RAKUSSUSTAINABILITY REPORT 2023

Contents

RAKUS SUSTAINABILITY REPORT 2023

Value Creation

ESG (Strengthening the Foundation for Value Creation)P02

MISSION / VISION / VALUE

P16Approach to the Environment

P03

Value Creation Trajectory

P17

Approach to Social Challenges

P04

Message from the President

P18

Initiatives for Investment in Human Capital

P07

Materiality

P23

Organizational Structure and Governance Policy

P24

Establishment of Nomination and Compensation
Committee/Skills Matrix

P25

Policy on Remuneration for Officers /Attendance at Meetings of the Board of Directors
and the Audit & Supervisory Board

Business Strategy for Value Creation
P09

RAKUS at a glance

P10

Business Model and Performance of CloudBusiness

P11

Features and Growth Strategy of Cloud Business

P12

Main Services of Cloud Business

P14

Business Model and Performance of IT Outsourcing Business(RAKUS Partners)

P29

Financial Data

Medium-Term Management Targets

P30

Capital Structure and Dividends

P15

P26

Promoting Fair Business Activities

P27

Directors/Audit & Supervisory Board Members

Data Section

Company Information
P31

Company Outline & Group Structure01

Editorial Policy
This report contains the business, financial, and ESG information of RAKUS, and has been issued for the purpose of improving corporate value by engaging in dialogue with shareholders,investors, and other stakeholders about its contents.
Websitehttps://www.rakus.co.jp/en/
IR Information
https://www.rakus.co.jp/en/irnews/[Contact]

ir@rakus.co.jp
Scope of Report
This report covers RAKUS Co., Ltd. and its consolidated
subsidiaries within and outside Japan as well as some otheraffiliates. The report applies to the period from April 2022 toMarch 2023.
* It also includes some information outside that period.

Performance Forecasts
Forecasts of performance contained in this report are
determined based on information available at the time. Actual
results may differ due to a variety of factors.

Value Creation

RAKUS SUSTAINABILITY REPORT 2023

MISSION / VISION / VALUEVISIONto ‘Become a Company Representing Japan’

VALUE
Values that RAKUS Upholds (Management Philosophy)
VALUE 01

VALUE 02

VALUE 03

VALUE 04

VALUE 05

Fulfillment

NurtureImprovement

Integrity

Evolution

MISSION
We constantly help companies grow their businessby providing IT services.

02

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03

Value Creation Trajectory
Changes in Net Sales and Important Milestones

(Millions of yen)

Providing services that ‘Raku’ (ease) inefficient operations
and achieving sustainable business growth

27,399Since its founding 2000, the RAKUS Group has achieved steady growth with its two business2020

pillars of its Cloud business and IT outsourcing business. In the Cloud business, we provide multiple services focused on entering markets in which we can win, particularly services that solve
2017

operational challenges that we have felt in operating our own business. The IT outsourcing busi-

20,629ness leverages the expertise gained when operating an IT engineering school, building a strong
business model to train people without engineering experience who show potential to become
IT engineers and dispatch them to companies.

15,387
11,608

2009

6,408
2011

2001

8,743

2013

2008

4,932

2007

FY2001.3 FY2002.3 FY2003.3 FY2004.3 FY2005.3 FY2006.3 FY2007.3 FY2008.3 FY2009.3 FY2010.3 FY2011.3 FY2012.3 FY2013.3 FY2014.3 FY2015.3 FY2016.3 FY2017.3 FY2018.3 FY2019.3 FY2020.3 FY2021.3 FY2022.3 FY2023.3

November 2000

RAKUS was established

April 2011

Subsidiary established in the US

February 2018

Blaynmail consolidated as subsidiary

April 2001

IT engineering school business started
Cloud business started

May 2014

Subsidiary established in Vietnam

July 2018

January 2015

All shares of US subsidiary were soldIT outsourcing business was succeeded to RAKUS
Partners

May 2002

IT outsourcing business started

December 2015

Listed on Tokyo Stock Exchange Mothers

March 2009

IT engineering school business was discontinued

March 2021

Changed to First Section of the Tokyo Stock Exchange

April 2022

Transition to Tokyo Stock Exchange Prime Market

July 2023

RAKUS HRTech consolidated as subsidiaryValue Creation

RAKUS SUSTAINABILITY REPORT 2023

04

Message from the President
Background to the identification of materiality
We have a Long-Term Vision to ‘Become a Company Representing Japan’. Sustainablebusiness growth and corporate value improvement in the mid- and long-term areimportant to achieve this.
This time, when transferring to the Prime Market of the Tokyo Stock Exchange in April
2022, we once again looked at the external environment surrounding RAKUS and the
management resources found at RAKUS. Then, we identified materiality as challenges
that we must address to create new value and achieve an affluent society. By addressing
the materiality, we aim to achieve sustainable business growth and continue to improve
corporate value, thereby achieving our Long-Term Vision.
Through this current process of identifying materiality, we uncovered risks and opportunities in relation to the sustainability of the business. We have started creating anorganization to pursue sustainable improvement in corporate value, strengthening ouradaptability to the changing market environment and customer needs while effectively
and efficiently utilizing resources to appropriately control such risks and opportunities.
The materiality identified this time are not necessarily new or special, but are derived
and stipulated from our reorganization of the initiatives we have taken to date to realize
the RAKUS Mission of “We constantly help companies grow their business by providing
IT services.” We want to continue generating a lot of ‘emotional fulfillment’ through the
future provision of IT services.

Approach to investment in human capital
We see human resources as the source of our competitiveness. Our human resource
strategy aims to harness the abilities and knowledge of each employee to the maximum
extent possible.

Takanori Nakamura President and Representative Director

Value Creation

RAKUS SUSTAINABILITY REPORT 2023

05

We support the career growth of employees by providing training for knowledge

employee motivation through measures including appropriate evaluation and compen-

acquisition and leadership nurturing programs to develop employee skills. Furthermore,sation systems, convening events that encourage communication between employees

we recommend a balanced work style to encourage each employee to undertake volun-

and promoting diversity & inclusion initiatives. By leveraging this diversity, we generatetary learning. By creating an environment that facilitates leaving work on time andnew ideas and perspectives and increase our responsiveness to change and flexibility

taking paid leave, employees will be able to carve out their own time and acquire theas a company.

skills they think they need. We believe it accelerates the pace of individual growth,leading to the Company’s growth.
We are also focused on employee engagement. We are strengthening recruitment toFurthermore, we conduct ‘strategic office work’ to enable people who join the Company to successfully perform in the workplace as fast as possible. This is because webelieve that on-the-job training (OJT) through close face-to-face communication andexpand the organization, with midcareer hires accounting for more than 90% of newworking in an environment where it is easy to ask questions accelerate the spread of theemployees. Having a workforce comprised of employees from diverse backgrounds is a

corporate culture and increase the speed of an individual’s growth. On the other hand,strength of the Company. We work towards increasing the sense of belonging andwe flexibly incorporate work styles that changed with the COVID-19 pandemic, nimbly
revising the framework, and pursuing the best work styles even while the Company is
growing, such as by introducing a system of optional work from home on Wednesdays.

RAKUS’ ideal culture
RAKUS’ ideal culture is summarized in 11 individual Leadership Principles (P. 19). These
Leadership Principles are a code of conduct and mindset that leaders must have andthey express the value system that RAKUS holds dear in words.
(i) Take ownership(vii) Do what needs to be done(ii) Aim for overall optimization(viii) Accept others’ views(iii) Treat people with sincerity(ix) Tolerate failure(iv) Continue learning and growing(x) Communicate ideas with words(v) Start small and grow big(xi) Focus on results(vi) Consider the cost-benefit performance
By appropriately splitting the organization according to operations, even when rapidly
growing the business, we have created an environment that enables each team toconcentrate on its own mission. On the other hand, we are one organization, and it isValue Creation

RAKUS SUSTAINABILITY REPORT 2023

06

important to act from a company-wide perspective. Each employee has ownershipthe ways to operate the officer compensation system, which we want to be in addition toawareness and thinks about the Company’s growth by cooperating to achieve the overall

the ample discussion at the Board of Directors.

target while fulfilling their own role.

