Corporate Governance Report
Last Update: June 26, 2024
Mitsubishi Materials Corporation
Naoki Ono, Chief Executive Officer
Contact: Chiaki Kubota, General Manager,
Corporate Communications Dept.
Securities Code: 5711
https://www.mmc.co.jp/corporate/en/
The corporate governance of Mitsubishi Materials Corporation (the “Company”) is described below.

I.

Basic Approach to Corporate Governance, Capital Structure, Corporate Profile andOther Basic Information

1. Basic Approach
We have, based on the corporate philosophy of the Group, vision, values, code of conduct, ourcommitment and the Basic Policy on Corporate Governance (*) established by the Board of
Directors, developed trust with all stakeholders related to the Company and its subsidiaries(hereinafter, the "Group"), such as shareholders and investors as well as employees, customers,client or supplier companies, creditors and local communities, and also develop our corporate
governance.
Among the governance systems under the Companies Act, we have chosen to be a Company witha Nomination Committee, etc., and by separating supervision and execution, will strengthen the
Board of Directors’ management supervisory functions, improve the transparency and fairness ofmanagement, and accelerate business execution and decision making.
We acknowledge the enhancement of corporate governance to be one of the most importantmanagement issues, and continuously make efforts to improve our corporate governance.
(*) We have prepared the “Basic Policy on Corporate Governance,” which is disclosed on the
Company’s website, as a compilation of the basic approach to and framework of corporate
governance.
https://www.mmc.co.jp/corporate/en/company/governance.html[Reasons for Non-compliance with the Principles of the Corporate Governance Code]We have implemented all provisions of each principle of the corporate governance code.
* This Report is written based on the Corporate Governance Code revised in June 2021 (including
each principle of the Code for the Prime Market applicable from April 2022 and onward).

[Disclosure Based on the Principles of the Corporate Governance Code] Updated[Principle 1-4:

Strategic share holdings]

The Company's basic policy on shares acquired for purposes other than pure investment(hereinafter, "Shares in the Form of Strategic Share Holdings") shall be as follows:-

The Company shall not acquire or hold Shares in the Form of Strategic Share Holdings unlessdoing so is necessary for the purpose of its business strategy.

-With regard to the Shares in the Form of Strategic Share Holdings, the appropriateness of suchholdings shall be specifically reviewed and examined at a meeting of the Board of Directors on
an annual basis. As a result of such reviews and examinations, the Company will reduce any
Shares in the Form of Strategic Share Holdings if it is not deemed to be necessary to hold suchshares.

-In exercising the voting rights attached to any Shares in the Form of Strategic Share Holdings,
the Company will examine relevant proposals and decide whether to vote for or against it fromthe perspective of improving the corporate value of the Company and issuing company over the
medium- to long-term viewpoint.

<Status in FY2024>
In FY2024, out of all of the Shares in the Form of the Strategic Share Holdings (listed shares heldby the Company at the beginning of the fiscal year: shares issued by 6 issuing companies), we soldall or part of the shares issued by 2 issuing companies and newly acquired shares issued by 1
issuing company. The listed shares held by the Company at the end of the fiscal year were sharesissued by 6 issuing companies.
The status of Strategic Share Holdings before FY2024 is disclosed in the Integrated Report.
https://www.mmc.co.jp/corporate/en/ir/library/annual.html(Article 7 of the Basic Policy on Corporate Governance)[Principle 1-7:

Transactions between related parties]

With respect to competitive transactions between the Company and Directors/Executive Officers
and conflict-of-interest transactions between the Company and Directors/Executive Officers, theCompany will conduct advance deliberations and make reports on the actual results of approved
transactions (if any) at the Board of Directors Meetings, in accordance with the provisions of laws
and internal rules such as the Board of Directors Rules. Further, any transaction between the
Company and any major shareholder over a certain amount shall be deliberated at the Board of
Directors Meeting in advance, in accordance with the provisions of the Board of Directors Rules.
(Article 32 of the Basic Policy on Corporate Governance)[Supplementary Principle 2-4-1: Ensuring Diversity within the Company]
1. Approach to ensuring diversity

(Article 10 of the Basic Policy on Corporate Governance)
Based on the belief that employees are the source of new values and the Group’s sustainablegrowth, we aim to maximize organizational performance by creating workplace environments inwhich team members with diversity in every respect, including race, religion, gender, sexual
orientation and gender identity, age, disability, nationality, national origin, social origin, andprofessional background, can coexist, and recognize one another in an equitable manner, andactively demonstrate their individual abilities at their very best.
https://www.mmc.co.jp/corporate/en/company/governance.html(Article 3 of Sustainability Policy)
We embrace diversity and acknowledge its importance in creating new value. We will promote
diversity, equity and inclusion as a source of sustainable growth within the Group.
https://www.mmc.co.jp/corporate/en/sustainability/(Article 8 of the Human Rights Policy)
We aim to build workplaces where team members with diverse attributes, values, and experiences
can coexist and mutually respect one another in an equitable manner, and where individuals canwork confidently with a sense of growth and fulfillment as they elevate each other and demonstrate
their capabilities to the full.
https://www.mmc.co.jp/corporate/en/sustainability/humanrightspolicy.html(Guidelines for Supporting Women's Development and Advancement)
1) Actively promoting Diversity, Equity and Inclusion to embrace and respect diverse
personalities, as well as to create new values, that are the sources of sustainable growth
for the Group. Such promotion is one of our management strategies, and active participationof female talents is indispensable.
2) Aiming to be a place where all female talents with diverse personalities can demonstrate
her individual abilities at their very best at all workplaces, occupation fields and positions,while experiencing growth and self-realization.
3) Fostering culture where every female talent can independently and autonomously build andrealize their careers by improving the work environment, expanding the work area andsupport that respect viewpoints of work.
https://www.mmc.co.jp/corporate/ja/sustainability/diversity/promote.html
2. Voluntary and measurable goals and status for ensuring diversity
We believe the sustainable growth of the Group requires creating innovation free from the existing
frameworks. To this end, it is essential to secure and develop diverse human resources and tocultivate awareness and culture for creating new values from different opinions by recognizing eachother’s diverse personalities. Based on this, we clarified our policy on Diversity, Equity and Inclusion,and set a target of increasing the percentage of the Company’s management level employees withdiverse attributes (female employees, foreign nationals, mid-career employees, people withdisabilities) from 16% in FY2021 to 30% by FY2031 (compared with 24% in FY2024).
In particular, with regard to initiatives for ensuring diversity of members of the decision-making level,
which affects sustainable growth of the Company, we have established indicators and targets foreach of these attributes. For related information, please refer to the Annual Securities Report andthe Integrated Report.
Annual Securities Report: https://www.mmc.co.jp/corporate/ja/ir/library/sr.html
Integrated Report: https://www.mmc.co.jp/corporate/en/ir/library/annual.html
3. Policy on human resource development and internal environment development for ensuring
diversity of core human resources, and the implementation status
In order for each employee with diverse attributes, values, and experience to actively demonstrate
their individual abilities, we plan and manage development programs and support measurescorresponding to the attributes of female, foreign nationals, and mid-career employees. As
initiatives common to all employees, we are working on education aimed at fostering a culture that
accepts diversity, promoting flexible working styles including the introduction of a telecommuting
system, and striving to establish and utilize an HR system that enables people to balance work withchildcare, nursing care, illness and various other life events.
[Principle 2-6:

Fulfillment of function as corporate pension funds owner]

The Company has been developing the asset mix of pension funds based on the risk and return at
different times, in order to ensure the payment of pensions in the future. Pension Committee,
comprised of the Executive Officer who oversees finance & accounting matters and the Executive
Officer who oversees divisions in charge of corporate pension operations or the Strategic
Management Committee members as well as the personnel with knowledge and experience of fundmanagement and corporate pension operations, conduct periodic monitoring as to the investment
status of the pension funds, and consider the review of the asset mix, and then the Strategic
Management Committee determines the same after deliberation. In order to perform appropriate
fund management, we conduct comprehensive evaluation and monitoring as to the institution
entrusted with the investment by means of the combination of a quantitative evaluation andqualitative evaluation.
[Principle 3-1:

Fulfillment of information disclosure](1) Management philosophy, management strategy and management plan(a) Management philosophy
1) Corporate philosophy, etc.

Based on its corporate philosophy of “For People, Society and the Earth,” the Group has set thevision of “Circulating resources for a sustainable future”, and the Group’s mission is “Create asustainable future (a prosperous, recycling-oriented and decarbonized society)”.
In order to realize such Corporate Philosophy, Vision, and Mission, the Group believes that “Values”
should be respected and the “Code of Conduct” should be complied with as a rule, both of which
are established.
For details, please refer to our website.
https://www.mmc.co.jp/corporate/en/company/policy.html
2) Our Commitment
The group has set out “Our Commitment” of “For people, society and the earth, circulating resources
for a sustainable future”. The Group will further enhance a recycling system of metal resources
based on our strengths and realize growth throughout the value chain by expanding the scope,
regions, and scale of our operations.
(b) Management strategy and management plan
1) Strategic roadmap
In Medium-Term Management Strategy FY2031 will be divided into two phases, Phase 1 fromFY2024 to FY2026 and from FY2027 to FY2031, and we will strive to achieve Our Commitment.
In Phase 1, we will promote improving profit growth and profitability by strengthening costcompetitiveness mainly in product-based businesses, and investing in medium- to long-term
growth areas centered on resource circulation. In Phase 2, we will expand business scale throughregional development including overseas, in addition to expansion of target business areas.
2) Efforts to improve the Group’s corporate value
In February 2023, we established a new Medium-Term Management Strategy FY2031 covering
the period from FY2024 to FY2031, and established the efforts to improve the Group’s corporate
value as follows:- Business portfolio management- Investment allocation and profit contribution- Strengthening cost competitivenessFor details, please refer to our website.
https://www.mmc.co.jp/corporate/en/company/strategy.html(2) Basic approach to and policy on corporate governance
Please refer to “I.1. Basic Approach” in this Report.

