Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy
between this translated document and the Japanese original, the original shall prevail.

October 31, 2023

Consolidated Financial Results
for the First Six Months of Fiscal Year Ending March 31, 2024
(Under IFRS)

Company name: Members Co., Ltd.
Listing:
Tokyo Stock Exchange
Securities code:
2130
URL:
https://www.members.co.jp/
Representative:
Akihiko Takano, Representative Director and President
Inquiries:
Shinya Yonezawa, Executive Officer and General Manager of Business Platform Department
Telephone:+81-3-5144-0660
Scheduled date to file quarterly securities report:
November 6, 2023
Scheduled date to commence dividend payments:―
Preparation of supplementary material on quarterly financial results: Yes
Holding of quarterly financial results briefing:
Yes(for analysts and institutional investors)(Yen amounts are rounded down to millions, unless otherwise noted.)

1. Consolidated financial results for the first six months of fiscal year ending March 31, 2024 (from April 1,
2023 to September 30, 2023)(1) Consolidated operating results (cumulative)
RevenueSix months ended(Percentages indicate year-on-year changes.)

Operating profit

Profit before tax

ProfitMillions of yen%

Millions of yen%

Millions of yen%

Millions of yen

September 30, 2023

9,616

17.1

(551)

―

(562)

―

(398)

―

September 30, 2022

8,213

20.9

288

(21.2)

237(34.9)

157(39.3)

Profit attributable toowners of parent
Six months ended
September 30, 2023

Millions of yen

Total comprehensive
income%(398)―

Millions of yen(398)

Basic earnings
per share%―%

Diluted earnings
per share
Yen

Yen(30.37)(30.37)

September 30, 2022
157
(39.3)
157(39.3)
11.90
11.79
Note: Due to the application of IAS 12 “Income Taxes” (amended in May 2021), results for the first six-month period of the fiscal year
ended March 31, 2023, have been retrospectively restated.

(2) Consolidated financial position
Total assets
As of
September 30, 2023

Equity attributable toowners of parent

Total equity

Millions of yen

Millions of yen

Millions of yen

10,625

5,653

5,653

Ratio of equity
attributable to owners ofparent to total assets%

53.2

March 31, 2023
11,305
6,366
6,366
56.3
Note: Due to the application of IAS 12 “Income Taxes” (amended in May 2021), figures as of March 31, 2023, have been retrospectively
restated.

2. Cash dividends
Annual dividends per shareFirst quarter-end
Fiscal year ended
March 31, 2023
Fiscal year ending
March 31, 2024

Second quarter-end

Third quarter-end

Yen

Yen

Yen

―

0.00

―

0.00

Fiscal year ending
March 31, 2024
(Forecast)Fiscal year-end

Total

Yen

Yen

―

30.00

30.00

―

31.00

31.00

Note: Revisions to the forecast of cash dividends most recently announced: None

3. Consolidated earnings forecast for the fiscal year ending March 31, 2024 (from April 1, 2023 to March(Percentages indicate year-on-year changes.)31, 2024)
Revenue
Full year

Operating profit

ProfitMillions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

20,00013.2

200(86.1)

190(86.4)

130(87.1)

Profit attributable toowners of parent
Full year

Profit before tax

Basic earnings
per share

Millions of yen%

130(87.1)

Yen

9.81(Note) Changes from the latest financial forecast: None
1. The above consolidated earnings forecast is based on IFRS.
2. “Basic earnings per share” was calculated based on the average number of shares in FY 3/2023 (13,246,173).
3. Due to the application of IAS 12 “Income Taxes” (amended in May 2021), the percentage of change from the same period of theprevious year has been calculated using retrospectively restated figures.

* Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in the change
in scope of consolidation): None
Newly included: ―Excluded:―(2) Changes in accounting policies and changes in accounting estimates(i) Changes in accounting policies required by IFRS: Yes(ii) Changes in accounting policies due to other reasons: None(iii) Changes in accounting estimates: None
Note: Please refer to “2. Summary of Consolidated Financial Statements and Major Notes (6) Notes to Summary of Consolidated
Financial Statements (Changes in Accounting Policies)” on page 12 for details.