In future, in light of the Committee’s report, we aim to increase the transparency andContinuing to learn is also an important element. In the rapidly changing IT sector,

fairness of the decision-making process for matters such as the composition of officers

past experiences of success do not necessarily have currency forever. That is why, we

and the ways to operate the compensation system. We also aim to enhance the motiva-

would like everyone regardless of their position to pursue their own growth and to taketion of the management team and secure talented personnel.

the trouble to constantly acquire new knowledge and skills.
In order to increase the probability of success of new initiatives, it is necessary tohave a toleration for failure while focusing on results. RAKUS values the process of he approach for this year, which is the turning point for MediumT
Term Management Targets

continuing to thoroughly rotate the PDCA cycle towards the goal. Failures occur even if
reaching a logical hypothesis in circumstances where there are uncertainties, so learn-

Under the current Medium-Term Management Targets, we have achieved more thaning from such failures leads to facing the next challenge and the achievement of growth.

30% sales growth for the past two consecutive years and are making steady progress

Even in regard to personnel evaluation, our evaluation is more focused on the initiatives

towards achieving the targets. In light of the results, we raised the lower bound for theto verify the hypothesis than the failure itself. By fostering a culture of toleration forfive-year sales CAGR target from “26%-30%” to “27%-30%.”

failure, we believe we can achieve business growth while maintaining a sense of momentum even if we grow the size of our business.
We want to spread a corporate culture of each employee making decisions and acting

In the fiscal year ended March 31, 2023, the pace of acquiring new orders for a service declined with the inadequate function of the cycle for nurturing personnel due tothe large recruitment as part of our active investment. However, we were able to solvein accordance with the Leadership Principles, and to build a foundation for our goal forthat issue by the end of the fiscal year ended March 31, 2023 through measures such as

RAKUS to become ‘a Company Representing Japan’.

quickly strengthening recruitment at management level and enhancing the enablement
function, while advancing the business proficiency of members.

Nomination and Compensation Committee

In light of this experience, our policy will be to continue expanding the organization forbusiness growth, but in future, we will not simply target an increase in the number of

We established an optional Nomination and Compensation Committee from June 2023.

personnel but conduct recruitment activities with an awareness of an environment that

By appointing an Outside Director as the Chairperson, we aim to increase management

enables each individual to appropriately demonstrate performance.

transparency and build an even better governance structure.

In addition, up to now, our thinking has been to condone lower profits to achieve high

The Company does not have a stock-based compensation system for officers at

sales growth. However, from this year, the fiscal year ending March 31, 2024, we will main-present. This is because many of the current officers already hold a certain level of thetain sales growth towards the final year for the Medium-Term Management Targets, while

Company’s stock and there has been no problem with so-called agency problem. How-focusing on increasing profits by also putting greater emphasis on investment efficiency.

ever, we anticipate a time in future when people with few stocks will become officers
and the Nomination and Compensation Committee will be actively utilized in relation to

As a result, we aim to achieve our target for the fiscal year ending March 31, 2026 of
10 billion yen in profit attributable to owners of parent.

Value Creation

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07

Materiality
RAKUS’ cherished thought: Let’s recoup time to think about the future
Japan is facing a declining birthrate and workforce shortage, so it is important to increase the productivity of limited personnel. RAKUS aims to improve work efficiency through the cloud and IT technologies, to be of assistance in solving such social challenges.
Even so, what RAKUS is really providing is ‘emotional fulfillment.’ If it is possible to think more about the future with the time generated from increased efficiency,
we must be able to create a more affluent society. We, who provide such services, continue to think and act as a team concerning how to generate more time efficiency
ourselves.

Expanding the development of excellent service

Securing and nurturing
diverse and talented personnel

Providing opportunities
for successful performance and growth

Providing stable service

We can provide the best

Personnel able to understandWe actively provide personnel,

We continuously provide

service by completely captur-

customers’ operation andwhich is our growth base, withstable and reliable service by

ing the issues and concerns

provide a service are thepositions in which they canbuilding strong security.

through an understanding ofimportant growth base forsuccessfully perform andWe continue to gain trust as acustomers’ operations.

RAKUS.

opportunities where they will

service contributing to growthBased on this approach,

Service and personnel are

feel a real sense of growth.

that supports the operations

RAKUS is promoting greater

the two wheels that drive

We achieve a spiral of expand-of many customers.

digitalization of society

business growth.

ing opportunities for success-through the development offul performance and growth

excellent service.

through business growth.

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08

Materiality
The RAKUS Group has arranged the risks and opportunities regarding the mid- and long-term corporate value and the sustainability of business activities to create
new value and for sustainable growth to realize an affluent society, and has identified materiality.

Process of identifying materiality

STEP

1

We create materiality candidates as topics for important risks andopportunities concerning the sustainability of the business model inlight of aspects such as the Mission, the Long-Term Vision, the external
environment surrounding the Company, and dialogue with investors.

STEP

2

We create draft ‘materiality’ based on
discussion with relevant internal parties
such as internal directors and the persons
responsible for each business.

STEP

3

We identify ‘materiality’ based on discussion by the Board of Directors.

External environment surrounding important management resources
Diversification of sense of values
and work styles

Important management resources

Risk
Decline in engagement
Decline in labor productivity

Opportunity
 ecure personnel with diverseS
backgrounds

Technological evolution andcommodification
Risk
Decline in profit opportunities due to thecommodification of provided services
Increased risk from cyber attacks

Opportunity
Increase in the opportunities to provide
various services by leveraging
cutting-edge technologies

Progress in the declining birthrate
and increasingly aged population
Risk

Technology

Human resources

Customer baseStaying on top of the latest technological trends
and tirelessly incorporating needed technology
leads to sustainable growth.
It is important to have the technologicalcapabilities to provide services that are stable,
low cost, and secure.

Retaining talented employees and expanding
the organization is essential for achieving
sustainable growth. Many employees are
midcareer hires with diverse experiences andspecializations, and continuously increasing
the number of employees is a source of ourcapability to grow.

Addressing customer needs gives services
competitive advantage, so expanding thecustomer base is an important part of ourstrategy. We have a large customer basecompared to competitors. This enables us to
identify detailed customer needs, which
contributes to the enhancement of our services.

Partners

Finance

System partners and sales agents play a majorrole in accelerating growth. Our partner basecontinues to increase as we grow, as does ouralliances with large companies that have highname recognition.

Maintaining and expanding a stable and solid
financial base is key for achieving sustainablegrowth. We have continuously turned a profit
since our second fiscal year in business. Thishas grown our equity capital, enabling us tocontinue to make large investments.

Future market contraction
Competing for personnel who havespecializations

OpportunityIncreased need for improvement in
operational efficiency and greater
productivity

Increased awareness of challenges
for the global environment
Risk
Listing up companies that are subject
to negative screening in the capital
markets and as potential customers

OpportunityIncreased opportunities to be selected
due to new evaluation criteria

Business Strategy for Value Creation

09

RAKUS SUSTAINABILITY REPORT 2023

RAKUS at a glance
Making IT technology ‘Raku’ (easy) to use for corporate development.
We provide assistance in solving customer issues and business growth with cloud-based services and IT engineers.
Number of employees

IT Outsourcing
Business

Cloud BusinessWe plan, develop and operate
in-house various cloudservices (SaaS) that contribute to improving operational
efficiency of companies andincreasing added value.

Net sales

We nurture IT engineers anddispatch them to projects as“Raku Raku Partners, supporting everyone involved in IT.”FY2023.3

27.3

billion yen

Operating profit

Cloud Business1.6 billion yen

1,213

Ordinary profit

IT Outsourcing Business1.6 billion yen

859

Profit attributable toowners of parent

Back-office Departments

1.2 billion yen

Main Services of Cloud Business

125

IT Outsourcing Business
March 31, 2023

Service Name

Service Overview

Service Start Date

Cumulative Number ofCompanies Using the Service

Raku Raku Seisan

Expense settlement system

July 2009

12,978

Raku Raku MeisaiElectronic billing system

August 2013

6,278

Raku Raku Hambai

Sales management system

October 2008

2,926

Hai Hai Mail

Email marketing service

May 2007

10,354Mail Dealer

Email sharing management system

April 2001

8,031

March 31, 2023
Service Overview

Service Features
Number of Engineers

Hire inexperienced
people, train them as
IT engineers, anddispatch them

IT engineers×Specialize intechnical expertise×
Dispatch andstationed-type781

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RAKUS SUSTAINABILITY REPORT 2023

10

Business Model and Performance of Cloud BusinessBusiness Model of Cloud Business
Monthly fee

Cloud services (SaaS) that contribute to improving operational efficiency

Corporate
customer
Cycle to sustainably expand subscription sales
New orders increase

Investments for increasing
customer satisfaction

Satisfaction increase
Continuous improvement ofoperational efficiency

Strengthening
investment in growth

Net sales increase

Low churn rate

Changes in Sales, Segment Income, and Subscription Sales Ratio (Millions of yen)
91.9%

91.7%

91.5%

91.7%

Segment income

16,716

Subscription sales ratio

12,298
6,725

8,952
3,568

1,261

898

FY2019.3

FY2020.3

FY2021.3

Sales by Service

91.8%
22,276

Sales

1,227

1,215

FY2022.3

FY2023.3

Our Cloud business offers subscription services to help companies improve operational efficiency through digitalization. The
business model enables stable sales growth by accumulating
new subscribers.
Maintaining a low churn rate is key in this model, so in order tokeep the rate low, we constantly work to improve customer satisfaction, target segments with low business failure rates, and haveestablished a pricing structure that makes it easy to continue using
the service.

