This document has been translated from the Japanese original for reference purposes only. In the event ofany discrepancy between this translated document and the Japanese original, the original shall prevail. The
Company assumes no responsibility for this translation or for direct, indirect or any other forms of damages
arising from the translation.
(Securities Code: 4743)
June 3, 2024
(Date of commencement of electronic provision measures: May 29, 2024)

Tsunenori Sato
President and Representative Director
ITFOR Inc.
21 Ichibancho, Chiyoda-ku, Tokyo, JapanNOTICE OF
THE 65th ANNUAL GENERAL MEETING OF SHAREHOLDERS
Dear Shareholders:
We would like to express our appreciation for your continued support and patronage.
You are cordially notified that the 65th Annual General Meeting of Shareholders of ITFOR Inc. (the“Company”) will be held for the purposes as described below.
Additionally, when convening this general meeting of shareholders, the Company has taken measures forproviding information in electronic format (the “electronic provision measures”) and has posted matters subject
to the electronic provision measures on the following website.
The Company’s website: https://ir.itfor.co.jp/english/
In addition to the website shown above, the Company also has posted this information on the following website
on the Internet.
Tokyo Stock Exchange (TSE) website (Listed Company Search)https://www2.jpx.co.jp/tseHpFront/JJK020010Action.do?Show=Show
Please access the TSE website above, enter the Company’s name in the “Issue name (company name)” field or
our stock exchange code “4743” in the “Code” field, and click on “Search” to find search results. Then, clickon “Basic information” and “Documents for public inspection/PR information” in this order to view the
information.
Instead of the attendance, you can exercise your voting rights in writing or via the Internet.
Please review the attached Reference Documents for the General Meeting of Shareholders posted on page 3
through 9 and exercise your voting rights no later than 5:00 p.m. on Thursday, June 20, 2024, Japan time.

-1-1. Date and Time:
2. Place:

Friday, June 21, 2024 at 10:00 a.m. Japan time
Reception starts: 9:00 a.m. Japan time
12F, Ichibancho Tokyu Building
21 Ichibancho, Chiyoda-ku, Tokyo, Japan(Please refer to the venue guide map at the end of the Japanese version of thisdocument.)

3. Meeting Agenda:
Matters to be reported: The Business Report, Non-consolidated and Consolidated Financial Statements
for the Company’s 65th Fiscal Year (April 1, 2023 - March 31, 2024) and resultsof audits by the Accounting Auditor and the Audit & Supervisory Board of theConsolidated Financial Statements
Proposals to be resolved:
Election of 6 Directors (Excluding Directors and Audit & Supervisory Board
Proposal:
Members)
 On the day of the meeting, please submit the enclosed Voting Rights Exercise Form at the reception of the meetingvenue.
 For the method of exercising voting rights in writing or via the Internet, please refer to the following page.
 The documents sent to shareholders who have requested the delivery of written documents do not contain thefollowing matters in accordance with laws and regulations and Article 16 of the Articles of Incorporation of theCompany. Therefore, this document is part of the documents audited by the Audit & Supervisory Board when
preparing the Audit Report.
(1) In the Business Report, “Status of Shares,” “Stock Acquisition Rights, etc.,” “Status of Accounting Auditor,”“Outline of Resolution of Establishment of a System to Ensure the Appropriateness of Business Activities,”“Outline of the Operating Status of the System to Ensure the Appropriateness of Business Activities,” and“Matters concerning the Basic Policy on Control of the Company”(2) Consolidated Financial Statements(3) Non-consolidated Financial Statements(4) Audit Reports
 If any amendments are made to matters subject to the electronic provision measures, such amendments will be
posted on the respective websites where the matters are posted.

-2-

Reference Documents for the General Meeting of Shareholders
Proposal and References
Proposal:

Election of 6 Directors (Excluding Directors and Audit & Supervisory Board Members)

The terms of office of all five incumbent Directors (excluding Directors and Audit & Supervisory Board
Members) will expire at the close of this General Meeting of Shareholders. However, the Company will increase
the number of Directors (excluding Directors and Audit & Supervisory Board Members) by one to further
strengthen the management structure and proposes the election of such Directors.
Regarding this proposal, the voluntary Nomination and Remuneration Committee deliberated on theselection of candidates for Director, and election of Directors was determined by the Board of Directors basedon the results of such deliberations. The Company has received the opinion from the Audit & Supervisory Board
that all candidates for Director are qualified.
The candidates for Director are as follows:
No.

Name
(Date of birth)

Past experience, positions, responsibilities
and significant concurrent positions
March 1998
June 2008
October 2009
June 2011
April 2013
June 2016
May 2017
June 2017
April 2018

1

Tsunenori Sato
(December 14, 1964)

June 2018

Reappointment
April 2019
April 2021

Joined the Company
Executive Officer, Deputy General Manager of Solution
Systems Division
Executive Officer, General Manager of Solution Systems
Division
Director and Executive Officer, General Manager of Solution
Systems Division
Director and Executive Officer, General Manager of Financial
Systems Division I
Director and Managing Executive Officer, General Manager ofFinancial Systems Department
Director and Managing Executive Officer, General Manager ofFinancial Systems Division
Representative Managing Director and Executive Officer,
General Manager of Financial Systems Division
Representative Managing Director and Executive Officer,
General Manager of Corporate Strategy Department and
Financial Systems Division
Representative Senior Managing Director and Executive Officer,
General Manager of Corporate Strategy Department and
Financial Systems Division
President and Representative Director, General Manager ofCorporate Strategy Department
President and Representative Director (to present)

Number ofshares of theCompany held

63,100(Significant concurrent positions)
Director, ICR Co., Ltd.
Director, CVC Co., Ltd.
Director, Syddy Inc.
[Reason for nomination as candidate for Director]
Mr. Tsunenori Sato has made significant contributions to the development and sales of systems for financial institutions
such as regional banks in the systems business for financial institutions, which is a core business of the Company. Based onsuch abundant achievements and experience, he assumed office of President and Representative Director of the Company
in April 2019. In the expectation that he will make important management decisions and appropriately fulfill supervisory
functions in business execution, the Company has judged that he will contribute to achieve sustainable growth of theCompany and enhance corporate value over the medium to long term, and is an appropriate person to be renominated as
Director.

-3-

No.

Name
(Date of birth)

Past experience, positions, responsibilities,
and significant concurrent positions
April 1987
June 2008
October 2008
June 2013
June 2014

October 2015
August 2018

April 2019

June 20192

Koji Sakata(January 26, 1966)

April 2020

Reappointment

October 2020

April 2023

April 2024

Joined the Company
Executive Officer, General Manager of Software Systems
Division I
Executive Officer, General Manager of Software Development
Department
Director and Executive Officer, General Manager of TechnicalSupport Division
Director and Managing Executive Officer, General Manager ofTechnology Development Department and Technical Support
Division
Director and Managing Executive Officer, General Manager ofTechnology Development Department
Director and Managing Executive Officer, General Manager of
Public Systems Division and responsible for Technology
Development Department
Director and Representative Senior Managing Director, General
Manager of Public Systems Division and Software Systems
Division IV
Director and Representative Senior Managing Director, General
Manager of Public Systems Division and Software Systems
Division III
Director and Representative Senior Managing Director, General
Manager of Technology Development Department and Software
Systems Division II
Representative Senior Managing Director and Executive Officer,
General Manager of Technology Development Department andSoftware Systems Division II
Representative Senior Managing Director and Executive Officer,
General Manager of Technology Development Department andSoftware Systems Division I
Representative Senior Managing Director and Executive Officer,
General Manager of Technology Development Department (topresent)

Number ofshares of theCompany held

140,400(Significant concurrent positions)
Director, ICR Co., Ltd.
Director, EeB Corporation
Director, AISEL Corporation
Director, ALPHA & SHIN-YO Corporation[Reason for nomination as candidate for Director]
Mr. Koji Sakata has leveraged his abundant experience as a system engineer and has contributed to the improvement of thequality of the Company’s packaged software and increased customer satisfaction in the customer support business. He
assumed office of Representative Senior Managing Director and Executive Officer in October 2020, and has madecontributions to accelerating execution of business in the technical division and strengthening the management system andfunctions accompanying business expansion. The Company has judged that he will make use of his experience andknowledge in management, and is an appropriate person to be renominated as Director.

