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 original shall prevail.
OPT Holding, Inc. assumes no responsibility for actions taken based on this translation.

(Securities code: 2389)
March 5, 2020
To our shareholders:
Noboru Hachimine
Founder, President and CEO
OPT Holding, Inc.
6, Yonbancho, Chiyoda-ku, Tokyo
Convocation Notice of the 26th General Meeting of Shareholders
You are cordially invited to attend the 26th General Meeting of Shareholders of OPT Holding, Inc. (the“Company”), which will be held as described below.
If you are unable to attend the meeting, you can exercise your voting rights by mailing the enclosed Voting
Rights Exercise Form or via the Internet. Please refer to the Reference Documents for the General Meetingof Shareholders, and exercise your voting rights no later than 6 p.m., Thursday, March 26, 2020 (JST).
1.

Date and time: Friday, March 27, 2020 at 10:00 a.m. (JST)2.

Place:

3.

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

Matters to be reported:
I. The Business Report, the Consolidated Financial Statements, and the audit results of the Consolidated
Financial Statements by the External Auditor and the Audit & Supervisory Committee of the Board for the
26th Fiscal Term (from January 1, 2019 to December 31, 2019) on OPT Holding consolidated basis.
II. Report on the Non-Consolidated Financial Statements of OPT Holding Inc. for the 26th Fiscal Term(from January 1, 2019 to December 31, 2019).
Proposals to be resolved:
Proposal No. 1:

Partial Amendments to the Articles of Incorporation

Proposal No. 2:

Election of six (6) Directors (Excluding Directors Who Are Audit & Supervisory
Committee Members)

Proposal No. 3:

Election of four (4) Directors Who Are Audit & Supervisory Committee Members

Proposal No. 4:

Determination of Amounts of Remuneration, etc. for Directors Who Are Audit andSupervisory Committee Members

－

1 －

4.

Instructions for Exercising Voting Rights(1) Exercising voting rights by paper form
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 p.m. (JST) on Thursday, March 26, 2020.
(2) Exercising voting rights via the Internet
To vote via the Internet, please refer to the “Voting Right Exercise Site (https://www.net-vote.com/)”(Japanese only) which are noted on the enclosed Voting Rights Exercise Form. Follow the instructions andindicate your approval or disapproval by 6 p.m. (JST) on Thursday, March 26, 2020. 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 duplicate voting
1) If you vote both in writing and via the Internet, we will treat the vote submitted via the Internet as valid.
2) If you vote both more than once via the Internet, we will treat the most recent vote as valid.

RequestWhen attending the meeting in person, you are kindly requested to submit the enclosed voting rights
exercise form to the receptionist at the meeting site. Please bring this Notice of the 26th Annual
General Meeting of Shareholders with you to the meeting.

Notice:The digital documents of the Convocation Notice of the General Meeting of Shareholders and theReference Documents for the General Meeting of Shareholders are available on the Company’s
website (http://www.optholding.co.jp/).
The English translated document of the Convocation Notice of the General Meeting of Shareholders andthe Reference Documents for the General Meeting of Shareholders are made available on the Company’s
website (http://www.optholding.co.jp/en).
Any amendments to the reference documents for the General Meeting of Shareholders, the Business
Report, the Consolidated Financial Statements or Non-consolidated Financial Statements will be postedon the Company website. (http://www.optholding.co.jp/).

－2 －Instructions Exercise of 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 use the Company’s designated voting website to submit votes regarding the proposals. Votes can besubmitted until 6 p.m. (JST), Thursday, March 26, 2020.
2. How to vote online[For PC users]
Access the Voting Right Exercise Site at the URL provided above, log in using the login ID and password
printed on enclosed voting rights exercise form and follow the instructions on the screen to indicate yourapproval or disapproval of the proposal.
[For smartphone users]
Simply scan the QR code® located on the bottom right of the enclosed voting rights exercise form. You don’t
have to enter Log-in ID nor password.
In case you wish to change any of your votes, access the Voting Right Exercise Site at the URL, you need to log
in using the login ID and password printed on the voting rights exercise form and follow the instructions on thescreen to indicate approval or disapproval of the proposal. (QR code® is a registered trademark of DENSOWAVE INCORPORATED).
3. Notes(1) Any costs arising from accessing the Voting Right Exercise Site shall be borne by the shareholder.
(2) Depending on your network environments, you may not be able to exercise your voting rights.
(3) The Voting Right Exercise Site is not accessible via the cellular phones.
Institutional investors can exercise the 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
IR Japan, Inc., Custody Service Department
TEL 0120-975-960
Business Hours: 9:00 a.m. to 5:00 p.m. JST (not available on Saturdays, Sundays and holidays)－

3 －Business Report (January 1, 2019 to December 31, 2019)
1. Overview of the Group(1) Business for the year ended December 31, 2019
OPT group (hereinafter “the Group”) set the management policy to maximize corporate value and cash flows byleading any and all corporate “digital shift” in response to the rapidly advancing digital industrial revolution, basedon the mission of “support, innovate, and create digital industrial revolution.” Under the currently-engaged businessstructure reform, the Group expanded its business domain by shifting its main business from the marketing businesscentering on clients’ promotion support to the digital shift related businesses, thereby making a shift from theprevious goal “net sales of one trillion yen by 2030,” which is centering on the existing business growth, to“corporate value of one trillion yen by 2030.”
In order to achieve the above goal, the Group will work on improving the profitability of the existing Internet
Advertisement Marketing Business and realize our business model diversification by taking the following specificmeasures leading to future growth: (1) Establishment of an expert organization making promotion proposals to
midsize and growing venture clients in the Tokyo metropolitan area, (2) establishment of a joint venture engaging in
product development and provision in the Marketing Business through joint investment with SoldOut Group, (3)entry to the worker dispatch business and consulting business handling professionals related to the digital shift, and(4) expansion of further open innovation utilizing the existing assets.
According to our core management policy, maintaining strong financial foundation is essential to increase ourcorporate value. At the same time, we proactively utilize management resources, especially cash. To be specific,
setting at least 10% IRR (internal rate of return) as our targeted return from the investments, we aim to maximize
shareholders’ return by accelerating mid-to-long term EPS growth through the following measures: We plan toimplement approximately 20 billion yen investment on mainly existing businesses related to the digital shift andM&As related to the digital shift creation, separately from the existing businesses, within three years from FY 2019.
As a results of business operations based on the above management policy, the results of operation for the year ended
December 31, 2019, were as follows.
2019
Actual
89,953
17,715
2,633
2,833
187
2,664
4,756
1,928
7.6%
1,370
84.18
84.23

(in million yen unless otherwise stated)
Revenue
Gross profit
Operating income
Ordinary income
Extraordinary loss
EBIT*
EBITDA**Net income attributable to owners of parent
ROE (Last twelve month; LTM, %) ***Free cash flow****
Earnings per share- diluted (yen)Earnings per share- basic (yen)Year-on-year change (%)
Adjusted*****
Nominal
4.9%
3.1%
4.1%
2.1%
39.2%
49.0%
57.9%
69.7%
************(6.9%)(18.4%)
1.2%(21.9%)
24.0%
0.3%(2.3pts)(64.0%)(0.0%)(0.5%)

Notes:
1. EBIT= Net income before taxes and other adjustment ＋interest paid －interest received
2. EBITDA = EBIT + other financial related gains (losses)+ depreciation + amortization of intangible assets + amortization of long-term prepaid
expenses + Non-cash gain(loss)
3. Return on equity (ROE): Net income attributable to owners of parent in last twelve months/average amount of equity as of the end of reporting
year and previous year
4. Free cash flow (FCF)=Operating cash flow+ investing cash flow ±one-off cash flow items
5. Figures are compared to excluding the impact of the business transfer implemented during 2018 Q3. Approx. 1.7% of consolidated sales for2018 was by video streaming business, operated by relaid Inc., (formally Skill-up Video Technology, Inc)
6. Figures were omitted due to relevant amounts in reporting or the current period are negative.

－ 4 －The full-year results for each reporting segments are as follows. Comparison from the previous year have been
replaced into current reporting segments.

Marketing Business
The table below shows 2019 full-year results of Marketing Business before Corporate Function Cost allocation.

2019
Actual
83,347
14,157
3,028
3,045
428
2,615
3,446

(in million yen unless otherwise stated)
Revenue
Gross profit
Operating income
Ordinary income
Extraordinary loss
EBIT
EBITDA

Year-on-year change (%)
Adjusted*
Nominal
3.4%
1.6%(2.8%)(4.9%)(27.6%)(25.4%)(27.7%)(25.5%)****(31.4%)(38.0%)(27.9%)(44.1%)

Note:
1. Figures are compared to excluding the impact of the business transfer implemented during 2018 Q3. JPY 1,461 million of quarterly consolidated
sales for FY 2018 was by video streaming business, operated by relaid Inc., (formally Skill-up Video Technology, Inc)
2. Figures were omitted due to relevant amounts in reporting or the current period are negative.

Operating results of the Marketing Business segment for full-year 2019 was as follows. Revenue was JPY 83,347
million (up 1.6% YoY), gross profit JPY 14,157 million (down 4.9% YoY), operating income JPY 3,028 million(down 25.4% YoY), ordinary income JPY 3,045 million (down 25.5% YoY), extraordinary loss JPY 428 million(JPY 130 million profit for 2018), EBIT JPY 2,615 million (down 38.0% YoY) and EBITDA JPY 3,446 million(down 44.1% YoY). Results adjusting the impact of the video streaming business of relaido, Inc. absence, the growthrate from the previous year was, up 3.4% for revenue, down 2.8% for gross profit, down 27.6% for operating
income, down 27.7% for ordinary income, down 31.4% for EBIT, and EBITDA down 27.9% respectively.
After excluding results of relaido, Inc.’s video streaming business from 2018 Q3, the reasons for the changes in the
key items were as follows.
1. Revenue for Marketing Business segment was JPY 83,347 million (up 3.4% YoY). In the Large

Corporations sub-segment, revenue for the current consolidated fiscal year was JPY 64,209 million (down
0.3% YoY) due to the impact of continued reduction of advertising budgets by certain existing clients, eventhough efforts were focused on the acquisition of large-scale new project orders mainly from national clients.
In the Local SMEs sub-segment, revenue was JPY 19,703 million (up 17.2% YoY) due to the acquisition of
new clients and an increase in advertising budgets by existing clients.
2. Gross profit for Marketing Business segment was JPY 14,157 million (down 2.8% YoY). In the Large

Corporations sub-segment, gross profit was JPY 10,424 million (down 5.8% YoY) due to the decline in the
gross profit rate, etc. In the Local SMEs sub-segment, gross profit was JPY 3,745 million (up 6.9% YoY),
mainly due to growth in net sales of 17.2%, partially offset by low profit margins in projects other than theoperational agency service.
3. Operating income for Marketing Business segment was JPY 3,028 million (down 27.6% YoY). In the Large

Corporations sub-segment, operating income was JPY 2,324 million (down 28.5% YoY) due to the decline
in the gross profit rate, despite efforts on selling, general and administrative expenses reductions. In the
Local SMEs sub-segment, operating income was JPY 697 million (down 25.1% YoY) due to an increase of
JPY 474 million YoY in selling, general, and administrative expenses as a result of continued investment in
human resources, in spite of an increase in gross profit.
4. EBIT for Marketing Business segment was JPY 2,615 million (down 31.4% YoY). In the Large

Corporations sub-segment, EBIT was JPY 2,012 million (down 30.6% YoY) due to the decline in operating
income. In the Local SMEs sub-segment, EBIT was JPY 604 million (down 35.8% YoY) due to the loss on
valuation recognized for investment securities in partnership.
5. EBITDA for Marketing Business segment was JPY 3,446 million (down 27.9% YoY). In the Large

Corporations sub-segment, EBITDA was JPY 2,621 million (down 29.4% YoY) as a result of the recordingof valuation loss on noncurrent assets in the previous consolidated fiscal year. In the Local SMEs sub－ 5 －segment, EBITDA was JPY 825 million (down 26.2% YoY) due to the reversal of the loss on valuation of
investment securities.
Measures taken by the companies in Marketing Business in 2019 were as shown below.
OPT, Inc.'s activity highlights:-

Began offering creative production packages optimized for TikTok's unique outlook, in order to promotesales of TikTok's advertising services. Strengthened marketing support services for wide range ofgeneration especially for young people.

