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

Corporate Governance Report
Last Update: September 11, 2024

Artner Co., Ltd.
SEKIGUCHI Sozo, President and CEO
Contact: Tel: +81-6-6445-7551
Securities Code: 2163
https://www.artner.co.jp/
The corporate governance of Artner Co., Ltd. (the “Company”) is described below.

I.

Basic Views on Corporate Governance, Capital Structure, Corporate Profile and Other
Basic Information

1. Basic Views
1. Artner’s No.1 business challenge is steadily improving shareholder value over the long term. So in
addition to expanding our business and ensuring profitability, we want to grow as a “technical partner”
together with our client companies in various industries, as a collective of engineers focused on
developing more and more advanced levels of technical expertise. At the same time, with a constantawareness of what society needs most, and a desire to create a demand for it, we strive for businessefficiency and soundness to help in the sustainable development of the Company.
2. At Artner, we are highly conscious of our social responsibility as a company, so in addition to strictly
observing all applicable laws and regulations, we strive to sustain and develop favorable relationships
with shareholders, with our local community, with all of our client companies, and with all employees.
3. We are committed to further strengthening our internal control and risk management efforts through theapplication of business management systems (including internal control systems) to enable flexible
adaptation to changes in the business environment. In this way, we will constantly improve our business
management. Artner also will promptly disclose relevant information both inside and outside theCompany and enhance business transparency.
[Reasons for Noncompliance with Some of the Principles of the Corporate Governance Code] Updated【Supplementary Principle 1.2.5】
The Company allows only shareholders of record (registered shareholders) to exercise their voting rights at
a general meeting of shareholders. The Company does not allow institutional investors (beneficial owners)
who own the Company’s shares in street names to attend a general meeting of shareholders to exercise theirvoting rights or ask questions. The Company will consider the need to amend this policy.
【Supplementary Principle 2.4.1】
The Company pursues the philosophy of being an Engineer Support Company that develops talent. As partof its effort to promote diversity and inclusion in talent management under the Medium-Term Business Plan,
the Company has been offering greater career opportunities to its workers of foreign nationality, retirementage, and women. The Company has also been hiring to middle-management positions mid-career workers
found to have skills and competence that are required for such positions and are comparable to those ofcareer workers qualified for the similar positions.
The Company provides workers with diverse talent development programs with medium- and long-term
implications, including training for women workers, diversity training, and leadership training, formulated
under the Talent Training and Development Guidelines.
The Company has identified the promotion of diversity and inclusion as one of its materiality (material
issues) priorities. The details of our initiatives are disclosed on the Company's website(https://www.artner.co.jp/en/sustainability/management/basic-views/).

-1-

【Supplementary Principle 3.1.3】
Considering stakeholder interests and social issues, as well as their impact on our business management, theCompany has identified eight materiality topics that should be prioritized. Based on our understanding of
the materiality topics we have identified, we are committed to engaging in effective management practices
and business activities to resolve these issues. The Company discloses its initiatives as appropriate. The
Company will consider disclosing its policies related to investment in intellectual property.
The Company’s human capital and sustainability initiatives, including response to the recommendations of
the Task Force on Climate-related Financial Disclosures (TCFD), are posted on its website.
【Supplementary Principle 4.1.3】
The Company recognizes that it is critically important to have in place a succession plan for the President
and CEO and other members of the Executive Team. The Board of Directors is responsible for nominating
successors to these members from among qualified candidates after an extensive scrutiny of theirexperience, knowledge, and expertise in recruiting, training, sales, and administrative functions that support
the Company’s engineer placement business.
Regarding future nominations of successors to the President and CEO, and other members of the Executive
Team, the Nomination and Remuneration Committee, a voluntary advisory board composed of a majority of
Independent Directors, shall deliberate and report to the Board of Directors, thereby establishing a structurewith high fairness, transparency and objectivity under appropriate supervision from the Board of Directors.
【Supplementary Principle 4.2.1】
The remuneration of Directors is performance-based, determined based on their respective positions,
responsibilities, and KPI achievements as well as on the Company’s business performance, to provide themwith an incentive to help achieve medium- and long-term growth of the Company.
The Company will consider the need to offer Directors a stock-based compensation plan, taking into
consideration the composition of total remuneration and the balance between the cash and stock portion ofcompensation.
【Supplementary Principle 4.2.2】
From the perspective of improving our business value in the medium to long term, the Company has
acknowledged the importance of sustainability issues, and established a basic sustainability policy.
The Company has formed the Sustainability Committee, which is responsible for establishing sustainability
policies, targets, and action plans, managing and evaluating progress toward these targets, and deliberating
on individual measures. The Board of Directors manages and supervises the Committee.
【Principle 4.11 Preconditions for Board and Kansayaku Board Effectiveness】
The Company recognizes that members of its board, as a whole, have well-balanced knowledge, experience,and skills necessary to perform their roles and responsibilities. However, the Company recognizes that thecomposition of the board is not sufficiently diverse in terms of gender, international experience, career
history, and age. The Company will take diversity into consideration when selecting candidates for future
Directors.
The Company’s Audit and Supervisory Committee is comprised of three members who have experience inmanaging companies and are well versed in corporate finance, accounting, and legal affairs.
The result of an evaluation of the effectiveness of the Company’s Board of Directors are provided under
Supplementary Principle 4.11.3.