-4-

No.

Name
(Date of birth)

Past experience, positions, responsibilities,
and significant concurrent positions
April 1981
June 2004
April 2005
June 2006
June 2007
October 2009
April 2015
June 2016
May 2017

3

Hirotaka Oeda
(July 23, 1957)

December 2018

Reappointment

April 2020
April 2021

Joined the Company
Executive Officer, General Manager of Osaka Office
Executive Officer, General Manager of Solution Systems
Division
Director and Executive Officer, General Manager of Solution
Systems Division
Director and Managing Executive Officer, General Manager of
Solution Systems Division
Director and Managing Executive Officer, General Manager ofCorporate Strategy Department
Director and Managing Executive Officer, General Manager ofFinancial Systems Division II
Director and Executive Officer, General Manager of Financial
Systems Division II of Financial Systems Department
Director and Executive Officer, General Manager of CTI &Infrastructure Systems Division
Director and Executive Officer, General Manager of CTI &Communications Systems Division
Director and Executive Officer, General Manager ofCommunications & Enterprise Systems Division
Director and Executive Officer, General Manager of Corporate
Strategy Department and Retail EC Systems Division (topresent)

Number ofshares of theCompany held

183,200(Significant concurrent position)
Director, CVC Co., Ltd.
[Reason for nomination as candidate for Director]
Mr. Hirotaka Oeda has made significant contributions to the development of systems for servicers and non-banks in thesystems business for financial institutions, which is a core business of the Company, as well as business expansion. He has
fulfilled his duties appropriately based on such achievements and his experience and insight cultivated through striving forthe supervision of the entire business as Director and Executive Officer, General Manager of Corporate Strategy
Department. The Company has continued to judge that he is an appropriate person to be renominated as Director withexpectation that he will drive further business expansion of the Group.

-5-

No.

Name
(Date of birth)

Past experience, positions, responsibilities,
and significant concurrent positions
October 1991
June 2003
June 2010

4

Katsuo Nakayama(May 9, 1965)

Number ofshares of theCompany held

Joined Showa Ota & Co. (currently Ernst & Young ShinNihon
LLC)
Outside Corporate Auditor, the Company
Director and Executive Officer, General Manager of
Administration Department (to present)(Significant concurrent positions)Representative Director, ICR Co., Ltd.
Corporate Auditor, CVC Co., Ltd.
Corporate Auditor, EeB Corporation
Director, Syddy Inc.

78,300

Reappointment[Reason for nomination as candidate for Director]
Mr. Katsuo Nakayama has leveraged his experience of serving as Outside Corporate Auditor of the Company as a certified
public accountant, and has supported the timely disclosure system and supervised Internal Auditing Division as General
Manager of Administration Department of the Company since June 2010. In addition to such achievements, taking into
consideration his experience and insight in promoting the expansion of the BPO business for local government and risk
management as a responsible person of the subsidiaries, the Company has judged that he is an appropriate person to berenominated as Director.

-6-

No.

Name
(Date of birth)

Past experience, positions, responsibilities,
and significant concurrent positions
April 1996
October 2010
June 2011
April 2014
April 2022

5

Kazunori Kono
(December 12, 1972)

April 2023

Joined the Company
General Manager of Network Solution Division
Executive Officer, General Manager of Network Solution
Division
Executive Officer, Deputy General Manager of Corporate
Strategy Department
Executive Officer, General Manager of Payment Business
Division
Executive Officer, General Manager of Payment Business
Division (to present)

Number ofshares of theCompany held

22,000(Significant concurrent position)
Director, Syddy Inc.
[Reason for nomination as candidate for Director]
Since joining the Company, Mr. Kazunori Kono has accumulated a wealth of knowledge mainly in the Network Solution
Division and has served as Deputy General Manager of the Corporate Strategy Department and General Manager of the
Payment Business Division. He has a wide range of experience in business, technology, and sales. Based on hisachievements and experience, the Company has judged that he is an appropriate person as a candidate for Director.

New Candidate

-7-

No.

Name
(Date of birth)

Past experience, positions, responsibilities,
and significant concurrent positions
March 2004
April 2013
April 2014
June 2014
December 2019
June 2021
April 2022

6

Waka Abe(June 15, 1972)

Reappointment
Outside Director

Joined SK-Electronics Co., Ltd.
Deputy General Manager, Corporate Strategy Office
Joined SHASHIN KAGAKU Co., Ltd.
Director, SHASHIN KAGAKU Co., Ltd.
Director, in charge of Business Development Office, SKElectronics Co., Ltd.
Outside Director, the Company (to present)
Director, in charge of New Business Creation Division and
Solution Business Department, SK-Electronics Co., Ltd. (topresent)

Number ofshares of theCompany held

2,000

(Significant concurrent position)
Director, SK-Electronics Co., Ltd.

[Reason for nomination as candidate for Outside Director and outline of expected roles]
Ms. Waka Abe has experience and insight in launching new businesses overseas and serving as Director of a businesscorporation. Accordingly, the Company expects that she will contribute to strengthening a function of supervising theCompany’s management by, for example, making strict and fair judgement about appropriateness of decision-making by
the Board of Directors. The Company has therefore judged that she is an appropriate person to be renominated as Outside
Director.
(Notes)1. No special interest exists between the Company and each candidate.
2. The Audit & Supervisory Board of the Company has judged that it is appropriate to nominate candidates for Director
based on their knowledge, experience, capacity, contribution to improving business performance, etc.
3. Election of candidates for Director was determined by the Board of Directors based on the results of deliberations by
the voluntary Nomination and Remuneration Committee.
4. Ms. Waka Abe is a candidate for Outside Director and she will have served as such for three years at the close of theGeneral Meeting of Shareholders.
5. The Company has registered Ms. Waka Abe as independent director with the Tokyo Stock Exchange, Inc.
6. In accordance with Article 427, Paragraph 1 of the Companies Act, the Company stipulates that it may enter into aliability limitation agreement to limit liability for damages to the amount stipulated by laws and regulations as provided
in Article 423, Paragraph 1 of the same Act, and has entered into such liability limitation agreement with all NonExecutive Directors of the Company. The amount of liability under the agreement will be up to the minimum liability
amount stipulated in Article 425, Paragraph 1 of the same Act. If Ms. Waka Abe is appointed, the Company plans tosustain such liability limitation agreement.
7. The Company has entered into a directors and officers liability insurance contract, of which premiums are fully borneby the Company, with an insurance company. The insurance contract insures all Directors of the Company, and covers
damages such as compensation for damages and litigation expenses that may result from acts committed by the insured
in his or her capacity as such. The current contract will expire in August 2024, and the Company plans to renew suchcontract with the same contents.

-8-

<Reference>
The following table shows the structure and skills matrix of the Board of Directors in the Proposal when thecandidates are approved as originally proposed.

Up to five areas of focus or expertise are listed as those particularly expected of Directors.
The list does not represent all of the knowledge and experience possessed by each director.

