Corporate Governance Report
Last Update: July 12, 2024

TOKAI Holdings Corporation
Katsuo Oguri, President & CEO
Contact: Administrative Management Dept., (+81-54-275-0007)
Securities Code: 3167
https://tokaiholdings.co.jp/english/

The corporate governance of TOKAI Holdings Corporation (the “Company”) is described below.

I.

Basic Views on Corporate Governance, Capital Structure, Corporate Attributes and Other
Basic Information

1. Basic Views
1. The Company is committed to enhancing its corporate governance in accordance with the following basic
concepts from the perspective of helping the Group to achieve sustainable growth and increase its corporate
value over the mid to long term. The aim is to implement sound management based on a high level ofself-discipline to gain the strong trust of society:(1) The Company will create and maintain an environment that secures substantive equality of allshareholders and enables shareholders to properly exercise their rights.
(2) The Company is primarily engaged in the business of providing individual customers with basic
infrastructure services for daily life including energy, telecommunication and CATV, and recognizes that mostof these businesses are supported by many stakeholders. In addition, in formulating, implementing andoperating business policies, we will conduct business activities from the perspective of compliance while
focusing on making a contribution to the local communities.
(3) The Company will work to ensure the adequate disclosure of company information including
non-financial information and transparency in business management in order to establish a foundation for
constructive dialogue with stakeholders.
(4) The Company will, as a holding company, seek to ensure the effectiveness of supervisory functions overthe business execution of each group company by the board of directors, formulate mid- to long-term
corporate strategies, and strive for sustainable growth and an increase in corporate value; and(5) The Company will proactively have dialogues with shareholders and investors with a constructive purpose
while explaining and disclosing quantitative financial information and non-financial information in a timely
and adequate manner. In this way, we will achieve corporate accountability and strive to meet the expectationsof stakeholders including shareholders and investors.
2. The Group has formulated the “TOKAY-WAY,” the common philosophy of the group, and it is comprisedof four layers—the corporate philosophy, mission, vision and value. These are shared with all employees of
the group who work to practice them.
3. Our group has established a common corporate message, 'We face challenges with open minds to bringmore smiles to life and joy in society.' and a corporate slogan, 'More smiles for a better life.' As a unitedcompany, we aim to enhance corporate value and achieve sustainable growth.
[Reasons for Non-compliance with the Principles of the Corporate Governance Code]
The Company respects the gist of the Corporate Governance Code and implements all items.

-1-[Disclosure Based on the Principles of the Corporate Governance Code] Updated
1-4 (Cross-Shareholding)
For the Policy for Cross-Holding of Shares and Other Equity, please see Article 11 of the Basic Policy on
Corporate Governance.
(https://tokaiholdings.co.jp/english/ir/management/pdf/cgc_20211222_e.pdf)
1-7 (Related Party Transaction)
For the System to Control Related Party Transactions, please see Article 10 of the Basic Policy on Corporate
Governance.
(https://tokaiholdings.co.jp/english/ir/management/pdf/cgc_20211222_e.pdf)
2-4-1 (Appointment of core human resources, etc.)
The Group advocates diversity management and aims to be a company where diverse human resources canplay an active role regardless of gender, nationality, age, hiring form, etc.
<Appointment of female managers>
Regarding the promotion of women's active participation, we are working not only to create an environment
where everyone can work comfortably by enhancing various personnel systems, but also to enable female
employees to demonstrate their abilities in various workplaces.
In addition to promoting the further development of women's abilities through training and seminars forfemale employees and managers, we will continue to promote the Group-wide " Diversity Promotion Project,"
We will formulate and progress a business action plan and will continue to actively work to promote theactive participation of women.
The ratio of female managers in fiscal 2023 is 2.1%, but we aim to increase it to 10% by fiscal 2030.
<Appointment of foreigners to managerial positions>
The Group continues to recruit new graduates and mid-career workers regardless of nationality, and currently
employs 24 foreigners. We do not set future targets as we promote candidates to managerial positions basedon their abilities regardless of nationality.
<Appointment of mid-career hires to managerial positions>
The Group actively recruits mid-career employees throughout the year in line with business expansion.
Currently, the percentage of mid-career hires for managerial posts is 34.6%, and the same percentage for
executive posts is 24.3%.
We will continue to actively employ mid-career recruits to hire human resources who are ready to work.
Regarding promotion to managerial positions, regardless of new graduates or mid-career employees, we arepromoting them based on their abilities, so we have not set any future goals.
<Human resource development policy and internal environment improvement policy>
In order to ensure diversity, the Group has introduced the following measures with the aim of creating anenvironment where employees can work with enthusiasm.
・Human resource development training system
・Diversity Promotion Project・Self-Career Dock Program
・Employee Engagement Improvement Project2-6 (Fulfillment of Functions as a Corporate Pension Asset Owner)
The Company’s corporate pension fund is a contract-type defined benefit pension plan whose pension assets
are managed based on the “Basic Policy of Asset Management” by investment trustees aiming to achieve thereturn on investment that is expected within the range of risks determined by discussion and according to theirroles. While the management of all the corporate pension plans is entrusted because it requires expertise, we
are making effort to appropriately monitor the investment trustees.
In addition, we set up the Asset Management Committee and assigned to it personnel with expertise fromlegal, human resources, fund management, and business management departments. The committee members
are working to improve their quality by participating in seminars and training.
The Asset Management Committee is composed of members chosen by the employer and the labor union
head representing plan holders, and operated in a structure that can properly manage conflicts of interest
between the Company and beneficiaries.
-2-