-

Launched new marketing support program utilizing CDP for promoting the digital shift for real store
operators. CDP (Customer Data Platform) is a platform to collect, accumulate, and integrate individualuser’s profile and behavioral data without specific private information. Every user touching point data will
be integrated into single user ID and it leads better services by sales personnel and promotion activities.
OPT is the first agent among Japanese agencies to register “US CDP association” and aims to be a leading
company in this field by actively holding events and seminars and introducing cases of CDP usage insideand outside of Japan.

-

Started to provide a newly developed analytic tool “Basis”. It is an analytic tool for consumer insights; byconstructing unique database with 37 profiles, 63 items, and log data which were obtained from a survey
about purchase information and personal values toward more than 10,000 panels. With this tool, OPT will
support more efficient marketing activities by providing concrete image of target users.

-

We set the development and sales of services other than advertising agency business as the focus area. In
order to optimize the allocation of management resources, we carried out business reorganizations, inwhich the performance marketing business and the social media marketing business of Crossfinity Inc.
were succeeded by OPT, Inc., and its website consulting business was succeeded by Heartlass, Inc.
(October 1, 2019).

-

OPT, Inc. commenced a strategic partnership with YRGLM Inc. in the data marketing business. As part ofthe measures, OPT, Inc. assigned its advertisement effectiveness measurement tool, “ADPLAN” toYRGLM Inc. OPT, Inc. will focus on the data marketing business in charge of “accumulation,” “analysis,”and “utilization” of the data after the measurement.

SoldOut’s activity highlights:-

Switched to the TSE First Section on March 22 2019.

-

TechLoCo, Inc., a consolidated subsidiary of SoldOut released “lycle GMB (Google My Business,“GMB”),” a tool to enter and control registration, updates, and improve efficiency on GMB from the LINE
Talk Screen. The strength of this service is seamless controllability realized by joint development with
LINE Corporation and Google. This service support store operators’ marketing activities such as
promoting recognition and customer attraction through widely spreading their attractive information withaccuracy and easy-to-use operating system.

-

On July 1, 2019, Search Life, Inc. and TechLoCo, Inc. the consolidated subsidiaries of SoldOut, merged
and commenced operations as “SO Technologies Co., Ltd.” In pursuit of the vision “To create a digital
customer acquisition platform that makes it easy for anyone and anywhere in Japan to transform passion
into earning power,” the new entity will develop and provide higher-value services by harnessing
accumulated know-how and technology.

-

Established an operation center for programmatic advertising, “Digital Operation Center Shimanto” in
Shimanto-shi, Kochi prefecture. At the operation center specialized in advertising operations, theframework of advertising operations suitable for advanced automation technology was developed. The
system was established so as to facilitate the provision of support to small and medium-sized enterprises
and start-ups throughout Japan more than ever. Furthermore, SoldOut, Inc. will promote new hiring,industrial development and human resource development in Kochi, thereby contributing to therevitalization of regional economies in the surrounding area.

－ 6 －Synergy Investment Business
The table below shows 2019 full-year results of Synergy Investment Business before corporate function costallocation.
2019(in million yen unless otherwise stated)
Revenue
Gross profit
Operating income
Ordinary income
Extraordinary income
EBIT
EBITDA

6,640
3,596
1,916
2,204
235
2,436
3,370

Year-on-yearchange (%)
26.0%
44.0%
-*
-*
(84.8%)
156.4%
105.6%

Note: Figures were omitted due to relevant amounts in reporting or the previous period are negative.

Operating results of the Synergy Investment Business segment for 2019 was as follows. Revenue was JPY 6,640 (up26.0% YoY), gross profit was JPY 3,596 million (up 44.0% YoY), operating income was JPY 1,916 million (JPY
466 million loss for 2018), extraordinary income was JPY 235 million (down 84.8% YoY), EBIT JPY 2,436 million(up 156.4% YoY) and EBITDA JPY3,370 million (up 105.6% YoY).
The reasons for the difference from the previous year were as follows.
1. Revenue was JPY 6,640 million (up 26.0% YoY) as a result of selling a part of our holdings of RAKSUL

shares to overseas (3,631 million yen) of some of the Raksul shares held by the Group as operational
investment securities, in spite of the impact of the exclusion of subsidiaries subject to consolidation such as
Writeup and eMFORCE Inc. from the consolidation due to the disposal thereof (2,087 million yen).
2. Gross profit was JPY 3,596 million (up 44.0 % YoY) as a result of the gain from selling a part of ourholdings of RAKSUL shares to overseas (2,886 million yen), in spite of the impact of the exclusion ofsubsidiaries subject to consolidation such as Writeup and eMFORCE Inc. from the consolidation due to thedisposal thereof (1,226 million yen) in the same as revenue.
3. Operating income was JPY 1,916 million, which is an increase of JPY 2,383 million from operating loss of

466 million yen in the previous consolidated fiscal year, as a result of a decrease in the SG&A costs due tothe exclusion of subsidiaries subject to consolidation such as Writeup and eMFORCE Inc. from theconsolidation due to the disposal thereof, in addition to an improvement of gross profit.
4. Ordinary income was JPY 2,204 million, which is an increase of JPY 2,794 million from ordinary loss of

JPY 590 million in the previous consolidated financial year, due to improved profit of companies accounted
for using the equity method and non-operating loss arising from the liquidation of overseas subsidiaries in
the previous consolidated fiscal year, in addition to an improvement of operating income.
5. Extraordinary income was JPY 235 million (down 84.8 % YoY) due to the extraordinary losses in overseas

subsidiaries in China and due to extraordinary profit of JPY 1,254 million as a result of the sale of Writeup
shares in the previous consolidated fiscal year, in spite of extraordinary profit as a result of the sale of a
subsidiary in South Korea, eMFORCE in July 2019 and the affiliated company, Chai Communication Co.,
Ltd. in September 2019
6. EBIT was JPY 2,436 million (up 156.4 % YoY) mainly due to the disposal of overseas subsidiaries asmentioned in 5) above, in addition to an improvement of ordinary income.
7. EBITDA was JPY 3,370 million (up 105.6% YoY) due to the reversal of impairment from investment

securities and the Chinese subsidiaries, in addition to an improvement of EBIT.

Measures taken by the companies under synergy investment segments in 2019 were as shown below.
Financial investment sub-segment:-

As a part of final close of the deal of OPT Ventures No.2 fund, JPY 3 billion investment contract was
signed with the Organization for Small & Medium Enterprises and Regional Innovation, JAPAN in
October 2019. The fund was closed with the total commitment of JPY 7.4 billion in December 2019.

－ 7 －

-

As a result of selling a part of our holdings of RAKSUL shares to overseas, revenue of JPY 3,631 million
and gross profit of JPY 2,886 million was recorded. (Released on November 14, 2019)-As a result of selling a part of our holdings of SPACEMARKET shares through an initial public offering ,revenue of JPY 63 million and gross profit of JPY 38 million was recorded.

Business development sub-segment:-

SIGNATE, Inc. supports companies’ AI development using open innovation, with a membership baseconsisting of office workers and students possessing AI developmental skills. Participation of thesemembers will expand the scope of the explanatory analysis, which has a significant influence on theaccuracy of AI models, and will make the procurement of advanced AI possible. The number of registrants
has rapidly increased. The number of registered engineers at the end of December 2019, which is one year
from the opening, was approximately 26,000 users.

-

SIGNATE Inc. released “SIGNATE Quest,” an AI human resource development online training course forcorporations on October 1, 2019. In addition to the fostering of data scientists who implement AI, it aims
to develop business-related human resources that promote AI projects.

China business sub-segment:-

The Company established OPT China, Inc. by incorporation-type of company split to take over the China
businesses operated by OPT Holding, in order to expand its earnings and to realize efficient groupmanagement (effective from 1 April 2019). OPT China has changed its business model from conventionalcross-border e-Commerce where sales contact is limited to special EC site to general trading model. In
addition, OPT China is aiming to expand its business by changing its main vendors to Japanese SMEs with
exclusive selling rights in China granted to OPT China, and by creating a structure to develop best-selling
products with the manufacturers.

Overseas sub-segment:-

Sold all of the shares of a subsidiary in South Korea, eMFORCE Inc., to Digital Advertising ConsortiumCo., Ltd resulting in JPY 260 million of extraordinary income. In addition, sold all of the shares of theaffiliate company, Chai Communication Co., LTD., to the company Chai and the president Mr. Young Sup
Choi resulting in JPY 231 million of extraordinary income.

The Group discloses AUM (Assets Under Management) and IRR (Internal Rate of Return) to enhance thetransparency of investment returns. At the end of the current consolidated accounting period, AUM was JPY 22,961
million (up 8.2% YoY) due to the increase of the market value of Raksul Inc., etc.,. IRR after tax at the end of
December 2019 was 11.9 %, which is a decrease by 2.1 point compared to the end of the previous consolidated fiscal
year, in relation to the decline in the market value of SoldOut, Inc., which is a consolidated subsidiary company.

The definitions of AUM and IRR are as follows.
Assets Under Management (AUM)
AUM is defined as aggregate amount of 1) book value of subsidiaries’ and affiliates’ stocks and 2) fair market valueof operational investment securities and invested securities. For assets categorized 2), impairment will be reflected to
the value to be aggregated.
(1)

Shares of subsidiaries and affiliates; book value is applied(2)

Operational investment securities and investment notes and securities: each notes and security’s FMV is
calculated depending on the classification shown below;i.

Notes or securities of which investment amount is small: acquisition priceii.

Listed companies’ shares: closing price at the end of reporting periodiii. Securities with financing in recent period: based on value of relevant financing
iv. Other securities estimated by comparable multiple, DCF, or net asset valuation depending on eachcompany’s performance
The AUM calculation is prepared with guidance and advice by KPMG Azsa.

－ 8 －Internal Rate of Return (IRR)
Prerequisites for calculation (Un-sold securities are calculated as if they are sold)-Subject to : Those the Company has invested in from 2003 to the end of December 2019 (including
securities of operational investment securities, investment securities, shares of subsidiaries and sharesof affiliates)-

The reference date for calculation: December 31, 2019

Method:1.

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

2.

Investment with recent financing: Calculated as if they were sold at the finance valuation.

