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 31ST 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 exceptional
support. Please find herein the convocation notice for the 31st Ordinary General Meeting of Shareholders.
I believe that the fiscal year ended September 30, 2021 was a year in which we were able to recoversignificantly from the impact of COVID-19 by expanding projects compatible with the online shift in overall
consumption and by promoting alliance operations with the Dentsu Group. We recorded our highest level ofrevenue ever, centered on growth in the Digital Marketing Business and Media Platform Business.
Furthermore, in October 2021, we announced that we would deepen our capital and business alliance with
the Dentsu Group to enhance our corporate value further.
Under the Group’s mission of “inspiring the world with entrepreneurship,” we will work to enhance ourcorporate and shareholder value. Going forward, we would very much appreciate your continuous
understanding and support.
November 2021

Koki Sato,
Representative Director
Group President and Chief Executive Officer-1-December 2, 2021
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 31ST ORDINARY
GENERAL MEETING OF SHAREHOLDERS
1. Date and Time:

Wednesday, December 22, 2021, 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 31st
term (from October 1, 2020 to September 30, 2021) 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 31st term (from October 1,
2020 to September 30, 2021)
Matters to be resolved:
Agenda Item No. 1:
Approval of Share Exchange Agreement
Agenda Item No. 2:
Issue of Shares Offered for Subscription through Third-Party Allotment
Agenda Item No. 3:
Election of Six Directors
Agenda Item No. 4:
Election of One Director in Association with Capital and Business
Alliance
Agenda Item No. 5:
Election of One Company Auditor in Association with Capital andBusiness Alliance
Agenda Item No. 6:
Election of Financial 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 Statements3) (3) A. Dentsu Direct’s financial statements for its last financial year (from January 1, 2020 to December 31, 2020), in
the Reference Documents for the General Meeting of Shareholders, Agenda Item No. 1: Approval of Share Exchange
Agreement, 3. Overview of Matters Provided for in Article 193 of the Ordinance for Enforcement of the Companies Act
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 company auditors andthe financial auditor include Notes to Consolidated Financial Statements and Notes to Non-consolidated Financial
Statements, which are posted on the Company’s website.

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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-3-

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

Approval of Share Exchange Agreement

As announced by the “Notice of: Capital and Business Alliance with Dentsu Group Inc.; Acquisition of 100%
Ownership of Dentsu Direct Inc. through Share Exchange; Issue of New Shares through Third-Party
Allotment to Dentsu Group Inc.; Partial Acquisition of Shares (Conversion into Equity-Method Affiliate) ofDentsu Digital Inc.; and Changes in Parent Company and Subsidiaries” dated October 28, 2021 (“Capitaland Business Alliance Press Release”), Septeni Holdings Co., Ltd. (“Company”) approved a resolution to
execute a capital and business alliance agreement with Dentsu Group Inc. (“Capital and Business AllianceAgreement”; the capital and business alliance pursuant to such agreement is referred to as the “Capital andBusiness Alliance”) at its Board of Directors meeting held on the same date and, as part of the Capital andBusiness Alliance, executed a share exchange agreement as of the same date with Dentsu Direct Inc. (“Dentsu
Direct”), a wholly-owned subsidiary of Dentsu Group Inc., regarding a share exchange whereby theCompany will be a wholly-owning parent company in share exchange and Dentsu Direct will be a whollyowned subsidiary in share exchange (“Share Exchange”) (“Share Exchange Agreement”).
This proposal requests your approval of the Share Exchange Agreement.
The reasons for the Share Exchange, the terms and conditions of the Share Exchange Agreement, and othermatters concerning this proposal are as follows:
1. Reasons for Share Exchange
The Company, which was established in Shibuya-ku, Tokyo as Sub & Liminal Co., Ltd. in October 1990
with the aim of providing personnel recruiting consulting services, entered the direct marketing business(DM business) whereby it undertakes outsourcing services focusing on direct mail etc. surrogate dispatchingfor companies in October 1993. The Company changed its trade name to Septeni Co., Ltd. in March 2000
and launched an Internet advertising business in April of that year. On August 9, 2001, the Company’s shareswere listed on the over-the-counter market operated by the Japan Securities Dealers Association (theJASDAQ exchange was reorganized into JASDAQ Securities Exchange, Inc.). Along with the Osaka
Securities Exchange (“OSE”)’s making the JASDAQ Securities Exchange into its subsidiary, and theintegration of the Tokyo Stock Exchange (“TSE”) and the OSE, the Company is currently listed on the TSE’s
JASDAQ (Standard) exchange. Later, the Company shifted to a holding company structure in October 2006
and changed its trade name to Septeni Holdings Co., Ltd. At that time, the Company transferred its Internet
advertising business to Septeni Holdings Co., Ltd by means of an incorporation-type corporate demerger andits DM business to Septeni Direct Marketing Co., Ltd., established in April of that year, through anabsorption-type corporate demerger, respectively. In February 2013, the Company established
COMICSMART, Inc. and entered the manga content business. The Company transferred all shares of Septeni
Direct Marketing Co., Ltd. and sold its DM business in October 2014. In October 2018, the Company
executed a capital and business alliance agreement with Dentsu Group Inc., pursuant to which a tender offer
for share certificates of the Company was subsequently carried out by Dentsu Group Inc., making theCompany an equity-method affiliate of Dentsu Group Inc. based on the premise that the Company would
remain listed. Through these measures, the Company has to this day moved forward with the comprehensive
business alliance with the intention of becoming the nation’s largest digital marketing partner that leads thedevelopment of the industry, by providing most excellent solutions to its clients, including not only
advertisers and media but also companies and consumers facing various challenges, from an environment
where personnel with a wide variety of talents gather to work with full job satisfaction.
As of this day, the Company constitutes a corporate group comprising the Company, 37 consolidated
subsidiaries, 6 equity-method affiliates and equivalents (i.e., companies affiliated with the Company andbusinesses under common control with the Company), and 1 other affiliate (the corporate group is hereinafterreferred to as the “Company Group”). The Company has developed its business by centering on two businesssegments namely digital marketing business and media platform business. In accordance with its corporate
creed of “hinerankai,” which means “think outside the box,” since the Company Group’s foundation in 1990,
the Company has viewed exceptional human resources with an entrepreneurial spirit and an abundance of
passion as well as a corporate culture and environment that attracts this type of human resource to be the-4-Company Group’s greatest source of corporate value, and the Company has carried out management that
focuses on “people” in the pursuit of growth of existing businesses and the creation of new business toincrease corporate value and provide ever higher returns to shareholders.
On the other hand, as of June 30, 2021 Dentsu Group Inc. constitutes a corporate group comprising Dentsu
Group Inc., 969 consolidated subsidiaries and 90 equity-method affiliates (the corporate group is hereinafterreferred to as the “Dentsu Group”). The Dentsu Group has promoted its business in its domestic and overseas
business segments in accordance with its group vision of “an invitation to the never before.” Dentsu Japan
Network, which covers the group’s domestic businesses, speeds up its evolution into an “Integrated GrowthPartner,” a true partner committed to the sustainable growth of its clients and society, in response to its clientcompanies’ demand for a partner that is capable of solving complicated challenges together and keeping
running together for business innovation and growth. Dentsu International, which covers the group’s overseas
businesses, promotes the thorough simplification of business structure in order to accomplish atransformation into a network that provides the world’s most integrated media and digital marketing
communication services. Dentsu International also provides expert knowledge, goods and services, and theindustry’s top-level consumer insights by organizing optimal teams for client companies. The Dentsu Groupintends to strive to increase the value of all stakeholders by continuing to bring new values to society throughthe business growth of its client companies in both domestic and overseas businesses and by achieving
sustainable growth of the Dentsu Group and its client companies and society, all as a whole.
In the digital marketing business, in which the Company Group mainly operates and on which the Dentsu
Group is focused, the percentage of digital advertising expenditures in Japan to total advertising expenditurescontinues on an upward trend, reaching 36.2% in 2020 (source: “Advertising Expenditures in Japan 2020”
by Dentsu Inc.). This has created a situation where barriers between online and offline are graduallydisappearing for marketing issues that clients are confronting, and solutions are being sought that will
maximize clients’ advertising effect by utilizing various data through more integrated and comprehensive
approaches. In light of these circumstances, since January 2019 the Company and the Dentsu Group (“TwoGroups”) have promoted the expansion and deepening of their business alliance while improving the valueof their services provided to clients by bringing together the advantages and resources of the Two Groups.
Specifically, the Company Group has provided its knowledge and technology in the digital marketingbusiness to the Dentsu Group and has supported the operation of advertisements in digital marketing projects
handled by the Dentsu Group. In addition, the development of new collaborative projects has been promoted
through integrated marketing proposals for online and offline advertisements by utilizing Both Group’s client
bases. In 2020, while the performance of the Two Groups was temporarily affected by the major impact of
the COVID-19 pandemic on Japan’s economy, the COVID-19 situation has resulted in a big wave of digitaltransformation across all industries, further increasing demand for digital marketing in the advertisingindustry as well.
Under this business environment surrounding the Two Groups, they continued discussions towards further
expansion of growth through their business collaboration aimed at becoming Japan’s largest digital marketing
partner. In the course of these discussions, they reached an agreement that enhancing their capital relationshipwould be necessary to accelerate such business collaboration. The Two Groups thus decided to proceed to
discussions on a deeper capital and business alliance between the Company and Dentsu Group Inc., including
the Company’s consolidated subsidiaries, for the purpose of increasing the corporate value of both companies.
The Company and Dentsu Group Inc. thus engaged in repeated dialogue on multiple occasions regarding thesynergies that can be expected from a deeper capital and business alliance and regarding specific methods,
particulars, etc. of the capital and business alliance.
As a result of these discussions, the Company and Dentsu Group Inc. determined that making the Company
a consolidated subsidiary of Dentsu Group Inc. would allow the promotion of the Two Groups’ businesses
through the smooth mutual utilization of the Two Groups’ management resources and under a stronger
cooperative relationship between the Two Groups. In October 2021, the Company and Dentsu Group Inc.
reached a conclusion that they should execute the Capital and Business Alliance Agreement, pursuant to-5-which the Share Exchange would be carried out and the Company would issue new shares to Dentsu Group
Inc. through a third-party allotment (“Third-Party Allotment”) and would acquire part (25.00%) of thecommon shares of Dentsu Digital Inc. (“Dentsu Digital”) held by Dentsu Group Inc. (“Share Transfer”;
collectively with the Share Exchange and the Third-Party Allotment, hereinafter referred to as the“Transaction”). Meanwhile, the Company and Dentsu Group Inc. believe that the best choice for the TwoGroups in moving forward with the Capital and Business Alliance is to maintain the independent managementof the Company as a listed company because, considering the clear differences between the Two Groups intheir areas of specialization as mentioned below, it would be desirable for increasing the corporate value of
the Two Groups to stick to the independence of the management of the two companies as listed companies
and to maintain the Two Groups’ existing businesses and the brands associated with them as before. (Dentsu
Group Inc. will be entitled to nominate one director and one (part-time) company auditor of the Company.
However, after consummation of the Transaction, a majority of the directors of the Company will be
independent outside directors. In addition, the Company will have a nomination advisory committee amajority of whose members will be outside directors, in order to secure the independence, objectivity andaccountability of members of the Company Group’s management teams in the deliberation process.) The
Company and Dentsu Group Inc. also reached a decision that, in order to help the Company’s efforts tobecome the nation’s largest digital marketing partner while further accelerating its business cooperation with
Dentsu Group Inc., it is desirable, for the Company’s further growth through expanding and enhancing thetarget domains of the Company’s main business of digital marketing, to accelerate the business cooperationin the Two Groups as a whole by making Dentsu Direct, which has advantages in direct advertising and mass
advertising, a wholly-owned subsidiary of the Company, and by making Dentsu Digital, which has
advantages in digital marketing and solutions, an equity-method affiliate of the Company. Based on the above,
the Company and Dentsu Group Inc. agreed that the specific procedure toward making the Company aconsolidated subsidiary of Dentsu Group Inc. would be to issue new shares of the Company to Dentsu Group
Inc. and to allocate the funds so raised by the Company to consummate the Share Transfer and to realize
other growth strategies.
The Company Group has built its competitive edge based on: in the digital marketing business, having large
client channels and capability to operate ads in the digital advertising market, which is among the fastest
growing advertising markets, and having development capabilities in data solutions, among other things; andin the media platform business, having capability to develop new businesses, including the manga content
business, and having know-how on hiring and training digital human resources using data-driven AI
personnel systems as a base supporting business growth. On the other hand, the Dentsu Group has aroundsix thousand client channels in Japan. The group provides planning know-how that integrates mass media
and digital media, as well as providing digital services not limited to media, and also provides its clientcompanies with integrated solutions through its business foundation etc. that have been developed globally,
with many business assets that can be utilized in the domestic market.
It will be possible to provide optimal solutions to clients through the reciprocal use of the human resourcesof the Two Groups, which have the different attributes described above. Therefore, the Two Groups will aim
to raise the value of services provided by the Two Groups and to drive the development of advertising markets
through the reciprocal use of the human resources of Two Groups.
In addition, the Two Groups aim to achieve the following synergy effects by taking advantage of theirrespective attributes through making the Company a consolidated subsidiary of Dentsu Group Inc. andmaking Dentsu Direct and Dentsu Digital a wholly-owned subsidiary and an equity-method affiliate,
respectively of the Company.
(a)