(Millions of yen)

FY2019.3

FY2020.3

FY2021.3

FY2022.3

FY2023.3

Raku Raku Seisan

2,579

3,935

5,559

7,658

10,343

Raku Raku Meisai

326

552

1,177

2,260

3,735

Raku Raku Hambai

556

770

1,124

1,624

2,298

Email distribution services

1,410

1,573

1,963

2,367

2,672

Mail Dealer

1,538

1,732

1,979

2,178

2,430

314

390

493

626

796

6,725

8,952

12,298

16,71622,276

OthersTotal of Cloud businessBusiness Strategy for Value Creation

RAKUS SUSTAINABILITY REPORT 2023

11

Features and Growth Strategy of Cloud Business

1

Offers subscription-based cloud services that
contribute to improving operational efficiency

Growth Cycle of Cloud Business
Strengthen
investment ingrowthDevelop
functions23Best-of-breed focused
Aims for both profitability and high sales growthby managing a portfolio of multiple services

Incur

Increasesales deficit

Turn

Decrease
SG&A

profitConduct PMF*
activities

Expandinvestment
capacity

Improve profit
marginIncrease sales

profitDecline in cost of
sales ratio

High growth phase

New service development

Increase
Decline ingrowth rate

Maturity phase

Profit4

Strives for high sustainable sales growth byincreasing the number of services

Add new services and strengthen investment in growth* PMF: Product Market Fit

Achieve sustainable growth by increasing services
We offer multiple best-of-breed services that improve efficiency of specificoperations, with the aim of taking the top share in each service area in the
Cloud business.
The biggest feature of our growth strategy is that we simultaneously roll out
different services during their growth phase. If a new service achieves its productmarket fit, we invest in SG&A to help it grow big. During the “high growth phase,”
the gross profit margin improves as sales increase and the service turns a profit.
By investing the operating profit of services that have reached the “maturity
phase” in new services, we generate profit and achieve sustainable growth for thebusiness overall.
We will leverage the expertise we have gained from launching and growing a large
number of cloud services over many years. Thus, we will strive to achieve sustainablebusiness growth and expand our service lineup through M&As and others.

Service Improvement Cycle

Customer
Reasonfor losing
orders
Needs

Improve and increase order and retention rates

Cloud service
Sales team

Feedback

Development
team

Feedback

Reason for
churn
Needs

Customersuccess teamBusiness Strategy for Value Creation

RAKUS SUSTAINABILITY REPORT 2023

12

Main Services of Cloud Business
Raku Raku Seisan

Raku Raku HambaiStandardization and improved efficiency in sales management andall other management operations

Dramatically reduces time and costs in settling expenses!
File an expense claim
from a computer or
smartphone•Register customer information •Create
estimates •Process orders •Report projects•Manage sales •Process delivery

I can check it without having
to deal with errors in claims!

ApplicantApproverNon-compliant
with rules

Accounting personnel

With Raku Raku Seisan,
you can carry out a wide
range of accounting
processes including
making journal entries,
requesting payments, andcreatingbank transfer data.

Automatically blocks expense claims non-compliant with the rules!

Sales
manager

Sales rep

Inventory management
Bill processing
Procurement processing

Select a file

CSV

Sends out inaccordancewithrecipients’
needsBill data.csv

PDF

Automates issuance of awide range of
documentation

PDF
Uploaddocument data

Bills
Deliverystatements
Payment
statements
Receipts

Order DB
Sales repwith databases andworkflows

Accountant

Inventory DB

SalesmanagerBill DB

Buyer

Accountant

Raku Raku Kintai

Eliminates the time-consuming work of printing, sealing, and sending bills

STEP3

Improves
efficiency

We develop systems that combine the web database and workflows for all sales management operations.
We improve operational efficiency by automating routine work and sharing information in real time.

Raku Raku Meisai

STEP2

Project DB
Estimate DB

Buyer

We achieve the flow for claiming, approving and settling settlement expenses on a web browser andreduce the paperwork and number of management hours. We also improve the efficiency of operationsin the accounting department by preventing errors in the claim details and non-compliance with therules through the system.

STEP1

Customer master data

Complex sales management tasks

Compliantwith rules

Download fromthe website

Makes tedious attendance management easierSend
attendance
information

Attach to thenotification email

Postal mailEmployee
Fax

Just by entering document data such as bills and delivery statements, bills are issued according to theneed for receipt. This eliminates the work of printing and sealing in-house and also reduces postage costs.

Salary calculation
is easier

Apply from PC or
smartphone

Download
attendance
management

Gather and manage attendance information

Labor representative

Collects information related to attendance and automatically creates theinformation necessary for salary calculation and attendance management

Central management of employee attendance information. It can flexibly accommodate employment types
specific to individual companies, thereby improving efficiency of attendance management operations.

Business Strategy for Value Creation

RAKUS SUSTAINABILITY REPORT 2023

13

Main Services of Cloud BusinessEasy to introduce and start using quickly! Internal AI chatbot

Improves operational efficiency through central management of emails
Don’t know which emails have been
responded to and which have not…

Provides at-a-glance response status of
who has responded to which inquiry

Internal inquiries

Response teamInternal inquiries

Employee A
Not responded

Not responded
Not responded

Responded

Not responded

Not responded

Not responded

Not responded

Responded

Information
systemsHR
Responded

Not responded

Not responded

Chatbot reduces
man-hours using
automated responses

Access frombrowser

Not responded

Customer

Employee B
General affairs

Accounting

Before introduction

Central management of inquiries via email and telephone, chat and LINE. Sharing information withinteams is simplified and also prevents human error in the lack of response and duplicate responses
through systems.

Hai Hai Mail

An AI chatbot that improves efficiency of internal response to inquiries. The chatbot’s automatedresponse cuts out wasteful operations and improves productivity.

Raku Tel
Cloud CRM system for efficient inquiry and electronic appointment management

Tool for improving efficiency of email marketing
Calculates email delivery rate, open rate, and click-through rate after sending emails
Also measures conversion rate through integration with external servicesa

Improves
mailinglists

After introduction

CRM

Cycle of delivery, measurement, and improvement
grows potential customers and contributes to sales

SenderSend to everyone or by group

Opened!

CTI

Cloud

sales management system

phone system

Automatic call diversion (ACD)
Automatic voice response (IVR)
Call recording and monitoring

Recipient

Email magazine (bulk email)Segmented and scheduled emails

Triggered emails and visit notifications

Sends out the same contents in bulk

Sends individualized contents

Sends an email when your website is visited

We achieve improved efficiency for attracting customers and sales promotions via email with simple
operations and functions as well as generous support. Able to continuously improve email marketing by
being able to analyze the results and measure the effectiveness.

Inquiry response (inbound)Electronic appointments (outbound)
FAQ management

Site A

Site B

Site C“Raku Tel” is a cloud-based CRM system that supports the telephone response operations of call centersand help desks.

Business Strategy for Value Creation

14

RAKUS SUSTAINABILITY REPORT 2023

Business Model and Performance of IT Outsourcing Business(RAKUS Partners)
Sales and Segment Income

Making it easy for everyone involved in IT
Unlike registration-type personnel dispatching,personnel hired as employees of RAKUS Group are dispatched.

(Millions of yen)

Sales

5,122

Segment income

3,912

Assign tocustomer’s
workplace

Hiringinexperienced
personnel

Training

Leverage expertise gained from our
IT engineering school business

2,655

3,089

Dispatching

2,017◦Web development◦Infrastructure◦Machine learning,◦Quality Assurance
etc.