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 tax are included

Corporate function cost
The table below shows 2019 results of Corporate Function Cost (excluding loss on derivative evaluation)
2019(in million yen unless otherwise stated)
Selling and administrative expense
Operating loss
EBIT
EBITDA

2,290
2,302(2,387)(2,043)Difference from 2018
468
480
(594)
(445)

Note: Negative amount in this column means increase of expense.

The Corporate Function acknowledges recruiting and development of human resources as an important management
agenda to realize the mid-term management plan, and makes efforts in hiring mid-career workers and fostering
human resources. Moreover, in September 2018, as a result of introducing a restricted stock compensation plan as anincentive to improve its corporate value, selling and administrative expense in corporate function cost for 2019 was
JPY 2,290 million, (JPY 1,822 million in 2018), EBITDA was negative JPY 2,043 million (negative JPY 1,598
million in 2018).

－ 9 －(2) Issues to be addressedWith regard to issues to be addressed of the Group, following seven items are the major management agenda.
1. Expansion of target client base in the Marketing Business
2. Strengthening of sales force, and enhancement of technology development by our engineers
3. Greater efficiency and automation of business processes for improved productivity, and improvement of
profitability
4. Hiring and training of digital professionals
5. Expansion of services in the new digital shift businesses
6. Strengthening of Group cooperation and use of Group assets
7. Establishment of the Group-wide management control system which enables both effective governance andtimely management decision-making(3) Capital Expenditure
There were no significant capital expenditures.
(4) Financing
There were no significant capital financings.
(5) Significant Reorganizations and Other Such Events
1) On April 1, 2019, the Company conducted a company split of the Overseas Business Promotion Dept.
(China), which was succeeded by the newly established OPT China, Inc., manages as a wholly owned
subsidiary of the Company.
2) On July 31, 2019, the Company transferred all shareholding of eMFORCE Inc. (hereafter referred to as“eMFORCE”) to Digital Advertising Consortium Inc., and eMFORCE ceased to be a consolidated
subsidiary of the Company.
3) On October 1, 2019, the Company’s subsidiary OPT, Inc. conducted an absorption-type merger in which
OPT, Inc. was the surviving company and the Company’s subsidiary Consumer first, Inc. was the absorbed
company.
4) On October 1, 2019 the Company’s subsidiary Crossfinity Inc. conducted an absorption-type company split
in which the performance marketing business and social media marketing businesses were succeeded by theCompany’s subsidiary OPT, Inc. and the website consulting business was succeeded by Heartlass, Inc.
(6) Assets, revenue and income(Yen in millions,
unless otherwise stated)

FY2016FY2017FY2018FY2019

Revenue

69,81582,602

87,21689,953

Ordinary income

2,004

1,921

1,669

2,833

745

1,011

1,922

1,928

Net income attributable toowners of parent
Net income per share (Yen)

28.81

43.95

84.66

84.23

Total assets

46,325

46,12756,551

61,132

Net assets

19,72018,81327,13332,601(Note) Net income per share is calculated based on the average number of shares outstanding (total issued shares net of treasury
shares) during each fiscal year.
(Application of “Partial Amendments to Accounting Standard for Tax Effect Accounting” and relevant Guidance)“Partial amendments to Accounting Standards for Tax Effect Accounting” (ASBJ statement No. 28, February 16, 2018) andrelevant Guidance was applied from the beginning of the previous fiscal year. Deferred tax assets are classified in investments
and other assets and deferred tax liabilities are classified in noncurrent liabilities.

(7) Status of Parent Company and Principal Subsidiaries (As of December 31, 2019)1) Status of Parent Company
Not applicable.
－ 10 －

2) Status of Principal Subsidiaries
Capital(Yen in millions)Company Name

Voting rights owned by
the Company

Major businesses

OPT, Inc.

100

100.0%

Marketing business

SoldOut, Inc.

599

56.5%

Advertising agency business serving mid-sized
and venture companies

SO Technologies, Inc.

45

56.5%

Provides marketing technology to small- to
mid-sized companies

Heartlass, Inc.

15

100.0%

Full-line of programmatic advertising
operations(Notes) 1. The Company has 24 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.

(8) Major Businesses (as of December 31, 2019)
The Group is comprised of OPT Holding, Inc. and 24 consolidated subsidiaries as of the end of the fiscal year
ended December 31, 2019. It operates a Marketing Business segment and a Synergy Investment Businesssegment. The Marketing Business provides Internet advertising agency, digital marketing, and related services
to large companies and various digital marketing solutions to small- to mid-sized regional companies. The
Synergy Investment Business provides support to investees, invests in internet-related venture companies,
collects information in the US, develops AI and AI platforms, provides support and educational services tocompanies on the digital shift, and conducts general trading operations in China.
Segment
Marketing Business

Synergy Investment Business

Major businesses• Internet advertising, digital marketing, and related services to large-scale companies• Digital marketing solutions to small- to mid-sized regional companies• Investments in Internet-related venture companies• Information gathering in US• Development of AI and AI platforms• Support and educational services to companies on the digital shift• General trading operations in China(9) Major Offices (As of December 31, 2019)1) Main Office
OfficeHead Office

Address
Chiyoda-ku, Tokyo

2) Subsidiaries
Company Name
OPT, Inc.
SoldOut, Inc.
SO Technologies, Inc.
Heartlass, Inc.

Address
Chiyoda-ku, Tokyo
Chiyoda-ku, Tokyo
Chiyoda-ku, Tokyo
Chiyoda-ku, Tokyo(10) Workforce (As of December 31, 2019)
Number of Employees

Change from Dec. 31, 2018

1,508

(123)

(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.
3. Decreased from the end of the previous fiscal year due to the sales of overseas subsidiaries and other factors.

－ 11 －

(11) Main Lenders (As of December 31, 2019)
Amount borrowed(Yen in millions)
3,017

LenderSumitomo Mitsui Banking Corporation
Mizuho Bank, Ltd.

2,500

Syndicate Loan

1,750

MUFG Bank, Ltd.

1,000

Resona Bank, Limited.

450(Note) The syndicate loan is provided by 15-bank syndicate, lead-managed by Sumitomo Mitsui Banking Corporation.

(12) Other Significant Matters Concerning the GroupNot applicable.

－ 12 －

2. Status of the Company(1) Matters Concerning Shares (As of December 31, 2019)1) Total number of shares authorized to be issued
86,630,400 shares2) Total number of shares issued
23,817,700 shares (including 917,705 treasury shares)
3) Number of shareholders
3,4614) Major Shareholders (Top 10)
Number of Shares Held
(Shares)
4,770,200
1,499,500
1,157,912
1,044,112
1,036,900
885,000
883,350
755,800
545,200
500,800

Shareholder
HIBC Co., Ltd.
Japan Trustee Services Bank, Ltd. (Trust account)
Goldman Sachs International
GOLDMAN,SACHS& CO.REG
Tomohito Ebine
Atsushi Nouchi
CGML PB CLIENT ACCOUNT/COLLATERAL
Mynavi Corporation
The Master Bank of Japan, Ltd. (Trust account)
The Bank of New York, JASDEC Treaty AccountOwnership of Shares (%)
20.83%
6.54%
5.05%
4.55%
4.52%
3.86%
3.85%
3.30%
2.38%
2.18%

*1. The Company holds 917,705 treasury shares which is omitted from the above list of major shareholders.
The treasury shares (917,705 shares) do not include the shares held by OPT Group Employee Stock Ownership Plan (125,015
shares).
*2. Ownership percentages are calculated based on shares outstanding (issued shares net of treasury shares) and rounded off to two
decimal places.
*3. HIBC Co., Ltd., is an asset management company wholly owned by the Company President and Group CEO, Noboru Hachimine.
*4. Time and Space, Ltd, an asset management company wholly owned by the Director and COO, Atsushi Nouchi, holds 390,800
shares of the Company.
*5. Dalton Investments LLC held the following shares as of June 25, 2019, which was reported by Large Shareholding Report(Change Report) submitted on June 28, 2019. However, the Company could not confirm the number of shares actually held by theentity as of the end of reporting period. Thus, major shareholders are described based on the register of shareholders at the end of
the reporting year. The following table is the summary of the Report.
Name or Name of Institution
Dalton Investments LLC

Address
1601 Cloverfield Blvd. #5050N, Santa
Monica, California, 90404, United State

Number of shares held*
3,216,000(Note) The number of shares held is described in the Report as of June 28, 2019.
*6. 3D Investment Partners Private Ltd., held the following shares as of July 22, 2019, which was reported by 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 the end of reporting period. Thus, major shareholders are described based on the register of shareholders at theend of the reporting year. The following table is the summary of the Report.
Name or Name of Institution
3D Investment Partners Private Ltd.

Address
250 North Bridge Road
#13-01 Raffles Ci Raffles City
Singapore, 179101
Singapore(Note) The number of shares held is described in the Report as of July 29, 2019.

5) Other Significant Matters Concerning Shares
There were no significant capital expenditures－ 13 －

Number of shares held*
2,268,100

(2) Matters Concerning Corporate Officers
1) Matters Concerning Directors (As of December 31, 2019)
Position in Company

Area of Responsibility andSignificant Other Positions
Director at SoldOut, Inc.
Independent Outside Director at UT Group Co.,Ltd.
CEO at OPT Ventures, Inc. Representative
Director and CEO at OPT Incubate,Inc.

Name

President and Group CEO

Noboru Hachimine

Vice President and Group COO

Atsushi Nouchi

Director Group CFO
Director
Director
Director (Chairman of Audit andSupervisory Committee, full-time)
Director (Audit and Supervisory
Committee member)
Director (Audit and Supervisory
Committee member)

Hiroshi Teraguchi
Shusaku Minoda
Tomoyuki Mizutani
Fumiyuki Shinomiya

Auditor at OPT Inc.

Nobuaki Ishizaki

Outside Auditor, Aucfan Co.,Ltd. Outside
Auditor, Global Kids Company Corp.

Toshio Yamaue

Lawyer(Notes) 1. Director Tomoyuki Mizutani, and Directors and Audit and Supervisory Committee members, Fumiyuki Shinomiya,
Nobuaki Ishizaki and Toshio Yamaue are External Directors.
2. Director and Audit and Supervisory Committee member Fumiyuki Shinomiya had a long career at a financial institution
and possesses considerable expertise in financial matters and accounting.
3. Director and Audit and Supervisory Committee member Nobuaki Ishizaki previously worked in finance and accounting at
a listed company and possesses considerable expertise in financial matters and accounting as a credentialed SME
management consultant.
4. The Company established a full-time Audit and Supervisory Committee position to strengthen audit and oversightfunctions, improve information gathering and increase audit effectiveness.
5. The Company has designated Director Tomoyuki Mizutani and Directors and Audit and Supervisory Committee members
Fumiyuki Shinomiya, Nobuaki Ishizaki and Toshio Yamaue 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.
6. The Company and Directors Shusaku Minoda and Tomoyuki Mizutani and Directors and Audit and Supervisory
Committee members Fumiyuki Shinomiya, Nobuaki Ishizaki and Toshio Yamaue have entered into agreements limiting
each of the five (5) Directors’ liability for damages under Article 423 (1) of the Companies Act to the statutory prescribedminimum liability, pursuant to the Company’s Articles of Incorporation.

