Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between thistranslated document and the Japanese original, the Japanese original shall prevail.
DIGITAL HOLDINGS, Inc. assumes no responsibility for actions taken based on this translation.

(Securities code: 2389)
March 3, 2022
To our shareholders:Atsushi Nouchi
President and Group CEO
DIGITAL HOLDINGS, Inc.
6, Yonbancho, Chiyoda-ku, Tokyo
Convocation Notice of the 28th Annual General Meeting of Shareholders
We would like to inform you that the 28th Annual General Meeting of Shareholders (the “Meeting”) of DIGITALHOLDINGS, Inc. (the “Company”) will be held as described below.
In holding the General Meeting of Shareholders, from the viewpoint of preventing the spread of COVID-19,
we would like to ask those who are not feeling well on the day of the Meeting, especially those who would begreatly affected by infection, such as the elderly, those with underlying medical conditions, and those whoare pregnant, to refrain from attending the Meeting and to exercise your voting rights in advance. If the dateof the Meeting falls within the period for which a state of emergency has been declared in Tokyo, we strongly
request that you refrain from attending the Meeting, regardless of your health condition on the day of the
Meeting, as the safety of our shareholders is our top priority. Please note that no souvenirs will be handed
out to shareholders attending the Meeting in person.
The Meeting will be live streamed on the Internet. Please note that you cannot exercise your voting rights
through the live streaming. We highly appreciate your understanding and cooperation.
If you wish to exercise your voting rights in advance, please refer to the Reference Documents for the
General Meeting of Shareholders, and exercise your voting rights no later than 6:00 p.m., Thursday, March24, 2022 (JST).
1.

Date and Time: Friday, March 25, 2022 at 10:00 a.m. (JST)2.

Place:

3.

Agenda of the Meeting:Conference room, Head office, DIGITAL HOLDINGS, Inc.
5th floor, 6 Yonbancho, Chiyoda-ku, Tokyo, Japan

Matters to be reported:
I. Report on Business Report, Consolidated Financial Statements and audit results of the Consolidated
Financial Statements by the Accounting Auditor and the Audit and Supervisory Committee for the
28th Fiscal Term (from January 1, 2021 to December 31, 2021).
II. Report on the Non-Consolidated Financial Statements of the Company for the 28th Fiscal Term (fromJanuary 1, 2021 to December 31, 2021).
Proposals to be resolved:
Proposal No. 1:

Partial Amendments to the Articles of Incorporation

Proposal No. 2:

Election of Seven (7) Directors (Excluding Directors Who Are Audit and Supervisory
Committee Members)

Proposal No. 3:

Election of Four (4) Directors Who Are Audit and Supervisory Committee Members

-1-

4.

Instructions for Exercising Voting Rights(1) Exercising voting rights in writing
To vote in writing, please indicate your approval or disapproval of the proposals on the enclosed Voting Rights
Exercise Form, and return the Form by post to reach us by 6:00 p.m. Thursday, March 24, 2022 (JST).
(2) Exercising voting rights via the Internet
To vote via the Internet, please access to the “Voting Right Exercise Site (https://www.net-vote.com/)”(Japanese only), which is provided on the enclosed Voting Rights Exercise Form. Follow the instructions andindicate your approval or disapproval by 6:00 p.m. Thursday, March 24, 2022 (JST). If you want to use yoursmartphone, you can exercise your voting rights by using QR code (Please refer to the next page for details.)(3) Handling of exercising voting rights in duplicate
1) If you vote both in writing and via the Internet, voting rights exercise via the Internet shall be deemed valid.
2) If you vote more than once via the Internet, the most recent shall be deemed as valid.

Request: When attending the Meeting in person, you are kindly requested to submit the enclosed Voting
Rights Exercise Form at the reception desk. Please bring this Convocation Notice of the 28th Annual
General Meeting of Shareholders and the Reference Documents for the General Meeting of
Shareholders with you to the meeting.
Notice:The digital documents of the Convocation Notice of the Annual General Meeting of Shareholders
and the Reference Documents for the General Meeting of Shareholders are available on the
Company’s website (https://digital-holdings.co.jp/).
The English version of the Convocation Notice of the Annual General Meeting of Shareholders and theReference Documents for the General Meeting of Shareholders are available on the Company’s website(https://digital-holdings.co.jp/en/).
Any amendments to the Reference Documents for the General Meeting of Shareholders, Business
Report, Consolidated Financial Statements or Non-consolidated Financial Statements will be posted on
the Company’s website. (https://digital-holdings.co.jp/).

-2-

Instructions for Exercising Voting Rights via the Internet
You can exercise your voting rights via the Internet by accessing the Voting Right Exercise Site as instructed below
from your PCs or smartphones.
1. Accessing the Voting Right Exercise Site
[Address of Voting Right Exercise Site]
https://www.net-vote.com/
Please access the Voting Right Exercise Site at the URL provided above. You can exercise your voting rights
until 6:00 p.m. Thursday, March 24, 2022 (JST).
2. How to vote via the Internet[For PC users]
Access the Voting Right Exercise Site at the URL provided above, log in by entering the login ID and password
printed on the enclosed Voting Rights Exercise Form and follow the instructions on the screen to indicate yourapproval or disapproval of the proposals.
[For smartphone users]
Simply scan the QR code® located on the enclosed Voting Rights Exercise Form. You don’t have to enter login
ID nor password.
In case you would like to change any of your indication, access the Voting Right Exercise Site at the above
URL, log in by entering the login ID and password printed on the Voting Rights Exercise Form and follow the
instructions on the screen to indicate approval or disapproval of the proposal. (QR code® is a registeredtrademark of DENSO WAVE INCORPORATED).
3. Notes(1) Any costs arising from accessing the Voting Right Exercise Site shall be borne by shareholders.
(2) Depending on your network environments, you may not be able to access the Voting Right Exercise Site.
(3) The Voting Right Exercise Site is not accessible via some cellular phones such as feature phones.
Institutional investors can exercise their voting rights through “The Electronic Proxy Voting Platform” operated by
ICJ, Inc.
For an inquiry regarding online exercise of the voting rights, please contact the following:
Custody Service Department, IR Japan, Inc.
TEL: 0120-975-960
Business Hours: 9:00 a.m. to 5:00 p.m. (JST) (not available on Saturdays, Sundays and holidays)-3-Live Streaming of the General Meeting of Shareholders
The 28th Annual General Meeting of Shareholders will be live streamed on the Internet as follows for viewing at
home or elsewhere.
1. Date and time of the live streaming
From 10:00 a.m. to the end of the Meeting on Friday, March 25, 2022 (JST)
2. How to watch the live streaming
Access the Live Streaming Site at the URL provided below with your “Shareholder ID number” as you will be
required to enter it on the authentication screen (login screen) for shareholders. Please be sure to make a note ofyour “Shareholder ID number” before sending the enclosed Voting Rights Exercise Form by post.
◆Live Streaming Site
https://2389.ksoukai.jp

QR code®

◆ID number (9-digit number without hyphen)“Shareholder ID number” provided on the enclosed Voting Rights Exercise
Form or other such documents as dividend-related documents. (If your ID
number is eight (8) digits, add a zero (0) in front of the ID number.)◆Password (7-digit number without hyphen)“Postal code” of the registered address on the register of shareholders◆Viewing test
You can check your viewing environment in advance at the Live Streaming Site. The test page will beavailable from 10:00 a.m. Friday, March 4, 2022 to around 9:30 a.m. Friday, March 25, 2022 (JST).
For an inquiry regarding how to watch the live streaming, please contact the following (only available on the date of
the Meeting):
TEL: 03-5809-9977
Available from 9:00 a.m. to the end of the Meeting on Friday, March 25, 2022 (JST)Shareholders’ Comments
To improve communication with shareholders, we are accepting inquiries for the General Meeting of Shareholders(to distinguish from inquiries made by exercising the right to inquire under the Article 314 of the Companies Act,
hereinafter the “Comments”) through the following methods. Although they will not be regarded as formal
statements at the General Meeting of Shareholders, some of the Comments may be featured and answered during theMeeting. We highly appreciate your understanding on this matter.
Method 1: Please access the Live Streaming Site at the URL provided above, log in with your Shareholder ID
number and Postal code, and enter your comments in the “Ask a Question in Advance” section. Eachshareholder may comment up to three times (up to 300 characters in Japanese per comment). Please send
your comments by Friday, March 18, 2022 (JST).
Method 2: Enter your comment on the comment submission form on the screen of Live Streaming Site at the URL
provided above and send it after the opening of the Meeting and up until the chairperson declares theacceptance closed.

Matters to Be Noted on the Operation of the General Meeting of Shareholders•

To prevent the spread of COVID-19, the number of seats available for shareholders at the Meeting will belimited in order to ensure there is enough space between seats. Therefore, even if you come to the venue on theday, we may refuse your entry into the venue.

•

Placing the top priory on the safety of shareholders, our staff will check your body temperature at the reception
and if your body temperature is at 37.5 degree Celsius or above, or if you look unwell, we may refuse your-4-

entry into the venue.
•

All shareholders who attend the Meeting in person will be requested to wear a mask. To avoid the risk ofinfection among shareholders attending the Meeting, if you refuse to wear a mask, we may refuse your entry
into the venue.

•

From the viewpoint of preventing the spread of COVID-19, some officers may attend the Meeting via
telecommunication means from a remote location.

•

As the Q&A session will also be live streamed, if you intend to attend the Meeting in person and do not wish
that your name be live streamed, all you have to do is to state your number written on your attendance card at
making your comment.

•

In consideration of the privacy of shareholders attending the Meeting in person, the live streaming video will be
shot from the rear of the space and limited to showing the area where the chairperson and officers are seated.
However, you may inevitably appear in the streaming. We highly appreciate your understanding.

•

While watching the live streaming, the video or audio may be distorted depending on the environment of yourPC or other device (model, specifications, etc.) or the environment of the Internet connection (network
conditions, connection speed, etc.). Any costs arising from watching the live streaming, including
communication charges, shall be borne by shareholders.

•

While every effort will be made to ensure the live streaming is available, the live streaming may be suspended
or cancelled due to unavoidable circumstances such as deterioration in the communication environment or
system failure.

•

No souvenir will be handed out to shareholders attending the Meeting in person.

-5-

Business Report (January 1, 2021 to December 31, 2021)
1.

Overview of the Group(1) Business for the Year Ended December 31, 2021
DIGITAL HOLDINGS, Inc. and its consolidated subsidiaries (hereinafter the “Group”) are surrounded by a businessenvironment where the domestic market is shrinking due to declining population of Japan accelerated by its aging
society with a falling birth rate. However, the recent rapid advances in science, technology and innovation haveboosted the trend to realize digital transformation (DX) that transforms conventional products and services as well as
business models by leveraging data and digital technologies.
Furthermore, based on the recognition that we will see progress of the realization of “Society 5.0” — a society thataims to achieve a high degree of convergence between cyberspace (virtual space) and physical space (real space),
which brings new value to industry and society in ways not previously possible — proposed by the Japanese Cabinet
Office, we expect that such progress will further drive the growth of demand for “digital shift” relating to“information, human resources, products and money,” which are what the Group pursues to offer.
With the sights set on the vision of becoming a “true digital shift company committed to creating new value that will
be a driver for Society 5.0 as well as resolving social challenges” by 2030, the Group has set a management policy tomaximize corporate value and cash flows by leading any and all corporate “digital shift,” and by realizing various
industrial transformations (IX). As such, “OPT Holding, Inc.” changed its trade name to “DIGITAL HOLDINGS,
Inc.” on July 1, 2020.
The Group also aims to expand its business by shifting its main business domain from the Marketing Business,
centering on support for clients’ sales promotion, to the Digital Shift-related Businesses, thereby achieving a targetof “corporate value of JPY 1 trillion by 2030.”
As a results of business operations based on the above management policy, the Group reported operating results forthe fiscal year ended December 31, 2021 (hereinafter the “current fiscal year”) with net sales of JPY 98,515 million(up 11.0% YoY), gross profit of JPY 25,229 million (up 41.8% YoY), operating profit of JPY 10,922 million (up237.0% YoY), EBIT of JPY 15,300 million (up 147.8% YoY) and EBITDA of JPY 16,888 million (up 122.5%
YoY).
From the current fiscal year, the Group has changed its business segments from the previous two segments ofMarketing Business and Synergy Investment Business to three segments of Digital Shift Business, Advertising
Business, and Financial Investment Business. The following comparisons with the same period of the previous fiscal
year are based on the figures after the reclassification.
The full-year operating results for the new segments are as follows.

Digital Shift Business
Digital Shift Business consists of digital shift consulting support, SaaS product development and sales, and DX
staffing service introduction led by Digital Shift, Inc. and Re:teigi, Inc., and AI staffing platform operation anddevelopment led by SIGNATE Inc.
In the current fiscal year, the Digital Shift Business segment steadily expanded with net sales of JPY 9,055 million(up 13.9% YoY), but in terms of profits, gross profit was JPY 2,665 million (down 9.6% YoY), operating loss was
JPY 741 million (operating profit of JPY 237 million in the previous fiscal year), EBIT was negative JPY 743
million (JPY 322 million in the previous fiscal year), and EBITDA was negative JPY 469 million (JPY 463 million
in the previous fiscal year) mainly due to expansion of prior investments.

Advertising Business
Advertising Business consists of the Internet advertising agency business, solution development and sales, etc., led
by OPT, Inc. and SoldOut, Inc.
As for operating results of the Advertising Business segment for the current fiscal year, as a result of efforts toreview unprofitable projects, while net sales remained flat at JPY 76,193 million (down 0.1% YoY), gross profit
improved to JPY 11,355 million (up 2.3% YoY). In addition, as a result of our efforts to control selling, general andadministrative expenses, operating profit was JPY 3,222 million (up 88.8% YoY), EBIT was JPY 3,147 million (up91.5% YoY), and EBITDA was JPY 3,511 million (up 72.6% YoY).

