This document has been translated from the Japanese original, as submitted to the Tokyo Stock Exchange, forreference purposes only. in the event of any discrepancy between this translated document and the Japaneseoriginal, the original shall prevail. DyDo Group Holdings, Inc. assumes no responsibility for this translation orfor direct, indirect or any other forms of damages arising from the translation.

CORPORATE GOVERNANCE
DyDo Group Holdings, Inc.

Last update: April 17, 2024

DyDo Group Holdings, Inc.
Tomiya Takamatsu, President
Inquiries: Corporate Communication Department
Share code: 2590
https://www.dydo-ghd.co.jp/en/

This document describes the Company’s approach to corporate governance.

I.

Basic approach to corporate governance, capital structure, corporate attributes, andother general information

1. Basic Approach
Taking into consideration the provisions and spirit of the Corporate Governance Code issued by the Tokyo
Stock Exchange, we have formulated a Basic Approach to Corporate Governance that our basic approach andpolicies in the area of corporate governance in order to facilitate sustained growth and improve our corporate
value over the medium and long term.
[Basic Policy]
1. Basic Approach to Corporate Governance“Creating happiness and prosperity, together with people and with society. To achieve this goal, the DyDo
Group will continue to embrace new challenges in a dynamic way.”
Our corporate philosophy inspires us in our ongoing quest to ensure proper, upstanding business practices
and rigid compliance with relevant laws and regulations. It motivates us to constantly improve management
efficiency and transparency, and to promote the group’s mutual benefits with all of our stakeholders,
including our customers, our employees, our business partners, our communities, and our shareholders. It isthe very cornerstone of our corporate governance, which is geared toward generating sustainable growth andimproving corporate value over the medium- to long-term.

[DyDo Group Philosophy]
Creating happiness and prosperity, together with people and with society. To achieve this goal, the
DyDo Group will continue to embrace new challenges in a dynamic way.
[DyDo Group Vision]
Together with our customers.
With our high-quality products, we will offer our customers excitement and enhanced wellness,with distinctive delicious flavors that only DyDo can.
Together with society.
Bringing together all DyDo's resources in the entire Group's product development and corporate
activities, we will help build a rich and vibrant society.
Together with the next generation.
We will create a “DyDo Standard” for the next generation that transcends national borders andconventional frameworks.
Together with our people.
We will tirelessly embrace the “DyDo Challenge” of bringing happiness to all whose lives aretouched by the DyDo Group.

The core business of the DyDo Group is Domestic Beverage Business, and considering the fact thatapproximately 90% of our sales for this segment come from vending machines in the local community, it
is fair to say that our soft drink products are a familiar part of consumers’ everyday lives. Moreover, ouroperations are conducted under a “fabless management” system, which means we have no plants of ourown and instead work in close cooperation with producers and distributors nationwide, to whom weoutsource the manufacture and delivery of our products. We concentrate our resources on more specificroles, such as product planning and development, and vending machine operations. We have one of theindustry’s most extensive networks of vending machines, which are maintained by DyDo Group
employees and the “Kyoeikai” (special vending machine operators that handle DyDo products).
It is a rather unique model that depends on the trust of our stakeholders. As such, we believe“happiness and prosperity together with people and society as a whole” is more than just a nice phrase fora corporate philosophy—it is our duty, and the overriding objective of our business activities. To that end,
our “dynamic efforts” are founded on bedrock of corporate governance, a steadfast platform of transparent,
fair, swift, and bold decision-making. Moreover, we continually work to improve that foundation in order
to contribute to the benefit of our shareholders.

2. How We Put the Japan’s Corporate Governance Code(1) Securing the rights and Equal Treatment of Shareholders
At the DyDo Group, our corporate philosophy guides us to work in close partnership with a broad
range of stakeholders. For instance, we endeavor to effectively secure the rights of our shareholders, andto prepare an environment in which they can exercise those rights appropriately.
(2) Appropriate Cooperation with Stakeholders Other Than Shareholders
We are keenly aware that our efforts to generate sustainable growth and improve corporate value overthe medium- to long-term (as enshrined in our corporate philosophy) are reliant on the valuable
resources and contributions of a broad spectrum of stakeholders, including our customers, ouremployees, our business partners, and our communities. Moreover, we are proud to work in close
partnership with our stakeholders, and we proactively incorporate their feedback into the running of the
DyDo Group. The executives and board of directors are charged with leading the creation andmaintenance of a corporate culture that demands respect for the rights and positions of stakeholders andfirm adherence to corporate ethics.
(3) Ensuring Appropriate Information Disclosure and Transparency
In line with our policy of transparency, fairness, and long-term focus, we provide shareholders,investors, and all other stakeholders the information they need to make informed decisions. This
includes information on our companies’ finances, business performance, management strategies andissues, risks, and other matters relating to governance. Indeed, we consider our legal obligation todisclose pertinent information promptly and appropriately to be a serious matter. In addition, however,
we are also eager to publish information that encourages correct understanding of the DyDo Group to
the furthest possible extent.
(4) Responsibilities of the Board
The board of directors seeks to discharge its responsibility and accountability to shareholders by
pursuing a three-pronged strategy for consistent improvement of the group’s earning power and capitalefficiency so as to achieve sustainable growth and improve corporate value over the medium- to longterm. Those three facets are: 1) set the direction for implementation of the group’s corporate strategy; 2)establish a platform for executives to take calculated risks; and 3) institute effective, independent, andobjective oversight of executives and directors.
(5) Dialogue with Shareholders
Constructive dialogue with shareholders is an integral part of our IR strategy, which is geared toward
our goal of sustainable growth and improved corporate value over the medium- to long-term. Suchcommunication not only fosters correct understanding of the DyDo Group, but it also generates valuable
feedback that serves as a frank appraisal of our true trustworthiness and corporate value.

[Reasons for not implementing certain principles of Japan’s Corporate Governance Code]Supplementary Principle 1.2.5
Treatment of institutional investors who own shares in the name of a trust bank (shintaku ginko)
and/or custodial institutions and express a wish in advance to exercise their voting rights at theGeneral Meeting of Shareholders
Because voting rights at the General Meeting of Shareholders are held by entities that are included in orregistered on the list of shareholders as of the date of record, we do not allow institutional investors who
own shares in the name of a trust bank or other institution to attend, exercise their voting rights at, or posequestions at the General Meeting of Shareholders.
Due to the large number of administrative issues associated with implementation of this principle, wehave decided to study it in the future after clarifying future trends.

Principle 1.4
Cross-Shareholdings
We annually assess whether or not to hold each individual cross-shareholding.
The results of the most recent assessment, which was conducted at the February 15, 2024, meeting of
the Board of Directors with regard to conditions as of January 20, 2024, confirmed the Company’s policy ofcontinuing to hold some shares that can be expected to help increase the Company’s value over the medium
and long term but considering selling or otherwise disposing of others.
With regard to “methods for specifically assessing whether or not the purpose of, and the benefits andrisks from, holding each individual cross-shareholding is appropriate and covers the company’s cost ofcapital,” as required by this principle, the Board of Directors recognizes this as an issue requiring further
discussion.

Principle 1.4.1
Response to Cross-Shareholder Indication of Intent to Sell
When cross-shareholders indicate their intention to sell their shares, we do not hinder the sale of thecross-held shares by, for instance, implying a possible reduction of business transactions.
However, in cases where parties which are cross-shareholders for the purpose of business cooperation
indicate their intention to sell their shares, we recognize the need to consider revising cooperative relations
based on economic rationality.

Principle 2.6
Roles of Corporate Pension Funds as Asset Owners
Because the management of corporate pension funds impacts stable asset formation for employees andour own financial standing, we ensure that potential conflicts of interest between pension fund beneficiaries
and our company are appropriately managed by entrusting fund operation to a management institution andby receiving regular reports on the status of fund management and stewardship activities.
However, with regard to the involvement of human resources and operational practices, as required bythis principle and including recruiting or assigning outside qualified persons, discussion of this issue will berevisited in the future as warranted based on careful monitoring of developments.

Supplementary Principle 4.1.3
Proactive engagement in the establishment and implementation of a succession plan for the CEO andother top executives, and appropriate oversight of the systematic development of succession candidates
Since assuming the position in April 2014, Tomiya Takamatsu, the Company’s president, hasdemonstrated strong leadership by managing the company with rapid, decisive decision-making in linewith its medium- and long-term management posture based on the perspective of all stakeholders and in
keeping with the newly formulated Group Philosophy and Group Vision.

Although we do not currently have a specific succession plan for positions such as president, werecognize that the cultivation of corporate officers and management positions that support the Company’s
executive team is an important priority, and we launched DyDo Innovation Academy, a long-term training
program for mid-level employees, in order to cultivate and identify the next generation of leaders who will
be responsible for driving the organization’s sustained growth going forward. We are working to foster
problem-solving skills, strengthen leadership, and facilitate management literacy through a combination ofoff- and on-the-job training.
For the future, the Board of Directors will appropriately supervise the implementation of initiatives
aimed at medium and long term improvement in corporate value, including a strategic development plan for
the next generation of corporate officers and managers.

Supplementary Principle 4.8.2
Election of a head independent outside director
Four of the seven positions on our Board of Directors are occupied by independent outside directors, but
we do not elect a head independent outside director.
In addition to the support offered to outside directors by the Board of Directors Secretariat to facilitateclear communication and coordination with the rest of the Company’s executive team, we foster
collaboration with auditors and the Kansayaku Board by means of such measures as regular meetings thatare attended exclusively by independent external officers.

[Disclosures in accordance with the principles of Japan’s Corporate Governance Code]Principle 1.3
Basic Strategy for Capital Policy
The Group’s basic policy is to pursue stable and robust financial management in order to secure stableprofits and improve its corporate value so that it can realize sustained growth over the medium and longterm. The Group’s funds are concentrated in its holding company, and it strives to maintain financial
soundness and to practice stable management by allocating those funds in an appropriate manner. In
addition to carrying out strategic business investments geared to drive future growth, we will work going
forwards to maintain and build a sound, balanced financial base for the Group’s operations, including by
returning profits to shareholders in an appropriate manner over the medium and long term, while
accumulating sufficient equity to cover unexpected risks and other contingencies.
Our basic policy concerning the allocation of profits is to continue to pay stable dividends whileconsidering the balance between the internal reserves necessary for sustained growth and shareholder
returns. With regard to internal reserves, we believe that shareholders’ joint interests are best served bygiving priority to strategic business investments that will generate sustained profit growth and capitalefficiency.

Principle 1.4
Cross-Shareholdings(Policy and approach on reduction of cross-shareholdings)
We may establish strategic stakes in important stakeholders such as business partners or companies withwhich we have entered into operational alliances in keeping with a basic approach of achieving sustained
growth and increasing corporate value over the medium and long term while pursuing mutually beneficial
relationships with stakeholders.
Examples include situations where we stand to gain stable and sustained cash flow by maintaining agood relationship over the medium and long term because a partner can offer a large number of favorable
vending machine locations, or where an operational alliance would contribute to efforts to increase
corporate value over the medium and long term. We clearly identify the purpose of each new stake and thenregularly verify its status following acquisition, and if it is determined that stable and ongoing cash flows
and improved corporate value in the medium and long term cannot be expected, reductions are performed
via sale of shares or some other, appropriate method.

(Content of assessment of whether or not to hold each individual cross-shareholding)
The company assesses the suitability of cross-shareholding on a regular basis once each year.
The results of the most recent assessment, which was conducted at the February 15, 2024, meeting of
the Board of Directors with regard to conditions as of January 20, 2024, confirmed the Company’s policyof continuing to hold some shares that can be expected to help increase the Company’s value over the
medium and long term but considering selling or otherwise disposing of others.
As of January 20, 2024, the balance for equity investments obtained for the purpose of holding,excluding net investments, was 7,946 million yen (8,925 million yen on January 20, 2023), with theprimary cause of the sale of some shares. Also, as of January 20, 2024, the number of listed companies forwhich equity investments have been obtained for the purpose of holding, excluding net investments, was 25(26 on January 20, 2023), which is a decrease of one company compared with the previous year. This is dueto the sale of some shares after verification at a meeting of the Board of Directors on February 15, 2023.
(Standard on exercising voting rights deriving from cross-shareholdings)
Voting rights deriving from cross-shareholdings are exercised on a case-by-case basis following an
investigation of whether this decision will damage our corporate value.

Principle 1.7
Related Party Transactions
To prevent directors, auditors, corporate officers, and other company officials and major shareholders
from abusing their positions by engaging in transactions that harm the interests of the Company or its
shareholders, competition and conflict of interest transactions with officers and corporations that aresubstantially controlled by officers must be deliberated and decided by the Board of Directors. In addition,affected officers may not participate in those deliberations and decisions.
Investigations to identify any transactions with directors, corporate auditors, or their close relatives are
documented, and any results including material information, are reported to the Board of Directors.
Furthermore, the Company discloses transactions between related parties in accordance with theCompanies Act, the Financial Instruments and Exchange Act, and rules imposed by the Tokyo Stock
Exchange.

