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.

February 2, 2024

Consolidated Financial Results
for the First Nine Months of Fiscal Year Ending March 31, 2024
(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 to file quarterly securities report:
February 8, 2024
Scheduled date to commence dividend payments:―
Preparation of supplementary material on quarterly financial results: Yes
Holding of quarterly financial results briefing:
No(Yen amounts are rounded down to millions, unless otherwise noted.)

1. Consolidated financial results for the first nine months of fiscal year ending March 31, 2024 (from April
1, 2023 to December 31, 2023)(1) Consolidated operating results (cumulative)
Revenue
Nine months ended(Percentages indicate year-on-year changes.)

Operating profit

Millions of yen%

Millions of yen

December 31, 2023

14,584

15.7

December 31, 2022

12,61019.1

Profit attributable toowners of parent
Nine months ended
December 31, 2023

Millions of yen%

Millions of yen

(569)

―

607

(38.8)

Total comprehensive
income%(382)

Profit before tax―

Millions of yen(381)

Profit%Millions of yen

(533)

―

(382)

―

558

(43.6)

378(44.8)

Basic earnings
per share%―%

Diluted earnings
per share
Yen

Yen(29.13)(29.13)

December 31, 2022
378
(44.8)
378(44.8)
28.57
28.36
Note: Due to the application of IAS 12 “Income Taxes” (amended in May 2021), results for the first nine-month period of the fiscal year
ended March 31, 2023, have been retrospectively restated.

(2) Consolidated financial position
Total assets
As ofDecember 31, 2023

Equity attributable toowners of parent

Total equity

Millions of yen

Millions of yen

Millions of yen

10,613

5,542

5,542

Ratio of equity
attributable to owners ofparent to total assets%

52.2

March 31, 2023
11,305
6,366
6,366
56.3
Note: Due to the application of IAS 12 “Income Taxes” (amended in May 2021), figures as of March 31, 2023, have been retrospectively
restated.

2. Cash dividends
Annual dividends per shareFirst quarter-end
Fiscal year ended
March 31, 2023
Fiscal year ending
March 31, 2024

Second quarter-end

Third quarter-end

Yen

Yen

Yen

―

0.00

―

―

0.00

―

Fiscal year-end

Fiscal year ending
March 31, 2024
(Forecast)

Total

Yen

Yen

30.00

30.00

31.00

31.00

Note: Revisions to the forecast of cash dividends most recently announced: None

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
Full year

Operating profit

ProfitMillions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

20,00013.2

200(86.1)

190(86.4)

130(87.1)

Profit attributable toowners of parent
Full year

Profit before tax

Basic earnings
per share

Millions of yen%

130(87.1)

Yen

9.81(Note) Changes from the latest financial forecast: None
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).
3. Due to the application of IAS 12 “Income Taxes” (amended in May 2021), the percentage of change from the same period of theprevious year has been calculated using retrospectively restated figures.

* 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: Yes(ii) Changes in accounting policies due to other reasons: None(iii) Changes in accounting estimates: Yes
Note: Please refer to “2. Summary of Consolidated Financial Statements and Major Notes (6) Notes to Summary of Consolidated
Financial Statements (Changes in Accounting Policies), and (Changes in accounting estimates) on page 11 for details.

(3) Number of issued shares (ordinary shares)(i)

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

13,421,700 shares

As of March 31, 2023

13,363,700 shares(ii) Number of treasury shares at the end of the period
As of December 31, 2023

395,596 shares

As of March 31, 2023

277,518 shares(iii) Average number of shares outstanding during the period (cumulative from the beginning of the fiscal
year)
Nine months ended December 31, 2023

13,115,024 shares

Nine months ended December 31, 2022

13,262,025 shares* Quarterly financial results reports are exempt from quarterly review conducted by certified public accountants oran 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, Qualitative Information Regarding the
Financial Results for the Current Quarter, (3) Explanation Regarding the Future Forecast Information such as Consolidated Earnings
Forecast” on page 4 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 English material for supplementary explanations on financial results will be uploaded to the website of our company on Friday,
February 9, 2024.

○Table of contents of the appendix
1. Qualitative Information Regarding the Financial Results for the Current Quarter…………………………………………..

