Integrated Report 2023
Year Ended March 31, 2023 (From April 1, 2022, to March 31, 2023)

TIS Inc.
Sumitomo Fudosan Shinjuku Grand Tower,
17-1, Nishi-Shinjuku 8-chome, Shinjuku-ku, Tokyo, 160-0023, JapanFor further information, contact:
Investor Relations & Shareholder Relations Office,Corporate Management Dept., Corporate Planning SBU
Tel: +81-50-1702-4115 E-mail: tis_ir@tis.co.jp
https://www.tis.com/
TIS202309

Securities Code: 3626

Introduction

OUR PHILOSOPHY (TIS INTEC Group Philosophy)
OUR PHILOSOPHY represents the values of TIS INTEC Group.
It clearly and broadly delineates the thinking and ideals that TIS INTEC Group highly
values in its group’s management, corporate activities, and constituent members.
TIS INTEC Group’s entire business revolves around OUR PHILOSOPHY.

Our mission is to draw on leading-edge digital technology andknow-how to shape completely new concepts and approaches
that solve issues affecting our world.

MissionTo brightly color the future as a mover
Top Message

Guided by this mission, we seek to make society
a more colorful and vibrant place andcreate a tomorrow full of more smiles than yesterday.

TIS INTEC Group Value Creation

IT has the power to make the future brighter.

Growth Strategy for Value Creation
Platform for Value Creation

Management Platform
TIS INTEC Group has a clear business management platform. It can be referred to as our business management model. It isconstructed with “social,” “humanistic,” and “rational” approaches in order to allow TIS INTEC Group to actively progress
toward its mission, based on the fundamental and underlying concept that the corporation is “a social system that aims forhappiness” and engages in value exchange with stakeholders. Let’s take a look at the two models within the platform.
3V Management is the basic management platform at TIS INTECGroup. It is a management model centered on the encouragement ofValues (Value-based management), Vision (Vision-based management), and Vitality (Vitality-based management), named the 3Vs.

1

3V Management Model

Corporate Information/Data

TIS INTEC Group places a great deal of importance on “CPS” in the
management of its business. CPS is an acronym for Culture-oriented,
People-based, and Social-perspective. It refers to business management that is based on and respects the culture of the country or
region where the company is located, is centered and focused on
people, and intends to improve sociality.

CPS Management Model

2

Editorial Policy

01

Connection with
Strategies (Story)

Access an overall picture of corporate activities.
https://www.tis.com/ir/finance/annual_report/

Non-financial
information

Sustainability information
Find information about sustainability
initiatives.
https://www.tis.com/group/sustainability/

Annual securities report
Materials related to financial results

Corporate governance report
ESG data book04

Top Message

Top Message

11

TIS INTEC Group Value Creation

Sustainability Management
Growth Trajectory
Value Creation Process
Sources of Value Creation and Competitive Advantage
Stakeholder Engagement
Materiality and Sustainability Promotion
Materiality-Related Initiatives and Targets
Stakeholder Dialogue

17
19
21
23
25
27
29
31

Growth Strategy for Value Creation

Taking Long-Term Perspective on Target Trajectory
Executive Vice President’s Message 1 (Business Strategy)
Looking Back on Past Medium-Term Management Plans
Outline of Medium-Term Management Plan (2021–2023)
Key Strategy of Medium-Term Management Plan
—DX, service-style business, payment, global,
management capability, HR—
Special Roundtable: Status of Service-Style Operations
Message from the Director in Charge of Corporate Organization
Financial Investment Strategy
Business Strategies by Segment

33
35
39
40
41

Comprehensiveness05

Message from the Chairman of the Board of Directors
69
External Directors’ Messages
70
Corporate Governance
71
Compliance/Information Security/Personal Information Protection 83
Risk Management85
For the Global Environment
89
With Employees
93With Clients
97
With Business Partners
98
With Shareholders and Investors
99
With Local Communities and Society
100
Quality Control and Production Innovation
101
Intellectual Property
103
Research and Development
104
Executive Dialogue: Sustainability × Human Resources Strategy 105

Corporate Information/Data

Financial Review
Consolidated Financial Summary/ Non-Financial Summary
Corporate Data/ Evaluations from External Parties

Issued: September 2023

The names of the products and services described in this report are trademarks or else registered trademarks of the respective company.

3

06

Corporate Information/Data

Platform for Value Creation

Scope of reporting: TIS (parent) and TIS INTEC Group

Disclaimer: Forward-looking statements, such as performance forecasts, described in this report are based on information available to management regarding the TIS INTECGroup—that is, TIS and the subsidiaries under its umbrella—as of the production date and certain assumptions deemed reasonable at this time. No intent of promise is impliedby the Company to achieve such forward-looking statements. Indeed, various factors may cause future results to be substantially different from the assumptions presented inthese materials.

53
57
58
61

Platform for Value Creation

The Group regards the Integrated Report as an important tool for dialogue with all stakeholders, including shareholders and other investors. To provide a clearer understanding of the Group’s approach andefforts to sustainably enhance its corporate value, we compiled this report with a focus on matters ofparticular importance that we wish to convey while also providing important financial and non-financial
information.
In addition to top management’s explanation of medium- and long-term growth strategies, thisspecial feature section focuses on the status of service-style businesses in the context of our structuraltransformation. It also introduces the initiatives to realize sustainable improvement in corporate value,connecting business strategy to human resources strategy. Please refer to our corporate website for moredetailed information.
We hope that this report will give readers a better understanding of the Group and encourage greater
dialogue.

Growth Strategy for Value Creation

IR information
Find financial results and IR-related
news as well as the latest IR events.
https://www.tis.com/ir/

03

1
3
5
7
8
9

TIS INTEC Group Value Creation

Financialinformation

TIS INTEC Group Philosophy—OUR PHILOSOPHY
Editorial Policy
About the TIS INTEC GroupTIS INTEC Group by the Numbers
Positioning in the IT Services Market
Consolidated Financial / Non-Financial Highlights

Top Message

02

Integrated Report 2023

Introduction

Introduction

CONTENTS

109
111
117

4

About the TIS INTEC GroupTIS INTEC Group Business Activities
As an IT specialist which partners with clients, the Group handles a wide range of IT services to provide
optimal one-stop support.
The Group’s IT services supports society in ways some may take for granted, and contributes to meeting social needs through its business.

1. Solid management platform
TIS’ solid management plat f orm comprises three building block s — a broad client base, an e x tensiv e business base and a s table financial base — which pro vides the le v erage to driv e businessf or w ard and underpins good financial health and capital efficienc y.

TIS has cemented its position as a leading system integrator in the domestic payment services domain.
Drawing on capabilities accumulated through SI activities, we are quickly rolling out service-style operations
matched to technological innovation and diversifying payment methods.

Contract development style
Provide systems matched toclient requirements

3. Flexible management strategies and speedy decision-making thanks to independent status
The TIS INTEC Group established itself as the top of Japan’s IT services industry as a major, independent
corporate group free from keiretsu ties. The absence of a controlling shareholder ensures management
independence facilitates decisions that leverage robust, flexible and speedy business development of Group
operations.

System integration
services

Research
into and access to leading-edge technology

Consulting services

Helping clients use IT to raise business value

System integration services

Providing one-stop access to systems perfectly matched to client needs

Research into and access to leading-edge technology

Always on a quest for the latest IT technology to provide systems a step ahead of expectations

IT platform configuration services

Building safe and secure computer networks, from host to public cloud, matched to client nee

Outsourcing services

Everything from system operation to full business process outsourcing (BPO)

TIS INTEC Group Value Creation

IT platform
configuration services

Service offering style
Provide services that
anticipate client needs

Top Message

2.

Consulting services

Outsourcing services

Dominant presence in payment services domain

Growth Strategy for Value Creation

Meeting Various Social Needs by Providing IT Services— The TIS INTEC Group operates across all these domains —Changing the way wework throughIT services
Furnishing society
with useful robots

Supporting a stableenergy supply
Supporting cashlessservices

Making online services
more convenient

Making transportation
more convenient

Platform for Value Creation

IT services forrestaurants and pubs

Supporting comfortablelivingIntroduction

Three Characteristics and Strengths of the TIS INTEC Group

Corporate Information/Data

5

6

TIS INTEC Group by the Numbers

Consolidated Operating Income(Year ended March 31, 2023)

Consolidated Operating Income to
Net Sales Ratio(Year ended March 31, 2023)

TIS INTEC Group has cemented a position as a leading, independent prime contractor in Japan’s IT services industry—a market that is expected to continue growing against a backdrop of robust corporate demand for digital technology.

Introduction

Consolidated Net Sales

Positioning in the IT Services Market(Year ended March 31, 2023)¥508.4 billion

12.3 %¥62.3 billion

IT Services Market Size in Japan(Billions of yen, %)YOY change

Consolidated Equity Ratio(Year ended March 31, 2023)

Rating（At November 11, 2022）(Year ended March 31, 2023)

18.8 %

64.2%

16,000 14,531.2 15,350.6

A+ /Stable(Long-term/
Japan Credit Rating Agency, Ltd.)

12,00016,206.7

17,079.9

18,062.8

19,195.9

10
8

6.3%

7.2%

5.6%

5.8%

5.4%

5.6%

4

8,000

2

(As of March 31, 2023)

Number of Employees,
Consolidated

Number of Clients(As of March 31, 2023)(TIS + consolidated subsidiaries+ equity method affiliates)

125
companies

0(Year ended March 31, 2023)

companies

Overseas More than600

Net Sales by Client Sector(Year ended March 31, 2023)(Year ended March 31, 2023)

Net Sales (Billions of yen)

2.8%

7.4%
Other
¥2,429 million

Financialsectors

OthersPublicinstitutions 2.8%

Credit card

7.4%

19.2%

¥508,400

Servicemillionmillion

Percentage of sales fromtop 10 client companies

29.4%
Industrial
sectors

Distribution

6.7%

53.8%

570.9

36.0%

7.7%

NTT
Data

7

NRI

CTC

TIS

SCSK BIPROGY NSSOL

62.3

7.4%

0

NTT
Data

12.3% 11.5%

NRI

TIS

8.1%

51.3

46.4

SCSK

CTC

161.3

157.4

10.9%
31.7

15

8.7%
29.6

NSSOL BIPROGY

10
5
0

6.1%

Other
financial

3.0%

Industrial sectors
Major clients✓ JCB✓ Mitsubishi UFJ NICOS✓ SMBC Finance Service✓ MUFG Bank
✓ Nippon Life

✓ Asahi Kasei✓ Komatsu✓ Tokyo Gas✓ Recruit✓ NTT Docomo*Client names are short-form.

111.8

ROE (%)

Total Shareholder Return (%)
300

25

20.7

18.8
15.0

15

261.7

250

193.3

200

14.4
11.8

11.0

11.0

161.5

150

140.7

126.8

10
100
5

0

Corporate Information/Data

Product and Software Sales
Sale and maintenance of hardware, such as servers
and network equipment, and software.

150

Insurance

Major clients

Health Insurance Organizations✓ Japan Housing Finance Agency

291.6

20

16.2%

50
0

Financial sectors✓ Local governments✓ Federation of National

200

445.9

100

10.2%

Major clients

508.4

200

Banking

Assemblybased
Processing- manufacturing
based
8.9%
manufacturing

Public sector

25

250

339.8

20

Operation and Cloud Services
Provides on-demand IT resources using SaaS andother categories of cloud computing, including
system operation through Company-run data centers.

30

259.1

Platform for Value Creation

28.0%

300

692.1

400

Total

Software Development
Offers consulting services related to IT management,
development of IT systems from scratch anddevelopment and maintenance of systems usingbusiness packages to address client-side
management and business issues.

0

2027

Operating Income, Operating Margin (Billions of yen, %)3,490.1

600

Othersectors

PublicsectorSoftwaredevelopment¥273,928 million

2026

Growth Strategy for Value Creation

Net Sales by Business Segment

Management andcloud services¥170,368 million

2025

Comparison of Japan’s Leading IT Companies (Year ended March 31, 2023)*1

3,500¥508,4002024

15,00021,946

Total

2023

Domestic aboutcompanies

Product and softwaresales¥61,674 million

2022

TIS INTEC Group Value Creation

4,000

Number of Group Companies

6* Gartner®, “Forecast: IT Services, Worldwide, 2021-2027, 2Q23
Update“ M. Sawai/July 24, 2023
End user spending based graph created by TIS based on Gartner
research.
All statements in this report attributable to Gartner represent TIS’s
interpretation of data, research opinion or viewpoints published aspart of a syndicated subscription service by Gartner, Inc., and havenot been reviewed by Gartner. Each Gartner publication speaks asof its original publication date (and not as of the date of thisreport). The opinions expressed in Gartner publications are notrepresentations of fact and are subject to change without notice.
GARTNER is a registered trademark and service mark of Gartner,
Inc. and/or its affiliates in the U.S. and internationally and is usedherein with permission. All rights reserved.

Top Message

Consolidated ROE

20,000

50

NRI

TIS

BIPROGY

SCSK

CTC

NTT
Data

NSSOL

0

TIS

NRI

NTT
Data

CTC

BIPROGY SCSKNSSOL*The above figures are calculated based on 100% of the stock price on March 31,
2018.
*1The full company names used in the above graphs (NTT Data, NRI, CTC, SCSK, BIPROGY, and NSSOL) are: NTT Data Group Corporation, Nomura Research Institute, Ltd.,
ITOCHU Techno-Solutions Corporation, SCSK Corporation, BIPROGY Inc., and NS Solutions Corporation. NTT Data, NRI, CTC, SCSK, BIPROGY, and NSSOL amounts are basedon the IFRS (International Financial Reporting Standards).

8

Consolidated Financial/Non-Financial Highlights

Non-Financial Highlights

Net Sales

Operating Income,Operating Income to Net Sales Ratio(Millions of yen)

(Millions of yen, %)508,400

420,769

Operating Income
Operating Income to Net Sales Ratio

482,547

443,717 448,383

62,328Net Income Attributable to Owners of
the Parent Company (Millions of yen),
Net Income per Share*1 (Yen)Net Income Attributable to Owners of the Parent Company
Net Income per Share

10.2

9.0

(Person)

(%)

(Day)

TIS

12.3

TIS INTEC Group

19,744

26,034

29,411

227.11

27,692116.78

Fiscal 2019 Fiscal 2020 Fiscal 2021 Fiscal 2022 Fiscal 2023

14.4

52

51

10.8

38

15.5

13.3

14.2

11.2

8.1

110.51

Fiscal 2019 Fiscal 2020 Fiscal 2021 Fiscal 2022 Fiscal 2023

15.2
12.5

46

Fiscal 2019 Fiscal 2020 Fiscal 2021 Fiscal 2022 Fiscal 2023

14.2

Fiscal 2019 Fiscal 2020 Fiscal 2021 Fiscal 2022 Fiscal 2023

Fiscal 2019 Fiscal 2020 Fiscal 2021 Fiscal 2022 Fiscal 2023

TIS INTEC Group Value Creation

Fiscal 2019 Fiscal 2020 Fiscal 2021 Fiscal 2022 Fiscal 2023

TIS INTEC Group48

45

157.69102.6164

61

56

39,462

11.3

TIS

21,709 21,946

21,817
19,48345,74810.1

Number of Days Spent on Learning
and Research per Person*2

Top Message

38,043Results of Employee
Awareness Surveys*2

55,461

54,73944,839Number of Employees at Year-End(Consolidated)* Percentage of respondents answering positively to thequestion “Overall, this company is a good place to work”
in the employee awareness survey.

Orders Received during the Term,
Order Backlog at Year-End(Total) (Millions of yen)Orders Received

Free Cash Flow

ROE, ROA(Millions of yen)(%)

495,291452,284
427,210 439,748

ROE

52,702523,956

TIS

ROA

10.5

180,373

12,132

12.5
12.2

10.0

14.0
10.8

12.0

13.5

10.7
9.2

8.6

11.0

9.8

10.3

1,049

1,039

11.9

991

912

Fiscal 2019 Fiscal 2020 Fiscal 2021 Fiscal 2022 Fiscal 2023

0051

0001

005

0

0

64,488500

1000

65,86764,157

3.9

3.7

1500

Fiscal 2019 Fiscal 2020 Fiscal 2021 Fiscal 2022 Fiscal 2023

Fiscal 2019 Fiscal 2020 Fiscal 2021 Fiscal 2022 Fiscal 2023

Scope 1
Scope 2

71,096

4.8
3.3

0002

(t-CO2)

915

5.0

10.9

9.4

15,823Fiscal 2019 Fiscal 2020 Fiscal 2021 Fiscal 2022 Fiscal 2023

11.2

Greenhouse Gas Emissions*453,076

2000

885

745

760

513

481

Fiscal 2019 Fiscal 2020 Fiscal 2021 Fiscal 2022 Fiscal 2023
* Scope 1: Direct emission of greenhouse gases by business
operators* Scope 2: Indirect emission through use of electricity or heat/steam provided by other companies(Millions of yen, %)Total Assets

Net Assets

451,072
370,657

382,899

62.0

63.3

234,408

247,957

Equity Ratio

Dividends per Share*1, Payout Ratio,
Total Return Ratio (Yen, %)Dividends per Share (annual)
Payout Ratio
Total Return Ratio

279,42961.5
302,993200

TOPIX including dividends

30.0

35.0

126.1 131.2
95.0

39.8
25.7

42.8
31.9

122.1

775

50〜54
45〜49

890

40〜44

1,011

60

713

151

677

77

240

835

99
389
122

124.6

131.8

85.9

39.3
27.9

553

55〜59

18

Fiscal 2019 Fiscal 2020 Fiscal 2021 Fiscal 2022 Fiscal 2023

* Total return ratio: Total amount of dividends and treasury
stock buybacks as a percentage of net income.
* Total return ratio in fiscal 2023 included the effects of treasury stock acquired as part of efforts to optimize capital
structure.

* The above figures are based on the stock price prevailingon March 31, 2018, which is indexed at 100%.

302

768

48

36

25〜29

Fiscal 2019 Fiscal 2020 Fiscal 2021 Fiscal 2022 Fiscal 2023

544

1,196

35〜39

1,002

30〜34

22.0

700

593

1,639
615

〜24
(Age)
Management positions (male)Management positions (female)

2

0

0

0

923
447

5

*1 The Company executed a stock split, with each share of common
stock split into three shares, effective April 1, 2020. Figures
before fiscal 2020 are presented assuming this stock split was
conducted.
*2 The figures include the TIS INTEC Group’s seven principal
companies (TIS, INTEC, AGREX, QUALICA, AJS, TIS System
Service, and TIS Solution Link).
*3 Figures for fiscal 2019, fiscal 2020, fiscal 2021, fiscal 2022, andfiscal 2023 are based respectively on April 1, 2019; April 1, 2020;
April 1, 2021, March 31, 2022, and March 31, 2023.
*4 The figures include TIS, 12 consolidated subsidiaries (domestic)
and nine consolidated subsidiaries (overseas).
*Other non-financial data and scope of collection, details refer to “6.
Nonfinancial data” of the “ESG Data Book”.
https://www.tis.com/group/sustainability/esg_databook/index.html

General positions (male)
General positions (female)

10

Corporate Information/Data

23.3
39.0

194.5

76.0

11
83

60〜

214.5

44.0

22.8

9

TIS

50.0

64.2
309,226

Fiscal 2019 Fiscal 2020 Fiscal 2021 Fiscal 2022 Fiscal 2023

(%)

261.7

476,642 462,320

60.0

Employee Composition*2 (As of April 1, 2023) (Person)

Total Shareholder Return

Platform for Value Creation

Total Assets, Net Assets, Equity Ratio

Growth Strategy for Value Creation

11.5

Fiscal 2019 Fiscal 2020 Fiscal 2021 Fiscal 2022 Fiscal 2023

Number of People Hired/
Tuunover Rate*2 (Person,%)Number of new graduate recruits and mid-career hired
Turnover rate

TIS INTEC Group

18.8

44,93536,345

161,453
132,935 133,121 147,214

Percentage of Female Employees
in Management Positions*2, 3(%)

Order Backlog

Introduction

Financial Highlights

Top Message

Yasushi Okamoto, TIS President and Representative Director , looks back on fiscal 2023, ended March 31, 2023,
highlights progress on the current medium-term management plan and key themes going forward, and comments on
the Group’s vision for the future.

It was a year marked by favorable business results andprogress on frontline reinforcement.

Corporate Information/Data

12

Platform for Value Creation

The TIS INTEC Group has been involved in a process ofstructural transformation, including expansion of service-based
businesses, since 2018. From our earliest days, our strength
has always been system integration (SI) capabilities forcustomized development of clients’ large-scale core systems.
We will continue to polish these capabilities as a corecompetence. However, a current ask from clients these days is
to reduce the time and cost associated with systemdevelopment, so we will focus on template-type service-based
solutions developed through anticipation of shared clientneeds. SI and service-based solutions are, fundamentally, aform of production, but the approaches taken are the polar
opposite. SI is customized support defined by individual client
requirements whereas service-based solutions reflect anunderstanding of wider market needs that we ourselves
address with upfront investment to create software as aservice available to anyone. Frontline reinforcement that fuels
active participation is essential to this evolution of our form of
production, and we are boldly engaged in this process.
Engagement with human resources—the champions ofstructural transformation and the energy that fuels corporate
growth—has always featured prominently in our humanresources strategy. We have highlighted three themes—thesignificance of work, the work environment, and 		compensation—and have seized on new opportunities,
including workstyle reform and the opening of the state-ofthe-art Toyosu Office, to showcase our commitment to humanresources. In fiscal 2023, TIS took steps to update its humanresources system, with changes scheduled to be implemented
from April 2023. Of note, under the new compensation
system, the underlying goal is to increase base salaries, withan upper limit of 17% and an average of 6%, and we have
prepared for a ¥5 billion increase in aggregate personnel costs,
including improved employee perks on a groupwide basis.
Compensation for employees comprises two components:
a bonus and base salary. It is incumbent upon management toensure employees fully understand that the bonus component
corresponds to fiscal results and individual performance interms of contributing to such results. That said, to encourage
employees to be active participants in structuraltransformation and gamely embrace challenges—thus
providing support indispensable to the Group’s future—wehave to keep base salaries high and lay the foundation for astable standard of living resilient to changes in the market
environment and business results. For some time already, we
have maintained annual salary increases in line with othercompanies, but I believe it is the duty of management toGrowth Strategy for Value Creation

11

We are creating an environment in which employees are
comfortable taking on new challenges.

TIS INTEC Group Value Creation

Yasushi Okamoto, President

Fiscal 2023 delivered higher sales and higher income year on
year, breaking past performance records and enabling TIS toachieve net sales, operating income and operating margin
targets stated in the medium-term management plan a year
ahead of schedule. These results reflect a huge amount ofwork and solid backup by everyone—management andemployees alike—throughout the TIS INTEC Group to responddiligently to the active IT investment needs of clients,
particularly thriving demand for digital transformation (DX).
We also achieved a very commendable increase in return-onequity through measures to enhance management, namely
reduction of cross-shareholdings and execution of treasury
share buybacks to optimize capital structure.
I also get a real sense of progress on frontline
reinforcement—a management theme I have emphasizedsince becoming president. The current medium-term
management plan is the second step toward achieving ourcorporate vision—“Create Exciting Future”—by 2026, andduring this step, we are fully engaged in efforts to improve thevalue of DX services provided to better address social issues,
promote further structural transformation, and strengthen
value exchange with stakeholders through this process.
Frontline reinforcement is essential to structuraltransformation, and my message is and will continue to bethat all employees and management, including myself, be
proactive in thought and deed—that is, look beyond
strengthening skills in marketing and planning from a client
perspective—and thereby respond to the needs of all the
stakeholders we connect with.
Frontline reinforcement is a long-term process, like using
traditional herbal medicine to improve health, and progress ormarkers of success may be hard to define numerically. But I cantell you we explored many different avenues in fiscal 2023 thatwill ultimately reinforce the frontline. Of note, we rolled out
training programs to develop DX consultants, with more than
400 people already qualified, moving ever closer toward ourgoal of 500 by fiscal 2024. We also extended a business partner
satisfaction survey into the entire group, which complements
existing client satisfaction and employee awareness surveys, todeepen engagement with business partners who areindispensable in executing projects. And we reviewed the newhuman resources structure, which was introduced in April 2023,
as well as the associated compensation system. These are
extremely major steps toward enhancement of humanresources, our most valuable corporate asset. Of course, we
actively provided opportunities for dialogue with shareholders
and investors, as well, and encouraged a deeper level ofengagement across stakeholder groups.

Structural transformation and humanresources strategy

Top Message

Looking back on fiscal 2023

Introduction

A reinforced frontline will fuel progress on structural transformation that
underpins sustainable improvement in corporate value.

Growth strategy for IOS strategic domain,
tapped as most powerful growth engine

We will leverage the payment solutions business as a key
component of our growth strategy.

progress on structural transformation.

Manufacturing technology is our foundation and willremain so in order to fulfill our responsibility to society.
There’s lots of talk about system development using generativeAI, which has currently caught market attention, and the TIS
INTEC Group is of course exploring generative AI along withother new technologies. But large-scale systems comprise
multiple, intricately entwined programs working in acoordinated way. Knowing the purpose of each system andclearly articulating how that system will address particularsocial issues are top priorities, especially in system design, andhumans are essential to this process. And I would add that a
responsibility to provide products and services to society
should be top of mind in any business operation.
As I mentioned earlier, SI—a process that responds toclient requirements—forms the bedrock of our operations, andwe are working to build on this foundation with development
and wider access to DX consulting and service-type businesses.
As a result, we have accelerated training and hiring of humanresources—namely, DX consultants, including data analysts—
involved in manufacturing-related upstream processes.
However, no matter how diverse our pool of talent grows andno matter how adept generative AI becomes in complex
system development, it is vital that everyone under the TIS
INTEC Group umbrella understand the basic technology that
underlies system development. We are a service
manufacturer—that is, a corporate group making productswith digital technology—and we provide these products tosociety. It is therefore incumbent upon us from a social
responsibility perspective to ensure that our products do notexist in a black box. In IT terms, that means there should benothing mysterious about how our products work, complex asthat may be, just because they do work.

14

Corporate Information/Data

13

Creating a new pillar of business to complement PAYCIERGE
and turning it into a corporate strength is a priority in our goal
to fuel further growth in IOS. Anticipating growth from along-term perspective and defining the direction that will lead
us to a successful result is one of the key responsibilities I haveas president.
Currently, we have identified four social issues—financial
inclusion, urban concentration/rural decline, low-carbon/
decarbonized society, and health concerns—that we, as acorporate group, have the ability to help ameliorate throughour business activities. Regarding health concerns, living life ingood health is taking on greater importance as life expectancy
in Japan hits 100, and against this backdrop, we are pleased
to include in the Group’s service menu a healthcare platform
for building medical and health data managed primarily by
medical institutions into personal health records that can beused to help individuals maintain good health. Visits tomedical facilities during the pandemic were somewhat limited,
especially if the reason was non-urgent, and progress inplatform implementation was thus slower than hoped for. But
we will continue to promote the platform as a tool for living
life in good health.
Regarding the establishment of a low-carbon/
decarbonized society, we aim to achieve carbon neutral statusunder Scope 1, 2 criteria by 2040, and we already disclose
information in accordance with recommendations by the Task
Force on Climate-related Financial Disclosures (TCFD). These
are inward activities. For clients, we launched Carbony, an IT
solution brand that draws on years of insight gained throughIT support for clients, including electric power companies, torealize a decarbonized society. Carbony VPP (virtual power
plant) Platform, which integrates regionally distributed energy
resources through a cloud-based network, is now available.
Looking beyond Japan, we have our sights on becoming
the top-class IT group in the ASEAN region, and we areleveraging strategic capital and business alliances along three
trajectories—marketing channels, technologies and consulting
capabilities—particularly in Thailand, Indonesia and Vietnam.
In July 2022, TIS formed a capital and business alliance with
PIX Moving, a Chinese startup developing self-driving chassis
for electric vehicles. The alliance with PIX will enhance TIS’ability to create new IT services for MaaS (Mobility as aService), smart city and other mobility applications, andfacilitate a robust response to the issue of urban
concentration/rural decline as well.

Platform for Value Creation

improving the value of DX services provided and fuelWe are expanding efforts that utilize digital technology
to help address social issues at home and abroad.

Robotics is a focus of attention from a longer-term
perspective. Full-scale, practical application of robotics requires
changes to the very structure of cities, including, for example,
the establishment of road traffic laws, and this will take time.
However, against the backdrop of a labor shortage amid thecontinued graying of society in Japan and other developed
countries, robotics is seen as an absolutely essential
technology for the future, where dangerous jobs are
performed by robots instead of humans. Our role, as the TIS
INTEC Group, is not robot development but integration,
combining multiple robots in an IT environment, and toward
this end, we participate in all kinds of verification tests while
accumulating know-how. In addition, we use service robots
for reception and information operations at the Toyosu Office,and turn knowledge gained through practical applications likethis into templates to support the robotics-related businessesof domestic companies. We will persist in our efforts topromote practical application of robotics.

Growth Strategy for Value Creation

to solve social issues focusing on such things as

Efforts to create a new pillar of business

Robotics will be absolutely essential in an aging society.

TIS INTEC Group Value Creation

To achieve sustainable growth, we will enhance our ability

has developed business activities with an emphasis on major
corporations, but in bringing Nihon ICS, with its proven trackrecord and high-level technology and know-how in
accounting/taxation software packages, under the Groupumbrella, the Group embarks on a journey toward a newdestination—providing solutions to a complementary set ofsmall and midsized companies and realizing new business
opportunities.

Top Message

The TIS INTEC Group boasts a long track record of involvementin building financial systems, especially mission-critical systems
for clients in the credit card sector, and has strong solution
capabilities. TIS, in particular, can lay claim to being Japan’s
No.1 system integrator in the payment services sector, aposition cemented by PAYCIERGE, which is a digital payment
settlement platform infused with know-how accumulated overmany years in the SI business.
PAYCIERGE addresses all digital payment processes
associated with prepaid, debit and credit formats and covers
SaaS-type services, which eliminates the need for a client tobuild its own system, as well as smartphone payment, security
and other functions basic to a payment platform. That said,
peripheral services related to payment settlement are
expanding all the time to meet changing payment settlement
needs, and PAYCIERGE continues to evolve as well. For
example, Japan lifted restrictions on digital salary payments,
effective April 1, 2023, and with employee consent,
companies are now permitted to deposit wages into
designated funds transfer service provider accounts, including
payments through various apps instead of traditional bankaccounts. A completely new trend in money circulation has
emerged, and through tie-ups with companies to which wehave provided salary payment packages in PAYCIERGE, theplatform is already prepared for providing digital salary
payment services. I’m sure new money trends will emerge
beyond salary payment, even in peripheral services related to
payment settlement, such as reimbursement of expenses andpayment of taxes. We, too, have to keep evolving to ensurethat PAYCIERGE is seen by companies as a one-stop solution
capable of covering all payment needs.
In addition, heightened expectations for the TIS INTECGroup are being felt on the frontlines of business. For
example, we are already participating in verification tests,
including proof-of-concept for next-generation MaaS (Mobility
as a Service) transportation services and local e-currency. But
the various services, once commercially available, will require
payment from the people who use them, and our strength inpayment services is highly attractive to companies not only inthe finance sector but also in non-financial sectors seeking towork together on new services geared to the changing needsof society.
Against this backdrop, we are rolling out initiatives thatwill translate into an expanded portfolio for PAYCIERGE.
Looking to respond to demand for embedded finance, whichis the integration of financial services into non-financial
businesses’ infrastructures, TIS turned ULTRA Co., Ltd., aninternationally branded prepaid payment servicer, into a
subsidiary in May 2022. More recently, in April 2023, TIS
turned Nihon ICS Co., Ltd., a provider of financial accounting
packages for tax accounting offices and companies, into a
subsidiary to reinforce IOS (IT Offering Services), a strategic
domain. Nihon ICS has connections to more than 10,000 tax
accounting offices across Japan, more than 400,000 clientcompanies and more than 100 financial institutions and has
many years of tangible results in providing the kind of businessmodels the TIS INTEC Group seeks for IOS. To date, the Group

Introduction

create an environment that draws talented people to theGroup and enables them to fully demonstrate their capabilities
in a comfortable working environment. This was thedetermining factor in our bold approach to upfront investment
in human resources at this time.

It is the duty of upper management, myself included, tofulfill the social responsibility incumbent upon the TIS
INTEC Group.

Details

Gotenyama SH Building (Shinagawa-ku, Tokyo)
Land: Site area measuring 6,858.68 m2
Building: Total floor space of 19,812.85m2

SellerSekisui House Reit, Inc.

Acquisition price¥72 billion (¥70 billion to acquire real estate trust beneficiary rights/100% acquired equity; about ¥2 billion in brokerage fees).

Acquisition method

Will gradually acquire quasi-co-ownership interest, with total amount broken into 10 single payments of ¥7 billion. First payment on October
31, 2023, with nine subsequent payments made every six months at end of each sixth month. Payment process will be complete with final
payment on April 30, 2028.

Acquisition capital

Planning to use cash on hand and loans from financial institutions.

Sustainability Management

17

Growth Trajectory

19

Value Creation Process

21

Sources of Value Creation and Competitive Advantage

23

Stakeholder Engagement

25

Materiality and Sustainability Promotion

27

Materiality-Related Initiatives and Targets

29

Stakeholder Dialogue

31

Platform for Value Creation

Building overview

TIS INTEC Group Value Creation

Growth Strategy for Value Creation

Item

03

TIS INTEC Group Value Creation

Decision to acquire facility at heart of system operation services
Unprecedented approach from perspective of ensuring long-term, stable business continuity

Top Message

I am happy to report steady progress on the implementationof all business strategies, underpinned by the excellent efforts
of corporate officers and employees. And I am reminded thatthe most significant role I can play as president is to deepen
value exchange with stakeholders by enabling people outside
the Group to gain a better understanding of what the Group
does. Through good two-way communication, we canpromote changes that drive forward-thinking structuraltransformation, including marketing activities that expand thering of cooperation and reinforce frontline operations.
Frontline reinforcement may be gradual, but I see sure andsteady progress. The process must be irreversible or else every
step forward has been for naught. We must achieve progress
without any backtracking. With completion of infrastructuredevelopment to underpin structural transformation followed
by wider participation in service-type businesses throughreciprocal cooperation, we are getting ever closer to meetingthe criteria for swift acceleration of structural improvement.
What I don’t want to see is a phrase like “major SI” used
to describe the TIS INTEC Group, but rather, immediate
recognition of the TIS INTEC Group as having a deeper
presence in society. Yes, technically, we belong to the SI sector,

but we aim to be more than a system integrator, instead
aspiring to be a corporate group transcending SI and
addressing social change through the power of digitaltechnology. I think of myself as a conservative person, in thesense that I make decisions after carefully ascertaining what’s
necessary rather than by going on the defensive to hold aposition. In fiscal 2023, several major investments wereapproved, and I firmly believe that each investment is essential
to sustainable growth and higher corporate value going
forward. Of course, these investment decisions were carefully
discussed by the Board of Directors and others, frommultifaceted perspectives, not to convince ourselves of theneed but to ensure that stakeholders would accept therationale behind these investments.
The COVID-19 pandemic is one example of unexpected
situations that can upend the operating environment
worldwide. Such events may happen again. Establishing a
structure that can deal with anticipated risks is vital, alongwith determined efforts to explain our stance to stakeholders.
I know that if we do this properly, we boost our ability toovercome any obstacle. Honest and sincere responses are thestyle of OUR PHILOSOPHY, the TIS INTEC Group philosophy,
and guided by this philosophy, I will lead the TIS INTEC Group
in fulfilling its social responsibilities and its duty to seamlessly
connect our vision for the future to the next generation. The
support and cooperation of all stakeholders will be
instrumental to our shared success.

Introduction

To our stakeholders

15

Corporate Information/Data

In March 2023, TIS made the decision to acquire real estate trust beneficiary rights in Gotenyama SH Building, a facility in
Shinagawa-ku, Tokyo, that the Company currently leases and uses as a hub for providing system operation services and its
own brand of cloud services. Payment will be made in installments. TIS typically prefers “have-not management” in that
wherever possible the Company does not own fixed assets, such as operating bases and offices, and has been promoting aprocess of integration and consolidation. However, management feels the facility for which real estate beneficiary rights will
now be acquired is absolutely necessary to support business activities, and the acquisition is extremely important from theperspective of building trust with clients as facility ownership ensures stable, long-term business continuity. In addition,
management took a comprehensive view that included the reduced expenses effect of ownership and TIS’ current financial
status, which would allow for a large-scale investment, and concluded that the acquisition would contribute to enhanced
corporate value of the TIS INTEC Group over the medium to long term. This is a rare exception to policy, and going forward,
TIS will emphasize operations conscious of returns on capital.

16

Sustainability Management

TIS INTEC Group will reinforce its commitment to corporate social responsibility through its contribution to
the sustainable development of society by resolving social issues through its business, and will further
strengthen its corporate sustainability initiatives.

Overall picture of sustainability managementg Address Social Issues through Business Activities

Introduction

Seeking to deepen sustainability management

We will expand our services to create both economic and social value based on business opportunities and risks from global
initiatives to realize a sustainable society and enhance corporate sustainability.

Achieving sustainability

Markets

Global initiatives
Climate change/human rights/diversity & inclusion, etc.

Fostering sound markets

Achieving asustainable
society

Promoting a healthy society

Mission: To brightly color the future as a mover

Expansion of business/
capturing opportunities

Four Key Themes and Materiality (Priority issues)Service

Social impact

Trust

Sustainableearnings

2. Create a comfortable society through innovation and joint activities

d. Promote a safe, convenient social foundation that supports people
and society
e. Connect with stakeholders and promote joint activities
f. Reduce environmental impact

Select long-term
issues and businessthemesFiscal 2022

Fiscal 2023

Fiscal 2024

Formulate interim
targets andstrategy

Promotecontrol andmotivation

Demonstrateperformance toachieve goals

TIS INTEC Group Value Creationa. Promote diversity
b. Promote work style reformsc. Human resource development and training emphasizing self-fulfillment

Risks of notengaging

Resolving social issues through the Group’s business activities

Basic Policy on Corporate Sustainability

1. Create a society in which diverse human resources are engaged and thrive

Dialogue

Top Message

TIS INTEC Group Philosophy: OUR PHILOSOPHY

New social issues
and target
proposalsg Enhanced Management Geared to Social Demands

3. Create a safe society through high-quality services

j. Corporate governancek. Compliancel. Risk management●Contribute to Recycling Society
To help achieve a sustainable, decarbonized society, the Group declared carbon neutrality in December 2022, aiming to reducegreenhouse gas emissions associated with its business activities. In addition, as medium- to long-term environmental measures tomitigate climate change, we have set targets in line with the 1.5°C target (WB1.5C scenario) of the Paris Agreement.
▶ Please refer “Platform for Value Creation (Environment)” on page 89 for details.

Address social issues through business activities
Social issues where TIS INTEC Group can contribute

Enhanced management geared to social demands

n Financial inclusion n Urban concentration/rural declinen Low-carbon/decarbonized society n Health concernsn Contribute to recycling societyn Achieve sustainable improvement in stakeholder engagementn Constantly pursue governance that elicits higher level of trust from society▶ Please refer “Platform for Value Creation (Social)” on page 93 for details.

Contribute to sustainable society

Sustainable improvement in corporate value

g Changes in Sustainability Initiatives

2018–2020 Laying solid foundations
Building a platformn Studying the value creation processn Setting materialityn Organizing policies & regulations17

2021–2023 Growth
Expansion to the Group value chainn Fostering the means to resolve social issuesn Strengthening co-creation with Group
companiesn Strengthening co-creation with the
supply chain

2024– Further development
Establishing a presence as asustainability leadern Creating businesses that balance
economic and social value▶ Please refer to “Platform for Value Creation (Governance)” on page 69 and the ESG Data Book for details.

TopicsTIS INTEC Group publishes ESG Data Book

With growing external interest and requests for disclosure regarding ESG, the Group has published an ESG Data
Book to provide detailed and accurate information on its sustainability management and ESG initiatives. We provide
stakeholders with an easy-to-understand overview of initiatives, and quantitative information on the Group’s
sustainability credentials.
*Please visit the following webpage for further details and to download a copy.
https://www.tis.com/group/sustainability/esg_databook/index.html

18

Corporate Information/Data

The Group’s sustainability initiatives have steadily evolved under the new management structure of the holding company since
July 2016, based on the identification of materiality and the entrenchment of sustainability in the consciousness of employees.
In April 2023, the Corporate Sustainability Committee was placed directly under supervision of the Board of Directors and had
its structure strengthened by having a leadership of directors put in place. We look forward to great advances under the new
structure.

●Constantly Pursue Governance that Elicits Higher Level of Trust from Society
The Group has a clearly defined structure of responsibilities, policies, and activities aimed at mitigating risks and capturing
opportunities for each area it is required to address. It has implemented tangible measures in the areas of corporate governance,internal control mechanisms, compliance, information security/personal information protection, quality control/production
innovation, and taxation.

Platform for Value Creation

Improve value exchangewith stakeholders●Achieve Sustainable Improvement in Stakeholder Engagement
The Group strives to improve value exchange by proactively creating opportunities for dialogue with its stakeholders, including
various initiatives to improve employee engagement; holding business policy briefings based on the results of satisfaction surveys
for business partners; using client satisfaction surveys to understand client evaluations and requests; convening briefings andmeetings for shareholders and investors; and conducting social contribution activities for local communities.

Growth Strategy for Value Creation

g. Continuous quality improvement
h. Information security
i. Safeguard personal information

4. Enhance corporate governance and earn the trust of society

The Group is engaged in a variety of environmental, social, and corporate governance (ESG)-related measures to improve
the quality of its management through the efficient employment of both its financial and non-financial capital to sustainably
maximize its earnings and value to society. The Group’s main focus has been in the following three areas.

Growth Trajectory

July 2016

IT Holdings Corporation established
Birth of a leading independent company: a group of
like-minded companies integrated their operations,aiming to expand scale and pursue evolution
through synergies.

Transition to a holding company structure
Accelerating the integrated management of the
TIS INTEC Group: restructuring with the aim ofrealizing Group-wide optimization and portfolio
management. through synergies.

1986

Nihon ICS Co., Ltd.

Business activities• Provide accounting/tax packages used by tax accounting offices• Offer IT introduction support• Provide packages to client companies for back-office operations,such as accounting and payroll

Business results

Net sales: ¥6.9 billion
Operating income: ¥2.0 billion[Fiscal year ended November 30, 2022]

Number of employees

370 [as of April 1, 2023]

Investment amount¥22.5 billion

Deemed acquisition dateJune 30, 2023

Top Message

January
1964

April 2008

Name of company

April 2011

INTEC listed on the First Section of theTokyo Stock Exchange.

ITHD orchestrated a threecompany merger involving TIS,SORUN and UFIT Co., Ltd., with
TIS as the surviving company.

December 2009SORUN Corporation joined the
ITHD Group.

March 2015

ITHD turned AGREX Inc. into a
100% consolidated subsidiary.

May 2017

October 2020

Announced “Group Vision 2026”, theoverall picture of the Group in 2026.

MFEC Public Company Limited(Thailand) under consolidation.

April 2023

Brought Nihon ICS Co., Ltd. into a
consolidated subsidiary

Toyama Computer Center, Inc.
(now, INTEC) established.
Began its business at the former
Kitanihon Hoso building.

＾..n ・••"'し• '..よ ,.' .
．．

m .

●渭

旱

I

• •,·

¥695.5 billion

TIS listed on the First Section of theTokyo Stock Exchange.

14.0%

Toyo Information Systems, Co., Ltd.
(now, TIS) established.
Began software development services
in Osaka.

Total market value¥161.9 billion*

8.1%

April 2004

¥508.4 billion

Spread of newcoronavirus infection ¥482.5 billion

Abenomics

6.0%

Lehmanshock

1.5%¥405.6 billion

Total market value (lowest)
June 27, 2011 ¥57.6 billion

5.9%

4.8%

Steadily expanding total market value
with high reputation in stock market due
to the transition to a holding company
structure and performance results.

Platform for Value Creation

7.0%

Trends in total market value

Total market value (highest)
September 13, 2022 ¥1,082.5 billion¥448.3 billion

7.4%

ROE

¥530.0 billion
10.2%¥84.9 billion

12.0%

11.3%

9.9%

¥192.5 billion

Operating margin¥361.0 billion¥338.3 billion¥327.4 billion*Calculated by closing price on April 1, 2008.

