-term management plans that have led the TIS INTEC Group to
the Medium-Term Management Plan (2021–2023).

The followings are Outline and progress of medium-term management plan (2021–2023 ).

Basic Concept/
Medium-Term
Management Direction

Fiscal 2019–Fiscal 2021

Fiscal 2022–Fiscal 2024

Beyond Borders 2017

Transformation to 2020

Be a Digital Mover 2023

Portfolio management

Constant transformation, with sense of speed

Portfolio management, in a project sense, blending exceptional
businesses and key strengths into a single approach

Achieving structural transformation
as a corporate family and taking the leadin finding solutions to social issues

Profit emphasis
IT brainPortfolio management
Set ROE as key performance indicatorand strive for improved corporate value
and sustainable growth

As a second step to achieve Group Vison 2026, the three years of the medium-term management plan will be a time to enhance ourvalue chain by improving the value provided in DX services, and by promoting further structural transformation, we will grow theGroup and be better positioned to address social issues.
Progress favorable towards achieving the final target by fiscal 2024, ending March 2024.
Basic Policies

Landmark changes to business landscape• With heightened importance of DX in new normal world,presence of consulting firms and other providers of DX services
is increasing, fueling intense competition.
• Global platformers and enterprise SaaS companies are
particularly active, as well, prompting possibility that market forcontract development will shrink in long term.
• ESG investment rapidly expanding, and importance ofsustainability management based on long-term strategies isgaining ground

Sustainable profit growth
Emphasis on employee self-fulfillment
Concentrate on core businesses
Shift to prior investment style of business development
Expand global business
Fiscal 2021

Key indicators
Estimates

ActualEstimates¥400 billion¥405.6 billion¥430 billion¥448.3 billion

Operating income¥30 billion¥32.7 billion¥43 billion¥45.7 billion

Operating margin

7.5%

8.1%

10.0%

10.2%

ROE

8.0%

9.9%

12.0%

10.8%

Payout ratio

16.6% in fiscal 201831.9% in fiscal 2021

Total return ratio

30.5% in fiscal 2018

42.8% in fiscal 2021

Net Sales
Fiscal 2021 Actual¥448.3 billion(b)¥482.5 billion

Fiscal 2024 Estimate(c) ¥500.0 billion
(b-a)

(c-a)

Rate ofprogression

66%

Operating income

Fiscal 2022 Actual

42.7% (single year)+4.0%+15.7%+3.4%+11.8%

Fiscal 2021 Actual(a)Exceeding 10%+¥9.0 billion/+¥12.3 billion

(a)

31

P osted profit growth and hit operating income and strategic
domain ratio targets—two key performance indicators—byleveraging structural transformation and improving productivity.
Hit ratio of 51% (exceeded target of 50%) in fiscal 2021.
Quantitatively, Service IT Business maintained upfront
investment emphasis. Net sales grew but profitability was
an issue despite. BPO, Financial IT Business and Industrial IT
Business raised added value and productivity and were rewarded
with higher profitability.
Made progress on strategic domain restructuring and achieved
profit growth, but advance on monetizing Service IT Businessand achieving qualitative structural transformation through newpillars of business only reached midway point.

(b)

Fiscal 2024 Estimate(c) 60%+3.0 pt/+9.0 pt
(c-a)

(b-a)

11.3%

Rate ofprogression

79%

(c-a)

Sales of societal issue solution service

54%

Fiscal 2021 Actual(a)Rate ofprogression

33%

(b)

+1.1 pt/+1.4 pt

73%

Fiscal 2022 Actual

51%

Fiscal 2022 Actual

10.2%

Fiscal 2024 Estimate(c) 11.6%

Rate ofprogression

Strategic Domain Ratio
Fiscal 2021 Actual(a)Fiscal 2022 Actual¥38.0 billion(b)

Fiscal 2024 Estimate(c) ¥50.0 billion+¥6.5 billion/+¥12.0 billion
(b-a)

(c-a)

¥44.5 billion
Rate ofprogression

54%*Rate of progression indicates progress toward fiscal 2024 estimates from perspective of fiscal 2021 actual results.

Fiscal 2022 TIS INTEC Group Management Direction

Looking back on fiscal 2022

Leverage initiatives to improve corporate value and value
provided to society through sustainability management

	Strengthened efforts to realize sustainability management, particularly in regard to the environment(TCFD support, SBTi certification), human rights due diligence, and reduction of strategic shareholdings	Efforts to enhance head office functions and improve efficiency, including wider embrace of DX, moving
along as planned

Reinforce efforts to make services more high-value-added
through productivity innovation and improvement in value
provided in DX services

	Raised value in DX services provided to core clients, with transformation of strategic domains on track(strategic domain ratio—target of 54%, now at 54%)	Gross profit margin hit 26.7%, reflecting tougher measures to boost productivity, including
enhancement reform, and ratio still rising	Controlling unprofitable projects remains an issue of concern

Firmly maintain financial health while emphasizing growthinvestment to enhance ability to provide DX value	Leverage co-creation activities with clients and business partners to revitalize operations and achieve
growth in social issue solution services
	Investment to reinforce in-house capabilities, including R&D, rolling out as planned

Leverage growth strategy seeking to become top-class IT groupin ASEAN regions and cement strong governance	Business activities of MFEC, which came under consolidation, moving in favorable direction	Acquired technology through capital and business alliances with multiple technology partners
	Realized joint creation with ASEAN partners, including joint order capture through MFEC and I AM
Consulting on large projects for government-linked companies

Constantly boost employee motivation and develop humanresources brimming with diversity to fuel DX shift	Using DX Strategy Human Resources Conference, held at beginning of fiscal year, as touchstone,
promoted job transfers and mid-career hiring to enrich pool of DX consultants	Improved employee engagement by leveraging groupwide personnel strategies

Corporate Information/Data

Key reflections

E xpansion in value-added creation style services, along withassignment solution style services geared to client requests,
fueled growth. Shift to market-cultivating style services requires
faster responses. Profitability steadily improving, and efforts tocontrol unprofitable projects showing results. But low-level
control still required.
Transition to operating holding company structure and steady
implementation of measures, including business realignment,
office consolidation and improved capital efficiency, to achieve
overall optimization of the Group. Made progress in cultivating
corporate culture with sense of solidarity through design ofsingle logo and creation of Group vision.
To achieve sustainable growth and improved corporate value,prioritized structural transformation and establishment ofresilient management platform through additional reforms within
the Group in anticipation of major changes in society.

(c-a)¥54.7 billion

Fiscal 2021 Actual

Platform for Value Creation

Major priorities in groupmanagement

Elevate head office functions and promote greater efficiency
	“G20” project to elevate head office functions
Integrate groupwide core systems
Cut head office costs by 10%(b)

Fiscal 2024 Estimate(c) ¥58.0 billion(b-a)

Operating Margin

Fiscal 2022 Actual¥45.7 billion(b-a)

Integrate/centralize shared functions with the GroupMake office procedures more efficient, enhance capital and asset
efficiency, raise Group profile, and cultivate corporate culture withsense of solidarity
Realize higher level of administrative management
Promote management with profit emphasis, work to enhanceaccounting, taxation, finance reporting, and implement Group
personnel strategies

Diversification of human resources, sharper skills

Operating Income
Fiscal 2022 Actual

EPS Growth CAGR

Net sales

Resource layer
Shift to human resources composition conducive
to structural transformation success

Key Performance Indicators+¥34.1 billion/+¥51.7 billion

Reference: Average annual growth rate over three years

Deepen andextend global
operations

Growth Strategy for Value Creation

Strive for total return ratio 40%

Expandinvestment togenerate
strengths

Improve value
provided by DX

Accelerate structural transformation
by improving value provided in DX services(a)Strive for total return ratio of 35%

Business layer
Turn SI capabilities into strength that underpins
transformation into global DX partner

ActualNet sales

Policy on return toshareholders

Virtuous cycle of value created jointly
by society and employees

TIS INTEC Group Value Creation

Fiscal 2018

Top Message

Theme

Fiscal 2016–Fiscal 2018

Introduction

Looking Back on Past Medium-Term Management Plans

32

Service-style Business Strategies

To give form to the Group’s mission “To fill the future with vibrant colors as a mover using digital technology,” TIS set a
goal to take a digital approach to enhance value exchange with stakeholders.

We seek to improve profitability across all service-style businesses, including payment services, through careful allocationof management resources to help solve the four social issues that have been highlighted for a groupwide response andthrough more sophisticated management practices.

Overall DX business strategy

Net Sales Growth in Societal Issue Solution Service (Billions of yen)

The TIS INTEC Group takes on DX across three areas: social DX, to achieve a better society; business DX, to reimagine clients’businesses; and internal DX, to elevate the capabilities of the Group itself.
These areas are not thought of in isolation but rather as a single series in which each category has a reciprocal effect on theothers, underpinning initiatives from a comprehensive perspective, and then, drawing on digital technology, driving a virtuous cycleof new value for society, clients’ businesses and activities within the Group itself. This is the image of DX that we, the TIS INTECGroup, seek to achieve.

Financial inclusion

Health concerns

Urban concentration, rural decline

Actual38.0

Low-carbon/decarbonized society

Estimate

50.0

Fiscal2022

Fiscal2023

Fiscal2024

Top Message

44.5

47.0

Use digital technology to successfully address social issues

Social DX

Financial inclusion

Heath concerns

Low-carbon/
decarbonized society

Introduction

Key Strategy of Medium-Term Management Plan/DX Business Strategies

Urban concentration/
rural decline

Fiscal2021

Fiscal2027

Improve value provided in DX services

Business process
reformIT infrastructurereformTechnology

Data
Analytics

UX

Promote co-creation with stakeholders
Enhance system development work

Internal DX

AgileBusiness

Sharpen DX consulting function

Enhance system operation work

Revamp marketing process

Proceeded as planned toward service completion in first half offiscal 2023
Turned ULTRA, which provides international brand payment services,
into consolidated subsidiary
New orders for wallet services

Payment

Business DX
IT Delivery
BPO

Societal Issue
Solution Service*

Enhance IT delivery(Fiscal 2021 – Fiscal2022)

Launched SustainaCare, a personalized healthcare program toachieve strategic healthcare investment
Began providing DX on RoboticBase to realize DX using robotics.

¥28.5 billion

TIS INTEC Group Value Creation

BusinessreformSales

Key Offering Services

Create new value by going beyond limitations of time and place, connecting people,
things and information, and reimagining business, processes and IT infrastructure¥33.5 billion¥38.0 billion¥44.5 billion* Services that directly provide solutions to financial inclusion, health concerns, low-carbon/decarbonized society, urban concentration, rural decline

Expand service-style business

Develop skills of employees who use digital technology
Promote data-driven decision-making in all aspects of work
Remove from in-house office work

Create more active organization through better communication

Social DX (Societal issue solution services)
Social DX is central to being a mover using digital technology. TIS–and by extension—the whole TIS INTEC Group prioritizes the foursocial issues described in the image below and develops new businesses to address these issues. Ideas from within the Group, as wellas M&A activity, co-creation with other companies and other approaches, generate a steady stream of diverse new services.

Social DX
TIS will lead efforts within the TIS INTEC Group to harness the power of IT and create various new services on its own to addresssocial issues, particularly the four areas—financial inclusion, health concerns, low-carbon/decarbonized society, and urban
concentration/rural decline—where the Group can have a pivotal impact, and thereby support realization of a more
comfortable society.

Urban concentration
and regional decline

Business DX

Fill the futurewith vibrant colors
as a mover

Create sustainable society

Using data collected within the Group as well as technology, such AI and robotics, we will make office work more efficient. This will
create a new environment in which employees are more motivated and can concentrate on promoting social DX and business DX.
Selected examples

Topic

Health concerns
Respond to health concerns in era
when more people are living to 100	[Health concerns] Healthcare Passport, a coordinated, medical care / health information service linking
patients and providers of medical and health care	[Financial inclusion] ultra pay Card, a no-credit-check, prepaid Visa credit card	[Financial inclusion, healthcare concerns] Walking app ASTARI	[Low-carbon/decarbonized society, rural decline] Capital alliance with Chinese self-driving EV startup.

Corporate Information/Data

Promotion structure

Platform for Value Creation

Low-carbon/
decarbonized societyInternal DX

33

Improve society through convenienceof payment services

Contribute to regional
revitalization

The goal is to utilize digital technology to support clients in their efforts to address social issues and respective management issues.
We will complement top-level capabilities in the domestic payment services domain with Group strengths in data analytics, AI androbotics, healthcare, and energy management, combining these capabilities as a partner to help clients grow their businesses andimprove corporate value. We will provide a full range of responses, from pinpointing issues and suggesting the right services toimplementation and operation of the associated systems.

The person holding the title of Representative Director and Executive Vice President at TIS is responsible for promoting the Group’s
DX business strategy. In addition, the Digital Transformation Promotion SBU, a business unit set up in April 2022 to focus solely on
DX, is taking a central role in DX promotion. Eight themes have been identified, and efforts are under way to promote DX
throughout the Group and across divisional lines under a project structure.
TIS is keen to increase value exchange with stakeholders. Toward this end, the Company is working on measures to design the
future of the Group through wide-ranging approaches, including enhanced marketing and sales, better system development andoperation, and fine-tuned deployment of human resources.

Financial inclusion

Growth Strategy for Value Creation

For details on TIS’ DX strategy, please go to the corporate website (Japanese only).
https://www.tis.co.jp/group/policy/dx

TIS held an information meeting in December 2021 highlighting sustainability management and provided details on solutionstyle services to address social issues. Please follow the link below to see presentation materials from that day.
https://www.tis.com/documents/en/ir/finance/meeting/211201.pdf

34

Key Strategy of Medium-Term Management Plan/Payment Business Strategies

Through years of support for major credit card companies, TIS INTEC Group has established its position as one of Japan’s
leading system integrators in the payments field. Currently, the payment business market is undergoing major changes inthe environment as the shift to cashless transactions progresses. The Group sees this situation as a new growth opportunity
and will accelerate business development through its PAYCIERGE digital payment platform in addition to the development
and operation of enterprise systems for major credit card companies, which are an important business platform.

Status of cashless payments in JapanThe Japanese government is promoting cashless payments, which are expected to become more widespread in the future
The credit card is a typical tool for making cashless payments, and the credit card transaction volume is expected to increase in
the future alongside an increase in mechanisms for linking cards to code-based credit services, such as QR codes and barcodes,that have become popular in recent years.
Cashless payments and cashless payment ratio

80.0%(¥trillions)100

Digital accounts facilitate access to processing services for all payment operations, from prepaid accounts for payment prior topurchase and instant withdrawal accounts for debit payments to post-payment credit accounts, and is an area where TIS candemonstrate particular competitive superiority.

Digital accounts

Brand prepaid
processing services

Public fees

Transportationcompanies

あ

Banks

Strategic
partnerCore competence
Payment services
Lending
Data analysis

Businesscoordination

Core area

Payment-related business scale for service-style operations

Front area
Prepaid coremarketPrepaid SaaS
¥2.5 billion
Debit SaaS
¥3.5 billion
Debit coremarketFront market
for issuers

Making ULTRA a consolidated subsidiary
In March 2022, the Company made ULTRA Inc., which issues ultra pay cards with Visa prepaid functionality, a consolidated
subsidiary. By welcoming this company, which provides international brand prepaid settlement services to our Group, we haveacquired front-end settlement functions and can now provide a full range of settlement services in combination with our strength inbuilding settlement back-end functions. The Group, aiming to realize financial inclusion, will further promote the resolution of social
issues through cashless transactions through the Embedded Finance initiative, which is becoming a global trend.

Topic

TIS held an information meeting in December 2019 highlighting payment services and provided details on areas of focus andstrategies. Please follow the link below to see presentation materials from that day.
https://www.tis.com/documents/en/ir/finance/meeting/191209.pdf(Billions of yen)

40

34.0

33.5
28.5

Merchants/QR/
Wallet¥5.5 billion

20

Front market
for merchants0

New domain creation/common ground ¥2.5 billion

35(3) Abundant repayment methods
Monthly clear / installment payments /revolving payments are standard. It can be
specified per statement.

More than
20%

About
50%

About
30%
Fiscal 2021
(actual)SI salesFiscal 2022
(actual)Fiscal 2024
(estimates)

Recurring sales

EBITDA margin

Isao Otokita

PAYCIERGE is our unique payment solutions platform launched in 2013, leveraging the wealth of know-how and advanced technology
in the payment area that we have cultivated over many years. To date, we have developed a variety of services centered on cashless
payment services, always staying ahead of changes in the payment market abreast of technological advancements, and accurately
capturing the diversifying needs of our customers. We believe that the coronavirus pandemic will serve as an opportunity to accelerate
the trend toward cashless transactions both domestically and internationally. We also expect the diversification of payment methods
to further advance. Under these circumstances, as a major player in the payment market, we will continue to strive to enhance thevalue of PAYCIERGE and expand our business through the creation of advanced services. We believe that this will lead to the safe andsecure use of cashless payment by all people, and will serve as the foundation to support a comfortable society in the future.

Corporate Information/Data

Credit SaaS
¥20.0 billion(2) Payment timing can be selected
Monthly direct debits and real-time
repayment are available.

Platform for Value Creation

Market Share (Fiscal 2024)n%After pay

Examination and loan

Payment service strategy
under Medium-Term Management Plan (2021–2023)
Finance
RetailHealthcare Administration/
With the cashless market in growth Urban
mode,OS
we will target businesses keen to participate in new payment options. High-level
Targetmarket providing us with the perfect opportunity to demonstrate competitive superiority, especially
specialization will bein demand,in services to our core customer base. We are aiming for net sales of ¥34 billion in fiscal 2024, supported primarily by this core
on of BusinesscustomerGrowth
segment.

Credit core market

Cashless payment ratio

Code reading
type

Growth Strategy for Value Creation(1) A variety of payment methods
International brand merchant payment (Visa,
MasterCard, JCB) is available as standard.
Individual IF support enables connection toeach company's own payment methods.

Maas, etc.

Finance service platform

CreditSaaS

Debit card

Instant debit

Three features of API-based BNPL services

Non-banks

QR settlement gateway
for merchants

Credit card

FutureNon-contact
type

Introduction of API-based BNPL service
We have launched an API-based BNPL service as a new pay-later settlement service for the credit core market. BNPL (buy now,
pay-later), for which market needs are rapidly expanding these days, enables low-cost, highly scalable, and speedy entry into thefinancial business. We support our clients' entry into financial services by providing the necessary core functions on an API basis.

Distributors

Finance

Services for merchants

Merchant processing

2025

Prepaid

Introduction to credit card processing service (CreditSaaS)
CreditSaaS, which is expected to be a growth driver in the credit core market, is progressing as planned toward service completion.
After acquiring first users, we continue to promote sales activities to expand the business.

Travelservices
Launch CreditSaaS and promote businessdevelopment, and grow into pillar of business2016

Contact type

TopicsFintechventures

Digital wallet services

Strategic Focus

2008

Payment method

Source: TIS Compiled based on Cashless Vision (Ministry of Economy, Trade and Industry, April 2018)

RetailMobile wallet

Overseas local
networks

11.9%

Interface

TIS INTEC Group Value Creation

Payment settlement
networks

API-type brand prepaid
processing services

20.0%Electronic money

WidgetBrand debit
processing services

50

0

PAYCIERGE
Credit card processing
services

40.0%

Combination of cashless payment methods

Top Message

Overview of Payment Services and TIS’ Core Focus

Introduction

Leveraging our strengths to accelerate business development and realize a cashless society

TIS Executive Officer,
Deputy Division Director of
Digital Transformation
Business Unit

36

Key Strategy of Medium-Term Management Plan/Global Business Strategies

InitialInvestments

As part of its global strategy, TIS is currently seeking to build a top-class group of IT companies in the ASEAN region. To
this end, the Company will maximize alliances forged through strategic investments in channels—that is, local markets—and technology, while promoting business development that integrates the respective strengths of each company andexpanding business domains through new and reinforced connections across the ASEAN region.
ChannelX-TechCardInfoLink / EVONET

Service Provider (Listed, Singapore)

Cross-Border Payment Network (China)

ASEAN • China • USA

Anabatic
System Integrator (Listed, Indonesia)

PromptNow

System Integrator (Listed, Thailand)

AINO
FinTech (Indonesia)

I AM Consulting
SAP Consulting (Thailand)

TinhVanContour

System Integrator (Vietnam)

Trade Finance (Singapore)

Emerging Tech

Entropica

R3

Quantum Tech (Singapore)

Blockchain (USA)

ChannelI AM Consulting Co., Ltd.

Consolidated
subsidiaryThai-based consulting group producing total SAP-related IT solutions.

Channel2015

PT Anabatic Technologies Tbk

Equity method
affiliate

Indonesia-listed, top-tier local IT company.

Channel2016

PromptNow Co., Ltd.

Consolidated
subsidiaryThai-based leading FinTech company with multiple proprietary mobile services forfinancial institutions.

X-TechShanghai CardInfoLink Data Service Co., Ltd.

Equity method
affiliate

FinTech company developing presence in China and around the world, withparticular strength in payment gateway solutions and other services.

X-TechTinhVan Technologies JSC.

Capital & businessalliance

Leading IT service provider with considerable experience introducing solutions to
the Vietnamese government and financial institutions.

ChannelR3 HoldCo LLC

Capital & businessalliance

U.S. technology startup boasting global-caliber results and brand in blockchainrelated technology for corporate users.

Emerging
Tech

PT AINO Indonesia

Equity method
affiliate

FinTech provider of payment services for transportation infrastructure in Indonesia.

X-Tech

SQREEM Technologies Pte. Ltd.

Capital & businessalliance

A Singaporean startup—the world’s largest behavioral pattern data aggregator—
growing very fast in fields of digital marketing and data analytics using proprietary
AI technology based on massive data collection.

Emerging
Tech

Grab Holdings Inc.

Capital & businessalliance

Top-class super app provider in ASEAN region. Expands into one business after
another across wide range of sectors, including ride-hailing services, food delivery
and financial services. Boasts 203 million downloads on aggregate basis.

Channel

GrabLink Pte. Ltd.

Capital & businessalliance

Joint venture—IT platform provider for Grab’s payment services.

X-TechEntropica Labs Pte. Ltd.

Capital & businessalliance

A Singaporean startup—provider of quantum computing software.

Emerging
Tech

Sequent Software Inc.

Consolidated
subsidiary

One of very few tokenization vendors in the world, and recognized by multiple
international brands.

Emerging
Tech

J Ventures Co., Ltd.

Equity method
affiliate

A DX subsidiary of Thailand major retailer Jaymart.
Provide DX platform for retail ad and finance business.

X-TechSpeQtral Pte. Ltd.

Capital & businessalliance

A Singaporean startup—provider of quantum computing software.

Emerging
Tech

Hangzhou Qulian Technology Co., Ltd.

Capital & businessalliance

A blockchain company—originally developed to provide application, hardware,and data linkage services with other systems

Emerging
Tech

Contour Pte. Ltd.

Capital & businessalliance

Singaporean company, provider of a trade finance platform utilizing blockchain
technologies

X-TechPIXMOVING, INC.

Capital & businessalliance

An autonomous EV startup in China, United States, and Italy

Emerging
Tech

2017

2018

2019

Miaomi

Human Behavior AI (Singapore) Wireless Sensing AIoT (China)

SpeQtralHyperchain

TBWG

Sequent

PIX Moving

Quantum Tech (Singapore)

Blockchain (China)

Blockchain Consortium (Thailand)

Tokenization (USA)

Autonomous EV (China)*1. Total sales of subsidiaries and equity method affiliates (fiscal 2021, ended December 31, 2021) are converted at period-end rate.
*2. As of July 2022

2021

Topics: Development and provision of Indonesia’s first integrated transportation payment infrastructure
A transportation payment package based on the concept of “Open Loop, Multi Media” developed jointly with PT
Aino Indonesia, a fin-tech startup and equity method affiliate. It was adopted for JakLingko, Indonesia's first
integrated transport settlement platform.

JakLingko

The fare structure of the four public transportation systems that exist in Jakarta are integrated and consolidated ina single application, allowing users to search for routes, make reservations, purchase tickets, and use tickets fromthe point of departure to boarding public transportation, including transportation from public transportation dropoff to the destination. This is the first citywide MaaS in Southeast Asia.

Phase 1
September 2021

JakLingko, integrated
transport settlement platform
MaaS, which can use both public transportation
and ride-hailing services in a single application,
allowing users to search for routes, makereservations, purchase tickets, and use tickets
from the point of departure to destination

Phase 2June 2022
Added MaaS in
collaboration with Grab,a top-class super app
provider in Southeast Asia

Point ofRide hailingdeparture

Public transportation

Ride hailing Destination

Park & ride, loyalty programs, event ticket sales, and various mini applications are planned to be added to make time on the move more productive

37

Aiming for global consolidated sales of ¥100 billion in fiscal 2026,
to become the top-class IT group in the ASEAN region

Topic

TIS held an information meeting in December 2020 highlighting global operations and provided details on areas of focus
and strategies. Please follow the link below to see presentation materials from that day.
https://www.tis.com/documents/en/ir/finance/meeting/201204.pdf

Kensaku Furusho
TIS Executive Officer,
Division Manager of
Global Division

Over the past eight years since 2014, the Group’s has accelerated investment in its global operations and expanded its network to
include to 17 overseas partners. To enter the local market in each country, we have formed partnerships with leading local system
integrators and have worked with them to solve local social issues by introducing cutting-edge services and technologies to the market.
As a result, the scale of our business is approximately ¥78 billion, and we are making steady progress toward our target of ¥100
billion in consolidated sales in the ASEAN region by fiscal 2026.
At the same time, we are strengthening our governance structure in line with the expansion of our business scale. Specifically, we
dispatch directors and second personnel to investee companies and hold regular steering committees among top management. We arealso working to strengthen governance by establishing seamless communication between the headquarters and local offices, including
the establishment of a Global Financial Planning Office at the head office.
While we have been focusing on the ASEAN market, aiming to become the top-class IT group in the ASEAN region, we are also
developing new markets and expanding new functions to build a structure capable of providing services on a global scale.

Corporate Information/Data

Mobile app that
integrates all of Jakarta’s
public transport systems
released

JakLingKo
Jakarta, the capital of Indonesia, wasexperiencing serious traffic congestion
and the resulting air pollution was aserious social problem.
Four separate public transportation
operators were under contract, withindependent service and farestructures, making commuting to andfrom work inconvenient.
JakLingko is making public
transportation more convenient,promoting a modal shift, and helping
the Indonesian government achieve
its goal of 60% communal
transportation by 2029.

2022

Platform for Value Creation

AcasiaGrowth Strategy for Value Creation

Thai-listed, leading provider of enterprise IT solutions.

2020

SQREEM

Area

Consolidated
subsidiary

J Ventures
DX (Thailand)

Corporate Profile

TIS INTEC Group Value Creation

Network: 10 countries,
109 companies*2

Relationwith TIS

MFEC Public Company Limited

2014

FinTech (Thailand)Business scale: ¥78 billion*1

MFEC

Partners (place in order of the investments)

Top Message

Grab HD

Head
officeIntroduction

Recent main M&A and capital and business alliances

Leverage business domain expansion and strategic investments
to become top-class IT group in ASEAN region

38

Human Resources Strategy

We aim to elevate head office functions and promote greater efficiency by centralizing back-office operations, raising the performanceof head office operations and promoting the shift toward DX in office work throughout the Group. In addition, we seek to contribute toa sustainable society and realize higher corporate value, and toward this end, we will enhance sustainability management with a morein-depth approach to ESG issues.

To improve the value provided by DX and realize structural transformation, TIS prepared a human resources strategy and has been
reinforcing investment in human resources, based on this strategy. We seek growth through circular value exchange between employees
and company, a process of promoting development through investment in human resources, which underpins higher added value in eachindividual and then leads to improved earnings that are used as the source of capital to begin the process again.

Ideal Human Resources Strategy

Internal DX
To give social DX and business DX activities added momentum, we are working to establish an environment that combines
knowledge and human resources across domains within the TIS INTEC Group and fuels greater creativity in operations.

Compensation

DX Promotion Themes

Activities and Results in Priority Areas
Sharpen/enhance skills of human resources

Investment toboost motivation(including
office investment)

Investin human
resources

Investment
in education

Personnel DX

Revamp marketing
process

Expand service-stylebusiness

Virtuous cycle ofvalue exchange between
employees and company

Raiseadded value

Develop skills of employees who use digitial technology

Data-driven decision-making in all asoects if office work

TIS Digital Transformation
Promotion SBU(Specialized unit)

Operating income per employee

Motivation score (TIS-only)(Continuous improvement)(Continuous improvement:
Hit 61%)Create more active organization
through better communication

Remove from in-house office work

Strengthen Group synergies
Promote laterally through Group¥2.5 million
Fiscal2018

Implement measures across Group

Fiscal
2019

Fiscal2020

Diversity & Inclusion

Personnel
growthFiscal2021

Fiscal2022

Fiscal2018

Fiscal
2019

Fiscal
2020

Fiscal2021

Obtained White 500 status for four consecutive years forhealth management
Continuous awareness activities, including Diversity &Inclusion training
Sustainable engagement

61%

Motivation score rose from 56% last year to 61%

Fiscal2022

Priority Themes in Fiscal 2023
Reinforce human resources investment to boost added value
Raise human resources business partner capabilities
Promote diverse individual activities using personnel DX

Bolster leading human resources investment to further improve added value(Increase of ¥1.2 billion in fiscal 2023 over fiscal 2022*)*Increase of ¥1 billion for enhanced employee benefits, ¥200 million in investment in education

Growth Strategy for Value Creation

Group companies

	TIS INTEC Group’s Human Resources Strategy Model
To encourage wider use of shared services and support the shift toward DX in back-office operations groupwide, TIS split off its
Group shared services business, which was then merged into TIS Business Service Inc., a wholly owned subsidiary, in April 2022.

