Consolidated Financial Results for the First Half of the Fiscal Year Ending March 31, 2024
(April 1, 2023 through September 30, 2023)(Prepared pursuant to Japanese GAAP)All financial information has been prepared in accord with accounting principles generally accepted in Japan.
This is a partial English translation of the original Japanese-language document. All information pertains to consolidated
results unless otherwise noted. Information on the basis of presentation of consolidated financial statements does not appear inthis translation.
November 1, 2023
Company name:
Stock exchange listings:
Stock code:
URL:
Representative:
Contact:
Phone:TIS Inc.
Tokyo Stock Exchange, Prime Market
3626
https://www.tis.com/
Yasushi Okamoto, President
Masahiro Hiwasa, Department Manager of Finance & Accounting Dept., Corporate
Planning SBU.
+81 50-1702-4115

Scheduled dates
Submission of quarterly report:
Commencement of dividend payments:

November 13, 2023
December 5, 2023

Supplementary materials to the quarterly results:
Quarterly results presentation held:

Available
Yes (targeted at institutional investors and analysts)
Figures in millions of yen are rounded down to the nearest million

1. Consolidated Results for the First Half of the Fiscal Year Ending March 31, 2024
(April 1, 2023 – September 30, 2023)(1) Consolidated Financial Results

Percentages indicate year-over-year changes
Net sales

Operating income

millions of yen%

millions of yen%

First Half, FY2024
267,4889.0
30,387First Half, FY2023
245,305
4.7
27,709Note: Comprehensive income: First Half, FY2024: 26,471 million yen (58.7%);
Net income
per share – basic
First Half, FY2024
First Half, FY2023

Net income attributableto owners of the parent
company

Recurring profit
millions of yen%

9.7
31,8358.9
20,30716.1
29,225
21.3
18,834First Half, FY2023: 16,683 million yen (-31.6%)

Net income
per share – diluted

yen

yen

84.16
76.54

-

(2) Consolidated Financial Position
Total assets
millions of yen

millions of yen

Net assets
millions of yen

Equity ratio%

End of First Half, FY2024
492,940
320,44862.6
462,320309,22664.2
End of FY2023
For reference: Total equity: End of first half, FY2024: 308,425million yen End of FY2023: 297,039 million yen*Total equity = Shareholders’ equity plus total accumulated other comprehensive income

%

7.8
21.3

2. Cash Dividends for Shareholders of Common Stock
Cash dividends per share
Record date or
periodEnd-Q1End-Q2yen

End-Q3yen

15.00
FY202317.00
FY2024FY2024(forecast)
Note: Revisions from the latest release of dividends forecasts: None

Year-end

Total

yen

yen

-

35.00

50.00

yen

-

36.00

53.00

3. Forecast of Consolidated Results for FY2024 (April 1, 2023 – March 31, 2024)

Net sales

Full FY2024(year ending Mar. 31, 2024)

Operating income

Percentages indicate year-over-year changes
Net income
attributable to
Net income per
Recurring profit
owners of the parent
share – basic
company

millions of yen%

millions of yen%

millions of yen%

millions of yen%

yen

536,000

5.4

64,5003.5

64,5002.0

42,000-24.3

174.19Notes: Revisions from the latest release of earnings forecasts: Yes※ Notes(1) Material reclassifications of subsidiaries during the period: None
(Changes in specified subsidiaries resulting in change in scope of consolidation)
Additions: None
Exclusions: None
(2) Accounting methods specific to quarterly consolidated financial statements: None
(3) Changes in accounting policy, changes in accounting estimates, and retrospective restatement
1) Changes in accordance with amendments to accounting standards, etc.: None
2) Changes other than noted in 1) above: None
3) Changes in accounting estimates: None
4) Retrospective restatement: None
(4) Common stock issued
1) Issued shares as of period-end (including treasury stock):
End-First Half, FY2024 (September 30, 2023):
244,445,411 shares
End-FY2023 (March 31, 2023):
244,445,411 shares
2) Treasury stock as of period-end:
End-First Half, FY2024 (September 30, 2023):
3,836,173 shares
End-FY2023 (March 31, 2023):
2,446,057 shares
3) Average number of shares (during the respective six-month period):First Half, FY2024 (ended September 30, 2023):
241,299,894 sharesFirst Half, FY2023 (ended September 30, 2022):
246,079,938 shares
Note: Treasury stock includes the number of the Company’s own shares held by TIS INTEC Group Employees’
Shareholding Association Trust and the Board Incentive Plan (BIP) Trust.

Quarterly review status
These materials are not subject to the quarterly review procedures to be conducted by certified public accountants or an audit
firm.
Caution on Forward-Looking Statements and Other Important Matters
At a Board of Directors’ Meeting held on May 9, 2023, TIS Inc. (TIS) resolved to acquire its own (treasury) shares inaccordance with Article 156 of the Companies Act of Japan, as applied pursuant to Paragraph 3, Article 165 of said Act.
Accordingly, “Net income per share - basic” in the Forecast of Consolidated Results for FY2024 has been presented taking
into account the effect of this acquisition of treasury shares.
This report contains forward-looking statements that reflect TIS’s plans and expectations based on information available to
TIS at the time of preparation and on certain other information TIS believes to be reasonable. These forward-looking
statements are not guarantees of future performance, and actual results, performance, achievements or financial position may
differ materially from those expressed or implied herein due to a range of factors.
For the assumptions underlying the forecasts herein and other notice on the use of earnings forecasts, refer to “(3)Consolidated Earnings Forecast and Caution on Forward-Looking Statements” in the “1. Results of Operations” section on
page 10 in the Accompanying Materials.

