This document is an unofficial translation of the Notice of 28th Annual General Shareholders’ Meeting andis provided for your convenience only, without any warranty as to its accuracy or as to the completeness of
the information. The Japanese original version of the document is the sole official version.

Notice of Convocation of
the 28th Ordinary General
Meeting of Shareholders
Date/Time
September 25, 2024 (Wednesday) at 10:00AM (Doors open at 9:30AM)

Location
1-3-2, Otemachi, Chiyoda-ku, Tokyo
Keidanren Hall, 2F, Keidanren Kaikan (Please refer to the venue guide at the end.)

Matters to be resolved
Proposal1: Appropriation of surplus
Proposal2: Election of four (4) Directors (excluding Directors who are
Audit Committee Members)
Proposal3: Election of Three (3) Directors as Audit Committee Members
Proposal4: Revision of the performance-based stock compensation plan for directors (excluding membersof the Audit and Supervisory Committee and outside directors)”Matters on corporate officers,” “Officers’ compensation plan” and “Compliance and risk management” in the
28th business report contains content highly relevant to the documents for reference for the shareholders’ meeting
listed in the electronically provided matters; therefore, the order of listing was rearranged.

AVANT GROUP CORPORATION Securities Code: 3836

-1-

To Our Shareholders
We sincerely appreciate your continued understanding and support of ourgroup's business.
Fiscal Year 2024 (the 12 months ending June 2024) was the first year of “BE
GLOBAL 2028”, our medium-term management plan that aims to improve corporate
value. Each of our business units focused on achieving their targets, and mostmajor KPIs were successfully accomplished.
On the other hand, we were also able to clarify issues that need to be dealt
with to accomplish BE GLOBAL 2028. In our plan, we set out a vision of becoming
a world-class software company. The aim is to offer services that are usefulin a global society where software is becoming increasingly important.
To this end, our company has put in place several strategic KPIs (Key
Performance Indicators).
First is an ability that will allow the creation of individual value, something
we define as “value creation productivity,” which is a measure of operating
profit per employee. This indicator can highlight how enhanced value cancontribute to customers through the use of intellectual property, or software.
Significant improvement in this metric indicates progress in innovation that
could be the result of implementation of a new business model or other factors.
Second is software gross profit. This is one driver to enhance productivity
through a process of value creation that can measure the quality of softwaresales. Higher growth in this KPI than growth in overall sales, even if only
moderate, can indicate a shift in the business model from services to software.
It is a leading indicator of improved value creation productivity.
Third is Return On Equity (ROE). This is an important indicator to see whether
the capital of a company is being effectively reinvested to improve long-term
corporate value.
For FY6/25, an important strategic issue for us is to keep moving towards
achieving the strategic KPIs in the BE GLOBAL 2028 plan. As well as each groupcompany aiming to achieve their own targets, we will continue to focus on
accelerating growth in software gross profit, which is a leading indicator forthe other two KPIs. We will do this from full-fledged sales of DX cloud platform
TRINITY BOARD for board meetings, that we developed in FY6/24 and for corporate
value analysis platform AVANT Compass.

-2-

The BE GLOBAL 2028 plan sets out our commitment to achieving FY6/28 targets.
Our approach is to go about this with a certain level of freedom. We will takea creative approach this year as part of our aim to become a world-classsoftware company.
Tetsuji Morikawa, Group CEO and President, AVANT GROUP CORPORATION.

-3-

Avant Group's Philosophy System
Our group of businesses joins forces so that we can achieve the mission we
have held since incorporation, namely extending accountability, based on a
corporate philosophy of creating a company that can last for 100 years. Our
vision is “BE GLOBAL.” We aim to evolve into a world-class software company
and play a big part in the development of the economy as well as wider society.

VisionBecoming a software company that
contributes to enhancing corporate value

BE GLOBAL- World-class Software Company Strategic initiative
MissionSpreading Accountability

Software driven strategy- Turning management information into a map of the future Strategy
Philosophy

Creating a 100-year Company- A company where everyone is passionate about value creation -

OPEN

VALUE

STRETCH

Values that support our corporate philosophy

In 2021, our group set out a strategic initiative to accomplish a vision“becoming a software company that increases corporate value.” This is basedon two initiatives, that we will contribute to an improvement of corporate
value through digitization (DX) of management and also our core business modelthat draws on our roots as a software company. This strategic initiative wasdeveloped when formulating our previous medium-term management plan “BE GLOBAL
2023.” We maintain a similar direction of travel in our current, updated
medium-term management plan “BE GLOBAL 2028.”
A software-driven strategy concept underpins our processes in planning for-4-

BE GLOBAL 2028, in which we look to create synergies in the group by leveraging
software and achieving our strategic targets. We look to provide value to theboard of directors from data created at each group company. This should
facilitate a transformation of the board of directors from the perspective ofcorporate value into a forum for discussion, and enable more advanced decisionmaking by the management team.
The promotion of these strategic activities will enhance our ability to makea contribution to our customers and achieve our vision of becoming a worldclass software company.

-5-

Avant Group's Medium-Term Management Plan
Aims of the New Medium-term Management Plan BE GLOBAL 2028
In August 2023, our group formulated BE GLOBAL 2028, a medium-term management
plan covering the five years through FY6/28, during which we continue to aim
to become a world-class software company.
BE GLOBAL 2028 aims to realize a value creation spiral, starting with value
creation productivity improvements, driven by a software-driven strategy.
Through value creation productivity, as measured by operating profit per
employee, we can enable returns through lower compensation and investments inhuman resources, which can realize human capital value creation. This enables
the creation of both services and software which can lead to sustainablebusiness growth. As corporate value increases, so will the ability to raise
capital, which can enhance the capacity available for business investment,
further improving value creation productivity.
Our target of this kind of value creation spiral is to achieve our strategic
initiative of becoming a software company that can improve corporate value.
Review of the first year of the new medium-term management plan BE GLOBAL 2028
FY6/24 was the first year of BE GLOBAL 2028, and all major KPI goals weresuccessfully achieved.
Financial targets like sales, operating profit and net profit beat targets
while other value creation productivity measures such as operating profit per
employee exceeded the plan by 8.7% while software gross profit was 26.6% higher
than plan.
FY24
FY23

FY28
Rate toActualActualYoYPlan

the plan
Net sales

21,424M

24,419M+1.7%+14.0%

40,000~45,000M

Operating Income (OI)

3,289M

4,099M+6.5%+24.6%

9,000~
11,000M

Operating Margin

15.4%

16.8%

+0.7pts+1.4pts

20-24%-6-

6,000~7,000MNet Income

2,094M

2,850M+14.0%+36.1%OI / person

2.5M

2.8M

+8.7%

+12.0%

3.9M

Software Gross Profit

2,367M

2,442M+26.6%+3.2%

5,500~
6,000M

ROE

18.3%

22.3%

+3.0pts+4.0pts

20% or
more

DOE

4.9%

5.5%

+0.2pts+0.6pts

8.1% ormore

Dividend

15 yen19 yen±0+26.7%

51 yen or
more

Note 1) Operating profit per employee is based on average number of employees
during the period.
Note 2) Software gross profit is based on unified Avant group definitions thattake into account lead times for calculation (software sales – software purchase– development division costs).
Note 3) FY6/24 dividend assumes the No.1 proposal on the agenda for the general
meeting “appropriation of surplus” is approved according to the original
proposition.
Outlook of the New Medium-Term Management Plan BE GLOBAL 2028
As we exceeded the plan in FY6/24, the major KPIs for FY6/25 were higher than
the targets set in BE GLOBAL 2028, apart from that for DOE. Despite this, OP
per employee, a metric that measures value creation productivity increased byonly 5.6% YoY, despite exceeding the plan. Software gross profit, a measure of
the progress of a software-driven strategy was just 0.7% higher than plan and+1.3% YoY, so progress lagged other metrics.
This indicates a lack of clarity in the push to improve the software-driven
strategy and value creation productivity. As a result, we will start fullfledged sales of the DX cloud platform TRINITY BOARD for board meetings preparedin FY6/24, as well as corporate value analysis platform AVANT Compass. By
providing management information for discussion from a corporate value
perspective at board meetings of customer companies, we aim to facilitate moresophisticated decision-making. By establishing these environments, we will
enhance the value of information provided by each group company to step up
growth of software gross profit, and improve value creation productivity.

-7-

FY25
FY28

FY24
Rate toActual

Plan

YoY

Plan

BG28
Net sales

24,419M

28,800M+6.8%+17.9%

40,000~45,000M

Operating Income (OI)

4,099M

4,900M+19.0%+19.5%

9,000~
11,000M

Operating Margin

16.8%

17.0%

+1.8pts+0.2pts

20-24%Net Income

2,850M

3,350M+25.2%+17.5%

6,000~
7,000M

OI / person

2.8M

3.0M

+21.8%

+5.6%

3.9M

Software Gross Profit

2,442M

2,474M

+0.7%

+1.3%

5,000~
6,000M

ROE

22.3%

22.4%

+4.0pts+0.1pts

20% or
more

DOE

5.5%

6.2%

-0.3pts+0.7pts

8.1% ormore

Dividend

19 yen25 yen±0+31.6%

51 yen or
more

Note 1) Operating profit per employee is based on average number of employees
during the period.
Note 2) Software gross profit is based on unified Avant group definitions thattake into account lead times for calculation (software sales – software purchase– development division costs).
Note 3) FY6/24 dividend assumes the No.1 proposal on the agenda for the general
meeting “appropriation of surplus” is approved according to the original
proposition.

-8-

Securities Code 3836
September 9, 2024
(Start date of electronic provisioning: September 3, 2024)

To All Shareholders
15-2, Konan 2-chome, Minato-ku,
Tokyo

AVANT GROUP CORPORATION
President andTetsuji
Representative
Morikawa
Director

Notice of Convocation of the 28th Ordinary General
Meeting of Shareholders
Dear Sir or Madam,
We would like to thank you for your continued support.
Notice is hereby given that the 28th Ordinary General Meeting of
Shareholders will be held as follows.
We are also providing notice of our intention to publish online
the 28th Ordinary General Meeting of Shareholders, which will beavailable on the website below at the following link "Notice ofConvocation of the 28th Ordinary General Meeting of Shareholders.
Our website https://www.avantgroup.com/ja/ir/irnews.html
In addition to the above, the information is also posted on thewebsite of the Tokyo Stock Exchange (TSE), which can be found below.
Tokyo Stock Exchange Website (TSE Listed Company Information
Service)https://www2.jpx.co.jp/tseHpFront/JJK010010Action.do?Show=Show(Access the TSE website above, enter "Avant Group" in "Issue Name
(Company Name)" or our securities code "3836" in "Code", select"Basic Information" and "Documents for Public Inspection/PR
Information" in that order, and check "Notice of Convocation of-9-General Meeting of Shareholders/Materials for General Meeting of
Shareholders" under "Documents for Public Inspection". Please checkthe "Notice of Convocation of General Meeting of Shareholders /Materials for General Meeting of Shareholders" under "Documents for
Public Inspection. )You may exercise your voting rights in writing or online in place of attendingin person on the day. Please review the Reference Documents for the General
Meeting of Shareholders posted in the Electronic Provided Measures section andexercise your voting rights by 6:00 p.m. on Tuesday, September 24, 2024 (JST)in accordance with the instructions below. Please exercise your voting rights
by 6:00 p.m. on Tuesday, September 24, 2024, in accordance with the instructions
below.

Yours sincerely
1. Date & Time
2. Place

RecordWednesday, September 25, 2024, 10:00 a.m. (Doors open at 9:30
a.m.)
Keidanren Hall, 2F, Keidanren Kaikan, 1-3-2 Otemachi,
Chiyoda-ku, Tokyo (Please refer to the venue map at the endof this document.)

3. Purposes
Matters to 1. Business Report and Consolidated Financial Statements forbethe 28th Fiscal Year (July 1, 2023 to June 30, 2024) andreported
the Audit Reports of the Accounting Auditor and the Audit
Committee on the Consolidated Financial Statements
2. Report on the non-consolidated financial statements forthe 28th Fiscal Year (July 1, 2023 to June 30, 2024)
Matters toberesolved
Proposal 1
Proposal 2

Appropriation of surplus
Election of four (4) Directors (excluding Directors who are
Audit Committee Members)
Proposal 3
Election of Three (3) Directors as Audit Committee Members
Proposal 4
Revision of the performance-based stock compensation planfor directors (excluding members of the Audit and Supervisory
Committee and outside directors)-10-

4. Notice Regarding the 28th Annual General Meeting of Shareholders(1) Exercise of voting rights online, advance submission of comments andquestions, and video broadcast details
Please see below for specific instructions regarding digital execution of
voting rights, how to submit your comments and questions in advance, and how
to view the live video feed on the day of the meeting and the archived feed
after the meeting. We plan to address matters of high interest to ourshareholders at the General Meeting of Shareholders.
● In addition to exercising your voting rights

in person, you may also exercise your voting
rights in writing (by mail) or in advanceonline using a computer or smartphone.

Please see theinformation on
pages 13 and 14.

● Shareholders

are also welcome to submit
questions in advance.
Please see the● Live broadcast of the General Meeting of
information on
Shareholders will be available online.
page 15.
● After the AGM, a video of the day of the AGM
will be archived on our website.
(2) Online disclosure
The document we are sending you also serves as a document describing thematters to be provided electronically based on your request for delivery ofthe document. In accordance with laws and regulations and Article 13 of theCompany's Articles of Incorporation, the following items are excluded.
Accordingly, such documents are part of the documents audited by the Audit
Committee and the Independent Auditor in preparing the Audit Report.
Matters related to shares of the Company
Matters concerning stock acquisition rights of the Company
Status of Independent Auditors
Consolidated Statements of Changes in Net Assets
Notes to Consolidated Financial Statements
Statement of Changes in Net Assets
Notes to the Non-Consolidated Financial Statements
In the event of any amendments to the electronic provisioning measures, themodifications will be posted on the respective websites once available.

-11-Other
If you plan to attend the meeting in person, please submit the enclosed
Voting Rights Exercise Form to the receptionist at the meeting. We also askthat you please bring this Notice of Convocation with you to the meeting.
Should there be any major changes in operations of the General Meeting of
Shareholders in future, we will provide updates at the link below.
https://www.avantgroup.com/ja/index.html

Product and Business Briefing Session
After the conclusion of the Annual General Meeting of Shareholders, we willhold a Product and Business Briefing at same the venue to allow shareholders
to gain a broader understanding of our company. We would like to invite
shareholders with the time to attend this meeting as well as our Annual General
Meeting of Shareholders, or to follow it online.
Please note refreshments will not be served at the Product and Business
Briefing.

-12-

Guidance on the Exercise of Voting Rights
Exercise of voting rights in writing
Please fill out the enclosed voting form, indicating your approval ordisapproval for each agenda item, and return it by mail. If there is no
indication of approval or disapproval for any item on the voting form, it willbe treated as an expression of approval.
Exercise Deadline: To be received no later than 6:00 PM
on September 24, 2024 (Tuesday)

Exercise of Voting Rights via the Internet
Please visit our designated voting site (https://www.web54.net), input yourapproval or disapproval for each agenda item, and submit.
Exercise Deadline: Up to 6:00 PM on September 24, 2024 (Tuesday)

Exercise of Voting Rights by means of a Smartphone or Tablet
Please scan the "QR Code for Smartphone Voting Website Login" locatedat the bottom right of the enclosed voting form using your smartphone ortablet. Open the displayed URL and follow the on-screen instructions to
input your approval or disapproval for each agenda item, and then press
submit.
Exercise Deadline: Up to 6:00 PM on September 24, 2024 (Tuesday)

Exercise of Voting Rights by Attendanceof the General Shareholders’ Meeting in Person
Please bring the enclosed voting form and submit it at the reception desk
at the meeting venue.
For registered shareholders held by trustee banks and the like (including permanent proxies), if you havepreviously applied to use the electronic voting platform operated by ICJ Corporation, you may also use thisplatform as a method for exercising voting rights by electronic means at our General Shareholders’ Meeting,in addition to the above methods.

Should you choose to exercise your voting rights through both written form and via digital means
such as a computer or smartphone, the vote submitted through the Internet will beacknowledged as the valid exercise of your voting rights.
In that event that you should exercise your voting rights multiple times via the Internet, the mostrecently submitted vote will be recognized as valid.

-13-

Guidelines for Exercising Voting Rights
via the Internet or Other Digital Platforms
To exercise your voting rights via digital means, you may do so using either a computer or a smartphone
by visiting the designated voting website provided by our company.
Exercising Voting Rights via Smartphone or
Other Similar Devices

Exercising Voting Rights via the Internet or
Other Digital Platforms

1. Please scan the "Smartphone Voting Website LoginQR Code" located at the bottom-right corner of theenclosed voting form using a smartphone or tablet.

1. Please access the following voting website:
https://www.web54.net

2. Subsequently, please follow the on-screen instructions
to indicate your approval or disapproval of the agenda
items.

2. After logging in by entering the "Voting Rights Exercise
Code" displayed on the bottom-left corner of theenclosed voting form (postcard side), please input your
"Password." Then, proceed to follow the on-screen
guidance to indicate your approval or disapproval of
the agenda items before submitting your decision.

Should you wish to modify your vote after initiallycasting it, please visit the website designed forcomputer usage. Utilize the "Login ID" and "Password"
provided on the voting form and follow the on-screen
instructions to enter your stance on the proposals.

Please note that any fees incurred, such as connection charges by telecommunications
carriers and service providers while using the voting website, will be the responsibility ofthe stockholder.
11. Your password is a critical piece of information used to verify that the individual casting
the vote is indeed the stockholder. Kindly handle this password with the utmost care,comparable to how you would treat your personal seal or PIN number.
12. If incorrect password entries exceed a certain limit, the password will become disabled.
Should you require a password reissue, please adhere to the on-screen procedures.
10.

Inquiries

Should you have any questions or require clarification regarding the exercise of
voting rights via digital means, please feel free to reach out to the dedicatedhelpline below:

Sumitomo Mitsui Trust Bank, Limited
Securities Transfer Web Support Exclusive
Line

-14-

0120-652-031
Operating Hours: 9 a.m. to 9 p.m.

Online Submission of Questions Prior to Meeting
For shareholders unable to attend the meeting in person, we have establisheda dedicated site to receive questions in advance online. Please enter thefollowing URL on your computer or smartphone or use the QR code to access andsubmit your questions.

Site for submission of questions prior tomeeting: https://krs.bz/diva/m/agm
Please note: The deadline for question submission is Tuesday, September 24, 2024, 6:00 p.m.
(Japan Standard Time). The secretariat will compile all questions received and we will provide
answers at the General Meeting. Please note that we may not be able to answer all questions
received.

Live Streaming of the General Meeting of Shareholders
Video Streaming Service
If you wish to view the Annual General Meeting of Shareholders online, please
access the following website.

Website for live webcast:https://avantgroup.premium-yutaiclub.jp/live/

If you wish to access the meeting online, you will need to fill in thefollowing fields.
● Your 9-digit shareholder number found on the enclosed voting form
● Your 7-digit postal code (excluding hyphens) of your registered address
Following the conclusion of the General Meeting of Shareholders, a recorded
video will be made available on the Company's website.
https://www.avantgroup.com/ja/ir/stock/meeting.html[Notice]
We recommend accessing the webcast site ahead of the designated start time to input yourshareholder number and postal code.

-15-

Depending on your device or communication environment, it may not be possible to view the
webcast.
Any costs associated with data transmission for viewing the webcast will be borne by theshareholder.
Viewing the live webcast of this Shareholders' Meeting is not considered formal attendance at
the General Shareholders' Meeting under the Companies Act. Consequently, it will not be
possible to ask questions or submit motions online in accordance with the Companies Act.
Shareholders who may wish to ask questions or submit motions under the Corporate Law areencouraged to attend the meeting in person. We kindly ask for your cooperation in exercising
your voting rights in advance, either in writing or online.

-16-Reference Documents for the General Meeting of
Shareholders
Proposal 1: Appropriation of Surplus
The appropriation of retained earnings is proposed as follows
The Company regards payment of dividends from retained earnings as an important
shareholder return policy. The company keeps a close eye on maintaining andimproving the amount of dividends in a stable manner without being affected by
the business performance in any one fiscal year, focusing on indicators suchas the dividend on equity (DOE) ratio.
The proposed year-end dividend for the 28th fiscal year is as follows, taking
into consideration business results for the current fiscal year and futurebusiness development.
(1) Type of dividend assets: Cash
(2) Matters related to the allocation of dividend assets and such total
amount:
The dividend shall be 19 yen per share of the Company's common stock.
In this case, the total dividend will be 708,296,307 yen.
(3) Effective date of distribution of surplus September 26, 2024

-17-

Dividends per share and ratio of dividends to net assets

Dividend per share (yen)Year ending
June 30,
2020

Year ended
June 30,
2021

Year ended
June 30,
2022

Year ended
June 30,
2023

Year ended
June 30,
2024

9.0

11.0

13.0

15.0

19.0

Ratio of dividends to
5.17%
5.18%
5.04%
4.93%
5.53%
net assets(5.17%)(5.18%)(5.04%)(4.93%)(5.53%)(Reference) Average of
2.93%
2.88%
3.18%
3.09%
3.10%
companies listed on the(2.93%)(2.88%)(3.18%)(3.09%)(3.10%)
Tokyo Stock Exchange(Note) Average ratio of dividends to net assets of TSE-listed companies is the 12-monthaverage from July to June for each period. However, the figures for the period
ending June 30, 2024 represent the 12-month average from May 2023 to April 2024.

