Platform that Supports Value Creation Process
TIS INTEC Group’s Platform for
Supporting Corporate Value Process(ESG Section)
Communication with TIS INTEC Group’s stakeholders is a what supports improvement in corporate value.
Consideration for the environment along with efforts in quality control and R&D are also essential for the business of information systems—a key social infrastructure—to function in harmony with society and steadily
evolve. With this in mind, we strive to enhance corporate governance and internal controls, which form a vital­cornerstone of business activities within the Group.

Basic Direction on Group CSR
The management philosophy that permeates the TIS INTEC Group stresses the Group’s development into a
corporate citizen whose activities, hinging on the provision of various services utilizing IT, match its status as aleading corporate group. This philosophy also underpins the Group’s efforts to raise corporate value, supported inthis effort by the high regard of all its stakeholders, including clients and shareholders as well as employees andtheir families. The Group’s stance on corporate social responsibility is evident in its commitment to cultivate a vibrantcorporate culture that encourages the companies and individuals under the Group umbrella to work toward higher
goals and embrace new challenges, to be honest and fair in business pursuits based on respect for the law, ofcourse, as well as high moral standards, and to fulfill social obligations. This is the Group’s basic direction on CSR.

Communication with Stakeholders
The TIS INTEC Group strives to build bonds of trust through communication with all stakeholders, including
clients, employees, shareholders and investors, and business partners, and to boost corporate value.

● Customer service points of contact● Local event participation(call center, website, main number)● Cooperation and support for NGO/NPO social● Seminars, fairs and forums for clients● Charity concerts● Opinion posts from website● Responses to relevant ministries/agencies andindustry associations
and others

Clients

Community/
Society
Employees● Company news, Group news

Develop talent

Cultivate an environment in which employees always look ahead, striving to achieve higher goals andembracing new challenges. Provide opportunities to grow and realize personal goals, create a safe andproductive work environment, and give each person the freedom to reach his or her potential.

Respect the law

Maintain high corporate morals, obey the law and uphold parameters of socially acceptable conduct,
and respect the spirit of such standards. Have absolutely nothing to do with antisocial forces.

Maintain fairbusiness practices

Ensure appropriate business transactions, based on fair and open competition.

Protect theenvironment

Recognize that environmental problems warrant universal attention and promote efforts to saveresources and energy in the execution of corporate activities. Also, through IT services, support clients’efforts to enhance operating efficiency and reduce energy consumption, thereby contributing to lower
environmental impact.

Contribute to society

Actively participate in community events as a corporate citizen whose social standing matches its
leading industry status.

Be a part of theinternational
community

Naturally, obey internationally recognized rules and local laws in the execution of cross-border projects,
but also contribute to social and economic development in the countries where TIS INTEC Group
maintains a presence by recognizing local culture and customs.

■ Human rights

Due diligence, crisis situations impacting human rights, avoidance of complicity, complaint resolution, prejudice, sociallydisadvantaged, citizen and political rights, economic, social and cultural rights, basic principles and rights in labor● Creating opportunities for discussion (projectexchange groups● Day at the office for children of
employees● President’s Caravan
and others

Always provide the very best to clients and strive to raise customer satisfaction levels through excellent
quality and technology built on the composite strengths of the Group.

Organizational Governance● Information meetings on policy (guidelines)● Personnel exchange groups, opinion

Provide optimum
services

In line with Basic Policy on Group CSR, the TIS INTEC Group is considering and pursuing
various measures from the perspectives described below.

Primary methods of communication
with stakeholders● Intranet

Acknowledge responsibilities as a leading corporate group in the IT services industry and undertakesound corporate activities with integrity and clarity of purpose. In addition, be sincere and fair in
dealings with all stakeholders and proactively disclose pertinent corporate information.

contribution activities● Publication of newslettersand technical brochures● Client satisfaction surveys● Regular meetingsand others

Ensure sound,transparent management practices

TIS INTEC Group

information)■ Labor practices● Engineer development and support (educational

Hiring and hiring-related issues, working conditions and social safeguards, social dialogue, health and safety in theworkplace, personnel instruction and training in the workplace

support, seminars)● New Year celebrations, informal social gatherings● Questionnaires, opportunities
for opinion exchange
and others

Shareholders ● General meeting of shareholders
and Investors ● Results briefing■ Environment

Approaches to prevent pollution, use of sustainable resources, mitigating and dealing with climate change,
environmental protection, preserving biodiversity and restoring natural habitats■ Fair business practices

Business
Partners

Approaches to prevent corruption, responsible political ties, fair competition, promoting social responsibility in value
chain, respect for property rights● Small meetings, domestic and overseas■ Consumer issues

roadshows, participation in conferences● Information disclosure on IR section of
corporate websites● Integrated Report● Business Reportand others

Fair marketing, information and contract execution, protecting health and safety of consumers, sustainableconsumption, services and support for consumers as well as complaint and dispute resolution, consumer dataprotection and privacy, improved access to required and indispensable services, education and awareness■ Community involvement and community development

Involvement in the community, education and culture, job creation and skill development, development of technology
and access to technology, wealth and income creation, health, socially responsible investment

33

ProfileGroup History

Value Creation Process

34
Consolidated Financial/
Non-Financial Highlights

To Our Stakeholders

Medium-Term
Management Plan

Group Business Strategies

Platform that Supports
Value Creation Process(ESG Section)

Consolidated
Financial Summary

Corporate Data

Sustainability
TIS INTEC Group’s Corporate Sustainability Initiatives

Materiality and SDGs

The TIS INTEC Group will deepen awareness of its position corporate social responsibility, namely, to contributeto social development through businesses that provide solutions to social issues, and will reinforce initiatives
related to corporate sustainability.
As part of this process, we identified materiality (priority issues) and clarified themes that we felt warranted
particular attention.

The TIS INTEC Group will contribute to the achievement of SDGs through materiality-oriented activities.

Identifying Materiality
Recognize issues

Assess priority andcategorize/ consolidate

EvaluateappropriatenessMateriality identified

1. Create comfortable

Social issues

We recognized issues by looking
at the kind of initiatives we should
apply to various guidelines andsocial issues, given the Group’s
basic philosophy and strategies.

Assessimportance toGroupDialogue withexperts

Discussion
within GroupWe assessed importance from astakeholder perspective, that is,
expectations of and impact on, as
well as from a Group perspective,
notably, the effect on the Group
itself and its growth prospects.

We verified the appropriateness of
issues recognized and importanceassessed through stakeholder
dialogue.

Importance Assessment

1.	Create society in which diverse human resources
are engaged and thrivea. Promote diversity
b. Promote workstyle reformsc. Human resource development and trainingemphasizing self-fulfillment
2. Create comfortable society through innovation andjoint activitiesd. Promote safe, convenient social foundation that
supports people and societye. Connect with stakeholders and promote joint activities
f. Reduce environmental impact
3. Create safe society through high-quality services
g. Continuous quality improvementh. Information securityi. Safeguard personal information
4. Enhance corporate governance and earn trust ofsocietyj. Corporate governancek. Compliancel. Risk management

We determined materiality
through discussions and decisions
by the Corporate Sustainability
Committee and the Board of
Directors.

1.	Create society in which diverse human resources
are engaged and thrivea. Promote diversity
b. Promote workstyle reformsc. Human resource development and trainingemphasizing self-fulfillment
2. C reate comfortable society through innovation andjoint activitiesd. Promote safe, convenient social foundation that
supports people and societye. Connect with stakeholders and promote joint activities
f. Reduce environmental impact
3. C reate safe society through high-quality services
g. Continuous quality improvementh. Information securityi. Safeguard personal information
4. E
 nhance corporate governance and earn trust ofsocietyj. Corporate governancek. Compliancel. Risk management

Safeguard personal information
Information security

Importance to stakeholders

Continuous quality improvement
Connect with stakeholders and promote joint activities
Promote workstyle reforms
Promote diversity
Compliance
Human resource development andtraining emphasizing self-fulfillment

Identifying Materiality

Sustainable Development Goals (SDGs)
These international goals, running from 2016 to 2030, aredescribed in the 2030 Agenda for Sustainable Development,
adopted at the U.N. Summit in September 2015. The agenda
comprises 17 goals and 169 targets aimed at putting theworld on a sustainable path and pledges thatno one will be left behind.
To achieve these objectives, companies are asked toparticipate as vital partners through respective core businesses.

Materiality

Promote safe, convenient social foundation that supports people and society

Reduce environmental impact

Materiality

Group’s basic
philosophy/
strategies

Materiality matrix

IssuesGuidelines(such as SGDs/
GRI/ISO26000)

Assessimportance tostakeholderss­ ociety through innovationand joint activities
2. Create society in which
diverse human resources
are engaged and thrive
3. Create safe society
through high-quality­services
4. Enhance corporate governance and earn trust ofsociety

Materiality

Risk management
Corporate governance

Topics

TIS—and by extension, the TIS INTEC Group—signed on to the U.N. Global Compact and was
registered as a participant as of July 19, 2018. Through strategies and actions in line with 10
principles encompassing four categories—human rights, labor, environment and anti-corruption—
we will encourage every employee to be involved in fulfilling our social responsibilities as acorporate citizen of the world and promote activities that support sustainable social development.

The ISO26000 reference table is available for viewing on our website at https://www.tis.co.jp/group/csr/iso26000/ (Japanese only)
Importance to TIS INTEC Group

35

ProfileGroup History

Value Creation Process

36
Consolidated Financial/
Non-Financial Highlights

To Our Stakeholders

Medium-Term
Management Plan

Group Business Strategies

Platform that Supports
Value Creation Process(ESG Section)

Consolidated
Financial Summary

Corporate Data

Human Resources SBU Roundtable Discussion
Looking toward the success of Group Vision 2026, we aim to create a company
where employees are really motivated.
Seeking to raise employee motivation, in April 2018, TIS established a new human resources business unit—
Human Resources SBU—and announced in-house a personnel manifesto with a mandate in effect through thethree years of the new medium-term management plan.

Jun Ikimune,
Managing Executive Officer,
General Manager of Human Resources SBU

Yasuhiko Koizumi,
Department Manager,
Human Resources Planning Department

Etsuko Hosoya,
Section Manager,
Workstyle Reform Promotion Office

Human Resources SBU Manifesto (Fiscal 2019) (Partial, abridged)

Chiharu Kakuno,
Workstyle Reform Promotion Office

Describe the process, from establishment of the Human
Resources SBU to announcement of the manifesto.

Desired status by Fiscal 2021
As a stepping stone to realization of Group Vision 2026, we want to be in a position
three years from now where corporate value of the TIS INTEC Group is accelerating
because we have enhanced the personal capabilities of diverse human resources.

Ikimune: An underlying direction in the new medium-term management
plan that launched in April 2018 is to enable employees to achieve personal career goals. Establishing the Human Resources SBU is a declarationof our intention to be a company where growth is fueled by the power of
employees and, at the same time, allows us to actively promote associatedmeasures.

Human Resources SBU Three-Point Mission
1. Create company where motivation level is high, and quickly and vigorously work
toward this from system and environment perspectives.
2. Achieve optimized deployment of human resources while providing an environment conducive to self-fulfillment of career goals.
3. Ensure thorough labor-related compliance and create safe and pleasant company
atmosphere.

Koizumi: Our mission in the Human Resources SBU highlights threepoints, the first of which is to create a company where the motivation levelis high. This is a key point because two years ago, we launched an
employee awareness survey and the results were not very positive. Our
goal is to achieve a virtuous cycle linking efforts to make work more enjoyable through higher motivation, enhancing the capabilities of diverse
human resources and improving corporate value. As part of this effort, TIS
established the Diversity & Health Management Promotion Committee,
with the president as in the chief executive position. The Workstyle Reform
Promotion Office, in the Human Resources SBU, plays a key role in thecommittee, which focuses on new workstyles and health management.
(See page 41)
The second point is to optimize the deployment of human resources.
This will be accomplished by creating a framework and systems to fully utilize human resources from a groupwide perspective, which will enable
us—that is, TIS INTEC Group—to demonstrate maximum performance.
Toward this end, we are working on a human resources portfolio that willvisualize the strengths and aptitude of people at each Group company.
The third point is labor-related compliance, which essentially falls on the
Human Resources SBU and is a key function of this business unit.

Measures and Direction Through 2020
1. Measures related to evaluation, treatment and compensationi. Raise standard compensation: Raise compensation to industry’s top levelii. Evaluation system that looks to boost motivation: Performance-based evaluationand compensation matched to capabilities and positioniii. Personnel system with groupwide perspective: Ensure consistency to achieve Group
Vision 2026
2. Measures related diversity, workstyle and health managementi. Promote diverse workstyles: Offer greater freedom in terms of place and time toencourage innovation
ii. Engage in health management: Enrich employees’ quality of life and be company
full of vitalityiii. Enable diverse human resources to be active: Provide place where employee canthrive regardless of gender, nationality or age
3. Measures related hiring, training and assignments
i. Define human resources portfolio: Visualize framework and systems to achieve
optimum deployment of human resources
ii. Recruit people who will play a truly vital role in our success: Secure humanresources with high contribution potential and specialized capabilitiesiii. Optimum deployment of human resources: Implement strategic human resources
deployment and regular rotation

Hosoya: Workstyle reform is attracting greater attention from a social perspective. At TIS, our emphasis is on creating an environment in which
employees can thrive. We will increase mid-career recruitment from othersectors in line with expanding Group businesses and change the format forhiring new graduates. This will promote diversity awareness, which isessential for attracting diverse human resources and maximizing skills. TIS
is keen to create a work environment in which diverse human resources
can demonstrate their abilities to the fullest degree. This will be accomplished by offering employees greater freedom in the way they performtheir duties, namely, a broader choice in where and when they work. In
addition, efforts will be directed toward health management to enhancequality of life for all employees and enable everyone to enjoy a long careerin good health.
Over the three years of the new medium-term management plan, we
will emphasize telework and the acquisition rate of paid holiday time. KPI
are also presented for each operating division. But achieving numbers is
not the objective. The reason for setting KPI is that they give us an opportunity—a moment to think as an organization and as individuals about
the system, to understand it and how best to use it. We will start off on a
trial basis but, ultimately, the goal is to create a workplace characterizedby rising productivity and a constant stream of innovation. TIS has morethan 5,000 employees of its own, so we will utilize messages from top
management as well as other channels, such as information meetings andtraining programs, to instill an awareness of diversity.