Management Strategy
Business Portfolio
Linking management strategy and human resources strategy

Promoting higher level of ESG

Human Resources Strategy

Environment

SocialSustainable improvement in stakeholder engagement
Activities in Fiscal 2022
Implemented human rights due diligence in line with Group humanrights policy(Plan to disclose results of risk evaluation in first half of 2022)
Promote diversity, elevate engagement inside and outside the company

Priority Theme in Fiscal 2023
Explored further reduction of GHG emissions and obtaining
various certifications
Began looking into water and waste management

Priority Theme in Fiscal 2023
Strengthen and enhance management practices to address latent
human rights risk
Update human resources strategy and investment level matched tohuman capital management

Human Resources Portfolio

Talent acquisition strategy• New-graduate recruitment• Mid-career hires• Securing diverse human resources• Alumni utilization

Personnel development strategy

Personnel placement strategy• Career building• Companywide training menu
• Business- and skill-specifictraining menu

• Growth support throughdiversified experiences• Agile deployment• Open recruitment

Highlight manifesto
and vigorously pushmeasures forward

Platform for Value Creation

Contribute to decarbonized society and recycling society
Activities in Fiscal 2022
Obtained SBTi certification (June 2021), captured CDP-B score
Committed to TCFD, disclosed information based on recommendation(January 2022)
Encouraged use of renewable energy

Engagement strategy• Promote evaluation system based on management philosophy• Establish and instill awareness of human resources system• Encourage management reforms

TIS INTEC Group Value Creation

Director responsible
for promoting
digital technology

Promoted talent management throughout GroupUse data to help shape careers, ensure best assignment

Strengthen HRBP system

Representative director,
executive vice president

Enhance system
operation work

Top Message

Expanded DX consultant pool to 300 as planned
Developed, strengthened skills of IT architects, project managers
and others

Reinforce frontline
Enhance systemdevelopment work

Introduction

Key Strategy of Medium-Term Management Plan/
Strategy to Enhance of Management Capabilities• Promote diversity management• Create environment for well-being(health management, flexible workstyles)

DX platform to support strategy

Constantly pursue level of corporate governancethat elicits greater trust from society
Activities in Fiscal 2022
Responded to revised Corporate Governance Code and prepared disclosure
document (Revised December 2021)
Drafted Group Taxation Policy (Disclosed April 2022)
Streamlined strategic shareholdings(Total disposal: 8 issues; partial disposal: 1 issue; reduced ¥7.5 billion)

Priority Theme in Fiscal 2023
Lift management and governance practices to higher level39• Visualize human resources, support decision-making process

Brand activities launched in the second half of fiscal 2020 emphasized approaches to boost brand recognition through television commercials and othermedia formats. Our efforts have generated positive results. Going forward, we will strive to become a company—and by extension, a corporategroup—that all stakeholders look to first, and we will implement strategies to boost our brand profile.
Knowledge of TV
commercial(Among business people)
TIS survey on February 2022

79%

Group recognition

IT industry new graduate job seekers(Among business people)
TIS survey on February 2022

Company ranking by
popularity(Up 44 percentage points
after television commercial)

12
Independent: No.1

63%

Overall: No.

40

Corporate Information/Data

Governance• Collect and analyze talent information·Executive Vice President’s Message 1 (Business Strategy)

Josaku Yanai

Josaku Yanai, TIS Representative Director and Executive Vice President, speaks to changes in the business environment
for the TIS INTEC Group and the evolving needs of clients as well as growth strategies for businesses hinging on
improved value in DX services provided.
Looking back on fiscal 2022

Achieved favorable results on market need for responses
from higher upstream phase

Let me use the payment services business—a forte field for the
TIS INTEC Group—as an example of improving the value of DX
services provided, a pillar of the current medium-term
management plan.
An issue affecting realization of a digital economy inJapan is the low ratio of cashless payments as compared withuse of digital payment systems worldwide. The ratio in Japan
topped 30% for the first time in 2021 and has been on asteady increase. However, the Ministry of Economy, Trade andIndustry has set a target of 40% by 2025 with further
expansion to 80%—the world’s top level—in the future. The
ministry calls the digital payment market a supergrowthmarket. Meanwhile, TIS has built a tremendous track record ofresults and enviable strength in the payment services business.
In development of mission critical systems for credit cards, theCompany boasts a domestic market share of about 50%
based on credit card transaction volume, and in provision ofservices and development related to branded debit card
processing, the Company has captured a domestic market
share of about 80% based on financial institutions handlingsuch cards. As a company involved in businesses that support
realization of a digital economy, it is incumbent upon us toapply our achievements and underlying strength to help
promote cashless payments. We believe this domain is one
where we can make a considerable contribution, precisely

42

Corporate Information/Data

41* For details on revision of the Group business portfolio (Group companies
and businesses belonging to each reporting segment), go to page 53.

DX value provided in payment services business

Platform for Value Creation

Business activity was extremely favorable in fiscal 2022, ended
March 31, 2022, substantiated by record-high performance on
a consolidated basis. I would say this achievement is primarily
due to tremendous IT investment enthusiasm among clients,
especially for DX, and the ability of employees to respond
appropriately to this heightened interest. In addition, as weleveraged an enhanced frontline—a concept central to thecurrent medium-term management plan—we were also
successful in actively identifying client needs through what-if
proposals and in polishing our consulting capabilities forbespoke solutions to client needs. Looking back, fiscal 2022
was a year that saw increased demand for IT investment inboth back-end and front-end systems. Clients demonstrated
an exceedingly high level of interest in DX and were very keen
to apply and utilize data as a key management resource,which essentially meant building a data coordination platform.
There was also a large number of migration projects to revamp
mainframe systems created with old programming languages,

such as COBOL, as clients prepared to ride out a situation that
the Ministry of Economy, Trade and Industry has termed the“2025 Digital Cliff.” In addition, we capitalized on booming IT
investment activity, including Enterprise Resource Planning(ERP), a shift to cloud-based services, mobility projects—such
as MaaS (Mobility as a Service)—reflecting a change tosmartphones as the point of contact with customers, andprojects involving a global activities or a widespreadenvironment-oriented response. Such a robust appetite for IT
investment among our clients has resulted in an increase in
the size of development projects for the TIS INTEC Group.
Client needs have evolved such that there is now moredemand for upstream interventions. When IT investment was
aimed primarily at making operations more efficient, clientsdecided on system requirements. Now, in the DX age, we areseeing more requests for advice from the design stage tocreate systems specific to the issues clients face and take themwhere they want to go. The right consulting skills areimperative to facilitate such advice. Meanwhile, as clientsembrace the shift toward DX, they are not outsourcing to IT
vendors as much but rather tackling website updates andother simple digital tasks using in-house IT talent, which is

As part of its efforts to achieve a Group formation that
demonstrates comprehensive capabilities while recognizing
the corporate identity and special features of each company
under the TIS INTEC Group umbrella, TIS introduced a new
management structure and, in conjunction, restructured its
reporting segments, effective from fiscal 2023. There are now
five principal segments: Offering Services Business, which will
be a driver of service-style business and global operations;
Business Process Management, which will make businessprocesses more efficient and realize business reforms; Financial
IT Business and Industrial IT Business, which will handle system
configuration and system operation as a business partner forclients that are top in their respective industries; and Regional
IT Solutions, which will leverage development of regional
solutions for a diverse and region-specific client base.
As of March 31, 2022, TIS had 53 consolidated
subsidiaries, configured to achieve a balance between diversity
and unity as well as a balance between centrifugal (new idea
generating) and centripetal (integrating) forces. A decrease in
the number of companies through mergers would be acentripetal force, promoting integration but diminishingdiversity and innovation. But the pursuit of diversity for its own
sake, a centrifugal force in pursuit of innovation, would havethe effect of fragmenting the Group and eroding its overall
effectiveness. The new formation will involve segment owners,
under whom we will realize cohesive management that breaks
down the barriers between companies and utilize thestrengths of each Group company to underpin growth.

Growth Strategy for Value Creation

We will utilize leading-edge digital technologies to promote corporate andsocial change as a strategic partner of our clients.

As I have already mentioned, in recent years, clients ask that
we be more than just a creator of systems. They need us to bea strategic partner. The Ministry of Economy, Trade andIndustry’s DX Report 2.1, issued August 2021, suggests that if
companies pivot from a run-the-business approach thatmaintains and manages current businesses to a value-up
approach that targets higher corporate value and then pursues
responses aligned to changes in the business environment, thebarriers between users and IT vendors will fall. I think so, too,and the role of the TIS INTEC Group must therefore evolvefrom contracted software development to emphasize active,
what-if proposals and delivery of DX services.
In recent years, even core clients seem keen to keep
software development in-house, and that raises the question,“Will demand for our services dry up?” No. Our proactive
perspective is an attractive quality that client companies seek
as they look to us as a partner in their in-house efforts. By
continuing to adapt ourselves and offer added value, we will
actually create more chances to provide services. For example,in March 2021, TIS established tance CO., LTD., a joint venturewith Japan Card Network (CARDNET), which operates acashless payments network in Japan. tance provides service
platforms and DX promotion support to store operators withmajor credit card companies in mind. The fact that CARDNET,
a long-standing client, chose to establish a joint venture with
us is a testament to our reputation as a strategic partner withwhom it is possible to build new business models.

TIS INTEC Group Value Creation

Seek optimal Group formation, change management
structure

Strengthen function as strategic partner to clients

Top Message

Representative Director,
Executive Vice President

Initiatives under Medium-Term Management
Plan (2021–2023)

Introduction

then complemented by advice from external experts, like TIS.
Consequently, our relationship with clients is changing, andwe are more often required to fulfill the role of strategic
partner rather than IT vendor.
As for changes on the technology front, AI embedding and
Big Data are becoming more pervasive, and we have noticed an
uptick in projects related to XR (Extended Reality), which blends
digital environments extending across the realm of immersive
technologies, including VR (Virtual Reality) and AR (Augmented
Reality), with real-world environments. At the same time, UI(User Interface) and UX (User Experience) design concepts
emphasizing end-user perspectives are key. Demand is also
rising for agile development, which flexibly incorporates clientneeds into the process; scrum development, which disperses
roles within a team to move development along; and low-code
development, which facilitates client-side in-housedevelopment, including website maintenance, and ismanageable even for non-professional developers.
Developed countries around the world, including Japan,
are facing the major social issue of a shrinking workforce, themost effective solution to which is the use of IT. Against a
backdrop of dizzying change, accentuated by the crisis in
Ukraine and heady inflation, clients are also likely to maintaintheir emphasis on IT to deal with changes in their own
industries at least for a few more years.

Platform for Value Creation

Steps taken to realize digital transformation
Phase 1:
Draft DX strategy

Phase 2:
Planning and design

DX strategy

Program goals

Environment/
asset analysis

New market/businesscreation

Visualize
DX metrics
Define purpose/
value
Program design

Platforms

Digital service
transformation
Customer experiencetransformation
More efficientadministration
Revamp platform

Phase 3:
Deployment
Targets

Value chain function
Companies:
Finance, manufacturing,retail, public sector,
communications, services
Financial inclusion

Enablers
Sector-sharedmodel

Business co-creation

Sector-sharedmodel

Data analytics

Sector-shared
model

Urban concentration/
rural decline

Low-carbon/decarbonizedsociety

Health concerns

UX design
Agile development
・AI ・AR/VR ・IoT
・Cloud ・Blockchain
・Security ・Robotics
・5G/6G

Corporate Information/Data

On the business front, a medium- to long-term objective is toreinforce our presence in consulting, while on the technology
front, we will delve deeper into trade finance and digitalcurrency through application of blockchain technology as wellas wider use of XR and Metaverse embedding. Of note,
Singapore-based Entropica Labs Pte. Ltd., with which TIS
formed a capital and business alliance in May 2020, is involvedin quantum computing software development. Quantum
computing is a revolutionary digital technology that executes
algorithms beyond the reach of existing computers andfacilitates high-speed processing. TIS will collaborate on

The TIS INTEC Group seeks to be a partner, guiding clients through digital transformation,from drafting a strategy to implementing it.

Industrywide
modelsApproach to using leading-edge technology at home andabroad over the medium to long term

Steps Taken by TIS INTEC Group to Realize Digital Transformation

Growth Strategy for Value Creation

I oversee all aspects of business, and a key challenge for me is
to turn business structures into virtuous cycles that
demonstrate the composite capabilities of the TIS INTECGroup. For example, account-based units—divisions or
departments—that have built up solid results on made-toorder system configuration are well-acquainted with client-side
management issues and associated solutions through many
years of business interaction. Service-based units apply thisaccumulated knowledge as intellectual property and redirectthese assets toward industry-standard, service-style businesses,
such as CreditSaaS and EneLink. The resulting services thenfoster contact points with new clients and, never missing achance to capture such contact points, account-based units
draw on strengths to provide multifaceted solutions tomanagement issues that new clients are grappling with. This isa virtuous cycle. Various initiatives are already in the works. For
example, in account-style units, account managers are awarethat they have a responsibility to take a bird’s-eye view of theGroup and to look beyond the client-specific structure—bethat a department or a section—for which they are responsible
and bring in other service-style units or Group company
members to formulate broader-ranging account plans from aGroup perspective.

For TIS and other members of the TIS INTEC Group to appeal
to clients, whether existing or potential, we must evolve. As
the director responsible for DX, it is my duty to promote theGroup’s DX strategy, including DX in-house. Our DX emphasis
is not only on software development operations but also on
ordinary operations which will lead to efficient quality
improvement through a switch to robotics and AI, highlighted
by the introduction of robotic process automation into head
office functions. We will continue to foster an environment inwhich people can be innovative and focus on work thatgenerates added value.
In addition, we have looked beyond mechanical efficiency
and, over the past few years, we have directed resources into
the establishment of engineering platforms utilizing theknowledge of engineers. For example, we have implemented
various approaches to boost productivity, including the use of
Nablarch, an application and execution platform developed by
the Technology & Innovation SBU; canal, a support site for TIS

Social issues

43

My role is to create a virtuous cycle rotating throughbusiness units

Companies

With the digital shift expected to spread more extensively
throughout society, the role that IT services will play inaddressing social issues is becoming all the more important.
Acknowledging this, TIS identified four social issues—financial
inclusion, health concerns, urban concentration/rural decline
and low-carbon/decarbonized society—that the TIS INTECGroup can help solve through its business activities. Finding
solutions to these issues will be a long-term effort utilizing thepower of IT and will ultimately lead to the realization of amore equitable society. We are pursuing various activities,
including efforts to promote cashless options through our
payment services business, HealthTech initiatives, such as our
Healthcare Passport that enables both treatment providers andpatients to manage medical care and health information, andparticipation in proof-of-concept projects, including in smart
cities initiatives and Mobility as a Service (MaaS). But I would
like to highlight a project in the low-carbon/decarbonizedsociety category that began at the end of 2021 and bodes
very well for the future.
For Japan to achieve carbon-neutral status, it is imperative
for government to reach out to energy-related companies,
especially those in the electric power, gas and oil sectors.
Drawing on insights acquired through long-standing support
for clients in the energy sector, primarily electric power

Future issues and initiatives

Demonstrating strength during a time of transition forsociety, underpinned by diverse human resources

INTEC Group engineers; and Fintan, a collection ofdevelopment know-how. Such initiatives enable employees toperform at higher levels than before, which fuels productivity
per person and fosters continuous improvement in profitability.
A survey by the Ministry of Economy, Trade and Industry
indicates that Japan could have a shortage of 600,000 IT
professionals by 2030. Other issues that might impact thebusiness activities of the TIS INTEC Group are possible
disruptions to co-creation opportunities with clients andbusiness partners, and potential obstacles to securing anddrawing upon a diverse workforce free of gender andnationality bias. To date, TIS has responded proactively by
establishing new job categories, notably, data scientist anduser interface/user experience (UI/UX) designer, as thecenterpiece of an alliance with consolidated subsidiary
Miotsukushi Analytics, Co., Ltd., which is engaged in the data
analysis and AI consulting business. We have also widened
access to employment and created more opportunities for adiverse workforce to thrive through enhanced humanresources development, exemplified by MFEC Venture LAB, a
startup specialist seeking to cultivate entrepreneurial talent.
Going forward, we will focus on enhancing job satisfaction
and will also use television commercials and other forms of
messaging to convey to as many people as possible thesignificance—and even the fun factor—inherent in a career at
a company under the TIS INTEC Group umbrella.
The TIS INTEC Group has many strengths: independent
management free from keiretsu ties, a client base of top-classcompanies in their respective industries, and a diverse
technostructure built through M&A. Global operations present
another strength. But our most significant strength is ourpeople. At a time when social values are in transition, theGroup will adhere to OUR PHILOSOPHY, and I will push forrealization of sustainable growth of the Group while sharing
with employees the challenges and enjoyment of steering thecorporate ship with personal resolve for the good of society.

TIS INTEC Group Value Creation

Social issue solution services showcasing digitaltechnology*VPP (Virtual Power Plant): A cloud-based distributed power plant thatbundles energy-production sources scattered throughout a region, such as
corporate or local government–run production facilities, residential-use
power generation equipment and electric vehicles. Digital technology is
indispensable to such networks, driven by demand and output forecasts
based on AI and device controllers using the Internet of Things.

cutting-edge technology with developers of Entropica Labs
while pursuing solutions applicable in various fields.
As always, we will take a robust approach to global
operations, particularly in the ASEAN region. In recent years,
we have accelerated activities, including capital and businessalliances with local companies boasting advanced
technologies, but overseas Group companies have themselves
been involved in joint activities, expanding business
opportunities in new directions. Global operations are anotable feature of the TIS INTEC Group that will be developed
further. Going forward, we will grow businesses in the ASEAN
region, starting with key subsidiaries such as the MFEC Groupin Thailand, and promote business development that will
underpin our standing as a top-class IT consortium in the
ASEAN market.

Top Message* For details on the payment services business, go to page 35.

companies, TIS launched Carbony as a solution brand torealize a decarbonized society. The first solution, Carbony VPP
Platform, was made available in April 2022. And there is more
to come. We are implementing a diverse array ofdecarbonizing solutions that includes establishment ofenvironmental value trading transfer and management
systems, such as one that awards points to electric vehicle (EV)owners who charge their EVs at home with power generated
by a renewable energy system and then discharge the stored
energy from their EV to a designated commercial facility.
Another example is an energy-saving service for state powercompanies overseas.

Introduction

because of the portfolio and capabilities we have built, and we
aim to play an active role.
Specifically, we are providing multifaceted digital accountservices, making preparations to build digital value platforms
for major credit card companies, mobile payment systems formegabanks as well as the laying the groundwork for digital
payrolls (digital wage payments), which requires the Ministryof Health, Labour and Welfare to make headway on revisions
to current legislation. We are responding to the evolution of
cashless day-to-day transactions, including automated expense
calculations using scanned receipts.
Meanwhile, the most important factor in providing
comprehensive cashless services is safety and security, and we
ensure the use of fault-tolerant platforms that operate yearround without downtime and also support efforts to detectfraudulent transactions, including money-laundering activity.
In March 2022, TIS turned ULTRA, an international-brandprepaid payment servicer, into a consolidated subsidiary andthus gained a front-end function for payment services.
Complementing TIS’ strength in back-end architecture forpayment systems, ULTRA’s capabilities make it possible toprovide payment services across the full spectrum. Currently,
nearly all payment-related services are covered by Group
companies, which facilitate the necessary responses to clientneeds. But through ULTRA, the Group gains the ability toprovide overall financial functions, enabling various nonfinancial institutions, such as companies in the power,
telecommunications and distribution sectors, to embedfinance functions, particularly a payment function, in theirown digital services. This will enhance the Group’s ability tohelp a much broader range of clients to implement DX.

Provide microservices comprising businesses and various SaaS platforms and cloud platforms to support
new workstyles.

Support parallelingstructuraltransformation

DX promotion
structure/KPI design

Rules & culture
transformation

Management/development
process transformation

Promote open
innovation strategy

Training

DX basics

DX staff training
Prepare programs

Leading-edge IT
professionals’ training

e-learning service

44

Special Feature Roundtable Discussion:
TIS INTEC Group’s Human Resources Strategy x Business

Under Medium-Term Management Plan (2021–2023), the TIS INTEC Group seeks to accelerate structural transformation
through an improvement in the value of DX services provided. Realization of this goal hinges on human capital, theGroup’s most valuable management resource. Efforts to enhance human capital are discussed in this roundtable.

Diversity and sense of unity are TIS INTEC Group
strengths* For details on the TIS INTEC Group’s human resources strategy, go to page 40.

Oka: Right now, the Group is working through Medium-Term
Management Plan (2021–2023), which highlights the themeof improvement in the value of DX services provided. Suchvalue is generated through co-creation with clients. Our role is
to guide clients in their DX efforts as a digital mover—the
mission centerpiece of OUR PHILOSOPHY. Enhanced humancapital is essential for us to lead the transformation and earn

Takayanagi: TIS has always viewed human resources as its
most valuable management resource, and this perspective
permeates the Group as well. We have established anenvironment and systems that enable each and every
employee to embrace challenges, and we vigorously invest in
human resources. Under OUR PHILOSOPHY, growth is defined
as better value exchange with stakeholders, but if this concept
is applied to the relationship between employees andcompany, then growth as a company would be reliant on astrong work ethic among employees and a high level of job
satisfaction, achieved through successful planning andimplementation of various measures by the Human Resources
SBU, including hiring, training and seminars, workstyle reformand compensation.
To co-create with clients as a digital mover brightly
coloring the future, as Ms. Oka referenced, we must strive to45

Oka: To put it another way, the biggest role that HR plays is increating an environment where all employees can work withpeace of mind, enjoy fair and equitable learning opportunities,
and experience new workstyles, because this motivates
employees and improves job satisfaction. If you think about
HR from a business angle, markets are different for eachbusiness unit and so are the human resources best suited to
the respective market and thus the recruiting division. In hiring
and training new employees, it is important to cultivate asense of unity. At the same time, HR operations being alignedwith the diversification of business activities is also important.

*Engaged in data analysis and AI consulting businesses, Miotsukushi Analytics
Co., Ltd., became a TIS consolidated subsidiary in August 2020.

46

Corporate Information/Data

the trust of clients, and so I’d say improvement in the value of
DX services provided and our human resources strategy are
intricately connected.

Platform for Value Creation

Speedy response to diverse needs of business divisions isessential for improvement in value of DX services
provided

Growth Strategy for Value Creation(From left)
At TIS, Executive Officer, Deputy Division Manager, Corporate Planning SBU, and Department Manager, Corporate Planning Dept. Reiko Oka
At TIS, Executive Officer, and Division Manager, Human Resources SBU Kyoko Takayanagi
At TIS, Director, and HRBP (Human Resources Business Partner), Business Innovation Promotion Dept., Business Innovation Unit. Sachiko Hara
At TIS, Department Manager, Data Analytics Business Promotion Dept., Business Innovation Unit; and at Miotsukushi Analytics, Co., Ltd., Director andDivision Manager, Consulting Division Shunsuke Masaki

Masaki: The Business Innovation Unit, where I work, wasquick to connect with an HRBP. As a unit driving the Group’s
DX business, our activities hinge on consulting operations
executed by some 200 people across four teams: DX
consulting; project management; AI integration and robot
platform creation; and data analysis.
DX has become a buzzword, but many clients are not surewhat to do. That is where the consulting team comes in—to
identify client needs and issues of concerns and then lay out astrategy that guides clients on how to approach the DX
process.
The Data Analytics Business Promotion Department,
which I manage, comprises professionals who analyze data,that is, clients’ management resources. I hold a concurrent
position as the manager responsible for Miotsukushi Analytics
operations. Data analysis is key to DX and, as a cohesive unit,
the TIS INTEC Group plays a composite role in supportingclients’ efforts to realize DX. Under Medium-Term
Management Plan (2021–2023), TIS aims to expand theGroup’s pool of DX consultants to more than 500. But
growing the DX business will require more than justconsultants. The Group urgently needs data analysts, UX
designers and a variety of other DX professionals—a categoryof human resources not previously well populated within theGroup—and so the emphasis is on hiring and training DX
talent. As a precursor to restructuring in the Human Resources
SBU, the Business Innovation Unit welcomed Ms. Hara as an
HRBP to quickly address HR needs within the unit.

Takayanagi: Business units, like the Business Innovation Unit,
in which an expert in HR has been given a dedicated place as
the division’s HRBP, are still few in number. But there are justover 10 people in business units at TIS where someone fulfills
the HRBP role along with divisional responsibilities, and the
Human Resources SBU’s HRBP Office has just under 10 staff,
so about 20 people in total are involved in HRBP duties.
The function of an HRBP is to promote HR measures
matched to business diversity and aligned to the needs of thebusiness unit. Take hiring for example. At TIS, hiring new
graduates is handled exclusively by the Human Resources SBU,
while career recruitment is undertaken mostly by business
units. One of an HRBP’s primary missions is to support andpromote the formulation of career recruitment strategies. In
the Business Innovation Unit, the designated HRBP has
extensive experience in HR management, which translates into
great support for career recruitment. In recent years, the unit
has thus been able to attract mid-career hires with remarkably
strong qualifications.

TIS INTEC Group Value Creation

Hara: Even before joining TIS in 2021, I worked as an HRBP
while fulfilling my role as a director in a human resources
division. The duties assigned to an HRBP vary by company, but
at TIS, at least in the case of the Business Innovation Unit towhich I belong, the role of an HRBP is more than handlinggeneral HR affairs. At TIS, an HRBP acts as a strategic HR
partner to the head of the unit to achieve the business planand provide high value to society through services provided,
supporting unit growth and implementation of strategies frompersonnel and organizational perspectives.
The job of an HRBP starts with the business strategy
drafted by a business unit. Likening the business unit to acompany, the HRBP works alongside business unit
management to determine the best way to reinforce structural
capabilities so that the business unit can achieve its targets.
The HRBP is tasked with planning and promoting HR
measures.
As an HR professional, I formulate HR strategy forbusiness units using my HR consulting capability, and I importcompanywide HR strategy—talent management and initiatives
to sharpen and elevate employee skills—into business units,gathering feedback from business units and conveying it to
the Human Resources SBU. In this way, I act as a bridge so that
we can formulate coordinated responses.

Top Message

elevate and sharpen the skills of our human resources. Eachbusiness unit drafts its own business strategy, and for business
units to realize their respective goals, the Human Resources
SBU had an important part to play, too, developing anorganizational structure that facilitates flexible and speedy
responses to diverse personnel issues and needs.
In 2021, the Human Resources SBU was split along threefunctional lines: human resources planning, human resources
services and human resources business partner (HRBP). HR
planning covers preparation of strategies to elevate andsharpen the skills of employees throughout the Group; HR
services plans and manages HR operations, such as
recruitment, retirement, transfers and employee welfare
programs; and an HRBP is a person who identifies HR issues ina business unit, presents solutions and thereby contributes toenhanced activities in that unit.
The HRBP Office, formally established in fiscal 2022, isbuilding a structure in fiscal 2023 that enables HRBPs
belonging to the Human Resources SBU and full-time HRBPs in
business execution units to cooperate with one another topromote HR strategies closely aligned with business activities.

Introduction

Define human resources strategy linked to management strategy

Takayanagi: The Human Resources SBU also has the back ofeach and every employee in their embrace of newchallenges. Toward that end, with the determination tochange the Group through HR, I will work with business
units to promote HR investment measures characterized byflexibility and a sense of speed.

Masaki: Improvement in the value of DX services provided is a
key theme in the current medium-term management plan, but

TIS Career Frame (Personnel Development Model)

Human Resources Structure/HRBP-Related Chart

TIS Career Frame (Personnel Development Model)

Human Resources Structure/HRBP-Related Chart

Category

Field (Specialization)

・・・

Business consultant
Consulting

Stage (Differences in role)

Industry consultant

TIS Human Resources SBU
Manager responsible for HR

Business function consultant
Businessinnovation

TISINTEC
INTEC
Group
TIS
Group

Producer
HR planning Support

UX designer

Solution designer

Data scientist
Project manager

Implementation

Cooperate

HR services

Corporate

PromotemeasuresCooperation /promotion
Provide HRservices

Segment owners /group company
management
TIS managers
Business-side HRBP
Employees

Job categories ofBusiness Innovation
Unit

Architect
Sharedservices

Application specialist
IT specialist

Sales

HRBP

Robotics
・・・・

Data science

Strategy partner

Acknowledge/decideAI

Solution design

Business side

Corporate Information/Data

Masaki: Unlike recruitment, though, initiatives to promote a
better workplace culture take time to produce results. But forme personally, opportunities, particularly the BIU Forum, have
granted me access to the honest opinions of young
employees, and I realize that executives need to listen tocomments from the floor more often. I think the forum willkickstart more opportunities for communication.

Hara: TIS has taken an extremely robust approach withmeasures to elevate capabilities groupwide, including in-house
recruitment and seconding employees to group companies like
Miotsukushi Analytics to reinforce the DX talent pool. Behind
this approach is the idea that enhanced collaboration within
the Group will not only grow TIS’ businesses but also boost
the value of DX services provided in a way unique to the TIS
INTEC Group. HRBPs support business growth from bothhuman resources and structural perspectives, walking hand inhand with their assigned business unit to address HR issues
while also looking beyond the business unit to align measures
along the Group’s primary trajectory.

Platform for Value Creation

Hara: In terms of realizing Group Vision 2026, efforts tostrengthen divisional capabilities through greater engagement
has taken on renewed importance as a way to boost
performance within each division amid diversifying
employment formats and evolving perceptions of value.
Individual sections in the Business Innovation Unit, such as
those focusing on consulting and data analysis, possess
advanced capabilities. But to elicit a higher level of team-likesolidarity and give the whole unit the ability to offer higher
value, we initiated the BIU Forum, a two-year project launchedin 2022 to strengthen HR engagement by promoting mutualawareness of all operations. The forum transcends divisional
barriers, regularly engaging 200 people across the unit inconversation about what’s happening. As an initiative, it also
promotes efforts to build action plans and promote unilateralunit-specific measures.
TIS provides various corporate and Human Resources
SBU–issued information, including topics related to OUR
PHILOSOPHY and the results of the employee awarenesssurvey. By analyzing and internalizing this information from apersonal perspective, everyone gradually understands thebenefit—the joy, if you will—in taking ownership of theprocess to create a structure that makes work exciting.

Takayanagi: While HRBPs implement various HR measuresfine-tuned to each business unit, as Ms. Hara does in theBusiness Innovation Unit, the Human Resources SBU sharesinformation on programs and initiatives with other business
units that can be implemented if applicable or necessary to theindividual business unit. The SBU also spearheads
companywide measures, such as system revisions based on
employee awareness surveys and feedback on existingmeasures.
In addition, at each company under the Group umbrella,
the human resources manager or human resources strategy
manager acts as the HRBP for that company. In this position,
the manager has access to information on HR issues at otherGroup companies and can apply the knowledge in-house toformulate and promote HR measures designed to achieve
respective business targets. But because business strategies
and business models vary from company to company within
the Group, measures ideal for TIS are not necessarily right for
all Group companies. Nevertheless, the trajectory offundamental HR strategies follows a common path, andefforts to raise the quality and speed of HR measures aligned
to business strategies are thus applied groupwide.
Another example of our work in the Human Resources
SBU at present is the revision of HR systems, including
performance evaluation and compensation systems, for
implementation in fiscal 2024.

HRDX /
Group HRsystemMarketingCorporate planning

Growth Strategy for Value Creation

47

Oka: Quite a bit of structural transformation is needed tosecure the strategic domains described in Group Vision 2026.
Strategies and issues that will push structural transformation
forward, on the theme of higher value in DX services provided,
are the focus of a monthly strategy discussion group. Here,not only HR strategy but all strategies are covered andopinions are shared. For example, it is certainly true that theBusiness Innovation Unit is a driver of DX, but divisions andGroup companies involved in system development—a wellestablished Group strength—have a significant pool of diverse
talent demonstrating extensive business knowledge as well as
system configuration experience and know-how. Employees
throughout the Group, including human resources in systemdevelopment operations, must understand the direction that
TIS is taking as a mover using digital technology. By the same
token, it is also extremely important for the management
team to deploy measures to encourage a virtuous cycle thatencompasses the whole Group.

TIS INTEC Group Value Creation

Hara: Hearing your comments reminds me that ultimately, an
HRBP is a partner in the truest sense—someone who is there
for the business unit and takes an end-to-end approach, fromrecruitment all the way through training and organizational
culture, so that the unit can provide value to society.
For example, in the Business Innovation Unit, I apply acareer development model TIS calls “Career Frame,” and I
formulate an HR plan, create an HR development system androll out concrete measures that underpin a stronger HR
structure. The unit has identified eight job categories under
the Career Frame that provide value to clients. People in thesejobs are referred to as Business Innovation Professionals. I build
a portfolio highlighting the number of people the unit requires
to execute operations, when they are needed, in which job
categories, and at what stage of a project. Based on theportfolio, I also design the HR development system and various
measures, including recruitment, so that the unit can
successfully carry out its business plan.