-18-

Proposal 2: Election of Four (4) Directors (excluding Directors who are Audit
Committee Members)
Directors (excluding Directors who are members of the Audit and Supervisory
Committee)
The terms of office of all four (4) Directors will expire at the conclusion ofthis General Meeting of Shareholders. Therefore, the Company proposes theelection of four (4) Directors.
The Audit Committee has no particular matters to point out with respect tothis proposal.
The nominees for the Board of Directors are as follows
Candidatenumber
1
2
3

4

Name

Position and areas of
responsibility in the Company

reappoPresident, Group CEO, Member of
intmen Tetsuji Morikawa
Compensation Advisory Committeetreappointmen Hisayoshi Kasuga
Director, Group CFO, TreasurertreappoBoard outsid indepe
intmen J o n R o b e r t s o ndiversityendencemembert
Director, Member ofCompensation Advisory
reappointmen Tatsuya Kamoi
Committeetoutsid indepee
ndenceAttendance at Boardof Directors meetings
100%.(13/13)
100%.(13/13)
84%.(11/13)

100%.(10/10)(Notes) 1. There is no special interest between each director candidate and the Company.
2. Mr. Jon Robertson and Mr. Tatsuya Kamoi are outside director candidates. The
Company has designated Mr. Jon Robertson and Mr. Tatsuya Kamoi as independent
directors under the provisions of the Tokyo Stock Exchange, and has notified the
Exchange of such designation. If both are reappointed, they will continue to be
independent directors.
3. The Company has entered into a limited liability contract with Mr. Jon Robertsonand Mr. Tatsuya Kamoi pursuant to Article 427, Paragraph 1 of the Companies Act.
The maximum amount of liability for damages under such contracts is the minimum
liability amount stipulated by law. If both are reappointed, they will continue
to be subject to the liability limitation agreement.
4. The Company has concluded a directors' and officers' liability insurance contract
with an insurance company as stipulated in Article 430-3, Paragraph 1 of theCompanies Act. If this proposal is approved and each director nominee is elected
and assumes office as a director, each director will be insured under suchinsurance policy. The policy insures directors, audit committee members,
corporate auditors, executive officers, and employees of the Company and its
subsidiaries, and the premiums for all insureds are fully paid by the Company.
The policy will cover claims for damages, settlements, and costs of litigationand other losses incurred by the insured in the event that the insured receives aclaim for damages during the insurance period as a result of the insured's-19-performance of his/her duties, but will not cover claims arising from breach oftrust, criminal acts, fraud, willful violation, or insider trading, etc. However,claims arising from breach of trust, criminal acts, fraud, willful misconduct,
insider trading, etc. are not covered by the policy. The term of the directors'
and officers' liability insurance policy is one year, and will be renewed upon
resolution by the Board of Directors prior to the expiration of the said term.

-20-

Candidate Number 1

TetsujiMorikawa

reappointmentDate of birth: February 23, 1966 (age 58)
Tenure on Board of Directors: 27 years
Attendance at Board of Directors meetings: 100%
(13/13)
Number of the Company's shares held: 9,764,000
sharesBiography
Apr 1990
May 1997
Sep 2020

Joined Price Waterhouse Consultants,
Inc.
Founded the Company, President andRepresentative Director (ongoing)
Group CEO (ongoing)

Significant concurrent positions
Oct 2013
CEO, DIVA CORPORATION OF AMERICA
Mar 2017
External Director, Kayak Co.
Rationale for nomination as a candidate for director
Since our founding in May 1997, Mr Morikawa has steered the company group for 27 years as
Representative Director. Through the sale of proprietary consolidated accounting software
package, the company has established itself as critical infrastructure for providing a rangeof management data, particularly financial data. He has demonstrated leadership in diversifying
the business through M&A, transitioning to a holding company structure, and reorganizing thegroup. He also demonstrated strong leadership in achieving the goals in the medium-term
management plan BE GLOBAL 2028, hitting many targets in its first year. We request your support
for his re-election for the continued development of our group for the realization of BE GLOBAL
2028.

-21-

To our shareholders
In the first year of BE GLOBAL 2028, we were able to achieve all key management objectives
thanks to the efforts of all group members. On the other hand, we were also able to clarify
issues that needed to be addressed in order to realize targets in FY6/28. In particular, it
is important for the entire group to maximize its potential by providing concrete proof of how
we can help clients increase their corporate value and enhance their market presence byleveraging our software. In FY6/25, we will focus on the realization of the annual plan foreach group company and promote activities to drive group synergy through software to clarify
the roadmap to BE GLOBAL 2028. We look forward to your continued support for the Avant Group
as we enter our growth investment phase.

-22-

Candidate No. 2

Naoyoshi Kasuga

reappointmentDate of birth: May 13, 1963 (age 61)
Tenure as director: 13 years
Attendance at Board of Directors meetings: 100%
(13/13)
Number of the Company's shares held: 19,721 shares
Biography
Apr 1987
Aug 1999
Jan 2005
Oct 2010
Feb 2011
Sep 2011
Sep 2020

Joined Long-Term Credit Bank ofJapan, Ltd.
New York Stock Exchange Asia Paci
Joined Fick's office
Executive Officer, New York Stock
Exchange
Joined the Company
General Manager, President's OfficeDirector, in charge of Finance of theCompany (ongoing)
Group CFO (ongoing)

Rationale for nomination as a candidate for director
Mr Kasuga joined the firm in October 2010 after work at commercial banks and the New York
Stock Exchange. He has served as director in charge of finance since September 2011 andcurrently holds the position of Group CFO. His extensive experience and informed insights into
management are instrumental in overseeing the financial affairs of the Company. Together with
the Group CEO, he is leading the Group toward the realization of the BE GLOBAL 2028 mediumterm management plan. His nomination is further supported by his exemplary character andinsight.

-23-

To our shareholders
We will aggressively invest in new and existing businesses and activities deemed necessary
to realize the Group's materiality (i.e., to become a software company that helps increase
corporate value). We aim to be recognized and supported by our shareholders and investors overthe long term as a company capable of sustainable growth by gradually increasing operating
income per capita, software gross profit and other metrics, as well as to return profits toour supporters through medium- and long-term improvements in corporate value, stable dividends,
and other means.

-24-Candidate No. 3

Jon Robertson

reappooutsid indepe diversit
intmenendenceytDate of birth: October 29, 1968 (age 55)
Tenure as Director: 4 years
Attendance at Board of Directors meetings: 84%(11/13)
Number of the Company's shares held: 0 shares
Biography
Jan 1994
Jul 1996
Jul 1999
Jul 2002
Jan 2004
Jan 2007
Jan 2012
Dec 2014
Mar 2015
Sep 2020
Mar 2021

Sales Manager, M3i Systems, Inc.
Sales Director, SAP America, Inc.
Managing Director, EMC Corporation
Senior Director, Reuters K.K. (nowThomson Reuters K.K.)
EMC Corporation
VMware, Inc.
Vice President Customer Operations
ACTION MANAGEMENT
VMware Singapore Pte.
Vice President, General Manager for
ASEAN
Vice President, VMware, Inc.
President and Representative
Director, VMware, Inc.
Director of the Company (ongoing)
President, Snowflake Inc. for Asia
Pacific and Japan (ongoing)

Significant concurrent positions
Mar 2021 President, Asia Pacific and Japan
Region, Snowflake Inc.
Rationale for nomination as candidates for outside directors and expected contribution
He has over 30 years of experience leading highly international organizations in Japan and
the Asia-Pacific region, and has excellent management, leadership, and communication skills.
He has a deep knowledge of the latest IT technologies, including the cloud-native field, andhas demonstrated his leadership skills and enthusiasm in a rapidly changing IT environment.
We are therefore proposing his continued appointment to the Board of Directors.

-25-

To our shareholders
I have been a director of Avant Group for four years now and have been greatly impressed by
Avant Group's focus on both customer satisfaction and results. We provide world-classtechnology solutions and services to help our clients transition to digital transformation.
Cloud computing is becoming increasingly important in Japan, and we believe that the value of
our relationships with our customers will continue to increase as we maintain and strengthen
our trust-based partnerships with them and evolve together. As a technology professional, I
am deeply involved in these areas and will continue to add value and increase the market
presence of the Avant Group.

-26-

Candidate No. 4

Tatsuya Kamoi

reappooutsid indepe
intmenendencetDate of birth: February 10, 1961 (age 63)
Tenure as director: 1 year
Attendance at Board of Directors meetings: 100%
(10/10)
Number of the Company's shares held: 0 shares
Biography
Apr 1983
Jan 2006

Jan 2012
Aug 2014

Oct 2019
Apr 2020
Apr 2023
Sep 2023
Apr 2024

Joined Seiko Epson Corporation
Executive Officer, IBM Japan K.K. andDirector, IBM Business Consulting
Services K.K.
Managing Executive Officer, IBM Japan
Ltd.
Representative Director and Mercer
Far East Market Leader, Mercer Japan
K.K.
Senior Corporate Executive, NEC
Corporation
Representative Director, ABeam
Consulting Ltd.
Vice Chairman of the Board, ABeam
Consulting Ltd.
Director of the Company (ongoing)
Director, ABeam Consulting Ltd.

Significant concurrent positions
Apr 2024
Director, ABeam Consulting Ltd.
Rationale for nomination as candidates for outside directors and expected contribution
In addition to more than 20 years of experience in consulting and IT development for global
companies in Japan and overseas, he has also served as a business leader at Mercer Japan K.K.
and ABeam Consulting K.K. He has extensive experience in the human resources field. The Company
requests the appointment of Mr. Katsunori Kato as we believe that he will continue to contributeto the supervision of management and the realization of our medium-term management plan, "BE
GLOBAL 2028".

-27-

To our shareholders
I would like to contribute to the realization of further business growth strategies expectedof the Avant Group and the enhancement of corporate value through the establishment of corporate
governance to support these strategies. I am also able to leverage my diverse experience
spanning operational roles at business and consulting companies, global business development
at a Japan-headquartered company, IT services at both US and the Japanese headquarters of US
companies, experience in HR management, and corporate management as a CEO. Despite my limited
experience, I hope to contribute to the realization of further business growth strategies
expected of the Avant Group in future and to enhancement of corporate value through theestablishment of corporate governance to support such strategies. Your support is highly
appreciated.
(Note) As Mr. Tatsuya Kamoi assumed the position of Director at the 27th Ordinary General
Meeting of Shareholders held on September 27, 2023, attendance after that date is shown.

-28-

Proposal 3: Election of Three (3) Directors as Audit Committee Members
Directors who are members of the Audit and Supervisory Board ("Audit andSupervisory Board Members")
The term of office of all three (3) Directors will expire at the conclusionof this General Meeting of Shareholders.
Therefore, the Company proposes the election of three (3) Audit & Supervisory
Board Members.
The candidates for Audit Committee members are as follows
The Company has obtained the consent of the Audit Committee for the submissionof the portion of this proposal pertaining to Mr. Tsuyoshi Noshiro (Candidate
No. 1) and Mr. Makoto Nakano (Candidate No. 3), who are candidates for Audit
Committee members. The portion of this proposition pertaining to Ms. Chie Goto
(Candidate No. 2), a candidate for Audit & Supervisory Board Member, is
submitted at the request of the Audit & Supervisory Board in accordance with
Article 344-2, Paragraph 2 of the Companies Act.
CandidatenumberName

1reappoTsuyoshiintmenNoshirot

2

reappointmen Chie Gotot3

reappoMakotointmenNakanotAttendance at Board
Position and areas of responsibility in of Directors meetings
the Company
and Audit Committee
meetings
Board of directors
100%.(13/13)
Director and Full-time Audit Committee Audit andMemberSupervisory
Committee
100%.(19/19)
Board of directors
Director, Member of the Audit
100%.(13/13)
Committee and Chairman of the
Audit and
Compensation Advisory Committee
Supervisory
outsid indepe diversit
Committeeendencey
100%.(19/19)
Board of directors
100%.(13/13)
Director and Audit outsid indepe
Audit andendenceCommittee Member
Supervisory
Committee
100%.(19/19)(Notes) 1. There is no special interest between each candidate and the Company.
2. Chie Goto and Makoto Nakano are candidates for outside director. The Company has
designated Ms. Chie Goto and Mr. Makoto Nakano as independent directors as
stipulated by the Tokyo Stock Exchange, and has notified the Tokyo Stock Exchange
to that effect.
3. The Company has entered into a limited liability contract with Mr. Tsuyoshi
Noshiro, Ms. Chie Goto and Mr. Makoto Nakano, pursuant to Article 427, Paragraph-29-

1 of the Companies Act. The maximum amount of liability for damages under suchcontracts is the minimum liability amount stipulated by law. If each of them isreappointed, the Company plans to continue the liability limitation agreement.
4. The Company has concluded a directors' and officers' liability insurance contract
with an insurance company as stipulated in Article 430-3, Paragraph 1 of theCompanies Act. If this proposal is approved and each candidate is elected andassumes office as a member of the Audit Committee, each Audit Committee member
will be an insured under the relevant insurance policy. The policy insuresdirectors, audit committee members, corporate auditors, executive officers, andemployees of the Company and its subsidiaries, and the premiums for all insured
individuals are fully paid by the Company. The policy will cover claims fordamages, settlements, and costs of litigation and other losses incurred by the
insured in the event that the insured receives a claim for damages during theinsurance period as a result of the insured's performance of his/her duties.
However, claims arising from breach of trust, criminal acts, fraud, willful
misconduct, insider trading, etc. are not covered by the policy. The term of thedirectors' and officers' liability insurance policy is one year, and will berenewed upon resolution by the Board of Directors prior to the expiration of thesaid term.

-30-

Candidate Number 1

Tsuyoshi
NoshiroreappointmentDate of birth: January 6, 1961 (age 63)
Tenure on Board of Directors: 2 years
Attendance at Board of Directors meetings: 100%
(13/13)
Attendance at Audit Committee meetings: 100%
(19/19)Number of the Company's shares held: 1,868,800
shares[Biography]
Oct 1985
Apr 1989
Jul 1989
Feb 1998
Jun 2000
Sep 2001
Sep 2011
Sep 2022

Joined Aoyama Audit Corporation
Registered as a Certified Public
Accountant
Joined Sanyo Finance Co.
Joined the Company
General Manager, Administration
Division
Director, in charge of Finance of theCompany
Corporate Auditor of the Company
Director of the Company (Member ofthe Audit Committee) (ongoing)

Significant concurrent positions
N/A
Reasons for the appointment of the candidate as a member of the Audit and Supervisory
Board
After gaining experience as a certified public accountant at an auditing firm and asecurities-affiliated venture capital firm, he joined the Avant Group in February 1998.
Since then, he has served as General Manager of the Administration Division, as a Director
and Treasurer of the Company since 2001, a full-time auditor since September 2011, andas Director (Audit Committee Member) since September 2022. At meetings of the Board of
Directors and the Audit Committee, he has provided useful opinions based on his deep
understanding of the Company's business operations, particularly from the perspectivesof legal affairs, accounting, governance, and human resources. We believe he will continue
to contribute to the sound development of the Company, and therefore request his election.

-31-

To our shareholders
In January 1998, during my first meeting with Group CEO Morikawa, his assertion thatthe company was public and not the private property of its founder resonated with me
and this message has remained with me for 27 years. This philosophy underpins the Avant
Group’s Basic Corporate Governance Policy which states "the company is a public
instrument of society."
As a representative of the shareholders, I aim to contribute to a company which canlast for 100 years by driving growth in operating cash flow as outlined in the mediumterm management plan and through discussions on identifying and developing the next
generation of leaders.

-32-Candidate No. 2

reappooutsid indepe diversit
intmenendenceytChie Goto

Date of birth: November 30, 1958 (age 65)
Tenure as Director: 2 years
Attendance at Board of Directors meetings: 100%
(13/13)
Attendance at Audit Committee meetings: 100%
(19/19)Number of the Company's shares held: 0 shares[Biography]
Apr 1984 Joined Société World Inc.
Apr 1988
Joined Tokyo Student Career
Information Center Co.
Sep 1994 Joined Yamada & Partners Accounting
OfficeOct 2006 Registered as a lawyer and joined
Sakura Kyodo Law Office
Registered as a Certified Public
Accountant
Jan 2011 Partner, Sakura Kyodo Law Office(ongoing)
Sep 2021 Corporate Auditor of the Company
Sep 2022 Outside Director of the Company(Member of the Audit Committee)(ongoing)
Jun 2023 Director, Asahi International
Corporation (ongoing)
Jun 2024 Outside Director (Member of the Audit
Committee), Toho Holdings Co.
Significant concurrent positions
Jan 2011 Partner, Sakura Kyodo Law OfficeJun 2023 Director, Asahi International, Inc.
Jun 2024 Outside Director (Member of the Audit
Committee), Toho Holdings Co.
Rationale for nomination as candidate for Outside Audit & Supervisory Board Member andexpected contribution
In addition to her experience at various companies, Ms. Goto holds qualifications as
an attorney and a certified public accountant. She has been involved with various
companies as a legal and financial accounting expert, including M&A, tax compliance, andharassment cases. Currently, as an outside director of the Company (Audit Committee
member), she provides useful advice in management judgment and decision-making. As the-33-chairperson of the Compensation Advisory Committee and the first independent outside
director, she has led active dialogue at meetings from an independent standpoint.
To our shareholders
Outside directors who are members of the Audit and Supervisory Committee are responsible
for fulfilling their roles as directors and overseeing the execution of duties bydirectors in accordance with their mandate from the shareholders. By leveraging myexpertise as a lawyer and certified public accountant, I will actively express my
opinions, join discussions and help in making decisions at board meetings, as well as
strive to strengthen corporate governance, as much as possible. I would like to contributeto the realization of the Avant Group's vision, BE GLOBAL - Become a world-class software
company.

-34-

Candidate No. 3

Makoto Nakano

reappooutsid indepe
intmenendencetDate of birth: January 14, 1968 (age 56)
Tenure as director: 2 years
Attendance at Board of Directors meetings: 100%
(13/13)
Attendance at Audit Committee meetings: 100% (19/19
times)
Number of the Company's shares held: 3,500 shares[Biography
Apr 1995
Apr 1996
Apr 2001
Apr 2007
Apr 2009
Apr 2018
Jan 2021
Sep 2022

Full-time Lecturer, Faculty ofCommerce, Yokohama City University
Associate Professor, Faculty ofCommerce, Yokohama City University
Associate Professor, Graduate Schoolof International Corporate Strategy,
Hitotsubashi University
Associate Professor, Graduate Schoolof Commerce, Hitotsubashi University
Professor, Graduate School ofCommerce, Hitotsubashi University
Professor, Graduate School ofBusiness Administration, Hitotsubashi
University (ongoing)
Vice President, International
Association for Accounting Education& Research (IAAER) (ongoing)
Outside Director of the Company(Member of the Audit Committee)(ongoing)

Significant concurrent positions
Apr 2018 Professor, Graduate School ofBusiness Administration, Hitotsubashi
University
Jan 2021
Vice President, International
Association for Accounting Education& Research (IAAER)
Rationale for nomination as candidate for Outside Audit & Supervisory Board Member andexpected contribution
Mr Nakano has deep knowledge in a wide range of fields, including businessadministration, accounting, and corporate finance. He has established a broad research-35-network in both business and academic fields on the theme of corporate value, which isalso our materiality. He has conducted numerous financial and corporate value training
programs for senior management of listed companies and is appropriately performing his
duties as an outside director of the Company in his role a member of the Audit Committee.
In addition, we believe that he will provide advice in improving the corporate value of
not only our company but also our clients, and will also play an active role in thedevelopment of our next generation management team.
To our shareholders
In line with the new medium-term management plan, BE GLOBAL 2028, we need to evolveour business portfolio by refining our software and human capital, key factors behind
why we are sustainable our competitive advantage. In terms of capital allocation,
resources must be strategically allocated to internal growth, external growth, andshareholder returns. To this end, as an outside director, I would like to contribute to
the enhancement of corporate value from a governance and strategic perspective.

-36-

Proposal No. 4: Performance-Linked Compensation for Directors (excluding
Directors who are Audit & Supervisory Committee Members and Outside
Directors) Revision of the Type 2 Stock Compensation Plan
Reasons for the proposal and reasons why the remuneration system is appropriate
A resolution was approved at the 26th Ordinary General Meeting of
Shareholders held on September 27, 2022 to set medium-term performancelinked remuneration for Directors (excluding Directors who are members of
the Audit and Supervisory Committee and Outside Directors) as follows. At
the 26th Ordinary General Meeting of Shareholders, the Board of Directors
approved a resolution to offer medium-term performance-linked compensationand grant stock-based compensation to Directors (excluding Directors who
are members of the Audit Committee and Outside Directors (hereinafterreferred to as "Eligible Directors")). An annual amount of up to 100,000
thousand yen for monetary compensation can be paid and up to 60,000 shares
per Director per year can be granted, for a total compensation of up to
100,000 shares per year for all Eligible Directors. Details of the stockcompensation plan were approved by a vote at the 27th Ordinary General
Meeting of Shareholders held on September 27, 2023 (the performance-linked
stock compensation plan approved by resolution at the 27th Ordinary General
Meeting of Shareholders is hereinafter referred to as the "Original Plan").
This proposals aims to maintain the substance of the annual compensationand number of shares to be delivered to Eligible Directors, but proposes
to replace the Original Plan with a scheme to deliver shares to Directors
from the assets of a trust established by the Company. The details are set
out below, for the period outlined in 2. below. (The performance-linked
stock compensation plan under this proposal is hereinafter referred to as
the "New Plan," and the details of the New Plan shall be determined at thediscretion of the Board of Directors within the parameters described below).
As a result of the above, the directors will no longer be able to buy orsell the shares granted to them until they step down from their position,
thereby providing them with a long-term incentive to increase corporate
value, even after when shares are granted. We also believe that the content
of this plan is appropriate because it is line with the Company's policy
on individual director compensation, which is scheduled change in future(please see pages 34 to 37 of this Notice of the 63rd Ordinary General
Meeting of Shareholders). The Audit Committee sees nothing special withrespect to this proposal.
If Proposal 2, "Election of Four (4) Directors (excluding Directors who
are members of the Audit and Supervisory Committee)," is approved asoriginally proposed, the number of Directors subject to this plan will be
two (2) (zero (0) Outside Directors).