3-1 (Ensuring Proper Information Disclosure and Transparency)(1) Our business strategies and the mid-term management plan are described on our website(https://tokaiholdings.co.jp/english/ir/management/).
(2) The Basic Policy on Corporate Governance is published on our website(https://tokaiholdings.co.jp/english/ir/management/pdf/cgc_20211222_e.pdf).
(3) Our directors’ compensation has a structure consisting of monthly compensation, bonuses and stock-based
compensation and properly reflecting their duties and contribution to the company. The procedure to decide
the amount of the compensation is that the representative director examines it in accordance with the policies
above, taking advice from independent outside directors into account, and the board of directors approves theamount of the compensation.
(4) The election and dismissal of management executives and the nomination of director/corporate auditor
candidates are based on general consideration focusing on a balance of knowledge, experience and abilities aswell as diversity.
The procedure of the nomination and election and dismissal is that the representative director examinescandidates in accordance with the policies above, taking advice from independent outside directors into
account, and the board of directors approves them.
(5) The reasons for the election and dismissal of individual director/corporate auditor candidates will be
described in a referential document for the general meeting of shareholders.
The reasons for the election of candidates for each director during the term (appointed at the Company's 13thterm shareholders meeting) are as stated in the proposal for election of directors of the 13th ordinary general
meeting of shareholders notices disclosed on our website.
(https://www.tokaiholdings.co.jp/english/ir/library/pdf/meeting/2024_3/meeting13_e.pdf)
3-1-2 (Information disclosure in English)
The Company has established an English version of its website and strives to provide information in English
to overseas investors, such as by posting English version of financial statements.
In addition, the Tokyo Stock Exchange, the electronic voting platform, and the Company's website provide
convocation notices and reference materials for general shareholders' meetings in English.
3-1-3 (Sustainability Initiatives, etc.)
The Company describes its sustainability initiatives on its website (https://www.tokaiholdings.co.jp/csr/) and
Supplementary Principle 2-3 (1).
As a sustainability promotion system, we have established the Sustainability Promotion Committee (chairedby the CEO) as an advisory body to the Board of Directors. The committee meets twice a year to takeinventory of materiality and issues to be addressed, evaluate the status of efforts to achieve goals, and reportto the Board of Directors. In identifying materiality, including climate change risk, we select candidates basedon sectoral materiality maps, etc., published by each ESG research institution, taking into account regional
characteristics, industry trends, and other factors. It is evaluated from the two perspectives of "impact on thecorporate value of the Group in general" and "impact on society by the Group" and identified through a
resolution of the Board of Directors.
We also review these materialities on a regular basis, taking into account changes in industry trends and new
ESG issues. In addition, regarding human resource development and the improvement of the internal
environment, we have introduced and disclosed various measures aimed at ensuring diversity and creating anenvironment where employees can work with enthusiasm.
Regarding investment in human capital, as announced in the "About TOKAI Group Human CapitalManagement", the TOKAI Group shares the TOKAI-WAY, which is a shared sense of values. We arepromoting corporate activities with the aim of continuing to create a working environment. In themedium-term management plan 2025, we will focus on maximizing the vitality of human resources andorganizations in a growth tree consisting of the three elements of growth roots, core, and fruits. , positioning it
as an investment to improve corporate value, and working to "maximize the vitality of human resources andthe organization," such as human resource development and the creation of a work environment.
In order to experiment with management strategies, we will clarify the "ideal individual" and "idealorganization", invest in the realization of the ideal, and implement the human resources strategy.
In addition, we will set important indicators to measure the degree of realization of these goals and use themto improve the well-being of our employees.
-3-Employees are assets, and we will continue to strive to expand our human capital.
Regarding investment in intellectual property, the Group has 3.36 million continuous transaction customers
across the energy, information and communication, CATV, aqua, mobile, and security businesses. This
expansion and overlap in the number of customers will be the foundation for the Group's growth. We will
actively invest in customer acquisition activities while taking profitability into account, and we will also
promote acquisition of customers with continuous transactions through M&A in an effort to expand ourearnings base.
The Company recognizes that the various information it obtains from its business relationships withcustomers is also an important asset and has built a data analysis platform that centrally manages the Group's
customer data, and promotes digital marketing that utilizes this platform. increase. In connection with thisinitiative, in July 2021, we were certified as a “DX Certified Business Operator” stipulated by the Ministry of
Economy, Trade and Industry.
We will work to realize our management strategy through active investment in these intellectual properties.
Regarding TCFD, our group believes that identifying and addressing climate change risks and opportunities
using the TCFD framework, and integrating these into our management strategy, will contribute to thesustainable growth and enhancement of corporate value of our group. In line with the TCFD guidelines, we
disclosed information for the first time in the fiscal year 2022. Moving forward, we will continue tostrengthen our group's resilience to climate change challenges through scenario analysis, while also
contributing to the realization of a sustainable society.
4-1 1 (Roles of the Board of Directors)
Matters required by law to be resolved by the board of directors, and similar matters, are defined in theRegulations on the Board of Directors and the Operational Standard of the Regulations on the Board of
Directors of the Company. They are resolved by the board of directors meeting, while the decision of othermatters regarding business execution are delegated to directors in charge of business execution based on theirrange of responsibility defined by the board of directors.
4-9 (Criteria for Assessing Independence and Qualification of Independent Outside Directors)
The Company adopted criteria similar to the independence criteria established by the Tokyo Stock Exchange.
4-10-1 (Establishment of Nomination and Compensation Committee, etc.)
Prior to approval by the Board of Directors, the Nomination and Compensation Committee discusses andexamines particularly important matters such as the nomination and remuneration of officers and succession
planning. We strive to strengthen objectivity and accountability. The chairperson is an independent outside
director, and the majority of members of the Nomination and Compensation Committee are independent
outside directors.
4-11 1. (Concepts of Capabilities and Diversity Held by the Board of Directors as a Whole)
The number of members of the Company's Board of Directors shall be stipulated in the Articles ofIncorporation of no more than 10 directors and no more than 5 corporate auditors. The Board of Directors
shall be determined based on the principle of having the necessary and appropriate number of people toensure discussion, while also fully considering the perspective of ensuring diversity and expertise in the
Board of Directors. The standards for judging the independence of independent outside directors are the sameas the standards for independence stipulated by the Tokyo Stock Exchange. When selecting director
candidates, the Company considers the balance between human resources who can demonstrate their strengths
in the management of each business field and human resources who are suitable for business management in awide range of business areas. We ensure the balance and diversity of knowledge, experience, and abilities of
the Board of Directors as a whole.
In addition, the position, career, and appointment of each director in the Company's "Notice of Convocationof the 13th Ordinary General Meeting of Shareholders"(https://www.tokaiholdings.co.jp/ir/library/pdf/meeting/2024_3/meeting13.pdf) In addition to reasons, etc.,
the skills possessed by each Director and Audit & Supervisory Board Member are listed and disclosed using askill matrix.
4-11 2. (Concurrent Positions of a Director and a Corporate Auditor)-4-