2(1) Explanation Regarding Business Results…………………………………………………………………………………

2(2) Explanation Regarding the Financial Standing……………………………………………………………………………

4(3) Explanation Regarding the Future Forecast Information such as Consolidated Earnings Forecast………………………

4

2. Summary of Consolidated Financial Statements and Major Notes………………………………………………………….

5(1) Summary of Quarterly Consolidated Balance Sheets…………………………………………………………………….

5(2) Summary of Quarterly Consolidated Statements of Income………………………………………………………………

7(3) Summary of Quarterly Consolidated Statements of Comprehensive Income……………………………………………

8(4) Summary of Quarterly Consolidated Statements of Changes in Equity…………………………………………………

9(5) Summary of Quarterly Consolidated Statements of Cash Flows…………………………………………………………

10(6) Notes to Summary of Consolidated Financial Statements………………………………………………………………

11(Notes on Going Concern Assumption) ……………………………………………………………………………………

11(Changes in Accounting Policies) …………………………………………………………………………………………

11(Changes in Accounting Estimates) ………………………………………………………………………………………

11(Significant Subsequent Events) …...………………………………………………………………………………………

12

- 1 -

1. Qualitative Information Regarding the Financial Results for the Current Quarter
From the first three months of Fiscal Year ending March 31, 2024, IAS 12 “Income Taxes” (amended in May 2021) has been appliedand comparative analysis with the same period of the previous fiscal year has been made using retrospectively restated figures. The
application of this standard did not have a material impact on this Summary of Consolidated Financial Statements. The details of thechanges in accounting policies are stated in “(6) Notes to Summary of Consolidated Financial Statements (Changes in Accounting
Policies)” in “2. Summary of Consolidated Financial Statements and Major Notes.”(1) Explanation Regarding Business Results
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 the world. The
28th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP28) was held in Dubai, United
Arab Emirates (UAE) from November 2023. The adopted decision document clearly states that greenhouse gases such as carbon dioxide,
which are the main cause of global warming, need to be reduced by 43% by 2030 and 60% by 2035 compared to 2019 levels, in orderto achieve the goal of limiting global warming to 1.5 degrees Celsius. An increasing number of countries and regions are declaring
carbon neutrality, meaning that emissions of greenhouse gases are virtually zero. As it is believed that the success or failure of efforts
toward GX(*1) is directly linked to the competitiveness of companies and, by extension, the nation, in Japan, based on the GX Promotion
Act, we aim to achieve three things at the same time: decarbonization, stable energy supply, and economic growth, and are implementing
initiatives such as switching to carbon-free power sources and making GX investments of 150 trillion yen in the public and private
sectors. We are expecting businesses, including their marketing activities, to transform into a model that facilitates decarbonization andresolution of societal issues by accelerating corporate transformations 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 versedon the Internet and digital technology internally, and such personnel shortage is now a huge hurdle to digitalization. According to theDX (Digital Transformation) White Paper 2023, more than 80% of Japanese companies answered that they lack both the quality andquantity of human resources to promote DX (Incorporated Administrative Agency Information Technology 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.
<Business Overview>
From the first quarter of this consolidated cumulative period, we started offering the “DGT (Digital Growth Team)” service that werecreated by integrating the EMC and the PGT businesses offered up to the previous fiscal year. The DGT service is a hands-on service
that promotes and supports the digitalization of companies by a customer-dedicated team that consists of 3 or more digital creators withvarious specialized skills, including data analysis, UX(*2), and engineering. Digital creators directly pursue the improvement of digitalbusiness results of client companies, and continuously support their operation with hypothesis verification. In addition, we started tosupport the improvement of carbon productivity (*3) of client companies through our digital business operation services and implement
actions that lead to decarbonization in our daily operation work.
In this fiscal year ending March 31, 2024, we will further strengthen the sales structure through the separation of production and sales
with the aim of establishing DGT service, and by increasing the number of clients we offer DGT models, we will steadily increase theoperating rate of digital creators. To this end, we will attempt to accelerate the growth of non-web operation area and improve profitability
by actively launching inhouse companies that specialize in high-value-added services with advanced technologies and increasing thenumber of digital creators belonging to those companies. Concurrently, we accelerate skill development and job transfer of all digitalcreators. In addition, we will strategically expand mid-career recruitment in order to improve the human resource portfolio of the entire
group and build a foundation for enhancing service capabilities.
Since this corporate group has only one segment, “Internet business support business,” segment information is omitted.
<Overview of Consolidated Financial Statements>
For the third quarter of the current consolidated cumulative term, revenue was 14,584 million yen (up 15.7% from the same quarterof the previous fiscal year), operating loss was 569 million yen (operating profit of 607 million yen in the same quarter of the previous
fiscal year), loss before income taxes was 533 million yen (profit before income taxes of 558 million yen in the same quarter of theprevious fiscal year), and loss attributable to the owners of the parent was 382 million yen (profit attributable to the owners of the parentof 378 million yen in the same quarter of the previous fiscal year).
- 2 -Sales revenue increased by 15.7% year-on-year and added-value sales (sales generated by internal resources after deducting
outsourcing and procurement costs) increased by 13.9% year-on-year, both reaching record highs.
The growth rate of added-value sales slowed down year-on-year in the third consolidated fiscal quarter due to an increase in workin-progress related to fourth quarter sales and a delay in the transfer of digital creators to high value-added areas compared to the plan.
However, due to the Policies and Initiatives aimed at improving profitability in the next fiscal year and beyond, the number ofcompanies we offer DGT models increased to 141 companies (+25 companies compared to the end of the previous fiscal year), and thenumber of all client customers increased to 427 companies (+77 companies compared to the end of the previous fiscal year). The
customer base has continued to expand, and the added-value sales per company among the top 50 companies we offer DGT models interms of sales scale has increased by 7.6% year-on-year by providing high value-added services for existing customers aggressively.
<Our Corporate Group’s Policies and Initiatives>
Going forward, we will continuously aim for further growth on added-value sales while placing top priority on improving profitability
based on the following policies.
1.

