the 25th Annual General Meeting of Shareholders

Notice of Convocation（FY2024）
Date

LocaionSeptember 26, 2024 on Thursday
PM 1:00■You may exercise your voting rights by either returning theenclosed Form for Exercising Voting Rights by post or via theInternet, etc.
■The proceedings of the meeting can be viewed in webinar
format. For details, please find the enclosed attachment.

Sapporo Kokusai Building 8F
Nishi 4-1, Kita 4-Jo, Chuo-ku, Sapporo(Please refer to “Venue Guide for the 24th Annual General Meeting of
Shareholders”.)

Proposal No. 1 Appropriation of Surplus
Proposal No. 2 Partial Amendments to the Articles
Prop
-osal

of Incorporation

Proposal No. 3 Election of Seven Directors (excluding
those who are Audit and Supervisory
Committee Members)

Security Code：9450-1-

Management Philosophy
Always deliver reasons to say ‘thanks.’
We will never forget the feeling of gratitude.
We will remain sensible.
We will contribute to society.
We will pursue profit fairly and justly.
We will be happy.
Under the slogan of “Wi-Fi for all facilities”, we, Fibergate inc., will increase costtolerance to seize business opportunity and ensure sustainable growth as well as
make every effort to fulfill our social responsibility as a public company.
We sincerely appreciate your continuous guidance, encouragement, and support.
President and Chief Executive Officer-2-

Masanori
Inomata（Security Code: 9450）
September 9, 2024

Dear Shareholder,No. 28 Keiwa Building
Nishi 8-10-3, Minami 1-Jo, Chuo-ku,
SapporoFibergate Inc.
President and Chief Executive Officer Masanori Inomata

Notice of Convocation of the 25th Annual General Meeting of Shareholders
We would like to express our appreciation for your continued support and patronage.
We hereby inform you that the 24th Annual General Meeting of Shareholders of Fibergate Inc. (the “Company”) will beheld as described below.
In convening this general meeting of shareholders, the Company takes measures for electronic provision of information that iscontained in the reference documents for the general meeting of shareholders, etc. (matters subject to measures for electronic
provision), and posts this information as “Notice of Convocation of the 24th Annual General Meeting of Shareholders” on the
Company’s website on the Internet. Please access the Company’s website shown below to review the information.

◆The Company website
https://www.fibergate.co.jp/
Please access the above website and select “IR Information” in Menu followed by “About Shares” to view the information.

Matters subject to measures for electronic provision are posted on the website of Tokyo Stock Exchange (TSE), in
addition to the Company’s website. Please access the website shown below to review the information.
◆Tokyo Stock Exchange, Inc. (TSE) website (Listed Company Search)https://www2.jpx.co.jp/tseHpFront/JJK010010Action.do?Show=Show(Please access the above website of TSE and enter the Company name “Fibergate, Inc.” in “Issue Name (Company Name)”or its securities code “9450” in “Code” to search. Then, select “Basic Information” followed by “Documents for public
inspection/PR information” Please review the information from “Notice of Convocation of General Meeting of
Shareholders/Information Materials for General Meeting of Shareholders” column under “Documents for public inspection.”)

-3-

1.

Date and Time

2.

Place

Wednesday, September 26, 2024 at 1:00 p.m. (Reception starts at 12:30 p.m.)
Sapporo Kokusai Building 8F
Nishi 4-1, Kita 4-Jo, Chuo-ku, Sapporo

3.

Meeting
AgendaMatters to be1.

reported

The Business Report, Consolidated Financial Statements for the Company’s 25th Fiscal year (fromJuly 1, 2023 to June 30, 2024) and results of audits by the Accounting Auditor and the Audit andSupervisory Committee of the Consolidated Financial Statements2.

Non-consolidated Financial Statements for the Company’s 25th Fiscal year (from July 1, 2023 toJune 30, 2024)

Proposals toberesolved

Proposal No. 1

Appropriation of Surplus

Proposal No. 2

Partial Amendments to the Articles of Incorporation

Proposal No. 3

Election of Seven Directors (excluding those who are Audit and Supervisory Committee Members)◎When attending the meeting, please kindly submit the enclosed Form for Exercising Voting Rights at the reception desk.
1. If you cannot attend the meeting, you may exercise your voting rights by proxy by designating one other shareholder holding voting
rights of the Company to attend the meeting, Please note, however, that it is necessary to submit a document providing the authority ofproxy.
2. Paper-based documents stating matters subject to measures for electronic provisions will be sent to shareholders who request the deliveryof paper-based documents, however, those documents do not include the following matters in accordance with the provisions of laws
and regulations and Article 19 of the Company’s Articles of Incorporation.
(1) “Status of the Accounting Auditor” in the Business Report(2) "System for ensuring the appropriateness of operations" in the Business Report(3) "Summary of the operational status of the system to ensure the appropriateness of operations" in the Business Report(4) "Statement of Changes in Consolidated Shareholders' Equity, etc." in the Consolidated Financial Statements(5) "Consolidated Notes Table" in the Consolidated Financial Statements(6) "Statement of Changes in Shareholders' Equity, etc." in the Non-consolidated Financial Statements(7) "Individual Notes Table" in the Non-consolidated Financial Statements
For this reason, the Business Report, the Consolidated Financial Statements and Non-consolidated Financial Statements stated in the
aforementioned documents constitute one part of the scope of audits by the Accounting Auditor and Audit and Supervisory Committee
for preparing their respective audit reports.
3. If revisions to the matters subject to measures for electronic provision arise, a notice of the revisions and the details of the matters before
and after the revisions will be posted both on the Company’s website and TSE’s website.

-4-

Guide to Exercising Voting Rights
Voting rights at the General Meeting of Shareholders are important rights of shareholders.
Please review the “Reference Documents for the General Meeting of Shareholders” and exercise your voting rights.
You can exercise your voting rights by one of the following three methods.

Attend the General Meetingof Shareholders

Exercise voting rights inwriting (by postal mail)Exercise voting rights via theInternet, etc.

When attending the meeting, pleasekindly submit the Form for Exercising
Voting Rights at the reception desk.

Please indicate your vote for oragainst the proposals on the Form for
Exercising Voting Rights and return it
by post.
Exercise deadline

Please follow the instructions on thenext page to indicate your vote for oragainst the proposals.

Wednesday, September 26, 2024

Received by Wednesday,

Entered by Wednesday,

at 1:00 p.m.

September 25, 2024 at 6:00 p.m.

September 25, 2024 at 6:00 p.m.

Date and time of the General
Meeting of Shareholders

Exercise deadline

Guide to Filling Out the Form for Exercising Voting Rights

If you exercise your voting rights both in writing (by postal mail) or via the Internet, etc., the exercise of your voting rights via the Internet, etc.
shall be treated as the valid exercise of your voting rights. In addition, if you exercise your voting rights multiple times via the Internet, etc., the last
one shall be treated as a valid exercise of your voting rights.
If there is no indication of your vote for or against the proposals on the Form for Exercising Voting Rights when voting rights are exercised inwriting (by postal mail), it shall be treated as an indication of vote for the proposals.

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Guide to Exercising Voting Rights via the Internet, etc.
Enter Log-in ID and Temporary
Password

Read a QR CodeYou can log in to the website for exercising voting rights without
entering Login ID and Temporary Password stated in the secondary
Form for Exercising Voting Rights.

Please contact us as shown on the right for instructions on how to operate acomputer or smartphone when exercising voting rights via the Internet, etc.

Website forexercising
voting rights

https://evote.tr.mufg.jp/

The Transfer Agent Department, Mitsubishi UFJ Trust and Banking
Corporation (Help Desk)

0120-173-027(Toll-free/Reception hours: 9:00 a.m. to 9:00 p.m.)
Institutional investors may use the electronic voting platform for institutional investors operated by ICJ, Inc.

-6-

Reference Documents for the General Meeting of Shareholders

Proposals and References
Proposal No. 1: Appropriation of Surplus
The Company proposes the following for the appropriation of surplus:

The Group aims to expand its business performance through growth investments and regards the return ofprofits to shareholders as one of the most important management issues.
Profits for each fiscal year will be divided into three major divisions, and in principle, one-third of them will
be used as a source of profit dividends as a return to shareholders, another one-third of them will be used for
returns to executives and employees, which are important human capital, and business investments forfurther growth of the Company, and the remaining one-third will be retained earnings.
Based on this, the year-end dividend for the current fiscal year will be 12.5 yen per share.
Matters concerning year-end dividends

1.

