This is an unofficial translation. In case of any difference in meaning between the original Japanese text and the English translation, the Japanese text shallprevail.

Consolidated Summary Report under Japanese GAAP
for the fiscal year ended June 30, 2023
Company Name:
Code Number:
Representative:
For inquiry:

August 4, 2023
Stock exchange listings: Tokyo
URL: https://www.avantgroup.com/

AVANT GROUP CORPORATION
3836(Title) President, Group CEO(Name) Tetsuji Morikawa(Title) Director, Group CFO(Name) Naoyoshi Kasuga

Annual General Meeting of Shareholders date: September 27, 2023
Securities report issue date: September 25, 2023
Supplementary information for financial statements: Available
Explanatory meeting to be held: Yes (for analysts)

TEL: (03) 6388-6739

Dividend payment date: September 28, 2023

(Millions of yen, rounded down to the nearest unit)

1. Consolidated Financial Results for the Fiscal Year Ended June 30, 2023
(1) Consolidated results of operations
Net sales
Fiscal Year
ended June 30, 2023
ended June 30, 2022
Comprehensive income (loss)

EBITDA*

Operating profit%%

21,42418,703

14.5
-

3,737
3,582

for the fiscal year ended June 30, 2023

Net profit per
share
Fiscal Year
ended June 30, 2023
ended June 30, 2022

%

4.3
-

3,289
3,247

2,187 million yen [3.2%]

Diluted net
profit per share(Percentages indicate year-on-year changes)
Profit attributable toOrdinary profit
owners of parent

1.3
-

%

3,265
2,988

for the fiscal year ended June 30, 2022

%

9.3
-

2,094
2,045

2.4
-

2,117 million yen [-%]

Ratio of net profit to Ratio of ordinary
shareholders’ equity profit to total assets

Ratio of operating
profit to net sales

yen

yen

%

%

%

55.65
54.37

-

18.3
21.1

18.5
19.6

15.4
17.4

(Reference) Share in profit of associated company for the fiscal year ended June 30, 2023: - million yen for the fiscal year ended June 30, 2022: (269) million yen(Notes) EBITDA is derived by adding depreciation and amortization of goodwill to operating income.
The Company has applied the “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020), etc. from the beginning of the fiscal year
ended June 30, 2022, and the figures for the fiscal year ended June 30, 2022 are after the application of the said accounting standard, etc., so the percentage change
from the same quarter of the previous year is not stated.

(2) Consolidated financial condition
Total assets
As ofJune 30, 2023
June 30, 2022

Net assets

18,705
16,617(Reference) Net assets attributable to the company’s shareholders

Equity ratio
12,328
10,597

As of June 30, 2023

12,328 million yen

Net assets per share
%

yen

65.9
63.8

327.51281.68

As of June 30, 2022

10,597 million yen(3) Consolidated cash flows
Cash flows from operating Cash flows from investing Cash flows from financing Cash and cash equivalent
activities
activities
activities
at the end of the year
Fiscal Year
ended June 30, 2023
ended June 30, 2022

2,175
3,026

(795)
(398)

(507)
(433)

10,881
10,002

2. Dividends on Common Shares
Dividends per share
1st
2nd
3rd
Fiscalquarter-end quarter-end quarter-end year-end
Fiscal Year Ended
June 30, 2022
June 30, 2023
June 30, 2024
(Forecast)

Annual

Total
Dividends(Annual)Dividend
Dividend on
payout ratio net assets ratio(Consolidated) (Consolidated)

yen

yen

yen

yen

yen

million yen

%

%

-

0.00
0.00

-

13.00
15.00

13.00
15.00

489
564

23.9
27.0

5.0
4.9

-

0.00

-

19.00

19.00

-

(Note) Breakdown of year-end dividend for the fiscal year ended June 30, 2022: ordinary dividend: 12.00 yen and commemorative dividend of 1.00 yen (25th anniversaryof the Company’s founding)3. Consolidated Earnings Forecasts for the Fiscal Year Ending June 30, 2024
(Percentages indicate year-on-year changes)

Net sales
Fiscal Yearending June 30, 2024

Operating profit

Profit attributable toowners of parent

Ordinary profit

Net profit
per share

million yen%

million yen%

million yen%

million yen%

yen

24,000

12.0

3,850

17.0

3,850

17.9

2,500

19.4

66.43

(Note) Since the Company manages its operations on an annual basis, the consolidated earnings forecasts for the second quarter (cumulative) is not provided. For details,
please refer to “1. Qualitative Information on Financial Results (4) Earnings Forecasts” on page 8 of the attached document.

Notes(1) Changes in significant subsidiaries during the period (changes in “Specified Subsidiaries” (Tokutei Kogaisha) accompanying changes
in scope of consolidation): No
Newly added to the scope of consolidation: nil

Newly deleted from the scope of consolidation: nil(2) Changes in accounting policies, accounting estimates and restatement:(i) Changes in accounting policies due to revision of accounting standards: Yes(ii) Changes in accounting policies due to reasons other than item (i) above: No(iii) Changes in accounting estimates: No(iv) Restatement: No(Note) For details, please refer to “3. Consolidated Financial Statements (5) Notes to Consolidated Financial Statements (Note on Change in Accounting
Policies)” on page 17 of the attached document.

(3) Number of issued shares (common shares)(i) Total number of issued shares including treasury
shares(ii) Number of treasury shares held(iii) Average number of shares

As of June 30, 2023

37,645,851shares

As of June 30, 2022

37,625,501 shares

As of June 30, 2023

2,998 shares

As of June 30, 2022

2,998 shares

37,636,218 sharesFiscal Year
ended June 30, 2022

37,614,361 sharesFiscal Year
ended June 30, 2023

* This report is exempt from the audits of CPAs or Audit firms.
* Explanation of the appropriate use of earnings forecasts and other special notes
Forward-looking statements in this report, including earnings forecasts, are based on information currently available to the Company
and on certain assumptions deemed to be reasonable. These statements are not promised by the Company regarding future performance.
Actual results may differ materially from the forecast depending on a range of factors. Please refer to “1. Qualitative Information on
Financial Results (4) Earnings Forecasts” on page 8 of the attached document for the assumptions for earnings forecasts and notes forusing earnings forecasts.

