Amvis : Corporate Governance Report（December 28, 2023）

Corporate Governance Report (Unofficial Translation)

Last update: December 28, 2023 Company name: Amvis Holdings, Inc.

Securities Code: 7071

Representative: Keiichi Shibahara, Representative Director and CEO https://www.amvis.com/en/

The corporate governance of Amvis Holdings, Inc. (the "Company") is described below.

I. Basic Views on Corporate Governance, Capital Structure, Corporate Profile and Other Basic Information

1. Basic Views

In line with the vision to "become the world's most exciting medical and healthcare company," based on the mission to "create a vibrant, happy society through medical and health care with an ambitious vision," the Company and its consolidated subsidiaries (the "Group") aim to contribute to its sustainable growth and development and the happiness of society as a whole through honest and fair business activities. The Group also places value on the interests and trust of all its stakeholders, including shareholders, investors, service users, medical institutions, government agencies, local communities and residents, employees, and business partners. In order to achieve this, the Group believes that it is necessary to emphasize the rights of its shareholders and to live up to society's trust, and it considers establishing and strengthening corporate governance to be its most important management issue.

[Reasons for not Implementing Each Principle of the Corporate Governance Code]

[Subject Code]

The contents are based on the Corporate Governance Code revised in June 2021.

[Supplementary Principle 2-4-1]

(1) Views of ensuring diversity

In order to maximize the power of the organization, the Group respects and accepts individuals with diverse backgrounds. It is committed to create an organization and develop human resources that enable diverse individuals to maximize their abilities, and to provide equal opportunities for compensation, education, and promotion regardless of gender, nationality, or disability.

(2) Voluntary and Measurable Goals for Ensuring Diversity

The Group's policy is to actively recruit and promote capable people regardless of gender, nationality, etc., and to provide equal evaluations and opportunities to all employees, so it has not set any numerical targets.

(3) Status of ensuring diversity

At present, the Group has a lot of track records of appointing female and mid-career hires to management positions. On the other hand, due to the fact that the Group's business domain is limited to Japan, there is no track record of appointing overseas nationals to management positions at this time. The ratio of female in management positions is disclosed in the full-year financial highlights, and the Group will consider disclosing other actual figures.

(4) Human resource development policies, internal environmental improvement policies, and their status

In order to achieve diversity and inclusion, the Group is committed to providing a comfortable workplace for individuals of all backgrounds.

[Supplementary Principle 3-1-3]

As the Company is engaged in the hospice business, it does not make any disclosures based on TCFD because we currently expect climate change issues to have immaterial impact on its business. However, the Company regards that addressing climate change issues is important for developing the economy and for maintaining and improving the standard of living in Japan. Therefore, the Company is taking various initiatives such as strict energy-saving and promotion of paperless operations by digitizing documents, and reduction of food waste.

[Supplementary Principle 4-1-3]

The Company considers the succession of the CEO and other officers to be an important issue in the long term, and although it has not formulated a succession plan at this time, it will make a comprehensive judgment and appoint a successor based on the criteria that the successor is a suitable person who can fulfill his/her duties and responsibilities, taking into consideration his/her personality, knowledge, achievements, and abilities.

[Disclosure Based on the Principles of the Corporate Governance Code]

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Corporate Governance Report (Unofficial Translation)

[Principle1-4]

In principle, the Company does not engage in cross-shareholdings. The Board of Directors will make a comprehensive decision on whether it is necessary to engage in cross-shareholding only when it is judged to contribute to the enhancement of the Company's corporate value over the medium to long term.

[Principle 1-7]

The Company has established the rules for the related-party transactions management, which stipulate that any new transaction with a related party must be approved in advance by the Board of Directors after fully considering the rationality (business necessity) of the transaction and the appropriateness of its terms and conditions, based on the opinions of independent officers and Audit & Supervisory Board members. The Company monitors such transactions. Furthermore, for transactions that are still ongoing as of the end of each fiscal year, the reasonableness and appropriateness of such transactions shall be reported to the Board of Directors.

