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

(Securities code: 2389)
Date of issue: March 5, 2024
Date of electronic provision measures commencement: March 4, 2024
To our shareholders:Atsushi Nouchi
President and Group CEO
DIGITAL HOLDINGS, INC.
6, Yonbancho, Chiyoda-ku, Tokyo
Convocation Notice of the 30th Annual General Meeting of Shareholders
You are cordially invited to attend the 30th Annual General Meeting of Shareholders (the “Meeting”) of DIGITALHOLDINGS, Inc. (the “Company”), which will be held as described below.
When convening the General Meeting of Shareholders, the Company takes measures to electronically provide theinformation that is the content of the reference documents for the general meeting of shareholders, etc. (Electronic
Provision Measures Matters), and posts this information as the “Convocation Notice of the 30th Annual General
Meeting of Shareholders” on the Company’s website. Please access the Company’s website using the Internet
address shown below to review the information.
Two-dimensional code

The Company’s website:
https://www.digital-holdings.co.jp/ir/stocks_meeting/(in Japanese)

In addition to the Company’s website, the Company also posts this information on the website of the Tokyo Stock
Exchange, Inc. (TSE). Please access the TSE website (Listed Company Search) by using the Internet address given
below, input “DIGITAL HOLDINGS” in the issue name (company name) field or “2389” in the securities code
field, and click “Search.” Then, click “Basic information” and select “Documents for public inspection/PR
information” to check the information under “[Notice of General Shareholders Meeting /Informational Materials for
a General Shareholders Meeting].”
Two-dimensional code

TSE website (Listed Company Search):https://www2.jpx.co.jp/tseHpFront/JJK010010Action.do?Show=Show(in Japanese)

If you are unable to attend the Meeting, you can exercise your voting rights in writing or via the Internet.
Please refer to the Reference Documents for the General Meeting of Shareholders, and exercise your voting
rights no later than 6:00 p.m., Wednesday, March 27, 2024 (JST). Although we have live streamed general
meetings of shareholders on the Internet since the 27th Annual General Meeting of Shareholders, please notethat the Meeting will not be live streamed this year. We highly appreciate your understanding.

-1-

-2-

1.

Date and Time: Thursday, March 28, 2024 at 10:00 a.m. (JST)2.

Place:

3.

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

Matters to be reported:
I. Report on Business Report, Consolidated Financial Statements and audit results of the Consolidated
Financial Statements by the Accounting Auditor and the Audit and Supervisory Committee for the
30th Fiscal Term (from January 1, 2023 to December 31, 2023).
II. Report on the Non-Consolidated Financial Statements of the Company for the 30th Fiscal Term (fromJanuary 1, 2023 to December 31, 2023).
Proposals to be resolved:<Company’s proposals (Proposal No. 1 and Proposal No. 2)>
Proposal No. 1:

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

Proposal No. 2:

Election of Three (3) Directors Who Are Audit and Supervisory Committee Members<Shareholder’s proposals (Proposal No. 3 and Proposal No. 4)>
Proposal No. 3:

Purchase of Treasury Shares

Proposal No. 4:

Partial Amendments to the Articles of Incorporation (Disclosure of Individual Director
Remuneration)

The Board of Directors of the Company is opposed to Proposal No. 3 and Proposal No. 4.
4.

Instructions for Exercising Voting Rights(1) Exercising voting rights in writing
To vote in writing, please indicate your approval or disapproval of the proposal on the Voting Rights Exercise
Form sent together with this Convocation Notice, and return the Form by post to reach us by 6:00 p.m.
Wednesday, March 27, 2024 (JST).
* If you do not indicate your approval or disapproval of each proposal, your vote shall be treated as anindication of “approval” for the Company’s proposals (Proposal No. 1 and Proposal No. 2), and an
indication of “disapproval” for the Shareholder’s proposals (Proposal No. 3 and Proposal No. 4).
(2) Exercising voting rights via the Internet
To vote via the Internet, please access to the “Voting Right Exercise Site (https://www.net-vote.com/)” (inJapanese), which is provided on the Voting Rights Exercise Form sent together with this Convocation Notice.
Follow the instructions and indicate your approval or disapproval by 6:00 p.m. Wednesday, March 27, 2024
(JST). If you want to use your smartphone, you can exercise your voting rights by using QR code (Please referto the page after next for details.)(3) Handling of exercising voting rights in duplicate
1) If you vote both in writing and via the Internet, voting rights exercise via the Internet shall be deemed valid.
2) If you vote more than once via the Internet, the most recent shall be deemed as valid.

-3-Notice•

When attending the Meeting in person, you are kindly requested to submit the Voting Rights Exercise
Form sent together with this Convocation Notice at the reception desk. Please bring this Convocation
Notice of the 30th Annual General Meeting of Shareholders with you to the meeting.

•If a proxy exercises your voting rights, the proxy shall be another shareholder who has voting rights inaccordance with the provisions of the Company’s Articles of Incorporation. When a proxy attends the
Meeting in person, the proxy is required to submit a written proof of the right of proxy (power ofattorney) together with the Voting Rights Exercise Form at the reception desk.

•

The English version of the Convocation Notice of the Annual General Meeting of Shareholders and theReference Documents for the General Meeting of Shareholders are available on the Company’s website(https://digital-holdings.co.jp/en/).

•If amendments to the Electronic Provision Measures Matters are to be taken arise, a notice of theamendments and the details of the matters before and after the amendments will be posted on the
Company’s aforementioned website and the TSE website.

•

The number of seats available for shareholders at the Meeting will be limited. Therefore, even if youcome to the venue on the day, we may refuse your entry into the venue.

•

For some officers, participation may be via remote communication.

•

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

Shareholders’ Comments
To improve communication with shareholders, we are accepting inquiries for the General Meeting of Shareholders(to distinguish from inquiries made by exercising the right to inquire under the Article 314 of the Companies Act,
hereinafter the “Comments”) through the following methods. Although they will not be regarded as formal
statements at the General Meeting of Shareholders, some of the Comments may be featured and answered during theGeneral Meeting of Shareholders. We highly appreciate your understanding on this matter.
Method:Enter your comment at: https://digital-holdings.co.jp/contact_ir (in Japanese) and send it by 6:00 p.m.
Friday, March 22, 2024 (JST).

-4-

Instructions for Exercising Voting Rights via the Internet
You can exercise your voting rights via the Internet by accessing the Voting Right Exercise Site as instructed below
from your PCs or smartphones.
1. Accessing the Voting Right Exercise Site
[Address of Voting Right Exercise Site]
https://www.net-vote.com/ (in Japanese)
Please access the Voting Right Exercise Site at the URL provided above. You can exercise your voting rights
until 6:00 p.m. Wednesday, March 27, 2024 (JST).
2. How to vote via the Internet[For PC users]
Access the Voting Right Exercise Site at the URL provided above, log in by entering the login ID and password
printed on the Voting Rights Exercise Form sent together with this Convocation Notice and follow the
instructions on the screen to indicate your approval or disapproval of the proposals.
[For smartphone users]
Simply scan the QR code® located on the Voting Rights Exercise Form sent together with this Convocation
Notice. You don’t have to enter login ID nor password.
In case you would like to change any of your indication, access the Voting Right Exercise Site at the above
URL, log in by entering the login ID and password printed on the Voting Rights Exercise Form and follow the
instructions on the screen to indicate approval or disapproval of the proposal. (QR code® is a registeredtrademark of DENSO WAVE INCORPORATED).
3. Notes(1) Any costs arising from accessing the Voting Right Exercise Site shall be borne by shareholders.
(2) Depending on your network environments, you may not be able to access the Voting Right Exercise Site.
(3) The Voting Right Exercise Site is not accessible via some cellular phones such as feature phones.
Institutional investors can exercise their voting rights through “The Electronic Proxy Voting Platform” operated by
ICJ, Inc.
For an inquiry regarding online exercise of the voting rights, please contact the following:
Custody Service Department, IR Japan, Inc.
TEL: 0120-975-960
Business Hours: 9:00 a.m. to 5:00 p.m. (JST) (not available on Saturdays, Sundays and holidays)-5-

Reference Documents for the General Meeting of Shareholders<Company’s proposals (Proposal No. 1 and Proposal No. 2)>
Proposal No. 1: Election of Seven (7) Directors (Excluding Directors Who Are Audit and Supervisory
Committee Members)
The terms of office of all the current seven (7) Directors (excluding Directors who are Audit and Supervisory
Committee members; the same shall apply hereinafter in this proposal) will expire at the conclusion of this Annual
General Meeting of Shareholders.
In that regard, the Company proposes to elect seven (7) Directors.
As for this proposal, the Audit and Supervisory Committee of the Company has agreed that all the candidates are
qualified to serve as Directors.
The candidates for Director are as follows:
Candidate
No.

Name(Date of birth)

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

1

2

3

Number of theCompany’s
Shares
Owned

Joined Mori Building Co., Ltd.
Established Deca Legs Ltd. (currently the Company) andassumed the position as President
Jun. 2016
Outside Director, UT Group Co., Ltd.
Noboru Hachimine
Mar. 2017
Director, SoldOut, Inc.
4,525,200(June 22, 1967)
Mar. 2020
Chairperson, the Company (current position)
Apr. 2020
President and Representative Director, Digital Shift, Inc.
Mar. 2021
Chairperson and Representative Director, Digital Shift, Inc.
Mar. 2022
Chairperson and Director, Digital Shift, Inc. (current position)[Reasons for nomination as candidate for Director]
Mr. Noboru Hachimine has long been demonstrating excellent leadership and driving growth in the Group’s corporate
value. He has been nominated because he is well-qualified to continue to build an operational foundation for therealization of sustainable Group-wide growth and to improve corporate value over the medium to long term.
Apr. 1991
Joined Mori Building Co., Ltd.
Oct. 1996
Joined OPT, Inc. (currently the Company)
Mar. 1999
Director, OPT, Inc.
Atsushi Nouchi(December 21,
1,285,800
Feb. 2015
CEO, OPT Ventures, Inc. (currently Bonds Investment Group
1967)
Inc.) (current position)
Mar. 2017
Vice President and Group COO, the Company
Mar. 2020
President and Group CEO, the Company (current position)[Reasons for nomination as candidate for Director]
Mr. Atsushi Nouchi is well-versed in all aspects of the Group’s operations and has been driving growth in the Group’s
corporate value through strong leadership, decisiveness and executive capabilities. He has been nominated because heis well-qualified to continue to build an operational foundation for the realization of sustainable Group-wide growth
and to improve corporate value over the medium to long term.
Sep. 2005
Joined OPT, Inc. (currently the Company)
Jan. 2008
General Manager of Sales Department, OPT, Inc.
Apr. 2013
Executive Officer, OPT, Inc.
Apr. 2015
President, Representative Director and CEO, OPT, Inc.
Daisuke Kanazawa
Apr. 2017
Senior Executive Officer, the Company(September 4,
34,100
Apr. 2019
Group Executive Officer, the Company
1980)
Apr. 2020
Director, OptDigital, Inc. (currently Re:teigi, Inc.) (current
position)
Oct. 2020
Director, RePharmacy, Inc.
Mar. 2021
Director and Group COO, the Company (current position)[Reasons for nomination as candidate for Director]
Mr. Daisuke Kanazawa has been engaged in marketing throughout his career since he joined OPT, Inc. in 2005 and has
long been leading the execution of operations in the Group’s core business domains through strong leadership,decisiveness and executive capabilities by serving in such positions as Representative Director at OPT, Inc. and Group
Executive Officer of the Company. He has been nominated because he is well-qualified for the Group to continue toaim for corporate value of JPY 1 trillion.

-6-

Candidate
No.

Name
(Date of birth)

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

4

5

Number of theCompany’s
Shares
Owned

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

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Candidate
No.

Name
(Date of birth)

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

Number of theCompany’s
SharesOwned

Aug. 2005
Jan. 2008

6

7

Joined Macromill, Inc.
Executive Officer (in charge of Finance and Accounting
Headquarters), Macromill, Inc.
Jun. 2008
Joined J-Magic K.K.
Dec. 2008
Director, CFO, General Manager of Administration
Management Division, J-Magic K.K.
Dec. 2009
Joined mixi, Inc.
Yasuhiro Ogino
Nov. 2011
Executive General Manager of the Administrative(September 29,
0
Headquarter, mixi, Inc.
1973)
Feb. 2012
Executive Officer, mixi, Inc.
Jun. 2012
Director, mixi, Inc.
May 2017
Representative Director, SMART HEALTH Inc.
Apr. 2018
Executive Officer, mixi, Inc.
Mar. 2020
External Director, the Company (current position)
Apr. 2020
Director and CFO, OCT Inc. (currently ANDPAD Inc.)(current position)[Reasons for nomination as candidate for Director and outline of expected role]
With his experience as CFO and others at growing companies, Mr. Yasuhiro Ogino possesses abundant insight inoverall business administration centered on business development and M&A. He has been nominated because he isexpected to offer opinions and advice to ensure appropriate, sound management decision-making from an independentand objective standpoint.
Oct. 2002
Joined Oracle Corporation Japan
Dec. 2010
Co-founder & COO, Quipper Limited
Mariko Tokioka
Oct. 2013
Founder & CEO, East Meet East, Inc. (current position)
0(July 29, 1979)
Jun. 2019
External Director, Asteria Corporation (current position)
Mar. 2022
External Director, the Company (current position)[Reasons for nomination as candidate for Director and outline of expected role]
Ms. Mariko Tokioka is the founder and CEO of an IT company based in the U.S. and has a wealth of experience and awide range of insight, including entrepreneurial experience in the SaaS field, global business management, anddiversity management. She has been nominated because she is expected to offer opinions and advice to ensure
appropriate, sound management decision-making from an independent and objective standpoint.