Accompanying Materials – Contents

1. Results of Operations

2(1) Analysis of Consolidated Operating Results

2(2) Analysis of Financial Condition

9(3) Consolidated Earnings Forecast and Caution on Forward-Looking Statements

10

2. Consolidated Financial Statements

13(1) Consolidated Balance Sheet

13(2) Consolidated Statements of Income and Comprehensive Income

15

Consolidated Statements of Income
For the First Half

15

Consolidated Statements of Comprehensive Income
For the First Half

16(3) Notes on the Consolidated Financial Statements

17(Notes on the Going-concern Assumption)

17(Notes on Significant Changes in the Amount of Shareholders’ Equity)17

3. Other Information

17

-1-

1. Results of Operations(1) Analysis of Consolidated Operating Results
In the first six months of fiscal 2024 (April 1, 2023 – September 30, 2023), the Japanese economy recovered
moderately, due in part to the effects of various policies, as the new employment and income environment
improved. Looking ahead, although a moderate recovery is expected to continue, it will be necessary to watch
carefully for the risk of downward pressure on Japan’s economy due to the effects of a downturn in overseas
economies following the worldwide monetary tightening as well as rising prices, fluctuations in financial andcapital markets, and other factors.
The IT services industry, to which the TIS INTEC Group (“the Group”) belongs, is expected to see further
increases in IT investment demand as transformation of business processes and business models utilizing
digital technologies progresses globally. This is demonstrated by factors such as the Bank of Japan’s quarterly
Short-term Economic Survey of Enterprises in Japan (September 2023), which showed a 10.8% year-on-yearincrease in company software investment plans (all industries including financial institutions).
In this environment, in accordance with its medium-term management plan (2021–2023) currently being
implemented for further growth in achieving “Group Vision 2026,” the Group is continuing to work toaccelerate business restructuring, with enhancing the value provided by digital transformation as the keystone.
Consolidated net sales for the Group in the first six months of fiscal 2024 rose 9.0% year on year to ¥267,488
million. Operating income rose 9.7% to ¥30,387 million, recurring profit grew 8.9% to ¥31,835 million, andnet income attributable to owners of the parent company rose 7.8% to ¥20,307 million.
(Unit: millions of yen)First Six Months,
FY2023First Six Months,
FY2024(Apr. 1 – Sep. 30,
2022)(Apr. 1 – Sep. 30,
2023)

Net sales

245,305

267,488+9.0%

Cost of sales

178,229

194,156+8.9%

Gross profit

67,07573,332+9.3%

Gross profit ratio

27.3%

27.4%

+0.1P

Selling, general and administrative
expenses

39,36542,945+9.1%

Operating income

27,70930,387+9.7%

Operating income ratio

11.3%

11.4%

+0.1P

Recurring profit

29,22531,835+8.9%

18,83420,307+7.8%

Net income attributable to owners of
the parent company

Year-on-yearchanges

Net sales were higher than in the same period of the previous year as a result of meeting the demand for IT
investment, such as customers’ demand for digital transformation. Operating income was higher than in thesame period of the previous year and the operating income ratio increased 0.1 percentage points year-on-year
to 11.4%. This was due to factors such as the provision of high value-added businesses and the promotion of
productivity improvement measures, in addition to the increase in income due to higher revenue, despite active
investments in human resources and other fields that will contribute to our future growth. The gross profit ratio
improved to 27.4%, a year-on-year increase of 0.1 percentage points. The increase in recurring profit and net
income attributable to owners of the parent company mainly reflects the growth in operating income.

-2-

<Analysis of the increase/decrease in key factors of operating income (YOY change)>

Segment results for the period are as follows. The sales figures for each segment include inter-segment sales.
(Unit: millions of yen)First Six Months,
FY2023First Six Months,
FY2024Year-onyear(Apr. 1 – Sep. 30, 2022)(Apr. 1 – Sep. 30, 2023)

