TIS INTEC Group Logo
Underlying Concepts
The logo portrays the TIS INTEC Group as a tightly knit
TIS INTEC Group Logoteam, powered forward by the different sets of expertise
Underlying Concepts
that each member brings to the table. It features our
The logo portrays the TIS INTEC Group as a tightly knit
two main corporate colors: “ocean blue” for theteam, powered forward by the different sets of expertisenew challenges that we are constantly tackling, andthat each member brings to the table. It features our“intelligent gray” for the solid technological foundations
two main corporate colors: “ocean blue” for thethat underpin our business.
new challenges that we are constantly tackling, and“intelligent gray” for the solid technological foundations
Brand Message
that underpin our business.
The brand tagline, “Go Beyond,” embodies our constantquest into the beyond in search of new challenges. It
Brand Message
represents our firm commitment as a group to delivering
The brand tagline, “Go Beyond,” embodies our constantsolutions that are always one step ahead, not only solving
quest into the beyond in search of new challenges. It
clients’ problems but anticipating and meeting their own
represents our firm commitment as a group to delivering
customers’ needs too.
solutions that are always one step ahead, not only solving
clients’ problems but anticipating and meeting their own
customers’ needs too.

TIS Inc.
Sumitomo Fudosan Shinjuku Grand Tower,
17-1, Nishi-Shinjuku 8-chome, Shinjuku-ku, Tokyo, 160-0023, JapanTIS Inc.

ForfurtherFudosan
information,
contact:
Sumitomo
Shinjuku
Grand Tower,
Corporate Management Dept., Corporate Planning SBU
17-1, Nishi-Shinjuku 8-chome, Shinjuku-ku, Tokyo, 160-0023, Japan
Tel: +81-3-5337-4569
E-mail:tis_ir@tis.co.jp
Forfurther
information, contact:
http://www.tis.com/
Corporate Management Dept., Corporate Planning SBU
Tel: +81-3-5337-4569
TIS202009
E-mail: tis_ir@tis.co.jp
http://www.tis.com/
TIS202009

Integrated Report 2020
Year Ended March 31, 2020 (From April 1, 2019, to March 31, 2020)

Securities Code: 3626

Using advanced technology and know-how, we will create
vibrancy in a new society and make more people smile.
We will be there to build the future of this society.
Through the power of IT, the TIS INTEC Group willcontinue to make society’s wishes come true.

MissionWhat does the TIS INTEC Group do?

■ TIS INTEC Group Philosophy—OUR PHILOSOPHY

To brightly color the future as a mover

Our mission, as the TIS INTEC Group, is to fulfill a social role, but our mission also symbolizes a corporate raison d’être. The word
“mover” refers to the people who create objects, services and systems that take the world—that is, the world around us—to a newlevel. For us, “mover” encompasses the TIS INTEC Group and the people at companies under the Group umbrella. As a mover drawing
on the power of digital technology, the TIS INTEC Group will infuse the future—still essentially a blank canvas—with vibrant colors byproviding innovative possibilities and options that appeal to society.

CONTENTS
What does the TIS INTEC Group do?
TIS INTEC Group Philosophy—OUR PHILOSOPHY
About the TIS INTEC Group
History of TIS INTEC Group
Positioning in the IT Services Market
Consolidated Financial / Non-Financial Highlights

Platform that Supports Value Creation Process
2
3
5
7
9

TIS INTEC Group Value Creation Process
TIS INTEC Group Value Creation Process
To Our Stakeholders
Sustainability

11
13
17

Medium-Term Management Plan (2018–2020)
Outline of Medium-Term Management Plan
Progress on Medium-Term Management Plan
Looking Back on Past Medium-Term Management Plans
Activities under Medium-Term Management Plan
Message from the Executive Vice President
Business Strategies and Performances by Segment

Communication with Stakeholders
Corporate Governance
Messages from Our External Directors
Risk Management
Quality Control and Production Innovation
Communication with Employees
Communication with Clients and Business Partners
Communication with Shareholders and Investors
Communication with Communities and Society
Contributing to Global Environmental Protection

47
48
62
63
65
67
70
71
72
73

Corporate Data
21
23
24
25
39
43

Consolidated Financial Summary
Non-Financial Summary
Corporate Data
Evaluations from External Parties
Introduction to Our Website

75
79
81
85
86

Editorial Policy
We have opted for an integrated report that provides key financial as well as non-financial content to enable all stakeholders, particularly shareholders and investors, to better understand themeasures that we have taken to achieve sustainable improvement in the corporate value of the TIS INTEC Group. Please check our website for further information, as many of the topics wecover in the report are updated on the website.
http://www.tis.com/
Scope of reporting: TIS (parent) and TIS INTEC Group
Issued: September 2020
Disclaimer: Forward-looking statements, such as performance forecasts, described in this report are based on information available to management regarding the TIS INTEC Group—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 implied by the Company to achieve suchforward-looking statements. Indeed, various factors may cause future results to be substantially different from the assumptions presented in these materials.
The names of the products and services described in this report are trademarks or else registered trademarks of the respective company.

12

Three Strengths of the TIS INTEC Group

What does the TIS INTEC Group do?

About the TIS INTEC GroupThe TIS INTEC Group is one of Japan’s leading IT corporate groups.
With some 20,000 employees groupwide, we draw on composite
insights and experience and sophisticated technological capabilities
accumulated over many years to help solve various social issues.

1. Solid management platform
2. Dominant presence in payment services domain
3. Flexible management strategies and speedy
decision-making thanks to independent status■ TIS INTEC Group by the Numbers■ Net Sales by Business Segment (Year ended March 31, 2020)(Sales to outside customers, excludes intersegment sales)

OthersConsolidated
Net Sales

Consolidated
Operating Income(Year ended March 31, 2020)(Year ended March 31, 2020)¥443.7billion¥44.8
billionConsolidated Operating
Income to
Net Sales Ratio(Year ended March 31, 2020)

0.9%

Others¥4,153 million
Includes a number of ancillary businesses that provide leasing andother information systems to clients.

25.1%
Industrial IT
Business¥443,717 million

BPO

6.9%

Industrial IT Business¥183,292 million
Utilizes business and operatingknow-how specific to non-financeindustries to raise value-added
quality of clients’ operations,
expand use of IT, and provide
IT-based support for operations.

Consolidated ROE

Consolidated
Equity Ratio(Year ended March 31, 2020)(Year ended March 31, 2020)（At November 15, 2019）

12.5%

63.3%

A /Stable

BPO¥30,688 million
Draws on Group’s extensive service
menu and IT know-how to deliver
business process outsourcing (BPO)
services, including marketing andsales services and office and contract operations.

Financial IT
Business

25.8%

Financial IT Business¥114,204 million

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

Provides original knowledge-intensive IT services leveraging TIS’ service and industry know-how tocreate universalized, template-oriented solutions for clients (includes
default configuration and ERP).

Total

41.3%

10.1%

Service IT Business¥111,377 million

Services IT
Business

Leverages business and operatingknow-how specific to the financial
sector to raise value-added qualityof clients’ operations, expand use ofIT, and provide IT-based support for
operations.

■ Net Sales by Client Sector (Year ended March 31, 2020)
We have built an extensive but well-balanced client base covering financial sectors, industrial sectors—including manufacturing,
services and distribution—and the public sector.
PublicsectorPublic sector
Number ofGroup Companies

Number of Employees,
Consolidated(As of March 31, 2020)(As of March 31, 2020)

123(TIS + consolidated subsidiaries+ equity method affiliates)

19,744

Number of
Clients(Year ended March 31, 2020,
domestic)

About 15,000
companies

8.2%

Major clients

8.2%

Health Insurance Organizations✓ Japan Housing Finance Agency

Credit card

¥443,717
Service25.4%

million

Percentage of sales fromtop 10 client companies

24.9%
Industrial
sectors

52.2%

Financialsectors

16.9%

Total

Industrial sectors✓ Asahi Kasei✓ Komatsu✓ Tokyo Gas✓ Recruit

3.8%

PublicOthersinstitutions 3.8%

✓ Local governments✓ Federation of National

Major clients

Other
sectors

35.8%
Banking

6.8%

Financial sectors
Major clients✓ JCB✓ MUFG Bank
✓ Nippon Life

Insurance

6.6%

Other
financial

5.5%

Assemblybased
Distribution
manufacturing
Processing7.7%
based
10.3%
manufacturing

8.8%*Client names are short-form.

3

4

What does the TIS INTEC Group do?

History of TIS INTEC GroupThe TIS INTEC Group was formed in April 2008 as a leading, independent corporate group in the information services industry. TIS took advantage of its transition toan operating holding company in July 2016 to accelerate uniﬁed Group management and today the Company leads the Group toward realization of Group Vision 2026
and sustainable improvement in corporate value.

■ The TIS INTEC Group has, in one form or another, provided industry-leading
services since the dawn of the domestic information services industry.
1964

Toyama Computer Center, Inc.
(now, INTEC) established.

April 2008

New independent, leading company on
the IT services scene
IT Holdings Corporation (ITHD) was createdthrough the management integration of
TIS Inc. and INTEC Holdings, Ltd., to ensure
growth through shared use of both companies’
management resources.

2008–2009

ITHD Group is reorganized. INTEC Holdings ismerged into INTEC, and nine TIS subsidiaries are put
under the direct control of ITHD.

December 20091971

April 2011SORUN Corporation joined the
ITHD Group.

Toyo Information Systems,
Co., Ltd. (now, TIS) established.

Period ofestablishment

April 2000

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

June 2014

ITHD debuted a single logo for all
Group companies and adopted a
new brand message, “Go Beyond”.

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

May 2015

Discussions on Groupreorganization began

July 2016

Transition to TIS INTEC Group
ITHD executed an absorption-style merger with TIS, adopted its subsidiary’s high-profile nameand transitioned to an operating holding company. Embraced governance system that prioritizes
overall optimization of the Group, fueled by the cohesive power of core companies.

March 2015

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

May 2017

April 2018

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

Launched current medium-term management plan

First Medium-Term
Management Plan

Second Medium-Term
Management Plan

Third Medium-Term
Management Plan

Group management
emphasizing independenceof each company

Overall optimizationof the Group andgreater sense of unity

Portfolio management, ina project sense, combining
exceptional businesses and key
strengths into a single approach

February 2002

Medium-Term Management Plan (2018–2020)

Structural transformation
11.5%

9.9%

12.5%

11.8%

10.1%

10.0%

Turned AGREX Inc. into subsidiary.

April 2004

9.0%

Turned UFIT Co., Ltd., into subsidiary.

April 2005

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

6.0%
4.8%

¥405.6 billion¥443.7 billion¥420.7 billion

5.9%

Noteworthy:
Fiscal 2020 Results

Noteworthy:
Fiscal 2021 Targets¥361.0 billion

Posted new performancerecords, extending increases
in sales and income for 10
and nine consecutive years,
respectively

Anticipating lower sales andincome as consequence of
COVID-19 pandemic, butwill strive to hold income at
year-on-year par and keep
operating margin at 10%
on performance basis

1.5%

Net sales (Billions of yen)¥440.0 billion

8.1%

7.4%
7.0%

Achieved all four KPIs statedin medium-term management plan a year ahead ofschedule

Operating margin (%)
ROE (%)Group
Vision2026¥338.3 billion¥327.4 billion

Fiscal2009

5

Fiscal
2012

Fiscal2015

Fiscal2018

Fiscal
2019

Fiscal
2020

Fiscal2021(estimates)

2026

6

■ Examples of IT services in the TIS INTEC Group portfolio that help supportclients’ businesses, the lifestyles of individuals and social infrastructure

TIS INTEC Gropu 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.

What does the TIS INTEC Group do?

Positioning in the IT Services Market■ IT Services Market Size in Japan (moderate case)(Billions of yen, %)YOY change
20

18,000Supporting 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

50%

Service provision/systemdevelopment results
Domestic market share

About(On annual transaction volume basis for clients served)

Of 25 companies in Japan with significant
consumer credit transaction volumes, 11 arein the Group’s client base for core systemdevelopment.
Credit extended for card-facilitatedpurchases has reached ¥73 trillion in Japan.
The 11 companies that are in the TIS INTECGroup client base have aggregate
membership of about 200 million people andcredit transaction volume representing about
50% of the total market.

80%

There are about 450 million debit cards
affiliated with an international brand inJapan. Settlement transactions have reachedabout 370 million per year, with an aggregate
value of about ¥1.8 trillion. The TIS INTECGroup boasts an overwhelming share—about
80%—of the market, on a transactionhandling financial institution basis, throughsuch solutions as DebitCube+, which
provides one-stop access to services requiredor branded debit card issuance and operation.

Support centralized information
management at financial institutions and raise
efficiency and sophistication of operations

F3 (F Cube)

15,000

CRM implementation

12,00038 of 64 banks

9,000(regional banks)

Of note, share of top 30 regional banks (total
funds) at 80%.
F3 CRM System for financial institutions
has been installed at more than half of theregional banks in Japan. In addition, demand
for a cloud-based application is rapidly
expanding, with overall delivery of the F3
series reaching more than 90 financial
institutions.

12,631.8 12,360.4

12,838.2 13,653.2

14,423.1 15,149.8 16* Gartner “Forecast IT Service Japan by Vertical Industry 2Q20”
M. Sawai/August 31, 2020: PFST-J1-MT-2017
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 as part of a syndicated subscription service byGartner, Inc., and have not been reviewed by Gartner. Each
Gartner publication speaks as of its original publication date(and not as of the date of this report). The opinions expressed
in Gartner publications are not representations of fact and are
subject to change without notice.

12

6.3

6.8

6,000

8

5.6

5.0

4

3.9

0

3,000

–2.1
0

2019

2020

2021

2022

2023

2024

–4

■ Comparison of Japan’s Leading IT Companies (Year ended March 31, 2020)
Net Sales (Billions of yen)Supporting greater operating
efficiency in e-commerce

Highly evaluated as restaurant
sector-specific shop management system

Aiding new entrants tothe deregulated power market

TastyQube

EneLink

EDI

System configuration andoperation track record

System implementation

Number of access points

About

140,000

identifiers
We enjoy the largest share of the world
market for electronic data interchange (EDI)
services, which are used in all industries andsectors. We responded quickly to Internetbased EDI issues affecting payment card
industry data security standard (PCI DSS)
compliance and the EDI 2024 problem, andhave built an extensive track record inbuilding and operating industry EDI platforms.

Contributing to stable insurance
system platform creation

For Federation of
National Health Insurance
Associations

20%(Top 200 companies in the restaurant sector)

TastyQube is highly versatile and can beapplied to any restaurant format, helps tovisualize shop operations, and realizes
enhanced operating efficiency.
The solution has been applied to about
20% of market share, mainly for restaurants,
cafes and pubs.

Share of switchers in Japan
About

40%

EneLink is the choice of about 40% of users
switching to PPSs since deregulation ofJapan’s electricity retail market began in April
2016. In addition, the lineup is being
expanded to meet wider market participation,
including new entrants into city gas andaggregation businesses*1.

12 of 47 prefectures

Annually

528.8

500.0

387.0
311.5

274.8

UNISYS

NSSOL

200.0
100.0
0

NTT
Data

NRI

CTC

TIS

SCSK

18

130.9 15.7%

15

125.0

80 million entries

The TIS INTEC Group is the expert in domestic
BPO services, with more than 50 years ofhistory in the field.
Data entry services, facilitated primarily
through top-class systems in Japan andnetworks at home and abroad, have reachedabout 80 million entries a year.

443.7

300.0

100.0

About

487.0

400.0

150.0

Data entry services
Handling volume2,266.8

Operating Income, Operating Margin (Billions of yen)

Helping to promote management
strategies using BPO services toboost productivity

Track record in system implementation/
operation/maintenanceOf the 47 prefecture-based members of theFederation of National Health Insurance
Associations in Japan, the TIS INTEC Grouphas been tapped to install, operate andmaintain systems for 12 members*2.
About 6.1 million people are covered bythese 12 insurance associations.

7

About

Usage

2,300.0

83.2

10.1%

75.0

Note: Market data (market share) is based on TIS research.
*1 Optimum control by bundling energy sources, such as
storage batteries, power-generation facilities anddemand-response providers, to stabilize the grid andavoid output control on renewable energy.
*2 The scope is National Health Insurance system andmedical care system for elderly in the latter stage of life.

50.0

5.8%

44.8

10.9%

8.6%

42.3

41.7

10.3%

NTT
Data

NRI

TIS

SCSK

CTC

8.4%

9
6

28.4

26.1

NSSOL

UNISYS

25.0
0

12

3
0

*The graph data indicates consolidated figures (fiscal 2020) of NTT DATA
Corporation, Nomura Research Institute, Ltd., ITOCHU Techno-Solutions
Corporation (CTC), TIS Inc., SCSK Corporation, Nihon Unisys, Ltd., and NS
Solutions Corporation.
*NTT DATA and CTC amounts are based on the IFRS (International
Financial Reporting Standards).

8

Net Sales

Operating Income,Operating Income to Net Sales Ratio(Millions of yen)443,717382,689 393,398

405,648

420,769(Millions of yen, %)Operating Income
Operating Income to Net Sales Ratio 44,839
38,04332,74324,436
6.4

8.1

27,0196.9

9.0

Net Income Attributable to Owners of
the Parent Company (Millions of yen)
Net Income per Share (Yen)Net Income Attributable to Owners of the Parent Company
Net Income per Share
29,411
26,034

10.1

Order Backlog at Year-End(Software Development)(Millions of yen)

(Millions of yen)

246,330

207,345 208,307

219,225

238,298

69,961307.83

20,620Free Cash Flow
(Millions of yen)

75,54979,27764,751

36,34534,18467,71622,184241.4416,306
12,678350.35

Orders Received during the Term
(Software Development)

What does the TIS INTEC Group do?

Consolidated Financial/Non-Financial Highlights

12,132189.02145.22-4,536
Fiscal 2016 Fiscal 2017 Fiscal 2018 Fiscal 2019 Fiscal 2020

Fiscal 2016 Fiscal 2017 Fiscal 2018 Fiscal 2019 Fiscal 2020

Fiscal 2016 Fiscal 2017 Fiscal 2018 Fiscal 2019 Fiscal 2020

Fiscal 2016 Fiscal 2017 Fiscal 2018 Fiscal 2019 Fiscal 2020

Total Assets, Net Assets

Net Assets per Share, Equity Ratio(Yen, %)

Interest-Bearing Debt Balance,
Interest-Bearing Debt Ratio

ROE, ROA(Millions of yen)(%)

Dividends per Share, Payout Ratio,
Total Return Ratio* (Yen, %)Fiscal 2016 Fiscal 2017 Fiscal 2018 Fiscal 2019 Fiscal 2020

Fiscal 2016 Fiscal 2017 Fiscal 2018 Fiscal 2019 Fiscal 2020

Total Shareholder Return(%)(Millions of yen, %)Total Assets
336,495

Net Assets

337,622

180,539

382,899
366,954 370,657

Net Assets per Share

Ratio
Equity Ratio

2,890.27

Interest-Bearing Debt Balance
Interest-Bearing Debt Ratio

199,202226,298 234,408

247,957

60.4

62.0

35,14463.3

32,876

8.8
26,893

13.7

Fiscal 2016 Fiscal 2017 Fiscal 2018 Fiscal 2019 Fiscal 2020

11.5

9.0

7.2

22,294

7.3

7.0

9.3

12.5

Payout Ratio

Number of Employees at Year-End(Metric tons/MtCO2e)(Person)33.00

Scope1

Scope2
19,393

83,76978,12571,096

19,843

19,877

19,483 19,744

Average Non-scheduled Hours
Worked per Month*

Percentage of Annual Paid
Leave Taken*(Hour)

(%)

22.64

20.63

19.87

18.28

67.63

72.99

31.9

30.5

22.7

19.0

16.6

958

885

Fiscal 2017

Fiscal 2018

Fiscal 2019

123.0

39.8
25.7

39.0
22.8

89.2

Fiscal 2016 Fiscal 2017 Fiscal 2018 Fiscal 2019 Fiscal 2020

75.69

* 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

40

60〜
55〜59

56.74

745

50〜54

823

45〜49

914

Fiscal 2017

Fiscal 2018

Fiscal 2019

Fiscal 2020

Fiscal 2017

Fiscal 2018

Fiscal 201951

Fiscal 2020

118.5

112.5

101.8

1400

2100

0

59 9
122

781

261

621

1,348

600

354

1,278

25〜29

1,330
1,059

47
80
58

355

735

30〜34

〜24
(Age)

718

99
37
10

751
00

758

0 0 659

Management positions (male)Management positions (female)

9

102.3

Fiscal 2016 Fiscal 2017 Fiscal 2018 Fiscal 2019 Fiscal 2020

425 696

1,244

35〜39

Fiscal 2016 Fiscal 2017 Fiscal 2018 Fiscal 2019 Fiscal 2020

132.3

Employee Composition* (As of April 1, 2020) (Person)

64,488

Fiscal 2020

256.7

196.9

40.00

36.00

35.3

40〜44

976

TOPIX including dividends
247.1* Total return ratio: Total amount of dividends and treasury stockbuybacks as a percentage of net income.
* The Company executed a stock split, with each share of common stock split into three shares, effective April 1, 2020. The
0012 are presented
0041 using the
007 number of0 shares0
above figures
before700
the stock split.

Greenhouse Gas Emissions

TIS

70.00

8.0

Fiscal 2016 Fiscal 2017 Fiscal 2018 Fiscal 2019 Fiscal 2020

Total Return Ratio

90.00

10.5

5.8

Fiscal 2016 Fiscal 2017 Fiscal 2018 Fiscal 2019 Fiscal 2020

Dividends per Share

12.2

9.9

10.4

Fiscal 2016 Fiscal 2017 Fiscal 2018 Fiscal 2019 Fiscal 2020

ROA

46,1582,602.07 2,719.79
2,265.76
2,031.07
57.8
52.5

ROE

* The figures are simple combined
averages or weighted averages for
the TIS INTEC Group’s seven principal
companies (TIS, INTEC, AGREX,QUALICA, AJS, TIS System Service,
and TIS Solution Link).

General positions (male)
General positions (female)

10

TIS INTEC Group Value Creation Process

We will balance efforts to realize a sustainable society with efforts toachieve sustainable improvement in corporate value by leveraging
uniﬁed Group management.

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.22

Management
Resources
Diverse workforce
Number of employees(consolidated basis)(As of March 31, 2020)

19,744

Materiality

P.17

Create a society in which
diverse human resources areengaged and thriveHigh technologicalcapabilities
Ample experience andknow-how
Extensive service menu
Aggregate number of solutions(As of March 31, 2020)

About(As of March 31, 2020)

About

15,000Create a safe society
through high-quality
servicescompanies
in Japan

Solid financial position
Net assets(Year ended March 31, 2020)¥

Everything fromsystem operation to
full business process
outsourcing (BPO)

Outsourcing
servicesState-of-the-art outsourcing
network in Japan

Number of clients

247.9

billionEquity ratio

Service IT
Business

Providing optimum, one-stop support across client system
lifecycles and all types of IT-related services

Consulting
services

Enhance corporate
governance and earn thetrust of society

Contractdevelopment style
Provide systems
matched to client
requirements

P.43

Service offering
style
Provide services
that anticipate
client needs

P.44

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

IT platform
configuration
services
Building safe and secure computer
networks, from host to public cloud,matched to client needs

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

Financial IT
BusinessA/stable

P.46

etc

11

Systems to support sustainable growth

Corporate GovernanceRisk Management
Quality Control, Product Innovation¥● Sustainable improvement in shareholder value

and return to shareholders● Highly transparent disclosure● Engaging in constructive dialogue

Improve value
exchange throughvirtuous cycle

P.48
P.63
P.65

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

Business Partners● Create new added-value● Fair, transparent, open competition andappropriate business practices

Industrial IT
Business

63.3 %(At November 15, 2019)443.7 billion
Operating income ¥ 44.8 billion
12.5 %ROE
Net sales

Social value

P.45(Year ended March 31, 2020)

Rating (Long-term)

Secure growth
opportunities
fueled by trustand fulfilling
expectations

BPO

Systemintegration
services

Research
into and accessto leading-edge
technology

Economic value (Fiscal 2020)

Shareholders and Investors

Helping clients use IT
to raise business value

500

Broad customer base

P.21

“Transformation to 2020”
TIS INTEC Group Business Activities

Create a comfortable society
through innovation and joint
activities

Value provided to societyManagement strategies/measures for sustainable growth

Medium-Term Management Plan (2018–2020)

TIS INTEC Group
Value Creation Process

Management
Philosophy● Responsible procurement

Help solve social
issues throughuse of digitaltechnology

Employees● Provide opportunities for growth and personal

development● Provide environment that is safe and comfortable● Promote diversity

Community / Society● Provide systems that support a high-level

information society● Living life feeling safe and secure● Reduce environmental impact

12

To Our Stakeholders

TIS INTEC Group
Value Creation Process

As a mover using digital technology,
we will transform into a company
that takes the lead in deliveringsolutions to social issues.
Toru Kuwano, TIS President and Chairman, talks about the progress under the
Medium-Term Management Plan (2018–2020), future initiatives and the socialrole of the TIS INTEC Group in a post-COVID-19 world.
realized the four key performance indicators (KPIs) set for the last year of the Medium-Term
Q1. TISManagement Plan (2018–2020) in ﬁscal 2020, ended March 31, 2020. This was a year ahead of schedule.
How do you evaluate the results achieved over the ﬁrst two years of the plan?

We saw success through transition to an operating holding company and progress on uniﬁed
Group management.

Toru Kuwano,
Chairman and President

Currently, the TIS INTEC Group is working through the Medium-Term Management Plan (2018–2020)—the firststep toward achieving Group Vision 2026—under the concept “Transformation to 2020—Achieving structuraltransformation as a corporate family and taking the lead in finding solutions to social issues.” We promoted
various measures, underpinned by a basic policy of constant, rapid transformation through sustainable profit
growth, an emphasis on employee self-fulfillment, a concentration on core businesses, a shift to prior investment style of business development and expanded global business. The success of these measures is reflectedin the fact that we reached the four KPI targets—strategic domain sales ratio of 50%, operating income of ¥43billion, operating margin of 10% and ROE of 12%—set for the final year of the current medium-term plan ayear ahead of schedule. And we were successful, I feel sure, because of unified Group management, driven by
the strong leadership of TIS, which became an operating holding company through Group restructuring in July
2016. By promoting various measures expeditiously and widely throughout the Group and getting everyone
actively behind these measures, driven by an emphasis on profitability, we held unprofitable projects to a low
level. In addition, we welcomed a major improvement in the gross profit margin—up from around 18% before
TIS became an operating holding company to around 24% as of fiscal 2020—which created tremendous
momentum and propelled us toward an operating margin of 10%. Not everything unfolded as expected, but
areas where we made great strides forward were sufficient to effectively offset areas where we still have room
for improvement. Overall, we carried out robust prior investment while elevating our position to a level thatcompares favorably with top-ranked companies in our industry. I feel we made wonderful progress in enhancing our corporate capabilities.

We are moving vigorously forward on prior investment but must address proﬁtability inservice-style business.
Under the Medium-Term Management Plan (2018–2020), we are taking a vigorous approach on growth investment, to the tune of ¥80 billion over three years, to promote structural transformation. We have tapped a totalof ¥30 billion for software investment to create new services, human resources investment to fuel structuraltransformation and R&D investment to acquire advanced technologies, and ¥50 billion for investment, including M&As, to grow strategic domains. Of these applications, software investment to create new services thatwill underpin service-style business, such as credit SaaS, exceeds initial plans, as we constantly work to develop
growth engines for the future. In addition, investment to expand business activities in strategic domains hasemphasized alliances with leading companies in terms of marketing channels and technologies as we seek tobecome a top-class IT group in the ASEAN region. A recent highlight of this investment focus is the capital andbusiness alliance formed in February 2020 with Grab Holdings Inc., a top-class ASEAN super app. These are thecomponents of a more extensive operating presence in the ASEAN region and, I would say, mark the start of adramatic new stage in the expansion in the scale of the Group’s overseas operations. Going forward, as thepace of activity grows, we will need to provide updates on the status of overseas expansion and other aspectsof business development abroad based on concrete numerical targets.

13

14

* Service-style business: Business that delivers an unspecified number of accessible, standardized services to a certain sector/industry instead ofcustomizing configuration and installation of standard formats, including systems, to individual requirements.
* For details on strategic domains and service-style business, please go to page 25.
* SaaS (Software as a Service): Method, service or business model for providing software through communication networks or other online channels so that the user can access and utilize the required software whenever needed.