Accompanying Materials – Table of Contents
1. Qualitative Information on Financial Results ....................................................................................................... 2(1) Management’s Discussion on Business Operations for the Fiscal Year under Review ................................... 2(2) Discussion on Financial Position for the Fiscal Year under Review ............................................................... 6(3) Discussion on Cash Flow for the Fiscal Year under Review ........................................................................... 6(4) Earnings Forecasts ………………………....................................................................................................... 8
2. Basic Approach to the Selection of Accounting Standards …………….................................................................. 8
3. Consolidated Financial Statements and Notes ………………………................................................................... 9(1) Consolidated Balance Sheets ………………….......................................................................................... 9(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income .................... 11(3) Consolidated Statements of Changes in Net Assets …………....................................................................... 13(4) Consolidated Statements of Cash Flows ……………………..................................................................... 15(5) Notes to Consolidated Financial Statements …………………..................................................................... 17(Note on the Going Concern Assumption) ………….............................................................................. 17(Note on Change in Accounting Policies) .............................................................................................. 17(Additional Information) ………........................................................................................................... 17(Revenue Recognition) …………............................................................................................................ 18(Segment Information) ……………………............................................................................................. 19(Per Share Information) …………........................................................................................................... 22(Subsequent Events) ……………........................................................................................................... 23- 1 -1. Qualitative Information on Financial Results(1) Management’s Discussion on Business Operations for the Fiscal Year under Review
Consolidated financial results for the fiscal year under review are as follows.
Fiscal Year ended June30, 2022(Millions of yen, rounded down to the nearest unit)
Year-on-Year Change
Fiscal Year ended June30, 2023
Amount%Net sales

18,703

21,424

2,721

14.5

Operating profit

3,247

3,289

42

1.3

Ordinary profit

2,988

3,265

277

9.3

Profit attributable to owners ofparent

2,045

2,094

49

2.4

Consolidated net sales for the fiscal year under review were 21,424 million yen (up 14.5% year-on-year) as a resultof steady growth in all three businesses: Group Governance, Digital Transformation, and Outsourcing, as we
proactively responded to growing investment needs among Japanese companies, our customers, to maintain andstrengthen competitiveness by “upgrading corporate management and activities using data and digital technology,”
which is becoming a mid- to long-term trend.
As for the improvement of the ratio of recurring sales (sales that occur on an ongoing basis, such as software
maintenance fees), which is one of the management targets in the medium-term management plan, the Outsourcing
Business, where the recurring sales ratio is constantly maintained at around 90%, showed a high growth rate, resulting
in an increase in the sales composition ratio for the entire Group. The other two businesses also showed improvementsin the ratio of recurring sales. As a result, the ratio of recurring sales was 35.3%, up 0.7% from the same period of
the previous year. Also, total recurring sales continued to grow steadily, increasing 16.9% year-on-year.
As for profits, in addition to increases in fixed personnel expenses due to improved compensation and an increasein headcount following reinforced recruitment efforts to strengthen competitiveness for the purpose of securing
human resources, due to the group reorganization, there were also rebranding expenses, and costs due to productrationalization and improvement of development environment at the operating companies. There was also an increasein outsourced processing expenses in response to increased demand from customers. Affected by these and otherfactors, we recorded operating profit of 3,289 million yen (up 1.3% year-on-year), ordinary profit of 3,265 million
yen (up 9.3% year-on-year), and profit attributable to owners of parent of 2,094 million yen (up 2.4% year-on-year).

- 2 -The status of each reportable segment is as follows.
(i) Net sales

Group Governance Business
Digital Transformation BusinessOutsourcing BusinessEliminationofinter-segment
transactions
Consolidated Net sales(Millions of yen, rounded down to the nearest unit)
Year-on-Year Change
Fiscal Year ended June30, 2023
Amount%10,033
660
7.0
8,381
1,366
19.5
3,755
711
23.4

Fiscal Year ended June30, 2022
9,372
7,015
3,044
(729)

(746)

(16)

-

18,703

21,424

2,721

14.5

(ii) Operating profit

Group Governance Business
Digital Transformation BusinessOutsourcing BusinessCorporate Expenses and Eliminationof inter-segment transactions
Consolidated operating profit(Millions of yen, rounded down to the nearest unit)
Year-on-Year Change
Fiscal Year ended June30, 2023
Amount
%
1,709
(350)
(17.0)
1,521
277
22.3
824
163
24.7

Fiscal Year ended June30, 2022
2,060
1,244
661
(718)

(766)

(47)

-

3,247

3,289

42

1.3

In the Group Governance Business, net sales increased to 10,033 million yen, up 7.0% year-on-year. While growthin solutions that contribute to group management information control was a factor in the increase in sales, sales
increased at a limited level due to restrictions posed on sales activities as a result of an organization restructuring.
Aside from an increase in outsourced processing expenses to meet rising demand, expenses increased for productrationalization and development environment improvement that were conducted simultaneously with thereorganization, resulting in a year-on-year decline in profit margins and a decrease in the amount of profit. As a result,operating profit decreased to 1,709 million yen (down 17.0% year-on-year).
In the Digital Transformation Business, the need among customers to utilize data for decision making related to
management and business promotion continues to accelerate and has shifted to a focus on the provision of cloud data
platforms and ever-larger projects. On the other hand, the business intelligence-related development, the traditionalcore of the business, was also strong, resulting in an increase in net sales to 8,381 million yen (up 19.5% year-onyear). Although personnel expenses increased due to higher compensation levels intended to strengthen
competitiveness by securing staff, this was offset by the effect of higher sales, and operating profit was 1,521 million
yen (up 22.3% year-on-year), significantly higher than the previous consolidated fiscal year.
In the Outsourcing Business, while continuing to maintain high net sales growth rates, recurring sales continued tobuild steadily, resulting in net sales increasing to 3,755 million yen (up 23.4% year-on-year). In terms of profitability,
there were factors that increased costs, such as the promotion of personnel hiring and increased office space to achievesustainable growth in the future, but operating profit increased due to the sales growth. As a result, operating profit
increased to 824 million yen (up 24.7% year-on-year).