(3) Remuneration for Directors and Executive Officers
Please refer to “Remuneration System for Directors and Executive Officers” attached at the end of
this Report.
(4) Nomination of Candidates for Director, Dismissal of Directors, and the Election and Dismissal of
Executive Officers(a) Policy for Nomination of Candidates for Director and Dismissal of Directors
Our basic approach to the structure of the Board of Directors, which fulfills the roles of determining
the direction of management and exercising supervision over the progress of business execution,is to ensure that it comprises a diverse range of human resources with different expert knowledge,
experience, and other qualities. In particular, the Nomination Committee will consider candidates
for Outside Director to ensure that they comprise individuals who possess experience andknowledge in corporate management (business similar to or different from the Group's business,etc.) and organizational management, and individuals who possess broad and advanced expert
knowledge and extensive experience in relation to finance and accounting, legal affairs, productionengineering, research and development, sales and marketing, or international relations, etc.
In light of the basic policy on the structure mentioned above, the Nomination Committee willnominate and select individuals who satisfy the following requirements as candidates for Director,
regardless of individual attributes concerning gender, nationality and race, etc.:- An individual of exceptional insight and character;- An individual with a strong sense of ethics and a law-abiding spirit; and- An individual who can properly fulfill his or her duties concerning the exercise of supervision overthe management of the Company and the determination of the direction of management.
Further, with respect to candidates for Independent Outside Director, the Nomination Committee
will nominate and select individuals who satisfy the following requirement in addition to the above
requirements:- An individual who has no material interest in the Group and who can remain independent.
The specific selection of personnel shall be decided after deliberation by the Nomination Committee.
If a Director falls under any of the following events, the Nomination Committee may determine thecontent of the proposal to be presented to the General Meeting of Shareholders for the dismissal ofsuch Director.
- When there is a serious violation of laws and regulations or the Articles of Incorporation by a
Director;- When a Director commits serious misconduct in the performance of his/her duties;- When there is a lack of the judgmental capacity that a Director should have or when the capacity
to reason is notably inadequate; or- When a Director will likely be unable to attend the Board of Directors meetings for a considerably
long period of time.
(Exhibit 1 of the Basic Policy on Corporate Governance)

(b) Policy for Election and Dismissal of Executive Officers
In electing Executive Officers responsible for the execution of business tasks, individuals who satisfy
the following requirements will be elected, regardless of individual attributes concerning gender,
nationality and race, etc.:- An individual of exceptional insight and character;- An individual with a strong sense of ethics and a law-abiding spirit; and- An individual well-versed in management and the business activities of the Group.
In relation to the election process, the Chief Executive Officer will first draft a proposal for theelection of Executive Officers after consulting with relevant officers as necessary. The Chief
Executive Officer will then submit a proposal for the election of Executive Officers to the Board of
Directors based on the deliberations and responses to inquiries at a Nomination Committee
meeting, and Executive Officers will be elected by resolution of the Board of Directors based on acomprehensive review of the candidates' personal history, achievements, specialist knowledge, andother capabilities.
In addition, if any event occurs that makes an Executive Officer highly ineligible in light of thesestandards, the Executive Officer shall be dismissed by resolution of the Board of Directors following
a review by the Nomination Committee.
(Exhibit 3 of the Basic Policy on Corporate Governance)(5) Explanations of individual nomination, election and dismissal
In case of the nomination of candidates for Directors and the election or dismissal of Executive
Officers, the reason for each nomination, election or dismissal is disclosed on the Company’s
website.
https://www.mmc.co.jp/corporate/en/company/governance.html
Further, the reason for the nomination of each of the candidates for Directors is described in the
Notice of the General Meeting of Shareholders as well.
[Supplementary Principle 3-1-3: Initiatives for sustainability]
1. Addressing sustainability issues
The Company recognizes addressing sustainability issues is essential in order to improve thecorporate value of the Group from a medium- to long-term viewpoint. We aim to simultaneously
ensure our contribution to the creation of a sustainable society and the improvement of corporate
value from a medium- to long-term viewpoint by actively working to resolve social issues throughmeans such as promoting the recycling of waste and resources and energy conservation in our
global business activities. The Group will address sustainability issues in an appropriate manner,
based on Sustainability Policy.
(Article 3 of the Basic Policy on Corporate Governance)Sustainability Committee
The Sustainability Committee was established under the Board of Directors on June 28, 2022 inorder for the Board of Directors to not only monitor the Company’s sustainability efforts but also to
proactively consider the direction of the sustainability efforts from different perspectives and present
them within the Company.
For an overview of the Sustainability Committee, please refer to “2. Matters on Functions ofBusiness Execution, Auditing, Oversight, Nomination and Remuneration Decisions (Overview ofCurrent Governance System)” in this Report.
Sustainability Policy
The Basic Policy on Sustainability, which provides a summary on views and policies addressing
sustainability issues, was established on December 1, 2021.
For details, please refer to the Company website.
https://www.mmc.co.jp/corporate/en/sustainability/<Sustainability Management System>
We had been organizing and examining sustainability issues separately from materiality (material
issues) to date, but has decided to combine materiality and sustainability issues into a single setof issues starting from FY2025. Based on the recognition that the sustainability trends of society
as a whole will have a significant impact on the future of our corporate activities, we will identify
issues that are of particular importance among important social issues to be resolved through our
corporate activities and issues to be addressed for the Group to conduct sustainable business
operations as sustainability issues (materiality) and will strategically address those issues
identified.
For details, please refer to the diagram of “Sustainability Management System” attached at theend of this report.

2. Response to global environmental issues
Based on the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD),
we established and analyzed scenarios to grasp the impact of climate-related risks andopportunities on our business and financial affairs, and to review measures to reduce risks andcapture opportunities. The results have been disclosed.
For details, please refer to the Company website.
https://mmc.disclosure.site/en/themes/92
3. Investment in human capitalAt the Group, we have set out Our Commitment of “For people, society and the earth, circulating
resources for a sustainable future.” We believe that it is our people who promote this commitment
through our business activities and that “employees are the source of new values and the Group’s
sustainable growth.”
Viewing human resources as “capital” rather than resources or costs, we will continue to invest in
human capital to help individuals and companies grow together and improve the Group’s corporate
value together through our human resource strategy: “Maximizing the value of human resources
and creating an organization dedicated to winning” and “Building a foundation for co-creation andgrowth.”(Examples of past initiatives)- The Human Resources Committee, consisting of Executive Officers and HRBPs (Human
Resources Business Partners), was established. Discussed various major HR measures
including recruitment, development, transfer and allocation of human resources, as well as
Diversity, Equity and Inclusion, examined the effectiveness, and considered improvements- Introduced a “Job-Based Human Resources System” to management levels in order to evaluate,
reward, and allocate them in response to their roles and responsibilities- Introduced a 1-on-1 meeting system, implemented a career change system based on the internal
job posting system, put in place a reskilling environment through online learning support, andprovided support for proactive career development through the introduction of a trial system forside/concurrent jobs
- Realized diverse work styles through the introduction of telecommuting and remote work systems- Using a talent management system to visualize and utilize personnel information- Promoted health and productivity management aimed at giving top priority to health of employees
under a promotion system headed by the Chief Executive Officer (Certified as a Health &Productivity Management Outstanding Organization "White 500" (Large Enterprise Category))-Established opportunities for dialogue between Executive Officers and employees
For related information on the above, please refer to the Annual Securities Report and the Integrated
Report.
Annual Securities Report: https://www.mmc.co.jp/corporate/ja/ir/library/sr.html
Integrated Report: https://www.mmc.co.jp/corporate/en/ir/library/annual.html
4. Resource Circulation
Regarding resource circulation, the Resource Circulation Strategy Meeting proceeds with thestudy on the concept of resource circulation for our product lines from the perspective of longterm, company-wide optimization.
5. Investment in intellectual property
The Group sets out the Intellectual Property Policy of Mitsubishi Materials Group and appropriately

protects and enhances its own rights while respecting third-party intellectual property rights.
Analytical tools that utilize big data on patent information in business and development strategies
have been introduced. Based on the information analyzed, business strategies and strategic
intellectual property formation activities are conducted, and in the latter we proceed to apply for andacquire rights in line with research and development strategies supporting business strategies.
Specifically, under our “strategic dialogue” activities, business units and the Intellectual Property
Dept. promote dialogue to ascertain and analyze intellectual property rights, while discussing
business models and intellectual property formation from the initial phase of drawing up business
schemes.
Further, as governance activities related to intellectual property, we regularly deliberate on
intellectual property at the Monozukuri and R&D Strategy Meeting, and also report at the Board of
Directors for supervision.
The current status of investments and initiatives for the Company’s intellectual property rights atpresent are disclosed on the Company website.
https://www.mmc.co.jp/corporate/en/business/ip/
6. Others
Details of the Company’s sustainability initiatives are disclosed in Integrated Reports andSustainability Reports, at the Sustainability IR Meeting, and on the Company’s website, etc.
[Supplementary Principle 4-1-1:

Matters to be resolved at the meetings of the Board of Directors,

Etc.]
The Board of Directors shall determine matters which may have a serious impact on ourmanagement, such as the management policy and managerial reform - pursuant to the provisionsof laws and regulations, the Articles of Incorporation, the Board of Directors Rules and the DecisionMaking Authority and Procedure Regulations - in order to improve the medium- to long-term
corporate value of Mitsubishi Materials Group, and the standards for such determination are clearly
set forth in the Decision-Making Authority and Procedure Regulations. The determination andexecution of matters for the Company’s operations, etc. not determined by the Board of Directors
are entrusted to the Executive Officers. They are determined by the Strategic Management
Committee and other important meetings or General Managers of related departments, etc., in
accordance with the Company’s internal regulations concerning decision-making authority. Further,
the execution of the Company’s important operations, etc. determined by the Strategic Management
Committee, etc. shall be reported to and supervised by the Board of Directors.
[Principle 4-9:

Standards for determining independence and qualifications of Independent Outside

Directors]
The Company has set its own standards for the independence of Outside Directors and registers

with the Tokyo Stock Exchange, Inc. as Independent Outside Directors those Outside Directors who
fulfill the standards for independence of Outside Directors.
For the standards for the independence of Independent Outside Directors, please refer to “Mattersrelating to Independent Directors” of “II.1. Independent Directors” of this Report.
(Article 24 and Exhibit 2 of the Basic Policy on Corporate Governance)[Supplementary Principle 4-11-1:

Perspective on the balance, diversity and scale of knowledge,

experience and ability of the Board of Directors as a whole]
The Board of Directors shall consist of an appropriate number of Directors (but not more than 12
Directors, as provided for in the Articles of Incorporation) to enable the Board of Directors to fulfill
its functions most effectively and efficiently. In addition, a majority of the Directors on the Board of
Directors shall be Independent Outside Directors.
The Board of Directors shall consist of diverse Directors with a high degree of expertise and insight
into management, finance and accounting, sales and marketing, production engineering, researchand development, legal affairs, internationality and other aspects to ensure a well-balanced
combination of knowledge, experience and ability necessary to fulfill their functions and duties
effectively as a whole.
Meanwhile, in the notice of the Ordinary General Meeting of Shareholders, disclosed on the
Company website, a Skill Matrix listing the expertise and experience of Directors, and other data
has been presented.
https://www.mmc.co.jp/corporate/en/news/ir/(Article 16 of the Basic Policy on Corporate Governance)[Supplementary Principle 4-11-2:

Status of concurrent post of Directors at other listed companies]

In order to secure the time necessary to properly fulfill their functions and duties, Directors shall notconcurrently serve as directors, corporate auditors, executive officers or representatives of morethan three (3) listed companies or legal entities, etc. other than the Company.
The important positions of other organizations concurrently assumed by each Director are disclosed
in the Business Report and the Notice of the General Meeting of Shareholders every year.
(Article 22 of the Basic Policy on Corporate Governance)[Supplementary Principle 4-11-3:

Analysis and evaluation of the effectiveness of the Board of

Directors]
The Company analyzes and evaluates the effectiveness of the Board of Directors based on theevaluation by each Director on an annual basis. In FY2022, the evaluation was conducted using athird-party organization for the first time (In the future, a third-party evaluation shall be conducted
once every three years).
In FY2024, the Company evaluated the effectiveness of the Board of Directors by way of aquestionnaire-based self-evaluation.

In addition, starting in FY2024, we adopted an initiative where Directors (excluding those who
concurrently serve as Executive Officers) mutually comment on the contributions of other Directors
to the Board of Directors, etc.
The evaluation method and a summary of the results are outlined below.
1. Method of analysis/evaluation(1) Evaluation process- From December 2023

Under the leadership of the Chairperson of the Board of

to January 2024

Directors, a questionnaire was distributed to all eleven
Directors and responses were retrieved.

- Early February 2024

Response forms for comments on the contributions of other
Directors were distributed to Directors (excluding those who
concurrently serve as Executive Officers), and responses
were retrieved.

- Late February 2024

The Directors discussed the effectiveness of the Board of
Directors based on an analysis of the questionnaire results.

- March 2024

Following the discussions in February, the Board of Directors
passed a resolution on the effectiveness of the Board of
Directors for FY2024. In addition, the response forms forcomments collected in early February were fed back to each
respective Director with comments marked as anonymous.