Q2. Describe issues that must be addressed to ensure further progress in structural transformation.

We will seek greater diversiﬁcation of human resources—our No.1 emphasis—and a higher
level of capabilities.
I say this all the time but it really is such a key factor of success. Human resources are the Group’s most valuable management resource. To truly achieve structural transformation, each and every employee must change
and become stronger. With this in mind, we made our human resources strategy a priority in the Medium-Term
Management Plan (2018–2020), and we are vigorously pursuing various measures in line with the personnel
manifesto. As a result, we have seen a steady rise in employee motivation—an achievement that has earned
positive external reviews as well.
Nevertheless, for the TIS INTEC Group to play a role in solving social issues, we must grow beyond the conventional structure of passive system engineers. We must cultivate human resources who anticipate market
needs, look beyond social issues and pinpoint service requirements. These are qualities not yet prevalent among
our workforce. So we will put more emphasis on personnel exchanges within the Group than before, we willencourage cooperation with various companies and organizations outside the Group, and we will welcome
external expertise—people with different know-how and experience—and through this approach, employees
will gain enthusiasm and awareness that effervesce, like a chemical reaction, to energize Group activities.

Brand strategy is vital, fueling motivation, attracting and keeping human resources, andboosting corporate value.
Currently, the Group is unfurling strategic brand activities. One of the trigger points for this process was an
improvement in the enthusiasm that employees have for their work and for the company that they work for. The
brand power that a company—or a corporate group—wields is a reflection of the trust that society places in it.
Strong brand power is the indispensable fuel that will accelerate growth of the TIS INTEC Group as a truly strong
corporate group. Boosting brand power will not only have a favorable impact on recruitment but also elicit
greater pride among existing employees and encourage them to strive harder for success. This will perpetuate avirtuous cycle, with a highly motivated workforce delivering enhanced services, which translate into higher sales,
which allow us to engage in robust business investment and attract people who have the excellent qualifications
we need to keep that cycle going. In the end, we will achieve sustainable improvement in corporate value.

Q3. Describe the activities designed to deepen uniﬁed, groupwide management practices.

TIS INTEC Group
Value Creation Process

Against this backdrop, sales by the service IT business, which consists of service-style business, are expanding favorably, particularly on demand for payment services. But this segment may have a hard time reaching its
operating income and operating margin targets, and this is something we must address. A primary example ofthe issues currently faced is efforts to promote CreditSaaS. The start of services has been pushed back to thenext medium-term management plan, paralleling certain developments, including a larger scale of investment
than initially envisioned given the potential for business expansion in the future. Also, we pursued M&A opportunities from the perspective of investment into promising technology for the future but this put pressure on
profits in the short term.
Going forward, our policy to vigorously promote prior investment with a view toward business growth forthe future and higher corporate value will not change. But we will seek greater sophistication in investment
management to facilitate careful tracking of risks and solid capture of investment returns. Through thisapproach, we will be able to foster growth in service-style businesses and create new markets, and we will beable to boost profitability to the next level through structural transformation.

We will move steadily forward on common systems and core ofﬁce centralization.
The TIS INTEC Group is working on the “G20” project to elevate head office functions, which will lead toenhanced management efficiency. In April 2020, we began introducing common systems groupwide andshared services. In spring 2021, we will open a new, large-scale office in Toyosu, an area of Tokyo recently
attracting attention for huge commercial development projects. This office will be a new base for the Group.
Bringing together the business functions of TIS and INTEC, the office will accelerate unified, groupwide management practices and reinforce cooperation from a business perspective, while the Nishi-Shinjuku office will
centralize the head office functions of TIS and INTEC and enhance Group management capacity and Group
governance. The Toyosu office has been designed with spacious online conference booths and other featurescompatible with today’s new lifestyles as well as spaces where people inside and outside the Group can engage
in free and open discussion. We will make effective use of facilities and the office space to best support ourhuman resources, and this is sure to motivate people and cultivate an innovative corporate atmosphere, which
in turn generates momentum.

do you see as the Group’s social role in a post-COVID-19 world, and what business opportunities
Q4. Whatand risks will characterize the new landscape?

With all aspects of society going digital, the emphasis on IT—and associated expectations—is sure to grow.
The COVID-19 pandemic has been a turning point, reshaping society in major and irreversible ways that continue to unfold. Against this backdrop, the digitization of society is expected to advance at a rapid pace. Goingforward, we will analyze short-term effects on client businesses caused by the COVID-19 pandemic as well asother factors, such as climate change and natural disasters, in addition to possible medium- to long-term
effects caused by changes to industry structure. The use of IT will increase like never before, becoming absolutely indispensable to companies in continuing their business activities and to people in maintaining safety andpeace of mind in their daily routines. The key issue for us, then, is the kind of role we will fulfill.
In that sense, I am reminded of the considerable role that the TIS INTEC Group plays in society as a mover using
digital technology. This idea is conveyed in our recent genie-themed television commercial which carries theslogan “Make society’s wishes come true through IT.” We will transform into a company—and by extension, a
corporate group—that takes the lead in delivering solutions to social issues.

A corporation is a social system that fulﬁls social expectations and contributes to people’s
happiness via value exchange with stakeholders.

It is imperative that we transform into a corporate groupthat leads the way in ﬁnding solutions to social issues.

15

Under OUR PHILOSOPHY, a Group concept announced in January 2019, we made it our mission to fill the
future—as yet an unpainted backdrop—with vibrant colors as a mover using digital technology. The meaning of“mover” implies our movement as a corporate group as well as driving changes in society through our activities.
Companies are increasingly viewed as the key to achieving the United Nations’ sustainable development
goals (SDGs). Given such expectations, TIS will incorporate into the next medium-term management plan strategies and measures built on businesses that have been identified in discussions by the Corporate Sustainability
Committee as having the potential to contribute solutions to social issues. Our goal is to leverage activities as
only the TIS INTEC Group can to realize a sustainable society.
Integral to these activities is an idea contained within OUR PHILOSOPHY—“A corporation is a social systemthat fulfils social expectations and contributes to people's happiness via value exchange with stakeholders.”
Seeing a corporation as a public instrument, we will not promote business expansion merely in pursuit of economic gain but rather emphasize business activities that help solve social issues at home and abroad, generatesocial value, meet society’s expectations and contribute to people’s happiness. Once we accomplish this, we willachieve truly sustainable growth as a corporate group and boost corporate value.
Everyone under the TIS INTEC Group umbrella—directors and employees alike—will continue to work as acohesive team. I ask for the continued support of all stakeholders as we travel toward future success together.

16Sustainability

Seeking to deepen sustainability management
In OUR PHILOSOPHY, the Group’s basic philosophy, a corporation is defined as “a social system that contributes to realization of social expectations as well as people’s happiness through value exchange withstakeholders.” Guided by this philosophy, we will strive to deepen sustainability management to realize asustainable society.

The Sustainability Project was formed to promote a more in-depth approach to finding solutions to social issues and to unifying
management within the TIS INTEC Group. Through this project team, TIS will pinpoint social issues and business domains where
efforts will be focused over the long term. These issues and domains will be integrated into the next medium-term management plan.

Promotion structures of project teamProject team

The TIS INTEC Group will contribute to the achievement of the United Nations’ social development goals (SDGs) throughinitiatives that address materiality.
Relationship with SDGs

1.	Create society in which diverse human resources areengaged and thrivea. Promote diversity
b. Promote workstyle reformsc. Human resource development and training emphasizing
self-fulfillment
2. Create 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 safe society through high-quality services
g. Continuous quality improvementh. Information securityi. Safeguard personal information
4. Enhance corporate governance and earn trust ofsocietyj. Corporate governancek. Compliancel. Risk management

TIS engages in dialogue with external experts to confirm the appropriateness of Group materiality and assessment of the importanceassigned to each materiality theme. For details, follow the link below.
http://www.tis.com/group/csr/gcsr/materiality/#dia

Sustainable Development Goals
These international goals, running from 2016 to 2030, are described in the 2030 Agenda for
Sustainable Development, adopted at the U.N. Summit in September 2015. The agenda
comprises 17 goals and 169 targets aimed at putting the world on a sustainable path andpledges that no one will be left behind. To achieve these objectives, companies are expected toparticipate as vital partners, contributing to the SDGs through their respective core businesses.

Promotion manager
Naoto Kita, Executive Managing Officer

Analyze external environmental factors for2030 and 2050 using
PEST analysis, andgrasp long-term social
issues for 2050

Implement potential
analysis for market,
competition and TIS todetermine business
opportunities in solutions to social issues in
2030 and 2050

OfficeCorporate Planning Dept., Corporate Sustainability
Promotion OfficePursue specific discussions and narrow
down themes on contribution to society
through innovationand co-creation(model), based on
results of potential
analysis

Promotion members
Mainly directors of the Group who have a close connection to social issues

World in 2050
In making assumptions for 2050, we took into account 24 political, economic and social themes, in parallel with technologicalprogress and the impact that such advances might have, and performed PEST analysis.
Results of PEST Analysis●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 to

Politics

deal with climate change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●Population growth is particularly noticeable in Asia, where the benefits of economic progress have extended average life expectancy

and produced an aging society

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

TIS INTEC Group activity trajectory● Identify four social issues where we have the expertise to apply to solutions, based on long-term trends● Seek to create core businesses for medium to long term, and identify five business domains of particular interest● Work with business partners to create new value

Financial inclusion
More individuals unable to access financial services,such as loans, leading to economic disparity because
people cannot participate in economic activity.

01
Social issues
that TISINTEC Groupcan help with

04

02
03

Urban concentration and regional decline
Environmental, social and economic stresses are building
because of a concentration of people and government
resources into cities. Depopulation continues to impact
regions as people leave for urban centers.
Low-carbon/decarbonization
Increase in economic losses due to natural disasters
and other events triggered by climate change.
Health concerns
Increase in lifestyle-related diseases parallelingchanges in lifestyle and aging of society

Business domains identified by TIS INTEC Groupfor active engagement as core future businesses

EconomyFinance, production (manufacturing)

Governancee-government, urban design

Mobility

Human movement, logistics

Energy & Environment
LivingEnergy (grid-related)
Medical treatment, healthcare

We are keenly aware of our social responsibilities and will contribute to value creation from a long-term perspective.

Takayuki Kitaoka, Director
Sustainability Project Team Manager

17

In OUR PHILOSOPHY, TIS has defined a company as a social system that contributes to happiness. As an
extension of this definition, the TIS INTEC Group has an obligation to face social issues head-on and present
solutions to them through business activities. At the same time, we recognize that our ability to do thisrequires sustainable growth of the Group itself and improved corporate value. Conscious of this, the Sustainability Project Team imagines what the world might be like in 2030 and 2050, backcasting from those points
in time to consider how best to demonstrate the Group’s capabilities and potential to find solutions to social
issues. This approach—to connect an ultra-long-term view with actual business know-how—was a first for

the TIS INTEC Group and was by no means a simple matter. But we brought together team members possessing an array of specialized insights andexperiences, and this diversity facilitated the selection of four social issues and five specific business domains that the Group will actively pursue as core
future businesses. The team was instrumental in enabling TIS to set a direction for the Group to follow on creating value from a long-term perspectivewith a strong appreciation of social issues.
Under the next medium-term management plan that is currently being fine-tuned, we will leverage initiatives aimed at finding solutions to social issues
and highlighting the kind of contribution only the TIS INTEC Group can extend. Specifically, we will identify business and investment strategies related tothe core businesses we expect to pursue in the future and incorporate them into current R&D activities.

18

TIS INTEC Group
Value Creation Process

TIS identified materiality for the Group, taking into account the expectations of stakeholders, impact on society and strengths of
the Group, and clarified priority themes where efforts would be focused.

Approaches

Corporate Sustainability Committee

Project manager
Takayuki Kitaoka, Director

Materiality (Key Issues) for TIS INTEC Group

Materiality

TIS INTEC Group welcomes start of Sustainability Project

Sustainability: Case Studies of Our Initiatives

Providing safe, convenient social platforms for people and society

Case study Digital service ASTARI uses daily routine/consumption Big Data to facilitate customer services
Constant use(customer retention)

The TIS INTEC Group provides safe, convenient solutions to various daily life predicaments through technology and experience built over many years, and contributes to the realization of a resilient society.

Purchase
Data

BI tool access

Meals
Data

Movement
Data

Exercise
Data

Analysis report
Planning/
strategy building

Participating companies
Effectiveness
Create customer experiences using
daily routine/consumption Big Data

Cashless

EnergyLivable communities for all through the use of power
generation systems and the application of power data. The
focus will be on smart, local production/local consumption ofgreen energy: generated in the area and used efficiently inthe same area.

Meal data
recording
function
Vitalsmanagement
function
Loyalty mile/
couponfunction

User

Membership card
registration/
payment function
Great experience available only
through ASTARI

Vitalsdata

Expand sales/develop new products
Based on purchased
product information andmeal data

Convenient and smart cashless payments that eliminate thehassle of paying with coins and bills. We will realize smooth,safe and secure payment environments using leading-edge
technologies, including facial recognition.

Exercisemanagement
function

Analyze tastes and preferences

Based on time ofpurchase and movement
data

Predict daily routine

Recommend the right product at the right time
(Provide continuous customer-centric experience)

ASTARI is a service that connects healthconscious users to ASTARI participatingcompanies, such as retailers, distributors
and manufacturers, whose customer baseincludes these users. For companies thatlack a system or structure to deal with Big
Data, the service supports efforts toanalyze ASTARI data and build strategies
for utilizing the data. As a data business,
ASTARI draws on TIS’ own data topromote the digital transformation of
manufacturers and retailers.

Details: https://www.tis.jp/service_solution/astari/

Case study Standardizing data model for autonomous mobile robots

Robotics
Smart office building management, including guidance andinformation, will draw on active use of robots. We will create
workplaces where leading-edge robotic technology leads tohigher productivity.

Healthcare
Smart health management integrating health information,
including exercise records, photo data of meals, and healthcheck results. We will realize a dynamic society throughhealth platforms.

Drawing on TIS INTEC Group technology to design a vibrant future
The concept of society is currently undergoing a major shift. To make society better, we will apply our inherent strengths to design
highly reliable social platforms that deliver greater convenience to secure a comfortable future. We will become more attuned tosocial issues and contribute solutions to concerns to remain an indispensable partner in supporting people’s lives.

Case study Seek to expand digital wallet service with payment technology compatible with range of devices, eventhose using newest 5G network
Market-watchers expect tokenization-related business to expand on a global scale, driven by technology
for IoT payment solutions using the next-generation 5G network. To capitalize on anticipated growth,
TIS turned Sequent Software Inc., with leading tokenization technology, into a consolidated subsidiary.
TIS will apply Sequent’s
tokenization technology to digitalwallet services, which integratedifferent payment methods andinterfaces, including in-app
payment, into a single app. Against
a backdrop of growing demand forcashless payment solutions, TIS will
promote digital wallet services andleverage IoT payment solutions
using smartphones, wearable
devices and other connectivity
products to provide convenience,
peace of mind and even an aspectof fun when making purchases.
Details: https://www.tis.co.jp/news/2019/tis_news/20200121_1.html

In November 2019, TIS and the University of Aizu jointly initiated a proof-of-concept experiment at
LICTiA (Laboratory for leading-edge ICT in Aizu) on automating transport operations where autonomous
mobile robots are linked to inventory management systems. Through this experiment, TIS demonstrated
easy connection of RoboticBase and various operating systems and, through the application ofstandardized interfaces, connection with different typesof robots. TIS will now work toward future application ofthis format to create business services integrating various
operating systems and service robots.
By incorporating various service robots into businessservices, such as logistics and facility management, we
will present new approaches to help address social
issues.
Details: https://www.tis.co.jp/news/2019/
tis_news/20191113_1.html

Case study Proof-of-Concept for MaaS in Okinawa
In Okinawa, car use by local residents and car rental by tourists are both high, while use of
public transportation is only about 4% compared with the national average of about 30%.
Consequently, the impact of local and tourist traffic has become an issue requiring
attention.
In fiscal 2020, TIS ran a proof-of-concept experiment for MaaS—Mobility as aService—using public transportation for tourists in the Yaeyama district of Okinawa
Prefecture. In addition, in fiscal 2021, the scopeof this experiment will be expanded beyond
Yaeyama, promoting use of MaaS by tourists allover Okinawa and residents in some areas of theprefecture. The experiment has been selected by
Japan’s Ministry of Land, Infrastructure, Transport
and Tourism under an initiative called “Project for
Promoting and Supporting Japanese MaaS.”
All participants in this project seek to boost
the use of public transportation by making it
more convenient and to utilize data to seamlessly
connect multiple modes of transportation as well
as diverse services, including commercial andtourist-related services.
Details: https://service.paycierge.com/solution/maas_platform/

19

20

TIS INTEC Group
Value Creation Process

Membership
DataOutline of Medium-Term Management Plan

To realize sustainable growth and higher corporate value, we have made the current
medium-term management plan our first step toward achieving Group Vision 2026 andthrough further improvements within the Group, we will promote structural transformationand establish a resilient management foundation.

Transformation to 2020

Group Vision 2026

Taking advantage of the shift to an operating holding company in July 2016, TIS announced a new Group vision for the
future in May 2017 to mobilize the capabilities of Group executives and employees alike and take corporate value
higher. The Medium-Term Management Plan (2018–2020) is important because it is the first stage of a journey towardachieving Group Vision 2026.
2026 Corporate Ideal“Create Exciting Future”(From April 2018 to March 2021)

Utilize advanced technologies and know-how torealize business innovation and market creation—Achieving structural transformation as a corporate family and taking the leadin finding solutions to social issues—

Strategic Domains

Seeking Position on Global Stage● Be seen by leading companies in

Corporate Targets in 2020
Company where diverse
human resources, reliable,
proud and carrying
a sense of solidarity,

approach work
enthusiastically

Increase high-value-added quality(boost value of technology/social
research results) throughvalue chain reformin three years¥430 billion
Operating income ¥43 billion ★
Operating margin
10%★
Net sales50

to deliver ratio of%★
from strategic domain sales
Throughenhancedmanagement
efficiency

Becometop classROEgroup united in IT★ Key performance indicators

12%★

Become corporate groupthat contributes

solutions toenvironment/social issues
through business activities● Actively invest to rev

up growth engines● Improve value
provided to clients,
reinforce existing
fields throughproductivity
innovation

21

programs that motivate
employees to work productively
Emphasis on ● Build human resources portfolio
employee self- that supports structuraltransformation, and optimize
fulfillment
deployment throughout Group

Constant and rapid transformation● Proactively propose

Concentrateon corebusinesses

solutions to markets/clientsand transform structure to
realize business creation● Pursue strategicallydirected, robust investment, mainly throughM&A and service
investment

Advanced
technologies

Businessfunction
services* Four business areas forming core activities of
TIS INTEC Group by 2026.

Strategic
partnershipbusiness

Medium-Term Management Plan (2018–2020) will guide us in pursuit of rapid structural transformation to build afoundation for Group Vision 2026 success and expansion of strategic domains.
Medium-Term
Management Plan

2016

2026

(2018–2020)

Business Domains in 2016

● Create environment, culture andSustainableprofitgrowthIT offering
services

TIS INTEC Group management resources

Shift to priorinvestment
style ofbusinessdevelopment

Supportingclients’ businesses

derived through business activities,
establish structure generating
medium- to-long-term benefits forsociety as well as profits to sustain
corporate presence● Achieve cost reduction throughenhanced, more efficient
headquarters function

Frontier
marketcreationbusiness

both a revenue base and a technology/know-how base
● IT Offering Services: Prior-investment
business functioning as pillar of profit● Business Function Services: Recognized as Group forte, driver of growth● Frontier Market Creation Business:
Driver of explosive growth throughcreative destruction of prevailing walls

Strategic Domains in 2026

Business
CreatorBasic Policy● With solutions to social issues

different industries as having anappealing 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 profileand showcase solid standing as acorporate group chosen by clients,society, employees—everyone

Marketable
services

Frontier Market
Creation BusinessNetwork
infrastructureservices
IT system
configuration andoperation

Specific
responses

Strategic
domainratio(net sales
basis)IT Offering Services

Business Function
Services

Strategic Partnership
Business

Provide IT
engineeringexpertise

IT domains

Expandglobalbusiness

Evolution ofstrategic
domains

BPO services● Become top-class

IT group in ASEAN
region● Hone global
strengths,
emphasizing
payment settlement/banking/ERP
solutions

Medium-Term Management Plan
(2018–2020)¥80 billion

Structuraltransformation

ASEAN Region

Budget for growthinvestment tofuel structuraltransformation● Strategic Partnership Business: Lay

Service domains

Fiscal 2018

Fiscal 2021

35%

50%

IT domains

Service domains

Above

70%

22

Progress on Medium-Term Management Plan
Fiscal 2020 Overview

Looking Back on Past Medium-Term Management Plans

Basic Policy and Key Performance Indicators● All key performance indicators for final year of medium-term management plan—fiscal 2021—achieved a year ahead ofschedule, reflecting groupwide business acceleration.

We look back on the three medium-term management plans that have led the TIS INTEC Group towhere it is today.

Key Performance Indicators (Fiscal 2021)
Strategic Domain Sales Ratio

50%

Fiscal 2021
initial estimate

Operating Income

50%

Fiscal 2021
initial estimate

Fiscal 2020 actual

Operating Margin

10%

Fiscal 2021
initial estimate

44.8

43 billion

ThemebillionFiscal 2020 actual

12 %Fiscal 2021
initial estimate

Fiscal 2020 actualSecond Medium-Term Management Plan
(Fiscal 2013 – Fiscal 2015)
Taking on Transformation“Brave Steps 2014”

Third Medium-Term Management Plan
(Fiscal 2016 – Fiscal 2018)“Beyond Borders 2017”

Group management emphasizing
independence of each Group company

Overall optimization of the Group andgreater sense of solidarity

Portfolio management, in a project sense,
blending exceptional businesses and key
strengths into a single approach● Demonstrate composite Group strengths

Basic Concept/
Medium-Term
Management Direction

ROE

10.1%

First Medium-Term Management Plan
(Fiscal 2010 – Fiscal 2012)“IT Evolution 2011”

12.5%

Major Priorities in GroupManagement

Fiscal 2020 actual● Top-line emphasis
while highlighting uniqueness of the● as One Company
Group and expand scope of business● Enterprising and bold
activities⇒ Embrace reforms. Expect full-fledged● Pursue business activities underpinned by
V-shaped recovery to get back on
client trust
growth trajectory.
● Reform production platform and capitalize
on new business opportunities● Profit emphasis● IT brain● Portfolio management● Promote greater management efficiency● Integrate/centralize shared functions withas a corporate group●C ultivate corporate culture that unites
the Group● Promote measures that fuel corporate
growth and motivate employees● Strengthen financial position on aconsolidated (groupwide) basis

Key indicators
Net sales¥400 billion

Fiscal 2020 Group Management Direction

Operating income
Operating margin

Robust prior investment to fuel business expansion
and structural transformation
Selectively invest in growth fields and areas of expertise to turnservice-style businesses into growth engines

Promote measures and review business portfoliowith view toward higher profitability
Concentrate on forte fields and key client businesses, eliminate
unprofitable projects, emphasize order profitability and thoroughly
implement enhancement reforms

Promote growth strategy aimed at becoming
a top-class IT group in ASEAN region
Expand business domains and pursue strategic investments
through cooperation built over time with overseas partners in linewith global strategy

Boost motivation and take human resource
management to higher level
Strive to create framework and corporate culture in which
employees—the driving force behind the Group’s growth—canthrive, and steadily realize measures described in personnel manifesto

Looking Back on Fiscal 2020
● Strategic domain ratio surpasses medium-term management plan target of△

23

achieved sales but posted lower operating income. Qualitativetransformation required to achieve medium-term targets, including
improvement in profitability on service-type businesses.

● Gross profit margin improved to 23.9% (YOY change, +1.4%), reflecting○

enhancement upgrades and efforts to reinforce order profitability.

● Development loss ratio held to 0.6%, staying within full-year target level(0.8%)● Implemented review of Group strategy for platform business, including

cloud, security, data center and network operations.

ROE

Fiscal 2012

the Group⇒ Make office procedures more efficient,enhance capital and asset efficiency,
raise Group profile, and cultivate
corporate culture with sense of solidarity● Realize higher level of administrative
management⇒ Promote management with profit
emphasis, work to enhance accounting,taxation, financial reporting, andimplement Group personnel strategies

Fiscal 2015

Estimates

ActualFiscal 2018

Estimates

ActualEstimates

Actual¥327.4 billion¥350 billion¥361 billion¥400 billion¥405.6 billion¥35 billion¥15.6 billion¥25 billion¥21.1 billion¥30 billion¥32.7 billion

8.8%

4.8%

Above 7%

5.9%

7.5%

8.1%

More than 10%

1.5%

7.5%

6.0%

8.0%

9.9%

Policy on return toshareholders

Maintain stable dividend

Strive for payout ratio of 30%

Strive for total return ratio of 35%

Payout ratio

74.0% in fiscal 2012

25.6% in fiscal 2015

16.6% in fiscal 2018

Total return ratio

74.0% in fiscal 2012

30.4% in fiscal 201530.5% in fiscal 2018

Reference: Average annual growth rate over three years
Net sales

–1.1%

+3.3%

+4.0%

Operating income–13.1%+10.6%+15.7%● Planned to expand business volume by● Reinforced ties with existing targets of capital participations and further○

fortified overseas business platform by bringing several influential partners
under the Group umbrella and by forming new capital and businessalliances.
● Utilized composite capabilities derived from alliances in joint expansion of
platform services.

● Formulated Diversity and Inclusion Policy and promoted various measures○

Realize enhanced management practices andhigher efficiency
Instill widespread awareness of unified, groupwide management,
based on OUR PHILOSOPHY, promote “G20” project to elevatehead office functions, and kick off new system “GAIA”

50% ahead of schedule.

● Driven by demand for payment settlement solutions, Service IT Businessgroupwide● Lay resilient financial base to facilitateprior investment activity● Streamline and centralize corporate
functions● Reinforce product brands and corporate
image

designed to enable employees to achieve self-fulfillment.

● Began groupwide initiative to constantly upgrade the skills of personnel

who will drive business growth.
● TIS included in “New Diversity Management Selection 100” by Ministry of
Economy, Trade and Industry.

● From April 2020, began implementing common systems and shared○development within Group under project to elevate head office functions.

● Brand recognition dramatically improved, hitting 32% (up 13% YOY),

through strategic brand investment.

● Finished selling off real estate in and around Metropolitan Tokyo as Group

office relocated and centralized.

Key reflections● Pushed ahead on building unique and● Expansion in value-added creation styleturning SORUN Corporation into consoliobvious strengths (growth engines) andservices, along with assignment solution
ated subsidiary, but growth was temperedlinking strengths, as well as concentratingstyle services geared to client requests, fuby significant deterioration in external
capabilities into core businesses. Achieved
eled growth. Shift to market-cultivating
environment caused by such factors as
net sales target but failed to hit operatingstyle services requires faster responses.
Lehman shock. Against this backdrop,
income target as issues continued toProfitability steadily improving, and efforts
management decided to pursue course ofsideline efforts to prevent projects fromto control unprofitable projects showing
realignment in Group formation, including
becoming unprofitable and efforts toresults. But low-level control still required.
merger of SORUN and UFIT Co., Ltd., into
boost productivity.
● Transition to operating holding company
TIS, and implemented sweeping structural ● Progress on approaches to achieve
structure and steady implementation ofreforms, including relocation and centralevolution in services and globalize
measures, including business realignment,
ization of Group offices in Tokyo area, tooperations fueled expansion in scope of
office consolidation and improved capitalcreate more resilient managementbusiness activities but not enough toefficiency, to achieve overall optimization
structure.
create business with revenue-sourceof the Group. Made progress in cultivating● Blueprint for totally revamping operations
potential.
corporate culture with sense of solidarity
urgently needed for Group to demonstrate ● Realized certain degree of success withthrough design of single logo and creation
truly comprehensive capabilities because
measures to restructure operations andof Group vision.
prevailing corporate consortium structure
reinforce cooperation across business● To achieve sustainable growth andoptimized to each company under Grouplines. This included turning AGREX Inc. into
improved corporate value, prioritizedumbrella insufficient to showcase overall
wholly owned subsidiary. Also unified
structural transformation and establishcapabilities.
Group brand to underscore integrated
ment of resilient management platform
group management, but more extensive
through additional reforms within theapproach needed for overall optimization.
Group in anticipation of major changes insociety.