changes

Offering
Service

Net sales

53,88760,148+11.6%

Operating income

2,494

2,659

+6.6%

Business

Operating income ratio

4.6%

4.4%

-0.2P

Business
Process

Net sales

21,49020,994-2.3%

Operating income

2,405

2,108

-12.3%

Management

Operating income ratio

11.2%

10.0%

-1.2P

Net sales

48,71854,106+11.1%

Operating income

6,311

7,886

+25.0%

Financial IT
Business
Industrial IT
Business
Regional IT
Solutions

Other

Operating income ratio

13.0%

14.6%

+1.6P

Net sales

55,21958,326+5.6%

Operating income

7,763

8,470

+9.1%

Operating income ratio

14.1%

14.5%

+0.4P

Net sales

76,30485,535+12.1%

Operating income

8,352

9,013

+7.9%

Operating income ratio

10.9%

10.5%

-0.4P

Net sales

4,293

4,653

+8.4%

Operating income

394

360

-8.5%

Operating income ratio

9.2%

7.7%

-1.5P

-3-

1) Offering Service Business
Configures services through own investment based on best practices the Group accumulated and provides
knowledge-intensive IT services.
Segment sales in the first six months of fiscal 2024 totaled ¥60,148 million, up 11.6% year on year,
and operating income increased 6.6% to ¥2,659 million. In addition to an increase in the number ofprojects in the settlement solutions, platforms, and business management fields, overseas operations
contributed to growing sales, and the business results of Nihon ICS Co., Ltd., which became aconsolidated subsidiary in April 2023, started to be reflected in the consolidated financial results fromthe second quarter of fiscal 2024, resulted in a year-on-year increase in both sales and profits. Operating
income ratio, however, decreased 0.2 percentage points year-on-year to 4.4% mainly due to an increase
in upfront investment.
2) Business Process Management
Addresses issues related to business processes with IT technology, business know-how and skilledhuman resources to provide more sophisticated, more efficient outsourcing services.
Segment sales in the first six months of fiscal 2024 totaled ¥20,994 million, down 2.3% year on year,
and operating income decreased 12.3% to ¥2,108 million. Data entry operations remained sluggish,
which led to a decrease in both sales and profits year-on-year, and pushed down the segment’s operating
income ratio to 10.0%, a year-on-year decrease of 1.2 percentage points.
3) Financial IT Business
Considers business and IT strategies together and leverages both, and supports business progress using
expert business and operating know-how specific to the finance industry.
Segment sales in the first six months of fiscal 2024 totaled ¥54,106 million, up 11.1% year on year,
and operating income increased 25.0% to ¥7,886 million. Driven by large projects by credit cardcompanies and other core clients as well as public-sector financial institutions, both sales and profits
increased over the same period of the previous fiscal year, and the operating income ratio rose to 14.6%(up 1.6 percentage points year-on-year).
4) Industrial IT Business
Considers business and IT strategies together and leverages both, and supports business progress using
expert business and operating know-how specific to industry sectors other than finance.
Segment sales in the first six months of fiscal 2024 totaled ¥58,326 million, up 5.6% year on year, andoperating income increased 9.1% to ¥8,470 million. Despite a decrease due to the non-recurrence oflarge-scale projects in the manufacturing sector, the trend of expanding IT investments in a wide range
of industries, including manufacturing and distribution, and the expansion of businesses related toenterprise resource planning (ERP) resulted in a year-on-year increase in sales and profit, and theoperating income ratio increased 0.4 percentage points to 14.5%.
5) Regional IT Solutions
Provides IT professional services extensively, across regions and client sites, and collects and develops
this know-how as the source of solutions to support efforts to address issues and promote businessactivities.
Segment sales in the first six months of fiscal 2024 totaled ¥85,535 million, up 12.1% year on year,
and operating income increased 7.9% to ¥9,013 million. Both sales and profits increased year-on-year
owing to the trend of expanding IT investments, mainly by the medical, banking and network businesses,
while the operating income ratio decreased 0.4 percentage points year-on-year to 10.5% mainly due tounprofitable projects which resulted in a decline in profitability.
6) OtherConsists of ancillary businesses offering IT services, and other activities.
Segment sales in the first six months of fiscal 2024 totaled ¥4,653 million, up 8.4% year on year, while
operating income declined 8.5% to ¥360 million with the operating income ratio decreasing 1.5
percentage points to 7.7%.
As noted above, the Group has formulated its medium-term management plan (2021–2023) as a second-4-step to achieve further growth towards realizing its “Group Vision 2026.” Under the slogan of “Be a DigitalMover 2023,” the Group is continuing to increasingly focus on Strategic Domains and is working toaccelerate business restructuring, with further enhancing the value provided by digital transformation as
the keystone. In fiscal 2024, the last year of the medium-term management plan (2021–2023), the Groupwill promote various measures in line with the basic policy of the medium-term management plan byadopting the following Group management policies.
*Note: “Strategic Domains” are the four business domains designated to be built into the corebusinesses of the Group by 2026, as set forth in “Group Vision 2026.”

The status of main initiatives in the five basic policies of the medium-term management plan for fiscal
2024 are presented below.
1) Virtuous cycle of value created jointly with society and employees
The Company will continue to promote the resolution of social issues through co-creation withstakeholders, further deepen awareness of corporate social responsibility, and strengthen corporate
sustainability initiatives, while developing its management foundation through the sophistication andefficiency of its head office functions.
As the Company seeks to establish its presence as a leading sustainability company, it has changed thepositioning and composition of the Corporate Sustainability Committee since April 2023. Composed
mainly of all Directors, including External Directors, the committee identifies trends in the practice ofsustainability management, determines the issues to be focused on and the direction of our response
through discussion, and supervises the execution of duties through the Board of Directors, aiming tocontinuously upgrade the sustainability activities.
As part of efforts to improve management transparency through detailed disclosure, the Company has
published an ESG Data Book that comprehensively summarizes the Group’s overall sustainability
management, ESG initiatives, and related non-financial information.
In accordance with the Basic Policy on Corporate Sustainability, the Group is promoting human rights
and environmental initiatives, which are of the most important pressing social issues. To address humanrights issues, we have clarified a human rights risk management system that meets the United Nations
Guiding Principles on Business and Human Rights. With regard to environmental issues, recognizing theimportance of reducing emissions of greenhouse gas (hereinafter referred to as “GHG”), which isconsidered to be a cause of climate change, the Group raised the targets for reducing GHG emissions(Scope 1 + 2) (Note 1) at its offices in fiscal 2030 from a 27.5% reduction to a 50% reduction compared-5-