Cloud computing

Fiscal2009

Period ofestablishment

19

DX (AI, robotics, IoT, big data, Fintech, etc.)

Fiscal
2012

Fiscal2015

Fiscal2018

Fiscal2021

Fiscal2022

Fiscal2023

Corporate Information/Data

Mainframe computer/Internet

Fiscal2024(estimates)

First Medium-Term
Management Plan

Second Medium-Term
Management Plan

Third Medium-Term
Management Plan

Medium-Term Management
Plan (2018–2020)

Medium-Term Management
Plan (2021–2023)

Medium-Term Management
Plan (2024–2026)

Emphasizing independenceGreater sense of unity

Pursue portfolio management

Lay foundation for structuraltransformation

Structural transformation by improving
value provided in DX services

Accelerate measures to realize
Group Vision 2026

Growth Strategy for Value Creation

10.8%

Turned AGREX Inc. into subsidiary.

Turned Asahi Kasei Information Systems Co., Ltd.
(now, AJS Inc.) into subsidiary.

12.3%¥369.5 billion

Turned Komatsu Soft Ltd. (now, QUALICA Inc.) into
subsidiary.

April 2005

13.7%

Net sales

April 2000

Turned UFIT Co., Ltd., into subsidiary.

2026¥853.1 billion
18.8%

1991

February 2002

Group
VisionTIS INTEC Group Value Creation

April 1971

Introduction

Making the most of the advanced technologies and know-how the TIS INTEC Group has accumulated over the years, we aim
to revitalize society and contribute to the well-being not only of our clients, but of society as a whole.
We will continue to challenge ourselves to achieve further growth, contribute to a sustainable society, and realize
sustainable enhancement of corporate value based on an unwavering ambition to contribute to the development of society
through digital technology.

20

Value Creation Process
We will balance efforts to realize a sustainable society with efforts to achieve sustainable improvement in corporate value
by leveraging unified Group management based on OUR PHILOSOPHY, the TIS INTEC Group philosophy.

TIS INTEC Group Philosophy OUR PHILOSOPHY

Mission: To brightly color the future as a mover

P.2

VisionGroup Vision 2026
(2026 Corporate ideal) “Create Exciting Future”

Utilizing leading-edge technology and know-how torealize business innovation and market creation

P.34

P.23

P. 27

Medium-Term Management Plan (2021–2023)

Be a Digital Mover 2023 P.40

Create a society in which
diverse human resources areengaged and thrive
Providing optimum, one-stop support across client system
lifecycles and all types of IT-related services

Create a comfortable society
through innovation and joint
activities
Manufacturing CapitalSocial & Related Capital

P.33

Contractdevelopment style
Provide systems matched
to client requirements

Create a safe society
through high-quality
services

Enhance corporate
governance and earn thetrust of society

Serviceoffering style
Provide services that
anticipate client needs

P.64

Sustainable improvement in shareholder value
and return to shareholders
Highly transparent disclosure
Engaging in constructive dialogue

Financial IT
Business

P.65

SocialGovernanceContribute todecarbonized society andrecycling society

Sustainable improvement
in stakeholder
engagement

P.89

P.93

Constantly strive forgovernance that
promotes higher level oftrust from society

101Intellectual
Property P.

103

Clients
Provide the best services
Plan/propose new application formats for IT
Lead/support realization of vision and strategies

Business Partners

Regional IT
Solutions

Environment

Quality Control and
Production Innovation P.

Improve value
exchange throughstakeholder
engagement

P.66

Platform that supports value creation of the GroupS G

Social value
Shareholders and Investors

P.67

E

¥

BPM

Industrial IT
Business

Research
into and accessto leading-edge
technology

IT platform
configuration
services

508.4 billion
Operating income ¥ 62.3 billion
ROE
18.8 %Net sales

P.69

Research andDevelopment P.

104

Help solve social
issues throughuse of digitaltechnology

Create new added-value
Fair, transparent, open competition andappropriate business practices
Responsible procurement

Employees
Provide opportunities for growth and personal
development
Provide environment that is safe and comfortable
Promote diversity

Corporate Information/DataIntellectual Capital

Systemintegration
services

Outsourcing
services

P.63

Secure growth
opportunities
fueled by trustand fulfilling
expectations

Platform for Value Creation

Natural Capital

Consulting
services

Offering Service
Business

Economic value (Fiscal 2023)

Growth Strategy for Value Creation

Changes in the external environment

TIS INTEC Group Business Activities

Human Capital

Value provided to societyManagement strategies/measures for sustainable growth

TIS INTEC Group Value Creation

Financial Capital

Materiality

Top Message

Management
Resources

Introduction

Management
Philosophy

Local Communities
Realize the means for safe and secure living	Active interaction with local residents in areasin which we operate
Reduction of environmental impact

E S G
21

22

Sources of Value Creation and Competitive Advantage

Management
CapitalFinancial
Capital¥309.2 billion
64.2%
A+ / Stable¥100 billion(3 years, estimates)

A
A
A
A

Number of employees(consolidated)
Percentage of female employees inmanagement positions
Number of days spent on learningand research per person
Results of employee awarenesssurveys*1

21,946

A

10.9%

C

14.2 days

C

52%

C

Business sites throughout Japan
Overseas sites centered in ASEAN

Stable financial base	Strong profitability andcapital efficiency

Initiatives to Maintain andStrengthen Capital
Promoting structuraltransformation of business bystrengthening investment /Promoting capital optimization /Reducing cross-shareholdings
Please refer to “Financial Investment Strategy”
on page 58.

	Diverse human resources
engaged as movers
	Sustainable engagement

Strengthening Engagement /Promoting Diversity and Inclusion /Supporting Advancement ofDiverse Human Resources / HealthManagement / Workstyle Reform /Strategic Inclusion in Training and
Education

Supporting safe and secure,daily credit card settlement

Promoting cashless
settlement in Japan

Credit cards

Branded debit card-relatedCore system development
results
Domestic market share

About(On annual transaction volume basis for clients served)

Results of client satisfaction survey*2
Number of business partners
Results of business partner
satisfaction survey*3
Linkage with startups(CVC investees)

NaturalCapitalExtensive service menu
(aggregate number of solutions)Group awareness(among business people)
Trinity: Original quality
management system

Domestic market share

54 of 99 banks

86%(regional banks)

There are about 460 million debit cards affiliatedwith an international brand in Japan. Settlementtransactions have reached about 770 million peryear, with an aggregate value of about ¥3.3
trillion. The TIS INTEC Group boasts anoverwhelming share—about 86%—of themarket, on a transaction-handling financial
institution basis, through such solutions as
DebitCube+, which provides one-stop access toservices required or branded debit card issuanceand operation.

Launched Group B2B CRM Service in April 2023.
Expands scope of service availability to Group
companies as well to provide F3 beyond clientbase of banks to leasing companies, credit cardcompanies and companies in other financial
sectors. Going forward, plan to complement fully
cloud-based call center service with CRM (SFA)
function through multi-cloud and microservice
deployment models.

Support business DX (optimization, greater
efficiency) in business-to-business transactions

Highly evaluated as restaurant
sector-specific shop management system

Contributing to the business of new electric powercompanies in the wake of electricity deregulation

EDI

TastyQube Growth

Please refer to “With Employees” on page 93.

About 160 sites
10 countries

Domestic
Overseas	Outsourcing sites based on
business continuity

Development of high-quality
services that respond toenvironmental changes andclient needs

Approx. 15,000 companies
More than 600 companies
69.6%
About 540
companies
83%

Domestic
Overseas
D
D
D	Stable business promotion
through a strong relationshipof trust

Please refer to “With Clients” on page 97.
Please refer to “With Business Partners” onpage 98.

D

44 companies

B

143,909 MWh

About 500

Domestic

67%

Domestic

Strengthening customer
relationships and satisfaction
by capturing a wide range ofcustomer requirements andleveraging them in development
and service provision	High energy efficiency throughenvironmentally friendly data
centers

Strong technological capability
	Abundant experience andknow-how	Dedication to improving
quality, productivity, andtechnology

Market share

Please refer to “For the Global
Environment” on page 89.

Sharing of development knowhow and technical issues / Tech
Lead Team activities / Brand
maintenance and enhancement
Please refer to “Intellectual Property” onpage 103.

20%

*1

About

20%

(Top 250 companies in the restaurant sector)

Hold industry’s top share of EDI/SaaS market.
Fast response to PCI DSS and EDI 2024 issues
as well as extensive industry-oriented EDI and EAI
platform building and operating results.
Will take industrial OS business co-creation
platform to new level, bridging existing EDI and
API, for which demand is expected expand.

TastyQube Growth is highly versatile and can beapplied to any restaurant format, helps tovisualize shop operations, and realizes enhanced
operating efficiency.
Earning high regard for offering necessaryfunctions for restaurant/shop management
in all-in-one package, this solution has been
applied to about 20% of market share, mainly forrestaurants, cafes and pubs.

Contributing to stable insurance
system platform creation

Contribute to greater efficiency in clients’ address
management operations

For Federation of
National Health Insurance
Associations

National address master file
“ADDRESS”

Track record in system implementation/
operation/maintenance

12 of 47 prefectures
Of the 47 prefecture-based members of theFederation of National Health Insurance
Associations in Japan, the TIS INTEC Group has
been tapped to install, operate and maintainsystems for 12 members.
About 5.2 million people are covered by these
12 insurance associations*2.

EneLink

50 systems deployed at 30 companies

New electric power businesses

10 of 30 leading PPSs
Following the full deregulation of the electricity
retail market that began in April 2016, we havecontributed to the businesses of PPSs and Japan's
power system reforms by providing rate
calculation systems, supply–demand management
systems, and other products as part of the
EneLink series.
We will continue to address issues related toelectric power and energy, which are thefoundation of industry and daily life, such as stablesupply, cost reduction, and decarbonization.

Implementation ratio in
non-life insurance sector

More than95%(Excludes insurance companies offering specialized ­products,
such as pet insurance and reinsurance)

All addresses in Japan are assigned a 10-digit code,
creating a master file of some 300,000 kana andkanji-based addresses.
ADDRESS deals with changes in client addresses
caused by the merger of cities, towns and villages,
standardizes address information, and facilitatesefficient profile-building. Applications in the non-life
insurance sector include estimating fire insurance
premiums.

Note: Market data (market share) is based on TIS research.
*1 Fiscal 2022 results of EDI tool, SaaS, vendor share, amountare based on “Software Business New Market 2023” by Fuji
Chimera Research Institute, Inc.
*2 The scope is the National Health Insurance system.

Scope of data collection
A. TIS INTEC Group consolidated
B. TIS and consolidated companies including 12 domestic companies and nine overseas companies
C. TIS, INTEC, AGREX, QUALICA, AJS, TIS System Service, and TIS Solution Link
D. TIS parent

23

24

Corporate Information/Data

Figures are as of March 31, 2023.
*1 Percentage of respondents answering positively to the question “Overall, this company is a good place to work” in the employee awareness survey.
*2 Percentage of respondents who answered we were “an irreplaceable business partner” in the client satisfaction survey.
*3 Percentage of respondents who answered “satisfied with our business and relationship” in the business partner satisfaction survey.

Promotion of renewable energy
use / data center consolidation

System implementation

SaaS market

Platform for Value Creation

Intellectual
CapitalEnergy consumption (electricity)

F 3 (F Cube)
Implementation

Growth Strategy for Value Creation

Number of clients

Service provision/systemdevelopment results

Of 26 companies in Japan with significant
consumer credit transaction volumes, 11 are in
the Group’s client base for core systemdevelopment.
Credit extended for card-facilitated purchases
has reached ¥81 trillion in Japan. The 11
companies that are in the TIS INTEC Group clientbase have aggregate membership of about 200
million people and credit transaction volume
representing about 50% of the total market.

About

Social &RelatedCapital50%

Support progress of banking businessoverall through use and application of digital
data generated through client contact

TIS INTEC Group Value Creation

Manufacturing
Capital

Net assets
Equity ratio
Credit rating
Investments in growth

Features

Top Message

Human
CapitalScope of
Aggregation

InputsFollowings are examples of IT services in the TIS INTEC Group portfolio that help support clients’ businesses, the lifestylesof individuals and social infrastructure
Introduction

The capital that the TIS INTEC Group has developed over the years is an indispensable element for sustainable corporate
value growth and a source of value creation. We aim to create further value through the enhancement and effective
utilization of this capital.

Stakeholder Engagement
The Group will build relationships of trust through active communication with respective stakeholders and, in harmony
with society, to improve sustainable value.
Introduction■ Indispensable to Group operations,

Employees

companies to address client-side businessconcerns and help solve social issues■ Provide the best services■ Plan/propose new application formats for IT■ Lead/support realization of vision andstrategies■ Provide capital that supports Group

Shareholders
and Investors

Clients

website, main phone line)
Seminars,fairs and forums for clients●●P ublication of PR magazine, technical brochuresand e-mail newsletters● Client satisfaction surveys● Regular and extraordinary meetings and others

TIS
INTEC
Group

● General meeting of shareholders● Results briefings● Small meetings, domestic and overseas roadshows, participation in conferences● Information disclosure on IR section of corporate websites● Integrated Report and others

Platform for Value Creation■ Direct and indirect support of Group’s■ Partners helping to enhance value provided

Business
Partners

Local
Communities● Participation in local events● Support for activities contributing to society● Charity concerts● Public feedback posted on website● Responses to relevant ministries/agencies,

industry associations and others

corporate activities in areas wherecompanies operate through provision ofvarious infrastructure■ Realize the means for safe and secure living■ Active interaction with local residents inareas in which we operate■ Reduction of environmental impact

Corporate Information/Data● Information meetings on policy (guidelines)● Creating opportunities for discussion (project information)● Engineer development and support(educational support, seminars)● Opinion exchange groups● Business Partner Satisfaction Survey and others

25

business activities and participate inmanagement through the exercise of voting
rights, etc.
■ Sustainable improvement in shareholder
value and return to shareholders■ Highly transparent disclosure■ Engaging in constructive dialogue

Growth Strategy for Value Creation● Customer service points of contact (call center,through Group operations and contributing
to business growth and creation■ Create new added-value■ Fair, transparent, open competition andappropriate business practices■ Responsible procurement

TIS INTEC Group Value Creation■ Users of services offered by GroupTop Message● Company news, Group news, internal portal site
● Employee awareness surveys● Personnel exchange groups, opinion exchange groups● 1-on-1 career formation● President’s Caravan and other activities and others

bringing about corporate growth throughdemonstration of diverse personal skills
and self-directed collaboration anddevelopment■ Provide opportunities for growth andpersonal development■ Provide environment that is safe andcomfortable■ Promote diversity■ Providing appropriate and attractive
compensation for performance■Definition of stakeholder■Value provided to stakeholders

26

Materiality and Sustainability Promotion

g Sustainability Promotion System

To strengthen measures for corporate sustainability, TIS identified materiality as a key issue for the Group in fiscal 2019, andclarified priority themes where efforts would be focused, considering stakeholders’ expectations of us, our impact on society, and
the Group’s strength.
To clarify important themes and identify materiality, we assessed importance from a stakeholder perspective, that is, impact
on, as well as from a Group perspective, notably, the effect on the Group itself and its growth prospects.

The President takes ultimate responsibility for the Group’s sustainability activities. Under his leadership, the Corporate
Sustainability Committee identifies trends, discusses sustainability issues, selects issues to focus on, and provides direction on how
to address them at Board of Directors meetings. Issues definition and proposed solutions are presented to the executive throughthe Management Committee. The Head of Corporate Sustainability coordinates efforts to define the issues and the directionof their resolution with the relevant departments and incorporates measures to resolve them in annual and medium-term
management plans. Progress is monitored by the Management Committee and overseen by the Board of Directors as appropriate.

1.	Create a society in which diverse human resources are engaged and thrivea. Promote diversity
b. Promote workstyle reformsc.	Human resource development and training emphasizing self-fulfillment

Board of Directors
Corporate Sustainability
Committee

President

4.	Enhance corporate governance and earn the trust of society
j. Corporate governancek. Compliancel. Risk management

Management Committee

Composition members
Chief corporate sustainability officer (chair), directors,
Audit & Supervisory Board members, corporate
sustainability promotion officer, division managerof the Corporate Planning SBU, and department
manager of the Corporate Planning Department.

Top Message

2.	Create a comfortable society through innovation and joint activitiesd. Promote safe, convenient social foundation that supports people and societye. Connect with stakeholders and promote joint activities
f. Reduce environmental impact

3.	Create a safe society through high-quality services
g. Continuous quality improvement
h. Information security
i. Safeguard personal information

Introduction

g Materiality (Key Issues) for the TIS INTEC Groupg Identifying Materiality

EvaluateappropriatenessWe 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.

We 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 appropriatenessof issues recognized andimportance assessed throughstakeholder dialogue.

Executive Officers

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

Divisions/ Departments

1. Create a society in which

Consider resetting pointsof materiality

Tap experts
to verify
appropriateness2. Create a comfortablesociety through innovationand joint activities

3. Create a safe society

through high-quality
services

4. Enhance corporate
governance and earn thetrust of society

Stakeholder dialogue

Sustainability management

Corporate sustainability promotion officer

Masakazu Kawamura, Executive Officer,
Division Manager of Corporate Planning SBU

Internal control

Director in charge of internal control

Tsuneyoshi Ito, Managing Executive Officer,
Division Manager of Corporate Management SBU

ComplianceDirector in charge of compliance

Tsuneyoshi Ito, Managing Executive Officer,
Division Manager of Corporate Management SBU

Information security/
Infromation security management officer
personal information protection

Tsuneyoshi Ito, Managing Executive Officer,
Division Manager of Corporate Management SBU

Quality control/
product innovation

Trinity administration officer

Ikuo Shimizu, Managing Executive Officer,
System Development & Quality Management Innovation SBU

Tax affairs

Director in charge of finance

Masakazu Kawamura, Executive Officer,
Division Manager of Corporate Planning SBU

Promote safe, convenient social foundation that supports people and society
Safeguard personal information
Information security

Environment
Dialogue themes

Masakazu Kawamura, Executive Officer,
Division Manager of Corporate Planning SBU

Environmental promotion officer

Tsuneyoshi Ito, Managing Executive Officer,
Division Manager of Corporate Management SBU

Connect with stakeholders and promote joint activities
Promote workstyle reforms
Reduce environmental impact

Promote diversity
Compliance

Human resource development andtraining emphasizing self-fulfillment

Risk management
Corporate governance

August 2018
Appropriateness of materiality

Corporate sustainability promotion officer

Masakazu Kawamura, Executive Officer,
Division Manager of Corporate Planning SBU

June 2022
	Progress on sustainability
initiatives

Human capital

Human resources strategy promotion officer

Kyoko Takayanagi, Managing Executive Officer,
Division Manager of Human Resources SBU

Human rights

Human rights officer

June 2023
	Challenges and potential
in healthcare IT

Shinichi Horiguchi, Director, Senior Managing Executive Officer,
in charge of Corporate Planning SBU, Human Resources SBU,
Corporate Management SBU

Supply chain

Corporate sustainability promotion officer

Masakazu Kawamura, Executive Officer,
Division Manager of Corporate Planning SBU

Please refer “Stakeholder Dialogue” onpage 31 for details.

Social contributions

Corporate sustainability promotion officer

Masakazu Kawamura, Executive Officer,
Division Manager of Corporate Planning SBU
28

Corporate Information/Data

Importance to stakeholders

Corporate sustainability promotion officer

Continuous quality improvement

Importance to TIS INTEC Group27

Responsibility

Platform for Value Creation

Importance of Materiality Assessment

ESG issues

Growth Strategy for Value Creation

Assess importance to theGroup

Discussion within the Group

diverse human resources
are engaged and thrive

Materiality

The Group’s
basic philosophy,
strategies

Materiality matrix

IssuesGuidelines(such as SDGs, GRI,
ISO 26000, etc.)

Group Companies

The Group determine the organization in charge of each ESG area to increase effectiveness of ESG initiatives.

Social issues
Assess importance to stakeholders

TIS INTEC Group Value Creation

Assess priority and categorize/consolidate

Recognize issues

Materiality-Related Initiatives and Targets

Introduction

g Risks, Opportunities and Promotion Strategies Related to Materiality

We are improving the effectiveness of our materiality initiatives by focusing on more specific actions through analyzing theimpacts that the Group aims to reduce and identifying opportunities for each identified materiality theme.
We are also working to achieve sustainability management through the execution of Medium-Term Management Plan.
Materiality themes

Promotion of Medium-Term Management Plan

Opportunities to be seized
Boost value creation capacity• Enhance innovation abilities• Secure human resources• Boost productivity throughgreater employee engagement

Service-Style Business
Strategy

Global Business Strategy

Human Resources Strategy
Strategy to
Enhance Management
Capability

Enhance corporate credibility• Better management quality• Eradication of misconduct

g Materiality-Related Initiatives

Financial Investment
Strategy

Resolvingsocial issues throughbusiness activities

Improvingvalue exchangewith stakeholders

Enhancingmanagement to address
to social needs

TIS INTEC Group Value Creation

Construct a sustainable profitmodel• Shift to a better profit structure• Market growth• Global environmental protection
and climate change adaptation
Boost market competitiveness• More attractive products andservices• Optimization of manufacturing
costs• Responses to country risk andtechnological advance

We are promoting initiatives toresolve social issues through ourbusiness and to enhance
management in response to social
needs through value exchange with
our stakeholders with the goal ofcontributing to a sustainable society
and to achieve sustained
enhancement of corporate value.
To manage this progress, wehave established an index value inthe form of value exchangeability
with stakeholders plus economic
indicators, and we are working toachieve this through the achievementof Medium-Term Management Plan.

DX Business Strategy

Top Message

Impacts to be reduced• L abor shortages that reduce productivity
1. Create a society• Inability to input the necessary human resources causing business
in which diverse
growth to be impeded
human resources are • L ack of technology for new areas
engaged and thrive• L ess creativity and imagination among employees• L ess intra-Group and intra-organizational synergy•O pportunities lost through stagnation of R&D, etc.
2. Create a comfortable • W eak framework for considering new business causing lost businesssociety throughopportunities
innovation and joint • E nvironmental burden triggering natural disasters, which in turnactivities
damage social infrastructure•C hanges to environmental regulations• Productivity and quality reduced due to lack of manufacturing capacity• Deterioration in business sentiment causing customers and business
partners to go bankrupt and existing customers to fall away
3. Create a safe society• Lack of understanding of technological trends and customer needs,
through high-quality
among other deficiencies, creating the risk of providing services ofservices
inappropriate quality and safety, and reducing competitiveness• Information leaks and cyberattacks• Intellectual property lawsuits•G roup governance deficiencies causing vulnerabilities (compliance, risk
4. Enhance corporate
management, and IT governance)
governance and earn
• F und planning failures
the trust of society•C redibility affected by fraudulent transactions

g Sustainability-Related Indicators and Targets

Materialitya.	Promote diversityb.	Promote work style reformsc.	Human resource development
and training emphasizing­self-fulfillment

2. Create a comfortablesociety throughinnovation and joint
activitiesd.	Promote a safe, convenientsocial foundation that
supports people and societye.	Connect with stakeholders
and promote joint activitiesf.	Reduce environmental impact

4. E nhance corporate
governance and earn
the trust of society
29g.	Continuous quality
improvementh.	Information securityi.	Safeguard personal
informationj.	Corporate governancek.	Compliancel.	Risk management

GHG emissions Scope 2
Governance

Strategic shareholdings

Number of serious
information security
incidents
Compliance
Penetration of Group
Philosophy

Fiscal 2023 Results
Two year CAGR 43%

Targets
Three year CAGR exceeding 10%(From fiscal 2021 to 2023)(From fiscal 2021 to fiscal 2024)

18.8% Fiscal 2024
¥62.3 billion Fiscal 2024
12.3% Fiscal 2024

13.7%
¥63.5 billion
12.0%¥48.6 billion Fiscal 2024

¥50 billion

58% Fiscal 2024
62%
59% Fiscal 2024
60%
74% Fiscal 2024
81%
Scope
1
+
2:
	
Achievecarbonneutral481t-CO2
status by fiscal 2041
Scope 1 + 2 + 3: 	Realize net zero status
53,076t-CO2
by fiscal 2051
Ratio of strategic shareholdings on
Ratio of strategic shareholdings onbalance sheet to consolidated net assets:balance sheet to consolidated net assets:
8.9%
10% or less (gradually reduce further)0

0
Corporate Information/Data

3. Create a safe society
through high-quality
services

Indicators
Key theme of
EPS growth
Medium-Term
Management ROE
Plan
Operating income
Operating margin
Sales of societal issue
solution service
Value
Job satisfaction
exchange
Client/service satisfaction
Business partner satisfaction
Environment GHG emissions Scope 1

Platform for Value Creation

1. C reate a society
in which diverse
human resources areengaged and thrive

Fiscal 2023 Results• Implementation of e-learning and training on understanding diversity• Revise personnel and promotion system to allow active participation
regardless of gender or age• Build an organization promoting job satisfaction and well-being, andimplement measures for psychological safety• Build and revise system to support voluntary career development, andprovide learning opportunities including DX education• Promotion of social-problem-solving services businesses to achieve sales
targets• Promoting social contribution activities such as calling for participationin volunteer activities, support for people with disabilities, clean-up
activities, dispatching lecturers, supporting non-profit organizations,community initiatives, and so on• Reducing paper and electricity consumption, and reducing GHG
emissions at data centers through consolidation, planned switchover torenewable energy, and other measures• Improvement activities and PDCA (plan, do, check, act) implementationto achieve enhancement innovation goals• Activities to strengthen relationships with business partners, such as
holding exchange meetings and forums, to increase business partner
satisfaction• Analyzing surveys and implementing improvement measures toincrease client satisfaction• Promoting business continuity planning by conducting disaster
preparedness drills and initial response drills to prepare for emergencies• Conducting e-learning to improve information security and incident
response skills, as well as targeted attack e-mail training and incident
response training• Implementing self-inspection of personal information protection,e-learning of the Group’s Code of Conduct, and training on
whistleblowing• Implementing self-assessment questionnaire for business partners• Implementing training to entrench OUR PHILOSOPHY• Implementing study sessions to raise the level and awareness of thewhistleblower system• Implementing e-learning on human rights

Growth Strategy for Value Creation

The Group promotes initiatives across its major companies for each materiality identified.

As a foundation of management, continuously promote awareness,and monitor the progress.

30

Stakeholder Dialogues

Introduction

The Group considers dialogue with stakeholders to be an important opportunity. Accordingly, we hostregular dialogues between outside experts and Group management. We aim to create a virtuous cycle bycommunicating the efforts of our Group, reflecting objective opinions and new insights from differing
perspectives in our corporate activities, and linking them to even higher-quality initiatives.
g Overview of Stakeholder Dialogues

On this occasion, we invited two external medical experts, Mr. Oguchi and Mr. Miyachi, to participate in a stakeholder dialogue.
The aim of the dialogue was to explore the potential for applying the Group’s IT capabilities, intellectual property, and know-how
in the field of healthcare IT. After explaining our business situation and Group strengths, we received objective and frank opinionsfrom Mr. Oguchi and Mr. Miyachi regarding the challenges and potential of applying IT to healthcare.
Masahiko Oguchi

2009: Director, Radiation Oncology Department, Cancer
Institute Hospital of JFCR; 2012: Junior Hospital Director(same hospital); 2018: Deputy Hospital Director (samehospital); 2023: Appointed to current position.
Radiation oncologist. Currently, Mr. Oguchi is engaged indeveloping an integrated cancer care support system using
AI and deploying that system to create an Innovative AI
Hospital System to provide precision cancer care.
Board certificated Radiation Oncologist.

04

Growth Strategy for Value Creation

TIS INTEC Group Value Creation

Profiles of external experts

Top Message

Theme:
Challenges and Potential in Healthcare IT
Date:
June 30, 2023 (Friday)
Participants: [External experts] Masahiko Oguchi	Advisor and Director of Medical Information Department, Cancer InstituteHospital of JFCR		
Hiroki Miyachi	Director, Kakegawa Higashi Hospital of Medical Corporation RYOUWAKAI[TIS Inc.]
Masakazu Kawamura	Executive Officer, Division Manager of Corporate Planning SBU,
Corporate Sustainability Promotion Officer		
Hirohito Yoshida	Executive Fellow, Healthcare Services Unit
[INTEC Inc.]
Koumei Yamaguchi
Managing Executive Officer, Division Manager of Social Infrastructure
Business Division[Facilitator]
Tomohiko Yamaguchi Consultant, Cre-en Inc.

Hiroki Miyachi

After working as a surgeon for 10 years, Mr. Miyachi
became a home healthcare physician. Currently, he istaking medical tours around the world to find solutions tothe current situation in Japan, which has one of the world’s
most aging populations, and is exploring new forms of
medical care through the exchange of knowledge. He
assumed his current position in 2019. Doctor of Medicine,
specializing in general medicine and surgery.

Executive Vice President’s Message (Business Strategy)

35

Looking Back on Past Medium-Term Management Plans

39

Outline of Medium-Term Management Plan (2021–2023) 40
Key Strategy of Medium-Term Management Plan
—DX, Service-style business, payment, global,
management capability, HR—

41

Special Roundtable: Status of Service-Style Operations

53

Message from the Director in Charge ofCorporate Organization

57

Financial Investment Strategy

58

Business Strategies by Segment

61

Platform for Value Creation

	The most significant challenge facing Japan’s
healthcare system is the aging population. The
system requires considerable investments andhuman resources to manage long-term care andage-related chronic disease, but it is unclear which
entities will handle implementation and where thefinancial resources will come from.
	It will no longer be possible to rely solely on social
security for medical expenses and humanresources. Potential solutions include informalcare, more efficient coordination of information,and prevention. IT can make a great contribution
in all of these areas.
Masakazu Kawamura (left), Hirohito Yoshida (right);
	Challenges for applying IT to the healthcare fieldon-screen: Koumei Yamaguchi (left), Masahiko Oguchi (right), Hiroki Miyachi (bottom)
include improving security and user literacy (toprotect personal information) and promoting collaboration across information owners.
	We see examples of healthcare support through microfinance in Africa and elsewhere. There is also potential to leverage thestrengths of the TIS INTEC Group to create innovations in healthcare that improve quality and expand the number of service
recipients.
	In the healthcare area, there is a high degree of uncertainty and no unified rules. Rather than simply waiting for improvements,
therefore, we should co-create with like-minded stakeholders and deliver successes, even small ones that cannot be
immediately monetized.

33

Growth Strategy for Value Creation

g Main Issues Identified

Taking Long-Term Perspective on Target Trajectory

Corporate Information/Datag In Conclusion

Through our dialogue, we came to realize that our Group’s strengths have the potential to help resolve social issues in thehealthcare field. Even in sectors where issues are difficult to address due to structural matters, we became convinced that we caneventually create significant social value. We can do this by maintaining broad perspectives to address social issues, utilizing ourGroup’s IT capabilities and knowledge, and strongly emphasizing collaboration with various like-minded stakeholders to compile arecord of success stories, even small ones.
We will continue drawing on the insights gained from this dialogue to enhance value exchange with various stakeholders andbecome a corporate group that is needed by society. At the same time, we will strive to deliver happiness to more and more
people. (Masakazu Kawamura, TIS Inc.)*Please see below for a transcript of the entire dialogue:
https://www.tis.com/group/sustainability/stakeholder/3132

Make society’s wishes come true through IT.

Taking Long-Term Perspective on Target Trajectory

Using advanced technology and know-how, we will add a new dimension of vitality to society and bringsmiles to the faces of more people. Our presence will shape the future of this kind of society.
The TIS INTEC Group will continue to make society’s wishes come true through the power of IT.
Introduction

The society of the future is uncharted territory, shaped by intense but still unfolding changes, and the power of IT will be
indispensable to paint this new world in bright colors. By moving forward on structural transformation to addresschanges in society and demonstrating the composite strengths of the TIS INTEC Group, we will create an enduring
presence that helps make society’s wishes come true.

2050

World in 2050
In making assumptions for 2050, we took into account 24 political, economic and social themes, in parallel withtechnological progress and the impact that such advances might have, and performed PEST analysis.

Economy• Hub of global economy will shift to emerging countries of Asia that continue to enjoy high economic growth• Disparity between countries will shrink, paralleling economic growth, but personal income gap will widen

Society• Population growth is particularly noticeable in Asia, where the benefits of economic progress have extended average life expectancy
and produced an aging society• Technological innovation is fueling economic growth in urban areas while regional economies, impacted by a decrease inpopulation and little promise of a demographic turnaround, are in decline

Technology• Technological innovation will accelerate, technological breakthroughs will become more frequent, and technology will have a major impact
on political, economic and social activity

Above

2026

70%

Group Vision 2026
“Create Exciting Future”
Utilize advanced technologies and know-how torealize business innovation and market creation

March 2024

Strategic domain ratio

Four social issues TIS identified as priorities
where Group strengths can contribute to solutions
Health concerns

Urban concentration and regional decline

Low-carbon/decarbonized society

60%
Please see
page 40.

Basic Policies

Virtuous cycle of value created jointly
by society and employees

Expandinvestment togenerate
strengths

Resource layer
Shift to human resources composition conducive
to structural transformation success

IT Offering Services

IT system
configuration andoperation

Specific
responses

Business Function
Services

Strategic Partnership
Business

Provide IT
engineeringexpertise

Service domains

IT domains

Service domains

Business Function Service (BFS)

For clients at the top of their industry, we will draw on industry foresight andbusiness knowledge that other companies cannot match—our businesstools—to explore and promote business strategies with clients and underpin
business basics.

We will combine industry and business knowledge accumulated within theGroup and utilize advanced technologies to anticipate client needs and provide
business functions as services to enhance their value chains.

IT Offering Service (IOS)

Frontier Market Creation Business (FCB)

We will combine leading-edge technologies and know-how accumulated as acorporate group to create and quickly provide IT solution services that
anticipate client needs.

We will utilize Group technology, operating know-how and customer bases tocreate new markets and business models matched to evolving industry andsocial needs and develop businesses for these markets on our own.

Corporate Information/Data

33

Medium-Term Management Plan (2021–2023)
Be a Digital Mover 2023
Accelerate structural transformation
by improving value provided in DX services

BPO services

Evolution ofstrategic domains

Strategic Partnership Business (SPB)

Diversification of human resources, sharper skills

Medium-Term Management Plan
2018–2020

Network
infrastructureservices

IT domains

Deepen andextend global
operations

Strategic domain ratio

Marketable
services

Platform for Value Creation

Business layer
Turn SI capabilities into strength that underpins
transformation into global DX partner

March 201835%

Frontier Market
Creation Business

Stakeholder layer

Generate virtuous cycle of value exchange andsustainable growth between society and employees

Improve value
provided by DX

Strategic Domains in 2026

Business
CreatorSupportingclients’ businesses

Strategic domain ratio

Strategic Domains*
Strategic Partnership Business: Lay both a revenue base and atechnology/know-how base
IT Offering Services: Prior-investment business functioning as
pillar of profit
Business Function Services: Recognized as Group forte, driverof growth
Frontier Market Creation Business: Driver of explosive growththrough creative destruction of prevailing walls

Business Domains in 2016

Medium-Term Management Plan (2021–2023)

March 2021

51%

Seeking Position on Global StageBe seen by leading companies in different industries as having
an appealing presence, always trusted as a strategic partner
Always embrace reform in existing industries and markets,and earn reputation as market-creating innovator
Transcend the limits of an IT enterprise; be a leading company
with innovative market concepts
Proudly demonstrate high profile and showcase solid standing
as a corporate group chosen by clients, society, employees—
everyone* Strategic Domains: Four business domains
will form the core of the TIS INTEC Group by
2026, as described in Group Vision 2026.

Growth Strategy for Value Creation

Financial inclusion

TIS INTEC Group Value Creation

2026 Corporate Ideal*View of the world in 2050 drawn at Sustainability Project in 2019.

Based on long-term trends, we identified four social issues—financial
inclusion, urban concentration and rural decline, low-carbon/decarbonizedsociety and health concerns—that we have the capabilities to address.

Taking advantage of the shift to an operating holding
company structure in July 2016, TIS drafted a newgroup vision that imagined the TIS INTEC Group in
2026. This guides efforts to combine the capabilities ofGroup executives and employees alike and takecorporate value to new heights.
We want clients to rely on us as a strategic partner.
To this end, we will always embrace reforms in existing
industries and markets and strive to be an innovator
creating new markets as well.

Strategic domain ratio

Top Message

Politics• Predict pension and social security system failure due to changing demographics• Trend to limit impact of corporate activities on society, with tougher restrictions on use of fossil fuels and use of resources as measures todeal with climate changeGroup Vision 2026
“Create Exciting Future”
Utilize advanced technologies and know-how torealize business innovation and market creation

34

Executive Vice President’s Message (Business Strategy)

Josaku Yanai

Looking back on accomplishments as of fiscal
2023
Strong performance growth thanks to system-building
capabilities—source that powers virtuous cycle

Reinforce staffing and service menu to meet DX needs
A theme in Medium-Term Management Plan (2012–2023) is
to improve the value of DX services provided, and enhanced
DX consulting is part of that process. Toward that end, we aim
to increase our force of DX consultants from around 250 to
500 by March 31, 2024. A year ahead of that, we alreadyhave a strong group of 420 DX consultants. Bringing
companies, such as Miotsukushi Analytics Co., Ltd., and Fixel,
Inc., under consolidation, we added data scientists, UI/UX
designers and other new job categories to our humanresources structure and now deliver broader value to clients inthe DX services we provide.
Clients’ DX needs are diverse, but we are seeing
particularly favorable interest in Spendia, a cloud-based mobile
app for expense settlement, and robotic process automation(RPA), which automates tasks within a business, and weanticipate increased demand for TIS’ Predictive Management

The domestic labor shortage is a pervasive social issue and, as
elsewhere, medical facilities across Japan recognize the urgent
need to embrace DX to enhance operational efficiency. INTEC’s
Hospital Information System (HIS) business is booming,
substantiated by a solid track record of results, especiallyrequests from national hospitals and university hospitals
nationwide for platforms that facilitate medical information
coordination and for EXpath, a pathology/cytology diagnostic
support system, which features in such platforms. At hospitals,
pathological examination requests are generated by various
departments, and once a specimen has been examined, theresults should be available to the requesting doctor by opening
the patient’s electronic medical record. Expath facilitates thisworkflow. The system not only integrates and coordinatesinternal hospital systems, such as electronic medical record
information, but also allows doctors to share information withpeers at other medical facilities. In the future, this will be abusiness area in high demand from a social perspective,
specifically due to the aging demographic.

36

Corporate Information/Data

35

Various approaches to improve value in DX
services provided

INTEC’s HIS business supports hospital DX

Platform for Value Creation

Looking back over the first two years of Medium-Term
Management Plan (2021–2023), it’s clear that the Financial IT
Business and the Industrial IT Business have been the drivers ofoverall growth. Strong performance growth during these twoyears is a reflection of our composite ability to demonstrate
system engineering strengths underpinned by many years ofaccumulated know-how. We marked steady progress on
multiple large-scale projects, including integration of missioncritical systems and rebuilds, complemented by brisk orderactivity for large migration and modernization projects to
upgrade old technology and platforms as well as enterprise
resource planning (ERP) systems.
Efforts on the frontline of system development werecertainly a component of positive business results, but twodevelopments at the head office also contributed. One was ameasure implemented by the System Development & Quality

Management Innovation SBU where people with project
management experience review projects handled by TIS andother Group companies from a third-party perspective.
Enhanced support and practical advice formed from an
in-depth understanding of frontline operations translated intohigher quality and fewer unprofitable projects. The other wasan effort by the Technology & Innovation SBU to improve
productivity. The emphasis was on three tools—Nablarch, anapplication development/implementation platform created by
the unit; canal, a mutual support site available to engineers
throughout the Group; and Fintan, a development know-how
website designed to sharpen overall engineering capabilities
throughout the Group—that led to higher productivity perperson and, ultimately, enhanced profitability.
At the same time, individuals steadily honed sharper skills,
exemplified by the ability of employees across the Group to
carry out their work fully remotely during the pandemic in aquickly set up, secure but non-location-specific development
environment. As a result, the system-building capabilities of
the TIS INTEC Group are well recognized within the industry,
with client trust driving a virtuous cycle of new orders.

TIS decided to enhance the convenience PAYCIERGE byextending functionality and, anticipating an end to the ban on
digital salary payments in Japan, added a digital payroll
gateway service to the solution menu in November 2022 thatfacilitates salary payment through au PAY. With governmentimposed restrictions on digital salary payments lifted as ofApril 2023, TIS will be focusing more energy on services,seeking to respond comprehensively to market needs. In
addition, this past March, in cooperation with Mizuho Bank,
Ltd., TIS began providing Aizu Coin, a digital regional currency
service in Aizuwakamatsu, Fukushima Prefecture. This is apayment method connected to a data linkage platform
provided by the city and is intended to encourage widespreadawareness of cashless settlement, promote access to andutilization of data on payments made in various settings within
the city, create new local services and thereby invigorate theregion.

Growth Strategy for Value Creation

Josaku Yanai, TIS Executive Vice President and Representative Director, talks about progress in improving the value of
DX services provided, future drivers of growth and efforts in the social issue solution services business.

Further diversification in forte field of payment services

TIS INTEC Group Value Creation

We assume a global perspective to pinpoint social trends andutilize digital technology to help solve social issues.

Top Message

Representative Director,
Executive Vice President

Service-type businesses are the fuel for accelerating structuraltransformation, and I see favorable progress toward our goalof ¥50 billion in sales from the social issue solution business by
the end of March 2024, as described in Medium-Term
Management Plan (2021–2023). Behind this success is a
consolidated team reaching upwards of 1,500 employees inthe Digital Transformation Business Unit at TIS alone and afocused approach to developing service-type businesses. The
DX Business Unit comprises several structures, including one incharge of PAYCIERGE, TIS’ digital payment solution, and one
engaged in the healthcare business that I will touch upon later,
but all are specialized structures focused on service-typebusinesses that provide services we ourselves have createdthrough upfront investment.
Clients are showing greater confidence in the safety ofcloud services and are increasingly interested in cloud services
from the perspective of reduced development time and costs
as well as convenience. The need for service-type businesses isthus growing. Against this backdrop, in 2022, TIS debuted
CreditSaaS, a credit card processing service promoted as thebiggest service solution under the PAYCIERGE label. This wasan epoch-making moment for TIS.
TIS has built a strong reputation as a system integrator
supporting clients through customized systems. But INTEC,
too, has a commendable track record with F3 (pronounced “Fcube”), which helps companies access and utilize customer
data and has been installed at most regional banks in Japan.
INTEC also boasts the No.1 share of the domestic market for
configuration and operation of electronic data interchange(EDI) systems, which facilitate exchange of businessdocuments between companies. Meanwhile, TastyQube
Growth, a store management system from QUALICA for the
food service sector, has captured 20% of the domestic market.
Groupwide, efforts to leverage service-type businesses are wellon track.

DX Service, a manufacturer-oriented cloud-based service using
predictive AI, which was released in December 2022, and
RoboPMO®, the cloud version of a service for project
management operations, which has been available since
February 2023.
Increasingly, clients’ DX needs highlight access to andutilization of information and the benefits of application
programming interface. We provide the platform forconnecting different systems and collecting distributed data tofacilitate wide-ranging analysis of content on the provided
platform. Within that huge amount of data lies the potential
for major change and growth, from corporate as well as social
perspectives, and knowing how to access and utilize that data
to draw out latent potential is key. I think real digitaltransformation is yet to come.

Introduction

Steady expansion in service-type businesses

Activities targeting growth drivers
The optimization of business portfolio

TIS Inc.
Offering Service
Business

Business Process
Management

Financial IT
Business

Industrial IT
Business

Regional IT
Solutions

Segment
Owner

Segment
Owner

Segment
Owner

Segment
Owner

Segment
Owner

TIS
operating divisions

TIS
operating divisions

TIS
operating divisions
AGREX INC.

Miotsukushi
Analytics Co., Ltd.
Transferredsome businesses(subsidiaries) following
realignment of MFEC
Group.

TIS West Japan Inc.

INTEC Inc.

AJS Inc.

TIS Solution Link Inc.

TIS Hokkaido Inc.
TIS Tohoku Inc.
TIS Nagano Inc.