-6-

Financial Investment Business
Financial Investment Business consists of the investment business managed by DIGITAL HOLDINGS, Inc., Bonds
Investment Group, Inc., BIG No. 1 Limited Partnership for Investment, BIG No. 2 Limited Partnership for
Investment, and OPT America, Inc.
As for operating results of the Financial Investment Business segment for the current fiscal year, net sales, grossprofit, and operating profit expanded significantly to JPY 14,184 million (up 168.6% YoY), JPY 11,366 million (up195.1% YoY), and JPY 11,059 million (up 203.9% YoY), respectively, mainly due to the recording of gain on saleof shares of RAKSUL Inc., which the Company held as operational investment securities. In addition to the above,
non-operating profit from the initial public offering of shares in the U.S. held by an investment fund in which theGroup has a stake was recorded, resulting in EBIT of JPY 15,537 million (up 134.4% YoY) and EBITDA of JPY
16,163 million (up 127.0% YoY).
The Company discloses IRR (Internal Rate of Return) to enhance the transparency of investment returns. The
definition of IRR has been partially changed since the first quarter of the current fiscal year. The calculation of IRR
is now applied to stocks invested in by the Financial Investment Business since fiscal 2013, and the details of its
calculation method are disclosed in the footnote. As of the end of the current fiscal year, the after-tax IRR increasedby 2.2% from the end of the previous fiscal year to 20.8%, mainly due to the initial public offering of U.S. stocks
held by investment funds in which the Group has invested and the rise in prices of listed stocks held by the Group.
AUM (Assets Under Management) decreased by 38.0% from the end of the previous fiscal year to JPY 16,027
million, mainly due to the ongoing sale of listed stocks held by the Group.

The definitions of IRR and AUM are as follows:
Internal Rate of Return (IRR)
Prerequisites for calculation-

Subject to: Securities invested in by the Financial Investment Business from 2013 through December
31, 2021-

The reference date for calculation: December 31, 2021-

Method:-1.

Impaired investment: Calculated as if they were sold at the net asset value after impairment.

2.

Investment involved in financing in the recent period: Calculated as if they were sold at the valueof relevant financing.

3.

IPOed investment: Calculated as if they were sold at the market value as of the reference date.

4.

Fund: Calculated with the amount collected until the end of the reporting period and the bookvalue as of the end of reporting period.

5.

Others: Any other investment with no change in their acquisition cost due to sale, impairment,
financing, IPO or the like are calculated as if they were sold on the reference date at the acquisition
cost.
Income taxes are included.

Assets Under Management (AUM)
AUM is defined as aggregate amount of 1) book value of affiliates’ shares and 2) fair value after considering
impairment of operational investment securities and investment securities.
(1)

Shares of affiliates: Stated at book value(2)

Operational investment securities and investment securities: Each security’s fair market value is calculated
depending on the classification shown below:i.

Notes or securities of which investment amount is small: Acquisition costii.

Listed companies’ shares: Closing price at the end of reporting periodiii. Securities involved in financing in the recent period: Based on the value of relevant financing-7-

iv. Other securities: Calculated by using the comparable multiple method, DCF method, or net asset
valuation method depending on each company’s performance.

Management costs of DIGITAL HOLDINGS, Inc.
In the management division of DIGITAL HOLDINGS, Inc., selling, general and administrative expenses for thecurrent fiscal year were JPY 2,601 million (up 11.8% YoY), mainly due to an increase in personnel expenses.

(2) Issues to be Addressed
The following six items are key business and financial issues to be addressed by the Group.
1. Maintain high growth rate in the Digital Shift Business
While the demand for “digital shift” in Japan has been on the rise, the competition among corporate DXrelated services has been increasingly fierce as they are offered by a variety of companies, such as leading
IT vendors and consulting firms. The Group intends to achieve high growth rate in the Digital Shift Businessby offering services utilizing the client base and marketing know-how cultivated through the conventional
Internet advertising agency business.
2. Improve profitability in the Advertising BusinessTotal Internet advertising expenditures in Japan surpassed television media advertising expenditures for the
first time in 2019, and the market size of the Internet advertising business, which is the core domain in theGroup’s Advertising Business, has expanded to exceed JPY 2 trillion. Meanwhile, the competition among
peers is intensifying. The Group intends to secure profitability by such means as reviewing its operational
processes to promote the offshoring and nearshoring of operations and driving the automation ofprogrammatic advertising operations.
3. Secure a certain size of investment in digital shift-related companies
The Group plans to acquire companies related to the Digital Shift Business using capital gains arising frominvestments in Internet-related companies in the Financial Investment sub-segment as funds for acquisition.
Investments in digital shift-related companies tend to be valued higher due to their high growth potential.
However, we intend to select candidate investees by making full use of knowledge and network of personal
contacts that the Group has cultivated in Internet-related industries since its foundation.
4. Reorganize Group’s operating structure
The Group has been working on the reorganization of its operating structure to adapt to changes of businessin order to develop and secure human resources capable of supporting the future growth of its corebusinesses. In addition, the Group also intends to improve the decision-making process for businessdevelopment of the Group, which is affected by the significant development of technology.
5. Adapt to changes in the external business environment amid the COVID-19 pandemic
The Group’s operating results, especially in the Advertising Business, have been adversely affected bydecreased demand for advertising caused by constrained consumer activity amid the COVID-19 pandemic.
The Group has been working on the adoption of new working styles that can flexibly adapt to changes in thesocial environment. As such, the Group intends to mitigate the impact of the COVID-19 pandemic on its
operating results by promoting the reduction of expenses related to office and sales activities.
6. Achieve ROE of 10%
The Group has set the achievement of ROE of 10% on a constant basis as a key objective in order to makedecisions with a focus on investment efficiency to improve its profitability and capital efficiency. To thisend, the Group intends to give consideration to shareholder return policies such as repurchase of treasury
shares taking into account the level of internal reserves, while improving the profitability of its corebusinesses.

(3) Capital Expenditure
There were no significant capital expenditures.
(4) Financing
There are no special matters to be noted.

-8-(5) Significant Reorganizations and Other Such Events
1) The Company excluded OPT SEA Pte., Ltd. from the scope of consolidation of the Group because its
liquidation was completed on March 22, 2021.
2) On April 1, 2021, OPT, Inc., a subsidiary of the Company, conducted an absorption-type company
split with OPT, Inc. as the splitting company and the Company’s subsidiaries Digital Shift, Inc. andRe:teigi, Inc. (formerly OptDigital, Inc.) as the succeeding companies. As a result, the digitalmarketing business of OPT, Inc. was transferred to Digital Shift, Inc., and the DX business of OPT,
Inc. was transferred to Re:teigi, Inc.
3) On April 1, 2021, OPT, Inc., a subsidiary of the Company, conducted an absorption-type merger with
OPT, Inc. as the surviving company and Heartlass, Inc., a subsidiary of the Company, as the dissolved
company.
(6) Assets, net sales and income(Yen in millions,
unless otherwise stated)

FY2018FY2019FY2020

FY2021

Net sales

87,21689,95388,76898,515

Ordinary profit

1,669

2,833

4,358

14,662

Profit attributable toowners of parent

1,922

1,928

3,750

10,231

Earnings per share- basic (Yen)

84.66

84.23

167.86473.28

Total assets

56,551

61,132

71,43469,728

Net assets

27,13332,60140,01840,930(Notes) 1. Earnings per share is calculated based on the average number of shares issued (total shares issued excluding treasury
shares) during each fiscal year.
2. (Application of “Partial Amendments to Accounting Standard for Tax Effect Accounting” and relevant Guidance)“Partial Amendments to Accounting Standard for Tax Effect Accounting” (ASBJ statement No. 28, February 16, 2018)
and relevant Guidance were applied from the beginning of the 25th Fiscal Term. Deferred tax assets are presented underinvestments and other assets and deferred tax liabilities are presented under noncurrent liabilities.

(7) Status of Parent Company and Principal Subsidiaries (As of December 31, 2021)
1) Status of Parent Company
Not applicable2) Status of Principal Subsidiaries
Company Name

Capital(Yen in millions)Voting rights owned by
the Company

Major businesses

OPT, Inc.

100

100.0%

Internet advertising agency business

SoldOut, Inc.

681

55.9%

Advertising agency business serving mid-sized
and venture companies

Digital Shift, Inc.

474

100.0%

Support businesses related to digital shift

OPT America, Inc.

2,405

100.0%

Financial investment business(Notes) 1. The Company has 21 consolidated subsidiaries, including those in the table above.
2. The Company does not have any specified wholly owned subsidiaries as defined in the Companies Act.

-9-

(8) Major Businesses (As of December 31, 2021)
The Group is comprised of DIGITAL HOLDINGS, Inc. and 21 consolidated subsidiaries as of the end of the
fiscal year ended December 31, 2021. It operates the Digital Shift Business segment, the Advertising Businesssegment, and the Financial Investment Business segment. The Digital Shift Business provides consulting
support centered on the digital shift, development and sales of SaaS products, operation and development of AI
staffing platforms, and DX staffing services. The Advertising Business is engaged in the Internet advertising
agency business and related solution development and sales. The Financial Investment Business invests inventure capital, manages funds, and supports the management of investee companies.
Segment

Major businesses

Digital Shift Business

Advertising Business
Financial Investment Business• Digital shift consulting support• SaaS product development and sales• AI staffing platform operation and development• DX staffing service, etc.
• Internet advertising agency business• Solution development and sales, etc.
• Venture capital investment• Fund management• Management support for investee companies, etc.

(9) Major Offices (As of December 31, 2021)
1) Main Office
OfficeHead Office

Address
Chiyoda-ku, Tokyo

2) Subsidiaries
Company Name
OPT, Inc.
SoldOut, Inc.
Digital Shift, Inc.
OPT America, Inc.

Address
Chiyoda-ku, Tokyo
Bunkyo-ku, Tokyo
Chiyoda-ku, Tokyo
California, U.S.A.

(10) Workforce (As of December 31, 2021)
Number of Employees

Change from Dec. 31, 2020

1,518

-53

(Notes) 1. Part-time, contractors and temporary workers are not counted as employees.
2. Personnel seconded to positions outside of the Group are not counted as employees.

(11) Main Lenders (As of December 31, 2021)
Amount borrowed(Yen in millions)
3,500

LenderMizuho Bank, Ltd.
Sumitomo Mitsui Banking Corporation

3,061

MUFG Bank, Ltd.

1,500

Resona Bank, Limited.

500

Sumitomo Mitsui Trust Bank, Limited

450(12) Other Significant Matters Concerning the GroupNot applicable- 10 -

2. Status of the Company(1) Matters Concerning Shares (As of December 31, 2021)
1) Total Number of Shares Authorized to Be Issued
86,630,400 shares2) Total Number of Shares Issued
23,817,700 shares (including 2,613,543 treasury shares)
3) Number of Shareholders
6,6104) Major Shareholders (Top 10)
Number of Shares Held
(Shares)
4,520,200
1,355,000
1,036,900
885,000
755,800
633,300
600,794
577,400
439,953

Shareholder
HIBC Co., Ltd.
The Master Trust Bank of Japan, Ltd. (Trust account)
Tomohito Ebine
Atsushi Nouchi
Mynavi Corporation
Custody Bank of Japan, Ltd. (Trust account)
Goldman Sachs International
The Bank of New York, JASDEC Treaty Account
STATE STREET BANK AND TRUST COMPANY 505103
NOMURA PB NOMINEES LIMITED OMNIBUS-MARGIN(CASHPB)

433,790

Ownership of Shares (%)
21.31%
6.39%
4.89%
4.17%
3.56%
2.98%
2.83%
2.72%
2.07%
2.04%

*1. Although the Company holds 2,613,543 treasury shares, it is omitted from the above list of major shareholders.
The treasury shares (2,613,543 shares) do not include the Company’s shares held by Digital Holdings Employee Stock Ownership
Plan (171,488 shares).
*2. Ownership of shares is calculated based on shares outstanding (the number of shares issued net of treasury shares) and rounded
off to two decimal places.
*3. HIBC Co., Ltd., is an asset management company wholly owned by the Chairperson of the Company, Noboru Hachimine.
*4. The Chairperson of the Company, Noboru Hachimine, holds 5,000 shares of the Company.
*5. Time and Space, Ltd., an asset management company wholly owned by the President and Group CEO of the Company, Atsushi
Nouchi, holds 400,800 shares of the Company.
*6. Dalton Investments LLC held the following shares as of November 29, 2021, which was reported in the Large Shareholding
Report (Change Report) submitted on December 2, 2021. However, the Company could not confirm the number of shares actually
held by the entity as of December 31, 2021. Thus, major shareholders are described based on the register of shareholders as ofDecember 31, 2021.
The following table is the summary of the Change Report.
Name or Name of Institution
Address
Number of shares held*
1601 Cloverfield Blvd. Suite 5050N,
Dalton Investments LLC
Santa Monica, California, 90404
1,665,700
United States(Note) The number of shares held is described in the Change Report as of December 2, 2021.
*7. 3D Investment Partners Private Ltd. held the following shares as of July 22, 2019, which was reported in the Large Shareholding
Report (Change Report) submitted on July 29, 2019. However, the Company could not confirm the number of shares actually heldby the entity as of December 31, 2021. Thus, major shareholders are described based on the register of shareholders as ofDecember 31, 2021.
The following table is the summary of the Change Report.
Name or Name of Institution
Address
Number of shares held*
250 North Bridge Road
3D Investment Partners Private Ltd.
#13-01 Raffles City Tower,
2,268,100
Singapore 179101(Note) The number of shares held is described in the Change Report as of July 29, 2019.

5) Other Significant Matters Concerning Shares
There were no significant matters concerning shares.

- 11 -

(2) Matters Concerning Corporate Officers
1) Matters Concerning Directors (As of December 31, 2021)
Position in Company

Name

Chairperson

Noboru Hachimine

President and Group CEO

Atsushi Nouchi

Director and Group COO
Director
Director

Daisuke Kanazawa
Shusaku Minoda
Tomoyuki Mizutani

Director

Koji Yanagisawa

Director

Yasuhiro Ogino

Director (Chairperson of Audit andSupervisory Committee, full-time)

Fumiyuki Shinomiya

Director (Audit and Supervisory
Committee member, full-time)

Yuki Okabe

Director (Audit and Supervisory
Committee member)

Toshio Yamaue

Director (Audit and Supervisory
Committee member)

Masahiro Yamamoto

Area of Responsibility andSignificant Other Positions
Director at SoldOut, Inc.
External Director at UT Group Co., Ltd.
Chairperson and Representative Director at
Digital Shift, Inc.
Representative Director at Bonds Investment
Group, Inc.
Director, Re:teigi, Inc.

