Consolidated Financial Results for the Fiscal Year ended March 31, 2024
(April 1, 2023 through March 31, 2024)(Prepared pursuant to Japanese GAAP)All financial information has been prepared in accord with accounting principles generally accepted in Japan.
This is a partial English translation of the original Japanese-language document. All information pertains to consolidated
results unless otherwise noted. Information on the basis of presentation of consolidated financial statements does not appear inthis translation.
May 8, 2024
Company name:
Stock exchange listings:
Stock code:
URL:
Representative:
Contact:
Phone:TIS Inc.
Tokyo Stock Exchange, Prime Market
3626
https://www.tis.com/
Yasushi Okamoto, President
Masahiro Hiwasa, Department Manager of Finance & Accounting Dept., Corporate
Planning SBU.
+81 50-1702-4115

Scheduled dates
Annual general shareholders’ meeting:
Filing of statutory financial report:
Commencement of dividend payments:

June 25, 2024
June 26, 2024
June 26, 2024

Supplementary materials to the full-year results:
Full-year results presentation held:

Available
Yes (targeted at institutional investors and analysts)
Figures in millions of yen are rounded down to the nearest million

1. Consolidated Results for the Fiscal Year ended March 31, 2024 (FY2024)(April 1, 2023 – March 31, 2024)(1) Consolidated Financial Results

Percentages indicate year-over-year changes
Net sales

millions of yen

Operating income%

millions of yen

Net income attributableto owners of the parent
company

Recurring profit%

millions of yen%

FY2024
549,004
8.0
64,568
3.6
68,5538.5
FY2023
508,400
5.4
62,32813.9
63,204
13.5
Note: Comprehensive income: FY2024: 56,622 million yen (18.6%); FY2023: 47,746 million yen (27.4%)%

millions of yen

48,87355,461-11.9
40.5

Net income
per share – basic

Net income
per share – diluted

Return on
shareholders’ equity

Ratio of recurring
profit to total assets

yen

yen

%

%

Ratio of operating
income to net sales%

FY2024203.2816.0
13.9
FY2023227.11
18.8
13.5
For reference: Equity in earnings (losses) of affiliated companies: FY2024: (20) million yen; FY2023: (1,088) million yen

11.8
12.3

(2) Consolidated Financial Position
Total assets
millions of yen

Net assets
millions of yen

Equity ratio

Net assets per share%yen

End-FY2024
525,456
324,725
59.5
End-FY2023
462,320309,226
64.2
For reference: Total equity: End of FY2024: 312,409 million yen End of FY2023: 297,039 million yen*Total equity = Shareholders’ equity plus total accumulated other comprehensive income

1,333.32
1,227.44

(3) Consolidated Cash Flows
Cash flows fromoperating activities

Cash flows frominvesting activities

Cash flows fromfinancing activities

Cash and cash equivalents
at the end of the period

millions of yen

millions of yen

millions of yen

millions of yen

62,57833,634(32,817)
11,300(21,889)(64,573)

102,722
94,306FY2024FY2023

2. Cash Dividends for Shareholders of Common Stock
Cash dividends per share
Record date or
periodEnd-Q1End-Q2yen

End-Q3Year-end

yen

yen

yen

Total
dividends
paid(full year)

Total
yen

Payout ratio(consolidated)

Dividends
paid to net
assets(consolidated)%%

millions of yen

15.00
FY202335.00
50.00
12,167
22.0
4.2
17.00
FY202439.00
56.00
13,31427.5
4.4
FY2025
34.00
34.00
68.00
35.3
(forecast)
Note: Total dividends paid includes dividends (39 million yen for FY2023, 75 million yen for FY2024) paid to TIS INTEC Group
Employees’ Shareholding Association Trust and dividends (10 million yen for FY2023, 10 million yen for FY2024) paid to Board
Incentive Plan (BIP) Trust.

3. Forecast of Consolidated Results for FY2025 (April 1, 2024 – March 31, 2025)

Net sales

Operating income

Percentages indicate year-over-year changes
Net Income
attributable to
Net income per
Recurring profit
owners of the parent
share – basic
company

millions of yen%

millions of yen%

millions of yen%

millions of yen%

Yen

270,000

0.9

30,000-1.3

30,000-5.8

20,300

-0.0

87.13

555,000

1.1

66,5003.0

66,500-3.044,800-8.3

192.55First half of FY2025(six months ending Sep. 30,
2024)

Full FY2025(year ending Mar. 31, 2025)※Notes(1) Material reclassifications of subsidiaries during the period: None
(Changes in specified subsidiaries resulting in change in scope of consolidation)
Additions: None
Exclusions:None(2) Changes in accounting policy, changes in accounting estimates, and retrospective restatement
1) Changes in accordance with amendments to accounting standards, etc.: None
2) Changes other than noted in 1) above: None
3) Changes in accounting estimates: None
4) Retrospective restatement: None
(3) Common stock issued
1) Issued shares as of period-end (including treasury stock):
End-FY2024 (March 31, 2024):
236,233,411 shares
End-FY2023 (March 31, 2023):
244,445,411 shares
2) Treasury stock as of period-end:
End-FY2024 (March 31, 2024):
1,924,351 shares
End-FY2023 (March 31, 2023):
2,446,057 shares
3) Average number of shares (during the fiscal year):
FY2024 (ended March 31, 2024):
240,427,703 shares
FY2023 (ended March 31, 2023):
244,212,296 shares
Note: Treasury stock includes the number of the Company’s own shares held by TIS INTEC Group Employees’
Shareholding Association Trust and the Board Incentive Plan (BIP) Trust.

Audit Status
Financial reports are not subject to review procedures to be conducted by certified public accountants or an audit firm.
Caution on Forward-Looking Statements and Other Important Matters
At a Board of Directors’ Meeting held on May 8, 2024, TIS Inc. (TIS) resolved to acquire its own (treasury) shares inaccordance with Article 156 of the Companies Act of Japan, as applied pursuant to Paragraph 3, Article 165 of said Act.
Accordingly, “Net income per share – basic” in the Forecast of Consolidated Results for FY2025 has been presented taking
into account the effect of this acquisition of treasury shares.
This report contains forward-looking statements that reflect TIS’s plans and expectations based on information available to
TIS at the time of preparation and on certain other information TIS believes to be reasonable. These forward-looking
statements are not guarantees of future performance, and actual results, performance, achievements or financial position may
differ materially from those expressed or implied herein due to a range of factors.
For the assumptions underlying the forecasts herein and other notice on the use of earnings forecasts, refer to “(4) Outlook forfiscal 2024” in the “1. Results of Operations” section on page 12 in the Accompanying Materials.

Accompanying Materials – Contents
1. Results of Operations(1) Analysis of Consolidated Operating Results(2) Analysis of Financial Condition(3) Analysis of Cash Flows(4) Outlook for Fiscal 2025
(5) Basic Policy on Profit Distribution and Dividends for Fiscal 2024 and Fiscal 2025
(6) Business and Other Risks
2. Status of the Group3. Management Policy(1) Basic Management Policy(2) Medium-Term Management Plan (2021–2023) Review(3) Management Decisions(4) Medium-Term Management Plan (2024–2026): “Frontiers 2026”(5) Objective indicators to measure the achievement of management goals, etc.
(Reference) Sustainability Policy and Initiatives
4. Basic Policy on Selecting Accounting Standards
5. Consolidated Financial Statements(1) Consolidated Balance Sheets(2) Consolidated Statements of Income and Comprehensive Income
Consolidated Statements of Income
Consolidated Statements of Comprehensive Income(3) Consolidated Statement of Changes in Net Assets(4) Consolidated Statements of Cash Flows(5) Notes on the Consolidated Financial Statements(Notes on the Going-Concern Assumption)(Significant Accounting Policies for Preparing Consolidated Financial Statements)
6. Other Information

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1. Results of Operations(1) Analysis of Consolidated Operating Results
During fiscal 2024, the Japanese economy recovered moderately, albeit with some stagnation, due in part to theeffects of various policies, as the new employment and income environment improved. Looking ahead, although amoderate recovery is expected to continue, it will be necessary to watch carefully for the risk of downward pressure
on Japan’s economy due to the effects of a downturn in overseas economies following the worldwide monetary
tightening as well as rising prices, fluctuations in financial and capital markets, and other factors.
The IT services industry, to which the TIS INTEC Group (“the Group”) belongs, is expected to see further
increases in IT investment demand as the transformation of business processes and business models utilizing digitaltechnologies progresses globally. This is demonstrated by factors such as the Bank of Japan’s quarterly Short-term
Economic Survey of Enterprises in Japan announced during the period under review, which all showed year-on-yearincreases in corporate software investment plans (all industries, including financial institutions).
Fiscal 2024 is the last year of the medium-term management plan (2021–2023), which was formulated as asecond step towards realizing “Group Vision 2026.” Under the slogan of “Be a Digital Mover 2023,” the Group
continued to strengthen its focus on Strategic Domains and took various measures to accelerate businessrestructuring, with enhancing the value provided by digital transformation as the keystone.
Consolidated net sales for the Group during fiscal 2024 rose 8.0% year on year to ¥549,004 million. Operating
income rose 3.6% to ¥64,568 million and recurring profit was up 8.5% to ¥68,553 million, while net income
attributable to owners of the parent company decreased 11.9% to ¥48,873 million.
(Unit: millions of yen)
Fiscal 2023

Fiscal 2024

Year-on-yearchangeNet sales

508,400

549,004+8.0%

Cost of sales

366,668

397,365+8.4%

Gross profit

141,732

151,639+7.0%

Gross profit ratio

27.9%

27.6%

-0.3P

Selling, general andadministrative expenses

79,40387,070+9.7%

Operating income

62,32864,568+3.6%

Operating income ratio

12.3%

11.8%

-0.5P

Recurring profit

63,20468,553+8.5%

55,461

48,873-11.9%Net income attributable to ownersof the parent company

Net sales were higher than the previous year, in part because the company expanded its business by precisely
responding to IT investment demand, such as customers’ demand for digital transformation. The Company recorded
a year-on-year increase in operating income due to the increase in income from higher revenue, provision of highvalue-added business, and promotion of productivity improvement measures, while aggressively investing inhuman resources and other investments that will contribute to future growth. However, the gross profit ratio
decreased 0.3 percentage points to 27.6% compared with the previous year and the operating income ratio fell 0.5
percentage points to 11.8% due to the significant impact of unprofitable projects. The year-on-year increase inrecurring profit reflects the growth in operating income and the improvement in non-operating income and expense.
Net income attributable to owners of the parent company decreased year on year, mainly due to the non-recurrenceof the increase in extraordinary income resulting from a reduction in cross-shareholdings in the previous fiscal year.
The results of Nihon ICS Co., Ltd., which became a consolidated subsidiary in April 2023, are reflected from thesecond quarter of the fiscal year. The Company’s consolidated financial results for fiscal 2024 include Nihon ICS’s
net sales of ¥5.8 billion and operating income of ¥1.8 billion, as well as amortization of goodwill related to thecompany of ¥1.2 billion.