-9-

(Appendix)

Business Report(April 1, 2023 - March 31, 2024)
1. Overview of the Corporate Group(1) Business Progress and Results
The Japanese economy during the current consolidated fiscal year (April 1, 2023 - March 31,2024) saw a gradual recovery evidenced by moderate year-on-year GDP growth, with COVID-19
reclassified to a Class 5 infectious disease under the Infectious Diseases Control Law and socioeconomic activities returning to normalcy in the wake of the pandemic. On the other hand, theoutlook remains uncertain due to fluctuations in exchange rates and resource and energy prices, andconcerns about a slowdown in private consumption stemming from inflation.
In these circumstances, the Company Group established the Medium-Term Management Plan for
FY2021 through FY2023 and has promoted business activities, aiming at realizing sustainablegrowth with the “ability to be close to customers,” leveraging the three pillars of reinforcing themanagement base, enhancing profitability and advancing ESG management.
In the domestic IT service industry that surrounds the Company Group, the need for digitalizationthat realizes “non-contact” and “non-face-to-face” has been on the rise, and the willingness ofcompanies to invest is continuously high, mainly in DX (digital transformation) that transforms
business processes and business models by utilizing technologies including AI and blockchain.
For our operating activities, mainly from financial institutions, orders were stably received for
our flagship non-performing loan management system, and in addition, sales and functional additionof the combination of the personal loan operation support system “SCOPE” and the web reception
system of loan application “WELCOME” that realizes non-face-to-face operations have remainedsolid on the back of high competitiveness in the market. These systems contribute to shortening theamount of time taken on screening operations, while reducing the number of application sheets anddigitalizing contract documents as part of our efforts for the environment. Also, sales of “Robotic
Call” that automates operations for demand of non-performing loans performed well, winning morecustomers. In addition, orders for business process outsourcing (BPO) services for the public sector
were strong. Accordingly, orders received were ¥21,952 million (118.2% on a year-on-year basis)and backlog orders were ¥16,599 million (108.5% on a year-on-year basis), both of whichsignificantly increased year-on-year. We achieved an increase in sales due to increased sales tofinancial institutions, as well as increased sales of communications systems used in societal
infrastructure and payment terminals.
In terms of the financial results, we succeeded in reducing cost of sales including outsourcing
processing fees through promotion of in-house development as an initiative for improving grossmargins. Selling, general and administrative expenses increased to ¥4,015 million (114.2% on a
year-on-year basis) as a result of focusing on human resources investments such as increases inpersonnel expenses along with a wage revision in April 2023 and increases in hiring and training
expenses. Meanwhile, we have made corporate efforts to absorb the increase in expenses bystrengthening of our business activities aimed at increasing orders and sales.
Under such business conditions, for the business results in the current consolidated fiscal year,
sales were ¥20,652 million (112.7% on a year-on-year basis), operating income was ¥3,737 million(116.2% on a year-on-year basis), ordinary income was ¥3,846 million (117.3% on a year-on-yearbasis), and net income attributable to owners of the parent was ¥2,770 million (120.9% on a yearon-year basis). Accordingly, both revenues and profit increased for the seventh consecutive year.
Financial results by reporting segment are as follows:(System Development and Sales)
Sales have been solid through our core businesses of software development for financial
institutions, particularly for the personal loan operation support system, and expansion of newtransactions, such as for the renewal of infrastructure equipment. In addition, sales of multi-payment
terminals “iRITSpay Payment Terminal” also remained strong. Furthermore, sales ofcommunications systems for use in societal infrastructure also increased. As a result, orders received
were ¥11,927 million (106.8% on a year-on-year basis), sales were ¥12,117 million (114.2% on a
year-on-year basis), and segment income was ¥1,994 million (112.2% on a year-on-year basis).

- 10 -

(Recurring)In addition to maintenance services that are a stable source of revenue, BPO services for the
public sector, mainly for ordinance-designated cities and core cities, have continued to be strong
with sales from new customers recorded as well as additional orders from existing contract
customers. As a result, orders received were ¥10,024 million (135.5% on a year-on-year basis), sales
were ¥8,534 million (110.7% on a year-on-year basis), and segment income was ¥1,743 million(121.1% on a year-on-year basis).
[Sales Breakdown]
The sales composition by segment is as follows:
Segment

AmountComposition ratio

System Development and Sales¥12,117 million

58.7%

Recurring¥8,534 million

41.3%¥20,652 million

100.0%

Total(Note) Sales by segment represent sales to external customers.
<Social Contribution Activities>
The Company donates to the Japan Association for the World Food Programme and the Japan
Committee for UNICEF to fulfill its corporate social responsibility.
In midst of addressing actively the important topics (materiality), “Contributing to society
through regional revitalization,” the Company supported “Tour de Kyushu 2023,” a cycling roadrace held in the Kyushu region to help activities for SDG achievement there. Also, the Company
made a donation under a hometown tax donation system of a corporate version to Aomori andKumamoto Prefectures, which advocate “Town, People, Job Creation Comprehensive Strategy,” andto Ishikawa Prefecture for “projects for supporting recovery, and reconstruction for victims of the2024 Noto Peninsula Earthquake.”
In addition, the Company is also promoting efforts to support IT human resources who are
expected to play an active role in the future through sponsorship of work experience programs forjunior high school students in Chiyoda Ward and the National Programming Competition for
Elementary School Students.
(2)

Status of Capital Investments
Total capital investments for the current consolidated fiscal year were ¥489 million. Major capital
investments were as follows:
Purchase of facilities attached to buildings
Purchase of machinery and equipment
Purchase of tools, furniture and fixtures
Purchase of software for internal use¥60 million¥17 million¥168 million¥130 million(3)

Status of Fund Procurement
The funds required for capital investments for the current consolidated fiscal year were covered
entirely by internal funds.
In addition, the Company has entered into a commitment line agreement (specified commitmentline agreement) for a total of ¥1.5 billion with a main bank to procure funds efficiently. However,there were no outstanding borrowings based on this agreement at the end of the current consolidated
fiscal year.

(4)

Status of Business Transfers, Absorption-type Splits, Incorporation-type Splits, and BusinessTransfers from Other Companies
No material items to report.

(5)

Status of Acquisition or Disposal of Shares or Other Equity of Other Companies or Stock
Acquisition Rights- 11 -

No material items to report.
(6)

Status of Succession of Rights and Obligations Related to Another Company’s Business Due to an
Absorption-type Merger or Absorption-type Split
Not applicable.

(7)

Issues to Be Addressed
The Company Group has established a long-term vision for the next 10 years, “HIGH FIVE 2033,”
to promote initiatives for sustainable growth. We will implement these initiatives based on thereinforcement of the management base, enhancement of profitability, and advancement of the ESG
management established in the 3rd Medium-Term Management Plan. As a corporate group engaged
in the creation of businesses that return to the local community, we will leverage our current
business base, expand into new areas, and realize businesses that circulate the economy within thecommunity, thereby realizing the Company Group’s vision of contributing to the creation of affluent
time for people.
Under the FY2033 vision, “HIGH FIVE 2033,” we will promote corporate activities based on thefollowing three basic policies.
[Dramatic business growth]
The Company Group aims to achieve sales of ¥70.0 billion and an operating income of ¥12.6
billion and expand corporate value in the capital market.
[Empowerment of human resources]
The Company Group aims to foster a culture in which diverse human resources can play an activerole and contribute to creating more affluent time for employees.
[Expansion of social influence]
The Company Group aims to solve social issues and improve its value as a corporate group.
To realize the FY2033 vision, “HIGH FIVE 2033,” the Company Group has launched the 4th
Medium-Term Management Plan, “FLY ON 2026,” covering the three years from FY2024 toFY2026. Under the theme of strongly developing existing businesses and achieving dramatic growththrough new businesses, we will focus on the following three strategies.
1) Business strategy
Based on the theme of “deep, big, and new businesses,” the Company Group will expand its
business portfolio and aim for sales of ¥28.0 billion, an operating income of ¥4.8 billion, and ROE
and ROIC of not less than 15%. We will also aim to achieve sales of ¥2.8 billion in new businesses
in FY2026.
2) Human resource strategy
The Company Group will focus on securing and developing human resources, respect theirdiversity, and make effort to enhance the growth and satisfaction of employees.
Corporate value improvement strategy
The Company Group aims to improve its corporate value by communicating its growth story andengaging in dialogue with institutional investors, while working to increase its recognition andmaintain a high level of shareholder returns. In addition, active promotion of ROIC -based
management and shareholder returns is also an important element. Through this strategy, we aim toachieve sustainable corporate growth and maximize shareholder value.

