Ns Solutions Corp TSE:2327

NS : Notice Concerning the Opinion of the Company’s Board of Directors on Shareholder Proposals

Published

Source: MarketScreener

Note: This document has been translated from the Japanese original for reference purpose only.

It the event of any discrepancy between this translated document and the Japanese original, the original shall prevail.



To Whom It May Concern:

May 11, 2026

Company Name: NS Solutions Corporation Representative: Kazuhiko Tamaoki Representative Director & President

(Code: 2327, TSE Prime Market, NSE, FSE) Contact: Atsushi Tamura

General Manager, General Affairs Department,

Administration Division (TEL: (+81)3-6899-6000)

Notice Concerning the Opinion of the Company's Board of Directors on Shareholder Proposals

NS Solutions Corporation (the "Company") had received, as of April 9, 2026, from 3D WH OPPORTUNITY MASTER OFC - 3D WH OPPORTUNITY HOLDINGS, a shareholder of the Company (the "Proposer"), a written document stating that the Proposer would make shareholder proposals (the "Shareholder Proposal(s)") regarding agenda at the 46th Annual General Meeting of Shareholders scheduled to be held in June of this year (the "Shareholder Proposal Document"). At the meeting of the Company's Board of Directors held today, the Company resolved to oppose the Shareholder Proposals, and hereby gives notice as set forth below.

  1. Details and Reasons for the Shareholder Proposals
    1. Proposed Agenda Items

      1. Partial amendment to the Articles of Incorporation (prohibition of deposits with parent company, etc.)

      2. Partial amendment to the Articles of Incorporation (disclosure regarding contribution of funds to parent company, etc.)

    2. Outline of the Proposals and Reasons for the Proposals

      As stated in the Attachment. As the Shareholder Proposal Document have been submitted only in Japanese, the relevant descriptions are translated by the Company.

  2. Opinion of the Company's Board of Directors on the Shareholder Proposals
(I) Opinion of the Company's Board of Directors

The Company's Board of Directors opposes all Proposed Agenda Items and Proposals under the Shareholder Proposals.

(II) Reasons for opposing the Shareholder Proposals
  1. Summary of Opposing Opinion

    The Company positioned fiscal year 2025, the 25th anniversary of its founding, as the year of its "second founding", and, in order to launch new activities to embark on the next stage of its journey, announced on April 26, 2024, the "NSSOL 2030 Vision" to map out the future the Company aspire toward. On February 28, 2025, the Company formulated and announced the "2025-2027 Medium-term Business Plan" as a specific execution plan for the first three years toward realizing this vision, and, in order to accomplish a transformation of its business model and achieve further higher profitability during such three-year period, the Company will actively conduct human capital investments, growth investments, and M&A. In this Medium-term Business Plan, the Company has established a cash allocation policy regarding funds on hand and funds obtained from operating cash flow during such three-year period (the "Cash Allocation Policy"), and will allocate these funds to the investments above, shareholder returns, ordinary working capital and other related measures (the "Growth Investments and Related Measures"), and will consider and implement various measures that contribute to enhancing the Company's corporate value.

    As a specific measure for the Growth Investments and Related Measures, in the fiscal year ended March 2026, the Company executed the acquisition of INFOCOM CORPORATION (55.0 billion yen). Including the effects of the Growth Investments and Related Measures using funds, the Company secured a return on equity (ROE) for the fiscal year ended March 2026 of 11.4% (year-on-year: +0.5%), a level exceeding the cost of capital, and will continue to work to further improve capital efficiency toward achieving an ROE of around 13%, which is targeted in the Medium-term Business Plan. With respect to dividends as well, the Company plans to set the annual dividend for the fiscal year ended March 2026 at

    85.0 yen per share, representing the fifth consecutive fiscal year of dividend increases.

    The Company deposits a portion of its funds on hand in the CMS (cash management system) operated

    by Nippon Steel Corporation ("Nippon Steel"), the Company's parent company (the "CMS"). The CMS is used as a temporary place of deposit until the Company executes the Growth Investments and Related Measures. The Company has selected the use of the CMS as such temporary place of deposit because the terms are favorable to the Company from the perspectives of flexibility of deposits and withdrawals, safety, and comparison with market interest rates. If the use of the CMS were prohibited, since market interest rates on bank deposits and similar instruments are lower than those under the CMS, such fund management could, conversely, risk harming the Company's corporate value and the common interests of shareholders.

    The Company aims to maintain and improve capital efficiency through the Growth Investments and Related Measures under investment discipline, such as by setting a hurdle rate exceeding the cost of capital, and believes that the use of the CMS does not impede the Company's capital efficiency or appropriate allocation of funds.