Group History

Value Creation Process

Koizumi: While TIS is moving forward on structural transformation, it isn’t
possible to apply the same evaluation standard used for the old system
integration business to the new service-style business. At the same time,evaluation of the organization and of the individual will have to be considered separately. For each employee, target management will form the basisof evaluations, with the individual and his or her supervisor working out
steps and processes, such as how to set and agree on concrete targets andhow to confirm progress toward such targets. This approach to employee
evaluation will take on greater importance.
Ikimune: I was also in operating divisions for a long time. Frontline
employees are probably just fine with the direction of structural transformation in business, such as the shift to services. They’ll take it all in stride.
But the Human Resources SBU has a big role to play in human resources
development and creating the right kind of work environment.

Going back to the new medium-term management plan,
what goals or themes are particularly noteworthy?
Ikimune: We’ll offer compensation at the industry’s top level and create aworkplace filled with people who are motivated and do a good job.
Koizumi: The three years of this plan will see the solidification of a platform that enables employees to realize their career goals. We will improvethe corporate infrastructure to energize the entire Group. Part of this effort
will be to finish the human resources portfolio.

Kakuno: To encourage women to maintain an active role in the workplace, TIS introduced a guidance program in 2015 for women who areabout to go on maternity leave as well as an interview-style meeting thatinvolves the individual, her supervisor and someone from human resources.
The guidance program helps women imagine possible workstyles upon
return to work and ways to utilize available support structures. It cultivatesa sense of career for women. In the interview session, the female employee
conveys her thoughts on advancement at TIS after she has had her baby,
and then the supervisor gives her an idea on programs that can help her,
the team support that will be available based on work environment, andhow performance will be evaluated. It is a straightforward, grass-roots
approach. We are holding maybe 80 guidance and interview meetings ayear, but I sense a steady change in employee perspectives.

Hosoya: Before we welcome diverse human resources from outside, it’s
important that we make TIS a place where the employees already here
enjoy working for the Company. We have to bring employee turnover due
to unavoidable circumstances, such as elder care or family relocation due
to job transfer, down to zero. We have to properly evaluate the thoughts
and actions of each employee and fuel motivation. I firmly believe that creating this kind of work platform will have positive consequences beyond
the three years of the plan, moving TIS steadily closer to realizing Group
Vision 2026.
Kakuno: I really feel it’s necessary to carefully and repeatedly explain howawareness and initiatives to promote diversity connects to the image weseek to project through Group Vision 2026 and higher corporate value. The
everyday activities of individuals aren’t just for personal benefit but, from abird’s-eye perspective, for the whole team and for the Company and for
the Group. Everyone has to realize this and use the new medium-term
management plan as an opportunity to think, act and have an impact.

Hosoya: For example, telework is a work arrangement that was introduced originally as a way to support employees whose home situations
required them to be with young children or elderly parents. But today, telework can be used by anyone to achieve a good work-life balance, and werun in-house campaigns to encourage employees to take advantage of thisoption. It’s our job to figure out new ways to alert employees to changes in
the workstyle menu. Going forward, we have to promote measures finetuned to specific concerns in divisions where reforms have not unfolded as
we thought they would and apply good practices across the organization.

Ikimune: Many employees have expressed hopes and requests regarding
the manifesto, so we will be implementing strategies in great earnest.

Amid structural transformation of business and workstylereform, strategies on employee evaluation, treatment andcompensation are also important.
Ikimune: We’ll need a new evaluation process to accurately gauge theperformance of employees who work from home or at a satellite office or

37Profileare on superflex time, because they aren’t right here for us to see them inaction. We want to raise motivation while promoting new workstyles, so
we are developing a new evaluation and compensation system that properly rewards employees who deliver really good results.

What initiatives are being targeted by Workstyle Reform
Promotion Office?

38
Consolidated Financial/
Non-Financial Highlights

To Our Stakeholders

Medium-Term
Management Plan

Group Business Strategies

Platform that Supports
Value Creation Process(ESG Section)

Consolidated
Financial Summary

Corporate Data

Communication with Stakeholders
Communication with Employees
Create environment in which each and every employee can fully demonstrate respective capabilities
For the TIS INTEC Group, the cornerstone of business, from an administrative perspective, is none other than employees—each andevery one. We strive to maintain an environment that facilitates diverse approaches to work, which enables employees to feel they
are contributing to society through their jobs and thus encourages personal pride and fuels motivation. Through the third mediumtem management plan, we emphasized the key measures described below as pursuits common groupwide.
Key Measure
Encourage women to seek
management positions
Utilize human resources andupgrade skills
Promote hiring of disabled persons
Address aging of workforce
Create comfortable work
environment where employees
feel appreciatedCultivate sense of unity groupwide
Collect/organize human resources
information

Content
Address national policies, including the Act Concerning the Promotion of Women’s Career Activities, and­promote diversity in hiring.
Consider utilization and training of employees from groupwide perspective to achieve sharper ­business edge at
all Group companies.
Achieve mandated 2.0% ratio as quickly as possible and maintain it, and develop further steps to promote hiring.
Address issue of shrinking working-age population that parallels falling birthrate and rising number of seniors insociety as well as associated increase in age composition of employees, and promote continuous recruitment
activities and establishment of appropriate personnel system matched to employee age composition.
Create structure for comfortable workplace by boosting the acquisition rate of paid holiday time (goal at eachcompany is rate above 80%) and trimming overtime work (goal to keep overtime under 20 hours at each­company).
Implement programs that cut laterally across the Group, highlighting “management,” “global,” “­ services” and“technology,” to cultivate united perspective and to reinforce the skills of human resources.
Realign functions within the Group and, as a strategy for job mobility, collect and organize human resources
information, not only basic personnel data but also skills, and share the information.

We realize that sustainable growth requires multifaceted perspectives and value perceptions, based on different experience, skills andattributes, and we will strive to ensure diversity in human resources, including efforts to encourage women to take on positions withmore responsibility. Getting women to be more active members of the workforce is an issue of particular importance in Japan thesedays, and the ratio of women in management positions at the seven principal companies under the TIS INTEC Group umbrella
averages around 6%. We recognize the pressing need to establish and maintain structures and a work environment that enablefemale employees to demonstrate even greater potential. Under the leadership of top management, we will promote measuresthroughout the Group toward this end, emphasizing skill development, career formation and consideration of various workstyles.
Activities at Principal Group Companies to Promote Greater Involvement of Women in the Workplace

To provide an environment in which employees can fully demonstrate their capabilities and stay on a career
path with confidence and no work/life balance concerns, companies within the TIS INTEC Group implement
measures from the various perspectives.

Major Activities
Noteworthy pursuits undertaken at Group companies are presented below.
1. Work/life balance, diversity (includes promoting role ofwomen in the workplace)● Promoting better structures for work at home and shorter
working hours (expand number of hours possible, extend
period of applicability)● Promoting reduction in overtime through no overtime days andother approaches● Encouraging employees to take allocated annual paid leave● Special paid leave categories, including refreshment leave, convalescent leave following injury or illness, and childcare/nursing
care leave● Visit-the-office opportunities for families● Morning flextime work structure with 9am-11am core time
● Program for return to work after maternity leave● Office-based daycare facilities for children of employees● Committee set up to explore the issue of creating a corporate
culture in which women feel empowered to work
● Promoting projects aimed at improving the work environment● Promoting “Thin Office” to raise administrative efficiency● Acquired “Kurumin” mark from Ministry of Health, Labour andWelfare in Japan for efforts supporting development of the next
generation● Information exchange opportunities for women on childcare
leave (includes other employees on leave as well)● Starts of part-time permit system● Participated in comfortable commute movement “Jisa Biz”

In April 2016, the Act Concerning the Promotion of Women’s Career Activities came into force in Japan, obligating employers to formulate a plan of action with specific details on duration, targets, measures and schedule, to submit this action plan to the relevant government office and to make the content publicly available. Against this backdrop, 10 principal companies* in the TIS INTEC Group began aprocess of discussions. A summary of the plans formulated by five of these companies is presented below.
*C ompanies with 301 or more regular employees are required to formulate an action plan for promoting women to leadership positions, to submit the plan to the relevant government office, and to
publicly disclose the content of the plan. There are 10 companies in the TIS INTEC Group subject to the new legislation: TIS, INTEC, AGREX, QUALICA, AJS, Chuo System, TIS Solution Link, TIS System
Service, INTEC Solution Power and KOUSHI INTEC.
Company Plan Duration
Name(Years)TIS

4Plan Targets● Set promotion ratio target for women in each fiscal year of the four-year action plan
● Set quota for women participating in training courses prior to promotion

to manager salary level● Provide training for women with potential to become managers through enhanced

career education for women● Hold meetings that cross division or section boundaries to exchange information● Talk with employees before and after they return to work from leaves of absence● Set medium- and long-term goals for young female employees and expand content

5● Ratio of women in management positions: More than 7%2● Ratio of women in management positions: More than 20%*
● Motivate women to seek promotions and encourage supervisors toof discussions

AGREX*5-yeartargetacknowledge potential(Goal to train 60 women for management positions)

5

More than 30%● Ratio of female employees: More than 20%● Ratio of women in management positions: More than 8.5% (15women)AJS

5● Establish project to promote greater involvement of women in the workplace● Roll out programs that raise awareness about greater involvement of women in theworkplace● Utilize employees with time constraints in management positions● Ratio of women among recently graduated newly hired employees:

QUALICA

Topics● Encourage female employees to pursue management positions● Ratio of women taking promotion-oriented training in preparation

for a management position: Up 10%● Enhance disclosure of information to female students● Support career advancement and network creation for female employees● Create comfortable working environment and offer human resources management

training to supervisors● Initiate project to promote greater involvement of women in the workplace● Implement various programs to cultivate perception conducive to greater involve-

ment of women in the workplace● Make content of promotion requirements course (at Globis University) widely known

POSITIVE ACTION Promotes Involvement of Women

Providing Employment Opportunities to the Disabled

In 2013, TIS set up a voluntary team—POSITIVE ACTION—with
key participation from female employees. Specific activities
based on activity suggestions from this team have been implemented to enhance the workplace environment, including steps
to encourage female employees to pursue career options withmore responsibility. For the action plan that runs from April 2016
to April 2020, we aim to push the ratio of women in management positions above 10%—up from 7.4% as of July 2016—
and are promoting several initiatives, including the establishmentof a target for the ratio of women in senior management
positions, career training for women, and support for women
pursuing career advancement.

Through SorunPure Inc, a special subsidiary, the TIS INTEC Groupsupports the creation of work environments where as many
disabled people as possible can find employment. As of June
2018, SorunPure had a staff of 61, including nine guides, who
undertake office management services, and help employees
maintain good health (in-house physiotherapist), at the Tokyo
headquarters, the Osaka office, the Nagoya office and the
Matsumoto office.
As of June 2018, the TIS INTEC Group had achieved adisabled employee ratio of 2.18%, based on 186.0 disabled
persons at five companies, including TIS, SorunPure and speciallyrecognized companies.

and encourage women to take the course

39

ProfileGroup History

3. Health management, other programs● Consultation point for physical and mental health questions,and mental stress checks● “Pink Vouchers” available through the TIS INTEC Group Health
Insurance Association to offset some of the costs incurred torefresh the body and mind
● Employee awareness surveys and human rights education

Measures● Ratio of women in management positions: 10% (186 women)● Ratio of women promoted to manager level: 17% on average● Ratio of women taking training courses prior to promotion

to manager salary level: More than 20%

INTEC

2. Training and utilization of human resources, and fair­evaluation and treatment● Talent management to systematically execute such processes
as hiring, assignment, skill development and performance­evaluation● System to invite applications for job openings in-house, a system that allows individuals to apply for preferred positions, asystem to monitor goals determined through discussions withsuperiors once every six months on job-related goals, a specialist system (type of multi-track personnel system tapping people
with specialized know-how for suitable positions), and a nonterritorial office (where employees do not have their own desks)● Occupation-specific courses, e-learning, correspondence education and other training opportunities.
● President’s award program for employees (recognizing noteworthy individuals, projects and activities)● Evaluation training to ensure that evaluations are fair and­equitable● Debuted “coming home” system that enables retired­employees to return to work
● Incentive awards and financial assistance to help employees
acquire new qualifications● Establishment of career consulting office

Value Creation Process

40
Consolidated Financial/
Non-Financial Highlights

To Our Stakeholders

Medium-Term
Management Plan

Group Business Strategies

Platform that Supports
Value Creation Process(ESG Section)

Consolidated
Financial Summary

Corporate Data

Communication with Employees

Communication with Shareholders
Fast, fair and impartial information disclosure

Workstyle Reform and Health Management at TIS
A core goal of the “Transformation to 2020” medium-term management plan launched in April 2018 is to enable employees toachieve personal career goals, and we are working toward developing the conditions, corporate culture, and programs that willallow diverse employees to experience real job satisfaction. A Diversity & Health Management Promotion Committee headed by thepresident and staffed largely by personnel from the Human Resources SBU’s Workstyle Reform Promotion Office has been established to work toward achieving this goal, and this committee is now pursuing action on workstyle reform and health management
to help employees find self-fulfillment and achieve more through their work. (See also “Human Resources SBU Roundtable­Discussion” on page 37.

