Corporate Governance
CORPORATE GOVERNANCE

June , 2024
CHANGE Holdings, Inc.
Hiroshi Fukudome, Representative Director and Chief Executive Officer
Contact:
Control & Management Unit 03-6435-7340
Security Code3962
HP：https://www.changeholdings.co.jp/

The status of our corporate governance is as follows.

I. Basic views on corporate governance, capital structure, corporate attributes, and other basic information
1.Basic concepts(i)Our mission
In the future, it is predicted that about 1 out of 2.6 citizens will be older than 65 in 2065, resulting in a worldof super-aged society. Under the common consensus that the progress of Japanese digital transformation ("DX")has been far behind the rest of the world, companies that are active to DX and evolving themselves and those
who are not have become more bipolar in the stock market, so it is urgent for them to respond to DX, reformtheir business, and invest in DX. In addition, local governments are also faced with the challenge of severe
financial condition and population decline, and despite the declining number of staff, the burden of theiroperations is on an increasing trend, which makes it essential for them to improve operational efficiency throughDX.
Under such circumstances, CHANGE Group (hereinafter, the “Group”) has been developing businesses suchas digitization of business models and business processes and support for the development of digital humanresources to dramatically improve Japanese productivity through "People × Technology" and to make Japan asustainable society despite a declining population, based on our mission of "Change People, Change Business,
Change Japan", and the Group has been providing solutions to the digitization needs of many customers since
its inception.
(ii)Basic policy on corporate governance
The Company (hereinafter simply, “we”) believes that corporate governance is a mechanism for ensuringtransparency in management and business execution and ensuring thorough compliance while at the same time
promoting efficient management in order to clarify management responsibility and accountability and provide
the benefits of maximizing corporate value to our shareholders, customers, employees and other stakeholders.
We will use the Corporate Governance Code as a tool to confirm that the above-mentioned mechanism ismoving in the right direction and will continuously work to enhance and deepen corporate governance.

[Reasons for not implementing each principle of the Corporate Governance Code]We are implementing each principle of the Corporate Governance Code.

[Disclosure based on each principle of the Corporate Governance Code][Principle 1-4]
We strategically hold shares for the purpose of strengthening relationships and alliances with business partners.
With respect to individual strategic shareholdings, the Investment Advisory Committee, which includes outside
members, examines whether they are necessary for our growth and whether there is any other effective use offunds, as appropriate, and consults with the Board of Directors, as necessary. We exercise voting rights related
to these shares after comprehensively taking into account whether the relevant agenda complies with ourshareholding policy, it is useful for the efficient and sound management of such company, and it can lead toincreasing its corporate value.
We have not established a uniform standard on this matter at this time because we have to make qualitativeand comprehensive judgment, one by one, based on individual shares.
[Principle 1-7]
We are fully aware that transactions between related parties may impair the soundness of management.
Therefore, based on the “Related-party Transaction Rules,” the Board of Directors discusses and approves it
after carefully examining the necessity of the transaction, the validity of its conditions, and whether theconditions are appropriate compared with other external transactions, under the condition that the relevant
officer shall be excluded from the quorum for such resolution. We require each Director to report on the status

This English translation is for reference purposes only. In the event a difference or inconsistency
arises regarding the meaning herein, the original Japanese version shall prevail as the official version.

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of concurrent appointment periodically and promptly as executives of other entities, related parties, and otherissues. We have established a system to always follow the latest information and report all continuing related
party transactions at the first meeting of the Board of Directors to be held after the beginning of the new fiscal
year. In the event of transactions between related parties, we disclose the transaction results to the Annual
Securities Report in accordance with the Companies Act, the Financial Instruments and Exchange Act, and otherapplicable laws and regulations, as well as the rules of the Tokyo Stock Exchange.
In addition, although transactions with any companies, etc. whose shareholding ratio in the Company’s
shares is between 10% and 50% and with subsidiaries of such companies, etc. do not fall under related party
transactions, they may force us unnecessary transactions or distort transaction conditions, which we consider ahigh level of caution for us. Therefore, such transactions are required to be reported to the Board of Directors
for properly checking.
Regarding the status of these transactions, not only Control & Management Unit ascertains the transaction
details, amounts, etc., but also the Board of Corporate Auditors (or simply, “Auditors”) confirms them.
[Principle 2-4(1)]■Basic concept for promoting diversity, equity and inclusion)
We recognize that the most important source of creating value for the Group is "people," and that the mostimportant management resource in business growth is "human resources." We believe that "diversity, equity andinclusion" not only has the function of maintenance and promotion of an organizational environment in which
each employee respects each other's individuality and values and maximizes the power of each employee, butalso are the corporate and business activities themselves aimed at realizing the mission by improving theperformance of the entire organization. Based on this recognition, we are actively promoting diversity, equity
and inclusion.
■Targets and status of actions for ensuring diversity<As a whole>
In order to improve corporate value over the medium to long term, we believe it is important to maintain
diversity and to create an environment in which all human resources can actively work regardless of theirnationality, gender, age, or disability. To this end, we have provided a variety of training programs to encourage
each employee to develop skills and self-enlightenment. In addition, we have introduced a variety of programs
to create a working environment that is easy to work at, including child-care and family-care holidays andtelework systems. We publish the overall status of our efforts on our sustainability website.
Our sustainability website: https://www.changeholdings.co.jp/sustainability/society/<Female>We are trying to create a working environment where all employees, regardless of gender, can choose a variety
of ways of working to meet their individual needs and life stages. As a result, they can continue to work withhigh motivation while taking advantage of their individuality and talent. Specifically, we are working to expand
a variety of systems that can be used by all genders to achieve both private and work balance in response tochanges in the environment associated with life events such as birth, childcare, and elderly care. We intend to
strive to achieve the government's goal of "at least 30% of the total number of female employees in the leadership
position."<Foreigners>
Our Basic Policy on Sustainability stipulates that no discrimination, exclusion, nor priority shall be imposedon employees based on race, color of skin, nationality, ethnicity, language, etc. We appoint employees tomanagerial posts who have the personality, experience, ability, and knowledge necessary for the performanceof their duties, irrespective of gender, nationality, or background of employment. Currently, we do not have any
foreign managers, but in the past, we had a foreign executive officer. In the future, we intend to continue todevelop our internal environment with the aim of achieving a ratio that exceeds the current figures.
< Mid-career recruiting >In the past year, more than 50% of new employees are mid-career employees. Currently, mid-career recruits
account for 64% of all full-time employees, many of whom play a core role in each division. We appoint persons
who have the personality, experience, ability, and knowledge necessary for the performance of their duties,
irrespective of gender, nationality, or background of employment, to managerial posts, and do not discriminate
in any way with respect to the promotion of mid-career recruiters to managerial posts.
As a result, in recent years the ratio of mid-career recruits among all managers has consistently exceeded
50%. Since becoming a holding company in April 2023, we have not hired new graduates. On the other hand,
we have been actively recruiting mid-careers, so it is expected that the ratio of mid-career recruits will increasein the future.
[Principle 2-6]

This English translation is for reference purposes only. In the event a difference or inconsistency
arises regarding the meaning herein, the original Japanese version shall prevail as the official version.

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We do not have a corporate pension fund system.
[Principle 3-1]
(1) Company's goals (management philosophy, etc.), management strategies, and business plans
We have established a system of philosophies, consisting of our Mission, Vision and Values, and our officers
and employees are implementing these in accordance with our Principles of Conduct. We disclose our "Mission"and "Vision" on our website and in our financial results briefing materials, etc.
(2) Basic approach to corporate governance and basic policies
It is described in "I.1. Basic Concepts" in the Corporate Governance Report.
(3) Policies and procedures for the Board of Directors to determine the remuneration of Directors
In order to strengthen the independence and objectivity of the functions of the Board of Directors and theaccountability of Directors' remuneration, we have established the Remuneration Advisory Committee as anadvisory body to the Board of Directors, of which majority is composed of Independent Outside Directors. The
Remuneration Advisory Committee discusses issues related to the policies for determining individual
remuneration for the Director, including the selection of performance-related indicators and the standard forgiving share-based remuneration, which are linked to performance-based remuneration, as well as issues related
to individual remuneration of the Director, and reports to the Board of Directors. At a meeting of the Board of
Directors held on December 15, 2020, we adopted a policy for determining individual remuneration for
Directors. The Remuneration Advisory Committee is consulted in advance on the agenda for the resolution to bemade at the Board of Directors and receives a related report. At a meeting of the Board of Directors on December
24, 2021, the Company decided to change the performance-linked remuneration policy so that "the performancelinked remuneration indicator will only consist of the net profit (consolidated results) attributable to the ownersof the parent for the relevant fiscal year”, from the fiscal year ending March 2022.”
a. Basic remuneration policy
Remuneration for Directors, excluding Outside Directors, consists of fixed remuneration and performancelinked remuneration. Fixed remuneration is determined by comprehensively judging the duties, roles, andcontributions, etc. regarding the execution of duties as Directors. Performance-linked remuneration is based on
net profit attributable to owners of the parent (consolidated results) for the year ending March 2023 asremuneration for the execution of duties for the year ending March 2023. With regard to remuneration linked tomedium-to long-term performance, we believe that Directors, excluding Outside Directors, have already earned
sound incentives for sustainable growth at this moment because they have sufficient number of shares of theCompany.
Remuneration for Outside Directors is based only on fixed remuneration from the viewpoint of independence
and objectivity with respect to management, and we determine it after comprehensively assessing management
responsibility as the Director, our business performance, economic trends, and other factors.
Remuneration for Auditors consists solely of fixed remuneration from the viewpoint of independence andobjectivity with respect to management.
b. Policy on performance-linked remuneration
Indicators for the performance-linked remuneration are net profit attributable to owners of the parent(consolidated results) for the year ending March 2024. These indicators are easy-to-understood and affect thecapital resources and stock prices towards growth investments. Therefore, we consider them the most important
indicators for us because the stock market is highly interested in these indicators.
c. Policy on determination of payment ratio of performance-linked remuneration and other remuneration
Our Directors' remuneration consists of fixed and performance-linked remuneration, and performance-linked
remuneration is determined with the objective of ensuring that sound incentives work toward the achievementof the Group's and the Company’s annual performance goals. Remuneration for Outside Directors only consistsof fixed remuneration.
d. Policy for determining the timing or conditions for the provision of the remuneration to the Directors andAuditors, etc.
Regarding the fixed remuneration of Directors and Auditors, only the monthly fixed remuneration is applied.
In addition, the amount of basic remuneration for Auditors is determined by the discussion of Auditors at theBoard of Auditors within the range of the maximum remuneration approved at the General Meeting of
Shareholders.
The performance-linked remuneration for the Directors will be paid once a year within one month after theend of the General Meeting of Shareholders in the relevant business year.
e. Matters concerning delegation of determination of remuneration, etc.