A further expansion of the commercial distribution from the Dentsu Group at the Company towards
achievement of the Two Groups’ common goals, with the aim of increasing the value provided toclients, and based on the premise of further deepening and acceleration of the collaboration for
integrated marketing proposals that have been promoted by the Two Groups.
(b) Improvement of the Company’s presence in the direct marketing domain through acquiring capabilities
not only in digital advertising but also in mass media advertising as a result of making Dentsu Direct
a wholly-owned subsidiary of the Company.

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(c)

An advantage of scale and the attribution to the Company of equity in net income of affiliates as aresult of making Dentsu Digital an equity-method affiliate of the Company, through integrating
operations and development platforms in digital marketing and data solution projects.
(d) Achievement of cost synergies through improving efficiency, such as by sharing business process
outsourcing (BPO) services, conducting collaborative development projects, and achieving higher
procurement capabilities, by promoting the integration of the Two Groups’ business foundations.
As described above, the two companies agreed that execution of the Transaction will be an extremely
effective means of raising the corporate value and shareholder value of Two Groups. Therefore, the Company
and Dentsu Group Inc. decided to execute the Capital and Business Alliance Agreement and reached aconclusion that the two companies would carry out the Transaction.
2. Overview of Terms and Conditions of Share Exchange Agreement
The terms and conditions of the Share Exchange Agreement are as follows.

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Share Exchange Agreement
Septeni Holdings Co., Ltd. (“Septeni HD”) and Dentsu Direct Inc. (“Dentsu Direct”) hereby enter
into this Share Exchange Agreement dated October 28, 2021 (“Agreement”), as follows.
Article 1 (Share Exchange)
Subject to the provisions contained herein, Septeni HD and Dentsu Direct shall conduct a shareexchange in which Septeni HD shall become the wholly-owning parent company in share exchange
and Dentsu Direct shall become the wholly-owned subsidiary in share exchange (“Share Exchange”).
As a result of the Share Exchange, Septeni HD shall acquire all of the issued shares of Dentsu Direct.
Article 2 (Trade Names and Addresses of Parties)
Septeni HD’s and Dentsu Direct’s respective trade names and addresses are as follows:
Septeni HD
Trade name: Septeni Holdings Co., Ltd.
Address:
8-17-1 Nishishinjuku, Shinjuku-ku, Tokyo
Dentsu Direct
Trade name: Dentsu Direct Inc.
Address:
Dentsu Building, 1-8-1 Higashi-Shinbashi, Minato-ku, Tokyo
Article 3 (Number of Shares to Be Delivered in Share Exchange and Terms of Their Allotment)
1. In the Share Exchange, Septeni HD shall deliver to each shareholder of Dentsu Direct as at thetime immediately prior to the point in time at which Septeni HD shall acquire all of the issued
shares of Dentsu Direct through the Share Exchange (“Target Shareholder”) such number ofcommon shares of Septeni HD as calculated by multiplying the total number of common sharesof Dentsu Direct held by the Target Shareholder by a factor of 3,274, in exchange for the commonshares of Dentsu Direct held by the Target Shareholder.
2. In the Share Exchange, Septeni HD shall allot common shares of Septeni HD to each Target
Shareholder at the ratio of 3,274 common shares of Septeni HD per common share of Dentsu
Direct held by the Target Shareholder.
3. If the number of common shares of Septeni HD to be otherwise allotted to a Target Shareholder
pursuant to the provisions of the preceding two paragraphs includes any fraction less than one
share, Septeni HD shall dispose of such fraction pursuant to the provisions of Article 234 of theCompanies Act and other applicable laws and regulations.
Article 4 (Effective Date of Share Exchange)
The date on which the Share Exchange becomes effective (“Effective Date”) shall be January 4,
2022. However, the Effective Date may be changed by consultation and agreement between Septeni
HD and Dentsu Direct if necessary for reasons related to the progress of the procedure for the Share
Exchange or for any other reason.
Article 5 (Amounts of Stated Capital and Reserves)
The amounts by which the stated capital and reserves of Septeni HD will increase as a result of the
Share Exchange shall be appropriately determined by Septeni HD separately pursuant to theprovisions of Article 39, paragraph (2) of the Regulation on Corporate Accounting.
Article 6 (Approval of Share Exchange Agreement)
1. No later than the day immediately preceding the Effective Date, Septeni HD shall seek aresolution for approval of this Agreement and for other matters necessary for the Share Exchange
at a shareholders meeting as set forth in Article 795, paragraph (1) of the Companies Act.

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2. No later than the day immediately preceding the Effective Date, Dentsu Direct shall seek aresolution for approval of this Agreement and for other matters necessary for the Share Exchange
at a shareholders meeting as set forth in Article 783, paragraph (1) of the Companies Act(including a case where such resolution is deemed to have been passed at such shareholders
meeting under Article 319, paragraph (1) of the Companies Act).
Article 7 (Management of Company Assets)
During the period from the date of execution of this Agreement to the day immediately preceding
the Effective Date, each party hereto shall execute its operations and manage and operate its assets
by exercising the due care of a prudent manager, and shall consult and agree with the other party
before engaging in any act that may have a material impact on any of its own assets or its own rights
or obligations.
Article 8 (Amendment and Termination)
At any time during the period from the date of execution of this Agreement to the day immediately
preceding the Effective Date, the parties hereto may amend or terminate this Agreement byconsultation and agreement between them.
Article 9 (Effect of Agreement)This Agreement shall become null and void if, no later than the day immediately preceding theEffective Date: (i) this Agreement is not approved by a resolution at a shareholders’ meeting of
Septeni HD or Dentsu Direct as set forth in Article 6; (ii) the approval, etc. of any relevant
government agency, etc. required to consummate the Share Exchange is not obtained; or (iii) thisAgreement is terminated pursuant to the preceding article.
Article 10 (Governing Law and Jurisdiction)
This Agreement shall be governed by, and construed in accordance with, the laws of Japan. The
parties hereto agree that the Tokyo District Court shall have exclusive jurisdiction as the court of first
instance over any dispute related to this Agreement.
Article 11 (Matters for Consultation)
Other than as set forth herein, any matter necessary for the Share Exchange shall be determined byconsultation and agreement between the parties hereto in accordance with the spirit of thisAgreement.
In Witness Whereof, this Agreement has been executed in duplicate, with Septeni HD and Dentsu
Direct to retain one copy each after both have hereunto affixed their respective names and seals.
October 28, 2021
Septeni HD:

Koki Sato, Representative Director
Septeni Holdings Co., Ltd.
8-17-1 Nishishinjuku, Shinjuku-ku, Tokyo

Dentsu Direct:

Kazunari Kondo, President, Representative
Director and Executive Officer
Dentsu Direct Inc.
Dentsu Building, 1-8-1 Higashi-Shinbashi,
Minato-ku, Tokyo-9-

3. Overview of Matters Provided for in Article 193 of the Ordinance for Enforcement of the Companies Act(1) Matters regarding the Appropriateness of Consideration
A. Details of Allotment in the Share Exchange
Company
Dentsu Direct
Company name
(Wholly-owning parent(Wholly-owned subsidiary incompany in share exchange)
share exchange)
Share exchange ratio
1
3,274
Number of shares to be delivered
Company’s common shares: 12,768,600 shares
upon the share exchange(Notes)1. Allotment ratio of shares for the Share Exchange (share exchange ratio)
3,274 common shares of the Company will be allotted and delivered per share of Dentsu Direct.
2. Number of new shares of the Company to be issued as a result of the Share Exchange
The Company will allot and deliver 12,768,600 common shares of the Company through the Share
Exchange. Of the shares to be so delivered, 10,724,240 shares will be allotted from the Company’streasury shares and 2,044,360 common shares will be newly issued.
B. Grounds, etc. for the Details of Allotment in Share Exchange
1) Grounds and Reasons for the Details of Allotment
In calculating the share exchange ratio specified in A. above (“Share Exchange Ratio”), the Company
appointed Mizuho Securities Co., Ltd. (“Mizuho Securities”) as its financial advisor and third-party
appraisal organization that is independent from the Company as well as from Dentsu Group Inc. and
Dentsu Direct, in order to ensure the fairness and validity of the Share Exchange Ratio and other aspectsof the Share Exchange as described in “4) Measures for Ensuring Fairness (Including Measures for
Avoiding Conflicts of Interest)” below. As described in “4) Measures for Ensuring Fairness (Including
Measures for Avoiding Conflicts of Interest)” below, the Company repeated careful negotiations anddiscussions with Dentsu Group Inc. on the Share Exchange Ratio, based on the share exchange ratio
valuation report received from Mizuho Securities, advice from Nishimura & Asahi which is theCompany’s legal advisor, and the results of a due diligence conducted on Dentsu Direct, and bycomprehensively taking into account the Company’s share price, the Company’s and Dentsu Direct’s
financial condition and future prospects, and other factors. As a result, the Company determined that the
Share Exchange Ratio was appropriate and, at the Board of Directors held on October 28, 2021, passed a
resolution to execute the Share Exchange Agreement, including the Share Exchange Ratio specified
therein.
2) Matters Relating to Calculations(i) Name of the Appraisal Organization and Its Relationship with the Company and Dentsu Direct
Mizuho Securities is an appraisal organization independent from the Company as well as from Dentsu
Group Inc. and Dentsu Direct. Mizuho Securities is not a related party to the Company or to Dentsu
Group Inc. or Dentsu Direct. Mizuho Securities has no material interest required to be disclosed in the
Share Exchange.
(ii) Overview of Calculations
In the case of the Company, Mizuho Securities conducted the valuation by using: (i) the market pricemethod (in which the reference date was set at the valuation reference date of October 27, 2021 and theanalysis was performed based on the average closing price of the Company’s common shares on the
TSE’s JASDAQ (Standard) exchange over the preceding six-month period from April 28, 2021 to thevaluation reference date, that over the preceding three-month period from July 28, 2021 to the valuationreference date, and that over the preceding one-month period from September 28, 2021 to the valuationreference date, and the closing price of the Company’s common shares on the reference date), because
the Company is listed on a financial instruments exchange and market prices of its shares are available;(ii) the comparable company method, because comparable listed companies similar to the Company- 10 -

exist and an analogical inference of the share value of the Company’s common shares is possible
through a comparison with those comparable companies; and (iii) the Discounted Cash Flow method(“DCF method”) to reflect the state of future business activities in the valuation.
As for Dentsu Direct, the market price method was not used because Dentsu Direct is an unlistedcompany and market prices of its shares are not available. The valuation was conducted by using: (i)the comparable company method, because comparable listed companies similar to Dentsu Direct exist
and an analogical inference of the share value of Dentsu Direct’s common shares is possible through a
comparison with those comparable companies; and (ii) the DCF Method to reflect the state of futurebusiness activities in the valuation.
The results of the valuation using the above valuation methods when a value of one is assigned to thevalue per share of the Company are as follows:
Method used
Company
Market price method
Comparable company
methodDCF method