Director, Executive Vice President & CFO at
ZOZO, Inc.
External Director at COLOPL, Inc.
Director and CFO at ANDPAD Inc.
Auditor at OPT, Inc.
Auditor at Re:teigi, Inc.
Auditor at RePharmacy, Inc.
Auditor at Vankable, Inc.
Certified Public Accountant
Auditor at SoldOut, Inc.
Auditor at Digital Shift, Inc.
Auditor at Bonds Investment Group, Inc.
LawyerExternal Director at TOHOKUSHINSHAFILM CORPORATION
Certified Public Accountant
Outside Audit & Supervisory Board Member at
Nippon Suisan Kaisha, Ltd.

(Notes) 1. Directors Tomoyuki Mizutani, Koji Yanagisawa and Yasuhiro Ogino, Director and Chairperson of the Audit andSupervisory Committee (full-time) Fumiyuki Shinomiya, Director and Audit and Supervisory Committee member (fulltime) Yuki Okabe, and Directors and Audit and Supervisory Committee members Toshio Yamaue and Masahiro
Yamamoto are External Directors.
2. Director and Chairperson of the Audit and Supervisory Committee (full-time) Fumiyuki Shinomiya had a long career at afinancial institution and possesses considerable expertise in finance and accounting.
3. Director and Audit and Supervisory Committee member (full-time) Yuki Okabe has experience as an auditor at multiple
listed companies and possesses considerable expertise in finance and accounting as a Certified Public Accountant (CPA).
4. Director and Audit and Supervisory Committee member Toshio Yamaue possesses considerable expertise in corporate
legal affairs as a lawyer.
5. Director and Audit and Supervisory Committee member Masahiro Yamamoto has experience in supporting numerous
companies as a Representative Partner at audit firms and possesses considerable expertise in finance and accounting as a
CPA.
6. The Company established a full-time Audit and Supervisory Committee position to strengthen audit and oversightfunctions, improve information gathering and increase audit effectiveness.
7. The Company has designated Directors Tomoyuki Mizutani, Koji Yanagisawa, and Yasuhiro Ogino, Director andChairperson of the Audit and Supervisory Committee (full-time) Fumiyuki Shinomiya, Director and Audit and Supervisory
Committee member (full-time) Yuki Okabe, and Directors and Audit and Supervisory Committee members Toshio
Yamaue and Masahiro Yamamoto as independent directors in accordance with the Tokyo Stock Exchange’s independence
standards and filed a notification to that effect with the Tokyo Stock Exchange.

2) Outline of liability limitation agreement
Pursuant to the provisions of Article 427, paragraph 1 of the Companies Act and Article 32, paragraph 2 of
the Company’s Articles of Incorporation, the Company and Directors (excluding Executive Directors, etc.)
have entered into agreements limiting their liability for damages under Article 423, paragraph 1 of theCompanies Act. The maximum amount of liability for damages under the said agreement is the statutory
prescribed minimum amount.
3) Outline of Directors and Officers liability insurance contract, etc.
The Company has concluded Directors and Officers liability insurance (D&O insurance) contracts with aninsurance company, whereby the Directors of the Company and the Directors and the Auditors of theCompany’s subsidiaries are the insureds. The insurance contracts cover losses that may arise from aninsured’s assumption of liability incurred in the course of the performance of duties, or receipt of claims- 12 -

pertaining to the pursuit of such liability. The full amounts of the insurance premiums for the insurance
contracts are borne by the respective companies and the insureds do not bear any of the premiums.
4) Remuneration, etc. for Directors
A. Policy for determining the details of remuneration, etc. for officers
At the Board of Directors meeting held on February 19, 2021, the Company passed a resolution on thepolicy for determining the details of individual remuneration, etc. for Directors. When passing the said
resolution by the Board of Directors, the Board of Directors consulted the Nomination and Remuneration
Committee regarding the details of the resolution in advance and received its report.
As for individual remuneration, etc. for Directors for the current fiscal year, the Board of Directors has
confirmed that the method of determining the details of remuneration, etc. and the details of remuneration,etc. determined are consistent with the decision policy resolved by the Board of Directors and that thereport from the Nomination and Remuneration Committee is respected, and has determined that the detailsof remuneration, etc. are in line with the relevant decision policy.
The details of the policy for determining the details of individual remuneration, etc. for Directors are as
follows:
a. Basic policy
The Company’s remuneration consists of basic remuneration and performance-linked remuneration.
However, only basic remuneration is paid to Non-Executive Directors (excluding External Directors andDirectors who are Audit and Supervisory Committee members), External Directors (excluding Directors
who are Audit and Supervisory Committee members), and Directors who are Audit and Supervisory
Committee members, who are all responsible for governance functions. The Company’s basic policy is thatsuch remuneration should contribute to securing an excellent management team for the realization of the
management plan and that such remuneration should raise awareness of their contribution to medium- tolong-term improvement of business performance and corporate value.
b. Policy for determining the amount of individual basic remuneration (monetary remuneration) (including
policy for determining the timing or conditions for granting remuneration, etc.)
The basic remuneration of Directors shall be fixed monthly remuneration consisting of compensation for
representation, compensation for resolution and supervision, and compensation for business execution, andshall be determined by comprehensively taking into consideration the required responsibilities and external
compensation database services.
c. Policy for determining the details of performance-linked remuneration, etc. and the method for calculating
the amount or number of such remuneration (including policy for determining the timing or conditions for
granting remuneration, etc.)
Performance-linked remuneration shall be medium- to long-term monetary remuneration for Executive
Directors only and shall be paid in a lump sum in the fiscal year following the relevant three fiscal years, inaccordance with the rate of achievement, only when the rate of achievement of the KPIs reaches the target,by setting the market capitalization (set for every three fiscal years), which is a key indicator for improving
the corporate value of the Company, as the KPI. The values to be used as indicators in the performancelinked remuneration will be reviewed and revised periodically in response to changes in the businessenvironment and based on the report of the Nomination and Remuneration Committee.
d. Policy for determining the ratio of the amount of monetary remuneration, the amount of performancelinked remuneration, etc., or the amount of non-monetary remuneration, etc., to the amount of individual
remuneration, etc. of Directors
The Nomination and Remuneration Committee shall make a report on the ratio of remuneration for
Executive Directors by type of remuneration based on external remuneration database services and otherinformation. Thereafter, the Board of Directors shall determine the details of remuneration, etc. for each
Director within the scope of the ratio of remuneration by type indicated in the report, while respecting thecontent of the report of the Nomination and Remuneration Committee.
e. Matters related to decisions on the details of individual remuneration, etc. for Directors
Individual remuneration, etc. of Directors is deliberated by the Nomination and Remuneration Committee,
a voluntary body chaired by an External Director, and reported to the Board of Directors for resolution by- 13 -

the Board of Directors. Remuneration for Audit and Supervisory Committee members is determinedthrough consultation of the Audit and Supervisory Committee with the consent of all Audit andSupervisory Committee members.
B. Total amount of remuneration, etc. for the current fiscal year
Subgroup
Directors (excluding
those who are Audit andSupervisory Committee
members)(External Directors’share thereof)
Directors who are Audit
and Supervisory
Committee members(External Directors’share thereof)
Total(External Directors’share thereof)

Total amount of
remuneration, etc.
(Yen in millions)

Total amount of remuneration, etc. by type
(Yen in millions)
Performance-linked
Non-monetary
Basic remuneration
remuneration, etc.
remuneration, etc.

Number of
eligible officers(Persons)

161
(30)

144
(30)

–
(–)

17
(–)

7
(3)

37
(37)

37
(37)

–
(–)

–
(–)

4
(4)

198
(67)

181
(67)

–
(–)

17
(–)

11
(7)

(Notes) 1. Remuneration, etc. for Directors does not include salaries earned as employees by Directors who concurrently holdemployee positions.
2. The above table includes JPY 17 million of amortization expense recorded for restricted stock compensation for one
Director for the current fiscal year.
3. At the Annual General Meeting of Shareholders held on March 25, 2016, shareholders passed a resolution to set the
remuneration for Directors (excluding those who are Audit and Supervisory Committee members) at up to JPY 200 million
per year. The number of Directors (excluding those who are Audit and Supervisory Committee members) as of theconclusion of the said General Meeting of Shareholders is five.
4. At the Annual General Meeting of Shareholders held on March 29, 2018, shareholders passed a resolution to set the total
remuneration for Directors (excluding those who are External Directors or Audit and Supervisory Committee members) for
the grant of restricted stock at up to JPY 550 million per year. The number of Directors (excluding those who are External
Directors or Audit and Supervisory Committee members) as of the conclusion of the said General Meeting of Shareholders
is four.
5. At the Annual General Meeting of Shareholders held on March 27, 2020, shareholders passed a resolution to set the
remuneration for Directors who are Audit and Supervisory Committee members at up to JPY 50 million per year. The
number of Directors who are Audit and Supervisory Committee members as of the conclusion of the said General Meetingof Shareholders is four.
6. At the Annual General Meeting of Shareholders held on March 26, 2021, shareholders passed a resolution to set theperformance-linked remuneration for Directors who are Executive Directors at up to JPY 600 million per year. The number
of Directors who are Executive Directors as of the conclusion of the said General Meeting of Shareholders is three.

- 14 -

5) Matters Concerning External Directors
Position in the Company

Director

Name

Significant Concurrent
Positions at Other Entities

Tomoyuki
Mizutani

Director

Koji
Yanagisawa

Director, Executive Vice
President & CFO at ZOZO,Inc.
External Director at
COLOPL, Inc.

Director

Yasuhiro
Ogino

Director and CFO at
ANDPAD Inc.

Director(Chairperson of the Audit
and Supervisory Committee(full-time))

Fumiyuki
Shinomiya

Auditor at OPT, Inc.
Auditor at Re:teigi, Inc.
Auditor at RePharmacy, Inc.
Auditor at Vankable, Inc.

Director(Audit and Supervisory
Committee member (fulltime))

Yuki
Okabe

CPA
Auditor at SoldOut, Inc.
Auditor at Digital Shift, Inc.
Auditor at Bonds Investment
Group, Inc.

Director(Audit and Supervisory
Committee member)

ToshioYamaueLawyerExternal Director at
TOHOKUSHINSHA FILM
CORPORATION

Masahiro
Yamamoto

CPA
Outside Audit &Supervisory Board Member
at Nippon Suisan Kaisha,Ltd.

Director(Audit and Supervisory
Committee member)

Main Activities at the Company
Mr. Mizutani attended 17 of 18 Board meetings held in
2021. He appropriately spoke up at meetings to ensure
the validity and appropriateness of the Board’s decisionmaking from an objective and neutral standpoint
independent from management and fulfilled his role
appropriately, capitalizing on his wealth of experienceand long achievement in corporate management.
Mr. Yanagisawa attended all 18 Board meetings held in
2021. He appropriately spoke up at meetings to ensure
the validity and appropriateness of the Board’s decisionmaking from an objective and neutral standpoint
independent from management and fulfilled his role
appropriately, capitalizing on his experience as CFO andothers at a growing company as well as broad insight inoverall business administration centered on accounting,finance, IR, legal affairs and corporate governance.
Mr. Ogino attended all 18 Board meetings held in 2021.
He appropriately spoke up at meetings to ensure thevalidity and appropriateness of the Board’s decisionmaking from an objective and neutral standpoint
independent from management and fulfilled his role
appropriately, capitalizing on his experience as CFO andothers at growing companies as well as broad insight inoverall business administration centered on businessdevelopment and M&A.
Mr. Shinomiya attended all 18 Board meetings and all 13
Audit and Supervisory Committee meetings held in 2021.
He appropriately provided valuable perspectives on
agenda items and other discussions and fulfilled his role
appropriately, capitalizing on his insight and wealth ofdomestic and international experience, mainly in thefinancial sector.
Ms. Okabe attended all 18 Board meetings and all 13
Audit and Supervisory Committee meetings held in 2021.
She appropriately provided valuable perspectives on
agenda items and other discussions and fulfilled her role
appropriately, capitalizing on her career as a CPA as well
as experience in serving as an auditor at multiple listedcompanies.
Mr. Yamaue attended all 18 Board meetings and all 13
Audit and Supervisory Committee meetings held in 2021.
He appropriately provided valuable perspectives on
agenda items and other discussions and fulfilled his role
appropriately from lawyer’s perspectives.
Mr. Yamamoto attended all 18 Board meetings and all 13
Audit and Supervisory Committee meetings held in 2021.
He appropriately provided valuable perspectives on
agenda items and other discussions and fulfilled his role
appropriately, capitalizing on his career as a CPA as well
as experience in supporting numerous companies as a
Representative Partner at audit firms.

(Notes) 1. The Company’s relationships with ZOZO, Inc. and COLOPL, Inc., two companies at which Director Mr. Yanagisawa
holds positions, do not warrant disclosure.
2. The Company’s relationship with ANDPAD Inc., at which Director Mr. Ogino holds a position, does not warrant
disclosure.
3. OPT, Inc., Re:teigi, Inc., RePharmacy, Inc., and Vankable, Inc., at which Director and Chairperson of the Audit andSupervisory Committee (full-time) Mr. Shinomiya holds positions, are subsidiaries of the Company.
4. SoldOut, Inc., Digital Shift, Inc., and Bonds Investment Group, Inc., at which Director and Audit and Supervisory
Committee member (full-time) Ms. Okabe holds positions, are subsidiaries of the Company.
5. The Company’s relationship with TOHOKUSHINSHA FILM CORPORATION, at which Director and Audit andSupervisory Committee member Mr. Yamaue holds a position, does not warrant disclosure.
6. The Company’s relationship with Nippon Suisan Kaisha, Ltd., at which Director and Audit and Supervisory Committee
member Mr. Yamamoto holds a position, does not warrant disclosure.

- 15 -

(3) Accounting Auditor
1) Name KPMG AZSA LLC
2) Amount of Compensation(Yen in millions)45
Accounting auditor’s compensation for fiscal year ended December 31, 2021
79
Total monetary amount payable to the Accounting Auditor by the Company and its subsidiaries(Notes) 1. The audit agreement between the Company and its Accounting Auditor does not explicitly distinguish thecompensation for audit services performed pursuant to the Companies Act from the compensation for audit
services performed pursuant to the Financial Instruments and Exchange Act. Given disaggregating compensation
between the two types of audit services is not feasible, the Company is disclosing the above total amount as its
Accounting Auditor’s compensation for the fiscal year ended December 31, 2021.
2. The Audit and Supervisory Committee approved the Accounting Auditor’s compensation after performing
required verification of the appropriateness of the Accounting Auditor’s audit plan, audit performance and basis
for calculating estimates of its compensation.

