Revised on December 22, 2021

TOKAI Holdings Corporation
Basic Policy on Corporate GovernanceThis basic policy has been established to formulate the policy for the Company's basic conceptsof corporate governance with the purpose to contribute to sustainable growth and increase ofcorporate value over the mid to long term of TOKAI group (the "Group").
Chapter 1. General Provisions
Article 1. Basic Concepts of Corporate Governance
1.

The Company is committed to enhancing its corporate governance in accordance withthe following basic concepts from the perspective of improving the Group's sustainablegrowth and increase of corporate value over the mid to long term in order to implementsound management based on a high level of self-discipline to establish strong credibility
from society:(i)the Company will create and maintain the environment that secures the substantive
equality of all shareholders and enables shareholders to properly exercise theirrights;(ii) the Company is primarily engaged in the business of providing individual customers
with basic infrastructure services for daily life including
energy/telecommunication/CATV and recognizes that most of these businesses aresupported by many stakeholders. In addition, in formulating andimplementing/operating business policies, we will conduct business activities fromthe perspective of compliance as well as focused on the contribution to the localcommunities;(iii) the Company will work to ensure the adequate disclosure of company information
including non-financial information and transparency in business management inorder to establish a foundation for constructive dialogue with stakeholders;(iv) the Company will, as a holding company, seek to ensure the effectiveness ofsupervisory functions over the business execution of each group company by theboard of directors, formulate mid to long term corporate strategies, and strive forsustainable growth and increase of corporate value; and(v) the Company will proactively have dialogues with shareholders/investors with aconstructive purpose as well as explain/disclose quantitative financial informationand non-financial information in a timely and adequately manner, whereby we willachieve corporate accountability and strive to meet the expectations of stakeholders
including shareholders/investors.

2.

The Group has formulated "TOKAI-WAY," the common philosophy of the group, which iscomprised of four layers that are "corporate philosophy," "mission," "vision" and "value"and shared with all employees of the group working to practice the same.

Chapter 2. Our Corporate Governance SystemArticle 2. Roles of Board of Directors
1.

The board of directors serves supervisory functions over the overall management including
execution of duties by a person executing business, and ensures fairness/transparency ofmanagement as well as makes a decision through decision of significant business execution
and other such matters that are specified under laws and regulations as the mattersrequired to be decided by the board of directors.

2.

With respect to the execution and decision of business other than significant businessexecution as specified in the preceding paragraph, the board of directors delegates theauthority to the chief officer of such business or other personnel and supervises the statusof execution of duties by such officer or other personnel.

3.

Outside directors control the business execution of the board of directors and business
manager, and the conflicts of interest between the Company and the management
personnel and other executives from the perspective of stakeholders in order to ensure theGroup's sustainable growth and increase of corporate value over the medium to long term.

Article 3. Composition of Board of Directors
1.

The number of the board of directors of the Company will be ten (10) or less asprescribed in the articles of incorporation, and determined by fully taking into account theaspect of securing diversity and expertise in the board of directors while being composedof such number as necessary and appropriate to ensure the effective management
system and substantial discussion at the board of directors required to a holding
company that serves business execution management function of the group.

2.

In consideration of the importance of the function of outside directors in corporate governance,
the Company operates the Board of Directors with at least one-third of the number of
independent outside directors in principle.

3.

Independent outside officers will be appointed in accordance with the independence criteria
established by the Tokyo Stock Exchange.

4.

In determining director candidates, the Company will secure balance of knowledge,
experience, capabilities and diversity of the board of directors as a whole appropriate for
the Company's expanded business fields by taking into consideration the balance of humanresources who can demonstrate their strength in the management of each business areain the expanded business fields and human resources suitable for business management
and other factors.

Article 4. Qualification and Appointment Process of Directors
1.

Internal director candidates of the Company will be determined from among a wide varietyof human resources in accordance with the following appointment process:(i)a person who has extensive knowledge, experience in business management andbusiness operations of the Group; and(ii) a person who fully understands the Group's social responsibility/mission and canperform business management and business operations in a fair and appropriatemanner based on a high level of self-discipline.
2.

