This document has been translated from the Japanese original for reference purposes only. In the event of any
discrepancy between the English version and the Japanese original, the original version shall prevail

CORPORATE GOVERNANCE

ZIGExN Co.,Ltd.

Last Updated: January 18, 2024
ZIGExN Co., Ltd.
Joe Hirao, Representative Director,
Operating Officer and CEO
Contact: +81-3-6432-0353
Securities code: 3679
https://zigexn.co.jp/
The following is a report on the state of corporate governance at ZIGExN Co., Ltd. (the “Company”).
I. Basic Views on Corporate Governance, Capital Structure, Corporate Attributes, and Other Basic Information
１． Basic Views
The Company has established Vision, Management Philosophy, and Purpose as the corporate principles to beshared with each executive or employee for the Code of Conduct.
The Company aims to materialize the Company’s sustainable growth and improve its medium- to long-term
corporate value for the Corporate Philosophy and Purpose. The Company seeks to enhance the corporate value
through corporate governance established by the Company providing right and quick decision-making tomanagement and both highly transparent management and monitoring functions to meet the expectations of all of
its stakeholders, including its shareholders.

<Basic Principle>
ZIGExN aims at maximizing opportunities in life and seeks harmony and sustainable development with society byproviding aplatform to connect to the world through the internet.
<Management Principle>
OVER the DIMENSION!
Overturning the world's common assumptions and values through creating services and acompany with overwhelming advantages.
<Purpose> Our reason to exist
Update Your Story:
Updating the future of everyone at the crossroads of life.

【Reasons for Non-compliance with Each Principle of the Corporate Governance Code】【General Principles 2.6 Roles of Corporate Pension Funds as Asset Owners】
Currently, the Company does not have any plan such as a defined-benefit pension plan, but the Company
is considering installing a defined-benefit pension plan and hiring the operator as a part of welfare.
【Supplementary Principal 3.1.3 Disclosure under TCFD】
The Company currently does not make any disclosures under the TCFD because the Company considers
the impact of climate change on its business to be limited. However, we view addressing climate change
issues as an important initiative for stable economic development and securing the foundations of people's
lives. We will continue to collect and analyze the necessary data and actively consider the information thatshould be disclosed.
【Supplementary Principal 4.1.3 Successor Upbringing】

The Company has no health concerns with its CEO, has no immediate considerations for a replacement, andhas not made any clear succession plan. However, the Company is focusing on upbringing current membersof the Board of Directors and Operating Officers to work as successors or representatives throughinstructions by the CEO or Outside Members of the Board of Directors, expanding their roles andresponsibilities, or any other educational or training programs.
【Supplementary Principal 4.8 Independent Outside Member of the Board of Directors】and【Supplementary Principal 4.10.1 Leveraging Optional Systems】
At the general shareholder’s meeting held on June 2023, two (2) Independent Outside Members of theBoard of Directors have been appointed. In terms of the composition ratio of the Board of Directors,
independent Outside Members of the Board of Directors are not the majority but when three (3) Outside
Audit and Supervisory Board Members are included, the total participants outside members for the Board of
Directors meeting are the majority and it leads to keep the independence. Independent Outside Members of
the Board of Directors provide frank proposals and advice within the Board of Directors. The Company, asa principal, obtains the understanding of the Independent Outside Member of the Board of Directors in theboard resolutions and determines that even without the establishment of independent committees, ourstructure enables independent external directors to fulfill their roles and responsibilities adequately.

【Disclosure Based on the Principles of the Corporate Governance Code】 Updated【Principle 1-4 Cross-Shareholdings】
The company, in principle, does not plan on holding cross-shareholding. However, in cases where it canbe determined that it contributes to the improvement of the company's business value, the company may
strategically hold shares of target companies after discussing with the Board of Directors whether the
benefits outweigh the capital cost.
Furthermore, even after the acquisition, the board of directors will annually review the appropriateness ofthe holding objectives, the benefits and risks associated with the holdings in relation to the capital cost,and if necessary, make appropriate sales in accordance with the importance of the held shares.
When exercising voting rights, the company will comprehensively consider whether it aligns with thecompany's holding policy and contributes to the sound management and enhancement of the corporate
value of the issuing company. Based on this assessment, the company will make a judgment of approval ordisapproval.
【Principle 1-7 Related Party Transaction】
When the Company engages in a transaction with its member of the Board of Directors, Audit andSupervisory Board members or major shareholders (i.e., related party transactions), the Board of Directors’
meeting approves the transactions through the appropriate process under the Companies Act, related laws
and the Company’s rule. Moreover, to monitor the transaction, the Company surveys to understand thesituation once every year and builds the management system for the related party.

【Principle 2-4 Workplace Diversity, inclusion women’s participation 】
The Company’s Group supports promoting women’s participation and workplace diversity, utilizing thewide range of unique traits, such as race, gender, age, employment circumstance, various attributes, senseof values, or varying ideas, possessed by our employees since there are subsidiaries in not only Japan but
also the Socialist Republic of Vietnam, Malaysia, the kingdom of Cambodia, the Republic of Kenya andthe Republic of Zambia.
Regarding employee development, the Company considers grooming new leaders and individuals’ growth
to be important and promotes young talented employees in a higher position and the CEO directly conducts
management training for managerial employees himself. To accelerate individual growth speed, theCompany conducts performance reviews for all employees on their ability and the results every quarter.
To encourage various workstyles, the Company conducts flexible work arrangements including remote
work, the short-time work hour system, and the paid-hour system, and keeps expanding other various
systems.
Regarding the situation of keeping diversity, as of the end of March 2023, the ratio of women in theworkforce is approximately 39.4% (with a management position ratio of around 11.2%), non-Japaneseemployees are approximately 0.9% (with a management position ratio of 0%), and mid-career hires stands
at approximately 83.8% (with a management position ratio of 87.1%). In the company, as promoted in our
media platform “OVERS” (https://overs.zigexn.co.jp/), we value individuals who can share our values,
regardless of gender, nationality, or mid-career recruitment. On top of that, we actively conduct recruitment
activities that prioritize diversity, recognizing its importance. Moreover, we have developed a plan toachieve a female management ratio of 20% by the end of March 2025.
【Principle 3-1 Enhancement of Disclosure on Information】（i）The Company Philosophy, Management Strategy and Management Plan
The Company establishes the Vision and the Company Philosophy stipulated in “1. Basic Views” of “Basic Views
on Corporate Governance, Capital Structure, Corporate Attributes, and Other Basic Information” as above.
The Company set forth and published dated as of 14th May 2021, the second mid-term management plan, “Z
CORE”, for five (5) years up to March 2026.
■the 2nd Mid-Term Management Plan, “Z CORE”
https://zigexn.co.jp/ir/management_plan/（ii）Basic Views and Policy on Corporate Governance
The Company’s basic views on corporate governance are described in “1. Basic Views” as above.
（iii）The Policy and Process of fixing remuneration for members of the Board of Directors and Audit andSupervisory Board members.
It is as stipulated below in “Remuneration for Member of the Board of Director ②Whether there is an implemented
Policy of the Amount of Remuneration or its methods”.
（iv）and（v） Policy and Procedures for Appointing Top-Level Executives and Nominating Candidates for
Members of Board of Directors and Audit Supervisory Board Members and Explanation with Respect to
Individual Appointments and Nominations.
Regarding the policy decisions, procedures, and the reason for candidates of members of the Board of Directors
and Audit and Supervisory Board members, it is stipulated in “2. Related the functions of Execution ofBusiness, Audits & Monitoring, Appointments and fixing Remuneration (the Summary of Current Corporate
Governance System) “of “II. Current Situation of Management Decision Making, Organizational Management
Structure for Execution and Monitoring and Other Corporate Governance System” as below and also regarding
the reason of candidates of members of the Board of Directors, it is stipulated in the notice of convocation of thegeneral meeting of shareholders.
Moreover, the Board of Directors meeting appoints an employee as the operating officer who leads tocontinuously expanding reproductions and also is qualified as a good role model for employees and as thecandidate of the executive.

