Please note this report is a summary of disclosure documents prepared for the convenience of shareholders and other investors outside Japan. In the eventof any discrepancy between the translation and the Japanese original, the latter shall prevail.

October 30, 2023

Consolidated Financial Statements
for the First Half of the Fiscal YearEnding March 31, 2024 [Japanese standard]
INES Corporation
Listing:
Representative:
Contacts:
Head Office:
URL:

Tokyo Stock Exchange (Code: 9742)
Koichi Yoshimura, President & Representative Director
Satoshi Numazaki, Assistant General Manager, Corporate Staff Division
Tel: +81-3-6864-3650
3-10-1, Harumi, Chuo-ku, Tokyo 104-0053, Japan
Tel: +81-3-6864-3650
https://www.ines.co.jp/en/

1. Consolidated Financial Results for the First Half of the Fiscal Year Ending
March 31, 2024 (April 1, 2023 to September 30, 2023)(1) Consolidated Operating Results(Million yen, figures in percentages denote year-on-year changes.)
Profit attributable toOperating profit
Ordinary profit
owners of parent

Net sales
Six months ended Sep. 30, 2023

19,612(1.9%)

856(43.9%)

890(43.0%)

473(52.3%)

Six months ended Sep. 30, 2022
(Note) Comprehensive income

19,987
5.6%
1,525
80.3%
1,563
74.9%
Six months ended September 30, 2023: ¥612 million (-31.5%)
Six months ended September 30, 2022: ¥895 million (29.3%)

991

98.3%

Profit per share (Yen)

Fully diluted profit per share(Yen)Six months ended Sep. 30, 2023

22.76

―

Six months ended Sep. 30, 2022

47.68

―

Total assets

Net assets

53,24336,394(2) Consolidated Financial Position
As of September 30, 2023
As of March 31, 2023
(Reference) Shareholders’ equity(Million yen)
Equity ratio (%)
68.4

48,52336,286
74.8
As of September 30, 2023: ¥36,394 million
As of March 31, 2023: ¥36,286 million

2. Dividends
Dividends per share (Yen)End of Q1

End of Q2

Fiscal year ended March 31, 2023

―

20.00

Fiscal year ending March 31, 2024

―

25.00

End of Q3

Fiscal year end
―

25.00

Annual
45.00

Fiscal year ending March 31, 2024
―
25.00
50.00
(Forecast)(Note) Revisions to dividend forecasts published most recently: Yes
The Company has decided to pay a second quarter-end dividend of ¥25 for the fiscal year ending March 31, 2024 (forecast). The second
quarter-end dividend had been undecided. The annual dividend forecast, including the year-end dividend, remains unchanged. Fordetails, please refer to the “Notice Concerning Determination of Dividends from Surplus (Interim Dividend) and Year-End Dividend
Forecast” released today (October 30, 2023).

3. Forecasts for Consolidated Financial Results for the Fiscal Year Ending March31, 2024 (April 1, 2023 to March 31, 2024)
Net sales(Million yen, figures in percentages denote year-on-year changes.)
Profit attributable toProfit per share
Ordinary profit
owners of parent(Yen)

Operating profit

Full year
41,500(2.1%)
3,000 (21.1%)
2,800 (27.9%)
1,700 (33.1%)
81.72(Note) Revisions to results forecasts published most recently: Yes
For details on the revisions to the consolidated financial results forecasts, please refer to the “Notice of Revision of Performance
Forecast” released today (October 30, 2023).

1

* Notes(1) Significant changes in subsidiaries during the first half under review (changes in subsidiaries causing achange in the scope of consolidation): No(2) Application of special accounting treatment to the preparation of consolidated financial statements: Yes(3) Changes in accounting policies and changes or restatement of accounting estimates
1. Changes in accounting policies associated with the revision of accounting standards, etc.: No
2. Changes in accounting policies other than 1.: No
3. Changes in accounting estimates Yes
4. Restatement: No(4) Number of shares outstanding (common shares)
1. Number of shares outstanding at the term end (including treasury shares)
FY2024/3 H1:
20,900,000 shares
FY2023/3:
20,900,000 shares
2. Number of treasury shares at the term end
FY2024/3 H1:
96,137 shares
FY2023/3:
104,676 shares
3. Average number of shares outstanding
FY2024/3 H1:
20,800,797 shares
FY2023/3 H1:
20,794,180 shares* Quarterly consolidated financial statements are placed outside the scope of quarterly reviews performed by acertified public accountant or an audit corporation.
* Explanation regarding the proper use of results forecasts and other important notes(Disclaimer regarding forward-looking statements)
Forward-looking statements such as results forecasts provided in this document are prepared based on currently
available information and assumptions that are deemed reasonable, but the Company does not intend to guarantee
their achievement. Actual results may differ significantly from the above forecasts for various reasons. For
conditions regarding the assumptions for results forecasts and notes on the use of results forecasts, etc., please referto page 5 of the accompanying materials “1. Qualitative Information on Financial Results for the First Half of theFiscal Year Ending March 31, 2024, (3) Explanation on future forecast information such as consolidated results
forecasts.”2

