Integrated Report 2021
Year Ended March 31, 2021 (From April 1, 2020, to March 31, 2021)

TIS INTEC Group Logo
Underlying Concepts
The block formation of the logo evokes the image ofa tightly knit team, powered forward by different
sets of expertise that each member of the TIS INTECGroup brings to the whole. The rounded corners are
an expression of the warmth and feeling that infusesgroupwide efforts to be a partner in pursuingsolutions to client issues.
The logo features our two main corporate colors:“ocean blue” for the new challenges that we areconstantly tackling, and “intelligent gray” for thesolid technological foundations that underpin ourbusiness.

Brand Message
In our brand message, we convey our goal to be a
corporate group that addresses social issues andcreates new value as a mover using digitaltechnology, which is integral to OUR PHILOSOPHY—
the philosophy that guides the TIS INTEC Group.

TIS Inc.
Sumitomo Fudosan Shinjuku Grand Tower,
17-1, Nishi-Shinjuku 8-chome, Shinjuku-ku, Tokyo, 160-0023, JapanFor further information, contact:
Corporate Management Dept., Corporate Planning SBU
Tel: +81-3-5337-4569
E-mail: tis_ir@tis.co.jp
https://www.tis.com/
TIS202109

Securities Code: 3626

What does the TIS INTEC Group do?

Our mission is to draw on leading-edge digital technology and

TIS INTEC Group Philosophy—OUR PHILOSOPHY

know-how to shape completely new concepts and approaches
that solve issues affecting our world.
Guided by this mission, we seek to make society
a more colorful and vibrant place andcreate a tomorrow full of more smiles than yesterday.

Value Creation Process

IT has the power to make the future brighter.

To brightly color the future as a mover
Medium-Term Management Plan

MissionOur 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 new level. For us, “mover” encompasses the TIS INTEC Group and the people at companies under theGroup 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 by providing innovative possibilities and options that appeal to society.

Connection with
Strategies (Story)

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

Financialinformation

Non-financial
information

Comprehensiveness

Scope of reporting: TIS (parent) and TIS INTEC Group
Issued: September 2021

What does the TIS INTEC Group do?
TIS INTEC Group Philosophy—OUR PHILOSOPHY
About the TIS INTEC GroupTIS INTEC Group’s Growth Trajectory
Positioning in the IT Services Market
Consolidated Financial / Non-Financial Highlights

2
3
5
7
9

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

TIS INTEC Group Value Creation Process
Top Message
Sustainability

11
13
19

Medium-Term Management Plan (2021-2023)
Looking Back on Past Medium-Term Management Plans
Outline of Medium-Term Management Plan (2021-2023)[Special Feature] Roundtable Discussion about Sustainability and Business
Sustainability: Case Studies of Our Initiatives
Payment Business Strategies
Global Business Strategies
Business Strategies and Performances by Segment

23
25
33
37
39
41
43

Platform that Supports Value Creation Process of
the Group (ESG section)
E S G Stakeholder Engagement
E Governance
S G[Special Feature] Conversation between Chairman and External Director
Risk Management
Quality Control and Production Innovation
With Employees
E S E
G
S G
With Clients and Business Partners
With Shareholders and Investors
With Communities and Society
the Global Environment
E SFor G

E

S G

47
48
56
59
61
63
66
67
68
69

Corporate Data
Financial Review
Consolidated Financial Summary
Non-Financial Summary
Corporate Data
Evaluations from External Parties
In Issuing the 2021 Integrated Report

E S G

71
73
77
79
81
82

Corporate Data

Find financial information as well as stock andshareholder information.
https://www.tis.com/ir/

E
S G

TIS INTEC Group Value Creation Process

Integrated Report 2021

IR information

CONTENTS

Platform that Supports Value Creation
Process (ESG section)

Editorial Policy
This integrated report touches on important financial and non-financial information while highlighting topics that we want to convey to stakeholders, including
shareholders and investors, so that they have a better understanding of the activities undertaken by the TIS INTEC Group to achieve sustainable improvement incorporate value.
For more information, please refer to the investor and sustainability sections on our website.

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About the TIS INTEC Group

Group Formation (As of March 31, 2021)
What does the TIS INTEC Group do?

The TIS INTEC Group consists of 134 companies, including the parent company, 54 consolidated subsidiaries, and 79 equity method affiliates.

Domestic
Financial IT BusinessIndustrial IT Business

Three Strengths of the TIS INTEC Group1.
2. Dominant presence in payment services domain
3. Flexible management strategies and speedy decision-making thanks to independent status

Service IT Business

OthersSpecified section●INTEC Inc.

●SorunPure■Equity method●Consolidated

Solid management platform

BPO

TIS Inc.

affiliates: 2

subsidiaries: 4

Corporation●Consolidated

subsidiaries: 1

Other group companies●Consolidated●AGREX Inc.

subsidiaries: 3●Consolidated

subsidiaries: 2●QUALICA Inc.
●AJS Inc.
●TIS Solution Link Inc.

■Equity method●Consolidated

affiliate: 2

TIS INTEC Group by the Numbers■Equity method

subsidiaries: 9

affiliates: 2

Overseas
North America

Consolidated
Net Sales(Year ended March 31, 2021)

Consolidated
Operating Income(Year ended March 31, 2021)

Consolidated Operating Income to
Net Sales Ratio(Year ended March 31, 2021)●Sequent

ASEAN and others
ThailandSoftware Inc.
●Consolidated

subsidiary: 1●Consolidated subsidiaries: 11 ■Equity method affiliates: 4Singapore ●Consolidated subsidiary: 1 ■Equity method affiliate: 1
Vietnam ●Consolidated subsidiary: 1
Malaysia ■Equity method affiliates: 2

Consolidated
Equity Ratio

OthersServices IT
Business

Includes a number of ancillary businesses that provide
leasing and other information systems to clients.

Rating（At November 20, 2020）

27.7%

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

Industrial IT
Business

39.4%

Total

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

¥448,383 million

BPO

BPO

7.3%

Financial IT Business¥110,262 million

10.8 %

60.0%

A

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

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

Financial IT
Business(As of March 31, 2021)

Net Sales by Client Sector (Year ended March 31, 2021)(As of March 31, 2021)(TIS + consolidated subsidiaries+ equity method affiliates)

PublicOthersinstitutions 4.2%

7.5%

Health Insurance Organizations✓ Japan Housing Finance Agency

Major clients

21,817

15,000About
companies✓ Asahi Kasei✓ Komatsu✓ Tokyo Gas✓ Recruit

4.2%

7.5%

✓ Local governments✓ Federation of National

Credit card

Total

millionService

26.4%

Percentage of sales fromtop 10 client companies

26.4%

Financialsectors

17.7%¥448,383

Industrial sectors

companies

Other
sectors

Publicsector

35.2%
Banking

6.8%

Insurance

6.7%

Other
financial

4.0%

Assemblybased
Processing- manufacturing
based
10.1%
manufacturing

Financial sectors
Major clients

Corporate Data

134

Number of Clients(Year ended March 31, 2021, domestic)

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.

We have built an extensive but well-balanced client base covering financial sectors, industrial sectors—including manufacturing, services anddistribution—and the public sector.

Major clients

Number of Employees,
Consolidated¥32,702 million

24.6%

Public sector

Number ofGroup Companies

Service IT Business¥124,372 million

Platform that Supports Value Creation
Process (ESG section)(Year ended March 31, 2021)

affiliates: 13

1.0%¥4,340 million¥176,706 million

Consolidated ROE

subsidiaries: 2■Equity method

Philippines ■Equity method affiliates: 3
Indonesia ■Equity method affiliates: 48■Equity method affiliate: 1
India(Sales to outside customers, excludes intersegment sales)

Industrial IT Business(Year ended March 31, 2021)●Consolidated

Net Sales by Business Segment (Year ended March 31, 2021)
Others¥45.7 billion

China●Consolidated subsidiaries: 10■Equity method affiliate: 1●MFEC Public Company Limited

Medium-Term Management Plan

10.2 %¥448.3 billion

Value Creation Process●TIS System Service Inc.

✓ JCB
✓ Mitsubishi UFJ NICOS✓ SMBC Finance Service✓ MUFG Bank
✓ Nippon Life

Distribution
Industrial
sectors

53.1%

7.1%

9.5%

*Client names are short-form.

3

4

What does the TIS INTEC Group do?

TIS INTEC Group’s Growth Trajectory
The 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 to an 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 sustainableimprovement in corporate value.

April 1971＾..n ・••"'し• '..よ ,.' .
．．

m .

●渭

旱

I

April 2008

July 2016

IT Holdings Corporation (ITHD) was created through the management integration of TIS
Inc. and INTEC Holdings, Ltd., to ensure growth through shared use of both companies’
management resources. ITHD listed on the First Section of the Tokyo Stock Exchange.

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

Transition to TIS INTEC GroupNew independent, leading company on the IT services scene• •,·Toyo Information Systems, Co., Ltd. (now, TIS) established.
Began software development services in Osaka.

April 20111991
TIS listed on the First Section of theTokyo Stock Exchange.

SORUN Corporation joined the
ITHD Group.

March 2015

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

May 2017

October 2020

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

MFEC Public Company Limited(Thailand) under consolidation.

Group
Vision2026

12.5%〜13.0%
January 1964 1986

11.5%

INTEC listed on the First
Section of the Tokyo Stock
Exchange.

8.1%

ROE (%)¥448.3 billion

7.4%¥405.6 billion

6.0%

7.0%

Turned AGREX Inc. into subsidiary.

10.3% ¥500.0 billion¥470.0 billion

10.2%

Medium-Term Management Plan

February 2002

Net sales (Billions of yen)
Operating margin (%)

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

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

11.6%

10.8%
9.9%

April 2000

Value Creation Process

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

December 2009

5.9%

4.8%

April 2004

Turned UFIT Co., Ltd., into subsidiary.

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

1.5%¥361.0 billion

Platform that Supports Value Creation
Process (ESG section)

April 2005

¥338.3 billion¥327.4 billion

Fiscal
2009

Fiscal2012
First Medium-Term
Management Plan

Period ofestablishment

Economic
Trend

IT Trend

5● Bubble burst

Mainframe computer

Internet● Lehman shock

Second Medium-Term
Management Plan
Greater sense of unity

Fiscal2018
Third Medium-Term
Management Plan
Pursue portfolio management● Abenomics

Cloud computing

Fiscal Fiscal 2022
2021 (estimates)

Fiscal 2024
(estimates)

Medium-Term Management
Plan (2018–2020)

Medium-Term Management
Plan (2021–2023)

Medium-Term Management
Plan (2024–2026)

Lay foundation for structuraltransformation

Structural transformation by
improving value provided
in DX services

Accelerate measures to realize
Group Vision 2026

Corporate Data

Emphasizing independence

Fiscal2015● Spread of new coronavirus infection

DX (AI, robotics, IoT, big data, Fintech, etc.)6What does the TIS INTEC Group do?

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

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

IT Services Market Size in Japan(Billions of yen)
YOY change
18,000

Promoting cashless
settlement in Japan

Credit cards

Branded debit card-relatedCore system development
results
Domestic market share

About

50%

(On annual transaction volume basis for clients served)

Domestic market share

About

80%

There are about 450 million debit cards
affiliated with an international brand inJapan. Settlement transactions have reachedabout 520 million per year, with an aggregate
value of about ¥2.2 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.

15,000F3 (F Cube)

12,000

CRM implementation

55 of 100 banks(regional banks)

Implementation base includes more than halfof Japan’s regional banks, and share of top
30 banks in terms of total funds stands at
87%. Demand for cloud-based application toachieve connection and strong security overprivate networks expanded to more than 30
of 55 banks introducing F3 into theiroperations.

12,876.2 13,550.7

14,312.0 15,117.9

10
8

5.6%

5.2%

9,000

5.6%

6

4.4%

6,000

4.1% 4
2

3,000

0.7%

0

2020

2021

2022

2023

2024

EDI

System configuration andoperation track record

Aiding new entrants tothe deregulated power market

2,400

TastyQube

EneLink

500

About

identifiers
We enjoy industry’s largest share ofdata-related platform services (EDI, EIA, API).
We respond quickly to internet-based EDI
issues affecting payment card industry data
security standard (PCI DSS) compliance andthe EDI 2024 problem, and have built an
extensive track record in building andoperating industry-oriented EDI platforms.

About

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.
Earning high regard for offering necessaryfunctions for restaurant/shop management
in all-in-one package, this solution has been
applied to about 20% of market share,mainly for restaurants, cafes and pubs.

Contribute to greater efficiency in clients’address management operations

For Federation of
National Health Insurance
Associations

National address master file
“ADDRESS”

Of 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

479.8

448.3

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.
We will continue to promote shift toward
platform services*1 using virtual power plants
and energy management to address issues
characteristic of a low-carbon/decarbonizedsociety.

251.9

NTT
Data

NRI

CTC

TIS

SCSK

UNISYS

NSSOL

Growth Rate of Operating Margin (Pt)
3.5

-1

Note: Market data (market share) is based on TIS research.
*1 Achieve forecasts using IoT technology and AI to
operate businesses that aggregate demand-side
resources. Respond to market transactions.
*2 The scope is National Health Insurance system andmedical care system for elderly in the latter stage of life.

6.0%

NTT
Data

1.5

1.4

NRI

359.9
311.6

320

CTC

9.7%

12
9

45.7

45.8

TIS

8.6%
6

26.7

24.5

SCSK

UNISYS

NSSOL

171.0

161.6

158.9

NSSOL

SCSK

NTT
Data

3
0

310.2
246.8

240

0.9

160

0.4

80

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

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

0

400

3.3

+2

0

9.1%
43.6

11.6%

Total Shareholder Return (%)

+3

95%

10.2%

25

100

+1

15

80.7

75
50

200

Implementation ratio in
non-life insurance sector

More than

100

309.6

300

0

14.7%

125

396.8

18

139.1

-0.8
UNISYS

TIS

CTC

SCSK

NRI

NSSOL

NTT
Data

*The above growth rate indicates the comparison between fiscal 2021 and fiscal
2017 figures.

0

CTC

NRI

TIS

UNISYS

Corporate Data

12 of 47 prefectures

150

550.3

Usage

+4

Contributing to stable insurance
system platform creation

Track record in system implementation/
operation/maintenance2,318.6

Platform that Supports Value Creation
Process (ESG section)

140,000

Operating Income, Operating Margin (Billions of yen)

400

Number of access points* Gartner “Forecast: IT Services, Japan, 2019-2025, 2Q21 Update”
M. Sawai/August 23, 2021: G00756547
End user spending based graph created by TIS based on Gartner
research.
All statements in this report attributable to Gartner represent TIS’s
interpretation of data, research opinion or viewpoints published aspart of a syndicated subscription service by Gartner, Inc., and havenot been reviewed by Gartner. Each Gartner publication speaks asof its original publication date (and not as of the date of thisreport). The opinions expressed in Gartner publications are notrepresentations of fact and are subject to change without notice.

Comparison of Japan’s Leading IT Companies (Year ended March 31, 2021)*1

Highly evaluated as restaurant
sector-specific shop management system

System implementation

0

2025

Net Sales (Billions of yen)Support business DX (optimization, greater
efficiency) in business-to-business transactions

12

15,784.4 16,438.3

Medium-Term Management Plan

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 ¥74 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.

Service provision/systemdevelopment results

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

Value Creation Process

Supporting safe and secure,daily credit card settlement*The above figures are calculated based on 100% of the stock price on March 31,
2016.

*The full company names used in the above graphs (NTT Data, NRI, CTC, SCSK, UNISYS, and NSSOL) are: NTT DATA Corporation, Nomura Research Institute, Ltd., ITOCHU
Techno-Solutions Corporation, SCSK Corporation, Nihon Unisys, Ltd., and NS Solutions Corporation. NTT DATA, CTC, and SCSK amounts are based on the IFRS (International
Financial Reporting Standards).

8

Financial Highlights

Non-Financial Highlights

Net Sales

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

(Millions of yen, %)448,383

405,648 420,769

393,398

What does the TIS INTEC Group do?

Consolidated Financial/Non-Financial Highlights

443,717

Operating Income
Operating Income to Net Sales Ratio

44,839 45,748

38,043
8.1

27,019
6.9

10.2

10.1

9.0

29,411
26,034
20,62016,306

102.61

27,692116.78

Number of Employees at Year-End(Consolidated)

Average Non-scheduled Hours
Worked per Month*2

Percentage of Annual Paid
Leave Taken*2(Person)(Hour)(%)

21,817
19,843

19,877

19,483

19,744

22.64

67.63
20.63

19.87

110.51

19.95
18.35

72.99

75.69

66.26

56.74

Value Creation Process

32,743Net 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

80.48

63.01

Fiscal 2017 Fiscal 2018 Fiscal 2019 Fiscal 2020 Fiscal 2021

Fiscal 2017 Fiscal 2018 Fiscal 2019 Fiscal 2020 Fiscal 2021

Fiscal 2017 Fiscal 2018 Fiscal 2019 Fiscal 2020 Fiscal 2021

Fiscal 2017 Fiscal 2018 Fiscal 2019 Fiscal 2020 Fiscal 2021

Fiscal 2017 Fiscal 2018 Fiscal 2019 Fiscal 2020 Fiscal 2021

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

Free Cash Flow

ROE, ROA(%)

Percentage of female employees
in management positions*2

Number of employees onchildcare leave*2 (Person)
Number of employees on childcare leave
Number of male employees on childcare leave

Greenhouse Gas Emissions*3(Millions of yen)

208,307219,225

(%)

ROE

12.5

36,345238,298 246,330 237,323

11.5
9.9
8.8

22,18464,751

67,716

ROA

75,54979,277

12,132

83,797

15,823

9.3

12.2

10.5

10.8

8.60

463

447

83,76978,12571,09665,867

Fiscal 2017 Fiscal 2018 Fiscal 2019 Fiscal 2020 Fiscal 2021

0041

007

0

Fiscal 2017 Fiscal 2018 Fiscal 2019 Fiscal 2020 Fiscal 2021

0

29

27

700

38

1400
53

80

Fiscal 2017 Fiscal 2018 Fiscal 2019 Fiscal 2020 Fiscal 2021

745

760

2100

976

958

885

Fiscal 2017 Fiscal 2018 Fiscal 2019 Fiscal 2020 Fiscal 2021
* 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

Total Assets, Net Assets, Equity Ratio(Millions of yen, %)Total Assets
Equity Ratio

Net Assets

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

451,072
337,622366,954 370,657

57.8
199,20260.4

382,89962.0

226,298 234,408

63.3
247,957

TIS

90

TOPIX including dividends

310.2
202.1

23.30

19.0

16.6

39.0
22.8

39.8
25.7

452

210.1

162.3

160.8
126.2

114.7
107.7

132.9

114.2

806

45〜49

876

Fiscal 2017 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 above figures are calculated based on fiscal 2016
stock price which is indexed at 100%.

135

758

293

670

1,184

49

63

368

754
1,293

35〜39

107

597
332

757

64
30〜34
25〜29

Fiscal 2017 Fiscal 2018 Fiscal 2019 Fiscal 2020 Fiscal 2021

742

95

50〜54

40〜44

5

〜24
(Age)

1,128
1,457
1,067
Management positions (male)Management positions (female)

660
0

0

0

0

905
683

39
14

*1 The Company executed a stock split, with each share of common
stock split into three shares, effective April 1, 2020. Figures
before fiscal 2020 are presented assuming this stock split was
conducted.
*2 The figures are calculated for the TIS INTEC Group’s sevenprincipal companies (TIS, INTEC, AGREX, QUALICA, AJS, TIS
System Service, and TIS Solution Link).
*3 The figures are calculated for 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 NEOAXIS.

General positions (male)
General positions (female)

10

Corporate Data

13.30
30.5
31.9

42.8
31.9

10
64

60〜
55〜59

35.00

12.00

9

(%)

30.00

60.0
279,429

Fiscal 2017 Fiscal 2018 Fiscal 2019 Fiscal 2020 Fiscal 2021

Employee Composition*2 (As of April 1, 2021) (Person)

Total Shareholder Return

Platform that Supports Value Creation
Process (ESG section)

64,4888.0

0012

Fiscal 2017 Fiscal 2018 Fiscal 2019 Fiscal 2020 Fiscal 2021

445

467

9.4

-4,536
Fiscal 2017 Fiscal 2018 Fiscal 2019 Fiscal 2020 Fiscal 2021

8.17

7.38

Scope1
Scope2

537

9.84

9.17

(Metric tons/MtCO2e)

Medium-Term Management Plan

Fiscal 2017 Fiscal 2018 Fiscal 2019 Fiscal 2020 Fiscal 2021

What does the TIS INTEC Group do?

TIS INTEC Group Value Creation Process
We will balance efforts to realize a sustainable society with efforts to achieve sustainable improvement in corporate value
by leveraging unified Group management.

Management
Philosophy

TIS INTEC Group Philosophy OUR PHILOSOPHY

Mission: To brightly color the future as a mover

P.2

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

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

P.26

Diverse workforce
Number of employees(consolidated basis)(As of March 31, 2021)

21,817

Materiality

P.19

Extensive service menu
Aggregate number of solutions(As of March 31, 2021)

About

TIS INTEC Group Business Activities

Providing optimum, one-stop support across client system
lifecycles and all types of IT-related services
Everything fromsystem operation to
full business process
outsourcing (BPO)

Create a comfortable society
through innovation and joint
activities

500

Broad customer base
Number of clients

Create a safe society
through high-quality
services

15,000companies
in Japan

Solid financial position
Net assets(Year ended March 31, 2021)¥

279.4 billion
Equity ratio

Enhance corporate
governance and earn thetrust of society

Service offering
style
Provide services
that anticipate
client needs

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

IT platform
configuration
services

Research
into and accessto leading-edge
technology

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(As of March 31, 2021)

About

Contractdevelopment style
Provide systems
matched to client
requirements

Helping clients use IT
to raise business value

Service IT
Business

P.43

P.45

(At November 20, 2020)

A/ stable

E

S G

11

E S G

● Sustainable improvement in shareholder value

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

Improve value
exchange throughstakeholder
engagement

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

P.46● Fair, transparent, open competition andappropriate business practices● Responsible procurement

Help solve social
issues throughuse of digitaltechnology

Employees● Provide opportunities for growth and personal

development

Environment

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

Contribute todecarbonized society
and recycling society

Sustainableimprovement instakeholder
engagement

Constantly strive forgovernance that
promotes higher levelof trust from society

Community / Society

P.63

P.48

P.69

etc

Shareholders and Investors

Industrial IT
Business

Platform that supports value creation of the Group¥

Social value

P.44
Financial IT
Business448.3 billion
Operating income ¥ 45.7 billion
10.8 %ROE
Net sales

Corporate Data

Rating (Long-term)

Secure growth
opportunities
fueled by trustand fulfilling
expectations

BPO(Year ended March 31, 2021)

60.0 %

Economic value (Fiscal 2021)

Platform that Supports Value Creation
Process (ESG section)

State-of-the-art
outsourcing network

Outsourcing
services

Consulting
services

P.25

Medium-Term Management Plan

Ample experience andknow-how

Be a Digital Mover 2023

Create a society in which
diverse human resources areengaged and thriveHigh technologicalcapabilities

Value provided to societyManagement strategies/measures for sustainable growth

Medium-Term Management Plan (2021–2023)

Value Creation Process

Management
Resources● Provide systems that support a high-level

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

12

Top Message

As a mover using digitaltechnology, we will work
toward sustainable improvement in the corporate valueof the TIS INTEC Group.

gies, with key financial targets for the final year met a year

the function of governance and started out again

ahead of schedule and structural transformation moving sol-

under a new management structure.”

idly ahead. We expanded the scope of service-style business*2,

Yasushi Okamoto, who assumed the positionof president at TIS in April 2021, talks about
the new management structure, key points of
the new medium-term management plan andhis vision for the future.

which has been tapped as a growth engine, while in core
TIS introduced a new management structure in April 2021.

businesses, hinging especially on customized system configu-

Our two vice-presidents—Masahiko Adachi and Josaku

ration, we welcomed active client interest in solutions to man-

Yanai—join me as representative directors responsible for theagement concerns and requests for proposals built from a

execution of business activities, while Toru Kuwano, who asshared vision of the future to address social issues. However,president before me also held the position of chairman, is now

structural transformation of the TIS INTEC Group will neverin a non-executive role as chairman and will strive to reinforce

end as long as society continues to change. As the second

the corporate governance structure from the perspective ofstep on our path to the future, Medium-Term Management

supervising the business execution that directors perform.

Plan (2021–2023) will be a time for us to enhance our value
chain with improvement in the value provided in digital trans-

than 20,000 employees. Consequently, to lay out plans thatformation—“DX”—services. By engaging in further structural

encompass the Group, the management team comprises nottransformation, we will grow the Group and be better posi-

only myself and the other two representative directors but also

tioned to address social issues.

TIS’ executive officers and senior management at each Group*1 For details on Medium-Term Management Plan (2021–2023), please go to
page 25.
*2 Service-style business: Business that delivers an unspecified number ofaccessible, standardized services to a certain sector/industry instead ofcustomizing configuration and installation of standard formats, including
systems, to individual requirements.

company. Final decisions on various issues, such as how weachieve our future vision, are made through careful consideration by top management, but to reach such decisions
requires a sufficient level of discussion based on diverse perspectives and positions. We duly acknowledge the function of“Buddy power and active communication capabilities aregovernance in reaching the right decisions and recognize theessential.”

connection between governance and building the necessary
One of the key points of Medium-Term Management Plan

Since assuming my position as president in April, I have had(2021–2023) is, as I mentioned above, enhanced frontline

robust conversations and exchanged opinions with the man-activities. This can be interpreted in various ways, such as

agement team, and the new management structure appears

strengthening marketing and consulting capabilities to rein-

to be off to a good start.

force the frontline, which is our point of contact with clients

As a member of senior management, I will do my utmost

and society as a whole. But I’m inclined to say it carries theto see the TIS INTEC Group post continuous growth and attainidea of building “buddy power,” that is, strength as a team.

higher corporate value, underpinned by four key points: uni-

This buddy power—between TIS INTEC Group companies andfied Group management, sustainability management, anclients and, further, to connections with different businessemphasis on profitability and, an extremely vital factor thatpartners and project participants—is vital in our efforts to pro-supports these first three points, enhanced frontline activities.

vide solutions that truly address management issues at clientcompanies as well as emerging social issues. And I believe

13

active communication capabilities are essential to increase“We will promote further structural transformation on

buddy power.

this second step of our journey toward Group Vision
2026.”The TIS INTEC Group’s biggest strength is its ability tobuild systems, backed by years of expertise accumulated as acomposite systems integrator. In business activities to date,

The TIS INTEC Group embarked on a new, three-year medium-

where we build and operate systems tailor-made to client

term management plan*1 in April 2021. Back in May 2017, TIS

requirements, communication tended to be passive. But weannounced Group Vision 2026 and defined the image that thehave to be able to anticipate changes in society and changes

Company wants the Group to project under “Create Exciting

in client needs and then respond flexibly and with a sense of

Future—Utilize advanced technologies and know-how to real-

speed, so it is vital for everyone, from the managerial level,ize business innovation and market creation.” The previousthat is executives—including myself and division managers

medium-term management plan was the first step towardwithin the Group—all the way to frontline employees, toachieving Group Vision 2026, and the Group made steadyenhance respective active communication capabilities.