【Principle 3.1.3 Working on for Sustainability】
Since the Company was founded, The Company aimed to “Maximizing Opportunities in Life” and seeks harmony

and sustainable development with society by providing a platform to connect people, information, and companies
through the internet. The Company publishes the actions for sustainability, “ZIGExN’s Materiality”, on the
Company’s official website.
https://zigexn.co.jp/sustainability/
Our investment strategy has been disclosed in the Integrated Report 'ZIGExN REPORT 2022'（https://zigexn.co.jp/ir/integrated_report/）which was released in August 2022. Our strategy regarding investment in
human capital is individually listed in the section titled ‘Human resource strategy integrated with management strategy’.
Regarding investment in intellectual property, various intellectual property rights arise in connection with the websites
we operate and the systems we use to operate our services. Because the main issue in M&A will be whether theserights belong to us or can be used by us without restrictions, it is included within the investment strategy mentioned in
the Integrated Report, specifically under the section of "Expansion and Reproduction Spiral through M&A" and otherinvestment strategies.
The status of disclosure in accordance with TCFD is stated in the section titled "Reasons for Non-Implementation ofEach Principle of the Corporate Governance Code" in our report.
【Supplementary Principal 4.1.1 Authorization of the Board of Director’s Meeting and Scope of Authority to theManagement】
The Board of Directors determines important executions and operations of the Company pursuant to related laws andthe Company’s rules and also monitors the execution and operation by executive directors and operating officers.
Moreover, the Board of Directors Meeting has established a Business Execution Committee to increase themanagement vitality by enhanced mobility and flexibility－ “Business Management Meeting”
Constituents： Operating officers, including full-time members of the Board of Directors, Business Officers of eachbusiness and subsidiaries, and full-time outside Audit and Supervisory Board members
Purpose: To report the progress of the management plan and to share and discuss the Company Group’s businessstrategy－ “Investment Management Meeting”
Constituents： Operating officers, including full-time members of the Board of Directors, Candidates for the Business
Officers of investment business, and full-time outside Audit and Supervisory Board members
Purpose: To make investment decisions by sharing the report of due diligence and valuation with respect to Mergers
and Acquisitions and others.
【Principle 4-9 Criteria for Independence of Independent Outside Member of the Board of Directors and the Quality】
The Company set forth criteria for independence of Independent Outside Member of the Board of Directors
stipulated in “2. Items related to Organizational Structure and Organizational Management 【related to independent
directors】 “ of “Ⅱ Organizational Management Structure for Management Decision Making, Executions andMonitoring and other Corporate Governance System” and, for the selection of the Company’s Independent Outside
Member of the Board of Directors, the Company considers it is very important for a person to be sufficiently
qualified to take part in the Board of Director meeting.

【Supplementary Principal 4.11.1 Policy and Process of the Selection of Members of the Board of Directors with askills matrix】
The Company discloses the skills matrixes of each member of the Board of Directors on presentation materials for thefinancial results briefing and the Integrated Report and appoints a person who has management experience at othercompanies as an Outside member of the Board of Directors. Outside Independent members of the Board of Directors
assist members of the Board of Directors meeting to make appropriate decisions and also support strengthening thecorporate governance by advocating their ideas with respect to a resolution or deliberation on the Board of Directors
meeting based on their varieties of viewpoints, extensive knowledge, deep insights, and noble personalities.
【Supplementary Principal 4.11.2 Disclosure of the Status of Director’s Concurrent Positions】
The current status of members of the Board of Directors and Audit and Supervisory Board members is as
described in "[Directors]: Relationship to the Company (2)" and "[Audit and Supervisory Board members]:
Relationship to the Company (2)" of section “II Management Administration Organization Related to DecisionMaking, Business Execution, and Oversight in Management and Other Corporate Governance Systems"【Supplementary Principal 4.11.3 Board of Directors’ Meeting Effectiveness Assessment】
As of June 2023, the Company analyzed and assessed the whole Board of Directors with respect to operations
and agenda of all meetings of the Board of Directors for the last one (1) year based on the surveys of all
members of the Board of Directors and of the Board of Audit and Supervisory members against “the Structureof the Board of Director’s meeting”, “the Board of Directors’ Meeting Operation ” and “the Effectiveness of theBoard Meeting” and others including the status of internal audit and supporting the Board Secretariat.
The Company enhances the Board of Directors’ Meeting effectiveness by continuously improving concerned
items from the survey result, such as more sufficient and productive discussions about “supervision insuccession plan”, “Training for executives, etc.”. The Company continues to analyze and assess the overall
effectiveness of the Board of Directors Meetings periodically.
【Supplementary Principle 4.14.2. Training of Directors】
To enhance wholesome corporate value, the Company provides opportunities for new directors to understandmore deeply the Company’s business and its details, and also for members of the Board of Directors and Audit
and Supervisory members and Operating Officers to acquire necessary knowledge such as corporate governance,internal controls, compliance, and others upon individual demands, although basically, each member keeps
learning necessary knowledge by himself/herself to take a role and responsibility for each position.
【Principle 5.1. Policy for Constructive Dialogues with Shareholders】
The Company strives to grow and enhance opportunities for dialogues with shareholders through thefollowing activities.
（i）Appointment of Directors/Operating officers in charge of constructive dialogues with shareholders
To carry out constructive dialogues with investors to contribute to sustainable corporate growth andenhance corporate values in the medium- to long-term as much as possible within a limited time, mainly itis the Company’s Representative Directors, Operating Officer, and CEO, and members of Board of
Directors who strive to provide many opportunities for the dialogues. Moreover, in a general meeting ofshareholders, the Representative Director, who is the chairman of the meeting, determines who is the
respondent against a question from a shareholder. Respondents are the Representative Director or a memberof the Board of Directors and Operating Officers but, considered as reasonable by the Representative
Director, a respondent could be the Outside member of the Board of Directors or Outside Audit andSupervisory members.
（ii）Method of organic communications among internal sections, assisting dialogues.
The Corporate Management Division is in charge of investor relations (IR) in the Company and on an asneeded basis, corporates with the Corporate Strategy Division, other business departments, and subsidiaries.
（iii）Designing dialogue methods beyond individual meetings
The Company implements IR activities through not only general meetings of shareholders and individual
meetings, but also quarterly financial results briefings, small-scale briefings what we call “SMALLMEETING”, teleconferences with overseas investors, briefings for individual investors, and participation in
conferences organized by securities firms. The Company strives to implement more IR activities from long-term and various points of view based on addressing shareholder concerns.
（iv）Methods of Right and Effective Feedback and Concerns through dialogues from shareholders to toplevel executives and the Board of Directors.
The Company reports feedback and concerns provided by shareholders and investors through dailyinquiries, financial result briefings, or individual meetings to the top-level executives including outside
members of the Board of Directors and Outside Audit and Supervisory members.
（v）Control Methods of Insider Information through Dialogues
To prevent leakage of financial results and ensure fairness, the Company has established a quiet period as
the Company refrains from answering any questions or commenting on financial results. The Company also
strives to let all employees, without fail, understand how to handle insider information through all company
meetings【Addressing the realization of management with awareness of cost of capital and stock prices】
The company, under the long-term policy of maximizing the primary source of corporate value, which is
free cash flow, has set performance targets for the fiscal year ending in March 2026, aiming for revenue
exceeding 35 billion yen and EBITDA surpassing 10 billion yen. From the perspective of cost of capital, thecompany is actively utilizing borrowings from financial institutions within a range that does not
significantly compromise safety, aiming to optimize the capital structure. By enjoying the financial leverage
effects such as tax benefits from liabilities and improvement in ROE, we are working towards reducing the
WACC. Additionally, we have set a fundamental policy that the upper limit for share buybacks in thefollowing period will be the amount derived by deducting strategic investment and total dividends from theattributable net income to the parent company's owners. This approach is geared towards improving capitalefficiency and returning value to shareholders.
Furthermore, the company has implemented measures to enhance incentives for the directors andemployees, such as issuing performance target-linked stock options (paid-in stock options). These initiatives
aim to boost corporate value through stock price appreciation. In consideration of the influence of foreign
institutional investors in achieving appropriate stock price formation and aspects such as fair disclosure, we
are actively promoting the expansion of English disclosures, simultaneous Japanese-English disclosures,and organizing events for individual and institutional investors. These efforts are aimed at ensuring
diversity among shareholders.