Supplementary Principle 2.4.1
Approach to Securing Diversity within the Company and Status of Related Initiatives(Approach to securing diversity through appointing core personnel, etc.)
The Group works to cultivate a corporate culture that encourages employees to embrace challenges as away to spur its growth as well as their own in keeping with its Group Philosophy (“Creating happiness andprosperity, together with people and with society. To achieve this goal, the DyDo Group will continue toembrace new challenges in a dynamic way.”). We are also strengthening our personnel management systemfrom the three perspectives of securing human capital, fostering the development of human resources, andassigning and transferring human resources.
Society is changing as a result of the COVID-19 pandemic and this is causing dramatic shifts in thebusiness environment. For us to provide value to customers and society, and to achieve sustainable growth, it
is extremely important that we secure and train personnel who will support innovation, and put in place aninternal environment that supports that. With this awareness, we are actively pressing forward with
employing and promoting outside experts who have the high degree of specialization needed to work on thethree basic policies outlined in Group Mission 2030—innovation in the Domestic Beverage Business,
expansion of our business overseas, and development of a second major source of revenue in non-beveragebusinesses.
As an example of an initiative to assign and promote core personnel, designed to train and root out the
managers that will form DyDo’s next generation, we are implementing a long-term training program for
employees in middle management—DyDo Innovation Academy. The program, which combines off- and onthe-job training, gives participants the skills to resolves problems and issues, strengthens their leadershipabilities, and improves their management literacy.

(Personnel training policy and policy to put in place an in-house environment aimed at securing diversity,and their respective implementation statuses)
Reflecting our belief that investment in “invisible assets” like human resources is a key part ofachieving sustained growth and increasing our corporate value over the medium and long term, we are
striving to expand our systems for childcare leave, nursing leave, teleworking, etc., so that employees can dotheir very best in both their professional and private lives, whatever their stage of life.
As part of our commitment to facilitating a work-life synergy that allows each and every employee to makethe most of their skills and abilities while maintaining physical and mental health, we adopted the DyDo
Group Health Declaration in 2019, and we are working to put in place an environment that fosters
employees’ awareness of their own health. To achieve that goal will require employees to gain the requisite
capabilities and knowledge and to that end we are working to establish systems that support employees
autonomous learning—via online training sessions, e-Learning, etc.—and systems that develop capabilities,
for example career-stage-specific training.
In addition to transitioning in June 2020 to a new, telework-based workstyle that gives employees more
freedom with regard to how and when they work at DyDo DRINCO, the Group’s core company, we’ve
worked to accommodate the diversification of values as regards workstyles, for example by introducing
second jobs and second job acceptance programs in September 2020. In March 2022, we moved to a superflex system in which we have no core working hours, and we have amended our rules to reflect employee
feedback on new workstyles. These new rules will allow employees to choose individually whether tocommute to work or to telework (attending the office once a week). In this way, we are responding to thediversification of workstyles and promoting initiatives that will aid the hiring and training of autonomous
professionals with a diverse range of knowledge, values, and skills as a way to foster innovation.

(Voluntary and measurable targets and their status)(1) Promotion of women to management positions
In recent years, the Group has actively promoted the appointment of women to management positions,with the Group's core company DyDo DRINCO, INC. aiming to increase the proportion of women in
management positions from approximately 9% as of January 2024 to more than 15% by 2030, and its main
subsidiaries (DAIDO Pharmaceutical Corporation and Tarami Corporation) to more than 10% by 2030.
As approximately 60% of DyDo DRINCO's employees are in sales, the company believes that
promoting the activities of women, particularly in sales, will lead to an increase in the proportion of womenin management positions. For this reason, a Diversity Promotion Group has been newly established under theSales Division and is working to raise employee awareness and improve the workplace environment.
(2) Promoting mid-career hires to management positions
Since the 2010s, the Group has continuously recruited mid-career personnel with expertise in new fields
who can make an immediate contribution to the transformation of its business portfolio. As a result, at DyDo
DRINCO, the Group's core company, the proportion of mid-career hires in management positions is 26%(FY2023/ Mid-career hires are counted as those hired after FY 2010, when we started mid-career recruitingin earnest). The policy is to continue to actively recruit the necessary personnel in mid-career in line with the
management plan and to promote them to management positions based on their achievements and abilities,
regardless of whether they are new graduates or mid-career hires, and no quantitative targets have been set atpresent.
(3) Promotion of foreign nationals to management positions"For DyDo Group to create enjoyable, healthy lifestyles for people around the world", the Group isdeveloping its International Beverage Business. In overseas subsidiaries, the majority of management
positions are held by local employees who are non-Japanese nationals. In recruitment and promotion to
management positions in Japan, no distinction is made on the basis of nationality, but rather on performanceand ability, with no quantitative targets set at the present time.
Principle 2.6
Content of human resources and operational practices implemented to ensure expected functioning ofcorporate pension funds as asset owners
Because the management of corporate pension funds impacts stable asset formation for employees andour own financial standing, we ensure that potential conflicts of interest between pension fund beneficiaries
and our company are appropriately managed by entrusting fund operation to a management institution and byreceiving regular reports on the status of fund management and stewardship activities.

However, with regard to the involvement of human resources and operational practices, as required bythis principle and including recruiting or assigning outside qualified persons, discussion of this issue will berevisited in the future as warranted based on careful monitoring of developments.

Principle 3.1
Full Disclosure(1) Company objectives (e.g., business principles), business strategies and business plans
The Group established the DyDo Group Philosophy “Creating happiness and prosperity, together withpeople and with society. To achieve this goal, the DyDo Group will continue to embrace new challenges ina dynamic way.” and DyDo Brand Message “Offering delicious products for sound mind and body” in2014 in a concerted effort to facilitate sustained future growth in the face of substantial changes in theenvironment in which its Domestic Beverage Business operates.
In January 2019, the Group adopted Group Mission 2030, which summarizes its vision for 2030 as “forDyDo Group to create enjoyable, healthy lifestyles for people around the world.” We see our mission as
contributing to the realization of the future envisioned by the SDGs through our businesses, which will
facilitate a sustainable society that will in turn make possible our sustained growth. The spirit of striving toachieve happiness and prosperity together dove-tails perfectly with the SDG principle of “leaving no one
behind.” As we look towards 2030, we will strive to contribute to the realization of a sustainable society inwhich the people of the world can live happy, healthy lives, and to achieve the Group’s sustained growthand improve its corporate value over the medium and long term by creating social, environmental, andeconomic value.
The Group Mission 2030 describes the Group’s philosophy and vision, sets forth four themes that define
the mission it believes it should achieve by 2030, and offers a roadmap for its achievement. Specifically, it
divides the years leading up to 2030 into three phases (a platform-strengthening and investment stage, a
growth stage, and an achievement stage) by means of which we will develop a business portfolio with highgrowth potential, profitability, and efficiency and build highly competitive business models by pursuingbusiness strategies that correspond to each stage.
We are currently executing the five-year Mid-Term Business Plan 2026, with FY 2022 as the first year, as
our "Growth Stage". In order to make a leap forward in the future, we are working on renewing growth in
the Domestic Beverage Business as our most important task, as well as reformulating our international
Beverage Business strategies, and strengthening and developing non-beverage segments.
(2) Basic Approach and Policy Regarding Corporate Governance“DyDo Group strives to achieve happiness and prosperity together with people and society as a whole. To
realize this, we will continue our dynamic efforts to take on new challenges.” Our corporate philosophy
inspires us in our ongoing quest to ensure proper, upstanding business practices and rigid compliance with
relevant laws and regulations. It motivates us to constantly improve management efficiency andtransparency, and to promote the group’s mutual benefits with all of our stakeholders, including ourcustomers, our employees, our business partners, our communities, and our shareholders. It is the very
cornerstone of our corporate governance, which is geared toward generating sustainable growth andimproving corporate value over the medium- to long-term.
The core business of the DyDo Group is Domestic Beverage Business, and considering the fact thatapproximately 90% of our sales for this segment come from vending machines in the local community, it
is fair to say that our soft drink products are a familiar part of consumers’ everyday lives. Moreover, ouroperations are conducted under a “fabless management” system, which means we have no plants of ourown and instead work in close cooperation with producers and distributors nationwide, to whom weoutsource the manufacture and delivery of our products. We concentrate our resources on more specificroles, such as product planning and development, and vending machine operations. We have one of themost extensive networks of vending machines in Japan, maintained by DyDo Group employees and the“Kyoeikai” (special vending machine operators that handle DyDo products).
As such, we believe “happiness and prosperity together with people and society as a whole” is more thanjust a nice phrase for a corporate philosophy—it is our duty, and the overriding objective of our businessactivities. To that end, our “dynamic efforts” are founded on bedrock of corporate governance, a steadfast
platform of transparent, fair, swift, and bold decision-making. Moreover, we continually work to improvethat foundation in order to contribute to the benefit of our shareholders.
The President and Representative Director, Tomiya Takamatsu is a member of the family that founded theCompany and a major shareholder who holds shares of the Company directly and through asset
management companies under his direct control. (See “2. Capital structure” for more information
concerning major shareholders) He directs the Company’s management through swift and bold decisionmaking, and a management stance characterized by a medium- and long-term perspective that is based on
stakeholders’ positions. In keeping with our recognition that ensuring transparency and fairness in thedecision-making process is imperative in order to implement effective corporate governance at theCompany, we have chosen to structure the Company as a company with a Kansayaku Board. In thisorganizational structure, auditors have investigative authority under applicable laws and regulations toaudit directors’ performance of their obligations and responsibilities. By filling three of the four seats on
the Kansayaku Board with outside corporate auditors (three of which are independent outside corporate
auditors), we have sought to strengthen the ability of auditors to oversee the Company’s management froman independent perspective. Furthermore, we have elected independent outside directors to the Board of
Directors since April 2014 in order to incorporate outside perspectives into our management and enhance
the Board’s ability to supervise the Company’s operations.
We are making progress on appointing outside directors with diverse backgrounds in line with thedevelopment of management strategy and changes in society, while also working to increase theaccountability of top executives and transparency.
As of April 17, 2024, four of the seven seats on our Board of Directors are occupied by independent
outside directors, with the result that independent outside directors account for 57.1% of the Board of
Directors.
(3) The 16th Annual General Meeting of Shareholders imposed a limit of 280 million yen per year on
director compensation (not including the portion of compensation paid as employee salary) on April 18,
1991, while the 32nd General Meeting of Shareholders imposed a limit of 40 million yen per year on
auditor compensation on April 18, 2007.
Furthermore, at the 41st General Meeting of Shareholders on April 15, 2016, it was determined thata new trusteed performance-based stock compensation system for relevant directors, separate to thecompensation detailed above, and set a total upper limit of 550 million yen.
The decision-making policy for director compensation and related matters was determined by the Boardof Directors on March 4, 2022. For more details, please see the section on policies on amount ofcompensation or the method used to calculate compensation
The retirement benefit program for officers was abolished for directors and auditors at the 39th Annual
General Meeting of Shareholders, which convened on April 16, 2014. Directors and auditors who
continued to serve following the conclusion of that meeting are eligible to receive the retirement benefits
they earned during their service before the program was abolished, with the specific amount, timing,
method of presentation, and other terms to be determined by the Board of Directors (for directors) or
Kansayaku Board (for auditors).
(4) Board policies and procedures in the appointment of the senior management and the nomination of
directors and kansayaku candidates;
Our policies require the election of individuals who possess extensive knowledge of the Company’s
operations and who excel in character, knowledge, and energy as candidates for managing director
positions, and of individuals who possess specialized knowledge and extensive experience along with theability to contribute to the enhancement of our corporate governance, for example by offering advice asappropriate concerning decision-making by the Board of Directors from an independent perspective or byproviding highly effective supervision of the Company’s executive team, as candidates for outside director
positions. Similarly, our policies require the election of individuals who possess extensive expertise andexperience as specialists in areas such as finance, accounting, or law and who can carry out audits from ahighly independent and broad perspective as candidates for external auditor positions.
The key consideration in nominations of individuals to fill top executive positions is the ability to
exercise strong leadership and direction over the Company’s management through prompt and decisivedecision-making, a management stance characterized by a medium- and long-term perspective, andconsideration of stakeholders’ positions.