Improving profitability by reducing upfront investment-type recruitment
Since the upfront investment in new graduate recruitment was excessive compared to the actual added-value sales growth rate during

the third quarter of the current consolidated cumulative period, we recognize that it is necessary to control this cost in order to improve
profitability. As a specific initiative, we will restrict the hiring of new graduates until the target operation rate for digital creators
excluding first-year new graduate employees reaches 90% and operating profit margin recovers to 10%.
In the fiscal year ending March 2025, we will reduce the number of new graduate employees we will hire to just over 400 (585 joinedin the fiscal year ending March 2024), and although we aim to improve profit margins to a certain extent, we expect that the cost for
non-operating digital creators will continue to occur. Therefore, we do not expect the operating profit margin to recover to 10%.
From the fiscal year ending March 2026, we will further curtail the recruitment of new graduate employees, to achieve the growthrate of added-value sales of 15% and operating profit margin of 10% or higher.
2.

Continuing efforts to strengthen services, sales, and training to increase growth rate
In accordance with our current management policy, we will strongly promote the following three points in an effort to raise the growthrate of added value sales and quickly achieve our operating profit margin target of 10%.
(1) Establish the DGT service•
Shift from the web operations field to highly advanced fields on digital business operations such as data/AI/cloud(2) Strengthen sales strategy••

