Corporate Governance Report
Last Update: December 28, 2022

APAMAN Co., Ltd.
Representative: Koji Omura President and CEO
Contact: Administration Division TEL: ∔81-570-058-889
Securities Code: 8889
http://www.apamanshop-hd.co.jp
The corporate governance of APAMAN Co., Ltd. (“Apaman” or the “Company”) is described below.

I.

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

1. Basic Views Updated
The Apaman Group will continue to work on reinforcing and enhancing the corporate governance structure mainly
by improving the transparency and fairness of management, strengthening supervisory functions, accelerating its
decision-making, and making efforts to cooperate with stakeholders, with the highest management priority being
placed on the enhancement of corporate governance in order to achieve its sustainable growth and increase its
medium-and long-term corporate value pursuant to its vision, management philosophy, management policies.

[Reasons for Non-compliance with the Principles of the Corporate Governance Code] Updated[Supplemental Principle 1-2-2]
We sent the convocation notice on the previous Ordinary General Meeting of Shareholders 16 days before the dateof the meeting and published the notice on its website 22 days before the date of the meeting because we required
time to secure the accuracy of information and to consider proposals submitted to the General Meeting of
Shareholders. We will promote the streamlining of operations to send convocation notices earlier going forward
while securing the accuracy of information.
[Supplemental Principle 1-2-4]
We have not introduced an electronic voting system. We will consider adopting the system, taking into account thetrend of our shareholder composition, including institutional investors and overseas investors, and other factors
such as cost.
English translations of convocation notices and reference documents for general meetings of shareholders are
published on the English corporate website of Apaman (https://apamanshop-hd.co.jp/en/).
[Supplemental Principle 2-4-1]
We believe that ensuring diversity in human resources will result in securing talented personnel and creating
innovation through synergies brought from ideas of different perspectives. Based on this belief, we have positively
hired women, non-Japanese and experienced persons with diversified careers and worked on developing humanresources and internal environment.
The composition of our human resources as of the end of September 2022 is as follows. We will consider setting a
specific goal going forward:(1) The female percentage (in the total number of employees): 52.5%(2) The female percentage (in the total number of executives): 16.1%(3) The number of non-Japanese employees: 65(4) The percentage of experienced employees (in the total number of employees): 89.5%(5) The percentage of experienced employees (in the total number of executives): 88.6%-1-

To develop internal environment, we have adopted the following systems:
・ Independence support system
A system to provide various support such as a loan to any directly managed store employees who wish to
become independent and form Apamanshop franchise stores.
・ Limited-service employee system
A system to allow employees whose service is limited to select their working days, the number of working
days, and working hours at their own discretion.
[Principle 3-1](i) Our management philosophy, management policies, etc. are stated in a securities report. We have notdisclosed our medium-term business plan. We will consider disclosing it going forward.
(ii) Our basic views on corporate governance is stated in I.1. of this report.
(iii) Remuneration for directors is stated in a securities report and II.1. Director Remuneration of this report.
Remuneration for Audit & Supervisory Board members is determined through consultation among Audit& Supervisory Board members within the limit of the aggregate remuneration approved by the General
Meeting of Shareholders.
The policy and procedures to determine remuneration for management executives have not specificallyestablished at present. We will consider establishing them going forward.
(iv) In appointing management executives and selecting candidates for directors and Audit & Supervisory Board
members, the Board of Directors is to comprehensively take into account whether their ability, experience andknowledge are appropriate to perform their duties.
Candidates for directors are proposed by the representative director and determined through discussion ata meeting of the Board of Directors and with advice from independent outside directors.
Candidates for Audit & Supervisory Board members are proposed by the representative director anddetermined through discussion at a meeting of the Board of Directors and with consent of the Audit &Supervisory Board and advice from independent outside directors. We focus on opinions and advice ofspecialists such as lawyers from external law firms with respect to proposals for election of directors andAudit & Supervisory Board members.
If a management executive, director, or Audit & Supervisory Board member is in breach of laws andregulations or the Articles of Incorporation or otherwise deemed unable to properly perform his/her duties, theBoard of Directors makes a decision on removal of such management executive, director, or Audit &Supervisory Board member through discussion with appropriate involvement and advice of independent
outside directors and submits a proposal for removal to the General Meeting of Shareholders.
Other than above, the policy and procedures to appoint directors and Audit & Supervisory Board
members and appoint and remove management executives have not specifically established at present. We
will consider establishing them going forward.
(v) Brief career summaries and reasons for selection of candidates for directors and Audit & Supervisory Board
members are described in a notice of convocation of a General Meeting of Shareholders.
[Supplemental Principle 3-1-3] Sustainability
We believe that initiatives on sustainability plays an important role in increasing our medium-and long-term
corporate value. Our views on corporate social responsibility and activities are described in our website(https://apamanshop-hd.co.jp/en/csr/).
We have not disclosed investment in human capital and intellectual property, and other items. We will consider
disclosing them going forward.
[Supplemental Principle 4-1-3]
We have not developed a plan about successors of CEO. We will consider developing it going forward.

-2-

[Supplemental Principle 4-3-3]
We have not specifically established requirements for removal of the president and CEO.
If an event that is deemed appropriate to remove the president and CEO occurs, such as his/her breaching laws andregulations or the Articles of Incorporation, etc., and significantly damaging our corporate value and credibility, theBoard of Directors will make a resolution after thorough discussion.
[Supplemental Principle 4-8-2]
We have not appointed a lead independent outside director. We, however, have a system in which the Board of
Directors Secretariat or the Audit & Supervisory Board Secretariat provides proper support for communication or
coordination with the management or collaboration with the Audit & Supervisory Board.
[Supplemental Principle 4-9]
We have no specific independence criteria of independent outside directors, but refer to the independence criteria
of independent directors established by the Tokyo Stock Exchange in selecting independent outside directors.
[Supplemental Principle 4-10-1]
We have appointed two independent outside directors, who constitute less than a majority of the Board of
Directors. Although we have not established voluntary independent advisory committees such as a nomination andcompensation committee, we hear opinions and advice of independent outside directors when making decisions on
nomination and compensation.
[Supplemental Principle 4-11-1]
In appointing directors, we give consideration to ensuring prompt and proper decision-making and the scope of
responsibilities of the Board of Directors as well as the balance of knowledge, experience and skills of directors sothat directors can fulfill their required function and responsibilities and the diversity is ensured in the compositionof the Board of Directors as a whole. We will consider creating a skill matrix going forward.
[Supplemental Principle 4-11-3]
We have not implemented self-evaluation of directors or analyzed or evaluated the effectiveness the Board of
Directors at present. We will consider this going forward.
[Principle 5-2] [Supplemental Principle 5-2-1]
We have not disclosed a medium-term business plan, our targets of profitability or capital efficiency, or basic
policies on business portfolios. We will consider disclosing them going forward.