    In addition, in order to ensure that the use of the CMS does not harm the Company's interests, the "Parent Company Transactions Deliberation Committee", consisting of all independent directors, deliberates and examines such transactions, confirms that the relevant transaction does not harm the Company's interests, and, based on the results thereof, the Board of Directors (*) approves such transaction.

    Furthermore, providing in the Articles of Incorporation, which are the fundamental rules of the company, for the usability of the CMS, which is one means of fund management, and for the manner of disclosure regarding fund management, may constrain flexible business execution and management judgment based on the funding situation, investment environment, etc., and the Company believes that such matters are not suitable for stipulation in the Articles of Incorporation.

    Based on the foregoing, the Company's Board of Directors opposes each of the Shareholder Proposals, which are premised on prohibiting the use of the CMS or on the assumption that the CMS impedes the Company's capital efficiency and allocation of funds.

    The details of the reasons for opposition to each Shareholder Proposals are explained below.

  2. Partial Amendment to the Articles of Incorporation (Prohibition of Deposits with Parent Company, Etc.)
  1. Opinion of the Company's Board of Directors

    The Board of Directors opposes this Shareholder Proposal.

  2. Reasons for Opposition
    1. The Company's Cash Allocation Policy

      The Company aims to allocate funds to the Growth Investments and Related Measures based on the Cash Allocation Policy and to realize medium-term growth and enhancement of corporate value.



      Under the Cash Allocation Policy, for the three fiscal years from the fiscal year ending March 2026 to the fiscal year ending March 2028 (FY2025-FY2027 plan), the Company's policy is to allocate a total of approximately 267.0 billion yen, from funds on hand and operating cash flow, etc. during such three fiscal years, to human capital investments, growth investments, M&A, and shareholder returns.

      Under this policy, the Company is specifically executing the Growth Investments and Related Measures, and, in the fiscal year ended March 2026, executed the acquisition of INFOCOM CORPORATION (55.0 billion yen). Including allocations to other growth investments, M&A, etc., the balance of cash and deposits held at fiscal year-end decreased from 192.9 billion yen in the fiscal year ended March 2025 to

      108.8 billion yen in the fiscal year ended March 2026, and the Company's policy is to continue allocating these funds to the Growth Investments and Related Measures.

      The Shareholder Proposal states that the balance of deposits has effectively become fixed; however, as described above, the Company has presented a policy of allocating funds to the Growth Investments and Related Measures, and the funds are actually being utilized through the execution of the Growth Investments and Related Measures; therefore, the funds have not become fixed.

      Under the Cash Allocation Policy, the Company plans to hold approximately 90.0 billion yen as ordinary working capital as of the end of March 2028, equivalent to 2.4 months of monthly sales. The Company believes that this level of ordinary working capital is appropriate taking into account trends in the Company's current cash conversion cycle and the levels of peer companies with relatively similar business models.

      With respect to shareholder returns as well, the Company changed its dividend payout ratio from 30% to 50% from the fiscal year ended March 2025. Including the dividend increase resulting from this change in dividend policy, the Company plans to achieve dividend increases for five consecutive fiscal years from the fiscal year ended March 2022, as follows:

      Fiscal year ended March 2021: 26.25 yen/share; fiscal year ended March 2022: 33.00 yen/share; fiscal year ended March 2023: 37.50 yen/share; Fiscal year ended March 2024: 42.50 yen/share; fiscal year ended March 2025: 74.00 yen/share; fiscal year ended March 2026: 85.00 yen/share (planned) (Retroactively adjusted to reflect the stock split dated July 1, 2024)

      From the perspective of capital efficiency, the Company's return on equity (ROE) for the fiscal year ended March 2026 was 11.4%, already exceeding the Company's cost of capital by approximately 3-4%; nevertheless, in order to achieve further improvement in capital efficiency, the Company aims to achieve ROE of around 13% in the fiscal year ending March 2028 through the Growth Investments and Related Measures described above.

      In the context of recent corporate governance reforms, as a general matter, concerns have been raised as to whether listed companies are not effectively utilizing cash and deposits as growth investments and are holding excessive funds on hand, and whether such holding of excessive funds on hand is lowering capital efficiency. However, as described above, under the Cash Allocation Policy, the Company aims to maintain and improve capital efficiency through the execution of the Growth Investments and Related Measures based on hurdle rates exceeding the cost of capital, and is engaging in management that takes such concerns into account.

    2. The CMS Does Not Impede Improvement of Capital Efficiency or Appropriate Allocation of Funds