- 3 -The number of employees on a consolidated basis was 1,389 at the end of the fiscal year, up 163 from the end of theprevious fiscal year.
Quarterly Trends of Number of Employees of the Group(person)

1,600

1,389

1,400
1,226 1,240
1,200
1,055 1,030 1,030 1,047
1,000
832

855

874

Q1

Q2

Q3

938

950

965

963

Q4

Q1

Q2

Q3

1,107 1,123 1,128

1,139

Q4

Q3

1,263 1,270

800

600

400

200
FY06/19Q4Q1

FY06/20Q2Q3

FY06/21

Q1

Q2

Q4

Q1

FY06/22

Q2

Q3

Q4

FY06/23

The status of orders received and sales by segment for the fiscal year under review is as follows.
(i) Orders Received

Group Governance Business
Digital Transformation
Business
Outsourcing BusinessElimination of inter-segment
transactions
Total

Fiscal Year ended June 30,
2022
OrdersOutstanding
Received
Orders
10,155
3,132(Millions of yen, rounded down to the nearest unit)
Year-on-Year Change
Fiscal Year ended June 30,
2023
AmountOrdersOutstanding
OrdersOutstanding
Received
Orders
Received
Orders
10,301
3,400
145
267

6,902

1,131

9,060

1,810

2,158

679

3,751

2,164

4,039

2,448

288

283

(797)

(357)

(688)

(300)

108

57

20,012

6,070

22,713

7,359

2,700

1,288

(ii) Net Sales

Group Governance Business
Digital Transformation
Business
Outsourcing BusinessElimination of inter-segment
transactions
Total

Fiscal Year ended June 30,
2022
9,372

(Millions of yen, rounded down to the nearest unit)
Year-on-Year Change
Fiscal Year ended June 30,
2023
Amount%10,033
660
7.0

7,015

8,381

1,366

19.5

3,044

3,755

711

23.4

(729)

(746)

(16)

-

18,703

21,424

2,721

14.5

- 4 -

Quarterly trends in net sales and operating profit are as follows.
Net sales and operating profit for the last four quarters(Millions of yen, rounded down to the nearest unit)
Fiscal Year ended June 30, 2023
First quarter
Net sales

Second quarter

Third quarter

Fourth quarter

5,025

5,497

5,664

5,236

Operating profit

614

1,178

1,127

368

Operating profit margin
(%)

12.2

21.4

19.9

7.0

Quarterly trends of net sales, operating profit, and ratio of operating profit to net sales(Millions of yen)

Net Sales

Operating Profit

Ratio of operating profit to net sales

6,000

25%

5,500
5,000

20%

4,500
4,000
15%

3,500
3,000
2,500

10%

2,000
1,500

7.0% 5%

1,000
500
0

0%
Q1

Q2

Q3

FY06/19

Q4

Q1

Q2

Q3

FY06/20

Q4

Q1

Q2

Q3

FY06/21

- 5 -

Q4

Q1

Q2

Q3

FY06/22

Q4

Q1

Q2

Q3

FY06/23

Q4

(2) Discussion on Financial Position for the Fiscal Year under Review
Total assets at the end of the consolidated fiscal year under review were 18,705 million yen (up 2,088 million yen
from the end of the previous fiscal year). This was mainly due to an 873 million yen increase in cash and deposits, a
285 million yen increase in prepaid expenses, a 577 million yen increase in other in current assets, and a 260 million
yen increase in investment securities.
On the other hand, total liabilities amounted to 6,377 million yen (up 357 million yen from the end of the previous
fiscal year). This was mainly due to a 440 million yen increase in contract liabilities, a 110 million yen increase inaccounts payable, and a 232 million yen decrease in income taxes payable - other, and accrued expenses.
Total net assets amounted to 12,328 million yen (up 1,730 million yen from the end of the previous fiscal year) due
to the recording of 2,094 million yen in profit attributable to owners of parent and the payment of 489 million yen in
dividends of surplus. As a result, the equity ratio was 65.9% (63.8% at the end of the previous fiscal year), an
improvement of 2.1% from the end of the previous fiscal year, and the Company believes it maintains a highly stablefinancial balance with low interest-bearing debt.
(3) Discussion on Cash Flow for the Fiscal Year under Review
Cash and cash equivalents (hereinafter referred to as “cash”) at the end of the fiscal year under review increased by
878 million yen from the end of the previous fiscal year to 10,881 million yen. The status of each cash flow and theirfactors are as follows.
< Cash flows from operating activities >Cash provided by operating activities amounted to 2,175 million yen. (3,026 million yen provided in the previous
year)
The main factors of increase were profit before income taxes of 3,079 million yen, depreciation of 449 million yen,
impairment losses of 186 million yen, and increase (decrease) in contract liabilities of 440 million yen. The main
factors of decrease were decrease (increase) in prepaid expenses of 279 million yen, and income taxes paid of 1,560
million yen.
< Cash flows from investing activities >Cash used in investing activities totaled 795 million yen. (398 million yen used in the previous year)
The main accounts of cash outflow were 225 million yen for purchase of property, plant and equipment, 521 million
yen for purchase of intangible assets, 152 million yen for purchase of investment securities, and 120 million yen for
payments of leasehold and guarantee deposits, while the main accounts of cash inflow were 90 million yen forproceeds from redemption of securities and 139 million yen for proceeds from refund of leasehold and guarantee
deposits.
< Cash flows from financing activities >Cash used in financing activities was 507 million yen. (433 million yen used in the previous year)
The main component of cash outflow was dividends paid of 489 million yen.

