Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy
between this translated document and the Japanese original, the original shall prevail.

May 10, 2023

Consolidated Financial Results
for the Fiscal Year Ended March 31, 2023
(Under IFRS)

Company name: Members Co., Ltd.
Listing:
Tokyo Stock Exchange
Securities code:
2130
URL:
https://www.members.co.jp/
Representative:
Akihiko Takano, Representative Director and President
Inquiries:
Shinya Yonezawa, Executive Officer and General Manager of Business Platform Department
Telephone:+81-3-5144-0660
Scheduled date of annual general meeting of shareholders:June 16, 2023
Scheduled date to commence dividend payments:
June 19, 2023
Scheduled date to file annual securities report:
June 19, 2023
Preparation of supplementary material on financial results:
Yes
Holding of financial results briefing:
Yes (for analysts and institutional investors)(Yen amounts are rounded down to millions, unless otherwise noted.)

1. Consolidated financial results for the fiscal year ended March 31, 2023 (from April 1, 2022 to March 31,
2023)(1) Consolidated operating results (cumulative)
Revenue(Percentages indicate year-on-year changes.)

Operating profit

Profit before tax

ProfitFiscal year ended

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

March 31, 2023

17,662

18.2

1,441

(23.2)

1,399(26.2)

1,010(28.0)March 31, 2022

14,938

23.6

1,876

48.7

1,896

52.0

1,404

56.7

Profit attributable toowners of parent

Total comprehensive
incomeBasic earnings
per share

Diluted earnings
per share

Fiscal year ended

Millions of yen%

Millions of yen

%

Yen

Yen

March 31, 2023

1,010

(28.0)

996(29.0)

76.29

75.90

March 31, 2022

1,404

56.7

1,404

56.4

107.73105.42Return on equity
attributable to owners ofparentRatio of profit before tax
to total assets

Ratio of operating profit
to revenue

%

%

%

Fiscal year ended
March 31, 2023

16.5

12.9

8.2

March 31, 2022

26.7

19.9

12.6

Reference:

Share of profit (loss) of investments accounted for using equity method
For the fiscal year ended March 31, 2023:¥ - million
For the fiscal year ended March 31, 2022:¥ - million

(2) Consolidated financial position
Total assets
As ofEquity attributableto owners of parent

Total equity

Ratio of equity
attributable toowners of parent tototal assets

Equity attributableto owners of parent
per share

Millions of yen

Millions of yen

Millions of yen

March 31, 2023

11,315

6,375

6,375

56.3

%

487.21

Yen

March 31, 2022

10,404

5,895

5,895

56.7

449.08(3) Consolidated cash flows
Cash flows fromoperating activities

Cash flows frominvesting activities

Cash and cash
equivalents at end of
periodCash flows fromfinancing activities

Fiscal year ended

Millions of yen

Millions of yen

Millions of yen

Millions of yen

March 31, 2023

1,398

(1,165)

(980)

4,479

March 31, 2022

1,653

(98)

(468)

5,226

2. Cash dividends
Annual dividends per share
First
SecondThird
quarter-end quarter-end quarter-end
Yen
Fiscal year ended
March 31, 2022
Fiscal year ended
March 31, 2023
Fiscal year ending
March 31, 2024
(Forecast)

Yen

Fiscalyear-end

Yen

Total cash
dividends(Total)

Total

Yen

Ratio ofdividends toequityPayout ratio
attributable to(Consolidated)owners ofparent(Consolidated)

Yen Millions of yen

%

%

-

0.00

-

25.00

25.00

328

23.2

6.2

-

0.00

-

30.00

30.00

392

39.3

6.4

-

0.00

-

31.00

31.00

39.1

3. Consolidated earnings forecast for the fiscal year ending March 31, 2024 (from April 1, 2023 to March(Percentages indicate year-on-year changes.)31, 2024)
Revenue

Operating profit

Profit before tax

Millions of yen%

Millions of yen

First half(cumulative)

9,940

21.0

(160)

-

(165)

-

(169)

-

Full year

21,500

21.7

1,500

4.0

1,480

5.8

1,051

4.0

Profit attributable toowners of parent
Millions of yen

First half(cumulative)(200)

Millions of yen%

Millions of yen

Basic earnings
per share%-%

ProfitYen(15.10)

Full year
1,051
4.0
79.34
1. The above consolidated earnings forecast is based on IFRS.
2. “Basic earnings per share” was calculated based on the average number of shares in FY 3/2023 (13,246,173).

%

* Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in the change
in scope of consolidation): None
Newly included: ―Excluded:―(2) Changes in accounting policies and changes in accounting estimates(i) Changes in accounting policies required by IFRS: None(ii) Changes in accounting policies due to other reasons: None(iii) Changes in accounting estimates: Yes(3) Number of issued shares (ordinary shares)(i)

Total number of issued shares at the end of the period (including treasury shares)
As of March 31, 2023

13,363,700 shares

As of March 31, 2022

13,217,900 shares(ii) Number of treasury shares at the end of the period
As of March 31, 2023

277,518 shares

As of March 31, 2022

90,124 shares(iii) Average number of shares outstanding during the period
Fiscal year ended March 31, 2023

13,246,173 sharesFiscal year ended March 31, 2022

13,037,276 shares* Financial results reports are exempt from the review conducted by certified public accountants or an audit
corporation.
* Proper use of earnings forecasts, and other special matters(Notes regarding the description, etc. related to the future)
The descriptions about the future, such as the business forecast, in this document are based on the information the company has obtainedso far and certain assumptions that are considered reasonable, and our company does not guarantee that the results will be as forecasted.
There is a possibility that actual business performance, etc. will be considerably different from the forecast due to various factors. For
the assumptions for the earnings forecast, notes for the use of the forecast, etc., please refer to “1. Overview of Business Results, (1)Overview of Business Results for the Current Fiscal Year and (4) Future Outlook” on page 2 of the Appendix.
(How to obtain the material for supplementary explanations on financial results and the contents of the session for briefing financial
results)
The material for supplementary explanations on financial results will be uploaded to the website of our company on Wednesday, May
10, 2023.

○Table of contents of the appendix
1.

2.
3.
4.

Overview of Business Results……………………………………………………………………………………………...

2(1) Overview of Business Results for the Current Fiscal Year…………………………………………………….….………
(2) Overview of Financial Standing for the Current Fiscal Year……………………………………………….…….……….

2
3(3) Overview of Status of Cash Flows for the Current Fiscal Year……………………………………………..…….………
(4) Future Outlook……………………………………………………………………………………………..…….………..

3
4(5) Basic Policy for Profit Distribution, and Dividends in the Current Fiscal Year and the Following Fiscal Year.…………
(6) Business Risks………………………………………………………………………………………………….…………

5
5

Situation of Our Corporate Group………………………………………………………………………………………….
Basic Policy on Selection of Accounting Standards…………………………………………………………….…..……..

9
10

Consolidated Financial Statements and Major Notes………………………………………………………………………

11(1) Consolidated Balance Sheets……………………………………………………………………………………………

11(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income…………………………

13(3) Consolidated Statements of Changes in Equity………………………………………………………………………….

15(4) Consolidated Statements of Cash Flows…………………………………………………………………………………

17(5) Notes to Consolidated Financial Statements…………………………………………………………………………….