Link diverse division-specific characteristics, andmaximize value in DX services provided

the Group’s strength is in its overall ability to provide end-toend support, from consulting to system development. As astructure cutting across the Group, the Business Innovation
Unit has many opportunities to work with account-based units
serving clients in the finance and industry sectors and toaddress concerns regarding client-side DX. We bring strategic
consulting skills. They bring insight into client businesses. Addin access to the forte capabilities of Group companies, andnow TIS can provide the best possible solutions to clients’ DX
needs.
Speaking specifically to the activities undertaken by myteam in the Business Innovation Unit, we apply a systemcoordinated with Miotsukushi Analytics, a TIS subsidiaryspecializing in data analysis and AI. TIS provides consulting andsystem development know-how, while Miotsukushi Analytics
provides instruction on data analysis and AI. Personnel
exchanges, to utilize reciprocal strengths within the Group,also help to accelerate development of DX talent.

Top Message

Masaki: I think the reason that the Business Innovation Unit
spearheaded the HRBP movement was because this unit, moreso than any other, is going to be focused on human resources.
System development divisions have leverage—knowledge built
on experience and know-how accumulated through businessactivities tracking back to the earliest days of the Group—as
well as consulting teams specializing in cashless operations. In
comparison, the Business Innovation Unit’s consulting
structure does not address services on specific products.
Instead, consultants analyze issues and needs that transcendclient lines, substantiate results and consider approaches toachieve innovation. This requires not only a high level of
specialization but also generalist skills applicable to client-sidebusinesses. Consequently, it is not knowledge so much as thetalented people themselves that become leverage. We mustalso consider projects in domains different from the contractdevelopment activities that the TIS INTEC Group has been
involved in for many years. In-house personnel transfers andtraining are not enough. We must actively source goodcandidates from outside the Company as well.
However, right now, with the employment market
booming, a successful hiring program demands that we
present recruitment agencies with a clear message about our
strategies and the competencies we require. We also have tomaintain especially close ties to these agencies: it was
impossible to execute the career recruitment process alongwith regular operations on our own. With HRBPs like Ms. Haraat work, we have most certainly raised the speed and qualityof recruitment results.

The HR strategy specific to each business unit must alignwith the overall HR strategy set by the Human Resources SBU,
and I will work closely with HRBPs assigned to other business
units and with Human Resources SBU managers.

Introduction

Essentially, HR strategies have to reflect qualities of diversity
and unity that characterize the TIS INTEC Group.

Define role and skills by
field and stage48

Executive Vice President’s Message 2 (Financial Investment Strategy)
g Overview of Financial Investment Strategy

Financial Policy

Sustainable Improvement in Corporate Value

Sustainable Improvement in Corporate Value

Masahiko Adachi

Anticipated EPS Growth
(Yen)

EPS

ROE

10% CAGR

12.5–13%(Continuous growth)(Aiming for 15% in long term)

300

100
Promotegrowth investment

Strengthen
return to shareholders

Growth investment overthree years

Total return ratio

0

Fiscal2021

16

Fiscal 2024 12.5–13%

12
10
8

Will leverage structural transformation and become
corporation capable of stable ROE of 15%
Fiscal2021

Fiscal2022

FiscalFiscal2023
2024(estimates) (estimates)

Fiscal2027(estimates)

g Progress of Financial Investment Strategy

We will implement treasury stock buyback seeking capital optimization, based on changes in management
quality paralleling progress in structural transformation.
Profit growth and heightened ability to generate stable cash flow fueled by progress in investment-based structural transformation

Strategic Domain Ratio

35%

Structuraltransformation

Operating income

ProfitgrowthOperating cash flow

¥54.7
billionInvestment
Finance
Strategy
promotion
Fiscal2021

FiscalFiscal2024
2027(estimates) (estimates)

Investment Strategy

Fiscal2018

Fiscal
2019

Fiscal
2020

・TIS Chiyoda Systems Inc.
・Miotsukushi Analytics Co., Ltd.

Profit growth and heightened ability to generate cash flow, paralleling
growth in strategic domains
Promote capital optimization based on solid management platform
Execute treasury stock buyback worth about ¥24.5 billion tocomplement regular return to shareholders■ M&A, Capital contribution

Fiscal2018

Fiscal
2019

・Investment in techcompany, etc.

Fiscal
2020

Fiscal2021

Fiscal2022

Corporate Information/Data

Financial Strategy

Fiscal2022■ Investment to strengthen ・Grab ・MFEC Public Co., Ltd.

in-house capabilities

Progress in structural transformation through enhanced investment
・Maintained M&A activity to grow strategic domains
・Continued to reinforce software development and R&D capabilities
・Enhanced investment in human resources, including compensation andeducation

Fiscal
2021

Platform for Value Creation

Fiscal2018

51%

60% over 70%

Operating Income, Operating Cash Flow

Growth Strategy for Value Creation

49

Fiscal2027(estimates)

14

Maintain A rating
Have cash and deposits
equivalent to two months’ worth of monthly sales
rising 3 points to 54%. Consequently, net cash provided byoperating activities reached ¥56.1 billion, much higher than in
the past, and our ability to generate cash from our businesshas increased. In addition, we reduced cross-shareholdings by¥7.5 billion and posted ¥7.0 billion in proceeds from sales ofshares in subsidiaries following a review of our businessportfolio centered on strategic domains.
As a result, ROE rose 3.2 points year on year to 14.0%,
exceeding the medium-term management plan target. I
believe the Group’s policy of increasing the net income ratio todrive higher ROE was the main factor in achieving thisoutcome, although extraordinary profits resulting fromreduced cross-shareholdings and a review of our businessportfolio did have a positive impact.
The progress of the aforementioned measures has helped
transform the Group’s “quality of management,” and I feel weare in a strong position to make further progress in the future.
To further ensure our ability to achieve our long-term ROE
target of 15%, in fiscal 2023, ending March 31, 2023, weplan to conduct share buybacks totaling ¥30 billion. These
include around ¥5.5 billion in shareholder return as part of ourcommitment to achieving a total return ratio of 45% (target),and an additional ¥24.5 billion in line with efforts to optimize
our capital structure.
To meet the expectations of stakeholders, we willcontinue striving to achieve sustainable improvements incorporate value by making robust growth investments andpracticing capital cost-conscious management. In the process,we will aim to sustainably increase corporate value by
optimizing our capital structure and improving capitalefficiency, in addition to achieving profit growth.

FiscalFiscal2023
2024(estimates) (estimates)

TIS INTEC Group Value Creation*Treasury stock held by TIS will,in principle, be limited to 5% of
total number of shares issued,
with any excess canceled.

Fiscal2022

Anticipated ROE Improvement(%)

Enrich dividend
per share

Maintain financial health

Under the financial investment strategy of Medium-Term
Management Plan (2021–2023), we will strive to achievesustainable improvement in corporate value by balancing
robust growth investments to promote structuraltransformation with enhancing shareholder returns.
Specifically, we will make aggressive growth investmentsof around ¥100 billion to promote structural transformation(¥30 billion for internal reinforcement and ¥70 billion for
M&As and external investments) while strengthening
shareholder return with a target total return ratio increasingfrom 40% to 45%. In the process, we aim to achieve a
compound annual growth rate for earnings per share of 10%
and return on equity (ROE) of 12.5–13.0%. To realize bothproactive growth investments and enhanced shareholder
returns, it is essential to improve our cash-generation
capabilities while ensuring financial soundness. With this inmind, we will clearly define our targeted cash allocations andbalance sheet structure and promote each management
measure accordingly.
In fiscal 2022, we made growth investments andpromoted high-value-added businesses by concentrating
management resources in strategic domains. As a result, wemade steady progress in structural transformation andachieved improved profitability. Thanks to an increase in the
gross profit margin, we were able to absorb a ¥2.18 billion
increase in prior investment costs to promote structuraltransformation and a ¥2.82 billion increase in costs
attributable to office reforms to promote new workstyles. As aresult, operating income increased 19.7% year on year to¥54.7 billion, and the operating margin rose 1.1 points to
11.3%. The strategic domain ratio also improved as planned,

Seeking continuous growth exceeding 10% CAGR

45%

About
¥100 billion

Investment discipline
ROIC 8%

10% CAGR

200

Top Message

Representative Director,
Executive Vice-President

Introduction

We will strive to achieve sustainable improvement in corporate value by balancing robust investment ingrowth fields with management conscious of capital costs.

Return to shareholders
Acquired treasury shares

About ¥5.5 billion＋

Capital optimization
Acquired treasury shares

About ¥24.5 billion

50

g Basic Policy on Return to Shareholders

We will improve the value provided in DX services and underpin efforts to acquire new technology throughrobust investment of about ¥100 billion.
Growth Investment

New SPB¥30 billion Human

Promote investment to attract
human resources for businessareas of focus
Continue to invest in programs
to hone professional skills of
employees

Stronger value chain

Emerging Tech

Joint creation

X - TechDX Offering

Tech Innovation

Fiscal 2022
(actual)Fiscal 2023
(estimates)(*Rough calculation)

10.0

5.7

3.0

Investment in R&D to acquire advanced technologies

12.0

2.7

Sub-total

30.0

10.6

9.0

70.0

2.4

undecided

Software investment to create new services

8.0

Investment in human resources to fuel structural transformation＋

2.0

MaintainfinancialhealthStrengthen
return toshareholders

g Status for Return to Shareholders

・Implemented ¥4 increase in year-end dividend for fiscal 2022. In line with policy on total return ratio (after adjustment) of 45%.
・In fiscal 2023, TIS will complement normal portion of return to shareholders with treasury stock buyback of ¥24.5 billion.

2.5
3.5

Fiscal 2022 (actual)
Annual dividend per share

Fiscal 2023 (estimates)(Capital optimized)(Normal)–¥47¥11.3 billion–¥11.3 billion

27.9% (30.7%)

30.5%

–

30.5%

¥4.47 billion¥5.5 billion¥24.5 billion¥30.0 billion *2

39.3%（43.1％）

45.0%

–

110.3%¥44¥47(Compared with estimate +¥4)

(YOY change +¥3)

¥11.0 billion

Payout ratio (After adjustment * )g Cash Allocation, Structure of Balance Sheets

Acquired treasury shares

We will balance robust growth investment with stronger return to shareholders, based on cash frombusiness activities.

Total return ratio

Investment to expand strategic domain business

100.0

Total

13.0

‒

Total dividends
1Cash Allocation

Structure of Balance Sheets

Investment
About ¥100 billion
Growth investment
M&A/software

Growth investment
R&D/
personnel investment

Other Liabilities

Robust growthinvestment on conditionof investment discipline
Cross-holdings culled if
holding criteria not met

Procurement matched toinvestment opportunities
on condition of retaining
A rating

51

Annual: ¥35

¥31

¥10

¥11

¥13

¥15

Fiscal
2020

Fiscal2021

Fiscal2022

Fiscal2023

Dividends (interim)
Dividends (interim,
estimate)

Total Acquired Treasury Shares (Millions of yen)

43.1%
42.8% (After adjustment* ) 45.0%(Estimate)

1

39.8%
25.7%

Dividends (term-end)
Dividends (term-end,
estimate)a. Income from operating activities(After deducting corporate and othertaxes and non-controlling interests)

30,000*2
About 24,500(Estimate)

¥32

¥24

b ＝45％ (Yardstick)
a

31.9%

30.7%

(After adjustment*1)

30.5%

4,139

4,470
3,029
About 5,500

Fiscal
2020

Fiscal2021

Fiscal2022

Total return ratio

Fiscal2023

Fiscal
2020

Fiscal2021

Fiscal2022

Fiscal2023

Payout ratio*1 Based on profit (after income taxes and income
attributable to non-controlling interests)*2 Upper limit based on treasury stock buyback
announced May 11, 2022.

Corporate Information/Data

ROE Growth Structure(Estimate)¥20
EquityNon-business assets

Strengthen
return to shareholders
About ¥50 billion

Annual: ¥30

Interest-bearing debt

Business assets

Facility maintenanceinvestment

Asset optimization/fund procurement,
including cross-holdings

Current assets

Total Return Ratio and Payout Ratio

Annual: ¥47

Annual: ¥44

Allocation

Cash from businessactivities

Changes in Dividends per Share

Basic stance on return to shareholders
Fuller return matched to business growth

g Cancellation of Treasury Stock

Fiscal 2021 (actual)

Fiscal 2024 (estimates)

Fiscal 2022 (actual)

ROE

10.8%

12.5%〜13%

14.0%

Date of cancellation

Number of shares cancelled

Percentage of total number ofissued shares prior to cancellation

Net income ratio

6.2%

7.8% Structural transformation, investment results

8.2%

September 28, 2021

12,206,400

4.6%

Total asset turnover ratio

1.08

Financial leverage

1.63

Slight drop Increase in business assets paralleling growth investments
On a par Maintain financial health

1.04
1.65

Platform for Value Creation

Stable generation of cash

(After adjustment *1)(Total)Growth Strategy for Value Creation

Medium-Term
Management Plan(Three years total)(Billions of yen)

Promotegrowthinvestment

TIS INTEC Group Value Creation

Pursue research into
leading-edge technology
Engage in applied research toaccelerate market entry for
new business activities

Promote growth investment
・Take vigorous approach to investment in human resources as well as
upfront investment, M&As and other growth investment opportunities.
Respect investment discipline ROIC of 8%, with maximum investment of¥100 billion over three years. Provide higher level of DX value and work toacquire new technology to achieve strategic domain ratio of 60% andoperating margin of 11.6%.
Maintain financial health・Have cash and deposits equivalent to two months’ worth of monthly sales,
mindful of maintaining A rating.
Strengthen return to shareholders
・With yardstick of 45% for total shareholders’ return ratio, goal is tocontinuously enrich dividend per share.
・The amount of treasury stock held by TIS will, in principle, be no more than
5% of total number of shares issued, and any shares exceeding this limit
will be canceled.

Top Message

R&D

resources

Seek more appropriate capital composition and enhanced capital efficiency, with efforts to promote growthinvestment, maintain financial health and strengthen return to shareholders —all in the right balance.

ASEAN

Robust investment themes:
Social issues where we can contribute solutions
Urban concentration/
Financial inclusion
rural decline
Low-carbon/
Health concerns
decarbonized society

Continue investment insoftware development forindustry platform building

Software
Internal
reinforcement

ChannelImplement strategic M&As
Contribute capital to accesstechnology and know-how andpromote joint business pursuits¥70 billion* Based on profit (after income taxes and income
attributable to non-controlling interests)

b. Total return to shareholders

M&A(capital contribution)

Constantly enrich thedividend

45%

Investment Policy

Upper limiton treasury stock holdings
at 5%

Dividends per share

Total return ratio*

Introductiong Growth Investment

Treasury shares (approximately ¥24.5 billion) planned for acquisition in fiscal 2023 as part of a process to improve capital structure will be canceled, inview of corporate policy and issues, namely, dispeling concerns about future stock dilution.

52

Business Strategies by Segment

Business Results by Segment (Year ended March 31, 2022)

Group Formation (As of April 1, 2022)
Domestic

Industrial IT Business

Regional IT Solutions

Segment owner

Segment owner

Segment owner

Segment owner

Segment owner

TIS
operating divisions

TIS
operating divisions

AGREX INC.

QUALICA Inc.

TIS West Japan Inc.

TIS Solution Link Inc.

TIS Hokkaido Inc.
TIS Tohoku Inc.
TIS Nagano Inc.

Segments

Business Process Management
Financial IT BusinessIndustrial IT Business

1.4%

28.1%

Others

30.1%

Net sales

Operating income[operating margin]¥103.1 billion¥4.6 billion[4.5%]

Regional IT Solutions
Adjustments

Net salesby business category

Strategic domain image

Offering Service Business
IOS

IOS

Addresses issues related to businessprocesses with IT technology, businessknow-how and skilled human resources toprovide more sophisticated, more efficient
outsourcing services.

¥4.9 billion[11.6%]

Considers business and IT strategies
together and leverages both, and supportsbusiness progress using expert businessand operating know-how specific to thefinance industry.

¥91.6 billion¥12.3 billion[13.5%]

Miotsukushi
Analytics Co., Ltd.
ULTRA Inc.

SPB

Industrial IT Business

Group
out

Chuo System
Corporation¥108.7 billion¥15.3 billion[14.1%]

SPB
IOS

SPB

Regional IT Solutions

Core strategic domain for growthOffering Service
Business

IT Offering Service (IOS)

Other

Business Process
Management

Business Function Service (BFS)

Financial IT
Business

Strategic Partnership Business (SPB)

Industrial IT
Business

Strategic Partnership Business (SPB)

Regional IT
Solutions

Strategic Partnership Business (SPB),IT Offering Service (IOS)*In addition to segments noted above,
there is the Other segment.

*A business segment for business activities that do not
fall under other reporting segments. Consists mainly ofancillary businesses providing all sorts of IT services.

¥156.2 billion¥16.4 billion[10.6%]

IOS
BFS¥6.3 billion¥0.7 billion

Adjustments–¥26.5 billion¥0 billion

Consolidated Results¥482.5 billion¥54.7 billion

Software development
Operation and
Cloud Services
Product and software sales

SPB
IOS
BFS

Number of companies
Offering Service Business:
TIS, 27 consolidated subsidiaries (domestic 4, overseas 23), and 72 equity method affiliates (domestic 1, overseas 71)
Business Process Management: Four consolidated subsidiaries (domestic 3, overseas 1)
Financial IT Business:
TIS, one consolidated subsidiary (domestic 1), and two equity method affiliates (domestic 2)
Industrial IT Business:
TIS, nine consolidated subsidiaries (domestic 6, overseas 3)
Regional IT Solutions:
Seven consolidated subsidiaries (domestic 7), and two equity method affiliates (domestic 2)
Other:
Five consolidated subsidiaries (domestic 4, overseas 1)
54

Corporate Information/Data

New reporting segment

Provides IT professional services extensively,
across regions and client sites, and collects
and develops this know-how as the sourceof solutions to support efforts to address
issues and promote business activities.

Promote growth strategies more effectively by meticulously applying a business model–specific management approach to operations
Turn offering services, representative of an upfront investment-style business model, into a business category, and accelerate shift toward service status
Turn regional IT solutions into a business category with a broad client base and promote IT professional services and solutions

Platform for Value Creation

Key Points of Change

Considers business and IT strategies
together and leverages both, and supportsbusiness progress using expert businessand operating know-how specific toindustry sectors other than finance.

Growth Strategy for Value Creation¥42.9 billion

BFS

Financial IT Business

TIS
Chiyoda Systems Inc.

MFEC Public Co., Ltd.

53

22.6%

Offering Service Business

32.4%

INTEC Inc.

Strengthen group collaboration

Industrial IT
Business

22.5%

Business Process Management
AJS Inc.

Financial IT
Business

9.1%

Configures services through own
investment based on best practices
accumulated groupwide and provides
knowledge-intensive IT services.

Merger NEOAXIS Co., Ltd.

BPO

19.0%

TIS INTEC Group Value Creation

Financial IT Business

Service IT
Business

8.9%

Top Message

Business Process
Management

Old reporting segment

21.4%

1.3%

Operating Income (Consolidated)¥54.7 billion-0.1% 8.6%

Offering Service
Business

TIS
operating divisions

Group
in

Net Sales (Consolidated)¥482.5 billion

Replace assets through investment and sale of non-corebusinesses to optimize business portfolio
Maximize business efficiency and Group synergies

TIS Inc.

TIS
System Service Inc.

*Segment sales include intersegment sales.

-5.5%

Emphasize optimal position of entities with strength
according to business modelTransfer businesses among entities (including national
health insurance, EDI, energy related services)

Introduction

Change in Reporting Segments
To promote further structural transformation, TIS implemented a change in the management structure of the TIS INTEC Group, and paralleling thischange, the Company implemented a business model–specific management approach in revising its reporting segments, effective from fiscal 2023.
The new reporting structure comprises six segments: Offering Services, Business Process Management, Financial IT, Industrial IT, Regional IT Solutions
and Other. Through these changes in reporting segments, we have clarified the authority and responsibilities of segment owners and set the stage forachievement of growth strategies utilizing the strengths of each Group company.

Business Process Management (BPM)

We will accelerate the shift toward service-style business byleveraging an upfront investment-style business model.
The Offering Services Business covers multiple domains, including payment services, which turnknowledge gained through systems integration for financial institutions into a service, along withdigital marketing, healthcare and business management information services. This segment is also
involved in global operations, a priority area for TIS. *For details, please go to page 37.
Among TIS’ social issue solution services, which target social transformation using digitaltechnology, the Offering Services Business makes a significant contribution in the fields offinancial inclusion and health concerns.
In fiscal 2022, the segment turned in favorable results, underpinned by payment services,which benefited from solid demand for services to address the growing popularity of cashless
payment options. The upfront investment phase has concluded, and now we can look forward toenhanced profitability.
To achieve targets under the current medium-term management plan, the Offering Services
Business will promote service-style businesses that will become a hallmark feature of the Group’s
structural transformation. The segment will function as a driver of growth, fueled by higher profits.

Toward achievement of medium-term management plan (growth strategies)
Seek growth in payment services, which hinge on CreditSaaS, shift toward recurring business, and improve profitability.
Seek growth through synergies among payment services, digital marketing and healthcare, and improve added value through vertical integration ofcloud and security structures.
Net Sales
ActualEstimates(Billions of yen)

ActualEstimates

4.6

Fiscal 2024
(Initial plan)

Estimates(Billions of yen)

Fiscal 2022
(Actual)

44.9

45.5

42.9

6.1

Fiscal 2023
(Estimates)

Medium-term management plan

8.8%
9.5

Fiscal 2024
(Initial plan)

Fiscal 2022
(Actual)Fiscal 2023
(Estimates)

Fiscal 2024
(Initial plan)

ActualEstimates

Operating margin

11.6%

11.7%

4.9

5.2

Fiscal 2022
(Actual)Fiscal 2023
(Estimates)(Billions of yen)

Medium-term management plan

10.6%

4.8

Fiscal 2024
(Initial plan)

Corporate Information/Data

TopicsFor press releases related to this segment, please visit the following pages:
TIS turns ULTRA Inc., an international prepaid payment servicer, into a consolidated subsidiary (Japanese only)
https://www.tis.co.jp/news/2022/tis_news/20220509_1.html
TIS’ RoboticBase®, software that facilitates operation of multiple service robots, including those for delivery service, to be installed at
Tokyo Midtown Yaesu (Japanese only)
https://www.tis.co.jp/news/2022/tis_news/20220422_1.html
TIS teams up with University of Occupational and Environmental Health, Japan, for joint research on structure to realize strategic healthinvestment and provides Sustainacare personalized healthcare program (Japanese only)
https://www.tis.co.jp/news/2021/tis_news/20220328_1.html
55

ActualOperating Income

Platform for Value Creation

5.7%
4.5%

Fiscal 2023
(Estimates)(Billions of yen)

Medium-term management plan

106.3
103.1

Net Sales

Operating margin

108.5

Business environment
Labour shortages and workstyle reforms are unlikely to change,
fueling gradual growth of the BPO market.
Demand is solid in the insurance sector, which comprises about
50% of AGREX’s BPO business.
Demand for digitization of business processes is growing.

Toward achievement of medium-term management plan (growth strategies)
Boost added value beyond simple outsourcing through digitization of business processes.
Augment presence in forte sectors, such as insurance and securities, by working to cultivate position in new markets.
Invest in next-generation BPO production platform and translate results into future growth.

Operating Income

Medium-term management plan

Fiscal 2022
(Actual)Strengths
Unique methodology integrating business process know-how built
on more than half a century of hands-on experience.
Comprehensive capabilities optimizing full spectrum of businessprocesses through fusion of business process outsourcing (BPO)
and systems integration services.
Business knowledge based on track record of outsourcing services
for insurance sector.

Growth Strategy for Value Creation

Business environment
Cashless market continues to grow. Government continues to back
FinTech, Big Data, AI and data use and application.
Active trends in financial and non-financial approaches, increasing
foreign presence in domestic cashless market, and wider
application of digital currency.
Despite positive impact of ASEAN recovery, negative impact ofslowing Chinese economy is reverberating in Japan, dampening
economic outlook.

AGREX President

TIS INTEC Group Value Creation

Strengths
Ability to utilize industry knowledge accumulated through systems
integration operations and provide upfront investment-styleservices incorporating universal services as standard features.
Quality, cost and delivery (QCD) management capabilities built on
experience in large-scale systems configuration.

Tatsuro Unemori

Based in digital technology and business know-how, from an administrative perspective, BPM is asegment that helps clients make the most of business processes. It comprises outsourcing, contact
center operations and system configuration as well as DX support paralleling use of IT solutions.
To achieve the targets laid out in the medium-term management plan launched in April 2021,
AGREX will lead the segment in actively striving to expand business paralleling structuraltransformation. Fiscal 2022, the first year of the plan, was marked by higher sales and higher
income, thanks to wider demand for contact center operations and DX support.
Going forward, as the workforce shrinks due to the graying of society and a declining
birthrate, companies will increasingly look to outsourcing as a way to deal with expanding anddiversifying business process needs. We will respond proactively with high-value-added businessprocess services that combine industry and operational know-how accumulated groupwide withthe digitization of business processes, and thereby help clients reinforce and grow theirbusinesses. In conjunction, we will contribute to solutions that address social issues throughaccess to services that boost productivity.

Top Message

Kiyotaka Nakamura
TIS Senior Managing Executive Officer,
Division Director of Digital Transformation Business Unit

We will actively strive to expand business, paralleling structuraltransformation, and aim for higher added value through digitizationof business processes.

Introduction

Offering Services Business

TopicsFor press releases related to this segment, please visit the following pages:
Opened Digitization Center as first stage in Evolution BPO concept to turn back-office operations into digital, shared services (Japanese only)
https://www.agrex.co.jp/news/pdf/508

56

Industrial IT BusinessAs a true business partner to clients, we will co-create new
businesses and contribute to solutions that address social issues.

Shinichi Horiguchi

Business environment
As a business that supports social infrastructure, this segment
enjoys solid demand, underpinned by brisk financial IT market
activity.
Upswing in IT investment, especially for DX.
Intensifying competition among Fintech and SaaS providers.

95.7

96.0

Estimates

Net Sales

Operating margin(Billions of yen)

Actual

13.5%

13.6%

Medium-term management plan

12.3

13.0

13.5%
13.0

108.7

Fiscal 2022
(Actual)Fiscal 2023
(Estimates)

Fiscal 2024
(Initial plan)

Fiscal 2022
(Actual)Estimates

Operating Income(Billions of yen)

110.7

Medium-term management plan

Actual

14.1%

109.0

Estimates

Operating margin

14.4%(Billions of yen)

Medium-term management plan

12.8%

15.3

15.9

Fiscal 2022
(Actual)Fiscal 2023
(Estimates)

14.0

91.6

Fiscal 2022
(Actual)Fiscal 2023
(Estimates)

Fiscal 2024
(Initial plan)

57

Fiscal 2024
(Initial plan)

Fiscal 2024
(Initial plan)

Corporate Information/Data

TopicsFor press releases related to this segment, please visit the following pages:
TIS establishes tance Co., Ltd., a joint venture, with Japan Card Network (Japanese only)
https://www.tis.co.jp/news/2020/tis_news/20210310_1.html
Initiated proof of concept on self-sovereign identity (SSI) at facility in Shirahama, Wakayama Prefecture (Japanese only)
https://www.tis.co.jp/news/2021/tis_news/20211109_1.html

Fiscal 2023
(Estimates)

Platform for Value Creation

Medium-term management plan

ActualGrowth Strategy for Value Creation

Operating Income(Billions of yen)

Business environment
Favorable IT investment demand driven by active interest in DX,
especially among large corporations.
Electric power sector still on recovery track but impact of high priceof oil requires careful monitoring.

Toward achievement of medium-term management plan (growth strategies)
Respond to IT demand from core clients, and improve value provided in DX services.
Cultivate industries through lateral application of insights about processing- and assembly-based manufacturing, and establish various revenue
models based on co-creation activities with clients.

Toward achievement of medium-term management plan (growth strategies)
Respond to IT demand from core clients, particularly that related to credit cards, and improve value provided in DX services.
Establish various revenue models based on co-creation activities with clients.

Net Sales

Strengths
Knowledge accumulated in processing- and assembly-based
manufacturing and energy sectors.
Platform-building capabilities for ERP templates using accumulated
know-how.
Solid relationships of trust with core clients built through ability torespond to need for high-quality systems.

TIS INTEC Group Value Creation

Strengths
Overwhelming market share in services related to core systemdevelopment for credit card companies and branded debit cards.
Technologies and know-how accumulated in handling core systemdevelopment and operation for major credit card companies.
Solid relationships of trust with core clients built through ability torespond to need for high-quality systems.

Estimates

Masahiro Hosokawa
TIS Senior Managing Executive Officer,
Division Director of Industries & Public Solutions SBU
and Enterprise Consulting Business Unit

The Industrial IT Business supports clients across a broad base of industries and the public sector
in all aspects of system lifecycle, from consulting through system configuration, systemenhancement and system operation.
Our track record includes projects for members of the energy, processing- and assembly-based
manufacturing and engineering sectors, and we bring our strengths in ERP consulting andmodernization services to our clients.
In fiscal 2022, the segment posted higher sales and higher income against a backdrop of
brisk IT investment by clients in their efforts to embrace DX.
The value we provide is steeped in a deep understanding of all industries, and it has earned
high praise from our clients. In combination with measures to boost productivity, value drives
profitability on a groupwide basis. To achieve our targets under the medium-term management
plan, we will cultivate knowledge specific to each sector and pursue lateral development ofsolutions to secure the trust of clients and expand business opportunities.

Top Message

The Financial IT Business provides one-stop support for the entire system lifecycle based on
specialized insights into the finance sector. This segment strengthens partnerships with clients inthe finance sector, which represents a core client base, and helps them find solutions tomanagement issues.
In fiscal 2022, the Financial IT Business achieved higher sales and higher income year on year,
reflecting an aggressive stance on IT investment, particularly DX, by many clients seeking to honea sharper competitive edge and restructure their businesses in response to major changes in theirbusiness environments caused by the COVID-19 pandemic.
As we address the growing need for IT in business operations where we can showcase
insights gained over many years, we will also engage clients in a process of business co-creation,
guided by the medium-term management plan. By creating new businesses, we help clients
expand business content and, by extension, provide solutions to social problems.
We will strive harder to become a true business partner of our clients.

TIS Senior Managing Executive Officer,
Division Director of Financial Industry SBU and IT Platform SBU

Actual

We will earn deeper trust from clients and expand business bycultivating industry knowledge and pursuing lateral development ofsolutions.

Introduction

Financial IT Business

TopicsFor press releases related to this segment, please visit the following pages:
With Carbony VPP platform, TIS supports electric vehicle (EV) introduction and total service expansion by Hokuriku Electric Power(Japanese only)
https://www.tis.co.jp/news/2022/tis_news/20220628_1.html

58

We will reinforce and expand business content by providing IT-driven
professional services and solutions and integrate both aspects ofbusiness while promoting a virtuous cycle.