2) Directors’ Total Compensation
Subgroup

Number of Recipients

Directors (excluding those who are Audit andSupervisory Committee members)(External Directors’ share thereof)
Directors (Audit and Supervisory Committee
members)(External Directors’ share thereof)
Total(External Directors’ share thereof)

Total Compensation(Yen in thousands)

5 (1)201,622(11,125)3 (3)25,422(25,422)8 (4)227,044(36,547)(Notes) 1. Directors’ total compensation does not include salaries earned as employees by Directors who concurrently hold employee
positions.
2. The above compensation includes JPY 62,184 thousand expense recognized in the fiscal year ended December 31, 2019, in
connection with one (1) Director’s restricted stock compensation.
3. At an Annual General Meeting of Shareholders on March 25, 2016, shareholders passed a resolution limiting Directors’
annual compensation to a maximum of JPY 200 million for Directors who are not Audit and Supervisory Committee
members and JPY 30 million for Directors who are Audit and Supervisory Committee members. To award restricted stock
grants to Directors (excluding External Directors and Directors who are Audit Committee members), shareholders passed
an additional resolution authorizing total Directors’ compensation of up to JPY 550 million per year at the 24th Annual
General Meeting of Shareholders on March 29, 2018.

－ 14 －

3) Matters Concerning External Directors
Position in the Company

Name

Significant Concurrent
Positions at Other Entities

Director

Tomoyuki
Mizutani

Director(Chairman of Audit andSupervisory Committee)

Fumiyuki
Shinomiya

Auditor, OPT, Inc.

Director(Audit and Supervisory
Committee member)

NobuakiIshizakiOutside Auditor, Aucfan
Co., Ltd.
Outside Auditor, Global
Kids Company Corp.

Director(Audit and Supervisory
Committee member)

ToshioYamaueLawyerMain Activities at the Company
Mr. Mizutani attended 17 of 19 Board meetings held in
2019. He appropriately spoke up at meetings to ensure
the soundness of the Board’s decision-making from an
objective and neutral standpoint independent frommanagement, capitalizing on his wealth of experience andlong track record in corporate management.
Mr. Shinomiya attended 18 of 19 Board meetings and 13
of 14 Audit and Supervisory Committee meetings held in2019 after his appointment. He appropriately provided
valuable perspectives on agenda items and otherdiscussions, capitalizing on his insight and wealth ofdomestic and international experience, mainly in thefinancial sector.
Mr. Ishizaki attended all 19 Board meetings and all 14
Audit and Supervisory Committee meetings held in 2019.
He appropriately provided valuable perspectives on
agenda items and other discussions from both fairness
and objectiveness viewpoint as certified SME
management consultant.
Mr. Yamaue attended all 19 Board meetings and all 14
Audit Committee meetings held in 2019. Heappropriately provided valuable agenda items and otherdiscussions from lawyer’s perspectives.

(Notes) 1. OPT, Inc., at which Director (Audit and Supervisory Committee Chairman) Mr. Shinomiya holds position, is subsidiary of
the Company.
2. The Company’s relationships with Aucfan Co., Ltd., and Global Kids Company Corp., two companies at which Mr.
Ishizaki holds positions, do not warrant disclosure.

(3) Independent External Auditor
1) Name KPMG AZSA LLC
2) Amount of Compensation(Yen in thousands)
45,200Independent auditor’s compensation for fiscal year ended December 31, 2019
Total monetary amount payable to the independent auditor by the Company and its subsidiaries 70,600(Notes) 1. The audit agreement between the Company and its independent 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
independent auditor’s compensation for the fiscal year ended December 31, 2019.
2. The Audit and Supervisory Committee approved the independent auditor’s compensation after performing
required verification of the appropriateness of the independent auditor’s audit plan, audit performance and basis
for calculating estimates of its compensation.

3) Non-Audit Services
The Company paid KPMG AZSA LLC compensation for advisory services.
4) Policy for Dismissal or Non-reappointment of Independent External Auditor
If the Audit and Supervisory Committee decides that the independent auditor needs to be replaced for failure
to perform its duties or for other reasons, it shall draft a proposal regarding dismissal or non-reappointmentof the independent auditor to an Annual General Meeting of Shareholders. Additionally, if any of the causes
for dismissal fall into the stipulation of Article 340 (1) of the Companies Act, the Audit and Supervisory
Committee may dismiss the independent auditor with the unanimous consent of all of its members.
If the independent 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
Annual General Meeting of Shareholders convened after the dismissal.

－ 15 －

3.

The Systems and Policies of the Group(1) System for ensuring the appropriateness of Business Operation
1) Controls to Ensure the Company and Its Subsidiaries’ Directors and Employees Comply with Laws andArticles 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, working to
improve the compliance knowledge of the Directors and employees of the Company and its subsidiaries,
and to cultivate a mindset of respect for compliance. Based on the “Group Internal Audit Rules,” theCompany’s Internal Audit Office conducts regular audits of the execution of duties and confirms that theexecution of duties complies with laws and the Articles of Incorporation.
2) Controls 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“Information Security Policy,” the “Group Rules to Prevent Violations of Insider Trading Rules,” and the“Basic Rules on Protecting Personal Information.” The Company’s subsidiaries keep such information
readily accessible if requested to do so by the Company’s Audit and Supervisory Committee or their own
auditors.
3) Regulations and Other Controls Related to Management of the Company and Its Subsidiaries’ Risk of
LossesBased on the “Group Risk Management Guidelines” and the “Risk Management Rules,” the Company
operates a Group Risk Management Committee composed of the Company’s corporate officers, mainly
those responsible for Group risk, and the Group Risk Management Committee reports on the state of risk
management to the Board of Directors on an as-needed basis. The Company’s subsidiaries haveestablished each company’s internal regulations and other controls, and implemented their own controls for
managing risks, including the risk of losses, to the extent needed by their scale, attributes and otherrelevant circumstances.
4) Controls to Ensure the Company and Its Subsidiaries’ Directors Execute Their Duties Effectively
The Company and its subsidiaries prepare business plans based on the “Budget Management 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 every organizational
unit’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 “Authority Rules,”working to ensure operating efficiency.
5) Controls to Ensure the appropriateness of Business Operation of the Group Consisting of the Company
and Its Subsidiaries
To ensure Group companies’ appropriateness of business operation, the Company supervises its
subsidiaries as required based on their respective circumstances in accordance with its “AffiliatedCompany Management Rules” and “Authority Rules.” Additionally, in the Group Executive Officer
meetings held monthly, the Company’s Directors and subsidiaries’ management teams promote
information- sharing and effective communication among Group companies and alignment of Groupmanagement policies, exchanging information on important matters affecting the Group as a whole.
6) Matters Concerning Staffing Requested by Audit and Supervisory Committee of the Company to Assist
with Its Duties
When the Audit and Supervisory Committee requests staff to assist performing its duties, the Company
assigns the needed staff to the Committee.
7) Matters Concerning Assurance that Staff Assigned to Audit and Supervisory Committee are Independent
from Directors and Effectively Supervised
The Company respects the Audit and Supervisory Committee’s request on assignment of staff to assist the
Audit and Supervisory Committee. Staff that have been ordered to perform auditing tasks by the Audit andSupervisory Committee will not obey to orders or directions from Company Directors (excluding Directors－ 16 －

who are Audit and Supervisory Committee members) against the orders from the Audit and Supervisory
Committee.
8) System for the Company and Its Subsidiaries’ Directors (excluding Company Directors Who Are Audit andSupervisory Committee Members) and Employees Can Report to Audit and Supervisory Committee
ChairmanCompany Directors (excluding Directors who are Audit and Supervisory Committee members) andemployees are required to immediately report to the Audit and Supervisory Committee Chairman if they
become aware of an illegal act or misconduct by a Director (other than a Director who is an Audit andSupervisory 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 within the Group. It has created anenvironment in which reports on facts, misconduct, and illegal acts that could cause material damage to theCompany or its subsidiaries can be reported either directly or indirectly to the Company’s Audit andSupervisory Committee Chairman, working to enhance compliance to prevent misconduct and illegal acts
throughout the entire Group.
9) Controls to Prevent Retaliation Against Whistleblowers
The Company prohibits retaliatory treatment for individuals who have reported to the Audit andSupervisory Committee Chairman and promotes universal awareness of this prohibition among its
directors (excluding Directors who are Audit and Supervisory Committee members), employees, its
subsidiaries’ Directors and employees.
10) Matters Concerning Policies Pertaining to Prepayment or Reimbursement of Expenses Related to
Execution of Duties by Audit and Supervisory Committee Members of the Company or Handling of Other
Expenses or Liabilities 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 System to Ensure Effectiveness of Audit and Supervisory Committee’s Audits
Directors of the Company (excluding Directors who are Audit and Supervisory Committee members)
endeavor to make the audit system function efficiently by promoting deeper understanding about the audit
system and creating an audit-friendly environment within the Company. Furthermore, the Representative
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 toensure that the Audit and Supervisory Committee’s audits are conducted effectively.
12) System 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 Policies for Building an Internal Controls System, and implements and operates the internal control
over financial reporting accordingly. It also continually evaluates whether its internal controls arefunctioning properly and modifies them as needed.
13) System to Eradicate Antisocial Forces
The Company’s rules and regulations contain 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
Policies approved by Board of Directors. Such rules and regulations mandate that the Company sever all
relations with anti-social forces and respond organizationally to any illicit demands by 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 attorneys
and other concerned external organizations, and incorporates an anti-social forces clause into its contracts
with new suppliers and customers.

－ 17 －

(2) Overview of Implementation Status of Controls to Ensure Operational Soundness
1) Execution of Directors’ Duties
In the fiscal year ended December 31, 2019, the Board of Directors met 19 times and made management
decisions. The Board of Directors instituted Board of Directors Regulations and other internal regulations
to ensure that Directors act in accordance with laws, government regulations and the Company’s Articles
of Incorporation.
2) Execution of Duties by Directors Who Are Audit and Supervisory Committee Members
In addition to conducting audits pursuant to audit plans formulated at Audit and Supervisory Committee
meetings, the Directors who are Audit and Supervisory Committee members oversee Directors’ executionof their duties through such means as attending important meetings, including Board of Directors meetings
and regularly exchanging information with the independent external auditor and Internal Audit Office.
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 enhance awareness among the
Directors and employees of the Company and its subsidiaries by creating the “Group Compliance
Guidelines” and the “Group Compliance Rules,” establishing the Group Compliance Committee, andgetting the department in charge of compliance in the Company to create manuals and guidelines, and plan
administrate and conduct trainings.
(3) Policy for Determination of Dividends from Retained Earnings
As its dividend policy, the Company aims to pay dividends equivalent to 20% of net income attributable toowners of the 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 in pursuit of further growth in line with its Group’s corporate vision over the medium to long term.
For the fiscal year ended December 31, 2019, the Company’s Board of Directors passed a resolution
authorizing a dividend of 17.00 yen per share on February 12, 2020.
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 places.

－ 18 －

Consolidated balance sheet(As of December 31, 2019)
Account
AssetsAmountCurrent assets
Cash and deposits
Notes and accounts receivable-trade
Operational investment securities
Inventories
Other
Allowance for doubtful accounts

55,281
20,398
13,681
19,524
27
1,678
(28)

Noncurrent assets
Property, plant and equipment
Buildings and structures
Other

5,850
272
156
116

Intangible assets
Other

1,614
1,614

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

3,963
625
2,038
875
471
(47)

Account
Liabilities
Current liabilities
Accounts payable-trade
Current portion of long-term loans
payableIncome taxes payable
Provision for bonuses
Other(Yen in millions)
AmountNoncurrent liabilities
Long-term loans payable
Deferred tax liabilities
Asset retirement obligations
Other
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury shares
Accumulated other comprehensive income
Valuation difference on available-forsale securities

Foreign currency translation
adjustment
Subscription rights to shares
Non-controlling interests
Total net assets
Total assets
61,132
Total liabilities and net assets(Note) The amounts presented above are rounded down to the nearest whole million yen.