18(Notes of Going Concern Assumption)………………………………………………………………………………….

18(Changes in Presentation Method) ……………………………………………………..……………………………….

18(Revision to Accounting Estimates) …………………………………………………..……………………………….

18(Segment Information)…………………………………………………………………..………………………………

18(Per Share Information)………………………………………………………………….………………………………

18(Significant Subsequent Events)…………………………………………………………………………………………

19

-1-

1. Overview of Business Results(1) Overview of Business Results for the Current Fiscal Year

Management’s Explanation and Analysis of Business Results
Due to the climate change caused by global warming, severe natural disasters have been occurring frequently all over theworld. In Japan, the Carbon-Neutral policy to virtually eliminate the emission of greenhouse gases such as carbon dioxide,
which are a major cause of global warming, by 2050 was announced. We are expecting businesses, including their marketing
activities, to transform into a model that facilitates decarbonization and resolution of societal issues by accelerating corporatetransformations through the utilization of digital technologies for continuous value creation.

As the digital business becomes more active, each company is having difficulty to recruit and train creative personnel who
are versed on the Internet and digital technology internally, and such personnel shortage is now a huge hurdle to digitalization.
According to the DX (Digital Transformation) White Paper 2023, more than 80% of Japanese companies answered that theylack both the quality and quantity of human resources to promote DX (Incorporated Administrative Agency Informationtechnology Promotion Agency DX White Paper 2023, Issued March 16, 2023).
Under such circumstances, we uphold to create a spiritually rich society through “MEMBERSHIP” as our mission, and aim
to convert our client companies’ management style, marketing activities, services, and products into “Sustainable Ones for the
Earth and Society” through our support to clients’ digital business operation.
<Overview of Consolidated Financial Statements>
For this consolidated fiscal year ended March 2023, revenue was 17,662 million yen (up 18.2% from the same term of theprevious fiscal year), operating profit was 1,441 million yen (down 23.2% from the same term of the previous fiscal year),profit before income taxes was 1,399 million yen (down 26.2% from the same term of the previous fiscal year), and profit
attributable to the owners of the parent was 1,010 million yen (down 28.0% from the same term of the previous fiscal year).
Sales revenue increased by 18.2% year-on-year, and value-added sales (an important indicator calculated by subtracting
outsourcing and purchasing costs from sales revenue, meaning revenue generated by internal resources) increased steadily by
20.9% year-on-year, reaching a record high. On the other hand, the operating rate has dropped due to our proactively expanding
upfront investment on recruiting (the number of digital creators reached 2,012, up by 24% from the end of the previous fiscal
year) in order to attain our target growth rate of 25% in value-added sales. As a result, operating profit decreased year-on-year,
but the operating profit margin remained above 8%. In addition, the improvement policy set on the third quarter of the fiscal
year ended March 2023 is making steady progress. Since we strengthened our sales capabilities by separating production andsales, the number of client companies we offer our unique “result-oriented team” service (*1) increased by 41 from the end of
the previous fiscal year. Centered on specialized in-house companies, revenue from the PGT business maintained a high growthrate of 33.7% year-on-year, and the sales ratio of non-website operations increased by 7.2 percentage points from the end of theprevious fiscal year.
Until the current consolidated fiscal year, we were primarily developing two businesses (EMC business and PGT business)
centered around the digital domain.
<EMC Business Outline>
In the EMC business, we have organized the Engagement Marketing Center (EMC), which consists of teams dedicated tocontinuously improve business results and user engagement for large corporate clients by using digital means. It offers acomprehensive support service from discovering issues and requirement definition from the viewpoint of client companies, tothe development and operation of digital services and products.
In the current consolidated year, the sales revenue of EMC business was 11,212 million yen (IFRS*Reference Value: Up
6.6% year on year). The number of digital creators belonging to the EMC business was 1,079 (up 179 from the end of previous
fiscal year).
<PGT Business Outline>
In the PGT (Product Growth Team) business, we mainly provided services to companies that have high growth potential andare also proactive in digital and IT technology investment, by sending autonomous teams of our digital creators supportingthese clients’ product growth. Our team of digital creators dedicated to our clients worked together with client companies, andthrough the support for the development of digital products, we have supported not only the planning and initialconstruction/implementation of digitalization but also the organizations that enable long-term operation.
In the current consolidated year, the sales revenue of PGT business was 6,894 million yen (IFRS*Reference Value: Up 33.7%
year on year). The number of digital creators belonging to the PGT business was 932 (up 209 from the end of previous fiscal
year).
<Our Corporate Group’s Policies and Initiatives>
Our company integrated the four internal companies: EMC Company, Members Career Company, Members Edge Company,
and Business Platform Company and reorganized them into departments in April 2023, for the purpose of executing ourstrategies for personnel development, sales and services in a more integrated and group-wide manner. Through this integration,
we will accelerate the development of services in non-web operation areas for clients of the former EMC business, and theprovision of results-oriented team service to clients of the former PGT business. We will establish a Digital Growth Team (DGT)
service, which is a hands-on continuous execution and growth support service by a dedicated team composed of digital creatorswith various digital skills, on a groupwide basis. At the same time, we will strive to improve the operating rate and unit priceby fundamentally enhancing specialized skills of our employees through the establishment of a dedicated skill development
department and separating sales and production functions.
Total sales revenue from all specialized in-house companies, which are not subject to this integration, increased by 63.2%,
which is extremely high, and is driving the expansion of non-web operation areas. We will continue to accelerate growth in-2-

non-web operation areas and improve profitability by actively launching specialized companies with high unit prices andrelocating digital creators to those specialized companies.
The impacts of COVID-19 and energy and geopolitical issues on the Japanese economy are still uncertain, but we believethat digital investment by companies will accelerate further, and at the same time, the shortage of IT/digital human resources
will further expand, against the backdrop of further evolution of digital technology, the global effort toward decarbonization,and decline in population in Japan. In such an environment, we will continue to strive to increase the number of high-skilled
digital creators, who are the source of value creation for our customers, and improve employee engagement by actively
recruiting new graduates and mid-career workers and by investing in education and training.
As we continue to work on fulfilling our long-term vision, VISION 2030
(https://www.members.co.jp/ir/pdf/20200508_04.pdf), we will take initiatives with the aim of achieving the important KPIs of
100,000 social creators (*2), the total amount of social engagement (*3) of 10 billion, 10,000 employees, and an operating
profit of 10 billion yen.
(*1) The number of companies we offer our unique “result-oriented team” service: The number of companies we offer our unique “resultoriented team” service is counted if the customer was provided services as a dedicated team of 3 or more digital creators.
(*2) Social Creator: A motivated creator (artisan) with design thinking, who tries to resolve societal issues through the promotion of business,
systemic design, and output.
(*3) Social Engagement: The number of contacts with the contents, products, and services worked on by Members Group as its policy toresolve societal issues.