- 6 -In our group, cash flow from operating activities in the first quarter are at a low level due to the payment of income
taxes and the payment of performance-based bonuses to officers and employees, and it gradually increases from thesecond quarter onward, and is typically positive for the full fiscal year (In the fiscal year under review, upfront
payments were made in the first half of the year more than usual fiscal years due to factors such as increases in salesof consulting services, which require working capital upfront, and bonuses and income taxes paid).
Maintenance fees in the Group Governance Business and commissions paid for the Outsourcing Business are prepaid
for the year in advance of the provision of services, so as a result, the original business model has almost no need forworking capital. On the other hand, in the Digital Transformation Business as outsourcing costs and other expenses
are paid in advance, working capital demand will increase as sales grow. However, by concentrating the excess fundsof the Group as a whole in the holding company, the Group is able to smoothly extend funds across the Group. In
addition to the total amount of cash held, the Group has established a commitment line totaling 3.5 billion yen withbanks with which it does business. Accordingly, at present there are no concerns about funding.
Quarterly trends of Operating cash flow (Millions of yen)
3500
3000
2500
2000
1500
1000
500
0
-500

1Q

2Q
3Q
FY2021

4Q

1Q

2Q
3Q
FY2022

4Q

1Q

2Q
3Q
FY2023

4Q-1000* Accumulated cash provided by operating activities for the first quarter of fiscal year ended June30, 2021 was 72 million yen.
Operating cash flow (quarter)

Operating cash flow (accumulative)- 7 -(4) Earnings Forecasts
In August 2023, the Company announced a five-year plan (target to be achieved in five years), which ends in thefiscal year ending June 2028, as its new Medium-Term Management Plan, and the fiscal year ending June 2024 is thefirst year of the plan. Ahead of the start of the new Medium-Term Management Plan, we have defined the materialityof the Avant Group as “to become a software company that helps enhance corporate value.” As a concrete measure
to clarify what we aim to become during the period of the new Medium-Term Management Plan and realize thismateriality, we have reorganized the group and been developing business activities as the new Avant Group on
October 1, 2022. Through such initiatives, we have clarified the direction of each operating company. At the sametime, by positioning each operating company in growth markets, we have created a structure that will enable us toachieve sustainable sales growth. On the other hand, we do not believe that we are at the stage of reaping the full
benefits of the Group's reorganization in the early stage of the period of the new Medium-Term Management Plan.
Rather, we expect that the effects will gradually become apparent over a period of five years. In addition, while therestructuring associated with the Group’s reorganization has been complete, it is our policy to continuously andflexibly make growth investment that is required for realization of materiality.
Although external factors such as inflation caused by soaring raw material prices and a concern over economic
slowdown on the back of financial tightening pose a risk of affecting the Group’s performance, we believe thatdemand for the Group’s business will continue to increase over a medium to long term, as more companies seek tostrengthen data-driven management and group governance.
As a result, the Company expects to achieve net sales of 24,000 million yen and operating profit of 3,850 million
yen in the following fiscal year.
In accordance with our existing dividend policy, we will raise the ratio of dividends to net assets, always being
conscious of exceeding the average of all listed companies, while at the same time striving to maintain stabledividends (in principle, dividends per share should not fall below the level of the previous fiscal year). We forecast a
dividend of 15 yen per share for the fiscal year under review, without changing the forecast, and plan to propose aresolution for the payment at the general meeting of shareholders to be held on September 27, 2023.
Regarding dividends for the next fiscal year, there is no change in the above policy itself, we forecast dividends of
19 yen per share to achieve the ratio of dividends to net assets which is one of the targets to be achieved during theperiod of the new Medium-Term Management Plan.
Trends of dividends (adjusted for stock splits)(yen/share)

19.0
15.0
13.0
11.0
7.5

2019

9.0

2020

2021

2022

2023

2024
(Forecast)

2. Basic Approach to the Selection of Accounting Standards
For the time being, the Group’s policy is to prepare consolidated financial statements in accordance with Japanese
GAAP. The Group's policy is to adopt IFRS as appropriate, taking into consideration various circumstances in Japanand overseas.
- 8 -3. Consolidated Financial Statements and Notes(1) Consolidated Balance Sheets(Thousands of yen)
As of June 30, 2022
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade, andcontract assets
Securities
Work in process
Raw materials and supplies
Prepaid expenses
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings
Accumulated depreciation
Buildings, net
VehiclesAccumulated depreciation
Vehicles, net
Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net
Construction in progress
Total property, plant and equipment
Intangible assets
Software
Other
Total intangible assets
Investments and other assets
Investment securities
Long-term prepaid expenses
Leasehold and guarantee deposits
Deferred tax assets
Other
Total investments and other assets
Total non-current assets
Total assets- 9 -As of June 30, 2023

9,444,021

10,317,243

3,024,049

2,963,130590,019
18,10082,827
539,637
46,346(3,685)
13,741,316

500,000
13,620112,676
824,824
623,801(3,622)
15,351,673

364,191(156,239)
207,952843(843)
0684,626(494,461)
190,165
398,117417,933(157,247)
260,685843(843)
0669,026(494,223)
174,803
51,978487,466