Strengthen group collaboration
MFEC Public Co., Ltd.

TIS
Chiyoda Systems Inc.

Group inNihon ICS
Co., Ltd.

Turned into consolidated subsidiary to accelerate growth of IOS strategic domain.

Group out

Sequent

Given status of business expansion in overseas markets and future direction, TIS acquired
intellectual assets and software related to payment services and then transferred allshares held by the Company.

Embracing innovation and putting it to work
Generative AI is a new technology with the potential totransform software engineering, and it cannot be ignored. We
get lots of inquiries from clients wondering how best to use
generative AI, and from a business perspective, we are readywith a service that features generative AI in DialogPlay, an
AI-powered platform to create, publish and operate businessspecific chatbots. We are engaged in active discussions, mainly
in-house committee information exchange opportunities andideathons, on possible additional business applications as wellas use of chatbots to boost in-house productivity.
Another emphasis is robotics, which we regard as a vitaldriver of growth. Already, RoboticBase®, a platform developed
by TIS to integrate and manage multiple robots, has been
installed in commercial buildings, including Tokyo Midtown
Yaesu, and service robots for reception, cleaning, delivery andother tasks are in practical use. In addition, given the current

Developing social issue solution businesses consciousof mission
The TIS INTEC Group is engaged in social issue solution
businesses to deliver the brand message “Make society’s
wishes come true through IT” in the truest sense, guided by
the mission described in OUR PHILOSOPHY, the TIS INTECGroup Philosophy.
More and more aspects of social issues can be solved
through the power of digital technology, but with so manysocial issues requiring attention, it would be illogical to assume
the TIS INTEC Group could address them all on its own. For
example, in the area of health concerns, we don’t simply offer
services. Rather, we participate in the PHR Service Business
Association and the Japan Digital Health Alliance working
group to promote wider use of services.
We also work with government, regions and stakeholders
facing similar issues in the areas I mentioned earlier, likeverification tests for the digital regional currency Aizu Coin,smart cities using robotics and MaaS, as well as deployment of
Carbony, the solution brand designed to achieve a
decarbonized society.
Going forward, we confront social issues sincerely andearnestly as a key player maximizing the benefits of digitaltechnology and strive to improve value exchange withstakeholders to better deal with current and evolving social
issues. Through these continued efforts, we will contribute toa sustainable society and realize sustainable improvement in
the corporate value of the TIS INTEC Group as well.

38

Corporate Information/Data37

QUALICA Inc.

As mover that utilizes digital technology

Platform for Value Creation

TIS
System Service Inc.

Technology has advanced rapidly in recent years, but manyclients are confused about how to put new technology towork in their businesses. The TIS INTEC Group will continue tobe more than just an IT vendor, as the market demands therole of an overall organizer offering concrete assistance thatenables clients to determine the direction and the steps totake in implementing DX. Innovation is permeating social
structures worldwide, with China and countries of the Westleading the way. Against this backdrop, the TIS INTEC Groupwill also play a vital role in ensuring that Japan, too, rides thedigital wave.
As technology advances, an issue requiring urgent
attention is management of intellectual property. To date,when system development wraps up on a system integration
project, we destroy all programs and documents in ourpossession, leaving only intangible know-how and experience.
Enhanced management of intellectual property facilitatestransition away from conventional labor-intensive businessmodels. Paralleling expansion of service-type businesses, ourfrontline focus has shifted toward support of robust patentapplication activity, and TIS already reorganized the Legal &Intellectual Property Department back in April 2023 expectingthat intellectual property would assume greater importance inmanagement strategies. We will carefully manage andaccumulate intellectual property as a Group asset to reinforce
our strengths, keen to explore the potential of joint copyrights
and user rights with clients on programs, development
technology and other facets of system integration.

Growth Strategy for Value Creation

Review of business portfolio

Accumulating intellectual property as vital Group asset

labor shortage, robotics is expected to help mitigate various
social issues, including airport services in urgent need of asmart upgrade and self-driving buses to ensure mobility,
especially for elderly folks in rural regions where bus, train andtaxi services are being streamlined due to depopulation at atime when those without cars need public transportation all
the more. We will continue to promote proof of concept andother processes to verify the viability of potential roboticspowered services.
Distributed ledger technology is yet another example ofprogress. Through a capital and business alliance with R3, anenterprise blockchain company, TIS is involved in diverse
blockchain pursuits, including an environment value
distribution platform using blockchain technology; Akliteia, adigital anti-counterfeiting platform developed with Asahi Kasei
Corp.; and BunkerNote, a service provided by Toyota Tsusho
Corporation to centrally manage fuel orders for ships.
Complementing these activities, in April 2023, we set up theWeb3 Business Planning Department, a dedicated structure
focusing on the non-fungible token (NFT) business.
In other activities, we seek to accurately identify newtechnology with the potential to change social structures overthe medium to long term through, for example, research on
quantum computing, and thereby gather extensive know-how
within the Group.

TIS INTEC Group Value Creation

In March 2023, TIS decided to acquire shares in Nihon ICS, aprovider of financial accounting packages for tax accounting
offices and companies, and turn the company into a
consolidated subsidiary.
Unlike large corporations, small and medium-sizedcompanies have not all been quick to jump on the DX
bandwagon. But the delay presents the potential for wider IT
investment by this corporate tier in the future. A feature of the
TIS INTEC Group is a client base heavily represented by large
corporations, so the recent addition of Nihon ICS, with a clientbase of 7,700 tax accounting offices across Japan andpowerful accounting/taxation solutions for small and mediumsized businesses, is a tactical measure to facilitate inroads intoa market that works on a completely different business model
than we are accustomed to. The small and medium-sizedbusiness market serves an enormously large number ofcustomers, so it’s an important and promising market for us,
and it’s a target in our efforts to enhance service offerings.
Looking to the future, we expect synergistic effects throughNihon ICS, including broad-based expansion of TIS INTECGroup solutions related to expense settlement and healthcare.
Meanwhile, our business portfolio is always being
reviewed, and recently we decided to transfer shares in
Sequent Software Inc. and remove the company from thescope of consolidation, and to transfer some operations at
MFEC Public Company Limited in line with businessrestructuring goals.

Top Message

Our global strategy calls for the TIS INTEC Group to be the
top-class IT group in the ASEAN region. Toward this end, weare pursuing capital and business alliances along two
trajectories—marketing channels and technologies—with thefirst focusing on prominent, local SI companies in Thailand,
Indonesia and Vietnam, and the second open to a wide rangeof companies regardless of location. Also, given a progressive
trend worldwide to combine consulting services andtechnology, TIS formed a capital and business alliance with
Vector Management Consulting Pvt. Ltd, a major management
consulting company in India, in January 2023. This is our firstinvestment in the fast-growing Indian market. Going forward,
we will judiciously deepen joint activities and draw on Vector’sknow-how to enhance the value-added component of IT
services provided to clients of the TIS INTEC Group in India,
Japan, China and the ASEAN region.
In addition, we are directing concerted effort into
personnel training through global academic-industrial
partnerships. Global companies deploy some amazing dualpoint strategies that contribute to society while also securing
excellent human resources, such as setting up courses atprestigious universities overseas to teach students about therespective business or the industry as a whole, and thenrecruiting interested students who have done well in theirstudies. We are also considering the establishment of courses
at universities in Southeast Asia as part of human resource

development that will underpin our ASEAN business strategy.
On a groupwide basis, there are about 1,500 employees
who do not have Japanese citizenship, but as recruitment in
the ASEAN region unfolds, the number of employees of othernationalities will naturally increase. In addition, access todiverse skills and experience across different nationalities will
yield greater innovation and be a source of great strength thatdrives our businesses forward. With this in mind, we will
steadily promote diversification of human resources.

Introduction

Strategic business investment and personnel training fora global market

Outline of Medium-Term Management Plan (2021–2023)

We look back on the three medium-term management plans that have led the TIS INTEC Group to
the Medium-Term Management Plan (2021–2023).

The followings are outline and progress of medium-term management plan (2021–2023 ).

Introduction

Looking Back on Past Medium-Term Management Plans

Fiscal 2019–Fiscal 2021

Fiscal 2022–Fiscal 2024

Beyond Borders 2017

Transformation to 2020

Be a Digital Mover 2023

Portfolio management

Constant transformation, with sense of speed

Theme

Portfolio management, in a project sense, blending exceptional
businesses and key strengths into a single approach

Achieving structural transformation
as a corporate family and taking the leadin finding solutions to social issues

As a second step towards achieving Group Vision 2026, the three years of the current medium-term management plan has beena time in which we have enhanced our value chain by improving the value provided in DX services. By promoting further structuraltransformation, we will grow the Group, better positioning ourselves to address social issues. Progress in Medium-Term Management
Plan (2012–2023) has been favourable, and we achieved its targets in fiscal 2023, a year earlier than anticipated.

Basic Concept/
Medium-Term
Management Direction

Profit emphasis
IT brainPortfolio management
Set ROE as key performance indicatorand strive for improved corporate value
and sustainable growth

Basic Policies

Fiscal 2021

Key indicators
Estimates

ActualEstimates¥400 billion¥405.6 billion¥430 billion¥448.3 billion

Operating income¥30 billion¥32.7 billion¥43 billion¥45.7 billion

Operating margin

7.5%

8.1%

10.0%

10.2%

ROE

8.0%

9.9%

12.0%

10.8%

Strive for total return ratio 40%

Payout ratio

16.6% in fiscal 201831.9% in fiscal 2021

Total return ratio

30.5% in fiscal 2018

42.8% in fiscal 2021

Reference: Average annual growth rate over three years
Net sales

+4.0%

+3.4%

Operating income+15.7%+11.8%

39

Key Performance Indicators
Net Sales¥500 billion

Fiscal 2024
[at time plan drawn up]

P osted profit growth and hit operating income and strategic
domain ratio targets—two key performance indicators—byleveraging structural transformation and improving productivity.
Hit ratio of 51% (exceeded target of 50%) in fiscal 2021.
Quantitatively, Service IT Business maintained upfront
investment emphasis. Net sales grew but profitability was
an issue despite. BPO, Financial IT Business and Industrial IT
Business raised added value and productivity and were rewarded
with higher profitability.
Made progress on strategic domain restructuring and achieved
profit growth, but advance on monetizing Service IT Businessand achieving qualitative structural transformation through newpillars of business only reached midway point.

Operating Income¥508.4 billion
Fiscal 2023
[actual]¥58.0 billion

Fiscal 2024
[at time plan drawn up]

EPS Growth CAGR

Fiscal 2024
[at time plan drawn up]

43.4%
Fiscal 2023
[actual]¥62.3 billion
Fiscal 2023
[actual]Strategic Domains Ratio

60%

Fiscal 2024
[at time plan drawn up]

Fiscal 2023 TIS INTEC Group Management Direction

Operating Margin56%

Fiscal 2023
[actual]

11.6%

Fiscal 2024
[at time plan drawn up]

12.3%
Fiscal 2023
[actual]Sales of Societal Issue Solution Service¥50.0 billion

Fiscal 2024
[at time plan drawn up]¥48.6 billion
Fiscal 2023
[actual]Looking back on fiscal 2023○

	Obtained high evaluations from external organizations, substantiated by inclusion in MSCI JapanESG Select Leaders Index and FTSE4Good Index Series, for sustainability management andstakeholder engagement
	Strengthened environment-oriented initiatives, highlighted by carbon neutral declaration	Enhanced sustainability management with initiatives that contribute to higher corporate value
and value provided to society from a long-term perspective

Accelerate improvement of added value throughenhanced DX organizational capacity and investment○

	Gross profit margin continued to climb, reaching 27.9%, complemented by successful efforts tocurb unprofitable projects through activities, including continuous enhancement and innovation.
	Shift to strategic domains moving along as planned. (Strategic domain ratio hit 56%, exceeding
estimate of 54%)	Enhanced consulting capacity and strengthened data analysis and design function

Promote business restructuring and measures to improve
medium- to long-term asset and capital efficiency△

	Leverage co-creation activities with clients and business partners to revitalize operations andachieve growth in social issue solution services
	Investment to reinforce in-house capabilities, including R&D, rolling out as planned

Leverage growth strategy designed to become top-class
IT group in ASEAN region, and strengthen governance position○	Marked topline growth, driven primarily by MFEC, en route to becoming top-class IT group in
ASEAN region
	Leveraged co-creation activities with activities through capital and business alliance with Vector
Consulting Group, a major management consulting firm in India.

Rachet up investment into human resources
to sharpen skills and promote diversity○

	Revamped human resources system, seeking to improve added value (implemented in April 2023)
	Reinforced prior investment into human resources (improved compensation)	Enhanced and encouraged participation in Human Resources Business Partner (HRBP) program

Leverage long-term growth strategy for corporate value andvalue provided to society through sustainability management40

Corporate Information/Data

Key reflections

E xpansion in value-added creation style services, along withassignment solution style services geared to client requests,
fueled growth. Shift to market-cultivating style services requires
faster responses. Profitability steadily improving, and efforts tocontrol unprofitable projects showing results. But low-level
control still required.
Transition to operating holding company structure and steady
implementation of measures, including business realignment,
office consolidation and improved capital efficiency, to achieve
overall optimization of the Group. Made progress in cultivating
corporate culture with sense of solidarity through design ofsingle logo and creation of Group vision.
To achieve sustainable growth and improved corporate value,prioritized structural transformation and establishment ofresilient management platform through additional reforms within
the Group in anticipation of major changes in society.

Elevate head office functions and promote greater efficiency
	“G20” project to elevate head office functions
Integrate groupwide core systems
Cut head office costs by 10%

Diversification of human resources, sharper skills

Platform for Value Creation

Major priorities in groupmanagement

Deepen andextend global
operations

Resource layer
Shift to human resources composition conducive
to structural transformation

Accelerate structural transformation
by improving value provided in DX services

Exceeding 10%

Integrate/centralize shared functions with the GroupMake office procedures more efficient, enhance capital and asset
efficiency, raise Group profile, and cultivate corporate culture withsense of solidarity
Realize higher level of administrative management
Promote management with profit emphasis, work to enhanceaccounting, taxation, finance reporting, and implement Group
personnel strategies

Expandinvestment togenerate
strengths

Improve value
provided by DX

Growth Strategy for Value Creation

Strive for total return ratio of 35%

Business layer
Turn SI capabilities into strength that underpins
transformation into global DX partner

ActualNet sales

Policy on return toshareholders

Virtuous cycle of value created jointly
by society and employees

TIS INTEC Group Value Creation

Landmark changes to business landscape• With heightened importance of DX in new normal world, presence ofconsulting firms and other providers of DX services is increasing, fuelingintense competition.
• Global platformers and enterprise SaaS companies are particularly active, as
well, prompting possibility that market for contract development will shrink inlong term.
• ESG investment rapidly expanding, and importance of sustainability
management based on long-term strategies is gaining ground

Sustainable profit growth
Emphasis on employee self-fulfillment
Concentrate on core businesses
Shift to prior investment style of business development
Expand global business

Fiscal 2018

Top Message

Fiscal 2016–Fiscal 2018

Key Strategy of Medium-Term Management Plan/DX Business Strategies

Overall DX Business Strategy

Social DX

Financial inclusion

Health concerns

Low-carbon/
decarbonized society

Urban concentration/
rural decline

Improve value provided in DX services

Growth in DX consulting
business will drive change

TIS
INTEC
Group

Data
Analytics

UX

Business

Enhance system development work

Internal DX

Sharpen DX consulting function

Enhance system operation work

Revamp marketing processthat transforms
businesses

Diversification of human resources, sharper skills
Imagination

Approaches to reach target status

IT Delivery
BPO

Capabilities to enhance

Enhance IT delivery

Building ability

Four strategic domains

Solutions to social issues

Financial inclusion

FCB

Offering ability

Health concerns

Expand service-style business

Develop skills of employees who use digital technology

Imagination

Promote data-driven decision-making in all aspects of work

(DX consulting)Remove from in-house office workthat transforms
society

Globalbusiness
deployment
capability

Shift to human resources composition
conducive to structural transformation

Ability to realize value creation
Promote co-creation with stakeholders

Power

Consultant

IT infrastructurereformAgile

Imagination

ServicerBusiness DX
Technology

Turn SI capabilities into strengththat underpins transformation into global DX partner
Shape ecosystem and realize solutions to social issues

TIS
INTEC
Group

Create more active organization through better communication

Social DX

Fiscal 2027

Workforceof 1,000

600
Fiscal 2021

250

500

Expansion of DX talent forenhanced DX consulting
throughout the entire Group

Full-scope
response
until DX isachieved

Data-driven
approach

Achieve data management that facilitates growth by making decisions driven by data analysis andutilization
Starting from data, we create a framework to visualize issues, accumulate further data, and make
improvements based on dataEmployment of a dedicated team of data scientists with extensive experience at Miotsukushi Analytics
UI/UX design is also used to create a framework for collecting data, with design experience based on
design thinking and behavioral economics

Proposals that don’t take account of the actual data
and the actual operations
Data analysis and UI/UX design are done by separate
teams; integrated consulting has not been developed

Consultant’s
perspective
andinvolvement

Business initiatives that contribute to society and business continuity from a longer-term
perspectiveAddressing social issues directly related to a company’s raison d’être, such as the SDGs or ESG investment
Because TIS is itself a company that works to solve social issues, this allows the Company to take aproactive approach in the form of joint investment or the establishment of joint ventures, on theunderstanding of the significance of long-term initiatives
We can make the team for “circular continuity” to address issues that cannot be resolved by a company
acting alone, and work for outcomes that reflect our vision of the ideal society

Focus is on paid support to companies
Involvement is exclusively as an external advisor

Promotion Structure

Topic

In December 2022, we held a briefing on the theme of “Consulting Business - DX Business Strategy” to provide a detailed
explanation of our focus areas, strategies, and the like. Please follow the link below to see presentation materials from that day.
https://www.tis.com/documents/en/ir/finance/meeting/221205_1.pdf

41

42

Corporate Information/Data

Typical consulting firms
Offer strategy formulation and conceptualization,leaving execution to clients and vendors
Propose “ideal states” based on overseas case studies
and best practice that cannot be achieved by Japanesecompanies
“Not a good fit for our company.”

Platform for Value Creation

Unique features of TIS’ DX consulting
As a system integrator, we accompany the client through to realization so projects don’t end up as
castles in the air
Full support for system implementation and continuous improvement from consulting to implementation
Organizational capability to carry out transformations that are not idealized, but realistic, backed up by a
track record of building and operating mission-critical systems
Working as a partner to enable organizational transformation as well as DX talent development

Internal DX

The person responsible for promoting the Group’s DX business strategy is the TIS Executive Vice President and Representative
Director. To increase value exchange with stakeholders, the Digital Transformation Promotion SBU is taking a central role in designing
the future of the Group through wide-ranging approaches across divisional lines under a dedicated project structure that includes
enhanced marketing and sales, better system development and operation, and fine-tuned deployment of human resources.

Low-carbon/decarbonized society

Fiscal 2024

Business DX

Using data collected within the Group as well as technology, such AI and robotics, we will make office work more efficient. This will
create a new environment in which employees are more motivated and can concentrate on promoting social DX and business DX.

Urban concentration/rural decline

Forecast growth in DX consulting
Fiscal 2023
420

TIS will lead efforts within the TIS INTEC Group to harness the power of IT and create various new services on its own to addresssocial issues, particularly the four areas—financial inclusion, health concerns, low-carbon/decarbonized society, and urban
concentration/rural decline—where the Group can have a pivotal impact, and thereby support realization of a more
comfortable society.

The goal is to utilize digital technology to support clients in their efforts to address social issues and respective management issues.
We will complement top-level capabilities in the domestic payment services domain with Group strengths in data analytics, AI androbotics, healthcare, and energy management, combining these capabilities as a partner to help clients grow their businesses andimprove corporate value. We will provide a full range of responses, from pinpointing issues and suggesting the right services toimplementation and operation of the associated systems.

SPB

Implementation
skillsTechnology

BFS

Growth Strategy for Value Creation

For details on TIS’ DX strategy, please go to the corporate website (Japanese only).
https://www.tis.co.jp/group/policy/dx

IOS

TIS INTEC Group Value Creation

Business process
reformVirtuous cycle of value created jointly by society and employees

Beyond concepts andsystem-building,achieve solutions tofour social issues

Systemintegrator

Create new value by going beyond limitations of time and place, connecting people,
things and information, and reimagining business, processes and IT infrastructure
BusinessreformRealizationof value creation

Top Message

Use digital technology to successfully address social issues

Target status

Ability to build systems

The TIS INTEC Group takes on DX across three areas: social DX, to achieve a better society; business DX, to reimagine clients’businesses; and internal DX, to elevate the capabilities of the Group itself.
These areas are not thought of in isolation but rather as a single series in which each category has a reciprocal effect on theothers, underpinning initiatives from a comprehensive perspective, and then, drawing on digital technology, driving a virtuous cycleof new value for society, clients’ businesses and activities within the Group itself. This is the image of DX that we, the TIS INTECGroup, seek to achieve.

Direction of DX Business Strategy
The Group’s strength resides in its abilities as a system integrator, which it has developed over many years. We believe we can evolveand grow significantly beyond our current core operations as a system integrator by anticipating where clients have not yet foundsolutions and having the conceptual capability to solve problems and formulate solutions. The engine of this conceptual capability is
our consulting function. By resolutely nurturing this capability, we aim to establish the ability not only to transform our clients’businesses but also to solve social issues, effecting social transformation.

Introduction

To give form to the Group’s mission “To fill the future with vibrant colors as a mover using digital technology,” TIS set a
goal to take a digital approach to enhance value exchange with stakeholders.

Key Strategy of Medium-Term Management Plan/Service-style Business Strategies

Health concerns

Urban concentration, rural decline

ActualFiscal2021

Low-carbon/decarbonized society

Estimate

44.5

48.6

Fiscal2022

Fiscal2023

50.0

Fiscal2024

Fiscal2027

Societal Issue
Solution Service*

Build data-linking platform for smart city in Hakui, Ishikawa Prefecture, to support
efficient administration
Roll out WOOD DREAM DECK, a program using web3 to build eco-system that balances
economic cycle and environmental protection through utilization of forest resources

Sponsorship of the Osaka Healthcare Pavilion at Expo 2025 Osaka, Kansai, JapanTIS is a sponsor of the Osaka Healthcare Pavilion Nest for Reborn (Osaka
Healthcare Pavilion) which will be exhibited by Osaka Prefecture, Osaka City,and the Osaka Pavilion Promotion Committee at Expo 2025.
The Osaka Healthcare Pavilion, titled “Reborn,” will showcase healthcare
as an important issue, with themes to include future healthcare experiences
and the future of medical care. As an Expo sponsor TIS will provide full IT
support.

Growth Strategy for Value Creation

Payment

CreditSaaS launched as planned
TIS, au PAY introduce system for digital salary payments
Start of Aizu Coin, digital regional currency service that addresses issues faced by small,
local stores in accepting cashless payment

TIS provides the Healthcare Platform as an open platform that utilizes IT tointegrate medical and health information that can support people in various
ways throughout their life, from daily health promotion to disease
prevention, treatment, and nursing care.
The Healthcare Platform allows members of the public to take theinitiative in using their health and medical information that is aggregated in
the Platform as and when they wish to. It facilitates correct and effective
treatment and care at medical institutions, but also appropriate healthpromotion measures that may be taken in the community, thereby promoting
healthy lifestyles.

TIS INTEC Group Value Creation

Key Activities in Oﬀering Services Business

A Healthcare Platform that employs digital technologies to handle medical and health information

Top Message

38.0

Selected examples
Health Concerns

Net Sales Growth in Societal Issue Solution Service (Billions of yen)
Financial inclusion

Introduction

We seek to improve profitability across all service-style businesses, including payment services, through careful allocationof management resources to help solve the four social issues that have been highlighted for a groupwide response andthrough more sophisticated management practices.

* Services that directly provide solutions addressing financial inclusion, health concerns, low-carbon/decarbonized society, and urban concentration and rural decline

Low-Carbon/Decarbonization

Social DX (Societal Issue Solution Services)
Social DX is central to being a mover using digital technology. TIS and, by extension, the whole TIS INTEC Group prioritizes the foursocial issues described in the image below and develops new businesses to address these issues. Ideas from within the Group, as wellas M&A activity, co-creation with other companies and other approaches, generate a steady stream of diverse new services.

Financial inclusion
Improve society through convenienceof payment services

Contribute to regional
revitalization

Low-carbon/
decarbonized society

Fill the futurewith vibrant colors
as a mover

Health concerns
Respond to health concerns in era
when more people are living to 100

Concentration in Cities and Decline of Rural Areas

Examples of PIX Moving’s products

Capital and business alliance with PIX Moving,a Chinese self-driving EV startup
In China, where Mobility as a Service (MaaS) and smart city solutions are
expanding, Group subsidiary TISI (Shanghai) Co., Ltd., and PIX Moving Inc.
will jointly build and provide MaaS-related IT services. We will build on ourstrong track record in China to expand related services to the Japanese and
ASEAN markets.

Skateboard-type EV chassis

Corporate Information/Data

Create sustainable society

Topic

Carbony’s first solution, the Carbony VPP (Virtual Power Plant) Platform, waslaunched in April 2022. In the future, we aim to develop services such asenergy-saving promotion services, Scope 3 emissions compliance services,
environmental value trading platforms, and EV solutions, which we areworking on as a proof-of-concept projects.

Platform for Value Creation

Urban concentration
and regional decline

Carbony: Using the power of digital to create a decarbonized society

TIS held an information meeting in December 2021 highlighting sustainability management and provided details on solutionstyle services to address social issues. Please follow the link below to see presentation materials from that day.
https://www.tis.com/documents/en/ir/finance/meeting/211201.pdf

43

44

Key Strategy of Medium-Term Management Plan/Payment Business Strategies

Through years of support for major credit card companies, TIS INTEC Group has established its position as one of Japan’s
leading system integrators in the payments field. Currently, the payment business market is undergoing major changes inthe environment as the shift to cashless transactions progresses. The Group sees this situation as a new growth opportunity
and will accelerate business development through its PAYCIERGE digital payment platform in addition to the development
and operation of enterprise systems for major credit card companies, which are an important business platform.

Status of Cashless Payments in JapanThe Japanese government is promoting cashless payments, which are expected to become more widespread in the future
The credit card is a typical tool for making cashless payments, and the credit card transaction volume is expected to increase in
the future alongside an increase in mechanisms for linking cards to code-based credit services, such as QR codes and barcodes,that have become popular in recent years.

100

Digital accounts

Payment method

Contacttype

PrepaidNon-contact
type

Instant debit

Code reading
type

After pay

40.0%
50
20.0%
11.9%
0

WidgetInterface

Top Message

PAYCIERGE

80.0%

36.0% in 2022
Source: Ministry of Economy, Trade and Industry

Overview of Payment Services and TIS’ Core Focus
Digital accounts facilitate access to processing services for all payment operations, from prepaid accounts for payment prior topurchase and instant withdrawal accounts for debit payments to post-payment credit accounts, and is an area where TIS candemonstrate particular competitive superiority.

Combination of cashless payment methods

Cashless payments and cashless payment ratio(¥trillions)2008
Electronic money

2016
Credit card

2025
Debit card

Introduction

Leveraging Our Strengths to Accelerate Business Development and Realize a Cashless Society

FutureCashless payment ratio

Source: TIS Compiled based on Cashless Vision (Ministry of Economy, Trade and Industry, April 2018)

Brand debit
processing services

API-type brand prepaid
processing services

Brand prepaid
processing services

FinTechventures

Public fees

Transportationcompanies

あDistributors

Finance

Mobile wallet

Overseas local
networks

RetailDigital wallet services

Banks

TravelMerchant processing
services

Non-banks

QR settlement gateway
for merchantsMarket Scale

Cashless market in growth mode Finance service platform
Examination and loan

*TIS defines the card processing market for non-financial companies seeking to enter the payments business as the “emerging platformer market.”Users(payers)Front
functions

Strategic Focus

Issuing/
Card financeLaunch CreditSaaS and promote businessdevelopment, and grow into pillar of business

Strategic
partner¥2,600 billion

Core competence
Payment services
Lending

Businesscoordination

28.5

Walletplatform

Issuing
processing¥10 billion¥250 billion

TIS emphasis0¥34.0 billion¥28.5 billion

More than
20%

Fiscal 2021
(actual)Fiscal 2022
(actual)Fiscal 2021
SI salesFiscal 2023
(actual)Fiscal 2024
(estimates)

Fiscal 2024

Recurring sales

Fiscal 2024
(at time plan
drawn up)

EBITDA margin¥40 billion¥10 billion

Payment service network

Market Share (Fiscal 2024)
Credit core market

EBITDA margin
exceeding 20%(CreditSaaS
contribution)

Stores/EC support
Platform¥330 billion

Core area
34.0

Acquiringprocessing

Credit SaaS
¥20.0 billion

Emerging platformer
market peggedat ¥90 billion

Front area
Prepaid coremarketPrepaid SaaS
¥2.5 billion
Debit SaaS
¥3.5 billion
Debit coremarketFront market
for issuers

Order revenue(Billions of yen)

Merchants/QR/
Wallet¥5.5 billion

Corporate Information/Data

20

36.0
SI sales 34.5 EBITDA
margin33.5

Retailsupportservices¥330 billion

Anticipated Composition of Business Growth

40 Recurring sales

Anticipatedmarket scale in 2025

Platform for Value Creation

2019
Administration/
RetailWith thetarget businessesFinancekeen to participate
inHealthcare
new payment
options. High-level¥82 cashlesstrillion market in growth
Majormode,
growthweforwillmarketUrban OS
specialization will be in demand, providing us with the perfect opportunity to demonstratecompetitive
superiority, especially inTargetmarketEstimateby TIScore area. We are aiming for net sales of ¥36 billion in fiscal 2024, supported primarily by this core area.
servicesto our(Billions of yen)

Payment
agencyAcquiring

Merchants(recipients)

Offering systems/
platforms to support the above functions

analysis
Payment Service Strategy under Medium-Term Management PlanData(2021–2023)

Payment-related
businessscale for service-style operations
Business
Structure

Front
functionsCore functions

Core functions

Multifinancing
services

Maas, etc.

Functions for merchants

Functions for users

CreditSaaS

2030¥198 trillion

2025¥121 trillion

The Company expects the processing market in Japan to experience continuous growth with the expansion of cashless payments
and to reach to ¥310 billion in fiscal 2026. While the business of the four major card processing companies will grow steadily, to¥220 billion, we expect the new market entrance of non-financial companies to expand significantly, to the value of ¥90 billion,
and we are focusing on expanding our business in this “emerging platformer market.”*Growth Strategy for Value Creation

Services for merchants

Forecast Market Growth in TIS Focus Areas (based on TIS research as of 2019)

150

Front market
for merchants

New domain creation/common ground ¥2.5 billion

100
60
40

TIS

20

Four
major players(Company A –Company D)

Fiscal 2015

Fiscal 2016

Fiscal 2017

Fiscal 2018

Four
major players

Fourmajor players(Company A –Company D)(Company A –Company D)¥160 billion¥220 billion

Fiscal 2019

Fiscal 2026
(Years ended/ending March 31)

45

TIS INTEC Group Value Creation

Payment settlement
networks

Credit card processing
services46

Key Strategy of Medium-Term Management Plan/Payment Business Strategies

New Initiatives Amid the Growth of Cashless Payments

Traditional
financeNew
economyDigital Wage Payment Gateway Service
The digital wage payment gateway service is one of the features of TIS’s digital payment platform brand PAYCIERGE, whichenables digital wage payments. It enables companies that want to pay wages with digital money to contract with a fundtransfer agent, enabling them to pay wages using a variety of digital money without having to individually connect multiple
fund transfer agents to the HR payroll system. Furthermore, the service has been designed to be compatible with existing
methods of transferring wages to bank accounts—after incorporating agreed-upon specifications with 19 HR payroll systemproviders—so companies can smoothly implement it without having to modify their internal HR payroll systems.
Going forward, the service will be expanded as a digital money payment gateway service that enables various digitalmoney payments, such as salary advances and expense reimbursements, in addition to regular wage payments.

Communication

Mobility
Device OS

Usage image

Retail andservices
Compliant with manysystems

Closely attached to clients’ lives

Number of clients

Priority Themes for Fiscal 2024
Start up embedded finance business, and attract users
Launch new PrepaidSaaS Program
Kickstart activities for B-to-B payments

47

Download fundtransfer data

Payroll gateway

Upload fundtransfer data

Digital money
operator

Request charging

ChargeDigital Local Currency Services to Solve Local Issues
As a member of the payment working group of the AiCT Consortium, the Company has been promoting the implementation of
cashless payments using digital local currency in Aizuwakamatsu City. Through increased cashless payments, this service creates amechanism to preserve purchasing data within the community and promotes initiatives to increase the productivity of the entire
community by utilizing the data in various business sectors and industries. In partnership with the public and private sectors, we will
work to revitalize other communities by making payments more convenient, helping to create an environment that facilitates
participation by local citizens and businesses.
Aizu Coin, a Digital Local Currency Service that Resolves Local Issues
This service was jointly developed by combining the Company’s Aizu Wallet and Mizuho Bank’s House Coin services to solve
the issues faced by merchants in the introduction of cashless payments and to enable retention of payment data within local
communities. The AiCT Consortium was commissioned by Aizuwakamatsu City in Fukushima Prefecture as a Mutual Aid
Data Linkage Smart City Project, but it was selected as a Type 3 grant project under the Digital Garden City Nation Vision­promulgated by the Cabinet Office. This payment method will be connected to the data linkage infrastructure provided by
the city.

Making life in Aizu moreconvenient and enjoyable

Corporate Information/Data

Isao Otokita
TIS Managing Executive Officer,
Deputy Division Director of
Digital Transformation
Business Unit

As the trend toward cashless transactions accelerates and the overall domestic payment market
expands, we are steadily broadening the scale of our business by expanding our PAYCIERGE service
lineup. Here, we focus on processing services in core areas where we can leverage our strengths mosteffectively. At the same time, we are actively pursuing future-oriented investments to address the
emergence new social infrastructures, such as digital currencies and Web3.
Due to rapid changes in society and technology, we expect societal needs for payments inthe future to become more diverse and segmented. As a leader in the payment market, we will
help realize an affluent future society by constantly evolving to quickly provide value that exceeds
expectations. This includes creating advanced services and developing payment services in other areas(such as healthcare and energy) that we are advancing and focusing on.

Register accounts

HR andaccounting staff

Aizu Wallet is a smartphone wallet app that allows
convenient access to services for everyday payments

Regional service

Payment

Platform for Value Creation

Beyond Payment
Supported selection of digital garden city projects in Sapporo, and accelerate activities
 Began providing Aizu Coin, digital regional currency service that addresses issues faced by small, local stores in accepting
cashless payments
au Payment Corporation decides to introduce gateway service to facilitate digital salary payments

HR payroll system

Can use different typesof digital money forcharging!

Growth Strategy for Value Creation

Fiscal 2023 Topics
Core areas (CreditSaaS, DebitSaaS, PrepaidSaaS)
CreditSaaS
Stable operation since service launch as scheduled in fiscal 2023
		Continue to push marketing activities to attract second user and more.
DebitSaaS
Brisk expansion in transactions for all participating banks.
PrepaidSaaS	Working with major credit card companies to promote new programs utilizing prepaid solutions,
expanding use, and accelerating preparations for embedded finance business
Front area
Provided F Village Pay for Nippon Ham Fighters, with launch in March 2023
Rolled out room key delivery service for hotels through collaboration with Miwa Lock Co., Ltd.

Employeefor salary and bonus

TIS INTEC Group Value Creation

Number ofaccounts

Digital Wage Payments
In April 2023, the Ordinance for Enforcement of the Labor Standards Act was amended to allow wage payments with digitalmoney and by means other than bank deposits. Employees can receive their wages through smartphone payments and othermeans they normally use, making digital money more convenient and contributing to the momentum toward a cashless society.

Top Message

In control of money

Business operators aiming
to become platformers
by controlling payments

Introduction

Target Clients to Extend Core Functionality for New Issuers
Clients in the emerging platformer market span all industries. Operators who are in control of money and those who are closely
attached to clients’ lives aim to influence both monetary transactions and lives through digital transformation. We will target
these operators to expand the provision of the Group’s core functions.

Electronic receipt

48

Key Strategy of Medium-Term Management Plan/Global Business Strategies

The TIS INTEC Group aims to form an alliance of leading IT companies in the ASEAN region, pursuing diverse strategies:“Channel,” for local market expansion, “X-Tech,” for new business and service creation, “Emerging Tech” for nextgeneration technology development, and “Consulting” for value chain expansion.
ChannelActivities to enhance profitability

X-TechCardInfoLink/EVONET

GlobalService Provider (Listed, Singapore)

Anabatic
System Integrator (Listed, Indonesia)

Cross-Border Payment Network (China)

PromptNow

Business scale: ¥95 billion*1

FinTech (Thailand)

Network: 10 countries,
103 companies*2

FinTech (Indonesia)

MFEC
System Integrator (Listed, Thailand)

I AM Consulting

AINO
J Ventures
DX (Thailand)

Transfer of business for MFEC’s further corporate growth
To respond quickly to the rapidly changing businessenvironment, including dramatic technological evolution, andone-time clients becoming competitors, the high-code app
development team was transferred to Bluebik Group PublicCompany Limited, a fast-growing management consulting firmin Thailand. By strategically reinvesting the proceeds from thetransfer in high-value-added services, the company aims totransform itself into a high-margin structure.

2.

Establishment of MFEC’s CVC, and accelerating
investment in promising companies
Synergy Group Ventures was established as a corporate
venture capital company of MFEC. Using the proceeds
obtained from the business transfer, we will accelerate
investment in local Thai start-ups that will promoteorganic growth and thereby contribute to MFEC’ssustainable growth.

TIS INTEC Group Value Creation

Contour

Consulting

SAP Consulting (Thailand)

1.

Top Message

Grab HDAt MFEC, the core of our global business, although sales are rising, profitability is declining due to economic uncertainty
precipitated by geopolitical factors, orders accepted at strategic prices due to fiercer competition, and cost increases due tosoaring labor and outsourcing costs. By promoting various profitability improvement initiatives, we will raise the profit margin of
the business and achieve high profitability in the global business as a whole.

Trade Finance (Singapore)

TinhVan

Vector Consulting Group

System Integrator (Vietnam)

Vista Equity Partners

Management consulting (India)

Enterprise software (USA)

New
New
New

Emerging Tech

QuEra Computing

R3

SQREEM

Miaomi

Quantum Tech (USA)

Quantum Tech (USA)Blockchain (USA)

Human Behavior AI (Singapore)

Wireless Sensing AIoT (China)

SpeQtral

Entropica

Hyperchain

XChain Network

PIX Moving

Quantum Tech (Singapore) Quantum Tech (Singapore) Blockchain (China) Blockchain Consortium (Thailand)

Promotion of collaboration with TIS

Autonomous EV (China)*1. Total sales of subsidiaries and equity method affiliates (fiscal 2022, ended December 31, 2022) are converted at period-end rate.
*2. As of April 2023

Topic: Capital and Business Alliance with Vector Consulting GroupIn January 2023, as the first step in boosting consulting activities to expand the value chain, TIS entered a capital and businessalliance with Vector Management Consulting Pvt. Ltd, one of the top management consulting groups in India, and turned Vector
into an equity affiliate of TIS.

Vector’s merits

Established in 2006, it is one of India’s leading management consulting companies
Home to over 200 consultants (management plus IT)
	Consulting services applicable to each part of the value chain, from R&D to manufacturing,logistics, and sales

TIS held an information meeting in December 2020 highlighting global operations and provided details on areas of focus
and strategies. Please follow the link below to see presentation materials from that day.

Kensaku Furusho
TIS Executive Officer,
Division Manager of
Global Division

In our global business, we have designated the ASEAN region as our focal target market since 2014. Specifically, we have promoted
capital and business alliances and M&As with local partners to strengthen relationships and create synergies. As a result, sales inSoutheast Asia reached around ¥95 billion in fiscal 2022, up about ¥17 billion year on year.
In addition to the ASEAN region, we also entered the fast-growing Indian market with the formation of a capital and businessalliance with that nation’s largest local management consulting firm, a new domain for our global business. Keeping abreast of therecent convergence of IT and consulting, we will continue expanding our global value chain.
On the technology side, meanwhile, we are actively working on projects involving disruptive technologies that could change our
future. For example, we formed a capital alliance with a U.S. quantum computer company and another with a Chinese developer ofautonomous driving technology.
To quickly achieve our consolidated net sales target of ¥100 billion in fiscal 2026, we will continue focusing on specific markets
while acquiring consulting capabilities and advanced technologies from a global perspective to expand our global business and help
resolve social issues.

Corporate Information/Data

Through this alliance, TIS’ IT expertise will facilitate Vector’s business expansion in Southeast Asia as well as other global markets,
and will enhance Vector’s service offering. Following the worldwide trend in the integration of consulting and technology, we will
also leverage Vector’s management consulting expertise to provide high-value-added IT services to our existing clients in India,
Japan, ASEAN, and China.

Solving social issues through building ESG platforms
In Thailand, where air pollution is becoming increasingly
problematic, we invested in a new business to launch Digital
Sustainability, a decarbonization solution to address thegrowing need for decarbonization. This ESG initiative aims
to contribute to solving a pressing social issue in Thailand.

Platform for Value Creation

Purpose of the alliance

Strengthening of consulting function in global business
Expansion of channels in India, our third-largest market after China and ASEAN	
Enhancing the added value of IT services not only for India but also for clients in Japanand ASEAN

3.

Opportunities for collaboration are being determined andcultivated, including: joint promotion of large-scale projects forJapanese companies in Thailand; expansion of sales of MFEC
solutions such as IoT and security solutions to Japanesecompanies in Thailand; furthering relationships with TIS’s capitaland business partners in Thailand, particularly tech companies;
and talent exchange.

Growth Strategy for Value Creation

Atom Computing

Topic

https://www.tis.com/documents/en/ir/finance/meeting/201204.pdf

49

Introduction

Topics: Initiatives to Improve the Profitability of MFEC

Leverage Business Domain Expansion and Strategic Investments
to Become Top-Tier IT Group in ASEAN Region

50Key Strategy of Medium-Term Management Plan/
Strategy to Enhance Management Capabilities

Human Resources Strategy
The TIS INTEC Group is proactively promoting forward-looking investment in human resources, its most importantmanagement capital. To further improve the value we provide, we will strengthen incentives for employees to enhancetheir ability to contribute to the business through self-directed learning.

Ideal Human Resources Strategy

Internal DX
To give social DX and business DX activities added momentum, we are working to establish an environment that combines
knowledge and human resources across domains within the TIS INTEC Group and fuels greater creativity in operations.

Activities in Fiscal 2023

External environment

Internal environment

Increasingly competitive hiring
market and greater fluidity

Improvement in added value
necessary for sustained growth

DX Promotion Themes

Sharpen/enhance skills of human resources
HRBP worked together with on-site executives and leveraged measuresfine-tuned to business needs, creating human resources portfolio linked tobusiness strategies

Enhance systemdevelopment work

Enhance system
operation work

Revamp marketing
process

Expand service-stylebusiness

Compensation
Investment in education

Develop skills of employees who use digitial technology

Raise
added value

Diversity & Inclusion

Personnel
growthImplement organizational improvements and create better workplaceenvironments matched to on-site conditions to enable diverse workforce toreach targets and demonstrate individual strengths

Create more active organization
through better communication

Reduce in-house office work

Operating income on per-person basis

Strengthen Group synergies
Promote laterally through Group(Continuous improvement)

Fiscal
2020

Fiscal2021

Fiscal2022

Fiscal2023

Priority Themes for Fiscal 2024
64%

Fiscal
2019

Fiscal
2020

Fiscal2021

Fiscal2022

Fiscal2023

Promote measures to sharpen skills of human resources whowill drive structural transformation(DX consultants, IT architects and other specialists)
Reinforce engagement to fuel improvement in human resource value

Improve Value Exchange between Employees and The Company

Promoting Higher Level of ESG
Activities in Fiscal 2023

Environment

SocialSustainable improvement in stakeholder engagement

Carbon neutral declaration (December 1, 2022)
Expanded scope of measures to control greenhouse gas emissions(began extending measures to overseas Group companies)
Began considering biodiversity response

New human resources system introduced at TIS, effective April 2023,
that completely redefines compensation, evaluation and rating systems,
including a maximum 17% increase in basic salary
Formulated and announced multi-stakeholder policy to clarify emphasis
on joint efforts and co-creation with diverse shareholder groups

OUR PHILOSOPHY
g E
 nvironment where people can take on challenges withpeace of mind

GovernanceConstantly pursue level of corporate governance that elicits greater trust from society
Established offices dedicated, respectively, to improving ability to achieve constructive dialogue withstakeholders and to enhance corporate governance
Strengthened involvement of Board of Directors in Corporate Sustainability Committee
Took steps to reduce strategic shareholdings

Strengthen efforts to create intangible value from long-term perspective
Continuously enhance ESG measures

wishesTo be a company where diverse human resources sharethe company’s values and philosophy, and can enjoy
job satisfaction and professional development

Improvedvalue
exchange

Employees

g P roviding value as a professionalg A utonomous collaboration to produce resultsg A utonomous growth and career development

Create a corporate culture in which all employees
become movers and continue to change and take ona variety of challenges	Personnel Systems That Encourage All Employees to Act Independently
TIS has revised its personnel evaluation system to enable employees to better
identify with the Company and its business direction, while enjoying job
satisfaction and professional growth. This system was implemented in April 2023.
When setting goals, we maximize the Must/Will/Can framework, in which
employees take ownership of the organization’s goals and are motivated to act
autonomously to better contribute to the business.
As a shared group initiative, we are introducing OP Competency Assessment,
which proactively evaluates actions that embody the values of OUR PHILOSOPHY.
We will promote dissemination of TIS INTEC Group Philosophy and aim to embed
it into our corporate culture.