3) Policy for Dismissal or Non-reappointment of Accounting Auditor
If the Audit and Supervisory Committee decides that the Accounting Auditor needs to be replaced for
failure to perform its duties or for other reasons, it shall draft a proposal regarding dismissal or nonreappointment of the Accounting Auditor to be submitted to a general meeting of shareholders. Additionally,
if any of the causes for dismissal fall into the provisions of Article 340, paragraph 1 of the Companies Act,
the Audit and Supervisory Committee may dismiss the Accounting Auditor with the unanimous consent of
all of its members.
If the Accounting Auditor is dismissed, an Audit and Supervisory Committee member selected by the Audit
and Supervisory Committee shall report on the dismissal, including the reason(s) for it, at the earliest
general meeting of shareholders convened after the dismissal.

- 16 -

3.

The Systems and Policies of the Group(1) Systems for Ensuring the Appropriateness of Business Operation
1) Controls to Ensure the Company and Its Subsidiaries’ Directors and Employees Comply with Laws andRegulations, and Articles of Incorporation in Executing Their Duties
Under the directions and orders of those responsible for Group compliance, the division responsible for theCompany’s compliance conducts training sessions and prepares and distributes manuals in accordance withthe “Group Compliance Rules,” working to improve the compliance knowledge of the Directors andemployees of the Company and its subsidiaries, and to cultivate a mindset of respect for compliance. Basedon the “Group Internal Audit Rules,” the division responsible for the Company’s audit conducts regular
audits of the execution of duties and confirms that the execution of duties complies with laws andregulations, and the Articles of Incorporation.
2) Systems Related to Retention and Management of Information Concerning Execution of Duties by theCompany and Its Subsidiaries’ Directors
Regarding information on important decision-making and reports, the Company and its subsidiaries’
Directors prepare, retain and manage documents and electronic records in accordance with the “Group
Authority Rules,” “Group Confidentiality Protection Rules” and “Group Document Management Rules.”The Company’s subsidiaries keep such information readily accessible if requested to do so by theCompany’s Audit and Supervisory Committee members or their own Auditors.
3) Rules and Other Systems Related to Management of the Company and Its Subsidiaries’ Risk of Losses
Based on the “Group Risk Management Basic Guidelines” and “Group Risk Management Rules”
established by the Board of Directors, the Company operates the Group Risk Management Committee
composed of the Company’s officers, mainly those responsible for Group risk. The Group Risk
Management Committee selects important risks, prepares annual response plans and conducts monitoring,and reports the status of Group risk management, including the results of such monitoring, to the Board of
Directors on an as-needed basis. The Company’s subsidiaries have implemented their own controls for
managing risks, including the risk of losses, to the extent needed by their scale, attributes and otherrelevant circumstances in accordance with the “Group Risk Management Rules.”4) Systems to Ensure the Company and Its Subsidiaries’ Directors Execute Their Duties Effectively
The Company and its subsidiaries prepare business plans in accordance with the “Group Finance andAccounting Rules,” explicitly set operating performance targets on a company-wide basis and clarify how
they evaluate performance. They pursue improvement in operating efficiency by clearly defining everyorganizational division’s responsibilities with respect to operating performance. The Company and its
subsidiaries also analyze and make decisions on significant management matters in accordance with the“Group Authority Rules,” working to ensure operating efficiency.
5) Systems to Ensure the Appropriateness of Business Operation of the Group Consisting of the Company
and Its Subsidiaries
To ensure the Group’s appropriateness of business operation, the Company supervises its subsidiaries as
required based on their respective circumstances in accordance with the “Group Authority Rules.”Additionally, in the Group Executive Officer meetings held monthly, the Company’s Directors andsubsidiaries’ management teams promote information-sharing and effective communication among theGroup and alignment of the “Group Management Policies” by exchanging information on importantmatters affecting the Group as a whole.
6) Matters Related to Employees Requested by Audit and Supervisory Committee of the Company to Assist
with Its Duties
When the Audit and Supervisory Committee requests employees to assist executing its duties, theCompany assigns the needed employees to the Audit and Supervisory Committee.
7) Matters Related to the Independence from the Directors and Ensuring the Effectiveness of Instructions by
the Directors of the Employees Assigned to Audit and Supervisory Committee
The Company respects the Audit and Supervisory Committee’s request on assignment of employees toassist the Audit and Supervisory Committee. The employees that have been ordered to perform auditing
tasks by the Audit and Supervisory Committee will not obey to orders or directions from the Company’s- 17 -

Directors (excluding Directors who are Audit and Supervisory Committee members) against the orders
from the Audit and Supervisory Committee.
8) Systems for the Company and Its Subsidiaries’ Directors (Excluding Company Directors Who Are Audit
and Supervisory Committee Members) and Employees to Report to Chairperson of the Audit andSupervisory Committee
The Company’s Directors (excluding Directors who are Audit and Supervisory Committee members) andemployees are required to immediately report to the Chairperson of the Audit and Supervisory Committee
if they become aware of an illegal act or misconduct by a Director (other than a Director who is an Audit
and Supervisory Committee member) or if any matter that would cause a material loss on the Company
arises or is at risk of arising.
Additionally, the Company has established an internal reporting channel within the Group. It has createdan environment in which misconduct and illegal acts can be reported either directly or indirectly to theCompany’s full-time Audit and Supervisory Committee member, working to enhance compliance toprevent misconduct and illegal acts throughout the entire Group.
9) Systems to Prevent Retaliation Against Whistleblowers
The Company prohibits retaliatory treatment for individuals who have reported to the full-time Audit andSupervisory Committee member and fully publicizes this prohibition among its Directors (excluding
Directors who are Audit and Supervisory Committee members), employees, its subsidiaries’ Directors andemployees.
10) Matters Concerning Policy Pertaining to Advance Payment or Reimbursement of Expenses Related to
Execution of Duties by Audit and Supervisory Committee Members of the Company or Processing of
Other Expenses or Obligations Related to Said Duties’ Execution
When billed in advance for necessary expenses related to execution of Audit and Supervisory Committee
members’ duties, the Company promptly pays the billed charges.
11) Other Systems to Ensure Effectiveness of the Audit by the Audit and Supervisory Committee
Directors of the Company (excluding Directors who are Audit and Supervisory Committee members)
endeavor to make the audit system function more efficiently by promoting deeper understanding about theaudit system and creating an audit-friendly environment within the Company. Furthermore, theRepresentative Director notifies Audit and Supervisory Committee members of Board of Directors meeting
dates, details, etc. in advance and promotes appropriate communication and effective performance of audit
work to ensure that the Audit and Supervisory Committee’s audits are conducted effectively.
12) Systems to Ensure Reliability of Financial Reporting
To ensure the reliability of its financial reporting, and effective and appropriate reporting on internal
controls in accordance with the Financial Instruments and Exchange Act, the Company has established the“Basic Policy for Building Internal Controls Systems,” and implements and operates internal controls overfinancial reporting accordingly. It also continually evaluates whether its internal controls are functioning
properly and modifies them as needed.
13) Systems to Eradicate Antisocial Forces
The Company has established the “Group Rules on Response to Anti-Social Forces” containing required
provisions on severing relations with anti-social forces (as defined in the “Guideline for How Companies
Prevent Damage from Anti-Social Forces” issued by the Ministerial Meeting Concerning Measures
Against Crime) pursuant to the “Group Compliance Basic Policy.” Such rules and regulations mandate that
the Company sever all relations with anti-social forces and respond organizationally to any illicit demandsby anti-social forces. Moreover, the Company has established more specific guidelines for dealing with
anti-social forces in the “Group Anti-Social Forces Response Manual,” and ensures that the Directors andemployees of the Company and its subsidiaries are well informed so that they will not have any
relationship with anti-social forces. Additionally, the Company is a long-standing member of the Special
Anti-Violence Countermeasures Federation of the Metropolitan Police Department. It also builds
cooperative relationships with lawyers and other external related organizations, and incorporates an antisocial forces clause into its contracts with new suppliers and customers.

- 18 -

(2) Overview of Execution Status of Systems to Ensure Appropriateness of Business Operation
1) Execution of Directors’ Duties
In the fiscal year ended December 31, 2021, the Board of Directors met eighteen (18) times and mademanagement decisions. The Board of Directors instituted Board of Directors Rules and other internal rules
to ensure that Directors act in accordance with laws and regulations, the Company’s Articles ofIncorporation.
2) Execution of Duties by Directors Who Are Members of Audit and Supervisory Committee
In addition to conducting audits pursuant to audit plans formulated at Audit and Supervisory Committee
meetings, Directors who are members of Audit and Supervisory Committee oversee Directors’ executionof their duties through such means as attending important meetings, including Board of Directors meetings,
and regularly exchanging information with the Accounting Auditor and the division responsible for theCompany’s audit.
3) Risk Management and Compliance
The Company works to strengthen the risk management system to reduce risk, facilitate risk prevention,and take prompt action should a risk materialize, and in addition to establishing the “Group Risk
Management Basic Guidelines” and the “Group Risk Management Rules,” it has established the Group
Risk Management Committee. Furthermore, the Company works to heighten awareness among the
Directors and employees of the Company and its subsidiaries by creating the “Group Compliance Basic
Policy” and the “Group Compliance Rules,” establishing the Group Compliance Committee, and getting
division responsible for the Company’s compliance to prepare manuals and guidelines, and plan, conduct
and administrate trainings.
The Company has established and operates a group management system that respects the independence of
the SoldOut Group, which operates under its parent company, SoldOut, Inc., the Company’s subsidiary
listed on the First Section of the Tokyo Stock Exchange.
(3) Policy for Determination of Dividends from Retained Earnings
As its dividend policy, the Company aims to pay dividends equivalent to 20% of profit attributable to ownersof parent before amortization of goodwill so it can internally retain earnings to fund investments, including
business and human-resource investments needed to strengthen its management team and boost earnings inpursuit of further growth in its corporate value over the medium to long term. For the fiscal year ended
December 31, 2021, the Company’s Board of Directors passed a resolution authorizing a dividend of JPY
97.00 per share on February 10, 2022.
Monetary values presented in this Business Report are rounded down to the nearest whole unit in which
they are presented; percentages and other numbers are rounded off to one decimal place.

- 19 -

Consolidated balance sheet(As of December 31, 2021)
Account
AssetsAmountCurrent assets
Cash and deposits
Notes and accounts receivable-trade
Operational investment securities
Inventories
Other
Allowance for doubtful accounts

59,85037,53912,429
8,777
11
1,097
(6)

Noncurrent assets
Property, plant and equipment
Buildings and structures
Other

9,877
808
628
179

Intangible assets
Goodwill
Other

1,616
161
1,454

Investments and other assets
Shares of affiliates
Investment securities
Leasehold and guarantee deposits
Other
Allowance for doubtful accounts

7,452
0
6,692
539
234
(13)

Account
Liabilities
Current liabilities
Accounts payable-trade
Current portion of long-termborrowings
Income taxes payable
Provision for bonuses
Other

Noncurrent liabilities
Long-term borrowings
Deferred tax liabilities
Asset retirement obligations
Other
Total liabilities
Net assets
Shareholders’ equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Accumulated other comprehensive income
Valuation difference on available-forsale securities

Foreign currency translation
adjustment
Share acquisition rights
Non-controlling interests
Total net assets
Total assets
69,728
Total liabilities and net assets(Note) The amounts presented above are rounded down to the nearest whole million yen.

- 20 -(Yen in millions)
Amount23,83312,360
5,939
2,922
320
2,290
4,964
3,102
1,539
320
1
28,79728,367
8,212
3,841
20,011(3,698)
4,294
3,780
513
12
8,256
40,93069,728

Consolidated statement of income(From January 1, 2021 to December 31, 2021)(Yen in millions)
Account

AmountNet sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Gain on investments in investment partnerships
Other
Non-operating expenses
Interest expenses
Commission expenses
Share of loss of entities accounted for using equity method
Other
Ordinary profit
Extraordinary income
Gain on sales of investment securities
Gain on sale of businesses
Other
Extraordinary losses
Loss on retirement of noncurrent assets
Impairment loss
Loss on valuation of investment securities
Profit before income taxes
Income taxes-current
Income taxes-deferred
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent(Note) The amounts presented above are rounded down to the nearest whole million yen.

- 21 -

98,51573,28625,22914,306
10,922
3,786
41
21
39
15
11

687
97
6
135
27
12
4,428
741

3,828

88
14,662792

174
15,2805,169
10,110120
10,231

Consolidated statement of changes in net assets(From January 1, 2021 to December 31, 2021)(Yen in millions)Shareholders’ equity

Balance at beginning of year
Changes of items during theperiodDividends of surplus
Profit (loss) attributable toowners of parent
Purchase oftreasury shares
Changes in ownershipinterest in subsidiaries
Net changes of items otherthan shareholders’ equity
Total changes of items during
the period
Balance at end of year

Balance at beginning of year
Changes of items during theperiodDividends from surplus
Net income attributable toowners of parent
Purchase oftreasury shares
Changes in ownershipinterest in subsidiaries
Net changes of items otherthan shareholders’ equity
Total changes of items during
the period
Balance at end of year

Share capital

Capital surplus

Retained earnings

Treasury shares

8,212

3,972

10,557(1,698)

Total shareholders’equity21,043

(776)

(776)

10,231

10,231(2,000)(130)(2,000)
(130)

―

(130)

9,454

(2,000)

7,323

8,212

3,841

20,011(3,698)28,367

Accumulated other comprehensive income
Total
Valuation
Foreign currency accumulateddifference ontranslation
otheravailable-for-saleadjustment
comprehensive
securities
income10,07180
10,151

Share
acquisitionrights0

Non-controlling
Total net assetsinterests

8,822

40,018(776)
10,231(2,000)(130)(6,290)433(5,857)12(565)(6,411)(6,290)433(5,857)

12

(565)

912

3,780

513

4,294

12

8,256

40,930(Note) The amounts presented above are rounded down to the nearest whole million yen.