24

Medium-Term Management Plan
(2018–2020)

Guided by a management policy with a profit emphasis, TIS has set KPIs under the following conditions. From the perspective of
progress toward targets and the status of efforts to ensure sustainable profit growth and constant transformation with a sense of
speed, as outlined in Medium-Term Management Plan (2018–2020), the chosen KPIs are operating income, the strategic domain
ratio and the operating margin. From the perspective of measuring returns over capital costs as the Company vigorously pursues
business more conscious of capital costs than before, ROE is the KPI.

● Promote new Group formation● Cultivate shared spirit that permeates⇒ Set ROE as key performance indicatorand strive for improved corporate value
and sustainable growthActivities under Medium-Term Management Plan
Structural Transformation Strategy

Business Portfolio Review

Progress on Structural Transformation Strategy (1)Medium-Term Management Plan (2018–2020) guiding rapid structural transformation toward success of Group
Vision 2026.
Marked favorable progress, particularly with expansion in demand for existing Strategic Partnership Business (SPB)
and IT Offering Service (IOS), and reached target set for final year of medium-term management plan a year aheadof schedule.
Realize structural transformation toward higher-earning-potential, stock-style services in strategic domains.
Charting Growth in Strategic Domain Ratio(Net sales basis)

ActualEstimate

Fiscal 2020

Placement of platform business strategy promotion structures

Structures to leverage strategies, with emphasis on investment, sales and personnel, applicable to key platformbusinesses groupwide placed in TIS.
Optimize businesses and operate efficiently with sense of speed

53%

45%

Integrating brands for EINS WAVE

Services, including cloud, network and data center services, under TIS and INTEC brands merged into single
brand.
Add quality of consistency to Group services, raise profile and sharpen competitive edge

40%

Fiscal 2018such as those for cloud, security, network and data center use.

50%

42%

35%

● As part of the business portfolio review, management looked into Group strategies to reinforce platform businesses,

Fiscal 2019

Fiscal 2020

Fiscal 2021

Service map under integrated brand (outline)

3. Business Function Service

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.

Desired Status
Building strong business partnerships to help clients expand operations by
jointly exploring business strategies and identifying and solving businessrelated concerns.

Desired Status
Complementing IT Offering Service with new businesses to enhance efficiency,
mainly through automation, and providing high-value-added services to clients.

Data center advantages● Track record: More than

45 years● Facility availability:

4. Frontier Market Creation BusinessWe 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.

Desired Status
Allowing TIS INTEC Group strengths to blossom under IT Offering Service
banner; switch from labor-intensive style to non-price competition, knowledgeintensive style.

Desired Status
Creating new markets that become pillars of business for the Group.

Progress of Structural Transformation Strategy 2
Working to turn service-style business—at core of IT Offering Service—into growth engine and steadily develop businessby expanding accumulated strengths, taking a robust approach to investment and actively pursuing open innovation.
Going forward, selectively invest in areas of keen interest while focusing on further business expansion and enhanced
profitability.
Net Sales¥131.5 billion[Estimate]¥100.6 billion

Medium-term
management plan
initial targets

Operating Income¥13.00 billion[Estimate][Estimate]¥8.51 billion¥8.19 billion

8.1%
7.2%
Operating margin
Fiscal 2021

Fiscal 2021

Fiscal 2018

Fiscal 2019

6.5%

6.5%

Fiscal 2020

Fiscal 2021

10.8%

Fiscal 2021

Anticipated Core Composition of Net Sales
Fiscal 2018
ActualFiscal 2019
ActualFiscal 2020
ActualFiscal 2021
(Estimates)

Payment

10.0

15.0

22.5

28.5

Continue to emphasize payment settlement solutions. Anticipating
sales increase.

ERP

28.0

28.0

27.0

25.0

Risk of extended discussion on upgrade projects, with possible drop in sales.

Data centers/cloud/networks

42.0

42.0

43.0

44.0

Cloud attracting interest but existing data center business shrinking.
Will capture cloud and security demand to boost sales.

(Billions of yen)25

14

Systemoperation
services

Self-portal cloudservices

Integrated, closed network services

Private cloudservices

Internet-linked services

Cloud-style backup
servicesManaged network services

Tokyo No.1
Data CenterTokyo No.2
Data CenterTokyo No.4
Data Center

Yokohama
Data Center

ToyamaData Center

Osaka No.1
Data Center

Osaka No.2
Data Center

Osaka No.3
Data Center

Osaka No.4
Data Center

Manyo Data
CenterOther TIS-rundata center networks(in Tokyo, Nagoya
and Osaka)

Multi-environment remote-surveillance services

As a group, we will draw on composite expertise to respond to changes in the market with asense of speed and strive to sharpen our competitive edge and expand demand for services,
especially in the cloud and security domains.

●All shares in two BPO-related consolidated subsidiaries (AC Medical Inc. and Koushin Inc.) transferred outside the Group(February – March 2019).
●All equity in Tianjin TIS Hi-tech, in China, transferred outside the Group (October 2019).
●TIS’ EDI (electronic data interchange) business assumed by INTEC through corporate split to centralize operations¥8.50 billion[Estimate]

Fiscal 2020

Medium-term
management plan
initial targets¥120.0 billion¥8.13 billion

Fiscal 2019

● Number of data centers owned:

Managed cloudservices

Other recent accomplishments

Status of Service-Style Business

Fiscal 2018

Data
centers

86,400m2

2. IT Offering Service¥117.6 billion

Networks

99.999%● Total floor space:¥125.5 billion

CloudsMedium-Term Management Plan
(2018–2020)

1. Strategic Partnership Business

Status/Forecast(April 2020).
●TIS agreed to acquire a partial stake in TIS Chiyoda Systems Inc., a new company established to assume the IT businessdivested by Chiyoda System Technologies, a wholly owned subsidiary of Chiyoda Corporation, and decided in February2020 to make the company a consolidated subsidiary from October 2020.
TIS will utilize connection to build strategic partnership designed to promote digital transformation of the Chiyoda
Group and, in the future, will provide IT solutions utilizing accumulated know-how through the new company.
●TIS agreed to acquire a partial stake in Miotsukushi Analytics Co., Ltd., which is engaged in data analysis and AI

consulting, and turn the company into a consolidated subsidiary (August 2020).
TIS will strengthen data analysis and AI-related services, which are key components in clients’ digital transformationand pursuit of digital businesses.
26

Activities under Medium-Term Management Plan
Payment Business Strategies

Leveraging our strengths to accelerate business development andrealize a cashless society
Our major strengths are the experience, technology, know-how, and abundant human resources we have cultivated overmany years handling development and operation of core systems for major credit card companies. Deploying thesestrengths, we have established a position as the leading system integrator in the domestic settlement field.
Amid recent advances in cashless payments, conditions in the payment settlement market are changing dramatically
due to progress in smartphone and other related technologies, the entry of companies from different sectors, and therise of FinTech companies. Viewing this situation as a new growth opportunity, we develop and operate core systems for
major credit card companies, which represent an important foundation of our business. We are also deploying our
PAYCIERGE digital payment platform to accelerate business development.

PAYCIERGE digital payment platform

Status of cashless payments in Japan● The 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.
Cashless payments (¥ trillions) and cashless payment ratio (%)

Combination of cashless payment methods

80.0%(¥trillions)

100

40.0%
50
20.0%

PAYCIERGE is a comprehensive, highly convenient, and reliable payment solution for all people who require retail payments.

11.9%
0

2008
Electronic money

2016

2025

Credit card

Debit card

FutureCashless payment ratio

Interface

Payment method

Contact typePrepaidNon-contact
type

Instant debit

Code reading
type

After pay

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

Payment-related sales in service-style business(Estimate)¥50 billion

Overview of Payment Services and TIS’ Core Focus¥22.5 billion¥15 billion¥10 billion

Fiscal 2018

Fiscal 2019

Fiscal 2020

Fiscal 2026

The entire payment processing market is expanding, driven by
the spread of cashless options to pay for purchases. Against
this backdrop, companies are embracing digital transformation
to break into the payment settlement business, which iscreating an emerging platformer market that is expected toreach ¥90 billion by fi scal 2026.
Based on this forecast, TIS is targeting emerging platformers, specifi cally demand in the core area for issuers, which
requires a particularly high level of specialization. The Company has exactly this kind of specialization and will maximize it
for a competitive advantage. TIS will work toward sales of ¥50
billion, or a 70% share of the market, by focusing on credit
SaaS.

Status in fiscal 2020
Digital account services (credit Saas, debit SaaS, prepaid SaaS)● Directed efforts into platform-building for providing credit SaaS. Projects for first-time users moving well, steady progress withservices expected to go live during the next medium-term management plan.
● With growing demand from consumers for non-cash settlement options and wider interest in e-commerce, debit SaaS and prepaid SaaS also attracted attention. Client base steadily expanding and transaction volume also up.
Digital wallet services● Initiated services for MUFG Wallet and Toyota Wallet. Business development accelerating.
● Turned U.S.-based Sequent Inc. into subsidiary to ensure quick access to token requester technology.
Other services● Increasing demand for QR gateway services at money access points and merchants in Japan and overseas.
● Solid steps forward on proof of concept for MaaS and Super City initiative and further involvement in development plans

Topic
TIS held an information meeting on December 9, 2019, to highlight PAYCIERGE. This was the Company’s fi rst event on the
PAYCIERGE theme. A total of 80 investors attended, and three TIS executives with business unit responsibilities provided
details on areas of emphasis as well as strategies and other initiatives related to payment services.
We have a particularly strong competitive advantage in the fi eld of digital account services, which enable us toprovide all sorts of processing services, including prepaid, instant debit, and after-pay credit.

27

Presentation materials can be found at
http://www.tis.com/documents/en/ir/fi nance/meeting/191209.pdf

28

Medium-Term Management Plan
(2018–2020)(Billions of yen)Activities under Medium-Term Management Plan
Global Business Strategies

Leverage business domain expansion and strategic investments
to become top-class IT group in ASEAN region
Three pillars support expansion of the TIS INTEC Group’s overseas operations: providing local support to existingclients as they pursue a presence in other countries, applying know-how accumulated in Japan to develop local
markets overseas, and bringing cutting-edge technologies from abroad to Japan to reinforce our capabilities in thedomestic market.
Currently, TIS seeks to build a top-class group of IT companies in the ASEAN region. Toward this end, the Company
will maximize alliances forged through strategic investments in channels—that is, local markets—and technology,
while promoting business development that integrates the respective strengths of each company and expanding
business domains through new and reinforced connections across the ASEAN region.

Key M&A Targets in Recent Years, Capital/Business Alliance Results
Net sales: ¥44.2 billion

Capital and business alliance in July 2015
Increased stake in October 2019
Indonesia-listed, top-tier local IT company.

MFEC Public Company Limited(Equity-method affiliate = 24.9% stake)Net sales: ¥13.3 billion
Capital and business alliance in April 2014
Decided to acquire shares toward turning company into subsidiary in March 2020
Thai-listed, leading provider of enterprise IT solutions.

I AM Consulting Co., Ltd.
(Consolidated subsidiary = 99.9% stake)Net sales: ¥2.5 billion
Turned into consolidated subsidiary in June 2014
Thai-based consulting group producing total SAP-related IT solutions.

TinhVan Technologies JSC.
(Equity stake: 19.9%)

Capital and business alliance in June 2018
Leading IT service provider with considerable experience introducing solutions to
the Vietnamese government and financial institutions.

SQREEM TECHNOLOGIES PTE. LTD.
(Equity stake: 6.8%)

Capital and business alliance in May 2019
A Singapore startup—the world’s largest behavioral pattern data aggregator— growing
very fast in fields of digital marketing and data analytics using proprietary AI technology
based on massive data collection.

R3 HoldCo LLC(Equity stake: 1.4%)

Capital and business alliance in June 2018
U.S. technology startup boasting global-caliber results and brand in blockchain-related
technology for corporate users.

Shanghai CardInfoLink Data Service Co., Ltd.
(CardInfoLink)(Equity-method affiliate = 18.1% stake)

Capital and business alliance in September 2017
Equity-method affiliate in March 2020
FinTech company developing presence in China and around the world, with particularstrength in payment gateway solutions and other services.

PromptNow Co., Ltd.
(Consolidated subsidiary = 60.0% stake)

Turned into consolidated subsidiary in May 2016
Leading FinTech company with multiple proprietary mobile services for financial
institutions.

Sequent Software Inc.
(Consolidated subsidiary = 60.1% stake)Grab Holdings Inc.

Medium-Term Management Plan
(2018–2020)

PT Anabatic Technologies Tbk(Equity-method affi liate = 37.3% stake)

Capital and business alliance in May 2017, turned into consolidated subsidiary in
February 2020
One of very few tokenization vendors in the world, and recognized by multiple
international brands
Capital and business alliance in February 2020
Top-class super app provider in ASEAN region. Expands into one business after anotheracross wide range of sectors, including ride-hailing services, food delivery and financial
services. Boasts 196 million downloads on aggregate basis.

*Net sales for fiscal year ended December 31, 2019, converted at exchange rate prevailing at year-end.
*Equity stakes current as of May 12, 2020.

Capital and business alliance with Grab Holdings Inc.
In February 2020, TIS took a US$150 million (about ¥16.5 billion) stake in Grab Holdings, which offers diverse services in the ASEAN region. Goingforward, the Company aims to be an IT-oriented strategic partner through joint efforts in the areas of financial and payment services in the ASEAN
region. The collaborative emphasis will be on ensuring a stable infrastructure for digital payments, a method that is becoming more popular inSoutheast Asia, and jointly promoting development of new payment solution technology.

Promotes diverse services in eight Southeast Asian countries
and 339 cities (on-demand ride-hailing, food delivery,
product delivery, digital payments and other financial
services)
Number of provided app downloads: More than 185 million
User access points: Merchants, such as restaurants, and morethan nine million drivers

Solid track record in IT system configuration for finance andpayment services sectors
Cutting-edge technological know-how
Growing network through capital and business alliances with
influential local vendors in ASEAN region, including Anabatic(Indonesia) and MFEC (Thailand)

TIS continues to take a robust approach to alliances, including a capital and business alliance formed in May 2020 with Entropica Labs Pte. Ltd., astart-up in Singapore engaged in development of quantum computer software.
29

30

Activities under Medium-Term Management Plan
New Technologies and R&D

Focusing on the development of technologies and the promotion of
innovation that contribute to the resolution of social issues andthe attainment of a sustainable society
In recent years, the evolution of information technology and the accompanying changes in market needs have become
increasingly intense. COVID-19 has also accelerated the shift from real to virtual and analog to digital.
Against this backdrop, TIS is working to develop technologies and create innovations across the entire TIS INTECGroup, aiming to achieve the corporate goal described in Group Vision 2026: “Create Exciting Future – Realizing
business innovation and market creation using advanced technology and know-how”.
Our activities are based on open innovation in order to categorize technology strategies and to make the results ofactivities in all areas faster and more broad-ranging.

With an emphasis on speed, we are strengthening our ability to create new businesses mainly through collaboration with start-ups
in Japan and overseas.

We conduct research and development in collaboration with universities and public research institutions.
Focusing on XR and multi-level edge computing as core technologies
Focusing on XR (extended reality – incorporating augmented reality (AR), virtual reality (VR), mixed reality (MR), and everything in
between) technology as a human augmentation technology, we are researching and developing modeling of physical and spatial
information important for remote communication in cyberspace.

Medium-Term Management Plan
(2018–2020)

1. Technologies that contribute to new business creation and existing business reinforcement

3. Technologies that drive medium- and longer-term innovation

Multi Level Edge Computing
Focusing on edge computing as an information service infrastructure technology in the IoT era, we are researching and developing
platforms (agile responsiveness, flexible configurations, more intelligent applications, energy savings, software description) that
integrate networks and computers.

Corporate venture capital: Implementing speedy investment in start-ups where collaboration is assumed
Through CVC, which is expected to lead to investment of ¥2 billion by March 2021, we will make investment decisions in a minimum
period of about one month from discovery to final approval for start-ups in the rapid growth period from seed to middle stage.
Number of investments: 35

Investment: ¥1.3 billion (Cumulative total from April 2016 to July 2020)

2. Technologies that enhance our product development competitivenessIn addition to Nablarch, a platform for developing mission-critical enterprise systems, we havedeveloped a variety of software and processes to improve productivity and quality and are using
them throughout the Group. We also use canal, a mutual technology support platform, torespond to rapidly evolving information technology.
canal: Mutual technology support platform for
employees
When an employee posts a technical question to canal, it is automatically forwarded to 113 TIG-certified experts, and they can receive
highly specialized and useful answers. It is a platform that can quickly
respond to customer needs and technical issues by leveraging theGroup‘s expertise and demonstrating the value that only a major
corporation can provide.
Seven Group companies have adopted canal, which is used by
6,027 employees, or 60% of the total workforce of companies thathave deployed it. canal also fosters a corporate culture of mutual support among Group companies.
Number of users: 6,027 (As of July 2020)
31

Our Technology & Innovation SBU pursues a variety of other technological developments, new business developments, and R&D. The
results of these activities are shown on Fintan (https://fintan.jp/).
Fintan: Development expertise provided for free
The know-how we have accumulated through our research and development, systems development, and new business development projects ispublished on the Internet. The tools, processes and know-how required topromote open innovation are available free of charge to anyone anywhere.
Fintan’s unique monthly users: 9,609 (July 2020)*Total number of users accessing from the same browser by period*Fintan is a legendary figure in Celtic mythology who accumulates the knowledge of all humanity.
The name has been used for this site to convey the idea of access to all sorts of system development knowledge.

32

Activities under Medium-Term Management Plan
Strategies for Enhanced Management Practices and Improved Efficiency
Enhanced corporate brand
Robust pursuit of strategic brand activities for stronger management foundation built on brand power
Implement concentrated investment through fiscal 2021, seeking to ensure market quickly associates brand with business activities.
(Increase investment by ¥500 million in second half of fiscal 2020, ¥1 billion in fiscal 2021 (plan))

Progress on G20
G20 project to elevate head office functions progressing well. Gradual introduction of shared services and common systems
within the Group, beginning in fiscal 2021.
Anticipate cost reduction effect of about ¥1 billion in fiscal 2021, ultimately leading to better-than-expected results.

Branding activities roadmap

Overview of G20 Project to Elevate Head Office Functions
Fiscal 2021

Shared Services
within Group

Common Systems
within Group
Anticipated cost reduction effect throughenhanced head office functions*Compared with fiscal 2018 (aggregate results)

Fiscal 2022

Fiscal 2023

● Related to common systems: Extend groupwide in conjunction with common system introduction● Not related to common systems: Gradual approach (timing set in cooperation with each company)

TIS office staff center in charge of all accounting, sales, purchasing, labor and general affairs operations atdomestic consolidated subsidiaries (currently, 22 companies), matched to centralization process at TIS

Implement at threecompanies(TIS, INTEC and one other)

Implement at total of
13 companies(addition of 10 companies
from previous year)

Wrap up implementation
at all 23 companies

About ¥1 billion

About ¥2 billion

About ¥2 billion + α(addition of 10 companies
from previous year)

Promote activities to enhance management capabilities groupwide and reinforce corporate governance● Various measures to boost recognition, including a television commercial — Group’s first — delivered a certain degreeof success.

● Going forward, measures will be put in place to make TIS INTEC Group the choice of all stakeholders and to raise brandprofileGroup office realignment (in Tokyo area)
Decided to relocate and concentrate Group offices within the Tokyo area, mainly to enhance groupwide business synergies,
encourage greater communication within the Group and promote new workstyles. Will open new offices in Toyosu district,scheduled for spring 2021.
Concentrate TIS and INTEC business operations at Toyosu Office. Concentrate head office function for both TIS and INTEC at
Nishi-Shinjuku Office.
Nishi-Shinjuku Office
TIS, INTEC head office function

Toyosu Office (new)TIS, INTEC business operations
New office concept
New office will be established to shape new future,with an environment in which each and every
employee plays a leading role
●Apply ABW (activity-based working) and implement workstyles

that allow employees to choose place to get work done

●Introduce office concierge so employees can concentrate on

dutiesKnowledge of TV
commercial

Group recognition(Among business people)
TIS survey on Augst 2020

43%

57%

(Among business people)
TIS survey on Augst 2020

(Up 24 percentage points
after television commercial)

IT industry new graduate job seekers

Company ranking by
popularity
Overall:
No.15
No.13
(last year)

Science-based:
No.16

（昨年）

No.9

To capitalize on more business opportunities, improve recruiting power and elicit greater
pride in working for a company under the TIS INTEC Group umbrella, TIS will make fiscal
2021 a time of intensive investment and maintain strategic brand investment
33●Feature showcase function for hands-on understanding ofGroup’s products and services, particularly advanced
technologies●Facilitate business creation through open innovation
opportunities with in-house and external experts

The COVID-19 pandemic has ushered in a new normal, and as we consider new workstyles that suit the altered
times, we will prioritize a review of how the Toyosu office will be set up.
Position as place of communicationand collaboration• Dramatic reduction in office area seating (Future target: 50% of initial design ratio)• Dramatic increase in communication booths —booth-sized workstations—including remote format

With two core offices, we will build a more unified group presence and accelerate structuraltransformation—a primary goal of the current medium-term management plan—
while seeking to reinforce Group governance.
34

Medium-Term Management Plan
(2018–2020)

Note: Details, such as the number of companies and the implementation schedule, noted above reflect content announced in November 2019.

Activities under Medium-Term Management Plan
Human Resources Strategies

TIS will implement a personnel strategy that matches its corporate direction, and this, I feel,
will be the key to future success.

Emphasize measures to help employees achieve personal career goals andcreate framework/culture that enables diverse human resources to thrive~Individual cycle of personal fulfillment will be driver of growth for the Group~
Of all the management resources available to the TIS INTEC Group, employees are the most important. One of
the basic policies described in Transformation to 2020—the medium-term management plan that TIS launchedin April 2018—is to emphasize employee self-fulfillment, and efforts will be directed toward the creation ofan environment, corporate culture and systems that make diverse human resources excited about their work.
TIS will promote the environment and opportunities that enable each and every employee under the Groupumbrella to fully demonstrate their skills, which will lead to sustainable growth of the Group overall.

Jun Ikimune
TIS Senior Managing
Executive Officer andGeneral Manager of
Human Resources SBU,
TIS Inc.

Human Resources Strategy in Medium-Term Management Plan (2018–2020)
Boost motivation through constant cycle ofself-fulfillment

Imaginean ideal
Highermotivation

Realizegoals

Declare andshare

Problemsolve

Human resources who fuel process ofstructural transformation● Account managers, service managers whodrive activity in strategic domains● Consulting staff who formulate businessstrategies along with clients● Service production staff who can turnindustry knowledge and businessknow-how into marketable products● In-house entrepreneurs who plan, launchand promote new businesses● High-level engineers who support activities
in strategic domains through quality andproductivity

Activities in fiscal 2020

Create framework and systems to achieve
optimum deployment of human resources
within the Group

Visualize humanresources information

Establish humanresources systemapplicable throughout
the Group

Establish humanresources portfolio

Boost motivation through constant cycle of self-fulfillment to realize career goals

In fiscal 2020, principal companies under the Group umbrella took up
performance management, signed on to the groupwide Diversity andInclusion Policy, implemented diverse activities to help employees thrive,and promoted health management and workstyle reform. These efforts
were designed to accelerate the cycle of self-fulfillment in career goals of
employees who are the driving force of corporate growth, based on the
personnel manifesto drawn up by the TIS Human Resources SBU.

Activities planned for fiscal 2021

Fiscal 2021—the last year of Medium-Term Management Plan (2018–2020)—will see the culmination of measures and accomplishments
achieved in line with the personnel manifesto. This will provide theframework and corporate culture that underpin the development of
human resources with top-level skills and who then contribute to
structural transformation of the Group.

● Conduct groupwide survey on job motivation and encourage activities to improve
motivation● Extend system that enables employees to continue to be active in the workplace if they
are willing and able, regardless of age, through introduction of system for rehiring
retired employees up to age 70● Deepen scope of performance development measures, including 1-on-1 training, careerplanning, wider open-recruitment and promotions, to encourage personal growth● Create corporate culture/atmosphere and introduce peer bonus that foster praise andrecognition of outstanding efforts

Selectively develop model employees to fuel transformation of Group● Manage pipeline to human resources who, with training, will go on to become groupleaders and corporate management

Create framework and systems to achieve optimum deployment of humanresources within Group● Create a portfolio—a database of objective information about the status of humanresources groupwide—that management can access to optimize personnel assignments
and promote approaches shaped by TIS throughout Group

Employee Awareness Survey

35

Key Fiscal 2021 Measures

Group management

Create common groupwide framework andpromote diversity management

To vigorously promote growth and greater efficiency, TIS will implement measures thatbalance structure and corporate culture while enforcing a degree of control in its
role as parent company

Support for structuraltransformation

Enhance programs to train personnel who will
drive management and business forward

TIS will identify personnel with potential to drive management and businessforward, and then try out measures from skill and mindset perspectives toaccelerate personal growth

Forward-looking personnel

Build robust, sophisticated human resources
structure to realize management agility

To build a sophisticated personnel system that quickly responds to changes inmanagement and business environments, TIS will shift to a more strategic humanresources structure

Strong workforce

Reinforce human resources portfolio formation andhiring capabilities to secure workforce

Going forward, TIS will widely reinforce personnel-related measures, from hiring andassignment to training, to secure its required talent poolSupport for self-fulfillmentof goals

Shift from performance management toperformance development

TIS will promote change in perception, emphasizing corporate culture that encourages
managers to help junior staff develop skills rather than simply managing them,
thereby increasing employee engagement and fostering independent growth

TIS overall (good company to work for)
Trust (trust in management)

32 ％ 32 ％34 ％ 34 ％Fiscal 2016

Fiscal 201745 ％ 43 ％

48 ％

46 ％

38 ％ 38 ％Fiscal 2018

Fiscal 2019

Fiscal 2020

Note: The survey is outsourced to an external organization. Aggregate results are presented as apercentage, reflecting the ratio of respondents whose answers were positive, that is, they
selected “4. Often applies” or “5. Almost always applies” in a five-point rating scale.

Sustainable engagement
Organizations embody the values of the individuals therein, so we seek to create sustained employee engagement that aligns our
purpose as a company with the purpose of individuals traveling the same path and also makes employees more willing to contributeto the company’s—and their own—success.
As equals, we—a company and its employees—will embrace measures to grow and prosper together.
Reference: Sustainable engagement promotion system
A company that never rests in its efforts to deliver a better employee experience will be rewarded with enhanced employee
engagement. As a virtuous cycle, this approach will lead to sustainable engagement.
Achievements●Client satisfaction ●Corporate performance ●Individual performance

Last year of current management plan to achieve goal to boost motivation through constant cycle of self-fulfillment to realize career goals.
But look beyond next management plan and promote integrated onsite operations from perspective of understanding
individuals and drawing on inherent skills.
Key Themes

Changes in Results from Employee Awareness Survey

Since fi scal 2016, TIS has conducted an annual awareness survey toidentify employee motivation. The survey features questions about
working toward management targets under each offi ce structure andefforts to foster a good corporate culture. The survey acts as a barometer, gauging employee trust in management, and this result isincorporated into director evaluations. The survey thus helps us boost
management effectiveness while maximizing the success of measures inforce. Based on survey results, we have seen a huge improvement in thenumber of employees who answer that TIS is a great company to work
for and that management inspires trust. In fi scal 2020, similar surveys
were conducted at six Group companies. Approaches found to havebeen useful in boosting motivation at one company will be shared withthe other companies, and personnel programs and measures will beenhanced accordingly.

Employees

Promote Diversity and Inclusion policy to understand individuals anddraw on inherent skills

Sustainable engagement

Create an environment that encourages employees to acknowledge and share management’sview of the corporate vision and the company’s future direction and to contribute on their own
initiative to achievement of targets.