-37-

2. Amount and Details of Remuneration under the Plan
The plan is for the Company to establish a trust (hereinafter the "Trust")
through a monetary contribution by the Company. The Trust is a stock-based
compensation plan under which the Company acquires shares of the Company's
common stock (hereinafter "Company Shares"). The number of Company Sharesequivalent to points granted by the Company is then granted to each Director
via the Trust. (However, as described in 3. below, such shares shall be
subject to transfer restrictions upon execution of a transfer restriction
agreement between the Company and each Director.
The number of points granted to each director shall be equal to one
Company share. However, in the event of a stock split, reverse stock split,
or other event in which it is deemed reasonable to adjust the number ofshares of the Company's stock per point, a reasonable adjustment will bemade in accordance with such split ratio, reverse stock split ratio, etc.
(1)

Eligibility for this program(2)

Applicable period(3) Maximum amount of money to becontributed by the Company to
the Trust as funds for theacquisition of Company sharesnecessary for the delivery of
the Company shares to eligible
participants in (1) during the
subject period in (2) above.
(4) Maximum total number of points
to be granted to (1) eligible
persons(5) Criteria for awarding points(6)

Timing and conditions ofgranting of Company shares to
Eligible Participants in (1)Directors of the Company (excluding
directors who are members of the Audit andSupervisory Committee and outside
directors)
From October 1, 2024 to September 30, 2028
(However, this period can be extended by
up to five (5) years on a case-by-casebasis by a vote by the Board of Directors.
Total 400 million yen(In the case of an extension of thesubject period, the amount is calculated
by multiplying the number of years of theextended subject period by 100 million
yen)

100,000 points per fiscal year
(Up to 60,000 points per director)
In accordance with the share issuance
regulations established by the Board of
Directors, the Company shall grant a
number of points within the range of (4)above in accordance with the degree ofachievement of the position andperformance targets, etc.
In each fiscal year during the trust
period, Eligible Participants shallacquire beneficial rights to the Trust andreceive delivery of Company shares fromthe Trust on the condition that theparticipant has signed a transfer
restriction agreement as described in (3)

-38-

(7)

Transfer restriction period in
the transfer restriction
agreement set out in 3.

(8)

Exercise of voting rights
pertaining to Company sharesin the Trust(9)

Handling of dividends
pertaining to the Company's
shares in the Trust

below and follows other prescribed
procedures.
From the date of delivery of the Company's
shares until the time immediately
following retirement from the position of
director or executive officer of theCompany, director or executive officer ofa subsidiary of the Company, or any otherposition predetermined by the Board of
Directors of the Company
Voting rights for Company Shares will not
be exercised, according to instructions bya trust administrator who is independent
from the Company and Company officers.
Dividends for Company shares held by theTrust Account will be received by theTrust and used for acquisition fees for
Company Shares or for Trust fees.
If the event of a termination of theTrust, dividends remaining in the Trustshall be distributed to the Directors in
office at that time on a pro rata basis
according to the number of points held by
each of them, in accordance with theprovisions of the Rules on Delivery of
Shares to Directors.

-39-

3. Transfer Restriction Agreement for Company Shares issued to directors
An overview of the transfer restriction agreement (hereinafter “Transfer
Restriction Agreement”) concluded between the Company and directors forthe granting of Company Shares is as follows(1) Transfer restriction period
Directors are prohibited from transferring, pledging, or otherwise
disposing of the granted shares (hereinafter “Granted Shares”)
during the period from the date they were granted until after the
resignation by the said director or executive officer from theCompany, or by the said director or executive officer from theCompany’s subsidiary, or from any other position predetermined by
the Company’s board of directors (hereinafter “Transfer Restriction
Period”).
(2) Acquisition of Granted Shares without Consideration
In the event a director resigns during the Transfer Restriction
Period for their own reasons, or is subject to conditions stated in
the Transfer Restriction Agreement during the Transfer Restriction
Period, the Company is entitled to acquire all or part of the Granted
Shares for free.
(3) Treatment in the event of organizational restructuring
In the event where shareholders of the Company approve anorganizational restructuring such as a merger in which the company
is absorbed, any share exchange agreement in which the Company
becomes a wholly owned subsidiary, or any other reorganization, thetransfer restriction on Granted Shares shall be immediately nulledon the business day before the reorganization event comes in force.
If shareholders agreement is not required, the Company’s board of
directors can approve the reorganization.

-40-

Matters Concerning Company Officers(1) Names, etc. of
directors
Position(As of June 30, 2024)
Name

Responsibilities and significant concurrent positions

President andRepresentative
Director

Tetsuji Morikawa

Group CEO; Member of the Compensation Advisory
Committee; DIVA CORPORATION OF AMERICA CEO; KAYAC Inc.,
Outside Director

Director

Hisayoshi Kasuga

Group CFO, FinanceDirector

Jon Robertson

Director

Tatsuya Kamoi

Director and
Full-time
Audit
Committee
MemberDirector andAudit
Committee
MemberPresident, Asia Pacific and Japan Region, Snowflake
Inc.
Member of the Compensation Advisory Committee,
Director, ABeam Consulting Ltd.

Tsuyoshi Noshiro

Chie Goto

Chair of the Compensation Advisory Committee,
Partner, Sakura Kyodo Law Office,Director of Asahi International, Inc,
Outside Director (Member of the Audit Committee), Toho
Holdings Co.

Director and
Audit
Professor, Graduate School of Hitotsubashi University,
Makoto Nakano
Committee
Vice President, IAAER
Member
1. Jon Robertson, Director, and Tatsuya Kamoi, Director, are outside directors.
2. Chie Goto, Director and Audit & Supervisory Board Member, and Makoto Nakano, Directorand Audit & Supervisory Board Member, are outside directors.
3. Directors and Audit & Supervisory Board Members Tsuyoshi Noshiro and Chie Goto are
certified public accountants and have considerable knowledge of finance and accounting
matters.
4. The Company has appointed Mr. Tsuyoshi Noshiro, Director and Audit & Supervisory Board
Member, as a full-time Audit & Supervisory Board Member in order to enhance theeffectiveness of audits and strengthen the audit and supervisory functions throughenhanced information gathering and adequate cooperation with the Internal Audit
Department and other departments.
5. The Company has designated Director Jon Robertson, Director Tatsuya Kamoi, Director and
Audit & Supervisory Board Member Chie Goto, and Director and Audit & Supervisory Board
Member Makoto Nakano as independent officers in accordance with the provisions of theTokyo Stock Exchange, and has notified the Exchange of such designation.
6. Director and Audit & Supervisory Board Member Makoto Nakano is a shareholder of theCompany, but his shareholding ratio is less than 1% and he is not a major shareholder.
There are no special interests between the above other directors and the Company.

-41-

(2) Overview of details of liability limitation agreement
The Company has entered into agreements with outside directors and audit
committee members to limit their liability for damages under Article 423,
Paragraph 1 of the Companies Act, pursuant to Article 427, Paragraph 1 of
the Companies Act. The maximum amount of liability for damages based onsuch agreement is the amount stipulated in Article 425, Paragraph 1 of theCompanies Act.
(3) Overview of details of directors' and officers' liability
insurance policy
The Company has concluded a directors' and officers' liability insurance
contract with an insurance company as stipulated in Article 430-3,
Paragraph 1 of the Companies Act. The policy insures directors, audit
committee members, corporate auditors, executive officers, and employeesof the Company and its subsidiaries, and the premiums for all insured
persons are fully paid by the Company. The policy will cover claims fordamages, settlements, and costs of litigation and other losses incurred by
the insured in the event that the insured receives a claim for damages
during the insurance period as a result of the insured's performance of
his/her duties. However, claims arising from breach of trust, criminal
acts, fraud, willful misconduct, insider trading, etc. are not covered by
the policy.
(4) Items Related to Outside Directors and Outside Corporate
Auditors(i) Matters concerning significant concurrent positions such as executive
officer or outside director at another corporation
Position

BoardmemberName

Jon
Robertson

Details ofconcurrent
positions

President,
Asia Pacific& JapanRegionCorporation whereconcurrently holdposition

Snowflake Inc-42-

Relationship with the Company
Has concluded a solution
partnership agreement with ZEAL
Corporation, a wholly-owned
subsidiary of the Company. Also
has a business relationship with
Snowflake, Inc. However, theamount is less than 0.4% ofconsolidated net sales, which isless than the 2% in the
Company's independence criteria
for outside directors, and there

BoardmemberBoard
member(Audit&Supervi
sory
Board
Member)Board
member(Audit&Supervi
sory
Board
Member)is no risk of influencing theCompany's decision-making
process.
The Company has no business orother relationship with thecompany.

Tatsuya
Kamoi

Board member

ABeam Consulting Ltd.

Chie Goto

Partner
Board member
OutsideDirector(AuditCommittee
Member)Sakura Kyodo Law
OfficeAsahi International
Corporation
Toho Holdings Co.

The Company has no business
transactions or otherrelationships with the said
firms or companies.

Hitotsubashi
University Graduate
SchoolInternational
Association for
Accounting Education& Research (IAAER)

The Company has transactions
with Hitotsubashi University
Graduate School of Hitotsubashi
University, where Mr Nakano is a
professor. These are mainly
related to expenses associatedwith donated courses, but theamount is less than 0.1% ofconsolidated net sales, below
the 2% stipulated in the
Company's criteria for
independence of outside
directors. Furthermore,
donations are less than 15
million yen, also under theCompany's criteria for
independence of outside
directors. Therefore, there isno risk of influencing theCompany's decision-making
process. The Company has no
business or other relationshipwith IAAER, of which he is vicechairman.

MakotoNakanoProfessor
Vice
President (ofa club ororganization)-43-

(ii) Summary of major activities during the fiscal year under review andthe duties performed with respect to the roles expected of outside
directors.
Current status of activities

Board
memberJon
Robertson

Board
memberTatsuya
Kamoi

Board member(Audit &Chie Goto
Supervisory
Board Member)

Board member(Audit &Supervisory
Board Member)

MakotoNakanoAttended 11 of 13 Board of Directors meetings during the fiscal year
under review, and based on his in-depth knowledge of the latest IT
technologies, he asked questions, provided advice and madestatements as appropriate in the Company's vision BE GLOBAL and theachievement of corporate value creation through cloud computing in
the medium-term management plan.
Attended all 10 meetings of the Board of Directors held during the
fiscal year under review after his appointment as a director at the27th Ordinary General Meeting of Shareholders, and asked questions,provided advice and made statements based on his management
perspective and deep experience in the area of human resources. Asa member of the Remuneration Advisory Committee, he has also madeefforts to improve the effectiveness of the committee by utilizing
his knowledge and experience in the area of human resources.
Attended all 13 Board of Directors meetings and all 19 Audit
Committee meetings held during the fiscal year under review. Asked
questions, provided advice and made statements as appropriate basedon her extensive knowledge as a legal and accounting expert. As thechairman of the Compensation Advisory Committee, she has been
actively researching market conditions and other issues, and has
made efforts to improve the effectiveness of the committee byinterviewing directors and executive officers.
Attended all 13 meetings of the Board of Directors and all 19
meetings of the Audit Committee held during the fiscal year underreview, and asked questions, provided advice and made statements asappropriate from a governance and strategic perspective, drawing on
his extensive knowledge as an expert in business administration,accounting and corporate finance.

-44-

[Reference] Corporate Governance Structure
The Avant Group shifted to a company with an audit committee system byresolution of the 26th Annual General Meeting of Shareholders held on September
27, 2022, shifting to a system in which the Board of Directors specializes inmanagement strategy functions and monitors the status of execution. The Boardof Directors' Regulations stipulate that the authority to make businessexecution decisions to be delegated is to be reviewed and decided by the Boardof Directors immediately after each Annual General Meeting of Shareholders inorder to accommodate changes in the diversity of the Board of Directors andchanges in Group CEOs, etc.
The current corporate governance structure has been selected in our search
for the ideal form of corporate governance from the perspective of creating acompany that can last for 100 years.

-45-

[Reference] Criteria for Appointment and Dismissal of Directors
The Company's Basic Corporate Governance Policy sets forth the criteria forthe appointment and dismissal of directors as follows.
1. Directors shall meet the following criteria, with due regard to knowledge,
experience, ability, and diversity(i) Those with a good understanding of our company's management philosophy
and are committed to the Company,(ii) Extensive experience in company management,(iii) Sufficiently qualified to make decisions on important businessmatters of the company as a member of the board of directors(iv) Contribute to strengthening the checks and balances and the monitoring
functions of directors and help ensure the effectiveness of the board of
directors.
2. In addition to the above, the Company's outside directors must alsosatisfy the Company's independence criteria.
3. Candidates for directors are nominated after deliberations and decisions
by the Board of Directors.
4. The term of office for directors shall be one year, and the term of officefor directors who are members of the Audit and Supervisory Committee shall be
two years. Furthermore, re-appointment of directors shall not be precluded.
5. The Board of Directors may dismiss a director who has committed an act
that meets any of the following criteria for submission of a proposal for thedismissal of a director.
(i) In the event of any act in violation of laws and regulations or the
Articles of Incorporation, or any act that may lead to such a violation,(ii) If it becomes clear that the director does not meet all requirements
to be a director,(iii) If there are any other reasons that the nominated candidates are
deemed not to meet requirements for director.

-46-

Reference] Main Agenda at Board of Directors' Meetings
During the fiscal year under review, the Board of Directors met 13 times.
Out of a total of 1,606 minutes, 603 minutes (about 37%) were devoted tofinancial matters, including reports on the stock price, monthly businessperformance and resolutions on the next medium-term management plan.
Furthermore, 415 minutes (about 25%) were spent on management strategies,
including group organizational strategies, 275 minutes (about 17%) on
investments, including the establishment of a joint venture company in India,
and 193 minutes (about 12%) on governance, including the Board of Directors'
operating policies, which were subject to a Board effectiveness evaluation.
The main agenda items were as follows:
Resolutions

Matters reported

Resolution on next medium-term management
plan

IR Strategy

Stock compensation for employees (RS Trust)
Stock compensation (RS Trust) for theGroup's executive officers
Joint venture company, DivaCygnet Private
Limited, is established.
Acquisition of treasury stock

Discussion on shareholder composition
Report on the status of internal control
operations
Overseas IR Report
Activities in the next-generation
management information infrastructure
market (M3 market) from an investor's
perspective
Group Organization Strategy
Group Human Resource Recruitment Strategy
Report on the status of recruitment of key
personnel
Investment in domestic SaaS startups
Defined Contribution (DC) Pension Plan for
the Group-47-

[Reference] Skill Matrix of Executives
The Company's Board of Directors, with the aim of enhancing corporate value,
has selected candidates from among those with diverse and specialized
experience and knowledge in areas such as leadership (management experience),
IT industry/SaaS experience, knowledge of corporate value, global businessexperience, knowledge of organizations and human resources, finance andaccounting, legal affairs and compliance, while giving consideration todiversity. If Proposal 2 "Election of Four (4) Directors (excluding Directors
who are Audit Committee Members)" and Proposal 3 "Election of Three (3)Directors who are Audit Committee Members" are approved as proposed, our Boardof Directors will consist of the following skill matrix. The Company's Boardof Directors consists of four non-audit committee members (including two
outside and independent directors and one foreign national) and three audit
committee members (including two outside and independent directors and one
female director), and the Company believes that the diversity of human resources
and the balance of knowledge, experience, and abilities are sufficiently
considered to maintain a high level of decision-making ability. The Company
believes that the Board of Directors maintains a high level of decision-making
ability.

-48-

Directors who are Audit

Board members

Committee Members
Tetsuji

Hisayoshi

JonMorikawa

KasugaRobertson

Tsuyoshi
Tatsuya Kamoi

NoshiroChie Goto

MakotoNakanoKnowledge of●finance and

●

●

●

●

●

accounting
Legal andcomplianceexpertise
Leadership(Management

●

●

●

●

●

●

experience)
IT industry/SaaS
experience
Corporate Value
Insights●

Global Businessexperience

●

●

●

●

●

●

●

●

●

Knowledge oforganization and●human resources

-49-

●

●

●

[Reference] Independence Criteria for Outside Directors
An outside director is considered to be independent if, as a result of theCompany's investigation, to all extents reasonably possible, it is determinedthat none of the following items applies to the outside director(i) Any person who has been an executive officer (executive director, executive
officer, corporate officer, employee, or employee) of the Company or its
subsidiaries or affiliates (collectively, the "Company Group") at the present
time and for the past ten (10) years,(ii) A person who directly or indirectly holds 10% or more of the total voting
rights of the Company or a person who executes the business of such a person,(iii) A person with whom our Group has a major transaction (Note 1) or withwhom our Group has a major transaction (Note 1), or a person who executes
business on behalf of such a person,(iv) A person who receives a large amount of money or other financial benefits
other than director's remuneration (Note 2) as compensation for providing
professional services such as consultants, lawyers, certified public
accountants, and tax accountants to our Group, or a person who executes duties
on behalf of such a person,(v) Persons who receive donations or grants of more than 15 million yen peryear from the Avant Group or their executive officers,(vi) A person who belongs to an auditing firm that is the accounting auditorof the Group,(vii) An executive officer of a company that has appointed an executive officerof the Group as a director,(viii) Those who fall under (ii) through (vii) above in the past three years,(ix) Spouse or relative up to the second degree of kinship of a person fallingunder (i) through (viii) above.
(Note 1) Major transactions are those involving the transfer of cash exceeding 2% of annual
consolidated net sales, or those involving the transfer of cash exceeding 2% of annual
consolidated net sales, or those involving the transfer of cash exceeding 2% of total
consolidated assets.
A loan of money in excess of 2%.
(Note 2) "Large amount" means, in the case of an individual providing professional services,
the amount of executive compensation received from the Group.

-50-

The amount of such profit excluding remuneration exceeds 15 million yen per year in
the most recent fiscal year, and the amount of such profit excluding remuneration for
professional services is not less than 15 million yen per year.
In the case of a corporation, partnership, or other organization that provides aservice, the profit received from our group is not included in the most recently reported
amount.
The amount of the annual gross income of the organization exceeds 2% or 15 million
yen, whichever is higher, in the fiscal year of the organization.
The term "the Company" means the Company and its subsidiaries and affiliates.