- 22 -

Notes to Consolidated Financial Statements
1. Significant matters that form the basis of preparing consolidated financial statements:(1) Scope of consolidation
1) Status of consolidated subsidiaries• Number of consolidated subsidiaries: 21 consolidated subsidiaries• Names of consolidated subsidiaries
OPT, Inc.
SoldOut, Inc.
ConnectOm, Inc.
SO Technologies, Inc.
anddigital Co.,Ltd
MEDIA ENGINE INC.
Bonds Investment Group, Inc.
BIG No. 1 Limited Partnership for Investment
BIG No. 2 Limited Partnership for Investment
SIGNATE Inc.
OPT Incubate Inc.
IMJ FENOX PTE. LTD. No. 2
OPT China Limited
OPT Shenzhen (China)
OPT America, Inc.
Digital Shift, Inc.
Re:teigi, Inc.
RePharmacy, Inc.
Vankable, Inc.
Hyogo-Kobe Startup Limited Partnership for Investment
JOMYAKU, Inc.
From the fiscal year ended December 31, 2021, newly established companies Vankable, Inc., Hyogo-KobeStartup Limited Partnership for Investment, and JOMYAKU, Inc., are included in the scope of
consolidation.
Platform ID, Inc., Demand Side Science, Inc., OPT China, Inc., and OPT SEA Pte., Ltd. were excluded
from the scope of consolidation because their liquidation was completed in the fiscal year ended December
31, 2021.
Heartlass, Inc. was excluded from the scope of consolidation because it was merged into OPT, Inc. anddissolved.
As of July 1, 2021, Growth Gear Co., Ltd. changed its trade name to and digital, Inc. Also, as of
September 1, 2021, OptDigital, Inc. changed its trade name to Re:teigi, Inc.
2) Status of major non-consolidated subsidiaries
Not applicable- 23 -

(2) Application of equity method accounting
1) Status of equity-method affiliates• Number of equity-method affiliates: One affiliate• Names of equity-method affiliates
PharmaShift Co., Ltd.
GENERATE Inc. was excluded from the scope of application of equity method in the current fiscal year asa result of the completion of liquidation.
2) Status of major non-consolidated subsidiaries and affiliates not subject to the equity method• Name of non-consolidated subsidiaries and affiliates in this categoryNon-consolidated subsidiary: Not applicable
Affiliates: Shenzhen Tianxi E-Commerce Co., Ltd.
Kejusi Shenzhen Technology Co., Ltd.
• Reasons for not applying the equity method
Non-consolidated subsidiaries and affiliates not subject to equity method were excluded from the scopeof equity method because they have a minor impact on the consolidated financial statements in terms of
the Company’s pro rata shares of profit or loss and retained earnings even if they are excluded from thescope, and have no significance as a whole.
(3) Special notes to procedures for application of equity method accounting
Since the financial closing date of PharmaShift Co., Ltd., an equity method affiliate, is March 31, we used thefinancial statements based on the provisional settlement of accounts on the consolidated closing date.
(4) Fiscal years of consolidated subsidiaries
Consolidated subsidiaries have the same fiscal year-end as the consolidated closing date.
(5) Matters on accounting policies
1) Valuation standards and methods for significant assets
A. Securities
Shares of affiliates
Stated at cost using the moving-average method.
Available-for-sale securities (including operational investment securities)• Those with market value:
Stated at fair value based on the market prices and the like on the fiscal year-end. (The related valuationdifferences are directly debited or credited to the net assets and the cost of securities sold is calculatedusing the moving average method.)• Those without market value:
Stated at cost using the moving-average method.
• Investment in limited partnership for investment:
Stated at an amount calculated using the method where the amount equivalent to the Company’s equity
interests in the partnership is added to or subtracted from the partnership’s gains or losses based on themost recent financial statements available.
B. Inventories• Merchandise and Work in process:Mainly stated at cost using the FIFO method. (The balance sheet value is calculated by writing down thebook value based on decreased profitability.)- 24 -

• Supplies:
Mainly stated at cost using the specific cost method. (The balance sheet value is calculated by writing
down the book value based on decreased profitability.)2) Depreciation/amortization method for significant depreciable/amortizable assets
A. Property, plant and equipment (excluding leased assets)
Mainly subject to the declining-balance method.
However, buildings (excluding equipment attached to buildings) acquired on or after April 1, 1998 andequipment attached to buildings and structures acquired on or after April 1, 2016 are subject to the straightline method.
The straight-line method is adopted by overseas consolidated subsidiaries. Primary useful lives are as
indicated below:
Buildings and structures:
3 to 18 years.
Other:
2 to 15 years.
B. Intangible assets (excluding leased assets)
Subject to the straight-line method.
Software for internal use is subject to the straight-line method based on the period available for internal use(mainly, five years).
C. Leased assets• Leased assets from non-ownership-transfer finance lease transactions:
Subject to the straight-line method where the lease term is the useful life, and the residual value is theguaranteed residual value if the relevant lease agreement stipulates residual value guarantee, or otherwise,
residual value is zero.
3) Standards for recognition of significant allowances
A. Allowance for doubtful accounts
To prepare for losses from receivables, uncollectible amounts are estimated and recognized, for ordinary
receivables, by the actual bad debt ratio based on losses in the past, or for doubtful receivables and othercertain receivables, by taking into consideration the collectability of individual receivable accounts.
B. Provision for bonuses
In terms of provision for bonuses, the amount accrued in the fiscal year for the estimated payout toemployees is recognized to prepare for payments of bonuses to employees.
4) Standard for translating significant assets or liabilities denominated in foreign currencies into Japanese yen
Assets and liabilities of overseas subsidiaries are translated into the Japanese yen based on the spot
exchange rate as of the closing date while their earnings and expenses are translated into the Japanese yen
based on the average rate. The translation differences are included in and recognized as foreign currencytranslation adjustment under net assets.
5) Amortization method and period for goodwill
Goodwill is regularly amortized over a reasonable period, which we estimate case-by-case based on the
duration of its effect.
6) Other significant matters that form the basis of preparing consolidated financial statements
A. Accounting procedures for consumption taxes
The accounting procedures for national and local consumption taxes are subject to the tax-excluded
method. Non-deductible national and local consumption taxes are expensed for the current fiscal year.
B. Application of the consolidated taxation system
The Company and its certain consolidated subsidiaries have adopted the consolidated taxation system.
With respect to items subject to the review under the non-consolidated taxation system conducted tocoincide with the transition to the group tax sharing system established under the “Act Partially Amending
the Income Tax Act” (Act No. 8 of 2020), we have not adopted the provisions of paragraph 44 of the“Guidance on Accounting Standard for Tax Effect Accounting” (ASBJ Guidance No. 28, February 16,2018) in accordance with the treatment set out in paragraph 3 of the “Practical Solution on the Treatment- 25 -

of Tax Effect Accounting for the Transition from the Consolidated Taxation System to the Group Tax
Sharing System” (PITF No. 39, March 31, 2020). Accordingly, the amounts of deferred tax assets anddeferred tax liabilities have been calculated based on the provisions of tax laws in effect before therevision.
2.

Notes on changes in presentation
Application of the Accounting Standard for Disclosure of Accounting Estimates
The Accounting Standard for Disclosure of Accounting Estimates (ASBJ Statement No. 31, March 31, 2020)
has been applied to the consolidated financial statements from the current fiscal year, and notes on significant
accounting estimates are included in the consolidated financial statements.

3.

Notes on significant accounting estimates
Valuation of securities whose fair value is deemed to be extremely difficult to determine(1) Amounts recorded in the consolidated financial statements for the current fiscal year
Operational investment securities of JPY 8,777 million and investment securities of JPY 6,692 million wererecorded in the consolidated balance sheet for the current fiscal year. These include a total of JPY 11,349
million of securities for which fair value is deemed to be extremely difficult to determine.
(2) Information on significant accounting estimates for identified items
For securities for which fair value is deemed to be extremely difficult to determine, the acquisition cost is usedas the value on the consolidated balance sheet. However, if the actual value of the securities declines
significantly due to a deterioration in the financial position of the issuer of the securities, a substantial
reduction is made to the value, and the valuation difference is treated as a loss for the current period.
However, for securities acquired at a price substantially higher than the amount based on net assets per sharereflecting the excess earning capacity, etc. of the investee at the time of acquisition, if it is judged that theexcess earning capacity, etc. initially expected has not decreased, the actual value is deemed not to havedecreased significantly, and no loss on valuation of securities is recognized. Judgments as to whether theexcess earning capacity, etc. of investees has decreased are made based on the achievement of business plans,
but said judgments involve significant judgments by management, as the development of venture businesses issubject to uncertainty.
In the event that the actual value, including excess earning capacity, of the investees declines significantly,
such as when the business results of the investees fall far short of the business plans, there is a possibility thatloss on valuation of securities may be recorded in the following fiscal year.
4. Notes to consolidated balance sheet(1) Breakdown of inventories(Yen in millions)

MerchandiseWork in process
Supplies

740(2) Accumulated depreciation of property, plant and equipment(Yen in millions)465

Accumulated depreciation- 26 -

5. Notes to consolidated statement of changes in net assets(1) Matters concerning class and total number of shares issued and class and number of treasury sharesClass of stock

As of Jan. 1, 2021

Additions

Subtractions

As of Dec. 31, 2021

Shares issued
Common shares

23,817,700 shares――

23,817,700 shares

1,623,695 shares

989,848 shares―

2,613,543 shares

Number of shares underlying stock options

Treasury shares
Common shares(2) Matters concerning share acquisition rights
Category

Consolidated
subsidiaries

Type

Class ofunderlying
stock

As of
Jan. 1, 2021

Additions

Subtractions

As ofDec. 31, 2021

Balance as ofDec. 31, 2021
(Yen inmillions)

―

―

―

―

12

―

―

―

―

12

Share
acquisition
Commonrights granted
sharesas stock options
Total(3) Matters concerning dividend
1) Amount of dividend distribution
Resolution

Class of stock

Total dividend
distribution(Yen in millions)February 10, 2021
Board of Directors
Meeting

Common shares

776

Dividend per share
(Yen)

35.0

Record date

Effective date

December 31,
2020

March 5, 2021

2) Dividends with a record date in the fiscal year ended December 31, 2021, but with an effective date in thefollowing fiscal year
Scheduledresolution date

Class ofstock

Dividend funding
sourceFebruary 10, 2022
Board of Directors
Meeting

CommonsharesRetainedearnings

Total dividend
distribution(Yen in millions)

2,056- 27 -

Dividend per share
(Yen)

97.0

Record date

Effective date

December31, 2021

March 4, 2022

6. Notes on financial instruments(1) Matters concerning financial instruments
1) Policy for financial instruments
The Group invests into financial assets focusing on safety and liquidity given own cash flows and financial
market conditions. When borrowing funds or otherwise raising capital, the Group takes stability, costefficiency and flexibility into consideration in selecting funding instruments.
The Group manages investment businesses that invest in securities for investment purposes throughdedicated business units.
2) Nature of financial instruments and associated risks
Notes and accounts receivable-trade, which are trade receivables, are exposed to customer credit risk. With
respect to this risk, the Group has staff that manage receivable collection schedules and receivable balances
on a customer-by-customer basis and periodically assess major customers’ credit status in accord withregulations regarding the Group’s credit management. Trade receivables denominated in foreign currencies
are exposed to currency risk. Investment securities are mainly stocks of companies with which theCompany has business relationships. They are exposed to the risk of market price fluctuations. Operational
investment securities and investment securities other than the aforementioned investment securities held by
the Group are mainly stocks and equity interests in partnerships and other such entities. The Group holds
these securities for purely investment purposes or to advance its businesses. Listed stocks among thesesecurities are exposed to the risk of market price fluctuations. Unlisted stocks among these securities are
exposed to the following two risks because unlisted companies tend to be more sensitive than listedcompanies to changes in the economic environment and other such developments as a result of having lessstable financial and earnings foundations and being more constrained in terms of management resources.
a. The Group has no assurance of earning any capital gains from its investments.
b. The Group may incur capital losses on its investments.
Accounts payable-trade, which are trade payables, are mostly payable within one year. Trade payables
denominated in foreign currencies are exposed to currency risk.
Short-term loans payable and long-term borrowings are mostly funding needed for working capital, among
other purposes.
3) Risk-management regime for financial instruments• Management of credit risk (risk associated with counterparties’ contractual nonperformance, etc.)
For trade receivables, the Group conducts credit screenings when it starts doing business with a newcustomer, continually monitors the collection status of receivables and reviews credit limits whennecessary in accordance with its credit management regulations.
• Management of market risks (foreign currency risk, interest rate fluctuation risk, etc.)
For operational investment securities and other investment securities, the Group periodically checks
market values and assesses the issuer’s (or counterparties’) financial condition and continually reviews
and, as necessary, adjusts its holdings in light of market conditions and/or its relationship with thecounterparty.
• Management of liquidity risk in connection with financing (risk of inability to repay borrowings on thedue date)
The Group manages liquidity risk through such means as having its finance staff prepare and update cash
flow schedules on a timely basis.
4) Supplemental information on the fair value of financial instruments
The fair value of financial instruments includes values based on market prices and values reasonably
calculated if no market price is available. In calculation of the value, as fluctuation factors areincorporated, the value may fluctuate by adopting different preconditions.

- 28 -

(2) Matters concerning financial instruments’ fair value
The book value and fair value of financial instruments in the consolidated balance sheet as of December 31,
2021 (the consolidated balance sheet date for the current fiscal year) and their differences are as follows. The
table omits financial instruments for which fair value is extremely difficult to determine (see Note 2).
(Yen in millions)(1) Cash and deposits(2) Notes and accounts receivable-trade(3) Operational investment securities andinvestment securities
Total assets(1) Accounts payable-trade(2) Long-term borrowings (including
current portion thereof)
Total liabilities

Carrying amount in the
consolidated balance sheet
37,53912,429Fair value

Difference
37,53912,429

―
―

4,119

4,119

―

54,08912,36054,08912,360

―
―

9,041

9,046

4

21,401

21,4064(Note 1) Matters concerning fair-value measurement method of financial instruments and securities
Assets(1) Cash and deposits and (2) notes and accounts receivable-trade
Because these assets all have short-term maturities, their fair value approximates their book value. Their fair value istherefore measured at their respective book value.
(3) Operational investment securities and investment securities
As a general rule, the fair value of stocks is based on prices traded at the stock exchange.
Liabilities(1) Accounts payable-trade
Because these liabilities have short-term maturities, their fair value approximates their book value. Their fair value istherefore measured at their book value.
(2) Long-term borrowings (including current portion thereof)
The fair value of long-term borrowings is measured by discounting the total amount of principal and interest at an interest
rate that incorporates a benchmark rate (e.g., government bond yield) plus a credit spread.
(Note 2) Financial instruments for which fair value is extremely difficult to determine(Yen in millions)
Type
Carrying amount on consolidated balance sheet
Operational investment securities and investment securities*1
Unlisted stocks
4,616
Unlisted bonds
0Equity interests in investment limited partnerships and similar
6,733
partnerships
Affiliates’ shares*2
Unlisted stocks
0
Total
11,349(*1) These financial instruments have no market prices and their fair value is extremely difficult to determine.
They are therefore omitted from “(3) Operational investment securities and investment securities.”(*2) Affiliates’ shares have no market prices and their fair value is extremely difficult to determine.
They are therefore not included in the above table.
(Note 3) Post-reporting-date maturity schedule for monetary receivables

(1)
(2)

Type
Cash and deposits
Notes and accounts receivable–
trade
Total

―

―

(Yen in millions)Over 10 years―

12,429―――49,969―――Within 1 year
37,539- 29 -

1-5 years

5-10 years

(Note 4) Post-reporting-date repayment schedule for loans payable
TypeLong-term borrowings
Total

7.

