Nippon New Market – “Hercules”
31 October 2003
Company Name: SHL-JAPAN Ltd. (code #: 4327)
Representative director: Yuzo Shimizu
Location of Headquarters: 5-38-16 Chuo Nakano-Ku Tokyo
Contact: Naohiro Nakamura, Director,
Office Management Team Leader
Tel: 03-5385-8781
Abstract of flash report
3. Operating results and financial condition(a) Overview of results for the current period
In the year ended 30 September 2003, low individual consumer demand, the influence on
seasonal goods from the cool summer and the stronger Japanese yen caused the Japanese
economy to remain in an unstable condition and the unemployment rate also moved to a higherlevel.
Under such economic conditions, many companies are hesitating to expand employment
significantly. This trend is particularly apparent in the IT industry, trading companies and thewholesale industry, which normally employ a large number of graduates.
.
However, we have aggressively developed new products and actively marketed them to acquire
new, large customers with our strengths in information technology and energy derived from ouryounger employees.
As a result, turnover increased to JPY 1,291 million for the year ended 30 September 2003,(10.1% increase from the prior year). Turnover from Products was JPY 476 million (6.1%decrease from the prior year), turnover from Consultancy was JPY 785 million (21.3% increase
from the same period in the prior year), and turnover from Training was JPY 28 million (61.6%increase from the prior year).
The decrease in turnover from Products was mainly caused by a decrease in sales of old style
written examinations due to decrease in adoption by middle to small size customers. The increasein turnover from Consultancy was due to the continuous progress in market development to large
customers who wish to adopt Internet based services and customer specification (customization)
for aptitude testing. The turnover from Training was derived from the introduction of a newservice “Competency Measurement Center”, used for the assessment of company management,
and “e-learning interview training”.
Operating profit for the year ended 30 September 2003 increased to JPY 469 million (21.8%
increase from the prior year). Gross margin increased JPY 127 million compared with last year
due to the increase in sales of JPY 118 million and a JPY 9 million reduction in cost of sales.
Operating profit increased JPY 84 million compared with last year because of a JPY 43 million
increase in selling and general administrative expenses, compared with last year. This mainly
resulted from an increase in personnel expenses of JPY 19 million to strengthen the sales andmanagement departments, an increase in sales commission to sales consignee of JPY 10 million

and an increase in research and development expenses for next generation products of JPY 4million.
Ordinary profit for the year ended 30 September 2003 is JPY 468 million, which is a JPY 117
million (33.7%) increase in profits compared with last year. This is mainly because operating
profit increased JPY 84 million compared with last year and expenses of JPY 33 million forlisting were accounted for as other expenses in last year.
In summary, sales increased 10.1 percent over last year to JPY 1,291 million, operating income
increased 21.8 percent to JPY 469 million, ordinary income increased 33.7 percent to JPY 468
million, and net income increased 31.7 percent to JPY 266 million.

(Note) Reference to Products, Training, and Consultancy used above indicate the service forms tobe provided. The Company provides integrated personnel assessment services. It is not possible
to distinguish and present operating expenses by service form because at the production stage theproducts are not allocated to a specific service. Therefore only turnover by service form ispresented(c) Prospects for the next year (from 1 October 2003 to 30 September 2004)
For the next year, we are expecting macro-economic and employment conditions to continue tobe difficult. Therefore, we anticipate a continuing severe environment for the human resourcesindustry.
We will work actively to develop results by expanding the market in Kansai area throughbuilding on the establishment of the Osaka office 3 years ago, expanding our internet productbusiness in the recruitment market, reinforcing sales cooperation with other human resource
service companies (agencies), and developing employee assessment services with our products toevaluate a client’s organization, employees and management levels.
For next year, we expect that sales will increase 10.1 percent over the current year to JPY 1,421million, ordinary income will increase 9.6 percent to JPY 513 million and net income will
increase 8.8 percent to JPY 289 million.
In addition, we expect that the total cash dividend for next year will be JPY 13,000 per share witha year-end dividend of JPY 6,500 per share and interim dividend of JPY 6,500 per share.
Note: The above projections are based on our assumptions and beliefs in accordance with data
currently available. Therefore, actual results may differ substantially from the projections
depending on a number of factors.