Corporate Governance Report
Last Update: June 24, 2024

Sumitomo Chemical Company, Limited
Representative Director & President: Keiichi Iwata
Contact: Legal Dept
Securities Code: 4005
https://www.sumitomo-chem.co.jp/english/
The corporate governance of Sumitomo Chemical Company, Limited (the “Company”) is described below.

I.

Basic Views on Corporate Governance, Capital Structure, Corporate Profile andOther Basic Information

1. Basic Views
Sumitomo Chemical cherishes deeply the Sumitomo Spirit which has been passed down through generations overnearly 400 years, the basic teaching of which is, among others, not to seek its own interests alone, but tocontribute to society through its business activities. In accord with this business credo, the Company strives totake on challenges constantly of creating new value by capitalizing on its proprietary technologies towardachieving the Company's sustained growth while at the same time cultivating corporate culture full of vigor andgrowing as a company that earns trust from the public at large. Recognizing that highly effective corporate
governance is vital to attaining these ends, the Company keeps working to further enhance its corporate
governance in accordance with the policies and principles set forth in the following Guidelines, centering
particularly on closer cooperation with shareholders and various other stakeholders, faster decision-making,proper oversight of business execution, enhanced systems of compliance and internal control, and active dialog
with stakeholders.
・The Company not only shall respect the rights of shareholders, but shall endeavor to provide anenvironment where shareholders can exercise their rights smoothly and also to ensure theeffectively equal treatment of shareholders.
・Recognizing that cooperation with various stakeholders, including shareholders, employees,
customers, business partners, creditors, and local communities, is essential to the Company's
sustained growth, the Company shall proactively work to fulfill its corporate social responsibility
and strive to cultivate corporate culture of a company that can be trusted by society.
・As part of efforts to build a foundation for constructive dialog with stakeholders, the Company
shall endeavor to provide information that is highly reliable and useful to recipients thereof.
・The Company’s Board of Directors shall fulfill its role and mission properly, based on their fiduciary
responsibilities and accountability to shareholders and recognizing the important role ofIndependent Outside Directors & Auditors, through such measures as presenting appropriate
corporate management policies and business strategies that have taken into account changing
socioeconomic conditions, and conducting highly effective oversight over the execution of business.
・The Company shall endeavor to promote constructive dialog with shareholders with the aim ofseeking to attain the Company's sustained growth and to enhance corporate value in the medium tolong term.
Please refer to the Corporate Governance Guideline on Sumitomo Chemical’s website for basic policies
concerning Sumitomo Chemical’s Corporate Governance.
https://www.sumitomo-chem.co.jp/english/company/files/docs/governance_pdf_01.pdf-1-[Reasons for Non-compliance with the Principles of the Corporate Governance Code]
The Company complies with all principles of the Corporate Governance Code.

[Disclosure Based on the Principles of the Corporate Governance Code]＜Principle 1-4＞
【Policy regarding Strategic Holdings】
The Company holds strategically shares in other companies only when judged necessary for ensuring smoothbusiness operation or maintaining and enhancing mutual business relations, after such factors as medium- tolong-term economic rationality and prospects of future business developments have been considered as awhole. The Company shall assess, as appropriate, the necessity of holding such shares, taking into
consideration benefits (including dividends etc.) and risks etc. of such holdings from a comprehensive
viewpoint.
【Matters to be reviewed at the Board of Directors】
At the Board of Directors meeting, each year, the Company shall assess its shareholding policy for all listed sharesit owns, in light of mid- to long-term economic rationality and significance to hold such shares for each individual
issuer. According to such review, if it becomes less necessary to hold a share by reason of changes in the businessclimate etc., the Company shall sell such shares, as appropriate, taking into consideration the share price, market
trend etc.
【Criteria for exercise of voting rights for strategic holdings】
Whether or not and how voting rights related to such strategically held shares are to be exercised on a given
proposal shall be decided by the relevant department having close business relationship with such company
for each specific proposal, from viewpoints of whether or not the proposal would help raise the mid- tolong-term corporate value of the company in which the Company holds shares and promote the company's
sustainable growth or whether or not it would potentially harm the benefit of the Company.
<Principle 1-7>
With respect to transactions involving conflict of interest between the Company and Directors, the Company
shall ensure that the transactions be subject to resolution by and reporting to the Board of Directors inaccordance with the law and the Company's internal rules governing the Board of Directors. Transactions
between the Company and related other parties shall be determined after due consideration given to market
prices, market interest rates, etc., and the transactions so made shall be identified in notes to the Company's
financial statements and disclosed in annual securities reports, in accordance with the law, etc.
<Supplementary Principles 2-4-1>
1. Our views on securing diversity
In the Company Group, the “Promotion of Diversity, Equity and Inclusion (DE&I)” is held as one of theimportant issues to be worked on as management, and DE&I is promoted based on the “Group Diversity,
Equity and Inclusion Policy*” by coordinating with each of the group companies in and outside of Japan inorder to respect the individuality and the difference in attribution of each employee with various backgrounds
and characteristics, such as women, foreigners and mid-career employees, and to foster an organizational
culture where diversity is embraced and can be made the best of.
2. Human resource development policy and company environment development policy for securing diversity
In the Company Group, the policy is to appoint employees regardless of their attributions, such as race,
nationality or sex, in accordance with the idea called as “Right Person in the Right Position.” With respect tothe human resource development, the Company has been proceeding with a systematic human resource
development of group executives by, among others, holding selection trainings in the group as a whole.
In addition, the Company will work on the development of company environment in order to secure
diversity, such as by implementing flexible working hours system, providing various support for childcare andfamily care and teaching company principles to foreigners and recruited experienced workers, as well as workon the development of the company environment of each group company by sharing management policies andhuman resource development policies of the group in the meetings held every year by gathering executive
personnel of the group companies abroad (those in positions equivalent to general manager above of theCompany).
3. Self-established and measurable goals(1) Status of women appointed
The Company has set, as its KPI for the appointment of women, “Women accounting for at least 15% of-2-employees appointed as management (positions equivalent to manager or above) on average in the five
years from FY 2023 to FY 2027”. This goal focuses on “the ratio of employees appointed as management”,
which can reflect the progress of a series of women empowerment policies on recruitment, human resources
development, promotion, company environment development, etc., and is set for the purpose of sustainably
improving the ratio of women in employees appointed as management through steady implementation of
the KPI. The ratio of women appointed in FY 2023 is 29.0%. The Company will continue its efforts tofurther empower women at work by working on the said goal.
(2) Status of foreigners appointed
In the Company Group, personnel management is conducted globally, such as by managing theadministrative positions by the group as a whole. The ratio of foreign executives to the total of generalmanagers of the Company and the executives of the group companies abroad is 20.2% as of April 2024.
The Company will continue to work on this matter so that this level may be maintained and further
improved.
(3) Status of mid-career employees appointed
The Company works on active employment and utilization of recruited experienced workers (mid-career
employees) and the ratio of recruited experienced workers in the positions equivalent to manager or aboveis 25.3% as of April 2024. Although this level is sufficient at this point, the Company will continue toappoint them actively in the future.
*Group Diversity, Equity and Inclusion Policy
We will promote diversity, equity and inclusion across the Sumitomo Chemical Group. We understand that avariety of ideas and values among our employees represents a vital resource that forms the foundation of theSumitomo Chemical Group's competitiveness. In order to create continuous new value, we will build and enable
an inclusive organizational culture that allows us to respect the individuality of each employee and embrace
diversity to empower employees in an environment of mutual and close communication.
<Principle 2-6>
The Company retains a defined-benefit corporate pension plan and for the investment of such pension reserve
establishes the "Pension Assets Management Committee" in order to ensure the neutrality and fairness of suchinvestment of pension assets as well as to maintain the soundness of the pension assets and to push up its investment
performance. The Committee determines the basic principles for investment, investment guideline and policy asset
mix, evaluates and selects the asset management firms, and analyzes and evaluates the results of the invested assets.
To ensure the objectivity of the Committee, in addition to the executives in charge of the Company's Finance
Department and Human Resources Department, personnel with appropriate qualifications from various relevant
divisions (such as the General Affairs Department, Legal Department, Accounting Department, etc.) are appointed
as the members of the Committee. Also the secretariat office for the Committee is set up in the Finance Departmentof the Company, and such secretariat office collects information of the performance of each asset management firm
as well as opinions etc. from outside experts, and periodically monitors investment principles and investment
process, compliance structure, and how the Company works on stewardship activities, such as the status of asset
investment conducted and voting rights exercised by the asset management firms. The Company shall send theperson(s) responsible of such secretariat office to various seminars held by each asset management firm to acquirenecessary knowledge and to improve his/her expertise. With respect to any conflicts of interest expected ininvestment of corporate pension, the Company avoids such situation by respecting the decisions of asset
management firms upon their exercise of voting rights in the Company Group, etc.
As an asset owner of contract-type corporate pension, the Company has announced in March 2021 that it would
accept the Japanese version of stewardship code and has worked to make it effective by, among others, monitoringstewardship activities of asset management firms to which the Company has entrusted asset management.
＜Principle 3-1＞
【Business Philosophy, Business Strategies, Business Plans】
The Company shall disclose on its website etc., its Business Philosophy as well as business strategies andthe Corporate Business Plan that have been formulated and are to be implemented on the basis of theBusiness Philosophy.
“Business Philosophy”
https://www.sumitomo-chem.co.jp/english/company/principles/philosophy/“Management Policy”
https://www.sumitomo-chem.co.jp/english/ir/policy/【Basic Views and Basic Policy on Corporate Governance】
Please refer to “I．1.Basic Views” of the Report for details.

