ITOCHU Techno : Notice of Special Shareholders’ Meeting

This is an unofficial translation of an excerpt of the original notice in Japanese for reference purposes only. In the case of any discrepancy between the translation and the Japanese original, the latter shall prevail. The Company assumes no responsibility for this translation or for direct, indirect or any other forms of damages arising from the translations. For the entire information of the notice, please check the original notice in Japanese.

Securities Code: 4739

Date of mailing: October 27, 2023

Date of commencement of electronic provision measures: October 24, 2023

To Shareholders with Voting Rights

Ichiro Tsuge, President & CEO ITOCHU Techno-Solutions Corporation 4-1-1, Toranomon, Minato-ku, Tokyo

Notice of Special Shareholders' Meeting

Please be informed of the Special Shareholders' Meeting (the "Meeting") of ITOCHU Techno-Solutions Corporation (the "Company") to be held as described below.

In convening the Meeting, the Company has taken measures for providing information in electronic format (the "electronic provision measures") and has posted the Notice of Special Shareholders' Meeting and the reference materials for the Meeting as part of matters subject to the electronic provision measures on the following website.

The Company's website: https://www.ctc-g.co.jp/en/company/ir/stock/meeting.html

In addition to the website shown above, the matters subject to electronic provision measures are posted on the following website.

TSE's website (Listed Company Search): https://www2.jpx.co.jp/tseHpFront/JJK020010Action.do?Show=Show

Please access the website above, enter the Company name or securities code and search. Then, click on "Basic information" and "Documents for public inspection/PR information" in this order to review these matters.

Instead of attending the Meeting, you may exercise your voting rights either via mail or the Internet. In this case, please review the attached "Reference Materials for the Meeting" and exercise your voting rights according to the instructions on page 2-3 by no later than 5:30 p.m., Monday, November 13, 2023, Japan time.

1.	Date and time:	10:00 a.m., Tuesday, November 14, 2023, Japan time
2.	Place:	Sumitomo Fudosan Shiodome Hamarikyu Building, Bellesalle Shiodome, 2F Hall
		8-21-1, Ginza, Chuo-ku, Tokyo
		*The venue is different from the previous meeting.

1. Meeting agenda: Matters to be Resolved:
   Proposal 1: Share consolidation
   Proposal 2: Partial amendment to the Articles of Incorporation
2. Other matters related to convocation of the Meeting

1. Exercising voting rights by proxy

When voting rights are to be exercised by proxy, please present a written certificate of proxy along with the relevant shareholder's Voting Rights Exercise Form at the reception desk of the meeting place. Please note that only a single other shareholder with voting rights of the Company can be designated as a proxy.

(2) Diverse exercise of voting rights

If you wish to make a diverse exercise of your voting rights, please notify the Company of such intention and reasons at least three days prior to the date of the Meeting.

1. If nothing is marked in either the "for" or "against" column of the proposals in the Voting Rights Exercise Form, it shall be deemed as an intention of approval.

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If you attend the Meeting, please present the enclosed Voting Rights Exercise Form at the reception desk of the meeting place.

Note:

The Company will post any revisions made to the matters subject to electronic provision measures on the above- mentioned websites.

[ Guide to Exercising Voting Rights ]

If you plan to attend the Meeting

Date and time of the Meeting: 10:00 a.m., Tuesday, November 14, 2023, Japan time (The reception will begin at 9:00 a.m.)

Please bring and present the enclosed Voting Rights Exercise Form at the reception desk of the meeting place. Additionally, please bring this document with you as reference for the proceedings.

• Exercise of voting rights via proxy is allowed by a single other shareholder with voting rights of the Company in attendance at the Meeting. However, submission of a written certificate of proxy will be required.

If you do not plan to attend the Meeting

Exercise of voting rights via mail (writing)

Exercise deadline: Arrival by 5:30 p.m., Monday, November 13, 2023, Japan time

Please indicate your vote for or against the proposals on the Voting Rights Exercise Form enclosed herewith, and return it so that it will be received by no later than the above exercise deadline.

If you exercise your voting rights both via mail and via the Internet, the vote via the Internet shall be valid. If you exercise your voting rights more than once, the last exercise shall be deemed as valid.