-51-

[Reference] Evaluation of the Effectiveness of the Board of
Directors
We recognize the challenges for the responsibilities, composition, andoperation of the Board of Directors and are committed to continuous improvement,with the aim of realizing sustainable corporate value enhancement. The Boardof Directors conducts an annual analysis and evaluation of the effectivenessof the Board of Directors based on each director's self-evaluation and otherfactors.
<Evaluation Method>
However, the Board of Directors pointed out that it was difficult to clarify issues due tothe focus on quantitative evaluation, so from the fiscal year ending June 30, 2020 onward, we
focused on our own surveys and conducted interviews with directors and auditors using a thirdparty organization as appropriate. The Board of Directors pointed out that the quantitativeevaluation was mainly conducted in the fiscal year ending June 30, 2019, and that it wasdifficult to clarify issues.
In order to identify issues more clearly after June 2021, we have created and implemented
our own questionnaire to allow participants to evaluate issues and provide opinions on how to
respond to them. The survey was administered to all directors, including audit committee
members, in June 2024, and the results were reported to the Board of Directors on July 19,
2024.
<Summary of evaluation results>
In summary, as in the previous year, the majority of respondents believed the monitoring
function has been enhanced by the transition to a company with an Audit Committee System, andthat the Board of Directors is operating efficiently thanks to support from the use of thecompany's own DX Cloud product that can support a Board of Directors (TRINITY BOARD). In
general, the effectiveness of the Board of Directors was highly rated, and the Board of
Directors was evaluated operating appropriately. On the other hand, we recognize that the main
issues are as follows(1) Organization of the Board of Directors
As for the organization of the Board of Directors, the following opinions and issues were
noted
The establishment of a nominating committee is not necessary, but the group CEO and othermembers of the management team should discuss group CEO succession.
A need for people with knowledge of software technology and M&A.
Opportunities for each director to gain skills necessary to fulfill his or her responsibilities
as a director are left to the individual director, but basic skills need to be shared andlearned.
(2) Agenda for Board of Directors Meetings
Issues were identified that need to be discussed further as priority items with regards
succession for the Group CEO and other management team on the executive side.
(3) Operation of the Board of Directors
The previous suggestion that advance distribution of items for discussion at meetings andrelated explanations were inadequate was improved through the use of TRINITY BOARD, the Boardof Directors' DX Cloud platform. In order to provide opportunities to better understand thestrategies and realities of the operating companies, off-site meetings were held to promote
understanding of their businesses, as in the previous year.
<Future actions>
In light of the above remarks, we report that we will push for the following actions in theoperation of the Board of Directors for the fiscal year ending June 30, 2025.
(1) Reconsideration of the annual agenda in light of the importance of the agenda-52-

(2) Organize and discuss group HR strategies that can result in management team succession
plans(3) Provide training opportunities to improve basic skills for directors-53-

Executive Compensation System
1. Policy and method for determining details (amount and calculation method)of remuneration, etc. for each individual director and executive officer(1) Compensation System and Process for Determining Compensation Amounts
The Company's policy and calculation method for determining compensation for
directors and executive officers, and the criteria for the compensation systemand compensation amounts for directors and executive officers are determinedby a Board of Directors vote. In the current fiscal year, the Company madepartial revisions to the system by votes at Board of Directors meetings on
September 1, 2023 and September 27, 2023. In the current fiscal year, theamount of remuneration was partially revised by Board of Directors votes on
September 1, 2023 and September 27, 2023, respectively. (For a summary ofdetails, please refer to (2) Remuneration for Directors (excluding Directors
who are members of the Audit Committee) and (2) Purpose of Performance-Linked
Remuneration, Basis of Indicators and Specific Calculation Method below. (See
Section 2.1.2.).
In order to strengthen the independence, objectivity, andaccountability of the decision-making process, the Company has also establisheda Compensation Advisory Committee as a voluntary advisory body to deliberateon compensation for directors and executive officers. The Compensation Advisory
Committee consists of two independent directors and the Group CEO, and its
chairman is selected from among the independent outside directors. The Group
CHRO consults the Compensation Advisory Committee and the Board of Directors
determines the remuneration of Directors (excluding Directors who are membersof the Audit Committee) after receiving reports and advice from the Committee,
taking into consideration the duties and scope of responsibility of each
Director and the overall market or industry standards.
(2) Remuneration for Directors (excluding Directors who are members of the
Audit and Supervisory Committee)
Remuneration for Directors (excluding Directors who are members of the Audit
and Supervisory Committee; the same shall apply hereinafter for (2)) iscomprised of fixed compensation, which is paid monthly (regular compensation),and performance-linked compensation paid at a fixed time each year. Based on
deliberations by the Remuneration Advisory Committee, the final decision on
remuneration is made by the Board of Directors, subject to a maximum range of-54-

remuneration approved at the General Meeting of Shareholders.
Fixed compensation depends on position, and takes into consideration thelevel commensurate with required abilities and responsibilities. The maximum
amount was determined at the 26th Ordinary General Meeting of Shareholders on
September 27, 2022, which set annual fixed compensation for the Company's
directors as 150,000 thousand yen or less (the number of directors immediately
after the said meeting was 4 (including 2 outside directors)).
Performance-linked compensation is intended for Directors, excluding Outside
Directors (hereinafter referred to as "Eligible Directors"). Performance-linked
remuneration consists of (1) short-term performance-linked compensation, which
is a bonus linked to business performance for each fiscal year, and (2) mediumterm performance-linked remuneration, which is performance-linked compensationin stock tied to changes in specific metrics during the subject period (Note).
At the 26th Ordinary General Meeting of Shareholders held on September 27,
2022, the maximum amount of short-term performance-linked remuneration wasapproved as 41,250 thousand yen per director per year (the number of eligible
directors immediately following the meeting was two).
The maximum amount of the medium-term performance-linked remuneration wasapproved at the 26th Ordinary General Meeting of Shareholders held on September
27, 2022. The maximum annual amount is 100,000 thousand yen, and the number ofshares issued to each eligible director is 60,000 shares per year, up to a
maximum of 100,000 shares per year for all eligible directors. (The number of
eligible directors immediately following each general meeting of shareholders
was two). The terms and conditions of the medium- to long-term performancelinked remuneration are reviewed by a resolution of the General Meeting of
Shareholders as necessary. The most recent resolution was approved at the 27th
Ordinary General Meeting of Shareholders held on September 27, 2023, which
consisted of two parts: firstly to grant shares of the Company's common stockat the end of a one year period on the condition that the Company's share priceincreases from the beginning of each term. The other part grants a number ofshares of common stock calculated based on the Company's stock growth rate.
The proportion of each type of remuneration is 45%-50% fixed remuneration,
15%-20% short-term performance-linked remuneration, and 35% medium-term
performance-linked remuneration, when performance goals are met (based on ashort-term performance incentive coefficient of 100%).
Since outside directors are independent from the execution of business,
performance-linked remuneration is not applicable to them, and they only-55-

receive the fixed remuneration stated above.
(Note) The period covered by the medium-term performance-linked remuneration,
for which a decision was made in the current fiscal year as to whether or not
to award, was the three-year period from September 2020 to September 2023.
(3) The amount of remuneration for Directors who are members of the Audit
Committee is fixed, and is determined through discussions among the Directors
who are members of the Audit Committee, within the maximum amount of
remuneration resolved at the General Meeting of Shareholders. This takes into
consideration factors such as whether they are full-time or part-time Directors,
whether they are internal or outside Directors, and their roles. The amount of
remuneration is determined through discussions among the Directors who are
Audit Committee members, taking into consideration such factors as full-timeor part-time status, internal and outside directors, and their role. The maximum
level of remuneration was resolved at the 26th Ordinary General Meeting of
Shareholders held on September 27, 2022 to be no more than 55,000 thousand yen
per year (the number of directors who are members of the Audit Committee
immediately after the said meeting is three).
2. Purpose of performance-linked compensation, basis for the index, andspecific calculation method(1) Short-term performance-linked compensation
Directors (excluding Outside Directors and Directors who are members of the
Audit and Supervisory Committee)
The short-term performance-linked remuneration for Directors (hereinafterreferred to as "Eligible Directors". Short-term performance-linked compensation
paid to Directors (excluding Outside Directors and Directors who are membersof the Audit Committee) is a remuneration system linked to the year-on-yearincrease or decrease in consolidated net income after taxes. This metric is
consistently emphasized in medium- to long-term management strategy, themedium-term management plan and annual performance of the Company, and is paidin cash. The amount is calculated by multiplying the standard amount determinedbased on position and other factors, by a short-term incentive coefficient,which is set in a range of 0% (when consolidated net income after taxes is lessthan 100% versus the previous year) to 150% (when consolidated net income after-56-

taxes is 137.5% year-on-year or more) depending on the year-on-year change inconsolidated net income after taxes.
<Results related to performance indicators for short-term performance-linked
compensation>
Consolidated net income after taxes for the current fiscal year, which serves
as a performance indicator, was 2,850 million yen. This was 136% compared tothe consolidated net income after taxes (2,094 million yen) in the previous
fiscal year. Short-term performance-linked compensation was paid at 144% of
the short-term performance compensation base amount. The short-term incentive
coefficient was calculated as follows: (Consolidated net income after tax forthe current period: 2,850 million yen / Consolidated net income after tax forthe previous period: 2,094 million yen - 1)÷0.375×1.5=1.44(2) Medium-term performance-linked compensation
This is a performance-linked stock compensation plan under which shares of
the Company's common stock are delivered depending on the level of achievementof performance targets. The period for which a decision has been made as towhether or not to pay the allowance in the current fiscal year will be from
September 2020 to September 2023.
The number of shares to be delivered will be determined by multiplying thenumber of shares determined by our board of directors (the base number ofshares to be delivered) by the share delivery ratio determined in the range of
0% (the rate of growth in our share price is less than 100%) to 100% (our shareprice grows by more than 150%) according to our stock growth rate (*), a
representative indicator of our corporate value during the above three-year
period.
(*) The Company's stock growth rate is calculated by dividing the Company's
Total Shareholder Return (TSR) during the subject period by the growth rate of
the Tokyo Stock Exchange Stock Price Index (TOPIX) during the subject period.

-57-

<Achievement of Performance Indicators for Medium-term Performance-Linked
Compensation>
With respect to the medium-term performance-linked remuneration (covering
the period from September 2020 to September 2023), for which a decision wasmade in the current fiscal year as to whether or not to pay, the Company's TSR(Total Shareholder Return) for the subject period was 135.0%, the TOPIX growthrate was 145.7%, and the Company's share price growth rate was 92.7%. Since
this is a result where the Company's stock growth rate is less than 100%, theshare delivery ratio is 0%, and no medium- to long-term performance-linked
compensation was paid.
(3) Remuneration of Directors
Remuneration paid to directors during the fiscal year under review was asfollows
Directors (excluding Directors who are members of the Audit and Supervisory
Committee)
The Board of Directors has determined that the method of determining thedetails of remuneration, etc. and the details of the determined remuneration
are in line with the policy for determining remuneration for each individual
director, based on the calculation process shown above in 1. and (1) and (2).

Classification

Directors (excluding Audit &Supervisory Committee
Members) (of which Outside
Directors)
Directors (Audit &Supervisory Board Members)(of which outside
directors)
Total(of which outside
directors)

Total amount ofcompensation,etc.

Total amount of remuneration,etc. by type
Basic

Number of
eligible
directors
Performanceand officers
linked158 million
yen(20 million
yen)

109 million
yen(20 millionyen)

49 million
yen(-)

5 persons(3)

38 million
yen(22 million
yen)

38 million
yen(22 million
yen)

(-)

3 persons(2)

197 million
147 million
49 million
8 persons
yen
yen
yen
(5
(42 million(42 million
persons)
(-)
yen)
yen)
(Note) 1. The amounts paid to directors do not include employee salaries for directors who
concurrently serve as employees.
The above includes one director who retired at the conclusion of the 27th Ordinary
General Meeting of Shareholders held on September 27, 2023.

-58-

Reference
The Company plans to revise its policy on how individual compensation for
directors and corporate auditors is determined, effective from the fiscal year
ending June 30, 2025. Thereafter, medium-term performance-linked compensation
for directors will be a stock-based compensation plan using a trust. In
principle, this will grant shares at a set time each year and the criteria andprocedures for granting of shares will be determined by the Share Delivery
Regulations established by the Board of Directors. The criteria and proceduresfor the delivery of shares shall be determined in accordance with the Share
Delivery Regulations established by the Board of Directors. Details of therevisions in the medium-term performance-linked remuneration are subject toapproval by shareholders in Proposal No. 4 (pages 22 to 24 of this Notice ofConvocation). Please refer to the relevant agenda for details of the revisions.

-59-Compliance and Risk Management
System to ensure the appropriateness of business operations and the status ofoperation of such system
The following is an overview of the status of operation of the system toensure that the execution of duties by directors complies with laws andregulations and the Articles of Incorporation, and other systems to ensure theappropriateness of operations.
<Summary of the decision>(1) Systems to ensure that the execution of duties by directors and employees
complies with laws and regulations and the Articles of Incorporation
Directors shall comply with the Group's Code of Conduct, take the initiativein properly executing operations in accordance with laws and regulations, theArticles of Incorporation, the Board of Directors' Regulations, and otherinternal regulations, and shall ensure that all employees are fully aware of
the Code of Conduct.
Risk managers of each Avant Group company, appointed by the chairman of the
Risk Management Committee, shall deliberate and review important issues andresponses at the Risk Management Committee, and report to the Board of Directors.
The Compliance Committee shall confirm the status of compliance and deliberate
and examine important issues and responses at the Compliance Committee meetings,
and report to the Board of Directors.
The Company shall establish and operate an internal whistle-blowing system,with outside attorneys and directors who are members of the Audit andSupervisory Committee as contact persons, to report violations of laws andordinances and other acts that may be questionable under laws and ordinances.
The Audit & Supervisory Board Members shall audit the execution of duties by
the Directors by attending meetings of the Board of Directors and otherimportant meetings and by investigating the status of business execution andother items in accordance with the audit policy set by the Audit & Supervisory
Board.
(2) System for the storage and management of information related to the
execution of duties by directors
Information related to the execution of duties by directors shall be properly
stored and managed in accordance with laws and regulations, the Board of
Directors Regulations, the Document Management Regulations, and other related
rules and regulations.
(3) Regulations and other systems for managing risk of loss
To prevent risks as well as to properly manage operations and funds bymonitoring performance status through rolling forecast management in a cycle
appropriate to the business environment, with respect to the progress ofbusiness performance and thorough control of expenses.
A Risk Management Committee shall be established, chaired by a Representative
Director, and risk management managers of each Group company appointed by the-60-chairperson shall deliberate and review important issues and responses at the
Risk Management Committee, and report to the Board of Directors.
A Compliance Committee shall be established to manage risks related tocompliance, information assets, and other business matters by preparing anddisseminating necessary rules, manuals and other items.
Establish an Information Security Committee to strengthen the management of
information assets and its response.
The Company shall consult with and receive advice and guidance from third
parties with expertise, such as lawyers, accounting auditors, tax accountants,
etc., as necessary in the performance of its business operations.
(4) System to ensure directors execute duties efficiently
The Company's Board of Directors shall meet once a month on a regular basis.
The Board of Directors shall also meet as needed for decision-making and prompt
business execution when necessary, and shall supervise important management
decisions and the status of business execution by directors. The various
meetings and committees, which are headed by directors, shall deliberate anddecide on business execution within the scope of the authority determined in
the regulations. We promote decentralization of management through organization
based on management policies and business plans. The term of office of directors
who are not members of the Audit and Supervisory Committee shall be one (1)year in order to clarify management responsibility and to be able to respondto changes in the business environment.
(5) System to ensure appropriateness of operations of the corporate group (ourCompany and its subsidiaries)
The Company shall support the development and improvement of internal control
systems and promote them in cooperation with subsidiaries, while respecting
the autonomy of the subsidiaries.
The Company's subsidiaries shall enter into a management guidance and business
management agreement and establish a system under which the Company receives
reports on important matters concerning the execution of duties by Directors
and others. Although the board of directors of the Company's subsidiaries makedecisions on important matters, the Company shall obtain approval from theBoard of Directors of the Company for three matters that have a significant
impact on the Group: (a) investment, (b) personnel of directors and officers,and (c) financing, including capital policy.
The Company's subsidiaries shall hold regular Board of Directors meetings oncea month as a basic rule and also hold meetings for decision-making and prompt
business execution when necessary. The Company's Legal Department shall confirm
the status of the meetings.
Employees of the Company's subsidiaries who become aware of any violation oflaws, the Articles of Incorporation, the Company's internal rules, or any act
contrary to socially accepted norms shall report or consult with the Internal
Reporting System Desk.
The Compliance Committee shall provide support for legal compliance and othercompliance-related issues of the Company's subsidiaries.

-61-

The Company shall also strive to prevent risks by appropriately managing
operations and funds and reporting to the Company.
The Company's internal audit department shall conduct internal audits on aregular basis and report results to the Company's directors and the Audit andSupervisory Committee for necessary control to ensure the appropriateness of
the Company's subsidiaries' business operations.
(6) Matters related to employees assisting the duties of Audit Committee members
and matters related to ensuring the effectiveness of instructions to such
employees
In the event that the Audit Committee requests the Board of Directors toestablish a secretariat to assist it in its duties, the secretariat shall beestablished by appointing appropriate personnel from inside and outside theCompany. In the case of employees, make them aware that they are subject tothe direction and orders of the Audit Committee.
(7) Systems for reporting to the Audit Committee by Directors and employees
who are not Audit Committee members, and systems for reporting to the Audit
Committee by Directors, Audit & Supervisory Board Members, employees ofsubsidiaries, or persons who receive reports from these persons.
The Audit Committee members may attend meetings of the Board of Directors andother important meetings, inspect documents necessary for auditing, and request
explanations from directors and employees.
The Company and its subsidiaries' directors, corporate auditors, and employees
shall report to the Company's Audit Committee on matters that have a material
impact on the Company's operations and performance.
The Company shall prohibit any disadvantageous treatment of a person who makes
a report to the Audit Committee by reason of the fact that such report is madeto the Audit Committee.
(8) Other systems to ensure audits by the Audit Committee are conductedeffectively
The Audit Committee shall meet regularly with the President and Representative
Director to exchange opinions on business execution policies, risks and issues
to be addressed, and important audit issues.
The Audit Committee shall regularly exchange opinions with the accounting
auditor.
In the event that any Audit Committee member requests advance payment or
reimbursement of expenses incurred in the performance of his/her duties, such
expenses shall be borne by the Company, except in cases where such payment or
reimbursement is found not to be necessary.
(9) Basic Policy on Elimination of Antisocial Forces
With respect to the exclusion of antisocial forces, in addition to the basic
policy regarding the internal control system, the Company shall endeavor todevelop a system as follows.
(ⅰ) The Group's Code of Conduct declares its support for the elimination ofantisocial forces and the prohibition of antisocial activities.

-62-

We receive written pledges from officers and employees annually regarding"Standards of Conduct and Management of Confidential Information.
(ⅱ) The General Affairs Department shall be appointed as the department incharge of preventing unjustified demands, and shall cooperate with the police
to eliminate antisocial forces and similar such matters. In addition, we willseek confirmation from our business partners about policies on antisocial
forces at the time of signing an initial agreement. We will strive tocontinuously inform them regarding the elimination of antisocial forces andstrengthen our response to them.
<Summary of operating situation>
With respect to the system to ensure the appropriateness of business
operations, the Company has continuously investigated the status of thedevelopment and operation of the internal control system since the system was
first established, and reports the results of the investigation to the Boardof Directors. In addition, corrective measures are being taken for problems
identified as a result of the investigation, and efforts are being made toestablish and operate a more appropriate internal control system. The following
is a summary of operations during the current fiscal year.
The Company has chosen to establish a company with an Audit Committee in orderto strengthen the supervisory function of the Board of Directors and further
enhance corporate governance.
The Risk Management Committee met regularly to review risks and consider
countermeasures in response to the changing business environment across theGroup, and the Board of Directors received reports from the Group CRO toascertain the status of risk management.
The Compliance Committee met regularly to ensure compliance across the Group,and the Board of Directors received reports from the Group CLOs to ascertain
the status of compliance.
The Information Security Committee met on a regular basis to strengthen
information asset management and information security across the Group.
During the period under review, the Board of Directors held 13 meetings,
focusing on the steady implementation of the medium-term management plan andthe agenda to strengthen governance and oversight.
The Audit Committee members attended meetings of the Board of Directors, theGroup Management Committee, the Board of Directors of subsidiaries, and otherimportant meetings, and regularly exchanged opinions with the President andRepresentative Director and the independent auditors to ensure theeffectiveness of audits.

-63-

Business Report
July 1, 2023
to June 30, 2024

Matters Relating to the Current Status of the Corporate Group(1) Progress and Results of the Project
Consolidated financial results for the current fiscal year are as
follows.
(Unit: Millions of yen)
28th period
27th period(Fiscal year
ended June 30,
2023)(Fiscal year
ended June 30,
2024)(Current fiscal
year)

Net sales

21,424

Operating income

Year-on-year
Increase/
Decrease

Percentagechange (%)

24,419

2,995

14.0

3,289

4,099

809

24.6

Ordinary income

3,265

4,121

855

26.2

Net income
attributable toowners of theparent

2,094

2,850

756

36.1

In terms of consolidated net sales, theDigital Transformation
promotion business in particular grew strongly against a backdrop ofinvestment needs by Japanese companies to maintain and enhancecompetitiveness through upgrades to corporate management and businessactivities through the use of data and digital technology. This isbecoming a medium- to long-term trend among our clients. In addition,
the outsourcing business also maintained a high growth rate.
From the current fiscal year, the Company has revised thecategorizations for its business segment and changed the previous
reportable segments of "Group Governance Business," "Digital
Transformation Business," and "Outsourcing Business" to "Consolidated
Financial Disclosure Business," "Digital Transformation Promotion
Business," and " Management Solutions Business”. In light of this change,
results for each reportable segment for the previous year have been
restated in line with the new reportable segments.

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The Consolidated Financial Disclosure Business supports value creation
development and maintenance of our proprietary software DivaSystem forconsolidated management support and consolidated accounting, as well as
the provision of outsourcing of consolidated and non-consolidated
accounting using this software. With regards the position of the segment
within the group, the aim is to establish a business model that combines
both software and outsourcing businesses.
The Consolidated Financial Disclosure Business also includes
information search services for disclosure documents provided by Internet
Disclosure, Inc, mainly to audit firms.
The Digital Transformation Promotion Business supports the promotionof digital transformation at companies and data-driven management throughconsulting and system development services, including the provision of adata platform for utilizing all kinds of data related to companies to AI
and BI solutions that can analyze, predict, and enable data visualization.
From major cloud vendors to multi-cloud compatible software, customers
can find out about the latest data utilization and generative AI
specializing in data utilization, as well as train engineers and develop
their own data utilization platform products.
The Management Solution Business provides one-stop support fromconsulting to system planning, construction, implementation, operation,and maintenance. The aim is to identify and maximize hidden value within
a company, through a focus on group management, consolidated accounting,and business management. In addition to in-house software development,
it is also possible to develop our software in combination with softwarefrom other companies. The role of the business is to maximize the Group's
assets and to continue to generate solutions that provide management datathat is useful for the enhancement of corporate value.
Despite higher fixed personnel costs due to an increase in headcount,
outsourced processing costs as a result of an increase in orders, andinvestment-related expenses to realize future growth centered onstrengthening the software business, operating profit and ordinary profit
increased thanks to a decrease in one-time expenses incurred in theprevious fiscal year due to group reorganization, as well as increased
sales in the Digital Transformation Promotion business. Operating profit
was 4,099 million yen (up 24.6% year-on-year), ordinary profit was 4,121
million yen (up 26.2% year-on-year), and net income attributable toowners of the parent was 2,850 million yen (up 36.1% year-on-year).