２．Capital structure
Percentage of Shares held by Foreign
10% or more but less than 20%
Investors[Major Shareholders]
Name
Jogen Co., Ltd
The Master Trust Bank of Japan, Ltd. (trust account)
Joe Hirao
Custody Bank of Japan, Ltd. (trust account)
BBH FOR FIDELITY LOW-PRICED STOCKFUND（PRINCIPAL ALL SECTOR SUBPORTFOLIO ）SSBTC CLIENT OMNIBUS ACCOUNT
CLEARSTREAM BANKING S.A.
SBI SECURITIES Co.,Ltd.
Hiroyuki Yoshioka
STATE STREET BANK AND TRUST CLIENT OMNIBUS
ACCOUNT OM02 505002

Number of shares
Ownershipheld(shares)
ratio (%)
48,900,500
47.01
7,414,700
7.12
5,054,000
4.85
4,075,500
3.91
3,483,901
3.34
1,366,030
1,316,627
1,161,511
983,000
750,000

1.31
1.26
1.11
0.94
0.72

Existence of Controlling Shareholders(excluding parent company)―――

Existence of Parent company

None

Supplementary explanation

1. The above information about the percentage of shares held by foreign investors and Description of Major
Shareholders has been set forth dated as of March 31, 2023. In Addition to the above, the Company owns
7,698,090 of its shares (6.89%) as treasury stock.
2. According to the amended report of the major shareholdings published on May 11, 2022, Fidelity
Investments Limited indicated that FMR LLC owned 5,691,285 shares (for an ownership ratio of 5.10%) as
of April 29, 2022. However, the Company was unable to verify the effective number of shares held since asof the end of this fiscal year and therefore, they are not included under Major Shareholders above.
３． Corporate attributes
Listed stock market and market section

Tokyo (Prime)

Fiscal year ends

MarchType of businessInformation and telecommunications

Number of employees (consolidated) asof the end of the previous fiscal year

1000 or more

Sales (consolidated) as of the end of theprevious fiscal year
Number of consolidated subsidiaries asof the end of the previous fiscal year

10 billion or more but less than 100 billion yen
10 or more but less than 50

４．. Guidelines on policies for the protection of minority shareholders in cases such as transactions with controllingshareholders―――
５．Other specific conditions that could have significant impacts on corporate governance―――
Ⅱ. Management Administration Organization for Management Decision Making, Executions and Monitoring and Other Corporate
Governance Systems
１． Organization structures and organizational operations
Organizational form

Company with Audit and Supervisory Board members【Members of the Board of Directors】
Limited Number of Members of theBoard of Directors pursuant to the
Articles of Incorporation
Term of Members of the Board of
Directors pursuant to the Articles ofIncorporationNone

1 yearChairperson of the Board of
Directors
Number of members of the Boardof Directors
Election or Non Election of Outside
Members of the Board of Directors
Number of Outside Members of theBoard of Directors
Number of Outside Members of
the Board of Directors appointed
as the Independent Directors

President
5 personsElected2 persons

2 personsRelations to the Company (1)Name

Affiliationab

Relationship to the Company*c d e f g h i j k

Yasuo Usuba
From another company
Jun Sakaki
From another company* Selected the relevant “Relationship with the Company”* ○: indicates the relevant item that the person falls under as of “today or recently”; △: indicates the relevant
item that the person falls under as of “previously”.
* ●: indicates the relevant item that the person’s close family member falls under as of “today or recently”.; ▲:indicates the relevant item that the person’s close family member falls under as of “previously”.
a. A management executive officer of the listed company or its subsidiaries
b. A management executive officer or non-management executive director of a parent company of the listedcompanyc. A management executive officer of an affiliated company of the listed company
d. A person who has a significant business relationship with the listed company or who is a management executive
officer of an entity which has such a significant business relationshipe. A person with whom the listed company has a significant business relationship or who is a management executive
officer of an entity with whom the listed company has a significant business relationshipf. A consultant, accounting specialist, or legal specialist who receives significant remuneration or other assets fromthe listed company other than remuneration as a director or executive officer
g. Principal shareholder of the listed company (if a principal shareholder is a legal entity, a management executive
officer of such legal entity)h. A management executive office of an entity with whom the listed company has a business relationship (not fallunder d and e), (only with respect to the person)
i. A management executive officer of a company whose outside director assumes the post on a reciprocal basis withthe listed company (only with respect to the person)
j. A management executive officer of an entity to whom the listed company makes a donation (only with respect tothe person)k. Other

Relations to the Company (2)Name

Independent
member of theBoard ofDirectors

Yasuo Usuba○

Supplementary Information
concerning applicable item

Reason for appointment

Mr. Usuba is not applicable to all Mr. Usuba has possessed a wealthof experience with respect toof the above.
management strategy, marketing,
The status of any concurrent
and sales activity through his workholding of important positions
experience.
pursuant to the Company Act
To suggest and advise theand the Ordinance forCompany’s management and its
Enforcement of the Companies
decision-making, he has been

Act is as below.
・LocationMind Inc. COO

Jun Sakaki○

The Existence of Optional
Committee corresponding to theNominating Committee orRemuneration Committee

appointed as an Outside member ofthe Board of Directors since June
2021.
The Company submitted andnotified him as an independent
member of the Board of Directors
to the Tokyo Stock Exchange.
Mr. Sakaki has possessed a wealthMr. Sakaki is not applicable toof experience with respect toall of the above.
management and operation bycontinuously expanding and driving
The status of any concurrent
holding of important positions the main business for Ikyu
Corporation.
pursuant to the Company Act
To suggest and advise theand the Ordinance for
Enforcement of the Companies Company’s management and its
decision-making, he has been
Act is as below.
・Ikyu Corporation President and appointed as an Outside member ofthe Board of Directors since June
CEO
2022.
・Yahoo Japan Corporation EVP, The Company submitted andCorporate Officer
notified him as an independent
member of the Board of Directors
to the Tokyo Stock Exchange.