676,429521
676,951

728,306
225
728,532

511,133
29,713560,883
568,997
129,933
1,800,661
2,875,730
16,617,046

772,046
66,028575,243590,209134,393
2,137,920
3,353,919
18,705,593

(Thousands of yen)
As of June 30, 2022
Liabilities
Current liabilities
Notes and accounts payable - trade
Lease liabilities
Accounts payable - other, and accrued expenses
Income taxes payable
Contract liabilities
Asset retirement obligations
Provision for bonuses
Provision for bonuses for directors (and otherofficers)
Provision for loss on orders received
Provision for compensation for damage
Other
Total current liabilities
Non-current liabilities
Lease liabilities
Asset retirement obligations
Deferred tax liabilities
Total non-current liabilities
Total liabilities
Net assets
Shareholders' equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Total shareholders' equity
Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Total accumulated other comprehensive
incomeTotal net assets
Total liabilities and net assets- 10 -

As of June 30, 2023

662,316
12,428392,568
586,626
2,355,344
15,606
1,050,315

634,758
12,257503,111354,192
2,796,086
1,038,329

170,813

172,380

17,743556,718
5,820,483

61,594
9,596
539,812
6,122,119

18,324
180,576
198,900
6,019,383

6,039
210,900
38,016
254,956
6,377,076

329,128
265,928
9,872,031(608)
10,466,479

345,113
281,913
11,477,458(608)
12,103,876

103,126

183,925

236
27,820302
40,411

131,183

224,639

10,597,663
16,617,046

12,328,516
18,705,593

(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income
Consolidated Statements of Income

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Remuneration for directors (and other officers)
Employees' salaries and bonuses
Provision for bonuses
Provision for bonuses for directors (and other officers)
Legal welfare expenses
Outsourcing expenses
Rent expenses on land and buildings
Utilities expenses
Commission expenses
Depreciation
Research and development expenses
Other
Total selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
Gain on investments in investment partnerships
Subsidy income
Other
Total non-operating income
Non-operating expenses
Provision for loss on compensation for damage
Interest expenses
Share of loss of entities accounted for using equity
methodLoss on investments in investment partnerships
Commission expenses
Foreign exchange losses
Share issuance costs
Compensation for damage
Other
Total non-operating expenses
Ordinary profit
Extraordinary losses
Impairment losses
Total extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent(Thousands of yen)
Fiscal year ended
Fiscal year ended
June 30, 2022
June 30, 2023
(From July 1, 2021
(From July 1, 2022
to June 30, 2022)
to June 30, 2023)
18,703,387
21,424,584
9,782,137
12,028,711
8,921,250
9,395,873- 11 -

356,348
1,527,471
1,047,472
170,813224,193
55,071
239,805
81,375615,796
263,488382,473
709,749
5,674,060
3,247,189

396,002
1,598,420
1,047,155
173,579
246,204
76,652
231,184
84,138746,590
269,179
375,674
861,698
6,106,482
3,289,390

240
6,563
9,043
2,127
1,102
19,07796
10,192
7,386
531
4,559
22,766

742

9,596
485

269,244

-

5,682
695
281
647
277,2942,988,973

11,975
5,791
4,426
228
13,377289
46,1723,265,983

2,988,973
1,186,181(242,241)
943,939
2,045,033
2,045,033

186,613
186,6133,079,370
1,009,937(25,087)
984,850
2,094,520
2,094,520

Consolidated Statements of Comprehensive Income

ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests(Thousands of yen)
Fiscal year ended
Fiscal year ended
June 30, 2022
June 30, 2023
(From July 1, 2021
(From July 1, 2022
to June 30, 2022)
to June 30, 2023)
2,045,033
2,094,520
45,012
208
29,51880,79866
12,591(1,989)-72,7502,117,784

93,456
2,187,976

2,117,784

2,187,976--- 12 -

(3) Consolidated Statements of Changes in Net Assets
Fiscal Year ended June 30, 2022 (period from July 1, 2021 to June 30, 2022)(Thousands of yen)
Shareholders’ equity

Share capital
Balance at beginning of period
Cumulative effects of changes inaccounting policies
Restated balance

311,568

Capital surplus

248,368

Retained earnings Treasury shares

8,169,386(549)

71,213
311,568

248,368

17,55917,5598,240,600

Total shareholders’equity8,728,774
71,213(549)

8,799,988

Changes during period
Issuance of new shares
Dividends of surplus
Profit attributable to owners ofparent(413,602)

35,119(413,602)

2,045,033

2,045,033
(58)

(58)

(58)
(608)

1,666,491
10,466,479

Accumulated other comprehensive income
Valuation
Total accumulateddifference on
Deferred gains or Foreign currency
othertranslation
available-for-sale losses on hedges
comprehensive
adjustment
securities
incomeTotal net assets

Purchase of treasury shares
Net changes in items other thanshareholders’ equity
Total changes during period
Balance at end of period

Balance at beginning of period
Cumulative effects of changes inaccounting policies
Restated balance

17,559329,128

58,114

17,559265,928

27

1,631,430
9,872,031

291

58,433

8,787,207
71,213

58,11427

291

58,4338,858,421

Changes during period

35,119(413,602)

Issuance of new shares
Dividends of surplus
Profit attributable to owners ofparentPurchase of treasury shares
Net changes in items other thanshareholders’ equity
Total changes during period
Balance at end of period

2,045,033(58)
45,012

208

45,012
103,126208
236- 13 -

27,52972,75072,75027,52927,82072,750131,183

1,739,241
10,597,663

Fiscal Year ended June 30, 2023 (period from July 1, 2022 to June 30, 2023)(Thousands of yen)
Shareholders’ equity

Share capital
Balance at beginning of period

Capital surplus

329,128

265,928

15,984

15,984Retained earnings Treasury shares

9,872,031(608)

