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.
SEPTENI HOLDINGS CO., LTD. (“the Company”) assumes no responsibility for this translation or for direct, indirect or
any other forms of damages arising from the translation.

CONVOCATION NOTICE FOR THE 30TH ORDINARY
GENERAL MEETING OF SHAREHOLDERSSEPTENI HOLDINGS CO., LTD.

Securities Code: 4293

Top Message
On behalf of SEPTENI HOLDINGS CO., LTD., I would like to express our thanks for your support. Pleasefind herein the convocation notice for the 30th Ordinary General Meeting of Shareholders.
The 2020 fiscal year was one year filled with such tumultuous change that it required the earnings forecasts
to be revised twice due to the significant impact of novel coronavirus disease (hereinafter referred to as“COVID-19”) on society and economy. Even in an environment of stay-at-home orders and other measures,
I believe it was a year in which we were able to get back on a track for growth while minimizing the impact
of COVID-19 by expanding projects compatible with the online shift in overall consumption, promoting
alliance operations with the Dentsu Group, and reforming the way we work through telework and online
recruitment. Amid such environmental changes, we have updated our Midterm Business Policies to seize
upon the changes that have occurred in people’s values and consumption, and in society as a whole as a newopportunity for growth, and to chart medium- to long-term growth in response to the acceleration of digitaltransformation (DX).
Under the Group’s mission of “inspiring the world with entrepreneurship,” we will work to further enhance
our corporate value. We very much appreciate your continuous understanding and support.

November 2020

Koki Sato,
Representative Director
Group President and Chief Executive Officer-1-

November 27, 2020
Dear Shareholder
Koki Sato,
Representative Director
Group President and Chief Executive Officer

SEPTENI HOLDINGS CO., LTD.
17-1 Nishishinjuku 8-chome, Shinjuku-ku,
Tokyo, JapanCONVOCATION NOTICE FOR THE 30TH ORDINARY
GENERAL MEETING OF SHAREHOLDERS
1. Date and Time:

Tuesday, December 22, 2020, at 10:00 a.m.
(Reception will begin at 9:00 a.m.)

2. Place:

B1 Floor, Crystal Room
Hyatt Regency Tokyo
7-2 Nishishinjuku 2-chome, Shinjuku-ku, Tokyo, Japan

3. Meeting Agenda
Matters to be reported:
1. The Business Report and Consolidated Financial Statements for the Company’s 30th
term (from October 1, 2019 to September 30, 2020) and the results of audits of theConsolidated Financial Statements by the Financial Auditor and the Board of Company
Auditors
2. Non-consolidated Financial Statements for the Company’s 30th term (from October 1,
2019 to September 30, 2020)
Matters to be resolved:
Agenda Item No. 1:
Election of Eight Directors
Agenda Item No. 2:
Election of One Company Auditor
To Institutional Investors

You may use the Electronic Proxy Voting Platform operated by ICJ Inc., as a methodof exercising your voting rights for the General Meetings of Shareholders.

 When you attend the meeting, you are kindly requested to submit the enclosed Voting Rights Exercise Form to thereceptionist at the meeting.
For the purpose of saving resources, please be sure to bring this convocation notice with you.
 The documents to be provided with this convocation notice1) Notes to Consolidated Financial Statements
2) Notes to Non-consolidated Financial Statements
Based on relevant laws and regulations and the Article 19 of the Company’s Articles of Incorporation, the above items areposted on the Company’s website and are therefore not included in the documents accompanying this convocation notice.
The Consolidated Financial Statements and the Non-consolidated Financial Statements audited by the Board of Company
Auditors and the Financial Auditor include Notes to Consolidated Financial Statements and Notes to Non-consolidated
Financial Statements, which are posted on the Company’s website.
If any amendment is made to the Business Report, the Consolidated Financial Statements, the Non-consolidated Financial
Statements and the Reference Documents for the General Meeting of Shareholders, the amended information will be
disclosed on the Company’s website.

The Company’s website: https://www.septeni-holdings.co.jp/en-2-

Reference Documents for the General Meeting of Shareholders
Agenda Items and Reference Matters
Agenda Item No. 1:

Election of Eight Directors

At the close of this General Meeting of Shareholders, all six directors will retire due to the expiration of theirrespective terms of office.
In that regard, the Company hereby proposes the election of eight directors, including five outside directors,
increasing the number of outside directors by two to further enhance the corporate governance.
To establish a higher level of corporate governance, maintain sustainable growth, and enhance corporate
value over the medium to long term, the Company delegates as much of the decision-making and execution
relating to business execution as possible to Group Executive Officers, and so the board of directors canperform thorough oversight of the business execution of the Group Executive Officers.
The oversight function of management is continually strengthening under our board of directors whose
composition comprises a majority of outside directors.
The Company nominates candidates for director based on a strong sense of ethics and responsibility, and theextensive knowledge and experience, as well as character, required for the Company’s management decisionmaking, or the track record and insight required to enhance the oversight function of management.
In nominating candidates for director, based on the above policy, the Group President and Chief Executive
Officer creates a proposed list of candidates, and following deliberation by the Nomination Advisory
Committee, composed only of outside directors and the Group President and Chief Executive Officer, thecandidates are nominated at a meeting of the board of directors.
The candidates are as follows:-3-

Candidate
No.

1
2
3

Koki Sato
Representative director
Group President and Chief
Executive Officer

Isamu Ueno
Representative director
Group Senior Executive Officer

Tadahiro Matsuda
Director
Group Senior Executive Officer

4

Etsuko Okajima

5

Yusuke Asakura

6

Important positions held at othercompanies

Name

Attendance
to theboard ofdirectors
meetings

Outside director

Outside director

Yoshiki Ishikawa
Outside director

Reelection

13/13

Reelection

13/13

Reelection

13/13

CEO, ProNova Inc.
External Director, MARUI GROUP Co.,
Reelection
Outside director
Ltd.
Independent officer Outside Director, euglena Co., Ltd.
External Director, Money Forward, Inc.

13/13

Reelection
Outside director
Representative Director, Signifiant Inc.
Independent officer

13/13

Director, Cancer Scan Co., Ltd.
Director, Campus for H Inc.
Reelection
Outside director
External Director (Audit & Supervisory
Independent officer Committee Member), Sansan, Inc.
External Director, Gaiax Co. Ltd.

10/10

–/–

–/–

7

Akie Iriyama

Professor, Business School, Waseda
University
New candidate
Outside Director, Rohto Pharmaceutical
Outside director
Co., Ltd.
Independent officer
Outside Director, Sanoh Industrial Co.,Ltd.

8

Mio Takaoka

New candidate
Outside director
Partner, Arbor Ventures
Independent officer

-4-

1

Koki Sato(Date of birth: March 11, 1975)

Reelection
19 yearsand 5 months
Attendance to the board of directors meetings
13/13
Number of the Company’s common shares held 372,300
Number of years in office

Profile and position at the Company
Apr. 1997
Joined the Company
Jul. 2001
Director and General Manager of Internet Operations
Oct. 2003
Managing Director and CMO
Dec. 2004
Senior Managing Director and COO
Oct. 2007
Senior Managing Director
Dec. 2009
Representative Director (current position) and President
Jan. 2017
Group President and Chief Executive Officer (current position)
Jan. 2019
Executive Officer, Dentsu Inc.
 Reasons for nomination as candidate for director
Since joining the Company, Mr. Koki Sato established a new field which has become a major pillar of the Group business,always leading from the front. Furthermore, he has led the management of the entire Group over the course of many years,
steadily addressing a range of management challenges to enhance corporate value, and because he is expected to continue toexercise strong leadership, he has once again been nominated as candidate for director.
 Important positions held at other companies
None.

2

Isamu Ueno
(Date of birth: June 1, 1968)

Reelection
Number of years in office
16 years
Attendance to the board of directors meetings
13/13
Number of the Company’s common shares held 533,999

Profile and position at the Company
Sep. 1998
Joined the Company
Nov. 2003
Officer and Manager of Personnel and Administration
Dec. 2004
Director and Manager of Personnel and Administration
Dec. 2005
Managing Director
Dec. 2009
Senior Managing Director
Jan. 2017
Group Senior Executive Officer (current position)
Dec. 2018
Representative Director (current position)
 Reasons for nomination as candidate for director
Mr. Isamu Ueno has extensive experience and results, and considerable insight in the field of personnel and administration,and because he is expected to drive the management of the Group and further enhance and drive corporate governance, he
has once again been nominated as candidate for director.
 Important positions held at other companies
None.

-5-

3

Tadahiro Matsuda(Date of birth: May 7, 1973)

Reelection
Number of years in office
2 years
Attendance to the board of directors meetings
13/13
Number of the Company’s common shares held 162,500

Profile and position at the Company
Apr. 1998
Joined the Company
Oct. 2004
Head of the Osaka BranchJul. 2005
General Manager of Media
Dec. 2005
Director
Aug. 2009
Representative Director, SEPTENI CROSSGATE CO., LTD.
Jan. 2017
Group Executive Officer
Dec. 2018
Director (current position)
Jan. 2019
Group Senior Executive Officer (current position)
 Reasons for nomination as candidate for director
Mr. Tadahiro Matsuda has extensive experience and results, and considerable insight in the Group’s digital marketingbusiness and new business fields, and because he is expected to further enhance and drive the management of the Group, he
has once again been nominated as candidate for director.
 Important positions held at other companies
None.