Arrangements to create a company where motivation levels are highDiversity & Health Management
Promotion Committee

Back office (facilities/IT)

Reform Promotion Officer

Content
Quarterly briefings

Overseas roadshows

3 times

IR conferences
Production of materials for individual
investors

2 times
2 timesIssued “Business Report”

TIS
Reporting andassessment

176 times
2 times

Board of Directors

2017 Internet IR Commendation Award (Daiwa Investor Relations Co., Ltd.)
Received 2017 award for good IR site company, following wins award for excellence from 2013 in
fourth consecutive year.

TIS

Fiscal 2017 Homepage Quality Ranking Survey of All Listed Companies (Nikko Investor
Relations Co., Ltd.)
Received highest award as excellent website in comprehensive ranking, from Fiscal 2015 in third
consecutive year.

Human Resources Department
Collaboration

4 times

Provide IR-oriented information for analysts and institutional investors. Of these meetings, 33 were foroverseas investors. Total coverage: 212 companies (278 people)
President held one meeting with sell-side analysts, and one meeting with buy-side analysts.
President, director responsible for overseas IR and other members of senior management met withshareholders and investors in Europe, United States, and Asia
Participated in conference organized by securities firm in Tokyo

Workstyle Reform Promotion Office

Health insurance society(“Collabo-Health”)

Frequency

At TIS, we believe that timely and objective information disclosure to shareholders and investors is an important obligation that any
listed company must fulfill. Therefore, we strive to enrich our IR activities and improve the content and function of the IR pages on
our website. The success of our efforts is substantiated in part by the following awards.

Human Resources SBU
Collaboration

IR Events in Fiscal 2018
Results briefings for analysts andinstitutional investors
Small meetings for analysts andinstitutional investors
Small meetings

TIS’ IR Activities Recognized with Awards from External Organizations

Diversity Promotion Leader
Chief Health Officer (CHO)
President
TIS

We provide performance results and the latest news on our business activities to analysts as well as institutional and individual
investors through events, such as information meetings, the production of pamphlets and other materials, and also in the investor
relations section on the TIS website.

Health Advice Center(occupational health physicians
and public health nurses)

ReformPromotion

2017

Business units

Selected for inclusion in the MSCI Japanese Women in
Leadership Total Return Index (WIN)
Selected for candidates, 500 companies, of the 6th Corporate Value Improvement Award in fiscal 2017
Selected for inclusion in the JPX-Nikkei index 400

Gomez IR Site Comprehensive Ranking 2017 (Morningstar Japan K.K.)
Received 2017 silver medal, following wins bronze medal from 2015 in third consecutive year.

Collaboration

TIS

Employees’ Association

Health Committee

We have high expectations that TIS’ IT
capabilities will support a Japanese
productivity revolution.

The importance of IT is increasing asa key to solving social issues.
Fumiaki Kuroki, Chief Analyst, Investor Research
Office, Equity Investment Department, Nissay
Asset Management

Scott Callon, CEO, Ichigo Asset Management Ltd.

1. Workstyle Reform
The purpose of workstyle reform is to improve work quality and speed and reduce overheads. This is achieved by giving individuals greater choice regarding how they work (such as their places and hours of work) and creating the conditions that will let themdeliver their best performances. Employees’ awareness and control of workstyle reform is enhanced by allowing them to decide
for themselves how and when they want to use these arrangements so that they can pace themselves and their work according
to their needs.
In the year ending March 2019, we will be reviewing current teleworking and flextime arrangements and expanding the scopeof work that can be performed remotely to keep pace with infrastructure and hardware developments and meet employees’
diverse workstyle needs.

2. Health Management
Both companies and society benefit if employees are physically and mentally healthy and can make the most of their abilities insafe, comfortable working conditions. To raise employees’ quality of life (QOL) as individuals, therefore, we are committed topracticing “health management” to ensure employees’ good physical and mental health and enhance their job satisfaction andindependence.
As Chief Health Officer (CHO), the president is leading the development of arrangements to enhance QOL, and the company
is working on various initiatives in partnership with its health insurance society, employees’ association, health committee, andother relevant bodies. These include the introduction of compulsory intervals between shifts to counter the problem of long
working hours, addition of work-life balance support for employees with ongoing medical needs (mainly for cancer) to existingchildcare and nursing care arrangements, improvement of health literacy, and enhancement of fringe benefits.

As TIS shareholders, we are deeply gratefulfor the extraordinary growth that TIS generated during its most recent medium-termbusiness plan “Beyond Borders 2017,” including doubling its
earnings per share (EPS) in just three years.
Ichigo’s name comes from Ichigo Ichie (literally "onelifetime, one encounter”), an ancient Japanese proverb withroots in the tea ceremony. We seek to build trusted relationships with TIS and our other investee companies in order tofulfill our triple mission of “Serve Our Investee Companies,
Serve Our Clients, Serve Japan.”
Given its aging population, Japan’s future dynamism isdependent on making best use of its key resources, startingwith the Japanese people. We believe Information Technology,
TIS’ core business expertise, can be a critical linchpin of animpending Japanese Productivity Revolution, and we lookforward to TIS’ many contributions in this area. Through its
support for innovation and positive change at work, TIS cancontribute both to increasing Japan’s productivity and resolving
its social challenges.
Ichigo fully supports TIS’ “Group Vision 2026” and its
actions to sustainably strengthen its capabilities as a company
and grow value for its customers, society, and shareholders.

41

ProfileGroup History

Value Creation Process

At Nissay Asset Management, we apply ESG(environment, society and governance) criteria in our investment process and evaluate companies based on
the ability to generate cash flow over the medium to long term.
I was happy to accept this opportunity to contribute to TIS’ integrated report, which I use on a daily basis as a source of information on ESG and management strategies at TIS and within the TIS INTEC Group. It reminded me of the importance ofbuilding long-term relationships.
I have been covering TIS for more than 10 years, and overthis time, I have been involved in dialogue on various themes,
including the image the Group wants to present, key performance indicators, stakeholder relations and the best approach
to information disclosure. The success of steps taken up to now
is reflected in today’s business results and corporate value, andthe slogan for the new medium-term management plan—transform the TIS INTEC Group into a cohesive corporate family
that takes the lead in finding solutions to social issues—so veryclearly expresses the position that TIS seeks to establish.
The importance—maybe even necessity—of IT is increasingfrom many perspectives, particularly as a tool for addressing
social issues. In this environment, TIS is sure to encounter more
and more opportunities to demonstrate its excellent management resources and the bold and enterprising spirit that has
triumphed on difficult projects. I expect future activities willlead to continued value creation.

42
Consolidated Financial/
Non-Financial Highlights

To Our Stakeholders

Medium-Term
Management Plan

Group Business Strategies

Platform that Supports
Value Creation Process(ESG Section)

Consolidated
Financial Summary

Corporate Data

Communicating with Clients

Communicating with Business Partners

Making ourselves indispensable as a business partner

Seeking stronger relationships with partners across wide spectrum

Fiscal 2018 Customer Satisfaction Survey

TIS Business Partner Socials

TIS conducts annual questionnaire surveys of customer satisfaction. These target customers with which we do business on an

July 2018 saw TIS host socials for business partners in Tokyo, Osaka, and Nagoya.

ongoing basis, and the results are used to identify areas for improvement from a customer perspective. For our fiscal 2018 (ended

Attended by 299 participants from 154 key business partners, these events provided

March 31, 2018) survey, we asked respondents to assess activities designed to make us a “business partner that contributes toan opportunity for us to show our appreciation to our partners for their continuous

customers’ business growth.” Feedback revealed strong satisfaction with our quality and non-nonsense, sincere approach, and also

cooperation, strengthen ties with them, introduce our new medium-term business plan,demand for more positive proposals and a greater sense of urgency. We will continue to take on board customer feedback like thisand share with them our goals for the future.

to further improve our activities and enhance our contribution as a business partner.

Communication with Community/Society

TIS Exciting Future Business Summit 2018
In July 2018, TIC staged the TIS Exciting Future Business Summit 2018 with the backing of theThrough activities involving all Group companies

rest of the TIS INTEC Group. Taking as its theme “The Future We Want to Create,” the event was

We undertake multifaceted activities in cooperation with regional communities, including Smile Kids Camp, support for international

attended by 978 customers and featured a variety of seminars and solutions from the group.

conferences on local revitalization, a forest conservation project and lunchtime concerts.

TopicsRecent Major Award Activities

First use in Japan of an overseas platform for e-payment of fares at ticket gates• Recognized by APN as “AWS Premier Consulting Partner”• Acquired “SAP Competency” under APN Competency Program• Recognized as “Robo App Partner” under Pepper Partner Program• Selected as “Technology Partner” under IBM Watson Ecosystem Program• Received “Specialized Partner of the Year: SaaS-Japan” at Oracle ExcellenceAwards 2018
• Received “Specialized Partner of the Year: HCM Cloud-Japan” at Oracle
Excellence Awards 2018
• Received “Specialized Partner of the Year: SCM Cloud-Global” at Oracle
Excellence Awards 2017
• Received “Japan Partner of the Year 2018” at Rapid7 2018 Asia Pacificpartner Conference• Recognized by PCI SSC as “ASV (Approved Scanning Vendors)”• Recognized by UiPath as “Gold Partner”• Received “Most Excellent Partner” at mcframe Award 2018
• Received “Sales Award” at SuperStream Partner Awards 2016
• Received “Product Award” at SuperStream Partner Award 2017
• Received “Promotion Award” at SuperStream Partner Award 2018
• Received “Solution of the Year” at GRANDIT AWARD 2016
• Named “Implementation Partner of the Year” at Salesforce Partner
Awards 2016
• Received “Top Growth Partner of the Year 2017” under FireEye Japan Partner
Award Program• Recognized by FireEye Fuel Partner Program as “Platinum Partner”• JISA Awards
2015 Finalist: CareQube remote monitoring/preventative maintenance system
2014 Winner: DebitCube+ and PrepaidCube+ payment settlement systems
2013 Winner: AtoMsQube production control system

Trial of Alipay on Okinawa’s Yui Rail monorail
June 2018 saw TIS and five other companies—ORIX Corporation, Ant Financial Japan, Nippon Signal Co., Ltd., QUADRAC
Co., Ltd., and Okinawa Urban Monorail—launch a real-world trial of direct use of the Alipay1 e-payment service at ticket
gates on the Yui Rail monorail line operated by Okinawa Urban Monorail.
Data from the Japan Tourism Agency shows that visitors from China accounted for 7,350,000 (25.6%) of the
28,690,000 foreign visitors to Japan in 2017, and the proportion of independent travelers has risen sharply in recent years.
As the commonest problem encountered by foreign visitors after the language barrier concerns transport, improvements areneeded in areas such as methods of using public transport.2
Because of its convenience, Aliplay is widely used not only in China but elsewhere too, including by commercial facilities
in Japan. The aim of this trial of high-speed payment using Alipay on Yui Rail is to make transport more user-friendly for
Chinese tourists by making it possible for fares to be paid directly at ticket gates using Alipay.
1. Mobile payment service launched in China in 2004. Alipay has over 600 million users worldwide, making it one of the world’s top payment platforms. Alipay
is accepted by more than 50,000 merchants in Japan.
2. Source: Japan Tourism Agency website (http://www.mlit.go.jp/common/000190659.pdf).

To provide safe and secure retail settlement services
Ichiro Hamakawa, President and CEO, JCB Co., Ltd.
JCB currently issues cards to about 120 million members in 24 countries and regions.
Providing safe and secure settlement services 24 hours a day, 365 days a year, is a vital social
duty, and systems are indispensable to this objective.
You cannot talk about JCB systems without referencing TIS. Our two-generation
platform systems—JET, which went into service in 1989; and JENIUS, an upgraded version
that debuted in 2008—were the result of a huge, long-running project between TIS and
JCB. You might say that our history of growth is the story of joint efforts with TIS to develop
such systems as our authorization system and, most recently, a mobile payments system.
In the past few years, progress in information and communications technology is having a major impact on the retailpayment business. Even in Japan, where credit cards were once the only kind of payment product, options have diversified toinclude debit cards and prepaid cards, and gone mobile with such wireless technologies as NFC (near field communication)and QR. Going forward, our partnership with TIS will become all the more important as we strive to constantly provide value
to our customers. This is a relationship we aim to maintain.

Payment process using
Alipay at Yui Rail ticket gates

Alipay app
Ant Financial

Group History

Value Creation Process

Payment relay center
TIS

Alipay center
Ant Financial

Payment data
Settlement data
Acquirer center
ORIX

43

ProfileYui Rail ticket gate
Thin client server
Okinawa Urban Monorail,
QUADRAC
Nippon Signal

44
Consolidated Financial/
Non-Financial Highlights

To Our Stakeholders

Medium-Term
Management Plan

Group Business Strategies

Platform that Supports
Value Creation Process(ESG Section)

Consolidated
Financial Summary

Corporate Data

Contributing to Global Environment
We actively embrace measures through our business activities to address environmental issues. At our newest data center,
we have taken an environment-conscious approach, emphasizing renewable energy and resources and utilize geothermal
sources for heating, outside air for cooling, rainwater for uses other than drinking water, and solar power for electricity.