Type of dividend property

Cash
2.

Allotment of dividend property to shareholders and the total amount12.5 yen per common share of the Company
Total amount of dividends: 253,392,412 yen
Since we pay an interim dividend of 5.0 yen per share, the annual dividend for the current fiscal year will be 17.5 yen
per share.

3.

Effective date of dividends of surplus
September 27, 2024

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Proposal No.2: Partial Amendments to the Articles of Incorporation
1. Reason for the proposal
In order to strengthen the cooperative system with its subsidiary, OffGrid-Lab Inc., and to further expand
the business of the Group in the renewable energy (electricity) business, and to develop a new electricity
sales business, the Company has added the following business objectives in its Articles of Incorporation.
2. Details of the amendments
The details of the amendments are as follows.
(Amended parts are underlined.)
Current

Proposed amendment(Purpose)(Purpose)
Article 2 The purpose of the Company is to operate Article 2 The purpose of the Company is to operate
the following businesses.
the following businesses.
from (1) to (7)from (1) to (7)(Article omitted)(Article omitted)(Newly established)(8) Introduction and sale, lease and rental,
maintenance and management of equipment
relatedtorenewableenergy,telecommunications control services, andconsulting services(9) Agency business for the sale of electricity

from (8) to (23)from (10) to (24)(Article omitted)(Same as current)-8-Proposal No. 3: Election of Seven Directors (excluding those who are Audit and Supervisory Committee Members)
Reasons for the proposal
The terms of office of all the seven Directors (excluding those who are Audit and Supervisory Committee Members) will
expire at the conclusion of this Annual General Meeting of Shareholders. Accordingly, the Company proposes the election ofseven Directors.
If the proposal is approved as proposed, two of the seven Directors will be Independent Directors in accordance with rules
stipulated by Tokyo Stock Exchange and Sapporo Securities Exchange.
(Selection of Director candidate)
Based on the Company's corporate philosophy, the Company's basic policy is to select candidates for Directors who embody
that philosophy at a high level and can be expected to contribute to the further development of the Group, and to consult on
their appointment at the annual General Meeting of Shareholders for a term of one year.
Specifically, the Board of Directors selects candidates who have played leadership roles in the IT industry, the financial industry,
corporate management, the legal profession, administration, consulting, etc., have a wealth of practical experience and specialized
knowledge, and are able to make appropriate management decisions and supervise them for Directors. In addition, the appointment
is made in consideration of the diversity and balance of skills.
If the proposal for the election of Directors is approved as proposed at this general meeting, seven Directors will be
appointed, which we believe is an appropriate size for appropriate management decision-making and supervision. The
Company also places importance on the diversity of its Directors, and has selected two women out of seven candidates for
Directors.
With regard to this proposal, the Company's Audit and Supervisory Committee has determined that all candidates for
Directors are suitable.

-9-The candidates for Directors, excluding the Audit and Supervisory Committee members, are as follows.
No

Name

Position

Attendance at
Board
Meetings

1

Reappointment

Masanori Inomata

President and Chief Executive
Officer

14/14(100%)

2

Reappointment

Daisuke Ishikawa

Director,
Chief Director of Business Use
Business Division

14/14(100%)

3

Reappointment

Takafumi Hamauzu

Senior Managing Director,
Chief Director of Corporate Planning
Division

14/14(100%)

4

Reappointment

Hisashi Kaneko

Managing Director,
Manager of Business Development
Department

14/14(100%)

5

Reappointment

Mie Ishimaru

Director,
Chief Director of Business
Administration Division

14/14(100%)

6

Reappointment

Nobuyuki Shinoda

Outside Independent

Director,
Chairman of Nomination andRemuneration Committee

14/14(100%)

7

Reappointment

Chikako Shimahata

Outside Independent

Director

14/14(100%)

Reappointment

Reappointed
Director candidate

OutsideOutsidecandidateDirector

Independent- 10 -

Independent Director candidate inaccordance with rules stipulated by
Tokyo Stock Exchange and Sapporo
Securities Exchange

No

Name
（Date of birth）

Career profile
April 1987

【Director candidate】
Reappointment

1

Joined Koa Fire and Marine Insurance Co., Ltd. (current Sompo
Japan Insurance Inc.)

December 1995

CEO of Mynet Inc.

November 2003

President and CEO of the Company (current holder)

December 2008

Audit & Supervisory Board Member of LEOC Inc.

Masanori Inomata
June 2011（Born february 26 ,1965）

Number ofshares held
(shares)

CEO of Chintai Seikatsu Inc. (current MI Corporation Inc.)(current holder)

January 2020

Director of FG-Lab Inc. (current holder)

March 2020

Direcotr of BizGenesis Inc.

December 2020

Representative Director of MI Foundation (current holder)

February 2021

Director of FG Smart Asset Inc. (current holder)

July 2021

President and CEO of OffGrid-Lab Inc. (current holder)

May 2022

Representative Director of Sakura Aid (current holder)November 2022

Representative Director of MI Management (current holder)

January 2023

Outside Director of 3eee Inc. (current holder)

May 2024

Director of Digital Enhancement for Condominium

2,827,290

He has served as President and Chief Executive Officer since the establishment of the Company,and has led the development of the Company throughout this period, forming and cultivating thecorporate culture of the Company to gather as many "thank you" as possible. He has broadly guided
Reasons for selecting as
Director candidate

the Group in terms of development of business strategies, and has taken the initiative responsively,
leading continuous growth of the Group. Such achievements, experience, and cultivated insights
and personal connections will continue to contribute to the decision-making of the Company's
Board of Directors, and will be beneficial for the global expansion of the Company's business andthe enhancement of corporate value, and thus the Company has nominated him as a Director
candidate.

Special interest

There is no special interest between Mr. Inomata and the Company.

- 11 -

No

Name（Date of birth）

Career profile
April 2012
August 2019
July 2020

Daisuke Ishikawa（July 31, 1989）【Director candidate】
Reappointment

September 2021
July 2022
September 2022

Number ofshares held
(shares)

Joined the Company
Manager of Residence Wi-Fi Sales Department of Business
Promotion Division
Manager of Sales for Eastern Japan in Business Promotion
Division
Execuive Officer, Deputy Chief Director of Business Promotion
Division and Manager of Sales for Eastern Japan
Execuive Officer, Chief Director of Home Use Sales Division andManager of Sales for Western Japan

5,420

Director, Chief Director of Home Use Sales Division andManager of Sales for Western Japan
Director, Chief Director of Home Use Sales Division, Manager of2

May 2023

Sales for Western Japan, and Deputy Chief Director of Business
Use Sales Division

August 2023
July 2024

Director, Chief Director of Home Use Sales Division, and Deputy
Chief Director of Business Use Sales Division

Director, Chief Director of Business Use business Division

Since joining our company, he has been engaged in the operations of the Sales Department,
and is currently in charge of the Home Use Sales Division. He has mainly promoted the
Reasons for selecting as Director decision making of important matters and strengthening of the Sales Department. Since he hasa wealth of business experience at the Company, the Company has determined that he iscandidatesuitable for the position of Director of the Company, and thus nominated him as a Director
candidate.
Special interest

There is no special interest between Mr. Ishikawa and the Company.

- 12 -

No

Name（Date of birth）

Career profile
April 2000

Joined Areaquest Inc.

December 2000

Joined Venture Link Inc.

April 2007

Joined Orix Capital Corporation

February 2011

Joined the Company, Director of Corporate Planning Division

June 2011

President and CEO of Chintai Seikatsu Inc.

January 2013

Takafumi Hamauzu
January 20, 1976

March 2014

【Director candidate】
October 2016
Reappointment

September 2018
February 2021

3

July 2021
September 2022

Number ofshares held
(shares)

Executive Officer of the Company and Director of Corporate
Planning Division
Senior Executive Officer of the Company and Chief Director of
Business Management Division
Managing Executive Officer of the Company and Deputy Chief

120,550

Director of Business Promotion Division
Managing Director of the Company and Chief Director of
Business Management Division
Audit & Supervisory Board Member of FG Smart Asset Inc.
(current holder)
Managing Director of the Company and Chief Director of
Corporate Planning Division
Senior Managing Director of the Company and Chief Director of
Corporate Planning Division (current holder)

Since joining the Company, he has been engaged in the operations of the Corporate Planning
Department and the Sales Department, and is currently in charge of the Corporate Planning
Division. He was mainly involved in making decisions on important management matters andReasons for selecting as Director supervising the execution of business, and has promoted the strengthening of thecandidate

Administrative and Sales Departments. Based on his extensive business experience at theCompany and his knowledge of management in general, the Company has determined that heis suitable for the position of Director of the Company, and thus nominated him as a Director
candidate.