-3-【Policies and Procedures for Determining Compensation of Senior Management and Directors】
1. Basic policy for remunerations of Directors, etc.
(1) The remuneration of senior management and Directors (excluding Outside Directors) shall consist of
Basic Compensation as fixed compensation and Bonuses and Stock Compensation as variable
compensation. In addition, the remuneration of Outside Directors shall consist of Basic Compensation
and Bonuses.
(2) Basic Compensation is designed according to roles and responsibilities as basic remuneration for the
performance of duties so that the actions of senior management and Directors are not aimed at shortterm or sub-optimal effects.
(3) The amount of Bonuses shall largely reflect the Company's consolidated financial results for a fiscal
year in order to heighten short-term incentive to achieve the annual target of the business plans.
(4) Stock Compensation is designed to promote further value sharing with shareholders and serve as a
medium- to long-term incentive for the continuous growth of the Company.
(5) The remuneration shall be set at levels which are designed to be objectively competitive to attract andretain outstanding talent while comprehensively taking into consideration such factors as the scale andcontent of the Company’s business and external evaluations of ESG and other non-financial factors.
Based on surveys by a third-party organization and other materials, such levels shall be checked
annually whether or not to be objectively appropriate.
(6) When the consolidated performance target (core operating income) for the final fiscal year initially set
out in the Corporate Business Plan (FY2022-2024) is achieved, the remuneration of Directors(excluding Outside Directors) shall be designed so that the ratio of the fixed compensation to variable
compensation is approximately 1 to 1 and the ratio of short-term incentives (Bonuses) to medium- tolong-term incentives (Stock Compensation) in variable compensation is approximately 7 to 3.
2. Mechanisms of each remuneration element(1) Basic Compensation
The level of Basic Compensation shall be determined based on the policy described in 1. (5) to (6)above.
While Basic Compensation for each year shall be fixed, the Company will adopt a mechanism where
the Basic Compensation level would be changed in the event where the Company’s position haschanged in terms of “growth,” “earnings capacity,” and “outside evaluations” from a comprehensive
and medium- to long-term perspective.
As main indicators for determining the change in the Company position, the Company will apply
the following: 1) in terms of “growth,” sales revenue, total assets and market capitalization, 2) in termsof “earnings capacity,” net income (attributable to the parent company), ROE, ROI and D/E ratio, and
3) in terms of “outside evaluations,” credit ratings and ESG index selected by GPIF (Government
Pension Investment Fund).
The amounts to be paid to each person will be determined in accordance with the base amount set
by each position.
(2) Bonuses (short-term incentive)
Bonuses shall be paid on the condition that performance for that fiscal year exceeds a particular leveland shall be determined based on the bonus calculation formula.
In order to reflect the current earnings capacity of the relevant business year (including financial
activities) to the amount of bonuses, the Company will apply the combined value of consolidated core
operating income and financial profit and loss to the performance indicator concerning the bonus
calculation formula. In addition, the Company will set the coefficient of the calculation formula sothat it will get larger as the position of a person gets higher.
<Bonus calculation formula>
Consolidated performance indicator(core operating income + financial profit and loss)

×

Coefficient(3) Stock Compensation (medium- to long-term incentive)
Stock Compensation shall be restricted stock compensation. Restricted stocks shall be allocated at a
certain time after the ordinary general meeting of shareholders each year according to the amountdetermined for each position, and it shall be obligatory to hold the stocks during the term of office.
In addition, the Company shall set the ratio of Stock Compensation to total remuneration so that it will-4-

get larger as the position of a person gets higher.
<Overview of restricted stock compensation plan>(a) Transfer restriction period
Until the retirement from the position of Director and Executive Officer not concurrently serving
as a Director at the Company(b) Removal of transfer restrictions
On the condition that the eligible person continuously served as a Director or Executive Officer
not concurrently serving as a Director at the Company during his or her terms of office, theCompany shall remove transfer restrictions on all allotted shares when the transfer restriction
period ends.
However, a) if the eligible person resigns from his or her position as a Director and Executive
Officer not concurrently serving as a Director at the Company before the end of his or her term ofoffice owing to a justifiable reason, or b) if the eligible person resigns from his or her position as a
Director and Executive Officer not concurrently serving as a Director at the Company after the endof his or her term of office, but before the end of the transfer restriction period for any reason otherthan justifiable cause, the Company shall reasonably adjust the number of allotted shares fromwhich to remove transfer restrictions and the timing of the removal of transfer restrictions, asnecessary.
(c) Conditions for forfeiture of shares
If the eligible person is found to be in material violation of any law, regulation or internal rule, all
allotted shares, including those whose transfer restrictions have been removed, shall be forfeited(the Company shall acquire them without consideration).
3. Procedures for determining remunerations of Directors, etc.
The Company shall establish a Remuneration Advisory Committee as an advisory body to the Board of
Directors on a remuneration system for senior management and Directors, levels of remuneration, andother matters incidental thereto. Composed of Directors (a majority are Outside Directors), the Committee
shall advise the Board of Directors, when determining officer remuneration system, levels of
remuneration, etc., so that greater transparency and fairness can be ensured regarding the remuneration.
The remuneration amount of Directors shall be set at a level not higher than the upper limit of a total
remuneration prescribed by the resolution of the 125th Ordinary General Meeting of Shareholders held on
June 23, 2006 (i.e., 1.0 billion yen or less per year). Furthermore, the amount of remuneration to be paid
to Directors (excluding Outside Directors) for granting restricted stock shall be determined within theupper limit of 400 million yen per year set by the resolution of the 141st Ordinary General Meeting of
Shareholders held on June 23, 2022.
The Board of Directors shall deliberate on and decide the method of determining remunerations of
Directors, etc., based on the advice from the Remuneration Advisory Committee. Furthermore, theindividual remuneration of senior management and Directors shall be determined by the Remuneration
Advisory Committee, which is authorized by the Board of Directors, in accordance with the policies fordetermining compensation of senior management and Directors.
【Policies and Procedures for Electing and Dismissing Senior Management and Nominating Candidates for
Directors and Corporate Auditors】<Electing and Nominating Policies>
・Persons suitable for each position of responsibility shall be selected based on an overall
assessment of various factors, including business accomplishments, knowledge and experience,and character and insight, from the viewpoints of whether or not the person is capable ofmaking adequate and quick decision or whether or not the person is "the right person in the rightplace."
・In principle, when an elected person has reached a certain age, the person shall retire from theposition at the end of the tenure of office, in accordance with rules set by the Company.
・As far as nomination of candidates for Outside Directors and Outside Corporate Auditors isconcerned, if a candidate also serves as a director, officer, etc. in other publicly traded
companies, the number of such other companies shall be limited to four or less so that theperson can properly fulfill his or her duties as Director or Corporate Auditor of the Company.
<Electing and Nominating Procedures>
・A Representative Director shall select candidates suitable for the positions of Senior Management,-5-

Directors and Corporate Auditors in accordance with the above Policies.
・Deliberation shall be made on whether the selection made is adequate or not at the Nomination
Advisory Committee established under the Board of Directors, consisting mainly of Outside
Directors and Outside Corporate Auditors. The Committee shall give advice to the Board of Directors
on electing Senior Management or nominating candidates for Directors and Corporate Auditors and adecision shall be made at the Board of Directors meetings based on such advice.
Directors and Corporate Auditors shall be elected by a resolution of a General Meeting of
Shareholders.
<Dismissal Policies and Procedures>
・A deliberation and decision to dismiss Senior Management shall be made at the Board of
Directors meetings when a Senior Management has been suspected of malfeasance,
impropriety, or a breach of faith, or when there exists any other reason that makes him/her
unsuitable as a Senior Management.
【Explanation on each Election, Dismissal and Nomination when Electing or Dismissing a Senior
Management, or nominating candidates for Directors and Corporate Auditors】
The reason for nomination of each candidate for Directors and Corporate Auditors (including Outside
Directors & Auditors) are stated in the "Convocation Notice of the General Meeting of Shareholders". In
the event a Senior Management is dismissed, such dismissal shall be disclosed, from time to time, in an
appropriate manner.
<Supplementary Principles 3-1-3>
The Company explains its efforts to achieve sustainability in the Sumitomo Chemical Annual Report(Integrated Report) and Sustainability Data Book. In such report and data book, not only the management
strategies of the Company are explained but also the important issues on which the Company works bydevoting management resources, such as human capital and intellectual capital, and the flow for creating
value, which shows the vision for what the Company aims to be through its business activities, aredisclosed.
In addition, the Company, being the first company expressing its support for the TCFD Proposal in Japan,
has been actively working to address climate change, and has disclosed information based on the TCFD
Proposal by conducting scenario analysis of risks and chances related to climate change.
Sumitomo Chemical Annual Report:
https://www.sumitomo-chem.co.jp/english/ir/library/annual_report/files/docs/ar2023e.pdf
Sustainability Data Book:
https://www.sumitomochem.co.jp/english/sustainability/information/library/files/docs/sustainability_data_book_2023e.pdf<Supplementary Principles 4-1-1>
The Company shall cause its Board of Directors to resolve on management policies, business strategies, andother important matters related to business execution, etc. in accordance with legal requirements for mattersthat are a prerogative of the Board of Directors as well as with the provisions of the Company's Articles ofIncorporation. Further, the Company shall endeavor to enhance reporting to the Board of Directors about the
progress status of business execution for the purpose of oversight to ensure that duties entrusted to theManagement are being carried out properly.
<Supplementary Principles 4-2-1>
Please refer to Section “I. l. <Principle 3-1> 【Policies and Procedures for Determining
Remuneration of Senior Management and Directors】 of this report, as the policies etc. forperformance-linked remuneration have been described there.
<Principle 4-9>
The Company establishes criteria to designate the Company’s Outside Directors and Outside Corporate
Auditors as Independent Outside Directors & Auditors.
Please refer to the following Corporate Governance Guidelines on Sumitomo Chemical’s website, on whichsuch criteria are disclosed:
Corporate Governance Guidelines:
https://www.sumitomo-chem.co.jp/english/company/files/docs/governance_pdf_01.pdf-6-