-65-

The status of each reportable segment is as follows
Net sales (Millions of yen)
28th period
27th period

Consolidated
Financial
Disclosure
Business
DigitalTransformation
Promotion Business
Management
Solutions BusinessCorporate Expenses
and elimination ofinter-segment
transactions
Consolidated net
sales(Fiscal year
ended June 30,
2023)(Fiscal year
ended June 30,
2024)(Current fiscal
year)

6,902

Year-on-year
Increase/
Decrease

Percentagechange (%)

7,537

635

9.2

7,272

8,846

1,574

21.7

7,883

8,518

634

8.1

△633

△483

150

-

21,424

24,419

2,995

14.0

(2) Operating profit (Millions of yen)
28th period
27th period

Consolidated
Financial
Disclosure
Business
DigitalTransformation
Promotion Business
Management
Solutions BusinessCorporate Expenses
and elimination ofinter-segment
transactions(Fiscal year
ended June 30,
2023)(Fiscal year
ended June 30,
2024)(Current fiscal
year)

1,586

Year-on-year change
Increase/
Decrease

Percentagechange (%)

1,840

253

16.0

1,118

1,633

515

46.1

1,321

1,407

86

6.6

△736

△782

△46

-

-66-

Consolidated net
sales

3,289

4,099

809

24.6

In the consolidated financial disclosure business, the software
business has been improving under the new structure by reviewing pricing
strategies and strategically reducing intra-group contract development
transactions for product maintenance and other operational support, while
the outsourcing business continued to maintain high growth andcontributed to revenue growth. As a result, net sales increased to 7,537
million yen (up 9.2% year-on-year). In terms of profitability, theoutsourcing business drove growth, resulting in an increase in operating
profit to 1,840 million yen (up 16.0% year-on-year).

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In the Digital Transformation Promotion Business, the need to utilize
data for decision-making related to management and business promotion
continues to accelerate, and the number of projects related to cloud data
platform construction is on the rise, with an increase in large-scale
projects and in the scale of ongoing projects. The increase in the numberof large-scale projects and the expansion of the scale of ongoing projects
was a significant driver of revenue growth. As a result, net sales
increased 21.7% year on year to 8,846 million yen (up 21.7% yearon-year).
Although personnel costs increased due to efforts to secure humanresources to provide services along with ongoing rises in requisite
subcontracting expenses, this was offset by the increased revenue, andoperating profit was 1,633 million yen (up 46.1% year-on-year),significantly higher than the same period of the previous year.
In the Management Solutions Business, while the transformation of the
profit structure, mainly in the software business, is still in progress,
results have started to emerge in the area of group business management
solutions, and the fourth quarter was affected by a significant increasein sales compared to the previous year's single quarter due to large
project orders and other factors, Sales rose to 8,518 million yen (up8.1% year-on-year). In terms of profitability, operating profit increased
to 1,407 million yen (up 6.6% year-on-year), despite cost-increasing
factors such as higher personnel costs due to securing personnel for
future growth and increased system development costs and depreciation
costs associated with strengthening the software business.
The number of consolidated employees was 1,522 at the end of the fiscal
year, up 133 from the end of the previous fiscal year.
Orders received and sales in the current consolidated fiscal year are
as follows.
Orders Received(Millions of yen)
Current fiscal year
July 1, 2023
to June 30, 2024
Sales
Consolidated Financial Disclosure
Business
Digital Transformation Promotion
Business

Orders received

Outstanding orders

7,537

8,269

4,681

8,846

9,211

2,069

Management Solutions Business

8,518

9,410

4,006

Elimination of intersegment
transactions

△483

△711

△1,974

Total

24,41926,180

8,782

-68-

(2) Capital Investment
Total capital expenditures for thecurrent fiscal year

360 million (including software)yen

Major capital investments include the purchase of office equipment andsoftware for internal use.
(3) Financing
There were no special items of note in the current consolidated fiscal
year.

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(4) Assets, Profit and Loss(i) Assets and profit/loss of the corporate group
28th period(Fiscal year
(Fiscal year (Fiscal year ended June 30,
ended June 30, ended June 30, ended June 30,
2024)(Current fiscal
2021)
2022)
2023)
25th period(Fiscal year

Item

26th period

27th periodyear)
Net sales
Ordinary profit(Million yen)(Million yen)Net income
attributable to(Millioowners of the parent n yen)
Net income per share (Yen)
Total assets
Net assets(Million yen)(Million yen)Net assets per share (Yen)

16,236

18,703

21,424

24,419

2,808

2,988

3,265

4,121

1,888

2,045

2,094

2,850

50.24

54.37

55.65

76.62

13,956

16,617

18,70521,896

8,787

10,597

12,32813,293233.70281.68327.51362.95(Note) 1) The Company introduced a share grant trust for its employees and executive officers
from the current consolidated fiscal year. Company shares held by the trust areincluded as part of treasury stock deducted from the average number of shares during
the period for the purpose of calculation of net income per share. For net assets
per share, Company shares held by the trust are included as part of treasury stock
deducted from the average number of shares during the period for the purpose of
calculating the number of shares issued and outstanding at the end of the fiscal year.
2) Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020)
were introduced from the beginning of the 26th fiscal year. Figures for the 26th
fiscal year and subsequent fiscal years are after the application of the said
accounting standard.

(2) Assets, Profit and Loss
28th period(Fiscal year
(Fiscal year (Fiscal year ended June 30,
ended June 30, ended June 30, ended June 30,
2024)(Current fiscal
2021)
2022)
2023)
25th period(Fiscal yearType

26th period

27th period

year)
Operating revenue
Ordinary profit
Net income(Million yen)(Million yen)(Million yen)Net income per share (Yen)
Total assets
Net assets(Million yen)(Million yen)

2,661

2,324

3,572

2,703

1,348

731

1,873

842

1,464

646

2,022

1,068

38.95

17.18

53.74

28.73

8,899

10,947

8,780

7,919

6,219

6,532

8,178

7,329

-70-

Net assets per share (Yen)

165.41173.63217.27200.11(Note) 1) The Company introduced a share grant trust for its employees and executive officers
from the current consolidated fiscal year. Company shares held by the trust areincluded as part of treasury stock deducted from the average number of shares during
the period for the purpose of calculation of net income per share. For net assets
per share, Company shares held by the trust are included as part of treasury stock
deducted from the average number of shares during the period for the purpose of
calculating the number of shares issued and outstanding at the end of the fiscal year.
2) Accounting Standards for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020)
were introduced from the beginning of the 26th fiscal year. Figures for the 26th
fiscal year and subsequent fiscal years are after the application of the said
accounting standard.

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(5) Significant parent company and subsidiaries(i) Parent company
Not applicable.
(ii) Status of Important Subsidiaries
Company Name

Capital

AVANT CORPORATIONInternet
Ltd.

Disclosure

Percentage ofvoting rights
held by theCompanyCo.,

100 million yen

100.0%

39 million yen

100.0%

Primary Business
Software development, sales,
installation support,
maintenance and other related
businesses
Software development and salesof disclosure information andregulation search services
Design of information systems
Development and sales ofsoftware and other related
businesses

ZEAL CORPORATION

100 million yen

100.0%

DIVA CORPORATION.

100 million yen

100.0%Development and sales ofsoftwareOutsourcing-related business

DIVA CORPORATION OF AMERICA

2.6 million US
dollars

100.0%

Survey of IT products andservices(Note) 1. The Company has the five consolidated subsidiaries above and no equity method
affiliates.
2. Metapraxis Limited was excluded from the scope of equity-method affiliates
because the Company no longer had a significant influence over Metapraxis Limitedin the fiscal year under review.
3. DIVA CORPORATION OF AMERICA raised capital through a shareholder allocation of
1.5 million US dollars on March 7, 2024.

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(6) Issues to be addressed
The Group formulated its business activities goals as part of its mediumterm management plan, "BE GLOBAL 2023," which set out the company’s goalof becoming a world-class software company. Based on the experience gained
through these activities, we announced a new medium-term management plan,"BE GLOBAL 2028," in August 2023. As part of this we created an action planover a five-year period to align business and group strategies.
The strategic direction of BE GLOBAL 2028 is the materiality of becominga software company that helps increase corporate value. Based on thisstrategy, we aim to create a value creation virtuous cycle through the useof software that enables an increase in all employees' ability to contributeto customers and boosts productivity. The increase in profits can be
returned through compensation and to promote R&D. These processes can help
lift our own corporate value.
In order to realize BE GLOBAL 2028, we must address the following issues.
1. Demand emerging in the growing DX market for management
The group overall is looking to position itself in an area where
we can be of most use today, the DX market of management. This iswhere companies are seeking to increase their corporate value.
Furthermore, our group companies Diva and Internet Disclosure operate
in the consolidated financial disclosure market, Zeal operates in
the BI field, data infrastructure, and DX market. Meanwhile, Avant
operates in the investor-oriented next-generation management
information infrastructure market. All markets have growth potentialof 15% to 30% per year.
In each of these markets, we need to accurately determine whatcustomers are looking for, and to fully exploit the potential of thegrowth markets.
2. Promote software-driven strategies that contribute to customers
The Group's strategic materiality is to become a software company
that helps increase corporate value. We have formulated a Software
Driven Strategy to achieve this goal.
To add value to our customers, we believe we should create
opportunities for management decisions to be made from a perspectiveof increasing corporate value. Changing the data we can provide to aboard of directors is one way to do this. To this end, we intend
fully maximize the market for TRINITY BOARD, our DX cloud platform
for a board of directors that we developed in FY24, and AVANT Compass,a corporate value analysis cloud platform that offers the power ofsoftware to provide steer to a board of directors.

-73-

We believe that by creating this state of affairs, the value of
information brought to customers by each group company will increase,and the contribution to customers by the group as a whole will be ofeven higher added value.
3. Increase value-creating productivity
An increase in value-creating productivity requires an improvementin sales productivity. This equates to an increase sales per employee
for the same investment cost (cost of sales and SG&A expenses), or
an improvement in investment cost productivity, which can lower
investment costs at the same level of sales. The two aspects must be
combined for an improvement in value-creating productivity.
We believe that sales productivity can be enhanced by adding value
to solutions that offer a combination of software and services. We
plan to achieve this through the promotion of the software-driven
strategy described above. We will also improve investment costproductivity by streamlining operations through the use of software,
especially generative AI.
4. Development of an environment to improve the value of human resources
The three aforementioned items clarify what we are aiming at.
However, the realization of this goal is predicated on getting morevalue from our human resources. We will quantify what HR requirements
are necessary to achieve our goals and look to address any gaps todevelop a backdrop for growth.
While focusing on the growth of existing employees, we will also
look to attract talented human resources from outside the company
when sourcing new talent internally is difficult. We will seek tofind human capital not only in regular recruitment, but also throughnetwork building related to software procurement.
5. Increase employee job satisfaction
A primary asset of our group is our excellent employees who havehigh technology skills and expertise and enjoy taking on a challenge.
While increasing the number of employees each fiscal year, we areworking to create a rewarding work environment that enriches the
lives of our employees and allows them to focus on producing resultsin their work. The Group conducts employee surveys using the Great
Place to Work ® (GPTW) scheme as part of our processes to create arewarding work environment, visualize job satisfaction and engagement.
We also implement improvement actions, with the goal of raising the
GPTW score to 70 points for each Group company. We are working toachieve this GPTW score goal of 70 points for each Group company.

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6. Compliance
Since establishment, our Group has emphasized compliance as afundamental principle of corporate governance. However, compliancedemands in society have been growing in recent years. We believe thata loss of trust from the public in the event of a violation is higher
than ever before, and the time taken to win back trust is also longer
than ever. We are promoting our business activities in a more thoroughmanner than previously to ensure that we do not breach any labor laws
or regulations, as well as other relevant laws and corporate ethics.
7. Sustainability
The Group's management philosophy, "Creation of a 100-Year
Company," positions the company as a public institution as part of awider society and looks to sustainably develop an organization thatexists for the benefit of society. Our group's mission is to make acontribution by providing value in helping our customers use
management data to create the future. While looking to achieve thismission, we work with various stakeholders, so each and every memberof the group must act with due consideration for maintaining a balance
between economic activities, environmental conservation, and social
fairness. Therefore, sustainable development will not be possible
unless each and every member of the Group acts with due consideration
for maintaining this balance. To this end, on July 22, 2020, theGroup established the Group Human Rights Policy and Group
Environmental Policy. Furthermore on August 25, 2020, the Groupsigned the United Nations Global Compact, declaring our endorsement,
support, and implementation of essential values in four areas: humanrights, labor, environment, and anti-corruption. On July 1, 2021, we
took the first step toward the realization of a sustainable society
by converting all of our group's annual electricity consumption toenvironmentally-friendly sources and reducing greenhouse gas
emissions to zero. In addition, the Group has been engaged in
activities to support sporting events and cultural activities
organized by local governments and industry associations.

-75-

(7) Principal Businesses (As of June 30, 2024)
Segment

Consolidated
Financial
Disclosure
Business

DigitalTransformation
Promotion
Business

Management
Solutions
Business

Business
The segment supports value creation through development
and maintenance of our proprietary software “DivaSystem”
for consolidated management support and consolidated
accounting, as well as the provision of outsourcing of
consolidated and non-consolidated financial statements
using this software. With regards to the segment’s
position within the Group, the Company aims to establish
a business model that combines both software and theoutsourcing business.
The Consolidated Financial Disclosure Business also
includes data search services for disclosure documents
provided by Internet Disclosure, Inc primarily to audit
firms.
The Digital Transformation Promotion Business supports thepromotion of digital transformation at companies and datadriven management through consulting and systemdevelopment services, including the provision of a data
platform for utilizing all kinds of data related tocompanies, to AI and BI solutions that can analyze,
predict and enable data visualization. From major cloudvendors to multi-cloud compatible software, customers canfind out about the latest data utilization methods andgenerative AI specializing in data utilization, as wellas train engineers and develop their own data utilization
platform products. The suite of products offered is alsoslated for expansion.
The Management Solutions Business has a focus on groupmanagement, consolidated accounting, and businessadministration and aims to identify and maximize hidden
value at companies and offers one-stop support services
fromconsultingtosystemplanning,building,
installation, and maintenance. In addition to in-housedevelopment, it is also possible to develop in combination
with software from other companies. The role of thisbusiness is to maximize the Group’s assets and continue
to generate solutions that will provide management datathat is useful for the enhancement of corporate value(8) Main Sales Offices(As of June 30, 2024)(i) Our main offices
Tokyo Head Office15-2, Konan 2-chome, Minato-ku, Tokyo(ii) Principal offices of important subsidiaries
AVANT CORPORATION(Head office)Minato Ward, Tokyo-76-

Osaka OfficeOsaka City, OsakaI n t e r n e t D i s c l o s u r e C o . , L t d . Chuo-ku, TokyoZEAL CORPORATION(Head office)Shinagawa-ku, Tokyo
Osaka OfficeOsaka City, Osaka
Sapporo Office
Sapporo City, Hokkaido
DIVA CORPORATION.
(Head office)Shinjuku-ku, Tokyo
Konan Office
Minato-ku, Tokyo-77-

(9) Employees(As of June 30, 2024)(i) Employees of the corporate group
Increase (Decrease) from the end of theprevious consolidated fiscal year

Number of employees
1,522 persons

Increase of 133

1. The number of employees indicates the number of full-time employees.
2. The number of employees does not include temporary employees (average 28 temporary andpart-time employees during the period).

(ii) Employees of the Company
Number of employees
37 persons

Increase (decrease)from the end of theprevious fiscal year
0 personsAverage age
44.6 years old

Average years ofservice
6.2 years

1. The number of employees indicates the number of full-time employees.
2. The number of employees does not include temporary employees (average 28 temporary andpart-time employees during the period).

(10) Principal Lenders(As of June 30, 2024)
The company has no loans from financial institutions.
The Company has entered into commitment line agreements (maximum loan
amount: 3,500 million yen) with financial institutions with which it does
business in order to efficiently procure working capital.
(11) Other important matters concerning thecurrent status of the corporate group
Not applicable.

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Matters related toCompany shares(As of June 30, 2024)(1) Total number ofshares authorized
to be issued

62,304,000(2) Total number ofshares issued

37,645,851(3) Number ofshareholders(of which 367,098 shares aretreasury stock)

2,864(4) Major shareholders (Top 10)
Number of shares
held (shares)

Shareholding ratio(%)

Tetsuji Morikawa

9,764,000

26.19

The Master Trust Bank of Japan, Ltd.

3,270,100

8.77

Tsuyoshi Noshiro

1,868,800

5.01

OBIC Business Consultant Co.

1,600,000

4.29

The Custody Bank of Japan, Ltd.

1,457,600

3.91

Avant Group Employee Stock OwnershipPlan

1,380,453

3.70

SSBTC CLIENT OMNIBUS ACCOUNT

995,400

2.67

PCA Corporation

778,400

2.09

FCP SEXTANT AUTOUR DU MONDE

750,000

2.01

Northern Trust co. (avfc) re theHighclere
INTERNATIONAL INVESTORS SMALLER
COMPANIES FUND

658,100

1.77

Name of shareholder(Note) Shareholding ratio is excludes 367,098 shares of treasury stock. The 367,098 shares oftreasury stock do not include 652,300 shares of the Company's stock held by The Custody
Bank of Japan, Ltd. (Trust Account) as trust assets to be granted to employees andexecutive officers.

(5) Shares issued to corporate officers as compensation for the execution of
their duties during the fiscal year under review
Not applicable.

-79-(6) Other important matters concerning shares(ⅰ) Acquisition of treasury stock
Based on the resolution of the Board of Directors meeting held on April
26, 2024 (acquisition period: May 1, 2024 to November 30, 2024; total
number of shares to be acquired: 1,200,000 shares (maximum); total amountof shares to be acquired: 1 billion yen (maximum)), the Company acquired
treasury stock as follows.
Type of shares acquired: common stock of the Company
Acquisition period: May 1, 2024 - June 30, 2024 (contract basis)
Total number of shares acquired: 364,100 shares
Total acquisition cost: 477 million yen(ⅱ) Transactions in which the Company's shares are issued to employees
and executive officers through a trust
The Company has introduced a Trust to grant shares to employees andexecutive officers as part of an incentive plan for employees and executive
officers.
The Company introduced the Employee Stock Grant Trust following a voteat a Board of Directors meeting on August 4, 2023. The Board of Directors
meeting held on December 20, 2023 resolved to add the Company's executive
officers to this plan.
Purpose of this system
The Company introduced this system with the aim of improving the mediumto long-term corporate value of the Company by adding incentives for
employees and executive officers who contribute to the growth of the Company.
This should foster a sense of belonging among employees and executive
officers, giving them a sense of participation in management, and raising
their awareness of the Company's performance and stock price.
Overview of the System
Under this plan, a trust (hereinafter the "Trust") is established withmoney contributed by the Company as the source of funds. The Trust acquires
shares of the Company's common stock (hereinafter referred to as "Company
shares") and delivers Company shares to each employee and executive officer
via the Trust. The Trust is an incentive plan under which the Company-80-

acquires Company Shares and grants these through the Trust to each employee
and executive officer of the Company. These shares will be granted inaccordance with the Share Delivery Regulations established by the Board of
Directors of the Company.
The acquisition of Company shares by the Trust will be funded entirelyby the Company, so there will be no burden on employees or executive
officers.
The introduction of this system is expected to encourage employees andexecutive officers to perform their duties with an awareness of the stock
price and to motivate employees to work harder, as they will be able toenjoy the economic benefits of an increase in the Company's stock price.

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Outline of the Trust(1) Name: Employee Stock Grant Trust(2) Consignor: The Company(3) Trustee: Sumitomo Mitsui Trust Bank, Limited(Re-trustee: The Custody Bank of Japan, Ltd.)(4) Beneficiaries: Employees and executive officers who meetbeneficiary requirements(5) Trust manager: A third party, independent of the Company and its
officers(6) Exercise of voting rights: Throughout the term of the trust, thetrustee will exercise voting rights in accordance with instructions
from the trust manager.
(7) Type of trust : Money in trust other than money in trust (otherbenefit trust)(8) Trust agreement date : August 15, 2023
(9) Date of monetary trust : August 15, 2023
(10) Date of additional cash trust : December 28, 2023
(11) Trust termination date: December 31, 2028 (scheduled)(ⅲ) Number of treasury stock 1,019,398 shares
Number of treasury stock held by the Company: 367,098 shares
Number of treasury stock held by the trust: 652,300 shares

Matters Concerning Stock Acquisition Rights, etc. of the Company(1) Stock acquisition rights issued to the Company's Directors and Corporate
Auditors as compensation for the execution of their duties(As of June 30, 2024)
Not applicable.
(2) Stock acquisition rights issued to employees, etc. as compensation for
execution of duties during the current fiscal year
Not applicable.

Matters Concerning Company Officers(1) Names and details of Directors
See page 41.
(2) Outline of the contents ofliability limitation agreement
See page 41.

the

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(3) Summary of Contents of Directors' and
Officers' Liability Insurance Policy
See page 42.
(4) Matters Concerning Outside Directors
and Outside Corporate Auditors
See pages 42-43.
(5) Executive Compensation System
See pages 54 through 59.

-83-

Status of Accounting Auditor(1) Name

Deloitte Touche Tohmatsu LLC(2) Amount of compensation,etc.
Amount paid
Amount of remuneration, etc. for services set forth in Article 2, Paragraph 1 of 32 million
yen
the Certified Public Accountants Act (auditing services)

Total amount of monetary and other financial benefits payable by the Company 32 million
yen
and its subsidiaries to the accounting auditor(Notes) 1. The audit contract between the Company and Deloitte Touche Tohmatsu LLC does notdistinguish between the amount of audit fees for audits under the Companies Act andthe amount of audit fees for audits under the Financial Instruments and ExchangeAct, and it is practically impossible to do so.
2. The Audit Committee of the Company received an explanation of the audit plan from theaccounting auditor and, based on the details of the audit fee agreement, confirmed
and reviewed the audit hours and personnel assignments, and as a result, gave its
consent to the audit fee, as stipulated in Article 399, Paragraph 1 of the Companies
Act.
3. In addition to the above, additional remuneration of 2 million yen was paid for an
audit in the previous fiscal year.

