Year Ending September 2004

Overview of 1st-Quarterly Financial Results and Performance (Excerpt)
January 30, 2004
Listed Company: SHL-JAPAN Ltd.
Listed Market: Hercules, Osaka Securities Exchange
Code Number: 4327
Location of Head Office (Prefecture): Metropolis of Tokyo
Web site (http://www.shl.co.jp)
Representative: Yuzo Shimizu, President
Contact: Naohiro Nakamura, Director & Administration Team Leader (TEL: (03)5385-8781)

1. Matters related to the Preparation of the Overview of the 1st-Quarterly Financial Results and Performance① Difference in the recognition of accountingNonemethod in recent fiscal years② Commitment of a certified public accountant orNone

an audit firm:

2. Overview of the 1st-Quarterly Financial Results and Performance (From October 1, 2003, to December 31, 2003)(1) Operating results (The amounts below one million yen are truncated.)
Net sales
Millionsof yen%Operating income

Ordinary income

Millions

Millionsof yen%of yen%Quarterly net
incomeMillionsof yen%

1st quarter of the year,
ended December 31,

196

(1.1)

△7(—)

△7(—)

△9(—)

194(15.8)

6(—)

6(—)

4(—)

1,291

(10.1)

469(21.8)

468(33.7)

266(31.7)

2003
1st quarter of the year,ended December 31,
2002(Reference) The year
ended September 30,
2003
Note: Percentages for net sales, operating income, ordinary income and net income show year-over-year change
relative to the corresponding year-earlier quarter.

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Net income per

Fully diluted netshareincome per share

Yen
1st quarter of the year, ended%
90

—

—

483

69

476

33

28,80365

28,47564

1st quarter of the year, endedDecember 31, 2002

September 30, 2003%

△1,175

December 31, 2003

(Reference) The year ended

Yen

Note: A fully diluted net income per share figure is not stated for the quarter under review because a net loss wasrecorded for the 1st quarter of the year, ended December 31, 2003.
【Qualitative information, etc. on the progress of operating results】
Net sales in the 1st quarter (October 31, 2003, through December 31, 2003) increased 1.1% year over year to ¥196
million. By service segment, sales from Products and Consultancy increased 0.4% and 2.6%, respectively, to ¥54
million and ¥141 million, whereas sales from Training services decreased 68.9% to ¥0 million. The rise inConsultancy sales was principally due to the successful customization of Web-based aptitude tests and relatively
favorable assessment agency services operating results by the Assessment Center.
In terms of profitability, the operating loss and the ordinary loss for the 1st quarter each totaled ¥7 million, declining¥14 million from the year-earlier quarter. These losses were mainly caused by an increase of ¥4 million in the cost ofsales and an ¥11 million rise in selling, general and administrative expenses despite an expansion of ¥2 million innet sales. A major contributor to the increase in selling, general and administrative expenses was an ¥8 million risein personnel expenses, which were used to reinforce the sales department.
An extraordinary loss of ¥2 million resulted from a loss on the retirement of Product Master.
As a result, a net loss of ¥9 million was recorded for the 1st quarter.

(2) Changes in financial position (The amounts below one million yen are truncated.)
Shareholders’

Total assets

equityMillions of yen

Shareholders’Equity ratio

Millions of yen

equity per share%Yen%

1st quarter of the year,ended December 31,

1,445

1,308

90.6

156,526

1

1,308

1,188

90.8

142,40189

2003
1st quarter of the year,ended December 31,
2002

2

(Reference) The year
ended September 30,

1,689

1,411

83.5

165,701

91

2003【Qualitative information, etc., on changes in financial position】
Compared with the financial position as of September 30, 2003, cash and bank deposits in assets at December 31,
2003, decreased due principally to the payment of income taxes, year-end dividends and bonuses. As a result,accrued expenses and income taxes payable in liabilities decreased accordingly.

3. Others
Number of shares outstanding and residual securities
No shares of the Company were issued through an exercise of rights during the quarter under review. However,six contingent-fee warrant bonds and four stock options were exercised on January 23, 2004. As a result, as ofJanuary 30, 2004, the number of shares outstanding was 8,371, capital stock was ¥563,787 thousand andadditional paid-in capital was ¥312,378 thousand. The Company had residual securities consisting of 82
contingent-fee warrant bonds and 62 stock options.
The Extraordinary General Meeting of Shareholders held on June 27, 2003, approved the issuance of stockoptions (as common shares with an upper limit of 230 shares). However, no resolution thereon has yet been
adopted by the Board of Directors.

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