Engagement

Enabling environment

Lay groundwork for programs and measures common companywide but accept
that values of individuals and conditions that characterize each workplace differ
and lead to slight variations

Understand
individuals

EnergyWelcomeindividuals

Company
Improve employee experience

Experience and value obtained by working at that company
1. Purpose
Significance thatworking for thecompany holds

2. Work
Job responsibilities

3. People
Managers, peers
and junior staff
workingas a team

4. Total rewards
Financial andnon-financial
compensation●Instilling a vision ●Performance ●Development ●Workstyle reform●Better corporate culture ●Health management

Utilize skills of
individuals●Pinpoint where individuals are on their career
path through frequent engagement surveys●Share communication styles and diagnostics toidentify personal values (reflect in TIS talentmanagement system)●Communication training based on various
diagnostic results●Assess receptive behavior (personnel
evaluation)●Determine work assignment and sharedpurpose based on sense of values●Evaluate level of cooperation and co-creative
efforts＋

Establish environment to promote diversity●Attributes diversifying across various segments

36

Medium-Term Management Plan
(2018–2020)

Cycle ofself-fulfillment

Selectively develop model employees to fueltransformation of the GroupThe TIS Human Resources SBU Manifesto, which was unveiled at the same time as Medium-Term Management Plan
(2018–2020), is a declaration—a promise—to all employees about what the Company offers and how it supports
employees through human resources programs and measures, including compensation, intended to boost motivation.
The manifesto was not put in a corporate drawer, so to speak, once completed. It has an ongoing purpose. Every six
months, results are evaluated and revisions are considered. I believe this approach fosters greater engagement between
TIS and employees. Also of note, the manifesto is not exclusive to TIS, but rather, it is gradually being rolled out to companies under the TIS INTEC Group umbrella as well.
Robust measures have earned major external accolades not only for TIS but other members of the TIS INTEC Group as
well. Our approach to human resources policy is recognized as progressive, and our efforts to motivate employees arehighly regarded. We conduct employee awareness surveys to gauge employee perceptions, and increasingly positive
results are the fuel that keeps a virtuous cycle in motion—where a company with employees who are enthusiastic about
their work drive corporate growth, which in turn keeps employees motivated and the company moving forward.
From a group perspective, human resources are our most valuable management resource. People are a driving force,
adding signifi cant momentum to the creation and further improvement of corporate value. Therefore, we must continue
to leverage our human resources strategy as fully as possible and ensure that constituent measures are aligned withchanges in business strategies. To put it another way, our human resources strategy hinges on programs and measures
matched to the business direction that we—not just TIS but the Group as a whole—must follow. It is this humanresources strategy that will enable us to comfortably meet business targets, and we are committed to it. It is not goodenough to go only so far. We must always aspire to a higher level and keep moving to ensure steady progress.

Activities under Medium-Term Management Plan
Financial Strategies
Further improvement in ROE
TIS has always adhered to management practices conscious of capital cost, and set a target of 12% for return on equity(ROE) by March 31, 2021, as a key performance indicator measuring return exceeding capital cost. To reach this target, we
will seek more appropriate capital composition and enhanced capital efficiency, with efforts to promote growth investment, maintain financial health and strengthen return to shareholders—all in the right balance.

Net income ratio

ROE

12.0％

9.9％

(Fiscal 2021)(Fiscal 2018)

Promote growth investment●Pursue growth investment activity, such as prior investment and M&As, more robustly.
Envision maximum ¥80 billion in investments over three years. Seek 50% contribution
from strategic domains and operating margin of 10% through structural transformation.

Promotegrowthinvestment

Maintain financial health●Keeping in mind goal to maintain A rating, ensure equity ratio above 50% and allow
debt-to-equity ratio around 0.5 times.
Strengthen return to shareholders●Raise total return ratio yardstick to 40%, from 35%, and then aim for payout ratio of
30% by fiscal 2021 through stable dividend growth.
●Set upper limit on treasury stock holdings to 5% of total number of issued shares, withexcess of this amount cancelled.

Strengthen
return toshareholders

MaintainfinancialhealthPicture of ROE Success

Investment Strategy

××(Fiscal 2018)(Fiscal 2021)

paralleling growth investments

Financial leverage

1.69

Slight riseGreater improvement in equity
ratio offset by new acquisition ofinterest-bearing debt

1.15

Slight drop Increase in business assets(Fiscal 2021)(Fiscal 2018)
Fiscal 2018

Fiscal 2019

Fiscal 2020

ROE

9.9%

11.5%

12.5%

Net income ratio

5.1%

6.2%

6.6%

Total turnover ratio

1.15

1.14

1.16

Financial leverage

1.69

1.63

1.58

Total return ratio (yardstick)

Payout ratio (yardstick)Upper limit on treasury
stock holdings at(up from 35%)

(by March 31, 2021)(excess cancelled)

40%

Basic Policy● Investment into development of own services● Allocate fixed percentage of business profits for investment andconstantly sharpen competitive edge

● Develop skills of human resources who will realize switch toInvestment in human resources to fuelstructural transformation (¥8 billion)

Total asset
turnover ratio

strategic domains and advanced technology fields

30%● Year-end dividend increase, reflecting good business results (two consecutive years).

Total return ratio at 39.8%.

● Will maintain effective dividend increase in fiscal 2021 as well, working toward payout ratio of 30%.

● Build human resources portfolio that facilitates best possible

Fiscal 2020

Fiscal 2021 (estimate)

Before 1-for-3 stock split

After 1-for-3 stock split

Annual dividend per share¥90[Compared with estimate: +¥10]¥35[YOY change: +¥5]

Acquired treasury shares

Total ¥4,140 million

Total ¥3,030 million*

Total return ratio

39.8%

40.0%

Payout ratio

25.7%

29.7%

deployment throughout Group

Investment in R&D to acquire
advanced technologies (¥5 billion)● Pursue research into advanced technologies anticipating trends● Rev up open innovation＋● Invest in new companies to capture know-how and promote services● Increase investment into alliance companies (higher

Investment to grow strategic domains(¥50 billion, including M&A)

shareholding ratio)

Investment Management Policy*Upper limit of treasury stock buyback announced May 12, 2020

Fine-tune investment management practices to capture appropriate return from robust investment activity
Carefully select investment targets, based on investment efficiency index and investment cost, andtoughen up rules for exit management● Accelerate approaches to software investment for creating new services, with more spending than initially planned over two years.
● Maintain policy on robust growth investment to support structural transformation. However, take changes in the economic environment

Changes in Dividends per Share

(Billions of yen)

Software investment to create new services

17.0

Total return ratio

Actual (Fiscal 2019
–Fiscal 2020)

17.1

Estimate(Fiscal 2021)*Rough estimate

8.0

Most Recent Estimate(Cumulative)*Rough estimate

25.0

8.0

4.5

2.0

6.5

Investment in R&D to acquire advanced technologies

5.0

2.7

2.0

5.0

Total

30.0

24.3

12.0

36.5

37

50.0

＋

ActualAnnual ¥35

38.0

To be determined(Will actively investigate
if investment target is appropriate project)

Annual ¥30
Annual ¥23.3
Annual ¥13.3
30.5%
¥9
16.6%
¥5
Fiscal 2018

[Millions of yen]

Estimate

Payout ratio

4,209[Estimate]

Investment in human resources to fuel structuraltransformation

Investment to grow strategic domains(including M&A)

Total Acquired Treasury Shares■ ■ Interim dividends ■ ■ Year-end dividends

in account and implement individual investment decisions carefully.

Initial Estimate(Cumulative)

5%

Medium-Term Management Plan
(2018–2020)

Key Investment Objectives (envisioned)

Software investment to create new services(¥17 billion)

Improved profits through progresson structural transformation(Fiscal 2021)

Status on Return to Shareholders● Pursue growth investment activity, such as prior investment and M&As, more robustly to fueltransformation of business structure. Envision maximum ¥80 billion in investments over three years.
Investment Policy

6.7％

5.1％

(Fiscal 2018)

39.0%
¥17
22.7%
¥7
Fiscal 2019

¥20
39.8%

4,139

3,030

¥24

[Estimate]

2,859

40.0%
29.7%

(Actually acquired¥3,029 million)

25.7%
¥10

¥11

Fiscal 2020

Fiscal 2021

Fiscal 2018

Fiscal 2019

Fiscal 2020

Fiscal 2021

* Total return ratio: Total amount of dividends and treasury stock buybacks as a percentage of net income.
* The Company executed a stock split, with each share of common stock split into three shares, effective April 1, 2020 (the effective date). Actual results achieved prior to fiscal
2020 have been converted retroactively to reflect the stock split.
38

Message from the Executive Vice President

Conscious of capital costs, we will
pursue robust growth investment

We will pursue sustained
improvement in the corporate
value of the Group.
Masahiko Adachi,

Representative Director,
Executive Vice President

Fiscal 2020 Results
Business confidence began to deteriorate rapidly in the fourth quarter of fiscal 2020, reflecting issues related to the COVID-19
pandemic. But the TIS INTEC Group was able to escape a major impact on its performance, cementing a strong position with net
sales and operating income rising to record highs for the 10th and ninth consecutive year, respectively. On a consolidated basis,
TIS exceeded the upwardly revised targets announced when first-half results were disclosed, and also achieved the four key performance indicators stated in the medium-term management plan a year ahead of schedule.
Net sales, rising 5.5% year on year, benefited from a favorable trend in IT investment by companies seeking to realize management strategies through robust use of digital technology. Operating income climbed 17.9%, as the higher net sales starting
point more than covered our sustained approach to vigorous investment, particularly prior investment to fuel structural transformation as well as brand strategy costs. The operating margin edged up 1.4 point, to 23.9%, with a very commendable shift into
the 25% range in the second half of fiscal 2020. We steadily strengthened our earning power from business activities, including
successful measures to limit unprofitable projects (a management priority) to a low level of about ¥1.5 billion. This was certainly afactor in our ability to hit our operating margin target of 10%. Progress made on various measures driven by a management policy that emphasizes profitability was instrumental—of that I am sure.
TIS booked extraordinary income of ¥10,696 million and extraordinary losses of ¥12,128 million. The primary components ofeach line item are described below but all are connected to bold management decisions aimed at fueling sustainable growth of
the TIS INTEC Group.
●Extraordinary income: ¥6,927 million in gain on sale of investment securities¥3,178 million in gain on sale of fixed assets as part of reduction and consolidation of property andequipment●Extraordinary loss:¥4,112 million total comprising expenses (transfer to provision for office restructuring costs) related to
the relocation and centralization of Group offices in the Tokyo area and impairment loss on reorganization of some existing offices¥2,254 million impairment loss related to full amortization of goodwill arising following Sequent
Software Inc.’s change in status to subsidiary(Millions of yen)

Fiscal 2019

Fiscal 2020

Net Sales

420,769

443,717+22,947

Operating Income

38,043

44,839+6,796 [+17.9 %]Operating Margin

9.0%

10.1%

Net Income Attributable to Owners of Parent Company

26,034

29,411Net Income Ratio

6.2%

6.6%

Net Income per Share (Yen)

307.83350.35

ROE

11.5%

12.5%

YOY changes[+5.5%]+1.1 points–+3,376 [+13.0 %]+0.4 points–+42.52 [+13.8 %]+1.0 points–

Operating Income Analysis, Increase/Decrease Reasons (Billions of yen)

Improved
profitability

38.04
Increased sales

+5.55

+5.56

Increased SGA 44.83
expenses

‒4.31

＋6.79

(+17.9%)

Increased gross profit+11.11Gross profit margin

Fiscal 2019

39

Actual

23.9%[YOY change +1.4 points]

Fiscal 2020

Prior investment costs incurred in promoting structural transformation:
Up ¥1.7 billion (YOY)✓ Software investment to create new services✓ Investment in human resources to fuel structural transformation
Costs related to✓ Investment in R&D to acquire advanced technologies
Brand-related costs incurred to ensure quick recognition in market:
Up ¥0.5 billion (YOY)40

Medium-Term Management Plan
(2018–2020)

For the TIS INTEC Group, management—as in the running of business—assumes a capital cost perspective. And in the current
medium-term management plan, we set a target of 12% for ROE as a key performance indicator (KPI) measuring return on capital cost. We will achieve this target by building an appropriate capital structure, underpinned by a balanced approach in ourefforts to fuel growth investment, ensure good financial health and reinforce shareholder returns. (Reference: Financial strategy
described in medium-term management plan on page 37.)
In fiscal 2020, ended March 31, 2020, ROE hit 12.5%, up 1.0 point from fiscal 2019. We not only exceeded our 12% target
but did so a year ahead of schedule. The biggest factor in this successful result is that the net income to net sales ratio inched up
0.4 point year on year, to 6.6%. But behind this achievement were the core components—higher income and improved profitability, which is a point of particular emphasis—and it is because we reached our ¥43.0 billion operating income and 10% operating margin targets that we were able to boost ROE has high as we did in fiscal 2020.
In recent years, “DX”—that is, digital transformation—has become a buzzword, reflecting heightened IT investment trends
among companies keen to realize management strategies through robust use of digital technology. Consequently, the businessenvironment remains favorable for the information services industry to which the TIS INTEC Group belongs. I am certain that thepositive business environment has contributed to growth in demand for the Group’s services, which has in turn led to solid KPI
results. However, perhaps even more instrumental was TIS’ transition to an operating holding company in July 2016, which provided an opportunity to accelerate decision-making from a groupwide perspective and roll out measures quickly throughout theGroup. Expedited, our efforts to instill the profit emphasis management policy gained broad support and understanding, which
definitely drove profitability higher.
Under unified Group management, we moved beyond efforts to curtail unprofitable projects, which had been a major concern, and achieved success through various measures implemented groupwide to reinforce KPI management, including a process
to gauge potential for profitability at time of order, and improved productivity in the area of enhancement upgrades. In addition,
we made steady progress on a review of the Group’s business portfolio from a profitability perspective. We undertook robust
growth investment for the future and put a virtuous cycle into play, where any increase in costs due to such investment is fully
absorbed by a higher gross profit margin. We were able to achieve a sharper competitive edge in business, and this translated
into increased earning power. Through these efforts, we pushed the operating margin to 10.1%, and the net profit margin
followed suit.

In addition, TIS encourages a vigorous approach to strategic growth investment, including capital and business alliances (akey component of the TIS INTEC Group’s overseas business strategy) and efforts to leverage software investment to turn software
into marketable services. This is the primary reason assets increased. But because we have continued to work toward a tighter
asset balance—paralleling a review of portfolio assets, including cross-shareholdings and real estate—we are able to maintain acertain level of assets without seeing a drop in total asset turnover. Financial leverage is trending slightly downward at the present
time, reflecting the use of generated cash flow as the source of funds for our robust growth investment activity and the capitalleeway to ensure sufficient return to shareholders in line with our basic policy. We must consider changes to the economic landscape caused by such factors as the effects of the COVID-19 pandemic, and we must carefully execute individual investment decisions. But growth investment to fuel structural transformation is a policy that we remain totally committed to, and from a business continuity perspective we recognize the importance of ensuring a level of financial resiliency to withstand unexpected risks,
especially when conditions are so uncertain.

Fiscal 2021 Performance Forecast
With regard to the business environment surrounding the TIS INTEC Group, I have to say that the path ahead is extremely uncertain, requiring careful attention to the still-evolving consequences of the COVID-19 pandemic. The situation is unpredictable andis likely to remain so for the time being, due to such factors as a growing trend toward tighter IT budgets following a turndown ineconomic activity and worsening corporate performances.
Some aspects of our business activities have indeed been affected. It was, for example, rather difficult to make service proposals to new clients during the state of emergency in Japan. Companies went back to work in June, when the government order
was lifted, and with some ingenuity in executing meetings non-face-to-face, marketing activities are gradually being reimplemented. But the view that a challenging business environment will continue through the second quarter remains unchanged.
Against this backdrop, it is impossible to reasonably predict when the COVID-19 pandemic might end, and this hinders ourability to form a performance forecast for fiscal 2021 with a high degree of accuracy. Consequently, management prepared a provisional forecast that assumes efforts to contain the spread of the novel coronavirus will begin to bring the pandemic to a close in
the second quarter of fiscal 2021, and then economic activity will gradually recover. From the third quarter, the business environment for the TIS INTEC Group should normalize.
Due to the challenging business environment that is likely to persist through the second quarter, management sees a drop in
net sales year on year. The same will apply to operating income. Nevertheless, we remain committed to a management policy thatemphasizes profitability while pursuing investment opportunities to ensure future growth. We will continue with measures toimprove productivity and strengthen cost-control efforts to keep profitability at a year-on-year par, on a continuing business basisthat excludes impact from newly consolidated subsidiaries. It is our goal to maintain the 10% operating margin we reached infiscal 2020.

The TIS INTEC Group has made business continuity a priority and is currently engaged in various initiatives conditional upon its
mission to support key social infrastructures and ensure the safety of employees. Attitudes of society as a whole are changing significantly, and against this backdrop, we must be sensitive to developments in the external environment, including changes inindustry structures and evolving social issues, and we must anticipate customer needs. Right and ready responses will fuel business growth. In addition, we must take a flexible approach, including introduction of new workstyles, to mitigate challenging circumstances and leverage quick and bold management decisions. This will underpin sustained improvement in the corporate valueof the Group.

Fiscal 2021 Group Management Direction❶ Deepen unified, groupwide management practices and ensure safe office environment and higher efficiency to better copewith sudden changes in operating environment❷ Maintain financial health while creating social value and engaging in robust growth investment to strengthen ability toprovide digital transformation value❸ Promote measures and review business portfolio to build stable revenue base
❹ Promote growth strategy aimed at becoming top-class IT group in ASEAN region❺ Motivate employees and invest in richly diverse human resources who will drive growth in services and fuel demand for
digital transformation

Business continuity efforts in response to COVID-19 pandemic● Performance forecast for fiscal 2021 will be calculated on assumption of reduced impact from COVID-19 pandemic from second quarter,with economic activity gradually recovering, so that TIS INTEC Group’s business environment normalizes from third quarter.

TIS INTEC Group taking various approaches, premised upon good balance of efforts to uphold mission to support key social
infrastructures and efforts to ensure safety of employees.
Priority measure : allowing workfrom home● Possibility that performance forecast will change, based on actual status of COVID-19 pandemic.

Wider scope of work underwork-from-home measure
Fiscal 2020

Fiscal 2021 (estimates)

Net Sales

443,717440,000–3,717[–0.8%]

Operating Income

44,83944,000–839[–1.9 %]

Operating Margin

10.1%

10.0%

–0.1 points–

Net Income Attributable to Owners of Parent Company

29,411

29,500+89[+0.3 %]Net Income Ratio

6.6%

6.7%

+0.1 points–

Net Income per Share (Yen)

116.78117.95+1.17[+1.0 %]

ROE

12.5%

11.8%

–0.7 points–

YOY changes* The Company executed a stock split, with each share of common stock split into three shares, effective April 1, 2020. Earnings per share for fiscal 2020 is presented
using the number of shares after the stock split.
* ROE for fiscal 2021 is a calculated value.

Fiscal 2021: Operating Income Analysis, Increase/Decrease Reasons [Forecast] (Billions of yen)
YOY change
44.83
Decreased
sales

–0.95

Improved
profitability*+0.31

Decreased SGA
44.00
expenses*
Others–0.83
of newly+0.65 (Impact
consolidated(–1.9%)
subsidiary)*Excludes effect due to change from cost of sales
to SGA expenses, paralleling efforts to enhanceorganizational management (cost of sales down
¥1.5 billion, SGA expenses up ¥1.5 billion)–0.84

Anticipated brand-related costs incurred
to ensure quick recognition in market:
Up ¥0.5 billion (YOY change)

Gross profit margin

Target24.3%[YOY change +0.4 points]

Fiscal 2020

Anticipated prior investment costs forpromoting structural transformation:
Up ¥1.1 billion (YOY change)✓ Software investment to create new services✓ Investment in human resources to fuel structural transformation✓ Investment in R&D to acquire advanced technologies

Fiscal 2021

● TIS employees work from home, in principle, and if that is just not possible, then Company encourages staggered

office hours.

● Clients have been advised of Company policy, and on-site work at client offices has been modified as much as

possible.

● Each data center decides on essential workers needed to maintain operations and ensures means for these(Millions of yen)

Performance-based

Medium-Term Management Plan
(2018–2020)● Currently, not possible to realistically predict when COVID-19 will be stamped out, making it difficult to estimate business results.

Employees at data centers

employees to commute to assigned offices, so operations continue as normal● Thorough approach to prevent infection among staff (everyone wears a mask, temperature checked, surfaces

regularly disinfected)

Provide masks, sanitizing sprayand other protection● Distribute equipment to employees who have no choice but to go to the office because the work they do supportssocial infrastructure so that the work environment is safe and affords peace of mind.

Return to Shareholders
At TIS, our basic policy on return to shareholders is to keep internal reserves at a level sufficient to ensure business developmentfrom a medium- to long-term perspective, while continuing to pay a stable dividend after review of consolidated financial results.
Based on this policy, we seek to enhance return to shareholders by boosting the total return ratio yardstick to 40%, from 35%,
during Medium-Term Management Plan (2018–2020) and then realize a payout ratio of 30% by fiscal 2021 through stable dividend growth.
The annual dividend for fiscal 2020 was higher than in fiscal 2019, extending dividend growth for the eighth consecutive
year. And, as in fiscal 2019, better-than-anticipated business results allowed us to boost the year-end dividend by ¥10 per share.
Consequently, the total return ratio hit 39.8%, after combining treasury stock buybacks amounting to ¥4.14 billion.
Looking to fiscal 2021, we aim to achieve our stated yardstick of a 40% total return ratio and a 30% dividend payout ratio
through effective dividend increase taking into account a 1-for-3 stock split, effective April 1, 2020, and treasury stock buybacks
totalling ¥3.0 billion (completed in May 2020).

Costs
related to

Fiscal 2020

Fiscal 2021 (estimates)

Annual dividend per share

Before 1-for-3 stock split¥90[Compared with estimate: +¥10]

After 1-for-3 stock split¥35[YOY change: +¥5]

Acquired treasury shares

Total ¥4.14 billion

Total ¥3.03 billion*

Total return ratio

39.8%

40.0%

Payout ratio

25.7%

29.7%

*Upper limit of treasury stock buyback announced May 12, 2020

41

42

Business Strategies and Performances by Segment

Service IT Business

BPO

Provides original knowledge-intensive IT services leveraging TIS’ service and industry know-how to create
universalized, template-oriented solutions for clients (includes default configuration and ERP).

Draws on Group’s extensive service menu and IT know-how to deliver business process outsourcing (BPO)
services, including marketing and sales services and office and contract operations.

■ Business Growth Strategies, Focus Points of Medium-Term Management Plan

■ Business Growth Strategies, Focus Points of Medium-Term Management Plan

● With priority allocation of management resources toward growth engines and use of advanced● Improve gross profi t ratio on existing entry services through BPO concentration effect and businesstechnologies, expand business (IT Offering Services) through shift toward business anticipating priorinvestment by clients

restructuring● Watch for changes in structure of payment settlement business and expand prior investment style services

not only for debit and prepaid card transactions but for credit card transactions as well

Segment sales include intersegment sales.

Operating Income

Estimates(Millions of yen)

ActualEstimates

Operating margin(Estimate)
117,617

125,518

122,900

131,500

Fiscal 2021

Fiscal 2020 Performance Results
Payment services expanded, boosting sales, but higher prior investment
expenses and the booking of one-time losses led to lower income.
Exceeded target reset in first half, owing to greater demand for payment
services.

Fiscal 2021 Performance Forecast
Anticipate higher sales and income year on year as clients’ investment in
IT, such as for payment services and the cloud, generates demand that
offsets costs involved in bringing new companies into Group as
consolidated subsidiaries.

ActualOperating Income

Estimates(Millions of yen)

8,519

7.2%

Fiscal 2018 Fiscal 2019

(Estimate)
8,198 7,900

8,500

6.5%

6.5%

ActualEstimates

Operating margin

Initial estimate
38,25736,231

10.8%

33,699 32,400(Estimate)

43,0002,622

33,500

1,638

1,843

(Millions of yen)

(Estimate) Initial estimate
7.8%

7.8% 2,100

2,600

Fiscal 2020

Fiscal 2021

3,000

7.0%

5.1%

Fiscal 2020

Fiscal 2021

4.3%

Fiscal 2021

Fiscal 2018 Fiscal 2019

Fiscal 2020

Fiscal 2021

Fiscal 2021

Understanding the External Environment*

Fiscal 2020 Performance Results●Even amid sudden changes in the business environment, demand forSale of subsidiaries undertaken in previous fiscal year had a major
negative impact on segment sales but profitability continued to improve,
driving income higher.
Efforts to improve profitability fueled significantly higher operating
margin. Met targets.

digital transformation and the trend toward a cashless society should
remain firm. The payment market remained stable, supported by anincrease in e-commerce transactions and government assistance.
Payment methods are diversifying but challenges exist for clients dueto heightened competition and a sharp decrease in inbound demand.
●Social landscape marked by major evolving need for certain companies
to provide cloud-based access. Growth in security market accelerating,prompting wider demand.
●In ERP, despite reinvigorated demand to support migration to
S/4HANA before SAP’s 2025 end-of-service deadline on the existing
platform, there’s a high possibility that mission-critical upgrades will
be postponed, especially in the manufacturing industry.

Note: Due to a shift from business based on expert service know-how specific to the financial sector to knowledge-intensive business using a template of general, financial sectorknow-how, transactions with certain clients were booked under Financial IT Business in fiscal 2020 and will be booked under Service IT Business in fiscal 2021.

Fiscal 2018 Fiscal 2019

Fiscal 2021

Understanding the External Environment*●Continuing growth in demand for BPO services that help companies

improve operations on an administrative level.
●Even greater need for digital innovation due to prolonged labor
shortage and changes in workstyle, including working remotely.

Fiscal 2021 Performance Forecast
New orders may be impacted by prevailing challenges, but changes in thebusiness environment will probably have only minimal overall impact.
Nevertheless, expecting slightly lower sales and operating income.

* Due to the still-unfolding consequences of the COVID-19 pandemic, the operating environment for the TIS INTEC Group is, and will likely continue to be, impacted byuncertainty, at least in the short term, as sluggish economic activity and deteriorating corporate performances fuel a trend among corporate clients to tighten their IT
investment budgets. For assumptions pertaining to the fiscal 2021 performance outlook for the TIS INTEC Group, please turn to page 41.

We will establish service-style business as a growth engine and strive to boost profitability on a groupwide basis.

Yasushi Okamoto
Director, Executive Vice President,
TIS Inc.
43

Service IT is a segment that hinges on service-style business, which symbolizes structural transformation of the TIS INTEC Group. Developing and extending the strengths that exist already within theGroup leads to new capabilities. For this reason, we have pursued a robust prior investment strategy
over the past two years to build the service-style business into a future growth engine that provides
platforms that many clients can make use of. Consequently, the scope of business, particularly
payment solutions, where the Group can best demonstrate its expertise, has steadily expanded. We
recognize that the next step must be to drive profi tability higher.
The COVID-19 pandemic has signifi cantly impacted the way society functions. The businessactivities of the Group have been similarly affected. For our clients, the need to respond accurately ina rapidly changing world is sure to fuel a preference for system use over system ownership. We

always strive to anticipate such needs and are always mentally prepared and ready to act
quickly when needs materialize. This is how we grow our businesses and how we will fulfi ll oursocial mission to contribute to the realization of a bright future.
The BPO segment is one of our forte fi elds. Our current view is that companies will increasingly look to outsourced service providers to handle administrative procedures as demographic
trends—fewer children and more seniors—cause the working population to shrink. This view isunlikely to change. Over the last two years, revenues decreased, refl ecting the sale of subsidiaries in line with a review of the business portfolio. But through measures, including efforts tomake services more high-value-added, we have dramatically improved profi tability. Goingforward, we will accelerate access to digital BPO to chart further growth.
44

Medium-Term Management Plan
(2018–2020)

8.1%

Fiscal 2021

(Millions of yen)

13,000120,000

8,139

Fiscal 2020

Net Sales

Initial estimate

Initial estimate

100,603

Fiscal 2018 Fiscal 2019drawing on shift to high-level, combined BPO and use of forte business knowledge and advanced
technologies

Segment sales include intersegment sales.

Net Sales
Actual● Expand business and boost profi tability (Business Function Service) through more sophisticated BPO

Financial IT BusinessIndustrial IT Business

Leverages business and operating know-how specific to the financial sector to raise value-added quality ofclients’ operations, expand use of IT, and provide IT-based support for operations.

Utilizes business and operating know-how specific to non-finance industries to raise value-added quality ofclients’ operations, expand use of IT, and provide IT-based support for operations.