Exercise of voting rights via the Internet

Exercise deadline: Until 5:30 p.m., Monday, November 13, 2023, Japan time

Please visit the voting website using PC or other devices and enter your vote for or against the proposals by no later than the above exercise deadline. For more details about the voting website and how to exercise voting rights, please refer to [Guide to Exercising Voting Rights via the Internet] on page 3.

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[ Guide to Exercising Voting Rights via the Internet ]

By scanning the QR code

You can access the voting website without entering your login ID and temporal password printed on the stub of the Voting Rights Exercise Form.

1. Scan the QR code printed on the stub (right) of the Voting Rights Exercise Form. Note: "QR code" is a registered trademark of DENSO WAVE INCORPORATED.
2. Follow the instructions on the screen to enter your vote for or against the proposals. Please scan the QR code again if you wish to be redirected to the website.

If you wish to exercise your voting rights without scanning the QR code, please follow the steps in "By entering login ID and temporal password" described below.

By entering login ID and temporal password

Voting website: https://evote.tr.mufg.jp/ (Japanese Only)

1. Access the voting website.
2. Enter the login ID and temporal password printed on your Voting Rights Exercise Form, then click "Log in."

3. Enter a new password and click "Submit."

4. Follow the instructions on the screen to enter your vote for or against the proposals.

Contact information

For technical support and other inquiries on exercising your voting rights online, please contact the Help Desk at the Corporate Agency Division, Mitsubishi UFJ Trust and Banking Corporation.

0120-173-027(Toll-free within Japan/ 9:00-21:00)

• Institutional investors who have applied in advance to use the Electronic Voting Platform for Institutional Investors operated by ICJ, Inc. may exercise their voting rights on the Platform.

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[Translation]

Reference Materials for the Shareholders' Meeting

Proposals and Reference Matters

First Proposal: Share Consolidation

In response to the results of the tender offer for the common shares of the Company (the "Company Shares") by Digital Value Chain Partners, GK (the "Tender Offeror"), the Company submits this Proposal to request the approval of the shareholders for the consolidation of 35,400,400 shares of the Company Shares into one share (the "Share Consolidation"), effective as of December 5, 2023, in order to have the Company's shareholders comprise of only the Tender Offeror and ITOCHU Corporation ("ITOCHU").

1. Reasons for the Share Consolidation

As the Company announced in the "Announcement of Opinion in Support of the Tender Offer for the Company Shares by Digital Value Chain Partners, GK, a Subsidiary of ITOCHU Corporation, the Parent Company and Recommendation for our Shareholders to Tender their

Shares in the Tender Offer" released on August 2, 2023 by the Company (the "Press Release"), the Tender Offeror conducted a tender offer (the "Tender Offer") for the Company Shares by setting the tender offer period in the Tender Offer (the "Tender Offer Period") to be 30 business days from August 3, 2023 to September 14, 2023, as part of a series of transactions for the purpose of having the Company's shareholders comprise only of the Tender Offeror and ITOCHU (collectively, the "Tender Offerors"), and taking the Company private (such transactions are hereinafter referred to as the "Transaction").

As a result of the Tender Offer, the Tender Offeror came to hold 57,099,146 Company Shares (Ownership Ratio (Note 1): 24.69%) as of September 22, 2023, which is the commencement date of the settlement of the Tender Offer.

(Note 1) "Ownership Ratio" means the percentage (rounded up or down to the nearest two decimal places) of the difference (231,227,366 shares) of the total number of issued shares of the Company as of June 30, 2023 (240,000,000 shares) stated in the "Consolidated Financial Results for the First Quarter of the Fiscal Year Ending

March 31, 2024 (IFRS)" released on August 2, 2023 by the Company less the number of treasury shares held by the Company as of June 30, 2023 (8,772,634 shares; such treasury shares do not include 145,100 shares held by Mizuho Trust & Banking Co., Ltd. (re-trustee: Custody Bank of Japan, Ltd.), which has been delegated by the Company, pursuant to the "Board Benefit Trust" ("BBT"), which is a performance-based stock incentive plan for Directors and Managing Executive Officers of the Company (excluding part-time directors, outside directors, and non- residents of Japan)); the same applies hereinafter to statements of the Ownership Ratio, unless otherwise specified.