Must
Roles and duties
expected by theCompanyWill
Must

Career paths of
employees

Will

Can

Can
Strengths and issues of
employees

52

Corporate Information/Data

Priority Theme in Fiscal 2024

Companyg A ppropriate and attractive compensation for performanceg C reating performance opportunities based on employees’

To brightly color the future as a mover
Platform for Value Creation

Contribute to decarbonized society and recycling society

Sustainable engagement, one of the core themes of the medium-term management plan, promotes 1) personnel evaluation andcompensation commensurate with the true value of human resources; 2) the provision of opportunities for diverse human resources
to become more engaged with the Company; and 3) the health of employees and the development of working environments that
motivate employees to deploy their professionals strengths to better contribute to the Company. We will increase the value we
provide to society by enhancing the value exchange between employees and the Company.

Growth Strategy for Value Creation

Fiscal2019

Group companies

Motivation score (TIS-only)(Continuous improvement)¥2.9 million

Implement measures across Group

Personnel DX
Built platform for collecting and analyzing information about human resources
throughout Group, visualizing HR data and supporting decision-making inbusiness activities to more efficiently manage human capital

Virtuous cycle ofvalue exchange
between employees
and company

Data-driven decision-making in all aspects of office work

TIS Digital Transformation
Promotion SBU(Specialized unit)

51

Investment toboost motivation(including office investment)

Career advancement for personnel who exemplify TIS INTEC Group Philosophy,
and leverage review of personnel system and pay increases that forge a closer
link between results and compensation

TIS INTEC Group Value Creation

Director responsible
for promoting
digital technology

Investin human
resources

Top Message

Sustainable engagement

Reinforce frontline
Representative director,
executive vice president

Introduction

We aim to elevate head office functions and promote greater efficiency by centralizing back-office operations, raising
the performance of head office operations and promoting the shift toward DX in office work throughout the Group.
In addition, we seek to contribute to a sustainable society and realize higher corporate value, and toward this end,
we will enhance sustainability management with a more in-depth approach to ESG issues.

Special Roundtable: Status of Service-Style Operations

Under Medium-Term Management Plan (2021–2023), the TIS INTEC Group is working as a cohesive unit to accelerate structural transformation through enhanced value in DX services provided. In this roundtable discussion,
participants answer the question, “Why is structural transformation so important?” and address issues and key
initiatives for leveraging structural transformation on the frontline, such as developing service-style operations
into a driver of growth, from a leadership perspective.

Fujii: Diversification is not only an in-house theme but also adetermining factor in our choice of business partner. In thepast, our business partners were companies with particular IT
expertise, but as our own businesses evolve, we now tend tolook to partner with, for example, companies that have aframework for analyzing data as well as companies that havethe actual data.

54

Corporate Information/Data

Fujii: The difference between contract development andservice-style operations is that in contract development, we
decide how to build a system based on requirements specified
by a client-side system division. In service-style operations, on
the other hand, we typically meet directly with people in thebusiness division that will actually use the system, and weoffer advice right from the initial stage of planning on, forexample, how best to gain a foothold in the payment
settlement business. Another difference is that with contractdevelopment, we are involved right from the systemdevelopment stage, whereas service-style operations often
draw on strategic consulting capabilities within the Group andthe skills of teams specializing in UI/UX design or otherexpertise to address upstream requirements. When one service
doesn’t fully satisfy client needs, we utilize conventional SI
strengths and experience to combine several services toachieve the desired result. Having the ability to create services
as well as the ability to combine services gives the TIS INTEC

Taniguchi: The structure has changed so much. Absolutely.
The roles in contract-based operations were marketing anddevelopment, but DX consultants are now in a middle area.
When clients embark on new business activities in the energy
sector, they often don’t have all the answers, either, because
other countries were quick to promote changes, including
liberalization of the electric power market, and there are noprecedents in Japan to guide them. Consequently, clients ask
us to develop new businesses with them, and that necessitates
insights into both the requisite systems and the businessdomains that clients intend to enter.

Platform for Value Creation

53

Fujii: Early on, I was involved in contract development forindustry-sector clients and worked on large-scale systemdevelopment for clients in the credit card sector, and then forabout five years, I was part of the Corporate Planning
Department. Currently, I am responsible for PAYCIERGE, thecomprehensive digital payment solution from TIS. PAYCIERGE
provides processing options for various payment formats,including prepaid, debit and credit, and facilitates associateddata analysis in a one-stop payment settlement package.
First off, we apply two concepts to service-style operations
because clients’ requirements differ depending on whether the

Fujii: Service-style operations require a proactive approach topredict client concerns in a changing world and develop
services to ameliorate those concerns. Success hinges on aclient-specific understanding of the overall business structure,including the customers of that client. “DX” is a current
buzzword, and yet many clients have only a vague idea about
what they should do to maximize the potential of DX.
Ultimately, from our perspective anyway, DX must generate
new client-side value that translates into higher corporate
value. But the method that connects a solution to actual
business activities depends on insight into both the target
system and the respective business. Toward this end, mydivision recruits many people who have never been involved insystem development, including people with service andplanning experience at banks and credit card companies.

Growth Strategy for Value Creation

Oka: The TIS INTEC Group seeks to achieve the corporate
vision—“Create Exciting Future”—by 2026, guided by Group
Vision 2026, which targets market creation and business
innovation through advanced technologies and know-how. I
was involved in formulating this vision, and one of the issues I
saw at that time was the emphasis on proposal-styleoperations. The Group had earned top marks from clients forcustomized solutions through contract-based systemdevelopment, but thinking about clients and the future needsof society, the new vision was formulated with the underlying
intention of modifying the business style so that the Group
could anticipate market needs and better provide solutions tomeet those needs.
Structural transformation to realize Create Exciting Future—highlighted under Medium-Term Management Plan (2021–2023) as well—includes system development through our own
upfront investments and steps to turn services provided toclients into full-fledged businesses. Today, I am joined by two
people with experience in contract system development who
are now involved in service-style operations. I’m anxious to get
an update on activities as well as any issues still outstanding.

Taniguchi: I’m in charge of Carbony, a solution brand that willcontribute to realization of a decarbonized society. Previously,
for about 10 years, I was involved in contract development ofsystems for electric power companies, and I had a hand inlaunching EneLink, a service-style business developed by TIS toaid new electric power providers in the run-up to fullderegulation of Japan’s retail power market in April 2016.
Today, I oversee Carbony VPP (Virtual Power Plant), the firstrelease in the Carbony series, which launched in March 2022.
We have been and still are involved in many contractdevelopment projects, that is, made-to-order systemdevelopment, for energy sector participants. But parallelingchanges in society, such as electricity market deregulation andsteps toward decarbonization, completely new needs haveemerged, notably, gas companies’ keen interest in sellingelectricity and the need to balance the sale of oil withpreservation of carbon-neutral status. To address newparticipant-side interests, for which clients don't necessarily
possess adequate experience or know-how, we also offer
advice and service-style support.

Oka: As I understand it then, from what you two say,consulting capabilities are essential to proposal-style projects,
a category that includes service-style operations. The current
medium-term management plan calls for an increase in DX
consultants. But this goes beyond recruitment specifically to
execute consulting services; rather, people will routinely betransferred in-house from other operations to consulting
positions, and the Corporate Planning Department is taking
the lead in this approach although other divisions are getting
on-board as well. The goal is to enable people to acquire
practical consulting experience and then return to their homedivisions with new skills, which ultimately expands proposalstyle operations. We want to increase the number ofconsultants on staff, while also building a deeper pool oftalent beyond system development capabilities, and thereby
create a more diverse human resources portfolio.

TIS INTEC Group Value Creation

Service Style Operations and the Need for Structural
Transformation

Group a value-added quality, and I am fully committed to myrole as overall coordinator.

Top Message

All participants from TIS, Inc. (from left):
Takashi Fujii, Executive Officer, General Manager, Payment Services Unit, DX Business Unit
Kenichiro Taniguchi, Expert, Energy & Infrastructure Division/Energy Business Division 2, Industrial & Public Solutions SBU
Reiko Oka, Executive Officer, Department Manager of Corporate Planning Dept. and Deputy Division Manager of Corporate
Planning SBU

system is to be applied to a competitive aspect or a noncompetitive aspect of business. For example, the structure forpaying with a credit card is itself a non-competitive aspect ofbusiness, so even if our system is fundamentally the same as
another company’s system, we have to somehow distinguishours, make it better and get it into operation faster. Therefore,
wherever possible, we utilize a template to expedite theservice start. But card member sites and point systems fall into
competitive territory for clients, and this is where clients would
like to differentiate themselves from other companies. The
process takes a little longer, but that’s because we areincorporating specific expertise into the solutions. Systemdevelopment under contract means building from scratch, andthis requires both time and money, so even in the competitive
realm, we may opt for templates in certain situations toprovide a semi-customized response. In our service-styleoperations, we can do both—customized development andtemplate-based development—whichever best meets clientneeds.

Introduction

What are the service-style operations that will fuel structural transformation?

55

Taniguchi: You know, my division holds study sessions withmembers of the DX Business Unit. Such coordinated efforts toacquire knowledge as part of career development is everyone's
responsibility, and that’s what I’m trying to achieve. In
addition, the TIS INTEC Group serves a client base comprising
many industry sectors. This client diversity is a strength.
Therefore, in the future, we have to strive for that crossindustry format, where each division tasked with service-styleoperations utilizes know-how across industry lines to expand
its presence.

Oka: From around 2020, the topic was generative AI.
Perhaps the time is coming when system development will becompletely automated. Then again, perhaps we’ll see added
value rise on completely customized contract development.
No one knows for sure what the future has in store but
regardless, we need to gain a firm grasp of social issues andthen create the necessary tools to address these issues. Our
direction, that is, the structural transformation we seek toachieve and the active approach we will take to achieve it,is right. We will continue down this path but at an evergreater speed.

Predict Changes in Society, Continue to Transform
Fujii: In service-style operations, it’s not a one-time delivery
and done with. Services are ongoing. We have to predict thetiming of revisions to laws and regulations to implement theappropriate updates, and actively incorporate innovative
features into existing services to ensure suitably high levels of
security and convenience. Sustained investment is paramount.
We expect to turn a profit within a certain period of time as
we move forward in tandem with clients. But upfront
investment means these operations will show losses until therespective services are properly up and running. We willcontinue to invest and grow operations while tracking shortterm and future profit, but it’s a fact that management ofservice-style operations will be more of a challenge than we’ve
experience before.

Oka: Taking a bird’s-eye view once again, I would say thatdiversifying from a focus on contract development into service
style operations is a shift toward more forward-looking
solution-style operations. Production capabilities remain
necessary. But diversity in human resources creates anenvironment more receptive to different views and input fromexternal sources. An increase in trusted colleagues underpins amore predictable future.

Corporate Information/Data

Fujii: Right. For example, with PAYCIERGE, we prepare various
payment-related services and combine them to meet diverse
needs. We have to think proactively about the use case thateach combination of services will satisfy, and this demands alevel of creativity absent from conventional contractdevelopment. That said, combining services actually requires

Fujii: We have taken a robust approach to activities to foster
innovation that promotes new value through such awarenessand the sharing of know-how. The DX Business Unit holds
in-house information meetings to introduce its own servicestyle operations, present examples of combined services, andhighlight market needs. These meetings typically attract morethan 300 corporate insiders. We also take a groupwide
perspective to information-sharing, as our expertise might leadto solutions that clients of Group companies are keen to apply
to issues of concern. We emphasize forward-looking
approaches, where sharing creates new awareness and new
business opportunities.

Platform for Value Creation

Oka: It would be wrong to think contract system development
will no longer be necessary just because the emphasis is now
on service-style operations. But the two can’t really beconsidered separately. As is the case with building homes orcars, systems, too, are a collection of specific parts. They are
unavoidably complicated. Semi-customized services, which
may include suggestions from us for somewhat standardized
services along with a tailored approach to meet client
requirements, are services that we can provide precisely
because we are system integrators. Having employees who
contribute personal value to the process is a vital benefit inleveraging these kind of operations.

Oka: Earlier in our conversation, Mr. Fujii said that service-styleoperations help client companies grow, and as they grow, sodoes our income. But businesses built on service-styleoperations got started with upfront investment, so a different
approach to management is required. With high depreciation
and amortization, owing to the upfront investment, thestatement of profit and loss will initially show red. To see thereal source of income, we have to look at the balance sheet
and intellectual property and manage operations accordingly.
For service-style operations in particular, but also for contractdevelopment, know-how, organizational strength and otherintangible assets carry value that can be turned into
intellectual property, which generates income opportunities. In
the next medium-term management plan, intellectual property
will have to be viewed in a more strategic light as a source ofvalue.

Taniguchi: Our strength is the creative wherewithal to look
into the future and conjure solutions. With composite
capabilities built on these two strengths, we must boost ourown profitability and at the same time support not only ourclients but the entire domestic energy sector. By support, I
mean creating a market. If the government improves the legal
system governing the energy sector to promote social
development but client companies in the sector lack astructure in sync with new regulations, society will not evolve.
We can’t control every aspect of the external environment, but
we can watch for changes and be responsive as a player—aparticipant—to opportunities, such as invitations for publiccomment from committees involved in designing legal
systems. We must be ready to create an active market.

Growth Strategy for Value Creation

Taniguchi: Why did TIS come up with the structuraltransformation strategy? Why emphasize service-styleoperations? Undoubtedly, to encourage clients to reallyappreciate the value we offer. I totally get that now. In my
business area, we are promoting value through the idea that
TIS itself is a player facilitating progress toward a decarbonizedsociety. This proactive involvement is vastly different toactivities based on client requests. In addition, TIS prefers not
to own fixed assets, so its business structure is easy to reshape.
I think our structural transformation will be achieved througha transformation of human resources, so getting employees toembrace a more forward-looking mindset is vital.

Setting the Stage for Service Management

Oka: Credit card processing services, under the payment
services business umbrella, tend to draw attention due to thescale of investment, but these services are really just one
component of the PAYCIERGE brand. At the same time, indeveloping credit card processing services on our own, we
have gained insight that underpins development of various
service-style operations, including energy and healthcare
services. That is a big part of future success, right?

are diverse, but the underlying theme is financial inclusion,that is, delivering financial services to all people. To ensuresociety has access to necessary services, we have to team up
with various players outside the TIS INTEC Group and take thatextra step together. Embracing a shift in consciousness
regarding cooperation is an integral part of structural reform.

TIS INTEC Group Value Creation

Fujii: In contract development, once the system is ready, thework is over. But that point is, for a client’s business, just the
beginning. Meanwhile, in service-style operations, the day thatthe service goes live is also the day our business starts. We
switched to a business model where our charges parallel
payment handling volume and an increase in subscribers or
members, so basically, as the client’s business grows, so does
ours. As a result, employees feel that they are contributing tosociety by supporting the business activities of clients, and thatprovides them with motivation.

Taniguchi: It is essential in the energy sector, as in any sector
supporting social infrastructure, that systems be robust, andthe ability to produce the necessary systems will always be theGroup’s core competence. Looking ahead, we will have toconsider how best to accelerate the service-SI virtuous cycle.
Rather than deliver services alone, we have to use services as
the entry point to new businesses that lead back to SI. These
new businesses will, through the services they provide, returnto the SI client base. For us, this circular structure is key.

Taniguchi: It would be great if we could draw a line charting
upward on the contract development graph, but these
operations function as a complement to service-styleoperations, and the timing of investments tends to be rather
flexible—that is, following no rigid schedule—so portfolio
management is a challenge. It’s an issue requiring constantattention. Meanwhile, we still have insights and know-howthat have yet to be realized as intellectual property, and we
recognize that intellectual property is extremely important interms of acknowledging the value inherent in our own assets.

Top Message

Oka: Let’s go back to the TIS INTEC Group’s process ofstructural transformation. Essentially, I believe, this process isintended to open up business opportunities that TIS wants theGroup to pursue. For you two, what is the significance ofstructural transformation?

the skill of SI professionals. Reliable production capabilities area given, because services must extend beyond ensuring
security, addressing regulations and, above all, the payment
function. What’s more, the ability to create as well as combine
services represents the value we add to every TIS service-styleproject.

Introduction

New Challenges and Production Capabilities that Cement
Foundation

Fujii: To foreshadow changes in social structure and shifting
value perceptions, we too must constantly adjust. Ourcatchphrase is “Contribute to society.” If the services wecreate are not used by everyone, what’s the point of creatingthem? Needs, such as user-friendly design, speed and stability,

56

Financial Investment Strategy

We will further enhance our corporate operations to meet the demands of society.

g Overview of Financial Investment Strategy

Financial Policy

Sustainable Improvement in Corporate Value

Sustainable Improvement in Corporate Value

Anticipated EPS Growth

EPS

ROE

(Yen)

10% CAGR

12.5–13%300(Continuous growth)(Aiming for 15% in long term)

200
100

Promotegrowth investment

Strengthen
return to shareholders

Growth investment overthree years

Total return ratio

Investment discipline
ROIC 8%

Seeking continuous growth exceeding 10% CAGR

0

Fiscal
2021

45%

About
¥100 billion

Fiscal2022

Fiscal2023

Fiscal2024

Fiscal2027

Anticipated ROE Improvement

Enrich dividend
per share(%)*Treasury stock held by TIS will,in principle, be limited to 5% of
total number of shares issued,
with any excess canceled.

16

Fiscal 2024 12.5–13%

14

Maintain financial health

12

Maintain A rating
Have cash and deposits
equivalent to two months’ worth of monthly sales

10

Will leverage structural transformation and become
corporation capable of stable ROE of 15%

8

Fiscal2021

Fiscal2022

Fiscal2023

Fiscal2024

Fiscal2027

g Growth Investment

Growth Investment
M&A(capital contribution)¥70 billion

Investment Policy¥30 billion Human

Promote investment to attract
human resources for businessareas of focus
Continue to invest in programs
to hone professional skills of
employees

Shinichi Horiguchi(Billions of yen)

Robust investment themes:
Social issues where we can contribute solutions
Urban concentration/
Financial inclusion
rural decline
Low-carbon/
Health concerns
decarbonized society

Stronger value chain

Emerging Tech

Joint creation

X - TechDX Offering

Tech Innovation

Medium-term
management plan[Three-year
cumulative total]

Fiscal 2022
-Fiscal 2023
actualFiscal 2024
estimate

Current estimate[Three-year
cumulative total]

10.8

6.2

17.1

8.0

4.3

2.6

6.9

Investment in R&D to acquire advanced technologies

12.0

5.8

3.3

9.1

‒

‒

5.0

5.0

Sub-total

30.0

21.1

17.1

38.2

M&A (Capital contribution)

70.0

6.4

22.5 *1

28.9 *2

Total

100.0

27.5

39.6

67.1

Reinforce in-housecapabilities

10.0

Investment in human resources to fuel structural transformation
Investment in human resources [Prior investment amount]＋

Corporate Information/Data

Software investment to create new services

ASEAN

Platform for Value Creation

R&D

resources

New SPB

Continue investment insoftware development forindustry platform building
Pursue research into
leading-edge technology
Engage in applied research toaccelerate market entry for
new business activities

Internal
reinforcement

ChannelImplement strategic M&As
Contribute capital to accesstechnology and know-how andpromote joint business pursuits*1 Only completed Nihon ICS investment amount. If excellent opportunity presents, will actively consider allocation of remaining investment budget.
*2 Will actively consider investment if excellent opportunity presents.

57

Growth Strategy for Value Creation

We will improve the value provided in DX services and underpin efforts to acquire new technology throughrobust investment of about ¥100 billion.

SoftwareDirector,
Senior Managing Executive Officer
TIS Inc.

10% CAGR

TIS INTEC Group Value Creation

know-how and methodologies we have developed over many
years. To strengthen the strategic aspect of linking intellectual
property to corporate value enhancement, we incorporated
the Legal and Intellectual Property Department into the
Corporate Planning SBU in April 2023, thus reinforcing theconnection between IP and corporate planning. We also
strengthened the Corporate Sustainability Committee byplacing it directly under the Board of Directors, and we newly
established a Corporate Governance Promotion Department
and Investor Relations and Shareholder Relations Office toenhance governance and promote constructive dialogue withstakeholders, respectively.
I was appointed as a director in charge of corporate
organization in April 2023. Around 10 years ago, I worked in
the Corporate Planning Department and Human Resources
Department, then moved to the business side, and now I havereturned to the corporate organization. In the ensuing years,
the Group has grown considerably, and I realize that thevarious social demands placed on companies have becomemuch broader and more sophisticated than they were backthen. While I am humbled by the heavy responsibility that lies
ahead of me, I believe that strongly increasing thesophistication of our management base will benefit ourbusiness organization and provide the driving force to further
enhance our corporate value. Leveraging my experience in thebusiness organization over the past 10 years, therefore, I will
work to improve value exchanges with our stakeholders bylistening carefully to customer feedback, striving to improve
employee job satisfaction, and engaging in dialogue with ourshareholders.
In fiscal 2024, the final year of the current medium-term
management plan, we will continue delivering steadyoutcomes under our new structure while making solid
preparations for our next medium-term plan. We will do ourutmost to sustainably increase corporate value while looking
to the future of Group.
We look forward to your continued support and guidance.

We will strive to achieve sustainable improvement in corporate value by balancing robust investment ingrowth fields with management conscious of capital costs.

Top Message

While the numerical aspects of our medium-term
management plan (2021–2023) are proceeding favorably, we
are also making steady progress in upgrading ourmanagement infrastructure. This is essential for promoting
sustainability-oriented management alongside our businessactivities, and we are beginning to see results.
With regard to human rights and the environment, which
are high-priority social issues of urgent importance, we
identify potential human rights risks through human rights
due diligence and work to prevent and mitigate those risks. In
the environment, as part of its strong commitment, the Grouphas declared its goal of achieving carbon neutrality withrespect to its own greenhouse gas (GHG) emissions and net
zero GHG emissions for the entire value chain. For humanresources, our most important management asset, we
completely revamped our compensation, evaluation, andgrading protocols to create a new personnel system, and weare stepping up investments in human resources to increase
employee engagement. We anticipate that growth of ourhuman resources will lead to the growth of our company andreinforce the virtuous cycle of corporate value improvement. In
governance, to meet the demands and expectations of society,
we have reduced our cross-shareholdings. At fiscal year-end,such holdings accounted for less than 10% (our target) of net
assets shown on our consolidated balance sheets, indicatingthat we reached our target at an early stage.
These efforts have been well-received by external evaluation
organizations, which demonstrates our ability meet society’s
expectations and shows that we are moving in the right
direction.
Nevertheless, because upgrading our management
infrastructure is a never-ending project, we will continue
steadily implementing measures one by one. To achieve evenmore sustainable corporate growth, for example, we arestrengthening efforts to create and maximize intangible value.
In fiscal 2023, we were able to significantly curb unprofitableprojects. This is due to our efforts to improve quality and theIntroduction

Message from the Director in Charge of Corporate Organization

58

g Basic Policy on Return to Shareholders

Medium-term management plan assumptions

Profit growth andstructural transformation

Structuraltransformation

Operating income
Fiscal 2021: ¥45.7 billion
Fiscal 2023: ¥62.3 billion

Reduction in strategic shareholdings
Strategic shareholdings on balance
sheet

Fiscal 2023
Equity ratio 8.9%

Comparedwith estimate

Stable cash creation

Allocation

Cash creation frombusiness

Investment
About ¥100.0 billion

Growth investment
R&D/Investment in humanresources

Growth investment
M&A/SW

Optimization of assets, such as
strategic shareholdings, andfund procurement

Return to shareholders up,
in line with profit growth
exceeding estimate

Facility maintenance andinvestment

Strengthen return toshareholders
About ¥50.0 billion

Comparedwith estimate

Comparedwith estimate

ROE Growth Structure
10.8%

Net income ratio

6.2%

Total asset turnover ratio

1.08

Financial leverage

1.63

Fiscal 2024 (at time plan drawn up )12.5%〜13%
7.8% Structural transformation, investment results
Slight drop Increase in business assets paralleling growth investments
On a par Maintain financial healthg Status for Return to Shareholders

・Offer ¥3 increase in year-end dividend for fiscal 2023. Marks 11th straight year of increase in annual dividend.
・For fiscal 2024, planning for ¥53 annual dividend and treasury stock buyback, in line with basic policy on return to shareholders.
Fiscal 2023 (actual)

Fiscal 2023 (actual)

18.8%(Normal)Annual dividend per share

Fiscal 2024 (estimates)(Capital optimized)–¥50¥12.1 billion–¥12.1 billion

–

22.0%

¥50

(YOY change +¥6)
[Compared with estimate +¥3]

¥53

[YOY change +¥3]

Total dividends

1.08

Payout ratio (After adjustment * )22.0% [30.3%]

1.59

Acquired treasury shares

About ¥5.5 billion About ¥24.5 billion About ¥30.0 billion¥6.2 billion*2

Total return ratio

31.9% [44.0%]

–

45.0%

1

¥12.7 billion
30.4%

76.0%

b ＝45％ (Yardstick)aa. Income from operating activities(After deducting corporate and othertaxes and non-controlling interests)*1 Based on profit (after income taxes and income attributable to non-controlling interests)*2 Upper limit based on treasury stock buyback announced May 9, 2023.

g Cancellation of Treasury Stock

Cancellation date

Number of shares cancelled

Percentage to number of issued shares before cancellation

February 28, 2023

6,715,483

2.7％

September 28, 2021

12,206,400

4.6％

g Working toward Realization of Management Aware of Capital Costs and Share Price

Business profit/profitability

Market evaluations¥62.3
billionBalance investments and withhigher returns

Capital efficiency¥853.1billionRobust disclosure
Constructive dialogue

18.8%

2.8
times

Fiscal2018

Fiscal2018

Operating Income

Fiscal
2020

Fiscal2021

Fiscal2022

Operating Margin

Fiscal2023

Fiscal2017

Fiscal2018

Market value

Fiscal2018

Fiscal2020

PBR

Fiscal2021

Fiscal2022

Fiscal2023

6% level

Fiscal2017

Fiscal2018

ROE

Fiscal2018

Fiscal
2020

Fiscal2021

Fiscal2022

Fiscal2023

Cost of equity

60

Corporate Information/Data

Balance financial healthy,
investment and return toshareholders

12.3%

Fiscal
2017

Platform for Value Creation

The Group is conscious of the cost of capital and aims to generate sustainable returns that exceed suchcost of capital. As the officer in charge of financial investment strategy, I will work to strike a balance
between investing for growth, ensuring financial soundness, and strengthening shareholder returns. To
this end, I will promote active investments in business portfolio and capital structure optimization andstrive to improve capital efficiency by strengthening balance sheet management. At the same time, I
will focus on reducing the cost of capital through proactive information disclosure and day-to-day
engagement.
Under our current medium-term management plan, we have aggressively invested in humanresources and other future-oriented growth areas. As a result, we have increased profits and improved
profitability through steady business growth and progress in structural transformation based on
concentration of management resources in strategic domains. By improving the cash generation
capabilities of our businesses, we have also transformed the quality of our management and are wellpositioned for further progress in the future. To further improve capital efficiency and optimize our
Masakazu Kawamura
capital structure, we conducted large-scale share buybacks totaling ¥30 billion (including ¥5.5 billion
TIS Executive Officer, Division
Manager of Corporate Planning SBU worth of shareholder return) in fiscal 2023. As a result, we exceeded our target range of 12.5–13% for
ROE, which ended the year at 18.8% thanks to a significant reduction in cross-shareholdings (evenafter excluding a one-time jump in extraordinary income). While the Company’s cost of capital has remained at around 6% (calculated basedon CAPM), the equity spread has been increasing, enabling us to create solid corporate value. We believe that our efforts to promote
understanding and confidence in the Group’s management, while enhancing management sophistication through proactive information
disclosure and constructive dialogue (including about ESG issues), have resulted in improved market recognition.
To meet the expectations of our stakeholders, we will continue striving to maximize corporate value by both aggressively investing in
growth and improving profitability under a disciplined management approach, while continuously enhancing shareholder returns in line withgrowth in business profits.

Basic stance on return to shareholders
Fuller return matched to business growth(Total)10.9%(After adjustment *1)

59

Strengthen
return toshareholders

Growth Strategy for Value Creation

ROE

MaintainfinancialhealthCapital optimized(Acquisition of treasury stock)
Executed share buyback tosupport capital optimization(Fiscal 2023 ¥24.5 billion)

Promote growth investment
・Take vigorous approach to investment in human resources as well as
upfront investment, M&As and other growth investment opportunities.
Respect investment discipline ROIC of 8%, with maximum investment of¥100 billion over three years. Provide higher level of DX value and work toacquire new technology to achieve strategic domain ratio of 60% andoperating margin of 11.6%.
Maintain financial health・Have cash and deposits equivalent to two months’ worth of monthly sales,
mindful of maintaining A rating.
Strengthen return to shareholders
・With yardstick of 45% for total shareholders’ return ratio, goal is tocontinuously enrich dividend per share.
・The amount of treasury stock held by TIS will, in principle, be no more than
5% of total number of shares issued, and any shares exceeding this limit
will be canceled.

Promotegrowthinvestment

Higher return to shareholders in linewith profit growth

In addition to promoting a virtuous cycle from/to investment, structural transformation and profit growth, improve capital efficiency through financial
measures designed to optimize capital.

Fiscal 2021 (actual)

Seek more appropriate capital composition and enhanced capital efficiency, with efforts to promote growthinvestment, maintain financial health and strengthen return to shareholders —all in the right balance.

Comparedwith estimate

TIS INTEC Group Value Creation

Fiscal 2021 Fiscal 2023
Down ¥35.1 billion

Decided to acquire corebase in installments (toensure long-term stablebusiness continuity)

Top Message

Comparedwith estimate* Based on profit (after income taxes and income
attributable to non-controlling interests)

No change in plan for growthinvestment of about ¥100 billion(Significant increase in human resources
investment)

Promoting virtuous cycleof investment, structuraltransformation andprofit growth

Investment financestrategy promotion

Strategic domain ratio(Sales composition ratio)
Fiscal 2021: 51%
Fiscal 2023: 56%

ProfitgrowthConstantly enrich thedividend

45%

Investment

Upper limiton treasury stock holdings
at 5%

Dividends per share

Total return ratio*

Progressb. Total return to shareholders

Progress

Introduction

g Cash Allocation

Business Strategies by Segment■ Fiscal 2023 Segment Review
Net sales

Segments(Millions of yen)Configures services through own investment
based on best practices accumulated groupwide
and provides knowledge-intensive IT services.

111,752(Millions of yen)

(Operating margin) (%)

Number of employees(Person)*2

6,426(5.8%)Per Employee
Net sales(Millions of yen)*

3

5,683

19.6

Operating income(Millions of yen)*4

Net salesby business category

Number of companies

Strategic domain image

TIS and 25 consolidated
companies(4 domestic, 21 overseas),
70 equity method affiliates(one domestic, 69 overseas)

1.1

IOS

IOS

BFS

Business Process Management

43,2555,123(11.8%)

2,580

16.7

1.9

4 consolidated companies(3 domestic, one overseas),

7.2

TIS and one consolidated
company(one domestic),
2 equity method affiliates(2 domestic)

Financial IT Business
Considers business and IT strategies together andleverages both, and supports business progressusing expert business and operating know-how
specific to the finance industry.

101,184

13,896(13.7%)

1,921

52.6

TIS INTEC Group Value Creation

Addresses issues related to business processes
with IT technology, business know-how and skilledhuman resources to provide more sophisticated,
more efficient outsourcing services.

Top Message

Offering Service Business*1

Operating income

Change in Reporting Segments
To promote further structural transformation, TIS implemented a change in the management structure of the TIS INTEC Group, and paralleling thischange, the Company implemented a business model–specific management approach in revising its reporting segments, effective from fiscal 2023.
The principal changes are as follows.
*Increase effectiveness of growth strategies, applying management approach more strictly.
*Make Offering Services Business, which is based on up-front investment business model, into an independent business unit to accelerate service-style business.
*Make Regional IT Solutions, which has broad customer base, into an independent business unit to deploy IT professional services and solutions.

Introduction

TIS INTEC Group extends its business in five segments—the Offering Services Business, Business Process Management,
the Financial IT Business, the Industrial IT Business and Regional IT Solutions.
TIS clarifies the delegation of authority and scope of responsibilities for segment operators and works toward realizationof growth strategies utilizing the strengths of each Group company to promote further structural transformation.

SPB

Industrial IT Business

113,632

16,728(14.7%)

3,810

29.8

TIS and 9 consolidated
companies(6 domestic, 3 overseas),

4.3

SPB
IOS

SPB

Regional IT Solutions
Provides IT professional services extensively, acrossregions and client sites, and collects and develops
this know-how as the source of solutions to
support efforts to address issues and promotebusiness activities.

160,010

Other

Adjustments

Total (consolidated basis)

7,303

21.9

2.6

8,957

878
(9.8%)

649

13.8

1.3

—

–30,394

–67

—

—

—

—

508,400

62,328(12.3%)

21,946

23.1

2.9

Fiscal 2023 Business Results by Segment

22.0%

8.5%

19.9%

22.4%

10.3%

8.2%

22.3%

26.8%

SPB
IOS
BFS

*1 Business composition of Offering Service Businesses
Offering Service Business

31.5%

Business Process Management

Other

Payment services

Globalservices*

Degital marketing,healthcare, management
information services

Financial IT BusinessIndustrial IT Business

1.4%
31.0%

Regional IT Solutions
OthersAdjustments*Partial transactions are amounted on other segments

61

—

1.8%

Operating Income (Consolidated)¥62,328 million
-0.1%

—

*2 As of March 31, 2023.
*3 Fiscal 2023 net sales by segments/ number of employees bysegments at March 31, 2023.
*4 Fiscal 2023 operating income by segments/ number of employees
by segments at March 31, 2023.
62

Corporate Information/Data

Other*Segment sales include intersegment sales.

-6.0%

BFS

50 consolidated subsidiaries
74 equity method affiliates

Software development
Operation and cloud services
Product and software sales

Net Sales (Consolidated)¥508.400 million

4 consolidated subsidiaries(3 domestic, one overseas)

IOS

Platform for Value Creation*A business segment for business activities that do not fall underother reporting segments. Consists mainly of ancillary businesses
providing all sorts of IT services.

19,343(12.1%)

7 consolidated companies(7 domestic),
2 equity method affiliates(2 domestic)

Growth Strategy for Value Creation

Considers business and IT strategies together andleverages both, and supports business progressusing expert business and operating know-how
specific to industry sectors other than finance.

Business Process Management Business (BPM)

We aim to make great strides as a major growth driver for the Group by transforming our businessstructure through the expansion of service-oriented businesses.

The BPM Business segment deploys digital technology and operational know-how to help customers
optimize their business processes. It consists of outsourcing, contact center operations, and DX support
for system configuration and IT solution applications.
In fiscal 2023, the segment recorded modest increases in net sales and operating income thanks toexpansion of contact center operations and DX support, although our existing data entry operations
struggled.
There is no change to our view that companies’ outsourcing needs will increase in the future as theworking-age population declines due to the falling birthrate and aging population. Against thisbackdrop, we will strive to achieve the goals of our medium-term management plan and deliver
subsequent further growth. Specifically, we will accelerate our efforts to increase BPO sophistication by
combining the Group’s accumulated industry and operational knowledge with the digitization ofbusiness processes. By also helping customers optimize their overall business processes, we will solidify
our position as an irreplaceable business partner.

Shuji Yamamoto
AGREX President

Business Environment

Strengths

Business Environment	Ability to utilize industry knowledge accumulated through systems
integration operations and provide upfront investment-styleservices incorporating universal services as standard features.
	Quality, cost and delivery (QCD) management capabilities built on
experience in large-scale systems configuration.

	Cashless market in growth mode. Expect greater movement ofpeople and recovery in inbound activity.
	Diverse themes present through finance x operating company
efforts (such as regional renaissance and digital payroll).
	Southeast Asia heading for possible economic slowdown against
backdrop of inflation and financial tightening.
	System updating demand exists in accounting and businessadministration areas (including responses to new invoicing systems
and Law Concerning Preservation of National Tax Records inElectronic Form).
	Cloud security market will continue to grow.

	Unique methodology integrating business process know-how built
on more than half a century of hands-on experience.
	Comprehensive capabilities optimizing full spectrum of businessprocesses through fusion of business process outsourcing (BPO)
and systems integration services.
	Business knowledge based on track record of outsourcing services
for insurance sector.

	No course correction to labor shortage or workstyle reform,
likely keeping business process outsourcing market in gradual
growth mode.
	Demand for simple outsourcing, such as data entry work, shrinking
due to digital advances, but demand firm for services to facilitate
digital shift in business processes.

	Seek growth in payment services, which hinge on CreditSaaS, shift toward recurring business, and improve profitability.
	Seek growth through synergies among payment services, digital marketing and healthcare, and improve added value through vertical integration ofcloud and security structures.

Growth Strategies for Further Business Expansion
	Boost added value beyond simple outsourcing through digitization of business processes.
	Augment presence in forte sectors, such as insurance and securities, by working to cultivate position in new markets.
	Review service portfolio, and make necessary investments to underpin future growth.

Fiscal 2023 Performance Highlights	Overseas business contributed to sales growth. Higher sales and higher income reflect trend toward greater IT investment in payment settlement
and platform systems as well as improved profitability.

	Existing data entry business struggled but situation was stabilized by rising demand paralleling digital shift.

	Expect higher sales and higher income, mainly from effect of change in status of consolidated subsidiaries. Expanding demand for payment
settlement and other broad-based services will be key contributor to sales.

Changes in Net Sales and Operating Income during Medium-Term Management Plan
Net Sales
ActualEstimates

ActualEstimates

Operating margin

103.1(Actual)(Billions of yen)

ActualEstimates

4.5%

5.8%

6.1%

6.4

7.4

Operating Income(Billions of yen)
Medium-term
management plan

45.5

8.8%
9.5

44.0
42.9

Actual

11.6%
4.9

43.2

Estimates

11.8%

Operating margin

11.7%

5.1

5.1

Fiscal 2023

Fiscal 2024

(Billions of yen)
Medium-term
management plan

Corporate Information/Data

108.5

Net Sales
Medium-term
management plan

122.8

Fiscal 2022

	Re-expanding business process outsourcing business, fueled by enhanced added value of services, and concerted efforts, especially to support
business optimization, should lead to gradual increase in sales and income.

Changes in Net Sales and Operating Income during Medium-Term Management Plan

Medium-term
management plan

111.7

Fiscal 2024 Forecast

Operating Income(Billions of yen)

Platform for Value Creation

Fiscal 2023 Performance Highlights

Fiscal 2024 Forecast

Growth Strategy for Value Creation

Strengths

TIS INTEC Group Value Creation

The Offering Services Business covers multiple domains, including payment services, which turnknowledge gained through systems integration for financial institutions into a service, as well as digitalmarketing, healthcare, and business management information services and others. Our global business,a component of our business strategy, is also included in this segment.
Among TIS’s social issue solution services, which target social transformation using digital technology,
the Offering Services Business makes a significant contribution in the field of financial inclusion.
In fiscal 2023, this segment posted year-on-year increases in net sales and operating income. In
addition to overseas sales growth, we benefited from expansion of IT investments in payment systems
and infrastructure, as well as improved profitability.
At this point, we are in the future-oriented investment phase. While we recognize that there arechallenges to profitability, we remain committed to not only achieving the goals of our medium-term
management plan but also making a leap forward as a major growth driver for the Group over the
medium to long term. We will continue striving to transform our business structure by expanding
service-oriented businesses centered on payment platforms, a Group strength, while expanding ourbusiness portfolio through M&As.

Growth Strategies for Further Business Expansion

63

By helping customers increase the sophistication of their business process outsourcing (BPO) and
optimize their overall business processes, we aim to become an irreplaceable business partner.

10.6%
4.8

4.6

Fiscal 2023
(Actual)Fiscal 2024
(Estimates)

Fiscal 2024

(At time plan
drawn up)

Fiscal 2022
(Actual)Fiscal 2023
(Actual)Fiscal 2024
(Estimates)

Fiscal 2024

(At time plan
drawn up)

Fiscal 2022
(Actual)Fiscal 2023
(Actual)Fiscal 2024
(Estimates)

Fiscal 2024

(At time plan
drawn up)

Fiscal 2022
(Actual)(Actual)Top Message

Kiyotaka Nakamura
TIS Senior Managing Executive Officer,
Division Director of Digital Transformation Business Unit

Introduction

Offering Service Business(Estimates)

Fiscal 2024

(At time plan
drawn up)64

Industrial IT BusinessAs a true business partner to our customers, we aim to co-create new businesses anddevelop solutions to social issues.

To provide greater value to customers and contribute to society, we will step up measures to deepen
customer relationships and improve quality and productivity.

Hidehiko Shimoyama
TIS Managing Executive Officer,
Division Director of Financial Industry SBU

Business Environment

Strengths

Business Environment	Overwhelming market share in services related to core systemdevelopment for credit card companies and branded debit cards.
	Technologies and know-how accumulated in handling core systemdevelopment and operation for major credit card companies.
	Solid relationships of trust with core clients built through ability torespond to need for high-quality systems.

	For business supporting social infrastructure, demand is firm, andfinancial IT market is moving in favorable direction.
	Payment services market growing, paralleling popularity of cashlesspurchasing.
	Growing payment services market drawing new participants, leading
to heightened competition.

	Knowledge accumulated in processing- and assembly-based
manufacturing and energy sectors.
	Platform-building capabilities for ERP templates using accumulated
know-how.
	Solid relationships of trust with core clients built through ability torespond to need for high-quality systems.

	DX demand will continue, creating favorable conditions forsegment overall.
	Tendency toward worsening business confidence in manufacturingsector, while energy sector grapples with such impacts as soaring
fuel costs.

	Respond to IT demand from core clients, and improve value provided in DX services.
	Cultivate industries through lateral application of insights about processing- and assembly-based manufacturing, and establish various revenue
models based on co-creation activities with clients.

Fiscal 2023 Performance Highlights

Fiscal 2023 Performance Highlights

	Higher sales and higher income, thanks to wider IT investment by core clients in credit card sector as well as financial institutions in the
public sector.

	Sales and income grew, reflecting improvement in profitability, complemented by growing trend toward IT investment, especially among existingclients in manufacturing and energy sectors.

Fiscal 2024 Forecast

Fiscal 2024 Forecast	Anticipate higher sales, underpinned by steady progress on large projects and capture of IT investment demand centered on existing clients.
Income on a par.

	Income likely to be flat, despite higher sales through capture of investment demand, particularly from core clients.