-6-

4

Etsuko Okajima(Date of birth: May 16, 1966)

Reelection
Outside director
Independent officer
Number of years in office
5 years
Attendance to the board of directors meetings
13/13
Number of the Company’s common shares held –Profile and position at the Company
Apr. 1989
Joined Mitsubishi Corporation
Jan. 2001

Joined McKinsey & Company

Mar. 2002

Joined Globis Management Bank, Inc.

Jul. 2005

President, Globis Management Bank, Inc.

Jun. 2007

CEO, ProNova Inc. (current position)

Jun. 2014

Outside Director, Astellas Pharma Inc.

Jun. 2014

External Director, MARUI GROUP Co., Ltd. (current position)

Dec. 2015

Outside Director (current position)

Mar. 2016

Outside Director, Link and Motivation Inc.

Dec. 2018

Outside Director, euglena Co., Ltd. (current position)

Feb. 2019

External Director, Money Forward, Inc. (current position)

 Reasons for nomination as candidate for outside director
Ms. Etsuko Okajima has an abundance of experience and knowledge, and considerable insight of corporate management, andbecause she has actively provided useful advice on all aspects of the business administration of the Group from an
independent and objective position, she is deemed capable of providing oversight and advice on the Company’s businessadministration as an outside director, and has once again been nominated as candidate for outside director.
 Important positions held at other companies
CEO, ProNova Inc.; External Director, MARUI GROUP Co., Ltd.; Outside Director, euglena Co., Ltd.; External Director,
Money Forward, Inc.

-7-

5

Yusuke Asakura(Date of birth: July 23, 1982)

Reelection
Outside director
Independent officer
Number of years in office
3 years
Attendance to the board of directors meetings
13/13
Number of the Company’s common shares held –Profile and position at the Company
Apr. 2007
Joined McKinsey & Company
Aug. 2010

Joined Naked Technology Inc.

Oct. 2010

Representative Director, President and CEO, Naked Technology Inc.

Oct. 2011

Joined mixi Inc.

Jun. 2013

Representative Director, President and CEO, mixi Inc.

Nov. 2014

Visiting scholar, Stanford University

May 2015

Outside director, Raksul, Inc.

Mar. 2016

Outside director, Loco Partners

Mar. 2017

Visiting scholar, National Graduate Institute for Policy Studies

Jul. 2017

Representative Director, Signifiant Inc. (current position)

Dec. 2017

Outside Director (current position)

 Reasons for nomination as candidate for outside director
Mr. Yusuke Asakura has professional, extensive experience and results, and considerable insight as an executive at listed
internet companies, as a researcher and as an investor, and because he has actively provided useful advice on all aspects ofthe business administration of the Group, he is deemed capable of providing oversight and advice on the Company’s businessadministration as an outside director, and has once again been nominated as candidate for outside director.
 Important positions held at other companies
Representative Director, Signifiant Inc.

-8-

6

Yoshiki Ishikawa(Date of birth: February 27, 1981)

Reelection
Outside director
Independent officer
Number of years in office
1 yearAttendance to the board of directors meetings
10/10
Number of the Company’s common shares held –Profile and position at the Company
Nov. 2008
Director, Cancer Scan Co., Ltd. (current position)
Sep. 2014

Director, Campus for H Inc. (current position)

Feb. 2019

External Director (Audit & Supervisory Committee Member), Sansan, Inc. (current position)

Mar. 2019

External Director, Gaiax Co. Ltd. (current position)

Dec. 2019

Outside Director (current position)

 Reasons for nomination as candidate for outside director
Mr. Yoshiki Ishikawa has professional, extensive experience and results, and considerable insight as both a preventive
medicine researcher and as a founder of a company using methods based on behavioral science, and because he has actively
provided useful advice on all aspects of the business administration of the Group, he is deemed capable of providing
oversight and advice on the Company’s business administration as an outside director, and has once again been nominated as
candidate for outside director.
 Important positions held at other companies
Director, Cancer Scan Co., Ltd.; Director, Campus for H Inc.; External Director (Audit & Supervisory Committee Member),
Sansan, Inc.; External Director, Gaiax Co. Ltd.

7

Akie Iriyama(Date of birth: December 8, 1972)

New candidate
Outside director
Independent officer
Number of years in office– years
Attendance to the board of directors meetings–/–
Number of the Company’s common shares held –Profile and position at the Company
Apr. 1998
Joined Mitsubishi Research Institute, Inc.
Sep. 2008
Assistant Professor, University at Buffalo, the State University of New York
Sep. 2013
Associate Professor, Business School, Waseda University
May 2016
Outside Director, Macromill, Inc.
Apr. 2019
Professor, Business School, Waseda University (current position)
Jun. 2019
Outside Director, Rohto Pharmaceutical Co., Ltd. (current position)
Jun. 2020
Outside Director, Sanoh Industrial Co., Ltd. (current position)
 Reasons for nomination as candidate for outside director
Mr. Akie Iriyama has operational experience as a consultant, along with professional, extensive experience and results andconsiderable insight as a researcher specialized in the management strategies and the global management fields, and he isdeemed capable of providing oversight and advice on the Company’s business administration as an outside director, and has
been nominated as candidate for outside director. Although he has never been involved in corporate management other thanserving as an outside officer, he is deemed capable of properly carrying out the duties of an outside director of the Company
for the reasons mentioned above.
 Important positions held at other companies
Professor, Business School, Waseda University; Outside Director, Rohto Pharmaceutical Co., Ltd.; Outside Director, Sanoh
Industrial Co., Ltd.

-9-

8

Mio Takaoka(Date of birth: May 3, 1979)

New candidate
Outside director
Independent officer
Number of years in office– years
Attendance to the board of directors meetings–/–
Number of the Company’s common shares held –Profile and position at the Company
Jul. 1999
Joined Goldman Sachs Japan Securities
Jun. 2002
Joined Morgan Stanley Japan Securities (currently Morgan Stanley MUFG Securities Co., Ltd.)Mar. 2006
Joined Lehman Brothers Japan Securities
Jan. 2009
Joined Monex Group, Inc.
Feb. 2014
Executive, General Manager of new business, Monex Group, Inc.
May 2014
Director, Monex Ventures, Inc.
Sep. 2017
Joined MedicalNote, Inc.
Sep. 2017
Partner, Arbor Ventures (current position)
Mar. 2018
Director, MedicalNote, Inc. (current position)
 Reasons for nomination as candidate for outside director
Ms. Mio Takaoka has professional, extensive experience and results, and considerable insight of strategic investment, newbusiness development and finance, and she is deemed capable of providing oversight and advice on the Company’s businessadministration as an outside director, and has been nominated as candidate for outside director.
 Important positions held at other companies
Partner, Arbor Ventures(Notes)1. The name of Ms. Etsuko Okajima in the family register is Etsuko Mino.
2. Ms. Etsuko Okajima, Mr. Yusuke Asakura, Mr. Yoshiki Ishikawa, Mr. Akie Iriyama and Ms. Mio Takaoka are candidates
for outside directors.
3. Ms. Etsuko Okajima is the CEO of ProNova Inc., which has concluded a service contract agreement with the Company forworkshops on themes such as “The Importance of Diversity and Inclusion” and “Career Building for the Advancement of
Women.”
4. Apart from what is mentioned in 3. above, there are no other special relationships between the Company and each of thecandidates.
5. The number of the board of directors meetings included in the scope of attendance for Mr. Yoshiki Ishikawa is the 10
meetings held during the time after he was appointed as director on December 18, 2019.
6. Ms. Mio Takaoka is scheduled to retire from office as Director of MedicalNote, Inc. on December 25, 2020.
7. The Company has established “Independence Standards for Outside Officers” (https://www.septeniholdings.co.jp/ir/pdf/isod.pdf) (in Japanese only). There is no information showing any violations of these standards forcandidates Ms. Etsuko Okajima, Mr. Yusuke Asakura, Mr. Yoshiki Ishikawa, Mr. Akie Iriyama or Ms. Mio Takaoka, andeach candidate is deemed independent.
8. The Company has designated Ms. Etsuko Okajima, Mr. Yusuke Asakura and Mr. Yoshiki Ishikawa as independent officers
in accordance with the rules of Tokyo Stock Exchange, Inc. and has submitted a notice of designation to the Tokyo Stock
Exchange. If the proposed reelection of them is approved, the Company will continue to designate them as independent
officers. Furthermore, if the proposed election of Mr. Akie Iriyama and Ms. Mio Takaoka is approved, the Company will
designate them as independent officers in accordance with the rules of Tokyo Stock Exchange, Inc., and will submit a noticeof designation to the Tokyo Stock Exchange.
9. The Company has entered into a liability limitation agreement with each of Ms. Etsuko Okajima, Mr. Yusuke Asakura andMr. Yoshiki Ishikawa. According to the aforementioned liability limitation agreement, their liability for damages under
Article 423, paragraph 1 of the Companies Act will not exceed either ¥5 million or the minimum liability amount stipulated
in Article 425, paragraph 1 of the same Act, whichever is higher. If the proposed reelection of them is approved, the Company
plans to again enter into the aforementioned liability limitation agreement with them. In addition, if the proposed electionof Mr. Akie Iriyama and Ms. Mio Takaoka is approved, the Company plans to enter into the aforementioned liability
limitation agreement with them.