INTEC President

Platform that supports value creation of the GroupE

S G

Estimates

ActualEstimates

160.0

158.5

10.6%
16.4

156.2

17.2

Constantly strive forgovernance that
promotes higher levelof trust from society

P.81

P.85

P.61

E S G

● Customer service points of contact(call center, website, main number)● Seminars, fairs and forums for clients● Publication of newslettersand technical brochures● Client satisfaction surveys● Regular meetings
Clients
and others

P.87● Local event participation● Cooperation and support for NGO/NPO social

contribution activities● Charity concerts● Opinion posts from website● Responses to relevant ministries/agencies andindustry associations
and others

Community/
Society

P.85(Billions of yen)

Medium-term management plan

10.9%

Sustainableimprovement instakeholder
engagement

Employees

Operating margin

Medium-term management plan

Contribute todecarbonized society
and recycling society

The TIS INTEC Group strives to build bonds of trust through communication with all
stakeholders, including clients, employees, shareholders and investors, and b­ usiness
partners, and to boost corporate value.

Operating Income(Billions of yen)

Governance

11.2%
18.0

P.89

● Company news, Group news
● Intranet

TIS INTEC Group● Personnel exchange groups,

Platform for Value Creation

ActualSocialStakeholder Engagement

Toward achievement of medium-term management plan (growth strategies)
Collect business insights through close ties with clients, turn the knowledge into solutions, and leverage lateral development of these solutions.
Enhance user structure support solutions and expand share of the national development-style solutions market.
Net Sales

Environment

Growth Strategy for Value Creation

Business environment
Operating environment for regional financial institutions
increasingly more challenging due to low interest rates andsluggish local economic conditions, leading to mergers andaccelerating polarization of scale.
Tangible trend among local governments to implement national
government–led standardized system, with standard specifications
announced in fiscal 2022.
Despite variation by industry and company, IT demand is on arecovery track, especially in medical-related fields.

The Group is promoting efforts focusing on E (environment), S (social) and G (governance)
as an important framework to support its value creation. In addition, TIS strives to build
bonds of trust through active communication with all stakeholders and to promote sustainable corporate value in harmony with the evolving values of society.

TIS INTEC Group Value Creation

Strengths
Extensive industry representation in client base, including local
governments, financial institutions, manufacturers, service providers
and aerospace companies from across Japan.
Solution development capability underpinned by network integration
across the country and synergistic effect with original services.
Track record includes integrated information solution F3 for financial
institutions; system implementation and operation for Federation of
National Health Insurance Associations; and implementation ofsolutions for regional banks and local governments.

Platform for Value Creation

Top Message

Takayuki Kitaoka

Hinging on INTEC, which is headquartered in Toyama Prefecture, Regional IT Solutions provides
IT-driven professional services over a wide area, such as a whole community or across clientcompany office networks within the prefecture and beyond, and also accumulates and develops
associated know-how, turning it into solutions that support clients’ efforts to address issues ofconcern and help promote business.
With offices all over Japan, not just in the area around Tokyo, INTEC contributes to regional
renaissance and community revitalization by providing original solutions and pursuing lateraldevelopment of solutions, which complement the strength of network integration, and by
engaging in joint activities with local governments on IT issues related to smart cities.
In fiscal 2022, demand for IT-driven professional services for clients in the finance sector was
brisk, leading to year-on-year increases in sales and income.
To build our IT-driven professional services, we will collect business insights through close ties
with our clients, turn the knowledge into solutions, and leverage lateral development of thesesolutions. On the solutions-side of business, we will enhance user structure support solutions andstrive to expand our share of the national development-style solutions market. As we reinforce
and expand both the solution and service sides of business and concurrently integrate these
aspects of business while promoting a virtuous cycle for top-line growth, we will achieve thetargets stated in the medium-term management plan.

Introduction

Regional IT Solutions

Primary methods ofcommunication with stakeholders

opinion exchange groups● Day at the office for children of

employees● President’s Caravan

and others

Fiscal 2023
(Estimates)

Fiscal 2024
(Initial plan)

Fiscal 2022
(Actual)Fiscal 2023
(Estimates)

P.88

Fiscal 2024
(Initial plan)● General meeting of shareholders

TopicsFor press releases related to this segment, please visit the following pages:
INTEC begins joint operation with two Toyama Prefecture–based cable networks (NICE TV and TST) on IoT platform for local governments
using regional network infrastructure (Japanese only)
https://www.intec.co.jp/news/2022/0413_1.html

59● Results briefing● Small meetings, domestic and overseas roadshows,participation in conferences● Information disclosure on IR section of corporate websites● Integrated Report● Business Report and others

Business
Partners

P.87

Corporate Information/Data

Fiscal 2022
(Actual)Shareholders
and Investors● Information meetings on policy (guidelines)● Creating opportunities for discussion (project information)● Engineer development and support (educational support, seminars)● New Year celebrations, informal social gatherings● Questionnaires, opportunities for opinion exchange and others

60

E

S G

GovernanceE

Message from the Chairman of the Board of Directors

Looking back on fiscal 2022

I will utilize my insights as an experienced executive tostrengthen governance.

External directors share their thoughts on topics to pursue in the future, andexpectations and issues of concern for the TIS INTEC Group as it pushes ahead
E S structuralG
withtransformation.

jargon and my interpretation of IT industry trends, so that they
were suitably prepared to participate in important boardroom
discussions. This facilitated more in-depth discussions andpromoted good decision-making.

Targeting enhanced corporate governance, conscious of the balance between
growth-oriented and profit-driven policies

Seeking stronger governance

An issue going forward is how to deepen discussions on
medium- to long-term management strategies, based onsustainability management.

Seeking higher corporate value through business execution divisions and the Board of
Directors

Fumio Tsuchiya
Director (external)

Working toward realization of corporate governance that draws on diverse humanresources to support global growth62

Corporate Information/Data

Naoko Mizukoshi
Director (external)(Partner, Leftright Law & IP)

As a member of the Board of Directors over the last year, I ascertained that the new business management andexecution structure was working properly and driving progress toward targets for the first year of the new
medium-term management plan. I also tracked the status of important management issues. I was involved indeliberations on a range of topics, such as attracting human resources and enabling these people to deploy theirinherent skills, as they are indispensable to improved value provided in DX services and underpin higher
productivity through optimization of Group formation; strengthening governance and generating synergies
globally; creating services and businesses in new domains; and shrinking cross-shareholdings. I also participated invigorous opinion exchange and discussions on initiatives related to groupwide intellectual property, with thought
to the revised Corporate Governance Code, and efforts to maintain diversity among core personnel. Goingforward, I will strive to sustain and further improve the effectiveness of the Board of Directors by allocating
sufficient time to discuss key issues.
As a member of the Nomination Committee and Compensation Committee, I actually chaired meetings infiscal 2022 because of a change in structure giving the role of committee chair to an external director. To run thecommittees more effectively, I set agenda content from the perspective of Group solidarity and other factors sothat committee members would see what topics were to be discussed over the course of the year. I was also
involved in framing a structure to promote active discussion through collection and dissemination of information
useful for deliberations.
I expect the TIS INTEC Group to acquire a wider global presence, underpinned by the diversity of its humanresources, and to boost its corporate value over the medium to long term. Toward this end, I will strive to achievea good balance in stakeholder perspectives and continue to be an active voice on the Board of Directors.

Platform for Value Creation

The current Board of Directors at TIS comprises three external directors, one of whom is a woman. I believe this tobe a suitable balance. Also, ahead of any Board of Directors’ meeting, a briefing on the agenda is set up forexternal directors, giving us sufficient access to information to make decisions. As needed, the Company also
provides opportunities for opinion exchange on important management issues so that we can make constructive
comments when the Board meets. These efforts definitely underpin animated discussions. However, the emphasis
on providing information to the Board of Directors is so great that the number of items on the agenda can swell tothe extent that the meeting falls into a classic management style—too many things to discuss for the amount oftime available—precluding a move to a more monitoring style.
The role required of the Board of Directors these days is to establish an environment that gives businessexecution divisions the ability to vigorously pursue business opportunities with speed and flexibility. This can beaccomplished by expanding the scope of delegated authority for decisions made by business execution divisions
while ensuring regulatory compliance under the Companies Act. In addition, business execution divisions as wellas the Board of Directors would perform better if the Board of Directors pivots to a role that monitors andevaluates the execution of business. For TIS to assume an appropriate level of risk to expand business content andrealize sustainable improvement in corporate value, this is the direction that the Company must move in.

Growth Strategy for Value Creation

Chairman (Chairman of the Board of Directors)

Koichi Sano
Director (external)

I commend TIS for constantly striving to improve corporate governance practices, as demonstrated by evaluations
looking at the effectiveness of the Board of Directors as well as the implementation status of internal controls. But
to sustain improvement in corporate value through more sophisticated business management and a stronger
corporate governance structure, the Company must delve deeper into discussion of such topics as organizational
design and the concept of creating shared value. I will participate in such discussions from an objective
perspective, conscious of the need to strike a balance between growth-oriented and profit-driven policies.
In regard to the Board of Directors, I think TIS needs to embrace a different style, moving from an executive
management to a monitoring function by investing greater authority in the divisions actually executing operations
and increasing diversity in the Board composition. To this end, an essential step would be to apply Board members’
broad range of skills to corporate governance practices when implementing Group strategies. It is also important
to assume a proactive approach to strengthening the independence and monitoring function of the Board of
Directors, emphasizing and respecting the diversity derived from the varied careers and backgrounds of Board
members. Consequently, I am of the opinion that it would be a good idea for the Company to increase thenumber of external directors on the Board annually so that they eventually become a majority.
In an environment characterized by intense market changes, predictions fluctuate wildly, so diversity
management—where diverse values held by diverse human resources are respected and shared—becomes a
condition of successful growth strategies and sustainability management. This concept must be firmly rooted in
the Company’s corporate culture.
TIS has to concentrate on more strategic projects if the Company is to address the four social issues identified
as priorities for the TIS INTEC Group. All external directors will vigorously participate in discussion to promotesustainable portfolio management, and I, personally, will strive to utilize accumulated experience and focus
specifically on balance-sheet control and cash flow allocation.

TIS INTEC Group Value Creation

I believe the Board of Directors is effective at this point in time,
but to achieve a higher level of effectiveness, it is extremely
important to pursue discussions on medium- to long-term
management strategies more deeply with the involvement of
external directors as they bring different experience andknowledge to the conversation. It is true that TIS would
benefit greatly by being able to appoint external directors
from a pool of candidates who are highly knowledgeable
about the IT industry. But the Company’s status as anindependent systems integrator limits access to IT-specificexpertise potentially available to a keiretsu network ofcompanies with interlocking business relationships andshareholdings across different industries, a situation
compounded by challenges stemming from provisions underJapan’s Companies Act. Nevertheless, for TIS, maintaining
diversity—including acquired expertise—is vital to enhance
Board effectiveness and thereby support a stronger corporate
governance structure.
Meanwhile, the revised Corporate Governance Codedescribes various sustainability-related guidelines for action.
But from its earliest days, TIS incorporated the concept of acompany as a public entity of society and the concept of
sanpo yoshi equally, so it is only natural that we stand withsociety and move forward together. We have always
maintained programs in Japan to promote the concepts
inherent in OUR PHILOSOPHY, but last year, we beganorganizing seminars in Thailand, home base to several Group
companies, including MFEC. Today, the world is characterized
by intense change, and precisely for this reason, diversity
becomes a strength. But to realize this, we need a foundationof shared ideology. From this perspective, I believe the most
crucial task for us right now is to ensure that growth strategies
designed from a business execution point of view align withOUR PHILOSOPHY. This will inevitably lead to sustainableimprovement in corporate value for the Group. Goingforward, we will stay true to this plan and consistently strive toelevate corporate governance practices.

Toru Kuwano

61

External Directors’ Messages

Top Message

Fiscal 2022 is notable in that we made progress on theseparation of business execution and supervision. In April
2021, I handed over the corporate reins to Mr. Okamoto andtook on the role of chairman with no representative rights.
This means that I do not sit with the Management Committee
or attend any other executive business meetings, instead being
entirely focused on supervision of executive activities as
Chairman of the Board of Directors.
In addition, over the past year, I have emphasized my role
as a bridge between business execution and supervision topromote fair and transparent, fast and clear-sighted corporate
decisions, knowing the importance of having both sides on
the same page and closing any gaps in the information that is
made available to decision-makers. I believe this to be a rolethat I, as the only non-executive in-house director at TIS, canfulfill.
Since joining the Company in 1976, I have held positions
on the business execution side of operations, and I am proud
to have mastered the finer points of moving large-scale systemdevelopment projects forward. With this kind of expertise, I
am certainly qualified to participate in discussions on theexecutive demands of business, but I am always conscious of
the limits that my current supervisory role impose from agovernance standpoint. This past year, I tried to raise thevantage point of executive activities by providing a risk
management perspective—an ever-present topic for the Boardof Directors—and by recounting first-hand experiences about
the challenges that accompany the rollout of large-scale
projects. At the same time, I endeavored to provide external
directors with information, including explanations of technical

GovernanceIntroduction

The pursuit of diversity, guided by OUR PHILOSOPHY, is the starting point forsustaining the corporate value of the TIS INTEC Group and is also an essential
E S G of governance.
element

S G

E

S G

Governance*Please visit the following page for details of our corporate governance.
https://www.tis.com/group/sustainability/governance/

Corporate Governance■ Compliance with the Corporate Governance Code■ Basic Policy

Reason for Selection of Current Corporate Governance Structure

1. To respect the rights of shareholders and to ensure equality in their treatment.
2.	To consider the interests of stakeholders, including shareholders, and work with stakeholders in an appropriate manner to achieve stated goals.
3.	To disclose corporate information appropriately and ensure transparency.
4.	To engage in constructive dialogue with shareholders based on a medium- to long-term investment perspective.

Independence ratio

Diversity (Percentage of female directors)
Female directors:
1

External
directors:
3

Age
70+ years old:
3

Board ofDirectors:
11%

Board ofDirectors:
33%

50+ years old:
2

Average ageof Board of
Directors
64 years old

Directors and Board of Directors
As stipulated in its Articles of Incorporation, the Company’s
Board of Directors will comprise at least three and no morethan 15 directors, and to strengthen the supervisory functionsof the Board of Directors, a policy has been established that
one-third or more of the directors must be independent­external directors. At present, three independent external­directors have been appointed.
For swift and dynamic decision-making by the Board of
Directors, it convenes in principle once monthly and also meetson an ad hoc basis whenever necessary. TIS holds an information meeting once a year to present management direction as
Year ended March 31, 2022

60+ years old:
4

well as meetings ahead of Board of Directors’ meetings—inprinciple, twice a month—to give external directors and outside
members of the Audit & Supervisory Board sufficient background information to participate in discussions. In addition,
the Company organizes study sessions with experts—in-houseand external—and arranges visits to local Group facilities andoffices. TIS also creates opportunities for external directors to
exchange opinions with the President and convenes meetings
that involve only external directors and external members of the
Audit & Supervisory Board. This facilitates smooth but vigorous
discussion by the Board of Directors.

Board of Directors: 22 meetings held; 119 agenda items discussed(59 items resolved and 60 items reported)

Average Time for Deliberations per Meeting(excluding meetings by written communication)

Number of Agenda Items

Growth Strategy for Value CreationMale
directors:
8

Internal
directors:
6

TIS has an Audit & Supervisory Board, a model chosen for its double-check function through which the Board of Directors oversees
the execution of business activities and the Audit & Supervisory Board audits activities to ensure operations are legal and appropriate.
In addition, the Company aims to strengthen the supervisory function of the Board of Directors by appointing external directors withindustry- and corporate-management-related experience and insight. Drawing on advice and recommendations from an independent
standpoint ensures the validity and appropriateness of decision-making by the Board of Directors.

■ ■ Items Resolved ■ ■ Items Reported■ Corporate Governance Structure

2.17 hours

138

66

68

70

70

59

Fiscal 2020

Fiscal 2021

Fiscal 2022

1191.49 hours

60

General Meeting of Shareholders
Appointment, dismissal
Board of Directors(Nine members including
one female member)

Nomination
Committee

Compensation
Committee

Six internal directors

Reports
Group Internal
Control Committee●Chairperson of the Board:

Chairman●Term of office: One year

Discussion, reports
Corporate
Sustainability
Committee

Investment
Committee

Audit, reports
Statement of
opinionThree external
directors

Supervision(Three independent
directors)

Two interal Audit &Supervisory
Board members
Four years

Reports
President

Audit & Supervisory Board(Five members including
two female members)●Term of office:Election, dismissal, supervision

Reports

Appointment, dismissal

Reports

Cooperation
Reports

Accounting Auditor

Accounting
auditsThree external
members(Three independent
Audit & Supervisory
Board members)

Fiscal 2020

Cooperation

Units involved
in internal audits

Internal audits

Corporatewide Proposal
Review Process
Executive
Officers

Evaluation

Divisions/
Departments

Affiliatedcompanies

The Management Committee convenes twice a month in principle, where members deliberate and report important mattersrelated to the execution of business activities throughout TIS
and the Group. The committee consists of the President andRepresentative Director, as the chairperson, and general managers, directors in charge, division managers, and the head of
the Corporate Planning Department, as attendees. If necessary,Year ended March 31, 2022

63

Fiscal 2022

Fiscal 2021

Fiscal 2022

17

20

22

(One other by written
communication)(One other by written
communication)(One other by written
communication)

Management Committee

Delegation of authority to
execute operations

System Development
Meeting

Fiscal 2021

Cooperation

Management Committee

Discussion, reports on
significant issuses

Fiscal 2020
Number of Meetings Heldthe chairperson can request the attendance of Directors andExecutive Officers. If deemed necessary for agenda items related to a Group company, the chairperson can request the attendance of its president and others to get explanations, opinions
or reporting. Audit & Supervisory Board members can attend
the committee meeting and, if necessary, express opinions.

Management Committee: 40 meetings held; 262 agenda items discussed(142 items resolved and 120 items reported)

64

Corporate Information/Data

CVC Investment
Committee

Appointment, dismissal

1.13 hours

Platform for Value Creation

136

TIS INTEC Group Value Creation

Board of Directors (As of June 24, 2022)

TIS complies with all principles of the Corporate Governance Code. The status of the Company’s responses to each principle of the
Corporate Governance Code is described in the Corporate Governance Report.

Top Message

Based on basic corporate governance policies, TIS consistently pursues the best corporate governance practices and constantly works toenhance corporate governance. Management believes that the key to good corporate governance is to ensure transparency and fairness in decision making processes, make full and effective use of management resources, and raise the integrity of management practices through swift and accurate assessment of situations, from the viewpoint of promoting sustainable corporate growth and boosting
medium- and long-term corporate value. Accordingly, management at the Company is committed to upholding good corporate governance in line with the following basic principles.

Introduction

The Group seeks to enhance corporate governance and internal controls, which are its core subjects. The
focus is also on promoting quality control/ production innovations, essential for the business of information
systems—a key social infrastructure—to function and steadily evolve, as well as evolving risk management
E S G including information security and compliance.
processes,

The Nomination Committee and the Compensation Committee were established as advisory bodies to the Board of Directors toensure objectivity and transparency in decision-making processes for appointment of directors and associated compensation and tostrengthen the corporate governance structure.
Nomination Committee

Compensation Committee

Provide advice on matters related to decisions oncompensation for directors

Committees and Other Bodies
Promote various measures to maintain and improve the internal controls of the Company and its
subsidiaries, to evaluate the operational status of the internal control systems and to recommend any
corrective action to be taken to the Board of Directors, if necessary.

Corporate Sustainability Committee

Check and evaluate the status of the corporate sustainability activities of the Group as a whole.

Investment Committee

Verify/advise on plans for investment projects, monitor ongoing projects and assess whether to continue
them with the aim of minimizing related risks and earning higher returns on investments.

CVC Investment Committee

Before making corporate venture capital (CVC) investments for the purpose of enhancing alignment
with venture capital companies in the form of open innovation in order to (1) create new business, (2)expand existing businesses, and (3) promote business collaboration with customers, decide whether or
not to execute an investment and monitor the executed investment.

Corporatewide Proposal Review Process

For large-scale projects to be addressed by the Group as a whole, review drafts prior to actual proposals
to customers, in order to detect and reduce risks as early as possible.

System Development Meeting

Identify potential risk factors in large-scale projects to be undertaken by the Group as a whole, develop
measures to prepare for risks and resolve materialized issues, and terminate any project with losses.

Policy and Procedures for Election, Dismissal, and Nomination of Directors, etc.

Summary of Content of Liability Agreements
In accordance with Article 427, Paragraph 1, of the Companies
Act, each of the external directors and the external Audit &Supervisory Board members enters into an agreement with
the Company that limits legal responsibility for liabilityc­ ompensation as set forth under Article 423, Paragraph 1, of
the same law. The limit of liability compensation, based onthese agreements, is an amount provided as Minimum Liability
Amount in Article 425, Paragraph 1, of the same law.

(Reference) Our Efforts on Group Management
To improve corporate value through unified group management, the Group focuses on improving performance by completing a PDCA (plan-do-check-act) cycle with reference to current key performance indicators (KPIs).
TIS and Group companies evaluate their performance basedon financial indicators, including shared Group KPIs and process
indicators related to customers, internal processes, and learn

and growth initiatives. In addition, to ensure completion of the
PDCA cycle, a Group Business Meeting is held on a quarterly
basis to report on budgets and the progress of major activities
at Group companies, and to discuss measures taken to address
important issues. A Group President Meeting is also held on amonthly basis to share information on Groupwide issues andperformance.

Training Policy for Directors and Audit & Supervisory Board Members
For directors and auditors, including external directors andexternal auditors, the Company will arrange and support thecost of training opportunities that are appropriate. The objective of such training is to provide an opportunity to acquire necessary knowledge regarding the Group’s businesses, financial
65

affairs and organization and to understand the duties andresponsibilities required of directors and Audit & Supervisory
Board members when assuming office, as well as to continuously develop these attributes during the term of office.

66

Corporate Information/Data

directors, the Board of Directors considers nominations basedon the advice of the Nomination Committee, which is chairedby an independent external director and comprises a numberof directors, the majority of whom are independent external
directors.
If a situation arises where a management executive should
be dismissed, the Board of Directors shall determine a dismissal
proposal. However, the dismissal of a director shall be conducted in accordance with the Companies Act and other relevant
provisions.

(2) Promote discussions to improve medium- to long-term
corporate value
The Board of Directors will plan and discuss themes for
improved corporate value, such as medium- to long-term strategies, and carry out proactive activities to enhance corporate
value.

Platform for Value Creation

In nominating candidates for directors, Audit & Supervisory
Board members and executive officers, the Board of Directors
will nominate persons with abundant experience, a high level of
insight and advanced specialization based on the Company’s
election criteria that make them suitable as directors or Audit &Supervisory Board members in order to realize effective corporate governance and contribute to the sustainable growth of
the Company as well as the enhancement of its medium- tolong-term corporate value while also considering aspects ofdiversity such as gender, internationality, career and age. For

2. Results of analysis and evaluation of effectiveness of
the Board of Directors
The Company’s Board of Directors concluded that a certain
degree of effectiveness had been ensured to appropriately

3. Future issues and associated responses, based on­analysis and evaluation
In light of the analysis and evaluation previously mentioned, TIS
will focus particular efforts on the following issues.
(1) Further improve the functions of the Board of Directors
Aiming at promoting more sophisticated management, theCompany will sort out issues, such as the Board of Directors’supervisory function for the medium- to long-term growth andsharing roles of executive officers, to create the management
structure for the future.

Growth Strategy for Value Creation

Group Internal Control Committee

1. Method of evaluation
TIS distributed a questionnaire regarding the effectiveness of
the Board of Directors to all directors and members of the Audit& Supervisory Board. In addition, personnel of its administrative
office conducted an interview to all directors and membersof the Audit & Supervisory Board. The Company’s Board of
Directors used the results to analyze and evaluate the effectiveness of the Board of Directors.
Note that TIS conducted this evaluation based on advice
and verification by an external attorney.

supervise the approval of important management matters andbusiness execution, such as the execution status of businessactivities and investments at the Company and Group companies, through deliberation based on Company regulations. In
addition, the Board of Directors concluded that the level of
effectiveness continues to trend upward, reflecting improvement measures based on the results of effectiveness evaluations
conducted in the previous year.
However, management acknowledged the importance ofpromoting discussions to further improve the functions of theBoard of Directors in order to promote more sophisticated­management of the Company.

TIS INTEC Group Value Creation

Status of activities bycommittees(Fiscal 2022)• Held five times in fiscal 2022 with 100%
• Held four times in fiscal 2022 with 100%
­attendance of all the members­attendance of all the members
Provided advice on the appointment and retirement Provided advice on the appropriateness of theof key individuals, including directors, and present- Company’s compensation package through a comparative analysis of director compensation amounts
ed proposals on changes to director composition,at other companies and at TIS, based on the findbased on discussions by Committee members.
ings of a research company, as well as the appropriateness of the calculation method used to determine performance-linked compensation. Made
­proposals to the Board of Directors on director compensation upon approval of Committee members.

Since fiscal 2016, ended March 31, 2016, the Company has
evaluated the effectiveness of the Board of Directors each fiscal
year. This process reveals issues and points for improvement
and leads to initiatives that will raise the effectiveness of theBoard of Directors to a higher level. For the fiscal 2022 evaluation, all directors and members of the Audit & Supervisory
Board were given a questionnaire to be submitted anonymously. The questionnaire asked them to conduct a comprehensive
self-evaluation and self-analysis of the composition and operation of the Board of Directors, and then the Board of Directors
held discussions based on the results. The method and resultsof the evaluation, as well as future issues brought to lightthrough this process and measures to address such issues aredescribed below.

Top Message

Role of committee
members

Provide advice for selecting candidates to theposition of director and matters related to theappointment of such individuals

Summary of Results of Analysis and Evaluation of EffectivenessIntroduction

Nomination Committee and Compensation Committee

*Please visit the following page for profile of Directors and Audit & Supervisory Board Members.
https://www.tis.com/company/officer/

Directors

Audit & Supervisory Board Members

Representative
Director,
President

Representative
Director,
Executive Vice
President

Representative
Director,
Executive Vice
President

Director

Director

Director

Director

DirectorStanding Audit &Supervisory Board
MemberStanding Audit &Supervisory Board
MemberExternal/Independent External/Independent External/Independent

Audit & Supervisory
Board Member

Audit & Supervisory
Board Member

Audit & Supervisory
MemberExternal/Independent External/Independent External/Independent

Akira Shinkai

Koichi Sano

Fumio Tsuchiya

Naoko Mizukoshi

Tetsuya Asano

Tatsufumi Matsuoka

Yukio Ono

Akiko Yamakawa

Hiroko Kudo

November 14, 1963 December 14, 1960

March 24, 1959

August 30, 1948

May 10, 1948

September 23, 1967

October 22, 1960

December 2, 1957

January 1, 1950

April 5, 1973

February 28, 1968

4 years

4 years

6 years

5 years

4 years

2 years

3 years

2 years

2 years

－

58

15

18

3

－

1

8

10

1

－

－

22/22 (100%)22/22 (100%)22/22 (100%)

21/22 (95.5%)

22/22 (100%)22/22 (100%)22/22 (100%)22/22 (100%)22/22 (100%)22/22 (100%)22/22 (100%)－(Assumed office onJune 24, 2022)

－

－

－

－

－

－

－

12/12 (100%)

12/12 (100%)

12/12 (100%)

12/12 (100%)－(Assumed office onJune 24, 2022)

Yasushi Okamoto

Masahiko Adachi

Josaku Yanai

May 3, 1952

March 3, 1962

May 9, 1956

Cumulative term of office

9 years

4 years

4 years

6 years

Number of shares owned(thousand shares)

171

55

45

Board of Directors
Attendance/
Number of meeting (Attendance rate)

22/22 (100%)22/22 (100%)

Audit & Supervisory Board
Attendance/
Number of meeting (Attendance rate)－－

Attendance at meetings

○

●

○

○

○

Compensation Committee

○

●

○

○

○

●

●

●Chairperson 〇Committee member

Growth Strategy for Value Creation

Nomination Committee●Chairperson 〇Committee member

SkillsCorporate Management

●

●

●

●

●

●

Industry Knowledge

●

●

●

●

●

●

International Experience

●

●

●
●

Finance & Accounting

●

●

●

●

●

●
●
●

●

●

●

●
●

Platform for Value Creation■Message from Newly Appointed Audit & Supervisory Board Member

Executive Officers
Executive Officer
Executive Officer
Executive Officer

Executive Officer
Executive Officer
Executive Officer
Executive Officer
Executive Officer
Executive Officer

Masakazu Kawamura
Kensaku Furusho
Reiko Oka
Tetsuya Yuzuri
Hiroyuki Kawai
Takuma Tanaka

To strengthen the supervisory function of the Board of Directors, the Company has established criteria for ensuring the independence of External Directors and External Audit & Supervisory Board Members. Here, we referred to the requirements of Japan’sCompanies Act and the rules of the Tokyo Stock Exchange. Please refer to our website for specific details.
https://www.tis.com/ir/policy/governance/index.html

Hiroko Kudo
External Audit &­Supervisory Member

I will draw on my track record of international research activities to fulfill an oversight function.
As a researcher, I have been studying public sector management and governance. One common central
research theme I have addressed is the use of ICT and digitization to enhance the efficiency of an organization’s internal management and the services it provides, as well as to improve the quality of life of all
citizens. To this end, I have conducted studies in three main areas: (1) Methods to secure human resources needed by an organization, as well as systems for skills development and training, improving motivation, and raising employee satisfaction (ES) and engagement; (2) Soliciting the active participation of citizens, the recipients of services, in order to improve customer satisfaction (CS) and decision-making; and(3) Methods for measuring, evaluating and verifying the results of those activities. Although the purposeand mission of a company as an organization are different from those of a government agency, there arecertain things in common. These include the importance of human resources, relationships with customers, communities and other stakeholders, and the need for assessment and monitoring. I would like todemonstrate my knowledge and skills in these areas at the Company.
The Group is aggressively expanding its global operations, particularly in ASEAN regions. Expanding
and strengthening overseas partnerships also entails a certain amount of risk. As an external Audit &Supervisory Board Member, I will draw on my track record of international research activities to provide
appropriate advice and fulfill an oversight function.