3)

In this way, the Company Group will actively implement the strategies to flexibly respond tochanges in the business environment and realize sustainable growth while maintaining a long-term
perspective.

- 12 -

(8)T rends in Assets and Income
The 62nd
consolidated
fiscal year
ended March
31, 2021

Item

16,2892,317

Sales
Ordinary income
Net income attributable toowners of the parent
Earnings per share (yen)Total assets
Net assets
Net assets per share (yen)(In millions of yen, unless otherwise specified)
The 65th
The 63rd
The 64th
consolidated
consolidated
consolidated
fiscal year
fiscal year
fiscal year
ended March
ended March
ended March
31, 2024
31, 2022
31, 2023(Current year)
17,021
18,322
20,652
3,106
3,278
3,846

1,683

2,112

2,291

2,770

61.56
18,69014,101512.4876.84
20,01015,606565.0082.96
21,667
17,167618.80101.7723,996
18,836695.75(Note) The Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020 , hereinafterreferred to as the “Revenue Recognition Accounting Standard”), etc. has been applied since the beginning of
the 63rd consolidated fiscal year. The management indicators from the 63rd consolidated fiscal year and on
are those after applying the Revenue Recognition Accounting Standard, etc.

(9)Material Parent Company and Subsidiaries
1) Relationship with the parent company
Not applicable.
2) Material subsidiaries
Company name

Capital stock

Percentage ofvoting rights heldby the Company

ICR Co., Ltd.

¥100,000 thousand

100.0%CVC Co., Ltd.
EeB Corporation¥100,000 thousand¥14,500 thousand

100.0%
100.0%

Syddy Inc.

¥92,500 thousand

100.0%

Major lines of businesses
Commissioned by local
governments to provide
notices and assist in thecollection of insurance fees
for the national healthinsurance system, etc.
Visiting survey services
Development of software
Digital service business,payment agency business3) Progress and results of business combinations
There are four consolidated subsidiaries: ICR Co., Ltd., CVC Co., Ltd., EeB Corporation andSyddy Inc., and one affiliate accounted for using the equity method, AISEL Corporation.
The business results of the corporate group of the Company group for the current
consolidated fiscal year are as stated in “(1) Business Progress and Results.”- 13 -

(10) Principal Business Segments
The Company Group is composed of segments classified based on the business characteristics of
its products and services, and adopts the two businesses of “System Development and Sales” and“Recurring” as the reportable segments.
Business segment
Major products and services
Mainly engaging in sales of system equipment, and providing integrated
System Development andservices from design/development to introduction/installation of software andSalessystem infrastructure networks
Mainly providing software maintenance, hardware maintenance/operation,
Recurring
cloud, and BPO services(11) Principal Business Locations (as of March 31, 2024)
Head office
21 Ichibancho, Chiyoda-ku, Tokyo
Branch offices
Tokorozawa Office (Tokorozawa), West Japan Office (Osaka),
Chubu Office (Nagoya), Kyushu Office (Fukuoka),
Okinawa Sales Office (Naha)ICR Co., Ltd. (Aichi)
CVC Co., Ltd. (Fukuoka)
EeB Corporation (Ishikawa)
Syddy Inc. (Tokyo)
Service stations and others

Chubu Satellite Office(12) Employees (as of March 31, 2024)(The Group)
Number of Employees
Change from the end of the previous year
592 [1,006]
Increase of 24 [increase of 119]
(Note) The number of employees is the number of active employees, excluding the number of
temporary employees shown in brackets as an annual average. The number of temporary
employees includes part-time employees.
(The Company)
Number of
employees
494 [471]

Change from the end of theprevious year

Average age

Average years ofservice

Increase of 37 [increase of 29]

41.2 years old

12.1 years(Note) The number of employees is the number of active employees, excluding the number of
temporary employees shown in brackets as an annual average. The number of temporary
employees represents that of part-time employees.
(13) Principal Lenders (as of March 31, 2024)
Not applicable.
(14) Policy on the Exercise of Authority When the Articles of Incorporation Stipulate that the Board of
Directors Shall Decide on the Distribution of Surplus, etc.
The Company recognizes that shareholder returns is one of the important management tasks. The
Company’s basic policy is to pay stable and continuous dividends annually with a target
consolidated payout ratio of 50%, while taking into account performance trends and financial
conditions. The Company expects the total return ratio of 70% or more.
The Board of Directors resolved at its meeting held on May 9, 2024, to pay a dividend of ¥40 per
share.
(15) Other Important Matters concerning the Current Status of the Corporate GroupNot applicable.

- 14 -

2. Status of Shares (as of March 31, 2024)(1) Total Number of Shares Authorized to be Issued

110,000,000 shares(2) Total Number of Shares Outstanding

28,611,900 shares(including 1,411,207 shares of treasury stock)
11,719 persons(3) Number of Shareholders(4) Major Shareholders

Number of shares
held (Shares)

Shareholding ratio(%)

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

4,232,000

15.56

Custody Bank of Japan, Ltd. (Trust account)

1,871,596

6.88

Custody Bank of Japan, Ltd. (Sumitomo Mitsui Trust Bank
Retrust Portion/BROTHER INDUSTRIES, LTD.
Retirement Benefit Trust Account)

1,420,000

5.22

ITFOR Employee Shareholding Association

985,100

3.62

KIA FUND 136

684,000

2.51

BNY GCM CLIENT ACCOUNT JPRD AC ISG (FE-AC)

589,033

2.17

Meiji Yasuda Life Insurance Company

551,400

2.03

Tomohiro Yoshida536,700

1.97

The Bank of Yokohama, Ltd.

500,000

1.84

Eishi Murakami

361,000

1.33

Shareholders’ name(Notes) 1. The shares held by Custody Bank of Japan, Ltd. (Sumitomo Mitsui Trust Bank Retrust
Portion/BROTHER INDUSTRIES, LTD. Retirement Benefit Trust Account) refer to theCompany’s shares that were held by BROTHER INDUSTRIES, LTD. and entrusted to
Sumitomo Mitsui Trust Bank, Limited, which were then re-trusted to Custody Bank of Japan,
Ltd., and related voting rights are retained by BROTHER INDUSTRIES, LTD.
2. The Company holds 1,411,207 shares of treasury stock, which is excluded from the above
list of major shareholders. Company shares of 123,796 shares held by Custody Bank of Japan,
Ltd. as trust property for the stock remuneration plan are not included in treasury stock.
3. The shareholding ratio is calculated upon excluding treasury stock.
(5) Other Important Matters concerning Shares
No material items to report.