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[Disclosure Based on the Principles of the Corporate Governance Code] Updated【Principle 1.4 Cross-Shareholdings】
The Company does not cross-hold shares of any other listed companies.
Should the Company choose to cross-hold such shares, it will disclose, under Chapter 1: Basic Views on
Corporate Governance, Capital Structure, Corporate Profile, and Other Basic Information of this Corporate
Governance Report, a cross-shareholding policy, results of validating the soundness of cross-held shares,
and the standards under which the Company will exercise its voting rights attached to cross-held shares.
【Principle 1.7 Related Party Transactions】
The Company requires that any transaction between the Company and its Director or its major shareholder
be sanctioned in advance by the Board of Directors in order to safeguard the interests of the Company aswell as the common interests of the shareholders.
【Principle 2.6 Roles of Corporate Pension Funds as Asset Owners】
The Company provides a defined contribution pension plan, under which each eligible employee is
responsible for managing their own assets. As part of assisting employees with their asset-building efforts,
the Company provides new employees with a seminar on the pension plan and encourages them to apply foran employee matching contribution plan.
【Principle 3.1 Full Disclosure】
i. The Company discloses its corporate philosophy as well as its business strategies, plans, and purpose on
its website and in investor briefing materials.
ii. The Company describes its basic views and policy on corporate governance under Section 1: Basic
Views of Chapter 1: Basic Views on Corporate Governance, Capital Structure, Corporate Profile, andOther Basic Information of this Corporate Governance Report.
iii. The Board of Directors and the Audit and Supervisory Committee have the authority over the
remuneration of directors. This authority extends to deliberating and determining the amount of a basic
remuneration and a performance-linked bonus for each director. The remuneration of directors who are
not members of the Audit and Supervisory Committee is determined solely by the Board of Directors,
whereas the remuneration of Audit and Supervisory Committee members is determined by deliberation
among the members of the Committee.
How to determine the policy for determining the remuneration for each individual is set forth in therules concerning the remuneration of directors, resolved by the Board of Directors. The Board of
Directors receives reports that are deliberated by the Nomination and Remuneration Committee basedon the policy for determining the remuneration and within the range of the total amount resolved by theGeneral Meeting of Shareholders, so the Board of Directors deems that the content of the report is inline with the said policy.
The policy for determining the percentage of the amount of remuneration for each individual shall bedecided based on the reports that are deliberated by the Nomination and Remuneration Committee,
comprehensively taking into account the role and contribution status of each director as well as businessperformance.
The basic remuneration is determined based on the amount established for each director position, with
the Company’s business performance, relative weight against employee salaries, and remunerationlevels at other companies taken into consideration. However, if it is not appropriate to pay a
remuneration calculated in such a manner due to a significant decline in the Company’s businessperformance or other factors, the Company reserves the right to reduce the amount of basic
remuneration.
iv. The Nomination and Remuneration Committee deliberates and reports to the Board of Directors on
director candidates who are not members of the Audit and Supervisory Committee after an extensive
scrutiny of their knowledge, experience, and ability necessary to manage the Company’s businessdivisions and day-to-day operations. The Board of Directors then nominates the director candidates.
The Nomination and Remuneration Committee deliberates and reports to the Board of Directors on
director candidates who are members of the Audit and Supervisory Committee after an extensive
scrutiny of their experience, expertise in corporate financing and accounting, practical knowledge on the
Company’s businesses, and general knowledge on corporate management necessary to audit and oversee
the performance of duties by directors who are not members of the Audit and Supervisory Committee.
The Board of Directors then nominates the director candidates.
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v. The Company submits a list of candidates nominated by the Board of Directors under the procedures
described in the preceding item to a general meeting of shareholders for approval.
The Company describes in a supporting document, included in Notices of Convocation for General
Meetings of Shareholders, brief career histories of candidates for Directors who are not members of the
Audit and Supervisory Committee and the reasons for their nomination, as well as those of candidates
for Directors who are members of the Audit Supervisory Committee.
【Supplementary Principle 4.1.1】
Pursuant to relevant laws, the Company has established the “Board of Directors Rules,” which define thescope of matters to be deliberated on by the Board. In addition, the Company’s “Administrative Authority
Rules” and “Division of Duties Rules” define the scope of decision-making authority granted to the Boardof Directors, as well as individual Directors, by type of duty.
【Principle 4.9 Independence Standards and Qualification for Independent Directors】
The Company uses the criteria established by the Companies Act of Japan and the Tokyo Stock Exchange toappoint Independent Directors. The Company will consider the need to establish criteria of its own design.
【Supplementary Principle 4.10.1】
The Company has established the Nomination and Remuneration Committee as an advisory board to theBoard of Directors in order to enhance the fairness and objectivity of the decision-making process of
nominating and determining the remuneration of Directors as well as enhancing corporate governance.
Composed of a majority of Independent Directors, the Nomination and Remuneration Committee elects its
chairperson from among the Independent Directors to ensure its independence. The Nomination andRemuneration Committee, of which Independent Directors are the majority, deliberates on issues from theperspectives of gender and other diversity-related issues as well as skills.
【Supplementary Principle 4.11.1】
The Company’s Articles of Incorporation stipulate that there be 10 or less Directors who are not members of
the Audit and Supervisory Committee and five or less Directors who are members of the Audit andSupervisory Committee. The Company currently has five Directors who are not members of the Audit andSupervisory Committee and three Directors who are members of the Audit and Supervisory Committee.
The Company selects candidates for Directors who are found, after an extensive scrutiny, to be compatible
with its corporate philosophy and business strategy, to be capable of acting fairly and faithfully in the bestinterests of the Company, and to have extensive experience, knowledge, and expertise in recruiting, training,
sales, and administrative functions that support the Company’s engineer placement business.
The Company submits a list of candidates selected in this manner to a general meeting of shareholders forresolution upon the review and approval of the Board of Directors.
The Company has disclosed on its website (https://www.artner.co.jp/en/corporate/company/companyofficer/) a skill matrix for its Directors that shows the scope of knowledge and experience that each of thempossesses.
【Supplementary Principle 4.11.2】
The Company discloses, in Notices of Convocation for General Meetings of Shareholders and its Securities
Reports, information about Directors who are not members of the Audit and Supervisory Committee andwho also hold key management positions at other companies, as well as information about Directors who
are members of the Audit and Supervisory Committee and who also hold such positions.
None of the current Directors of the Company who are not members of the Audit and Supervisory
Committee, nor the current Directors who are members of the Audit and Supervisory Committee, serve as
directors of other companies.
【Supplementary Principle 4.11.3】
The Company periodically evaluates and analyzes the effectiveness of its Board of Directors and discloses asummary of evaluation results on its website.