(3) Non-audit services
The Company pays its independent auditor for general tax advice.
(4) Policy on Dismissal or Non-reappointment of Accounting Auditor
The Audit Committee shall allow a decision on the dismissal or nonreappointment of an accounting auditor at the General Meeting of
Shareholders if it determines that such dismissal or non-reappointment isnecessary, such as if there is a problem with the accounting auditor's
performance of its duties. In addition, the Audit Committee is able todismiss the accounting auditor subject to unanimous consent of all Audit
Committee members if the accounting auditor is deemed to meet any items of
Article 340, Paragraph 1 of the Companies Act. In this case, the Audit
Committee member selected by the Audit Committee will report the dismissalof the accounting auditor and the reasons for the dismissal at the first
general meeting of shareholders convened after the dismissal.
(5) Outline of the contents of the liability limitation agreement
Not applicable.

-84-

Company structure and policies (compliance and risk management)
See pages 60 through 63.
～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～(Note) Figures in this business report are rounded down to the nearest unit.

-85-

Consolidated Balance Sheet(As of June 30, 2024)(Unit: thousand yen)
Item

AmountItem(Assets)
Current assets

18,201,545

Cash and deposits

10,874,892

Notes, accounts
receivable – tradeand contract assets
Securities

4,440,280(Liabilities)
Current liabilities

8,307,815

Notes and accounts
payable-trade
Lease liabilities

801,391

850,208

6,005

Work in progress

5,880

Accounts payable andaccrued expenses
Income taxes payable

Raw materials andsupplies
Prepaid expenses

81,871

Contract liabilities

3,345,483

1,120,837

Provision for bonuses

1,319,768

Accounts receivable

518,540

170,155

Deposits paid

527,976

Other

135,407

Provision for
director bonuses (andcorporate auditors)
Provision for loss onorders received
Accrued consumption
taxes
Deposits received

Allowance for
doubtful accounts
Fixed assets
Property, plant andequipment
Buildings
Accumulated
depreciation
VehiclesAccumulated
depreciation
Tools, furniture andfixturesAccumulated
depreciation
Intangible fixed
assetsTrademark rights
Software
Other
Investments and otherassets500,000

Amount△4,141
3,695,360
488,987

984,232

17,912
461,061
221,975

Allowance for stock
benefits
Fixed liabilities

129,618

Asset retirement
obligations

295,362

561,381295,362(233,278) Net
income1,956△936
748,417(588,552)

Total liabilities

8,603,177(Net assets)

652,129

Shareholders equity

42,527

Share capital

609,376

Capital surplus

225
2,554,243-86-

12,994,141
345,113
281,913Retained earnings

13,763,738

Treasury shares(1,396,622)
Net income

Investments insecurities
Long-term prepaid
expenses

1,037,000

Leasehold andguarantee deposits
Deferred tax assets

630,981

Other

138,853

Total assets

19,118728,290

21,896,905

Accumulated othercomprehensive income
Valuation difference
on available-for-salesecurities, net of
taxes
Deferred gains orlosses on hedges
Foreign currencytranslation
adjustments

299,586
224,019

2,862
72,704

Total net assets

13,293,728

Total liabilities and net
assets21,896,905-87-

Consolidated Statements of Income
July 1, 2023
to June 30, 2024
(Unit: thousand yen)
Item

AmountNet sales

24,419,760

Cost of sales

13,491,038

Gross profit
Selling, general andadministrative expenses

10,928,722

Operating profit

4,099,123

6,829,599

Non-operating income
Interest income

109

Dividends income

12,296

Gain on investment in partnerships

12,864

Subsidy income

9,404

Other

15,87550,550Non-operating expenses
Interest expense
Loss on investment partnershipmanagement
Fees and commissions

243
13,750Foreign exchange loss

2,483

10,863

Other

589

Ordinary profit

27,9294,121,744

Extraordinary profit
Insurance income

14,030Penalty income

16,96130,991

21,076

21,076Extraordinary losses
Settlement money
Income before income taxes and minority
interests
Corporate, residence and enterprise
taxes
Income taxes-deferred

4,131,659
1,475,358(194,621) Net income

1,280,736

Net income

2,850,922

Net income attributable to owners of theparent2,850,922-88-Consolidated Statements of Changes in Net Assets
July 1, 2023
To June 30, 2024
(Unit: thousand yen)
Shareholders' Equity
Capitalstock
Balance at the beginningof current period

Capitalsurplus345,113Retainedearnings

281,913

Treasurystock

11,477,458

△608

Total
shareholders' equity
12,103,876

Changes during period
Dividends of surplus
Net income
attributable to ownersof parent
Acquisition oftreasury stock
For stock grant trust
Acquisition oftreasury stock
Items other thanshareholders' equity
Net changes of items
other thanshareholders' equity
Total changes of items
during the period
Balance at the end ofcurrent period

345,113

281,913(564,642)(564,642)

2,850,922

2,850,922(477,635)(477,635)△918,379△918,379

2,286,279(1,396,014)

890,264

13,763,738(1,396,622)
Net income

12,994,141

Accumulated other comprehensive income (loss)
Availablefor-salesecurities
Valuationdifferenceonavailablefor-salesecurities
Balance at beginning ofcurrent period

Deferred
gains orlosses onhedges183,925

302

Foreigncurrencytranslation
adjustment

Other
comprehensiveincome40,411

224,639

Total net
assets12,328,516

Changes during period
Dividends from surplus(564,642)

Net income
attributable to owners

2,850,922-89-

of the parent
Acquisition oftreasury stock
For stock grant trust
Acquisition oftreasury stock
Items other thanshareholders' equity
Net changes other thanshareholders' equity
Total changes during
periodBalance at end ofcurrent period(477,635)△918,379

40,0932,560

32,292

74,94674,94640,0932,560

32,292

74,946965,211224,019

2,862

72,704

299,586

13,293,728-90-

Consolidated Notes
Notes to Basis of Presenting Consolidated Financial Statements, etc.
(1) Scope of consolidation
Number of consolidated subsidiaries and names of major consolidated subsidiaries
Number of consolidated
5 companies
subsidiaries
AVANT CORPORATIONName of consolidated
Internet Disclosure Co., Ltd.
subsidiary
ZEAL CORPORATIONDIVA CORPORATIONDIVA CORPORATION OF AMERICA(2) Application of equity method
Not applicable.
Metapraxis Limited was excluded from the scope of application of the equity method since
the Company no longer had a substantial influence over Metapraxis Limited during thecurrent fiscal year.
(3) Fiscal year of consolidated subsidiaries
The fiscal year end of all consolidated subsidiaries is the same as the consolidated
fiscal year end.
(4) Matters related to accounting policies(i) Valuation standards and methods for significant assets
1) Valuation standards and methods for securities
Held-to-maturity debt
Amortized cost method (straight-line method)
securities
Other marketable securities
Market value method (unrealized gains and losses are
Stocks, etc. with noaccounted for as a component of net assets, and the costmarket priceof securities sold is determined by the moving-averageother than what is
method)stated above
Non-marketable equity Cost method based on the moving average method
securities, etc.
For investments in limited liability investment partnerships (deemed as securities
under Article 2, Paragraph 2 of the Financial Instruments and Exchange Law), theCompany uses the most recent financial statements available according to thereporting date stipulated in the partnership agreement as the basis for calculating
the net amount equivalent to its interest in the partnership.
2) Valuation standards and methods for inventories
Cost method based on the specific cost method (the amountWork in process
on the balance sheet is calculated by writing down thebook value of assets which decreased in profitability)-91-

Raw materials

Supplies

Cost method based on the first-in, first-out method (theamount on the balance sheet is calculated by writing down
the book value of assets which decreased in profitability)
Stated at cost determined by the specific identification
method (the amount stated in the balance sheet wascalculated by writing down the book value of assets which
decreased in profitability)-92-

(ⅱ) Depreciation and amortization method for significant depreciable assets
1) property,(excluding leased assets)
plant andequipment
Declining-balance method, except for buildings andaccompanying facilities acquired on or after April 1,
2016, for which the straight-line method is used.
(Principal useful life)

Building
Tools, furniture andfixtures
Straight-line method

2 to 18 years
2 to 15 years

2) Intangible
fixed assets
Software for sale in the Amortization based on estimated sales revenue within themarketestimated sales period (3 years)
Software for internal use The useful life is the period of internal use (3 to 5
years).
3) Lease assets
Leased assets related to finance lease transactions that do not transfer ownership
Straight-line method over the lease term with a residual
value of zero.
(iii) Basis for significant reserves
1) Allowance for doubtful
The allowance for doubtful accounts is provided foraccounts
possible losses on receivables based on the historical
write-off ratio for general receivables and on theestimated amount of uncollectible receivables based on acase-by-case determination of collectibility for specificreceivables such as doubtful receivables.
2) Allowance for bonuses
To provide for bonuses to employees, an amount accrued forthe current fiscal year is recorded based on the estimatedamount of payment.
3) Allowance for bonuses to To provide for bonuses to directors and corporate
directors and corporate auditors, an amount accrued for the current fiscal year
auditors
is recorded based on the estimated amount of payment.
4) Allowance for loss on
The Company records estimated losses from projects relatedorders received
to order contracts for which future losses are expected
as of the end of the current fiscal year and for which theamount of such losses can be reasonably estimated.
5) Allowance for stock
To provide for the payment of Company stock to employees
benefits
and executive officers in accordance with the stock
issuance rules, the Company records an amount based on theestimated amount of stock benefit obligations as of the-93-

end of the current fiscal year.

(ⅳ) Other important matters for the preparation of consolidated financial statements
1) Accounting for significant deferred assets
Share grant expenses
The entire amount is expensed at the time of expenditure.
2) Significant hedge accounting methods
Hedge accounting method
Deferred hedge accounting is adopted.
Hedging instruments andHedging instrument...Foreign currency deposits
hedged items
Hedged items...Anticipated transactions denominated inforeign currencies
Hedging policy
Foreign currency deposits are used to hedge the risk of
exchange rate fluctuations. The Company's policy is to use
such transactions within the scope of actual demand andnot to conduct transactions for speculative purposes.
Methods of evaluating the Since the material terms of the hedging instruments andeffectiveness of hedging
hedged items are the same and the cash flow fluctuations
can be offset after the inception of the hedge, theassessment of effectiveness as of the consolidated balance
sheet date is omitted.
3) Basis for recording significant revenues and expenses
The Group recognizes revenue for contracts with customers at the amount ofconsideration to which it expects to be entitled in exchange for the promised goods orservices when control of the promised goods or services is transferred to the customer,
by applying the five-step approach described below.
Step 1: Identify the contract with the customer
Step 2: Identify performance obligations in the contract
Step 3: Calculate the transaction price
Step 4: Allocate the transaction price to the performance obligations in thecontract
Step 5: Recognize revenue when (or as) performance obligations are satisfied
In our group, we are engaged in the consolidated financial disclosure business,the digital transformation promotion business, and the business management solution
business.
The Consolidated Financial Disclosure Business mainly provides outsourcing services
for consolidated settlement of accounts and other operations.
Since control over the service is transferred to the customer upon delivery of theservice, the Company recognizes revenue over the contract period based on thedetermination that the performance obligation is satisfied in proportion to theprogress of service delivery.
The Digital Transformation Promotion Business mainly provides system integration
services for the utilization of data for BI (Business Intelligence), cloud data platform
implementation support services, and software license and hardware sales and-94-maintenance. The Company also sells and maintains software licenses and hardware.
In the sale of software licenses, the performance obligation is deemed to besatisfied when the license is granted to the customer, and revenue is recognized on a
net basis as an agency transaction at the time the license is granted.
For system development services, the Company recognizes revenue based on thepercentage of progress in determining that performance obligations are satisfied as
development progresses.
For maintenance services, the Company recognizes revenue over the contract period
based on the judgment that the performance obligation will be satisfied over thecontract period.
The Management Solutions Susiness provides license sales of DivaSystem, a proprietary
software package for consolidated management and consolidated accounting,
implementation consulting services, and ongoing maintenance services, including version
upgrades after the start of operations. The company also provides maintenance services,
including version upgrades, after the product is put into operation.
In license sales, the performance obligation is deemed to be satisfied when thelicense is granted to the customer, and revenue is recognized as goods or services
that are transferred at a single point in time.
In the case of implementation consulting services, the performance obligation isdeemed to be satisfied based on the degree of progress in implementing DivaSystem tothe customer, and revenue is recognized based on the percentage of progress.
For maintenance services, the Company recognizes revenue over the contract period
based on the judgment that the performance obligation will be satisfied over thecontract period.
The consideration for the transaction is received within one year of satisfactory
performance obligation and does not include a significant financial component.
4) Standards for translation of significant foreign currency-denominated assets or
liabilities into Japanese currency
Monetary receivables and payables denominated in foreign currencies are translated
into yen at the spot exchange rates prevailing on the consolidated balance sheet date,with translation differences recognized as gains or losses.
Assets and liabilities of overseas subsidiaries are translated into yen at the spot
exchange rate prevailing on the consolidated balance sheet date, while revenues andexpenses are translated into yen at the average exchange rate during the period.
5) Application of Group Total System
The Company and its domestic consolidated subsidiaries apply the Group Total System,
and in accordance with the "Treatment of Accounting and Disclosure when Applying theGroup Total System" (Practical Issues Task Force No. 42, August 12, 2021), theaccounting treatment and disclosure of income taxes and local income taxes or tax
effect accounting related to these taxes are performed. The Company has adopted theaccounting treatment and disclosure of corporate income taxes and local corporate
income taxes.

-95-Notes on Changes in Method of Presentation(Consolidated Balance Sheets)“Accrued consumption taxes" and "Deposits received," were included in "Other" under"Current assets" and "Other" under "Current liabilities" in the previous consolidated fiscal
year, are separately presented in the current consolidated fiscal year due to their increased
importance in terms of amount.
Notes to Additional Information(Transactions in which the Company's shares are issued to employees and executive officers
through a trust)
The Company has introduced a stock grant trust as an incentive for its employees andexecutive officers (hereinafter "Employees, etc.") to provide benefits and to enhance theCompany's corporate value.
Outline of Transaction
Under this plan, points are granted to Employees, etc. who meet certain requirements basedon the Share Delivery Regulations established by the Company in advance, and the Company
shares corresponding to the number of points granted to such beneficiaries will be delivered
to those employees, etc. who meet the requirements to become beneficiaries as stipulated in
the Share Delivery Regulations. The shares to be granted are acquired in accordance with apredetermined trust amount, including a future portion, and are segregated and managed astrust assets.
At a meeting of the Board of Directors held on December 20, 2023, it was resolved to add
the Company's executive officers to this plan.
2. Company Shares in the Trust
Company shares in the trust are recorded as treasury stock under net assets at their bookvalue in the trust (excluding the amount of incidental expenses). The book value and numberof such treasury stock amounted to 918,379 thousand yen and 652,300 shares, respectively,
at the end of the current fiscal year.
Notes to Consolidated Balance Sheets(1) Receivables arising from contracts with customers and contract assets
The balances of receivables and contract assets arising from contracts with customers arepresented in "Notes to Consolidated Financial Statements, 8. Notes to Revenue Recognition(3) Information for understanding the amount of revenue in the current and subsequent fiscal
years (i) Balances of contract assets and contract liabilities, etc.".
(2) Loan commitment contracts
The Company has agreed loan commitment contracts with three banks to facilitate efficient
procurement of working capital.
Below are unused lines of credit related to loan commitments as of the end of the current
fiscal year.

-96-

Total amount of loan commitments

3,500,000 ‘000yen
- ‘000yen

Loan balance
Balance (account)

3,500,000 ‘000
yen

-97-

Notes to Consolidated Statements of Income(1) Revenue from contracts with customers
The amount of revenue from contracts with customers is presented in "Notes toConsolidated Financial Statements, 8. Revenue Recognition, (1) Information
disaggregating revenue from contracts with customers".
(2) Insurance income
The Company records insurance claims for losses incurred between the Company and its
customers arising from or related to unexpected processing associated with the use of
external cloud services.
(3) Penalty income
The Company records the portion of penalty income resulting from the cancellation ofpartnership agreements for the convenience of the counterparty.
(4) Settlement
The Company records losses incurred between the Company and its customers arising fromor related to unexpected processing associated with the use of external cloud services.
Notes to Consolidated Statement of Changes in Net Assets(1) Matters related to the total number of shares issued and outstanding
Number of shares
Decrease in the
Number of shares
Number of shares
increased in the number of sharesat the beginningat the end of thecurrent
during the current
Type of sharesof the current
current fiscal
consolidated
consolidated
fiscal year
year
fiscal year
fiscal year
Common stock

37,645,851--

37,645,851(2) Number of treasury stock

Type of shares

Number of sharesat the beginningof the current
fiscal year

Common stock

2,998

Number of shares
increased in thecurrent
consolidated
fiscal year
1,016,400

Number of shares
decreased in thecurrent
consolidated
fiscal year-

Number of sharesat the end of thecurrent fiscal
year1,019,398(Note 1.) The increase of 1,016,400 common shares held as treasury stock consists of 364,100
shares acquired as a result of a vote by the Board of Directors and 652,300 sharesacquired for a stock delivery trust for employees and executive officers.
2. The number of treasury stock of common stock as of the end of the current
consolidated fiscal year includes 652,300 shares of Company shares held by a stock
delivery trust for employees and executive officers.
(3) Matters related to dividends from surplus(1) Dividends paid, etc.
Resolution

Type ofsharesTotal amount Dividend perof dividends share (yen)-98-Standard Date

Effective date(Thousandyen)
September 27, 2023
Ordinary General
Common stock
Meeting of
Shareholders

564,642

15.00

June 30, 2023

September 28, 2023

(2) Dividends with a record date in the current fiscal year but an effective date in thefollowing fiscal year
Total
Dividend
amount ofType of Source ofper share
Resolution
dividends
Standard Date Effective datesharesdividends(yen)(Thousandyen)
September 25, 2024
Ordinary GeneralcommonRetained
September 26,
708,29619.00 June 30, 2024
Meeting ofstock
earnings
2024
Shareholders(Note) The total amount of dividends resolved at the Ordinary General Meeting of
Shareholders held on September 25, 2024 includes dividends of 12,393 thousand yen for
the Company's shares held by a share delivery trust for employees and executive
officers.

-99-

Notes to Financial Instruments(1) Matters Concerning the Status of Financial Instruments(i) Policy for financial instruments
The Group raises necessary funds (mainly through bank loans and bond issues) based on
management policies and business plans. Temporary surplus funds are invested in financial
assets with high liquidity and safety in accordance with internal investment rules, andshort-term working capital is procured through bank loans. The Company also uses foreign
currency deposits for the purpose of avoiding foreign exchange fluctuation risk. For
details on hedging instruments and hedged items, hedging policy, and methods forevaluating the effectiveness of hedging activities, please refer to "(4) Matters related
to accounting policies, 4) Other important matters for the preparation of consolidated
financial statements, 2) Important hedge accounting methods" in the aforementioned notes
to important items that form the basis for the preparation of consolidated financial
statements. Please refer to "(4) Other important matters for the preparation of
consolidated financial statements, 4) Hedge accounting methods" in "4.
(ⅱ) Description of financial instruments, their risks and risk management systems
Trade notes and accounts receivable, which are operating receivables, are exposed tocustomer credit risk. However, the Company manages this risk by strictly managing credit
for each customer and regularly monitoring collection due dates and balances in orderto early identify and mitigate concerns about collection due to deterioration offinancial conditions and other factors.
Held-to-maturity debt securities are exposed to foreign exchange and interest raterisk, although credit risk is minimal because only highly rated debt securities areincluded as investment securities. Available-for-sale securities are exposed to market
price fluctuation risk and foreign exchange fluctuation risk, but the Company reviews
its holdings on an ongoing basis, taking into account market prices and other factors.
Investments in limited liability investment partnerships are exposed to the risk of adecline in the principal amount invested due to changes in the business and financial
conditions of the issuer of the incorporated shares. However, the Company manages thisrisk by periodically obtaining the financial statements of the partnerships andmonitoring their financial conditions and operations.
Lease and guarantee deposits are security deposits under lease contracts for head
office, branch offices and subsidiaries, and are exposed to credit risk of the lessee.
However, the Company confirms the credit risk of the lessee at the time of contracting
to reduce such risk.
Trade payables, such as notes and accounts payable and accounts payable-other, aremostly due within one year. Lease obligations related to finance lease transactions aremainly for the purpose of financing capital investment, and the longest term of payment
is nine months after the balance sheet date. These are exposed to liquidity risk (riskof being unable to make payments when due), but the Group manages this risk by confirming
and managing cash schedules and payment account balances on a monthly basis.
(iii) Supplementary Explanation on Matters Concerning Fair Value, etc. of Financial
Instruments-100-

Since variable factors are incorporated in the calculation of the fair value offinancial instruments, such values may change due to the adoption of different
assumptions and other factors.
(2) Fair value of financial instruments
Consolidated balance sheet amount, fair value and their differences as of June 30, 2024
are as follows Stocks and other securities with no market price are not included in thefollowing table (please refer to Note 1). (See Note 1.) (1). Cash and deposits," "notes,
accounts receivable, trade and contract assets," "marketable securities," "deposits
received," "accounts receivable," "notes and accounts payable," "accounts payable andaccrued expenses," "income taxes payable," and "deposits received" are not stated because
the fair values approximate their book values due to cash and short term settlements. The
following items are omitted because their fair value approximates their book value due tocash and short-term settlements.