Corporate Information/Data

Executive Officer
Executive Officer
Executive Officer
Executive Officer
Executive Officer
Executive Officer

Hirofumi Akashi
Masahiro Mikami
THANAWATLERTWATTANARAK
Hiroto Ito
Manabu Yano
Kyoko Takayanagi
Ikuo Shimizu
Isao Otokita
Yoshiyuki Hayashi■Criteria for Independence of External Directors and External Audit & Supervisory Board Members

67

●

●

Intellectual property and legal

Senior Managing Executive Officer Masahiro Hosokawa
Senior Managing Executive Officer Shinichi Horiguchi
Senior Managing Executive Officer Kiyotaka Nakamura
Senior Managing Executive Officer Masahiro Ueda
Managing Executive Officer
Kei Ando
Managing Executive Officer
Naoto Kita
Managing Executive Officer
Akira Ogane
Managing Executive Officer
Satoru Tayasu
Managing Executive Officer
Hidehiko Shimoyama
Managing Executive Officer
Tsuneyoshi Ito●

TIS INTEC Group Value Creation

Takayuki Kitaoka

Toru Kuwano

Top Message

Chairman

Date of birth

Introduction■ Board of Directors and Audit & Supervisory Board Members (As of June 24, 2022)

68

Composition ratio

Compensation amountPerformance indicator

Maximum amount¥700 million (including ¥520 million for the Company) in eachspecified period (three fiscal years)

Performance-linked compensation3

Directors: No more than ¥400 million per year (of which,­external directors receive no more than ¥50 million)
Audit & Supervisory Board members: No more than ¥85­million per year

6

ProfitConsolidated
operatingincomeJobsatisfaction

Target attainment level

Net sales¥445,000 million¥448,383 million

Operating income¥44,500 million¥45,748 million

12.0%

10.8%

ROE

A

Business
partnersatisfaction
ratio

12.5%

6.25%

6.25%

million¥129.00¥157.69¥27,800¥25,389

millionmillion

55% orover

55% orover

77% or

over

56%

60%

69%

Standard
score

Score
allocation

ProfitConsolidated operating
incomeConsolidated EPS

11-point scale

7

17.5

Businesstransfor­mationService-style Businessgross profit

11-point scale

7

17.5

5-point scale

B

17.5

Job satisfaction
Stakeholder Customer/service
engagesatisfaction
mentBusiness partner
satisfaction

4-point scale

B

8.75

4-point scale

B

4.38

4-point scale

B

4.38

Evaluation level

Total score

Performance-linked coefficientA

75 points or over

150%

B

65 points or over

100%

C

45 points or over50%D

35 points or over25%

● Outline of performance-linked stock compensation system

An Executive Compensation BIP Trust (hereafter, “BIP Trust scheme”) has been introduced as a performance-linked stockcompensation system. Those eligible for benefits are directors, executive officers, and executive fellows (excluding external directors,
non-full-time directors and residents outside Japan; hereafter, “Directors, etc.”), directors (excluding outside directors and non-fulltime directors) and executive officers of INTEC Inc., a subsidiary of the Company (hereafter, “Subsidiary Directors, etc.”, collectively
with Directors, etc., “Eligible Directors, etc.“).
a. Organization of the BIP Trust scheme
On introducing the BIP Trust scheme, the Company established the Stock Delivery Regulations for Executive Compensation BIP Trust(Stock Delivery Regulations), under which TIS entrusts a nominated trust bank with money (not exceeding ¥700 million (including¥520 million for the Company)), and the trust bank acquires TIS shares with the entrusted money.
The scheme grants points to Directors, etc., in accordance with the Stock Issuance Regulations. The number of shares to bedelivered will correspond to the number of points accumulated, which is calculated by the formula below.
Calculation Formula
The number of TIS shares to be delivered (points*) = Base amount × Performance fluctuation coefficient ÷ Acquisition cost per unit
* Decimals rounded downb. 132,100 shares (including 99,000 shares for the Company) in one financial year (upper limit)c.	Scope of individuals able to receive beneficiary rights and other rights under the BIP Trust scheme: Individuals who have retired
from being a Director, etc., and meet the beneficiary conditions specified in the Stock Issuance Regulations.
● Establishment of clawback clauses

TIS has established a clause that enables the Company to request an individual who commits an illegal act, as defined under internal
rules, to pay restitution equivalent to the value of shares granted, and another clause that enables the Company to confiscate points
awarded.

B
C
D
E

69

Distribution composition (image)70

Corporate Information/Data

ActualOrganizational
Performance
Evaluation

Estimates

Customer/
servicesatisfaction

25%¥54,739

millionScore scale

Item

Platform for Value Creation

Fiscal 2021

Stakeholder
engagement25%

Calculated score based on the actual
result relative to the target of grossprofit of Service Business
Calculated score according to the ratioof respondents who chose the answerof “(4) Often applies” or higher in theoverall question (Good company forwork as an overall evaluation) in the
Employee Awareness Survey
Calculated score according to the ratioof responses of (4) or higher in thequestions to measure satisfaction for
Account Service in the Customer Satisfaction Survey
Calculated score according to the ratioof responses of (4) or higher in thequestions to measure satisfaction “asa project and a counterparty” in theBusiness Partner Satisfaction Survey¥48,500

Category

Growth Strategy for Value Creation

Financial index(Consolidated)

Individual Performance
Evaluation
a
b
c
d
e

Nonfinancial(3) Structure of compensation for External Directors and Audit & Supervisory Board members
Compensation paid to external directors is limited to basic compensation only, with no performance-linked component.
Compensation for Audit & Supervisory Board members is decided through discussion by corporate auditors. From the perspective of
maintaining a high degree of independence, compensation is not linked to business performance and consists solely of basic compensation.
(4) Othera.	Upon the introduction of the performance-linked stock incentive plan, the Board of Directors decided to stipulate a provision for
illegal acts in the Stock Delivery Regulations. The provision allows the Company to reclaim the amount equivalent to the sharesdelivered to violators and cancel any points accrued under the performance-linked stock incentive scheme explained below.
b.	To reflect medium- to long-term business performance, directors (excluding outside directors) are asked to contribute a certain
portion of their basic compensation toward the purchase of treasury stock through the Company’s share ownership plan for
directors and officers, and they are expected to retain such stock in full for the duration of their time in office so that the acquired
stock shares value with all shareholders.
● Method for calculating executive compensation(1) Basic compensation
Basic compensation is paid according to the size of the role and scope of responsibilities of each position.
(2) Outline of calculating performance-linked compensation
Performance-linked compensation is paid for the specified period of one year from July of the following fiscal year. The amount isdetermined by the degree to which measures of corporate performance have been achieved, on the basis of the management planfor each fiscal year, and by applying a performance evaluation coefficient of between 0% and 50% to basic compensation amountfor each position.
The amount to be paid is calculated using five-point scale evaluations of organizational performance (with the score of A to E) andindividual performance (with the score of a to e) for each director and Audit & Supervisory Board member, based on the amountdetermined by corporate performance evaluation (the ratio of organizational performance evaluation and individual performance
evaluation = 3:7). Under the standard model, 33% is applied to the payment to an individual with A in organizational performance
evaluation and a in individual performance evaluation when the corporate performance-linked coefficient is 30%. Similarly, 27%,
20%, 13% and 7% are for B and b, C and c, D and d, and e and E evaluations, respectively.
In fiscal 2022, the amount of performance-linked compensation was determined by applying a performance-linked coefficient of
30% based on the level of attainment of predetermined targets with the corporate performance indicators, including Consolidated
Sales, Consolidated Operating Income and Consolidated ROE.

25%

EPS

Business Service-styletransfor- Businessmationgross profit

WeightTIS INTEC Group Value Creation

1

Financial

Performance-linked stock incentive

Basic compensation

Relation between evaluation score and level for each item
Fiscal 2022
Estimate Actual result

Top Message(1) Determination of compensation
The Company has established the Compensation Committee, comprising mainly independent external directors, as an advisory bodyto the Board of Directors to ensure objectivity and transparency in the process for determining compensation and to strengthen thecorporate governance structure.
The basic policy on officers’ compensation is to provide greater incentive to improve business results through a system ofcompensation linked to measures of Company performance, and such amounts are determined through a decision by the Board of
Directors, based on discussion with and suggestions by the Compensation Committee.
(2) Structure of officers’ compensation
As shown below, compensation to Company directors consists of a basic component, a performance-linked component andperformance-linked stock incentive. When measures of Company performance are achieved to the maximum degree, compensation
will comprise the basic component, the performance-linked component and the performance-linked stock incentive in a ratio of 6:3:1.

For the performance-linked stock incentive, the Board of Directors established the Stock Delivery Regulations when the performancelinked stock incentive plan was introduced. Points are granted to directors on a scale between 0% and 15% of basic compensation
set for each position according to the level of achievement made toward reaching performance targets stated in the management
plan and as provided for in the Regulations. The number of shares delivered will correspond to the number of points accumulated.
For corporate performance indicators, Consolidated Operating Income, Net Income per Share (EPS), and Service Business Gross
Profit were adopted as financial indicators to encourage pursuit of business growth, and Job Satisfaction, Customer/Service
Satisfaction, and Business Partner Satisfaction were adopted as nonfinancial indicators to encourage pursuit of higher stakeholder
satisfaction, and to ensure attainment of enhanced corporate value as expected by the shareholders.
In fiscal 2022, the amount of performance-linked stock incentive was determined by applying a performance-linked coefficient of
150% based on the evaluation of actual results of the indicators relative to estimates (100% performance-linked coefficient whenattained) conducted in accordance with the Stock Delivery Regulations.

Introduction● Performance-linked stock incentive

Outline of Policy on Officers’ Remuneration

Remuneration by type(Millions of yen)Basicremuneration

Performancelinked
remuneration

Performancelinked stockcompensation

Nonfinancial
compensation includedin Performance-linked
stock compensation

Recipients(Persons)

232

164

45

21

21

6

41

41

−

−

−

2

61

61

−

−

−

6

Notes: 1.	For the fiscal year ended March 31, 2022, compensation for directors does not include the employee portion for directors who serve concurrently as employees.
The Company has not introduced a retirement benefit system for directors, and does not pay any directors’ bonuses.
2.	The performance-linked stock incentive is booked as an expense for four directors (excluding external directors and non-full-time directors) in the current business year.

Status of Audits

3. Accounting audits
The Company has appointed Ernst & Young ShinNihon LLC to
conduct accounting audits pursuant to the Companies Act, andfinancial statement audits, quarterly reviews and internal control
audits pursuant to the Financial Instrument the Financial
Instruments and Exchange Act.

2. Criteria for exercising voting rights for strategically held shares
TIS appropriately exercises voting rights for the listed shares in its
possession after comprehensively determining whether suchaction will contribute to the sustainable corporate growth andhigher medium- to long-term corporate value of the TIS INTECGroup and investee company, taking into consideration policy
advice from proxy advisory firms.
3. Relationships with strategic shareholders
If strategic shareholders of TIS indicate an intention regarding thesale of TIS shares, we will respond appropriately without preventing such a sale. Moreover, we will not conduct transactions thatlack economic rationality with strategic shareholders.

25.1%(Millions of yen)
22.4%

21.6%
19.0%

17.9%

● Key audit matters

Estimate of provision for loss on order received associatedwith contracts for ordered software development
In calculating provision for loss on order received, criticalestimates relate to gross costs, involving key assumptions of
man-hours and outsourcing costs expected to be incurred forsoftware development works. As man-hours and outsourcing
costs necessary to complete projects for software development
may significantly increase from the initial expectation, highuncertainty is involved in the estimate of gross costs which
requires judgment by management.
Accordingly, the item was considered as a key audit matter.

62,65456,70088

Fiscal 2018

87

96

88

Fiscal 2019
Fiscal 2020
Fiscal 2021
■Amount on BS ■Number of Stocks

10%
85

Fiscal 2022
Ratio to Net Assets(Millions of yen)
YOY Changes
in Fair
Acquired Change
Value, etc.

Amounts on Balance Sheets [Number of Stocks]
Fiscal 2018

Fiscal 2019

Fiscal 2020

Unlisted Cross-shareholdings
stock
Strategically held shares
Subtotal
Listedstock

5,734 [52]Fiscal 2022

Sold

3,836 [23]3,832 [21]-1 [-1]0 [0]-2 [-1]

20,453 [45]4,814 [47]-112 [-1]646 [5]-16,173 [-2]-16,175 [-3]24,289 [68]8,646 [68]-114 [-2]646 [5]

Cross-shareholdings

36,936 [17]31,580 [12]-6,739 [-6]1 [0]1,381 [1]Strategically held shares

1,427 [3]14,132 [5]

0

0 [0]

12,704 [2]Subtotal
Total

56,700 [88]23,889 [65]Fiscal 2021

38,689 [35]29,742 [31]38,364 [20]45,713 [17]-6,739 [-6]1 [0]14,086 [3]44,423 [87]53,632 [96]62,654 [88]54,359 [85]-6,853 [-8]648 [5]-2,089 [0]According to the criteria for and approach to categorizing investment shares, TIS sold its entire holdings of eight stocks and partial
holdings of one stock for the year ended March 31, 2022. As a result, the number of listed stocks decreased from 35 as of March
31, 2019, to 17, and the amount of previously held cross-shareholdings is steadily reducing. On the other hand, as part of its growthstrategy, TIS actively makes investments in start-ups with the objective of developing strategic partnerships to facilitate open innovation and forms capital and business alliances with leading foreign companies, and has newly acquired five unlisted stocks for crossshareholdings. The graph above shows significant increase in the amount on the balance sheet in the year ended March 31, 2022,
mainly due to the ­listing of Grab Holdings Inc.
72

Corporate Information/Datainterviews as well as telephone interviews, and holding businessresults briefings and small meetings. Furthermore, in addition toactive information disclosure, which will be the premise for dialogue, the Company will strive to expand the contents of theIntegrated Report, which will be positioned as an effective toolfor dialogue.
TIS will share opinions put forward in constructive dialogue
with capital market participants such as shareholders, investors
and securities analysts within the Company through reports andbriefings to the Board of Directors, and use them in reviewing
the Company’s management strategy, and for other purposes.
In the case of dialogue with shareholders, TIS will pay attention to the fairness of information disclosure and manage internal information appropriately in accordance with the Rules forPrevention of Insider Trading.

54,35953,632
44,423

Platform for Value Creation

71

TIS pursues reduction of cross-shareholdings in line with theaforementioned policy and corporate stance, management seeks
to push the cross-shareholdings on a balance sheet basis as apercentage of consolidated net assets below to the 10% benchmark.

Status of Cross-Sharholdings

Constructive Dialogue with Shareholders
TIS will engage in constructive dialogue with shareholders
based on the IR Policy in order to contribute to the Company’ssustainable growth and the enhancement of its medium- tolong-term corporate value. In addition, the Company will strive
to develop a system to promote constructive dialogue withshareholders. The director of the IR Department will supervise
the dialogue with shareholders, consider response methods
with the President and Representative Director, executive­officers in charge, and the IR Department, and will respond
appropriately. The IR Department will share information andexchange opinions in a timely manner based on the respective
specialist standpoints of relevant departments and will support
dialogue with shareholders through organic collaboration.
In relation to shareholders, TIS will strive to broaden themeans of dialogue such as through individual face-to-facehttps://www.tis.com/group/sustainability/governance/governance/

Growth Strategy for Value Creation

2. Internal audits
The department responsible for internal audits (the Auditing
Department) at TIS is staffed by 26 people. This department
informs the Board of Directors of the annual plan, following
approval by the president, and also performs internal audits
independent of business units that execute operations, based on
the annual plan, presents the results of each internal audit to
the president and regularly reports to the Board of Directors.
The Auditing Department also draws up plans for internal auditsof the Group as a whole, monitors the status of internal audits
at subsidiaries, performs internal audits at subsidiaries that do
not have auditing departments and for TIS divisions, offers
necessary advice and provides supervision. Complementing
these activities, the Auditing Department regularly exchanges
information with internal auditing departments at Group
companies, sets up information exchange opportunities thatinvolve the department, members of the Audit & Supervisory
Board and the independent auditor, and shares information on
auditing measures and the results of audits as required.

that TIS reduces any cross-shareholding with diminished significance, as identified through the review.
In the review, shareholdings are divided into the three categories (“capital alliance partners”, “customers” and “others”not applicable to the first two categories) and examined using
the method set by category.
Please visit the following page for the details of the examination methods.

TIS INTEC Group Value Creation

1. A
 udits conducted by Audit & Supervisory Board
Members
The Audit & Supervisory Board of the Company holds a meeting
once a month, in principle, and may meet on an ad hoc basis
whenever necessary.
The Audit & Supervisory Board carries out an audit of theexecution of operations by directors, an audit of the internal
control systems, an audit of the execution of duties by theaccounting auditor, and an audit of the status of complianceand risk management on a recurring basis based on the policies
and plan determined at its meeting.
In addition, audits were conducted with an emphasis on the
progress of the new Medium-term Management Plan (Be aDigital Mover 2023) in the first fiscal year, application status of
new accounting standard for revenue recognition, theoperational status of Group risk management and compliancestructure, the status of measures regarding strategies for humanresources as a source of growth and the creation of on-the-job
skills, and the impact brought by the novel coronavirus (COVID19), as key audit items in the year ended March 31, 2022.

1. Criteria for and approach to categorizing investment shares
While TIS has made reduction of domestically listed shares a priority issue and adheres to this as much as possible in accordancewith Company-defined basic policy on corporate governance,
the Company holds shares in other companies, including startups and venture companies, only when management believes
that it will contribute to the sustainable growth and higher­medium- to long-term corporate value of the Company and theGroup.
Specifically, when cooperation, co-creation and stable partnerships with such companies are deemed essential to continuous creation of business opportunities and utilization of technologies to actively promote business development particularly inthe areas of financial inclusion, urban concentration and regional
decline, low-carbon/decarbonization and health concerns, which
are all social issues where the TIS INTEC Group can help to realizea more sustainable society, then such cross-shareholdings are
considered investments consistent with the Group’s growth strategy and defined as strategic shareholdings.
TIS and other companies under the Group umbrella holdshares in other companies including start-ups and venture companies, only when management believes that it will contribute to
the sustainable growth and higher medium- to long term corporate value of the Company and the Group. For the shares held
based on the judgment that they would contribute to the sustainable growth and higher medium- to long-term corporate
value of the Group, the Board of Directors reviews the relevanceof continuous cross-shareholdings each year. It is corporate policy

Top Message

Directors(excluding External Directors)
Audit & Supervisory Board members(excluding External Auditors)
External Directors andExternal Auditors

Remuneration

Cross-Shareholdings

Introduction

Remuneration for Directors and Audit & Supervisory Board Members (Year Ended March 31, 2022)

E

S G

GovernanceCompliance/ Internal Control/ Preventing Corruption/ Information Security
Preventing Corruption

E S G

TIS
Group Internal
Control Committee
Reports

Group Helpline

Instructions

Use

TIS INTEC Group companies

TIS INTEC Group companies(Directors, employees, business associates)** Each company also has established its own individual helplines.

■ Establishment of helplines

President
Direction

Report*2

Director responsible forcompliance management

Audit & Supervisory Board

Direction

ReportAssuring confidentiality and anonymity of whistleblowers• In addition to setting up a Groupwide helpline at TIS, we have established outside lawyers’ contact points at each Group company.
In these ways, we are creating an environment that makes it easy to report and receive advice, not only on corruption but also on
overall compliance issues.
• We take care to protect whistleblowers in accordance with the Whistleblower Protection Act. This includes ensuring the confidentiality of whistleblowers and being open to receive anonymous notifications.
Conveying our anti-corruption policy to officers and employees• We conduct Groupwide compliance education based on our “Group Compliance Declaration” and “Group Code of Conduct.” Wealso convey information about preventing bribery and corruption through e-learning and face-to-face meetings.
Corruption risk assessments and countermeasures• As part of our risk management system, we determine the presence of risk, undertake assessment of risk level, and implement
countermeasures.
• Outside Japan, where corruption risks are higher, we undertake individual corruption risk assessments, the results of which arereflected in our risk countermeasures.

ReportReportTIS External helpline(Law firm)

Discuss/
Consult

Consult/Report

Discuss/
Consult

TIS Internal helpline

Information Security

Investigator

Compliance Management Dept.

Relevant
departments

Consult/Report

Whistleblower (Directors and employees of TIS INTEC Group companies and business partners)*1 Group Internal Control Committee members include TIS full-time directors/full-time Audit & Supervisory Board members, presidents of key operating subsidiaries, and others.
*2 Director responsible for compliance management: Division Manager of Corporate Management SBU■ Whistleblower System

Released TIS INTEC Group Tax Policy
The TIS INTEC Group carries out corporate activities as a good member of society based on OUR PHILOSOPHY, which­represents the values of the TIS INTEC Group. Under the philosophy, we formulated and released the TIS INTEC Group Tax
Policy in April 2022 in order to pay taxes appropriately in compliance with the laws and regulations of each country.
https://www.tis.com/group/sustainability/policies/taxation/
We will continue to maintain tax compliance, remit appropriate tax obligations as a company, and conduct initiatives
to improve tax transparency for our various stakeholders.
73

Management
TIS has appointed a director to be responsible for information security
management to oversee the establishment and operation of a Groupwide
information security management system. An information security audit
manager, independent from the director responsible for information security management, confirms the effectiveness of the management system.
Employee education
We conduct education programs for all employees (regardless of employment status) based on our “Group Information Security Policy (Education
and Training)” and “Handling of Personal Information (VIII-2. Human
Security Control Measures).”

ISMS/PMS Promotion System
President
Director responsible for information
security management
Secretariat
Implementation departments
Business divisions
Corporate Information/Data

In January 2020, TIS obtained whistleblower system certification under the
Whistleblowing Compliance Management System (WCMS).
WCMS is a system through which Japanese companies evaluate their own whistleblowing programs and apply to have them registered. Each program undergoes areview by the designated registration organization (the Japan Institute of Business Law)
to determine if it meets certification standards. If the application is approved, the submitting company is registered and is granted the right to use the WCMS mark, whichindicates that the business has in place an excellent management system to underpin compliance.

Safeguarding personal information
TIS has established its rules for protection of personal information in accordance with Group Information Security Policy, Privacy Policy and Policy on
Handling of Specific Personal Information and aims at promoting measures
to confirm, evaluate and improve the management of personal information
received from its customers, suppliers, business partners and shareholders.
In addition, TIS conducts education and training programs for its officers, employees and partner employees to thoroughly raise their awarenessof the importance of protecting personal information, and appropriately
operates the personal information protection management system in compliance with Privacy Mark (JIS Q 15001).

Platform for Value Creation

Internal Control

The TIS INTEC Group has formulated Group Information Security Promotion Rules in accordance with our Group Information Security
Policy. Initiatives are promoted to verify, assess, and improve the level of information security management across the Group in accordance with these rules, and the status of these activities is audited. In addition, the Internal Control Committee monitors progress
and the audit results.

Growth Strategy for Value Creation

Direction*1

Group Internal
Control Committee

Oversight of anti-corruption measures at Board of Directors meetings• As part of our Groupwide compliance promotion activities, we are working to establish a system for preventing corruption, which
has been approved by the Board of Directors. Going forward, the system will be developed to involve continuous reporting at theBoard of Directors meetings.

TIS INTEC Group Value Creation

TIS maintains a helpline available to all directors and employees, including contract staff and temporary staff, as well as retired employees in addition to employees at providers, such as businesses with contracts to supply products or services to TIS. This helpline (External
helpline, Internal helpline) can be accessed by email or telephone and meetings can also be arranged to get advice or report an issue inthe event actions within the Company are thought to violate laws, internal rules or social standards or the potential for such misconduct
becomes known.
Every effort is made to ensure the privacy of helpline users. In addition, no one who asks for advice or makes a report to thehelpline shall suffer any disadvantage in a professional sense. Lawyers with expertise specific to the issue raised or staff at the helpline
desk will respond to requests for advice and, when necessary, management will be informed of situations, with the consent of thehelpline user, to expedite a solution to the issue.

Preventing bribery and corruption• The TIS INTEC Group declares its commitment to preventing bribery and other forms of corruption in its “Group Code of Conduct(Conducting business with fairness)” and other statements, and works to ensure a full understanding by all officers and employees.
• In addition to TIS (parent company), we apply our “Anti-Bribery Regulations” to domestic and overseas Group companies in orderto strengthen our system for preventing bribery.

Top Message

TIS established TIS INTEC Group Internal Control Committee to ensure
appropriate compliance throughout TIS INTEC Group and to guide TIS
INTEC Group in activities to further improve compliance practices.
In addition to internal helplines at each company under TIS INTECGroup umbrella, TIS maintains an open channel for use by TIS INTECGroup as a whole. TIS strives to prevent, detect, and correct misconduct
as early as possible. The Company is addressing various internal issues inan effort to strengthen compliance management.

Introduction

Compliance

Head office departments
Operational departments
Administrative support departments
Information security audit manager

74

GovernanceE

S G*Please visit the following page for details of our risk management
https://www.tis.com/ir/policy/risk/

Risk Management

Financial risk
Risk items■Management process

E S G

Owned
securities

Risk items

Items

10

39

Financial risk

4

14

Hazard risk

39Operational risk

1040

Evaluation

Evaluate and improve(each fiscal half)
Review risks (each fiscal year)

2

3

4

5

Great

6

7

8

9

10

Large

5

6

7

8

9

Medium

4

5

6

7

8

Small

3

4

5

6

7

Slight

2

3

4

5

6

5– 6

Medium risk
Implement countermeasures andcheck risk trends periodically

2–4

Low risk
In principle, adopt a wait-and-see stanceNaturaldisasters• A large natural disaster results in an extended power
outage that interrupts the smooth operation of data
centers.

• Loss of competitive advantage because we failto respond quickly to advances in information
technology and to changing market needs thatparallel these advances.

Intensification • Price competition intensifies more greatly than
expected.
ofcompetition,
pricecompetition
Investment• The expected result or return cannot be obtained.
• Assets become obsolete.

• Overseas business is impacted by various factors,
including global economic and foreign exchange
trends, legal regulations on investment and competition, local business practices, and labor-management
relations.
Human rights • The occurrence and disclosure of any events which
may have a direct or indirect negative impact on
certain stakeholders result in damage to the­reputation and credibility of the Group.
Changes to social • Newly emerging international pressures, exchange
conditions due to rate trends, trade issues, or effects on procurement
warfare, civil strife, costs affect the Group.
political upheaval,
revolution,
terrorism, rioting,
etc.

75

• Tasks outsourced to business partners do not meet
expectations for productivity or quality and smoothproject management is not realized.

• Hold meetings with business partners regularly.
• Seek to understand the situation and capabilities of business partners using questionnaires
and other means and build strong relationships, and secure superior business partners inJapan and overseas.

Main countermeasures• Develop human resources portfolio and enhance investments for the purposes of acquisition
and growth of personnel.
• With the aim of enhancing workstyle reform and employee motivation, strive to securetalented human resources by providing a corporate culture, HR systems, and an officeenvironment in which a diverse group of people can thrive.
• Focus on human resource training by providing support for acquiring certifications, systemizing
training programs, and creating plans and targets for the number of training days.
• Constantly conduct research into information technologies as well as production and development technologies.
• Select from a broad technology portfolio the core technologies that will enable us to sustain
and improve our development competitiveness, advance R&D and deploy theresults.
• Continuously carry out productivity innovation activities and enhance the digital transformation
value it provides.
• Constantly analyze the business environment to better grasp customer needs, offer higher
value-added services and take other measures to differentiate from competitors.
• Improve productivity by curtailing unprofitable projects and engaging in productivity innovation
activities.
• All investment decisions are made after thorough examination of business plans by either the
Board of Directors, the CVC Investment Committee, or the Investment Committee.
• Progress of each business plan is periodically confirmed after an investment has been made.
• Keep abreast of such progress by dispatching directors to larger capital investment partners.
• Improve the management structure by ensuring coordination between overseas Group
companies and business sites and corporate management in Japan to maintain an accurate
understanding of local conditions and consult on ways to implement rapid countermeasures.
• Dispatch human resources to operating companies and enhance the system for governance ofoverseas subsidiaries and affiliates.
• Promote human rights due diligence in line with the Group’s human rights policy.

• Prepare a system which enables us to quickly conduct analysis of the impact and engage inactivities to prevent losses due to the identified risk.

Systemoperation• Develop a systems maintenance/operation framework based on ITIL (Information Technology• System problems arise due to human error or
equipment malfunctions during system operation and Infrastructure Library) practices and improve system operation quality using this framework.
• Establish and strengthen measures for early detection and confirmation of system failures andthe Group is unable to provide services at the levelmeasures to reduce and prevent the occurrence of failures.
agreed upon with the client.

Information
security• Confidential information is leaked or manipulated
due to a computer virus, unauthorized access, orother reason leading to claims for damages fromclient companies and to a loss of trust in the Group’s
services.

• Establish and operate an information security management system based on our Information
Security Policy that seeks to ensure appropriate information management.
• Raise employee awareness through education and training programs.
• Apply the Group’s information security promotion guidelines to check and evaluate the status
of information security management across the entire Group, and promote continuous
improvement in information security.
• When an information security breach does occur, establish an investigative committee and set
up the structure of responsibilities, including looking into the cause, implementing countermeasures, and preventing recurrence, for problem resolution.
To protect personal information• Establish an information management system based on Japan’s Personal Information
Protection Act and regulations on the handling of individual numbers and information about
specific individuals.
• Conduct education and training programs for employees to thoroughly raise their awarenessof the importance of protecting personal information, which will contribute to more appropriate handling of personal information, including stronger management of client information• Implement security measures using a zero-trust security model to address the diversification of
workplaces with the full-scale implementation of working from home.
*TIS and other Group companies have obtained Information Security Management System (ISMS) certificationand the JIPDEC PrivacyMark.

Legal systems, • A law or regulation is contravened, or a new law orcomplianceregulation is introduced.

• Establish a compliance structure based on our Basic Direction on Corporate Sustainability andGroup Compliance Declaration and endeavor to conduct our business activities fairly and incompliance with all laws.
• In accordance with the Group’s compliance regulations, discuss important compliance issues forthe entire Group, decide measures to prevent recurrence, and ensure the adoption throughout
the Group by monitoring the status of the implementation of these measures.
• Especially for the tightening of regulations on contracted work and temporary staffing, workon a dedicated risk management system as Group priority because of the transactional natureof the IT services industry, and create Group guidelines and independent inspection checklists
that will contribute to the appropriate operation of the system.
• To prevent illegal activities and detect and correct them at an early stage, introduce awhistle-blowing system and establish a reporting and consultation desk. Raise awareness oflegal compliance throughout the Group.
• Conduct education and awareness-raising activities aimed at building good relationships andestablishing smooth communication in order to help prevent discrimination and harassment.

Intellectual
propertyrights• The Group is accused of infringing another company’s intellectual property rights and presented withan injunction and a claim for damages.

• Strengthen our framework for intellectual property rights.
• Conduct education and training programs to raise employees’ awareness.
• Regard the Company’s own intellectual property as an important management resource andtake all necessary means to protect this valuable resource.

Climatechange• The Group’s energy costs are significantly impacted byfluctuations in demand for renewable energy.
• The Group’s transition to renewable energy is delayed.

• Carry out assessments in accordance with the TCFD recommendations framework, continuously implement countermeasures to the identified risks and opportunities , and disclose theresults.

76

Corporate Information/Data

Overseasbusiness

Main countermeasures• Use our proprietary Trinity quality management system based on the ISO 9001 standard tocontinually enhance quality management and raise productivity by using dedicated workgroups to thoroughly screen business proposals and review projects at each stage of development.
• Through the Group Quality Executive Meeting, improve quality and promote production
innovation throughout the Group while also enhancing management and technologicalcapabilities by strengthening training programs for each employee position.

Platform for Value Creation

Innovation of
production
technology

Overview of risk
• As systems development is growing more sophisticated and complex and turnaround times areshortening, extra work may be required in order toachieve the planned level of quality or complete theproject during the development period, leading toconsiderably higher-than-expected costs andcustomer claims for damages.

Growth Strategy for Value Creation

Overview of risk
• High-quality human resources are not secured anddeveloped according to plan.
• Productivity reduces, costs increase and employee
engagement lowers.