-2-

<Analysis of the increase/decrease in key factors of operating income (YOY change)>

Segment results for the period are as follows. The sales figures for each segment include inter-segment sales.
(Unit: millions of yen)
Fiscal 2023
Offering Service
Business

BPM

Financial IT
Business
Industrial IT
Business
Regional IT
Solutions

Other

Fiscal 2024

Year-on-year change

111,752

130,759+17.0%

Operating income

6,426

7,659

+19.2%

Operating income ratio

5.8%

5.9%

+0.1P

Net sales

43,25541,953-3.0%

Net sales

Operating income

5,123

4,551

-11.2%

Operating income ratio

11.8%

10.8%

-1.0P

Net sales

101,184

106,304+5.1%

Operating income

13,89615,185+9.3%

Operating income ratio

13.7%

14.3%

+0.6P

Net sales

113,632

121,896+7.3%

Operating income

16,72818,287+9.3%

Operating income ratio

14.7%

15.0%

+0.3P

Net sales

160,010

172,376+7.7%

Operating income

19,343

18,497-4.4%

Operating income ratio

12.1%

10.7%

-1.4P

Net sales

8,957

9,581

+7.0%

Operating income

878

777

-11.5%

Operating income ratio

9.8%

8.1%

-1.7P

-3-

1) Offering Service Business
Configures services through own investment based on best practices the Group accumulated and provides
knowledge-intensive IT services.
Segment sales during fiscal 2024 totaled ¥130,759 million, up 17.0% year on year, and operating income
increased 19.2% to ¥7,659 million. In addition to the expansion in IT investment in the settlement solutions,platforms, and business management fields, overseas operations contributed to growing sales, the businessresults, etc. of Nihon ICS Co., Ltd., which became a consolidated subsidiary in April 2023, started to bereflected in the consolidated financial results from the second quarter of fiscal 2024, resulting in a year-on-yearincrease in both sales and profits with operating income ratio of 5.9%, up 0.1 percentage points year on year.
2) Business Process Management
Addresses issues related to business processes with IT technology, business know-how and skilled humanresources to provide more sophisticated, more efficient outsourcing services.
Segment sales during fiscal 2024 totaled ¥41,953 million, down 3.0% year on year, and operating income
decreased 11.2% to ¥4,551 million. Data entry operations were sluggish, which led to a decrease in both sales
and profits year on year, and pushed down the segment’s operating income ratio to 10.8%, a year-on-year
decrease of 1.0 percentage points.
3) Financial IT Business
Considers business and IT strategies together and leverages both, and supports business progress using expert
business and operating know-how specific to the finance industry.
Segment sales during fiscal 2024 totaled ¥106,304 million, up 5.1% year on year, and operating income
increased 9.3% to ¥15,185 million. Driven mainly by large development projects by credit card companies andother core clients as well as public-sector financial institutions in the first half of the fiscal year, both sales andprofits increased over the same period of the previous fiscal year, and the operating income ratio rose to 14.3%(up 0.6 percentage points year on year).
4) Industrial IT Business
Considers business and IT strategies together and leverages both, and supports business progress using expert
business and operating know-how specific to industry sectors other than finance.
Segment sales during fiscal 2024 totaled ¥121,896 million, up 7.3% year on year, and operating income
increased 9.3% to ¥18,287 million. Despite a decrease due to the non-recurrence of large-scale development
projects in the manufacturing sector, the trend of expanding IT investments in a wide range of industries,
including manufacturing and distribution, and activities related to enterprise resource planning (ERP) led overall
growth, resulting in a year-on-year increase in sales and profit, and the operating income ratio increased 0.3
percentage points to 15.0%.
5) Regional IT Solutions
Provides IT professional services extensively, across regions and client sites, and collects and develops thisknow-how as the source of solutions to support efforts to address issues and promote business activities.
Segment sales during fiscal 2024 totaled ¥172,376 million, up 7.7% year on year, and operating income
decreased 4.4% to ¥18,497 million. Segment sales increased year on year owing to the trend of expanding IT
investments, mainly by the medical, banking and network businesses. On the other hand, operating income
decreased year on year due to the significant impact of unprofitable projects, resulting in the segment’s
operating income ratio dropping to 10.7%, a year-on-year decrease of 1.4 percentage points.
6) OtherConsists of ancillary businesses offering IT services, and other activities.
Segment sales totaled ¥9,581 million, up 7.0% year on year, and operating income decreased 11.5% to ¥777
million and the operating income ratio was down 1.7 percentage points at 8.1%.
As mentioned above, fiscal 2024 is the last year of the medium-term management plan (2021–2023). The plan
has the five basic policies of “Virtuous cycle of value created jointly with society and employees,” “Improvevalue provided by DX,” “Expand investment to generate strengths,” “Deepen and expand global operations,”-4-and “Diversification of human resources, sharper skills,” and the Group also has the slogan of “Be a DigitalMover 2023.” Based on these, the Group continued to strengthen its focus on Strategic Domains and worked toaccelerate business restructuring, with further enhancing the value provided by digital transformation as the
keystone. Having achieved the key management indicators specified in the plan one year ahead of schedule in
the previous fiscal year, the Group has set the following Group management policies and implemented various
measures during fiscal 2024 with the aim of achieving further sustainable growth and enhancing its corporate
value.
*Note: “Strategic Domains” are the four business domains designated to be built into the corebusinesses of the Group by 2026, as set forth in “Group Vision 2026.”

The status of main initiatives in the five basic policies of the medium-term management plan for fiscal 2024 arepresented below.
1) Virtuous cycle of value created jointly with society and employees
The Company will continue to promote the resolution of social issues through co-creation with stakeholders,further deepen awareness of corporate social responsibility, and strengthen corporate sustainability initiatives,
while developing its management foundation through the sophistication and efficiency of its head office
functions.
As the Company seeks to establish its presence as a leading sustainability company, it has changed thepositioning and composition of the Corporate Sustainability Committee since April 2023. Composed mainly of
all Directors, including External Directors, the committee identifies trends in the practice of sustainability
management, determines the issues to be focused on and the direction of our response through discussion, andsupervises the execution of duties through the Board of Directors, aiming to continuously upgrade thesustainability activities.
As part of efforts to improve management transparency through detailed disclosure, the Company has
published an ESG Data Book that comprehensively summarizes the Group’s overall sustainability management,
ESG initiatives, and related non-financial information.
In accordance with the Basic Policy on Corporate Sustainability, the Group is promoting human rights andenvironmental initiatives, which are of the most important pressing social issues. To address human rights
issues, we have clarified a human rights risk management system that meets the United Nations Guiding
Principles on Business and Human Rights. With regard to environmental issues, recognizing the importance of
reducing emissions of greenhouse gases (hereinafter referred to as “GHG”), which are considered to be a cause-5-

of climate change, the Group raised the targets for reducing GHG emissions (Scope 1 + 2) (Note 1) at its offices
in fiscal 2030 from a 27.5% reduction to a 50% reduction compared with fiscal 2019, while setting targets ofcarbon neutrality of GHG emissions (Scope 1 + 2) in fiscal 2040 and net zero (Note 2) GHG emissions (Scope 1+ 2 + 3) in fiscal 2050. The Company’s targets have been validated by the Science Based Targets initiative(SBTi) (Note 3) as being scientifically in line with the “1.5°C target,” which is an upgrade from the SBTi
validation of the “2°C target” obtained in 2021.
Furthermore, in April 2023, the Company formulated the Multi-Stakeholder Policy to promote appropriate
collaboration and co-creation with diverse stakeholders. We view that proper distribution of earnings andoutcomes generated by value creation and productivity enhancement to multi-stakeholder groups will help
maintain momentum for wage increases and sustainable economic development. Given the importance ofdistribution to employees and respect to business partners, we will continue to engage in our initiatives.
In addition, as part of the Group’s contribution to regional communities, the Group is continuing the corporate
version of hometown tax donations and the projects in cooperation with NPOs in three domains that cannot becovered by its business activities (activities to support future users, activities to spread the benefits of digitaltechnology to society, and activities to mitigate the negative impacts of digital technology on society).
From the perspective of improving the management foundation by upgrading and increasing the efficiency ofhead office functions, the Company expanded the scope of the “G20 Head Office Function Upgrade Project,”which it has been working on for some time. In addition, as part of our efforts to share and further upgrade
indirect business activities, the Company also promoted a shift to shared services and digital transformation of
back-office operations for the whole group through a system centered on TIS Business Service Inc.
Note 1: An aggregation method that serves as an international standard for GHG calculation andaggregation methods. It was stipulated by the GHG Protocol around 2001. Scope 1 is directemissions from the company, Scope 2 is indirect emissions from purchased electricity, and Scope 3
is indirect emissions from other sources, including the value chain
Note 2: Net zero GHG emissions is the condition where anthropogenic GHG emissions and removals arebalanced, with net zero GHG emissions into the atmosphere
Note 3: Targets consistent with reductions required to meet the Paris Agreement targets of the United
Nations Framework Convention on Climate Change based on the latest climate change science2) Improve value provided by DX
The Group will continue to promote co-creation with stakeholders, strengthen digital transformation
consulting functions, and advance IT delivery in order to enhance our vision for transforming society.
As we further strengthen the front line, which is the point of contact with stakeholders, the Group is taking
measures to further strengthen DX consulting functions to formulate strategies and address business issues withthe aim of enhancing value for clients. In addition to active recruitment from outside the Group and internal
training rotation measures for the entire Group based on the DX Strategy Human Resources Conference, theCompany’s unique training programs geared to job types and skills are applied to the entire Group to expand theGroup’s consulting methodology and increase the number of talented DX consultants. The Group is enhancing
the collaboration with Miotsukushi Analytics Co., Ltd., a consolidated subsidiary with strengths in data analysis
and AI consulting, and Fixel Inc., a subsidiary with excellent design consulting capabilities, from a humanresource aspect, as well as a business aspect. Through strategic allocation of management resources, we willcontinue to focus on enhancing our system to provide value to help with customers’ digital transformation.
We have been promoting employees’ work-style reforms with the introduction of a human resource systemthat enables employees to work in a variety of ways as well as the development of office and IT environments.
In addition to them, as work-style reforms with DX, we consolidated the data that had been stored in eachsystem within the Company into one place and built a database to further sophisticate work styles and enhanceoverall performance. Based on the analysis results derived from these pieces of data, we will develop measures
to further sophisticate the work styles of our employees.
The Group continues to focus on digital transformation in three domains. We will aim, from an integrated
perspective, to create a virtuous cycle of new value by treating “social digital transformation” to realize a better
society, “business digital transformation” to innovate our customers’ businesses, and “internal digitaltransformation” to evolve the Group itself, as a single group of steps that strongly influence each other. As partof internal digital transformation efforts, we have released TIS AIChatLab, an in-house dedicated ChatGPT
environment powered by Microsoft’s Azure OpenAI Service environment. In the midst of rapid technologicaldevelopment, the field of generative AI, including ChatGPT, is particularly remarkable for its evolution. We-6-develop an environment where generative AI can be used securely so that all employees can actually use
generative AI, thereby improving operational efficiency and leading to its effective use in business.
In March 2024, the Company and INTEC Inc. entered into a capital and business alliance agreement with
Nippon Life Insurance Company and Nissay Information Technology Co., Ltd. The Group and Nippon LifeGroup have been involved in exchanging personnel and developing systems in the IT field, and this alliance is
set to enhance Nippon Life Group’s IT strategy and DX initiatives to better adapt to changes in the market
environment and the diverse needs of customers.
3) Expand investment to generate strengths
Aiming to enhance our ability to realize business structure transformation, the Company will continue
working to allocate management resources to priority areas such as social issue solution services, as well as
measures to upgrade management.
In the payments domain, which is one of the Group’s strengths, we are developing our business in the overall
settlement area under “PAYCIERGE,” a total brand of retail settlement solutions. The credit card processing
service, which went into service in the second half of the previous fiscal year, is operating steadily, and we arepromoting sales activities to further expand transactions. In addition, the Group is preparing to develop the“Embedded Finance” business and made it possible to embed a full range of settlement services by combining
the front-end settlement functions owned by ULTRA Inc., a consolidated subsidiary, and the Group’s existing
expertise in building settlement back-end functions. Moreover, in collaboration with Sumitomo Mitsui Card
Company, Limited (SMCC), we launched a new payment platform, the SMCC Mobile Payment Package, whichenables businesses to incorporate payment functions into their own applications. Prepared with functions needed
to install payment functions in their apps, this package service allows businesses to select the necessaryfunctions according to their strategies and to install payment functions in their apps at a lower price and in ashorter period of time. Evolving the service so that it can respond to changes in business needs and strategies,
we work to provide businesses with comprehensive support for their cashless initiatives according to their needs
and changes in strategies. In these circumstances, we have formulated a new payment strategy focusing on thefour areas of credit, digital accounts, next-generation payments, and new value creation, in response to themarket environment and trends in customer needs, such as the recent spread of light payment needs. Under the
new strategy, we provide complex services combining products and services, which were previously provided inunits, to promote evolution and expansion of payments. The aim is to reduce barriers to entry into the financial
sector, and develop payments with the theme of social changes to solve social issues. With these efforts, we
continue to contribute to the development of a cashless society.
As various measures for structural transformation are promoted in the medium-term management plan (2021–2023), the Company made Nihon ICS Co., Ltd. (“Nihon ICS”) a consolidated subsidiary in April 2023. The aim
is to accelerate the growth of IT Offering Services (Note 1), one of our Strategic Domains, by welcoming thecompany, which mainly targets tax accountant offices and their corporate clients and is engaged in providing
financial accounting packages and related services. By combining the Company’s business for financial
institutions and Nihon ICS’s business for professionals such as tax accountants, we are working to sophisticate
professional services, enhance financial institutions, and expand our initiatives into new companies. Aiming togrow our client base and realize new business schemes, Nihon ICS has formulated the “Tax Accountant 360
Initiatives” to address the various issues facing tax accountants in the medium- to long-term. We will contributeto the growth of tax accountants and their corporate clients by developing a 360-degree support menu for tax
accountants, while maintaining the main focus on providing existing tax and accounting software. This will beachieved by leveraging digital technologies such as generative AI and strengthening partnerships andcollaborations with companies within and outside the Group. In cooperation with the Company, Nihon ICS has
worked to establish management and operation systems, strengthen and integrate governance, and introduce theCompany’s proprietary quality management system, “Trinity,” among others. We continue to strengthen thelinkage of the Company’s services for the sophistication of professional services and advancement of DX in
corporate clients with expense settlement and the incorporation of financial statements by financial institutions.
We will share our R&D outcomes, collaboration know-how, and cutting-edge technologies to further consider
the possibility of collaboration between the Company’s clients and Nihon ICS, strengthen the development
system, and enhance the management process for better quality. In July 2023, we entered into a capital andbusiness alliance agreement with Financie, Inc., a Web3 platformer, which can realize the token ecosystem in
one go. In order to address the various issues and to meet diverse needs that have emerged during the large-scale-7-