This English translation is for reference purposes only. In the event a difference or inconsistency
arises regarding the meaning herein, the original Japanese version shall prevail as the official version.

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The Board of Directors does not delegate decisions on individual remuneration, etc. to others.
(4) Policy and procedures for the Board of Directors to appoint Executive, Director and Auditor
In order to strengthen the independence and objectivity of the functions of the Board of Directors in connection
with the nomination of Directors (including successors), and to strengthen accountability, we have establishedthe Nomination Advisory Committee as an advisory body to the Board of Directors, of which majority iscomposed of Independent Outside Directors. The Nomination Advisory Committee discusses issues related tothe election, re-assignment, and removal of the Director, as well as issues related to the successor (including
training) of the Representative Director, and reports to the Board of Directors.
The Board of Directors has received a report from the Nomination Advisory Committee, reviewed and,decided candidates of Directors based on their personality, experience, capabilities, knowledge, and so on which
contribute to our growth and medium-to long-term improvement in corporate value. In addition, the Board of
Directors decided candidates of Auditors with consultation and consent from the Board of Auditors based on
their personalities, experience, abilities and knowledge which enable them to conduct audits neutrally andobjectively.
On the other hand, in the event that a reason for dismissal of the Director arises, the Board of Directors shallreview and deliberate the matter based on discussion and report by the Nomination Advisory Committee andsubmit a proposal for dismissal to the General Meeting of Shareholders in accordance with laws and regulations
and dismiss the Director by a resolution of the General Meeting of Shareholders.
In addition, in the event that a reason for dismissal of the Auditor arises, the Board of Directors shall review
and deliberate the matter, submit the proposal for dismissal to the General Meeting of Shareholders inaccordance with laws and regulations and dismiss the Auditor by a resolution of the General Meeting of
Shareholders.
(5) Explanation about individual elections and designations regarding present Directors or Auditors.
Hiroshi Fukudome (Representative Director and Chief Executive Officer)
Mr. Hiroshi Fukudome is a founding member of the Company and has been responsible for his duties as theRepresentative Director since April 2003. The Company has determined that he will be able to continue to use
his knowledge about overall business of the Company to strengthen the functions of the Board of Directors andhas appointed him.
Akira Ito (Director, Executive Officer and Executive Vice President)
Mr. Akira Ito is a founding member of the Company and has been responsible for his duties as the Director
since April 2003. The Company has determined that he will be able to continue to use his knowledge about
corporate management and DX, etc. to strengthen the functions of the Board of Directors and has appointed
him.
Yutaka Yamada (Director and Executive Officer, CFO)
Mr. Yutaka Yamada has been responsible for his duties as the Director since June 2014. The Company has
determined that he will be able to continue to use his knowledge about corporate management, finance, andaccountings, etc. to strengthen the functions of the Board of Directors and has appointed him.
Takeshi Matsumoto (Outside Director, Independent Officer)
Mr. Takeshi Matsumoto has been involved in IT businesses for many years and possesses a wealth ofexperiences and a broad insight as a manager. Based on his knowledge and experience, we expect him to ensure
the objectivity and neutrality of the management by incorporating his external perspective and monitoring
function. We have determined that he will contribute to further growth of the Group and the enhancement ofcorporate governance. For this reason, the Company has determined that he can properly perform his duties as
the Outside Director and has appointed him.
Kayo Takigawa (Outside Director, Independent Officer)
Ms. Kayo Takigawa is a qualified lawyer, being familiar with corporate laws, and having a wide range ofknowledge regarding legal issues. Based on her knowledge and experience, we expect her to ensure theobjectivity and neutrality of the management by incorporating her external perspective and monitoring function.
Although she has not been involved in corporate management other than being an outside director, the Company
has determined that she can properly perform her duties as the Outside Director and has appointed her for theabove reason.
Takehiko Kubo (Standing Auditor, Independent Officer)
Based on his management experience at a large company and many years of experience at a financial
institution, Mr. Takehiko Kubo has considerable knowledge of compliance, internal control, risk management,
finance and accounting. In order to ensure the soundness of the Group's management and increase corporate
value over the medium to long term, the Company expects him to conduct effective audits while fully

This English translation is for reference purposes only. In the event a difference or inconsistency
arises regarding the meaning herein, the original Japanese version shall prevail as the official version.

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cooperating with other part-time Auditors. In addition, the Company expects him, as part of the audit, toparticipate in important meetings, including the Board of Directors, and to actively express candid views,
including the validity of the proposals as well as the legality of the proposals, from an independent and objective
standpoint in the decision-making process. Due to the above reasons, the Company has determined that he canproperly perform his duties as the Outside Auditor and has appointed him
Hiroyuki Yaji (Outside Auditor, Independent Officer)
As a certified public accountant, Mr. Hiroyuki Yaji has many years of experience in corporate accounting
audits, and has extensive knowledge and insight into corporate governance, compliance, and other topics. In
order to ensure the soundness of the Group's management and increase corporate value over the medium to longterm, the Company expects him to conduct auditing operations based on his own knowledge, experience, etc.,
while fully cooperating with the standing Auditor. In addition, the Company expects him, as part of the audit,
to participate in important meetings, including the Board of Directors, and to actively express candid views,
including the validity of the proposals as well as the legality of the proposals, from an independent and objective
standpoint in the decision-making process. Due to the above reasons, the Company has determined that he canproperly perform his duties as the Outside Auditor and has appointed him.
Ryuzo Koide (Outside Auditor, Independent Officer)
Mr. Ryuzo Koide has a wealth of practical experience in large companies, a wealth of experience as amanager, and a wide range of insights. In order to ensure the soundness of the Group's management and increase
corporate value over the medium to long term, the Company expects him to conduct auditing operations basedon his own knowledge, experience, etc., while fully cooperating with the standing Auditor. In addition, theCompany expects him, as part of the audit, to participate in important meetings, including the Board of Directors,
and to actively express candid views, including the validity of the proposals as well as the legality of the
proposals, from an independent and objective standpoint in the decision-making process. Due to the above
reasons, the Company has determined that he can properly perform his duties as the Outside Auditor and has
appointed him[Supplementary Principle 3-1(3)]■Sustainability initiatives
Under the mission of “Change People, Change Business, Change Japan” and the vision of Change
Productivity,” we are working to co-create a sustainable society with a variety of stakeholders (realizing asustainability society). In order to make Japan a sustainable society despite a decreasing population, we aredeveloping businesses, such as digitization of business models and business processes, support for thedevelopment of digital human resources, and co-creation of self-sustaining local communities. We are providing
a variety of solutions to many customers. We believe that the themes for businesses of companies of the Groupthemselves incorporate the perspectives of sustainability, and that the Group's growth strategy is based on theconcept of sustainability. Our basic approach to sustainability and examples of initiatives by the Group as wellas the impact of risks and opportunities related to climate change on our business activities and earnings aredisclosed in detail on our sustainability website. Regarding the relationship between our approach tosustainability and our management strategies and issues, we disclose and provide specific information in aneasy-to-understand manner in the Revised Midterm Business Plan announced on May 13, 2022.
Our sustainability website: https://www.changeholdings.co.jp/sustainability/
Revised Midterm Business Plan: https://ssl4.eir-parts.net/doc/3962/tdnet/2123306/00.pdf■Disclosures based on TCFD or equivalent framework
The Group's business strategy is tied closely to the environment. One of the strategic areas of the Group's
Midterm Business Plan is to "resolve social issues faced by local communities and make them sustainable," withthe aim of "challenging resolving important and urgent issues in areas where sustainability is at stake." Inparticular, the impact of climate change, including CO2/GHG (GHG) emissions, have a direct impact on thecommunity's people, society, and economics, and the Group has many solutions and services to mitigate theimpacts of climate change if we are so required. We believe that to address these issues seriously is one of theGroup's important social responsibilities, as well as providing new business opportunities. Based on the above
understanding, we disclose “business risks and opportunities associated with climate change” on oursustainability website (https://www.changeholdings.co.jp/sustainability/environment/climate.html#sec2). In the
future, we will evaluate and improve the systems and based on TCFD framework and will work to further
enhance the quality and volume of the information we disclose.
■Human and intellectual property investment<Human capital>
We consider the proactive provision of training opportunities aimed at improving employee skills to be an
extremely important theme from the perspective of continuously improving corporate value and competitive
advantage. In order to maximize each employee's ability and create new value, we are continuously maintaining

This English translation is for reference purposes only. In the event a difference or inconsistency
arises regarding the meaning herein, the original Japanese version shall prevail as the official version.

