Note: This document has been translated from a part of the Japanese original for reference purposes only. In the event of any
discrepancy between this translated document and the Japanese original, the original shall prevail.

Securities Code 4668
October 31, 2023

To All Shareholders With Voting Rights
Kazuhito Yamashita
President and Representative Director
MEIKO NETWORK JAPAN CO., LTD.
7-20-1 Nishi-Shinjuku, Shinjuku Ward, Tokyo, JapanNOTICE OF THE 39TH ANNUAL MEETING OF SHAREHOLDERS
Dear Shareholders:
Please be informed that the 39th Annual Meeting of Shareholders of MEIKO NETWORK JAPAN CO., LTD.
(hereinafter the “Company”) shall be held as described below.
When convening this general meeting of shareholders, the Company provides information contained in the reference
documents for the general meeting of shareholders, etc. (matters to be provided electronically) electronically, andposts this information on the Company’s website. Please access the website by using the internet address shown
below to review the information.
The Company’s website:
https://www.meikonet.co.jp/ja/ir/stock/meeting.html (in Japanese)
In addition to posting matters to be provided electronically on our website, the Company also posts this informationon the website of Tokyo Stock Exchange, Inc. (TSE).
TSE website (Listed Company Search):https://www2.jpx.co.jp/tseHpFront/JJK010010Action.do?Show=Show (in Japanese)(Access the TSE website by using the internet address shown above, enter “MEIKO NETWORK JAPAN” in “Issue
name (company name)” or the Company’s securities code “4668” in “Code,” and click “Search.” Then, click “Basic
information” and select “Documents for public inspection/PR information.” Under “Filed information available forpublic inspection,” click “Click here for access” under “[Notice of General Shareholders Meeting /Informational
Materials for a General Shareholders Meeting].”)If you are unable to attend the meeting in person, you may exercise your voting rights via the internet, etc. or inwriting. Please review the Reference Documents for the Annual Meeting of Shareholders, and exercise your voting
rights by 6:00 p.m. on Thursday, November 16, 2023 (JST).
1. Date and Time: Friday, November 17, 2023 at 10:00 a.m. (JST)
2. Place:“Century Room,” B1 floor, Hyatt Regency Tokyo
2-7-2 Nishi-Shinjuku, Shinjuku Ward, Tokyo, Japan
3. Agenda of the Meeting:
Matters to be reported:
1. Business Report, Consolidated Financial Statements for the 39th term (from September 1, 2022 to August
31, 2023) and results of audits by the Accounting Auditor and the Audit and Supervisory Committee of theConsolidated Financial Statements
2. Non-consolidated Financial Statements for the 39th term (from September 1, 2022 to August 31, 2023)
Proposals to be resolved:
Proposal No. 1:
Election of Five (5) Directors (Excluding Directors Who Are Audit and Supervisory
Committee Members)
Proposal No. 2:
Determination of Compensation for Granting Restricted Stock to Directors (Excluding
Outside Directors and Directors Who Are Audit and Supervisory Committee Members)
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•
•

•
•

Shareholders attending the meeting are kindly requested to submit the Voting Right Exercise Form to the reception at the venue.
Note that, for this general meeting of shareholders, paper-based documents stating matters to be provided electronically will bedelivered to all shareholders regardless of whether they have made a request for delivery of such documents. Among the matters tobe provided electronically, in accordance with the provisions of laws and regulations and Article 15, Paragraph 2 of the Articles ofIncorporation of the Company, System to Ensure the Properness of Operations, Overview of Operational Status of System to Ensure
the Properness of Operations, Consolidated Statement of Changes in Equity, Notes to Consolidated Financial Statements, Statementof Changes in Equity, and Notes to Non-consolidated Financial Statements are not provided in the documents delivered toshareholders. Accordingly, the Business Report, the Consolidated Financial Statements and the Non-consolidated Financial
Statements in the paper-based documents are part of the documents included in the scope of audits by the Accounting Auditor in the
preparation of the accounting audit report, and by Audit and Supervisory Committee in the preparation of the audit report.
If there are any changes to the matters to be provided electronically, a notice of the changes and the details of the matters before andafter the changes will be posted on the Company’s aforementioned website and the TSE website.
If a voting right is exercised in duplicate by the same shareholder through writing and electromagnetic means, the Company shalltreat the latter as valid. In addition, if an exercise of voting right through electromagnetic means was conducted for multiple times,
and if there are conflicting votes to the same proposal, the last exercise of voting right through electromagnetic means shall be treatedas valid.