- 10 -

Agenda Item No. 2:

Election of One Company Auditor

At the close of this General Meeting of Shareholders, company auditor Mr. Muneyoshi Nomura will retireby resignation. In that regard, the Company hereby proposes the election of one new company auditor.
In addition, the consent of the board of company auditors has been obtained for this proposal.
The candidate is as follows:

Important positions held at othercompanies

Name

Tadahiro Mori

Attendance
Attendance
to theto theboard ofboard ofcompany
directors
auditors
meetings
meetings

New candidate
Outside company
auditorTadahiro Mori
(Date of birth: August 5, 1957)

–/–

–/–

New candidate
Outside company auditor
Number of years in office– years

Attendance to the board of directors meetings–/–

Attendance to the board of company auditors
meetings–/–

Number of the Company’s common shares held –Profile and position at the Company
Apr. 1980
Joined Taiyo Fishery Co., Ltd. (currently Maruha Nichiro Corporation)
Apr. 2012
General Manager of Administration Department, Maruha Nichiro Foods, Inc. (currently Maruha Nichiro
Corporation)
Apr. 2014
General Manager of Logistics Department, Maruha Nichiro Corporation
Nov. 2014
General Manager of Risk Management Department, Maruha Nichiro Corporation
Apr. 2018
Advisor, DAITO GYORUI CO., LTD.
Jun. 2018
Director (Full-time Audit & Supervisory Committee Member), DAITO GYORUI CO., LTD.
 Reasons for nomination as candidate for outside company auditor
Mr. Tadahiro Mori has considerable insight and extensive operational experience of auditing, and he is deemed capable ofproperly carrying out the duties of company auditor, and has been nominated as candidate for outside company auditor.
 Important positions held at other companies
None.
(Notes)1. There is no special relationship between the Company and Mr. Tadahiro Mori.
2. Mr. Tadahiro Mori is a candidate for outside company auditor.
3. If the election of Mr. Tadahiro Mori is approved, the Company will enter into a liability limitation agreement with him
according to which his liability for damages under Article 423, paragraph 1 of the Companies Act will not exceed either ¥5million or the minimum liability amount stipulated in Article 425, paragraph 1 of same Act, whichever is higher.
4. If the proposed election of Mr. Tadahiro Mori is approved at this General Meeting of Shareholders, he plans to assume theposition of internal company auditor.

- 11 -

Business Report (From October 1, 2019 to September 30, 2020)
1. Current status of the SEPTENI Group(1) Business progress and results
Earnings for the fiscal year under review
In the business environment in the fiscal year under review, economic activities stagnated due to the global
spread of novel coronavirus disease (hereinafter referred to as COVID-19), and we saw a reduction inadvertising demand based on stay-at-home orders and restrictions on consumption activities with the state of
emergency declaration issued at the start of April. Thereafter, when the state of emergency declaration was
lifted in mid-May, economic activities began to gradually reopen, and advertising demand which had
continuously declined since late March bottomed out and began to recover in May and continued recovering
through September.
Furthermore, individual smartphone ownership in Japan rose to 67.6% in 2019, as the quantitative expansion
continued centered on Generation Z and the millennial generation, with the exceptionally high popularization
rate of 80-90% of those in their teens through 30s now owning a smartphone. At the same time, the individual
objectives for smartphone use are also diversifying with the increasing usage rate of SNS (social networking
services), meaning we are also seeing a profound qualitative change in use (source: “Communications Usage
Trend Survey in 2019,” Ministry of Internal Affairs and Communications). As such, with the smartphone
becoming a mainstream device to access the Internet, in the market for various services and applications,
expansion into content such as video, music, and e-books is accelerating. Additionally, social media is being
used not only for communication, but is also expanding into fields such as payments and purchases. As its
influence is growing even stronger, demand for marketing support utilizing the individual characteristics ofdifferent media as well as data and AI is also increasing further.
Amid this business environment, our mainstay Digital Marketing Business enjoyed increased revenue andprofit due to increased projects from the online shift in overall consumption caused by COVID-19 and frompromoting alliance operations with the Dentsu Group in Japan. The Media Platform Business sufferedexpanded deficit due to the impact of COVID-19.
Furthermore, to expand into new business segments, we utilized our capital for capital participation incompanies in the sports field, sharing asset field, and entertainment field, and launched business alliances.
As a result, revenue increased to ¥17,938 million (up 6.8% year on year), non-GAAP operating profit
increased to ¥2,452 million (up 18.8% year on year), operating profit totaled ¥2,274 million (compared tooperating profit of ¥183 million in the previous term), profit before tax totaled ¥2,325 million (compared toloss before tax of ¥81 million in the previous term), profit totaled ¥1,471 million (compared to loss of ¥542
million in the previous term), and profit attributable to owners of parent totaled ¥1,464 million (compared toloss attributable to owners of parent of ¥547 million in the previous term).
Concerning year-end dividend for the business year under review, after taking into consideration the abovementioned business performance and the Company’s basic policy on profit distribution, the Company passed
a resolution at the board of directors meeting held on November 24, 2020 to pay a year-end dividend of ¥2.0
per share. Based on this decision, total dividends paid will be ¥256 million.

- 12 -

Adoption of the International Financial Reporting Standards (hereinafter referred to as “IFRS”)
The Group has applied IFRS since the fiscal year ended September 30, 2016 in place of previously used
Japanese GAAP, aiming for better convenience for all of the Group’s stakeholders, including shareholders
and investors in and outside Japan, while promoting actively its global business development.
In line with the above, while voluntary providing previously used “net sales” as a reference, the Group
discloses “revenue” as an indicator based on IFRS. The recording method of the revenue in the sale byadvertising agents, comprising a large part of the Digital Marketing Business, has been changed to record the
net amount, indicating only the margin. As a result, the amount of “revenue” has been reduced substantiallyfrom the amount of “net sales” previously used when the amounts are compared in the same transaction.
In addition, the Group discloses “non-GAAP operating profit,” an indicator that is not defined in IFRS on a
voluntary basis. Non-GAAP operating profit (or loss) is a profit indicator of constant business performance
determined by adjusting temporary factors such as impairment losses and gains or losses on the sales of noncurrent assets from the IFRS-based operating profit (or loss). The management of the Group deems that the
information is valuable for users of financial statements.
Revenue:

Up 6.8%

Non-GAAP operating profit:

Up 18.8%¥17,938 million¥2,452 million

Previous term: ¥16,796 million

Previous term: ¥2,065 million

Profit attributable to owners of parent:

Dividends per share:¥1,464 million¥2.0

Previous term: ¥(547) million

Previous term: ¥2.0

- 13 -

The overview of operating results by major business segment is as follows.
Digital Marketing Business Major business
The Digital Marketing Business provides comprehensive support for corporate digital transformation(DX) centered on digital marketing that includes the provision of solutions using data and AI startingwith the sales and operations of digital advertisements, as well as marketing support integrating online
and offline solutions through our business alliance with the Dentsu Group.
Through alliance operations with the Dentsu Group, the medium-term alliance operations have enjoyed a
year-on-year increase in the number of customers and the customer unit price, and the alliance has madesteady progress. Moreover, contracts are growing as a result of capturing demand created from growing
online consumption centered on advertisers of video games, manga, video streaming, EC and others. Brand
advertising volume in Japan has been steadily increasing.
Revenue: ¥15,807 million(Up 4.8% year on year)

Non-GAAP operating profit: ¥5,248 million(Up 9.9% year on year)

Media Platform Business Major business
The Media Platform Business consists of Manga Content Business, recruitment platform business,social contribution platform business, medical platform business, childcare platform business, andother businesses. The Manga Content Business engages in cultivating and supporting manga artists
and operates a manga distribution service through the manga application “GANMA!,” the Company’s
own media, for the purpose of planning and developing its own intellectual property (IP).
Advertising revenue of the manga application “GANMA!” decreased due to the significant impact of the
spread of COVID-19. On the other hand, cumulative downloads of “GANMA!” were approximately 14.61
million as of September 30, 2020, and subscription fees steadily increased. Furthermore, revenue increased
due to growth in businesses other than “GANMA!,” but the deficit expanded due to the impact of COVID19.
Non-GAAP operating loss: ¥956 million(Operating loss of ¥901 million
in the previous term)

Revenue: ¥2,487 million(Up 24.0% year on year)- 14 -

(2) Trends in financial position and profit and loss
 IFRS
Category

27th term(endedSeptember 30,
2017)

28th term(endedSeptember 30,
2018)

29th term(endedSeptember 30,
2019)

30th term(endedSeptember 30,
2020)

Revenue (Thousand yen)

14,702,191

15,272,040

16,795,505

17,937,745

Operating profit (Thousand yen)

2,247,808

976,788

183,133

2,274,396

Non-GAAP operating profit (Thousand yen)

2,324,552

1,011,156

2,064,899

2,452,413

Profit attributable to owners of parent(Thousand yen)

2,210,604

847,410(546,929)

1,464,342

Total assets (Thousand yen)

32,928,735

33,371,240

30,412,576

34,424,711

Basic earnings per share (Yen)

17.38

6.71

(4.33)

11.58

Dividends per share (Yen)

3.20

2.00

2.00

2.00

Return on equity (ROE) (%)

15.1

5.5

(3.6)

9.6

(Note) Figures in parentheses represent losses.