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and promoting a " corporate culture for learning" so that employees can learn actively and maintain their desire
to continue improving their skills and capabilities. We also provide in-house training (by job type, level and age)throughout the year. We intend to provide a variety of training sessions to improve skills so that each employee
can actively challenge various fields without fearing "trial and error". Our concrete efforts for human capital are
disclosedon
ourSustainability
Site(https://www.changeholdings.co.jp/sustainability/society/employee.html#sec2).
<Intellectual property>
We are promoting digital transformation through training in services and digital human resources, using AI,
voice internet, mobility, IoT, big data, cloud, security and other algorithms, and infrastructure technologies(collectively called "Libraries"). To help realize customers’ digital transformation, it has become possible for us
to combine Libraries based on customer needs and to provide a comprehensive digital transformation solution
for them. In order to utilize new technologies, such as AI, voice internet, mobility, IoT, big data, cloud, andsecurity, which composes the NEW-IT Business, both wheels of the "application development to create effects(offense)" and "secure and efficient operation management (defense)" must be successfully turned. In line withthe emergence of new technologies, we develop applications tailored to each industry and business category,and systematize our technologies and knowledge, including organizational improvements and skill
enhancements. In addition, it is important to establish a timely supply system for the Libraries. Regarding newtechnologies, we are constantly updating our Libraries by raising antennas for collecting information, evaluatingthem from the viewpoint of practicality, availability, and reliability. Based on the Libraries, we invest in
intellectual property through the execution of an intellectual property transfer agreement or license agreementthat is considered necessary, or through M&A of a company that owns the intellectual property.
[Supplementary Principle 4-1 (1)]We have introduced the Executive Officer System in which a portion of important business execution isdelegated from the Board of Directors to Executive Officers in order to build a swift and highly effective
business execution system and to strengthen the management oversight function of the Board of Directors. The
Boards of Directors has defined the items that require the decision-making of the Board, the items that aredelegated by the resolutions of the General Meetings of Shareholders, and important items that affect ourbusiness operations in the Rules of the Board of Directors, and based on this, it makes these decisions.
With regard to deliberations and decisions other than those to be decided by the Board of Directors, we havebroadly delegated authority to Executive Officers and other officers, based on internal regulations, such asorganizational regulations, division of duties regulations, consensus-building regulations, and administrative
authority regulations. In addition, we have clarified responsibilities in the execution of operations, and areworking to ensure flexibility and speed in the execution of operations.
[Principle 4-9]
We have established and practiced our own standards regarding independence for the appointment of Outside
Directors and Outside Auditors, having referred to the Companies Act and the Tokyo Stock Exchange’s Criteria
for the Independence of Outside Directors and Outside Auditors< Criteria for the Independence of Outside Officers>
If our Outside Director and Outside Auditor (hereinafter referred to as “Outside Officer”) does not fallunder any of the following (1) to (13), he or she can be judged to be independent. Hereinafter, the Company
and our affiliated companies (referring to the parent company, subsidiaries , and a sibling company (referring
to any company having the same parent company)) are referred to as “the Group.” Executive Director,
Executive Officer, manager, and other employee are referred to as “Executive Director, etc.”(1) Executive Director, etc. of a company whose current Major Shareholder (a shareholder with 10% or morevoting rights, the same shall apply hereafter) is the Group(2) If the Major Shareholder or the Major Shareholder of the Group is a company in the last five years, theExecuting Director, etc. of such company or its parent company or its Significant Subsidiary (referring to thesubsidiary that is described as a Significant Subsidiary in the item of "Status of the Significant Parent
Company and Subsidiary" or any other material publicized by such company in general in the business reportfor the most recent business year of the company).
(3)The Main Business Partner of the Group (referring to a person or a company who received payment fromthe Group for 2% or more of the total annual sales of the Group in the past three business years) or its
Executive Director, etc.
(4)The Main Lender of the Group (referring to that who provides the Group with a credit equal to or greaterthan 10 million yen per year or 30% of the average annual costs of the related organization, whichever isgreater, on average over the past three business years) or its Executive Director, etc.

This English translation is for reference purposes only. In the event a difference or inconsistency
arises regarding the meaning herein, the original Japanese version shall prevail as the official version.

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CORPORATE GOVERNANCE(5) Certified public accountants (or certified tax accountants) or members, partners or employees of theaccounting auditor or the audit firm (or certified tax accountant firm) who are accounting advisor of theGroup.
(6) Certified public accountants (or certified public tax accountants) or partners or employees of audit firm (orcertified public tax accountant firm) who were the accounting auditor or the accounting adviser of the Groupand who were actually in charge of auditing activities of the Group (except for those who were
supplementarily involved)(7) Lawyers, certified public accountants, certified tax accountants, or other consultants who do not fall under(5) and (6) above, BUT those who have gained more than 10 million yen per year in the form of money orother property benefits from the Group other than the executive officers' Remuneration in the past threebusiness years(8) Employees, partners, associates, or employees of a legal firm, auditing firm, certified public tax accounting
firm, consulting firm, or other specialized advisory firm that does not fall under (5) and (6) above, BUT whose
main client is the Group (meaning a firm who received from the Group payment for Remuneration exceeding
2% of the consolidated sales of such firm or \100 million, whichever is higher, in the past three businessyears).
(9) Persons or Executive Officers , etc. who have received donations or subsidies of 10 million yen or more
per year from the Group in any of the past three business years.
(10) Executive Director, etc. of a company or its affiliate that accepts a board member (whether full-time orpart-time) from the Group.
(11) Persons who fall under any of the following items within 10 years before assuming office:(a) Executive Director, etc. or a director who does not correspond to the Executive Director, etc. of ourparent company.
(b) Auditor of our parent company (provided that, regarding outside auditors, they are independent outside
auditors)(c) Executive Director, etc. of our sibling company(12) Spouses or relatives within the second degree of kinship of the person who falls under (1) to (11) above.
(13) Otherwise, persons who have a possibility of a constant substantial conflict of interest with our generalshareholder as a whole due to circumstances other than those considered in (1) to (12) above.
※Even if a person does fall under any of the above-mentioned items as an Independent Outside Director, such
person can be appointed by our Board of Directors as an Independent Outside Director in light of thepersonality and insights of the person can be regarded as such, provided that, the Company shall explain thereason for considering that the person is appropriate as the Independent Outside Director, unless it violates thestandards set by the Tokyo Stock Exchange and the Companies Act and other laws and regulations.
[Supplementary Principle 4-10(1)]Please refer to the following sections of this Report.
II. Status of the business management organization and other corporate governance systems related to
management decision-making, execution, and supervision
1. Organizational structure and operation[Optional Committee]
Status of the establishment of optional committees, attributes of the members and the chairperson, andsupplementary explanation[Supplementary Principle 4-11 (1)]In order to realize our Group's mission, we believe it is necessary to conduct management that contributes tothe resolution of social issues from a long-term perspective, based on the values of various stakeholders and thesocial influence of the Company. Therefore, from the perspective of enhancing corporate value over the medium
to long term, the Board of Directors endeavors to ensure that knowledge, experiences, abilities, and diversity
are optimal as a whole. Currently, the Board of Directors is composed of Internal Directors who are familiar
with each division and Independent Outside Directors and Independent Outside Auditors who possess a highlevel of expertise, and we believe that we maintain a sufficient set of skills and diversity as a whole. The basic
idea of the size of the Board of Directors is that it shall consist of a sufficient and appropriate number to conduct
extensive discussions. The number of members is up to seven for the Board of Directors and up to five for
Auditors as stipulated in the Articles of Incorporation. Currently, the Board of Directors consists of three Internal
Directors, two Independent Outside Directors, one Independent Outside Standing Auditor and two Independent
Outside Auditors. Of the eight total Directors and Auditors, five are Independent Outside Officers.
The table shown at the end of the report lists the skills currently possessed by the Directors and the Auditors.
We believe that the Board of Directors has the necessary skills as a whole. Please see the Skill Matrix Table atThis English translation is for reference purposes only. In the event a difference or inconsistency
arises regarding the meaning herein, the original Japanese version shall prevail as the official version.

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the end of the report/
Principle 3-1 (4) describes the policies and procedures for the election of the Director and the Auditor.
[Supplementary Principle 4-11(2)]We disclose the status of important concurrent positions held by the Outside Directors and Outside Auditors,
as well as Internal Directors and Standing Auditors in the Notice of Convocation of the General Meeting of
Shareholders and in the Annual Securities Report.
[Supplementary Principle 4-11(3)]We have annually been conducting analyses and evaluations of the effectiveness of the Board of Directors inaccordance with the following evaluation process since the fiscal year ended March 31, 2021.
<Evaluation process>Our Board of Directors conducts a registered on 32 items for all members of the Board of Directors, including
Outside Directors and Outside Auditors. In addition, the Board of Directors deliberates on issues to be addressedin the future based on the results of analysis regarding the questionnaire.
The evaluation results for the fiscal year ended March 31,2024 are summarized below.
<Evaluation results>
As a result of the analysis of the questionnaires and interviews, the majority of the Board of Directors has
evaluated them positively, regardless of the attribution of each Director of the Board (Independent Officers,
Directors, Auditors, Executives, etc.). Therefore, we believe that the effectiveness of the Board of Directors islargely secured in light of the size of our company and the nature of our business. On this basis, the Board of
Directors has confirmed that the following measures will be taken in order to continuously improve theeffectiveness of the Board of Directors and further strengthen corporate governance. We intend to further
improve the effectiveness of the Board of Directors.
<Recognized issues and policy for future actions>●To further enhance discussions on group-based business strategies, portfolio management, etc., we willpromptly collect management information and strengthen its analysis system. In addition, we will refine mattersto be discussed by the Board of Directors so that the Board of Directors can concentrate on deliberations onimportant matters in group management.
●To further enhance the effectiveness of group management and realize sustainable business growth, we willrefine the process of developing the group's management personnel, remuneration and evaluation, etc.
[Supplementary Principle 4-14 (2)]We provide all Directors and Auditors with necessary training opportunities to fulfill their expected roles andresponsibilities based on the knowledge and experiences and also recommend that they participate in various
seminars, study sessions, and cross-industry exchange sessions which are appropriate to help learn the necessary
knowledge and industry trends, of which costs are borne by the Company.
All of Directors and Auditors attend the Board of Directors workshop held at least once a year by inviting
outside lecturers after the Board of Directors in order to train themselves.
In addition, when appointing a new Director, the Company provides such Director with an opportunity to
explain in advance the roles and responsibilities required under the Companies Act, as well as the business
operations of the Company and the Group, the financial condition of the Company and the Group, and the statusof the establishment of an internal control system.
[Principle 5-1]
In order to promote constructive dialogues with shareholders, we have designated the Control & Management
Unit as the IR-related department. At the same time, we have implemented the following initiatives annuallyand the Representative Director and CEO directly explains financial results and responds to Q&A sessions.
<Quarterly>
・Online financial results briefing for individual investors
・Financial results briefings for institutional investors and analysts<At the General Meeting of Shareholders>・Dialogue with Shareholders (conducted directly following the General Meeting of Shareholders.)
In addition, we actively hold individual IR meetings with institutional investors and analysts in order to realize
sustainable and medium-to long-term improvements in corporate value.
We disclose information on our website, including information on our management plans and business results(https://www.changeholdings.co.jp/ir/news/#top_anchor).