[Disclosure Based on the Principles of the Corporate Governance Code] Updated[Principle 1-4 Cross-Shareholdings]
The Apaman Group has a policy to hold shares in a company for purposes other than a pure investment purpose if it
reasonably determines that doing so contributes to the increase of the Apaman Group’s corporate value throughdevelopment or maintenance and reinforcement of a stable business relationship with the company in which the
Apaman Group invests. Based on this policy, the Board of Directors verifies the reasonableness of holding sharesof a specific issue from a medium-and long-term perspective and makes a decision on whether to continue to holdthe shares.
[Principle 1-7 Related party transactions]
In order to avoid transactions that are contrary to the interests of Apaman and shareholders, we prescribe in the
Board of Directors Rules that matters to be resolved at a meeting of the Board of Directors include competitivetransactions by directors, directors’ transactions for their own account (transactions between related parties), and-3-

transactions involving conflict of interest by directors, and that directors should report material facts abouttransactions to the Board of Directors after entering into the transactions.
[Principle 2-6]
We have no corporate pension plan, and thus we are not an asset owner.
[Supplemental Principle 4-1-1]
The Board of Directors makes decisions on important matters specified in laws and regulations and the Board of
Directors Rules, and executes other duties in accordance with internal regulations such as the Job Authority Rules.
[Supplemental Principle 4-11-2]
We disclose significant concurrent positions of directors and Audit & Supervisory Board members in a notice ofconvocation of a General Meeting of Shareholders and a securities report. Three directors out of four directors andone Audit & Supervisory Board member out of three Audit & Supervisory Board members have concurrent
positions at listed companies. Each of the directors has a concurrent position at one company and the Audit &Supervisory Board member at two companies. We determine that such numbers are reasonable.
[Supplemental Principle 4-14-2]
In order to implement a policy on training for directors and Audit & Supervisory Board members, we haveestablished the Regulations for Payment of Officer Training Expenses to develop a system where directors andAudit & Supervisory Board members can actively receive training while providing education to directors at
meetings of the Board of Directors.
[Principle 5-1]
We have the Administration Division serve as the IR Department and reasonably respond to requests fromshareholders to engage in dialogue to contribute to our sustainable growth and the increase of our medium-and
long-term corporate value. In addition, we hold financial results briefing sessions provided by the president and
CEO for institutional investors and analysts twice a year, in principle, and the IR Department actively respond to all
inquiries from shareholders, institutional investors and securities analysts to the extent possible in accordance with
the IR policy.

2. Capital Structure
Foreign Shareholding Ratio

From 20% to less than 30%[Status of Major Shareholders] Updated
Name / Company Name
Koji Omura
NOMURA PB NOMINEES LIMITED OMNIBUSMARGIN (CASHPB)OHMURA Co., Ltd.
BNY GCM CLIENT ACCOUNT JPRD AC ISG (FE-AC)
Sanko Soflan Holdings Co., Ltd
Custody Bank of Japan, Ltd. (Trust Account)
Poem Holdings Corporation
CGML PB CLIENT ACCOUNTAPAMAN Trading-Partner Shareholding Association
Japan Best Rescue System Co., Ltd.

-4-

Number of Shares Owned
4,001,060

Percentage (%)
22.38

1,737,100

9.72

1,063,600
860,050
847,890
831,600
647,790422,100
420,720360,360

5.95
4.81
4.74
4.65
3.62
2.36
2.35
2.02

Controlling Shareholder (Except for Parent Company)-

Parent Company

None

Supplementary Explanation Updated
1. The Large Shareholding Report (amended report) that became available for public inspection on October 21,
2021 stated that Resona Asset Management Co., Ltd. owned Apaman stock as follows on October 15, 2021. This
company is not included in the above list of major shareholders because Apaman was unable to confirm thenumber of shares effectively held by it as of the end of September 2022. The contents of the amended Large
Shareholding Report are as follows.
Large volume holder:Resona Asset Management Co., Ltd.
Address:
5-65 Kiba 1-chome, Koto-ku, Tokyo, Japan
Number of share certificates:
881,800 shares
Ownership ratio of share certificates: 4.82%
2. Shares held in the names of OHMURA Co., Ltd. ranked third and Poem Holdings Corporation ranked seventh
are beneficially held by Koji Omura, and thereby Koji Omura currently holds 5,712,450 shares, which represent
31.96% of the total number of issued shares (excluding treasury shares).
3. As announced in the Notice of Expected Change in Major Shareholder and Largest Shareholder and of
Acquisition of APAMAN Stock by OHMURA released on December 9, 2022, Koji Omura who had been thelargest shareholder at the end of the fiscal year ended September 30, 2022 ceased to be the largest shareholder on
December 12, 2022.

3. Corporate Attributes
Listed Stock Market and Market Section

Tokyo Stock Exchange, Standard

Fiscal Year-end

SeptemberType of Business

Real estate

Number of Employees (Consolidated) as of the End of the Previous
Fiscal Year

From 1000

Sales (Consolidated) as of the End of the Previous Fiscal Year

From ¥10 billion to less than ¥100 billion

Number of Consolidated Subsidiaries as of the End of the Previous
Fiscal Year

From 10 to less than 50

4. Policy on Measures to Protect Minority Shareholders when Conducting Transactions with aControlling Shareholder-

5. Other Special Circumstances which May Have a Material Impact on Corporate Governance-

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 the Audit & Supervisory Board-5-

[Directors]
Maximum Number of Directors Stipulated in
Articles of Incorporation

9

Term of Office Stipulated in Articles ofIncorporation

1 yearChairperson of the Board

President

Number of Directors

4Election of Outside Directors

Yes

Number of Outside Directors

2

Number of Independent Directors

2Outside Directors’ Relationship with the Company (1)NameAttribute

Yujiro Takahashi

LawyerAkihito Watanabe

Certified tax accountant

Relationship with the Company*
a

*
*

b

c

d

e

f

g

h

i

j

k

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 pasta. 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 Company or an executive thereof
f. Consultant, accountant or legal professional who receives a large amount of monetary consideration or otherproperty from the Company besides remuneration as a director/Audit & Supervisory Board member
g. Major shareholder of the Company (or an executive of the said major shareholder if the shareholder is a legal
entity)h. Executive of a client or supplier of the Company (which does not correspond to any of d, e, or f) (the director
himself/herself only)
i. Executive of a company, between which and the Company outside directors/Audit & Supervisory Board
members are mutually appointed (the director himself/herself only)
j. Executive of a company or organization that receives a donation from the Company (the director himself/herself
only)
k. Others-6-Outside Directors’ Relationship with the Company (2) Updated

Name

YujiroTakahashi

AkihitoWatanabe

Designation as
Independent
Director○○

Supplementary
Explanation of theRelationship

Reasons of Appointment-

Mr. Takahashi has extensive knowledge of legal matters due tohis experience as an attorney. Apaman believes that he can use
this knowledge to provide a variety of opinions concerning
Apaman.
Mr. Takahashi is also designated as an independent director
because Apaman believes there is no risk of a conflict ofinterests with those of ordinary shareholders and his ability tomaintain sufficient independence from senior executives for theoversight of management.

