InetMarch 15, 2024
To whom it may concern,
Company name

I-NET Corp.

Representative:Representative Director, Executive President

Tomomichi Saeki(TSE Prime Code No. 9600)
Executive OfficerInquires

Masahiro Shiga

Head of Management Planning Department

Telephone

045 (682) 0806

Measures toward the achievement of management conscious of the cost of capital and stock price
I-NET Corp. (below, the "Company") has been considering future initiatives based on an analysis of our current
situation regarding measures toward the achievement of management conscious of the cost of capital and stock pricein response to a request by the Tokyo Stock Exchange.
We hereby announce that the Board of Directors has resolved the following at a meeting held today.
Details
１． Analysis of current situation(1) Return on capital / cost of capital[Return on equity (ROE) and cost of shareholders’ capital]
ROE and cost of shareholders’ capital

ROE
Cost of shareholdersʼ capital

Fiscal year ended

Fiscal year ended

Fiscal year ended

Fiscal year ended

March 31, 2020

March 31, 2021

March 31, 2022

March 31, 2023

Comparing our return on equity (ROE) over the past four fiscal year, it has been exceeding the cost ofshareholder's equity.
However, the difference (spread/premium) has been narrowing, with the most recent decline occurring in
the fiscal year ended March 31, 2023.

Inet[Factors contributing to the decline in the Company’s return on capital]
Components of ROE
Net income margin (%)
２.0 times

1.9 times

２.0 times

２.0 times

Financial leverage (times)
1.1 times

1.0 times

1.0 times

1.1 times

Total asset turnover (times)

Fiscal year ended

Fiscal year ended

Fiscal year endedFiscal year ended

March 31, 2020

March 31, 2021

March 31, 2022

March 31, 2023

An analysis of the components of ROE (ROE = net income margin x total asset turnover (times) x
financial leverage (times)) shows that the decrease in ROE was due to the decline in the net income margin
on sales. We recognize that improving profitability, particularly cost management, is an importantmanagement issue for enhancing our return on capital.
In addition, the increase in the cost of capital was due to the increase in market interest rates and thevolatility associated with the rise in our stock price, and we judge this trend will continue in the future.
[Return on invested capital (ROIC) and weighted average cost of capital (WACC)]ROIC and WACC

ROIC
Weighted Average Cost of Capital

Fiscal year ended

Fiscal year ended

Fiscal year ended

Fiscal year ended

March 31, 2020

March 31, 2021

March 31, 2022

March 31, 2023

Our return on invested capital (ROIC) is on a declining trend similar to ROE, and the difference(spread/premium) has also been narrowing. The increase in weighted average cost of capital (WACC) hasbeen more gradual than the rise in the cost of shareholder's equity.

InetComponents of ROICInterest-bearing debt
(million yen)

Equity (million yen)

Operating profit (million yen)

Fiscal year ended

Fiscal year ended

Fiscal year ended

Fiscal year ended

March 31, 2020

March 31, 2021

March 31, 2022

March 31, 2023

Although our equity has built up each fiscal year, our interest-bearing debt remains at a constant level.
Going forward, we intend to maintain low-cost financing and achieve further growth by controlling
excessive increases in equity and appropriately using interest-bearing debt, which has relatively low
financing costs.
Our level of interest-bearing debt is maintained at less than twice the EBITDA (earnings before interest,taxes, depreciation, and amortization), which ensures our financial health is well preserved.
(2) Market valuation
PBR and stock price trends (April 2022 to February 2024)
PBR (times)

avg. PBR in the information andtelecommunications industry(Tokyo Stok Prime)

Stock price (yen)

Our stock price indicators (PER/PBR) are on an upward trend along with the rise in the stock pricefrom May 2023.
Until the previous fiscal year, our PBR had remained in the range slightly above 1.0x, which is about
half of the average value of a little above average (2.0) for the information and telecommunicationsindustry (Tokyo Stok Market Prime listed).

InetSince the beginning of the current fiscal year, with the rise in our stock price, our stock price indicators
have also been on an upward trend, with the PBR recently trending at the 1.8 to 1.9 times level. While
this is equivalent to 70% to 80% of the recent average of 2.4 times for the information andtelecommunications industry (Prime listed), we recognize that we must continue to make efforts toimprove the PBR, as it is still below the industry average.

PER and stock price trends (April 2022 to February 2024)
PER (times)

avg. PER in the information andtelecommunications industry(Prime)

Stock price (yen)

Our PER has significantly improved with the increase in our stock price in the current fiscal year. It hasreached a level surpassing the average of 25 to 26 times for the average in the information andcommunication industry (Tokyo Stock Market Prime listed) recently.
２． Status of initiatives(1) Capitalpolicy

We intend to maintain high growth by actively allocating future operating cash flow to next-generation
investments including data centers. We will also gradually reduce policy stockholdings and use the funds forcapital expenditures in growth areas.

InetIn addition, we will work to maximize ROE by enhancing shareholder returns and restraining theunlimited increase in net assets.
By implementing the above measures, we will endeavor to achieve an equity ratio of 43%, ROE of 13%
or more, and investment securities to be less than about 15% of equity by the fiscal year ending March 31,2027.
(2) Growth strategy

We have flexibly changed the services we offer to customers in line with the changing times. Our corebusiness strategy for our business model is a platform strategy based on our own data centers.