Selection of Major Activities

Smile Kids Camp—Supporting Seriously Ill
and Disabled Children and Their Families

Taking Part in Asahi no Mori Forest
Conservation ProjectThis traveling event is planned and executed by a committeeof volunteers from TIS for children with serious illnesses ordisabilities and their families. Employees from TIS INTECGroup companies volunteer their time to staff the event,
providing a valuable opportunity to contemplate the realsignificance of CSR and volunteer activities.

Since 2010, AJS has supported the Asahi no Mori forest
conservation project in the northern part of Miyazaki
Prefecture. This project was spearheaded by Asahi Kasei
Corporation to prevent global warming, protect the naturalenvironment and also contribute to the prefecture where it
has an established business presence.

2.000

PUE at
Data
Centers

1.882
1.804 1.794 1.795 1.781
1.800
1.754 1.763 1.766 1.759
1.709
1.620
1.600
1.531
1.468 1.454 1.472 1.495
1.400Group AGroup B

1.200

Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal
2011 2012 2013 2014 2015 2016 2017 2018*	PUE (Power Usage Effectiveness)=Electric consumption bywhole facilities/Electric consumption by facilities related to
information technology.
*	Group A graph data includes amounts recorded by Tokyo
1st/2nd/3rd centers, GDC Gotenyama, Nagoya Center, Osaka
Center, Shinsaibashi gDC, and Shinsaibashi gDC-EX.
*	Group B graph data includes amounts recorded by GDC
Gotenyama, Shinsaibashi gDC, and Shinsaibashi gDC-EX.
*	The Company reviewed its data center strategies in September 2015, and plans to integrate data centers in Tohan area
into the high-spec centers; GDC Gotenyama, GDC Osaka,
Shinsaibashi gDC, and Shinsaibashi gDC-EX.

The TIS INTEC Group is taking an environment-conscious approach at offices and data centers, which form the bedrockof corporate activities, by introducing measures to save energy and cut greenhouse gas emissions.

Examples of Environment-Conscious Activities at Data Centers

Performances by Friends of Music Society

Taking Part in SDGs Future Cities Project

TIS INTEC Group Gakuyukai (Friends of Music Society) is a
registered ensemble mainly comprising employees of the
TIS INTEC Group and family of employees. The ensemble
reflects the Group's unified objective to be a good
corporate citizen, through lunchtime concerts in the Tokyo
head office building and performances at local recital halls.
The musical emphasis is on orchestral, wind-instrument andchoral pieces.

SDGs Future Cities is an initiative broached by Japan toachieve Sustainable Development Goals (SDGs) adopted at
the United Nations Summit in September 2015. In June
2018, a selection process tapped 29 local governments
in Japan, including the city of Toyama where INTEC isheadquartered, as Future Cities. Moreover, 10 of these
local governments, including Toyama, have been certified
as model projects.
In Toyama, the Toyama SDGs Future Cities Strategy
Council was established to promote this project, with
INTEC among the committee members. Support has been
extended to promote model projects, such as building an
integrated city along the north and south from Toyama
Station, developing egoma perilla—a member of the mint
family—under the sixth-sector industrialization concept,
and turning farming and mountain villages into low-carbon
communities.

● Outdoor air for cooling● LED lighting● Use of geothermal energy● Optimized lighting with motion sensors and ambient light sensors● Use of rainwater● High-efficiency equipment● Use of well water● Rooftop greenery● Lighting equipment run on solar power● Landscaping● Green power procurement● External appearance in harmony with the local surroundings● Natural lighting● Noise-damping, heat-insulating sashes

Natural light (solar tracking equipment) Solar power generation monitor

Examples of Environment-Conscious Activities at Offices● Cool Biz● Stop running air barrier fans

● Go paperless (monitors set up in meeting rooms)● Power switched off on machine, such as copiers and● Recycle PCs

shredders, during periods of non-use● Confidential documents are solution-treated by a

● Absolutely no vehicle idling­provider● Water tap frequently closed● Participate in eco-cap movement● Encourage use of stairs (instead of elevator)● Partner in Table for Two program● End over-wrapping● Lights turned off in work areas during lunch hour

● Encourage employees to use personal thermos bottles,● Uniform air conditioner setting (in principle, “blower”)

45

ProfileGroup History

Value Creation Process● No heating in washrooms, and hot water setting disabled● Garbage is sorted for disposal● Reduced use of lighting (some lights not turned on)

The TIS INTEC Group is involved in various activities that bring employees together with local communities.
For details, go to http://www.tis.com/group/csr/

Rooftop greeneryand reusable shopping bags.
● Encourage employees to take vacation days during summer

46
Consolidated Financial/
Non-Financial Highlights

To Our Stakeholders

Medium-Term
Management Plan

Group Business Strategies

Platform that Supports
Value Creation Process(ESG Section)

Consolidated
Financial Summary

Corporate Data

External Officers’ Dialogue
We will contribute to the maximization of corporate value for
the TIS INTEC Group from a stakeholder perspective.
approach in pursuing new lines of business, along its chosen
path, success can certainly still be assessed even if businessresults and numbers do not rise in any given fiscal year.

Fumio Tsuchiya, External Director

Taigi Ito, External Audit & Supervisory Board Member

How do you rate corporate governance efforts by the TIS
INTEC Group?

The new medium-term management plan highlights structural transformation of the TIS INTEC Group.

Tsuchiya: Through efforts in recent years (see page 49), TIS has
provided external officers with better information, such as
background to proposals that will be voted on by the Board of
Directors, before those meetings take place. I give this highmarks. From a groupwide corporate governance perspective,
the fact that TIS has clarified the direction that the Group as awhole will take through Group Vision 2026 is very good. Goingforward, the role that each company under the Group umbrella
plays has to clarified a little further, and management decisions
have to be more thorough from a total optimization perspective. By doing this, TIS will certainly acquire the capacity toreach beyond its targets. As an external director, I will actively
voice my thoughts from a stakeholder perspective.

Ito: The new medium-term management plan has great content, I believe. The key now is how to enhance effectiveness.
Toward this end, it is imperative for each company in the Groupand each business unit or department at these companies topinpoint yearly targets and define specific measures to implement as well as the people responsible for promoting strategies, given the intent of basic policy. Management must also
firmly instill a perspective groupwide that calls on each company under the Group umbrella and each division at these companies to confirm the status of progress on measures, consider
points in need of improvement and draft responses fine-tuned
to status and, if the business environment changes a lot, tothink about the need to revise targets.

Ito: Corporate governance has two functions. One is legality—
to maintain the legality of operations and underpin fair andtransparent decision-making; and the other is efficiency—orproactive governance—to improve efficiency and promote fast,
decisive decision-making. In recent years, TIS has improved its
corporate governance structure to a generally fine level on both
fronts with progressive measures, including an enhanced supervisory/monitoring function to gauge the status of duties executed by the management team, ensuring that the roster of
directors comprises one-third from outside the Company, andthe appointment of a female external director. However, corporate governance has to go deeper to address changes in thebusiness environment, and management at TIS must be mindfulof the need for constant review.

Tsuchiya: On the issue of pursuing new lines of business, I
believe, on the basis of experience related to corporate management, it is extremely important for TIS to be aware of theneed to pinpoint strengths and accumulated know-how within
the TIS INTEC Group and cultivate frontiers by building on theseassets. TIS must always consider the end user—that is, lookbeyond the client company and must maintain a deeply rooted
commitment to the basics of providing systems that improve
corporate value for client companies that will lead to a higher
level of involvement in business. This will fuel growth in thestrategic partnership business, which is one of the strategic
domains that TIS has tapped for the future.
Also, TIS implemented a wage and compensation system,
effective from fiscal 2019, matching fields, such as service-­oriented operations, that differ from its conventional businesses. What’s really key, though, is that the system clearly lays
out requests that project leaders have on the frontlines, thetime axis and evaluation standards. If TIS takes a long-termGroup History

Value Creation Process

Tsuchiya: The biggest strength is the power of the individual
working as part of a team that stacks up results and completes
a job through an extremely sincere and honest approach. This isprecisely why client companies place such trust in TIS and members of the TIS INTEC Group. But don’t get bogged down inelaborate perfection. TIS must maintain management decisionmaking and execution with a sense of speed. This does notnegate diligence—that is, hard work—expended to date.
Companies are only as successful as their people, so the saying
goes. The key to the challenging medium-term management
plan that emphasizes structural transformation is none otherthan people. I hope to see the leader class, including top management, embrace reforms on a personal level and really demonstrate leadership skills. I also hope more effort will be directed
into training and education for human resources to cultivate
future leaders.

Ito: The pursuit of new lines of business also requires some risktaking, and there are techniques to support this effort once certain limits, like that for R&D expenses, have been determined.
Also, structural transformation is important, of course, but so isevaluation of business results—achievement of targets—as well
as evaluation of business results based on the status of both,including the positives of trying out new lines of business.
TIS established the Human Resources SBU in April 2018,
and this business unit created a manifesto (see page 37). The
fact that a company announced a manifesto designed to help
employees reach personal career goals is a wonderful approachthat shows a tremendously progressive attitude and gives
employees the power to dream. TIS has highlighted concretemeasures to become a company where employees enjoy theirwork, to optimize deployment of human resources, to create anenvironment that enables employees to achieve career goals, toensure labor-related compliance and to realize a safe and comfortable corporate atmosphere. But I’d like to see greater
exchange of ideas with all employees as the manifesto issteadily rolled out and its objectives reached.

Ito: An external member of the Audit & Supervisory Board has
no authority to make decisions for the Board of Directors but
rather checks to ensure that duties are being properly performed. I feel that one of the most important functions of an
external officer is as a keen observer, carefully watching theactions of the management team from a stakeholder perspective. The Compensation Committee, which was established in
April 2018 as a structure to assess the management team, will
steadily reinforce corporate governance. I expect that the activities of the committee will be enhanced as time goes on. With
regard to information provided to external officers, I believe thatfurther improvements, such as greater clarity of points in materials related to proposals, will promote more robust discussion
when the Board of Directors meets.
For myself, I will offer opinions and advice based on theexperience and insights I have acquired as an accountant at
quite a number of companies over the past 40 years. I expect
my participation will help grow the TIS INTEC Group.

Fumio Tsuchiya, External Director (left photo), andTaigi Ito, External Audit & Supervisory Board Member
Message from new external director

I will draw on my experience as a lawyer to help raise the corporate value of the TIS INTEC Group.
Naoko Mizukoshi, Outisde Director (Attorney, Endeavour Law Office)Right now, a digital transformation is unfolding in all industry sectors. The TIS INTEC Group has established astructure to facilitate quick decision-making and has kicked off its own process of transformation while steadily
delivering services matched to customer needs, now in the midst of change, and respective IT budgets.
The current medium-term management plan, which runs from 2018 through 2020 (fiscal 2019 to fiscal
2021), highlights TIS’ goal of structural transformation, which includes the transition to service-style business.
To create services that become a source of competitive strength, management will have to emphasize flexible
thinking to better utilize knowledge acquired from real data and experience accumulated by employees. In addition, TIS has to turn suchknowledge and experience into tangible intellectual property, including patents, copyrights and know-how, and generate a virtuous
cycle to effectively use these assets within the TIS INTEC Group and on a global scale with partners. What supports this kind of virtuous
cycle is none other than a corporate environment in which diverse employees are enthusiastically engaged through flexible thinking. I
will draw on my knowledge as an attorney dealing with intellectual property and international relations as well as experience as an inhouse lawyer for global corporations to offer suggestions and participate in animated discussions by the Board of Directors. I hope myapproach will help to raise corporate value for the TIS INTEC Group even higher.

47

ProfileWhat do you expect the TIS INTEC Group to ­accomplish?

48
Consolidated Financial/
Non-Financial Highlights

To Our Stakeholders

Medium-Term
Management Plan

Group Business Strategies

Platform that Supports
Value Creation Process(ESG Section)

Consolidated
Financial Summary

Corporate Data

Corporate Governance

Organizational Chart

Based on our Group Management Policy and Group Vision, we have formulated basic corporate governancepolicies aimed at improving the Group’s corporate value over the medium and long terms. We are working
constantly to enhance corporate governance.

General Meeting of Shareholders
Appointment, dismissal

Initiatives to Strengthen Corporate GovernanceInitiatives in the year ending March 2018●A
 ddition of “consultation” to “referral for discussion”
and “reporting” in order to enhance depth of discussion of medium- and long-term policies.
●Convening of roundtable discussions attended by
the president and external directors.
●Commencement of liaison meetings attended solely
by external directors following preliminary briefingof external directors.
●Formulation and rollout of guide to placing matterson the agenda for meetings of the Board of Directors
in order to standardize submission requirements andcomposition, etc.
●Commencement of paperless meetings of the Boardof Directors.

Initiatives in the year ending March 2019●E stablishment of Nomination Committee and Compensation Committee.
●Revision of standards for placing matters on the agenda
for meetings of the Board of Directors.
●Decision on introduction of performance-linked stock
remuneration system for directors, etc.
●Reduction of number of directors from ten to nine andmaintenance of number of external directors at three toincrease proportion of external directors to one third.

Nomination
Committee

Discussion/report
Reports

Supervision

Election, dismissal, supervision

Cooperation

President

Executive Committee
Discussion/report on
significant issuses

1. To respect the rights of shareholders and to ensure their equality.
2.	To consider the interests of stakeholders including shareholders, and to cooperate
appropriately with them.
3. To disclose corporate information appropriately and to ensure its transparency.
4.	To engage in constructive dialogue with shareholders based on a medium- to long-term
investment policy.
Corporate Governance Structure
Organizational Structure

Company with Audit & Supervisory Board

Chairman of the Board

Chairman and president

Number of Directors

Nine, including three external directors

Director’s Term of Office

One year

Number of Audit & Supervisory Board Members

Five, including three external audit & supervisory board members

Term of Office for Audit & Supervisory Board Members

Four years

Number of Independent Directors

Six, including three external directors and theee external audit& ­supervisory board members

Reports

Accounting Auditor

Accounting
audit
Cooperation

Value Creation Process

Internal audits

Execution of operations
Delegation of authority

Executive Officers

Divisions/Departments

Affiliated companies

Reason for Selection of Current Corporate Governance Organization
The Company has selected the organization of a company with an audit & supervisory board, which has the double-check
function through which business execution is overseen by the Board of Directors, while the Audit & Supervisory Board
conducts audits of legality and appropriateness. In addition, the Company aims to strengthen the supervisory function of
the Board of Directors by electing external directors with experience and insights regarding industry and corporate
management and by providing advice and recommendations to ensure the validity and appropriateness of the decisionmaking of the Board of Directors from an independent standpoint.