-4-【Supplementary Principle 4.14.2】
Directors who are not members of the Audit and Supervisory Committee and Directors who are members of
the Audit and Supervisory Committee attend training sessions and external seminars to gain or broaden
knowledge and insights necessary to fulfill their professional responsibilities.
The Company will continue to provide them with information and opportunities for training.
【Principle 5.1 Policy for Constructive Dialogue with Shareholders】
The Company has put the Director and Head of the Corporate Planning and Strategy Division in charge ofIR. The IR and PR Group in the Corporate Planning and Strategy Division coordinates the Company’s IR
activities, including planning and organizing investor briefing sessions and one-on-one meetings, which
serve as a venue for maintaining dialogues with shareholders.
【Implementation of Dialogue with Shareholders, etc.】
Refer to “III. Implementation of Measures for Shareholders and Other Stakeholders, 2. IR Activities” in thisreport and “Home > Sustainability > Governance > Corporate Governance > Dialogue with Shareholders
and Investors” on the Company’s website (https://www.artner.co.jp/en/sustainability/governance/corporategovernance/dialogue/).
【Principle 5.2 Establishing and Disclosing Business Strategies and Business Plans】
The Company briefs investors on its Medium-Term Business Plan and publishes it on the Company’s
website to help shareholders become familiar with the direction that the Company plans to take. The
Medium-Term Business Plan outlines the Company’s management and business strategies and establishes
targets for net sales, operating profit, and the number of engineers to be retained.
In addition, the Company discloses in the Medium-Term Business Plan its basic policies on earnings plans
and capital policies based on its identified cost of capital.
【Action to Implement Management that is Conscious of Cost of Capital and Stock Price】
In part because the Company does not have borrowings, it attaches importance to the cost of shareholders’equity and recognizes it at approximately 8%. The ROE for the fiscal year ended January 31, 2024 exceeded
the cost of shareholders’ equity at 25.3%.
We are working to improve capital efficiency, setting the ROE target at 20% or higher in our Medium-TermBusiness Plan.
To raise the stock price, we intend to increase our profit every year and determine a dividend amount thatwill not fall below the previous year’s amount, based on a payout ratio of 50%. The Company’s PBR at theend of the fiscal year ended January 31, 2024 was 5.50 times. We will make continued efforts to enhance
our IR activities with an aim of increasing the PBR.

-5-

2. Capital Structure
Foreign Shareholding Ratio Updated

Less than 10%[Status of Major Shareholders] Updated
Number of
Shares Owned
2,126,000

Name / Company Name
Sekiguchi Kogyo Co., Ltd.
Artner Employee Stock Ownership Association
Osaka Small and Medium Business Investment and Consultation Co.,Ltd.
The Master Trust Bank of Japan, Ltd. (Trust Account)

Percentage (%)
20.00

817,0487.68

480,000

4.51

246,600

2.32

STATE STREET BANK AND TRUST CLIENT OMNIBUS
ACCOUNT OM02 505002(Standing Proxy: Settlement and Clearing Services Division, Mizuho
Bank, Ltd.)

153,300

1.44

HARIGAE Tomonori

140,840

1.32

Custody Bank of Japan, Ltd. (Trust Account)

117,600

1.10

OKUSAKA Kazuya

115,380

1.08

THE NOMURA TRUST AND BANKING CO., LTD. AS THE
TRUSTEE OF REPURCHASE AGREEMENT MOTHER FUND
(Standing Proxy: Citibank, N.A., Tokyo Branch)

114,700

1.07

IZUMO Hiroyuki

103,300

0.97

Controlling Shareholder (except for Parent Company)－－－

Parent Company

None

Supplementary Explanation―――

3. Corporate Attributes
Listed Stock Market and Market Section

Tokyo Prime Market

Fiscal Year-End

JanuaryType of Business
Number of Employees (consolidated) as of the End of
the Previous Fiscal YearSales (consolidated) as of the End of the Previous
Fiscal Year
Number of Consolidated Subsidiaries as of the End of
the Previous Fiscal Year

Services
More than 1,000
From ¥10 billion to less than ¥100 billion
Less than 10

4. Policy on Measures to Protect Minority Shareholders in Conducting Transactions with Controlling
Shareholder
―――

-6-

5. Other Special Circumstances which may have Material Impact on Corporate GovernanceNot applicable.
II. Business Management Organization and Other Corporate Governance Systems regarding Decisionmaking, Execution of Business, and Oversight in Management
1. Organizational Composition and Operation
Organization Form
Company with the Audit and Supervisory Committee[Directors]
Maximum Number of Directors Stipulated in
Articles of Incorporation
Term of Office Stipulated in Articles ofIncorporation
Chairperson of the Board

15
1 yearPresident

Number of Directors

8

Appointment of Outside Directors

Yes

Number of Outside Directors
Number of Independent Directors (included
above )

3
3

Outside Directors’ Relationships with the Company (1)Name
NOMURA
Ryuichiro
TERAMURA
Yasuhiko
MORII Shinichiro