Dentsu Direct
Comparable company
methodComparable company
methodDCF method

Valuation result of shareexchange ratio
3,259 to 5,005
2,919 to 5,231
3,115 to 6,217

In evaluating the Share Exchange Ratio, Mizuho Securities used information provided by the Company
and Dentsu Direct and information available to the public, assuming that these materials, information,etc. were all accurate and complete, and thus has not independently verified the accuracy orcompleteness of such information. Moreover, with respect to the assets and liabilities (including
contingent liabilities) of the Company, Dentsu Direct and their respective affiliates, Mizuho Securities
has not performed any independent evaluation, appraisal or calculation, including analysis andevaluation of individual assets and liabilities, nor has it delegated such appraisal or assessment to a third
party. The valuation of the Share Exchange Ratio by Mizuho Securities reflects the information
available and the economic conditions up to valuation reference date. Mizuho Securities assumed that
Company’s and Dentsu Direct’s respective financial forecasts, including profit plans and otherinformation, were reasonably reviewed or prepared by the respective managements of the Company
and Dentsu Direct based on the best estimation and judgment which could be obtained at this point.
In the business plans prepared by the Company and Dentsu Direct based on which Mizuho Securities
performed valuation using the DCF method, considerable income increases or decreases are expectedin some fiscal periods. Specifically, the Company expects at least a 30% increase in non-GAAP
operating profit for the fiscal year ending in September 2023 from the previous fiscal year, due to:organic growth, and creation of new clients through promoting cooperation with the Dentsu Group
companies under existing capital and business alliance agreement, in the digital marketing business;increase in client unit price; and expected improvement in productivity by enhancing the recruiting anddevelopment of digital human resources, and reducing the time required to make new personnel
industry-ready, through the utilization of AI personnel systems. For the same reasons, the Company
expects at least a 30% increase in non-GAAP operating profit for the fiscal year ending in September
2024 from the previous fiscal year. On the other hand, Dentsu Direct expects at least a 30% decrease inoperating profit and at least a 40% decrease in net income for the fiscal year ending in December 2021
from the previous fiscal year, due to the impact of loss of orders from some advertisers in the course ofreorganization of the digital marketing business. However, Dentsu Direct expects at least a 30% increasein net income for the fiscal year ending in December 2022 from the previous fiscal year, due to organic
growth, creation of new clients, and increase in client unit price through online and offline cross-selling,in the online and offline marketing business. For the same reasons and due to the expected start of directpurchase transactions of certain media, Dentsu Direct expects at least a 30% increase in both operating
profit and net income for the fiscal year ending in December 2023 from the previous fiscal year. The
financial forecasts for the Company and Dentsu Direct based on which the valuation was performed
using the DCF method are not subject to the implementation of the Transaction.

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3) Prospects of Becoming Delisted and Reasons Therefor
As of this day, the Company’s shares are listed on the TSE’s JASDAQ (Standard) exchange. Even after the
Share Exchange has been carried out, the Company’s shares are expected to remain listed.

4) Measures for Ensuring Fairness (Including Measures for Avoiding Conflicts of Interest)
In light of the fact that Dentsu Group Inc. is the Company’s largest shareholder that is a major shareholder
and other affiliate holding 26,895,001 shares of the Company (which corresponds to 20.98% in terms ofownership percentage of voting rights), and that Dentsu Group Inc. has a capital and business alliancerelationship with the Company under the existing capital and business alliance agreement, the Company
has taken measures for ensuring fairness (including measures for avoiding conflicts of interest) as follows,in order to carefully ensure the fairness of the Transaction, including the Share Exchange.
(i) Company’s Receipt of Valuation Report from Independent Third-Party Appraisal Organization
To ensure the fairness and validity of the Share Exchange Ratio, the Company appointed Mizuho
Securities as its financial advisor and third-party appraisal organization that is independent from theCompany as well as from Dentsu Group Inc. and Dentsu Direct, and received from Mizuho Securities
a share exchange ratio valuation report on the Share Exchange on October 28, 2021 (“Valuation
Report”). For a summary of the Valuation Report, please see “2) Matters Relating to Calculations”
above. However, the Company has not obtained from any third-party appraisal organization a written
opinion that the Share Exchange Ratio is appropriate from a financial perspective (fairness opinion).
(ii) Company’s Receipt of Advice from Independent Law Firm
The Company appointed Nishimura & Asahi as its legal advisor independent from the Company as well
as from Dentsu Group Inc. and Dentsu Direct, and has received from Nishimura & Asahi advice fromlegal perspectives on the procedures for the Transaction and on the approach, process, etc. of thedecision-making of the Company’s Board of Directors. Nishimura & Asahi is independent from theCompany as well as from Dentsu Group Inc. and Dentsu Direct and does not have any material interest
in any of them.
(iii) Unanimous Approval of Company Directors and Unanimous Opinion of No Objections byCompany Auditors Having No Conflicts of Interests
At the Company’s Board of Directors meeting held on October 28, 2021 at which all eight directors of
the Company were present, the attending directors unanimously approved a resolution to execute theCapital and Business Alliance Agreement, including the carrying out of the Transaction specified
therein. In addition, at the Board of Directors meeting referenced above, all company auditors except
Mr. Nobuo Kojima expressed an opinion supporting the above resolution without objection.
Mr. Nobuo Kojima, who is a company auditor of the Company, did not in any way participate in the
deliberation at the Board of Directors meeting referenced above but refrained from expressing his
opinion with respect to the resolution referenced above adopted at the same Board of Directors meeting,owing to his position as an employee of Dentsu Inc., a consolidated subsidiary of Dentsu Group Inc.,in order to eliminate the possibility that the Transaction is affected by the issue of structural conflicts ofinterest and the issue of information asymmetry.
C. Matters Relating to the Appropriateness of the Amounts of Increase in the Company’s Stated Capitaland Reserves upon the Share Exchange
The amounts of increase in the Company’s stated capital and reserves upon the Share Exchange are as
follows. The Company considers this arrangement appropriate as it has been determined within the limitsof legal restrictions by comprehensively taking into account and considering the Company’s capital policy
and other circumstances after the Share Exchange.
(a) Amount of increase in stated capital: JPY0(b) Amount of increase in capital reserve: The amount to be separately determined by the Company
pursuant to the provisions of Article 39 of the Regulation on Corporate Accounting(c) Amount of increase in legal reserve of retained earnings: JPY0
- 12 -

(2) Treatment of Stock Acquisition Rights and Bonds with Stock Acquisition Rights in the Share Exchange
Not applicable.
(3) Matters Relating to Dentsu Direct
A. Content of Financial Statements, etc. for the Last Financial YearThe content of Dentsu Direct’s financial statements for its last financial year (from January 1, 2020
to December 31, 2020) is posted on the Company’s website (https://www.septeniholdings.co.jp/ir/stock/shareholders/), pursuant to applicable laws and regulations and the provisionsof Article 19 of the Company’s Articles of Incorporation.
B. Provisional Financial Statements, etc. Whose Provisional Account Closing Date Is Set at a Date after
the Last day of the Last Fiscal Year
Not applicable.
C. Disposal, etc. of Important Assets after the Last Day of the Last Fiscal YearOn July 1, 2021, Dentsu Direct absorbed and merged with DA search & link inc., a wholly-owned
subsidiary of Dentsu Group Inc.
(4) Company’s Disposal, etc. of Important Assets after the Last Day of Its Last Fiscal YearAt its Board of Directors meeting held on November 25, 2021, the Company passed a resolution to
distribute, no later than the effective date of the Share Exchange, a dividend of surplus of JPY3.4 pershare (for a total amount of JPY435,853,684) with a record date of September 30, 2021, as the term-end
dividend for the fiscal year ending in September 2021.

- 13 -

Agenda Item No. 2:

Issue of Shares Offered for Subscription through Third-Party
Allotment

Subject to your approval of Agenda Item No. 1, “Approval of Share Exchange Agreement,” the Company
proposes you to approve, by ordinary resolution, the Third-Party Allotment to Dentsu Group Inc. as describedin “1. Overview of Third-Party Allotment” below for the reasons described in section “2” below, as
announced by the Capital and Business Alliance Press Release.
The number of common shares to be issued to Dentsu Group Inc. through the Third-Party Allotment is
70,118,794 shares (representing 701,187 votes), which corresponds to 50.48% of the total number of theCompany’s issued shares as of September 30, 2021 (138,916,500 shares) and 54.70% of the total number of
the Company’s voting rights as of the same date (1,281,868 votes). This is expected to result in an at least
25% dilution of the Company’s shares held by the existing shareholders.
This proposal intends to confirm the intent of shareholders pursuant to the provisions of Rule 432, item (2)of the Securities Listing Regulations established by the TSE, because the Third-Party Allotment will resultin an at least 25% dilution of the Company’s shares held by the existing shareholders as mentioned above,and because Dentsu Group Inc. will become the controlling shareholder (i.e., the parent company) of theCompany as a result of the Third-Party Allotment.
This proposal also intends to obtain approval of a contract as referred to in Article 205, paragraph (1) of theCompanies Act by a resolution of the shareholders meeting pursuant to Article 206-2, paragraph (4) of theCompanies Act.
1. Overview of Third-Party Allotment
Class and number of(1)
Common shares: 70,118,794 sharesshares(2)
Pay-in amount
JPY465 per share(3)
Total pay-in amount
JPY32,605,239,210
Amount of increase in
Amount of increase in stated capital: JPY16,302,619,605(4)
stated capital andAmount of increase in capital reserves: JPY16,302,619,605 (Note)
capital reserves
Method of offering All shares offered for subscription will be allotted to Dentsu Group(5)
subscription
Inc. by means of third-party allotment(6)
Payment due date
January 4, 2022
(i) The Third-Party Allotment is subject to the satisfaction of certain
conditions precedent, including the Share Exchange’s becoming
effective.
(7)
Other matters(ii) The Third-Party Allotment is subject to: the submission of a
Securities Registration Statement becoming effective pursuant to the
Financial Instruments and Exchange Act; and approval of this
proposal at this shareholders meeting.
Note: The amount of increase in stated capital will be the amount equivalent to one half of the Maximum
Amount of Increase in Stated Capital calculated pursuant to Article 14, paragraph (1) of theRegulation on Corporate Accounting, with any fraction less than JPY1 arising from the estimation
rounded up. The total amount of increase in capital reserves will be the amount of Maximum
Amount of Increase in Stated Capital so calculated minus the amount of increase in stated capital.
2. Reasons for Third-Party Allotment(1) Reasons for Selection of the Allottee
The Company has selected Dentsu Group Inc. as the proposed allottee because, as described in Agenda
Item No. 1, the Company considers that its becoming a consolidated subsidiary of Dentsu Group Inc.
through the Transaction will, in the medium-to-long term, lead to an increase in the Company’s corporate
value and shareholder value which will more than compensate for the dilution mentioned above.
(2) Basis for Calculating Pay-in Amount and Details Thereof
The issue price for the Third-Party Allotment (“Issue Price”) was set at JPY465 (as rounded to a whole
number; the same applies hereinafter to the calculation of a share price), which is the simple average- 14 -

