Executive variable compensation linked to consolidated ordinary profit or loss

「From 24 June 2026, the Company will introduce the CDP score as an evaluation indicator in addition to the existing performance-linked compensation indicators, from the perspective of strengthening initiatives addressing the environment and climate change.」

「In addition, the Company plans to resolve at the Board of Directors meeting to be held after the Annual General Meeting of Shareholders scheduled for 25 June 2025 to add the CDP score as an indicator of initiatives addressing the environment and climate change.」

「ii. From 24 June 2024 The Company establishes a standard amount for each position level, taking into account the level commensurate with the required capabilities and responsibilities, varies this amount within a certain range according to the Company’s consolidated results, and determines the amount of compensation for each director within the limits approved by the General Meeting of Shareholders. The compensation of directors, excluding outside directors, consists solely of monthly compensation and is entirely performance-linked to provide incentives for the Group’s sustainable growth and enhancement of corporate value. The performance indicators are consolidated profit or loss for the period and consolidated ordinary profit or loss from the perspective of performance incentives, taking into account earnings targets in the management plan, and consolidated return on equity from the perspective of capital efficiency.」

「ii. From 24 June 2022 The Company establishes a standard amount for each position level, taking into account the level commensurate with the required capabilities and responsibilities, varies this amount within a certain range according to the Company’s consolidated results, and determines the monthly compensation for each director within the limits approved by the General Meeting of Shareholders. Directors’ compensation consists solely of monthly compensation and is entirely performance-linked to provide incentives for the Group’s sustainable growth and enhancement of corporate value. The performance indicators are consolidated profit or loss for the period and consolidated ordinary profit or loss, from the perspective of short- and medium- to long-term performance incentives, including earnings targets in the medium-term management plan. For the purpose of setting an appropriate compensation amount based on performance during the period, consolidated profit or loss for the period is adjusted to exclude gains and losses from business reorganization attributable to measures such as production-equipment restructuring.」

「The Company’s performance-linked compensation is short-term performance-linked compensation reflecting consolidated results for a single fiscal year. The annual cash compensation determined by the Board of Directors varies, in principle, within a range of approximately 0% to 20% of fixed compensation according to the previous fiscal year’s consolidated ordinary profit or loss.」

「The compensation consists of variable compensation that fluctuates within a certain range according to the previous fiscal year’s consolidated ordinary profit or loss, an indicator of the Group’s earnings power. The amount of compensation for each director is determined within the limits approved by the General Meeting of Shareholders.」