(5) Policies and Procedures with respect to the dismissal of corporate executives
In order to increase accountability of corporate executives and, thereby, further promote transparency,
four of the seven members of the Board of Directors are independent outside directors.
In the unlikely event that a situation arises which is deemed objectively worthy of dismissal, such aslegal or corporate by-law violations by corporate executive which significantly harm the value of thecompany, a decision will be made after thorough discussion by the Board of Directors with independent,
outside directors in attendance.
(6) Explanation of individual nominations and appointments based on (4)Details of the reasons for the selection of each candidate are detailed on the notice of convocation.
Details for directors to be appointed on April 16, 2024, are as follows.
Tomiya Takamatsu
Since his appointment to the position of President in April 2014, Mr. Takamatsu has demonstrated
strong leadership by managing the Company with rapid, decisive decision-making in line with its
medium- and long-term management posture based on the perspective of all stakeholders and in keepingwith the newly formulated Group Philosophy and Group Vision. He has been steadily working to build
business foundations geared to achieving growth in the future which has involved strengthening theGroup’s management. Based on this proven track record, he is considered to be qualified for service on
the Board of Directors.
Naoki Tonokatsu
Since joining the Company, Mr. Tonokatsu has engaged in finance for many years and has extensive
experience and achievements. Currently, as the Director, Corporate Officer, and General Manager ofFinance Department, he is putting effort into sound company management such as by building a solid
structure for the entire Group’s financial base and contributing to improving profitability. Based on thisproven track record, he is considered to be qualified for service on the Board of Directors.
Naoyuki Nishiyama
Mr. Nishiyama has engaged in a wide range of duties covering overall management such as corporate
strategy, strategic investment, international business and IT, and has extensive experience andachievements. Currently, he is leading Group companies as the Director, Corporate Officer, and General
Manager of Corporate Strategy Department and pursuing initiatives to expand into new businessdomains. Based on this proven track record, he is considered to be qualified for service on the Board of
Directors.
Masataka Inoue (outside director)
Mr. Inoue has a wealth of knowledge and overseas experience in the food industry. Based on his
auditing experience in areas such as business development through overseas M&As and overseas
subsidiaries, he is appropriately carrying out his role in strengthening the oversight function of theBoard of Directors by commenting with respect to his viewpoint on risk and returns in the course ofdeliberations concerning such management issues of the Company as accelerated development of theCompany’s business overseas and expanding into new business domains, and otherwise offering advice
and suggestions from an independent perspective. Based on this proven track record, he is considered tobe qualified for service on the Board of Directors.
*We have submitted filings to the Tokyo Stock Exchange designating Mr. Inoue as an independent
outside director.
Michiaki Kurihara (outside director)
Mr. Kurihara has a wealth of knowledge and experience in the pharmaceutical industry. Based on his
experience in the pharmaceutical industry in Japan and management experience at overseas subsidiaries.
The Company has judged that he is appropriately carrying out his role in strengthening the oversightfunction of the Board of Directors and offering advice and suggestions from an independent perspectiveon the Company’s management issues, such as overseas business development and the establishment of
a second pillar in the healthcare field. Based on this proven track record, he has been put forward as a
candidate for continued service as an Outside Director on the Board of Directors.
* We have submitted filings to the Tokyo Stock Exchange designating Mr. Kurihara as an independent
outside director.

Junko Kawano (outside director)
Ms. Kawano has a wealth of knowledge and experience in human resources development, including
consistent involvement in organizational culture reform to emphasize customer value and the promotionof the advancement of women. She is appropriately carrying out her role in strengthening the oversightfunction of the Board of Directors and offering advice and suggestions from an independent perspectiveon the promotion of human resources strategy and diversity, which form the foundation of the Group’s
human capital management. Based on this proven track record, she is considered to be qualified forservice on the Board of Directors.
* We have submitted filings to the Tokyo Stock Exchange designating Ms. Kawano as an independent
outside director.
Mina Ito (outside director)
Ms. Ito is well versed in all aspects of corporate legal affairs as an international lawyer, and has
extensive experience in global business strategy (Middle East) and management support, as well as aproven track record as a corporate manager. The Company has judged that she will be able to further
strengthen the oversight function of the Board of Directors by offering advice and suggestions from an
independent perspective on the overall management of the Group and the promotion of international
business strategies. Based on the reason, she is considered to be qualified for service on the Board of
Directors.
* We have submitted filings to the Tokyo Stock Exchange designating Ms. Ito as an independent outside
director.

Supplementary Principle 3.1.3
Sustainability Initiatives(Disclosure of the Sustainability Initiatives That Form Part of Our Management Strategies)
The Group formulated the Group Mission 2030—“For DyDo Group to create enjoyable, healthy
lifestyles for people around the world.”—to explain where, and what, it wants to be by incorporating issues
previously identified and analyzing changes to domestic population trends and other medium- and long-termchanges in the business environment as either risks or business opportunities that will exert a serious impact
on its business model.
We see our mission as contributing to the realization of the future envisioned by the SDGs through ourbusinesses, which will facilitate a sustainable society that will in turn make possible our sustained growth.
The spirit of striving to achieve happiness and prosperity together dove-tails perfectly with the SDG principleof “leaving no one behind.” As we look toward 2030, we will strive to contribute to the realization of asustainable society in which the people of the world can live happy, healthy lives; to achieve the Group’s
sustained growth; and to improve its corporate value over the medium and long term.
(Investments, etc., in human capital and intellectual properties)
To achieve our Group Mission 2030, it is important to promote business innovation and the acquisitionof new business, while responding flexibly to changes in society. To this end, we believe it is essential tobuild an organization with human capital possessing diverse values and capabilities, and to promote theindependent growth and activities of each of our employees.
The qualities we look for in human capital are "Ambition", "Spirit of Challenge", "Willingness toGrow", " Achievement", and "Self-Discipline”. To support the growth and success of human capitalpossessing these five qualities, we provide a system, DyDo Career Create, that supports the careerdevelopment of each on own initiative. At the same time, we strive to create an environment with a focus on
psychological safety, where diverse values are respected, and everyone can fulfill their potential. In addition,
we provide an environment where work-life synergy (both improved productivity and well-being) can beachieved.
Through the above, we will develop self-directed professionals, combines the five qualities andcontinues to achieve high performance. While enhancing engagement with human capital in accordance withthis policy, we will improve our ability to respond to change and create value both domestically andinternationally, thereby achieving sustainable growth in our businesses. The indicators and targets in humancapital management" and "policies and specific examples for achieving human capital management" aredescribed in the Annual Securities Report(Japanese only).

In the Domestic Beverage Business, the Group’s core business, we must also lead the industry inworkstyles at vending machine operations sites to establish a solid advantage in the vending machine market.
To this end, we are steadily working to develop our smart operation structure by utilizing cutting-edge
technologies. By fusing our strengths in vending machine operational expertise with digital technologies, we
are working to create value, while at the same time, we will aim to achieve sustainable growth in the vending
machine business by diversifying workstyles in response to a declining working population in the future.

(Enhancing disclosure quality and quantity based on the TCFD’s recommendations and other highlevel frameworks)
In recent years, changes in the way stakeholders evaluate corporate attitudes toward environmental issues
such as climate change, and new values in the market, have a major impact on how consumers choose
products and services. To curtail the likelihood of climate change, systems of laws and regulations—such as
those that aim at rationalizing energy usage on a global scale and measures to combat global warming—arebeing strengthened. Climate-change-related physical risks that affect the supply chain, including the loss ofclean water resources, its impact on coffee and other raw materials, and damage to manufacturing facilities
from large-scale natural disasters, are growing. Therefore, we recognize that responding to climate change,
and the major issue it presents global society, is an important factor for our management in achieving
sustainable growth for the Group.
We have put contributing to a decarbonized, recycling-oriented society as one of the Group’s material
issues, and in January 2022 we declared our support for the Task Force on Climate-related Financial
Disclosures (TCFD). We have also set ourselves groupwide CO2 emissions reduction targets. The TCFD’s
recommendations suggest disclosing information in four categories: governance, risk management, strategy,
and metrics and targets.
Based on our TCFD framework, we detail the following climate-related information.
・Website https://www.dydo-ghd.co.jp/en/sustainability/eco/tcfd/
Supplementary Principle 4.1.1
Scope of authority delegated to the executive team by the Board of Directors
Our Board of Directors is the body with decision-making authority over important matters related to theCompany’s operations and responsibility for supervising those operations. The specific matters over which
it has decision-making authority and the reporting requirements to which it is subject are set forth in our
Board of Directors Rules.
The Management Meeting, whose membership consists of full-time directors and corporate officers,
serves as an advisory body for the president by proposing policies and plans related to the overallmanagement of the Company and by investigating, researching, planning, managing, communicating, andcoordinating the same.
As part of our transition to a holding company structure in January 2017, we transferred authority forcertain operations to group companies in order to accelerate decision-making and stimulate robust
deliberation about group strategy, business plans, and other topics by the Board of Directors.
We set forth a series of new, specific standards by revising applicable provisions of the Board of
Directors Rules, Management Meeting Rules, Management Authority Rules, and other documents.

Principle 4.8
Effective Use of Independent Directors
We have elected two independent outside directors to the Board of Directors since April 2014 in order toincorporate outside perspectives into our management and enhance the Board’s ability to supervise theCompany’s operations. In this way, we’re working to increase the accountability of top executives and toincrease transparency. We are also making progress on appointing outside directors with diverse
backgrounds in line with the development of management strategy and changes in society.
As of April 17, 2024, four of the seven seats on our Board of Directors are occupied by independent
outside directors, with the result that independent outside directors account for 57.1% of the Board of
Directors.

Principle 4.9
Independence Standards and Qualification for Independent Directors
The Company has established the following standards to govern the independence of its Outside
Directors/Corporate Auditors.
1. Candidates may not be an individual with responsibility over operations (*1) of the DyDo Group;
2. Candidates may not have the DyDo Group as a major business partner (*2) or be an individual withresponsibility over operations of a company that has the DyDo Group as a major business partner;
3. Candidates may not be a major business partner of the DyDo Group, or an individual withresponsibility over operations of a major business partner of the DyDo Group;
4. Candidates may not be a consultant, accounting specialist, or legal specialist who receives a large
amount of money (*3) or other assets apart from officer compensation from the DyDo Group;
5. Candidates may not be a trustee or an individual with responsibility over operations of an organizationthat receives donations or subsidies in excess of a certain amount (*4) from the DyDo Group;
6. Candidates may not be a major shareholder of the Company (*5) or an individual with responsibility
over operations of a major shareholder of the Company;
7. Candidates may not be an individual with responsibility over operations of a certain other company if
an Executive Director or full-time Corporate Auditor of the Company is concurrently serving as an
outside director or outside corporate auditor of that company;
8. Candidates must not have fallen under the statuses described in 1 through 7 above at any time during
the last three years, and;9. Candidates must not be a close relative (*6) of an individual who falls under any of the statuses
described in 1 through 8 above (however, this applies only to an individual deemed an important
employee (*7) with respect to an employee described in 1 above).
*1 In this context, an individual with responsibility over operations refers to an Executive Director or
executive officer of the Company, or another company’s company officer with responsibility over thatcompany’s business operations, or individuals or employees with the same responsibilities.
*2 In this context, a major business partner refers to a business partner whose payments or receipts withrespect to transactions with the DyDo Group have exceeded 2% of its total annual consolidated net
sales during the most recent fiscal year.
*3 In this context, a large amount of money refers to an amount, when averaged over the last three years,
that is ¥10 million or more per year (for individuals), or, over 2% of an organization’s consolidated net
sales when averaged over the last three fiscal years (for organizations).
*4 In this context, a certain amount refers to an amount, when averaged over the last three fiscal years,
that is either ¥10 million per year or 30% of the average annual total expenses of the organization,
whichever is larger.
*5 In this context, a major shareholder of the Company refers to a shareholder who directly or indirectly
holds 10% or more of voting rights of the Company.
*6 In this context, a close relative refers to a spouse, a relative within the second degree of kinship, or a
relative residing in the same household.
*7 In this context, an important employee refers to an employee of the rank of General Manager or above.

Principle 4.10
Use of Optional Approach
On March 15, 2019, the Board of Directors approved the formation of an Advisory Board consisting ofroughly three outside experts not currently serving as outside directors or corporate auditors as a voluntarymechanism to further enhance its corporate governance.
In addition to offering assessments and advice from an objective perspective concerning issues thatdemand a high level of specialized knowledge, for example investment decisions related to the orphan
drug business, the Advisory Board, which will advise the president, is intended to further boost thetransparency of the Company’s management by incorporating outside perspectives into the execution ofstrategy, for example by offering advice concerning management issues faced by the Group.

Supplementary Principle 4.10.1
Nominating and Compensation Committee
Meeting on August 30, 2021, the Board adopted a resolution to establish a Nominating and Compensation
Committee.
Role and authority of the Committee
The Committee will play its role as a voluntarily established advisory body to the Board by exercising
its authority to discuss the matters listed below and report its findings to the Board in response to
consultation requests.
The Board will respect the findings of the Committee to the greatest extent possible.
(1)

Matters related to the appointment and dismissal of directors(2)

Matters related to the selection and dismissal of the representative director(3)

Matters related to the selection and dismissal of executive directors(4)

Mattes related to upper limits on compensation and other remuneration awarded to directors(5)

Matters related to policies for determining compensation and other compensation awarded toindividual directors(6)

Matters related to compensation and other compensation awarded to individual directors(7)

Matters related to succession planning (including training)(8)

Matters related to policies for nominating directors(9)

Matters related to policies for nominating representative directors of important subsidiaries(10)

Other matters as deemed necessary by the Board of Directors

Approach to independence in the composition of the Committee
The Committee will consist of at least three directors as selected by resolution of the Board, and amajority of its members must be independent outside directors.
To ensure the transparency and objectivity of discussions and bolster the Committee’s independence,a member who is an independent outside director will be selected to serve as its chairperson.