N/A【Audit and Supervisory Board members]
Established the Board of Audit andSupervisory
Limited Number of Audit andSupervisory Board members
pursuant to the Articles ofIncorporation
Number of Audit and Supervisory
Board Members

Yes

None

3 PersonsState of cooperation among Audit and Supervisory Board members, the accounting auditor, and the internal auditing section

The Company's accounting audits are conducted by Deloitte Touche Tohmatsu LLC.
Each member of the Audit and Supervisory Board carries out an audit based on the audit plans and attends the Board of
Directors meeting to audit executions and operations by directors from the legal point and adequacy point of view. In
addition, to understand the situations of the Business Executive Committee, Audit, and Supervisory Board members, theyalso hold meetings periodically with the Representative Director to exchange ideas and discuss concerns and importantmatters.
Full-time members of the Audit and Supervisory Board attend Business Management Meetings held every other week andInvestment Management Meetings held when performing mergers and acquisitions in addition to the Board of Directors
meetings, and also visit to audit important subsidiaries.
Audit and Supervisory Board seeks accountability, when necessary, in accordance with reports of execution status fromdirectors, operating officers, managers, subsidiaries’ directors, or Internal Audit Unit.
In principle, the Audit and Supervisory Board meets once a month to exchange ideas about the Company’s operation anddiscuss or make a resolution about audit policies, audit plans, and any important matters related to audit. Moreover, theAudit and Supervisory Board monitors and verifies whether the Accounting Auditors, as the independent positions, carryout proper audits and seek accountability in accordance with the report about its execution status from the Accounting
Auditors.

Election or Non-Election of Outside
ElectedMembers of the Board of Directors
Number of Outside Audit and
3 PersonsSupervisory Board members
Established number of Independent
Audit & Supervisory Board
2 PersonsMembers within the Outside Audit
and Supervisory Board Members

Relations to the Company (1)NameAttribution

Relationship to the Company*a b c d e f g h i j k l mMari Yajima
From another company
Takashi Miyazaki
Attorney-at-law
Kengo Wada
Chartered Accountant* Selected the relevant “Relationship with the Company”* ○: indicates the relevant item that the person falls under as of “today or recently”; △: indicates the relevant itemthat the person falls under as of “previously”.
* ●: indicates the relevant item that the person’s close family member falls under as of “today or recently”.; ▲:indicates the relevant item that the person’s close family member falls under as of “previously”.
a. A management executive office of the listed company or its subsidiaries
b. A non-management executive director or accounting advisor of the listed company or its subsidiaryc. A management executive officer or non-management executive director of a parent company of the listedcompanyd. An Audit & Supervisory Board Member of a parent company of the listed company
e. A management executive officer of an affiliated company of the listed company
f. A person who has a significant business relationship with the listed company or who is a management
executive officer of an entity which has such a significant business relationshipg. A person with whom the listed company has a significant business relationship or who is a management
executive officer of the entity with whom the listed company has a significant business relationshiph. A consultant, accounting specialist, or legal specialist who receives significant remuneration or other assets
from the listed company other than remuneration as a director or executive officer
i. Principal shareholder of the listed company (if a principal shareholder is a legal entity, a management
executive officer of such legal entity)
j. A management executive office of an entity with whom the listed company has a business relationship (notfall under d and e), (only with respect to the person)
k. A management executive officer of a company whose outside director assumes the post on a reciprocal basiswith the listed company (only with respect to the person)l.
A management executive officer of an entity to whom the listed company makes a donation (only withrespect to the person)m. Other

Relations to the Company (2)Name

Independent
Member of
Audit &
Supervisory
Board

Supplementary Information
concerning applicable item
Ms.Yajima is not applicable toall of the above.

Mari Yajima

Yes

Reasons for Appointment

As a certified public accountant,
Ms. Yajima has experience inaudit work at an auditing
corporation as well as internal
The status of any concurrent
holding of important positions audit work at an insurancecompany.
pursuant to the Company Act
and the Ordinance for
To be audited from her extensive
Enforcement of theknowledge
andpractical
Companies Act is as below.
experience, and to assure an audit
from an independent position, she
・Audit and Supervisory Board has been appointed as the Outside
Audit and Supervisory Board
member of REJOB Co., Ltd.
･ Audit and Supervisory Board member since June 2023.
member of Awesome Agent
The Company submitted andCo., Ltd.
･ Audit and Supervisory Board notified her as an independent
member of the Board of Directors
member of Apple World Inc.
to the Tokyo Stock Exchange.
･ Audit and Supervisory Board
member of TSD INC.
･ Audit and Supervisory Board
member of Sanko Ad Co., Ltd.
･ Audit and Supervisory Board
member of NIZIGExN Co.,Ltd.

Mr. Miyazaki is not applicable
to all of the above

Mr. Miyazaki has possessed a highlevel of expertise in the legal
profession as an attorney-at-law.
The status of any concurrent
To be audited from his extensive
holding of important positions knowledge and practical experience,
pursuant to the Company Act
and to assure an audit from an
and the Ordinance forindependent position, he has been
Enforcement of the Companies appointed as the Outside Audit and
Act is as below
Supervisory Board member sinceJune 2016.
・Partner in the law office ofNagashima Ohno &Tsunematsu
Takashi Miyazaki

Mr. Wada is not applicable toall of the above

Mr. Wada has possessed a high levelof expertise in the accounting
profession as a chartered accountant.
To be audited from his extensive
knowledge and practical experience,
The status of any concurrent
holding of important positions and to assure an audit from anpursuant to the Company Act independent position, he has been
appointed as the Outside Audit andand the Ordinance for
Enforcement of the Companies Supervisory Board Member sinceJune 2017.
Act is as below
Kengo WadaYes

The Company submitted and・Representative Director ofnotified him as an independent
AIPartners, Inc.
member of the Board of Directors･ Representative Director of
AIPartners Tax Accountancy to the Tokyo Stock Exchange.
Office･ Outside Audit and Supervisory
Board member of Alue Co.,Ltd.
･ Outside Audit and Supervisory
Board member of Cloud Ace
Co., Ltd.

[Independent Officers]
Number of independent officers

4 Persons

Other matters concerning independent officers

To ensure the independence of the Company’s outside directors and outside Audit and Supervisory Board members, theCompany has established the following Independence Criteria for Outside Officers with reference to "Securing
Independent Officers" (Article 436-2 of the Securities Listing Regulations) and the "Guidelines on Management of
Listing" established by the Tokyo Stock Exchange, the Japan Association of Corporate Directors' "Criteria for theselection of Independent Directors Under Board of Directors Regulations," and other materials. The Company chooses
outside directors and outside Audit and Supervisory Board members in accordance with these Independence Criteria for
Outside Officers.

Independence Criteria for Outside Officers
To ensure its management oversight functions and transparency, ZIGExN Co., Ltd. (hereinafter “Company”)
considers it desirable for outside directors and outside Audit and Supervisory Board members (including
candidates for outside directors and outside Audit and Supervisory Board members; hereinafter referred tocollectively as "outside officers") to possess at least a certain degree of independence. In addition to establishing
the following independence criteria and satisfying the independence criteria specified by the Tokyo Stock
Exchange, the Company considers outside officers who meet any of the following descriptions not to possess
sufficient independence from the Company.