The status of concurrent posts of the Company's directors and corporate auditors of other listed companies is
as described in the "Notice of Convocation of the 13th Ordinary General Meeting of Shareholders" disclosed
on the Company's website.
(https://www.tokaiholdings.co.jp/english/ir/library/pdf/meeting/2024_3/meeting13_e.pdf)
4-11-3 (Self-assessment of the Effectiveness of the Board of Directors)
The Board of Directors conducts self-evaluations by each director and auditor to analyze and assess theeffectiveness of the entire Board. This is done to review the operation of the Board and further strengthen its
supervisory functions.
In March 2024, based on a questionnaire conducted with the involvement and advice of a third-party
organization, the Board of Directors discussed the results and concluded that the operation and effectivenessof the Board in the fiscal year 2023 were effective. It was analyzed and evaluated that the directors andauditors participated in the Board with an understanding of the management philosophy and strategy,
improvements were made in the exchange of opinions and training between internal and external directors,
and efforts were made to enhance the governance system of the entire group, with these efforts showing
tangible results.
Additionally, the self-evaluation identified issues such as the need for sufficient follow-up after the
implementation of important resolutions approved by the Board, and the need for discussions based on athorough understanding of the alignment between the management strategy and the company's sustainablegrowth and corporate value.
The Board of Directors will continue to discuss these issues to further strengthen its supervisory functions andimprove its effectiveness.
4-14-2. (Training Policy for Directors and Corporate Auditors)
For the Training Policy for Directors and Corporate Auditors, please see Article 9 of the Basic Policy on
Corporate Governance.
(https://www.tokaiholdings.co.jp/english/ir/management/pdf/cgc_20211222_e.pdf)
5-1 (Policy for Constructive Dialogue with Shareholders and Other Investors)
For the Policy for Constructive Dialogue with Shareholders and Other Investors, please see Chapter 4 of the
Basic Policy on Corporate Governance.
(https://www.tokaiholdings.co.jp/english/ir/management/pdf/cgc_20211222_e.pdf)
In addition, we actively disclose IR information on our website, etc., so that our shareholders and investors
can better understand our group's management policies.
・Response to realization of management with an awareness of capital cost and stock priceIn the New Medium-Term Management Plan 2025 announced in May 2023, the Company discloses its
management resource allocation policy and basic approach to shareholder returns. We have set targets for
ROE and ROIC for fiscal 2025 as KPIs in our medium-term management plan, and we will allocate operating
cash flow generated by existing businesses to aggressive investments aimed at further growth, and pay stabledividends. , we plan to achieve a dividend payout ratio of 40% to 50%.
For details, please refer to our medium-term management plan
(https://www.tokaiholdings.co.jp/ir/management/).

2. Capital Structure

Updated

Foreign Shareholding Ratio

10% to less than 20%-5-[Status of Major Shareholders]
UpdatedName / Company Name
The Master Trust Bank of Japan, Ltd. (Trust account)
Aioi Nissay Dowa Insurance Co., Ltd.
Suzuyo Shoji Co., Ltd.
Custody Bank of Japan, Ltd. (Trust account)
The Shizuoka Bank, Ltd.
Tokio Marine & Nichido Fire Insurance Co., Ltd.
TOKAI Group Employee Shareholders Association
Sumitomo Mitsui Trust Bank, Limited
Astomos Energy Corporation
Meiji Yasuda Life Insurance Company
Controlling Shareholder (except for Parent
Company)
Parent Company

Number of Shares Owned
14,299,700
7,559,820
5,799,700
4,524,500
4,065,527
3,986,887
3,887,801
3,416,000
2,724,848
2,599,389

Percentage (%)
10.89
5.76
4.42
3.44
3.10
3.04
2.96
2.60
2.07
1.98

--Does not exist

Supplementary Explanation Updated
In addition to the above, the Company holds 8,321,254 treasury shares, but is excluded from the major
shareholders shown above.

3. Corporate Attributes
Stock Market and Market Section Listed On

Tokyo Stock Exchange Prime Market

Fiscal Year-End

MarchType of Business

Wholesale Trade

Number of Employees (consolidated) as of the
End of the Previous Fiscal YearSales (consolidated) as of the End of thePrevious Fiscal Year
Number of Consolidated Subsidiaries as of the
End of the Previous Fiscal Year

More than 1,000

From ¥100 billion to less than ¥1 trillion

From 10 to less than 50

4. Policy on Measures to Protect Minority Shareholders in Conducting Transactions with Controlling
Shareholders---

5. Other Special Circumstances which may have Material Impact on Corporate Governance
---

-6-

II. Business Management Organization and Other Corporate Governance Systems regarding
Decision-making, Execution of Business, and Oversight in Management
1. Organizational Composition and Operation
Organization Form

Company with Board of Corporate Auditors[Directors]
Maximum Number of Directors Stipulated in
Articles of Incorporation
Term of Office Stipulated in Articles ofIncorporation

10

1 yearChairperson of the Board

President

Number of Directors

9Election of Outside Directors

ElectedNumber of Outside Directors[Update]4

Number of Independent Directors[Update]4

Outside Directors’ Relationship with the Company (1)NameAttribute

UpdateRelationship with the Company*
a

b

c

d

e

f

g

h
△

i

Masahiro Sone
From another company
Nobuko Kawashima Scholar
Ryoko Ueda
Scholar
Hiroshi Tsunemine
From another company△*
Categories for “Relationship with the Company”* ”○” when the Director presently falls or has recently fallen under the category;“△” when the Director fell under the category in the past
* “●” when a close relative of the Director presently falls or has recently fallen under the category;“▲”when a close relative of the Director fell under the category in the past

j

k
○
○

a. Executive of the Company or its subsidiaries
b. Non-executive director or executive of a parent company of the Company
c. Executive of a fellow subsidiary company of the Company
d. A party whose major client or supplier is the Company or an executive thereof
e. Major client or supplier of the listed company or an executive thereof
f. Consultant, accountant or legal professional who receives a large amount of monetary consideration orother property from the Company besides compensation as a director/corporate auditor
g. Major shareholder of the Company (or an executive of the said major shareholder if the shareholder is alegal entity)
h. Executive of a client or supplier company of the Company (which does not correspond to any of d, e, or f)(the director himself/herself only)
i. Executive of a company where such post is served at concurrently with the post of the Company’s outside
director/corporate auditor (the director himself/herself only)-7-

j. Executive of a company or organization that receives a donation from the Company (the director
himself/herself only)
k. Others

Outside Directors’ Relationship with the Company (2)NameMasahiro
Sone

Designation as
Independent
Director○

UpdateSupplementary Explanation of theRelationship
Mr. Masahiro Sone had served as
the representative director for
Shizuoka Telecasting Co., Ltd.
until June 2011, and concurrently
served as a director and senioradviser for the same company
until June 2015. Shizuoka
Telecasting and the Company
have a transaction related to
public relations.