closing price of the Company’s common shares on TSE’s JASDAQ (Standard) exchange (“Closing
Price”) over the one-month period ending on October 27, 2021, which is the trading day immediately
before the date on which the Board of Directors passed a resolution for the Third-Party Allotment(“Immediately Preceding Trading Day”) (“Immediately Preceding One Month’s Average”).
The reasons for using the Immediately Preceding One Month’s Average in calculating the Issue Price areas follows. First, because the market price of the Company’s shares tended to fluctuate considerably (withthe yearly low and high for 2021 up to the Immediately Preceding Trading Day being JPY366 and JPY555,
respectively), the Company and the proposed allottee discussed, during price negotiations between them,
the idea that referring to an average share price as an equalized value instead of using the share price ona specific day (i.e., the Immediately Preceding Trading Day) in calculating the Issue Price would be moreobjective and reasonable as a basis for calculation, since this would allow elimination of the effect ofshort-term fluctuations in share price and such other factors. In fact, the market price of the Company’s
shares has more recently fluctuated significantly in a short period, with a drop in response to the BusinessResults for 3Q Fiscal Year September 2021 announced on July 29, 2021 (from the Closing Price of
JPY487 on July 29, 2021 to the Closing Price of JPY413 on the following day [July 30, 2021], further tothe Closing Price of JPY374 on August 20, 2021), followed by a rise over late September 2021 (to the
Closing Price of JPY482 on September 27 and 28, 2021), then by a dwindle over early October 2021 (tothe Closing Price of JPY444 on October 6, 2021), and further by another rise over mid October 2021 (tothe Closing Price of JPY492 on October 15 and 18, 2021). Considering these circumstances, the Company
believes that it is more objective and reasonable as a basis for calculation to refer to an average shareprice as an equalized value instead of using the share price on a specific day (i.e., the Immediately
Preceding Trading Day) in calculating the Issue Price, since this would allow elimination of the effect ofshort-term fluctuations in share price and such other factors. In this regard, the Company considers thatusing the average share price over the immediately preceding one-month period, which is closest to themost recent market price, would be more objective and reasonable as a basis for calculation than that overthe immediately preceding three- or six-month period.
The Issue Price includes a premium of 9.93% (as rounded to the second decimal place; the same applies
hereinafter to the calculation of a premium rate) over the Closing Price of JPY423 on the Immediately
Preceding Trading Day, a premium of 6.90% over the average Closing Price of JPY435 over the threemonth period preceding the Immediately Preceding Trading Day (from July 28, 2021 to October 27, 2021),
and a premium of 3.56% over the average Closing Price of JPY449 over the six-month period preceding
the Immediately Preceding Trading Day (from April 28, 2021 to October 27, 2021).
The Issue Price is compliant with the “Guidelines on Handling of Third-Party Allotment” established by
the Japan Securities Dealers Association. The Company considers that the Issue Price is not an especiallyfavorable issue price. As for the Third-Party Allotment, a resolution to approve the Third-Party Allotment
was unanimously passed by all attending directors at the Company’s Board of Directors meeting held on
October 28, 2021 at which all eight directors of the Company were present. In addition, the Company hasreceived from all company auditors of the Company, except Mr. Nobuo Kojima, an opinion that the Issue
Price is not an especially favorable issue price and is thus legal, since the Issue Price is based on themarket price, which is an objective indicator for the value of the Company’s common shares, and since
the Issue Price has been determined by taking into account the Japan Securities Dealers Association’s
Guidelines on Handling of Third-Party Allotment.
Mr. Nobuo Kojima, who is a company auditor of the Company, did not in any way participate in the
deliberation at the Board of Directors meeting referenced above but refrained from expressing his opinion
with respect to the resolution referenced above adopted at the same Board of Directors meeting, owing to
his position as an employee of Dentsu Inc., in order to eliminate the possibility that the Transaction isaffected by the issue of structural conflicts of interest and the issue of information asymmetry.
(3) Reasons for Judgment that the Number of Shares to be Issued and Extent of Share Dilution are Reasonable
The number of new shares to be issued through the Third-Party Allotment is 70,118,794 shares(representing 701,187 votes), which corresponds to 50.48% of the total number of the Company’s issued
shares as of September 30, 2021 (138,916,500 shares) and 54.70% of the total number of the Company’s
voting rights as of the same date (1,281,868 votes). This will result in a certain dilution of the Company’s
existing shares.

- 15 -

However, the Company plans to apply the funds raised through the Third-Party Allotment to: (i) funds foracquiring shares of Dentsu Digital through the Share Transfer; and (ii) working capital (i.e., advertisingexpenses and recruitment advertising expenses). In addition, as described in Agenda Item No. 1, theCompany believes that, in order to help the Company’s efforts to become the nation’s largest digitalmarketing partner while further accelerating its business cooperation with Dentsu Group Inc., it isdesirable, for the Company’s further growth through expanding and enhancing the target domains of theCompany’s main business of digital marketing, to accelerate the business cooperation in the Two Groups
as a whole by making Dentsu Direct, which has advantages in direct advertising and mass advertising, awholly-owned subsidiary of the Company, and by making Dentsu Digital, which has advantages in digitalmarketing and solutions, an equity-method affiliate of the Company.
Therefore, the Company judges that the number of shares to be issued through, and the extent of sharedilution resulting from, the Third-Party Allotment are reasonable, because the Third-Party Allotment will
be carried out within the limits necessary to ensure an increase in the Company’s corporate value andshareholder value through the Third-Party Allotment, and because the Company’s becoming a
consolidated subsidiary of Dentsu Group Inc. through the Transaction will, in the medium-to-long-term,
lead to an increase in the Company’s corporate value and shareholder value which will more thancompensate for the dilution mentioned above.
Since the Third-Party Allotment will result in an at least 25% dilution of the Company’s shares held by
the existing shareholders as mentioned above, and since Dentsu Group Inc. will become the controllingshareholder (i.e., the parent company) of the Company as a result of the Third-Party Allotment, theCompany intends to confirm the intent of its shareholders through obtaining their approval of this proposal,
pursuant to the provisions of Rule 432, item (2) of the Securities Listing Regulations established by theTSE, as described above.

- 16 -

Agenda Item No. 3:

Election of Six Directors

At the close of this General Meeting of Shareholders, all eight directors will retire due to the expiration of
their respective terms of office.
In that regard, the Company hereby proposes the election of six directors, including five outside directors.
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:- 17 -

CandidateNo.

1

Koki Sato
Representative director
Group President and Chief
Executive Officer

2

Etsuko Okajima

3

Yusuke Asakura

4

Important positions held at othercompanies

Name

Outside director

Outside director

Yoshiki Ishikawa
Outside director

5

Akie Iriyama

6

Mio Takaoka

Outside director

Outside director

External Director, FOOD & LIFE
COMPANIES LTD.

Reelection

Attendance
to theBoard ofDirectors
meetings

13/13

CEO, ProNova Inc.
External Director, MARUI GROUP Co.,Ltd.
Reelection
Outside director
External Director, LANCERS, Inc.
Independent officer Outside Director, Yappli, Inc.
External Director, Money Forward, Inc.
Director, CHRO, Euglena Co., Ltd.

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
Outside Director (Audit & Supervisory
Independent officer Committee Member), Sansan, Inc.
External Director, Gaiax Co. Ltd.

13/13

Professor, Business School, Waseda
University
Reelection
External Director, ROHTO Pharmaceutical
Outside director
Co., Ltd.
Independent officer
Outside Director, Sanoh Industrial Co.,
Ltd.

9/10

Reelection
Outside director, KAYAC Inc.
Outside director
Partner, DNX Ventures
Independent officer

10/10- 18 -

1

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

Reelection
20 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, position and duties 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.
Dec. 2020
External Director, Sushiro Global Holdings Co., Ltd. (currently FOOD & LIFE COMPANIES LTD.) (current
position) 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
External Director, FOOD & LIFE COMPANIES LTD.

- 19 -

2

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

Reelection
Outside director
Independent officer
Number of years in office
6 years
Attendance to the Board of Directors meetings 13/13
Number of the Company’s common shares held –Profile, position and duties 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)

Nov. 2015

External Director, LANCERS, Inc. (current position)

Dec. 2015

Outside Director of the Company (current position)

Mar. 2016

Outside Director, Link and Motivation Inc.

Jul. 2018

Outside Director, Yappli, Inc. (current position)

Dec. 2018

Outside Director, Euglena Co., Ltd.

Feb. 2019

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

Dec. 2020

Director, CHRO, Euglena Co., Ltd. (current position)

 Reasons for nomination as candidate for outside director and outline of expected roles
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.; External Director, LANCERS, Inc.; Outside Director,
Yappli, Inc.; External Director, Money Forward, Inc.; Director, CHRO, Euglena Co., Ltd.

- 20 -

3

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

Reelection
Outside director
Independent officer
Number of years in office
4 years
Attendance to the Board of Directors meetings 13/13
Number of the Company’s common shares held –Profile, position and duties 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 of the Company (current position)
 Reasons for nomination as candidate for outside director and outline of expected roles
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.

4

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

Reelection
Outside director
Independent officer
Number of years in office
2 years
Attendance to the Board of Directors meetings 13/13
Number of the Company’s common shares held –Profile, position and duties at the Company
Nov. 2008
Director, Cancer Scan Co., Ltd. (current position)
Sep. 2014
Director, Campus for H Inc. (current position)
Feb. 2019
Outside Director (Audit & Supervisory Committee Member), Sansan, Inc. (current position)
Mar. 2019
External Director, Gaiax Co. Ltd. (current position)
Dec. 2019
Outside Director of the Company (current position)
 Reasons for nomination as candidate for outside director and outline of expected roles
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.; Outside Director (Audit & Supervisory Committee Member),
Sansan, Inc.; External Director, Gaiax Co. Ltd.

- 21 -

5

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

Reelection
Outside director
Independent officer
Number of years in office
1 yearAttendance to the Board of Directors meetings 9/10
Number of the Company’s common shares held –Profile, position and duties 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
External Director, ROHTO Pharmaceutical Co., Ltd. (current position)
Jun. 2020
Outside Director, Sanoh Industrial Co., Ltd. (current position)
Dec. 2020
Outside Director of the Company (current position)
 Reasons for nomination as candidate for outside director and outline of expected roles
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 because
he has actively provided useful advice on all aspects of the business administration of the Group, he is deemed capable ofproviding oversight and advice on the Company’s business administration as an outside director, and has once again 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; External Director, ROHTO Pharmaceutical Co., Ltd.; Outside Director,
Sanoh Industrial Co., Ltd.