Special interest

There is no special interest between Mr. Hamauzu and the Company.

- 13 -

No

Name（Date of birth）

Career profile
April 1989
July 1994
Juen 2009
October 2013
July 2015

Hisashi Kaneko
April 25, 1966
【Director candidate】
Reappointment

July 2016
February 2020
February 2021

Number ofshares held
(shares)

Joined Ome Shinkin Bank
Joined Osaka Usen Broadcasting (current USEN Corporation)
Joined UCOM Inc.
Joined the Company, Manager of Sales for Eastern Japan in
Apartment ISP Business Division
Executive Officer and Manager of Sales for Eastern Japan in Sales
Division of the Company
Senior Executive Officer and Manager of Sales for Eastern Japan inSales Division of the Company
Managing Executive Officer and Manager of Residence Wi-Fi

110,520

Sales Department of Business Promotion Division
Managing Executive Officer and Chief Director of Business
Promotion Division
Managing Director,

４

July 2022

Chief Director of Business Use Sales Division, and Manager ofBusiness Development Department

September 2022
July 2024

Director of OffGrid-Lab Inc. (current holder)
Managing Director,
Manager of Business Development Department

In addition to a wealth of experience and achievements through many years of business execution
in the telecommunications-related business, he has insight into management. Since joining thecompany, he has been engaged in the operation of the Sales Department, and is currently in charge
Reasons for selecting as Director of the Sales Promotion Division. He was mainly involved in making decisions on importantcandidatemanagement matters and supervising the execution of business, and has promoted thestrengthening of the Sales Department. Based on his extensive business experience at theCompany and his knowledge of management in general, the Company has determined that he issuitable for the position of Director of the Company, and thus nominated as a Director candidate.

Special interest

There is no special interest between Mr. Kaneko and the Company.

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No

Name（Date of birth）

Career profile
November 1997

Joined Asahi Audit Corporation (current KPMG Azusa LLC)

April 2003

Registered as Certified Public Accountant

February 2010
May 2011
June 2012

Number ofshares held
(shares)

Director of Ishimaru Certified Accountant’s Office (current
holder)Registered as Tax Accountant
Director of Densan Co., Ltd.
Director of TMRSystems, Inc.

Mie Ishimaru
November 2, 1969
【Director candidate】

July 2018

Exchange Corporation)

September 2018
September 2019

Reappointment

January 2020

5

Outside Director of JANPARA Co., Ltd. (former Third Wave

March 2020
July 2021
January 2023

Outside Director of the Company

10,020

Director, Deputy Chief Manager of Business Administration
Division and Manager of Finance and Accounting Department
Audit & Supervisory Board Member of FG-Lab Inc. (current
holder)Audit & Supervisory Board Member of BizGenesis Inc.
Director, Chief Manager of Business Administration Division andManager of Finance and Accounting Department
Director and Chief Manager of Business Administration Division(current holder)

Since joining the Company, she has been engaged in the operations of the Business
Administration Department, and is currently in charge of the Business Administration
Division. She has been involved in supervising the execution of business of the Business
Reasons for selecting as Director Administration Department and has been in charge of the management and supervision of thecandidateFinance and Accounting Department. In addition, due to her abundant career as a certified
public accountant and her specialized knowledge and experience, the Company has determinedthat she is suitable for the position of Director of the Company, and thus nominated her as a
Director candidate.

Special interest

There is no special interest between Ms. Ishimaru and the Company.

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No

Name（Date of birth）

Career profile
April 1974
March 1995

Nobuyuki Shinoda
August 30, 1951
【Outside Director
candidate】
Reappointment

OutsideIndependent

6

March 1997
September 2002
May 2008
March 2011
June 2016
January 2020
August 2023

Number ofshares held
(shares)

Joined the Seibu Department Stores, Ltd.
Section Chief of Human Resources Department 1 and Manager of
Human Resources at Ikebukuro Branch
Joined THE LOFT CO.,LTD.
Executive Officer
Director and Executive Officer, and Responsible for Corporate
Planning

3,800

Responsible for Management Department
Outside Director of the Company (current holder)
Chairman of Remuneration Committee
Chairman of Nomination and Remuneration Committee (current
holder)Based on a wealth of knowledge and experience in business management that he has cultivatedover the years, Mr. Shinoda has been nominated as an Outside Director candidate with theCompany’s expectation that he will supervise the overall management of the Company from
Reasons for selection as Outside
an objective perspective and provide accurate advice. After being appointed, the Company
Director candidate and expected
expects that he will make use of his expertise as a person with management experience to makeroles
comments at meetings of the Board of Directors, etc., regarding the formulation ofmanagement plans, etc., mainly from a management perspective, and to supervise the progressof management plans.
Special interest

There is no special interest between Mr. Shinoda and the Company.

- 16 -

No

Name（Date of birth）
Chikako Shimahata
January 30, 1985
【Outside Director
candidate】
Reappointment

７

OutsideIndependent

Career profile
April 2007
October 2012
April 2013
April 2013
June 2020
September 9

Number ofshares held
(shares)

Joined Shinko Securities Co., Ltd. (current Mizuho Securities Co.,
Ltd.) Sapporo Branch
Joined Sapporo Nishi Branch of Japan Pension Service
Registered as Labor and Social Security Attorney
Representative of Labor and Social Security Attorney Office

4,000

Pirika Office (current holder)
CEO of Pirika Inc. (current holder)
Outside Director of the Company (current holder)

Ms. Shimahata is a qualified labor and social security attorney and has a wealth of experience,
specialized knowledge, and experience in human resources and labor. In order to make use of
Reasons for Selection as Outside her knowledge and experience in the Company's Board of Directors structure, she has been
Director Candidates andnominated as an Outside Director candidate. After being appointed, the Company expects her
to make use of her expertise as a labor and social security attorney mainly to strengthen the
Expected Roles
supervisory function of overall management and conflicts of interest, from the perspective oflabor law.
*Special interest

There is no special interest between Ms. Shimahata and the Company.

(Notes)1.
"Number of shares of the Company held" refers to the number of shares held by each candidate as of June 30, 2023.
2.
Mr. Nobuyuki Shinoda and Ms. Chikako Shimahata are Outside Director candidates. If both of them are appointed as
Directors, the Company intends to continue to appoint them as Independent Directors in accordance with rules stipulatedby Tokyo Stock Exchange and Sapporo Securities Exchange.
3.
Mr. Nobuyuki Shinoda and Ms. Chikako Shimahata, who are Outside Directors candidates, are currently Outside
Directors of the Company, and the number of years since they have been appointed as Outside Directors will be sevenyears for Mr. Nobuyuki Shinoda and three years for Ms. Chikako Shimahata as of the conclusion of this General Meeting.
4.
The Company has entered into a contract of directors and officers liability insurance with an insurance company, andeach candidate will be insured under the insurance contract if he or she is appointed as a Director. In addition, theCompany plans to renew it with the same content at the next contract renewal. For a summary of the contents of theinsurance contract, please refer to Section 4 (Status of Company Officers), (3) Summary of the Contents of the Contractof Directors and Officers Liability Insurance in the Business Report.
5.
The Company's Articles of Incorporation stipulates that the Company may enter into a limited liability contract with an
Outside Director in accordance with the provisions of Article 427, Paragraph 1 of the Companies Act, limiting its liability
for damages under Article 423, Paragraph 1 of the said Act, in order to welcome appropriate personnel with a high degreeof independence as Outside Directors. As a result, the Company has entered into a limited liability contract with Mr.
Nobuyuki Shinoda and Ms. Chikako Shimahata to limit liability for compensation up to the amount stipulated by laws andregulations, and we plan to continue the above contract if their reappointment is approved.