－ 19 －

19,14013,154
2,307
408
547
2,722
9,390
6,431
2,834
115
9
28,531
18,375
8,212
3,924
6,936
(698)
8,819
8,593
225
0
5,405
32,601
61,132

Consolidated statement of income(From January 1, 2019 to December 31, 2019)(Yen in millions)
Account

AmountRevenue
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Investment gain on equity method
Gain on investments in partnership
Other
Non-operating expenses
Interest expenses
Guarantee commission
Commission fee
Other
Ordinary income
Extraordinary income
Gain on change in equity
Gain on sales of investment securities
Other
Extraordinary loss
Loss on retirement of noncurrent assets
Impairment loss
Loss on valuation of investment securities
Other
Net income before taxes and other adjustments
Income taxes-current
Income taxes-deferred
Net income
Net loss attributable to non-controlling interests
Net income attributable to owners of parent(Note) The amounts presented above are rounded down to the nearest whole million yen.

－

23 －

89,953
72,23817,71515,081
2,633
73
164
27
24
22
0
19

116
497
3
59
297
421
26
1,122
158

265

66
2,833

617

804
2,645
1,280
1,365
563
1,928

Consolidated statement of changes in net assets(From January 1, 2019 to December 31, 2019)(Yen in millions)Shareholders’ equity

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

Capital stock

Capital surplus

Retained earnings

Treasury shares

8,212

3,915

5,442

(698)

Total shareholders’equity16,872

(435)

(435)

1,928

1,928

9

9

―

9

1,493

―

1,503

8,212

3,924

6,936

(698)

18,375

Accumulated other comprehensive income
Total
Valuation
Subscription Non-controlling
Foreign currency accumulated
Total net assets
difference onrights to sharesinterests
translation
otheravailable-for-saleadjustment
comprehensive
securities
income
6,214
390
6,604
0
3,656
27,133

(435)
1,928
9
2,379

(164)

2,215

(0)

1,749

3,964

2,379

(164)

2,215

(0)

1,749

5,467

8,593

225

8,819

0

5,405

32,601(Note) The amounts presented above are rounded down to the nearest whole million yen.

－

24 －

Notes to Consolidated Financial Statements
1. Significant matters for preparing consolidated financial statements:(1) Scope of consolidation
1) Status of consolidated subsidiaries• Number of consolidated subsidiaries: 24 consolidated subsidiaries• Names of consolidated subsidiaries
OPT, Inc.
SoldOut, Inc.
Crossfinity, Inc.
Heartlass, Inc.
relaido, Inc.
ConnectOm, Inc.
Platform ID, Inc.
Demand Side Science, Inc.
SO Technologies, Inc.
Growth Gear Co., Ltd.
Internet-Utilization association
MEDIA ENGINE INC.
OPT Ventures, Inc.
OPT Ventures No. 1 Limited Partnership for Investment
OPT Ventures No. 2 Limited Partnership for Investment
SIGNATE Inc.
OPT Incubate Inc.
IMJ FENOX PTE. LTD. No.2
OPT China Limited
OPT Shenzhen (China)
OPT China, Inc.
OPT America,Inc.
OPT SEA Pte., Ltd.
Digital Shift Academy, Inc.
OPT China, Inc. is included in the scope of consolidation in the fiscal year ended December 31, 2019because it was newly established through a company split.
MEDIA ENGINE INC. was included in the scope of consolidation in the fiscal year ended December 31,
2019 following the acquisition of its shares on a deemed acquisition date of November 30, 2019.
Kasoku co., Inc. has been included in the scope of consolidation because it was newly established in thefiscal year ended December 31, 2019, but because it was liquidated, we have removed it from the scope of
consolidation.
We have removed Lead Commerce Pte.,Ltd., eMFORCE Inc., and OPTOK Co.,Ltd. from the scope of
consolidation because we sold our holdings in the companies. Furthermore, due to the sale of our holdingsin eMFORCE Inc., we have removed its consolidated subsidiaries Marketinginsu Inc. and Plugworldwide
Inc. from the scope of consolidation.
Consumer first, Inc. and brainy, Inc. (merged to OPT Inc.) and SearchLIFE Co., Ltd. (merged to SO
Technologies, Inc.) were removed from the scope of consolidation.
Grasia Pte.,Ltd. was removed from the scope of consolidation due to its liquidation.
As of April 1, 2019, Digital Shift Academy was renamed from Multimedia School WAVE. As of July 1,
2019, SO Technologies, Inc. was also renamed from TechLoCo, Inc.

－

25 －

2) Status of major non-consolidated subsidiaries
Not applicable.
Crossfinity Taiwan, Co., Ltd., which was a non-consolidated subsidiary in the previous fiscal year, was
excluded due to its liquidation.
(2) Application of equity method accounting
1) Status of equity-method affiliates• Number of equity-method affiliates: Two affiliates• Names of equity-method affiliates
GENERATE INC.
Jimoty, Inc.
Chai Communication Co.,LTD. was excluded from the scope of equity method accounting as the Company
has sold its holdings.
2) Status of major non-consolidated subsidiaries and affiliates not subject to 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• The reason for exclusion from the scope of equity method
The non-consolidated subsidiaries and affiliates which were excluded from the scope of equity method,
due to the amount of the Company’s pro rata share of net income/loss and retained earnings, have minor
impact on the consolidated financial statements and immaterial as a whole. Also, Crossfinity Taiwan, Co.,
Ltd., which was a non-consolidated subsidiary not subject to equity method, was excluded due to its
liquidation.
(3) Special notes on procedures for application of equity method accounting
Since the financial closing date of GENERATE INC., an equity method affiliate, is March 31, we used thefinancial statements based on the provisional account closing on the consolidated closing date. Other equity
method affiliates have the same fiscal year ending at the consolidated closing date.
(4) Fiscal years of consolidated subsidiaries
The closing dates of OPT SEA Pte., Ltd. and MEDIA ENGINE INC. is November 30. We used the financial
statements at their respective closing dates. However, significant transactions between consolidated
companies before the consolidated closing date are adjusted as required for consolidation.
Other consolidated subsidiaries have the same fiscal year ending at the consolidated closing date.
(5) Matters on accounting policies
1) Valuation standards and valuation method for significant assets
A. Securities
Shares of subsidiaries and affiliates
They are valued at cost by the moving-average method.
Available-for-sale securities (including operational investment securities)• Those with market value:
Subject to the market value method based on the market price or the like at the end of the period. (Therelated valuation differences are directly debited or credited to the net assets and the cost of securities soldis computed by the moving average method.)• Those without market value:
Subject to the moving average cost method.
• Investment in limited partnership for investment
Subject to the method where the amount equal to the Company’s interests is added to, or subtracted from,the partnership’s gains or losses based on the most recent financial statements available.
B. Inventories• Merchandise and Work in process:
The FIFO cost method is mainly adopted. (The balance sheet value is computed subject to write-down due－

26 －to decreased profitability.)• Supplies:
The identified cost method is mainly adopted. (The balance sheet value is computed subject to write-down
due to 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, the buildings (excluding equipment attached to buildings) acquired on or after April 1, 1998 andthe equipment attached to buildings and structures acquired on or after April 1, 2016 are subject to thestraight-line method.
The straight-line method is adopted by overseas consolidated subsidiaries. Primary useful life is asindicated below.
Buildings and structures:
5 to 18 years.
Other:
2 to 15 years.
B. Intangible assets (excluding leased assets)
Subject to the straight-line method.
The software for internal use is subject to the straight-line method based on the period available forinternal 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 accounts receivable, uncollectible amounts are estimated and recognized, forordinary receivables, by the actual bad debt ratio based on losses in the past, or for doubtful receivables
and other certain receivables, by taking into consideration the collectability of individual receivableaccounts.
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) Accounting method pertaining to retirement benefits
To calculate liabilities on retirement benefits and retirement benefit expenses, some consolidated
subsidiaries have adopted the simplified method, where the necessary amount to pay for voluntary
retirement at the end of the period in connection with retirement benefits is regarded as retirement benefit
obligations.
5) Standards for translating significant assets or liabilities in foreign currency into Japanese currency
The 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 and non-controlling interests under net assets.
6) 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.
7) Other significant matters for 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 fiscal year.
－27 －B. Application of consolidated tax payment system
The consolidated tax payment system is adopted by the Company and some of its consolidated
subsidiaries.
2.

Changes in presentation method(Application of “Partial Amendments to Accounting Standard for Tax Effect Accounting” and relevant
Guidance)“Partial amendments to Accounting Standards for Tax Effect Accounting” (ASBJ statement No. 28, February
16, 2018) and relevant Guidance was applied from the beginning of the fiscal year. Deferred tax assets areclassified in investments and other assets and deferred tax liabilities are classified in noncurrent liabilities.
(Consolidated balance sheet)
Lease assets, which was presented as a separate line item under noncurrent assets for the previous fiscal year,
is included in the other line under noncurrent assets for the fiscal year, because its monetary materiality has
decreased.
(Consolidated statement of income)Interest income and dividends income, which were presented as separate line items under non-operating
income for the previous fiscal year, are included in the other line under non-operating income for the fiscal
year, because their monetary materiality has decreased.
Guarantee commission, which was included in the other line under non-operating income in the previous fiscal
year, is presented as a separate line item from the fiscal year, because its monetary materiality has increased.
Gain on reversal of subscription rights to shares, which was presented as a separate line item under
extraordinary income for the previous fiscal year, is included in the other line under extraordinary income forthe fiscal year, because its monetary materiality has decreased.

3.

Notes on additional information(Disposal of Shares of a Material Subsidiary)
The Company transferred its all holdings in its consolidated subsidiary, eMFORCE Inc., effective July 31,
2019, and recognized JPY 260 million as extraordinary profit. Please refer to “8. Notes on businesscombination, etc.” for details of the sales of shares.