Directors and Board of Directors
As stipulated in its Articles of Incorporation, theCompany’s Board of Directors will comprise at least threeand no more than 15 directors, and to strengthen the
supervisory functions of the Board of Directors, a policy
has been established that two or more of the directors
must be independent external directors. At present, three
independent external directors have been appointed.
For swift and dynamic decision-making by the Board of
Directors, the Board of Directors convenes in principle
once monthly and also meets on an ad hoc basis
whenever necessary.
Furthermore, the Company provides sufficient
information to the Board of Directors in the following

49

Group History

Units involved
in internal audits

Reports

Cooperation

Evaluation

Basic Policy
TIS will constantly strive to pursue, sustain, and enhance the highest level of corporate governance.
TIS believes that the key to corporate governance is to ensure transparency and fairness in decisionmaking, make full and effective use of its management resources, and increase the vitality ofmanagement through swift and accurate decision-making, from the viewpoint of ensuring theCompany’s sustainable growth and enhancing its medium- and long-term corporate value. Accordingly,
TIS will strive to enhance its corporate governance in line with the following basic principles.

ProfileAppointment, dismissal

Audit &
Supervisory Board(Members)

Board of Directors(Directors)

Compensation
Committee
Group Internal
Control Committee

Appointment, dismissal
Audit, reports
Statement of
opinionways. It provides explanations in advance to the external
directors and external auditors regarding agenda items
raised in Board of Directors meetings. In addition, it holds
study groups conducted by external knowledgeable
persons, on-site inspections of the Group’s facilities andoffices, and other such events for external directors andexternal auditors. The Company also provides support toenable smooth and active discussion at Board of Directors
meetings by holding meetings to exchange opinions
between external directors and the President, andmeetings to exchange opinions between external directors
and external auditors only.

50
Consolidated Financial/
Non-Financial Highlights

To Our Stakeholders

Medium-Term
Management Plan

Group Business Strategies

Platform that Supports
Value Creation Process(ESG Section)

Consolidated
Financial Summary

Corporate Data

Audit & Supervisory Board Members
Kei Ando, Standing Audit & Supervisory Board Member
Date of Birth: July 25, 1961
April 1984
Joined Sanwa Bank, Limited (currently MUFG Bank, Ltd.)
July 2003
General Manager of Totsuka Branch of UFJ Bank Limited (currently MUFG
Bank, Ltd.)May 2009
General Manager of Corporate Settlement Business Department of Bankof Tokyo-Mitsubishi UFJ, Ltd. (currently MUFG Bank, Ltd.)
June 2010
Executive Officer, General Manager of Corporate Settlement Business
Department of Bank of Tokyo-Mitsubishi UFJ, Ltd. (currently MUFG Bank,Ltd.)
May 2011
Executive Officer, in charge of branches in the East Japan area of the bank
May 2013
Executive Officer, Head Office Associate Director-General of Bank of thebankJune 2013
President and Representative Director of Mitsubishi UFJ Capital Co., Ltd.
June 2016
Senior Managing Director, General Manager of Product Department of
Mitsubishi UFJ Kokusai Asset Management Co., Ltd.
June 2018
Full-time Audit & Supervisory Board Member of the Company (to present)

Katsuhiko Ishii, Standing Audit & Supervisory Board Member

Front row from the left, Yasushi Okamoto, Director and Senior Managing Executive Officer, Toru Kuwano, Chairman and President,
Masahiko Adachi, Representative Director and Executive Vice President, and Josaku Yanai, Director and Senior Managing Executive Officer.
Back row from the left, Fumio Tsuchiya, External Director, Akira Shinkai, Director, Takayuki Kitaoka, Director, Koichi Sano, External Director, andNaoko Mizukoshi, External Director.

Audit & Supervisory Board Members, from the left,
Muneaki Ueda, Katsuhiko Ishii, Kei Ando, Taigi Ito, and Sadahei Funakoshi.

Board of Directors

Toru Kuwano, Chairman and President

April 2013

Date of Birth: May 3, 1952
April 1976
Joined Toyo Information Systems Co., Ltd. (currently TIS Inc.)
June 2000
Director of the company
April 2004
Executive Director of the company
April 2008
Executive Managing Director of the company
April 2010
Executive Vice-President and Representative Director and General Manager
of Financial Industry HQ of the company
April 2011
President and Representative Director of the company
April 2013
Chairman, President and Representative Director of the company
June 2013
Chairman, President and Representative Director of the company
Director of the Company
June 2016
Chairman, President and Representative Director of the company
President and Representative Director of the Company
July 2016
President and Representative Director of the Company, in charge ofAuditing Dept.
June 2018
Chairman, President and Representative Director of the Company, in chargeof Auditing Dept. (to present)

Masahiko Adachi, Representative Director and Executive Vice President
Date of Birth: May 9, 1956
April 1981
Joined Sanwa Bank, Limited (currently MUFG Bank, Ltd.)
April 2001
General Manager of Sugamo Branch and General Manager of Corporate
Sales Department of the bankJanuary 2006 Deputy General Manager of Human Resources Department of Bank ofTokyo-Mitsubishi UFJ, Ltd. (currently MUFG Bank, Ltd.)
October 2006 General Manager of Osaka Sales Department No. 1 of Osaka Sales Divisionof the bankJanuary 2010 Manager of Corporate Planning and Management Department of UFIT Co., Ltd.
April 2010
Executive Officer, Department Manager of Corporate Planning andManagement Department of the company
June 2010
Director and Executive Officer, Department Manager of Corporate Planningand Management Department of the company
April 2011
Executive Officer, Division Manager of Corporate Management Division of
TIS Inc.
April 2013
Managing Executive Officer, Division Manager of Financial Industry SBU. 1of the company
April 2016
Senior Managing Executive Officer, Division Manager of Financial Industry
SBU. 1 and Division Manager of Financial Industry SBU. 3 of the company
July 2016
Senior Managing Executive Officer, Division Manager of Financial Industry
SBU. 1 and Division Manager of Financial Industry SBU. 3 of the Compan
April 2018
Executive Vice President, in charge of Corporate Planning SBU, Human
Resources SBU, Corporate Management SBU, Division Manager ofCorporate Planning SBU of the Company
June 2018
Representative Director, Executive Vice President, in charge of Corporate
Planning SBU, Human Resources SBU, Corporate Management SBU,
Division Manager of Corporate Planning SBU of the Company (to present)

Yasushi Okamoto, Director and Senior Managing Executive Officer
Date of Birth: March 3, 1962
April 1985
Joined Toyo Information Systems Co., Ltd. (currently TIS Inc.)
April 2010
Managing Executive Officer, Department Manager of Corporate Planningand Management Department of SORUN CORPORATION
April 2011
Executive Officer, Department Manager of Corporate Planning & Control
Dept. of TIS Inc.
October 2011 Executive Officer, Department Manager of Corporate Planning & Control Dept.
and Section Manager of Global Business Planning Office of the company
January 2012 Executive Officer, Department Manager of Corporate Planning & Control Dept.
and Section Manager of Global Business Planning Office of the company
Managing Director of TISI (Singapore) Pte. Ltd.

April 2016
July 2016
April 2017
April 2018
June 2018

Managing Executive Officer, Division Manager of IT Solutions Services
SBU. of the company
Senior Managing Executive Officer, Division Manager of Industries &Solutions SBU of the company
Senior Managing Executive Officer, Division Manager of Industries &Solutions SBU of the Company
Senior Managing Executive Officer, in charge of Industries & Solutions
SBU, Business Innovation Div., Division Manager of Business Innovation
Div. of the Company
Senior Managing Executive Officer, Sector Manager of Service Strategy
Sector of the Company
Director, Senior Managing Executive Officer and Sector Director of Service
Strategy Sector of the Company (to present)

Josaku Yanai, Director and Senior Managing Executive Officer
Date of Birth: November 14, 1963
April 1987
Joined the Long-Term Credit Bank of Japan, Limited
January 2000 Joined Toyo Information Systems Co., Ltd. (currently TIS Inc.)
April 2009
Executive Officer, Department Manager of Corporate Planning & Control
Department., Corporate Planning & Control Division of the company
April 2011
Executive Officer, Division Manager of Corporate Planning Division of theCompany
May 2015
Managing Executive Officer, Division Manager of Corporate Planning
Division of the Company
June 2016
Director, Managing Executive Officer and Division Manager of Corporate
Planning SBU of the Company
July 2016
Director, Managing Executive Officer, in charge of Corporate Planning
SBU and Corporate Management SBU of the Company
Division Manager of Corporate Planning SBU of the Company
April 2018
Director, Senior Managing Executive Officer and Sector Director ofIndustry Strategy Sector of the Company (to present)

Takayuki Kitaoka, Director
Date of Birth: December 14, 1960
April 1984
Joined INTEC Inc.
January 2005 General Manager of Product Solutions Marketing Dept. of the company
April 2008
Manager of N&O Business Promotion Dept. of the company
April 2012Manager of Corporate Planning Department of the Company
April 2015
General Manager of BPO Division of INTEC Inc.
April 2016
Executive Officer, General Manager of Corporate Planning Division of
INTEC Inc.
April 2017Managing Executive Officer, General Manager of Corporate Planning
Division of the company
April 2018
President and Representative Director of the company (to present)
June 2018
Director of the Company (to present)

Akira Shinkai, Director
Date of Birth: March 24, 1959
February 1986 Joined Yokogawa U System Corporation
April 2000
Joined YDC Corporation
June 2001
Director of the company
October 2009 Joined Nippon System Gijutsu Co., Ltd.
June 2010
Director and Managing Executive Officer of the company
April 2011
Joined INTEC Inc.
Deputy General Manager of NSG Department of the company
June 2012
Executive Officer, General Manager of NSG Department of the company
May 2015
Managing Executive Officer, General Manager of Industrial Solutions
Business Division of the company
April 2016
Managing Executive Officer, General Manager of Metropolitan Social
Service Headquarters of the company

April 2018

June 2018

Director, Executive Vice President, in charge of Corporate Information
Department, Business Strategy Promotion Division, and Metropolitan
Distribution Service Headquarters, and General Manager of Metropolitan
Distribution Service Headquarters of the company (to present)
Director of the Company (to present)

Koichi Sano*, External Director
Date of Birth: August 30, 1948
April 1971
Joined Mitsui Petrochemical Industries, Ltd. (currently Mitsui Chemicals,
Inc.)
June 2003
Executive Officer and Manager of Finance Department of the company
June 2005
Executive Director of the company
June 2009
Executive Vice-President and Representative Director of the company
June 2013
Special Councilor of the company
June 2015
Retired from the company
June 2016
Director of the Company (to present)

Fumio Tsuchiya*, External Director
Date of Birth: May 10, 1948
July 1971
Joined Japan Airlines Co., Ltd.
July 1995
Regional Manager of Madrid Branch of the company
May 1999
Director and Section Manager of Corporate Planning Section of JAL Hotels
Co., Ltd. (currently Okura Nikko Hotel Management Co., Ltd.)
April 2001
Manager of Corporate Planning of Japan Airlines Co., Ltd.
October 2002 Executive Officer, Deputy Section Manager of Corporate Planning Section,
Integration Promotion Office of Japan Airlines System, Inc. (currently Japan
Airlines Co., Ltd.)
April 2004
Executive Officer and Section Manager of Corporate Planning Section of
the company
June 2004
Director and Section Manager of Corporate Planning Section of Japan
Airlines Corporation (currently Japan Airlines Co., Ltd.)
April 2006
Managing Director, in charge of PR & IR, Legal Affairs and General Affairsof the company
June 2007
President & CEO of JALCard, Inc.
June 2010Retired from the company
August 2010 Section Manager of Internal Auditing Office of Faith, Inc.
June 2011
Full-time Audit & Supervisory Board Member of the company
June 2017
Director of the Company (to present)

Naoko Mizukoshi*, External Director(Partner of Endeavour Law Office)Date of Birth: September 23, 1967
April 1993
Joined Legal Training and Research Institute of Supreme Court of Japan
April 1995
Registered as a lawyer with Osaka Bar Association
Joined Miyazaki Sogo Law Office (currently Legal Professional Corporation
Miyazaki Sogo Law Office)April 1998
Registered as a lawyer with Yokohama Bar Association (currently Kanagawa
Bar Association)
Joined Legal Department of Nomura Research Institute, Ltd.
September 1999 Registered as a lawyer with Daini Tokyo Bar Association
Joined Legal Department of Autodesk, Ltd.
September 2002 Joined Legal Headquarters of Microsoft Co., Ltd.
Registered as a lawyer in the State of California, U.S.A.
November 2006 Joined TMI Associates
January 2008 Partner of TMI Associates
March 2010
Founded Endeavour Law OfficePartner of Endeavour Law Office (to present)
June 2018
Director of the Company (to present)