with fiscal 2019, while setting targets of carbon neutrality of GHG emissions (Scope 1 + 2) in fiscal 2040
and net zero (Note 2) GHG emissions (Scope 1 + 2 + 3) in fiscal 2050. The Company’s targets have beenvalidated by the Science Based Targets initiative (SBTi) (Note 3) as being scientifically in line with the“1.5°C target,” which is an upgrade from the SBTi validation of the “2°C target” obtained in 2021.
Furthermore, in April 2023, the Company formulated the Multi-Stakeholder Policy to promote
appropriate collaboration and co-creation with diverse stakeholders. We view that proper distribution of
earnings and outcomes generated by value creation and productivity enhancement to multi-stakeholder
groups will help maintain momentum for wage increases and sustainable economic development. Given
the importance of returns to employees and respect to business partners, we will continue to engage in
our initiatives.
In addition, as part of the Group’s contribution to regional communities, the Group is continuing thecorporate version of hometown tax donations and the projects in cooperation with NPOs in three domainsthat cannot be covered by its business activities (activities to support future users, activities to spread thebenefits of digital technology to society, and activities to mitigate the impacts of digital technology onsociety).
From the perspective of improving the management foundation by upgrading and increasing theefficiency of head office functions, the Company will expand the scope of the “G20 Head Office Function
Upgrade Project,” which it has been working on for some time. In addition, as part of our efforts to shareand further upgrade indirect business activities, the Company is also promoting a shift to shared services
and digital transformation of back-office operations for the whole group through a system centered on
TIS Business Service Inc.
Note 1: An aggregation method that serves as an international standard for GHG calculation andaggregation methods. It was stipulated by the GHG Protocol around 2001. Scope 1 is directemissions from the company, Scope 2 is indirect emissions from purchased electricity, andScope 3 is indirect emissions from other sources, including the value chain
Note 2: Net zero GHG emissions is the condition where anthropogenic GHG emissions and removals
are balanced, with net zero GHG emissions into the atmosphere
Note 3: Targets consistent with reductions required to meet the Paris targets of the United Nations
Framework Convention on Climate Change based on the latest climate change science2) Improve value provided by DX
The Group will continue to promote co-creation with stakeholders, strengthen digital transformation
consulting functions, and advance IT delivery in order to enhance our vision for transforming society.
As we further strengthen the front line, which is the point of contact with stakeholders, the Group is
taking measures to further strengthen DX consulting functions to formulate strategies and address
business issues with the aim of enhancing value for clients. In addition to active recruitment from outside
the Group and internal training rotation measures for the entire Group based on the DX Strategy Human
Resources Conference, the Company’s unique training programs geared to job types and skills are applied
to the entire Group to expand the Group’s consulting methodology and increase the number of talented
DX consultants. The Group is enhancing the collaboration with Miotsukushi Analytics Co., Ltd., aconsolidated subsidiary with strengths in data analysis and AI consulting, and Fixel Inc., a subsidiary withexcellent design consulting capabilities, from a human resource aspect, as well as a business aspect.
Through strategic allocation of management resources, we will continue to focus on enhancing our system
to provide value to help with customers’ digital transformation.
We have been promoting employees’ work-style reforms with the introduction of a human resource
system that enables employees to work in a variety of ways as well as the development of office and IT
environments. In addition to them, as work-style reforms with DX, we consolidated the data that had been
stored in each system within the Company into one place and built a data base to further sophisticate work
styles and enhance overall performance. Based on the analysis results derived from these pieces of data,
we will develop measures to further sophisticate the work styles of our employees.
The Group continues to focus on digital transformation in three domains. We will aim, from an
integrated perspective, to create a virtuous cycle of new value by treating “social digital transformation”
to realize a better society, “business digital transformation” to innovate our customers’ businesses, and“internal digital transformation” to evolve the Group itself, as a single group of steps that strongly
influence each other. As part of internal digital transformation efforts, we have released TIS AIChatLab,
an in-house dedicated ChatGPT environment powered by Microsoft’s Azure OpenAI Service
environment. In the midst of rapid technological development, the field of generative AI, including-6-

