April 25, 2024 - The 62nd Ordinary General Meeting of Shareholders
Key Questions and Answers(Some parts of the contents have been added or modified for easier understanding.)
Q. Have you been able to secure engineers and diverse and inclusive talent? Can you explain about
the recruitment of foreign nationals?
A. We consider securing engineers to be the most critical and important corporate management issueof the Company’s businesses. With this understanding, we continued to secure newly graduatedengineers and engineers through general recruitment. In addition, in order to secure diverse andinclusive talent, we have been recruiting foreign nationals from a few years ago, specificallyinternational students studying at Japanese universities. We have hired around ten international
students at Japanese universities each year. While continuing to secure foreign talent, we plan todeepen our partnership with overseas schools and develop a recruitment strategy with a view torecruiting foreign nationals directly from overseas.
Another way of securing diverse and inclusive talent is the contracting business, which we areexpanding as a company strategy along with our dispatching services. Unlike dispatching, thecontracting business allows us to collaborate with rival companies and utilize talent from partnercompanies without violating the law. Therefore, we actively employ not only our own engineers
but also outside talent through partnerships with partner companies under contracting agreements.
By this comprehensive approach, we intend to continue to secure a stable number of engineers in
the future.
Q. Companies are raising their employee base salaries. What is the situation at Artner?
Also, how are you recovering the cost of base salary increases?
A. We are implementing a three-year Medium-Term Business Plan that started in FY2023. The firsttwo years, FY2023 and FY2024, have been completed, and we are in the final year, FY2025, sinceFebruary 1. Until now, we have not implemented base salary increases under the Medium-TermBusiness Plan and have only provided regular raises. However, we plan to raise base salaries in thespring of next fiscal year. We are currently in discussions with the labor union about continuous
base salary increases and the amount of returns, etc. in preparation for next year’s spring labor
negotiations.
We are currently in talks with the labor union to stably increase dispatch fees to fund the salary
increases and to return a single-digit or a double-digit percentage of the dispatch fee increase toemployees.

Q. I assume you have highly skilled engineers as a measure against termination of dispatch contracts.
What percentage do they make up?
A. When the global financial crisis of 2008 occurred, approximately 40% of our dispatched engineers
returned to the Company due to contract terminations. That is, 60% had their contracts extended,
while 40% had their contracts terminated. Upon a detailed analysis, we found that those 40% who
had their contracts terminated were involved in projects in the downstream development process.
Based on this experience, we have made improvements since the global financial crisis of 2008.
Now, over 85% of our engineers are involved in projects in upstream to midstream development
processes. Since we shifted significant weight to the upstream process, we expect that less contracts
will be terminated compared to 2008 if a major financial crisis were to occur again. We willcontinue to shift projects from midstream to upstream and take further risk mitigation efforts.
Q. How does the turnover rate of new graduates at Artner compare to that of typical companies? Whatmeasures are you taking to improve the turnover rate?
A. Over 150 newly graduated engineers enter into the Company each year. There are employees who
leave us during their training period or within their first year. While the three-year turnover rate issaid to be around 30% according to statistics, our current rate is under 30%. We will make detailed
and persistent efforts to reduce and improve the turnover rate, even if only slightly, byaccommodating employees’ job preferences, providing skill improvement opportunities,
supporting career advancement, and providing various daily support.
Q. What ratio of large companies and small- and medium-sized enterprises make up your clientcompanies? Can you tell us more about your clients?
A. We have credit management rules that set forth the criteria for starting transactions with clients,
and we have transactions with companies that meet these rules. Specifically, whether the companyis large or small to medium sized is not a significant factor. Instead, we evaluate their capital,
number of employees, and financial condition. Client industries are determined in line with oursales strategy, and priority is given to assigning engineers to those industries. Currently, ourstrategic focus is on carbon neutrality related projects, and we are prioritizing the assignment ofengineers to automobile, auto parts, and semiconductor manufacturing equipment manufacturers
associated with these projects. As there will continue to be various potential risks, sales will support
and follow up with potential clients and is on standby, ready to start transactions with clients
anytime.