(2) Overview of Financial Standing for the Current Fiscal Year

The total assets at the end of the consolidated fiscal year ended March 2023 were 11,315 million yen (up 910 million yen fromthe end of the previous consolidated fiscal year). This was primarily due to a decrease of 746 million yen in cash and cash
equivalents, an increase of 966 million yen in other financial assets, an increase of 311 million yen in trade receivables and otherreceivables, and an increase of 204 million yen in rights to use as assets.
Total liabilities stood at 4,939 million yen (up 430 million yen from the end of the previous consolidated fiscal year). This wasprimarily due to a decrease of 165 million yen in income taxes payable, along with an increase of 224 million yen in other current
liabilities, an increase of 137 million yen in allowance, an increase of 133 million yen in trade payables and other payables.
Total equity was 6,375 million yen (up 480 million yen from the end of the previous consolidated fiscal year). This was primarily
due to a decrease of 292 million yen in purchase of treasury shares, and an increase of 678 million yen in retained earnings.

(3) Overview of Status of Cash Flows for the Current Fiscal YearThe cash and cash equivalent (hereinafter referred to as “funds”) at the end of this consolidated term was 4,479 million yen,down 746 million yen from the end of the previous consolidated fiscal year. The status of each cash flow for this consolidated fiscal
year and the factors behind them are as follows.
(Cash Flows from Operating Activities)
The funds acquired during this consolidated fiscal year as a result of operating activities amounted to 1,398 million yen (1,653
million yen in the same period of the previous year). The income was mainly from 1,399 million yen of profit before income taxes,
and 493 million yen of depreciation and amortization, the expenditure was mainly from 581 million yen as income taxes paid, andan increase in trade and other receivables of 275 million yen.
(Cash Flows from Investing Activities)
The funds used during this consolidated fiscal year as a result of investing activities amounted to 1,165 million yen (98 million
yen in the same period of the previous year). The expenditure was mainly from 1,007 million yen in acquisition of investments.
(Cash Flows from Financing Activities)
The funds used during this consolidated fiscal year as a result of financing activities amounted to 980 million yen (468 million
yen in the same period of the previous year). The expenditure was mainly from 456 million yen in repayment of lease liabilities,
326 million yen as dividends paid, and 293 million yen in payments for purchase of treasury shares.
The variations in cash flow-related indicators of our corporate group are as tabulated below.
FY 3/2019

FY 3/2020

FY 3/2021

FY 3/2022

FY 3/2023

Ratio of equity attributable to theowners of the parent company [%]Ratio of market value-based equity
attributable to the owners of theparent company [%]Ratio of interest-bearing liabilities /cash flow [years]

56.1

55.6

53.4

56.7

56.3

364.7

234.4

371.9

404.4

151.8

0.2

0.48

0.21

0.36

0.47

Interest coverage ratio

316.9

250.2

465.7

352.8

173.2

Ratio of equity attributable to the owners of the parent company: Equity attributable to the owners of the parent company / total
assetsRatio of market value-based equity attributable to the owners of the parent company: Market capitalization / total assets
Ratio of interest-bearing liabilities / cash flow: Interest-bearing liabilities / cash flow
Interest coverage ratio: Cash flow / interest paid
Notes
1. Each indicator was calculated from the figures in the consolidated financial statements.

-3-2. Market capitalization was obtained by multiplying the closing price at the end of the term by the number of outstanding
shares as of the end of the term (after deduction of treasury shares).
3. Interest-bearing liabilities mean all of the liabilities posted in the consolidated financial statements for which interest ispaid.
4. Cash flow and interest paid were taken from “Cash flow from operating activities” and “Interest paid” posted in the
consolidated cash flow statement.

(4) Future Outlook

Our corporate group considers that digital investments have progressed rapidly and an organizational reform for establishing services
provided by human resources with advanced skills to use digital technologies and business models is sought from enterprises in stepwith the digitalization of the society and enterprises and the expansion of digital business. In addition, we believe that it is necessary for
all kinds of enterprises to switch to CSV(*) management, which yields profit and resolves societal issues at the same time as part of the
global trend of aiming to solve issues concerning climate change, and as VISION 2030, we aim to “lead the reform toward a sustainable
society by helping solve societal issues, mainly climate change and the decreasing population, with the abilities of creators all overJapan.”
Three years have passed since we set VISION 2030 and the number of digital creators and sales of value added are steadily growing,
up about 77% from the term ended March 2020. On the other hand, the growth of operating profit is comparatively slow, up about 16%,
but this is due to upfront investments for expansion. We shall continue to increase the number of digital creators, focus on the elevationof sales of value added and aim to achieve an operating profit of 10 billion yen in 2030.
In the term ending March 2024, we will abolish the classification into the EMC business and PGT business and our whole corporategroup will newly aim for “the world’s best support for digital business operation with our DGT (Digital Growth Team).” We shall support
digital business operation including domains other than website operation with our results-oriented team model, which offers higher
added value, making use of respective strengths of the former businesses. Our concrete management policies are as follows.
1. Expansion of the results-oriented team model, strengthening of the sales system by separating production and sales: Through the sales
system with production and sales divisions separated, on which the whole group has been working since October 2022, we will builda system for increasing the number of companies to which we provide the results-oriented team model by 200 by the end of the term
ending March 2024 and increasing the number of active digital creators on a quarterly basis by 250 by the fourth quarter, and link it
to future growth.
2. Further expansion of specialized companies, fundamental reinforcement of the development of human resources with specializedskills: While expanding in-house companies specialized in the latest technology domains with high value added, etc. in addition tothe original website operation domain by establishing more than four companies per year, we will increase the number of digitalcreators in specialized companies in domains with high average spending per client to 700 and boost the growth of specializedcompanies by developing the specialized skills of digital creators and reshuffling them. We will keep securing over 2% of sales ofvalue added as funds for investment in education.
3. Optimization of the HR portfolio, expansion of human capital: In order to optimize the HR portfolio of the whole group, we will
strategically expand mid-career recruitment and aim to recruit 248 people per year in the term ending March 2024. While we willcontinue proceeding with the model of recruiting and training new graduates, we will keep down the recruitment of new graduatesfrom 2024 until it is evenly balanced with mid-career recruitment, and create the foundation for the elevation of service-offering
capabilities. The expansion of human capital drives our company’s growth, and as it concretely means increasing the number andoperation rate of digital creators, we will accomplish it by expanding mid-career recruitment.
4. Upgrade of “management involving all staff members”: This means that our employees who relate to our mission proactively andvoluntarily think about what they can do, take action and get involved in management, and we will elevate our capability as anautonomous decentralized cooperative organization, while using the new code of conduct, whose formulation was announced in April
2023. In order to embody this kind of management, we also recommend that our employees hold our company’s shares. Moreover,
we are promoting a project for steadily raising the employees’ compensation as a result of continuous improvement of the added valueof our services, operation rate and average spending per client based on the thorough elevation of the skills of digital creators andaccomplishment of highly productive workstyles and company’s operation.
5. Promotion of CSV management: In the times when digital transformation and green transformation are sought, in order to significantly
contribute enterprises and the society, we shall go on to engage in CSV management more broadly, through decarbonization DX
which supports the elevation of carbon productivity of our client companies, which is the ratio of sales to carbon emissions, andsupport for start-up enterprises established for resolving societal issues.
Based on the above-mentioned policy, for the term ending March 2024, we are forecasting a consolidated sales revenue of 21,500
million yen (up 21.7% year on year), an operating profit of 1,500 million yen (up 4.0% year on year), a profit before income tax of 1,480
million yen (up 5.8% year on year) and a net profit of 1,051 million yen (up 4.0% year on year). Due to the expansion of human capitalthrough upfront investment in new graduates and mid-career recruitment with an eye to the medium to long term, operating rate will
decline as in the current fiscal year, and we expect an operating loss in the cumulative second quarter of the fiscal year ending March
31, 2024. At the same time, we will focus on shifting to a high-growth model during the fiscal year ending March 31, 2024 by strongly
promoting the above policies, aiming for a value-added sales growth rate of over 25% and an operating margin of 10% in the fiscal year
ending March 31, 2025.
(*) CSV (Creating Shared Value): It is a concept proposed by Professor Michael Porter of Harvard University, who is known as a world leader in corporate
competitive strategies, in a paper he submitted to the Harvard Business Review January/February 2011 issue (the Japanese version is Diamond’s-4-