1. Qualitative Information on Financial Results for the First Half of the Fiscal
Year Ending March 31, 2024
(1) External environment and the Company’s initiatives in the first half under review
During the first half under review, the severity of COVID-19 was downgraded to a category 5 infectious disease
under the Infectious Diseases Control Law, and the Japanese economy staged a moderate recovery, withimprovements in employment and income. Meanwhile, there were still downside risks to global economies,
such as the prolonged Russia-Ukraine war and global inflation and monetary tightening. These factors put
downward pressure on the Japanese economy.
In this environment, the Group has been conducting its businesses with a focus on three basic policy measures,supporting the standardization of local governments’ WebRings information system to meet the national
government’s specifications, enhancing DX solutions and accelerating sustainable management, in the final
year of its 2023 Medium-term Management Plan.
The Group is working on developing the WebRings information system to support the standardization of thelocal governments’ system based on specifications prepared by the Ministry of Internal Affairs andCommunications, while stepping up efforts to recruit more staff and improve quality. The Company establisheda business partnership with Japan Information Processing Service Co., Ltd. in the area of business for local
governments. The companies will deal with the standardization, which will begin in earnest in fiscal 2024, anddevelop and provide next-generation services. Taking advantage of the partnership, the Group aims to expand
market share and provide comprehensive support to customers.
To enhance DX solutions, the Group sought to develop and sell solutions, such as “AI Consultation Partner”,
which was jointly developed with Mitsubishi Research Institute, Inc., “Tetsuzuki Baton”, which supports thedigitalization of administrative procedures, and “Madoguchi Shien Service”, which improves the efficiency of
local governments’ counter services.
In terms of the acceleration of sustainable management, the Company transitioned to a company with an auditand supervisory committee in June 2023 to enhance corporate governance. The Group is steadily working
towards developing its human resources. The Company was selected as the Rising Star of the Year of AWS
Japan Certification Award 2022. The award is presented by Amazon Web Services Japan G.K., which isinvolved in Gov-Cloud of the Digital Agency. The Company’s active employee education and its employees’achievement of AWS certification were recognized. The Company will continue working to create anenvironment and culture in which all employees shine, grow sustainably and participate actively and move
forward with sustainable management.
The Company established the Yaesu Office near Tokyo station in May this year. The office is positioned as a
hub of all operations of the Company. The office serves as the central location for all Company operations. In
September, the Company acquired an office building near Suitengumae Station. The office building will havethe headquarters functions of INES Group companies. With this, the Group aims to make decisions about
Group management more promptly, improve productivity, facilitate communication, strengthen themanagement base, and enhance corporate value.
(Note) The product names and company names above are trademarks or registered trademarks.

3(2) Details of operating results
Consolidated net sales for the first half under review decreased 1.9% year on year, to ¥19,612 million (pleaserefer to “Consolidated net sales and operating profit in the first half of the past five fiscal years” and“Consolidated net sales by sector,” which are shown in the tables below). Net sales in the Public sector cameto ¥8,497 million, a decrease of 5.9% year on year, chiefly due to a decrease in sales from the development ofwelfare-related systems. Net sales in the Financial sector stood at ¥5,803 million, which was almost unchanged
from the previous year, or up 0.2% year on year. Net sales in the General Industry sector rose 2.9% year onyear, to ¥5,311 million, mainly reflecting the strong performance of cloud services.
On the profit front, operating profit decreased 43.9% year on year to ¥856 million and ordinary profit fell
43.0% year on year to ¥890 million, largely reflecting a decrease in sales in the Public sector and an increasein costs due to the opening of new sales offices. As a result, the Company recorded a profit attributable toowners of parent of ¥473 million (down 52.3% year on year).
Net sales and operating profit in the first half of the past five fiscal years(Million yen)
1H of FY2023

1H of FY2019

1H of FY2020

1H of FY2021

1H of FY2022

Net sales

19,822

19,71618,923

19,987

19,612

Operating profit

1,495

1,363

846

1,525856

Consolidated net sales by sector(Million yen)Six months ended September 30, 2022
Category/Term