206

276

330

351

440

FY2019.3

FY2020.3

FY2021.3

FY2022.3

FY2023.3

Learning CenterFeatures of RAKUS Partners’ Engineer Dispatching Service
Careful hiring of excellent personnel

Contribute to solving IT issues by hiring and training inexperienced
IT engineers and dispatching them to client companies
In the IT outsourcing business, we find and recruit people without engineering experience
who show potential to become engineers from applicants wishing to change careers. Leveraging the expertise in nurturing engineers gained from the IT engineering school we operated
when founded, we train IT engineers specializing in each field such as web development,
infrastructure, machine learning and quality assurance and dispatch them ready-to-work at
corporate customers.
In addition, we also conduct career support for IT engineers. By supplying IT engineers inshort -supply, we contribute to solving IT issues at companies.

STRENGTH

1・Unlike registration-type personnel dispatching, personnel hired as
employees of RAKUS Partners are dispatched.
・Since they are employees and not simply registered members, attendanceis stable.

Nurturing through a total of 480 hours of fully practical training
STRENGTH

2
STRENGTH

3

・We provide three months of specialized training in specialist fields such as
web development, infrastructure, machine learning and quality assurance・We introduce fully practical training on the skills required by customers

Dispatching personnel aligned with the customers’ needs
・We select engineers with an understanding of the strengths of each employee
・We promptly dispatch the appropriate personnel even when the customer
has a need for more people

Business Strategy for Value Creation

15

RAKUS SUSTAINABILITY REPORT 2023

Medium-Term Management Targets
1

Five-year sales CAGR 27%–30%2

Net income for FY2026.3: 10 billion yen or more

3

Net assets as of 2026.3: 20 billion yen or more

Changes in Net Sales and Its Targets(Millions of yen)

50,839–57,134
CAGR
27%–30%

Our target is to achieve 27–30% sales CAGR. We invest actively overthe first 4 years to meet the sales target. Then, we aim to achieve
over 10 billion yen of net income in the final year by pursuing

27,399operational efficiency.

20,629Note:The target will be revised if we acquire businesses.

Effects we would like to bring about by strengthening andexpanding the balance sheet

4,077

4,932

FY2016.3

FY2017.3

6,408
FY2018.3

8,743

FY2019.3

11,608FY2020.3

15,387

Strengthen investment
in growth
FY2021.3

FY2022.3

FY2023.3

FY2026.3

・Reduction in borrowing costs by enhancing our creditworthiness・Mitigation of the impact of impairment generated by large or
multiple business acquisitions
Note:Increase in the amount of goodwill we can handle

Our policy is to actively pursue M&A opportunities in thecloud (SaaS) business domain to contribute to our sales
and profit in the mid- and long-term.

Revise the organizational structure for strengthening the
Raku Raku brandWe have achieved increased recognition of the Raku Raku brand andexpanded our customer base through business growth of “Raku Raku
Seisan” and “Raku Raku Meisai.” This time, we aim for further improvement in the productivity and profitability of the business overall, leveraging brand awareness and the customer base to the maximum extent
possible by integrating functions that span services, while maintaining
best-of-breed type initiatives in the Raku Raku brand services.

Corporate Officer
Head of Raku Raku CloudBusiness Headquarters

Koji Yoshioka

ESG (Strengthening the Foundation for Value Creation)

RAKUS SUSTAINABILITY REPORT 2023

16

Approach to the Environment
The RAKUS Group has contributed to reducing environmental impact through the provision of IT services. The RAKUS Group established an environment policy inDecember 2022, which once again stipulated the approach to preservation of the environment through business activities.

Environment policy
Basic approach
The RAKUS Group contributes to solving global environmental issues such as by providing
support to achieve paperless operations and promoting digitalization in society through business activities with the provision of IT services.

Environmental impact data
The RAKUS Group has a policy to appropriately disclose business activity-related environmental data that we can obtain ourselves. We strive for deeper understanding of our initiatives
through constructive dialogue with stakeholders.

Unit

FY2021.3

FY2022.3

FY2023.3

Electricity (Total Energy Consumption)

GJ

2,868

4,213

5,662

Paper

kg

2,935

4,562

5,141

Scope2

t-CO2

335

499

667

Scope3*

t-CO2

304

429

705

Scope2+3

t-CO2

639

928

1,372

t-CO2/
billion yen

0.550

0.603

0.455

INPUT

Details of initiatives
Preservation of the environment through the development and provision of services
We provide support for mitigating the impact of climate change and realizing the construction ofa low carbon society through the development and provision of services that contribute tosolving customers’ issues.
Promoting environmental education
We aim to increase employee awareness of the environment and work on initiatives to conserve
resources and energy.

OUTPUT

CO2 emissions

Compliance with environmental laws and regulations
We comply with all types of environmental laws and regulations and take appropriate action.
Information disclosure and dialogue
We contribute to the realization of a sustainable society by disclosing information about our own
environment-related initiatives and through dialogue with internal and external stakeholders.

Per net sales*Only Categories 6 (Business travel) and 7 (Employee commuting)ESG (Strengthening the Foundation for Value Creation)

RAKUS SUSTAINABILITY REPORT 2023

17

Approach to Social Challenges
Cloud Business

IT Outsourcing BusinessIn the Cloud business, we improve the efficiency of working hours by providing services that
support greater operational efficiency of corporate customers. Furthermore, we also contributeto the reduction of paper usage by customers through the transition of operations previously
done on paper to cloud services.

In the IT outsourcing business, we also contribute to solving the issue concerning the shortageof IT engineers, for which there is growing demand, by training IT engineers, while supporting
the digitalization of companies through the dispatch of IT engineers.

Improved efficiency of working hours

Raku Raku Seisan
Example with 100 employees(per year)

Raku Raku Meisai
Example with 500 documents per month
Assumes 1.5 minutes per document

Total: 1,191 hours

Total: 271 hours

Total: 750 min.

237 hours

77

250 min.

261 hours
694 hours%
improvementin efficiency

8 hours
35 hours

229 hours

Paper-based
expense settlement

Raku Raku Seisan

250 min.
250 min.

Total: 30 min.

96%
improvementin efficiency

IT engineer

Sending paper documents Raku Raku Meisai■Printing out ■Placing seals■Sealing envelopes■Claim filing ■Approval ■Accounting

IT engineers are stationed for each project to makethe customer’s work easier.

■System operations

HiringGives commands/orders
Education/training

Raku Raku Hambai

Paper reduction (yearly)

Dispatch contract

Example of sales management operations(per month)
Total: 220 hours

24 hours
124 hours
32 hours
40 hours

Excel

Total: 22.3 hours

90%
improvementin efficiency 1.3 hours

11 hours
10 hours

Raku Raku Hambai■Data recording/posting ■Handover/sharing■Documenting ■Monthly closing

Personnel request

Reduction of

Reduction of

millionsheetsmillionsheets36

22*Calculated based on data as of March 2023
*Reduction calculated based on the following concepts
Raku Raku Seisan: 1 expense account processed = 1 sheet
Raku Raku Meisai: 1 electronic bill issued = 1 sheet

Customer

RAKUS Partners(Dispatch receiver)(Dispatch sender)

ESG (Strengthening the Foundation for Value Creation)

RAKUS SUSTAINABILITY REPORT 2023

18

Initiatives for Investment in Human Capital
RAKUS’ Human Resources Strategy
 ecruiting and training diverse personnel and providing a greatR
workplace environment
The decline in the workforce due to a declining birthrate and increasingly aged population andthe diversification of the sense of values and lifestyles has resulted in the need for increased
productivity through progress in digitalization and the expansion of diverse employment
opportunities as well as the provision of workplace environments that enable the adequate
demonstration of abilities.
Rapid change continues in the business environment, including technological innovation,even in the IT sector where the RAKUS Group is growing its business.
In such circumstances, we set our materiality as “securing and training diverse and talented
personnel” and “providing opportunities for successful performance and growth” to achieve
high levels of business growth in a sustained manner.
We work to create a framework that enables the growth of each individual and to maximize
the organization’s performance by actively recruiting diverse personnel irrespective of genderor age, etc., while providing opportunities and an environment for employee growth and encouraging the voluntary growth of individual employees.

Structure for promoting the human resources strategy
We have established a specialist organization that specializes in “recruitment,” “training andnurturing,” and “evaluation” and work towards upgrading their respective operational levels.
Through these initiatives, we have been able to achieve recruitment focused on midcareer hires
who have diverse perspectives and abilities and to create an organization that flexibly responds
to change in the business environment.
In addition, RAKUS Leadership Principles (code of conduct) are taken as the focus of initiatives for management and organically link to respective activities. By improving the growth ofindividual employees and organization performance, we encourage the fostering of a corporate
culture that aims for sustained business growth.