transition from Web2 to Web3, we will leverage the knowledge, experience, and extensive personal connections
held by the Company and Financie, Inc. to develop measures to drive the spread and development of Web3.
Furthermore, as part of the efforts to address “health issues,” one of the social issues that the Group aims tosolve through its business, the Company joined the PHR Service Business Association, which was established inJuly 2023. The aim is “Promoting cooperation among diverse stakeholders and contributing to the extension of
the healthy life expectancy of the people and to the well-being of the people through the development of thePHR (Personal Health Record, Note 2) service industry” and our President became Executive Officer (VicePresident) and Chairperson of the Technical and Education Committee. The Company provides a healthcare
platform that develops health data managed mainly by medical institutions into PHR so that it can be utilized for
health promotion. Utilizing know-how and digital technology, the Group will contribute to the development ofguidelines for data utilization and play a role in promoting standardization as an IT company providing PHR
services, and thereby contributing to the development of the PHR service industry. In addition, as part of ourefforts to expand the network to realize optimal prevention and treatment for individuals using PHR, weinvested in GENEX, Inc., a start-up company that operates a whole genome testing business.
In December 2023, we made RESCHO, INC., a provider of electronic medical records for psychiatrichospitals, a consolidated subsidiary to further expand our healthcare platform. We will leverage our network todevelop a linkage between various industries, centering on the medical industry, and the knowledge andinformation assets that RESCHO, INC. has cultivated in the electronic medical record system market forpsychiatry, and mutually utilize our system personnel and security technology, aiming to promote DX in the
medical, insurance and pharmaceutical sectors, and create new businesses in the mental health care field.
Note 1: A business area in which the Group’s accumulated know-how and broad range of leading-edge
technologies are combined to create and rapidly deploy IT solutions and services that anticipate thefuture needs of our customers
Note 2: Lifetime personal health information (medical examination (screening) information, vaccination
history, drug information, medical test results and other medical-care-related information, andvitals, etc. that individuals measure on a daily basis.)4) Deepen and expand global operations
The Group intends to enhance its global operations and expand the global partnership network by further
deepening markets through strengthening relationships with investee companies and developing joint ventures
based on its business strategy.
Aiming to form an ASEAN Top Class IT Syndicate, the Group is expanding its partnerships through capitaland business alliances with leading companies in each domain, focusing on our three axis: “channels” for local
market expansion, “technology” for new business/service creation and next-generation technology development,
and “consulting” for delivering value chain expansion.
In “channels,” Thailand’s MFEC Public Company Limited is accelerating its investment activities to expand
the Group’s business through Synergy Group Ventures Co., Ltd., which was established as a corporate venture
capital (CVC), and is promoting investments in promising start-up companies in Thailand and collaborations
with the companies invested in.
In “technology,” the Company made minor investments in Atom Computing Inc. and QuEra Computing Inc.,
quantum computer startups in the U.S., with the aim of further expanding leading technologies and services. In
quantum computer technology, for which intensified competition is expected in the future, we will accelerate thecollection of information on cutting-edge technologies and consider long-term cooperation. In addition, byinvesting in and collaborating with Vista Equity Partners Management, LLC in the U.S., which is a company
specialized in investing in enterprise software companies, we seek to provide high-value-added IT services withthe products provided by the company and its group companies and to gain expertise in the success stories of thecompanies it invested in.
In “consulting,” the Company made Vector Management Consulting Pvt. Ltd., a major local management
consulting firm in India, an equity-method affiliate and is now working to develop new global clients. Byleveraging Vector Consulting’s expertise in the domain of management consulting, the Group aims to realize
high-value-added IT services for the clients in India, Japan, the ASEAN region, and China, and promotecollaboration.
The Group will continue to expand its business domain by making maximum use of alliances forged throughstrategic investments, integrating the strengths of each company, and building and strengthening alliances thatcan cover the ASEAN region, aiming to achieve the FY2026 target of ¥100 billion of consolidated net sales in-8-

our global business.
5) Diversification of human resources, sharper skills
Aiming at added value improvement, the Company will continue to invest in human resources, including
reviewing compensation and investing in education, so that diverse employees can be engaged and thrive as
professionals.
The Company is promoting initiatives such as creating an environment and organizational culture where
diverse individuals can thrive, promoting next-generation work-style reforms looking towards a new work
environment, advancing human resource portfolio management by digitalizing our human resources database,and supporting engagement with employees and autonomous career development through the full-scale
operation of HR business partners. Also, to further accelerate structural transformation, the Company is striving
to strategically secure and foster advanced human resources in areas such as consulting, global business, andservice business and to place human resources optimally.
To achieve structural transformation toward the realization of Group Vision 2026, the Group is focusing on
increasing added value through the growth of human resources, which is the most important management capitalin order to carry this forward. For some time, the Company has been promoting investment in human resources
to increase employee engagement based on the three axes of the meaning of work, the working environment,
and compensation. In order to further promote the reform of the meaning of work and compensation, theCompany introduced a new personnel system in April 2023 that completely revamps the compensation,
evaluation, grading, and other systems. Under the compensation system, the Company prioritizes investments inhigh-level personnel and young employees who drive the business forward, with base salary increases of up to
17% and an average increase of 6%, and the whole Group is working to improve compensation. As a result,personnel expenses increased approximately ¥5.2 billion in fiscal 2024 compared with the previous year, but
this is positioned as an upfront investment in human capital, which is essential for the sustainable growth of theGroup. By continuing to implement these measures and enhancing employee engagement, the Company aims toaccelerate corporate growth and increase added value by enhancing corporate competitiveness through thegrowth of human resources by encouraging employees to actively think and move, and to achieve higher
performance than expected.
In addition, under the Group Diversity and Inclusion Policy, the Group is promoting measures to achieve“physical and mental health,” “enhanced job satisfaction,” and “improved life skills,” aiming to improve thequality of life of each and every employee working in the Group. Amid such circumstances, in order to achieveadvanced health and productivity management, greater productivity and engagement of employees, andenhanced value exchange with society, the Company and INTEC Inc. joined, in July 2023, the Health andProductivity Management Alliance. This is a group of 148 companies and organizations (as of June 30, 2023)
that share the vision of “revitalizing Japanese companies and realizing the sustainability of employees’ healthinsurance system through the enhancement of employees’ health condition.” With the progress of healthmanagement initiatives, the number of Group companies certified as a Health and Productivity Management
Outstanding Organization by the Ministry of Economy, Trade and Industry and the Nippon Kenko Kaigi (Japan
Health Council) has increased, bringing the total number of companies certified as 2024 Health and Productivity
Management Outstanding Organization to six. The Company and INTEC Inc. were also certified as 2024 Healthand Productivity Management Outstanding Organization (White 500). In addition, as a result of our continuous
promotion of various measures for “enhanced job satisfaction” by analyzing the results of the awareness survey
and employee feedback, the Company was selected as a “Great Place to Work Certified Company” by the Great
Place to Work® Institute Japan in its “Great Place to Work” survey conducted in December 2023.
Group-wide proactive investments will continue to be made to increase the value of human resources, andcreate a virtuous cycle of high added value for the Company, our employees, and society, aiming for therealization of further growth of the Group and improved corporate value, thereby creating a more prosperous
society.
In addition, from May to July 2023, the Company acquired treasury stock of ¥6,199 million (total of
1,678,900 shares) in total based on its basic policy for shareholder returns, which targets a total return ratio of
45%, as part of its efforts to enhance shareholder returns and capital efficiency by implementing flexible capital
policies that can swiftly respond to changes in the business environment. The Company also acquired ¥22,422
million (6,766,000 shares) of treasury shares through an off-auction trading of own shares (ToSTNeT-3) in-9-February 2024, in light of the intention of several of our corporate shareholders to sell their shares, and in orderto reduce the impact of such sales on the near-term supply and demand for our shares and our existing
shareholders. Taking into account the Company’s general rule of holding up to 5% of the number of issued
shares and retiring any holdings exceeding 5% of the number of issued shares, as well as the need to addressconcerns about future share dilution, the Company retired 8,212,000 shares of treasury stock (3.4% of the total
number of issued shares before retirement), almost all of which it held, including the aforementioned
acquisition, on March 2024.
(2) Analysis of Financial Condition(Unit: millions of yen)

Current assets
Fixed assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Total net assets

As of March 31, 2023
(A)

As of March 31, 2024
(B)