Outside director candidates will be determined from among a wide variety of humanresources in accordance with the following appointment process:(i)a person who satisfies the criteria for assessing independence established by the Tokyo
Stock Exchange and is believed to have no possibility to have conflicts of interest withgeneral shareholders;(ii) a person who understands the Company's management philosophy and has sufficientunderstanding of the Group's social responsibility and roles; and(iii) a person who is fully aware of the roles as outside director and can supervise theCompany's directors and management and provide precise and appropriate
opinion/advise by making use of his/her knowledge and activities in business
management, economic, legal, accounting, tax, audit and other similar areas.
3.

In relation to the appointment process, appropriate involvement/advice should be obtained
from independent outside directors prior to the approval of the board of directors.

Article 5. Qualification and Appointment Process of Corporate Auditor
1.

Internal corporate auditor candidates of the Company will be determined with the consent
of corporate auditors from among a wide variety of human resources in accordance withthe following appointment process:(i)a person who has extensive knowledge, experience in finance/accounting and business
operations of the Group; and(ii) a person who can audit the status of execution of operation by directors from a fairand objective standpoint and contribute to promoting soundness and transparency ofthe management.
2.

Outside corporate auditor candidates will be determined with the consent of the board ofcorporate auditors from among a wide variety of human resources in accordance with thefollowing appointment process:(i)a person who satisfies the criteria for assessing independence established by the Tokyo
Stock Exchange and is believed to have no possibility to have conflicts of interest withgeneral shareholders;(ii) a person who understands the Company's management philosophy and has sufficientunderstanding of the Group's social responsibility and roles; and(iii) a person who is fully aware of the roles as outside corporate auditor and can audit thestatus of execution of operation by directors from a neutral/objective perspective andcontribute to soundness and transparency of the management by making use of
his/her knowledge and experience in business management, economic, legal,accounting, tax, audit and other similar areas.
Article 6. Succession plan for top management
Succession plans for the CEO are discussed and examined by the Nomination andCompensation Committee, and supervised by the Board of Directors. In addition, as apolicy for selecting a successor, the person will be selected from those who are deemed
appropriate in consideration of their personality, knowledge, and achievements.
Article 7. Policy and Process for Determining Remuneration for Directors and Audit &Supervisory Board Members
1. Remuneration for the Company's directors shall be within the limits of remuneration
determined at the General Meeting of Shareholders, taking into account management
content, economic conditions, the results of individual director evaluations, and thebalance with employee salaries, etc. Our basic policy is to have a remuneration systemthat reflects
2. Director remuneration consists of fixed remuneration (monthly remuneration),bonuses, and non-monetary stock remuneration. However, outside directors are notpaid non-monetary stock remuneration in light of their duties.
3. When deciding on the content of remuneration for individual directors, the Nomination
and Compensation Committee conducts multifaceted examination of the original

proposal, including consistency with the decision-making policy. We have determinedthat it respects and follows the decision policy.
4. Compensation for Audit & Supervisory Board Members shall be determined throughdiscussion among Audit & Supervisory Board Members, within the amount approvedat the General Meeting of Shareholders, under a separate system from that forDirectors.
Article 8. Voluntary Nomination and Compensation Committee
Prior to approval by the Board of Directors, the Company discusses and considers
particularly important matters, such as the nomination and compensation of officers, at
the Nomination and Compensation Committee, and explains the independence andobjectivity of the functions of the Board of Directors. We are strengthening ourresponsibilities. The majority of the committee members are independent outside
directors.
Article 9. Training Policy for Directors/Corporate Auditors
1.

The Company will assist the performance of duties by directors and corporate
auditors by providing information through utilizing or otherwise dealing with in-housetraining and outside experts to acquire knowledge pertaining to the company'sbusiness/finance/organization and other affairs necessary for directors and corporate
auditors to fulfill their roles and functions.
In addition, in the Group's business development, we regularly hold an advisory council
comprised of outside experts for the purpose of gaining professional insights of eacharea such as creation of new business and understanding of market needs.

2.