(2) Questionnaire items
The questionnaire uses a four-grade evaluation for the questions below (1. Strongly agree, 2. Agree,
3. Disagree, 4. Totally disagree) and provides a free comment space where needed.
- Self-evaluation on the role to be fulfilled by Directors and the Board of Directors- Scale and composition of the Board of Directors- Status of operations of the Board of Directors- Composition, roles and status of operations of each of the Nomination Committee, Audit
Committee, Remuneration Committee, and Sustainability Committee- Support system for Outside Directors- Relationship with investors and shareholders- Other matters concerning the Board of Directors in general, etc.
2. Evaluation of the status of initiatives concerning the issues for FY2024 based on the FY2023
evaluation
There was an evaluation of initiatives concerning the following matters taken for further
improvement by the Board of Directors in FY2024 based on the results of the evaluation of theeffectiveness of the Board of Directors in FY2023. It was confirmed that although “improvements

have been made” in general, “initiatives were not adequate” for a certain matter.
(1) Initiatives related to explanations (explanatory materials) to Directors- In order to make the explanatory materials for Directors from the executive side simpler and easierto understand with clearer directions, attention was paid to the following points: “The content
should focus on important management matters that officers should know and discuss,” “Items thatare progressing as scheduled should be described as concisely as possible,” and “The materials
should include the background and history of changes in the external environment including thetrends of competitors, and the circumstances surrounding the Group.” In addition, efforts weremade to keep the explanations from Executive Officers clear and concise, and initiatives weretaken to receive questions from Directors on matters to be discussed by the Board of Directors inadvance.
- Meanwhile, in regard to the provision of information on the Company’s business, which serves asa prerequisite for making management decisions, such matters were explained in briefings to theBoard of Directors to eliminate any information asymmetry between the executive side and Outside
Directors.
- In the questionnaire, opinions such as “It is requested that the explanation from the executive side
be further elaborated on to focus on more important points” were found, but the initiatives taken
were highly evaluated in general.
(2) Initiatives related to the Company’s medium- to long-term competitive advantage- The Company appealed to the capital market by disseminating its Medium-term Management
Strategy FY2031 (FY2031 Strategy), which was formulated based on the Company’s medium- tolong-term competitive advantage, and sending out relevant messages. Specifically, in order todeepen investors’ and analysts’ understanding of FY2031 Strategy, we held Business Strategy IR
Meeting, etc. and also organized plant tours at domestic bases for securities analysts andinstitutional investors in order to promote their understanding of the Company’s existing
businesses and the various initiatives under FY2031 Strategy.
- While initiatives were taken as described above, the questionnaire revealed comments such as
the following: “I believe that the Company’s philosophy and direction have been explained in atimely manner, but operating results do not justify them,” and “Efforts are more likely made on
individual measures to realize short-term profit plans, and we are not in the state to convey our
medium- to long-term competitive advantage.”(3) Initiatives related to sharing of information between the Nomination Committee and other
Directors- We deepened discussions on matters requiring resolution by the Board of Directors (mainly
information on the appointment of Executive Officers, etc. that are to be reported back to the Board

of Directors from the Nomination Committee) and shared information with Directors who are notcommittee members. Specifically, Outside Directors received an explanation from the Chief
Executive Officer regarding the succession plan for Executive Officers and other matters anddiscussed these matters at the informal meetings of Outside Directors.

- Further, information was provided by the Chief Executive Officer at the informal meetings of
Outside Directors on the status of examination of the succession plan for the Chief Executive
Officer. In addition, the Nomination Committee made progress reports to the Board of Directors on
the status of examining candidates for Outside Directors.
- As a result of the above initiatives taken, the evaluation in the questionnaire improved from theprevious fiscal year.
(4) Initiatives related to the supervision of a human resource strategy by the Board of Directors- At the briefings for Directors, explanations were received on the status of diversity promotion(Diversity, Equity & Inclusion (DE&I)) in the organization under the management of each Executive
Officer, and discussions were held.
- In addition, as a non-financial evaluation item for the annual bonuses of Executive Officers, targets
related to DE&I were set for all Executive Officers, and progress was regularly reported to theBoard of Directors for discussion.
- As a result of the above initiatives taken, the evaluation in the questionnaire improved from theprevious fiscal year.
3. Summary of FY2024 evaluation results
As a result of deliberations by the Board of Directors, it was confirmed that the effectiveness of theBoard of Directors was secured in FY2024.
Through the evaluation, it was confirmed that “Efforts will be made to further improve themanagement of the Board of Directors in order to enhance corporate value, which is one of the mostimportant missions of the Board of Directors, and initiatives will be taken to further improve thefollowing matters in FY2025.”- Development of core management personnel- Medium- to long-term competitive advantage of the Company*To the following questions in the questionnaire, six (6) of 11 Directors answered “Disagree” andfive (5) responded “Agree,” with negative responses outnumbering positive responses.
- Do you think that the Board of Directors holds sufficient discussions on the development of coremanagement personnel?
- Do you think that the Company’s medium- to long-term competitive advantage (business strategy,
quality of management, governance system, etc.) has been adequately conveyed to the capital
market?
A summary of the opinions of the Directors regarding the above is as follows.

(1) Development of core management personnel- Through evaluations, etc. it was pointed out that there was still room for improvement in the
Company’s succession plan for Executive Officers, Next-Generation Leadership Talent
Development Program and other plans, in terms of the following points.
-- Diversification of successor personnel pool-- Increase in the number and ratio of candidates selected for the Next-Generation Leadership
Talent Development Program among candidates for Executive Officer successors-- Strengthening the linkage between the Next-Generation Leadership Talent Development
Program and personnel policies such as promotion and selection-- Early identification and planned stretch assignment of the Next-Generation Leadership Talentat the managerial and junior levels(2) Medium- to long-term competitive advantage of the Company- For the results of the questionnaire, please see 2. (2).
- In Directors’ discussions, it was pointed out that “There is a need to separate the discussions on
the Company’s competitive advantage and management strategy from the contents of external
explanations and disclosures. The Company must first examine and discuss the former even moredeeply.”4. Initiatives in FY2025 to further improve the effectiveness of the Board of Directors
Based on the results of the evaluation of the Board of Directors in FY2024, the Company’s Boardof Directors will undertake the following measures to increase the effectiveness of the Board of
Directors in FY2025.
(1) Measures for Development of core management personnel
Receive explanations from the executive side on the succession plan for Executive Officers and
Next-Generation Leadership Talents Development Program in briefings to the Board of Directors
and hold discussions primarily for matters stated in 3. (1).
(2) Initiatives to be taken regarding the Company’s medium- to long-term competitive advantage
Discuss among Directors what aspects should be identified as the Company’s medium- to longterm competitive advantage (and what aspects the Company should place particular focus on). (Ifthere are any matters that need to be explained by the executive side during the discussion among
the Directors, a briefing for Directors will be held as needed.)
The said discussions will be conducted toward FY2026, the final year of Phase 1 of Medium-termManagement Strategy FY2031, and will lead to a review of Phase 2, if necessary.
*In order to further improve the management of the Board of Directors, the following points will beconsidered.

- Further increasing the appropriateness of matters to be discussed by the Board of Directors- Method of selecting agenda for briefings for Directors- Method of deliberation that encourages more substantive discussions
The Board of Directors will keep making efforts to improve the effectiveness toward future.
(Article 17 of Basic Policy on Corporate Governance)[Supplementary Principle 4-14-2:

Policy on training for Directors]

We will provide Directors with the opportunity for training by outside experts, etc. as necessary sothat they can acquire the knowledge to carry out their functions and duties (including legal
responsibilities) at the time of and after their assumption of office. We will provide Outside
Directors with the opportunity to obtain a deeper understanding of Mitsubishi Materials Group’sbusiness, finance, organization, etc. Any costs and expenses for the foregoing shall be borne by
the Company.
(Article 27 of the Basic Policy on Corporate Governance)[Principle 5-1:

Policy on constructive communication with shareholders](1) Policy on communication; framework for promotion
The Company shall engage in constructive communication with shareholders and investors as
follows:-

The Chief Executive Officer and the Chief Financial Officer shall supervise communication
with shareholders and investors in general and endeavor to realize constructive
communication.

-

The members of management, as well as the Corporate Communications Dept. and otherinternal relevant departments, shall cooperate to deal with matters concerning communication
with shareholders and investors, based on appointment by the Chief Executive Officer andthe Chief Financial Officer.

-

With the aim of enhancing communication with shareholders and investors, the Company
shall hold a variety of briefings on its management strategy, business content, products,
regional strategies, and performance, etc., in addition to the General Meeting of Shareholders
and individual discussions. Also the Company shall collect and analyze opinions, etc. ofshareholders and investors obtained through communication, and provide feedback to theBoard of Directors and the members of management.

(Article 12 of the Basic Policy on Corporate Governance)(2) Status of dialogue with shareholders, etc.
In order to achieve the continuous improvement of corporate value over the medium- to long-term
through constructive communication with shareholders and investors, the Company readily
responds to requests from domestic and foreign institutional investors for individual meetings, andalso promotes various approaches through discussions, etc. by the members of the management,
including the Chief Executive Officer.
The concrete contents of our approaches through dialogue by the members of the management,
including the Chief Executive Officer, are as follows:
A. Investor conference for analysts and institutional investors (Chief Executive Officer, Chief
Financial Officer, etc.)
B. Medium-term management strategy progress briefing for analysts and institutional investors(Chief Executive Officer, Chief Financial Officer, etc.)
C. Overseas individual IR (Chief Executive Officer, Chief Financial Officer, etc.)
D. Attending investment conferences for foreign institutional investors (Chief Financial Officer,
etc.)
E. Business explanatory meetings (Executive Officers, etc.)
F. Sustainability IR meetings for analysts and institutional investors (Chief Executive Officer,
other Executive Officers concerned, etc.)
G. Small meetings with domestic institutional investors (Chief Executive Officer, Chief
Financial Officer, Outside Directors, etc.)
H. Individual meetings with domestic institutional investors (Chief Financial Officer, etc.)
I. Factory tour for domestic institutional investors (Person responsible of each businesslocation, etc.)
J. Explanatory meetings for individual investors (Chief Financial Officer, etc.)
Through the initiatives above, we regularly exchange opinions with domestic and overseas
shareholders and institutional investors (analysts, ESG analysts, persons who exercise voting
rights, etc. may participate depending on the initiative) regarding the Group’s financial results,
management strategy, business content, business strategy, the status of sustainability
initiatives, and the exercise of voting rights.
Summaries of opinions and other information obtained from shareholders and institutional
investors are reported to the Board of Directors as appropriate and to the members of the
management every month from the Corporate Communications Dept.
In addition, we are working to enhance the content of our initiatives based on the opinions
obtained.
(3) Handling of Corporate Information, etc.
-

The Company shall disclose its corporate information in a timely and appropriate manner inaccordance with the Companies Act, the Financial Instruments and Exchange Act and otherapplicable laws and regulations as well as the rules established by the relevant financial
instruments exchange, etc. In addition, the Company shall give due consideration to othervoluntary disclosures so that such disclosures will be conducted appropriately.

-

The Company shall establish regulations for the management of insider information, andappropriately manage insider information. In addition, the Company shall prevent insider
trading by calling the attention of the Group's employees to insider trading on a periodic basis
and also, for example, providing in-house education as necessary.