268,682
193,637
462,320
117,179
35,914
153,094309,226

291,556
233,899
525,456
140,277
60,453200,730
324,725

Increase/decrease(B − A)+22,873+40,261+63,135+23,098+24,538+47,636+15,498(Assets)
Consolidated total assets as of March 31, 2024 amounted to ¥525,456 million, an increase of ¥63,135 million
from ¥462,320 million at the end of the previous fiscal year. This was mainly due to an increase of ¥12,653
million in notes and accounts receivable and contract assets, a ¥30,202 million increase in goodwill and otherintangible fixed assets arising mainly from the acquisition of Nihon ICS Co., Ltd. and RESCHO, INC. shares(making them consolidated subsidiaries), a ¥6,842 million increase in buildings and structures and land resulting
from the split acquisition of beneficial interests in real estate trust for the purpose of ensuring long-term stablebusiness continuity in the system management business, and a ¥3,597 million increase in investment securities
due to changes in the market value of shares held.
(Liabilities)
As of March 31, 2024, total liabilities amounted to ¥200,730 million, a ¥47,636 million increase from ¥153,094
million at the end of the previous fiscal year. This was mainly due to a ¥21,863 million increase in borrowings
arising mainly from M&As and the split acquisition of beneficial interests in real estate trust and an ¥8,162
million increase in deferred tax liabilities resulting mainly from the acquisition of Nihon ICS Co., Ltd. and
RESCHO, INC. shares (making them consolidated subsidiaries), despite a ¥4,330 million decrease in income tax
payable following the payment.
(Net assets)
Consolidated net assets amounted to ¥324,725 million, an increase of ¥15,498 million from ¥309,226 million at
the end of the previous fiscal year. The increase primarily consisted of a ¥36,269 million increase in retained
earnings, a ¥3,815 million increase in net unrealized gains on other securities due to changes in the market valueof shares held, and a ¥28,155 million decrease in additional paid-in capital due to the retirement of treasury stock
after its acquisition.
The increase in retained earnings resulted from a ¥48,873 million increase of net income attributable to ownersof the parent company and a decrease of ¥12,604 million due to dividend of surplus.

-10-(3) Analysis of Cash Flows
Cash and cash equivalents (“cash”) totaled ¥102,722 million as of March 31, 2024, up ¥8,415 million from March
31, 2023.
Contributions to cash flow were as follows.
(Cash flow from operating activities)
Operating activities generated net cash of ¥62,578 million. This mainly reflects income before income taxesof ¥69,193 million and the positive cash flow effect of ¥17,340 million in depreciation and an increase in othercurrent liabilities of ¥12,956 million. These inflows were partially offset by the negative cash flow effect of¥23,636 million in income taxes paid and increase in receivables and contract assets of ¥10,568 million, etc.
(Cash flow from investing activities)
Financing activities used net cash of ¥32,817 million. An inflow of ¥6,995 million in proceeds from sale andredemption of marketable securities was offset by outflows of ¥20,724 million for purchase of shares ofsubsidiaries resulting in a change in the scope of consolidation, ¥13,081 million for acquisitions of property andequipment and ¥5,850 million for acquisitions of intangible assets.
(Cash flow from financing activities)
Financing activities used net cash of ¥21,889 million. A cash inflow of ¥23,159 million in proceeds fromlong-term debt was offset by outflows such as ¥34,585 million for purchase of treasury stock, and ¥12,604
million for dividends paid.
(Reference) Cash flow indicators
Fiscal 2023

Fiscal 2024

Equity ratio (%)

64.2

59.5

Equity ratio based on market capitalization (%)

182.7

146.7

Ratio of interest-bearing debt to cash flow (years)

0.5

0.6

140.4

166.9

Interest-coverage ratio (times)

Equity ratio: Total equity / Total assets
Equity ratio based on market capitalization: Market capitalization / Total assets
Ratio of interest-bearing debt to cash flow: Interest-bearing debt / Cash flow
Interest-coverage ratio: Cash flow / Interest paid
Note 1: All indicators were calculated using consolidated financial statement data.
Note 2: Market capitalization is based on the number of shares issued and outstanding, excluding treasury
stock. Treasury shares deducted from the number of shares issued to determine number of shares used
to calculate market capitalization include the Company’s shares held by TIS INTEC Group Employees’
Shareholding Association Trust and the Board Incentive Plan (BIP) Trust.
Note 3: Cash flow from operating activities is used as the cash flow variable.
Note 4: Interest-bearing debt does not include lease obligations.

-11-(4) Outlook for Fiscal 2025
In the business environment surrounding the Group, as the elements required of companies, including solutions tosocial issues, become more diverse, activities to transform business processes utilizing digital technologies andbusiness model transformation are expanding more than ever, and IT investment demand is expected to increase
further. However, the Group must pay close attention to the risk of downward pressure on the Japanese economy
due to a downturn in overseas economies caused by global monetary tightening and other factors.
Under these circumstances, we have created the new “Group Vision 2032” as a management policy from a longterm perspective based on the current situation in the face of drastic changes both inside and outside the Group andformulated the medium-term management plan (2024–2026) as the first stage toward achieving the “Group Vision
2032.” In the plan, we set frontier development as a fundamental strategy and strive for sustainable growthparalleling higher added value. We will strive to achieve changes in society and for corporate clients by enhancing
quality across all value chains, starting with forward-looking market development and business domain expansion.
*Note: For details of “Group Vision 2032” and the medium-term management pan (2024–2026), please refer tothe “Notice regarding the Group Vision 2032 and New Medium-Term Management Plan (2024–2026)”
dated May 8, 2024, and other documents.
In the fiscal year ending March 31, 2025, the first year of the medium-term management plan (2024–2026), theGroup will vigorously implement measures to achieve sustainable, value-added growth by setting the following
group management policies in line with the basic policies of the plan.
<Group Management Policies for Fiscal 2025>

The consolidated earnings forecast for fiscal 2025 is as follows. Under the fundamental strategy “frontierdevelopment” of the medium-term management plan (2024–2026), we will provide high-added-value businesses
and promote productivity enhancement measures, etc., while continuing to expand business by accurately
responding to customers’ demand for digital transformation. Through these measures, we aim to achieve sustainablegrowth and further improve profitability, even as we face the impact of passing the peak of large-scale development
projects that have driven our business growth in recent years and the prospect of extensive investments that willcontribute to future growth, including upfront investments in human resources, our most crucial management
capital. Note that the decrease in recurring profit and net income attributable to owners of the parent company is
due to non-operating income and extraordinary income recorded in fiscal 2024.

-12-

<Consolidated earnings forecast for fiscal 2025 (April 1, 2024 – March 31, 2025)>(Unit: millions of yen)
Fiscal 2024

Fiscal 2025

Actual results

Forecast

Year-on-year change

Net sales

549,004

555,000+1.1%

Cost of sales

397,365

396,000-0.3%

Gross profit

151,639

159,000+4.9%

Gross profit ratio
Selling, general andadministrative expenses
Operating income

27.6%

28.6%

+1.0P

87,07092,500+6.2%

64,56866,500+3.0%

Operating income ratio

11.8%

12.0%

+0.2P

Recurring profit

68,553

66,500-3.0%

Net income attributable toowners of the parent company

48,87344,800-8.3%<Analysis of key factors in the increase/decrease in operating income (forecast, year-on-year change)>-13-

<By segment>(Unit: millions of yen)

Offering Service
Business

BPM

Financial IT
Business

Industrial IT
Business

Regional IT
Solutions

Other

Fiscal 2024

Fiscal 2025

Actual results

Forecast

Year-on-year change

130,759

140,800+7.7%

Operating income

7,659

8,600

+12.3%

Operating income ratio

5.9%

6.1%

+0.2P

Net sales

41,95343,000+2.5%

Net sales

Operating income

4,551

4,500

-1.1%

Operating income ratio

10.8%

10.5%

-0.3P

Net sales

106,304

98,500-7.3%

Operating income

15,18512,000-21.0%

Operating income ratio

14.3%

12.2%

-2.1P

Net sales

121,896

125,500+3.0%

Operating income

18,287

19,600+7.2%

Operating income ratio

15.0%

15.6%

+0.6P

Net sales

172,376

171,000-0.8%

Operating income

18,49721,500+16.2%

Operating income ratio

10.7%

12.6%

+1.9P

Net sales

9,581

10,000+4.4%

Operating income

777

700

-10.0%

Operating income ratio

8.1%

7.0%

-1.1P

(5) Basic Policy on Profit Distribution and Dividends for Fiscal 2024 and Fiscal 2025
1) Policy on determining dividends from surplus, etc.
The Company regards the return of profits to shareholders as a key management decision and has adopted abasic policy of maintaining sufficient internal reserves required for business growth from a medium- to longterm management perspective, while continually paying a stable dividend in consideration of its consolidated
financial results.
Based on this policy, the Company seeks in the medium-term management plan (2021–2023) to raise the target
total return ratio from 40% to 45% and to continuously enhance the dividend per share based on a balance
between promoting growth investments, securing financial soundness, and strengthening shareholder returns.
Note that in order to increase the distribution of profits to shareholders in accordance with business growth in asustained manner, the Company believes it is desirable to base shareholder returns on profits derived fromoperating activities, as they are not affected by one-time gains or losses.
2) Fiscal 2024 dividends from retained earnings
With regard to the distribution of retained earnings for fiscal 2024, as the results for the fiscal year exceeded
targets, the Company intends to pay a year- end dividend of ¥39 per share, ¥3 more than planned. As a result,the annual dividend for fiscal 2024, including the interim dividend, will be ¥56. Including the approximately¥6.2 billion buyback of shares of the Company (excluding the ¥22.4 billion buyback of shares in response to theintention of corporate shareholders to sell their shares), the total shareholder return ratio for fiscal 2024 will
come to 39.9%, while the total return ratio calculated based on the above policy will be 44.9%, which accords
with the basic policy.
3) Fiscal 2025 dividends from retained earnings
In the medium-term management plan (2024–2026), the Company seeks to raise the target total return ratio to
50% from 45%, aiming to improve shareholder engagement. Based on this policy, the Company plans to pay anannual dividend of ¥68 per share for fiscal 2025 (including an interim dividend of ¥34 per share) and torepurchase approximately ¥6.5 billion of its own shares. The Company will change the ratio of interim to yearend dividends to 1:1 beginning in fiscal 2025, based on the balance of earnings, the source of dividends, that are
generated between the first and second half of the fiscal year.

-14-(6) Business and Other Risks
The following are the main risks deemed to have the potential to have a significant impact on the business results,financial condition, and cash flow (hereinafter referred to collectively as “business results, etc.”) of the TIS INTECGroup. The Group defines “risk” as “any factor that may hinder the achievement of the management philosophy,
goals, and strategies of the Company and the Group by causing economic loss; the interruption, stagnation, or
suspension of business operations; and/or damage to the Company’s credit or brand image.” In addition, the Groupwide risks are classified into strategic risks, financial risks, hazard risks, and operational risks according to theGroup’s rules on risk management.
Using the Group’s risk management evaluation method, all risks are comprehensively evaluated from theviewpoint of occurrence frequency and degree of damage caused. However, the nature and degree of the impactthat each risk will have on the Company’s business results, etc. will vary depending on the nature of each risk
event, the likelihood that the risk will emerge, and the timing of that emergence. Since more specific explanationsof each risk are difficult, detailed descriptions of the potential damage to the Company’s business results, etc. havebeen omitted.
Note that all forward-looking statements in this document are based on information available to the Group as of
May 8, 2024.
The Group has established rules for risk management to ensure an accurate understanding of the risks facing theGroup and prevent losses from occurring. In accordance with these rules, we have appointed an executive tooversee risk management of the entire Group. Also, a risk management department has been established to preparea risk management system. In addition, we have established a risk management policy for the entire group andregularly check the implementation status of measures to control risk. When a group company becomes exposed toa serious risk, a task force is set up and appropriate measures are taken to minimize damage.
As for the status of the risk management system, we will promote various measures to maintain and improveGroup-wide internal controls according to a basic policy and various regulations regarding the internal control
system and monitor the development of internal control system and operation status and establish the process ofreporting deliberation results to the Board of Directors upon deliberation at Group Internal Control Committee.
<Risk Assessment Process>
Both the risk policies (top risk direction and major risks) prepared by the president of each group company basedon the Group’s priority risks as well as the risks identified by each division are evaluated. The Group Internal
Control Committee examines the risks faced by the Group twice a year, confirming issues related to those risks andevaluating the status of improvement measures, and these matters are reported to the Board of Directors. Based on
its reports to the Board of Directors, initiatives are implemented to strengthen and improve the Group-wide internal
control system.