NobukoKawashima○

Not applicable

Kyoko Ueda○

Not applicable

Hiroshi
Tsunemine○

Mr. Hiroshi Tsunemine served as
Senior Executive Officer of
Shizuoka Bank, Ltd. until June
2017. There are transactions such
-8-

Reasons for Appointment
He was elected as an outside director
with the expectation that he would
participate in our decision-making fromhis fair and neutral position and provide
us with appropriate advice andinstructions regarding management
based on his rich experience of and deep
insight into corporate management.
The Company believes that his
independence is ensured because there
is no material interest between him andthe Company and no potential conflictof interests with general shareholders.
Utilizing the specialized academic
knowledge and wide-ranging insightcultivated as a university professor, wehave been appointed as an outside
director to participate indecision-making from a fair and neutral
standpoint and to receive appropriate
advice and guidance regarding
management.
In addition, we believe thatindependence is ensured because there
is no special interest between her andthe Company and it is judged that there
is no risk of conflict of interest withgeneral shareholders.
She has specialized knowledge incorporate governance, ESG, etc., andhas been appointed as an outside
director because he can participate indecision-making from a fair and neutral
standpoint and provide appropriate
advice and guidance regarding
management.
In addition, we believe thatindependence is ensured because there
is no special interest between her andthe Company and it is judged that there
is no risk of conflict of interest withgeneral shareholders.
He was elected as an outside director
with the expectation that he would
participate in our decision-making fromhis fair and neutral position and provide

as loan borrowings between thebank and our company.

us with appropriate advice andinstructions regarding management
based on his rich experience of and deep
insight into corporate management.
The Company believes that his
independence is ensured because there
is no material interest between him andthe Company and no potential conflictof interests with general shareholders.

[Voluntary Establishment of Nomination/Remuneration Committee] Update
Voluntary Establishment of Committee(s)Corresponding to Nomination Committee or Established
Remuneration Committee
Status of establishment of arbitrary committees, composition of committee members, attributes of chairperson(chairperson)[Update]Any committee
equivalent to thenominating committee
Any committee
equivalent to thecompensationcommittee

Name of thecommittee
Nomination andCompensation
Committee
Nomination andCompensation
Committee

Supplementary explanationAllmembers7

Full-time

Outsidedirector
4In-houseexpert0

Other

Chairman

7

Internal
director
2

1

Outsidedirector

7

7

2

4

0

1

Outsidedirector[Update]By ensuring the transparency and objectivity of the nomination of directors, the evaluation of remuneration,and the decision-making process, we will strengthen the independence, objectivity and accountability of thefunctions of the Board of Directors, and further enhance our corporate governance system. The committee
was established with the aim of enhancing its quality, and is chaired by an independent outside director.
The members of this committee are elected by resolution of the Board of Directors, and as of the date ofsubmission, there are seven members (Masahiro Sone, Katsuo Oguri, Junichi Yamada, Masahiro Goto,
Nobuko Kawashima, Ryoko Ueda, and Tetsuya Numano.
In the fiscal year 2023, meetings were held five times, and the specific matters discussed included thepromotion and compensation of our group executives, the composition of our board of directors, and thesuccession planning for the CEO and other key positions. These topics were subject to discussions andexchanges of opinions. Regarding attendance, out of the seven members in fiscal year 2023 (Masahiro Sone,
Katsuo Oguri, Junichi Yamada, Masahiro Goto, Nobuko Kawashima, Ryoko Ueda, and Tetsuya Numano),
five members (Masahiro Sone, Katsuo Oguri, Junichi Yamada, Masahiro Goto, and Nobuko Kawashima)attended all five meetings, Ryoko Ueda attended three out of three meetings, and Tetsuya Numano attended
two out of three meetings.
[Corporate Auditors]
Establishment of Board of Corporate Auditors
Maximum

NumberofCorporate

Stipulated in Articles of Incorporation
Number of Corporate Auditors

Auditors

Established
5
5

-9-

Cooperation among Corporate Auditors, Accounting Auditors and Internal Audit Departments
The audit and supervisory board has interviews with and exchanges opinions regarding policies, methods andresults of auditing several times a year with Deloitte Touche Tohmatsu LLC, which is our accounting auditor,
to share information on business or accounting issues.
Appointment of Outside Corporate Auditors

Appointed

Number of Outside Corporate Auditors

4

Number of Independent Corporate Auditors

4

Outside Corporate Auditors’ Relationship with the Company (1)Name

Relationship with the Company*

Attribute

a

b

c

d

e

f

g

h

i

j

k

l

m
○
○
○

Jiro Amagai
From another company
Masayuki Atsumi
LawyerMatsubuchi Toshiro CPA
Yoichi Obuchi
From another company△*
Categories for “Relationship with the Company”* ”○” when the corporate auditor presently falls or has recently fallen under the category;“△” when the corporate auditor fell under the category in the past
* “●” when a close relative of the corporate auditor presently falls or has recently fallen under the category;“▲”when a close relative of the corporate auditor fell under the category in the pasta. Executive of the Company or its subsidiaryb. Non-executive director or accounting advisor of the Company or its subsidiaries
c. Non-executive director or executive of a parent company of the Company
d. Corporate auditor of a parent company of the Company
e. Executive of a fellow subsidiary company of the Company
f. A party whose major client or supplier is the Company or an executive thereof
g. Major client or supplier of the Company or an executive thereofh. Consultant, accountant or legal professional who receives a large amount of monetary consideration orother property from the Company besides compensation as a corporate auditor
i. Major shareholder of the Company (or an executive of the said major shareholder if the shareholder is alegal entity)
j. Executive of a client or supplier company of the Company (which does not correspond to any of f, g, or h)(the corporate auditor himself/herself only)
k. Executive of a company where such post is served at concurrently with the post of the Company’s outside
director/corporate auditor (the corporate auditor himself/herself only)
l. Executive of a company or organization that receives a donation from the Company (the corporate auditor
himself/herself only)
m. Others
Outside Corporate Auditors’ Relationship with the Company (2)Designation as
Independent

Name

Corporate

Supplementary
Explanation of
the Relationship

Reasons for Appointment

N/A

He was elected as an outside corporate

AuditorJiro Amagai○- 10 -

Masayuki Atsumi○

N/A

Toshiro Matsubuchi○

N/A

Yoichi Obuchi○

Mr. Yoichi Obuchi
served as Executive
Officer of Aioi Nissay
Dowa Insurance Co.,
Ltd. until March 2021.
There areinsurance-relatedtransactions between
that company and ourcompany.

[Independent Directors/Corporate Auditors]
Number of Independent Directors/Corporate

8- 11 -

auditor with the expectation that hewould monitor our directors and provide
us with recommendations and opinionsfrom his fair and neutral position basedon his rich experience of and deep
insight into business management.
The Company believes that his
independence is ensured because there
is no material interest between him andthe Company and no potential conflictof interests with general shareholders.
We have appointed him as an Outside
Audit & Supervisory Board Member
because he will be able to utilize his
legal knowledge and wide-ranging
insight cultivated as a lawyer tosupervise the Directors and makerecommendations and advice from a fairand neutral standpoint.
In addition, since there is no special
interest between him and the Company,
and it is judged that there is no risk of
conflicts of interest with generalshareholders, we believe that his
independence is ensured.
We have appointed him as an Outside
Audit & Supervisory Board Member
because we believe that he will be able
to use his accounting knowledge andwide-ranging insight cultivated as acertified public accountant and tax
accountant to provide oversight,
suggestions, and advice to the Directors
from a fair and neutral standpoint.
In addition, since there is no special
interest between him and the Company,
and it is judged that there is no risk of
conflicts of interest with generalshareholders, we believe that his
independence is ensured.
He was elected as an outside corporate
auditor with the expectation that hewould monitor our directors and provide
us with recommendations and opinionsfrom his fair and neutral position basedon his rich experience of and deep
insight into business management.
The Company believes that his
independence is ensured because there
is no material interest between him andthe Company and no potential conflictof interests with general shareholders.