This English translation is for reference purposes only. In the event a difference or inconsistency
arises regarding the meaning herein, the original Japanese version shall prevail as the official version.

8

Corporate Governance
CORPORATE GOVERNANCE[Measures to Realize Management with an Awareness of the Cost of Capital and Share Price]（English translation attached thereto）
We believe that we are still in s process toward growth and intend to increase our corporate value by saving our cash
inside for strengthening management foundation and active expansion of business and by applying them to working
capital for strengthening financial status and investment for business expansion.
We disclose the “Measures to Realize Management with an Awareness of the Cost of Capital and Share Price”
regarding the analysis of the above present status and some measures for increasing the corporate value.
Please see: http//www2.Capital structure
Foreign shareholders ratio

less than 10%[Status of major shareholders]Name
S B I Holdings, Inc.
The Master Trust Bank of Japan, Ltd. (Trust Account)
The Custody Bank of Japan, Ltd. (Trust Account)
Yoshihisa Jimbo
Tamayo Sunaga
Hiroshi Fukudome
GIC PRIVATE LIMITED - C
Keiichiro Kinoshita
Akira Ito
Tetsuya Ishihara

Number of shares held
23,359,000
3,985,500
2,815,700
2,752,000
2,687,892
2,141,500
1,658,600
1,205,500
1,174,000
1,170,000

Controlling shareholders (excluding the parent)-----

Parent

None

Percentage
32.28
5.50
3.89
3.80
3.71
2.95
2.29
1.66
1.62
1.61

Supplementary explanation
1. The shareholding ratio is calculated after deducting 623,335 treasury shares.

3.Corporate attributes
Listing market section
Fiscal year end
Industry type
Number of (consolidated) employees at the end of
the most-recent fiscal year
(Consolidated) Sales for the most-recent fiscal year
Number of consolidated subsidiaries at the end of
the most-recent fiscal year

Prime
March
Information & communication
500 to less than 1,000
10 billion yen to less than 100 billion yen
10 to 50 companies

4.Guidance regarding how to protect minority shareholders when dealing with the controlling shareholders
NoneThis English translation is for reference purposes only. In the event a difference or inconsistency
arises regarding the meaning herein, the original Japanese version shall prevail as the official version.

9

Corporate Governance
CORPORATE GOVERNANCE

5.Other special circumstances which may have a material impact on the corporate governance(i)Approach to Group Management
Under the mission of “Change People, Change Business, Change Japan,” and based on the vision of “Change
Productivity”, CHANGE Group (or simply, the “Group”) has been developing business models, digitizing
business processes, and supporting for the development of digital human resources in order to dramaticallyincrease Japanese productivity and make Japan a more sustainable society in the face of the decreasing
population. On May 13, 2022, the Group announced the Mid-term Business Plan (revised version) called“Digitize & Digitalize Japan (Phase 2)” whereby, under the flag of “Digital" × "Local" × "Social”, the Grouphas been resolving social issues faced by local communities through the use of digital technology, actively hiring
digital human resources to make local communities sustainable, expanding new business domains by using
cutting-edge technologies, developing IT platform services, SaaS services, and other products for local
governments, and striving to grow businesses that will dramatically improve Japanese productivity including
local areas.
On April 1, 2023, the former CHANGE, Inc. changed its corporate name to “CHANGE Holdings, Inc.” (orsimply, “we”) and shifted to a holding company structure. Currently, we have 41 Group companies (as of June
26, 2024). Based on the Group's mission, we aim to build a management structure in which we respect theindependence of group companies. At the same time, we intend to build the "federal system" that will createsynergies among members of the Group and maximize the corporate value of the Group. As the parent company,
we will strengthen the Group's strategic functions, optimize the allocation of management resources, andpromote the development of management personnel for the next generation in order to increase the corporate
value of the Group. In addition, we have established internal rules, such as the “Affiliated Company
Management Regulation” to monitor and supervise the execution of Group companies. Important decisionmaking and compliance-related matters of Group companies will be reported to our Board of Directors andapproved thereby.
(ii)Significance of having listed subsidiaries
We acquired E-Guardian, Inc. (or simply, the “Company”) which is listed on the Prime Market of the Tokyo
Stock Exchange and is included in the Group. We own 48.98% of the outstanding shares of the Company througha tender offer that was completed in October 2023 and the assumption of the Company's third-party allotmentof shares that was also executed in the same month. As a result of the International Financial Reporting Standards(IFRS), we have included the Company in our consolidated subsidiaries. The Company has a wide range ofbusinesses related to Internet security, and we expect that the Group will play a core role in the top-class security
vendors in the cyber security field in Japan through the reorganization of the security industry. In addition, theCHANGE Group and the Company have different customer bases, therefore by providing each other crossly
with their respective services, they are expected to satisfy the customer needs of both companies, improve theirsales capabilities and profitability, which will contribute to enhancing the corporate value of both companies. In
particular, in order to satisfy the needs of our customers for increasing their security personnel, it is important
for the Group to promote the Company's security services and to jointly develop new services through thealliance with the Company. We believe that it is significant that we will maintain the Company as a subsidiary.
In addition, we believe that it is important for the Company to foster its unique corporate culture firmly rooted
in the businesses it has developed and to raise awareness of its credibility among the society and cybersecurity
industry in order to acquire more security specialists. Therefore, it is significant to maintain its management
autonomy and keep it as a publicly traded company for the interests of all shareholders, including othershareholders of the Company, as well as for enhancing the corporate value of the Group as a whole.
We believe that even if we do not make the Company a wholly owned subsidiary, it will be possible to share
the knowledge of both companies, conduct wide-ranging personnel exchanges, and effectively utilize
management resources. However, we will continue to verify the rationality of maintaining it as the listing
company.
(iii)Approach to ensuring the effectiveness of the governance structure of a listed subsidiary
In response to our disclosure requirements, we have required the Company to provide a prior report on any
issues which are related to the exercise of voting rights at our General Meetings of Shareholders, those that
affect our timely disclosure, and those that have a significant impact on our consolidated financial statements.
In addition, in order to conduct a tender offer for the Company's shares, which was completed in October 2023,
we have prescribed matters requiring prior discussions and prior approvals with and by us in the "Capital andBusiness Alliance Agreement" (hereinafter, the “Agreement”) with the Company dated August 2, 2023. These
matters are only limited to material matters that may affect the management of the Group, taking into accountconflicts of interest with other shareholders of the Company. The Agreement provides that we have the right todesignate one director of the Company for its board membership, and we will dispatch one board member fromus after the approval of the Company's 26th General Meeting. The director (candidate) is in a position toThis English translation is for reference purposes only. In the event a difference or inconsistency
arises regarding the meaning herein, the original Japanese version shall prevail as the official version.

10

Corporate Governance
CORPORATE GOVERNANCE

supervise the execution of business in order to increase the Company's corporate value but will basically respect
the judgment of the Company's management. The director (candidate) is assumed to make every effort to ensurethat the interests of other shareholders of the Company will not be unduly impaired.
In addition, with regard to the terms and conditions of transactions between a group company (excluding theCompany and its subsidiaries and affiliates) and the Company and its subsidiary and affiliate, the Special
Committee consisting of independent outside directors has been established as the sub-committee of theCompany's board of directors, and the "Guidelines on Inter-Group Transactions" has been established by thetwo companies to prohibit transactions which are unfairly favorable or unfavorable as compared with the sameor similar transactions with independent third parties and to prohibit transactions for the purpose of transferring
profits, losses or risks, in order to avoid unduly harming the interests of both shareholders.

II. Status of the management mechanism and other corporate governance system related to managerial decision-making,execution, and supervision
1.Items related to organizational structure and operation
Organizational form

A company with the Board of Auditors[Related to Directors]
Number of Directors in the Articles of Incorporation
Term of office of Directors in the Articles ofIncorporation
Chairman of the Board of Directors
Number of Directors
Appointment of Outside Directors
Number of Outside Directors
Number of Outside Directors appointed as an
Independent Director

7 persons
1 yearthe President
5 persons
Already selected
2 persons
2 personsRelated to the Company (1)NameAttributeA

Takeshi Matsumoto
Kayo Takigawa

Relationship with the Company (*1)
B C D E F G H I J

From other company
LawyerK〇※1 Nature of relationship with the Company
a. Executive of the Company or their subsidiaryb. Manager or non-executive directors of the parent of the Company
c. Executive of a brother company of the Company
d. A person whose main business partner is the Company, or an executive thereof
e. Major business partner of the Company, or its business executive
f. Consultant, accounting expert, and legal expert who has received significant money and other property from the Company inaddition to the executive remuneration
g. Major shareholder of the Company (if the major shareholder is a company, the business executor of such company)h. Execute of the Company's business partner (not applicable to either d, e, or f) (only a person)
i. Executive of a company which has a relationship of the mutual assignment of Outside Directors with the Company (only a Person)
j. Executive of an entity to which the Company makes donations (only a person)k. OtherThis English translation is for reference purposes only. In the event a difference or inconsistency
arises regarding the meaning herein, the original Japanese version shall prevail as the official version.