<Supplementary Principles 4-10-1>
The Company has established, as committees under the Board of Directors, a Nomination Advisory
Committee and a Remuneration Advisory Committee, each of which is composed mainly of Outside
Directors.
1. Nomination Advisory Committee
The Nomination Advisory Committee discusses and gives advice to the Board of Directors on, among otherthings, nomination of candidates for Directors or Corporate Auditors, election of Senior Management (Senior
Managing Executive Officers and other Executive Officers above such position and the Executive Officers
with title who, under the direct control of President Executive Officer, control certain functions), and mattersrelating to successors of Chief Executive Officer, including from the viewpoint of diversity and skills.
2. Remuneration Advisory Committee
The Remuneration Advisory Committee discusses and gives advice to the Board of Directors on a
remuneration system for Directors and Executive Officers, levels of the remuneration, etc. In addition, theRemuneration Advisory Committee is entrusted by the Board of Directors to determine the individual amountsof remuneration for the Senior Management and Directors based on the “Policies for Determining
Remuneration of Senior Management and Directors.”
The members of the Nomination Advisory Committee and the Remuneration Advisory Committee arecomposed of five Independent Outside Directors and two Inside Directors (Director and Chairman, andDirector and President) and, because the majority of these committees are formed by Independent Outside
Directors, the independence, objectivity and fairness of these committees are enhanced.
<Supplementary Principles 4-11-1>
For the Board of Directors to fulfill its roles and responsibilities more effectively and make decisions more swiftly,
the Company, in principle, shall make sure that the number of members on the Board of Directors be less than the
maximum number provided in the Company's Articles of Incorporation, and shall form the Board of Directors
consisting of a diversity of persons with the following knowledge and experience.
- Persons with broad knowledge of and abundant experience in the Company’s business- Persons with broad knowledge of and abundant experience in accounting and finance- Persons with broad knowledge of and abundant experience in law, compliance, and internal control- Persons with broad knowledge of and abundant experience in industries, society, etc. as well as
corporate management, of other companies- Persons capable of harnessing their abundant international experience for the handling of global
business development
A skill matrix, where the expertise and experience of each Director and Corporate Auditor are listed, is disclosed
in the reference documents for shareholders meeting and the Sumitomo Chemical Annual Report (Integrated
Report).
Reference documents for shareholders meeting:https://www.sumitomo-chem.co.jp/english/ir/files/docs/20240523e.pdf
Sumitomo Chemical Annual Report:
https://www.sumitomo-chem.co.jp/english/ir/library/annual_report/files/docs/ar2023e.pdf
Please refer to <Principle 3-1> for the policies and procedures concerning the election of Directors.
<Supplementary Principles 4-11-2>
If Directors and Corporate Auditors including Outside Directors or Outside Corporate Auditors holdconcurrent positions as officers in other listed companies, the Company shall disclose the status of suchconcurrent positions in the "Convocation Notice of the Regular General Meeting of Shareholders " andsecurities reports, each year.
As the attendance rate of meetings of the Board of Directors (in regard to Corporate Auditors, suchmeetings will include Board of Corporate Auditors meetings) by Directors and Corporate Auditors(including Outside Directors or Outside Corporate Auditors) is very high, it is considered that the extent ofsuch concurrent positions is within a reasonable range.
<Supplementary Principles 4-11-3>
The Company’s Board of Directors carried out analysis and appraisal regarding the effectiveness of theBoard of Directors through exchanging opinions at Outside Directors and Outside Corporate Auditors
Meetings attended by Outside Directors, Outside Corporate Auditors, the Chairman and the President, and at
Management Meetings attended by Inside Directors, etc. as well as by taking into account questionnaire-7-replies from Directors and Corporate Auditors and opinions expressed by the Board of Corporate Auditors.
Based on these opinions, the Board of Directors made an overall review of the appraised effectiveness of theBoard of Directors.
As a result, it was confirmed that steady improvements have been made in various standpoints such as the situationof how the Board of Directors meetings were held (frequency of meetings, time, contents and quality of the
explanatory materials, preliminary explanations, etc.), implementation status of discussions and reports made at theBoard of Directors meeting (whether there are sufficient discussions on management strategies including businessportfolios, whether free and vigorous and constructive discussions are made, etc.), status of the oversight ofexecution of operation (whether there is oversight from an independent and objective standpoint, etc.), operationof non-mandatory Nomination Advisory Committee and Remuneration Advisory Committee (fair and transparent
procedures etc.), engagement with shareholders and training opportunities for Outside Directors and Outside
Corporate Auditors, and it was confirmed that the above matters were generally maintained at a good level. On theother hand, the members of the Board agreed that it is essential for the Board of Directors to further fulfill its
functions in order for the Company to overcome the current extremely difficult situation and get on a new growthtrajectory. Therefore, the Board of Directors has decided to make necessary efforts in a timely manner whileconsidering the trends in corporate governance, etc.
(1) Efforts made in reaction to the results of the appraisal of the effectiveness of the Board of
Directors in the previous fiscal year
With respect to the points that were indicated as “needs improvement” in the appraisal of theeffectiveness of the Board of Directors in the previous fiscal year, the following matters wereconfirmed: (i) in regard to initiatives aimed at further enhancing corporate value, (x) the Board of
Directors, through renewed discussions on “action to implement management that is conscious of
cost of capital and stock price”, reaffirmed the Company’s basic stance of creating “economic
value” and “social value” in an integrated manner as well as its commitment to continue its efforts
to thoroughly implement ROI-oriented management aimed at creating economic value and tocreate social value such as by contributing to reduction of GHG emissions through products andtechnologies, and (y) externally, the page on “initiatives aimed at enhancing corporate value” wasnewly posted on the Company’s website, and (ii) in regard to the further reinforcement of group
governance, the Company invited the heads of its important subsidiaries to an informal meetingwith the members of the Company’s Board of Directors, which led to gaining a deeper
understanding of the subsidiaries’ mid-term strategies and current issues though frank Q&A
sessions, etc. Furthermore, (iii) in regard to the roles to be fulfilled by the Board of Directors andthe Company’s corporate structure based thereon, the Company has decided to review themembers of the Board of Directors with the aim of strengthening monitoring functions such as“oversight of management” and “discussions on and evaluation of mid- to long-term management
strategies and policies” more than before.
(2) Improvement measures to be taken in response to the results of the present appraisal of theeffectiveness of the Board of Directors(a) Fulfillment of the Board of Directors’ functions for sustainable growth
The Company has already been timely providing opportunities for information sharing anddiscussion on themes such as the future business operations of important group companies anddirection of structural reforms. That being said, in light of the recent business environment andtrends in the Company’s business performance, the Company will increase the frequency and timeof discussions more than before by holding extraordinary Board of Directors meetings andinformal meetings, etc. in a flexible manner so as to engage in more in-depth discussions on,among other things, the feasibility and risks of the business plan and speed up the decisionmaking process.
In addition, the Company will make efforts to maximize shareholder value (i) by, given the
renewed structure of the Board of Directors starting from June as a result of a review of its
members, further enhancing discussions from the perspective of company-wide optimization and(ii) with the views of shareholders and institutional investors in mind, by engaging in fundamental
structural reforms and formulation of a mid-term management plan starting in FY 2025, as well as
by disclosing such information in an easier-to-understand manner and having a dialogue withinvestors thereon.
(b) Improvement of the effectiveness of group governance
From the perspective of further improving the effectiveness of group governance, the Company-8-

will further reinforce the existing functions of audit and oversight against group companies andstrengthen engagement with group companies more than before to enhance corporate value of thegroup as a whole. At the same time, from the perspective of mid- to long-term management
strategies including business portfolios, the Company will reexamine the functions andpositioning of each group company, significance of holding these companies, etc., in order to
optimize the group structure.
(c) Corporate structure
Considering the abovementioned review of the members of the Board of Directors, the Company
will promote the reinforcement of the monitoring function of the Board of Directors by devising
operational measures such as setting of meeting agenda and methods of taking up opinions fromthe members of the non-director Management and through other means. In addition, the Company
will continue to regularly discuss and consider its corporate structure etc., taking into account theCompany’s business structure and the direction of the management, among others, by utilizing
opportunities of various meetings.
<Supplementary Principles 4-14-2>
The Company shall continuously provide Directors and Corporate Auditors, and candidates for those positions
with various opportunities of trainings and other programs such as "Training for Newly Appointed Directors andCorporate Auditors", "Training for Newly Appointed Directors and Executive Officers of Group Companies","Council Meetings for Management for Officers", "Training for Basic Knowledge on Management" aimed at
helping them gain knowledge of corporate management and broaden their perspectives so that they can fulfill
their roles and responsibilities properly.
＜Principles 5-1, Supplementary Principles 5-1-1, 5-1-2, 5-1-3＞(1) Basic Policy
The Company shall promote timely and proper communication with shareholders regarding its
management policies, business strategies, and business performance developments in order to fulfill
its accountability to shareholders and also to have the Company's stock priced properly and its
corporate value enhanced further through developing shareholders' accurate understanding of theCompany's activities.
(2) Organization
An Executive Officer in charge of Corporate Communications shall have overall responsibility
for dialog with shareholders. A dedicated organizational unit, Corporate Communications
Department, shall engage in gathering pertinent information in cooperation with the Company's
relevant departments, sections, etc. as well as arranging for and operating meetings for dialog
between the Company's Management, etc. and shareholders.
(3) Dialog with Shareholders
The actual dialog (interviews) with shareholders is handled by the Executive Officer in charge ofCorporate Communications and by the Corporate Communications Department, as a dedicatedorganizational unit. Based on the requests from shareholders and the main concerns raised ininterviews, opportunities for dialog between Senior Management, etc., including President, andshareholders are arranged by holding small meetings for institutional investors, visiting
institutional investors, etc. In addition, the views of the Company including opinions of Outside
Directors and Auditors are explained in the dialog.
The circumstances regarding how such dialog was held were disclosed in the Sumitomo
Chemical Annual Report (Integrated Report).
Sumitomo Chemical Annual Report:
https://www.sumitomo-chem.co.jp/english/ir/library/annual_report/files/docs/ar2023e.pdf＜Principles 5-2＞
【Action to Implement Management that is Conscious of Cost of Capital and Stock Price】【Available in
English】
The Company set, as one of the basic policies of the Corporate Business Plan, further improving
the Company’s business portfolio. In the Corporate Business Plan, target figures, including ROE
and ROI, were set and the progress of the plan is regularly examined by the Board of Directors,
the details of which are disclosed on Sumitomo Chemical’s website, etc.