- 17 -

Nobuyuki Shinoda

Chikako himahata

Tetsurou Tatsuta

Tomohiro Obata

Hiroshi Kamada●●●

Masanori Inomata

Daisuke Ishikawa

Takafumi Hamauzu

Hisashi Kaneko

Mie Ishimaru

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Financial
Accounting
Human Resourcesand Labor

Legal Compliance

Sales Strategy
Marketing
New BusinessTechnology

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- 18 -●●●●●

Diversity (Gender,
Nationality,)

ESG
・SDGs

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Understanding of
the Company’s
Business

Corporate
Management

Independent
Director

Audit andSupervisory
Committee Member(For your reference) Skill Matrix of Directors

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Business Report (from July 1, 2023 to June 30, 2024)
1. Current Status of the Corporate Group(1) Business status for the current fiscal year
1) Business progress and results

The Japanese economy during the current consolidated fiscal year (July 1, 2023 to June 30, 2024), while
experiencing an increase in foreign tourists, resumption of various domestic events, and DX acceleration due tolabor shortages, is still in a critical condition in which higher interest rate due to the removal of the negative interest
rate policy or increased material procurement costs due to the Yen’s depreciation are concerned.
Under such circumstances, our group will continue to steadily implement the medium-term management plan on
March 17th, 2023. In order to realize the medium-term visions stated in this plan, we are engaging ourselves toachieve this plan based on Step 1 “Wi-Fi in all facilities” and Step 2 “realization of future infrastructures created bytelecommunications and renewable energy.”
The effect of stock business accumulation for the Home-Use business is continuing on the contrary to the heat upof competition and the slowdown in the specific customer sales channel have been seen. In addition, the sales scaleof cross-sell-products including “FG smart call,” network camera- and intercom-compatible systems, that drives thegrowth of Home-Use business is increasing due to an aggressive business expansion.
On the other hand, the operating profit margin is on a declining trend due to the increasing trends of depreciation
expenses associated with investment in telecommunication facilities and selling expenses due to the strengtheningof the sales structure, as well as temporary struggles in flow sales.
As a result of the above, the segment sales increased to 10,386 million yen (+8.2% YoY), and the segment income
decreased to 2,910 million yen (-2.0% YoY).
In the business use business, the long lead time from order acquisition to sales posting had been a bottleneck, but
our long-time efforts to date have been paid off, and sales of premises-communication-infrastructure-services to
medical and nursing care facilities, public facilities, and tourist facilities, grew significantly.
The sales related to development projects for equipment that meet the individual needs of each client at FG-Lab,
our subsidiary, remained steady.
Also, increase in large-scale projects and opportunities to provide high-value-added services pushed up the
Operating income margins for each project leading to an increasing trend in the operating income margin ofBusiness-Use business as a whole.
As a result of the above, the segment sales increased to 1,675 million yen (+10.8% YoY), and the segment income
also increased to 480 million yen (+65.9% YoY).
The sales and segment income, although there were several real estate sales at FG Smart Asset, decreased as
projects were concentrated in the previous fiscal year.

- 19 -

As a result of the above, the segment sales decreased to 523 million yen (-68.7% YoY), and the segment income
also decreased to 57 million yen (-58.0% YoY).
Regarding other business segments, including Renewable Energy, sales were recorded for the Higashikagura of
Hokkaido complex related to the installation of an All-in-one generation and consumption solar energy system.
As a result of above, the segment sales increased to 27 million yen (+221.2% YoY), and the segment income also
increased to 7 million yen (+286.3% YoY).
As a result, for the current consolidated fiscal year, we report net sales of 12,613 million yen (-1.4% YoY),
operating income of 2,387 million yen (+2.9% YoY), ordinary income of 2,395 million yen (+4.6% YoY), and net
income attributable to shareholders of the parent company of 1,567 million yen (+5.7% YoY).

Sales

Operating income

Ordinary income

Net income attributable
to the parent company’s
shareholders

12,613 million yen

2,387 million yen

2,395 million yen

1,567 million yen

YoY

YoY

YoY

YoY

-1.4%

+2.9%

+4.6%

+5.7%

［Sales of segments］
S e g m e n t sHome use business23rd Fiscal year
Year ending June
30,2022
8,141

Sales （Millions of yen）
24th Fiscal year
25th Fiscal year
Year ending June
Year ending June
30,2023
30,2024
9,600
10,386Composition
ratio
（％）
82.3

YoY
（％）
8.2

Business use business

1,244

1,512

1,675

13.3

10.8

Real estate business

1,238

1,674

523

4.2

△68.7

Others

0

8

27

0.2

221.2

Total

10,624

12,795

12,613

100.0

△1.4

Notes

1. Home use business ···············
2. Business use business ··········
3. Real estate business ············
4. Others ····························

Construction, maintenance, operation, support, PB provision, etc. of Internet-freeapartment
Construction, maintenance, operation, support, PB provision, etc. of free Wi-Fi
facilities
Buying, selling, leasing, etc. of real estate
Renewable energy(Electricity)- 20 -

2)Status of Capital Investment
The total amount of capital investment made by the Group during the current consolidated fiscal year under review was 2.364
billion yen.
The main capital investment for the installation of telecommunications equipment for the provision of services were 2.185 billion
yen for the home use service and 77 million yen for the business use service.

3)Status of Financing
In the consolidated fiscal year under review, there are no significant financings other than that of ordinary working capital.

4)Status of Business Transfers, Absorption Splits, or New Business Splits
There are no significant matters to be stated.

5)Status of Business Transfers from Other Companies
There are no significant matters to be stated.

6)Status of Succession of Rights and Obligations Related to the Business of Other Corporations, etc. Due to Merger
or Absorption Split
FG Smart Asset Inc., a wholly-owned subsidiary of the Company, absorbed TM Asset Inc., which was a whollyowned subsidiary of FG Smart Asset Inc., on December 27, 2023.

7) Status of Acquisition or Disposal of Shares or Other Interests or Stock Acquisition Rights, etc. of Other Companies
There are no significant matters to be stated.

- 21 -

(2) Status of Property and Profits and Losses
1) Status of Property and Profits and Losses of the Corporate Group
PeriodClassification

22nd Fiscal year
(Ended June 2021)

23rd Fiscal Year(Ended June 2022)

24th (previous)
Consolidated Fiscal Year(Ended June 2023)

25th (current) Consolidated
Fiscal Year(Ended June 2024)

Sales(million yen)

8,491

10,624

12,795

12,613

Ordinary Income(million yen)

1,543

1,604

2,290

2,395

Net Income Attributable to the
ParentCompany’s(million yen)
Shareholders

1,019

1,073

1,482

1,567

Net Income per Share

(yen)

50.11

52.60

72.70

77.20

Total Assets(million yen)

9,397

13,087

12,764

13,076

Net Assets(million yen)

3,677

3,279

4,758

5,836

Net Assets per Share(yen)

180.40160.74230.12285.59(Notes) Net income per share is calculated based on the average number of shares issued during the period.

2)

Status of Property and Profits and Losses of the Company
PeriodClassification

22nd Fiscal year
(Ended June 2021)

23rd Fiscal Year(Ended June 2022)

24th (previous) Business25th (current) Business YearYear
(Ended June 2024）(Ended June 2023)

Sales(million yen)

8,151

8,921

10,753

11,643

Ordinary Income(million yen)

1,284

1,262

1,942

2,016

Net Income(million yen)

847

851

1,426

1,323

Net Income per Share

(yen)

41.66

41.71

69.92

65.18

Total Assets(million yen)

8,295

10,233

11,29012,094

Net Assets(million yen)

3,033

2,411

3,784

4,611

Net Assets per Share(yen)

148.83118.22

184.45227.51(Notes) Net income per share is calculated based on the average number of shares issued during the period.

- 22 -

(3)Status of Significant Parent and Subsidiary Company
1) Status of Parent Company
The Company does not have a parent company.

2) Status of Significant Subsidiary Company
Ratio of voting rights of theCompany

Relation details

Internet Brokering
Business

100.00％Concurrent positions ofofficers

500,000 NTD

Equipment Development
and Call Center Business100.00％Concurrent positions ofofficers

Minato-ku, Tokyo

35 million yen

Contract Development
Business and Real Estate
Leasing Business100.00％Concurrent positions ofofficers

FG Smart Asset Inc.

Minato-ku, Tokyo

50 million yen

Real Estate Sales andLeasing Business100.00%Concurrent positions ofofficers

OffGrid-Lab Inc.

Minato-ku, Tokyo

35 million yen

Renewable Energy(Electricity) Business16.67%

Concurrent positions ofofficers

Company names

Address

CapitalNOIS Inc.

Minato-ku, Tokyo

10 million yen

Fibergate Taiwan Inc.

Tainan City, Taiwan

FG-Lab Inc.