■ Business Growth Strategies, Focus Points of Medium-Term Management Plan

■ Business Growth Strategies, Focus Points of Medium-Term Management Plan

● Expand business (Strategic Partnership Business) by strengthening connection to extensive client base of● Expand business (Strategic Partnership Business) by strengthening connection to extensive client base in● Increase provided value by utilizing Mode2 and other digital innovations as well as AI and other advanced● Increase provided value by utilizing Mode2 and other digital innovations as well as AI and other advanced

credit card companies, banks and insurers, and creating business together

technologies, and boost profi tability by promoting measures, such as enhancement innovation activities, toimprove productivity

Segment sales include intersegment sales.

106,655

Estimates

106,436

Operating Income(Millions of yen)

114,472 109,800

technologies, and boost profi tability by promoting measures, such as enhancement innovation activities, toimprove productivity

Segment sales include intersegment sales.

Net Sales
Actualindustry and public sectors, and creating business together(Estimate)
115,000

ActualEstimates

Operating margin

14,936

Initial estimate
100,000(Millions of yen)

ActualEstimates(Millions of yen)

(Estimate)
13,90013.0%

15,300Initial estimate

176,485

12,000Operating Income

189,595

202,701 199,800(Estimate)
194,000

ActualEstimates

19,159Initial estimate
185,000

13.3%

Operating margin

18,100(Estimate)
17,90014,777

Initial estimate
14,5009.5%

11,509(Millions of yen)

9.2%

12.0%

12.0%

7.8%

7.8%

10.6%
6.5%

Fiscal 2018 Fiscal 2019

Fiscal 2020

Fiscal 2021

Fiscal 2021

Fiscal 2020 Performance Results
Recorded higher sales and income thanks to wider IT investment by coreclients, which made up for a drop in demand for large system development
projects.
Met target, mainly due to greater IT investment by core clients.

Fiscal 2018 Fiscal 2019

Fiscal 2020

Fiscal 2021

Fiscal 2021

Fiscal 2018 Fiscal 2019

Fiscal 2020

Fiscal 2021

Fiscal 2021

Fiscal 2018 Fiscal 2019

Fiscal 2020

Fiscal 2021

Fiscal 2021

Understanding the External Environment*

Fiscal 2020 Performance Results

Understanding the External Environment*●Demand solid for businesses that support key social infrastructure,

Sales and income up, largely reflecting more IT investment across a wide
range of industries, including core clients in energy- and manufacturing-basedindustries.
Met target, thanks to greater IT investment across a wide range ofindustries, including core clients in manufacturing industry.

●Deteriorating business results and pressure on investment budgets,

such as payments.
●IT investment to sharpen competitive edge, paralleling changes inpayment structure, will continue to grow but must watch timing.

Fiscal 2021 Performance Forecast

Fiscal 2021 Performance Forecast

regardless of industry, will be unavoidable due to sudden changes inthe business environment. The biggest impact will be felt in manufacturing industry and small and medium-sized companies.
●Expect changes in social structure to be drivers of demand creation,
especially in public sector and medicine.

Will capture IT investment demand from core clients, emphasize
value-added services and improve productivity, which should underpin
higher sales and income.

Anticipate negative effect from reduced IT investment by clients in manufacturingsector and small and medium-sized companies, causing drop in sales and income.

Note: Due to a shift from business based on expert service know-how specific to the financial sector to knowledge-intensive business using a template of general, financial sectorknow-how, transactions with certain clients were booked under Financial IT Business in fiscal 2020 and will be booked under Service IT Business in fiscal 2021.

* Due to the still-unfolding consequences of the COVID-19 pandemic, the operating environment for the TIS INTEC Group is, and will likely continue to be, impacted byuncertainty, at least in the short term, as sluggish economic activity and deteriorating corporate performances fuel a trend among corporate clients to tighten their IT
investment budgets. For assumptions pertaining to the fiscal 2021 performance outlook for the TIS INTEC Group, please turn to page 41.

We will lead reforms at client companies as a true business partner and promote business growth along with solutions to social issues.
Financial IT and Industrial IT are core segments of the TIS INTEC Group. Through the course of businessdevelopment over many years, we have built an extensive client base, hinging on top-caliber Japanesecompanies that lead in their respective industries. Over the past two years, we have actively helped
clients, regardless of industry sector, in pursuing digital transformation by providing high-value-added
services. As a result, the Financial IT Business and the Industrial IT Business reached performance targets
stated in Medium-Term Management Plan (2018–2020) a year ahead of schedule. These two segments
drive growth of the TIS INTEC Group overall.

The COVID-19 pandemic has made new proposal activities a challenge. But from a
medium- to long-term perspective, we anticipate a swift digital shift throughout society
and a much greater role for IT services to play in helping to solve social issues. From thisstandpoint, the TIS INTEC Group will not merely tag along with clients but instead willlead reforms and support growth strategies as a true business partner. Through thisapproach, we will not only grow our own businesses but also work in concert with ourclients to address social issues.

Josaku Yanai
Director, Executive Vice President,
TIS Inc.

45

46

Medium-Term Management Plan
(2018–2020)

11,331

12,797

Net SalesPlatform that Supports
Value Creation Process

Corporate Governance

The Group seeks to enhance corporate governance and internal controls, which are vitalto support sustainable corporate growth. The focus is also on promoting quality control/
production innovations, essential for the business of information systems—a key social
infrastructure—to function and steadily evolve, as well as evolving risk management
processes, including information security and compliance. In addition, TIS strives to build
bonds of trust through active communication with all stakeholders and to promotesustainable corporate value in harmony with the evolving values of society.

■ Communication with Stakeholders
The TIS INTEC Group strives to build bonds of trust through communication with all stakeholders, including clients, employees, shareholders and investors, and business partners, and to boost
corporate value.
● Customer service points of contact(call center, website, main number)● Seminars, fairs and forums for clients● Publication of newslettersand technical brochures● Client satisfaction surveys● Regular meetings
Clients
and others

contribution activities

TIS INTEC Group

opinion exchange groups● Day at the office for children of
employees● President’s Caravan
and others

Shareholders
and Investors

Based on OUR PHILOSOPHY (TIS INTEC Group Philosophy) and Group Vision, we haveformulated basic corporate governance policies aimed at improving the Group’s corporate
value in a sustainable way.
Basic Policy
TIS consistently pursues the best corporate governance practices and constantly works to enhance corporate governance.
Management believes that the key to good corporate governance is to ensure transparency and fairness in decisionmaking 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 andboosting 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.

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.

● Charity concerts● Opinion posts from website● Responses to relevant ministries/agencies andindustry associations
and others

Primary methods ofcommunication with stakeholders■ Corporate Governance Structure
Organizational Structure
Chairman of the Board
Number of Directors
Directors’ term of office
Number of Audit & Supervisory Board members
Term of office for Audit & Supervisory Board members
Number of independent directors■ Organizational Chart
General Meeting of Shareholders● Results briefing● Small meetings, domestic and overseas roadshows,participation in conferences● Information disclosure on IR section of corporate websites

Discussion/report
Reports

Audit, reports
Statement of
opinionAppointment, dismissal

Supervision

Audit &
Supervisory Board(Members)

Election, dismissal, supervision

Cooperation

Board of Directors(Directors)

Compensation
Committee
Group Internal
Control Committee● General meeting of shareholders

Appointment, dismissal

Appointment, dismissal

Nomination
Committee

Business
Partners

Company with Audit & Supervisory Board
Chairman and President
Nine, including three external directors
One yearFive, including three external Audit & Supervisory Board members
Four years
Six, including three external directors and three external Audit & Supervisory Board members

Platform that Supports
Value Creation Process● Company news, Group news
● Personnel exchange groups,● Cooperation and support for NGO/NPO social

Community/
Society

Employees● Intranet● Local event participation*Please visit the following page for details of our corporate governance.
http://www.tis.com/ir/policy/governance/

President

Units involved
in internal audits

Reports

Cooperation
Reports

Accounting Auditor

Accounting
audit
Cooperation● Information meetings on policy (guidelines)● Creating opportunities for discussion (project information)● Engineer development and support (educational support, seminars)● New Year celebrations, informal social gatherings

Corporate
Sustainability
Committee● Questionnaires, opportunities for opinion exchange and others● Integrated Report

Reports

Management
Committee
Discussion/report on
significant issuses

Internal audits

Delegation of authority to
execute operations

Executive Officers● Business Report and others
Evaluation

Divisions/Departments

47

Affiliated companies

48

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 outside 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.

President and Representative Director, as the chairperson, andgeneral managers, directors in charge, division managers, andthe head of the Corporate Planning Department, as attendees.
If necessary, the chairperson can request the attendance of
Directors and Executive Officers. If deemed necessary forYear ended March 31, 2020

agenda items related to a Group company, the chairperson canrequest 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.

Management Committee: 37 meetings held

315 agenda items discussed (179 items resolved and 136 items reported)

Directors and Board of Directors
As stipulated in its Articles of Incorporation, the Company’s
Board of Directors will comprise at least three and no morethan 15 directors, and to strengthen the supervisory functionsof the Board of Directors, a policy has been established thattwo or more of the directors must be independent external
directors. At present, three independent external directors havebeen 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 aninformation meeting once a year to present management
direction as well as meetings ahead of Board of Directors’
meetings—in principle, twice a month—to give external
directors and outside members of the Audit & Supervisory
Board sufficient background information to participate indiscussions. In addition, the Company organizes study sessions
with experts—in-house and external—and arranges visits toYear ended March 31, 2020

Board of Directors: 19 meetings held (including one by written communication);

136 agenda items discussed (70 items resolved and 66 items reported)

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

Number of Agenda Items

59

128
66

136

2.09 hours

2.15 hours
1.54 hours

66

60

62

70

Fiscal 2018

Fiscal 2019

Fiscal 2020

Fiscal 2018

Fiscal 2019

Fiscal 2020

Fiscal 2019

Fiscal 2020

Number of Meetings Held
Fiscal 2018
16

19

19

(including one by written
communication)(including one by written
communication)

Management Committee
The Management Committee convenes twice a month inprinciple, where members deliberate and report important

49(Reference) Our Efforts on Group Management
To improve corporate value through unified groupmanagement, the Group focuses on improving performance bycompleting a PDCA (plan-do-check-act) cycle with reference tocurrent key performance indicators (KPIs). TIS and Group
companies evaluate their performance based on 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 reporton 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 a monthly
basis to share information on Groupwide issues andperformance.

Summary of Results of Analysis and Evaluation of Effectiveness of Entire Board of Directors
Since fiscal 2016, ended March 31, 2016, the Company has
evaluated the effectiveness of the Board of Directors each fiscal
year. This process reveals issues and points for improvement
and leads to initiatives that will raise the effectiveness of theBoard of Directors to a higher level. For the fiscal 2020
evaluation, all directors and members of the Audit &Supervisory Board were given a questionnaire to be submitted
anonymously. The questionnaire asked them to conduct acomprehensive self-evaluation and self-analysis of thecomposition and operation of the Board of Directors, and thenthe Board of Directors held discussions based on the results.
The method and results of the evaluation, as well as futureissues brought to light through this process and measures toaddress such issues are described below.
1. Method of evaluation
TIS distributed a questionnaire regarding the effectiveness of
the Board of Directors to all directors and members of the Audit& Supervisory Board. The Company’s Board of Directors used
the responses to analyze and evaluate the effectiveness of theBoard of Directors. Note that TIS conducted this evaluation
based on advice and verification by an external attorney.
2.	Results of analysis and evaluation of effectiveness of
the Board of Directors
The Company’s Board of Directors concluded, based on
Company regulations, that sufficient effectiveness had beenachieved to appropriately supervise the approval of importantmanagement matters and business execution, such as thestatus of business activities and investments at the Company
and Group companies. In addition, the Board of Directors
concluded that the level of effectiveness continues to trend
upward, reflecting improvement measures based on the resultsof effectiveness evaluations conducted in previous years.
However, the Company’s Board of Directors acknowledged
the importance of strengthening governance at each Group
company through their respective boards of directors andimproving the appropriateness of explanations for issues
discussed at board meetings.
3.	Future issues and associated responses, based on
analysis and evaluation
In light of the analysis and evaluation previously mentioned, TIS
will focus particular efforts on the following issues.
(1) Strengthening governance of the Group
The Board of Directors will hold a meeting to exchange
opinions on governance of the Group to clarify issues to be
improved and respond to them.
(2)	Improving the appropriateness of explanations foreach agenda item at the meeting
The Board of Directors will improve the appropriateness of
explanations for agenda items at the meeting and focus on theissues to be discussed, so that the Board can contribute to
management promptly.

matters related to the execution of business activities
throughout TIS and the Group. The committee consists of the50

Platform that Supports
Value Creation Process■ ■ Items Resolved ■ ■ Items Reported

119

local Group facilities and offices. TIS also creates opportunities
for external directors to exchange opinions with the President
and convenes meetings that involve only external directors andexternal members of the Audit & Supervisory Board. Thisfacilitates smooth but vigorous discussion by the Board of
Directors.
The Group seeks to enhance corporate governance andinternal controls, which are vital to support sustainablecorporate growth. The focus is also on promoting quality
control/production innovations, essential for the business of
information systems—a key social infrastructure—to function
and steadily evolve, as well as evolving risk management
processes, including information security and compliance. In
addition, TIS strives to build bonds of trust through active
communication with all stakeholders and to promotesustainable corporate value in harmony with the evolving valuesof society.

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

Policy and Procedures for Election, Dismissal, and Nomination of Directors, etc.
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 growthof the Company as well as the enhancement of its medium- tolong-term corporate value while also considering aspects ofReason for Election of Directors and Audit & Supervisory Board Members

diversity such as gender and internationality. For directors, theBoard of Directors considers nominations based on the adviceof the Nomination Committee, the majority of members ofwhich 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 otherrelevant provisions.

Fields of Members’ Specialization
Title

Directors

Corporate
Industry
Management Knowledge

International
Experience

Finance &Accounting

Representative Director,
Chairman and President

Toru Kuwano●●

Representative Director,
Executive Vice President

Masahiko Adachi●●

Director, Executive
Vice President

Yasushi Okamoto

●

●

●

Director, Executive
Vice President

Josaku Yanai

●

●

●

Director

Takayuki Kitaoka●●

Director

Akira Shinkai●●

Director (External)

Koichi Sano●

Director (External)

Fumio Tsuchiya●

Director (External)

Naoko Mizukoshi

Standing Audit &Supervisory Board Member

Tetsuya Asano●●

Standing Audit &Supervisory Board Member

Tatsufumi Matsuoka●●

Audit & Supervisory
Board Member (External)

Sadahei Funakoshi

Audit & Supervisory
Board Member (External)

Yukio Ono●

Audit & Supervisory
Board Member (External)

Akiko Yamakawa

●

Legal

Toru Kuwano, Chairman and President
Date of Birth: May 3, 1952

Number of shares owned: 53,000 shares

Term of office: seven years

Reason for Election
After assuming the office of President and Representative Director of the Group company,
Mr. Kuwano was appointed as a Director of the Company in June 2013. Since June 2016,he has assumed the office of President and Representative Director of the Company. He hasa wealth of experience and knowledge about the Company’s and its Group’s business, aswell as in business administration.
He was appointed as a Director since he is expected to continue to promote theMedium-Term Management Plan (2018–2020) and fulfill the duties of significant decisionmaking for the Group as well as the administration and oversight of business management.

●

Masahiko Adachi, Representative Director, Executive Vice President●

Date of Birth: May 9, 1956

Number of shares owned: 13,400 shares

Term of office: two years

Reason for Election
Mr. Adachi has been in the office of Representative Director since June 2018 following his
holding the office of Division Manager of the corporate department and the financial system
department of a financial institution and the Company’s Group company.
Based on these experiences, he was appointed as a Director since he is expected tocontinue to promote group governance as set out in the Medium-Term Management Plan
(2018–2020), centered on the corporate function, and fulfill the duties of significant
decision-making for the Group and oversight of business management.
●

●

●

●

●

●

●

Yasushi Okamoto, Director, Executive Vice President
Date of Birth: March 3, 1962

Number of shares owned: 16,152 shares

Term of office: two years

Reason for Election
Mr. Okamoto has been serving as Senior Managing Executive Officer and Division Managerof the planning and development department of industrial systems since July 2016, and has
been in the office of Director since June 2018, after having been engaged in corporate
business in the corporate planning department of the Company for many years.
Based on these experiences, he was appointed as a Director since he is expected tocontinue to promote the Medium-Term Management Plan (2018–2020), and fulfill theduties of significant decision-making for the Group and oversight of business management.

●●●

Josaku Yanai, Director, Executive Vice President
Date of Birth: November 14, 1963

Number of shares owned: 16,900 shares

Term of office: four years

Reason for Election
Mr. Yanai was mainly engaged in the corporate planning department of the Company andits group company for many years. He assumed the office of Executive Officer and Division
Manager of the corporate planning division of the Company in April 2011. Since June 2016,he has been serving as a Director of the Company.
He has a wealth of experience and knowledge about the business of the Company and
the Group, as well as in business administration. Based on these experiences, he wasappointed as a Director since he is expected to continue to promote the Medium-Term
Management Plan (2018–2020), and fulfill the duties of significant decision-making for theGroup and the administration and oversight of business management as a Director.
51

52

Platform that Supports
Value Creation Process

Audit &
Supervisory
Board
members

Name

Directors

Takayuki Kitaoka, Director
Date of Birth: December 14, 1960

Number of shares owned: 3,554 shares

Term of office: two years

Reason for Election
Mr. Kitaoka was engaged in business related to IT infrastructure of INTEC Inc., theCompany’s major subsidiary, and served in management administration of the Group­companies at the Company for three years since April 2012.
Furthermore, he assumed the office of President and Representative Director of INTEC
Inc. in April 2018 and the office of Director of the Company in June 2018. He was appointed
as a Director since he is expected to continue to promote the duties of INTEC Inc. assignedby the Medium-Term Management Plan (2018–2020) and to fulfill the duties of significant
decision-making for the Group and the administration and oversight of business management, based on the above experiences and from the viewpoint of Group management.

Reason for Election
Ms. Mizukoshi is a qualified lawyer and has a wealth of professional knowledge of, andexperiences in, intellectual property, ICT and international transactions.
Her advice and suggestions from an independent perspective will ensure that the decisions
made by the Company’s Board of Directors will be reasonable and appropriate by ­utilizingthese experiences and expertise in the Company’s business, and she is expected to be a person
who will contribute to the enforcement of the corporate governance of the Company.
She has not participated in corporate management but has expertise in corporate legal
work. Therefore, she was appointed as an External Director since she could discharge duly
the duties of External Director.
Audit & Supervisory Board Members

Akira Shinkai, Director
Date of Birth: March 24, 1959

Naoko Mizukoshi* (Partner of Leftright Law & IP), External Director
Date of Birth: September 23, 1967 Number of shares owned: 200 shares Term of office: two years

Number of shares owned: 5,100 shares

Term of office: two years

Reason for Election
Mr. Shinkai was engaged in the business of new service planning and marketing andassumed the office of Director and Executive Vice President of INTEC Inc., the Company’s major
subsidiary, in April 2018, and the office of Director of the Company in June 2018.
Based on these experiences, he was appointed as a Director since he is expected to­continue to promote the Medium-Term Management Plan (2018–2020), and fulfill the duties
of significant decision-making for the Group and the administration and oversight of business
management.

Tetsuya Asano, Standing Audit & Supervisory Board Member
Date of Birth: October 22, 1960 Number of shares owned: 1,300 shares
Term of office: — (assumed office in June 2020)

Reason for Election
Mr. Asano has a wealth of expertise in finance and accounting as well as in corporate management, accumulated through many years of experience of working at financial institutions
and managing companies. He was appointed as an Audit & Supervisory Board Member, as
he is expected to discharge audit and supervisory duties regarding the execution of duties of
the Company's directors in a fair and appropriate manner.

External Directors

Tatsufumi Matsuoka, Standing Audit & Supervisory Board Member

Koichi Sano*, External Director
Date of Birth: August 30, 1948

Number of shares owned: 700 shares

Term of office: four years

Number of shares owned: 3,200 shares

Term of office: one year

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

Platform that Supports
Value Creation Process(Other Important Concurrent Positions)
External Director of Nippon Yakin Kogyo Co., Ltd.
Reason for Election
Mr. Sano worked mainly in the finance and accounting departments, and served as Executive
Vice-President and Representative Director of Mitsui Chemicals, Inc., and has a wide range ofexperience and a wealth of expertise in corporate management. He was appointed as an External
Director since his advice and suggestions from an independent perspective by utilizing theseexperiences and expertise in the Company’s business will ensure that the decisions made by theCompany’s Board of Directors will be reasonable and appropriate, and he is expected to be a­person who will contribute to the enforcement of the corporate governance of the Company.

Date of Birth: December 2, 1957

External Audit & Supervisory Board Members

Fumio Tsuchiya*, External Director
Date of Birth: May 10, 1948

Number of shares owned: —Term of office: three years

Reason for Election
Mr. Tsuchiya previously worked in an important position in overseas offices and the Corporate
Planning Department of Japan Airlines Co., Ltd. After having assumed the office of Director ofJapan Airlines in June 2004, he served as Managing Director and was thereafter appointed as
President & CEO of JALCard, Inc., in June 2007, which is a group company of Japan Airlines.
He has a wide range of experience and a wealth of expertise in corporate management.
He was appointed as an External Director since his advice and suggestions from an­independent perspective by utilizing these experiences and expertise in the Company’s­business will ensure that the decisions made by the Company’s Board of Directors will be­reasonable and appropriate, and he is expected to be a person who will contribute to theenforcement of the corporate governance of the Company.

53

Sadahei Funakoshi*, External Audit & Supervisory Board Member
Date of Birth: August 15, 1954

Number of shares owned: 200 shares

Term of office: four years

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

54

Yukio Ono* (President of Accounting Offices of Yukio Ono),
External Audit & Supervisory Board Member
Date of Birth: January 1, 1950 Number of shares owned: —Term of office: — (assumed office in June 2020)

Reason for Election
Mr. Ono is a certified public accountant and is qualified to help strengthen the Group’s
auditing system by virtue of his expertise in finance, accounting, and other fields, as well as
his long experience in corporate auditing.
Although he has not participated in corporate management, he was appointed as anExternal Audit & Supervisory Board Member based on the judgment that he would be able
to perform his duties appropriately for the abovementioned reasons.
I will use my experience as a certified public accountant to contribute to theenhancement of our Group‘s corporate value.
Due to the rapid development of digital technology, society and the economy have undergone
great changes, and the Fourth Industrial Revolution—at the core of which AI and IoT areembedded—is currently underway. All industrial revolutions have included groundbreaking
inventions and innovations. In this context, our Group’s business of utilizing digital technology
is the driving force that will usher in a new era. In addition, as with infections in the past, the
COVID-19 pandemic is transforming society.
At the same time, modern companies contribute to society and grow through organic
relationships with stakeholders such as customers, shareholders and investors, and employees
as well as local communities and society at large. Our Group can ensure sustainable growth byprocuring capital, investing, and achieving results while maintaining these organic
relationships.
Under these circumstances, our Group’s business of utilizing digital technology is thedriving force that will usher in a new era. To assist the Group in contributing to society as adigital technology mover under OUR PHILOSOPHY, I would like to use my experience inaccounting and auditing to contribute to the sustainable improvement of corporate value
through the further strengthening of governance in our Group.

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 toacquire necessary knowledge regarding the Group’s businesses,

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

Primary Activities of External Directors and External Auditors (Year Ended March 31, 2020)
Attendance at Board of Directors meetings
Name

External
Directors

External Audit& Supervisory
Board members

Attendance rate

Primary activities

Koichi Sano100%

Attended all 17 meetings of the Board of Directors held in fiscal 2020

Fumio Tsuchiya

100%

Attended all 17 meetings of the Board of Directors held in fiscal 2020

Naoko Mizukoshi

100%

Attended all 17 meetings of the Board of Directors held in fiscal 2020

Taigi Ito*

94.1%

Attended 16 of 17 meetings of the Board of Directors held in fiscal 2020

Muneaki Ueda*

88.2%

Attended 15 of 17 meetings of the Board of Directors held in fiscal 2020

Sadahei Funakoshi

100%

Attended all 17 meetings of the Board of Directors held in fiscal 2020

Attendance at Audit & Supervisory Board meetings
Name

Akiko Yamakawa* (Partner of Vanguard Lawyers Tokyo),
External Audit & Supervisory Board Member
Date of Birth: April 5, 1973 Number of shares owned: —Term of office: — (assumed office in June 2020)

I will utilize my experience as a lawyer to contribute to business growth throughappropriate risk management.
In its medium-term management plan, the Company identifies its corporate targets as
becoming a “Company where diverse employees who are reliable, proud, and adopt a unified
approach work enthusiastically” and becoming “a top-class IT group in the ASEAN region” inaddition to the attainment of management goals and the pursuit of structural transformation.
Because the greatest asset of a company is its people, it cannot grow without an appropriate
and advanced human resource system. At the same time, overseas expansion is essential tosurvive in a globalized world. However, risks are inherent in both human resources andoverseas expansion, and appropriate risk management—that is, “avoid risks that should be
avoided and take risks that should be taken”—is extremely important for dynamic andproactive business development. As an attorney, I have provided advice mainly on labor
relations, dispute resolution, and crisis management to a variety of companies with global
operations. Drawing on this experience, I intend to use my role as an external auditor to help
the Company achieve business development while complying with the laws and regulations ofeach country in which it operates and appropriately managing risks.

Primary activities

Taigi Ito*

92.3%

Attended 12 of 13 meetings of the Audit & Supervisory Board held in fiscal 2020

Muneaki Ueda*

100%

Attended all 13 meetings of the Audit & Supervisory Board held in fiscal 2020

Sadahei Funakoshi

100%

Attended all 13 meetings of the Audit & Supervisory Board held in fiscal 2020

Platform that Supports
Value Creation Process

Reason for Election
After registering as an attorney, Ms. Yamakawa joined a foreign law firm and was
responsible for legal affairs at global companies. She is expected to be someone who canappropriately supervise and monitor the lawful execution of the Company‘s global business.
Although she has not participated in corporate management, she was appointed as anExternal Audit & Supervisory Board Member based on the judgment that she would be able
to perform her duties appropriately for the abovementioned reasons.

External Audit& Supervisory
Board members

Attendance rate

* Taigi Ito and Muneaki Ueda retired due to expiration of term at the conclusion of the 12th Annual General Meeting of Shareholders on June 24, 2020.

Summary of Content of Liability Agreements
In accordance with Article 427, Paragraph 1, of theCompanies Act, each of the external directors and theexternal Audit & Supervisory Board members enters into anagreement with the Company that limits legal responsibility
for liability compensation as set forth under Article 423,

Paragraph 1, of the same law.
The limit of liability compensation, based on these
agreements, is an amount provided as Minimum Liability
Amount in Article 425, Paragraph 1, of the same law.

* Designated as an Independent Director/Auditor as specified by the Tokyo Stock Exchange in Japan.
Notes: 1. As of July 1, 2020.
2.	As of July 1, 2016, the Company (previous name, IT Holdings Corporation) changed its name to TIS Inc. due to the absorption-type merger with the previous TIS
Inc. (an absorbed company), wholly-owned subsidiary of the IT Holdings Corporation (a surviving company).

55

56

Outline of Policy on Officers’ Remuneration(2) Structure of officers’ compensation
As shown below, compensation to Company directors consists of a basic component, a performance-linked component andperformance-linked stock incentive. When measures of Company performance are achieved to the maximum degree, compensation
will comprise the basic component, the performance-linked component and the performance-linked stock incentive in a ratio of 7:2:1.
Base component
68%

Performance-linked
component
21%

Performancelinked stockincentive
11%*TIS introduced this performance-linked stock compensation system in fiscal 2019 for directors, executive officers and executive fellows (excluding external directors,
nonexecutive directors and residents outside Japan) with the objective of making eligible directors more aware of their contribution to enhanced business performanceand improved corporate value over the medium to long term and to align their interests with those of shareholders.