Total shareholders’equity10,466,479

Changes during period
Issuance of new shares
Dividends of surplus
Profit attributable to owners ofparentPurchase of treasury shares
Net changes in items other thanshareholders’ equity
Total changes during period
Balance at end of period(489,092)

31,969(489,092)

2,094,520

2,094,520-

15,984345,113

15,984
281,913

1,605,427
11,477,458(608)

Accumulated other comprehensive income
Valuation
Foreign currency Total accumulateddifference on
Deferred gains orothertranslation
available-for-sale losses on hedges
comprehensive
adjustment
securities
incomeBalance at beginning of period

103,126

236

27,820131,183

1,637,397
12,103,876

Total net assets

10,597,663

Changes during period
Issuance of new shares
Dividends of surplus
Profit attributable to owners ofparentPurchase of treasury shares
Net changes in items other thanshareholders’ equity
Total changes during period
Balance at end of period

31,969(489,092)
2,094,520
80,79880,798
183,925

66
66
302- 14 -

12,591
12,59140,411

93,45693,456
224,639

93,456
1,730,853
12,328,516

(4) Consolidated Statements of Cash Flows(Thousands of yen)
Fiscal year ended
June 30, 2023
(From July 1, 2022
to June 30, 2023)

Fiscal year ended
June 30, 2022
(From July 1, 2021
to June 30, 2022)
Cash flows from operating activities
Profit before income taxes

2,988,973

3,079,370

349,494449,223-

186,613

Share-based payment expenses
Increase (decrease) in allowance for doubtful
accounts

16,64020,262

260(63)

Increase (decrease) in provision for bonuses
Increase (decrease) in provision for bonuses for
directors (and other officers)
Increase (decrease) in provision for loss on orders
received

273,579(11,986)

44,311

8,190

17,66943,850Interest and dividend income(6,804)(10,288)742

485

Commission expenses

5,682

5,791

Share issuance costs

281

228

-

13,377269,244-(9,043)

4,589

-

9,596

(2,127)(531)

Decrease (increase) in notes and accounts receivabletrade and contract assets(258,725)

61,014

Decrease (increase) in inventories(38,948)(25,368)

Decrease (increase) in prepaid expenses

4,913(279,472)

Increase (decrease) in trade payables

202,862(27,558)

Increase (decrease) in accounts payable - other, andaccrued expenses

105,245(128,220)

Increase (decrease) in accrued consumption taxes

105,396(51,169)

Increase (decrease) in contract liabilities

26,613440,741

Increase (decrease) in deposits received

22,82935,591Other, net(175,457)(85,749)

Subtotal

3,943,635

3,738,519

Interest and dividends received

6,804

10,480Interest paid

(742)

(485)

Depreciation
Impairment losses

Interest expenses

Compensation for damage
Share of loss (profit) of entities accounted for using
equity method
Loss (gain) on investments in investment
partnerships
Increase (decrease) in provision for compensation fordamageSubsidy income-(13,377)

Subsidies received

Compensation paid for damage

2,127

531

Income taxes paid

(925,207)(1,560,275)

Net cash provided by (used in) operating activities

3,026,616

2,175,390- 15 -

Fiscal year ended
June 30, 2022
(From July 1, 2021
to June 30, 2022)
Cash flows from investing activities
Proceeds from redemption of securities
Purchase of property, plant and equipment
Payments for asset retirement obligations
Purchase of intangible assets
Purchase of investment securities
Payments of leasehold and guarantee deposits
Proceeds from refund of leasehold and guarantee deposits
Purchase of insurance funds
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Repayments of finance lease liabilities
Commission fee paid
Purchase of treasury shares
Dividends paid
Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period- 16 -(Thousands of yen)
Fiscal year ended
June 30, 2023
(From July 1, 2022
to June 30, 2023)(89,885)(13,810)(317,336)(23,682)(181,170)(216,875)(4,459)14,511(398,957)

90,019(225,602)(12,269)(521,790)(152,926)(120,775)
139,792(4,459)12,396(795,616)(14,212)(5,044)(58)(413,602)(281)(433,200)
22,1882,216,647
7,786,223
10,002,870(12,455)(5,397)(489,092)(228)(507,174)
5,841
878,441
10,002,870
10,881,311

(5) Notes to Consolidated Financial Statements(Note on the Going Concern Assumption)
Not applicable.
(Note on Change in Accounting Policies)< Application of the “Guidance on Accounting Standard for Measurement of Fair Value” >The Company adopted the “Guidance on Accounting Standard for Measurement of Fair Value (ASBJ Guidance No.
31, June 17, 2021). Hereafter referred to as the ‘Guidance on Accounting Standard for Fair Value Calculation’)” fromthe beginning of the fiscal year under review and will prospectively apply the new accounting policy in accordancewith the transitional treatment stipulated in Paragraph 27-2 of the Guidance on Accounting Standard for Fair Value
Calculation. There is no impact on the consolidated financial statements for the fiscal year under review.
(Additional Information)< Application of the “Treatment of Accounting and Disclosure for Application of the Group Totalization System” >Effective from the fiscal year under review, the Company and its domestic consolidated subsidiaries have adopted
a group totalization system. In addition, the Company conducts the accounting treatment of income taxes and local
income taxes or the tax effect accounting treatment and disclosure related to the foregoing in accordance with
"Treatment of Accounting and Disclosure for Application of the Group Totalization System (PITF No. 42, August 12,2021).