-

Mr. Watanabe has extensive knowledge and experience as a tax
accountant and administrative scrivener. Apaman believes that
he can use this knowledge to provide suitable guidance
involving management.
Mr. Watanabe is also designated as an independent director
because Apaman believes there is no risk of a conflict ofinterests with those of ordinary shareholders and his ability tomaintain sufficient independence from senior executives for theoversight of management.

Voluntary Establishment of Committee(s) Corresponding toNomination Committee or Remuneration Committee

None[Audit & Supervisory Board Members]
Establishment of Audit & Supervisory Board

Established

Maximum Number of Audit & Supervisory Board
Members Stipulated in Articles of Incorporation

6

Number of Audit & Supervisory Board Members

3

Cooperation among Audit & Supervisory Board Members, Accounting Auditors and Internal Audit Departments
The accounting auditor and the members of the Audit & Supervisory Board exchange information, reports andother items for cooperation involving accounting audits performed in accordance with the Companies Act andfinancial statement audits and internal control system audits performed in accordance with the Financial
Instruments and Exchange Act.
When determined to be necessary due to a problem concerning the performance of the duties of the accounting
auditor or some other reason, the Audit & Supervisory Board may ask the Board of Directors to hold a General
Meeting of Shareholders for the purpose of dismissing or not reappointing the accounting auditor.
If the Audit & Supervisory Board determines that the items in Article 340, Paragraph 1 of the Companies Act are
applicable to the accounting auditor, with the unanimous agreement of the members, the accounting auditor can bedismissed. If this happens, an Audit & Supervisory Board member selected by this committee must report thisdismissal and the reason for this action at the first General Meeting of Shareholders following this action.
The Internal Audit Department and Audit & Supervisory Board have a framework for cooperation in order tomaintain strong lines of communications. This includes the submission of internal audit plans, internal audit reports-7-

(audit notification, audit preliminary memo, audit report, audit results notice, audit results corrective action
response, follow-up examinations, etc.) and audit reports to the Audit & Supervisory Board. As needed, the Internal
Audit Department holds discussions and works in other ways with this committee concerning measures for
improvements, preventive measures and other actions. Overall, this framework encompasses the frequent sharing of
information and the implementation of internal audits and audits by the Audit & Supervisory Board members.
Appointment of Outside Audit & Supervisory Board Members

Appointed

Number of Outside Audit & Supervisory Board Members

2

Number of Independent Audit & Supervisory Board Members

1

Outside Audit & Supervisory Board Members’ Relationship with the Company (1)NameAttribute

Makoto Ariyasu

From another company

Takeshi Yamada

Certified public
accountant

Relationship with the Company*
a

b

c

d

e

f

g

h

i

j

k

l

m

○

* Categories for “Relationship with the Company”* “○” when the Audit & Supervisory Board member presently falls or has recently fallen under the category;“△” when the Audit & Supervisory Board member fell under the category in the past
* “●” when a close relative of the Audit & Supervisory Board member presently falls or has recently fallen under
the category;“▲” when a close relative of the Audit & Supervisory Board member fell under the category in the pasta. Executive of the Company or its subsidiaries
b. 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. Audit & Supervisory Board Member 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 or otherproperty from the Company besides remuneration as a director/Audit & Supervisory Board member
i. Major shareholder of the Company (or an executive of the said major shareholder if the shareholder is a legal
entity)j. Executive of a client or supplier of the Company (which does not correspond to any of f, g, or h) (the Audit &Supervisory Board member himself/herself only)
k. Executive of a company, between which and the Company outside directors/Audit & Supervisory Board
members are mutually appointed (the Audit & Supervisory Board member himself/herself only)
l. Executive of a company or organization that receives a donation from the Company (the Audit & Supervisory
Board member himself/herself only)
m. Others-8-Outside Audit & Supervisory Board Members’ Relationship with the Company (2) Updated

Name

Designation as
Independent Audit& Supervisory
Board Member

Supplementary Explanationof the Relationship

Reasons of Appointment

MakotoAriyasu-

Mr. Ariyasu was appointed for the purpose of using
his knowledge of compliance with laws, regulations
and the Articles of Incorporation and his experienceto strengthen the Apaman’s auditing system.

Takeshi
YamadaMr. Yamada is currently the
Representative Partner of
TACT Consulting & Co., a
tax accounting firm, which
has an advisory contract with
Apaman Property Co., Ltd., aconsolidated subsidiary of
Apaman.

Mr. Yamada was appointed due to the outlook for
him to use his knowledge of corporate finance toprovide useful advice concerning the Apaman’s
auditing system. In addition, Apaman believes that
Mr. Yamada’s skills involving finance, accounting
and other fields as a certified public accountant
make him well suited to serve as an outside Audit &Supervisory Board member.

○[Independent Directors/ Audit & Supervisory Board Members]
Number of Independent Directors/Audit &Supervisory Board Members

3

Matters relating to Independent Directors/Audit & Supervisory Board Members-[Incentives]
Incentive Policies for Directors

Performance-linked remuneration, stock options

Supplementary Explanation
We have adopted a performance-linked remuneration system to remunerate executive directors in an appropriate,
fair and well-balanced way based on the long-term interests of shareholders and to further incentivize suchexecutive directors to increase our corporate value.
Apaman has a stock option program that enables directors to purchase these options for the purpose of increasing
their motivation and reinforcing solidarity concerning the goals of achieving medium to long-term growth of sales
and earnings and growth of corporate value. These stock options are not remuneration for eligible directors; thedirectors are allowed to purchase these options based on their own investment decisions.

Recipients of Stock Options Updated

Apaman’s directors and employees, subsidiaries’ directors andemployees, and other

Supplementary Explanation
The purpose is to increase motivation of directors and employees and to reinforce solidarity concerning the goalsof achieving medium to long-term growth of sales and earnings and growth of corporate value.

