“The INES Group achieved a record profit due to
an increase in net sales and thorough project
The Group also took strong steps to improve
asset efficiency by disposing of real estate holdings. ”

President & Representative Director
Koichi Yoshimura

I. External environment in the fiscal year ended March 31, 2020

 During the fiscal year under review, the Japanese economy sustained a modest recovery supported by factors such as a pickup in
consumer spending and improvements in employment conditions and corporate earnings, despite concerns persisting over economies
overseas, such as trade issues and economic trends in China. In the information service industry in which INES Corporation
(the “Company”) and its subsidiaries and affiliates (the “INES Group”) operate, IT investments of companies for digital transformation
and other business activities remained firm.
 However, reflecting the COVID-19 pandemic, which has been ongoing since February 2020, the income environment and earnings
have been rapidly deteriorating in Japan, across a wide range of industries. Although the impact of COVID-19 on the Group’s consolidated
operating results for the fiscal year under review was limited, the outlook remains uncertain, given the increasing number of infections
and the stagnant national economic activities associated with the state of emergency declared by the Japanese government since March

II. Initiatives of the Company

 In the fiscal year under review, the INES Group conducted aggressive marketing activities to increase orders and net sales, and focused on developing the advanced version of WebRings, a core product for local governments.
 In addition, based on the business and capital tie-up agreement with Mitsubishi Research Institute Inc. (“MRI”) Group concluded in May
2018, the INES Group has achieved positive results from initiatives for the joint development of new solutions and collaborative
order-winning activities in the public, financial and general industry sectors. The alliance between the two groups has been strengthened
after MRI acquired additional shares of the Company in October 2019.
 In order to improve asset efficiency, which the INES Group has recognized as a long-standing issue, the Group has focused on
initiatives, including the sale of the Yokohama Office, whose book value was the largest among the real estate owned by the Group,
and the booking of impairment loss with respect to other real estate owned by the Group in the Tokyo metropolitan area, and started
to find prospects in the disposal of real estate owned.

III. Operating results in the fiscal year under review

 Net sales for the fiscal year under review increased to 42,278 million yen (up 10.8% year on year), recording the second-highest level
next to those in the fiscal year ended March 31, 2007. This was mainly attributable to growing demand for system modifications
associated with the revisions of different laws and the increase in orders from new customers consisting of local governments, as well as
for new tasks in the public sector, the contribution of increased sales to the retail industry in the general industry sector and the
expansion of the BPO business for public institutions at the Group companies, despite a reactionary year-on-year fall in sales of
equipment in the financial sector.
 On the profit front, operating profit stood at 2,903 million yen (up 33.8% year on year) and ordinary profit came to 2,957 million yen
(up 32.4% year on year), mainly due to the elimination of the impact of unprofitable projects in the previous fiscal year, in addition to
the positive effect of increased sales described above. Temporary costs for office relocation were posted under operating expenses in
the fiscal year under review, but the core operating profit excluding the foregoing operating expenses achieved another record high,
at 3,500 million yen (ratio of core operating profit to net sales: 8.3%).
 While extraordinary losses of 2,604 million yen were posted by the third quarter, including the impairment loss associated with the
sale of the Yokohama Office for the purpose of improving asset efficiency, extraordinary income of 4,356 million yen was posted,
including gain on sales of non-current assets associated with the sale of the old head office (Sanbancho, Chiyoda-ku). Moreover,
extraordinary losses of 1,675 million yen were posted in the fourth quarter mainly due to the booking of impairment loss with respect
to other real estate owned by the Group in the Tokyo metropolitan area for the further improvement of asset efficiency.
 As a result, profit attributable to owners of parent achieved another record high, at 2,063 million yen (up 38.3% year on year). 
 ROE (return on equity), an indicator of profitability and capital efficiency, came to 5.5% (up 1.5 percentage points year on year).

 The Group will revise the year-end dividend for the fiscal year under review to 25 yen per share, consisting of 15 yen per share for
the year-end dividend and 10 yen per share as a special dividend. This revision was attributable to an increase in each profit item,
particularly record-high profit attributable to owners of parent. As a result, the annual dividend will be revised upward from 30 yen
per share to 40 yen per share (dividend increase of 15 yen year on year).

 We ask the shareholders for their continued support and encouragement.


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