Attribute

Relationship with the Company*
a

b

c

d

e

f

g

h

i

j

k

From another company
From another company
From another company**

Categories for “Relationship with the Company”“○” when the Director presently falls or has recently fallen under the category“△” when the Director fell under the category in the past
* “●” when a close relative of the Director presently falls or has recently fallen under the category“▲”when a close relative of the Director fell under the category in the pasta. Executive of the Company or its subsidiaries
b. Non-executive director or executive of a parent company of the Company
c. Executive of a fellow subsidiary company of the Company
d. A party whose major client or supplier is the Company or an executive thereof
e. Major client or supplier of the listed company or an executive thereof
f. Consultant, accountant or legal professional who receives a large amount of monetary consideration orother property from the Company besides compensation as a director/kansayaku
g. Major shareholder of the Company (or an executive of the said major shareholder, if the shareholder is alegal entity)
h. Executive of a client or supplier company of the Company (which does not correspond to any of d, e, or f)(the Director himself/herself only)
i. Executive of a company which has worked with the Company to appoint outside directors/kansayaku toeach other’s boards (the Director himself/herself only)
j. Executive of a company or organization that receives a donation from the Company (the Director
himself/herself only)
k. Others-7-Outside Directors’ Relationships with the Company (2) Updated

Name

Membershipof the Audit
andSupervisory
Committee

Designationas
Independent
Director

Supplementary
Explanation of
the Relationship

NOMURA
Ryuichiro

Yes

Yes

Designated as
Independent
Director

TERAMURA
Yasuhiko

Yes

Yes

Designated as
Independent
Director

MORII
Shinichiro

Yes

Yes

Designated as
Independent
Director-8-

Reasons for Appointment
He has been appointed as Outside
Director as he has a wealth ofexperience and expertise gained
from years of service in key roles
and positions at financial
institutions and in corporate
management, and as he is expected
to deliver well-rounded judgments
based on his unique career andprovide impartial and objective
oversight.
He has been also appointed as
Independent Director as he has no
current or past relationships withthe company that might give riseto any conflict of interest withgeneral shareholders.
He has been appointed as Outside
Director as he has a wealth ofexperience and expertise gained
from years of service in key roles
and positions at financial
institutions, and as he is expected
to deliver well-rounded judgments
based on his unique career andprovide impartial and objective
oversight.
He has been also appointed as
Independent Director as he has no
current or past relationships withthe company that might give riseto any conflict of interest withgeneral shareholders.
He has been appointed as Outside
Director as he has a wealth ofexperience and expertise gained
from his career at key positions ata housing equipment and fixtures
manufacturer and as he is expected
to deliver well-rounded judgments
based on his unique career andprovide impartial and objective
oversight. He has been also
appointed as Independent Director
as he has no current or past
relationships with the company
that might give rise to any conflictof interest with generalshareholders.

[Audit and Supervisory Committee]
Committee’s Composition and Attributes of Chairperson
All Committee
Members
Audit andSupervisory
Committee

Full-timeMembers3

Inside Directors
1

Appointment of Directors and/or Staff to
Support the Audit and Supervisory
Committee

OutsideDirectors

Chairperson

03Outside Director

Not appointed

Reasons for Adoption of the Current System
As the Company has in place a full-time member of the Audit and Supervisory Committee, no dedicatedstaffers are assigned to provide administrative assistance to the committee. However, the Internal Audit
Office, which works closely with the committee, assists the committee as needed. In addition, at thecommittee’s request, a staffer is assigned on a temporary basis to provide administrative assistance to thecommittee.
Cooperation among the Audit and Supervisory Committee, an Accounting Auditor, and the Internal Audit
Departments
The Audit and Supervisory Committee and the Internal Audit Office consult with each other and exchange
information and views when preparing an annual audit plan and creating audit reports. This enables them toshare information and conduct audits efficiently. The Audit and Supervisory Committee and the Internal
Audit Office exchange information and views with an external accounting auditor of record in order to havea common understanding of issues subject to audits. They also seek professional advice and guidance fromthe accounting auditor as needed.
[Voluntary Establishment of Nomination and Remuneration Committees]
Voluntary Establishment of Committee(s)Corresponding to Nomination Committee or
Established
Remuneration Committee
Status of Voluntarily Established Committee(s), Attributes of Members Constituting the Committee and the
Chairperson
All
Committee
Members

Full-timeMembers

InsideDirectors

OutsideDirectors

Nomination
andRemuneration
Committee

4

0

1

3

0

0

OutsideDirector

Nomination
andRemuneration
Committee

4

0

1

3

0

0

OutsideDirector

Committee’s
Name
Voluntarily
Established
Committee
Corresponding
to Nomination
Committee
Voluntarily
Established
Committee
Corresponding
toRemuneration
Committee-9-OutsideExperts

Other

Chair
personSupplementary Explanation
The Nomination and Remuneration Committee, chaired by the member of the Audit and Supervisory
Committee, is composed of four members including the President and CEO and three members of the Audit
and Supervisory Committee who are Outside Directors, and will be held at least four times a year. The
Nomination and Remuneration Committee will deliberate and report to the Board of Directors on thefollowing matters in order to enhance the fairness and objectivity of the decision-making process of
nominating and determining the remuneration of Directors as well as enhancing corporate governance.
・ Matters relating to the appointment and dismissal of Directors
・ Matters relating to the succession plan・ Matters relating to the nomination policy and the evaluation criteria for “abilities,
qualifications, experience, and values” based on the nomination policy・ Matters relating to the appropriateness of the remuneration level of Directors
・ Matters relating to the basic policy on the remuneration of Directors and the policy for
determining the remuneration for each individual
The Nomination and Remuneration Committee met four times in the fiscal year ended January 31, 2024.
The attendance of each Director was as follows.
President and CEO
SEKIGUCHI Sozo
4 out of 4 meetings (100% attendance rate)
Outside Director and standing member of the Audit and Supervisory Committee
NOMURA Ryuichiro
4 out of 4 meetings (100% attendance rate)
Outside Director and member of the Audit and Supervisory Committee
TERAMURA Yasuhiko
4 out of 4 meetings (100% attendance rate)
Outside Director and member of the Audit and Supervisory Committee
MORII Shinichiro
4 out of 4 meetings (100% attendance rate)[Independent Directors]
Number of Independent Directors