-9-

[Director Remuneration]
Disclosure of Individual Directors’ Remuneration

Selected directors

Supplementary Explanation Updated
Remuneration for the fiscal year that ended in September 2022 (October 1, 2021 to September 30, 2022) for
directors and members of the Audit & Supervisory Board is as follows.
 Remuneration paid to directors (excluding outside directors): 192 million yen (of which 32 million yen is nonmonetary remuneration)
 Remuneration paid to Audit & Supervisory Board members (excluding outside Audit & Supervisory Board
members): 4 million yen Remuneration paid to outside directors/Audit & Supervisory Board members: 15 million yen
Non-monetary remuneration includes expenses during the fiscal year that ended in September 2022 associated withshare acquisition rights granted as stock options purchased as stated above, in addition to restricted share-based
remuneration.
Remuneration for individual directors/Audit & Supervisory Board members is as follows for the fiscal year that
ended in September 2022.
 Koji Omura: 164 million yen (Basic remuneration 132 million yen, non-monetary remuneration 31 million yen)
 Remuneration of individual directors is disclosed only for directors who receive total remuneration on aconsolidated basis of at least 100 million yen.
Policy on Determining Remuneration Amounts andCalculation Methods Updated

Established

Disclosure of Policy on Determining Remuneration Amounts and Calculation Methods
We established a policy to determine details of remuneration, etc. for individual directors at the meeting of theBoard of Directors held on November 24, 2021 as follows:
A. Basic views
1) Remuneration, etc. for executive directors shall be appropriate, fair and well-balanced based on the long-term
interests of shareholders and to further incentivize such executive directors to increase our corporate value.
2) Remuneration, etc. for independent outside directors shall reflect the time in which independent outside
directors execute their duties for us and their responsibilities. Their remuneration shall not include the elementsof stock-based remuneration and other performance-linked remuneration.
B. Types of remuneration and policy on determining remuneration
1) Monetary remuneration that is not linked to performance (fixed remuneration)
Remuneration amounts shall be determined based on directors’ positions, responsibilities, the number of years
in office, etc. within the limit of the aggregate remuneration amount approved by the General Meeting of
Shareholders.
2) Monetary remuneration that is linked to performance (performance-linked remuneration)
Remuneration shall be provided to directors in an amount calculated comprehensively taking into accountfactors such as their level of target achievement and contribution with respect to sales and profit for the relevant
fiscal year provided that the total amount of fixed remuneration and performance-linked remuneration does notexceed the aggregate remuneration amount approved by the General Meeting of Shareholders.
3) Non-monetary remuneration (stock-based remuneration, etc.)- 10 -

Apaman’s common shares shall be allotted to directors subject to a certain restriction period and the provisions
for events of acquisition by Apaman without charge, within the limit of the aggregation amount of nonmonetary remuneration approved by the General Meeting of Shareholders in order to share benefits and risks ofstock price fluctuations with shareholders and further increase directors’ motivation to contribute to increases instock price and corporate value. The allotment shall be made by providing monetary remuneration claims to
Apaman’s directors (excluding outside directors) within the limit of the aggregation amount of non-monetary
remuneration approved by the General Meeting of Shareholders as restricted share-based remuneration inaccordance with a resolution of the Board of Directors. Directors shall receive allotment of restricted shares by
providing all the monetary remuneration claims in a way of contribution in kind.
The aforementioned monetary remuneration claims shall be provided to Apaman’s directors (excluding outside
directors) on condition that the directors have agreed to the contribution in kind specified above and haveexecuted a restricted share allotment agreement that contains the following terms:
a. Details of transfer restriction
Directors who have received allotment of restricted shares may not transfer, create a pledge or mortgage on, give asa gift before death or testamentary gift, or take any other acts to dispose of, the restricted shares allotted (the“Allotted Shares”) to a third party for the period of three years or more as prescribed by the Board of Directors (the“Restricted Period”) (such restriction shall be hereinafter referred to as the “Transfer Restriction”).
b. Acquisition of restricted shares without charge
If a director who has received allotment of restricted shares resigns from the office of director of Apaman by the
day immediately preceding the date of the first Ordinary General Meeting of Shareholders since thecommencement date of the Restricted Period, Apaman shall automatically acquire the Allotted Shares withoutcharge.
Apaman shall also automatically acquire without charge any Allotted Shares whose Transfer Restriction has not been
terminated pursuant to the provisions of termination events of the Transfer Restriction set forth in c. below upon the
expiration of the Restricted Period set forth in a. above.
c. Termination of the Transfer Restriction
Apaman shall terminate the Transfer Restriction of all the Allotted Shares upon the expiration of the Restricted
Period on condition that a director who has received allotment of restricted shares continues to serve as director of
Apaman to the date of the first Ordinary General Meeting of Shareholders since the commencement date of the
Restricted Period; provided, however, that if such director resigns from the office of director of Apaman before theexpiration of the Restricted Period due to a reason deemed by the Board of Directors of Apaman to be justifiable,
Apaman shall reasonably adjust the number of the Allotted Shares for which the Transfer Restriction is terminatedand the timing of termination of the Transfer Restriction, as necessary.
d. Treatment at the time of reorganization
During the Restricted Period, if a proposal for a merger under which Apaman will be an absorbed company, a shareexchange agreement or a share transfer plan under which Apaman will become a wholly owned subsidiary, or otherreorganization, etc. is approved by the General Meeting of Shareholders (or Apaman’s Board of Directors if suchreorganization, etc. does not require approval of the General Meeting of Shareholders) (limited to the case where
the effective date of such reorganization, etc. arrives before the expiration of the Restricted Period; the “Time ofApproval for Reorganization, Etc.”) and a director who has received allotment of the restricted shares resigns fromthe office of directors of Apaman in conjunction with such reorganization, etc., the Transfer Restriction shall beterminated prior to the effective date of such reorganization, etc. with respect to the number of the Allotted Sharesreasonably determined by a resolution of the Board of Directors given the period from the commencement date of
the Restricted Period to the date of approval for such reorganization, etc.
At the Time of Approval for Reorganization, Etc., Apaman shall, on the business day immediately preceding theeffective date of such reorganization, etc., automatically acquire without charge the Allotted Shares for which theTransfer Restriction has not been terminated on the same day.
C. Percentage of remuneration, etc.

