May 12, 2015

Non-Consolidated Financial Results (Excerpt) for the Second Quarterof Fiscal 2015 [J-GAAP basis]
Listed Company Name:
SHl-JAPAN Ltd.
Securities Code:4327
Representative:
Manabu Nara, Managing Director
Contact:
Naohiro Nakamura, executive director
Date to submit the Quarterly Securities Report:
Date to start distributing dividends:
Supplementary documents for this summary of financial statements
Results briefing for financial results:

Registered on Tokyo Stock Exchange
URL:
http://www.shl.co.jp/       Tel: +81-3-5385-8781
May 15, 2015
June 1, 2015YesYes (for analysts and institutional investors)

The original disclosure in Japanese was released on April 28, 2015 at 15:15 (GMT+9)
1. Non-Consolidated Financial Results for the Second Quarter of Fiscal 2016 (October 1, 2014 to March 31, 2015)(1) Non-Consolidated Business Results(The percentages indicate the rate of increase or decrease compared with the same period of the previous fiscal year.)Net sales
Millions ofFirst six monthsof Fiscal 2015
First six monthsof Fiscal 2014

Operating incomeYen%

839
1,280

Millions of%‫ڹ‬34.4268

8.9682Millions ofNet incomeYen%‫ڹ‬60.6

282

7.5

682

Millions ofYen%‫ڹ‬58.7178‫ڹ‬57.4

7.0

418

5.4

Fully diluted
net income per share

Net income per shareFirst six monthsof Fiscal 2015
First six monthsof Fiscal 2014

Ordinary income

Yen

Yen

Yen

59.65

59.16

135.05133.87(2) Non-Consolidated Financial Position
Total assets

Net assets

Millions ofMar 31, 2015
Sep 30, 2014
(Reference) Equity capital:

Yen

Equity ratio

Millions ofYen%

3,510
3,103
3,589
3,116
Mar 31, 2015: ¥3,094 million Sep 30, 2014: ¥3,104 million

88.2
86.5

2. DividendsEnd ofFirst quarter

Fiscal 2014
Fiscal 2015
Fiscal 2015 (forecast)

Dividend per share
End ofThird quarterEnd ofSecond quarter

Year-End

AnnualYen

Yen

YenYenYenʊ
ʊ

45.00
46.00

ʊ

47.00

92.00

ʊ46.0092.00(Note) Revisions to recent dividends forecast: None

3. Non-Consolidated Forecast for the Year Ending September 30, 2015 (October 1, 2014 to September 30, 2015)
Net sales
Millions of

Fiscal 2015

Operating income

Yen%

2,181

5.1

Millions of(Note) Revisions to recent business forecast: None

Ordinary income

Yen%

895

0.7

Millions ofNet income
per share

Net income

Yen%895

0.1

Millions ofYen%

Yen575

3.5

191.48

*Note(1) Application of particular accounts procedures to the preparation of quarterly non-consolidated financial statements:Yes(2) Changes in accounting policies and changes or restatement of accounting estimates(i) Changes in accounting policies caused by revision of accounting standards:
None(ii) Changes in accounting policies other than(ϸ) :None(iii)Changes in accounting estimates:None(iv) Restatement:
None
(1)

Number of shares outstanding (common stock)(i) Number of shares outstanding (includingtreasury shares)

As of Mar 31, 2015

3,137,500

As of Sep 30, 2014

3,101,800(ii) Number of treasury shares

As of Mar 31, 2015

121,321

As of Sep 30, 2014

81,921(iii)Average Number of shares outstanding

First six months ofFiscal 2015

2,991,636

First six months ofFiscal 2014

3,101,779* Implementation status of quarterly review proceduresThis financial results summary is not subject to quarterly review procedures under the Financial Instruments and Exchange Act,and the quarterly financial statement review procedures based on the Act were in progress at the time of the disclosure of thesefinancial results.

* Explanations and other special notes concerning the appropriate use of financial results forecasts
1. The forward-looking statements regarding financial results forecasts, etc., appearing in this financial results summary havebeen prepared based on information currently available to the Company and certain assumptions that the Company believes tobe reasonable. The Company makes no guarantee as to their realization. Actual financial results may differ substantially fromthe forecasts due to various factors.
2. As the Company’s services are often used for the screening of new graduates to be employed by corporate customers, oursales inevitably involve seasonal fluctuations. Up to the fiscal year ended September 30, 2014, our sales tended to beconcentrated in the second quarter, during which screening for the employment of new graduates was often conducted bymany corporate customers. However, the period in which our sales are concentrated has now shifted.
3. The Company has scheduled a results briefing for analysts and institutional investors on May 12, 2015. Please refer to theIR Information on the Company’s website where the materials will be posted for details of the materials that will be
distributed at the briefing.
http://www.shl.ne.jp/ir/for_analyst.asp

Qualitative information regarding the quarterly settlement of accounts(1)