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We are engaged in multiple businesses. Going forward, we will boldly redistribute our management
resources while balancing the growth and profitability of each business to expand earnings and maintainhigh growth potential.
While aggressively investing in growth business areas, we will transform existing businesses in matureindustry areas where we have strengths into businesses that contribute to improving the profitability of theentire company by pursuing the benefits of being survivors.
(3) Efforts to reduce the cost of capital① Response to TCFD recommendations
In order to achieve a sustainable society, we have established specific targets to reduce greenhousegas emissions for the entire Group starting the current fiscal year. We have set a goal to reduce theGroup's greenhouse gas emissions (Scope 1 and 2) by at least 50% by FY2030 compared to FY2022,
and to achieve carbon neutrality by FY2040.
At the same time, we have made it clear that we will be more active in our efforts to reducegreenhouse gas emissions by joining the TCFD Consortium.
We are also switching the electricity used in our data centers to renewable energy sources to reducethe impact of the risk of international fossil fuel price fluctuations on our operations.
② Diversity and utilization of human resources
We have established the I-NET Corporate Action Charter, and one of our actions is to respect thediversity, personality, and individuality of employees and create a workplace environment whereemployees can demonstrate their own abilities and vitality. We have high expectations for the synergy
created by employees with diverse values, including women and foreign human resources. In October
2018, we established the Diversity Promotion Office within the Human Resources Division, in an aim
to strategically utilize the abilities and individuality of diverse human resources regardless of gender,age, nationality, disability, sexual orientation, gender identity, values, marital status, presence ofchildren, or working style.
As of January 31, 2024, women accounted for 26.3% of our employees, 8.6% of our managers werewomen, and 30% of our officers were women. We aim to increase the percentage of female managers
to 12% by March 31, 2026.
We are developing our internal environment so that diverse human resources, including women, canchoose their working style according to their life stage, regardless of the presence of partners orchildren. We are also promoting the taking of paternity leave by men, and make special efforts tosupport a good balance between work and childcare.
We are also actively hiring foreign nationals. As part of our efforts to create an environment in which
foreign nationals can play an active role after joining our company, we also provide opportunities forinteraction. In addition, we conduct activities to deepen the understanding of employees of LGBTQ

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and other sexual minorities. We have introduced a partnership system that recognizes same-sex
partners as spouses.
The employment ratio of people with disabilities at the Group was 2.6% as of January 31, 2024. TheGroup has established a special subsidiary, I-NET DATA SERVICE CORP., where employees withdisabilities are engaged in work suitable to their individual abilities and aptitudes.
③ IR and PR activities
We recognize that dialogue with shareholders and investors is indispensable for improving corporate
value, and as a rule, the Representative Director himself takes the stage as a presenter at financial
results briefings and briefings for individual investors.
The following activities were conducted in FY2023.
Briefings for analysts and institutional investors: 2 times (annual financial results and 2Q financialresults; presenter: Representative Director)
Briefings for individual investors: 2 times (presenter: Representative Director)
1 on 1 meetings with analysts and institutional investors: 15 times (presenter: Head of Management
Planning Department)
In February 2024, we resumed the in-person briefings for individual investors that had beensuspended due to the corona virus pandemic. We recognize the need for improvement regarding thelevel of participation and number of investor briefings held in FY2023. We plan to actively participate
in investor briefings going forward.
In addition, from January 2024, we started posting financial results briefings and businessintroduction IR videos on an IR video distribution platform to provide more opportunities forunderstanding our management policies and the nature of our business. We plan to actively utilize
video distribution as well.
(4) Appropriate compensation
We have introduced a restricted stock compensation program for directors and executive officers as partof their compensation starting in May 2019, in an effort to strengthen the commitment of management tothe stock price.
Since the fiscal year ended March 31, 2023, to achieve fair compensation and pay raises for employees,
we have reviewed the prices of services and products we offer and achieved a pay raise for employees(average annualized salary increase of 4.2% for the fiscal year ended March 31, 2024).
We intend to continue to work to raise pay in the fiscal year ending in March 31, 2025 as well. We plan
to make further improvements to employee pay by aiming for an average annual pay raise of 7%, and by
introducing a compensation system aligned with corporate performance and an evaluation system thatrewards individual efforts.

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３． Future outlook
Under our Medium-term Management Plan (fiscal year ended March 31, 2022 to fiscal year ending March31, 2025), of which the current fiscal year is the second, we have set numerical targets to achieve net sales of
40 billion yen, operating profit of 3.2 billion yen, operating margin of 8.0%, and ROE of 10% or higher in thefiscal year ending March 31, 2025, the final year of the plan.
In order to achieve management conscious of the cost of capital and stock price in our Medium-termManagement Plan, we intend to further analyze our company, reflect the results in our management efforts,and disclose the results both internally and externally.
In the next three-year Medium-term Management Plan starting in the fiscal year ending in March 31, 2026,
we plan to advance management conscious of the cost of capital and stock price by thoroughly analyzing theinitiatives and results of the current Medium-term Management Plan.
End