(Notes) 1. None of the candidates has any special interests in the Company or vice versa.
2. Messrs. Tomoyuki Mizutani, Koji Yanagisawa, and Yasuhiro Ogino, and Ms. Mariko Tokioka are External Director
candidates.
3. Messrs. Tomoyuki Mizutani, Koji Yanagisawa, and Yasuhiro Ogino, and Ms. Mariko Tokioka are currently External
Directors of the Company; Mr. Tomoyuki Mizutani will have served for seven years as of the conclusion of the 30th
Annual General Meeting of Shareholders, Messrs. Koji Yanagisawa and Yasuhiro Ogino for four years, and Ms. Mariko
Tokioka for two years.
4. If Messrs. Tomoyuki Mizutani, Koji Yanagisawa, and Yasuhiro Ogino, and Ms. Mariko Tokioka are reappointed, theCompany plans to renew each of the existing agreements with them pursuant to the provisions of Article 427, paragraph 1of the Companies Act and Article 32, paragraph 2 of the Company’s Articles of Incorporation. The agreements limit their
liability for damages under Article 423, paragraph 1 of the Companies Act to the minimum liability stipulated in Article
425, paragraph 1 of the same act.
5. The Company has concluded Directors and Officers liability insurance contracts as provided for in Article 430-3,
paragraph 1 of the Companies Act with an insurance company. The insured under such insurance contracts are Directors
and managerial employees of the Company, and Directors, Auditors, and managerial employees of the Company’s
subsidiaries. The insurance contracts cover losses that may arise from an insured’s assumption of liability incurred in thecourse of the performance of duties, or receipt of claims pertaining to the pursuit of such liability. However, in order toensure that the appropriateness of the insured’s performance of duties is not compromised, coverage is not provided incases of a willful breach of trust, criminal or fraudulent acts, or willful violation of laws and regulations by the insured. In
the event that each candidate’s election as a Director is approved, he or she shall be the insured under the said insurance
contract. The insurance contract is scheduled to be renewed with the same terms and conditions at the next renewal.
6. Messrs. Tomoyuki Mizutani, Koji Yanagisawa, and Yasuhiro Ogino, and Ms. Mariko Tokioka meet the independent
director requirements of the Tokyo Stock Exchange, Inc. If reappointed, they will continue to serve as independent
directors.
7. The number of the Company’s shares owned by Mr. Noboru Hachimine includes 4,520,200 shares owned by HIBC Co.,
Ltd., an asset management company wholly owned by Mr. Hachimine.
8. The number of the Company’s shares owned by Mr. Atsushi Nouchi includes 400,800 shares owned by Time and Space,Ltd., an asset management company wholly owned by Mr. Nouchi.

-8-Proposal No. 2:

Election of Three (3) Directors Who Are Audit and Supervisory Committee Members

The terms of office of all the current four (4) Directors who are Audit and Supervisory Committee members will
expire at the conclusion of this Annual General Meeting of Shareholders. In view of the current status of theCompany’s audit system, including coordination, etc. with the internal audit staff, the Company has decided toreduce the number of Directors who are Audit and Supervisory Committee members by one (1) to three (3)Directors who are Audit and Supervisory Committee members, as it determined that the effectiveness of audits will
be maintained with the reduced number. In that regard, the Company proposes to elect three (3) Directors who are
Audit and Supervisory Committee members. The consent of the Audit and Supervisory Committee has beenobtained for this proposal.
The candidates for Directors who are Audit and Supervisory Committee members are as follows:
Candidate
No.

Name(Date of birth)

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

1

2

Number of theCompany’s
Shares
Owned

Joined THE OITA BANK, LTD.
Joined Takahashi Tax Accounting Office
Joined ChuoAoyama Audit Corporation
Joined Ernst & Young ShinNihon LLC
Established Okabe Yuki Certified Public Accountant and FP
OfficeJun. 2016
Full-time Audit & Supervisory Board Member, fonfun
corporation
Yuki Okabe
Jul. 2018
Full-time Audit & Supervisory Board Member, AltPlus Inc.
0
(May 5, 1973)
Mar. 2020
External Director and Audit and Supervisory Committee, theCompany (current position)
Mar. 2021
Auditor, SoldOut, Inc.
Mar. 2021
Auditor, Digital Shift, Inc. (current position)
Mar. 2021
Auditor, Bonds Investment Group Inc.
Mar. 2022
Auditor, OPT, Inc. (current position)
Mar. 2022
Auditor, Re:teigi, Inc. (current position)
Mar. 2022
Auditor, RePharmacy, Inc.
[Reasons for nomination as candidate for Director who is Audit and Supervisory Committee member and outline of
expected role]
In addition to possessing significant insight in finance and accounting as a CPA, Ms. Yuki Okabe has experience as an
Auditor at multiple listed companies. She has been nominated because she is expected to offer necessary opinions andadvice in the deliberation of matters from an objective standpoint.
Oct. 2002
Joined Ushijima & Partners, Attorneys-at-Law
Jan. 2012
Joined LIXIL Corporation
Ryoichi Kagizaki Oct. 2017
Joined LINE Corporation (currently LY Corporation)
0(August 1, 1974)
Jan. 2019
Joined Miura & Partners (current position)
Mar. 2022
External Director and Audit and Supervisory Committee
member, the Company (current position)[Reasons for nomination as candidate for Director who is Audit and Supervisory Committee member and outline of
expected role]
Although Mr. Ryoichi Kagizaki does not have experience of being involved in corporate management directly by any
method other than being an external officer in the past, he has a wealth of experience and expertise as a lawyer. He has
been nominated as a candidate for Director who is Audit and Supervisory Committee member because he is expected
to offer necessary opinions and advice in the deliberation of matters.

-9-Candidate
No.

Name
(Date of birth)

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

Number of theCompany’s
SharesOwned

Apr. 1983
Jun. 2011

3

Joined The Tokai Bank, Ltd. (currently MUFG Bank, Ltd.)
Joined Mitsubishi UFJ Lease & Finance Company Limited(currently Mitsubishi HC Capital Inc.)
Jul. 2012
Corporate Officer, Mitsubishi UFJ Lease & Finance Company
Limited (currently Mitsubishi HC Capital Inc.)
May 2013
President, Bangkok Mitsubishi UFJ Lease Co., Ltd. (currently
Bangkok Mitsubishi HC Capital Co., Ltd.)
Jun. 2013
Executive Officer, Mitsubishi UFJ Lease & Finance Company
Limited (currently Mitsubishi HC Capital Inc.)
Jun. 2015
Full-time Audit & Supervisory Board Member, Mitsubishi*
UFJ Lease & Finance Company Limited (currently Mitsubishi
Kazuhide0
HC Capital Inc.)
YamauchiJun.
2018
SeniorAdvisor,
Mitsubishi
UFJ
Lease
&
FinanceCompany(October 19, 1960)
Limited (currently Mitsubishi HC Capital Inc.)
Full-time Audit & Supervisory Board Member, Mitsubishi
Auto Leasing Corporation
Full-time Audit & Supervisory Board Member, Mitsubishi
Auto Leasing Holdings Corporation (currently Mitsubishi
Auto Leasing Corporation)
Jul. 2023
Part-time Advisor, Mitsubishi HC Capital Inc.
Sep. 2023
Advisor, Financial Partners Group Co., Ltd.
Dec. 2023
Outside Audit & Supervisory Board Member, Financial
Partners Group Co., Ltd. (current position)[Reasons for nomination as candidate for Director who is Audit and Supervisory Committee member and outline of
expected role]
Mr. Kazuhide Yamauchi has a long career at financial institutions and possesses considerable expertise in finance andaccounting, as well as experience as an Audit & Supervisory Board Member at several companies. He has been newly
nominated as a candidate for Director who is Audit and Supervisory Committee member because he is expected tooffer necessary opinions and advice in the deliberation of matters from a professional 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. Ms. Yuki Okabe, Messrs. Ryoichi Kagizaki and Kazuhide Yamauchi are External Director candidates.
4. Ms. Yuki Okabe and Mr. Ryoichi Kagizaki are currently External Directors who are Audit and Supervisory Committee
members of the Company; they will have served as External Directors for four years and two years, respectively, as of theconclusion of the 30th Annual General Meeting of Shareholders.
5. Ms. Yuki Okabe is an Auditor of OPT, Inc., Digital Shift, Inc., and Re:teigi, Inc., which are subsidiaries of the Company.
6. If Ms. Yuki Okabe and Mr. Ryoichi Kagizaki are reappointed, the Company plans to renew each of the existing agreementswith them pursuant to the provisions of Article 427, paragraph 1 of the Companies Act and Article 32, paragraph 2 of theCompany’s Articles of Incorporation. The agreements limit their liability for damages under Article 423, paragraph 1 of theCompanies Act to the minimum liability stipulated in Article 425, paragraph 1 of the same act. If the election of Mr.
Kazuhide Yamauchi is approved, the Company plans to enter into the same liability limitation agreement with him.
7. The Company has concluded Directors and Officers liability insurance contracts as provided for in Article 430-3,
paragraph 1 of the Companies Act with an insurance company. The insured under such insurance contracts are Directors
and managerial employees of the Company, and Directors, Auditors, and managerial employees of the Company’s
subsidiaries. The insurance contracts cover losses that may arise from an insured’s assumption of liability incurred in thecourse of the performance of duties, or receipt of claims pertaining to the pursuit of such liability. However, in order toensure that the appropriateness of the insured’s performance of duties is not compromised, coverage is not provided incases of a willful breach of trust, criminal or fraudulent acts, or willful violation of laws and regulations by the insured. In
the event that each candidate’s election as a Director who is Audit and Supervisory Committee member is approved, he or
she shall be the insured under the said insurance contract. The insurance contract is scheduled to be renewed with the sameterms and conditions at the next renewal.
8. Ms. Yuki Okabe and Mr. Ryoichi Kagizaki meet the independent director requirements of the Tokyo Stock Exchange, Inc.
If reappointed, they will continue to serve as independent directors. Mr. Kazuhide Yamauchi also satisfies the samerequirements and will be reported as an independent director if his election is approved.

- 10 -

<Shareholder’s proposals (Proposal No. 3 and Proposal No. 4)>
Proposal No. 3 and Proposal No. 4 are proposals submitted by the shareholder LIM Japan Event MasterFund (hereinafter the “Proposing Shareholder”).
We quote herein the original text of the outline of and the reasons for such proposal submitted in writing by
the Proposing Shareholder in relation to the exercise of shareholder’s right to Propose. The opinion of theBoard of Directors of the Company on the Shareholder’s proposal is also included herein following theShareholder’s proposal.
Proposal No. 3:

Purchase of Treasury Shares(1) Outline of the proposal
Pursuant to the provisions of Article 156, paragraph 1 of the Companies Act, within one year from theconclusion of the Annual General Meeting of Shareholders, the Company shall acquire its common shares of up
to 4.7 million shares in total, with a total acquisition price of up to JPY 5.7 billion, by delivering cash (however,if the total acquisition price permitted under the Companies Act (i.e., the “distributable amount” as defined in
Article 461 of the Companies Act) is less than such amount, the maximum amount of the total acquisition pricepermitted under the Companies Act).
(2) Reasons for the proposal
The Company’s minority shareholders have been forced to endure difficult situations. In the past few years,
while the Company’s efforts to transform its business came to a standstill, the Company has not taken
corrective action on its excess capital structure, which will be discussed later. As a result, its price-to-book ratio(PBR) has continued to fall below the dissolution value of 1x. Moreover, there have been times when the shareprice fell to a level at which the real core business enterprise value (EV), which takes into account assets undermanagement held by the non-core financial investment business and non-controlling interests, could have fallen
into the negative territory. Negative EV means an abnormal valuation where, when the Company is acquired
without a premium, its businesses will be acquired for free, with even some money given back in return. This
leads us to question not only the Company’s eligibility to be listed on the Prime Market, but also the very
meaning of being listed.
The extremely low valuation of the Company’s stock is the result of ignoring capital allocation (redistributionof capital), preserving large amounts of cash and deposits and operating funds that cause capital efficiency todeteriorate, and neglecting the resulting excess capital. As a matter of fact, as of September 30, 2023, theCompany recorded cash and deposits of JPY 17.9 billion, operational investment securities of JPY 6.3 billion,
and investment securities of JPY 8.2 billion on the consolidated balance sheet, which came to a total of
approximately JPY 32.5 billion, approximately 1.5 times more than the market capitalization of JPY 21.1
billion as of January 12, 2024.
In “TSE’s Future Actions in Response to the Summary of Discussions of the Follow-up Council,” which was
published on January 30, 2023 by Tokyo Stock Exchange, Inc., it stated specific actions to “Require thatmanagement and the board of directors properly identify the company’s cost of capital and capital efficiency,
evaluate those statuses and its stock price and market capitalization, and disclose policies and specificinitiatives for improvement and the progress thereof as necessary,” “Especially for companies that clearly needto improve, such as those with a PBR consistently below 1x.”In response, the Company issued a press release in November 2023 titled, “Action to Implement Managementthat is Conscious of Cost of Capital and Stock Price” and revised its dividend policy, etc. However, uncertainty
remains over the future of high equity ratios relative to business risks and returns, which would lead to a higher
cost of capital and an underestimation of the return on equity (ROE). There is a lack of discussion on the
optimal capital structure and ROE target at the Company.
The Company’s equity ratio after taking into account non-controlling interests stood at a record high ofapproximately 70% as of September 30, 2023, and the dividend on equity ratio (DOE) introduced by theCompany can only be described as “a drop in the bucket.” If the Company continues to hold disproportionately
large assets under management and excess capital relative to its market capitalization, it will not be able tocorrect its inefficient capital allocation under which ROE is subordinated to the cost of shareholders’ equity,and therefore the PBR will remain below 1x and the Company is highly likely to fall into negative EV.
Accordingly, a drastic share buyback is required. As mentioned above, the Company has more than sufficient
resources to purchase treasury shares, since its cash and deposits and assets under management that do not- 11 -