11

Corporate Governance
CORPORATE GOVERNANCE

Relationship with the Company (2)Name

Independent
Officers

TakeshiMatsumoto○

Kayo
Takigawa○

Supplementary
Explanation Concerning
Relationship with theCompany

We have signed a contract
with the Nagashima, Ono,and Tsunematsu Legal
Office, to which Ms. Kayo
Takigawa
belongs,
regarding the delegation oflegal work. However,
because the Group is not
their
major
business
partner, their sale to theGroup is less than 1% of
their total sales, and she has
never been involved in ourbusiness, we believe thather
independenceissufficiently assured.

Reason for Appointment

Mr. Takeshi Matsumoto has been involved in
IT businesses for many years and possesses a
wealth of experiences and a broad insight as amanager. Based on his knowledge andexperience, we expect him to ensure theobjectivity and neutrality of the management byincorporating his external perspective andmonitoring function. We have determined that hewill contribute to further growth of the Group andthe enhancement of corporate governance. For
this reason, the Company has determined that hecan properly perform his duties as the Outside
Director and has appointed him.
There is no interest of conflict to be described
between him and the Company.
Ms. Kayo Takigawa is a qualified lawyer, being
familiar with corporate laws, and having a wide
range of knowledge regarding legal issues. Basedon her knowledge and experience, we expect her
to ensure the objectivity and neutrality of the
management by incorporating her external
perspective and monitoring function. Although
she has not been involved in corporate
management other than being an outside director,
the Company has determined that she canproperly perform her duties as the Outside
Director and has appointed her for the above
reason.

[Voluntary Committee]
Existence of a committee equivalent to a nominating
committee or a remuneration committee

Yes

Status of the establishment of a voluntary committee, the composition of the committee and the attribute of thechairman

Title of thecommittee

Allmembers(names)Full-timemember(name)

Internal
Director(Name)

OutsideDirector(name)

External
experts(name)

Other(Name)

Nomination
Any committee
corresponding to the Advisorynominating committee
Committee

3

0

1

2

0

0

ChairmanInternal
Director

This English translation is for reference purposes only. In the event a difference or inconsistency
arises regarding the meaning herein, the original Japanese version shall prevail as the official version.

12

Corporate Governance
CORPORATE GOVERNANCE

Any committee
corresponding to the
remunerationcommittee

Remuneration
Advisory

Internal
3

0

1

2

0

0
Director

Committee

Supplementary explanation<Nomination Advisory Committee>
In order to strengthen the independence and objectivity of the functions of the Board of Directors in connection
with the nomination of the Directors (including successors), and to strengthen accountability, we haveestablished the Nomination Advisory Committee as an advisory body to the Board of Directors, of which
majority is composed of Independent Outside Directors. Our Nomination Advisory Committee discusses andreports to the Board of Directors on issues related to the election, re-assignment, and removal of board members,
as well as issues related to successor planning (including training) of the Representative Directors. In addition,
we have established rules of the Nomination Advisory Committee, which define the position of the Nomination
Advisory Committee and how to operate it.
●Composition
Please see "Status of the establishment of a voluntary committee, the composition of the committee and theattribute of the chairman.”●Events
The Nominating Advisory Committee was held twice during the fiscal year ending March 2024, and otherdiscussions were made separately by committee members. The date of the meeting are as follows:
1st Nomination Advisory Committee held on May 9, 2024
2nd Nomination Advisory Committee held on May 22, 2024
●AttendanceHiroshi Fukudome (Internal Director) attended all (twice)Takashi Matsumoto (Outside Director) attended all (twice)Kayo Takizawa(Outside Director) attended all (twice)<Remuneration Advisory Committee>
In order to strengthen the independence and objectivity of the functions of the Board of Directors and theaccountability of Directors' remuneration, we have established the Remuneration Advisory Committee as anadvisory body to the Board of Directors, of which majority is composed of Independent Outside Directors. The
Remuneration Advisory Committee discusses issues related to the policies for determining individual
remuneration for each Director, including the selection of performance-related indices and the standard forgiving share-related remuneration, which are linked to performance-based remuneration, as well as issues
related to individual remuneration for each Director, and reports the discussion results to the Board of Directors.
In addition, we have established rules of the Remuneration Advisory Committee that clarify the status of theRemuneration Advisory Committee and how it is operated.
●Composition
Please see " Status of the establishment of a voluntary committee, the composition of the committee and theattribute of the chairman.”●Events
The Remuneration Advisory Committee meetings were held twice in the fiscal year ended March 2024 todiscuss Director’s remuneration, etc., and other discussions were made separately by committee members.
The dates of the meeting are as follows.
1st Remuneration Advisory Committee held on May 9, 2024
2nd Remuneration Advisory Committee held on May 22, 2024
●AttendanceHiroshi Fukudome (Internal Director) attended all (twice)This English translation is for reference purposes only. In the event a difference or inconsistency
arises regarding the meaning herein, the original Japanese version shall prevail as the official version.

13

Corporate Governance
CORPORATE GOVERNANCE

Takeshi Matsumoto (Outside Director) attended all (twice)Kayo Takigawa (Outside Director) attended all (twice)[Related to Auditors]
Adoption of an Auditor System
Number of Auditors in the Articles of Incorporation
Number of Auditors

Adopted5 persons
3 personsCollaboration between Auditors, the Accounting Auditor, and the Internal Audit Division
The person in charge of internal audits, Auditors, and Accounting Auditors always exchange information as
appropriate to promote effective and efficient audits. Specifically, they are collaborating as follows:(i)Collaboration between Auditors and the Internal Audit Division
Auditors receive an explanation of the Internal Audit Plan (risk identification, risk assessment, selection ofpriority audit themes based on the results of risk assessment, audit schedules for the current fiscal year, etc.)
conducted by the Internal Audit Division and holds question and answer sessions with the Internal Audit
Division. Auditors also attend on-site hearings made by the Internal Audit Division when necessary to identify
issues related to business execution and exchange opinions with the Internal Audit Division regarding such
recognized issues, etc. Auditors receive Internal Audit Reports upon completion of internal audits. In addition,
the Internal Audit Division regularly holds meetings with Auditors as needed.
(ii)Collaboration between Auditors and Independent Accounting Auditors
Auditors receive an explanation of the Accounting Audit Plan (audit system, audit method, etc.) to be
conducted by the Accounting Auditor, receive the Accounting Audit Report based on the law at the end of theaudit. In addition, the Accounting Auditor holds meetings with Auditors on individual cases and havediscussions on system changes, etc. as necessary.
(iii)Cooperation among Auditors, the Accounting Auditor, and the Internal Audit Division
They hold three-way audit meetings at least once a year with the aim of promoting audits effectively andefficiently and enhancing the effectiveness of the audits themselves.
Status of Outside Auditors
Number of Outside Auditors
Number of Outside Auditors
Independent Officer

appointed

asAppointed
3 persons
3 persons

A

B

Relationship with the Company (1)Name
Takehiko Kubo
Hiroyuki Yaji
Ryuzo Koide

Attribute
From other company
From other company
From other company

C

Relationship with the Company (*1)
D E F
G H I J K
△
△

L

M

※1 Nature of relationship with the Company
a. Executive of the Company or their subsidiaryb. Non-executive Directors or Accounting Advisor of the Company or its subsidiaryc. Executive or non-executive directors of a parent of the Company
d. Auditor of the parent of the Company
e. Executive of a brother company of the Company
f. A person whose main business partner is the Company, or an executive thereof
g. Major business partner of the Company, or its business executive
h. Consultant, accounting expert, and legal expert who has received significant money and other property from the Company inThis English translation is for reference purposes only. In the event a difference or inconsistency
arises regarding the meaning herein, the original Japanese version shall prevail as the official version.

14

Corporate Governance
CORPORATE GOVERNANCE

addition to the executive remuneration
i. Major shareholder of the Company (if the major shareholder is a company, the business executor of such company)
j. Execute of the Company's business partner (not applicable to either d, e, or f) (only a person)
k. Executive of a company which has a relationship of the mutual assignment of Outside Directors with the Company (only aperson)l. Executive of an entity to which the Company makes donations (only a person)
m. other

Relationship with the Company (2)Name
Independent
Officers
Takehiko Kubo○

Hiroyuki Yaji○

Supplementary
Explanation
Concerning
Relationship with theCompany
Mr. Takehiko Kubo,
who was an officer of
Sumitomo
Mitsui
Banking Corporation,
our main bank, until
March 2017, was not
involvedintransactions with us
during his tenure andhas passed a certain
periodsince
hisretirement. Therefore,
we judge that his
independenceissufficiently assured.

Mr. Hiroyuki Yaji wasa partner of Ernst &Young
ShinNihon
LLC, our Accounting
Auditor, until October
2022. Over the last
three years, he has not
actually
been
incharge of the auditing
operations of theGroup. We believethat his independence
is sufficiently assured.

Reason for Appointment
Based on his management experience at alarge company and many years of experienceat a financial institution, Mr. Takehiko Kubo
has considerable knowledge of compliance,internal control, risk management, finance,
and accounting. In order to ensure thesoundness of the Group's management andincrease corporate value over the medium tolong term, the Company expects him to
conduct effective audits while fully
cooperating with other part-time Auditors. In
addition, the Company expects him, as part of
the audit, to participate in important meetings,
including the Board of Directors, and toactively express candid views, including thevalidity of the proposals as well as the legalityof the proposals, from an independent andobjective standpoint in the decision-making
process. Due to the above reasons, theCompany has determined that he can properly
perform his duties as the Outside Auditor andhas appointed him
Mr. Kubo attended all meetings of the Boardof Directors and the Board of Auditors thatwere held up to the fiscal years ended March
31, 2024 and 2025, respectively. Please notethat there is no direct conflict of interest
between the company and him.
As a certified public accountant, Mr.
Hiroyuki Yaji has many years of experience incorporate accounting audits, and has extensive
knowledge and insight into corporate
governance, compliance, and other topics. In
order to ensure the soundness of the Group's
management and increase corporate value
over the medium to long term, the Company
expects him to conduct auditing operations
based on his own knowledge, experience, etc.,
while fully cooperating with the standing
Auditor. In addition, the Company expects
him, as part of the audit, to participate inimportant meetings, including the Board ofThis English translation is for reference purposes only. In the event a difference or inconsistency
arises regarding the meaning herein, the original Japanese version shall prevail as the official version.