(Article 9 of the Basic Policy on Corporate Governance)[Measures for ensuring management is aware of capital costs and stock prices] [English
disclosure available]
https://www.mmc.co.jp/corporate/en/company/strategy.html
In formulating Medium-term Management Strategy FY2031, the Company analyzed the current
state at the Board of Directors and the Strategic Management Committee to understand theCompany’s capital costs and capital profitability. Based on these, Medium-term Management
Strategy FY2031 presents weighted average cost of capital (WACC) for the entire Company andfor each business segment, and sets a return on invested capital (ROIC) target of making the
ROIC spread, which is the difference between ROIC and WACC for each business segment,
positive in all businesses toward FY2031. In addition, we aim to increase corporate value by
introducing economic profit (ROIC spread × invested capital) as a management indicator tomeasure the amount of corporate value created.
We also aim to achieve a stable and continuous ROE of around 10% throughout the period ofMedium-term Management Strategy FY2031.
For details of Medium-term Management Strategy FY2031 and measures to realize management
focused on capital costs and stock prices, please refer to the Company’s website.
-

Medium-term Management Strategy FY2031
https://www.mmc.co.jp/corporate/en/company/strategy.html-[Related materials] Initiatives to realize management focused on capital costs and stock
prices (Materials for IR Management Briefing held on November 14, 2023, pages 24 to 26)
https://ssl4.eir-parts.net/doc/5711/ir_material_for_fiscal_ym9/144941/00.pdf

2. Capital Structure
Percentage of Foreign Shareholders[Status of Major Shareholders] Updated
Name / Company Name
THE MASTER TRUST BANK OF JAPAN, Ltd.
(TRUST ACCOUNT)CUSTODY BANK OF JAPAN, LTD. (TRUSTACCOUNT)

30% or more

Number of Shares Owned

Percentage (%)

22,982,000

17.56

9,107,420

6.96

NORTHERN TRUST CO. (AVFC) RE
SILCHESTER INTERNATIONAL INVESTORSINTERNATIONAL VALUE EQUITY TRUSTNORTHERN TRUST CO. (AVFC) RE U.S. TAXEXEMPTED PENSION FUNDSBNYM AS AGT/CLTS NON TREATY JASDECNORTHERN TRUST CO. (AVFC) RE NON
TREATY CLIENTS ACCOUNT
MEIJI YASUDA LIFE INSURANCE COMPANYNORTHERN TRUST GLOBAL SERVICES SE,LUXEMBOURG RE LUDU RE: UCITS CLIENTS
15．315 PCT NON TREATY ACCOUNTNORTHERN TRUST CO. (AVFC) RE IEDU
UCITS CLIENTS NON LENDING 15 PCT
TREATY ACCOUNTSTATE STREET BANK AND TRUST COMPANY
505223Controlling Shareholder (except for Parent
Company)
Parent Company
Supplementary Explanation

8,859,800

6.77

3,998,400

3.06

3,309,108

2.53

3,213,600

2.46

3,101,893

2.37

2,442,800

1.87

2,222,800

1.70

1,786,123

1.37

―――
None

UpdatedThe status of major shareholders is based on the information as of March 31, 2024.
The above-mentioned “Percentage” was calculated after deducting treasury shares (638,980
shares).
While the Large Shareholding Report (including Change Report) was made available for public
inspection as shown below, as the number of shares substantially held by each of such holders asof March 31, 2024, has not been confirmed by the Company, the above “Status of Major
Shareholders” is based on the number of shares held by each shareholder as recorded in theshareholders’ register:(1) Submitted by BlackRock Japan Co., Ltd. and five other persons
Effective Date of Reporting Obligation: November 30, 2020
Date Submitted: December 4, 2020
Number of Shares Owned: 4,488,731 shares
Ratio of Shares Held to Total Number of Issued and Outstanding Shares: 3.41%(2) Submitted by MUFG Bank, Ltd. and two other persons
Effective Date of Reporting Obligation: January 10, 2022
Date Submitted: January 17, 2022

Number of Shares Owned: 6,397,508 shares
Ratio of Shares Held to Total Number of Issued and Outstanding Shares: 4.87%(3) Submitted by Nomura Securities Co., Ltd. and one other person
Effective Date of Reporting Obligation: June 30, 2022
Date Submitted: July 7, 2022
Number of Shares Owned: 5,165,653 shares
Ratio of Shares Held to Total Number of Issued and Outstanding Shares: 3.93%(4) Submitted by Sumitomo Mitsui Trust Asset Management Co., Ltd. and one other person
Effective Date of Reporting Obligation: October 31, 2023
Date Submitted: November 7, 2023
Number of Shares Owned: 6,766,400 shares
Ratio of Shares Held to Total Number of Issued and Outstanding Shares: 5.15%(5) Submitted by Silchester International Investors LLP
Effective Date of Reporting Obligation: March 28, 2024
Date Submitted: March 29, 2024
Number of Shares Owned: 18,030,600 shares
Ratio of Shares Held to Total Number of Issued and Outstanding Shares: 13.71%

3. Corporate Attributes
Listed Stock Market and Market Section

Prime Market, Tokyo Stock Exchange

Fiscal Year-End

MarchType of Business

Nonferrous Metals

Number of Employees (consolidated) asof the End of the Previous Fiscal YearNet sales (consolidated) as of the End of
the Previous Fiscal Year
Number of Consolidated Subsidiaries asof the End of the Previous Fiscal Year

More than 1000
More than \1 trillion
From 50 to less than 100

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―――

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 a Nomination Committee, etc.

[Directors]
Maximum Number of Directors Stipulated in
Articles of Incorporation
Term of Office Stipulated in Articles ofIncorporation
Chairperson of the Board of Directors
Number of Directors

12 persons
1 yearChairman (except for the case where the person
concurrently serves as Chief Executive Officer)
11 persons[Outside Directors]
Number of Outside Directors

7 persons

Number of Independent Directors

7 personsOutside Directors’ Relationship with the Company (1) Updated
Name
Hikaru Sugi
TatsuoWakabayashi
Koji Igarashi
Kazuhiko Takeda

Attribute
From anothercompany
From anothercompany
From anothercompany
From anothercompany

Rikako Beppu

LawyerHatsunori
Kiriyama

From anothercompany

Nozomi Sagara

Others***Relationship with the Company*
a

b

c

d

e

f

g

h

i

j

k

△
〇

△

△

Categories for “Relationship with the Company”“○” when the Director presently falls or has recently fallen under the category;“△” when the Director fell under the category in the past“●” when a close relative of the Director presently falls or has recently fallen under the category;“▲” when a close relative of the Director fell under the category in the pasta. Executive of the Company or its subsidiaries
b. Non-executive Director or executive of the parent company of the Company
c. Executive of a fellow subsidiary company of the Company
d. A party whose major client or supplier is the Company or an executive thereof
e. Major client or supplier of the Company or an executive thereof
f. Consultant, accountant or legal professional who receives a large amount of monetaryconsideration or other property from the Company besides remuneration as a Director

g. Major shareholder of the Company (or an executive of the said major shareholder if theshareholder is a legal entity)
h. Executive of a client or supplier company of the Company (which does not correspond to any ofd, e, or f) (the Director himself/herself only)
i. Executive of a company, between which and the Company Outside Directors 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) Updated

Name

Membership ofCommittees
Nominat Remune
Audit
ion
rationHikaru Sugi ○○Designatio
n as
Independe
nt Director○

Supplementary
Explanation of
the Relationship

Reasons of Appointment

He came fromHe has extensive technical knowledge in

DENSO

development, design and manufacturing

CORPORATION (heprocesses, and he also has insight into

resigned from thecorporate

strategy

office of Executive

perspectiveandVice President ofmanagement

such company inexperience as manager of a manufacturer

June 2014) and thethat develops its business all over the world.

Company has a

Based on his insight, he has given usefulfromgeneralgaineda

globalaspectsthroughofhisbusiness relationship advice from various viewpoints in the Board
with Denso

of Directors meetings so as to enhance mid

Corporation related to to long-term corporate value of the Groupsuch activities as the and has supervised the execution of duties
sale of copper

byExecutive

Officers,

cathodes. However,independent position. Additionally, as a

the value of themember of the Nomination Committee andtransactions amounts Chairpersonofto less than 2% of the Committee

andrespective

the
a

etc.,

from

an

Remuneration

memberoftheSustainability Committee, he has been

consolidated net sales involvedinselectingcandidates

forof the Company andDirectors and Executive Officers, deciding

DENSO.

on the remuneration of Directors andExecutive Officers, etc. of the Company and

Hikaru Sugi isdiscussing themes regarding sustainability,

designated asetc. of the Company from an objective andIndependent Director neutral position.
of the Company.

As explained above, he has extensive

Name

Membership ofCommittees
Nominat Remune
Audit
ion
rationDesignatio
n as
Independe
nt Director

Supplementary
Explanation of
the Relationship

Reasons of Appointment
knowledge

and

rich

experiencethat

contributes to the sustainable growth of theGroup. The Company expects that he will
help strengthen the appropriate supervisoryand decision-making functions of the Boardof Directors, and therefore is appropriate forthe position of Outside Director.
The

Company

designated

him

as

Independent Director because he does not
violate any of the independency standards
established by Tokyo Stock Exchange, Inc.
and the independency standards separately
established by the Company, and we
considered

that

he

had

sufficient

independence and therefore was unlikely tohave conflicts of interest with generalshareholders.
Tatsuo○Wakabayashi○○<Status of important

He has insight into finance, accounting andconcurrent post>

general aspects of management gained

Senior Adviser,

through

Mitsubishi UFJ Trust

manager having served as President andand Banking

Chairman at financial institutions. Based on

Corporation

his insight, he has given useful advice from

Outside Director,

various viewpoints in the Board of Directors

Mitsubishi Logistics

meetings so as to enhance mid to long-term

Corporation

corporate value of the Group and has

hisextensive

experienceassupervised the execution of duties by
He is Senior Advisor

Executive

Officers,of Mitsubishi UFJ

independent position. Additionally, as a

Trust and Banking

member of the Nomination Committee andCorporation (MUTB)

the Remuneration Committee, he has been

(resigned from theinvolved

office of Chairman in

Directors and Executive Officers of theApril 2020). The

Company and deciding on the remuneration

Company has aof Directors and Executive Officers, etc. ofinselecting

etc.,

from

candidates

an

for

business relationship the Company from an objective and neutral

Name

Membership ofCommittees
Nominat Remune
Audit
ion
rationDesignatio
n as
Independe
nt Director

Supplementary
Explanation of
the Relationship

Reasons of Appointment

with MUTB in relation position. Also, as a member of the Audit
to activities such as

Committee, he has been engaged mainly incustody services, etc. auditingtheexecutionofdutiesbyHowever, the value of Executive Officers, etc. from an objective
the transactions

and neutral position.

amounts to less thanAs explained above, he has extensive

1% of the respective

knowledge

and

rich

experiencethat

consolidated net sales contributes to the sustainable growth of theof the Company andGroup. The Company expects that he will

MUTB. Moreover, the help strengthen the appropriate supervisory
Company has no

and decision-making functions of the Board

borrower-lenderof Directors, and therefore is appropriate forrelationship withthe position of Outside Director.

MUTB.

The

Company

designated

him

as

Independent Director because he does not
Tatsuo Wakabayashi violate any of the independency standards
is designated as

established by Tokyo Stock Exchange, Inc.