Risk items
Systemdevelopment

Identify risks to be prioritized(mitigated) by the Group fromamong the high-risk items

Strategic risk

• Make preparations to facilitate our data centers’ response to all manner of disasters based on
the Group’s business continuity plan.
• Close older data centers and focus on the development of state-of-the-art data centers
equipped with seismic-isolation structures, robust disaster-mitigation equipment, emergency
power generators, fuel storage equipment, and highly reliable electric power equipment, andnegotiate contracts for prioritized power supply.
• Establish stockpiles, conduct drills, establish a remote work system aimed at mitigating the impact
when conditions make commuting to work difficult, and promote a paperless workflow.

Operational risk

Priority risks shared by
all Group companies
Implement Groupwide response

The Group defines “risk” as “any factor that may hinder the achievement of the management philosophy, goals, and strategies of
the Company and the Group by causing economic loss; the interruption, stagnation, or suspension of business operations; and/or
damage to the Company’s credit or brand image” and identifies risks.

Main countermeasures• A sharp constriction of the productive activities of our • Keep abreast of the responses of the World Health Organization (WHO), the Japaneseemployees and those of our business partners
government, and other relevant authorities.
• Take action to improve hygiene at our offices, data centers and other work sites, based on theGroup’s business continuity plan, and refrain from sending employees to work in areas heavily
stricken by infection.
• Establish a work environment that facilitates working from home.

High risk
7–10 Prioritize the implementation of countermeasuresand constantly monitor risk trend■The Group’s risk recognition

Risk items
Human
resources

Overview of risk

Pandemics

TIS INTEC Group Value Creation

Subcategories

Degree of damage

Main categories
Strategic risk

1

Main countermeasures• Thoroughly examine issuers’ financial condition, business results trends, credit ratings, andother relevant indicators.
• Regularly review the suitability of our securities holdings and reduce them if the significanceof continued holding is deemed diminished.

Hazard risk

Risk occurrence frequency
Definition of risks

Overview of risk
• Sharp fluctuations in the market prices of marketable securities or deterioration in management
conditions of issuing entities requires the posting ofaccounting losses or other similar measures.

Top Message

The Company has established rules for risk management to ensure an accurate understanding of the risks facing the Group and prevent
losses from occurring. In accordance with these rules, we have appointed an executive to oversee risk management of the entire Group,
and a risk management department has been established to administer a risk management system. In addition, we have established arisk management policy for the entire Group and regularly check the implementation status of measures to control risk. When a Group
company becomes exposed to a serious risk, a task force is set up and appropriate measures are taken to minimize damage. As for thedevelopment of the risk management system, based on our basic policy and various rules governing internal control systems, we are
implementing specific measures for the maintenance and improvement of the internal control of the entire Group, monitoring thedevelopment and operational status of the internal control system, deliberating at the Group Internal Control Committee, and developing a process to report the results of these deliberations to the Board of Directors. Based on the reports to the Board of Directors,
initiatives will be implemented to further strengthen and improve the Groupwide internal control system.

Introduction

The Company strives to enhance the development of risk management system to prevent any losses.

■Risk mitigation approach for human resources
The TIS INTEC Group sees human resources as our most prized management capital in carrying out our business. When each andevery person involved in our business, including those who belongs to our partner companies, embraces the direction aimed at byGroup management and upholds appropriate professional values, our management goals will be attained. We also believe that our

Rightsholders

Procurement

Business sites/Major
offshore development sites

Develop- Manufac- Sales
mentturingUse

DisposalCountermeasures
Build a mechanism for engagement
Develop systems for diversity(2) Labor issues related
to outsourced
employees

Employees ofcontracted
companies

Spread awareness of the Group’s
human rights policies, and provide
education and training
Share of the Group’s Code of Conduct
Establish a grievance mechanism(3) Labor exploitation in Workers ofequipment supplier equipment
supply chain
suppliers

BPO services(4) Right to privacy in
Individuals whose
Assume potential risks and sort out
the handling of
personal information response policies
personal information is managed by aGroup customer

Other operations incidental to our businesses

Prepare Supplier Code of Conducts(5) Unintended use of
End-users/individuals Include provisions to prohibit
our products/services in society in general unintended use in the contracts
Assume potential risks and sort out
response policies■Risk mitigation approach post service launch (system operation)
To establish a “trusted top brand that epitomizes quality”, the TIS INTEC Group aims to be a company to continuously “create a safe

Business partners

society through high-quality services”. We have established a structure to conduct quality inspections so that we can stably provide
Outcome• Stable acquisition of high-caliber partner companies• Support for capacity building• Promotion of dialoguehigh-quality services after service launch, as well as we elaborate service quality in planning and development phases.
Quality of system/software

Quality for security

Implementation of examination under ISO/IEC
27017• Carry out third-party examination based on
checklist compliant with ISO/IEC 27017• Expand acquisitions of ISO/IEC 27017 certification

Development of environment to verify security
vulnerability• Require using SAST and IAST tools• Implement third-party verification of security
vulnerability

Quality for areas
other than security

Improvement of delivery quality• Implement third-party examination based on
checklist for delivery quality• Implement regular inspection of operation andmaintenanceSophistication of system quality evaluation• Conduct whole-process quality evaluation in quality
evaluation for each phase• Incorporate viewpoints of ISO 25000 into quality
evaluation■Risk mitigation approach to human rights issues
To seriously address human rights issues throughout the value chain, the TIS INTEC Group has established a human rights due
diligence system in accordance with the TIS INTEC Group Human Rights Policy, which is based on the United Nations Guiding
Principles on Business and Human Rights.
In fiscal 2022, with the cooperation of NPO Caux Round Table Japan, we conducted a human rights risk assessment for the firstprocess, “1. Identify and assess negative human rights impacts”. Specifically, we evaluated the potential for negative human rights
impacts at each stage of the value chain (procurement, development, manufacturing, sales, use, and disposal) of the Group’s
operations. Through this process, we identified potential human rights risks and clarified the countries, operations, and rights holders(subjects who may be negatively affected by human rights issues) that should be prioritized for future action. Based on the results of
the human rights risk assessment, we will implement countermeasures to prevent and mitigate each of the potential human rights■Risk mitigation approach for information security

risks identified and make efforts toward remediation of negative human rights impacts in the value chain.
https://www.tis.com/group/sustainability/social/hrdd/

claims for damages from client companies and a loss of trust in the Group’s services would result from such incidents. Therefore, weOnce we allow any leakage or manipulation of confidential information due to computer virus infections or unauthorized accesses,

Group Information Security Policy throughout the Group and raising them to certain level.

Policycommitment

1. Identify and assess negative
human rights impacts

2. Prevent and mitigate negative
human rights impacts

4. Communicate toexternal parties

3. Track the effectiveness of
our responses

Remediation

Increased external threats⇒	Standardize countermeasures to betaken on development

Diversity of workplaces⇒	Assume workstyle which enables
employees to work at anywhere	Monitor behavior of terminals,
implemented automatic isolation on
infection

	Introduce a zero-trust security model	And take other measures

Strengthening of regulations related
to personal information⇒	Address Japan’s Personal Information
Protection Act

Corporate Information/Data

Stakeholder Engagement

Examples of information security countermeasures in response to recent changes in the environment	Consider addressing foreign laws
related to personal information
protection

Grievance Mechanism

77

Platform for Value Creation

have realized an appropriate management of information on a Groupwide basis by unifying information security policies under the

Human Rights Due Diligence

Growth Strategy for Value Creation

Quality of operation and maintenance

TIS INTEC Group Value Creation

Outcome• Accelerated raise in annual salary• Improved quality of education and enhanced motivation

Rights holders
TIS Group
employees

Hardware sales

Employees• Investments in compensation• Investments in education

Human rights risks(1) Labor issues related
to TIS Group
employees

System software development

society through IT.

■Investments in human capital

19 humanrights issues

Potential human rights risks identified

Top Message

investments in human resources to attain our business goals will mitigate various management risks as well as realize a comfortable

Human rights risk assessment conducted

Introduction

For risks identified during our risk management process, we designate a department in charge of crisis management andpromote initiatives to mitigate such risks on a Groupwide basis.
Risk mitigation approaches we focus on, in consideration of the current business environment, are as follows.

78

E

S G

Governance

Quality Control and Production Innovation

E TISS INTEC
G Group strongly recognizes the role that information systems play as social infrastructure. For this reason,The
we work continuously to improve our quality, productivity and technical capabilities.
By always providing high-value-added services while responding flexibly to diversifying business formats, solutions,development techniques and technologies, we aim to entrench TIS INTEC as a “trusted top brand that epitomizes
quality” and realize the mission set forth in OUR PHILOSOPHY.

g Activities aimed at improving standards across the entire GroupThe TIS System Development & Quality Management Innovation SBU and the Technology & Innovation SBU are spearheading the following activities aimed at improving the quality, productivity and technical capabilities of the entire Group and harnessing Group synergies.

Group Technical Reinforcement Committee

Undertakes the following activities to improve Group quality and productivity:● Establish PDCA cycle for setting and achieving KPI targets and monitor status of initiatives● Promote sharing and lateral development of issues, countermeasures, andknow-how of each company

Promotes sharing and effective use ofeach company’s activities in order tostrengthen the Group’s developmentcompetitiveness

Deficit eradication

Enhancement innovation

Offshore promotion

Strengthen technical capabilities

Group screening● Proposal review● Review at start● Process inspection● Project review

Know-how and tool
sharing● Enhancement framework● Diagnoses, etc.

Sharing and lateraldevelopment ofoffshore promotion
measures

Enhancement
activity presentation
Service manager
training

Shared use ofoffshore BP

g Trinity: Original quality management system based on ISO 9001 and ISO 20000* In fiscal 2022, a number of our service-development offices were certified under ISO 20000, the­international standard for IT service management.
* For more details:

Sharing and lateral­deploy­ment of project risk­management measures● Project management	­training

Utilize Fintan* and activate feedback*System development know-how/tool aggregation site
Revitalize canal**Technical support/Q&A service site
Tech Lead Team activities*Multiple technology platform, canal, supported by 140
senior engineers

Events, such as
offshore colleges

TIS INTEC Group Value Creation

We strive to provide customers with optimal services based on our policy of“promoting improvement by making use of onsite ingenuity.” At sites, we employ
ingenuity to tailor each business model appropriately while applying processes,
techniques and tools in project management engineering service management.
We are expanding the scope of coverage to include not only scratch development but also a wide variety of business formats.

Top Message

Group Quality Executive Meeting

High-level architect reviews to deal with technicalrisks

https://www.tis.com/group/csr/report/social/quality/

Results in fiscal 2022, ended March 31, 2022
●TIS companywide review proposals: 70●TIS system development meetings: 198●Group Technology Enhancement Committee meetings: 12 ●Number of Group screenings: 191

g Further Quality Enhancement Initiatives●Group Quality Executive Committee meetings: 35

2022–

–2021

Enhance profit margin(100 millions of yen) (TIS INTEC Group)(TIS parent)

Offshore outsourcing contracts(1,000 work months)

Growth Strategy for Value Creation

Efforts to Dispose of Unprofitable Projects
We are strengthening our efforts to dispose of unprofitable projects. In addition to our current approaches to projects, organizational
structure, and culture, our priorities will be to further strengthen project management skills and foster psychological safety.
Development losses and loss rate

Gross margin on development(TIS parent)(TIS parent)

17.8

Project approachn Companywide review measuresn Companywide monitoringmeasuresn Review of unprofitable projectsn Training measures

19.4

18.5

n Organizational activity

15.3

Measures to further quality enhancement

0.8%

Fiscal2021

Fiscal
2022

10.0
0.7%

0.4%

n Measures to strengthen project management skills
n Measures to foster psychological safety

Fiscal2021

Fiscal2022

Fiscal2023(estimates) Working groups on fostering psychological safety
 Creation of meeting methods
 Linking various activities to foster psychologicalsafetyFostering
psychologicalsafety Assess issues related to psychological safety
 Assess behavioral characteristics and feedback for
improvement2) Understand and learn
 Learning about psychological safety andpsychological flexibility(e-learning videos, group training)

Fiscal2022

Fiscal2023(estimates)

Fiscal2023(estimates)

Fiscal2021

Fiscal2022

Fiscal2023(estimates)

Ikuo Shimizu
TIS Executive Officer,
Division Manager ofSystem Development &Quality Management
Innovation SBU

Unprofitable projects and major incidents not only affect our Group’s business performance, but also have a negative impact on clientcompanies, end users, and the employees who deal with them. The eradication and deterrence of such issues is a key management priority
and responsibility. To this end, in addition to the approaches we have taken to date to avoid bad news regarding projects and to foster ourorganizational culture, we will further strengthen and implement concrete measures to enhance project management skills and foster
psychological safety.
When it comes to fostering psychological safety, it is important how we ensure safety and improve the quality of our relationships witheach other. While confronting real problems, we aim to build the team best able to create value by gathering wisdom that will lead us closer
to our ideals and who we want to be. We have named the activities, re:Bornk (Technology KI), fostering psychological safety kaika, meaning“opening” or “blossoming”. This focus will maximize the potential of our Group to open itself to new opportunities and experiences.

Corporate Information/Data

1) Measure and detect

Three-step approach

Fiscal2021

The gross margin on development rose through the employment of various measures

Kaika: Initiatives to foster psychological safety

3) ActPlatform for Value Creation

diagnosticsn Measures to promote quality
evaluation

Initiatives to foster psychological safety
Our activities to date have shown that building a team that enjoys a high level of psychological safety is important to curb unprofitableprojects. The following three steps will be taken to foster a culture in which employees can safely and securely express their opinions.

79

15.2

Measures to enhance organizational culturen Teambuilding measures

Introduction

Aiming to be a “trusted top brand that epitomizes quality”

80EnvironmentE

S G*Please refer to the link below for more information on our environmental initiatives:
https://www.tis.com/group/sustainability/environment/

For the Global Environment

E Group
S Ghas addressed preservation of the global environment in its Basic Policy on Corporate Sustainability,The
which is based on its basic philosophy, OUR PHILOSOPHY. In order to realize a sustainable society, we are ­promoting
efforts to preserve the global environment both by reducing the environmental impact of our business activities
and by contributing to our customers’ and society’s efforts to mitigate and adapt to climate change through theprovision of our services.
g Environmental targets for climate change in the medium and long term

Scope 1+2 : 27.5% reduction versus fiscal 2020
Scope 3
: 27.5% reduction versus fiscal 2020n C
 onsolidation (optimization) through data center consolidationn C onsolidation of group offices by region

Reduce GHG emissions per unit through consolidationn Implementation of systematic switchover to renewable energy sourcesn Improvement of air conditioner efficiency (reduction of air conditioner power
consumption)n Implementation of systematic switchover to renewable energy sources

We have already set a goal of raising the renewable energy utilization rate
to 50% by fiscal 2030 for eight of our 14 data centers nationwide.
Together with the effects of the planned data center consolidation by
fiscal 2024, we estimate a potential reduction of GHG emissions from data
centers of 67% (as compared with fiscal 2020). We plan to expand ourefforts to other data centers in due course.

n C onsideration and implementation of energy conservation measures involving

building owners
Inquiring about LED lighting, energy conservation of air conditioning equipment, etc.
Other measures to reduce GHG emissionsn F urther promotion of telework and remote meetings

 educe the use of public transportation for commuting and business travel,
R
thereby indirectly reducing GHG emissionsn C
 onsidering reduction measures in collaboration with suppliers

In addition to the above initiatives, at data centers we are also promoting natural lighting, installation of small-scale solar power generation systems, androoftop greening.

Ratio of GHG emissions in the Group (actual results for fiscal 2022)
Percentage in
Scope 1 and 2
Scope 1
0.8%

Percentage in
Scope 3 by category

Percentage of
Scope 1 and 2 at datacenters

Transportation and delivery (upstream) Waste from business
0.2%
0.1%
Fuel and energy-related activities
not included in Scope 1 and 2
2.8%

Offices17.3%

Ratio ofCO2 emissions

Scope 2
99.2%

Products andservices purchased
83.3%

Ratio ofCO2 emissions

GHG emissions in Scopes
1 and 2

Data center and office GHG
emissions in Scopes 1 and 2

Scope 1

Data centers

Offices*The Group is engaged in the data center
business, which accounts for more than
80% of the Group’s total Scope 1 and 2
GHG emissions.

DC
82.7%

Category 4
Transportation anddistribution(Upstream)

Category 5
Waste
generated inoperations

Category 6
BusinesstravelCategory 7
EmployeecommutingTotal GHG
emissions in
Scopes 1-3

513

64,15753,483

11,187300,905

42,690

9,987

405

651

2,000

4,778

426,085

Fiscal 2021 (t-CO2)

760

65,86755,382

11,246287,633

65,782

9,794

215

345

2,025

6,256

438,678

YoY change (t-CO2)-32.6%

-2.6%

-3.4%

-0.5%

+4.6%

-35.1%+2.0%+88.5%+88.4%-1.2%-23.6%-2.9%

Long-term simulation of GHG reduction in Scopes 1 and 2
66.6

64.6

16% reduction 22% reduction 27% reduction 33% reduction 35% reduction 38% reduction 40% reduction 43% reduction 45% reduction

60
50

54.5

50.9

40

47.4

43.8

42.2

40.6

39.0

37.4

35.8

Fiscal2027

Fiscal2028

Fiscal2029

Fiscal2030

Fiscal2031

30
20

Six and a half years have passed since the Paris Agreement was adopted in 2015 under the United Nations Framework Convention
on Climate Change (UNFCCC). 2015 was also the year that the Sustainable Development Goals (SDGs) were adopted at the UN
Summit. I think there has been a lot of progress in the last few years, especially in the area of climate change, as exemplified by theJapanese government’s 2020 declaration that it will achieve carbon neutrality by 2050.
The Group has been promoting various measures to mitigate the effects of climate change. For GHG emissions reduction, we
calculated emissions for each fiscal year, identified business risks associated with climate change, and set reduction targets based on
financial impact analysis. We also discussed a transition plan on how to realize the reduction target in concrete terms, mainly withexperts within the Group.
As a result, we announced that we aim to achieve a 27.5% reduction in emissions by fiscal 2031 compared to fiscal 2020,
Tsuneyoshi Ito
based on a reduction target in line with the 2°C target of the Paris Agreement (WB2C scenario).
TIS Managing Executive Officer,
On the other hand, there are some concerns. Over the past year, the electricity supply situation has changed dramatically on a
Division Manager of Corporate global scale. Soaring prices of non-fossil fuels have a significant impact on renewable energy prices, and unstable power supply
Management SBU
conditions due to repeated power shortages can be a major variable for the data center business, one of the Group’s core businesses. As a data center service provider, we recognize that one of the most important management issues for our Group is to beable to purchase energy with low environmental impact at a stable and appropriate price and provide data center services to our customers.
The role that companies must play in addressing global environmental issues has become increasingly important in recent years. The Group believes it should
aim for even higher targets without slowing down its efforts to become carbon neutral, and is now considering moving the plan forward and is in the process of
formulating new reduction targets in line with the 1.5°C target of the Paris Agreement.
The Group will continue to contribute to the realization of a sustainable society by addressing climate change and other global environmental issues.

Corporate Information/Data

Scope 1+2 emissions (kt-CO2)

65.2

Rooftop greenery

Platform for Value Creation

Fiscal 2022 (t-CO2)

70

Solar power generation monitor

We are accelerating our environmental response, including the development of reduction targets in line with the
1.5°C target

GHG emissions by category in Scope 3
Category 1
Category 2
Category 3
Purchased Capital goods Fuel- andgoods andenergy-­services
relatedactivities
not includedin Scopes 1
and 2

Natural light (solar tracking equipment)

Growth Strategy for Value Creation

Capital
goods
11.8%

Ratio ofCO2 emissions

Scope 2Business travel
0.6%
Employees’ commute
1.3%

10
0

Fiscal
2020

ActualFiscal2021

Fiscal2022

TargetFiscal2023

Fiscal2024

Fiscal2025

Fiscal2026

Reduction required WB2°C

Under Scope 1+2, we have established GHG reduction plans for each fiscal year. In line with this, we will manage our GHG emissions by tracking budgets versus actuals and work to achieve our targets.
*The reason for the increase in emissions in fiscal 2021 compared to the previous year is due to the addition of data centers for calculation.

81

TIS INTEC Group Value Creation*One of the metrics for GHG reduction
targets. A framework that encourages
the setting of GHG reduction targets,consistent with the 2°C/1.5°C targets(limiting the temperature increase frompre-industrial revolution levels to less than
2°C and referring to efforts to limit theincrease to 1.5°C) called for by the Paris
Agreement adopted in 2015.

Group GHG emission reduction target
for fiscal 2031

Measures to reduce GHG emissions in offices

Top Message

With the aim of becoming carbon neutral in 2050, the Group aims to reduce GHG emissions in fiscal 2031 by 27.5% compared tofiscal 2020, based on the reduction target (WB2C scenario) in line with the 2°C target of the Paris Agreement. This reduction target satisfies the SBT (Science Based Target)* requirement and has been certified as such.

Measures to reduce GHG emissions in data centers

Introduction

Initiatives to achieve the Group’s GHG reduction targets

Initiatives to address climate change

82

The Group endorsed the recommendations of the Task Force on ClimateRelated Financial Disclosures (TCFD). We disclose information regarding
our initiative progress in line with TCFD recommendations, strengthening
our measures for climate change.

Risk

Short
Term

Medium TermLong Term

Fiscal 2031
Financial Impact

Risks related to
GHG reduction—

Transition risk (Regulatory)
Rising energy prices
Regulations based onregional ordinances

Transition risk (Reputation)
Trust of society eroded and clients distancing themselves from us because we areunable to achieve GHG reduction
Transition risk (Regulatory)
Higher costs due to carbon tax¥8,008 million - Possible loss that could be¥8,508 million averted if difficult GHG
reduction targets, such ascarbon neutral status, areachieved

Risks related tomethod of GHG
reduction—

Transition risk (Market)
Cost to introduce renewable energy

Transition risk (Market)
Higher costs due to GHG reduction andintroduction of renewable energy¥100 million ¥203 million

Potential additional­expenses that might beincurred by reducing GHG
emissions

Risk of physicalimpacts—

Physical risk (acute)
Heightened risk due tounusual weather events,
including floods

Physical risks (chronic)
Higher costs due to rising temperatures¥9 million

Possible additional expenses
caused by physical impacts ofclimate change

The TCFD requires disclosure in four core areas: governance, strategy, risk management, and metrics and targets.
g Governance■Climate change (decarbonization, low carbon, and flood damage measures)
CO2 emissions

Temperature riseElectric power company(power generation)

OIL
Thermalpower plant

Electric power
Renewable energy(Cost increase)
Initiatives

CO2 emission
reduction
Service provision
The Group: Grid-related business
Opportunity: Contribute to the further
expansion of renewable energy through thepromotion of P2P trading of clean power(non-FIT power sources) and the mass use ofrenewable energy through ICT, AI, etc.

83

Risk: Damage caused by flooding
Risk: Higher electricity charges due to rising temperatures
Risk: Increased costs due to use of renewable energy
Risk: Increased added expenses due to use of renewableenergySolution: Data center and office consolidation• Transition to flood-resistant data centers• Efficient use of electricity through data
center/office consolidation

CO2 emission
reduction

Promotion of CO2 emission
reduction measures• Promoting telework andDuration

Needs, Increasing in Line with Measures andTargets to Address Climate Change

TIS and TIS Intec Group Responses

1More opportunities to Short term More companies are taking advantage of on-premiseprovide data centertocloud setups and using renewable energy to power highly
services and cloudlong term energy-efficient hardware. Notably, we anticipate wider
services to meetdemand from companies that have set reduction targets
needs of low-carbon/­under RE100 and TCFD ­standards.
decarbonized society

We see expanding opportunities to provide data center services byraising the renewable energy ratio and energy efficiency at TIS INTECGroup data centers. The current target is to lift the renewable energy
ratio at data centers to 50% by fiscal 2031. (TIS seeks to integrate
data center operations at environmentally favorable locations and cut
GHG emissions by 67% relative to fiscal 2020 levels.)

2

Greater need forsystem upgrades toimprove environment
for electric powercompanies and­redesign power
infrastructure

Short term Society urgently needs to transition from its reliance ontothermal power generation to renewable energy, with anlong term emphasis on hydro, wind and solar power, to reduce GHG
emissions in the energy conversion sector, which accounts
for 40% of emissions in Japan. In conjunction with thisshift, demand is sure to rise for power transmission /distribution network rebuilds and upgrades suitable for asociety using distributed energy resources.

Drawing on business know-how amassed over 30 years of businesswith energy companies, we are indirectly involved in shaping electric
power infrastructures and promoting the decarbonization of energy
companies, driven by their embrace of DX in power generation andsystem changes based on legal revisions.

3

More opportunities to Short term We apply AI and IoT technologies used to automaticallyprovide IT services
tocontrol virtual power plants (VPPs), the pinnacle of energy
and solutions tolong term conservation and energy production, and achieve energy
address new needs
efficiency. We anticipate an increase in the need for
related to climate
various IT services that help to better materialize hiddenchangepower sources and for resilience services to address
climate change risk.

To make it a future strength, we are promoting various IT services
and we are in the process of planning and developing such services
through development driven by forward-looking investment andthrough collaboration and co-creation with stakeholders. We will
vigorously engage in initiatives to promote VPP solutions andnon-financial information reference and checking services forcompanies, and to set up businesses based on new technologies,
such as ­environmental value exchange and transfer certification.

g Risk Management

Service provision
TIG: Improving efficiency in mobility
Opportunity: Enabling the optimization of urban
planning and management systems through ICT-basedtransportation systems, etc., and promoting theeffective use of energy

videoconferencing to
reduce commuting
Reducing
emissions through•collaboration with suppliers

MethodRisks parallelingapproaches

GHG reduction(Greenhouse gas
reduction)

2

ResultRisks that can be
decreased throughsuccessful ­reduction

1

Risk

Physical
impacts

3

Risk Management Methods

1 Risk related to GHG
reduction outcomes

Establish carbon neutrality target
Create roadmap

2 Risk related to GHG
reduction methods

Renewable energy market survey
Budget plan

3 Risk of physical impacts Completedof climate change
Budget plan (rising air temperature)g Metrics and Targets

TIS uses groupwide greenhouse gas emissions, renewable energy introduction ratio and financial impacts as metrics for evaluatingclimate-related risks. For evaluating climate-related opportunities, TIS uses market scale, sales and other factors as reference values to­assess opportunities.
84

Corporate Information/Data

Solar, etc.

The Group: (Office DC)
power consumption

Opportunity

We have classified and organized risks into three categories—risks that can be decreased by reducing greenhouse gases, risks related tomethods for reducing greenhouse gases, and risks that accompany the physical impacts of climate change—and are considering­approaches to deal with these risks.

Torrential rain andsea level rise

Fossil fuelNo.

Platform for Value Creation

Climate-related risks, financial impacts, and opportunities
Based on the correlation diagram between the Group and environmental issues, we organize risks and opportunities in the Group.

Climate-related opportunities
Based on the correlation diagram, we have also identified the following climate-related opportunities.

Growth Strategy for Value Creationg Strategy*GHG: Greenhouse gas; short term: immediate impact; medium term: 1–3 years; long term: 4–20 years

TIS INTEC Group Value Creation

The Sustainability Committee assumes a groupwide perspective to explore measures that address issues related to sustainability, including environmental issues such as climate change, and to track progress on implemented measures. This committee is chaired by thepresident of TIS and meets twice a year with the participation of full-time directors, full-time auditors, the presidents of principal Group
companies, and managers of divisions that oversee TIS’s progress on materiality. Topics considered by the committee are discussed by theManagement Committee and then put forward to the Board of Directors.
As part of the push to embrace sustainability measures and activities, TIS extends measures related to environmental issues groupwide
through the Group Corporate Sustainability Officers Working Group. We also set up the TIS Energy Conservation Promotion Conference
and the Climate Change Business Information
Liaison Office as structures that constantly leverBoard of Directors
age awareness of risks and opportunities related
to measures aimed at mitigating the impact ofManagement Committee
Climateclimate change.
Change­Response
In addition, we take a nimble approach by
Corporate Sustainability Committee­Review­setting up working groups and assigning specific­Working
issues for each to address. The cross-divisionalGroup
Climate Change Response Review Working
Climate ChangeGroup Corporate
TIS Energy ConGroup was created in fiscal 2022 to identify
Business InforSustainability
servation PromoOfficers Working
tion Conference
mation Liaisonand evaluate risks and opportunities related toGroup
Office­climate change and facilitate disclosure in linewith TCFD requirements.

Financial Impact Overview

Top Message

What are the TCFD recommendations?
The TCFD was established under the Financial Stability Board (FSB), an international organization working to stabilize the financial system, and in June2017 released recommendations calling for disclosure of information on the risks and opportunities posed by climate change. The recommendations stressthe importance of companies recognizing the risks and opportunities of climate change and incorporating them into their business strategies.

Climate-related risks and financial impacts
Based on the correlation diagram, we listed the short-, medium- and long-term climate-related risks in the Group and assessed
the financial impacts in fiscal 2031.

Introduction

Information disclosure in line with TCFD recommendations

E

Social*Please refer to the following for initiatives to enhance the exchange of value between employees and the Company:
https://www.tis.com/group/sustainability/social/

S G With Employees

E S G

g Expansion of human resources that contribute to business strategy

The Group is pushing forward with structural transformation toward its medium-term management goal, Group Vision 2026, and has
formulated a human resource strategy that contributes to business innovation and market creation in four strategic domains.
Collaboration among HR Business Partners and SBUs
The skill levels, areas of expertise, and number of personnel required to execute each strategic domain are analyzed using careerframes* to create human resources portfolios based on the current situation. We conduct periodic reviews based on actual ­performanceand expand our human resources taking a medium- to long-term perspective.
In terms of human resource development, recruitment, appointment, and assignment, senior executives and HR business partners(HRBPs) share business and organizational issues and work througha cycle of activities aimed at achieving business goals.

Activity cycle

Issue
identification

Evaluation

Site x HR Business Partner(HRBP)
Good relationship of trust

Implementationof measures

Data-driven decision making
Recruitment and selection talent

Employment

Recruitment plan for structuraltransformation personnel
Recruitment analysis, onboarding

Education

Employee skills, career analysis
Development of DX consultants
and business leaders

Placement

Rotation for right person in right position
Providing opportunities for diverse work
experiences

Organizational
cultureImproving employee engagement
Retention, wellbeing

In addition to consistent hiring of new graduates, theCompany is strengthening its hiring of personnel
with diverse work experience, careers, and expertise. This is contributing to the acquisition of DX
consultants. In fiscal 2023, we will continue to invest
aggressively in mid-career recruitment with the aim ofacquiring high-level human resources.
Number of hires

To respond flexibly to changes in society and business,and to enhance our ability to transform our business,
we focus on developing human resources who willplay a key role in the DX of society.
We provide opportunities to learn the thinking
and skills required in each of the DX business and digital domains.

We promote measures in line with the Health Investment Strategy Map to improve the quality of lifeand strong performance of our employees.
We are promoting communication and organizational revitalization measures, with particular emphasis on social health.

