Sustainability
Governance
Sustainability ─ Governance
Corporate Governance
Since its establishment, our company has upheld the corporate philosophy of ” to provide a mechanism that embodies the value of information.” We share this philosophy across the group, considering it a foundation for managerial decisions. Recognizing the necessity of establishing sound management, legality, and transparency for sustainable growth and development, our group aims to build a management structure as a fundamental principle in our corporate governance initiatives.
In pursuit of this realization, we are committed to fostering a swift and appropriate decision-making process, exercising independent audit functions, constructing effective internal control systems, and promoting timely and appropriate information disclosure. Moreover, we are dedicated to instilling a heightened awareness of social responsibility among all employees. We also acknowledge and adhere to the basic principles of the Corporate Governance Code, striving to enhance the robustness of our corporate governance.
Corporate Governance Structure (Execution and Oversight of Operations)
The Company’s institutional design is that of a company with a Board of Directors, an Audit and Supervisory Committee, and an Accounting Auditor. We have also established an Internal Audit Office as an organization directly under the President, and we work to maintain and strengthen corporate governance with these bodies at its core.
Because each member of the Audit and Supervisory Committee serves as a director with voting rights at the Board of Directors and all of them are outside directors, we believe that a strong supervisory function is exercised while maintaining the separation of business execution and oversight.
The Board of Directors has established a Nomination and Compensation Committee as a voluntary body composed of a majority of independent outside directors, thereby enhancing the transparency and objectivity of the process for determining the compensation of directors (excluding directors who are Audit and Supervisory Committee members) and the candidates for the appointment and dismissal of directors. From April 2025, the Nomination and Compensation Committee was formed by consolidating the previously separate Compensation Committee and Nomination Committee. This consolidation links the processes of executive appointments and compensation decisions to enable a more appropriate human resources strategy, while also avoiding overlapping membership and improving operational efficiency.
With respect to directors’ terms of office, in accordance with applicable laws and regulations, directors who are not Audit and Supervisory Committee members serve a one-year term, while directors who are Audit and Supervisory Committee members serve a two-year term, each determined by resolution of appointment at the General Meeting of Shareholders.
The Management Meeting is composed of executive officers, with Audit and Supervisory Committee members in attendance, and works to ensure swift decision-making and greater efficiency in management activities. The Sustainability Committee meets, in principle, once every half-year to identify, assess, and consider the management of risks related to climate change, as well as to determine basic policies and strategies for sustainability management, decide on materiality, and promote various measures. With respect to internal audit, although no dedicated staff member is assigned, we have established an Internal Audit Office as an organization directly under the President to build a structure that enables independent audits, and we take care to ensure that each person does not audit the department to which they belong. Appropriate coordination is also maintained with the Audit and Supervisory Committee and the Accounting Auditor, and we recognize that the three-way audit system is functioning effectively.
Board of Directors
Following the conclusion of the Annual General Meeting of Shareholders in June 2025, we restructured the Board of Directors to streamline its composition, with the aim of clarifying the roles and responsibilities of each director and enabling more agile decision-making. The Articles of Incorporation provide for a maximum of 15 directors. The Board currently consists of 2 internal directors (excluding outside directors and directors who are Audit and Supervisory Committee members) and 3 outside directors who are Audit and Supervisory Committee members. The Board meets by mid-month each month to resolve important matters and receive reports on business conditions. Meeting materials are distributed in advance to ensure that each director has sufficient time to review and consider each agenda item and report prior to the meeting. The Audit and Supervisory Committee, which convenes prior to each Board meeting, forms its opinions as appropriate. At Board meetings, each director is encouraged to express candid opinions, fostering healthy deliberation and mutual oversight among directors with respect to business execution. Pursuant to the Articles of Incorporation and the Board of Directors Regulations, the President and CEO serves as Chairperson of the Board, except where otherwise required by law.
＜Attendance Record＞
| Total Meetings | Ban | Yaguchi | Ishibashi | Ozaki | Yoshimura | ||
|---|---|---|---|---|---|---|---|
FY2026 | 21 | Number of attendances | 21 | 21 | 21 | 17 | 21 |
| % of attendance | 100% | 100% | 100% | 100% | 100% | ||
FY2025 | 17 | Number of attendances | 13 | 18 | 18 | – | 18 |
| % of attendance | 100% | – | 100% | – | 100% | ||
FY2024 | 17 | Number of attendances | 4 | 15 | 15 | – | 15 |
| % of attendance | 100% | – | 100% | – | 100% | ||
※ The number of Board meetings each director is expected to attend varies depending on the timing of their appointment.
