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

July 31, 2024

Consolidated Financial Statements
for the First Quarter of the Fiscal YearEnding March 31, 2025 [Japanese standard]
INES Corporation
Listing:
Representative:
Contacts:

Tokyo Stock Exchange (Code: 9742)
Shuji Hattori, President and Representative Director
Satoshi Numazaki, General Manager, Corporate Staff Division
Tel: +81-3-6775-4401
Head Office:1-38-11, Nihonbashi Kakigara-cho, Chuo-ku, Tokyo 103-0014, Japan
Tel. +81-3-6775-4401
URL:
https://www.ines.co.jp/en/
Scheduled date to commence dividend payments:―
Preparation of supplementary material on financial results:
No
Holding of financial results briefing:No

1. Consolidated Financial Results for the First Quarter of the Fiscal Year Ending
March 31, 2025 (April 1, 2024 to June 30, 2024)(1) Consolidated Operating Results(Million yen, figures in percentages denote year-on-year changes.)
Profit attributable toOperating profit
Ordinary profit
owners of parentNet sales
Three months ended June 30, 2024
Three months ended June 30, 2023
(Note) Comprehensive income

8,436(15.3%)

―

(321)

(304)

9,957
3.3%
694
(5.9%)
719
Three months ended June 30, 2024: ¥230 million (-%)
Three months ended June 30, 2023: ¥494 million (16.8%)
Profit per share (Yen)

Fully diluted profit per share(Yen)Three months ended June 30, 2024

(13.24)―Three months ended June 30, 2023

18.17

―

Total assets

Net assets

52,75737,061

―

(275)

―

(5.3%)

377(14.9%)(2) Consolidated Financial Position
As of June 30, 2024
As of March 31, 2024
(Reference) Shareholders’ equity

54,427
As of June 30, 2024: ¥37,061 million(Million yen)
Equity ratio (%)
70.2

37,79069.4
As of March 31, 2024: ¥37,790 million

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

End of Q2

Fiscal year ended March 31, 2024―

Fiscal year ending March 31, 2025―

Fiscal year ending March 31, 2025
(Forecast)(Note) Revisions to dividend forecasts published most recently: NoEnd of Q3

Fiscal year endAnnual25.00―

25.00

50.00

―――

55.00

3. Forecasts for Consolidated Financial Results for the Fiscal Year Ending March31, 2025 (April 1, 2024 to March 31, 2025)
Net sales(Million yen, figures in percentages denote year-on-year changes.)
Profit attributable toProfit per share
Ordinary profit
owners of parent(Yen)

Operating profit

Full year
44,0008.5%
4,00039.0%(Note) Revisions to results forecasts published most recently: No

4,000

146.4%

2,700

50.3%

129.80* Notes(1) Any important changes in the scope of consolidation during the term: No(2) Application of special accounting treatment to the preparation of consolidated financial statements :Yes
(3) Changes in accounting policies and changes or restatement of accounting estimates
1. Changes in accounting policies associated with the revision of accounting standards, etc.: No
2. Changes in accounting policies other than 1.: No
3. Changes in accounting estimates: No
4. Restatement: No(4) Number of shares outstanding (common shares)
1. Number of shares outstanding at the term end (including treasury shares)
FY2025/3 Q1:
20,900,000 shares
FY2024/3:
20,900,000 shares
2. Number of treasury shares at the term end
FY2025/3 Q1:
99,539 shares
FY2024/3:
96,727 shares
3. Average number of shares outstanding
FY2025/3 Q1:
20,805,961 shares
FY2024/3 Q1:
20,798,359 shares* Review of the accompanying quarterly consolidated financial statements by certified public accountants or
audit corporations: None
* Explanation regarding the proper use of results forecasts and other important notes(Disclaimer regarding forward-looking statements)
Forward-looking statements such as results forecasts provided in this document are prepared based on currently
available information and assumptions that are deemed reasonable, but the Company does not intend to guarantee
their achievement. Actual results may differ significantly from the above forecasts for various reasons. For
conditions regarding the assumptions for results forecasts and notes on the use of results forecasts, etc., please referto page 3 of the accompanying materials “1. Outline of Operating Results, (3) Explanation on future forecast
information such as consolidated results forecasts.”2