- 15 -

3. Stock Acquisition Rights, etc.
Stock Acquisition Rights Issued to the Officers of the Company as Compensation for the Executionof Their Duties
Date of resolution at the Annual General
June 21, 2017
Meeting of Shareholders(1)

Date of resolution for issuance

September 13, 2017

Number of stock acquisition rights
Number of holders

60 units
4 Directors of the Company (excluding Directors andAudit & Supervisory Board Members)

Class of shares underlying the stock acquisitionrightsNumber of shares underlying the stockacquisition rights
Amount to be paid in for the stock acquisitionrightsAmount of assets to be contributed for the
exercise of stock acquisition rights
Exercise period of stock acquisition rights

Common stock
6,000 shares
No payment
642 yen per share
From September 16, 2019 to September 15, 2024

(2)

Stock Acquisition Rights Issued to Employees and Subsidiaries’ Officers and Employees as
Compensation for the Execution of Their Duties during the Current Fiscal Year
Not applicable.

(3)

Other Important Matters concerning Stock Acquisition Rights, etc.
Not applicable.

- 16 -

4. Company Officers(1)

Names and Other Relevant Information of Directors (as of March 31, 2024)
Position

Name

President andRepresentative
Director

Tsunenori Sato

Director, ICR Co., Ltd.
Director, CVC Co., Ltd.
Director, Syddy Inc.

Koji Sakata

General Manager of Technology Development
Department
General Manager of Software Systems Division I
Director, ICR Co., Ltd.
Director, EeB Corporation
Director, AISEL Corporation
Director, ALPHA & SHIN-YO Corporation

Representative Senior
Managing Directorand Executive Officer

Responsibilities and significant concurrent positions

Director and Executive
Hirotaka Oeda
Officer

General Manager of Corporate Strategy Department
General Manager of Retail EC Systems Division
Director, CVC Co., Ltd.

Director and Executive
Katsuo Nakayama
Officer

General Manager of Administration Department
Representative Director, ICR Co., Ltd.
Corporate Auditor, CVC Co., Ltd.
Corporate Auditor, EeB Corporation
Director, Syddy Inc.

Outside Director

Director, SK-Electronics Co., Ltd.

Waka Abe

Director (Director and
Audit & Supervisory
Masahito Motoyama
Board Member)

Corporate Auditor, ICR Co., Ltd.

Outside Director(Director and Audit &Supervisory Board
Member)Makoto Sato

Certified public accountant
Corporate Auditor, Syddy Inc.
Outside Director, HOSOYA PYRO-ENGINEERING
CO., LTD.

Outside Director(Director and Audit &Supervisory Board
Member)Daisuke Koizumi

Certified public accountant
Representative Director, Owner’s Brain Co., Ltd.

(Notes)

1. Outside Directors, Messrs. Makoto Sato and Daisuke Koizumi are qualified as certified public
accountants and have considerable knowledge in finance and accounting.
2. Syddy Inc., at which Outside Director Mr. Makoto Sato has a concurrent position, is a
consolidated subsidiary of the Company. There are no significant relationships between the
Company and the other companies at which Outside Directors, Ms. Waka Abe, and Messrs.
Makoto Sato and Daisuke Koizumi have concurrent positions.
3. The Company has registered Outside Directors, Ms. Waka Abe and Messrs. Makoto Sato andDaisuke Koizumi as independent directors with the Tokyo Stock Exchange.
4. To reinforce the audit and supervisory functions of the Audit & Supervisory Board, theCompany has elected Mr. Masahito Motoyama as a full-time Director and Audit &Supervisory Board Member to enable the gathering of information from Directors(excluding Directors and Audit & Supervisory Board Members) and the sharing of
information at important internal meetings, as well as full cooperation between theinternal audit department and the Audit & Supervisory Board.

- 17 -

(2)Outline of the Content of the Liability Limitation Agreement
Pursuant to Article 427, Paragraph 1 of the Companies Act, the Company and each Outside Director
have entered into an agreement to limit their liability for damages as provided in Article 423, Paragraph
1 of the same Act. The liability of the Company’s Outside Directors under Article 423, Paragraph 1 of theCompanies Act is limited to the minimum liability amount stipulated in Article 425, Paragraph 1 of thesame Act.

(3)

Outline of the Content of the Directors and Officers Liability Insurance Contract
The Company has entered into a directors and officers liability insurance contract as provided in Article
430-3, Paragraph 1 of the Companies Act with an insurance company. The scope of the insured under the
insurance contract is the Company’s Directors (including Directors and Audit & Supervisory Board
Members) and executive officers. The insurance covers liability in the event of a claim for damages
against the insured during the insurance period due to an act (including inaction) that the insured
conducted in the course of his/her duties as an officer of the Company. The premiums are fully borne by
the Company.

(4)

Remuneration, etc. of Directors for the Current Fiscal Year
1) Matters pertaining the policies for the amount of remuneration, etc. of Directors and its
calculation method
a. Basic policy
The aim of the remuneration of officers of the Company is to secure, retain, and motivate
outstanding talent in management in order to achieve sustainable growth and the medium- to longterm increase of corporate value of the Company and the Company Group. To that end, the basic
policy is to determine remuneration through a transparent and objective process that maintains anappropriate link with performance and functions as a sound incentive.
The Board of Directors determined that the individual amounts of remuneration, etc. of the
Directors of the Company for the current fiscal year comply with the basic policy due to thefollowing reasons. The Nomination and Remuneration Committee has also confirmed that thecontent is in line with the determination policy. Based on the recommendation from theCommittee to that extent, the individual amounts of remuneration, etc. were determined at theBoard of Directors meeting held on June 21, 2023.
b. Remuneration system
The remuneration of the officers of the Company consists of basic remuneration andperformance-linked remuneration, which are deliberated and determined by the Board of
Directors based on comparisons with peers or with other companies of comparable size, as wellas the Company’s financial situation and the individual’s degree of contribution. Given thatvariable remuneration such as performance-linked remuneration is not suitable for Outside
Directors and Directors and Audit & Supervisory Board Members, only the “basic remuneration”
is paid to them.

2) Matters concerning provisions regarding remuneration, etc. for Directors and provisions byresolutions of the General Meeting of Shareholders
The maximum amount of remuneration to officers of the Company has been resolved at the 56th
Annual General Meeting of Shareholders held on June 19, 2015, to be no more than ¥300 million peryear for Directors (excluding Directors and Audit & Supervisory Board Members) and no more than
¥35 million per year for Directors and Audit & Supervisory Board Members. As of the close of the56th Annual General Meeting of Shareholders, the number of Directors (excluding Directors andAudit & Supervisory Board Members) was eight, and the number of Directors and Audit &Supervisory Board Members was three (including two Outside Directors).
The introduction of the tax-qualified stock option as medium- to long-term incentive remuneration(non-monetary remuneration, etc.) was resolved at the 58th Annual General Meeting of Shareholders
held on June 21, 2017. As of the close of the 58th Annual General Meeting of Shareholders, thenumber of Directors (excluding Directors and Audit & Supervisory Board Members) was eight, andthe number of Directors and Audit & Supervisory Board Members was three (including two Outside
Directors).
The introduction of a share delivery trust (non-monetary remuneration, etc.) as performance-linked
remuneration for Directors (excluding Directors and Audit & Supervisory Board Members) was- 18 -

resolved at the 62nd Annual General Meeting of Shareholders held on June 18, 2021. As of the closeof the 62nd Annual General Meeting of Shareholders, the number of Directors (excluding Directors
and Audit & Supervisory Board Members) was five (including one Outside Director), and the number
of Directors and Audit & Supervisory Board Members was three (including two Outside Directors).
3) Matters concerning performance-linked remuneration, etc.
Performance-linked remuneration comprises monthly remuneration, which is incentive
remuneration that varies depending on short-term performance, tax-qualified stock options (nonmonetary remuneration, etc.), which are medium- to long-term incentive remuneration, and the sharedelivery trust (non-monetary remuneration, etc.) which is performance-linked. Monthly remuneration
is paid at an amount calculated according to the degree of achievement of the targets for net income
attributable to owners of the parent for each fiscal year.
i. Monthly remuneration as short-term incentive remuneration
From the standpoint of determining whether the Company Group’s growth is steadily
generating profit, the indicator used for performance-linked remuneration is net income
attributable to owners of the parent. In FY2023, the target amount was ¥ 2,370 million, andthe actual amount was ¥ 2,770 million.
Total amount of
performancelinked
remuneration