As the Company announced in the Press Release, on March 7, 2023, the Company received from ITOCHU, the parent company of the Tender Offeror, a notice to the effect that ITOCHU had commenced deliberating on the implementation of the Transaction. Accordingly, in

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deliberating on the Transaction, and consulting and negotiating with ITOCHU regarding the Transaction, given that ITOCHU is a controlling shareholder of the Company (parent company), whose Ownership Ratio of the Company Shares is 61.24%, and the Transaction (including the Tender Offer) constitutes a material transaction, etc. with a controlling shareholder, and the Transaction constitutes transactions that typically involve structural conflict of interest issues and information asymmetry issues, in order to address those issues and to ensure the fairness of the Transaction, the Company appointed in early March, 2023 (i) Mori Hamada & Matsumoto as its legal advisor independent of the ITOCHU Group (excluding the Tender Offeror and the Company Group (meaning the corporate group comprising the Company, 17 subsidiaries, and 13 affiliates, with a total of 31 companies (as of August 2, 2023) (hereinafter the same applies)) and the Tender Offeror (collectively, the "Tender Offeror, Etc."), and the Company Group, and (ii) Daiwa Securities Co. Ltd. ("Daiwa Securities") as its financial advisor and third-party valuation agent independent of the Tender Offeror, Etc. and the Company Group. The Company then received from ITOCHU once again a written proposal for the Transaction on April 4, 2023. In response to such proposal, in order to ensure the fairness of the Transaction, the Company immediately started establishing a framework for deliberating and negotiating and making decisions regarding the Transaction in terms of increasing its corporate value and securing the interests of general shareholders of the Company from a standpoint independent of ITOCHU, based on the advice of Mori Hamada & Matsumoto. Specifically, after preparation towards the establishment of a special committee as stated in "C. Establishment of an Independent Special Committee at the Company and Obtainment of a Report from the Special Committee" in "(4) Measures to Ensure the Fairness of the Transaction and Measures to Avoid Conflicts of Interest" in "3. Matters Concerning Appropriateness of the Terms of the Ratio of the Share Consolidation" below, by a resolution of the board of directors meeting held on April 7, 2023, soon after the receipt of the written proposal from ITOCHU on April 4, 2023, the Company (i) established a special committee (the "Special Committee"), which consisted of three members, namely Mr. Yasuhiro Ikeda (an independent outside director of the Company), Ms. Aya Motomura (an independent outside director of the Company), and Mr. Katsuhiko Hara (an independent outside audit & supervisory board member of the Company) (for the process of the review, and details of decisions made by the Special Committee, please refer to "C. Establishment of an Independent Special Committee at the Company and Obtainment of a Report from the Special Committee" in "(4) Measures to Ensure the Fairness of the Transaction and Measures to Avoid Conflicts of Interest" in "3. Matters Concerning Appropriateness of the Terms of the Ratio of the Share Consolidation" below.). The Company requested the Special Committee : (i) to deliberate on and determine regarding (a) whether the Transaction should be implemented from the perspective of enhancing the corporate value of the Company and (b) the reasonableness of the transaction terms and conditions and the fairness of the procedures from the viewpoint of securing the interests of the general shareholders of the Company, and then deliberate on and provide the Company's board of directors with advice regarding whether or not the Company's board of directors should approve the Transaction (including whether or not it should support the Tender Offer and whether or not it should recommend that shareholders of the Company tender their shares in the Tender Offer), and (ii) to deliberate on and provide the Company's board of directors with an opinion regarding whether the decision by the Company's board of directors on the implementation of the Transaction (including the expression by the Company's board of directors of an opinion in support of the Tender Offer and the recommendation to the Company's shareholders to tender their shares in the Tender Offer) is not disadvantageous to the minority shareholders of the Company (collectively, the "Inquired Matters"). In addition, the Company's board of directors resolved, upon establishing the Special Committee, (i) to give the highest degree of respect to the decisions of the Special Committee when making decisions on the Transaction (including the decision whether to support the Tender Offer) and (ii) if the Special Committee determines that the terms and conditions of the Transaction are not appropriate, not to approve