Major businesses(Notes) 1. FG Smart Asset Inc. absorbed TM Asset Inc. on December 27, 2023
2. Although the Company’s voting rights ratio in OffGrid-Lab Inc. is 50/100 or less, OffGrid-Lab Inc. is a subsidiaryof the Company as it is effectively controlled.

- 23 -

(4) Issues to be addressed
The management environment surrounding the Group is still unpredictable, with an increase in the numberof foreign tourists, the resumption of various domestic events, and the acceleration of DX due to labor shortages,
as well as concerns about the risk of rising interest rates due to the lifting of the negative interest rate policy
and an increase in procurement costs for materials and other items due to the depreciation of the yen.
Under these circumstances, the Group will continue to steadily implement the medium-term management planannounced on March 17, 2023. In order to realize the medium-term vision in the medium-term management plan,
we are working to achieve the medium-term management goals based on the two steps of Step 1 "Wi-Fi for all
facilities" and Step 2 "Realization of future infrastructure created by telecommunications and renewable energy."1) Home Use BusinessIn the home use business for the living environment, the Group will strive to acquire new contracts and expand
our market share for residential Wi-Fi services. In addition, the proportion of newly contracted properties isincreasing, and delivery times are getting longer, so we will further strengthen the management of the order status.
We aim to contribute to the acquisition of communication demand for rental condominiums and the increase in
the unit price of services by enhancing cross-sell products as well as improving the communication quality andstrengthening the security of remote work.
2) Business Use BusinessIn the business use business, we expect to further contribute to sales and profits by not only developing themarket for demand for on-premise communication infrastructure services for medical and nursing care facilities,
public facilities, and tourist facilities, but also by developing a system to meet diverse customer needs by further
strengthening our sales structure and enhancing our expertise.
3) Response to rising costs
In order to respond to rising costs due to the rapid expansion of telecommunications traffic and the impact ofthe depreciation of the yen, we will take measures to reduce the impact of rising costs by streamlining the effective
use of lines and considering foreign exchange contracts.
4) Improvement of the efficiency and productivity of internal systems
In response to the increasing complexity of operations associated with the expansion of the Company's scale, we
believe that it is essential to improve the efficiency and productivity of internal operations. To this end, we will work tostrengthen our internal structure by developing our core systems and introducing financial analysis tools.
5) Stable operation of internal controls and compliance
The Company recognizes that it is an important management issue to build a corporate governance system inwhich “internal control”, “compliance”, and “disclosure control” function sufficiently. We believe that securing
the trust of all stakeholders, including shareholders, and society will lead to an increase in corporate value, and wewill strive for sound and transparent management while pursuing fairness and efficiency, and will fulfill
accountability. In addition, we are working to build and maintain a management system that discloses information
to shareholders and other stakeholders in a timely and appropriate manner.
We would like to ask our shareholders for your continued support.

- 24 -

(5)Content of Principal Business (as of June 30, 2024)
Name of Segment

Content of Principal Business (Principal item and service)

Home Use Service

Construction, maintenance, operation, support, and PB provision of Internet-freeapartment

Business Use Service

Construction, maintenance, operation, support, and PB provision of free Wi-Fi facilities

Real Estate Business

Real estate sales and leasing business

OthersRenewable Energy (Electricity) Business(6) Principal Sales Offices (as of June 30, 2024)
1) Principal Place of Business of the Company
Name

Location

Headquarters

No. 28 Keiwa Building, Nishi 8-10-3, Minami 1-Jo, Chuo-ku, Sapporo, Hokkaido

Tokyo Office

KDX Shibadaimon Building, 2-10-12, Shibadaimon, Minato-ku, Tokyo

Osaka Office

Kawaramachi KT Building, 3-3-7, Kawaramachi, Chuo-ku, Osaka, Osaka

Nagoya Office

HR-NET Fushimi Building, 1-20-10, Nishiki, Naka-ku, Nagoya, Aichi

Sendai Office

Oak Tree Tsutsujigaoka, 3-4-18, Tsutsujigaoka, Miyagino-ku, Sendai, Miyagi

Fukuoka Office

Ichigo Hakata Building, 1-28, Gion-machi, Hakata-ku, Fukuoka, Fukuoka

2) Place of Business of the Subsidiaries
Name

Location

NOIS Inc.

KDX Shibadaimon Building, 2-10-12, Shibadaimon, Minato-ku, Tokyo

Fibergate Taiwan Inc.

5F, No. 571, Qingping Rd, Anping District, Tainan City, Taiwan

FG-Lab Inc.

KDX Shibadaimon Building, 2-10-12, Shibadaimon, Minato-ku, Tokyo

FG Smart Asset Inc.

KDX Shibadaimon Building, 2-10-12, Shibadaimon, Minato-ku, Tokyo

OffGrid-Lab Inc,KDX Shibadaimon Building, 2-10-12, Shibadaimon, Minato-ku, Tokyo- 25 -

(7) Status of employees (as of June 30, 2024)
1) Status of Employees of the Corporate GroupMaleat the end of
previous fiscalyear
141 persons

FemaleTotal or average

91 persons
232 persons

Classification

at the end ofcurrent fiscal year

Changes in thecurrent fiscal year

Average age

Average length ofservice

135 persons
95 persons
230 persons

Decrease of 6 persons

37 years and 5 months

4 years and 11 months

Increase of 4 persons

34 years and 3 months

5 years and 7 months

Decrease of 2 persons

36 years and 1 month

5 years and 2 months(Notes) The number of employees shown denotes full-time employees and does not include temporary or part-time employees.

2)Status of Employees of the Company
Classification
Male
Total

NumberFemaleoraverageof employees
127 persons

Average

90 persons
217 persons

age

Average length of service

37 years and 3 months

4 years and 10 months

34 years and 2 months

5 years and 7 months

36 years and 0 month

5 years and 2 months(Notes) The number of employees shown denotes full-time employees and does not include temporary or part-time employees.

3) The ratio of female managers is as follows:
Ratio of female manager

26.7％(8)Major Borrowers (as of June 30, 2024)
Borrowers

Outstanding Debt
1,394 million yen
1,205 million yen

North Pacific Bank, Ltd.
The Hokkaido Bank, Ltd
Mizuho Bank, Ltd.

404 million yen
347 million yen

Aomori Bank, Ltd.

154 million yen

Sumitomo Mitsui Banking Corporation, Ltd.

147 million yen

The 77 Bank, Ltd
MUFG BANK, Ltd

135 million yen
130 million yen

The Hokuriku Bank, Ltd
The Norinchukin Bank

115 million yen
102 million yen

The Chiba Bank, Ltd.

(9)Other Significant Matters Related to the Current Status of the Corporate GroupThe Company has established a joint venture with H-Power Holdings Inc. The details of this matter are describedin the "Notes on significant subsequent events" in the consolidated notes table of the consolidated financial statements.

- 26 -

2. Information on the Company’s shares (as of June 30, 2024)(1)

Total number of authorized shares

79,100,000(2)

Shares issued（Including Treasury stock 322,207
20,593,600
shares）(3)

Number of shareholders(4)

Major shareholders

6,233

Number ofshares held
4,749,000

Shareholding
ratio
23.42

Masanori Inomata

2,827,290

13.94

Custody Bank of Japan, Ltd. (Trust Account)

2,441,300

12.04

Sumitomo Mitsui Trust Bank, Ltd. (Trust Account A-23)

1,700,000

8.38

Name of shareholder
MI Corporation Inc.

Taizo Matsumoto

1,092,400

5.38

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

1,091,100

5.38

599,600

2.95

429,000

2.11

293,700

1.44

264,072

1.30

Hikari Tsushin K.K.
CACEIS BANK/QUINTETLUXEMBOURG SUB AC / UCITS
CUSTOMERS ACCOUNT(Standing proxy: Custody Business Department of HSBC BankTokyo Branch)
BNYMSANV AS AGENT / CLIENTS LUX UCITS NON
TREATY 1(Standing proxy: MUFG Bank, Ltd.)
Nomura Securities Co., Ltd.

（Notes）1. Ratio of number of shares held to the total number of shares issued (excluding treasury shares) is rounded down
to the third decimal place.
2. The shareholding ratio is calculated by deducting treasury share (322,207 shares).
3. The 1,700,000 shares of Sumitomo Mitsui Trust Bank, Ltd. (Trust Account A-23) are related to a trust agreement
for the purpose of managing shares with Masanori Inomata, President and Chief Executive Officer of theCompany, as the trustor and beneficiary, and Sumitomo Mitsui Trust Bank, Ltd. as the trustee. In addition,
800,000 shares of the 2,677,400 shares held by the Custody Bank of Japan, Ltd. (trust account) are due to theconclusion of a management trust agreement for donated shares for shares held by Masanori Inomata, President
and Chief Executive Officer of the Company. As a result, the actual number of shares held by Masanori Inomata
is 10,071,400 shares with the ratio of 49.34%, which includes the number of shares held by MI Corporation Inc.,the asset management company of Masanori Inomata.

