Net One : Matters Omitted in the Documents Delivered

To Our Shareholders:

Matters Omitted in the Documents Delivered

Main offices

Status of employees

Status of the Company's share acquisition rights, etc.

Consolidated statement of changes in net assets Notes to Consolidated Financial Statements Non-consolidated statement of changes in net assets Notes to Non-Consolidated Financial Statements

For the 37th Fiscal Year

April 1, 2023 to March 31, 2024

Net One Systems Co., Ltd.

Pursuant to the relevant laws and regulations and the Articles of Incorporation of the Company, the above matters are not stated in the documents to be delivered to shareholders who have made a request for issuance of documents.

1

Main offices (as of March 31, 2024)

Company name	Office name	Location
	Head Office	Chiyoda-ku, Tokyo
	Kansai Branch	Yodogawa-ku, Osaka
	Innovation Center	Shinagawa-ku, Tokyo
	Hokkaido Branch	Chuo-ku, Sapporo
	Tohoku Branch	Aoba-ku, Sendai
	Tsukuba Office	Tsukuba-shi, Ibaraki
	Chubu Branch	Naka-ku, Nagoya
	Toyota Office	Toyota-shi, Aichi
	Hokuriku Office	Kanazawa-shi, Ishikawa
Net One Systems Co., Ltd.	Chugoku Branch	Naka-ku, Hiroshima
Takamatsu Office	Takamatsu-shi, Kagawa
	Kyushu Branch	Hakata-ku, Fukuoka
	Okinawa Office	Naha-shi, Okinawa
	Technical Center	Shinagawa-ku, Tokyo
	Quality Assurance &	Ota-ku, Tokyo
	Management Center
	Quality Assurance &
	Management Center West	Joto-ku, Osaka
	Branch
	Kariya Satellite Office	Kariya-shi, Aichi
	Matsuyama Satellite Office	Matsuyama-shi, Ehime
Net One Partners Co., Ltd.	Head Office	Chiyoda-ku, Tokyo
Net One Next Co., Ltd.	Head Office	Chiyoda-ku, Tokyo

2

Status of employees (as of March 31, 2024)

I. Number of employees of the Corporate Group

	Name of segment, etc.	Number of		Comparison to end of
	employees		previous FY
Enterprise Sector	419		Increase of 29
Telecom carrier Sector	220		Decrease of 31
Public Sector	510		Decrease of 17
Enterprise/Telecom carrier/Public common	351		Increase of 26
business
Partner Sector (Net One Partners Co., Ltd.)	191		Increase of 9
Support services for maintenance and operation	362		Increase of 20
Unallocable (Common)	526		Decrease of 5
	Total	2,579		Increase of 31
(Note)	The number of employees includes individuals	dispatched to the Group from outside the Group
	but excludes individuals dispatched outside the Group from the Group.
II. Number of employees of the Company
	Name of segment, etc.	Number of		Comparison to end of
	employees		previous FY
Enterprise Sector	419		Increase of 29
Telecom carrier Sector	220		Decrease of 31
Public Sector	510		Decrease of 17
Enterprise /Telecom carrier/Public common	307		Increase of 23
business
Partner Sector (Net One Partners Co., Ltd.)	-		-
Support services for maintenance and operation	362		Increase of 20
Unallocable (Common)	467		Unchanged
	Total	2,285		Increase of 24
(Note)	The number of employees includes individuals	dispatched to the Company from other companies
	but excludes individuals dispatched from the Company to other companies.

3

Status of the Company's share acquisition rights, etc.

Outline of share acquisition rights under the stock compensation-type stock options plan held by Executive Directors (excluding Outside Executive Directors) of the Company as of end of FY2023