contribute to the core business account for more than 100% of the Company’s market capitalization. The total
number of shares we propose buying back is equivalent to 20% of the trading volume of the Company’s shares
over the past year, which is a reasonable level that can be fully absorbed by the market from the perspective of
liquidity.
[Opinion of the Board of Directors of the Company on Proposal No. 3]
The Company’s Board of Directors is opposed to Proposal No. 3.
The Company recognizes that the return of profit to its shareholders serves as one of its key managerial challenges and accordingly
purchased its treasury shares amounting to approximately JPY 1.0 billion in fiscal 2020, approximately JPY 2.0 billion in fiscal
2021, and approximately JPY 5.0 billion in fiscal 2022. This was pursuant to its policy of flexible and agile shareholder returns
during the periods entitled “Initial Year of Transformation” of the fiscal year ended December 31, 2020, and “DS Innovation 2023”
extending from the fiscal year ended December 31, 2021 to the fiscal year ended December 31, 2023. On November 30, 2023, wecanceled all treasury shares (accounting for 26.7% of the total number of shares issued prior to such cancellation of the treasury
shares) in seeking to enhance shareholder returns and improve capital efficiency. As in the three years extending from the fiscal
year ending December 31, 2024, the Company will continue to take a flexible and agile approach in considering timing andmonetary amounts appropriate in purchasing its treasury shares, taking into account trading activity and share price of theCompany’s stock, the Company’s financial status, investment plans, and other such factors.
Moreover, as stated in its “Notice on Change in Dividend Policy” released on November 7, 2023, the Company changed its
dividend policy in that it has opted to target “dividends equivalent to 20% of profit attributable to owners of parent before
amortization of goodwill,” and it has also added a new policy for determining dividend amounts based on the dividend on equity
ratio (DOE). The Company furthermore aims to adopt, in principle, “dividends equivalent to 20% of profit attributable to owners ofparent before amortization of goodwill or equivalent to 3% of DOE, whichever is greater,” for the four-year period from the fiscal
year ended December 31, 2023 to the fiscal year ending December 31, 2026. The Company paid dividends of JPY 75.00 per sharefor the fiscal year ended December 31, 2023, which consisted of a dividend of JPY 45.00 per share upon having adopted a “3% ofDOE” dividend policy based on operating results, as well as a commemorative dividend of JPY 30.00 per share to commemorate
the Company’s 30th anniversary (special dividend), thereby exceeding the dividends of JPY 67.00 per share for the fiscal year
ended December 31, 2022.
In regard to the Company’s cost of capital and share price, ROE has consistently fallen below the cost of shareholders’ equity,
ROIC has consistently fallen below WACC, and PBR is below 1x. As such, the Company’s Board of Directors has resolved toestablish a basic policy pertaining to initiatives for improving PBR and other benchmarks taking into account this situation.
Whereas specifics in this regard were disclosed in “Action to Implement Management that is Conscious of Cost of Capital andStock Price,” released on November 7, 2023, the Company deems that the aforementioned situation is primarily attributable tofactors that include diminished business profitability during the period of transformation and insufficient future prospects as a resultof the transformation not yielding operating results. Furthermore, our analysis indicates that the Company’s prevailing low levels ofcapital efficiency and market valuation are mainly attributable to it having not sufficiently conveyed its potential for sustainablegrowth to investors. As such, we believe that the notion of improving the Company’s corporate value (PBR exceeding 1x) calls for
us to systematically implement initiatives underpinned by consistent and sustained ROE increases combined with a medium- tolong-term value creation narrative. Specifically, we will strive to increase ROE and PER through initiatives that involve
reorganizing our business portfolio, reorganizing capital allocations, and enhancing IR and non-financial strategy. The Company
has again set a target of aiming to consistently achieve 10% ROE.
Having established the Group’s purpose “to kindle an Industrial Transformation and solve Social Issues through New Value
Creation” in 2020, the Group aims to realize a sustainable society as it takes on the challenges of creating new value by actualizing
Industrial Transformation (IX) through a digital shift and providing “unique frameworks” that directly link to the development ofgrowth-oriented companies. Under these circumstances, we set “DS Innovation 2023” as our medium-term business goal in fiscal
2021, and have accordingly been diversifying our revenue opportunities by using new revenue models and actively investing in
growth in new domains in order to make the Digital Shift Business a core business second only to the Advertising Business. Fromfiscal 2024 onward, we will continue to take on such challenges in terms of hastening support that directly affects sales and profits
of growing companies by leveraging the strengths of our original business. This will involve engaging in Group integration andbusiness streamlining, making plans for investment focused on core businesses, and actively pushing forward with investment that
contributes to improving corporate value with priority assigned to growth investment in areas such as business partnerships andM&A. In addition, we also need to secure readily available funds that can be flexibly enlisted to provide for changes in the businessenvironment, disasters, and other such unforeseen events. We accordingly deem that the Company’s cash assets are currently at an
appropriate level upon having taken such requirements into account.
On the other hand, the purchase of treasury shares associated with this shareholder’s proposal does not take into account thenecessity of matters such as the key business investment and growth investment previously mentioned. As such, we havedetermined that the proposal is subject to financial constraints that would potentially hamper the prospect of improving theCompany’s corporate value over the medium to long term.
For the reasons above, the Company’s Board of Directors is opposed to the shareholder’s proposal involving the purchase oftreasury shares.

- 12 -

Proposal No. 4:

Partial Amendments to the Articles of Incorporation (Disclosure of Individual Director
Remuneration)(1) Outline of the proposal
We propose to establish an Article in the Articles of Incorporation of the Company as follows. If the Article
described in this proposal needs to be revised as a formality (including, but not limited to, an amendment to thenumber of articles) due to the approval of other proposals (including proposals by the Company) at the Annual
General Meeting of Shareholders, the Article pertaining to this proposal shall be replaced with the amended
Article to which necessary revisions have been made.
(Underlines denote amendments)
Current Articles of Incorporation(Newly established)

Proposed Amendments(Remuneration, etc. for Directors)

Article 31
1. (Omitted)
2. The amount, details, and determination methods of the
remuneration for individual Directors shall be disclosed
annually in the business report and the annual securities
report.

(2) Reasons for the proposal
In light of the fact that the Company’s Board of Directors has long allowed the PBR to fall below 1x and EV to
be negative, we propose to establish a provision in the Articles of Incorporation to require the Company todisclose individual Director remuneration, in order to create an environment in which minority shareholders canmore proactively conduct checks.
A review of capital allocation is an urgent issue for the Company. In contrast, individual Director remuneration
is an indication of how the Board of Directors assesses the challenges facing the Company and how this isreflected in the remuneration paid to individual Directors. Disclosing individual Director remuneration willserve to identify the causes for the lack of protection of minority shareholders’ interests and contributes toimproving corporate governance at the Company.
In the Company’s Corporate Governance Report published in April 2023, the section on Director remuneration
states that the Company’s remuneration “consists of basic remuneration and performance-linked remuneration”
and “only basic remuneration is paid to Non-Executive Directors (excluding External Directors and Directors
who are Audit and Supervisory Committee members), External Directors (excluding Directors who are Audit
and Supervisory Committee members), and Directors who are Audit and Supervisory Committee members.” It
describes that the basic remuneration “shall be fixed monthly remuneration consisting of consideration for
representation, compensation for resolution and supervision, and compensation for business execution, andshall be determined by comprehensively taking into consideration the required responsibilities and external
compensation database services.” However, the amount and specific calculation methods have not been
disclosed.
Performance-linked remuneration “shall be medium- to long-term monetary remuneration for Executive
Directors only and shall be paid in a lump sum in the fiscal year following the relevant three fiscal years, inaccordance with the rate of achievement, only when the rate of achievement of the KPIs reaches the target, by
setting the market capitalization (set for every three fiscal years), which is a key indicator for improving thecorporate value of the Company, as the KPI.” “The Nomination and Remuneration Committee shall make areport on the ratio of remuneration for Executive Directors by type of remuneration based on external
remuneration database services and other information. Thereafter, the Board of Directors shall determine thedetails of remuneration, etc. for each Director within the scope of the ratio of remuneration by type indicated in
the report, while respecting the content of the report of the Nomination and Remuneration Committee.”
However, ultimately, it is not possible to clarify from the disclosed materials how the incentives for Executive
Directors are linked to the interests of shareholders (especially the interests of minority shareholders) at theCompany.
The Corporate Governance Code stipulates that “The board should design management remuneration systems
such that they operate as a healthy incentive to generate sustainable growth, and determine actual remuneration
amounts appropriately through objective and transparent procedures. The proportion of management
remuneration linked to mid- to long-term results and the balance of cash and stock should be set appropriately.”(Corporate Governance Code (June 2021 Edition) Supplementary Principle 4.2.1 [page 16] in Japaneseversion). On the other hand, the details of performance-linked remuneration for the Company’s Directors areunclear, and the remuneration system may not be designed to “raise consciousness of their contribution to- 13 -

medium- to long-term improvement of business performance and corporate value,” as stated in the Company’s“Basic policy” for the remuneration system.
Therefore, in order to create an environment in which shareholders and the market can appropriately evaluate
the performance of the Company’s management and the Company’s capital allocation issues, we propose toestablish a provision in the Articles of Incorporation to require the Company to disclose individual Director
remuneration.
[Opinion of the Board of Directors of the Company on Proposal No. 4]
The Company’s Board of Directors is opposed to Proposal No. 4.
With respect to reasons for the shareholder’s proposal seeking partial amendments to the Articles of Incorporation, the Proposing
Shareholder contends that disclosure of individual Director remuneration should be required to provide for an understanding of how
the Board of Directors assesses the challenges facing the Company and how this is reflected in Director remuneration, given thenotion that review of capital allocation serves as an urgent issue for the Company amid circumstances where the Company’s Boardof Directors has long allowed for a situation of PBR below 1x and negative EV.
In this regard, the notion that the Company’s Board of Directors has been neglecting the situation is unfounded in that we also
acknowledge the seriousness of the current situation involving low market valuation of the Company, exemplified in part by its
PBR of less than 1x. As explained in the reasons given for opposition to the shareholder’s proposal involving the purchase oftreasury shares, the Company’s Board of Directors perceives that the low market valuation is primarily attributable to diminishedbusiness profitability during the period of transformation beginning in 2020 along with a situation where the Company has not
sufficiently conveyed to investors outcomes of the transformation and details on the Company’s sustainable growth. Going forward,
we will strive to increase ROE and PER through initiatives that involve reorganizing our business portfolio, reorganizing capital
allocations, and enhancing IR and non-financial strategy. In regard to initiatives to improve PBR along with shareholder returns, theCompany released “Notice on Change in Dividend Policy” and “Action to Implement Management that is Conscious of Cost of
Capital and Stock Price” on November 7, 2023, thereby providing notification that the Company has revised its dividend policy for2024 to 2026 in terms of changing to payment, in principle, of “dividends equivalent to 20% of profit attributable to owners ofparent before amortization of goodwill or equivalent to 3% of DOE, whichever is greater.” Moreover, the Company has alreadyadopted performance-linked remuneration for Directors (excluding External Directors, Directors who are Audit and Supervisory
Committee members, and other Non-Executive Directors; hereinafter the “Executive Directors”), as was also noted by the
Proposing Shareholder. The Company accordingly provides the Executive Directors with incentives associated with improving
corporate value in seeking to facilitate greater value sharing with its shareholders. Going forward, the Company will continue toengage in initiatives toward improving its corporate value, which will entail adequately disclosing information and furnishing
explanations in accordance with laws and regulations to ensure that such circumstances are appropriately evaluated by shareholders
and the market.
At the Board of Directors meeting held on February 19, 2021, the Company passed a resolution on its policy for determining thedetails of individual remuneration, etc. for Directors, upon having received a report of the Nomination and Remuneration
Committee, with an External Director serving as its Chairperson and External Directors also comprising a majority of its
membership. Details of the resolution have been released in the Company’s Corporate Governance Report, dated March 4, 2023.
Under the policy, the Nomination and Remuneration Committee makes a report on the ratio of basic remuneration andperformance-linked remuneration of Executive Directors based on external remuneration database services and other information.
The Company’s Board of Directors then determines such remuneration within the scope of remuneration indicated in the report in amanner that respects the content of the report. For each fiscal year, individual remuneration, etc. of Directors is determined in atransparent and objective manner by the Board of Directors based on a report furnished to the Board of Directors upon deliberationby the Nomination and Remuneration Committee, based on such decision policy within the scope of maximum remuneration
resolved at a general meeting of shareholders. As for individual remuneration, etc. for Directors for the fiscal year ended December
31, 2023, the Board of Directors confirmed that the method of determining the details of remuneration, etc. and the details of
remuneration, etc. determined are consistent with the decision policy resolved by the Board of Directors and that the report from theNomination and Remuneration Committee is respected, and has determined that the details of remuneration, etc. are in line with therelevant decision policy. In regard to remuneration, etc. for Directors in each fiscal year determined in this manner, the Company
discloses information that includes total amounts of remuneration, etc. for each officer category, total amounts of remuneration, etc.
by type, and numbers of eligible officers in the business report and the annual securities report in accordance with laws andregulations.
As stated above, individual remuneration, etc. for the Company’s Directors is determined through a transparent and objective
process, which entails appropriately providing disclosure regarding Director remuneration in the business report and annual
securities report. As such, the Company deems that it adequately discloses information as necessary for shareholders and the market
to appropriately evaluate performance of the Company’s Directors and the Company’s corporate governance structure.
The Proposing Shareholder pointed out that the details of performance-linked remuneration are unclear in that it is not possible totell from the disclosed materials how the incentives for Executive Directors are linked to the interests of shareholders and it is notpossible to confirm whether or not the remuneration system “raises awareness of Executive Directors’ contribution to medium- tolong-term improvement of business performance and corporate value.” The Company’s performance-linked remuneration isdesigned to ensure alignment with shareholder interests in terms of stock price gains. This accordingly involves setting market
capitalization as the KPI every three fiscal years and providing the Company’s Executive Directors with incentives for stock pricegains achieved in the three fiscal years by paying them an amount calculated in accordance with the rate of achievement only when
the target rate of achievement of KPI has been attained. However, we do take the feedback regarding the lack of clear content very
seriously, and we accordingly intend to consider options for enabling further clarification of the details of performance-linked
remuneration going forward.
Given that the Company acknowledges that Director remuneration serves as a key aspect of corporate governance, we will persist
with our efforts to consider and implement appropriate decision-making and information disclosure in that regard going forward.