(3) Number of issued shares (ordinary shares)(i)

Total number of issued shares at the end of the period (including treasury shares)
As of September 30, 2023

13,421,700 shares

As of March 31, 2023

13,363,700 shares(ii) Number of treasury shares at the end of the period
As of September 30, 2023

275,696 shares

As of March 31, 2023

277,518 shares(iii) Average number of shares outstanding during the period (cumulative from the beginning of the fiscal
year)
Six months ended September 30, 2023

13,128,285 shares

Six months ended September 30, 2022

13,250,391 shares* Quarterly financial results reports are exempt from quarterly review conducted by certified public accountants oran audit corporation.
* Proper use of earnings forecasts, and other special matters(Notes regarding the description, etc. related to the future)
The descriptions about the future, such as the business forecast, in this document are based on the information the company has obtainedso far and certain assumptions that are considered reasonable, and our company does not guarantee that the results will be as forecasted.
There is a possibility that actual business performance, etc. will be considerably different from the forecast due to various factors. For
the assumptions for the earnings forecast, notes for the use of the forecast, etc., please refer to “1, Qualitative Information Regarding the
Financial Results for the Current Quarter, (3) Explanation Regarding the Future Forecast Information such as Consolidated Earnings
Forecast” on page 5 of the Appendix.
(How to obtain the material for supplementary explanations on financial results and the contents of the session for briefing financial
results)
The material for supplementary explanations on financial results will be uploaded to the website of our company on Tuesday, October
31, 2023.

○Table of contents of the appendix
1. Qualitative Information Regarding the Financial Results for the Current Quarter…………………………………………..

2(1) Explanation Regarding Business Results…………………………………………………………………………………

2(2) Explanation Regarding the Financial Standing……………………………………………………………………………

4(3) Explanation Regarding the Future Forecast Information such as Consolidated Earnings Forecast………………………

5

2. Summary of Consolidated Financial Statements and Major Notes………………………………………………………….

6(1) Summary of Quarterly Consolidated Balance Sheets…………………………………………………………………….

6(2) Summary of Quarterly Consolidated Statements of Income………………………………………………………………

8(3) Summary of Quarterly Consolidated Statements of Comprehensive Income……………………………………………

9(4) Summary of Quarterly Consolidated Statements of Changes in Equity…………………………………………………

10(5) Summary of Quarterly Consolidated Statements of Cash Flows…………………………………………………………

11(6) Notes to Summary of Consolidated Financial Statements………………………………………………………………

12(Notes on Going Concern Assumption) ……………………………………………………………………………………

12(Changes in Accounting Policies)