We want to achieve employee success and to be seen as an attractive
company from both within and outside the company!
We believe it is important to respect the diversity and increase theability of each employee and to become a company where there
is motivation and pride in working so we can aim for sustained
improvement in corporate value.
The RAKUS Group promotes growth and improvement in
employees’ willingness to take on challenges based on the
Human Resources Policy of “Aiming to create an environment
where employees can work with confidence over the long-term,
while aiming to optimize the organization, systems, and developDirector,
ment of capabilities so that each person is able to contribute to
Head of Businesstheir utmost ability in their respective roles to the team, theAdministration Headquartersorganization and the profit of the Company.” We strive for recruitTakahiro Miyauchi ment, training, allocation, career development, compensation
design, workplace environment and organization creation to enable each individual toachieve employee success.
In the fiscal year ended March 31, 2023, we recruited more than 700 people to the Groupoverall and improved compensation to strengthen the organizational structure. In addition,
we have expanded measures to strengthen organizational capacity such as in training withenhancement of onboarding for new employees, management training for mid-level
management and business leadership training programs for manager class.
For the working environment, we have enhanced the “RAKU Smile System” to achieve
flexible work styles for the child-rearing generation, and introduced shift work systems inmonthly and daily units that enable choice of diverse work styles and also introduced asystem of optional work from home on Wednesdays.
In addition, to evaluate the utility of each measure, we regularly conduct various internalsurveys. These include organizational diagnostics for each department, employee engagement surveys, career-related questionnaires, and practice surveys of the RAKUS Leadership
Principles for management. We leverage continuous human resources management while
conducting internal fact-finding surveys from both quantitative and qualitative perspectives.
The RAKUS Group will continue to actively invest in human capital, and aim to improve
the productivity and competitiveness of the organization while hoping to grow to become ‘aCompany Representing Japan’ so that we are seen as an attractive company from bothwithin and outside the Company through the achievement of employee success.

ESG (Strengthening the Foundation for Value Creation)

RAKUS SUSTAINABILITY REPORT 2023

19

Initiatives for Investment in Human Capital
RAKUS Leadership Principles
Our Leadership Principles are a code of conduct, highlighting the mindset that leaders of RAKUS should embrace. Leaders correctly understand these principles,
which enables them to judge and act with a well-balanced approach from multiple perspectives. Each principle may appear obvious, but when put together create an
unrivalled company. This gives us confidence that RAKUS will become ‘a company representing Japan’ in future.

VISIONto ‘Become a Company Representing Japan’

RAKUS Leadership Principles
Guiding Principles upon which RAKUS Leaders Rely
Take ownership

Aim for overall optimization

Treat people with sincerity

Continue learning and growing

Start small and grow big

Consider the cost-benefit performance

Do what needs to be done

Accept others’ views

Tolerate failure

Communicate ideas with words

Focus on results

VALUE
VALUE 01

VALUE 02

VALUE 03

VALUE 04

VALUE 05

Fulfillment

NurtureImprovement

Integrity

Evolution

MISSION
We constantly help companies grow their business by providing IT services.

ESG (Strengthening the Foundation for Value Creation)

RAKUS SUSTAINABILITY REPORT 2023

20

Initiatives for Investment in Human Capital
Recruitment and training initiatives

Measures for nurturing personnel

In regard to recruitment, we convey the state of RAKUS through activities such as Company
briefings, technology events and casual interviews, working towards being chosen by people
with a greater affinity for RAKUS. After joining the Company, we provide support to enablepeople to quickly demonstrate their strengths through orientation on joining the Company,
welcome meetings, OJT and training introduced in each business department.
In regards to training, we clarify the target attributes for respective roles by hierarchy andoccupation in the class definition guides and prepare a training program. The evaluation
system consists of appropriate evaluation and feedback of respective employees from the two
perspectives of competency (actions that lead to outcomes) and performance (outcomes). We
foster a desire for growth and support the achievement of self-transformation through regular
1 on 1 meetings.

Education and training program
Role

By roleBy theme

By business department andoccupation

SystemDetails

Training by hierarchyand occupation

Develop abilities such as the knowledge and skills required by eachhierarchy and occupation.

1 on 1 meetings

We encourage training and career development while securing thepsychological security of members.

Manager onboarding
interviews

We conduct interviews with management members twice in the firsthalf-year after joining the Company to enable them to experience
RAKUS culture and quickly demonstrate their capabilities.

Career questionnaire

Each employee reports on their own career aspirations and we
support their future career formation.

Survey of RLP (RAKUS
Leadership Principles)
practice

We conduct regular reviews to ascertain if RLP, the RAKUS code of
conduct for management, is achieved in practice in everyday operations to encourage the fostering of the corporate culture.

Management review

We visualize the state of management by managers and encourage
initiatives to build better management and workplace environment.

In-house recruitment

We implement this for various newly established posts and duties
associated with the expansion of the organization and encourage
autonomous career formation of employees and foster their desire.

360-degree survey

We visualize the strengths and weaknesses of each employee forthe important evaluation indicator of competency not only throughfeedback and advice from superiors but also from colleagues, otherrelated departments and others.

Employee awards

・Group President Award: An organization (section, team, project,etc.) that contributed greatly to the growth of the RAKUS Group・Challenge Award: An individual or organization who took on thechallenge of a highly uncertain initiative and achieved an outcome
or a “good failure” that will become food for the future・Special Award: An individual or organization that steadily contributes to the RAKUS Group in an unsung role

Drafting of strategies and tactics

Practical use ofinnovation

Manager

Support for career building
Support for development ofmembers’ abilities

Nurturing of managers

Application
ability

LeaderLeadership fundamentals

Development of competency

Basic skills

Staff
OJT trainer program

Mental health andhuman rights
D&I

Training by businessdepartment andoccupation

ESG (Strengthening the Foundation for Value Creation)

RAKUS SUSTAINABILITY REPORT 2023

21

Initiatives for Investment in Human Capital
Evaluation system

We achieve flexible work styles aligned with an individual’s work-life balance

We have installed an evaluation system based on two axes of “competency” and “performance”
to correctly evaluate employees and to provide support that leads to the next step.
In addition to the outcomes during the evaluation period, we value the type of behavior thatgenerated such outcomes. We create an environment able to take on the challenge of initiatives
not only from a short-term perspective but also from a long-term perspective by appropriately
rotating the activities cycles through these two axes.

Activities

1 on 1 meetings

Monthly Shift/Timely Shift

Ability to select shift work by month or day without being
asked the reason, to support flexible work styles.

Supporting in-house circle
activities

Evaluation
Competency evaluation

Performance evaluation

Evaluation based on ‘the expected
demonstrated behavior’ corresponding to
the role versus the ‘behavior that led to theoutcomes’ that was demonstrated during
the evaluation period

Evaluation based on the initially established‘targets’ and the ‘normal quality andquantity of operations’ versus the‘outcomes’ created in the evaluation period

Corporate culture

Details

Eligible employees can select “work hours” and “evaluation style” to respond to the flexible work styles of thechild-rearing generation.

Sick Leave

Target setting
Feedback

SystemRAKU Smile (Selective-typework system for the childrearing generation)

A system for taking leave for personal injury or illness of theindividual or family members residing in the same household. Five days per year separate from annual paid leave.
We encourage interaction between employees andsubsidize activity expenses for activities that build relationships of trust.

ColumnAt RAKUS Partners, which is growing its IT outsourcing
business, people without engineering experience undergo
about 3-months of training by full-time instructors to be
trained as IT engineers. They are also encouraged to obtain
qualifications to improve their skills, and in the fiscal year
ended March 31, 2023, 230 engineers acquired qualifications
in areas such as machine learning, AWS-related and national

A feature of RAKUS corporate culture is the coexistence of venture thinking and a stable
management base.
We have achieved efficient work styles and clearly delineate between working and notworking by ‘thinking logically and being thorough about PDCA.’
In addition, given that we have been joined by many midcareer hires, we believe it necessary
to share time and space and have close communication to achieve a high growth rate, so select‘strategic office work.’ On the other hand, we have introduced a selective-type work system forshift work and the child-rearing generation and put our efforts into creating an easy to work
environment.

qualifications.
We also put effort into career support for engineers and

RAKUS Partners
Director

Daisuke Mori

introduced a mentor system from 2016 as part of these initiatives. Even after our trainedengineers are dispatched to companies, we provide opportunities to consult with moresenior engineers, and this is embedded in the RAKUS Partners’ culture. Some mentors
provide coaching and training, and we also pay allowances. Apart from this, the person
responsible for career support also conducts regular interviews and we support theachievement of each engineer’s career vision.