14

Corporate Data

Joined Toyo Information Systems Co.,
Ltd. (now, TIS Inc.) in 1985. After gaining
experience as network-based systems
engineer and project manager, he wasput in charge of corporate planning at
TIS and at a Group company, providing
insights into ERP and industry-based
operations. Most recently, he was
responsible for the service strategy sector. He assumed the position of President
at TIS in April 2021.

About Medium-Term Management Plan (2021–2023)

Platform that Supports Value Creation
Process (ESG section)

Yasushi Okamoto, President

structure to develop the next generation of corporate leaders.

Medium-Term Management Plan

The TIS INTEC Group is a big organization, with more

Value Creation Processprogress, substantiated in terms of both numbers and strate-“We clarified the execution of business activities andWhat does the TIS INTEC Group do?

About the new management structure

“We will accelerate efforts to help solve social issues

Human Resources Strategy“We will promote DX from a client perspective.”through our business activities.”“We will improve the work environment to create a

Medium-Term Management Plan (2021–2023) highlights

Over the course of Medium-Term Management Plan (2021–

Medium-Term Management Plan (2021–2023) is, of course,

improvement in the value of DX services provided to clients.

2023), we will continue diligent efforts to expand systems

based on an underlying universal concept in the Group’s

DX has various interpretations, but I would define it as a pro-integration activities in the Group’s core segments—Financial

Groupwide, the most valuable management resource we haveapproach to business—the concept of sustainability manage-

cess that cuts through three IT-related layers. The first layer

IT Business, Industrial IT Business and Service IT Business—is without a doubt our people. Boosting employee perfor-

ment*3 hinging on OUR PHILOSOPHY. This—the Group’s basic

comprises two points that link IT solutions and various sys-while positioning service-style businesses, hinging on payment

mance will be the driving force that fuels future growth of thephilosophy—reflects our mission “To brightly color the futuretems, and analyze data. The second layer features three types

services, as a growth engine.

TIS INTEC Group. Toward this end, we will continue to take a

as a mover utilizing digital technology.” “Digital technology”

of IT systems used by clients, namely, systems for back-office

speaks to the Group’s technological capabilities, “mover” con-operations, for front-office operations and for services pro-digital payment settlement platform that draws on expertiseveys active progress, and “brightly color the future” is a refer-

vided to customers. The third layer represents systems byaccumulated in systems integration, and provides services

In the Tokyo area as of 2021, we have a two-point coreence to the availability of choices and options to solve various

industry and business format. A single axis—perhaps payment

needed for all kinds of cashless retail payments. Going for-office system. The business functions of TIS and INTEC havesocial issues.

services—runs through these three layers to make operations

ward, we will focus our energy on establishing a new pillar ofbeen transferred and centralized at the new Toyosu Office, inmore efficient and sophisticated.

PHILOSOPHY and sustainability management.”

more comfortable, free-and-open atmosphere for

As a group, we are developing demand for PAYCIERGE, aemployees.”robust approach to strategic initiatives that support the development of human resources.

Koto-ku, while corporate functions for both companies arein preparation. Also, in the healthtech sector, we have alreadynow executed at the Nishi-Shinjuku Office. Of note, theincrease social value—that is, a high level of trust from soci-embrace of DX from a client perspective. For example, if westarted promoting Healthcare Passport—a platform that pro-Toyosu Office features collaboration rooms, where outside par-ety—as well as economic value—namely, high earnings for

apply our ERP-related business*5 to these three layers, various

vides health information—through a university hospital, andticipants meet with in-house staff on joint projects, and theGroup companies. In turn, this will facilitate a solid contribu-

DX opportunities are possible, such as enhancing financial

we will leverage activities to grow this services into a businessGroup’s advanced technology is accessible everywhere. Ourtion to a sustainable society and continued improvement inanalysis from back-office systems, elevating the level of cus-of national scale. Through local currency verification trials ingoal is to enhance communication synergy between groups incorporate value.

a free-and-open, comfortable working environment.

Fukushima Prefecture and a marketing push to local hospitals

and then drawing on this know-how to create services

using the client base of TIS INTEC Group companies, our cash-

Going forward, legal compliance and heightened security

2023) is “Be a Digital Mover 2023.” We identified four social

matched to industry and format. We would actively andless payment services and efforts to address healthcare issues

will be priorities, of course, and we will create a structure thatissues that we can ameliorate through our business activities.

repeatedly test hypotheses on issues of real concern to our cli-

have the potential to contribute to regional renaissance.

enables employees to pursue their duties with greater freedom

They are financial inclusion, health issues, urban concentra-

ents, sift through the results and make proposals, and takeLooking to the future, we are also directing effort intoof thought. We will shape an ideal organization matched totion/rural decline and low-carbon/decarbonized society. We

responsibility for the process until the issues that concern our

artificial intelligence (AI) and robotics. Currently, we are devel-prevailing conditions, such as a changing business environ-also set a target of ¥50 billion in sales from services that pro-clients have been resolved. By maintaining this approach, we

oping RoboticBase* , which utilizes data analysis and integra-

ment, and constantly improve our human resources system.

vide solutions to social issues*4 and made this target one of

expect to significantly improve the value of the DX services wetion know-how accumulated through systems configuration,

Over the past few years, TIS has made steady progress inour key performance indicators. The selection of priority

provide.

and we are keen to leverage the service robot integration busi-

building a comfortable working environment. Looking ahead,ness hinging on RoboticBase. Expectations are high for the

we will deepen communication by encouraging one-on-one

dynamic use of service robots, which do the work of humans

meetings and other approaches to performance management

across a broad spectrum of service sectors, from security

that link social contribution through business with self-realiza-

patrols to cleaning jobs. This is because service robots are ation goals by employees. Also, with an eye to the future, wesolution to a pressing social issue—the labor shortage caused

are moving ahead with preparations to introduce a new per-by a low birthrate and a greater proportion of seniors in thesonnel evaluation program in the next fiscal year, ending

population. We are making steady progress on projects that

March 31, 2023.

themes and numerical targets exemplifies the deep connection
between sustainability and business management.
*3 For details on sustainability management, please refer to page 19.
*4 Sales from services that provide direct solutions to social issues of concern
to the TIS INTEC Group, which represent a numerical target for managing
business growth as part of strategic domain operations.

*5 ERP (Enterprise Resource Planning): Integrated system for mission-criticaloperations that centrally manages business resources and informationneeded to execute mission-critical business activities.

By engaging in further structural transformation,
we will grow the Group and be better positioned to15

will facilitate practical use of robots in society, including verifi-

For progressive measures at TIS and companies under thecation tests in July 2021 on a conveyance service using auton-Group umbrella to permeate groupwide, we must share best

omous mobile robots under a joint project with the University

practices at a practical level through such structures as aof Aizu in Fukushima Prefecture.

Group human resources liaison committee. At the same time,*6 CreditSaaS: SaaS-type service that maximizes technology and know-how
in mission-critical systems for credit card operations to provide all aspectsof the environment required for the credit card issuing process. Official
name: Credit processing service (https://service.paycierge.com/solution/
credit-processing-service/) (Japanese only)*7 RoboticBase: A platform for realizing integrated control of multiple service
robots and supporting communication among robots, sensor-equippedenvironments and people.

the executive team, which includes me, will actively pursue
opinion exchange through such opportunities as the Group
Presidents’ Committee. These approaches will enhance humanresources programs on a groupwide basis and create a productive and comfortable work environment.

16

Corporate Data

address social issues.

7

Platform that Supports Value Creation
Process (ESG section)

tomer support using data analysis from front-office systems,

Our slogan for Medium-Term Management Plan (2021–

Medium-Term Management Plan

revenue with the debut of CreditSaaS* , which is currently still

Anyway, ultimately, we have to promote the necessary

Through sustainability management, the TIS INTEC Groupwill improve value exchange with stakeholders, which will

6

Value Creation Process

Key Points of Medium-Term Management Plan

“The medium-term management plan is built upon OUR

What does the TIS INTEC Group do?

Sustainability Management

“We will work toward the creation of a more pleasantbillion over three years.”(comfortable and convenient) society.”

The TIS INTEC Group is engaged in structural transformation, a

Since my appointment to the position of president wasprocess that will fuel further growth. Robust investment isdecided on, I have set up as many opportunities as possible toindispensable to this process. Therefore, we have earmarked

convey my thoughts on business and my picture of the future¥70 billion for M&A (capital contributions) over the three years

directly to directors and employees throughout the Group. I

of Medium-Term Management Plan (2021–2023) along withwanted to put into practice the idea of independence andinvestment of ¥30 billion to reinforce in-house capabilities, forautonomy.

a total of ¥100 billion.

The future TIS INTEC Group that I see is one where wedemonstrate our composite strength as a systems integrator

ogy by strengthening our alliances with awesome partners andand always work to find solutions to social issues and thereby

accelerating business growth. In particular, mutual under-

contribute to the realization of a happy society. I may be

standing is indispensable to alliances on the channel front,

repeating myself but this picture of the future will be built on

keeping in mind the possibility of that company becoming part

free and open discussion and communication within theof the TIS INTEC Group in the future. For this reason, we startGroup and also with external experts and associates. This

off with a minor capital contribution and business alliance,

extends to our stakeholders as well. To fulfill our role as a pub-

deepen the relationship over time and, based on this, if we see

lic entity, we must present opportunities to talk about thethe potential for reciprocal, long-term development of our

future that we shape with a diverse group of stakeholders freerelationship, we increase our equity stake. The key factor inof bias. Guided by OUR PHILOSOPHY, we will strive to achieve

this decision is whether or not management at the target

sustainable improvement in the corporate value of the Group

company embraces the concepts of OUR PHILOSOPHY in theand enhance value exchange with our stakeholders as a moversame way we do.

utilizing digital technology. On this journey, I ask for yourTo reinforce in-house capabilities, our emphasis will be on

continued support and cooperation.

software investment in growth domains, such as payment andhealthtech service-type businesses, R&D investment, particularly R&D in AI, robotics and molecular computers, in addition
to human resources investment to enhance the skills of our

Josaku Yanai, Representative Director, Executive Vice-President
We are right now in the midst of great change. Key factors include environmental issues, demographic changes, progressin digital technology, and a major reimagining of workstyles, kindled by the COVID-19 pandemic, and against this backdrop, companies in many industries have been rethinking—transforming—the way they do business. Many of our clientssaw an urgent need to revamp business processes and business models under the new normal, and we saw an increase inrequests for advice on what to do.
In this business climate, the TIS INTEC Group naturally strives to fulfill its mission to support key social infrastructure
through daily business activities. But efforts do not stop there. By providing new value to clients and to society, the Groupwill firmly meet its obligation to contribute to a comfortable society.
The themes that we must address are diverse, from building trust and a track record in the DX domain, based on
accumulated system integration IT configuration capabilities, as well as further progress in service-style business in thepayment settlement area, which is our biggest strength, and wider value chain connections on a global scale. These
themes are vital to the achievement of our mission to contribute to the success of our clients and the creation of a better
society as a mover using digital technology.

We will establish a solid management platform that supports business growth and forge ahead as a sustainable corporate group.

Masahiko Adachi, Representative Director, Executive Vice-President
Medium-Term Management Plan

Our M&A policy seeks to build on channels and technol-

We will leverage high-added-value business and accelerate solutions to social issues through our business activities.

Value Creation Process

To Our Stakeholders“We will undertake growth investment of about ¥100

What does the TIS INTEC Group do?

Growth Investment

With the TIS INTEC Group pushing ahead on structural transformation to achieve Group Vision 2026, it is vital to maintainrobust prior investment that connects new businesses and other pursuits to future growth. Improving profitability andfaithfully meeting expectations on return to shareholders are also important, and it goes without saying that a much more
resilient financial position is indispensable to these objectives. Going forward, we will continue to promote management
practices from a capital cost perspective, covering such issues as investment management and risk control. In addition, we
will strive for harmony with society, from a long-term perspective, with initiatives targeting the environment, climatechange and human rights—urgent themes for society overall—and we will realize a higher level of management thatmeets the demands of society. Through these efforts, we will solidly meet the rising expectations placed upon a corporategroup that embodies sustainability.

people.
Platform that Supports Value Creation
Process (ESG section)

Fiscal 2022 Group Management Direction
1. Leverage initiatives to improve corporate value and value provided to society through sustainability management
2. Reinforce efforts to make services more high-value-added through productivity innovation and improvement invalue provided in DX services
3. Firmly maintain financial health while emphasizing growth investment to enhance ability to provide DX value
4. Leverage growth strategy seeking to become top-class IT group in ASEAN regions and cement strong governance5. Constantly boost employee motivation and develop human resources brimming with diversity to fuel DX shift

Corporate Data

Captions
Yasushi Okamoto, President (center)
Masahiko Adachi, Representative Director,
Executive Vice-President (left)
Josaku Yanai, Representative Director,
Executive Vice-President (right)

17

18

Sustainability

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

TIS INTEC Group Philosophy: OUR PHILOSOPHY
Mission: To brightly color the future as a mover

The Group will accelerate creating shared value (CSV) management, which integrates corporate activities with action to
improve social sustainability, by placing the expansion of services that contribute to the resolution of social issues at the coreof its business growth strategy and addressing social issues from a global perspective.

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

Achieving sustainability

Markets

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

Promoting a healthy society
Expansion of business/
capturing opportunities

2. Create a comfortable society through innovation and joint activities

Dialogue Financial inclusion  Urban concentration/rural decline

Enhanced management geared to social demands

Improve value exchangewith stakeholders

 Contribute to recycling society Achieve sustainable improvement in stakeholder engagement

 Low-carbon/decarbonized society  Health concerns

 Constantly pursue governance that elicits higher level of trust from society

Contribute to sustainable society

Sustainable improvement in corporate value

2018–2020: Laying solid foundations
Building a platform Studying the value creation process Setting materiality
 Organizing policies & regulations

2021–2023: Growth
Expansion to the Group value chain Fostering the means to resolve social
issues Strengthening co-creation withGroup companies Strengthening co-creation with the
supply chain

2024–: Further development
Establishing a presence as asustainability leader Creating businesses that balance
economic and social value

Collaboration with initiatives
Notably, the Group signed on to the U.N. Global Compact and was registered as a participant as of July19, 2018.
Acting in accordance with the 10 principles in the four areas of human rights, labor, theenvironment, and anti-corruption set forth in the Compact, we encourage every employee to get
involved in fulfilling our corporate social responsibilities and promote activities that support sustainablesocial development.

19

Trust

Sustainableearnings

Select long-term
issues and businessthemesFormulate interim
targets andstrategy

Fiscal 2023

Promotecontrol andmotivation

Fiscal 2024

Demonstrateperformance toachieve goals

New social issues
and target
proposals

Enhancement of management in response to social needs
 Advancement of management as a unified GroupWe aim to improve the quality of management by introducing data-driven management methods for non-financial matters.
 We will establish a quantitative management system for non-financial information as well as financial capital to efficiently link all thecapital of the Group to earnings.
 We will enhance motivation for environment, social and governance (ESG) promotion by introducing KPI’s for non-financial metrics in theGroup’s organizational assessment.
 Integration of sustainability promotion and management

The Medium-Term Management Plan (2021–2023) will focus on the following three areas.

Respect forhuman rights

Climate change

Co-creation withlocal communities

Reporting on the TIS INTEC Group Human Rights Policy

Corporate Data

The Group participates in various initiatives aimed at promoting sustainability

Social impact

Platform that Supports Value Creation
Process (ESG section)

 Changes in the Group’s sustainability promotion activities

ServiceMedium-Term Management Plan

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

4. Enhance corporate governance and earn the trust of society

Risks of notengaging

Achieving asustainable
society

Resolving social issues through the Group’s business activities
Fiscal 2022

3. Create a safe society through high-quality services

Fostering sound markets

Value Creation Process

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

Basic Policy on Corporate Sustainability
Materiality (Priority issues)

What does the TIS INTEC Group do?

Seeking to deepen sustainability management

As part of the Group’s work to identify and rectify negative changes in society, we formulated and released the TIS INTEC Group
Human Rights Policy in May 2021 to promote initiatives in line with the United Nations’ Guiding Principles on Business and Human
Rights. (https://www.tis.com/group/sustainability/social/human_rights/)
In accordance with this policy, the Group will conduct human rights due diligence and report on progress in its Integrated Reportand on the Group’s website. It will also engage in broad dialogue with stakeholders to contribute to the realization of people’s
happiness and a sustainable society in the future.

20

Supervision Identifying Materiality

Assess priority and categorize/consolidate

Recognize issues

Discussion, reports

President

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

Reports

Corporate Sustainability Committee

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

Materiality identified

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

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

Assess importance to theGroup

Planning,
execution

The Group’s basic philosophy,
strategies

To strengthen measures for corporate sustainability, TIS identified materiality as a key issue for the Group in fiscal 2019, andclarified priority themes where efforts would be focused, considering stakeholders’ expectations of us, our impact on society, and
the Group’s strength.
The Group will promote materiality measures and contribute to the solution of social issues and achievements of the related
United Nations’ Sustainable Development Goals (SDGs) through our corporate and business activities.

Importance of Materiality Assessment
Promote safe, convenient social foundation that supports people and society
Safeguard personal information

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

Please visit the following page for details of our activities related to materiality:
https://www.tis.com/group/sustainability/materiality/

through high-quality
services

4. Enhance corporate

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

Promote diversity
Compliance

Human resource development andtraining emphasizing self-fulfillment

Expert Feedback (Dialogue with experts)“The Group is responding in a well-balanced manner
to stakeholders’ expectation. We validate that theprocess they use to identify materiality is logical.”“Areas in which we witnessed application of moresophisticated measures was in the continual
examination of society both retrospectively and froma future long-term perspective.”
Please visit the following page for details of dialogue with experts:
https://www.tis.com/group/sustainability/materiality/#dia

Risk management
Corporate governanceImportance to TIS INTEC Group 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 expectedto participate as vital partners, contributing to the SDGs through their respective corebusinesses.

Corporate Data

4. Enhance corporate governance and earn the trust ofsocietyj. Corporate governancek. Compliancel. Risk management

3. Create a safe society

Platform that Supports Value Creation
Process (ESG section)

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

Importance to stakeholders

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

References: Relationship with SDGs

society through innovationand joint activities

governance and earn thetrust of society

Information security

Materiality

Dialogue withexperts

2. Create a comfortable

Medium-Term Management Plan

 Materiality (key issues) for the TIS INTEC Group

Discussion within the Group

diverse human resources
are engaged and thrive

Materiality

Assess importance to stakeholders

Deliberation, reports

Value Creation Process

Direction, supervision

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

1. Create a society in whichSocial issues

Divisions, departments, group companies

21

EvaluateappropriatenessPresident (Committee chairperson), directors responsible forcorporate sustainability, full time directors, full-time Audit &Supervisory Board members, managers of main relevant division,presidents of key operating subsidiaries

Materiality matrix

We have established a management structure
centered on the Corporate Sustainability
Committee, which is chaired by the President,
to promote corporate sustainability activities
throughout the Group.
The Committee is responsible for planningand promoting the Group’s sustainability activities
and materiality (human resource management,
stakeholder engagement, environmental
conservation, human rights, quality management,
corporate governance and related issues). The
Corporate Communications Office was establishedto serve as the secretariat to ensure smooth
operation.

Board of Directors (Directors)

What does the TIS INTEC Group do?

 Sustainability promotion system

22

Looking Back on Past Medium-Term Management Plans
What does the TIS INTEC Group do?

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

Theme

Key indicators

Fiscal 2016–Fiscal 2018

Fiscal 2019 – Fiscal 2021

Brave Steps 2014

Beyond Borders 2017

Transformation to 2020

Greater sense of solidarity

Portfolio management

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

Achieve structural transformation as a unified corporate groupand lead efforts to provide solutions to social issues● Top-line emphasis● as One Company● Enterprising and bold

Net Sales● Profit emphasis● IT brain● Portfolio management⇒ Embrace reforms. Expect full-fledged
V-shaped recovery to get back on
growth trajectory.

¥430.0 billion

Fiscal 2021
Medium-Term Management
Plan Estimate⇒ Set ROE as key performance indicatorand strive for improved corporate value
and sustainable growthFiscal 2015
Actual¥400 billion¥405.6 billion

Operating income¥25 billion¥21.1 billion¥30 billion¥32.7 billion

Operating margin

Above 7%

5.9%

7.5%

8.1%

7.5%

6.0%

8.0%

9.9%

Strive for payout ratio of 30%

Strive for total return ratio of 35%

Payout ratio

25.6% in fiscal 2015

16.6% in fiscal 2018

Total return ratio

30.4% in fiscal 201530.5% in fiscal 2018

Reference: Average annual growth rate over three years
+3.3%

+4.0%

Operating income+10.6%+15.7%● Integrate/centralize shared functions with the Group⇒ Make office procedures more efficient, enhance capital and asset
efficiency, raise Group profile, and cultivate corporate culture withsense of solidarity● Realize higher level of administrative management⇒ Promote management with profit emphasis, work to enhanceaccounting, taxation, finance reporting, and implement Group
personnel strategies

Key reflections

12.0%

Compared to fiscal 2018

Comparing to fiscal 2018

Basic Policy

10.2%
Fiscal 2021
Actual＋2.1 pt

Strategic Domain Ratio

10.8%
Fiscal 2021
Actual51%

50%

Fiscal 2021
Medium-Term Management
Plan Estimate＋0.9 pt

Fiscal 2021
ActualCompared to fiscal 2018

* Hit 12.5% in fiscal 2020, exceeding estimate

Overview of Measures＋16 ptReview and Acknowledgment of Issues

SustainableprofitgrowthCreated structure with sustainability emphasis, raised ESG status (selection
to FTSE)
Firmly established activities to underpin Group productivity and innovationand eliminate losses
Increased management efficiency through reduction in cross-shareholdings,
improved ROE and reached return-to-shareholders target

Balance profit growth and return to shareholders
Shape sustainability management into mechanism for realizing
solutions to social issues through business activities
Pursue more sustainable profit growth by enhancing portfolio
management

Emphasison employee
selffulfillment

Established TIS INTEC Group basic philosophy OUR PHILOSOPHY, tookrobust approach to instill concept
Drafted personnel manifesto, promoted measures to motivate employees
Improved recognition through aggressive brand investment, had positive
impact on employee engagement as wellPursue unified Group management based on TIS INTEC Group basic
philosophy
Realize new workstyles and improve brand image
Enhance efforts to improve employee engagement through investment
in education and measures aimed at enhancing the skills of humanresources

Concentrate oncore businesses

Strengthened initiatives to promote strategic domain restructuring
Improved profitability through enhancement and reform, wider offshore
activities and order profitability management
Pursued selective R&D investment to underpin structural transformation ofbusinesses
Accelerated venture investment through CVC program

Boost profitability through further improvement in productivity
Urgent need to develop another growth engine besides payment
services
Against keen interest in DX from clients, must strive to reinforce ability
to provide DX value

Shift to priorinvestment
style ofbusinessdevelopment

Heightened approach to upfront investment, particularly into payment
service domain and global operations
Actively promoted investment in human resources and measures toimprove brand value
Introduced management indicators, such as ROIC, to strengthen
investment discipline

Drive profit from Service IT Business higher by strengthening business,hinging on payment services
Boost investment and service management to higher level

Accelerated investment based on growth strategies to build a top-class IT
corporate group in ASEAN region
Turned MFEC, a leading provider of IT solutions to enterprises in Thailand,
into consolidated subsidiary

Manifest successes faster, such as creation and expansion of IOS and FCB
operations, through joint efforts with investment targets
Reinforce governance/management of expanding global business

Expandglobalbusiness

Moved forward on strategic domain restructuring and posted profit growth, but only halfway toward monetizing Service
IT Business and achieving qualitative structural transformation through new pillars of business.

Knowledge of TV
commercial

74%

Group recognition(Among business people)
TIS survey on February 2021

51%

(Up 32 percentage points
after television commercial)

IT industry new graduate job seekers

Company ranking by
popularity
Overall: No.13

Independent: No.1

24

Corporate Data

Brand activities launched in the second half of fiscal 2020 emphasized approaches to boost brand recognition through television commercials andother media formats. Our efforts have generated positive results. Going forward, we will strive to become a company—and by extension, a
corporate group—that all stakeholders look to first, and we will implement strategies to boost our brand profile.

(Among business people)
TIS survey on February 2021

23

11.8%

Average annual growth rate over＋three years

Fiscal 2021
Medium-Term Management
Plan Estimate● Pushed ahead on building unique and obvious strengths (growth ● Expansion in value-added creation style services, along withengines) and linking strengths, as well as concentrating capabiliassignment solution style services geared to client requests,
ties into core businesses. Achieved net sales target but failed tofueled growth. Shift to market-cultivating style services requires
hit operating income target as issues continued to sideline efforts
faster responses. Profitability steadily improving, and efforts toto prevent projects from becoming unprofitable and efforts tocontrol unprofitable projects showing results. But low-levelboost productivity.
control still required.
● Progress on approaches to achieve evolution in services and● Transition to operating holding company structure and steadyglobalize operations fueled expansion in scope of business activiimplementation of measures, including business realignment,ties but not enough to create business with revenue-source
office consolidation and improved capital efficiency, to achieve
potential.
overall optimization of the Group. Made progress in cultivating● Realized certain degree of success with measures to restructure
corporate culture with sense of solidarity through design of single
operations and reinforce cooperation across business lines. Thislogo and creation of Group vision.
included turning AGREX Inc. into wholly owned subsidiary. Also ● To achieve sustainable growth and improved corporate value,
unified Group brand to underscore integrated group manageprioritized structural transformation and establishment ofment, but more extensive approach needed for overall optimizaresilient management platform through additional reforms withintion.
the Group in anticipation of major changes in society.

Fiscal 2021
Medium-Term Management
Plan Estimate

Platform that Supports Value Creation
Process (ESG section)

Net sales

10.0%

Fiscal 2021
ActualMedium-Term Management Plan

¥361 billion

Operating Margin¥45.7 billion

ROE
Actual¥350 billion

Major priorities in groupmanagement

Fiscal 2021
Medium-Term Management
Plan Estimate

3.4%

Estimates● Promote new Group formation● Cultivate shared spirit that permeates groupwide● Lay resilient financial base to facilitate prior investment activity● Streamline and centralize corporate functions● Reinforce product brands and corporate image¥43.0 billion

Fiscal 2021
ActualAverage annual growth rate over＋three years

Net sales

Policy on return toshareholders¥448.3 billion

Fiscal 2018

Estimates

ROE

Operating Income

Value Creation Process

Basic Concept/
Medium-Term
Management Direction

Fiscal 2013–Fiscal 2015

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

Be a Digital Mover 2023

What does the TIS INTEC Group do?