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the Transaction under those terms and conditions, and resolved to authorize the Special Committee (i) to be substantially involved in negotiations between the Company and ITOCHU (including, as necessary, giving instructions or requests about the Company's negotiation policy with ITOCHU), (ii) to appoint or nominate its own financial advisors or third-party valuation agents and legal advisors if necessary when deliberating and making decisions regarding the Inquired Matters (any expenses incurred in this case are to be borne by the Company) or to nominate or approve (including ex post facto approval) the Company's financial advisors, legal or other advisors and (iii) to receive from the Company's officers and employees and other persons whom the Special Committee considers necessary any information reasonably necessary for conducting the deliberations and making decisions regarding the Inquired Matters as necessary (please refer to "C. Establishment of an Independent Special Committee at the Company and Obtainment of a Report from the Special Committee" in "(4) Measures to Ensure the Fairness of the Transaction and Measures to Avoid Conflicts of Interest" in "3. Matters Concerning Appropriateness of the Terms of the Ratio of the Share Consolidation" below on how these resolutions were made at this board of directors meeting.).

As stated in "C. Establishment of an Independent Special Committee at the Company and Obtainment of a Report from the Special Committee" in "(4) Measures to Ensure the Fairness of the Transaction and Measures to Avoid Conflicts of Interest" in "3. Matters Concerning Appropriateness of the Terms of the Ratio of the Share Consolidation" below, the Special Committee determined on April 7, 2023 to appoint Shibata, Suzuki & Nakada as its own legal advisor and PLUTUS CONSULTING Co., Ltd. ("Plutus") as its own financial advisor and third-party valuation agent, based on the authority described above.

In addition, as stated in "C. Establishment of an Independent Special Committee at the Company and Obtainment of a Report from the Special Committee" in "(4) Measures to Ensure the Fairness of the Transaction and Measures to Avoid Conflicts of Interest" in "3. Matters Concerning Appropriateness of the Terms of the Ratio of the Share Consolidation" below, the Special Committee confirmed that there were no concerns with respect to the independence from the Tender Offeror, Etc. and the Company Group, the expertise, accomplishments, and other matters concerning the Company's financial advisor and third-party valuation agent, Daiwa Securities, and the Company's legal advisor, Mori Hamada & Matsumoto, and approved the appointment of Daiwa Securities and Mori Hamada & Matsumoto.

Further, as stated in "G. Establishment of an Independent Deliberation Framework at the Company" in "(4) Measures to Ensure the Fairness of the Transaction and Measures to Avoid Conflicts of Interest" in "3. Matters Concerning Appropriateness of the Terms of the Ratio of the Share Consolidation" below, the Company established an internal framework for deliberating, negotiating and making decisions regarding the Transaction (including the scope of the officers and employees of the Company involved in deliberating, negotiating and making decisions regarding the Transaction, and their duties) from a standpoint independent of the Tender Offeror, Etc., and obtained approval from the Special Committee that there were no concerns with respect to that deliberation framework from the standpoint of independence and fairness.

After that, the Company received advice from a financial point of view, including a report on the result of the valuation of the Company Shares and advice on the negotiation policy with ITOCHU, from Daiwa Securities and received legal advice, including advice on measures to ensure the fairness of the procedures in the Transaction, from Mori Hamada & Matsumoto and has carefully discussed and deliberated on whether to implement the Transaction and the reasonableness of the transaction terms and conditions, giving the highest degree of respect to the details of the opinion of the Special Committee.

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Also, since the receipt of a proposal for the Transaction from ITOCHU on April 4, 2023, the Company continued to discuss and negotiate with ITOCHU on the terms and conditions of the Transaction, including the purchase price per the Company Share in the Tender Offer (the "Tender Offer Price").