Net Sales
ActualEstimates(Billions of yen)

Actual

13.5%

101.1

(Actual)Operating margin(Billions of yen)

ActualEstimates

Medium-term
management plan

13.7%
13.2%
13.8

96.0
91.6

Estimates

Net Sales(Billions of yen)

115.7

Medium-term
management plan

113.6

13.5%

ActualEstimates

14.7%
14.1%
16.7

13.9
13.0

Operating Income

109.0

108.7

Operating margin

14.5%
16.8

(Billions of yen)
Medium-term
management plan

Corporate Information/Data

105.5

Fiscal 2022

Changes in Net Sales and Operating Income during Medium-Term Management Plan
Operating Income

Medium-term
management plan

Platform for Value Creation

Growth Strategies for Further Business Expansion

	Respond to IT demand from core clients, particularly that related to credit cards, and improve value provided in DX services.
	Establish various revenue models based on co-creation activities with clients.

Growth Strategy for Value Creation

Growth Strategies for Further Business Expansion

TIS INTEC Group Value Creation

Strengths

Changes in Net Sales and Operating Income during Medium-Term Management Plan

65

Satoru Tayasu
TIS Managing Executive Officer,
Division Director of Industries & Public Solutions SBU

The Industrial IT Business supports customers across a broad base of industries and the public sector in
all aspects of system lifecycle, from planning and consulting to system configuration, operation, anddeployment. We have a solid track record in various fields, such as energy, social infrastructure,
manufacturing, services, and engineering, and we are strong in ERP implementation and modernization.
In fiscal 2023, we took advantage of many opportunities to support our customers DX initiatives
and also improved segment profitability. As a result, we reported year-on-year increases in net sales andoperating income and achieved the targets of our medium-term management plan one year ahead ofschedule.
Our deep experience and knowledge in various fields are highly appreciated and trusted by manyof our clients. Combined with our focus on improving quality and productivity, this helps improve theGroup’s value exchange.
Seeking to provide greater value to customers and contribute to society during our next mediumterm management plan, we will step up measures to deepen customer relationships and improve quality
and productivity in each field.

12.8%

15.3
14.0

12.3

Fiscal 2023
(Actual)Fiscal 2024
(Estimates)

Fiscal 2024

(At time plan
drawn up)

Fiscal 2022
(Actual)Fiscal 2023
(Actual)Fiscal 2024
(Estimates)

Fiscal 2024

(At time plan
drawn up)

Fiscal 2022
(Actual)Fiscal 2023
(Actual)Fiscal 2024
(Estimates)

Fiscal 2024

(At time plan
drawn up)

Fiscal 2022
(Actual)Fiscal 2023
(Actual)Fiscal 2024
(Estimates)

Top Message

The Financial IT Business provides one-stop support for the entire system lifecycle based on specialized
knowledge about the finance sector. This segment strengthens partnerships with companies in the financesector, which represents a core customer base, and helps them find solutions to management issues.
In the fiscal 2023, we posted increases in net sales and operating income by meeting the IT
investment needs of our customers and efficiently promoting large-scale projects. According, we achieved
the targets of our medium-term management plan one year ahead of schedule.
With the number of large-scale development projects expected to peak in the future, we recognizethat charting a course for sustainable growth and adhering to that course are major challenges for our
future evolution.
In addition to digitizing operations using knowledge that we have accumulated over many years, we
are working to co-create new businesses with our customers. To this end, we will continue our focus on
growing our customers’ businesses, improving quality, and creating new businesses through co-creation.
We will also work to improve DX value provision and develop new businesses through customer
co-creation, thereby helping resolve customer and social issues. In the process, we will target further
growth as a true business partner to our customers.

Introduction

Financial IT Business

Fiscal 2024

(At time plan
drawn up)66

Introduction

Regional IT Solutions
We aim to achieve further growth by expanding our businesses in both IT professional services andsolutions while creating services that address social issues.

Takayuki Kitaoka
INTEC President

Business Environment	Extensive industry representation in client base, including local
governments, financial institutions, manufacturers, service providers
and aerospace companies from across Japan.
	Solution development capability underpinned by network integration
across the country and synergistic effect with original services.
	Track record includes integrated information solution F3 for financial
institutions; system implementation and operation for Federation of
National Health Insurance Associations; and implementation ofsolutions for regional banks and local governments.

	Despite variations by industry and company, IT demand is brisk.
	Mid-sized companies also tending toward higher IT investment.

05

Platform for Value Creation

TIS INTEC Group Value Creation

Strengths

Top Message

This segment provides IT professional services that draw on the expertise of highly skilled IT technicians
who are mainly stationed at customers’ sites. Deploying the knowledge we have cultivated in this field,
we are also combining our expertise in system integration and network integration to provide beneficial
solutions to customers as we expand our business to regions throughout Japan. We also help clients in awide range of industries and sectors, including banking, insurance, securities, manufacturing, distribution/
retail, healthcare, government, and space, to resolve issues and promote their businesses.
In fiscal 2023, this segment posted increases in net sales and operating income owing to strong
performances in providing IT professional services to the financial sector and solutions to the
manufacturing industry.
Looking ahead, we will continue expanding and creating a virtuous cycle for both our IT professional
services and solutions businesses. We will also work on regional revitalization through cross-industry
projects in such areas as smart cities, manufacturing DX, and medical DX. At the same time, we will
target further growth by creating services that address health-related issues and other social challenges.

The Group is promoting environmental, social and governanceinitiatives to underpin its value creation. In addition, TIS strives
to build bonds of trust through active communication with all
stakeholders and to promote sustainable corporate value inharmony with the evolving values of society.

Platform that supports value creation of the Group

Growth Strategy for Value Creation

E

S G

Growth Strategies for Further Business Expansion
	Collect business insights through close ties with clients, turn the knowledge into solutions, and leverage lateral development of these solutions.
	Enhance user structure support solutions and expand share of the national development-style solutions market.

Fiscal 2023 Performance Highlights

Fiscal 2024 Forecast
	Expect higher sales and higher income, reflecting capture of IT investment demand from medical services and existing clients.

SocialGovernanceContribute todecarbonized society
and recycling society

Sustainableimprovement instakeholder
engagement

Constantly strive forgovernance that
promotes higher levelof trust from society

P.89

P.93

P.69

Quality Control and
Production Innovation P.

E S G

101

Intellectual
Property P.

103

Platform for Value Creation

	Progress in solution deployment complemented by success in business activities emphasizing profitability to knock back effect of reduced scopeof consolidation in first half, ultimately leading to higher sales and higher income.

Environment

Research andDevelopment P.

104

Changes in Net Sales and Operating Income during Medium-Term Management Plan
Net Sales
ActualEstimates

Operating Income(Billions of yen)

160.0

160.0

(Actual)

67

12.1%

Operating margin12.1%(Billions of yen)
Medium-term
management plan

11.2%

10.6%
19.3

19.9
18.0

156.2

Fiscal 2022

Estimates

Corporate Information/Data

165.1

ActualMedium-term
management plan

16.4

Fiscal 2023
(Actual)Fiscal 2024
(Estimates)

Fiscal 2024

(At time plan
drawn up)

Fiscal 2022
(Actual)Fiscal 2023
(Actual)Fiscal 2024
(Estimates)

Fiscal 2024

(At time plan
drawn up)

68

E

S G

GovernanceE

Message from the Chairman of the Board of Directors

E S G

Background

Looking Back on Fiscal 2023

In this section, we provide messages from external directors regarding future
themes, expectations, and challenges for the TIS INTEC Group, which is undergoing
S G
aEstructuraltransformation.

Koichi Sano
External Director

Striving for a More Effective Board of
Directors

Fumio Tsuchiya
External Director

Chairman of the Board of Directors

69

70

Corporate Information/Data

Toru Kuwano

Targeting sustainable growth by improving Board functionality and diversity
Over the past year, we discussed how the Board should be managed to promote business promptly
while properly monitoring risks and opportunities from the perspective of improving medium- tolong-term corporate value. We also discussed the optimal ratio and composition of independent
external directors and internal directors from the viewpoint of fostering useful and transparent
deliberations, as well as the skills they should possess. In addition, we clarified areas to be addressedin the short, medium, and long terms, based on an evaluation of the Board’s current state and its
ideal future state. As an external director myself, I have worked to improve the functions of the Boardof Directors by encouraging open, unpredictable, in-depth discussions from the perspectives of eachstakeholder category and by striving for self-improvement.
While I am pleased with our strong performance in fiscal 2023, I will monitor the implementationand progress of priority measures targeting future growth. At the same time, I will work to swiftly
realize synergies with Japan ICS, a new member of the Group, to accelerate growth in overall offering
services. In addition, I will monitor the efficiency of assets as a particularly important theme. This
includes utilizing system operation bases we have decided to acquire.
Recognizing the paramount importance of human resources, meanwhile, we must continue
striving to attract promising and diverse talent and provide a great workplace environment. At thispoint, I think there is room for further improvement, including with respect to the advancement of
women. Therefore, we need to constantly scrutinize conventional assumptions and identify betterways of doing things. I will closely monitor improvements in compensation and diversity to ensurethat we create a positive cycle for the sustainable growth of the Group.

Platform for Value Creation

Naoko Mizukoshi
External Director(Partner of Leftright Law & IP)

Realizing our Group mission through a BtoBtoC approach
One of the key themes of our materiality is to provide “create a comfortable society throughinnovation and joint activities” As a provider of IT services as its main business, the Group aims tocreate and deliver new value to not only direct business partners but also end-users (consumers/society), by working together with business partners to uncover and anticipate consumer needs. To
achieve this, it is important to have a “BtoBtoC” approach to business, not just BtoB. From mystandpoint and experience as a long-time management of a BtoC company, I feel that the Group, as aconventional system integrator, was lacking in this approach. I hope that the Group, which is engaged
in business structural transformation based on improving the value provided by DX, will once again
deeply embrace the BtoBtoC concept and bring to society our mission: “To brightly color the future asa mover.”
To realize our mission, I hope to shift the emphasis of the Board of Directors to a monitoringoriented style so that the executive departments can take on future challenges quickly andaggressively. As an external director, I will continue supporting the Board of Directors by providing
candid opinions and necessary advice from the shareholders’ viewpoint.

Growth Strategy for Value Creation

I believe the Board of Directors already operates effectively at
the present time. That said, further improvement is always
welcome, and deepening discussions with external directors—
who bring varied experience and insights to the conversation
on medium- to long-term management strategies—is aconstructive way to enhance Board effectiveness. Currently,
our external directors have diverse expertise and skills that are
not necessarily specific to the IT sector. Therefore, we must
create enough opportunities to share information andexchange opinions about the industry, technology trends andother details that will enrich discussions. In addition, we needto have a proper discussion about balancing skillset with TIS
INTEC Group diversity and the monitoring format that bestenables a great team to demonstrate maximum capabilities.
The role of Chairman of the Board carries with it a heavy
burden of responsibility, but for me, an improvement in theGroup’s corporate value is worth the weight I bear. Indeed, it
is my greatest joy. Going forward, I will continue to apply theknowledge and experience I have accumulated over a longcareer as an executive within the TIS INTEC Group. At thehelm of the Board of Directors, I will ensure seamlesscooperation with internal and external directors and do myutmost to enhance corporate governance.

Aiming to further strengthen corporate governance and cash flow generation
As a company listed on the Prime Market of the Tokyo Stock Exchange, the Group must constantly
pursue the best and highest level of corporate governance. As a policy, I believe the Board of Directors
should embrace a monitoring-oriented approach and aim for higher effectiveness by clarifying theroles of execution and supervision, ensuring true independence and diversity, respecting diverse
viewpoints, and being properly accountable as executives for addressing issues that have been raised.
Medium-term challenges and risks for further growth include: (1) Creating and nurturingbusinesses that will be subsequent growth engines, (2) Competing to secure human capital, and (3)Strengthening internal controls as the number of Group companies increases.
We have been working hard to achieve our goal of sustainability-oriented management.
However, we need to accelerate our efforts through proper enterprise risk management (ERM) and aspirit of challenge without resorting to the status quo. We must also visualize the contribution of eachsegment and strategic target. I believe that evaluating the achievement level of each business strategy
and four-quadrant evaluation of KPI values will facilitate the development of subsequent strategies.
By also clarifying our focal business areas and rating each business by time frame, we will be able todetermine appropriate resource allocations and exit strategies.
As in the past, we will continue focusing on three areas: whether our ability to generate cash
flow, which is the source of corporate value, has been strengthened through the businessrestructuring, whether cash flow growth is exceeding net sales growth, and whether our ROIC and
ROE spreads relative to cost of capital have expanded.

TIS INTEC Group Value Creation

In fiscal 2023, the Board of Directors made extremely
significant and large-scale investment decisions affecting the
TIS INTEC Group. These decisions included the acquisition ofshares in Nihon ICS, a switch from leasing to ownership for acore facility used primarily in system operation activities, andbold investment in human resources. Given that each
investment would have a huge impact on Group operations, I
took it upon myself, even though I am Chairman of the Board,
to encourage Board directors to fully demonstrate theirsupervisory function through rigorous discussion of the
proposed investments.
Once discussions got rolling, the most important part of thedecision-making process was to stay true to the Group’s
medium- to long-term vision. Take the equity stake in Nihon
ICS, for example. This would usher the TIS INTEC Group, witha current client base largely comprising big corporations, into
the small and medium-sized business market, where theapproach to services is considerably different. For that reason,

we had to weigh the intrinsic value and significance that thisacquisition would bring to the Group against the risks ofventuring into uncharted territory. Regarding the purchase of
fixed assets, our basic policy had been to refrain fromownership of such assets, including the head office, so theswitch from leasing to ownership required a deep rethink ofthis particular facility and how it would contribute to ourability to continuously provide high-quality services to clients
into the future. A robust discussion ensued.
However, the Board of Directors agrees that, generally, morethan one meeting is needed to decide whether an investment
will enhance the Group’s corporate value over the medium tolong term and whether it will meet the expectations ofshareholders. This is especially so for big-picture themes, suchas the Group’s management stance and growth strategies,
which require a fine-tuned approach, and I am all for holding
more meetings when necessary. We hold regular briefings forexternal directors ahead of Board of Directors’ meetings toprovide background pertinent to the stated agenda, but theimportance of investments may call for irregular meetings aswell, where executive officers and external directors exchange
opinions. Constructive comments are then put forward to theBoard of Directors. Repeated discussions from diverse
viewpoints lead to effective decisions.

Messages from External Directors

Top Message

An identified priority for the Board of Directors is to “supervise
the execution of duties by upper management and thereby
ensure sound corporate management,” according to the
Corporate Governance Code. Based on the definition andunderlying concept of OUR PHILOSOPHY, which likens a
corporation to a social system that aims for happiness, TIS
naturally opted to promote separation of management
supervision and business execution functions to better fulfill its
function as a corporation working for the benefit of society. It
is my role as a director and chairman without the right ofrepresentation to chair meetings of the Board of Directors.

GovernanceIntroduction

To improve corporate value of the TIS INTEC Group, I am working to enhance theefficiency of the Board of Directors.

S G

E

S G

Governance*Please visit the following page for details of our corporate governance.
https://www.tis.com/group/sustainability/governance/

Corporate Governance■ Corporate Governance Structure

General Meeting of Shareholders
Appointment, dismissal■ Basic Policy

Compensation
Committee●Chairperson of the Board:

Reports

Discussion, reports

Fiscal 2015

Separation of executive
and supervisory
functions
External directors
External Audit &Supervisory Board
members

Investment
Committee

Fiscal 2021

⃝Established TIS INTEC Group⃝Formulated Corporate Governance Basic Policy⃝3 persons (total 10 members)⃝3 persons (decreased to 9 members)⃝3 persons (out of 4 members)⃝3 persons (total 5 members)⃝Conducted evaluation of the effectiveness of the Borad of Directors

TIS complies with all principles of the Corporate Governance Code. The status of the Company’s responses to each principle of the
Corporate Governance Code is described in the Corporate Governance Report.

Reason for Selection of Current Corporate Governance Structure
TIS has an Audit & Supervisory Board, a model chosen for its double-check function through which the Board of Directors oversees
the execution of business activities and the Audit & Supervisory Board audits activities to ensure operations are legal and appropriate.
In addition, the Company aims to strengthen the supervisory function of the Board of Directors by appointing external directors withindustry- and corporate-management-related experience and insight. Drawing on advice and recommendations from an independent
standpoint ensures the validity and appropriateness of decision-making by the Board of Directors.

■ Operational Status of the Board of Directors

Number of Meetings Held

Board ofDirectors:
11%
Male
directors:
870+ years old:3

■ ■ Items Resolved ■ ■ Items Reported(One other by written
communication)Age
50+ years old:3

1.49 hours

138
20(One other by written
communication)

19

Average ageof Board of
Directors
64 years old

68

119

114

60

63

(One other by written
communication)

60+ years old:
3

Average Time for Deliberations per Meeting(excluding meetings by written communication)

Number of Agenda Items

Fiscal 2021

Fiscal 2022

Fiscal 2023

70

59

Fiscal 2021

Fiscal 2022

1.13 hours

1.11 hours

Fiscal 2022

Fiscal 2023

51
Fiscal 2023

Fiscal 2021

72

Corporate Information/Data71(51 items resolved and 63 items reported)

22

Board ofDirectors:
33%
Internal
directors:
6

Board of Directors: 19 meetings held; 114 agenda items discussed

Year ended March 31, 2023

Board of Directors (As of June 23, 2023)

External
directors:
3business direction, as well as meetings ahead of Board of
Directors’ meetings—in principle, twice a month—to give external directors and external members of the Audit & Supervisory
Board sufficient background information to participate in discussions. In addition, the Company organizes study sessions withexperts—in-house and external—and arranges visits to local
Group facilities and offices. TIS also creates opportunities forexternal directors to exchange opinions with the President andconvenes meetings that involve only external directors and external members of the Audit & Supervisory Board. This facilitatessmooth but vigorous discussion by the Board of Directors.

As stipulated in its Articles of Incorporation, the Company’s
Board of Directors will comprise at least three and no more than
15 directors, and to strengthen the supervisory functions of theBoard of Directors, a policy has been established that one-thirdor 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, it convenes in principle once monthly and also meetson an ad hoc basis whenever necessary.
TIS holds an information meeting once a year to present its

Platform for Value Creation■ Compliance with the Corporate Governance CodeFemale directors:
1

Affiliatedcompanies

Growth Strategy for Value Creation⃝Established the Corporate Sustainability Committee

Diversity (Percentage of female directors)

Divisions/
Departments⃝2 persons (total 5 members)⃝Introduced the performance-linked stock incentive plan(Compensation ratio: basic compensation : performance-linked compensation :performance-linked stock incentive = 7 : 2 : 1)
⃝Revised the compensation ratio to 6 : 3 : 1

Independence ratio

Cooperation

Executive
Officers

Evaluation⃝Established the Nomination Committee and Compensation Committee,of which the majority of members are independent external directors⃝Appointed external director as Chairperson ofeach committee

Improvement ofeffectiveness ofBoard of Directors

Cooperation

Delegation of authority to
execute operations

System Development
Meeting⃝1 person (total 5 members)

Institutional design andother matters(Three independent
Audit & Supervisory
Board members)

Units involved
in internal audits

Reports

Accounting
auditsThree external
members

Internal audits
Discussion, reports on
significant issuses⃝1 person (total 9 members)

Female Audit &Supervisory Board
members

Reports

Accounting Auditor

Corporatewide Proposal
Review Process

Diversity
Female directors

Four years

Reports

Management Committee

CVC Investment
Committee⃝2 persons (out of 8 members)

Two interal Audit &Supervisory
Board members

Cooperation

TIS INTEC Group Value Creation⃝Established IT Holdings Corporation

Fiscal 2018

Audit & Supervisory Board(Five members including
two female members)●Term of office:Election, dismissal, supervision

President■ History of Initiatives to Strengthen Corporate GovernanceFiscal 2012

(Three independent
directors)

Chairman●Term of office: One year

Reports

Supervision

Appointment, dismissal

Top Message

Corporate
Sustainability
Committee

Audit, reports
Statement of
opinionThree external
directors

Six internal directors

Group Internal
Control Committee

1. To respect the rights of shareholders and to ensure equality in their treatment.
2.	To consider the interests of stakeholders, including shareholders, and work with stakeholders in an appropriate manner to achieve stated goals.
3.	To disclose corporate information appropriately and ensure transparency.
4.	To engage in constructive dialogue with shareholders based on a medium- to long-term investment perspective.

Appointment, dismissal

Board of Directors(Nine members including
one female member)

Nomination
Committee

Based on basic corporate governance policies, TIS consistently pursues the best corporate governance practices and constantly works toenhance corporate governance. Management believes that the key to good corporate governance is to ensure transparency and fairness in decision making processes, make full and effective use of management resources, and raise the integrity of management practices through swift and accurate assessment of situations, from the viewpoint of promoting sustainable corporate growth and boosting
medium- and long-term corporate value. Accordingly, management at the Company is committed to upholding good corporate governance in line with the following basic principles.

Fiscal 2009

Introduction

The Group seeks to enhance corporate governance and internal controls, which are its core subjects.
The focus is also on promoting quality control and production innovations, essential for the business of­information systems—a key social infrastructure—to function and steadily evolve, as well as evolving risk
E S G processes, including information security and compliance.
management

■ Summary of Results of Analysis and Evaluation of EffectivenessManagement Committee
The Management Committee convenes twice a month in principle, where members deliberate and report important mattersrelated to the execution of business activities throughout TIS
and the Group. The committee consists of the President andRepresentative Director, as the chairperson, and general managers, directors in charge, division managers, and the head of
the Corporate Planning Department, as attendees. If necessary,

Management Committee: 37 meetings held; 237 agenda items discussed(132 items resolved and 105 items reported)

Nomination Committee and Compensation Committee
Compensation Committee

Met three times (attendance rate: 100%)
The committee discussed the appropriateness of
the Company’s compensation package through a
comparative analysis of director compensation amounts
at other companies and at TIS, based on the findings ofa research company. Proposals were made to the Boardof Directors on director compensation, based on the
results of the advice given by the committee.
In addition to the consultation, two sessions were
held to exchange opinions on the topic of officers’
compensation as an incentive with a view to revising
officers’ compensation to better contribute to theimprovement of corporate value.

Committees and Other Bodies

Corporate Sustainability Committee

Identify trends of sustainability management, discusses sustainability issues, selects issues to focus on,
and provides direction on how to address them.

Investment Committee

Verify/advise on plans for investment projects, monitor ongoing projects and assess whether to continue
them with the aim of minimizing related risks and earning higher returns on investments.

CVC Investment Committee

Before making corporate venture capital (CVC) investments for the purpose of enhancing alignment
with venture capital companies in the form of open innovation in order to (1) create new business, (2)expand existing businesses, and (3) promote business collaboration with customers, decide whether or
not to execute an investment and monitor the executed investment.

Corporatewide Proposal Review Process

For large-scale projects to be addressed by the Group as a whole, review drafts prior to actual proposals
to customers, in order to detect and reduce risks as early as possible.

System Development Meeting

Identify potential risk factors in large-scale projects to be undertaken by the Group as a whole, develop
measures to prepare for risks and resolve materialized issues, and terminate any project with losses.

■ Policy and Procedures for Election, Dismissal, and Nomination of Directors, etc.

directors, the Board of Directors considers nominations basedon the advice of the Nomination Committee, which is chairedby an independent external director and comprises a numberof directors, the majority of whom are independent external
directors.
If a situation arises where a management executive should
be dismissed, the Board of Directors shall determine a dismissal
proposal. However, the dismissal of a director shall be conducted in accordance with the Companies Act and other relevant
provisions.

■ Training Policy for Directors and Audit & Supervisory Board Members
For directors and auditors, including external directors andexternal auditors, the Company will arrange and support thecost of training opportunities that are appropriate. The objective of such training is to provide an opportunity to acquire necessary knowledge regarding the Group’s businesses, financial
73

affairs and organization and to understand the duties andresponsibilities required of directors and Audit & Supervisory
Board members when assuming office, as well as to continuously develop these attributes during the term of office.

2. Actions to address issues identified in the previous
fiscal year
In fiscal 2023, TIS took the following actions to address
issues identified in the effectiveness evaluation conductedin the previous year.
(1) Further improving the function of the Board of
Directors
At multiple meetings, the Board of Directors discussed thestate of the Company’s governance with a view to mediumand long-term growth. The main topics discussed included
the role and function of the Board of Directors, institutional
design, delegation of authority to the executive, desired
skills of Board members, number and composition of Board
members, and succession planning for external directors. As
a result, the Board of Directors has become more focused onmonitoring with an emphasis on medium- and long-term
discussions. Specifically, the Board revised the criteria forsubmission of proposals to the Board of Directors anddelegated authority to the executive starting in the current
fiscal year.
(2) Discussions on improving medium- to long-term
corporate value
The Board of Directors identified themes of high importancefor improving medium- to long-term corporate value anddrafted an annual schedule for addressing those themes.
The Board also established a system to ensure that each

3. Results of analysis and evaluation of effectivenessof the Board of Directors
The Board of Directors concluded that sufficient effectivenesshad been ensured to appropriately supervise the status ofbusiness activities at the Company and Group companies,
the approval of important management matters, such as
investments, and business execution, through deliberation
based on Company regulations. In addition, the Board of
Directors concluded that the level of effectiveness continues
to trend upward, reflecting improvement measures based on
the results of the effectiveness evaluation conducted in theprevious fiscal year.
At the same time, management acknowledged theneed to improve the quality of discussions in line with theCompany’s growth and to further focus on medium- tolong-term management themes in order to promote moreadvanced management of the Company.
4. Responses based on analysis and evaluation
In light of the analysis and evaluation, TIS will focus particularefforts on the following.
(1) Improving the quality of discussions
To further enhance and facilitate discussions at Board of
Directors’ meetings, TIS will continue improving the methodof operation, the format of materials used, and thecomposition of the meeting body.
(2) Focus on medium- to long-term discussions
The Board of Directors will prepare an annual agenda
covering management and strategic themes to be discussed
regarding the formulation of medium- to long-term
strategies and their implementation. Through more active
discussion and confirmation of progress, the Board will also
engage in activities aimed at enhancing corporate value.

(Reference) Our Efforts on Group Management
To improve corporate value through unified group management, the Group focuses on improving performance by completing a PDCA (plan-do-check-act) cycle with reference to current key performance indicators (KPIs).
TIS and Group companies evaluate their performance basedon financial indicators, including shared Group KPIs and process
indicators related to customers, internal processes, and learn

and growth initiatives. In addition, to ensure completion of the
PDCA cycle, a Group Business Meeting is held on a quarterly
basis to report on budgets and the progress of major activities
at Group companies, and to discuss measures taken to address
important issues. A Group President Meeting is also held on amonthly basis to share information on Groupwide issues andperformance.
74

Corporate Information/Data

In nominating candidates for directors, Audit & Supervisory
Board members and executive officers, the Board of Directors
will nominate persons with abundant experience, a high level of
insight and advanced specialization based on the Company’s
election criteria that make them suitable as directors or Audit &Supervisory Board members in order to realize effective corporate governance and contribute to the sustainable growth of
the Company as well as the enhancement of its medium- tolong-term corporate value while also considering aspects ofdiversity such as gender, internationality, career and age. For

theme is addressed in a timely and appropriate manner, withparticular emphasis on improving the functions of the Board
as described above.

Platform for Value Creation

Promote various measures to maintain and improve the internal controls of the Company and its
subsidiaries, to evaluate the operational status of the internal control systems and to recommend any
corrective action to be taken to the Board of Directors, if necessary.

1. Method of evaluation
TIS distributed a questionnaire regarding the effectivenessof the Board of Directors to all directors and members of
the Audit & Supervisory Board and obtained responses. In
addition, personnel of its administrative office conductedinterviews with all directors and members of the Audit &Supervisory Board. The Company’s Board of Directors thenused these results to analyze and evaluate its own
effectiveness.
Importantly, TIS conducted this effectiveness evaluation
based on advice and verification by an external attorney.

Growth Strategy for Value Creation

Group Internal Control Committee

were given a questionnaire to be submitted anonymously.
The ­questionnaire asked them to conduct a comprehensive­self-evaluation and self-analysis of the composition and operation of the Board of Directors. Individual interviews were also
conducted, and the Board of Directors held discussions basedon these results. The method and results of the evaluation are
described below.

TIS INTEC Group Value Creation

Status of activities
by committees(Fiscal 2023)

Nomination Committee

Met four times (attendance rate: 100%)
The committee provided advice on theappointment and retirement of key individuals,
including directors, and presented proposals onchanges to director composition, based on the resultsof the advice given by committee members.
Seeking to engage in consultation with greatertransparency, two opinion exchange sessions were
held separately from the consultation to share
understanding of the purpose of executive
appointments and the like, as well as to discuss the
direction of such appointments.

TIS strives for optimal corporate governance and works continuously to make improvements in that area. Since fiscal 2016,
the Company has evaluated the effectiveness of the Board of
Directors each fiscal year with the aim of identifying issues
and areas for improvement and linking them to initiatives toimprove the Board’s effectiveness. For the fiscal 2023 evaluation, all directors and Audit & Supervisory Board ­members

Top Message

Year ended March 31, 2023

the chairperson can request the attendance of Directors andExecutive Officers. If deemed necessary for agenda items related to a Group company, the chairperson can request the attendance of its president and others to get explanations, opinions
or reporting. Audit & Supervisory Board members can attend
the committee meeting and, if necessary, express opinions.

Introduction■ Activities by Other Meeting Bodies

*Please visit the following page for profile of Directors and Audit & Supervisory Board Members.
https://www.tis.com/company/officer/

Directors

Introduction■ Board of Directors and Audit & Supervisory Board Members (As of June 23, 2023)
Audit & Supervisory Board Members

Representative
Director,
President

Representative
Director,
Executive Vice
President

Director,
Senior Managing
Executive Officer

Director

Director

Director

Director

DirectorStanding Audit &Supervisory Board
MemberStanding Audit &Supervisory Board
MemberExternal/Independent External/Independent External/Independent
Yasushi Okamoto

Josaku Yanai

May 3, 1952

March 3, 1962

November 14, 1963

June 23, 1962

Cumulative term of office

10 years

5 years

7 years

Number of shares owned(thousand shares)

173

57

Board of Directors
Attendance/
Number of meeting (Attendance rate)

19/19 (100%)

Audit & Supervisory Board
Attendance/
Number of meeting (Attendance rate)－

Date of birth

Shinichi Horiguchi Takayuki Kitaoka

Audit & Supervisory
Board Member

Audit & Supervisory
Board Member

External/Independent External/Independent External/Independent

Shuzo Hikida

Koichi Sano

Fumio Tsuchiya

Naoko Mizukoshi

Tetsuya Asano

Makoto Tsujimoto

Yukio Ono

Akiko Yamakawa

Hiroko Kudo

December 14, 1960

October 24, 1964

August 30, 1948

May 10, 1948

September 23, 1967

October 22, 1960

December 7, 1960

January 1, 1950

April 5, 1973

February 28, 1968－

5 years－

7 years

6 years

5 years

3 years－

3 years

3 years

1 year

60

24

17

3

4

－

1

9

61

2

－

0

19/19 (100%)

17/19 (89.5%)－* 1

19/19 (100%)－* 1

19/19 (100%)

19/19 (100%)

19/19 (100%)

19/19 (100%)－* 1

18/19 (94.7%)

19/19 (100%)

15/15 (100%)* 2

－

－

－

－

－

－

－

－

12/12 (100%)－* 1

12/12 (100%)

12/12 (100%)

10/10 (100%)* 2

Attendance at meetings

○

○

●

○

○

Compensation Committee

○

○

●

○

○

●

●

●Chairperson 〇Committee member

Growth Strategy for Value Creation

Nomination Committee●Chairperson 〇Committee member

SkillsCorporate Management

●

●

●

Industry Knowledge

●

●

●

International Experience

●

●

●

●
●

●

●

●

Finance & Accounting

●

●

●

●

●

●

●

●

●

●
●

Managing Executive Officer Isao Otokita

Executive Officer

Tetsuya Yuzuri

Senior Managing Executive Officer Masahiro Ueda

Managing Executive Officer Ikuo Shimizu

Executive Officer

Hiroyuki Kawai

Executive Officer

Takuma Tanaka

Executive Officer

Yukino Fuchigami

Executive Officer

Kazuto Nakamura

Executive Officer

Takashi Fujii

Executive Officer

Kiichiro Sasaki

Naoto Kita

Managing Executive Officer

Akira Ogane

Managing Executive Officer

Satoru Tayasu

Managing Executive Officer

Hidehiko Shimoyama

Managing Executive Officer

Tsuneyoshi Ito

Managing Executive Officer

Kyoko Takayanagi

THANAWATLERTWATTANARAKExecutive Officer

Manabu Yano

Executive Officer

Yoshiyuki Hayashi

Executive Officer

Masakazu Kawamura

Executive Officer

Kensaku Furusho

Executive Officer

Reiko Oka

■Criteria for Independence of External Directors and External Audit & Supervisory Board Members
To strengthen the supervisory function of the Board of Directors, the Company has established criteria for ensuring the independence of external directors and external Audit & Supervisory Board members. We adhere to the requirements of Japan’s Companies
Act and the rules of the Tokyo Stock Exchange. Please refer to our website for specific details.
https://www.tis.com/ir/policy/governance/index.html

Leveraging our diversity to help resolve social issues.
Major advances in AI and other technological innovations are causing rapid changes in society. In this context, I recognize that expectations for the Group, which is heavily involved in digital technologies, are increasing more and more. Under our current medium-term
management plan, we have made steady progress with measures to transform our business structure, centered on DX. To address rapidchanges in the market environment in the future, however, we must grow our service-based business, which is the symbol of the Group.
We also need to accelerate efforts to make our high value-added services available to more customers.
We will strive to help resolve various social issues through our business activities. Here, we will leverage our knowledge and experience in system integration services and platform services, cultivated through our relationships with customers in various industries, while
taking advantage of the diversity of the TIS INTEC Group.

Corporate Information/Data

Managing Executive Officer

Executive Officer●

Platform for Value Creation

Senior Managing Executive Officer Kiyotaka Nakamura
Kei Ando●■Message from Newly Appointed Director: Shuzo Hikida

Executive Officers

Managing Executive Officer

●

●

●

Intellectual property and legal*1 Assumed office on June 23, 2023
*2 Based on Board of Directors meeting and Audit & Supervisory Board Member’s meeting held after assumed office on June 24, 2023

75●

TIS INTEC Group Value Creation

Toru Kuwano

Audit & Supervisory
Board Member

Top Message

Chairman■Message from Newly Appointed Audit & Supervisory Board Member: Makoto Tsujimoto
Further improving group governanceI have been with the Company for a long time. In addition to secondments to several Group companies, I have served as representative
director and non-executive director of Group companies. As a new Audit & Supervisory Board member, I would like to use the­knowledge and experience I have gained through these positions.
While emphasizing harmony with society, the Group aims to achieve sustainable growth and increase corporate value over the medium and long terms through sustainability-oriented management. To achieve this, we conduct audits of legality and appropriateness toensure transparency and fairness and foster prompt and accurate decision making, in accordance with our Basic Policies on Corporate
Governance. In particular, I intend to play a role in improving the governance of the entire Group and make it more effective.
76Maximum amount

ActualNet sales¥470,000 million¥482,547 million

Operating income¥48,500 million¥54,739 million¥128.78¥157.691¥700 million (including ¥520 million for the Company) in eachspecified period (three fiscal years)

EPS

Performance-linked compensation

3■ Performance-Linked Stock Incentive

Basic compensation

6

Directors: No more than ¥400 million per year (of which,­external directors receive no more than ¥50 million)
Audit & Supervisory Board members: No more than ¥85­million per year

Performance-linked stock incentiveEencourage pursuit of business growth, and Job Satisfaction,
Customer/Service Satisfaction, and Business Partner Satisfaction
were adopted as nonfinancial indicators to encourage pursuitof higher stakeholder satisfaction, and to ensure attainment ofenhanced corporate value as expected by the shareholders.
In fiscal 2023, the amount of performance-linked stockincentive was determined by applying a performance-linked
coefficient of 150% based on the evaluation of actual results of
the indicators relative to estimates (100% performance-linked
coefficient when attained) conducted in accordance with Stock
Delivery Regulations.

Performance indicator

ProfitFinancialBusinesstransformation

Nonfinancial

Stakeholder
engagement

Fiscal 2023

WeightEstimate

Actual result

Consolidated operating
income25%¥52,500 million¥62,328 million

EPS

25%

¥141.00¥227.11

Service-style businessgross profit

Calculated score based on the actual result
relative to the target of gross profit of service
business

25%¥31,349 million¥32,162 million

Job satisfaction

Calculated score according to the ratio of
respondents who chose the answer “(4) Often
applies” or higher in the overall evaluation(Good company to work) in the Employee
Awareness Survey

12.5%

59% or over58%

Customer/service­satisfaction

Calculated score according to the ratio of
responses of (4) or higher in the questions tomeasure satisfaction for account service in the
Customer Satisfaction Survey

6.25%

57% or over59%

Business partner
satisfaction ratio

Calculated score according to the ratio of
responses of (4) or higher in the questions tomeasure satisfaction “as a business and apartner” in the Business Partner Satisfaction
Survey6.25%

79% or over74%

Platform for Value Creation

Relation between evaluation score and level for each item
Category

ProfitBusinesstransfor­mationItem

Score scale

Standard
Score
score
allocation

Consolidated operating
income11-point scale

7

17.5

EPS

11-point scale

7

17.5

Service-style businessgross profit

5-point scale

B

17.5

Job satisfaction

4-point scale

B

8.75

4-point scale

B

4.38

4-point scale

B

4.38

Stakeholder
Customer/service satisfaction
engagment
Business partner satisfaction

Evaluationlevel

Total score

Performance-linked coefficientA

75 points or over

150%

B

65 points or over

100%

C

45 points or over50%D

35 points or over25%

Corporate Information/Data77

the amount determined by corporate performance evaluation(the ratio of organizational performance evaluation andindividual performance evaluation = 3:7). Under the standard
model, 33% is applied to the payment to an individual with A
in organizational performance evaluation and a in individual
performance evaluation when the corporate performancelinked coefficient is 30%. Similarly, 27%, 20%, 13% and 7%
are for B and b, C and c, D and d, and e and E evaluations,
respectively.
In fiscal 2023, the amount of performance-linked
compensation was determined by applying a performancelinked coefficient of 50% based on the level of attainment ofpredetermined targets with the corporate performanceindicators, including Consolidated Sales, Consolidated
Operating Income and Earnings per Share (EPS).

Distribution composition (image)For the performance-linked stock incentive, the Board of
Directors established the Stock Delivery Regulations when theperformance-linked stock incentive plan was introduced. Points
are granted to directors on a scale between 0% and 15% ofbasic compensation set for each position according to the levelof achievement made toward reaching performance targets
stated in the management plan and as provided for in theRegulations. The number of shares delivered will correspond to
the number of points accumulated.
For corporate performance indicators, Consolidated
Operating Income, Net Income per Share (EPS), and Service
Business Gross Profit were adopted as financial indicators to■ Method for Calculating Executive Compensation(1) Basic compensation
Basic compensation is paid according to the size of the role andscope of responsibilities of each position.
(2) Outline of calculating performance-linked compensation
Performance-linked compensation is paid for the specified
period of one year from July of the following fiscal year. The
amount is determined by the degree to which measures ofcorporate performance have been achieved, on the basis of the
management plan for each fiscal year, and by applying aperformance evaluation coefficient of between 0% and 50%
to basic compensation amount for each position.
The amount to be paid is calculated using five-point scaleevaluations of organizational performance (with the score of A
to E) and individual performance (with the score of a to e) for
each director and Audit & Supervisory Board member, based on

D

Growth Strategy for Value Creationcompensation only, with no performance-linked component.
Compensation for Audit & Supervisory Board members is
decided through discussion by corporate auditors. From theperspective of maintaining a high degree of independence,compensation is not linked to business performance and consists
solely of basic compensation.
(4) Othera.	Upon the introduction of the performance-linked stockincentive plan, the Board of Directors decided to stipulate aprovision for illegal acts in the Stock Delivery Regulations.
The provision allows the Company to reclaim the amountequivalent to the shares delivered to violators and cancel any
points accrued under the performance-linked stock incentive
scheme explained below.
b.	To reflect medium- to long-term business performance,
directors (excluding external directors) are asked tocontribute a certain portion of their basic compensation
toward the purchase of treasury stock through theCompany’s share ownership plan for directors and officers,
and they are expected to retain such stock in full for theduration of their time in office so that the acquired stock
shares value with all shareholders.

C

TIS INTEC Group Value Creation(1) Determination of compensation
The Company has established the Compensation Committee,
comprising mainly independent external directors, as anadvisory body to the Board of Directors to ensure objectivity
and transparency in the process for determining compensationand to strengthen the corporate governance structure.
The basic policy on officers’ compensation is to provide
greater incentive to improve business results through a systemof compensation linked to measures of Company performance,and such amounts are determined through a decision by the
Board of Directors, based on discussion with and suggestions
by the Compensation Committee.
(2) Structure of officers’ compensation
As shown above, compensation to Company directors consistsof a basic component, a performance-linked component andperformance-linked stock incentive. When measures ofCompany performance are achieved to the maximum degree,compensation will comprise the basic component, theperformance-linked component and the performance-linked
stock incentive in a ratio of 6:3:1.
(3) Structure of compensation for external directors and Audit& Supervisory Board members
Compensation paid to external directors is limited to basic

B

Top Message

Target attainment level

A

Introduction

Composition ratio

Compensation amount

Estimates

Organizational
Performance
Evaluation■ Decision Policy and Structure of Officers’ Compensation

Individual Performance
Evaluation
a
b
c
d
e

Fiscal 2022

Financial index(Consolidated)

Outline of Policy on Officers’ Remuneration

78

The scheme grants points to Directors, etc., in accordancewith the Stock Issuance Regulations. The number of shares tobe delivered will correspond to the number of points
accumulated, which is calculated by the formula below.

Performancelinked
remuneration

Performancelinked stockcompensation

Nonfinancial
compensation includedin performance-linked
stock compensation

Recipients(Persons)

249

160

67

21

21

6

41

41

−

−

−

2

61

61

−

−

−

7

Status of Cross-Sharholdingsb.	132,100 shares (including 99,000 shares for the Company)
in one financial year (upper limit)c.	Scope of individuals able to receive beneficiary rights andother rights under the BIP Trust scheme: Individuals who
have retired from being a Director, etc., and meet thebeneficiary conditions specified in the Stock Issuance
Regulations.

■ Remuneration for Directors and Audit & Supervisory Board Members (Year Ended March 31, 2023)
Remuneration by type

Directors(excluding external directors)
Audit & Supervisory Board members(excluding external auditors)
External directors andexternal auditors

Notes: 1.	For the fiscal year ended March 31, 2023, compensation for directors does not include the employee portion for directors who serve concurrently as employees.
The Company has not introduced a retirement benefit system for directors, and does not pay any directors’ bonuses.
2.	The performance-linked stock incentive is booked as an expense for four directors (excluding external directors and non-full-time directors) in the current business year.

■ Establishment of Clawback Clauses
TIS has established a clause that enables the Company torequest an individual who commits an illegal act, as defined
under internal rules, to pay restitution equivalent to the valueof shares granted, and another clause that enables theCompany to confiscate points awarded.

TIS pursues reduction of cross-shareholdings in line with theaforementioned policy and corporate stance and management
seeks to push the cross-shareholdings on a balance sheet basis
as a percentage of consolidated net assets below the 10%
benchmark.
2. Criteria for exercising voting rights for strategically held shares
TIS appropriately exercises voting rights for the listed shares in its
possession after comprehensively determining whether suchaction will contribute to the sustainable corporate growth andhigher medium- to long-term corporate value of the TIS INTECGroup and investee company, taking into consideration policy
advice from proxy advisory firms.
3. Relationships with strategic shareholders
If strategic shareholders of TIS indicate an intention regarding thesale of TIS shares, we will respond appropriately without preventing such a sale. Moreover, we will not conduct transactions withstrategic shareholders that lack economic rationality.