			Class and		Value of	Effective period	Conditions
			number of	Amount to be	assets
		Number of	shares to be	contributed	during which	for the
Name		paid in for
Number of	share	issued upon the	upon the	the share	exercise of	Remarks
(Date of resolution	share
owners	acquisition	exercise of	exercise of	acquisition	share
to issue)	acquisition
	rights	share	the share	rights are	acquisition
		rights
			acquisition	acquisition	exercisable	rights
			rights		rights
Net One Systems	1 Executive		2,200 shares	90,000 yen
Co., Ltd.	Director			July 3, 2012
(excluding		of common	per share	1 yen per
FY2012 share	22	to July 2,	(Note 1)	(Note 2)
Outside	stock of the	acquisition	share
acquisition rights		2042
Executive		Company	right
(June 14, 2012)
Directors)
Net One Systems	1 Executive		2,800 shares	62,700 yen
Co., Ltd.	Director			July 2, 2013
(excluding		of common	per share	1 yen per
FY2013 share	28	to July 1,	(Note 1)	(Note 2)
Outside	stock of the	acquisition	share
acquisition rights		2043
Executive		Company	right
(June 13, 2013)
Directors)
Net One Systems	2 Executive		7,200 shares	56,400 yen
Co., Ltd.	Directors			July 4, 2014
(excluding		of common	per share	1 yen per
FY2014 share	72	to July 3,	(Note 1)	(Note 3)
Outside	stock of the	acquisition	share
acquisition rights		2044
Executive		Company	right
(June 17, 2014)
Directors)
Net One Systems	2 Executive		5,000 shares	71,700 yen
Co., Ltd.	Directors			July 3, 2015
(excluding		of common	per share	1 yen per
FY2015 share	50	to July 2,	(Note 1)	(Note 3)
Outside	stock of the	acquisition	share
acquisition rights		2045
Executive		Company	right
(June 16, 2015)
Directors)
Net One Systems	2 Executive		7,400 shares	53,100 yen
Co., Ltd.	Directors			July 5, 2016
(excluding		of common	per share	1 yen per
FY2016 share	74	to July 4,	(Note 1)	(Note 3)
Outside	stock of the	acquisition	share
acquisition rights		2046
Executive		Company	right
(June 16, 2016)
Directors)
Net One Systems	2 Executive		4,200 shares	101,400 yen
Co., Ltd.	Directors			July 4, 2017
(excluding		of common	per share	1 yen per
FY2017 share	42	to July 3,	(Note 1)	(Note 3)
Outside	stock of the	acquisition	share
acquisition rights		2047
Executive		Company	right
(June 15, 2017)
Directors)
Net One Systems	2 Executive		3,000 shares	175,400 yen
Co., Ltd.	Directors			July 3, 2018
(excluding		of common	per share	1 yen per
FY2018 share	30	to July 2,	(Note 1)
Outside	stock of the	acquisition	share
acquisition rights		2048
Executive		Company	right
(June 14, 2018)
Directors)
Net One Systems	2 Executive		2,800 shares	287,200 yen
Co., Ltd.	Directors			July 2, 2019
(excluding		of common	per share	1 yen per
FY2019 share	28	to July 1,	(Note 1)
Outside	stock of the	acquisition	share
acquisition rights		2049
Executive		Company	right
(June 13, 2019)
Directors)

4

			Class and		Value of	Effective period	Conditions
			number of	Amount to be	assets
		Number of	shares to be	contributed	during which	for the
Name		paid in for
Number of	share	issued upon the	upon the	the share	exercise of	Remarks
(Date of resolution	share
owners	acquisition	exercise of	exercise of	acquisition	share
to issue)	acquisition
	rights	share	the share	rights are	acquisition
		rights
			acquisition	acquisition	exercisable	rights
			rights		rights
Net One Systems	2 Executive		3,200 shares	341,400 yen
Co., Ltd.	Directors			July 2, 2020
(excluding		of common	per share	1 yen per
FY2020 share	32	to July 1,	(Note 1)
Outside	stock of the	acquisition	share
acquisition rights		2050
Executive		Company	right
(June 11, 2020)
Directors)
Net One Systems	2 Executive		4,500 shares	344,600 yen
Co., Ltd.	Directors			July 13,
(excluding		of common	per share	1 yen per
FY2021 share	45	2021 to July	(Note 1)
Outside	stock of the	acquisition	share
acquisition rights		12, 2051
Executive		Company	right
(June 23, 2021)
Directors)

(Notes) 1. (1) Persons who have received allotment of share acquisition rights (herein, "Share Acquisition Right Holders") may only execute the share acquisition rights as one lump transaction that shall be limited to the period from the day following the day on which any position of Director, Audit & Supervisory Board Member, Executive Officer or employee (excluding consigned employees) of the Company or the Company's subsidiary during the exercise period of the share acquisition rights has been forfeited until the day on which ten days expire (if the tenth day falls on a holiday, then the next business day).

1. 1. In the event that a Share Acquisition Right Holder dies while serving or being employed in any position of Director, Audit & Supervisory Board Member, Executive Officer or employee (excluding consigned employees) of the Company or the Company's subsidiary, or between the period from the day following the day on which such position has been forfeited until the day on which ten days expire, the heir of that person may only execute the share acquisition rights as one lump transaction that shall be limited to the period from the day that follows the day on which that person died until the day on which six months expire.
2. The share acquisition rights owned by one (1) Executive Director were granted prior to appointment as Executive Director.
3. The share acquisition rights owned by two (2) Executive Directors were granted prior to appointment as Executive Director.

5

Consolidated statement of changes in net assets

(April 1, 2023 to March 31, 2024)

(unit: million yen)

		Shareholders' equity
	Capital	Capital	Retained		Treasury
	stock	surplus	earnings		stock
Balance as of	12,279	19,453	47,312		(3,017)
April 1, 2023
Changes of items during the
period
Dividends from surplus			(6,041)
Profit attributable to			13,720
owners of parent
Purchase of treasury					(7,499)
stock
Cancellation of treasury		(7,700)			7,700
stock
				186
Disposal of treasury stock		20
Transfer from retained
earnings to capital		7,680	(7,680)
surplus
Net changes of items
other than shareholders'
equity
Total changes of items	-	-	(0)		386
during the period
Balance as of	12,279	19,453	47,312		(2,630)
March 31, 2024

Total

shareholders'

equity

76,029

(6,041)

13,720

(7,499)