Auditors[Update]Matters relating to Independent Directors/Corporate Auditors---[Incentives]
Incentive Policies for Directors

Performance-linked Remuneration

Supplementary Explanation
The Company aims to improve mid- and long-term business performance and increase motivation tocontribute to the improvement of corporate value by further clarifying the link between the businessperformance/share value of the Company and the compensation of directors, executive officers and otherboard members of the Company and directors and other board members of some subsidiaries of the Company(“officers,” excluding outside directors). The Company also does this by having directors share risks of sharevalue deterioration as well as benefit of share value increase, a new stock-based compensation system (BBT =Board Benefit Trust) will be introduced to provide stock-based compensation to officers. The system assigns acertain number of points for three business years including the current business year and provides shares of
the Company corresponding to the determined number of points after the applicable officer resigns.

Recipients of Stock Options

Employees, Subsidiary Directors, Subsidiary Employees

Supplementary Explanation
As part of the 10th anniversary celebration of the TOKAI Group becoming a holding company, employees of
the Company and directors and employees of the Company's subsidiaries will hold a meeting in October 2021
for the purpose of raising their motivation and morale for improving the Group's performance and increasing
corporate value. Granted monthly stock options.
[Director Remuneration]
Disclosure of Individual Directors’ Remuneration[Update]Supplementary Explanation

We do not disclose individual remuneration[Update]The amounts of compensation for directors and corporate auditors in FY2023 were as below:
121 million yen for two directors (Fixed remuneration 96 million yen, bonus 14 million yen, non-monetary
remuneration 10 million yen)
20 million yen for two auditor (Fixed remuneration 20 million yen)
55 million yen for nine outside directors (Fixed remuneration 55 million yen)
* In addition to the above, there are three directors with no compensation. They are directors concurrently
serving as officers for subsidiaries, and received 137 million yen in total as officer compensation from thosesubsidiaries.
* The Company resolved that the officer retirement bonus scheme for directors and corporate auditors would
be abolished at the end of the First Ordinary General Meeting of Shareholders held on June 28, 2012, and that
directors and corporate auditors who would continue assuming their position after the said shareholders’- 12 -

meeting would receive officer retirement bonuses when they resign.
In addition, there are no persons whose consolidated remuneration, etc. is 100 million yen or more.
Policy on Determining Remuneration Amounts
and Calculation Methods

Established[Update]Disclosure of Policy on Determining Remuneration Amounts and Calculation Methods
a. Remuneration for the Company's directors shall be within the remuneration limit determined at the General
Meeting of Shareholders, and will appropriately reflect the job responsibilities and degree of contribution to
the business, taking into account management content, economic conditions, individual director evaluation
results, balance with employee salaries, etc. Our basic policy is to establish a remuneration system that This
policy was deliberated at the Nomination and Compensation Committee meeting held on April 19, 2024, andwas submitted to the Board of Directors meeting held on April 25, 2024 to resolve the decision policy.
b. Outline of the content of the decision policy
Remuneration for directors consists of fixed remuneration (monthly remuneration), bonuses, andnon-monetary stock remuneration. However, in view of their duties, outside directors will not be paid
non-monetary stock-based compensation.
i. Fixed remuneration, etc.
The decision shall be made based on the basic policy of a above and the internal rules regarding executive
compensation, etc., with comprehensive consideration. The fixed remuneration will be a monthly fixed
remuneration, and if a bonus is paid, it will be paid in July.
ii. Non-monetary stock compensation
Stock compensation is determined by calculating the amount of benefits based on the points calculated by thefollowing formula stipulated by the Executive Stock Benefit Regulations.
Points = Points by position x Performance evaluation coefficient according to performance during theevaluation period
The indicator for performance evaluation is determined by selecting the consolidated operating income for the
relevant fiscal year and depending on the performance compared to the previous fiscal year and the degree ofachievement of the performance forecast. The performance evaluation coefficient is 1.0 if consolidated
operating income is above the previous year and achieves the forecast, and 0.9 if the consolidated operating
income is above the previous year and above 90% to less than 100% of the forecast. If profit is higher than theprevious year and less than 90% of the forecast, the performance evaluation coefficient will be 0.5. If theconsolidated operating income is less than the previous year and the forecast is achieved, the performance
evaluation coefficient will be 0.5. Consolidated operating income is less than the previous year and theforecast is not achieved. In the case of, the performance evaluation coefficient is 0.0.
The reason why we chose this indicator is because it is a numerical value that indicates the results of thecompany's original sales activities, and we believe that it is the most appropriate criterion for evaluating
performance over the course of a year.
In addition, in order to strengthen the compensation structure linked to medium- to long-term improvement ofcorporate value, stock compensation will be provided with the Company's stock according to the number ofpoints granted when officers retire.
iii. Policy for Determining Compensation Ratio
Regarding remuneration for directors excluding outside directors, the ratio of fixed remuneration, etc. tonon-monetary remuneration is 95% fixed remuneration, etc. and 5% non-monetary remuneration for the
President and Representative Director, and 96% fixed remuneration, etc. and non-monetary remuneration 4
for Representative Director and Managing Director. % and This ratio is the ratio of the amount paid when
fixed compensation, etc. is the median value for the relevant position, and non-monetary compensation is the- 13 -

actual value for fiscal 2023. The amount paid will also vary.
c. Reasons why the Board of Directors determined that the content of individual director remuneration, etc.
for the current fiscal year is in line with the decision policy.
In determining the content of compensation, etc. for individual directors, the Nomination and Compensation
Committee determines the results of individual director evaluations, fixed compensation amounts, bonus
amounts, and non-monetary stock compensation amounts in line with the decision policy. Since we haveconfirmed in deliberations that the Board of Directors has made decisions based on the above, we havedetermined that the Board of Directors will basically respect the reports and follow the decision-making
policy.
[Supporting System for Outside Directors and/or Corporate Auditors] [Update]
For resolution of important matters, prior explanation and other support are provided to enable a proper
decision.
In addition, to enhance the effectiveness of the Board of Directors, we regularly hold opinion exchange
meetings between outside directors and outside auditors, as well as between internal directors and outside
officers.
[Status of Persons Who Have Retired from the President]
Name and Other Information of Councils, Advisers or Others Who Have Formerly Served as the President of
the Company[Update]Name---

Title / Position---

DutiesWork Form / Conditions(Full-time or Part-time, Remuneration)
Date of Retirement from the President

-----

Term

---

Total number of Councils, Advisers or others
who have formerly served as the President of theCompany [Update]---0

Other matters
The Company has a system of advisors and advisors, but currently none of the former presidents andrepresentative directors have resigned.