- 11 -

The percentage of basic remuneration, which is fixed monetary remuneration, a bonus, which is performancelinked remuneration, etc., share-based remuneration, which is non-monetary remuneration, etc. shall be determined
comprehensively taking into account a director’s position, responsibility, performance, etc.
D. Timing of payment of remuneration
Fixed remuneration shall be provided monthly in the form of fixed monetary remuneration.
Performance-linked remuneration shall be provided annually within three months from the end of each fiscal year,
in principle.
Share-based remuneration expense shall be allotted within two months from the close of an Ordinary General
Meeting of Shareholders, in principle.
E. Delegation
Matters concerning delegation to a third party shall be as follows:
Decision of specific details of remuneration, etc. for directors shall be left entirely to the discretion of the president
and CEO after resolution of Apaman’s Board of Directors. The president and CEO shall make a decision on
remuneration amounts based on directors’ positions, responsibilities, the number of years in office, etc. after
hearing opinions and advice of independent outside directors.
F. Other
1) Amendment and revision to this policy shall be subject to approval of Apaman’s Board of Directors.
2) If a serious accident or significant damage occurs, Apaman shall consider having directors return remuneration,
etc.
The Apaman Articles of Incorporation state that the remuneration of Apaman’s directors and Audit & Supervisory
Board members is determined by resolutions made at the General Meeting of Shareholders. At the sixth Ordinary
General Meeting of Shareholders, which was held on December 21, 2005, shareholders approved a resolution that
limits total annual monetary remuneration to 300 million yen for directors and 50 million yen for Audit &Supervisory Board members (the number of directors at the close of such Ordinary General Meeting of
Shareholders was six and the number of Audit & Supervisory Board members four). In addition, at the 22nd
Ordinary General Meeting of Shareholders, which was held on December 24, 2021, shareholders approved aresolution that limits total annual non-monetary remuneration to 50 million yen and 80,000 shares for directors(excluding outside directors) (the number of directors (excluding outside directors) at the close of such Ordinary
General Meeting of Shareholders was two).
For the fiscal year that ended in September 2022, the Board of Directors resolved at its meeting held on December
24, 2021 that a decision of specific details of remuneration, etc. for directors be left entirely to the discretion of
Koji Omura, President and CEO because he was in the position to appropriately evaluate each director’s executionof duties while overlooking the company as a whole. The president and CEO, after being delegated with thedecision, has made a decision on the remuneration amounts of individual directors based on their positions,
responsibilities, the number of years in office, etc. after hearing opinions and advice of independent outside
directors. The remuneration of individual Audit & Supervisory Board members was determined by discussions
about this remuneration at the meeting of the Audit & Supervisory Board held on December 24, 2021.

- 12 -

[Supporting System for Outside Directors and/or Audit & Supervisory Board Members]
Apaman makes efforts to provide information before holding the Board of Directors meeting, such as by
distributing materials concerning agenda items in advance and providing explanations prior to meetings whennecessary.

2. Matters on Functions of Business Execution, Auditing, Oversight, Nomination and Remuneration
Decisions (Overview of Current Corporate Governance System) Updated(1) Execution of business operations
1) Group Management Committee
The Group Management Committee, which meets two times every week as a rule, conducts preliminary
discussions of important matters involving business operations of the entire Apaman Group. In principle, themembers of this committee are the directors of Apaman and major group subsidiaries and managers at the level ofdeputy executive manager and higher. Audit & Supervisory Board members may also attend if necessary.
At these meetings, directors submit reports appropriately concerning the current status of operations, outlook andother subjects concerning the company or business unit they operate. This allows directors to keep track ofproblems, risk factors, forecasts of performance and other items involving companies and business units other thantheir own areas of responsibility. Sharing information facilitates numerous functions, such as the mutual oversightand mutual checking function for directors, the oversight of representative director and other directors by the Boardof Directors, and the maintenance of a framework for compliance.
2) Board of Directors
The Board of Directors meets once every month, as a rule, with the attendance of four directors (including two
outside directors, one of whom is a lawyer and one of whom is a certified tax accountant) and three Audit &Supervisory Board members (including two outside Audit & Supervisory Board members, one of whom is acertified public accountant). We use an online conference system, etc. to make it possible to hold meetings of theBoard of Directors with flexibility at major Apaman business sites from Hokkaido to Fukuoka.
The Board of Directors complies with all applicable rules, including the Board of Directors Rules, GroupManagement Committee Rules, Job Authority Rules (including the authority for making decisions), Group
Company Management Rules and others. These rules provide for the restriction and oversight regarding
compliance of how the directors perform their duties.
(2) Auditing and supervisory functions
1) Internal audits
The Internal Audit Department is responsible for conducting internal audits. There is one auditor who is assigned to
the Apaman head office.
The Internal Audit Department establishes an internal audit plan for every fiscal year in accordance with theinternal auditing manual. The president and representative director and the Audit & Supervisory Board members
receive an explanation of the main points of the plan. After the president and representative director approves theplan, the internal audit is conducted (audit notification, audit preliminary memo, audit report, audit results notice,audit results corrective action response, follow-up examinations, etc.) mainly by the Internal Audit Department.
The Internal Audit Department submits audit reports and other documents to the president and representative
director as well as to the manager of the department audited and the Audit & Supervisory Board members.
Subsequent improvements, preventive measures and other actions, as needed, are performed as instructed by the
representative director.
Audits by the Internal Audit Department primarily cover items (activities, methods, personnel, risk management,
ideas for improvements and preventive measures, and other items) concerning how business operations are
conducted at head office departments and the subsidiary company departments responsible for business operations.
There is a framework for ensuring that all individuals at a department undergoing an audit cooperate fully with theindividuals who are performing the internal audit.

- 13 -

After receiving the results of an internal audit, if the Audit & Supervisory Board members deem it necessary, aninternal controls audit may be performed by asking the manager (director or other manager) of the department that
was audited about whether there are any problems concerning how that manager is performing his/her duties(failure to observe limits on authority, improper behavior, serious problem involving compliance or risk
management, etc.).
2) Audits by Audit & Supervisory Board members
The Audit & Supervisory Board consists of one full-time member and two part-time members (one is anindependent outside member and one is an outside member). These three auditors perform their duties and perform
accounting audits in accordance with the division of duties determined by the Audit & Supervisory Board.
Among the major tasks involving audits by Audit & Supervisory Board members, audits of the performance of
duties by the directors are conducted mostly by the full-time member. This Audit & Supervisory Board member
performs investigations and audits concerning business operations conducted by directors at the Management
Committee, Board of Directors meetings and at other times and then submits reports to the Audit & Supervisory
Board. Outside Audit & Supervisory Board member Takeshi Yamada is a certified public accountant and a tax
accountant as well as an independent Audit & Supervisory Board member. Mr. Yamada has considerable
knowledge concerning finance and accounting.
The Internal Audit Department and the Audit & Supervisory Board share information frequently and there is aframework for cooperation concerning internal controls, internal audits and audits by the Audit & Supervisory
Board members. In addition, there are communications between the accounting auditor and this committee by
sharing information when accounting audits take place.
3) Accounting audit
Apaman has selected Grant Thornton Taiyo LLC as the accounting auditor for conducting consolidated accounting
audit operations prescribed in the Companies Act, Financial Instruments and Exchange Act and other laws. Thisfirm has performed Apaman audits for the past 14 years.
For the fiscal year that ended in September 2022, the following certified public accounts at Grant Thornton Taiyo
conducted the audit.
Kiyonori Hisatsuka, Designated Limited Liability Partner, Engagement Partner, Certified Public Accountant(second consecutive year)
Shinichiro Shimazu, Designated Limited Liability Partner, Engagement Partner, Certified Public Accountant (fifth
consecutive year)
These individuals were assisted by 11 certified public accountants, 11 persons who have passed the certified public
accountant examination, and nine others to conduct the accounting audit of Apaman.
4) Other committees
In addition, as committees under the corporate governance structure, Apaman has a Compliance Committee inaccordance with Compliance Rules, a Rewards and Punishment Investigation Committee in accordance with theassociated rules, and a Risk Management Committee in accordance with Risk Management Rules. Apaman alsoutilizes the decisions and ideas of two external conferences: the Senior Adviser Conference and the All-Japan
Caregiver Conference (consisting mainly of company managers from all areas of Japan who are associated with thereal estate business). This input is adequately used regarding the oversight and checking functions of the senior
executives of Apaman.
(3) Measures to strengthen functions of the Audit & Supervisory Board members
Please see “1. Organizational Composition and Operation, Audit & Supervisory Board Members, Cooperation
among Audit & Supervisory Board Members, Accounting Auditors and Internal Audit Departments.”- 14 -