“DIAMOND Harvard Business Review” June 2011 issue). CSV stands for “initiatives to create value for both society and companies by solving social
issues and improving corporate profits and competitiveness at the same time.”(5) Basic Policy for Profit Distribution, and Dividends in the Current Fiscal Year and the Following Fiscal YearAs our corporate group’s basic policy, we maintain internal reserves for new business investments and business expansions for longterm growth of profitability, from our standpoint to adequately return profits to our shareholders and to strive to further improve ourcorporate value, and we properly distribute profits commensurate with the growth of operating results and continuously increase thedividend amount. Our mid-term goal is to achieve a ratio of Consolidated Dividend to Equity Attributable to Owners of the Parent(DOE) of around 5%. In the term ended March 2023, we plan to pay a year-end dividend of 30.00 yen/share (up 5.0 yen/share year on
year from the previous term).
Furthermore, we plan to raise the year-end dividend to 31.00 yen in the term ending March 2024, as a result of the comprehensive
consideration of DOE and payout ratio.

(6) Business Risks

Out of matters concerning the business situation, accounting situation, etc. of our corporate group, mainly the following matters may
possibly have a significant impact on the judgement of investors. In addition, unless otherwise specified, matters related to future in thissection are based on the judgement by our corporate group at the date of the announcement of the financial report and may differ from
actual results as they are subject to uncertainties.

1) Environment surrounding the business of our corporate group
The forte of our corporate group is to provide services with high added value, such as the consulting, planning and project managementof website operation and digital business, and services related to Internet advertising. However, as the barriers for entry into the digitalbusiness field and Internet-related industry are low and the speed of the technology evolution is high, the forte of our corporate group
may disappear due to the emergence of new entrants, technologies and services, and there is a possibility that the core service of ourcorporate group will be downsized, price competition will grow fierce, and so on.
Furthermore, the advertising market tends to be easily influenced by economic trends. While Internet advertising is a growing market
compared to other advertising, the growth rate may slow down due to economic trends. Therefore, the fluctuations in Japan’s economic
climate may influence the business results of our corporate group.
2) Variation in performance due to new businesses, etc.
Our corporate group has proactively operated new businesses, etc., but not all new businesses have achieved results as planned. Our
corporate group plans to proactively keep operating new businesses centered on services in the digital business field in order to avoid
our business contents becoming obsolete, but the new business may not meet the demand of society after they are launched in somecases. It may be difficult to recoup the investment costs in such cases, impacting the business results and financial standing of ourcorporate group.
3) Seasonality of revenue and profit
As the proportion of commissioned tasks for website creation, advertising, etc. is comparatively high in our corporate group, thedeliveries thereof tend to concentrate in September and March, i.e. the end of the second quarter and the end of the accounting period,
leading to larger sales revenues. In addition, as we systematically recruit and train a considerable number of new graduates with theobjective of securing excellent digital creators, SGA (selling, general and administrative) expenses tend to increase at the beginning of
the term. Since the amount of orders grows toward the end of the term in addition to the increase in the operation rate of new employees
fresh out of college owing to the improvement of their skills and productivity, profit tends to increase toward the end of each accounting
period.
The variation in performance in the previous fiscal year and the current fiscal year is as follows.
Previous fiscal year (April 1st, 2021 to March 31st, 2022)
Revenue (thousand yen)(Composition ratio)
Operating profit (thousand yen)(Composition ratio)
Net profit (thousand yen)(Composition ratio)

Cumulative second quarter

Full fiscal year

6,795,096(45.5%)
366,387(19.5%)
259,835(18.5%)

14,938,719(100%)
1,876,325(100%)
1,404,546(100%)

Current fiscal year (April 1st, 2022 to March 31st, 2023)
Revenue (thousand yen)(Composition ratio)
Operating profit (thousand yen)(Composition ratio)
Net profit (thousand yen)(Composition ratio)

Cumulative second quarter
8,213,871(46.5%)
288,534(20.0%)
157,228(15.6%)

Full fiscal year
17,662,288(100%)
1,441,771(100%)
1,010,579(100%)