- 27 -

【Status by owner】
Status of Shares (100 shares per unit)
Division

Government
and
local
governments

Financial
institution

Financial
Foreign corporations, etc.
Other
instruments
corporation
NonbusinessIndividuals
individual
operators

Individualand others

Total

Status ofshares lessthan one unit
(shares)Number ofshareholde
0
9
25
54
70
10
5,156
5,324
－
rs
(persons)
Number ofshares052,7505,076
54,823
14,642
90
78,384
205,765
17,100held(Units)Shareholdi
0.00
25.64
2.47
26.64
7.12
0.04
38.09
100.00
－
ng
ratio
(%)
(Notes) The treasury shares of 322,207 shares are listed including 3,222 units in “Individual and others” and 7
shares in “Status of shares less than one unit”.
(5) Status of shares delivered to the Company's executives as compensation for the execution of duties during thecurrent fiscal year
Number of persons eligible for share

Number of shares
Director (excluding Outside Director)
Outside Director
Audit and Supervisory Committee
memberdelivery
15,000 shares

5 persons0 shares0 persons0 shares0 persons(Notes) The details of the Company's stock-based remuneration are described in "(b) Stock-based Remuneration of (4)Remuneration of Directors in 4. Status of Company Officers" in the business report.

(6) Other Significant Matters Related to Shares
There are no applicable matters.

- 28 -

3. Status of Stock Acquisition Rights, etc.
(1) Status of stock acquisition rights granted as consideration for the execution of duties held by the Company's officers asof the end of the fiscal year under review
There are no applicable matters.

(2) Status of stock acquisition rights granted to employees, etc. as consideration for the execution of duties during the fiscal
year under review
There are no applicable matters.

(3) Other status of stock acquisition rights
There are no applicable matters.

- 29 -

4. Status of Company Officers(1) Status of Directors (as of June 30, 2024)
P o s i t i o nName

Significant concurrent
positions

Responsible for

CEO of MI Corporation Inc.
Director of FG-Lab Inc.
Director of FG Smart Asset Inc.
CEO of OffGrid-Lab Inc.
Representative Director of Sakura Aid
Representative Director of MI Foundation
Representative Director of MI Management
Outside Director of 3eee Inc.
Director of Digital Enhancement for Condominium

President and Chief
Executive Officer

Masanori Inomata

Senior Managing
Director

Takafumi Hamauzu

Chief Director of Corporate
Planning Division

Managing Director

Hisashi Kaneko

Chief Director of Business Use
Business Division, and Manager
of Business Development
Department

DirectorMie Ishimaru

Chief Director of Business
Administration Division

Director

Daisuke Ishikawa

Chief Director of Home Use
Business Division, and Deputy
Chief Director of Business Use
Business Division－

Director(Outside Director)

Nobuyuki Shinoda

Chairman of Nomination andRemuneration Committee－

Director(Outside Director)

Chikako Shimahata

Director(Full-time Audit andSupervisory Committee
Member)Director(Audit and Supervisory
Committee Member)

Audit & Supervisory Board Member of FG Smart
Asset Inc.
Director of FG Smart Asset Inc.
Director of OffGrid-Lab Inc.
Director of Ishimaru Certified Accountant’s Office
Audit & Supervisory Board Member of FG-Lab Inc.

Representative of Labor and Social Security
Attorney Office Pirika OfficeCEO of Pirika Inc.

Tetsuo Tatsuta

Audit and Supervisory Committee Member ofFibergate Taiwan Inc.
Outside Audit & Supervisory Board Member of
Furanoichiba (current holder)
Part-time Audit and Supervisory Committee
Member of Uohan Co., Ltd.

Tomohiro Obata

Representative of PLAZA Law OfficeOutside Audit and Supervisory Committee Memberof TOHOKU ENTERPRISE CO.,LTD.
Outside Audit and Supervisory Committee Memberof Paradigmshift Co,.Ltd.

- 30 -

Director(Audit and Supervisory
Committee Member)

Representative of Office K.
Auditor of MI Foundation

Hiroshi Kamada(Notes)1. Directors: Mr. Nobuyuki Shinoda, Ms. Chikako Shimahata, Mr. Tomohiro Obata, and Mr. Hiroshi Kamada are
Outside Directors.
2. Mr. Tomohiro Obata, a member of the Audit and Supervisory Committee, is a qualified lawyer and has considerable
knowledge of legal affairs.
3. In order to strengthen the auditing and supervisory functions of the Audit and Supervisory Committee through thecollection of information from Directors and employees, etc., and sufficient cooperation with the Internal Audit Office,Mr. Tetsurou Tatsuta has been selected as a full-time Audit and Supervisory Committee member.
4. The Company has designated all Outside Directors (including Audit and Supervisory Committee members) as
Independent Directors in accordance with rules stipulated by Tokyo Stock Exchange and Sapporo Securities Exchange,and has notified both exchanges.

- 31 -

(2) Summary of the contents of the limited liability contract
The Company has entered into a contract with two Outside Directors who are not the Audit and Supervisory
Committee members and two of those who are the Audit and Supervisory Committee members to limit liability forcompensation under Article 423, paragraph 1 of the Companies Act in accordance with Article 427, paragraph 1 ofthe same Act and the Company's Articles of Incorporation.
The maximum amount of liability for compensation under the contract is the minimum amount of liability
stipulated in Article 425, paragraph 1 of the same Act. Such limit shall be applicable only when the performance of
the Outside Directors’ duties giving rise to such liabilities is recognized to have been carried out in good faith andwith no gross negligence.

(3) Summary of the contents of the contract of directors and officers liability insurance
The Company has entered into a contract of directors and officers liability insurance with an insurance company
as stipulated in Article 430-3, paragraph 1 of the Companies Act, in which the directors of the Company and its
subsidiaries are insured, and the Company bears all insurance premiums.
The summary of the contents of the insurance contract is that the insurance company compensates for damages
that may result from the insured being liable for the execution of his or her duties or receiving a claim for the pursuitof such liabilities, and the policy is renewed every one year. We plan to renew it with the same content at the next
contract renewal.

(4) Remuneration of executives
1) Policy for determination of the details of remuneration, etc. for executives
The Company resolved to make a decision on the details of individual remuneration for directors.
When making a resolution by the Board of Directors, the Nomination and Remuneration Committee
is consulted in advance on the content of the resolution, and a report is received.
The details of the policy for determination of the details of remuneration, etc. for individual directors are as
follows.

aBasic Policy
With regard to the remuneration of directors of the Company, the basic policy is to pay remuneration
at a sufficient and appropriate level as compensation for the burden of management responsibilities
with the aim of increasing motivation to contribute to the improvement of medium- to long-termbusiness performance so that corporate value can be continuously improved.
The remuneration of directors other than Audit and Supervisory Committee members (excluding
outside directors) consists of fixed remuneration paid based on position, short-term stock-based
remuneration for achieving annual performance targets, and long-term stock-based remuneration forachieving long-term management targets.
(a)Fixed remuneration

Fixed remuneration is determined according to position and other factors, and is paid monthly incash.

- 32 -

(b) Stock-based remuneration
Short-term stock-based remuneration and Long-term stock-based remuneration
Please refer to b. Policy for determination of the details and method of calculating the amount or number of
performance-based remuneration, etc. and non-monetary remuneration, etc. below.

b

Policy for determination of the details and method of calculating the amount or number of
performance-based remuneration, etc. and non-monetary remuneration, etc.