Medium-Term Management Plan (2021–2023) is the second step on our journey to reach Group Vision 2026.
This three-year period will be a time for us to enhance our value chain by improving the value provided in
DX services and for promoting further structural transformation. Our goal is to grow the Group and bebetter positioned to address social issues.

Group Vision 2026
Taking advantage of the shift to an operating holding company in July 2016, TIS drafted a new group vision that imagined theGroup in 2026 to combine the capabilities of Group executives and employees alike and take corporate value to new heights.
“Create Exciting Future” embodies the corporate ideal we see for ourselves in 2026 as we work toward innovation inbusiness using leading-edge technology and know-how and create new markets. We want clients to think of us as a strategic
partner, and we will always embrace reform in existing industries and markets and be a market-creating innovator.

Landmark changes to business landscape2026 Corporate Ideal“Create Exciting Future”● With heightened importance of DX in new normal world, presence of consulting firms and other providers of DX services is

Value Creation Process

Utilize advanced technologies and know-how torealize business innovation and market creation

increasing, fueling intense competition.

● Global platformers and enterprise SaaS companies are particularly active, as well, prompting possibility that market for contract* Strategic Domains: Four business domains
will form the core of the TIS INTEC Group by
2026, as described in Group Vision 2026.

development will shrink in long term.

● ESG investment rapidly expanding, and importance of sustainability management based on long-term strategies is gaining ground

2018–20202021–2023

2024–2026

Medium-Term Management Plan

Be a Digital Mover 2023

Transformation to 2020

Accelerate structural transformation by
improving value provided in DX services

Lay foundation for structuraltransformation(Establish and extend strategic domains)

Robust investment into services that
help solve social issues to fuel longterm growth

Financial inclusion

Blockchain

Health concerns

5G

Robotics

XR
Low-carbon/
Quantum
Computer decarbonized society

Data
Analytics

Virtuous cycle of value created jointly by society and employees
Solving social issues through joint creation with stakeholders

functioning as pillar of profit● Business Function Services: Recognized as Group

forte, driver of growth● Frontier Market Creation Business: Driver of

explosive growth through creative destruction ofprevailing walls

Business Domains in 2016

Group Vision 2026

Strategic Domains in 2026

Business
Creator

Key Performance Indicators
Urban concentration,
rural decline

base and a technology/know-how base

● IT Offering Services: Prior-investment businessNet sales¥500 billion
Operating income/Operating margin

Marketable
services

Frontier Market
Creation BusinessNetwork
infrastructureservices
BPO services
IT system
configuration andoperation

Specific
responses

IT domains

Exceeding10%

Strategic
domainratio(net sales
basis)IT Offering Services

Business Function
Services

Strategic Partnership
Business

Provide IT
engineeringexpertise¥58 billion /11.6%
EPS growth CAGR

Evolution ofstrategic
domains

Service domains

Fiscal 2018

Fiscal 2021

35%

50%

IT domains

Platform that Supports Value Creation
Process (ESG section)

AI

Digitaltechnology

Medium-Term Management Plan
to realize

Supportingclients’ businesses

Basic Policy

having an appealing presence, always trusted as a
strategic partner● Always embrace reform in existing industries and markets,and earn reputation as market-creating innovator● Transcend the limits of an IT enterprise; be a leading
company with innovative market concepts● Proudly demonstrate high profile and showcase solid
standing as a corporate group chosen by clients, society,employees—everyone● Strategic Partnership Business: Lay both a revenue

Medium-Term Management Plan

Medium-Term Management Plan

Strategic Domains*

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

Service domains

Above

70%

Strategic domain ratio
Improvevalue provided
by DX

Imaginationthattransforms
society

Expandinvestment
to generate
strengths

Powerthat realizes
ideas

Deepen andextend global
operations

Globalbusiness
deployment
capability

51% 60%[¥228.5 billion¥300 billion]

Sales of societal issue solution services

Diversification of human resources, sharper skills¥38 billion＋¥50 billion*

Growth investment

By promoting enhanced frontline strengths based on IT configuration
capabilities created jointly with society and clients, we will help solve social
issues using digital technology and realize outstanding growth towardrealization of Group Value 2026.

25

About ¥100 billion

Business Function Service (BFS)

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

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

IT Offering Service (IOS)

Frontier Market Creation Business (FCB)

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

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

Corporate Data

Diverse employees active as professionals

Strategic Partnership Business (SPB)* Sales from services that provide solutions to social issuesof concern to TIS INTEC Group. Manage business growth
as part of strategic domain operations.

26

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

Expandinvestment
to generate
strengths

DX Business Strategy

Our mission is to fill the future with vibrant colors as a mover using digital technology. To give shape to this mission, we
will provide integrated value covering everything from strategic proposals that address issues faced by clients andsociety as they embrace digital technology to implementation of the required solutions.

Business Strategy for Service IT BusinessIn addition to growth in the payment service domain, we will selectively allocate management resources to areas offocus and strive to improve profitability across service operations through enhanced management practices.
Service IT Business Numerical Targets
Net Sales(Billions of yen)

Integration

DX consulting

Services

BPO

Group strengths
Payment

End-to-end integration, fromstrategy to DX utilization andimplementation
Bimodal response

ERP

Services
BPO

Integration
IT professionalsocietal issue
solution service*DX
consulting

Increase number ofconsultants and leverage
strategic training

Fiscal 2021

Lift value chain, starting withenhanced DX consulting

Fiscal 2024
Net Sales(Fiscal 2021→Fiscal 2024)

Launch creditSaaS and turn a profit as quickly as possible
Expand scope of business from frontline areas and new domain
services
Promote medium- to long-term growth strategies for services thatprovide solutions to social issues* Services that directly address financial inclusion, health concerns,
low-carbon/decarbonization and urban concentration/rural decline

¥28.5
¥34
billion → billion¥38¥50
billion → billion

DC/Cloud/NW

Strengthen business activities, especially related to cloud andsecurity, and provide vertically integrated value¥42 → ¥49
billionbillion

ERP

Build base of clients with potential for SPB opportunities byreinforcing frontline presence (client contact point)¥22.5 → ¥28
billionbillionMedium-Term Management Plan

Complement
strengths/technology

Fiscal 2024
Main Services

Payment

10.3%
17.0

8.6

Fiscal 2021
Strengthen upstream
business process
reengineering (BPR)
proposal capabilities
Boost added value throughdata utilization/application

6.3%

165.0

136.9
Accelerate shift toward DX
through service introduction

Operating Income(Billions of yen)

Value Creation Process

IT professional

What does the TIS INTEC Group do?

Improve value
provided by DX

Related page: ”Activities under Medium-Term Management Plan, Payment Business Strategies" P.39

To improve the value provided in DX services, we will encourage joint efforts with stakeholders andpromote stronger DX consulting expertise.

Financial inclusion

Health concerns

Low-carbon/
decarbonized society

Technology

UX

Data
Analytics

IT infrastructure
innovation

Agile

Business

Global Business Scale[Consolidated]¥100 billion

ASEAN × Channel

Go beyond time and place restrictions, connect people, things and information,and create new value through business, process and IT infrastructure innovation.
Work process
innovation

We will strengthen our alliances with partners in each ASEAN country and utilize leading-edge technologies as well as
disruptive technologies to expand demand for IT offering services and frontier creation business.

Urban concentration/
rural decline

Improve value provided in DX services

Businessinnovation

Global Business Strategy

Leverage investment to build ASEAN
business base in key countries,
focusing on Thailand and Indonesia
and then Malaysia, Vietnam and thePhilippines
Extend partnership net, withemphasis on areas of strength,
namely, banking and finance andpayment services

IT Delivery
BPO

Platform that Supports Value Creation
Process (ESG section)Will use digital technology to realize solutions to social issues

Deepen andextend global
operations¥61.5
billion¥75.0 Become top-classbillion IT corporate groupin ASEAN region

Profit margin
before depreciation
Target 10%

FY2019FY2023Global × X-Tech
Robust investment into companies
with world-leading technology andservices fine-tuned to area needs
Seek to extend target area service
lineup, especially HRTech,
HealthTech and MobilityTech, tocomplement FinTech

FY2026* Sum of revenues generated by ASEAN subsidiaries andaffiliates accounted for by equity method

Global × Emerging Tech
Corporate Data

Promote joint activities with leading companies, universities and government agencies on R&D into disruptive
technologies from a medium- to long-term perspective

Encourage joint efforts with stakeholders

Promote stronger DX consulting expertise

Encourage joint efforts with clients(including establishment of joint ventureswith clients)
Leverage partner alliances

Deepen pool of DX consultants(From about 250 to more than 500)
Continue to strengthen data analytics/UX
and other designs

Enhance IT delivery
Constantly improve productivity
Raise added value of services drawing on
skills of IT professionals
Reinforce agile-style management

Invest in five disruptive technologies: robotics/IoT, blockchain, data analytics, neural network and quantum
computingStrengthen human resources base, which will underpin wider global operations and realize good governance(Attract and train professional global workforce)
Related page: ”Activities under Medium-Term Management Plan, Global Business Strategies" P.41

27

28

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

Virtuous cycleof valuecreated jointly
by society andemployees

Human Resources Strategy

We will promote a human resources strategy focused on diversification of the corporate population and efforts to
sharpen the skills of individuals to achieve continuous improvement in value exchange between employees andcompany.
Overall Picture of Ideal Human Resources Strategy

Initiatives Designed to Realize Strategy

Employees

Company
Growth opportunities/
improved market value/compensation

Investin human
resources

Robust investment in
human resources

Invest ineducation¥8 billion

Sharpen/enhance skillsof human
resources

Improve higher added value human resources
Enhance skills of DX consultants
Constantly enhance scope of human resources toinclude global personnel, account managers andservice owners

Personnel DX

Raise
added value

Personnel
growthStrive for higher value
added, and raise ratio
on per-person basis

Switch to high-value-added
businesses/procedures
Improve employee experience

Enhance human resources portfolio management
by digitizing information on personnel
Help put employees on the right career path

Centralize Back-Office Operations and Promote Higher Added Value

Applying DX to In-House Operations

TIS INTEC Group

Business process innovation

Other Group
companies
Provide high-value-added back-office functions that
support successful business strategies
TIS

INTEC

Management planningManagement planningManagement planning●● planning●● planning●● planning

Design personnel system based on expectedrole/position, employee career orientation,
appropriateness to assignment, and capabilities
Introduce compensation/evaluation system thatprovides motivation and supports medium- tolong-term initiatives

Moreengagement

Shared services

Digital workspace

Wages/work

Final accounts/reporting

Systems

・・・

・・・

・・・

Sustainable engagement

Continuous business growth

Ideal

Top talent

DX consultantsCore business personnel

Promote structural transformation byenhancing skills of human resources
Accelerate structural transformation toachieve Group Vision 2026

Boost value of DX services
provided to clients
Shift away from existing businesses andlead society’s DX transformation

Strong business foundation/
financial growth
Drive growth of the Group by sharpening
the competitive edge of businesses

Implement human resources strategies integrating management, business and personnel
Business strategies

Link Group’s business portfolio with human resources portfolio
Visualize human resources (analysis, GAP clarification) and strategies to attract personnel
Hiring strategies

Training strategies

Deployment strategies

Recruit necessary personnel
Establish groupwide
standard on hiring

Provide diverse work
experience/growth
opportunities
Career frame maintenance

Identify capable personnel
early onExecute strategic rotation

Evaluation andcompensation/D&I
Offers compensationcommensurate with activities
Create corporate
culture that enables all
employees to thrive

Related page: ”Engagement with Employees" P.63

In addition to wider application of DX to in-house operations under the G20 project to enhance head
office functions, we will strive to cut indirect costs groupwide by more than ¥1.5 billion(compared with fiscal 2021 level).

As a social system driving the pursuit of happiness, we aim to represent sustainability and contribute to the realization of a sustainable society through our business activities.

Address social issues through business activities
Promote growth strategies for services addressing four social issues that we see as needing long-term approach
Sales from services that provide solutions to social issues to exceed ¥50 billion

Environment P.69

Social

P.63

Contribute to decarbonized society and recycling society

Sustainable improvement in stakeholder engagement

Reinforce response toward climate change/carbon neutral status, based on
environment-oriented long-term targets
Cut greenhouse gas emissions by 3% from fiscal 2020 level
Push renewable energy utilization rate at key data centers above 10%
Present information based on Task Force on Climate-related Financial
Disclosures guidelines and acquire approval under Science Based targets Initiative
Pinpoint current levels of water and waste, then set reduction targets and work
toward goals

Improve stakeholder satisfaction, and raise value exchange
Employee satisfaction ratio
62%
Customer/service satisfaction ratio
60%
Business partner satisfaction ratio
81%
Strengthen initiatives related to human rights (such as defining humanrights policy)

Governance P.48

Corporate Data

Strategies to enhanceskills of human resources

Management strategies

Use office robots for unmanned reception desk
operations
Introduce virtual office
Improve Group portal and social networking sites

Platform that Supports Value Creation
Process (ESG section)

We aim to shift our focus toward businesses that offer greater value to clients and will draft strategies that integratemanagement, business and human resources.
We will look at our future business portfolio to ascertain the status of top talent, DX consultants and core business personnel, specifically, toconfirm that we have the right number of people needed to meet anticipated market demand. If necessary, we will seek top talent from outside
the Group, encourage human resources with excellent capabilities to consider a career shift through training and reassignment, and leverage
multifaceted strategies to maximize potential and raise the caliber of human resources.

Shift more toward paperless in-house operations
Promote wider automation of in-house operations,embrace digital responses
Make operations more efficient and high-techthrough application and usage of data

Provide shared back-office functions that arehigh quality and of optimum value

Shared mission critical systems■ Improve Value Exchange between Employees and Company—Sharpen Skills and Drive Expertise Higher

29

We will allocate management resources to specific business activities that will address the four social issues where
our expertise can facilitate solutions. We will complement this with efforts to enhance ESG initiatives.

Medium-Term Management Plan

Virtuous cycle of value
exchange between
employees andcompany

Diversity &Inclusion

Create environment and corporate culture thatenables employees with diverse backgrounds tothrivePromote next-generation workstyles for the
post-COVID era

Strategy to Enhance of Management Capabilities

Value Creation Process

Provide value, support successas professionals

What does the TIS INTEC Group do?

Diversificationof human
resources,
sharper skills

Constantly pursue level of corporate governance that elicits greater trust from society
Build management system hinging on non-financial, quantitative information
Optimize allocation of management resources with capital costs in mind (including efforts to accelerate replacement of
non-business assets mainly cross-shareholdings)
Constantly improve compensation system to cultivate awareness of benefits to enhanced corporate value and share withstakeholders
Raise transparency and independence of Board of Directors
Enhance Group governance (including efforts to strengthen management and supervision functions, identify and respond totax and human rights risks)30

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

Financial Investment Strategy

Cash Allocation, Structure of Balance Sheets

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

Sustainable Improvement in Corporate Value

Sustainable Improvement in Corporate Value

Anticipated EPS Growth

10% CAGR

12.5–13%(Aiming for 15% in long term)

Strengthen
return to shareholders

Growth investment overthree years

Total return ratio

0

Fiscal2021

Fiscal2023

Fiscal2024

Fiscal2027

16%

Fiscal 2024 12.5–13%

12%
10%

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

8%

ROE

Will leverage structural transformation and become
corporation capable of stable ROE of 15%
Fiscal2021

Fiscal2022

Fiscal
2023

Business assets

Facility maintenanceinvestment

Non-business assets

Fiscal2024

10.8%(Fiscal 2021)

12.5–13%(Fiscal 2024)

Cross-holdings culled if
holding criteria not met

Procurement matched toinvestment opportunities
on condition of retaining
A rating

Net income ratio(Fiscal 2021)(Fiscal 2024)

7.8%

Structuraltransformation
investment results

Total asset turnover
ratio(Fiscal 2021)

1.1

Slight drop

Increase in businessassets paralleling
growth investments

On a parMaintainfinancial health

6.2%

Financial leverage

Fiscal2027

EquityRobust growthinvestment on conditionof investment discipline

ROE Growth Structure

14%

Maintain financial health

Growth investment
M&A/software

1.6(Fiscal 2021)(Fiscal 2024)(Fiscal 2024)

Medium-Term Management Plan

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

Interest-bearing debt

Strengthen
return to shareholders
About ¥50 billion

Asset optimization/fund procurement,
including cross-holdings

Anticipated ROE Improvement

Enrich dividend
per share

Investment discipline
ROIC 8%

Fiscal2022

Other Liabilities

Current assets

Investment
About ¥100 billion

Growth investment
R&D/
Personnel investment

Seeking continuous growth exceeding 10% CAGR

Structure of Balance Sheets

Allocation

Cash from businessactivities

10% CAGR

200

45%

About
¥100 billion

Stable generation of cash

300

100
Promotegrowth investment

Cash Allocation

(Yen)

ROE

(Continuous growth)

We will balance robust growth investment with stronger return to shareholders, based on cash frombusiness activities.

Value Creation Process

EPS

What does the TIS INTEC Group do?

Financialinvestment
strategy

Growth Investment

Return to Shareholders

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

We will boost the total return ratio to a benchmark of 45% and constantly enrich the dividend per share toencourage a higher degree of shareholder engagement.

M&A(capital contribution)¥70 billion¥30 billion Human

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

Emerging Tech

Joint creation

X - TechDX Offering

Tech Innovation

Previous Medium-Term
Management Period(From 2019 to fiscal 2021)

New Medium-Term
Management Period(From 2022 to fiscal 2024)

Estimates

ActualEstimates

17.0

27.5

10.0

Investment in R&D to acquire advanced technologies

5.0

4.5

12.0

Sub-total

30.0

37.9

Investment to expand strategic domain business

50.0

43.6

Software investment to create new services
Investment in human resources to fuel structural transformation

Total

31

Stronger value chain

8.0

80.0

5.9

81.5

Dividend20
Promotegrowthinvestment

Strengthen
return toshareholders

Maintain financial health

15

Treasury stockacquisition

42.8%

Total return ratio

45.0% 45.0% 45.0%045%39.0% 39.8%
Constantly enrichannualdividend per share

10
5

Total return ratio

Dividend
per share¥35

Upper limiton treasury stock
holdings
at 5%
Corporate Data

(Billions of yen)

ASEAN

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

Pursue research into leadingedge technology
Engage in applied research toaccelerate market entry for
new business activities

resources

New SPB

Continue investment insoftware development forindustry platform building

R&D

Internal
reinforcement

ChannelImplement strategic M&As
Contribute capital to accesstechnology and know-how andpromote joint business pursuits

Return amount (Billions of yen)

SoftwareInvestment Policy

Platform that Supports Value Creation
Process (ESG section)

Growth Investment

Fiscal 2019 Fiscal 2020 Fiscal 2021 Fiscal 2022 Fiscal 2023 Fiscal 2024

8.0

＋

30.0
70.0

100.0

32

[Special Feature] Roundtable Discussion about Sustainability and Business

The TIS INTEC Group’s position on sustainability management hinges on OUR PHILOSOPHY—the Group’s basic philosophy—and was given greater clarity in Medium-Term Management Plan (2021–2023) with the formulation of specificmeasures, such as setting sales from services providing solutions to social issues as a key performance indicator.
The roundtable discussion presented here was an opportunity for members of the Sustainability Project Team tohighlight social issues where the Group can contribute solutions and the status of business activities in areas where
the Group can make a difference. The team was formed to promote a more in-depth approach for finding solutions tosocial issues and in unifying management within the TIS INTEC Group.

Cashless options, improved healthcare and othersolutions to social issues are connected toregional renaissance
Oka: In May 2017, TIS announced Group Vision 2026 and set
a new direction toward that destination, one that included avibrant corporate ideal. If we consider this the first step on ourjourney, then the second step is represented by the selectionof four social issues where the TIS INTEC Group can contributeto solutions. For low-carbon/decarbonization*3, efforts will
begin with measures to enhance corporate capabilities. For
financial inclusion, urban concentration and rural decline, andhealth issues, let’s revisit the business-driven initiatives that will
be introduced.
*3 For details on low-carbon/decarbonization, go to the section For the global
environment on page 69.
34

Corporate Data

33

Taniguchi: You may laugh, but to be quite honest, I neverthought we would all be so much on the same wavelength
about these issues. You see, INTEC’s head office is in Toyama
Prefecture—definitely more rural than urban—and most of
our clients are administrative agencies and local governments.
I felt these factors gave us more insight into the issue of urban
concentration and rural decline, particularly the latter. In fact,
we have been involved in regional renaissance efforts for many
years already. I had thought that INTEC’s client base differedfrom that of TIS in terms of industry and type of business aswell as scale and that each company had a different understanding of social issues given our respective urban and rural
corporate environments. But through the project, I realizedthat a variety of social issues are common all around, as theimpact of shrinking rural populations and rural cities in decline
have consequences not just in the public sector but the private
sector as well. A similar situation affects the public and private
sectors in urban cities, too. In backcasting the evolution of acashless society and heightened concerns over social issues,
such as access to healthcare, I recognized that rural areas areequally affected and influenced. I was keenly reminded of theneed to be united as a corporate group in finding solutions tocommon social issues.

Platform that Supports Value Creation
Process (ESG section)(from left)
Isao Otokita, TIS Executive Officer, General Manager of Digital Transformation Sales & Planning Unit, Digital
Transformation Business Unit
Reiko Oka, TIS Executive Officer, Department Manager of Corporate Planning Dept. and Deputy Division Manager ofCorporate Planning SBU
Shoichiro Taniguchi, INTEC Managing Executive Officer, Division Director of Regional Government Systems Division
Hiroto Ito, TIS Executive Officer, General Manager of Healthcare Services Unit, Digital Transformation Business Unit

Otokita: Sinking our teeth into discussion was a gradual process. My area of responsibility was financial inclusion*2, which
includes efforts to promote a wider embrace of cashless
options. What I feel has been extremely productive under the
project structure is the use of backcasting, that is, looking
back from a starting point—a target—in the future to figureout what should be done now to achieve that long-term goal.
With regard to payment services, which have always been apowerful tool in TIS’ business toolbox, operating divisions hadtalked about the next generation of payment solutions under

Ito: For health issues, which is my area of focus, operating
divisions had previously used backcasting from an immediatefuture perspective that held Japan’s insurance system could
not be sustained as is. Changes were needed. The projectteam, however, applied backcasting from a long-term perspective, including what society might look like in 50 years’ time,
analyzed possible global insurance systems in the future, andengaged in extremely animated conversation. During the overall discussion process, participants often pointed out that acertain social issue had a connection to health issues, so I feelthere is considerable potential for extensive cooperation onconnected themes within the TIS INTEC Group.

Medium-Term Management Plan

*1 Planetary boundary is a concept that defines the environmental limits
within which humanity can continue to develop and thrive.

*2 Financial inclusion: Providing a structure that enables everyone to accessbasic and necessary financial services.

Value Creation Process* Please go to page 19 for details on sustainability management for the Group.

Oka: OUR PHILOSOPHY is, as you know,
the Group’s basic philosophy. Our mission, guided by this concept, is to “fillthe future with vibrant colors as a moverusing digital technology.” This is part of aforward-looking perspective that I firmly
believe guides us toward the creation of social value. Suchsocial value goes beyond mere short-term economic value andpromotes a long-term view for building a better society. But
based on my own experience in operating divisions, it’s reallyhard for people on the business frontline to get a real sense of
how efforts directly impact social issues because we engage in
Business-to-Business (B2B) activities. Nevertheless, the planetary boundary framework*1 indicates that sustainability management is an obligation, as a social system driving the pursuitof happiness, and at the same time indispensable to corporate
survival. This comes amid a growing sense of crisis that issues,
such as climate change, will push our planet beyond designated boundaries and increase the risk of sudden and irreversible environmental changes. Against this backdrop, companies
face the prospect of even more serious social issues from amanagement perspective and need to integrate business practices with efforts to address social issues through operations.
With this in mind, TIS formed the Sustainability Project
Team in 2019, with Takayuki Kitaoka, president of INTEC, incharge of the project. About 10 members, including participants in this roundtable discussion, took an in-depth approachto discussions over more than six months to pinpoint social
issues where the TIS INTEC Group can contribute to solutions.
At an intermediate stage, more than 160 social issues andbusiness themes had been brought up, and after repeated discussion about various factors, such as what society might belike in the future and how we might utilize existing strengths,
we settled on four social issues—financial inclusion, healthissues, urban concentration and rural decline, and low-carbon/
decarbonization—that would benefit from expertise of the TIS
INTEC Group. Though my role was administrative, I found the
project’s approach to promote sustainability challenging
because I had never engaged in this kind of discussion process
before. I had a hard time picturing a future over such an ultralong-term timeline, and initially, the discussion process seemedso time-consuming. But the difficulties undoubtedly opened
my eyes. You were all part of the project team. What wereyour impressions?

the tagline “Beyond Payment.” But the sustainability projectgave our conversation a more official tone and was ultimately
instrumental in clarifying the medium- to long-term directionof business as a management strategy.

What does the TIS INTEC Group do?

Business domains tapped for Group involvement going forward

Four social issues selected, promoting sustainability management

Ito: Well-being in a healthcare sense means good health andlongevity. It is essential for us to be part of efforts to create
conditions that enable a diverse range of people, including
those who are ill, to enjoy life on their own terms. The TIS
INTEC Group will do this by providing the IT services that society needs.

Taniguchi: To contribute to the wellbeing of people and society as a whole,
we must have the trust of society. This isessential. For sure, no one wants a computer that doesn’t function. I will be
more aware of doing work that provesworthy of trust in the course of daily
operations.
*5 Well-being: A state in which an individual or a group feels good in bodyand mind and enjoys socially favorable circumstances.

Case Study from Initiatives in Financial Inclusion
Proof-of-Concept for MaaS in Okinawa
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 fiscal 2021, efforts were directed toward promoting
use of MaaS all over Okinawa, mostly by tourists, and by residents in someareas of the prefecture. The experiment has been selected by Japan’s Ministryof Land, Infrastructure, Transport and Tourism under an initiative called“Project for Promoting and Supporting Japanese MaaS.” All participants inthis project seek to boost the use of public transportation by making it moreconvenient and to utilize data to seamlessly connect multiple modes of transportation as well as diverse services, including commercial and tourist-related
services.

Medium-Term Management Plan

Case Study from Initiatives in Healthcare
Healthcare Passport facilitates sharing of health information
among healthcare professionals, patients and their families
Healthcare Passport, from TIS, is a service that centralizes treatment andhealth information that had been scattered among patients, hospitals andclinics, pharmacies and other places where data might be stored, and links
regional medical treatment and health information to provide a more thorough picture of treatment and health status. This will lead to more appropriate examinations and treatment and help patients themselves work toward
better health. The passport will ensure that shared treatment and healthinformation is secure with high-security protocols and an electronic opt-in(consent to obtain).