3

Matters relating to Independent Directors
Not applicable.
[Incentives]
Incentive Policies for Directors

Performance-linked remuneration

Supplementary Explanation
Performance-linked remuneration may be paid to Directors out of up to 2% of annual profits.
Recipients of Stock Options
Supplementary Explanation―――- 10 -

[Director Remuneration]
Disclosure of Individual Directors’
Remuneration

No individual disclosure

Supplementary Explanation
The Company does not disclose the amount of remuneration for individual Directors, but discloses the total
amount in its Securities Reports and business reports.
Policy on Determining Remuneration Amounts
and Calculation Methods

Established

Disclosure of Policy on Determining Remuneration Amounts and Calculation Methods
The amount of remuneration for Directors is determined in accordance with the relevant internal rules. The
total amount of annual remuneration for Directors who are not members of the Audit and Supervisory
Committee should not exceed 200 million yen, as set forth by the resolution adopted at the Ordinary General
Meeting of Shareholders, held on April 27, 2017. The total amount of annual remuneration for Directors
who are members of the Audit and Supervisory Committee should not exceed 30 million yen, as set forth by
the resolution adopted at the Ordinary General Meeting of Shareholders, held on April 27, 2017.
The Board of Directors and the Audit and Supervisory Committee are responsible for deliberating anddetermining the remuneration of the Executive Team, which is composed of a fixed remuneration andperformance-linked remuneration. The remuneration of directors who are not members of the Audit andSupervisory Committee is determined solely by the Board of Directors, whereas the remuneration of the
Audit and Supervisory Committee members is determined by deliberation among the members of theCommittee.
How to determine the policy for determining the remuneration for each individual is set forth in the rules
concerning the remuneration of directors, resolved by the Board of Directors. The Board of Directors
receives reports that are deliberated by the Nomination and Remuneration Committee based on the policy
for determining the remuneration and within the range of the total amount resolved by the General Meetingof Shareholders, so the Board of Directors deems that the content of the report is in line with the said policy.
The policy for determining the percentage of the amount of remuneration for each individual shall bedecided based on the reports that are deliberated by the Nomination and Remuneration Committee,
comprehensively taking into account the role and contribution status of each director as well as businessperformance.
[Supporting System for Outside Directors]
The Company notifies Outside Directors in advance of items on the agenda to be discussed and matters to
be reported on at an upcoming board meeting.

2. Matters on Functions of Business Execution, Auditing, Oversight, Nomination, and Remuneration
Decisions (Overview of the Current Corporate Governance System)
The Company has in place the Audit and Supervisory Committee, and has five Directors who are notmembers of the Audit and Supervisory Committee and three Directors who are members of it.
Board of Directors
The Board of Directors is comprised of eight Directors, five of whom are not members of the Audit andSupervisory Committee and three who are members of the Committee. The Board meets twice a month: at a
mid-month business report board meeting, the members deliberate on the Company’s monthly businessperformance; and at a regular month-end board meeting, they deliberate and decide on matters relating to
the Company’s management plan, as well as significant matters relating to day-do-day business operations.
The Board of Directors met 30 times in the fiscal year ended January 31, 2024. The attendance of each
Director was as follows.

- 11 -

President and CEO
SEKIGUCHI Sozo
30 out of 30 meetings (100% attendance rate)
Director
HARIGAE Tomonori
30 out of 30 meetings (100% attendance rate)
Director
OKUSAKA Kazuya
30 out of 30 meetings (100% attendance rate)
Director
SATO So
29 out of 30 meetings (97% attendance rate)
Director
EGAMI Yoji
30 out of 30 meetings (100% attendance rate)
Outside Director and standing member of the Audit and Supervisory Committee
NOMURA Ryuichiro
30 out of 30 meetings (100% attendance rate)
Outside Director and member of the Audit and Supervisory Committee
TERAMURA Yasuhiko
30 out of 30 meetings (100% attendance rate)
Outside Director and member of the Audit and Supervisory Committee
MORII Shinichiro
30 out of 30 meetings (100% attendance rate)
Compliance and Risk Management Meeting
The Company convenes Compliance and Risk Management Meetings once a month, attended by the
President and CEO and other Directors who are not members of the Audit and Supervisory Committee,
Directors who are members of the Committee, and division and department heads. In these meetings,
members discuss policies and actions to ensure that all officers and employees of the Company abide bylaws and the Company’s Articles of Incorporation, and draw up the Risk Management Guidelines.
Sustainability Committee
The Company convenes the Sustainability Committee four times a year, attended by the President and CEO
and other Directors who are not members of the Audit and Supervisory Committee, Directors who aremembers of the Committee, and division and department heads. The members hold discussions to promoteand manage the progress of issues and initiatives related to sustainability.
Audit and Supervisory Committee
The Audit and Supervisory Committee is comprised of three Outside Directors and meets twice a month.
Directors who are members of the Committee also attend board meetings and other important internal
meetings. The Committee provides impartial and independent oversight of the Company’s corporate
management, based on the audit standards as well as the audit policy and plans established by theCommittee.
Nomination and Remuneration Committee
The Nomination and Remuneration Committee, chaired by a member of the Audit and Supervisory
Committee, is composed of four members including the President and CEO and three members of the Audit
and Supervisory Committee who are Outside Directors, and will be held at least four times a year. The
Nomination and Remuneration Committee will report to the Board of Directors on theappointment/dismissal and remuneration of Directors in order to enhance the fairness and objectivity of thedecision-making process of nominating and determining the remuneration of Directors as well as enhancing
corporate governance.
External Accounting Auditor
The Company employs KPMG AZSA LLC as its accounting auditor. The Company has no conflict ofinterest with the accounting firm or with the firm’s managing partners who conduct accounting audits of theCompany.
Names and accounting firms of certified public accountants who have conducted accounting audits of theCompany
NAKAHATA Takahide, designated limited liability employee and managing partner of KPMG AZSA LLC
KOMATSUNO Satoru, designated limited liability employee and managing partner of KPMG AZSA LLC