Specifically, given that the Company and the Special Committee received the proposal for the Transaction on April 4, 2023, the Company continued deliberations and negotiations at the Special Committee and submitted to ITOCHU written questions regarding the significance and purpose of the Transaction on April 25, 2023. On May 19, 2023, the Company and the Special Committee received a written response to such questions from ITOCHU. Furthermore, given such response, the Company and the Special Committee submitted additional written questions on May 25, 2023. At the Special Committee meeting held on May 31, 2023, the Company and the Special Committee received a response to such questions and explanations about the significance and purpose of the Transaction from ITOCHU, held question-and-answer sessions regarding these matters, and also had discussions regarding the significance and purpose of the Transaction. After that, the Company and the Special Committee further submitted additional written questions on June 1, 2023 and June 6, 2023 and received written responses to such questions from ITOCHU on June 2, 2023 and June 14, 2023 respectively. In addition, at the Special Committee meeting held on June 22, 2023, the Company and the Special Committee once again received explanations about the significance and purpose of the Transaction from ITOCHU, held question-and-answer sessions regarding these matters, and also had discussions regarding the significance and purpose of the Transaction.

The Company has engaged in multiple rounds of negotiations with Itochu regarding the Tender Offer Price since July 7, 2023. Specifically, as a result of the comprehensive consideration of the information obtained through the due diligence conducted by ITOCHU on the Company, the initial analysis of the value of the Company Shares conducted by Nomura Securities Co., Ltd. ("Nomura Securities"), the financial advisor of ITOCHU, on the assumption of such information, and the details of the initial analysis of the value of the Company Shares conducted by ITOCHU on the assumption of such information, the Company received a proposal for the Transaction from ITOCHU on July 7, 2023 including a proposal to set the Tender Offer Price for the Tender Offer at 3,800 yen (a premium of 6.77% on the share price of 3,559 yen, the closing price of the Company Shares listed on the Prime Market of Tokyo Stock Exchange, Inc. (the "TSE") as of the previous business day). However, on July 10, 2023, the Company requested a reconsideration of the Tender Offer Price on the grounds that the Tender Offer Price was significantly below the price level reflecting the intrinsic value of the Company. In response to this, on July 12, 2023, ITOCHU requested that the Company explicitly indicate the reasons why it evaluated the Tender Offer Price presented in the proposal made by ITOCHU on July 7, 2023 to be significantly below the price level reflecting the intrinsic value of the Company. Based on such request, on July 14, 2023, the Company explained the explicit reasons why the Tender Offer Price presented by ITOCHU in the proposal made on July 7, 2023 was significantly below the price level reflecting the intrinsic value of the Company, based on the long-term movement of the market stock price, and made a request to ITOCHU again to raise the Tender Offer Price. Then, upon the Company's request, the Company received a revised proposal on July 18, 2023 from ITOCHU to set the Tender Offer Price at 4,000 yen (a premium of 12.74% on the share price of 3,548 yen, the closing price of the Company shares on the TSE as of the previous business day ). However, on July 19, 2023, the Company requested again a reconsideration of the Tender Offer Price on the grounds that the Tender Offer Price was significantly below the price level reflecting the intrinsic value of the Company. After that, upon the Company's request, the Company received a revised proposal on July 26, 2023 from ITOCHU to set the Tender Offer Price at 4,080 yen (a premium of 16.47% on the share price of 3,503 yen, the closing price of the Company shares on the TSE as of the previous business day). However, on that day, the Company requested again to raise the Tender Offer

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Price on the grounds that the Tender Offer Price was not reached the price that the Company can support the Tender Offer based on the result of valuation of the Company Shares by the financial advisors of the Company and the Special Committee, and the current level of stock price. After that, upon the Company's request, the Company received a revised proposal on July 27, 2023 from ITOCHU to set the Tender Offer Price at 4,090 yen (a premium of 14.41% on the share price of 3,575 yen, the closing price of the Company shares on the TSE as of the previous business day). However, on that day, the Company requested again to raise the Tender Offer Price on the grounds that the Tender Offer Price was not reached the price that the Company can support the Tender Offer based on the result of valuation of the Company Shares by the financial advisors of the Company and the Special Committee, and the current level of stock price. Subsequently, upon receiving the Company's request, ITOCHU notified the Company once again on the same day that it would be difficult to raise the Tender Offer Price to 4,200 yen or above, however, on August 1, 2023, the Company again received a proposal from ITOCHU to set the Tender Offer Price at 4,325 yen per share (a premium of 20.07% on the share price of 3,602 yen, the closing price of the Company Shares on the TSE Prime Market as of the previous business day), and on the same day, the Company sent a response to ITOCHU indicating its acceptance of the proposal and reached agreement to set the Tender Offer Price at 4,325 yen.