(Millions of yen)
21.6%

22.4%

19.0%

17.9%
62,65454,35953,632

44,423

8.9%
87

96

88

Fiscal 2019

Fiscal 2020

Fiscal 2021

■Amount on BS ■Number of Stocks

85

27,62874

Platform for Value Creation

While proceeding with reduction in line with the abovementioned policies and strategies, we aim to lower thepercentage of the amount of the cross-shareholding
shares recorded on the balance sheet against consolidated net assets to a level of 10%. To achieve this goal, we
reduced 17 issues of shares held for cross-holdings
including 14 issues sold in full. Due to fluctuations inmarket value in addition to the above-mentioned reduction, the amount recorded on the balance sheet for fiscal
2023 decreased by ¥26.7 billion, to ¥27.6 billion. As aresult, the above-mentioned percentage in fiscal 2023 is
8.9% (down 9.0 percentage points year on year). The
percentage excluding strategically held shares is 4.0%.

https://www.tis.com/group/sustainability/governance/governance/

Fiscal 2022
Fiscal 2023
Ratio to Net Assets

Number of issues held for purposes other than portfolio investment and total amounts recorded on the balance sheet
Category

Fiscal 2022

Number of issues(Composition) Strategic shareholdings
Total balance-sheet amount(Composition) Strategic shareholdings
Cross-shareholdings

Fiscal 2023

85 issues

74 issues

52 issues

50 issues

33 issues

24 issues¥54,359 million¥27,628 million¥18,946 million¥15,185 million¥35,413 million¥12,443 million

Corporate Information/Data

Cross-shareholdings

Number of issues and total amounts recorded on the balance sheet
Number of issues

79

Growth Strategy for Value Creation

Basic
remuneration

Calculation Formula
The number of TIS shares to be delivered (points*) =Base amount × Performance fluctuation coefficient ÷
Acquisition cost per unit
* Decimals rounded downthat TIS reduces any cross-shareholding with diminished significance, as identified through the review.
In the review, shareholdings are divided into the three categories (“capital alliance partners”, “customers” and “others”not applicable to the first two categories) and examined using
the method set by category.
Please visit the following page for the details of the examination methods.

TIS INTEC Group Value Creation

Remuneration

1. Criteria for and approach to categorizing investment shares
While TIS has made reduction of domestically listed shares a priority issue and adheres to this as much as possible in accordancewith Company-defined basic policy on corporate governance,
the Company holds shares in other companies, including startups and venture companies, only when management believes
that it will contribute to the sustainable growth and higher­medium- to long-term corporate value of the Company and theGroup.
Specifically, when cooperation, co-creation and stable­partnerships with such companies are deemed essential to continuous creation of business opportunities and utilization of technologies to actively promote business development—­particularlyin the areas of financial inclusion, urban concentration andregional decline, low-carbon/decarbonization and health concerns, which are all social issues where the TIS INTEC Group canhelp to realize a more sustainable society—, then such crossshareholdings are considered investments consistent with theGroup’s growth ­strategy and defined as strategic shareholdings.
TIS and other companies under the Group umbrella holdshares in other companies including start-ups and venture companies, only when management believes that it will contribute to
the sustainable growth and higher medium- to long term corporate value of the Company and the Group. For the shares held
based on the judgment that they would contribute to the sustainable growth and higher medium- to long-term corporate
value of the Group, the Board of Directors reviews the relevanceof continuous cross-shareholdings each year. It is corporate policya. Organization of the BIP Trust scheme
On introducing the BIP Trust scheme, the Company establishedthe Stock Delivery Regulations for Executive Compensation BIP
Trust (Stock Delivery Regulations), under which TIS entrusts a
nominated trust bank with money (not exceeding ¥700 million(including ¥520 million for the Company)), and the trust bankacquires TIS shares with the entrusted money.

(Millions of yen)

Cross-Shareholdings

Top Message

An Executive Compensation BIP Trust (hereafter, “BIP Trustscheme”) has been introduced as a performance-linked stockcompensation system. Those eligible for benefits are directors,
executive officers, and executive fellows (excluding external
directors, non-full-time directors and residents outside Japan;
hereafter, “Directors, etc.”), directors (excluding external
directors and non-full-time directors) and executive officers of
INTEC Inc., a subsidiary of the Company (hereafter, “Subsidiary
Directors, etc.”, collectively with Directors, etc., “Eligible
Directors, etc.“).

Introduction■ Outline of Performance-Linked Stock Compensation System

Total balance-sheet amountUnlisted stock

63 issues¥6,947 million

Stock other than unlisted stock

11 issues¥20,681 million80

3. Accounting audits
The Company has appointed Ernst & Young ShinNihon LLC to
conduct accounting audits pursuant to the Companies Act, andfinancial statement audits, quarterly reviews and internal control audits pursuant to the Financial Instrument the Financial
Instruments and Exchange Act.

Estimate of provision for loss on order received associatedwith contracts for software development
In calculating provision for loss on order received, critical­estimates relate to gross costs, involving key assumptions of
person-hours and outsourcing costs expected to be incurred forsoftware development works. Person-hours and outsourcing
costs necessary to complete projects for software development
may increase significantly from the initial expectation, and there
is high uncertainty in the estimate of gross costs, which consequently calls for judgment on the part of management.
Accordingly, the item was considered as a key audit matter.

(1) Delegation of authority to the executive
To realize agile and appropriate group cooperate governance (in both supervision and execution) within the TIS
INTEC Group, authority has been delegated to the executive. While maintaining the supervisory functions of­corporate governance, the Board of Directors has starteddelegation of authority by combining the following threemeasures from fiscal 2024.
• Revision to the criteria for submission of proposals to theBoard of Directors• Review of the criteria for business execution by the­executive• Regular reporting on the status of execution to the Boardof Directors after delegation of authority (included inannual agenda)(2) Focus on medium- and long-term discussions
In the fiscal year ended March 31, 2023, the Board of
Directors set up the following themes for medium- to longterm strategies, and had discussions among its members,
including external directors.
●Human resources/diversity and inclusion●Sustainability management

81

Aiming to establish itself as a “top-class IT group in the
ASEAN region,” the Board of Directors recognizes theimportance of making optimal use of alliances based on
strategic investments to expand its business domain, andconsequently deliberated over relevant strategies andinvestments. The current business environment, opportunities and risks for medium- to long-term global business
policy, fostering next-generation management personnel
and other ­pertinent matters.
●Discussions about significant medium- to long-term­corporate issues
Company decisions on medium- to long-term corporate
issues are made after deliberating whether outcomes willcontribute to the Company’s sustainable growth and medium- to long-term improvement of corporate value. In fiscal
2023, amongst other things, discussions were held on
acquisition of facilities to support core system management
operations, leading to the decision to make Nihon ICS Co.,
Ltd., a subsidiary.
Going forward, the Board of Directors plans to cover
medium- to long-term management and strategic themes
as a standing agenda item at its meetings, with an active
focus on activities that are intended to enhance corporate
value.
(3) Further enhancement of corporate governance
In April 2023, strategic functions were integrated into the
Corporate Planning SBU of TIS to promote formulation anddevelopment of strategies to realize corporate value creation, in line with the objective stated in the Company’s
Medium-Term Management Plan. At the same time,­governance functions—which had been the responsibilityof the Corporate Administration Dept. of the Corporate
Management SBU—were also transferred to the Corporate
Planning SBU, managed by the newly established Corporate
Governance Promotion Dept. Through these measures, we
aim to integrate and enhance decision-making and strategic
functions, and facilitate a smooth progression from strategy
formulation to implementation.
In the future, we will focus on further enhancing theCompany’s decision-making capabilities, and will work tostrengthen the operation of the general meetings of shareholders and Board of Directors meetings with a view to­better addressing social needs, enhanced governance(including from a legal perspective), and deepen value
exchange with the Company’s broad range of stakeholders.

Corporate Information/Data

Recognizing the importance of a long-term strategy to
grow value provided to society and corporate value throughsustainability management, corporate sustainability activities
were undertaken and reported upon by the TIS INTECGroup. The Board of Directors discussed topics such as
the need for committed efforts to be made by all Group
companies with sense of ownership, for enhancement of●Global business

Platform for Value Creation

Recognizing that human resources are a source of added
value in the medium to long term, an employee survey was
conducted at TIS INTEC Group companies, personnel information and diversity data at individual companies was collected, and ongoing initiatives were reported on, under the
auspices of the Chairman of the Board of Directors. At theBoard of Directors meetings, topics discussed included theneed to enhance a feeling of solidarity in the new work
style and measures to improve the gender gap.

initiatives to develop sustainability into mainstream businessactivities, resulting in new business creation, and for thecreation of business activities to address social issues.

Growth Strategy for Value Creation●Key audit matters

At multiple meetings in fiscal 2023, the Board of Directors
discussed the state of the Company’s governance with aview to medium- and long-term growth. The main topics
discussed included the role and function of the Board of
Directors, organizational design, delegation of authority to
the executive, desired skills of Board members, number andcomposition of Board members, and succession planningfor external directors. As a result, the Board of Directors has
made a conscious decision to focus more on medium- andlong-term discussions, under which the following initiatives
have been launched.

TIS INTEC Group Value Creation

2. Internal audits
The Auditing Department, staffed by 24 people, is responsiblefor internal audits at TIS. This department informs the Board of
Directors of the annual plan, following approval by the
President, and also performs internal audits independent ofbusiness units that execute operations, based on the annual
plan, presents the results of each internal audit to the President
and regularly reports to the Board of Directors. The Auditing
Department also draws up plans for internal audits of theGroup as a whole, monitors the status of internal audits at subsidiaries, performs internal audits at subsidiaries that do nothave auditing departments, and offers necessary advice andprovides supervision for TIS divisions. Complementing these
activities, the Auditing Department regularly exchanges information with internal auditing departments at Group companies, sets up information exchange opportunities that involvethe department, members of the Audit & Supervisory Boardand the independent auditor, and shares information on­auditing measures and the results of audits as, required.

Launched Initiatives to Further Enhance Corporate GovernanceTop Message

1. Audits conducted by Audit & Supervisory Board members
The Company's Audit & Supervisory Board consists of five Audit& Supervisory Board members (two full-time members andthree external members). In addition, one person has been
assigned to assist Audit & Supervisory Board members to
improve the effectiveness of audits conducted by Audit &Supervisory Board members and facilitate the audit process.
The person in this position works under instruction and orders
from Audit & Supervisory Board members, and personnel affairs
related to the position are decided based on the consent ofAudit & Supervisory Board members.
The Audit & Supervisory Board of the Company holds a
meeting once a month, in principle, and may meet on an ad
hoc basis whenever necessary. The Audit & Supervisory Board
carries out an audit of the execution of operations by directors,
an audit of the internal control systems, an audit of the execution of duties by the accounting auditor, and an audit of thestatus of compliance and risk management on a recurring basis
based on the policies and plan determined at its meeting.
In addition, audits were conducted with an emphasis on the
progress of the Medium-term Management Plan (Be a DigitalMover 2023) in its second fiscal year, the application s­ tatus of
the new accounting standard for revenue recognition, theoperational status of Group’s risk management and compliancestructure, the status of measures regarding strategies forhuman resources as a source of growth and the creation of onthe-job skills, and the impact of COVID-19, as key audit itemsin the year ended March 31, 2023.
Starting in the fiscal year ended March 31, 2023, each
Audit & Supervisory Board member conducts evaluations basedon evaluation criteria determined by that Board. Following discussions on the results of those evaluations, they evaluate theeffectiveness of the Audit & Supervisory Board. The Board confirms that a certain level of effectiveness has been maintained
and that it is committed to making continuous improvements.

Introduction

Status of Audits

82

E

S G

GovernanceCompliance / Information Security / Personal Information Protection■ Information Security and Personal Information Protection

The President is the chief compliance system officer for the TIS INTEC Group, while the director responsible for compliance coordinates
the confirmation and evaluation of TIS and Group-wide compliance-related matters and the promotion of improvement measures.

E S G● Compliance Education

E-learning modules are undertaken annually by all officers and employees to affirm and deepen their understanding of the Group
Code of Conduct.
● Regular Investigation of Code of Conduct Effectiveness and Implementation Results

TIS conducts an annual compliance awareness survey, confirming the extent to which the Group Code of Conduct has been
assimilated by employees.
As part of Group-wide compliance promotion activities, we are building Group-wide anti-corruption mechanisms.
● Punishment for Noncompliance

Officers and employees who engage in noncompliant behavior are subject to disciplinary action and legal measures in accordancewith Japan’s laws and regulations as well as the Company’s Articles of Incorporation and internal rules.
● Establishment of Helplines

Direction

ReportReportDirector responsible forcompliance management

Audit & Supervisory Board
ReportDirection

ReportReportInvestigation Committee

Direction

TIS External helpline(Law firm)

Discuss/
Consult

Consult/Report

Group Internal
Control Committee

Discuss/
Consult

TIS Internal helpline

There have been frequent security incidents in recent years involving theleak of personal and confidential information arising from unauthorizedaccess, as well as extortion using ransomware, both of which exploit
information systems’ security flaws (vulnerabilities). In addition to known
attacks— that is, cyber attacks that we already know how to address—agrowing number of attacks exploit vulnerabilities of which even softwaredevelopers and system development vendors are not aware. Security
measures that factor in these unknown attacks need to be implemented
across the whole system without exception.
The TIS INTEC Group has put in place mechanisms whereby the latest
security technology trends and information regarding vulnerabilities areshared promptly within the Group, and processes ensuring the necessarylevels of security are embedded in system building and operation toguarantee that the completed systems have the best possible security. We
conduct regular vulnerability checks on the systems we have built and deal
appropriately with newly discovered vulnerabilities, continuing to strive toprovide safe and secure systems and services.

Chief information security management officer (President)
Information seccurity management andpersonal information protection officer
Secretariat
Implementation departments
Business departments
Head office departments
Operational departments
Administrative support departments
Information security management officer
for data center
Audit managers●Information Security Education and Awareness-Raising

Investigator
Relevant
departments

Compliance Management Dept.

Whistleblower (Directors and employees of TIS INTEC Group companies and business partners)●Personal Information Protection Initiatives

TIS
Group Internal
Control Committee
Reports

Instructions

TIS INTEC Group companies

Group Helpline
Use

Following the Group Personal Information Protection Policy, Group companies in Japan and overseas have formulated rules on thehandling of personal information in accordance with Group standards. We comply with the laws and regulations that apply not onlyin the countries in which the Group has bases but also in those in which we conduct business activities, handling personal
information entrusted to us by customers and stakeholders appropriately and lawfully.
The TIS INTEC Group has established its own personal information protection management system, engaging in information
coordination within the Group management system and implementing risk management education and training. Group companies,
too, operate personal information protection management systems in compliance with the above policy.

TIS INTEC Group companies(Directors, employees, business associates)** Each company also has established its own individual helplines.

● Assuring Whistleblower Confidentiality and Anonymity

In addition to setting up a internal helpline at TIS, we have established external helpline (lawyers’ contact points) for each Group
company to create an environment that makes it easy to report and receive advice.
We take care to protect whistleblowers in accordance with the Whistleblower Protection Act. This includes ensuring theconfidentiality of information reported and being open to receiving anonymous reports.
83

84

Corporate Information/Data<Group>
In addition to internal helplines at each Group company, TIS maintains
an internal helpline for use by the TIS INTEC Group as a whole. We
strive to detect, prevent and correct misconduct as early as possible,
addressing relevant internal issues in an effort to strengthen
compliance management.
When a compliance issue arises within TIS or a Group company, we
work to resolve the issue by immediately establishing an Investigation
Committee, investigating the cause, taking countermeasures, andalso implementing measures to prevent a recurrence.

Platform for Value Creation

Consult/Report

We conduct information security education in the form of e-learning so as to facilitate understanding of the rules stipulated in ourGroup-wide information security policies and to instill information security-conscious behavior among officers and employees, bothin-house and at partner companies. We implement various measures on an ongoing basis to embed basic information security
awareness in each employee.
In addition, we conduct Group-wide education and training for officers, employees, and partner company employees to increaseawareness of the importance of personal information protection.

Growth Strategy for Value Creation

Board of Directors

President●Ensuring Safe and Secure Commercial Systems

Information Security Management
System Promotion Structure

TIS INTEC Group Value Creation<TIS>
TIS maintains helplines available to all officers and employees, including contract staff and temporary staff, as well as retired
employees and employees at business partners, such as companies with contracts to supply products or services to TIS. These
helplines (external and internal) can be accessed via email, telephone, or in person to get advice or report an issue in the event that
actions taken by an officer of the Company are thought to violate laws, regulations, internal rules, or social norms, or that thepotential for such misconduct becomes known.
Every effort is made to ensure the privacy of helpline users. In addition, no one who asks for advice or makes a report to a helpline
will suffer any disadvantage in a professional sense. Lawyers with expertise specific to the issue raised or staff at the helpline desk
will respond to requests for advice and, when necessary, the Company will be informed of situations, with the consent of thehelpline user, to expedite a solution to the issue.

Following our Group Information Security Policy, security measures are
implemented by Group companies around the world in accordance with
the Group’s common information security standards so that digitaltechnologies can be applied to personal information and to expeditiously
provide services that exceed customer expectations while also protectingthat information.

Top Message● Preventing Corruption

If confidential information were to be leaked or manipulated due to a computer virus or unauthorized access, it could result in claims
for damages from clients and other companies and a loss of trust in the Group. Our Group Information Security Policy, Personal
Information Protection Policy, and Policy on Handling of Specific Personal Information have been formulated for application to theentire Group. We make Group-wide efforts to maintain information security, such as protection against cyber attacks from externalsources and prevention of information leaks due to internal misconduct. These activities have been prioritized to effect appropriate
information management.

Introduction■ Compliance

E

S G

Governance*Please visit the following page for details of our risk management
https://www.tis.com/ir/policy/risk/

Risk Management

Introduction

The Company strives to enhance the development of risk management system to prevent any losses.

Strategic risk
Risk items■
Process
EManagement
S G

Overview of risk

• High-quality human resources are not secured and developed according to plan.
• Productivity reduces, costs increase and employee engagement lowers.

Changes in the market• As the Group’s business domain changes and society changes, competitive advantage may be lost by
failing to promptly address changes in the technologies and services required by society. Pricecompetition may also intensify more than expected.

Investment• The expected result or return cannot be obtained.
• Assets become obsolete.
• Misconduct or system failures by a corporate counterparty following an investment or M&A transaction
may result in a loss of credibility, brand damage and potentially lawsuits.

■ Risk Assessment Process

Overseas business• Overseas business is impacted by various factors, including global economic and foreign exchange
trends, legal regulations on investment and competition, local business practices, and labormanagement relations.

Human rights• The occurrence and disclosure of any events which may have a direct or indirect negative impact on
certain stakeholders result in damage to the ­reputation and credibility of the Group.

Geopolitical risks• International pressures, exchange rate trends, trade issues, or effects on procurement costs may occur
due to warfare, civil strife, political upheaval, revolution, terrorism, rioting, and so on.

Reputational risk

• If risks are not properly managed and have a negative impact on society, or if the Company becomes
associated with any negative impact that other companies have had on society, the Company’s businessmay be interrupted, stagnate, or be suspended due to loss of credibility and brand damage, or it may
potentially lose customers or business partners.

An evaluation is conducted of both the top risk trends and material risks, as presented by the president of each Group company
based on the Group’s priority risks as well as the risks identified by each division. The Group Internal Control Committee examines
the risks faced by the Group twice a year, corroborating issues related to those risks and evaluating the status of improvement
measures, and reports to the Board of Directors. Based on these reports, the Board of Directors issues instructions, which areembodied in initiatives to strengthen and improve Group-wide internal control systems.

Risk Assessment Process
Clarification of material risks to be managed by the Group

Clarification of each company’s material risksGroup-wide material risks

Define risk policy

Financial risk

Top risk trends
Reference andconsideration

Risk items

Owned securities

Material risks

Overview of risk

• Sharp fluctuations in the market prices of marketable securities or deterioration in management
conditions of issuing entities requires the posting of accounting losses or other similar measures.

Growth Strategy for Value Creation• Natural disaster• Human capital issues• Geopolitical issues• Compliance issues

Hazard risk
Risk items

Review/add according to policyGroup-wide risk assessment

Risk Assessment

ー

ー

ー

ー

Items

5

H

H

H

H

H

Strategic risks

10

40

4

H

H

H

H

H

Financial risks

4

14

Hazard risks

3

10Operational risks

1040

Evaluation

3

L

H

H

H

H

2

S

S

L

L

H

1

S

S

S

S

S

1

2

3

4

5

• A sharp constriction of the productive activities of our employees and those of our business partners

Natural disasters• A large natural disaster results in an extended power outage that interrupts the smooth operation ofdata centers.

Operational risk
Risk items

System development

System operation• System problems arise due to human error or equipment malfunctions during system operation and theGroup is unable to provide services at the level agreed upon with the client.

Information security• Confidential information is leaked or manipulated due to a computer virus, unauthorized access, orother reason leading to claims for damages from client companies and to a loss of trust in the Group’s
services.

Legal systems,
compliance• A law or regulation is contravened, or a new law or regulation is introduced.

■ The Group’s risk recognition
The Group defines “risk” as “any factor that may hinder the achievement of the management philosophy, goals, and strategies of
the Company and the Group by causing economic loss; the interruption, stagnation, or suspension of business operations; and/or
damage to the Company’s credit or brand image” and identifies risks.

Intellectual property
rights• The Group is accused of infringing another company’s intellectual property rights and presented withan injunction and a claim for damages.

Climate change• The Group’s energy costs are significantly impacted by fluctuations in demand for renewable energy.
• The Group’s transition to renewable energy is delayed.

85

Corporate Information/Data

Review/add based on environmental changes in each department• As systems development is growing more sophisticated and complex and turnaround times areshortening, extra work may be required in order to achieve the planned level of quality or complete theproject during the development period, leading to considerably higher-than-expected costs andcustomer claims for damages.
• Tasks outsourced to business partners do not meet expectations for productivity or quality and smoothproject management is not realized.

Likelihood of occurrence
V: Very likely
H: Highly likely
L: Likely
S: Somewhat likely

Overview of risk

Platform for Value Creation

Subcategories

Degree of influence

Main Categories

V

6

Definition of risks

Overview of risk

Pandemics

TIS INTEC Group Value Creation

Human resources

Top Message

The Company has established rules for risk management to ensure an accurate understanding of the risks facing the Group andprevent losses from occurring. In accordance with these rules, we have appointed an executive to oversee risk management of theentire Group, and a risk management department has been established to administer a risk management system. In addition, we
have established a risk management policy for the entire Group and regularly check the implementation status of measures tocontrol risk. When a Group company becomes exposed to a serious risk, a task force is set up and appropriate measures are taken tominimize damage. As for the development of the risk management system, based on our basic policy and various rules governinginternal control systems, we are implementing specific measures for the maintenance and improvement of the internal control of theentire Group, monitoring the development and operational status of the internal control system, deliberating at the Group Internal
Control Committee, and developing a process to report the results of these deliberations to the Board of Directors.

86For risks identified during our risk management process, we designate a department in charge of crisis
management and promote initiatives to mitigate such risks on a Groupwide basis.
Risk mitigation approaches we focus on, in consideration of the current business environment, are as follows.

■ Risk Mitigation Approach for Human Resources

Human Capital Investment at TIS
Amount of investment

1.1 billion

Recruitment¥

0.52 billion¥

0.42 billion

Indicator and target

Fiscal 2023 results

Number of training days per person
per annum

Improve value ofhuman capital

12 days/person (fiscal 2024)• Recruitment branding• Onboarding• Raise starting salary for new
graduates

Percentage of female employees inmanagement positions• Invigorating employees• Diverse human resources playing
active roles• Revision to HR system andcompensation• Organizational development x
psychological safety

Employee awareness survey result*

12.8% (fiscal 2024)
Developenvironment tobring out good
performance

70% (fiscal 2024)

15.5 days/person(+0.3 days/person year on year)

11.9% (+0.9 points year on year)
64% (+3 points year on year)
1.1% (±0 points year on year)■ Risk Mitigation Approach to Human Rights Issues

Structure

Scope of responsibility and procedures

Board of Directors

Makes resolution on cases requiring reporting or approval related to human rights

Division Manager of Corporate Planning SBU
Person in charge of human rights of the Group’s employees
Division Manager of Human Resources SBU
Person in charge of human rights in the supply chain
Division Manager of Corporate Management SBU

87Implementation of examination under ISO/IEC
27017• Carry out third-party examination based on
checklist compliant with ISO/IEC 27017• Introduce a certification logo to signify the quality
level of security for provided cloud services• Expand acquisitions of ISO/IEC 27017 certification

Development of environment to verify security
vulnerability• Require using SAST and IAST tools• Provide standard SAST, IAST and DAST tools for allcompanies• Implement third-party verification of security
vulnerability• Promote the use of SAST tool by business partners

Quality for areas
other than security

Improvement of delivery quality• Carry out third-party examination based on
checklist for delivery quality compliant with theNon-Functional Requirements Grade 2018
(Information Technology Promotion Agency, Japan)• Implement inspection based on checklist for
handover of management to prevent any troublecaused by failures in the handover process• Implement regular inspection of operation andmaintenanceSophistication of system quality evaluation• Conduct whole-process quality evaluation in quality
evaluation for each phase• Incorporate viewpoints of ISO 25000 into quality
evaluation• Strengthen training for project managers in quality
evaluation• Provide quality-related training to business partners

An information security management system has been established and operates under the Group Information Security Policy toensure information is managed appropriately. At the same time, the Group strives to improve awareness of information security

Makes proposals to the Board of Directors on reporting or approval related toeach stakeholder or human rights due diligencecommittee and set in motion a structured response, including looking into the cause, implementing countermeasures, and putting
measures in place to prevent a recurrence.
The following table outlines the Company response to different types of information security issue.
Points to respondMeasuresResponse to work style reform(telework, ABW*, and others)

Promote expansion of zero-trust environment to all Group companies both to preserve
safety and improve productivity

Response to cyber attack

Revise Security Operation Center (SOC) and Security Information and Event Management (SIEM). Disseminate the Computer Security Incident Response Team (CSIRT)
system to the Group as a whole, share information at the Group Security Promotion
Conference, and conduct regular preparedness drills for incidents.

Response to personal information

Develop Group Privacy Policy and regulations for protection of personal information
applicable to all Group companies in Japan and overseas to establish a Group-wide
management framework as utilization of personal information is expected to increase
as a result of development of related laws and regulations in different countries.

*Activity-based working: work time and location can be selected by workers to align with both the specific tasks and personal preferences.

Corporate Information/Data

Person in charge of human rights due diligence

Quality for security

Platform for Value Creation

The Group understands that its business activities may directly or indirectly have a negative human rights impact. In managing
human rights for the business, a structure has been put in place whereby overall responsibility for human rights is invested in a single
officer, another is in charge of human rights due diligence, another assigned to look after employee human rights, and yet anotherto oversee human rights issues in the supply chain. Final rulings on cases related to human rights are made by resolution of theBoard of Directors.
Potential human rights risks are also identified at the earliest opportunity through appropriate due diligence. The Group will work
toward prevention of negative human right impacts in the value chain by conducting educational sessions for its employees.

Human rights officer

Quality of system/software

among employees through education and training. When an information security breach does occur, we establish an investigative*Percentage of employees who responded positively to the question, “Overall, the company is a good place to work”, in the employee awareness survey.

Director in charge of Corporate Planning SBU/
Human Resources SBU/Corporate Management SBU

Quality of operation and maintenance■ Risk mitigation approach for information security

Absenteeism due to injury or sickness

1.1% (fiscal 2024)

high-quality services after service launch, as well as we elaborate service quality in planning and development phases.

Growth Strategy for Value Creation

Environmentand healthAimsociety through high-quality services”. We have established a structure to conduct quality inspections so that we can stably provide

TIS INTEC Group Value Creation• Provide opportunities to learn andimprove skills• Support autonomous careerdevelopment• Provide opportunities to diversify
experiences

Education¥

Major initiatives

To establish a “trusted top brand that epitomizes quality”, the TIS INTEC Group aims to be a company to continuously “create a safe

Top Message

Human resources are the Group’s most important capital. In order to realize medium- to long-term business strategies and enhance
corporate value, the Group promotes human resources investments in the following four fields: recruitment and education, to createa human resource pool with the acuity and enhanced skills to tackle new business domains; and environment and compensation, toincrease personnel engagement and bring out better performance. Investments in human capital will reduce management risks
surrounding personnel as well as realize a more comfortable society through IT.
With a focus on job satisfaction and attractive compensation as measures to increase employee engagement, in April 2023 TIS
introduced a new HR system, which drastically changed compensation, evaluation and rank structures. Under the new compensation
structure, there is strong investment in high-level human resources who will drive TIS’ business—focusing on young employees inparticular—with basic salaries being raised by a maximum of 17%, and 6% on average.

■ Risk mitigation approach to system operation

Introduction

Risk Mitigation

Has responsibility for promoting human rights due diligence, manages andsupervises it, and reports the status of response to the human rights officer
Has responsibility for the human rights of the Group’s employees, manages andsupervises them, and reports the status of response to the human rights officer
Has responsibility for human rights in the supply chain (suppliers/business
partners), manages and supervises them, and reports the status of response to
the human rights officer

88EnvironmentE

S G*Please refer to the link below for more information on our environmental initiatives:
https://www.tis.com/group/sustainability/environment/

For the Global Environment

E Group
S Ghas addressed preservation of the global environment in its Basic Policy on Corporate Sustainability,The
which is based on its basic philosophy, OUR PHILOSOPHY. In order to realize a sustainable society, we are ­promoting
efforts to preserve the global environment both by reducing the environmental impact of our business activities
and by contributing to our customers’ and society’s efforts to mitigate and adapt to climate change through theprovision of our services.
g Medium- to Long-Term Environmental Targets for

Fiscal 2041
Achieve carbon neutrality in Scope 1 and 2

The TIS INTEC Group declared its commitment to carbon neutrality inDecember 2022. To achieve a decarbonized society, the Group aims
to achieve carbon neutrality in terms of greenhouse gas (GHG)
emissions by fiscal 2041 and net zero GHG emissions throughout its
value chain by fiscal 2051.

Fiscal 2051
Achieve net zero in Scope 1, 2, and 3

Transportation and delivery (upstream) Waste from business
0.1%
2.4%

Business travel
0.6%
Employees’ commute
1.5%

Fuel and energy-related activities
not included in Scope 1 and 2
Capital
1.9%
goods
10.4%
Ratio ofCO2 emissions

Ratio ofCO2 emissions

Scope 2
99.1%

Products andservices purchased
83.1%

Data center and office GHG
emissions in Scopes 1 and 2

Scope 1

Data centers

Scope 2

Offices
15.1%
Ratio ofCO2 emissions*The Group is engaged in the data center
business, which accounts for more than
80% of the Group’s total Scope 1 and 2
GHG emissions.

DC
84.9%

Natural light (solar tracking equipment)

GHG emissions by category in Scope 3

OfficesCategory 1
Category 2
Category 3
Purchased Capital goods Fuel- andgoods andenergy-­services
relatedactivities
not includedin Scopes 1
and 2

Category 4
Transportation anddistribution(Upstream)

Category 5
Waste
generated inoperations

Category 6
BusinesstravelCategory 7
EmployeecommutingTotal GHG
emissions in
Scopes 1-3

Fiscal 2023 (t-CO2)

481

53,07645,453

8,104

386,392

48,317

9,026

11,392

580

2,752

6,766

518,782

Fiscal 2022 (t-CO2)

513

64,15753,483

11,187

333,379

57,694

10,269

8,215

703

2,449

6,052

483,430

YoY change (t-CO2)-6.2%-17.3%-15.0%-27.6%+15.9%-16.3%-12.1%+38.7%-17.4%+12.4%+11.8%

+7.3%

65.2

66.6

40%
50%
60%
70%
73%
75%
80%
92%
reduction reduction reduction reduction reduction reduction reduction reduction

64.7

60

95%
reduction

100%
reduction

3.3
Fiscal2036

0.0
Fiscal
2041

53.6

50
40

39.1

30

32.6

20

26.1

10
0

19.6

17.6

16.3

Fiscal2027

Fiscal2028

Fiscal
2029

13.0
5.2

Fiscal
2020

Fiscal2021

ActualFiscal2022

Targets

Fiscal2023

Fiscal2024

Fiscal2025

Fiscal2026

Reduction target ratio (comparison with fiscal 2020)

Fiscal2030

Fiscal2031

Reduction required 1.5℃ scenario

In light of future changes in the market environment—including social conditions, government policies, and electric power company trends—we willpurchase energy with less environmental impact at stable and appropriate prices. We thus aim to achieve carbon neutrality as well as data center andoffice environments that minimize their environmental impact.

In light of the Japanese government’s carbon neutrality declaration (made in 2020) and the “Green Transformation (GX) Basic
Policy” (approved by the Cabinet in February 2023), we feel that domestic interest in global environmental issues, especiallyclimate change, has been increasing in recent years. On the other hand, the power supply situation has changed dramatically on a
global scale over the past several years, and power supply instability, caused by soaring fossil fuel prices and power shortages,
has become a major concern for the data center business, one of Group’s core businesses.
Despite such circumstances, I believe that the Group’s announcement of its Carbon Neutral Declaration in December 2022
was a major achievement. In an effort to achieve goals set forth in the declaration, TIS is on track to achieve 100% renewableenergy adoption in its main data centers and offices by fiscal 2026. Other Group companies will follow suit and consider plans to
introduce renewable energy in their data centers and offices. We also need to consider corporate power purchase agreements
Tsuneyoshi Ito(PPAs), which are not influenced by energy market prices, and the installation of solar panels on the Company’s own premises.
TIS Managing Executive Officer,
As a data center (DC) service provider, we recognize that one of our most important management priorities is to be able toDivision Manager of Corporatepurchase energy with low environmental impact at stable and appropriate prices while providing DC services to our customers.
Management SBU
We must also strive to reduce greenhouse gas emissions not only within our own Group but throughout the entire supply
chain. To this end, we will first work closely with each of our business partners on information cooperation, which we consider to be a society-wide initiative.
Interest in conserving biodiversity has been growing in recent years as an environmental issue separate from climate change. Although the Group is notdirectly involved in biodiversity issues, we recognize that we are indirectly involved through our customers’ businesses because we provide system development,
operation, and maintenance services to them. Therefore, we need to consider what initiatives the Group can take in the future.
The role that companies must play in addressing global environmental issues has become increasingly important in recent years. With this in mind, the Groupwill continue working to realize a sustainable society through its efforts to address global environmental issues, such as climate change and biodiversity, withoutslowing down its efforts to become carbon neutral.

Corporate Information/Data

Scope 1+2 emissions (kt-CO2)70

Rooftop greenery

Platform for Value Creation

GHG reduction targets and results in Scopes 1 and 2

Solar power generation monitor*We revised the SBT 2°C scenario to a 1.5°C scenario
in response to rising environmental awareness.
Under Scope 1 and 2, we have established GHG reduction plans for each fiscal year.
We achieved a 17.8% reduction in fiscal 2023 comparing to the base year (fiscal 2020) and are making steady progress. We will continue to manage our GHG emissions by tracking­projections versus actuals in order to keep on track to achieve our targets.
*The reason for the increase in emissions in fiscal 2021 compared to the previous year is due to the addition of data centers for calculation.

89

Growth Strategy for Value Creation

GHG emissions in Scopes
1 and 2In our data centers and offices, we are also promoting natural lighting, installation of small-scale solar power generation systems, androoftop greening.

Percentage of
Scope 1 and 2 at datacenters

TIS INTEC Group Value Creation

Scope 1
0.9%

Percentage in
Scope 3 by category*1 We intend to increase the rate of renewable energy use in the future.
*2 Due to exceeding the maximum amount of renewable energy use set at the time of
the contract.

Other initiatives

Ratio of GHG emissions in the Group (actual results for fiscal 2023)
Percentage in
Scope 1 and 2

We promote energy conservation in data centers and offices	We will promote the consolidation of group offices by region, theswitch to LED lighting, and energy-saving air-conditioning
equipment, among other environment-friendly measures. At data
centers, we will continue to improve energy efficiency, mainly in air
conditioning systems.

Adoption of renewable energy
Main data centers
Adoption timing
Adoption rate
Tokyo 1 DC
10/2022–
2%*1
Tokyo 4 DC
4/2023–
100%
Osaka 2 DC
4/2023–
100%
Osaka 3 DC
4/2023–
100%
Osaka 4 DC
4/2022–100%
Offices
Adoption timing
Adoption rate
Tokyo Head Office4/2022–
100%
Nagoya Head Office4/2022–
100%
Osaka Head Office
12/2021–100%
Toyosu Office4/2022–84%*2Kyushu Branch
1/2023–
100%
Dokita Daibiru
4/2022–
100%

Top Message

TIS INTEC Group’s Carbon Neutrality Declaration

Climate Change

Accelerate renewable energy adoption in data centersand offices	Six of the 14 data centers owned by the Group use electricity
derived from renewable energy sources. Additionally, six officelocations use electricity derived from renewable energy sources.
Through these initiatives, we plan to reduce the Group’s overall
GHG emissions (Scope 1 and 2) by approximately 40% in fiscal
2024 (versus fiscal 2022). We plan to expand the use of renewableenergy to data centers and offices that have not yet adopted it.

Introduction

Initiatives to achieve the Group’s GHG reduction targets

Initiatives to Address Climate Change

90

The Group endorsed the recommendations of the Task Force on ClimateRelated Financial Disclosures (TCFD). We disclose information regarding
our initiative progress in line with TCFD recommendations, strengthening
our measures for climate change.

Climate-related risks and financial impacts
Based on the correlation diagram, we listed the short-, medium- and long-term climate-related risks in the Group and assessed
the financial impacts in fiscal 2031.
Risk

Short
Term

Medium Term

1

Risks related to
GHG reduction—

Transition risk (Regulatory)
Rising energy prices
Regulations based onregional ordinances

Transition risk (Reputation)¥8,010 million Possible loss that could beaverted if difficult GHG
Trust of society eroded and clients distanc¥8,810 million reduction targets, such as
ing themselves from us because we arecarbon neutral status, areunable to achieve GHG reduction
achieved
Transition risk (Regulatory)
Higher costs due to carbon tax

2

Risks related tomethod of GHG
reduction—

Transition risk (Market)
Cost to introduce renewable energy

Transition risk (Market)
Higher costs due to GHG reduction andintroduction of renewable energy¥203 million

Potential additional­expenses that might beincurred by reducing GHG
emissions

3

Risk of physicalimpacts—

Physical risk (acute)
Heightened risk due tounusual weather events,
including floods

Physical risks (chronic)
Higher costs due to rising temperatures¥20 million

Possible additional expenses
caused by physical impactsof climate change

g Governance

TIS
Reports

Deliberation, reports

Issue, policy formulation

Problem solving

Corporate Sustainability Committee

Management Committee

Direction,
targets

Short term: immediate impact; medium term: 1–3 years; long term: 4–20 years

Climate-related opportunities
Based on the correlation diagram, we have also identified short-, medium-, and long-term climate-related opportunities.

Board of Directors

Understanding social trends, plan responds to issues

No.

Opportunity

Duration

Needs, Increasing in Line with Measures andTargets to Address Climate Change

2Greater need forsystem upgrades toimprove environment
for electric powercompanies and­redesign power
infrastructure

Short term Society urgently needs to transition from its reliance ontothermal power generation to renewable energy, with an
medium emphasis on hydro, wind and solar power, to reduce GHG
termemissions in the energy conversion sector, which accounts
for 40% of emissions in Japan. In conjunction with thisshift, demand is sure to rise for power transmission /distribution network rebuilds and upgrades suitable for asociety using distributed energy resources.

Drawing on business know-how amassed over 30 years of businesswith energy companies, we are indirectly involved in shaping electric
power infrastructures and promoting the decarbonization of energy
companies, driven by their embrace of DX in power generation andsystem changes based on legal revisions.

3

More opportunities to Short term We apply AI and IoT technologies used to automaticallyprovide IT services
tocontrol virtual power plants (VPPs), the pinnacle of energy
and solutions tolong term conservation and energy production, and achieve energy
address new needs
efficiency. We anticipate an increase in the need for
related to climate
various IT services that help to better materialize hiddenchangepower sources and for resilience services to address
climate change risk.

To make it a future strength, we are promoting various IT services
and we are in the process of planning and developing such services
through development driven by forward-looking investment andthrough collaboration and co-creation with stakeholders. We will
vigorously engage in initiatives to promote VPP solutions andnon-financial information reference and checking services forcompanies, and to set up businesses based on new technologies,
such as ­environmental value exchange and transfer certification.

Environmental division

Cooperation

Group companies (environmental division)g Strategy

Climate-related risks, financial impacts, and opportunities
Based on the correlation diagram between the Group and environmental issues, we organize risks and opportunities in the Group.
■Climate change (decarbonization, low carbon, and flood damage measures)

g Risk Management
CO2 emissions

Temperature rise

Torrential rain andsea level rise

Fossil fuelElectric power company(power generation)
OIL
Thermalpower plant

Electric power
Renewable energy

Solution: Data center and office consolidation• Transition to flood-resistant data centers• Efficient use of electricity through data
center/office consolidation

CO2 emission
reduction(Cost increase)
Initiatives

CO2 emission
reduction
Service provision
The Group: Grid-related business
Opportunity: Contribute to the further
expansion of renewable energy through thepromotion of P2P trading of clean power(non-FIT power sources) and the mass use ofrenewable energy through ICT, AI, etc.

Risk: Damage caused by flooding
Risk: Higher electricity charges due to rising temperatures
Risk: Increased costs due to use of renewable energy
Risk: Increased added expenses due to use of renewableenergyPromotion of CO2 emission
reduction measures

Service provision
TIG: Improving efficiency in mobility
Opportunity: Enabling the optimization of urban
planning and management systems through ICT-basedtransportation systems, etc., and promoting theeffective use of energy• Promoting telework andvideoconferencing to
reduce commuting• Reducing emissions through

MethodRisks parallelingapproaches

GHG reduction(Greenhouse gas
reduction)

2

ResultRisks that can be
decreased throughsuccessful ­reduction

1

Risk

Physical
impacts

3

Risk Management Methods

1 Risk related to GHG
reduction outcomes

Establish carbon neutrality target
Create roadmap

2 Risk related to GHG
reduction methods

Renewable energy market survey
Budget plan

3 Risk of physical impacts Completedof climate change
Budget plan (rising air temperature)g Metrics and Targets

TIS uses groupwide greenhouse gas emissions, renewable energy introduction ratio and financial impacts as metrics for evaluatingclimate-related risks. For evaluating climate-related opportunities, TIS uses market scale, sales and other factors as reference values to­assess opportunities.
Progress on the goals is also described in the Initiatives to Address Climate Change section on the previous pages.

collaboration with suppliers

91

92

Corporate Information/Data

Solar, etc.

The Group: (Office DC)
power consumption

We have classified and organized risks into three categories—risks that can be decreased by reducing greenhouse gases, risks related tomethods for reducing greenhouse gases, and risks that accompany the physical impacts of climate change—and are considering­approaches to deal with these risks.

Platform for Value Creation

We see expanding opportunities to provide data center services byraising the renewable energy ratio/energy efficiency status at data
centers under the TIS INTEC Group umbrella. A current goal is topush renewable energy utilization rate at data centers to 100% by
fiscal 2031. (We seek to push the renewable energy utilization rate
at TIS data centers to 100% by fiscal 2026 in tandem with efforts toconsolidate operations into environmentally conscious data centers.)

Growth Strategy for Value Creation

More opportunities to Short term More companies are taking advantage of on-premiseprovide data centertocloud setups and using renewable energy to power highly
services and cloudlong term energy-efficient hardware. Notably, we anticipate wider
services to meetdemand from companies that have set reduction targets
needs of low-carbon/­under RE100 and TCFD ­standards.
decarbonized society

Environment action plan, business strategy

Related business division

TIS and TIS INTEC Group Responses

1

TIS Energy Conservation Promotion Conference

Corporate sustainability promotion divisions

Financial Impact Overview

TIS INTEC Group Value Creation

Climate change policy is evaluated and deliberated by the Corporate Sustainability Committee as an environmental measure andactivity and reported to the Board of Directors. Climate change measures are evaluated and deliberated by the Management
Committee and reported to the Board of Directors.
We also setup the TIS Energy Conservation Promotion Conference and the Climate Change Business Working Group as structuresthat consistently leverage awareness of risks related to measures aimed at mitigating the impact of climate change.
In addition, we take a flexible approach by setting up working groups and assigning specific issues for each to address. The cross-­divisional Climate Change Response Review Committee was created in fiscal 2022 to identify and evaluate risks and opportunities
related to climate change in order to facilitate disclosure in line with TCFD requirements.

Financial Impact
in Fiscal 2031

Top Message

No.

The TCFD requires disclosure in four core areas: governance, strategy, risk management, and metrics and targets.