3. Reasons for Adoption of the Current Corporate Governance System
The Company has in place the Audit and Supervisory Committee in order to enhance the effectiveness of its
auditing, oversight, and corporate governance functions, as well as to achieve greater managementtransparency and increase its enterprise value.
- 12 -

III. Implementation of Measures for Shareholders and Other Stakeholders
1. Measures to Vitalize General Meetings of Shareholders and Ensure Smooth Exercise of Voting
Rights by Shareholders
Supplementary Explanations
Allowing Electronic Exercise of
The Company allows its shareholders to exercise their voting rights via
Voting Rights
the Internet.
Participation in a Platform for theElectronic Exercise of Voting
Rights and Other Initiatives to
The Company participates in the electronic voting platform operated byEnhance Environment for
ICJ, Inc.
Institutional Investors to Exercise
Voting Rights
Provision of Notice (or Summary
The Company prepares an English-language translation of the Notice (orof Notice) of the General
Summary of Notice) of Convocation, which it posts on its website at
Shareholders Meeting in English
https://www.artner.co.jp/en/ir/.
The Company posts Notices of Convocation for General Meetings of
Other
Shareholders on its website at https://www.artner.co.jp/en/ir.
2. IR Activities
Supplementary Explanations
Preparation and Publication ofDisclosure Policy
Regular Investor Briefings for
Individual Investors
Regular Investor Briefings forAnalysts and Institutional
Investors

Posting of IR Materials on
WebsiteEstablishment of Department
and/or Manager in Charge of IR

The Company posts its “Disclosure Policy” on its
website at https://www.artner.co.jp/en/ir.
The Company holds investor briefing sessions three
to four times a year, either in person or online, toshare its management policy, financial results, andbusiness forecasts with individual investors.
The Company holds an investor briefing session
twice a year, either in person or online, to share its
management policy, financial results, and business
forecasts with financial analysts and institutional
investors.
The Company posts to the IR section of its website
its Non-consolidated Financial Results, Timely
Disclosure Information, Securities Reports, Noticesof Convocation for General Meetings ofShareholders, Supplementary Explanation Materials,
IR Reports, Annual Reports, and Materials from
Investor Briefings.
The IR and PR Group in the Corporate Planning andStrategy Division coordinates the Company’s IR
activities.

Presentation byRepresentative(s)

Yes

Yes

3. Measures to Ensure Due Respect for Stakeholders
Supplementary Explanations
Stipulation of Internal Rules for
Respecting the Position of
Stakeholders
Implementation of Environmental
Activities, CSR Activities etc.
Development of Policies on
Information Provision to
Stakeholders

The Company has the “Compliance Rules” in place to ensure sound andtransparent corporate management.
The Company posts the “Main Sustainability Goals” and updates on its
activities thereof on the Sustainability section of its website.
The Company posts its policy on the provision of information under the“Disclosure Policy,” which is available on its website.

- 13 -

IV. Matters Related to the Internal Control System
1. Basic Views on Internal Control System and the Progress of System Development
1. System to ensure that Directors and employees execute their duties in compliance with applicable laws
and regulations and the Company’s Articles of Incorporation(1) At Artner, we have implemented the Compliance and Risk Management Meeting, chaired by the
President and CEO, as part of a system aimed at thoroughly educating employees regarding all
applicable laws and regulations and the Articles of Incorporation, and also ensuring such compliance.
(2) We have set up an internal whistleblowing system, under which Directors, employees, and other people
engaged in work for the Company can report corruption or wrongdoing to the Whistleblowing
Committee, which has a duty of confidentiality. It is prohibited to subject persons who submit
whistleblower reports using the system to any disadvantageous treatment as a result of such reporting.
The system is designed to ensure the effectiveness of whistleblowing to prevent or quickly detectviolations of applicable laws and regulations.
(3) The Internal Audit Office, operating independently of other divisions that execute business practices,conducts internal audits. Through such audits, it verifies the appropriateness and effectiveness of theinternal management system of each division, and by promoting the improvement of the systems, it
ensures that all employees lawfully execute their duties.
2. System to ensure the appropriateness of financial reporting(1) Directors and employees ensure the appropriateness of financial reporting by executing their duties incompliance with the “Basic Framework of Internal Control Related to Financial Reporting.”(2) Directors and employees smoothly operate the system to ensure the appropriateness of financial
reporting.
(3) The Internal Audit Office audits the operation of the system to ensure the appropriateness of financial
reporting.
3. System to store and manage information relating to the execution of duties by Directors(1) Information and documents relating to the execution of duties by Directors are appropriately stored andmanaged in accordance with the “Document Management Rules,” other applicable rules andregulations, and related information management system manuals.
(2) The Internal Audit Office conducts internal audits to confirm that this information and related
documents are appropriately stored and managed.
4. Rules and system to manage the risk of loss
(1) We have formulated guidelines, “Structure to Conduct Risk Management,” to define a clear system for
managing different risks.
(2) We have classified and defined management risks in accordance with these policies, and each
responsible division identifies and analyzes the risk situation for each type of risk. We have set up asystem in which the various kinds of risks are managed through the Compliance and Risk Management
Meeting. Management and countermeasures for each type of risk are clarified and managed in the
Meeting.
(3) The Internal Audit Office, which is directly overseen by the President and CEO, is responsible for
audits in accordance with an internal audit plan. The office examines the method and details of audit
implementation and revises the audit method as and when needed.
5. System to ensure that Directors execute their duties efficiently(1) Board of Directors meetings are held twice a month, as the basis of a system to ensure that Directors
execute their duties efficiently. The first board meeting of the month is a performance board meetingand the second is a regular board meeting. Special board meetings are also held as and when needed.
The scope of authority of the Board of Directors is clearly defined in the “Board of Directors Rules.”(2) To ensure efficient business management by the Directors, we have formulated “Organizational Rules,”“Administrative Authority Rules,” “Division of Duties Rules,” “Division of Duties (Administrative
Authority) Statement,” and other internal rules.
6. System to ensure appropriate business practices in a corporate group consisting of companies, parent
companies, and subsidiaries
The company does not currently have any parent companies or subsidiaries.
- 14 -