-9-

Initiatives aimed at enhancing corporate value:
https://www.sumitomo-chem.co.jp/english/ir/policy/corporate_value/
Sumitomo Chemical Annual Report:
https://www.sumitomo-chem.co.jp/english/ir/library/annual_report/

2. Capital Structure
Foreign Shareholding Ratio

10% or more but less than 20%[Status of Major Shareholders]Name / Company Name

Number of Shares Owned

The Master Trust Bank of Japan, Ltd. (Trust account)
Custody Bank of Japan, Ltd. (Trust account)
Sumitomo Life Insurance Company
BNYMSANV AS AGENT/CLIENTS LUX UCITS NON TREATY 1
Nippon Life Insurance Company

Percentage (%)

231,385,700
98,584,800
71,000,000
48,205,800
41,031,597

14.14
6.02
4.33
2.94
2.50

29,000,000

1.77

Mitsubishi UFJ Morgan Stanley Securities Co., Ltd.

28,516,714
27,801,800
23,619,188

1.74
1.69
1.44

Sumitomo Mitsui Banking Corporation

23,073,000

1.41

Custody Bank of Japan, Ltd. (Master trust for the Sumitomo Mitsui Trust
Bank and trust account for retirement benefit for Sumitomo Life Insurance
Company)
Sumitomo Chemical Employee Stock Ownership Plan
Custody Bank of Japan, Ltd. (Trust account 4)

Controlling Shareholder (except for Parent
Company)―――

Parent Company

None

Supplementary Explanation―――

3. Corporate Attributes
Listed Stock Market and Market Section

Tokyo Stock Exchange, Prime

Fiscal Year-End

MarchType of Business

Chemicals

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

1,000 or more
¥1 trillion or more
100 or more but less than 300- 10 -

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

5. Other Special Circumstances which may have Material Impact on Corporate Governance(1) Views and policies
concerninggroup
management

The Company owns listed subsidiaries. The Company and its listed subsidiaries
develop business under the Group strategy that is shared by all parties and aim toachieve synergistic effects and realize maximum corporate value and maximum
managing results as a whole group, while also aiming to grow each of their businesses.
In addition, the Company and its listed subsidiaries basically respect the independenceof each company and the rights of minor shareholders in regard to their business
operations and dealings.

In the Company’s current Corporate Business Plan, the Company aims to foster andstrengthen the next-generation business by strengthening each of the existing
businesses and taking advantage of synergy of technologies the Company cangenerate as a diversified chemical company. In the course of preparing the
Corporate Business Plan of the Company Group, sufficient discussions on
business portfolios, including businesses of the listed subsidiaries, have been held
repeatedly at the Board of Directors meeting.
Moreover, with respect to the listed subsidiaries, the Company has received
reports on each of their respective mid-term management plan and has confirmed
whether or not their management policies and business strategies contribute to the
mid and long-term growth of the Company Group.
In the future, the Company will make efforts to increase corporate value of thegroup as a whole through review of plans for further enhancement of synergy
between businesses and reconsideration of business portfolios, etc.
(2) Significance etc. of owning listed subsidiaries(a) Sumitomo Pharma The Company owns 51.68% of the shares in Sumitomo Pharma Co., Ltd.
Co., Ltd.
Pharmaceuticals business, along with the agricultural chemicals business, is one of the
key businesses of the Company’s life science business and is the source of innovation.
In the current Corporate Business Plan, the Company has positioned “healthcare” asone of the focusing areas in making efforts for acceleration of creating the nextgeneration business and, as a result, this company, which forms the core of thepharmaceutical division, is treated as a subsidiary because of its importance in thestrategy of the Company Group.
The Company will continue to focus on contributing to the growth of both companies
and maximization of the corporate value of the Company Group by effectively
combining the most advanced promising technologies held by both companies, suchas organic synthesis, safety appraisals, bio-genome and digital related technologies,
and making efforts in creating new values in the healthcare field.
(b) Tanaka Chemical The Company owns 50.43% of the shares in Tanaka Chemical Corporation.
Corporation
Tanaka Chemical Corporation mainly engages in manufacturing and sales ofprecursors of positive electrode materials for rechargeable batteries. Throughintegration of the technologies relating to precursors held by Tanaka Chemical
Corporation and the findings related to positive electrode materials held by theCompany, the Company accelerates joint development of new products andcontributes to the expansion of the Company group’s business concerning positiveelectrode materials, and, as a result, this company is treated as a subsidiary because of
its importance in the strategy of the Company Group.
The Company will continue to contribute to the maximization of the corporate
value of the Company Group as a whole by a drastic rationalization of- 11 -

(c) Koei Chemical Co.,Ltd.

(d) Taoka Chemical Co.,Ltd.

manufacturing process and optimization of research and development throughintegration of the technologies of both companies.
The Company owns 55.74% of the shares in Koei Chemical Co., Ltd.
Koei Chemical Co., Ltd. mainly engages in manufacturing and sales of chemical
products and the like and pharmaceutical and agrochemical intermediates etc. Koei
Chemical Co., Ltd. contributes to the growth of both companies and the expansion ofbusiness of the Company Group in the field of fine chemicals through outsourcing
from the Company to manufacture catalyst and electronic materials etc. (which are
based on the unique organic synthesis technologies of Koei Chemical Co., Ltd.), and,as a result, this company is treated as a subsidiary because of its importance in thestrategy of the Company Group. Furthermore, the plant of Koei Chemical Co., Ltd.
(located in Sode-ga-ura City of Chiba Prefecture) lies within the same premises as theCompany’s Chiba Works and, by utilizing such advantage to the fullest extent, bothcompanies have pursued streamlining of each company as well as cost reductions,which includes sharing of utilities.
The Company owns 50.19% of the shares in Taoka Chemical Co., Ltd.
Taoka Chemical Co., Ltd. mainly engages in manufacturing and sales of dye,
pharmaceutical and agrochemical intermediates, functional materials, etc. Taoka
Chemical Co., Ltd. contributes to the growth of both companies and the expansion ofbusiness of the Company Group in the field of fine chemicals through outsourcing
from the Company to manufacture electronic materials and pharmaceutical andagrochemical intermediates etc. (which utilize various organic synthesis technologies
and numerous multi-purpose manufacturing equipment (multi-plants) held by Taoka
Chemical Co., Ltd.) and, as a result, this company is treated as a subsidiary becauseof its importance in the strategy of the Company Group.
The Company believes that keeping the above companies listed is satisfyingly
reasonable because it will lead to improvement of employees’ morale, recruitment of
excellent human resources, gaining trust from clients, etc. as a result of its status or its
brand as a listed company.

(3) Measures to secure
effectivenessof
governance system forlisted subsidiaries(4) Contracts etc. related
to the details which shallbe described as views andpolicies concerning groupmanagement

When the Company and its listed subsidiaries jointly work on maximizing groupsynergy, the Company respects independent decision making by listed subsidiaries
and, at the same time, makes its best efforts to establish an effective governance system
in order to avoid any conflicts of interests with minor shareholders.
With respect to the listed subsidiaries, the efforts are made in (i) electing sufficientnumber of Independent Outside Directors, (ii) establishing committees for nominationof officers and remuneration of officers, the majority of the members of which are
Independent Outside Directors, and (iii) establishing and reliably operating
committees, which aim to monitor and supervise transactions conducted between
subsidiaries and the parent company and which is composed of Independent Outside
Directors only, so that the transactions with the parent company, nomination of officers
and remuneration of officers are appropriately supervised from an independent andobjective perspective.
Please refer to Appendix (3) for design of the organs, composition of Independent
Outside Directors and establishment of non-mandatory committees in each company.
Upon promotion of group management, the Company has set forth the Rules forOperating the Sumitomo Group, which aims to (i) establish and continuously developInternal Control System in the Company Group, (ii) run business operations under thegroup strategies shared or acknowledged by all parties and (iii) maximize themanaging results of the group as a whole through achievement of synergetic effects asa group. It is also provided for in these Rules that, with respect to the matters which
require risk management as a group (such as opening of a business in large scale,investments or loans), the listed subsidiaries are required to consult, etc. in advanceon condition that they are able to make decisions independently.
In addition, with respect to the operation of the group companies (including the listed
subsidiaries), not only are the relative matters periodically reported and discussed at
the Board of Directors meetings of the Company but also are the relative mattersreported and discussed from the viewpoint of the group as a whole at the “Internal- 12 -

Control Committee,” “Sustainability Promotion Committee,” “Responsible Care
Committee,” “Risk and Crisis Management Committee,” “Compliance Committee”
and “Committee for Promoting Respect for Human Rights,” which all discuss
important matters related to the management of the Company or the Company Group
from a wide-ranging and diversified perspective, thereby fulfilling execution ofoperation and overseeing functions of the group companies.