Independent Director and the independency standards separatelyof the Company.

established by the Company, and we
considered

that

he

had

sufficient

independence and therefore was unlikely tohave conflicts of interest with generalshareholders.
Koji
Igarashi○○

Koji Igarashi is

He has extensive technical knowledge indesignated astechnologicaldevelopment

andIndependent Director manufacturing as well as insight intoof the Company.

business globalization, business reform andcreation, promotion of digitalization, andgeneral aspects of management throughhis experience as manager of a food
manufacturer that develops its business allover the world. Based on his insight, he has
given useful advice from various viewpoints
in the Board of Directors meetings so as toenhance mid to long-term corporate valueof the Group and has supervised theName

Membership ofCommittees
Nominat Remune
Audit
ion
rationDesignatio
n as
Independe
nt Director

Supplementary
Explanation of
the Relationship

Reasons of Appointment
execution of duties by Executive Officers,
etc.,

from

an

independent

position.

Additionally,

as

a

of

membertheNomination Committee and Chairperson of
the Sustainability Committee, he has been
involvedinselectingcandidates

forDirectors and Executive Officers of theCompany and discussing themes regarding
sustainability, etc. of the Company from an
objective and neutral position. Also, as amember of the Audit Committee, he has
been engaged mainly in auditing theexecution of duties by Executive Officers,etc. from an objective and neutral position.
As explained above, he has extensive
knowledge

and

rich

experiencethat

contributes to the sustainable growth of theGroup. The Company expects that he will
help strengthen the appropriate supervisoryand decision-making functions of the Boardof Directors, and therefore is appropriate forthe position of Outside Director.
The

Company

designated

him

as

Independent Director because he does not
violate any of the independency standards
established by Tokyo Stock Exchange, Inc.
and the independency standards separately
established by the Company, and we
considered

that

he

had

sufficient

independence and therefore was unlikely tohave conflicts of interest with generalshareholders.
Kazuhiko
Takeda○○○He came from SonyHe has extensive knowledge in the fields ofCorporation (currently corporate

management,

businessSony Group

operations and administration, finance andCorporation)accounting, and information technology

NameMembership ofCommittees
Nominat Remune
Audit
ion
rationDesignatio
n as
Independe
nt Director

Supplementary
Explanation of
the Relationship

Reasons of Appointment(resigned from thethrough his management experience as

office of Senior Vice

manager of a conglomerate that develops a

President in Junewide range of businesses all over the world2021). The Company and as manager of its major subsidiaries.
has businessHe also has insight into corporate strategy

relationships,

and overall management from a global

including sales ofperspective based on his many years of

products, with Sonyexperience working in Europe and the

Corporation and Sony United States. Based on his insight, he has
Global Manufacturing given useful advice from various viewpoints& Operationsin the Board of Directors meetings so as toCorporation, which

enhance mid- to long-term corporate value

are specifiedof the Group and has supervised thesubsidiaries of Sonyexecution of duties by Executive Officers,

Group Corporation.

etc. from an independent position. Also, as

However, the value of Chairperson of the Audit Committee, he has
the transactions

been engaged mainly in auditing theamounts to less than

execution of duties by Executive Officers,

1% of the respective

etc. from an objective and neutral position.

consolidated net sales Additionally,asamemberoftheof the Company andSustainability Committee, he has beensuch corporations.

involved in discussing themes regarding

The Company hassustainability, etc. of the Company from an

no businessobjective and neutral position.

relationship withAs explained above, he has extensive

Sony Groupknowledge

Corporation.

contributes to the sustainable growth of the

and

rich

experience

thatGroup. The Company expects that he will
Kazuhiko Takeda ishelp strengthen the appropriate supervisory

designated as

and decision-making functions of the Board

Independent Director of Directors, and therefore is appropriate forof the Company.

the position of Outside Director.
The

Company

designated

him

as

Independent Director because he does not
violate any of the independency standards
established by Tokyo Stock Exchange, Inc.

Name

Membership ofCommittees
Nominat Remune
Audit
ion
rationDesignatio
n as
Independe
nt Director

Supplementary
Explanation of
the Relationship

Reasons of Appointment
and the independency standards separately
established by the Company, and we
considered

that

he

had

sufficient

independence and therefore was unlikely tohave conflicts of interest with generalshareholders.
Rikako
Beppu

○

○

○

○

<Status of

She has in-depth insights based on her

importantadvanced legal knowledge through her

concurrent post>

many years of experience as an attorney atCounsel, Squire

law in Japan and abroad, as well as

Patton Boggs Tokyo

specialized knowledge in corporate legal(Foreign Law Joint

affairs, particularly in the areas of global

Enterprise)business

Audit & Supervisory

restructuring. Based on her insight, she has

Board Member

given useful advice from various viewpoints(Outside), Toyota

in the Board of Directors meetings so as toTsusho Corporation

enhance mid- to long-term corporate value

development

andbusinessof the Group and has supervised the
Rikako Beppu is

execution of duties by Executive Officers,

designated as

etc.

from

an

independent

position.

Independent Director Additionally,

as

a

of

the

and

the

of the Company.

Remuneration

memberCommittee

Sustainability Committee, she has been
involved in deciding on the remuneration of
Directors and Executive Officers, etc. of theCompany and discussing themes regarding
sustainability, etc. of the Company from an
objective and neutral position. Also, as amember of the Audit Committee, she has
been engaged mainly in auditing theexecution of duties by Executive Officers,etc. from an objective and neutral position.
As explained above, she has extensive
knowledge

and

rich

experiencethat

contributes to the sustainable growth of theGroup. The Company expects that she will

Name

Membership ofCommittees
Nominat Remune
Audit
ion
rationDesignatio
n as
Independe
nt Director

Supplementary
Explanation of
the Relationship

Reasons of Appointment
help strengthen the appropriate supervisoryand decision-making functions of the Boardof Directors. Therefore, although she has nodirect experience of being involved incorporate management, she is appropriate
for the position of Outside Director.
The

Company

designated

her

as

Independent Director because she does not
violate any of the independency standards
established by Tokyo Stock Exchange, Inc.
and the independency standards separately
established by the Company, and we
considered

that

she

had

sufficient

independence and therefore was unlikely tohave conflicts of interest with generalshareholders.
Hatsunori
Kiriyama○○<Status of

He has extensive knowledge of corporate

importantmanagement and marketing as gained fromconcurrent post>

his experience as manager at a leading

Representativeinternational company as well as insights

Director and CEO,

into corporate strategies

forGL. Co., Ltd.

aspects of management from a global

Outside Director,

perspective based on his experience as

Calbee, Inc.

supervisor of the Asia region and manager

and general

at a U.S. company. Moreover, he has
Hatsunori Kiriyama

extensive insights into development of

is designated as

management human resources based on

Independent

many years of corporate management

Director of theexperience in and outside Japan.

Company.

As explained above, the Company expects
that he will help strengthen the appropriate
supervisory and decision-making functionsof the Board of Directors, and therefore isappropriate for the position of Outside
Director.
The

Company

designated

him

as

Name

Membership ofCommittees
Nominat Remune
Audit
ion
rationDesignatio
n as
Independe
nt Director

Supplementary
Explanation of
the Relationship

Reasons of Appointment
Independent Director because he does not
violate any of the independency standards
established by Tokyo Stock Exchange, Inc.
and the independency standards separately
established by the Company, and we
considered

that

he

had

sufficient

independence and therefore was unlikely tohave conflicts of interest with generalshareholders.
Nozomi
Sagara○○She came from theShe has extensive knowledge of trade andMinistry ofindustry policies through many years of

Economy, Tradeservice at the Ministry of Economy, Tradeand Industry

and(retired from theknowledge in metallic mineral resources,

Ministry in Julyrenewable energy, information technology2020), and although

and recycling fields as well as technicalthe Ministryknowledge as a holder of a Master ofprovided a subsidy

Engineering degree.

to the Company in

As explained above, the Company expects

FY2024, thethat she will help strengthen the appropriate

amount of thesupervisory and decision-making functions

subsidy was lessof the Board of Directors. Therefore,

than 1% of thealthough she has no direct experience ofCompany’s

being involved in corporate management,

consolidated net

she is appropriate for the position of Outside

sales and of the

Director.

total revenue of the

The

Ministry.

Independent Director because she does not

Industry.

CompanyShehasdesignatedspecialized

her

as

violate any of the independency standards
Nozomi Sagara isestablished by Tokyo Stock Exchange, Inc.

designated as

and the independency standards separately

Independent

established by the Company, and we

Director of theconsidered

Company.

independence and therefore was unlikely to

that

she

had

sufficient

have conflicts of interest with generalshareholders.

[Committees]
Committee’s Composition and Attributes of Chairperson Updated
All Committee
Members
Nomination
Committee
Remuneration
Committee
Audit
Committee

Full-timeMembers

InsideDirectors

OutsideDirectors

Chairperson

5

0

0

5

3

0

0

3

5

1

1

4

OutsideDirector
OutsideDirector
OutsideDirector[Executive Officers]
Number of Executive Officers

8 personsStatus of Additional Duties
Additional Duties as Director
Nomination
Remuneration
Committee
Committee
MemberMemberNo
No

Additional
Duties as
Employee

Name

Representative
Authority

Naoki Ono

Yes

Yes

Tetsuya Tanaka
Nobuhiro
Takayanagi
Makiko Nogawa

No

No

No

No

No

No

Yes

No

No

No

No

No

No

No

No

Makoto Shibata

Yes

Yes

No

No

No

Katsuyoshi Isaji

No

No

No

No

No

Toshinori Ishii

No

No

No

No

No

Kazuo Ohara

No

No

No

No

No

[Auditing Structure]
Appointment of Directors and/or
Employees to Support the Audit
Committee

No

Appointed

Matters Related to the Independence of Such Directors and/or Employees from Executive Officers- The Company establishes the Audit Committee Office as an organization dedicated to assistingwith the operations of the Audit Committee. The Company assigns employees in the Audit
Committee Office to assist with the operations of the Audit Committee and carry out theoperations according to the instructions of the Committee.
- As to personnel changes in employees who belong to the Audit Committee Office, the Executive
Officer in charge of the Internal Audit Div. of the Corporate shall obtain prior consent from the Audit

Committee (if the Audit Committee nominates a specific Audit Committee Member, such Audit
Committee Member) in order to secure independence from Executive Officers. In addition, the Audit
Committee (if the Audit Committee nominates a specific Audit Committee Member, such Audit
Committee Member) conducts the performance evaluation of such employees.
- The Audit Committee may give instructions to the department in charge of internal audits if doing
so is required to carry out its job description. The department in charge of internal audits shall give
preference to the instructions of the Audit Committee if there is a conflict between the instructions
given by the Audit Committee and those given by Executive Officers.