(3) Structure of compensation for External Directors and Audit & Supervisory Board members
Compensation paid to external directors is limited to basic compensation only, with no performance-linked component.
Compensation for Audit & Supervisory Board members is decided through discussion by corporate auditors. From the perspective of
maintaining a high degree of independence, compensation is not linked to business performance and consists solely of basic
compensation.
(4) Other
To boost medium- to long-term business performance, directors (excluding outside directors) are asked to contribute a certain
portion of their basic compensation toward the purchase of treasury stock through the Company’s share ownership plan for directors
and officers, and they are expected to retain such stock in full for the duration of their time in office so that the acquired stock
shares value with all shareholders.

a.	Attainment of business plans formulated at the beginning of the fiscal year in accordance with the mid-term management plan is
confirmed by the Performance Evaluation Committee.
b.	The President and Representative Director evaluates the directors and Audit & Supervisory Board members at the meeting of the
Performance Evaluation Committee referred to in a. above.
c.	The Compensation Committee meets to consult on the results of the evaluation in b. above and amounts of compensation basedon the results of evaluation.
d.	The Board of Directors votes on whether to approve the amounts of executive compensation considered by the Compensation
Committee in c. above.
Performance-linked stock compensation is calculated in accordance with the Stock Issuance Regulations. The Board of Directors
and the Compensation Committee have no room for discretion.

57

Individual Performance
Evaluation
A
B
C D
E
A
B
C
D
E

Distribution composition (image)In fiscal 2020, performance-linked compensation was determined by applying a 30% performance evaluation coefficient based on
the level of attainment of targets in the previous fiscal year including Consolidated Sales, Consolidated Operating Income, andConsolidated ROE.
Performance indicators

Fiscal 2020, ended March 2020

Fiscal 2019, ended March 2019

Estimates

ActualActualConsolidated Sales¥436,000 million¥443,717 million¥420,769 million

Consolidated Operating Income¥42,000 million¥44,839 million¥38,043 million

12.1%

12.5%

11.5%

Consolidated ROE● Performance-linked stock incentive

For the performance-linked stock incentive, the Board of Directors established the Stock Delivery Regulations when the performancelinked stock incentive plan was introduced. Points are granted to directors on a scale between 0% and 15% of basic compensation
set for each position according to the level of achievement made toward reaching performance targets stated in the management
plan and as provided for in the Regulations. The number of shares delivered will correspond to the number of points accumulated.
For corporate performance indicators, Consolidated Operating Income, Consolidated ROE, and Service Business Sales wereadopted as financial indicators to encourage pursuit of business growth, and employee satisfaction was adopted as a nonfinancial
indicator to encourage pursuit of higher job satisfaction among employees, and to ensure attainment of enhanced corporate value
as expected by the shareholders.
In fiscal 2020, the amount of performance-linked stock compensation was determined by applying a performance-linked
coefficient of 150% because actual results exceeded estimates (100% performance-linked coefficient when attained) by a wide
margin.
Performance indicators

Consolidated Operating Income

Fiscal 2020, ended March 2020
Estimates

Actual¥42,000 million¥44,839 million

12.1%

12.5%

Service Business Sales¥40,941 million¥42,091 million1

Employee Satisfaction

45.0%

46.0%2

Consolidated ROE

Notes: 1.	Predefined as a target in the Stock Issuance Regulations based on operations selected for their contribution to the structural transformation of the Company on a
non-consolidated basis. They do not represent service business sales on a consolidated basis.
2.	Determined by a questionnaire survey conducted by an outside organization. Satisfaction is scored based on the proportions of employees who answered “often
applies (4)” or higher regarding “trust.”

58

Platform that Supports
Value Creation Process● Process for determining executive compensation

Organizational
Performance
Evaluation(1) Determination of compensation
The Company has established the Compensation Committee, comprising mainly independent external directors, as an advisory bodyto the Board of Directors to ensure objectivity and transparency in the process for determining compensation and to strengthen thecorporate governance structure.
The basic policy on officers’ compensation is to provide greater incentive to improve business results through a system ofcompensation 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.

● Basic compensation
Basic compensation is paid according to the size of the role and scope of responsibilities of each position.
● Performance-linked compensation
Performance-linked compensation is determined by the degree to which measures of corporate
performance have been achieved, on the basis of the management plan for each fiscal year, andshall fall within a performance evaluation coefficient of between 0% and 30% of basic
compensation for each position.
The performance evaluation coefficient consists of organizational performance component
and individual performance component in a ratio of 3:7. Organizational performance andindividual performance are each evaluated on a five-point scale to determine the amount of
performance-linked compensation.

● Outline of performance-linked stock compensation system

An Executive Compensation BIP Trust (hereafter, “BIP Trust scheme”) was introduced as a performance-linked stock compensation
system by resolution of the 10th General Meeting of Shareholders held on June 26, 2018. Those eligible for benefits are directors(excluding external directors and non-executive directors), executive officers with portfolios, executive officers, and executive fellows(hereafter, “Directors, etc.”).
a. Organization of the BIP Trust scheme
On introducing the BIP Trust scheme, the Company established the Stock Delivery Regulations for Executive Compensation BIP Trust(Stock Delivery Regulations), under which TIS entrusts a nominated trust bank with money (not exceeding ¥500 million), and thetrust bank acquires TIS shares with the entrusted money.
The scheme grants points to Directors, etc., in accordance with the Stock Issuance Regulations. The number of shares to bedelivered will correspond to the number of points accumulated, which is calculated by the formula below.
Calculation Formula
The number of TIS shares to be delivered (points*) = Base amount × Performance fluctuation coefficient ÷ Acquisition cost per unit

Total remuneration amounts and other information about officers who received remuneration in an amount of ¥100 million or more
on a consolidated basis is as follows.
Remuneration by type (Millions of yen)
Name

Toru Kuwano

Director

Basic
remuneration

Performancelinked
remuneration

Performancelinked stockcompensation

73

15

11

Submitting
company

The Nomination Committee and the Compensation Committee were established as advisory bodies to the Board of Directors toensure objectivity and transparency in decision-making processes pursuant to appointment of directors and associated compensationand to strengthen the corporate governance structure.
Nomination Committee

Composition of members

b. Total number of shares to be granted to Directors, etc.: 183,900 shares in one financial year (upper limit)
Note:	The Company executed a stock split, with each share of common stock split into three shares, effective April 1, 2020. Accordingly, the upper limit on the numberof shares delivered through the trust represents the post-stock-split number of shares.

c. Scope of individuals able to receive beneficiary rights and other rights under the BIP Trust scheme:
Individuals who have retired from being a Director, etc., and meet the beneficiary conditions specified in the Stock Issuance
Regulations.

Remuneration for Directors and Audit & Supervisory Board Members (Year Ended March 31, 2020)

Performancelinked
remuneration

Performancelinked stockcompensation

287
(31)

214
(31)

47
(—)

25
(—)

6
(3)

67
(25)

67
(25)

—

—

(—)

(—)

15
(6)

354
(57)

281
(56)

47
(—)

25
(—)

Remuneration

Directors(External Directors)

9(3)

Audit & Supervisory Board members(External Auditors)
Total(External Directors and External Auditors)

Notes: 1.	For the fiscal year ended March 31, 2020, 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.	As of March 31, 2020, the Company has nine directors, including three external directors, and five Audit & Supervisory Board members, including three external
auditors. The discrepancy in Audit & Supervisory Board members between this number and the number of recipients above is attributable to the inclusion of one
member who retired at the conclusion of the 11th Annual General Meeting of Shareholders on June 25, 2019.
3.	Limits on compensation (basic compensation and performance-linked compensation) for directors and members of the Audit & Supervisory Board were approvedat the First Annual General Meeting of Shareholders on June 25, 2009, with the limit on compensation for directors set at ¥400 million per year (of which,external directors receive no more than ¥50 million) and that for members of the Audit & Supervisory Board set at ¥85 million.
4.	The performance-linked stock incentive is booked as an expense for four directors (excluding external directors and non-full-time directors) in the current businessyear.
		Note that this performance-linked stock incentive was approved by shareholders at the 10th Annual General Meeting of Shareholders on June 26, 2018, wherein
the upper limit on the number of shares is 183,900* per fiscal year, to be delivered through a trust into which the Company contributes up to ¥500 million ineach specified period (three fiscal years) for eligible directors (excluding external directors, non-full-time directors), executive officers and executive fellows.
		* The Company executed a stock split, with each share of common stock split into three shares, effective April 1, 2020. Accordingly, the upper limit on thenumber of shares represents the post-stock split number of shares.

All committee members: 4 (internal Directors: 1, external Directors: 3)
Chairman: President and Representative Director of TIS
Provide advice on matters related to decisions oncompensation for directors

Status of activities bycommittees(Fiscal 2020)• Held twice in fiscal 2020 with 100% attendance• Held six times in fiscal 2020 with 100%of all the members
attendance of all the members• Discussed the appropriateness of the Company’s• Provided advice on the appointment andcompensation package through a comparative
retirement of key individuals, including
analysis of director compensation amounts at
directors, and presented proposals on changes
to director composition, based on discussions by other companies and at TIS, based on thefindings of a research company, as well as theCommittee members
appropriateness of the calculation method used
• Gave advice on future approaches for a
to determine performance-linked compensation
succession plan based on the current status• Made proposals to the Board of Directors on
shared by the members
director compensation, based on the results ofdiscussion by the Committee

Remarks

To provide sufficient information for members to facilitate smooth proceedings, the committees arechaired by Chairman and President, an internal director. To promote higher effectiveness of theCommittee, the Company encourages forthright discussions among the members.

Constructive Dialogue with Shareholders
TIS will engage in constructive dialogue with shareholders
based on the IR Policy in order to contribute to the Company’ssustainable growth and the enhancement of its medium- tolong-term corporate value. In addition, the Company will strive
to develop a system to promote constructive dialogue withshareholders. The director of the IR Department will supervise
the dialogue with shareholders, consider response methods
with the President and Representative Director, executive
officers in charge, and the IR Department, and will respond
appropriately. The IR Department will share information andexchange opinions in a timely manner based on the respective
specialist standpoints of relevant departments and will support
dialogue with shareholders through organic collaboration.
In relation to shareholders, TIS will strive to broaden themeans of dialogue such as through individual face-to-faceinterviews as well as telephone interviews, and holding businessresults briefings and small meetings. Furthermore, in addition toactive information disclosure, which will be the premise for
dialogue, the Company will strive to expand the contents of theIntegrated Report, which will be positioned as an effective toolfor dialogue.
TIS will share opinions put forward in constructive dialogue
with capital market participants such as shareholders, investors
and securities analysts within the Company through reports andbriefings to the Board of Directors, and use them in reviewing
the Company’s management strategy, and for other purposes.
In the case of dialogue with shareholders, TIS will pay
attention to the fairness of information disclosure and manageinternal information appropriately in accordance with the Rules
for Prevention of Insider Trading.
60

Platform that Supports
Value Creation Process

Basic remuneration

Recipients (Persons)Compensation Committee

Provide advice for selecting candidates to theRole of committee members position of director and matters related to theappointment of such individuals

Remuneration by type

59

100

Type ofcompany

Nomination Committee and Compensation Committee* Decimals rounded down

(Millions of yen)

Remuneration(Millions of yen) Type of officer

Messages from Our External Directors

We will utilize the experience and knowledge of external directors to enhance the corporate
value of the TIS INTEC Group.

Strategically Held Shares
1.	Policy and viewpoint regarding reduction of strategicallyheld shares
TIS and other companies under the Group umbrella hold sharesin other companies only when management believes this isnecessary for such purposes as establishing long-term, stable
relationships with customers and promoting business that willcontribute to the sustainable growth and higher medium- tolong term corporate value of the Company and the Group.
Each year, the Board of Directors reviews the relevance ofcross-shareholdings. It is corporate policy for any crossshareholding that the Board of Directors deems to be ofdiminished significance for the cross-shareholding to be sold at
the earliest possible opportunity.
To determine relevance, TIS uses business-related revenue if
the issuing company is a customer of a Group company orannual transaction amount if the issuing company is a strategic
partner to calculate a percentage on a balance sheet basis, andmanagement will consider selling any issue with a ratio that falls
below a benchmark set by the Company.

For cross-shareholdings with diminished significance, as
identified through the aforementioned method, TIS moves toreduce cross-shareholdings in accordance with this basic policy.

We received the following messages from our external directors regarding future themes, expectations,and issues of the Group as it undergoes structural transformation.

Strengthening sustainability through ESG management
2.	Policy on exercising voting rights relating to strategicallyheld 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.
Koichi Sano, External Director

3. Relationships with strategic shareholders
If strategic shareholders of TIS indicate an intention regarding
the sale of TIS shares, we will respond appropriately without
preventing such a sale. Moreover, we will not conducttransactions that lack economic rationality with strategic
shareholders.

Numbers of stocks held by the Company for purposes other than portfolio investment and total amounts recorded in the balance
sheet are as follows.
Fiscal 2019, ended March 2019 Fiscal 2020, ended March 2020

Number of stocks
Total amount on balance sheet

87 stocks

96 stocks¥44,423 million¥53,632 million“Open and flexible thinking” and “healthy skepticism” will lead to theachievement of structural transformation

Fumio Tsuchiya, External Director

Amount on Balance Sheet■ ■ Listed Stock ■ ■ Unlisted Stock

98

45

87

–8
–4
–4

■ ■ Listed Stock ■ ■ Unlisted Stock

+17

96

+17

56,7004,838
44,423
5,734

65

52

+19,194–7,764–7+19,187(Millions of yen)

–2,221–1,024–1,19753,632
23,889–7,756+7

51,862
38,68943

Fiscal 201861

Fiscal 201929,742

31

35

Sold

AcquiredFiscal 2020

Fiscal 2018 Fiscal 2019

Sold

Acquired

One of the main pillars of the Company‘s medium-term management plan is “structural transformation”. In addition
to the build-to-order business—in which IT systems are built in response to customer requests—the Company isfocusing on expanding into the proposal-driven business, which anticipates customer requests. The Company is also
actively expanding its business in overseas markets, primarily through capital tie-ups with leading IT companies in the
ASEAN region, and the results of these initiatives have been steadily reflected in its performance in recent years. To
promote such structural transformation, I believe it is essential to move beyond conventional methods and encourage“open and flexible thinking” to tackle challenges aggressively.
On the other hand, in new business domains such as overseas operations operating under different laws andbusiness practices, it is important to recognize and address the inherent risks. In the process of expanding our business, various risks are sometimes encountered for which there is little accumulated experience. When this occurs, I
believe that it is necessary to have a “healthy skepticism” backed by calm judgment in order to conduct appropriate
risk assessment. I also feel it is important to strike a balance between vigorously promoting business and taking a
step back to judge the situation calmly. Using this as the basis of decisions by external directors, I intend to do what I
can to contribute to promoting structural transformation.

Change in Fiscal 2020
Fair Value,etc.

Enhancing corporate governance to support steady transformation andsustainable growth
The Board of Directors is charged with focusing on important issues that are essential for disciplined and sustainablegrowth. Deliberations are not limited directly to the matter at hand, but include discussions on the purpose, background, impact, and root cause of issues under consideration. The agenda items for discussion increasingly include
such topics as investments to capture innovation, stock acquisitions to expand the business base in ASEAN, and strategic alliances. Human resource development, organizational diversity, and the prevention of impropriety and adverse
events continue to be important, and we prepare for substantive deliberations at the Board of Directors after holding
prior briefings.
As an external director, I participate in discussions to assess the social significance, competitive advantage, efficiency, and feasibility of proposals from the perspective of stakeholders, including shareholders. In particular, in our
Naoko Mizukoshi, External Director overseas business, while systems and practises differ from country to country, I believe that we need to further
enhance our corporate governance in order to deepen relationships of trust with our business partners in ASEAN and(Partner of Leftright Law & IP)grow together with the aim of providing high-quality services and resolving social issues. In addition, now that we arecoping with the impact of COVID-19, I believe it is necessary to ensure the health of our workforce, while making
dynamic decisions in the execution of business and considering the environment. I will strive to contribute to theGroup’s growth and fulfill my responsibilities while responding to changes in the operating environment.
62

Platform that Supports
Value Creation Process

According to the policy on strategically held shares, TIS sold entire holdings of eight stocks and partial holdings of one stock for theyear ended March 31, 2020, steadily reducing the amount of previously held cross-shareholdings. On the other hand, as part of its
growth strategy, TIS actively makes investments in startups with the objective of developing strategic partnerships to facilitate open
innovation, and forms capital and business alliances with leading foreign companies. In fiscal 2020, 17 unlisted stocks were newly
acquired, including an issue of Grab Holdings Inc. (approximately ¥16.5 billion).

Number of Stocks

In the fiscal year ended March 2020, the Board of Directors passed a total of 17 resolutions (excluding statutory matters, etc.) and these covered almost all major areas evenly, such as investment and financing for growth strategies,
corporate governance and sustainability, and finance and balance sheet control, as well as discussing current management issues.
Furthermore, the number of affiliated companies increased approximately 150%, to 122, after the transition toan operating holding company.
The Board of Directors, whose effectiveness has been improving year by year, recognizes the important themesof promoting growth strategies that emphasize investment returns and building a solid financial base, risk management related to the expansion of overseas Group companies, and strengthening corporate governance. I focus on
making sure the Group pays close attention to the relationship between the overall strategy and the business portfolio, the differentiation strategy, the validity of feasibility studies and assumptions, and the appropriateness of postmerger integration of investment projects. In light of this, I will advocate for prudent yet bold decision-making andmonitoring of business execution from an independent and objective perspective, while contributing to proactive andprotective governance in response to management issues, thereby enhancing corporate value.
Opportunities to contribute to solutions to social issues and emerging needs through business activities are
increasing. With TIS’ status as a public entity, environmental, social and corporate governance (ESG) management
aims to balance and improve economic value and social value by giving consideration to the concerns of a wide
range of stakeholders. ESGE management (E for Economy) aims also to increase corporate value and thereby
enhance sustainability through portfolio management, and I want to participate by imparting a sense of priority andspeed. In the pursuit of sustainability, I will emphasize the process of developing strategies from our long-span,
deductive value-creating corporate image. I will also focus on human resource strategies that support this process
and on strengthening our ability to respond flexibly to continuous change.

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

The Group defines “risk” as “any factor that may hinder the achievement of the management philosophy, goals, andstrategies of the Company and the Group by causing economic loss; the interruption, stagnation, or suspension ofbusiness operations; and/or damage to the Company’s credit or brand image”.
The Company has established rules for risk management to ensure an accurate understanding of the risks facing theGroup and prevent losses from occurring. In accordance with these rules, we have appointed an executive to oversee risk
management of the entire 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 theimplementation status of measures to control risk. When a Group company becomes exposed to a serious risk, a task
force is set up and appropriate measures are taken to minimize 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 the entire 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 theBoard of Directors. 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 reform measures. Based on its reports to the Board of
Directors, initiatives will be implemented to further strengthen and improve the Groupwide internal control system.

Financial risk

Management process diagram

Systemdevelopment

Risk items

Overview of risk

Main countermeasures

Owned securities

Sharp fluctuations in the market prices of marketablesecurities or deterioration in management conditionsof issuing entities requires the posting of accounting
losses or other similar measures.

• Thoroughly examine issuers’ financial condition, business results trends, credit ratings,
and other relevant indicators.
• Regularly review the suitability of our securities holdings and divest as soon as possible ifcontinued holding is deemed risky.

Hazard risk
Overview of risk

Main countermeasures

Pandemics (theglobal spread ofcommunicablediseases)

Risk items

A sharp constriction of the productive activities of ouremployees and those of our business partners.

• Keep abreast of the responses of the World Health Organization (WHO), the Japanese
government, and other relevant authorities.
• Take action to improve hygiene at our offices, data centers and other work sites, basedon the Group’s business continuity plan, and refrain from sending employees to work inareas heavily stricken by infection.
• Establish a work environment that facilitates working from home.

Natural disasters

A large natural disaster results in an extended power
outage that interrupts the smooth operation of data
centers.

• Make preparations to facilitate our data centers’ response to all manner of disasters.
• Close older data centers and focus on the development of state-of-the-art data centers
equipped with seismic-isolation structures, robust disaster-mitigation equipment,
emergency power generators, fuel storage equipment, and highly reliable electric power
equipment, and negotiate contracts for prioritized power supply.

Operational risk
Risk items

Risk occurrence frequency
Definition of risks
Subcategories

Items

Strategic risk

10

39

Financial risk

4

14

Hazard risk

39Operational risk

1040

Evaluation

Degree of damage

Main categories

1

2

3

4

5

Great

6

7

8

9

10

Large

5

6

7

8

9

Medium

4

5

6

7

8

Small

3

4

5

6

7

Slight

2

3

4

5

6

High risk
7–10 Prioritize the implementation of countermeasuresand constantly monitor risk trend
5–6

Medium risk
Implement countermeasures andcheck risk trends periodically

2–4

Low risk
In principle, adopt a wait-and-see stance

Priority risks shared by
all Group companies
Implement Group-wide response
Evaluate and improve(each fiscal half)
Review risks (each fiscal year)

Identify risks to be prioritized(mitigated) by the Group fromamong the high-risk items

System operation

Overview of risk

Main countermeasures

As systems development is growing more sophisticated and complex and turnaround times areshortening, extra work may be required in order toachieve the planned level of quality or complete theproject during the development period, leading toconsiderably higher-than-expected costs andcustomer claims for damages.

• Use our proprietary Trinity quality management system based on the ISO 9001 standard
to continually enhance quality management and raise productivity by using dedicatedworkgroups to thoroughly screen business proposals and review projects at each stage ofdevelopment.
• Through the Group Quality Executive Meeting, improve quality and promote production
innovation throughout the Group while also enhancing management and technologicalcapabilities by strengthening training programs for each employee position.

Tasks outsourced to business partners do not meet
expectations for productivity or quality and smoothproject management is not realized.

• Seek to secure superior business partners in Japan and overseas. That effort includes
regular meetings with our partners so that we fully understand their situation andcapabilities, and are able to build strong relationships.

System problems arise due to human error or• Develop a systems maintenance/operation framework based on ITIL (Information Technology
equipment malfunctions during system operation andInfrastructure Library) practices and improve system operation quality using this framework.
the Group is unable to provide services at the level• Establish and strengthen measures for early detection and confirmation of system failures
agreed upon with the client.
and measures to reduce and prevent the occurrence of failures.
• Establish and operate an information security management system based on ourInformation Security Policy that seeks to ensure appropriate information management.
• Raise employee awareness through education and training programs.
• Apply the Group’s information security promotion guidelines to evaluate the status of
information security management across the entire Group, and promote continuous
improvement in information security.
• When an information security breach does occur, take responsibility and establish an
investigative committee to look into the cause, implement countermeasures, and prevent
recurrence.
To protect personal information• Establish an information management system based on Japan’s Personal Information
Protection Act and establish regulations on the handling of information about specificindividuals.
• Conduct education and training programs for employees to raise awareness of theimportance of protecting personal information.
*TIS and other Group companies have obtained Information Security Management System(ISMS) certification and the JIPDEC PrivacyMark.

Legal systems,
compliance• Establish a compliance structure based on our Basic Direction on corporate social
responsibility (CSR) and Group Compliance Declaration and endeavor to conduct ourbusiness activities fairly and in compliance with all laws.
• In accordance with the Group’s compliance regulations, discuss important compliance issues
for the entire Group, decide measures to prevent recurrence, and ensure the adoption
throughout the Group by monitoring the status of the implementation of these measures.
Regulations on contracted work and temporary staffing• Work on a dedicated risk management system as Group priority because of the transactional nature of the IT services industry.
• Create Group guidelines and independent inspection checklists that will contribute to theappropriate operation of the system.
• To prevent illegal activities and detect and correct them at an early stage, introduce awhistle-blowing system and establish a reporting and consultation desk. Raise awarenessof legal compliance throughout the Group.

Strategic risk
Risk items

Overview of risk

Main countermeasures• With the aim of enhancing workstyle reform and employee motivation, strive to securetalented human resources by providing a corporate culture, HR systems, and an officeenvironment in which a diverse group of people can thrive.
• Focus on human resource training by providing support for acquiring certifications,systemizing training programs, and creating plans and targets for the number of training
days.

Human resources

High-quality human resources are not secured anddeveloped according to plan.

Innovation of
production
technology

Loss of competitive advantage and inability to provide • Constantly conduct research into information technologies as well as production andthe high-quality services that our customers havedevelopment technologies.
come to expect because we fail to take appropriate• Select from a broad technology portfolio the core technologies that will enable us to sustain
measures, or let our technologies and knowhow
and improve our development competitiveness, advance R&D and deploy the results.
become obsolete.
• Constantly carry out enhancement and innovation activities.

Intensification ofprice competition

Price competition may intensify, resulting in greaterthan-expected price competition.

• Constantly analyze the business environment to better grasp customer needs, offer
higher value-added services and take other measures to differentiate from competitors.
• Improve productivity by curtailing unprofitable projects and engaging in enhancement
and innovation activities.

Investment

Unanticipated changes in the business environment
result in investments failing to yield the expected
result or return, or make assets obsolete.

• All investment decisions are made after thorough examination of business plans by either
the Board of Directors, the CVC Investment Committee, or the Investment Committee,
depending on the investment project.
• Progress of each business plan is periodically confirmed after an investment has beenmade.
• Keep abreast of such progress by dispatching directors to larger capital investment partners.

Overseas business

63

Overseas business may be impacted by various
factors, including global economic and foreignexchange trends, legal regulations on investment andcompetition, local business practices, and labormanagement relations. One of these factors may
manifest itself in an unanticipated manner.

• Improve the management structure by ensuring coordination between overseas Group
companies and business sites and corporate management in Japan to maintain an
accurate understanding of local conditions and consult on ways to implement rapid
countermeasures.

A law or regulation is contravened, or a new law or
regulation is introduced.

Intellectual property The Group is accused of infringing another company’s • Strengthen our framework for intellectual property rights.
rightsintellectual property rights and presented with an• Conduct education and training programs to raise employees’ awareness.
injunction to cease use of the intellectual property* The Company regards its own intellectual property as an important management resource
concerned and a claim for damages.
and takes all necessary means to protect it.

Important notice
INTEC Inc., a consolidated subsidiary of the Company, is currently in litigation with Mitsubishi Shokuhin Co., Ltd., which filed a claim
for compensation in connection with services including systems development provided by INTEC Inc. (Amount of compensation
demanded: ¥12,703 million; date the complaint was received: December 17, 2018).
64

Platform that Supports
Value Creation Process

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

Quality Control and Production Innovation

Aiming to be a “trusted top brand that epitomizes quality”
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.

Activities aimed at improving standards of entire GroupThe 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.
Group Quality Executive MeetingGroup Technical Reinforcement Committee

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

Promotes sharing and effective use of eachcompany’s activities in order to strengthen
the Group’s development competitiveness

Deficit eradication

Enhancement innovation

Offshore promotion

Strengthen technical capabilities

Know-how and tool
sharing● Enhancement framework● Diagnoses, etc.

Sharing and lateraldevelopment ofoffshore promotion
measuresUtilize Fintan* and activate feedback*System development know-how/tool aggregation site

● Provide optimal services to earn the trust of customers.

Group screening● Proposal review● Review at start● Process inspection● Project review

Enhancement
activity presentation
Service manager
training

Shared use ofoffshore BP

the core.
● Use standard repetition and ingenuity to promote improvement activities aimed at enhancing
quality, productivity, technical capabilities, and competitiveness.

Sharing and lateral
deployment of project risk
management measures● Project management
training

TIS Quality Policy (from TIS “Quality Control Rules”)● Strive to improve stakeholder satisfaction, provide original and attractive services, and create

abundant value.

● Provide high-quality services through continuous business transformation with technology as

Revitalize canal**Technical support/Q&A service site
Introduce architect reviews to eliminate
technical risks

Events, such as
offshore colleges

Results in fiscal 2020, ended March 31, 2020
●TIS companywide review proposals: 104●TIS system development meetings: 213●Group Technology Enhancement Committee meetings: 11 ●Number of Group screenings: 145●Group Quality Executive Committee meetings: 29

Trinity: Original quality management system based on ISO 9001
We strive to provide customers with optimal services based on our policies of “emphasizing proficiency through on-site standardization and its repeated use” and “promoting improvement by minimizing essential implementation items and making use of
onsite ingenuity.” At development sites, we add ingenuity to suit each business model
while applying project management and engineering processes, techniques, and tools.
We are expanding the scope of coverage to include not only scratch development
but also a wide variety of business formats.
* Trinity means the “three elements of quality, productivity, and technological capabilities” and also
incorporates the notion of “customers, TIS, and partners” working together to improve those elements.
* For more details:
http://www.tis.com/group/csr/report/social/quality/

Enhance profit margin (TIS parent)

Development losses and loss rate (TIS INTEC Group)(100 millions of yen)
44.7
2.1%
18.7

Fiscal 2017

21.7

0.9%

0.9%

14.5
0.6%

Fiscal 2018

Fiscal 2019

Fiscal 2020

10.0
Fiscal 2021
(estimate)Continue implementing measures to eliminate losses and strengthen Group governance toprevent and control unprofitable projects → Improve profitability by reducing development
loss rates

Offshore outsourcing contracts (TIS parent)

10.6

Process

Project execution

Planning/
proposal

Plan

Design~development/
testing~transition

Enhancement(maintenance/
operation)

Termination

5.6

Fiscal 2017

Proposal
reviewStandard
contract
quotation guide
Planning/
Proposal

Project start
review

Process review(each process start/end)

Project management standard
Development process standard (Mode1/Mode2)
Quality control, project management, engineering
Human skills, management skills, expertise

65

Fiscal 2020

Fiscal 2021
(estimate)

Constantly improve profitability through companywide innovation and Group
resource redeployment

14.5

6.9

Fiscal 2018

Fiscal 2019

Fiscal 2020

Fiscal 2021
(estimate)

Fiscal 2017

Fiscal 2018

Fiscal 2019

Fiscal 2020

Fiscal 2021
(estimate)

Improved gross profit margin asa result of various measures

Companywide/organizational process reviews

Project risk
management

Education

Fiscal 2019

Gross margin on development (TIS parent)

Initiative 1: Use fewer contractors, especially major project participants (four major companies)
Initiative 2: Promote lab utilization for maintenance and enhancement work
Triple outsourcing contracts in four years. Achieve more than 10,000 work months.