- 15 -

(3) Issues to be addressed
The Group has made the following updates to its Midterm Business Policies formulated in the fiscal
year ended September 30, 2020 to respond to changes in the business environment caused by COVID19. COVID-19 has led to large changes in both individual values and consumption behavior, and we
forecast that the online shift in consumption will progress going forward. Based on these changes in thebusiness environment, with “domain expansion” as a continued midterm theme, we aim to captureissues to handle the creation of a system to respond to the acceleration in DX (digital transformation)and to achieve sustainable growth and enhance corporate value over the medium to long term.
 Performance Target(Million yen)
Fiscal year ending
September 30, 2021
Plan

Fiscal year ending
September 30, 2022
Plan

Fiscal year ending
September 30, 2023
Plan

Revenue

20,00022,00024,000Non-GAAP operating profit

2,850

3,600

4,300

* The Group revises the Midterm Business Policies on a rolling basis each fiscal year.
In the Digital Marketing Business, we will strengthen our expansion into the EC advertising field andpromote an improved Group system in the data solutions field. Aiming to grow market share throughpromoting alliance operations with the Dentsu Group, we expect to achieve sustainable growth withincreases in both revenue and profit.
In the Media Platform Business, we will concentrate management resources in higher-growth fields,
focus on the user billing field, and strengthen business development in the D2C field to increase revenue
through growth of each business and to narrow the deficit with the objective of getting back into theblack after three years.
In our expansion into new business segments, we will work to capture DX demand through an industry
focus.
(4) Capital investments
Nothing noteworthy to report.
(5) Financing
Nothing noteworthy to report.
(6) Business transfers, absorption-type company split or incorporation-type company split
Not applicable.
(7) Business transfers from other companies
Not applicable.
(8) Succession of rights and obligations relating to other entities’ business as a result of absorption-typemerger or company split
Not applicable.
(9) Acquisition or disposal of shares, other equities or share options of other companies
Nothing noteworthy to report.

- 16 -

(10) Parent and significant subsidiaries
1) Relationship with the parent
Not applicable.
2) Significant subsidiaries
Capital or investment in capital(Thousand yen)

Ratio of voting right of theCompany

SEPTENI CO., LTD.

300,000

100.0%

Internet ad agency

COMICSMART INC.

250,000

100.0%

Manga Content BusinessCompany name

Major business(Notes)1. The Company owns a total of 32 consolidated subsidiaries, including the significant subsidiaries described above.
2. The Company does not own any subsidiaries that are specified wholly owned subsidiaries as provided in Article 118, item
4 of the Regulation for Enforcement of the Companies Act.

(11) Major offices (as of September 30, 2020)
Company name

Office nameLocation

The Company

Headquarters

Shinjuku-ku, TokyoSEPTENI CO., LTD.

Headquarters

Shinjuku-ku, TokyoCOMICSMART INC.

Headquarters

Shinjuku-ku, Tokyo(12) Employees (as of September 30, 2020)
Number of employees

Increase/decrease from the previous term-end

1,224

77 increase(Note) The number of employees indicates the number of working employees.

(13) Major creditors (as of September 30, 2020)
Creditor

Amount of loans(Million yen)Mizuho Bank, Ltd.

3,200

Sumitomo Mitsui Banking Corporation

500(14) Other important matters regarding the current status of the GroupNot applicable- 17 -

2. Status of the Company(1) Matters regarding shares (as of September 30, 2020)
1) Number of shares authorized

370,080,000 shares

2) Number of shares issued

138,916,500 shares (including 10,724,240 treasury shares)

3) Number of shareholders

9,766 (1,961 increase from the previous business year-end)

4) Major shareholders (top 10 shareholders, excluding treasury shares)
Name of shareholder

Number of shares (shares)

Shareholding ratio (%)

Dentsu Group Inc.

26,895,001

20.98

Village seven Co., Ltd.

14,719,000

11.48

Mamoru Nanamura

13,950,500

10.88

Custody Bank of Japan, Ltd. (Trust Account)

6,100,000

4.75

The Master Trust Bank of Japan, Ltd. (Trust Account)

4,935,000

3.84

NOMURA PB NOMINEES LIMITED OMNIBUS-MARGIN(CASHPB)

3,954,400

3.08

BNP PARIBAS SECURITIES SERVICESLUXEMBOURG/JASDEC/JANUS HENDERSON HORIZON
FUND

3,102,900

2.42

STATE STREET BANK AND TRUST COMPANY 505019

2,719,600

2.12

J.P. MORGAN SECURITIES PLC FOR AND ON BEHALF
OF ITS CLIENTS JPMSP RE CLIENT ASSETS-SEGR ACCT

2,236,300

1.74

Hiroshi Shimizu

2,010,000

1.56(Notes)1. The above shareholding ratios exclude treasury shares (10,724,240 shares).
2. The treasury shares do not include the Company’s shares owned by the officer remuneration BIP (Board Incentive Plan)trust (1,739,200 shares).

5) Other important matters regarding shares
Not applicable.

- 18 -

(2) Matters regarding share options, etc.
1) Status of share options, etc. held by officers of the Company (as of September 30, 2020)
Date of resolution of issue
Category

June 10, 2004

March 10, 2005

January 25, 2006

Director

Director

Director

Number of holders

1

1

2

Number of share options

60

45

120

Number of shares to beissued upon exercise of shareoptions

120,000 shares

90,000 shares

120,000 sharesClass of shares to be issued
upon exercise of shareoptions

Common shares

Common shares

Common shares

Without contribution

Without contribution

Without contribution

¥7

¥7

¥7

From June 29, 2004
to December 18, 2033

From March 16, 2005
to December 16, 2034

From February 1, 2006
to December 20, 2035

Share options in share-based
payment arrangement

Share options in share-based
payment arrangement

Share options in share-based
payment arrangement

Issue priceAmount to be paid per shareupon exercise of shareoptions
Exercise period of shareoptions
Remarks(Notes)
1. Share options are not granted to outside directors.
2. As the Company implemented share splits, the number of shares and issue price provided above were adjusted accordingly.
The share splits for which adjustments were made are listed below.
(1) Share split at a ratio of two shares per common share on May 20, 2005
(2) Share split at a ratio of 200 shares per common share on October 1, 2013(3) Share split at a ratio of five shares per common share on October 1, 20162) Status of share options, etc. delivered to employees, etc. during the business year under review
Not applicable.
3) Other important matters regarding share options, etc.
Not applicable.

- 19 -

(3) Matters regarding company officers (as of September 30, 2020)
1) Directors and company auditors
Position and duties

Name

Representative Director
Group President and Chief
Executive Officer

Koki Sato

Representative Director
Group Senior Executive
Officer

Isamu Ueno

Director
Group Senior Executive
OfficerTadahiro Matsuda

Important positions held at other companies

Director

Etsuko Okajima

CEO, ProNova Inc.
External Director, MARUI GROUP Co., Ltd.
Outside Director, euglena Co., Ltd.
External Director, Money Forward, Inc.

Director

Yusuke Asakura

Representative Director, Signifiant Inc.

Director

Yoshiki Ishikawa

Director, Cancer Scan Co., Ltd.
Director, Campus for H Inc.
External Director (Audit & Supervisory Committee Member),
Sansan, Inc.
External Director, Gaiax Co. Ltd.

Internal Company Auditor

Nobuo Kojima

Internal Company Auditor

Muneyoshi Nomura

Company Auditor

Mamoru Furushima

Representative, Furushima Law & Accounting OfficeOutside Director (Audit and Supervisory Committee Member),
Nippon Chemical Industrial Co., Ltd.
Outside Director (Audit & Supervisory Committee Member), B-Lot
Company Limited

Company Auditor

Takeshi Okuyama

Partner, Mori Hamada & Matsumoto2) Directors who resigned during the business year under review
Name

Tatsuya Kimura

Date of retirement

August 31, 2020

Reason for retirement

Position and duties at the Company andimportant positions at other companies at thetime of retirement

Resignation

Outside Director
Professor, Waseda University Graduate Schoolof Business and Finance(Notes)
1. Directors Etsuko Okajima, Yusuke Asakura and Yoshiki Ishikawa are outside directors.
2. Company auditors Mamoru Furushima and Takeshi Okuyama are outside company auditors.
3. Company auditor Mamoru Furushima is a certified public accountant and has a respectable degree of knowledge in financeand accounting.
4. The Company has designated directors Etsuko Okajima, Yusuke Asakura and Yoshiki Ishikawa as independent officers inaccordance with the rules of Tokyo Stock Exchange, Inc. and has submitted a notice of designation to the Tokyo Stock
Exchange.
5. The Company has entered into agreements with all outside directors and outside company auditors that limit their liability
for damages as set forth in Article 423, paragraph 1 of the Companies Act. The limit on liability for damages under said
agreement is ¥5 million or the minimum liability amount provided for by Article 425, paragraph 1 of the Companies Act,
whichever is higher. In addition, the Company had entered into the same agreement with Tatsuya Kimura, who retired fromhis position of outside director on August 31, 2020.