Supplementary Principle 4.11.1
Approach to the overall balance of knowledge, experience, and skill as well as the diversity and size of
the Board of Directors
Our Articles of Incorporation require seven or fewer directors and four or fewer auditors.
In line with our corporate philosophy—“Creating happiness and prosperity, together with people and withsociety. To achieve this goal, the DyDo Group will continue to embrace new challenges in a dynamic
way.”—we have set ourselves Group Mission 2030—“For DyDo Group to create enjoyable, healthy
lifestyles for people around the world.”—to explain where, and what, we want to be by the year 2030.
As such, the Board of Directors’ role is to set the direction for implementation of the DyDo Group’s
corporate strategy; establish a platform for executives to take calculated risks; and institute effective,
independent, and objective oversight of executives and directors. To enable it to fulfill this role, we have
set the composition of the Board of Directors as detailed below, and the Nominating and Compensation
Committee also discusses the Board of Directors’ composition.
- We have determined that a seven or fewer members is a necessary and appropriate size for the Board of
Directors, and we ensure a range of perspectives (gender, age, career backgrounds, etc.). We also take into
consideration the skills that the Board of Directors requires that are specified separately. Accordingly, theBoard of Directors comprises directors who possess extensive knowledge of our operations and who excel
in terms of character, knowledge, and energy; and outside directors who possess specialized knowledge
and extensive experience along with the ability to contribute to the enhancement of our corporate
governance, for example by offering advice as appropriate concerning decision-making by the Board of
Directors from an independent perspective or by providing highly effective supervision of our executiveteam.

- Half or more of the members of the Board of Directors are independent outside directors who have theability to contribute to sustained growth and increased corporate value over the medium and long termfrom the perspectives of strengthening oversight functions and the transparency of management.
In order for the Board of Directors to appropriately undertake its roles and responsibilities, we haveconsidered the overall mix of skills that the Board of Directors requires, and—with reference to the DyDo
Group Corporate Philosophy, Group Mission 2030, mid-term business plans, and other materials—haveparticular expectations for directors to demonstrate capabilities and skills that make use of knowledge andexperience in the fields detailed below.
Fields in which we expect directors to be able to demonstrate their skills in particular- Overall management, based on our group philosophy of “striving to achieve happiness and prosperity
together with people and society as a whole”- Marketing/sales (operations), important for our core Domestic Beverage Business- Global skills, necessary for us to expand our business globally- Healthcare, necessary in our new business domain, the orphan drug business- M&A and strategic investment, part of plans to formulate and implement strategies aimed at further
business development and growth- Finance/accounting and legal affairs/compliance, which forms the basis for decision-making on
management and business activities- Sustainability (for the environment and society), necessary to contribute to a sustainable global
environment and local society- Personnel development and diversity, the foundations of corporate activities and management that is
focused on human capital- DX and innovation, imperative to provide society with new value
We have also produced a skills matrix, which brings together the knowledge, experience, and specialisms
we expect of our directors in one place. This matrix is published as part of our notices of convocation of
the General Meeting of Shareholders, alongside director selection proposals.
We also expect corporate auditors to refer to their roles and responsibilities to audit business execution bydirectors, and to demonstrate skills in the areas of finance/accounting and legal affairs/compliance, and we
consider the overall mix of skills that the Board of Corporate Auditors requires.
We believe that the current structure of the Board of Directors, of which four out of seven members—
more than half—are independent outside directors (two of whom are female), allows us to ensure an
additional level of independence and objectivity. We select four corporate auditors, of whom three areoutside corporate auditors (one of whom is female), and they supervise business execution by the directors
from an independent perspective.

Supplementary Principle 4.11.2
Concurrent service by officers of other listed companies on the Company’s Board of Directors or
Kansayaku Board
We disclose information about concurrent service by officers of other listed companies on the Company’s
Board of Directors or Kansayaku Board on an annual basis in notices of convocation of the General
Meeting of Shareholders, securities reports, and corporate governance reports.
As of April 17, 2024, two of our four outside directors concurrently serve as outside corporate auditors atlisted companies, and one of them also concurrently serves as an outside auditor at a listed company. Of
our three outside corporate auditors, two concurrently serve as outside directors who are audit andsupervisory committee members at listed companies, and one of them also concurrently serves as an
outside director at a listed company.

Supplementary Principle 4.11.3
Analysis and evaluation of the overall effectiveness of the Board of Directors and overview of theresults of the same
We have evaluated the effectiveness of the Board of Directors since FY2016, and we adopted thefollowing analysis/evaluation method in FY2023. We released an overview of those evaluation results on
March 15, 2024.

1. Analysis/Evaluation Method
In order to analyze and evaluate the effectiveness of the Board of Directors, during the period between
December 2023 and March 2024, all directors and auditors carried out a self-evaluation survey, andindividual interviews were carried out by the Secretariat of the Board of Directors.
After that, at a meeting of the Board of Directors that was held on March 15, 2024, in addition to
analyzing the results of the self-evaluation surveys, and in an attempt to enhance awareness regarding
present problems, constructive discussions were held regarding these matters and future efforts torealize a higher level of effectiveness for the Board of Directors.
2. Evaluation Items
The self-evaluation form used the following headings to facilitate a review of the nature of discussions
held by the Board as well as how the body dealt with issues over the last year.
(1) Agenda and operations of the Board of Directors(2) Operations of the Board of Directors over the medium and long term in light of the Group
Mission 2030
(3) Other (issues related to the strengthening of governance structures, etc.)
3. Overview of Analysis/Evaluation Results
A discussion based on analysis of the self-evaluation results for all corporate officers concluded thatthe Board of Directors demonstrated adequate supervisory functions and has achieved a high level of
effectiveness.
Improvements in Board of Directors operations during FY2023
In FY 2023, the Board of Directors regularly managed the progress of ROIC, a financial KPI of the
Mid-Term Business Plan 2026. In addition, the Board of Directors held a free discussion meeting to
exchange opinions on the medium- to long-term strategy of the Domestic Beverage Business, and held
active discussions. The Material Issues of "Group Mission 2030" was discussed from various
perspectives, particularly with regard to human capital management, based on the diverse experienceand expertise of the outside directors.
In addition, we have made efforts to promote understanding of the Group's businesses and agenda
items through site visits to subsidiary offices for outside directors and outside corporate auditors andvideo explanations of some agenda items in advance, thereby enhancing discussions at the Board of
Directors meetings.
On the other hand, it was recognized that further deliberations should be conducted to optimize thebusiness portfolio in order to improve the capital efficiency of the group as a whole.
In addition, it was shared that future challenges to strengthen the functions of the Board of Directors
and further enhance its effectiveness are as follows.
(1) To further enhance the discussion of important agenda items(2) Discuss the business portfolio and allocate management resources appropriately(3) To promote further penetration of ROIC as a financial KPI and to promote management with anawareness of cost of capital and profitability.
(4) Strengthening the Company's commitment to Material Issues, with a focus on Governance andDiversity, and providing appropriate oversight of these efforts[Reference] Issues identified last year
Future issues to address in order to boost the effectiveness of the Board of Directors(1) Further enhancing deliberations of important issues for the Board of Directors between directors
responsible for business execution, outside directors, and outside auditors.
(2) Discussing medium- and long-term strategies for the Domestic Beverage Business—the core of
the DyDo Group’s cash flows—and also supervising progress of major measures and KPIs
appropriately.
(3) Promoting management focused on capital efficiency by ensuring everyone is aware of ROIC,
one of our financial KPIs.
(4) Overseeing initiatives related to material issues, and the status of major KPIs, that impact on ourrealization of the goals of Group Mission 2030 appropriately.

Supplementary Principle 4.14.2
Policies on the training of directors and auditors
We provide opportunities for directors and auditors, including outside directors and external auditors, togain necessary knowledge about the Company’s businesses, financials, organization, and othercharacteristics and to develop an understanding of the roles and responsibilities of directors and auditors
when they assume their positions. We also offer top executives, defined as individuals serving in positions
at the corporate officer level and above, opportunities to gain knowledge about corporate legal affairs,
accounting, corporate governance, capital markets, and other topics and to keep their knowledge up todate.

Principle 5.1
Policy for Constructive Dialogue with Shareholders(Policy on the development of systems and initiatives)(1) DyDo Group Holdings strives to achieve sustained growth and increased corporate value over the
medium and long term by promoting constructive dialog with stakeholders. By giving overall
responsibility for dialog with stakeholders to the president and having the general manager of the
Corporate Communications Department (Information Management Officer) pursue dialog with specificpurposes, the Company strives to build trust with structures that bring stakeholder voices to bear on its
management.
(2) The Corporate Communication Department works closely with other involved departments to facilitatesmooth dialog with shareholders and investors by holding meetings as necessary. In addition, the head ofthe department attends meetings of the Board of Directors, Management Meeting, Boards of Directors ofimportant subsidiaries, and other groups in an effort to maintain a timely understanding of information
about the Group’s management. Furthermore, we hold multiple meetings that are attended by thepresident and corporate officers with relevant areas of authority, including quarterly financial briefings
and briefings on important developments such as mergers and acquisitions, and we carefully study how tobest offer easy-to-understand explanations to shareholders and investors.

(3) Means by which we facilitate dialog apart from individual meetings include financial briefings
conducted by the president for institutional investors following the end of the second quarter and the endof the fiscal year as well as small meetings that are attended by the president.
In addition, we also focus on engaging in dialogue with shareholders and investors, not only by our
General Manager of Corporate Communication Department, but also by our Director, Corporate Officer,
and General Manager of the Finance Department, and Director, Corporate Officer, and General Managerof the Corporate Strategy Department, in order to build smooth relationships with shareholders andinvestors.
IR activities for individual investors include online information sessions, as well as website content
such as videos.
As a tool to communicate with all shareholders, we publish the DyDo Challenge newsletter (Japanese
Only) twice a year, and collect feedback from shareholders through questionnaires. The results arereported to the management, and they are also uploaded to our website.
(4) We strive to reflect feedback from shareholders and investors in the Company’s management byregularly reporting views and concerns that emerge from dialog with shareholders and investors to theBoard of Directors and by providing more detailed information to the president as feedback.
(5) We strive to comply with fair disclosure practices by managing insider information during dialog withshareholders and investors in an appropriate manner that conforms with internal rules. Rules require thatmeetings with individual shareholders and investors be attended by more than one employee, andmeeting minutes are shared with top management and division directors. In keeping with our Disclosure
policy, we avoid individual meetings with shareholders and investors during quiet periods.
In addition, the Audit Department regularly monitors implementation of the Disclosure Policy andstructures designed to ensure the timely disclose of information.

(6) The status of dialogue with shareholders and investors is described in the following.
・On the company's website: https://www.dydo-ghd.co.jp/ir/event/general_communication.html(Japanese only)【Measures to achieve cost of capital and share price conscious management】
The Group calculates its cost of equity based on the CAPM (Capital Asset Pricing Model) and its own
WACC (Weighted Average Cost of Capital) based on that cost of equity, which is regularly shared withmanagement (calculated values are not disclosed).
In its Mid-Term Business Plan 2026, the company has set a consolidated ROIC target of 6% andtargets ROIC for each business segment (Domestic Beverage Business: 13%, International Beverage
Business: 3%, Non-Beverage Business: 8%) for the year ending 20 January 2027, with ROIC > WACC.
To realize these targets, we have established an organizational management system with an awareness ofcapital efficiency, including managing progress based on a business-specific ROIC tree.

2. Capital structure
Percentage of shares owned by foreigners

Less than 10%[Major Shareholders]Shareholder name

Number of shares

HighWood Co. Ltd.
SantomiJapan Trustee Services Bank,Ltd. (Trust Account)
Taita Corporation
Tomihiro Takamatsu
Tomiya Takamatsu
Akira Takamatsu
Lemon gus Kagoshima,Ltd
Custody Bank of Japan, Ltd. (Trust Account)
Lemon gas Kumamoto Ltd.

2,470,800
2,011,600
962,600
621,800
495,000
495,000
494,000
250,000
240,900
223,400

Controlling shareholders (except parent company)--

Parent company

None

Percentage of voting
rights (%)
15.53
12.64
6.05
3.91
3.11
3.11
3.10
1.57
1.51
1.40

Supplemental explanation for this item―
3. Corporate attributes
Listed stock exchange and market segment

Tokyo, Prime

End of fiscal year

January

Industry

Foods

Number of employees (consolidated basis) at end oflast business year

More than 1,000

Consolidated sales during last business year

From 100.0 billion yen to less than 1 trillion yen

Number of consolidated subsidiaries at end of lastbusiness year

From 10 to less than 50

4. Approach to policies to protect minority shareholders in the event of transactions or other dealings with
controlling shareholders―
5. Other special circumstances with the potential to have a major impact on corporate governance―II.