-15-

<Risk Management Process>1) Strategic risksa. Human resources
Human resources are the Group’s most important management resource, and its business activities are
significantly influenced by its ability to secure and develop superior individuals capable of providing
specialized, high-value-added services to clients. The Group’s business and operating results, etc., may
therefore be negatively affected if the Group cannot secure and develop superior human resources according to
its plans. To this end, the Group has visualized its human resources portfolio based on the current situation, andis strengthening investment to acquire and grow specific personnel who will drive structural transformation
toward the realization of its business and business strategies, as well as focused human resources that need to becontinuously strengthened in each business area. In order to enhance the effectiveness of human resources
strategies tailored to the business, we share business and organizational issues with top management and arestrengthening our “HR business partner function”, which supports the acquisition, development, placement,
organizational climate reform, and realization of business strategies on the job site in line with the businessenvironment and issues, while promoting the “development of the HRDX platform”, which monitors andanalyzes the execution status and support its implementation. The Group therefore, with the aim of enhancing
work-style reform and job satisfaction, strives to secure talented human resources by means such as providing a
corporate culture, HR systems, and an office environment in which a diverse group of people can thrive.
Additionally, the Group focuses on human resources training by means such as providing support for acquiringcertifications, career development support, systemizing its training program, and creating plans and targets forthe number of training days.
b. Changes in the market and economy
As the Group’s business domain changes and society changes, the technologies and services required bysociety are expected to change significantly. As a result, there is a risk that the Group’s technology and services
may become obsolete due to delays in identifying the technology seeds that will be required in the future,
resulting in a decline in competitiveness. With these changes, the Group’s business and operating results, etc.,
may be negatively affected if technological competitive advantage is lost due to price competition beyond
expectations and the Group becomes unable to provide the high-quality services that customers have come to
expect because of a failure to take appropriate measures or allowing technologies and know-how to become
obsolete.
The Group continues to analyze the environment in its management plans to understand market needs,
differentiate the Group from competitors by adding more value to the services the Group provides, constantly
conducting investigation and research in areas such as information technologies as well as production and-16-

development technologies, selecting from a broad technology portfolio of core technologies that will enable theGroup to sustain and improve its development competitiveness. Likewise, it is advancing R&D and deploying
the results, while carrying out productivity innovation activities and enhancing the digital transformation value
it provides, as well as controlling unprofitable projects and productivity innovation activities.
Furthermore, if the Japanese yen depreciates sharply due to economic fluctuations, business performance is
expected to deteriorate due to foreign exchange losses. To manage this risk, the Company hedges foreign
currency exposures, particularly for large transactions, taking into account volatility and hedging costs.
c. Investments
The Group invests in companies in Japan and overseas, including venture companies, to establish capital andbusiness alliances mainly for the purpose of expanding business, acquiring cutting-edge technologies, andexecuting mergers and acquisitions. It also makes investments in large IT facilities, such as data centers
operating 24 hours a day, 365 days a year, which support the deployment of outsourcing and cloud service
businesses (including continued capital investments to fund initial construction and the stable operation ofexisting facilities), software needed to promote service-based business, and human capital. Unanticipatedchanges in the business environment may result in investments failing to yield the expected result or return or
make assets obsolete, thereby impacting the Group’s business and operating results, etc. In addition, any
potential misconduct or system failures by a corporate counterparty immediately after an investment or M&A
transaction may result in a loss of credibility and brand image of the Group, lawsuits, and other repercussions.
Accordingly, all investment decisions are made after thorough examination of the business plan by either the
Board of Directors, the CVC Investment Committee, or the Investment Committee, depending on theinvestment project, and the progress of the business plan is periodically confirmed after investments have beenmade. In addition, for companies with which we have entered into large-scale capital tie-ups or mergers andacquisitions, we continuously implement necessary measures based on prior verification and examination of therisks involved in their business activities, and dispatch executives to them so that we can quickly ascertain theirstatus.
d. Overseas business
Overseas business may be impacted by various factors, including global economic and foreign exchange
trends, legal regulations on investment and competition, local business practices, and labor-management
relations. If one of these factors manifests itself in an unanticipated manner, it may impact the Group’s businessand operating results, etc.
As part of its growth strategy, the Group is pursuing capital and business alliances as well as M&A with local
companies in order to achieve expansion of overseas businesses, with a focus on ASEAN countries. In making
such investments, the Company conducts detailed investigations on the business performance and financial
position of the target company, and after the investment, business promotion and corporate planning business
units work together to conduct monitoring and report periodically to the Board of Directors.
Additionally, the Company is dispatching personnel to operating companies, and promoting efforts tostrengthen the governance of overseas subsidiaries and affiliates led by the Global Financial Planning Office, a
dedicated body established within the Company.
e. Human rights
The Group’s business activities may have a direct or indirect negative impact on certain stakeholders. The
occurrence and disclosure of such events could result in damaging the reputation and credibility of the Group,and could affect the Group’s business and operating results, etc.
The Group’s human rights policy is based on the “Guiding Principles on Business and Human Rights” adopted
by the United Nations Human Rights Council in June 2011. Furthermore, by promoting human rights due
diligence in line with this policy, the Group will take appropriate measures to identify and correct any negative
impacts of the Group’s business activities on society at an early stage. The progress of these efforts will beappropriately disclosed on the Company’s website, etc.
f. Geopolitical risks
Newly emerging international pressures, exchange rate trends, trade issues, or effects on procurement costs
due to warfare, civil strife, political upheaval, revolution, terrorism, rioting, etc., may impact the Group’s-17-business and operating results.
When such events occur, the Group will promptly ascertain the impact on the Group and quickly engage inactivities to prevent losses due to each risk. In addition, the Group has developed a Business Continuity Plan
(BCP) that includes crisis response for expatriates and what to do when offshore transactions are interrupted.
g. Reputational risk
If risks are not properly managed and have a negative impact on society, or if the Company is recalled to be
associated with any negative impact that other companies have had on society, the Company’s business may beinterrupted, stagnate, or be suspended due to loss of credibility and brand image, or it may potentially losecustomers or business partners. The Company believes that this risk increases particularly in proportion to the
expansion of the Company’s business and the increase in its name recognition, and that if the Company fails tomanage the risk promptly, even an incident that occurs at a subsidiary of the Group could spread to the entire
group. Therefore, in order to respond promptly to this risk, the Group has established a cross-group escalation
system and prepared a response manual in the event of a crisis.
2) Financial risksa. Owned securities
The Group buys and holds the equity shares of suppliers and other business partners in cases where it deems
such investments will enable it to establish stable alliances and cooperative relations that lead to new business
opportunities and will support the sustainable growth of the Group and enhance its medium- and long-term
corporate value. The Group also invests in bonds as part of its short-term surplus fund management operations.
However, the Group’s business and operating results, etc. may be impacted if sharp fluctuations in the market
prices of these marketable securities or deterioration in management conditions of issuing entities requires theposting of accounting losses or other similar measures.
Accordingly, the Group carefully confirms the reliability of these securities by thoroughly examining issuers’
financial condition, business results trends, credit ratings, and other relevant indicators. In addition, the Groupregularly reviews the suitability of continuing to hold the securities and reduces them if continued holding isdeemed to lack meaningfulness.
3) Hazard risks
a. Pandemics (the global spread of infectious and communicable diseases)
Restrictions on activities both domestic and foreign due to a pandemic will affect the Group’s business andoperating results, etc., if it sharply constricts the productive activities of our employees and those of ourbusiness partners.
For this reason, the Group has formulated a BCP for a potential pandemic outbreak.
b. Natural disasters and accidents
As the likelihood of natural disasters, including floods, occurring in unconventional locations and frequencies
is increasing due to global warming, large-scale natural disasters and the accompanying longer-than-expected
power outages could affect outsourcing and cloud services businesses, which use large-scale IT facilities suchas data centers which the Group operates.
In accordance with the Group’s business continuity plan therefore, the Group is preparing various equipment
environments that will facilitate data centers’ response to all manner of disasters. In addition, the Group has
been gradually closing older data centers and focusing on the development of state-of-the-art data centers withseismic-isolation structures, robust disaster-mitigation equipment, emergency power generators, fuel storage
equipment, and other highly reliable electric power equipment as well as contracts for prioritized power supply.
In addition, the Group will establish a basic IT-BCP and continue to conduct operational inspections andimplement preventive measures against the recurrence of system failures.
4) Operational risks
a. System development
Outsourced development and maintenance of various information systems for client companies is one of theGroup’s core businesses. As system development becomes more sophisticated, complex, and subject to tighter
time constraints, larger-than-expected costs may be incurred if additional work is required to secure the planned-18-

level of quality or if a project cannot be completed on schedule. These increased costs and the possibility ofclaims for damages from clients, etc., could impact the Group’s business and operating results, etc.
The Group has therefore developed its own original “Trinity” quality management system based on the ISO
9001 standard. Using this system, the Group is continually enhancing quality management and raisingproductivity by using dedicated organizations to thoroughly screen business proposals and review projects ateach stage of development. In addition, the Group has established the Group Quality Executive Meeting to leadefforts to improve quality and promote production innovation measures throughout the Group while alsoenhancing management and technological capabilities by strengthening training programs for each employee
rank. The Group continues to update its proprietary quality management system, “Trinity,” to keep pace withthe latest trends.
Meanwhile, some system development tasks are being outsourced to domestic and overseas business partners
for reasons such as securing production capacity, raising productivity, and utilizing technical capabilities. If the
productivity or quality do not meet expectations, smooth project management may not be realized and theGroup’s business and operating results, etc., may be impacted.
The Group therefore seeks to secure superior business partners in Japan and overseas. That effort includes
regular meetings with and questionnaire surveys of our partners so that we fully understand their situation andare able to build strong relationships.
b. System operation
The Group uses data centers and other large IT facilities to provide its outsourcing business and cloud services
business. If system problems arise due to human error or equipment malfunctions during system operation and
the Group is unable to provide services at the level agreed upon with the client, the Group’s business andoperating results, etc., may be impacted.
The Group has therefore developed a system maintenance/operation framework based on ITIL (Information
Technology Infrastructure Library) practices and is using this framework to direct constant efforts to improvesystem operation quality and to establish and strengthen measures for early detection and confirmation ofsystem failures and measures to reduce and prevent the occurrence of failures.
c. Information security
Through its wide-ranging business activities, from system development to operation, the Group is in a position
to handle various types of confidential information, including personal information held by clients andinformation about their systems’ technologies, etc. of the clients. If such confidential information were to be
leaked or manipulated, the Group’s business and operating results, etc., could be impacted by claims fordamages from client companies and by a loss of trust in the Group’s services. And with the Internet having
become part of the social infrastructure and various forms of information easily spreading in an instant, therange of users has expanded and convenience increased. However, the risk of accidents and system failures due
to unauthorized external access is increasing. If the Group fails to respond appropriately to such a situation, its
business and operating results, etc., could be impacted by claims for damages from clients and by a loss of trustin the Group’s services.
The Group has therefore established an information management system based on its Information Security
Policy. The system is contributing to appropriate information management while also assisting our efforts toraise awareness through employee education and training programs. In addition, the Group applies the Group’s
information security promotion guidelines to guide its checks and evaluations of the levels of information
security management across the entire group, as well as subsequent promotion of improvement measures. Whenan information security breach does occur, the Group takes responsibility and establishes an investigative
committee to look into the cause, implement countermeasures, and prevent recurrence. In the current fiscal year,
we consolidated planning functions related to information security and personal information protection into TIS
to improve operational efficiency. Regarding the personal information the Group handles, we have established agroup-wide information management system based on Japan’s Act on the Protection of Personal Information
and regulations on the handling of Individual Numbers and information about specific individuals. The Groupalso takes the necessary security control measures through periodic compliance checks with the Act on theProtection of Personal Information. In addition, the Group is also conducting education and training programsfor employees to thoroughly raise their awareness of the importance of protecting personal information. And theGroup is implementing security measures using a zero-trust security model to address the diversification of-19-