・Short-term stock-based
The short-term stock-based remuneration plan was the remuneration is that the number of shares of theCompany's common share (hereinafter referred to as the “Company's shares”) calculated by the calculation
method determined in advance will be delivered to directors other than Audit and Supervisory Committee
members (excluding outside directors) after the end of the relevant period, provided that the directors in question
hold directors or other positions of the Company specified by the Board of Directors of the Company for theperiod from the date of the annual Ordinary General Meeting of Shareholders to the date of that in the following
year. We have set “Consolidated Ordinary Income”, which is a numerical target for short-term business
management, as a short-term numerical target, and will be paid when the numerical target is achieved.
・Long-term stock-based
The long-term stock-based remuneration plan was the remuneration is that the number of shares of theCompany's shares calculated by the calculation method determined in advance will be delivered to directors after
the end of the relevant period, provided that the directors in question hold directors or other positions of theCompany specified by the Board of Directors of the Company for the period from the date of the annual Ordinary
General Meeting of Shareholders to the date of that held in two years later. This payment is made when the shareprice growth rate of the Company's shares, which is the numerical target for the Company's long-term business
management, exceeds 1.0.

c

Policy for determination of the ratio of monetary remuneration, performance-based remuneration, or
non-monetary remuneration to the amount of remuneration for individual Directors
The amount of remuneration is determined based on the remuneration standard, with a guideline of
70%:10%:20% for the allocation ratio of fixed remuneration, short-term stock-based remuneration and long-term
stock-based remuneration. The amount of remuneration for directors and outside directors who are the Audit andSupervisory Committee members consists of fixed remuneration and long-term stock-based remuneration fromthe perspective of their roles and independence, and the amount of remuneration, etc., is determined based on
the position and remuneration standards of each director, with a guideline of 80%:20% for the allocation ratio of
fixed remuneration and long-term stock-based remuneration for outside directors other than Audit andSupervisory Committee members.

dMatters related to determination of the details of remuneration, etc. for individual Directors
The amount of remuneration for individual directors is delegated to the President and Chief Executive Officer
in accordance with a resolution of the Board of Directors. The content of the authority is to determine the amountof remuneration for directors and the method of calculating it, and it is determined within the range of the
maximum amount of remuneration resolved at the General Meeting of Shareholders by comprehensively taking
into account the status of achievement and the degree of contribution to the management policy and targets.
The Board of Directors establishes a voluntary Nomination and Remuneration Committee to ensure that such
authority is appropriately exercised by the President and Chief Executive Officer (CEO), and the President andCEO shall fully consider the method of calculating remuneration for directors that the voluntary Nomination andRemuneration Committee deliberated on in the process of determining the amount of remuneration for Directors.

- 33 -

2) Total amount of remuneration, etc. for the current fiscal year

C a t e g o r y

Totalamount of
remuneration,etc.
（Million ofyen）

Director(of which are Outside
Directors)
Director （Audit and

132
（6）

Supervisory Committee
Members)

Total amount by type of remuneration, etc.
(Millionsofyen)
Perform
Nonancemonetar
Basic
based
y
Remunera
remunerremunertion
ation,
ation,
etc.
etc.
118
（6）

－
（－）

13
（－）

－
（－）

－
（－）

Number ofPeoplePaid(persons)

７
（２）

３
（２）
（うち社外取締
役）
Total
147
133
13
－
10
（うち社外取
（４）
（13）
（13）
（－）
（－）
締役）
（Notes）1. The contents of non-monetary remuneration, etc. is the shares of the Company, and the conditions for allotment
are as described in (4) Remuneration for Directors. In addition, the status of share delivery in the current fiscal
year is described in “(5) Status of shares delivered to officers of the Company as compensation for the executionof duties during the current fiscal year in 2. Current status of shares.”
15
（６）

15
（６）

2. The maximum amount of monetary remuneration for Directors has been resolved as follows:
Director(excluding Audit andAnnualSupervisory Committee

amountwithin 350 million yen (of which the annual amount for Outside Directors is within 50 million)(Resolution of the Annual General Meeting of Shareholders on September 28, 2021)

members)
As of the conclusion of the Annual General Meeting of Shareholders, the number of Directors (excluding Audit and Supervisory Committee members)
is seven (including two Outside Directors).
Director(Audit and Supervisory
Committee Members)

Annualamountwithin 60 million yen(Resolution of the Annual General Meeting of Shareholders on September 28, 2021)

As of the conclusion of the Annual General Meeting of Shareholders, the number of Directors who are members of the Audit and Supervisory
Committee is three.

- 34 -

3. The maximum amount of stock-based remuneration for Directors has been resolved as follows:
Resolution of the Annual General Meeting of Shareholders on September 28, 2021 and on September 27, 2023）

Short-term Incentive Plan

Director(excluding Audit andAnnualSupervisory Committee

Number ofmembers)

within 50 million yen(not applicable to Outside Directors)

amountCommon Shareswithin 56,000 shares(not applicable to Outside Directors)

Shares

As of the conclusion of the Annual General Meeting of Shareholders, the number of Directors (excluding Audit andSupervisory Committee members) is five (not applicable to Outside Directors).

Director(excluding Audit andLong-term Incentive Plan

Supervisory Committee
members)

Annualwithin 50 million yen (of which the annual amount for Outside Directors is within 10 million)

amountNumber of
SharesCommon Shares (of which the number of shares for Outside Directors is within 12,000
within 112,000 sharesshares)

As of the conclusion of the Annual General Meeting of Shareholders, the number of Directors (excluding Audit andSupervisory Committee members) is seven (including two Outside Directors).

Director(Audit and Supervisory
Long-term Incentive Plan

Committee Members)

Annualwithin 20 million yen

amountNumber of
SharesCommon Shareswithin 23,000 shares

As of the conclusion of the Annual General Meeting of Shareholders, the number of Directors who are members of the
Audit and Supervisory Committee is three.

3) The reason why the Board of Directors determined that the details of the remuneration for each individual Director for the current
fiscal year are in line with the policy
The Nomination and Remuneration Committee deliberates on the remuneration of each individual, and the President andChief Executive Officer determines the remuneration for each individual after considering the contents, and it is judged that it
is in line with the Company's decision-making policy.
The Nomination and Remuneration Committee was established in June 2023, and deliberations are scheduled to be held by the
Nomination and Remuneration Committee from the next fiscal year.

4) Matters concerning delegation of determination of the details of remuneration, etc. for each individual Director
・Name, position, and responsibilities of the delegated person
President and Chief Executive Officer: Masanori Inomata
・Details and reasons for delegated authority
Determination of the amount of remuneration, etc. of Directors and the method of its calculation
・Measures to ensure that authority is exercised appropriately- 35 -

The President and Chief Executive Officer shall make decisions on the above matters within the scope of the maximum
amount of remuneration, etc., approved by the General Meeting of Shareholders, after obtaining a report from the Nomination
and Remuneration Committee, the majority of which is composed of Outside Directors.

(5) Matters Concerning Outside Officers (as of June 30, 2024)
1) Status of important concurrent positions held by other corporations, etc., and the relationship between the Company and the said
other corporations, etc.
Position

Name

Director

Nobuyuki Shinodaー

Director

Chikako Shimahata

Representative of Labor and Social Security attorney office Pirika OfficeCEO of Pirika, Inc.

Director(Audit and Supervisory
Committee
member)Tomohiro Obata

Representative Employee of Legal Professional Corporation PLAZA law
officeOutside Director of Tohoku Enterprise Co., Ltd.
Outside Audit & Supervisory Board Member of Paradigm Shift, Inc

Director(Audit and Supervisory
Committee
member)Hiroshi Kamada

Representative of Office K.
Auditor of public interest incorporated foundation MI Foundation

Concurrent position and its details(Notes) There is no special relationship between the Company and each of the above concurrent positions.

- 36 -

2) Major Activities in the Current Fiscal Year

Name

Board
of
Directors andNomination
andRemuneration Committee

Audit
and
Supervisory
Committee

Attendance and Summary of Duty Performed in Relation to Expected Role

He attended all 14 meetings of the Board of Directors (excluding written meetings)

Nobuyuki Shinoda

Attended Boardof Director
meetings
14 out of 14 times(100%)
Attended
Nomination andRemuneration
Committee
meetings
8 out of 8 times

held during the current fiscal year. At the Board of Directors, he monitors thelegality and appropriateness of the Company's management decisions, fulfills
monitoring function, and provides advice and recommendations on the Company's－

management strategy, as well as advice and recommendations that lead to theimprovement of the objectivity and corporate governance of the Company's Boardof Directors. In addition, as the chairman of the Nomination and Remuneration
Committee, which is a voluntary advisory body to the Company, he leads
deliberations on how to determine the remuneration of Directors and compiles a(100%)

draft report as a committee.