Strengthen account management to expand transactions with existing customers
Establish separation of production and sales to acquire new customers(3) Improve human resources portfolio and strengthen training•
Control new graduate recruitment and continue to strengthen mid-career recruitment•
Strengthen the development of high value-added human resources in data/AI/cloud, etc.
Looking ahead to improved profitability from the fiscal year ending March 2025, we have already begun to see results from theprogress made in the forementioned policies and initiatives, particularly in the high-value-added fields. The number of digital creatorsand customer base in the specialized companies in this field has expanded compared to the previous quarter. We will continue tostrengthen the development of highly advanced creators, such as data analysts and the one utilizing generative AI, to further expand thenumber of digital creators in the high-value-added fields and establish DGT services. We will also actively promote services on thosehigh-value-added fields to existing customers to further increase the value-added sales per company.
We believe that digital investment by companies will accelerate further, and at the same time, the shortage of IT/digital humanresources will further expand, against the backdrop of further evolution of digital technology, the global effort toward decarbonization,and decline in population in Japan. Under such environment, we will continue to work to expand our human capital by improving theskills of digital creators, who are the source of value creation for customers, and improving employee engagement, by continuing toinvest in human resources such as developing specialized skills; then, we will realize "the world's best digital business operation support"
through the DGT services.
(*1) GX (Green Transformation): This refers to the transformation for utilizing clean energy while avoiding the use of fossil fuels asmuch as possible and activities aimed at achieving this goal. The Ministry of Economy, Trade and Industry believes that efforts to achievecarbon neutrality by 2050 and the national greenhouse gas emission reduction target by 2030 are opportunities for economic growth anddefines GX as the transformation of entire economic and social system toward the goal of reducing emissions and improving industrial
competitiveness.
(*2) UX (User Experience): The experience one gains by using a product or service.
- 3 -(*3) Carbon Productivity: Gross domestic product (GDP) per unit of greenhouse gas emissions. We design for customers our support toformulate and operate their business model with calculating profits per carbon emitted during manufacturing, sales, and collection ofcustomers’ products and services as the carbon productivity. Our company, we measure a company's carbon productivity by measuring
profits per carbon emitted during the manufacturing, sales, and collection of products and services, and formulate business model
construction and operational support.
(2) Explanation Regarding the Financial Standingi)Status of Assets, Liabilities, and Shareholders’ Equity
The total assets at the third quarter of the current consolidated term were 10,613 million yen (down 692 million yen from theend of the previous consolidated fiscal year). This is primarily due to an increase of 478 million yen in other current assets, 167
million yen in deferred tax assets, and 131 million yen of inventory assets, along with a decrease of 1,454 million yen in cash
and cash equivalents.
Total liabilities stood at 5,070 million yen (up 131 million yen from the end of the previous consolidated fiscal year). Thiswas primarily due to a decrease of 151 million yen in income taxes payable, 86 million yen in trade payables and other payables,and 52 million yen in contract liabilities, along with an increase of 432 million yen in other current liabilities.
Total equity was 5,542 million yen (down 824 million yen from the end of the previous consolidated fiscal year). This wasprimarily due to an increase of 47 million yen in capital surplus and 40 million yen in capital stock, along with a decrease of
763 million yen in retained earnings and 131 million yen due to purchase of treasury shares.
ii)Status of Cash FlowsThe cash and cash equivalent (hereinafter referred to as “funds”) at the end of the third quarter of the current consolidated
cumulative term was 3,025 million yen, down 1,454 million yen from the end of the previous consolidated fiscal year. The statusof each cash flow for the cumulative third quarter and the factors behind them are as follows.
(Cash Flows from Operating Activities)
The funds used during the third quarter of the current consolidated cumulative term as a result of operating activities
amounted to 570 million yen (350 million yen acquired during the same quarter of the previous year). The income was mainly
from 381 million yen in depreciation and amortization while the expenditure was mainly from 533 million yen in loss before
income taxes, 363 million yen in income taxes paid, and an increase of 131 million yen in inventory assets.
(Cash Flows from Investing Activities)
The funds used during the third quarter of the current consolidated cumulative term as a result of investing activities amounted
to 80 million yen (1,129 million yen used in the same quarter of the previous year). The income was mainly from 26 million yen
in income from the sale of investments while the expenditure was mainly from 61 million yen in expense due to security deposit,
23 million yen in purchase of property, plant and equipment and 22 million yen in purchase of investments.
(Cash Flows from Financing Activities)
The funds used during the third quarter of the current consolidated cumulative term as a result of financing activities amounted
to 802 million yen (563 million yen used in the same quarter of the previous year). The expenditure was mainly from 391 million
yen as dividends paid, 351 million yen in expenditure for the repayment of lease liabilities, and 132 million yen in purchase oftreasury shares.
(3) Explanation Regarding the Future Forecast Information such as Consolidated Earnings Forecast
There is no change to the consolidated earnings forecast for the fiscal year ending March 2024, which was announced on
October 27, 2023.
(Regarding the Dividend Forecast)
From the point of enhancing the return of profits to all of our shareholders and further increasing enterprise value, we willretain earnings in preparation for new business investment for long-term profit growth and the expansion in business activities,
as well as set a fundamental policy of the distribution of profits according to the improvement of business results and a continuous
increase in the dividend amount. Our medium-term target of an equity dividend ratio attributable to owners of the consolidated
parent company is about 5%.
After comprehensively taking into account of the DOE and dividend payout ratio, the term-end dividend for FY 3/2024 isplanned to be 31.00 yen.