Q. I imagine that your businesses are partially sensitive to economic conditions. What is the outlookfor future demand?
A. Our current main target clients are automobile, auto parts, and semiconductor manufacturing
equipment manufacturers. The demand for engineers remains strong in these industries, and with
our limited number of hires, we are unable to meet the demand. Accordingly, we forecast that thedemand for engineers in these related industries will be even higher than last year.
Q. What is the status of your IR activities?
A. Two years ago, we declared our intention to be listed on the Prime Market as part of the market
restructuring of the Tokyo Stock Exchange. However, as our tradable share market capitalization
did not meet the Prime Market’s requirement of 10 billion yen, we received Prime Market
recognition with conditions attached. Subsequently, we implemented various measures under ourMedium-Term Business Plan to meet the tradable share market capitalization criteria. As a result,
our stock price has increased approximately threefold compared to two years ago. Based on thisincrease, we achieved the Prime Market’s tradable share market capitalization of 10 billion yen one
year ahead of schedule, and we are currently in FY2025. Strengthening our IR activities is part ofthese measures. We have increased the frequency of briefings, and over these past two years, held
briefings in locations where we had not previously held them. Specifically, we conducted in-person
financial results briefings for individual investors and financial results briefings for institutional
investors in Osaka and Tokyo around four times a year. In addition, we conduct web-based IRactivities. With the first quarter ending in April, we plan to hold financial results briefings forindividual and institutional investors in Osaka, Nagoya, and Tokyo starting from June.
Q. How long does it take for newly graduated engineers to become dispatchable after they are hired?
A. Newly graduated engineers are organized into three groups, A, B, and C, in the initial budget. Eachgroup has a different assignment schedule based on the budget. The budget is drawn up such thatGroup A completes a three-month training from April to June and becomes dispatchable from July.
Group B undergoes training from April to July and becomes dispatchable from August. Group Cundergoes a seven-month training from April to October and becomes dispatchable fromNovember. As was mentioned in the financial results report for FY2024, engineers of all groups
were assigned ahead of the budget schedule. That was the situation of newly graduated engineers
in FY2024.

Q. Can you explain about your on-the-job training (OJT) for newly graduated engineers in thecontracting team?
A. Newly graduated engineers with little or no experience who are deemed to require some OJT will
gain practical experience for a certain length of time in a contracting group and will then bedispatched. Therefore, as a rule, engineers will undergo OJT in a contracting group, mindful of theprojects they will ultimately be working on at their places of assignment. Although the number ofparticipants is currently limited, we plan to expand the client base for this scheme and increase thenumber of accommodated engineers.
Q. You said that your recruitment activities’ cost per hire is increasing. By how much has it increased?
Can you explain about the recruitment costs?
A. This is Director Sato speaking. We currently do not make public the exact figures of the cost perhire, so I would like to refrain from disclosing the figures. The cost of recruiting newly graduatedengineers and career engineers was around 4% of our FY2024 net sales. As our hiring targets willcertainly increase, we anticipate that recruitment costs will also rise.
Q. How many people provide mental health care, and how often is it provided?
A. This is Director Harigae speaking. We have advisory agreements with clinical psychologists. We
understand the importance of day-to-day mental health care. The Health and Safety Committee at
each office discusses measures for addressing long work hours and mental health measures andconstantly strives to improve the workplace environment. Additionally, personalized care isprovided based on the opinion of the clinical psychologists. Furthermore, since November 2023,
clinical psychologists have been offering mental health training for middle managerial positions
and sales staff. They support the mental wellbeing of employees by noticing mental health issues
in team members and engineers and teaming up with managers, colleagues, and the personnel
affairs manager. The Company recognizes that the most important step of mental health care is for
us to notice and for those around us to notice. We have been providing training since the last fiscal
year, including training for the mental health care of people familiar to us.
Q. Why does the number of shares held by directors differ between the pages of the notice ofconvocation?
A. The higher number of shares includes those of the Officer Stocks Society. The difference is whether
the shares of the Officer Stocks Society are included or not.

Q. While your main clients are probably mostly Japanese companies, if you hire foreign talent fromoverseas universities, will they come to Japan to work or will they be dispatched to the overseas
locations of client companies? How do you envision employing foreign talent?
A. Our hiring of foreign nationals is currently limited to international students studying at Japaneseuniversities. Our vision for the future is to partner with overseas universities and hire foreign
nationals who come to Japan.
Q. The yen is depreciating, and the recruitment cost overseas is now higher than in Japan. The
recruitment cost is expected to differ between Japan and overseas. Will Artner be spending money
to ensure that the hiring standards do not go down?
A. Based on the feedback we received, we will be considering the benefits, drawbacks, ways, and thesystem of hiring foreign nationals, such as wage disparities in Japan including disparities causedby exchange rates.