-2-

How to Exercise Your Voting Rights, Etc.
Exercise of Voting Rights via the Internet
Please access the following website for exercising voting rights and exercise your voting rights.
https://www.web54.net (in Japanese)
Inquiries (Toll-free number)
Transfer Agency Web Support Service, Sumitomo Mitsui Trust Bank, Limited
Telephone number: 0120-652-031 (available from 9:00 a.m. to 9:00 p.m.)
Thursday, November 16, 2023 at 6:00 p.m. (JST)Exercise of Voting Rights in Writing
Please indicate your approval or disapproval for each proposal, and send us your response.
 For each proposal, if there is no indication of an approval or disapproval, the voteshall be treated as an approval.
To be received by the Company by Thursday, November 16, 2023 at 6:00 p.m. (JST)Exercise of Voting Rights by Attending Meeting in Person
Please submit the Voting Right Exercise Form to the reception at the venue.
 Please bring this Notice with you on the day.
Friday, November 17, 2023 at 10:00 a.m. (JST)Exercising voting rights is easy with “smart exercising.”
You can exercise your voting rights simply by using your smartphone to read the QR code on the Voting Right
Exercise Form.
*1

Depending on the type of device used, the internet connection, etc., there may be cases where this service is unavailable.

*2

After the first login, an ID and password will be required.

*3“QR Code” is a registered trademark of DENSO WAVE INCORPORATED.

For Institutional Investors
For shareholders whose names are listed on the shareholder register such as management trust banks (including
the standing proxy), institutional investors can use an electronic platform run by ICJ, Inc. for the exercise of
voting rights, subject to prior application and registration.

-3-

Reference Documents for the Annual Meeting of Shareholders
Proposals and References
Election of Five (5) Directors (Excluding Directors Who Are Audit andSupervisory Committee Members)

Proposal No. 1

The terms of office of all five (5) Directors (excluding Directors who are Audit and Supervisory Committee members;
the same shall apply hereinafter in this proposal) will expire at the conclusion of this Annual Meeting of Shareholders.
Accordingly, the election of five (5) Directors is proposed.
Concerning this proposal, the Audit and Supervisory Committee of the Company has confirmed that those candidates
were nominated through appropriate procedures at the Nomination and Compensation Committee, which consists ofIndependent Outside Directors as major constituent members, and conducted review, and has judged that all of thecandidates for Directors are appropriate.
The candidates are as follows:
No.

Name

Position in the Company

Number of
Board of Directors
years in office meetings attendance

1

Hirotake Watanabe

Reappointment Chairperson and Director

39 years

2

Kazuhito Yamashita

Reappointment President and Representative Director

16 years

3

Kotaro Okamoto

Reappointment Vice President and Director

3 years

4

Yasutada Taniguchi

Reappointment Managing Director

1 year5

Dai Komiyama

Reappointment Director

3 years100%(17/17 times)
100%(17/17 times)
100%(17/17 times)
100%(14/14 times)*
100%(17/17 times)* As Mr. Taniguchi assumed his position on November 18, 2022, his attendance above covers the Board of Directors meetings held on
and after November 18, 2022.

-4-No. 1

Hirotake Watanabe (Date of birth: Sept. 19, 1942)

Reappointment▶ Brief personal record, position, responsibilities and important concurrent posts
Number of the Company’s shares held
1,794,600 shares

Sept. 1984: Established the Company, Director of the Company
May 1985: President and Representative Director
Nov. 2015: Chairperson and Representative Director

Board of Directors meetings attendance
100% (17/17 times)

Nov. 2018: Chairperson and Director (present)[Important concurrent posts]
Representative Director of MEIKO KYOIKU KENKYUJO (Public Interest
Incorporated Foundation)▶ Reasons for selection as a candidate for Director
Mr. Hirotake Watanabe has been leading the management of the Company as a foundersince the Company was founded in September 1984. He has made contribution to theenhancement of corporate value of the Company through his outstanding foresight,
abundant management experience, and quick decision-making ability, mainly by
opening Meikogijuku franchise individual tutoring cram schools nationwide.
The Company expects that he will remain a spiritual pillar for employees as a founderwhile demonstrating strong leadership and be able to continue contributing to further
growth of the Company, and therefore proposes the reelection of the candidate as
Director of the Company.

-5-No. 2

Kazuhito Yamashita (Date of birth: Dec. 7, 1959)

Reappointment▶ Brief personal record, position, responsibilities and important concurrent posts
Number of the Company’s shares held
35,800 sharesMar. 2007: Joined the Company
Nov. 2007: Director
Nov. 2008: Managing Director

Board of Directors meetings attendance
100% (17/17 times)

Sept. 2012: General Manager, Kobetsu School BusinessIn charge of Soccer School Business Division, in charge of Meiko
Kids Business Division and in charge of Business Development
DivisionJul. 2013: General Manager, Business Development Headquarters
Sept. 2014: General Manager, Meikogijuku Business Headquarters (present)
In charge of FC Business Development DivisionNov. 2014: Senior Managing Director
Nov. 2015: Vice President and Director
Nov. 2018: President and Representative Director (present)[Important concurrent posts]
Councilor of MEIKO KYOIKU KENKYUJO (Public Interest Incorporated
Foundation)▶ Reasons for selection as a candidate for Director
Mr. Kazuhito Yamashita has abundant knowledge and experience accumulated as acorporate manager. He has made efforts to create fans by deepening existing
businesses and to create new businesses that follow the Meikogijuku Business.
He also places importance on communication with employees, and drives theCompany’s human capital management by utilizing the individuality of each employee
as diversity and drawing out individual initiative. The Company expects that he will beable to continue contributing to the enhancement of corporate value, and therefore
proposes the reelection of the candidate as Director of the Company.

