Enhancing Governance Centered on the Audit and Supervisory Committee and Outside Directors

「From the close of the Annual General Meeting of Shareholders held on 26 June 2025, the Board of Directors meeting immediately following that meeting, and the Board of Corporate Auditors meeting immediately following that meeting」

「If this proposal is approved, the Company will change from a Company with an Audit and Supervisory Committee to a Company with a Board of Corporate Auditors. To strengthen and enhance the Company's governance structure, the Company will change its corporate governance structure with the aim of concentrating the authority and responsibility for business execution in the Board of Directors, the Company's decision-making body, and having the Corporate Auditors and Board of Corporate Auditors, independent non-executive bodies, perform the audit function for the Board of Directors, thereby strengthening checks and balances and enabling faster and more flexible decisions and execution of management strategy.」

「As of the filing date of this Annual Securities Report (27 June 2024), the Company's Board of Directors comprised 2 directors who were not Audit and Supervisory Committee members (both men) and 4 directors who were Audit and Supervisory Committee members (all 4 men). Of these, 3 were outside directors, including 3 of the directors who were Audit and Supervisory Committee members. The Company expects the Board's oversight and supervisory functions to be strengthened by having outside directors account for 50% of the Board.」

「As of the filing date of this Annual Securities Report (28 June 2022), the Company's Board of Directors comprised 3 directors who were not Audit and Supervisory Committee members (all 3 men) and 4 directors who were Audit and Supervisory Committee members (3 men and 1 woman). Of these, 4 were outside directors, and all directors who were Audit and Supervisory Committee members were outside directors. The Company expects the Board's oversight and supervisory functions to be strengthened by having outside directors account for 57% of the Board.」

「As of the filing date of this Annual Securities Report (25 June 2021), the Company's Board of Directors comprised 6 directors who were not Audit and Supervisory Committee members (5 men and 1 woman) and 4 directors who were Audit and Supervisory Committee members (3 men and 1 woman). Of these, 7 were outside directors, and all directors who were Audit and Supervisory Committee members were outside directors. The Company expects the Board's oversight and supervisory functions to be strengthened by having outside directors account for 70% of the Board.」

「The Company established the committee pursuant to a resolution of its Board of Directors held on 25 February 2020 as an optional advisory body to the Board of Directors, with the aim of enhancing the objectivity and transparency of the process for decisions on matters such as the appointment of management personnel who play an important role in achieving sustainable growth and enhancing corporate value over the medium to long term, and further improving and strengthening the corporate governance structure. The Company expects the Board of Directors' oversight and supervisory functions to be strengthened by having outside directors account for 70% of the Board.」

「Under the Companies Act, the Company has adopted the structure of a Company with an Audit and Supervisory Committee, established a system in which independent outside directors play a central role, and made the Board of Directors' oversight of business execution effective.」

「The Company is reviewing its corporate governance structure and seeking to enhance its governance functions by transitioning to a Company with a Board of Corporate Auditors, while」

「In its Basic Policy on Corporate Governance formulated in December 2017, the Company clearly stated its commitment to actively strengthening compliance and risk management. By having outside directors account for 50% of the Board of Directors, the Company has strengthened the Board's oversight function.」

「The group believes that strengthening corporate governance will enhance corporate value over the long term and on a stable basis. It regards thorough compliance with laws and regulations and corporate ethics, greater management transparency, and the development and operation of an organizational structure capable of responding swiftly and appropriately to changes in the business environment as its highest management priorities, with the aim of increasing stakeholder trust and achieving sound corporate management.」