FAQ (Search categories)

FY08/21_Q1

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• How has recovery in utilization been during Q1 FY08/21?

  With regard to the drop in utilization rate due to COVID-19, on a SHIFT parent-only basis, we have seen recovery to largely the same level as normal. Some of our group companies are still seeing lower-than-normal utilization, but recovery trends have been confirmed towards the second half of this fiscal year.

• What are migration projects?

  The English term “migration” is used to refer to projects that involve migration of computer systems or data, such as when an on-premises system reliant on conventional hardware is replaced by a cloud-based system. Usually, migration projects involve not only the construction of the new cloud-based system, but also the migration of the data on the existing system. Therefore, unlike ordinary software development projects, migration projects are characterized by the fact that testing accounts for around 60% of the work. This means that customers are keen to reduce costs and, as this area of business is highly compatible with the added value we can create in our Software Testing service, this is one of the focus areas of our business going forward.

• Has there been any impact from the 2nd State of Emergency?

  As of the end of January 2021, we have not observed any particular impact from the 2nd State of Emergency.

• Has the Employee Stock Ownership Plan (ESOP) been in place for a while?

  Since January 2016, SHIFT has been granting shares to employees demonstrating exceptional performance.
  We were able to confirm that such a system is effective as an incentive plan, not only for the employees who have been granted shares, but also for other employees, boosting motivation among employees overall, raising commitment to corporate earnings, and also reducing the number of people who leave the company. We have therefore decided to extend the ESOP term and allocate additional monetary contributions, as announced in January 2021.

• What is the main business of VISH Inc.?

  VISH Inc. is a subsidiary of SHIFT, headquartered in Nagoya. Its main areas of business are Cloud Services, System Development, and Technical Support. Its mainstay service is “Bus Catch”, which combines bus location information with a business support system. VISH Inc. provides various different services to kindergartens, nursery schools, swimming schools, driving schools, and so forth, supporting such customers as they proactively work to improve efficiency through IT. VISH Inc. has been consolidated within the SHIFT Group since Q2 FY8/21.
  Please refer to the press release for details.
  https://en.shiftinc.jp/news_en/announcement-of-acquisition-of-vish-inc/

• What is the main business of Survage System Inc.?

  Survage System Inc. is a specialist in the field of network integration, engaged in a wide range of network businesses including design, construction, operation, and maintenance. Survage System Inc. serves a broad range of customers, from government institutions, large ships and other forms of transport to small and medium-sized enterprises.
  Survage System Inc. has joined the SHIFT Group as a fully owned subsidiary of ALH Inc., a group company.
  Please follow the link for more details.
  https://en.shiftinc.jp/news_en/announcement-of-acquisition-of-survage-system-inc/

• What is the main business of ADX Consulting?

  ADX Consulting is a company established by our wholly-owned subsidiary HOPES Corporation as a joint venture with Claudio Inc. By focusing on “user behavior and experiences”, ADX Consulting will realize use of user-essential systems in cloud ERP systems. In doing so, ADX Consulting will promote the digital transformation of client companies.
  For more information, please follow the link.
  https://en.shiftinc.jp/news_en/announcement-of-establishment-of-a-subsidiary/

• What is the source of the 243 million yen grant?

  We received this grant as an Employment Adjustment Subsidy. It was received after our group companies paid leave allowances and other benefits to employees as a result of the impact of the spread of COVID-19.

  As of now (end of January 2021), we expect to receive this Subsidy until around Q2 FY08/21.

• Is the drop in recruitment cost in Q1 FY08/21 due to a decline in the number of people hired?

  Recruitment costs declined year on year in Q1 FY08/21 because of the absence of mass advertising and other recruitment activities that were conducted during Q1 FY08/20.

  Furthermore, employees who were forced to travel to work during this pandemic because of project requirements were paid “risk allowances,” and the increase in media exposure generated by this allowance strengthened our profile in terms of recruitment. As a result, we saw acceleration in job application being submitted directly through our own website or through referrals, as opposed to job applications sent via recruitment agencies. This has increased the recruitment rate while reducing recruitment expenses.

• What was the reason behind the drop in gross margin during Q1 FY08/21?

  Gross margin was 27.5%, owing to various factors such as training costs following aggressive recruitment, aggressive investment such as training as group companies were established, a poor utilization rate for younger engineers because of the impact of COVID-19, and reflection of the earnings of group companies that were newly consolidated from this fiscal year.