12(Significant Subsequent Events) …...………………………………………………………………………………………

12

- 1 -

1. Qualitative Information Regarding the Financial Results for the Current Quarter
From the first three months of Fiscal Year ending March 31, 2024, IAS 12 “Income Taxes” (amended in May 2021) has been appliedand comparative analysis with the same period of the previous fiscal year has been made using retrospectively restated figures. The
application of this standard did not have a material impact on this Summary of Consolidated Financial Statements. The details of thechanges in accounting policies are stated in “(6) Notes to Summary of Consolidated Financial Statements (Changes in Accounting
Policies)” in “2. Summary of Consolidated Financial Statements and Major Notes.”(1) Explanation Regarding Business Results
Management’s Explanation and Analysis of Business Results
Due to the climate change caused by global warming, severe natural disasters have been occurring frequently all over the world. An
increasing number of countries and regions are declaring carbon neutrality, meaning that emissions of greenhouse gases such as carbon
dioxide, which are the main cause of global warming, are virtually zero. As it is believed that the success or failure of efforts toward
GX(*1) is directly linked to the competitiveness of companies and, by extension, the nation, in Japan, based on the GX Promotion Act,
we aim to achieve three things at the same time: decarbonization, stable energy supply, and economic growth, and are implementing
initiatives such as switching to carbon-free power sources and making GX investments of 150 trillion yen in the public and private
sectors. We are expecting businesses, including their marketing activities, to transform into a model that facilitates decarbonization andresolution of societal issues by accelerating corporate transformations through the utilization of digital technologies for continuous value
creation.
As the digital business becomes more active, each company is having difficulty to recruit and train creative personnel who are versedon the Internet and digital technology internally, and such personnel shortage is now a huge hurdle to digitalization. According to theDX (Digital Transformation) White Paper 2023, more than 80% of Japanese companies answered that they lack both the quality andquantity of human resources to promote DX (Incorporated Administrative Agency Information Technology Promotion Agency DX
White Paper 2023, Issued March 16, 2023).
Under such circumstances, we uphold to create a spiritually rich society through “MEMBERSHIP” as our mission, and aim to convert
our client companies’ management style, marketing activities, services, and products into “Sustainable Ones for the Earth and Society”
through our support to clients’ digital business operation.
<Business Overview>
From the first quarter of this consolidated cumulative period, we started offering the “DGT (Digital Growth Team)” service that werecreated by integrating the EMC and the PGT businesses offered up to the previous fiscal year. The DGT service is a hands-on service
that promotes and supports the digitalization of companies by a customer-dedicated team that consists of 3 or more digital creators withvarious specialized skills, including data analysis, UX(*2), and engineering. Digital creators directly pursue the improvement of digitalbusiness results of client companies, and continuously support their operation with hypothesis verification. In addition, in the future, wewill support the improvement of carbon productivity (*3) of client companies through our digital business operation services andimplement actions that lead to decarbonization in our daily operation work.
In this fiscal year ending March 31, 2024, we will further strengthen the sales structure through the separation of production and sales
with the aim of establishing DGT service, and by increasing the number of clients we offer DGT models, we will steadily increase theoperating rate of digital creators. To this end, we will attempt to accelerate the growth of non-web operation area and improve profitability
by actively launching inhouse companies that specialize in high-value-added services with advanced technologies and increasing thenumber of digital creators belonging to those companies. Concurrently, we accelerate skill development and job transfer of all digitalcreators. In addition, we will strategically expand mid-career recruitment in order to improve the human resource portfolio of the entire
group and build a foundation for enhancing service capabilities.
Since this corporate group has only one segment, “Internet business support business,” segment information is omitted.
<Overview of Consolidated Financial Statements>
For the second quarter of the current consolidated term, revenue was 9,616 million yen (up 17.1% from the same quarter of theprevious fiscal year), operating loss was 551 million yen (operating profit of 288 million yen in the same quarter of the previous fiscal
year), loss before income taxes was 562 million yen (profit before income taxes of 237 million yen in the same quarter of the previous
fiscal year), and loss attributable to the owners of the parent was 398 million yen (profit attributable to the owners of the parent of 157
million yen in the same quarter of the previous fiscal year).
In order to establish the 10,000-employee organization structure set forth in VISION 2030, while aiming to increase added-value- 2 -sales (sales by internal resources calculated as sales revenue minus costs for outsourcing and purchasing; which is an important indicator)
by 25%, we have proactively made upfront investments in recruitment, with a focus on hiring new graduates, and in the current fiscal
year we continued to hire new graduates at a rate that exceeded the growth rate of added-value sales. Therefore, we anticipated a loss
in the first half of the year, and we planned to attain the full-year earnings growth by increasing the growth rate of added value sales to
25% in the second half through the integration of organizations and services. However, although sales revenue in the second quarter ofthe current consolidated cumulative period hit a new record high, there are not enough achievements in our efforts to increase the growthrate by strengthening service and sales capabilities through the integration of company-wide organizations in April 2023. As a result, wewere unable to achieve the expected results and fell short of the initial business forecast announced on May 10, 2023.
Based on our original plan, 585 new graduate employees joined the company in April 2023, and the number of digital creators at theend of the current second quarter consolidated cumulative period increased by 26.3% compared to the end of the previous fiscal year, to2,541.
The growth rate of added-value sales in the second quarter of the current consolidated cumulative period was 15.2% compared to thesame period of the previous year. The added-value sales per client company that we offer DGT models increased by 0.5% compared tothe same period of the previous year, and the number of companies we offer DGT models was 132 companies (+16 companies comparedto the end of the previous fiscal year) and the number of all client customers was 385 companies (+35 companies compared to the endof the previous fiscal year). These important KPIs in existing business are increasing; so that, our customer base is steadily expanding.
In addition, the number of specialized companies, which are responsible for high-value-added fields that we aim to expand has
increased by 6 compared to the end of the previous fiscal year. As a result, the cumulative added-value sales of specialized companies
increased by 38.7% compared to the same period last year, and the number of digital creators of specialized companies increased by
24.0% compared to the end of the previous fiscal year. The sales ratio other than web operations increased to 36.8% (up 3.2 points fromthe same period last year), and the shift to services in high-growth, high-value-added areas is steadily progressing.
As just described, we are making steady progress in integrating company-wide organizations, establishing services, strengthening oursales structure, and developing specialized skills in order to achieve a 25% added-value sales growth rate; however, we are still behindschedule. Although the target sales growth of added-value sales for the second quarter of the current consolidated cumulative period was
21%, the actual growth was only 15%. As a result, the number of non-operating employees increased compared to the initial plan, andthe operating profit margin decreased significantly.
<Our Corporate Group’s Policies and Initiatives>
Going forward, we will aim for further growth while placing top priority on improving profitability based on the following policies.
1.