- 14 -

However, we deem that provisions requiring disclosure of individual Director remuneration need not be included in the Articles ofIncorporation on the grounds that such provisions are not suitable for inclusion in the Articles of Incorporation, which ultimately
serve as our fundamental corporate rules.
For the reasons above, the Company’s Board of Directors is opposed to the shareholder’s proposal seeking partial amendments to
the Articles of Incorporation.

- 15 -

Business Report (January 1, 2023 to December 31, 2023)
1.

Overview of the Group(1) Business for the Year Ended December 31, 2023
DIGITAL HOLDINGS, Inc. and its consolidated subsidiaries (hereinafter the “Group”) are surrounded by a businessenvironment where there are concerns regarding the impact on the Japanese economy of the rising price of goods,
mainly driven by soaring resource prices in recent years, and the impact on the domestic market of the declining
population of Japan, accelerated by its aging society with a falling birth rate in the medium- to long-term. However,dramatic technological innovations such as generative AI have further boosted the trend to realize digitaltransformation (DX) that transforms conventional products and services as well as business models by leveraging
massive amounts of data and digital technologies. In addition, we believe that “Society 5.0,” a human-centeredsociety that balances economic advancement with the resolution of social problems by a system that highly integrates
cyberspace (virtual space) and physical space (real space), as advocated by the Japanese Cabinet Office, will becomea reality, and we expect that demand for digital shift-related products and services that the Group will offer willfurther increase.
With the sights set on the vision of becoming a “true digital shift company committed to creating new value that will
be a driver for Society 5.0 as well as resolving social challenges” by 2030, the Group has set a management policy tomaximize the Group’s corporate value and cash flows by providing growth-oriented companies with uniqueframeworks that directly link to sales and profit. The Group also aims to expand its business by shifting its main
business domain from the Advertising Business, which centers on support for clients’ sales promotion, to the Digital
Shift Business, thereby achieving a target of “corporate value of JPY 1 trillion by 2030.” In fiscal 2021, the Groupset “DS Innovation 2023” as its medium-term business goal through 2023. In order to make the Digital ShiftBusiness a core business second only to the Advertising Business, we have invested intensively in the DX and IX
domains. This fiscal year, the final year of DS Innovation 2023, was a year in which the Group transformed the signs
of its past focused investment into results. To this end, we engaged in further selection and concentration in the
Digital Shift Business, set “launching Advertising Transformation (AX)” and “sustainable expansion of DX” as key
measures for this fiscal year, and implemented measures, respectively.
The details of specific measures are as follows.
Key Measures
1) Launching AX
Under DS Innovation 2023, we developed and provided multiple Industrial Transformation (IX) products andservices. Based on the know-how we accrued through these efforts, in the Group’s core Advertising
Business, we launched products and services toward AX, focusing on our AD YELL, a BNPL service foradvertising expenditures. As a result, the Group had cumulative AD YELL GMV (Gross Merchandise Value)of JPY 19,153 million for this fiscal year, with a cumulative total of 160 client companies. We also launched
STOCK YELL, a BNPL service for purchasing expenditures of goods, as one of our YELL series, and began
its full-scale operations.
2) Sustainable DX revenue expansion in the Digital Shift BusinessWe focused on acquiring leads through efforts such as strengthened coordination within the Group, primarilyin DX development and DX marketing consulting, with the goal of making the Digital Shift Business thesecond pillar of our business after the Advertising Business over the medium- to long-term. As a result, theGroup recorded gross profit of JPY 1,575 million and gross profit composition ratio of 17.8%.

As a result of the above, the Group reported operating results for the fiscal year ended December 31, 2023
(hereinafter the “current fiscal year”) with revenue of JPY 16,264 million (up 4.9% YoY), gross profit of JPY 10,948
million (up 9.3% YoY), operating profit of JPY 616 million (operating loss of JPY 354 million in the previous fiscal
year), EBIT of JPY 401 million (negative JPY 459 million in the previous fiscal year), EBITDA of JPY 2,008
million (up 82.3% YoY), and profit attributable to owners of parent of JPY 237 million (loss attributable to ownersof parent of JPY 212 million in the previous fiscal year).
SoldOut, Inc., its subsidiaries, and SIGNATE Inc. were excluded from the scope of consolidation in the second
quarter of the previous fiscal year. In order to ensure the ability to compare figures against operating results for thecurrent fiscal year, operating results for the previous fiscal year and year-on-year comparisons in the operating
results explanations are the results excluding these figures.
The full-year operating results for each business segment are as follows.

- 16 -

Digital Shift Business
Digital Shift Business consists of DX development and DX marketing consulting led by Digital Shift, Inc. and OPTIncubate Inc.; installment and deferred payment service for advertising expenditures by Vankable, Inc.; and thedevelopment of new businesses and provision of services, including industry-specific Vertical SaaS for solving
industry issues faced by various industries, led by RePharmacy, Inc., ConnectOM, Inc., and JOMYAKU, Inc.
The Digital Shift business segment posted operating results for the current fiscal year with revenue of JPY 4,538
million (down 0.5% YoY), gross profit of JPY 1,575 million (down 4.2% YoY), operating loss of JPY 819 million(operating loss of JPY 624 million in the previous fiscal year), EBIT of negative JPY 731 million (negative JPY 734
million in the previous fiscal year), and EBITDA of negative JPY 347 million (negative JPY 547 million in theprevious fiscal year).

Advertising Business
Advertising Business consists of the Internet advertising agency business, solution development and sales, etc.,
operated by OPT, Inc.
The Advertising Business segment posted operating results for the current fiscal year with revenue of JPY 8,308
million (down 1.7% YoY), gross profit of JPY 7,295 million (down 1.7% YoY), operating profit of JPY 2,157
million (down 18.5% YoY), EBIT of JPY 2,149 million (down 18.5% YoY), and EBITDA of JPY 2,340 million(down 18.2% YoY).

Financial Investment Business
Financial Investment Business consists of the investment business managed by DIGITAL HOLDINGS, Inc., Bonds
Investment Group Inc., BIG No. 1 Limited Partnership for Investment, BIG No. 2 Limited Partnership for
Investment, and OPT America, Inc., as well as BIG SX No. 1 Limited Partnership for Investment, which was formedin December 2022 to specialize in investing in start-ups that promote sustainable businesses that can transform andsolve social issues and social structures.
The Financial Investment Business segment posted operating results for the current fiscal year with revenue of JPY
3,529 million (up 36.1% YoY), gross profit of JPY 2,108 million (up 121.1% YoY), operating profit of JPY 1,945
million (up 154.7% YoY), EBIT of JPY 1,665 million (up 105.3% YoY), and EBITDA of JPY 2,603 million (up38.5% YoY).
The Company discloses IRR (Internal Rate of Return) to enhance the transparency of investment returns.
As of the end of the current fiscal year, the after-tax IRR decreased by 0.2% from the end of the previous fiscal year
to 18.8%. The calculation of IRR is now applied to stocks invested in by the Financial Investment Business since
fiscal 2013, and the details of its calculation method are disclosed in the footnote. AUM (Assets Under Management)
increased by 3.9% from the end of the previous fiscal year to JPY 14,362 million.

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

Subject to: Securities invested in by the Financial Investment Business from 2013 through December
31, 2023-

The reference date for calculation: December 31, 2023-

Method:1.

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

2.

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

3.

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

4.

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

- 17 -

5.

-

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

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

Shares of affiliates: Stated at book valueii)

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

Notes or securities of which investment amount is small: Acquisition cost-

Listed companies’ shares: Closing price at the end of reporting period-

Securities involved in financing in the recent period: Based on the value of relevant financing-

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

Management costs of DIGITAL HOLDINGS, Inc.
In the management division of the Company, selling, general and administrative expenses for the current fiscal year
decreased by 15.6% from the previous fiscal year to JPY 2,658 million, mainly due to the recording of expenses
associated with the sale of SoldOut, Inc., which was the Company’s subsidiary, in the previous fiscal year.

- 18 -

(2) Issues to be Addressed
The Group’s purpose is “to kindle an Industrial Transformation and solve Social Issues through New Value
Creation.” Under this purpose, the Group aims to realize a sustainable society as it takes on the challenges ofcreating new value, by actualizing Industrial Transformation (IX) through a digital shift and providing “uniqueframeworks” that directly link to the development of growth-oriented companies. In this context, the Group changed
its trade name in 2020 and titled the period from the fiscal year ended December 31, 2021 to the fiscal year ended
December 31, 2023 “DS Innovation 2023,” reorganizing its business portfolio and taking on the challenge ofbusiness transformation. To realize IX, in addition to sustainable growth in existing businesses, we are promoting
revenue increases over the medium- to long-term.
In order to achieve its sustainable growth and IX, the Group will focus on issues to be addressed as described in 1)
through 4) below. The Group will also establish a sustainable profit structure by improving profitability andreinforcing its organizational foundation, and it will strive to continue to increase its corporate value.
1. Enhance the profitability of existing businesses
The demand for “digital transformation (DX)” in Japan has been on the rise, and DX is driving businesscreation and corporate growth, especially among large corporations. Against this backdrop, the competitionin the Group’s business among DX-related services has been increasingly fierce as they are offered by avariety of companies, such as leading IT vendors and consulting firms. Under these circumstances, theGroup is utilizing its advertising supports, polished over the course of many years; its base of diverse
customers and partners, cultivated through its advertising supports; and its marketing know-how to develop
and offer DX solutions, thereby engaging in ongoing business with existing customers as well as active
development of new customers. Furthermore, the Group is eliminating and consolidating its consolidated
subsidiaries and accelerating its integrated advertising and DX proposals through strengthened sales
collaboration to contribute to the business growth of customers. At the same time, it is striving to cut thecosts of redundant and other functions within the Group, promote more efficient Group management, andimprove its sustainable profitability.
2. Realize high growth and profitability in Advertising Transformation (AX)To achieve the Group’s purpose, in recent years we have diversified our revenue opportunities by using newrevenue models, worked to expand into new domains, and actively invested in growth. As a result of these
efforts, we are leveraging the strengths of our original business to launch and rapidly expand AX. The
Group will further invest management resources in AX as it aims to achieve profitability as soon as possible.
3. Achieve optimal capital allocation
The Group has set the achievement of ROE of 10% on a constant basis as a key objective by making
decisions with a focus on investment efficiency in order to improve its profitability and capital efficiency.
To this end, the Group intends to give consideration to shareholder return policies such as repurchase oftreasury shares in a flexible and agile manner taking into account the level of internal reserves, while
improving the profitability of its core businesses.
4. Create a human resource foundation
In order to sustainably increase its corporate value, the Group believes that it is vitally significant that it
develops human resources who can function autonomously and creates a framework that enables them towork successfully over the long term. To achieve this, we will implement systematic human resource
development programs such as training to improve the skills of employees and next-generation management
personnel development programs. At the same time, we will strive to design flexible working systems andprovide working environments in which each and every employee can fully leverage their abilities, create
diverse career paths, and work autonomously. The Group is also working to create and establish working
environments and human resource systems in which employees can easily thrive over the medium- to longterm.
(3) Capital Expenditure
There were no significant capital expenditures.
(4) Financing
There are no special matters to be noted.
(5) Significant Reorganizations and Other Such Events
There are no special matters to be noted.

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(6) Assets, net sales and income(Yen in millions,
unless otherwise stated)
Revenue(Presented as net sales up to FY2021)
Ordinary profit (loss)

FY2020

FY2021

FY2022

FY202388,76898,515

16,924

16,264

4,358

14,662(439)

378

Profit attributable toowners of parent

3,750

10,231

5,719

237

Earnings per share- basic (Yen)

167.86473.28299.29

13.61

Total assets

71,43469,72855,96350,283

Net assets

40,01840,93036,24533,892(Notes) 1. Earnings per share is calculated based on the average number of shares issued (total shares issued excluding treasury
shares) during each fiscal year.
2. The Accounting Standard for Revenue Recognition, etc. has been applied from the beginning of the 29th fiscal term, andthe key management indicators, etc. for and after the 29th fiscal term are those after the application of this accounting
standard, etc.

(7) Status of Parent Company and Principal Subsidiaries (As of December 31, 2023)
1) Status of Parent Company
Not applicable2) Status of Principal Subsidiaries
Company Name

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

Major businesses

OPT, Inc.

100

100.0%

Internet advertising agency business

Digital Shift, Inc.

100

100.0%

Support businesses related to digital shift

OPT America, Inc.

2,405

100.0%

Financial investment business(Notes) 1. The Company has 15 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, 2023)
The Group is comprised of DIGITAL HOLDINGS, Inc. and 15 consolidated subsidiaries as of the end of the
fiscal year ended December 31, 2023. It operates the Digital Shift Business segment, the Advertising Businesssegment, and the Financial Investment Business segment. The Digital Shift Business provides DX
development, DX marketing consulting, and the installment and deferred payment service for advertisingexpenditures. The Advertising Business is engaged in the Internet advertising agency business and related
solution development and sales. The Financial Investment Business invests in venture capital, manages funds,
and supports the management of investee companies.
Segment
Digital Shift Business
Advertising Business
Financial Investment Business

Major businesses• DX development, DX marketing consulting• Installment and deferred payment service for advertising expenditures, etc.
• Internet advertising agency business• Solution development and sales, etc.
• Venture capital investment• Fund management• Management support for investee companies, etc.

- 20 -

(9) Major Offices (As of December 31, 2023)
1) Main Office
OfficeHead Office

Address
Chiyoda-ku, Tokyo

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

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

(10) Workforce (As of December 31, 2023)
Segment

Number of Employees

Digital Shift Business
Advertising BusinessChange from Dec. 31, 2022

275

-22

653

+38

Financial Investment Business

5–Company-wide (common)

98

-7

1,031

+9

Total

(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. The number of employees described as “Company-wide (common)” is the number of employees belonging toadministrative divisions that cannot be classified into specific businesses.

