Reviewing the Rationale for and Reducing Cross-Shareholdings

「The shares had been held with the intention of maintaining a stable business relationship, but were sold in February 2026.」

「The shares had been held with the intention of maintaining stable business relationships, as the companies were major customers for LNG and equipment construction, but were sold in December 2023.」

「The Board of Directors annually conducts a detailed, individual review of the listed shares and other securities it holds, hereinafter referred to as policy-held shares, examining whether the purpose of holding each is appropriate and whether the benefits and risks associated with holding it are commensurate with the cost of capital, among other factors, to verify whether continued ownership is appropriate. Shares for which ownership is no longer considered rational will be sold to reduce the holdings. During the current consolidated fiscal year, at a meeting of the Company's Board of Directors held on 23 May 2019, all shares held by the Group at the end of the previous consolidated fiscal year were reviewed under the agenda item "Policy-held shares of the TOKAI Group" based on (1) reconfirmation of the purpose of holding, (2) the status of fair-value differences and (3) economic rationality, namely a comparison of the benefits of holding the shares with the cost of capital. As a result, 7 newly listed shares were designated for sale. The sale of all 7 shares was completed during the current consolidated fiscal year.」