6

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

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, position and duties 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
Mar. 2018
Director, MedicalNote, Inc.
Dec. 2020
Outside Director of the Company (current position)
Mar. 2021
Outside director, KAYAC Inc. (current position)
Apr. 2021
Partner, DNX Ventures (current position)
 Reasons for nomination as candidate for outside director and outline of expected roles
Ms. Mio Takaoka has professional, extensive experience and results, and considerable insight of strategic investment, newbusiness development and finance, and because she has actively provided useful advice on all aspects of the businessadministration of the Group, 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
Outside director, KAYAC Inc.; Partner, DNX Ventures- 22 -

(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 forthe planning and operation of a next-generation leader development program.
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. Akie Iriyama and Ms. Mio
Takaoka is the 10 meetings held during the time after they were appointed as director on December 22, 2020.
6. 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.
7. The Company has designated Ms. Etsuko Okajima, Mr. Yusuke Asakura, Mr. Yoshiki Ishikawa, Mr. Akie Iriyama and Ms.
Mio Takaoka as independent officers in accordance with the rules of Tokyo Stock Exchange, Inc., and has submitted a noticeof designation to the Tokyo Stock Exchange. If the proposed reelection of them is approved, the Company will continue todesignate them as independent officers.
8. The Company has entered into a liability limitation agreement with each of Ms. Etsuko Okajima, Mr. Yusuke Asakura, Mr.
Yoshiki Ishikawa, Mr. Akie Iriyama and Ms. Mio Takaoka. 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 theminimum 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 withthem.
9. The Company has entered into a directors and officers liability insurance policy (management risk protection insurance
policy) as provided for in Article 430-3, paragraph (1) of the Companies Act with an insurance company. If each candidate
is elected and assumes office as director, he or she will be included as an insured in the policy. This insurance policy covers
amounts of indemnification, litigation expenses and other costs that an insured, including the Company’s directors, would
be liable for due to corporate litigation, a third-party lawsuit, a shareholder derivative lawsuit, etc. However, as a measure
to ensure that the proper performance of duties by an insured is not impaired, the insurance policy does not cover any
damages, etc. arising from criminal acts, etc. committed by the insured. The full amount of the insurance premiums for thepolicy is borne by the Company. In addition, when the policy is renewed (July 2022), the Company plans to renew the policy
with the same terms.

- 23 -

Agenda Item No. 4:

Election of One Director in Association with Capital and Business
Alliance

Subject to your approval of Agenda Item No. 1, “Approval of Share Exchange Agreement,” and Agenda Item
No. 2, “Issue of Shares Offered for Subscription through Third-Party Allotment,” the Company proposes theelection of one new director in association with the Capital and Business Alliance.
Subject to your approval of the resolutions for Agenda Items No. 1 and 2 as per originally proposed, andsubject to the Share Exchange and the Third-Party Allotment becoming effective, the election of the candidate
director will become effective on the effective date of the Share Exchange and the Third-Party Allotment(scheduled for January 4, 2022).
The candidate is as follows.

Important positions held at othercompanies

Name

Shuji Yamaguchi

New candidate

Attendance
Attendance
to theto theBoard ofBoard ofCompany
Directors
Auditors
meetings
meetings

Executive Officer, Dentsu Japan
Network, Dentsu Group Inc.
Executive Officer, Dentsu Inc.

–/–

Shuji Yamaguchi

New candidate(Date of birth: January 4, 1966)

Number of years in office– years

Attendance to the Board of Directors meetings

–/–

–/–

Number of the Company’s common shares held –Profile, position and duties at the Company
Apr. 1989
Joined Dentsu Inc. (currently Dentsu Group Inc.)
Jan. 2017Managing Director of Digital Platform Center, Dentsu Inc.
Feb. 2017
Director, D2C Inc. (current position)
Jan. 2018
Representative Director and CEO, Dentsu Digital Inc.
Dec. 2018
Director, Dentsu Digital Inc. (current position)
Jan. 2019
Executive Officer and Managing Director of Digital Business Center, Dentsu Inc. (currently Dentsu Group
Inc.)
Jan. 2020
Executive Officer (current position) and Managing Director of Digital Business Center, Dentsu Inc.
Jan. 2020
Director, Rakuten Data Marketing, Inc. (current position)
Mar. 2020
Director, Information Services International-Dentsu, Ltd. (current position)
Mar. 2020
Director, CARTA HOLDINGS, INC. (current position)
Jan. 2021
Executive Officer, Dentsu Japan Network, Dentsu Group Inc. (current position)
 Reasons for nomination as candidate for director
Mr. Shuji Yamaguchi joined Dentsu Inc. in 1989 and has extensive operational experience and management experience,
including serving as an Executive Officer in charge of the Digital Business of that company since 2019. Therefore, because
he is expected to provide useful advice, etc. to the Company’s management and contribute to the promotion of alliance
operations with the Dentsu Group, he has been nominated as candidate for director.
 Important positions held at other companies
Executive Officer, Dentsu Japan Network, Dentsu Group Inc.; Executive Officer, Dentsu Inc.

- 24 -

(Notes)
1. There is no special relationship between the Company and Mr. Shuji Yamaguchi.
2. The Company has entered into a directors and officers liability insurance policy (management risk protection insurance
policy) as provided for in Article 430-3, paragraph (1) of the Companies Act with an insurance company. If the candidate iselected and assumes office as director, he will be included as an insured in the policy. This insurance policy covers amounts
of indemnification, litigation expenses and other costs that an insured, including the Company’s directors, would be liablefor due to corporate litigation, a third-party lawsuit, a shareholder derivative lawsuit, etc. However, as a measure to ensurethat the proper performance of duties by an insured is not impaired, the insurance policy does not cover any damages, etc.
arising from criminal acts, etc. committed by the insured. The full amount of the insurance premiums for the policy is borneby the Company. In addition, when the policy is renewed (July 2022), the Company plans to renew the policy with the sameterms.
3. If Agenda Item No. 1 and Agenda Item No. 2 are approved and adopted as originally proposed, and the Share Exchange andthe Third-Party Allotment take effect, Dentsu Group Inc. will become the parent company of the Company on the effective
date. In such case, Mr. Shuji Yamaguchi will be serving concurrently as an Executive Officer, Dentsu Japan Network of
Dentsu Group Inc., which is the Company’s parent company, and as an Executive Officer of Dentsu Inc., which is a
subsidiary of Dentsu Group Inc.

- 25 -

Agenda Item No. 5:

Election of One Company Auditor in Association with Capital andBusiness Alliance

Subject to your approval of Agenda Item No. 1, “Approval of Share Exchange Agreement,” and Agenda Item
No. 2, “Issue of Shares Offered for Subscription through Third-Party Allotment,” the Company proposes theelection of one new company auditor in association with the Capital and Business Alliance.
Subject to your approval of the resolutions for Agenda Items No. 1 and 2 as per originally proposed, andsubject to the Share Exchange and the Third-Party Allotment becoming effective, the election of the candidate
company auditor will become effective on the effective date of the Share Exchange and the Third-Party
Allotment (scheduled for January 4, 2022).
Mr. Nobuo Kojima, who currently serves as a company auditor, will leave his office by resignation at theclose of this General Meeting of Shareholders.
This proposal has been approved by the Board of Company Auditors.
The candidate is as follows.

Important positions held at othercompanies

Name

Yoshinobu Ise

New candidate

Attendance
Attendance
to theto theBoard ofBoard ofCompany
Directors
Auditors
meetings
meetings

Executive Director of Group Planning
Office, Dentsu Group Inc.
Executive Director of Dentsu
Innovation Initiative, Dentsu Group Inc.

–/–

Yoshinobu Ise

New candidate(Date of birth: September 11, 1967)

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, position and duties at the Company
Apr. 1991
Joined Dentsu Inc. (currently Dentsu Group Inc.)
Jan. 2010
General Manager of Planning Department I, Executive Office, Dentsu Inc.
Aug. 2014
Deputy General Manager of Executive Office, Dentsu Inc.
Jan. 2017
Assistant General Manager of Executive Office, Dentsu Inc.
Mar. 2017
Director, Prime Partners, Inc. (current position)
Jul. 2018
Executive Project Director of Dentsu Innovation Initiative, Dentsu Inc.
Mar. 2020
Audit & Supervisory Board Member, Information Services International-Dentsu, Ltd.
Aug. 2020
Executive Director of Dentsu Innovation Initiative, Dentsu Group Inc. (current position)
Jan. 2021
Executive Director of Group Planning Office, Dentsu Group Inc. (current position)
 Reasons for nomination as candidate for company auditor
Mr. Yoshinobu Ise has extensive operational experience and insight related to auditing, and because he is deemed capable ofproperly carrying out the duties of company auditor, he has been nominated as candidate for company auditor.
 Important positions held at other companies
Executive Director of Group Planning Office, Dentsu Group Inc.; Executive Director of Dentsu Innovation Initiative, Dentsu
Group Inc.

- 26 -

(Notes)
1. There is no special relationship between the Company and Mr. Yoshinobu Ise.
2. The Company has entered into a directors and officers liability insurance policy (management risk protection insurance
policy) as provided for in Article 430-3, paragraph (1) of the Companies Act with an insurance company. If the candidate iselected and assumes office as company auditor, he will be included as an insured in the policy. This insurance policy covers
amounts of indemnification, litigation expenses and other costs that an insured, including the Company’s company auditors,
would be liable for due to corporate litigation, a third-party lawsuit, a shareholder derivative lawsuit, etc. However, as ameasure to ensure that the proper performance of duties by an insured is not impaired, the insurance policy does not coverany damages, etc. arising from criminal acts, etc. committed by the insured. The full amount of the insurance premiums forthe policy is borne by the Company. In addition, when the policy is renewed (July 2022), the Company plans to renew thepolicy with the same terms.
3. If Agenda Item No. 1 and Agenda Item No. 2 are approved and adopted as originally proposed, and the Share Exchange andthe Third-Party Allotment take effect, Dentsu Group Inc. will become the parent company of the Company on the effective
date. In such case, Mr. Yoshinobu Ise will be serving concurrently as an Executive Director of Group Planning Office andan Executive Director of Dentsu Innovation Initiative, Dentsu Group Inc., which is the Company’s parent company.

- 27 -

Agenda Item No. 6:

Election of Financial Auditor

At the close of this General Meeting of Shareholders, the term of office of the financial auditor, Deloitte
Touche Tohmatsu LLC, will expire. Therefore, the Company proposes the election of a new financial auditor
according to the decision made by the Board of Company Auditors.
The reason for the Board of Company Auditors’ selection of KPMG AZSA LLC as candidate financial auditor
is that, since the Company will become a consolidated subsidiary of Dentsu Group Inc. as a result of theCapital and Business Alliance, the Board of Company Auditors considered that having the same financial
auditor as Dentsu Group Inc., which has appointed KPMG AZSA LLC as its financial auditor, would ensure
improvement in the effectiveness, efficiency, etc. of consolidated accounting audit and governance of theCompany Group.
If the resolution for this proposal becomes effective, KPMG AZSA LLC will assume the office of theCompany’s financial auditor at the close of this General Meeting of Shareholders, prior to the effective dateof the Share Exchange and the Third-Party Allotment (scheduled for January 4, 2022). The Company believes
that KPMG AZSA LLC is qualified to assume the office of the Company’s financial auditor prior to theeffective date of the Share Exchange and the Third-Party Allotment, since KPMG AZSA LLC has theexpertise, independence and internal control system required of the Company’s financial auditor.
The candidate financial auditor(As of August 31, 2021)

Name
Principal
office address

History

KPMG AZSA LLC
1-2 Tsukudo-cho, Shinjuku-ku, Tokyo
July 1969

Audit firm Asahi & Co. established.