[Principle 2-6]

The Company does not have a corporate pension fund system.

[Principle 3-1]

1. The management philosophy, management strategies, and medium-term management plans are disclosed on the Company's website and in the financial highlights.
2. The basic views and basic policy of corporate governance are disclosed on the Company's website, in this report and in the Annual Securities Report.
3. The policies and procedures for determining the compensation for senior management and directors by the Board of Directors are disclosed in this report and in the Annual Securities Report.
4. The nomination of candidates for directors and Audit & Supervisory Board members of the Company shall be decided by the Board of Directors after deliberation by the Nomination and Compensation Committee, and shall be conducted through fair and highly transparent procedures. In nominating candidates, the Company selects those who are considered to contribute to the enhancement of the Company's corporate value from various perspectives, such as possessing the basic qualities, competencies, experience, and achievements required of directors and Audit & Supervisory Board members, and having excellent personal insight. With respect to the dismissal of the directors and Audit & Supervisory Board members, the Company will decide on a proposal for their dismissal or non-reappointment and submit the proposal to the General Meeting of Shareholders as necessary, such as when there is an obstacle to the execution of their duties.
5. When nominating candidates for directors and Audit & Supervisory Board members, the reasons for each individual appointment and nomination are stated in the notice of the General Meeting of Shareholders (reference documents), and the notice of the General Meeting of Shareholders is disclosed on the website.

[Supplementary Principle 3-1-3]

(1) Initiatives on sustainability

Details of our sustainability philosophy, policies, and initiatives are disclosed on our website. Website: https://www.amvis.com/en/sustainability/

(2) Investment in human capital and intellectual capital

In addition to human resource development through education and training, the Company is actively working to create an environment where employees can fully demonstrate their abilities, and to support various work styles such as remote working and flextime systems. Due to the nature of its business, it does not invest much in intellectual capital such as patents, but it does so to the extent necessary for its business.

(3) Disclosure based on TCFD

As the Company is engaged in the hospice business, it does not make any disclosures based on TCFD because we currently expect climate change issues to have immaterial impact on its business. However, the Company regards that addressing climate change issues is important for developing the economy and for maintaining and improving the standard of living in Japan. Therefore, the Company is taking various initiatives such as strict energy-saving and promotion of paperless operations by digitizing documents, and reduction of food waste.

[Supplementary Principle 4-1-1]

By appointing outside directors who do not engage in business execution to the Board of Directors, the Company aims to separate business execution from supervision, and by having Audit & Supervisory Board members attend the

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meetings, the Company enhances the supervisory function of overall management and ensures fairness and transparency in management.

The Board of Directors shall make decisions on important business operations in accordance with laws and regulations, the rules of the Board of Directors, the rules for authority, and the rules for approval. In addition, for the purpose of making prompt and decisive decisions on business operations and decisions other than those to be made by the Board of Directors, the authority shall be transferred to the Management Meeting or the representative director and other members of the management team in accordance with the above-mentioned rules, and the Board of Directors shall supervise the status of business operations by receiving reports from each director in a timely manner.

[Principle 4-9]

In selecting candidates for outside directors, the Company places importance on their high level of expertise and knowledge and experience in various businesses, etc., which enable them to advise and supervise the Company's management from a neutral and objective perspective, in addition to the requirements for independence stipulated in the Companies Act and required by the Tokyo Stock Exchange. The requirements for a candidate are that the candidate be an officer of a listed company in an industry different from that of the Company or have equivalent knowledge and experience.