Long Term

Introduction

Information Disclosure in Line with TCFD Recommendations

E

S G

Social*Please refer to the following for initiatives to enhance the exchange of value between employees and the Company:
https://www.tis.com/group/sustainability/social/

With Employees

E S G

g Overview of Human Resources Strategy

We have set targets for the expansion of our human resources portfolio to mitigate potential future risks and secure the talent who
will help bring about structural transformation to fulfil the Company’s business strategies and support business growth.
The Group’s human resources strategy consists of talent acquisition, talent development, and talent deployment to successfully
manage its human resources portfolio, as well as an engagement strategy that serves as a common foundation underpinning theactive participation of diverse talent. We are also developing an HR digital transformation (HRDX) platform to better understand andanalyze the implementation status of these various strategies and support their execution.

Business portfolio
Connecting business strategy to human resources strategy

Human resources strategy
Human resources portfolio

TalentTalentTalentacquisition development deployment

HRDX to support strategy

g Human Resources Strategy Initiatives to Date
Group Topics
Before fiscal 2019
Group Vision 2026
OUR PHILOSOPHY	Published “Manifesto
for Human Resource
Strategies”

Talent development

Talent deployment
Talent acquisition
Talent development

Established education investment budget/
Started operational KPI deployment
Started allowing dual-employment
Open application programs
Employee referral program
Employee rehiring program
Introduction of 1-on-1 meetings

Engagement

	Group D&I Policy	Group Health &Productivity
Management Policy
Fiscal 2021

Fiscal 2024

93

Introduction of career plan sheets
Started regular career progression
meetings

HRDX
Engagement

Talent deployment

Started operation of Group Human
Resources PF

Talent development

Growth Support System

HRDX

Talent acquisition

Building of alumni network

Engagement

Talent development

Started Career Frame
Started DX Basic Skillset “Plus One”
training

Engagement

Renewal of Talent Management System
Reemployment program until age 70
Reduction of prescribed working hours (7.5 hours)
Implemented biannual promotions
HRBP system started
Started providing HR Report
Started survey feedback and organizational
development
Started executive mentoring for female employees
Started teleworking operations
Started measures regarding transfers away fromhome
OP Competency Assessment
New personnel system (Must/Will/Can)
Job type system for management ranks

HRDX
Creating people and organizations that
continue to create new value
Business organization

	HRDX Functionality to Support Human
Resource Strategies
We are developing an HRDX platform tomeasure the results of our human resource
strategy and realize the value of our humanresources. We collect data on human resourcesin a centralized manner and use HR reports tounderstand our current state and improved
future state (As-Is and To-Be), and support theexecution of data-driven business strategies.
HRDX	HRBP Functionality Accelerates the Effectiveness of Our Human Resources
Strategy
We support management of the business in terms of medium- to long-term humanresources business strategies and structure. HR business partners (HRBPs) discuss issues
with senior management while utilizing HRDX in line with individual business characteristics and organizations. Together, they undertake various activities such as humanresource strategy planning, recruitment, training, appointment, and deployment, as
well as organizational development.

HRBP Human Resource Business Partner
HR report

HR dashboard

Business management support by HRBP
Strategy:	Planning and promotion of human resources
strategy linked to business strategy
Issue
Evaluation
identification
Recruitment:	Planning and promotion of recruitment plans,
onboarding
Business organization HRBP
Training:	Planning and promotion of development plans,
Relationship built on trust
skills and career analysis
Implementation
Consideration
Deployment:	Right person in the right position, talent rotationof measuresof measures
Culture:	Increased engagement, organizational
development
Understanding
the current situationg Human Resource Portfolio Management Using “Career Frame”

TIS introduced a career development model called “Career Frame” effective April 2023 to adapt to the new business model andto create multilayered career paths for employees. Using Career Frame, we define the human resource requirements, levels andnumbers required to achieve the medium-term goals of the business. We also identify current gaps, and leverage recruitment,­training, and deployment for business and expansion.
Employees utilize Career Frame to chart theirmedium- to long-term career paths, allowing themto develop expertise in multiple areas and assume
the roles required of them. Employees are not limited
to one career path, but rather are encouraged toview their careers as several multilayered paths, andto seek to improve their own abilities and expertisethrough education and work experience.

ASIS

TOBE
Human resource
requirements to achievebusiness goals
Education and experience	Recruitment, deployment,
and appointment

Structure of Career Frame
Field (Area of expertise)Stage (Role)
Sales

Data Scientist

Management planning

IT Consultant

Producer

Project Manager

UX Designer

IT Architect

Business Consultant

Application Specialist

Business Function
Consultant

IT Specialist

Stage 4
(Industry Leader)Stage 3
(Representative)
Stage 2 (Supervisor)
Stage 1-2
(Member)Stage 1-1
(Learning and Practice)94

Corporate Information/Data

Fiscal 2022

Talent development

Telework program (elimination of limits)
Flexible working hour program (no core hours)
Discretionary work system and annual salary system
Interval system between shifts (11 hours)
Selective retirement age up to 65
Started Smart Work Allowance (deemed overtime
allowance)

HR service provision

Feature 2: Establishment of a Foundation to Support the Execution of Human Resource Strategies

Building an environment that drives results(HRDX to support sustainable engagement strategies and tactics)
Started employee awareness (engagement) survey
Set up a promotion guide for female employees
Started division head training for female employees
Abolished dress code
Telework program (within agreed limits)
Flexible working hour program (with core hours)

HRBP

HR Service Delivery Function
We design HR services (recruitment, deployment, promotion, labor relations,fringe benefits, etc.) based on human resource strategies and business­characteristics, and provide services to employees.

HR dataEngagement

Human resource strategic planning

Human Resource Strategy Planning Function
After identifying the key human resource issues for the Group, we formulate theoverall human resource strategy and policies, incorporate them into specificmeasures, and roll them out to Group companies.

Platform for Value Creation

Fiscal 2020

Improving the value of human capital(Talent acquisition, talent development, talent deployment)

Human capital management system

Growth Strategy for Value Creation

Creating an Environment that Brings out the Best Outcomes
Sustainable engagement
We aspire to create a culture that engages with society, takes on new challenges,
and drives change by understanding who our people are, drawing out the full,unique potential of every individual, and boosting their levels of engagement.
HRDX to support strategy
We make use of human resources data to better understand our current­circumstances and where we would like to be—the “As Is – To Be” model—andto support the execution of data-driven business strategies.

Feature 1: Smooth Separation of Strategic Planning and Service
Functions

TIS INTEC Group Value Creation

Sustainable engagement

Strategies that Contribute to the Enhancing the Value of Human Capital
Talent acquisition
We employ diverse human resources regardless of gender, age, and other­attributes to be able to respond to changes in the external environment andcontribute to sustainable business growth.
Talent development
We foster self-driven professionals by supporting the career advancement of all
employees based on our human resources portfolio.
Talent deployment
We perform human resource analyses and devise deployment plans to expedite
human resource redeployment and reskilling, and to encourage employees totake on new challenges.

In the Group’s sustainability management, “development of diverse talent” is positioned as one of the medium- to long-term­materialities. In response to direction provided by management regarding risks surrounding human resources and measures to­mitigate these risks, we are working to incorporate measures into human resource policies and disseminate them throughout thebusiness through the four functions of the human capital management system.

Top Message

Business strategy

g Human Resource Strategy Development and Promotion System

Introduction

Aiming to Realize a Human Resources Strategy that Supports Management

Dialogue

Career Development Support

Employees use Career Frame to create multiple career plans on theirown and share them with their managers. Managers utilize daily
1-on-1s to provide ongoing support in achieving goals.

Career plan

Individual career plans are registered in the Talent Management
System (TMS) along with work history, goals, and performance
review results, and are used for work assignments and various
growth opportunities.

Goal management
sheet

Growth Support System
We have a Growth Support System in place to help employees develop
a broader perspective and sensitivity to changes in society. Vacations,
temporary leaves of absence, and shortened working hours are available
for participation in outside activities.
Learning

Dual‐employment[Vacation/leave of absence]
10 days a year
Total 1 year

[Leave of absence]
Total 2 years[Leave of absence]
Total 1 year

[Shortened working hours]
Total 2 years[Shortened working hours]
Total 2 years

TMS

Training Protocols

The Company encourages study and learning that is
tailored to an individual’s career aspirations as well as
in line with DX specialties required for current duties
and interests shared across the business.
External course
Plus OneInternal
courseDX Specialty
Shared acrossthe entire businesses

Location flexibility

Improvements to the office environment

For work–life balance (shortened working
hours and extended leave)

Telework program

IT infrastructure

Zero trust

Smartphone

No core hours

	Seeking prior agreement for transfers awayfrom home	Removing need for transfers away from homethrough the use of telework

Internal simple
notification service (SNS)Office	Introduction of hot-desking	Satellite office	Installation of multipurpose areas

We regularly conduct questionnaires among employees about their preferred work styles, encouraging them to exchange theiropinions with management with regard to the direction we should take. Since the COVID-19 pandemic, employees have establishedtheir own work styles according to their lifestyles and values. We respect the diversity of our employees, and we pursue a responsive
management style as a means to foster a culture of collaboration and thereby continuously revitalize our organization.
Trueautonomy

95

Strive to achieve both respect for diversity
and the sustainable revitalization of the organization
ChoiceBe in a state of flux

Combine23.8%

50 yearsor olderBiannual promotions
	Providing outstanding employeeswith early opportunities
	Biannual promotions and gradeskipping

22.8%

Smart work allowance	Pay with a fixed overtime allowance	Reduced overtime and more time forliving and learning

53.3%

Age structure of TIS anddomestic consolidated subsidiaries

Promoting Gender Diversity
In the Group, 28.7% of employees are female, but just 11% ofmanagement positions are held by women. The gap in compensation
between men and women is due to differences in grade distribution
and benefits, resulting in a gender pay gap of approximately 20–30%.
We will work to correct gender disparities by promoting women tohigher positions with more authority, and to proactive job assignmentsthat contribute to faster career development.

30.0%

Communication measures
Assuring office diversity
Realization of preferred work styles
	Human resource programs that
adapt to change

28.7%

About 20–30%

Correction of
the grade
distribution gap

20.0%

Correction ofcompensation
disparities

11.0%

10.0%
0.0%

Participationof young
employees

Ratio of female
employees

Ratio of females
in managerial
positions

Gender pay gap

Women’s participation indicators
for TIS and domestic consolidated subsidiaries

Promotion of Health and Productivity Management
We promote health and productivity management, believing that it is an important management issue for employees to maintainhigh energy levels at work in order to continue to perform well. With the goal of improving the quality of life of our employees, wehave established the Group Health and Productivity Management Policy and are working to improve job satisfaction, mental andphysical health, and life skills.
Focus on Social Well-Being
We support employees who are willing to make social contributions and promote Group-wide efforts to become a “highly
motivating company to work for.”TIS has focused on social health and HRBP-led organizational
development to improve employee vitality and the value
created by the organization. In fiscal 2023, we are collaborating with the Kaika initiatives to foster psychological safety, andare promoting its dissemination into the workplace with theaim of creating an organization where employees are willing
and able to express their opinions and continue to achieve
unprecedented results.

Organizational development

Corporate Information/Data

Minimum working hours per day: 2 hours
Start time (5:00-20:00)
End time (7:00-22:00)

30–49
years oldg Job Satisfaction and Well-Being
Web conferencing
facilities

Measures to eliminate transfers awayfrom home

20–29
years old

Authentication

Full-time Telework that does not presume
teleworker coming to the office
For employees
For employeeswith disability undergoing gendertransitioning

Selective retirement system
	Choice of retirement age:60, 63, or 65
	Work under similar conditions
Participation
after age 60
of olderElder employee system
employees
	Renewal of contract every year after
mandatory retirement at age 65
	Work under the same conditions as
before retirement

Psychological safety

Goal
Relationship

Autonomy andgrowthProcess

Vitality

Platform for Value Creation

For medical
treatment

Telework

In principle telework
Coming to the office as needed

We emphasize the ability to play an active role regardless of gender and age as a theme to be addressed over the medium- tolong-term by the Group as a whole.

Growth Strategy for Value Creation

Promoting flexible working hours

Forlong-term care	Implementing training for all executives and managers on Iku-Bosses (inclusive leaders) and unconscious bias
	Implementing evaluator training and 1-on-1 training to enhance leadership skills for all executives and managers
	Promoting understanding and support for LGBTIQ+ and other social minorities and building out programs

Promoting Age Diversity
The percentage of employees aged 50 and over in the Group exceeds 20% and is expected to increase in the future. In addition tocreating an environment that allows older employees to take on new challenges by making use of the skills they have cultivated over
the years, we also provide young, talented employees with opportunities to take on new challenges and assign them to new
positions as early as possible.

To increase flexibility in working hours and location, we encourage a combination of telework and flextime without core hour
restrictions, and provide a seamless IT environment to support this.

For childcare

Inclusion Means Management that Integrates the Value of Each Individual
We are moving forward with a shift to management that harmonizes and aligns diverse humanresources with the Company’s objectives.

Improvement ofskills required for
current positiong Flexible Work Styles to Encourage Employee Independence and Autonomy

For employees
undergoingfertility treatment

	Hiring experienced personnel:	Hiring personnel with the expertise and experience necessary for business growth	Women’s participation: 	Incorporating diverse perspectives into various decisions and choices	Support for growth: 	Providing opportunities for experiences that enhance individual diversity

g Key Themes Common to the Group

Relevant Deployment Strategies(1) “10 years, 3 businesses”: 	Employees are encouraged to gain experience in three different businesses by their 10th year of
employment.
(2) “5-year rule”:	Employee are encouraged to consider changing their position if they have been in the same position
for five years or more.

Flexible use of office andtelework

Diversity
×
Inclusion

Diversity Means Ensuring Diversity of Human Resources
In addition to the diversity of the organization as a whole, we also emphasize efforts to enhance thediversity of experience of each employee.

Skill development
tailored to career
aspirations

Policy of Internal Rotation
We have devised and adopted systems to optimize staff deployment to further the professional development of employees throughdiversifying their work experience. We also conduct open recruitment twice a year to encourage employees to take on self-directedchallenges.

Casualworkers

The development of diverse talent is a key management theme for the Group. Through human resource management that leverages
diverse perspectives, we are creating an organization that benefits from ideas generated by the diverse personalities, values,
sensibilities, expertise, and experiences of each and every employee.

TIS INTEC Group Value Creation

Social contribution

Career Frame
Training transcript
Work history
Goals and evaluation
Assignment request, etc.

g Diversity & Inclusion

Top Message

Diverse Work Experiences[Shortened working hours]
Total 2 years

1-on-1career interview

Introduction

g Directed Career Development

	
Kaika: Creating businessresults	
Kaika: Growth of people
and teams
96

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S G

SocialWith ClientsE

S G

SocialWith Business Partners

The TIS INTEC Group holds an annual TIS INTEC Group Business Summit as a forum to introduce its services and initiatives that make
E use
S ofGadvanced technologies and know-how to realize a sustainable digital society.1
good
In addition to the keynote speech entitled “Sharing Life: A New Way of Living in a New Society” by Anju Ishiyama, who serves asan evangelist for the sharing economy for the Digital Agency, our Group companies presented a total of 35 sessions (presentations)and 56 solutions (online catalogs).
Each session not only introduced our own services and solutions, but also provided examples of co-creation, where we havegrown together with our clients. With approximately 3,400 viewers2 and 9,000 session views3, the event clearly provided manyclients an opportunity to learn about the Group’s services.
We will continue to foster communication with our clients so that we can provide them active support with a view to solving theissues they face and, beyond them, those faced by society.

We hold events and social gatherings for our business partners every year to help them better understand our management policy
E various
S Ginitiatives and measures we have instituted during the year.
andWe have previously held similar events in an online format, but, in response to requests from business partners, have renamed theevent Organizational Strategy Partner Forum 2023 and plan to hold it in October 2023 a face-to-face format with our leadershipteam for the first time in four years.
The theme of this event is “Reaffirming the ties among our strategic partners,” and its aim is to increase value exchange
through collaboration among our business partners and the Company’s business units, and also to reassert our commitment tomutual growth.
We will continue to listen carefully to feedback from our business partners and will seek to expand business and increase­satisfaction through nurturing deeper collaboration with the Company.

1 The event was held in July 2023 in an online format.
2 Total number of viewers for online distribution + on-demand distribution
3 Total number of session video viewsg Business Partner Satisfaction Survey

83%
81%
79%
74%

Fiscal
2020

Fiscal2021

Fiscal2022

Fiscal2023*The survey covered TIS Inc.

The survey was conducted online between August 19 and
September 20, 2022 among all business partners with whom
we conducted transactions in fiscal 2023.

g Promotion of Collaboration with Overseas Partners

Corporate Information/Datag Partnership Building

We have identified the areas we will focus on to build new partnerships by promoting cooperation, co-existence and co-prosperity
with our supply chain partners and value-creating businesses.
https://www.tis.com/group/sustainability/policies/multi-stakeholder/g Promoting a Sustainable Procurement Policy

The Group believes in the importance of working together with stakeholders throughout the supply chain. It is promoting thedissemination of procurement guidelines based on its sustainable procurement policy.
https://www.tis.com/group/sustainability/policies/procurement/

97

Platform for Value Creation

We cooperate with overseas partner companies to support TIS’
business growth. We continue to strengthen our ties with several
leading IT companies, including in China, regularly engaging in
dialogue at management level to discuss issues relevant to theCompany and its overseas partners. Due to the COVID-19
pandemic, we have been unable to make in-person visits tooverseas partners, but from June 2023 we were able to resume
our face-to-face meetings with local leadership teams.
In tandem with the growth of our business, the number of
person-hours logged and the amount of outsourced work havebeen steadily rising, and our use of offshore resources has also
been diversifying. In addition to conventional offshoring activities
that seek cost advantages by using overseas companies, which constitute the majority of our offshore operations, we have begun tostrengthen in-country support for the Japanese clients in each local market. As a result, we are beginning to see benefits in terms ofbetter support for upstream processes such as requirement definition, entry into service development using agile methods, andlocking in cutting-edge tech talent such as those skilled in AI, XR, and blockchain.

Growth Strategy for Value Creation

We conduct an annual Client Satisfaction Survey for clients with whom we have an ongoing business relationship. The survey is used
as a point of reference to determine activities toward self-improvement from a client perspective.
In the survey for companies who have accounts with us, the ratio of respondents who considered us an irreplaceable business
partner, one of the overall evaluation indicators, was slightly lower than last year. On the other hand, as in the past, we continue toreceive high marks for our technical capabilities, particularly for our ability to define requirements and design systems, on-site
responsiveness, and for our ability to meet deadlines. We understand that it is becoming increasingly important to make proposals
that are one step ahead of the growing expectations of clients—and society—in respect of digital transformation, and we will
strengthen proactive initiatives.
Since fiscal 2022, a similar survey has been conducted for
Percentage of respondents who consider us an irreplaceable business partner
the entire Group as part of the promotion of Group-wide(4 or higher on a 5-point scale)activities to improve client satisfaction. The percentage of
respondents who considered us an irreplaceable business
72.7%
partner for the Group as a whole was approximately 50%,
71.7%
69.6%
69.0%
68.2%
indicating that there is still room for improvement in deepening
our relationships with clients.
We don't just review the survey results, we also engage in
53.9%
52.7%
dialogue with our clients based on the survey results, to gain amore in-depth understanding of their responses, and their
future requirements and expectations, allowing us to formulate
more specific improvement plans, and undertake appropriate
FiscalFiscalFiscalFiscalFiscal
2019
2020
2021
2022
2023
­continuous improvement activities.
We also hold information-sharing meetings with GroupTIS parent
companies regarding the survey results and improvement
TIS INTEC Group
activities to stimulate improvements throughout the Group.
Survey scope:
In the survey for companies to whom we provide serviceSurvey form sent by email or post, with responses by poststyle business, there is an uptrend in the level of intention toor online.
continue doing business with us, indicating that respondents
The survey period was from October 3 to October 31, 2022.
have high expectations for our service-style business.
We will continue to take client feedback seriously and will
strengthen our front line, the touchpoint with our clients,
helping them solve social issues as a true business partner.

Percentage of business partners who are satisfied with TIS’ business andtheir relationship with the Company (4 or higher on a 5-point scale)

TIS INTEC Group Value Creation

g Implementation of Client Satisfaction Survey

We conduct an annual Business Partner Satisfaction Survey togain feedback on changes in the environment, trends in guidelines and pricing structures, as well as their level of satisfaction
with us.
We are including more detailed questions than in previous
surveys in order to better understand our key partners’­circumstances and the issues they currently face.
The survey results showed that while business continuity,
co-creation, our ability to handle large-scale projects, and our
proficiency in policy-making were cited as positive attributes of
TIS, clients found issues with our project management andmade proposals for structures that might make it easier to workwith TIS. Taking this into account, we will strive to create anenvironment in which we and our partners can make proposals
that benefit both parties.
These surveys enable us to better visualize the expectationsof our business partners and the issues they face, and help
forge a path for continuous improvement to achieve greater
value exchange and expanded collaboration, thereby boosting
their satisfaction.

Top Message

g Organizational Strategy Partner Forum 2023

Introduction

g TIS INTEC Group Business Summit 2023

98

E

S G

SocialE

S G

With Shareholders and Investors

SocialWith Local Communities and Society

4 times

Other briefings for analysts and institutional investors

Twice

Small meetings for analysts and institutional investors

One business briefing, and one extraordinary briefing for timely disclosure

257 times Of these meetings, 151 were for overseas investors. Total coverage 464 companies

Small meetings by President

Twice

Overseas roadshows

Twice

IR conference for individual investors

Twice

Sell-side analyst: once, buy-side analysts: once

Services for solving social issues
Low-carbon products and services

g Social Contribution Activities at TIS Inc.

TIS endeavors to contribute to a society where everyone can enjoy the benefits of digital technology principally through the­following activities.
(1) Activities to support future users
We undertake activities to enhance the ability of children—the next generation—to use digital technology.
(2) Activities to disseminate the benefits of digital technology throughout society
Our support for infrastructure projects is one of the ways in which we aim to reduce the number of people who do not have accessto digital technology due to economic and location factors.
(3) Activities to mitigate the negative impacts of digital technology on society
We put measures in place to prevent the misuse of digital technology and help people having difficulty adapting totechnological change.

Kamikochi Regeneration and Safety Project (Matsumoto City, Nagano Prefecture)

Voting Rights

Contents

Setting dates for the General Meeting of Shareholders
that avoid the peak day

To enable as many shareholders as possible to attend our General Meeting of Shareholders, weavoid dates when most other companies hold their meetings. The most recent General Meetingof Shareholders was held on June 23, 2023.

Voting by electronic means

We have adopted an electronic voting system that allows shareholders to exercise their voting
rights via the Internet (PC, smartphone or mobile phone).

Corporate Information/Data

Early notification and distribution of General
Meeting of Shareholders

As to the notice for the 15th Annual General Meeting of Shareholders held on June 23, 2023,
based on Company policy to post the convocation notice about one month prior to the date of
the General Meeting of Shareholders, we uploaded the notice on our corporate website and
TSE website on May 19, 2023. And based on Company policy to distribute the convocation
notice at least three weeks before the General Meeting of Shareholders takes place, theconvocation notice was sent out on June 1, 2023.

As part of its activities to disseminate the benefits of digital technology throughout society, the Company is supporting the
Kamikochi Regeneration and Safety Project through donations from the corporate version of the Hometown Tax Payment
System, which is uniquely Japanese tax system, to ensure a stable supply of electricity by burying power and optical cables,
strengthening disaster prevention systems, and creating a safe and secure usage environment. The burial of power andoptical cables will help Kamikochi evolve into a safer tourist destination, utilizing digital technology to collect and provide
real-time information quickly and reliably.
Through activities such as these, the Company is helping to reduce the number of people who aren't benefiting fromdigital technology for geographical reasons, thereby contributing to the creation of a society in which no one misses out.

Platform for Value Creationg Initiatives to Revitalize the General Meeting of Shareholders and Facilitate The Exercise of
Initiatives

Growth in
demandParticipation in electronic voting platforms and otherWe participate in the voting platform for institutional investors operated by Investor
initiatives to improve the environment for institutional
Communications Japan (ICJ, Co., Ltd.).
investors to exercise voting rights
Access to Notice of Convocation (full text) in English

We started to post the convocation notice in English (full text) to provide further information to
overseas investors.

Other

To prevent the spread of COVID-19 and to facilitate attendance by all shareholders at theGeneral Meeting of Shareholders, without disadvantage to regional shareholders, and provide
greater opportunity to observe the proceedings, we live-streamed the event.

99

Growth Strategy for Value Creation

Results briefings for analysts and institutional investors

Contents

Workforce

Earnings

TIS INTEC Group Value Creation

Frequency

Strengthening
human capital

Fringe benefits
Social credibility
Funding

Top Message

IR events in fiscal 2023

Value exchange through business activities

Improvement of
the usage operating
environment
Enhancing
digital literacy

Increased usage opportunities

Main areas of interest to shareholders:• Progress in structural transformation to enhance corporate value• Status of initiatives for business growth, improvement in profitability and the outlook for the future• The importance of investment in human resources—the most vital management capital—and Company recruitment policies• Financial strategy in relation to capital efficiency and shareholder returns

Expansion of
the fan base

Clients

In fiscal 2023, with the leadership of the President and CEO, we pursued engagement with active management-type shareholders
in Japan and overseas, mainly in the U.S., Europe, and Asia. Participants are both analysts and fund managers, and their active
management style are diversified centering on growth and value trading. The main themes and other pertinent feedback are sharedthrough quarterly reports to the Board of Directors, are disseminated for discussion throughout the Company, and are used to review
management strategies and formulate management plans.

Social Contribution Activities
Support for a society where everyone can enjoy the benefits of digital technology

TIS INTEC Groupg Engaging with Shareholders

E Group
S Gwill accelerate value exchange with local communities by promoting social contribution activities thatThe
support the realization of a society in which everyone can enjoy the benefits of digital technology. We expect thecontinuation of these activities to lead to an increase in demand for our services by strengthening our humancapital through the expansion of our fan base and increasing opportunities to use our services.

Employees andpartners*Please refer to the IR policy at https://www.tis.com/ir/other/policy/

Social Contribution Activities

Increase in future employees
and excellent partners

TIS proactively engages in constructive dialogue with shareholders based on its IR Policy* in order to contribute to the Company’ssustainable growth and the enhancement of its medium- to long-term corporate value. In addition, the Company is developing
E S G
processes to promote further dialogue with shareholders. While the director of the IR Department supervises the relationship withshareholders, the President, executive officers, and the IR Department all deliberate on how best to address issues and take­appropriate actions. The IR Department shares information with relevant departments promptly and seeks to capitalize on theirrespective specialist expertise to support more meaningful dialogue with its shareholders.
The Company will seek to broaden the channels of communication with its shareholders through individual face-to-face andtelephone interviews, and by holding business results briefings and other more intimate meetings. Furthermore, in addition to­information disclosure—the foundation for meaningful dialogue—the Company will further develop the content of the Integrated
Report, which we see as a valuable communication tool.
TIS will give serious consideration to opinions put forward by capital market participants such as shareholders, investors andsecurities analysts within the Company through reports and briefings to the Board of Directors, and will use them to review the
Company’s management strategy, among other purposes.
TIS remains acutely aware of the importance of fair disclosure and manages its internal information appropriately in accordancewith the Rules for Prevention of Insider Trading.

Introduction

g Constructive Dialogue with Shareholders* For more information on other activities, please refer to our website.
Social contribution activities: https://www.tis.com/group/sustainability/social/community/
100Quality Control and Production Innovation

The TIS INTEC Group strongly recognizes the role that information systems play as social infrastructure. For this reason,
we work continuously to improve our quality, productivity and technical capabilities.
By always providing high-value-added services while responding flexibly to diversifying business formats, solutions,development techniques and technologies, we aim to entrench TIS INTEC as a “trusted top brand that epitomizes
quality” and realize the mission set forth in OUR PHILOSOPHY.
g Trinity: Original Quality Management System Based on ISO 9001 and ISO 20000

https://www.tis.com/group/csr/report/social/quality/g Significant Reduction in Development Losses

The following four activities were specifically targeted for development loss reduction measures.
Project review activities (proposal review, process review) by the TIS System Development & Quality Management Innovation SBU
Monitoring activities for early detection of high-risk projects
Measures to improve project management capabilities (education, knowledge development)
Fostering psychological safety through cultural transformation

Review

Project

Project risk
check sheet

2

3

4

5

Strengthen technical capabilities

Project screening
Proposal review
Process inspection

Improved know-how
and tool sharing

Sharing and lateraldevelopment ofoffshore promotion
measures

Monitoring and early
detection
Bolstering project
management
Culture reform,
fostering psychologicalsafetyCrisis management
activities
Review, prevention
measuresCrisis management
educationPublication of manual

Utilize Fintan* and activate feedback*System development know-how/tool aggregation site
Revitalize canal**Technical support and knowledge share among Group
employees

Shared use ofoffshore BP

Tech Lead Team activities*Multiple technology platform, canal, supported by 150
senior engineers

Events, such as
offshore colleges

Revitalize UNIITA*Develop architects across the organization, reviews
technical risks under high-level architects

Quality forum
Seminars ofservice-style businessResults in fiscal 2023, ended March 31, 2023
TIS companywide review proposals: 60		Group Technology Enhancement Committee meetings: 12		Development losses and loss rate

Enhance profit margin(100 millions of yen) (TIS INTEC Group)(TIS INTEC Group)

TIS system development meetings: 248
Number of Group screenings: 222

Offshore outsourcing contracts(1,000 work months)

18.5

17.8

Gross margin on development(TIS parent)(TIS parent)

19.6

15.3

0.7%

(1) Training map

4.0

0.4%

0.2%
Fiscal2022

Fiscal2023

Fiscal2024(estimates)

Fiscal2022

Fiscal2023

Fiscal2024(estimates)

Fiscal2022

Fiscal2023

Fiscal2024(estimates)

Fiscal2022

Fiscal2023

Fiscal2024(estimates)

The gross margin on development rose through the employment of various measures

Qualityenhancement

Project health diagnosis

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1) Measure andbe aware

Fostering psychologicalsafety2) Understand and learn

Cultural transformation

Bolstering psychological safety and additional diagnostic measures toprevent recurrence of unprofitable projects

Ikuo Shimizu
TIS Managing Executive Officer,
Division Manager of System
Development & Quality
Management Innovation SBU

Preventing unprofitable projects is an important management issue and responsibility, and we are promoting various initiatives
to ensure this. In addition to our traditional approach to development projects, in fiscal 2023 we focused on fostering psychological safety to enhance the quality of relationships of our teams while ensuring safety. This proved to be a success, as wewere able to prevent unprofitable projects of significant value (forecast: ¥1 billion; actual ¥400 million). Going forward, we willcontinue targeting steady progress in this area.
To reiterate, quality is essential for not only preventing unprofitable projects but also exchanging value with clientcompanies and their end users through provision of high-value-added solutions. Moreover, the level of quality demanded of us
is increasing as society, customer needs, business models, and development methods evolve. To meet the expectations of our
stakeholders, therefore, we will continue working relentlessly to deliver innovations. By also improving value exchangeability,
we aim to become a “trusted top brand that ­epitomizes quality.”

Corporate Information/Data

3) ActI found areas for improvement.
!"#$%&'()*

Monitoring

Offshore promotion

10.0(2) Senior project manager training

Fostering psychological safety

Multifaceted and objective monitoring andevaluation of project status

1

Improvement ofexecution skills
Knowledge
acquisition
Fostering anappropriate mindset

End-to-end
Upstreamprocess quality process exit
assessment
criteria

Off-hours monitoring

101

Project manager
level

Development of project
management talent
Knowledge sharing

Observer for divisional assessments

Project management evaluation

Enhancement innovation

Platform for Value Creation

Organizational level

Deficit eradication

Further improve project management capabilities
through talent development and knowledge utilization

Company-wide risk monitoring andmanagement

Process review

Promotes sharing and effective use ofeach company’s activities in order tostrengthen the Group’s developmentcompetitivenessImprovement of project management capabilities

Risk monitoring and management of key projects at a Company-wide level
and implementation of Company-wide countermeasures

Proposal review

Undertakes the following activities to improve Group quality and productivity:● Establish PDCA cycle for setting and achieving KPI targets and monitor status of initiatives● Promote sharing and lateral development of issues, countermeasures, andknow-how of each company

Growth Strategy for Value Creation

Development losses were significantly reduced for the Group as a whole, to ¥400 million in fiscal 2023, compared to ¥1.85 billion in
fiscal 2022.

Group Technical Reinforcement Committee

TIS INTEC Group Value Creation* In fiscal 2022, a number of our service-development offices were certified under ISO 20000, the­international standard for IT service management.
* For more details:

Group Quality Executive Meeting

Top Message

We strive to provide customers with optimal services based on our policy of“promoting improvement by making use of onsite ingenuity.” At sites, we employ
ingenuity to tailor each business model appropriately while applying processes,
techniques and tools in project management engineering service management.
We are expanding the scope of coverage to include not only scratch development but also a wide variety of business formats.

The TIS System Development & Quality Management Innovation SBU and the Technology & Innovation SBU are spearheading the following activities aimed at improving the quality, productivity and technical capabilities of the entire Group and harnessing Group synergies.

Introduction

g Activities Aimed at Improving Standards Across the Entire Group

Aiming to Be a “Trusted Top Brand that Epitomizes Quality”

102Intellectual Property

Research and Development

Creating Innovation that Will Lead to Future Corporate Value

Over many years, the Group has strengthened its organizational capacity by accumulating technologies and knowhow
cultivated in collaboration with clients, business partners and employees to develop various services to solve issues
faced by clients and society.
Intellectual Property

g Development of Advanced Software and Infrastructure-Related Technologies

Wide range of service menus

g R&D Focusing on Core Technologies that Will Form the Basis of Future New Businesses

R&D /corporate venture capital
R&D(Fiscal 2023)¥3.1 billion

Identify social needs, incorporate technologies thatwill solve social issues, and leverage themas a wellspring of growth for the Group

Patents andother IP

Organizational capabilities to support business
Production innovation
framework

Consulting
methodology

Business development
methodology

g Wide Range of Service Menus

The Group offers a broad menu of services, with approximately 500 differentiated services in Japan.
In fiscal 2023, the Group’s strengths in the settlement area—such as the incorporation of a credit processing service as one of theservices under the PAYCIERGE total payment solutions brand—have resulted in further growth by combining our knowledge of corecredit operations and systems.

Given the dramatic escalation of competition in the technology environment, we believe
it is important to identify social needs and incorporate technologies that can help solve
social issues into our core business. We are focusing on R&D in three areas.
1.	R&D into technologies that contribute to the realization of a sustainable society andoffer solutions to social issues*
2.	R&D focusing on fundamental technologies that will form the core of new b­ usinesses
in the future
3. R&D into advanced software production and infrastructure-related technologies(Millions of yen)

2,784

3,104

3,300

1,789

Fiscal2021*XR (extended reality): A collective term for various virtual space technologies such as VR (virtual reality), AR (augmented reality) and MR (mixed reality).

g Initiatives for Business Implementation of the Latest Technologies

We are also supporting business start-ups engaged in new technologies such as blockchain and Web 3.0 technologies.
Generative AI has seen explosive user growth recently, and we are promoting initiatives to improve the efficiency and sophistication of engineering and internal workflow in this area, in addition to exploring business applications. In July 2023, Dialog Play, an
AI-powered chatbot creation service, was engineered to work with the Azure OpenAI Service. A beta version of Dialog Play can use
OpenAI’s generative AI models such as ChatGPT and GPT-3/3.5/4 to enhance its FAQ search and answer functionality.
g Lab and Showroom to Promote Business Co-Creation

Fiscal2022

Fiscal2023

Fiscal2024(estimate)

The TIS Digital Innovation Center at Toyosu office consists of a co-creation lab for research and demonstration of new technologies,
including 5G, and a showroom where visitors can experience the latest digital technologies. It is also used as a base for co-creation,
including technology verification through the Tokyo 5G Boosters Project and Be Smart Tokyo, which are promoting smart ­services,by startups supported by the Tokyo Metropolitan Government, and as an exhibition space for service models.

Platform for Value Creation*We have identified financial inclusion, urban concentration/rural decline, low-carbon/decarbonized society,and health concerns as social issues to be addressed and are conducting R&D with the aim of developing
solutions to these as part of our core businesses over the medium to long term.

Changes in R&D Expenses

Let’s go find your favorite place.

Growth Strategy for Value Creation

g R&D and Corporate Venture Capital Initiatives

TIS INTEC Group Value Creation

Quality Management
SystemThe Company’s R&D focuses on XR* research, multi-level edge computing,large-scale processing using quantum and classical computers, and datalabeling for AI. Each of these technologies is subject to R&D as a differentiating technology for new businesses, while fundamental technologies
are being promoted through industry–academia collaboration with­universities and research institutions both in Japan and abroad.
A joint XR research project is being undertaken with the University ofTokyo and Tokyo City University, with the goal of producing new remotecommunication technology for social applications. Using the knowledge
gained from this joint research, we have released BURALIT, a live-action
sightseeing Metaverse app, and XR Pay, which allows users to build virtual
stores, complete with payment functionality.

Top Message

When it comes to software production technology, to bolster our ability to respond to the speed of business transformation at clientcompanies, we are strengthening our capabilities in agile development, UI/UX design, Dmobile applications, and generative AI, as
well as developing technologies to improve development productivity.

Around 500
service menus

CVC
Cumulative total of
44 firms

The Group's continuous R&D activities are focused on creating new businesses, achieving medium- and long-termbusiness growth, and strengthening competitiveness. As competition in the business and technological arenas continues
to escalate dramatically, we will continue to focus on R&D that will enable us to better meet social needs and­incorporate technologies into our business that will help solve social issues.

Introduction

Aiming to Enhance Corporate Value Utilizing Intellectual Property

In addition, in 2016, the Group commenced corporate venture capital investments, with the aim of promoting open innovation andestablishing innovation ecosystems, and is encouraging business collaboration with promising startups. As well as through a multifaceted collaboration providing funds to our investees, we also provide access to human resources such as engineers and goods suchas workspace and IT resources.
*Please refer to the following for more information on TIS’ corporate venture capital activities.
https://incubation.tokyo/cvc/en/g Organizational and Should Capabilities to Support Business

103

Corporate Information/Data

The experience and knowledge of system development accumulated by the Group over the years has been developed into a quality
management system and a production innovation framework to promote quality improvement and productivity enhancement. (Seepage 101 for details.)
The Company is also promoting the expansion of consulting methodologies, such as training to increase the number of DX consultants, systematizing management issues into four key themes, and categorizing problem-solving goals into a menu of three needs
based on our consulting experience and know-how.
Also, to expand forward-looking investment-style service businesses, we have developed business development methodologies
such as Stage Gate, and we are continuing to innovate and establish such methodologies.
Moreover, understanding the increasing importance of IP management, we will incorporate IP administration into corporate
planning, and build an integrated system incorporating management strategy with IP strategy to enhance the effectiveness of IP
management, which will in turn enhance corporate value.
104

Executive Dialogue: Sustainability × Human Resources Strategy

Raising the value of human resources is essential to ensure sustainable growth of the TIS INTEC Group andimprove corporate value over the medium to long term. With this in mind, TIS pursues a human resources strategy
that connects closely with its business strategy.

Executive Officer
and Division Manager of Corporate Planning SBU
Corporate Sustainability Promotion Officer, TIS Inc.

Managing Executive Officer
and Division Manager of
Human Resources SBU
Human Resources Strategy
Promotion Officer, TIS Inc.

Human Resources Strategy to Encourage Employee
Development
Kawamura: Investment activities with a human resources
focus have already led to the creation of office environments
leveraging workstyle reform and delivering better employee
benefits. But TIS boldly increased base salary, effective fromfiscal 2024, on the premise that upfront investment in humanresources is the same as upfront investment in businesses—
both underpin future growth. A higher base salary will
motivate employees to take the initiative when appropriate
and encourage personal growth and development, which will
support the virtuous cycle of value exchange with clients andwith society and lead to confidence in the path laid out in ourstated business strategy. In this sense, fiscal 2024 marks an
extremely important fresh start from a strategic perspective.

Takayanagi: We are also working on
initiatives to encourage employee
development commensurate withhuman resources investment. Under
the current medium-term management
plan, we seek to leverage DX businessstrategy and have emphasized basic
training in DX for employees. Through further initiatives, allemployees could become DX professionals. That’s the goal.
Toward this end, we started Plus ONE Kyoiku in April 2023.
This is an opportunity for employees to choose a DX skill, suchas consulting or data analysis, that is not necessarily related totheir current assignment, and learn about DX from basic toapplied technology. Acquiring new skills makes individuals
stronger—reinforcing the “can” factor—and opens doors todream jobs—the “will” inspiration—and, in providing theseopportunities, we support the self-directed growth of
employees.

Takayanagi: The introduction of a new evaluation system isanother big change. Accelerating structural transformation is atheme in the current medium-term management plan, but
progress can’t be fully assessed by short-term performance
numbers alone. It’s therefore hard to evaluate progress by thedivisions and the people who implement upfront investment

Corporate Information/Data

105

Takayanagi: That’s right. The human resources strategy atthat time, in 2018, emphasized self-fulfillment. To support
employees in realizing personal goals, we made adeclaration—a promise between company and employees—in
the form of the TIS Human Resources SBU Manifesto to
improve the work environment and personnel system, and webegan reporting the results achieved through thiscommitment. Since then, we have revisited the manifesto
every six months, issuing updates. But our perspective haschanged. The current medium-term management plan puts a
spotlight on investment in human resources, and as ourpeople develop new and better skills, they support progress in
structural transformation and enhanced corporate value. The
connection between business strategy and human resources
strategy has become much clearer.
Typically, a company recruits people who meet specific job
criteria, but if employees lack a shared understanding of andtrust in the direction that management is taking the company,
the company will not be able to achieve enhanced value
exchange with stakeholders, and then neither the employees
nor the company will grow. In the April 2023 revision of thehuman resources structure, TIS introduced a “Must/Will/Can

Kawamura: Uniform application of TIS’ approach may not beappropriate for all companies under the Group umbrella sinceeach company works on a different business model. However,
the management accounting system, core systems andbusiness processes are consistent throughout the Group, and I
would say that human resources systems and work
environments are already aligned across the Group. TIS
respects compensation strategies and systems based on
differences in value exchange with respective client groups
while encouraging a shared perspective through a shift toward
upfront investment groupwide.

Platform for Value Creation

Kawamura: Taking advantage of thetransition to the operating holding
company structure in July 2016 thatcreated the TIS INTEC Group, TIS
identified materiality—priority issues—that the Group must strive to fulfill.
Based on these points of materiality,
we have steadily promoted sustainability through various
steps, such as drafting a business strategy that seeks tobalance social value and economic value.
As sustainability management gains momentum during thecurrent medium-term management plan, the Board of
Directors is evolving into a place for big-picture discussion ofwhat sustainability management should look like for the TIS
INTEC Group and the medium- to long-term business strategy
that will achieve this ideal. Against this backdrop, theCorporate Sustainability Committee was put directly under the
Board of Directors, effective from April 2023, withparticipation primarily by directors.
Determined to further efforts under this new structure,
management aims to accelerate structural transformation,with an emphasis on service-style operations and global
business, and this will certainly fuel sustainable growth of the
TIS INTEC Group overall. It goes without saying, of course, but
improvement in the value of our human resources is
indispensable to achieving growth. The human resources
strategy we apply must enable everyone to demonstrate

maximum performance, and it must be closely tied to businessstrategy as well.
The Human Resources SBU has always worked to build trust
and promote engagement between company and employees.
This was highlighted by the declaration of a new humanresources policy in 2018 and visualization of a roadmap forthat policy, right?

Takayanagi: Although we are always looking for people whohave strengths consistent with the business model of eachbusiness segment, the model for securing the necessary
human resources is ever-changing. What we need, actually,are people who look at changes in society and issues ofconcern to clients that shift in response to such changes,
consider solutions, and then put thought into action. For the
TIS INTEC Group, a one-size-fits-all human resources model
isn’t ideal. Instead, we have to aim for a portfolio of people
with various ideas built on diverse upbringing, experiences andcapabilities, and through these human resources, we will beable to respond flexibly to a changing world and issues ofconcern to clients.