4. Notes on consolidated balance sheet(1) Breakdown of inventories presented as a single line item
(Yen in millions)

MerchandiseWork in process
Supplies

2600(2) Assets pledged as collateral and secured liabilities
Not applicable.
(3) Accumulated depreciation on property, plant and equipment(Yen in millions)433
Accumulated depreciation
Above accumulated depreciation includes 0 million yen of impairment loss for property, plant andequipment.
5. Notes on consolidated statement of changes in net assets(1) Matters concerning classes and numbers of issued shares and treasury sharesClass of stock

As of Jan. 1, 2019

Additions

Subtractions

As of Dec. 31, 2019

Issued common shares
Common shares

23,817,700 shares――

23,817,700 shares

917,705 shares――

917,705 shares

Treasury shares
Common shares

－

28 －

(2) Matters concerning subscription rights to shares
Category

Consolidated
subsidiaries

Type

Class ofunderlying
stock

Number of shares underlying stock options

Balance as ofDec. 31, 2019
(Yen inmillions)

As ofJan. 1, 2019

Additions

Subtractions

As ofDec. 31, 2019

―

―

―

―

0

―

―

―

―

0

Subscription
rights to shares Common
granted as stock shares
options
Total(3) Matters concerning dividend
1) Amount of dividend distribution
Authorization

Class of stock

Total dividend
distribution(Yen in millions)February 7, 2019
Board of Directors
Meeting

Common shares

435

Dividend per share
(Yen)

19.0

Record date

Declaration date

December 31,
2018

March 7, 20192) Dividends with a record date in the fiscal year ended December 31, 2019, and declaration date in thefollowing fiscal year
Scheduledauthorization

Class ofstock

Dividend funding
sourceFebruary 12, 2020
Board of Directors
Meeting

CommonsharesRetainedearnings

Total dividend
distribution(Yen in millions)

389

Dividend per share
(Yen)

17.0

Record date

Declaration
date

December31, 2019

March 6, 2020

6. Notes on financial instruments(1) Matters concerning financial instruments
1) Activities and policies related to financial instruments
The Group invest 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
Trade notes and accounts receivable are subject 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 with regulations regarding theGroup’s credit management. Trade receivables denominated in foreign currencies are subject to currency
risk. Investment securities are mainly stocks of companies with which the Company has business
relationships. They are subject to the risk of market price fluctuations.
The Group’s holdings of operational investment securities and investment securities other than the
aforementioned stockholdings mainly consist of stocks and equity interests in partnerships and other such
entities. The Group holds the securities for purely investment purposes or to advance its businesses. The
listed stocks among these securities are subject to the risk of market price fluctuations. The unlisted stocks
among these securities are subject to the two risks disclosed below because unlisted companies tend to be
more sensitive than listed companies to changes in the economic environment and other suchdevelopments as a result of having less stable financial/earnings foundations and being more constrained in－

29 －terms of management resources.
a. The Group has no assurance of earning any capital gains on its investments.
b. The Group may incur capital losses on its investments.
Trade notes and accounts payable are predominately payable within one year. Trade payables denominatedin foreign currencies are subject to currency risk.
Loans payable and long-term loans payable are mostly funding needed for working capital, among otherpurposes.
3) Financial instrument risk-management regime• Management of credit risk (risk associated with, e.g., counterparties’ contractual nonperformance)
For trade receivables, the Group conducts credit screenings when it starts doing business with a newcustomer, continually monitors receivables’ collection status, reviews credit limits and revises them whennecessary in accord with its credit management regulations.
• Management of market risks (e.g., foreign currency risk, interest rate fluctuation risk)
For operational investment securities and other investment securities, the Group periodically checks
market values and assesses the issuer’s (or partner company’s) financial condition and continually reviews
and, as necessary, adjusts its holdings in light of market conditions and/or its relationship with the partnercompany.
• Management of liquidity risk in connection with borrowings (risk of inability to repay borrowings by
repayment 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 financial instruments’ fair value
Financial instruments’ fair values include valuations based on market prices and, in the case of financial
instruments without market prices, valuations measured by reasonable means. The latter valuation
measurements incorporate variables and are therefore subject to change in response to, e.g., changes inunderlying assumptions.
(2) Matters concerning financial instruments’ fair value
Financial instruments’ carrying amounts on the consolidated balance sheet and fair values as of December 31,
2019 (the consolidated balance sheet date for the fiscal year), and the differences between the two arepresented in the table below. The table omits financial instruments for which fair-value measurement isdeemed unfeasible (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) Notes and accounts payable-trade(2) Long-term loans payable (including
current portion thereof)
Total liabilities

Carrying amount on
consolidated balance sheet
20,398
13,681

Fair value

Difference
20,398
13,681――

15,681

15,681―

49,761
13,15449,761
13,154

―
―

8,739

8,703

(35)

21,893

21,857(35)(Note 1) Matters concerning financial instrument fair-value measurement methods 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 carrying amounts. Their fair value isaccordingly measured at their respective carrying amounts.
(3) Operational investment securities and investment securities
As a general rule, these securities’ fair value is based on exchange-traded prices of equities.

－

30 －

Liabilities(1) Notes and accounts payable-trade
Because these liabilities have short-term maturities, their fair value approximates their carrying amounts. Their fair value isaccordingly measured at their carrying amounts.
(2) Long-term loans payable (including current portion thereof)
The fair value of long-term loans payable is measured by discounting total principal and interest payable using a discountrate that incorporates a benchmark rate (e.g., government bond yield) plus a credit spread.
(Note 2) Financial instruments for which fair-value measurement is deemed infeasible(Yen in millions)
Type
Carrying amount on consolidated balance sheet
Operational investment securities and investment securities*1
Unlisted equities
3,895
Equity interests in investment limited partnerships and similar
partnerships
1,986
Affiliates’ shares*2
Unlisted equities
625
Total
6,508
(*1) Fair-value measurement is deemed infeasible for the above financial instruments, which do not have market prices.
They are therefore omitted from “(3) Operational investment securities and investment securities, etc.”(*2) Fair-value measurement is deemed infeasible for the above financial instruments, which do not have market prices.
They are therefore not included above table.
(Note 3) Post-reporting-date maturity schedule for receivables and securities with maturity dates

(1)
(2)

Type
Cash and deposits
Notes and accounts receivable–
trade
Total

―

―

(Yen in millions)Over 10 years―

13,681―――

34,080

―

―

―

―
―

(Yen in millions)Over 10 years――

Within 1 year
20,3981-5 years

5-10 years(Note 4) Repayment schedule for loans payable and other interest-bearing debt
TypeLong-term loans payable
Total

7.

Within 1 year
2,307
2,307

1-5 years
6,431
6,431

5-10 years

Notes on per-share information
Net assets per share
Net income per share8.

¥1,187.56¥84.23

Notes on business combination
Business divestitures(Sales of shares of subsidiaries)
In the Board of Directors meeting held on June 20, 2019, the Company decided to transfer all shares held of its
consolidated subsidiary, eMFORCE Inc. to Digital Advertising Consortium Inc. On July 1, 2019, a Share
Purchase and Sale Agreement was closed between the Company and Digital Advertising Consortium Inc.

(1) Overview of the business divestiture
1) Name of the buyer
Digital Advertising Consortium Inc.
2) Name, and content of business of the divested subsidiary
Name of the subsidiary: eMFORCE Inc.,(Subsidiaries of eMFORCE Inc. are listed below.)
Plugworldwide Inc.,
Marketinginsu Inc.
Content of business:
Internet advertisement business
3) Reason for the business divestiture－

31 －eMFORCE Inc. is a Korean internet-based advertisement agency with strengths in programmatic
advertising based on search advertisement. The Group acquired shares of eMFORCE Inc. in 2005, amid
the swift expansion of internet advertising domestically in Japan, with the objective of expanding ourGroup through the production of cross-border business synergy by deploying our Group’s tools andmarketing know-how overseas, and it was accounted for as our consolidated subsidiary
As approximately 14 years have passed since the share acquisition, eMFORCE Inc. has steadily developed
its business in Korea. However, synergies with our Group’s Japan based Marketing Business had
continued to fall short of initial expectations. As a result of prudent examination of the direction andallocation of management resources of our Group’s Overseas Digital Marking Business, the Group has
judged that a revision of certain parts of our Overseas Digital Marketing Business and a focus on theMarketing Business in Japan, where the digital shift is accelerating, would contribute more to theenhancement of our Group’s corporate value.
4) Date of the business divestitures
July 31, 20195) Other matters including legal form of business divestiture
Share transfer with the consideration in only assets such as cash(2) Overview of accounting treatments applied
1) Amount of gain or loss on the transfer(Yen in millions)
260

Gain on sales of investment securities

2) Appropriate carrying amount and major breakdown of the assets and liabilities of the business transferred(Yen in millions)
1,726
253
1,980
1,216
209
1,426

Current assets
Noncurrent assets
Total assets
Current liabilities
Noncurrent liabilities
Total liabilities

3) Accounting treatments
The difference between carrying amount and sales price of the transferred shares is recorded as gain on
sales of investment securities.
(3) Reporting segment of the divested business
Synergy Investment Business(4) Approximate amounts of profit or loss of the divested business included in consolidated statement of income
for the fiscal year
(Yen in millions)
4,757
89

Revenue
Operating loss

9. Notes on significant subsequent events(Repurchase of own shares)
The Board of Directors of the company, at its meeting held on February 12, 2020, resolved that the company
will repurchase its own shares pursuant to Article 156 of the Companies Act of Japan, which applies pursuant to
Article 165, Paragraph 3, of that law.
(1) Reason for share repurchase
To improve returns to shareholders by improving capital efficiency and implementing flexible capital policies.
(2) Details of Authorized Share Repurchase Plan
1.
Class of shares: Common stock2.
Total number of shares that may be repurchased: Up to 750,000 shares (3.28% of total number of sharesissued, excluding treasury stock)3.
Total repurchase amount: Up to JPY1 billion
－

32 －

4.
5.

Period of repurchase: From February 13, 2020 through June 23, 2020
Method of repurchase: Market purchases based on the discretionary dealing contract through the Tokyo
Stock Exchange

Reference)
Total number of shares issued and outstanding shares held in treasury as of December 31, 2019:• Total number of shares issued (excluding shares held in treasury): 22,899,995 shares• Shares held in treasury: 917,705 shares

－

33 －

Balance sheet(As of December 31, 2019)
Account
AssetsAmountCurrent assets
Cash and deposits
Accounts receivable-trade
Operational investment securities
Advances paid
Accounts receivable - other
Other
Allowance for doubtful accounts

32,025
16,71716
14,719
94
20
691
(235)

Noncurrent assets
Property, plant and equipment
Buildings and structures
Tools, furniture and fixtures
Intangible assets
Trademark right
Software
Software in progress
Other
Investments and other assets
Investment securities
Shares of subsidiaries and associates
Investments in other securities ofsubsidiaries and associates
Long-term loans receivable
Long-term prepaid expenses
Lease and guarantee deposits
Other
Allowance for doubtful accounts

8,401
130
78
51
81
7
52
19
2
8,190
232
6,167
1,169
35
76
541
3
(35)

Account
Liabilities
Current liabilities
Current portion of long-term loans
payableAccounts payable
Deposits received from subsidiaries
and associates
Accrued expenses
Income taxes payable
Deposits received
Provision for bonuses
Other
Noncurrent liabilities
Long-term loans payable
Deferred tax liabilities
Asset retirement obligations
Other
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Legal capital surplus
Retained earnings
Retained earnings brought forward
Treasury shares
Valuation and translation adjustments
Valuation difference on available-forsale securities

Total net assets
Total assets
40,427
Total liabilities and net assets(Note) The amount s presented above are rounded down to the nearest whole million yen.

