Basic Approach and Corporate Governance System

• Basic Approach to Corporate Governance
• Corporate Governance Principles
• Proper Information Disclosure and Dialog with Shareholders
• Corporate Governance Guidelines

Basic Approach to Corporate Governance

Corporate Governance Principles

We have established the following corporate governance principles, which reflect the principles of Japan’s Corporate Governance Code.

1. We protect the rights and ensure the equitable treatment of all shareholders. We strive to create a climate in which all shareholders can duly exercise their rights.
2. We recognize that our sustainable growth and mid-to-long-term value depend on us engaging and cooperating with stakeholders, including our shareholders, employees, customers, trading partners, creditors, and the local communities we serve. We foster a corporate culture that respects stakeholder rights and emphasizes sound business relationships with them.
3. We disclose financial and non-financial information when required to do so by law. Even when disclosure is not mandated, we voluntarily disclose any information that could affect the investment decisions of shareholders or other investors.
4. We understand that members of the Board of Directors are accountable to shareholders. To promote sustainable growth and enhance mid-to-long term corporate value, the board provides effective oversight of the management, ensuring that the management takes reasonable risks and that it contributes to the company’s profitability.
5. To promote sustainable growth and enhance mid-to-long term corporate value, we actively engage in constructive dialogue with shareholders and other stakeholders. To earn stakeholders’ support and confidence, members of the Board of Directors actively listen to stakeholders and relay their feedback to the management, while ensuring that our corporate strategy is clear and transparent to stakeholders.

Proper Information Disclosure and Dialog with Shareholders

1. The Company announces the "Policies for the Establishment/Improvement of and Initiatives for the System to Promote Constructive Dialog with Shareholders" approved by the Board of Directors.
2. The department in charge of IR ensures information control to prevent the leakage of unannounced important insider information outside the Company through dialog according to the regulations for the control of insider information and the prevention of insider trading.
3. To promote sustainable growth and enhance the corporate value in the medium and long term, the Company sets and publishes medium- and long-term goals for capital efficiency, etc. after accurately grasping the capital cost when the Company formulates management strategies and management plans and works to achieve the goals and explains its efforts to that end to shareholders and others.
4. From the perspective of sustainable growth and enhancement of corporate value in the medium and long term, the Company has set up its basic policy to carry out appropriate business portfolio management in order to optimize the business portfolio and create synergies.

Corporate Governance Guidelines

A guideline describing the framework of corporate governance.