[Supplementary Principle 4-10-1]

The Nomination and Compensation Committee, as an advisory body to the Board of Directors, deliberates on matters related to the selection, dismissal, and compensation for directors, and reports to the Board of Directors. It deliberates on compensation and other matters, in accordance with the rules for compensation for officers, but may recommend changes to such rules and submit a report to the Board of Directors in accordance with such recommendations. The Nomination and Compensation Committee consists of three outside directors (members: Nobutaka Ushigome, Tsuyoshi Yamada and Norie Honda) and one inside director (chairperson: Keiichi Shibahara), who are appointed by resolution of the Board of Directors, and one outside Audit & Supervisory Board member (Ryoji Arai) attends for monitoring purposes.

[Supplementary Principle 4-11-1]

The Company believes that the Board of Directors must be composed of personnel with diverse knowledge and experience and advanced abilities in order to supervise business execution and make important decisions, and it appoints directors in consideration of the balance and diversity of knowledge, experience and abilities.

The directors consist of five members, including three independent outside directors who are officers of listed companies in industries different from that of the Company or have equivalent knowledge and experience. In addition, the three Audit & Supervisory Board members consist of three independent outside Audit & Supervisory Board members with expertise.

These members utilize their respective knowledge, experience, and abilities to make multifaceted decisions and supervise the execution of business.

The expertise, etc. (skill matrix) of directors and Audit & Supervisory Board members is disclosed in the Annual Securities Report and the notice of the General Meeting of Shareholders (reference documents).

[Supplementary Principle 4-11-2]

The Company requires outside officers to ensure that they have the time and effort to properly carry out their responsibilities as officers of the Company, and appoints only those candidates who are deemed capable of fulfilling their responsibilities. The status of concurrent positions held by outside officers is disclosed in the Annual Securities Report and other documents.

[Supplementary Principle 4-11-3]

The Company has introduced a system whereby all directors analyze and evaluate the composition and operation of the Board of Directors every year, and a summary of the analysis and evaluation of the effectiveness of the Board of Directors is as follows.

・Composition of the Board of Directors

The number of directors (five directors) is appropriate for active discussions and prompt decision-making, and the Board of Directors is composed of directors who have experience and knowledge of various businesses, a high level of expertise and insight, and a neutral and objective viewpoint.

・Operation of the Board of Directors

The attendance rate of directors (including outside directors) at the Board of Directors meetings is approximately 100%, and decisions are made through appropriate discussions. In addition, appropriate decision-making and

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supervision are carried out by invigorating discussions at the Board of Directors meetings through questions and opinions of outside directors, and by presenting opinions from various perspectives from outside directors.

・Materials and information provided

The Company provides directors with necessary and sufficient materials and information to consider the contents of proposals.

[Supplementary Principle 4-14-2]

The Company provides the following support to directors and Audit & Supervisory Board members to enable them to fulfill their roles and responsibilities.

・The Company provides necessary and important information, such as economic conditions, industry trends, and insurance systems, in a timely and appropriate manner.

・The Company provides opportunities to participate in seminars held by the Japan Audit & Supervisory Board Members Association, financial institutions, etc., as appropriate, and encourages them to acquire necessary knowledge, self-development, and study.

・At the time of appointment, explanations are given by the officer in charge or the department in charge regarding necessary knowledge and information such as the Company's corporate philosophy, medium-term management plans and financial conditions.

[Principle 5-1]

In order to realize constructive dialogue with shareholders and investors, the Finance Department is in charge of IR, and senior management meets with shareholders and investors as necessary to explain capital policies, medium-term management plans, and other matters to shareholders and investors in a clear and easy-to-understand manner.

In order to ensure rational and smooth dialogue with shareholders and investors, each department works together and assists the director in charge.

For analysts and institutional investors, the Company participates in conferences. In addition, the Company holds about 100 individual meetings each quarter and overseas investors account for more than half of these individual meetings.

In addition to individual dialogues with shareholders and institutional investors, the Company holds briefings on its medium-term management plans and quarterly financial results, corporate briefings, and briefings for individual investors. In addition, the Company discloses explanatory materials for management plans and financial results briefings, etc. on its website.