-6-

No. 3

Kotaro Okamoto (Date of birth: Oct. 31, 1970)

Reappointment▶ Brief personal record, position, responsibilities and important concurrent posts
Number of the Company’s shares held

Sept. 1995: Joined Nissho Motors Co. Ltd. (ONIX)

3,500 shares

Apr. 2002: Director of Nissho Motors Co. Ltd.
Apr. 2004: President and Representative Director of Nissho Motors Co. Ltd.

Board of Directors meetings attendance
100% (17/17 times)

Feb. 2005: Joined Carlets Co., Ltd., President and Representative Director
Jun. 2008: Joined Krispy Kreme Doughnuts Japan, Inc.,
Executive Officer and COO
Mar. 2012: President and Representative Director of Krispy Kreme Doughnuts
Japan, Inc.
Apr. 2017: Partner of GrowthPoint Equity LLP
Jul. 2020: Joined the Company, Counselor
Oct. 2020: Director of KOTOH & COMPANY CO., LTD (present)
Nov. 2020: Senior Managing Director of the Company
Sept. 2021: General Manager, Kids Business Headquarters (present)
Apr. 2022: Director of Simple Inc. (present)
Sept. 2022: Director of MEIKO Carrier Partners Co., Ltd. (present)
Oct. 2022: Director of Go Good Co., Ltd. (present)
Apr. 2023: Vice President and Director of the Company (present)[Important concurrent posts]
Director of KOTOH & COMPANY CO., LTD
Director of Simple Inc.
Director of MEIKO Carrier Partners Co., Ltd.
Director of Go Good Co., Ltd.
▶ Reasons for selection as a candidate for Director
Mr. Kotaro Okamoto has a track record of managing three corporations as President
and Representative Director prior to his appointment as Director of the Company.
Since his appointment as a Director of the Company, he has overseen the Japanese
Language School Business and Other Businesses such as Kids Business from theperspective of a professional manager, and has properly managed and supervised theexecution of business operations. He also has abundant knowledge of businessstrategy, M&A, and financial accounting, and is committed to using his expertise toexpand the scope of businesses. The Company has determined that he will be able tocontribute to further growth of the Company and the enhancement of corporate value,
and therefore proposes the reelection of the candidate as Director of the Company.

-7-

No. 4

Yasutada Taniguchi (Date of birth: Apr. 9, 1974)

Reappointment▶ Brief personal record, position, responsibilities and important concurrent posts
Number of the Company’s shares held
2,500 shares

Apr. 1998: Joined Nippon Telegraph and Telephone Corporation (NTT)
Apr. 2004: Transferred to NTT Resonant Inc.
Nov. 2010: Transferred to NTT Communications Corporation

Board of Directors meetings attendance
100% (14/14 times)* As Mr. Taniguchi assumed his position on
November 18, 2022, his attendance above

Mar. 2021: Joined the Company, General Manager, DX Promotion OfficeJun. 2021: Executive Officer, General Manager, DX Promotion Office
Jul. 2021: Executive Officer, General Manager, DX Strategy Division

covers the Board of Directors meetings

Sept. 2021: Executive Officer, General Manager, Marketing Department

held on and after November 18, 2022.

Apr. 2022: Executive Officer, General Manager, Information Systems
Department
Jun. 2022: President Representative Director of Go Good Co., Ltd. (present)
Nov. 2022: Director of the Company
General Manager, DX Strategy Division (present)
Aug. 2023: Managing Director (present)[Important concurrent posts]
President Representative Director of Go Good Co., Ltd.
▶ Reasons for selection as a candidate for Director
As General Manager of the Company’s DX Strategy Division, Mr. Yasutada Taniguchi
has promoted organizational simplification and clarification of areas of responsibility
through the use of digital technology, and has played a central role in fundamentallytransforming the Company’s business through productivity improvement and cost
control.
He is also actively working to develop human resources capable of promoting DX andCX (customer experience value) improvement in order to respond to changes in thebusiness environment surrounding the Company. The Company expects that he will beable to contribute to further growth of the Company and the enhancement of corporate
value, and therefore proposes the reelection of the candidate as Director of theCompany.

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No. 5

Dai Komiyama (Date of birth: Oct. 19, 1975)

Reappointment▶ Brief personal record, position, responsibilities and important concurrent posts

2,000 shares

Oct. 2013: President and Representative Director of MAXIS Holdings Inc.
(current MAXIS Education Inc.)

