NASDAQ Japan Market
25 April 2002
Company Name:
Representative director:
Location of Headquarter:
Contact:

SHL Japan Ltd. (code #: 4327)
Yuzo Shimizu
5-38-16 Chuo Nakano-Ku Tokyo
Naohiro Nakamura, Director,
Office Management Team Leader
Tel: 03-5385-8781

Abstract of interim report
Operating results and financial conditions(a) Overview of results for the six months ended 31 March, 2002
In the first half of the year ending 30 September 2002, global slow demand in theInformation Technology sector, successive corporate bankruptcies and slowdown in thestock market, has caused the Japanese economy to remain in a severe condition. Also theexpected full recovery of the U.S. economy continued to remain to be seen.
Employment, which is the focus of our business, continues to be in a difficult period andunemployment is at a high level, exceeding 5 percent. Although the ratio of job openings
to applications by new graduates as at March 2002 (conducted by Recruit Works R&D)
improved slightly from the previous year from 1.09 times to 1.33 times, it continues toremain at a low level.
Such economic conditions has caused less employment of new graduates and resulted inJapanese companies spending less on hiring of staff. This has been the main factor
leading to profit decreases in the human resources assessment industry. However, wehave co-hosted a number of seminars, such as “Challenge to recruitment using theInternet” and “Case study” with agencies in order to expand sales of various assessment
services such as the assessment test, which is used for recruitment of applicants who will
graduate in March 2003. In addition, we have also conducted active marketing activities
toward leading companies that employ a large number of new graduates, in order todevelop business.
Sales for the period increased 20.1 percent over the corresponding period last year to JPY
570 million. Product sales increased 23.2 percent to JPY 217 million, consulting revenue
increased 20.6 percent to JPY 340 million and training revenue, such as seminars,
decreased 23.9 percent to JPY 12 million. Sales of the assessment test used forrecruitment contributed to products sales. Sales, such as the assessment test development
service by Internet Technology, which is used for recruitment, contributed to consulting
revenue.
Operating income for the period decreased 0.2 percent over the previous period to JPY
177 million. This was mainly due to an increase in selling, general and administration
expenses resulting from implementation of plans to reinforce the selling & marketing
function. One development was the establishment and move of service branches, which
resulted in a JPY 41 million increase in expenses (excluding personnel cost) which
included JPY 24 million for Otemachi office, JPY 8 million for Osaka office and JPY 8
million for others. Another development was the increase in employee numbers, which
resulted in a JPY 36 million increase in personnel costs including JPY 30 million in sales& marketing division and JPY 6 million elsewhere.
-1-Ordinary income for the period decreased JPY 36 million to JPY 141 million, a 20.2
percent decrease compared with the previous period. Most of this decrease wasattributable to stock listing expenses (JPY 33 million) in non-operating expenses.
Sales increased 20.1 percent over the previous period to JPY 570 million, operating
income decreased 0.2 percent to JPY 177 million, ordinary income decreased 20.2
percent to JPY 141 million, and net income decreased 20.4 percent to JPY 80 million.
Our stock has been listed on the Osaka Securities Exchange Nasdaq Japan market since
December 10, 2001.
(b) Cash Flows
Cash and cash equivalents increased JPY 49 million to JPY 557 million, a 9.7 percent
increase compared with the previous period.
Net cash used for operating activities increased JPY 174 million over the previous period
to JPY 221 million. Main cash inflows were income before income taxes of JPY 141million, adjustment for depreciation expense of JPY 16 million and increase in trade
payables of JPY 19 million. Main cash outflows were increase in trade receivables of JPY
264 million, cash paid for directors’ bonuses of JPY 24 million and cash paid for income
taxes of JPY 93 million.
Net cash used for investing activities increased JPY 89 million over the previous period
to JPY 105 million. Although there was proceeds from repayment of time deposits of JPY
39 million, this was offset by increases in time deposits of JPY 129 million and purchaseof intangible assets of JPY 14 million.
Net cash provided by financing activities increased JPY 411 million over the previous
period to 376 million due to proceeds from issuance of stock associated with stock listingof JPY 442 million and dividends paid of JPY 65 million.
(c) Prospects for the current period
For the second half of the year ending 30 September 2002, we expect that macroeconomic and employment conditions will continue to be severe and cost reduction
efforts by Japanese companies will increase, therefore the difficult environment for thehuman resources industry is expected to continue.
We intend to help to develop our clients’ organizations and develop new products andtools that lead to enhancement of management. Among other things, we are consideringdevelopment of assessment center business, which is a method to evaluate and enhance
the ability of each individual manager, using our products “Rashinban” and“Ketsusaibako version 2 and 3”, for which we have completed development in the firsthalf of this period. In addition, we intend to start organization development consultation
through our new product “Meyasubako 2”, which assesses if a company has a climate ofchallenge. These products will be our strategic products in the second half of the period
and we will perform marketing activities actively to develop the current period results.
For the fiscal year ending 30 September 2002, we expect that sales will increase 36.8
percent over the previous period to JPY 1,300 million, ordinary income will increase 20.1
percent to JPY 375 million and net income will increase 18.5 percent to JPY 214 million.
In addition, we expect that the total cash dividend for the year will be JPY 10,000 per
share with a year-end dividend of JPY 5,300 per share and interim dividend of JPY 4,700
per share. This will be a JPY 700 increase over the previous year.
-2-Note: The above projections are based on our assumptions and beliefs in accordancewith data currently available. Therefore, actual results may differ substantiallyfrom the projections depending on a number of factors.

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