4) Business practices in the advertising industry
As a business practice in the advertising industry, an advertising company engages in transactions with media companies, etc. under
its own name and responsibility, which is no different in the Internet advertising industry. Therefore, even in case when an advertiser
becomes incapable of paying the advertising fee due to bankruptcy, etc., our corporate group undertakes the duty to pay the advertising-5-fee to the media company, etc., and bears the credit risk of the advertiser. In order to keep such credit risk as low as possible, ourcorporate group usually engages in transactions with quality companies which have a certain level of credibility, but such risks remain.
In addition, as a business practice of the advertising industry, it can be said that contracts and other written documents are rarely
exchanged in regard to contracts pertaining to advertising transactions including Internet advertising. This is because of the highnecessity to swiftly and flexibly conclude and change the contract based on the trust relationship between transaction parties, while there
is a risk that discrepancies in the agreements between the transaction parties occur and develop into trouble. Our corporate group ismaking efforts to leave the contract contents in writing such as requesting the submission of an order form from our customers when an
advertising transaction arises in order to avoid such risk as much as possible, but there are cases where the customer does not comply
with the submission request. Therefore, trouble may occur in regard to the conclusion or contents of contracts pertaining to advertisingtransactions which have not been put into writing and impact the business results of our corporate group.
5) Utilization of outsourcing
Our corporate group selects specific partner companies in each specialized field and provides services to customers in cooperation
with the partner companies. In such case, if an unexpected situation occurs to the partner company or the cost of ordering from thepartner company rises due to the stringency of the market, it may influence the business and business results of our corporate group.
In addition, our corporate group takes care in selecting partner companies by taking into account their performance, reputation in theindustry, previous trade relations with our corporate group, etc., and on top of that strictly monitors the business operations of eachpartner company, inspects the deliverables and evaluates the quality level thereof even after the selection of partner companies. However,it cannot be said that there is no possibility of a concealed defect existing in the deliverables provided by a partner company, and in casedamage is inflicted on a customer of our corporate group due to such defect, the business results of our corporate group may be impacted
by claims for damages and other liability claims made against our corporate group or the fall of our corporate group’s social credibility.
6) System trouble
Our corporate group’s business is dependent on computer systems, and as we conduct some business transactions with customer
companies through Internet connections, we set up almost all of our servers in the data centers and take measures focusing on system
protection and system security when we select office properties. However, when our computer systems shut down or Internet connections
become unavailable due to unexpected system failure, natural disasters, cyberattacks, or terrorism, there is a risk that our corporategroup’s business will be interrupted. If such risk is materialized, our corporate group’s business performance may be impacted byopportunity loss, refunds, payment of damages, loss of social credibility, etc.
7) Data security and personal data protection
Our corporate group considers that appropriately protecting our customers’ confidential information and personal data by preventing
risks of system failure, information outflow, leakage, and falsification arising from system defects, computer viruses, unauthorizedaccess, etc., as well as ensuring data security, form the foundation on which our customers build their confidence in us, and that it is our
top management priority. As such, our corporate group obtained Privacy Mark and Information Security Management System“ISO/IEC27001 (JISQ27001)” qualified and granted by the Japan Information Economy and Society Promotion Association, andestablishes and operates our data security system by consistently conducting proper data management based on these management
methods. Nevertheless, even though we have been taking such measures, no data security system can ever be perfect, and if these issues
arise due to some sort of cause, there may be room for outflow, falsification, and unauthorized usage of our customers’ confidential
information and personal data to occur. In such cases, there is a risk that our corporate group’s business performance will be impacted
by damage claims and liabilities against us, or loss of social credibility of our corporate group, etc.
8) Statutory regulations
i. Regulations pertaining to internet advertising
At present, there are no statutory regulations or voluntary regulations in the Internet advertising industry that can be a direct detrimentto our corporate group’s business. However, while Internet transactions have become prevalent, there is a possibility that regulations
pertaining to Internet advertising business or voluntary regulations in the Internet advertising industry will be tightened if the social
situation changes drastically, due to frequent occurrence of crimes exploiting Internet advertising. At this point, it is difficult to predictthe details of regulations that may be tightened, however, depending on the contents, it could significantly affect our corporate group’sbusiness operation.
Further, there are some laws that regulate advertisers, such as the Act against Unjustifiable Premiums and Misleading Representations
and the Act on Specified Commercial Transactions. Even though advertisers’ violation of such laws will not make advertisingtransactions by an advertising agency unlawful instantly, behavior of our corporate group as an advertising agency can be subject todamage claims for facilitating unlawful behavior, or there is a risk that it will diminish our corporate group’s social credibility. As ourbasic policy, our corporate group makes advertising transactions only with advertisers with a certain degree of credibility and we shallnot make advertising transactions pertaining to adult entertainment business, and we take preventive measures not to get involved in
posting illegal advertisements, however, it does not completely eliminate room for the above-mentioned risk to rise up to the surface.
Moreover, as mentioned above, our corporate group co-operates with outside vendors for providing services, but in the case where
we select small business owners as our subcontractors, if we abuse its dominant bargaining position and delay payments or the like,there is a risk that the Fair Trade Commission will deem our action as a violation of the Act against Delay in Payment of Subcontract
Proceeds, etc., and recommend us to rectify or demand restitution from us. Our corporate group has never allowed such risk to materialize,
and we have been managing contracts to prevent any risks from materializing, however, it cannot be stated that absolutely no such risk
exists.
ii. Regulations pertaining to worker dispatching services
The worker dispatching service our corporate group provides in PGT business has been licensed by the Minister of Health Labor as
General Worker Dispatching Business based on “Act for Securing the Proper Operation of Worker Dispatching Undertakings andImproved Working Conditions for Dispatched Workers (Worker Dispatch Law)” to provide such service.

-6-

To ensure a proper operation of worker dispatching business, the Worker Dispatch Law stipulates that the Minister of Health Labor
may revoke a business license or order the suspension of business operations, if a corporate group is disqualified as a general worker
dispatching business owner (Worker Dispatch Law Article 6) and becomes subject to the Revocation of License (Article 14).
As far as we are currently aware, there is no fact on our end that is subject to such disqualification or revocation as specified by theselaws. However, in the future, if revocation of our license, etc. occurs for some reason, our corporate group’s service operation may beinterrupted in a great deal, and our performance and financial conditions may get impacted significantly.
9) Intellectual property
Our corporate group runs business such as system development and website production so that we do not infringe third party’s
intellectual property such as copyright and patents, however, it is impossible to conduct rigorous research on all of such developments
and productions to identify if there is any copyright infringement, and there is no guarantee that such developments and productions are
not infringing on the intellectual property rights. By any chance, if our corporate group infringe third party’s intellectual property rights,
our corporate group’s business performance may be impacted by injunction claims against the use of such developments and productions,
damage compensation claims, and claims for payment of license charges, etc.
10) New accounting systems and changes in the taxation system
Our corporate group calculates its taxes in accordance with the accounting system and the taxation system of our country, and files
our taxes appropriately.
Nonetheless, there is a possibility that our business performance and financial conditions will be impacted by unexpected additions
and changes to the accounting standards and the taxation system. Moreover, our corporate group may incur more tax burden than
anticipated as a consequence of changes made to the taxation system or a divergence in opinions with Tax Authority on the tax return.
11) Risk of goodwill impairment losses
Our corporate group also carries out M&A for acceleration of business growth if necessary. As a result, we hold goodwill.
Regarding goodwill, we perform impairment tests at least once a year or more frequently whenever a sign of impairment is recognized.
In the event this impairment test determines that these assets no longer generate enough cash flow, a need to recognize an impairment
emerges. When a large amount of impairment loss is recognized, our financial conditions as well as our business performance may be
impacted in a great deal.
12) Securing, training and labor management for human resources
In order for our corporate group to continue to provide high value-added services and keep expanding in the digital business area aswell as in the Internet industry where the barrier of entry is low and technology advances rapidly, securing human resources withadvanced specialized knowledge and abilities and developing them are the highest priority. However, because the digital business area
and the Internet industry are relatively new and fast-growing, the variety of human resources is limited, and recruiting talented personnel
has been challenging due to increasing demand for engineers, mainly in the digital business area.
Our corporate group reinforced its policy to recruit and educate college graduates, on top of any other measures such as recruitmentof excellent mid-career talents and reduction of the turnover rate of existing employees; and additionally, we have been strengthening
our recruitment efforts in regional centers including Sendai and the global recruitment. On the other hand, when we face challenges insecuring human resources due to Japan’s dwindling population and further acceleration in the declining birthrate and aging population,
as well as delays in securing mid-career recruitment and training of college graduates to become the substantial part of workforce
compared to the speed of business expansion, or when the turnover rate of recruited and trained employees is high, our corporate group’sbusiness performance may be affected.
Also, our corporate group has established our internal control system and training system appropriately through the setting andapplication of regulations, etc. We develop and operate our internal control system thoroughly according to the business circumstances,
and are committed to preventing unlawful actions and adhering to compliance, by establishing a Risk Management and Compliance
Committee, etc. However, regardless of defects of our corporate group, its executives and employees, unexpected trouble may arise
among executives and employees, which may affect our corporate group’s business performance.
13) Dividend policy
As our corporate group’s basic policy, we maintain internal reserves for new business investments and business expansions for longterm growth of profitability, from our standpoint to adequately return profits to our shareholders and to strive to further improve ourcorporate value, and we properly distribute profits commensurate with the growth of operating results and continuously increase thedividend amount. Our mid-term goal is to achieve a ratio of Consolidated Dividend to Equity Attributable to Owners of the Parent (DOE)of around 5%. However, depending on our business performance and financial conditions in the future, we may face challenges in
returning profits to our shareholders by dividends, etc.
14) Share acquisition rights
Our corporate group issues share acquisition rights to motivate our executives and employees to improve our long-term corporate
value. Upon exercise of currently issued share acquisition rights or share acquisition rights to be issued in the future, the total numberof outstanding shares will increase, which may dilute the share value per share, and such dilution of share value may impact share price.
15) Natural disaster, etc.
As mentioned above, our corporate group implements measures against disasters and accidents when installing our servers in a data
center and selecting an office. We have improved our systems for telework and working from home and formulated a business continuity
plan (BCP), in order to minimize the impacts of the pandemics of contagious and infectious diseases, large-scale disasters, such as
earthquakes and floods, crimes, such as terrorism, the malfunction of information systems, etc., which would hinder our business
operations.
However, if an unexpected natural disaster or the like happens, it may cause a huge loss to our office, equipment, and personnel,
leading to the temporary or mid/long-term suspension of all or part of our business, affecting the business results of our corporate group.