51

ProfileGroup History

Value Creation Process

Date of Birth: November 5, 1953
April 1976
Joined the Long-Term Credit Bank of Japan, Limited
October 2001 Joined SORUN Corporation
June 2007
Director and Executive Officer of the company
April 2011
Managing Executive Officer, Division Director of the Financial Industry
SBU., Financial Industry HQ. and Division Manager of the Financial Systems
Div. 3 of TIS Inc.
October 2011 Managing Executive Officer and Deputy Division Manager of Financial
Industry SBU. of the company
April 2012Managing Executive Officer and Deputy Division Manager of Corporate
SBU. of the company
June 2012
Director of the Company
Deputy General Manager of Corporate SBU of TIS Inc.
Deputy General Manager of Corporate SBU of the company
June 2013
April 2014
Managing Executive Officer and Division Manager of Corporate SBU. of
the company
Advisor to the company
April 2016
June 2016
Full-time Audit & Supervisory Board Member of the Company (to present)

Taigi Ito*, External Audit & Supervisory Board Member(Certified Public Accountant and President, Ito Office)Date of Birth: October 13,1946
January 1970
Joined Tsuji Audit Corporation
February 1989 Representative Partner of MISUZU Audit Corporation
July 2004
Deputy Chairman of the Japanese Institute of Certified Public Accountants
August 2007
Chief of Ito CPA Firm(to present)
April 2009
Professor at Graduate School of Accountancy, Waseda University
June 2012
Audit & Supervisory Board Member of the Company (to present)

Muneaki Ueda*, External Audit & Supervisory Board Member(Chairman, Professional Bank, Inc.)
Date of Birth: January 1,1948
August 1983
Joined Temporary Center Inc. (currently, Pasona Inc.)
January 1988
Executive Director and Manager of International Division and Manager ofBusiness Development Dept. of Pasona Inc.
President and Representative Director of Pasona N A, Inc.
April 1991
Executive Managing Director and General Manager of Sales Division of
Pasona Inc.
June 1993
Director and Vice-President of Pasona Inc.
June 2000
President and Representative Director of Pasona Inc.
August 2004
President and Representative Director of Professional Bank Inc.
April 2007
Chairman and Representative Director of Professional Bank Inc. (topresent)
June 2012
Audit & Supervisory Board Member of the Company (to present)

Sadahei Funakoshi *, External Audit & Supervisory Board Member
Date of Birth: August 15,1954
April 1977
Joined Mitsubishi Corporation
March 2003
Transferred to Mitsubishi Corporation Financial & Management Services(Japan) Ltd. as Director and Vice-President
Transferred to Mitsubishi Corporation LT, Inc. as Advisor
April 2009
Director and Managing Executive Officer of Mitsubishi Corporation LT, Inc.
June 2009
June 2011
Director and Senior Managing Executive Officer of Mitsubishi Corporation
LT, Inc.
January 2013
Representative Director and Senior Managing Executive Officer of
Mitsubishi Corporation LT, Inc.
May 2013
Statutory Auditor of IT Frontier Corporation
Statutory Auditor of TATA Consultancy Services Japan, Ltd.
July 2014
Full-time Audit & Supervisory Board Member of the Company (to present)
June 2016* As of June 26, 2018*	Designated for Independent Director/Auditor as specified by the Tokyo Stock Exchange inJapan.
*	As of July 1, 2016, the Company (previous name, IT Holdings Corporation) changed its
name to TIS Inc. due to the absorption-type merger with the previous TIS Inc. (an absorbed
company), wholly-owned subsidiary of the IT Holdings Corporation (a surviving company).

52
Consolidated Financial/
Non-Financial Highlights

To Our Stakeholders

Medium-Term
Management Plan

Group Business Strategies

Platform that Supports
Value Creation Process(ESG Section)

Consolidated
Financial Summary

Corporate Data

Nomination Committee and Compensation Committee
The Nomination Committee and the Compensation

Summary of Results of Analysis and Evaluation of Effectiveness of Entire Board of Directors

the corporate governance structure.

Committee were established as advisory bodies to the

The president and representative director chairs theBoard of Directors to ensure objectivity and transparency

committee, with the majority of members, including thein decision-making processes pursuant to appointment ofcommittee chair, being independent outside directors.

directors and associated compensation and to strengthen

Management Committee
The Company has established the Management

affecting business execution at the Company and theCommittee to deliberate and report on important matters

Group as a whole.

Executive Officer System
The Company has adopted an executive officer system tobusiness execution to Executive Officers, and theseaccelerate management decision-making and supervisory

Executive Officers provide specific direction, orders, andfunctions of the Board of Directors. Directors delegate

supervision to each business unit head.

Audit & Supervisory Board Members and Audit & Supervisory Board
The Audit & Supervisory Board comprises five auditors (ofto receiving the annual financial audit plan and reportingwhich three are external auditors). Each auditor will per-on results of financial audits from Ernst & Youngform audits of directors’ business execution in accordance

ShinNihon LLC, with which the Company has entered andwith the audit & supervisory policies established by theauditing contract. Furthermore, the Audit & Supervisory

Audit & Supervisory Board. In addition, the Company

Board receives the audit reports of the auditing depart-works closely with its financial auditors, exchanging infor-

ment and exchanges opinions on a regular basis.

mation and sharing opinions on a regular basis in addition

Viewpoint regarding Composition of Board of Directors

Since fiscal 2016, ended March 31, 2016, the Company
has evaluated the effectiveness of the Board of Directors
each fiscal year in order to reveal issues and points for
improvement that will lead to initiatives to increase theeffectiveness of the Board of Directors. With respect to theevaluation in fiscal 2018, the Company provided an anonymous questionnaire to comprehensively conduct selfevaluation and self-analysis regarding the composition andoperation of the Board of Directors to all directors andauditors, and the Board of Directors held discussions
based on the results of the questionnaire. The method of
evaluation, results of the evaluation, as well as current andfuture issues and responses to them in light of the evaluation are described below.
1. Method of evaluation
The Company distributed a questionnaire regarding theeffectiveness of the Board of Directors to all directors andauditors, and obtained responses. Based on these responses, the Company’s Board of Directors analyzed and evaluated the effectiveness of the Board of Directors.
Note that the Company conducted this effectivenessevaluation based on verification by an external attorney.
2. Results of analysis and evaluation of effectiveness of theBoard of Directors
The Company’s Board of Directors concluded that a certain
degree of effectiveness had been ensured to appropriately
supervise the approval of important management mattersand business execution, such as the state of business
implementation and investments at the Company andGroup companies, through deliberation based on ­collective
decision-making regulations and Group administration regulations. In addition, it concluded that effectiveness wastending to improve as a result of improvement measures
based on the results of the evaluation of the effectivenessof the Board of Directors in the previous ­fiscal year.

3. C urrent and future issues and responses to them basedon analysis and evaluation
In light of the analysis and evaluation previously mentioned, the Company will focus its efforts on tackling thefollowing issues especially.
(1)	Concentration on important themes at the Board of
Directors
The Company will concentrate on discussing themes thatshould be focused on at meetings of the Board of
Directors and manage Board meetings effectively. Since
fiscal 2018 the Company has been implementing the new
medium-term management plan that it endeavored to formulate last fiscal year, and it will continue to discuss
important issues such as business strategy, humanresource strategy and investment strategy in light of thestate of competition and market trends.
(2)	Effective and efficient management of meetings of theBoard of Directors
We will encourage explanation at meetings of the Boardof Directors to enable Board meetings to be conducted
more effectively and efficiently.
(3)	Enhancement of supervisory function for execution ofimportant business at Group companies
We will continuously strengthen management of Group
companies at the Board of Directors and enhance supervisory functions.

The Board of Directors shall be composed of no more thanbears a responsibility to ensure sustainable growth and

15 directors, at least two of whom shall be independentenhance medium- to long-term corporate value. In theexternal directors. The Board of Directors recognizes its

case of directors that constitute the Board of Directors,

fiduciary responsibility toward shareholders, supervises

after engaging in discussion at meetings of the Board of

When nominating candidates for director, auditor and­comprises several corporate officers, including a majority

management strategy, management plans and other

Directors, the Company shall nominate persons who haveother such positions, the Company shall conduct discus-of independent external corporate officers, based on theimportant decision-making and business execution of theextensive experience, strong insights and a high level ofsions at meetings of the Board of Directors regarding

selection criteria that the Company prescribes. The pur-Company, as prescribed by laws and regulations, thespecialization that is appropriate for these obligations

people who have extensive experience, strong insights

pose of this is to realize effective corporate governancebased on the election criteria prescribed by the Company.

and a high level of specialization that is appropriate as

and contribute to the Company’s sustainable growth asa director or auditor, after receiving a report at Board

well as the enhancement of its medium- to long-term

meetings from the Nomination Committee, which

corporate value.

Articles of Incorporation and Company regulations, andPolicy and Procedures for Election and Nomination of Directors, etc.

53

ProfileOn the other hand, the Company’s Board of Directors
confirmed that it was necessary to concentrate on themesthat should be taken up in Board meetings and to further
enhance the efficiency of explanations at Board meetingsin order to conduct Board meetings more effectively andefficiently. Moreover, the Board acknowledged that it wasnecessary to further strengthen the supervisory function ofGroup companies.

Group History

Value Creation Process

54
Consolidated Financial/
Non-Financial Highlights

To Our Stakeholders

Medium-Term
Management Plan

Group Business Strategies

Platform that Supports
Value Creation Process(ESG Section)

Consolidated
Financial Summary

Corporate Data

Reason for Election of Directors and Audit & Supervisory Board Members
External Directors

Directors

Toru
KuwanoMasahiko
AdachiAfter assuming the office of President and Representative Director of the Company’s Group company, Mr. Kuwano
was appointed as a Director of the Company in June 2013. Since June 2016, he has assumed the office ofPresident and Representative Director of the Company. He has a wealth of experience and knowledge about theCompany’s and its Group’s business, as well as in business administration.
He had also been assuming duties in the execution of the previous Medium-term Management Plan (fromfiscal 2016 to fiscal 2018) to fulfill the function as an operating holding company. He was appointed as a Director
since he is highly expected to continue to promote the new Medium-term Management Plan and fulfill theduties of significant decision-making for the Company’s Group as well as the administration and oversight ofbusiness management.
Mr. Adachi has been in the office of Executive Vice President since April 2018 following the office of Division
Manager of corporate department and financial system department of a financial institution and the Company’sGroup company. Based on these experiences, he was appointed as a Director since he is highly expected to promote group governance on corporate function of the new Medium-term Management Plan of the Company’sGroup, and fulfill the duties of significant decision-making for the Company’s Group and oversight of business
management.

To help the Group post constant growth and achieve higher corporate value over the medium to long term, TIS strives to keep participation of external directors in good balance with inside directors and looks for people who possess diverse knowledge, experience andcapabilities.

KoichiSano■ Corporate

management■ Financial

accounting

Fumio
Tsuchiya■ Corporate

management■ Industry

knowledge

YasushiOkamotoMr. Okamoto had been engaged in corporate business in the corporate planning department of the Company formany years and has been serving as Senior Managing Executive Officer and Division Manager of the planning anddevelopment department of industrial systems since July 2016. Based on these experiences, he was appointed as a
Director since he is highly expected to promote the new Medium-term Management Plan, and ­fulfill the duties ofsignificant decision-making for the Company’s Group and oversight of business management.

JosakuYanai

Mr. Yanai was mainly engaged in corporate section in the corporate planning department of the Company and
its Group company for many years. He assumed the office of Executive Officer and Division Manager of corporate
planning division of the Company in April 2011. Since June 2016, he has been serving
as a Director of the Company. He has a wealth of experience and knowledge about the Company’s and its
Group’s business, as well as in business administration.
Based on these experiences, he was appointed as a Director since he is highly expected to continue to promote the new Medium-Term Management Plan, and fulfill the duties of significant decision-making for theCompany’s Group and the administration and oversight of business management as a Director.

Takayuki
Kitaoka

Mr. Kitaoka was engaged in business related to IT infrastructure of INTEC Inc., the Company’s major subsidiary,and had served for management administration of the Group companies at the Company for three years sinceApril 2012.
Furthermore, he has assumed the office of President and Representative Director of INTEC Inc. since April
2018. Based on these experiences and with his sight on the Group management, he was appointed as a Director
since he is highly expected to promote the duties of INTEC Inc. assigned by the new Medium-term Management
Plan, and fulfill the duties of significant decision-making for the Company’s Group and the administration andoversight of business management.

Akira
Shinkai

Mr. Shinkai was engaged in business of new service planning and marketing and has assumed the office of
Director and Executive Vice President of INTEC Inc., the Company’s major subsidiary, since April 2018.
Based on these experiences, he was appointed as a Director since he is highly expected to promote the new
Medium-term Management Plan, and fulfill the duties of significant decision-making for the Company’s Groupand the administration and oversight of business management.

■ International

experience

Naoko
Mizukoshi■ International

experience■ Legal work
■ ICT

Mr. Sano worked mainly in the finance and accounting departments, and served as Executive Vice-President andRepresentative Director of Mitsui Chemicals, Inc., and has a wide range of experience and a wealth of expertisein corporate management. He was appointed as an External Director since his advice and suggestions from an
independent perspective by utilizing these experiences and expertise in the Company’s business will ensure thatthe decisions to be made by the Company’s Board of Directors will be reasonable and appropriate, and he ishighly expected to be a person who will contribute to the enforcement of the corporate governance of theCompany.
Mr. Tsuchiya previously worked in an important position in overseas offices and the Corporate Planning
Department of Japan Airlines Co., Ltd. After having assumed the office of Director of Japan Airlines in June 2004,
he served as Managing Director and was thereafter appointed as President & CEO of JALCard, Inc. in June 2007,
which is a group company of Japan Airlines. He has a wide range of experience and a wealth of expertise in corporate management.
He was appointed as an External Director since his advice and suggestions from an independent perspectiveby utilizing these experiences and expertise in the Company’s business will ensure that the decisions to be madeby the Company’s Board of Directors will be reasonable and appropriate, and he is highly expected to be a person
who will contribute to the enforcement of the corporate governance of the Company.
Ms. Mizukoshi is a qualified lawyer and has a wealth of professional knowledge and experiences on intellectual
property, ICT and international transactions.
Her advice and suggestions from an independent perspective will ensure that the decisions to be made by
the Company’s Board of Directors will be reasonable and appropriate by utilizing these experiences and expertisein the Company’s business, and she is highly expected to be a person who will contribute to the enforcement of
the corporate governance of the Company.
She has not participated in the corporate management but has expertise on corporate legal works.
Therefore, she was appointed as a External Director since she could discharge duly duties of External Director.