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 Corporate Auditors[Directors]
Maximum Number of Directors Stipulated in

15

Articles of Incorporation
Term of Office Stipulated in Articles of

One year

Incorporation

Number of Directors

Company Chairperson (excluding
concurrently serves as President)
10

Appointment of Outside Directors

Appointed

Number of Outside Directors

5

Number of Independent Directors

5

Chairperson of the Board

where

he/sheOutside Directors’ Relationship with the Company (1)NameAttribute

Relationship with the Company*
a

b

c

d

e

f

g

H

i

j

k

Hiroshi Tomono

From another company

Motoshige Itoh

Academic○

Atsuko Muraki

Other

○

Akira Ichikawa

From another company

Yumiko Noda

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

- 13 -

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 or otherproperty from the Company besides compensation as a director/kansayaku
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, between which and the Company outside directors/kansayaku 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
Outside Directors’ Relationship with the Company (2)Designation as
Independent
Director

Supplementary
Explanation of
the Relationship

Hiroshi Tomono○

The Company has
transactions with Nippon
Steel Corporation where
Mr. Hiroshi Tomono waspreviously employed;
however, the amount of
said transactions is verysmall, not more than 0.1%of the consolidated sales
revenue of our Group.
Therefore such transaction
does not have any influenceon his independence.
Furthermore, Mr. Hiroshi
Tomono has no special
interest in the Company.

Motoshige Itoh○

Mr. Motoshige Itoh has no
special interest in the
CompanyName- 14 -

Reasons of Appointment
Mr. Hiroshi Tomono was elected as an
Outside Director of the Company in June2015 with expectation of, among otherthings, appropriately supervising thedecision makings and execution ofoperation concerning importantmanagerial matters conducted by the
Board of Directors, giving well-balanced
advice through overview of the
management in general, giving
suggestions based on his expertise (suchas in the field of research, technology andmanufacture) and backing up appropriate
risk-takings by making the best of his
broad experience and profound insightcultivated as a manager of a businesscorporation, and thereafter performs his
duties.
He is appointed as a member of the nonmandatory Nomination Advisory
Committee and Remuneration Advisory
Committee and receives compensation;
however, the Company considers that noconflict of interest is likely to arise
between Mr. Hiroshi Tomono and theCompany's general shareholders fromsuch payment.
Mr. Motoshige Itoh was elected as an
Outside Director of the Company in June2018 with expectation of, among otherthings, appropriately supervising thedecision makings and execution ofoperation concerning importantmanagerial matters conducted by the
Board of Directors and giving advice andAtsuko Muraki

Akira Ichikawa○

Ms. Atsuko Muraki has no
special interest in the
Company○

The Company has
transactions with Sumitomo
Forestry Co., Ltd. where
Mr. Akira Ichikawa serves
as a Representative
Director and Chairman;
however, the amount of
said transactions is verysmall, not more than 0.1%of the consolidated sales
revenue of our Group.
Therefore such transaction- 15 -

suggestions based on his high level ofexpertise, by making the best of his broad
experience and profound insight in thearea of economics, social affairs etc. byholding positions as a member of various
government councils etc., in addition tohis professional knowledge in economics
from holding a professorship at anuniversity for many years, and thereafter
performs his duties.
He is appointed as a member of the nonmandatory Nomination Advisory
Committee and Remuneration Advisory
Committee and receives compensation;
however, the Company considers that noconflict of interest is likely to arise
between Mr. Motoshige Itoh and theCompany's general shareholders fromsuch payment.
Ms. Atsuko Muraki was elected as an
Outside Director of the Company in June2018 with expectation of, among otherthings, appropriately supervising thedecision makings and execution ofoperation concerning importantmanagerial matters conducted by the
Board of Directors and giving advice andsuggestions based on her high level ofexpertise, by making the best of her broad
experience and profound insight in thearea of legal and social affairs, etc.
obtained through her engagement in
administration as a government official
for many years and especially her expert
knowledge in relation to personnel affairs,
and thereafter performs her duties.
She is appointed as a member of the nonmandatory Nomination Advisory
Committee and Remuneration Advisory
Committee and receives compensation;
however, the Company considers that noconflict of interest is likely to arise
between Ms. Atsuko Muraki and theCompany's general shareholders fromsuch payment.
Mr. Akira Ichikawa was elected as an
Outside Director of the Company in June
2022 with expectation of, among otherthings, appropriately supervising thedecision makings and execution ofoperation concerning importantmanagerial matters conducted by the
Board of Directors, giving well-balanced
advice through overview of the
management in general, giving
suggestions based on his expertise (suchas global operation and sustainability) anddoes not have any influenceon his independence.
Furthermore, Mr. Akira
Ichikawa has no special
interest in the Company.

Yumiko Noda

Ms. Yumiko Noda has no
special interest in the
Company○

Voluntary Establishment of Committee(s)Corresponding to Nomination Committee orRemuneration Committee

backing up appropriate risk-takings bymaking the best of his broad experienceand profound insight cultivated as amanager of a business corporation, andthereafter performs his duties.
He is appointed as a member of the nonmandatory Nomination Advisory
Committee and Remuneration Advisory
Committee and receives compensation;
however, the Company considers that noconflict of interest is likely to arise
between Mr. Akira Ichikawa and theCompany's general shareholders fromsuch payment.
Ms. Yumiko Noda was elected as an
Outside Director of the Company in June
2024 with expectation of, among otherthings, making decisions on importantmanagement matters at the Board of
Directors of the Company,
appropriately overseeing businessexecution, providing well-balanced
advice based on a holistic view on overallmanagement, making
recommendations based on her expertisein global management,
finance and other areas, and supporting
appropriate risk-taking, bymaking use of her abundant experienceand extensive knowledge as amanagement executive of a globally
expanding business corporation,
as well as her deep expertise in finance atfinancial institutions andconsulting firms, and thereafter performs
her duties.

Established

Committee’s Name, Composition, and Attributes of Chairperson
Committee
Corresponding
Nomination Committee

toCommittee
Corresponding
Remuneration Committee

Committee’s Name

Nomination Advisory Committee

Remuneration Advisory Committee

All Committee Members

7

7

Full-time Members

00Inside Directors

22

Outside Directors

55Outside Experts

00- 16 -

toOther00Chairperson

Inside Director

Inside Director

As a subordinate body of the Board of Directors, the Company will establish the Nomination Advisory

Committee and the Remuneration Advisory Committee, which are mainly composed of Outside Directors, and will
discuss and advise to the Board of Directors on matters, such as appointment of Chief Executive Officer,
nomination of candidates for Directors and Corporate Auditors, appointment of Senior Management, andremuneration system and levels of Directors and Executive Officers. In addition, the Remuneration Advisory
Committee is entrusted by the Board of Directors to determine the individual amounts of remuneration for the
Senior Management and Directors based on the “Policies for Determining Remuneration of Senior Management
and Directors.”

The committee members and the activity status of each committee in FY 2023 are as follows:“Nomination Advisory Committee”
Name
Attending status
Chairman Masakazu Tokura
3 out of 3 times（100％）
Member

Keiichi Iwata 3 out of 3 times（100％）

MemberHiroshi Tomono

3 out of 3 times（100％）

MemberMotoshige Itoh

3 out of 3 times（100％）

MemberAtsuko Muraki

3 out of 3 times（100％）

MemberAkira Ichikawa

3 out of 3 times（100％）

Major activities:
・Discussions on the composition of the Directors in June 2024
・Discussions on who shall be the officers in FY 2024
“Remuneration Advisory Committee”
Name

Attending status

Chairman Masakazu Tokura

4 out of 4 times（100％）

Member

Keiichi Iwata

4 out of 4 times（100％）

MemberHiroshi Tomono

4 out of 4 times（100％）

MemberMotoshige Itoh

4 out of 4 times（100％）

MemberAtsuko Muraki

4 out of 4 times（100％）

MemberAkira Ichikawa

4 out of 4 times（100％）

Major activities:
・Discussions on the remuneration levels of officers
・Discussions on the bonuses of officers
・Discussions on and determination of the individual remuneration and bonuses of Directors and senior
management―――[Kansayaku]- 17 -

Establishment of Kansayaku Board
Maximum Number of Kansayaku Stipulated in
Articles of Incorporation

Established6
5

Number of Kansayaku

Cooperation among Kansayaku, Accounting Auditors and Internal Audit Departments
Corporate Auditors will maintain close cooperation with Accounting Auditors and, at the beginning of each fiscal
year, will receive explanation from such Accounting Auditors of the audit policy and audit plan for such fiscal year.
In addition, Corporate Auditors enhances its connection with Accounting Auditors by receiving reports andexchanging opinions, as needed, on accounting audits conducted by Accounting Auditors, and if deemed necessary,conduct an accounting audit in their own independent position. Corporate Auditors are informed in advance of thepolicy, implementation plan, point of focus, etc. of the internal audit to be conducted by the Internal Control and
Audit Department and collaborate with the Internal Control and Audit Department, such as by receiving reports on
the progress and results of the internal audit.
Furthermore, Corporate Auditors collaborate with the Compliance Committee such as by receiving reports, fromtime to time, in regard to violation of compliance and cases reported through “Speak-Up Hotline” (including statusof response to such incident). In order to ensure independence in the handling of whistleblowing cases, theCompany has introduced a system in which whistleblowing regarding the Senior Management is only reported to
the Company’s Board of Corporate Auditors, and investigations on such reports are conducted based on the adviceof the Board of Corporate Auditors, which may, if necessary in light of the results of such investigation, give advice
on the necessary countermeasures.