Within 1 year
5,939
5,939

1-5 years
3,059
3,059

(Yen in millions)Over 10 years

5-10 years
35
35

7
7

Notes to per-share information
Net assets per share
Earnings per share¥1,540.34¥473.28

8. Notes to significant subsequent events(Sale of shares of a material subsidiary)
At the Board of Directors meeting held on February 9, 2022, the Company resolved to tender all of the commonshares held by the Company of SoldOut, Inc. (hereinafter “SoldOut”), a consolidated subsidiary of theCompany, in a tender offer (hereinafter the “Tender Offer”) for common shares and share acquisition rights of
SoldOut conducted by Hakuhodo DY Holdings Inc. (hereinafter “Hakuhodo DY”) and entered into a tenderagreement (hereinafter the “Tender Agreement”) with Hakuhodo DY on February 9, 2022. After the completionof the Tender Offer, SoldOut will be excluded from the scope of consolidation.
(1) Name of the company to which the shares will be sold
Hakuhodo DY Holdings Inc.
(2) Schedule of the Tender Offer
1) Conclusion of the Tender Agreement

February 9, 2022

2) Tender offer period

From February 10, 2022 to March 28, 2022

3) Announcement of the results of the Tender Offer

March 29, 2022

4) Commencement date of settlement

April 1, 2022

(3) Name and business of the Company’s consolidated subsidiary and its business relationship with the Company
1) NameSoldOut, Inc.

2) Business

Internet business support business

3) Business relationship with the Company

The Company and its wholly owned subsidiary,
OPT, Inc., are engaged in advertising transactions
with SoldOut.

(4) Number of shares to be tendered in the Tender Offer, transfer price, and number of shares held before and to beheld after the Tender Offer
1) Number of shares held before the Tender Offer

5,914,080 shares

2) Number of shares to be tendered in the Tender
Offer

5,914,080 shares

3) Transfer price in the Tender Offer

JPY 10,698 million (JPY 1,809 per share)4) Number of shares to be held after the TenderOffer

0 shares(Note) The transfer price and the number of shares to be held after the Tender Offer are the transfer price and the number ofshares to be held if the Tender Offer is completed. Hakuhodo DY has set the minimum number of shares to be purchasedin the Tender Offer at 7,064,300 shares, and if the total number of share certificates, etc. tendered in response to theTender Offer (hereinafter the “Tendered Share Certificates, Etc.”) is less than the minimum number of shares to bepurchased, Hakuhodo DY will not purchase all of the Tendered Share Certificates, Etc.

- 30 -

(5) Impact of this event on consolidated business results
If the Tender Offer is completed, the Company expects to record extraordinary income of JPY 8,590 million in
the fiscal year ending December 31, 2022.
(Repurchase of treasury shares)
The Board of Directors of the Company, at its meeting held on February 10, 2022, resolved that the Company
would repurchase its own shares pursuant to Article 156 of the Companies Act as applied pursuant to Article
165, paragraph 3 of the same act.
(1) Reason for the repurchase of treasury shares
To improve returns to shareholders by improving capital efficiency and implementing flexible capital policies.
(2) Details of the repurchase1) Class of shares to be repurchased

Common shares of the Company

2) Total number of shares to be repurchased

Up to 5,000,000 shares(23.58% of the total number of shares issued,
excluding treasury shares)

3) Total repurchase amountUp to JPY 5 billion

4) Period of repurchase

From February 14, 2022 to December 23, 2022

5) Method of repurchaseMarket purchase on the Tokyo Stock Exchange(Reference) Total number of shares issued and number of treasury shares as of December 31, 2021
Total number of shares issued (excluding treasury
shares)

21,204,157 shares

Number of treasury shares

2,613,543 shares- 31 -

Balance sheet(As of December 31, 2021)
Account
AssetsAmountCurrent assets
Cash and deposits
Accounts receivable-trade
Operational investment securities
Advances paid
Short-term loans receivable fromsubsidiaries and associates
Accounts receivable - other
Other
Allowance for doubtful accounts

33,95329,454
251
2,936
79

Noncurrent assets
Property, plant and equipment
Buildings and structures
Tools, furniture and fixtures
Intangible assets
Trademark right
Software
Other
Investments and other assets
Investment securities
Shares of subsidiaries and associates
Investments in other securities ofsubsidiaries and associates
Long-term prepaid expenses
Leasehold and guarantee deposits
Other

7,617
236
190
46
68
5
61
1
7,312
592
5,142

Account
Liabilities
Current liabilities
Current portion of long-termborrowings
Accounts payable

100
263
1,188
(321)

14,814
5,833
533

Deposits received from subsidiaries
and associates

5,367

Accrued expenses
Income taxes payable
Deposits received
Provision for bonuses
Other

134
2,771
32
50
92

Noncurrent liabilities
Long-term borrowings
Deferred tax liabilities
Asset retirement obligations
Total liabilities
Net assets
Shareholders’ equity
Share capital
Capital surplus
Legal capital surplus
1,301
Retained earnings
5
Retained earnings brought forward
270
Treasury shares
0
Valuation and translation adjustments
Valuation difference on available-forsale securities
Total net assets
Total assets
41,570Total liabilities and net assets(Note) The amounts presented above are rounded down to the nearest whole million yen.

- 32 -(Yen in millions)
Amount

2,629
2,167
297
164
17,44322,543
8,212
3,423
3,423
14,606
14,606(3,698)1,583
1,583
24,127
41,570Statement of income(From January 1, 2021 to December 31, 2021)(Yen in millions)
Account

AmountNet sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Miscellaneous income
Other
Non-operating expenses
Interest expenses
Commission expenses
Provision of allowance for doubtful accounts
Loss on investments in investment partnerships
Other
Ordinary profit
Extraordinary income
Gain on sales of investment securities
Gain on liquidation of subsidiaries
Other
Extraordinary loss
Loss on valuation of shares of subsidiaries
Other
Profit before income taxes
Income taxes-current
Income taxes-deferred
Profit(Note) The amounts presented above are rounded down to the nearest whole million yen.

- 33 -

16,248
4,352
11,896261
11,634
1
4
0
19
39
137
17
7

687
80
0
1,018
4
3,203
406

6

220
11,420767

1,022
11,165
3,610
7,555

Statement of changes in net assets(From January 1, 2021 to December 31, 2021)(Yen in millions)Shareholders’ equity
Capital surplus

Balance at beginning of year
Changes of items during period
Dividends of surplus
Net income (loss)
Purchase of treasury shares
Net changes of items other thanshareholders’ equity
Total changes of items during
the period
Balance at end of year

Share capital

Legal capitalsurplus

Total capitalsurplus

8,212

3,423

3,423

Retained earnings
Other retained
earnings
Total retained
earnings
Retained earnings
brought forward
7,827
7,827
(776)
7,555

(776)
7,555

―

―

―

6,778

6,778

8,212

3,423

3,423

14,606

14,606

Valuation and translation
adjustments
Valuation
Total valuation and Total net assets
Total shareholders’ difference on
Treasury sharestranslation
equityavailable-for-saleadjustments
securities(1,698)17,765
9,869
9,869
27,634
Shareholders’ equity

Balance at beginning of year
Changes of items during period
Dividends from surplus(776)
Net income (loss)
7,555
Purchase of treasury shares(2,000)(2,000)Net changes of items other than
(8,285)
shareholders’ equity
Total changes of items during(2,000)4,778(8,285)the period
Balance at end of year
(3,698)22,543
1,583(Note) The amounts presented above are rounded down to the nearest whole million yen.

- 34 -(776)
7,555(2,000)(8,285)(8,285)(8,285)(3,507)

1,583

24,127

Notes to Non-Consolidated Financial Statements
1.

Notes to significant accounting policies(1) Valuation standards and methods for significant assets
1) Valuation standards and methods for securities
A. Shares of subsidiaries and affiliates
Stated at cost using the moving-average method.
B. Available-for-sale securities (including operational investment securities)• Those with market value:
Stated at fair value based on the market prices and the like on the fiscal year-end. (The related valuationdifferences are directly debited or credited to the net assets and the cost of securities sold is calculatedusing the moving average method.)• Those without market value:
Stated at cost using the moving-average method.
• Investment in limited partnership for investment:
Stated at an amount calculated using the method where the amount equivalent to the Company’s equity
interests in the partnership is added to or subtracted from the partnership’s gains or losses based on themost recent financial statements available.
(2) Depreciation/amortization methods for noncurrent assets
1) Property, plant and equipment (excluding lease assets)
Mainly subject to the declining-balance method.
However, buildings (excluding equipment attached to buildings) acquired on or after April 1, 1998 andequipment attached to buildings and structures acquired on or after April 1, 2016 are subject to the straightline method.
Primary useful lives are as indicated below:
Buildings and structures:
3 to 18 years
Tools, furniture and fixtures:
4 to 10 years
2) Intangible assets (excluding leased assets)
Subject to the straight-line method.
Software for internal use is subject to the straight-line method based on the period available for internal use(mainly, five years).
(3) Standards for recognition of significant allowances
1) Allowance for doubtful accounts
To prepare for losses from receivables, uncollectible amounts are estimated and recognized, for ordinary
receivables, by the actual bad debt ratio based on losses in the past, or for doubtful receivables and othercertain receivables, by taking into consideration the collectability of individual receivable accounts.
2) Provision for bonuses
In terms of provision for bonuses, the amount accrued in the fiscal year for the estimated payout to employees
is recognized to prepare for payments of bonuses to employees.
(4) Other significant matters that form the basis of preparing financial statements
1) Accounting procedures for consumption taxes
The accounting procedures for national and local consumption taxes are subject to the tax-excluded method.
Non-deductible national and local consumption taxes are expensed for the fiscal year.
2) Application of the consolidated taxation system
The Company has adopted the consolidated taxation system. With respect to items subject to the review
under the non-consolidated taxation system conducted to coincide with the transition to the group tax
sharing system established under the “Act Partially Amending the Income Tax Act” (Act No. 8 of2020), we have not adopted the provisions of paragraph 44 of the “Guidance on Accounting Standard- 35 -

for Tax Effect Accounting” (ASBJ Guidance No. 28, February 16, 2018) in accordance with thetreatment set out in paragraph 3 of the “Practical Solution on the Treatment of Tax Effect Accounting
for the Transition from the Consolidated Taxation System to the Group Tax Sharing System” (PITF
No. 39, March 31, 2020). Accordingly, the amounts of deferred tax assets and deferred tax liabilities
have been calculated based on the provisions of tax laws in effect before the revision.
(5) Changes to significant matters that form the basis of preparing financial statements
Not applicable2.

Notes on changes in presentation
Application of the Accounting Standard for Disclosure of Accounting Estimates
The Accounting Standard for Disclosure of Accounting Estimates (ASBJ Statement No. 31, March 31, 2020)
has been applied to the non-consolidated financial statements from the current fiscal year, and notes on
significant accounting estimates are included in the non-consolidated financial statements.

3.

Notes on significant accounting estimates
Valuation of securities whose fair value is deemed to be extremely difficult to determine(1) Amounts recorded in the non-consolidated financial statements for the current fiscal year
Operational investment securities of JPY 2,936 million and investment securities of JPY 592 million wererecorded in the balance sheet for the current fiscal year. These include a total of JPY 1,353 million of securities
for which fair value is deemed to be extremely difficult to determine.
(2) Information on significant accounting estimates for identified items
Notes are omitted because the same information is provided in “3. Notes on accounting estimates” in the Notes
to Consolidated Financial Statements.
4. Notes to balance sheet(1) Monetary receivables from and monetary payables to subsidiaries and associates (excluding those presented as
separate line items)(Yen in millions)Short-term monetary receivables
1,559
Short-term monetary payables
411(2) Accumulated depreciation of property, plant and equipment(Yen in millions)
303

Accumulated depreciation
5.

Notes to statement of income
Transactions with subsidiaries and associates(Yen in millions)Operating transactions
Net sales
Non-operating transactions

6.

2,928
1

Notes to statement of changes in net assets
Matters concerning class and number of treasury sharesClass of stock

As of Jan. 1, 2021

Additions

Subtractions

As of Dec. 31, 2021

Treasury shares
Common shares

1,623,695 shares

989,848 shares- 36 -― shares

2,613,543 shares

7.

Notes to deferred tax accounting matters
Breakdown of deferred tax assets and deferred tax liabilities by main cause(Yen in millions)Deferred tax assets
Allowance for doubtful accounts
Provision for bonuses
Asset retirement obligations
Loss on valuation of investment securities
Adjustment of investments’ book valueEnterprise taxes payable
Other
Subtotal deferred tax assets
Valuation allowance
Total deferred tax assets
Deferred tax liabilities
Valuation difference on available-for-sale securities
Total deferred tax liabilities
Net deferred tax assets

8.

98
15
20
865
91
139
5
1,237
(835)
401
(699)
(699)
(297)

Notes to transactions with related party(1) Subsidiaries, etc.
Share capital or
equity stake(Yen in millions)Type

Name ofcompany

Address

Subsidiary

OPT, Inc.

Chiyoda-ku, Tokyo

100

Subsidiary

Vankable, Inc.

Chiyoda-ku, Tokyo

499

Type

Subsidiary

Subsidiary

Name of company

OPT, Inc.

Vankable, Inc.