Growth Strategy for Value Creation

Human Resources Strategy for Sustainable Growththrough Sustainability Management

Kawamura: Sustainable growth of the Group—and OUR
PHILOSOPHY touches on this as well—requires the vibrant,
dynamic, enthusiastic actions of thinking people who actively
weigh up the needs of the market and of society, and embracechallenges that crop up along the way. The skills TIS is looking
for in potential employees and the methods used to develop
and upgrade skills are much different than in the past. Right
now, the Corporate Planning SBU and the Human Resources
SBU are working to build a human resources portfolio for the
medium to long term, and discussion centers on the training
and recruitment required to build that portfolio.

TIS INTEC Group Value Creation

Kyoko Takayanagi*The Must/Will/Can Framework is explained on page 52.

for future structural transformation. Without proper
evaluation of the challenges ahead, favorable trends inorganizational and individual growth might be disrupted. The
new evaluation system incorporates assessment of processes
and actions to properly identify employees’ contribution to
structural transformation, and provides incentive to persevere
when faced with challenging circumstances. When a humanresources system is aligned to the direction in which acompany is traveling and management has the support andtrust of employees, it’s as if everyone is running toward thesame finish line. We will promote a human resources strategy
that prioritizes shared awareness and company–employee
engagement, thereby underpinning the establishment of acorporate culture unique to the TIS INTEC Group.
TIS, as the holding company, took the initiative andimplemented this recent revision to its own human resources
system. But the evaluation system will continue to evolve froma medium- to long-term perspective to encompass the whole
TIS INTEC Group.

Top Message

Masakazu Kawamura

Framework,”* to get that virtuous cycle into vigorous rotation.
By combining the roles that the company expects employees
to fulfill (Must) with employees’ work-related aspirations (Will)and inherent strengths and issues for improvement (Can), andexpanding the overlap where these three components
converge, we will generate active momentum among
employees to accelerate structural transformation.

Introduction

Connecting business strategy to human resources strategy to realize sustainableimprovement in corporate value

106Corporate Information/Data
Financial Review

109

Consolidated Financial Summary111

Non-Financial Summary

115

Corporate Data

117

Evaluations from External Parties

119

Growth Strategy for Value Creation
Platform for Value Creation

Kawamura: You and I are part of the corporate hierarchy, andwe aren’t able to show results directly in terms of sales andincome. But we do have an extremely important
responsibility—to enhance management quality. More andmore situations require close coordination of quality control,
governance, legal affairs and human resources, and I am
keenly aware of the pressing urgency to apply our corporateside perspective and a change in behavior in a unified rather
than job-delineated manner to actively coordinate a response
to in-house issues. Going forward, I would like TIS to set thestage for business activities that support greater speed in the
structural transformation process, as this will underpin
enhanced management quality, and I will work to balance theGroup’s contribution to a sustainable society with sustainableimprovement in corporate value.

06

TIS INTEC Group Value Creation

Takayanagi: A company can’t grow and develop if theindividuals within that company don’t grow and develop, so I
firmly believe that investment in human resources will lead tohigher corporate value. We monitor various human resourcesindicators, too, but when we publicly disclose results, we
provide not only numbers but also some backstory, if you will,
about what those numbers mean in terms of the goals weseek to achieve. I think it’s extremely important to explain
numbers.
For example, we see the Employee Awareness Survey as away to monitor the results of our human resources strategy.
Every year, the survey delivers an increasingly higher level ofsatisfaction among employees regarding the environment andprograms that create a comfortable workplace. But
satisfaction in the sense of rewarding work, such as feelingpride in one’s job, still trends low in comparison. TIS is keen to
be a rewarding company to work for, where employees travel
together toward stated corporate goals—that’s the “must”
component—while pursuing personal aspirations (“will”) andbuilding strengths (“can”) to grow and develop. TIS will be themodel for the TIS INTEC Group to follow. Therefore, even inexternal announcements, we have to clarify the direction weare taking, the indicators and targets that represent thistrajectory, and how we are going to reach our destination.

Takayanagi: That means taking a multifaceted approach
showing the correlation of factors, such as human resources
portfolio targets, degree of progress toward these targets,sales and recruitment ranking for each segment, to explain
how DX consultants and IT architects—both key to our growthstrategy—and other solution professionals contribute to
growth. I don’t think you or I have sufficient information andanalysis of existing data to provide a full explanation rightnow, and we’ll have to get those details and fine-tune themessage for use at a later date.

Top Message

Kawamura: Even if shareholders and investors understandthe need for bold, upfront investment, they still often ask
when the investment will deliver returns. Investment in humanresources doesn’t generate immediate returns, but it’s
extremely important that stakeholders are made aware of
results that inevitably meet expectations as well as thetimeline. We will continue to show, quantifiably, just how
much human resources investment translates into higher
corporate value, as this is sure to be a key theme going
forward.
A yardstick could be operating income per person—a
productivity-related indictor—or it could be an employee
engagement index or a satisfaction level, be that for clients orfor business partners. For corporate officers, we go a stepfurther though. Based on the idea that enhancing value
exchange with stakeholders is a crucial responsibility ofcorporate officers, we have already incorporated this into
other measurements as a KPI for determining directors’compensation. I will continue to emphasize this point.

accordingly. Take the Offering Services Business as an example.
This segment is in an upfront investment phase, so right now,
operating income per person is lower than that of othersegments. But the segment promises high earnings in the
future. Therefore, it’s important to consider the impact on theclient base and business transactions of rising client
satisfaction with service-style operations in the Offering
Services Business, and the impact on progress in developing
service-style operations of more consultants and an enriched
portfolio of intellectual property. Positive impacts would help
link the achievement of targets in key business domains with
operating income per person, and if a concrete correlation
between targets and associated indicators of success can beshown, then explanations to stakeholders will be moreconvincing and stakeholders themselves will gain a deeper
understanding of our growth strategy.

Introduction

Accountability to Stakeholders

107

Corporate Information/Data

Kawamura: The goal is to achieve sustainable improvement
in corporate value. From a financial perspective, it’s incredibly
important to have a plan on how to boost operating income
per person. Even if we don’t hit the target right away, thenarrative on reaching an improvement in corporate value bylinking various components—that is, disclosing information on
our approach as well as strategies and status—will bringstakeholders on side, reinforce engagement and help us grow.
However, all operations can’t be lumped under one
corporate indicator. Operations have to be broken down bybusiness model, and indicators of success must be set

108

Financial Summary■ Fiscal 2023 Results(Millions of yen)

Fiscal 2023
508,400
62,32812.3%

39,462

55,461+15,999(+40.5%)8.2%
157.6914.0%

10.9%
227.1118.8%+2.7 points+69.42+4.8 points—(+44.0%)—YOY changes+25,853(+5.4%)+7,589 (+13.9%)+1.0 points—(Millions of yen)

Fiscal 2024 (Estimates)
530,000
63,500
12.0%

Fiscal 2023
508,400
62,32812.3%

Net sales
Operating income
Operating margin
Net income attributable to owners of
the parent company
Net income ratio
Net income per share (Yen)ROE (ROE for fiscal 2024 is a calculated value.)YOY changes+21,599(+4.2%)+1,171(+1.9%)–0.3 points—

55,46142,000–13,461(–24.3%)10.9%
227.11
18.8%

7.9%
174.1913.7%–3.0 points–52.92–5.1 points—(–23.3%)—

In its outlook for fiscal 2024, TIS anticipates higher sales and income, with net sales rising 4.2% over fiscal 2023, to ¥530 billion, and operating
income edging up 1.9%, to ¥63.5 billion.
The operating margin has slipped 0.3 percentage point year on year, for fiscal 2023, reflecting such factors as higher investment in humanresources to the tune of ¥5 billion, but management remains committed to robust upfront investment to underpin growth while striving for enhanced
profitability.
Net income and return-on-equity were down year on year, owing to such factors as a reactionary drop in extraordinary income, but TIS will work
hard to achieve levels that exceed targets set under the current medium-term management plan.
The TIS INTEC Group will strive as a cohesive collection of companies to realize TIS’ goal of structural transformation and improve corporate valuethat fuels sustainable growth.
Note that the performance results of Nihon ICS, which TIS turned into a consolidated subsidiary in April 2024, are reflected in consolidated resultsfrom the second quarter of fiscal 2024. Management anticipates goodwill associated with Nihon ICS to be about ¥9.0 billion, amortized over 15
years, and client-related intangible assets to be about ¥22.0 billion, amortized over 20 years*.
*Certain components, such as purchase price allocation, have yet to be determined, and there is a possibility that amounts will change.

Fiscal 2023: Operating Income Analysis, Increase/Decrease Reasons (YOY change) (Billions of yen)

Fiscal 2024: Operating Income Analysis, Increase/Decrease Reasons [Forecast] (Billions of yen)

Operating Income (Operating Margin)

Operating income (operating margin)+2.59 –7.59
+6.17
63.50
62.32
(12.0%)(12.3%)

54.73 ＋7.22(11.3%)

＋5.65

–5.29

62.32
(12.3%)

Increased Improved Increased
sales profitability
SG&A
expenses

Fiscal2023

Cost of office reform to promote new workstyles:
Down ¥0.95 billion (YOY change)(Cost of sales : -¥0.34, SG&A expenses : -¥0.61 billion)

Changes in SG&A expenses

Effect of change in status ofconsolidated subsidiary, etc. +0.05
Office reform–0.61
Prior investment(includes enhanced
employee benefits)+2.87
Lower operating costs,
enhanced head office
functions–0.20
Others (includes
brand-related costs)
+3.17
Total
+5.29

Highlights of Financial Position(Millions of yen)

28.4%

[YOY change +0.5 points][Of which, effect of change
in status of consolidated
subsidiary, etc. was+¥1.08 billion]

Fiscal 2023 Increased Improved Increased Fiscal 2024
actualsales profitability SG&A
estimate
expenses

Changes in SG&A Expenses

Effect of change in status ofconsolidated subsidiary, etc. +2.36
Prior investment(Cost of sales: +¥1.00 billion, SG&A expenses: +¥0.47 billion)(excludes investment in
Software investment / Investment in human resources /human resources)+0.47
Investment in R&D+
Prior investment (investment
Anticipated cost of investment in human resources (additional): in human resources)+1.80
Up ¥5.00 billion (YOY change)+2.94(Cost of sales : +¥3.20 billion, SG&A expenses : +¥1.80 billion) Others
Total
+7.59

Highlights of Cash Flows
Fiscal 2022
476,642
173,649
37,5337.9%
302,993
61.5%

Fiscal 2023
462,320
153,094
16,043
3.5%
309,22664.2%

YOY changes–14,321–20,555–21,489–4.4 points+6,233+2.7 points(Millions of yen)
Net cash from operating activities
Net cash from investing activities
Net cash from financing activities
Free cash flows
Cash and cash equivalents at the end of the term

Fiscal 2022
56,126–3,424–21,948
52,702
113,820

Fiscal 2023
33,634
11,300–64,573
44,93594,306

YOY changes–22,492+14,725–42,624–7,766–19,514

Cash flow from operating activities
Cash increase:	Key positive cash flow effect was ¥15,700 million in depreciation, which is a non-cash expense item on the income statement,up from ¥616 million a year ago.
Cash decrease:	Notable negative cash flow effects were ¥29,712 million in income taxes paid, up ¥15,349 million from a year ago; ¥18,792
million in receivables and contract assets, reflecting higher net sales, up ¥20,510 million from a year ago; and ¥18,313 million ingain on sales of investment securities, up ¥13,435 million from a year ago.
Cash flow from investing activities
Cash increase:	Notably, ¥23,685 million in proceeds from sale and redemption of investment securities, mainly due to reduction of strategic
shareholdings, up from ¥16,558 million a year ago.
Cash decrease:	Primary decreases were outflow of ¥6,045 million for acquisitions of intangible assets, down ¥186 million from a year ago; and¥4,337 million for acquisitions of property and equipment, down ¥4,710 million from a year ago.

Corporate Information/Data

AssetsCurrent assets:	Current assets settled at ¥268,682 million, as of March 31, 2023, up ¥9,421 million from a year earlier. The primary
components of this change were increases in notes and accounts receivable and contract assets, paralleling higher net sales,
which offset a decrease in cash and deposits caused by repayment of long-term debt and purchase of treasury stock.
Fixed assets:	Fixed assets amounted to ¥193,637 million, as of March 31, 2023, down ¥23,743 million from a year earlier, mainly due to adecrease in investment securities, following a reduction in strategic shareholdings.
Liabilities
Current liabilities: 	Current liabilities totaled ¥117,179 million, as of March 31, 2023, down ¥22,057 million from a year earlier, primarily owing
to a decrease in short-term debt.
Fixed liabilities:	Fixed liabilities amounted to ¥35,914 million, as of March 31, 2023, up ¥1,502 million a year earlier, largely due to anincrease in long-term debt.
Net assets
Retained earnings:	Retained earnings amounted to ¥247,263 million, up ¥44,006 million from a year earlier, due to the booking of net income
attributable to owners of the parent company and payment of dividends from surplus.
Additional paid-in capital: A dditional paid-in capital came to ¥40,470 million, down ¥24,490 million from a year earlier, owing to a decrease in
the valuation difference on other investment securities paralleling a reduction in strategic shareholdings and adecrease paralleling cancellation of treasury stock.
Treasury stock:	Treasury stock increased through share buyback activity, but after TIS canceled an amount equivalent to ¥24.5 billion as partof efforts to optimize capital structure, the value of treasury stock was ¥7,614 million, as of March 31, 2023, up ¥4,496
million year on year. Management cancelled this amount on February 28, 2023 as scheduled, having considered such factors
as corporate policy and the need to eliminate concerns about future stock dilution.
109

Plan

Anticipated prior investment costs for promoting
structural transformation:
Up ¥1.47 billion (YOY change)

Platform for Value Creation

Total assets
Total liabilities
Interest-bearing debt
(Interest-bearing debt ratio)
Net assets
Equity ratio

Gross profit margin+1.17（+1.9％）

Growth Strategy for Value Creation

27.9%[YOY change +1.2 points]

Fiscal2022(Cost of sales: +¥1.17 billion, SG&A expenses: +¥0.54 billion)

Software investment / Investment in human resources /[Of which, effect of change
Investment in R&D
in status of consolidated+
subsidiary, etc. was
Cost of investment in human resources (additional):
Up ¥5.15 billion (YOY change)–¥0.71 billion](Cost of sales : +¥2.83 billion, SG&A expenses : +¥2.32 billion)

Gross profit margin

Actual+7.58（+13.9％）Prior investment costs for promoting structuraltransformation:
Up ¥1.72 billion (YOY change)

TIS INTEC Group Value Creation

TIS recorded higher sales and income on a consolidated basis for fiscal 2023, ended March 31, 2023, solidly reaching performance targets evenafter upward revisions and achieving major KPIs stated in the medium-term management plan a year ahead of schedule.
Net sales rose year on year, thanks to business expansion driven by accurate responses to clients’ IT investment needs, including demand for
digital transformation.
Operating income was also up year on year, paralleling higher net sales as well as the capacity to absorb an increase in selling, general andadministrative expenses, primarily investments for future growth, namely, the cost of upfront investment to fuel progress in structural transformation, and better employee benefits. This enhanced capacity to absorb SG&A expenses reflects an improved gross profit margin, achieved byproviding high-value-added services and progress on measures to boost productivity and quality. The operating margin grew as well.
Net income attributable to owners of the parent company grew year on year, owing to a significant increase in extraordinary income.

■ Fiscal 2024 Forecast

Top Message

Net sales
Operating income
Operating margin
Net income attributable to owners of
the parent company
Net income ratio
Net income per share (Yen)ROE

Fiscal 2022
482,547
54,73911.3%

Introduction

Business Performance

Cash flow from financing activities
Cash increase:	Mainly net increase of ¥10,399 million from short-term debt, up ¥9,078 million from a year ago.
Cash decrease:	Largely ¥35,450 million to repay long-term debt, up ¥28,437 million from a year ago; ¥30,005 million to acquire treasury stock,up ¥25,171 million from a year ago; and ¥11,451 million to pay dividends, up ¥2,123 million from a year ago.

110

Consolidated Financial Summary 1
TIS Inc., and consolidated subsidiaries
Years ended March 31

Fiscal 2014

Fiscal 2015

Fiscal 2016

Fiscal 2017

Fiscal 2018

Fiscal 2019

Fiscal 2020

Fiscal 2021

Fiscal 2022

Fiscal 2023

Net sales

337,834

346,647

361,025

382,689

393,398

405,648

420,769

443,717448,383

482,547

508,400

Cost of sales

276,935

283,881294,927

312,153

317,440

321,286

325,985

337,820334,671353,699

366,668

Gross profit

60,89962,766

66,09770,53575,95884,362

94,784

105,896

113,712

128,848

141,732

Gross profit ratio (%)

18.0%

18.1%

18.3%

18.4%

19.3%

20.8%

22.5%

23.9%

25.4%

26.7%

27.9%

Performance Status

42,72743,25544,97646,09948,93851,61856,74061,05767,963

74,10879,403

12.6%

12.5%

12.5%

12.0%

12.4%

12.7%

13.5%

13.8%

15.2%

15.4%

15.6%

Operating income

18,171

19,51021,121

24,43627,01932,74338,043

44,83945,74854,73962,328Operating margin (%)

5.4%

5.6%

5.9%

6.4%

6.9%

8.1%

9.0%

10.1%

10.2%

11.3%

12.3%

17,44018,971

21,251

24,521

27,092

32,79538,60346,07039,25755,71063,204

5.2%

5.5%

5.9%

6.4%

6.9%

8.1%

9.2%

10.4%

8.8%

11.5%

12.4%

Net income attributable to owners of the parent company

5,868

7,913

10,275

12,67816,306

20,62026,034

29,411

27,692

39,462

55,461

Net income ratio (%)

1.7%

2.3%

2.8%

3.3%

4.1%

5.1%

6.2%

6.6%

6.2%

8.2%

10.9%

TIS INTEC Group Value Creation

Recurring profit
Recurring profit ratio (%)

Top Message

Selling, general and administrative expenses
Selling, general and administrative expenses ratio (%)

Financial Position
Current assets

138,219

143,519

140,450

166,666

152,162

162,064

176,231

181,543

229,965259,261

268,682

Fixed assets

164,083

170,091

205,401

169,828

185,459

204,889

194,426

201,356

221,106

217,381

193,637

Software assets

11,76912,92813,252

15,42816,056

16,866

19,17722,887

27,797

26,48625,648

Total assets

302,302313,610

345,851

336,495

337,622366,954

370,657

382,899

451,072

476,642462,320

Current liabilities

91,06372,79077,666

91,50878,67681,31091,12688,479100,915

139,236

117,179

53,07976,316

79,39564,44759,74359,344

45,121

46,46270,726

34,41235,914

144,143

149,107

157,062

155,955

138,420

140,655

136,248

134,942

171,642

173,649

153,094

Net assets

158,159

164,502

188,789

180,539

199,202226,298

234,408

247,957

279,429

302,993309,226

Total liabilities and net assets

302,302313,610

345,851

336,495

337,622366,954

370,657

382,899

451,072

476,642462,320

Total interest-bearing debt

60,55058,86952,114

46,15835,14432,876

26,89322,294

43,62937,533

16,043

Cash flow from operating activities

21,51525,77022,93825,496

18,95236,38637,55838,56933,34556,12633,634

Cash flow from investing activities(14,391)(5,334)(17,744)

8,688(23,488)(14,202)(1,213)(26,437)(17,522)(3,424)

11,300Cash flow from financing activities(19,883)(5,872)(19,067)(14,979)(18,327)(10,543)(16,773)(14,544)

12,484(21,948)(64,573)

Cash and cash equivalents at the end of the term

28,43343,142

29,48548,65125,73037,54557,08354,68482,924

113,820

94,306

Free cash flow

7,124

20,436

5,194

34,184(4,536)22,18436,345

12,132

15,82352,702

44,935

Capital expenditures

12,287

12,544

16,873

14,21015,15916,907

13,334

16,70225,085

13,783

11,230Depreciation

12,92012,454

12,80911,952

11,801

12,572

12,783

12,02013,31815,08315,700Cash Flow Status

Platform for Value Creation

Others

1,002

853

1,097

1,086

1,178

996

1,003

1,702

1,789

2,784

3,104

Amortization of goodwill

1,741

1,166

1,052

339

326

289

289

171

312

497

336

Goodwill balance at the end of the term

1,914

830

2,021

1,393

1,332

1,118

503

355

2,550

1,556

1,370

Corporate Information/Data

Notes: 1. Software assets indicates the total sum of software and software in progress.
2. Total interest-bearing debt indicates the total sum of borrowed money and corporate bonds.
3. Free cash flows indicate the total sum of cash flows from operating activities and cash flows from investing activities.
4.	From the first quarter of fiscal 2019, TIS applies “Partial Amendments to Accounting Standard for Tax Effect Accounting” (Accounting Standards Board ofJapan, Statement No. 28, February 16, 2018). Figures for fiscal 2018 have been retrospectively restated in line with the aforementioned partial amendments.

111

Growth Strategy for Value Creation

Non-current liabilities
Total liabilities

Research and development expenses

Introduction(Millions of yen)

Fiscal 2013112

Consolidated Financial Summary 2
TIS Inc., and consolidated subsidiaries
Years ended March 31

Fiscal 2014

Fiscal 2015

Fiscal 2016

Fiscal 2017

Fiscal 2018

Fiscal 2019

Fiscal 2020

Fiscal 2021

Fiscal 2022

Fiscal 2023

427,210439,748452,284495,291

523,956

122,067

132,935

133,121147,214

161,453

180,373

Order Status (Total)
Orders received during the term
Order backlog at year-end

Introduction(Millions of yen)

Fiscal 2013

Order Status (Software development)
179,352

172,721

199,842

207,345

208,307219,225

238,298

246,330

237,323

271,350

282,739

Order backlog at year-end

62,05558,86971,09569,96164,751

67,71675,54979,277

83,797

94,016103,282

Equity ratio (%)

49.8%

49.9%

53.3%

52.5%

57.8%

60.4%

62.0%

63.3%

60.0%

61.5%

64.2%

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

3.9%

5.1%

6.0%

7.0%

8.8%

9.9%

11.5%

12.5%

10.8%

14.0%

18.8%

Total asset turnover ratio

1.10

1.13

1.09

1.12

1.17

1.15

1.14

1.16

1.08

1.04

1.08

Financial leverage

2.08

2.01

1.93

1.89

1.81

1.69

1.63

1.58

1.63

1.65

1.59

Top Message

Orders received during the term

Financial Indicators

5.7%

6.2%

6.4%

7.2%

8.0%

9.3%

10.5%

12.2%

9.4%

12.0%

13.5%

20.0%

18.8%

15.1%

13.7%

10.4%

9.0%

7.3%

5.8%

9.7%

7.9%

3.5%

Payout ratio (%)

31.4%

27.7%

25.6%

22.7%

19.0%

16.6%

22.8%

25.7%

31.9%

27.9%

22.0%

Total return ratio (%)

31.4%

27.7%

30.4%

35.3%

31.9%

30.5%

39.0%

39.8%

42.8%

39.3%

76.0%

TIS INTEC Group Value Creation

Recurring profit to total assets ratio (ROA) (%)
Interest-bearing debt ratio (%)

Per share data
Net income per share—basic (yen)*

66.86

90.16

117.40145.22189.02241.44307.83350.35110.51

157.69227.11

Net income per share—diluted (yen)*

66.83

90.12

—

—

—

—

—

—

—

—

—

Annual dividends per share (yen)*

21.00

25.00

30.00

33.00

36.00

40.00

70.00

90.00

35.00

44.00

50.00

1,714.88

1,782.23

2,108.19

2,031.07

2,265.76

2,602.07

2,719.79

2,890.27

1,078.60

1,173.60

1,227.44

Net assets per share (yen)*

Growth Strategy for Value Creation

Stock information
1,243

1,694

2,193

2,664

2,832

4,210

5,240

5,361

2,641

2,877

3,490

1,328

1,854

2,257

3,085

2,959

4,410

6,040

7,320

2,670

3,630

4,320

Lowest stock price during the term

798

1,020

1,524

2,156

2,180

2,742

4,060

4,045

1,723

2,466

2,693

Price earning ratio (PER) (times)

18.6

18.8

18.7

18.3

15.0

17.4

17.0

15.3

23.9

18.2

15.4

Price book-value ratio (PBR) (times)

0.72

0.95

1.04

1.31

1.25

1.62

1.93

1.85

2.45

2.45

2.84

Aggregate market value (millions of yen)

109,121

148,714

192,521233,870

248,618

369,592

460,014

470,637

695,553

722,589

853,114

Number of outstanding shares at fiscal year-end (thousands)

87,78987,78987,78987,78987,78987,78987,78987,789263,367

251,160

244,445

Number of treasury stock at fiscal year-end (thousands)

19

4

320

864

1,701

2,613

3,358

3,952

12,595

1,394

2,446

Average number of shares during the term (thousands)

87,77187,77487,52287,30586,26885,406

84,574

83,948250,574

250,246244,212337,834

346,647

361,025

382,689

393,398

405,648

420,769

443,717448,383

482,547

508,400

Platform for Value Creation

Stock price at fiscal year-end (yen)Highest stock price during the term

Sales by Client Sector
Net sales
Credit card

48,84649,40253,74359,27465,00673,31473,64875,11879,26590,314

97,494

Banking

26,23029,04925,444

27,86728,23327,452

26,58330,10030,64836,39439,313

Insurance

23,83625,26924,972

26,33925,356

26,262

27,27929,27430,14031,52031,258Other finance

21,33723,481

23,312

20,406

20,857

22,127

19,502

24,28917,86316,00015,075Assembly-based manufacturing

38,82440,90445,78549,45542,723

43,77746,02845,73945,10344,34545,002

38,46833,84334,96035,061

36,95338,36638,081

38,99842,42453,36851,70627,39830,00931,77532,702

31,77328,87232,90833,976

31,67932,90433,951Services

73,42572,666

77,53579,60189,607

93,258103,531

112,722

118,517

132,094

142,276

Public institutions

28,22530,39329,89136,60337,00235,92334,86336,286

33,64932,07537,447

Others

11,241

11,626

13,604

15,376

15,882

16,292

18,343

17,20919,09013,527

14,874

Corporate Information/Data

Processing-based manufacturing
Distribution＊The Company executed a stock split, with each share of common stock split into three shares, effective April 1, 2020.

113

114

Non-Financial Summary
TIS Inc., and consolidated subsidiaries
Compilation period: April 1 to March 31 of each year or the base dateFiscal
2019

Fiscal
2020

Fiscal2021

Fiscal2022

Fiscal2023

Employee-related data (Note 1)

Scope of datacollection

Fiscal
2019

Fiscal
2020

Fiscal2021

Fiscal2022

Introduction

Scope of datacollection

Fiscal2023

Environmental data

* Averages are calculated as simple combined averages or weighted averages.

21,817

21,70921,946

Number of employeesE

15,948

16,10917,497

17,265

16,998

Number of male employeesE

11,52911,56012,342

12,142

12,018

Number of female employees

E

4,419

4,549

5,155

5,123

4,980

Percentage of female employees

E

27.7%

28.2%

29.5%

29.7%

29.3%

Number of non-Japanese employees

E

155

155

1,161

1,379

1,430

Average age

F

38.9

39.1

39.2

40.0

40.1

Average age of male employees

F

40.0

40.3

40.5

41.3

41.4

Average age of female employees

F

35.9

36.0

36.1

37.0

36.8

Average length of service (years)

F

12.9

12.8

13.3

14.2

14.3

Average length of service of male employees (years)

F

13.7

14.0

14.2

15.0

15.2

Average length of service of female employees (years)

F

10.8

11.0

11.2

12.2

12.1

Number of employees in management positions

F

3,443

3,609

3,782

3,836

3,887

Number of male employees in management positions

F

3,147

3,278

3,410

3,440

3,465

Number of female employees in management positions

F

296

331

372

396

422

Percentage of female employees in management positions

F

8.6%

9.2%

9.8%

10.3%

10.9%

Number of employees in management positions

B

4,454

4,570

Number of male employees in management positions

B

3,997

4,067

Number of female employees in management positions

B

457

503

Percentage of female employees in management positions

B

10.3%

11.0%

Percentage of employees with a disability (Note 2)

G

2.14%

2.28%

2.35%

2.40%

2.30%

Number of new graduate recruits

F

700

663

720

679

679

Percentage of new female graduate recruits

F

34.4%

32.4%

36.5%

39.0%

35.2%

Number of mid career hires

F

339

386

271

233

236

Percentage of female mid career hires

F

35.1%

29.0%

31.0%

30.5%

26.7%

Turnover rate

F

4.8%

5.0%

3.3%

3.7%

Results of employee awareness surveys (Note 3)

F

38%

46%

Absenteeism (Note 4)

F

Scope 1 emissions (t-CO2)

D

885

745

760

513

481

Scope 2 emissions (t-CO2)

D

71,09664,48865,86764,15753,076

Scope 3 emissions (t-CO2)

C

428,977

441,687

418,761465,226

C

339,133

323,087

333,379

386,392

Category 1 (purchased goods and services)
Category 2 (capital goods)

C59,10390,06857,694

48,317

Category 3 (fuel-and energy-related activities)

C

10,165

10,106

10,269

9,026

Category 4 (upstream transport and delivery)

C

8,488

7,433

8,215

11,392Category 5 (waste generated in operations)

C

1,162

361

703

580

Category 6 (business travel)

C

2,465

2,549

2,449

2,752

Category 7 (employee commuting)

C

8,461

8,083

6,052

6,766

Energy consumption (Electricity MWh)D

149,523

143,383

141,620

139,560

143,909

Energy consumption (Heavy oil kL)

D

32

25

21

25

27

Energy consumption (Light oil kL)

D

10

0

0

0

0

Energy consumption (City gas, km3)

D

343

302

313

199

188

Energy consumption (LPG km3)

D

0

0

Energy consumption (kerosene KL)

D

1

0

0

Energy consumption (steam GJ)

D

1,301

19,11619,807

Industrial waste (ton)

F

1,035

290

472

188

0

0

27

32

Other non-financial data
89

Social contribution expenses (millions of yen)A

Political contributions (10 thousands of yen)B

Number of serious information security incidents

B

0

0

Number of employees receiving regular training on information security

B

18,54225,369Number of reports of leaks, etc. to supervisory authorities of the Personal
Information Protection Law

B

0

4

3.9%

Number of requests for disclosure of information related to personal
information

B

1

3

51%

52%

Number of helpline calls: Calls received

H

8

13

4

1.0%

1.0%

Number of helpline calls: Cases investigated

H

7

8

12

4

H

4

4

8

3

0

7

Average total working hours per month

F

166.4

162.6

162.9

164.0

164.7

Number of helpline calls: Case involving corrective action

Percentage of annual paid leave taken

F

73.0%

75.7%

66.3%

64.4%

69.0%

Development loss rate

A

0.9%

0.6%

0.8%

0.7%

0.1%

Percentage of male employees taking long term childcare leave

B

43.4%

Results of customer satisfaction surveys

H

68.2%

72.7%

69.0%

71.7%

69.6%

Percentage of male employees taking short or long term childcare leave

B

75.9%

Number of directors (Note 5)

H

9

9

9

9

9

Spending on learning and research (millions of yen)F

Number of days spent on learning and research per person per annum

F

8.1

1,915
10.8

1,534
11.2

1,863
13.3

2,059
14.2

Number of female directors (Note 5)

H

1

1

1

1

1

Percentage of female directors (Note 5)

H

11.1%

11.1%

11.1%

11.1%

11.1%

Number of external directors (Note 5)

H

3

3

3

3

3

Percentage of external directors (Note 5)

H

33.3%

33.3%

33.3%

33.3%

33.3%

Notes: 1. Figures for fiscal 2019, fiscal 2020, fiscal 2021, fiscal 2022 and fiscal 2023 are based respectively on April 1, 2019; April 1, 2020; April 1, 2021; March 31, 2022;
and March 31, 2023.
2. Figures for fiscal 2019, fiscal 2020, fiscal 2021, fiscal 2022 and fiscal 2023 are based respectively on June 1, 2018; June 1, 2019; June 1, 2020; June 1, 2021,
and June 1, 2022.
3. Percentage of employees who responded positively to the question, “Overall, the company is a good place to work”.
4. Percentage of employees absent from work for more than 30 consecutive days due to injury or illness (at fiscal year-end).
5. Figures for fiscal 2019, fiscal 2020, fiscal 2021, fiscal 2022 and fiscal 2023 are based respectively on June 30, 2018; June 30, 2019; June 30, 2020; June 30,
2021, and June 30, 2022.
The above non-financial data is an excerpt from “ESG Data Book”.
Other non-financial data and scope of collection, details refer to “6. Nonfinancial data” of the “ESG Data Book”.
https://www.tis.com/group/sustainability/esg_databook/index.html

115

116

Corporate Information/Data

Scope of data collection
A. TIS INTEC Group consolidated
B. TIS and consolidate subsidiaries in Japan
C. TIS, 23 consolidated subsidiaries in Japan, and 9 consolidate subsidiaries in overseas
D. TIS, 12 consolidated subsidiaries in Japan, and 9 consolidate subsidiaries in overseas
E. TIS, INTEC, AGREX, QUALICA, AJS, TIS Solution Link, TIS System Service, and MFEC (from fiscal 2021)
F. TIS, INTEC, AGREX, QUALICA, AJS, TIS Solution Link, and TIS System Service
G. TIS, TIS Solution Link, TIS System Service, TIS Business Service, and SorunPure
H. TIS parent

1,805

Platform for Value Creation

19,744Growth Strategy for Value Creation

19,483

TIS INTEC Group Value CreationA

Top Message

Number of employeesCorporate Data

■ Corporate Profile
Company name
FoundedEstablished
Main business

21,946 (full-time employees)■ TIS INTEC GroupTIS Inc., and 50 consolidated subsidiaries (domestic 24, overseas 26)
Main consolidated subsidiaries—

INTEC Inc.

TIS100%

AGREX INC.

TIS100%QUALICA Inc.

TIS80%Komatsu20%

AJS Inc.

TIS51%
Asahi Kasei49%

Focuses on credit card companies but pursues business opportunities in awide range of sectors, including services and manufacturing. Promote toexpand payment business. Merged with pure holding company IT Holdings
Corporation in July 2016 and became operating holding company.
(Incorporated April 1971)
Focuses on megabanks and life insurers, and assists with CRM for regionalbanks and offers a wide selection of services to regional public corporations,particularly in the Hokuriku region.
(Established January 1964)
Leading company in BPO sector, with emphasis on insurance industry needs.
Turned into a wholly owned subsidiary in March 2015, becoming corecompany for BPO business within the Group.  (Established September 1965)
Formerly, information systems subsidiary of Komatsu. Focuses on assemblybased manufacturers, mainly those under the Komatsu Group umbrella,
while expanding business with companies in the distribution and restaurant
sectors.
(Established November 1982)
Formerly, information systems subsidiary of Asahi Kasei. Focuses oncompanies under the Asahi Kasei Group umbrella.
(Established March 1987)

TIS49% Thai-listed, leading provider of enterprise IT solutions, which has strength in
MFEC Public(based onbanking, communication, and governments.
Company Limited
control criteria) 10 subsidiaries under the company.
(Established March 1997)

113,208

13,665(12.1%)

38,0774,215(11.1%)

22,6232,542(11.2%)

16,7662,681(16.0%)*
20,849*1,062(5.1%)● Indonesia

Shanghai CardInfoLink Data Service
Co., Ltd. (CardInfoLink)(Voting rights ownership ratio 18.1%,
13 subsidiaries under the company)

PT Anabatic Technologies Tbk(Voting rights ownership ratio 37.3%,
acquired convertible bonds with stockacquisition rights,
46 subsidiaries under the company)■ Share Composition by Shareholder■ Major Shareholders(As of March 31, 2023; Thousands of Shares)(As of March 31, 2023)

Overseas
Institutions
114,005(46.6%)

Number of Shareholding
shares(Thousands) ratio (%)

Name

Financial
Institutions
74,253(30.4%)

Total 244,445(100%)

Financial Instruments
Business Operator
3,529(1.4%)

Other Domestic
Institutions
24,845(10.2%)■ Rating
Long-term

33,64613.85

23,171

9.54

Custody Bank of Japan, Ltd. (Trust Account)

12,843

5.29

Employees’ Shareholding Association of TIS INTEC Group

6,595

2.72

SSBTC CLIENT OMNIBUS ACCOUNT

6,235

2.57

Nippon Life Insurance Company

6,219

2.56

The Master Trust Bank of Japan, Ltd. (Retirement Benefit
Trust Account, Mitsubishi Electric Corporation Account)

4,796

1.97

NORTHERN TRUST CO.(AVFC) RE FIDELITY FUNDS

4,731

1.95

MACQUARIE BANK LIMITED DBU AC

4,550

1.87

STATE STREET BANK WEST CLIENT - TREATY 5052341

4,152

1.71

Notes: 1.	Shareholding ratio are calculated after deducting treasury stock(1,510,057 shares). The treasury stock do not include 727 thousand
shares of Company stock held by TIS INTEC Group Employees’
Shareholding Association Exclusive Trust, and 208 thousand shares ofCompany stock held by Board Incentive Plan (BIP) Trust.
2.	Regarding 4,796 thousand shares held by The Master Trust Bank ofJapan, Ltd. (Retirement Benefit Trust Account, Mitsubishi Electric
Corporation Account), Mitsubishi Electric Corporation reserves exercise
of voting rights by Instruction.

(At November 11, 2022)
Japan Credit Rating Agency, Ltd.

The Master Trust Bank of Japan, Ltd. (Trust Account)
ICHIGO TRUST PTE. LTD.

A+/Stable■ Stock Price Range (Comparison with TOPIX)
TIS
1,200

TOPIX

1,100
1,000
900
800
700
600

TIS Solution Link Inc.
TIS Chiyoda Systems Inc.
TIS Tohoku Inc.
TIS Nagano Inc.
TIS West Japan Inc.
TIS Total Service Inc.
TIS Hokkaido Inc.

Registration Network, Ltd.
Nexway Co., Ltd.
HOKKOKU INTEC SERVICE Inc.
MicroMates Corp.
Miotsukushi Analytics Inc.

* MFEC Group, consolidated basis (fiscal year ended December 31, 2022). Numerical values based on accounting standards in home country ofThailand using rate prevailing at end of fiscal year.

117

Main equity method affiliates● China

500
400
300
200
100
0

Fiscal 2013

Fiscal 2014

Fiscal 2015

Fiscal 2016

Fiscal 2017

Fiscal 2018

Fiscal 2019

Fiscal 2020

Fiscal 2021

Fiscal 2022

Fiscal 2023

Notes: 1.	The TIS stock price and TOPIX (Tokyo Stock Exchange Price Index) are indexed at 100 based on the closing price of stock on April 30, 2012.
2.	The Company executed a stock split, with each share of common stock split into three shares, effective April 1, 2020. Figures before fiscal 2020 are presented
assuming this stock split was conducted.

118

Corporate Information/Data

Domestic subsidiaries
IUK Inc.
INTEC Solution Power Inc.
ULTRA Inc.
KOUSHI INTEC Inc.
SKY INTEC INC.
SorunPure Inc.
TIS System Service Inc.

238,140

29,450(12.4%)TIS Ventures, Inc.

Platform for Value Creation

TIS Inc.
(operatingholdingcompany)

Description of Business● United States

Growth Strategy for Value Creation

Shareholding
ratio

Fiscal 2023, ended March 31, 2023
(Millions of yen,non-consolidated basis)
Operating income
Net sales(operating margin)

AGREX DNP Vietnam Co., Ltd.

74 Equity Method Affiliates (domestic Five, overseas 69)

Individuals andOthers27,811(11.4%)(As of March 31, 2023)

TIS and maingroup
companies

QUALICA Asia Pacific Pte. Ltd.

● Vietnam

I AM Consulting Co., Ltd.
(Six subsidiaries under the company)
PromptNow Co., Ltd.
TISI (Thailand) Co., Ltd.
QUALICA (Thailand) Co., Ltd.

TIS INTEC Group Value Creation

Paid-in capital
Number of shares authorized
Number of shares issued
Number of shareholders
Stock listing
Number of employees(consolidated)● Singapore● Thailand

Top Message

Head office

TIS Inc.
April 28, 1971
April 1, 2008
Outsourcing services, software development, and solution services regarding investments in
information technology. Management and business execution of group companies that carryon information and communication business
Sumitomo Fudosan Shinjuku Grand Tower,
17-1, Nishi-Shinjuku 8-chome, Shinjuku-ku, Tokyo, 160-0023, Japan
Tel. +81-3-5337-7070
Fax +81-3-5337-7555¥10 billion
840,000,000 shares
244,445,411 shares
14,312
Tokyo Stock Exchange, Prime Market (Securities code: 3626)

QUALICA (SHANGHAI) Inc.
TISI (Shanghai) Co., Ltd.

Introduction

Overseas Subsidiaries● China(As of March 31, 2023)

Evaluations from External Parties■ IR-Related Activities

TIS stock is included in socially responsible investment (SRI) indexes and SRI funds. The main evaluations are as follows.

TIS' robust IR activities have earned high marks, and this status is further complemented by TIS' inclusion in the following
indexes.

FTSE4Good Index Series/FTSE Blossom Japan Index/
FTSE Blossom Japan Sector Relative Index

S&P/JPX Carbon Efficient Index

MSCI Japan ESG Select Leaders

SOMPO Sustainability Index

Second Nikkei Integrated Report Award
Second Place

2022 Internet IR Commendation Award(Daiwa Investor Relations Co., Ltd.)Awarded for ten consecutive years
since 2013.

TIS’ activities have also garnered notice, substantiated by validation under various environment, society and governance(ESG) evaluation programs at home and abroad.

CDP Climate change A -DX Certification

Certified Health & Productivity
Management Outstanding
Organizations

Eruboshi (L-Star)

Brand activities launched in the second half of fiscal 2020 emphasized approaches to boost brand recognition through television commercials and othermedia formats. Our efforts have generated positive results. Going forward, we will strive to become a company—and by extension, a corporategroup—that all stakeholders look to first, and we will implement strategies to boost our brand profile.

82%
Diversity Management
Selection 100

TomoninGroup recognition

IT industry new graduate job seekers(Among business people)
TIS survey on February 2023

2024 Company ranking
by popularity(Up 48 percentage points
after television commercial)

6
Independent: No.1

67%

Growth Strategy for Value Creation(Among business people)
TIS survey on February 2023

Semi-Nadeshiko Brand

Gomez IR Site Comprehensive Ranking 2022
(BroadBand Security, Inc.)
Awarded for eight consecutive years since 2015as an excellent company.

■ Brand Profile

Knowledge of TV
commercial

Platinum Kurumin Plus

Fiscal 2022 Homepage Quality Ranking
Survey of All Listed Companies(Nikko Investor Relations Co., Ltd.)
Received highest award as excellent website incomprehensive ranking for eight consecutive
years since fiscal 2015.

TIS INTEC Group Value Creation*The inclusion of TIS Inc. in any MSCI INDEX, and the use of MSCI logos, trademarks, service marks or index names
herein, do not constitute a sponsorship, endorsement or promotion of TIS Inc. by MSCI or any of its affiliates. The
MSCI Indexes are the exclusive property of MSCI. MSCI and the MSCI index names and logos are trademarks or service
marks of MSCI or its affiliates.

JPX-Nikkei Index 400

Top Message

MSCI Japan Empowering Women
Index (WIN)Constituent stock in 28th annual selection(2022) of companies that consistently
maintain high standard of disclosure

Introduction■ Inclusion in SRI Indexes

Overall: No.

Endorsed Initiatives
TIS INTEC Group collaborates with initiatives to promote sustainability issues.

Psychological Safety
AWARD 2023

DC Excellent Company

CDP Climate change

Science Based Targets initiative (SBTi)

TCFD (Task Force on Climate-related
Financial Disclosures)

JCI (Japan Climate Initiative)

UNGC (United Nations Global Compact)

Keidanren (Japan Business Federation)”Charter of Corporate Behavior”

PRIDE Index

As a member company of Nippon Keidanren, TIS
respects and practices the spirit of the Charter ofCorporate Behavior to realize a sustainable society.

119

120

Corporate Information/Data

Telework Pioneer

Grand Prize in Good Career
Company Award 2020

Platform for Value Creation

Nikkei Smart Work /Nikkei SDGs