AmountComposition ratio(%)

Six months ended September 30, 2023
AmountComposition ratio(%)

YoY change (%)

Public

9,030

45.2

8,497

43.3

(5.9)

Financial

5,794

29.0

5,803

29.60.2

General industry

5,163

25.8

5,311

27.1

2.9

Total

19,987100.019,612

100.0(1.9)(Note) Effective from the first quarter of the fiscal year under review, net sales of the Group companies that wereincluded in Other previously have been reclassified and presented in the Public, Financial and GeneralIndustry sectors due to the restructuring of the Group’s businesses. Net sales in the first half of the previous
fiscal year are reclassified and presented in the same way.
Consolidated net sales by product/service(Million yen)Six months ended September 30, 2022
Category/Term

AmountComposition ratio(%)

Six months ended September 30, 2023
AmountComposition ratio(%)

YoY change (%)

System development

7,749

38.8

7,261

37.0(6.3)

System operation

7,429

37.2

7,283

37.1(2.0)

System maintenance

2,388

11.9

2,410

12.3

0.9

Sales of informationequipment

449

2.3

447

2.3(0.6)

Other

1,970

9.8

2,210

11.3

12.1

Total

19,987100.0

19,612100.0(1.9)

4(3) Explanation on future forecast information such as consolidated results forecasts
The Company revises its net sales forecast due to expected decreases in local governments’ investments in new
systems and projects related to legal revisions, which are more than previously anticipated, in the Public sector
before the full-scale standardization of operational systems at local governments from the next fiscal year.
It revises its forecasts for operating profit, ordinary profit and profit attributable to owners of parent due to theaforementioned expected decrease in net sales and expected additional expenses from the relocation from therented Yokohama office, which is happening sooner than originally planned.
Revisions to forecasts for the consolidated financial results for the fiscal year ending March 31, 2024 (April 1,2023 to March 31, 2024)
Net sales(Million yen)

Operating profit(Million yen)

Profit attributableto owners ofparent(Million yen)
(Million yen)

Ordinary profit

Profit per share(Yen)

Before the revision (A)(Announced on April
28, 2023)

43,000

4,000

4,000

2,600

125.03After the revision (B)41,500

3,000

2,800

1,700

81.72

Change (B-A)(1,500)(1,000)(1,200)(900)

Change (%)(3.5)(25.0)(30.0)(34.6)

42,404

3,801

3,882

2,541

Results in the previousyear (Fiscal year ended
March 31, 2023)122.20

The Company has decided to pay a second quarter-end dividend of ¥25 for the fiscal year ending March 31,
2024 (forecast). The second quarter-end dividend had been undecided. The annual dividend forecast, including
the year-end dividend, remains unchanged.
(Caution on future forecast information)
Forward-looking statements such as results forecasts provided in this document are prepared based on currently
available information and assumptions that are deemed reasonable, but the Company does not intend to guarantee
their achievement. Actual results may differ significantly from the above forecasts for various reasons.

5Quarterly Consolidated Financial Statements and Important Notes
Quarterly consolidated balance sheet
As of March 31 and September 30, 2023
(Million yen)
As of March 31, 2023
ASSETS
Current assets
Cash and deposits
Notes and accounts receivable - trade, andcontract assets
Securities
Work in process
Raw materials and supplies
Prepaid expenses
OtherAllowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation
Buildings and structures, netTools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, netLand
Construction in progress
Total property, plant and equipment
Intangible assets
Software
Other
Total intangible assets
Investments and other assets
Investment securities
Long-term prepaid expenses
Deferred tax assets
Other
Total investments and other assets
Total non-current assets
Total assets

6

As of September 30, 2023

9,376

9,691

11,960

8,205

2,300
268
66
454
514
(16)
24,924

–
675
59
481
679
(13)
19,7793,710(3,204)506
4,583(3,494)
1,089
3
1
1,600

4,282(3,303)
979
4,665(3,600)
1,065
5,281
3,953
11,279

2,241
24
2,265

2,303
23
2,327

13,236
678
4,490
1,328
19,733
23,59948,523

13,354
657
4,428
1,415
19,85633,46353,243

Quarterly consolidated balance sheet
As of March 31 and September 30, 2023
(Million yen)
As of March 31, 2023
LIABILITIESCurrent liabilities
Accounts payable - trade
Accrued expenses
Income taxes payable
Accrued consumption taxes
Advances received
Provision for bonuses
Provision for bonuses for directors (and otherofficers)
Provision for losses on orders received
Asset retirement obligations
Other
Total current liabilities
Non-current liabilities
Long-term borrowings
Provision for retirement benefits for directors(and other officers)
Net defined benefit liability
Asset retirement obligations
Other
Total non-current liabilities
Total liabilities
NET ASSETS
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Remeasurements of defined benefit plans
Total accumulated other comprehensive
incomeTotal net assets
Total net assets and liabilities