ESG (Strengthening the Foundation for Value Creation)

22

RAKUS SUSTAINABILITY REPORT 2023

Initiatives for Investment in Human Capital
HR-related data (Consolidated)
Item

Number of employees

Unit

PeopleHR-related data (Non-consolidated)

Category

FY2021.3

FY2022.3

FY2023.3

Overall

1,230

1,688

2,197

Men

889

1,214

1,556

Women

341

474

641

Ratio of female managers

%

3.3

4.7

5.7

Ratio of employees with disabilities

%

1.48

2.12

2.36

Average number of years ofcontinuous service

Average age

Years

Age

Item

Number of employees

Ratio of female managers
Average number of years ofcontinuous service

Unit

PeopleCategory

FY2021.3

FY2022.3

FY2023.3

Overall

714

956

1,253

Men

490

673

874

Women

224

283

379

3.7

4.5

4.9

Overall

3.0

2.7

2.7

Men

3.2

2.8

2.8

%

Overall

3.1

2.7

2.7

Men

3.3

2.8

2.9

Women

2.4

2.5

2.4

Women

2.7

2.5

2.4

Overall

32.5

32.3

32.3

Overall

31.4

30.9

30.9

Men

33.4

33.3

33.1

Men

31.9

31.6

31.5

Women

30.5

30.0

30.3

Women

30.0

29.3

29.5

Average age

Years

Age

Turnover rate

%

6.3

9.6

13.0

Percentage of paid leave taken

%

82.3

87.6

93.1

Hours

20.3

19.9

19.8

Wage difference between men
and women*

%

76.9

77.8

82.2

Turnover rate

%

8.9

10.0

13.1

Percentage of paid leave taken

%

81.4

85.6

91.5

Hours

15.3

15.2

14.6

Overall

35.8

42.7

56.6

Men

19.0

30.9

43.7

Ranking of Companies that are the Best Workplaces by Great Place to Work® Institute

Women

100

100

100

Overall

92.9

100

100

・“Best Company” Japan (large companies) 2023 (6th consecutive year)
・“Best Company” Asian Region (large companies) 2022

Men

100

100

100

Women

90.9

100

100

Monthly average overtime
working hours

Ratio of childcare leave taken

Ratio of persons who return towork after taking childcare leave*Ratio of female wages to male wages%%

Monthly average overtime
working hours

External assessment

ESG (Strengthening the Foundation for Value Creation)

23

RAKUS SUSTAINABILITY REPORT 2023

Organizational Structure and Governance Policy
The RAKUS Group’s basic philosophy of corporate governance is to have a lasting organizational structure that enables accurate decisions to be made in response tochanges in the social and economic environment. We believe that making accurate decisions with efficiency, justice, transparency, fairness, and promptness benefit all
stakeholders including shareholders, business partners, and employees.

Basic Corporate Governance System and Reasons for Adoption
Overview of Corporate Governance System
RAKUS is a company with an Audit & Supervisory Board. The Audit & Supervisory Board Members
attend important meetings such as the Board of Directors meetings, and monitor decision-making
processes and the performance of executive tasks from an independent standpoint. The Board of
Directors is chaired by President and Representative Director Takanori Nakamura. It holds meetings
at least once per month as a rule, where it formulates corporate management policies and plans,confirms the status of executive tasks, deliberates and decides legal matters and important
corporate management-related matters, and monitors the performance of each Director’s duties.
The Internal Audit DIvision conducts internal audits of our divisions and subsidiaries on matterssuch as legal compliance and operational efficiency, and offers concrete advice and suggestions on
making improvements.

Percentage of Outside Audit &Supervisory Board Members

Percentage of Outside Directors

3
6

2
3

50%

66%

Organizational Structure
General Meeting of Shareholders
Appoint Dismiss

Reasons for Adopting Corporate Governance System
We adopted a corporate governance system that we believed was the best system for achieving ourcompany’s purpose at the time. Therefore, we will revise the system as needed in response tochanges in the social and legal environment.
RAKUS ensures that it is run soundly and transparently by ensuring the proper functioning of themonitoring and oversight functions of corporate management by the Audit & Supervisory Board
Members, which includes Outside Audit & Supervisory Board Members. We also appoint Outside
Directors to improve the monitoring and oversight of decision of business execution and corporate
management by the Board of Directors. We have decided to adopt the company with the Audit &Supervisory Board because we determine that the most appropriate governance system is one
based on monitoring and oversight by Outside Directors that are independent from executives, theAudit & Supervisory Board Members, and the Audit & Supervisory Board.

Appoint Dismiss

Board of Directors
Six Directors(three of which are
Outside Directors)
SelectRemoveOversee

ReportConsult

Nomination andCompensation Committee

Audit

ReportAudit & Supervisory Board
Three Audit & Supervisory
Board Members(two of which are Outside Members)

ReportRepresentative Director

Internal Audit Division

Collaborate

Appoint Dismiss

Instruct
ReportOverseeControl

Business Execution DivisionInternal
audit

Audit

Advise/guide

Accounting Auditor

Attorneys, etc.

ESG (Strengthening the Foundation for Value Creation)

Establishment of Nomination
and Compensation Committee
Purpose of Establishment
We established it for the purpose of ensuring fairness, transparency, and objectivity in procedures relating to nomination andcompensation, etc. of Directors and Audit & Supervisory Board
Members and further enhancing the corporate governance system.

The Board of Directors as a whole is comprised of officers with consideration given to the balance of their knowledge andexperience in company management, business strategy, risk management, finance and accounting, personnel training andtechnology, needed to verify and prepare the mid- and long-term management strategy.

Officer Skill Matrix (As of June 23, 2023)
Corporate
Business Strategy &Management &MarketingManagement Strategy

Director

Outside Director

Composition of the Committee
It is composed of three or more members (Directors and Audit &Supervisory Board Members) appointed by a resolution of theBoard of Directors, and at least half of them shall be Outside
Directors and Audit & Supervisory Board Members notified to theTokyo Stock Exchange as Independent Officers.
A Chairman shall be appointed from among Independent
Outside Directors by a resolution of the Board of Directors.

24

Skills Matrix

Role of the Committee
Upon consultation with the Board of Directors, deliberates, decides
and reports to the Board of Directors on mainly the following matters.
(1) Policies and procedures for the appointment and dismissal ofRepresentative Director and the nomination of candidates for
Directors and Audit & Supervisory Board Members(2) Draft proposals for the appointment and dismissal of Directors
and Audit & Supervisory Board Members to be submitted to theGeneral Meeting of Shareholders(3) Matters concerning the succession plan for the Representative
Director(4) General policy for determination of the compensation of
Directors and Audit & Supervisory Board Members(5) Draft proposal on compensation of Directors and Audit &Supervisory Board Members to be submitted to the General
Meeting of Shareholders

RAKUS SUSTAINABILITY REPORT 2023

Audit &
Supervisory
Board Member

Takanori
Nakamura●●

Shinichiro
Motomatsu●●

Takahiro
Miyauchi●Kenji Ogita●●

Yukihiko
Kunimoto●●

Legal & Risk
Management●●

Reika Saito●

Toshihiro
Nojima●Koji MatOutside Audit & suoka
Supervisory
Board Member Natsuro
Abe

●
●

Finance &Accounting●

DigitalTransformation &Technology

●

●

●

●

Qualifications●

Attorney at law●●●

Human Resources &Human Resource
Development

Certified Public
Accountant
Certified Tax Accountant

ESG (Strengthening the Foundation for Value Creation)

Policy on Remuneration for Officers

RAKUS SUSTAINABILITY REPORT 2023

Attendance at Meetings of the Board of
Directors and the Audit & Supervisory Board

RAKUS prioritizes aligning the interests of shareholders and investors and those of the top
management. The current top management team, not including outside officers, hold a certain
number of the Company shares. Thanks to the growth of our businesses, the continuous
increase of dividend income and the improvement of corporate value have led to an increase in
the value of shares held. This means that the responsibility and results of management arelinked to assets held. On the other hand, also from the perspective of protecting minority
shareholders, we established the “Nomination and Compensation Committee” as an advisory
panel to the Board of Directors from June 2023, and the Company is taking greater fairness,transparency, and objectivity in the compensation decision-making process.
In addition, monetary remuneration of officers is set at within the scope of about 3.5 times theaverage annual wage of employees, which serves to boost motivation to improve corporate value
while at the same time maintaining a level that does not produce too wide of a gap with employees.