Status of management positions related to business decision-making, operations, andoversight and other corporate governance structures

1. Organizational structure, organizational administration, and related information
Organizational structure
Company with Kansayaku board[Board of Directors]
Number of directors as defined in the Articles ofIncorporation

7

Term of directors as defined in the Articles ofIncorporation

1 yearChairperson of the Board of Directors

President

Number of directors

7

Election of outside directors

Yes

Number of outside directors

4

Number of outside directors who have been
designated as independent officers

4

Relationship with company (1)NameAttribute

Masataka Inoue

From other company

Michiaki Kurihara

From other company

Junko Kawano

From other company

Mina Ito

AttorneyaRelationship with company*b c d e f g h i jk* Options to describe relationships with company* Place a hollow circle in a cell to indicate a current or recent relationship or a hollow triangle to indicate apast relationship.
* Place a solid circle in a cell to indicate a current or recent relationship held by a close relative or a solid
triangle to indicate a past relationship held by a close relative.
a. Individual with responsibility over operations at a listed company or the subsidiary of a listedcompanyb. Individual with responsibility over operations or non-managing director at the parent company of alisted company
c. Individual with responsibility over operations at a fellow subsidiary of a listed company
d. Individual who counts a listed company as a major business partner, or individual with responsibility
over operations at an entity that counts a listed company as a major business partnere. Individual who is a major business partner of a listed company, or an individual with responsibility
over operations at such a company
f. Individual who is a consultant, accounting specialist, or legal specialist who receives a large amountof money or other assets apart from officer compensation from a listed company
g. Individual who is a major shareholder of a listed company (if the major shareholder in question is a
corporation, individual with responsibility over operations at the corporation in question)h. Individual with responsibility over operations at a business partner of a listed company (other than[d], [e], or [f] above) (not including close relatives)
i. Individual with responsibility over operations at an entity at which an outside director serves in a
concurrent position (not including close relatives)
j. Individual with responsibility over operations at an entity that receives donations from a listedcompany (not including close relatives)k. OtherRelationship with company (2)Name

Independent
officer

Masataka
Inoue○

Michiaki
Kurihara○

Junko
Kawano○Mina Ito○Supplementary explanation
concerning complianceReason for election

Mr. Inoue has a wealth of knowledge andoverseas experience in the food industry.
Based on his auditing experience in areas
such as business development throughoverseas M&As and overseas
subsidiaries, he is appropriately carrying
out his role in strengthening the oversightfunction of the Board of Directors by
Mr. Inoue and the Company
commenting with respect to his viewpointshare no special interests.
on risk and returns in the course ofdeliberations concerning suchmanagement issues of the Company as
accelerated development of theCompany’s business overseas andexpanding into new business domains,
and otherwise offering advice andsuggestions from an independent
perspective.
Mr. Kurihara has a wealth of knowledge
and experience in the pharmaceuticalindustry. Based on his experience in thepharmaceutical industry in Japan andmanagement experience at overseas
subsidiaries. The Company has judgedthat he is appropriately carrying out his
Mr. Kurihara and the Company
role in strengthening the oversightshare no special interests.
function of the Board of Directors andoffering advice and suggestions from an
independent perspective on the
Company’s management issues, such as
overseas business development and theestablishment of a second pillar in thehealthcare field.
Ms. Kawano has a wealth of knowledge
and experience in human resources
development, including consistentinvolvement in organizational culture
reform to emphasize customer value andthe promotion of the advancement of
Ms. Kawano and the Company women. She is appropriately carrying out
share no special interests.
her role in strengthening the oversightfunction of the Board of Directors andoffering advice and suggestions from an
independent perspective on the promotionof human resources strategy and diversity,
which form the foundation of the Group’s
human capital management.
Ms. Ito is well versed in all aspects ofcorporate legal affairs as an international
lawyer, and has extensive experience in
Ms. Ito and the Company shareglobal business strategy (Middle East)no special interests.
and management support, as well as aproven track record as a corporate
manager. The Company has judged that

she will be able to further strengthen theoversight function of the Board of
Directors by offering advice andsuggestions from an independent
perspective on the overall management of
the Group and the promotion ofinternational business strategies.
Voluntary committee equivalent to a nominating
committee or compensation committee

Yes

Establishment status, member compositions, and a position of the chairman of the voluntary committee

Name

Total
memberFulltime
memberInternal
director

Outsidedirector

OutsideexpertOther

Chairman

Voluntarycommittee
equivalent toa nominating
committee

Nominating
andCompensation
Committee

5

0

1

4

0

0

Outsidedirector

Voluntarycommittee
equivalent toacompensationcommittee

Nominating
andCompensation
Committee

5

0

1

4

0

0

Outsidedirector

Additional information
We have established a Nominating and Compensation Committee to strengthen the independence,
objectivity, and accountability with which the Board carries out its functions. The Nominating andCompensation Committee comprises three or more directors selected by a Board of Directors decision, andthe majority of those will be independent outside directors. Furthermore, the chair will be chosen from theamong the independent outside directors.
[Auditors]
Board of Auditors

Yes

Number of auditors as defined in the Articles ofIncorporation

4

Number of auditors

4

State of collaboration among auditors, accounting auditor, and internal auditing departments- In addition to reviewing the accounting auditor’s audit plans, corporate auditors assess accounting audit
methodology and results and exchange views as necessary by attending the taking of inventory in the fieldby the accounting auditor and through reports on accounting audit results to the Kansayaku Board by theaccounting auditor, which are offered at the end of the fiscal year and at the end of interim reporting
periods. Full-time corporate auditors attend regular audit meetings, which are held by internal audit
departments every three months to report information such as audit results and future audit plans to thepresident. This arrangement allows them to assess the status of internal audits and internal information
related to those audits and to proffer views and make requests as necessary.

- In addition, internal audit departments work closely with the Kansayaku Board to point out problem areasand propose improvement measures by auditing the state of individual departments’ compliance with laws,
regulations, our Articles of Incorporation, and internal rules.
Election of external auditors

Yes

Number of external auditors

3

Number of external auditors who have been
designated as independent officers

3

Relationship with company (1)NameAttributeab

Relationship with company*c d e f g h i j klm

Shigeyuki Moriuchi Certified Public Accountant
Kiyoshi Watanabe Tax Accountant
Mayumi Ishihara
Attorney* Options to describe relationships with company* Place a hollow circle in a cell to indicate a current or recent relationship or a hollow triangle to indicate apast relationship.
* Place a solid circle in a cell to indicate a current or recent relationship held by a close relative or a solid
triangle to indicate a past relationship held by a close relative.
a. Individual with responsibility over operations at a listed company or the subsidiary of a listedcompanyb. Non-managing director or accounting councilor at a listed company or a subsidiary of a listedcompanyc. Individual with responsibility over operations or non-managing director at the parent company of alisted company
d. Auditor at the parent company of a listed company
e. Individual with responsibility over operations at a fellow subsidiary of a listed company
f. Individual who counts a listed company as a major business partner, or individual with responsibility
over operations at an entity that counts a listed company as a major business partner
g. Individual who is a major business partner of a listed company, or an individual with responsibility
over operations at such a company
h. Individual who is a consultant, accounting specialist, or legal specialist who receives a large amountof money or other assets apart from officer compensation from a listed company
i. Individual who is a major shareholder of a listed company (if the major shareholder in question is a
corporation, individual with responsibility over operations at the corporation in question)
j. Individual with responsibility over operations at a business partner of a listed company (other than[f], [g, or [h] above) (not including close relatives)k Individual with responsibility over operations at an entity at which an outside director serves in a
concurrent position (not including close relatives)l. Individual with responsibility over operations at an entity that receives donations from a listedcompany (not including close relatives)m OtherRelationship with company (2)Name

Independent
officer

Shigeyuki
Moriuchi○KiyoshiWatanabe○

MayumiIshihara○

Supplementary explanation
concerning compliance
Mr. Moriuchi serves as Outside
Director (Audit and Supervisory
Committee Member) of
KOSHIDAKA HOLDINGS Co.,
LTD. and Outside Corporate Auditorof KATO SANGYO CO., LTD.
There are no special interests
between the Company and
KOSHIDAKA HOLDINGS Co.,
LTD. The Group does have a trading
relationship with KATO SANGYO
CO., LTD., however for the past
three years, the amount of such trade
was less than 2% of the consolidated
net sales of either the Company or
KATO SANGYO CO., LTD., andaccordingly, KATO SANGYO CO.,LTD. is not considered a major
business partner of the Company.
Mr. Watanabe serves as the directorof Kiyoshi Watanabe Certified Tax
Accountant Office. There are no
special interests between the
Company and Kiyoshi Watanabe
Certified Tax Accountant Office.

Reason for election
Mr. Moriuchi has many years ofaudit experience at major accounting
firms and auditing firms, has a wide
range of business experience and ahigh level of discernment as anaccounting expert in statutory
auditing, international operations,
support for new listings, etc., and heoversees auditing at the Company
with a high degree of independence
and from a broad perspective.

Mr. Watanabe has many years ofbusiness experience as a certified tax
accountant and management
consultant, and a high level ofdiscernment as a tax specialist, andhe oversees auditing at the Company
with a high degree of independence
and from a broad perspective.
Ms. Ishihara is currently working for Ms. Ishihara has long-standing
OH-EBASHI LPC & PARTNERS,
experience as an attorney and a highto which the Group commissions
level of discernment as a legal
business. The Group receives legal
expert. She also has profound insightwith respect to corporate
advice as required from lawyers ofmanagement, gained through her
this office other than Ms. Mayumi
Ishihara, but no advisory agreement experience as Outside Director atvarious companies (including being
has been entered into between the
an Audit and Supervisory Committee
Company and said law office.
Moreover, the total annual fees paid Member).
to said law office by the Group isimmaterial, not exceeding 2% of theannual sales amount of either saidlaw office or the Group, and there
are no special interests involved.
There are no special interests
between the Group and otherorganizations where she holds
significant concurrent positions.

[Independent officers]
Number of independent officers

7

Matters relating to Independent Officers―[Incentives]
Status of implementation of measures related toincentives granted to directors

Introduction of a performance-based compensation
program

Supplemental explanation for this item
As part of our transition to a holding company structure effective January 21, 2017, we introduced aperformance-based incentive program that awards Company shares in proportion to the extent to which
performance targets are achieved in an effort to contribute to the Group’s sustained growth and increased
corporate value over the medium and long term.
At the 47th Annual General Meeting of Shareholders on April 15, 2022, we put forward a proposal tocontinue the performance-based incentive program (the trusteed performance-based stock compensation
system) with a partial change, to be decided upon.
Individuals who are eligible to receive stock
option grants
Supplemental explanation for this item―
[Director compensation]
Status of disclosure of individual directors’
We do not disclose individual directors’ compensation.
compensation

Supplemental explanation for this item
Total compensation by officer type and compensation type; number of included officers
Directors (excluding outside directors) 3 170 million yen(basic compensation: 129 million yen; performance-based
bonus: 19 million yen; restricted stock compensation: 2
million yen; Trust-type stock compensation: 18 million yen)
Corporate auditors (excluding external 2 16 million yen
auditors)(basic compensation: 16 million yen)
Outside directors
4 24 million yen(basic compensation: 24 million yen)
External auditors
3 17 million yen(basic compensation: 17 million yen)
Policies on amount of compensation or the
method used to calculate compensation

Yes

Information disclosed about policies on amount of compensation or the method used to calculatecompensation

The 16th Annual General Meeting of Shareholders imposed a limit of 280 million yen per year on director
compensation (not including the portion of compensation paid as employee salary) on April 18, 1991, whilethe 32nd General Meeting of Shareholders imposed a limit of 40 million yen per year on auditor
compensation on April 18, 2007.
Decision-making policies for compensation for directors and other matters was decided at a Board of
Directors meeting on March 4, 2022, and are as follows: Policies on amount of compensation and the method used to calculate compensation<1> Basic policy
Remuneration, etc. of the Company’s Directors shall be designed based on the following basic policy.
 Should raise awareness of the need to contribute to the realization of sustainable growth and theenhancement of corporate value over the medium to long term.
 Consideration should be given to the balance between public standards and the business environment,
management details, and employee bonuses.
 When determining the remuneration of individual Directors, the level of remuneration should beappropriate, taking into account the level of achievement, importance and expectations of medium- tolong-term strategies, based on the responsibilities of each position.
 Should be competitive as an incentive to recruit talented professionals.
 Remuneration for Executive Directors shall consist of basic remuneration, performance-based bonuses
that mainly reflect single-year performance, and stock-based remuneration as medium- to long-term
incentives. Outside Directors, who are responsible for supervisory functions, shall be paid only basic
remuneration in light of their duties.
 To be reviewed regularly.
<2> Composition and percentage breakdown, etc.
(1) Composition, timing of payment, and percentage of each remuneration amount
Monetary
compensation
Non-monetarycompensation(Stock-based
compensation)

Type
Fixed
Performance-based
Fixed
Performance-based

Basic compensation
Bonus
Restricted share-based
compensation
Trust-type stockbased compensation

Payment timing
Once a month
Once a year
Once a year

Breakdown
Approx. 60%
Approx. 30%
Approx. 10%

At the time of
Directors’ retirement(2) Basic compensation
The amount shall be determined based on the position, responsibilities, and years of service, taking into
consideration the level of other companies, the Company’s business performance, and the level of
employee salaries, and shall be paid as monthly remuneration at one-twelfth of the fixed amount.
(3) Bonuses
The amount determined by multiplying basic remuneration by a coefficient corresponding to the degreeof achievement of business results in the previous fiscal year will be paid at a certain time each year. This
calculation method will be applied to bonuses to be paid in the fiscal year beginning on January 21, 2022.
The performance indicators used for the calculation are as shown in the table below.