7

As of September 30, 2023

2,006
1,261
908
363
191
959

1,840
1,012
564
209
597
955

73

39

48
–
601
6,414

42
27
801
6,091

–

5,000

102

107

4,608
276
834
5,822
12,237

4,403
430
815
10,756
16,84815,00010,10011,682(155)
36,627

15,00010,099
11,636(139)
36,596

(179)

(74)

(162)

(127)

(341)

(202)

36,28648,52336,39453,243

Quarterly consolidated statement of income
For the six months ended September 30, 2022 and 2023
(Million yen)
1H of FY2022(April 1, 2022 toSeptember 30, 2022)
19,987
15,384
4,603
3,078
1,525

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Dividends income
Other
Total non-operating income
Non-operating expenses
Interest expenses
Loss on investments in investment partnerships
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on liquidation of subsidiaries and associates
Total extraordinary incomeExtraordinary losses
Loss on retirement of non-current assets
Total extraordinary losses
Profit before income taxes
Income taxes
ProfitProfit attributable to owners of parent

8

1H of FY2023(April 1, 2023 toSeptember 30, 2023)
19,612
15,492
4,120
3,264
856

24
5
10
41

26
6
9
420–
2
2
1,563

0
52
8890

–
–

18
18

0
0
1,563
572
991
991

4
4905
431
473
473

Quarterly consolidated statement of comprehensive income
For the six months ended September 30, 2022 and 2023
(Million yen)

ProfitOther comprehensive incomeValuation difference on available-for-sale securities
Remeasurements of defined benefit plans, net of tax
Total other comprehensive income
Comprehensive income
Comprehensive income attributable
Comprehensive income attributable to owners of parent

9

1H of FY2022(April 1, 2022 toSeptember 30, 2022)
991

1H of FY2023(April 1, 2023 to
September 30, 2023)
473

(171)
74(96)
895

104
34
139
612

895

612

Quarterly consolidated statement of cash flow
For the six months ended September 30, 2022 and 2023
(Million yen)
1H of FY2022(April 1, 2022 toSeptember 30, 2022)
Cash flows from operating activities
Profit before income taxes
Depreciation
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for bonuses for directors (and otherofficers)
Increase (decrease) in provision for loss on order received
Increase (decrease) in provision for retirement benefits for directors(and other officers)
Increase (decrease) in retirement benefit liability
Loss (gain) on liquidation of subsidiaries and associates
Loss on retirement of non-current assets
Decrease (increase) in trade receivablesDecrease (increase) in inventories
Decrease (increase) in other assets
Increase (decrease) in trade payables
Increase (decrease) in other liabilities
Other, net(Subtotal)
Income taxes refund
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Net decrease (increase) in time deposits
Net decrease (increase) in short-term investment securities
Purchase of property, plant and equipment
Purchase of intangible assets
Purchase of long-term prepaid expenses
Purchase of investment securities
Proceeds from liquidation of subsidiaries and associates
Payments of leasehold and guarantee deposits
Proceeds from refund of leasehold and guarantee deposits
Payments for asset retirement obligations
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Proceeds from long-term borrowing
Repayments of lease obligations
Purchase of treasury shares
Cash dividends paid
Net cash provided by (used in) financing activities
Net increase (decrease) in cash and cash equivalents
Beginning cash and cash equivalent balanceEnding cash and cash equivalent balance
101H of FY2023(April 1, 2023 to
September 30, 2023)

1,563
972
(24)

905
873
(4)

(33)

(33)

(30)

(6)

(11)

4(52)
–
0
1,759
(280)
33(446)
(339)
4
3,114
12(544)
2,582

(163)
(18)
4
4,161
(400)
1(166)
(840)
21
4,336
6(773)
3,569

–
–
(111)
(232)
(117)
(1)
–
(197)
55
(1)
9(596)

02,300(9,410)
(418)
(137)
(1)
30(148)60(2)
1(7,727)

–
(8)
(1)
(415)
(425)
1,560
9,731
11,292

5,000
(7)
(1)
(518)
4,472
315
9,1629,477