Attendance at Meetings ofthe Board of Directors
Representative Director

Takanori Nakamura

Director

Shinichiro Motomatsu

Director

Takahiro Miyauchi

Outside Director(Millions of yen, unless otherwise stated)

Category

Directors(Excluding Outside
Directors)
Audit & Supervisory
Board Members(Excluding Outside
Audit & Supervisory
Board Members)

Total remuneration by typeNo. of eligible
Total
Performance- Non-monetary
officers
Fixed
Compenremuneration
linkedremuneration,(Persons)
sationCompensationetc.

Kenji Ogita

Outside Director

Yukihiko Kunimoto

Outside Director

65

62

-

3

3

4

-

-

8

-

-

28/28 meetings-*
27/28 meetings
28/28 meetings

Full-time Audit &Supervisory Board Member

28/28 meetings

13/13 meetings

28/28 meetings

13/13 meetings

28/28 meetings

13/13 meetings

1
Outside Audit &Supervisory Board Member

828/28 meetings

23/23 meetings *Koji Matsuoka
Outside Officers

Attendance at Meetings of
the Audit & Supervisory Board

Reika Saito

Toshihiro Nojima
4

25

5

Outside Audit &Supervisory Board Member

Natsuro Abe
The details of the total “non-monetary remuneration, etc.” by type of remuneration, etc. takes account of the provision ofcompany housing within a commutable distance to the office where work is executed, with the amount after deducting a levy
for use of the company housing based on the Company’s designated criteria from the rent for such company housing taken to
be the amount of non-monetary remuneration.

* Director Takahiro Miyauchi was appointed as Director after the 23rd Annual General Meeting of Shareholders held in June
2023, so the number of times he attended the meetings in the previous fiscal year is not shown. In addition, Outside Director
Reika Saito was appointed as Director after the 22nd Annual General Meeting of Shareholders held in June 2022, so thenumber of times she attended the meetings after her appointment is shown.

ESG (Strengthening the Foundation for Value Creation)

RAKUS SUSTAINABILITY REPORT 2023

26

Promoting Fair Business Activities
The RAKUS Group promotes fair business activities to remain a company trusted by society. We aim to improve awareness of respect for human rights and compliance through measures such as education and training of all employees and officers.

Human Rights Policy
Basic approach
The RAKUS Group understands that its business activities could have a direct or indirect impact
on human rights and has prescribed the “RAKUS Human Rights Policy” to ensure the respect of
the human rights of all peoples involved in the business, and strives for initiatives that respecthuman rights.
In addition, we adhere to the “United Nations Guiding Principles on Business and Human
Rights” and respect international standards relating to human rights including the “International Bill of Human Rights” (International Declaration of Human Rights and International
Covenants on Human Rights), and the “International Labour Organization (ILO) Declaration on
Fundamental Principles and Rights at Work.”

Scope of application
This policy applies to all employees and officers of the RAKUS Group. In addition, we also expect
all business partners involved with the Company to understand and support this policy.

Details of initiatives
・We recognize that initiatives in our business activities for matters such as discrimination,harassment, and occupational health and safety are important elements of our responsibility
for human rights.
・In the process of implementing this policy, we aim to improve the initiatives for respect ofhuman rights through dialogue with relevant stakeholders inside and outside the Company.
・We undertake appropriate education and training for the effective implementation of this policy for the entire RAKUS Group.
・We will take appropriate remedial action and strive to correct the situation in the event that it
becomes clear that business activities of the RAKUS Group have had or have promoted anegative impact on human rights.

Compliance
Basic approach
The RAKUS Group recognizes that compliance by all employees and officers with laws andrules such as internal regulations, and social norms goes without saying, and that the thoroughimplementation of appropriate activities based on the high standards of ethics that society
expects of us is the foundation of company management.

Details of initiatives
・To promote an understanding of the code of ethics and compliance regulations, etc. weregularly conduct education, training and enlightenment activities as well as constant self
checks of behavior based on “compliance self-check sheets.”
・We have enacted a whistleblowing system concerning organizational and individual breachesof laws and regulations, preparing a structure that aims for the quick detection and correction of breaches of laws and regulations.
・We have stipulated our “Basic Policy on Antisocial Forces,” and clarified our policy in relation
to antisocial forces that threaten the order and safety of civil society.
・We clearly state our approach to bribery in our code of ethics and compliance regulations
and aim for thoroughness in anti-corruption.

ESG (Strengthening the Foundation for Value Creation)

RAKUS SUSTAINABILITY REPORT 2023

27

Directors/Audit & Supervisory Board Members (As of June 23, 2023)
President and Representative Director

Takanori Nakamura
April 1996
September 1997
January 2000
November 2000

Outside Director◦Born January 27, 1973 ◦Shares held: 62,202,700

Joined NIPPON TELEGRAPH AND TELEPHONE CORPORATION
Established Digital Network Service GSK
Established Infocast Co., Ltd.; Director
Established RAKUS; President and Representative Director (current position)[Important concurrent positions]
Chairman, RAKUS Vietnam Co., Ltd.
Director, RAKUS Light Cloud Co., Ltd.
Director, RAKUS Partners Co., Ltd.
Director, RAKUS Mirai Co., Ltd.
Director/Head of RAKUS Cloud Business Headquarters

Shinichiro Motomatsu
April 2001
July 2012
April 2021
June 2021
February 2023

◦Born March 3, 1974 ◦Shares held: 8,814,300

Joined RAKUS
Corporate Officer
Corporate Officer, Head of Cloud Business Headquarters
Director, Head of Cloud Business Headquarters
Director, Head of RAKUS Cloud Business Headquarters (current position)

March 2013
June 2014
June 2023

March 1986
June 2005
June 2005
July 2005
September 2005
March 2007
February 2015
August 2020

◦Born May 22, 1968 ◦Shares held: 51,300

Joined RAKUS
Corporate Officer
Director, Head of Business Administration Headquarters (current position)◦Born July 6, 1958 ◦Shares held: 64,000

Joined Toyo Information Systems Co., Ltd. (currently TIS Inc.)
Joined Digital Garage, Inc.
Director, Ibex&rims Inc.
Director, DG Incubation, Inc.
Representative Director, DG & Partners, Inc.
Director, TransWARE CO., LTD. (currently QUALITIA CO., LTD.)
Outside Director, RAKUS (current position)
Representative Partner, Antelope LLC (current position)

Reasons for selection
Kenji Ogita was selected to be an Outside Director due to his experience serving as Director atother companies, and his ability to use his broad insight to give feedback and advice, oversee
from a neutral and objective standpoint, and make holistic decisions based on his unique career.
Outside Director

Yukihiko Kunimoto
April 1984
January 2006
June 2020

Director/Head of Business Administration Headquarters

Takahiro Miyauchi

Kenji Ogita

◦Born August 21, 1960 ◦Shares held: 0

Joined Japan Associated Finance Co., Ltd. (currently JAFCO Group Co., Ltd.)
Established Independents Co., Ltd. (currently Kips Co., Ltd.);
Representative Director (current position)
Outside Director, RAKUS (current position)

Reasons for selection
Yukihiko Kunimoto was selected to be an Outside Director due to his ability to oversee themanagement of RAKUS and give advice on a wide range of management issues from an
out-of-the-box perspective based on his extensive experience and keen insight as the headof another company.

ESG (Strengthening the Foundation for Value Creation)

RAKUS SUSTAINABILITY REPORT 2023

28

Directors/Audit & Supervisory Board Members (As of June 23, 2023)
Outside Director

Outside Audit & Supervisory Board Member

Reika Saito◦Born February 7, 1980 ◦Shares held: 0*Reika Saito’s name is recorded as Reika Koumori in the family registry.