(11) Main Lenders (As of December 31, 2023)
Amount borrowed(Yen in millions)
3,000

LenderSumitomo Mitsui Banking Corporation
Mizuho Bank, Ltd.

1,000

MUFG Bank, Ltd.

1,000(12) Other Significant Matters Concerning the GroupNot applicable- 21 -

2. Status of the Company(1) Matters Concerning Shares (As of December 31, 2023)
1) Total Number of Shares Authorized to Be Issued
86,630,400 shares2) Total Number of Shares Issued
17,459,907 shares
3) Number of Shareholders
6,3994) Major Shareholders (Top 10)
Number of Shares Held
(Shares)
4,520,200
1,242,900
911,200
885,000
755,800
590,000
522,900
476,800
400,800
277,400

Shareholder
HIBC Co., Ltd.
The Master Trust Bank of Japan, Ltd. (Trust account)
Tomohito Ebine
Atsushi Nouchi
Mynavi Corporation
LIM JAPAN EVENT MASTER FUND
内藤征吾
Custody Bank of Japan, Ltd. (Trust account)
Time and Space, Ltd.
平野秀和

Ownership of Shares (%)
25.88%
7.11%
5.21%
5.06%
4.32%
3.37%
2.99%
2.73%
2.29%
1.58%

(Notes) 1. The Company does not hold treasury shares.
2. The figures are rounded off to two decimal places.
3. HIBC Co., Ltd., is an asset management company wholly owned by the Chairperson of the Company, Noboru Hachimine.
4. The Chairperson of the Company, Noboru Hachimine, holds 5,000 shares of the Company.
5. Time and Space, Ltd. is an asset management company wholly owned by the President and Group CEO of the Company,
Atsushi Nouchi.

5) Other Significant Matters Concerning Shares
Due to the cancellation of all treasury shares on November 30, 2023, the total number of shares issued
decreased by 6,357,793 shares from the end of the previous fiscal year.

- 22 -

(2) Matters Concerning Share Options (As of December 31, 2023)
1) Share Options Held by Officers of the Company at Fiscal Year-End That Have Been Delivered as
Remuneration
9th series share options
Date of resolution on issuance
Number of share options

February 13, 2023
2,200 units
Common shares:

Class and number of shares underlying share options
Amount to be paid in for share options

JPY 100 per unit
JPY 117,900 per unit
(JPY 1,179 per share)

Value of property to be contributed upon exercise of share options
Exercise period
Conditions for exercise

Status of holdingsof share options byofficers

Directors (excluding
Directors who are
Audit andSupervisory
Committee
members)

220,000 shares(100 shares per unit)

From March 1, 2023 to March 31, 2027
See (Note).
Directors(excluding
External Directors)
External Directors

Directors who are Audit and Supervisory
Committee members

Number of share options:
Number of underlying shares:
Number of holders:Number of share options:
Number of underlying shares:
Number of holders:Number of share options:
Number of underlying shares:
Number of holders:

2,200 units
220,000 shares
2 persons– units– shares– persons– units– shares– persons(Note) The conditions for exercise of the 9th series share options is as follows.
(1) During the period from the allotment date of the share options until the end of the exercise period, if the average closing
price of the Company’s common shares in regular trading over one month (21 trading days including the subject date) on
the Financial Instruments Exchange is less than 50% of the exercise price at any time, the holders of the share options must
exercise all of the remaining share options at the exercise price by the end of the exercise period. However, this does not
apply in the following cases.
1) It is found that the information disclosed by the Company includes material false statements.
2) It is found that the Company did not appropriately disclose material facts that are required to be disclosed in accordancewith laws and regulations and the rules of the Financial Instruments Exchange.
3) There has been a material change in the circumstances assumed on the issuance date of the share options, such as
delisting of the Company’s shares or bankruptcy.
4) The Company has committed an act that is objectively recognized as seriously damaging the trust of holders of the shareoptions.
(2) Heirs of holders of share options are not permitted to exercise the share options.
(3) The share options may not be exercised if, in so doing, the total number of shares issued by the Company at that time would
exceed the total number of authorized shares.
(4) The share options may not be exercised in fractions of less than one unit.
(5) Other conditions shall be stipulated in the “share option allocation agreement” to be concluded between the Company andthe holders of share options.

- 23 -

2)

Share Options Delivered During the Current Fiscal Year to Employees, etc. as Remuneration
9th series share options

Date of resolution on issuance
Number of share options

February 13, 2023
1,260 units
Common shares:

Class and number of shares underlying share options
Amount to be paid in for share options

JPY 100 per unit
JPY 117,900 per unit
(JPY 1,179 per share)

Value of property to be contributed upon exercise of share options
Exercise period
Conditions for exercise

From March 1, 2023 to March 31, 2027
See (Note).
Employees of the Company

Status of delivery toemployees, etc.

126,000 shares(100 shares per unit)

Officers and employees ofsubsidiaries

Number of share options:
Number of underlying shares:
Number of eligible holders:Number of share options:
Number of underlying shares:
Number of eligible holders:

1,000 units
100,000 shares
3 persons
260 units
26,000 shares
3 persons(Note) The conditions for exercise of the 9th series share options is as follows.
(1) During the period from the allotment date of the share options until the end of the exercise period, if the average closing
price of the Company’s common shares in regular trading over one month (21 trading days including the subject date) on
the Financial Instruments Exchange is less than 50% of the exercise price at any time, the holders of the share options must
exercise all of the remaining share options at the exercise price by the end of the exercise period. However, this does not
apply in the following cases.
1) It is found that the information disclosed by the Company includes material false statements.
2) It is found that the Company did not appropriately disclose material facts that are required to be disclosed in accordancewith laws and regulations and the rules of the Financial Instruments Exchange.
3) There has been a material change in the circumstances assumed on the issuance date of the share options, such as
delisting of the Company’s shares or bankruptcy.
4) The Company has committed an act that is objectively recognized as seriously damaging the trust of holders of the shareoptions.
(2) Heirs of holders of share options are not permitted to exercise the share options.
(3) The share options may not be exercised if, in so doing, the total number of shares issued by the Company at that time would
exceed the total number of authorized shares.
(4) The share options may not be exercised in fractions of less than one unit.
(5) Other conditions shall be stipulated in the “share option allocation agreement” to be concluded between the Company andthe holders of share options.

- 24 -

(3) Matters Concerning Corporate Officers
1) Matters Concerning Directors (As of December 31, 2023)
Position in Company

Name

Area of Responsibility andSignificant Other Positions
Chairperson and Director at Digital Shift, Inc.
Representative Director at Bonds Investment
Group Inc.
Director at Re:teigi, Inc.
Director at RePharmacy, Inc.

Chairperson

Noboru Hachimine

President and Group CEO

Atsushi Nouchi

Director and Group COO

Daisuke Kanazawa

Director

Tomoyuki Mizutani

Director

Koji Yanagisawa

Director

Yasuhiro Ogino

Director

Mariko Tokioka

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

Yuki Okabe

Director (Audit and Supervisory
Committee member)

Fumiyuki Shinomiya

Auditor at Vankable, Inc.

Director (Audit and Supervisory
Committee member)

Masahiro Yamamoto

Certified Public Accountant
Auditor at OPT Incubate Inc.
Outside Audit & Supervisory Board Member at
Nissui Corporation

Director (Audit and Supervisory
Committee member)

Ryoichi Kagizaki

LawyerDirector, Executive Vice President & CFO at
ZOZO, Inc.
External Director at COLOPL, Inc.
Director and CFO at ANDPAD Inc.
Founder & CEO of East Meet East, Inc.
External Director at Asteria Corporation
Certified Public Accountant
Auditor at OPT, Inc.
Auditor at Digital Shift, Inc.
Auditor at Re:teigi, Inc.
Auditor at RePharmacy, Inc.

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

2) Outline of liability limitation agreement
Pursuant to the provisions of Article 427, paragraph 1 of the Companies Act and Article 32, paragraph 2 of
the Company’s Articles of Incorporation, the Company and Directors (excluding Executive Directors, etc.)
have entered into agreements limiting their liability for damages under Article 423, paragraph 1 of theCompanies Act. The maximum amount of liability for damages under the said agreement is the statutory
prescribed minimum amount.
3) Outline of Directors and Officers liability insurance contract, etc.
The Company has concluded Directors and Officers liability insurance contracts as provided for in Article
430-3, paragraph 1 of the Companies Act with an insurance company. The insured under such insurance
contracts are Directors and managerial employees of the Company, and Directors, Auditors, and managerial
employees of the Company’s subsidiaries. The premiums of the insurance contracts are borne entirely by theCompany and the insured do not bear any of the premiums. The insurance contracts cover losses that may
arise from an insured’s assumption of liability incurred in the course of the performance of duties, or receipt- 25 -

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

- 26 -

e. Matters related to decisions on the details of individual remuneration, etc. for Directors
Individual remuneration, etc. of Directors is deliberated by the Nomination and Remuneration Committee,
a voluntary body chaired by an External Director, and is resolved by the Board of Directors. Remuneration
for Directors who are Audit and Supervisory Committee members is determined through consultation of
Directors who are Audit and Supervisory Committee members with the consent of all members.
B. Total amount of remuneration, etc. for the current fiscal year
Category
Directors (excluding
those who are Audit andSupervisory Committee
members)(External Directors’share thereof)
Directors who are Audit
and Supervisory
Committee members(External Directors’share thereof)

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

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

Number of
eligible officers(Persons)

145
(38)

145
(38)

–
(–)

–
(–)

7
(4)

28
(28)

28
(28)

–
(–)

–
(–)

4
(4)

(Notes) 1. Remuneration, etc. for Directors does not include salaries earned as employees by Directors who concurrently holdemployee positions.
2. At the Annual General Meeting of Shareholders held on March 25, 2016, shareholders passed a resolution to set the
remuneration for Directors (excluding those who are Audit and Supervisory Committee members) at up to JPY 200 million
per year. The number of Directors (excluding those who are Audit and Supervisory Committee members) as of theconclusion of the said General Meeting of Shareholders is five.
3. At the Annual General Meeting of Shareholders held on March 27, 2020, shareholders passed a resolution to set the
remuneration for Directors who are Audit and Supervisory Committee members at up to JPY 50 million per year. The
number of Directors who are Audit and Supervisory Committee members as of the conclusion of the said General Meetingof Shareholders is four.
4. At the Annual General Meeting of Shareholders held on March 26, 2021, shareholders passed a resolution to set theperformance-linked remuneration for Directors who are Executive Directors at up to JPY 600 million per year. The number
of Directors who are Executive Directors as of the conclusion of the said General Meeting of Shareholders is three.

- 27 -

5) Matters Concerning External Directors
Position in the Company

Director

Name

Significant Concurrent
Positions at Other Entities

Tomoyuki
Mizutani

Director

Koji
Yanagisawa

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

Director

Yasuhiro
Ogino

Director and CFO at
ANDPAD Inc.

Director

MarikoTokiokaFounder & CEO of East
Meet East, Inc.
External Director at Asteria
Corporation

Yuki
Okabe

CPA
Auditor at OPT, Inc.
Auditor at Digital Shift, Inc.
Auditor at Re:teigi, Inc.
Auditor at RePharmacy, Inc.

Fumiyuki
Shinomiya

Auditor at Vankable, Inc.

Director(Audit and Supervisory
Committee member)

Masahiro
Yamamoto

CPA
Auditor at OPT Incubate
Inc.
Outside Audit &Supervisory Board Member
at Nissui Corporation

Director(Audit and Supervisory
Committee member)

RyoichiKagizaki

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

Director(Audit and Supervisory
Committee member)

Main Activities at the Company
Mr. Mizutani attended 16 of 17 Board meetings held in
2023. He appropriately spoke up at meetings to ensure
the validity and appropriateness of the Board’s decisionmaking from an objective and neutral standpoint
independent from management and fulfilled his role
appropriately, capitalizing on his wealth of experienceand long achievement in corporate management.
Mr. Yanagisawa attended 16 of 17 Board meetings heldin 2023. He appropriately spoke up at meetings to ensure
the validity and appropriateness of the Board’s decisionmaking from an objective and neutral standpoint
independent from management and fulfilled his role
appropriately, capitalizing on his experience as CFO andothers at a growing company as well as broad insight inoverall business administration centered on accounting,finance, IR, legal affairs and corporate governance.
Mr. Ogino attended all 17 Board meetings held in 2023.
He appropriately spoke up at meetings to ensure thevalidity and appropriateness of the Board’s decisionmaking from an objective and neutral standpoint
independent from management and fulfilled his role
appropriately, capitalizing on his experience as CFO andothers at growing companies as well as broad insight inoverall business administration centered on businessdevelopment and M&A.
Ms. Tokioka attended all 17 Board meetings held in 2023.
She appropriately spoke up at meetings to ensure the validity
and appropriateness of the Board’s decision-making from an
objective and neutral standpoint independent frommanagement and fulfilled her role appropriately, capitalizing
on her abundant experience and broad knowledge, including
her entrepreneurial experience in the SaaS field, global
business management, and diversity management, as thefounder and CEO of an IT company based in the U.S.
Ms. Okabe attended all 17 Board meetings and all 13
Audit and Supervisory Committee meetings held in 2023.
She appropriately provided valuable perspectives on
agenda items and other discussions and fulfilled her role
appropriately, capitalizing on her career as a CPA as well
as experience in serving as an auditor at multiple listedcompanies.
Mr. Shinomiya attended 16 of 17 Board meetings and 12
of 13 Audit and Supervisory Committee meetings held in
2023. He appropriately provided valuable perspectives on
agenda items and other discussions and fulfilled his role
appropriately, capitalizing on his insight and wealth ofdomestic and international experience, mainly in thefinancial sector.
Mr. Yamamoto attended 16 of 17 Board meetings and 12
of 13 Audit and Supervisory Committee meetings held in
2023. He appropriately provided valuable perspectives on
agenda items and other discussions and fulfilled his role
appropriately, capitalizing on his career as a CPA as well
as experience in supporting numerous companies as a
Representative Partner at audit firms.
Mr. Kagizaki attended all 17 Board meetings and all 13
Audit and Supervisory Committee meetings held in 2023.
He appropriately provided valuable perspectives on
agenda items and other discussions and fulfilled his role
appropriately from lawyer’s perspectives.