July 1985

Audit firm Asahi Shinwa & Co. established through merger with Shinwa
Audit Corp.
Asahi Audit Corp. established through merger with Inoue Saito Eiwa
Audit Corp.
Renamed AZSA & Co. due to merger with AZSA & Co.

October 1993
January 2004
July 2010

Number ofcompanies
auditedStated capital

Number of
employees

Renamed KPMG AZSA LLC due to transition to a limited liability audit
corporation.

3,650 companies
JPY3,000 million
CPA:
Newly certified and junior CPA:
Professionals:
Administration:
Total:

3,121 (including 30 representative partners and 503
partners)
1,250
1,075 (including 35 specified partners including 2
representing partners)
764
6,210

(Notes)1. If the election of the candidate financial auditor KPMG AZSA LLC is approved, regarding liability for damages under
Article 423, paragraph (1) of the Companies Act, a liability limitation agreement will be executed between the Company
and KPMG AZSA LLC whereby the maximum amount of compensation will be limited to the higher of JPY30 million or
the Minimum Liability Account as referred to in Article 425, paragraph (1) of the Companies Act.
2. During the past two years, the candidate financial auditor KPMG AZSA LLC has received from the Company remuneration
for financial advice.

- 28 -

Business Report (From October 1, 2020 to September 30, 2021)
1. Current status of the SEPTENI Group(1) Business progress and results
Earnings for the fiscal year under review
Individual smartphone ownership in Japan rose to 69.3% in 2020, as the quantitative expansion continued
centered on Generation Z and the millennial generation, with the exceptionally high popularization rate ofmore than 90% of those in their 20s 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 2020,” 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.
COVID-19 had a significant impact on the Japanese economy through its global spread in 2020, and this has
temporarily affected the Group’s business results. On the other hand, the COVID-19 pandemic has also beena catalyst for bringing about a massive wave of digital transformation (DX) across all industries, and even in
the advertising industry, we have seen further growth in demand for digital marketing.
Amid this business environment, our mainstay Digital Marketing Business enjoyed increased revenue andprofit due to the expansion of existing projects and new customer acquisition against the backdrop ofincreasing demand for digital marketing from the online shift in overall consumption and from promoting
alliance operations with the Dentsu Group. The Media Platform Business suffered expanded deficit due topartial up-front investment to expand into new business segments, despite increased revenue. To expand into
new business segments, we utilized our capital to make progress in business development in the sports
domain, sharing asset domain, entertainment domain, and HR technology domain.
As a result, revenue increased to ¥21,384 million (up 19.2% year on year), non-GAAP operating profit
increased to ¥3,796 million (up 54.8% year on year), operating profit increased to ¥3,650 million (up 60.5%
year on year), and profit attributable to owners of parent increased to ¥2,604 million (up 77.8% year on year).
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 25, 2021 to pay a year-end dividend of ¥3.4
per share. Based on this decision, total dividends paid will be ¥436 million.

- 29 -

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 voluntarily 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 share-based payment expenses, impairment losses andgains or losses on the sales of non-current 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 19.2%

Non-GAAP operating profit:

Up 54.8%¥21,384 million¥3,796 million

Previous term: ¥17,938 million
Profit attributable to owners
Up 77.8%of parent:

Previous term: ¥2,452 million
Dividends per share:¥2,604 million¥3.4

Previous term: ¥1,464 million

Previous term: ¥2.0

- 30 -

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 DX centered on digitalmarketing that includes the provision of solutions using data and AI starting with the sales andoperations of digital advertisements, as well as marketing support integrating online and offline
solutions through our business alliance with the Dentsu Group.
Against the backdrop of increasing demand for digital marketing from the online shift in overall consumption,
we expanded existing projects and acquired new projects while making progress in alliance operations with
the Dentsu Group. Furthermore, we improved our profit and loss in the overseas Digital Marketing Business.
Revenue: ¥18,869 million(Up 19.4% year on year)

Non-GAAP operating profit: ¥6,991 million(Up 33.2% year on year)

Media Platform Business Major business
The Media Platform Business consists of Manga Content Business, recruitment platform business,social contribution platform business, childcare platform business, and other 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).
Although revenue increased compared to the previous fiscal year, the deficit expanded due to partial up-front
investment to expand new business segments.
Non-GAAP operating loss: ¥1,110 million(Operating loss of ¥956 million in theprevious term)

Revenue: ¥2,885 million(Up 16.0% year on year)- 31 -

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

28th term(endedSeptember 30,
2018)

29th term(endedSeptember 30,
2019)

30th term(endedSeptember 30,
2020)

31st term(endedSeptember 30,
2021)

15,272,040

16,795,505

17,937,745

21,383,875

Operating profit (Thousand yen)

976,788

183,133

2,274,396

3,650,046

Non-GAAP operating profit (Thousand yen)

1,011,156

2,064,899

2,452,413

3,796,011

847,410(546,929)

1,464,342

2,604,103

33,371,240

30,412,576

34,424,711

42,011,169

Basic earnings per share (Yen)

6.71(4.33)

11.58

20.59

Dividends per share (Yen)

2.00

2.00

2.00

3.40

Return on equity (ROE) (%)

5.5

(3.6)

9.6

15.2

Profit attributable to owners of parent(Thousand yen)
Total assets (Thousand yen)

(Note) Figures in parentheses represent losses.

- 32 -

(3) Issues to be addressed
The Group has made the following updates to its Midterm Business Policies announced in October
2020. With “domain expansion” as a continued midterm theme, we aim to capture issues to handle thecreation of a system to respond to the acceleration in DX and to achieve sustainable growth and enhance
corporate value over the medium to long term.
In the Digital Marketing Business, we will strengthen our expansion into the EC advertising domain,
promote an improved Group system in the data solutions domain, and promote a capital and businessalliance with the Dentsu Group.
In the Media Platform Business, we will concentrate management resources in higher-growth domains,
focus on the user billing domain, and strengthen business development in the D2C domain.
In our expansion into new business segments, we will work to capture DX demand through an industry
focus and promote the commercialization of the HR technology domain.
Furthermore, in terms of the three-year performance targets in the Midterm Business Policies
announced in October 2020, the effects of promoting the capital and business alliance with the Dentsu
Group are currently difficult to reasonably calculate, and we have left them as undetermined. At thestage in which the performance targets can be disclosed, we will promptly announce them.
(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
Effective April 1, 2021, the Company transferred all shares of Pharmarket Co., Ltd. to KAKEHASHI
Inc.
(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
Nothing noteworthy to report.
(9) Acquisition or disposal of shares, other equities or share options of other companies
Nothing noteworthy to report.
(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.

475,000

100.0%

Manga Content BusinessCompany name

Major business(Notes)1. The Company owns a total of 36 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.

- 33 -

(11) Major offices (as of September 30, 2021)
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, 2021)
Number of employees

Increase/decrease from the previous term-end

1,251

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

(13) Major creditors (as of September 30, 2021)
Creditor

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

2,600

Sumitomo Mitsui Banking Corporation

250(14) Other important matters regarding the current status of the GroupAt a Board of Directors meeting held on October 28, 2021, the Company approved a resolution toconclude a capital and business alliance agreement (“Capital and Business Alliance Agreement”) with
Dentsu Group Inc. Furthermore, at the same Board of Directors meeting, based on the Capital andBusiness Alliance Agreement, the Company approved a resolution to conclude a share exchange
agreement with Dentsu Direct Inc. (“Dentsu Direct”), a wholly-owned subsidiary of Dentsu Group Inc.,
to conduct a share exchange (“Share Exchange”) with Dentsu Direct, whereby the Company will be awholly-owning parent company through the share exchange and Dentsu Direct will be a wholly-owned
subsidiary through the share exchange, to issue new shares through third-party allotment to Dentsu
Group Inc. (“Third-Party Allotment”), and to conclude a share transfer agreement with Dentsu Group
Inc. to acquire a part of the common shares (25.00%) of Dentsu Digital Inc. (“Dentsu Digital”) owned
by Dentsu Group Inc. The Share Exchange and the Third-Party Allotment are collectively referred to as
the “Transaction” below.
Through the Transaction, we plan to make Dentsu Direct a wholly-owned subsidiary of the Company.
Furthermore, because the Transaction will result in Dentsu Group Inc. holding 52.01% of theCompany’s voting rights, we plan to make Dentsu Group Inc., which had been one of the other affiliates,
the parent company of the Company. Moreover, through the Transaction, we plan to make Dentsu
Digital an equity-method affiliate.

- 34 -

2. Status of the Company(1) Matters regarding shares (as of September 30, 2021)
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

8,805 (961 decrease 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.

14,419,000

11.25

Mamoru Nanamura

12,450,500

9.71

Custody Bank of Japan, Ltd. (Trust Account)

10,174,800

7.94

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

5,939,400

4.63

STATE STREET BANK AND TRUST COMPANY 505001

2,252,200

1.76

Hiroshi Shimizu

2,000,000

1.56

STATE STREET BANK AND TRUST COMPANY 505019

1,961,300

1.53

J.P. MORGAN BANK LUXEMBOURG S. A. 381572

1,771,200

1.38

The Master Trust Bank of Japan, Ltd. (officer remuneration BIP
trust account 76034)

1,739,200

1.36(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) Status of shares delivered to the Company’s officers as remuneration for the execution of duties during
the business year under review
Not applicable.
6) Other important matters regarding shares
Not applicable.

- 35 -

(2) Matters regarding share options, etc.
1) Status of share options, etc. held by officers of the Company (as of September 30, 2021)
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.

- 36 -

(3) Matters regarding company officers (as of September 30, 2021)
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
External Director, FOOD & LIFE COMPANIES LTD.

Director

Etsuko Okajima

CEO, ProNova Inc.
External Director, MARUI GROUP Co., Ltd.
External Director, LANCERS, Inc.
Outside Director, Yappli, Inc.
External Director, Money Forward, Inc.
Director, CHRO, Euglena Co., Ltd.

Director

Yusuke Asakura

Representative Director, Signifiant Inc.

Director

Yoshiki Ishikawa

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

Director

Akie Iriyama

Professor, Business School, Waseda University
External Director, ROHTO Pharmaceutical Co., Ltd.
Outside Director, Sanoh Industrial Co., Ltd.

Director

Mio Takaoka

Outside director, KAYAC Inc.
Partner, DNX Ventures

Full-time Company Auditor

Nobuo Kojima

Full-time Company Auditor

Tadahiro Mouri

Company Auditor

Mamoru Furushima

Senior Partner, Trident Lawyer Corporation
Outside 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) Company auditors who resigned during the business year under review
Name
Muneyoshi Nomura

Date of retirement
December 22, 2020

Reason for retirement
Resignation

Position at the Company and important
positions at other companies at the time ofretirement
Full-time company auditor(Notes)
1. Directors Etsuko Okajima, Yusuke Asakura, Yoshiki Ishikawa, Akie Iriyama and Mio Takaoka are outside directors.
2. Company auditors Tadahiro Mouri, 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, Yoshiki Ishikawa, Akie Iriyama and Mio Takaoka
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.
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.
6. The Company has entered into a directors and officers liability insurance policy (management risk protection insurance
policy) as provided for in Article 430-3, paragraph (1) of the Companies Act with an insurance company. The scope of
insureds in the insurance policy includes all directors, company auditors, and executive officers at the Company and all of- 37 -

its subsidiaries, and the insureds will not bear the insurance premiums. This insurance policy covers amounts ofindemnification, litigation expenses and other costs that an insured would be liable for due to corporate litigation, a thirdparty lawsuit, a shareholder derivative lawsuit, etc. However, as a measure to ensure that the proper performance of duties
by an insured is not impaired, the insurance policy does not cover any damages, etc. arising from criminal acts, etc.
committed by the insured.