workplaces with the full-scale implementation of working from home. Furthermore, TIS and other Group
companies have obtained Information Security Management System (ISMS) certification and the JIPDEC’s
PrivacyMark.
Additionally, the Group has defined a group-wide CSIRT (Computer Security Incident Response Team)system to respond to cyber attacks and share information at the Group Security Promotion Meeting, and also
operates “TIS-CSIRT” as an in-house CSIRT for early detection of incidents and quick and accurate emergency
response. In addition, the Group collects, analyzes, and disseminates a wide range of security-related
information, including the latest attack methods and incidents, and also monitors communications, responds toemergencies, and coordinates with external parties.
d. Legal systems, compliance
The Group conducts its various business activities in compliance with laws and regulations in Japan and othercountries. If the Group were to contravene a law or regulation, or a new law or regulation were introduced, theGroup’s business and operating results, etc., could be affected. In addition, in the event of discrimination orharassment, should there be a reduction in productivity, an increase in costs, and/or a decline in employee
engagement, the Group’s business and operating results, etc., may be affected.
The Group therefore has established a compliance structure based on its Basic Direction on Corporate
Sustainability and Group Compliance Declaration, and it works to educate all employees regardless of
employment status and comply with all laws in an endeavor to conduct its business activities fairly. In
accordance with the Group’s compliance regulations, important compliance issues for the entire Group are
discussed, measures to prevent recurrence are decided, and the status of the implementation of these measures isthen monitored in an effort to ensure their adoption throughout the Group. One such measure is the tighteningof regulations on contracted work and temporary staffing, an important issue for the Group because of thetransactional nature of the IT service industry. The Group has established a dedicated risk management systemand has also developed an “Operation Manual for Proper Contracted Work and Temporary Staffing” to ensure
appropriate operation of the system. In addition, to prevent illegal activities and detect and correct them at an
early stage, the Group has introduced a whistle-blowing system and established a reporting and consultation
desk, thereby raising awareness of legal compliance throughout the Group. Furthermore, the Group will conduct
education and awareness-raising activities aimed at building good relationships and establishing smoothcommunication in order to help prevent discrimination and harassment, and will take fair and strict measures inthe event that such incidents should occur.
e. Intellectual property rights
The Group’s business activities entail the use of technologies, licenses, business models and various
trademarks that may be subject to intellectual property rights. Accordingly, the Group takes great care to ensurethat it does not infringe the intellectual property rights of third parties. Nonetheless, if the Group were to
infringe another company’s intellectual property rights, it could be presented with an injunction and a claim fordamages. In such a case, the Group’s business and operating results, etc., could be impacted. To prevent such an
event, the Group is strengthening its framework for preventing violations of intellectual property rights and isconducting education and training programs to raise employees’ awareness of this issue. Meanwhile, the Groupalso regards its own intellectual property as an important management resource and takes all necessary means toprotect this valuable resource.
f. Climate change
In response to climate change, companies are gradually becoming more committed to, and responsible for,both mitigation involving reducing greenhouse gas emissions and adaptation involving reducing the adverse
effects of climate change, and as a result, there is a growing demand to promote the use of renewable energy inbusiness and corporate activities. Therefore, if the Group’s energy costs are significantly impacted byfluctuations in demand for renewable energy, or if the Group’s transition to renewable energy is delayed, theGroup’s business and operating results, etc., may be affected.
The Group has therefore endorsed the recommendations of the Task Force on Climate-related Financial
Disclosures (TCFD), carries out continuous assessments in accordance with the TCFD recommendations
framework, and discloses the results to the public to explain our efforts to help mitigate climate change.

-20-

2. Status of the GroupThe Group consists primarily of TIS Inc. (the parent company), 51 consolidated subsidiaries, and 59 affiliatedcompanies accounted for under the equity method. The Group’s core activities comprise the provision ofoutsourcing and cloud services, software development, and solution services, all of which are related todigitalization investment. The Group also engages in businesses connected with these core activities, such as
consulting services. The Group also provides other incidental and related business, such as management services.
The following is a breakdown of the Group’s businesses and the positioning of consolidated subsidiaries andequity method affiliates in relation to these businesses by reportable segment. The Company plays the central rolein the Offering Service Business, Financial IT Business, and Industrial IT Business segments.
(1) Offering Service Business
Configures services through own investment based on best practices accumulated Group-wide and provides
knowledge-intensive IT services.
(Main consolidated subsidiaries)
TIS System Service Inc., Nihon ICS Co., Ltd., MFEC Public Company Limited(2) BPM
Addresses issues related to business processes with IT technology, business know-how and skilled humanresources to provide more sophisticated, more efficient outsourcing services.
(Main consolidated subsidiaries)
AGREX Inc.
(3) Financial IT Business
Considers business and IT strategies together and leverages both, and supports business progress using expert
business and operating know-how specific to the finance industry.
(4) Industrial IT Business
Considers business and IT strategies together and leverages both, and supports business progress using expert
business and operating know-how specific to industry sectors other than finance.
(Main consolidated subsidiaries)
Qualica Inc., AJS Inc.
(5) Regional IT Solutions
Provides IT professional services extensively, across regions and client sites, and collects and develops thisknow-how as the source of solutions to support efforts to address issues and promote business activities.
(Main consolidated subsidiaries)
INTEC Inc., TIS Solution Link Inc.
(6) OtherConsists of ancillary businesses offering IT services, and other activities.
(Main consolidated subsidiaries)
TIS Business Service Inc., Sorun Pure Inc.

-21-

The segments mentioned above are shown in the following chart-22-3. Management Policy(1) Basic Management Policy“OUR PHILOSOPHY,” established by the Group, is a basic Group philosophy outlining the common values.
“OUR PHILOSOPHY” clearly and broadly delineates the thinking and ideals that the TIS INTEC Group highly
values in its group’s management, corporate activities, and constituent members, and serves as the axis of allactivities.
The Group aims to contribute to a sustainable society and continuously increase its corporate value by executing
sustainability management based on the Group’s basic philosophy “OUR PHILOSOPHY,” solving social issues
through its business activities, and enhancing value exchange with stakeholders through management sophisticationin response to social demands.
In addition, we have formulated a Group Vision that outlines our aspirations for the next 10 years so that all
members of the Group can work together to realize our ideals and sustainably increase our corporate value. In April
2024, we created the latest version of our Group Vision, “Group Vision 2032,” in light of changes both inside andoutside the Group.
(OUR PHILOSOPHY: The Group’s basic philosophy)

https://www.tis.co.jp/company/policy/philosophy/(Group Vision 2032: Long-term management policy)
With the theme of “Society oriented, operationally diverse, globally active,” the Company strives to become aprogressive global IT group that is both socially conscious and innovative. To solve social problems, we willachieve business innovation and market creation by diversifying and globalizing our business while actively
adopting innovative technologies and integrating capabilities from various industries.
The Group defined its unique business activity areas for sustainable growth as Strategic Domains and seeks to
explore and create markets through each segment, with the best mix of Strategic Domains based on market
characteristics.

-23-

<Strategic domains>
Social Innovation Services
Co-Creation Business
Strategic Partnership
Business
IT & Business Offering
Services

A business in which the Group is directly involved in solving social problems with theuse of social impact indicators
A business that combines the strengths of the Group and its co-creation partners to create
new markets in areas that the Group could not achieve alone
A business in which the Group will jointly plan and promote business strategies withworld-class companies in their respective industries by leveraging our industry insightand unmatched expertise, playing a central role in their business as their partners
A business that provides services that anticipate industry needs in specific industries andoperations and that can establish de facto standards in the future through the use ofaccumulated technology and know-how(2) Medium-Term Management Plan (2021–2023) Review
In Japan and overseas, clients’ strong appetite for IT investment, backed by DX demand and other factors, createda favorable business environment for the Group.
Under these circumstances, the Group has positioned its three-year medium-term management plan (2021–2023),
which ends in the current fiscal year, as a period of upgrading the value chain by increasing the value provided bydigital transformation, and has sought to solve social issues through the Group’s growth by promoting further
structural transformation. In the medium-term management plan (2021–2023), we set key business indicators fromthe perspective of sustainably increasing corporate value by improving business growth and profitability throughstructural transformation into the four Strategic Domains. We largely achieved these indicators, namely, “net salesof ¥500 billion,” “operating income (operating income ratio) of ¥58 billion (11.6%),” “EPS (net income per share)
CAGR of more than 10%,” “strategic domain ratio of 60%,” and “societal issue solution service business net salesof ¥50 billion.”
Moreover, we have set a target for return on shareholders’ equity (ROE) of 12.5% to 13% in our medium-term
management plan (2021–2023), driven by the improvement in net income margin in line with the enhancement ofbusiness profitability. In the long term, we have aimed to become a company that can achieve a stable 15% ROE bypromoting structural transformation, and we have also been successful in promoting financial measures throughenhanced balance sheet management, etc., resulting in a 16.0% ROE for the current fiscal year, meeting our target.