Improving profitability by reducing upfront investment-type recruitment

During the second quarter of the current consolidated cumulative period, the upfront investment in new graduate recruitment wasexcessive compared to the actual added-value sales growth rate, resulting in 976 million yen as the excessive cost for non-operated
digital creators. We recognize that it is necessary to control this cost in order to improve profitability, and as a specific initiative, we will
restrict the hiring of new graduates until the target operation rate for digital creators excluding first-year new graduate employees reaches
90% and operating profit margin recovers to 10%.
In the fiscal year ending March 2025, we will reduce the number of new graduate employees we will hire to just over 400 (585 joinedin the fiscal year ending March 2024), and although we aim to improve profit margins to a certain extent, we expect that the cost for
non-operating digital creators will continue to occur. Therefore, we do not expect the operating profit margin to recover to 10%.
From the fiscal year ending March 2026, we will further curtail the recruitment of new graduate employees, to recover operating
profit margin to 10% or higher even if the growth rate of added value sales remains the current level of 15%.
2.

Continuing efforts to strengthen services, sales, and training to increase growth rate

In accordance with our current management policy, we will strongly promote the following three points in an effort to raise the growthrate of added value sales and quickly achieve our operating profit margin target of 10%.
(1) Establish the DGT service••

Shift from the web operations field to highly advanced fields such as data/AI/cloudTransform to digital business operations(2) Strengthen sales strategy•
Strengthen account management to expand transactions with existing customers•
Establish separation of production and sales to acquire new customers(3) Improve human resources portfolio and strengthen training
- 3 -

•

Control new graduate recruitment and continue to strengthen mid-career recruitment•

Strengthen the development of high value-added human resources in data/AI/cloud, etc.