55

ProfileGroup History

Value Creation Process

56
Consolidated Financial/
Non-Financial Highlights

To Our Stakeholders

Medium-Term
Management Plan

Group Business Strategies

Platform that Supports
Value Creation Process(ESG Section)

Consolidated
Financial Summary

Corporate Data

Audit & Supervisory Board Members

For reference: Criteria Concerning Independence of External Officers

Kei
Ando

Mr. Ando has a wealth of expertise in finance and accounting as well as corporate management based on experience accumulated through his service at financial institutions and management of companies over many years.
He was appointed as an Audit & Supervisory Board Member, as he is expected to discharge audit and supervisory duties regarding the execution of duties of the Company’s directors in a fair and appropriate manner.

Katsuhiko
Ishii

Mr. Ishii worked for a financial institution and served as General Manager of the Corporate Department of aGroup company. He also served as an advisor at the same Group company. Based on these experiences, he wasappointed as an Audit & Supervisory Board Member as he can be expected to oversee the execution of duties of
the Company’s Directors in a fair and appropriate manner.

External Audit & Supervisory Board Members
To help the Group post constant growth and achieve higher corporate value over the medium to long term, TIS strives to keep participation of external audit & supervisory board members in good balance with inside members and looks for people who possess diverse
knowledge, experience and capabilities.

Taigi Ito
■ Corporate

management■ Financial

accountingMuneaki
Ueda■ Corporate

management■ International

Mr. Ito is a licensed Certified Public Accountant. His expertise and knowledge in the field of finance and accounting and professional experience are beneficial to the Company in enforcing its audit system. Although he was notdirectly involved in corporate management, he was appointed as an External Audit & Supervisory Board Member
as he was considered to be well qualified to appropriately perform the duties of Audit & Supervisory Board
Members given the above credentials.

Mr. Ueda has a wealth of experience and wide-ranging insight as a corporate executive. He was appointed as anExternal Audit & Supervisory Board Member in expectation of obtaining his overall management advisory andmanagement oversight on execution of duties from an external perspective.

experience

Sadahei
Funakoshi■ Industry

knowledge■ International

experience

Mr. Funakoshi has a wealth of experience and knowledge in corporate management, with his experience in the
management of investment and loan, credit and administrative departments of Mitsubishi Corporation, as well as
his service as an auditor at IT companies. He was appointed as an External Audit & Supervisory Board Member in
expectation of obtaining his overall management advisory and management oversight on execution of duties
from an external perspective.

Training Policy for Directors and Auditors
For directors and auditors, including external directors andexternal auditors, the Company will provide and arrange
training opportunities that are appropriate for individual
directors and auditors and support the cost of such training. The objective of such training is to provide an opportunity to acquire necessary knowledge regarding theGroup’s businesses, financial affairs and organization andto understand the duties and responsibilities required for
directors and auditors when assuming office, as well as tocontinuously update these attributes during the term ofoffice.

External Directors and External Auditors
The Company has three external directors and three­external auditors. The determination of the independenceof external directors and external auditors is prescribedby the requirements of the Companies Act as well asj­udgement criteria to ensure the independence of external
directors and external auditors as described below, withreference to the rules and regulations of the Tokyo Stock
Exchange.

To strengthen the supervisory function of the Board of Directors, the determination of the independence of external
directors and external auditors (referred to as “external officers” hereafter) is prescribed by the requirements of theCompanies Act as described below, with reference to the rules and regulations of the Tokyo Stock Exchange.
1.	External directors (including candidates) are defined by Article 2, Paragraph 15 of the Companies Act (Requirements ofExternal Directors) and have never served as an executive director, manager or other employee of the TIS INTEC Group(Note 1) even in the past.
2.	External auditors (including candidates) are defined by Article 2, Paragraph 16 of the Companies Act (Requirements ofExternal Company Auditors) and have never served as a director, manager or other employee of the TIS INTEC Groupeven in the past.
3.	In the current fiscal year and during the past nine fiscal years, none of each of the following items shall apply to
external officers.
I.	A counterparty which has transactions principally with the Company (Note 2) or a person who executes thatcounterparty’s businessII.	A counterparty which has transactions principally with the TIS INTEC Group (Note 3) or a person who executes thatcounterparty’s businessIII.	A consultant, accounting professional or legal professional who has received a large amount of money or otherassets (Note 4) other than remuneration of officers from the Company. In addition, when these are received by anorganization such as a corporation or partnership, this includes persons who belong to the applicable organization.
IV.	A major shareholder of the Company (Note 5). In addition, when the major shareholder is a corporation, thisincludes a person who executes the business of the corporation.
V.	A person other than those in (I), (II) and (III) above who executes the business of a counterparty of the Company(Note 6)
VI.	A person who was formerly a member of a counterparty which is in a situation of cross-assumption of offices ofexternal officers
VII. A counterparty or former member of the counterparty that receives donations from the Company
4. External officers must not be a relative within the second degree of a person who falls under each of the following items.
I. A person mentioned in (I) to (III) of the previous clause
II. A person who executes the business of a subsidiary of the Company
III. A non-executive director of a subsidiary of the Company (limited to external auditors)IV.	A person who fell under (II) or (III) above or a person who executes the business of the Company (including a nonexecutive director in the case of an external auditor) recently (in the current business year and during the past fourbusiness years)
5.	In addition to the above, there exist no circumstances in which duties imposed on an independent external officer arereasonably deemed not to be achieved.
Note 1: The “TIS INTEC Group” means the Company and its subsidiaries.
Note 2:	A “counterparty which has transactions principally with the Company” means a counterparty which provides
products or services to the Company and whose payments from the Company constitute at least 2% of thesales of such counterpart in one fiscal year. The main bank (MUFG Bank, Ltd.) and the lead managing
underwriters (Nomura Securities Co., Ltd., Mitsubishi UFJ Morgan Stanley Securities Co, Ltd., and SMBC Nikko
Securities Inc.) of the Company shall also each be a “counterpart which has transactions principally with theCompany,” regardless of the transaction amount.
Note 3:	A “counterparty which has transactions principally with the TIS INTEC Group” means a counterparty with sales
exceeding 2% of the total consolidated sales of the TIS INTEC Group.
Note 4:	"A large amount of money or other assets” means the total value exceeds 10 million yen per fiscal year. This
shall apply also to a consultant, accounting professional or legal professional that enters a consulting agreement
or similar arrangement and periodically pays an amount of money or other assets, regardless of the amount.
Note 5:	A “major shareholder” means a person or company, and the like, that directly or indirectly holds 10% or moreof total voting rights. However, the Company’s leading shareholders (the top 10 approximately) shall be treatedas “major shareholders."
Note 6:	A “counterparty which has transactions with the Company” means the case when transactions with theCompany per fiscal year constitute at least 2% of non-consolidated sales of the Company.

57

ProfileGroup History

Value Creation Process

58
Consolidated Financial/
Non-Financial Highlights

To Our Stakeholders

Medium-Term
Management Plan

Group Business Strategies

Platform that Supports
Value Creation Process(ESG Section)

Consolidated
Financial Summary

Corporate Data

Primary Activities of External Directors and External Auditors (Year ended March 31, 2018)
StatusName

Primary Activities

Director

Yoshinobu
Ishigaki

Mr. Ishigaki attended all 16 meetings of the Board of Directors held in fiscal 2018. He provided
comments as necessary in discussions of matters for resolution, based on his experience in theindustry and in corporate management and the insights thus gained.

Director

KoichiSano

Mr. Sano attended all 16 meetings of the Board of Directors held in fiscal 2018. He provided
comments as necessary in discussions of matters for resolution, based on his experience in corporate management and the insights thus gained.

Director

Fumio
Tsuchiya

Mr. Tsuchiya attended 10 of 12 meetings of the Board of Directors held after his appointment
on June 27, 2017. He provided comments as necessary in discussions of matters for resolution,
based on his experience and insights regarding corporate management.

AuditorTaigi Ito

Mr. Ito attended 15 of 16 meetings of the Board of Directors and all 13 meetings of the Audit &Supervisory Board held in fiscal 2018. He provided comments as necessary in discussions of matters for resolution, from the specialized perspective of a Certified Public Accountant.

AuditorMuneakiUeda

Mr. Ueda attended 15 of 16 meetings of the Board of Directors and all 13 meetings of the Audit& Supervisory Board held in fiscal 2018. He provided comments as necessary in discussions ofmatters for resolution, based on his experience and insights into corporate management.

AuditorSadahei
Funakoshi

Mr. Funakoshi attended all 16 meetings of the Board of Directors and all 13 meetings of the
Audit & Supervisory Board held in fiscal 2018. He provided comments as necessary in discussions of matters for resolution, based on his experience and insights into corporate management.

Note: Director Yoshinobu Ishigaki completed his term as of the 10th Annual General Meeting of Shareholders convened on June 26, 2018, and retired from his position.

(excluding external directors) shall contribute at least acertain portion of their basic remuneration to the purchaseof the Company’s own stock through the share ownershipplan for directors and officers, and they shall retain suchstock in full for the duration of their period in office sothat the acquired stock shares value with all shareholders.
Note that in order to enhance awareness of contributing to an improvement in medium- to long-term business

Remuneration for Directors and Audit & Supervisory Board Members (Year ended March 31, 2018)

Basic remuneration

Performance-linked
remuneration

Directors (except external directors)

204

159

44

4

Audit & Supervisory Board Members(except external members)

41

41

—

2

External officers

50

50

—

7

Constructive Dialogue with Shareholders

under Article 423, Paragraph 1 of the same law.
The limit of liability compensation, based on these
agreements, is an amount prescribed by the provisions ofArticle 425, Paragraph 1, of the same law.

In the case of dialogue with shareholders, the corporate
communication department will strive to ensure that theopinions of shareholders are shared at the entire Board of
Directors by responding appropriately after consideringGroup History

and scope of responsibilities of each position.
Performance-linked remuneration is linked to attainment of
the measures of company performance established on thebasis of the management plan for each fiscal year, and shallnot exceed the proportion of basic remuneration (up to a
maximum of 30%) determined for each position.
Remuneration paid to external directors consists onlyof basic remuneration and performance-linked remuneration will not be paid.
In addition, remuneration is paid to auditors after being
determined through consultation by auditors. It is not
linked to performance and consists solely of basic remuneration in order to ensure a high degree of independence.
Furthermore, based on the viewpoint of reflecting
medium- to long-term business performance, directors

Value Creation Process

the method of response with the President andRepresentative Director, the director in charge, and theexecutive officer in charge.

Strategically Held Shares
1. Policy regarding acquisition and ownership of strategically held shares
The Company holds the shares of other companies only
when it believes this is necessary for such purposes asestablishing long-term, stable relationships with customers
and promoting business that will contribute to the Com­pany’s sustainable growth and the enhancement of its
medium- to long-term corporate value. Each year, we regularly verify that major strategic holdings will contribute to
the Company’s sustainable growth and the enhancementof its medium- to long-term corporate value.

2. Policy on exercising voting rights relating to strategically held shares
The Company appropriately exercises voting rights forlisted shares that it holds after comprehensively determining whether this will contribute to the Company’ssustainable growth and the enhancement of its mediumto long-term corporate value and whether this will contribute to the common interests of the shareholders of
the investee company.

Takeover Defense Measures
TIS has not introduced takeover defense measures.

59

ProfileRecipients(Persons)

Note 1:	The Company does not maintain a retirement bonus system for directors, and does not pay any directors’ bonuses.
Note 2:	Remuneration for directors in fiscal 2018, ended March 31, 2018, does not include the employee portion in the case of directors.
Note 3:	As of March 31, 2018, the Company had seven (7) directors, excluding external directors. The discrepancy between the number of directors and thenumber shown under "Recipients" is due to three (3) directors that received no remuneration.
Note 4:	The above includes one (1) external director who retired as of the conclusion of the 9th Ordinary General Shareholders Meeting held on June 27, 2017.

Outline of Policy on Officers’ Remuneration
To ensure the objectivity and transparency of the remuneration determination process and further strengthen thecorporate governance system, the Company has established a voluntary remuneration committee mainly comprising external directors as an advisory body to the Boardof Directors.
The basic policy on officers’ remuneration is to provide
incentives to improve performance through a system of
remuneration linked to measures of Company performance,and remuneration is determined based on resolutions
adopted by the Board of Directors in light of discussions at
the Remuneration Committee and its reports.
The Company’s remuneration for directors consists ofbasic remuneration and performance-linked remuneration.
Basic remuneration is paid according to the size of the role

Remuneration by type

Remuneration(Millions of yen)

Outline of Liability Agreements
In accordance with Article 427, Paragraph 1 of theCompanies Act, each external director and external auditor enters into an agreement with the Company that limits
legal responsibility for liability compensation as set forth

performance and an increase in corporate value, as wellas to share interests with all shareholders, the Company
introduced a performance-linked stock remuneration system targeting the Company’s directors, executive officers
and executive fellows (excluding external directors, nonexecutive directors and residents outside Japan) in fiscal
2019.