ChatGPT, is particularly remarkable for its evolution. We develop an environment where generative AI
can be used securely so that all employees can actually use generative AI, thereby improving operational
efficiency and leading to its effective use in business.
3) Expand investment to generate strengths
Aiming to enhance our ability to realize business structure transformation, the Company will continue
working to allocate management resources to priority areas such as social issue solution services, as wellas measures to upgrade management.
In the payments domain, which is one of the Group’s strengths, we are developing our business in theoverall settlement area, including digital accounts, mobile wallets, service coordination, security, and datautilization, under “PAYCIERGE,” a total brand of retail settlement solutions. The credit card processing
service, which went into service in the second half of the previous fiscal year, is operating steadily, andwe are promoting sales activities to further expand transactions. In addition to this, the Group is preparing
to develop the “Embedded Finance” business and made it possible to embed a full range of settlement
services by combining the front-end settlement functions owned by ULTRA, a consolidated subsidiary,
and the Group’s existing expertise in building settlement back-end functions. Against this backdrop, in
collaboration with Sumitomo Mitsui Card Company, Limited (SMCC), we launched a new payment
platform, the SMCC Mobile Payment Package, which enables businesses to incorporate payment
functions into their own applications. Prepared with functions needed to install payment functions in theirapps, this package service allows businesses to select the necessary functions according to their strategies
and to install payment functions in their apps at a lower price and in a shorter period of time. Evolving
the service so that it can respond to changes in business needs and strategies, we work to provide
businesses with comprehensive support for their cashless initiatives according to their needs and changes
in strategies. We will continue helping to develop a cashless society by expanding our service lineup andbusiness scale of the entire PAYCIERGE in the payment area, which is expected to grow.
As various measures for structural transformation are promoted in the medium-term management plan
(2021–2023), the Company made Nihon ICS Co., Ltd. (“Nihon ICS”) a consolidated subsidiary in April
2023. The aim is to accelerate the growth of IT Offering Services (Note 1), one of our Strategic Domains,by welcoming the company, which mainly targets tax accountant offices and their corporate clients andis engaged in providing financial accounting packages and related services. By combining the Company’sbusiness for financial institutions and Nihon ICS’s business for professionals such as tax accountants, we
are working to sophisticate professional services, enhance financial institutions, and expand our initiatives
into new companies. Aiming to expand our client base and realize new business schemes, we have worked
to establish management and operation systems and strengthen and integrate governance. We willcontinue to strengthen the linkage of Nihon ICS’s services and the Company’s services including expense
settlement and digital payroll, which are closely related to Nihon ICS’s services; consider the possibilityof collaboration between Nihon ICS’s and the Company’s clients; and enhance the quality control process
to further improve the quality of Nihon ICS.
In July 2023, we entered into a capital and business tie-up with Financie, Inc., a web3 platformer, which
can realize the token ecosystem in one go. Creating a linkage between Financie’s many token economics
projects in the regional and sports sectors and the Company’s social system platform centered on thepayment function, we can add the web3 service to our clients’ existing services. Through thecollaboration, we will aim to provide new values.
Furthermore, as part of the efforts to address “health issues,” one of the social issues that the Groupaims to solve through its business, the Company joined the PHR Service Business Association, which
was established in July 2023 with the aim of “Promoting cooperation among diverse stakeholders andcontributing to the extension of the healthy life expectancy of the people and to the well-being of thepeople through the development of the PHR (Personal Health Record, Note 2) service industry” andbecame Executive Officer (Vice President) and Chairperson of the Technical and Education Committee.
The Company provides a healthcare platform that develops health data managed mainly by medical
institutions into PHR so that it can be utilized for health promotion. Utilizing know-how and digitaltechnology, the Group will contribute to the development of guidelines for data utilization and play a rolein promoting standardization as an IT company providing PHR services, thereby contributing to thedevelopment of the PHR service industry.
Note 1: A business area in which the Group’s accumulated know-how and broad range of leading-edge
technologies are combined to create and rapidly deploy IT solutions and services that anticipate
the future needs of our customers-7-Note 2:Lifetime personal health information (medical examination (screening) information,
vaccination history, drug information, medical test results and other medical-care-related
information, and vitals, etc. that individuals measure on a daily basis.)4) Deepen and expand global operations
The Group intends to enhance its global operations and expand the global partnership network byfurther deepening markets through strengthening relationships with investee companies and developing
joint ventures based on its business strategy.
Aiming to form an ASEAN Top Class IT Syndicate, the Group is expanding its partnerships throughcapital and business alliances with leading companies in each domain, focusing on our three axis:“channels” for local market expansion, “technology” for new business/service creation and nextgeneration technology development, and “consulting” for delivering value chain expansion.
In the “channels,” Thailand’s MFEC Public Company Limited is accelerating its investment activities
to expand the Group’s business through Synergy Group Ventures Co., Ltd., which was established as acorporate venture capital (CVC), and is promoting investments in promising start-up companies inThailand and collaborations with the companies invested in.
In “technology,” the Company made minor investments in Atom Computing Inc. and QuEra
Computing Inc., quantum computer startups in the U.S., with the aim of further expanding leading
technologies and services. In quantum computer technology, for which intensified competition is expectedin the future, we will accelerate the collection of information on cutting-edge technologies and consider
long-term cooperation. In addition, by investing in and collaborating with Vista Equity Partners
Management, LLC in the U.S., which is a company specialized in investing in enterprise software
companies, we seek to provide high value-added IT services with the products provided by the company
and its group companies and to gain expertise in the success stories of the companies it invested in.
In “consulting,” the Company made Vector Management Consulting Pvt. Ltd., a major local
management consulting firm in India, an equity-method affiliate and is now working to develop new
global clients. By leveraging Vector Consulting’s expertise in the domain of management consulting, theGroup aims to realize high value-added IT services for the clients in India, Japan, the ASEAN region, andChina, and promote collaboration.
The Group will continue to expand its business domain by making maximum use of alliances forgedthrough strategic investments, integrating the strengths of each company, and building and strengthening
alliances that can cover the ASEAN region, aiming to achieve the FY2026 target of ¥100 billion of
consolidated net sales in our global business.
5) Diversification of human resources, sharper skills
Aiming at added value improvement, the Company will continue to invest in human resources,
including reviewing compensation and investing in education, so that diverse employees can be engaged
and thrive as professionals.
The Company is promoting initiatives such as creating an environment and organizational culture
where diverse individuals can thrive, promoting next-generation work-style reforms looking towards a
new work environment, advancing human resource portfolio management by digitalizing our humanresources database, and supporting engagement with employees and autonomous career development
through the full-scale operation of HR business partners. Also, to further accelerate structuraltransformation, the Company is striving to strategically secure and foster advanced human resources inareas such as consulting, global business, and service business and will place human resources optimally.
To achieve structural transformation toward the realization of Group Vision 2026, the Group is focusing
on increasing added value through the growth of human resources, which is the most importantmanagement capital in order to carry this forward. For some time, the Company has been promoting
investment in human resources to increase employee engagement based on the three axes of the meaningof work, the working environment, and compensation. In order to further promote the reform of themeaning of work and compensation, the Company introduced a new personnel system in April 2023 thatcompletely revamps the compensation, evaluation, grading, and other systems. Under the compensation
system, the Company prioritizes investments in high-level personnel and young employees who drive thebusiness forward, with base salary increases of up to 17% and an average increase of 6%, and the wholeGroup is working to improve compensation. As a result, personnel expenses are expected to increase
approximately ¥5 billion in fiscal 2024 compared with the previous year, but this is positioned as an
upfront investment in human capital, which is essential for the sustainable growth of the Group. By-8-continuing to implement these measures and promoting initiatives to instill the philosophy of the new
personnel system, the Company aims to “accelerate corporate growth by enhancing corporate
competitiveness through the growth of human resources” by encouraging employees to actively think andmove, and to achieve higher performance than expected, leading to increased added value.
In addition, under the Group Diversity and Inclusion Policy, the Group is promoting measures toachieve “physical and mental health,” “enhanced job satisfaction,” and “improved life skills,” aiming to
improve the quality of life of each and every employee working in the Group. Amid such circumstances,in order to achieve advanced health and productivity management, greater productivity and engagementof employees, and enhanced value exchange with society, the Company and INTEC Inc. joined, in July
2023, the Health and Productivity Management Alliance. This is a group of 148 companies andorganizations (as of June 30, 2023) that share the vision of “revitalizing Japanese companies and realizing
the sustainability of employees’ health insurance system through the enhancement of employees’ healthcondition.”Group-wide proactive investments will continue to be made to increase the value of human resources,
and create a virtuous cycle of high added value for the Company, our employees, and society, aiming forthe realization of further growth of the Group and improved corporate value, thereby creating a more
prosperous society.
In addition, from May to July 2023, the Company acquired treasury stock of approximately ¥6,199 million(total of 1,678,900 shares) in total as part of its efforts to enhance shareholder returns and capital efficiency
by implementing flexible capital policies that can swiftly respond to changes in the business environment. As
a general rule, the Company holds up to 5% of the number of issued shares, and any holdings exceeding 5%
of issued shares would be retired.
(2) Analysis of Financial Condition(Assets)
Consolidated total assets as of the end of the second quarter amounted to ¥492,940 million, an increaseof ¥30,620 million from ¥462,320 million at the end of the previous fiscal year.
Current assets were ¥264,328 million, compared with ¥268,682 million at the end of the previous fiscal
year. The decrease of ¥4,354 million primarily consists of a ¥11,091 million decrease in cash anddeposits.
Fixed assets totaled ¥228,612 million, compared with ¥193,637 million at the end of the previous fiscal
year. The increase of ¥34,974 million primarily consists of an ¥8,185 million increase in goodwill and a¥20,947 million increase in other intangible assets following the completion of the business combinationand the allocation of related acquisition costs.
(Liabilities)
As of the end of the second quarter, total liabilities amounted to ¥172,492 million, a ¥19,398 million
increase from ¥153,094 at the end of the previous fiscal year.
Current liabilities totaled ¥120,857 million, compared with ¥117,179 million at the end of the previous
fiscal year. The increase of ¥3,678 million primarily consists of a ¥1,424 million increase in short-termborrowings.
Fixed liabilities amounted to ¥51,634 million, compared with ¥35,914 million at the end of theprevious fiscal year. The increase of ¥15,719 million primarily consists of a ¥7,355 million increase indeferred tax liabilities.
(Net assets)
Consolidated net assets as of the end of the second quarter amounted to ¥320,448 million, an increaseof ¥11,222 million from ¥309,226 million at the end of the previous fiscal year. The increase primarilyreflects a ¥11,804 million increase in retained earnings as a result of quarterly net income attributable toowners of the parent and dividends of surplus.