Cooperation among Audit Committee, Accounting Auditor and Internal Audit Department
The Audit Committee engages in audits in close cooperation with the department responsible forinternal audits, receiving reports from the said department on audit results on a regular basis,
sharing this information, and receiving reports on the status of the execution of duties from thedepartment responsible for internal control, etc.
Further, the Audit Committee regularly receives reports from Accounting Auditor on audit results,
shares this information, and engages in audits in close cooperation with said Accounting Auditor
after conferring on the audit plans for both with Accounting Auditor.
In addition, the Audit Committee, the department in charge of internal audits and the Accounting
Auditor hold meetings to strengthen cooperation in order to enhance the effectiveness of the audits
by the three parties overall.
[Independent Directors]
Number of Independent Directors

7 persons

Matters relating to Independent Directors
The Company designates all of the Outside Directors who satisfy the requirements for Independent
Directors as Independent Directors.
Provided that the Company considers that an Outside Director is not independent if he or she falls
under any of the conditions listed below in addition to meeting the standards for independence
established by Tokyo Stock Exchange, Inc.
1. An individual who falls under or has fallen under any of items (1) or (2) below, either presently orin the past:(1) An executive or non-executive Director (excluding Outside Director) of the Company; or(2) An executive or non-executive Director of the Company’s subsidiary.
2. An individual who falls under any of items (1) through (5) below:(1) An executive of a client or supplier company of the Company, whose value of transactions
amounted to 2% or more of the consolidated net sales of the Company or the client or suppliercompany as of the end of the previous fiscal year;(2) A person who received, as a professional or consultant, etc., consideration of not less than 10
million yen from the Company in the previous fiscal year, excluding his/her consideration as a
Director;(3) An executive of an organization that received a donation of not less than 10 million yen fromthe Company in the previous fiscal year;(4) A shareholder who directly or indirectly holds at least 10% of the total number of voting rightsof the Company or an executive of such shareholder; or(5) The Company's Accounting Auditor or its employee, etc.
3. An individual who has fallen under any of items (1) to (5) of 2 above at any time in the past three(3) years:
4. A close relative of any of the persons listed in item (1) or (2) of 1 above, items (1) to (5) of 2
above, or 3 above (excluding unimportant persons); or
5. A person who has served as the Company's Outside Director for a period of more than eight (8)years.
(Article 24 and Exhibit 2 of the Basic Policy on Corporate Governance)[Incentives]
Incentive Policies for Directors and/or
Executive Officers

Performance-linked Remuneration

Supplementary Explanation
As remuneration linked to corporate performance, a stock compensation plan utilizing a trust has
been adopted, in addition to payment of bonuses. For details, please refer to “Remuneration System
for Directors and Executive Officers” attached at the end of this Report.
Recipients of Stock Options
Supplementary Explanation―――[Remuneration for Directors and Executive Officers]
Disclosure of Individual Directors’
Remuneration
Disclosure of Individual Executive Officers’
Remuneration
Supplementary Explanation Updated

No Individual Disclosure
Only part of information is individually disclosed

1. The breakdown of remuneration for Directors (excluding Outside Directors and Directors who
concurrently serve as Executive Officers) and Outside Directors for FY2024 is as follows. (*1 and*2)
Directors(excluding Outside Directors , and Directors who concurrently serve as Executive
Officers)

Fixed remuneration: 88 million yen (Eligible recipients: 1)

Outside Directors

Fixed remuneration: 126 million yen (Eligible recipients: 7)

The breakdown of remuneration for Executive Officers for FY2024 is as follows. (*1 and *2)
Fixed remuneration: 312 million yen (Eligible recipients: 9)
Bonus (performance-linked remuneration): 76 million yen (Eligible recipients: 9)
Stock-based compensation: 100 million yen (Eligible recipients: 9) (*3)(*1)

The total amount of remuneration, etc. paid to Directors who concurrently serve as
Executive Officers and the number of persons covered by such remuneration, etc. areshown in the column for Executive Officers.

(*2)

As of the end of FY2024, the Company had 11 Directors and 9 Executive Officers.

(*3)

The Company has introduced stock-based compensation based on a trust scheme, andthe above amount of stock-based compensation represents the amount recorded as
expenses for FY2024.

2. The breakdown of remuneration for Directors and Executive Officers who was awarded
remuneration, etc. of 100 million yen or more in total is as follows. (*1)
Executive Officer Naoki Ono (*1)
Fixed remuneration: 63 million yen
Bonus (performance-linked remuneration): 16 million yen
Stock-based compensation: 25 million yen (*2)(*1)

Naoki Ono currently serves as both a Director and an Executive Officer. However, since
he is included in the classification “Executive Officer” in 1. above, he is also classified as
an “Executive Officer” in this section.

(*2)

The Company has introduced stock-based compensation based on a trust scheme, andthe above amount of stock-based compensation represents the amount recorded as
expenses for FY2024.

Policy on Determining Remuneration
Amounts and Calculation Methods

Established

Disclosure of Policy on Determining Remuneration Amounts and Calculation Methods

For the policy on determining remuneration, please refer to “Remuneration System for Directors
and Executive Officers” attached at the end of this Report.
[Supporting System for Outside Directors]
The Company shall develop the following systems to ensure that the collection of information by
Directors, including Outside Directors, is facilitated and that the provision of necessary information
to Directors is implemented properly:(1) Establish a secretariat that supports activities necessary for supervision over businessexecution and activities necessary for the appropriate operation of the Board of Directors, theNomination Committee, the Audit Committee, the Remuneration Committee, the Sustainability
Committee, and Outside Directors' informal meetings, etc. under the instructions of the Boardof Directors;(2) Develop a system that enables each Director to access, to a reasonable extent, materials anddata related to important committees pertaining to management, such as the Strategic
Management Committee, in order to appropriately supervise business execution;(3) Develop a system in which Executive Officers directly report the progress of the execution of
their duties to the Board of Directors on a periodic basis or in a timely manner at the request of
Directors; and(4) Develop a system that enables the Board of Directors to obtain the assistance of outside
experts, such as lawyers and certified public accountants, as necessary, and bear thenecessary costs and expenses.
In addition to the foregoing, the Company takes measures and provides support to Outside Directors
as in order to contribute to appropriate opinions and decisions:- When a meeting of the Board of Directors is held, materials concerning matters to be discussed
at a meeting of the Board of Directors are distributed in advance and time to consider proposals in
advance is secured. In addition, prior explanations on the content of proposals are given asnecessary.
- Dedicated computers or tablet devices, or both, are provided to Outside Directors to provide themwith an environment to access necessary information, including materials for the Board of
Directors, from outside the Company in a timely manner.
- The Company regularly holds informal meetings participated only by Outside Directors, in order toallow them to exchange information and share awareness from an independent and objective
perspective. Discussions of the meetings cover a wide range of topics including the Company’s
management issues.
- The Company holds briefings for Directors in order to deepen their understanding of the Group’sbusiness and help them to exchange opinions with the executive side to improve the corporate
value. At the briefings, the executive side explains about important measures for Medium-termManagement Strategy and the summary of individual business and projects, etc., on whichparticipants exchange opinions.
- Business site tours by Outside Directors are made in order to deepen their understanding of theGroup’s businesses.
(Article 26 of the Basic Policy on Corporate Governance)[Retired Representative Director Presidents holding advisory positions]
Information on retired Representative Director Presidents holding advisory positions Updated
Employment

Job title/
position

Name

Yumi
AkimotoHonorary
Executive
Councilor
Honorary
Executive
Councilor

Akira
Nishikawa

Responsibilities

Not applicable
External activities(Not involved interms

Date when(Full/part time,

former role as

with/without

President

remuneration,

ended

etc.)
Part-time
Without
remuneration
Part-time
Without
remuneration

Term

June 29, 2000

Undetermined

June 29, 2004

Undetermined

March 31,2015

Undeterminedmanagement)
HiroshiYao

Honorary
Executive
Councilor

External activities(Not involved inPart-time
Without
remuneration

management)
NumberofretiredPresidents

advisory positions

holding

3 persons

Others
1. Neither Honorary Executive Councilor nor Executive Advisor is involved in the decision makingof the Company.
2. In the above column “Date when former role as President ended,” the date on which heresigned from the office of President of the Company is stated.

2. Matters on Functions of Business Execution, Auditing, Oversight, Nomination andRemuneration Decisions (Overview of Current Corporate Governance System) Updated- Overview of Corporate Governance(Board of Directors)
The functions and duties of the Board of Directors shall be as follows:-

Upon delegation by shareholders, the Board of Directors shall indicate the direction of its
management and make an effort to enhance the Group's medium- to long-term corporate valueby, for example, engaging in freewheeling and constructive discussion on management policies
and management reforms;-

The Board of Directors shall determine matters that may have a serious impact on management,such as management policies and management reforms, in accordance with the provisions oflaws, the Articles of Incorporation and the Board of Directors Rules;-

The Board of Directors shall accelerate decision-making in business execution by delegating
the authority over business execution to an appropriate extent to Executive Officers inaccordance with the provisions of the Board of Directors Rules, etc. so that Executive Officers
may assume the responsibility and authority to make decisions and execute business in
response to changes in the business environment; and-The state of Group governance and the progress of the execution of duties, including the
progress of the management strategy, shall be reported by Executive Officers to and supervisedby the Board of Directors on a periodic basis.

The Board of Directors is comprised of 11 Directors (including seven (7) Outside Directors), and the
Chairperson of the Board of Directors is performed by the Akira Takeuchi (Chairman of theCompany).
In FY2024, meetings were held 19 times (Directors’ rate of attendance: Akira Takeuchi 100%; Naoki
Ono 100%; Makoto Shibata 100%; Nobuhiro Takayanagi 100%; Mariko Tokuno 100%; Hiroshi
Watanabe 100%; Hikaru Sugi 100%; Tatsuo Wakabayashi 100%; Koji Igarashi 100%; Kazuhiko
Takeda 100%; Rikako Beppu 100% (For Makoto Shibata, the status of attendance after assuming
the Director position in June 2023 is stated)).
(Article 15 of the Basic Policy on Corporate Governance)(Nomination Committee)
The Nomination Committee determines the policy for nomination of candidates for Director anddismissal of Directors and the content of proposals for the appointment and dismissal of Directors
to be submitted to the General Meeting of Shareholders. In addition to this, the Committee
deliberates on the appointment and dismissal of Executive Officers, etc. in response to inquiries
from the Board of Directors and reports back to the Board of Directors thereof. Furthermore, theCommittee deliberates on the candidates for the successor of the Chief Executive Officer with thedevelopment plans and exercises supervision to ensure that the development of successor
candidates is performed appropriately. The Committee deliberates on candidates for the next Chief
Executive Officer in response to the inquiries from the Board of Directors and reports back to theBoard.
Majority of the Nomination Committee members shall be Independent Outside Directors, and the
Chairperson shall be performed by an Independent Outside Director. The Nomination Committee iscomprised of five (5) Directors (All are Outside Directors), and the Chairperson is Tatsuo
Wakabayashi (Independent Outside Director).