1. Those serving currently, or who have served within the past 10 years in the posts of executive directors,
operating officers, managing officers, or similar posts or of employees (hereinafter referred to collectively as"persons executing business") with the Company or a consolidated subsidiary of the Company (hereinafterreferred to collectively as the "Group")
2. Those who currently meet, or have met within the past five years, any of the following descriptions:(1) Major shareholders with investment stakes of at least 10% in the Company, or persons executing thebusiness thereof(2) Major trading partners of the Company, or persons executing the business thereof
A major trading partner is considered to be one for which the value of its transactions with the Company during
a single fiscal year is more than 2% of the Group's consolidated gross sales or the gross sales of the trading
partner.
(3) Major lenders to the Company, or persons executing the business thereof
A major lender is considered to be one for which the balance of its loans to the Company at the end of a single
fiscal year is more than 2% of the Group's consolidated gross assets or the gross assets of the lender financial
institution.
(4) Consultants, accounting specialists, or legal specialists receiving large sums of money or other property fromthe Company, other than executive compensation
Large sums of money or other property refer to the following cases:(i) If the specialist provides services as an individual, an average annual value of transactions with the Company
of more than 10 million yen per year over the past three years(ii) An average annual value of transactions with the Company by the corporation, association, or other entity ofwhich a specialist is a person executing the business of more than 2% of that organization's gross sales over the
past three fiscal years(5) A recipient or the person executing the business of a recipient organization of a large amount of donations
from the Company
A large amount of donations is considered to be more than 10 million yen per year on average over the past
three fiscal years.
(6) If a person executing the business of the Company is appointed an outside officer of another company, aperson executing the business of that company
3. A spouse or relative within two degrees of consanguinity of any person named under 1 and 2 above (notincluding minor cases)
A person in a minor case who qualifies as a person executing business under 2 above is considered to be in theposition of an employee not directly involved in the provision of services to the Company.

[Incentives]
Status of implementation of
measures related to providing
incentives to directors

Not implemented

Supplemental explanation of this item

In September 2012, the Company awarded stock options to some executive directors, outside directors, andemployees of the Company. While the company has not adopted any performance-linked remuneration programor stock options program as incentives for directors that would meet the descriptions under [Principle 4.2. Roles
and Responsibilities of the Board (2)], it does issue paid-in stock options to further strengthen management's
commitment to increasing enterprise value over the long term.

Persons eligible for issue of stock
options

Supplemental explanation of this item―――

[Director Remuneration]
Status of disclosure (ofremuneration of individual
directors)

Individual remuneration is not disclosed.

Supplemental explanation of this item

The Company discloses total amounts of remuneration for members of the Board of Directors, Audit and Supervisory
members and outside members, including Outside Member of the Board of Directors and Outside Audit and Supervisory
members, on the latest securities report.
■the Latest Securities Reporthttps://zigexn.co.jp/ir/financial_reports/

Whether there is an implemented
Policy of fixing Amount of
Remuneration or its methods

Yes

Details of disclosure of policies of fixing the amount of remuneration or its methods

The members of the Board of Directors except Outside member of the Board of Directors has been assigned topositions and job grade levels against his/her responsibilities as well as other employees. As the policy of fixing
amounts of remuneration, the amount of remuneration for members of the Board of Directors except its outside
members, shall be discussed and fixed at the Board of Directors not only in consideration of the remuneration
standards against positions, job grade levels and involvement of business but also from comprehensive
standpoints with management responsibilities as a director, corporate achievements and business conditions. The
Representative Director is in charge of making-decisions for plans of fixing amount of remuneration anddeliberations of the Board of Directors in respect to those plans are conducted twice, as the one is for theadvance notice and the other is for the resolution.
For Outside member of the Board of Directors, the amount of remuneration is fixed, which is subject todeliberation and resolved by the Board of Directors from comprehensive standpoints with management
responsibilities as a director, corporate achievements and business conditions. For Audit and Supervisory Board
members, because of the importance of their independence and objectivity, each amount of remuneration is fixed
through discussions among Audit and Supervisory Board members in consideration of full-time or part-timehours.
The total amount of remuneration for directors at the company, as of the resolution of the shareholders' meeting on
June 25, 2013, is within 100 million yen annually, based on that resolution. Additionally, the total amount of
remuneration for auditors is within 50 million yen annually, as per the resolution of our company's shareholders'meeting on June 28, 2018.
[Supporting structures for outside directors (outside Audit and Supervisory Board members)]
To facilitate the smooth performance of business duties by Outside members of the Board of Directors,
before the Board of Directors, the Corporate Management Division and the Corporate Strategy Divisionbuild some schemes such as sharing necessary information, scheduling, providing proposals andexplanations if needed. For Outside Audit and Supervisory Board members and Audit and Supervisory
Board, The Corporate Management Division and the Corporate Strategy Division support and a person in
charge may be fixed in accordance with opinions by Audit and Supervisory Board members.

2. Matters Concerning Functions of Business Execution, Supervision, Nomination, and Remuneration Decisions (Overview of
the Current Corporate Governance System)
The Company has established the Board of Directors and Audit and Supervisory Boards as the legal requirements
which consists of members of the Board of Directors and/or Audit and Supervisory elected at the Shareholder’smeeting. In addition to these legal requirements, the Company has established the Compliance Committee, theHarassment Prevention Committee, and the Internal Audit Unit for corporate governance strengths. Moreover, in
the Business Executive Committee, the Company has established the system of Operating Officers who are in
charge of specified field.
１. Corporate Governance System＜Board of Directors＞
The Company has established the Board of Directors as the entity for decision-making on important matters andthe entity for supervisions and the Chairperson is Mr. Joe Hirao, the Representative Director, Operating Officer,
and CEO. The Board of Directors supervises the Business Executive Committee including the Representative
Director and other Executive Directors. As of the submission date, the Board of Directors consists of three (3)Members of the Board of Directors and two (2) Outside Members of the Board of Directors. As per the Policy
and Process of the election of directors, the Board of Directors elects a person as the director who shows theirabilities to contribute to the enhancement of corporate values, not only in consideration of his/her quality andinsights but also in consideration of the entire balance of the Board of Directors in terms of knowledge,
experiences, and abilities and also keeping both of diversities and the optimum size, regardless of gender andages. For flexible business activities, any decisions, not required by a resolution of the Board of Directors, could
be made by Executive Directors, Operating Officers, or Operating Managers of each business based on the rulesof administrative authority.
＜Audit and Supervisory Board＞
The Company has established the Audit and Supervisory Board as supervision functions of management and the
Chairman is Ms. Mari Yajima, a full-time outside member of the Audit and Supervisory Board. Audit andSupervisory Board Members attend the Board of Directors and other important meetings to supervise functionsof management and business executions. As of the submission date, the Audit and Supervisory Board consists ofone (1) full-time auditor and two (2) part-time auditors and all of them are Outside Audit and Supervisory Board
members.
As the policy and the process of election, Audit and Supervisory Board members are elected not only inconsideration of his/her quality and insights but also in consideration of the entire balance for Audit andSupervisory Board in terms of a wealth of practical experience in private companies or professional knowledge
such as chartered accountant, attorney-at-law or regulatory administrator, regardless of gender and ages.
Mr. Miyazaki, the auditor, is a certified attorney-at-law, and Ms. Yajima, and Mr. Wada, the auditor, are certified

as chartered accountants.
＜The Compliance Committee and the Harassment Prevention Committee＞
To promote compliance with employees, monitor illegal activities, and prevent harassment, the Compliance
Committee and the Harassment Prevention Committee have been established consisting of Mr. Joe Hirao, theRepresentative Director, Operating Officer, and CEO, Ms. Sachiko Hatano, the member of the Board of Directors,
Mr. Shinji Sato, the member of Board of Directors, Internal Audit Unit and the Legal Department with the Audit
and Supervisory Board Members, Ms. Mari Yajima and Mr. Takashi Miyazaki, as the observers.
Both committees, under the direct control of the Board of Directors, promote compliance and harassment
prevention and provide necessary training programs.

＜Internal Audit Unit＞
In the Company, a dedicated staff member of the Internal Audit Unit, controlled directly by the Representative
Director and independent from the Business Executive Committee, carries out an internal audit of the Company
and consolidated subsidiaries to conduct audits for the prospective law and suitability. Moreover, for more
efficient and effective audits, the Audit and Supervisory Board work together with the Accounting Auditors, what
we call “a three-way audit system”. The audit results are reported and communicated to the Board of Directors,
the Representative Director, and the audited departments. In case improvements are required as a result of audits,
the Internal Audit Unit seeks the improvement and asks to update the status of improvements to the department.