The results of the dialogue with shareholders and investors are reported to the management team by the director in charge or the head of the department at the management meeting as appropriate, and are appropriately reflected in the business management, leading to the sustainable growth of the Group and the enhancement of corporate value over the medium to long term. The Company continues to strengthen dialogue with shareholders and investors.

As measures for insider information management, the Company strives to disclose information fairly, promptly and in a timely manner, while considering insider information management in accordance with its disclosure policy. When meeting with shareholders and investors, it provides information only after confirming that the information to be provided does not fall under the category of insider information. The three weeks prior to the announcement of quarterly financial results are designated as a "silent period" during which the Company refrains from discussing financial information.

The disclosure policy is available on the website.

【Action to implement management that is conscious of cost of capital and stock price】 (Analysis of current situation)

For the fiscal year ended September 30, 2023, all key indicators exceeded the initial forecast in the medium-term management plans, "Amvis 2025", which was released in November 2022. As a result, the Company maintained high return on equity of 26.9% and high market valuation with the price earnings ratio of 40.3x.

(Planning and disclosure)

(a) Assessment of current status

The Company has maintained a high return on equity and the price earnings ratio since listing, and it believes that it has been highly evaluated by the stock market.

(b) Policies and Objectives

The Company monitors changes in EBITDA and other performance indicators to achieve CAGR of 25% or more from the fiscal year ended September 2022 to the fiscal year ending September 2025. Over the medium to long term, the Company will focus on total shareholder return and plan to provide a stable yield, regardless of changes in growth stage.

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(c) Action and Implementation Period

At the Ordinary General Meeting of Shareholders held on December 2023, the Company resolved to introduce restricted share compensation for the purpose of providing incentives for directors to continuously enhance the corporate value and to further promote value sharing with shareholders. Furthermore, the Company has introduced a new performance-linked compensation that based on EBITDA as an indicator.

2. Capital Structure

		Percentage of Overseas Shareholders	From 20% to less than 30%
[Major Shareholders]
		Name			Number of Shares			Shareholding
				Held (shares)			Ratio (%)
	IDEA Capital		51,662,000	52.70
	Keiichi Shibahara		7,862,000	8.02
	SSBTC CLIENT OMNIBUS ACCOUNT		6,896,357	7.03
	Custody Bank of Japan, Ltd. (Trust Account)		4,500,000	4.59
	The Master Trust Bank of Japan, Ltd. (Trust Account)		3,543,300	3.61
	NORTHERN TRUST CO. (AVFC) RE IEDU UCITS CLIENTS NON		1,840,000	1.88
	LENDING 15 PCT TREATY ACCOUNT
	Tetsuya Nakagawa		796,000	0.81
	STATE STREET BANK AND TRUST COMPANY 505223		737,828	0.75
	Sumitomo Life Insurance Company		619,600	0.63
	MORGAN STANLEY & CO. LLC		542,348	0.55
		Controlling Shareholder (excluding Parent Company)	IDEA Capital
		Parent Company	―

Supplementary Explanation

1. Capital Structure and Major Shareholders are as of September 30, 2023.
2. IDEA Capital was established for the purpose of managing the assets of Keiichi Shibahara, representative director and CEO of the Company, and he owns all of its shares.
3. Although Capital Research and Management Company reported that it held 6,658,851 shares as of May 15, 2023 in a large shareholding report (change report) made available for public inspection on May 22, 2023, the Company is unable to confirm the number of shares actually held as of the end of the current fiscal year. Therefore, Capital Research and Management Company is not included in the above major shareholders.
   The contents of the large shareholding report (change report) are as follows.