Normal fiscal year

1.

Consolidated net sales

2.

Consolidated operating profit

In FY2026, the degree of achievement of the Mid-Term Business Plan shall be taken into account.
(4) Trust-type stock-based compensation
Points obtained by multiplying the basic points according to position by a coefficient calculated
according to the level of achievement of business results are awarded at a certain time each year, and theCompany shall provide all Directors, etc. of the Group with the number of the Company’s sharescorresponding to the points upon retirement from office.
The performance indicators used for the calculation are as shown in the table below.
Normal fiscal year

1.

Consolidated net sales

2.

Consolidated operating profit

In FY2026, the degree of achievement of the Mid-Term Business Plan shall be taken into account.
(5) Restricted share-based compensation
The number of the Company’s shares corresponding to position will be delivered at a certain time eachyear. In principle, the Transfer Restriction Period shall be until retirement from office for Directors, etc.
(Executive Directors or Executive Officers, the same below).
<3> Determination process
Individual remuneration, etc. shall be determined by resolution of the Board of Directors within the scopeof the resolution passed at the General Meeting of Shareholders. Decisions by the Board of Directors shall
include performance indicators and their coefficients used in the calculation of performance-based
remuneration and non-monetary compensation, as well as criteria by position. The determination of theamount of basic remuneration and bonuses for each Director shall be delegated to the President andRepresentative Director by resolution of the Board of Directors.
In making these decisions and revising this Policy, the Nominating and Compensation Committee, which
consists of a majority of independent Outside Directors, shall report in advance, and the Board of Directors
and the President and Representative Director shall respect said report.
[Support structures for outside directors (external auditors)]
・We have structures in place that allow staff members in the Corporate Strategy Department to assist
outside directors, and staff members tasked with supporting auditors to assist outside corporate auditors.
Enhancing the extent to which information is provided to outside directors and outside corporate auditors
is an essential precondition for sound debate by the Board of Directors, and we’re working to further
enhance our capabilities in this regard based on the results of Board of Directors evaluations.

2. Information related to functions such as operations, audits and oversight, director and auditor
nominations, and determination of compensation(overview of current corporate governance structures)
The purposes and roles of the Company’s governance structures are described below. A diagram illustrating
the overall system can be found on the last page of this report.
Board of Directors
The Board of Directors holds a regular meeting once a month, and meets irregularly as necessary, tomake decisions about matters required by Japanese law and the Company’s Articles of Incorporation as
well as about important matters related to the its operations. Four of the seven seats are occupied byoutside directors (as of April 17, 2024), whose function is to increase accountability of the executive teamand enhance transparency by offering advice concerning the Company’s management and to provide
oversight from an independent perspective.
The Board’s membership is as follows:
Tomiya Takamatsu (chairperson: president), Naoki Tonokatsu (director and corporate officer), Naoyuki
Nishiyama (director and corporate officer), Masataka Inoue (outside director), Michiaki Kurihara (outside
director), Junko Kawano (outside director) and Mina Ito (outside director)

Kansayaku Board
The Kansayaku Board in principle meets once a month to hear reports on important matters concerning
audits, deliberate related matters, and make associated decisions. Auditors are responsible for establishingeffective governance structures to secure the robust, sustained growth of the Company while earning thetrust of stakeholders throughout society by overseeing directors’ execution of their responsibilities as partof an independent entity with a mandate from shareholders. To that end, they attend important company
meetings, including Board of Directors meetings, accept and verify the accuracy of reports from directors,
employees, accounting auditors, and others, and investigate the status of the Company’s operations andfinancial standing while taking such steps as necessary in response, for example by expressing their views
to directors and employees through advice and recommendations from an independent perspective andprohibiting problematic conduct by directors.
The Board’s membership as is follows:
Naokazu Hasegawa (chairperson: full-time corporate auditor), Shigeyuki Moriuchi (external auditor),
Kiyoshi Watanabe (external auditor) and Mayumi Ishihara (external auditor)

Nominating and Compensation Committee
The Nominating and Compensation Committee, which was established to strengthen the independence,
objectivity, and accountability with which the Board carries out its functions by empowering it to involve,
and obtain advice from, independent outside directors in an appropriate manner, particularly when
considering important matters such as the nomination and remuneration, meets at least once a year.
Its chairperson and members are as follows:
Junko Kawano (chairperson: outside director),Masataka Inoue (member: independent outside director),
Michiaki Kurihara (member: independent outside director), Mina Ito (member: outside director) andTomiya Takamatsu (member: president and representative director)

Management Meeting
The Management Meeting, which serves as an advisory body for the president by proposing policies andplans related to the overall management of the Company and by investigating, researching, planning,
managing, communicating, and coordinating the same, meets regularly to discuss and make decisions
related to decision-making by the president and other fundamentally important management matters and tohear reports on important matters related to the Company’s management.
The Meeting’s membership is as follows:
Tomiya Takamatsu (chairperson: president), Naoki Tonokatsu (director and corporate officer), Naokazu
Hasegawa (corporate officer), Akikazu Hamanaka (corporate officer), Mamoru Mitamura (corporate
officer), Takanori Nakashima (corporate officer), Makoto Miyachi (corporate officer), Yutaka Wada
(corporate officer), Makiko Mihara (General Manager of Corporate Communication Department)

Group Risk Committee
The Group Risk Committee, which is chaired by the president, consists of members appointed by its
chairperson. It meets twice a year, and at other times as necessary, to consider and approve the Group’s
overall risk management policy, to consider and approve the results of companywide risk assessments,
to adopt risk countermeasures and issue instructions for corrective action, and to inspect and improve
the Company’s overall approach to risk management.

Group Sustainability Committee
The Group Sustainability Committee, which is chaired by the president, consists of members
appointed by its chairperson. It meets twice a year, and at other times as necessary, to increase the valueof the Group’s corporate brand by considering and approving the Group’s overall sustainability
management policy and important sustainability issues (materiality), by adopting the companywide
sustainability program, and by issuing instructions for improvements.

Advisory Board
The Advisory Board, which consists of roughly three outside experts not currently serving as outside
directors or external auditors, embodies a voluntary mechanism by the Company to further enhance its
corporate governance. It meets from time to time as necessary to offer the president assessments andadvice from an objective perspective concerning issues that demand a high level of specialized
knowledge, for example investment decisions related to the orphan drug business, and to further boost
the transparency of the Company’s management by incorporating outside perspectives into the
execution of strategy, for example by offering advice concerning management issues faced by theGroup.
3. Reasons for Selecting the Current Corporate Governance System
We consider transparency, fairness, and equitability in decision-making to be integral factors in ensuring theeffectiveness of our corporate governance. To that end, we elected to adopt “company with auditors” statusunder Japanese corporate law, which essentially means that we appoint corporate auditors who have theauthority to audit the directors’ execution of their duties. Three of our four corporate auditors are independentof the company (three of which are independent outside corporate auditors), which underscores ourdedication to maintaining robust, objective oversight. Additionally, we appointed two independent directors
in April 2014 in order to bring an outside perspective to the Company’s management and further strengthen
the Board’s oversight of directors’ execution of their responsibilities. Currently, four of the Board’s sevenpositions are held by outside individuals, reflecting the Board’s commitment to heightening theaccountability of the Company’s executive leadership and further improving transparency. We are also
making progress on appointing outside directors with diverse backgrounds in line with the development ofmanagement strategy and changes in society.
In addition, we adopted an executive officer system in March 2012. By delegating the authority andresponsibility for discrete parts of the organization to executive officers, not only are we able to keep abreastof changes in the market environment, but we can also maintain a clearer line to customer and stakeholder
feedback, which can then be reflected in our business management.
A diagram illustrating our corporate governance system can be found on the final page of this report.

III. Status of implementation of measures related to shareholders and other interested
parties
1. Status of initiatives to ensure the relevance and engagement of the General Meeting of Shareholders andfacilitate the exercise of voting rights
Supplemental explanation
Early mailing of notices of the
convocation of the General Meetingof Shareholders

Notices of the convocation of the 49th Annual General Meeting of
Shareholders (which convened on April 16, 2024) were mailed on
March 26, 2024. In addition, notices of convocation are publishedon the Company’s website as well as the websites of the Tokyo
Stock Exchange and ICJ in advance of mailed notices. (March 19,2024)

Scheduling of General Meeting of
Shareholders sessions so as to avoid
conflicts with other such meetings

Our fiscal year ends on January 20, so our scheduling of theGeneral Meeting of Shareholders does not conflict with similar
meetings at other companies.

Exercise of voting rights via
electromagnetic methods

We introduced the ability for shareholders to exercise voting rights
via the Internet, making it possible to vote using a computer,mobile phone, or smartphone.

Participation in electronic voting
platforms and other initiatives toimprove institutional investors’ability to exercise their voting rights
Translation of notices of convocation(summaries) into English

We began participating in the Electronic Voting Platform operated
by ICJ, Inc., and investors can use that platform to cast their votes.
We began translating part of our notices of convocation (including
the text of measures being considered by the body) into English,
and we publish that translation on the Company’s website as wellas the websites of the Tokyo Stock Exchange and ICJ.

2. Status of IR activities
Supplemental explanation
Establishment andpublication of adisclosure policy

Explanationby president

We have established a Disclosure policy, and the policy is
published on the Company’s website.

Regular briefings for
personal investors

We offer online briefings for individual investors. Each such
briefing addresses a different theme, and an archive of recent
briefings can be found on the “For Individual Investors” pageof the Company’s website (Japanese only).

Yes

Regular briefings foranalysists andinstitutional investors

Our president holds briefings and small meetings foranalysts and institutional investors at the end of the fiscal
year and at the end of the second quarter.
We also provide video, transcripts of briefings, and asummary of the Company’s responses to investor questions
on the Company’s website soon after the briefings are held.

YesSupplemental explanation
Publication of IR
materials on the website

We make a range of information for investors available on the
Company’s website, including financial bulletins, securities
reports, and shareholder notices (in Japanese only) as well as
financial results materials, monthly sales reports, notices ofconvocation of the General Meeting of Shareholders, noticesof measures adopted by the General Meeting of Shareholders,integrated reports, and IR news releases (in both Japanese andEnglish).
English translations of financial results materials, monthly
sales reports, and IR news releases are made available at thesame time as the Japanese originals.
In addition, our website includes pages for individual
investors as well as English-language pages to facilitate adeeper understanding of the Company.

Establishment of an IR
department (coordinator)

We have established an IR Group as part of the Corporate
Communication Department.

Other

We publish DyDo official shareholder newsletter twice yearly(Japanese only) as a tool for communicating withshareholders. Additionally, the “For Individual Investors”
page of the Company’s website introduces initiatives being
undertaken by group companies through field report videos(Japanese only).

Explanationby president

3. Status of initiatives related to respect for the viewpoints of stakeholders
Supplemental explanation
Internal andother rules
concerning
respect for the
viewpoints ofstakeholders

Our Group Corporate Philosophy (“Creating happiness and prosperity, together withpeople and with society. To achieve this goal, the DyDo Group will continue to embrace
new challenges in a dynamic way.”) carries on the spirit of striving to achieve happinessand prosperity together that the Group has cultivated since its founding. We haveestablished a CSR Policy to give shape to that philosophy by setting forth our basic
stance toward stakeholders.
<CSR Policy>
Based on our group philosophy of “striving to achieve happiness and prosperity together
with people and society as a whole,” we are incorporating the voices of our stakeholders
into our management and contributing to the realization of an active and enrichedsociety.
For our customers“Always offering high quality with added surprise!”
Delivering joy and wonder, as well as safety and reliability.
For our employees“Offering a dynamic workplace and the fulfilling joy of achievement!”
Ensuring effective communication within the company and developing humanresources ready to face challenges.
For our business partners“Taking on the challenge of the next stage of growth together!”
Sharing our management vision and strategies while deepening the bonds of trustwith our business partners.
For society“Emphasizing the importance of the bonds between people and society!”
Contributing to the vitality of local society through our business operations andcommunity activities.
For our shareholders“For continued growth in corporate value!”
Realizing stable returns through a sound governance system.