The Company has established other internal entities related to Business Executions and Governance as below.
－”Business Management Meeting”
Constituents： Operating officers, including full-time members of the Board of Directors, Business Officers ofeach business and subsidiaries, and full-time outside Audit and Supervisory Board members
Purpose: To report the progress of the management plan and to share and discuss the Company Group’s businessstrategy.
－”Investment Management Meeting”
Constituents： Operating officers, including full-time members of the Board of Directors, Business Officer
Candidates of the Invested Business, and full-time outside Audit and Supervisory Board members
Purpose: To make investment decisions by sharing the report of due diligence and valuation with respect toMergers and Acquisitions and others.
＜the Status of Accounting Auditor＞
The Company made an Auditor Agreement with Deloitte Touche Tohmatsu LLC and, has gotten the accounting
audits pursuant to related laws as well as the main subsidiaries. The Company confirms there is no particular
relationship such as interested parties between the Company and Deloitte Touche Tohmatsu LLC.
2. Limited Liability Agreements
The Company made a Limited Liability Agreement with each of Mr. Yasuo Usuba (the Board of Directors), Mr.
Jun Sakaki (the Board of Directors), Ms. Mari Yajima (the Auditor), Mr. Takashi Miyazaki (the Auditor), andMr. Kengo Wada (the Auditor).
・When bearing responsibilities for any loss or damages because of failure to perform duties without serious
negligence and in good faith, the liability is limited to the minimum liability amount specified in Article 425,
Paragraph 1 of the Companies Act.
・When the term of a member of the Board of Directors who is not an outside member of the Auditor andSupervisory Board or Operating Director, ends with the expiry of the term and the member of the Board of
Directors is elected and appointed as the Director rather than an Internal Auditor and Supervisory Board member
or an Executive Director, above limited liability shall be continued.

３．Reasons for the selection of current corporate governance systems
The Company judges that a structure in which the number of outside officers, including outside directors andoutside Audit and Supervisory Board members, exceeds the number of executive directors and in which outside
directors and outside Audit and Supervisory Board members cooperate with each other can help to rectify andcorrect errors, inadequacies, and any recklessness with regard to business execution.
In recognition of the fact that the functioning of both direct oversight of business execution by outside directors
and oversight from a more independent perspective by Audit and Supervisory Board members who are not
involved in business decisions can contribute to securing the soundness and efficiency of management, theCompany has adopted its current corporate governance systems based on its status as a company with an Audit
and Supervisory Board in which it appoints outside directors and has established an independent Audit andSupervisory Board.
Ⅲ Implementations of measures for shareholders and other stakeholders
１．Approach towards the vitalization of General Shareholders’ Meeting and the facilitation exercise of voting rights

Supplemental explanation

Early distribution of notice ofconvocationofGeneralShareholders’ Meeting

SchedulingofGeneralShareholders’ Meeting avoiding the
date
on
which
GeneralShareholders’Meetingofcompanies are concentrated

Exercise of voting
electronic meansrightsby

To have enough time to consider about the proposals for theshareholders, the Company strives to distribute notice of convocationof the General Shareholders’ meeting at the earliest by theestablishment of a corporate system to prepare for convocation noticeat the earliest.
For the General Meeting of Shareholders held in June 2023, we started
to provide the Notice of Convocation of the General Meeting of
Shareholders electronically on our website on June 2.
The company recognizes that the shareholders' general meeting is aforum for constructive dialogue with shareholders. To ensure theparticipation of as many shareholders as possible, the company
makes efforts to consider the administrative schedule and venue
availability when setting the date, aiming to avoid concentrated
dates.
The Company convenes a General Shareholders’ Meeting in theafternoon, avoiding the time on which General Shareholders’Meetings of companies are most concentrated.
The Company has enabled shareholders to exercise voting rights on
the Internet since the General Shareholders’ meeting was held in June
2021.

Measures aimed at participation inelectronic voting platforms andother improvements in voting
environments
gearedtowards
institutional investors.

The electronic voting platform has been available for institutional
investors since the General Shareholders’ meeting was held in
June 2022.

Provision of summary Englishlanguage convocation notices

English-language convocation notices and internet disclosure
information have been available on its company website as below
since the General Shareholders’ meeting was held in June 2022.
https://zigexn.co.jp/en/ir/stockholders_meeting/

２．Status of IR activities

Supplemental explanation

Preparation anddisclosure policies

publication

Holding periodic
individual investors

briefings

of

The Company has established a disclosure policy, which isavailable on its website at the following URL.

■ Disclosure policy
https://zigexn.co.jp/ir/disclosure_policy/
In the fiscal year ended March 2023, we held online
forbriefings five times and are posting the content of thesebriefings on the Company website for a while.

The Company holds quarterly online briefings by the
Representative Directors, Operating Officer, and CEO anddirectors or operating officers for sell-side analysts andHolding periodic briefings for analysts
institutional investors. We strive to post materials fromand institutional investors
these briefings, along with videos of the briefings and thecontent of questions and answers in the briefings, on the
Company website on time.

Holding periodic
overseas investors

briefings

Personal
explanationby theRepresentati
ve Director?

Yes

Yes

Although Periodic briefings for overseas investors are
not held, the Company convenes meetings for Investor
Relations with overseas investors. As of the Fiscal Year No
3/2023, the Company holds opportunities for dialogues
for via online meetings or teleconferences when overseas
investors request. Scripts and Q&A, translated in
English, of briefings with individual and/or institutional
investors, are available on its company website as below.

Briefings for individual investors in English■https://zigexn.co.jp/en/ir/results_briefing/
The Company posts information on financial results,
information other than financial results subject to timely
disclosure, securities report or quarterly reports, materials
on briefings on financial results, information on the state ofPosting IR information to the website corporate governance, convening notices of general
meetings of shareholders, integrated reports, and otherinformation for shareholders on its website.

Appointment of a section (person) incharge of IR■ IR site: https://zigexn.co.jp/ir/
The Company's section in charge of IR is the Corporate
Management Division.
The section in charge: Corporate Management Division
Person responsible: Executive Director Sachiko Hatano

３．Status of initiatives related to respecting the positions of stakeholders
Supplemental information
The Company considers that value creation with stakeholders isimportant for supporting sustainable corporate growth.
The Sustainability Promotion Department has been newly
established since April 2021 and addressed important concerns withsetting priorities.
The Company strives not only to enhance corporate values but also
Environmental protection and CSR to contribute continuously to society with approaching concerns
activities
through the last dialogues with the various stakeholders reached bystarting dialogues with shareholders, users, employees, business
relationship partners, and local communities.
Please refer to the below website for further details about the policyof sustainability and sustainability activities

Stakeholder Communication Policy■ZIGExN’s Sustainability https://zigexn.co.jp/sustainability/
The Company considers it important to provide information
appropriately to stakeholders and provides information via the
Company’s website or company briefings.

