Changes to the Management Structure and Specific Measures to Prevent Recurrence

「Directors Nishimura Hiroshi (西村浩) and Morimoto Koji (森本耕司) left office by resignation effective 17 September 2024.」

「During the fiscal year under review, the company held 14 meetings of the Compliance Committee. Every member attended all 14 meetings held, for an attendance rate of 100%, and participated in deliberations.」

「Our shares had been designated by the Tokyo Stock Exchange as Securities on Special Alert since April 2022. As we implemented the improvement measures to prevent recurrence as scheduled and proceeded with efforts to improve the internal management system and other areas, the designation was lifted effective 20 May 2023 because no issues were found in our internal management system or other areas. Going forward, all officers and employees will continue to work together to implement and assess the improvement plan and continue efforts to make further improvements and strengthen our compliance and internal management systems. We plan to publish the status of the continued implementation of the improvement plan approximately one year after the designation is lifted.」

「To address identified issues in the internal management system, we implemented as planned the “improvement measures to prevent recurrence” described in the improvement plan and report on improvement status attached to the notice dated 16 March 2022, “(Progress of Disclosure Matters) Notice Concerning Measures to Prevent Recurrence,” issued before the designation as a Security on Special Alert, and to the improvement plan and report on improvement status attached to the notice dated 20 May 2022, “Notice Concerning the Announcement of the Improvement Plan and Report on Improvement Status,” issued following that designation. Believing that our efforts to improve the internal management system have achieved a certain level of results, we submitted an Internal Management System Confirmation Report to the Tokyo Stock Exchange on 3 April 2023.」

「In accordance with the improvement plan, we revised various internal policies and rules and proceeded with reviewing business processes to ensure compliance with those policies. We have already entered the operational stage under the new system. In addition, we are steadily strengthening the internal management system by conducting compliance training once a month to raise compliance awareness among all officers and employees. As of now, no items are behind schedule relative to the completion dates initially set for individual actions in the improvement plan.」

「As announced in the notice dated 20 May 2022, titled “Notice Concerning the Announcement of the Improvement Plan and Report on Improvement Status,” we compiled an improvement plan to fundamentally address issues in the internal management system and strengthen corporate governance. In addition, based on that improvement plan, we newly established the Compliance Committee, as announced in the notice dated 15 June 2022, titled “Notice Concerning the Establishment of the Compliance Committee.” The committee monitors, from an independent perspective, important decisions and other matters resolved by the Board of Directors, as well as the progress and effectiveness of measures to prevent recurrence.」

「As announced in the notice dated 16 March 2022, titled “(Progress of Disclosure Matters) Notice Concerning Measures to Prevent Recurrence,” we announced measures to prevent recurrence. We will further develop and strengthen our governance and internal management systems based on those measures, and all officers and employees will work together to restore trust so that the designation can be lifted.」

「Based on the recommendations in the investigation report, we intend to promptly consider and implement measures to prevent recurrence.」

「Going forward, we plan to formulate measures to prevent recurrence in line with the recommendations of the Special Investigation Committee. We believe it is important to implement these measures steadily, make a sincere effort to further develop and strengthen appropriate internal controls, and enhance the internal management system and corporate governance.」

「As of the filing date, the Board of Directors consists of 5 directors, including 3 outside directors. It decides basic management policies, matters prescribed by law and other important management matters, and supervises the execution of the directors' duties.」

「As a result of the resolution at the Annual General Meeting of Shareholders held on 29 November 2016 to amend the Articles of Incorporation to provide for the transition to a company with an Audit & Supervisory Committee, we transitioned from a company with a Board of Corporate Auditors to a company with an Audit & Supervisory Committee on that date.」

「Following the change in the management structure approved at the 5th Annual General Meeting of Shareholders held on 5 January 2016, we formulated specific measures to prevent recurrence of the issue on 29 January 2016 and announced our initiatives concerning the Corporate Governance Code on 17 February 2016. We are promoting all of our businesses under a stringent governance framework.」