ClinicPatients
andfamilies

Platform that Supports Value Creation
Process (ESG section)

Ito: A pivotal component of ourapproach to health issues is the creationof a system that facilitates safe andsecure use of healthcare information
through the application of IT. Unable toaccess their own test data at a hospital or
clinic, members of the public often end up getting the sametest again at a different hospital. A system that allows information to be shared will reduce the burden on the patient andalso keep medical expenses down. In Japan, a network for
medical treatment has been established by prefecture, so ourapproach has been to link regional medical facilities with each
local government to help residents in these geographicalareas.
The business of healthcare is a new area of pursuit for us.
But for this very reason, we can approach it from a multifaceted perspective free from existing frameworks. In addition,
just on the requirement for strict management of treatmentrelated information, including medical history, we can draw on
mission-critical systems built at data centers over many years,
technological capabilities to handle data safely and securely,
and operating know-how. Another strength is access provided
by Group companies, including INTEC, with solid, regional client bases. What we need, however, is a nationally sustainablesystem for sharing information. Toward this end, we will not
rely solely on the Group to build the whole system but rather
collaborate with players who align with our eco-systemapproach, and build a system to national standards to facilitate
interoperability.

Otokita: We will draw maximum strength from the payment
platform PAYCIERGE to drive our Beyond Payment concept
forward and thereby help to address social issues. The ultimate
goal is to achieve a cashless payment ratio of 100% in Japan,
because the effort is moot with anything less. This will by mymotivation. I am totally committed to maintaining business
continuity and ensuring TIS is a frontrunner in creating a society of well-being.

Value Creation Process*4 Mobility as a Service (MaaS) is a new concept in mobility that utilizes ICT
to apply cloud computing to transportation, incorporating mobility bymode of transportation into a single, seamless service. There are many
examples of how people use a smartphone app to search for different
modes of transportation and different routes, travel to their desired
destination, and even purchase tickets.

Regarding agricultural DX, we have been working on a platform that will enhance farmers’ marketing capabilities at production sites. We created a framework to eliminate production
loss for flower growers that enables them to use a smartphoneor other device to confirm order needs from distributors
before shipment. In the future, we hope to expand this framework to all growers, including those producing vegetables.
The ultimate goal of the smart city concept is to make thelives of residents safe and secure. TIS and INTEC have scheduled regular monthly meetings to promote stronger bonds ofcooperation and raise the level of contribution that we, as acorporate group, can make in solving various issues specific torural areas.

Hospital

Pharmacy

Support for society and people’s well-being

35

Oka: We all have acknowledged that the four social issues
identified under the project are themes where the TIS INTECGroup can have a real impact. These social issues each haveconnections to other issues. What’s more, as hubs of activity in
the Group’s overall business portfolio, they could become drivers of a virtuous cycle of improvement. At the core—wellbeing, right? So to me, the role of the TIS INTEC Group is tocreate systems that support the well-being*5 of people andsociety as a whole. As we wrap up today’s conversation,please share your passion for the project.

Case Study from Initiatives in Regional RenaissanceIntegrated administrative information system CIVION for
administrative DX
CIVION-7th, from INTEC, is an integrated administrative information systemthat covers all internal and external administrative operations undertaken by
local governments. The all-in-one package includes a citizen information system, insurance system, tax system, public welfare system and internal information system. INTEC is working on tax DX, utilizing many years of provenresults in the operation of core systems and underpinned by market trust.

Corporate Data

Taniguchi: INTEC is tackling regional renaissance with anemphasis on three themes—administrative DX, health DX andagricultural DX. Administrative DX is transitioning from theconventional system of record to a system of engagement,
which enables residents to use a smartphone or other device
to carry out administrative procedures at any time of the day
or night from home. For health DX, we are drawing on ourstrength in business pursuits related to the national healthinsurance system to build a framework for prevention of lifestyle-related disease and control of medical expenses, analyzing huge amounts of national health insurance member data.

What does the TIS INTEC Group do?

Otokita: TIS is promoting the shift
toward cashless transactions in two areas
as a business. One is to provide systems
integration services, such as system configuration for large financial institutionsin the client base, as well as related support, and the other—service-type solutions—is to provide clients and the market with platforms built in anticipation of client needs and under a prior investment strategy. Initiatives topromote cashless transactions and DX fall under the social
issue of financial inclusion and are covered by service-type
solutions. Here, too, there are two themes—promoting cashless transactions and Mobility as a Service (MaaS*4) to fuelregional renaissance.
To promote cashless transactions as a mechanism forregional renaissance, TIS will coordinate various inputs,
including the efforts of Mr. Taniguchi and others involved insuch initiatives as regional smart cities, while providing accessto platforms and mobile apps. In Aizuwakamatsu, Fukushima
Prefecture, TIS is involved in a proof-of-concept project for
cashless payments using digital local currency. The national
government is encouraging wider use of cashless options forpayment to reduce workload and enhance the efficiency ofoperations performed by humans, and thereby boost Japan’scompetitiveness. But “cashless”—as in using digital local currency—is a buzzword for regional renaissance.
As for MaaS, the aim is to apply know-how accumulated
by TIS in such areas as cashless payments to help communities
make public transportation more convenient and efficient for
local sightseeing, which would attract more visitors to the area
and improve the local business climate. Already, in Okinawa,
TIS is working with about 50 business entities, including transportation authorities, local governments and financial institutions, and providing a platform that facilitates use of a digitalticket. In the future, MaaS could be used to help seniors get toa hospital and then back home or link hospital appointments
and payment for services. In other words, initiatives in financial
inclusion are directly connected to measures that addresssocial issues, such as health issues and regional renaissance.

36Sustainability: Case Studies of Our Initiatives
What does the TIS INTEC Group do?

Providing safe, convenient social platforms for people and society
The Group has identified four social issues to proactively solve through its business activities. We will create a resilient society byproposing services that enrich lifestyles by making full use of the strengths and technological capabilities cultivated in ourbusiness to date. We will also grow the business fields that lead to the resolution of the four issues into our future core businesses.

1.

2.

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

Case study

Healthcare Passport incorporates PHR to achieve regional medical collaborationElectronic medical records(3) Testing organizations

Test results(4) Pharmacies

Prescription receipts(5) Patients

Health information

Obtain consent electronically from patients using a smartphone app
Information is forwarded only to those with approved sharing agreements

Healthcare Passport

Healthcare providers

Patients and their families*(1), (3), (4) Service to begin progressively

37

I can monitor my healthstatus daily, which
increases my healthawareness
I can check the medical
condition of my parents
who live far away, which
gives me peace of mind

A patient’s condition canbe instantly ascertained,
allowing for
accurate examination

Healthcare providers
Patients and (hospitals, pharmacies
and nursing care)their families

I can see a normal bloodpressure and pulse, andtherefore can give advice
based on the patient’s
current condition

Medical history, test
results, allergies, etc. canbe obtained so that thebest medication guidance
can be provided

We will leverage ICT to realize a strong, sustainable society, andsafe and comfortable lifestyles in response to the social issues
faced by local communities, such as the decline in the working
population.

Case study

Livable 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 of green energy: generated in the area and used efficiently in the same area.

Establishing a new way to use electric vehicles (EVs) as a local disaster mitigation
measure through a proof of concept in Hokuto City, Yamanashi Prefecture

As a disaster mitigation
measure to shorten the leadtime for restoring energy
infrastructure in the event of
a disaster, we have established an efficient method that uses
electricity stored in EVs to power buildings (Vehicle to Home,or V2H) on the ISOU platform*1. With the support of Hokuto
City, we conducted a series of proof of concept trials
assuming a large-scale blackout in the city. We directed EVs inthe area to be charged by utilizing the dispatch function of
the ISOU platform, charged them through solar power fromthe field and discharged them to a building that was a proxy
for a shelter.
To verify the practicality of the system, this trial was
conducted in Hokuto City, in cooperation with Zero Emi
Yamanashi, a general incorporated association working on
climate change measures, energy measures, and the creationof a sustainable society.
TIS aims to establish a framework to promote local
revitalization and local production and local consumption ofenergy by solving next-generation transportation and energy
problems in the trial region. This trial aims to contribute to a
recycling-oriented regional society through the ISOU platformby implementing an application for recharging anddischarging directions that will expand the use of V2H to the
MaaS system developed in the ISOU Project (2019). This is a
proof of concept trial in Assabu Town, Hokkaido, to create aframework for a community that can sustain itself even intimes of disaster.
*1 ISOU platform: In addition to the MaaS system developed in the ISOU Project,a regional currency solution based on energy management system andblockchain technology will be linked to provide a platform for a regional
revitalization cycle through the use of renewable energy and the creation ofmobile and intra-regional economic activities.

System to promote regional revitalization and local production, and local consumption of energy (use of ISOU platform during disasters and normal times)

In the event of a disaster: using EVs as emergency power supplies and dispatching them to areas where support
resources are needed during a disaster
Directive for local EVs with

In times of disaster

Affected areas
and blackout
areas

Disaster occurrence, power supply, and local information
platforms and community disaster manager
Gives directive to dispatch EVs operating in the area to evacuation centers in the affected areas based on
information on the occurrence of disasters and damages

Corporate Data

Encrypted Internet connection

My condition iscommunicated accurately
to my doctor, which gives
me a sense of security

Low-carbon/decarbonized society

Platform that Supports Value Creation
Process (ESG section)

Medical receipts(2) Hospitals

healthcare providers will also be able to see the daily vitals
data provided by patients, as well as changes in test results
and prescriptions at other medical institutions, enabling themto respond more appropriately. As a result, medical
information that has been difficult to obtain in the past will be
returned to patients and they will be able to carry their PHR
with them. With their consent, local hospitals, clinics,
pharmacies and welfare facilities will be able to treat andrespond to patients by referring to the information containedin the PHR, an example of regional medical collaboration
enabled through technology.
Aiming to improve the utilization rate of patients andreduce the burden of regional medical collaboration, theHealthcare Passport is provided not as a system build-out, but
as a cloud-based service utilization service. The services usedby patients and local healthcare providers are standardized
and offered as a platform that ensures high security throughflexible but strict information control.
TIS aims to create a place where medical and healthinformation can be integrated consistently across life stages,
and to realize a world in which patients are the starting point
and the center, and are able to use their own information fornecessary services. By integrating healthcare information basedon patients’ opt-in (consent) and sharing it openly withpartner companies that provide various services without
vendor lock, we can create new services and contribute to theimprovement of patients’ health.

Urban concentration/rural decline

Medium-Term Management Plan

A Healthcare Passport is abidirectional personal healthrecord (PHR) information
collaboration platform service
that enables healthcare providers and patients to connect andmanage medical and health information. This SaaS-type service
was created by combining the security and platform
technologies that TIS has cultivated through the construction ofsystems for financial institutions with Chiba University Hospital’s
experience in regional medical collaboration and medical
knowledge. It has been available since September 2020.
In areas where the Healthcare Passport has been
introduced, patients can view information in their medical
records, such as consultation history, prescriptions and test
results, at any time via their smartphone. At the same time,(1) Clinics

Smart health management integrating health information,
including exercise records, photo data of meals, and health check
results. We will realize a dynamic society through healthcare
platforms.

4.
Value Creation Process

Health concerns

Financial inclusion

3.

In normal times: As a mechanism to enrich the lives of local residents by realizing local production and local
consumption of renewable energy

Renewable energy generated locally, such as
through small-scale hydroelectric, woodbiomass, and geothermal energy

Transmission of power generation resourcesfrom renewable energy sources to charging
facilities in the area

Use of EVs powered by local
power generation
38

Leveraging our strengths to accelerate business development andrealize a cashless society● 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 and cashless payment ratio

40.0%
50
20.0%

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

Three featuresof
PAYCIERGE

Covering services necessary to digital settlements,
including prepaid, debit, credit payments

11.9%
0

2008
Electronic money

2025

Credit card

Debit card

Cashless payment ratio

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 Service Strategy under Medium-Term Management Plan (2021–2023)

Offering settlement functions to digital services without
paying attention to the legacy system

With the cashless market in growth mode, we will target businesses keen to participate in new payment options. High-levelspecialization will be in demand, providing us with the perfect opportunity to demonstrate competitive superiority, especiallyin services to our core customer base of credit card issuers. We are aiming for net sales of ¥34 billion in fiscal 2024, supported
primarily by this core customer segment.

Providing round-the-clock, 365-day operation in the nation’s
only settlement cloud via safe and reliable TIS data centers Overview of Payment Services and TIS’ Core Focus

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

Market Scale

Strategic Focus

Cashless market in growth mode

Launch CreditSaaS and promote businessdevelopment, and grow into pillar of business

2025¥121 trillion

PAYCIERGE
Digital accounts

Future2016

Interface

2019¥82 trillion

CreditSaaS

2030¥198 trillion

Strategic
partner

Major growth for market

FinanceCore competence
Payment services
Lending
Data analysis
RetailHealthcare
Target market

WidgetMedium-Term Management Plan

1
Feature 2
Feature 3

80.0%(¥trillions)100

 PAYCIERGE digital payment platform

FeatureCombination of cashless payment methods

Value Creation Process

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.

 Status of cashless payments in Japan

Businesscoordination

Administration/
Urban OS

Estimate by TIS

Brand debit
processing services

RetailFintechventuresBusiness Structure
Recurring sales

Payment settlement
networks
Overseas local
networks

API-type brand prepaid
processing services

Brand prepaid
processing services

Mobile wallet

Public fees
あFinance

Digital wallet services

Transportationcompanies

QR settlement gateway
for merchants

Non-banks

39

EBITDA margin
exceeding 20%(CreditSaaS
contribution)

Credit SaaS
¥20.0 billion

Front area
Prepaid coremarketPrepaid SaaS
¥2.5 billion
Debit SaaS
¥3.5 billion
Debit coremarketFiscal 2021

Fiscal 2024

Front market
for issuers
Merchants/QR/
Wallet¥5.5 billion
Front market
for merchants

New domain creation/common ground ¥2.5 billion

TIS held an information meeting in December 2019 highlighting payment business and provided details on domains of focus
and strategies. Please follow the link below to see presentation materials from that day.

A value exchange network linking as many clients as possible to PAYCIERGE
Kiyotaka Nakamura, TIS Senior Managing Executive Officer, Division Director of Digital Transformation Business Unit
PAYCIERGE is a digital payment settlement platform that draws on capabilities accumulated in the payment services domain since TIS’earliest days and utilizes safe and secure, leading-edge technology. We want PAYCIERGE to underpin a comfortable society. We alreadyoffer various services to a wide range of clients, notably, major financial institutions, but also newcomers to the payment business.
Japan has been a country of low crime, and cash transactions have been the trusted method of payment for individuals and businesses alike. The transition toward cashless transactions has been slower here than in other parts of the world but is gradually becoming
more accepted. However, the COVID-19 pandemic accelerated changes in the cashless market out of necessity, with an embrace thatcrossed national borders. As the world adjusts to the new normal, it is now or never for many businesses to get with the digital andcashless payment program. Given this trend, we are seeing more inquiries about payment solutions than ever before. To meet the
expectations of clients, we will continue to create value that fuels realization of a future of convenience that only TIS can deliver,including a value exchange network linking as many clients as possible to PAYCIERGE.

Corporate Data

Examination and loan

https://www.tis.com/documents/en/ir/finance/meeting/191209.pdf

Core area
Credit core market

Maas, etc.

Finance service platform

Topic¥34.0 billion

Banks

Services for merchantsMarket Share (Fiscal 2024)

EBITDA margin

Distributors

TravelMerchant processing
services¥28.5 billion

SI salesPlatform that Supports Value Creation
Process (ESG section)

Anticipated Composition of Business GrowthCredit card processing
services

What does the TIS INTEC Group do?

Activities under Medium-Term Management Plan
Payment Business Strategies40 Bringing Thailand’s MFEC Group under consolidation

Leverage business domain expansion and strategic investments
to become top-class IT group in ASEAN region

 Recent main M&A and capital and business alliances
InitialInvestments

HeadofficePartners (place in order of the investments)

Relationwith TIS

Corporate Profile

Area

Thai-listed, leading provider of enterprise IT solutions.

ChannelMFEC Public Company Limited

Consolidated
subsidiary

I AM Consulting Co., Ltd.

Consolidated
subsidiaryThai-based consulting group producing total SAP-related IT solutions.

Channel2015

PT Anabatic Technologies Tbk

Equity method
affiliate

Indonesia-listed, top-tier local IT company.

Channel2016

PromptNow Co., Ltd.

Consolidated
subsidiaryThai-based leading FinTech company with multiple proprietary mobile services forfinancial institutions.

X-TechShanghai CardInfoLink Data Service Co., Ltd.

Equity method
affiliate

FinTech company developing presence in China and around the world, withparticular strength in payment gateway solutions and other services.

X-Tech2014

2017

December 2018
TIS purchased
additional shares(24.9%)

October 2020
Became consolidated
subsidiary throughapplication ofcontrol standard(49.0%)*Percentages indicate investment ratio.

MFEC Group Overview(Millions of yen)Name

Net sales

MFEC Public Company
LimitedOperating income
16,068Address
11,486

12,686
Bangkok, Thailand

Date of establishment

March 3, 1997

Paid-in capital

441 million Thai baht (¥1,519 million*)

Representative
Fiscal 2018

Chief2019
Executive Officer
FiscalFiscalSiriwat
2020 Vongjarukorn

Number of employees

1,271 (as of December 31, 2020: consolidated)

Number of subsidiaries

11

Business activities

IT services, systems integration

Capital & businessalliance

Leading IT service provider with considerable experience introducing solutions to
the Vietnamese government and financial institutions.

ChannelR3 HoldCo LLC

Capital & businessalliance

U.S. technology startup boasting global-caliber results and brand in blockchainrelated technology for corporate users.

Emerging
Tech

PT AINO Indonesia

Capital & businessalliance

FinTech provider of payment services for transportation infrastructure in Indonesia.

X-Tech

SQREEM Technologies Pte. Ltd.

Capital & businessalliance

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.

Emerging
Tech

Grab Holdings Inc.

Capital & businessalliance

Top-class super app provider in ASEAN region. Expands into one business after
another across wide range of sectors, including ride-hailing services, food delivery
and financial services. Boasts 203 million downloads on aggregate basis.

ChannelPrincipal client sectors

April 2014
Capital andbusiness allianceBanks and all other types of financial businesses, telecommunications,public sector(17.7%)

GrabLink Pte. Ltd.

Capital & businessalliance

Joint venture—IT platform provider for Grab’s payment services.

X-TechListing

Stock Exchange of Thailand

Entropica Labs Pte. Ltd.

Capital & businessalliance

A Singapore startup—provider of quantum computing software.

Emerging
Tech
Emerging
Tech

J Ventures Co., Ltd.

Equity method
affiliate

A DX subsidiary of Thailand major retailer Jaymart.
Provide DX platform for retail ad and finance business.

X-TechSpeQtral Pte. Ltd.

Capital & businessalliance

A Singapore startup—provider of quantum computing software.

Emerging
Tech Status of capital and business alliance with Grab Holdings Inc.

254

829

862

Steps
towardconsolidation

MFEC has steadily expanded its business results as a leading player in theprovision of IT solutions to enterprises in Thailand.
Going forward, MFEC and the rest of the MFEC Group will actively engage
in joint activities with the TIS INTEC Group to maximize the global alliance andpost continued growth.

Net sales

11,486

16,068Operating income

12,686

254

829

862

Fiscal 2018

Fiscal 2019

Fiscal 2020

* Converted at a rate of 1 Thai baht = ¥3.44, the rate prevailing at the end of December 2020

ASEAN member countries
service providers throughout Asia

December 2
TIS purcha
additional s(24.9%(Millions of yen)

Consolidated results for most recent three fiscal years*● Key areas of joint activities: Payment services, banking, AI, quantum computing, blockchain, MaaS
● Use GrabLink to provide processing services for GrabPay, a payment solution from Grab that is available in eight of the 10● Working together, TIS and CardInfoLink plan to connect GrabPay to EVONET, a global payment network that links payment

March 2017
Became affiliate
accounted for byequity method(20.0%)Topic

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

Platform that Supports Value Creation
Process (ESG section)

Consolidated
subsidiary

One of very few tokenization vendors in the world, and recognized by multiple
international brands.

Sequent Software Inc.

2021

March 2017
Became affiliate
accounted for byequity method(20.0%)

Medium-Term Management Plan

2020

April 2014
Capital andbusiness alliance(17.7%)

TinhVan Technologies JSC.

2018

2019

Steps
towardconsolidation

Value Creation Process

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.

After signing a capital and business alliance agreement in 2014, TIS gradually increased its investment in MFEC, based on mutual
understanding and growing bonds of trust, and in October 2020, MFEC and its subsidiaries were brought under consolidation.
As a result, TIS—and by extension the TIS INTEC Group—gained a solid client base in the local Thai market, enhanced its ability
to deliver services, particularly in the security realm, and added new brands and resources to its composite portfolio. TIS has
built a network of partners boasting advanced technology and a prominent market presence in countries around the world,and going forward, the Company will work with MFEC to utilize these connections to explore opportunities for collaboration.
This relationship will accelerate the process of structural transformation within the TIS INTEC Group and fuel innovation, while
contributing to development in Thailand and the rest of the ASEAN region through solutions to pressing social issues.

What does the TIS INTEC Group do?

Activities under Medium-Term Management Plan
Global Business Strategies

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

Contributing solutions to as many social issues as possible
Kensaku Furusho, TIS Executive Officer, Division Manager of Global Div.

*Total comprising numbers from overseas subsidiaries and affiliates accounted for by the equity method.

41

As a partner in sustainable business growth
Siriwat Vongjarukorn, Chief Executive Officer, MFEC Public Company Limited

Corporate Data

TIS has positioned global operations as a growth engine for the TIS INTEC Group and has taken a robust approach to M&A opportunities
and capital and business alliances, with a focus on payment services, banking and enterprise resource planning (ERP). The success of ourefforts is reflected in a huge increase in overseas sales, on a consolidated basis, rising from about ¥3 billion in 2014 to about ¥13 billion
in 2020. Meanwhile, the scale of global operations has expanded, with net sales* at about ¥69 billion, an office network exceeding 100
companies in ten countries, and a workforce* of more than 4,000 people. To be more precise, we aim to realize financial inclusion, asocial issue in the ASEAN region, and will, through alliances with leading local partners, especially in financial and payment services
areas, which are Group strengths, we will plan and develop services matched to local needs. At the same time, we have taken a mediumto long-term perspective in forming alliances with leading companies in advanced technology fields, such as blockchain and quantum
technology, to get in on the rapid push for digitization. Going forward, we will continue to emphasize these activities and build a topclass IT corporate group in the ASEAN region with the capacity to contribute as many solutions to social issues as possible. Through thisapproach, we will be able to reach our target of ¥100 billion in consolidated sales by fiscal 2026.

There are several reasons behind the decision to accept the tender offer from TIS. One was that our two companies had spent sevenyears as business partners, and a good corporate chemistry developed as we pursued business opportunities together over this time.
Another was that our respective corporate philosophies had many points in common, and we shared a high degree of respect and trust
for each other. Working on projects together was fun, as well. But perhaps the most pivotal reason was that just as TIS seeks to expand
its presence overseas, we at MFEC are keen to expand business activities outside our home market of Thailand.
As partners reaching for the same goal, that is, sustainable business growth, we can lift each other up, reciprocally enhancing
results. Going forward, MFEC and TIS will collaborate on many fronts, including investment strategy in Thailand, Group supply chain andIT services. I look forward to this. I believe MFEC will be a vital tool for TIS in expanding business within the ASEAN region.
42

Business Strategies and Performances by Segment*Segment sales include intersegment sales.

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.

Looking Back on Medium-Term Management Plan (2018–2020)

Looking Back on Medium-Term Management Plan (2018–2020)

Net sales grew thanks to the business expansion, especially in payment service domain,
but profitability was an issue due to the sustained upfront investment.

Huge improvement in profitability, mainly due to optimized portfolio and higher productivity

Net Sales
ActualEstimates

Operating Income(Billions of yen)

136.9
100.6

Net sales¥136,946 million (+9.1%)

Operating income¥8,695 million (+6.1%)

Operating margin

6.3% (–0.2pt)

13.0
8.6

8.1%
Fiscal Medium-Term
2021 ­Management
Plan Estimates

10.8%

6.3%
Fiscal Medium-Term
2021 ­Management
Plan Estimates

Fiscal2018

Higher sales and income. ERP-related decrease was offset by expansion in
payment- and cloud-related business and contributions to performanceby companies turned into consolidated subsidiaries during fiscal 2021.
Operating margin declined slightly due to the increase of upfront­investment to strengthen business.
[Compared to estimates] Net sales +1.8% Operating income –1.2%

Figures in parentheses indicate increase or decrease from the previous term.

● Expand business and boost profitability (Business

Function Service) through more sophisticated
BPO drawing on shift to high-level, combined
BPO and use of forte business knowledge andadvanced technologies(References) Fiscal 2021 Results
Net sales¥35,453 million (+5.2%)

Operating income¥3,105 million (+18.4%)

Operating margin

8.8% (+1.0pt)

Estimates(Billions of yen)

Actual(Billions of yen)

Estimates

Operating margin

3.1 3.0

43.0

38.2

35.4
8.8%
7.0%

1.6
4.3%
Fiscal Medium-Term
2021 ­Management
Plan Estimates

Fiscal2018

Fiscal Medium-Term
2021 ­Management
Plan Estimates

Fiscal2018

Sales and income up, reflecting increased demand for outsourcing­services, including call center operations, and operations related to
special cash payments. Operating margin also expanded.
[Compared to estimates] Net sales +5.8% Operating income +19.4%

Focus points on Medium-Term Management Plan (2021–2023)

Operating Income
ActualEstimates(Billions of yen)

Operating margin● Strengthen societal issue solution service● Reinforce service management and improve

profitability

Operating Income(Billions of yen)

136.9
8.6

demandActualEstimates(Billions of yen)

Operating Income
ActualEstimates

processes

35.4

10.3%

(Billions of yen)

Operating margin● Raise added value through digitization of office

17.0

165.0

Net Sales● Promote growth strategy fined-tuned to ­market

38.5

3.1

3.5

8.8%

9.1%

Fiscal2021

Fiscal2024

6.3%
Fiscal2021

Fiscal2024

Fiscal2021

Fiscal2024(References) Fiscal 2022 Forecast

Fiscal2024(References) Fiscal 2022 Forecast¥155,500 million (+13.5%)

Operating income¥10,800 million (+24.2%)

Operating margin

6.9% (+0.6pt)

The favorable business environment is expected to continue thanks to DX
and cashless payment capabilities, expansion of cloud service and ERP
demand. Expect higher sales and higher income, as segment captures IT
investment demand on payment business and benefits from full-year
contribution from newly consolidation of subsidiaries in previous fiscal
year.

Figures in parentheses indicate increase or decrease from the previous term.