60
Consolidated Financial/
Non-Financial Highlights

To Our Stakeholders

Medium-Term
Management Plan

Group Business Strategies

Platform that Supports
Value Creation Process(ESG Section)

Consolidated
Financial Summary

Corporate Data

Business Risks

Status of Internal Control Systems and Risk Management Structure
The Company revised its Basic Policies Regarding Internal Control Systems at a meeting of the Board of Directors on June24, 2016, in order to accommodate the merger by absorption with wholly owned subsidiary TIS Inc. on July 1, 2016. The
revisions reflect changes to the management structure resulting from the Company’s adoption of an operating holding
company structure, and internal control systems have been developed and put into effect based on the new policies.
More specifically, the Company has adopted a “Group Management Philosophy” and “Basic Group Policy on CSR,” inaccordance with which it is working to ensure business is conducted properly and to make improvements that enhance
corporate value by developing group-wide internal control systems (including structures for business administration,­compliance, risk management, and internal audits).
Internal control at the Company is organized as follows.

Risks with the potential to significantly impact the operations—

4. System development

business results and financial position—of the Group are

The Group provides information system services and contracted

described below. Note that forward-looking statements men-development services to other companies. Quality control andtioned in these materials are based on information available toproductivity are being continually improved by thoroughlymanagement as of June 27, 2018.

reviewing project proposals and processes. These reviews are
conducted by dedicated teams in accordance with our quality

1. Price competition and heightened competition

management system. Level-specific training is also being

Competition in the information services industry is fierce andenhanced to improve our management and technological capa-

the rising number of entrants from other industries may further

bilities. Measures to enhance quality and facilitate adoption ofincrease price competition. The Group seeks to distinguish itself

production innovations are additionally being implemented

from its competitors by adding greater value to the information

throughout the entire Group under the leadership of the Group

services that it provides and by improving productivity. However,

Production Innovation Committee. As systems development is

the Group’s business activities and results may be affected if

growing more sophisticated and complex and turnaround times

price competition is greater than expected.

are shortening, however, customer requirements may change inthe course of a project and necessitate extra work in order toGroup Internal Control Committee
The Group Internal Control Committee identifies issues concerning the internal control of the Group as a whole, assesses
progress on implementing improvements, and performs other related tasks from the following four standpoints.
Compliance
The Committee deliberates significant compliance issues affecting the Group as a whole and embeds good compliancepractices throughout the Group by determining and managing progress on implementation of measures to prevent­recurrences of incidents in accordance with compliance regulations.
The Committee has also introduced an internal group-wide whistleblower system and launched a whistleblower support service as means of preventing illegal acts and detecting and rectifying them as soon as possible when they occur,and it is working to raise awareness of legal compliance throughout the Group.
Risk Management
The Committee classifies the risks facing the Group as a whole into hazard risks, operational risks, financial risks, and­strategic risks, and it has established structures for managing these risks and systems of accountability should crises arisein accordance with risk management regulations.
The Committee has also drawn up group risk management policies for the Company and the Group as a whole, and it
monitors risks, promotes risk mitigation measures, and confirms the state of implementation of risk countermeasures.
Information Security
The Committee ascertains, assesses, and promotes improvements to the standard of information security management
throughout the Group in accordance with regulations on promoting group information security. The Committee has also
set up investigative committees when information security incidents occur, and it has established systems of accountability
and other structures to resolve incidents (including by identifying causes, implementing countermeasures, and pursuingmeasures to prevent a recurrence).

2. Legal systems and complianceachieve the planned level of quality or complete the projectGroup companies pursue their business activities in line withduring the development period. If this occurs, considerably

prevailing laws and regulations in Japan and overseas.

higher than expected costs may be incurred.

Individual companies have established their own compliance

We also outsource some systems development work tosystems and pursue rigorous legal compliance in accordance

numerous companies for various reasons, including in order towith the Group’s basic policy on CSR. However, the Group’s

gain access to more production capacity, improve production

business activities and results may be affected if legal violations

efficiency, or make use of other companies’ technologicaloccur or additional laws or regulations are put into force.

resources. While we make every effort to work with partnersof good standing in Japan and overseas, the Group’s business

3. Overseas businessactivities and results may be affected if the productivity or

As part of its growth strategy, the Group seeks to expand its­quality of work produced by a partner does not meetpresence overseas, especially in the ASEAN region. Overseas­expectations and project management is impeded as a result.

business can be affected by a variety of factors, including global
economic trends, exchange rate movements, legal regulations

5. System operation

pertaining to investment and competition, business practices,

The Group delivers 24/7/365 outsourcing and cloud services via

and labor-management relations. Steps are being taken todata centers and other large IT facilities. Developing these ser-strengthen risk management of overseas business by, among

vices requires large outlays, ranging from initial investment inother things, having overseas group companies and operations

equipment to ongoing investment in keeping this equipment

work hand in hand with TIS’s core organizations to keep a closerunning. Although we track business projects and recover capi-

track of circumstances and consult promptly on countermea-

tal invested, business results may be adversely affect if capacity

sures. However, the Group’s business activities and results may

utilization is particularly low due to weaker than expected

be affected if these risks materialize in an unexpected form.

demand. In addition, although system operations are being
continuously improved in adherence to our quality management system, the Group’s business activities and results may beaffected if disruptions caused by hardware failures or human

Assessment of Development and Operation Status of Internal Control Systems
The Committee promotes various measures to maintain and improve group-wide internal controls in accordance with the
Basic Policies Regarding Internal Control Systems and other rules and regulations, and it has established processes formonitoring the development and operation status of internal control systems and reporting the findings of deliberationby the Committee to the Board of Directors. Action is then taken to strengthen and improve internal control systems
throughout the Group based on the reports made to the Board of Directors.

error prevent delivery of the level of service agreed with clients.

61

ProfileGroup History

Value Creation Process

62
Consolidated Financial/
Non-Financial Highlights

To Our Stakeholders

Medium-Term
Management Plan

Group Business Strategies

Platform that Supports
Value Creation Process(ESG Section)

Consolidated
Financial Summary

Corporate Data

Consolidated Financial Summary
TIS Inc., and consolidated subsidiaries
Years ended March 31

6. Investment

9. Technological innovation

The Group invests in businesses (including startups) in Japan

In the information services industry, providers must respondand overseas with the aim of achieving business growth andquickly to advances in information technology and to changing

acquiring cutting-edge technologies, and it also invests in soft-

market needs that parallel these advances. The Group is con-ware to develop services. Investment decisions are made in line

stantly exploring and researching information technologies,

with business plans after careful consideration, and progressproduction, development technologies, and other relevant

is periodically confirmed once an investment has been made.

fields to improve its ability to respond to market needs. Given

However, investments may not always deliver the planned

the pace of innovation in a wide range of fields, however,­outcomes due to factors such as unexpected changes in the

the Group’s business results may be affected if it responds

business environment, and the Group’s business results may­inadequately.

(Millions of yen)

Fiscal
2011

Fiscal
2012

Fiscal
2013

Fiscal
2014

Fiscal2015

Fiscal2016

Fiscal2017

Fiscal2018

Net sales

323,173

327,417337,834

346,647

361,025

382,689

393,398

405,648

Cost of sales

261,145

266,159

276,935

283,881294,927

312,153

317,440

321,286

Gross profit

62,027

61,25860,89962,766

66,09770,53575,95884,362

Selling, general and administrative expenses

49,20945,63642,72743,25544,97646,09948,93851,618Operating income

12,81815,621

18,171

19,51021,121

24,43627,01932,743

Recurring profit

12,625

15,393

17,44018,971

21,251

24,521

27,092

32,795

5,985

2,135

5,868

7,913

10,275

12,67816,306

20,62010. Intellectual property rights

Current assets

128,455

142,442

138,219

143,519

140,450

166,666

152,162

168,670

7. Information security

The Group applies for and obtains necessary patents on tech-

Fixed assets

172,620

167,560

164,083

170,091

205,401

169,828

185,459

200,833

The Group may gain access to confidential information, includ-

nologies and business models and registers trademarks in Japan

Total assets

301,076

310,003302,302313,610

345,851

336,495

337,622369,504

ing personal information held by clients as well as informationand overseas to assist its business operations. Although care is

Current liabilities

73,09083,06591,06372,79077,666

91,50878,67681,312on clients’ systems and technologies, in the course of develop-

always taken to avoid infringing the intellectual property rights

Non-current liabilities

76,87575,97253,07976,316

79,39564,44759,743

61,893ing and running systems for them. Efforts are made to properlyof third parties, a claim for damages may nevertheless be madeTotal liabilities

149,965

159,038

144,143

149,107

157,062

155,955

138,420

143,205

manage information in accordance with the TIS INTEC Groupagainst the Group for infringement of another company’s

Net assets

151,110

150,965

158,159

164,502

188,789

180,539

199,202226,298

Information Security Policy. However, the Group’s business­intellectual property rights. The Group’s business activities andactivities and results may be affected if such information isresults may be affected if this occurs.

Total liabilities and net assets

301,076

310,003302,302313,610

345,851

336,495

337,622369,504

Total interest-bearing debt

77,45476,51560,55058,86952,115

46,15835,14432,876

Net income attributable to owners of the parent company

be affected as a result.

leaked, altered, or otherwise affected by such means as a com-

Cash flow from operating activities

27,23623,65821,51525,77022,93825,496

18,95236,386

Cash flow from investing activities(18,957)(15,158)(14,391)(5,334)(17,744)

8,688(23,488)(14,202)

Cash flow from financing activities(18,755)(4,230)(19,883)(5,872)(19,067)(14,979)(18,327)(10,543)

with various systems and structures to deal with a range ofCash and cash equivalents at the end of the term

36,492

41,11928,43343,142

29,48548,65125,73037,545

disasters. However, the Group’s business activities and results

Free cash flow

8,279

8,500

7,124

20,436

5,194

34,184(4,536)22,184The Group relies heavily on human resources and its businessmay be affected in the event of a longer than anticipated

Capital expenditures

18,325

14,096

12,287

12,544

16,873

14,21015,15916,907

activities are significantly influenced by its ability to attract,

power outage, major natural disaster, international conflict, act

Depreciation

12,30812,745

12,92012,454

12,80911,952

11,801

12,572

retain, and train people capable of providing specialized, highof terrorism, serious crime, or similar event that interrupts the

Research and development expenses

1,062

962

1,002

853

1,097

1,086

1,178

996

value-added services to clients. The Group endeavors to attractsmooth running of data center operations.

Amortization of goodwill

1,901

1,882

1,741

1,166

1,052

339

326

289

Goodwill balance at the end of the term

5,551

3,672

1,914

830

2,021

1,393

1,332

1,118

Net income per share—basic (yen)

68.19

24.33

66.86

90.16

117.40145.22189.02241.44

—

24.33

66.83

90.12

—

—

—

—

Dividends per share (yen)

32.00

18.00

21.00

25.00

30.00

33.00

36.00

40.00

Payout ratio (%)

46.9%

74.0%

31.4%

27.7%

25.6%

22.7%

19.0%

16.6%

puter virus or unauthorized access, and a claim for damages is

11. Natural disasters

made against the Group or the Group suffers damage to its

The Group offers outsourcing and cloud services through data

reputation as a result.

centers and other large IT facilities. These facilities are equipped

8. Human resources

and retain talent by such means as creating a corporate culture,
personnel systems, and office environment that allow diverse

12. Securities portfolio

individuals to maximize their potential, and it places a focus

The Group holds stocks to build stable and long-term relation-

on development of human resources by, for example, helping

ships with suppliers and promote sales, and bonds to utilize

employees to acquire qualifications, systematizing training pro-surplus capital. Every effort is made to ensure the security ofgrams, and setting targets for the number of days that training

these investments by checking the financial status, perfor-

should be provided. However, the Group’s business activities

mance, and credit rating of the issuers and other relevant

Net income per share—diluted (yen)Net assets per share (yen)1,636.56

1,636.72

1,714.88

1,782.23

2,108.19

2,031.07

2,265.76

2,602.07

25.7%

24.7%

20.0%

18.8%

15.1%

13.7%

10.4%

8.9%

and results may be affected if recruitment, retainment, and­factors. However, the Group’s business activities and results

Interest-bearing debt ratio (%)

training of talented personnel does not proceed as well as

may be affected in the event of marked fluctuations in the

Equity ratio (%)

47.7%

46.3%

49.8%

49.9%

53.3%

52.5%

57.8%

60.0%

expected.

stock market that lead to accounting losses or other such

Net income to equity capital ratio (ROE) (%)

4.2%

1.5%

3.9%

5.1%

6.0%

7.0%

8.8%

9.9%

­consequences.

Recurring profit to total assets ratio (ROA) (%)

4.1%

5.0%

5.7%

6.2%

6.4%

7.2%

8.0%

9.3%

Number of employees at the end of the term

20,831

20,347

19,55319,081

19,09019,393

19,843

19,877

Number of new-graduate recruits

928

649

356

455

620

688

674

712

Number of regular recruits

370

450

379

549

499

687

575

840

Notes: 1. Total interest-bearing debt indicates the total sum of borrowed money and corporate bonds.
2. Free cash flows indicate the total sum of cash flows from operating activities and cash flows from investing activities.

63

ProfileGroup History

Value Creation Process

64
Consolidated Financial/
Non-Financial Highlights

To Our Stakeholders

Medium-Term
Management Plan

Group Business Strategies

Platform that Supports
Value Creation Process(ESG Section)

Consolidated
Financial Summary

Corporate Data