(i)

Consolidated
Balance Sheet
Amount(Thousand yen)

Market value（Thousandyen)

Difference（Thousandyen)

865,551865,551-

Investments in securities

Available-for-sale securities
Lease and guarantee deposits(ⅱ)(including current portion)
Total Assets(i)Lease obligations (including current
portion)Total liabilities

630,981620,488△10,493

1,496,533

1,486,040△10,493

6,005

6,006

0

6,005

6,006

0

(Notes) 1. Shares, etc. without market quotations
Type

Consolidated Balance Sheet
Amountunlisted stocks

0

These are not included in "(i) Investment securities.
2. Investments in partnerships and other similar entities in which the net amount ofequity interest is recorded on the consolidated balance sheets are omitted. The
amount of the said investment on the consolidated balance sheet is 171,448 thousand
yen.

-101-

(3) Matters concerning the breakdown of the fair value of financial instruments by level
The fair value of financial instruments is classified as the following three types basedon the measurability and materiality of the inputs used to calculate fair value.
Level 1 fair value: Fair value calculated based on quoted market prices for assets or
liabilities for which such fair value is calculated that is formed inan active market among the inputs
Level 2 fair value: Fair value calculated using inputs other than Level 1 inputs for the
calculation of observable fair value
Level 3 fair value: Fair value calculated using inputs for calculating unobservable fairvalue
When multiple inputs that have a significant impact on the calculation of fair value areused, fair value is classified to the level with the lowest priority in the calculationof fair value among the levels to which each of those inputs belongs.
(i) Financial instruments carried on the consolidated balance sheet at fair value
Classification
Investments in securities
Available-for-salesecurities
Shares (company)

Market value (Thousands of yen)
Level 1

Level 2

Level 3

Total

408,240--

408,240Other-

407,31150,000457,311

Total assets

408,240

407,31150,000865,551(ii) Financial instruments other than those recorded on the consolidated balance sheetsat fair value
Classification

Market value (Thousands of yen)
Level 1

Level 2

Level 3

Total

Lease and guarantee deposits(including current portion)-

620,488-

620,488

Total assets-

620,488-

620,488

-

6,006

-

6,006

-

6,006

-

6,006

Lease obligations
current portion)
Total liabilities(including-102-

(Note 1) Explanation of valuation techniques used in the calculation of fair value and inputs
related to the calculation of fair value
Investments in securities
Listed stocks are valued using quoted market prices. Since listed stocks are tradedin active markets, their fair value is classified as Level 1 fair value. Mutual funds,
etc., are classified as Level 2 fair value because they are not frequently traded in themarket and are not considered quoted prices in active markets. Unlisted equity warrants
are calculated using significant unobservable inputs and are classified as Level 3 fairvalue.
Lease and guarantee deposits
The fair value of security deposits and guarantee money is classified as Level 2 fairvalue, which is calculated based on the present value of future cash flows discounted by
an appropriate index such as the yield of government bonds, classified by a certain
period of time.
Lease obligations
The fair value of lease obligations is determined using the discounted present value
method based on the total amount of principal and interest and an interest rate thattakes into account the remaining term of the obligation and credit risk, and is classified
as Level 2 fair value.
2. Information on fair value of Level 3 financial instruments whose fair value isreported in the consolidated balance sheets
Notes have been omitted due to immateriality.
8. Notes to Revenue Recognition(1) Information disaggregating revenue from contracts with customers into categories(Unit: thousand yen)
Reportable Segment

Goods or services
transferred at asingle point in time
Goods or services
transferred over a set
period of time
Revenue from contracts
with customers

Consolidated
Financial
Disclosure
Business

DigitalTransformation
Promotion
Business

179,031

36,834148,019

363,885

6,988,003

8,777,211

8,290,660

24,055,874

7,167,034

8,814,046

8,438,680

24,419,760-103-Management
Solutions
Business

Total

Other revenues
Sales
tocustomers

external

-

-

-

-

7,167,034

8,814,046

8,438,680

24,419,760(2) Information that provides a basis for understanding revenues arising from contracts withcustomers
Basis for understanding revenues is as described in "1. Notes to Basis of Presenting
Consolidated Financial Statements, (4) Accounting Policies, (4) Other Significant
Accounting Policies, 3) Basis for Reporting Significant Revenues and Expenses".
(3) Information to understand the level of revenue in current fiscal year and future years(i) Balance of contract assets and contract liabilities, etc.
(Unit: thousand yen)
Current fiscal year
Receivables arising from contracts withcustomers (beginning balance)
Receivables arising from contracts withcustomers (ending balance)
Contract assets (beginning balance)
Contract assets at end of period

2,283,659
3,615,211
679,471825,069

Contract liabilities (beginning balance)

2,796,086

Contract liabilities at end of period

3,345,483

Contract assets mainly relate to the Group's rights to unclaimed consideration inrevenues recognized as contracts progress and satisfy performance obligations.
Contract assets are transferred to receivables arising from contracts with customers
when the Group's rights to the consideration become unconditional.
Contract liabilities primarily relate to unearned revenues from customers. Contract
liabilities are reversed upon recognition of revenue. The amount of revenue
recognized in the current fiscal year that was included in contract liabilities atthe beginning of the period was 2,718,403 thousand yen.
(ii) Transaction price allocated to remaining performance obligations
The aggregate transaction price allocated to the remaining performance obligations
and the period over which revenue is expected to be recognized are as follows.
(Unit: thousand yen)
Current fiscal year
Within 1 year

8,559,443

More than 1 year

222,844
Total

8,782,287-104-

9. Notes to Per Share Information(1) Net assets per share

362.95 yen(2) Net income per share

76.62 yen

(Note) Company shares held by the stock delivery trust for employees and executive officers,which are recorded as treasury stock in shareholders' equity, are included in treasury
stock deducted from the average number of shares outstanding during the fiscal year forthe calculation of net income per share and in treasury stock deducted from the total
number of shares outstanding at the end of the fiscal year for the calculation of net
assets per share. Treasury stock is included in the number of shares deducted from thetotal number of shares issued at the end of the period for the calculation of net assets
per share.
Such treasury stock at the end of the period deducted for the calculation of net assets
per share totaled 652,300 shares in the current consolidated fiscal year, and the average
number of such treasury stock deducted for the calculation of net income per share was405,844 shares in the current consolidated fiscal year.

-105-Notes to Significant Subsequent Events(Establishment of joint venture (subsidiary))
At the Board of Directors meeting held on April 26, 2024, the Company resolved toestablish DivaCygnet Private Limited, a joint venture with Cygnet Infotech Private Limited(https://www.cygnet.one). Based on this resolution, the Company entered into a joint
venture agreement on April 30, 2024 and set up the joint venture on August 5, 2024.
(1) Background of Joint Venture Establishment
In order to become a world-class software company and to secure software development
capabilities on a global level, we outsourced development of our software products to
Cygnet Infotech Private Limited, an India-based company which aims to improve the livesof people around the world with technology-enabled, data-driven solutions. Throughcollaboration with the company, both companies have highlighted growth potential in the
Indian software market and the sales potential of the Group's software products in India.
As a result of discussions between the two companies, a joint venture with joint investment
was established by both companies.
(2) Business and Purpose of the Joint Venture
Through this joint venture, we will strengthen our position in the Indian market by
conducting research and business development for our group's software sales in the Indian
market.
(3) Overview of Joint Venture
(1)

Name

DivaCygnet Private Limited(2)

Location(3)

Title and namerepresentative(4)

Business

Investigation of the Group's software sales in the Indian
market and business development(5)

capital stock

60 million Indian rupees(6)

Date of Establishment

August 5, 2024(7)

accounting period

March

(8)

net assets

60 million Indian rupees(9)

total assets

60 million Indian rupees(10)

Investment Ratio

Avant Group Inc.: 80%.
Cygnet Infotech Private Limited: 20%.

Bandra Kurla Complex, Mumbai, Maharashtraof

CEO: Surendra Sharma-106-

(4) Overview of counterparty in the joint venture agreement

(1)

Name

Cygnet Infotech Private Limited(2)

Location

16-Swastik Society, near Amco Bank, Stadium Circle,
Opposite Diamond Plaza, Navrangpura, Ahmedabad - 380009,
Gujarat, India(3)

Title and name ofrepresentative

Managing Director, Founder & CEO: Niraj Hutheesing(4)

Business

Contracted development of software and development andsales of in-house software(5)

Capital stock

52 million Indian rupees(6)

Date of Establishment

August 22, 2000

(7)

Major Shareholders
and Shareholding
Ratio

Niraj Hutheesing: 87.77%.

(8)

Listed companies andRelationship with theCompany

Capital ties

Not applicable.

Personal
relationsNot applicable.

Businessrelations

The Company has been developing software
products for our group.
Commissioned.

(5) Future scheduleBusiness start date

Late August to early September 2024 (planned)

11. Other notes
Figures are rounded down to the nearest unit.

-107-Balance Sheet(As of June 30, 2024)(Unit: thousand yen)
Item
(Assets)
Current assets
Cash and deposits

AmountItem5,375,833(Liabilities)
Current liabilities

3,506,376

Lease liabilities

Amount540,1141,458

Accounts receivable

98,511

Arrears

114,766

Marketable securities

500,000

Accrued expenses

25,627

Materials andsupplies
Prepaid expenses

21,154

Income taxes payable

1,936

111,635

Deposits (received)

21,434

Cash advance

36,860Allowance for bonuses

53,372

Accounts receivable

530,597

48,899Deposits paid

526,961

Other

43,735

Allowance for bonuses
to directors andcorporate auditors
Allowance for stock
benefits
Deposits received
from subsidiaries andaffiliates
Fixed liabilities

Fixed assets
Property, plant andequipment
Tools, furniture andfixturesAccumulated
depreciation
Intangible fixed
assetsTrademarks
Software
Other
Investments andother assets
Investment securities
Shares of
subsidiaries andaffiliates
Long-term prepaid
expenses
Leasehold andguarantee deposits
Insurance reserve
Other

2,543,511
48,498Asset retirement
obligations
Deferred tax
liabilities

314,094(265,596) Net
income273,468

Total liabilities

72,618200,000
49,74922,43727,312589,864(Net assets)

42,527

Shareholders equity

7,102,599

230,714225

Share capital

345,113

Capital surplus

281,9132,221,545
865,551
1,270,357
9,628

281,913
7,872,195

Legal retained
earnings reserve374

Other retained
earnings
Retained earnings
brought forward

2,194
63,971
9,840

Capital reserve
Retained earnings

Treasury shares
Valuation andtranslation
adjustments-108-

7,871,821
7,871,821(1,396,622)
Net income
226,882

Total assets

7,919,345

Net unrealized gains(losses) on availablefor-sale securities,
net of taxes
Deferred gains orlosses on hedges
Total net assets
Total liabilities and net
assets-109-

224,019
2,862
7,329,481
7,919,345

Statement of Income
July 1, 2023
To June 30, 2024
(Unit: thousand yen)
Item

AmountOperating revenue
Management fee

1,049,718

Dividends received from subsidiaries
and affiliates
Other

1,654,000
148

2,703,866

1,856,660

1,856,660

Operating expenses
Selling, general and administrative
expenses
Operating profit

847,206

Non-operating income
Interest income

758

Dividends income

12,296

Gains on currency exchange

4,434

Subsidy income

202

Other

2,375

20,067

Non-operating expenses
Interest expense

4

Fees and commissions

10,863

Loss on investment partnerships

13,750

Other

589

Ordinary income

25,207842,065

Extraordinary income
Penalty income
Income before income taxes and minority
interests
Corporate, residence and enterprise
taxes
Income taxes-deferred

16,961

16,961
859,026(176,745) Net income(33,052) Net income-110-(209,797) Net income

Net income

1,068,824-111-

Statement of Changes in Net Assets (Consolidated)
July 1, 2023
to June 30, 2024
(Unit: thousand yen)
Shareholders' Equity
Capital surplus

Balance at end of current period
Other
gains
surplus
Balance ofretainedearnings
surplusRetainedearnings
totalamount

7,367,640

7,368,014

Dividends fromsurplus(564,642)(564,642)

Net income

1,068,824

1,068,824

Capitalstock

Balance at start ofcurrent period

Capitalsurplus
total
amountCapitalreserve

345,113

281,913

Legalretainedearnings
reserve

281,913374

Changes during period

Acquisition oftreasury stock
Acquisition oftreasury stock bystock grant trust
Items other thanshareholders'equityNet changes of
items other thanshareholders'equityTotal changes during
periodBalance at end of
period----504,181504,181345,113

281,913

281,913374

7,871,821

7,872,195-112-

Shareholders' Equity

Treasurystock

Balance at start ofcurrent period
Changes during theperiodDividends fromsurplus△608

7,994,432

183,925302

184,228

Total net
assets8,178,660(564,642)(564,642)

1,068,824

1,068,824(477,635)(477,635)(477,635)△918,379△918,379△918,379

Net income
Acquisition oftreasury stock
Acquisition oftreasury stock bystock grant trust
Items other thanshareholders'equityNet changes of
items other thanshareholders'equityTotal changes during
the period
Balance at end of
periodCapitalstock
total
amountValuation and translation
adjustments, etc.
Availablefor-saleValuation
securities
DeferredandValuation
hedge
conversion
difference
profit and
Total
on
loss
difference
available, etc.
for-salesecurities

40,0932,560

42,65342,653(1,396,014)△891,833

40,0932,560

42,653(849,179)
Net income(1,396,622)
Net income

7,102,599

224,0192,862

226,882

7,329,481-113-

Individual Note Table
Matters Related to Significant Accounting Policies(1) Valuation standards and methods for assets(i) Valuation standards and methods for securities
Held-to-maturity debt
Amortized cost method (straight-line method)
securities
Stocks of subsidiaries andCost method based on the moving average method
affiliates
Other marketable securities
Stocks, etc. with noMarket value method (unrealized gains and losses aremarket priceaccounted for as a component of net assets, and the costof securities sold is determined by the moving-averagemethod)Stocks, etc. with no
Cost method based on the moving average methodmarket price
For investments in limited liability investment partnerships (deemed as securities
under Article 2, Paragraph 2 of the Financial Instruments and Exchange Law), theCompany uses the most recent financial statements available according to thereporting date stipulated in the partnership agreement as the basis for calculating
the net amount equivalent to its interest in the partnership.
(ⅱ) Valuation standards and methods for inventories
Supplies
Cost method based on the specific cost method (theamount on the balance sheet is calculated by writing
down the book value of assets which decreased in
profitability)(2) Accounting for significant deferred assets
Share grant expenses
The entire amount is expensed at the time of expenditure.
(3) Depreciation method for fixed assets(i) Property, plant
Declining-balance method, except for buildings andand equipment
accompanying facilities acquired on or after April 1,
2016, for which the straight-line method is used.
(Principal useful life)(ⅱ)Intangible fixed
assetsSoftware for sale in themarketSoftware for internal use

Tools, furniture andfixtures
Straight-line method

4 to 15 years

Amortization based on estimated sales revenue within theestimated sales period (3 years)
Useful life is the period of internal use (5 years).

(4) Basis for reserves-114-

(ⅰ)Allowance for bonuses

To provide for employee bonuses, amount accrued for thecurrent fiscal year is recorded based on estimatedpayment.
(ⅱ)Allowance for bonuses to
To provide for bonuses for directors and corporate
directors and corporate
auditors, amount accrued for the current fiscal year isauditors
recorded based on estimated payment.
(ⅲ)Allowance for stock benefits To provide for the payment of Company stock to
employees and executive officers in accordance with thestock delivery regulations, the Company records anamount based on the estimated stock delivery obligations
as of the end of the fiscal year under review.
(5) Basis for recording revenues and expenses
The Company's revenues consist of management guidance fees and outsourcing fees fromsubsidiaries.
The performance obligation is to provide contracted services to the subsidiary inaccordance with the terms of the contract, and the Company's performance obligation is
fulfilled when the services are provided, and thus revenue and expenses are recognized atthat time.

-115-

(6) Other important matters that form the basis for the preparation of financial statements(i) Significant hedge accounting methods
Hedge accounting method
Deferred hedge accounting is adopted.
Hedging instruments and hedged Hedging instrument...Foreign currency deposits
items
Hedged items...Anticipated transactions denominated inforeign currencies
Hedging policy
Foreign currency deposits are used to hedge the risk of
exchange rate fluctuations. The Company's policy is touse such transactions within the scope of actual demandand not to conduct transactions for speculative
purposes.
Methods of evaluating the
Since material terms of hedging instruments and hedged
effectiveness of hedging
items are the same and the cash flow fluctuations can beoffset after the inception of the hedge, the assessmentof effectiveness at the balance sheet date is omitted.
(ⅱ) Standards for translation of significant assets and liabilities denominated in foreign
currencies into Japanese yen
Monetary receivables and payables denominated in foreign currencies are translated
into Japanese yen at the spot exchange rates prevailing on the balance sheet date, withtranslation differences recognized as gains or losses.
(ⅲ) Application of group aggregation system
The Company applies the group totalization system and accounts for corporate and local
income taxes or tax effect accounting related to these taxes and disclosures in accordancewith the "Treatment of Accounting and Disclosure when Applying the Group Total System"(Practical Issues Task Force No. 42, August 12, 2021).

-116-

Notes on Additional Information(Transactions in which the Company's shares are issued to employees and executive officers
through a trust)
The Company has introduced a stock grant trust as an incentive for employees and executive
officers ("Employees, etc.") to provide benefits and enhance the Company's corporate value.
(1) Outline of Transaction
Under this plan, points are granted to Employees, etc. who meet certain pre-determined
requirements based on the Share Delivery Regulations established by the Company, and acorresponding number of Company shares to the number of points granted to such beneficiaries
will be delivered to Employees, etc. that meet requirements to become beneficiaries as
stipulated in the Share Delivery Regulations. Shares provided to employees are acquired inaccordance with a predetermined trust amount, including a portion in the future, and aresegregated and managed as trust assets.
At a meeting of the Board of Directors held on December 20, 2023, it was resolved to add
the Company's executive officers to this plan.
(2) Shares of the Company remaining in the trust
The Company's shares remaining in the trust are recorded as treasury stock under net assets
at their book value in the trust (excluding incidental expenses). Company shares managed in
the trust are booked as treasury stock under net assets at book value (excluding incidental
expenses). The book value and number of such treasury stock amounted to 918,379 thousand yen
and 652,300 shares at the end of the current fiscal year.
Notes on Balance Sheet(1) Monetary receivables from and monetary payables to subsidiaries and affiliates (excluding
those presented separately)
Short-term monetary claims
150,207 ‘000
yen
Short-term monetary obligations
36,241 ‘000yen
Long-term monetary claims
9,840 ‘000yen
(2) Loan commitment contracts
The Company has entered into loan commitment contracts with three banks for efficient
procurement of working capital.
The following are unused lines of credit related to loan commitments as of the end of thecurrent fiscal year.
Total amount of loan commitments
3,500,000 ‘000
yen
Loan balance- ‘000yen
Balance (of an account)
3,500,000 ‘000yen
Notes on Statements of Income(1) Transactions with subsidiaries and affiliates (excluding those shown separately)Transaction volume from business transactions
1,215,422 ‘000yen
Non-operating transactions
715 ‘000
yen

-117-

(2) Penalty income
The Company records penalty income resulting from the cancellation of partnershipagreements by the counterparty.
Notes on Non-consolidated Statement of Changes in Net Assets
Matters related to the number of treasury stock

Type of sharescommon stock

Number of sharesat beginning of
year

2,998

Number of shares
increased incurrent fiscal
year1,016,400

Number of shares
decreased incurrent fiscal
year-

Number of sharesat end of current
fiscal year

1,019,398(Note 1) The increase of 1,016,400 common stocks in treasury stock consists of 364,100
shares acquired after a vote by the Board of Directors and 652,300 shares acquired
through a stock delivery trust for employees and executive officers.
2. The number of treasury stock of common stock at the end of the current fiscal year
includes 652,300 shares of the Company's stock held by a stock delivery trust for
employees and executive officers.

-118-

Notes on Tax Effect Accounting(1) Significant components of deferred tax assets and liabilities
Deferred tax assets
Tax loss carryforwards

‘000
yen
‘000
504
yen
‘000
528
yen
‘000
16,342yen‘000
14,972yen‘000
22,235
yen
‘000
8,086
yen
‘000
3,061
yen
‘000
124,726
yen
‘000
6,870
yen
‘000
6,875
yen
‘000
25,915yen
174,598

Enterprise tax payable
Business office tax payable
Allowance for bonuses
Allowance for bonuses to directors and corporate
auditors
Allowance for stock benefits
Depreciation and amortization
Loss on valuation of investment securities
Loss on valuation of stocks of subsidiaries andaffiliates
Asset retirement obligations
Net unrealized gains (losses) on available-for-salesecurities, net of taxes
Other

‘000
yen
(174,598) ‘000
Valuation allowance for net operating lossNetyencarryforwards for tax purposes
income(149,835) ‘000
Valuation allowance for total future deductible
Netyentemporary differences, etc.
incomeSubtotal of deferred tax assets

404,719

Total deferred tax assets

80,284

Deferred tax liabilities
Net unrealized gains (losses) on available-for-salesecurities, net of taxes
Other
Total deferred tax liabilities

‘000
yen

‘000
yen
‘000
1,263
yen

106,334

107,597 ‘000

-119-

yen
(27,312) ‘000
Net
yen
incomeNet deferred tax liabilities(2) Breakdown of causes for differences between the statutory tax rate and the effective tax
rate after the application of tax effect accounting
Statutory effective tax rate
30.6%
(Adjustment)
Entertainment expenses and other items not
0.0%
permanently deductible for income tax purposes
Dividends received and other items not permanently△59.0%
includable in income
Valuation allowance
5.3%
Other
△1.3%
Effective tax rate after application of tax effectaccounting△24.4%(3) Accounting for corporate and local income taxes or tax effect accounting related tothese taxes
The Company applies the Group Total System and accounts for corporate and local income
taxes or tax effect accounting related to these taxes and disclosures in accordance withthe "Treatment of Accounting and Disclosure when Applying the Group Total System" (Practical
Issues Task Force No. 42, August 12, 2021).