3) Amount of remunerations to directors and company auditors
Number ofpayees

Officers’
remunerations

Director

7¥158,966 thousand

Including ¥39,200 thousand for four outside directors

Company Auditor

5¥43,800 thousand

Including ¥12,600 thousand for three outside company auditors

Category

Remarks- 20 -

(Notes)
1. Of all directors, part of remunerations, etc. for serving concurrently as directors of subsidiaries of the Company are borneby the subsidiaries as expenses. Amount of remunerations, etc. to directors, combining the amount borne by the Company
above and the amount borne by the subsidiaries, is ¥194,852 thousand.
2. The number of payees includes one outside director who retired on August 31, 2020 and one outside company auditor who
retired at the close of the 29th Ordinary General Meeting of Shareholders held on December 18, 2019.
3. In addition to the above amount of remunerations, etc., based on the resolution for discontinuation payments with theelimination of the officer retirement benefit system approved and adopted at the 13th Ordinary General Meeting of
Shareholders held on December 18, 2003, we have paid ¥266 thousand in officer retirement benefits to one company auditor
who retired at the close of the 29th Ordinary General Meeting of Shareholders held on December 18, 2019.

4) Outside officers(a) Relationships between the Company and other companies where outside officers hold important
positionsCategory
Director

Director

Director

Director

Name
Tatsuya Kimura

Etsuko Okajima

Yusuke Asakura

Yoshiki Ishikawa

Company Auditor Mamoru FurushimaCompany Auditor Takeshi Okuyama

Important positions held at other companies

Relationship with the Company

Professor, Waseda University Graduate
School of Business and Finance

There is no business relationship.

CEO, ProNova Inc.

There is no important business
relationship.

External Director, MARUI GROUP Co., Ltd. There is no business relationship.
Outside Director, euglena Co., Ltd.

There is no business relationship.

External Director, Money Forward, Inc.

There is no business relationship.

Representative Director, Signifiant Inc.

There is no business relationship.

Director, Cancer Scan Co., Ltd.

There is no business relationship.

Director, Campus for H Inc.

There is no business relationship.

External Director (Audit & Supervisory
Committee Member), Sansan, Inc.

There is no business relationship.

External Director, Gaiax Co. Ltd.

There is no business relationship.

Representative, Furushima Law &Accounting Office

There is no business relationship.

Outside Director (Audit and Supervisory
Committee Member), Nippon Chemical
Industrial Co., Ltd.

There is no business relationship.

Outside Director (Audit & Supervisory
Committee Member), B-Lot Company
Limited

There is no business relationship.

Partner, Mori Hamada & Matsumoto

There is no business relationship.

(Note) The relationship with the Company described for Director Tatsuya Kimura describes the status that existed before he
retired from his position on August 31, 2020.

(b) Major activities in the business year under review
Category

Director

Director

Name

Major activities

Tatsuya Kimura

During the business year under review, Mr. Kimura attended all 12 board of
directors meetings held before he retired from his position on August 31, 2020,
where he made comments primarily from his professional viewpoints as an
academic. Moreover, he has expressed opinions, etc. appropriately as a memberof the Nomination Advisory Committee, which is a voluntary advisoryorganization of the Company.

Etsuko Okajima

Ms. Okajima attended all board of directors meetings held during the businessyear under review, where she made comments primarily informed by her
experience and insight as a corporate manager. Moreover, as the chairperson of
the Nomination Advisory Committee, which is a voluntary advisory organizationof the Company, she has led deliberations on nomination of directors andcompiled proposed recommendations as the committee.

- 21 -

CategoryDirector

Director

Name

Major activities

Yusuke Asakura

Mr. Asakura attended all board of directors meetings held during the businessyear under review, where he made comments primarily from his professional
viewpoints as a corporate manager, as a researcher and as an investor. Moreover,he has expressed opinions appropriately as a member of the Nomination
Advisory Committee, which is a voluntary advisory organization of theCompany.

Yoshiki Ishikawa

During the business year under review, Mr. Ishikawa attended all 10 board of
directors meetings held after he assumed his position on December 18, 2019,
where he made comments primarily from his professional viewpoints as apreventive medicine researcher and as a founder of a company using methods
based on behavioral science. Moreover, he has expressed opinions appropriately
as a member of the Nomination Advisory Committee, which is a voluntary
advisory organization of the Company.

Company Auditor Mamoru Furushima

Mr. Furushima attended all board of directors meetings and all board of company
auditors meetings held during the business year under review, where he madecomments primarily from his professional viewpoints as a certified public
accountant and as a lawyer.

Company Auditor Takeshi Okuyama

During the business year under review, Mr. Okuyama attended 9 of 10 board of
directors meetings and 9 of 10 board of company auditors meetings held after heassumed his position on December 18, 2019, where he made comments primarily
from his professional viewpoints as a lawyer.

- 22 -

(4) Financial auditor (as of September 30, 2020)
1) Name
Deloitte Touche Tohmatsu LLC
2) Amount of remuneration, etc.
(a) Remuneration for audit services set forth in Article 2, paragraph 1 of the Certificated Public
Accountants Act to be paid by the Company¥70,773 thousand(b) Total amount of cash and other economic benefits to be paid to the financial auditor by the Company
and its subsidiaries¥70,773 thousand(Notes)1. The audit contract between the Company and the financial auditor does not distinguish between remuneration paid for theaudit conducted in accordance with the Companies Act and remuneration paid for the audit conducted in accordance with
the Financial Instruments and Exchange Act. Accordingly, the amount above is the aggregate amount.
2. The board of company auditors, based upon the “Practical Guidelines for Cooperation with Financial Auditors” released by
the Japan Audit & Supervisory Board Members Association, conducts confirmation of the auditing plans of the financial
auditor, the status of execution of audit, the grounds for calculation of remuneration estimates and other matters, and having
investigated these, gives consent to remuneration, etc. for the financial auditor in accordance with Article 399, paragraph 1of the Companies Act.
3. The amount of remuneration based on audit certification work in the fiscal year under review includes ¥24,020 thousand in
remuneration for audit certification work related to corrections of the Company’s financial statements for previous fiscal
years based on the Financial Instruments and Exchange Act (of which, ¥9,000 thousand was for the previous financial
auditor, Ernst & Young ShinNihon LLC).

3) Details of limited liability agreement
The Company has entered into an agreement with the financial auditor that limits the liability thereof
for damages as set forth in Article 423, paragraph 1 of the Companies Act. The limit on liability fordamages under said agreement is ¥30 million or the minimum liability amount provided for by Article
425, paragraph 1 of the Companies Act, whichever is higher.
4) Policy for determining of the dismissal or non-reappointment of financial auditor
In the event that there is an obstacle to the execution of duties by the financial auditor, or whenotherwise deeming the action necessary, the board of company auditors will determine the content ofan agenda to be proposed to the General Meeting of Shareholders regarding the dismissal or nonreappointment of the financial auditor. In addition, when any of the matters prescribed in the items in
Article 340, paragraph 1 of the Companies Act are applicable to the financial auditor, the board ofcompany auditors will dismiss the financial auditor with the unanimous consent of the company
auditors.
5) Business suspension order to which the financial auditor was subjected during the past two years
Nothing noteworthy to report.