DX Training Menu

Health Investment Strategy Map (Overview)

106

180

Investment target

Education on business organizations
Business domains—Advanced
Business understanding and DX consulting skills

Digital domains—Advanced
Ability to build advanced solutions

Education on business organizations

271

260

278

280

Fiscal 2020 Fiscal 2021 Fiscal 2022 Fiscal 2023
(actual)(actual)(actual)(estimates)

Business domains—Basic
Knowledge of business creation utilizing DX

Digital domains—BasicTechnical knowledge to advance DX

HR Reports
Monitoring performance indicators, supporting data-driven decision making
Talent Management System (TMS)
Supporting employees’ autonomous career development by integrating human resource
portfolios and employee career plans

85

Expected results
Demonstrating value as aprofessional

Health promotion
Increased vitality and productivity

Working = A sense offulfillment in life

Enhancing sophistication of
HR data analysis
HR Reports

Visualization ofhuman resources dataTMS

g A
 utonomous growth and career development

Create a corporate culture in which all employees
become movers and continue to change and take ona variety of challenges

Must/Will/Can framework
We have introduced the “Must/Will/Can framework” as a management foundation to improve the value exchange between the Company and individuals, and towork towards becoming a company where employees feel fulfillment and growthand can play an active role by having employees share the Company's corporate
philosophy and direction, and increasing the overlap between the Company’s goals
and what they want to do. Based on the concept of the new personnel system, eachGroup company plans to align its approach to goal-setting and performance
evaluation while taking business characteristics into consideration.

Must
Roles and duties
expected by theCompanyWill
Must

Career paths of
employees

Will

Can

Can
Strengths and issues of
employees

Diversity and Inclusion that leverages diverse individuals to provide value to society
We promote diversity management with the aim
Diversity
Inclusionof achieving “diversity fusion”, a state in which
Filling society
Creating
diverse personalities are fused together to create
with vibrantinnovation
continuous change and new value.
colors
We will promote measures based on the three
A state of having diverse talent A state in which opportunities for mutual understanding
aboundandcanbefreelydiscussed.
concepts of development of diverse talent, healthmanagement, and work style reform so that
Development of diverse talent: All employees grow and demonstrate individual strengths
employees with different ideas, careers, knowlHealth management: Nurturing the performance of employees and the organization as a wholeedge, and values, in addition to gender and age
Work style reform: Providing different work options and encouraging employee independence
differences, can be active movers.
*For more information on individual D&I measures, please visit our corporate website.
https://www.tis.com/group/sustainability/social/diversity/g Performance monitoring of talent strategies

In the Group, each company sets performance indicators based on its own issues and priorities, and implements the PDCA cycle. In
particular, we set group targets (KPIs) for indicators that we deem important, monitor and analyze them over time, and use them tomake management decisions.
Group-wide monitoring indicators

Vitality Enthusiasm Loyalty

HRDX concept

Human
resourcesdata

g A utonomous collaboration to produce results

Human resource
strategy

Measures ofeffectivenessGroup
performance

TIS parent
results

13.3 days

15.2 days(Annually)

10.3%

11.0%

(April 2024)

Education

Increased value as aprofessional

Number of training
days per person

Diversity

Demonstration ofindividuality and strength
Creation of new value

Percentage of female
employees inmanagement positions

Desire to Identification with
contribute the corporate philosophy

Developing humanresources

Performanceindicators

HealthEnhancing employee
vitality and performance

Employee satisfaction(Questionnaire)

Absenteeism(Injury and sickness
absence rate)

Shared goals (KPIs)

9 days11.2%(up 5 points)(up 5 points)

61%

50% or more company-wide

1.0%

1.1%

1.1% or less51%

Corporate Information/Data

HRDX supporting the human resources strategy participation
TIS has begun to develop an HRDX platform to measure the results of
its human resource strategies and visualize the value of its human­resources. Through HR reports and our Talent Management System (TMS),
we support the execution of data-driven management strategies and theautonomous career development of each employee.

Organizational development
Inclusive organizational culture

Fringe benefits
An environment conducive to working with security over the long term

DX basic education
Common knowledge that everyone knowsg P roviding value as a professional

Platform for Value Creation

Investment in health ¥410 million

129

Employees

Growth Strategy for Value Creation

Investment in education ¥1 billion

201

Improvedvalue
exchange

A human resources system that encourages each employee to act autonomously and achieves the development of human resources
TIS will introduce a new HR system from April 2023. The new HR system will encourage employee growth and the development of
human resources by recognizing actions that provide value as independent professionals and embody the Group’s basic ­philosophy,
OUR ­PHILOSOPHY.

Investment in recruiting ¥480 million(Unit: No. of Person)

Companyg A ppropriate and attractive compensation for performanceg C reating performance opportunities based on employees’

To be a company where diverse human resources sharethe company’s values and philosophy, and can enjoy
job satisfaction and professional development

Major Investments in Talent at TIS (Fiscal 2022)

Mid-career hires

To brightly color the future as a moverwishesOrganizational
management

Acquisition of diverse human resources: Investments to promote participation
In addition to promoting human resource strategies through collaboration between HRBP and business organizations, TIS is making
investments aimed at acquiring diverse talent and promoting their participation throughout the Company. The medium-term
management plan sets a goal of adding 500 DX consultants, and 300 were hired during fiscal 2022. We will continue to invest in areas
such as increases to employee recompense in conjunction with the HR system reforms scheduled in fiscal 2024 that will strengthen
career recruitment, developing a foundation for growth and success, and bolstering our corporate culture.

New graduate hires

g E
 nvironment where people can take on challenges withpeace of mind

HRBP support menu tailored to site needs

Considerationof measures

OUR PHILOSOPHY

TIS INTEC Group Value Creation

Understandingof the current
situation

In our Medium-Term Management Plan (2021–2023), we have positioned “sustainable engagement” as the cornerstone of our humanresources strategy. To enable employees to demonstrate their strengths as professionals with a high level of motivation to contribute, theTIS INTEC Group will increase the value it provides to society by enhancing the value exchange between employees and the Company
through active investment in human resources, including evaluation and compensation commensurate with human resource value, providing opportunities for diverse human resources to play an active role, and improving employee health and the working environment.

Top Message*The “career frame“ clarifies the human resources required by the Company and their levels to realize the longer-term business strategy.

g Sustainable engagement, the cornerstone of our human resources strategy

Introduction

Aiming to realize a human resources strategy that supports management(Increased by 3–5pt annually)(Annually)*Actual figures for fiscal 2022 (Group includes 7 major companies)

86

E

S G

SocialE

S G

With Clients and Business Partners

SocialWith Shareholders and Investors

g Fast, fair and impartial information disclosure, and dialogue with shareholders

TIS INTEC Group Business Summit 2022 held
E S G
The TIS INTEC Group holds the TIS INTEC Group Business Summit
every year as a forum to introduce its services and initiatives thatmake full use of advanced technologies and know-how to realize asustainable digital society. In fiscal 2022, in addition to a keynote
speech on the theme of “Metaverse” by Koji Koizumi, President of
loTNEWS, 35 sessions and 33 exhibited solutions were presented
by Group companies. We will continue to strive to invigorate
communication with our clients so that we can catch up with theirissues as quickly as possible and provide proactive support.

We provide performance results and the latest news on our business activities through events, such as results briefings and individual
E S andG through production of pamphlets and our website. In addition, we engage in constructive dialogue with stakeholders tomeetings,
achieve sustainable improvement in corporate value.

Percentage of respondents who answered TIS is “an irreplaceable business
partner” in the Client Satisfaction survey (4 or higher on a 5-point scale)

72.7%
69.1%

69.0%

68.2%

Fiscal2018

Fiscal2019

71.7%

Fiscal
2020

Fiscal2021

Fiscal2022

g With Business Partners

TIS Business Partner Forum/Business Policy Briefing 2022
convened

Held a meeting regarding sustainability management (in December 2021).

Small meetings for analysts and institutional investors*

221
times

Over course of fiscal year, provided IR-oriented information to analysts and institutional investors.
Total coverage: 363 companies (454 people). Of these meetings, 95 were for overseas investors.

Small meetings by President

Twice

President held two meetings with analysts (sell-side analysts: once, buy-side analysts: once).

Overseas roadshows

Twice

President, director responsible for overseas IR and other members of senior management met withshareholders and investors (in Europe, the United States and other regions) (in June and November 2021).

IR conference for individual investors

Once

Live-streamed conference (628 participants) (in March 2022).

Production of materials for individual investors

Twice

Issued Business Report (in June and December 2021)*With some exceptions, meetings were held online.
g Initiatives to revitalize the General Meeting of Shareholders and facilitate the exercise of voting rights
Initiatives

Contents

Early notification of General Meeting of Shareholders

It is Company policy to physically distribute the convocation notice at least three weeks before the General Meeting of
Shareholders takes place. The notice for the 14th Annual General Meeting of Shareholders scheduled for June 24, 2022,
was sent out on June 1, 2022.

Disclosure of convocation notice prior to physicaldistribution

The convocation notice is posted on our corporate website before it is physically distributed. Based on Company policy
to post the convocation notice about one month prior to the date of the General Meeting of Shareholders, weuploaded the convocation notice for the latest General Meeting of Shareholders on May 19, 2022.

Setting dates for the General Meeting of Shareholders that avoid the peak day

To enable as many shareholders as possible to attend our General Meeting of Shareholders, we avoid dates when mostother companies hold their meetings. The most recent General Meeting of Shareholders was held on June 24, 2022

Voting by electronic means

We have adopted an electronic voting system that allows shareholders to exercise their voting rights via the Internet(PC, smartphone or mobile phone).

Participation in electronic voting platforms andother initiatives to improve the environment for
institutional investors to exercise voting rights

We participate in the voting platform for institutional investors operated by Investor Communications Japan (ICJ,
Co., Ltd.).

Access to Notice of Convocation (summary) in
EnglishA summary of the Notice of Convocation for the General Meeting of Shareholders, in English, was posted to our
corporate website on May 19, 2022, the same day that the full Japanese original was posted in advance of physicaldistribution of the document.

Other

To prevent the spread of COVID-19 and to facilitate attendance by all shareholders at the General Meeting of
Shareholders, without disadvantage to regional shareholders, and provide greater opportunity to observe theproceedings, we live-streamed the event.

Purpose of IR Activities

As part of its pursuit of fair and transparent management, the Company
engages in investor relations activities in order to fulfill its accountability
obligations to not only the shareholders who entrust management to it, butalso to investors, securities analysts and capital market participants in general.
By engaging in proper disclosure and constructive dialogue through its
investor relations activities, the Company also aims to promote understandingof the Group, develop long-term trusting relationships, and earn fairassessments of its corporate value.
Satisfaction of our business partners with TIS’s business and relationship(4 or higher on a 5-point scale)
81%

74%

Fiscal
2020

Fiscal2021

Fiscal2022

Basic Policy on IR Activities

Recognizing that investor relations activities are an important element of its
management activities, the Company is committed to fulfilling its accountability obligations to shareholders, investors, securities analysts, and other capital
market participants and to building trusting relationships based on fullcommunication achieved through ongoing conscientious and positive
engagement in investor relations activities.
To promote understanding of the Group, the Company will endeavor todisclose and explain its management policies, details of its business
operations, business strategies, earnings performance, finances and othercorporate information in a timely, fair, accurate and clear manner byparticipating in interviews and responding to inquiries pertaining to investor
relations, holding earnings briefings and small meetings, and engaging inother such activities. Opinions and other feedback on the Group obtained
through constructive dialogue will be shared within the Company throughreports to the Board of Directors and similar channels, and will be used for
purposes such as reviewing the Company’s management strategies.

Basic Policy on Disclosure

1. Disclosure standards
To ensure transparency by promoting information disclosure, the Company
discloses material information that could influence investment decisions,
including information disclosed in conformance with the Securities Listing
Regulations of the Tokyo Stock Exchange and the Financial Instruments andExchange Law (meaning information on decisions made by the Company,
occurrences of material facts, and business results and similar information;
the same applies hereinafter). In addition to the above, the Company also
discloses, to the maximum extent possible, information judged useful forfurthering understanding of the Company and the Group.
2. Information disclosure system
The Company has developed a communications structure linking divisions
and member companies of the Group, and it has established a structure fordisclosing material information that could influence investment decisions,
including information disclosed in conformance with the Securities Listing
Regulations of the Tokyo Stock Exchange and the Financial Instruments andExchange Law, in a fair and timely manner. The Company is committed torigorous information management and preventing insider trading.
* Please see the Company’s web site regarding “3. Methods of Disclosure”,“4. Spokespersons for Investor Relations Activities”, “5. Yet-to-Be-Released
Material Information”, “6. Quiet Period”, “7. Response to Rumors, etc.”,“8. Earnings Forecasts, etc. by Third Parties”, “9. Framework for Disclosing
Information on Company Website” of Basic Policy on Disclosure.
https://www.tis.com/ir/other/policy/

88

Corporate Information/Data

79%*Fiscal 2021 and fiscal 2022 results indicate that clients are satisfied doing businesswith us.
*The survey covered TIS Inc.

87

Quarterly briefings (in May, August and November 2021 and February 2022).

Once

g IR Policy*This event was held online in July 2022 and attracted many business partners.

Implementation of Business Partner Satisfaction Survey
We conduct a Business Partner Satisfaction Survey every year tolearn from our business partners about changes in the environment, trends in guidelines and unit prices, and their level ofsatisfaction with us.
This time, we added “good points/bad points” of the ­Company
as perceived by surveyed business partners and received valuable
feedback that will undoubtedly lead to improvements.
We will continue to analyze the survey to surface issues andmake improvements to expand collaboration with our business
partners and improve their satisfaction with our services.

4 times

Business briefings for analysts and institutional investors

Platform for Value Creation

We held the online TIS Business Partner Forum/Business Policy
Briefing 2022 for our business partners to help them better
understand our management policy and various other initiatives
and measures. This year, under the main theme of “promoting
collaboration with business partners”, each organization presented its new initiatives and measures and ambitions for collaboration and c­ o-creation. Going forward, we will continue to striveto ­expand our business and improve satisfaction throughcollaboration.

Results briefings for analysts and institutional investors

Growth Strategy for Value Creation*The survey covered TIS Inc.

Contents

TIS INTEC Group Value Creation

Implementation of Client Satisfaction Survey
We conduct an annual Client Satisfaction Survey of clients withwhom we have continuous business relationships, which is used asa tool to determine our improvement activities. As the percentageof respondents who answered we are “an irreplaceable business
partner” continues to increase, backed by the high evaluation of
our earnest and sincerity in response and quality, more proactive
proposals and information provision are expected of us. To live up
to such expectations, it’s important to strengthen our sales andconsulting capabilities, which serve as touchpoints with clients andsociety. We are therefore pursuing initiatives in this area. As part of
the groupwide promotion of improvement activities, similar initiatives that have been conducted by each ­major Group company
have been gradually integrated into this survey.

Frequency

Top Message*This event was held online in July 2022 and attracted many clients.

IR Events in Fiscal 2022

Introduction

g With Clients

E

SocialS G With Local Communities and Society
Introduction

Social contribution activities
E Group
S Gwill accelerate value exchange with local communities by promoting social contribution activities thatThe
support the realization of a society in which everyone can enjoy the benefits of digital technology. We expect thecontinuation of these activities to lead to an increase in demand for our services by strengthening our humancapital through the expansion of our fan base and increasing opportunities to use our services.
Social Contribution Activities
Support for a society where everyone can enjoy the benefits of digital technology

Value exchange through business activities

Growth in
demandg Social Contribution Activities at TIS Inc.

P.91

Financial Review

P.93

Consolidated Financial Summary

P.97

Non-Financial Summary

P.99

Corporate Data

Growth Strategy for Value Creation

Support for a society where everyone can enjoy the benefits of digital technology based on the following three themes(1) Activities to support future users
We will conduct activities to enhance the ability of children—the next generation—to use digital technology.
(2) Activities to spread the benefits of digital technology to society
We aim to reduce the number of people who do not have access to digital technology due to economic and location factors throughactivities such as support for infrastructure projects.
(3) Activities to mitigate the negative impacts of digital technology on society
We will work to prevent the misuse of digital technology and help people having difficulty adapting to change.

Corporate Information/Data

TIS INTEC Group Value Creation

Services for solving social issues
Low-carbon products and services

Increased usage opportunities

Clients

Workforce

Earnings

TIS INTEC Group

Employees andpartners

Increase in future employees
and excellent partners

Strengthening
human capital

Fringe benefits
Social credibility
Funding

Improvement of
the usage operating
environment
Enhancing
digital literacy

Top Message

Expansion of
the fan baseP.101 Evaluations from External Parties
P.102 In Issuing the 2022 Integrated Report

Project to Develop an Information Infrastructure around Three Inhabited Islands(Setouchi Town, Kagoshima Prefecture)

Platform for Value Creation

As part of our activities to spread the benefits of digital technology to society, we supported the installation of submarine opticalfiber cables and provision of services on three inhabited islands (Kakeroma, Hoejima, and Yoroshima) in Setouchi Town, Kagoshima
Prefecture, via the corporate version of hometown tax donations. These locals face information disparity due to the lack of an
optical broadband connection to the islands.
We expect that the installation of submarine optical fiber cables will improve the communication conditions for mobile phone
carriers and develop an information infrastructure to realize the introduction of ICT in the educational field.
Through such activities, we hope to reduce the number of people who cannot benefit from digital technology due to theirlocation and contribute to the realization of a society in which all members of society can enjoy the benefits of digital technology.
We also hope that this will be an opportunity to promote the development of telework/shared office space, attract morecompanies to Setouchi Town, and increase opportunities for moving to and settling in the town, thereby revitalizing the local
community.

Corporate Information/Data* For more information on other activities, please refer to the TIS INTEC Group website.
Social contribution activities: https://www.tis.com/group/sustainability/social/community/
89

90Financial Review

Liabilities
Total liabilities rose ¥2,006 million, to ¥173,649 million. This was mainly due to a ¥13,034 million increase in income taxes payable
stemming from a gain on transfer of shares for tax purposes associated with the listing in the U.S. market of an overseas company inwhich we hold shares through a capital/business alliance. By contrast, we posted a ¥6,112 million decline in interest-bearing debt.

■Fiscal 2022 Results

Net Assets
Net assets increased ¥23,563 million year on year, to ¥302,993 million, mainly due to ¥39,462 million in net income attributable toowners of the parent company, which contrasted with ¥9,327 million in dividend payments. Treasury stock declined ¥15,694 million.
This was mainly due to ¥20,527 million in disposal of treasury stock, which contrasted with ¥4,833 million in acquisition of treasury
stock. Both treasury stock and capital surplus decreased ¥19,363 million year on year, due to the retirement of treasury stock inaccordance with the Company’s basic policy on shareholder return. (Please refer to Shareholders’ Return on page 52)

Performance Highlights(Millions of yen)

Fiscal 2021
448,383
45,748
10.2%

Fiscal 2022
482,547
54,73911.3%

27,692

39,462+11,769(+42.5%)6.2%
110.51
10.8%

8.2%
157.6914.0%+2.0 points+47.18+3.2 points—(+42.7%)—

YOY changes+34,163(+7.6%)+8,990 (+19.7%)+1.1 points—

Highlights of Cash Flows(Millions of yen)

● Extraordinary income: ¥11,293 million (YOY change +¥1,583 million)

		 Dividend income: ¥813 million, etc.

		 Gain on sales of shares of subsidiaries: ¥6,362 million
		 Gain on sales of investment securities: ¥4,910 million, etc.
● Extraordinary loss: ¥5,521 million (YOY change +¥1,371 million)
		 Loss on valuation of investment securities: ¥2,593 million, etc.

● Non-operating expenses: ¥1,601 million (YOY change -¥6,900 million)

		 Equity in losses of affiliates: ¥1,012 million, etc.

The first year of Medium-Term Management Plan (2021–2023) got off to a good start, with all performance figures exceeding thetargets of the revised plan announced when we disclosed our results for the first half of fiscal 2022.
Net Sales
During the year, we responded appropriately to IT investment needs, including demand among customers for digital transformation.
Companies that became subsidiaries in the previous year also performed well. As a result, net sales increased significantly year on year.

Net Income Attributable to Owners of the Parent Company
Net income attributable to owners of the parent company increased year on year. In addition to a rise in recurring profit, this wasdue to a significant jump in extraordinary income stemming from a ¥6,362 million gain on sales of shares in subsidiaries (transfer ofshares of Chuo System Corporation, a consolidated subsidiary) and a ¥4,910 million gain on sales of investment securities (reductionof cross-shareholdings, reported as extraordinary income).
Fiscal 2022: Operating Income Analysis, Increase/Decrease Reasons (YOY change) (Billions of yen)
Operating income (operating margin)
54.73
＋5.88
–6.14
(11.3%)
＋9.25
45.74
+8.99
(10.2%)（+19.7％）Gross profit margin

Actual

26.7%[YOY change +1.3 points]

Fiscal2021

Increased Improved Increased
sales
profitability SG&A
expenses(Cost of sales: +¥0.80 billion, SG&A expenses: +¥1.38 billion)

Costs related to✓ Software investment to create new services✓ Investment in human resources to fuel structuraltransformation✓ Investment in R&D to acquire advanced technologies
Fiscal2022

Cost of office reform to promote new workstyles:
Up ¥2.82 billion (YOY change)(Cost of sales : +¥0.94 billion, SG&A expenses : +¥1.87 billion)

Changes in SG&A Expenses

Effect of change in statusof consolidated subsidiary,
etc.
+1.73
Office reform+1.87
Brand-related costs–0.08
Lower operating costs,
enhanced head office
functions–0.33
Prior investment, others
+2.95
Total

+6.14

Highlights of Financial Position(Millions of yen)

Fiscal 2022
476,642
173,649
37,5177.9%
302,993
61.5%

YOY changes+25,569+2,006–6,112–1.8 points+23,563+1.5 points

AssetsTotal assets increased ¥25,569 million year on year, to ¥476,642 million. This resulted from a ¥30,875 million rise in cash anddeposits, as well as an ¥8,870 million increase in deferred tax assets, mainly due to a gain on transfer of shares for tax purposes
stemming from the listing in the U.S. market of an overseas company in which we hold shares through a capital/business alliance.
On the other hand, investment securities declined ¥9,181 million due to a reduction of cross-shareholdings.
91■Fiscal 2023 Forecast(Millions of yen)

Fiscal 2022
482,547
54,73911.3%

Net sales
Operating income
Operating margin
Net income attributable to owners of
the parent company
Net income ratio
Net income per share (Yen)ROE*

Fiscal 2023 (Estimates)
500,000
57,00011.4%

YOY changes+17,453(+3.6%)+2,261(+4.1%)+0.1 points—

39,46237,500–1,962(–5.0%)

8.2%
157.6914.0%

7.5%
154.2212.9%–0.7 points–3.47–1.1 points—(–2.2%)—* ROE for fiscal 2023 is a calculated value.

Fiscal 2023: Operating Income Analysis, Increase/Decrease Reasons [Forecast] (Billions of yen)
Operating income (operating margin)
57.00+4.74 +1.40 –3.89
54.73(11.4%)(11.3%)
Gross profit margin

Plan

27.0%

+2.26
（+4.1％）[Of which, effect of change
in status of consolidated
subsidiary, etc. was-¥0.69 billion][YOY change +0.3 points]

Fiscal 2022 Increased Improved Increased Fiscal 2023
Actualsales
profitability SG&A
Estimate
expenses

Anticipated prior investment costs for promoting
structural transformation:
Up ¥2.81 billion (YOY change)(Cost of sales: +¥1.90 billion, SG&A expenses +¥0.91 billion)
Software investments, investments in human resources,
and investments in R&D+
Cost related to investments in human resources (additions)Up ¥1.0 billion (YOY change)(Cost of sales: +¥0.71 billion, SG&A expenses +¥0.29 billion)

Anticipated cost of office reform to promote newworkstyles: Down ¥0.98 billion (YOY change)(Cost of sales: ±¥0.00 billion, SG&A expenses –¥0.98 billion)

Changes in SG&A Expenses

Effect of change in statusof consolidated subsidiary,
etc.
+0.08
Office reform–0.98
Prior investment (including
enhanced employee benefits) +1.20
Lower operating costs,
enhanced head office
functions–0.30
Others (including brandrelated costs)
+3.89
Total
+3.89

The targets of Medium-Term Management Plan (2021–2023) are shown above. Our aim is to further improve profitability byproviding high-value-added services and conducting productivity improvement measures. At the same time, we will continue making
investments in business expansion and future growth by accurately meeting customers’ demand for digital transformation. To further
instill structural transformation and sustainable growth, meanwhile, we are looking to increase investments in human resources, ourdriving force in the future. In fiscal 2023 (ending March 2023), we expect net income attributable to owners of the parent company
to decline compared with fiscal 2022, when we posted extraordinary income totaling ¥11,293 million.
92

Corporate Information/Data

Total assets
Total liabilities
Interest-bearing debt
(Interest-bearing debt ratio)
Net assets
Equity ratio

Fiscal 2021
451,072
171,642
43,6299.7%
279,42960.0%

Net cash provided by operating activities amounted to ¥56,126 million, up ¥22,781 million from the previous year. This was mainly
due to ¥61,481 million in income before income taxes and ¥15,083 million in depreciation (both non-cash profit/loss items), which
contrasted with ¥14,363 million in income taxes paid.
Net cash used in investing activities totaled ¥3,424 million, down ¥14,098 million. This was mainly due to ¥9,048 million in
acquisitions of property and equipment and ¥6,231 million in acquisitions of intangible assets. Contrasting factors included ¥7,126
million in proceeds from sale and redemption of investment securities (mainly due to reduction of cross-shareholdings) and ¥7,019
million in proceeds from sales of shares of subsidiaries resulting in change in scope of consolidation.
Net cash used in financing activities was ¥21,948 million, down ¥34,432 million. This was mainly due to ¥9,327 million in
dividends paid, ¥7,012 million in repayments of long-term debt and ¥4,833 million in purchase of treasury stock. Contrasting factors
included a ¥1,320 million net increase in short-term borrowings.
Free cash flows increased ¥36,879 million year on year, to ¥52,702 million, driven by strong operating cash inflows. We believe
this is due to the progress we have made in structural transformation through growth investments, which has improved our ability toincrease profits and generate stable cash.

Platform for Value Creation[Of which, effect of change
in status of consolidated
subsidiary, etc. was+¥0.31 billion]

Prior investment costs for promoting structuraltransformation:
Up ¥2.18 billion (YOY change)

YOY changes
22,781
14,098–34,432
36,87930,896Growth Strategy for Value Creation

Operating Income
The gross margin improved 1.3 points, to 26.7%, thanks to the Group’s provision of high-value-added services and measures toimprove productivity, as well as the increase in net sales. This compensated for an increase in selling, general, and administrative
expenses, mainly office conversion costs and other investments in future growth. As a result, the operating margin rose 1.1 points,
to 11.3%.

Fiscal 2022
56,126–3,424–21,948
52,702
113,820

TIS INTEC Group Value Creation● Non-operating income: ¥2,572 million (YOY change +¥560 million)

Fiscal 2021
33,345–17,522
12,484
15,82382,924

Net cash from operating activities
Net cash from financing activities
Net cash from investing activities
Free cash flows
Cash and cash equivalents at the end of the term

Top Message

Net sales
Operating income
Operating margin
Net income attributable to owners of
the parent company
Net income ratio
Net income per share (Yen)ROEIntroduction

Amid the COVID-19 pandemic and highly uncertain economic conditions, there is increasing demand to make IT­investments aimed at transforming business processes and business models. Taking advantage of this situation, we
will continue promoting structural transformation to achieve sustainable growth.

Consolidated Financial Summary 1
TIS Inc., and consolidated subsidiaries
Years ended March 31

Fiscal 2013

Fiscal 2014

Fiscal 2015

Fiscal 2016

Fiscal 2017

Fiscal 2018

Fiscal 2019

Fiscal 2020

Fiscal 2021

Fiscal 2022

Net sales

327,417337,834

346,647

361,025

382,689

393,398

405,648

420,769

443,717448,383

482,547

Cost of sales

266,159

276,935

283,881294,927

312,153

317,440

321,286

325,985

337,820334,671353,699

Gross profit

61,25860,89962,766

66,09770,53575,95884,362

94,784

105,896

113,712

128,848

Gross profit ratio (%)

18.7%

18.0%

18.1%

18.3%

18.4%

19.3%

20.8%

22.5%

23.9%

25.4%

26.7%

Performance Status

45,63642,72743,25544,97646,09948,93851,61856,74061,05767,963

74,108

13.9%

12.6%

12.5%

12.5%

12.0%

12.4%

12.7%

13.5%

13.8%

15.2%

15.4%

Operating income

15,621

18,171

19,51021,121

24,43627,01932,74338,043

44,83945,74854,739Operating margin (%)

4.8%

5.4%

5.6%

5.9%

6.4%

6.9%

8.1%

9.0%

10.1%

10.2%

11.3%

15,393

17,44018,971

21,251

24,521

27,092

32,79538,60346,07039,25755,710

4.7%

5.2%

5.5%

5.9%

6.4%

6.9%

8.1%

9.2%

10.4%

8.8%

11.5%

Net income attributable to owners of the parent company

2,135

5,868

7,913

10,275

12,67816,306

20,62026,034

29,411

27,692

39,462

Net income ratio (%)

0.7%

1.7%

2.3%

2.8%

3.3%

4.1%

5.1%

6.2%

6.6%

6.2%

8.2%

TIS INTEC Group Value Creation

Recurring profit
Recurring profit ratio (%)

Top Message

Selling, general and administrative expenses
Selling, general and administrative expenses ratio (%)

Financial Position
Current assets

142,442

138,219

143,519

140,450

166,666

152,162

162,064

176,231

181,543

229,965259,261

Fixed assets

167,560

164,083

170,091

205,401

169,828

185,459

204,889

194,426

201,356

221,106

217,381

Software assets

12,197

11,76912,92813,252

15,42816,056

16,866

19,17722,887

27,797

26,486

Total assets

310,003302,302313,610

345,851

336,495

337,622366,954

370,657

382,899

451,072

476,642

Current liabilities

83,06591,06372,79077,666

91,50878,67681,31091,12688,479100,915

139,236

75,97253,07976,316

79,39564,44759,74359,344

45,121

46,46270,726

34,412

159,038

144,143

149,107

157,062

155,955

138,420

140,655

136,248

134,942

171,642

173,649

Net assets

150,965

158,159

164,502

188,789

180,539

199,202226,298

234,408

247,957

279,429

302,993

Total liabilities and net assets

310,003302,302313,610

345,851

336,495

337,622366,954

370,657

382,899

451,072

476,642

Total interest-bearing debt

76,51560,55058,86952,114

46,15835,14432,876

26,89322,294

43,62937,517

Cash flow from operating activities

23,65821,51525,77022,93825,496

18,95236,38637,55838,56933,34556,126

Cash flow from investing activities(15,158)(14,391)(5,334)(17,744)

8,688(23,488)(14,202)(1,213)(26,437)(17,522)(3,424)

Cash flow from financing activities(4,230)(19,883)(5,872)(19,067)(14,979)(18,327)(10,543)(16,773)(14,544)

12,484(21,948)

Cash and cash equivalents at the end of the term

41,11928,43343,142

29,48548,65125,730)37,54557,08354,68482,924

113,820

Free cash flow

8,500

7,124

20,436

5,194

34,184(4,536)22,18436,345

12,132

15,82352,702

Capital expenditures

14,096

12,287

12,544

16,873

14,21015,15916,907

13,334

16,70225,085

13,783

Depreciation

12,745

12,92012,454

12,80911,952

11,801

12,572

12,783

12,02013,31815,083Growth Strategy for Value Creation

Non-current liabilities
Total liabilities

Cash Flow Status

Platform for Value Creation

Others

962

1,002

853

1,097

1,086

1,178

996

1,003

1,702

1,789

2,784

Amortization of goodwill

1,882

1,741

1,166

1,052

339

326

289

289

171

312

497

Goodwill balance at the end of the term

3,672

1,914

830

2,021

1,393

1,332

1,118

503

355

2,550

1,556

Research and development expenses

Corporate Information/Data

Notes: 1. Software assets indicates the total sum of software and software in progress.
2. Total interest-bearing debt indicates the total sum of borrowed money and corporate bonds.
3. Free cash flows indicate the total sum of cash flows from operating activities and cash flows from investing activities.
4.	From the first quarter of fiscal 2019, TIS applies “Partial Amendments to Accounting Standard for Tax Effect Accounting” (Accounting Standards Board ofJapan, Statement No. 28, February 16, 2018). Figures for fiscal 2018 have been retrospectively restated in line with the aforementioned partial amendments.
5.		From the first quarter of fiscal 2022, TIS applies "Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, issued March 31, 2020).