3) Remunerations, etc. to directors and company auditors(a)

Policy for determining details of remunerations, etc. for officers
The Company adopted a resolution on the policy for determining details of individual
remunerations, etc. for directors, etc. at the Board of Directors meeting held on November 22,
2016.
Furthermore, regarding remuneration, etc. for individual directors in the business year underreview, the Board of Directors has deemed that the method of determining the details of the
remuneration, etc. and the details of the decided remuneration, etc. are consistent with thedetermination policy. The Board of Directors has also reported on performance evaluations
including the approach to evaluating independent outside directors and their personal evaluation
to confirm the validity of remuneration levels, and has confirmed that they were decided whilereferencing the opinions of independent outside directors and that the evaluations follow thedetermination policy.
The details of the policy for determining details of individual remunerations, etc. for directors,
etc. are as follows.
a. Basic policy
Remuneration for directors (excluding outside directors) is composed of basic remuneration(monthly cash remuneration) and performance-linked remuneration. The amount of basic
remuneration paid will be an amount that considers the rate of change in performance of thecontrolling company in the business year under review on top of the amount of remuneration
paid in the previous business year. However, fixed upper and lower limits will be set in the
remuneration revisions. Furthermore, the total amount of remuneration paid as cash every
month must be within the total remuneration limit for directors decided by the general
meeting of shareholders. Performance-linked remuneration will take the form of share-based
remuneration using the officers remuneration BIP trust.
Remuneration for outside directors is composed of only monthly basic remuneration (fixedwith no changes based on performance).
Remuneration for company auditors is composed of only monthly basic remuneration (fixedwith no changes based on performance).
b. Concerning other determination for remunerations, etc.
Following the above basic policy a., basic remuneration for directors (excluding outside
directors) will be within the total limit of director remuneration set by a resolution of thegeneral meeting of shareholders (Note 1), and individual and specific allocations will bedecided by the Group President and Chief Executive Officer referencing the opinions ofoutside directors. Regarding performance-linked remuneration, based on the share-based
remuneration system using the officers remuneration BIP trust resolved by the general
meeting of shareholders, “share delivery rules” will be concluded with the trustee of the trust(Note 2), and according to these rules, the trustee will delivery shares and pay cash.
Following the above basic policy a., remuneration for outside directors will be within the total
limit of director remuneration set by a resolution of the general meeting of shareholders (Note1), and individual and specific allocations will be decided by the Group President and Chief
Executive Officer referencing the opinions of outside directors.
Following the above basic policy a., remuneration for company auditors will be within the
total limit of company auditor remuneration set by a resolution of the general meeting ofshareholders (Note 3), and individual and specific allocations will be decided through- 38 -

discussions with the company auditors.
(Notes)
1. Up to ¥600 million per year for the Company’s directors (decided by a resolution at the 23rd Ordinary General Meeting of
Shareholders held on December 20, 2013).
2. Trust-related operations will be conducted by Mitsubishi UFJ Trust and Banking Corporation, etc. and share-related
operations will be conducted by DSB Co., Ltd.
3. Up to ¥50 million per year for the Company’s company auditors (decided by a resolution at the 9th Ordinary General
Meeting of Shareholders held on December 14, 1999).

(b) Total amount of remunerations, etc.
Total amount of remunerations, etc. by type
Performance-linked
remuneration, etc.

Number ofpayeesTotal amount of officers’
remunerations, etc.

Director(of which Outside
Director)

8(5)¥319,703 thousand(¥54,000 thousand)¥223,110 thousand(¥54,000 thousand)¥96,593 thousand(¥– thousand)Company Auditor(of which Outside
Company Auditor)

5(3)¥37,500 thousand(¥21,000 thousand)¥37,500 thousand(¥21,000 thousand)¥– thousand(¥– thousand)CategoryBasicremuneration

Non-monetary remuneration,
etc.

(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 ¥329,033 thousand.
2. The number of payees includes one company auditor who retired at the close of the 30th Ordinary General Meeting of
Shareholders held on December 22, 2020.
3. The Company is introducing a performance-linked share-based remuneration system using the officers remuneration BIP(Board Incentive Plan) trust scheme for directors of the Company (excluding outside directors and those who are nonresidents of Japan). Covenants, etc. at the time of allotments are provided in “(a) Policy for determining details of
remunerations, etc. for officers,” and the delivery status in the business year under review is provided in “2. (1) 5) Status ofshares delivered to the Company’s officers as remuneration for the execution of duties during the business year under review.”
4. The performance indicator associated with performance-linked remuneration, etc. is consolidated Non-GAAP operating
profit, and those results are provided in “1. (1) Business progress and results,” and “1. (2) Trends in financial position andprofit and loss.” As the reason for selecting this indicator, the Company has deemed that this is an appropriate indicator forevaluating the achievement of improvements to the medium- to long-term corporate value. In calculating performancelinked remuneration, basic points are allotted in a set period during each business year according to the role of each director
and the level of achievement, etc. of performance targets during the covered trust period of the officers remuneration BIP
trust. After the conclusion of the covered period, additional points allotted to persons covered by the system on the last dayof the final business year of the covered period are cumulatively added to the cumulative value of basic points (“Cumulative
Points”).
A number of the Company’s shares equal to the number of Cumulative Points is delivered or paid to persons covered by thesystem as share-based remuneration. Furthermore, 50% of the shares corresponding to the points in question (share of lessthan one unit rounded down) will be delivered as shares, and from the standpoint of securing funds to pay taxes, theremainder will be converted into cash, and cash corresponding to the amount converted to cash will be paid.
5. At the 23rd Ordinary General Meeting of Shareholders held on December 20, 2013, the amount of cash remuneration for
directors was set at up to ¥600 million annually (not including the portion of employee salaries paid to directors concurrently
serving as employees). The number of directors as of the conclusion of this ordinary general meeting of shareholders iseight.
Furthermore, in a separate framework from cash remuneration, at the 26th Ordinary General Meeting of Shareholders held
on December 20, 2016, the amount of trust funds provided to the trust as funds for the acquisition of the Company’ sharesassociated with the points allotted to directors (excluding outside directors and non-residents of Japan) as performancelinked share-based payments (officers remuneration BIP trust) was set at a maximum of ¥700 million, and the total points
at a maximum of 2,800,000 points (corresponding to 2,800,000 shares) for three business years. The number of directors asof the conclusion of this ordinary general meeting of shareholders (excluding outside directors and non-residents of Japan)
is six.
6. The amount of cash remuneration for company auditors was set at a maximum of ¥50 million annually at the 9th Ordinary
General Meeting of Shareholders held on December 14, 1999. The number of company auditors as of the conclusion of thisordinary general meeting of shareholders is one.

- 39 -

7. The Board of Directors has delegated the decisions on the amounts of individual director remuneration to Koki Sato,
Representative Director, Group President and Chief Executive Officer. The reason for the delegation is that the Board of
Directors deemed that the Group President and Chief Executive Officer is best suited to conduct evaluations of the division
for which each director is responsible while considering the Company’s overall performance, etc. Furthermore, in deciding
the details to be delegated, the Board of Directors reports on performance evaluations including the approach to evaluating
independent outside directors and their personal evaluation to confirm the validity of remuneration levels, and decides
remuneration levels while referencing the opinions of independent outside directors.

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

Name

Important positions held at other companies

Relationship with the Company

CEO, ProNova Inc.

There is no important business
relationship.

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

Director

Director

Director

Director

Etsuko Okajima

Yusuke Asakura

Yoshiki Ishikawa

Akie Iriyama

Mio Takaoka

Company Auditor Tadahiro Mouri

Company Auditor Mamoru FurushimaCompany Auditor Takeshi Okuyama

External Director, LANCERS, Inc.

There is no business relationship.

Outside Director, Yappli, Inc.

There is no business relationship.

External Director, Money Forward, Inc.

There is no business relationship.

Director, CHRO, Euglena Co., Ltd.

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.

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

There is no business relationship.

External Director, Gaiax Co. Ltd.

There is no business relationship.

Professor, Business School, Waseda
University

There is no business relationship.

External Director, ROHTO PharmaceuticalCo., Ltd.

There is no business relationship.

Outside Director, Sanoh Industrial Co., Ltd.

There is no business relationship.

Outside director, KAYAC Inc.

There is no business relationship.

Partner, DNX Ventures

There is no business relationship.

None.

There is no business relationship.

Senior Partner, Trident Lawyer Corporation

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.

(b) Outline of major activities and duties carried out in relation to expected roles in the business year
under review
Category

Director

Name

Etsuko Okajima

Outline of major activities and duties carried out in relation to expected roles
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, she has expressed
opinions appropriately as a member of the Nomination Advisory Committee,
which is a voluntary advisory organization of the Company. She has also
exchanged information and shared understanding on the Group’s management,
the Board of Directors’ activities, and the successor development plan for
managers, etc. in regular executive sessions composed of outside directors held
quarterly.

- 40 -

CategoryDirector

Director

Director

Director

Name

Outline of major activities and duties carried out in relation to expected roles

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,as the chairperson of the Nomination Advisory Committee, which is a voluntary
advisory organization of the Company, he has led deliberations on nomination of
directors and compiled proposed recommendations as the committee. He has also
exchanged information and shared understanding on the Group’s management,
the Board of Directors’ activities, and the successor development plan for
managers, etc. in regular executive sessions composed of outside directors held
quarterly.

Yoshiki Ishikawa

Mr. Ishikawa attended all Board of Directors meetings held during the businessyear under review, where he made comments primarily from his professional
viewpoints as a preventive 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 avoluntary advisory organization of the Company. He has also exchanged
information and shared understanding on the Group’s management, the Board of
Directors’ activities, and the successor development plan for managers, etc. inregular executive sessions composed of outside directors held quarterly.

Akie Iriyama

During the business year under review, Mr. Iriyama attended 9 of the 10 Board of
Directors meetings held after he assumed his position on December 22, 2020,
where he made comments primarily from his operational experience as aconsultant, along with professional, extensive experience and results andconsiderable insight as a researcher specialized in management strategies and theglobal management field. Moreover, he has expressed opinions appropriately as amember of the Nomination Advisory Committee, which is a voluntary advisoryorganization of the Company. He has also exchanged information and sharedunderstanding on the Group’s management, the Board of Directors’ activities,
and the successor development plan for managers, etc. in regular executive
sessions composed of outside directors held quarterly.

Mio Takaoka

During the business year under review, Ms. Takaoka attended all 10 Board of
Directors meetings after she assumed her position on December 22, 2020, where
she made comments primarily from her professional, extensive experience andresults and considerable insight of strategic investment, new businessdevelopment and finance. Moreover, she has expressed opinions appropriately asa member of the Nomination Advisory Committee, which is a voluntary advisoryorganization of the Company. She has also exchanged information and sharedunderstanding on the Group’s management, the Board of Directors’ activities,
and the successor development plan for managers, etc. in regular executive
sessions composed of outside directors held quarterly.

Company Auditor Tadahiro Mouri

During the business year under review, Mr. Mouri attended all 10 Board of
Directors meetings and all 10 Board of Company Auditors meetings after heassumed his position on December 22, 2020, where he made comments primarily
from his considerable insight and extensive operational experience of auditing.
He has also collaborated with and exchanged information with outside officers byparticipating in regular executive sessions composed of independent outside
directors.