15

Corporate Governance
CORPORATE GOVERNANCE

Directors, and to actively express candid
views, including the validity of the proposals
as well as the legality of the proposals, froman independent and objective standpoint in thedecision-making process. Due to the above
reasons, the Company has determined that hecan properly perform his duties as the Outside
Auditor and has appointed him.
Since the election of the Outside Auditor, Mr.
Yaji attended all meetings of the Board of
Directors and the Board of Auditors in the year
ending March 31, 2024 and 2025,
respectively. There is no conflict of interest
between the company and him.
Mr. Ryuzo Koide has a wealth of practicalexperience in large companies, a wealth ofexperience as a manager, and a wide range of
insights. In order to ensure the soundness of
the Group's management and increase
corporate value over the medium to long term,
the Company expects him to conduct auditing
operations based on his own knowledge,
experience, etc., while fully cooperating withthe standing Auditor. In addition, theCompany expects him, as part of the audit, toparticipate in important meetings, including
the Board of Directors, and to actively express
candid views, including the validity of the
proposals as well as the legality of the
proposals, from an independent and objective
standpoint in the decision-making process.
Due to the above reasons, the Company has
determined that he can properly perform his
duties as the Outside Auditor and has
appointed him
Since the election of the Outside Auditor Mr.
Koide attended all meetings of the Board of
Directors and the Board of Auditors in the year
ending March 31, 2024 and 2025,
respectively. Please note that there is no directconflict of interest between the company andhim.

Ryuzo Koide[Related to Independent Directors]
Number of Independent Directors

5 persons

Other Items Related to Independent Directors
We have established and practiced our own standards regarding independence for the appointment of Outside
Directors and Outside Auditors, having referred to the Companies Act and the Tokyo Stock Exchange's Criteria
for the Independence of Outside Directors and Outside Auditors. For the criteria for determining theindependence of our Outside Directors and Outside Auditors, please refer to I. “Basic Approach to Corporate
Governance, Capital Structure, Corporate Attributes and Other Basic Information” [Disclosure Based on
Principles of the Corporate Governance Code] in Principle 4-9.

[Incentives]
Implementation concerning incentives for Directors

We have introduced a performance-linked remuneration
system and a share option system

Supplementary explanation
We have introduced a share option plan with the aim of enhancing motivation and morale to improve businessThis English translation is for reference purposes only. In the event a difference or inconsistency
arises regarding the meaning herein, the original Japanese version shall prevail as the official version.

16

Corporate Governance
CORPORATE GOVERNANCE

performance and enhancing shareholder value over the medium to long term. Details of the performance-linked
remuneration system are described in [Directors’ remuneration].
Eligible persons for the share option

Internal Director and employees

Supplementary explanation
We have introduced a share option plan with the aim of enhancing motivation and morale to improve businessperformance and enhancing shareholder value over the medium to long term.

[Director’s remuneration]
Disclosure status

Not disclosing individual remuneration

Supplementary explanation
Since there is no Director or Auditor whose total remuneration is 100 million yen or more, individual
disclosure of remuneration is not necessary. Remuneration for the Directors and Auditors is disclosed in the total
amount basis for each category.
Existence of a policy for determining the amount of
remuneration or the calculation method thereof

Yes

Disclosure of the policy for determining the remuneration or the method for calculating such amount(a) Policy for determining remuneration, etc.
Please refer to the following section of this Report.
I. Basic views on corporate governance, capital structure, corporate attributes, and other basic information
1.Basic concepts[Disclosure based on each principle of the Corporate Governance Code][Principle 3-1]
(3)Policies and procedures for the Board of the Directors to determine the remuneration of Executives andDirectors(b)Method of calculating performance-linked remuneration for the fiscal year ending March 2025
We determined the performance-linked remuneration for the fiscal year ending March 2025 and pay it basedon the following method after the performance-linked index figures are finalized.
a. Total payment
The total amount to be paid is the total of the individual payments of b. (i) and (ii) (the maximum amount is85,000,000 yen).
b. Individual payments
The specific calculation formula for individual payments is shown below:(i) Performance-linked remuneration based on the consolidated performance
Index: Profit for the fiscal year ending March 2025 attributable to owners of the parent before recording
performance-linked remuneration
Total amount of performance-linked remuneration based on consolidated performance = B × C
A = Net profit attributable to owners of the parent before recording performance-linked remuneration for the
fiscal year ending March 2025 / net profit attributable to owners of the parent for the fiscal year ending March2025 (8,069,459,551 yen)B = 5,000,000 yen
C = (A-1.00) ×100 (decimal point to be truncated, 0.17 is the upper limit)
Calculation basis for individual payment = Total payment of performance-linked remuneration based on
consolidated performance × position points / total number of eligible position points
Position points are as follows:
Representative Director and CEO: 50
Director and Executive Vice President: 25
Director and CFO: 25(iii) Description of performance indicators and that regarding the fiscal year ended March 2024
(Millions of yen)
Details ofTarget value for
Actual value for
Total amount paid

This English translation is for reference purposes only. In the event a difference or inconsistency
arises regarding the meaning herein, the original Japanese version shall prevail as the official version.

17

Corporate Governance
CORPORATE GOVERNANCE

performance indicators

the fiscal year
ended March 2024

Incentive fee
based on consolidated results

the fiscal year
ended March 2024

7,211

4,325

based on the above
calculation formula--[Support system for Outside Directors (Outside Auditors)]
In order to build a system in which Outside Directors and Outside Auditors can accurately and effectively
implement supervision and monitoring of management from an independent standpoint, we have established asystem to provide necessary materials related to management and explain the circumstances whenever necessary
in cooperation with the Administrative Division and the Internal Audit Division.

<Status of those who has retired from our Representative Director>■Names of consultants, advisors, etc., who are former presidents and representatives
Name

Position

DutiesYoshihisa
Jimbo

Chairmanand Founder

Advisory for management, theperformance of certain internal
issues, planning and operations for
employee training

Working conditions（full-time or parttime, paid or not,etc.）
Full-time and paid

Retirement
date

Term

June
2023

-

27,

■Total number of consultants and advisors who were the former Representative Director, etc.
1 person■Other Matters
On June 27, 2023, Mr. Yoshihisa Jimbo, the Chairman of the previous Board, retired the position of the Representative
Director and was newly assigned as the Chairman, Founder and Executive Officer on June 28, 2023. The Chairman,
Founder and the Executive Officer has been delegated authorities from the Board to be engaged on some internal issues
in accordance with the Rules for Executive Authority. However, he will not be involved in decision-making andexecution of other management, and also do not basically participate in the Board of Directors.

2.Issues related to the functions of business execution, auditing and supervision, designation, and remuneration
determination (overview of the current corporate governance system)
The corporate organization and other corporate governance system related to managerial decision-making,execution, and supervision are as follows:a. Board of Directors
The Board of Directors is composed of five Directors (including two Outside Directors). The decision-making
body is capable of responding swiftly to changes in the business environment, and we are working to establish
a system for supervising the execution of business operations and to ensure fair decision-making. In principle,
the Board of Directors holds regular meetings once a month as well as ad hoc meetings as necessary to determine
important items related to management and business execution. Auditors also attend the Board of Directors’
meetings to audit the execution of their duties. According to the Articles of Incorporation, the number of
Directors shall consist of no more than seven, and the resolution to elect such Directors shall be adopted by amajority of the votes of shareholders present at a General Meeting of Shareholders, provided that, at least

This English translation is for reference purposes only. In the event a difference or inconsistency
arises regarding the meaning herein, the original Japanese version shall prevail as the official version.

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Corporate Governance
CORPORATE GOVERNANCE

shareholders holding one-third of total voting rights and entitled to exercise their voting rights shall attend themeeting and the voting is not on the cumulative basis.
b. Nomination Advisory Committee
In order to strengthen the independence and objectivity of the functions of the Board of Directors inconnection with the nomination of Directors (including the succession plan) and to strengthen accountability,
we have established the Nomination Advisory Committee (consisting of a total of three members, including theRepresentative Director and two Independent Outside Directors), the majority of which are Independent Outside
Directors, as an advisory body to the Board of Directors. The Nominating Advisory Committee discusses andreports to the Board on issues related to the election, re-assignment, and removal of Directors, as well as issues
related to successor planning (including training) of Directors. In addition, the Nomination Advisory Committee
Regulations stipulates that it shall consist of three or more members and that the majority of the members shallbe Independent Outside Directors, and , to pass a resolution, a majority of the members who can vote for the
resolution shall attend the meeting and the majority of such attending members can make the resolution.
c. Remuneration Advisory Committee
In order to strengthen the independence and objectivity of the functions of the Board of Directors and theaccountability of Directors' remuneration, we have established the Remuneration Advisory Committee(composed of a total of three members, including the Representative Director and two Independent Outside
Directors), a majority of which are Independent Outside Directors, as an advisory body to the Board of Directors.
The Remuneration Advisory Committee discusses issues related to the policies for determining individual
remuneration for each Director, including the selection of performance-related indices and the standard forgiving stock-related remuneration, which are linked to performance-based remuneration, as well as issues
related to individual remuneration for each Director, and reports them to the Board of Directors. The Regulationsof the Remuneration Advisory Committee stipulates it shall consist of three or more members and that the
majority of the members shall be Independent Outside Directors, and, to pass a resolution, a majority of themembers who can vote for the resolution shall attend the meeting and the majority of such attending members
can make the resolution
d. Management Committee
We have established the Management Committee as an advisory body to the Board of Directors to discuss
management policies, management strategies, business plans, and other matters. The Management Committee
is composed of Directors and Executive Officers and Executive Officers, and any other Officers nominated by
the Chief Executive Officer. The Standing Auditor voluntarily participates, and it is, in principle, held once amonth.
e. Board of Auditors
The Board of Auditors consists of three members, one Standing Auditor and two part-time Auditors. Membersof the Board of Auditors also attend meetings of the Board of Directors, and they have established a system forauditing overall management, centered on accounting audit and operational audit. Under the Articles ofIncorporation, number of the Board of Auditors is limited to five, and the resolution to elect such Auditors shallbe adopted by a majority of the votes of shareholders attending at the General Meeting of Shareholders who atleast hold one-third of the total voting rights and are entitled to exercise their voting rights.
f. Risk Management System
We recognize risk management as an extremely important management issue. Specifically, we are working toenhance our internal control functions by formulating business plans, budget controls, operating and checking
operations based on various internal rules, and strengthening internal audits in order to strengthen the risk
management while the Directors and the Board of Directors execute operations and supervise management.
g. Internal Audit
We have established an independent Internal Audit Division. One dedicated Internal Audit Officer, appointed
by the Representative Director and Chief Executive Officer, conducts operational audits and reports the audit
results to the Representative Director and the Chief Executive Officer and Standing Auditor. The Representative
Director and the Chief Executive Officer, based on reports, instructs relevant divisions to make improvements
and instructs them to report on the improvements. In addition, the Internal Audit Officer, Auditors, andAccounting Auditors appropriately exchange information to ensure effective and efficient audits.