-120-

7. Notes on Transactions with Related Parties(1) Subsidiaries(Unit: thousand yen)Company name

Avant Corporation

Percentage
of voting Relationshiprights, etc. with related
held by thepartiesCompany (%)

100%
directly

Transaction details

Management
Management services
guidance andoutsourced (Note 1)
outsourced
Outsourced accounting
administrati
services (Note 1)
on FundLoan of funds (Note 2)
management
Guarantee of
Recovery of funds (Note 2)
debt
Concurrently
Interest income received
serving as(Note 2)
director

Amount oftransaction

388,651
11,848390,000
490,000
711

Items

Accounts
receivableprepaid
expensesaccounts
receivable(cash)
advanceLong-term
accounts
receivable

Arrears

Balance at endof year36,441
489
6,331
9,144
2,501

20,962

Outsourced
accounting
servicesManagement services
outsourced (Note 1)

Internet
Disclosure, Inc.

ZEAL CORPORATION

100%
directly100%
directly

Management
guidance
Fundmanagement
Concurrently
serving as
directors

Management
guidance andoutsourced
administrati
ve services
Loan of fundmanagement
funds
Concurrent
directors

Interest payments (Note 2)

Management services
outsourced (Note 1)

2,000
4

338,953

Accounts
receivable
Prepaid
expenses
Accounts
receivable(Cash)
advanceLong-term
Accounts
receivable
Affiliatedcompany
Deposit(received)
Accounts
receivable
Accounts
receivable(Cash)
advanceLong-term
accounts
receivable

Arrears

Corporation
DIVA

100%
directly

Outsourcing
ofmanagement
guidance andoutsourced
accounting
servicesManagement services
outsourced (Note 1)
Outsourced accounting
services (Note 1)

Concurrent
directors

320,113
126,146

Accounts
receivable
Accounts
receivable(Cash)
advanceLong-term
accounts
receivable
Arrears

-121-

550
539
1,044
64
1,200

200,000

31,550
3,383
8,922
3,336

2

29,9694,076
18,7292,802
12,654

Transaction amounts do not include consumption taxes, and year-end balances include
consumption taxes.
Terms and conditions of transactions and policy for determining terms and conditions oftransactions, etc.
（Transaction terms and conditions for outsourced administrative and accounting services are
determined appropriately, taking into consideration incurred costs and other factors.
2. Interest rates for loans in the loan of funds and deposits in the group fund management
are determined rationally, taking market interest rates into consideration.
(2) Directors and principal individual shareholders, etc.
Not applicable.

-122-8. Notes on Revenue Recognition
Notes have been omitted as the same information to understand revenue is presented in"Notes on Non-Consolidated Financial Statements, 1. Significant Accounting Policies, (5)Basis for Recognition of Revenue and Expenses.
Notes on Per Share Information(1) Net assets per share

200.11 yen(2) Net income per share
28.73 yen
(Note) Company shares managed by the Stock Delivery Trust for Employees and Executive Officers,which are recorded as treasury stock in shareholders' equity, are included in treasury
stock deducted from the average number of shares outstanding during the fiscal year forthe calculation of net income per share and in treasury stock deducted from the total
number of shares outstanding at the end of the fiscal year for the calculation of net
assets per share. Treasury stock is included in the number of shares deducted from total
shares issued at the end of the period for the calculation of net assets per share.
The number of such treasury shares at the end of the period deducted for the calculationof net assets per share is 652,300 shares for the current fiscal year, and the average
number of such treasury stock during the period deducted for the calculation of net income
per share is 405,844 shares for the current fiscal year.
Notes on Significant Subsequent Events
At the Board of Directors meeting held on April 26, 2024, the Company resolved toestablish DivaCygnet Private Limited, a joint venture with Cygnet Infotech Private
Limited (https://www.cygnet.one). Based on this resolution, the Company entered into a
joint venture agreement on April 30, 2024 and established the joint venture on August 5,
2024.
For details, please refer to "10. Notes on Significant Subsequent Events" in the Notes
to Consolidated Financial Statements.
11. Other notes
Figures are rounded down to the nearest unit.

-123-

Audit Report on the Consolidated Financial Statements
Independent Auditor's ReportAugust 23, 2024

Avant Group Inc.
To: Board of Directors
Deloitte Touche Tohmatsu
LLC
Tokyo Office
Designated andCertifiedEngagement
publicPartner
accountant

Takaya Goukon

Designated andCertifiedEngagement
publicPartner
accountant

Kenji Ohyama<Audit of Consolidated Financial Statements>
Audit Opinion
We have audited the consolidated financial statements, comprising the consolidated balance
sheet, the consolidated statement of income, the consolidated statement of changes in net
assets, and the notes to consolidated financial statements of Avant Group Inc. for the fiscal
year from July 1, 2023 to June 30, 2024, in accordance with Article 444-4 of the Companies
Act.
In our opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the financial position and results of operations of the Avant
Group Inc. and its consolidated subsidiaries for the period, for which the consolidated
financial statements were prepared, in conformity with accounting principles generally
accepted in Japan.
Basis for Audit Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan.
Our responsibility is to express an opinion on the consolidated financial statements basedon our audit. We are independent of the Company and its consolidated subsidiaries and fulfill
our other ethical responsibilities as auditors in accordance with the rules of professional
ethics in Japan. We believe that we have obtained sufficient and appropriate audit evidence
to provide a basis for our opinion.
Other Descriptions
The other statements are the business report and its supporting schedules. Management is
responsible for preparing and disclosing other statements. In addition, the Audit Committee
is responsible for monitoring the directors' performance of their duties in the development
and operation of the reporting process for other statements.
Our audit opinion on the consolidated financial statements does not include any otherdescription, and we express no opinion on any other description.
Our responsibility in the audit of the consolidated financial statements is to read theother information carefully and, in the course of that reading, to consider whether there
are material differences between the other information and the consolidated financial
statements or knowledge we have acquired in the course of our audit, and to pay attention-124-

to whether there are any indication of material errors in the other information other thansuch material differences. In addition to such material differences, we also pay attention
to whether there are any other indications of material errors in the other statements.
If, based on the work we have performed, we determine that there are material errors in
the other entries, we are required to report those facts.
We have no other matters to report.
Management and Audit Committee Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated
financial statements in accordance with accounting principles generally accepted in Japan.
This includes the development and operation of internal control determined by management tobe necessary to enable the preparation and fair presentation of the consolidated financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for
evaluating whether it is appropriate to present the consolidated financial statements on agoing concern basis and for disclosing any matters related to going concern that are required
to be disclosed in accordance with accounting principles generally accepted in Japan. The
Company is responsible for the disclosure of such matters.
The responsibility of the Audit Committee is to monitor the directors' performance of
their duties in the development and operation of the financial reporting process.
Auditor's Responsibility for the Audit of the Consolidated Financial Statements
The auditor is responsible for obtaining reasonable assurance about whether the
consolidated financial statements as a whole are free of material misstatements, whether due
to fraud or error, based on the audit performed by the auditor, and for expressing an opinion
on the consolidated financial statements from an independent standpoint in the auditor'sreport. A misstatement is considered to be material if it could have been caused by fraud
or error and, individually or in the aggregate, could reasonably be expected to affect thedecisions of users of the consolidated financial statements.
The auditor shall exercise professional judgment throughout the audit process in accordancewith auditing standards generally accepted as fair and appropriate in Japan, and shallmaintain professional skepticism and identify and assess the risk of material misstatement
due to fraud or error. In addition, audit procedures shall be designed and implemented toaddress the risks of material misstatement. The selection and application of audit procedures
are at the auditor's discretion. In addition, we obtain sufficient and appropriate audit
evidence on which to base our opinion.
The purpose of an audit of the consolidated financial statements is not to express an
opinion on the effectiveness of the entity's internal controls; however, in making thoserisk assessments, the auditor considers internal controls relevant to the audit in orderto design audit procedures that are appropriate in the circumstances.
Evaluate the appropriateness of the accounting policies and methods of application thereof
adopted by management and the reasonableness of the accounting estimates made bymanagement and the appropriateness of the related notes.
Conclusion as to whether it is appropriate for management to prepare the consolidated
financial statements on a going concern basis and, based on the audit evidence obtained,
whether there are material uncertainties regarding events or conditions that might castsignificant doubt on the entity's ability to continue as a going concern. If a material
uncertainty regarding the entity's ability to continue as a going concern exists, theauditor is required to draw attention in the auditor's report to the notes to theconsolidated financial statements or, if the notes to the consolidated financial
statements are not appropriate with respect to the material uncertainty, to express an
opinion with qualifications on the consolidated financial statements. The auditor's
conclusion is based on audit evidence obtained up to the date of the auditor's report;
however, future events or circumstances may cause the entity to cease to exist as agoing concern.
The consolidated financial statements are presented in conformity with accounting-125-

principles generally accepted in Japan and the related notes are included in the
consolidated financial statements. (2) Assess whether the consolidated financial
statements present fairly the underlying transactions and accounting events, including
the related notes.
Obtain sufficient appropriate audit evidence regarding the financial information of theCompany and its consolidated subsidiaries to enable us to express our opinion on the
consolidated financial statements. The auditor is responsible for directing, supervisingand performing the audit of the consolidated financial statements. The auditor is solely
responsible for its audit opinion.
The auditor shall report to the Audit Committee on the scope and timing of the planned
audit, significant audit findings, including material deficiencies in internal control,
identified during the course of the audit, and other matters required by the audit standards.
The auditor shall report to the Audit Committee that the auditor has complied with therules on professional ethics in Japan regarding independence and matters that may reasonably
be considered to affect the auditor's independence, and if any measures have been taken to
remove disincentive or to reduce the disincentive to an acceptable level If safeguards havebeen applied, report on the details of such safeguards.
Stake
We have no interest in or relationship with the Company or its consolidated subsidiaries
which is required to be disclosed pursuant to the provisions of the Certified Public
Accountants Act.
and above-126-

Audit Report on Financial Statements
Independent Auditor's ReportAugust 23, 2024

Avant Group Inc.
To: Board of Directors
Deloitte Touche Tohmatsu
LLC
Tokyo Office
Designated andCertifiedEngagement
publicPartner
accountant

Takaya Goukon

Designated andCertifiedEngagement
publicPartner
accountant

Kenji Oyama<Audit of Financial Statements>
Audit Opinion
Pursuant to Article 436, Paragraph 2, Item 1 of the Companies Act, we have audited thefinancial statements, namely, the balance sheet, the statement of income, the statement ofchanges in net assets, the notes to the financial statements, and the related supplementaryschedules (the "financial statements, etc.") of Avant Group, Inc. for its 28th fiscal year
from July 1, 2023 to June 30, 2024.
In our opinion, the financial statements referred to above present fairly, in all material
respects, the financial position and results of operations of the Company for the period,
for which the financial statements were prepared, in conformity with accounting principles
generally accepted in Japan.
Basis for Audit Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan.
Our responsibility is to express an opinion on the financial statements based on our audit.
We are independent of the company and fulfill our other ethical responsibilities as auditorsin accordance with the rules of professional ethics in our country. We believe that we haveobtained sufficient and appropriate audit evidence to provide a basis for our opinion.
Other Descriptions
The other statements are the business report and its supporting schedules. Management is
responsible for preparing and disclosing other statements. In addition, the Audit Committee
is responsible for monitoring the directors' performance of their duties in the development
and operation of the reporting process for other statements.
Our audit opinion on the financial statements does not cover other matters and we express
no opinion on them.
Our responsibility in the audit of the financial statements is to read the other information
carefully and, in the course of reading the other information, to consider whether there arematerial differences between the other information and the financial statements or our
knowledge obtained in the audit, and to pay attention to whether there are any indicationof material errors in the other information other than such material differences. In addition
to such material differences, we also pay attention to whether there are any other indicationsof material misstatement.
If, based on the work we have performed, we determine that there are material errors in
the other entries, we are required to report those facts.
We have no other matters to report.

-127-

Responsibility of Management and Audit Committee for Financial Statements
Management is responsible for the preparation and fair presentation of the financial
statements in conformity with accounting principles generally accepted in Japan. This
includes the establishment and operation of internal controls deemed necessary by management
for the preparation and fair presentation of financial statements and other financial
information that are free from material misstatement due to fraud or error.
In preparing the financial statements, management is responsible for evaluating whether
it is appropriate to prepare the financial statements based on the going concern assumption
and for disclosing matters related to a going concern if such disclosure is required underaccounting principles generally accepted in Japan.
The responsibility of the Audit Committee is to monitor the directors' performance of
their duties in the development and operation of the financial reporting process.
Auditor's Responsibility for the Audit of Financial Statements
The auditor is responsible for obtaining reasonable assurance about whether the financial
statements as a whole are free of material misstatements, whether due to fraud or error,
based on the audit performed by the auditor, and for expressing an opinion on the financial
statements from an independent perspective in the auditor's report. A misstatement is
considered to be material if it could have been caused by fraud or error and, individuallyor in the aggregate, could reasonably be expected to affect the decisions of users of thefinancial statements.
The auditor shall exercise professional judgment throughout the audit process in accordancewith auditing standards generally accepted as fair and appropriate in Japan, and shallmaintain professional skepticism and identify and assess the risk of material misstatement
due to fraud or error. In addition, audit procedures shall be designed and implemented toaddress the risks of material misstatement. The selection and application of audit procedures
are at the auditor's discretion. In addition, we obtain sufficient and appropriate audit
evidence on which to base our opinion.
The purpose of an audit of financial statements is not to express an opinion on theeffectiveness of internal control; however, in making those risk assessments, the auditor
considers internal control relevant to the audit in order to design audit proceduresthat are appropriate in the circumstances.
Evaluate the appropriateness of the accounting policies and methods of application thereof
adopted by management and the reasonableness of the accounting estimates made bymanagement and the appropriateness of the related notes.
The auditor concludes whether it is appropriate for management to prepare the financial
statements on a going concern basis and, based on the audit evidence obtained, whether
there are material uncertainties regarding events or conditions that might castsignificant doubt on the entity's ability to continue as a going concern. If a material
uncertainty regarding the entity's ability to continue as a going concern is recognized,
the auditor is required to draw attention in the auditor's report to the notes to thefinancial statements or, if the notes to the financial statements are not appropriate
with respect to the material uncertainty, to express an opinion with qualifications on
the financial statements or the financial statements. The auditor's conclusion is basedon audit evidence obtained up to the date of the auditor's report; however, future eventsor circumstances may cause the entity to cease to exist as a going concern.
The Board of Corporate Auditors shall evaluate whether the presentation and notes to thefinancial statements conform to accounting principles generally accepted in Japan, andwhether the financial statements, including the related notes, present fairly theunderlying transactions and accounting events, as well as the financial statement
presentation, composition and details.
The auditor shall report to the Audit Committee on the scope and timing of the planned
audit, significant audit findings, including material deficiencies in internal control,
identified during the course of the audit, and other matters required by the audit standards.
The auditor shall report to the Audit Committee that the auditor has complied with therules on professional ethics in Japan regarding independence and matters that may reasonably-128-be considered to affect the auditor's independence, and if any measures have been taken to
remove disincentive or to reduce the disincentive to an acceptable level If safeguards havebeen applied, report on the details of such safeguards.
Stake
We have no interest in or relationship with the Company which is required to be disclosed
pursuant to the provisions of the Certified Public Accountants Act.
and above-129-

Audit Report of the Audit Committee
Audit Report
The Audit Committee has audited the directors' performance of their duties during the 28th
fiscal year from July 1, 2023 to June 30, 2024. The methods and results are reported asfollows.
Method and details of audit
The Audit Committee regularly received reports from directors, employees, and otherson the content of the Board of Directors' resolutions concerning the matters listed in
Article 399-13, Paragraph 1, Items 1(b) and 1(c) of the Companies Act and the statusof establishment and operation of the system (internal control system) establishedbased on such resolutions, and requested explanations as necessary, In addition toexpressing our opinions, we conducted our audit in the following manner(i) In accordance with the audit policy, allocation of duties, and other relevant mattersdetermined by the Audit Committee, and in cooperation with the internal control
division of the Company, attended important meetings, received reports fromdirectors, employees, and other relevant personnel regarding the performance of
their duties, requested explanations as necessary, reviewed important approval
documents, and examined the operations and assets at the head office and principal
places of business. The Board of Corporate Auditors also examined the business andfinancial conditions of the Company at its head office and principal places ofbusiness. With respect to subsidiaries, the Company communicated and exchanged
information with directors and auditors of subsidiaries and received business reports
from subsidiaries as necessary.
(ii) Monitored and verified whether the accounting auditors maintained their independence
and conducted appropriate audits, received reports from the accounting auditors on
the execution of their duties, and requested explanations as necessary. In addition,
we received notice from the accounting auditor that "systems to ensure that duties
are performed properly" (matters set forth in each item of Article 131 of the
Corporate Calculation Regulations) are maintained in accordance with the "Quality
Control Standards for Audits" (Business Accounting Council) and other relevant
standards, and sought explanations as necessary.
Based on the above methods, we have examined the business report and supporting
schedules, consolidated financial statements (consolidated balance sheet, consolidated
statement of income, consolidated statement of changes in net assets, and notes toconsolidated financial statements), and non-consolidated financial statements (balance
sheet, statement of income, statement of changes in net assets, and notes to nonconsolidated financial statements) and their supporting schedules for the relevant fiscal
year.
2. Audit Results(1) Results of audit of business reports, etc.
(i) In our opinion, the business report and supporting schedules fairly present thecondition of the Company in conformity with applicable laws and regulations and the
Articles of Incorporation of the Company.
(ii) We have found no misconduct or material fact of violation of laws and regulationsor the Articles of Incorporation in connection with the Directors' performance of
their duties.
(iii) In our opinion, the contents of the resolution of the Board of Directors regarding
the internal control system are fair and reasonable. In addition, we have found nomatters to be pointed out with respect to the descriptions in the business report
and the execution of duties by the directors with respect to such internal control
system.
(2) Results of audit of consolidated financial statements
In our opinion, the auditing methods and results of the accounting auditor, Deloitte-130-Touche Tohmatsu LLC, are appropriate.
(3) Results of audit of financial statements and supplementary schedules
In our opinion, the auditing methods and results of the accounting auditor, Deloitte
Touche Tohmatsu LLC, are appropriate.
August 23, 2024
Audit Committee, Avant Group Inc.
Full-time
Audit
Tsuyoshi Noshiro
Committee
MemberAudit
Committee
MemberChie Goto(Outside
Director)
Audit
Committee
MemberMakoto Nakano(Outside
Director)
and above-131-

Guide Map to the Venue of Ordinary General Meeting of Shareholders
Venue
1-3-2 Otemachi, Chiyoda-ku, Tokyo
Keidanren Kaikan 2F Keidanren Hall
Transportation
Subway: Otemachi Sta.
(Chiyoda Line, Marunouchi Line, Hanzomon Line, Tozai Line, or Toei-Mita Line)
Directly connected from C2b exit.

Parking: Shared parking lot available on B2 floor (300 yen/30 min)MITSUI & CO., LTD.

KDDI Otemachi
Bldg.

Chiyoda Line Otemachi Sta.

SMBC

Uchibori-doriAve.
Wadakura
Fountain Park

Moat

Hanzomon Line Otemachi Sta.

Subway Hanzomon Line

Otemachi Bldg.

Toei Mita Line Otemachi Sta.

PalaceHotelTokyo Sankei
Bldg.

NTT Communications Otemachi
Bldg.

Otemachi First
SquareOtemachiNomura Bldg.

Otemachi Tower

Tozai Line Otemachi Sta.

Japanese
Bankers
Association

Tokio Marine& Nichido Fire
Insurance-132-

Marunouchi
Eiraku Bldg.

ShinMarunou
chi Bldg.

Marunouchi
Center Bldg.
Marunouchi OAZO
Nippon Life
Insurance
Marunouchi Bldg.
Marunouchi North
Exit
Tokyo
StationTo Yurakuch

Otemon Tower
JX Bldg.

Moat

Otemachi Financial
City

Subway Marunouchi Line

Otemachi Center Bldg.

Toei Mita Line

Imperial
PalaceOtemachi Park Bldg.

Yomiuri Shimbun
Bldg.

Hibiya-dori Ave.

Subway Tozai Line

Otemachi One Tower

Marunouchi Line Otemachi Sta.

KEIDANREN KAIKAN

Nikkei JA
Bldg. Bldg.

Marunouchi Line Tokyo
Sta.

Tokyo Fire
Department

To Kanda

Meteorological Agency

To Takebashi

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promotion of 1.5
million kWh/year
through GreenPower Certificate.