In FY2024, the meetings were held 14 times (Members’ rate of attendance: Mariko Tokuno 100%;
Hiroshi Watanabe 100%; Hikaru Sugi 100%; Tatsuo Wakabayashi 100%; Koji Igarashi 100% (ForKoji Igarashi, the status of attendance after assuming the position in June 2023 is stated)).
(Article 30 and 33 of the Basic Policy on Corporate Governance)(Audit Committee)
The Audit Committee audits the legality and validity of duties performed by Directors and Executive
Officers, via audits either using internal control systems or directly by the Audit Committee member
selected by the Audit committee.
Majority of the Audit Committee members shall be Independent Outside Directors, and the
Chairperson shall be performed by an Independent Outside Director.
The Audit Committee also elects one (1) full time Member of the Audit Committee in order to improvethe effectiveness of audits conducted by the Audit Committee. The Audit Committee is comprisedof five (5) Directors (including four (4) Outside Directors), and the Chairperson is Kazuhiko Takeda(Independent Outside Director).
In FY2024, the meetings were held 17 times (Members’ rate of attendance: Kazuhiko Takeda 100%;
Tatsuo Wakabayashi 100%; Koji Igarashi 100%; Rikako Beppu 100%; Akira Takeuchi 100% (For
Rikako Beppu, the status of attendance after assuming the position in June 2023 is stated)).
(Article 34 of the Basic Policy on Corporate Governance)(Remuneration Committee)
The Remuneration Committee establishes policies for determining individual remuneration for
Directors and Executive Officers, and determines the individual remuneration to be received by
Directors and Executive Officers based on such policies.
Majority of the Remuneration Committee members shall be Independent Outside Directors, and the
Chairperson shall be performed by an Independent Outside Director. The Remuneration Committee
is comprised of three (3) Directors (All are Outside Directors), and the Chairperson is Hikaru Sugi
(Independent Outside Director).
In FY2024, the meetings were held 9 times (Members’ rate of attendance: Hikaru Sugi 100%; Mariko
Tokuno 89%; Hiroshi Watanabe 100%; Tatsuo Wakabayashi 100%; Rikako Beppu 100%(For
Hiroshi Watanabe and Tatsuo Wakabayashi, the status of attendance after assuming the positionin June 2023 is stated)).
(Article 35 of the Basic Policy on Corporate Governance)(Sustainability Committee)
The Sustainability Committee was established under the Board of Directors on June 28, 2022 inorder for the Board of Directors to not only monitor the Company’s sustainability efforts but also to
proactively consider the direction of the sustainability efforts from different perspectives and presentthem within the Company. Through this, the Company will improve the quality of its sustainability
initiatives and enhance the Group's medium- to long-term corporate value.
The Sustainability Committee shall review policies on sustainability issues and others after being
consulted by the Board of Directors, and submit the details to the Board.
Majority of the Sustainability Committee members shall be Independent Outside Directors, and the
Chairperson shall be performed by an Independent Outside Director. Currently, the Sustainability
Committee is comprised of four (4) Directors (including three (3) Outside Directors), and the
Chairperson is Koji Igarashi (Independent Outside Director).
In FY2024, the meetings were held 9 times (Members’ rate of attendance: Koji Igarashi 100%;
Hikaru Sugi 100%; Kazuhiko Takeda 100%; Rikako Beppu 100%; Naoki Ono 100% (For Naoki Ono,
the status of attendance after assuming the position in June 2023 is stated)).
(Article 36 of the Basic Policy on Corporate Governance).
*To enable Directors to perform at a higher level, the Company reviewed the number ofcommittees on which each Director concurrently serves and the appropriate number of members
for each committee. The number of members on the Remuneration Committee and theSustainability Committee were reduced respectively as of June 26, 2024 (members of theRemuneration Committee were reduced from five (5) to three (3), and those of the Sustainability
Committee were reduced from five (5) to four (4)).
Even after the number of committee members is reduced, the committees will allow Outside
Directors other than committee members to participate as observers to eliminate information gaps
among Outside Directors, and will also have the CEO and others attend committee meetings asnecessary to hear explanations and opinions.
(Executive Officer)
Executive Officers execute business in accordance with the prescribed segregation of duties, basedon the delegation of authority from the Board of Directors.
The Company has 8 Executive Officers, of which the Chief Executive Officer Naoki Ono, andManaging Executive Officer Makoto Shibata, are elected as Representative Executive Officers upon
the decision of the Board of Directors.
(Article 28 of the Basic Policy on Corporate Governance)(Strategic Management Committee)
Following the delegation of authority from the Board of Directors, the Strategic Management
Committee reviews and determines important matters concerning the management of the entire
Group. The Strategic Management Committee consists of the Chief Executive Officer and the
Executive Officers in charge of each department of the Corporate. The Chief Executive Officer
serves as the chairperson of the committee.

- Status of audits, internal audits and accounting audits by the Audit Committee(Status of audits performed by the Audit Committee)
In addition to attending meetings of the Strategic Management Committee and other important
meetings, by making use of a method via the internet at the same time, members of the Audit
Committee conduct interviews with Directors, Executive Officers, departments in charge of internal
audits, and other departments in charge of internal control concerning progress on the execution of
their duties, and view important approval documentation, etc. Selected members of the Audit
Committee investigate the state of business and assets at the Company headquarters and importantbusiness sites according to the audit standards and audit plans, etc. of the Audit Committee asestablished by the Audit Committee. They also conduct onsite audits of subsidiaries, etc. as needed,while forming a framework for conducting audits on the state of the execution of duties by Directors
and Executive Officers.
In addition, the Audit Committee holds regular meetings with major subsidiaries’ Auditors as part ofefforts to strengthen coordination in order to enhance the effectiveness of the Group’s audit
systems. The Audit Committee Office has been set up directly under the Audit Committee to assist
the Committee’s duties.
Kazuhiko Takeda, Chairperson of the Audit Committee, has extensive knowledge of finance andaccounting through his experience as CFO at major subsidiaries of listed companies.
The Audit Committee examines the status of the operation of the internal control system, the statusof risks and countermeasures in implementing the Medium-term Management Strategy, the statusof measures for work place safety, the status of initiatives to sustainability issues, including
compliance with the Antimonopoly Act, the appropriateness of auditing methods and the results ofaudits by Accounting Auditors, as well as other matters.
Full-time Members of the Audit Committee attend important meetings such as the Strategic
Management Committee, the Group’s Management Committee, Budget Deliberation, Monozukuri
and R&D Strategy Meetings and the Sustainability Deliberative Council, as well as conduct on-site
audits of locations both inside and outside Japan, including affiliates, and make comments orsuggestions on matters of concern. Regular meetings are also held with the Chief Executive Officer,
as well as individual discussions with Executive Officers, to exchange opinions. In addition, theyreceive reports from each division of the Corporate on a regular or timely basis and makesuggestions or recommendations. Details thereof are shared with the Audit Committee in a timely
manner.
(Status of internal audits)
As of June 26, 2024, the Internal Audit Div. of the Corporate and the Internal Audit Dept. of in-housecompanies, which are departments in charge of internal audits, consist of 29 persons, including
each General Manager of each Audit Dept. Each Audit Dept. is responsible for conducting internal
audit work on the instructions of the responsible Executive Officers in cooperation with the Audit

Committee to investigate the effectiveness and efficiency of company operations across the Group,
the credibility of financial reports, the state of asset preservation and use, the risk management
status, and the state of compliance with laws and regulations, and internal rules and standards,
based on the internal audit plans approved by the responsible Executive Officers and the Audit
Committee. They also share information with and work closely with the Accounting Auditor to
conduct audits. The Internal Audit Div. of the Corporate regularly reports the results of Group-wide
audits to the responsible Executive Officer and the Audit Committee, and the responsible Executive
Officer regularly reports the results of Group-wide audits to the Board of Directors.
(Status of accounting audit)
The Status of accounting audit for FY2024 is as follows:(1) Name of Audit Corporation
Deloitte Touche Tohmatsu LLC(2) Continuous audit period
From 2023 (one year)(3) Certified public accountants who performed accounting audit duties
Designated limited liability partner, Engagement Partner

Yukitaka Maruchi

Designated limited liability partner, Engagement Partner

Koji Inoue

Designated limited liability partner, Engagement Partner

Hiroyuki Fukushima(4) Composition of assistants for accounting audit duties
Assistants for the accounting audit work of the Company consist of 31 certified public
accountants and 76 others.
(5) Policy on appointment, dismissal and non-reappointment
The Audit Committee appoints the Accounting Auditor based on the following criteria: (1)expertise, independence, timeliness and appropriateness, quality control and governancesystems, (2) ability to respond to the Company's multi-industry and global businessdevelopments, (3) efficiency improvement of accounting audit operations, (4) communication
with the Audit Committee, management, etc., (5) any applicability to dismissal requirements
based on statutory grounds, and (6) continuous audit period. The Audit Committee’s policy is todismiss or not reappoint if a problem is found in these criteria.
(6) Evaluation of the Accounting Auditor by the Audit Committee
Based on the standards for evaluation and selection of Accounting Auditor established by the
Audit Committee, it comprehensively evaluates these criteria of Accounting Auditor after
obtaining materials from Executive Officers, related departments in the Company andAccounting Auditor and receiving reports necessary for determination.
- Content and outline of the Limited Liability Agreement with Outside Directors
Provisions of the Articles of Incorporation allow the Company to execute with Directors (excludingthose who are Executive Directors, etc.) agreements limiting liability for damages in accordancewith Article 427, Paragraph 1 of the Companies Act. In accordance with the provisions, theCompany has concluded Limited Liability Agreements with all of the Non-executive Directors. The
outline of the agreements is as follows:
With respect to liability as described in Article 423, Paragraph 1 of the Companies Act, if Directors(excluding those who are Executive Directors, etc.) perform their duties in good faith and withoutgross negligence, the Directors shall be liable to the Company for damages only to the extent ofminimum liability as set out in Article 425, Paragraph 1 of the Companies Act. The Company shallindemnify the Directors for damages in excess of the amount of the liability.

3. Reasons for Adoption of Current Corporate Governance System
Among the governance systems under the Companies Act, we have chosen to be a Company witha Nomination Committee, etc., and by separating supervision and execution, will strengthen the
Board of Directors’ management supervisory functions, improve the transparency and fairness ofmanagement and accelerate business execution and decision making.
As the Group is an integrated business entity supplying basic materials and elements indispensable
to the world, and is involved in recycling business and renewable energy business, we adopted an
in-house company system so as to facilitate and appropriately execute business operations.
Further, Outside Directors play a role in supervising the appropriateness of Directors and Executive
Officers in the execution of their duties from an objective standpoint and in providing a diverse rangeof values regarding the management of the Company based on expert knowledge and throughexperience that differs from that of officers who advanced internally, so that the Board of Directors’
management supervisory functions would be further strengthened.
(Articles 2 and 23 of the Basic Policy on Corporate Governance)

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

The Company discloses convocation notices of General Meetings ofShareholders earlier than the deadline designated by law, and makes
effort to send them out as early as possible. As for the convocation
notice of the 99th Ordinary General Meeting of Shareholders held on
June 26, 2024, it was disclosed on the Company’s website on May 24,
2024, and sent on May 31, 2024.

Scheduling General
Meeting of Shareholders
Avoiding the Peak Day
Allowing Electronic
Exercise of Voting Rights

A General Meeting of Shareholders was held on June 26, 2024.
Since the 80th Ordinary General Meeting of Shareholders held on
June 29, 2005, the Company has had in place a system to exercise
voting rights by electromagnetic means (Internet). Further, since the82nd Ordinary General Meeting of Shareholders held on June 28,
2007, the Company has been participating in the Electronic Voting
Platform for Institutional Investors operated by ICJ, Inc.

Participation in Electronic
Voting Platform

Since the 82nd Ordinary General Meeting of Shareholders held on
June 28, 2007, the Company has been participating in the Electronic
Voting Platform for Institutional Investors operated by ICJ, Inc.

Providing Convocation
Notice in English

We are endeavoring to make disclosure to overseas/foreign investors
by placing information on our English website, the Timely Disclosure
network (TDnet) operated by Tokyo Stock Exchange, Inc. or theElectronic Voting Platform for Institutional Investors operated by ICJ,
Inc.

Other

To improve shareholder convenience, a hybrid participation-type
General Meeting of Shareholders (live streaming) has been conductedfrom the 96th Ordinary General Meeting of Shareholders held on June24, 2021. The streamed video of the General Meeting of Shareholders
will also be posted on the Company’ s website for a certain period oftime.

2. IR Activities
Supplementary Explanations

Whether or not
any explanation
was provided by
the representative

Preparation and Publicationof Disclosure Policy

Our IR policy is posted on our website:

Regular Explanatory
Meetings for Individual
Investors

The Company holds company information sessions

https://www.mmc.co.jp/corporate/en/ir/irpolicy.html
Nofor individual investors on a periodic basis with theChief Financial Officer, etc. as explainers.

Regular Investor
Conferences for Analysts
and Institutional Investors

The Company holds financial results briefings andprogress briefings on management strategies foranalysts and institutional investors with the Chief
Executive Officer, the Chief Financial Officer, etc. asYesexplainers, after the full-year financial closing andthe second quarter financial closing, and holds
financial results briefings with the Chief Financial
Officer and others as explainers after the first andthird quarter financial closing. Further, the Company
holds IR Day and explanatory meetings regarding
individual businesses, etc. from time to time. In
addition,theCompany

regularly

holds

a

sustainability meeting on its sustainability initiatives.
Regular Explanatory
Meetings for Foreign
Investors

The Company holds explanatory meetings regarding

Yes

management conditions and each business forforeign investors on a periodic basis with the Chief
Executive Officer, the Chief Financial Officer etc. as
explainers.