Although we revised our full-year consolidated earnings forecast on October 27, 2023, and now plan for profits to be lower than theprevious year, we are steadily making progress in transitioning our services to high-growth/high-value-added areas. There is no change
to the annual dividend per share forecast (31 yen) because we expect future earnings to improve by controlling the cost for non-operating
employees by reducing hiring. We will promote the policy of improvement and rebuild the foundation for future growth.
Currently, the impact of energy and geopolitical issues on the Japanese economy are still uncertain, but we believe that digital
investment by companies will accelerate further, and at the same time, the shortage of IT/digital human resources will further expand,against the backdrop of further evolution of digital technology, the global effort toward decarbonization, and decline in population in
Japan. Under such environment, we will continue to work to expand our human capital by improving the skills of digital creators, who
are the source of value creation for customers, and improving employee engagement, by continuing to invest in human resources suchas developing specialized skills; then, we will realize "the world's best digital business operation support" through the DGT services.
(*1) GX (Green Transformation): This refers to the transformation for utilizing clean energy while avoiding the use of fossil fuels asmuch as possible and activities aimed at achieving this goal. The Ministry of Economy, Trade and Industry believes that efforts to achievecarbon neutrality by 2050 and the national greenhouse gas emission reduction target by 2030 are opportunities for economic growth anddefines GX as the transformation of entire economic and social system toward the goal of reducing emissions and improving industrial
competitiveness.
(*2) UX (User Experience): The experience one gains by using a product or service.
(*3) Carbon Productivity: Gross domestic product (GDP) per unit of greenhouse gas emissions. We design for customers our support toformulate and operate their business model with calculating profits per carbon emitted during manufacturing, sales, and collection ofcustomers’ products and services as the carbon productivity. Our company, we measure a company's carbon productivity by measuring
profits per carbon emitted during the manufacturing, sales, and collection of products and services, and formulate business model
construction and operational support.
(2) Explanation Regarding the Financial Standingi)Status of Assets, Liabilities, and Shareholders’ Equity
The total assets at the second quarter of the current consolidated term were 10,625 million yen (down 680 million yen fromthe end of the previous consolidated fiscal year). This is primarily due to an increase of 173 million yen in deferred tax assets,
along with a decrease of 366 million yen in cash and cash equivalents, a decrease of 337 million yen in trade receivables andother receivables, and a decrease of 158 million yen in rights to use as assets.
Total liabilities stood at 4,971 million yen (up 32 million yen from the end of the previous consolidated fiscal year). This wasprimarily due to a decrease of 348 million yen in trade payables and other payables, 128 million yen in lease liabilities, and 125
million yen in income taxes payable, along with an increase of 705 million yen in other current liabilities.
Total equity was 5,653 million yen (down 712 million yen from the end of the previous consolidated fiscal year). This wasprimarily due to an increase of 44 million yen in capital surplus and an increase of 40 million yen in capital stock, along with adecrease of 790 million yen in retained earnings.
ii)Status of Cash FlowsThe cash and cash equivalent (hereinafter referred to as “funds”) at the end of the second quarter of the current consolidated
cumulative term was 4,113 million yen, down 366 million yen from the end of the previous consolidated fiscal year. The statusof each cash flow for the cumulative second quarter and the factors behind them are as follows.
(Cash Flows from Operating Activities)
The funds acquired during the second quarter of the current consolidated cumulative term as a result of operating activities
amounted to 212 million yen (272 million yen acquired during the same quarter of the previous year). The income was mainly
from 611 million yen in others, a decrease of 284 million yen in trade and other receivables, and 252 million yen in depreciation
and amortization while the expenditure was mainly from 562 million yen in loss before income taxes, a decrease of 253 million
yen in trade and other payables, and 151 million yen paid as income taxes paid.
(Cash Flows from Investing Activities)
The funds used during the second quarter of the current consolidated cumulative term as a result of investing activities
amounted to 35 million yen (1,126 million yen used in the same quarter of the previous year). The expenditure was mainly from- 4 -