3.Reason for adopting the current corporate governance system
We are a company with internal statutory auditors and have established the General Meeting of Shareholders,the Board of Directors, the Board of Auditors, and the Accounting Auditor as organizational bodies inThis English translation is for reference purposes only. In the event a difference or inconsistency
arises regarding the meaning herein, the original Japanese version shall prevail as the official version.

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Corporate Governance
CORPORATE GOVERNANCE

accordance with the Companies Act. We also recognize risk management as an extremely importantmanagement issue. Specifically, we are working to enhance our internal control functions by formulating
business plans, budget controls, operating and checking operations based on various internal rules, andstrengthening internal audits in order to strengthen risk management while the Directors and the Board of
Directors execute operations and supervise management.
With regard to the functions and roles that we expect of Outside Directors, they can ensure the objectivity andneutrality of the management-monitoring functions by bringing an external perspective because they have
wealth of experiences in our business areas and have specialized and wide-ranging knowledge in corporate legal
affairs, accounting, etc. The functions and roles expected of Outside Auditors are to ensure the objectivity andneutrality of the management-monitoring function by bringing an external perspective because they havemanagement experiences at large companies as CEO and CFO, practical experience at a financial institution andexecutive experiences at multiple companies.
In order to build the above-mentioned system, we have appointed two Independent Outside Directors andthree Independent Outside Auditors to exercise sufficient supervisory and oversight functions over the Board of
Directors.

III. Implementation of measures for shareholders and other stakeholders
1.Initiatives to activate the General Meeting of Shareholders and facilitate the exercising of voting rights
Early dispatch of the General
Meetingof Shareholders
Convocation Notices
Scheduling of the General
Meeting of Shareholders to
avoid concentration (with othercompanies)
Voting by electromagnetic
methodParticipation in the Electronic
Voting Platform and othermeasures to improve theenvironment for the exercisingof voting rights by institutions
Availability ofanotice(summary) in English
OthersSupplementary explanation
In order to ensure adequate time for consideration in the exercise of voting
rights, we are working to deliver them as soon as practicable. We sent thenotice of convocation for the General Meeting of Shareholders in the fiscal
year ended March 2024 on June 10, 2024. The information contained in thenotice is also published on our website on June 5, 2024.
We are avoiding concentrated dates with other companies. We held theAnnual General Meeting of Shareholders in the fiscal year ended March2024 on June 26, 2024.
Voting rights can be exercised via the Internet.
We have been participating in the Electronic Voting Platform for
institutional investors operated by ICJ, Inc.

We released the English version of the convocation notice on our website
on June 5, 2024.
We have introduced a virtual general meeting (hybrid participating type)with the aim of achieving the revitalization of the General Meeting of
Shareholders. At the General Meeting of Shareholders, we visualized
various materials, and received inquiries via the Internet. This is an
opportunity for shareholders who are unable to attend the General Meetingof Shareholders to understand the nature of our business and our businessconditions.

2.Investor relations activities
Supplementary explanation
Creating andpublishing theDisclosure Policy

Regular briefings forindividual investors

We believe that it is necessary to communicate the informationnecessary for investment decisions in a prompt, accurate, and fairmanner in order to build long-term relationships of trust with ourshareholders and investors. Therefore, we have formulated ourDisclosure Policy, announced, and posted it on our website.
Disclosure Policy:
https://www.changeholdings.co.jp/disclosure_policy/
We hold online financial results briefings for individual
investors every quarter. Representative Director and CEO appears
and is appointed to provide a direct explanation of our businessoverview and operating results.

Presentation by the
CEO

Yes

This English translation is for reference purposes only. In the event a difference or inconsistency
arises regarding the meaning herein, the original Japanese version shall prevail as the official version.

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Corporate Governance
CORPORATE GOVERNANCE

Regular briefings foranalysts andinstitutional investors
Regular briefings foroverseas investors
Publication of IRdata on the website
Creation of an IR
Division (IR Officer)

We hold online financial results briefings for analysts andinstitutional investors every quarter. Representative Director and
CEO appears and is appointed to provide a direct explanation of
the Company's business overview and operating results.
We regularly hold telephone and online conferences. In addition,
we have active opportunities for dialogue, including participationin conferences hosted by security companies.
Information on IR is available on our website.
https://www.changeholdings.co.jp/ir/
The Control & Management Unit is in charge of IR.

Yes

Yes

3.Measures to ensure respects for stakeholders
Internal Rules, etc. that
promote respects for the
status and position of
stakeholders

Supplementary explanation
We adopted the Basic Sustainability Policy at a meeting of the Board of Directors
held on December 24, 2021. One of the policies therein is to build relationship oftrust with stakeholders.
<Basic Sustainability Policy (excerpt)>
2.Building Trust with Stakeholders
・We deeply understand that we are developing our businesses throughrelationships with a diverse range of stakeholders, including shareholders,customers, vendors, employees, and communities, and will work to build
relationships of trust with them through smooth and mutual communication.

Implementationofenvironmental protection
and CSR activities

Policy formulation for thedisclosure of information to
stakeholders

In addition, we have prepared various internal regulations which stipulate theestablishment of a business promotion and management system that respects theperspectives of stakeholders.
<Approaches to climate change and environmental preservation activities>
Our Group's business strategy is tied closely to the environment. One of thestrategic areas of the Group's Midterm Business Plan is to "resolve social issues
faced by local communities and make them sustainable," with the aim of"challenging resolving important and urgent issues in areas where sustainability
is at stake." In particular, the impacts of climate change, including CO2/GHG(GHG) emissions, have a direct impact on the community's people, society, andeconomics, and we have many services for providing solutions to mitigate theimpacts of climate change if so required. We believe that to address these issues
seriously is one of the Group's important social responsibilities, as well as
providing new business opportunities. Our Group's approach to climate change
countermeasures and specific initiatives are disclosed in detail on oursustainability website.
“Concept of Climate Change and Environmental Conservation Activities”:
https://www.changeholdings.co.jp/sustainability/environment/climate.html#sec1“Concrete Efforts to Reduce Greenhouse Gas”:
https://www.changeholdings.co.jp/sustainability/environment/climate.html#sec3
3<Initiatives for local community contribution and CSR activity>
To create a sustainable future for local communities, we have established newalliances with partners having the same ambition, involving corporations,organizations, and citizens, based on the value of "co-creation in the region", anddeveloping solutions to social issues, not just to expand their businesses. Our
Group's specific initiatives are disclosed in detail on our sustainability website.
Specific initiatives related to community involvement and CSR activities:
https://www.changeholdings.co.jp/sustainability/society/community.html#sec1
In order to achieve sustainable growth and improve corporate value over the
medium to long term, we believe it is important to promote business activities
while understanding the needs of our stakeholders. Accordingly, in order toprovide our stakeholders with appropriate information on the status of ouractivities, we disclose not only the business and other various reports, such as
Securities Reports, and timely disclosure information contained in the Notice ofThis English translation is for reference purposes only. In the event a difference or inconsistency
arises regarding the meaning herein, the original Japanese version shall prevail as the official version.

21

Corporate Governance
CORPORATE GOVERNANCE

OthersConvocation of the General Meeting of Shareholders, but also voluntarily
disclose other information that we deem necessary from the standpoint of social
responsibility.
<Approaches to respect for human rights>
As a company responding to the expectations of its stakeholders and actively
fulfilling its social responsibilities, the Group believes that one of our importantsocial missions is to respect human rights and proactively address various humanrights issues. The Group understands that the provisions of the "International Billof Human Rights (the Universal Declaration of Human Rights and theInternational Covenant on Human Rights and the International Covenant on Civil
and Political Rights)" and the "Fundamental Principles at Work" (the Four Fields
and the 8 Conventions) of the International Labor Organization (the ILO), as wellas the "Ten Principles on Human Rights, Labor Standards, the Environment andAnticorruption in the United Nations Global Compact" should be observed at aminimum. To express this recognition, we have established the "Basic Policies
on Respect for Human Rights."
Basic Policy on Respect for Human Rights:
https://www.changeholdings.co.jp/sustainability/society/humanrights.html#sec1<Status of diversity and female active participation>
For information on the active participation of our diversity and women, pleaserefer to Principle 2-4(1), Disclosure Based on the Principles of the Corporate
Governance Code.
<Systems to support diverse working styles>
We introduced and are still keeping a telework system for all employees since
March 2020 and are currently applying this system. When introducing thetelework system, we have designed a system that allows employees to choose avariety of working styles according to their own situation, such as working at theoffice in consideration of the difficulty of working at home due to various
circumstances. In addition, we have introduced a full-fledged online contract
signing system so as not to prevent diverse ways of working. In the future, we
intend to further expand a variety of systems that will support a variety of ways
of working in addition to the existing childcare and family care vacation systems.