-9-(3) Consolidated Earnings Forecast and Caution on Forward-Looking Statements
In light of the fact that the consolidated financial results for the first half of fiscal 2024 exceeded the plan,
the consolidated financial forecast for the full fiscal year ending March 31, 2024, released on May 9, 2023,
has been revised as follows.
In the business environment surrounding the Group, as the elements required of companies, including
solutions to social issues, become more diverse, activities to transform business processes utilizing digitaltechnologies and business model transformation are expanding more than ever, and IT investment demand is
expected to increase further. However, the Group must pay close attention to the risk of downward pressure
on the Japanese economy amid continued global monetary tightening.
Amid such circumstances, the Group will continue to expand business by accurately responding tocustomers’ demand for digital transformation, and aim to further improve profitability by providing highadded-value businesses and promoting productivity and quality enhancement measures, etc., while
aggressively making investments that will contribute to future growth, including upfront investments in humanresources, which are the most important management capital. Note that the decrease in net income attributableto owners of the parent company is due to extraordinary income of ¥22,040 million recorded in the previous
fiscal year.
In addition, the business results of Nihon ICS Co., Ltd. are reflected in the consolidated financial resultsfrom the second quarter of fiscal 2024. The Company’s consolidated earnings forecast below includes their
net sales of ¥5.4 billion and operating income of ¥1.7 billion as well as amortization of goodwill related to
Nihon ICS of ¥1.2 billion. Goodwill and other items related to the acquisition had been tentatively accounted
for based on values as of May 9, 2023, estimated with reasonable information available. Since the allocationof acquisition costs was completed in the second quarter of fiscal 2024, goodwill of ¥8.3 billion (to beamortized on a straight-line basis over 15 years), customer-related intangible assets of ¥21.2 billion (to beamortized on a straight-line basis over 20 years) and deferred tax liabilities of ¥6.5 billion have been
confirmed.
((Unit: millions of yen)Previously
released