23 million yen in purchase of property, plant and equipment and 12 million yen in expense due to security deposit.
(Cash Flows from Financing Activities)
The funds used during the second quarter of the current consolidated cumulative term as a result of financing activities
amounted to 543 million yen (450 million yen used in the same quarter of the previous year). The income was mainly from 72
million yen in proceeds from exercise of share acquisition rights and the expenditure was mainly from 391 million yen as
dividends paid and 224 million yen in expenditure for the repayment of lease liabilities.
(3) Explanation Regarding the Future Forecast Information such as Consolidated Earnings Forecast
As announced in the "Notice of Revisions to Earnings Forecasts" on October 27, 2023 in Japanese only, we have revised ourfull-year earnings forecasts. Please refer to 3. Consolidated earnings forecast for the fiscal year ending March 31, 2024 (from
April 1, 2023 to March 31, 2024) on Consolidated Financial Results for the First Six Months of Fiscal Year Ending March 31,
2024 (Under IFRS), and (1) Explanation Regarding Business Results at page 2 of the appendix of this document.
(Regarding the Dividend Forecast)
From the point of enhancing the return of profits to all of our shareholders and further increasing enterprise value, we willretain earnings in preparation for new business investment for long-term profit growth and the expansion in business activities,
as well as set a fundamental policy of the distribution of profits according to the improvement of business results and a continuous
increase in the dividend amount. Our medium-term target of an equity dividend ratio attributable to owners of the consolidated
parent company is about 5%.
After comprehensively taking into account of the DOE and dividend payout ratio, the term-end dividend for FY 3/2024 isplanned to be 31.00 yen.
Although we have revised our full-year earnings forecast, in consideration of our financial condition and medium- to longterm growth prospects, our dividend forecast remains unchanged. We will promote a policy of hiring control and improvement,
shift to high-value-added areas, and rebuild the foundation for future growth.

- 5 -2. Summary of Consolidated Financial Statements and Major Notes(1) Summary of Quarterly Consolidated Balance Sheets[unit: thousand yen]Previous consolidated
accounting year
(Mar. 31, 2023)

2nd quarter of the current
consolidated accounting year
(Sep. 30, 2023)

AssetsCurrent assets
Cash and cash equivalents

4,479,967

4,113,232

3,387,822
68,5473,050,100
44,069Other current assets

234,311

266,315

Total current assets

8,170,648

7,473,717

Non-current assets
Tangible fixed assets

349,032

344,753

Rights to use as assets
Goodwill

918,446
116,115759,602
116,115

Intangible assets
Other financial assets

9,897
1,340,550

8,935
1,348,073

Trade receivables and other receivables
Inventory assets

Deferred tax assets
Total non-current assets
Total assets- 6 -401,188574,460

3,135,231

3,151,941

11,305,879

10,625,658

[unit: thousand yen]Previous consolidated
accounting year
(Mar. 31, 2023)

2nd quarter of the current
consolidated accounting year
(Sep. 30, 2023)

Liabilities and shareholders’ equity
Liabilities
Current liabilities
Lease liabilities
Trade payables and other payables

360,860
1,201,535

318,200
852,641

Income taxes payable
Contract liabilities

204,338
66,73778,486
13,971Other current liabilities

2,551,526

3,257,156

Total current liabilities

4,384,998

4,520,456

301,917215,671

252,658

235,680

Non-current liabilities
Lease liabilities
Allowance
Total non-current liabilities

554,576

451,352

4,939,574

4,971,808

Capital stock
Capital surplus

1,017,504
342,670

1,057,867
386,925

Treasury shares
Other components of equity(300,140)
30,845(298,169)
22,327Retained earnings

5,275,424

4,484,898

Total equity attributable to owners of the parent

6,366,305

5,653,850

Total shareholders’ equity

6,366,305

5,653,850

11,305,879

10,625,658

Total liabilities
Shareholders’ equity

Total liabilities and equity- 7 -(2) Summary of Quarterly Consolidated Statements of Income[unit: thousand yen]
1H FY2023(Apr. 1, 2022 to Sep. 30, 2022)

1H FY2024(Apr. 1, 2023 to Sep. 30, 2023)

Revenue

8,213,871

9,616,516

Cost of sales

5,947,917

7,907,655

Gross profit

2,265,953

1,708,860

Selling, general and administrative expenses
Other income

1,981,753
11,2752,258,882
2,756

6,941

3,840

288,53422(551,106)
20

Other expenses
Operating profit (loss)
Finance income
Finance costs

51,47011,788

Profit (loss) before income taxes

237,086(562,874)

Income taxes

79,471(164,233)

Profit (loss) for the period

157,614(398,640)

Profit (loss) attributable to
Owners of parent

157,614(398,640)

157,614(398,640)

11.90
11.79

(30.37)(30.37)