7. Matters relating to employees who assist with the duties of the Audit and Supervisory Committee,
independence of such employees from other Directors who are not members of the committee, andensuring the effectiveness of the committee’s instructions to such employees(1) If requested by the Audit and Supervisory Committee, an employee can be appointed to assist with theduties of the committee.
(2) The appointment or dismissal, reassignment, and performance evaluation of such employees require theapproval of the Audit and Supervisory Committee.
(3) If the Audit and Supervisory Committee requests the appointment of an employee to assist with its
work, the appointment of a suitable employee to assist with the work needed by the committee is madein consultation with the committee. The appointment is made with the prior approval of the committee,
and with an assurance of independence. To ensure the effectiveness of the instructions of the Audit andSupervisory Committee to the applicable employee, the employee works exclusively for the committee,
without being assigned any other work.
8. System to enable Directors who are not members of the Audit and Supervisory Committee and employees
to report to the Audit and Supervisory Committee(1) Directors who are members of the Audit and Supervisory Committee attend meetings of the Board of
Directors and other important meetings and receive reports on the state of business practice execution
from other Directors who are not members of the committee.
(2) Directors who are members of the Audit and Supervisory Committee are able to view important internal
decision request circulars, written decisions, and reports that are not discussed at the important meetings
mentioned above, and they also receive explanation of the contents of such documents as and whenneeded.
(3) Directors or employees should report to the Audit and Supervisory Committee any of the following: arisk that may significantly harm the company; misconduct relating to execution of duties by Directors
who are not members of the Audit and Supervisory Committee; significant violation of an applicablelaw, regulation, or the Articles of Incorporation; reports relating to the state of internal audits; facts
reported based on the internal whistleblowing system; and any other matter requested for the purposesof the Audit and Supervisory Committee.
9. System to ensure that persons who make whistleblower reports to the Audit and Supervisory Committee
are not subjected to any disadvantageous treatment as a result of such reportingIn accordance with internal rules, it is prohibited to subject persons who submit whistleblower reports
using the system to disadvantageous treatment in retaliation for whistleblowing.
10. Matters relating to policies concerning procedures for prepayment or reimbursement of expenses arisingfrom the execution of duties by the Audit and Supervisory Committee members or other processing ofexpenses or monetary obligations arising from the execution of such duties
The procedures for prepayment or reimbursement of expenses arising from the execution of duties bymembers of the Audit and Supervisory Committee or other processing of expenses or monetary
obligations arising from the execution of such duties are carried out appropriately through applications
made by members of the Audit and Supervisory Committee.
11. Other systems to ensure that audits of the Audit and Supervisory Committee are effectively conducted(1) The President and CEO and the Head of the Internal Audit Office strive to enable sufficient
opportunities for consultation with the Audit and Supervisory Committee members to examine theestablishment of a suitable working environment for the committee, in order to ensure the effectivenessof audits.
(2) To ensure the effectiveness of audits by the Audit and Supervisory Committee, the committee members
demand that the President and CEO and the Board of Directors strive to make continuous improvements
to the auditing system.
(3) The Internal Audit Office, which is the internal auditing department of the Company, and the division
responsible for oversight of compliance and risk management meet regularly with the Audit andSupervisory Committee to exchange opinions regarding issues to be addressed.
(4) If the Audit and Supervisory Committee deems it necessary to appoint legal advisors or other external
advisors when conducting an audit, such advisors can be appointed.

- 15 -

2.

Basic Views on Measures against Antisocial Forces
1. Basic approach to the exclusion of antisocial forces(1) To fulfill its obligations of corporate social responsibility and to protect the Company, any relations
with antisocial forces are cut off.
(2) In the event that the company is subjected to any unreasonable demands by antisocial forces, we
respond resolutely by legal means.
(3) We set up a “System for Cutting off Relations with Antisocial Forces” based on the manual for dealing
with antisocial forces.
(4) In preparation for unreasonable demands by antisocial forces, we are building close partnerships with an
external specialized agency, and in the event that we are subjected to an unreasonable demand byantisocial forces, we will consult with the agency regarding how to respond, or request a response fromthe agency.
(5) Under no circumstances do we, for the sake of convenience, respond by engaging in behind-the-scenes
dealing with or providing money to antisocial forces.
(6) We regularly inform Directors and employees of our “System for Cutting off Relations with Antisocial
Forces” and promote awareness of it.
2. Internal system for exclusion of antisocial forces(1) Under the Head of the Management Division, the General Affairs Group, as department responsible for
exclusion of antisocial forces, strives to prevent the Company from being subjected to any unreasonable
demands from such forces.
(2) We have concluded advisory agreements with a legal advisor and retired police officers, and collaborate
with a specialized agency.
(3) In collaboration with the Head of the Management Division, the General Affairs Group receives
guidance and advice from the legal advisor as circumstances demand, and maintains a database of
information on antisocial forces. As and when needed, the group also reports the details of suchinformation to the Board of Directors. Based on the information, each division and the Compliance andRisk Management Meetings examine approaches to the exclusion of antisocial forces.
(4) We distribute a manual for dealing with antisocial forces to all employees and promote awareness of it.
(5) The General Affairs Group raises awareness of issues relating to the exclusion of antisocial forces
regularly at internal training sessions.