	Name:	Capital Research and Management Company
	Address:	333 South Hope Street, Los Angeles, CA 90071, U.S.A
	Number of shares held:	6,658,851 shares
	Shareholding ratio:	6.80 %
3. Corporate Attributes
		Listed Stock Markets and Market Sections		Tokyo Stock Exchange Prime
		Fiscal-Year End			September 30
		Type of Business			Service
		Number of Employees (consolidated) as of		More than 1,000
		the End of Previous Fiscal Year
		Net Sales (consolidated) of Previous Fiscal Year		From 10 billion yen to less than 100 billion yen

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Corporate Governance Report (Unofficial Translation)

Number of Consolidated Subsidiaries as of the End of thePrevious Fiscal Year

Less than 10

4. Policy on Measures to Protect Minority Shareholders in Conducting Transactions with Controlling Shareholders

In the case of transactions with the controlling shareholder, the Board of Directors decides on the transaction after sufficient consideration of the rationality and necessity of the transaction and the appropriateness of the transaction conditions.

In order to enhance fairness and transparency of corporate governance and achieve the sustainable growth of the Group and the enhancement of corporate value over the medium to long term, the Company appoints at majority of the Board of Directors members as independent outside directors. The Special Committee has a basic policy of ensuring that transactions occurring with the Company's controlling shareholder are subject to the same appropriate terms and conditions as general transactions and deliberates as necessary to ensure the fairness and reasonableness of the content and appropriateness of the terms and conditions of transactions, and to protect the interests of the minority shareholders. The special committee consists of three outside directors and three outside Audit & Supervisory Board members, and the committee members select the chairperson.

5. Other Special Circumstances Which May Have Material Impact on Corporate Governance Not applicable.

1. Business Management Organization and Other Corporate Governance Systems regarding Decision-making, Execution of Business, and Oversight in Management
   1. Organizational Composition and Operation

		Organization Form		Company with Audit & Supervisory Board
[Matters Related to Directors]
		Maximum Number of Directors Stipulated in Articles of		Ten
		Incorporation
		Term of Office Stipulated in Articles of Incorporation		One year
		Chairperson of Board of Directors		President
		Number of Directors		Five
		Appointment of Outside Directors		Appointed
		Number of Outside Directors		Three
		Number of Outside Directors that are Independent Officers		Three

Outside Directors' Relationship with the Company (1)

Name

Attribute

Relationship with the Company (*)

a

b

c

d

e

f

g

h

i

j

k

Nobutaka Ushigome

From another company

Tsuyoshi Yamada

From another company

Norie Honda

From another company

*Categories for "Relationship with the Company"

*1 when the director presently falls or has recently fallen under the category *2 when the director fell under the category in the past

*3 when a close relative of the director presently falls or has recently fallen under the category *4 when a close relative of the director fell under the category in the past

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Corporate Governance Report (Unofficial Translation)

a. Executive of the Company or its subsidiaries

b. Non-executive director or executive of a parent company of the Company c. Executive of a fellow subsidiary company of the Company

d. A party whose major client or supplier is the Company or an executive thereof e. Major client or supplier of the Company or an executive thereof

f. Consultant, accountant or legal professional who receives a large amount of monetary consideration or other property from the Company besides compensation as an officer

g. Major shareholder of the Company (or an executive of the said major shareholder if the shareholder is a legal entity) h. Executive of a client or supplier company of the Company (which does not correspond to any of d, e, or f) (the

executive himself/herself only)

i. Executive of a company, between which and the Company outside officers are mutually appointed (the executive himself/herself only)

j. Executive of a company or organization that receives a donation from the Company (the executive himself/herself only) k. Others

Outside Directors' Relationship with the Company (2)