2. Matters on Functions of Business Execution, Auditing, Oversight, Nomination and Remuneration
Decisions (Overview of Current Corporate Governance System) [Update]
1. Overview
In November 2015, we established the We have established a basic corporate governance policy and areworking to enhance corporate governance.
The Board of Directors of the Company consists of 10 or less directors as stipulated in the Articles ofIncorporation, of which 4 are outside directors, and the President and Representative Director serves aschairman.
- 14 -

In order to ensure an effective management system and substantive discussion at the Board of Directors,
which is required of a holding company that manages the execution of the Group's business, the Board of
Directors should be composed of the necessary and appropriate number of people. We also give due
consideration to the perspective of securing professionalism and expertise.
The four outside directors are independent outside directors appointed in accordance with the independence
standards stipulated by the Tokyo Stock Exchange.
Our company is a company with a board of auditors, and there are five auditors, four of whom are outside
auditors, and the full-time auditor serves as the chairman of the board of auditors.
The Audit & Supervisory Board meets once a month to receive reports on important matters related to audits
and to discuss or make resolutions.
We audit the execution of duties by directors through participation in major meetings such as the Board of
Directors and audits of operations and accounting.
The Audit & Supervisory Board regularly convenes outside directors to strengthen cooperation with outside
directors and exchange information.
In order to promote the sustainability of the Group, the Sustainability Promotion Committee evaluates andverifies the status of efforts to achieve the goals of materiality (important issues). Deliberations on orders,etc., in advance deliberations on agenda items to be submitted to the Boards of Directors of the Company andGroup companies at the Executive Committee, and reports and deliberations on the progress of projects
promoted by the Company and Group companies, at the Business Operation Committee of major Group
companies. Deliberation on issues and solutions for grasping the status of business promotion and achieving
management goals, and deliberation on the appropriateness of content when submitting annual securities
reports and quarterly reports at the Disclosure Review Committee. The Litigation Review Committee
deliberates on important lawsuits.
The Company has established the Group Compliance and Risk Management Committee to share reports on
internal control deficiencies, major complaints, and incidents within group companies, as well as measures toprevent recurrence. The committee also promotes compliance training throughout the year and aims to
improve internal controls.
2. Audit
The Company is a company with a Board of Auditors, and in accordance with the audit policy and audit plan,
we audit the execution of duties by directors and the status of the construction and operation of the internal
control system. The Board of Auditors consists of five members: one full-time auditor and four part-time
auditors, all of whom are outside auditors. In the fiscal year 2023, the Board of Auditors held 14 meetings,
during which it evaluated and discussed proposals for the appointment and reappointment of accounting
auditors, agreed on proposals for the appointment of auditors, prepared audit reports, selected the chairperson,
selected the full-time auditor, selected specific auditors, formulated audit policies and audit plans, determined
auditor remuneration, agreed on the remuneration of accounting auditors, and made resolutions regarding theappropriateness of accounting audits. Additionally, opinion exchange meetings were held with accounting
auditors, outside directors, and full-time auditors of subsidiaries.
The activities of our full-time auditor include attending important meetings such as the Executive Committee
and the Compliance and Risk Management Committee, conducting hearings with directors and executive
officers, holding liaison meetings with full-time auditors of subsidiaries, receiving reports on internal audits
from the internal audit department, and gathering information through hearings on internal reports from thecompliance department. Through these audit activities, the full-time auditor grasps the decision-making
process and the status of internal control execution and reports to the Board of Auditors.
Regarding the internal audit of the entire Group, since the group reorganization and conversion to a holding
company in April 2011, the Group Audit Office (16 people in total, including the head of the office, as of thedate of submission), which is an organization independent from the business execution department, Based on
the annual plans and policies formulated each fiscal year, we conduct audits of our group companies. In fiscal
2023, we will conduct 12 audits of accounting, operations, labor, environment, etc., and 374 audits to evaluate
the effectiveness of internal controls., 14 information security review audits, a total of 402 internal audits.
Internal audits are conducted regularly and as needed to assess the appropriateness of policies, plans, andprocedures regarding overall business activities, the effectiveness of business operations, and compliance with- 15 -

laws and regulations. We are doing The results of internal audits are reported to the presidents, generalmanagers, business managers, corporate auditors, and internal control departments of each Group company,
shared within the Group as necessary, and regularly reported to the Board of Directors and Board of
Corporate Auditors. increase. In addition, regarding the improvement of the items pointed out by the audits,
we cooperate with the compliance departments of each company, conduct continuous follow-ups, and confirm
the establishment status of the improvements. In addition, the internal audit department regularly exchanges
information and opinions with the auditors, outside directors, and accounting auditors of each group company,
and works to ensure appropriate business execution.

3. Reasons for Adoption of Current Corporate Governance System [Update]
We are developing various businesses for 3.36 million consumer customers and corporate customers, with theenergy business, CATV business, and broadband business as our core business.
Each group company strives to realize the Group's management policy and achieve its goals, such as
expanding business and enhancing customer service, through transactions in close proximity to customers.
By dispatching directors to each group company, we are working to improve governance through eachcompany's board of directors. In addition, by having the representatives of major group companies
concurrently serve as part-time directors of the Company, we are working to quickly absorb opinions fromgroup companies and unify the intentions of the group.
In addition, the Company has appointed four outside directors and four outside corporate auditors. Outside
directors participate in decision-making from a fair and neutral standpoint and provide appropriate advice andguidance regarding management. Since then, they have been monitoring, making proposals, and giving advice
to the directors, and are fully working to strengthen the management supervision function.

III. Implementation of Measures for Shareholders and Other Stakeholders
1. Measures to Vitalize the General Shareholder Meetings and Smooth Exercise of Voting Rights
Early Notification of General
Shareholder Meeting

Scheduling AGMs Avoiding
the Peak Day
Allowing Electronic Exerciseof Voting Rights
Participation in Platform for
Exercise of Voting Rights by
Electromagnetic Means andOther Measures to Enhance
Environment for Exercise of
Voting Rights by Institutional
Investors
Providing Convocation Noticein English
Other

Supplementary Explanations
In order to enable shareholders to exercise their voting rights appropriately,
the Company strives to promptly send the notice of convocation of theGeneral Meeting of Shareholders and reference documents. In addition,prior to sending out the convocation notice, the information will beelectronically disclosed on TDnet and on the Company's own website tosecure time for reviewing the content.
To ensure attendance of as many shareholders as possible, the general
meeting of shareholders will be held on a day that is not a so-called peakday.
It has been introduced starting from the Fifth Ordinary General Meeting of
Shareholders (2016).
The "Voting Rights Electronic Exercise Platform" operated by ICJ Co., Ltd.,
has been used since the Ordinary General Meeting of Shareholders held in
June 2016.