- 16 -

V. Other
1. Adoption of Anti-Takeover Measures
Adoption of Anti-Takeover Measures

Not adopted

Supplementary Explanation
The Company considers it one of the most important management objectives to achieve sustained growth toincrease its enterprise value as part of fulfilling the trust of its shareholders. The Company has no antitakeover measures in place and has no plan to employ such measures.

2. Other Matters Concerning the Corporate Governance System
The Company has in place the following system to ensure the timely disclosure of corporate information:
1. Basic policy on the timely disclosure of corporate information
The Company manages its corporate information accurately, and discloses it in a timely and appropriatemanner, to earn the understanding, trust, and support of the public. The Company considers it an essential
part of fulfilling its social responsibility to provide information that contributes to the greatertransparency and fairness of its corporate management, as well as to greater enterprise value. The
Company discloses such information as mandated by the “Rules on Timely Disclosure of Corporate
Information by Issuers of Listed Securities” (hereinafter the “Timely Disclosure Rules”), established by
the Tokyo Stock Exchange, expeditiously, accurately, and appropriately, and in accordance withapplicable laws and regulations. The Company discloses such information as mandated by the Timely
Disclosure Rules via the Timely Disclosure network (TDnet) and press releases, as well as on the
Company’s website. The Company voluntarily and proactively discloses information that is not mandatedby laws or regulations when it considers that to do so serves the public interest. When disclosing
information, the Company follows its own “Information Disclosure Rules” to ensure the appropriatenessof information disclosure practices. The Company has in place the Information Disclosure Committee,
which is responsible for assessing the appropriateness of the Company’s information disclosure practices.
2. Internal system for the timely disclosure of corporate information
The Company intends to fulfill its social responsibility, serve the public interest, and earn the trust andrespect of shareholders, investors, and all other stakeholders. To achieve this objective, the Company has
in place the Information Disclosure Committee, which is responsible for assessing the significance thateach piece of the Company’s corporate information may have to shareholders’ and investors’ decisionmaking. The committee is also responsible for implementing and improving the internal system andprocesses for the timely and appropriate disclosure of information, in accordance with the Timely
Disclosure Rules and applicable laws and regulations. The committee aggregates information that isexpeditiously and comprehensively collected and provided by relevant divisions and departments and thatis considered subject to disclosure under the Timely Disclosure Rules and applicable laws andregulations. The committee is chaired by the President and CEO and is composed of the head of theManagement Division, who serves as Information Management Administrator, and heads of otherdivisions and departments who have access to a wide range of corporate information. The committee
meets to assess the timeliness, legal compliance, and accuracy of information disclosure under the Timely
Disclosure Rules and applicable laws and regulations, including a decision whether to voluntarily disclose
information deemed to be relevant to investors. When the committee determines that particular
information needs to be disclosed, it considers how and when to disclose the information and submits its
recommendation to the Board of Directors for approval. With the Board’s approval, the committee
discloses the information to the public.
3. Timely disclosure of significant decisions
The Company discloses its significant corporate-level decisions and financial results in resolutions duly
adopted by the Board of Directors. The Board resolves such matters as defined by the “Board of Directors
Rules.” The Information Disclosure Administrator, served by the Director in charge of information
disclosure, discloses matters of significance subject to disclosure as soon as the Board passes resolutions
on them.

- 17 -

4. Disclosure of significant events
The Company designates division and department heads as Information Management Coordinators
responsible for managing information relating to significant undisclosed events that occur in theirrespective divisions and departments. When the Company’s officers and employees become aware ofundisclosed significant events or information relating to potential significant events in the course ofbusiness, they report such events or information to the Information Management Coordinators in theirrespective divisions or departments. When the Information Management Administrator considers that the
information provided by an Information Management Coordinator is significant, the Administrator
discloses such information to the public at an appropriate time and by an appropriate method in a
resolution duly adopted by the Board of Directors. At a time of urgency, the President and CEO may planon disclosure of such information to ensure timely disclosure.
5. Prevention of insider trading
The Company has in place the “Rules for Managing Insider Trading of Stocks,” which guide officers andemployees in managing significant information that comes to their attention in the course of business andin trading stocks. The rules serve as a deterrent to prevent insider trading and ensure that the Company
earns the trust of the stock market.

- 18 -

General Meeting of Shareholders
Appointment / Dismissal

Appointment / Dismissal

Audit / Supervision

Board of Directors

ReportInquiry Report

Selection /Discharge

Audit

President and CEO

Collaboration

Appointment / Dismissal

Audit andSupervisory
Committee

Inquiry
ReportComplianceand RiskManagement
Meeting

Sustainability
Committee

ReportReportInquiry

Directions /Report Commands

Accounts
Audit

Nomination
andRemuneration
Committee
Instructions

Collaboration

Internal
Audit Office

ReportCorporate Planning and Strategy Division
Management Division
Engineer Business Division
Engineer Agency Division
Technology Development Division

Collaboration

Internal
Audit

External
Accounting
AuditorConsultation

Consultation /Advice- 19 -

ReportLegal
Advisors