Net sales¥36,000 million (+1.5%)

Operating income¥3,300 million (+6.3%)

Operating margin

9.2% (+0.4pt)

Corporate Data

Net sales

43

Fiscal
2021

Platform that Supports Value Creation
Process (ESG section)

Net Sales● Promote growth strategy for payment service

ActualEstimates

Figures in parentheses indicate increase or decrease from the previous term.

Focus points on Medium-Term Management Plan (2021–2023)
domainNet Sales
Actual● Improve gross profit ratio on existing entry

services through BPO concentration effect andbusiness restructuring

8.1

Fiscal2018■Focus Points of Medium-Term
Management Plan (2018–2020)

Medium-Term Management Plan

(References) Fiscal 2021 Results(Billions of yen)

120.0

● Watch for changes in structure of payment settle-

ment business and expand prior investment styleservices not only for debit and prepaid card transactions but for credit card transactions as well

Estimates

Operating margin● With priority allocation of management resources

toward growth engines and use of advanced
technologies, expand business (IT Offering Services)
through shift toward business anticipating priorinvestment by clients

ActualValue Creation Process■Focus Points of Medium-Term
Management Plan (2018–2020)

What does the TIS INTEC Group do?

*Segment sales include intersegment sales.

Need for digital innovation and outsourcing remains firm, driven by
long-running labor shortage and progress in workstyle reform. Expect
higher sales and higher income, supported by brisk shift in demand foroutsourcing and sustained improvement in profitability.

Figures in parentheses indicate increase or decrease from the previous term.
44

*Segment sales include intersegment sales.

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.

Looking Back on Medium-Term Management Plan (2018–2020)

Looking Back on Medium-Term Management Plan (2018–2020)

Despite reactionary drop in large development projects, maintained growth against backdrop ofstrong IT demand, especially from credit card companies

Maintained growth against backdrop of expanding IT investment among core clients andacross wide industry spectrum, particularly energy

Net Sales
ActualEstimates

Operating Income(Billions of yen)

110.6

106.6

100.0

● Increase provided value by utilizing Mode2 andother digital innovations as well as AI and otheradvanced technologies, and boost profitability
by promoting measures, such as enhancement
innovation activities, to improve productivity

Net sales¥110,660 million (–3.3%)

Operating income¥15,320 million (+2.6%)

Operating margin

13.8% (+0.8pt)

10.6%

Fiscal Medium-Term
2021 ­Management
Plan Estimates

Fiscal
2018

15.3

12.0

Fiscal Medium-Term
2021 ­Management
Plan Estimates

Fiscal2018

Despite steady demand of IT investments from core clients, negative
factors such as sluggish business activity caused drop in sales, but income
was up, reflecting improved project profitability.

by strengthening connection to extensive clientbase in industry and public sectors, and creating
business together[Compared to estimates] Net sales –3.8% Operating income +0.1%

other digital innovations as well as AI and otheradvanced technologies, and boost profitability
by promoting measures, such as enhancement
innovation activities, to improve productivity(References) Fiscal 2021 Results
Net sales¥194,414 million (–4.1%)

Operating income¥18,710 million (–2.3%)

Operating margin

9.6% (+0.1pt)

Net Sales
Estimates(Billions of yen)

Operating Income
ActualEstimates

110.6

125.0

13.8%

(Billions of yen)

194.4 185.0

176.4

18.7
14.5
9.6%
7.8%

11.5
6.5%

Fiscal Medium-Term
2021 ­Management
Plan Estimates

Fiscal2018

Fiscal Medium-Term
2021 ­Management
Plan Estimates

Fiscal2018

Despite favorable demand from core clients and contributions to performance by companies turned into consolidated subsidiaries during fiscal
2021, sales and income declined due to reduced IT investment among
regional, small and midsized companies. Operating margin remained at
the fiscal 2020 level thanks to improving project profitability.
[Compared to estimates] Net sales –0.8% Operating income +3.4%

Fiscal2021

Fiscal2024

14.0%

Fiscal2021

Net Sales● Strengthen strategic partnerships with clients inindustry and public sectors, and encourage joint
creation projects● Make services more high-value-added throughDX and constantly pursue productivity reforms

15.3

ActualEstimates(Billions of yen)

Operating Income
ActualEstimates(Billions of yen)

Operating margin

194.4

202.5

18.7
9.6%

17.5

Fiscal2024(References) Fiscal 2022 Forecast

Fiscal2021

Fiscal2024

Fiscal
2021

21.0
10.4%

Fiscal2024(References) Fiscal 2022 Forecast¥117,000 million (+5.7%)

Operating income¥16,000 million (+4.4%)

Operating margin

13.7% (–0.1pt)

Expects solid demand from businesses that support social infrastructure
and require payment settlement capabilities, and wider investment tohone sharper competitive edge paralleling structural transformation
among financial services providers. With increase in IT investment, particularly among core clients, segment should post higher sales and higher
income.

Figures in parentheses indicate increase or decrease from the previous term.

Net sales¥191,000 million (–1.8%)

Operating income¥19,200 million (+2.6%)

Operating margin

10.1% (+0.5pt)

Clients of Industrial IT Business are hugely impacted by changing businessconditions, but business environment is expected to recover, with DX
accelerating across a wide range of industry sectors as companies seek tosharpen competitive edge and business reform. Braced for lower sales,
due to impact from application of Accounting Standard for Revenue
Recognition. But on actual basis, performance should be solid, with sales
decline and higher income.

Figures in parentheses indicate increase or decrease from the previous term.
46

Corporate Data

Net sales

45(Billions of yen)

Estimates

Operating margin

Focus points on Medium-Term Management Plan (2021–2023)

Operating margin● Make services more high-value-added throughDX and constantly pursue productivity reforms

Operating Income
ActualPlatform that Supports Value Creation
Process (ESG section)

Focus points on Medium-Term Management Plan (2021–2023)
Actual(Billions of yen)

Figures in parentheses indicate increase or decrease from the previous term.

Figures in parentheses indicate increase or decrease from the previous term.

including credit card companies and banks, andencourage joint creation projects

Estimates● Increase provided value by utilizing Mode2 andOperating margin also expanded.

● Strengthen strategic partnerships with clients,

Net Sales
Actual● Expand business (Strategic Partnership Business)

13.8%
12.0%

11.3

■Focus Points of Medium-Term
Management Plan (2018–2020)

Medium-Term Management Plan

(References) Fiscal 2021 Results(Billions of yen)

Estimates

Operating margin● Expand business (Strategic Partnership Business)by strengthening connection to extensive clientbase of credit card companies, banks andinsurers, and creating business together

ActualValue Creation Process■Focus Points of Medium-Term
Management Plan (2018–2020)

What does the TIS INTEC Group do?

*Segment sales include intersegment sales.

E

S G Governance

The Group is promoting efforts focusing on E (environment), S (social) and G (governance)
as an important framework to support its value creation. In addition, TIS strives to build bonds oftrust through active communication with all stakeholders and to promote sustainable corporate
value in harmony with the evolving values of society.

Platform that supports value creation of the GroupS G

SocialGovernanceContribute todecarbonized society
and recycling society

Sustainableimprovement instakeholder
engagement

Constantly strive forgovernance that
promotes higher levelof trust from society

P.69

P.63

P.48

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

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

Value Creation Process

E

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

What does the TIS INTEC Group do?

Platform that Supports
Value Creation of the Group■ Corporate Governance Structure
General Meeting of Shareholders
Appointment, dismissal

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.

E S G● Customer service points of contact

P.66

P.63

● Intranet

TIS INTEC Group● Personnel exchange groups,● Cooperation and support for NGO/NPO social

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

and Investors

P.67

contribution activities● Results briefing● Small meetings, domestic and overseas roadshows,participation in conferences● Information disclosure on IR section of corporate websites● Integrated Report● Business Report and others●Chairperson of the Board:

Chairman●Term of office: One year

Discussion, reports
Corporate
Sustainability
Committee● Opinion posts from website● Responses to relevant ministries/agencies andindustry associations
and others

Business
Partners

P.66● Information meetings on policy (guidelines)● Creating opportunities for discussion (project information)● Engineer development and support (educational support, seminars)● New Year celebrations, informal social gatherings● Questionnaires, opportunities for opinion exchange and others

Supervision(Three independent
directors)

Investment
Committee

Two interal Audit &Supervisory
Board members●Term of office:

Four years

President

Reports

Reports

Accounting Auditor

Accounting
auditsThree external
members(Three independent
Audit & Supervisory
Board members)

Cooperation

Election, dismissal, supervision

Reports

CVC Investment
Committee

Primary methods ofcommunication with stakeholders

Three external
directors

Cooperation

Units involved
in internal audits

Cooperation

Management Committee

Internal audits
Discussion, reports on
significant issuses

Delegation of authority to
execute operations

Corporatewide Proposal
Review Process
Executive
Officers

System Development
Meeting

Evaluation

Divisions/
Departments

Affiliatedcompanies■ Committees and Other Bodies
Group Internal Control Committee

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

Corporate Sustainability Committee

Check and evaluate the status of the corporate sustainability activities of the Group as a whole.

Investment Committee

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

CVC Investment Committee

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

Corporatewide Proposal Review Process

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

System Development Meeting

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

Corporate Data

● General meeting of shareholders

Reports
Group Internal
Control Committee● Charity concerts

P.68● Company news, Group news

Six internal directors● Local event participation

Community/
Society

Employees

Compensation
Committee

Audit, reports
Statement of
opinionAppointment, dismissal

Audit & Supervisory Board(Five members including
one female member)

Platform that Supports Value Creation
Process (ESG section)(call center, website, main number)● Seminars, fairs and forums for clients● Publication of newslettersand technical brochures● Client satisfaction surveys● Regular meetings
Clients
and others

Appointment, dismissal

Board of Directors(Nine members including
one female member)

Nomination
Committee

Medium-Term Management Plan

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

47

48

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.

Directors and Board of Directors

Board of Directors: 20 meetings held; 138 agenda items discussed(70 items resolved and 68 items reported)

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

Number of Agenda Items■ ■ Items Resolved ■ ■ Items Reported

128
66

Fiscal 2019

138

66

68

2.09 hours
1.54 hours

Fiscal 2020

Fiscal 2021

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(2) Strengthen the Group’s capabilities to address risks
With a recognition of the need to strengthen our capabilities toaddress risks inherent in the Group in a cross-functional manner, the Board of Directors will complete a PDCA (plan-docheck-act) cycle for the Group risk management and tostrengthen capabilities to address risks by having meetings to
exchange opinions and to report the status of internal control
risk management and its three-line defense protocol.

1.39 hours

Nomination Committee and Compensation Committee
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.

70

70

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
the Board of Directors. Note that TIS conducted this evaluation
based on advice and verification by an external attorney.

3. Future issues and associated responses, based on­analysis and evaluation
In light of the analysis and evaluation previously mentioned, TIS
will focus particular efforts on the following issues.
(1)	Promote discussions to further improve sustainability
and medium -to long-term corporate value and monitoring by the Board of Directors
The Board of Directors will secure sufficient time to have discussions to further improve sustainability and medium- to longterm corporate value, review the authorities held by the meeting bodies within the Group, and improve the Board’s function
to monitor medium- to long-term strategies.

Nomination Committee
Fiscal 2020

Fiscal 2021

Fiscal 2019

Fiscal 2020

Fiscal 2021

19

19

20

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

Fiscal 2019

Role of committee
members

Number of Meetings HeldManagement Committee

Year ended March 31, 202149

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

Management Committee: 40 meetings held; 277 agenda items discussed(151 items resolved and 126 items reported)

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 growth of
the Company as well as the enhancement of its medium- tolong-term corporate value while also considering aspects ofdiversity 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 other relevant
provisions.
50

Corporate Data

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

Status of activities bycommittees(Fiscal 2021)

Compensation Committee

Provide advice for selecting candidates to theProvide advice on matters related to decisions on
position of director and matters related to thecompensation for directors
appointment of such individuals• Held six times in fiscal 2021 with 100%
• Held seven times in fiscal 2021 with 100%
­attendance of all the members­attendance of all the members
Provided advice on the appointment and retirement Discussed the appropriateness of the Company’sof key individuals, including directors, and present- compensation package through a comparative­analysis of director compensation amounts at othered proposals on changes to director ­composition,companies and at TIS, based on the findings of abased on discussions by Committee members.
Gave advice on future approaches for a succession research company, as well as the appropriateness ofthe calculation method used to determine perforplan based on the current status shared by themance-linked compensation. Made proposals to themembers.
Board of Directors on director compensation, basedon the results of discussion by the Committee.

Platform that Supports Value Creation
Process (ESG section)

62

136

c­ oncluded that the level of effectiveness continues to trend
upward, reflecting improvement measures based on the resultsof effectiveness evaluations conducted in previous years.
However, management acknowledged the importance ofpromoting discussions to further improve sustainability andmedium- to long-term corporate value and monitoring by the
Board of Directors, and strengthening the Group’s capabilities
to address risks to ensure greater effectiveness in running suchmeetings.

Medium-Term Management Plan

Year ended March 31, 2021

well as meetings ahead of Board of Directors’ meetings—inprinciple, twice a month—to give external directors and outside
members of the Audit & Supervisory Board sufficient background information to participate in discussions. In addition,
the Company organizes study sessions with experts—in-houseand external—and arranges visits to local Group facilities andoffices. TIS also creates opportunities for external directors to
exchange opinions with the President and convenes meetings
that involve only external directors and external members of the
Audit & Supervisory Board. This facilitates smooth but vigorous
discussion by the 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 2021 evaluation, all directors and members of the Audit & Supervisory
Board were given a questionnaire to be submitted anonymously. The questionnaire asked them to conduct a comprehensive
self-evaluation and self-analysis of the composition and operation of the Board of Directors, and then the Board of Directors
held discussions based on the results. The method and resultsof the evaluation, as well as future issues brought to lightthrough this process and measures to address such issues aredescribed below.

Value Creation Process

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 an information meeting once a year to present management direction as

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

What does the TIS INTEC Group do?

Reason for Selection of Current Corporate Governance StructureBoard of Directors and Audit & Supervisory Board Members
Directors

Audit & Supervisory Board Members

Representative
Director,
Executive Vice
President

Representative
Director,
Executive Vice
President

Director

Director

Director

Director

DirectorStanding Audit &Supervisory Board
MemberStanding Audit &Supervisory Board
MemberExternal/Independent External/Independent External/Independent
Akira Shinkai

Koichi Sano

Fumio Tsuchiya

Naoko Mizukoshi

Tetsuya Asano

Tatsufumi Matsuoka Sadahei Funakoshi

November 14, 1963 December 14, 1960

March 24, 1959

August 30, 1948

May 10, 1948

September 23, 1967

October 22, 1960

December 2, 1957

3 years

3 years

5 years

4 years

3 years

1 year

53

13

17

3

—

1

20/20 (100%)

20/20 (100%)

19/20 (95%)

20/20 (100%)

20/20 (100%)

20/20 (100%)

—

—

—

—

—

Yasushi Okamoto

Masahiko Adachi

Josaku Yanai

May 3, 1952

March 3, 1962

May 9, 1956

Cumulative term of office

8 years

3 years

3 years

5 years

Number of shares owned(thousand shares)

163

50

43

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

20/20 (100%)

20/20 (100%)

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

Audit & Supervisory
Board Member

Audit & Supervisory
Board Member

External/Independent External/Independent External/Independent

Takayuki Kitaoka

Toru Kuwano
Date of birth

Audit & Supervisory
Board Member

Yukio Ono

Akiko Yamakawa

August 15, 1954

January 1, 1950

April 5, 1973

2 years

5 years

1 year

1 year

7

10

1

0

—

19/20 (95%)

13/13 (100%)(Since assuming officeon June 24, 2020)

20/20 (100%)

20/20 (100%)

12/13 (92%)
13/13 (100%)(Since assuming office (Since assuming officeon June 24, 2020)
on June 24, 2020)——

11/11 (100%)(Since assuming officeon June 24, 2020)

13/13 (100%)

13/13 (100%)

11/11 (100%)
11/11 (100%)(Since assuming office (Since assuming officeon June 24, 2020)
on June 24, 2020)●●

Value Creation Process

Chairman

Representative
Director,
President

What does the TIS INTEC Group do?

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

Attendance at meetings

○

○

○

●

Compensation Committee

○

○

○

●

●

●

●Chairperson 〇Committee member

Skills
●

●

●

●

●

●

Industry Knowledge

●

●

●

●

●

●

International Experience

●

●

●
●

Finance & Accounting

●

●

●

●

●

●

●

●

●

Legal

Executive Officers

●

●

●
●

Summary of Content of Liability Agreements
Jun Ikimune

Executive Officer

Hirofumi Akashi

Executive Officer

Yasushi Tajima

Senior Managing Executive Officer

Masahiro Hosokawa

Executive Officer

Masahiro Mikami

Executive Officer

Ikuo Shimizu

Senior Managing Executive Officer

Shinichi Horiguchi

Executive Officer

Satoru Tayasu

Executive Officer

Isao Otokita

Senior Managing Executive Officer

Kiyotaka Nakamura

Executive Officer

Yoshiyuki Hayashi

Masahiro Ueda

THANAWATLERTWATTANARAKExecutive Officer

Managing Executive Officer

Executive Officer

Masakazu Kawamura

Managing Executive Officer

Tsuyoshi Fukuda

Executive Officer

Kensaku Furusho

Managing Executive Officer

Kei Ando

Executive Officer

Reiko OkaManaging Executive Officer

Naoto Kita

Managing Executive Officer

Hisashi Shimizu

Managing Executive Officer

Akira Ogane

Executive Officer

Hiroto Ito

Executive Officer

Manabu Yano

Executive Officer

Hidehiko Shimoyama

Executive Officer

Kyoko Takayanagi

Executive Officer

Tsuneyoshi Ito

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

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

In accordance with Article 427, Paragraph 1, of the Companies
Act, each of the external directors and the external Audit &Supervisory Board members enters into an agreement 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 onthese agreements, is an amount provided as Minimum Liability
Amount in Article 425, Paragraph 1, of the same law.

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

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

52

Corporate Data

Senior Managing Executive Officer

51●

Platform that Supports Value Creation
Process (ESG section)

Corporate Management

Medium-Term Management Plan

Nomination Committee●Chairperson 〇Committee member

● Until fiscal 2021,

ended March 2021

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 performance andimproved corporate value over the medium-to long-term and to align their interests with those of shareholders.
* Compensation composition ratio has been revised to 6:3:1 from fiscal 2022.

● From fiscal 2022,

ending March 2022

Base component
60%

Performance-linked
component
30%

Performancelinked stockincentive
10%

Distribution composition (image)* Decimals rounded downb.	Total number of shares to be granted to directors, etc.: 183,900 shares in one financial year (upper limit)
Note: T he 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, 2021)
Remuneration by type
Remuneration

Basic
remuneration

Performancelinked
remuneration

Performancelinked stockcompensation

Nonfinancial
compensation includedin Performance-linked
stock compensation

Recipients(Persons)

Directors(excluding External Directors)

261

201

50

9

9

6

Audit & Supervisory Board members(excluding External Auditors)

41

41

−

−

−

3

External Directors andExternal Auditors

60

60

−

−

−

8

(Millions of yen)

Notes: 1.	For the fiscal year ended March 31, 2021, 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, 2021, 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
three members, including two external auditors, who retired at the conclusion of the 12th Annual General Meeting of Shareholders on June 24, 2020.
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. At the conclusion of the said
meeting of shareholders, the Company had eight directors, including two external directors, and four Audit & Supervisory Board members, including threeexternal auditors.
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 in each specified period (three fiscal years) for four 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.
5.	Nonfinancial compensation for directors (excluding external directors) comprises ¥9 million of performance-linked stock compensation.

54

Corporate Data

53

Calculation Formula
The number of TIS shares to be delivered (points*) = Base amount × Performance fluctuation coefficient ÷ Acquisition cost per unit

Platform that Supports Value Creation
Process (ESG section)

Ea. 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.

Medium-Term Management Plan

Organizational
Performance
Evaluation(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) Othera.	Upon the introduction of the performance-linked stock incentive plan, the Board of Directors decided to stipulate a provision for
illegal acts in the Stock Delivery Regulations. The provision allows the Company to reclaim the amount equivalent to the sharesdelivered to violators and cancel any points accrued under the performance-linked stock incentive scheme explained below.
b.	To reflect medium- to long-term business performance, directors (excluding 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.
● Process for determining executive compensationa.	Attainment of business goals and achievement of business plans formulated at the beginning of the fiscal year in accordance withthe medium-term management plan are evaluated at the Performance Evaluation Meeting held in late May.
b.	The President and Representative Director evaluates the directors and Audit & Supervisory Board members at the meeting referred
to in (a) above.
c.	The Compensation Committee meets in the middle of June to consult on the results of the evaluation in (b) above and on theappropriate amounts of compensation based on the results of evaluation.
d.	The Board of Directors votes on whether to approve the amounts of executive compensation proposed by the Compensation
Committee in (c) above.
e.	Monthly payments of the annual compensation amount determined by the Board of Directors in (d) above start in July.
f.	A third-party agency is contracted to research the executive compensation level of other companies for comparison in July.
g.	The Compensation Committee meets in November to consider the results of the research in (f) above and modifications to
executive compensation, as appropriate.
The amount of performance-linked stock compensation is calculated in accordance with the Stock Delivery Regulations. The
Board of Directors and the Compensation Committee have no room for discretion.
● 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, and shall fall within a performance
evaluation coefficient of between 0% and 30% of basic compensation for each position.
Individual Performance
Evaluation
The performance evaluation coefficient consists of organizational performance component
A
B
C D
E
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 ofA
performance-linked compensation.
B
In fiscal 2021, the amount of performance-linked compensation was determined by applyingCa performance-linked coefficient of 30% based on the level of attainment of targets forpredetermined corporate performance indicators, including Consolidated Sales, Consolidated
D
Operating Income and Consolidated ROE.

* From fiscal 2022, the Company has made revisions, such as scope of individuals eligible for its shares and other benefits expanded to include directors of its subsidiaries.

Value Creation Process(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.
(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.

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 2021, the amount of performance-linked stock incentive was determined by applying a performance-linked coefficient of
50% based on the evaluation of actual results of the indicators relative to estimates (100% performance-linked coefficient whenattained) conducted in accordance with the Stock Delivery Regulations.
● 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,
executive officers, and executive fellows (excluding external directors, non-executive directors and residents outside Japan).

What does the TIS INTEC Group do?

● Performance-linked stock incentive

Outline of Policy on Officers’ Remuneration

E

Constructive Dialogue with Shareholders
interviews 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 manage internal information appropriately in accordance with the Rules forPrevention of Insider Trading.

[Special Feature] Conversation between Chairman and External Director

Through a diversity-respecting governance system,
we will achieve higher corporate value.

Value Creation Process

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-faceE S GGovernance

What does the TIS INTEC Group do?

S GStrategically Held Shares
2. Criteria for exercising voting rights for strategically held
sharesTIS 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.

Medium-Term Management Plan

1. Policy on strategic holding of shares
TIS and other companies under the Group umbrella hold sharesin other companies including start-ups and venture companies,
only when management believes that it will contribute to thesustainable growth and higher medium- to long term corporate
value of the Company and the Group. Each year, the Board of
Directors reviews the relevance of cross-shareholdings. It is corporate policy that TIS reduces any cross-shareholding withdiminished significance, as identified through the review. In
the review, shareholdings are divided into the three categories(“capital alliance partners”, “customers” and “others”-notapplicable to the first two categories) and examined using themethod set by category.
Please visit the following page for the details of the examination methods.

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 conduct transactions that lack economic rationality with strategic shareholders.

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

Number of Stocks

Amount on Balance Sheet■ ■ Listed Stock ■ ■ Unlisted Stock87■ ■ Listed Stock ■ ■ Unlisted Stock(Millions of yen)

62,65496

88(from left) Toru Kuwano, Chairman; Naoko Mizukoshi, External Director (Partner at Leftrifght Law & IP)

53,632
24,28944,423
52

5,734

65

–8
(Listed Stock–11)(Unlisted Stock +3)

35

31+9,022

68
38,689（Listed Stock +8,622）（Unlisted Stock +400）

29,74238,36420
Fiscal 2021

Sold

Acquired–14+0Unlisted Stock

–2

Total

–16

Fiscal 2019 Fiscal 2020

Other increase/decrease

Fiscal 2021
Sold

+3

Listed Stock+7–2

Unlisted Stock

+7

+1

Total

–1,005Acquired+5

Change in Fair Value, etc.
+9,622

–64

+976

–512

–1,070+981+9,111

According to the policy on strategically held shares, TIS sold its entire holdings of 16 stocks and partial holdings of one stock for theyear ended March 31, 2021, 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, and has newly acquired seven unlisted stocks.
55

OUR PHILOSOPHY, the Group’s basic philosophy,
is the foundation of corporate governanceKuwano: In Japan, steps have been taken to strengthen corporate governance at Japanese companies against a backdrop ofsocial needs. Corporate governance for the TIS INTEC Group ispremised largely upon OUR PHILOSOPHY, basic philosophy thatguides the Group in all activities. A company, as a public entityof society, must seek more than just economic value. A company
must meet the expectations of society and contribute to people’s
happiness through the improvement of value exchange withstakeholders. The Group, as a whole, subscribes to this concept,
and strong corporate governance is an integral part of it.

Over the past few years, TIS has continuously embraced
measures to strengthen its corporate governance structure,including an increase in the ratio of external directors to inhouse directors and the establishment of the Nomination
Committee and the Compensation Committee. Against thisbackdrop, to more clearly separate the roles of business execution and supervision, in April 2021, I vacated the position ofRepresentative Director, Chairman and President and becamea director and chairman without the right of representation,
and Yasushi Okamoto took over as Representative Director
and President. From a non-executive position, I can focus myefforts on enhancing the corporate governance. In addition,
Ms. Mizukoshi, since February 2021, you have chaired theNomination Committee and the Compensation Committee.
56

Corporate Data

Fiscal 2019 Fiscal 2020
Listed Stock23,889Platform that Supports Value Creation
Process (ESG section)

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

Kuwano: Compensation for directors at TIS comprises threecomponents—basic compensation, performance-linked compensation, and performance-linked stock incentive. The ratio ofcomponents, if established measures of corporate performance
are fully achieved, has recently been revised to 6:3:1, from 7:2:1,
with an increase in the performance-linked compensation component.
Mizukoshi: The Compensation Committee debating the officers’ compensation system is significant in two ways: First, theratio of external directors to in-house directors is high, at 3:1,
and second, an external director chairs the committee. These arevery crucial points. Somehow, a committee with only in-houseparticipation only tends to be soft on standards and such.
To c­ reate a suitable system acceptable to stakeholders, theCompensation Committee talks about what performance-linked
compensation and monetary amounts should be, ideally, andseeks to design a system based on incentives that are not excessively speculative but contributed to improved performance andaccountability for reaching KPI targets.