-7-In addition, if electric power supply becomes insufficient due to a power outage, power restriction, a planned power outage, or the
like in the wake of disaster, our corporate group’s business activities and services may be suspended, significantly affecting the businessresults, etc. of our corporate group.
Even in the case where our corporate group is not directly affected by a natural disaster or the like, it may lead to the slowdown of the
global economy, affect our customers or affiliates, decrease consumer spending, and enterprises’ voluntary restraint of advertisement,
resulting in the curtailment of costs for advertisement, sales promotion, etc. and then affecting the business results of our corporate group.
16) Risks related to climate change
Our corporate group has declared that we would focus on “environmental changes due to global warming and climate change,” which
are social issues induced by conventional marketing activities, and tackle these social issues. In addition, our corporate group agreed
with the final recommendation of “Task Force on Climate-related Financial Disclosures (TCFD)” and joined the TCFD consortium in
April 2021. Following the recommendation of TCFD, we analyze scenarios for identifying business risks and opportunities attributable
to climate change, and strive to grasp, analyze, and manage risks further and disclose appropriate information on them.
As a result of qualitative evaluation based on scenario analysis, we identified the following risks that could degrade our corporategroup’s business execution, financial status, and performance moderately or seriously.
<Risk of new regulations> Augmentation of costs for dealing with them by strengthening energy-saving measures, etc.
<Market risk> (1) Uncertainty of procurement of electric power, (2) Skyrocketing prices of environmental value certificates for electric
power; Augmentation of costs for procuring electric power and certificates<Physical risk of emergency> Increase of business operations and costs due to the rise in the seriousness and frequency of abnormal
weather, such as typhoons and floods<Chronic physical risk> Impact of the augmentation of costs for air-conditioning, etc. due to the increase of scorching hot days and thetight power supply, and the rise in sea level<Other risks> Impact of economic recession caused by competition for water, food, and energy resources, geopolitical conflicts, etc.
Our corporate group grasps and grades risks as mentioned above, discloses more information, and takes measures against risks, but if
national policies, laws, and regulations regarding climate change, etc. are tightened further than expected or climate change progresses
further than assumed, it may further affect the financial standing and business performance of our corporate group.
17) Risks related to large-scale projects
Our corporate group sometimes undertakes a project for large-scale system development or the like through transactions withcustomers, so we recognize that it is indispensable to acquire and improve project management skills for dealing with large-scale projects.
However, the number of project managers engaging in large-scale projects is insufficient in the entire market, actual costs may deviate
from the initial estimates due to the differences in recognition of man-hours and specifications, increasing additional costs, unexpectedtrouble may occur, and specifications may be changed. Such various factors may lead to the change of delivery time, affect sales andprofit more seriously than small/medium-scale projects, require manpower and induce the loss of opportunities. As a result, they may
affect the financial standing and business performance of our corporate group.
To cope with these kinds of risks, our corporate group has multiple audit systems for the stage of estimating prices before receiving
orders, checks man-hours, etc. at a specialized audit division, shift to agile development, refrain from receiving orders for projects thathave a long delivery schedule and choose projects with a short delivery schedule, to enhance the check system.
In addition, when undertaking a project of a certain scale that would probably affect our business performance and financial standing,our group management council monitors it, to reduce risk.

-8-

2. Situation of Our Corporate GroupThe core business of our corporate group, which is composed of 14 departments, 15 in-house companies, and 1 consolidated
subsidiary (as of May 10, 2023), is the support for Internet business. Our company integrated the four internal companies: EMC
Company, Members Career Company, Members Edge Company, and Business Platform Company and introduce the department
system in April 2023. Thus, we consolidated former EMC company, Members Career Company, and Members Edge Company to
Account Service Departments (Reference: Organization chart below). We will accelerate the growth of our corporate group by
Sales & Marketing Department pursuing the sales strategy and Service & Skill Development Department pursuing the strategies ofservice development and human resource development for the whole group.
<Internet business support business>
In the digital business developed by companies, we provide services that create results and support the growth of companies'
digital businesses by supporting operations in teams in the digital marketing area as well as in the digital product developmentarea. In particular, in the area of digital product development and growth support, we have established a specialized company
and are developing services centered on non-website operation areas such as data analysis and platform introduction support.
Until the current consolidated fiscal year, we disclosed separately the EMC business and the PGT business. However,specialized skills demanded by our clients diversified and services combining two businesses increased. As a result, it has become
difficult to disclose information separately for each business. In the future, regardless of the digital domain we provide, three ormore digital creators will pursue business results for client companies as a team selected by client companies to provide world's
best operational support for digital business.
・Other business
We operate the business of generating power from renewable energy.
(Note)The number of business segments of our corporate group is only one, that is, the Internet business support business. Accordingly,
we do not omit the section for performance in each business segment.

-9-

The positioning related to business of our corporate group is as follows.

Members Co., Ltd.
Shareholder's Meeting
Audit and Supervisory
Committee
Board of Directors

Representative
Director and Chairman
Group Management Meeting

Representative
Director and President

Specialized in-house companies

Members EnergyCo., Ltd.

Sales & Marketing
Dept.

Members Medical
Marketing Company

Popinsight Company

Account Service Dept.
No.1 - 8

Members Data

Members UX One

Adventure Company

Company

Members Roots

Members EC Grow

Company

Company

Account Service
Promoting Dept.

Service & Skill
Development Dept.

Members Good
Communications
Company

Members DX Compass
Company

People & Culture Dept.
SaaS Plus Company

DevOps Lead Company

Members AI Reach

Members XR Booster

Company

Company

Quality Approach

Decarbonization DX

Company

Company

Business Platform
Dept.

CSV Dept.

Business E Company(as of May 10, 2023)

3. Basic Policy on Selection of Accounting Standards
Our company has been using IFRS since the term ended March 2018, for the purpose of improving international comparabilityof our financial information in the capital market.

- 10 -

4.