Project monitoring (QCDR status) + Project health check (every 3 months)

Standardized
knowledge

12.4

Fiscal 2018

Platform that Supports
Value Creation Process(1000 work months)

Fiscal 2017

Project review(final report)

The gross margin on development sales has improved significantly, and we will continue ourefforts to prepare for the new normal.

Enhancement
framework

Service manager

Ikuo Shimizu
Executive Officer,
in charge of System
Development & Quality
Management Innovation SBU,
General Manager, System
Development & Quality
Management Innovation SBU,
TIS Inc.

The gross profit margin on development sales has improved significantly in recent years as a result of the steady implementation of various
measures to eliminate losses, enhance innovation, and promote offshore activities. This improvement in business profitability is reflected not
only in the Company’s results but also in those of the Group as a whole, as our transition into a business holding company structure accelerated
innovation and strengthened systems to promote efficiency at Group companies.
Although the business environment is highly uncertain due to the COVID-19 pandemic, we will continue to rely on our Trinity quality
management system, testing the true value of this monitoring process. Trinity was developed as a quality management system that prioritizes
the realization of customer requirements in a traditional systems integration sense. However, in the service provision business, which our Groupis focusing on, we need to set our own service quality standards as well as respond to market demands and social imperatives. We will continue
to develop Trinity in line with these business parameters.

66

Communication with Employees

Continuous enhancement of value exchanges between employees and the Company

Diversity and Inclusion Policy

We will continue to enhance the exchange of value between employees and the Company through a virtuous cycle of investment, growth,and high added value.

In fiscal 2020, ended March 31, 2020, the TIS INTEC Group introduced its Diversity and Inclusion Policy and Health Management Policy as
initiatives designed to improve the caliber of people and the performance of Group companies, and to solidify a corporate culture based on
OUR PHILOSOPHY.

● Value provision and results as professionals(Creating value commensurate with compensation)

Employees● Growth opportunities (attractiveness of the job)/increase market value● Top-level compensation in the industry

Investing in people

Company● Increase compensation in anticipation of improved added value

Raising compensation levels to those ofindustry majors● Vigorous investment in training● Increase in PH metrics (increase financial

value) by realizing higher added value

Growth of humanresources

PH profit and sales
improvement

Enhancing added
value in businesses
and operations

Health Management Initiatives
To lead an enriching and happy life is important for each and every
employee, and will lead them to work more enthusiastically andproductively. In accordance with the Group’s health management
policy, TIS is promoting activities specifically targeting improvement in
the quality of employees’ lives.

Virtuous cycle of value
exchange between employees
and the Company
Increase added value

The TIS INTEC Group values diverse human resources and encourages staff members to demonstrate theirindividuality by freely expressing their opinions. We will continue to promote diversity and inclusion
through human resource engagement activities, proactive health management and workstyle reform. Our
aim is to motivate the workforce and continue to foster flexible, continuous change and untapped value.

● Shift to high-value-added businesses and operations● Improved employee experience

Mental andphysical health
Improving thequality of life
Increasing earning
power

Boosting motivation■ Improving health literacy

●We continue to provide employees with information and educational opportunities so that they can be more informed about and■Collaborative health ●We encourage open communication to create a cohesive organization, and a comfortable and secure workplace.
●We have collaborated with the Health Insurance Association to raise employee awareness of health issues and implement healthengaged with their health.

initiatives

promotion measures.

Timely utilization of human resources at the front lines■Health management●We provide opportunities for health checkups, comprehensive medical examinations, and stress checks, and achieved a 100% checkup

We are working to strengthen our human resources management in order to increase added value through performance development
initiatives targeted at every employee. We promote management aimed at achieving business goals while at the same time boosting theskills and motivation of employees.

■Support for a healthy ●We established a system to help balance work with childcare as well as other caregiving and medical treatment, with provision of

Pursuit of performance development that promotes employee engagement and self-directed growth,shifting from a corporate culture of micromanagement to one that supports employees’ professional
development.
Performance development – a virtuous cycle

Agile, front-lineoriented responses

Candidate discovery
and recruiting activities

Flexible workstyles●Enhance 1-on-1 interactions (Training anddevelopment)● Entrench peer bonuses● 360-degree feedback (expansion of scope)● Coaching (Boss Style)● Increase flexibility in work schedules and locations● Encourage new workstyles with an eye on the

post-COVID-19 era

Systems and programs
that are responsive tobusiness needs

programs

consultation services and practical support.

●We have stipulated an 11-hour gap between work shifts to prevent burnout as well as to improve concentration and performance.
●We offer welfare services that employees can use to promote their well-being and a long-term disability (LTD) program (incomecompensation insurance).

Advancement of diverse talent
In order for the human resources who will drive structural change to be true to themselves, it is essential to create an organizational culturethat respects and embraces difference, such as in values and living circumstances, as well as age and sexual orientation. For women andsenior citizens in particular, on whom there may be high social demands, we strive to develop systems and environments that make it easierfor them to fulfil their potential. We also foster a culture in which differences are embraced through workshops aimed at developing
people’s abilities and careers.
■ Contributions of the senior generation
■Employment of people with a disability●In addition to the abolition of the retirement age for company posts, we have introduced an optional retirement system for employees

up to age 65. We are also promoting age-specific career education to help employees visualize their future careers.

●In fiscal 2021, ending March 31, 2021, we introduced the “Elder Employee System” which enables the re-employment of retired

employees until the age of 70.

●Through SorunPure, a specially recognized subsidiary, we employ many people with disabilities and createa rewarding work environment for them.

■Women’s empowerment●We are working to create an environment in which women can play an even more active role in the Group through career support aimed● Strengthen the workforce through human●We provide guidance and consultations to prepare women for life events and to promote career development after women return● Introduce a new HR system● Introduce the HR Business Partner system■Support for LGBTI+

resource developmentat promoting female managers and directors, the formation of promotion guidelines, and the establishment of a women’s network.
from maternity leave.

●We have established a system that ensures equality of treatment of employees with nontypical gender identity or sexual orientation,and introduced measures to prevent harassment

We will continue to evolve our system with an easy-to-understand message that isfriendly to our employees.

Kyoko Takayanagi
Executive Officer, Department Manager of
Human Resources Department,
Deputy Division Manager of
Human Resources SBU, TIS Inc.

67

When I was appointed to the Human Resources SBU in April 2019, the TIS workstyle was based on the “Human Resources SBU
Manifesto” and to a certain extent had been set in stone. As a first step, we prioritized the devolution of workstyles to individual workplaces and employees. To assist each employee to understand and put into effect human resource initiatives, we zealously conductedtraining programs for all executives and consulted with junior employees, and have instituted a number of measures aimed at providing
know-how and raising employee awareness of the need for self-realization (for example, employing 1-on-1 and 360-degree feedback). As
a result, I feel that the understanding of employees has steadily improved over the past year. More than anything else, it was a year inwhich I felt the joy as Department Manager of being able to see employees actively utilize our programs and work energetically.
At the start of fiscal 2021, we were forced to focus on working at home due to the COVID-19 situation, and we questioned the results of the measures we had taken so far.
We are confident that the current TIS environment and systems are advanced enough to be as close as possible to the new ways of working that we are aiming for in the
COVID-19 era, and this has given us great confidence. We are now in a position to significantly change employees’ sense of values and further evolve our programs to help each
employee achieve self-realization. At the same time, we will continue to provide easy-to-understand messages tailored to the needs of our employees.

68

Platform that Supports
Value Creation Process

Revitalize communication
Strengthen management
capabilities

Flexible and timely
performance reviews
and job transfers

Flexible workstyles,
coaching and feedback

Key points

work-life balance■Work-interval system■Enhancement of benefit 

rate. Health consultation and counseling services have also been established.

Communication with Clients and Business Partners

Major Group Companies’ Initiatives to Promote Female Employees (Five Major Companies)*Excerpted from action plans for “the promotion of female participation and career advancement” published by each company.
Company namePlan duration

Goals during the plan period• Percentage of female directors: 9.0%
• Percentage of female employees in management
positions: 12.8%• No workers who work an average of 60 hours ormore of overtime per month over a fiscal year,
including those in managerial positions

TIS Inc.

Four years(April 2020 toMarch 2024)

INTEC Inc.

Five years(April 2016 to
March 2021)

AGREX INC.

Three years(April 2019 toMarch 2022)

QUALICA Inc.

AJS Inc.

Five years(April 2016 to
March 2021)

Five years(April 2016 to
March 2021)• Percentage of female employees in management
positions: 7% or higher

Outline of measures
1. Guidelines for the promotion of women will be set in the “pipelinemanagement process” for the development of senior management, andfemale candidates will be targeted for development• Assess candidate status and confirm future development policies• Selection of candidates and formulation of development plan for eachorganization
2. Guidelines will be established for promoting female employees andmeasures will be taken to raise awareness of opportunities among
candidates
3. Ascertain the status of the average overtime hours of workers, including
managers, and provide guidance on corrective measures if necessary• Monthly provision of actual values by department, strengthening ofacquisition of objective records, monitoring by personnel andguidance for improvement• Dissemination of workstyle reform-related program and fostering a
corporate culture (continuation of current measures)
1. Hold exchanges across departments
2. Conduct interviews with employees before and after returning to work
following maternity leave
3. Establishment of medium- and long-term career goals for young female
employees• Create a system to promote more women to
managerial positions, aiming to increase thepercentage of women in managerial positions to atleast 25%

1. We will further promote reform of workstyles in order to create anenvironment in which employees with time restrictions can play anactive role and to change the mindset of both employees and managers
2. Promote measures to support the career development of female
employees• Percentage of female employees among new
graduate hires: 30% or higher• Percentage of female employees: 20% or higher• Percentage of female employees in management
positions: 8.5% (15) or higher

1. In order to increase the number of female applicants, the company will
strengthen information dissemination for female students through its
own website and recruitment websites
2. Support career advancement for female employees and the creation of
networks among female employees
3. Create an environment in which women can work stress-free and play
more active roles in the company, and conduct human resource
management training• Facilitate female employees’ promotion to managerial
positions• 10% increase in the number of candidates for
managerial positions versus fiscal 2016

1. Launch women’s career development project
2. Implement various programs to raise awareness of women’s
participation in the workplace
3. Encourage employees to participate in training on requirements forpromotion

Becoming an Irreplaceable Partner for Our Customers
TIS INTEC Group Business Summit 2019 – Exciting Future
In July 2019, the TIS INTEC Group held the TIS INTEC Group Business Summit 2019 –Exciting Future in Tokyo. A total of 1,238 clients attended the event, where we presented
our Group’s advanced technologies and various initiatives through sessions andexhibitions. (We have decided not to hold the event in fiscal 2021 in light of the COVID-19
situation.)

Implementation of Customer Satisfaction Survey
TIS Inc. conducts an annual Customer Satisfaction Survey for customers withwhom it does business on an ongoing basis to gauge our performance fromthe customer’s perspective. In fiscal 2020 we received high marks for ouractivities aimed at realizing our vision of becoming “A business partner
contributing to our customers’ business expansion.” In the survey, 72.7% ofcustomers answered that we were “An irreplaceable business partner” basedon a score of 4 or higher on a scale of 1 to 5. Yet there is still room for
improvement, as shown responses to the question on “Proactive proposals,
information provision, etc.”, and we are working to improve this aspect of ourservice provision companywide. We will continue to solicit feedback and listen
to our customers to further improve our contribution as a business partner.

Percentage of respondents who answered“An irreplaceable business partner”(based on a score of 4 or higher on a scale of 1 to 5)

72.7%
69.1%

68.2%

Fiscal 2018

Fiscal 2019

61.3%
Fiscal 2017

Fiscal 2020

Strengthening Relationships with a Wide Range of Partners
Convening TIS Business Partner Socials
TIS holds TIS Business Partner Socials in Tokyo, Osaka, and Nagoya every year to thank its business partners for their ongoing patronage.
More than 100 major business partners regularly participate in these events. We also use these events to introduce TIS’s management
policies, share the direction that TIS is heading in, and express our expectations of our business partners in order to strengthen our
relationships with them.
* In 2020, in view of the spread of COVID-19, social gatherings were cancelled and instead letters and commemorative gifts were presented to business partners.

Platform that Supports
Value Creation Process

Programs to achieve flexible workstyles
By increasing employees‘ options regarding working hours and location, we will maximize performance, improve the quality and speedof results, and reduce overheads. At the same time, we will foster opportunities for self-awareness and autonomy by allowing employees
to control the pace of work and coordinate on and off time according to their own needs and initiative.
The various systems of workstyle reform have been rapidly implemented under COVID-19 conditions.
Moving forward, we will continue to provide flexible options that will contribute not only to the realization of work-life balance forindividuals, but also to the growth of each individual and the development of our business.
■ Flextime working system ●In principle, all employees can use flextime without core time. Employees who work for two hours are deemed to have worked for

one day.

■Teleworker system●We encourage telework (in a secure environment) at satellite offices, shared offices, and at home.
 ●Employees can apply to work as a teleworker who does not come to the office.
■Discretionary work program ●We have adopted a system in which employees have the discretion to perform their jobs in a self-directed manner in departments

responsible for research, consulting (strategy and IT), new business creation, etc.

■Work smart allowance■Taking time off●We have introduced a “deemed overtime allowance” to enhance employees’ value-added through the more effective use of time.
●The Group has set targets for the use of annual leave to promote the use of such leave. Refresh leave to encourage the taking of●We have our original programs, such as volunteer leave with pay and backup leave for unexpected needs.

consecutive days off

Base for the Promotion of Open Innovation EstablishedEstablished in September 2016, bit & innovation is a communication space that brings together the resources of startups, operatingcompanies and TIS INTEC Group companies to create new businesses through open innovation. This initiative enables us to facilitate
collaboration across corporate boundaries.
http://bit-innovation.tis.co.jp/
Location: Nishi-Shinjuku, Tokyo
Number of members (as of July 2020): about 300 companies* and 950 individuals*Total of both startup and operating companies
Application● Co-working● Meetings● Program acceleration site
● Holding various events such as pitches and ideathons

Disclosure of sustainable procurement policies
The TIS INTEC Group believes that in order to fulfill its social responsibilities, it is important to collaborate with stakeholders to implement
measures throughout the entire supply chain. Accordingly, the Group discloses its sustainable procurement policies. For more information,
visit the following link: http://www.tis.com/group/csr/report/governance/procurement_policies/.
69

70

Communication with Shareholders and Investors

Communication with Communities and Society

Fast, fair and impartial information disclosure, and dialogue with shareholders

Our Group engages in multifaceted initiatives in cooperation with local communities and society at large under the themes of social
welfare, environmental conservation, sports, arts and culture, contribution to local communities, and fostering the next generation.

We provide performance results and the latest news on our business activities through events, such as information meetings, theproduction of pamphlets, and engage in constructive dialogue with shareholders and investors for the Company's sustainable growth.
IR Events in Fiscal 2020

Frequency

Results briefings for analysts and institutional
investors

4 timesQuarterly briefings

Business briefings for analysts andinstitutional investors

Once

Held a meeting regarding payment business

Small meetings for analysts and institutional
investors

245 times

Contents

Provide IR-oriented information for analysts and institutional investors. Of these meetings, 81 werefor overseas investors. Total coverage: 291 companies (395 people)

Small meetings

Once

President held one meeting with sell-side analysts

Overseas roadshows

3 timesPresident, director responsible for overseas IR and other members of senior management met withshareholders and investors in Europe, United States, and Asia

IR conferences for individual investors

Once

Held a conference in Tokyo (334 participated people)

Production of materials for individual investors

2 timesIssued “Business Report”*Please visit the following page for details of our Group activities.
http://www.tis.com/group/csr/report/social/community/

Major Activities
Smile Kids Camp—Supporting Seriously Ill andDisabled Children and Their Families

Taking Part in Asahi no Mori Forest
Conservation ProjectThis itinerant event for children with serious illnesses or disabilities andtheir families is planned and undertaken by a committee of volunteers.
Employees from TIS INTEC Group companies volunteer their time to staff
the event, providing a valuable opportunity to witness the real difference
made by CSR and volunteer activities.

From 2010, AJS has been supporting the Asahi no Mori forest conservation project in the northern part of Miyazaki Prefecture spearheaded by
Asahi Kasei Corporation. The aims are to prevent global warming, protect
the natural environment and also contribute to the prefecture where thecompany’s office is located.

Performances by Friends of Music Society

Fostering the Next Generation

TIS INTEC Group Gakuyukai (Friends of Music Society) is a registeredensemble mainly comprising employees of the TIS INTEC Group andfamily members. It performs lunchtime concerts in the Tokyo head officebuilding and at local recital halls.

●Internships for college students
We offer internships to help university students with career planning andas an opportunity to gain work experience. To date, the program has
provided opportunities to more than 1,000 students.

Initiatives to revitalize General Meetings of Shareholders and facilitate the exercise of voting rights
Contents
Early dispatch of notice of General Meetings ofShareholders

Based on our policy of sending the notice at least three weeks before the General Meeting of Shareholders, we sent thenotice of convocation for the 12th Annual General Meeting of Shareholders scheduled for June 24, 2020, on June 2, 2020.

Setting dates for the General Meeting of Shareholders that avoid clashes with other suchmeetings

The date has been set so as to make it easier for more shareholders to attend the General Meeting of Shareholders.
The latest General Meeting of Shareholders was held on June 24, 2020.

Voting by electronic means

We have adopted an electronic voting system that allows voting rights to be exercised via the Internet and othermeans (PC, smartphone or cell phone).

Participation in electronic voting platforms andother initiatives to improve the environment for
institutional investors to exercise voting rights

We participate in the voting platform for institutional investors operated by Investor Communications Japan (ICJ, Inc.).

Provision of Notice of Convocation (summary) in
EnglishA Notice of Convocation of the General Meeting of Shareholders (in Japanese and English) is posted on the corporatewebsite.

Other

The Notice of Convocation is disclosed prior to distribution on the corporate website. Based on our policy of disclosing
the convocation notice about one month prior to the date of the General Meeting of Shareholders, we disclosed theconvocation notice of the latest General Meeting of Shareholders on May 20, 2020.

IR Policy
Purpose of IR Activities

As part of its pursuit of fair and transparent management, the Company
engages in investor relations activities in order to fulfill its accountability
obligations to not only the shareholders who entrust management to it, butalso to investors, securities analysts, and capital market participants ingeneral. By engaging in proper disclosure and constructive dialogue throughits investor relations activities, the Company also aims to promote
understanding of the Group, develop long-term trusting relationships, andearn fair valuations of its corporate value.

Basic Policy on IR Activities

Recognizing that investor relations activities are an important element of its
management activities, the Company is committed to fulfilling its accountability obligations to shareholders, investors, securities analysts, and othercapital market participants and to building trusting relationships based on
full communication achieved through ongoing conscientious and positive
engagement in investor relations activities.
To promote understanding of the Group, the Company will endeavor todisclose and explain its management policies, details of its business
operations, business strategies, earnings performance, finances, and othercorporate information in a timely, fair, accurate, and clear manner byparticipating in interviews and responding to inquiries pertaining to investor
relations, holding earnings briefings and small meetings, and engaging inother such activities. Opinions and other feedback on the Group obtained
through constructive dialogue will be shared within the Company throughreports to the Board of Directors and similar channels, and will be used for
purposes such as reviewing the Company's management strategies.
71

Basic Policy on Disclosure

1. Disclosure Standards
To ensure transparency by promoting information disclosure, the Company
discloses material information that could influence investment decisions,
including information disclosed in conformance with the Securities Listing
Regulations of the Tokyo Stock Exchange and the Financial Instruments andExchange Act (meaning information on decisions made by the Company,
occurrences of material facts, and business results and similar information;
the same applies hereinafter). In addition to the above, the Company also
discloses, to the maximum extent possible, information judged useful forfurthering understanding of the Company and the Group.
2. Information Disclosure System
The Company has developed a communications structure linking divisions
and member companies of the Group, and it has established a structure fordisclosing material information that could influence investment decisions,
including information disclosed in conformance with the securities listing
regulations of the Tokyo Stock Exchange and the Financial Instruments andExchange Law, in a fair and timely manner. The Company is committed torigorous information management and preventing insider trading.
* Please see the Company’s web site regarding “3. Methods of Disclosure”,“4. Spokespersons for Investor Relations Activities”, “5. Yet-to-Be-Released
Material Information”, “6. Quiet Period”, “7. Response to Rumors, etc.”,“8. Earnings Forecasts, etc. by Third Parties”, “9. Framework for Disclosing
Information on Company Website” of Basic Policy on Disclosure.
http://www.tis.com/ir/other/policy/●Linkages with Universities (Student Development)
At Keio University, we fund an endowed course entitled “Overview ofEntrepreneurship” in which case studies of entrepreneurs and companies, lectures on laws related to the creation of new business, andsimulated business creation experiences are provided to nurture
entrepreneurial talent. We also offer courses to support students’ careerdevelopment at Ritsumeikan University, Aichi Prefectural University andDoshisha University, among others.

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

72

Platform that Supports
Value Creation Process●Corporate training for teachers
This is a program where teachers receive training at private companies
during their summer vacation. TIS has participated in a program run by
Keizai Koho Center, an organization affiliated with the Japan Business
Federation (Keidanren), and has welcomed more than 70 teachers since
2010.

Contributing to Global Environmental Protection*Please refer to the link below for more information on our environmental initiatives.
http://www.tis.com/group/csr/report/environment/#e00

Initiatives to Reduce Environmental Impact
Our Group recognizes that environmental issues have become important for all humankind and is actively involved in environmental
protection through its business activities. Against a backdrop of growing international concern for the environment in recent years, in fiscal
2020 we formulated an environmental vision and policy and established an environmental promotion system.

The TIS INTEC Group is taking an environment-conscious approach at offices and data centers, which form the bedrock of corporate
activities, by introducing measures to save energy and cut greenhouse gas emissions.
Examples of Environment-Friendly Activities at Data Centers● Outdoor air for cooling

Creating a Vibrant, Environmentally Conscious Society

Tsuneyoshi Ito
Executive Officer,
Division Manager ofCorporate Management SBU,
TIS Inc.

Our vision for a bright future cannot be realized without enriching the global environment in which we live. Yet the current global environmental issues are now so complex and serious that they require a global approach. The TIS INTEC Group has been adopting business practices thatare appropriate for this new era, taking into consideration initiatives such as the UN’s Sustainable Development Goals (SDGs), the Task Force on
Climate-Related Financial Disclosures, the Carbon Disclosure Project, Science-Based Targets, and RE100 (a global corporate renewable energy
initiative bringing together hundreds of large businesses committed to 100% renewable electricity). In 2019, we completely overhauled our
promotion structure. We have also launched initiatives to integrate environmental measures with business activities in recognition that mediumto long-term perspectives and strategic activities are essential to solving global environmental issues. During the next medium-term management plan, we will prioritize businesses that use our Group’s digital technologies to help improve the energy efficiency of society as a whole,and make stringent efforts to reduce greenhouse gas emissions in our Group‘s business activities. We will continue to advance our Group‘sinitiatives by disclosing information on our progress as compared with global standards.

Environmental
VisionThrough our corporate activities and the provision of new services, we aim to be a company
that infuses the global environment of the future with vibrant colors.

Environmental
Declaration

We recognize that addressing global environmental issues is one of our most importantpriorities as a responsible member of society. In order to realize the mission of OUR
PHILOSOPHY, we formulated our Environmental Vision to reflect our long-term environmental goals. To achieve this vision, we established a set of Environmental Action
Guidelines. Through our various corporate activities, all of our executives and employees
will strive to reduce their environmental impact and foster protection of the global
environment.

Environmental
ActionGuidelines● LED lighting● Use of geothermal energy● Optimized lighting with motion sensors and ambient light sensors● Use of rainwater● Highly efficient equipment● Use of well water● Rooftop greenery● Lighting equipment run on solar power● Landscaping● Green power procurement● External appearance harmonizing with the local surroundings● Natural lighting● Noise-damping, heat-insulating sashes

Natural light (solar tracking equipment)

Solar power generation monitor

Rooftop greenery

Examples of Environmentally Conscious Activities at Offices● Employing more environmentally friendly air conditioner settings● Going paperless (monitors set up in meeting rooms)● Stopping running air barrier fans

● Recycling PCs● Switching power off on machines, such as copiers and shredders, during periods of non-use● Confidential documents being solution-treated by a provider● Turning off heating in washrooms, and disabling hot water setting● Garbage being sorted for appropriate and in disposal● Banning vehicle idling● Participating in eco-cap movements● Ensuring water taps are closed● Partnering in Table for Two program● Encouraging use of stairs instead of elevators● Turning off lights in work areas during lunch hour and● Ending superfluous wrapping

unused and absence areas● Reducing use of lighting● Encouraging employees to use personal thermos bottles and reusable shopping bags
● Encouraging employees to take vacation during summer

Platform that Supports
Value Creation Process

1. Contribute to environmental conservation through business activities
2. Reduce environmental impact through the value chain
3. Comply with environmental laws and regulations and management initiatives
4. Pursue initiatives aimed at sustained improvement
5. Promote awareness and full participation
6. Disclose information to engender trust from society● Cool Biz

Case study: Start of joint proof-of-concept experiments at stores for distributed energy resource
Based on these Action Guidelines, we have acquired ISO 14001 certification, an international standard for environmental management, at
our offices and data centers. We are promoting continuous improvements based on ISO 14001 standards and are working to establish anenvironmental management structure for the entire Group.

Energy conservation initiatives
At our data centers and offices, which account for the bulk of ourcorporate activities, we are promoting initiatives that take theglobal environment into consideration, such as measures toconserve energy and reduce greenhouse gases. We are integrating
and concentrating our data centers into high-spec, environmentallyfriendly data centers with high energy efficiency, employing
measures such as outdoor air for cooling and rainwater utilization
as well as use of renewable energy (geothermal power utilization,
solar power etc.).