Board of Directors meetings attendance

Nov. 2018: Joined the Company, Executive Officer, in charge of Academic
Division

Number of the Company’s shares held

100% (17/17 times)

Oct. 2019: In charge of Cram School Development Headquarters
Apr. 2020: Deputy General Manager, Meikogijuku Business Headquarters(present)
Chairperson and Representative Director of MAXIS Education Inc.
(present)
Aug. 2020: General Manager, Kobetsu School Business of the Company
Nov. 2020: Director (present)[Important concurrent posts]
Chairperson and Representative Director of MAXIS Education Inc.
▶ Reasons for selection as a candidate for Director
Mr. Dai Komiyama has accumulated experience as a student, part-time instructor andclassroom manager at Meikogijuku as well as a manager of a mega-franchisee, and hasabundant knowledge and experience in franchise management.
He also has extensive knowledge of the education and tutoring industries. The
Company expects that he will be able to contribute to further enhancement ofcorporate value, and therefore proposes the reelection of the candidate as Director of
the Company.

(Notes)1. None of the candidates for Directors have special conflict of interest with the Company.
2. The Company has entered into a directors and officers liability insurance contract with an insurance company, which
covers Directors as the insured persons, as stipulated in Article 430-3, Paragraph 1 of the Companies Act. The insurance
contract covers damages and litigation expenses to be borne by the insureds in the event that a claim for damages is madeagainst the insured due to an act (including omission) committed by the insured in his/her capacity as a director or officerof the Company. The insurance premiums are fully borne by the Company. The candidates for Directors will be insured
by the insurance contract upon the approval on their appointment. The Company plans to renew the insurance contract
with the same terms and conditions during their terms of office.

-9-

<Reference>
Basic Views on Officer Structure
The Company has formulated a Mid-term Management Plan, “Fan and Fun Innovation” for the fiscal year ended
August 31, 2022 to the fiscal year ending August 31, 2024, in order to respond to the unpredictable age of VUCA.
The Company is aiming to be a corporate group that extracts the potential of people, which is its vision, by promoting
the deepening of existing businesses and the creation of new services while repeatedly transforming with its purpose
as its origin.
Achieving this vision requires the clear definition and execution of business strategy, DX strategy, human capitalmanagement, and capital strategy. The Company has selected a senior management team by defining the required or
expected skills to lead the definition and execution of these strategies and to pursue sustainable growth for society
and the Company.
Executive Officers as well as Inside and Outside Directors will utilize their expertise and experience while
complementing each other to enhance the effectiveness of the Board of Directors.
■

Principal expertise and experience particularly required or expected out of Directors
No.

PurposeHumanBusiness andmanagement /Marketing /Sustainability
capitalsales
DX / CX
management
branding
management experiencestrategy

Name

Directors

1

Hirotake Watanabe

2Kazuhito Yamashita

3

Kotaro Okamoto

4

Yasutada Taniguchi

5

Dai Komiyama

Audit and Supervisory
Committee members

Hiroshi Jinza

OutsideNanako Aono

Outside

Saiko Kumao

OutsideKanako Iwase Outside

•
•
•

•
•

•
•
•

•
•
•
•
•

•

•
•
•
•
•
•
•
•
•

•

•

•
•
•
•
•

Creation ofnew
Legal affairs / Financial
businesses / complianceaffairs
M&A

•
•
•
•
•
•

•
•

•
•

•
•
•
•

•
•

* The table above shows items that are required or expected of each Director/Audit and Supervisory Committee member. In addition,
the Company will continue to discuss and flexibly change required or expected roles and diversity in accordance with factors such aschanges in the business environment surrounding the Company and progress in the Company’s business strategies.

- 10 -

■Principal expertise and experience particularly required or expected out of Executive Officers
Name

Kouyuki
Sakamoto
MahitoAsamizu
Shuji
Watanabe

Position

Businessstrategy

Sustainability

Humancapitalstrategy

Senior Executive Officer
General Manager of the Corporate
Planning Department
Executive Manager of Sustainability
Promotion Office

•

•

•

Senior Executive Officer
President of Kanto and Koshin
Company in the Meikogijuku
Business Headquarters•

Executive Officer
Director of Administration
General Manager of the Finance andAccounting Department and Directorof Human Resources Department

Furukawa

Executive Officer
President of Kinki Company in the
Meikogijuku Business Headquarters

Yoshihiro
Etou

Executive Officer
President of West Japan Company in
the Meikogijuku Business
Headquarters

NaofumiHiroakiTateyama

Executive Officer
General Manager of the Kids
Business Division in the Kids
Business Headquarters••

Industry
experience /sales

Marketing /branding

Compliance /Financialrisk
affairs
management

•
•

•

•
•

•

•
•
•
•

•
•

DX / CX

•

•
•
•

•

•
•
•

* The table above shows items that are required or expected of each Executive Officer. It does not cover all the expertise and experience
possessed by each of them. In addition, the Company will continue to discuss and flexibly change required or expected roles anddiversity in accordance with factors such as changes in the business environment surrounding the Company and progress in the
Company’s business strategies.