Relationship withrelated party

Director interlock
Management
involvement
CMS transactions

Director interlock
CMS transactions

Nature of transaction

Business

Percentage of voting
rights holding (held)

Advertising
Business
Digital ShiftBusiness

100.00%(―)
100.00%(―)

Transaction
amount(Yen inmillions)

Account

Accounts receivable– tradeDeposits received
from subsidiaries
and associates

Fiscalyear-endbalance(Yen inmillions)

Management
consulting fee

1,965

Borrowing of funds
via CMS (Note 2)―

Payment of interest(Note 3)0――

Borrowing of funds
via CMS (Note 2)―

Deposits received
from subsidiaries
and associates

902

Payment of interest(Note 3)

0

―

―

170
4,048

(Notes) 1. Transaction amounts do not include consumption and other taxes.
2. For borrowing transactions through the CMS (cash management system), only fiscal year-end balances are presented
because balances frequently change.
3. For transaction amount, interest rates are rationally determined based on market interest rates and other relevant factors.

(2) Corporate officers and individual shareholders
Not applicable9.

Notes to per-share information
Net assets per share
Earnings per share¥1,137.85¥349.51

10. Notes to significant subsequent events
As the content is identical to that in “8. Notes to significant subsequent events” in the Consolidated Financial
Statements. For details, therefore, please refer to the said item.

- 37 -

Certified Copy of Audit Report of Business Report, Audit and Supervisory Committee Members, and Renewed
Audit and Supervisory Committee
AUDIT REPORT
We, the Audit and Supervisory Committee of DIGITAL HOLDINGS, Inc. (“the Company”), have audited theperformance of duties by Directors and Executive Officers during the 28th fiscal year from January 1, 2021 to
December 31, 2021. We report the method and results as follows.
1. Method and details of audit

We, the Audit and Supervisory Committee, have received reports from Directors, employees and others on aregularly basis on the details of the board resolutions with respect to items prescribed in Article 399-13,
paragraph 1, item i (b) and (c) of the Companies Act, and the status of the establishment and operation of thesystem established based on such board resolutions (internal control system), sought explanations, whenever
the necessity arose, and expressed our opinions.
Additionally, we conducted audits as follows.
(1) In coordination with the Company’s internal audit staff, we attended important meetings, received reports

from Directors, employees and others regarding the execution of their job duties, requested explanations asneeded, inspected documents, including documentation of significant decisions, and investigated the statusof operations and property at the Company’s Head Office and other major places of business, all incompliance with auditing standards prescribed by the Audit and Supervisory Committee and in accordancewith audit policies, audit plans and an agreed-upon division of duties. We also communicated andexchanged information with subsidiaries’ Directors, Auditors and other personnel and, as needed, received
reports from subsidiaries on their operations.
(2) In addition to monitoring and examining whether the Accounting Auditor maintained an independent

position and performed auditing appropriately, we received reports from the Accounting Auditor on theperformance of its duties and requested explanations when necessary. In addition, we received notice fromthe Accounting Auditor that “The systems for ensuring the proper performance of duties” (set forth in each
item of Article 131 of the Regulations of Corporate Financial Calculation) are organized in accordance withthe “Standards for Quality Control of Audit” (Business Accounting Council, October 28, 2005) and otherrelevant standards, and sought explanations whenever necessity arose.
Based on the above methods, we examined the business report, financial statements (balance sheet, statementof income, statement of changes in net assets, notes to financial statements), supporting schedules, andconsolidated financial statements (consolidated balance sheet, consolidated statement of income,consolidated statement of changes in net assets and notes to consolidated financial statements) for the fiscal
year under review.
2. Results of audit(1) Results of audit of business report, etc.
i)

In our opinion, the business report and accompanying schedules fairly represent the condition of theCompany in accordance with the laws, regulations and Articles of Incorporation of the Company.

ii)

We have determined that there were no serious occurrences of dishonest or false activity or violationsof any laws, regulations or the Company’s Articles of Incorporation by any Directors or Executive
Officers in carrying out their duties.

iii)

We believe the details of resolutions of the Board of Directors regarding the internal control system areappropriate. We found no matters of note with respect to the description on the business report as wellas the execution of duties of Executive Officers regarding the internal control system.

(2) Results of audit of financial statements and accompanying schedules

In our opinion, the audit method and audit results received from the Accounting Auditor KPMG AZSA LLC
are appropriate.
(3) Results of audit of consolidated financial statements

In our opinion, the audit method and audit results received from the Accounting Auditor KPMG AZSA LLC
are appropriate.

- 38 -

February 21, 2022
Audit and Supervisory Committee of DIGITAL HOLDINGS, Inc.

Chairperson of the Audit and Supervisory Committee Fumiyuki Shinomiya (Seal)(Full-time)

Audit and Supervisory Committee member(Full-time)

Yuki Okabe (Seal)

Audit and Supervisory Committee member

Toshio Yamaue (Seal)

Audit and Supervisory Committee member

Masahiro Yamamoto (Seal)

Notes to the Reader of Audit Report:
1. The Audit Report herein is the English translation of the Audit Report as required by the Companies Act.
2. Audit and Supervisory Committee members Mr. Fumiyuki Shinomiya, Ms. Yuki Okabe, Mr. Toshio Yamaue
and Mr. Masahiro Yamamoto are External Directors as provided for in Article 2, item 15 and Article 331,
paragraph 6 of the Companies Act.

- 39 -

Reference Documents for the General Meeting of Shareholders
Proposal No. 1:

Partial Amendments to the Articles of Incorporation

1. Reasons for the amendments(1) The Company proposes the addition of Article 13, paragraph 2 of the Articles of Incorporation in accordancewith the Act for Partially Amending the Industrial Competitiveness Enhancement Act and Other Related Acts
enacted on June 16, 2021, which newly permits the holding of “general meetings of shareholders without adesignated location” (so-called “virtual-only general meetings of shareholders”).
We believe that virtual-only general meetings of shareholders will make it easier for many shareholders,
including those in remote areas, to attend the meeting, thereby contributing to the revitalization, efficiency,
and smoothness of general meetings of shareholders, and also to preventing the spread of infectious diseases
such as COVID-19. For this reason, the Company proposes the necessary amends to the provisions of the
Articles of Incorporation to enable the Company to hold virtual-only general meetings of shareholders.
The Company plans to hold a virtual-only general meeting of shareholders only when it is judged that it is not
appropriate to hold a general meeting of shareholders with a designated location in light of the interests ofshareholders due to the spread of infectious diseases or large-scale disasters including natural disasters, etc.
However, the Company will make a decision in the future on holding a virtual-only general meeting ofshareholders by also taking into consideration the trend of digitalization in society as a whole.
(2) The Company proposes to make necessary amendments to the provisions of the Articles of Incorporation in
preparation for the electronic provision of materials for general meetings of shareholders, as the amendment
provisions stipulated in the proviso of Article 1 of the supplementary provisions of the Act Partially
Amending the Companies Act (Act No. 70 of 2019) will come into effect on September 1, 2022.
1) Article 15, paragraph 1 of the proposed amendment provides that the Company shall take measures toelectronically provide the information that is the content of the reference documents for general meetingsof shareholders, etc.
2) Article 15, paragraph 2 of the proposed amendment establishes a provision to limit the scope of matters to
be stated in the documents to be delivered to shareholders who have requested the delivery of documents.
3) The provision of Internet disclosure and deemed provision of reference documents for general meetings ofshareholders, etc. (Article 15 of the current Articles of Incorporation) will be deleted as it is no longer
necessary.
4) In line with the establishment and deletion above, the Company will establish supplementary provisions
regarding the effective date, etc.

- 40 -

2. Details of the amendment
The details of the amendment are as follows:(Underlines denote amendments)
Current Articles of Incorporation

Proposed Amendments

Article 13 (Convocation)
Article 13 (Convocation)
An annual general meeting of shareholders of the Company 1. An annual general meeting of shareholders of theshall be convened in March of each year. An extraordinaryCompany shall be convened in March of each year. An
general meeting of shareholders shall be convened as
extraordinary general meeting of shareholders shall beneeded.
convened as needed.
2. The general meetings of shareholders of the Company(Newly established)
may be a general meeting of shareholders without adesignated place.
Article 15 (Internet Disclosure and Deemed Provision ofReference Documents for General Meetings ofShareholders, etc.)
The Company may, with respect to the convocation of ageneral meeting of shareholders, deem that it has provided
information pertaining to matters to be stated or indicatedin reference documents for the general meeting ofshareholders, business reports, non-consolidated financial
statements, and consolidated financial statements to theshareholders by disclosing such information through theInternet in accordance with the applicable Ministry ofJustice Order.

(Deleted)(Newly established)

Article 15 (Measures for Electronic Provision of Reference
Documents for General Meetings ofShareholders, etc.)
1. The Company shall, with respect to the convocation of ageneral meeting of shareholders, take measures toelectronically provide the information that is the content
of the reference documents for the general meeting ofshareholders, etc.
2. The Company may not include in the documents to bedelivered to shareholders who have requested thedelivery of documents by the record date of voting
rights all or part of the matters for which the Company
shall take the measures set forth in the preceding Article
and which are specified in the applicable Ministry ofJustice Order.

Supplementary Provisions(Newly established)

Supplementary Provisions(Transitional Measures in Connection with
Measures for Electronic Provision, etc.)
1. The deletion of Article 15 (Internet Disclosure andDeemed Provision of Reference Documents for General
Meetings of Shareholders, etc.) before the amendmentof the Articles of Incorporation and the establishment of
Article 15 (Measures for Electronic Provision ofReference Documents for General Meetings ofShareholders, etc.) after the amendment of the Articles
of Incorporation shall become effective as of the date ofenforcement of the amendment provisions stipulated in
the proviso of Article 1 of the supplementary provisionsof the Act Partially Amending the Companies Act (ActNo. 70 of 2019) (hereinafter the “Effective Date”).
2. Notwithstanding the provisions of the preceding
Paragraph, Article 15 of the Articles of Incorporation
before the amendment shall remain in force with respect
to the general meeting of shareholders to be held on adate within six months from the Effective Date.
3. These Supplementary Provisions shall be deleted after
six months have elapsed from the Effective Date or
three months have elapsed from the date of the general
meeting of shareholders set forth in the preceding
Paragraph, whichever is later.

Article 2- 41 -

Proposal No. 2:

Election of Seven (7) Directors (Excluding Directors Who Are Audit and Supervisory
Committee Members)

The terms of office of all the current seven (7) Directors (excluding Directors who are Audit and Supervisory
Committee members; the same shall apply hereinafter in this proposal) will expire at the conclusion of this Annual
General Meeting of Shareholders.
In that regard, the Company proposes to elect seven (7) Directors.
As for this proposal, the Audit and Supervisory Committee of the Company has agreed that all the candidates are
qualified to serve as Directors.
The candidates for Director are as follows:
Candidate
No.

Name(Date of birth)

Career Summary and Position in the Company(Significant concurrent positions)Apr. 1991
Mar. 1994

1

2

3

Number of theCompany’s
Shares
Owned

Joined Mori Building Co., Ltd.
Established Deca Legs Ltd. (currently the Company) andassumed the position as President
Jun. 2016
Outside Director, UT Group Co., Ltd. (current position)
Noboru Hachimine
Mar. 2017
Director, SoldOut, Inc. (current position)
4,525,200(June 22, 1967)
Mar. 2020
Chairperson, the Company (current position)
Apr. 2020
President and Representative Director, Digital Shift, Inc.
Mar. 2021
Chairperson and Representative Director, Digital Shift, Inc.
(current position)[Reasons for nomination as candidate for Director]
Mr. Noboru Hachimine has long been demonstrating excellent leadership and driving growth in the Group’s corporate
value. He has been nominated because he is well-qualified to continue to build an operational foundation for therealization of sustainable Group-wide growth and to improve corporate value over the medium to long term.
Apr. 1991
Joined Mori Building Co., Ltd.
Oct. 1996
Joined the Company
Mar. 1999
Director, the Company
Atsushi Nouchi(December 21,
1,285,800
Feb. 2015
CEO, OPT Ventures, Inc. (currently Bonds Investment Group,
1967)Inc.) (current position)
Mar. 2017
Vice President and Group COO, the Company
Mar. 2020
President and Group CEO, the Company (current position)[Reasons for nomination as candidate for Director]
Mr. Atsushi Nouchi is well-versed in all aspects of the Company’s operations and has been driving growth in theGroup’s corporate value through strong leadership, decisiveness and executive capabilities. He has been nominatedbecause he is well-qualified to continue to build an operational foundation for the realization of sustainable Group-wide
growth and to improve corporate value over the medium to long term.
Sep. 2005
Joined OPT, Inc.
Jan. 2008
General Manager of Sales Department, OPT, Inc.
Jan. 2010
General Manager of Sales Division, OPT, Inc.
Apr. 2013
Executive Officer, OPT, Inc.
Daisuke Kanazawa
Apr. 2015
President, Representative Director and CEO, OPT, Inc.
(September 4,29,300
Apr. 2017
Senior Executive Officer, the Company
1980)
Apr. 2019
Group Executive Officer, the Company
Apr. 2020
Director, OptDigital, Inc. (currently Re:teigi, Inc.) (current
position)Mar. 2021
Director and Group COO, the Company (current position)[Reasons for nomination as candidate for Director]
Mr. Daisuke Kanazawa has been engaged in marketing throughout his career since he joined OPT, Inc. in 2005 and has
long been leading the execution of operations in the Group’s core business domains through strong leadership,decisiveness and executive capabilities by serving in such positions as Representative Director at OPT, Inc. and Group
Executive Officer of the Company. He has been nominated because he is well-qualified for the Group to achieve
corporate value of JPY 1 trillion in the future.

- 42 -

Candidate
No.