Consolidated Financial Statements and Major Notes(1)

Consolidated Balance Sheets

AssetsCurrent assets
Cash and cash equivalents
Trade receivables and other receivables
Inventory assets
Other current assets
Total currents assets

Previous consolidated
accounting year
(Mar. 31, 2022)

Non-current assets
Tangible fixed assets
Rights to use as assets
Goodwill
Intangible assets
Other financial assets
Deferred tax assets
Total non-current assets
Total assets- 11 -[unit: thousand yen]
Current consolidated
accounting year
(Mar. 31, 2023)

5,226,706
3,075,859
48,632
224,3038,575,502

4,479,967
3,387,822
68,547234,3118,170,648

237,803
713,578
116,115
12,425
373,657
375,346
1,828,927
10,404,429

349,032
918,446
116,1159,897
1,340,550
410,580
3,144,623
11,315,271

Liabilities and shareholders’ equity
Liabilities
Current liabilities
Lease liabilities
Trade payables and other payables
Income taxes payable
Contract liabilities
Other current liabilities
Total current liabilities

Previous consolidated
accounting year
(Mar. 31, 2022)

Non-current liabilities
Lease liabilities
Allowance
Total non-current liabilities
Total liabilities
Shareholders’ equity
Capital stock
Capital surplus
Treasury shares
Other components of equity
Retained earnings
Total equity attributable to owners of the parent
Total shareholders’ equity
Total liabilities and equity- 12 -[unit: thousand yen]
Current consolidated
accounting year
(Mar. 31, 2023)

400,434
1,068,471
370,219
30,2002,326,547
4,195,872

360,860
1,201,535
204,338
66,7372,551,526
4,384,998

197,817
115,362
313,180
4,509,052

301,917
252,658554,576
4,939,574

963,358
281,704(8,477)52,1904,606,602
5,895,377
5,895,377
10,404,429

1,017,504
342,670(300,140)
30,8455,284,816
6,375,696
6,375,696
11,315,271

(2)Consolidated Statements of Income and Consolidated Statements of Comprehensive Income(Consolidated Statements of Income)[unit: thousand yen]
FY2022(Apr. 1, 2021 to Mar. 31, 2022)

FY2023(Apr. 1, 2022 to Mar. 31, 2023)

Revenue
Cost of sales
Gross profit
Selling, general and administrative expenses
Other income
Other expenses
Operating profit (loss)
Finance income
Finance costs
Profit (loss) before income taxes
Income taxes
Profit (loss) for the period

14,938,719
10,182,290
4,756,429
2,901,342
27,063
5,825
1,876,325
26,9436,539
1,896,729
492,182
1,404,546

17,662,288
12,461,182
5,201,106
3,758,851
13,633
14,117
1,441,771
217
42,536
1,399,452
388,872
1,010,579

Profit (loss) attributable to
Owners of parent
Net profit (loss)

1,404,546
1,404,546

1,010,579
1,010,579

107.73105.42

76.29
75.90

Earnings per share
Basic earnings (loss) per share (yen)Diluted earnings (loss) per share (yen)- 13 -

(Consolidated Statements of Comprehensive Income)[unit: thousand yen]
FY2022(Apr. 1, 2021 to Mar. 31, 2022)

Profit (loss) for the period
Other comprehensive income
Items that will not be reclassified to profit or loss
Financial assets measured at fair value through othercomprehensive income
Total of items that will not be reclassified to profit orloss
Total comprehensive income
Comprehensive income
Comprehensive income attributable to
Owners of parent
Comprehensive income- 14 -FY2023(Apr. 1, 2022 to Mar. 31, 2023)

1,404,546

1,010,579－(13,700)－(13,700)－
1,404,546(13,700)
996,879

1,404,546
1,404,546

996,879
996,879

(3)Consolidated Statements of Changes in Equity

Previous consolidated fiscal year (Apr. 1, 2021 to Mar. 31, 2022)
Equity attributable to owners of parent
Capitalstock

Balance on April 1, 2021

CapitalsurplusTreasurysharesOther
componentsof equity

Retainedearnings

Total

Total
equity910,405

228,752(8,240)55,622

3,427,635

4,614,175

4,614,175

Profit for the period

－

－

－

－

1,404,546

1,404,546

1,404,546

Other comprehensive income

－

－

－

－

－

－

－

－

－

－

－

1,404,546

1,404,546

1,404,546

Exercise of share acquisition rights

52,952

52,952－(12,948)－

92,956

92,956

Issuance of share acquisition rights

－

－

－

9,516

－

9,516

9,516

Purchase of treasury shares

－

－

(236)

－

－

(236)

(236)

Dividends

－

－

－

－

(225,579)(225,579)(225,579)

Total transactions with owners

52,952

52,952(236)(3,432)(225,579)(123,344)(123,344)

Balance on March 31, 2022

963,358

281,704(8,477)52,1904,606,602

5,895,377

5,895,377

Total comprehensive income- 15 -

Current consolidated fiscal year (Apr. 1, 2022 to Mar. 31, 2023)[unit: thousand yen]
Equity attributable to owners of parent
Capitalstock
Balance on April 1, 2022

Capitalsurplus

Other
components ofequityTreasurysharesRetainedearnings

Total

Total
Equity963,358

281,704(8,477)52,1904,606,602

5,895,377

5,895,377

Profit for the period

－

－

－

－

1,010,579

1,010,579

1,010,579

Other comprehensive income

－

－

－

(13,700)－(13,700)(13,700)－－－(13,700)

1,010,579

996,879

996,879

54,14654,146(11,815)－

96,47896,478Purchase of treasury shares－－(292,865)－－(292,865)(292,865)

Disposal of treasury shares

－

6,818

1,203

－

－

8,022

8,022

Expiration of share acquisition rights

－

－

－

(9,529)

9,529

－

－

Dividends

－

－

－

－

(328,194)(328,194)(328,194)

Transfer to retained earnings

－

－

－

13,700(13,700)－－

Total transactions with owners

54,14660,965(291,662)(7,643)(332,365)(516,559)(516,559)

Balance on March 31, 2023

1,017,504

342,670(300,140)

30,8455,284,816

6,375,696

6,375,696

Total comprehensive income
Exercise of share acquisition rights- 16 -

(4)Consolidated Statements of Cash Flows[unit: thousand yen]
FY2022(Apr. 1, 2021 to Mar. 31, 2022)

Cash flows from operating activities
Profit before income taxes
Depreciation and amortization
Finance income
Finance costs(Increase) decrease in inventories(Increase) decrease in trade and other receivables
Increase (decrease) in trade and other payables
Other
SubtotalInterest and dividends received
Proceeds from subsidy income
Proceeds from insurance income
Interest paid
Income taxes paid
Income taxes refund
Cash flows from operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Purchase of intangible assets
Expenditure on acquisition of investments
Proceeds from sales of investments
Payments for leasehold deposits and guarantee deposits
Proceeds from collection of leasehold deposits andguarantee deposits
Cash flows from investing activities
Cash flows from financing activities
Repayments of lease liabilities
Proceeds from issuance of share acquisition rights
Proceeds from exercise of share acquisition rights
Payments for purchase of treasury shares
Dividends paid
Cash flows from financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period- 17 -FY2023(Apr. 1, 2022 to Mar. 31, 2023)

1,896,729
366,653(26,943)
5,771(16,829)(437,538)
87,302
283,167
2,158,312
5,425
1,508
6,000
(4,687)(578,884)
65,9401,653,616

1,399,452
493,556(217)
40,845(19,915)(275,429)
126,686
201,687
1,966,665
13,961
1,383
6,000(8,073)(581,197)
4
1,398,742(8,302)(5,277)－－(87,466)(137,151)(2,904)(1,007,630)
18,964(50,010)