－

34 －

(Yen in millions)
Amount
7,472
2,300
559
4,055
76
320
27
45
87
9,465
6,400
2,988
77
0
16,93815,027
8,212
3,423
3,423
4,089
4,089
(698)
8,460
8,460
23,48840,427

Statement of income(From January 1, 2019 to December 31, 2019)(Yen in millions)
Account

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

－

35 －

8,441
3,095
5,346
490
4,855
36
6
23
208
235
17

565
217
31
1,482
10
1,038
65

43

484
4,414

783

1,524
3,673
1,103
2,570

Statement of changes in net assets(From January 1, 2019 to December 31, 2019)(Yen in millions)Shareholders’ equity
Capital surplus

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

Capital stock

Legal capitalsurplus

Total capitalsurplus

8,212

3,423

3,423

Retained earnings
Other retained
earnings
Total retained
earnings
Retained earnings
brought forward
1,954
1,954
(435)
2,570

(435)
2,570

―

―

―

2,135

2,135

8,212

3,423

3,423

4,089

4,089

Valuation and translation
adjustments
Valuation
Total valuation and Total net assets
Total shareholders’ difference on
Treasury sharestranslation
equityavailable-for-saleadjustments
securities(698)
12,8926,214
6,214
19,107
Shareholders’ equity

Balance at beginning of year
Changes of items during period
Dividends from surplus(435)
Net income (loss)
2,570
Net changes of items other than
2,245
shareholders’ equity
Total changes of items during
―
2,135
2,245
the period
Balance at end of year(698)
15,027
8,460(Note) The amounts presented above are rounded down to the nearest whole million yen.

－

36 －

(435)
2,570
2,245

2,245

2,245

4,380

8,460

23,488

Notes to Non-Consolidated Financial Statements
1.

Notes on significant accounting policies(1) Asset valuation standards and methods
1) Securities valuation standards and methods
A. Held-to-maturity bonds
The amortized cost method (straight-line method) is adopted.
B. Shares of subsidiaries and affiliates
The moving-average cost method is used.
C. Available-for-sale securities (including operational investment securities)• Those with market value:
Subject to the market value method based on the market price or the like at the end of the period. (Therelated valuation differences are directly debited or credited to the net assets and the cost of securities
sold is computed by the moving average method.)• Those without market value:
Subject to the moving average cost method.
• Investment in limited partnership for investment:
Subject to the method where the amount equal to the Company’s interests is added to, or subtracted
from, the partnership’s gains or losses based on the most recent financial statements available.
2) Inventory
D. Merchandise and Work in process:
The FIFO cost method is mainly adopted. (The balance sheet value is computed subject to write-down
due to decreased profitability.)
E. Supplies:
The identified cost method is mainly adopted. (The balance sheet value is computed subject to writedown due to decreased profitability.)(2) Noncurrent asset depreciation and amortization methods
1) Property, plant and equipment (excluding lease assets)
Mainly subject to the declining-balance method.
However, the buildings (excluding equipment attached to buildings) acquired on or after April 1, 1998 andthe equipment attached to buildings and structures acquired on or after April 1, 2016 are subject to thestraight-line method.
Primary useful life is as indicated below.
Buildings and structures:
5 to 18 years
Tools, furniture and fixtures:
4 to 6 years
2) Intangible assets (excluding leased assets)
Subject to the straight-line method.
The software for internal use is subject to the straight-line method based on the period available for internaluse (mainly, five years).
3) 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 in use, and the residual value is theguaranteed residual value if the relevant lease agreement stipulates residual value guarantee, or otherwise,
residual value is zero.

－

37 －

(3) Standards for recognition of significant allowances
1) Allowance for doubtful accounts
To prepare for losses from accounts receivable, uncollectible amounts are estimated and recognized, forordinary receivables, by the actual bad debt ratio based on losses in the past, or for doubtful receivables andother certain 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 for 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 consolidated tax payment system
The consolidated tax payment system is adopted.
(5) Changes to significant matters that form the basis of financial statements’ preparation
Not applicable.
2.

Notes on changes in accounting policies(Application of “Partial Amendments to Accounting Standard for Tax Effect Accounting” and relevant
Guidance)“Partial amendments to Accounting Standards for Tax Effect Accounting” (ASBJ statement No. 28, February
16, 2018) and relevant Guidance were applied from the beginning of the fiscal year under review. Deferred tax
assets are classified in investments and other assets and deferred tax liabilities are classified in noncurrent
liabilities.

3.

Notes on additional information(Disposal of Shares of a Material Subsidiary)
The Company transferred all shares held in its consolidated subsidiary, eMFORCE Inc., effective July 31,
2019, and recognized 565 million yen as extraordinary income. Please refer to “8. Notes on businesscombination, etc.” for details of the sale of the shares.

4. Notes on balance sheet(1) Assets pledged as collateral and secured liabilities
Not applicable.
(2) Monetary receivables from and monetary payables to affiliates (excluding those presented as separate line
items)(Yen in millions)Short-term monetary receivables
367
Long-term monetary receivables
0
Short-term monetary payables
315(3) Accumulated depreciation on property, plant and equipment(Yen in millions)
Accumulated depreciation on property, plant and equipment347
0 million yen of accumulated impairment loss on property, plant and equipment were included above
accumulated depreciation.

－

38 －

5.

Notes on statement of income
Transactions with affiliates accounted for the following transaction volumes included in line items is presented
on the statement of income.
(Yen in millions)Operating transactions
4,279
Non-operating transactions
36

6.

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

As of Jan. 1, 2019

Additions

Subtractions

As of Dec. 31, 2019

Treasury shares
Common shares

7.

― shares917,705 shares― shares

Notes on 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
Long-term accounts receivable - other
Loss on valuation of investment securities
Adjustment of investments’ carrying amount
Loss on liquidation of subsidiaries
Enterprise 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

72
14
20
168
1,727
92
95
56
33
2,279
(1,533)746(3,734)(3,734)(2,988)－39 －

917,705 shares

8.

Notes on transaction with related party(1) Consolidated subsidiaryType
Consolidated
subsidiary
Consolidated
subsidiary
Consolidated
subsidiary
Consolidated
subsidiaryType

Consolidated
subsidiary

Consolidated
subsidiary

Consolidated
subsidiary

Consolidated
subsidiary

Name ofcompany

Capital stock orequity stake(yen in millions)

Address

OPT, Inc.

Chiyoda-ku, Tokyo

100

Crossfinity, Inc.

Chiyoda-ku, Tokyo

30

ConnectOM, Inc.

Chiyoda-ku, Tokyo

75

OPT
America,Inc.

California, U.S.A

2,405

Name of company

Relationship withrelated party

OPT, Inc.

Crossfinity, Inc.

ConnectOM, Inc.

OPT America,Inc.

Director interlock
Management
involvement
CMS transactions

Director interlock
Management
involvement
CMS transactions
Management
involvement
CMS transactions

Nature of transaction

Business
MarketingBusiness
MarketingBusiness
MarketingBusiness
Investment
Business

Transaction
amount(Yen inmillions)

Ownership percentage(reciprocal ownership
percentage)
100.00%(―)
100.00%(―)
100.00%(―)
100.00%(―)

Account

Endingbalance(Yen inmillions)

Management
consulting fee

1,810

Accounts receivable

0

Borrowing of funds
via CMS (Note 2)―

Deposits received
from subsidiaries
and associates

2,233

Payment of interest(Note 3)0――

Borrowing of funds
via CMS (Note 2)―

Deposits received
from subsidiaries
and associates

1,097

Payment of interest(Note 3)0――

Borrowing of funds
via CMS (Note 2)―

Deposits paid to
subsidiaries andassociates

235

Receipt of interest(Note 3)0――

Lending of funds

1,079

Loans receivablefrom subsidiaries
and associates―

Receipt of interest(Note 3)35

Other current assets―

Loans of funds(Notes) 1. Transaction amounts do not include consumption tax.
2. For borrowing transactions through the CMS (cash management system), only fiscal year-end balances are presented
because balances frequently change.
3. For interest payment amounts, interest rates are rationally determined based on market interest rates and other relevant
factors.
4. An allowance for doubtful accounts of JPY 235 million is recorded against the deposits paid to subsidiaries and associates.

(2) Corporate officers and individual shareholders
Not applicable.
9.

Notes on per-share information
Net assets per share
Net income per share¥1,025.69¥112.24

10. Notes on business combination
As the content is identical, please reference “8. Notes on business combination” in the Notes to Consolidated
Financial Statements.
11. Notes on significant subsequent events
Not applicable.

－

40 －

AUDIT COMMITTEE’S REPORT
AUDIT REPORT
We, the Audit and Supervisory Committee of OPT Holding, Inc.. (“the Company”), have audited theperformance of duties by Directors and Executive Officers during the 26th business year from January 1, 2019 to
December 31, 2019. We report the method and results as follows.
1. Method and details of audit

We, the Audit and Supervisory Committee, have received reports from the Executive Officers and employees
on a regularly basis on the details of the board resolutions with respect to items prescribed in Article 39913(1)(i)(b)-(c) of the Companies Act, and the status of the establishment and operation of the systemestablished based on such board resolutions (internal control system), sought explanations, whenever thenecessity 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,statement of income, statement of changes in equity, notes to financial statements), supporting schedules,
and the consolidated financial statements (the consolidated balance sheets, the consolidated statement of
profit or loss, the consolidated statements of changes in net assets and the 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 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.
February 20, 2020－

41 －

Audit Committee of OPT Holding, Inc.

Audit Committee Member

Fumiyuki Shinomiya(Seal) (Full- time)

Audit Committee Member

Nobuaki Ishizaki (Seal)

Audit Committee Member

Toshio Yamaue (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. Mr. Fumiyuki Shinomiya, Mr. Nobuaki Ishizaki and Mr. Toshio Yamaue are External Directors as provided
for in Article 2, Item 15 and Article 331, Paragraph 6 of the Companies Act.

－

42 －

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

Partial Amendments to the Articles of Incorporation

1. Reasons for the proposal
To clarify the policy for the business structure reforms being implemented by the Company, effective July 1, 2020,
the Company will change its trade name (Chapter I of the Current Articles of Incorporation) from “Kabushiki
Kaisha OPT Holding (English name: OPT Holding, Inc.)” to “Kabushiki Kaisha DIGITAL HOLDINGS (English
name: DIGITAL HOLDINGS, Inc.).”2.