Company Auditor Mamoru Furushima

Mr. Furushima attended all Board of Directors meetings and all Board ofCompany Auditors meetings held during the business year under review, where
he made comments primarily from his professional viewpoints as a certified
public accountant and as a lawyer. He has also collaborated with and exchanged
information with outside officers by participating in regular executive sessions
composed of independent outside directors.

Company Auditor Takeshi Okuyama

Mr. Okuyama attended all Board of Directors meetings and 13 of 14 Board ofCompany Auditors meeting held in business year under review, where he madecomments primarily from his professional viewpoints as a lawyer. He has alsocollaborated with and exchanged information with outside officers byparticipating in regular executive sessions composed of independent outside
directors.

- 41 -

(4) Financial auditor (as of September 30, 2021)
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¥51,001 thousand(b) Total amount of cash and other economic benefits to be paid to the financial auditor by the Company
and its subsidiaries¥51,001 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” releasedby 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(1) of the Companies Act.

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
of an 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.

- 42 -

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 ¥3.4 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.

- 43 -

(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.
- 44 -

(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
the Group 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 forthe 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.

- 45 -

(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 eight directors, including five outside directors. In addition, four
company auditors including three 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 toensure the execution of duties in compliance with laws and regulations and the Articles of Incorporation
by means 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 three outside company
auditors. During the business year under review, the Board of Company Auditors held meetings 14
times to mainly receive reports from full-time company auditor on the status of operations of theCompany and exchange 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.

- 46 -

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

31st term(At September
30, 2021)(Reference)

30th term

16,899,990
16,085,450
119,530
12,941
333,622

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

33,451,533

27,372,868

Property, plant andequipment

310,284

319,851

Right-of-use assets

1,653,760

1,007,726

Intangible assets

67,29083,577

Investments accounted forusing equity method

997,026

963,570

Other financial assets

3,929,443

3,546,126

Other non-current assets
Deferred tax assets

32,646
1,569,185

9,528
1,121,465

Total non-current assets

8,559,635

7,051,843

Total current assets
Non-current assets

Account(At September
30, 2020)

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

42,011,169(At September
30, 2021)(Reference)

30th term(At September
30, 2020)

14,043,615
2,549,116
1,024,502
2,711,491

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

20,328,724

15,313,926

3,082,067
155,090

3,121,500
177,928

3,237,157

3,299,428

23,565,881

18,613,354

Share capital

2,125,384

2,125,384

Capital surplus
Treasury shares
Retained earnings
Other components ofequity3,901,272(1,691,842)
14,322,283

3,664,788(1,691,842)
11,971,086(230,678)(276,037)

18,426,419

15,793,379

18,86917,978

Total equity

18,445,288

15,811,357

Total liabilities and equity

42,011,169

34,424,711

Total current liabilities
Non-current liabilities
Other financial liabilities
Provisions
Total non-current
liabilities
Total liabilities
EquityEquity attributable toowners of parent

Total equity attributableto owners of parent
Non-controlling interests
Total assets

31st term

34,424,711(Note) Figures are rounded to the nearest unit.

- 47 -

Consolidated Statement of Profit or Loss
31st term(From October 1, 2020
to September 30, 2021)

Account(Thousand yen)
(Reference)
30th term(From October 1, 2019
to September 30, 2020)

Revenue
Cost of sales

21,383,875
4,098,765

17,937,745
3,341,576

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

17,285,110
13,744,932
395,197285,329

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

Operating profit
Finance income
Finance costs
Share of profit of investments accounted for using equity
method3,650,046
251,246
48,3312,274,396
17,85180,38557,756113,258

Profit before tax
Income tax expense

3,910,716
1,303,827

2,325,120
854,462

Profit

2,606,889

1,470,658

Profit attributable to:
Owners of parent
Non-controlling interests

2,604,103
2,786

1,464,342
6,316

Total

2,606,889

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

- 48 -

(Reference) Consolidated Statement of Comprehensive Income

Account
ProfitOther 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

31st term(From October 1, 2020
to September 30, 2021)
2,606,889(Thousand yen)
30th term(From October 1, 2019
to September 30, 2020)
1,470,658

8,301(209,500)

24,21012,849(2,743)
11,01645,359(201,227)

Total comprehensive income

2,652,248

1,269,431

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

2,649,462
2,786

1,263,115
6,316

Comprehensive income

2,652,248

1,269,431

Total other comprehensive income, net of tax(Note) Figures are rounded to the nearest unit.

- 49 -

Consolidated Statement of Changes in Equity
31st term (From October 1, 2020 to September 30, 2021)(Thousand yen)
Equity attributable to owners of parent

Balance at October 1,
2020
ProfitOther comprehensive
incomeTotal comprehensive
incomeIssuance of newsharesDividends of surplus
Other
Total transactions
with owners
Balance at September
30, 2021

Noncontrollinginterests

Total equity

17,97815,811,357

2,604,103

2,786

2,606,889

45,35945,359–45,3592,604,103

45,3592,649,462

2,786

2,652,248

–

–

–

–

–

–

–
236,484––(252,906)–––(252,906)
236,484–(1,895)(252,906)
234,589–

236,484–(252,906)–(16,422)(1,895)(18,317)

2,125,384

3,901,272(230,678) 18,426,419

18,86918,445,288

Othercomponentsof equity

Share capital

CapitalsurplusTreasurysharesRetainedearnings

2,125,384

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

11,971,086

–

–

–

2,604,103

–

–

–

–

–

–

–

–

–

–

–
–

(1,691,842) 14,322,283(Note) Figures are rounded to the nearest unit.

- 50 -

Total(276,037) 15,793,379

(Reference) 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
Other
Total transactions
with owners
Balance at September
30, 2020

Noncontrollinginterests

Total equity

14,796,114

12,84014,808,954(13,035)–(13,035)(52,914) 14,783,079

12,84014,795,919

6,316

1,470,658(201,227)–(201,227)(201,227)

1,263,115

6,316

1,269,431

–

–

70

–

70

–
–

(252,886)
21,897–(21,896)(252,886)1–(1,178)(252,886)(1,177)––(230,989)(21,896)(252,815)(1,178)(253,993)

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(52,914)–––

2,125,314

3,664,788–––

1,464,342–

1,464,342

–

–

–

–

(201,227)–––

1,464,342

70

–

–

–
–

–
–

70
2,125,384–(13,035)(1,691,842) 10,737,733(Note) Figures are rounded to the nearest unit.

- 51 -

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

31st term

9,158,702
6,284,250
400,4121,001
112,004
1,919,999

70,000Other
Allowance for doubtful accounts
Non-current assets

253,522(22,489)
7,034,032

Property, plant and equipment
Buildings
Tools, furniture and fixtures

119,088
26,27883,224
9,584
69,74869,120627
6,845,196
2,334,705

Shares of subsidiaries andassociates

2,303,098

Long-term loans receivable fromsubsidiaries and associates

1,280,000

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

779,978
93,666
128,161(74,415)

Total assets

Liabilities
Current liabilities

140,000

Current portion of long-termloans receivable fromsubsidiaries and associates

Other
Intangible assets
Software
Other
Investments and other assets
Investment securities

Account(At September 30, 2021)

16,192,735(Thousand yen)
31st term(At September 30, 2021)

2,049,448

Current portion of long-termborrowings

600,000

Accounts payable - otherAccrued expenses
Income taxes payable
Deposits received
Provision for bonuses

563,887
19,340747,985
13,723
63,975

Other

40,536

Non-current liabilities

2,281,708

Long-term borrowings

2,000,000

Provision for share awards for
directors (and other officers)
Other

260,053
21,654

Total liabilities

4,331,156

Net Assets
Shareholders’ equity
Share capital
Capital surplus
Legal capital surplus
Other capital surplus
Retained earnings
Legal retained earnings
Other retained earnings

11,866,696
2,125,384
2,720,904
2,533,932
186,9718,712,250
70,867
8,641,383

General reserve

400,000

Retained earnings brought
forwardTreasury shares

8,241,383(1,691,841)

Valuation and translation
adjustments(5,118)Valuation difference on
available-for-sale securities

6,227

Deferred gains or losses onhedges(11,345)

Total net assets

11,861,578

Total liabilities and net assets

16,192,735(Note) Figures are rounded down to the nearest unit.

- 52 -

Non-consolidated Statement of Income(Thousand yen)
31st term(From October 1, 2020
to September 30, 2021)

Account
Operating revenue
Operating expenses

3,899,443
2,218,155

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

1,681,288
291,501
16,96424,299249,075
1,162

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

102,352
23,47657,50913,1508,216

Ordinary profit
Extraordinary income
Gain on sale of shares of subsidiaries and associates
Reversal of allowance for doubtful accounts for subsidiaries and associates

1,870,437
346,082
300,000
46,081

Extraordinary losses
Loss on valuation of shares of subsidiaries and associates
Loss on valuation of investment securities
Other

1,111,977
791,665
234,449
85,863

Profit before income taxes
Income taxes - current
Income taxes - deferred

1,104,541
131,556(56,912)

Profit

1,029,897(Note) Figures are rounded down to the nearest unit.

- 53 -

Non-consolidated Statement of Changes in Equity
31st term (From October 1, 2020 to September 30, 2021)(Thousand yen)
Capital surplus
Share capital Legal capital Other capital Total capitalsurplussurplussurpluses
Balance at
beginning of
periodChanges during
periodDividends ofsurplusProfitNet 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
forward7,467,870

Valuation and translation adjustments

Total
retainedearnings
7,938,737

Valuation
DeferredTotal
difference on
Treasurygains orshareholders’ availableshareslosses onequityfor-salehedgessecurities

2,125,384

2,533,932

186,971

2,720,904

70,867400,000

–

–

–

–

–

–

(256,384)(256,384)

–

–

–

–

–

–

–

1,029,897

1,029,897

–

–

–

–

–

–

–

–

–

–
–

–

–

–

–

–

–

773,513773,513

2,125,384

2,533,932

186,971

2,720,904

70,867400,000

8,241,383

8,712,250(Note) Figures are rounded down to the nearest unit.

- 54 -(1,691,841) 11,093,183

Totalvaluationandtranslation
adjustments

Total net
assets(717)(24,194)(24,912) 11,068,271(256,384)–––(256,384)

1,029,897–––

1,029,897

–

6,945

12,84819,793

19,793

773,513

6,945

12,84819,793

793,306(1,691,841) 11,866,696

6,227(11,345)(5,118) 11,861,578

Board of Company Auditors’ Report

Audit Report
With respect to the directors’ performance of their duties during the 31st business year from October 1, 2020
to September 30, 2021, the Board of Company Auditors has prepared this audit report after deliberations
based on 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 contents of the Board of Directors’
resolutions regarding the development and maintenance of the systems to ensure compliance with laws
and regulations and the Articles of Incorporation by directors when executing their duties stated in theBusiness Report and other systems that are set forth in Article 100, paragraphs (1) and (3) of theRegulation for Enforcement of the Companies Act as being necessary for ensuring the appropriatenessof the corporate affairs of the corporate group comprised of a stock company and its subsidiaries, andthe status of the establishment and operation of the systems (internal control systems) based on such
resolutions. With respect to the 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.

- 55 -

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 25, 2021
Board of Company Auditors
SEPTENI HOLDINGS CO., LTD.
Full-time Company Auditor Nobuo Kojima(Seal)

Full-time Company Auditor Tadahiro Mouri(Seal)

Company Auditor

Mamoru Furushima(Seal)

Company Auditor

Takeshi Okuyama(Seal)(Note)
Full-time company auditor Tadahiro Mouri, 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.

- 56 -