During the above deliberation and negotiation processes, when consulting and negotiating with ITOCHU regarding the Tender Offer Price, the Company conducted the deliberations, taking into account the opinions of the Special Committee and advice received from Daiwa Securities and Mori Hamada & Matsumoto. At that time, the Special Committee received advice from Plutus and Shibata, Suzuki & Nakada, advisors of the Special Committee, from time to time, exchanged opinions with the Company and advisors of the Company, and carried out confirmation and approval as appropriate. Specifically, to start with, the Special Committee confirmed and approved in advance the reasonableness of the details, material assumptions, the preparation process, and the like of the Company's business plan that the Company presented to ITOCHU and constitutes the basis for the calculation of the value of the Company Shares by Daiwa Securities and Plutus. Also, Daiwa Securities, the financial advisor of the Company, handled the negotiations with ITOCHU in accordance with the policy for negotiation that was determined in advance upon deliberations at the Special Committee, and whenever it received a proposal on the Tender Offer Price from ITOCHU it immediately made a report to the Special Committee, and received opinions, instructions and requests, etc. on matters, such as the negotiation policy with ITOCHU, from the Special Committee and took measures in accordance with such opinions, instructions and requests, etc.

The Company received a written report (the "Report") from the Special Committee on August 1, 2023 stating that the Special Committee believes that (i) it would be appropriate for the board of directors of the Company to resolve to express an opinion in support of the Tender Offer and to recommend that the Company's shareholders tender their shares in the Tender Offer, and (ii) the decisions on the Transaction by the board of directors of the Company (in other words, (a) a decision to express an opinion in support of the Tender Offer and recommend that the Company's shareholders tender their shares in the Tender Offer and (b) a decision on the privatization procedures through the demand for share cash-out or the share consolidation which will be conducted after the Tender Offer as part of the Transaction (the "Squeeze-OutProcedures")) would not be disadvantageous to the minority shareholders of the Company (for details of the Report, please refer to "C. Establishment of an Independent Special Committee at the Company and Obtainment of a Report from the Special Committee" in "(4) Measures to Ensure the Fairness of the Transaction and Measures to Avoid Conflicts of Interest" in "3. Matters Concerning Appropriateness of the Terms of the Ratio of the Share Consolidation" below). In addition to the Report, the Company also received from the Special Committee a share valuation report pertaining to the Company Shares that was submitted to the Special

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Committee by Plutus on August 1, 2023 (the "Valuation Report (Plutus)") and a fairness opinion that the Tender Offer Price of 4,325 yen per share is fair to the Company's minority shareholders from a financial perspective (the "Fairness Opinion") (for outlines of the Valuation Report (Plutus) and the Fairness Opinion, please refer to "D. Obtainment by the Special Committee of a Share Valuation Report and a Fairness Opinion from an Independent Third-Party Valuation Agent" in "(4) Measures to Ensure the Fairness of the Transaction and Measures to Avoid Conflicts of Interest" in "3. Matters Concerning Appropriateness of the Terms of the Ratio of the Share Consolidation" below).

In light of this background, at its board of directors meeting held on August 2, 2023, the Company carefully discussed and deliberated whether the Transaction, including the Tender Offer, would contribute to enhancing the corporate value of the Company and whether the terms and conditions of the Transaction, including the Tender Offer Price, are reasonable, based on legal advice from Mori Hamada & Matsumoto, advice from a financial point of view from Daiwa Securities, and a share valuation report pertaining to the Company Shares received from Daiwa Securities on August 1, 2023 (the "Company Valuation Report (Daiwa)"), as well as the Valuation Report (Plutus) and the Fairness Opinion received through the Special Committee, giving the highest degree of respect to the decisions of the Special Committee presented in the Report.