	Name			Independent			Supplementary Explanation			Reason for appointment
			Officer
										As a representative director of a company listed on the
										Standard market of the Tokyo Stock Exchange, he has
										a wealth of experience and broad insight, and the
										Company believes that he is qualified to serve as an
										outside director of the Company.
Nobutaka		✓		―		In addition, the Company has determined that there is
Ushigome				no risk of conflict of interest with general shareholders
										in the execution of duties as an outside officer, and
										has designated him as an independent officer in
										accordance with the requirements of the Tokyo Stock
										Exchange, Inc. and has notified the Tokyo Stock
										Exchange, Inc. of such designation.
										As a director and CTO and one of the founders of a
										company listed on the Prime market of the Tokyo
										Stock Exchange, he has a wealth of experience and
										deep insight in all aspects of corporate management,
										as well as experience in the management of IT
										companies, and the Company believes that he is
Tsuyoshi								qualified to serve as an outside director of	the
	✓		―		Company.
Yamada
							In addition, the Company has determined that there is
										no risk of conflict of interest with general shareholders
										in the execution of duties as an outside officer, and
										has designated him as an independent officer in
										accordance with the requirements of the Tokyo Stock
										Exchange, Inc. and has notified the Tokyo Stock
										Exchange, Inc. of such designation.
										She played an active role at the Ministry of Health,
										Labour and Welfare and has expert knowledge and
										personal connections which is required by the Group,
										which aims to play a part in the functions to be
Norie								performed by the national government, and	the
	✓		―		Company believes that she is qualified to serve as an
Honda
							outside director of the Company.
										In addition, the Company has determined that there is
										no risk of conflict of interest with general shareholders
										in the execution of duties as an outside officer, and
										has designated her as an independent officer	in

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Corporate Governance Report (Unofficial Translation)

accordance with the requirements of the Tokyo Stock Exchange, Inc. and has notified the Tokyo Stock Exchange, Inc. of such designation.

[Voluntary Committees]

Voluntary Establishment of Committee(s) Corresponding to Nomination Committee or Compensation Committee

Established

Name

All

Full-time

Inside

Outside

External

Others

Chair-

Members

Members

Directors

Directors

Experts

person

Committee

Nomination

Corresponding

to

and

4

―

1

3

―

―

Inside

Nomination

Compensation

Director

Committee

Committee

Committee

Nomination

Corresponding

to

and

4

―

1

3

―

―

Inside

Compensation

Compensation

Director

Committee

Committee

Supplementary Explanation

The Company has established the Nomination and Compensation Committee as a voluntary advisory committee consisting of one representative director and three outside directors, with at least one Audit & Supervisory Board member, to enhance objectivity and transparency by fully discussing particularly important matters such as the nomination and compensation for officers.

[Matters Related to Audit & Supervisory Board Members]

	Establishment of Audit & Supervisory Board		Established
	Maximum Number of Audit & Supervisory Board Members		Five
	Stipulated in Articles of Incorporation
	Number of Audit & Supervisory Board Members		Three

Cooperation among Audit & Supervisory Board Members, Accounting Auditor, and Internal Audit Office

The Company's Audit & Supervisory Board members, accounting auditor, and Internal Audit Office actively exchange information by holding regular liaison meetings to maintain close cooperation, and to enhance the effectiveness and efficiency of audits at each and every level.

In addition to discussing audit plans and results at the regular three-way audit meetings, they also attend actual inspections of the Company and its subsidiaries.

The Audit & Supervisory Board members and the Internal Audit Office share information on a daily basis, confirm the status of the development and operation of internal controls, and work together to propose improvements as necessary.

	Appointment of Outside Audit & Supervisory Board Members		Appointed
	Number of Outside Audit & Supervisory Board Members		Three
	Number of Outside Audit & Supervisory Board Members that are		Three
	Independent Officers

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Outside Audit & Supervisory Board Members' Relationship with the Company (1)

Name

Attribute

Relationship with the Company (*)

a

b

c

d

e

f

g

h

i

j

k

l

m

Ryoji Arai

From another company

Shinkichi Matsuo

Certified public accountant /

certified tax accountant

Takahiro Sugawara

From another company

*Categories for "Relationship with the Company"

*1 when the Audit & Supervisory Board member presently falls or has recently fallen under the category *2 when the Audit & Supervisory Board member fell under the category in the past