Name
(Date of birth)

Career Summary and Position in the Company(Significant concurrent positions)Apr. 1988
Apr. 1997
Apr. 2001

4

5

Number of theCompany’s
Shares
Owned

Joined Recruit Co., Ltd. (currently Recruit Holdings Co., Ltd.)
Editor-in-Chief, “Tech Being”
Editor-in-Chief, “Recruit Navi Career” (currently “RikuNavi
NEXT”)
Apr. 2002
Editor-in-Chief, “Being” (Kanto region edition)
Apr. 2004
Corporate Executive Officer (responsible for Human Resource(HR) Division) of Recruit Holdings Co., Ltd.
Apr. 2006
Director, Recruit HR Marketing Co., Ltd. (currently Recruit
Tomoyuki
Jobs Co., Ltd.)
Mizutani
10,000
Apr. 2007
Director and Corporate Executive Officer (responsible for HR,(August 16, 1964)
administration, corporate communication) of Recruit Holdings
Co., Ltd.
Apr. 2011
President, Recruit Agent Co., Ltd.
Oct. 2012
First President, Recruit Career Co., Ltd.
Apr. 2015
Advisor, Recruit Holdings Co., Ltd.
Apr. 2016
Advisor, Japan Executive Search and Recruitment Association(current position)
Mar. 2017
External Director, the Company (current position)[Reasons for nomination as candidate for Director and outline of expected role]
Mr. Tomoyuki Mizutani has spent much of his career at Recruit Co., Ltd. (currently Recruit Holdings Co., Ltd.),
mainly in the HR business domain. He was active in multiple high-ranking executive positions, including as a
Corporate Executive Officer (responsible for HR Division) at Recruit and the first President of Recruit Career Co.,
Ltd. Outside of the Recruit Group, he has been active in a wide range of activities with HR and societal-contribution
themes, including cultivation of social entrepreneurs. In addition to such extensive experience, he possesses broad
insight. He has been nominated because he is expected to offer opinions and advice to ensure appropriate, soundmanagement decision-making from an independent and objective standpoint.
Apr. 1995
Joined The Fuji Bank, Limited (currently Mizuho Bank, Ltd.)May 1999
Joined NTT DATA INSTITUTE OF MANAGEMENTCONSULTING, Inc.
May 2005
Joined Mizuho Securities Co., Ltd.
Feb. 2006
Full-time Statutory Auditor, START TODAY CO., LTD.
(currently ZOZO, Inc.)
Koji Yanagisawa Jun. 2008
Director and General Manager of Strategic Planning and0(May 19, 1971)
Business Administration Division, START TODAY CO.,LTD.
Apr. 2009
Director and CFO, START TODAY CO., LTD.
Dec. 2015
External Director, COLOPL, Inc. (current position)
Apr. 2017
Director, Executive Vice President & CFO, START TODAYCO., LTD. (current position)
Mar. 2020
External Director, the Company (current position)[Reasons for nomination as candidate for Director and outline of expected role]
With his experience as CFO and others at a growing company, Mr. Koji Yanagisawa possesses broad insight in overallbusiness administration centered on accounting, finance, IR, legal affairs, and corporate governance. He has been
nominated because he is expected to offer opinions and advice to ensure appropriate, sound management decisionmaking from an independent and objective standpoint.

- 43 -

Candidate
No.

Name
(Date of birth)

Career Summary and Position in the Company(Significant concurrent positions)

Number of theCompany’s
SharesOwned

Aug. 2005
Jan. 2008

6

7

Joined Macromill, Inc.
Executive Officer (in charge of Finance and Accounting
Headquarters), Macromill, Inc.
Jun. 2008
Joined J-Magic K.K.
Dec. 2008
Director, CFO, General Manager of Administration
Management Division, J-Magic K.K.
Dec. 2009
Joined mixi, Inc.
Yasuhiro Ogino
Nov. 2011
Executive General Manager of the Administrative(September 29,
0
Headquarter, mixi, Inc.
1973)
Feb. 2012
Executive Officer, mixi, Inc.
Jun. 2012
Director, mixi, Inc.
May 2017
Representative Director, SMART HEALTH Inc.
Apr. 2018
Executive Officer, mixi, Inc.
Mar. 2020
External Director, the Company (current position)
Apr. 2020
Director and CFO, OCT Inc. (currently ANDPAD Inc.)(current position)[Reasons for nomination as candidate for Director and outline of expected role]
With his experience as CFO and others at growing companies, Mr. Yasuhiro Ogino possesses abundant insight inoverall business administration centered on business development and M&A. He has been nominated because he isexpected to offer opinions and advice to ensure appropriate, sound management decision-making from an independentand objective standpoint.
Oct. 2002
Joined Oracle Corporation Japan*
Dec. 2010
Co-founder & COO, Quipper Limited
Mariko Tokioka
0(July 29, 1978)
Oct. 2013
Founder & CEO, East Meet East, Inc. (current position)
Jun. 2019
External Director, Asteria Corporation (current position)[Reasons for nomination as candidate for Director and outline of expected role]
Ms. Mariko Tokioka is the founder and CEO of an IT company based in the U.S. and has a wealth of experience and awide range of insight, including entrepreneurial experience in the SaaS field, global business management, anddiversity management. She has been newly nominated because she is expected to offer opinions and advice to ensure
appropriate, sound management decision-making from an independent and objective standpoint.

(Notes) 1. New candidates for Director are indicated by an asterisk (*).
2. None of the candidates has any special interests in the Company or vice versa.
3. Messrs. Tomoyuki Mizutani, Koji Yanagisawa and Yasuhiro Ogino, and Ms. Mariko Tokioka are External Director
candidates.
4. Mr. Tomoyuki Mizutani is currently an External Director of the Company; he will have served as an External Director for
five years as of the conclusion of the 28th Annual General Meeting of Shareholders. Messrs. Koji Yanagisawa andYasuhiro Ogino will have served as External Directors for two years as of the conclusion of the said meeting.
5. If Messrs. Tomoyuki Mizutani, Koji Yanagisawa and Yasuhiro Ogino are reappointed, the Company plans to renew eachof the existing agreements with them pursuant to the provisions of Article 427, paragraph 1 of the Companies Act andArticle 32, paragraph 2 of the Company’s Articles of Incorporation. The agreements limit their liability for damages under
Article 423, paragraph 1 of the Companies Act to the minimum liability stipulated in Article 425, paragraph 1 of the sameact. If the election of Ms. Mariko Tokioka is approved, the Company plans to enter into the same liability limitationagreement with her.
6. The Company has concluded Directors and Officers liability insurance (D&O insurance) contracts with an insurancecompany, whereby the Directors of the Company and the Directors and the Auditors of the Company’s subsidiaries are theinsureds. The insurance contracts cover losses that may arise from an insured’s assumption of liability incurred in thecourse of the performance of duties, or receipt of claims pertaining to the pursuit of such liability. In the event that eachcandidate’s election as a Director is approved, he or she shall be the insured under the said insurance contract. The
insurance contract is scheduled to be renewed with the same terms and conditions at the next renewal.
7. Messrs. Tomoyuki Mizutani, Koji Yanagisawa and Yasuhiro Ogino meet the independent director requirements of theTokyo Stock Exchange, Inc. If reappointed, they will continue to serve as independent directors. Ms. Mariko Tokioka alsosatisfies the same requirements and will be reported as an independent director if her election is approved.
8. The number of the Company’s shares owned by Mr. Noboru Hachimine includes 4,520,200 shares owned by HIBC Co.,
Ltd., an asset management company wholly owned by Mr. Hachimine.
9. The number of the Company’s shares owned by Mr. Atsushi Nouchi includes 400,800 shares owned by Time and Space,Ltd., an asset management company wholly owned by Mr. Nouchi.

- 44 -

Proposal No. 3:

Election of Four (4) Directors Who Are Audit and Supervisory Committee Members

The terms of office of all the current four (4) Directors who are Audit and Supervisory Committee members will
expire at the conclusion of this Annual General Meeting of Shareholders. In that regard, the Company proposes toelect four (4) Directors who are Audit and Supervisory Committee members. The consent of the Audit andSupervisory Committee has been obtained for this proposal.
The candidates for Directors who are Audit and Supervisory Committee members are as follows:
Candidate
No.

Name(Date of birth)

Career Summary and Position in the Company(Significant concurrent positions)Apr. 1992
Mar. 1998
Oct. 2002
Jul. 2007
Oct. 2011

1

2

Number of theCompany’s
Shares
Owned

Joined THE OITA BANK, LTD.
Joined Takahashi Tax Accounting Office
Joined ChuoAoyama Audit Corporation
Joined Ernst & Young ShinNihon LLC
Established Okabe Yuki Certified Public Accountant and FP
OfficeYuki Okabe
Jun. 2016
Full-time Audit & Supervisory Board Member, fonfun
0(May 5, 1973)
corporation
Jul. 2018
Full-time Audit & Supervisory Board Member, AltPlus Inc.
Mar. 2020
External Director and Audit and Supervisory Committee
member, the Company (current position)
Mar. 2021
Auditor, SoldOut, Inc. (current position)
Mar. 2021
Auditor, Digital Shift, Inc. (current position)
Mar. 2021
Auditor, Bonds Investment Group, Inc. (current position)[Reasons for nomination as candidate for Director who is Audit and Supervisory Committee member and outline of
expected role]
In addition to possessing significant insight in finance and accounting as a CPA, Ms. Yuki Okabe has experience as an
Auditor at multiple listed companies. She has been nominated because she is expected to offer necessary opinions andadvice in the deliberation of matters from an objective standpoint.
Apr. 1971
Joined Dai-ichi Kangyo Bank, Limited (currently Mizuho
Bank, Ltd.)
Jun. 2001
Full-time Auditor, Seiko Instruments Inc.
Mar. 2016
Full-time Auditor, Crossfinity Inc.
FumiyukiMar. 2018
Auditor, OPT, Inc. (current position)
Shinomiya
0Mar. 2018
External Director and Audit and Supervisory Committee(September 27,
member, the Company (current position)
1948)
Apr. 2020
Auditor, OptDigital, Inc. (currently Re:teigi, Inc.) (current
position)
Oct. 2020
Auditor, RePharmacy, Inc. (current position)
Mar. 2021
Auditor, Vankable, Inc. (current position)[Reasons for nomination as candidate for Director who is Audit and Supervisory Committee member and outline of
expected role]
Mr. Fumiyuki Shinomiya possesses abundant experience and insight in the financial field both in Japan and overseas.
He has been nominated because he is expected to offer necessary opinions and advice in the deliberation of mattersfrom the standpoint of the objectivity and neutrality of management.

- 45 -

Candidate
No.

Name
(Date of birth)

Career Summary and Position in the Company(Significant concurrent positions)

Number of theCompany’s
SharesOwned

Mar. 1983
Mar. 1986
Aug. 2000
Sep. 2006

3

4

Joined Price Waterhouse Certified Public Accountants Office
Registered as Certified Public Accountant
Representative Partner, ChuoAoyama Audit Corporation
Representative Partner, PricewaterhouseCoopers Aarata
Masahiro(currently PricewaterhouseCoopers Aarata LLC)
Yamamoto
0Jul. 2019
Established Yamamoto Masahiro Certified Public Accountant(August 15, 1958)
Office (current position)
Mar. 2020
External Director and Audit and Supervisory Committee
member, the Company (current position)
Jun. 2021
Outside Audit & Supervisory Board Member, Nippon Suisan
Kaisha, Ltd. (current position)[Reasons for nomination as candidate for Director who is Audit and Supervisory Committee member and outline of
expected role]
In addition to possessing significant insight in finance and accounting as a CPA, Mr. Masahiro Yamamoto has
experience in supporting numerous companies as a Representative Partner of audit corporations. The Company expects
him to offer necessary opinions and advice in the deliberation of matters from an objective standpoint. Therefore, he
has been nominated as a candidate for Director who is Audit and Supervisory Committee member.
Oct. 2002
Joined Ushijima & Partners, Attorneys-at-Law*
Joined LIXIL Corporation
Ryoichi Kagizaki Jan. 2012
0(August 1, 1974)
Oct. 2017
Joined LINE Corporation
Jan. 2019
Joined Miura & Partners (current position)[Reasons for nomination as candidate for Director who is Audit and Supervisory Committee member and outline of
expected role]
Mr. Ryoichi Kagizaki has a wealth of experience and expertise as a lawyer. He has been newly nominated as a
candidate for Director who is Audit and Supervisory Committee member because he is expected to offer necessary
opinions and advice in the deliberation of matters.

(Notes) 1. New candidates for Director are indicated by an asterisk (*).
2. None of the candidates has any special interests in the Company or vice versa.
3. Ms. Yuki Okabe, Messrs. Fumiyuki Shinomiya, Masahiro Yamamoto and Ryoichi Kagizaki are External Director
candidates.
4. Ms. Yuki Okabe, Messrs. Fumiyuki Shinomiya and Masahiro Yamamoto are currently External Directors who are Audit
and Supervisory Committee members of the Company; they will have served as External Directors for two years, four
years, and two years, respectively, as of the conclusion of the 28th Annual General Meeting of Shareholders.
5. Ms. Yuki Okabe is an Auditor of SoldOut, Inc., Digital Shift, Inc., and Bonds Investment Group, Inc., which are
subsidiaries of the Company.
6. Mr. Fumiyuki Shinomiya is an Auditor of OPT, Inc., Re:teigi, Inc., RePharmacy, Inc., and Vankable, Inc., which are
subsidiaries of the Company.
7. If Ms. Yuki Okabe, Messrs. Fumiyuki Shinomiya and Masahiro Yamamoto are reappointed, the Company plans to renew
each of the existing agreements with them pursuant to the provisions of Article 427, paragraph 1 of the Companies Act andArticle 32, paragraph 2 of the Company’s Articles of Incorporation. The agreements limit their liability for damages under
Article 423, paragraph 1 of the Companies Act to the minimum liability stipulated in Article 425, paragraph 1 of the sameact. If the election of Mr. Ryoichi Kagizaki is approved, the Company plans to enter into the same liability limitationagreement with him.
8. The Company has concluded Directors and Officers liability insurance (D&O insurance) contracts with an insurancecompany, whereby the Directors of the Company and the Directors and the Auditors of the Company’s subsidiaries are theinsureds. The insurance contracts cover losses that may arise from an insured’s assumption of liability incurred in thecourse of the performance of duties, or receipt of claims pertaining to the pursuit of such liability. In the event that eachcandidate’s election as a Director who is Audit and Supervisory Committee member is approved, he or she shall be theinsured under the said insurance contract. The insurance contract is scheduled to be renewed with the same terms andconditions at the next renewal.
9. Ms. Yuki Okabe, Messrs. Fumiyuki Shinomiya and Masahiro Yamamoto meet the independent director requirements of
the Tokyo Stock Exchange, Inc. If reappointed, they will continue to serve as independent directors. Mr. Ryoichi Kagizaki
also satisfies the same requirements and will be reported as an independent director if his election is approved.

- 46 -