Audit and Supervisory Committee
The Audit and Supervisory Committee currently consists of three outside directors and convenes prior to each Board of Directors meeting. Audit and Supervisory Committee members are also able to attend important meetings held on a weekly basis, including the Management Meeting, the Sustainability Committee, and the Compliance Committee, and we believe this arrangement ensures the effective fulfillment of a critical governance function.
＜Attendance Record＞
| Total Meetings | Ishibashi | Ozaki | Yoshimura | ||
|---|---|---|---|---|---|
FY2026 | 18 | Number of attendances | 18 | 14 | 18 |
| % of attendance | 100% | 100% | 100% | ||
FY2025 | 18 | Number of attendances | 14 | – | 14 |
| % of attendance | 100% | – | 100% | ||
FY2024 | 14 | Number of attendances | 14 | – | 14 |
| % of attendance | 100% | – | 100% | ||
※ For directors appointed during the fiscal year, attendance figures and rates reflect the period from the date of their appointment.
※ The Company had a full-time Audit & Supervisory Board Member until June 2025.
Board Effectiveness Analysis and Evaluation
In order to enhance the effectiveness of the Board of Directors (including the voluntary Nomination and Compensation Committee), the Company conducts an annual self-evaluation through a questionnaire distributed to all directors, the results of which are then discussed and assessed at a Board meeting. With respect to the evaluation for the fiscal year ended March 2026, the Board confirmed that it is functioning effectively both as a business execution body and as a supervisory body, and that the effectiveness of the Board of Directors is being maintained. The evaluation also reaffirmed the importance of efforts to deepen and enrich Board deliberations, as well as the importance of the supervisory function through clarification of directors’ responsibilities and ongoing monitoring.
May 22nd, 2026 Notice Concerning the Effectiveness of the Board of Directors
Director Compensation
The Company has not established a specific method for calculating the compensation of its directors. However, taking into account factors such as the scale of each director’s area of responsibility, the level of accountability involved, and the significance of their impact on management, compensation is determined within the limits of the total compensation approved by the General Meeting of Shareholders, separately for directors who are not Audit and Supervisory Committee members and for those who are.
With respect to individual compensation amounts, the compensation of directors who are not Audit and Supervisory Committee members is determined based on the deliberations of the Compensation Committee, which is chaired by an independent outside director. The compensation of directors who are Audit and Supervisory Committee members is determined through discussions within the Audit and Supervisory Committee.
The compensation of all directors, including the details of individual compensation, is determined by the voluntary Compensation Committee, acting under delegation from the Board of Directors, in order to ensure fairness, objectivity, and transparency in compensation policy, allocation structure, and administration. The members of the Compensation Committee are appointed from among the Company’s directors by resolution of the Board of Directors, with independent outside directors comprising at least a majority. The Chairperson of the Committee is selected by resolution of the Board of Directors.
＜FY2026 Total amount of director compensation＞
| Number of Directors paid | Compensation (JPY000s) | Bonuses | Amount of Compensation etc. (JPY000s) | |
|---|---|---|---|---|
| Directors (excluding Audit and Supervisory Committee members and outside directors) | 5 | 63,432 | － | 63,432 |
| Outside Directors (including 4 Audit and Supervisory Committee members) | 6 | 17,805 | － | 17,805 |
| Total | 11 | 81,237 | － | 81,237 |
*The above total amount of remuneration includes the company’s share of the defined contribution pension plan.
Accounting Auditor’s Compensation
Audit fees for certified public accountants are determined with the consent of the Audit and Supervisory Committee, taking into consideration the number of audit days, size of the audit, etc.
＜Amount of remuneration＞
| Accounting Auditor’s Compensation | Amount of remuneration(JPY000s) | Total of cash and other profits payable by the Company to Accounting Auditor(JPY000s) |
|---|---|---|
| FY2026 | 40,000 | 40,000 |
| FY2025 | 40,000 | 40,000 |
| FY2024 | 40,000 | 40,000 |
* In the audit contract between the Company and the accounting auditor, the amount of remuneration. for the audit based on the Companies Act and the audit based on the Financial Instruments and Exchange Act are not clearly separated and cannot be practically separated, thus the accounting auditor remuneration amount under review is the total of these amounts.
Ownership
All of the Company’s issued shares are identical and have full voting rights, and the number of shares per unit is 100 shares without any rights limitation.