1. Outline of Operating Results
During the first quarter of the fiscal year under review, the Japanese economy remained uncertain due tosoaring energy and raw material prices, among other factors, despite improvements in the employment andincome environment.
Looking at the business areas of the Company, with the government advocating the Digital Garden City Nation
as one of the important pillars of the New Form of Capitalism, promoting digital transformation (DX) isexpected to take on increase importance as the key to resolving social issues.
The Group set out to be a company that continues to take on challenges and evolve as its vision in the 2026
Medium-term Management Plan, which started in the current fiscal year. With this in mind, it is in the processof advancing its businesses based on the three pillars of action, namely, standardizing the information system
for local governments, developing next-generation solutions, and enhancing business foundations, with a view
to becoming a DX-oriented company that makes the most of AI.
With respect to standardizing the information system for local governments, the peak period for the initiative
has been pushed back and shortened, reflecting a partial postponement of the transition deadline, which wasexpected to be the end of FY2025, due to the government’s decision. In the meantime, it is necessary tofacilitate an accurate and secure transition of the systems of a large number of local governments. The Groupconsiders the transition as a top priority matter and is working on it by utilizing a nationwide network and incollaboration with its alliance parties, while also continuing to focus on quality improvements under a robust
development and introduction system.
Regarding the development of next-generation solutions, the Group has decided to set out to develop the nextgeneration WebRings under the concept of being connected with an eye on opportunities after thestandardization of local governments’ systems. The Group will work to establish seamless collaboration within
local governments and incorporate other companies’ solutions, while also making local governments andprivate businesses connected to provide services on a cross-industry basis. In doing so, it will provide optimal
services for residents and respond to diverse demand. Meanwhile, in the private sector, the Group will
provide new solutions for local communities and private companies by utilizing the expertise that it hasdeveloped through the provision of DX solutions for local governments. In addition, the Company will deepen
its collaborative relationship with the Mitsubishi Research Institute Group and work on regional co-creation tosolve residents’ issues and drive the digitization of local communities.
As for enhancing its business foundations, the Company will seek to produce the effects of partnershippromotion while also utilizing its alliance partners, thereby increasing the number of customers andstrengthening its customer base. In addition, to improve the productivity and quality of development with theuse of AI, the Group began constructing and operating a generative AI environment internally, while
simultaneously accelerating the Group’s investment in IT infrastructure.
The Group also has been moving forward with sustainable management by focusing on its three priority items,
namely, investment in human capital, financial strategies and investment in IT infrastructure. Investing inhuman capital, the Group has been facilitating strategies to help each employee shine, while also developing asystem to work consistently on human capital investment strategies in sync with business strategies, with aview to accelerating the development of AI/DX-oriented personnel. In terms of financial strategies, efforts
have been made to optimize capital efficiency on a groupwide basis with an eye on improving shareholder
value and facilitate strategic investments for business expansion. From the perspective of investment in IT
infrastructure, efforts have been made to implement plans in the IT roadmap aimed at enhancing the IT
foundations with an eye to improving business value, promoting data-driven management and facilitating
quality improvements on a groupwide basis.
Meanwhile, with a view to strengthening its management base, the headquarters functions of the Group wereconsolidated in April 2024 to facilitate the creation of group synergies and improvement of corporate value.

3(1) Outline of Operating Results for the First Quarter Ended June 30, 2024
Consolidated net sales for the first quarter under review decreased 15.3% year on year, to ¥8,436 million(please refer to “Consolidated net sales by sector,” which are shown in the table below). Net sales in the Public
sector decrease 23.2% year on year, to ¥3,411 million, mainly reflecting a decrease in the number of largescale outsourcing projects such as those related to various types on welfare benefits, attributable to the shift ofCOVID-19 to a category 5 infectious disease. Even so, orders received in the current fiscal year linked to theintroduction of the standardization system remained steady. Net sales in the Private sector declined 8.9% year
on year, to ¥5,024 million, mainly reflecting a decrease in the number of backbone system replacement projects
for the retailing industry.
On the profit side, the operating loss came to ¥321 million (compared to operating profit of ¥694 million in thesame period of the previous year) and the ordinary loss was ¥304 million (compared to an ordinary profit of¥719 million in the same period of the previous year), reflecting lower net sales in each field. As a result, theCompany recorded a loss attributable to owners of parent of ¥275 million (compared with profit of attributableto owners of parent of ¥377 million in the same period of the previous year).
Consolidated net sales by sector(Million yen)Three months ended June 30, 2023
Category/TermAmountPublic4,441