- 23 -

3. Structure and policy of the Company(1) Policy regarding the determination of dividends of surplus, etc.
With regard to the dividends of surplus, we will consider our consolidated earnings performance foreach business year, the need to fortify our financial position, the Group’s forward-looking businessstrategy, and other factors while at the same time endeavoring to maintain a dividend payout ratio ofaround 15% of profit attributable to owners of parent and provide a return of profit within the limit ofthe distributable amount of the Company. Furthermore, taking into consideration the importance ofcontinuity and stability of dividend payments, we have established a general principle to provide aminimum annual dividend of ¥2 per share to follow a basic practice of providing an appropriate levelof profit distribution in accordance with the business growth. In addition, we will endeavor to utilize
our internal reserves for investments in training personnel, optimizing and reinvigorating our existing
businesses, and capturing new business areas that have the potential for high growth and profitability.
Furthermore, as for the acquisition of treasury shares, the Company shall implement it appropriately
while taking into account the financial status, trend of the share price and other factors, in order toincrease shareholder returns through improvement of the capital efficiency as well as to pursue the agile
capital policy that responds to changes in the management environment.
Based on these policies, the Company will pay a year-end dividend of ¥2.0 per share for the businessyear under review.
(2) Systems to ensure the properness of operations
1) Systems to ensure the properness of operations of the corporate group comprised of the Company andits subsidiaries(a) The corporate group comprised of the Company and its subsidiaries (hereinafter referred to as the“Group”) is managed under a holding company structure in which the Company, which is the ultimate
parent company, is a holding company and its subsidiaries are operating companies. By separating
the managerial function from the function of executing its individual businesses, the Group shallwork to facilitate the delegation of authority to its operating subsidiaries and strengthen the
Company’s function of monitoring the Group’s businesses.
(b) The Company’s function of managing the business of its operating subsidiaries shall be implemented
effectively and efficiently based on the execution of its direct and indirect shareholders’ rights andunder the “Basic Agreement on Business Management Services for the Group” entered into with theoperating subsidiaries.
(c) The Company shall establish principles, regulations, guidelines and others common to the Group to
ensure efficient and proper execution of duties by the Group’s directors, Group Executive Officers
and employees (hereinafter referred to as “officers and employees”).
(d) The Company shall clarify a system for reporting any situations concerning execution of duties by
the Group’s officers and employees such as the state of the business and financial results to theCompany’s board of directors or the Group Management Meeting. In cases where certain significant
decisions are made, prior approval of the Company’s board of directors or the Group Management
Meeting shall be required.
(e) The Internal Auditing Office of the Company shall provide assurance operations (auditing andguarantee function) and consulting operations (advisory and guidance function) from an independentand objective position to the Group, and examine and assess the status of ensuring the properness ofoperations of the entire Group.
2) Systems to ensure compliance with laws and regulations and the Articles of Incorporation by directors
and employees when executing their duties(a) Officers and employees of the Group shall recognize compliance with laws and regulations and social
ethics as being one of basic points for the Group to fulfill its corporate social responsibilities (CSR)
and achieve sustainable growth, and practice the compliance through the Group’s CSR activities.
(b) The Group’s corporate philosophy and code of conduct shall call for compliance with laws andregulations and social ethics and adopt it as the Group’s basic policy for the business operation.

- 24 -

(c) Directors and Group Executive Officers of the Group shall practice and encourage the compliancewith laws and regulations and social ethics proactively.
(d) Directors and Group Executive Officers shall assign authorities for execution of duties appropriately
and clearly and execute the duties in accordance with regulations including the regulations of theboard of directors and the regulations of the Executive Officers.
(e) In the event that directors and Group Executive Officers find a violation of laws and regulations orother important facts regarding compliance, they shall report to the Company’s board of directors or
the Group Management Meeting without delay and take corrective measures.
(f) The Company shall conduct regular compliance trainings for the Group’s officers and employees
continuously and have the Internal Auditing Office, which is directly under Group President andChief Executive Officer, perform internal audits of the Group.
(g) In order to respond appropriately to reporting or consultation from the Group’s officers andemployees on organizational or individual violations of laws and regulations, detect and amend
inappropriate actions and others early, and strengthen the compliance, the Company shall establish awhistleblower hotline with external lawyers being as the person who directly receives a report.
3) Systems for the storage and management of information regarding the execution of duties by directors(a) With regard to information security of the Group, the Company shall set the “Basic Policy on
Information Security,” develop internal regulations regarding information security in line with laws
and regulations, and establish the “Security Management Office” to oversee and manage information
security in an integrated and effective manner under the common policy as the Group.
(b) With regard to documents, forms and other records related to duties of the Group’s officers andemployees (including electromagnetic records), the Company shall develop internal regulations
regarding document management in line with laws and regulations, and manage and store such
documents in an integrated and effective manner under the common policy as the Group.
(c) With regard to personal information management of the Group, the Company shall establish “Privacy
Policy,” develop internal regulations regarding personal information security in line with laws andregulations, and manage such information in an integrated and effective manner under the common
policy as the Group.
(d) With regard to documents, forms and other records related to duties of the Group’s officers andemployees (including electromagnetic records), the Company shall establish a system to ensure that
directors and company auditors can have access to these records at any time.
(e) With regard to insider information on shares of listed companies, the Company shall establish the“Group Regulations on Prevention of Insider Trading,” manage such information in an integrated
and effective manner under the common policy as the Group, and communicate it to the division in
charge of information disclosure appropriately.
(f) When storing and managing information through electromagnetic records, the Company shall strive
to gather the up-to-date information on threats for electronic information to build the latest system
for storage and management possible.
4) Regulations and other systems for managing the risk of loss(a) In order to recognize significant events that may affect the business management of the Group,
identify, analyze and assess risks that may harm the development and growth of the business, andmake responses to the risks such as risk aversion, mitigation, transfer and others, the Company shallestablish the “Group Risk Management Regulations” and set up the “Group Risk Management
Committee” as a body to oversee and manage such risks in an integrated and effective manner under
the common policy as the Group.
(b) With regard to usual risk management of the Group, each operating subsidiary or division shall makea risk assessment and response to the risk, and the Group Risk Management Committee shall receivea report from the operating subsidiary or division and oversee the risk management of the Group.
(c) In case of an emergency, the “Crisis Management Headquarters” with the Group President and Chief
Executive Officer as its head shall oversee the risk management of the Group.
- 25 -

(d) Risk management policies of the entire Group as well as assessment of and responses to the risks
related to strategic decision-making such as management strategy and merger and acquisition shallbe treated as the exclusive prerogatives of the Company’s board of directors. In making thesemanagement decisions, the Company shall assess the risks appropriately.
(e) The Company shall establish a reporting system for any event or indication that may affect the Groupsignificantly in cases where risks have become apparent, so that its board of directors can figure out
such an event or indication in advance.
5) Systems to ensure the efficient execution of duties by directors(a) The Company’s board of directors shall make decisions on matters stipulated in laws and regulations
and the Articles of Incorporation and the execution of important operations, and transfer its authority
to Group Executive Officers with regard to the execution of other operations pursuant to the“regulations of the board of directors” and the “Resolution and Entrustment Criteria” to ensureswiftness and efficiency of the execution of duties.
(b) Multiple subsidiary groups that are part of the same chain of command in the Group shall be deemed
as companies without board of directors in terms of institutional design under the Companies Act inorder to promote the swiftness and efficiency of the decision-making process. Their information shallbe consolidated by the Company’s board of directors or the management meeting of the coresubsidiary to uniform the decision-making process.
(c) Directors and Group Executive Officers shall execute duties efficiently based on the Midterm
Business Policies and goals and annual budget set by the Company’s board of directors, as well asreport the progress of these policies and goals and budget to the Company’s board of directors or theGroup Management Meeting and implement necessary improvement measures.
(d) In cases where subsidiaries make significant decisions, approval of the Company’s board of directors
or the Group Management Meeting shall be required, and coordination shall be made for the efficient
resource allocation avoiding overlaps of business activities and capital investments between the
Company and subsidiaries or between subsidiaries.
6) Matters relating to employees that assist the company auditors upon the request of such company
auditors, independence of the relevant employees from directors and effectiveness of directions given
to such employees of the company auditors to be ensured(a) Employees that assist the company auditors shall be assigned at the request of company auditors.
(b) Employees that assist the company auditors shall not concurrently serve other duties and posts.
(c) Matters related to personnel evaluations, personnel transfers, disciplinary actions, etc. for employeesthat assist the company auditors shall be conducted separately from the other employees anddetermined with the consent of the company auditors.
7) Systems for enabling directors and employees to make reports to company auditors and systems for
ensuring that the persons who made such reports shall not be treated disadvantageously on the grounds
that they have submitted the said reports(a) Company auditors of the Company may attend the board of directors meetings of the Company,
Group Management Meeting and other important meetings, and request explanations from officers
and employees as necessary.
(b) In cases where company auditors request reports on operations or inspections of documents such as
minutes, approval documents and accounting books, officers and employees of the Group shall
respond to the request in a prompt and appropriate manner.
(c) In the event that officers and employees of the Group detect any facts or situations that may causesignificant damage to the companies, such officers and employees shall immediately report thematters to company auditors.
(d) The Company shall establish regulations for prohibiting removal from duty, discharge and any otherdisadvantageous treatment to officers and employees of the Group on the grounds that the officers
and employees made a report to company auditors, and make the regulations well known.