Net income
attributable toowners of theparent=8.0%(upperlimit)

××

Company-wide
performance
evaluation coefficient

However, if a net loss attributable to owners of the parent is reported, the amount will be¥0.
Calculation method of individual payment amounts
Total amount of＝ performance-linked
remuneration

×

Points per position

×

Points per position

×

Individual performance evaluation
coefficient*
Sum of individual performance
payment coefficients** Individual performance evaluation coefficient is determined within a range from 0% to150% depending on the results and the degree of contribution against each Director ’s
individual performance indicators. The results and degree of contribution against each
Director’s individual performance indicators are based on comprehensive evaluation by the
Nomination and Remuneration Committee.
Monthly remuneration = Individual payment amount / 12
Points by position
Position
ChairmanPresident
Vice President
Senior Managing Director
Managing Director
Director

Points
120
120
80
50
40
10

ii. Tax-qualified stock options as medium- to long-term incentive remuneration
The Company’s stock options were resolved at the 58th Annual General Meeting of
Shareholders held on June 21, 2017, and a given number of stock options are granted
according to individual positions.
After a waiting period of approximately two (2) years, up to 20% of the number of stock
options granted in a year may be exercised, and the exercise period is five (5) years.

- 19 -

iii. Composition ratios of remuneration
Basic
Position
remuneration

Performance-linked
Total
remuneration
Chairman58%
42%
President
58%
42%
Vice President
58-60%
40-42%
100%
Senior Managing Director
60-62%
38-40%
Managing Director
62-65%
35-38%
Director
68-72%
28-32%(Notes) 1. Basic remuneration is the median value for the position concerned, and the values
for performance-linked remuneration indicate percentages in models where theachievement rate is 100%.
2. The composition ratios of individual remuneration may differ even for persons inthe same position.
3. The percentages for Directors include the employee portion of salaries andbonuses.

iv. Persons authorized to determine the policy for determining the amount and calculation
method of officer remuneration
The President and Representative Director comprehensively considers the Director’s
positions, segregation of duties and degree of contribution to the performance of the Company,and drafts the remuneration amounts for individual Directors. The Board of Directors submits
the draft to the Nomination and Remuneration Committee, which is a voluntary advisory body.
The Board of Directors determines the remuneration amounts of individual Directors based ona recommendation from the committee. The voluntary Nomination and Remuneration
Committee is chaired by an Outside Director and comprises five Directors, three of which are
Outside Directors and two of which are Representative Directors.
v. Share delivery trust
The Company has established a stock-based remuneration plan based on the resolution of the
62nd Annual General Meeting of Shareholders held on June 18, 2021, to have its Directors share
the perspectives of shareholders and bear the risk of declines in stock prices as well as thebenefits of rising stock prices.
A trust established by the Company acquires the Company’s shares and delivers theCompany’s shares to the eligible Director. The trust shall grant points to the Director inaccordance with the Stock Grant Rules determined by the Board of Directors of the Company,
based on criteria such as position and the degree of achievement of performance targets on thedate of grant specified in the Stock Grant Rules during the trust period. The aggregated numberof points to be granted to the Director shall be limited to a total of 150,000 points for the three(3) fiscal years of the Applicable Period. At the point the Director resigns, the Company’s sharesshall be delivered to the Director in accordance with the number of granted points. The numberof the Company’s shares to be delivered are the number of points granted multiplied by one (1).
Furthermore, by a resolution of the Board of Directors of the Company, the Applicable Period
may be extended for a period of not less than three (3) fiscal years and not more than five (5)fiscal years, and the trust period of the Trust may be extended accordingly (including effectively
extending the trust period by transferring the trust assets of the Trust to a trust with the same
purpose as the Trust established by the Company) to effect the renewal of the Plan. In such
instances, the Company shall make an additional contribution to the Trust during the Applicable
Period of such extension, up to the amount calculated by multiplying the number of fiscal yearsof the extended Applicable Period by ¥33 million, as funds for the additional acquisition of theCompany’s shares necessary for the grant of the Company’s shares to Directors under the Plan,
and continue the granting of points and the grant of the Company’s shares.

- 20 -

Directors of the Company (excluding Directors
and Audit & Supervisory Board Members andOutside Directors)
From the fiscal year ended March 31, 2022 to
the fiscal year ended March 31, 2024(i)

Persons eligible for the Plan(ii)

Applicable Period(iii)

Maximum amount of cash to be contributed by theCompany as funds for the acquisition of theCompany’s shares necessary for the grant to theeligible persons in (i), during the Applicable
Period in (ii) (three (3) fiscal years)(iv)

Method of acquiring the Company’s shares(v)

Maximum total number of points to be granted tothe eligible persons in (i)(vi)

Criteria for granting points(vii)

Timing of granting of the Company’s shares to theeligible persons in (i)¥99 million in total
Disposal of treasury stock or acquisition fromthe stock exchange (including after-hourtrading)
150,000 points in total for the three (3) fiscal
years of the Applicable Period
Points will be granted in accordance with criteriasuch as position and the degree of achievementof performance targets
At the time of resignation, in principle

4) Total amounts of remuneration, etc. for Directors

Officer category

Total(Thousandyen)

Amount by type of remuneration, etc. (Thousand yen)Fixed
remuneration

Performancelinked
remuneration

Stock
optionRetirement
benefits

Number ofrecipients

Directors (excluding
Directors and Audit &Supervisory Board
200,994
83,400117,594
4
Members, and Outside
Directors)
Outside Directors(excluding Directors
and Audit &
4,800
4,800
1
Supervisory Board
Members)
Directors and Audit &Supervisory Board
15,15615,156
1
Members (excluding
Outside Directors)
Outside Directors(Directors and Audit &
9,840
9,840
2
Supervisory Board
Members)(Note) The total amount of remuneration by individual is omitted, as no Director received ¥100 million
or more.

- 21 -

(5)Outside Directors
Position

Name

Status of attendanceOutside Director

Waka Abe

21 out of 21 meetings of theBoard of Directors

Makoto Sato

21 out of 21 meetings of theBoard of Directors
17 out of 17 meetings of the
Audit & Supervisory Board

He mainly provides
comments from his
professional perspective as acertified public accountant.

Daisuke Koizumi

21 out of 21 meetings of theBoard of Directors
17 out of 17 meetings of the
Audit & Supervisory Board

He mainly provides
comments based on his
extensive experience as amanager and a certified
public accountant.

Outside Director(Director and
Audit &
Supervisory Board
Member)Outside Director(Director and
Audit &
Supervisory Board
Member)Statements madeShe mainly provides
comments based on her
extensive and advanced
experience as a corporate
manager.