Criteria for Nominating Independent Outside Directors
The Company has established criteria for nominating Independent Outside Directors to ensure the independence ofcandidates when nominating candidates for Outside Directors, and disclosed it on the Company’s website(https://www.meikonet.co.jp/ja/ir/management/governance.html (in Japanese)).

- 11 -

Proposal No. 2

Determination of Compensation for Granting Restricted Stock to Directors(Excluding Outside Directors and Directors Who Are Audit and Supervisory
Committee Members)

At the 38th Annual Meeting of Shareholders held on November 18, 2022, it was approved that the maximum amountof monetary compensation for Directors (excluding Directors who are Audit and Supervisory Committee members)of the Company shall be 300 million yen per year (including officer bonuses but excluding employee salaries); thatthe maximum amount of performance-based compensation (stock compensation) to be contributed as compensation
to Directors of the Company (excluding Outside Directors and Directors who are Audit and Supervisory Committee
members) during the trust period (the first four-year period) shall be 70 million yen per fiscal year, separate from themonetary compensation; and that the maximum total number of points to be granted to Directors of the Company(excluding Outside Directors and Directors who are Audit and Supervisory Committee members) shall be 40,000
points per fiscal year (one point is one Company share). However, in order to grant further incentives to Directors(excluding Outside Directors and Directors who are Audit and Supervisory Committee members; hereinafter, the“Eligible Directors”) for the sustainable improvement of the corporate value of the Company and to promote thefurther sharing of value between Eligible Directors and shareholders, the Company seeks approval to introduce acompensation plan to grant shares of stock with transfer restrictions (“restricted stock”) to Eligible Directors of theCompany. Therefore, the Company proposes that the total maximum amount of monetary compensation to be paid
to Eligible Directors for the granting of restricted stock within the current maximum amount of monetarycompensation for Directors (excluding Directors who are Audit and Supervisory Committee members) of theCompany be 50 million yen per year, which is considered reasonable in light of the above objectives, and that the
total number of shares of common stock of the Company to be issued or disposed of under this plan be limited to
70,000 shares per year (however, in the event of a stock split (including gratis allotment of common stock of theCompany) or a reverse stock split of common stock of the Company, or any other event requiring adjustment of thetotal number of shares of common stock of the Company to be issued or disposed of as restricted stock on or after
the date of approval of this proposal, such total number shall be adjusted within reasonable limits). The specificallocation to each Eligible Director shall be determined by resolution of the Board of Directors.
There are currently five (5) Eligible Directors, and if Proposal No. 1 is approved and passed as originally proposed,
the number of Eligible Directors will continue to be five (5).
The Eligible Directors shall pay all monetary remuneration claims to be provided under this proposal in the form ofproperty contributed in kind, in accordance with the resolution of the Board of Directors of the Company, and shall,in return, receive common stock of the Company that shall be issued or disposed of by the Company. The amount tobe paid per share shall be determined by the Board of Directors based on the closing price of common stock of theCompany on the Tokyo Stock Exchange on the business day immediately preceding the date of such resolution by
the Board of Directors (or the closing price of the immediately preceding trading day if no trading was conducted onthat date), to the extent not particularly favorable to the Eligible Director. For such issuance or disposal of thecommon stock of the Company, a restricted stock allotment agreement that includes the content outlined below (the“Allotment Agreement”) shall be entered into between the Company and each Eligible Director.
(1) Eligible Directors shall, during a period from the date of delivery of restricted stock to the date that they lose
their positions as Director of the Company or any other positions determined by the Board of Directors of theCompany (provided, however, that if losing their positions before three months have elapsed after the fiscal year
in which the date of delivery of restricted stock has elapsed, and if there is a date separately prescribed by theCompany’s Board of Directors within six months after the aforesaid fiscal year has elapsed, such prescribeddate) (hereinafter, the “Transfer Restriction Period”), be prohibited from transfers, creation of security intereston, or otherwise dispose of the common stock of the Company allotted according to the Allotment Agreement(hereinafter, the “Allotted Stock”) (hereinafter, the “Transfer Restrictions”).
(2) If an Eligible Director loses any of the positions mentioned in (1) above before the expiration of the period
separately specified by the Board of Directors of the Company (hereinafter, the “Service Period”), the Company
shall automatically acquire the Allotted Stock without contribution unless there is any reason the Board of theCompany deems justifiable.
(3) The Company shall, on the condition that Eligible Directors continuously remain in the positions as Director of
the Company or any other positions specified by the Board of Directors of the Company throughout the Service- 12 -