Explanation of Operating Results

During the first six months of the year ending September 30, 2015 (October 1, 2014, through March 31, 2015), net sales ofSHL-JAPAN Ltd. (the “Company”) decreased ¥440 million, or 34.4%, year over year to ¥839 million. By business segment, “Productsales” decreased 35.8% to ¥394 million, “Consultancy sales” decreased 33.1% to ¥430 million and “Training sales” decreased 36.4%
to ¥14 million.
Previously, the second quarter of the Company (January 1 through March 31) had been the most vigorous period for the screening of
new graduates conducted by our customers, which had caused the Company’s net sales in the second quarter to be higher than those inother quarters. Such results were mainly due to sales of screening tools and score processing operations. However, as self-imposed
regulations regarding the employment of new graduates* were introduced by industry groups, many of our customers delayed theirschedules concerning recruitment-related PR activity and screening compared with previous years, causing the Company to delay its
concentrated period for the provision of services to the third quarter (starting in April 2015) or later, which is in the second half of thecurrent fiscal year. This delayed schedule was the primary reason for the decrease in first-half revenue.
Operating income for the six-month period under review decreased 60.6% year over year to ¥268 million. Selling, general andadministrative expenses increased ¥1 million, or 0.3%, to ¥446 million, whereas the cost of goods sold decreased ¥28 million, or18.5%, to ¥123 million. Operating income decreased ¥413 million from a year earlier due to the decrease in revenue. The primaryfactor for the decrease in cost of goods sold is decreases in the subcontracting cost associated with the provision of new services andthe printing expenses for test materials, both arising from the decrease in revenue. The increase in selling, general and administrative
expenses was mainly attributable to the year-over-year increases in labor costs largely due to expansion centered on sales personnel
and in rent due to increased sales floor space despite decreases in royalties and sales promotion-related expenses associated with thedecrease in revenue.
Ordinary income for the six-month period under review decreased 58.7% year over year to ¥282 million. Ordinary income
decreased ¥400 million year over year, reflecting the decrease in operating income although non-operating income increased ¥13
million year over year mainly by recording the gains on investments in a limited liability partnership for venture businesses, etc.
Income before income taxes for the six-month period under review decreased ¥401 million, or 58.7%, year over year to ¥282
million. This figure was almost equal to ordinary income because no extraordinary losses were reported and extraordinary gains weresmall.
Income taxes-current and income taxes-deferred amounted to ¥103 million, for which the estimated effective tax rate was 36.8%
due to the change in the corporate tax rate (38.7% for the corresponding six-month period a year earlier). Net income for the six-monthperiod under review decreased ¥240 million, or 57.4%, year over year to ¥178 million, which was primarily attributable to thedecrease in income before income taxes.

* The industry has self-imposed controls regarding the employment of new graduates, under which industry groups agreed not tostart employment PR activity and screening process for new graduates prior to a fixed date in light of the academic schedules
for students. The Keidanren (Japan Business Federation) stipulated in its “Guidelines for Recruiting and Employing NewGraduates” that corporations’ PR activity shall commence on and after March 1 (previously, it had been December 1 of theyear prior to graduation or completion), and screening activity on and after August 1 (previously, it had been April 1 of theyear of graduation or completion), respectively, of the year just preceding the year of graduation or post-graduate completionfor new graduates who will enter corporations on and after fiscal 2016.

 (Illustration of new graduates)
Graduating Year
Students scheduled tograduate in 2015

Junior StudentsDecember 1䋻㻼㻾㻌㻭㼏㼠㼕㼢㼕㼠㼥

Students scheduled tograduate in 2016

Senior StudentsApril 1䋻㻿㼏㼞㼑㼑㼚㼕㼚㼓㻌㻭㼏㼠㼕㼢㼕㼠㼥

March 1䋻㻼㻾㻌㻭㼏㼠㼕㼢㼕㼠㼥August 1䋻㻿㼏㼞㼑㼑㼚㼕㼚㼓㻌
Activity(2) Explanation about future prospects such as business forecasts
The screening market for new graduates is in progress in line with the impact of self-imposed controls newly introduced by industry
groups.
With the economy recovering moderately due to a set of economic policies and other factors and with the employment environment
continuing to be steady, a rising sense of a crunch exists in the labor market. Given the impact of the aforementioned new self-imposedcontrols, corporations are therefore currently conducting aggressive PR activities for students who are expected to graduate fromuniversities, etc. in 2016. At the same time, the amounts of expected orders for the third quarter (starting in April 2015) or later havebeen successfully accumulated, supported by the increasingly active screening-related preparatory activities of corporations.
Under the recognition that our sales are likely to be concentrated in the third quarter or later of the current fiscal year and based on ouranalysis of the prospective orders and other managerial administrative data for the current situation, followed by our carefulconsideration of business forecasts, the Company is not, at this time, revising its financial forecast for the year ending September 30,
2015, which was released on October 27, 2014.
Note: Net income per share has been revised based on the “Average number of shares outstanding” (3,003,941 shares) for the year
ending September 30, 2015, which was calculated by taking into account the number of shares issued through the exercise ofstock acquisition rights as stock options by the end of the second quarter of the year ending September 30, 2015, and the numberof treasury shares that are scheduled to be retired on May 13, 2015.