3. Reasons for Selection of the Current Corporate Governance System Updated
For important matters involving management, in addition to the regular meetings of the Board of Directors,
Apaman has a Group Management Committee (meets two times every week, as a rule) as prescribed by the GroupManagement Committee Rules. Under the current system, in principle, the members of this committee are thedirectors of Apaman and major group subsidiaries and managers at the level of deputy executive manager andhigher. Members of the committee discuss and study various subjects. This allows the directors (Audit &Supervisory Board members may attend voluntarily) to mutually understand the status of business operations inother sectors of the Apaman Group.
This governance system provides for the mutual supervision and oversight of how the representative director andother directors conduct business operations as well as the objectivity and neutrality of the management oversightfunction, which are all required by laws and regulations. In addition, there are two outside directors (one of whom
is a lawyer and one of whom is a certified tax accountant) and two outside Audit & Supervisory Board members(one of whom is a certified tax accountant) for the purpose of strengthening the management oversight function
through the utilization of the professional knowledge of these individuals involving law, taxes and other fields. The
Audit & Supervisory Board also uses this knowledge for monitoring the performance of the directors. Apaman isusing the current governance system because it sufficiently performs corporate governance functions.

III. Implementation of Measures for Shareholders and Other Stakeholders
1. Measures to Vitalize the General Shareholder Meetings and Smooth Exercise of Voting Rights
Supplementary Explanations
Scheduling General Shareholder The fiscal year of Apaman ends on September 30 and the Ordinary General
Meetings Avoiding the Peak Day Meeting of Shareholders in December.
Providing Convocation Noticein English

Apaman publishes an English-language notice of convocation (only front page andreference materials) of the Ordinary General Meeting of Shareholders on its
website.

2. IR Activities Updated
Supplementary Explanations
Preparation and Announcementof Disclosure Policy

Apaman posts its disclosure (IR) policy on its website.

Regular Investor Briefings forAnalysts and Institutional
Investors

Financial results briefing sessions for analysts and institutional
investors are held twice a year at the time of announcement offiscal year results and first half results.

Posting of IR Materials on
WebsiteThe Apaman website has an investor relations section withinformation that is useful for investors, such as financial
information (earnings announcements, supplementary financial
information, Securities Reports, quarterly reports), timely
disclosure documents, electronic announcements, quarterly andfiscal year financial data, and other information.

Establishment of Department
and/or Manager in Charge of IR

Apaman has a manager assigned exclusively to IR in the
Administration Division.

Other

Apaman holds many one-to-one meetings with institutional
investors and analysts.

- 15 -

Presentation by
PresidentYes3. Measures to Ensure Due Respect for Stakeholders Updated
Supplementary Explanations
Stipulation of Internal Rules for
Respecting the Position of
Stakeholders

The Compliance Rules and Compliance Manual have provisions concerning
responsibilities concerning stakeholders and there are activities to give all
employees a sound awareness and understanding of these responsibilities.

Implementation ofEnvironmental Activities, CSR
Activities etc.

We have extensive CSR activities in accordance with our basic philosophy that
more social contributions by companies will absolutely make Japan better. We
also believe that people are vital elements of society and society is vital to theexistence of companies.
This is why we believe a company must be essential for both people and society
by making contributions to human and social progress.
Earnings are not the only standard we use for reaching decisions. We firmly
believe that business activities themselves must produce benefits for society. We
also believe that companies should return part of their earnings and humanresources to society. Earnings are one key to the success of a company. But
making profits and playing a role in social progress go hand in hand. This
thinking explains why we regard the use of some earnings for CSR as an
obligation of all companies. For more information, please visit our website.

Development of Policies on
Information Provision to
Stakeholders

Apaman posts its disclosure (IR) policy on its website.

IV. Matters Related to the Internal Control System
1. Basic Views on Internal Control System and the Progress of System Development(1) System for ensuring that directors and employees of Apaman and its subsidiaries perform their duties incompliance with laws, regulations and the Articles of Incorporation and systems for ensuring proper business
operations of these companies As the parent company within the holding company structure of the Apaman Group, Apaman requires a systemfor ensuring that the directors of Apaman and its subsidiaries perform their duties in compliance with laws andregulations. To strengthen the compliance framework, there is an outside director and several outside Audit &Supervisory Board members with professional knowledge. There are also a number of rules in place, such as
Board of Directors Rules, Group Management Committee Rules, Job Authority Rules (including the authority formaking decisions), Rules for Segregation of Duties, Group Company Management Rules, and other rules.
Consolidated subsidiaries also follow these rules in a proper and legal manner.
 The Apaman Group has a Group Management Committee that consists of the directors of Apaman and its major
subsidiaries and managers at the level of deputy executive manager and higher. By facilitating the mutual sharingof important information throughout the Apaman Group, this committee helps ensure that the business operationsof the entire Group are conducted properly and in compliance with laws and regulations.
 The Apaman Group has a Compliance Committee that consists of compliance members who are selected fromamong the executives and employees of Apaman and its major subsidiaries. Committee members share
information about important facts concerning compliance at Apaman and these subsidiaries. This provides aframework for ensuring that the entire Apaman Group complies with laws and regulations and conducts business
operations properly.