Period, lift the Transfer Restrictions of all of shares of the Allotted Stock upon expiration of the Transfer
Restriction Period. However, if the Eligible Director loses any of the positions mentioned in (1) above before
the expiration of the Service Period due to the reason the Board of Directors of the Company deems justifiable,
which is designated in (2) above, the Company shall rationally adjust the number of shares of the Allotted Stockon which the Transfer Restrictions are to be lifted, and the timing of lifting as needed.
(4) The Company shall automatically acquire without contribution the Allotted Stock on which the Transfer
Restrictions have not been lifted at the expiration of the Transfer Restriction Period in accordance with theprovision of (3) above.
(5) If, during the Transfer Restriction Period, matters relating to a merger agreement in which the Company is thedisappearing company, a stock exchange agreement or stock transfer plan in which the Company becomes awholly owned subsidiary, or other reorganization, etc. are approved at the Company’s general meeting ofshareholders (or at a meeting of its Board of Directors in cases where approval at the Company’s general meetingof shareholders is not required in relation to the reorganization, etc.), the Company shall lift the Transfer
Restrictions on the Allotted Stock with the number of shares that is reasonably determined, by resolution of theBoard of Directors of the Company.
(6) In cases provided for in (5) above, the Company shall automatically acquire without contribution the Allotted
Stock on which the Transfer Restrictions have not been lifted as of the time immediately after the Transfer
Restrictions were lifted in accordance with the provisions in (5) above.
(7) The method for expressing intentions and giving notifications in the Allotment Agreement, the method foramending the Allotment Agreement, and other matters to be determined by the Board of Directors shall be laidout in the Allotment Agreement.
The Company revised a policy for determining the details of compensation, etc. for Directors at the Board of
Directors meeting held on July 27, 2023. The Company plans to change this policy so that it is aligned with this
proposal, subject to the approval of this proposal. Details, etc. of the changed policy are provided in <Reference (2)>below. Additionally, as outlined above, the amount to be paid in for the Allotted Stock will be an amount within theextent that will not be particularly advantageous to the Eligible Directors, while the dilution rate is also insignificant,so granting the Allotted Stock has been determined to be appropriate.
<Reference (1)>
On condition that this proposal is approved, the Company plans to allot restricted stock equivalent to that describedabove to Executive Officers of the Company.
<Reference (2)>1) Matters pertaining to policy regarding the determination of amount of officer compensation, etc. and its
calculation method
a. Matters regarding policy on determining the content of individual compensation, etc. for Directors(excluding Directors who are Audit and Supervisory Committee members; the same shall apply hereinafterin this item a.)(a) Method of determining policy on determining the content of individual compensation, etc. for Directors
The Company’s basic policy for compensation for Directors is to determine an appropriate level ofcompensation for each individual Director based on their respective responsibilities and to ensure thatdecisions are made through a transparent and objective process, so that compensation continues to duly
function as an incentive for the sustainable improvement of corporate value.
Compensation for Executive Directors consists of basic compensation (monthly compensation) as fixedcompensation and non-monetary compensation (stock compensation). The policy for determining thiscompensation was revised at a meeting of the Board of Directors held on October 26, 2023. With respect
to individual compensation, etc. to Outside Directors, since they are independent from the execution ofbusiness operations, the Company has decided not to introduce non-monetary compensation (stockcompensation), and to pay only basic compensation as monthly compensation.

- 13 -

(b) Outline of the contents of the determination policyi. Policy for basic compensation
The total amount of annual compensation for Directors is resolved at the Annual Meeting of
Shareholders. Compensation for each Director is drafted by the President and Representative
Director based on factors such as the duties of each Director and the Company’s situation, and isdetermined by the Board of Directors after consultation with the Nomination and Compensation
Committee.
ii. Policy for non-monetary compensation (stock compensation)
Non-monetary compensation for Directors (excluding Outside Directors) consists of a stockcompensation plan based on a stock delivery trust as performance-based compensation (hereinafter,
the “Stock Delivery Trust Plan”) and a restricted stock compensation plan (hereinafter, the “RSPlan”).
Amongst non-monetary compensation, the Stock Delivery Trust Plan is a stock compensation planunder which the Company’s shares are acquired through a trust (the trust established under the
Stock Delivery Trust Plan; hereinafter, the “Trust”) using a monetary contribution made by theCompany as the source of funds. The Company’s shares and money equivalent to the amountobtained by converting the Company’s shares at market value (hereinafter, the “Company’s Shares,Etc.”) will be delivered to Directors through the Trust in accordance with Executive Officer Stock
Delivery Regulations established by the Company. The purpose of this plan is to further clarify thelinkage between Director compensation and the Company’s business performance and stock value,
and to raise awareness among Directors of the need to contribute to improving the Company’s
performance and increasing its corporate value over the medium to long term by sharing thebenefits and risks associated with fluctuations in stock prices with shareholders. The Directors
shall receive the Company’s Shares, Etc. upon their retirement, in principle. The maximum amountof the Stock Delivery Trust Plan was determined at the 38th Annual Meeting of Shareholders held
on November 18, 2022 to be 40,000 points per fiscal year (one point is one Company share) to be
granted to Directors (excluding Outside Directors) during the trust period (first four-year period).
The number of shares to be allotted under the Stock Delivery Trust Plan is drafted by the President
and Representative Director in accordance with Executive Officer Stock Delivery Regulations
based on factors such as the duties of each Director and the Company’s situation, and is determinedby the Board of Directors after consultation with the Nomination and Compensation Committee.
Amongst non-monetary compensation, the RS Plan is a plan under which the Company andDirectors enter into a restricted stock allotment agreement, and restricted stock is allotted based on
this agreement. The purpose of this plan is to grant further incentives to Directors to continuously
improve the Company’s corporate value and further promote value sharing with shareholders byallowing Directors to hold shares even during the Transfer Restriction Period. The number ofshares of restricted stock to be allotted is drafted by the President and Representative Director at
fixed periods in time based on factors such as position, performance status, degree of contribution,and the Company’s situation, and is determined by the Board of Directors after consultation with
the Nomination and Compensation Committee.
iii. Policy on determining the ratio of the amount of basic compensation or the amount of nonmonetary compensation to the amount of individual compensation to Directors
The ratio of each type of compensation to Directors is determined by the Board of Directors after
consultation with the Nomination and Compensation Committee based on factors such as the duties
of each Director and the Company’s situation, as well as the compensation levels of companies inthe same business size and related industries and business categories as those of the Company.
iv. Reasons why the Board of Directors has judged that the content of compensation, etc. forindividual Directors is in line with the policy
In determining the details of basic compensation for each individual Director, as per the policy on
determining basic compensation resolved by the Board of Directors, the President andRepresentative Director prepares a draft based on factors such as the duties of each Director andthe Company’s situation and the Board of Directors makes a decision after consulting with theNomination and Compensation Committee. This is deemed to be in line with the determination
policy. With regard to individual non-monetary compensation (stock compensation) for Directors- 14 -