Kuwano: I feel the new management structure, which went
into effect in April 2021, has gotten off to an extremely goodstart. Corporate governance, backed by fair and transparent
management, will be the foundation upon which the Group
continues to grow as a social entity and constantly meet the
expectations of a diverse stakeholder audience. To build a strong
foundation, we will strive to reinforce corporate governance still
further.

Kuwano: We know we must promote greater diversity among
directors. The Group has many technical experts who began assystems engineers and many extremely sincere people who
embody the needs of clients. But managers, though they may be
integral to service-type businesses and global operations, mustalso possess strong leadership skills and international literacy. As
noted before, coaching has been introduced as a Group platform and is a valuable tool for promoting greater diversity
among executives and regular employees.
I am acutely aware of the importance in having young people on the business execution front to leverage service-type businesses in global markets where the speed of change is very fast.
You see, in overseas activities, our people often deal with companies where the top executives are in their 40s. But on the governance front, we will have to deploy diverse human resources
who have accumulated experience in-house as well as externally.
This would include people familiar with the Group’s businesses
and people with expertise in specialty fields, such as the businessworld and legal systems. It will also be important to get the rightbalance.

Corporate Data

57

Process to determine director compensation
underpinned by fair value exchange

Mizukoshi: One factor is that the TIS INTEC Group is global. To
date, all group companies at home and abroad tended to be
managed from a Japanese perspective. The addition ofThailand’s MFEC and other overseas developments have heightened the importance of governance applied to all group activities from a global perspective while incorporating standards
shared by operations in Japan and overseas as well as those thatare specific to each country or market.
With the opening of the Toyosu Office, the operating divisions of TIS and INTEC now work from the same location. But
the centralization process does not end here. It’s just beginning.
Is the setup as efficient as envisioned and appealing to employees? Will close proximity encourage business synergy and raise
corporate value of the Group? The answers to these questions
have to be “yes” or at least moving in that direction, and it will
be necessary to monitor status.
Also, the Corporate Governance Code, which was amended
in June 2021, mentions diversity in core human resources. Given
this, I think TIS has to focus on how it will attract and keep the
people it—and the Group—needs through appropriate humanresources investment and how it will promote diversity.

Platform that Supports Value Creation
Process (ESG section)

Mizukoshi: The selection of a new president took about two
years. The Nomination Committee had no preconceptions andconsidered the possibility of an outside appointment equallywith candidates from within the organization. Ultimately,
though, we decided to select someone from inside. Then, thecommittee looked at the qualifications that the president of TIS
needed to have. We all shared the view that the president would
have to possess basic qualities—a suitable level of businessknowledge and the trust of peers—along with the ability to execute strategies to fuel globalization and the service-type businesses that support structural transformation, as well as leadership skills and international literacy matched to trends in globalization. In addition, we met with each candidate on our list tofind out what kind of management team that person wanted tobuild and exchange opinions. We also referred to 360˚ evaluations and coaching feedback from outside experts. Candidates
themselves had various questions over the course of the twoyear selection process, and as these questions turned over in themind of each individual, perhaps they acquired a new perspective on key qualities and their own role in the organization.

Kuwano: Candidates who were not selected to the top management position are still very much essential to the Group’s
future growth, and I asked them to demonstrate their capabilities as members of a unified management team led by Mr.
Okamoto. They understood the underlying message, and I
expect even greater progress and growth under the new management structure.

What factors will drive corporate governancegoing forward?

Mizukoshi: External directors are outside the internal order andsee the world and the circumstances at other companies from adifferent angle. Because of this—and TIS may be atypical—I cansay, “Hey, there’s another way to look at that issue.” I can present my opinion as the view from an employee or a shareholder.
What I’m getting at is that external directors expand the scopeof director diversity. I believe it will be companies with a highdegree of diversity that are able to make the bold decisions
required to meet future needs. No business is without risk but it’s
possible to reduce risk not to miss a chance by considering different perspectives. As an external director, I will continue towatch for changes in the business environment and question
uncertainties from diverse stakeholder perspectives. I hope thatby offering frank opinions I will help enhance corporate governance and boost corporate value.

Medium-Term Management Plan

Nomination Committee spent about two years inprocess to select new president

Mizukoshi: The selection process for a new TIS president wasgiven time and drew on multiple frameworks, including coaching feedback and 360˚ evaluations, but was also complemented
by committee discussion and opinion exchange with each candidate. Our decision was thus based on a combination of manyfactors. I believe the process to reach that decision was extremely
good. I hope TIS will continue to contribute to the development
and selection of next-generation corporate leaders through atransparent process.

Kuwano: OUR PHILOSOPHY highlights the idea of committing
to a style—one inspired by honesty—that infuses all corporate
activities and defines growth as headway in realizing our mission
and enhancing value exchange with stakeholders. What wereally want to emphasize, though, is a balance in value exchangewith stakeholders, namely, shareholders, clients, employees,
business associates and society as a whole. In this sense, too, it isa natural progression in corporate decision-making that compensation for directors be decided by the Compensation Committee,
which hinges on the participation of external directors.

Value Creation Process

Kuwano: As you point out, the Board of Directors now puts anemphasis on “bad news,” such as issues arising after business
investment. In addition, it’s important to understand the background to these issues, so we hold an information meeting forexternal directors before the Board meets to provide historicalperspective on agenda items. This allows for a fuller discussionof issues on the day the Board meets. We complement thisapproach with opinion exchange opportunities with outside
experts and study groups.

Kuwano: All directors receive coaching as a way to improve thequality of management of the Group. I, myself, received coaching, and during this time, I realized that the most important issue
I had was to decide on the next person to run this company. In
2017, around the time participants were chosen for pilot discussions on OUR PHILOSOPHY, I had the vague idea of selecting
potential successors to help shape OUR PHILOSOPHY. Since April
2020, my coach and I had two-on-two meetings with each of
the four candidates and their respective coaches. Lots of questions were fielded from coach to candidate about thoughts on
top management, and I conveyed my own thoughts about
issues each candidate needed to address. This was a major­eye-opener for them and surely provided an opportunity forreflection and growth.

What does the TIS INTEC Group do?

Mizukoshi: When OUR PHILOSOPHY permeates the TIS INTECGroup, corporate governance is strengthened and the businessfoundation becomes even firmer. I was appointed as an external
director at TIS in June 2018, and through annual evaluations of
the Board of Directors’ effectiveness over the years, I have beenable to get the Board of Directors to take the time to exchange
opinions on highly important issues and medium- to long-term
strategies and then pursue discussion. Such topics include thestatus of business investment and overseas operations, the profitability of service-type businesses and the diversification ofhuman resources. I also asked for early notification on evolving
issues, particularly unfavorable news, to expedite discussion ofsolutions. I think my suggestions have led to a more resilientmonitoring structure. Sustainable improvement in corporate
value is dependent upon how quickly adverse news is shared todecision-makers to expedite responses and minimize risk. No
matter how high business results climb, if a company loses thetrust of society because of some scandal, its corporate raisondêtre will be called into question. A company grows precisely
because it has the trust of society and it is regarded as a goodcompany for stakeholders. That’s why efforts to reinforce corporate governance are so essential.

58

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

Risk Management

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
Emanagement
S G 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 governing internal control systems, we are implementing specificmeasures 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 the Board of Directors. Based on the reports to the Board of
Directors, initiatives will be implemented to further strengthen and improve the Groupwide internal control system.

10

39

Financial risk

4

14

Hazard risk

39Operational risk

10

40

Hazard risk
Overview of risk

Main countermeasures

Pandemics (theglobal spread ofcommunicablediseases)

Risk items• A sharp constriction of the productive activities ofour employees 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.

Evaluation

2

3

4

5

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

Natural disasters• A large natural disaster results in an extended power • Make preparations to facilitate our data centers’ response to all manner of disasters.
outage that interrupts the smooth operation of data • 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,
centers.
emergency power generators, fuel storage equipment, and highly reliable electric power
equipment, and negotiate contracts for prioritized power supply.

5–6

Medium risk
Implement countermeasures andcheck risk trends periodically

2–4

Low risk
In principle, adopt a wait-and-see stanceOperational risk
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
holding meetings with and sending questionnaires to our partners regularly so that wefully understand their situation and capabilities, and are able to build strong relationships.

• System problems arise due to human error or
equipment malfunctions during system operationand the Group is unable to provide services at thelevel agreed upon with the client.

• Develop a systems maintenance/operation framework based on ITIL (Information
Technology Infrastructure Library) practices and improve system operation quality using
this framework.
• Establish and strengthen measures for early detection and confirmation of system failures
and measures to reduce and prevent the occurrence of failures.

• Establish and operate an information security management system based on ourInformation security • Confidential information is leaked or manipulatedInformation Security Policy that seeks to ensure appropriate information management.
due to a computer virus, unauthorized access, or• Raise employee awareness through education and training programs.
other reason leading to claims for damages fromclient companies and to a loss of trust in the Group’s • Apply the Group’s information security promotion guidelines to check and evaluate thestatus of information security management across the entire Group, and promote
services.
continuous improvement in information security.
• When an information security breach does occur, establish an investigative committee
and set up the structure of responsibilities, including looking into the cause, implementing countermeasures, and preventing recurrence, for problem resolution.
To protect personal information• Establish an information management system based on Japan’s Personal Information
Protection Act and regulations on the handling of individual numbers and information
about specific individuals.
• Conduct education and training programs for employees to thoroughly raise theirawareness of the importance of protecting personal information, which will contribute tomore appropriate handling of personal information, including stronger management ofclient information• Implement security measures using a zero-trust security model to address the diversification of workplaces with the full-scale implementation of working from home.

Platform that Supports Value Creation
Process (ESG section)

Strategic risk

1
Great

Risk items
Systemdevelopment

Priority risks shared by
all Group companies
Implement Groupwide 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■The Group’s risk recognition

The Group defines “risk” as “any factor that may hinder the achievement of the management philosophy, goals, and strategies of
the Company and the Group by causing economic loss; the interruption, stagnation, or suspension of business operations; and/or
damage to the Company’s credit or brand image”. The Groupwide risks are classified into strategic risks, financial risks, hazard risks,and operational risks according to the Group's rules on risk management.

Strategic risk
Risk items
Human resources

Innovation of
production
technology

Intensification ofcompetition, pricecompetition

Overseas business

59

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.
• In order to prevent discrimination and harassment, provide education and enlightenment
activities aimed at building good interpersonal relationships and establishing smoothcommunication, and take fair and strict action in the event that incidents occur.
• Promote human rights due diligence based on the UN Guiding Principles on Business andHuman Rights.
• Constantly conduct research into information technologies as well as production and• Loss of competitive advantage because we fail todevelopment technologies.
respond quickly to advances in information technology and to changing market needs that parallel these • Select from a broad technology portfolio the core technologies that will enable us tosustain and improve our development competitiveness, advance R&D and deploy theadvances.
results.
• Continuously carry out productivity innovation activities and enhance the digital transformation value it provides.
• Price competition intensifies more greatly than
• Constantly analyze the business environment to better grasp customer needs, offer higher
expected.
value-added services and take other measures to differentiate from competitors.
• Improve productivity by curtailing unprofitable projects and engaging in productivity
innovation activities.
• The expected result or return cannot be obtained.
• All investment decisions are made after thorough examination of business plans by either• Assets become obsolete.
the Board of Directors, the CVC Investment Committee, or the Investment Committee.
• 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.
• Improve the management structure by ensuring coordination between overseas Group• Overseas business is impacted by various factors,
companies and business sites and corporate management in Japan to maintain an
including global economic and foreign exchange
accurate understanding of local conditions and consult on ways to implement rapid
trends, legal regulations on investment andcountermeasures.
competition, local business practices, and labor• In order to enhance the system for governance of overseas subsidiaries and affiliates,
management relations.
make efforts such as dispatching human resources to the business company and setting
up a “Global Financial Planning Office” at TIS.

System operation*TIS and other Group companies have obtained Information Security Management System (ISMS)
certification and the JIPDEC PrivacyMark.

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

• Establish a compliance structure based on our Basic Direction on Corporate Sustainability
and Group Compliance Declaration and endeavor to conduct our business activities fairly
and in compliance with all laws.
• In accordance with the Group’s compliance regulations, discuss important complianceissues for the entire Group, decide measures to prevent recurrence, and ensure theadoption throughout the Group by monitoring the status of the implementation of thesemeasures.
• Especially for the tightening of 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, and create Group guidelines and independent
inspection checklists that will contribute to the appropriate 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.

Intellectual property • The Group is accused of infringing anotherrightscompany’s intellectual property rights and presented
with an injunction and a claim for damages.

• Strengthen our framework for intellectual property rights.
• Conduct education and training programs to raise employees’ awareness.
• Regard the Company’s own intellectual property as an important management resource
and take all necessary means to protect this valuable resource.

60

Corporate Data

Investment

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

Main countermeasures• Thoroughly examine issuers’ financial condition, business results trends, credit ratings,
and other relevant indicators.
• Regularly review the suitability of our securities holdings and reduce them if thesignificance of continued holding is deemed diminished.

Medium-Term Management Plan

Items

Degree of damage

Subcategories

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

Risk occurrence frequency

Definition of risks
Main categories

Risk items
Owned securities

Value Creation Process■Management process diagram

Financial risk

What does the TIS INTEC Group do?

S G

GovernanceS G

Quality Control and Production Innovation

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

E S G

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.

■ Trinity: Original quality management system based on ISO 9001

* 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:

The TIS System Development & Quality Management Innovation SBU and the Technology & Innovation SBU are spearheading thefollowing activities aimed at improving the quality, productivity and technical capabilities of the entire Group and harnessing Groupsynergies.

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

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

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

Enhancement
activity presentation
Service manager
training

Shared use ofoffshore BP

Tech Lead Team activities*Multiple technology platform, canal, supported by
120 senior engineers

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

Value Creation Process

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 andmaking use of onsite ingenuity.” At development sites, we employ ingenuity to
tailor each business model appropriately while applying standard 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.

■ Activities aimed at improving standards across the entire Group

Revitalize canal**Technical support/Q&A service site

Events, such as
offshore colleges

Introduce architect reviews to eliminate
technical risks

Results in fiscal 2021, ended March 31, 2021
●TIS companywide review proposals: 61●TIS system development meetings: 193●Group Technology Enhancement Committee meetings: 11 ●Number of Group screenings: 196●Group Quality Executive Committee meetings: 21

Development losses and loss rate

We will continue to innovate Trinity as a quality management system that supports the business of our Group. In addition to systems
integration (SI), we are currently developing Trinity Version 2 for service-oriented businesses.

Business structurereformSI
Realization ofcustomer requirements

Service
Provision of value
to the market

Improve quality and productivity
of system development

Improvement ofservice value

top brand that epitomizes quality”(1,000 work months)(TIS parent)

44.7
2.1%

19.4

15.2

14.5

16.0

12.0
10.0

Market creation andsocial contribution

Toward a framework that supports a “trusted(TIS parent)

Offshore outsourcing contracts

0.6%

Fiscal2017

Fiscal
2020

0.8%

5.6
0.4%

Fiscal2021

Fiscal2022(estimates)

Fiscal2017

Fiscal
2020

Fiscal2021

Fiscal2022(estimates)

Fiscal2017

Fiscal
2020

Fiscal2021

Gross margin on
development up 8.9
points throughemployment ofvarious measures(comparison withfiscal 2017,
TIS parent basis)

Fiscal2022(estimates)

Innovate the management systems in line with business expansion and innovation■ Initiatives in team management styles that are compatible with the new normal■ Service management system “Trinity Version 2”

Service quality
management

Promotingthe useof knowledge

Incident
management
and utilization

Audit

Activities ofthe organization

Resource
improvement

Service portfolio management
Service provision

Service provision

Service provision

Planning

Planning

Planning

Serviceproduction

Serviceproduction

Serviceproduction

Operation

Development

Operation

Development

Operation

From fiscal 2022, we are working to reform our team management style to become an organization that continues to improve quality
and productivity even in an environment where remote work is the norm.

Achieve the best working style by enhancing the seven elements of teamwork
Psychological safety
Mutual trust

Shared vision andgoals

Division of duties
Mutual understanding

Communication that can demonstrate teamwork in any context
Ensuring transparency

Expressing creativity

Learning and feedback

A new communication style adapted
to remote working environments
Corporate Data

Service provision activities

61

Organizational PDCA

Trinity Version 2 integrates an ISO 9001-compliant quality management system and an ISO 20000-compliant service management system.
We are promoting improvement through both service provision activities and organizational activities. Among service
provision activities, we aim to continuously improve the value of
our services to our customers, the market and society throughthe service life cycle of planning, development and operation.
Organizational activities aim to achieve improvement targets
through a systematic improvement plan–do–check–adjust(PDCA) cycle that includes support and governance of service
provision activities.

Platform that Supports Value Creation
Process (ESG section)

Renewal of
Trinity(100 millions of yen) (TIS INTEC Group)Group Vision 2026
strategic domain

Trinity Ver.2

Enhance profit margin

Medium-Term Management Plan

https://www.tis.com/group/csr/report/social/quality/■ Innovation in Trinity

What does the TIS INTEC Group do?

GovernanceE

Thorough visualization of the statusof the project team members
Self-organized teams

Development

62

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

Stakeholder Engagement
With Employees

Sustainable engagement to enhance value exchange between
E S G
employees and the Company
We are striving to improve work engagement so that our members can be active “movers” and fulfill the wishes of society,which is our raison d’être.

Major initiatives

Sustainable engagement
Sense of fulfillment
Increased happiness

Opportunities &experience/Compensation

Improving the value
provided to society

Presence

Enthusiasm
Strengthening engagement
through shared purpose

Vitality■ For all employees to grow and play
an active role as movers

Life force

Devotion
Employees
Value as a professional

Diversehuman
resourcesreformHealthmanagement

We aim to help employees increase their sensitivity to social issues and grow as individuals. In addition, we are expanding our programs to support the activities of our employees and thus create an environment where they can perform better regardless of theirliving conditions.
This program permits employees to take extended absences and work shorter hours for non-work reasons such as dual employment,
volunteering and recurrent training.
2. Life stage support program
We have work programs in place to support employees in balancing life and work during various phases of their lives, including pregnancy, childbirth, childcare, nursing care and illness. In fiscal 2021, we established programs and consultation services that can be usedequitably by diverse employees, including sexual minorities, and have strengthened our anti-harassment measures to ensure that employees can work with peace of mind.
Percentage of female employees
in management positions
14.0%
12.0%
10.0%

9.2%

9.8%

Based on the Group’s business portfolio strategy, we have visualized the human resource requirements in each area. In addition, we have
prepared a framework that shows the careers our employees are aiming for and where they stand in their career progression. The visualization of human resources is effective for performance development, which encourages the proactive growth of all employees, as wellas the flexible promotion of strategies to increase the value of human resources. Through this framework, it is possible to envision
growth goals and long-term careers, and to offer specific support to each individual.
To develop human resources who can respond to changes in society and business and create high added value, we have set targets
for investment in training and securing time for learning, and are actively working toward them. We also focus on the development of
human resources who will lead the digital transformation (DX) of society. We have also developed and strengthened the necessary
training programs and provide them to our employees.
Talent analysis,
strategic planning

Optimal allocation of talent throughout the Group
Prioritizing promotion and talent development

Clarification of rolesand capabilities

Establishing new duties and functions and required competencies
Use in recruitment and training

Self-directed
career development

Sharing medium- to long-term growth goals through career interviews with supervisors
Supervisors support growth through one-on-one meetings, etc.

Training system(Enhancement of DX promotion capabilities)

Strategic investment in training
Securing training time (setting target number of days of training per person)

6.0%

Training system Standard courses are developed for different levels and purposes. We are promoting learning as a daily activity.
Fiscal 2020
TIS

Major initiatives■ Promotion of employment of persons with disabilities■ Support for LGBTQ+■ Growth support program

Corporate Data

4.0%

0%

63

■ Teleworking program with no upper limit■ Measures against long working hours■ Improvement of vacation program and promotion of vacation usage■ Strategic development and investment in training

11.2%

2.0%

■ Promotion of employment of seniors■ Initiatives for global human resources■ Life stage support program■ Flexible work system with no core time
■ Smart work allowance (deemed overtime allowance)■ Appropriate attendance management

Careerframework

8.0%*This covers TIS, INTEC, AGREX,QUALICA, AJS,TIS System Service and TIS Solution Link.

~A better life means a better quality of work~

Having a fulfilling and happy life outside of work is directly linked to better performance at work. The Group is working to expand andimprove work styles, which is the foundation for a healthy and fulfilling life in society.
By flexibly selecting and combining various systems in accordance with individual work and lifestyles, it is possible to voluntarily adapt
to changing environments. We were able to flexibly respond to the coronavirus pandemic and continue our business without losing
productivity.
In particular, telework, a work style that does not depend on location, is being reevaluated for its merits of seamlessly executing workfrom remote locations, which not only brings about a better work–life balance, but also reduces the number of unaccompanied job
postings and deters employees from leaving their jobs due to spousal transfers or nursing care.

12.8%
11.2%

10.7%

Learning

Platform that Supports Value Creation
Process (ESG section)

1. Growth support programGroup target* : 11.2% or more
TIS parent target : 12.8% or moreDual
employment

Major initiatives■ Advancement of diverse talent

Targets for April 2024

Life
Hobbies andinterests

Medium-Term Management Plan

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 throughhuman resource engagement activities, proactive health management and workstyle reform. Our aim is tomotivate the workforce and continue to foster flexible, continuous change and untapped value.
Workstyle■ Improving health literacy■ Work-interval program■ Health management (medical checkup and stress check)■ Collaborative health (health insurance association)■ Enhancement of benefit programs (various insurance, pension and non-statutory benefits)■ Establishment of counseling contact point■ Work-life integration

Companies■ Group Diversity and Inclusion Policy

Region

Work

Trust

The Group considers “diversity fusion” as one of the states that management should aim for.
We aim to increase engagement and create innovation by ensuring that every employee is invested in the meaning of corporate
activities (our purpose) and that all employees continue to demonstrate their strengths and grow within the organization.
Pursuit of diversity and inclusion is an essential management strategy for realizing our mission “to brightly color
the future” by creating diversity fusion.

As an indicator to measure theparticipation of our diverse humanresources, we have set a target for
the ratio of female managers inthe seven major Group companies*.

We are promoting measures to improve the quality of life for all employees in accordance with the Group’s health management policies.
In fiscal 2021, the coronavirus pandemic caused telework to expand and significantly changed our lifestyles and working environments.
To prevent physical and mental illness associated with change, industrial health staff, human resources and the health insurance association are working together to improve the well-being of employees and the organization by disseminating health information, stimulating
communication and holding health seminars.

Value Creation Process

In our Medium-Term Management Plan (2021–2023), we
have positioned “sustainable engagement” as the cornerstone of our human resources strategy.
By providing employees with compensation, development support, opportunities and HR services that arecommensurate with their value, companies can motivatethem to contribute and achieve more professionally.

■ Health management

What does the TIS INTEC Group do?

S GSocialFiscal 2021

Seven main Group companies*

Fiscal 2024
(target)■ Promotion of women’s participation■ Communication (one-on-one, mentoring program)■ Diagnostic organizational development

Managerial talent✓ Coaching✓ Strategy mentoring✓ Training assessment

Talent to lead a domain✓ Business creation✓ Consulting✓ GlobalTechnical skills✓ Project management✓ Engineering✓ Fundamental technology✓ Business skills

Common themes✓ Diversity✓ One-on-one✓ Career design✓ Mutual learning among employees(Waku Waku School)64

SocialE

S G*TIS has been conducting the survey since fiscal 2016 and expanded the scopeof the survey to major Group companies from fiscal 2020.

TIS Integrated

TIS Credit

TIS INTEC Integrated

70

70
62

60
50

56
48

■ TIS INTEC Group Business Summit

51

The Group holds its well-attended TIS INTEC Group
Business Summit every year to present the Group’s­services utilizing our advanced technologies and­know-how through sessions and exhibits.

46

40
30
20

Building sustainable, trusting relationships with clientsand business partners through communicationss

E S GPresident Okamoto greets attendees at the online event*We canceled the fiscal 2021 event due to the spread of
COVID-19.
Fiscal 2020

Fiscal 2021

Fiscal 2024 target

Fiscal 2024 “Integrated” score targets

Value Creation Process

To measure the level of engagement with employees, the Group
conducts an employee awareness survey every fiscal year* that asks
about the actual state of job satisfaction based on five elements:
trust, respect, fairness, pride and solidarity. The results of the survey
are included in the evaluation of officers. (The “Trust” scores are inscope until fiscal 2021. From fiscal 2022 is an “Integrated” score).
In fiscal 2021, we made progress in disseminating and utilizing themeasures we have been working on, such as one-on-one meetings
and flexible work styles, and the Group improved its scores in allelements. We will continue to strive for further improvement in employee engagement across the entire Group so that all major Group
companies will exceed 50% in fiscal 2024.

80

What does the TIS INTEC Group do?

■ Sustainable engagement metrics

Stakeholder Engagement
With Clients and Business Partners*Fiscal 2022 summit was held online in July 2021, with a strong
attendance.

TIS parent: 70% or more (level of best companies)
TIS and INTEC : 62% or more

■ Relocation and consolidation of Group offices (Tokyo area)■ Implementation of Customer Satisfaction Survey
TIS Inc. conducts an annual Customer Satisfaction Survey for customers with whom it does business to gauge our performance from thecustomer’s perspective. In the survey, the ratio of customers answeredthat we were “An irreplaceable business partner” increased, thanks
to our strong reputation for service quality, and for providing honest
and sincere responses.
It is vital that we be able to respond to future expectations regarding our proposals and information provision, and we are promoting
measures to strengthen our sales and consultant capabilities. As agroupwide improvement activity, we integrate similar surveys at maingroup companies into this TIS survey.

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

Medium-Term Management Plan

We are relocating and consolidating our main offices in the Tokyo area into two core offices to promote the work style reform in theGroup and facilitate inter-Group communication. The Nishi-Shinjuku Office will consolidate corporate functions to strengthen Group
governance, while the newly opened Toyosu Office will consolidate the Group’s business functions to strengthen the Group’s solidarity inbusiness and accelerate structural transformation. Furthermore, the total footprint of our Tokyo area offices will decrease due to a review
of office space with new work styles reflecting the new normal.

72.7%
69.1%

68.2%

Fiscal2018

Fiscal
2019

69.0%

61.3%

Fiscal2017

Fiscal
2020

Fiscal2021

TIS holds a TIS Business Partner Forum (previously Socials) every year to show its appreciation to its business partners. From fiscal 2022,
we will also be using these events to introduce TIS’s management policies and measures from various perspectives to increase satisfaction and value exchange with business partners.
*The 2022 forum was held online in June 2021, with a strong attendance.
Stadium benches installed in the new offices for work style reform and to improve
productivity

The TIS INTEC Group Innovation Hub aims to become a magnet for opinion leaders frominside and outside the Company to gather to create new value.

