Introducing a Performance-Linked Share-Based Compensation Plan

「The metrics for evaluating performance and other targets are consolidated ROIC, net income attributable to owners of the parent, relative TSR and non-financial metrics, including GHG emissions reduction and employee engagement, with the aim of achieving the targets of the medium-term management plan and further encouraging directors and others to contribute to the Group's medium- to long-term performance and enhancement of corporate value.」

「At a meeting of the Board of Directors held on 21 May 2025, the Company resolved to continue, with partial revisions, the performance-linked share-based compensation system introduced in fiscal 2018, and the proposal concerning the system was approved as proposed at the Annual General Meeting of Shareholders held on 27 June 2025. The performance-linked share-based compensation system continuing with partial revisions covers the 3 fiscal years from the fiscal year ending March 2026 through the fiscal year ending March 2028. Cash of up to ¥475 million in total for each covered period; up to 700,000 points per fiscal year; and fluctuation within a range of 0% to 200% of the base points」

「The metrics for evaluating the achievement of performance and other targets under the performance-linked share-based compensation system, which will continue with partial revisions, newly include relative TSR as a metric to promote shared interests with shareholders, GHG emissions reduction as a metric to contribute to the global environment through a circular business model, and employee engagement as a metric to enhance the vitality of the Company's most important asset, its people.」

「The targets for fiscal 2023 were consolidated ROIC of 6.8% and net income attributable to owners of the parent of ¥10,472 million. Actual results were consolidated ROIC of 6.0% and net income attributable to owners of the parent of ¥10,613 million. The achievement rate for non-financial metrics, including progress in developing and distributing products that contribute to reducing environmental impact, was 137%.」

「At a meeting of the Board of Directors held on 25 May 2022, the Company resolved to continue this system, with partial revisions, for the 3 fiscal years from the fiscal year ending March 2023 through the fiscal year ending March 2025.」

「The Company also disposed of 34,182 treasury shares through the delivery of shares by the BIP trust for executive compensation (disposal book value: ¥13 million).」

「To improve the linkage between the compensation of directors, excluding outside directors and directors who are Audit and Supervisory Committee members, and performance, and to strengthen the objectivity and transparency of the compensation-determination process, the Company reviewed the level and design of bonuses from fiscal 2021 onward and established a compensation committee.」

「The common shares in the column headed "Shares with Full Voting Rights (Other)" include 1,502,100 shares (15,021 units) of the Company held by the BIP trust account for executive compensation.」

「This system is being introduced as a performance-linked share-based compensation system for the Company's directors, excluding outside directors and directors who are Audit and Supervisory Committee members, and executive officers who have entered into delegation agreements with the Company.」

「Shares of the Company held by the BIP trust for executive compensation are included in treasury shares deducted in calculating the weighted-average number of shares during the period for the purposes of calculating quarterly net income per share and diluted quarterly net income per share (600 thousand shares for the current third quarter cumulative consolidated period).」

「Shares of the Company held by the BIP trust for executive compensation are included in treasury shares deducted in calculating the weighted-average number of shares during the period for the purposes of calculating quarterly net income per share and diluted quarterly net income per share (214 thousand shares for the current second quarter cumulative consolidated period).」

「This system is scheduled to be introduced as a performance-linked share-based compensation system for directors, with a high degree of linkage to the Group's performance and a high degree of transparency and objectivity, in order to strengthen awareness of contributing to the Group's medium- to long-term performance improvement and enhancement of corporate value.」