Net profit (loss)
Earnings per share
Basic earnings (loss) per share (yen)Diluted earnings (loss) per share (yen)- 8 -(3) Summary of Quarterly Consolidated Statements of Comprehensive Income[unit: thousand yen]
1H FY2023(Apr. 1, 2022 to Sep. 30, 2022)

1H FY2024(Apr. 1, 2023 to Sep. 30, 2023)

157,614(398,640)

Financial assets measured at fair value through othercomprehensive income－

126

Total items that will not be reclassified to profit or loss
Other comprehensive income after tax

－
－

126
126

157,614(398,514)

Owners of parent

157,614(398,514)

Comprehensive income

157,614(398,514)

Profit (loss) for the period
Other comprehensive income
Items that will not be reclassified to profit or loss

Comprehensive income total
Comprehensive income attributable to- 9 -(4) Summary of Quarterly Consolidated Statements of Changes in Equity
Consolidated cumulative second quarter of the prior fiscal year ended March 2023 (Apr. 1, 2022 to Sep. 30, 2022)[unit: thousand yen]
Equity attributable to owners of parent
Capitalstock
Balance on April 1, 2022

Capitalsurplus

Other
components ofequityTreasurysharesRetainedearnings

Total

Total
equity963,358

281,704(8,477)52,1904,606,602

5,895,377

5,895,377

－

－

－

－

(7,857)(7,857)(7,857)963,358

281,704(8,477)52,1904,598,744

5,887,519

5,887,519

Profit (loss) for the period

－

－

－

－

157,614

157,614

157,614

Total comprehensive income

－

－

－

－

157,614

157,614

157,614

Exercise of share acquisition rights

52,70752,707－(11,514)－93,89993,899Forfeiture of share acquisition rights

－

－

－

(19)

19

－

－

Purchase of treasury shares

－

－

(353)

－

－

(353)

(353)

Disposal of treasury shares

－

1,156

1,203

－

－

2,359

2,359

Dividends

－

－

－

－

(328,194)(328,194)(328,194)

Total transactions with owners

52,70753,863849(11,534)(328,174)(232,289)(232,289)

Balance on September 30, 2022

1,016,065

335,567(7,628)40,656

4,428,185

5,812,845

5,812,845

Cumulativechangeeffectofaccounting

Restated balance

Consolidated cumulative second quarter of the current fiscal year ending March 2024 (Apr. 1, 2023 to Sep. 30, 2023)[unit: thousand yen]
Equity attributable to owners of parent
Capitalstock
Balance on April 1, 2023

Capitalsurplus

Other
components ofequityTreasurysharesRetainedearnings

Total

Total
Equity1,017,504

342,670(300,140)

30,8455,275,424

6,366,305

6,366,305

Profit (loss) for the period

－

－

－

－

(398,640)(398,640)(398,640)

Other comprehensive income

－

－

－

126

－

126

126

－

－

－

126

(398,640)(398,514)(398,514)

Total comprehensive income
Exercise of share acquisition rights

40,36340,363－(8,140)－72,586

72,586

Share-based compensationtransactions

－

2,975

－

－

－

2,975

2,975

Issuance of share acquisition rights

－

－

－

195

－

195

195

Forfeiture of share acquisitionrights

－

－

－

(700)

700

－

－

Disposal of treasury shares

－

917

1,970

－

－

2,887

2,887

Dividends

－

－

－

－

(392,585)(392,585)(392,585)

Total transactions with owners

40,36344,255

1,970(8,644)(391,885)(313,940)(313,940)

Balance on September 30, 2023

1,057,867

386,925(298,169)

22,327

4,484,898

5,653,850

5,653,850- 10 -

(5) Summary of Quarterly Consolidated Statements of Cash Flows[unit: thousand yen]
1H FY2023(Apr. 1, 2022 to Sep. 30, 2022)

1H FY2024(Apr. 1, 2023 to Sep. 30, 2023)