Ⅳ Matters related to internal control systems
1. Basic thinking on internal control systems and the status of their development
Through a resolution of the Board of Directors, the Company has established its Fundamental Policy on
Development of Internal Controls Systems to ensure the propriety of business operations. We will strive toestablish internal controls systems to implement concretely the provisions of this policy, centered on staff
responsible for internal controls and Audit and Supervisory Board members, while also reviewing periodicallyrules related to controls, such as the Job Authority Regulations and the Internal Whistleblowing Regulations.
(1) Structures for ensuring that the execution of duties of directors and employees of the Company and Company
subsidiaries conforms to laws, regulations, and the articles of association.
1. Group directors and employees act with high levels of ethics by conforming to laws, regulations, and articles
of association. Directors take the initiative to set a good example for others and ensure thorough awarenessthrough repeated communication of information.
2. Each Company subsidiary develops systems similar to those of the Company to ensure that its directors andemployees execute their duties in conformity with laws, regulations, and the articles of association by reflecting
matters related to their size and businesses.
3. To maintain and promote compliance in the Group, the Compliance Committee has been established andmeets regularly as a subsidiary organization to the Board of Directors chaired by the Representative Directors,
Operating Officer, and CEO. The chairperson of this committee oversees the Basic Principle and the introductionof systems on compliance and manages as the person responsible for implementing compliance, policy
deployment, plan management, system adoption, training, evaluation, everyday management, and crisis
management.
4. An internal whistleblowing system has been established as a contact point to respond to compliance-related
reports from those employed in the Company's businesses. This is intended to enable appropriate management
and swiftly identify any violations of laws and regulations or suspicions thereof. In addition, Company
subsidiaries maintain appropriate internal whistleblowing systems in light of their size, the laws and regulationsof the countries in which they operate, and other considerations.
5. Antisocial forces and organizations counter to public order or posing threats to sound business activities are
responded to systematically through a resolute approach in cooperation with the police, attorneys, and otherauthorities.
6. Audit and Supervisory Board members audit the execution of duties of directors, including the state ofdevelopment and operation of internal controls systems, from independent standpoints.
7. To ensure that the execution of business conforms to laws, regulations, and the articles of association, thesection in charge of internal auditing implements internal auditing of the Company and its subsidiaries.

8. The section in charge of internal auditing audits the state of development and operation of internal control
systems and reports to the Representative Directors, Operating Officer, and CEO concerning the propriety ofbusiness operations and the efficacy of related systems. It also issues instructions and proposals concerning
improvement measures to maintain and improve internal control systems.

(2) Systems for ensuring that the duties of directors of the Company and its subsidiaries are performed efficiently
1. The Board of Directors meets once a month, in principle, to decide swiftly on important matters concerning
management based on applicable laws and regulations, principles of management decision-making, and the duty of careof a good manager. As appropriate, directors report on the state of execution of duties.
2. The Company requires subsidiaries to report periodically to it on their business results, financial standing, and otherimportant information. In addition, meetings are held among directors and others from the Company and its subsidiaries,
in principle, every other week to work toward the efficient achievement of management and business objectives byreporting on the progress of management plans and sharing strategies.
3. Authority and responsibilities related to business execution are made clear.
4. To ensure effective business management by directors, in-house rules are maintained and the authority andresponsibilities of each position and basic business frameworks are made clear.

(3) Structures for retention and management of information concerning the execution of Company directors'
duties
1. Documents (including relevant electromagnetic records) of important meetings, such as the minutes of thegeneral meetings of shareholders, meetings of the Board of Directors, and other meetings, and important
documents on the applications for approval, contracts, and various forms are retained and managed appropriately
in accordance with the Information Management Regulations.
2. A structure is in place for appropriate disclosure of information concerning the execution of Company
directors' duties to those who need to know them for purposes of performing their duties.
(4) Rules and other structures related to the management of the risk of losses by the Company and its subsidiaries
1. Risk Management Regulations are established to manage risks to the Company and the Group as a whole. In
the event of any large-scale accidents, disasters, or scandals, the Company or the affected subsidiary will set up adisaster task force chaired by the representative director and with a membership consisting of the necessary
personnel and implement other appropriate responses.
2. Regulations on Division of Responsibilities and Job Authority Regulations are established and systems are inplace for business management to achieve an appropriate risk management structure by directors and employees
carrying out business operations based on in-house rules and in accordance with their own responsibilities andjob authority.
3. Regarding important management risks, directors and employees share information as necessary and respondswiftly and appropriately, in addition to reporting to the Representative Director, Operating Officer, and CEO.
4. The necessary notifications and training are provided swiftly to directors and employees in cases such as theestablishment or amendment of applicable laws and major scandals or accidents inside the Group or at othercompanies.
(5) Systems for ensuring the reliability of financial reports of the Company and its subsidiaries
1. The Company carries out accurate and timely financial reporting in compliance with the Financial
Instruments and Exchange Act and the rules of securities exchanges. In addition, to ensure the reliability offinancial reports, the Company and its subsidiaries establish structures for the maintenance and operation ofeffective and appropriate internal control systems reflecting their size and based on the Companies Act andother applicable laws and regulations. They also evaluate these continuously to ensure that they are functioning
properly and implement any necessary corrective measures.
2. Through internal auditing activities, the section in charge of internal auditing ascertains, evaluates, andreports to the Representative Director, Operating Officer, and CEO and the Audit and Supervisory Board on thestate of maintenance and operation of internal controls related to financial reporting (including any
discrepancies and the state of improvements).
(6) Systems for ensuring the propriety of the operations of the Group of companies consisting of the Company and its
subsidiaries
1. In addition to management based on the Group Company Regulations, through the appointment of officers incharge of the sections managing Company subsidiaries as necessary, Company directors and employees are appointed
as directors of subsidiaries to oversee appropriate business operations by subsidiaries. For subsidiaries in foreigncountries, in addition to the development of structures to ensure compliance with the laws and regulations of theapplicable countries, systems are developed to ensure the propriety of business operations in light of considerations
such as the sizes and businesses of the subsidiaries and the laws and regulations of the countries in which they dobusiness.
2. Although in principle the subsidiaries of the Company manage themselves independently, they report to theCompany Board of Directors periodically on matters related to their businesses and the execution of the duties of theirdirectors, and any important matters that could impact the Group as a whole are subject to decisions by the Company
Board of Directors.
3. Together with engaging in transactions and other dealings between the Company and Group companies properly incompliance with laws and regulations, each subsidiary needs to obtain the approval of the Company before engaging inimportant transactions.
4. The Company's section in charge of internal auditing implements internal auditing of Company subsidiaries andsimilar parties, to ensure the propriety of Group business execution.
5. Company Audit and Supervisory Board members audit the propriety of the execution of duties of subsidiary directors.
(7) Systems for reporting by directors and employees to the Company's Audit and Supervisory Board members andother systems related to reporting to Audit and Supervisory Board members
1. If a Group director or employee has identified a violation of laws and regulations or another matter that could cause
severe damage to the Company or a subsidiary, the person promptly reports the matter to an Audit and Supervisory
Board member of the Company or the Company Audit and Supervisory Board.
2. Group directors and employees promptly submit any reports on the execution of business duties demanded byCompany Audit and Supervisory Board members.
3. The Company prohibits treating Group directors and employees who have submitted reports to Audit andSupervisory Board members at a disadvantage as a result of having made such reports and ensures that Group directors
and employees are thoroughly aware of this fact.
(8) Systems for ensuring the efficacy of auditing by Company Audit and Supervisory Board members
1. A system is in place under which Audit and Supervisory Board members attend meetings of the Board of Directors
and other important internal meetings as necessary to receive reports on important matters and offer their opinions.
2. Audit and Supervisory Board members regularly exchange information and opinions and cooperate with the section
in charge of internal auditing and the accounting auditor, as well as exchanging opinions with the Representative
Directors, Operating Officer, and CEO as necessary, to ensure the efficacy of auditing.
3. When so demanded by Audit and Supervisory Board members, employees are assigned to assist in their duties.
These employees provide such assistance based on instructions and orders from Audit and Supervisory Board
members and maintain independence from directors. Audit and Supervisory Board members may offer opinions on
matters related to the transfer, human-resource evaluations, and discipline of such employees, and the directors
respect such opinions.
4. When an Audit and Supervisory Board member has made a demand to the Company concerning matters related tothe prepayment of expenses related to the execution of assigned duties under Article 388 of the Companies Act, theexpenses or obligations demanded are processed swiftly unless judged through review by the section in charge not tobe necessary to the execution of the duties of the Audit and Supervisory Board member.
The latest information on the status of operation of the Basic Principle on the development of the internal controls
system is disclosed in the ‘Notice of the Ordinary General Meeting of Shareholders’ posted to the Company website
at the following URL:
■ https://zigexn.co.jp/en/ir/stockholders_meeting/