Changes in electricity consumption

167,907150,000

25,273

157,623
25,171

149,523
25,734

143,383
24,119100,000
142,634

132,452

50,000

0

73

(Mwh)

200,000

123,789

119,264

Fiscal 2019

Fiscal 2020

generation

Since February 2020, in cooperation with Kansai Electric Power Co., Inc., TIS has been conducting
a series of proof-of-concept experiments at stores to employ distributed energy resources (DER)– small-scale electricity generation and use at source. These
Overview of proof of concept experiments
facilities will use solar panels to harness a renewable energy
for distributed energy resource control
source and batteries for energy storage. Solar power generation
doesn’t emit CO2, but the amount of power generated by solar
Distributed energy resource
panels depends on the weather. By installing storage batteries
control system
together with solar panels, excess power can be stored when
Performance report
Control orders
there is a large amount of power generation and used asneeded. This project aims to demonstrate the value ofReal store
distributed energy resources and maximize the efficiencyof energy management, in the process contributing directly
to a low-carbon society as well as to business continuity
planning (BCP).
Solar panels

Fiscal 2017

Fiscal 2018

Data centers

Offices

Storage battery*Please visit the following page for details (Japanese only).
https://www.tis.co.jp/news/2019/tis_news/20200219_1.html

74

Consolidated Financial Summary
TIS Inc., and consolidated subsidiaries
Years ended March 31(Millions of yen)

Fiscal 2010

Fiscal 2011

Fiscal 2012

Fiscal 2013

Fiscal 2014

Fiscal 2015

Fiscal 2016

Fiscal 2017

Fiscal 2018

Fiscal 2019

Fiscal 2020

Net sales

313,856

323,173

327,417337,834

346,647

361,025

382,689

393,398

405,648

420,769

443,717

Cost of sales

254,827

261,145

266,159

276,935

283,881294,927

312,153

317,440

321,286

325,985

337,820Gross profit

59,02962,027

61,25860,89962,766

66,09770,53575,95884,362

94,784

105,896

Gross profit ratio (%)

18.8%

19.2%

18.7%

18.0%

18.1%

18.3%

18.4%

19.3%

20.8%

22.5%

23.9%

Selling, general and administrative expenses

43,032

49,20945,63642,72743,25544,97646,09948,93851,61856,74061,057

Selling, general and administrative expenses ratio (%)

13.7%

15.2%

13.9%

12.6%

12.5%

12.5%

12.0%

12.4%

12.7%

13.5%

13.8%

Operating income

15,996

12,81815,621

18,171

19,51021,121

24,43627,01932,74338,043

44,839Operating margin (%)

5.1%

4.0%

4.8%

5.4%

5.6%

5.9%

6.4%

6.9%

8.1%

9.0%

10.1%

Recurring profit

15,71912,625

15,393

17,44018,971

21,251

24,521

27,092

32,79538,60346,070Recurring profit ratio (%)

5.0%

3.9%

4.7%

5.2%

5.5%

5.9%

6.4%

6.9%

8.1%

9.2%

10.4%

Net income attributable to owners of the parent company

7,659

5,985

2,135

5,868

7,913

10,275

12,67816,306

20,62026,034

29,411

Net income ratio (%)

2.4%

1.9%

0.7%

1.7%

2.3%

2.8%

3.3%

4.1%

5.1%

6.2%

6.6%

Current assets

141,967

128,455

142,442

138,219

143,519

140,450

166,666

152,162

162,064

176,231

181,543

Fixed assets

171,109

172,620

167,560

164,083

170,091

205,401

169,828

185,459

204,889

194,426

201,356

Software assets

10,578

11,337

12,197

11,76912,92813,252

15,42816,056

16,866

19,17722,887

Total assets

313,077

301,076

310,003302,302313,610

345,851

336,495

337,622366,954

370,657

382,899

Current liabilities

86,25573,09083,06591,06372,79077,666

91,50878,67681,31091,12688,479Non-current liabilities

71,74676,87575,97253,07976,316

79,39564,44759,74359,344

45,121

46,462

Total liabilities

158,001

149,965

159,038

144,143

149,107

157,062

155,955

138,420

140,655

136,248

134,942

Net assets

155,075

151,110

150,965

158,159

164,502

188,789

180,539

199,202226,298

234,408

247,957

Total liabilities and net assets

313,077

301,076

310,003302,302313,610

345,851

336,495

337,622366,954

370,657

382,899

Total interest-bearing debt

91,64677,45476,51560,55058,86952,114

46,15835,14432,876

26,89322,294

Interest-bearing debt ratio (%)

29.3%

25.7%

24.7%

20.0%

18.8%

15.1%

13.7%

10.4%

9.0%

7.3%

5.8%

Cash flow from operating activities

31,40027,23623,65821,51525,77022,93825,496

18,95236,38637,55838,569Cash flow from investing activities(25,726)(18,957)(15,158)(14,391)(5,334)(17,744)

8,688(23,488)(14,202)(1,213)(26,437)

Cash flow from financing activities

6,139(18,755)(4,230)(19,883)(5,872)(19,067)(14,979)(18,327)(10,543)(16,773)(14,544)

Cash and cash equivalents at the end of the term

46,98736,492

41,11928,43343,142

29,48548,65125,73037,54557,08354,684

Free cash flow

5,674

8,279

8,500

7,124

20,436

5,194

34,184(4,536)22,18436,345

12,132

Capital expenditures

15,67618,325

14,096

12,287

12,544

16,873

14,21015,15916,907

13,334

16,702

Depreciation

11,97812,30812,745

12,92012,454

12,80911,952

11,801

12,572

12,783

12,020

912

1,062

962

1,002

853

1,097

1,086

1,178

996

1,003

1,702

Amortization of goodwill

1,389

1,901

1,882

1,741

1,166

1,052

339

326

289

289

171

Goodwill balance at the end of the term

6,863

5,551

3,672

1,914

830

2,021

1,393

1,332

1,118

503

355

Number of employees at the end of the term

Research and development expenses

20,476

20,831

20,347

19,55319,081

19,09019,393

19,843

19,877

19,483

19,744

Number of new-graduate recruits

974

928

649

356

455

620

688

674

712

892

810

Number of regular recruits

512

370

450

379

549

499

687

575

840

661

731

Orders received during the term

146,621

162,287

174,680

179,352

172,721

199,842

207,345

208,307219,225

238,298

246,330

Order backlog at year-end

49,56947,967

57,77862,05558,86971,09569,96164,751

67,71675,54979,277

Order Status (Software development)

Corporate 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.

75

76

Fiscal 2010

Fiscal 2011

Fiscal 2012

Fiscal 2013

Fiscal 2014

Fiscal 2015

Fiscal 2016

Fiscal 2017

Fiscal 2018

Fiscal 2019

Fiscal 2020

Equity ratio (%)

44.2%

47.7%

46.3%

49.8%

49.9%

53.3%

52.5%

57.8%

60.4%

62.0%

63.3%

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

5.7%

4.2%

1.5%

3.9%

5.1%

6.0%

7.0%

8.8%

9.9%

11.5%

12.5%

Total asset turnover ratio

1.03

1.05

1.07

1.10

1.13

1.09

1.12

1.17

1.15

1.14

1.16

Financial leverage

2.26

2.18

2.13

2.08

2.01

1.93

1.89

1.81

1.69

1.63

1.58

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

5.2%

4.1%

5.0%

5.7%

6.2%

6.4%

7.2%

8.0%

9.3%

10.5%

12.2%

Net income per share—basic (yen)

89.25

68.19

24.33

66.86

90.16

117.40145.22189.02241.44307.83350.35

—

—

24.33

66.83

90.12

—

—

—

—

—

—

Annual dividends per share (yen)

32.00

32.00

18.00

21.00

25.00

30.00

33.00

36.00

40.00

70.00

90.00

Payout ratio (%)

35.9%

46.9%

74.0%

31.4%

27.7%

25.6%

22.7%

19.0%

16.6%

22.8%

25.7%

Total return ratio (%)

35.9%

46.9%

74.0%

31.4%

27.7%

30.4%

35.3%

31.9%

30.5%

39.0%

39.8%

1,602.77

1,636.56

1,636.72

1,714.88

1,782.23

2,108.19

2,031.07

2,265.76

2,602.07

2,719.79

2,890.27

Net income per share—diluted (yen)Net assets per share (yen)Stock price at fiscal year-end (yen)

1,138

870

968

1,243

1,694

2,193

2,664

2,832

4,210

5,240

5,361

Highest stock price during the term

1,995

1,377

978

1,328

1,854

2,257

3,085

2,959

4,410

6,040

7,320

Lowest stock price during the term

952

655

654

798

1,020

1,524

2,156

2,180

2,742

4,060

4,045

Price earning ratio (PER) (times)

12.8

12.8

39.8

18.6

18.8

18.7

18.3

15.0

17.4

17.0

15.3

0.71

0.53

0.59

0.72

0.95

1.04

1.31

1.25

1.62

1.93

1.85

Aggregate market value (millions of yen)

98,29376,376

84,979109,121

148,714

192,521233,870

248,618

369,592

460,014

470,637

Number of outstanding shares at fiscal year-end (thousands)

86,37387,78987,78987,78987,78987,78987,78987,78987,78987,78987,789Number of treasury stock at fiscal year-end (thousands)

22

15

16

19

4

320

864

1,701

2,613

3,358

3,952

Average number of shares during the term (thousands)

85,82187,77287,77387,77187,77487,52287,30586,26885,406

84,574

83,948313,856

323,173

327,417337,834

346,647

361,025

382,689

393,398

405,648

420,769

443,717

Credit card

57,151

52,61445,084

48,84649,40253,74359,27465,00673,31473,64875,118Banking

23,48025,81926,702

26,23029,04925,444

27,86728,23327,452

26,58330,100Insurance

21,08823,44822,931

23,83625,26924,972

26,33925,356

26,262

27,27929,274

Price book-value ratio (PBR) (times)

Sales by Client Sector
Net sales(Millions of yen)

Other finance

19,062

19,17823,416

21,33723,481

23,312

20,406

20,857

22,127

19,502

24,289Assembly-based manufacturing

40,19646,32340,36338,82440,90445,78549,45542,723

43,77746,02845,739Processing-based manufacturing

29,63026,13531,074

38,46833,84334,96035,061

36,95338,36638,081

38,998Distribution

24,98322,87026,26727,39830,00931,77532,702

31,77328,87232,90833,976

Services

61,87470,01771,01273,42572,666

77,53579,60189,607

93,258103,531

112,722

Public institutions

28,21728,01530,10728,22530,39329,89136,60337,00235,92334,86336,286

Others

8,175

8,754

10,456

11,241

11,626

13,604

15,376

15,882

16,292

18,343

4,044

Corporate Data

77

78

Non-Financial Summary
TIS Inc., and consolidated subsidiaries
Compilation period: April 1 to March 31 of each year or the base date

Scope of datacollection

Relatedmateriality

Fiscal 2017

Fiscal 2018

Fiscal 2019

Employee-related data (Note 1)

Relatedmateriality

Scope 1 emissions (metric tons)

E

2-f

976

958

885

745

Scope 2 emissions (metric tons)

B

2-f

83,76978,12571,09664,488Energy consumption (Electricity Mwh)

B

2-f

167,907

157,623

149,523

143,383

Fiscal 2017

Fiscal 2018

Fiscal 2019

Fiscal 2020

Environmental data

*Averages are calculated as simple combined averages orweighted averages.

15,357

15,63815,948

16,1091-a

11,306

11,435

11,52911,560

C

1-a

4,051

4,203

4,419

4,549

C

1-a

26.38%

26.88%

27.71%

28.24%

Energy consumption (Heavy oil kL)

E

2-f

26

28

32

25

E

2-f

11

11

10

0

E

2-f

389

379

343

302

Number of employees

C

Number of male employees

C

Number of female employees
Percentage of female employees
Number of non-Japanese employees

C

1-a

141

156

155

155

Energy consumption (Light oil kL)

Average age

C

1-a

38.35

38.73

39.07

39.29

Energy consumption (City gas, km3)

Average age of male employees

C

1-a

39.49

39.87

40.24

40.31

Average age of female employees

C

1-a

35.22

35.63

36.09

36.23

Average length of service (years)

C

1-a

13.61

14.40

12.88

12.84

Social contribution expenses (millions of yen)

F

2-e

20

115

143

99

Average length of service of male employees (years)

C

1-a

14.21

15.49

13.69

13.95

Political contributions (millions of yen)

F

2-e

—

—

—

—

Average length of service of female employees(years)

C

1-a

11.03

11.47

10.78

11.04

Development loss rate (See P.66)

A

3-g

2.1%

0.9%

0.9%

0.6%

Percentage of employees aged 60 and over (Note 2)

C

1-a

1.69%

1.97%

2.17%

1.71%

Results of customer satisfaction surveys (See P.70)

F

3-g

61.3%

69.1%

68.2%

72.7%

Number of employees with a disability (Note 2)

D

1-a

390.5

186.0

199.5

212.0

Number of directors (Note 3)

F

4-j

10

10

9

9

Percentage of employees with a disability (Note 2)

D

1-a

1.97%

2.18%

2.23%

2.23%

Number of female directors (Note 3)

F

4-j

0

0

1

1

Number of employees in management positions

C

1-a

3,238

3,328

3,443

3,609

Percentage of employees in management positionsC

1-a

21.08%

21.28%

21.59%

22.40%

Percentage of female directors (Note 3)

F

4-j

0.0%

0.0%

11.1%

11.1%

Number of male employees in management
positions

Number of external directors (Note 3)

F

4-j

3

3

3

3

C

1-a

2,999

3,056

3,147

3,278

Percentage of external directors (Note 3)

F

4-j

30.0%

30.0%

33.3%

33.3%

Percentage of male employees in management
positionsC

1-a

26.53%

26.72%

27.30%

28.36%

Number of female employees in management
positions

C

1-a

239

272

296

331

Percentage of female employees in management
positions

C

1-a

5.90%

6.47%

6.70%

7.28%

Average total working hours per monthC

1-b

171.98168.37166.36

162.64

Average non-scheduled hours worked per month

C

1-b

22.64

20.63

19.87

18.28

Percentage of annual paid leave takenC

1-b

56.74%

67.63%

72.99%

75.69%

Number of employees on childcare leave

C

1-b

445

463

447

467

Number of male employees on childcare leave

C

1-b

29

27

38

53

Number of employees working shorter hours tocare for young children

C

1-b

549

670

681

679

Number of male employees working shorter hours
to care for young children

C

1-b

9

12

9

10

Number of employees on nursing care leave

C

1-b

8

13

13

19

Number of employees working shorter hours tocare for elderly family

C

1-b

2

3

3

6

Turnover rate

C

1-b

4.17%

4.63%

4.82%

5.03%

Spending on learning and research (millions of yen)

C

1-c

1,702

1,805

1,915

Number of days spent on learning and research
per person

F

1-c

7.03

12.54

14.39

14.20

Average annual income (10,000 yen)

F

1-c

653.3

668.8

681.3

701.9

Results of employee awareness surveys (See P.36)

F

1-c

34%

38%

45%

48%

Other non-financial data

Related materiality
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
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
3. Create a safe society through high-quality services
g. Continuous quality improvement
h. Information security
i. Safeguard personal information
4. Enhance corporate governance and earn the trust of society
j. Corporate governancek. Compliancel. Risk management
Scope of data collection
A. TIS INTEC Group consolidated
B.	TIS, INTEC, AGREX, QUALICA, AJS, SorunPure, Chuo System, TIS System Service, TIS Solution Link, TIS Tohoku, TIS Total Service, TIS Nagano, TIS West Japan, TIS
Hokkaido, and NEOAXISC. TIS, INTEC, AGREX, QUALICA, AJS, TIS System Service, and TIS Solution Link
D. TIS, SorunPure, and affiliated specially recognized companies under the Group umbrella (11 companies in fiscal 2017 and five companies since fiscal 2018)
E. TIS and INTEC
F. TIS parent
Notes: 1. Figures for fiscal 2017, fiscal 2018, fiscal 2019, and fiscal 2020 are based respectively on April 1, 2017; April 1, 2018; April 1, 2019; and April 1, 2020.
2. Figures for fiscal 2017, fiscal 2018, fiscal 2019, and fiscal 2020 are based respectively on June 1, 2017; June 1, 2018; June 1, 2019; and June 1, 2020.
3.	Figures for fiscal 2017, fiscal 2018, and fiscal 2019, and fiscal 2020 are based respectively on June 30, 2016; June 30, 2017; June 30, 2018; and June 30,
2019.

Corporate Data

79

Scope of datacollection

Fiscal 202080

Corporate Data

TIS INTEC Group

Group Formation(As of March 31, 2020)

As of March 31, 2020, the TIS INTEC Group consists of 123 companies, including the parent company, 40 consolidated subsidiaries, and 82
equity method affiliates.

■TIS Inc., and 40 consolidated subsidiaries (As of March 31, 2020)

Domestic

Domestic subsidiaries
TIS and maingroup
companies

Shareholding
ratio

INTEC Inc.

AGREX INC.

Description of Business

196,661

TIS

Focuses on megabanks and life insurers, and assists with CRM for regional
100% banks and offers a wide selection of services to regional public corporations,particularly in the Hokuriku region.
(Established January 1964)

116,360

10,055(8.6%)

TIS

Leading company in mainstay BPO field. Began global BPO services in
October 2013. Became wholly owned subsidiary in March 2015, and100%
centralized Group’s BPO operations at AGREX.
(Established September 1965)

33,7292,149(6.4%)—

16,865

Overseas Subsidiaries● ChinaQUALICA (SHANGHAI) Inc.
TISI (Shanghai) Co., Ltd.
● Singapore

QUALICA Asia Pacific Pte. Ltd.
● Thailand● Vietnam

AGREX DNP Vietnam Co., Ltd.
(Changed company name in June 2020)● United States

Sequent Software Inc.
TIS Ventures, Inc.
81

●AGREX Inc.

●SorunPure

Corporation●QUALICA Inc.

19,597(10.0%)●AJS Inc.

Other group companies●Consolidated
subsidiaries: 3●TIS System Service Inc.

2,195
(10.4%)■82 Equity Method Affiliates(As of March 31, 2020)
Main equity method affiliates● ChinaShanghai CardInfoLink Data Service
Co., Ltd. (CardInfoLink)(Voting rights ownership ratio 18.2%,
11 subsidiaries under the company)●Consolidated■Equity method

subsidiaries: 11

subsidiaries: 3

affiliates: 4

Overseas●Sequent

Software Inc.
●Consolidated subsidiary: 1

1,892(11.2%)●Consolidated

affiliate: 1

S ingapore
Thailand
Vietnam

ASEAN and others●Consolidated subsidiary: 1■Equity method affiliate: 1 Malaysia●Consolidated subsidiaries: 10 ■Equity method affiliates: 11 Philippines●Consolidated subsidiary: 1
Indonesia

India

Domestic Business Hubs
TIS INTEC Group has anextensive business presence,
particularly in Tokyo, Nagoya,
Osaka and Toyama. It has 14
data centers in Japan, withlocations in major urban
centers.

Toyama Data Center

Kansai Area
Osaka No. 1 Data Center
Osaka No. 2 Data Center
Osaka No. 3 Data Center
Osaka No. 4 Data Center

Chubu Area
Nagoya Center
Shikatsu CenterWe are pursuing development
mainly in the ASEAN region, shifting
our focus from creation of offshoredevelopment hubs to setting up
business hubs.
We have established an officein Silicon Valley, United States, toconduct state-of-the-art researchand create new business.

Kanto Area

Hokuriku

KansaiInternational Business Hubs

●Consolidated subsidiaries: 2■Equity method affiliates: 12

Manyo Data Center

MFEC Public Company Limited(Voting rights ownership ratio 24.9%,
10 subsidiaries under the company)

PT Anabatic Technologies Tbk(Voting rights ownership ratio 37.3%,
acquired convertible bonds with stockacquisition rights,
53 subsidiaries under the company)

China

Hokuriku Area

● Thailand● Indonesia■Equity method affiliates: 2■Equity method affiliates: 3■Equity method affiliates: 47■Equity method affiliate: 1

China, ASEAN region

Chubu

Kanto

TIS Tokyo head office
Tokyo No. 1 Data CenterTokyo No. 2 Data CenterTokyo No. 4 Data Center
TIS Tokyo No. 1 Center
TIS Tokyo No. 3 Center
Yokohama Data Center

United States

BeijingWuhan
YangonBangkok

Shanghai

Silicon Valley

Hanoi
Ho Chi Minh

Singapore
Jakarta82

Corporate Data

Baseline Technology Consultants Co., Ltd.
CODE IT Consulting Co., Ltd.
ECM Consulting Co., Ltd.
I AM Consulting Co., Ltd.
i Coach Co., Ltd.
iHR Consulting Co., Ltd.
iTS–Tradeship Co., Ltd.
PromptNow Co., Ltd.
TISI (Thailand) Co., Ltd.
QUALICA (Thailand) Co., Ltd.

●INTEC Inc.

North America

51% Formerly, information systems subsidiary of Asahi Kasei. Focuses oncompanies under the Asahi Kasei Group umbrella.
Asahi Kasei 49%(Established March 1987)

IUK Inc.
INTEC Solution Power Inc.
KOUSHI INTEC Inc.
SKY INTEC INC.
SorunPure Inc.
Chuo System Corporation
TIS System Service Inc.
TIS Solution Link Inc.
TIS Tohoku Inc.
TIS Total Service Inc.
TIS Nagano Inc.
TIS West Japan Inc.
TIS Business Consultants Inc.
TIS Beijing Inc.
TIS Hokkaido Inc.
Registration Network, Ltd.
NEOAXIS Co., Ltd.
Nexway Co., Ltd.
HOKKOKU INTEC SERVICE Inc.
MicroMates Corp.

OthersBPO

TIS Inc.

■Equity method

21,176TIS

Service IT Business●TIS Solution Link Inc.

Formerly, information systems subsidiary of Komatsu. Focuses on assembly80% based manufacturers, mainly those under the Komatsu Group umbrella,
20% while expanding business with companies in the distribution and restaurant
sectors.
(Established November 1982)TIS
QUALICA Inc.
KomatsuAJS Inc.

Fiscal 2020, ended March 31, 2020
(Millions of yen,non-consolidated basis)
Operating income(Operating income to
Net sales
net sales ratio)

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)

TIS Inc.
(operatingholdingcompany)

Industrial IT Business

Financial IT BusinessCorporate Profile(As of July 1, 2020)

Company name
FoundedEstablished
Main business

Head officePaid-in capital
Number of shares authorized
Number of shares issued
Number of shareholders
Stock listing
Number of employees(consolidated)

TIS Inc.
April 28, 1971
April 1, 2008
Outsourcing services, software development, and solution services
regarding investments in information technology. Management andbusiness execution of group companies that carry on information andcommunication 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
263,367,294 shares
11,753 (As of March 31, 2020)
Tokyo Stock Exchange, First Section (Securities code: 3626)

Share Composition by
Shareholder(As of March 31, 2020;
Thousands of Shares)

Individuals andOthers13,298(15.1%)

Financial
Institutions
26,950(30.7%)

Overseas
Institutions
36,975(42.1%)
Other Domestic
Institutions
9,706(11.1%)

19,744 (full-time employees, as of March 31, 2020)
Number of shares(Thousands)

Shareholding ratio（%）

ICHIGO TRUST PTE. LTD.

7,155

8.51

Major Shareholders
Board of Directors,
Audit &
Supervisory
Board Members(As of July 1, 2020)

Chairman and President
Representative Director,
Executive Vice President
Director, Executive Vice President
Director, Executive Vice President
Director
Director
External Director
External Director
External Director
Standing Audit &Supervisory Board Member
Standing Audit &Supervisory Board Member
External Audit &Supervisory Board Member
External Audit &Supervisory Board Member
External Audit &Supervisory Board Member(As of March 31, 2020)

Toru Kuwano

The Master Trust Bank of Japan, Ltd. (Trust Account)

5,371

6.38

Japan Trustee Services Bank, Ltd. (Trust Account)

3,990

4.74

Yasushi Okamoto
Josaku Yanai
Takayuki Kitaoka
Akira Shinkai
Koichi Sano*
Fumio Tsuchiya*
Naoko Mizukoshi*

Employees’ Shareholding Association of TIS INTEC Group

2,197

2.61

Nippon Life Insurance Company

2,073

2.46

(President and Representative Director of INTEC Inc.)

MACQUARIE BANK LIMITED DBU AC

2,000

2.38

(Director, Executive Vice President of INTEC Inc.)MUFG Bank, Ltd.

1,654

1.97

The Master Trust Bank of Japan, Ltd. (Retirement Benefit Trust
Account, Mitsubishi Electric Corporation Account)

1,598

1.90

BNYMSANV RE GCLB RE JP RD LMGC

1,415

1.68

JP MORGAN CHASE BANK 385151

1,396

1.66

(Partner of Leftright Law & IP)

Tetsuya Asano

Notes: 1.	The Company holds 3,660 thousand shares of treasury stock. These are excluded from the table of major
shareholders above. The 3,660 thousand shares of treasury stock do not include 212 thousand shares ofCompany stock held by TIS INTEC Group Employees’ Shareholding Association Exclusive Trust, and 79
thousand shares of Company stock held by Board Incentive Plan (BIP) Trust.
2. Percentage shareholdings are calculated after deducting treasury stock.
3.	Regarding 1,598 thousand shares held by The Master Trust Bank of Japan, Ltd. (Retirement Benefit Trust
Account, Mitsubishi Electric Corporation Account), Mitsubishi Electric Corporation reserves exercise of
voting rights by Instruction.

Tatsufumi Matsuoka
Sadahei Funakoshi*
Yukio Ono*

(President of Accounting Offices of Yukio Ono)

Akiko Yamakawa*(Partner of Vanguard Lawyers Tokyo)

Senior Managing Executive
Officers

Jun Ikimune

Managing Executive Officers

Masahiro Ueda
Kiyotaka Nakamura
Tsuyoshi Fukuda
Kei Ando
Hirofumi Akashi
Fumiyasu Mase
Akira Ogane
Satoru Tayasu
Thanawat Lertwattanarak
Hiroto Ito
Manabu Yano
Hidehiko Shimoyama

Stock Price Range

TIS

Shinichi Horiguchi

Masahiro Hosokawa
Naoto Kita
Hisashi Shimizu
Teruaki Akutsu
Kyoko Takayanagi
Tsuneyoshi Ito
Yasushi Tajima
Ikuo Shimizu
Isao Otokita
Yoshiyuki Hayashi
Masakazu Kawamura

TOPIX

Trading volume (thousand shares)

700

35,000600

30,000500

25,000400

20,000300

15,000200

10,000

100

5,000

0
(Yen)
High
Low
Stock priceat term-end

Mar.
2010
1,995

Mar.
2011
1,377

Mar.
2012
978

Mar.
2013
1,328

Mar.
2014
1,854

Mar.
2015
2,257

Mar.
2016
3,085

Mar.
2017
2,959

Mar.
2018
4,410

Mar.
2019
6,040

Mar.
2020
7,320

952

655

1,138

870

654

798

1,020

1,524

2,156

2,180

2,742

4,060

4,045

968

1,243

1,694

2,193

2,664

2,832

4,210

5,240

5,361

0

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, 2009.
2.	The Company executed a stock split, with each share of common stock split into three shares, effective
April 1, 2020. The above figures are presented using the number of shares before the stock split.

84

Corporate Data

83

Name

Masahiko Adachi* Designated as an Independent Director/Auditor as specified by the Tokyo Stock Exchange in Japan.

Executive Officers

Financial Instruments
Business Operator
858(1.0%)

Total 87,789(100%)

Evaluations from External Parties

Introduction to Our Website

Inclusion in SRI indexes

In addition to the latest annual IR schedule, the latest corporate and financial information is published on our Company website andupdated as needed.

We have received high marks from various ESG (Environment, Social and Governance) rating agencies in Japan and overseas for our inclusionin the SRI (socially responsible investment) indexes and SRI funds listed below.
FTSE Blossom Japan Index

FTSE4Good Index Series

MSCI Japan Empowering Women Index (WIN)Homepage

http://www.tis.com/*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 theexclusive property of MSCI. MSCI and the MSCI index names and logos aretrademarks or service marks of MSCI or its affiliates.

HR-related activities
TIS INTEC Group has endeavored to create a corporate culture and environment that allow diverse individuals to maximize their potential. It
has produced results in reducing overtime hours, acquisition rates for annual leave, and various employment programs (shortened work
schedules, working from home, flextime, etc.). Its HR-related activities have been highly evaluated by various external organizations.
IR Information

http://www.tis.com/ir/

Download the latest IR information on
financial information, such as integrated
reports, from this page.

IR-related activities
The Company believes the disclosure of information to shareholders and investors in a timely, appropriate, and fair manner is an important
responsibility of listed companies, and is working to enhance IR activities and improve the content and functionality of its IR website. As oneof the achievements in this area, we received the following awards.

2019 Internet IR Commendation Award(Daiwa Investor Relations Co., Ltd.)Awarded for nine consecutive years since 2013.

Fiscal 2019 Homepage Quality Ranking Survey of
All Listed Companies(Nikko Investor Relations Co., Ltd.)
Received highest award as excellent website in comprehensive ranking for five consecutive years since fiscal 2015.

85

Corporate Governance

Sustainability

http://www.tis.com/ir/policy/
governance/

http://www.tis.com/group/csr/
Corporate Data

Selected as one of the 50 candidates for the Tokyo Stock Exchange’s“Corporate Value Improvement Award”(Fiscal 2017 and fiscal 2019)

Gomez IR Site Comprehensive Ranking 2019
(Morningstar Japan K.K.)
Awarded for five consecutive years since 2015as an excellent company.

Selected for inclusion in the JPX-Nikkei Index 400(Since August 2018)86