Current
released

forecast(A)

forecast(B)

Ratio of
Increase/decre

Increase/decrease
(B-A)

ase
(%)

Net sales

530,000

536,000+6,000+1.1%

Cost of sales

379,500

384,700+5,200+1.4%

Gross profit

150,500

151,300

+800

+0.5%

Gross profit ratio

28.4%

28.2%

-0.2P

-

Selling, general and administrative expenses

87,00086,800

-200

-0.2%

Operating income

63,50064,500+1,000+1.6%

Operating income ratio

12.0%

12.0%

-

-

Recurring profit

63,50064,500+1,000+1.6%

42,00042,000--Net income attributable to owners of theparent company- 10 -

<By segment>((Unit: millions of yen)
Ratio of
Increase
Increase/decrease/decrease(B-A)(%)+1,500+1.2%

Previously
released
forecast(A)
122,800

Current
released
forecast(B)
124,300

Operating income

7,450

7,300

-150

-2.0%

Offering
ServiceBusiness

Net sales
Operating income ratio

6.1%

5.9%

-0.2P

-

Business
Process
Management

Net sales

44,00043,000-1,000-2.3%

Financial IT
Business

Industrial IT
Business

Regional IT
Solutions

Other

Operating income

5,150

4,850

-300

-5.8%

Operating income ratio

11.7%

11.3%

-0.4P

-

Net sales

105,500

105,500--

Operating income

13,90014,300

+400

+2.9%

Operating income ratio

13.2%

13.6%

+0.4P

-

Net sales

115,700

117,700+2,000+1.7%

Operating income

16,80017,600

+800

+4.8%

Operating income ratio

14.5%

15.0%

+0.5P

-

Net sales

165,100

169,100+4,000+2.4%

Operating income

19,90020,000

+100

+0.5%

Operating income ratio

12.1%

11.8%

-0.3P

-

Net sales

9,600

9,600

-

-

Operating income

700

750

+50

+7.1%

Operating income ratio

7.3%

7.8%

+0.5P

-

The comparison between the latest full-year consolidated earnings forecast and fiscal 2023 actual results is
as follows.
(Unit: millions of yen)
Fiscal 2023
Actual results

Fiscal 2024
Forecast

Year-on-yearchangeNet sales

508,400

536,000+5.4%

Cost of sales

366,668

384,700+4.9%

Gross profit

141,732

151,300+6.8%

Gross profit ratio

27.9%

28.2%

+0.3P

Selling, general andadministrative expenses

79,40386,800+9.3%

Operating income

62,32864,500+3.5%

Operating income ratio

12.3%

12.0%

-0.3P

Recurring profit

63,20464,500+2.0%

Net income attributable to ownersof the parent company

55,46142,000-24.3%- 11 -

<Analysis of key factors in the increase/decrease in operating income (forecast, year-on-year change)><By segment>

111,752((Unit: millions of yen)
Year-onFiscal 2024
year
Forecastchange124,300+11.2%

6,426

7,300

Fiscal 2023
Actual results
Offering Service
Business
Business
Process
Management
Financial IT
Business

Industrial IT
Business

Regional IT
Solutions

Other

Net sales
Operating income+13.6%

Operating income ratio

5.8%

5.9%

+0.1P

Net sales

43,25543,000-0.6%

Operating income

5,123

4,850

-5.3%

Operating income ratio

11.8%

11.3%

-0.5P

Net sales

101,184

105,500+4.3%

Operating income

13,896

14,300+2.9%

Operating income ratio

13.7%

13.6%

-0.1P

Net sales

113,632

117,700+3.6%

Operating income

16,72817,600+5.2%

Operating income ratio

14.7%

15.0%

+0.3P

Net sales

160,010

169,100+5.7%

Operating income

19,34320,000+3.4%

Operating income ratio

12.1%

11.8%

-0.3P

Net sales

8,957

9,600

+7.2%

Operating income

878

750

-14.6%

Operating income ratio

9.8%

7.8%

-2.0P

The Company’s medium-term management plan (2021–2023) includes a basic shareholder return policy thattargets a total return ratio of 45%. Due to implementation of the above-mentioned share buyback, and basedon the current consolidated earnings forecast and dividend forecast, the total return ratio for fiscal 2024 is
expected to be 45.2%.
*Note: Total return ratio: The ratio of the combined value of dividend payments and share buybacks
versus net income attributable to owners of the parent company- 12 -