The English version of the convocation notice has been created andpublished on the website starting from the Fifth Ordinary General Meetingof Shareholders (2016).
After the general meeting of shareholders, a social gathering of shareholders
is held as an opportunity to explain the Group’s focus projects toshareholders.

- 16 -

2. IR Activities

UpdatedSupplementary Explanations

Regular Investor Briefings forAnalysts and Institutional
Investors
Regular Investor Briefings forOverseas Investors
Posting of IR Materials on
WebsiteEstablishment of Department
and/or Manager in Charge ofIR

A financial results briefing is held semiannually to
explain financial results, the mid-term business planand future business development to institutional
investors and analysts.
The representative and directors in charge visit eachoverseas institutional investor regularly.
The website was launched on April 1, 2011 to publish
1) statements of accounts; 2) materials for the financial
results briefings; 3) securities reports; 4)communications to shareholders; and 5) materials forthe general meetings of shareholders (notices ofconvocation and resolutions) in “IR Resources” inside“Investor Relations.”
The English website was also published for overseas
investors.
The Public Relations & Investor Relations Office, anorganization under the direct control of the president, isin charge of arranging financial results briefings andindividual meetings, as well as responding to inquiries.

Explanation

byRepresentative
Yes

Yes

3. Measures to Ensure Due Respect for Stakeholders
Implementation ofEnvironmental Activities, CSR
Activities etc.

Formulation of policies, etc.
related to information
provision to stakeholders

OthersSupplementary Explanations
The TOKAI Group Policy on the Environment prescribes the following
action guidelines:
1. Harmony of environmental preservation and social development
2. Compliance with environmental laws and regulations
3. Reduction in greenhouse effect gases and environmental burdens ofcustomers
4. Reduction in environmental burdens of TOKAI Group
5. Enhancement of the awareness of environmental issues and continuous
improvement of environment management activities
6. Coexistence with local communities
In order to gain further trust from our stakeholders, we actively engage involuntary disclosures in addition to timely disclosures based on the
Financial Instruments and Exchange Act and the Securities Listing
Regulations set by the stock exchange. We strive for transparent information
disclosure through our company website and PR information on TDnet.
1. Diversity Promotion
The Company is promoting the following initiatives as an opportunity
to promote career advancement and awareness raising of female
employees.
(1.) Implementation of "Diversity Promotion Project"-Formulation ofaction plan in the Women's Achievement Promotion Act, etc.
(2.) Implementation of "Women Careers Promotion Education
Program"-Create awareness of promoting female employees(3.) Implementation of "Women Employee Training"
2. Health Management
Recognizing that "health of employees" is an important asset of the- 17 -

TOKAI group and society, we announced the "TOKAI Group Health
Declaration" in June 2016. And, in June 2018, to promote healthmanagement more actively, the Company established the "TOKAIGroup Health Management Policy" which is consists of three pillars:"Health promotion," "Health and safety," and "Work style reform."
The Company is promoting various measures based on this generalpolicy.
Our group's efforts in health management have been recognized twicein the past by being selected as a 'Health & Productivity Stock.'
Additionally, we have been awarded the 'Certified Health &Productivity Management Organization 2024 (Large Enterprise
Category) White 500' for eight consecutive years. In March 2021, we
received the highest rank in the 'DBJ Health Management Rating(Health Management)' by Development Bank of Japan Inc., among
other high evaluations.
3. Work Style Reform
The Company has introduced "flex time system", "at-home work
system", "coexistence support of treatment and work" etc., and willcontinue to realize work-life balance and support coexistence ofchildcare / care and work etc. We will work actively to create anenvironment in which each employee can work, lively, and work
brilliantly, and aim to achieve the corporate philosophy "For the lives ofcustomers. We will continue to grow and develop together with theregion and the earth."

IV. Matters Related to the Internal Control System
1. Basic Views on Internal Control System and the Progress of System Development [Update](1) The system to ensure that directors, executive officers and employees of the Group exercise their duties inaccordance with law and the articles of incorporation:a. The Company will establish a corporate culture in which directors, executive officers and employees of theGroup comply with law, the articles of incorporation and social norms. It will do so by developing regulations
for compliance of the Group and always maintaining/operating them effectively based on the common charterof corporate behavior of the Group and TOKAI-WAY, the common philosophy of the Group.
b. To achieve it, the Group Compliance & Risk Management Committee horizontally administers complianceeffort of the Group as a whole, and each group company’s compliance promotion organization under theCommittee provides compliance education and training to its directors, executive officers and employees.
c. The Group Audit Office of the Company audits the compliance effort and its implementation in each groupcompany in cooperation with the Group Compliance & Risk Management Committee and reports the audit
results to the Group Compliance & Risk Management Committee.
d. In accordance with the Group’s regulations on internal control, the Company decides policies regarding
construction, establishment, and assessment of internal control for the Group as a whole. The internal control
promotion organization of each group company assesses the establishment and operation of its internal control
based on those policies and reports the assessment results and the assessment process to the Compliance &Risk Management Office.
e. If directors, executive officers, and employees find a material violation of law in business execution andother significant facts related to compliance, they shall report the fact to the Compliance & Risk Management
Office or a corporate auditor. The Office or the corporate auditor shall inspect the fact in cooperation with theGroup Audit Office of the Company and report the results to the Group Compliance & Risk Management
Committee as well as the board of directors and the audit and supervisory board of each company.
f. The Compliance & Risk Management Office works to effectively operate the whistle-blowing system inaccordance with the Group Internal Communication System. The whistle-blowing shall be generally based on
the help line system. The regulations explicitly state that the whistle-blower will not suffer a disadvantage dueto the whistle-blowing, and this has been made known to directors, executive officers and employees of the- 18 -