PrivateTotal

Three months ended June 30, 2024

Composition ratio(%)

AmountComposition ratio
(%)
40.4

YoY change (%)

44.6

3,411

(23.2)

5,516

55.4

5,024

59.6

(8.9)

9,957

100.0

8,436

100.0

(15.3)(Note) Effective from the first quarter of the fiscal year under review, net sales that were included in Financial
and General Industry have been reclassified and presented in Private. Net sales in the first three months ofthe previous fiscal year are reclassified and presented in the same way.
Consolidated net sales by product/service(Million yen)Three months ended June 30, 2023
Category/Term

AmountThree months ended June 30, 2024

Composition ratio(%)

AmountComposition ratio(%)

YoY change (%)

System development

3,466

34.9

3,297

39.1(4.9)

System operation

3,986

40.0

3,211

38.1(19.4)

System maintenance

1,227

12.3

1,216

14.4

(0.9)

Sales of informationequipment

221

2.2

166

2.0(25.0)

Other

1,056

10.6

545

6.4(48.4)

Total

9,957

100.0

8,436

100.0(15.3)(2) Outline of Financial Position for the First Quarter Ended June 30, 2024
Looking at the financial position at the end of the first three months of the fiscal year under review, total assets
stood at ¥52,757 million, a decrease of ¥1,670 million from the end of the previous fiscal year.
Current assets decreased ¥2,033 million, to ¥18,250 million, reflecting decreases mainly in notes and accounts
receivable-trade, and contract assets. Non-current assets increased by ¥363 million to ¥34,507 million.
Current liabilities at the end of the first three months of the fiscal year amounted to ¥7,045 million, a decreaseof ¥556 million from the end of previous fiscal year, due mainly to income taxes payable. Non-current
liabilities decreased ¥384 million from the end of the previous fiscal year, to ¥8,650 million.
Net assets declined ¥728 million, to ¥37,061 million, mainly as a result of dividend payments.

4(3) Explanation of Consolidated Earnings Forecast and Other Forward-looking Statements
The consolidated financial results forecast and dividend forecast published on April 30, 2024 remainunchanged.
(Caution on future forecast information)
Forward-looking statements such as results forecasts provided in this document are prepared based on currentlyavailable information and assumptions that are deemed reasonable, but the Company does not intend toguarantee their achievement. Actual results may differ significantly from the above forecasts for variousreasons.

5Quarterly Consolidated Financial Statements and Important Notes
Quarterly Consolidated Balance Sheet
As of March 31 and June 30, 2024
(Million yen)
FY2023(As of March 31, 2024)
ASSETS
Current assets
Cash and deposits
Notes and accounts receivable - trade, andcontract assets
Work in process
Raw materials and supplies
Prepaid expenses
OtherAllowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation
Buildings and structures, netTools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net
LandConstruction in progress
Total property, plant and equipment
Intangible assets
Software
Other
Total intangible assets
Investments and other assets
Investment securities
Long-term prepaid expenses
Deferred tax assets
Other
Total investments and other assets
Total non-current assets
Total assets

6

1Q of FY2024(As of June 30, 2024)

6,479

10,382

11,855

5,769

383

584

6987

431

519

1,084

919

(19)

(13)

20,283

18,250

1,479

6,021

(628)

(692)

851

5,329

3,996

4,009

(2,971)(3,014)

1,025

995

5,299

5,299

4,587

–

11,764

11,624

2,498

2,673

23

23

2,522

2,696

13,535

13,580

767

673

4,147

4,656

1,407

1,274

19,857

20,18534,14334,50754,42752,757

Quarterly Consolidated Balance Sheet
As of March 31 and June 30, 2024
(Million yen)
FY2023(As of March 31, 2024)

1Q of FY2024(As of June 30, 2024)

LIABILITIESCurrent liabilities

Accounts payable - trade
Current portion of long-term borrowings
Accrued expenses
Income taxes payable
Accrued consumption taxes
Advances received
Provision for bonuses
Provision for bonuses for directors (and otherofficers)
Provision for losses on orders received
Asset retirement obligations
Other
Total current liabilities