- 26 -

(e) All of the internal audit reports conducted by the Internal Auditing Office shall be reported to theboard of company auditors.
8) Matters relating to policies on procedures for prepayment or reimbursement of expenses arising fromthe execution of duties by company auditors and processing of other expenses or obligations arisingfrom the execution of duties by company auditors
Expenses that are considered necessary in the execution of duties of company auditors shall bebudgeted in advance. In cases where company auditors request payment for reasonable expenses forthe execution of their duties, the Company shall accept the request.
9) Systems for ensuring the effective functioning of audits by company auditors(a) The Company shall ensure that it provides its company auditors with opportunities to sufficiently
exchange opinions with the Group President and Chief Executive Officer, outside directors, financial
auditor and internal auditors.
(b) The Company shall establish a system that allows its company auditors to perform audits equivalent
to audits of the Company by the company auditors under individual agreements between the
Company and its subsidiaries, in addition to investigations of subsidiaries under laws and regulations,so that the company auditors can audit the entire Group effectively and efficiently as needed.
(3) Overview of status of management of systems to ensure the properness of operations
1) Information on compliance and risk management
With regard to the status of compliance and risk management among the entire Group, the Company
shall regularly hold the meeting of the Group Risk Management Committee and share the information
relating to the correspondence status, etc.
Regular compliance trainings for officers and employees have been provided to raise the employee’s
awareness on compliance. In addition, the Company established the internal reporting system for theGroup and informed all employees about it.
2) Information on the execution of duties by directors
The board of directors comprises of six directors, including three outside directors. In addition, four
company auditors including two outside company auditors also attend the meetings of the board of
directors. During the business year under review, the board of directors held meetings 13 times to ensure
the execution of duties in compliance with laws and regulations and the Articles of Incorporation bymeans of the managerial decision-making through full and thorough discussions and other measures.
3) Information on the execution of duties by company auditors
The board of company auditors comprises of four company auditors, including two outside company
auditors. During the business year under review, the board of company auditors held meetings 14 times
to mainly receive reports from internal company auditor on the status of operations of the Company andexchange opinions mutually among company auditors.
In addition to that, company auditors shall provide supervision of execution of duties by directors byattending the important meetings including the meeting of the board of directors and GroupManagement Meeting, and regularly exchange information with the Group President and Chief
Executive Officer, financial auditor and Internal Auditing Office.
(Note) Figures in this Business Report are rounded to the nearest unit.

- 27 -

Consolidated Financial Statements
Consolidated Statement of Financial Position(Thousand yen)Account
AssetsCurrent assets
Cash and cash equivalents
Trade receivables
Inventories
Other financial assets
Other current assets

30th term(At September
30, 2020)(Reference)

29th term(At September
30, 2019)

Account
Liabilities and Equity
Liabilities
Current liabilities
Trade payables
Other financial liabilities
Income taxes payable
Other current liabilities

14,080,864
12,747,068
45,372
14,520485,044

14,488,431
10,032,303
19,870102,853489,319

27,372,868

25,132,776

Property, plant andequipment

319,851

382,685

Right-of-use assets

1,007,726–

Intangible assets

83,577

112,545

Investments accounted forusing equity method

963,570

887,521

Other financial assets
Other non-current assets
Deferred tax assets

3,546,126
9,528
1,121,465

2,990,742
12,725893,582

Equity attributable toowners of parent

Total non-current assets

7,051,843

5,279,800

Total current assets
Non-current assets

34,424,711

30,412,576(Note) Figures are rounded to the nearest unit.

- 28 -(At September
30, 2020)(Reference)

29th term(At September
30, 2019)

11,053,053
2,375,975
477,315
1,407,583

8,799,475
1,536,893
229,836
1,162,809

15,313,926

11,729,013

3,121,500
177,928

3,765,250
109,359

3,299,428

3,874,609

18,613,354

15,603,622

Share capital

2,125,384

2,125,314

Capital surplus
Treasury shares
Retained earnings
Other components ofequity3,664,788(1,691,842)
11,971,086

3,664,788(1,691,842)
10,750,768(276,037)(52,914)

15,793,379

14,796,114

17,978

12,840Total equity

15,811,357

14,808,954

Total liabilities and equity

34,424,711

30,412,576

Total current liabilities
Non-current liabilities
Other financial liabilities
Provisions
Total non-current
liabilities
Total liabilities
EquityTotal equity attributableto owners of parent
Non-controlling interests
Total assets

30th termConsolidated Statement of Profit or Loss
30th term(From October 1, 2019
to September 30, 2020)

Account(Thousand yen)
(Reference)
29th term(From October 1, 2018
to September 30, 2019)

Revenue
Cost of sales

17,937,745
3,341,576

16,795,505
2,832,790

Gross profit
Selling, general and administrative expenses
Other income
Other expenses

14,596,169
12,155,667
13,063
179,169

13,962,715
11,923,796
41,337
1,897,123

Operating profit
Finance income
Finance costs
Share of profit (loss) of investments accounted for using
equity method

2,274,396
17,85180,385

183,133
154,334
80,494113,258(338,283)

Profit (loss) before tax
Income tax expense

2,325,120
854,462(81,310)460,213

Profit (loss)

1,470,658(541,523)

Profit (loss) attributable to:
Owners of parent
Non-controlling interests

1,464,342
6,316(546,929)
5,406

Total

1,470,658(541,523)(Note) Figures are rounded to the nearest unit.

- 29 -

(Reference) Consolidated Statement of Comprehensive Income

Account
Profit (loss)
Other comprehensive income
Items that will not be reclassified to profit or loss
Net changes in financial assets measured at fair value
through other comprehensive income
Items that may be reclassified to profit or loss
Exchange differences on translation of foreign operations
Cash flow hedges
Share of other comprehensive income of entities accounted
for using equity method

30th term(From October 1, 2019
to September 30, 2020)
1,470,658(Thousand yen)
29th term(From October 1, 2018
to September 30, 2019)(541,523)(209,500)

59,516(2,743)
11,016(131,634)(2,900)–(1,717)

Total other comprehensive income, net of tax(201,227)(76,735)

Total comprehensive income

1,269,431(618,258)

Comprehensive income attributable to:
Owners of parent
Non-controlling interests

1,263,115
6,316(623,664)
5,406

Comprehensive income

1,269,431(618,258)(Note) Figures are rounded to the nearest unit.

- 30 -

Consolidated Statement of Changes in Equity
30th term (From October 1, 2019 to September 30, 2020)(Thousand yen)
Equity attributable to owners of parent

Balance at October 1,
2019
Cumulative effect ofaccounting change
Restated balance
ProfitOther comprehensive
incomeTotal comprehensive
incomeIssuance of newsharesDividends of surplus
Purchase and disposalof treasury shares
Changes in ownershipinterests in
subsidiaries that resultin loss of control
Other
Total transactions
with owners
Balance at September
30, 2020

Total

Noncontrollinginterests

Total equity(52,914)

14,796,114

12,84014,808,954(13,035)–(13,035)–(13,035)(1,691,842)

10,737,733(52,914)

14,783,079

12,84014,795,919––

1,464,342–

1,464,342

6,316

1,470,658

–

–

–

–

(201,227)(201,227)–(201,227)–––

1,464,342(201,227)

1,263,115

6,316

1,269,431

70

–

–

–

–

70

–

70

–

–

–

(252,886)–(252,886)–(252,886)

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

21,897(21,896)1(1,178)(1,177)70––(230,989)(21,896)(252,815)(1,178)(253,993)

2,125,384

3,664,788(1,691,842)

11,971,086(276,037)

15,793,379

17,97815,811,357

Share capital

CapitalsurplusTreasurysharesRetainedearnings

Other
componentsof equity

2,125,314

3,664,788(1,691,842)

10,750,768

–

–

–

2,125,314

3,664,788–(Note) Figures are rounded to the nearest unit.

- 31 -

(Reference) 29th term (From October 1, 2018 to September 30, 2019)(Thousand yen)
Equity attributable to owners of parent

Balance at October 1,
2018
Profit (loss)
Other comprehensive
incomeTotal comprehensive
incomeIssuance of newsharesDividends of surplus
Purchase and disposalof treasury shares
Changes in ownershipinterests in
subsidiaries that resultin loss of control
Other
Total transactions
with owners
Balance at September
30, 2019

Noncontrollinginterests

Total equity

15,672,237

57,797

15,730,034–(546,929)

5,406(541,523)–(76,735)(76,735)–(76,735)–(546,929)(76,735)(623,664)

5,406(618,258)

1,765

–

–

(6,245)

350

–

350

–

–

–

(252,786)–(252,786)–(252,786)

–

–

(23)

–

–

(23)

–

(23)

–

–

–

–

–

–

(50,363)(50,363)–––

57,178(57,178)

–

–

–

4,830

1,765

(23)

(195,608)(63,423)(252,459)(50,363)(302,822)

2,125,314

3,664,788(1,691,842)

10,750,768(52,914)

14,796,114

12,84014,808,954

Share capital

CapitalsurplusTreasurysharesRetainedearnings

Other
componentsof equity

2,120,484

3,663,023(1,691,819)

11,493,305

87,244–––(546,929)

–

–

–

–

–

4,830

(Note) Figures are rounded to the nearest unit.