２．Basic thinking on the exclusion of antisocial forces and the state of related measures
In recognition of the danger posed by antisocial forces, who pose threats to social order and business activities, theCompany responds thoroughly and systematically with a resolute attitude to any demands from such forces. We
also cooperate with the police, our advising attorneys, and other outside specialists to collect and manage
information concerning antisocial forces, as well as strive to maintain and enhance internal structures forresponding to them.
Basic Principle on Responding to Antisocial Forces
The Company has established this Basic Principle to realize sound business management and retain public trust bymaintaining a resolute attitude of refusing any improper demands or other approaches by antisocial forces,
including organized crime, members of organized crime, quasi-members of organized crime, companies affiliatedwith organized crime, sokaiya racketeers, racketeers posing as social movements, racketeers posing as politicalmovements, and special Intelligence violence groups while striving to eliminate any relationships with antisocial
forces.
1. Business execution policies
The Company responds to antisocial forces based on the following basic action policies:<1> Refusal of any relationships, including transactions, with antisocial forces
We respond resolutely to any improper demands or other approaches by antisocial forces and take action toeliminate any relationships with antisocial forces.
<2> Prohibition of backroom deals and provision of funds to antisocial forces
Even if an improper demand from antisocial forces is in response to an impropriety in business activities or an
impropriety committed by an employee, we will never engage in backroom deals to cover up the facts. We also
will never provide funds to antisocial forces for any reason.
<3> Cooperation with outside specialists
To eliminate antisocial forces, we always cooperate closely with outside specialists such as the police, attorneys,
and the Center for Removal of Criminal Organizations.
<4> Systematic responses
We respond to antisocial forces organization-wide, from top management down, instead of leaving the matter
entirely to the persons and sections in charge, and we ensure the safety of executives and employees.
<5> Responding to incidents through civil and criminal law
In cases such as when improper demands have been received from antisocial forces, we proactively consult withoutside specialists and implement various measures under civil law, while not hesitating to respond under thecriminal law as well.

2. Details of operations and structure
The Company maintains the following structure under which the Corporate Management Division is tasked as
the section in charge of responding to antisocial forces.
<1> Carrying out the following operations to eliminate transactions with antisocial forces:(1) We check for relations to antisocial forces when engaging in new transactions.
(2) We conclude transaction contracts based on contractual documents or transaction codes that include
provisions for the elimination of antisocial forces, as Company compliance guidelines.
<2> Collecting information on antisocial forces(1) We maintain a structure for collecting information concerning antisocial forces and carry out monitoring toprevent any transactions or association with antisocial forces.
(2) We strive to collect information concerning antisocial forces through outside specialists, such as the Center
for Removal of Criminal Organizations.
<3> Maintenance of a structure for responding to incidents(1) Together with maintaining in-house rules and a manual on responding to antisocial forces to ensure
appropriate responses to such forces, we also provide related training to executives and employees.
(2) Officers and employees maintain an attitude of refusing any improper demands from antisocial forces inaccordance with the manual on responding to antisocial forces.
<4> Maintenance of a structure for responding to serious incidents of improper demands at subsidiaries
For cases such as improper demands made to Company subsidiaries that could have a serious impact on the
Company, proposed responses are drafted in cooperation with the subsidiaries, and the Compliance Committee
is consulted.

3. Internal controls
The Board of Directors implements internal controls related to responding to antisocial forces by making decisions
and receiving reports on the following matters concerning responses to antisocial forces:

<1> Board of Directors(1) Decisions on the establishment, amendment, and abolition of this Basic Principle(2) Reports on responses to improper demands and other incidents that could have a serious impact on the Company<2> Compliance Committee(1) State of maintenance of the Company's response systems(2) Policies for responding to improper demands and other incidents that could have a serious impact on the Company
4. Amendment and abolition
The Board of Directors shall make decisions on important amendments to and abolition of this Basic Principle.
5. Section responsible
The Corporate Management Division is responsible for this Policy.
6. Revision record
November 14, 2012: Establishment planned
January 1, 2017: Formal revisions such as name changes
Ⅴ. Other Matters
1. Adoption of anti-takeover measures
Anti-takeover measures adopted?

No

Supplemental explanation of this item

Based on the basic concept that increasing the Company's enterprise value will enable it to defend itself
against hostile takeover bids, as of the date of submittal of this Report the Company has not adopted any
anti-takeover measures. We intend to consider matters related to the necessity of anti-takeover measuresand the Company's specific thinking on this topic in the future in accordance with the provisions of the
Corporate Governance Code.

２．Other matters related to the corporate governance structure―――

[Corporate Governance Organizational Chart]

General meeting of shareholders
Appointment,
dismissal

Appointment, dismissal

Auditing
Board of Directors
Directors (5)Audit and Supervisory Board
Audit and Supervisory Board
members (3)(Including Outside Audit andSupervisory Board members[3])(Including Outside Directors [2])Selection
Dismissal
Supervision

Selection
Dismissal
Supervision

ReportingAppointment

Compliance
Committee

Coordination

dismissal
Coordination

Reporting
Representative Director and President
Instruction
Executive
執行役員
officers
部門長
Section heads
子会社役員
Subsidiary
officers

ReportingInstruction

Reporting Expressing
opinions

Coordination

Coordination
Business
Investment
Oversight
Oversight
Committee
Committee
Business execution sections

Auditing

Internal
Auditing
OfficeAudit firm
Auditing

Timely Disclosure Procedures<Information on Company decisions and financial results>
Person responsible
for execution(Representative
Director andPresident)

Management Strategy
Division<Checking for disclosure
under securities listing
regulations>Management
Administration Division
Scheduling resolutions of
the board of directors
Coordinating items

Management
Administration Division<Checking for disclosure
under securities listing
regulations>

Reconcilia
tion ofresults ofchecking

Reporting on process Submittal ofresolution
and results ofchecking fordisclosure

Board ofDirectors

Disclosure

Person responsible
for handlinginformation<Information on Company decisions>

Reporting
Each subsidiary
General meeting ofshareholders
Reporting

Person responsible
for execution(Representative
Director andPresident)

Management
Administration Division<Checking for disclosure
under securities listing
regulations>Management Strategy
Division<Checking for disclosure
under securities listing
regulations>

Reconcilia
tion ofresults ofchecking

Reporting on
process and resultsof checking fordisclosure

Disclosure

Person responsible
for handlinginformation<Information on matters affecting Group companies>

Reporting<Occurrence of
emergencies>
Each section, eachsubsidiary

Management
Administration Division<Checking for disclosure
under securities listing
regulations>

Reporting Management

Administration
Division

ReportingManagement Strategy
Division<Checking for disclosure
under securities listing
regulations>

Reconciliationof results ofchecking

Person responsible for
execution(Representative Director
and President)

Reporting on process
and results of checking
for disclosure
Disclosure

Person responsible
for handlinginformation