Appointment of Outside Kansayaku

Appointed

Number of Outside Kansayaku

3

Number of Independent Kansayaku

3Outside Kansayaku’s Relationship with the Company (1)NameAttribute

Relationship with the Company*
a

b

c

d

e

f

g

h

i

j

k

l

m

LawyerCPA
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

Mitsuhiro Aso
Yoshitaka Kato
Michio Yoneda***

a. 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. Kansayaku 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 kansayaku- 18 -

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 kansayaku himself/herself only)
k. Executive of a company, between which and the Company outside directors/kansayaku are mutually
appointed (the kansayaku himself/herself only)
l. Executive of a company or organization that receives a donation from the Company (the kansayaku
himself/herself only)
m. Others

Outside Kansayaku’s Relationship with the Company (2)Name

Mitsuhiro Aso

Yoshitaka
Kato

Designation as
Independent
Kansayaku

Supplementary Explanation of
the Relationship○

Mr. Mitsuhiro Aso has no special
interest in the Company○

Ernst & Young ShinNihon LLC, inwhich Mr. Yoshitaka Kato held
important positions in the past, is not
the auditing corporation that
conducts statutory audits of theCompany and also has no capital
relationship or business relationships
with the Company that may affecthis independence.
Also, Mr. Yoshitaka Kato has no
special interest in the Company.

- 19 -

Reasons of Appointment
Mr. Mitsuhiro Aso was elected as an
Outside Corporate Auditor of theCompany with expectation of,among other things, performing
audits from an objective standpointby making the best of his specialized
knowledge and experience as alawyer and also his long years as apublic prosecutor as well as his
broad knowledge and deep insight in
the area of corporate risk
management and crisis management
etc. and expressing opinions on
points to consider etc. upon
corporate management and corporate
governance, and thereafter performs
his duties.
Mr. Mitsuhiro Aso maintains aneutral and fair position as anindependent body having
entrustment from the Company's
shareholders, and no conflict ofinterest is considered to arise
between Mr. Mitsuhiro Aso and theCompany's general shareholders.
Mr. Yoshitaka Kato was appointed as
an Outside Corporate Auditor of theCompany with expectation of,among other things, performing
audits from an objective standpointby making the best of his advanced
specialized knowledge, broad
experience and deep insight in thearea of corporate accounting,financial affairs and corporate audit
work acquired from his long years asa certified public accountant andexpressing opinions on points toconsider etc. upon corporate

Michio
Yoneda○The Company pays listing fees, etc.
for listed securities to the Tokyo
Stock Exchange Inc., in which Mr.
Michio Yoneda was a director in thepast. However, such payment does
not affect his independence.
Also, Mr. Michio Yoneda has no
special interest in the Company.

management and corporate
governance, and thereafter performs
his duties.
Mr. Yoshitaka Kato maintains aneutral and fair position as anindependent body having
entrustment from the Company's
shareholders, and no conflict ofinterest is considered to arise
between Mr. Yoshitaka Kato and theCompany's general shareholders.
Mr. Michio Yoneda was appointed as
an Outside Corporate Auditor of theCompany with expectation of,among other things, performing
audits of the Company by making
the best of his broad experience anddeep insight regarding capital
market and business management
cultivated from his years ofengagement in the management ofJapanese financial and security
market and management of a stock
exchange and expressing opinions
on points to consider etc. upon
corporate management and corporate
governance, and thereafter performs
his duties.

[Independent Directors/Kansayaku]
Number of Independent Directors/Kansayaku

8

Matters relating to Independent Directors/Kansayaku
The Company designates all persons that fulfill the qualification of independent directors and corporate auditors as
Independent Directors and Corporate Auditors.

[Incentives]
Incentive Policies for Directors

Performance-linked Remuneration

Supplementary Explanation
Please refer to Section “I. l. <Principle 3-1> 【Policies and Procedures for Determining Remuneration of
Senior Management and Directors】 of this report, as the policies etc. for performance-linked remuneration
have been described there.

Recipients of Stock Options―――

Supplementary Explanation―――- 20 -

[Director Remuneration]
DisclosureofIndividual

Directors’

Remuneration

No Individual Disclosure

Supplementary Explanation
The total amount of remunerations paid to Directors for each fiscal year is stated in the securities report and business
report. Securities reports are made available for public inspections through EDINET (the electronic disclosuresystem under the Financial Instruments and Exchange Act regarding disclosure documents such as securities
reports).

Policy on Determining Remuneration Amounts
and Calculation Methods

Established

Disclosure of Policy on Determining Remuneration Amounts and Calculation Methods
Please refer to Section “I. l. <Principle 3-1> 【Policies and Procedures for Determining Remuneration of
Senior Management and Directors】 of this report, as the details have been described there.

[Supporting System for Outside Directors and/or Kansayaku]
Outside Directors and Outside Corporate Auditors attend the Board of Directors meeting after first receiving
briefings from responsible departments to deepen their understanding on the agendum and important issues of suchmeeting and also, in order to deepen its understanding of the status of the Company's business, take part in visits
to domestic or overseas business locations every year, thereby overseeing the Company’ management.
In regard to Outside Corporate Auditors, the Company establishes a dedicated organizational unit to assist the dutyof Corporate Auditors and allocates full-time staff members to such unit that are subject to the supervision andcommand of Corporate Auditors, thereby strengthening Corporate Auditor's authority. The Company makes surethat Outside Corporate Auditors receive briefings from responsible departments in advance regarding agendum of
the Board of Directors and reports or briefings as appropriate from departments in charge of operations (including
the Internal Control and Audit Department), Accounting Auditors, etc., thereby securing the structure of the flowof information to Outside Corporate Auditors.

[Retired presidents/CEOs holding advisory positions (sodanyaku, komon, etc.)]
Information on retired presidents/CEOs holding advisory positions (sodanyaku, komon, etc.)

Name

Job title/
position

Employment terms
Responsibilities(Full/part time, with/withoutcompensation, etc.)

Number of retired presidents/CEOs holding
advisory positions (sodanyaku, komon, etc.)

0 person- 21 -

Date

whenformerrole

as president/
CEO ended

Term・Sodanyaku (Counselor) is not involved in any decision making of the Company’s management. (Noninvolvement in management)
・Appointment of Sodanyaku (Counselor) is resolved at the Board of Directors.
・Currently, there is no person who has assumed the position of Sodanyaku (Counselor).
―――

2.Matters on Functions of Business Execution, Auditing, Oversight, Nomination and Remuneration
Decisions (Overview of Current Corporate Governance System)(1) Business Management Organization relating to Management Decision Making, Execution and Oversight
The Company adopts the Corporate Auditors system. Also, in order to enhance swift decision making and to clarify
who bears the responsibility of the execution of operation, the Company adopts the Executive Officers system andlimits the Director's term of office to 1 year in order to establish a management system that is able to quickly adjust
to changes in the management environment. The present management system consists of 10 Directors (AllJapanese. 8 Males and 2 Females) and 37 Executive Officers (4 are concurrent with Directors. Breakdown of
Executive Officers: 35 Japanese and 2 Foreigners; 34 Males and 3 Females). The Board of Directors makes
decisions on important management matters in accordance with the provisions of laws and regulations, Articles ofIncorporation and the Board of Directors regulations, and also monitors and oversees performance of the duties ofeach Director. For the period of 1 year after the General Shareholders’ Meeting held on June 21, 2023, the Boardof Directors meeting was held 13 times, and all of the Directors and Corporate Auditors attended all of those 14
meetings. Executive Officers execute operations in accordance with the management strategy decided at the Boardof Directors, by delegation of authority from the Representative Director.
The Management Meeting is an organization which discusses important matters, such as management strategies
and capital investment, which include agendas presented and matters reported to Directors, and supports
management decision making. Members of the Management Meeting consist of Executive Officers who control orare in charge of important management functions, full-time Corporate Auditors and chairman of the Board of
Directors meeting and the Meeting is held 24 times per year, in principle.
Other internal meetings (such as "Internal Control Committee", "Sustainability Promotion Committee","Responsible Care Committee," “Risk and Crisis Management Committee,” “Compliance Committee” or othermeetings) that discuss important matters related to the management of the Company or the Company Group froma wide-ranging and diversified perspective are established in order to fulfill execution of operation, overseeing
functions, etc. Each of the internal meetings is held once or more each year.
(2) Status of Corporate Audits by Corporate Auditors
There are 5 Corporate Auditors, of which 3 are Outside Corporate Auditors. Pursuant to, among other things, thebasic plan of the audit and the assignment of the responsibility determined by the Board of Corporate Auditors,
Corporate Auditors attend important meetings (such as the Board of Directors and others) as well as review
important documents regarding important decision making and conduct investigation etc. regarding the status ofbusiness or assets of the headquarter, major business locations and Group Companies. Also, they receive, whenappropriate, reports and explanation from the "Internal Control and Audit Department" and Accounting Auditors inorder to improve the effectiveness and efficiency of oversight.
(3) Status of Internal Audit
Internal audit is conducted by the "Internal Control and Audit Department", which is a department that is solely
dedicated to internal audits. Internal audits are conducted to audit whether internal control effectively functions andoperations are properly and reasonably carried out by officers and employees of Sumitomo Chemical Group.
Furthermore, in regard to matters relating to environment, safety, PL (product safety), etc., the department in charge(the Responsible Care Dept.) conducts responsible care audits. Appointment of the chiefs of the Internal Control
and Audit Department and the Responsible Care Department are matters to be resolved at the Board of Directors
meetings.