In 2019, the Group adopted the Group Mission 2030, which summarizes its
vision for 2030 as “For DyDo Group to create enjoyable, healthy lifestyles forpeople around the world.” We see our mission as contributing to theachievement of the future envisioned by the SDGs through our businesses,
which will facilitate a sustainable society that will in turn make possible oursustained growth. The spirit of striving to achieve happiness and prosperity
together dove-tails perfectly with the SDG principle of “leaving no one
behind.” We also announced the DyDo Group SDGs Declaration in January
2021 in an effort to redouble our pursuit of the SDGs. As we strive to advancethese initiatives and spur innovation to prepare for the next generation, it willbe critical for each and every employee to behave in a way that accords withshared values based on the Group Philosophy and Group Vision and to pursue
partnerships with a variety of stakeholders. As we look towards 2030, we will
strive to contribute to the realization of a sustainable society in which thepeople of the world can live happy, healthy lives and to achieve the Group’s
sustained growth and improve its corporate value over the medium and longterm by creating social, environmental, and economic value.
<DyDo Group SDGs Declaration>
We believe in “Creating happiness and prosperity, together with people and withsociety” as the company’s philosophy. This Philosophy expresses the spirit of “striving
to achieve happiness and prosperity together” that has been with us since our founding.
This spirit is an accurate representation of our culture and applicable to SDGs
principle “Leave no one behind”.
We have established the Group Mission 2030 to clarify our objectives for the year
2030 in line with our business policy, “For DyDo Group to create enjoyable, healthy
lifestyles for people around the world.” Our mission is to contribute to SDGs throughour business activities
We will contribute to SDGs and realize the sustainable society in which people all over
the world have their enjoyable and healthy lives for 2030.
Implementationofenvironmental
protection
activities, CSR
activities, etc.

In line with the DyDo Group Corporate Philosophy—“Creating happiness andprosperity, together with people and with society. To achieve this goal, the DyDo
Group will continue to embrace new challenges in a dynamic way”—we haveidentified major issues (hereafter referred to as material issues) as we work toward
Group Mission 2030 and the ideals for 2030 that it outlines. In terms of material issues
that relate to the environment, we chose contributing to decarbonization and arecycling-oriented society, and to that decarbonization end we have set ourselves thefollowing Group targets:- We will aim to make emissions (Scope 1 and 2) by the Domestic Beverage
Business*1 carbon neutral by 2030
- We will aim to cut CO2 emissions (Scope 1 and 2) for major Japanese groupsubsidiaries*2 by half*3 compared to 2020 levels by 2030
- We will aim to make our vending machine business carbon neutral by 2050 (for both
direct emissions and through generating the electricity the machines use*4)* 1 DyDo DRINCO, DyDo Beverage Service, and DyDo Business Service* 2 DyDo DRINCO, DyDo Beverage Service, and DyDo Business Service, DAIDO Yakuhin,
TARAMI corporation* 3 Calculated by dividing the total emissions for relevant group companies by total sales*4 CO2 emissions produced by vending machines operated by DyDo Beverage Service (Scope 3)

The Group recognizes that addressing environmental issues such as climate change
and resource depletion in accordance with its philosophy of “creating happiness andprosperity, together with people and with society” is a top management priority, andwe’re striving to ensure we can pass on a beautiful Earth and rich, dynamic society to
the next generation by implementing the PDCA cycle for an integrated management
system in which the environment is a central consideration. We consider effective use

of limited resources to be an essential part of realizing a sustainable society, and ourapproach to environmental responsibility consists of working towards a recyclingbased society. In our Domestic Beverage Business, we’re working to realize a society
founded on resource recycling by establishing an empty container recycling rate of
100%, a sustainable plastic container usage rate or 60%, and an average vending
machine service life of 15 years as quantitative targets to be achieved by 2030. We willcontinue to strive to build a recycling-based society by working with employees andother stakeholders to ensure resources are used effectively at every important point in
the supply chain.
In addition, we have established the Community Support Fund with the goal of
implementing an ongoing program of community service in order to help realize richand fulfilling local communities through the Group’s development. We adopted an
approach that appropriates surplus earnings in this manner so that the fund could go
beyond temporary assistance to offer support over the medium and long term in a waythat would not be affected by our business performance in any given fiscal year.
Furthermore, we support Japanese “MATSURI” Festivals as a way to forge connections
with local residents and reinvigorate regional society through festivals. By joining handswith local residents and local governments, we will continue to help build vibrantcommunities. We provide information about specific CSR initiatives on behalf of all
stakeholders, including our customers, employees, business partners, shareholders, andsociety as a whole to the general public via our website and other means.

Measures suchas policies
related to
information
disclosure to
stakeholders

We have adopted the following Disclosure policies:
1. IR Action Policy and Goals
DyDo Group Holdings strives to achieve happiness and prosperity together with people
and society as a whole. Under this group philosophy, we actively undertake two-way
communication with all our stakeholders, including our shareholders and investors. This
increases understanding of our group and incorporates the voices of our stakeholders asfeedback to our management, enabling us to gain a correct appreciation of our corporate
value as we aim to be a trustworthy company.
2. Promoting Constructive Dialog
DyDo Group Holdings strives to achieve sustained growth and increased corporate value
over the medium and long term by promoting constructive dialog with stakeholders. By
giving overall responsibility for dialog with stakeholders to the president and having thegeneral manager of the Corporate Communications Department (Information
Management Officer) pursue dialog with specific purposes, the Company strives to build
trust with structures that bring stakeholder voices to bear on its management.
3. Information Disclosure Policy
DyDo Group Holdings aims to provide information rapidly, on the basis of transparency,
fairness, and continuity, to all our stakeholders, including our shareholders andinvestors. This information includes financial information about topics such as theGroup’s financial condition and management results as well as non-financial
information about topics such as management strategies and issues, risks, andgovernance. In addition to information disclosure in accordance with the Companies
Act, the Financial Instruments and Exchange Act and other laws, plus the Timely
Disclosure Rules of the Tokyo Stock Exchange (TSE), we also strive to disclose
information proactively and candidly as far as possible as we believe this will beeffective for generating a deeper understanding of the DyDo Group.
In addition, we treat information that is subject to insider trading regulations andfinalized information about the Group’s financial performance prior to its release asimportant information, which we do not disclose on a selective basis to transaction
parties*.
* As defined by Article 27 Paragraph 36 Item 1 of the Financial Instruments andExchange Act, including financial instruments business operators as well as otherentities that are likely to be involved in certain transactions, including the purchaseand sale of securities.
4. Important Information and Means of Information Disclosure
DyDo Group Holdings takes into consideration the precise candid communication of
information by appropriate methods in accordance with the importance and urgency ofsuch, for vital information under the Timely Disclosure Rules of the TSE plus also
information not required under those rules but which could have a marked effect on the
judgment of investors.
For vital information DyDo Group Holdings believes should be disclosed, we first
explain it to the TSE, and register it publicly under the TSE Timely Disclosure network(TDnet). Immediately after registering it on TDnet we also provide the same information
to news organizations, and post the same documentation on our website without delay.
In the event Information Management Officer determines that an officer of the Company
or any employee whose responsibilities include communicating information totransaction parties has unintentionally divulged important information, Information
Management Officer will immediately report the incident to the president and makepublic the information in question in accordance with a predetermined procedure. If it
is determined that it would not be appropriate to disclose the divulged information, we
will take action as appropriate, for example by foregoing its disclosure on condition thatthe party who received the information agree to maintain its confidentiality and not tobuy or sell any shares of the Company’s stock until such time as the information inquestion can be disclosed.

5. Improving the Fairness of Information Access
DyDo Group Holdings works actively to disclose information through its website inorder to ensure stakeholders enjoy fair access to information.
In addition to disclosing important information on the Company’s website for at least
one year, we strive to disclose information that we determine should be shared withprivate investors and information that we believe would be useful in making investment
decisions in an easy-to-understand manner, for example by summarizing the informationand presenting it during question-and-answer sessions at financial briefings.
6. Matters Concerning Performance Forecasts and Future Predictions
The plans, future projections and strategies for the DyDo Group stated in the materials
we disclose, with the exception of past or current facts, are projections of our future
performance, and are based on the judgment and postulations of our management team
based on the information available at the present time. Accordingly, the actual
performance may differ greatly from these due to unforeseen factors, the economic
situation and other risks.
7. Quiet Period
To protect against leakage of important information such as finalized information about
the Company’s financial performance prior to its release and to ensure fairness, we haveset a “Quiet Period” for the thirty days prior to the financial results announcement(including for quarterly results; same below), where we refrain from answering orcommenting on any queries relating to the financial results. During the quiet period wealso refrain from holding press conferences or having individual meetings with analysts
or institutional investors. However, if an important fact that requires disclosure comesup during this quiet period, we will disclose such information as required based upon
the Timely Disclosure Rules and suchlike.
8. Development and Enhancement of Internal Structures
DyDo Group Holdings will operate its Disclosure Policy in a proper manner and willdevelop and enhance internal structures that facilitate cooperation among involved
departments in order to increase the level of understanding that characterizes dialog withstakeholders. DyDo Group Holdings also has internal regulations regarding rules on
insider trading and ensures their thorough operation, putting an emphasis on the
education of its officers and employees. In addition, the Audit Department regularly
monitors implementation of the Disclosure Policy and structures designed to ensure thetimely disclose of information.

Other

The Group works to cultivate a corporate culture that encourages employees toembrace challenges as a way to spur its growth as well as their own in keeping with its
Group Philosophy (“Creating happiness and prosperity, together with people and withsociety. To achieve this goal, the DyDo Group will continue to embrace newchallenges in a dynamic way.”).
Reflecting our belief that investment in “invisible assets” like human resources is a
key part of achieving sustained growth and increasing our corporate value over the
medium and long term and our commitment to facilitating a work-life synergy thatallows each and every employee to make the most of their skills and abilities while
maintaining physical and mental health, we adopted the DyDo Group Health
Declaration in 2019, and we are working to put in place an environment that fosters
employees’ awareness of their own health.
In addition to transitioning in June 2020 to a new, telework-based workstyle that gives
employees more freedom with regard to how and when they work at DyDo DRINCO,
the Group’s core company, we’ve worked to accommodate the diversification of values
as regards workstyles, for example by introducing second jobs and second job
acceptance programs in September 2020. We are responding to the diversification ofworkstyles and promoting initiatives that will aid the hiring and training of autonomous
professionals with a diverse range of knowledge, values, and skills as a way to foster
innovation.
[Basic Approach to HR]
1. Recruit diverse personnel who are prepared to boldly take on challenges and arecapable of taking responsibility for innovation.
2. Train personnel to increase knowledge and improve skills in order to create andimplement a vision and become capable of bringing about innovation.
3. Build an organizational culture and personnel system that promote an ongoinghandling of challenges.
[Pursuing health management]
In order to realize the DyDo Group Philosophy—“Creating happiness and prosperity,
together with people and with society. To achieve this goal, the DyDo Group willcontinue to embrace new challenges in a dynamic way”—we believe it is important forindividual employees to enjoy their lives while maintaining physical and mental health.
To that end, we adopted the DyDo Group Health Declaration in September 2019. Our
executive leadership is actively pursuing initiatives to maintain and improve employees’
health and to create a work environment where employees can increase their own
awareness of health while working to maintain and improve it.

[Initiatives to respect diversity]
Reflecting our respect for diversity of values that transcend gender or gender
identity/expression, sexual orientation, age, nationality, disability, and other attributes
and our belief that ensuring individual employees can make the most of their abilities
allows the company to grow in a sustained manner, we are pursuing the following
initiatives:<Promoting hiring of female employees>
The Group active hires and trains female employees as part of its commitment tosecuring a diverse workforce. At DyDo DRINCO, which is responsible for our corebusiness, the percentage of female employees is 20% (as of January 20, 2024). In the
future, we will continue to recruit ambitious women and cultivate a corporate culture
in which women find it easy to work and actively participate. Our goal is to raisethat percentage to 25% or higher by 2030, and 30% or higher at major subsidiaries*
by 2030.
*DyDo DRINCO, DAIDO Yakuhin, and Tarami

<Promoting hiring of disabled employees>
As of January 20, 2024, disabled employees made up 2.74% of our workforce of
DyDo DRINCO, Inc., which plays the leading role in the domestic beverage businessas our core business. We will continue to work to ensure that each and every employee
can build on his or her strengths and abilities while growing together with theCompany.
<Actively hiring human resources with experience living abroad>We actively hire Japanese and international students who have studied abroad andindividuals with experience working overseas in order to promote globalization.