- 4 -

2. Summary of Consolidated Financial Statements and Major Notes(1) Summary of Quarterly Consolidated Balance Sheets[unit: thousand yen]Previous consolidated
accounting year
(Mar. 31, 2023)

3rd quarter of the current
consolidated accounting year
(Dec. 31, 2023)

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

4,479,967

3,025,311

3,387,822
68,547－

3,299,926
200,250

234,3112,406
712,932

8,170,648

7,240,827

Tangible fixed assets
Rights to use as assets

349,032
918,446

337,354898,704

Goodwill
Intangible assets

116,115
9,897

116,1158,455

1,340,550
401,188

1,442,556
569,033

Total current assets
Non-current assets

Other financial assets
Deferred tax assets
Total non-current assets
Total assets- 5 -3,135,231

3,372,219

11,305,879

10,613,047

[unit: thousand yen]Previous consolidated
accounting year
(Mar. 31, 2023)

3rd quarter of the current
consolidated accounting year
(Dec. 31, 2023)

Liabilities and shareholders’ equity
Liabilities
Current liabilities
Lease liabilities
Trade payables and other payables

360,860
1,201,535

431,536
1,115,526

Income taxes payable
Contract liabilities

204,338
66,73752,92914,361Other current liabilities

2,551,526

2,984,167

Total current liabilities

4,384,998

4,598,521

Non-current liabilities
Lease liabilities
Allowance
Total non-current liabilities

301,917

236,119

252,658

236,168

554,576472,2884,939,574

5,070,809

Capital stock
Capital surplus

1,017,504
342,670

1,057,867
389,997

Treasury shares
Other components of equity(300,140)
30,845(429,405)
11,435Retained earnings

5,275,424

4,512,341

Total equity attributable to owners of the parent

6,366,305

5,542,237

Total shareholders’ equity

6,366,305

5,542,237

11,305,879

10,613,047

Total liabilities
Shareholders’ equity

Total liabilities and equity- 6 -(2) Summary of Quarterly Consolidated Statements of Income[unit: thousand yen]
Cumulative 3Q FY2023(Apr. 1, 2022 to Dec. 31, 2022)

Cumulative 3Q FY2024(Apr. 1, 2023 to Dec. 31, 2023)

Revenue

12,610,779

14,584,754

Cost of sales

9,131,476

11,862,867

Gross profit

3,479,302

2,721,887

Selling, general and administrative expenses
Other income

2,876,023
12,695

3,286,713
2,242

8,575

7,087

607,39922(569,671)
47,145

Other expenses
Operating profit (loss)
Finance income
Finance costs

49,194

10,633

Profit (loss) before income taxes

558,228(533,159)

Income taxes

179,293(151,074)

Profit (loss) for the period

378,934(382,084)

Profit (loss) attributable to
Owners of parent

378,934(382,084)

378,934(382,084)

28.57
28.36

(29.13)(29.13)

Net profit (loss)
Earnings per share
Basic earnings (loss) per share (yen)Diluted earnings (loss) per share (yen)- 7 -(3) Summary of Quarterly Consolidated Statements of Comprehensive Income[unit: thousand yen]
Cumulative 3Q FY2023(Apr. 1, 2022 to Dec. 31, 2022)

Cumulative 3Q FY2024(Apr. 1, 2023 to Dec. 31, 2023)

378,934(382,084)

Financial assets measured at fair value through othercomprehensive income－

121

Total items that will not be reclassified to profit or loss－

121

Profit (loss) for the period
Other comprehensive income
Items that will not be reclassified to profit or loss－

121

378,934(381,963)