- 22 -

(4) Status of Accounting Audit
KPMG AZSA LLC is engaged in the auditing service regarding accounting audits made in accordance with theCompanies Act and the Financial Instruments and Exchange Act. The names of certified public accountants that
executed the accounting audit services for this fiscal year are as follows:
Certified public accountants that executed the accounting audit service:
Designated Limited Liability Partner/Executive Member: Ayumu Nakajima, Ryohei Tomita, Naoto
Watanabe(5) Status of Advisory Committee
The Company establishes the "Nomination Advisory Committee" under the Board of Directors, consisting mainlyof Outside Directors and Outside Corporate Auditors, and receives advice from the Committee when electing Senior
Management and nominating candidates for Directors and candidates for Corporate Auditors.

3. Reasons for Adoption of Current Corporate Governance System
The Company adopts the Corporate Auditor system where the majority of Corporate Auditors shall be Outside
Corporate Auditors and the Company receives valuable feedback regarding the soundness of company management
as well as the efficiency thereof from Corporate Auditors. By using such feedback in the execution of operation,
the Company endeavors to enhance the function of Corporate Auditors, thereby strengthening its monitoring
function.
In addition, since its first appointment of 1 Outside Director in 2012, the Company increased the number of Outside
Directors by 2 in 2015, by 1 in 2018 and by 1 in 2024, currently having 5 Outside Directors in total. The ratio of
Outside Directors and Outside Corporate Auditors to Directors and Corporate Auditors who are supposed to attend
a Board of Directors meeting is one-half or more of the total members. Under this system, the Company is aiming
to further enhance the supervisory function of the Board of Directors and further improve the transparency andobjectivity of the management of the Company.

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
Early Notification of General
Shareholder Meeting

Scheduling AGMs Avoiding
the Peak Day
Allowing Electronic Exerciseof Voting Rights
Participation in Electronic
Voting Platform
Providing Convocation Noticein English
Other

The Company endeavors to hold the General Meeting of Shareholders on a dateas early as possible and to send convocation notices as early as possible (Date of
the General Meeting of Shareholders: June 21, 2024, Start Date of Electronic
Provision Measures for Convocation Notices: May 23, 2024 and Date of Mailing:
May 31, 2024).
The Company endeavors to set the General Meeting of Shareholders on a dateother than the so-called peak day.
The Company has adopted exercise of voting rights using electromagnetic means.
The Company has adopted participation to the Electronic Voting Platform.
The Company posts the convocation notice in English on its website and on thewebsite of the Securities Exchange.
The Company live-streams the General Meeting of Shareholders online for, andaccepts questions in advance from, its shareholders.

2. IR Activities
Supplementary Explanations- 23 -

Explanation byRepresentativePreparation and Publication ofDisclosure Policy
Regular Investor Briefings for
Individual Investors

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

The Company’s disclosure policy is made public below:
https://www.sumitomochem.co.jp/english/ir/policy/disclosure_policy/
The person responsible for IR provides briefings on the Company
to individual investors several times a year.
Also, in order to provide information to individual investors,
materials and video's on briefing sessions for analysts andinstitutional investors are disclosed on the Company’s website.
The Company provides financial results briefing (4 times peryear), as well as, among other things, briefings on the Company's
management strategy (several times per year), IR Days and ESG
explanatory meetings to analysts and institutional investors. In
addition, the Company periodically holds small meetings with
the President for analysts and institutional investors.
Every year, the Company makes individual visits to investors in
Europe, USA, Asia and other regions.
The Company posts various materials on the IR section of theCompany’s website
https://www.sumitomo-chem.co.jp/english/ir/
The Company has established the "Corporate Communications
Department" as a department in charge of IR, and endeavors tostrengthen and promote IR and PR activities by continuously andtimely providing to shareholders and institutional investors, in afair and equitable manner, information that is necessary formaking investment decisions.

No

Yes

Yes

3. Measures to Ensure Due Respect for Stakeholders
Supplementary Explanations
Stipulation of Internal Rules
for Respecting the Position of
Stakeholders
ImplementationofEnvironmental Activities, CSR
Activities etc.

Other

The Company has established the "Sumitomo Chemical Charter for BusinessConduct", which codifies the basic code of behavior regarding company activities
and the Compliance Manual that stipulates specific policies thereof, and has
manualized and distributed them to all officers and employees.
The Sumitomo Chemical Group sets the promotion of sustainability as its basic
management policy, and deals with the pursuit of economic efficiency,
environment, safety and quality assurance activities, and social activities in abalanced manner. Furthermore, as Responsible Care activities, the Sumitomo
Chemical Group establishes the "Corporate Policy on Responsible Care (Safety,
Health, Environment and Product Quality)" on matters regarding safety,
environment and quality in every stage of its business activities that must be given
top priority, and uses such policy as the basis of the business operation of theCompany and informs the whole Group of this policy.
Furthermore, in 2018, in order to deal with the realization of a sustainable society
in an integrated manner, the Company established a "Sustainability Promotion
Committee". Through this Committee, the Company views management
activities of our Group in an integrated manner and reviews its contribution tosustainability from a higher perspective, thereby accelerating its efforts toward
SDGs and other social problems solution.
The present management system consists of 10 Directors (All Japanese. 8 Males
and 2 Females) and 37 Executive Officers (4 are concurrent with Directors.
Breakdown of Execution Officers: 35 Japanese, 2 Foreigners; 34 Males, 3
Females).

- 24 -

IV. Matters Related to the Internal Control System
1. Basic Views on Internal Control System and the Progress of System Development
1. Fundamental Principles(1) The Company will, based on the business spirit and the Business Philosophy of Sumitomo, conduct businessactivities in accordance with the “Basic Principles of Sustainability Promotion” and “Sumitomo Chemical Charterfor Business Conduct” so that the business group composed of the Company and the Company Group will promotesustainability, namely contribute to the achievement of sustainable society through our business and achieve ourown sustainable growth.
(2) The Company recognizes that establishing a system necessary to ensure the proper conduct of business(hereinafter, “Internal Control System,”) is a process required for the sound sustenance of the organization andshould be undertaken proactively in order to accomplish the Company’s business objectives. Recognizing this, theCompany shall establish its Internal Control System as outlined below and alter it as necessary in response tochanges in the Company’s business environment, thereby conducting business operations that fulfill the interest of
its shareholders and all other stakeholders. In addition, the Company shall establish a dedicated committee orcommittees to ensure attaining the above objectives
2. A system for ensuring that the Company’s Directors execute their business duties in compliance with the laws
and the Company’s Articles of Incorporation(1) The Company shall institute, as its corporate bodies, General Meeting of Shareholders, Directors, the Board of
Directors, Corporate Auditors, Board of Corporate Auditors and Accounting Auditors in accordance with the laws
and the Articles of Incorporation. In addition, with respect to Directors and Corporate Auditors, several Outside
Directors and Outside Corporate Auditors with independence shall be appointed. In order to increase thetransparency and fairness of nominations of Directors and Corporate Auditors and compensations of Directors, theNomination Advisory Committee and the Remuneration Advisory Committee, of which Outside
Directors/Corporate Auditors have the majority, shall be established.
(2) Directors shall observe all applicable laws, the Articles of Incorporation and resolutions of the General Meetingof Shareholders. They shall also have an obligation to be attentive to their duties as good managers and carry out
these duties faithfully. The term of office for Director shall be one year to allow for a swift response to changes inthe business environment of the Company. The Board of Directors shall assume supervisory responsibility to ensurethat Directors observe all applicable laws and the Company's Articles of Incorporation, and that Directors establish
and operate an adequate Internal Control System pursuant to the basic policies contained herein.
(3) Directors shall establish systems for ensuring required reliability of financial reporting and the proper and timely
disclosure of information concerning the Company.
3. A system for the retention and management of information regarding the execution of business duties by theCompany’s Directors
The Company shall establish rules prescribing the manner of retention, disposal and management and operating
method of the information system concerning the business-related information handled in various media. The
Company shall retain and manage information properly by establishing a management system pursuant to suchrules.
4. A system for ensuring the efficient execution of business duties by Directors of the Company and its groupcompanies(1) The Board of Directors shall properly determine the targets for important issues concerning business policies,
planned business undertakings, accounting & finance, research & development, etc. of the corporate groupconsisting of the Company and its group companies (the "corporate group," hereinafter referred to as the “Group”)
and shall monitor the progress of work toward the targets.
(2) The Board of Directors shall appoint Executive Officers to promote the expeditious execution of business andmore clearly define their responsibilities, and shall cause the Executive Officers to perform businesses specificallyentrusted to them in their respective fields determined by the Board.
(3) Directors shall work to get information about management activities of the Group in a prompt and appropriatemanner by establishing management information systems utilizing information technology.
5. A system for ensuring that the Company’s employees and its group companies’ Directors and employees carryout their business assignments in compliance with the laws and the Articles of Incorporation- 25 -