IV. Internal control systems, etc.
1. Fundamental policies on internal control systems and status of their implementation
We have implemented the following internal control system in accordance with the Companies Act and theCompanies Act Enforcement Ordinance.
1. Frameworks to ensure that directors and employees of the corporate group comprised of the Company andthe subsidiaries of the Company (the “Group”) perform their duties in conformity with laws and regulations
and the articles of incorporation(1) The Group shares as a management philosophy its Group Philosophy and Group Vision, and toward
their realization adheres to ethical corporate behavior and principles, as exemplified in the DyDo Group
Code of Conduct.
(2) The Group establishes and maintains necessary frameworks for the maintenance and monitoring ofinternal control consistent with the scale and characteristics of the Group.
(3) The Group establishes the DyDo Group Hotline which guarantees that Group employees and corporate
officers as well as outsiders will be able to make reports on compliance matters directly and without
exposure to retaliation.
(4) The internal auditing department of the Company, in coordination with the Kansayaku Board, identifies
non-conformities and proposes improvement measures based on audits of each department's status ofcompliance with laws and regulations, the articles of incorporation, and internal regulations.
Additionally, the internal auditing department of the Company performs internal audits in accordancewith necessity and promotes the expansion of frameworks for compliance with laws and regulations at
subsidiaries.
(5) The Group maintains no transactional relationships with anti-social elements that threaten public orderand safety. The Group, in coordination with the relevant institutions, defends itself vigorously across theentire organization to prevent damages should fraudulent claims be brought against the Group.
2. Frameworks concerning the preservation and management of reports on the performance of directors'
dutiesMatters concerning reports on the performance of directors' duties are appropriately preserved andmanaged in accordance with internal regulations and shall be accessible for the perusal by directors andcorporate auditors when necessary.
3. Regulations and other frameworks for managing the risk of damages to the Group(1) The Company practices risk assessment and analysis in accordance with the fundamental regulations
for risk management, maintains and regularly convenes a risk management committee chaired by the
representative director serving as president, and engages in proactive risk management. Moreover, theCompany works in coordination with subsidiaries to unify and share information concerning the Group's
risk management and crisis management.
(2) For the case of unforeseeable events with potential to materially affect the business of the Company,
the Company establishes and maintains frameworks for the convocation of a crisis management
committee chaired by the representative director serving as president, and steps to be taken to minimize
damages and other adverse effects.
4. Frameworks to ensure that directors, etc., of the Group perform their duties in an efficient manner
All companies of the Group aim through the following measures consistent with the scale andcharacteristics of each company to achieve the efficient performance of the duties of directors.
(1) Division of duties and clarification of authorities(2) Deliberations and reporting on important management matters at board of directors' meetings convened
at regular intervals or as the need arises(3) Establishment of a management committee comprised of board directors(4) Preparation, progress management, and improvement measure implementation for consolidated midterm management plans and fiscal-year budgets

5. Matters concerning reports to the Company regarding the performance of the duties of directors, etc., of
subsidiaries
The Company, in accordance with internal regulations, establishes and maintains a department charged
with the coordination of and control over its subsidiaries and the reporting to subsidiaries on the status ofexecution of operations.
6. Matters concerning employees whose deployment is requested by corporate auditors to support theirduties, matters concerning the independence of such employees from directors, and matters for ensuring
the effectiveness of instructions issued by corporate auditors to such employees(1) Upon request of the corporate auditors to have employees deployed to support their duties, theCompany deploys employees equipped with the capabilities and knowledge necessary to support
corporate auditors and confers upon the corporate auditors the right of command over such employees.
(2) Corporate auditors shall be able to obtain from the director responsible for human resources in advancereports on personnel transfers and personnel assessments with respect to the employees whose support
the corporate auditors request, and shall be able, based on reasons to be stated, to request of the director
responsible for human resources changes to such personnel transfers.
(3) The director responsible for human resources shall for disciplinary measures, etc., against subject
employees obtain the advance approval of the corporate auditors.
7. Frameworks for reports to corporate auditors and frameworks to prevent retaliation against persons who
have reported to corporate auditors(1) Through attendance at the meetings of the board of directors and meetings of other importantdeliberative bodies such as the management committee, etc., of the Company, the standing corporate
auditor shall receive timely reports on important information concerning the Group. Moreover, the risk
management department and the legal affairs department shall at regular intervals report on theirrespective duties to the corporate auditors.
(2) In addition to item (1) above, Group directors, corporate auditors, and employees, etc., shall promptly
report to the corporate auditors any matters that affect or threaten to affect the Group in a significant
way.
(3) The internal auditing department shares the results of internal audits of the Group with the Kansayaku
Board.
(4) Persons who have reported a compliance issue to corporate auditors are protected against retaliation on
grounds of such reporting. If a person who has reported a compliance issue is found to have been
retaliated against, appropriate steps are promptly taken to remove the retaliatory measures.
8. Procedures for advances or reimbursement of costs that arise in connection with the performance of theduties of corporate auditors and matters concerning policies for the treatment of other costs and obligations
that arise from the performance of such duties
Advances or reimbursements, etc., claimed by corporate auditors related to expenses that arise in theexecution of their duties are settled promptly unless found unnecessary for the execution of the duties ofthe subject corporate auditor.
9. Other frameworks to ensure the effective execution of audits of corporate auditors
To ensure appropriate communication and effective audit execution, corporate auditors maintain close
contact with the internal auditing department, the accounting auditor, and the corporate auditors ofsubsidiaries, and meet at regular intervals for exchanges of opinion with the representative director serving
as president.
10. Frameworks to ensure the reliability of financial reporting
The Group maintains, operates, and assesses continuously its frameworks for the effective andappropriate internal control concerning financial reporting in accordance with the Financial Instruments
and Exchange Act and other laws and regulations and works to ensure the reliability and appropriatenessof financial reporting.

2. Basic approach to the elimination of antisocial forces and status of its implementation
Our basic approach to implementing internal control systems includes the following commitment: “We will
avoid entering into any relationship, business-related or otherwise, with antisocial forces that threaten orderor safety in civil society. In the event that an individual or group associated with antisocial forces makes
illegal demands of the Company, we will work with the authorities to prevent any damage from thosedemands while marshalling all of the organization’s resources to face them with a resolute attitude.” The
DyDo Group Code of Conduct, which sets forth a specific code of conduct concerning compliance, also
includes a similarly explicit statement, and we strive continually to raise awareness of our position withregard to antisocial forces.

V.

Other

1. Introduction of takeover defense measures
Introduction of takeover defense measures

Yes

Supplemental explanation for this item
We adopted a “Basic Policy Regarding Who Should Oversee Decisions Regarding the Financial andBusiness Policies of the Company” at a Board of Directors meeting held on January 15, 2008. That
meeting approved a resolution entitled “Measures to Respond to Large-Scale Acquisition of Our
Company’s Stock (Takeover Defense Measures),” which was then approved by the Annual General
Meeting of Shareholders held on April 16, 2008.
We have continued to study the nature of those measures following their introduction based on changes
in social and economic conditions, various trends and discussions concerning takeover defense
measures, core principles of Japan’s Corporate Governance Code, and other factors as part of our efforts
to maintain and increase corporate value and the common benefit of shareholders. As a result, weconcluded that it would be essential to continue to address the risk of large-scale purchases of company
shares as part of our efforts to achieve sustained growth and to increase corporate value over the
medium and long term while pursuing mutually beneficial relationships with all stakeholders, including
customers, employees, business partners, local communities, and shareholders, in keeping with our
Basic Approach to Corporate Governance. Reflecting this conclusion, the Board of Directors, including
our four outside directors, unanimously approved the continuation of this plan (“the Plan”) on March 3,2023, and it was subsequently approved by the 48th Annual General Meeting of Shareholders.
In terms of whether we should accept a bid by a large-scale purchaser for large-scale acquisition of ourCompany’s stock, bearing in mind that the final decision should be left to the shareholders, with regard
to acquisition attempts that would seek to contribute to the management of the Company, the Company
shall not categorically reject all such acquisition attempts if they would greatly increase the corporate
value of the Company.
The purpose of the large-scale acquisition rules laid out in the Plan regarding the large-scaleacquisition of our Company’s stock is to provide to you, our shareholders, the information that you needto determine whether or not a large-scale acquisition bid should be accepted, and to advise you of theopinions of the members of the Board of Directors who are presently engaged in the management of theCompany, in order to ensure that you have the opportunity to learn about any alternate plans. Currently,
although there are some measures in place to control the abusive acquisition of stocks under the
Financial Instruments and Exchange Act, it is conceivable that there are cases in which the law is notalways effective. For example, when it is not possible to legally secure the time to submit and consider
information prior to the commencement of a takeover bid or to restrict buying-up in the market.
Therefore, we believe that establishing large-scale acquisition rules will form the basis on which you,our shareholders and investors, can make appropriate investment decisions, and that securing adequate
time can be an effective means of facilitating constructive dialogue between shareholders andprospective large-scale purchasers who have the potential to improve corporate value.
In line with our corporate philosophy—“Creating happiness and prosperity, together with people andwith society. To achieve this goal, the DyDo Group will continue to embrace new challenges in a
dynamic way.”—we have set ourselves Group Mission 2030—“For DyDo Group to create enjoyable,
healthy lifestyles for people around the world.”—to explain where, and what, we want to be by the year
2030. Our aim is to contribute to making society more sustainable so that people around the world canenjoy their lives in good health, and to create social, environmental, and economic value throughsustained growth and enhance corporate value in the medium and long term. However, should a numberof shares equivalent to 20% or more of our shares outstanding be bought up, this would have a major
impact on our management, and we may no longer be able to swiftly implement corporate measures
aimed at enhancing corporate value. Also, considering factors such as the quorum and ratios of voting
rights, it could also have a major impact on special resolutions at the General Meeting of Shareholders.

Although the founder-related people own some shares as major shareholder, many of our shareholders
are private investors and are from a wide range of backgrounds. With the exception of the President of
the Company, Tomiya Takamatsu, none of the founder-related shareholders are presently involved in the
management of the Company, and as voting rights are executed at the discretion of each individual,
there is no difference in terms of position between them and general shareholders. In light of the above,
there is always the possibility that a large-scale acquisition may occur that will have a negative impact
on the corporate value of the Group and be contrary to the best interests of shareholders. The following
are but two examples.
(1) The domestic beverage business is our core business and we have one of the industry’s mostextensive networks of vending machines, located throughout Japan, which makes us a prominent
player in the industry. Recently, there have been cases where the value of vending machine
businesses has been highly appraised for their merger and acquisition potential in the beverageindustry, and there is the possibility that a large-scale purchaser may focus on the large number ofvending machines that we hold and we may face the threat of a hostile takeover that does not havean increase in the mid-to-long term corporate value of the Company in mind.
(2) On the other hand, our Group’s proprietary vending machine business model is built on a mutual
relationship of trust with and among stakeholders. This is particularly evident in the operation of
our network of vending machines - one of the most extensive in the industry - which is run together
and directly by the employees of our Group and the employees of “Kyoeikai” (the vending
machine operator that deals with our products), making it heavily reliant on personnel. Dependingon the policy of a large-scale purchaser, a change in management policy may cause both groups of
employees to feel insecure or cautious, which may lead to resistance or loss of support, resulting ina drop in the quality of the vending machine business, with the resulting huge loss of popular (highsales throughput) vending machine sites, causing reduced cash flow capacity as well as a decline in
the mid-to-long term corporate value of the Company.
As discussed above, continuing to have large-scale acquisition rules is necessary and indispensable toachieve sustainable growth and enhance the corporate value of the Company over the medium and longterm. Considering the characteristics of the Group’s unique vending machine business model, it has
been determined that always being prepared for unexpected situations by continuing the Plan is a
responsibility of the Board of Directors.
2. Other matters related to corporate governance structures, etc.
Overview of structures designed to ensure timely disclosure of information
Since our listing on the First Section of the Tokyo Stock Exchange in August 2001, we have endeavoredto make employees aware of the importance of disclosing information about the Company and its
operations in a timely manner, to promote the centralization and sharing of information, and to make suchinformation available in a timely and accurate manner.
When the Company’s departments or Group companies become aware of material information, they
immediately report that information to the Corporate Communication Department, which has
responsibility for information disclosure. The general manager of the department, who is broadly
responsible for the management of information at the Company, then determines whether that information
should be disclosed in a timely manner and, if so, obtains approval from the president and makes it
available to stakeholders without delay once it has been reported to, and discussed by, the Board of
Directors and Management Meeting. Urgent information that requires immediate disclosure can be madeavailable to stakeholders immediately, without prior reporting to, or discussion by, the Board of Directors
and Management Meeting, at the president’s discretion.
In addition to offering his views on information disclosure to the Board of Directors and Management
Meeting, the general manager of the Corporate Communication Department reports on information thatshould be disclosed, the process by which such disclosure is accomplished, and its results. He also attends
important meetings at Group companies, for example subsidiaries’ Boards of Directors, and works tomaintain an understanding of material information. In addition to orchestrating the actual release of
information, the Corporate Communication Department’s IR Group gathers information from inside andoutside the company and reports that information to the general manager of the Corporate Communication
Department, along with their associated views.
Full-time auditors maintain an understanding of material information by attending meetings of the Boardof Directors and Management Meeting as well as other important meetings and review structures related to
information gathering and disclosure.

Overview of corporate governance structures

Outline of the Timely Disclosure