Details of the amendments(Underlines denote amendments)
Current Articles of Incorporation

Proposed Amendments

Chapter I
General Provisions
Articles 1 (Trade Name)
The name of the Company shall be “Kabushiki Kaisha
OPT Holding” and in English it shall be “OPT Holding,Inc.”
Articles 2 – 42
(Omitted)

Article 1

Supplementary Provisions(Omitted)

Chapter I
General Provisions
Articles 1 (Trade Name)
The name of the Company shall be “Kabushiki Kaisha
DIGITAL HOLDINGS” and in English it shall be“DIGITAL HOLDINGS, Inc.”
Articles 2 – 42
(Unchanged)

Article 1－

43 －Supplementary Provisions(Unchanged)

Proposal No. 2:

Election of six (6) Directors (Excluding Directors Who Are Audit & Supervisory
Committee Members)

The terms of office of all of the current five (5) Directors will expire at the conclusion of this Annual General
Meeting of Shareholders.
In that regard, the Company will newly increase the number of External Director by two (2) to further enhance themanagement system, and it proposes the election of six (6) Directors.
The Audit and Supervisory committee has given consent to all candidates for Director in this proposal.
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 OPT Holding, Inc.),
assumed position as President of the Company
Noboru Hachimine
4,775,200(June 22, 1967)
Mar. 2009
President and CEO of the Company (current position)
Jun. 2016
Outside Director, UT Group Co., Ltd. (current position)
Mar. 2017
Director, SoldOut, 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 sustained Group-wide growth and to grow corporate value over the medium to long term.
Apr. 1991
Joined Mori Building Co., Ltd.
Oct. 1996
Joined the OPT Holdings Inc.
Mar. 1999
Director of the Company
Atsushi Nouchi
Feb. 2015
CEO at OPT Ventures, Inc. (current position)(December 21,
1,275,800
Mar.
2015
Representative Director and CEO at OPT Incubate, Inc.
1967)
(current position)
Mar. 2017
Vice President and COO of OPT Holding, Inc. (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 sustained Group-wide
growth and to grow corporate value over the medium to long term.
Apr. 1974
Joined The Industrial Bank of Japan (currently Mizuho Bank,
Ltd.)
Jun. 1998
Manager of Business Promotion Arrangement Office, Mizuho
Bank, Ltd.
Apr. 2000
Manager of Syndication, Mizuho Bank, Ltd.
Apr. 2002
Manager of Syndication, Mizuho Corporate Bank (currently
Mizuho Bank, Ltd.)
Apr. 2004
Managing Executive Officer, Supervisor of SyndicatedFinance Business Unit, Supervisor of Syndicated Finance &Loan Trading Compliance, and Group Supervisor, Mizuho
Bank, Ltd.
Shusaku Minoda
10,000
Apr. 2006
Managing Executive Officer, Supervisor of Global(July 20, 1951)
Syndication Unit and Global Products Unit, Mizuho Bank,
Ltd.
Jul. 2007
Managing Director and Co-Chief Executive Officer, Kohlberg
Kravis Roberts & Co. (KKR) Japan
Sep. 2007
Director, KKR Capital Markets (KCM)
Jan. 2008
President, KKR Japan
Apr. 2009
Director, Toys”R”US JapanMay 2013
Chairman, KKR Japan
Sep. 2014
Company Advisor, OPT Holding Inc.
Mar. 2015
Director of the Company (current position)[Reasons for nomination as candidate for Director]
Mr. Shusaku Minoda has vast experience in the financial sector both in Japan and overseas. He also possesses extensive
experience and broad insight as a high-ranking corporate executive. He has been nominated to offer opinions andadvice to the Company’s management from various perspectives.

－

44 －

Candidate
No.

Name
(Date of birth)

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

Number of theCompany’s
SharesOwned

Apr. 1988
Apr. 1997
Apr. 2001

4

5

6

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
Jobs Co., Ltd.)Tomoyuki
Apr. 2007
Director and Corporate Executive Officer (responsible for HR,
Mizutani
10,000administration, corporate communication) of Recruit Holdings(August 16, 1964)
Co., Ltd.
Apr. 2009Managing Executive Officer, Recruit Agent Co., Ltd.
(currently Recruit Career 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 of the Company (current position)[Reasons for nomination as candidate for Director]
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 to offer opinions and advice to ensure appropriate, sound management decision-making
from an independent, 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.
*
Koji Yanagisawa Feb. 2006
Full-time Statutory Auditor, ZOZO, Inc.
0
(May 19, 1971)
Jun. 2008
Director and General Manager of Strategic Planning andBusiness Administration Division, ZOZO, Inc.
Apr. 2009
Director and CFO, ZOZO, Inc.
Apr. 2017
Director, Executive Vice President & CFO, ZOZO, Inc.
[Reasons for nomination as candidate for Director]
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
newly nominated for External Director because he is considered to be qualified to offer opinions and advice to ensure
appropriateness and soundness in management decision-making from independent and objective standpoint.
Aug. 2005
Joined Macromill, Inc.
Jan. 2008
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.
Yasuhiro Ogino
Dec. 2009
Joined mixi, Inc.
0
(September 29,
Nov. 2011
Executive General Manager of the Administrative
1973)
Headquarter, mixi, Inc.
Feb. 2012
Executive Officer, mixi, Inc.
Jun. 2012
Director, mixi, Inc.

[Reasons for nomination as candidate for Director]
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 newly nominated forExternal Director because he is considered to be qualified to offer opinions and advice to ensure appropriateness andsoundness in management decision-making from 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, Yasuhiro Ogino and Koji Yanagisawa 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－

45 －three years as of the conclusion of the 26th Annual General Meeting of Shareholders.
5. If Messrs. Shusaku Minoda and Tomoyuki Mizutani are reappointed, the Company plans to renew existing agreementswith both of them pursuant to Article 427 (1) of the Companies Act. The agreements limit their liability for damages under
Article 423 (1) of the Companies Act to the minimum liability stipulated in Article 425 (1) of the Companies Act.
Furthermore, if the election of Messrs. Yasuhiro Ogino and Koji Yanagisawa is approved, the Company plans to enter into
the same limited liability agreement with them.
6. Mr. Tomoyuki Mizutani meets the independent director requirements of the Tokyo Stock Exchange, Inc. If reappointed, hewill continue to serve as an independent director. Furthermore, Messrs. Yasuhiro Ogino and Koji Yanagisawa both meetthe same requirements, and if their elections are approved, the Company plans to submit notification of their designation as
independent directors (External Directors).
7. The number of the Company’s shares owned by Mr. Noboru Hachimine includes 4,770,200 shares owned by HIBC Co.,
Ltd., an asset management company wholly owned by Mr. Hachimine.
8. The number of the Company’s shares owned by Mr. Atsushi Nouchi includes 390,800 shares owned by Time & Space, anasset management company wholly owned by Mr. Nouchi.

－

46 －

Proposal No. 3:

Election of four (4) Directors Who Are Audit & Supervisory Committee Members

The terms of office of all of the current three (3) Directors who are Audit & Supervisory Committee Members will
expire at the conclusion of this Annual General Meeting of Shareholders. In that regard, the Company will newly
increase the number of Directors who are Audit & Supervisory Committee Members by two (1) to strengthen theaudit system, and it proposes the election of four (4) Directors who are Audit & Supervisory Committee Members.
The consent of the Audit and Supervisory committee has been obtained for this proposal.
The candidates for Directors who Are Audit & Supervisory Committee Members are as follows:
Candidate
No.

Name(Date of birth)

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

Number of theCompany’s
SharesOwned

Apr. 1971

1

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.
Fumiyuki
ShinomiyaOct. 2016
Director and full-time Auditor, Crossfinity Inc.
0
(September 27,
Mar. 2018
Audit & Supervisory Board Member, Crossfinity Inc.
1948)
Mar. 2018
Audit & Supervisory Board Member, OPT, Inc. (current
position)Mar. 2018
Audit & Supervisory Committee Member of the Company(current position)[Reasons for nomination as candidate for Directors who are Audit & Supervisory Committee Members]
Mr. Fumiyuki Shinomiya possesses abundant experience and insight in the financial field both in Japan and overseas.
He has been nominated to offer necessary opinions and advice in the deliberation of matters from the standpoint of theobjectivity and neutrality of management.
Apr. 1992
Mar. 1998
Oct. 2002
Jul. 2007
Oct. 2011

2

Joined THE OITA BANK, LTD.
Joined Takahashi Tax Accounting Office
Joined ChuoAoyama Audit Corporation
Joined Ernst & Young ShinNihon LLC
Yuki Okabe
Established Okabe Yuki Certified Public Accountant and FP
0(May 5, 1973)
OfficeMar. 2016
Full-time Audit & Supervisory Board Member, fonfun
corporation
Jul. 2018
Full-time Audit & Supervisory Board Member, AltPlus Inc.
(current position)[Reasons for nomination as candidate for Directors who are Audit & Supervisory Committee Members]
In addition to possessing significant insight in finance and accounting as a CPA, Ms. Yuki Okabe has experience as an
Audit & Supervisory Board Member at multiple listed companies. She has been newly nominated to offer necessary
opinions and advice in the deliberation of matters from an objective.
Apr. 1997

3

Registered as an attorney-at-law (member of the Daiichi
Tokyo Bar Association)
Mar. 2006
Outside Auditor of the Company
Toshio Yamaue
Apr. 2006
Established Yamaue Law Offices (current position)(February 14,
0Mar. 2016
Auditor, SoldOut, Inc.
1966)
Mar. 2016
External Director and Audit and Supervisory Committee
Member of the Company (current position)
Mar. 2017
Auditor, s1o interactive. inc. (currently Heartlass, Inc.)[Reasons for nomination as candidate for Directors who are Audit & Supervisory Committee Members]
Mr. Toshio Yamaue has abundant experience and expert knowledge as an attorney. He has been nominated to offer
necessary opinions and advice in the deliberation of matters.

－

47 －

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

4

Joined Price Waterhouse Certified Public Accountants Office
Registered as Certified Public Accountant*
Representative Partner, ChuoAoyama Audit Corporation
Masahiro
0
Representative Partner, PricewaterhouseCoopers Aarata
Yamamoto(currently PricewaterhouseCoopers Aarata LLC)
(August 15, 1958)
Jul. 2019
Established Yamamoto Masahiro Certified Public Accountant
Office (current position)[Reasons for nomination as candidate for Directors who are Audit & Supervisory Committee Members]
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 newly nominated as candidate for Audit & Supervisory Committee Member.

(Notes) 1. New candidates are indicated by an asterisk (*).
2. None of the candidates has any special interests in the Company or vice versa.
3. Messrs. Fumiyuki Shinomiya, Yuki Okabe, Toshio Yamaue, and Masahiro Yamamoto are External Director candidates.
4. Messrs. Fumiyuki Shinomiya and Toshio Yamaue are currently External Directors who are Audit and Supervisory
Committee Members of the Company; they will have served as External Directors for two years and four years respectively
as of the conclusion of the 26th Annual General Meeting of Shareholders.
5. Mr. Fumiyuki Shinomiya is an Audit & Supervisory Board Member of OPT, Inc. which is a s subsidiary of the Company.
6. Mr. Toshio Yamaue had been a non-executive officer (Audit & Supervisory Board Member) of the Company in the past.
7. The Company has entered into agreements with Messrs. Fumiyuki Shinomiya and Toshio Yamaue, respectively, to limit
the liability provided for in Article 423, paragraph (1) of the Companies Act to the minimum liability amount set forth inlaws and regulations. If their reelections are approved, the Company will continue these agreements. Furthermore, if theelection of Ms. Yuki Okabe and Mr. Masahiro Yamamoto is approved, the Company plans to enter into the same limited
liability agreement with them.
8. The Company has designated Messrs. Fumiyuki Shinomiya and Toshio Yamaue as independent directors based on theprovisions of the Tokyo Stock Exchange and has submitted notification of their designation to the exchange. If theirreelections are approved, the Company plans to continue to designate them as independent directors (External Directors).
Furthermore, Ms. Yuki Okabe and Mr. Masahiro Yamamoto also meet the requirements of independent directors based on
the provisions of the Tokyo Stock Exchange, and if their reelections are approved, the Company plans to submit
notification of their designation as independent directors (External Directors) respectively.

－

48 －

Proposal No. 4:

Determination of Amounts of Remuneration, etc. for Directors Who Are Audit andSupervisory Committee Members

The amount of remuneration for Directors who are Audit & Supervisory Committee Members of the Company wasset at up to JPY 30 million per year at the General Meeting of Shareholders held on March 25, 2016. However, toenhance the Company’s auditing system, with the increased number of Directors who are Audit & Supervisory
Committee members, we would like to revise this amount to up to JPY 50 million per year.
Currently, the Company has three (3) Directors who are Audit and Supervisory Committee Members, and there will
be four (4) Directors who are Audit and Supervisory Committee Members assuming approval is granted for thethird proposal herein calling for “Election of four (4) Directors Who Are Audit & Supervisory Committee
Members.

－

49 －