The Company will work to formulate an adequate understanding by arranging an
opportunity for outside directors and outside corporate auditors to receive anexplanation on the Group's management strategies, business plans, status of various
businesses, business environment and business challenges and other matters in atimely manner after their taking office and further by providing information throughutilizing or otherwise dealing with in-house training and outside experts in order forthem to fulfill their roles and functions.

Chapter 3. Measure to Protect Interests of Stakeholders
Article 10. Management system for related party transactions
When the Company enters into transactions with its officers or main shareholders or otherinvestors, unless it is obvious that terms and conditions are the same as generaltransactions, we will submit in advance such transaction to the board of directors for its
approval so that such transaction will not harm the common interests and the like of theCompany and shareholders.
Article 11. Policy on cross-shareholdings
1.

The Group believes that it is vital to build a cooperative relationship with various kinds ofcorporations for the expansion/sustainable development of its business. From a long term
perspective for increase of the Group's corporate value, the Group holds shares requiredin terms of its strategy comprehensively taking into consideration the importance for thepurpose of business strategies and relationship with business partners and other factors.

2.

With respect to the listed shares and other equity that are held pursuant to the preceding
paragraph (the “Cross-Shareholding”), the board of directors examines individually andspecifically on an annual basis whether the purpose of holding them is appropriate andwhether the benefits and risks associated with holding them justify capital cost to verify
the appropriateness of holding them. If the verification has found that the holding of any
shares is no longer recognized as reasonable, they will be sold to reduce them.

3.

In exercising voting rights on the Cross-Shareholding, the Group will examine the detailsof the agenda thereof and properly exercise the voting rights after determining whether
not it contributed to increase of corporate value of the Group and invested companies. We
will not make affirmative determination on any agenda that would impair corporate valueirrespective of either company proposal/shareholders proposal.

Article 12. Whistle-Blowing SystemThe Company will establish a "whistle-blowing system" independent of the management
personnel that enables all officers and employees to blow the whistle directly to an outsidebusiness operator on an anonymous basis in addition to a report system based on theoffice organization in order to forthwith and appropriately respond when a breach of law
or any other unlawful act occurs.

Article 13. Efforts to Address Sustainability Issues
The Board of Directors of the Company shall consider global environmental issues suchas climate change, respect human rights, consider the health and working environmentof employees and treat them fairly and appropriately, conduct fair and appropriate
transactions with business partners, and deal with natural disasters, etc. We recognizethat addressing sustainability issues, such as crisis management, is an importantmanagement issue that not only reduces risks but also leads to profit opportunities. We
are actively working on issues.
In particular, as an energy company, we have set CO2 emissions reduction targets andare working to achieve carbon neutrality by 2050.
Article 14. Commitment to diversity
The Group advocates diversity management and aims to be a company where diverse
human resources can play an active role regardless of gender, nationality, age, hiringform, etc.
Chapter 4. Dialogue with Shareholders and Other Investors
Article 15. Policy for Constructive Dialogue with Shareholders and Other Investors
1.

The Company will emphasize the constructive dialogue with shareholders and otherinvestors and make efforts to gain understanding for the Company's management policies
through dialogue, as well as listen to the voices of shareholders and other investors,
whereby we will absorb and reflect business analysis and views through the eyes of capitalproviders and other stakeholders and be committed to the Group's sustainable growth andincrease of corporate value over mid to long term.

2.

Investor Relations department is in charge of dialogue with shareholders and others.
(i)

Investor Relations department will respond in cooperation with internal divisions torealize a constructive dialogue.

(ii) We implement activities so that shareholders and other investors can develop theirunderstanding of management strategies and business environment of the Company
by providing financial results briefings, roundtable discussions with shareholders aftergeneral meeting of shareholders, TD-net, information disclosure on the website of theCompany and other means.
(iii) Views and other opinions of shareholders and other investors grasped by the Investor
Relations department through dialogues have been fed back to directors and otherofficers and we have shared the recognition of issues.
(iv) The Investor Relations department fully ensures the information control pursuant to
the regulations concerning internal information control in order to prevent undisclosed
material inside information from being leaked to the outside in connection with thedialogue.
Supplementary provisionThis basic policy will be enforced from November 1, 2015, and will be revised and abolishedas necessary.
Revised December 19, 2018
Revised December 22, 2021
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