- 17 -

(Revenue Recognition)
Breakdown of net sales from contracts with customers
Cumulative period for the fiscal year ended June 30, 2022 (from July 1, 2021 to June 30, 2022)(Thousands of yen)Group GovernanceBusiness
Goods or services transferred at a point
in timeGoods or services that are transferredover a period of time
Sales from contracts with customers
Other sales
Net sales to external customers

Reportable segments
DigitalTransformation
Business

Total

Outsourcing
Business

577,390

86,456

153,377

817,224

8,754,217

6,902,673

2,229,272

17,886,162

9,331,607

6,989,129

2,382,650

18,703,387

-

-

-

-

9,331,607

6,989,129

2,382,650

18,703,387

Cumulative period for the fiscal year ended June 30, 2023 (from July 1, 2022 to June 30, 2023)(Thousands of yen)Group GovernanceBusiness
Goods or services transferred at a point
in timeGoods or services that are transferredover a period of time
Sales from contracts with customers
Other sales
Net sales to external customers

Reportable segments
DigitalTransformation
Business

Total

Outsourcing
Business

241,547

46,870133,184

421,6029,723,660

8,330,094

2,949,226

21,002,982

9,965,208

8,376,964

3,082,411

21,424,584

-

-

-

-

9,965,208

8,376,964

3,082,411

21,424,584- 18 -

(Segment Information)
1. Overview of reportable segments(1) Method of determining reportable segments
The Group’s reportable segments are components of the Company for which separate financial information isavailable and which are subject to periodic review by the Board of Directors for the purpose of determining theallocation of management resources and evaluating performance.
The Group is working on “making management information usable (Group Governance Business),” “making it
visible (Digital Transformation Business),” and “delegating it (Outsourcing Business),” and is managing performancein its business portfolio in three areas. The three reportable segments are “Group Governance Business,” “Digital
Transformation Business,” and “Outsourcing Business.”(2) Products and services in each reportable segment
In the “Group Governance Business,” AVANT GROUP CORPORATION sells licenses of DivaSystem, a proprietary
software package for consolidated management and consolidated accounting, and provides consulting services for its
introduction. After the system is up and running, the company also provides ongoing maintenance services, including
support for version upgrades.
In addition, we provide consulting services and solutions related to IFRS compliance, business management
sophistication, budgeting, and management accounting.
The Group Governance Business also includes information retrieval services for disclosure documents provided
mainly to audit firms by Internet Disclosure, Inc.
In the “Digital Transformation Business,” Zeal Co., Ltd. provides system integration services for the use of
information called BI (Business Intelligence). This is a system development service that integrates and organizes thevast amount of corporate data accumulated in business systems, etc., so that it can be analyzed in reports and graphs
and used for corporate decision-making, thereby helping customers improve their “information utilization
capabilities.”
In the “Outsourcing Business,” Diva Corporation provides outsourcing services for consolidated financial closing
and consolidated tax payment. The company performs a portion of clients’ operations on behalf of them to eliminate
dependence of operations on specific personnel and operational bottlenecks. At the same time, the company
contributes to creating an environment that allows clients’ back-office personnel to focus on operations that provide
more value to management and the business, such as analysis and utilization of various types of information.
2. Method of calculating net sales, income or loss, assets, liabilities and other items by reportable segment
The accounting method for the reportable business segments is generally the same as the accounting method usedin preparing the consolidated financial statements. Reportable segment income figures are based on operating profit.
Inter-segment net sales and transfers are based on prevailing market prices.

- 19 -

3. Information on net sales, income or loss, assets, liabilities and other items by reportable segment
Fiscal year ended June 30, 2022 (from July 1, 2021 to June 30, 2022)(Thousands of yen)Group GovernanceBusiness
Net sales
Net sales to external customers
Inter-segment net sales or transfers
Total
Segment profit
Segment assets
Segment liabilities
Other items
Depreciation
Increase in tangible fixed assets andintangible fixed assets

Reportable segments
DigitalTransformation
Business

Outsourcing
Business

Total

9,331,607
41,041
9,372,648
2,060,552
7,059,005
4,342,310

6,989,129
26,233
7,015,362
1,244,346
3,369,494
1,863,904

2,382,650
661,941
3,044,591
661,069
1,585,235
878,899

18,703,387
729,215
19,432,603
3,965,969
12,013,735
7,085,114

157,857

20,26734,992

213,117160,260

688

56,315217,264

Fiscal year ended June30, 2023 (From July 1, 2022 to June 30, 2023)(Thousands of yen)Group GovernanceBusiness
Net sales
Net sales to external customers
Inter-segment net sales or transfers
Total
Segment profit
Segment assets
Segment liabilities
Other items
Depreciation
Impairment losses
Increase in tangible fixed assets andintangible fixed assets

Reportable segments
DigitalTransformation
Business

Outsourcing
Business

Total

9,965,208
68,09010,033,298
1,709,876
7,342,551
5,044,032

8,376,964
4,652
8,381,617
1,521,803
3,609,570
1,703,602

3,082,411
673,417
3,755,829
824,401
2,280,313
1,412,484

21,424,584
746,160
22,170,745
4,056,081
13,232,435
8,160,118

196,752
186,61340,603-58,645-

296,001
186,61349,802

10,906

115,783

176,491- 20 -

4. Differences between the total amount of reportable segments and the amounts recorded in the consolidated
financial statements, and major details of said differences (matters related to difference reconciliation)(Thousands of yen)
Fiscal Year ended
June 30, 2022

Net sales
Total amount of reportable segments
Elimination of transactions between the Company and its segment
Net sales reported in consolidated financial statements

Fiscal Year ended
June 30, 2023

19,432,603

22,170,745(729,215)(746,160)

18,703,387

21,424,584(Thousands of yen)
Fiscal Year ended
June 30, 2022

Profits
Total amount of reportable segments
Elimination of transactions between the Company and its segment
Corporate expenses (Note)

3,965,969

4,056,081

756,918

808,924(1,476,259)(1,568,574)

561(7,040)3,247,189

3,289,390

OthersOperating profit reported in consolidated financial statements

Fiscal Year ended
June 30, 2023

(Note) Corporate expenses are mainly general and administrative expenses not attributable to the reportable segments.