Group. The content of whistle-blowing via this system shall be shared with corporate auditors as necessary.
g. If corporate auditors of each group company find a problem in the operation of the compliance system or
the whistle-blowing system in their own company, they may provide an opinion and request developing
improvement measures.
h. In accordance with the code of corporate behavior, the Group establishes a system to take organizational
measures to eliminate anti-social forces and strengthens cooperation with the police and other relevant
agencies.
(2) Matters regarding storage and management of information on the execution of duties by directors andexecutive officers of the Groupa. The Group records and stores information on the execution of duties by directors and executive officers in
the form of documents (including electronic records) in accordance with the regulations on document
management of each company.
b. The Group defines retention periods of documents and specific methods to access them, including places
and time, in the regulations on document management of each company, and always keeps those documents
accessible in preparation for access requests from directors, executive officers or corporate auditors.
(3) Regulations and other systems regarding the Group’s management of risks of lossa. In the Company, the Compliance & Risk Management Office administers and manages risk information of
the Group as a whole in accordance with the regulations on group risk management. Each group company
assesses its own risks based on its regulations on risk management that were separately established, andregularly reports the results to the Compliance & Risk Management Office. The Compliance & Risk
Management Office regularly reports the risk situation of the Group to the Group Compliance & Risk
Management Committee as well as the board of directors and the audit and supervisory board of theCompany.
b. When an important risk event is revealed, each group company takes organizational countermeasures inaccordance with the regulations on risk management or the regulations on emergency response, including theestablishment of a task force. The risk management and response organization of each company reports the
progress of such countermeasures to the Compliance & Risk Management Office.
c. The Group Audit Office of the Company audits the existence of risks and the countermeasures taken ineach group company and reports the audit results to the Group Compliance & Risk Management Committee.
(4) Systems to ensure the efficient and proper execution of duties by directors and executive officers of theGroupa. Because important matters affecting the Group as a whole need to be decided carefully by considering themfrom diverse points of view, such matters shall be referred to the management strategy meeting, theinvestment committee or the business management committee hosted by the Company for adequate
discussion prior to the board of directors meeting of each company.
b. Based on the discussion results of the management strategy meeting or other meetings, the Company
optimally distributes management resources of the Group as a whole so that each company’s business is
executed reasonably and efficiently and supports business reorganization of each company as necessary.
c. The Company manages business execution of each company based on the mid-term business plan and anannual budget of the Group as a whole. The Company also assesses profitability and risks of each company’s
important investment proposals and assigns necessary management resources to each company appropriately
in a timely manner for the proposals that are regarded as proper.
d. Each group company utilizes the IT system, summarizes the progress of business performance
appropriately in a timely manner, and regularly reports it to the board of directors of the Company. The boardof directors of the Company appropriately assesses the business performance of each group company inaccordance with the regulations on business performance assessment of each group company.
e. For the business management of each group company, effectiveness shall be ensured by requesting
reporting to and obtaining approval from the Company in accordance with the group management guideline,
the regulations on group business management and the regulations on the procedure for approval andreporting of each group company. The administration division of the Company monitors the businessexecution of each group company as necessary.
f. The Compliance & Risk Management Office assesses the effectiveness of internal control of the Group as awhole at the end of every business year in accordance with the regulations on group internal control based on
the assessment and audit results of internal control by the Group Audit Office in order to ensure reliability of- 19 -

figures in financial reports of the Group as a whole.
(5) Matters regarding applicable employees in the case that corporate auditors request employees to be
assigned to them to assist them in their duties, and matters regarding the independence of those employees
from directors
a. The Company shall appoint assistants for corporate auditors as employees to assist the duties of corporate
auditors, from employees of the Company when the corporate auditors require such personnel in order toimprove the effectiveness of auditing and facilitate audit activities.
b. Corporate auditors’ assistants shall be assessed by corporate auditors, and the appointment, dismissal,
transfer and change of wages of corporate auditors’ assistants shall be decided by the board of directors withthe consent of the audit and supervisory board, in order to ensure their independence from directors andexecutive officers. Corporate auditors’ assistants shall not concurrently assume positions related to businessexecution.
(6) Systems for reporting to corporate auditors by directors, executive officers and employees of the Group,and other systems regarding reporting to corporate auditors
a. Each group company promptly reports important matters affecting each group company’s business orbusiness performance to the audit and supervisory boards of the Company and each group company inaccordance with the Regulations concerning the Procedure for Matters to Be Reported to the Audit andSupervisory Board by Directors, Executive Officers, and Employees. Note that, as described in (1) e., mattersregarding compliance may be reported directly to corporate auditors of each group company.
b. Regardless of the above, corporate auditors of each group company may request reporting from directors,
executive officers or employees of their own company anytime as necessary.
(7) Other systems to ensure effective audit by corporate auditors
a. The Company ensures corporate auditors’ effective auditing by reporting results of auditing by the Group
Audit Office and results of monitoring by the Compliance & Risk Management Office to the audit andsupervisory board appropriately in a timely manner to share information.
b. If corporate auditors submit a claim to the Company for advance payment of expenses for the execution of
their duties, the payment shall be processed promptly whenever its purpose is regarded as proper.
* An overview of the operations of the internal control system is described in the business report attached tothe convocation notice of the general meeting of shareholders and disclosed on our website.
（https://www.tokaiholdings.co.jp/ir/library/pdf/meeting/2024_3/meeting13_2.pdf）(Japanese)

2. Basic Views on Eliminating Anti-Social Forces
Based on the charter of corporate behavior, the Company and each group company are establishing a system
to take organizational measures to eliminate anti-social forces and strengthening cooperation with the policeand other relevant agencies.

V. Other
1. Adoption of Anti-Takeover Measures
Adoption of Anti-Takeover Measures

Not Adopted

Supplementary Explanation---- 20 -

2. Other Matters Concerning to Corporate Governance System
The Company has defined the following in the articles of incorporation:(1) The Company's Articles of Incorporation stipulate that the number of Directors of the Company shall beten (10) or less.
(2) Resolution of election of director
With regard to the resolution for the election of directors, the Company's Articles of Incorporation
stipulate that the shareholders with one-third or more of the shareholders who can exercise the voting
rights attend and that a majority of the voting rights be exercised.In addition, the articles of incorporation
stipulate that the election of directors shall not be made by cumulative voting.
(3) Matters that may be resolved at a general meeting of shareholders by the board of directors.
1. Acquisition of treasury stock
Pursuant to Article 165, Paragraph 2 of the Companies Act, the Articles of Incorporation of theCompany stipulate that the Company may acquire its own shares through market transactions byresolution of the Board of Directors to implement flexible capital policies.
2. Interim dividend
In order to enable agile redistribution of profits to shareholders, the Company may provide dividendsof surplus (interim dividends), as prescribed in Article 454 (5) of the Companies Act and based on a
resolution of the board of directors meeting, to shareholders listed or recorded on the final
shareholder list as of September 30 of every year.
(4) Special resolution requirements for general meeting of shareholders
Regarding the requirement for special resolutions of the general meeting of shareholders as prescribed in
Article 309 (2) of the Companies Act, the Company defines that the meeting shall require the attendanceof shareholders holding one-third or more of voting rights of shareholders who can exercise voting rights
and votes equivalent to two-thirds or more of those voting rights. The purpose of this is to ensure smooth
operation of the general meeting of shareholders by relaxing the quorum of special resolutions at thegeneral meeting of shareholders.

- 21 -

TOKAI Group’s Corporate Governance System- 22 -