2. Consolidated Financial Statements(1) Consolidated Balance Sheets
Items
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable, and contract assets
Lease receivables and lease investment assets
Marketable securities
Merchandise and finished goods
Work in process
Raw materials and supplies
Other current assets
Allowance for doubtful accounts
Total current assets
Fixed assets
Property and equipment
Buildings and structures, net
Machinery and equipment, net
Land
Leased assets, net
Other property and equipment, net
Total property and equipment
Intangible assets
Software
Software in progress
Goodwill
Other intangible assets
Total intangible assets
Investments and other assets
Investment securities
Net defined benefit asset
Deferred tax assets
Other assets
Allowance for doubtful accounts
Total investments and other assets
Total fixed assets
Total assets- 13 -

As of March 31, 2023

As of Sep. 30, 2023

millions of yen

millions of yen

94,675
131,488
4,542
284
3,518
1,758
207
32,668(461)
268,682

83,583
136,606
4,172
364
4,868
1,428
182
33,473(351)
264,328

33,635
8,336
9,650
3,835
6,861
62,31833,013
8,089
10,246
3,873
7,195
62,41722,039
3,609
692
1,329
27,671

20,882
4,314
8,878
22,27656,352

52,7998,089
21,15924,174(2,575)
103,647
193,637
462,320

60,4698,189
19,62624,258(2,702)
109,842
228,612492,940

ItemsLiabilities
Current liabilities
Notes and accounts payable
Short-term borrowings
Income taxes payable
Accrued bonuses to directors and employees
Provision for loss on order received
Other allowances
Other current liabilities
Total current liabilities
Non-current liabilities
Long-term debt
Lease obligations
Deferred tax liabilities
Deferred tax liabilities from revaluation of land
Accrued retirement benefits to directors
Other allowances
Net defined benefit liability
Asset retirement obligations
Other non-current liabilities
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Common stock
Additional paid-in capital
Retained earnings
Less treasury stock, at cost
Total shareholders’ equity
Accumulated other comprehensive income
Net unrealized gains on other securities
Deferred gains or losses on hedges
Revaluation reserve for land
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets- 14 -

As of March 31, 2023

As of Sep. 30, 2023

millions of yen

millions of yen

26,976
11,99013,354
17,540607
160
46,549117,179

27,912
13,415
7,958
17,331
1,219
162
52,858120,857

4,052
4,011
344
272
0
218
12,0386,924
8,051
35,914
153,094

11,000
3,933
7,700
272
0
139
13,167
7,067
8,353
51,634
172,492

10,00140,470247,263(7,614)
290,120

10,001
40,486
259,067(13,172)
296,3837,900(31)(2,672)
628
1,093
6,918
12,186309,226
462,320

12,18462(2,672)
1,395
1,072
12,041
12,023
320,448
492,940

(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income
Consolidated Statements of Income
First Half, FY2023
First Half, FY2024
Items(Apr. 1 - Sep. 30, 2022) (Apr. 1 - Sep. 30, 2023)
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Equity in profit of affiliated companies
Gain on foreign exchange
Other
Total non-operating income
Non-operating expense
Interest expenses
Equity in losses of affiliated companies
Financing expenses
Other
Total non-operating expenses
Recurring profit
Extraordinary income
Gain on sales of investment securities
Gain on reversal of asset retirement obligations
Gain on liquidation of investment securities
Other
Total extraordinary income
Extraordinary loss
Loss on valuation of investment securities
Impairment loss
Other
Total extraordinary loss
Income before income taxes
Income taxes: current
Income taxes: deferred
Total income taxes
Net income
Net income attributable to non-controlling interests
Net income attributable to owners of the parent company- 15 -

millions of yen

millions of yen

245,305
178,229
67,07539,36527,709267,488
194,156
73,332
42,94530,387

276
601
420
457
1,755

133
532
255
510
334
1,766

139
5
95
239
29,225

127
65
126
318
31,835

324
54
378

177
551
248
155
1,134

316
655
94
1,066
28,537
8,326
608
8,935
19,602768
18,834

1,093
427
41
1,563
31,406
9,160
1,237
10,39821,007700
20,307

Consolidated Statements of Comprehensive Income
First Half, FY2023
First Half, FY2024(Apr. 1 - Sep. 30, 2022) (Apr. 1 - Sep. 30, 2023)

Items

millions of yen

Net income
Other comprehensive income
Net unrealized gains on other securities
Deferred gains or losses on hedge
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Share of other comprehensive income of equitymethod affiliates
Total other comprehensive income
Comprehensive income(Composition)
Comprehensive income attributable to owners of theparent company
Comprehensive income attributable to noncontrolling interests- 16 -

millions of yen

19,60221,007(4,380)
27
859
207

4,291
190
710
(19)

366

289

(2,918)
16,683

5,463
26,471

15,59425,430

1,089

1,041

(3) Notes on the Consolidated Financial Statements(Notes on the Going-concern Assumption)
Not applicable(Notes on Significant Changes in the Amount of Shareholders’ Equity)
Not applicable

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

- 17 -