2,236

13,540(98,810)(1,165,191)(345,470)
9,516
92,956(236)(225,711)(468,947)
1,085,858
4,140,847
5,226,706(456,247)－
96,478(293,779)(326,741)(980,289)(746,739)
5,226,706
4,479,967

(5) Notes to Consolidated Financial Statements(Notes of Going Concern Assumption)
There is no related information.
(Changes in Presentation Method)
There is no related information.
(Revision to Accounting Estimates)
In this consolidated fiscal year, regarding the asset retirement obligation, recorded as the restoration cost associated with thereal estate lease contracts, we have changed the restoration cost estimate because of new information due to the expansion of thehead office and Sendai Office. 6,196 thousand yen was added to the balance of asset retirement obligations due to the change inthe restoration cost estimate, and it was recorded as an allowance.
The effect of this change on the financial statements for this consolidated current year is minor.
(Segment Information)
The number of business segments of our corporate group is only one, that is, the Internet business support business. Accordingly,
we omit the section for performance in each business segment.
(Per Share Information)
Basic earnings per share, diluted earnings per share, and items for calculating them are as follows.
Consolidated fiscal year 2022
(From Apr. 1, 2021 to Mar. 31,
2022)

Consolidated fiscal year 2023
(From Apr. 1, 2022 to Mar. 31,
2023)

1,404,546

1,010,579

Net income attributable to the owners of the parent company[thousand yen]
Profit adjustment [thousand yen]－

Net income used for calculating diluted earnings per share[thousand yen]

1,404,546

1,010,579

Weighted average number of outstanding common shares

13,037,276

13,246,173

285,752

67,786

13,323,028

13,313,959

Basic earnings per share [yen]107.7376.29

Diluted earnings per share [yen]105.42

75.90

Increase of common shares
Increase from the exercise of share acquisition rights
Weighted average number of diluted common shares

Issuable shares not included in the calculation because they do The 18th share acquisition rightnot have the dilutive effect(146,400 shares)- 18 -

The 18th share acquisition right(146,400 shares)

(Significant Subsequent Events)(Issuance of performance-linked share acquisition rights)
At a meeting of the Board of Directors held on March 23, 2023, we resolved to issue share acquisition rights ("Share Acquisition
Rights") to our directors (excluding outside directors), executive officers and employees pursuant to Articles 236, 238 and 240 of
the Companies Act.
In consideration of the impact on share dilution, treasury shares will be allocated for the Share Acquisition Rights. However, if
there is a shortage of treasury shares to be allocated to the share acquisition rights, our company may acquire treasury shares or issue
new shares, according to the situation.
I. Purpose and Reason for Offering Share Acquisition Rights
Our company intends to issue share acquisition rights to our directors (excluding outside directors), executive officers, andemployees for a fee in order to raise their motivation and morale and to further increase their commitment to the expansion of ourcompany's business performance as we aim to further increase our corporate value over the medium to long term. These rights set a
performance determination level that allows the holder to exercise 100% of the rights if the audited consolidated income statementof the company for any of the business years ending in March 2024, 2025, 2026, 2027, or 2028 achieves an operating profit of 4,000
million yen.
Ⅱ. Terms and Conditions of Issuance of Share Acquisition Rights
1. Number of share acquisition rights
19,595
2. The issue price per share acquisition right shall be 10 yen (1 yen per share).
3. Details of the Share Acquisition Rights(1) Class and number of shares to be issued upon exercise of the share acquisition rights
Common share: 195,950 shares
The number of shares to be issued upon exercise of one (1) share acquisition right (hereinafter referred to as the "Numberof Granted Shares") shall be ten (10) shares of common share of our company.
(2) Value or calculation method of assets to be contributed upon exercise of share acquisition rights
The value of the assets to be contributed upon exercise of the Share Acquisition Rights shall be the amount to be paid inper share that can be delivered upon exercise of the Share Acquisition Rights (the "Exercise Price") multiplied by the numberof shares granted.
The Exercise Price shall be 1,310 yen, which is the closing price of our company's share on the Tokyo Stock Exchange on
the day before the Board of Directors' resolution regarding the issuance of these equity warrants.
(3) Period during which share acquisition rights may be exercised
The period during which the share acquisition rights may be exercised (the "Exercise Period") shall be from July 1, 2024
to June 30, 2029 (or, if June 30, 2029 is not a business day for banks, the business day immediately preceding it shall be thelast day of the exercise period).
(4) Matters concerning the increase in capital and capital reserve(i) The amount of capital to be increased in the event of the issuance of shares upon exercise of the SARs shall be half of the
maximum amount of increase in capital, etc., as calculated in accordance with Article 17, Paragraph 1 of the Corporate
Calculation Regulations. In case the calculation results in a fraction of less than 1 yen, it shall be rounded up.
(ii) The amount of capital reserve to be increased in the event of the issuance of shares upon the exercise of the share acquisitionrights shall be the amount obtained by subtracting the amount of capital to be increased as set forth in (i) above from the
maximum amount of increase in capital, etc. as set forth in (i) above.
(5) Restrictions on the acquisition of new share acquisition rights through transfer
The acquisition of new share acquisition rights through transfer shall require approval by resolution of the board of
directors.
(6) Conditions for the exercise of share acquisition rights(i) Each holder of the new share acquisition rights may exercise the rights during the exercise period (from the first day of themonth following the date of submission of the annual securities report for the achievement period to the last day of exercise
period) up to the number of new share acquisition rights allocated to him/her, subject to the limit of the number of new shares
set for each right and the percentage of the rights specified in advance, provided that the audited consolidated income statement(or income statement, if consolidated financial statements are not prepared) of our company included in the annual securities
report submitted by our company for the fiscal year ending in March 2024, 2025, 2026, 2027, or 2028 shows an operating
profit of 4,000 million yen or more. In case the number of new share acquisition rights that can be exercised results in a fractionof less than one unit, it shall be rounded down.
(ii) The exercise of the Share Acquisition Rights by the heirs of the holders of the Share Acquisition Rights shall not be permitted.
(iii) The exercise of the new share acquisition rights shall not be permitted if it would result in the total number of issued sharesof our company exceeding the authorized number of shares at the time of exercise.
(iv) Exercise of less than one new share acquisition right shall not be permitted.
4. Date of allocation of new share acquisition rights:
April 28, 2023.
5. Matters Concerning Acquisition of Share Acquisition Rights(i) In the event that a merger agreement in which our company becomes a dissolving company, a company split agreement or planin which our company becomes a splitting company, or a share exchange agreement or share transfer plan in which our company
becomes a wholly owned subsidiary are approved at a general meeting of shareholders (or resolved by the Board of Directors if
approval at a general meeting of shareholders is not required), our company may acquire all of the Share Acquisition Rights free

- 19 -

of charge on a date separately determined by our company's Board of Directors.
(ii) If a new share acquisition right becomes un-exercisable in accordance with the provisions of 3. (6) above before the new shareacquisition rights holder exercises the right, our company may acquire the new share acquisition right free of charge.
6. Rounding down of fractions resulting from the exercise of new share acquisition rights:
If there is a fraction of less than one share in the number of shares to be allocated to the holder of new share acquisition rights, it
shall be rounded down.
7. Number of persons and number of new share acquisition rights allocated:
Two Directors, 23 Executive Officers, and 1,410 employees of our company,
Total: 1,435 people 19,595 share acquisition rights (195,950 shares)- 20 -