(excluding Outside Directors), the Company has confirmed that the method for determining thedetails of compensation, etc. and the details of compensation, etc. determined are consistent withthe determination policy and that the report from the Nomination and Compensation Advisory
Committee is respected. This is deemed to be in line with the determination policy.
b. Matters regarding general meeting of shareholders resolutions pertaining to compensation, etc. for Directors(a) The maximum amount of compensation for Directors is as follows:
At the 38th Annual Meeting of Shareholders held on November 18, 2022, it was resolved that the
maximum amount of compensation for Directors of the Company (excluding Directors who are Audit
and Supervisory Committee members) shall be 300 million yen per year (including officer bonuses but
excluding employee salaries) (the number of Directors at the conclusion of said Annual Meeting of
Shareholders was five). In addition, the Company has introduced a stock compensation plan for
Directors (excluding Directors who are Audit and Supervisory Committee members and Outside
Directors). At the 38th Annual Meeting of Shareholders held on November 18, 2022, it was resolvedthat the maximum amount of the Stock Delivery Trust Plan to be contributed as compensation to
Directors of the Company (excluding Directors who are Audit and Supervisory Committee members
and Outside Directors) during the trust period (the first four-year period) shall be 70 million yen per
fiscal year, separate from the monetary compensation; and that the maximum total number of points tobe granted to Directors of the Company (excluding Directors who are Audit and Supervisory Committee
members and Outside Directors) shall be 40,000 points per fiscal year (one point is one Company share)(the number of Directors (excluding Directors who are Audit and Supervisory Committee members andOutside Directors) at the conclusion of said Annual Meeting of Shareholders was five). In addition, atthe 39th Annual Meeting of Shareholders held on November 17, 2023 it was resolved that the maximum
amount of the RS Plan shall be 50 million yen per year within the maximum amount of monetarycompensation and the total number of shares of common stock of the Company be limited to 70,000
shares per year (the number of Directors (excluding Directors who are Audit and Supervisory
Committee members and Outside Directors) at the conclusion of said Annual Meeting of Shareholders
was five).
(b) The maximum amount of compensation for Directors who are Audit and Supervisory Committee
members is as follows:
At the 38th Annual Meeting of Shareholders held on November 18, 2022, it was resolved that the
maximum amount of compensation for Directors who are Audit and Supervisory Committee members
shall be 50 million yen per year (the number of Directors who are Audit and Supervisory Committee
members at the conclusion of said Annual Meeting of Shareholders was four).

- 15 -

Consolidated Financial Statements
Consolidated Balance Sheet (As of August 31, 2023)(Unit: Million yen)
Item

AmountItem

AssetsCurrent assets

AmountLiabilities
10,421

Cash and deposits

8,472

Accounts receivable - trade

1,038

Current liabilities
Accounts payable - trade
Accounts payable - other

3,759
157
138

Securities

100

Accrued expenses

Merchandise123

Income taxes payable

166

Work in process

13

Accrued consumption taxes

231

Supplies

10

Contract liabilities

Advance payments to suppliers

28

Lease liabilities

2

Prepaid expenses

357

Deposits received

132

Other

309

Provision for bonuses

445

Allowance for doubtful accounts

(34)