Profit (loss) before income taxes
Depreciation and amortization

237,086
242,288(562,874)
252,851

Finance income
Finance costs(22)
50,494(20)
11,788(Increase) decrease in inventories(Increase) decrease in trade and other receivables(2,881)
423,104

24,478284,939

Increase (decrease) in trade and other payables
Other(354,783)(37,160)(253,941)
611,712

Cash flows from operating activities

Subtotal

558,125

368,934

Proceeds from subsidy income
Proceeds from insurance income

1,383
6,000

－
－

Interest and dividends received
Interest paid

22
(4,240)20(5,038)

Income taxes paid
Income taxes refund(288,562)
4(151,911)
36

Cash flows from operating activities

272,732

212,041

Purchase of property, plant and equipment
Purchase of intangible assets(133,730)(2,904)(23,668)－

Purchase of investments
Expense due to security deposit(992,459)－(12,169)

Cash flows from investing activities

Income from collection of security deposit
Other

－

2,588

656
－

(1,126,506)(35,181)

Repayments of lease liabilities
Proceeds from issuance of share acquisition rights(217,748)－(224,603)
195

Proceeds from exercise of share acquisition rights
Payments for purchase of treasury shares

93,899(353)

72,586－

Dividends paid

(326,600)(391,771)

Cash flows from financing activities(450,803)(543,593)－

Cash flows from investing activities
Cash flows from financing activities

Net increase (decrease) in cash and cash equivalents(1,304,577)(366,734)

Cash and cash equivalents at beginning of period

5,226,706

4,479,967

Cash and cash equivalents at end of period

3,922,129

4,113,232- 11 -

(6) Notes to Summary of Consolidated Financial Statements(Notes on Going Concern Assumption)
There is no related information.
(Changes in Accounting Policies)
This corporate group applied IAS 12 “Income Taxes” (amended in May 2021) from the first three-month period of fiscal year
ending March 31, 2024.
Compulsory
Statement

Criteria nameapplication period(Start year after)

IAS 12

Income taxes

January 1, 2023

FY applicable tothe corporate group
Period ending
March 31, 2024

Description of new standard, interpretations
and amendments
Clarification of accounting treatment fordeferred taxes related to assets and liabilities
arising from a single transaction

The application of this standard clarifies the accounting treatments on initial recognition for transaction that give rise to equal
taxable and deductible temporary differences at the time of the transaction, and results in the recognition of taxable and deductible
temporary differences as deferred tax liabilities and assets, respectively, in the Condensed Interim Consolidated Statements ofFinancial Position.
As a result of the application of the standard, the previous fiscal year’s consolidated financial statements have been retrospectively
restated. The effect of the application decreased deferred tax assets by 9,391 thousand yen and retained earnings by 9,391 thousand
yen. In addition, the effect decreased income tax expenses by 386 thousand yen and increased profit for the period by the sameamount in the Consolidated Statements of Income for the first six-month period of fiscal year ended March 31, 2023.
Due to the cumulative effect of application of this standard, the beginning balance of retained earnings for the first six-month
period of previous fiscal year decreased by 7,857 thousand yen in the Consolidated Statements of Changes in Equity.
(Significant Subsequent Events)(Acquisition of treasury share)
At the board of directors meeting held on October 27, 2023, the Company resolved matters related to the acquisition oftreasury share based on the provisions of Article 156 of the Companies Act, as applied by replacing the terms with theprovisions of Article 165, Paragraph 3 of the same Act.
Reason to acquire the treasury share: To enhance returns to shareholders, improve capital efficiency, and be able to executethe flexible capital policy in the future, as well as to allocate shares to be delivered as incentives such as share compensation
for sustainable improvement of corporate value.
(1) Type of shares to be acquired

Our common share(2) Total number of shares to beacquired

400,000 shares (Upper limit)(3.04% of total number of issued shares excluding treasury share)(3) Total acquisition price of shares

400,000,000 yen (Upper limit)(4) Acquisition period

From November 1, 2023 to March 29, 2024

(5) Acquisition method

Market purchases on the Tokyo Stock Exchange- 12 -