- 16 -

 Apaman and its subsidiaries have formulated the Compliance Manual that includes the Group’s management
philosophy, management policies, specific standards of behavior that Apaman and its subsidiary directors andemployees should follow, and other items. There are activities to give everyone at Apaman and its subsidiaries asound awareness and understanding of this information.
 Apaman has internal and external compliance helplines for the rapid discovery and resolution of violations oflaws and regulations, violations of internal rules and other problems at the Apaman Group. This helpline makes it
possible to receive internal reports of these violations and problems at Apaman and its subsidiaries.
 Apaman and its subsidiaries hold employee training programs periodically in order to raise awareness of theimportance of compliance with laws and regulations and create a stronger commitment to compliance.
 Apaman has an Internal Audit Department directly under the president and representative director and that is
independent of Apaman and its subsidiary departments that operate businesses. Internal audits thoroughly
examine, audit and monitor business processes of Apaman and its subsidiaries in order to cover many items,
including the establishment and operation of internal controls for financial reports. As a result, in a case where
there is any violation of compliance or other problem involving how an employee performs his/her duties at
Apaman or its subsidiary, there is a system for the timely and appropriate implementation of preventive measuresand measures for improvements.
 Responses to anti-social forces are another element of compliance at Apaman and its subsidiaries. The Apaman
Group positions the rejection of any relationship with anti-social forces as one of the Group’s shared importantmeasures. Major important contracts, transaction documents and other documents include provisions concerning
the elimination of anti-social forces.
(2) System for the storage and management of information about the performance of duties by directors at Apaman
and its major subsidiaries
 Apaman and its major subsidiaries share information, procedures and other items concerning the system for
information storage and management. There is a unified electronic decision-making system, including for thesesubsidiaries, and information is stored and managed in accordance with Decision-making Rules, Document
Management Rules, Personal Information Management Rules, Information Management Rules and other rules.
These rules are accessible to all executives and employees of Apaman and its major subsidiaries and there are
activities to give everyone a sound awareness of these rules.
 Documents involving the General Meetings of Shareholders, Board of Directors meetings, Group Management
Committee meetings and other important meetings of Apaman and its major subsidiaries are stored and managed
for the length of time stipulated by applicable laws and regulations or internal rules. These documents include
minutes of these meetings, documents associated with the meetings, financial statements and other legal
documents as well as decision and other important documents.
(3) Rules and other systems for the management of the risk of losses at Apaman and its subsidiaries
 Apaman and its subsidiaries have established Risk Management Rules and Risk Management Guidelines as thebasis for the risk management framework. In addition, there is a basic policy for information security and otherguidelines involving IT in order to maintain rigorous information security at Apaman and its subsidiaries. The risk
management framework has been assembled in accordance with these rules and guidelines.
 The Apaman Group has a Risk Management Committee consisting of risk management members selected fromamong the executives and employees of Apaman and its major subsidiaries. The committee produces a risk
control matrix for risk factors at Apaman and these subsidiaries. This matrix is a diagram of major business task

- 17 -

flows that includes risk factors at major consolidated subsidiaries and business tasks and control functions that arecovered by the matrix. The matrix is used as a system for monitoring and managing risk.
 There are three major risk categories at Apaman and its subsidiaries: 1) Events that could directly or indirectly
cause economic losses; 2) Events that could force the suspension or termination of business operations; and 3)
The possibility of damage to our reputation and the public perception of the Apaman brand. Furthermore, thedepartments and business units of Apaman and its subsidiaries have prepared a list of risk factors in order tocategorize specific items that are related to business purposes and could have a significant impact on the Group’s
management.
 For the management of risk at Apaman and its subsidiaries, there are Emergency Management Rules that are used
for an event that causes a particularly serious crisis or other emergency. If such an event occurs, an emergency
response headquarters is established where the president acts as the executive chief (general manager).
Specialized knowledge and functions from within the Apaman Group and external sources as well as opinions ofexperts are then brought together to execute measures for preventing the expansion of damage and losses andending the emergency. This response system facilitates proper and fast actions on a continuous basis.
(4) System for ensuring the efficient performance of duties by the directors of Apaman and its subsidiaries
 The representative director and other directors of Apaman concurrently serve as the directors of major groupcompanies. This makes it possible for the directors to perform their duties in accordance with a unified set of rules
for the entire Apaman Group. This contributes to the overall uniformity and consistency of the holding company
structure, including the group subsidiaries.
 The Apaman Group has a Group Management Committee that consists of the directors of Apaman and its major
subsidiaries and managers at the level of deputy executive manager and higher. This committee has the roles of
establishing and implementing efficient and reasonable management and business plans for Apaman and its
subsidiaries and of sharing and utilizing important information. This makes it possible to use synergies amonggroup companies for growth, coordination and other benefits involving business operations.
 Apaman and its major subsidiaries have a unified accounting management system for the entire Group in order toperform group accounting procedures efficiently. In addition, Apaman handles loans and other financing amonggroup companies in order to procure funds efficiently for the entire Apaman Group.
 The subsidiaries of Apaman use the executive officer system for the efficient performance of duties by directors
who are also Apaman executives. Using this system clearly separates the directors’ role of management oversightfrom the role of conducting business operations. This framework therefore enables the directors to perform theirduties efficiently and effectively.
(5) System for reporting matters pertaining to the performance of duties by directors of subsidiaries to Apaman
 The Group Management Committee, which consists of the directors of Apaman and its major subsidiaries andmanagers at the level of deputy executive manager and higher, facilitates the mutual sharing of important
information for the entire Apaman Group. This committee allows Apaman to receive timely reports of matters
involving how subsidiaries conduct business operations. Apaman believes the committee is one method for
ensuring the effectiveness of corporate governance for the consistent growth of the Apaman Group and the
medium to long-term growth of corporate value.
 For matters involving important decision-makings by subsidiaries for a certain level, the Group Company
Management Rules of Apaman require subsidiaries in advance to receive approval of or to submit a report to the
Apaman Board of Directors, the director overseeing the company and the business unit involved.