Owners of parent

378,934(381,963)

Comprehensive income

378,934(381,963)

Other comprehensive income after tax
Comprehensive income total
Comprehensive income attributable to- 8 -(4) Summary of Quarterly Consolidated Statements of Changes in Equity
Consolidated third quarter of the prior fiscal year ended March 2023 (Apr. 1, 2022 to Dec. 31, 2022)[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

－

－

－

－

(7,857)(7,857)(7,857)963,358

281,704(8,477)52,1904,598,744

5,887,519

5,887,519

－

－

－

－

378,934

378,934

378,934

－

－

－

－

378,934

378,934

378,934

Exercise of share acquisition rights

53,56453,564－(11,693)－

95,43595,435

Forfeiture of share acquisition rights

－

－

－

(19)

19

－

－

Purchase of treasury shares

－

－

(476)

－

－

(476)

(476)

Disposal of treasury shares

－

3,987

1,203

－

－

5,190

5,190

Dividends

－

－

－

－

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

Total transactions with owners

53,56457,551

726(11,713)(328,174)(228,044)(228,044)

Balance on December 31, 2022

1,016,922

339,256(7,750)40,477

4,649,505

6,038,410

6,038,410

Cumulative effect of accountingchangeRestated balance
Profit for the period
Total comprehensive income

Consolidated third quarter of the current fiscal year ending March 2024 (Apr. 1, 2023 to Dec. 31, 2023)[unit: thousand yen]
Equity attributable to owners of parent
Capitalstock
Balance on April 1, 2023

Capitalsurplus

Other
components ofequityTreasurysharesRetainedearnings

Total

Total
Equity1,017,504

342,670(300,140)

30,8455,275,424

6,366,305

6,366,305

Profit (loss) for the period

－

－

－

－

(382,084)(382,084)(382,084)

Other comprehensive income

－

－

－

121

－

121

121

－

－

－

121

(382,084)(381,963)(381,963)

40,36340,363－(8,140)－72,586

72,586

Share-based compensationtransactions

－

6,047

－

－

－

6,047

6,047

Issuance of share acquisition rights

－

－

－

195

－

195

195

Forfeiture of share acquisitionrights－－－(11,587)

11,587－－Purchase of treasury shares－－(131,235)－－(131,235)(131,235)

Disposal of treasury shares

－

917

1,970

－

－

2,887

2,887

Dividends

－

－

－

－

(392,585)(392,585)(392,585)

Total transactions with owners

40,36347,327(129,264)(19,531)(380,998)(442,103)(442,103)

Balance on December 31, 2023

1,057,867

389,997(429,405)

11,4354,512,341

5,542,237

5,542,237

Total comprehensive income
Exercise of share acquisition rights- 9 -(5) Summary of Quarterly Consolidated Statements of Cash Flows[unit: thousand yen]
Cumulative 3Q FY2023(Apr. 1, 2022 to Dec. 31, 2022)

Cumulative 3Q FY2024(Apr. 1, 2023 to Dec. 31, 2023)

Profit (loss) before income taxes
Depreciation and amortization

558,228364,293(533,159)
381,173

Finance income
Finance costs(22)
48,001(47,145)
10,633(Increase) decrease in inventories(Increase) decrease in trade and other receivables(47,382)(97,261)(131,702)
35,475

Increase (decrease) in trade and other payables
Other

55,351(212,018)(8,412)
93,486

Cash flows from operating activities

Subtotal

669,189(199,652)

Proceeds from subsidy income
Proceeds from insurance income

1,383
6,000

－
－

Interest and dividends received
Interest paid

13,942(6,138)20(7,655)

Income taxes paid
Income taxes refund(334,345)
4(363,671)
36

Cash flows from operating activities

350,034(570,921)

Purchase of property, plant and equipment
Purchase of intangible assets(137,151)(2,904)(23,668)－

Purchase of investments
Income from the sale of investments(992,459)－(22,514)
26,271－－
2,588(61,736)866－(1,129,926)(80,781)(332,110)－(351,796)

Cash flows from investing activities

Expense due to security deposit
Income from collection of security deposit
Other
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