The Company believes that those who control its decisions on financial and business policies should aim sustainable growth and concentrate their management resources on maximizing its corporate value and increasing shareholder’s profit.The Company has not introduced any special takeover defense.
The Company classifies investment shares held for the purpose of earning profits from the value changes of shares and dividends as net investment, and other shares as investment shares for the purpose other than net investment (strategic holdings).
The Company have a basic policy to dispose of or reduce our holdings of policy-owned stocks that are considered to have little significance in light of the business situation.
We conduct verification of economic rationality, considering factors such as the amount, and discuss at management meetings or the board of directors, and decide on actions such as sale after considering options.
With respect to the exercise the voting rights of shares held, the Company will decide whether to approve or disapprove of a proposal, considering whether the proposal will contribute to the enhancement of the medium- to long-term corporate value and the realization of sustainable growth and enhancement of corporate value of the Group, while respecting the management policies, strategies, etc., of the issuing company.
Risk Management
In order to mitigate and prevent risks, the Company is enhancing to strengthen its risk management system and ensure compliance through the establishment of risk management regulations and meetings of the Compliance Committee. In the event of an unforeseen situation, a task force shall be established headed by the President and Representative Director to take prompt action putting in place a system to prevent and minimize the spread of damage. In addition, the Sustainability Committee is enhancing to reduce risks and maximize opportunities under appropriate sustainability risk management including the identification, assessment, and management of climate changes risks.
Initiatives for Personal Information Security
The Group Company mainly utilizes IT to acquire and provide information via internet. We recognize the importance of ensuring various information security, including personal information. The Company established an “Information Security Standards” to protect confidentiality, integrity, and availability of Company information assets and to minimum impact of any possible accidents. The Company also conducts information security trainings for all Group employees to improve information security literacy.
The Company constantly reviews measures and operations towards various external threats. Installations of security software and terminal control on all internal PCs and devices, and IDaaS and other systems have been implemented. This prevents and detects unauthorized accesses or multi-factor authorization.
As part of our continuous efforts, each Group Companies have been certified ISMS (Information Security Management System.)
Compliance
In order to ensure compliance with laws and regulations, corporate ethics, and internal rules in business activities, we have established a “Basic Compliance Policy” that sets out the basic matters to be complied with, and make them known to the officers and employees of our group.
As a specific code of conduct, the Company has established a Basic Compliance Policy which shall comply with laws and regulations, industry self-regulation, and company rules.
The policy also conducts fair and transparent corporate activities that do not violate social rules. It also maintain appropriate and transparent business operations, respecting human rights and the environment, and protecting reporting and whistleblowers.
Prevention of Corruption
In accordance with the Basic Compliance Policy, the Group Companies will not engage in any illegitimate activities whether directly or indirectly, bribery, kickbacks, inappropriate entertainment and gifts, and illegal political donations, contributions, and sponsorships.
Basic Policy for Eliminating Organized Crime Groups and Status of Implementation
Based on our Basic Compliance Policy, the Group Companies take a firm stand on countering organized crime groups and established a system to eliminate organized crime groups by fully cooperating and sharing information with external specialized organizations such as police authorities, the federation of special anti-violence countermeasures of which is organized by the Metropolitan Police Department, and legal advisors.
Tax Policy
Each Group Companies have fulfilled tax obligations and have continued to secure stable profits for appropriate tax payments. In addition, the Company complies with the laws and regulations of each country the international organizations’ standards and OECD Transfer Pricing Guidelines. We fully pay appropriate taxes in various transactions. The Company currently does not have any overseas subsidiaries and does not engage in any transactions that could lead to tax avoidance, including tax havens.
Ensuring Compliance
The Company has established a Compliance Committee to ensure and determine policies for its Group Companies. It monitors specific matters to be complied within the execution of duties, such as laws and regulations, the Articles of Incorporation, internal regulations, and the Code of Conduct. Committee also established a system to prevent compliance violations.
The Company regularly provides compliance training for all employees including management, in laws and regulations that need to be understood for our business sustainability. The Company continuously raises employees’ awareness through regular insider trading regulations and harassment programs.
Periodically conduct internal audits to ensure that the execution of their respective duties is in compliance with laws and regulations and the Articles of Incorporation.
Hotline
We respond to the Whistleblower Protection Act in accordance with the “Whistleblower Handling Rules,”. The Company emphasizes on compliance management through early detection and correction of fraudulent activities by establishing an environment where whistleblowers can easily consult with internal and external multiple reporting windows by phone or email.