- 18 -

 Apaman departments involved with internal controls and the Internal Audit Department perform reexaminationsof the internal controls of the Apaman Group, enlarge the functions of supervising and checking the operation ofthese controls, submit orders for improvements, and take other actions for the purpose of ensuring that there aresuitable consolidated internal controls and that the controls are used. Apaman takes many actions forstrengthening group compliance and internal control systems in order to conduct business operations properly
while maintaining a unified internal control system.
(6) Matters concerning employees requested to assist Audit & Supervisory Board members with their duties andindependence of these employees from directors
 When a member of the Audit & Supervisory Board requests the appointment of one or more employees to provide
assistance for his/her duties, Apaman quickly names suitable individuals in accordance with the number of people
needed, the specific requirements, the periods and the reason for the request.
 Employees appointed to assist the Audit & Supervisory Board members follow the instructions and orders of thesemembers when performing this assistance. The purpose is to increase the independence of these employees fromthe Apaman directors and ensure the effectiveness of directives that Audit & Supervisory Board members give tothe employees. In addition, performance assessments, job reassignments, penalties and other actions involving
these employees must be approved in advance by the Audit & Supervisory Board members.
(7) System for submitting reports to the Audit & Supervisory Board members by Apaman directors and employees
or directors, Audit & Supervisory Board members and employees of group subsidiaries; system for preventing
negative actions concerning individuals who submit these reports because of the submission of the report Regular meetings of the Board of Directors (or resolutions in writing that are deemed to be Board of Directors
meetings pursuant to Article 370 of the Companies Act and Article 21 of the Apaman Articles of Incorporation)
are held at least once every month. The purposes of these meetings, which are also attended by Audit &Supervisory Board members, are to share information involving reports, discussions, proposals and other mattersand to achieve a unified stance regarding these items.
 The full-time Audit & Supervisory Board member is notified in advance of agenda items and proposals at eachweek’s Group Management Committee meeting. This Audit & Supervisory Board member can attend themeeting when the member deems it necessary. In addition, Minutes of Group Management Committee meetings
are prepared quickly after each meeting and made available to the Audit & Supervisory Board members in orderto give all members access to this information.
The Audit & Supervisory Board members also attend regular meetings of the Compliance Committee and Risk
Management Committee. This allows the Audit & Supervisory Board members to receive reports aboutsignificant facts concerning compliance at Apaman and its major subsidiaries, a risk management system andother matters.
 The Audit & Supervisory Board members use the shared electronic decision-making system of Apaman and its
major subsidiaries in order to examine individual decisions made electronically. These examinations enable thesemembers to fulfill their responsibilities and functions of checking and overseeing how business operations are
conducted for the entire Apaman Group.
 The Audit & Supervisory Board members use the Group Management Committee, Compliance Committee andother channels to receive reports required by these members. This provides a framework for checking andoverseeing how business operations are conducted for the entire Apaman Group.

- 19 -

 When the Internal Audit Department becomes aware of significant information or a significant internal audit
report concerning Apaman or its subsidiary due to an audit, there is a system for ensuring that this information isreported to the Audit & Supervisory Board members, as stipulated in the Internal Auditing Rules.
 Apaman has internal and external compliance helplines to receive internal reports of violations of laws andregulations, violations of internal rules and other problems at Apaman and its subsidiaries. Information in reports
is quickly passed on to the Audit & Supervisory Board members.
 The Compliance Helpline Detailed Rules prohibit any negative actions concerning individuals who submit thesereports to an Audit & Supervisory Board member because of the submission of the report. There are activities togive everyone at Apaman and its subsidiaries a sound awareness and understanding of this rule.
(8) Matters on Policy for expenses and debts incurred in association with the performance of duties by Audit &Supervisory Board members
Audit & Supervisory Board members can request the advance payment of expenses and other payments, inaccordance with Article 388 of the Companies Act, in association with the performance of their duties. Apaman
responds to these requests by quickly conducting the required procedure, except when it is obvious that therequested expenses or debts are not necessary for performing the duty of the Audit & Supervisory Board member.
(9) Other systems for ensuring that audits by the Audit & Supervisory Board members are performed effectively
All departments of Apaman and its subsidiaries assist with audits performed by the Audit & Supervisory Board
members. In response to the requests of these members, employees and others at departments being audited
explain, prepare and edit relevant documents and provide other assistance. Individuals at departments involved withinternal controls and Internal Audit Department also assist with audits performed by the Audit & Supervisory Board
members by providing assistance as requested.

2. Basic Views on Eliminating Anti-social Forces(1) Basic views on eliminating anti-social forces
The basic policy of Apaman is to reject any relationship whatsoever with anti-social forces. This policy is based on
Apaman’s management philosophy and management policies, Compliance Rules and Compliance Manual.
Furthermore, the Compliance Rules and Compliance Manual clearly state that Apaman as an organization firmly
rejects all improper demands or pressure from anti-social forces and this policy is publicized within the Apaman
Group and externally.
(2) System for eliminating anti-social forces
1) Organizational system
Apaman has a department at its head office that is responsible for overseeing and controlling activities concerning
anti-social forces.
In addition, there is a system in place for this department to receive a report and act immediately whenever an
improper demand or other communication is received from an anti-social force.
2) Cooperation with external agencies and organizations and collection and management of information about antisocial forces
Apaman’s administrative departments work closely with the police, attorneys and other external parties in order toshare the most recent information about anti-social forces and to make people at Apaman aware of this information.
3) Increasing employee awareness of policies concerning anti-social forces- 20 -

Apaman has established the Compliance Manual and it is used for making employees more aware of theimportance of measures concerning anti-social forces.

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

Not adopted

Supplementary Explanation-

2. Other Matters Concerning Corporate Governance System-- 21 -

Flowchart for Governance and Internal Controls (Corporate governance using the holding company structure)

General Meeting of Shareholders
Election/
Dismissal

ReportSpecific Audit & Supervisory
Board Members
Specific Directors
Report/Coordination
Election
Election
Report of legally mandated
Report ReportSupervision 報告
報告 activities
Repor
Audit & Supervisory Boardt Board of Directors
Three Members
Accounting Auditor
Four Directors(including two Outside Audit &(including two Outside Directors)
Supervisory Board Members)
Election/Dismissal

ReportElection/Dismissal/
Supervision

ReportElection/Dismissal Report

Report/Coordination oflegally mandated activities
Agreement for election (reappointment)(judgments of suitability of accounting audits)/
Dismissal (when Companies Act Article 340-1 is applicable)

Supervision/Survey/Report, etc.

One Representative
Director

AdviceReportCooperation/
Report(Overallsupervision)

Legal Department
Two Directors/ Full-time Audit &Group Management Committee

Supervisory Board Members, etc.

Risk Management
Committee
Compliance
Committee(Channels for whistleblowing)

Rewards and Punishment
Investigation Committee

Whistleblower
Protection Act(Overallsupervision)

Appointment/
Instructions/
Order

Advice/Opinions

Compliance Helpline

Internal Audit Department
Internal Control Department

Consolidated Subsidiaries- 22 -

Survey/Audit

Internal Audit (Internal Control)(Private advisory body)

Senior Adviser Conference /All-Japan
Caregiver Conference

ReportOperations/Management

Flowchart for Timely Disclosure System (Summary)Financial results information

Decisions and events

Accounting Department

Departments/subsidiaries, etc.

ReportReportAdministration Division/Manager responsible for handling information(Decision to disclose information or not)Board of Directors (Examination and approval)

Department in charge of information disclosure

Tokyo Stock Exchange/Apaman website- 23 -