IV. Items related to internal control system, etc.
1.Basic policy and structures regarding the internal control system
The Board of Directors has already decided on a system to ensure the appropriateness of operations as set
forth in the Companies Act and the Regulations for Enforcement thereof, and the details are as follows:
1. System to ensure that executions of duties by Directors and employees comply with laws and regulations andthe Articles of IncorporationA) In addition to establishing the Code of Conduct for the members of the Board and employees to comply
with laws and regulations, the Articles of Incorporation, social codes, and internal rules, we also provide
continuous education and dissemination activities related to the basics of compliance and information
management that are essential to business operations.
B) The Compliance Committee conducts investigations into the compliance system to check whether or notthere is a problem with compliance. If there is a problem, the Committee instructs improvement.
C) In addition to establishing a system for reporting suspected compliance violations, we have established theInternal Notification Rule and secured strict measures.to ensure the confidentiality of callers and to prevent themfrom suffering from disadvantages.
D) In the event of a compliance violation, the Compliance Committee investigates the cause, prevents theoccurrence of the violation, and clarifies the responsibility and take strict actions.
2. Structure and system to preserve and manage information relating to directors in the execution of their duties
We appropriately preserve and manage information relating to the execution of duties of the Director in theform of documents or electronic records in accordance with internal rules such as the Document Retention andManagement Rules.
3. Rules and other system to manage risk of lossA) With regard to the risk of loss (risk), we strive to prevent the occurrence of risks and prevent the spread ofThis English translation is for reference purposes only. In the event a difference or inconsistency
arises regarding the meaning herein, the original Japanese version shall prevail as the official version.

22

Corporate Governance
CORPORATE GOVERNANCE

crises by responding to them in accordance with the Risk Management Rules.
B) The status of activities in each department related to risk management is reported to the Board of Directors
as necessary, and the Control & Management Unit audits the effectiveness of the Risk Management System.
C) We regularly hold meetings with all employees to communicate and report on operations, to collectinformation, and share and unify knowledge.
4.System for ensuring efficient execution of Directors' duties
A) To ensure the effective execution of the duties of the Director, we hold the Board of Directors’ meeting
monthly and, if necessary, on an ad hoc basis.
B) The Board of Directors sets company-wide goals shared by Directors and employees and strives to diffuse
these goals.
C) Directors make necessary decisions on the items delegated to execute business in accordance with theRules for Segregation of Operations.
5. Structure to ensure that the operations of the Company and its affiliated companies are adequateA) Managers of affiliated companies monitor and oversee the execution of their board members in accordancewith internal rules, such as the Affiliated Companies Management Rules.
B) Major decision-making in the business activities of subsidiaries is to be reported to the Board of Directors
and be approved.
C) We regularly hold meetings with subsidiaries to share information, communicate, and unify groupmanagement policies.
D) The Internal Audit Division regularly conducts operational audits, internal control audits, etc. of
subsidiaries, and reports the results to the Representative Director and the Chief Executive Officer and theStanding Auditor.
6. In cases where an Auditor requests to have employees who assist in the duties of the Auditor, mattersconcerning the system concerning such employees and the independence of such employees from the Directors
A) In order to improve the effectiveness of the audit by the Auditors and to ensure the smooth performanceof the audit functions, when an Auditor requests the placement of an employee who should assist in his/herduties, such employee can be assigned for that purpose. These employees are selected from those who have theappropriate knowledge and skills required for audit operations after the Board of Directors consults with the
Auditors.
B) These employees can concurrently be engaged in other regular positions but shall stop such regular position
if request for full-time audit assignment is made by Auditors.
C) Transfers, evaluations, and disciplinary actions for these employees are determined after the approval of
the Auditors.
7. System for reporting from the Directors and employees to the Auditors and other systems for reporting to the
Auditors
A) The Auditor can attend the Management Committee and the Board of Directors’ meetings in order tounderstand the status of the execution of important decision-making processes and operations.
B) The Auditor can view internal decision forms and other important documents, and if requested, relevant
parties immediately submit documents and materials to the Auditors.
C) The Director immediately reports to the Auditor if there is any risk of significant damage to the Group in
the course of executing his or her duties.
D) The Auditor may directly request the Directors and employees to report on important matters that may
affect the business or business performance.
8. System to ensure that an employee who reported to the Auditor does not receive unfavorable treatment
because of the fact that the employee submitted the report
The Group forbids unfavorable treatments against those who have reported to the Auditor and protect themfrom being subject to disciplinary action or other disadvantageous measures simply because they have reported
to the Auditors.
9. Matters concerning procedures for advance payment or reimbursement of expenses arising from the executionof duties by the Auditor and other policies for the payment of expenses or obligations arising from the executionof such duties
In the event the Auditor requests advance payment or reimbursement of expenses incurred in the executionof his/her duties, such expenses or liabilities shall be promptly paid unless it is reasonably deemed unnecessary
for the execution of the duties.
10.Other systems to ensure that Auditors efficiently conduct auditsA) When the Auditor recognizes it necessary, he or she can consult with the Representative Director and theThis English translation is for reference purposes only. In the event a difference or inconsistency
arises regarding the meaning herein, the original Japanese version shall prevail as the official version.

23

Corporate Governance
CORPORATE GOVERNANCE

Chief Executive Officer and ask the Internal Auditor to investigate specific issues. In addition, the Auditor can
ask the Internal Auditor to cooperate for the audit at any time, as necessary.
B) The Auditors regularly exchange information with the Internal Auditor and the Accounting Auditor, andconduct efficient audits by working closely with them to exchange information and opinions on the status of theinternal control system, assessments of risks, and important audit items, etc.
11.Structure for eliminating Anti-social forcesA) The Group is committed to taking an organizational action without having any relationship to Anti-social
forces which threaten the order and safety of citizens and without accepting unjust demands or transactions fromand with them.
B) For this reason, the Control & Management Unit has established the Anti-Social Forces Countermeasures
Rules as the department responsible for Anti-social forces and has already established a system to collectinformation from relevant administrative agencies, etc., to maintain close contact with them and legal counsels
in the event of the occurrence of such problem, and to deal with such problem in an organized manner.
C) Before starting a transaction with a new customer, we search for newspapers and journal articles using
credit information agencies, etc. based on the "Countermeasures against Anti-social Forces" and conduct athorough preliminary survey in addition to an independent survey via the Internet.

2.Basic approach and a system to exclude Anti-social forces
We recognize that our special stakeholders, shareholders and business partners do not have any relationshipwith Anti-social forces.
For specific systems and measures to eliminate Anti-social forces, based on "Countermeasures against Antisocial Forces", we conduct a pre-transaction survey of a new vendor, subcontractor, supplier, and executive. The
same surveys are conducted once a year for continuing customers. The Basic Transaction Agreement, etc.
includes a termination clause when any relationship with Anti-social Forces is found.
In addition, we participated in the City Center for the Exclusion of Organized Crime Organizations, conduct
awareness-raising activities for employees, and collaborate with external specialized agencies such as police
and legal councils.

V. Others
1.Introduction of anti-takeover measure
Introducing the anti-takeover measure

None

Supplementary explanation

2.Other corporate governance related matters(1) Corporate governance structure
Please refer to the schematic diagram (reference data).
(2) Timely disclosure system
We appoint the Director supervising the IR operations as the manager in charge of timely disclosure.
We will strive to ensure that we will fairly disclose corporate information in a timely and appropriate mannerin compliance with the Financial Instruments and Exchange Act, the Regulations on Listing of Securities, andother relevant laws and regulations.
The Director in charge of timely disclosure will collect information and disclose the information in a timely
manner as long as it is the one that should be disclosed after review in accordance with the procedures.
Please refer to the outline (diagram) of the timely disclosure system below.

Skill Matrix Table
Name

GenderPosition

SkillsDevelopment of
Human resources

Investment
M&A

✓

✓

✓

✓

✓

✓

Management Legal, Compliance Global Finance & IT &Strategy
Risk Control
Accounting DX
Hiroshi
Fukudome
Akira Ito
YutakaYamadamale Representative Director andChief Executive Officer
male Director, Executive Officer andExecutive Vice President
male
Director and Executive Officer, CFO

✓

✓

✓
✓

✓

✓

✓

✓

Financing

ESG
Diversity

Governance✓✓✓This English translation is for reference purposes only. In the event a difference or inconsistency
arises regarding the meaning herein, the original Japanese version shall prevail as the official version.

24

Corporate Governance
CORPORATE GOVERNANCE

Takeshimale
Outside Director, Independent Officer
MatsumotoKayofemaleOutside Director, Independent Officer
Takigawai
TakehikomaleStanding Auditor, Independent Officer
Kubo
Hiroyuki Yaji maleOutside Auditor, Independent Officer✓

Ryuzo Koide male✓Outside Auditor, Independent Officer

✓

✓

✓

✓
✓

✓

✓

✓

✓

✓

✓

✓

✓
✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓
✓
✓

This English translation is for reference purposes only. In the event a difference or inconsistency
arises regarding the meaning herein, the original Japanese version shall prevail as the official version.

25

Corporate Governance
CORPORATE GOVERNANCE[Organization (Reference)]
General Meeting of Shareholders
Appointment/ dismissal

Appointment /dismissal
Audit

Board of Directors
5 Directors
Select/ dismissal/supervision

Nomination
Advisory Committee

Consultation

ReportCompensation
Advisory Committee

ReportReportDirection

Chief Executive Officer
Consultation/ Direction

Board of Auditors
3 Auditors

ReportCollaboration

Internal
Audit

Appointment/ dismissal
Collaboration

ReportCollaboration

Direction

Report Management Committee
Direction

Individual
Divisions

ReportAccounting
Audit

Internal Audit

Accounting
AuditorThis English translation is for reference purposes only. In the event a difference or inconsistency
arises regarding the meaning herein, the original Japanese version shall prevail as the official version.

26

Corporate Governance
CORPORATE GOVERNANCE[Overview of Timely Disclosure System (Diagram)]

End

This English translation is for reference purposes only. In the event a difference or inconsistency
arises regarding the meaning herein, the original Japanese version shall prevail as the official version.

27