(Notes) 1. The Company’s relationships with ZOZO, Inc. and COLOPL, Inc., two companies at which Director Mr. Yanagisawa
holds positions, do not warrant disclosure.
2. The Company’s relationship with ANDPAD Inc., at which Director Mr. Ogino holds a position, does not warrant
disclosure.
3. The Company’s relationships with East Meet East, Inc. and Asteria Corporation, two companies at which Director Ms.

- 28 -

Tokioka holds positions, do not warrant disclosure.
4. OPT, Inc., Digital Shift, Inc., Re:teigi, Inc., and RePharmacy, Inc., at which Director and Chairperson of the Audit andSupervisory Committee (full-time) Ms. Okabe holds positions, are subsidiaries of the Company.
5. Vankable, Inc., at which Director and Audit and Supervisory Committee member Mr. Shinomiya holds a position, is thesubsidiary of the Company.
6. OPT Incubate Inc., at which Director and Audit and Supervisory Committee member Mr. Yamamoto holds a position, isthe subsidiary of the Company. The Company’s relationship with Nissui Corporation, at which Mr. Yamamoto holds a
position, does not warrant disclosure.

(4) Accounting Auditor
1) Name KPMG AZSA LLC
2) Amount of Compensation(Yen in millions)52
Accounting auditor’s compensation for fiscal year ended December 31, 2023
63
Total monetary amount payable to the Accounting Auditor by the Company and its subsidiaries(Notes) 1. The audit agreement between the Company and its Accounting Auditor does not explicitly distinguish thecompensation for audit services performed pursuant to the Companies Act from the compensation for audit
services performed pursuant to the Financial Instruments and Exchange Act. Given disaggregating compensation
between the two types of audit services is not feasible, the Company is disclosing the above total amount as its
Accounting Auditor’s compensation for the fiscal year ended December 31, 2023.
2. The Audit and Supervisory Committee approved the Accounting Auditor’s compensation after performing
required verification of the appropriateness of the Accounting Auditor’s audit plan, audit performance and basis
for calculating estimates of its compensation.

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

- 29 -

3.

The Systems and Policies of the Group(1) Systems for Ensuring the Appropriateness of Business Operation
1) Controls to Ensure the Company and Its Subsidiaries’ Directors and Employees Comply with Laws andRegulations, and Articles of Incorporation in Executing Their Duties
Under the directions and orders of those responsible for Group compliance, the division responsible for theCompany’s compliance conducts training sessions and prepares and distributes manuals in accordance withthe “Group Compliance Rules,” working to improve the compliance knowledge of the Directors andemployees of the Company and its subsidiaries, and to cultivate a mindset of respect for compliance. Basedon the “Group Internal Audit Rules,” the division responsible for the Company’s internal audit conducts
regular audits of the execution of duties and confirms that the execution of duties complies with laws andregulations, and the Articles of Incorporation.
2) Systems Related to Storage 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, store and manage documents and electronic records in accordance with the “Group
Authority Rules,” “Group Confidentiality Protection Rules” and “Group Document Management Rules.”The Company’s subsidiaries keep such information readily accessible if requested to do so by theCompany’s Audit and Supervisory Committee members or their own Auditors.
3) Rules and Other Systems Related to Management of the Company and Its Subsidiaries’ Risk of Losses
Based on the “Group Risk Management Basic Guidelines” and “Group Risk Management Rules”
established by the Board of Directors, the Company operates the Group Risk Management Committee
composed of the Company’s officers, mainly those responsible for Group risk. The Group Risk
Management Committee selects important risks, prepares annual response plans and conducts monitoring,and reports the status of Group risk management, including the results of such monitoring, to the Board of
Directors on an as-needed basis. The Company’s subsidiaries have implemented their own controls for
managing risks, including the risk of losses, to the extent needed by their scale and attributes in accordancewith the “Group Risk Management Rules.”4) Systems to Ensure the Company and Its Subsidiaries’ Directors Execute Their Duties Effectively
The Company and its subsidiaries prepare business plans in accordance with the “Group Finance andAccounting Rules,” explicitly set operating performance targets on a company-wide basis and clarify how
they evaluate performance. They pursue improvement in operating efficiency by clearly defining everyorganizational division’s responsibilities with respect to operating performance. The Company and its
subsidiaries also analyze and make decisions on significant management matters in accordance with the“Group Authority Rules,” working to ensure operating efficiency.
5) Systems to Ensure the Appropriateness of Business Operation of the Group Consisting of the Company
and Its Subsidiaries
To ensure the Group’s appropriateness of business operation, the Company supervises its subsidiaries as
required based on their respective circumstances in accordance with the “Group Authority Rules.”Additionally, in the project manager meetings held monthly, management teams of the Company and eachsubsidiary promote information-sharing and effective communication among the Group and alignment of
the “Group Management Policies” by exchanging information on important matters affecting the Group asa whole.
6) Matters Related to Employees Requested by Audit and Supervisory Committee of the Company to Assist
with Its Duties
When the Audit and Supervisory Committee requests employees to assist executing its duties, theCompany assigns the needed employees to the Audit and Supervisory Committee.
7) Matters Related to the Independence from the Directors and Ensuring the Effectiveness of Instructions by
the Directors of the Employees Assigned to Audit and Supervisory Committee
The Company respects the Audit and Supervisory Committee’s request on assignment of employees toassist the Audit and Supervisory Committee. The employees that have been ordered to perform auditing
tasks by the Audit and Supervisory Committee will not obey to orders or directions from the Company’s- 30 -

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

- 31 -

(2) Overview of Execution Status of Systems to Ensure Appropriateness of Business Operation
1) Execution of Directors’ Duties
In the fiscal year ended December 31, 2023, the Company held Board of Directors meetings seventeen (17)times and made management decisions. The Board of Directors instituted Board of Directors Rules andother internal rules to ensure that Directors act in accordance with laws and regulations, the Company’s
Articles of Incorporation.
2) Execution of Duties by Audit and Supervisory Committee Members
In addition to conducting audits pursuant to audit plans formulated at Audit and Supervisory Committee
meetings, Audit and Supervisory Committee members oversee the execution of duties by Directors(excluding Directors who are Audit and Supervisory Committee members) through such means as
attending important meetings, including Board of Directors meetings, and regularly exchanging
information with the Accounting Auditor and the division responsible for the Company’s internal audit.
3) Risk Management and Compliance
The Company works to strengthen the risk management system to reduce risk, facilitate risk prevention,and take prompt action should a risk materialize, and in addition to establishing the “Group Risk
Management Basic Guidelines” and the “Group Risk Management Rules,” it has established the Group
Risk Management Committee. Furthermore, the Company works to heighten awareness among the
Directors and employees of the Company and its subsidiaries by creating the “Group Compliance Basic
Policy” and the “Group Compliance Rules,” establishing the Group Compliance Committee, and getting
division responsible for the Company’s compliance to prepare manuals and guidelines, and plan, conduct
and administrate trainings.
(3) Policy for Determination of Dividends from Retained Earnings
The Company seeks to internally retain earnings to fund investments, including business and human-resource
investments needed to strengthen its management team and improve profitability in pursuit of sustainably
growing its corporate value. As its dividend policy for the four-year period from the fiscal year ended
December 31, 2023 to the fiscal year ending December 31, 2026, the final year of the next medium-termbusiness plan, which covers the period from January 2024 to December 2026, the Company, in principle, aims
to adopt dividends equivalent to 20% of profit attributable to owners of parent before amortization of goodwill
or equivalent to 3% of DOE (dividend on equity: total annual dividends/shareholders’ equity×100), whicheveris greater.
For the fiscal year ended December 31, 2023, the Company’s Board of Directors passed a resolution
authorizing a dividend of JPY 45.00 per share on February 13, 2024, adopting “3% of DOE,” based on
operating results for the fiscal year ended December 31, 2023. Furthermore, as announced in the “NoticeRegarding 30th Anniversary Commemorative Dividend (Special Dividend)” dated August 7, 2023, theCompany will celebrate the 30th anniversary of its foundation in March 2024. The Company would like toexpress its sincere gratitude to its shareholders and all of its stakeholders, without whose support this would
not have been possible. As an expression of its gratitude for the support of its shareholders, to commemorate
the Company’s 30th anniversary, the Company will pay a commemorative dividend of JPY 30.00 per share, in
addition to its ordinary dividends. The total dividends per share for the fiscal year ended December 31, 2023
will be JPY 75.00.
Monetary values presented in this Business Report are rounded down to the nearest whole unit in which
they are presented; percentages and other numbers are rounded off to one decimal place.

- 32 -

Consolidated balance sheet(As of December 31, 2023)
Account
AssetsCurrent assets
Cash and deposits
Accounts receivable-trade
Contract assets
Operational investment securities
Inventories
Accounts receivable - other
Other
Allowance for doubtful accounts

Amount40,49818,860
7,994
195
5,552
4
5,510
2,563
(183)

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

Noncurrent liabilities
Long-term borrowings
Deferred tax liabilities
Asset retirement obligations
Total liabilities
Net assets
Intangible assets
971
Shareholders’ equity
491
Goodwill
Share capital
480
Other
Capital surplus
Retained earnings
Investments and other assets
8,597
Accumulated other comprehensive income
7,848
Investment securities
Valuation difference on available-for299
Leasehold and guarantee deposits
sale securities
Deferred tax assets
444
Foreign currency translation
adjustment
Other
4
Share options
Non-controlling interests
Total net assets
Total assets
50,283
Total liabilities and net assets(Note) The amounts presented above are rounded down to the nearest whole million yen.
Noncurrent assets
Property, plant and equipment
Buildings and structures
Other

9,785
216
138
77

- 33 -(Yen in millions)
Amount11,794
7,898
1,000
39
38
372
2,445
4,596
4,000
423
173
16,391
26,0988,212
3,843
14,043
3,229
1,356
1,872
0
4,563
33,89250,283

Consolidated statement of income(From January 1, 2023 to December 31, 2023)(Yen in millions)
Account

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

- 34 -

16,264
5,316
10,948
10,332
616
3
6
11
0
231
4

245
29
1
6
206
48
0
244
267

9

247
378

275

262
390
512
121
359
237

Consolidated statement of changes in net assets(From January 1, 2023 to December 31, 2023)(Yen in millions)Shareholders’ equity

Balance at beginning of year
Changes of items during theperiodDividends of surplus
Profit attributable toowners of parent
Cancellation of treasury
sharesNet changes of items otherthan shareholders’ equity
Total changes of items during
the period
Balance at end of year

Share capital

Capital surplus

Retained earnings

Treasury shares

8,212

3,843

23,674(8,698)

Total shareholders’equity27,031(1,170)(1,170)237

237(8,698)

8,698

―

―

―

(9,631)

8,698

(932)

8,212

3,843

14,043―26,098

Accumulated other comprehensive income
Total
Valuation
Foreign currency accumulateddifference ontranslation
otheravailable-for-saleadjustment
comprehensive
securities
incomeBalance at beginning of year
1,389
1,409
2,799
Changes of items during theperiodDividends from surplus
Profit attributable toowners of parent
Cancellation of treasury
sharesNet changes of items other
(32)
462
429
than shareholders’ equity
Total changes of items during
(32)
462
429
the period
Balance at end of year
1,356
1,872
3,229

Share options(Note) The amounts presented above are rounded down to the nearest whole million yen.

- 35 -―

Non-controlling
Total net assetsinterests
6,414

36,245(1,170)237―

0(1,850)(1,420)0(1,850)(2,353)0

4,563

33,892

Notes to Consolidated Financial Statements
1. Significant matters that form the basis of preparing consolidated financial statements:(1) Scope of consolidation
1) Status of consolidated subsidiaries• Number of consolidated subsidiaries: 15 consolidated subsidiaries• Names of consolidated subsidiaries
OPT, Inc.
ConnectOM, Inc.
Bonds Investment Group Inc.
BIG No. 1 Limited Partnership for Investment
BIG No. 2 Limited Partnership for Investment
OPT Incubate Inc.
OPT China Limited
OPT Shenzhen (China)
OPT America, Inc.
Digital Shift, Inc.
Re:teigi, Inc.
RePharmacy, Inc.
Vankable, Inc.
JOMYAKU, Inc.
BIG SX No. 1 Limited Partnership for Investment
2) Status of major non-consolidated subsidiaries
Not applicable(2) Application of equity method accounting
1) Status of equity-method affiliates• Number of equity-method affiliates: Not applicable
PharmaShift Co., Ltd. was excluded from the scope of equity method accounting because of share transfer
in the fiscal year ended December 31, 2023.
2) Status of major non-consolidated subsidiaries and affiliates not subject to the equity method• Name of non-consolidated subsidiaries and affiliates in this categoryNon-consolidated subsidiary: Not applicable
Affiliates: Not applicable(3) Fiscal years of consolidated subsidiaries
Consolidated subsidiaries have the same fiscal year-end as the consolidated closing date.