-24-

(3) Management Decisions
The Group believes that the business environment will remain favorable, although a number of events need to beclosely monitored, such as growing political and social tensions and the global economic uncertainty.
As society demands both economic development and solutions to social problems, innovative technologies such as
generative AI are rapidly entering the practical stage, and the need for digital applications in society is expected tocontinue expanding and diversifying. Regarding these evident business opportunities, we anticipate significant
fluctuations in the competitive landscape on both the demand and supply sides. This will be due to the advancementof global IT platforms and consulting firms, as well as the increased activity of new entrants from peripheralindustries, etc.
As we foresee major changes in the business environment, we believe it is crucial for the Group to enhance its
ability to solve problems by further refining its in-depth understanding of clients and technology, which is its
strength, and to broaden its ability to solve problems through co-creation with players with diverse capabilities. We
recognize the following management challenges.
1) Aggressively expanding in growing business areas
We must strengthen the revenue base further and create an environment that generates value-added services,
technologies and human resources.
2) Strengthening and extending problem-solving capabilities
We must gain deeper insights into the real issues facing society and clients and acquire problem-solving
methodologies that go beyond conventional frameworks.
3) Upgrading of human resources
We must develop value-added human resources and achieve competitive compensation levels.
4) Gaining agility in the practical application of new technologies
We must develop high-level technical personnel who can lead the continuous evaluation of new technologies andtheir on-site application and build a knowledge base.
5) Encouraging the accumulation and use of intellectual property
We must accumulate and promote the use of high-value intellectual property to achieve business restructuring andscale-up.
6) Upgrading governanceWe must upgrade governance further to support ambitious growth plans.
7) Optimizing business portfolio
We must pursue an optimal business structure to accomplish the above and maximize results with minimum
capital.
Based on the above, we will launch our medium-term management plan (2024–2026): Frontiers 2026, formulated
as a three-year plan starting in April 2024. While translating the various investments and customer relationshipbuilding activities undertaken in the previous medium-term management period into positive results, as the firststage toward realizing the Group Vision 2032, we will build on our achievements to date to create a clear advantage
and, through differentiation and concentration, accumulate reasons to be the lasting choice of markets andcustomers in the future.

-25-

<Positioning of Medium-Term Management Plan (2024–2026): “Frontiers 2026”>(4) Medium-Term Management Plan (2024–2026): “Frontiers 2026”
The Group aims to achieve continuous business expansion and contribute to the realization of a sustainable society
through value exchange with all stakeholders, as well as to deliver value through a seamless process from strategicplanning to the implementation of solutions to address social issues.
Under the medium-term management plan (2024–2026) “Frontiers 2026,” we will enhance quality across all value
chains, starting with forward-looking market development and business domain expansion under the basic policy offrontier development.

-26-

■ Market Strategy / Overall Segment Strategy
We will expand our business area by developing various services based on the characteristics of each segment,
and continue to strengthen our business foundation for sustainable growth. The growth strategies for each segment
are as follows.
Offering
ServiceBusiness
BPM
Financial IT
Business
Industrial IT
Business
Regional IT
Solutions• Respond to diversified cashless payment needs and expand the business domain as a business
operator with strengths in finance and settlement that newly address social issues• Improve profitability by upgrading investment management• Amid a shrinking market for some BPO operations, the Company is returning to a growth pathby reviewing its business portfolio, such as expanding the customer experience (CX) domain,
where demand is strong, and expanding services in collaboration with other segments• This segment will pass its peak after the completion of a major project. However, it will lay thenext foundation for growth by co-creating businesses with these clients, developing
modernization businesses, acquiring new clients, and diversifying its client base
• Deepen customer relationships and expand services with a focus on manufacturing, energy, andsocial infrastructure• Drive growth with existing customers and attract new ones by leveraging a variety of services
such as ERP and modernization• Nationwide deployment of original IT solutions developed in close contact with clients in fivepriority areas (public administration, healthcare, finance, industry and infrastructure)■ Market Strategy/Global Strategy
The Company positions Asia, which has enormous market potential, as a long-term target, and aims to grow its
business in ASEAN while expanding its global partnerships, with the goal of achieving consolidated net sales of¥100 billion in fiscal 2026. We will develop our business with agility, both by striving for greater value across thebusiness through the integration of IT and consulting on business restructuring, and by upgrading our technology
investment function.

-27-

■ Service Strategy
Our customers’ needs are diversifying with changing social trends and emerging innovative technologies. Under
these circumstances, we will continue to expand our services and develop the market by adding higher value inorder to support the transformation of society and our customers. The Financial IT Business and Industrial IT
Business will mainly develop markets based on industries, while Offering, BPM, and Regional IT will develop
markets based on functions and develop services in accordance with the guidelines of each business segment.

■ Technology Strategy
The evolution and diversification of elemental technology is remarkable, and the Company recognizes that early
adaptation to these technologies will have a significant impact on its competitiveness. With a technology portfolio,
which is a selection of technologies on the market that are important to the Group, we continue to implement
comprehensive measures to study these technologies upfront and apply them in the field as quickly as possible.
In the short-term, we will promote measures such as creating an environment that encourages employees to use
generative AI, redesigning processes based on the use of AI in various internal operations, and developing agenerative AI training program and conducting training. Meanwhile, through industry-academic collaborations, wewill promote research into a series of technologies and their combined applications that will form the core of thedifferentiation of our business in three to ten years, such as the mass data transfer technologies and related
algorithms that will be required as the digital and physical worlds continue to converge.
■ Human Resources Strategy
In order to continue to enhance the value exchange between employees and Group companies, the Group will
promote a human resources strategy focusing on diversification and advancement of individuals. In that, the Groupwill take on the challenge of improving engagement with employees through creation of an environment andorganizational culture where diverse individuals can thrive, promotion of next-generation work-style reforms
looking towards a new work environment, and advancement of human resource portfolio management bydigitalization of a human resources database.
The Company has regarded human resources as its most important management capital and has actively promoted
up-front investment in human resources. Regarding the human resource strategy, the Company is investing inhuman resources to increase employee engagement based on the three axes of the meaning of work, the working
environment, and compensation. We will continue striving for further growth and securing excellent talent insideand outside the Company that will contribute to growth by strengthening a virtuous cycle of high added value for
the Company, our employees, and society.
The medium-term management plan (2024–2026), under the theme of strengthening problem-solving, insight, andintegration capabilities, will focus on expanding DX consultants, advanced sales personnel, and IT architects and-28-

will promote investment and the creation of mechanisms to develop and acquire such personnel.
■ Intellectual Property Strategy
We believe that the accumulation and advanced utilization of intellectual property will become increasingly
important to strengthen the Group’s services and service delivery processes and to achieve both business scale
expansion and high-value creation. In the medium-term management plan (2024–2026), we will work to promote
the creation of intellectual property by strengthening the feedback of customer touchpoint information. We will
strengthen a virtuous cycle of providing high-value services through satisfactory service delivery processes, which
will improve the quality of communication with clients, and thereby updating existing intellectual property andgenerating valuable information that will lead to the creation of new intellectual property.
■ Financial Strategy
The basic principle of the Company’s capital policy is to promote an appropriate capital structure from a mediumto long-term management perspective. This policy takes a balanced approach to promoting investments for growth,
ensuring financial soundness, and strengthening shareholder returns to continuously increase corporate value.
Specifically, to strengthen our ability to generate cash through sustained business profit growth and improved
profitability, we will aggressively invest for growth, and as part of this effort, we will continue to discuss andimplement a review of our business portfolio.
In addition, we will strive to optimize our capital structure in line with our business structure by strengthening
balance sheet management and implementing measures to generate sustainable returns above the cost of capitalwhile maintaining financial health. We aim to improve and increase shareholder returns consistent with businessgrowth.
Based on the above, the medium-term management plan (2024–2026) calls for a cumulative investment of ¥100
billion over three years for growth, a total return ratio of 50%, and an appropriate capital structure in line with theCompany’s ability to generate cash.

-29-

(5) Objective indicators to measure the achievement of management goals, etc.
In the medium-term management plan (2024–2026), we set the following objective indicators to measure ourcontribution to society: “net sales of ¥620 billion,” “operating income (operating income ratio) of ¥81 billion(13.1%),” “EPS CAGR of more than 10%,” “ROIC and ROE of over 13% and over 16%,” and “operating income
per employee of ¥3.5 million.”-30-

(Reference) Sustainability policy and initiatives
Based on the Group’s basic philosophy of “OUR PHILOSOPHY”, the Group will strive to solve social issues
through its business activities and enhance value exchange with stakeholders through management sophistication in
response to social demands, thereby promoting sustainability management that seeks to both contribute to asustainable society and continuously increase corporate value.

To date, the Group has established a system for enhancing sustainability management by means such as setting up
a Corporate Sustainability Committee, identifying materiality and the four societal issues to resolve, and putting inplace an implementation system to advance sustainability management, while promoting initiatives related tohuman rights and the environment, which are high-priority themes as urgent and important social issues based on
the Basic Direction on Corporate Sustainability. In addition to continuing these initiatives, the Group recognizes
that it is important to reevaluate not only the Group’s direct corporate activities but also its corporate activities
throughout the value chain, and the Group will strengthen its management system to establish a presence as aleading sustainability company by further deepening sustainability management.
In addition, the Group will continue to develop and strengthen its management foundation to achieve sustainablegrowth in an increasingly uncertain environment. The Group has established segment owners to clarify the focus ofauthority and responsibility, and is promoting the realization of growth strategies that leverage the strengths of eachgroup company. The Group is also pursuing optimal group formation by restructuring the business portfolio throughcapital cost-conscious business management and M&A of domestic and overseas companies, and further upgrading
and streamlining the head office functions including sharing inter-Group administrative operations. In addition, theGroup will also promote the sophistication of investment management to earn appropriate returns as it aggressively
executes growth investments (software investment, human resource investment, R&D investment, M&A and capitaltie-ups, etc.) that will contribute to future growth.
At the same time, the Group will continue with strategic brand activities, including placing commercials on
television and articles in advertising materials as part of efforts to increase corporate value and consumer
recognition. At this point, the Group is beginning to see steady results in terms of improved recognition of the-31-Group and corresponding benefits in terms of employee satisfaction and recruitment, but will continue efforts tostrengthen the appeal of its service brand based on its corporate brand.

-32-

4. Basic Policy on Selecting Accounting Standards
The TIS INTEC Group uses Japanese accounting standards for financial reporting. The Group continues to review thepossibility of optional application of International Financial Reporting Standards (IFRS).

-33-

5. Consolidated Financial Statements(1) Consolidated Balance Sheets
Items
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable, and contract assets
Lease receivables and lease investment assets
Marketable securities
Merchandise and finished goods
Work in process
Raw materials and supplies
Prepaid expenses
Other current assets
Allowance for doubtful accounts
Total current assets
Fixed assets
Property and equipment
Buildings and structures, net
Machinery and equipment, net
Land
Leased assets, net
Other property and equipment, net
Total property and equipment
Intangible assets
Software
Software in progress
Goodwill
Other intangible assets
Total intangible assets
Investments and other assets
Investment securities
Net defined benefit asset
Deferred tax assets
Other assets
Allowance for doubtful accounts
Total investments and other assets
Total fixed assets
Total assets-34-

As of March 31, 2023

As of March 31, 2024

millions of yen

millions of yen

94,675
131,488
4,542
284
3,518
1,758
207
27,8104,858(461)
268,682

103,554
144,141
4,312
281
3,946
1,432
193
30,217
3,868(392)
291,556

33,635
8,336
9,650
3,835
6,861
62,31834,3258,205
15,802
4,720
6,662
69,71522,039
3,609
692
1,329
27,671

20,3293,246
9,659
22,56555,801

52,7998,089
21,15924,174(2,575)
103,647
193,637
462,320

56,396
10,754
20,39721,092(258)
108,382
233,899
525,456

ItemsLiabilities
Current liabilities
Notes and accounts payable
Short-term borrowings
Income taxes payable
Accrued bonuses to directors and employees
Provision for loss on order received
Other allowances
Contract liabilities
Other current liabilities
Total current liabilities
Non-current liabilities
Long-term debt
Lease obligations
Deferred tax liabilities
Deferred tax liabilities from revaluation of land
Accrued retirement benefits to directors
Other allowances
Net defined benefit liability
Asset retirement obligations
Other non-current liabilities
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Common stock
Additional paid-in capital
Retained earnings
Less treasury stock, at cost
Total shareholders’ equity
Accumulated other comprehensive income
Net unrealized gains on other securities
Deferred gains or losses on hedges
Revaluation reserve for land
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets-35-