1,909

1,804

416

625

1,297

1,144

722

181

272

170

129

441

959

1,431

80

26

49

85

230

243

1,533

889

7,601

7,045

4,583

4,374

88

33

3,411

3,299

154

147

798

796

Non-current liabilities

Long-term borrowings
Provision for retirement benefits for directors(and other officers)
Net defined benefit liability
Asset retirement obligations
Other
Total non-current liabilities
Total liabilities
NET ASSETS
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Remeasurements of defined benefit plans
Total accumulated other comprehensive
incomeTotal net assets
Total net assets and liabilities

79,035

8,650

16,637

15,69615,00015,00010,09910,101

12,438

11,643

(140)

(120)

37,39836,624

54

92

336

344

391

436

37,79037,061

54,42752,757

Quarterly Consolidated Statement of Income
For the three months ended June 30, 2023 and 2024
(Million yen)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit (loss)
Non-operating income
Interest income
Dividends income
Other
Total non-operating income
Non-operating expenses
Interest expenses
Other
Total non-operating expenses
Ordinary profit (loss)
Extraordinary income
Total extraordinary income
Extraordinary losses
Loss on retirement of non-current assets
Special retirement benefits
Other
Total extraordinary losses
Profit (loss) before income taxes
Income taxes
Profit (loss)
Profit (loss) attributable to owners of parent

8

1Q of FY2023(April 1, 2023 toJune 30, 2023)

1Q of FY2024(April 1, 2024 toJune 30, 2024)

9,957

8,436

7,668

7,208

2,289

1,228

1,595

1,549

694

(321)

13

13

576625

270

70

20

10719

(304)

––

17––

45
15

168718(372)

340(96)377(275)377(275)

Quarterly Consolidated Statement of Comprehensive Income
For the three months ended June 30, 2023 and 2024
(Million yen)

Profit (loss)
Other comprehensive income
Valuation difference on available-for-sale securities
Remeasurements of defined benefit plans, net of tax
Total other comprehensive income
Comprehensive income
Comprehensive income attributable
Comprehensive income attributable to owners of parent

9

1Q of FY2023(April 1, 2023 toJune 30, 2023)

1Q of FY2024(April 1, 2024 toJune 30, 2024)

377(275)

9937177116

45494(230)

494(230)

Quarterly Consolidated Statement of Cash Flow
For the three months ended June 30, 2023 and 2024
(Million yen)
1Q of FY2023(April 1, 2023 toJune 30, 2023)

1Q of FY2024(April 1, 2024 toJune 30, 2024)

718

(372)

426

438

577

471

(53)

(53)

(3)

362(55)

(44)

(101)

1

7

Cash flows from operating activities:

Profit (loss) before income taxes
Depreciation
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for bonuses for directors (andother officers)
Increase (decrease) in provision for losses on order received
Increase (decrease) in provision for retirement benefits for
directors (and other officers)
Increase (decrease) in retirement benefit liability
Loss on retirement of non-current assets
Special retirement benefits
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Decrease (increase) in other assets
Increase (decrease) in trade payables
Increase (decrease) in other liabilities
Other, net(Subtotal)
Income taxes refund
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Net decrease (increase) in time deposits
Purchase of property, plant and equipment
Purchase of intangible assets
Purchase of long-term prepaid expenses
Purchase of investment securities
Payments of leasehold and guarantee deposits
Proceeds from refund of leasehold and guarantee deposits
Payments for asset retirement obligations
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Repayments of lease obligations
Purchase of treasury shares
Cash dividends paid
Net cash provided by (used in) financing activities
Net increase (decrease) in cash and cash equivalents
Beginning cash and cash equivalent balanceEnding cash and cash equivalent balance

10–

45

6,236

6,399

(194)

(219)

34

23

(210)

2

(206)

(357)

(71)

(77)

7,212

6,186

–

42

(754)

(727)

6,457

5,500

–

1,000

(498)

(871)

(181)

(333)

(79)

(20)

(1)

(1)

(47)

(40)

58

173

–

(8)

0–

(748)

(102)

(3)

00

0

(491)

(493)

(495)

(494)

5,213

4,903

9,162

5,265

14,376

10,168