- 36 -

(4) Matters on accounting policies
1) Valuation standards and methods for significant assets
A. Securities
Shares of affiliates
Stated at cost using the moving-average method.
Available-for-sale securities (including operational investment securities)• Securities other than shares, etc. that do not have a market price:
Stated at fair value (The related valuation differences are directly debited or credited to the net assets andthe cost of securities sold is calculated using the moving average method).
• Shares, etc. that do not have a market price:
Stated at cost using the moving-average method.
• Investment in limited partnership for investment:
Stated at an amount calculated using the method where the amount equivalent to the Company’s equity
interests in the partnership is added to or subtracted from the partnership’s gains or losses based on themost recent financial statements available.
B. Inventories• Work in process:Mainly stated at cost using the FIFO method. (The balance sheet value is calculated by writing down thebook value based on decreased profitability.)• Supplies:
Mainly stated at cost using the specific cost method. (The balance sheet value is calculated by writing
down the book value based on decreased profitability.)2) Depreciation/amortization method for significant depreciable/amortizable assets
A. Property, plant and equipment (excluding leased assets)
Mainly subject to the declining-balance method.
However, buildings (excluding equipment attached to buildings) acquired on or after April 1, 1998 andequipment attached to buildings and structures acquired on or after April 1, 2016 are subject to the straightline method.
The straight-line method is adopted by overseas consolidated subsidiaries. Primary useful lives are as
indicated below:
Buildings and structures:
3 to 18 years.
Other:
4 to 15 years.
B. Intangible assets (excluding leased assets)
Subject to the straight-line method.
Software for internal use is subject to the straight-line method based on the period available for internal use(mainly, five years).
C. Leased assets• Leased assets from non-ownership-transfer finance lease transactions:
Subject to the straight-line method where the lease term is the useful life, and the residual value is theguaranteed residual value if the relevant lease agreement stipulates residual value guarantee, or otherwise,
residual value is zero.
3) Standards for recognition of significant allowances
A. Allowance for doubtful accounts
To prepare for losses from receivables, uncollectible amounts are estimated and recognized, for ordinary
receivables, by the actual bad debt ratio based on losses in the past, or for doubtful receivables and othercertain receivables, by taking into consideration the collectability of individual receivable accounts.
B. Provision for bonuses
In terms of provision for bonuses, the amount accrued in the fiscal year for the estimated payout toemployees is recognized to prepare for payments of bonuses to employees.

- 37 -

4) Standards for recognition of significant revenue and expenses
Revenue recognition for each of the major categories of revenue is as follows:
A. Contracted development services
The Company provides contracted development services for the purpose of supporting customers’ DX,
etc., and is obligated to produce and deliver deliverables such as software based on customer
specifications.
Performance obligation is satisfied as the development work progresses, and revenue is recognized over acertain period if the degree of progress in the satisfaction of such performance obligation can be reasonably
measured.
However, when the term from the transaction commencement date to the point when the performanceobligation is expected to be fully satisfied is very short, revenue is recognized when the deliverables are
accepted by a customer.
B. Advertisement-related services
In the programmatic advertising and affiliate services, the Company has performance obligations to act as
an intermediary for placing advertisements and to optimize the placement and distribution ofadvertisements to achieve the advertising results expected by customers.
Performance obligation is satisfied when the results from distribution of advertisements are achieved inaccordance with the arrangement with the customer, and revenue is recognized on a volume basis based on
the number of results achieved.
The Company does not control the goods or services transferred to the advertisers in the case ofintermediation of advertising space and management agency services in the case of programmatic
advertising, which the Company determines to fall under agent transaction. For such transactions, revenue
is recognized at the net amount of the amount received in exchange for services provided by the other party
less the amount paid to the other party concerned.
The Company also enters into certain transactions in which it has an obligation to produce and deliver
advertising productions. For these transactions, revenue is recognized at the time the performanceobligation is satisfied upon fulfillment of delivery to a customer.
C. Financial investment services
The Group performs operational investment for the purpose of earning capital gains of venture companies.
In funds in which the Group participates as a limited liability partner, the Group contributes the amountpromised to be invested based on the partnership agreement, and for funds managed by the Group, theamount promised to be invested for which contributions have been received is managed and operated inaccordance with the partnership agreement.
Revenue is recognized at the time when operational investment securities held directly by the Company
and investment targets held through funds are sold.
As consideration for the revenue recognized by the Group is received generally within one year from thesatisfaction of performance obligation, it does not include a significant financing component.
5) Standard for translating significant assets or liabilities denominated in foreign currencies into Japanese yen
Assets and liabilities of overseas subsidiaries are translated into the Japanese yen based on the spot
exchange rate as of the closing date while their earnings and expenses are translated into the Japanese yen
based on the average rate. The translation differences are included in and recognized as foreign currencytranslation adjustment under net assets.
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 that form the basis of preparing consolidated financial statements
A. Accounting procedures for consumption taxes
Non-deductible consumption taxes are expensed for the current fiscal year.
B. Application of the group tax sharing system
The group tax sharing system is adopted.

- 38 -

C. Application of the practical solution on the accounting and disclosure under the group tax sharing system
The Company and its certain domestic consolidated subsidiaries have transitioned from the consolidated
taxation system to the group tax sharing system from the current fiscal year. Accordingly, income taxes,
local income taxes, and tax effect accounting are accounted and disclosed in accordance with the “Practical
Solution on the Accounting and Disclosure Under the Group Tax Sharing System” (PITF No. 42, August
12, 2021; hereinafter “PITF No. 42”). Based on the paragraph 32 (1) of PITF No. 42, the Company and its
certain domestic consolidated subsidiaries deem that there is no impact from changes in accounting
policies due the adoption of PITF No. 42.
2.

Notes on significant accounting estimates
Valuation of shares, etc. that do not have a market price and equity interests in investment limited partnerships
and similar partnerships(1) Amounts recorded in the consolidated financial statements for the current fiscal year
Operational investment securities of JPY 5,552 million and investment securities of JPY 7,848 million wererecorded in the consolidated balance sheet for the current fiscal year. These include JPY 4,360 million ofshares, etc. that do not have a market price and JPY 7,723 million in equity interests in investment limited
partnerships and similar partnerships.
(2) Information on significant accounting estimates for identified items
For shares, etc. that do not have a market price, the acquisition cost is used as the value on the consolidatedbalance sheet. However, if the actual value of the securities declines significantly due to a deterioration in thefinancial position of the issuer of the securities, a substantial reduction is made to the value, and the valuationdifference is treated as a loss for the current period.
However, for securities acquired at a price substantially higher than the amount based on net assets per sharereflecting the excess earning capacity, etc. of the investee at the time of acquisition, if it is judged that theexcess earning capacity, etc. initially expected has not decreased, the actual value is deemed not to havedecreased significantly, and no loss on valuation of securities is recognized. Judgments as to whether theexcess earning capacity, etc. of investees has decreased are made based on the achievement of business plans,etc., but said judgments are carefully made, as they involve significant judgments by management since thedevelopment of venture businesses is subject to uncertainty.
In the event that the actual value, including excess earning capacity, of the investees declines significantly,
such as when the business results of the investees fall far short of the business plans, there is a possibility thatloss on valuation of securities may be recorded in the following fiscal year.
3. Notes to consolidated balance sheet(1) Breakdown of inventories(Yen in millions)

Work in process

4(2) Accumulated depreciation of property, plant and equipment(Yen in millions)360

Accumulated depreciation
4.

Notes to consolidated statement of income
Revenue from contracts with customers
The Company does not separate and state revenue from contracts with customers and other sources of revenue.
The amount of revenue from contracts with customers is presented in “7. Notes on revenue recognition, (1)Disaggregation information of revenue for the current fiscal year” in the Notes to Consolidated Financial
Statements.

- 39 -

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

As of Jan. 1, 2023

Additions

Subtractions

As of Dec. 31, 2023

Shares issued
Common shares

23,817,700 shares―

6,357,793 shares

17,459,907 shares

6,346,243 shares

11,550 shares

6,357,793 shares―

Treasury shares
Common shares(2) Matters concerning share options
Balance as ofDec. 31, 2023
(Yen inAs ofmillions)
Dec. 31, 2023

Number of underlying stock (Shares)

Type

Breakdown of shareoptions

Class ofunderlying
stock

The Company

Share acquisitionrights as shareoptions

Commonshares―346,000―

346,000

0――

346,000―

346,000

0

Total

As of
Jan. 1, 2023

Additions

Subtractions(3) Matters concerning dividend
1) Amount of dividend distribution
Resolution date

Class of stock

Total dividend
distribution(Yen in millions)February 13, 2023
Board of Directors
Meeting

Common shares

1,170

Dividend per share
(Yen)

67.0

Record date

Effective date

December 31,
2022

March 3, 2023

2) Dividends with a record date in the fiscal year ended December 31, 2023, but with an effective date in thefollowing fiscal year
Scheduledresolution date

Class ofstock

Dividend funding
sourceFebruary 13, 2024
Board of Directors
Meeting

CommonsharesRetainedearnings(Note)

Total dividend
distribution(Yen in millions)

1,309

Dividend per share
(Yen)

75.0

Record date

Effective date

December 31,
2023

March 6, 2024

The dividend per share resolved by the Board of Directors meeting on February 13, 2024 includes a commemorative
dividend (special dividend) of JPY 30.0 per share.

- 40 -

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

- 41 -

(2) Matters concerning financial instruments’ fair value
The book value and fair value of financial instruments in the consolidated balance sheet as of December 31,
2023 (the consolidated balance sheet date for the current fiscal year) and their differences are as follows. “Cashand deposits,” “accounts receivable-trade,” “accounts receivable-other” and “accounts payable-trade” areomitted because they consist of cash and have short-term maturities, and their fair value approximates theirbook value.
(Yen in millions)
Carrying amount in the
consolidated balance sheet

Fair value

Difference

Operational investment securities and
1,317
1,317
―
investment securities
Total assets
1,317
1,317
―
Long-term borrowings (including current
5,000
4,986
(13)
portion thereof)
Total liabilities
5,000
4,986
(13)
(Note 1) Shares, etc. that do not have a market price and equity interests in investment limited partnerships and similar partnerships
are not included in the above. The carrying amount of such financial instruments on the consolidated balance sheet are as
follows:(Yen in millions)
Type
Carrying amount on consolidated balance sheet
Operational investment securities and investment securities
Unlisted stocks
4,360
Equity interests in investment limited partnerships and similar
7,723
partnerships*
Total
12,083(*)
Equity interests in investment limited partnerships and similar partnerships are not subject to fair value disclosure in accordancewith paragraph 24-16 of “Implementation Guidance on Accounting Standard for Fair Value Measurement” (ASBJ Guidance
No. 31, June 17, 2021).
(Note 2) Post-reporting-date maturity schedule for monetary receivables

(1)
(2)
(3)

Type
Cash and deposits
Accounts receivable–trade
Accounts receivable-other
Total

Within 1 year
18,8607,994
5,510
32,3651-5 years――――(Yen in millions)Over 10 years
―
―
―
―

―
―

(Yen in millions)Over 10 years――

5-10 years――――(Note 3) Post-reporting-date repayment schedule for loans payable
TypeLong-term borrowings
Total

Within 1 year
1,000
1,000

1-5 years
4,000
4,000

5-10 years(3) Breakdown, etc. of financial instruments by level of fair value
The fair value of financial instruments is classified into the following three levels according to theobservability and materiality of inputs used to measure fair value.
Level 1 fair value: Fair value measured using observable inputs, i.e., quoted prices in active markets for assets
or liabilities that are the subject of such fair value measurement.
Level 2 fair value: Fair value measured using observable inputs other than Level 1 inputs.
Level 3 fair value: Fair value measured using unobservable inputs.
If multiple inputs that have significant impact on fair value measurement are used, the fair value is categorized
in the level of the lowest priority for fair value measurement among the level of each input.
1) Financial instruments measured at fair value in the consolidated balance sheet
Type

Level 1

Operational investment securities and investment securities
Shares
Other
Total assets- 42 -

947―
947

Fair value (Yen in millions)Level 2
Level 3
―
―
―

―
370
370

Total
947
370
1,317

2) Financial instruments other than those measured at fair value in the consolidated balance sheet
Level 1

Fair value (Yen in millions)Level 2
Level 3Total
Long-term borrowings
―
4,986
―
4,986
(including current portion thereof)
Total liabilities
―
4,986
―
4,986
(Note) A description of the valuation technique(s) and inputs used in the fair value measurements
 Operational investment securities and investment securities
Listed shares are valued using quoted prices. As listed shares are traded in active markets, their fair value isclassified as Level 1. Other is share options of unlisted shares. Their fair value is measured based on the best
available information from the issuer, taking into account the credit status, business conditions, etc. of the issuer, andis classified as Level 3.
 Long-term borrowings
The fair value is measured by discounting the total amount of principal and interest at an interest rate thatincorporates a benchmark rate (e.g., government bond yield) plus a credit spread, and is classified as Level 2.

7. Notes on revenue recognition(1) Disaggregation of revenue from contracts with customers for the current fiscal year
(Yen in millions)
Business segment
Digital Shift Advertising
Business
Business
Goods or services transferred at apoint in time
Goods or services transferred overa certain period
Revenue from contracts withcustomers
Other revenue
Revenue from external customers

Financial
Investment
Business

Total

585

534

―

1,119

3,896

7,718

―

11,615

4,482

8,253

―

12,735

―

―

3,529

3,529

4,482

8,253

3,529

16,264(2) Basic information in understanding revenue
Basic information in understanding revenue is as presented in “1. Significant matters that form the basis ofpreparing consolidated financial statements, (4) Matters on accounting policies, 4) Standards for recognition ofsignificant revenue and expenses” in the Notes to Consolidated Financial Statements.
(3) Information in understanding the amounts of revenue for the current fiscal year and following fiscal years
1) Contract asset and contract liability balances, etc.
Contract assets (balance at beginning of year)
Contract assets (balance at end of year)
Contract liabilities (balance at beginning of year)
Contract liabilities (balance at end of year)(Yen in millions)
21
195
39
38

Contract assets consist of unbilled accounts receivables-trade for which revenue is recognized over acertain period based on the estimated degree of progress in satisfying performance obligations. Contract
assets are reclassified to receivables from contracts with customers when they are accepted by a customer.
Contract liabilities primarily relate to advances received from customers for the period based on thepayment terms on the contracts for which revenue is recognized at time of satisfaction of performanceobligations. Contract liabilities are reversed as revenue is recognized.
2) Transaction price allocated to the remaining performance obligations
Since the Group does not have significant transactions with an initial expected contract term of more than
one year, the Group has applied the practical expedient and figures are omitted. Further, there is no
significant amount of consideration arising from contracts with customers that are not included in thetransaction price.