Chikako Shimahata

Attended Boardof Director
meeting
14 out of 14 times(100%)
Attended
Nomination
Remuneration
Committee
meetings
8 out of 8 times

She attended all 14 meetings of the Board of Directors (excluding written meetings)
held during the current fiscal year. Mainly from a professional standpoint as a social
insurance and labor consultant, she deliberates on agendas and provides advice and－Director. She also attends meetings of the Nomination and Remuneration
Committee, which is a voluntary advisory body to the Company, and provides
objective advice and exchanges opinions from an external standpoint.

(100%)He attended all 14 meetings of the Board of Directors (excluding written meetings)

Attended Boardof Director
meetings
14 out of 14 times

Tomohiro Obata(100%)
Attended
Nomination
Remuneration
Committee
meetings
8 out of 8 times(100%)

recommendations as appropriate from an objective perspective as an Outside

and 15 meetings of the Audit and Supervisory Committee held during the current
fiscal year. Mainly from a professional standpoint as a lawyer, he deliberates on
Attended 14 out of
14 times (100%)

agendas and provides advice and recommendations as appropriate from an
objective perspective independent of management as an Outside Audit andSupervisory Committee member. He also attends meetings of the Nomination andRemuneration Committee, which is a voluntary advisory body to the Company,
and provides objective advice and exchanges opinions from an external standpoint
and the lawyer.

- 37 -

He attended all 14 meetings of the Board of Directors (excluding written meetings)

Hiroshi Kamada

Attended Boardof Director
meetings
14 out of 14 times(100%)
Attended
Remuneration
Committee
meeting
3 out of 3 times(100%)

and 15 meetings of the Audit and Supervisory Committee held during the current
fiscal year. He has many years of experience as a small and medium-sizedenterprise consultant and has knowledge of overall management, management andAttended 14 out of
14 times (100%)

operations, and provides advice and recommendations that lead to theimprovement of the objectivity and corporate governance of the Board of
Directors of the Company in matters such as accounting, finance, human resource
development, risk management, and management strategy at operating companies.
He also attends meetings of the Nomination and Remuneration Committee, which
is a voluntary advisory body to the Company, and provides objective advice andexchanges opinions from an external standpoint.

- 38 -

3) Amount of remuneration, etc. received from the Company's subsidiaries as an officer during the current fiscal year
There are no applicable matters.
4) Opinions on matters stated in the Business Report
There are no applicable matters.
5. Basic Policy on Company Control
The Company believes that those who control financial and business policy decisions should concentrate management resourceson expanding corporate value and increasing shareholder profits with the aim of stable growth.
At this time, the Company has not introduced any special takeover defense measures, but will continue to conduct flexible
studies while paying close attention to changes in social conditions and other factors.
6. Policy on Determination of Appropriation of Surplus
The Group aims to expand its business performance through growth investments and regards the return of profits toshareholders as one of the most important management issues.
Profits for each fiscal year will be divided into three major divisions, and in principle, one-third of them will be used
as a source of profit dividends as a return to shareholders, another one-third of them will be used for returns to executives
and employees, which are important human capital, and business investments for further growth of the Company, and theremaining one-third will be retained earnings.
Based on this, the year-end dividend for the current fiscal year will be 12.5 yen per share. The interim dividend was
5.0 yen per share. Therefore, an annual dividend of 17.5 yen per share.
For the next fiscal year, based on the above basic policy, we plan to pay an interim dividend of 13.5 yen per share and a
year-end dividend of 13.5 yen per share.

- 39 -

Consolidated Balance Sheets（June 30, 2024）(Millions of yen)
Assets
Accounts【current assets】
Cash and deposits

負

債

科

Amounts
5,339

の
目

部
金

額

【Current liabilities】

4,086

Accounts payable

623
140
1,203
1,317

2,120

Contract Assets

208

Commodity

665

Short-term borrowings
Current portion of long-termborrowings
Income taxes payable

Real estate for sale

489

Contract liabilities

Work in progress0

Provision for bonuses

88

Others88

Others356

Accounts receivable

Allowance for doubtful accounts【Fixed asset】(tangible fixed assets）

1,772

△5
7,736
35

Tools, furniture & fixtures

10

Communication equipment

7,153

Construction in progress【Fixed liabilities】

3,153

Corporate bond

7,200

Building

358

50

Long-term borrowings

3,049

Retirement benefit liability

53

Total liabilities

7,240
Net assets

0(Intangible assets)

88

Software67

Capital494

Capital surplus

423

Software in progress

20(Investments and other assets)

447

Investment securities

11

Deposit46

Deferred tax assets

372

Others19

Allowance for doubtful accounts△100【Deferred assets】
Inaugural expenses
Total assets

13,076【Shareholders’ equity】

Retained earnings
Treasury share【Other comprehensive
income cumulative amount】
Valuation difference of othersecurities
Foreign currency translation
adjustment account【Non-controlling interest】

5,786

5,225
△356
3
0
3
46

Total net assets

5,836

Total liabilities and net assets

13,076(Notes) The listed amount is rounded down to the nearest million yen.

- 40 -

Consolidated profit and loss statement (from July 1, 2023 to June 30, 2024)（Millions of yen）
Accounts

A

m

o

u

n

t

s

【Sales】

12,613【Cost of goods sold】

6,795
Gross profit

5,817【Selling, general andadministrative
expenses】

3,430
Operating income

2,387【Non-operating
income】
Insurance income

26

Point revenue

5

Others【Non-operating
expenses】
Interest expenses

2

34

23

Foreign exchange loss

2

Others0
Ordinary income

26
2,395

【Extraordinary loss】
Loss on disposal of
fixed assets
Loss on devaluation of
investment securities

51
39
Net income before
income taxes
Income taxes-current

631

Income taxes-deferred

100

Net income
Net income attributabletonon-controllinginterests
Profit attributable toowners of parent(Notes) The listed amount is rounded down to the nearest million yen.

- 41 -

91
2,304
732
1,572
4
1,567

Balance Sheets（June 30, 2024）(Millions of yen)
Assets
Accounts【Current assets】

Amounts
4,183

Cash and deposits

1,479

Accounts receivable

1,755

Contract Assets

208

Commodity

664

Work in progress

0

Others80

Allowance for doubtful accounts△5【Fixed asset】(tangible fixed assets）

7,910
7,199

Building

35

Tools, furniture & fixtures

10

Communication equipment

7,153(Intangible assets)

96

Software68

Software in progress

27(Software in progress)

614

Investment securities

1

Shares of related companies

196

Deposit45

Deferred tax assets

353

Others19

Allowance for doubtful accounts△1

Total Assets

12,094

Liabilities
Accounts【Current liabilities】
Accounts payable
Short-term borrowings
Current portion of long-termborrowings
Income taxes payable
Contract liabilities
Provision for bonuses
Others【Fixed liabilities】
Long-term borrowings
Retirement benefit liability
Total liabilities
Net【Shareholders’ equity】
CapitalCapital surplus
Capital reserve
Other capital surplus
Retained earnings
Other retained earnings
Retained earnings carriedforwardTreasury stock【Valuation and translation
adjustments】
Valuation difference of othersecurities
Total net assets
Total liabilities and equity(Notes) The listed amount is rounded down to the nearest million yen- 42 -

Amounts
4,734
667
850
1,192
286
1,317
83
337
2,747
2,694
53
7,482
assets
4,611
494
415
400
14
4,059
4,059
4,059
△356
0
0
4,611
12,094

Profit and loss statement (from July 1, 2023 to June 30, 2024)(Millions of yen)Accounts

Amounts
11,643【Sales】【Cost of goods
sold】

6,245
Gross profit

5,398【Selling, general andadministrative
expenses】

3,393
Operating income

2,004【Non-operating
income】
Insurance income

26

Point revenue
Foreign exchange
profitOthers【Non-operating
expenses】
Interest expenses

5
0
2

35

23

Others0
Ordinary income

24
2,016

【Extraordinary loss】
Loss on disposal of
fixed assets
Loss on devaluation of
investment securities

51
39
Net income before
income taxes
Income taxes-current

501

Income taxes-deferred

99

91
1,925

Net income

601
1,323

(Notes) The listed amount is rounded down to the nearest million yen.

- 43 -

Venue Guide for the 25th Annual General Meeting of Shareholders
Venue

Sapporo Kokusai Building 8th Floor

Address

Nishi 4-1, Kita 4-Jo,
Chuo-ku, Sapporo

Travel Information
Access from the nearest station

TEL

011-241-9020 (main phone number)

Next to Exit 8 of “Sapporo station” (Subway Namboku Line, Tozai Line and Toho Line)- 44 -