(1) The Company shall strive to ensure that all employees are fully aware of their obligation to abide by the law
and to develop a sound corporate culture by educating employees about compliance with social norms andcontinually raising the level of business ethics, based on the principles in the “Sumitomo Chemical Charter for
Business Conduct.”(2) The Company, through an internal committee governing “compliance,” shall investigate and oversee the statusof compliance and, if necessary, recommend improvements.
(3) The Company shall strive to promptly identify and rectify any violations or suspected violations of compliancethrough its internally established “Speak-Up Hotline,” which provides employees with an avenue for reporting such
violations or suspected violations.
(4) The Company shall establish a department in charge of internal auditing to verify that employees carry out theirduties in a proper and effective manner. They shall also take pertinent measures to carry out special controls or
auditing with regard to businesses, departments, systems, etc. that are exposed to risks that may result in significant
losses (hereinafter, “Risk”). Furthermore, when certain issues have been pointed out as a result of auditing by
Corporate Auditors, accounting auditors, the Company’s department in charge of internal auditing, etc., the relevant
departments, etc. of the Company that have been thus audited shall take appropriate remedial measures within a
specified period of time.
(5) The Company shall clearly define the roles and functions of each department, section, etc. by designing andestablishing an organization that will be most capable of conducting business activities in compliance with the law
and the Articles of Incorporation.
(6) In order to achieve its overall targets, the Company shall strive to ensure the fair operation of its personnel
management system, whereby employees are encouraged to set their own targets to be achieved, and theirperformance is assessed and compensation and incentives determined on the basis of the degree to which suchtargets have been achieved.
(7) The Company shall request its major group companies both in Japan and abroad to adopt and properly operate
a compliance system equivalent to that of the Company. It shall also work to establish, maintain, and enhance theeffective internal control of the Company and its group companies in their entirety by conducting internal audit.
6. A system of the Company and its group companies for risk management rules, procedures, etc.
(1) The Company shall establish rules for the Group to promote developing Risk awareness, ensure early detectionof Risks, prevent Risks from manifesting themselves, prepare plans to handle instances of emergency, etc.
(2) The Company shall, through its internally established committee overseeing risk management of the Group,
determine the Group’s policies on risk management, evaluate Risks involved, monitor and supervise the status ofwork on preparation and implementation of plans for the risk management and, where necessary, makerecommendation on improvements to be made.
(3) In the event that there occurs any incident of crisis which requires company-wide all-out efforts for resolution,
the Company shall promptly work to look into the situation affected by the crisis and resolve it by setting up a task
force headquarters.
7. A system regarding reporting to the Company about business operations of the Group and matters concerning
the execution of business duties by Directors etc. of the Company's group companies(1) The Company shall establish rules concerning operations of the Group, request its group companies both inJapan and abroad to report on their business policies, planned business undertakings, and other important mattersrelating to their business operations in accordance with the rules, and shall strive to deepen mutual understanding
and share management strategies with those group companies.
(2) The Company shall work to develop a system whereby the Company’s Corporate Auditors can exchange
information with corporate auditors and other auditing staff at its major group companies, and thereby jointly ensure
the effectiveness of audits throughout the Group.
8. A system for ensuring the effective conduct of audits by the Company’s Corporate Auditors(1) Matters concerning employees who are due to assist Corporate Auditors in performing their duties
The Company shall appoint an employee or employees who work full-time to assist its Corporate Auditors in
performing their duties under their direction in accordance with the Company rules. Personnel management mattersconcerning such an employee shall be settled with the prior approval of Corporate Auditors.
(2) Matters on reporting to the Corporate Auditorsi) The Company’s Directors and employees shall establish a system capable of ensuring that the Company’s
standing Corporate Auditors attend conferences on important issues of the Company or its group companies and,in addition, shall report as appropriate to the Corporate Auditors on matters based on the laws or on matters called
for by the Corporate Auditors about the Company or its group companies.

- 26 -

ii) The Company’s Directors shall report to its Corporate Auditors on internal audit plans to be conducted by aninternal audit department, the progress of the audit and its results.
iii) The Company shall establish a system capable of ensuring that none of the Company’s Directors and employees
or its group companies’ Directors, Corporate Auditors and employees will be put at any disadvantage on the groundof having reported to the Company’s Corporate Auditors.
(3) Matters concerning expenses arising from the performance by the Corporate Auditors of their duties
The Company shall establish a system capable of ensuring meeting expenses required for the execution by its
Corporate Auditors of their duties, with respect to those expenses that may arise from the performance by theCompany's Corporate Auditors of their duties.
(4) Other matters for ensuring the effective conduct of audits by the Corporate Auditors
Representative Directors shall hold regular meetings with the Company’s Corporate Auditors, to exchange views
and deepen mutual understanding about tasks to be undertaken by the Company, risks confronting the Company,
and the general state of the environment for auditing by Corporate Auditors.
9. A system for excluding influences of antisocial factions and groups
The Company shall never enter into any relationship, including transactional relations, with antisocial factions andgroups that threaten to disrupt the public order and safety of society, and shall take action against them across theCompany in a firmly determined and uncompromising manner, working closely with outside specialized
institutions.

2. Basic Views on Eliminating Anti-Social Forces
The Company explicitly stipulates in Compliance Manual, which is distributed to and thoroughly understood by its
officers and employees and also posted on the Company’s website that it shall take actions against antisocial
factions and groups in a firmly determined and uncompromising manner and shall never enter into any relationshipwith them. The Company sets the General Affairs Department as the department that has overall responsibility inthe handling of such affairs, and cooperates with external specialized agencies such as the police, collects andmanages information on antisocial factions, and disseminates information thereof and raises awareness within theGroup.

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

Not Adopted

Supplementary Explanation
The Company has no plans to adopt Anti-Takeover Measures.

2. Other Matters Concerning to Corporate Governance System(1) Please refer to Appendix (1) for the schematic diagram of the Corporate Governance Structure (including theInternal Control System).
(2) Summary of timely disclosure system
The status of the Company's internal structure regarding timely disclosure of company information is as follows.
Please refer to Appendix (2) for the schematic diagram.

- 27 -

A. Internal structure regarding timely disclosure of company information(a) Basic Policy
The Company ensures that active communication with people involved with the Company (such as shareholders,business connections, people of the local community, etc.) forms the basis of the business activities of the Company,
and the Company has the policy to conduct accurate and timely disclosure of its information (such as details of its
management, business activities etc.) in accordance with applicable laws and regulations. This policy is distributed
to, and thoroughly understood by, in the form of the Charter for Business Conduct and Compliance Manual of theCompany to all of its officers and employees.
(b) Organization Structure
The Corporate Communications Department is dedicated to and responsible for the disclosure of company
information and endeavors to conduct timely and continuous information disclosure in cooperation with relevant
departments.
In addition to important matters that are required to be disclosed by the Financial Instruments and Exchange Act
and disclosure rules stipulated by the securities exchange, the Company actively discloses information on mattersrelating to the operation, service and property of the Company or subsidiaries that are decided at the Board of
Directors, or matters that arise or are identified in any department that may affect investment decisions.
Furthermore, the Company endeavors to set occasions where officers etc. of the Company, including the President,
take the initiative in fulfilling its accountability.
(c) Management of Insider Information
The Company defines undisclosed important company information as "Insider Information" and has its officers andemployees strictly manage such information, and establishes company regulations setting forth that Insider
Information shall be intensively controlled by the "Legal Department" ("Insider Trading Management
Regulations"), thereby endeavoring to prevent acts that constitute, or may be viewed as, insider trading.
Furthermore, the internal structure regarding timely disclosure is as shown graphically in Appendix (2).
B. Monitoring on Management of Company Information
In regard to execution of operation by officers and employees of the Company, in order to inspect whether internal
control is established and effectively functions and whether company-wide operations are fairly and properly
conducted, audit by the "Internal Control and Audit Department" is conducted in addition to audits by Corporate
Auditors in accordance with the Companies Act. Also, internal audits to Group companies are conducted on aperiodic basis.
Moreover, the Company endeavors to maintain and improve sound execution of operation by establishing a"Compliance Committee", a company-wide organization and then formulating a system to monitor andoversee compliance of all laws, Charter for Business Conduct, Compliance Manual, etc. relating to businessactivities of its officers and employees. The Company’s group companies have the similar systems. With
respect to the violations of compliances found through internal audits conducted by “Internal Control and
Audit Department” and responsible care audits conducted by “Responsible Care Department” for theCompany and its group companies, since they are also important in terms of governance, they are either
reported regularly, or for serious cases, every time when it occurs, to the Board of Corporate Auditors to seek
its guidance and oversight. In addition, the cases reported through “Speak-Up Hotline” and the violationsof compliance in each Group company which are reported to the Compliance Committee of the Company andits group companies are treated similarly.

- 28 -

【Appendix (1)】Corporate Governance Structure

39【Appendix (2)】Company's internal structure regarding timely disclosure
Board of Directors
Decisions etc. made by the Board of
Directors

Timely and appropriate disclosure

Representative (President)

ReportDisclosureCollection of Insider Information(Legal Dept.)

Department responsible for information disclosure (Corporate
Communications Dept.)
Contact

・Information that is or may be insider information

Person responsible for handling information (General Manager ofCorporate Communications)・Matters decided at the Board of Directors, etc.
・Information that is likely to influence investment decisions, etc.

Source of generation of information

【Appendix (3)】Design of the organs, composition of Independent Outside Directors and establishment of nonmandatory committees in each of the following subsidiaries
Company Name

Design of organs

Composition of the Board

Non-mandatory committees established

Sumitomo

Company with Board of Corporate

The Board is composed of 8 members

・Nomination and Remuneration Advisory Committee

Auditors

including 4 Independent Outside Directors

・Supervising Committee for Conflict of Interests Arising fromPharmaCo., Ltd.

Transactions Conducted among Group Companies（＊）
TanakaChemicalCompany

with

Audit

Corporation

Supervisory Committee

Koei Chemical Co.,

Company

Ltd.

Supervisory Committee

with

Audit

and

and

The Board is composed of 7 members

・Nomination and Remuneration Advisory Committee

including 4 Independent Outside Directors

・Outside Officers Consulting Committee（＊）

The Board is composed of 9 members

・Nomination Advisory Committee

including 3 Independent Outside Directors

・Remuneration Advisory Committee
・Outside Directors Meeting（＊）

Taoka Chemical Co.,

Company

with

Audit

Ltd.

Supervisory Committee

and

The Board is composed of 10 members

・Officers’ Nomination Advisory and Consultation Committee

including 4 Independent Outside Directors

・Officers’ Remuneration Advisory and Consultation Committee
・Outside Officers Discussion Committee（＊）(＊) Committees which monitor and supervise the appropriateness of the transactions conducted with the parent company group.