-

206

-

385

76,414

6

	Accumulated other
	comprehensive income	Share
		Total
	Deferred	accumulated	acquisition
	gains or losses	other	rights
	on hedges	comprehensive
		income
Balance as of	(408)	(408)	143
April 1, 2023
Changes of items during
the period
Dividends from surplus
Profit attributable to
owners of parent
Purchase of treasury
stock
Cancellation of treasury
stock
Disposal of treasury stock
Transfer from retained
earnings to capital
surplus
Net changes of items other	676	676	(13)
than shareholders' equity
Total changes of items	676	676	(13)
during the period
Balance as of	268	268	130
March 31, 2024

Total net

assets

75,764

(6,041)

13,720

(7,499)

-

206

-

663

1,049

76,814

7

Notes to consolidated financial statements

(Significant matters related to the basis of preparation of consolidated financial statements)

1. Matters related to the scope of consolidation
(1)	Number of consolidated subsidiaries	2 companies
	Names of consolidated subsidiaries	Net One Partners Co., Ltd.
		Net One Next Co., Ltd.
(2)	Names, etc. of non-consolidated subsidiaries
	Names of non-consolidated subsidiaries	Net One Business Operations G.K.
		Net One Systems USA, Inc.
		Net One Systems Singapore Pte. Ltd.
	(Reason for excluding from the consolidation)
	Those non-consolidated subsidiaries are small in size and their total assets, net sales, profit or
	loss for the Company's equity interest, and retained earnings for the Company's equity interest
	do not have a significant effect on the consolidated financial statements.
2. Matters related to application of equity method
(1)	Number of associates accounted for using equity method	None

1. Non-consolidatedsubsidiaries (Net One Business Operations G.K., Net One Systems USA, Inc., Net One Systems Singapore Pte. Ltd.) are excluded from the scope of application of the equity method, as their profit or loss for the Company's equity interest and retained earnings for the Company's equity interest do not have a significant effect on the consolidated financial statements and their impact are immaterial as a whole.

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3. Matters related to accounting policies

1. Basis and method of valuation for significant assets

1. Securities

Available-for-sale securities

Securities other than shares, etc. that do not have a market price

Stated at market value. (Net unrealized holding gains or losses, net of the applicable income taxes, are directly included in a component of net assets. The cost of securities sold is measured by the moving average method.)

Shares, etc. that do not have a	Stated at cost based upon the moving average
market price	method.
II. Derivatives	Stated at market value
III. Inventories
Merchandise	Stated at cost based upon the moving average
	method (The balance sheet amount is adjusted by
	writing down the book value where the
	profitability declines.)

Costs on uncompleted construction contracts

Stated at cost based upon the specific identification method (The balance sheet amount is adjusted by writing down the book value where the profitability declines.)

1. Depreciation method for significant depreciable assets
   I. Property, plant and equipment (excluding lease assets)

Declining balance method is applied for the Company and its consolidated subsidiaries in Japan.

The major useful lives of assets are:

Buildings	3 to 18 years
Tools, furniture and fixtures	2 to 20 years

II. Intangible assets (excluding lease assets)

Straight line method is applied for the Company and its consolidated subsidiaries in Japan.

The major useful lives of assets are:

Software for own use	5 years
Software for sale	3 years

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1. Lease assets
   Lease assets in finance leases that transfer ownership to the lessee

Lease assets are depreciated using the same manner to the accounting for the non-current assets owned by the Company.

Lease assets in finance leases that do not transfer ownership to the lessee

Lease assets are depreciated using the straight line method over the corresponding lease terms as useful lives with their residual values to be zero.

1. Basis for significant reserves
2. 1. Allowance for doubtful accounts
      The Company and its consolidated subsidiaries recorded allowance for doubtful accounts to provide provision for possible losses on receivables, loans receivable, etc., by the historical uncollectible rate for ordinary receivables and with consideration of individual collectability of specific doubtful receivables from debtors in financial difficulties.

1. Provision for bonuses
   The Company and its consolidated subsidiaries recorded provision for bonuses to accrue the amount for bonuses to employees of the Company for the fiscal year.

1. Provision for directors' bonuses
   The Company and its consolidated subsidiaries recorded provision for directors' bonuses to accrue the amount for bonuses to Executive Directors of the Company for the fiscal year.

IV Provision for executive officers' retirement benefits

In order to provide for the payment of retirement benefits to its Executive Officers, the Company recorded an estimated amount as of the end of the fiscal year ended March 31, 2024, based on the Company's internal regulations.

(4) Recognition standard for significant revenues and expenses

The major performance obligations in the major businesses of the Company and its consolidated subsidiaries and the usual time point at which revenue is recognized are described in the "Notes to revenue recognition 2. Useful information in understanding revenue."

1. Other significant matters related to the basis of preparation of consolidated financial statements
2. 1. Bases for translation of significant foreign currency denominated assets and liabilities into Japanese yen
      Monetary assets and liabilities denominated in foreign currencies are translated into Japanese yen at the spot exchange rate on the closing date of the accounting period, with translation difference charged to profit or loss.

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