Other

62

Non-current assets
Property, plant and equipment

5,390

Non-current liabilities
Retirement benefit liability

693

Buildings and structures

582

Tools, furniture and fixtures

55

Land

48

Leased assets

6

Intangible assets

Provision for share awards for directors(and other officers)
Long-term accounts payable - other to
employees
Long-term accounts payable - other toofficers

1,204

1,218

848
135
36
79
116

Deferred tax liabilities

67

482

Lease liabilities

4

Goodwill

292

Asset retirement obligations

406

Software163

Long-term guarantee deposits

1

Software in progress

20

Total liabilities

Telephone subscription right4

Net assets

Investments and other assets

4,214

Shareholders’ equity

10,358Investment securities

2,809

Share capital972

Long-term prepaid expenses

26

Capital surplus

909

Deferred tax assets

98

Retained earnings

11,184

1,022

Treasury shares(2,707)

Leasehold and guarantee deposits

4,607Long-term time deposits

100

Accumulated other comprehensive income

844

Other

158

Valuation difference on available-for-salesecurities

815

Foreign currency translation adjustment

29

Total assets

15,811- 16 -

Total net assets

11,203

Total liabilities and net assets

15,811

Consolidated Statement of Income (From September 1, 2022 to August 31, 2023)(Unit: Million yen)
Item

AmountNet sales

20,871

Cost of sales

15,819Gross profit

5,051

Selling, general and administrative expenses

3,987

Operating profit

1,064

Non-operating income
Interest income

11

Dividend income

30

Share of profit of entities accounted for using equity method

58

Rental income

25

Reversal of allowance for doubtful accounts

14

Subsidy income

0Penalty income

21

Other

39

201

Non-operating expenses
Loss on investments in investment partnerships

7

Rental expenses

11

Other

3

Ordinary profit

22
1,243

Extraordinary income
Gain on sale of property, plant and equipment

0

Gain on sales of investment securities

149

150

Extraordinary losses
Loss on change in equity

9

Loss on sale of non-current assets

1

Loss on retirement of property, plant and equipment

2

Impairment losses

26

Other

2

Profit before income taxes

42
1,350

Income taxes - current

478

Income taxes - deferred

63

541

Profit809

Profit attributable to owners of parent809- 17 -

Non-consolidated Financial Statements
Balance Sheet (As of August 31, 2023)(Unit: Million yen)
Item

AmountItem

AssetsCurrent assets

AmountLiabilities
4,752

Cash and deposits

2,864

Accounts receivable - trade

1,027

Current liabilities
Accounts payable - trade

1,873
109

Accounts payable - other19

Securities

100

Accrued expenses

897

Merchandise118

Income taxes payable63

Supplies

8

Accrued consumption taxes

107

Advance payments to suppliers

27

Contract liabilities

97

Prepaid expenses

181

Lease liabilities

1

Short-term loans receivable

165

Deposits received

158

Other

284

Provision for bonuses

369

Allowance for doubtful accounts

(24)

Other

49

Non-current assets
Property, plant and equipment

8,262

Non-current liabilities
Provision for share awards for directors(and other officers)
Long-term accounts payable - other to
employees

288

473
23

Buildings

265

Tools, furniture and fixtures

17

Deferred tax liabilities

60

Leased assets

5Long-term accounts payable - other toofficers

98

Intangible assets

170

Lease liabilities

4

Software155

Asset retirement obligations

205

Software in progress

10Long-term guarantee deposits

1

Telephone subscription right4

Investments and other assets

7,803

Net assets

Investment securities

2,464

Shareholders’ equity

9,853

Shares of subsidiaries and associates

4,522

Share capital

972

Investments in capital

10

Capital surplus

915

Long-term loans receivable

110

Long-term prepaid expenses

17

Leasehold and guarantee deposits

546

Legal retained earnings

54

Long-term time deposits

100

Other retained earnings

10,619

Other

33

General reserve

9,147

Retained earnings brought forward

1,472

Total liabilities

Legal capital surplus
Retained earnings

Treasury shares
Valuation and translation adjustments
Valuation difference on available-for-salesecurities
Total assets

13,015- 18 -

79

2,346

915
10,673(2,707)815
815

Total net assets

10,668

Total liabilities and net assets

13,015

Statement of Income (From September 1, 2022 to August 31, 2023)(Unit: Million yen)
Item

AmountNet sales

13,426

Cost of sales

10,338Gross profit

3,088

Selling, general and administrative expenses

2,617

Operating profit

471

Non-operating income
Interest income

1Interest on securities

10

Dividend income

30

Rental income

30

Reversal of allowance for doubtful accounts

14

Subsidy income

0Penalty income

21

Other

13

122

Non-operating expenses
Loss on investments in investment partnerships

7

Commission expenses

18

Rental expenses

30

Other

1

Ordinary profit

58
535

Extraordinary income
Gain on sale of shares of subsidiaries and associates

149

149

Extraordinary losses
Loss on retirement of property, plant and equipment

0

Impairment losses

21

Other

3

Profit before income taxes

25
660

Income taxes - current

214

Income taxes - deferred

50

Profit264
395- 19 -