We will continue to evolve our programs so that all employees can continuously demonstrate their abilities.
Kyoko Takayanagi, TIS Executive Officer, Department Manager of Human Resources Dept. and Deputy Division Manager of Human
Resources SBU

65

The Group expanded its capacity for internal and external collaboration to create new value in concert with its business partners. An
important part of this drive was the establishment of the TIS INTEC Group Innovation Hub, the Group’s incubation center, at the Toyosu
Office on April 1, 2021.

■ Promote sustainable procurement policies
The Group believes that it is important to collaborate with stakeholders to implement sustainable procurement measures consistently
throughout the entire supply chain. Accordingly, the Group promotes the promulgation of guidelines based on its sustainable procurement policies. For more information see

https://www.tis.com/group/sustainability/policies/procurement/

66

Corporate Data

To achieve continuous improvement in value exchange between employees and the Company, the Group has been actively investing inhuman resources with the aspiration that all employees will grow. The results of such efforts are steadily becoming visible in job satisfaction scores and business performance.
Even under the pandemic, we are designing programs and creating an environment that allows employees with diverse work styles tochoose from multiple options, combine them, and flexibly change them as their circumstances change so that they can achieve higher
performance regardless of their living conditions. In this way, new ways of working such as remote teleworking are being progressively
adopted. In addition, to ensure that diverse employees, including sexual minorities, can access the various programs equitably, we arealso refining the program content and consultation desks.
Going forward, we will continue to support our employees to the fullest, further evolving our talent programs so that all employees– who are the driving force of our Group’s growth – can enhance their abilities as self-directed individuals and continuously demonstrate their value to our customers and society.

■ Established TIS INTEC Group Innovation Hub to promote open innovation

Platform that Supports Value Creation
Process (ESG section)■ Convening TIS Business Partner Forum

E

E

S G

Stakeholder Engagement
With Shareholders and Investors■ Fast, fair and impartial information disclosure, and dialogue with shareholders

E
S Gperformance results and the latest news on our business activities through events, such as information meetings, the proWe provide
duction of pamphlets (available as PDFs), and through the comprehensive information we provide on our website. We engage in constructive dialogue with shareholders and investors in the interests of the Company’s sustainable growth.
IR Events in Fiscal 2021

Frequency

Contents

4 timesQuarterly briefings

Once

Held a meeting regarding global business

Small meetings for analysts and institutional investors*

235 times

Provide IR-oriented information for analysts and institutional investors. Of these meetings,
98 were for overseas investors. Total coverage: 362 companies (423 people)

Overseas roadshows*

2 timesPresident, director responsible for overseas IR and other members of senior management
met with shareholders and investors in Europe, and the United States

IR conferences for individual investors*

Once

Held an online live conference (409 participants)

Production of materials for individual investors

2 timesIssued “Business Report”

Stakeholder Engagement
With Local Communities and Society

E S G

Co-creation with local communities

We will strive to develop and create value in local communities through dialogue and cooperation, and enhance thevalue-exchangeability with society.
The Group will promote the provision of new choices to society, while understanding and working to mitigate thenegative effects of rapid social change.

■ Realization of a resilient society
We are promoting linkages with various stakeholders to develop safe and convenient solutions for various aspects of people’s lives andto create a richer lifestyle for society as a whole.
Linkages with national and local governments
We are engaged in the verification and provision of advanced regional digital and ICT services through smart city–related projects at Japanese national and local
government levels.

*During fiscal 2021, we held online events excluding partial events.

■ Initiatives to revitalize General Meetings of Shareholders and facilitate the exercise of voting rights
Contents
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 13th Annual General Meeting of Shareholders scheduled for June 24, 2021, on June 2, 2021.

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

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, 2021.

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, 2021.

Assabu Town
ISOU Project, a proof-of-concept project for next-generationtransportation and energy solutions in depopulated areas

Toyama District
Proof-of-concept experiment for sensor network towards therealization of a smart city using the FIWARE urban operating system

Minamisoma City
MLIT “Smart City Priority Business Promotion
Project”

Hokuto City
ISOU Platform to support local energy
production for local consumption

Basic Policy on IR Activities

67

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 Law (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.
https://www.tis.com/ir/other/policy/■ Corporate social responsibility activities
Our social contribution activities address social and environmental issues and materiality, in line with OUR PHILOSOPHY.
T-Move Project

We are promoting projects to brightly color the future by providing Group employees with various opportunities to contribute to society. By building social
contribution programs with local partners and offering them to employees, we aim to provide both value to society and experience-based personal growth
opportunities for participants.

Themes of social contribution programs
障がい・難病Children

１01

People withdisabilities

Developing
countries

Supporting the independenceof people with disabilities

Aiming for a world where producers
and workers in developing
countries are fairly compensated１02

Brightly coloringchildren’s futures

１
03

Local
communities

１04

Involvement in
the revitalizationof local communities

Disaster
areas

１
05

Preserving the memoryof disasters

Corporate Data

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 other capital
market participants and to building trusting relationships based on fullcommunication 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.

Basic Policy on Disclosure

Platform that Supports Value Creation
Process (ESG section)

Okinawa prefecture-wide
MLIT “New Mobility Service Promotion Project (Advanced Model)”,
MLIT “Japanese Version MaaS Promotion and Support Project”■ IR Policy
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 in general.
By engaging in proper disclosure and constructive dialogue through its
investor relations activities, the Company also aims to promote understandingof the Group, develop long-term trusting relationships, and earn fairassessments of its corporate value.

Koto Ward
MLIT “Smart City Priority Business Promotion Project”
Ota Ward
MLIT “Smart City Priority Business Promotion Project”

Hamamatsu City
MLIT “Japanese MaaS Promotion and Support Program”

To prevent the spread of COVID-19 and to facilitate attendance by all shareholders at the General Meeting of
Shareholders, without disadvantage to regional shareholders, we live-streamed the event.

Purpose of IR Activities

Aizuwakamatsu City
Cabinet Office, “Strategic Innovation Program/Cyber Space
Infrastructure Technology Utilizing Big Data and AI”;
Ministry of Economy, Trade and Industry, “Proof-of-Concept
Project for the Last Mile of Logistics Using Autonomous
Mobile Robots”.

Higashimatsuyama City
MLIT “Smart City Priority Business Promotion
Project”

Medium-Term Management Plan

Early dispatch of notice of General Meetings ofShareholders

Sapporo City
Ministry of Land, Infrastructure, Transport and Tourism(MLIT) “Japanese MaaS Promotion and Support Program”

Value Creation Process

Results briefings for analysts and institutional investors*
Business briefings for analysts and institutional investors*

SocialWhat does the TIS INTEC Group do?

S GSocialIn fiscal 2021, we provided a non-face-to-face activity program given restrictions in the face of the coronavirus pandemic.
*For more information on other activities, please refer to the TIS INTEC Group website.
Realizing a resilient society: https://www.tis.com/group/sustainability/business/
Social contribution activities: https://www.tis.com/group/sustainability/social/community/

68

S G

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

Stakeholder Engagement
For the Global Environment

Initiatives to address climate change

E S GAgainst the backdrop of growing international concern about the environment in recent years, the Group has establishedan environmental vision and policy, and has set medium- and long-term reduction targets for CO2 and other greenhousegas (GHG) emissions, with regard to climate change issues, which are of particular priority and concern to the Group. We
will promote businesses that contribute to improving the energy efficiency of society as a whole by making full use ofdigital technology.

■ Environmental targets for climate change in the medium and long termGroup GHG emission reduction target
for fiscal 2031
Scope 1+2 : 27.5% reduction versus fiscal 2020
Scope 3
: 27.5% reduction versus fiscal 2020

*One of the metrics for GHG reduction
targets. A framework that encourages
the setting of GHG reduction targets,consistent with the 2°C/1.5°C targets(limiting the temperature increase frompre-industrial revolution levels to less than
2°C and referring to efforts to limit theincrease to 1.5°C) called for by the Paris
Agreement adopted in 2015.

Ratio of GHG emissions in the Group (actual results for fiscal 2021)

Ratio ofCO2 emissions

Waste from businessTransportation and delivery (upstream)
0.1%
0.1%
Fuel and energy-related activities
not included in Scope 1 and 2
Capital
2.6%
goods
17.7%
Ratio ofCO2 emissions

Percentage of
Scope 1 and 2 at datacenters
Business travel
0.5%
Employees’ commute
1.7%
Offices
16.9%
Ratio ofCO2 emissions

DC
83.1%

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

■ Governance
The Group regularly deliberates on policies and responses to environmental risks and opportunities, including climate change, under the
structure described on the right.
(1) Corporate Sustainability Committee
Deliberation and information sharing on important matters related to corporate
sustainability activities(2) TIS Energy Conservation Promotion Conference
Discusses and reports on the setting and achievement of environmental targets,
such as electricity consumption in TIS offices and data centers(3) Group Corporate Sustainability Officers Working Group
Sharing the status of TIS INTEC Group’s ESG-related activities and goals to beachieved

Initiatives to achieve the Group’s GHG reduction targets• Consolidation (optimization) through data center consolidation: Reduce CO2
emissions per unit through consolidation• Implementation of systematic switchover to renewable energy sources
Measures to reduce GHG emissions in offices• Consolidation of Group offices in each region• Consideration of energy conservation measures involving building owners:
Inquiring about LED lighting, energy conservation of air conditioning
equipment, etc.
Other measures to reduce GHG emissions• Further promotion of telework and remote meetings: Reduce the use of public
transportation for commuting and business travel, thereby indirectly reducing
CO2 emissions• Considering reduction measures in collaboration with suppliers

Management Committee
Corporate Sustainability Committee

TIS Energy
Conservation
Promotion Conference■Climate change (decarbonization, low carbon, and flood damage measures)
CO2 emissions

Temperature rise

Torrential rain andsea level rise

Fossil fuel*We have already set a goal of raising the renewable energy utilization rate to 50%
by fiscal 2030 for eight of our 14 data centers nationwide. Together with the effectsof the planned data center consolidation by fiscal 2024, we estimate a potential
reduction of GHG emissions from data centers of 67% (versus fiscal 2019). We plan
to expand our efforts to other data centers in due course.
70,000Long-term simulation of
GHG reduction in Scope 1 and 2

Electric power company(power generation)
OIL
Thermalpower plant
Solar, etc.

The Group: (Office DC)
power consumption
Electric power

Renewable energy

Initiatives

CO2 emission
reduction

40,000Service provision
The Group: Grid-related business

30,000

Opportunity: Contribute to the further
expansion of renewable energy through thepromotion of P2P trading of clean power(non-FIT power sources) and the mass use ofrenewable energy through ICT, AI, etc.

20,00010,00002019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Risk: Damage caused by flooding
Risk: Higher electricity charges due to rising temperatures
Risk: Increased costs due to use of renewable energy
Risk: Increased added expenses due to use of renewableenergySolution: Data center and office consolidation• Transition to flood-resistant data centers• Efficient use of electricity through data
center/office consolidation

CO2 emission
reduction(Cost increase)

60,00050,000Group Corporate
Sustainability Officers
Working Group

Promotion of CO2 emission
reduction measures

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

Reduction required WB2 (single year)
Simulation of Scope 1,2 emissions (single year)

Corporate Data

Toward the realization of a sustainable society
Tsuneyoshi Ito, TIS Executive Officer, Division Manager of Corporate Management SBU
More than five years have passed since the adoption of the Paris Agreement under the United Nations Framework Convention on Climate
Change and the Sustainable Development Goals (SDGs) at the United Nations Summit. There seems to have been a lot of progress in thelast few years, especially in the area of climate change, including the declaration of carbon neutrality by the Japanese government. Under
the brand message of “Make society’s wishes come true with IT”, our Group’s mission is to help solve the world’s problems through digitaltechnology. We believe global environmental issues are indeed one of the social issues that need to be addressed.

69

Platform that Supports Value Creation
Process (ESG section)

Measures to reduce GHG emissions in data centers

Board of Directors

Correlation between the environment and the Group’s business (image)

Products andservices purchased
77.3%

Scope 2
98.9%

Scope 1 + 2 emissions (t-CO2)

Scope 1
1.1%

Percentage in
Scope 3 by category

What are the TCFD recommendations?
The TCFD was established under the Financial Stability Board (FSB), an international organization working to stabilize the financial system, and in June2017 released recommendations calling for disclosure of information on the risks and opportunities posed by climate change. The recommendations stressthe importance of companies recognizing the risks and opportunities of climate change and incorporating them into their business strategies.

Medium-Term Management Plan

Percentage in
Scope 1, 2

On June 4, 2021, the Group endorsed the recommendations of the Task Force on
Climate-Related Financial Disclosures (TCFD).

Value Creation Process

With the aim of becoming carbon neutral in 2050, the Group aims to reduce GHG emissions in fiscal 2031 by 27.5% compared to fiscal
2020, based on the reduction target (WB2C scenario) in line with the 2°C target of the Paris Agreement. This reduction target satisfies
the SBT (Science Based Target)* requirement and has been certified as such.

■ Information disclosure in line with TCFD recommendations

What does the TIS INTEC Group do?

Environment

E

Therefore, in addition to reducing GHG emissions, we are contributing to the decarbonization of energy based on our long track record in energy business systems
and shifting to low-carbon data centers in our data center business. As well as reducing the environmental impact of our operations, we are constantly looking for ways
unique to our Group’s business to pass on a healthy global environment to future generations and putting these ideas into action.
The Group will continue to contribute to the realization of a sustainable society by addressing global environmental issues such as climate change.

70Financial Review

Cash Flow Status
Net cash provided by operating activities amounted to ¥33.3 billion, down ¥5.2 billion from the previous year; Net cash used ininvesting activities totaled ¥17.5 billion, down ¥8.9 billion; Net cash used in financing activities was ¥12.4 billion, up ¥27.0 billion.
Free cash flows increased ¥3.6 billion to ¥15.8 billion, maintaining high standard. This was due to aggressive investment ingrowth, including acquisition of intangible fixed assets to promote our service-style business and the establishment of a Toyosu
Office to facilitate new working-styles through group integrated management in the post-COVID era.

■Fiscal 2021 Results■Fiscal 2022 Forecast

Fiscal 2020
443,71744,83910.1%

Net sales
Operating income
Operating margin
Net income attributable to owners of
the parent company
Net income ratio
Net income per share (Yen)ROE

Fiscal 2021
448,383
45,74810.2%

YOY changes+4,666(+1.1%)+908(+2.0%)+0.1 points—

29,411

27,692–1,718(–5.8%)

6.6%
116.7812.5%

6.2%
110.51
10.8%–0.4 points–6.27–1.7 points—(–5.4%)—Net sales
Operating income
Operating margin
Net income attributable to owners of
the parent company
Net income ratio
Net income per share (Yen)ROE*2

Fiscal 2022 (estimates*1)
470,000
48,50010.3%

YOY changes+21,617(+4.8%)+2,752(+6.0%)+0.1 points—

27,69232,200+4,508(+16.3%)6.2%
110.5110.8%

6.9%
128.7811.5%+0.7 points+18.27+0.7 points—(+16.5%)—*1 Including impact of decreased sales by the application of Accounting Standard for Revenue Recognition.
*2 ROE for fiscal 2022 is a calculated value.

Fiscal 2022: Operating Income Analysis, Increase/Decrease Reasons [Forecast] (Billions of yen)

+5.65

+3.63

–6.54

48.50

45.74

Plan

26.2%

[YOY change +0.8 points]

Main factors: Loss on valuation of investment securities ¥1,111 million
Impairment loss ¥2,467 million

Fiscal 2021: Operating Income Analysis, Increase/Decrease Reasons (YOY change) (Billions of yen)

Fiscal2021

Increased Improved Increased
sales
profitability
SGA
expenses+2.75(+6.0%)[Of which, effect of new
subsidiary consolidation,etc. was +¥0.33 billion]

Gross profit margin● Extraordinary losses: ¥4,150 million

Main factors: Gain on sales of fixed assets ¥3 million
Gain on sales of investment securities ¥9,497 million

Fiscal 2021
448,383
45,748
10.2%

Fiscal2022

Anticipated prior investment costs for promoting
structural transformation:
Up ¥2.50 billion (YOY change)(Cost of sales: +¥1.00 billion, SGA expenses +¥1.50 billion)

Costs related to✓ Software investment to create new services✓ Investment in human resources to fuel structuraltransformation✓ Investment in R&D to acquire advanced technologies
Anticipated cost of office reform to promote newworkstyles: Up ¥3.50 billion (YOY change)

Changes in SGA Expenses

Effect of new subsidiaryconsolidation, etc.
Office reform
Brand-related costs
Lower operating costs,
enhanced head office
functions
Prior investment, others

–0.50
+2.53

Total

+6.54

+2.01
+2.50
+0.00

(Cost of sales: +¥1.00 billion, SGA expenses +¥2.50 billion)*The forecast of consolidated results may be revised depending on developments related to COVID-19.

+4.84 *
44.83

–5.13 *

45.74

+1.20
Gross profit margin

Actual[Of which, effect of new
subsidiary consolidation,etc. was -¥0.11 billion]

25.4%[YOY change +1.5 points]* Excludes effect due to change from cost of sales
to SGA expenses, paralleling efforts to enhanceorganizational management (cost of sales down
¥1.77 billion, SGA expenses up ¥1.77 billion)

Fiscal
2020

Increased Improved Increased
sales
profitability
SGA
expenses+0.90(+2.0%)

Prior investment costs for promoting structuraltransformation:
Up ¥0.12 billion (YOY change)(Cost of sales: +¥0.48 billion, SGA expenses -¥0.36 billion)

Costs related to✓ Software investment to create new services✓ Investment in human resources to fuel structuraltransformation✓ Investment in R&D to acquire advanced technologies
Fiscal2021

Brand-related costs incurred to ensure quick­recognition in market:
Up ¥0.70 billion (YOY change)

Changes in SGA Expenses

Better employee benefits +2.25
Effect of new subsidiaryconsolidation, etc.
+2.47
Brand-related costs+0.70
Enhanced organizational
management+1.77
Lower operating costs, enhanced
head office functions–1.88
Prior investment, others +1.59
Total

+6.90

71

Fiscal 2022

Fiscal 2021
Annual dividend per share
Acquired treasury shares¥35 (+¥5 YOY)

¥40 (+¥5 YOY)

Total ¥3.02 billion

Total ¥4.47 billion

Total return ratio

42.8%

44.8%

Payout ratio

31.9%

31.0%

72

Corporate Data

Balance Sheet Analysis, Cash Flow Status
Balance Sheet Analysis
As of March 31, 2021, Consolidated total assets were up ¥68.1 billion from a year earlier, to ¥451.0 billion. Total liabilities increased¥36.7 billion, to ¥171.6 billion, and Net assets increased ¥31.4 billion, to ¥279.4 billion. Shareholders’ equity ratio was 60%, down
3.3 percentage points, due to the borrowing of ¥20 billion to increase liquidity of funds in case of unforeseen circumstances,maintaining high standards and financial soundness.

Return to Shareholders
The Company regards the return of profits to shareholders as a key management issue and has adopted a basic policy of maintaining sufficient internal reserves required for business growth from a medium- to long-term management perspective, while continually paying a stable dividend in consideration of its consolidated financial results. Based on this policy, we will raise the total return
ratio from 40% to 45% and constantly enrich the dividend per share to encourage a higher degree of shareholder engagement.
(For further information, see page 32.)
For fiscal 2022, the Company is aiming for annual dividends per share of ¥40, up ¥5 from a year earlier, a dividend increases forthe 10th consecutive fiscal year. As to share buybacks, we acquired treasury stock as planned, and expects about 45% of total
return ratio including dividends.
The upper limit of treasury stock held by the Company is about 5% of number of issued shares, and the excess is canceled.

Platform that Supports Value Creation
Process (ESG section)● Extraordinary income: ¥9,709 million(Millions of yen)

Medium-Term Management Plan

(Millions of yen)

Sales are expected to rise year on year, mainly reflecting capture of digital innovation demand from clients, with a full-year contribution to the performance by companies made subsidiaries during the fiscal 2021.
We continue investments for the future, including ¥2.5 billion of upfront investments to promote further structural transformation, and ¥3.5 billion of office reform cost to promote new workstyles (including ¥500 million temporary costs). We aim to offset
these expenses by promotion of value-added business and productivity improvement, for the further improvements of operating
income and operating margin.

Value Creation Process

Overview
The Group’s business activities were conducted under the extremely difficult conditions presented by the spread of COVID-19, whichhampered sales activities, including new proposals, especially in the first two quarters, April and May of 2020 under the state of
emergency declared by the Japanese government. Subsequently, however, business activities gradually recovered and have been
generally back to normal since the third quarter.
Net sales increased for the 11th consecutive fiscal year as the business environment normalized with an increase from companies
made subsidiaries during the fiscal year, and achieved the target which was revised up during the period.
Operating income also increased for the 10th consecutive fiscal year, and operating margin reached to 10.2% which exceeded
the revised target. Increase in operating income represents that the Group is steadily strengthening its foundation. For example,
the gross profit ratio rose 1.5 percentage points year on year to 25.4% due to the continuous efforts including improvement of
profitability for each project (despite some remaining issues), productivity innovation in system enhancement improvements and areview of the business portfolio. The result of these measures offset the increase in selling, general and administrative expenses,
mainly due to strategic investments for the future, such as better employee benefits and building stronger brand value.
Net income attributable to owners of the parent company was down year on year and well below the target. This is mainly due
to non-operating expenses and extraordinary losses incurred, because some overseas affiliated companies accounted for under theequity method that perform business relying on specific geographic regions or cross-border transactions were impacted by the
spread of COVID-19.

What does the TIS INTEC Group do?

Difficult economic conditions continued due to the impact of the spread of the novel coronavirus (COVID-19), and theoutlook has been clouded by factors such as a need to monitor how trends in infection impact the Japanese and global
economy. But, in the IT services industry, to which the TIS INTEC Group (“the Group”) belongs, demand is expected tocontinue increasing due to accelerated moves to digitalization of corporate management and anticipation of a newnormal. In this environment, the Group steadily improved its performance under the management direction emphasizing
profitability to achieve a speedy structural transformation and raise corporate value.

Consolidated Financial Summary
What does the TIS INTEC Group do?

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

Fiscal 2011

Fiscal 2012

Fiscal 2013

Fiscal 2014

Fiscal 2015

Fiscal 2016

Fiscal 2017

Fiscal 2018

Fiscal 2019

Fiscal 2020

Fiscal 2021

Net sales

323,173

327,417337,834

346,647

361,025

382,689

393,398

405,648

420,769

443,717448,383

Cost of sales

261,145

266,159

276,935

283,881294,927

312,153

317,440

321,286

325,985

337,820334,671

Gross profit

62,027

61,25860,89962,766

66,09770,53575,95884,362

94,784

105,896

113,712Gross profit ratio (%)

19.2%

18.7%

18.0%

18.1%

18.3%

18.4%

19.3%

20.8%

22.5%

23.9%

25.4%

Performance Status

49,20945,63642,72743,25544,97646,09948,93851,61856,74061,05767,963

15.2%

13.9%

12.6%

12.5%

12.5%

12.0%

12.4%

12.7%

13.5%

13.8%

15.2%

Operating income

12,81815,621

18,171

19,51021,121

24,43627,01932,74338,043

44,83945,748Operating margin (%)

4.0%

4.8%

5.4%

5.6%

5.9%

6.4%

6.9%

8.1%

9.0%

10.1%

10.2%

Recurring profit

12,625

15,393

17,44018,971

21,251

24,521

27,092

32,79538,60346,07039,257

Recurring profit ratio (%)

3.9%

4.7%

5.2%

5.5%

5.9%

6.4%

6.9%

8.1%

9.2%

10.4%

8.8%

Net income attributable to owners of the parent company

5,985

2,135

5,868

7,913

10,275

12,67816,306

20,62026,034

29,411

27,692

Net income ratio (%)

1.9%

0.7%

1.7%

2.3%

2.8%

3.3%

4.1%

5.1%

6.2%

6.6%

6.2%

Value Creation Process

Selling, general and administrative expenses
Selling, general and administrative expenses ratio (%)

Financial Position
128,455

142,442

138,219

143,519

140,450

166,666

152,162

162,064

176,231

181,543

229,965

172,620

167,560

164,083

170,091

205,401

169,828

185,459

204,889

194,426

201,356

221,106

Software assets

11,337

12,197

11,76912,92813,252

15,42816,056

16,866

19,17722,887

27,797

Total assets

301,076

310,003302,302313,610

345,851

336,495

337,622366,954

370,657

382,899

451,072

Current liabilities

73,09083,06591,06372,79077,666

91,50878,67681,31091,12688,479100,915

Non-current liabilities

76,87575,97253,07976,316

79,39564,44759,74359,344

45,121

46,46270,726

Total liabilities

149,965

159,038

144,143

149,107

157,062

155,955

138,420

140,655

136,248

134,942

171,642

Net assets

151,110

150,965

158,159

164,502

188,789

180,539

199,202226,298

234,408

247,957

279,429

Total liabilities and net assets

301,076

310,003302,302313,610

345,851

336,495

337,622366,954

370,657

382,899

451,072

Total interest-bearing debt

77,45476,51560,55058,86952,114

46,15835,14432,876

26,89322,294

43,629Cash flow from operating activities

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

18,95236,38637,55838,56933,345

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

8,688(23,488)(14,202)(1,213)(26,437)(17,522)

Cash flow from financing activities(18,755)(4,230)(19,883)(5,872)(19,067)(14,979)(18,327)(10,543)(16,773)(14,544)

12,484

Medium-Term Management Plan

Current assets
Fixed assets

Cash Flow Status

8,279

8,500

7,124

20,436

5,194

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

12,132

15,82336,492

41,11928,43343,142

29,48548,65125,73037,54557,08354,68482,924

Capital expenditures

18,325

14,096

12,287

12,544

16,873

14,21015,15916,907

13,334

16,70225,085

Depreciation

12,30812,745

12,92012,454

12,80911,952

11,801

12,572

12,783

12,02013,318

Research and development expenses

1,062

962

1,002

853

1,097

1,086

1,178

996

1,003

1,702

1,789

Amortization of goodwill

1,901

1,882

1,741

1,166

1,052

339

326

289

289

171

312

Goodwill balance at the end of the term

5,551

3,672

1,914

830

2,021

1,393

1,332

1,118

503

355

2,550

Platform that Supports Value Creation
Process (ESG section)

Free cash flow
Cash and cash equivalents at the end of the term
Others73

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.

74

What does the TIS INTEC Group do?