95,435

195
72,586

Payments for purchase of treasury shares
Dividends paid

(476)
(326,719)(132,102)(391,835)

Cash flows from financing activities(563,870)(802,952)

Net increase (decrease) in cash and cash equivalents(1,343,762)(1,454,655)

Cash and cash equivalents at beginning of period

5,226,706

4,479,967

Cash and cash equivalents at end of period

3,882,944

3,025,311- 10 -

(6) Notes to Summary of Consolidated Financial Statements(Notes on Going Concern Assumption)
There is no related information.
(Changes in Accounting Policies)
This corporate group applied IAS 12 “Income Taxes” (amended in May 2021) from the first three-month period of fiscal year
ending March 31, 2024.
Statement

Criteria nameCompulsory
application period(Start year after)

IAS 12

Income taxes

January 1, 2023

FY applicable to

Description of new standard, interpretations

the corporate group

and amendments

Period ending
March 31, 2024

Clarification of accounting treatment fordeferred taxes related to assets and liabilities
arising from a single transaction

The application of this standard clarifies the accounting treatments on initial recognition for transaction that give rise to equal
taxable and deductible temporary differences at the time of the transaction, and results in the recognition of taxable and deductible
temporary differences as deferred tax liabilities and assets, respectively, in the Condensed Interim Consolidated Statements ofFinancial Position.
As a result of the application of the standard, the previous fiscal year’s consolidated financial statements have been retrospectively
restated. The effect of the application decreased deferred tax assets by 9,391 thousand yen and retained earnings by 9,391 thousand
yen. In addition, the effect increased income tax expenses by 172 thousand yen and decreased profit for the period by the sameamount in the Consolidated Statements of Income for the first nine-month period of fiscal year ended March 31, 2023.
Due to the cumulative effect of application of this standard, the beginning balance of retained earnings for the first nine-month
period of previous fiscal year decreased by 7,857 thousand yen in the Consolidated Statements of Changes in Equity.
(Changes in Accounting Estimates)
During the third quarter of the consolidated cumulative term, we made a decision to terminate leases for certain offices. As
a result, we have remeasured lease liabilities due to changes in lease terms and adjusted the carrying amount of Rights to use as
assets.
This change has resulted in a decrease of 23,365 thousand yen in Rights to use as assets and 23,365 thousand yen in leaseliabilities at the end of the first nine-month period of fiscal year ending March 31, 2024 compared to before the change.

- 11 -

(Significant Subsequent Events)(Acquisition of treasury share)
At the board of directors meeting held on October 27, 2023, the Company resolved matters related to the acquisition oftreasury share based on the provisions of Article 156 of the Companies Act, as applied by replacing the terms with theprovisions of Article 165, Paragraph 3 of the same Act.
(1) The reason of purchase of treasury shares
Reason to acquire the treasury share: To enhance returns to shareholders, improve capital efficiency, and be able to executethe flexible capital policy in the future, as well as to allocate shares to be delivered as incentives such as share compensation
for sustainable improvement of corporate value.
(2) Content regarding the purchase(i)Type of shares to be acquired(ii)Total number of shares to be acquired

Our common share
400,000 shares (Upper limit)(3.04% of total number of issued shares excluding treasury share)(iii)Total acquisition price of shares

400,000,000 yen (Upper limit)(iv)Acquisition period

From November 1, 2023 to March 29, 2024(v)Acquisition method

Market purchases on the Tokyo Stock Exchange(Reference) Treasury shares as of October 27, 2023
Number of shares issued and outstanding
13,146,004 shares(excluding treasury shares)
Number of treasury shares
275,696 shares(3) Content regarding the purchase of treasury shares
Based on the forementioned resolution of the board of directors meeting, we have purchased treasury shares from January 1,
2024 to January 11, 2024(i)
Type of shares purchased
Our common share(ii)
Total number of shares purchased
258,700 shares(iii)
Total price of shares purchased
268,749,800 yen
We have completed the share buyback program as resolved by the Board of Directors meeting held on October 27, 2023. The
total number of treasury shares acquired as of January 11, 2024 is as follows:(i)
Total number of shares purchased
378,600 shares(ii)
Total price of shares purchased
399,985,300 yen- 12 -