September 2007 Joined Ogasawara & Konno Law Firm
October 2008
Joined the International Legal Affairs Bureau, Ministry of Foreign Affairsof Japan (with limited term)
October 2009
Returned to Ogasawara, Konno & Rokugawa Law Firm
February 2012
Joined the Dispute Settlement Center for Nuclear Damages (part-time)
September 2012 Assigned overseas to Israel and Egypt
January 2018
Returned to Ogasawara, Konno & Rokugawa Law Firm
February 2021
Partner, Amita International Law Firm
June 2022
Outside Director, RAKUS (current position)[Important concurrent positions]
Outside Audit & Supervisory Board Member, Grooves Inc.
Director, Forum on Future Vision
Reasons for selection
In addition to her professional knowledge and experience as an attorney-at-law, Reika Saito has
experience as an Outside Audit & Supervisory Board Member at another company. The Company
therefore nominated her for Outside Director, judging that she can provide supervision from an
independent and objective standpoint and advice from a legal perspective on overall management.
Full-time Audit & Supervisory Board Member

Toshihiro Nojima
April 1997
January 2000
November 2000
August 2008
June 2011◦Born June 29, 1973 ◦Shares held: 2,160,000

Joined The Yasuda Fire and Marine Insurance Co., Ltd.(currently Sompo
Japan Partners Inc.)
Established Infocast Co., Ltd.; Director
Established RAKUS; Director
Director and General Manager, Accounting & Finance Department
Audit & Supervisory Board Member (current position)[Important concurrent positions]Auditor, RAKUS Vietnam Co., Ltd.
Audit & Supervisory Board Member, RAKUS Partners Co., Ltd.
Audit & Supervisory Board Member, mj Capital Inc.
Audit & Supervisory Board Member, RAKUS Mirai Co., Ltd.

Koji Matsuoka
April 1997
November 2000
March 2005

◦Born August 5, 1974 ◦Shares held: 509,000

Joined Asahi & Co. (currently KPMG AZSA LLC)
Audit & Supervisory Board Member, RAKUS (current position)
Representative, Matsuoka CPA Office (current position)[Important concurrent positions]
Outside Director, ROCKWAVE Co., Ltd.
Outside Audit & Supervisory Board Member, Asahi Life Science Co., Ltd.
Outside Audit & Supervisory Board Member, Aisawa Construction Ltd.
Outside Audit & Supervisory Board Member, Adachi Co., Ltd.
Audit & Supervisory Board Member, Dream Factory Inc.
Director and Audit & Supervisory Committee Member, HouseFreedom Co., Ltd.
Reasons for selection
A certified public accountant, Koji Matsuoka was selected to be an Outside Audit & Supervisory
Board Member due to his considerable capabilities and experience in overseeing the performanceof Directors’ duties and ensuring transparency, efficiency, and impartiality in decision making.
Outside Audit & Supervisory Board Member

Natsuro AbeMay 1998
August 2002
October 2004
April 2009
June 2014
October 2021
October 2021

◦Born July 19, 1975 ◦Shares held: 64,000

Joined Andersen Consulting Ltd. (currently Accenture Japan Ltd.)
Joined Y’s table corporation
Director, Yume no Machi Souzou Iinkai Co., Ltd. (currently Demae-can Co., Ltd.)
Representative Director, Y’s & partners Co., Ltd. (currently PLATFORM
HOLDINGS Co., Ltd.) (current position)
Audit & Supervisory Board Member, RAKUS (current position)
Representative Director, ANDB Co., Ltd. (current position)
Representative Director, RESPa Co., Ltd. (current position)

Reasons for selection
Natsuro Abe was selected to be an Outside Audit & Supervisory Board Member due to his
experience serving as Director at another company, and his ability to use his broad insight togive feedback and advice, oversee from a neutral and objective standpoint, and make holistic
decisions based on his unique career.

Data Section

29

RAKUS SUSTAINABILITY REPORT 2023

Financial Data
Net sales

(Millions of yen)

Gross profit

27,39911,60814,03015,3875,753

FY2019.3

FY2020.3

FY2021.3

FY2022.3

FY2023.3

FY2019.3

7,662

FY2020.3

10,3571,468

FY2021.3

FY2022.3

FY2023.3

FY2019.3

EBITDA (Millions of yen)

Profit attributable to owners of parent (Millions of yen)

4,346

2,936

1,809

2,158

1,561

FY2019.3

FY2020.3

FY2022.3

Total assets/Net assets

(Millions of yen)）

14,073

Total assets
Net assets

6,142

11,471
7,039

4,593

FY2019.3

FY2023.3

7,842

9,548

FY2021.3

FY2022.3

FY2023.3

FY2021.3

1,656

FY2022.3

FY2023.3(yen)

FY2021.3

FY2022.3

5.62

FY2023.3

FY2019.3

FY2020.3

7.03

5.95

4.41
FY2021.3

FY2022.3

Cash Flows

FY2023.3(Millions of yen)

Net cash provided by (used in) operating activities

4,271

Net cash provided by (used in) financing activities

1,120

5,192

FY2020.3

FY2020.3

FY2020.3

1,578

EPS(Earnings per share)

1,274

1,078

799

Net cash provided by (used in) investing activities

11,7008,617

FY2019.3

1,174

16.20

2,263
1,018

FY2021.3(Millions of yen)

3,898

18,777

20,6298,743

Operating profit

(Millions of yen)

2,170

939
△463 △141△481 △195△432 △303

FY2019.3

FY2020.3

FY2021.3△11△877
FY2022.3

△295

△699
FY2023.3△348

Data Section

30

RAKUS SUSTAINABILITY REPORT 2023

Capital Structure and Dividends
Capital Structure(As of March 31, 2023)(As of March 31, 2023)

No. of Shares Held

Shareholding
Ratio*

Takanori Nakamura

62,202,700

34.33%The Master Trust Bank of Japan, Ltd. (Trust Account)

12,835,400

7.08%

Yoshifumi Matsushima

9,340,000

5.15%

Hideyuki Inoue

9,040,400

4.99%

Shinichiro Motomatsu

8,814,300

4.86%

Fumihiko Asano

8,000,000

4.41%

Custody Bank of Japan, Ltd. (Trust Account)

4,866,800

2.69%

Noritsugu Ogawa

2,970,000

1.64%

ML PRO SEGREGATION ACCOUNT(Standing proxy: BofA Securities Japan Co., Ltd.)2,479,300

1.37%

RAKUS Employee Shareholding Association

2,443,900

1.35%

Shareholder Name

Others
2.25%
Financialorganizations
10.75%
Foreigncompanies, etc.
14.95%Top Ten Major Shareholders

Officers, etc.
51.28%

Individuals andothers
20.77%*Shareholding ratio is calculated after deducting treasury shares (1,610 shares).

Dividend
Dividend Policy
RAKUS recognizes that providing returns to shareholders is the most important issue formanagement and has established a basic policy of paying continuous and stable dividends
while maintaining internal reserves required for conducting business and strengthening themanagement base in order to achieve profitable growth.
We will implement dividends of surplus aiming to provide a consolidated dividend payout
ratio exceeding 10% based on appropriate distribution of profit according to the expansion of
performance. We also set the lower limit of annual dividends per share at the previous year’slevel in principle to continually increase dividends with consideration for continuity and stabilityof dividends.

Changes in Dividends (Yen)

1.60

1.75

1.90

1.95

FY2022.3

FY2023.3

1.10

0.15

0.153

0.218

FY2013.3

FY2014.3

FY2015.3

0.30
FY2016.3

0.487
FY2017.3

0.725

FY2018.3

Note:Figures after retroactively adjusting to reflect stock split

FY2019.3

FY2020.3

FY2021.3

Company Information

31

RAKUS SUSTAINABILITY REPORT 2023

Company Outline & Group Structure

Company Name

RAKUS Co., Ltd.

Foundation

November 1, 2000

Capital378,378,000 yenGroup Companies

RAKUS Light Cloud Co., Ltd.

Number of Employees
as of the end of March 2023

Cloud-based software service provider

100%

IT engineer dispatching
RAKUS Partners Co., Ltd.

100%
IT engineer career change support

From April 1 of each year to March 31 of the following year

Fiscal Year

Shareholding
Ratio

Business

Consolidated: 2,197

RAKUS HRTech Co., Ltd.

Cloud-based software service provider

100%

Non-consolidated: 1,253

RAKUS Mirai Co., Ltd.

Production and sales of food products andoperation of restaurants

100%

RAKUS Vietnam Co., Ltd.

Cloud service development

100%

Stock Listing

Tokyo Stock Exchange Prime Market

Securities Code

3923

Shareholder Registry
Administrator

Mitsubishi UFJ Trust and Banking Corporation

Auditing Firm

KPMG AZSA LLC

Office Locations

Sapporo Sales Office

Nagoya Sales OfficeOsaka Head Office
Fukuoka Sales Office

RAKUS Co., Ltd. Headquarters
RAKUS Light Cloud Co., Ltd.
RAKUS Partners Co., Ltd.
RAKUS HRTech Co., Ltd.
RAKUS Mirai Co., Ltd.
Hiroshima Sales Office

RAKUS Vietnam Co., Ltd.