As of March 31, 2023

As of March 31, 2024

millions of yen

millions of yen

26,976
11,99013,354
17,540607
160
18,87827,670117,179

26,206
17,398
9,024
16,952
1,955
114
26,946
41,678140,277

4,052
4,011
344
272
0
218
12,0386,924
8,051
35,914
153,094

20,509
4,763
8,507
272
0
131
12,8086,617
6,844
60,453200,730

10,00140,470247,263(7,614)
290,120

10,001
12,314
283,533(6,395)
299,4537,900(31)(2,672)
628
1,093
6,918
12,186309,226
462,320

11,715(2)(2,672)983
2,931
12,956
12,315
324,725
525,456

(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income
Consolidated Statements of Income
FY2023
FY2024Items
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Foreign exchange gains
Reversal of allowance for doubtful accounts
Other
Total non-operating income
Non-operating expense
Interest expenses
Equity in losses of affiliated companies
Financing expenses
Loss on investments in investment partnerships
Other
Total non-operating expenses
Recurring profit
Extraordinary income
Gain on sales of investment securities
Gain on sales of shares of subsidiaries
Gain on reversal of asset retirement obligations
Other
Total extraordinary income
Extraordinary loss
Loss on sales of investment securities
Loss on valuation of investment securities
Impairment loss
Loss on valuation of investments in capital
Other
Total extraordinary loss
Income before income taxes
Income taxes: current
Income taxes: deferred
Total income taxes
Net income
Net income attributable to non-controlling interests
Net income attributable to owners of the parent company-36-

millions of yen

millions of yen

508,400
366,668
141,732
79,40362,328549,004
397,365
151,639
87,07064,568

563
779
385
52
707
2,488

401
689
497
2,501
923
5,012

235
1,088
289
1,612
63,204

380
20
224
142
206
1,027
68,553

19,2012,774
64
22,040

2,254
551
484
3,291

887
631
969
1,121
141
3,752
81,492
21,552
1,370
22,92258,5703,10855,461

1,382
1,094
175
2,652
69,193
18,277664
18,94250,2501,376
48,873

Consolidated Statements of Comprehensive Income
FY2023Items

FY2024

millions of yen

Net income
Other comprehensive income
Net unrealized gains on other securities
Deferred gains or losses on hedge
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Share of other comprehensive income of equitymethod affiliates
Total other comprehensive income
Comprehensive income(Composition)
Comprehensive income attributable to owners of theparent company
Comprehensive income attributable to noncontrolling interests-37-

millions of yen

58,57050,250(13,086)
(55)
812
1,315

3,824
58
444
1,836

190

206

(10,823)
47,746

6,372
56,62244,35654,911

3,389

1,711

(3) Consolidated Statements of Changes in Net Assets
FY2023 (April 1, 2022 through March 31, 2023)
Shareholders’ equity

Balance at beginning offiscal year
Changes during the fiscal
year

Common stock

Additional paidin capital

Retained earnings

Treasury stock

Total
shareholders’equitymillions of yen

millions of yen

millions of yen

millions of yen

millions of yen

10,00164,960

Dividends from surplus
Net income attributableto owners of the parent
company
Acquisition of treasury
stock
Disposal of treasury
stock
Cancellation of treasury
stock
Change in scope of
consolidation
Change in scope ofequity method
Capital increase of
consolidated subsidiaries
Sale of shares of
consolidated subsidiaries
Items other than changes
in shareholders’ equity,net
Net changes during the
fiscal year
Balance at end of fiscal year

203,256(3,117)275,100(11,451)(11,451)

55,461

55,461(30,005)(30,005)

8

1,009

1,017

(24,498)

24,498

-

(112)

(2)

(115)

(1)

(1)

112

112

0

0
-

-

(24,490)

44,006(4,496)15,01910,00140,470247,263(7,614)

290,120-38-

Balance at beginning offiscal year
Changes during the fiscal
year

Net
unrealized
gains onothersecurities

Accumulated other comprehensive income
Remeasure
Total
NonDeferred
Foreign
Revaluation-ments of accumulated
controlling
gains orcurrency
reserve fordefinedotherinterests
losses ontranslation
land
benefit comprehensive
hedge
adjustments
plansincomeTotal net
assetsmillions ofyenmillions ofyenmillions ofyenmillions ofyenmillions ofyenmillions ofyenmillions ofyen

20,990(4)(2,672)

(70)

(219)

9,867

302,993

millions ofyen

18,024

Dividends from surplus(11,451)

Net income attributableto owners of the parent
company
Acquisition of treasury
stock
Disposal of treasury
stock
Cancellation of treasury
stock
Change in scope of
consolidation
Change in scope ofequity method

55,461(30,005)
1,017
(115)
(1)

Capital increase of
consolidated
subsidiaries
Sale of shares of
consolidated
subsidiaries
Items other than changes
in shareholders’ equity,net
Net changes during the
fiscal year
Balance at end of fiscal
year

112

0
(13,090)

(27)

-

699

1,312

(11,105)

2,319(8,786)(13,090)

(27)

-

699

1,312

(11,105)

2,319

6,233

7,900

(31)

(2,672)

628

1,093

6,918

12,186309,226-39-

FY2024 (April 1, 2023 through March 31, 2024)
Shareholders’ equity
Common stock

Additional paidin capital

Retained earnings

Treasury stock

Total
shareholders’equitymillions of yen

millions of yen

millions of yen

millions of yen

millions of yen

Balance at beginning offiscal year
Changes during the fiscal
year

10,00140,470247,263

Dividends from surplus
Net income attributableto owners of the parent
company
Acquisition of treasury
stock
Disposal of treasury
stock
Cancellation of treasury
stock
Items other than changes
in shareholders’ equity,net
Net changes during the
fiscal year

290,120(12,604)(12,604)

48,873

48,873(34,585)(34,585)

(0)

7,649

7,648

(28,155)

28,155-

Balance at end of fiscal year

Balance at beginning offiscal year
Changes during the fiscal
year(7,614)-(28,155)

36,269

1,219

9,333

10,001

12,314

283,533(6,395)

299,453

Net
unrealized
gains onothersecurities

Accumulated other comprehensive income
Remeasure
Total
NonDeferred
Foreign
Revaluation-ments of accumulated
controlling
gains orcurrency
reserve fordefinedotherinterests
losses ontranslation
land
benefit comprehensive
hedge
adjustments
plansincomeTotal net
assetsmillions ofyenmillions ofyenmillions ofyenmillions ofyenmillions ofyenmillions ofyenmillions of
yen

7,900

(31)

(2,672)

628

1,093

12,186309,226

millions of
yen

6,918

Dividends from surplus
Net income attributableto owners of the parent
company
Acquisition of treasury
stock
Disposal of treasury
stock
Cancellation of treasury
stock
Items other than changes
in shareholders’ equity,net
Net changes during the
fiscal year
Balance at end of fiscal
year(12,604)
48,873(34,585)
7,648
3,815

28

-

354

1,838

6,037

128

6,165

3,815

28

-

354

1,838

6,037

128

15,498

11,715(2)(2,672)

983

2,931

12,956

12,315

324,725-40-

(4) Consolidated Statements of Cash Flows
Items
Cash flows from operating activities
Income before income taxes
Depreciation
Impairment loss
(Gain) loss on sale of investment securities(Gain) loss on valuation of investment securities
Loss on disposal of fixed assets
Amortization of goodwill(Gain) loss on sales of shares of subsidiaries
Loss on valuation of investments in capital
Increase (decrease) in accrued bonuses to directors and employees
Increase(decrease) in allowance for doubtful accounts
Increase (decrease) in net defined benefit liability
Interest and dividend income
Interest expenses
Equity gains (losses) of affiliated companies(Increase) decrease in notes and accounts receivable, and contract
assets(Increase) decrease in inventories
Increase (decrease) in notes and accounts payable
Increase (decrease) in accrued consumption taxes
Increase (decrease) in other current liabilities
Other, net
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchase of marketable securities
Proceeds from sale and redemption of marketable securities
Acquisitions of property and equipment
Proceeds from sales of property and equipment
Acquisitions of intangible assets
Acquisitions of investment securities
Proceeds from sale and redemption of investment securities
Payment of lease and guarantee deposits
Collection of lease and guarantee deposits
Proceeds from collection of loans to subsidiaries and associates
Purchase of shares of subsidiaries resulting in change in scope of
consolidation
Proceeds from sales of shares of subsidiaries resulting in change inscope of consolidation
Other, net
Net cash provided by (used in) investing activities-41-

FY2023

FY2024

millions of yen

millions of yen

81,492
15,700969(18,313)
631
127
157
(2,774)
1,121
1,700
(89)
(495)
(1,343)
235
1,088

69,193
17,3401,094(2,249)
1,382
109
619
(673)
(2,385)(415)(1,090)380
20(18,792)(10,568)(2,317)
4,198
(947)
3,578
(3,622)62,306
1,279(239)(29,712)33,634258(1,277)
2,013
12,956(1,395)85,3101,278(374)(23,636)
62,578(400)
400(4,337)50(6,045)(4,191)
23,685
(228)
827
-

(400)
500
(13,081)495(5,850)(2,887)
6,995
(365)
275
2,961

-

(20,724)

2,435

-

(895)
11,300(736)(32,817)

ItemsCash flows from financing activities
Increase (decrease) in short-term borrowings, net
Proceeds from long-term debt
Repayments of long-term debt
Purchase of treasury stock
Proceeds from sales of treasury stock
Dividends paid
Dividends paid to non-controlling interests
Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Increase in cash and cash equivalents resulting from inclusion ofsubsidiaries in consolidation
Decrease in cash and cash equivalents resulting from exclusion ofsubsidiaries from consolidation
Cash and cash equivalents at end of year

-42-

FY2023

FY2024

millions of yen

millions of yen

10,3993,500(35,450)(30,005)
1,017(11,451)(1,155)(1,429)(64,573)271(19,367)
113,820(77)
23,159(1,802)(34,585)7,648(12,604)(1,754)(1,873)(21,889)543
8,415
94,306

11

-

(158)

-

94,306

102,722

(5) Notes on the Consolidated Financial Statements(Notes on the Going-concern Assumption)
Not applicable.
(Significant Subsequent Events)(Share buyback)
The Company resolved at a Board of Directors’ meeting held on May 8, 2024, to acquire its own (treasury)
shares in accordance with the provisions of Article 156 of the Companies Act of Japan as applied pursuant toParagraph 3, Article 165 of said Act.
1. Reason for share buyback
To enhance shareholder returns and capital efficiency by implementing an agile capital strategy that is
flexibly responsive to changes in the operating environment.
2. Details of resolution on share buyback(1) Class of shares to be repurchased
Common shares(2) Total number of shares to be repurchased
2,500,000 shares (upper limit)(3) Total cost of repurchase¥6,500 million (upper limit)(4) Period for repurchase
May 9, 2024 - July 31, 2024
(5) Method for repurchaseMarket purchase on the Tokyo Stock Exchange-43-

6. Other Information
INTEC Inc., a consolidated subsidiary of the Company, is currently in litigation with Mitsubishi Shokuhin Co.,
Ltd., which filed a claim for compensation in connection with services including system development provided by
INTEC Inc. (Amount of compensation demanded as of November 13, 2018 was ¥12,703 million. It was changed
to ¥15,485 million on December 8, 2023).

-44-