(Thousands of yen)
Fiscal Year ended
June 30, 2022

AssetsFiscal Year ended
June 30, 2023

Total amount of reportable segments

12,013,735

13,232,435

Elimination of transaction between the Company and segment(3,994,187)(1,984,699)

Corporate assets (Note)

8,605,252

7,437,417(7,754)

20,43916,617,046

18,705,593

OthersTotal assets reported in consolidated financial statements(Note) Corporate assets are mainly assets not attributable to the reportable segments.

(Thousands of yen)
Fiscal Year ended
June 30, 2022

Liabilities

Fiscal Year ended
June 30, 2023

Total amount of reportable segments

7,085,114

8,160,118

Elimination of transaction between the Company and segment(1,781,292)(2,074,435)

Corporate liabilities (Note)

718,514

253,772

Others(2,953)37,621

6,019,383

6,377,076

Total liabilities reported in consolidated financial statements(Note) Corporate liabilities are mainly liabilities not attributable to the reportable segments.

- 21 -

(Thousands of yen)
Reportable segments
Other items

Depreciation
Impairment losses
Increase

inproperty,

plant

and

equipment intangible assets

Adjustments (Note)

Amounts recorded inconsolidated financial
statements
Fiscal Year
Fiscal Year
ended June
ended June30, 2022
30, 2023

Fiscal Year
ended June30, 2022

Fiscal Year
ended June30, 2023

Fiscal Year
ended June30, 2022

Fiscal Year
ended June30, 2023

213,117

296,001

136,376

153,222

349,494449,223-

186,613---

186,613217,264

176,491

168,412445,182385,677

621,674(Note) Adjustment for depreciation is mainly depreciation for assets not attributable to the reportable segments.
Adjustments to increases in property, plant and equipment and intangible assets mainly relate to assets not attributable to reportable segments.

(Per share Information)
Fiscal Year ended June 30, 2022
(Period from July 1, 2021
to June 30, 2022)
281.68 yen
54.37 yen

Net assets per share
Net profit per share

Fiscal Year ended June 30, 2023
(Period from July 1, 2022
to June 30, 2023)
327.51 yen
55.65 yen

(Notes) 1. Diluted net profit per share is not provided as there are no dilutive shares.
2. The basis for calculating net assets per share is as follows.

Item

As of June 30, 2022

Total of net assets (thousands of yen)Amount deducted from total of net assets (thousandsof yen)Net assets attributable to common shares (thousandsof yen)Number of common shares outstanding for
calculating net assets per share (shares)

As of June 30, 2023

10,597,663

12,328,516--

10,597,663

12,328,516

37,622,503

37,642,853

3. The basis for calculating net profit per share is as follows.

Item

Fiscal Year ended
June 30, 2022
(Period from July 1, 2021
to June 30, 2022)

Net profit attributable to owners of parent (thousandsof yen)Amounts not attributable to owners of common shares(thousands of yen)
Net profit attributable to owners of common shares ofparent (thousands of yen)
Average number of common shares (shares)- 22 -

Fiscal Year ended
June 30, 2023
(Period from July 1, 2022
to June 30, 2023)

2,045,033

2,094,520--

2,045,033

2,094,520

37,614,361

37,636,218

(Subsequent Events)(Introduction of the Employee Benefit Trust)At the meeting of the Board of Directors held on August 4, 2023, the Company passed a resolution for
introduction of an “Employee Benefit Trust” (the “Plan”) as an incentive plan for employees of the Group(“Employees”).
1. Purpose of introducing the Plan
The Company introduces the Plan for the purpose of enhancing the mid- to long-term corporate value of theCompany by providing incentives to Employees who have contributed to growth of the Company, and thereby
fostering a sense of belonging among Employees, giving them a sense of participation in management, andincreasing their awareness of the Company’s performance and stock price increase.
2. Overview of the Plan
The Plan is an incentive plan in which a trust will be established using money contributed by the Company as
the source (the “Trust”), and the Trust acquires shares in common shares of the Company (the “Company Shares”)
and delivers the Company Shares to each employee through the Trust. Said shares will be delivered to each
employee in accordance with the Stock Delivery Regulations stipulated by the Board of Directors of the Company.
The full amount of funds for acquiring the Company Shares by the Trust will be contributed by the Company;
accordingly, there will be no burden on Employees.
Introduction of the Plan will allow Employees to receive economic benefit from the increase in the stock priceof the Company Shares; and therefore, it is expected to have effects of promoting Employees’ execution ofbusiness with awareness of the stock price and motivating Employees to work harder.
3. Overview of the Trust(1) Name: Employee Benefit Trust(2) Entrustor: The Company(3) Entrustee: Sumitomo Mitsui Trust Bank, Limited(Sub-entrustee: Custody Bank of Japan, Ltd.)(4) Beneficiaries: Employees who satisfy the requirements for beneficiaries(5) Trust custodian: A third party independent of the Company and officers of the Company is planned to be
selected.
(6) Exercise of voting rights: The entrustee will exercise its voting rights throughout the trust period based on
instructions given by the trust custodian.
(7) Type of trust: Pecuniary trusts other than money trusts (non-grantor trust)(8) Date of agreement of the trust: August 15, 2023 (planned)(9) Date of entrusting money in the trust: August 15, 2023 (planned)(10) Date of the end of the trust: September 30, 2028 (planned)
4. Details of the acquisition of the Company Shares by the Trust(1) Class of shares acquired: Shares in common shares(2) Amount of money entrusted as the funds for acquiring the shares: 450,000,000 yen (maximum amount)(3) Total number of shares acquired: 350,000 shares(4) Method of acquiring the shares: Through the exchange market (including off-floor trading)(5) Timing of acquiring the shares: From August 15, 2023 to September 29, 2023 (planned)- 23 -