As a result, as set out below, the Company reached a conclusion that the privatization of the Company through the Transaction including the Tender Offer by the Tender Offeror would contribute to the enhancement of the corporate value of the Company.

The Company Group has widely contributed to the customers' needs and resolution of social issues in every industry by proving IT systems to a wide range of customers while staying ahead of industry trends and IT technology trends at all times since its foundation and utilizing solid partnerships with IT industry leaders in Japan and overseas with advanced technological capabilities.

With respect to the current environment surrounding the Company Group, in the course of the acceleration of DX (Digital Transformation) (Note 2) in the whole society due to the effects of COVID-19, purposes of IT investments by customers have shifted from its own cost reduction, business streamlining and the like to a creation of a new business model aiming at improving competitiveness, and the needs for IT services are becoming more sophisticated and diverse.

(Note 2) "DX" (digital transformation) refers to utilizing data and digital technology for the generation of a new business model and the reformation of existing business.

Specifically, the Company Group has been required not only to provide the most appropriate solutions while accurately identifying issues faced by customers but also to provide complex and sophisticated value-added services interweaving organically consulting, data analysis, business design/marketing, and operational improvement (BPO) (Note 3), etc. in addition to IT services in order to drive customers' business transformation and solve social issues.

(Note 3) "BPO" (business process outsourcing) refers to the collective outsourcing of a part of a company's business process (from planning/designing to implementation).

In addition, consulting firms with knowledge of their customers' activities on the business front are flexibly expanding their capabilities through M&A and the like, becoming players that handle everything from consulting to introduction of IT systems, and entering markets where previous system integrators, including the Company Group, have taken the lead.

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As such, the business environment surrounding the Company Group has experienced significant structural changes, and it is expected to continue to change in the future.

In order to appropriately respond to such long-term changes in the business environment and further enhance the corporate value of the Company, the Company recognizes that in addition to strengthening and growing the existing businesses, expansion of highly value-added services including consulting, provision of advanced technologies and expansion of business activities in growing markets overseas are necessary and the Company needs to secure engineering resources, points of contact with foreign customers, further personnel exchanges with ITOCHU, and the like to provide the foregoing. The Company believes that it is also necessary to pursue non-organic growth (Note 4).

(Note 4) Non-organic growth refers to growth through capital and business alliance with or acquisition (M&A) of another company.

The Company believes that the early implementation of the above initiatives is necessary to enhance the corporate value of the Company over the medium to long term in the business environment which is expected to change dramatically in the future, in which the Company operates, but since it is necessary for the investments to be made in advance for the early implementation of the above initiatives and such investments entails uncertainty, the business performance of the Company might deteriorate in the short term. In addition, as long as the Company is listed, since the Company needs to pursue the interests of the shareholders of the Company, it is currently difficult for the Company to simultaneously and quickly execute investments that might cause the business performance of the Company to deteriorate in the short term.

Under these circumstances, the Company believes that the Company can steadily realize the above initiatives by utilizing the network and know-how of the ITOCHU Group as well as the management resources and know-how of the Company. With respect to the pursuit of non- organic growth, the Company is considering collaborating with, or acquiring a third party that can contribute to the enhancement of the corporate value of the Company by utilizing the network of the ITOCHU Group, and plans to secure engineering resources and acquire new business opportunities through such collaboration.

However, the Company received an explanation that there is an issue under the current capital relationship between ITOCHU and the Company, in that a part of the profits of the Company Group that is obtained from the management resources allocated to the Company Group by ITOCHU flows out to minority shareholders of the Company, therefore ITOCHU is unable to obtain all the profits obtained from the management resources it allocated, which creates structural conflicts of interest between ITOCHU and minority shareholders of the Company, and as a result, allocation of the management resources to the Company by ITOCHU will be restricted.

The Company reached a conclusion that given the above mentioned business environment surrounding the Company Group, the Company can expect the creation of the following synergies through flexible and steady implementation of management measures, which will lead to further enhancement of the corporate value of the Company, by privatizing the Company through the Transaction, resolving the structural conflicts of interest between ITOCHU and minority shareholders of the Company and enabling further allocation of the management resources to the Company Group by ITOCHU.

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