- 43 -

8.

Notes to per-share information
Net assets per share
Earnings per share

9.

¥1,679.72¥13.61

Notes to significant subsequent events
Not applicable.

- 44 -

Balance sheet(As of December 31, 2023)
Account
AssetsAmountAccount
Liabilities
Current liabilities
Current portion of long-termborrowings
Accounts payable
Deposits received from subsidiaries
and associates
Accrued expenses
Deposits received
Provision for bonuses
Noncurrent liabilities
Long-term borrowings
Asset retirement obligations
Total liabilities
Net assets
Shareholders’ equity
Share capital
Capital surplus
Legal capital surplus
Retained earnings
Other retained earnings
Retained earnings brought forward
Valuation and translation adjustments
Valuation difference on available-forsale securities
Share options

Current assets
21,021
Cash and deposits
14,702
Accounts receivable-trade253
Operational investment securities
1,451
Advances paid
80
Short-term loans receivable from
1,900
subsidiaries and associates
Accounts receivable - other131
Income taxes refund receivable
1,567
Other
2,639
Allowance for doubtful accounts(1,705)
Noncurrent assets
12,096
Property, plant and equipment
204
Buildings and structures
130
Tools, furniture and fixtures
74
Intangible assets
81
Trademark right4
Software76
Other
0
Investments and other assets
11,809Investment securities
1,610
Shares of subsidiaries and associates
8,588
Investments in other securities of
1,220
subsidiaries and associates
Long-term prepaid expenses
0
Deferred tax assets
119
Leasehold and guarantee deposits
270
Other
0
Total net assets
Total assets
33,118
Total liabilities and net assets(Note) The amounts presented above are rounded down to the nearest whole million yen.

- 45 -(Yen in millions)
Amount
5,743
1,000
507
3,985
147
45
57
4,160
4,000
160
9,903
22,994
8,212
3,423
3,423
11,358
11,358
11,358219
219
023,214
33,118

Statement of income(From January 1, 2023 to December 31, 2023)(Yen in millions)
Account

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

- 46 -

5,674
2,750
2,924
188
2,736
14
109
3
11
479
0

1
6
9
425
269

126

491
2,371
1

15
2,357
694
1,662

Statement of changes in net assets(From January 1, 2023 to December 31, 2023)(Yen in millions)Shareholders’ equity
Capital surplus

Balance at beginning of year
Changes of items during period
Dividends of surplus
ProfitCancellation of treasury shares
Net changes of items other thanshareholders’ equity
Total changes of items during
the period
Balance at end of year

Share capital

Legal capitalsurplus

Total capitalsurplus

8,212

3,423

3,423

Retained earnings
Other retained
earnings
Total retained
earnings
Retained earnings
brought forward
19,564
19,564(1,170)
1,662(8,698)(1,170)
1,662(8,698)―――(8,206)(8,206)

8,212

3,423

3,423

11,358

11,358Valuation and translation
adjustments
Valuation
Total
Total valuation Share options
difference on
Treasury shares shareholders’and translation
available-forequity
adjustments
sale securities(8,698)22,502
608
608―
Shareholders’ equity

Balance at beginning of year
Changes of items during period
Dividends from surplus(1,170)
Profit1,662
Cancellation of treasury shares
8,698―
Net changes of items other than(388)
shareholders’ equity
Total changes of items during
8,698
492
(388)
the period
Balance at end of year―
22,994219(Note) The amounts presented above are rounded down to the nearest whole million yen.

- 47 -

Total net assets

23,110(1,170)
1,662
―

(388)

0

(388)

(388)

0

103

219

0

23,214

Notes to Non-Consolidated Financial Statements
1.

Notes to significant accounting policies(1) Valuation standards and methods for significant assets
1) Valuation standards and methods for securities
A. Shares of subsidiaries and affiliates
Stated at cost using the moving-average method.
B. Available-for-sale securities (including operational investment securities)• Securities other than shares, etc. that do not have a market price:
Stated at fair value (The related valuation differences are directly debited or credited to the net assets
and the cost of securities sold is calculated using the moving average method).
• Shares, etc. that do not have a market price:
Stated at cost using the moving-average method.
• Investment in limited partnership for investment:
Stated at an amount calculated using the method where the amount equivalent to the Company’s equity
interests in the partnership is added to or subtracted from the partnership’s gains or losses based on themost recent financial statements available.
(2) Depreciation/amortization methods for noncurrent assets
1) Property, plant and equipment (excluding lease assets)
Mainly subject to the declining-balance method.
However, buildings (excluding equipment attached to buildings) acquired on or after April 1, 1998 andequipment attached to buildings and structures acquired on or after April 1, 2016 are subject to the straightline method.
Primary useful lives are as indicated below:
Buildings and structures:
3 to 18 years
Tools, furniture and fixtures:
4 to 10 years
2) Intangible assets (excluding leased assets)
Subject to the straight-line method.
Software for internal use is subject to the straight-line method based on the period available for internal use(mainly, five years).
(3) Standards for recognition of significant allowances
1) Allowance for doubtful accounts
To prepare for losses from receivables, uncollectible amounts are estimated and recognized, for ordinary
receivables, by the actual bad debt ratio based on losses in the past, or for doubtful receivables and othercertain receivables, by taking into consideration the collectability of individual receivable accounts.
2) Provision for bonuses
In terms of provision for bonuses, the amount accrued in the fiscal year for the estimated payout to employees
is recognized to prepare for payments of bonuses to employees.
(4) Standards for recognition of revenue and expenses
1) Services related to contracts with subsidiaries
The Company has performance obligations to provide back-office services and management consulting
under contracts with its subsidiaries. As it is considered that the subsidiaries receive benefits as the Company
performs its obligations under the contracts, revenue is recognized over the period in which the services areprovided at the contract amounts agreed to with each subsidiary at the beginning of the fiscal year.
Management consulting fees are recognized as revenue at the amounts calculated based on the amount ofrevenue recognized by each subsidiary, and dividends from subsidiaries are also recognized as revenue on
the effective date of the dividends.

- 48 -

2) Financial investment services
The Company performs operational investment for the purpose of earning capital gains of venture companies.
In funds in which the Company participates as a limited liability partner, the Company contributes theamount promised to be invested based on the partnership agreement. Revenue is recognized as gains orlosses at the time when operational investment securities held directly by the Company and investments held
through funds are sold.
(5) Other significant matters that form the basis of preparing financial statements
1) Accounting procedures for consumption taxes
Non-deductible consumption taxes are expensed for the current fiscal year.
2) Application of the group tax sharing system
The group tax sharing system is adopted.
3) Application of the practical solution on the accounting and disclosure under the group tax sharing system
The Company has transitioned from the consolidated taxation system to the group tax sharing system fromthe current fiscal year. Accordingly, income taxes, local income taxes, and tax effect accounting are
accounted and disclosed in accordance with the “Practical Solution on the Accounting and Disclosure Under
the Group Tax Sharing System” (PITF No. 42, August 12, 2021; hereinafter “PITF No. 42”). Based on theparagraph 32 (1) of PITF No. 42, the Company deems that there is no impact from changes in accounting
policies due the adoption of PITF No. 42.
2.

Notes on significant accounting estimates
Valuation of shares, etc. that do not have a market price and equity interests in investment limited partnerships
and similar partnerships(1) Amounts recorded in the non-consolidated financial statements for the current fiscal year
Operational investment securities of JPY 1,451 million and investment securities of JPY 1,610 million wererecorded in the balance sheet for the current fiscal year. These include JPY 1,359 million of shares, etc. that do
not have a market price and JPY 1,329 million in equity interests in investment limited partnerships and similar
partnerships.
(2) Information on significant accounting estimates for identified items
Notes are omitted because the same information is provided in “2. Notes on accounting estimates” in the Notes
to Consolidated Financial Statements.
3. Notes to balance sheet(1) Monetary receivables from and monetary payables to subsidiaries and associates (excluding those presented as
separate line items)(Yen in millions)Short-term monetary receivables
2,913
Short-term monetary payables
427(2) Accumulated depreciation of property, plant and equipment(Yen in millions)314

Accumulated depreciation(3) Contingent liabilities
The Company guarantees the obligation of JPY 1,140 million in payables for customers of subsidiaries.
4.

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

3,496
1
14

- 49 -

5.

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

6.

As of Jan. 1, 2023
6,346,243 shares

Additions

Subtractions

11,550 shares

6,357,793 shares

As of Dec. 31, 2023
― shares

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

522
17
14
33
936
27
1,551
(1,268)
283
(96)
(66)
(163)
119

- 50 -

7.

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

Name ofcompany

Address

Subsidiary

OPT, Inc.

Chiyoda-ku, Tokyo

100

Subsidiary

Vankable, Inc.

Chiyoda-ku, Tokyo

100

Subsidiary

Digital Shift, Inc.

Chiyoda-ku, Tokyo

100

Subsidiary

ConnectOM, Inc.

Chiyoda-ku, Tokyo

100

Subsidiary

Re:teigi, Inc.

Chiyoda-ku, Tokyo

10

Subsidiary

JOMYAKU, Inc.

Chiyoda-ku, Tokyo

10

Subsidiary

RePharmacy, Inc.

Chiyoda-ku, Tokyo

10

Shibuya-ku, Tokyo

Shibuya-ku, Tokyo

Subsidiary

Subsidiary

BIG No. 1
LimitedPartnership for
Investment
BIG SX No. 1
LimitedPartnership for
Investment- 51 -

Business

Percentage of voting
rights holding (held)

Advertising
Business
Digital ShiftBusiness
Digital ShiftBusiness
Digital ShiftBusiness
Digital ShiftBusiness
Digital ShiftBusiness
Digital ShiftBusiness

100.00%(―)
100.00%(―)
100.00%(―)
100.00%(―)
100.00%(―)
100.00%(―)
100.00%(―)

4,150

FinancialBusiness

100.00%(―)

404

FinancialBusiness

100.00%(―)

Type

Subsidiary

Name of company

OPT, Inc.

Relationship withrelated party

Director interlock
Management
involvement
CMS transactions

Nature of transaction

Management
consulting fee
Borrowing of funds
via CMS (Note 1)
Payment of interest(Note 2)
Guarantee ofobligation(Note 3)

Subsidiary

Subsidiary

Subsidiary

Subsidiary

Subsidiary

Subsidiary

Subsidiary

Subsidiary

Vankable, Inc.

Digital Shift, Inc.

ConnectOM, Inc.

Re:teigi, Inc.

JOMYAKU, Inc.

RePharmacy, Inc.

BIG No. 1
LimitedPartnership for
Investment
BIG SX No. 1
LimitedPartnership for
Investment

Director interlock
CMS transactions

Account

Accounts receivabletrade
Deposits received―
from subsidiaries
and associates

1,869

Fiscalyear-endbalance(Yen inmillions)
170
3,524

0

―

―

1,140

―

―

1,900

Short-term loans
receivable fromsubsidiaries
and associates

1,900

9

―

―

Borrowing of funds
via CMS (Note 1)―

Deposits received
from subsidiaries
and associates

444

Payment of interest(Note 2)0――

Borrowing of funds
via CMS (Note 1)―

Deposits received
from subsidiaries
and associates

226

0

―

―

682
350

―
Short-term loans
receivable fromsubsidiaries
and associates―

Loans of funds
Director interlock
Guarantee ofobligation
Loans of funds
CMS transactions

Transaction
amount(Yen inmillions)

Collection of loans
receivable
Receipt of interest(Note 2)

Payment of interest(Note 2)
Capital investment
Loans of funds

1,900

―

Collection of loans
receivable

350

Receipt of interest(Note 2)0――

Borrowing of funds
via CMS (Note 1)―

Deposits received
from subsidiaries
and associates

812

Receipt of interest(Note 2)

1――

Borrowing of funds
via CMS (Note 1)―

Deposits received
from subsidiaries
and associates

439

Receipt of interest(Note 2)0――

Borrowing of funds
via CMS (Note 1)―

Deposits received
from subsidiaries
and associates

249

Receipt of interest(Note 2)0――

Director interlock

Receipt of
distributions

440

―

―

Director interlock

Capital investment

400

―

―

Loans of funds

Director interlock
CMS transactions

CMS transactions

Director interlock
CMS transactions(Notes) 1. For borrowing transactions through the CMS (cash management system), only fiscal year-end balances are presented
because balances frequently change.
2. For transaction amount, interest rates are rationally determined based on market interest rates and other relevant factors.
3. The Company guarantees obligations owed to customers. No guarantee fee is received for this guarantee of obligation.

- 52 -

(2) Corporate officers and individual shareholders
Not applicable8.

Notes on revenue recognition
Basic information in understanding revenue
Basic information in understanding revenue from contracts with customers is as presented in “1. Notes tosignificant accounting policies, (4) Standards for recognition of revenue and expenses” in the Notes to NonConsolidated Financial Statements.

9.

Notes to per-share information
Net assets per share
Earnings per share¥1,329.58¥95.20

10. Notes to significant subsequent events
Not applicable.

- 53 -

Certified Copy of Audit Report of Business Report, Audit and Supervisory Committee Members, and Renewed
Audit and Supervisory Committee
AUDIT REPORT
We, the Audit and Supervisory Committee of DIGITAL HOLDINGS, Inc. (“the Company”), have audited theperformance of duties by Directors and Executive Officers during the 30th fiscal year from January 1, 2023 to
December 31, 2023. We report the method and results as follows.
1. Method and details of audit

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

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

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

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

ii)

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

iii)

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

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

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

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

- 54 -

February 22, 2024
Audit and Supervisory Committee of DIGITAL HOLDINGS, Inc.

Chairperson of the Audit and Supervisory Committee Yuki Okabe (Seal)(Full-time)

Audit and Supervisory Committee member

Fumiyuki Shinomiya (Seal)

Audit and Supervisory Committee member

Masahiro Yamamoto (Seal)

Audit and Supervisory Committee member

Ryoichi Kagizaki (Seal)

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

- 55 -