- 32 -

Total

Non-consolidated Financial Statements
Non-consolidated Balance Sheet
Account
AssetsCurrent assets
Cash and deposits
Accounts receivable - trade
Supplies
Prepaid expenses
Accounts receivable - other
Short-term loans receivable fromsubsidiaries and associates
Non-current assets
Property, plant and equipment
Buildings
Tools, furniture and fixtures
Other

30th term(At September 30, 2020)

8,698,720
6,083,848
347,080
1,503
127,687
1,628,601

Account
Liabilities
Current liabilities(Thousand yen)
30th term(At September 30, 2020)

1,285,966

Current portion of long-termborrowings

600,000

Accounts payable - otherAccrued expenses
Income taxes payable

301,643
29,171
276,848

510,000

Deposits received

12,961

6,297,250
140,399
59,97867,80912,611

Provision for bonuses
Other
Non-current liabilities
Long-term borrowings
Other

22,75042,5902,641,733
2,600,000
41,733

Intangible assets
Software
Other
Investments and other assets
Investment securities

85,34580,9184,427
6,071,505
2,268,769

3,927,699

Shares of subsidiaries andassociates

1,844,763

Long-term loans receivable fromsubsidiaries and associates

1,200,000

Leasehold and guarantee deposits
Deferred tax assets
Other
Allowance for doubtful accounts

774,909
43,232
8,400(68,570)

Total liabilities
Net Assets
Shareholders’ equity
Share capital
Capital surplus
Legal capital surplus
Other capital surplus
Retained earnings
Legal retained earnings
Other retained earnings
General reserve
Retained earnings brought
forwardTreasury shares
Valuation and translation
adjustments

Total assets

14,995,971(Note) Figures are rounded down to the nearest unit.

- 33 -

11,093,183
2,125,384
2,720,904
2,533,932
186,9717,938,737
70,867
7,867,870
400,000
7,467,870(1,691,841)(24,912)Valuation difference on
available-for-sale securities(717)

Deferred gains or losses onhedges(24,194)

Total net assets

11,068,271

Total liabilities andnet assets

14,995,971

Non-consolidated Statement of Income(Thousand yen)
30th term(From October 1, 2019
to September 30, 2020)

Account
Operating revenue
Operating expenses

2,765,909
1,847,316

Operating profit
Non-operating income
Interest income
Dividend income
Gain on valuation of investment securities
Other

918,592
155,108
3,370
37,209113,852676

Non-operating expenses
Interest expenses
Loss on valuation of investment securities
Listing expenses
Commission expenses
Other

169,659
28,027104,077
20,843
16,491
219

Ordinary profit
Extraordinary income
Gain on sales of investment securities

904,042
31,56031,560Extraordinary losses
Loss on valuation of shares of subsidiaries and associates
Loss on valuation of investment securities
Other

1,049,616
662,838
290,677
96,100Loss before income taxes
Income taxes - current
Income taxes - deferred

114,014(56,922)
3,111

Loss

60,203(Note) Figures are rounded down to the nearest unit.

- 34 -

Non-consolidated Statement of Changes in Equity
30th term (From October 1, 2019 to September 30, 2020)(Thousand yen)
Capital surplus
Share capital Legal capital Other capital Total capitalsurplussurplussurpluses
Balance at
beginning of
periodChanges during
periodIssuance of newsharesDividends ofsurplusLoss
Net changes in
items other thanshareholders’equityTotal changes
during period
Balance at end of
periodShareholders’ equity
Retained earnings
Other retained earnings
Legal
Retainedretained
Generalearnings
earnings
reservebrought
forwardValuation and translation adjustments

Treasuryshares(1,691,841) 11,409,681

2,125,314

2,533,932

186,971

2,720,904

70,867400,000

7,784,438

8,255,305

70

–

–

–

–

–

–

–

–

–

–

–

–

–

–

(256,364)(256,364)

–

–

–

–

–

–

(60,203)(60,203)

–

–

–

–

–

–

–

–

70

–

–

–

–

–

(316,568)(316,568)

2,125,384

2,533,932

186,971

2,720,904

70,867400,000

7,467,870

7,938,737(Note) Figures are rounded down to the nearest unit.

- 35 -

Valuation
DeferredTotal
difference on
gains orshareholders’ availablelosses on
equityfor-salehedgessecurities

Total
retainedearnings

Totalvaluationandtranslation
adjustments

Total net
assets(83)(35,210)(35,293) 11,374,388

70

–

–

–

70

–

(256,364)–––(256,364)–(60,203)–––(60,203)

–

–

(634)

11,015

10,381

10,381–(316,498)(634)

11,015

10,381(306,116)(1,691,841) 11,093,183(717)(24,194)(24,912) 11,068,271

Board of Company Auditors’ Report

Audit Report
With respect to the directors’ performance of their duties during the 30th business year from October 1, 2019
to September 30, 2020, the board of company auditors has prepared this audit report after deliberations basedon the audit reports prepared by each of the company auditors, and hereby reports as follows:
1. Method and Contents of Audit by the Company Auditors and the Board of Company Auditors(1) The board of company auditors has established the audit policies, allocation of duties, etc. and received
a report from each of the company auditors regarding the status of implementation of their audits andresults thereof. In addition, the board of company auditors has received reports from the directors, etc.,
and the financial auditor regarding the status of performance of their duties, and requested explanations
as necessary.
(2) In conformity with the audit regulations for company auditors established by the board of company
auditors, and in accordance with the audit policies and allocation of duties, etc., each of the company
auditors endeavored to facilitate a mutual understanding with the directors, the Internal Audit Divisionand other employees, etc., endeavored to collect information, maintain and improve the audit
environment, and conducted the audits based on the methods described below.
1) Each of the company auditors has attended the meetings of the board of directors and other important
meetings, received reports on the status of performance of duties from the directors and employees,
etc., and requested explanations as necessary, examined important approval/decision documents, andinspected the status of the corporate affairs and assets. Also, with respect to the subsidiaries, each of
the company auditors endeavored to facilitate a mutual understanding and exchanged information withthe directors and company auditors, etc. of each subsidiary and received from subsidiaries reports on
their respective business as necessary.
2) Each of the company auditors monitored and inspected the status of the establishment and operationof the board of directors’ resolutions regarding the development and maintenance of the system toensure that the directors’ performance of their duties complied with all laws, regulations and the
Articles of Incorporation of the Company and other systems that are set forth in Article 100, paragraphs
1 and 3 of the Regulation for Enforcement of the Companies Act as being necessary for ensuring theappropriateness of the corporate affairs of the corporate group comprised of a joint stock company andits subsidiaries, and the systems (internal control systems) based on such resolutions. With respect tothe internal control related to the financial report, the board of company auditors received reports
regarding the assessment and status of their audits from the directors, etc. and Deloitte Touche
Tohmatsu LLC, and also requested explanations when necessary.
3) Each of the company auditors monitored and verified whether the financial auditor maintained its
independence and properly conducted its audit, received a report from the financial auditor on thestatus of its performance of duties, and requested explanations as necessary. Each of the company
auditors was notified by the financial auditor that it had established a “system to ensure that the duties
are performed appropriately” (the matters listed in the items of Article 131 of the Regulation on
Corporate Accounting) in accordance with the “Quality Management Standards Regarding Audits”(Business Accounting Council, October 28, 2005), and requested explanations as necessary.
Based on the above-described methods, each of the company auditors examined the business report and the
supplementary schedules, the Non-consolidated Financial Statements (Non-consolidated Balance Sheet,
Non-consolidated Statement of Income, Non-consolidated Statement of Changes in Equity and Notes to Nonconsolidated Financial Statements) and the supplementary schedules thereof, as well as the Consolidated
Financial Statements (Consolidated Statement of Financial Position, Consolidated Statement of Profit or Loss,
Consolidated Statement of Changes in Equity and Notes to Consolidated Financial Statements, all preparedby omitting some disclosure items required under IFRS as provided for by Article 120, the latter part ofparagraph 1 of the Regulation on Corporate Accounting), for the business year under review.

- 36 -

2. Results of Audit(1) Results of Audit of Business Report, etc.
1) We acknowledge that the business report and the supplementary schedules thereof fairly present thestatus of the Company in conformity with the applicable laws and regulations and the Articles ofIncorporation of the Company.
2) We acknowledge that no misconduct or material fact constituting a violation of any law or regulationor the Articles of Incorporation of the Company was found with respect to the directors’ performanceof their duties.
3) We acknowledge that the board of directors’ resolutions with respect to the internal control systems
are appropriate. We did not find any material matter to be mentioned with respect to the content of theBusiness Report or the directors’ performance of their duties concerning the internal control systems,
including the internal control related to the financial report.
(2) Results of Audit of Non-consolidated Financial Statements and their Supplementary Schedules
We acknowledge that the methods and results of audit performed by the financial auditor, Deloitte
Touche Tohmatsu LLC, are appropriate.
(3) Results of Audit of Consolidated Financial Statements
We acknowledge that the methods and results of audit performed by the financial auditor, Deloitte
Touche Tohmatsu LLC, are appropriate.
November 18, 2020
Board of Company Auditors
SEPTENI HOLDINGS CO., LTD.
Internal Company Auditor

Nobuo Kojima(Seal)

Internal Company Auditor

Muneyoshi Nomura(Seal)

Company Auditor

Mamoru Furushima(Seal)

Company Auditor

Takeshi Okuyama(Seal)(Note)
Company auditor Mamoru Furushima and company auditor Takeshi Okuyama are outside company
auditors, as set forth in Article 2, item 16, and Article 335, paragraph 3 of the Companies Act.

- 37 -