93

Introduction(Millions of yen)

Fiscal 201294

Consolidated Financial Summary 2
TIS Inc., and consolidated subsidiaries
Years ended March 31

Fiscal 2013

Fiscal 2014

Fiscal 2015

Fiscal 2016

Fiscal 2017

Fiscal 2018

Fiscal 2019

Fiscal 2020

Fiscal 2021

Fiscal 2022

427,210439,748452,284

493,755

122,067

132,935

133,121147,214

161,453

Order Status (Total)
Orders received during the term
Order backlog at year-end

Introduction(Millions of yen)

Fiscal 2012

Order Status (Software development)
174,680

179,352

172,721

199,842

207,345

208,307219,225

238,298

246,330

237,323

271,350

Order backlog at year-end

57,77862,05558,86971,09569,96164,751

67,71675,54979,277

83,797

94,016Equity ratio (%)

46.3%

49.8%

49.9%

53.3%

52.5%

57.8%

60.4%

62.0%

63.3%

60.0%

61.5%

Net income to equity capital ratio (ROE) (%)

1.5%

3.9%

5.1%

6.0%

7.0%

8.8%

9.9%

11.5%

12.5%

10.8%

14.0%

Total asset turnover ratio

1.07

1.10

1.13

1.09

1.12

1.17

1.15

1.14

1.16

1.08

1.04

Financial leverage

2.13

2.08

2.01

1.93

1.89

1.81

1.69

1.63

1.58

1.63

1.65

Top Message

Orders received during the term

Financial Indicators

5.0%

5.7%

6.2%

6.4%

7.2%

8.0%

9.3%

10.5%

12.2%

9.4%

12.0%

24.7%

20.0%

18.8%

15.1%

13.7%

10.4%

9.0%

7.3%

5.8%

9.7%

7.9%

Payout ratio (%)

74.0%

31.4%

27.7%

25.6%

22.7%

19.0%

16.6%

22.8%

25.7%

31.9%

27.9%

Total return ratio (%)

74.0%

31.4%

27.7%

30.4%

35.3%

31.9%

30.5%

39.0%

39.8%

42.8%

39.3%

TIS INTEC Group Value Creation

Recurring profit to total assets ratio (ROA) (%)
Interest-bearing debt ratio (%)

Per share data
Net income per share—basic (yen)*

24.33

66.86

90.16

117.40145.22189.02241.44307.83350.35110.51

157.69Net income per share—diluted (yen)*

24.33

66.83

90.12

—

—

—

—

—

—

—

—

Annual dividends per share (yen)*

18.00

21.00

25.00

30.00

33.00

36.00

40.00

70.00

90.00

35.00

44.00

1,636.72

1,714.88

1,782.23

2,108.19

2,031.07

2,265.76

2,602.07

2,719.79

2,890.27

1,078.60

1,173.60

Net assets per share (yen)*

Growth Strategy for Value Creation

Stock information
968

1,243

1,694

2,193

2,664

2,832

4,210

5,240

5,361

2,641

2,877

978

1,328

1,854

2,257

3,085

2,959

4,410

6,040

7,320

2,670

3,630

Lowest stock price during the term

654

798

1,020

1,524

2,156

2,180

2,742

4,060

4,045

1,723

2,466

Price earning ratio (PER) (times)

39.8

18.6

18.8

18.7

18.3

15.0

17.4

17.0

15.3

23.9

18.2

Price book-value ratio (PBR) (times)

0.59

0.72

0.95

1.04

1.31

1.25

1.62

1.93

1.85

2.45

2.45

Aggregate market value (millions of yen)

84,979109,121

148,714

192,521233,870

248,618

369,592

460,014

470,637

695,553

722,589

Number of outstanding shares at fiscal year-end (thousands)

87,78987,78987,78987,78987,78987,78987,78987,78987,789263,367

251,160

Number of treasury stock at fiscal year-end (thousands)

16

19

4

320

864

1,701

2,613

3,358

3,952

12,595

1,394

Average number of shares during the term (thousands)

87,77387,77187,77487,52287,30586,26885,406

84,574

83,948250,574

250,246

327,417337,834

346,647

361,025

382,689

393,398

405,648

420,769

443,717448,383

482,547

Credit card

45,084

48,84649,40253,74359,27465,00673,31473,64875,11879,26590,314

Banking

26,702

26,23029,04925,444

27,86728,23327,452

26,58330,10030,64836,394

Insurance

22,931

23,83625,26924,972

26,33925,356

26,262

27,27929,27430,14031,520

Platform for Value Creation

Stock price at fiscal year-end (yen)Highest stock price during the term

Sales by Client Sector
Net sales

23,416

21,33723,481

23,312

20,406

20,857

22,127

19,502

24,28917,86316,00040,36338,82440,90445,78549,45542,723

43,77746,02845,73945,10344,345

Processing-based manufacturing

31,074

38,46833,84334,96035,061

36,95338,36638,081

38,99842,42453,368Distribution

26,26727,39830,00931,77532,702

31,77328,87232,90833,976

31,67932,904Services

71,01273,42572,666

77,53579,60189,607

93,258103,531

112,722

118,517

132,094

Public institutions

30,10728,22530,39329,89136,60337,00235,92334,86336,286

33,64932,075

Others

10,456

11,241

11,626

13,604

15,376

15,882

16,292

18,343

17,20919,09013,527

Corporate Information/Data

Other finance
Assembly-based manufacturing＊The Company executed a stock split, with each share of common stock split into three shares, effective April 1, 2020.

9596

Non-Financial Summary
TIS Inc., and consolidated subsidiaries
Compilation period: April 1 to March 31 of each year or the base date

2018~
2021

Fiscal2022

Fiscal2018

Fiscal
2019

Fiscal
2020

Fiscal2021*Averages are calculated as simple combined averages orweighted averages.

D

Number of employeesD

15,63815,948

16,10917,497

17,265
19,498B
B

Number of female employees

D

B

4,203

4,419

4,549

5,155

5,481

Percentage of female employees

D

B

26.9%

27.7%

28.2%

29.5%

28.1%

11,52911,56012,342

D

☑	
 
☑	
 
☑	
 
☑	
 

24.0%

B
D

156

155

155

1,161

1,379

Average age

E

E

38.7

38.9

39.1

39.2

40.0

Average age of male employees

E

E

39.9

40.0

40.3

40.5

41.3

Fiscal
2020

Fiscal2021

Independent
Practitioner’s
Assurance

Fiscal2022

Scope 1 emissions (t-CO2) (Note 6)

C

C

958

885

745

760

513

Scope 2 emissions (t-CO2) (Note 6)CC

78,12571,09664,48865,86764,157

E

E

35.6

35.9

36.0

36.1

37.0

E

E

14.4

12.9

12.8

13.3

14.2

Average length of service of male employees (years)

E

E

15.5

13.7

14.0

14.2

15.0

Average length of service of female employees (years)

E

E

11.5

10.8

11.0

11.2

12.2

Percentage of employees with a disability (Note 2)

F

F

2.14%

2.28%

2.35%

2.40%

2.30%

Number of employees in management positions

E

E

3,328

3,443

3,609

3,782

3,836

Number of male employees in management positions

E

E

3,056

3,147

3,278

3,410

3,440

☑	
 
☑	
 

Number of female employees in management
positions

E

E

272

296

331

372

396

☑	
 

Percentage of female employees in management
positions

E

E

8.2%

8.6%

9.2%

9.8%

10.3%

☑	
 

Percentage of career hires in management positions

G
E

168.4

166.4

162.6

162.9

E

365,595

372,051

361,415EE304,297

287,633

300,905

Category 2 (capital goods)

EE

40,98665,782

42,690Category 3 (fuel-and energy-related activities)

E

E

9,900

9,794

9,987

Category 4 (upstream transport and delivery)

E

E

698

215

405

Category 5 (waste generated in operations)

E

E

1,118

345

651

Category 6 (business travel)

E

E

1,987

2,025

2,000

Category 7 (employee commuting)E

E

Energy consumption (Electricity MWh)CC

157,623

6,607

6,256

4,778

149,523

143,383

141,620

139,560
25

Energy consumption (Heavy oil kL)

C

C

28

32

25

21

Energy consumption (Light oil kL)

C

C

11

10

0

0

0

Energy consumption (City gas, km3)

C

C

379

343

302

313

199

Energy consumption (LPG km3)

C

C

Energy consumption (kerosene KL)

C

C

1

0

Energy consumption (steam GJ)

C

C

1,301

19,116

Industrial waste (ton)

E

E

1,035

290

472

Social contribution expenses (millions of yen)

G

B

115

143

99

80

75

Political contributions (10 thousands of yen)

G

B

—

—

—

—

27

0

Other non-financial data

29.2%

Number of serious information security incidents

B

0

164.0

B

18,542Average monthly overtime hours

E

17.5

Number of employees receiving regular training on
information security

Average monthly overtime hours exceeding 45 hours(persons)

E

931

Number of violations of the Act on the Protection of
Personal Information

G

0

Number of requests for disclosure of information
related to personal information

B

1

Percentage of annual paid leave taken

E

E

67.6%

73.0%

75.7%

66.3%

64.4%

Number of employees on childcare leave

E

E

463

447

467

537

589

Number of male employees on childcare leave

E

E

27

38

53

80

106

Number of employees working shorter hours tocare for young children

E

E

670

681

679

638

677

Development loss rate

A

A

0.9%

0.9%

0.6%

0.8%

0.7%

Results of customer satisfaction surveys

G

G

69.1%

68.2%

72.7%

69.0%

71.7%

G

G

10

9

9

9

9

G

G

0

1

1

1

1

G

G

0.0%

11.1%

11.1%

11.1%

11.1%

G

G

3

3

3

3

3

G

30.0%

33.3%

33.3%

33.3%

33.3%

E

E

12

9

10

9

13

Percentage of female directors (Note 8)

Number of employees on nursing care leave

E

E

13

13

19

9

19

Number of external directors (Note 8)
Percentage of external directors (Note 8)

G

E

E

3

3

6

6

2

Turnover rate

E

E

4.6%

4.8%

5.0%

3.3%

3.7%

Spending on learning and research (millions of yen)

E

E

1,702

1,805

1,915

1,534

1,863

Number of days spent on learning and research perperson

E

E

8.1

10.8

11.2

13.3

Average annual income (10,000 yen)

G

681.3

701.9

717.4

741.0

Absenteeism (Note 3)

G

Average male annual income

G

Average female annual income

G
G

668.8

G

777.4
625.6
38%

45%

48%

56%

61%

Results of employee awareness surveys (Note 4)

E

E

38%

46%

51%

Number of new graduate recruits (Note 5)

E

E

700

663

720

679

679

Number of career hires

E

E

266

339

386

271

233

Percentage of female recruits (new graduates andcareer)E

34.0%<Independent Assurance Report>
Non-financial data marked with a checkmark ☑	 for the year ended March 2022 in the Integrated Report 2022, has received independent practitioner's assurance from
Ernst & Young ShinNihon LLC. to improve data reliability.

https://www.tis.com/documents/en/ir/finance/annual_report/assurance_ar2022.pdf
97

Scope of data collection
A. TIS INTEC Group consolidated
B. TIS and consolidated subsidiaries in Japan
C.	TIS, INTEC, AGREX, QUALICA, AJS, SorunPure, Chuo System (until fiscal 2021), TIS System Service, TIS Solution Link, TIS Tohoku, TIS Total Service, TIS Nagano, TIS
West Japan, TIS Hokkaido, and NEOAXIS (until fiscal 2021)
D. TIS, INTEC, AGREX, QUALICA, AJS, TIS System Service, TIS Solution Link, and MFEC (from fiscal 2021)
E. TIS, INTEC, AGREX, QUALICA, AJS, TIS System Service, and TIS Solution Link
F. TIS, SorunPure, TIS System Service, TIS Solution Link, and TIS Total Service
G. TIS parent
Notes: 1.	Figures for fiscal 2018, fiscal 2019, fiscal 2020, fiscal 2021 and fiscal 2022 are based respectively on April 1, 2018; April 1, 2019; April 1, 2020; April 1, 2021;
and March 31, 2022.
2.	Figures for fiscal 2018, fiscal 2019, fiscal 2020, fiscal 2021 and fiscal 2022 are based respectively on June 1, 2018; June 1, 2019; June 1, 2020; June 1, 2021,
and June 1, 2022.
3.	Percentage of employees absent from work for more than 30 consecutive days due to injury or illness (at fiscal year-end).
4.	Percentage of employees who responded positively to the question, “Overall, the company is a good place to work”.
5.	Number of employees hired during the fiscal year and hired on April 1 of the following fiscal year.
6.	Scope 1, Scope 2 emissions are calculated using the following formulas.
		 Scope 1 emissions: F uel consumption x heating value per unit x CO2 emission factor. CO2 emission factor based on Law Concerning the Promotion of the
Measures to Cope with Global Warming.
		 Scope 2 emissions: Consumption of electricity/steam x CO2 emission factor. CO2 emission factor based on Act on the Rational Use of Energy.
7.	Scope 3 emissions are calculated in accordance with “Basic guideline (version 2.4) concerning calculation of greenhouse gas emissions through the supply chain(Ministry of the Environment)”.
8.	Fiscal 2018, fiscal 2019, fiscal 2020, fiscal 2021, and fiscal 2022 are based respectively on June 30, 2017; June 30, 2018; June 30, 2019; June 30, 2020; andJune 30, 2021.

98

Corporate Information/Data

Results of employee awareness surveys (Note 4)

1.0%

E

Platform for Value Creation

Number of directors (Note 8)
Number of female directors (Note 8)

Number of male employees working shorter hours tocare for young children
Number of employees working shorter hours tocare for elderly family

☑	
 
☑	
 
☑	
 

Growth Strategy for Value Creation

E

E

Category 1 (purchased goods and services)

Scope 3 emissions (t-CO2) (Note 7)

☑	
 
☑	
 

TIS INTEC Group Value Creation

Average age of female employees
Average length of service (years)

Average total working hours per monthFiscal
2019

Fiscal2022

Top Message

D

Percentage of career hires

11,43514,017

Number of male employees

Number of non-Japanese employees

Fiscal
2018

2018~
2021
Environmental data

Employee-related data (Note 1)
Number of employees

Scope of data collection

Independent
Practitioner’s
Assurance

Fiscal2022

Introduction

Scope of data collectionCorporate Data

■ Corporate Profile
Company name
FoundedEstablished
Main business

21,709 (full-time employees)(As of March 31, 2022)

TIS Inc., and 53 consolidated subsidiaries (domestic 25, overseas 28) (As of March 31, 2022)
Main consolidated subsidiaries—

TIS100%

AGREX INC.

TIS100%QUALICA Inc.

TIS80%Komatsu20%

AJS Inc.

TIS51%
Asahi Kasei49%

Focuses on credit card companies but pursues business opportunities in awide range of sectors, including services and manufacturing. Promote toexpand payment business. Merged with pure holding company IT Holdings
Corporation in July 2016 and became operating holding company.
(Incorporated April 1971)
Focuses on megabanks and life insurers, and assists with CRM for regionalbanks and offers a wide selection of services to regional public corporations,particularly in the Hokuriku region.
(Established January 1964)
Leading company in BPO sector, with emphasis on insurance industry needs.
Turned into a wholly owned subsidiary in March 2015, becoming corecompany for BPO business within the Group.  (Established September 1965)
Formerly, information systems subsidiary of Komatsu. Focuses on assemblybased manufacturers, mainly those under the Komatsu Group umbrella,
while expanding business with companies in the distribution and restaurant
sectors.
(Established November 1982)
Formerly, information systems subsidiary of Asahi Kasei. Focuses oncompanies under the Asahi Kasei Group umbrella.
(Established March 1987)

Domestic subsidiaries
IUK Inc.
INTEC Solution Power Inc.
ULTRA Inc.
KOUSHI INTEC Inc.
SKY INTEC INC.
SorunPure Inc.

TIS System Service Inc.
TIS Solution Link Inc.
TIS Tohoku Inc.
TIS Total Service Inc.*2
TIS Nagano Inc.
TIS West Japan Inc.

25,298(11.3%)

106,593

10,579(9.9%)● Indonesia

Shanghai CardInfoLink Data Service
Co., Ltd. (CardInfoLink)(Voting rights ownership ratio 18.1%,
11 subsidiaries under the company)

PT Anabatic Technologies Tbk(Voting rights ownership ratio 37.3%,
acquired convertible bonds with stockacquisition rights,
53 subsidiaries under the company)■ Share Composition by Shareholder■ Major Shareholders(As of March 31, 2022; Thousands of Shares)(As of March 31, 2022)

38,2154,193(11.0%)

19,973

2,074(10.4%)

17,4362,422(13.9%)*1
17,858*1
1,135(6.4%)

Overseas
Institutions
118,062(47.0%)TIS Hokkaido Inc.
Registration Network, Ltd.
Nexway Co., Ltd.
HOKKOKU INTEC SERVICE Inc.
MicroMates Corp.
Miotsukushi Analytics Inc.

Number of Shareholding
shares(Thousands) ratio (%)

Name

Financial
Institutions
76,433(30.4%)

Total 251,160(100%)

Financial Instruments
Business Operator
4,807(1.9%)

Other Domestic
Institutions
24,875(9.9%)■ Rating
Japan Credit Rating Agency, Ltd.

Long-term

The Master Trust Bank of Japan, Ltd. (Trust Account)

29,973

11.93

ICHIGO TRUST PTE. LTD.

23,171

9.23

Custody Bank of Japan, Ltd. (Trust Account)

11,712

4.66

Employees’ Shareholding Association of TIS INTEC Group

6,656

2.65

Nippon Life Insurance Company

6,219

2.48

MACQUARIE BANK LIMITED DBU AC

6,011

2.39

NORTHERN TRUST CO.(AVFC) RE FIDELITY FUNDS

5,410

2.15

SSBTC CLIENT OMNIBUS ACCOUNT

5,194

2.07

The Master Trust Bank of Japan, Ltd. (Retirement Benefit
Trust Account, Mitsubishi Electric Corporation Account)

4,796

1.91

BNYM AS AGT/CLTS NON TREATY JASDEC

4,007

1.60

Notes: 1.	Shareholding ratio are calculated after deducting treasury stock (1,274
shares). The treasury stock do not include 1,179 thousand shares ofCompany stock held by TIS INTEC Group Employees’ Shareholding
Association Exclusive Trust, and 213 thousand shares of Company stock
held by Board Incentive Plan (BIP) Trust.
2.	Regarding 4,796 thousand shares held by The Master Trust Bank ofJapan, Ltd. (Retirement Benefit Trust Account, Mitsubishi Electric
Corporation Account), Mitsubishi Electric Corporation reserves exercise
of voting rights by Instruction.

(At November 17, 2021)*1 MFEC Group, consolidated basis (fiscal year ended December 31, 2021). Numerical values based on accounting standards in home country ofThailand using rate prevailing at end of fiscal year.
*2 Changed company name to TIS Business Service Inc. on April 1, 2022.
99

Main equity method affiliates● China

A/positive■ Stock Price Range (Comparison with TOPIX)
TIS
1,400
1,300
1,200
1,100
1,000
900
800
700
600
500
400
300
200
100
0

TOPIX

Fiscal 2012

Fiscal 2013

Fiscal 2014

Fiscal 2015

Fiscal 2016

Fiscal 2017

Fiscal 2018

Fiscal 2019

Fiscal 2020

Fiscal 2021

Fiscal 2022

Notes: 1.	The TIS stock price and TOPIX (Tokyo Stock Exchange Price Index) are indexed at 100 based on the closing price of stock on April 30, 2011.
2.	The Company executed a stock split, with each share of common stock split into three shares, effective April 1, 2020. Figures before fiscal 2020 are presented
assuming this stock split was conducted.

100

Corporate Information/Data

TIS49% Thai-listed, leading provider of enterprise IT solutions, which has strength in
MFEC Public(based onbanking, communication, and governments.
Company Limited
control criteria) 11 subsidiaries under the company.
(Established March 1997)

222,986

Sequent Software Inc.
TIS Ventures, Inc.

Platform for Value Creation

INTEC Inc.

Description of Business● United States

Growth Strategy for Value Creation

TIS Inc.
(operatingholdingcompany)

Shareholding
ratio

Fiscal 2022, ended March 31, 2022
(Millions of yen,non-consolidated basis)
Operating income
Net sales(operating margin)

AGREX DNP Vietnam Co., Ltd.

76 Equity Method Affiliates (domestic Five, overseas 71) (As of March 31, 2022)

Individuals andOthers26,981(10.8%)■ TIS INTEC GroupTIS and maingroup
companies

QUALICA Asia Pacific Pte. Ltd.

● Vietnam

I AM Consulting Co., Ltd.
(Six subsidiaries under the company)
PromptNow Co., Ltd.
TISI (Thailand) Co., Ltd.
QUALICA (Thailand) Co., Ltd.

TIS INTEC Group Value Creation

Paid-in capital
Number of shares authorized
Number of shares issued
Number of shareholders
Stock listing
Number of employees(consolidated)● Singapore● Thailand

Top Message

Head office

TIS Inc.
April 28, 1971
April 1, 2008
Outsourcing services, software development, and solution services regarding investments in
information technology. Management and business execution of group companies that carryon information and communication business
Sumitomo Fudosan Shinjuku Grand Tower,
17-1, Nishi-Shinjuku 8-chome, Shinjuku-ku, Tokyo, 160-0023, Japan
Tel. +81-3-5337-7070
Fax +81-3-5337-7555¥10 billion
840,000,000 shares
251,160,894 shares
15,266
Tokyo Stock Exchange, Prime Market (as of April 4, 2022) (Securities code: 3626)

QUALICA (SHANGHAI) Inc.
TISI (Shanghai) Co., Ltd.

Introduction

Overseas Subsidiaries● China(As of March 31, 2022)

Evaluations from External Parties

In Issuing the 2022 Integrated Report

FTSE4Good Index Series/FTSE Blossom Japan Index/
FTSE Blossom Japan Sector Relative Index

S&P/JPX Carbon Efficient Index

MSCI Japan ESG Select Leaders

SOMPO Sustainability Index*The inclusion of TIS Inc. in any MSCI INDEX, and the use of MSCI logos, trademarks, service marks or index names
herein, do not constitute a sponsorship, endorsement or promotion of TIS Inc. by MSCI or any of its affiliates. The
MSCI Indexes are the exclusive property of MSCI. MSCI and the MSCI index names and logos are trademarks or service
marks of MSCI or its affiliates.

Certified Health & Productivity Management Outstanding Organizations

Eruboshi (L-Star)

Kurumin, Platinum Kurumin

The “Eruboshi (L-Star)” is bestowed by
the Minister for Health, Labour andWelfare to corporations that excel insupporting the advancement of
women. There are three levels ofcertification based on five evaluation
criteria set by the Ministry: recruitment,
continued employment, workstyles (including working
hours), proportion of women in managerial roles, anddiversity of career options. TIS, INTEC and AGREX
captured Grade 3 certification of the top-level grade.

The "Kurumin" mark is
bestowed on companies thathave formulated action plans forsupporting a balance between
work and childcare based on the
Act on Advancement of
Measures to Support Raising the
Next Generation of Children, andachieved the goals of those plans. TIS received"Platinum Kurumin" certification in 2019 as an
exceptional child-rearing support company.

Tomonin

Telework Pioneers

Nikkei Smart Work Management

The “Tomomin” mark is given
to companies by the Ministry of
Health, Labour and Welfare inrecognition of measures that
support improvement andpromotion of a workplaceenvironment that enables
employees to balance work andnursing care. To prevent a situation where an
employee has to quit to care for elderly family
members, TIS is creating a workplace environmentthat makes it easier for employees to balance workand nursing care obligations.

Seeking to promote the spreadof telecommuting, since fiscal
2015 the Ministry of Internal
Affairs and Communications
has announced its annual list of"Telework Pioneers". These arecompanies and organizations
that have introduced and arepromoting telecommuting. They are selected bya panel of external experts.

The Nihon Keizai
Shimbun Group
promotes the campaignthat aims to grow theJapanese economy bylinking workstyle reforms-gained through theintroduction of advanced technology, innovation,and structural transformation-to the improvement ofcorporate productivity. TIS won 4.5 stars in the fifth
Nikkei Smart Work Management Survey.

DC Excellent Company

Pride Index

The DC Excellent Company
award is presented by the
Defined Contribution Pension
Education Association tocompanies that havedistinguished themselves in their ongoing educationand management of defined contribution pension
plans. TIS was recognized as a “DC Excellent
Company (Continuing Investment Education
category)” in fiscal 2020, and “DC Excellent
Company (Institutional Management (Governance)
Category)” in fiscal 2022.

The PRIDE Index is an index toevaluate the efforts ofcompanies and otherorganizations related to LGBTQ
issues, developed by Work with
Pride, a voluntary organizationthat aims to realize workplaces
where LGBTQ people can work with pride. In orderto realize a safe working environment for everyone,
regardless of gender identity or sexual orientation,
TIS has worked for understanding and acceptance,
and was certified as “Bronze” in the Pride index.

TIS earned a grand prize in2020 in recognition of its“talented management thatemphasizes the self-realizationof each individual and theprovision of career support
that encourages women to play active roles.”101

Masakazu Kawamura,
TIS Executive Officer,
Division Manager ofCorporate Planning SBU■ IR-related activities

Fiscal 2021 Homepage Quality Ranking
Survey of All Listed Companies(Nikko Investor Relations Co., Ltd.)
Received highest award as excellent website incomprehensive ranking for seven consecutive
years since fiscal 2015.

2021 Internet IR Commendation Award(Daiwa Investor Relations Co., Ltd.)Awarded for nine consecutive years
since 2013.

White Company Recognition

JPX-Nikkei Index 400“Corporate Value Improvement Award”

DX Certification

The Japan Next Generation
Enterprise Promotion Organization, known more commonly as
the White Foundation, definescompanies that have a future andshould last for the next generation
as those that balance appropriate
profits and growth with the trustof customers and employee
satisfaction. Such companies are recognized as white
companies. TIS earned this title in 2020.

TIS has been
included in a newindex of 400
companies with high appeal for investors that meetcriteria required by global investment standards,
such as efficient use of capital and investor-focusedmanagement perspectives.

TIS is selected as candidates (50 companies) of the“Corporate Value Improvement Awards” by Tokyo
Stock Exchange, in 2017 and 2019.

The DX
Certification
System isdesigned to certify
companies that are ready to take action in accordancewith the “Digital Governance Code” established by
the Ministry of Economy, Trade and Industry (METI)
and to address social changes brought about bydigital technologies through dialogue withstakeholders.

Gomez IR Site Comprehensive Ranking 2021
(Morningstar Japan K.K.)
Awarded for seven consecutive years since 2015as an excellent company.

■ Other

102

Corporate Information/Data

Grand Prize in Good Career Company
Award 2020

The Program, run by the Ministryof Economy, Trade and Industry(METI) and Nippon Kenko Kaigi(NKK), recognizes companies
that engage in activities toaddress health issues andmaintain particularly good healthmanagement practices to promote well-being. TIS
and INTEC are ranked at top 500 companies as
Certified Health and Productivity Management
Outstanding Organizations (large enterprise category).

Platform for Value Creation

The Ministry of
Economy, Trade andIndustry runs the
program that recognizes
companies that utilize
the skills of diverse
human resources to create value. This approach hasenabled us to raise employee satisfaction andattract and train human resources who will fuelstructural transformation, and the results haveearned us stellar external recognition.

Growth Strategy for Value Creation

New Diversity Management Selection 100

A joint initiative of theJapan Ministry of
Economy, Trade andIndustry and the Tokyo
Stock Exchange that
selects publicly listedcompanies showing exceptional progress inadvancing women in the workplace. Our measures
to promote women’s advancement, and systems for
popularizing and embedding those measures within
the organization, were recognized with thisdesignation.

TIS INTEC Group Value Creation■ HR-related activities

Semi-Nadeshiko Brand

quality of our management is changing for the better, we
implemented drastic financial measures designed to
optimize our capital structure and improve capitalefficiency.
Although social conditions remain extremely
turbulent, we note that digital technology has become
indispensable for addressing social issues and realizing asustainable society. Accordingly, we recognize that theroles and responsibilities that the Group should fulfill arebecoming more and more important.
As a member of the management team, I willcontinue working diligently to improve the Group’s
sustainable corporate value so we can fully meet the
expectations of our stakeholders. I will target further
corporate growth through disciplined management,
prompt and pivotal decision-making, and appropriate risktaking. At the same time,
I will continue focusing on
building long-term
relationships of trust withcustomers throughaccountability, appropriate
information disclosure,and constructive dialogue.
I look forward to yourongoing support.

Top Message

MSCI Japan Empowering Women
Index (WIN)This is the seventh issue of the TIS INTEC Group
Integrated Report. The Group regards the Integrated
Report as an important tool for dialogue with all
stakeholders, including shareholders and other investors.
We also aim to provide comprehensive and easy-tounderstand information on medium- to long-term growthstrategies and initiatives to create corporate value. We
also provide information regarding our environmental,social and governance (ESG) activities, which serve as afoundation to support these strategies and initiatives. We
hope the Integrated Report will help you gain a better
understanding of the Group, and we would appreciate
your frank opinions and comments, which we will use tofurther enhance information disclosure and improve
management transparency.
In April 2021, under a new management structure,
the TIS INTEC Group embarked on Medium-Term
Management Plan (2021–2023) under the tagline “Be aDigital Mover 2023.” Under OUR PHILOSOPHY, we aim tofurther accelerate structural transformation towardsustainable enhancement of corporate value, based on afoundation of sustainable management centered on
addressing social issues through our business activities
and revitalizing management in response to social
demands. In the fiscal year ended March 31, 2022, thefirst year of the plan, we posted record-high results bybalancing profitability with aggressive upfront investments
for future growth. While there were some individual
challenges, we achieved steady overall progress andpositive outcomes. With a strengthened belief that the

Introduction■ Inclusion in SRI indexes