5. Status of Accounting Auditor(1)

Name of the Accounting Auditor
Ernst & Young ShinNihon LLC(2) Accounting Auditor’s Remuneration, etc. for the Current Fiscal Year
Amount of remuneration, etc. for the Accounting Auditor (Note)¥37,500 thousand
Total amount of cash and other financial benefits payable by the¥37,500 thousand
Company and its subsidiaries(Notes) 1. The audit contract between the Company and the Accounting Auditor does notdistinguish remuneration amounts for the audit under the Companies Act and that under
the Financial Instruments and Exchange Act, and it is practically not possible todistinguish them. Accordingly, the remuneration represents the total amount of theseaudits.
2. The Audit & Supervisory Board of the Company consented to the amount of
remuneration, etc. for the Accounting Auditor, after fully examining the details
explained by the Accounting Auditor such as the number of days, allocation of personnel
and audit details, etc., in the audit plan for the current fiscal year, the verification andevaluation of the results of audits for the previous fiscal year, the appropriateness of theexecution of audits by the Accounting Auditor, and the grounds for calculated estimatesforming the basis for the remuneration.
(3)

Policy on Decisions of Dismissal or Non-Reappointment of the Accounting Auditor
The Audit & Supervisory Board of the Company shall, upon the consent of all the Audit & Supervisory
Board Members, dismiss the Accounting Auditor if it recognizes a circumstance that falls under any of
the items set forth in Article 340, Paragraph 1 of the Companies Act. In such a case, an Audit &Supervisory Board Member appointed by the Audit & Supervisory Board will report dismissal of the
Accounting Auditor and the reasons therefor at the first general meeting of shareholders convened after
such dismissal.
In addition, if the Audit & Supervisory Board of the Company determines that the Accounting Auditor
has difficulty in appropriately executing duties or otherwise finds that the Accounting Auditor needs tobe changed, the Audit & Supervisory Board shall decide the content of the proposal for the dismissal or
non-reappointment of the Accounting Auditor to be submitted to a general meeting of shareholders andrequest the Board of Directors to hold a general meeting of shareholders for that purpose.

- 22 -

6. Matters concerning the Basic Policy on Control of the Company(1) Details of the Basic Policy
The Company believes that the individuals who control the decision -making over the financial
and business policies of the Company should be those who ensure and improve the Company’s
corporate value, including the trust and technical capabilities that have been consistently
accumulated over the long term, and by extension the common interests of the shareholders overthe medium to long term.
Nevertheless, we believe that since the Company, as a public corporation, reasonably allows theunrestricted trading of the Company’s shares. Also, the Company believes that the final decision onwhether to accept sales of the Company’s shares with response to a large-scale acquisition proposal
by a specific person or group should be left to the will of the shareholders who owns the Company’s
shares. However, when the large-scale acquisition is judged to be detrimental to corporate value
and the common interests of the shareholders, the Company believes that it is imperative that theCompany’s corporate value over the medium to long term, and by extension the common interestof the shareholders, are ensured through the implementation of necessary and reasonable measures.
(2) Details of Efforts to Realize the Basic Policy
1) Revision of the Company’s corporate philosophy and establishment of its purpose
The Company started adopting its new corporate philosophy and purpose from the 49th foundation
anniversary of December 2, 2021, on the occasion of the 50th anniversary of its founding coming up in
December 2022. The corporate philosophy is “Generating excitement and smiles with ‘A Sprit To Be
Close’ to people,” while the purpose is “Through social contribution by regional revitalization, we willcontribute to the development of a sustainable future by providing surprises to all peoples and businesses.”
We promote our business activities, aiming at keeping its widely fruitful existence in society throughknow-hows for systems (IT) and businesses (BPO) which we have accumulated.
2) Execution of the Medium-Term Management Plan, “FLY ON 2026”
The 4th Medium-Term Management Plan, “FLY ON 2026,” covering the three years from FY2024 toFY2026, has been launched. Under the theme of strongly developing existing businesses and achieving
dramatic growth through new businesses, the Company Group will aim for sales of ¥28.0 billion, an
operating income of ¥4.8 billion, and ROE and ROIC of not less than 15%.
3) Strengthening of corporate governance
The Company recognizes that the basis of corporate governance is to create transparent and fairmanagement systems and promote efficient business execution based on prompt and decisive decisionmaking, while providing timely and appropriate information disclosure. By doing these, the Company
believes that meeting satisfaction of stakeholders and improving the corporate value of the Company
Group in an enduring manner are indispensable as keystones of our corporate management.
(3) Efforts to Prevent the Determination of Financial and Business Policies of the Company from Being
Controlled by an Inappropriate Person in Light of the Basic Policies
At the Company’s 47th Annual General Meeting of Shareholders held on June 23, 2006, the Company
introduced “Countermeasures to Large-Scale Purchase of the Company’s Shares (takeover defense
measures),” based on the above-mentioned policy. From then on, the Company continued with themeasures by revising them as necessary, but in accordance with the decision of the Company’s Board of
Directors meeting held on May 12, 2022, the takeover defense measures were discontinued and abolished
as of the end of the 63rd Annual General Meeting of Shareholders.
Even after abolition of the takeover defense measures, the Company will take appropriate measures
within the allowable range of the Financial Instruments and Exchange Act, the Companies Act, and otherrelated laws and regulations, to parties which seek to make a large-scale acquisition of the Company’s
shares, demanding necessary and sufficient provision of information for shareholders to make anappropriate decision on the advisability of the large-scale acquisition, disclosing the opinions, etc., of theBoard of Directors and securing time and information for shareholders’ review.
(4) The Decision of the Board of Directors of the Company on the Above Initiatives
The Board of Directors of the Company believes that these initiatives in (2) and (3) are those forsecuring and enhancing the Company’s corporate value and common interests of shareholders, and in linewith the basic policy in (1). Also, the purpose is not to maintain the position of Directors.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~- 23 -

Amounts in the business report are rounded down to the nearest presented unit.
Percentages, ratios etc., are rounded off to the nearest whole number.

- 24 -

Consolidated Balance Sheet(As of March 31, 2024)(Unit: thousand yen)
Description
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable andcontract assets
Securities

Amount19,498,389

Description
Liabilities
Current liabilities

4,356,350
4,539,168
9,599,513

Amount4,878,791

Accounts payable
Corporate income tax and other taxes
payableReserve for bonuses

1,187,216
748,346
640,650

Inventories

686,100

Contract liabilities

1,017,321

Other

317,256

Other

1,285,257

Fixed assets

4,497,973

Fixed liabilities

280,906

832,927

Net defined benefit liabilities

209,214

Buildings and structures
Machinery, equipment and delivery
equipment
Land

371,674

Reserve for stock benefit

67,414

16,891Long-term accrued amount

4,278

Construction in progress

25,156

Other269,640

Tangible fixed assets

Intangible fixed assets
Goodwill

149,565

430,950

Total liabilities

5,159,698

Net assets
Shareholders’ equity

17,882,902

7,437

Capital stock

1,124,669

423,513

Capital surplus

1,221,189

Investments and other assets

3,234,095

Retained earnings

16,798,657

Investment securities

2,479,046

Deferred tax assets

99,833

Other655,215

Other

Total assets

23,996,362

Treasury stock
Accumulated other comprehensive
incomeValuation difference on othersecurities
Deferred hedge profit or loss
Accumulated adjustment for
retirement benefits
Stock acquisition rights△1,261,612

Total net assets

18,836,664

Total liabilities and net assets

23,996,362(Note) Figures presented in the financial statements are rounded down to the nearest thousand yen.

- 25 -

947,139
952,1832△5,0466,622

Consolidated Profit and Loss Statement(From April 1, 2023 to March 31, 2024)(Unit: thousand yen)
Description

AmountSales

20,652,793

Cost of goods sold

12,899,218
7,753,575

Gross profit on sales
Selling, general and administrative expenses

4,015,893

Operating income

3,737,681

Non-operating income
Interest income

3,616

Dividend income

58,964

Investment profit by equity method

20,970Miscellaneous income

39,194

122,746

Non-operating expenses
Commissions paid

7,619

Retirement loss on fixed assets

2,699

Miscellaneous loss

3,618

Ordinary income

13,937
3,846,490

Extraordinary income
Profit on reversal of share acquisition rights

2,750

Net income before taxes
Corporate income tax, resident tax and business
tax
Adjustment of corporate income tax and othertaxes
Net income
Net income attributable to owners of the parent

2,750
3,849,240

1,114,790△36,203

1,078,587
2,770,652
2,770,652(Note) Figures presented in the financial statements are rounded down to the nearest thousand yen.