*3 when a close relative of the Audit & Supervisory Board member presently falls or has recently fallen under the category

*4 when a close relative of the Audit & Supervisory Board member fell under the category in the past a. Executive of the Company or its subsidiaries

b. Non-executive director or accounting advisor of the Company or its subsidiaries c. Non-executive director or executive of a parent company of the Company

d. Audit & Supervisory Board member of a parent company of the Company e. Executive of a fellow subsidiary company of the Company

f. A party whose major client or supplier is the Company or an executive thereof g. Major client or supplier of the Company or an executive thereof

h. Consultant, accountant or legal professional who receives a large amount of monetary consideration or other property from the Company besides compensation as an officer

i. Major shareholder of the Company (or an executive of the said major shareholder if the shareholder is a legal entity)

j. Executive of a client or supplier company of the Company (which does not correspond to any of f, g, or h) (the executive himself/herself only)

k. Executive of a company, between which and the Company outside officers are mutually appointed (the executive himself/herself only)

l. Executive of a company or organization that receives a donation from the Company (the executive himself/herself only) m. Others

Outside Audit & Supervisory Board Members' Relationship with the Company (2)

	Name			Independent			Supplementary Explanation			Reason for appointment
			Officer
										He has been in the financial industry for a
										long time and has a wealth of experience and
										broad insight in the field of finance, and the
										Company believes that he is qualified to
										serve as an outside Audit & Supervisory
										Board member of the Company.
										In addition, the Company has determined
										that there is no risk of conflict of interest with
										general shareholders in the execution of
										duties as an outside officer, and has
Ryoji Arai		✓		―		designated him as an independent officer in
										accordance with the requirements of the
										Tokyo Stock Exchange, Inc. and has notified
										the Tokyo Stock Exchange, Inc. of such
										designation.
										Although he holds 46 stock acquisition rights
										(73,600 shares), the importance of these
										rights to the total number of shares issued is
										small, and the Company believes that it will
										not affect his performance of duties as a
										Audit & Supervisory Board member.

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Corporate Governance Report (Unofficial Translation)

					He has a wealth of experience and broad
					insight in the field of accounting, and the
					Company believes that he is qualified to
					serve as an outside Audit & Supervisory
					Board member of the Company.
					In addition, the Company has determined
	Shinkichi	✓	―		that there is no risk of conflict of interest with
	Matsuo		general shareholders in the execution of
					duties as an outside officer, and has
					designated him as an independent officer in
					accordance with the requirements of the
					Tokyo Stock Exchange, Inc. and has notified
					the Tokyo Stock Exchange, Inc. of such
					designation.
					As a representative director and a founder of
					a company in the digital risk market listed on
					the Growth market of the Tokyo Stock
					Exchange, he has a wealth of experience
					and broad insight, and the Company believes
					that he is qualified to serve as an outside
					Audit & Supervisory Board member of the
	Takahiro				Company.
	✓	―		In addition, the Company has determined
	Sugawara
				that there is no risk of conflict of interest with
					general shareholders in the execution of
					duties as an outside officer, and has
					designated him as an independent officer in
					accordance with the requirements of the
					Tokyo Stock Exchange, Inc. and has notified
					the Tokyo Stock Exchange, Inc. of such
					designation.
[Matters Related to Independent Officers]
	Number of Independent Officers	Six

Other Matters Related to Independent Directors

The Company has designated all outside officers who fulfill independent officer requirements as independent officers.

[Matters Related to Incentives]

	Introduction of performance-linked
Incentive Policies for Directors	compensation, stock acquisition rights and
	others

Supplementary Explanation

The Company has introduced an incentive plan as an investment system linked to the medium- to long-term business performance and shareholder value of the Group, with the aim of increasing the motivation and morale of directors and employees to enhance corporate value.

In addition to the performance-linked compensation and stock acquisition rights, the Company has introduced restricted share compensation.

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