(Millions of yen)

Fiscal 2011

Fiscal 2012

Fiscal 2013

Fiscal 2014

Fiscal 2015

Fiscal 2016

Fiscal 2017

Fiscal 2018

Fiscal 2019

Fiscal 2020

Fiscal 2021

427,210439,748452,284

122,067

132,935

133,121147,214

Order Status (Total)
Orders received during the term
Order backlog at year-end
Order Status (Software development)
Orders received during the term

162,287

174,680

179,352

172,721

199,842

207,345

208,307219,225

238,298

246,330

237,323

Order backlog at year-end

47,967

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

67,71675,54979,277

83,797

Equity ratio (%)

47.7%

46.3%

49.8%

49.9%

53.3%

52.5%

57.8%

60.4%

62.0%

63.3%

60.0%

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

4.2%

1.5%

3.9%

5.1%

6.0%

7.0%

8.8%

9.9%

11.5%

12.5%

10.8%

Total asset turnover ratio

1.05

1.07

1.10

1.13

1.09

1.12

1.17

1.15

1.14

1.16

1.08

Financial leverage

2.18

2.13

2.08

2.01

1.93

1.89

1.81

1.69

1.63

1.58

1.66

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

4.1%

5.0%

5.7%

6.2%

6.4%

7.2%

8.0%

9.3%

10.5%

12.2%

9.4%

Interest-bearing debt ratio (%)

25.7%

24.7%

20.0%

18.8%

15.1%

13.7%

10.4%

9.0%

7.3%

5.8%

9.7%

Payout ratio (%)

46.9%

74.0%

31.4%

27.7%

25.6%

22.7%

19.0%

16.6%

22.8%

25.7%

31.9%

Total return ratio (%)

46.9%

74.0%

31.4%

27.7%

30.4%

35.3%

31.9%

30.5%

39.0%

39.8%

42.8%

68.19

24.33

66.86

90.16

117.40145.22189.02241.44307.83350.35110.51

—

24.33

66.83

90.12

—

—

—

—

—

—

—

32.00

18.00

21.00

25.00

30.00

33.00

36.00

40.00

70.00

90.00

35.00

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

1,078.60

Stock price at fiscal year-end (yen)

870

968

1,243

1,694

2,193

2,664

2,832

4,210

5,240

5,361

2,641

Highest stock price during the term

1,377

978

1,328

1,854

2,257

3,085

2,959

4,410

6,040

7,320

2,670

Lowest stock price during the term

655

654

798

1,020

1,524

2,156

2,180

2,742

4,060

4,045

1,723

Price earning ratio (PER) (times)

12.8

39.8

18.6

18.8

18.7

18.3

15.0

17.4

17.0

15.3

23.9

Value Creation Process

Financial Indicators

Net income per share—basic (yen)*
Net income per share—diluted (yen)*
Annual dividends per share (yen)*
Net assets per share (yen)*

Medium-Term Management Plan

Per share data

Stock information

0.59

0.72

0.95

1.04

1.31

1.25

1.62

1.93

1.85

2.45

76,376

84,979109,121

148,714

192,521233,870

248,618

369,592

460,014

470,637

695,553

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

87,78987,78987,78987,78987,78987,78987,78987,78987,78987,789263,367

Number of treasury stock at fiscal year-end (thousands)

15

16

19

4

320

864

1,701

2,613

3,358

3,952

12,595

Average number of shares during the term (thousands)

87,77287,77387,77187,77487,52287,30586,26885,406

84,574

83,948250,574

323,173

327,417337,834

346,647

361,025

382,689

393,398

405,648

420,769

443,717448,383

Credit card

52,61445,084

48,84649,40253,74359,27465,00673,31473,64875,11879,265

Banking

25,81926,702

26,23029,04925,444

27,86728,23327,452

26,58330,10030,648

Price book-value ratio (PBR) (times)

Platform that Supports Value Creation
Process (ESG section)

0.53

Aggregate market value (millions of yen)

Sales by Client Sector
Net sales

23,44822,931

23,83625,26924,972

26,33925,356

26,262

27,27929,27430,14019,17823,416

21,33723,481

23,312

20,406

20,857

22,127

19,502

24,28917,863

Assembly-based manufacturing

46,32340,36338,82440,90445,78549,45542,723

43,77746,02845,73945,103

Processing-based manufacturing

26,13531,074

38,46833,84334,96035,061

36,95338,36638,081

38,99842,424

Distribution

22,87026,26727,39830,00931,77532,702

31,77328,87232,90833,976

31,679Services

70,01771,01273,42572,666

77,53579,60189,607

93,258103,531

112,722

118,517

Public institutions

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

33,649Others

8,754

10,456

11,241

11,626

13,604

15,376

15,882

16,292

18,343

17,20919,090

Corporate Data

Insurance
Other finance＊The Company executed a stock split, with each share of common stock split into three shares, effective April 1, 2020.

75

76

Non-Financial Summary
What does the TIS INTEC Group do?

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

Scope ofRelateddatacollection materiality

Fiscal2017

Fiscal2018

Fiscal
2019

Fiscal2020

Independent
Practitioner's
Assurance

Fiscal2021

Employee-related data (Note 1)

Fiscal2017

Fiscal2018

Fiscal
2019

Fiscal
2020

Fiscal2021

Independent
Practitioner's
Assurance

☑	
 
☑	
 

Environmental data

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

Scope 1 emissions (metric tons) (Note 3)

B

2-f

976

958

885

745

760

83,76978,12571,09664,48865,867

15,357

15,63815,948

16,10917,497

Scope 2 emissions (metric tons) (Note 3)

B

2-f

C-1

1-a

11,306

11,435

11,52911,56012,342

Scope 3 emissions (metric tons)

C-2

2-f

365,595

372,053

Number of female employees

C-1

1-a

4,051

4,203

4,419

4,549

5,155

Category 1 (purchased goods and services)

C-2

2-f

304,297

287,633

Percentage of female employees

C-1

1-a

26.38%

26.88%

27.71%

28.24%

29.46%

Category 2 (capital goods)

C-2

2-f

40,98665,782

Number of non-Japanese employees

C-1

1-a

141

156

155

155

1,161

Category 3 (fuel-and energy-related activities)

C-2

2-f

9,900

9,796

Average age

C-2

1-a

38.35

38.73

38.85

39.06

39.23

Category 4 (upstream transport and delivery)

C-2

2-f

698

215

Average age of male employees

C-2

1-a

39.49

39.87

40.02

40.27

40.50

Category 5 (waste generated in operations)

C-2

2-f

1,118

345

Average age of female employees

C-2

1-a

35.22

35.63

35.87

36.04

36.11

Category 6 (business travel)

C-2

2-f

1,987

2,025

Average length of service (years)

C-2

1-a

13.61

14.40

12.88

12.84

13.34

Category 7 (employee commuting)

C-2

2-f

6,607

6,256

Average length of service of male employees (years)

C-2

1-a

14.21

15.49

13.69

13.95

14.24

Energy consumption (Electricity Mwh)

B

2-f

167,907

157,623

149,523

143,383

141,620

Average length of service of female employees (years)

C-2

1-a

11.03

11.47

10.78

11.04

11.23

Energy consumption (Heavy oil kL)

B

2-f

26

28

32

25

21

Percentage of employees aged 60 and over

C-2

1-a

1.69%

1.97%

2.17%

1.71%

3.18%

Energy consumption (Light oil kL)

B

2-f

11

11

10

0

0

Number of employees with a disability (Total) (Note 2)

D

1-a

390.5

186.0

202.5

211.5

221.5

Energy consumption (City gas, km3)

B

2-f

389

379

343

302

313

Percentage of employees with a disability (Note 2)

D

1-a

1.97%

2.14%

2.28%

2.35%

2.40%

Energy consumption (kerosene kl)

B

2-f

1

Number of employees in management positions

C-2

1-a

3,238

3,328

3,443

3,609

3,782

Energy consumption (steam GJ)

B

2-f

1,301

Percentage of employees in management positions

C-2

1-a

21.08%

21.28%

21.59%

22.40%

22.90%

Industrial waste (ton)

C-2

2-f

Number of male employees in management positions

C-2

1-a

2,999

3,056

3,147

3,278

3,410

Number of female employees in management
positions

C-2

1-a

239

272

296

331

372

Social contribution expenses (millions of yen)

F

2-e

20

115

Percentage of female employees in management
positions

C-2

1-a

7.38%

8.17%

8.60%

9.17%

9.84%

Political contributions (millions of yen)

F

2-e

—

A

3-g

C-2

1-b

171.98168.37166.36

162.64162.89Development loss rate

Average total working hours per month
Average non-scheduled hours worked per month

C-2

1-b

22.64

20.63

19.87

18.35

19.95

Results of customer satisfaction surveys (See P.66)

F

Percentage of annual paid leave taken

C-2

1-b

56.74%

67.63%

72.99%

75.69%

66.26%

Number of directors (Note 4)

F

Number of employees on childcare leave

C-2

1-b

445

463

447

467

537

Number of female directors (Note 4)

Number of male employees on childcare leave

C-2

1-b

29

27

38

53

80

Number of employees working shorter hours tocare for young children

C-2

1-b

549

670

681

679

638

Number of male employees working shorter hours tocare for young children

C-2

1-b

9

12

9

10

9

Number of employees on nursing care leave

C-2

1-b

8

13

13

19

9

Number of employees working shorter hours tocare for elderly family

C-2

1-b

2

3

3

6

6

Turnover rate

C-2

1-b

4.17%

4.63%

4.82%

5.03%

3.27%

Spending on learning and research (millions of yen)

C-2

1-c

1,702

1,805

1,915

1,534

Number of days spent on learning and research perperson

F

1-c

7.03

12.54

14.39

14.20

12.5

Average annual income (10,000 yen)

F

1-c

653.3

668.8

681.3

701.9

706.2

Results of employee awareness surveys

F

1-c

34%

38%

45%

48%

56%

Results of employee awareness surveys

C-2

1-c

38%

46%

Number of new graduate recruits (April 1)

C-2

1-a

521

700

663

720

679

Number of regular recruits (recruited in each fiscal
term)

C-2

1-a

309

266

339

386

271

290

143

99

80

—

—

—

—

2.1%

0.9%

0.9%

0.6%

0.8%

3-g

61.3%

69.1%

68.2%

72.7%

69.0%

4-j

10

10

9

9

9

F

4-j

0

0

1

1

1

Percentage of female directors (Note 4)

F

4-j

0.0%

0.0%

11.1%

11.1%

11.10%

Number of external directors (Note 4)

F

4-j

3

3

3

3

3

Percentage of external directors (Note 4)

F

4-j

30.0%

30.0%

33.3%

33.3%

33.30%

Other non-financial data

Related materiality (See P. 21)
1.	Create a society in which diverse
human resources are engaged andthrivea. Promote diversity
b. Promote workstyle reformsc. Human resource development
and training emphasizing selffulfillment

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

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

Platform that Supports Value Creation
Process (ESG section)

4.	Enhance corporate governance andearn 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 NEOAXIS
C-1. TIS, INTEC, AGREX, QUALICA, AJS, TIS System Service, TIS Solution Link, and MFEC (non-consolidated basis, from fiscal 2021)
C-2. 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, fiscal 2020, and fiscal 2021 are based respectively on April 1, 2017; April 1, 2018; April 1, 2019; and April 1,
2020; and April 1, 2021.
2.	Figures for fiscal 2017, fiscal 2018, fiscal 2019, fiscal 2020, and fiscal 2021 are based respectively on June 1, 2017; June 1, 2018; June 1, 2019; June 1,
2020; and June 1, 2021.
3.	Scope 1, Scope 2 emissions are calculated using the following formulas.
		 Scope 1 emissions: F uel consumption x heating value per unit x CO2 emission factor. CO2 emission factor based on Law Concerning the Promotion of the
Measures to Cope with Global Warming.
		 Scope 2 emissions: C onsumption of electricity/steam x CO2 emission factor. CO2 emission factor based on Act on the Rational Use of Energy.
4.	Figures for fiscal 2017, fiscal 2018, and fiscal 2019, fiscal 2020, and fiscal 2021 are based respectively on June 30, 2016; June 30, 2017; June 30, 2018; andJune 30, 2019; and June 30, 2020.

Corporate Data

https://www.tis.com/documents/en/ir/finance/annual_report/assurance_ar2021.pdf

1,035

Medium-Term Management Plan

C-1

Number of male employees

Value Creation Process

Number of employees<Independent Assurance Report>
Non-financial data marked with a checkmark ☑	 for the year ended March 2021 in the Integrated Report 2021, has received independentpractitioner's assurance from Ernst & Young ShinNihon LLC. to improve data reliability.

77

Scope ofRelateddatacollection materiality

78

Corporate Data

Overseas Subsidiaries(As of March 31, 2021)
Company name
FoundedEstablished
Main business

Paid-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 and business execution of group companies that carryon information and communication business
Sumitomo Fudosan Shinjuku Grand Tower,
17-1, Nishi-Shinjuku 8-chome, Shinjuku-ku, Tokyo, 160-0023, Japan
Tel. +81-3-5337-7070
Fax +81-3-5337-7555¥10 billion
840,000,000 shares
263,367,294 shares
13,402
Tokyo Stock Exchange, First Section (Securities code: 3626)● China● Thailand● Vietnam

QUALICA (SHANGHAI) Inc.
TISI (Shanghai) Co., Ltd.

I AM Consulting Co., Ltd.
(Six subsidiaries under the company)
MFEC Public Company Limited(11 subsidiaries under the company)
PromptNow Co., Ltd.
TISI (Thailand) Co., Ltd.
QUALICA (Thailand) Co., Ltd.

AGREX DNP Vietnam Co., Ltd.

● Singapore

QUALICA Asia Pacific Pte. Ltd.

Main equity method affiliates● China● Indonesia

Shanghai CardInfoLink Data Service
Co., Ltd. (CardInfoLink)(Voting rights ownership ratio 18.2%,
11 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)■ Major Shareholders(As of March 31, 2021; Thousands of Shares)(As of March 31, 2021)

Individuals andOthers38,149(14.5%)

Main consolidated subsidiaries
Domestic subsidiaries
TIS and maingroup
companies

Shareholding
ratio

—

INTEC Inc.

TIS100%

AGREX INC.

TIS100%QUALICA Inc.

TIS80%Komatsu20%

AJS Inc.

TIS51%
Asahi Kasei 49%

Focuses on credit card companies but pursues business opportunities in awide range of sectors, including services and manufacturing. Promote toexpand payment business. Merged with pure holding company IT Holdings
Corporation in July 2016 and became operating holding company.
(Incorporated April 1971)
Focuses on megabanks and life insurers, and assists with CRM for regionalbanks and offers a wide selection of services to regional public corporations,particularly in the Hokuriku region.
(Established January 1964)
Leading company in BPO sector, with emphasis on insurance industry needs.
Turned into a wholly owned subsidiary in March 2015, becoming corecompany for BPO business within the Group.  (Established September 1965)
Formerly, information systems subsidiary of Komatsu. Focuses on assemblybased manufacturers, mainly those under the Komatsu Group umbrella,
while expanding business with companies in the distribution and restaurant
sectors.
(Established November 1982)
Formerly, information systems subsidiary of Asahi Kasei. Focuses oncompanies under the Asahi Kasei Group umbrella.
(Established March 1987)* Merged into AGREX Inc. in April 2021.
79

TIS System Service Inc.
TIS Solution Link Inc.
TIS Tohoku Inc.
TIS Total Service Inc.
TIS Nagano Inc.
TIS West Japan Inc.

22,199(11.1%)

Total 263,367(100%)

Other Domestic
Institutions
27,247(10.3%)

110,205

8,708(7.9%)■ Rating

35,1353,010(8.6%)

Japan Credit Rating Agency, Ltd.

20,146

1,759(8.7%)

16,501946(5.7%)TIS Hokkaido Inc.
Registration Network, Ltd.
NEOAXIS Co., Ltd.*
Nexway Co., Ltd.
HOKKOKU INTEC SERVICE Inc.
MicroMates Corp.

Financial Instruments
Business Operator
4,976(1.9%)

9.05
6.62
4.33
2.66
2.46
2.14

4,796

1.90

4,412

1.75

4,340
4,300

1.72
1.70

Notes: 1.	The Company holds 10,776 thousand shares of treasury stock. These areexcluded from the table of major shareholders above. The 10,776
thousand shares of treasury stock do not include 1,602 thousand sharesof Company stock held by TIS INTEC Group Employees’ Shareholding
Association Exclusive Trust, and 217 thousand shares of Company stock
held by Board Incentive Plan (BIP) Trust.
2. Percentage shareholdings are calculated after deducting treasury stock.
3.	Regarding 4,796 thousand shares held by The Master Trust Bank ofJapan, Ltd. (Retirement Benefit Trust Account, Mitsubishi Electric
Corporation Account), Mitsubishi Electric Corporation reserves exercise of
voting rights by Instruction.

(At November 20, 2020)
Long-term

22,86816,728
10,926
6,717
6,219
5,402

A/stable■ Stock Price Range (Comparison with TOPIX)
TIS

TOPIX

700
600
500
400
300
200
100
0

Corporate DataIUK Inc.
INTEC Solution Power Inc.
KOUSHI INTEC Inc.
SKY INTEC INC.
SorunPure Inc.
Chuo System Corporation

199,355

Overseas
Institutions
115,857(44.0%)ICHIGO TRUST PTE. LTD.
The Master Trust Bank of Japan, Ltd. (Trust Account)
Custody Bank of Japan, Ltd. (Trust Account)
Employees’ Shareholding Association of TIS INTEC Group
Nippon Life Insurance Company
MACQUARIE BANK LIMITED DBU AC
The Master Trust Bank of Japan, Ltd. (Retirement Benefit
Trust Account, Mitsubishi Electric Corporation Account)
JPMBL RE CITIGROUP GLOBAL MARKETSLIMITED COLL EQUITYGOVERNMENT OF NORWAYSSBTC CLIENT OMNIBUS ACCOUNT

Financial
Institutions
77,136(29.3%)

Platform that Supports Value Creation
Process (ESG section)

TIS Inc.
(operatingholdingcompany)

Description of Business

Fiscal 2021, ended March 31, 2021
(Millions of yen,non-consolidated basis)
Operating income
Net sales(operating margin)

Number of Shareholding
shares(Thousands) ratio (%)

NameMedium-Term Management Plan

■ Share Composition by Shareholder(As of March 31, 2021)

TIS Inc., and 54 consolidated subsidiaries (As of March 31, 2021)

Sequent Software Inc.
TIS Ventures, Inc.

79 Equity Method Affiliates (As of March 31, 2021)

21,817 (full-time employees)■ TIS INTEC Group● United States

Value Creation Process

Head office

What does the TIS INTEC Group do?

■ Corporate Profile

Fiscal 2011

Fiscal 2012

Fiscal 2013

Fiscal 2014

Fiscal 2015

Fiscal 2016

Fiscal 2017

Fiscal 2018

Fiscal 2019

Fiscal 2020

Fiscal 2021

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, 2010.
2.	The Company executed a stock split, with each share of common stock split into three shares, effective April 1, 2020. Figures before fiscal 2020 are presented
assuming this stock split was conducted.

80Evaluations from External Parties

In Issuing the 2021 Integrated Report
What does the TIS INTEC Group do?

■ Inclusion in SRI indexes
FTSE4Good Index Series

FTSE Blossom Japan Index

The FTSE4Good Index Series, created by global
index provider FTSE Russell, is designed tomeasure the performance of companies
demonstrating strong ESG practices.

The FTSE Blossom Japan Index, created by
global index provider FTSE Russell, is designed
to provide market participants with a tool formeasuring the performance of Japanesecompanies demonstrating strong ESG practices.

MSCI Japan Empowering Women Index (WIN)The MSCI Japan Empowering Women Index, created by U.S.-based MSCI, aims to represent theperformance of Japanese companies exhibiting an excellent commitment gender diversity.

■ HR-related activities
Grand Prize in Good Career Company
Award 2020

Certified Health & Productivity Management Outstanding
Organizations

Eruboshi (L-Star)

Telework Pioneers

Tomonin

The "Kurumin" mark is
bestowed on companies thathave formulated action plans
for supporting a balance
between work and childcare
based on the Act on
Advancement of Measures
to Support Raising the Next
Generation of Children, and achieved thegoals of those plans. TIS received "Platinum
Kurumin" certification in 2019 as an
exceptional child-rearing support company.

Seeking to promote thespread of telecommuting,since fiscal 2015 the Ministryof Internal Affairs andCommunications hasannounced its annual list of"Telework Pioneers". These
are companies and organizations that haveintroduced and are promoting telecommuting.
They are selected by a panel of external
experts.

The “Tomomin” mark is
given to companies by the
Ministry of Health, Labourand Welfare in recognitionof measures that support
improvement and promotionof a workplace environment that enables
employees to balance work and nursing care.
To prevent a situation where an employee has
to quit to care for elderly family members,
TIS is creating a workplace environment thatmakes it easier for employees to balance workand nursing care obligations.

New Diversity Management Selection 100

Nikkei Smart Work Management

White Company Recognition

The Ministry of
Economy, Trade andIndustry runs the
program thatrecognizes companies
that utilize the skillsof diverse human resources to create value.
This approach has enabled us to raise
employee satisfaction and attract and train
human resources who will fuel structuraltransformation, and the results have earned
us stellar external recognition.

The Nihon Keizai
Shimbun Group
promotes thecampaign that aims
to grow the Japanese economy by linking
workstyle reforms-gained through theintroduction of advanced technology,
innovation, and structural transformation-to
the improvement of corporate productivity. TIS
won four stars in the fourth Nikkei Smart
Work Management Survey.

The Japan Next Generation
Enterprise Promotion
Organization, known morecommonly as the WhiteFoundation, defines companies
that have a future and should
last for the next generation as
those that balance appropriate
profits and growth with the trust of customers
and employee satisfaction. Such companies
are recognized as white companies. TIS
earned this title in 2020.

■ Other

JPX-Nikkei Index 400

DX Certification

TIS has been included in a
new index of 400 companies
with high appeal for investors
that meet criteria required by global investment standards, such as
efficient use of capital and investor-focused management perspectives.

The DX Certification System isdesigned to certify companies that are
ready to take action in accordancewith the “Digital Governance Code”
established by the Ministry of Economy, Trade and Industry (METI) andto address social changes brought about by digital technologies throughdialogue with stakeholders.

81

Division Manager ofCorporate Planning SBU■ Evaluations for IR-site2020 Internet IR Commendation Award(Daiwa Investor Relations Co., Ltd.)Awarded for ten consecutive years since 2013.

Fiscal 2020 Homepage Quality Ranking
Survey of All Listed Companies(Nikko Investor Relations Co., Ltd.)
Received highest award as excellent website
in comprehensive ranking for six consecutive
years since fiscal 2015.

Gomez IR Site Comprehensive
Ranking 2020
(Morningstar Japan K.K.)
Awarded for six consecutive years
since 2015 as an excellent company.

82

Corporate Data

■ IR-related activities

Platform that Supports Value Creation
Process (ESG section)

Kurumin, Platinum Kurumin

Medium-Term Management Plan

The Program, run by the
Ministry of Economy, Trade and Industry (METI) andNippon Kenko Kaigi (NKK), recognizes companies
that engage in activities to address health issues
and maintain particularly good health management
practices to promote well-being. TIS and INTEC are
ranked at top 500 companies as Certified Healthand Productivity Management Outstanding
Organizations (large enterprise category).

The “Eruboshi (L-Star)” is bestowed
by the Minister for Health, Labourand Welfare to corporations thatexcel in supporting the advancement of women. There are threelevels of certification based on five evaluation criteria
set by the Ministry: recruitment, continued
employment, workstyles (including working hours),
proportion of women in managerial roles, anddiversity of career options. TIS, INTEC and AGREX
captured Grade 3 certification of the top-level grade.

TIS earned a grand prize in2020 in recognition of its“talented management thatemphasizes the selfrealization of each individual
and the provision of career support thatencourages women to play active roles.”Toward this end, we will embrace changes, reflectedalready in drafting the new medium-term management
plan, while promoting management keenly aware ofdelivering higher value to diverse stakeholders. More to
the point, to give shape to our mission—Fill the futurewith vibrant colors as a mover using digital technology—asstated in OUR PHILOSOPHY, we will accelerate structuraltransformation with an emphasis on three key strategies:
improve the value provided in DX services, boost profitability in service businesses, and expand global operations. In
addition, we will strive to elevate the caliber of Environmental (E), Social (S) and Governance (G) initiatives toreinforce the foundation that supports improved corporate
value and thereby become a sustainability company, that
is, a company—and a corporate group—contributing to asustainable society through business activities.
I assumed my current position as general manager of
the Corporate Planning SBU in April 2021 and now carrya greater level of responsibility as a member of the management team. It is a sobering career development but
one that I will embrace with all sincerity. I am committed
to sustainable improvement in corporate value of theGroup, which will enable TIS and the rest of the TIS INTECGroup to meet the expectations of all stakeholders. My
priorities will be to promote exhaustive management
practices conscious of capital cost and achieve a goodbalance between robust investment and fiscal restraint.
But I am also keen to see
an increase in the valueof intangible assets, which
are gaining importance assources of competitive
superiority. Engagementwith stakeholders is
another area of emphasis.
It is a valuable opportunitythat I will actively pursue. I
look forward to the support
Masakazu Kawamura,and encouragement of
TIS Executive Officer,
stakeholders in this pursuit.

Value Creation Process*The inclusion of TIS Inc. in any MSCI INDEX, and the use of MSCI logos, trademarks, service marks or index names herein, do not constitute a sponsorship, endorsement
or promotion of TIS Inc. by MSCI or any of its affiliates. The MSCI Indexes are the exclusive property of MSCI. MSCI and the MSCI index names and logos are trademarks
or service marks of MSCI or its affiliates.

The TIS INTEC Group Integrated Report, first issued in2016, has been produced six times now. The 2021 edition
provides a comprehensive picture of key elements pertaining to medium- to long-term growth strategies and thestatus of initiatives to create corporate value on a groupwide basis, which is the centerpiece of the Group’s basic
philosophy OUR PHILOSOPHY. In addition, we see theintegrated report as a valuable tool for promoting dialogue with all stakeholders, including shareholders andinvestors, and welcome candid thoughts and opinions
that may lead to enhanced disclosure content and greater
management transparency.
TIS took advantage of the transition to an operatingholding company structure in July 2016 to move vigorously forward on unification of Group management.
Efforts on this front have definitely accelerated growthand dramatically improved corporate value. Of note, ourgross profit margin—an indicator of business competitiveness—has increased significantly, thanks to steady progress on various measures in line with a management
policy to emphasize profitability, including steps to reduce
unprofitable projects and to be more thorough and precise in estimating profitability at the time an order isreceived. A rising gross profit margin is the driving force
of a virtuous cycle that enables us to achieve the rightbalance of robust prior investment and improved profitability for growth into the future.
In April 2021, along with the shift to a new management structure, the TIS INTEC Group embarked on
Medium-Term Management Plan (2021–2023) under the
tagline “Be a Digital Mover 2023.” This three-year plan isthe second part of our journey toward realizing Group
Vision 2026. Society, overall, is on an uncertain course.
To achieve sustainable improvement in corporate value
against this backdrop, it is vital that we build a solidmanagement foundation, take a flexible approach tochanges in the environment, continue to evolve throughquick and bold decision-making, and realize enhanced
value exchange through IT configuration capabilities
created jointly with society.