- 26 -

Consolidated Statement of
Changes in Shareholders’ Equity and Other Net Assets(From April 1, 2023 to March 31, 2024)(Unit: thousand yen)
Shareholders’ equity
Capital stock
Balance at the beginning of theperiodCapital surplus

1,124,669

1,367,439

Retained earnings

15,403,603

Treasury stock

Total shareholders’equity△1,179,155

16,716,556

Changes during the period
Dividends of surplus△835,313△835,313

Net income attributable toowners of the parent

2,770,652

2,770,652

Acquisition of treasury stock△900,027△900,027

Disposition of treasury stock△10,785

141,820

131,035

Cancellation of treasury stock△675,750

675,750-

Transfer from retained
earnings to capital surplus

540,285△540,285--△146,250

1,395,053△82,456

1,166,346

1,124,669

1,221,189

16,798,657△1,261,612

17,882,902

Changes in items other thanshareholders’ equity during
the period (net)Total changes during theperiodBalance at the end of the period

Accumulated other comprehensive income

Balance at the beginning of theperiodValuationdifference onother securities

428,436

Deferred hedge
profit or loss

Accumulated
adjustment for
retirement
benefits

Total
accumulated
othercomprehensive
income

1,158

△871

428,723

Stockacquisitionrights

22,390Total net
assets17,167,670

Changes during the period
Dividends of surplus△835,313

Net income attributable toowners of the parent

2,770,652

Acquisition of treasury stock△900,027

Disposition of treasury stock

131,035

Cancellation of treasury stock-

Transfer from retained earnings
to capital surplus-

Changes in items other thanshareholders’ equity during theperiod (net)523,747△1,156△4,175

518,415△15,767

502,647

Total changes during the period

523,747△1,156△4,175

518,415△15,767

1,668,994

Balance at the end of the period

952,1832△5,046

947,139

6,622

18,836,664(Note) Figures presented in the financial statements are rounded down to the nearest thousand yen.

- 27 -

Non-consolidated Balance Sheet(As of March 31, 2024)(Unit: thousand yen)
Description

AmountDescription

AssetsCurrent assets

AmountLiabilities
17,762,739

Current liabilities

4,536,181

Cash and deposits

3,176,408

Accounts payable

1,223,192

Notes receivable

74,095

Accrued amount

510,879

Accrued expenses
Corporate income tax and other taxes
payableAccrued consumption taxes

251,010

Accounts receivable

3,333,454

Contract assets

601,887

Investments in leases

110,522658,728
256,818

Securities

9,599,513

Contract liabilities

1,017,321

Merchandise

392,528

Deposits received

39,425Work in process

262,912Reserve for bonuses

578,431

Supplies

15,978Other

Prepaid expenses

173,979

Other

21,458Fixed assets

5,398,296

375

Fixed liabilities

273,632

768,136

Reserve for retirement benefits

201,940

Buildings

352,103

Reserve for stock benefit

67,414Structures

2,462

Long-term accrued amount

4,278

Machinery and equipment

16,891Tools, furniture and fixtures

222,838Land

149,565

Construction in progress

24,275

Tangible fixed assets

Intangible fixed assets

Total liabilities

4,809,814
Net assets

398,203

Shareholders’ equity

17,394,008

Software288,685

Capital stock

1,124,669

Software in progress

101,937

Capital surplus

1,221,189

Other
Investments and other assets

7,579

Legal capital surplus

1,221,189

4,231,956

Investment securities

2,338,309

Stocks of affiliated companies
Long-term loans receivable fromaffiliated companies
Long-term prepaid expenses

1,193,699

Legal retained earnings

94,35618,000

Other retained earnings

16,209,510

Retained earnings

16,303,866

109,155

General reserve

5,512,500

Deferred tax assets

65,088Retained earnings brought forward

10,697,010

Leasehold and guarantee deposits

386,987

Treasury stock

Insurance funds

86,613

Other34,171

Valuation and translation adjustments
Valuation difference on othersecurities
Deferred hedge profit or loss

Allowance for doubtful accounts△68

Stock acquisition rights

Total assets

23,161,036

950,590
950,5882
6,622

Total net assets

18,351,221

Total liabilities and net assets

23,161,036(Note) Figures presented in the financial statements are rounded down to the nearest thousand yen.

- 28 -△1,255,716

Non-consolidated Profit and Loss Statement(From April 1, 2023 to March 31, 2024)(Unit: thousand yen)
Description

AmountSales

18,796,163

Cost of goods sold11,906,424

Gross profit on sales

6,889,738

Selling, general and administrative expenses

3,345,819

Operating income

3,543,919

Non-operating income
Interest income

435Interest on securities

3,454

Dividend income

58,834

Miscellaneous income

37,825100,549

Non-operating expenses
Commissions paid

7,498

Retirement loss on fixed assets

2,699

Foreign exchange losses

48

Miscellaneous loss

1,470

Ordinary income

11,716
3,632,752

Extraordinary income
Profit on reversal of stock acquisition rights

2,750

Net income before taxes

2,750
3,635,502

Corporate income tax, resident tax and business tax
Adjustment of corporate income tax and othertaxes
Net income

992,093505(Note) Figures presented in the financial statements are rounded down to the nearest thousand yen.

- 29 -

992,599
2,642,902

Non-consolidated Statement of
Changes in Shareholders’ Equity and Other Net Assets(From April 1, 2023 to March 31, 2024)(Unit: thousand yen)
Shareholders’ equity
Capital surplus

Retained earnings
Other retained earnings

Capital
stock

Legal
capitalsurplus

Othercapitalsurplus

Total capitalsurplusLegalretainedearnings

Generalreserve

Retainedearnings
brought
forward

1,124,669

1,221,189

121,764

1,342,953

94,3565,512,500

9,454,192

15,061,049

Dividends of surplus△835,313△835,313

Net income

2,642,902

2,642,902△564,771△564,771

Balance at the beginning of
the period

Total retained
earnings

Changes during the period

Acquisition of treasury
stock
Disposition of treasurystock△10,785△10,785

Cancellation of treasury
stock△675,750△675,750

Transfer from retained
earnings to capitalsurplus564,771564,771

Changes in items otherthan shareholders’ equity
during the period (net)Total changes during theperiod--△121,764△121,764--

1,242,817

1,242,817

Balance at the end of theperiod1,124,669

1,221,189-

1,221,189

94,3565,512,500

10,697,010

16,303,866

Shareholders’ equity

Balance at the beginning of theperiodValuation and translation adjustments

Treasurystock

Valuation
Total
difference on Deferred hedge
shareholders’
otherprofit or loss
equitysecurities△1,173,259

16,355,411

427,582

1,158

Total
valuationandtranslation
adjustments

Stockacquisitionrights428,741

22,390Total net
assets

16,806,543

Changes during the period
Dividends of surplus△835,313

Net income△835,313

2,642,902

2,642,902

Acquisition of treasury stock△900,027△900,027△900,027

Disposition of treasury stock

141,820

131,035

131,035

Cancellation of treasury stock

675,750

-

-

-

-

Transfer from retained earnings
to capital surplus
Changes in items other thanshareholders’ equity during theperiod (net)523,005△1,156

521,849△15,767

506,081

Total changes during the period△82,456

1,038,596

523,005△1,156

521,849△15,767

1,544,677

Balance at the end of the period△1,255,716

17,394,008

950,5882

950,590

6,622

18,351,221(Note) Figures presented in the financial statements are rounded down to the nearest thousand yen.

- 30 -