Posting of IR Materials on
WebsiteOn our website, we post summaries of financial
results, securities reports, Integrated Reports,
materials for investor conference for analysts andinstitutional

investors,

materials

forcompany

information

sessionsforindividual

investors,

shareholder newsletters, as well as timely disclosurematerials required by the listing rules of stock
exchanges, etc.
Establishment of
Department and/or
Executive Officer in Chargeof IR

The Company has appointed the officer (Chief
Financial Officer) who supervises IR matters, andalso designated the full-time staff members in the
Corporate Communications Dept.

3. Measures to Ensure Due Respect for Stakeholders
Supplementary Explanations
Stipulation of Internal
Regulations for Respecting
the Position of Stakeholders

They are set forth in the Basic Policy on Corporate Governance andthe Code of Conduct, as well as Sustainability Policy and others.
These are available on our website.
Basic Policy on Corporate Governance:
https://www.mmc.co.jp/corporate/en/company/governance.html
Code of Conduct:
https://www.mmc.co.jp/corporate/en/company/policy.html
Sustainability Policy：

https://www.mmc.co.jp/corporate/en/sustainability/
Implementation ofEnvironmental Activities,
CSR Activities etc.

The Company established Compliance & Risk Management Dept. of
Legal & Compliance Div. and designated a CRM (Compliance & Risk
Management) Managing Director, CRM Director and CRM Manager ineach department of the Company and its subsidiaries. All of thecompanies in the Mitsubishi Materials Group are working on activities,
including, among others, risk management and thorough compliance.
The status of the activities concerning the above is disclosed in the
Integrated Reports, Sustainability Reports, etc.
Further, with the establishment of an organization to respond tovarious sustainability issues, the Company gathers and discusses
requests from stakeholders so as to reflect them in the management.
Integrated Reports:
https://www.mmc.co.jp/corporate/en/ir/library/annual.html
Sustainability Reports:
https://mmc.disclosure.site/en/

Development of Policies on
Information Provision to
Stakeholders

They are set forth in the Basic Policy on Corporate Governance, etc.

IV. Matters Related to the Internal Control System
1. Basic Approach to Internal Control System and the Progress of System Development
UpdatedWe recognize that in order to attain our business purpose, management plan, etc., theestablishment of appropriate internal control systems is the key task of the Company.
With such recognition, we have been promoting improvements to our internal control systems by
developing the following structures based on the Companies Act and the Regulation for
Enforcement of the Companies Act, through the establishment and operation of internal regulations,etc. We will review said systems as necessary, and will make every effort to operate them more
effectively.
1. Systems to ensure the execution of duties by Executive Officers and employees in conformity
with laws and the Articles of Incorporation(1) The Company shall determine the Corporate Philosophy, etc. as the supreme common rule of
Mitsubishi Materials Group, and also shall put in place internal regulations to establish a compliancesystem.
(2) The Company shall determine through the Board of Directors, the Strategic Management

Committee and other committees, etc., the details for the execution of duties by the Executive
Officers and employees in accordance with laws, the Articles of Incorporation, internal regulations,etc. In addition, the legal department and the related departments shall carry out the preliminary
review of specific significant matters.
(3) The Board of Directors shall receive reports on the status of the execution of duties from
Executive Officers on a regular basis and on necessary matters from Executive Officers at the Boardof Directors meetings from time to time.
(4) The Company shall appoint an Officer from among its Executive Officers to oversee mattersrelating to compliance and establish an organization for SCQ (S: Safety & Health, C: Compliance &Environment, Q: Quality) and a department responsible for compliance, and shall also enforce
cross-divisional compliance promotion activities (including internal education) for the whole
Company based on the policies, plans, etc. to be established for each fiscal year.
(5) The Company shall establish a reporting desk to deal with particulars related to problems that
may arise over compliance.
(6) The Company shall enforce periodical auditing by the department in charge of internal audits.
2. Systems for preservation and management of information related to the execution of duties of
Executive Officers
The Company shall properly preserve and manage the minutes and other significant information of
the Strategic Management Committee and other important meetings, based on laws, the Articles ofIncorporation, internal regulations, etc.
3. Regulations and other systems concerning risk management(1) The Company shall deliberate carefully on significant matters through the Board of Directors,
the Strategic Management Committee and other decision-making bodies based on laws, the Articles
of Incorporation, internal regulations, etc. In addition, the Company shall carry out the preliminary
review of significant matters through legal and other related departments based on the internal
regulations and others in order to identify risks and prevent risk elicitation and manifestation.
(2) The Company shall determine the internal regulations, policies and plans, etc. related to generalrisk management. In addition, the Company shall appoint an Officer from among its Executive
Officers to oversee matters relating to risk management and establish an organization for SCQ anda department responsible for risk management and shall enforce cross-divisional risk management
promotion activities for the whole Company.
(3) Executive Officers shall continuously identify risk factors of the Group and formulate and promotemeasures necessary to minimize losses if risks materialize, based on internal regulations, policies
and plans concerning risk management in general.
(4) The Company shall establish a crisis management system and rules concerning crisis response
measures and other matters on crisis management in order to promptly and appropriately addressany risk that may have a material impact on the Group’s management and to take corrective
measures.
4. Systems to ensure efficient execution of duties by Executive Officers(1) The Company has chosen to be a Company with a Nomination Committee, etc., among thegovernance systems under the Companies Act and will accelerate decision making with theappropriate transfer of authority to Executive Officers with respect to decisions on mattersconcerning the execution of duties. The Company will establish the rules for official authority anddecision making based on the areas of responsibility of each Executive Officer and internal
regulations.
(2) The Company shall determine the management plan, allocate suitable management resources
and authority among the divisions controlled by each Executive Officer to achieve the plan, andrequire those divisions to formulate their own specific plans. In addition, the Executive Officers shallsuitably verify the progress state of the plan of each division and take appropriate measures whennecessary.
5. Systems to ensure appropriate operations by the corporate group comprising the Company andits subsidiaries(1) The Company shall aim to establish corporate ethics and build a Group compliance and risk
management system (including an internal education system) through the promotion of activities
and behaviors, etc. toward compliance and risk management by the Group, including subsidiaries,
based on the Corporate Philosophy, etc. and internal regulations, etc. that are applied consistently
throughout the Group.
(2) Concerning each subsidiary, the Company shall aim to improve the soundness and efficiency ofmanagement of the subsidiary, and by extension the whole Group, by determining a response
liaison department within the Company. The concerned department shall consult and exchange
information with the subsidiary concerning specific significant matters.
(3) The Company shall establish various regulations related to internal controls concerning financial
reporting. The Company shall also establish assessment mechanisms for those internal controls
and build a system to ensure the accuracy of the Group’s financial reports.
(4) In addition to the above-mentioned (1), (2) and (3), the Company shall enforce periodic auditing
concerning compliance, risk management and the efficiency of management of subsidiaries by thedepartment in charge of internal audits of the Company.
6. Matters concerning employees assigned to assist the Audit Committee, matters concerning theindependence of such employees from Executive Officers, and matters concerning ensuring theeffectiveness of instructions provided by the Audit Committee to such employees(1) The Company shall establish the Audit Committee Office to assist with the operations of theAudit Committee. The Company shall assign necessary personnel as employees to assist with theoperations of the Audit Committee within the Audit Committee Office.
(2) The employees who are to assist the operations of the Audit Committee shall carry out theoperations of the Audit Committee according to the instructions of the committee.
(3) Personnel changes of employees who are to assist the operations of the Audit Committee shallbe made after obtaining the prior consent of the Audit Committee (in the case where the Audit
Committee has designated a specific Audit Committee Member, such Audit Committee Member).
Further, the Audit Committee (in the case where the Audit Committee has designated a specific
Audit Committee Member, such Audit Committee Member) shall conduct personnel performance
evaluation of employees who are to assist the operations of the Audit Committee.
7. Systems for reporting to the Audit Committee and for ensuring that people making reports shallnot experience disadvantageous treatment as a result of this reporting(1) The Directors (excluding those who are Members of the Audit Committee), Executive Officers
and employees shall swiftly report appropriate information to the Audit Committee in accordancewith the method stipulated in laws and the internal regulations of the Company, in the case where
there is considerable damage to the Company’s operations in areas for which they are responsibleor the possibility of significant impact on the Company. In addition, the same shall apply in the eventthat the Audit Committee requests a report about business operations.
(2) In the event of a report by a Director, Executive Officer, Audit & Supervisory Board Member or
employee, etc. of the Company or its subsidiary to the reporting desk on a compliance-related
problem, the department in charge of the reporting desk shall in principle report the content of suchreport to the Full-time Member of the Audit Committee.
(3) The department in charge of internal audits shall report to the Audit Committee important items
heard from Directors, Executive Officers, Audit & Supervisory Board Members and employees, etc.
of the Company and its subsidiaries, as well as important items from audit results. As for the mattersdetermined to be necessary for the operations of the Audit Committee, the department in charge ofsuch matters shall make a periodic report.
(4) The Company and its subsidiaries shall ensure that the people reporting to the Audit Committee(including people reporting indirectly through others) would not be treated unfavorably because ofsuch reporting by including provisions to such effect in the internal regulations, etc.
8. Matters concerning policies related to the handling of expenses or obligations incurred during theexecution of duties by the Members of the Audit Committee
Any Member of the Audit Committee may request the Company in advance to pay expenses, etc.
deemed to be necessary for the execution of its duties. Further, any Member of the Audit Committee
may request the Company after the fact to reimburse any expense paid out on an emergency or
temporary basis. The Company shall pay expenses necessary for the execution of duties of theMembers of the Audit Committee upon request by any of such Members.
9. Other systems to ensure effective auditing by the Audit Committee(1) The Audit Committee shall exchange opinions with the Executive Officers, including the Chief
Executive Officer, the Audit Committee Office, the departments in charge of internal audits and otherdepartments necessary for the execution of duties of the Audit Committee, as well as the Accounting
Auditor, etc., periodically or when deemed necessary.
(2) The Audit Committee may, if deemed necessary for the execution of its duties, give instructions
to the department in charge of internal audits. Preference shall be given to the instructions of the
Audit Committee if there is a conflict between the instructions given by the Audit Committee andthose given by Executive Officers.
(3) The Full-time Members of the Audit Committee shall be provided with the opportunity to attend
the Strategic Management Committee and other significant meetings of the Company, and theCompany shall establish systems to enable each Member of the Audit Committee to review, throughthe internal information system, the materials and minutes of any significant meetings related to the
execution of business duties.

2. Basic Approach to Eliminating Anti-Social Forces(1) Basic approach to eliminating anti-social forces
In the Company’s Corporate Philosophy, etc., it is stated that the Company will not have any
relationship with anti-social forces and will take a firm stance against any illegal or unreasonable
demand. Further, the same policy is stated in the above-mentioned outline for the development ofinternal control systems as well.
(2) Status of development of systems toward eliminating anti-social forces
The Company has determined the Executive Officers in charge of the elimination of anti-social
forces and the department in charge of handling such matters, and has also established a companywide organizational structure by designating the person and department in charge of such mattersat each business location and subsidiary. In terms of concrete measures, the Company has
established response manuals and has been working to make such measures widely known by
providing education in its internal training, etc. In addition, the Company has been working with thecompetent police station and related entities and also endeavors to collect information byexchanging information with other companies on a periodic basis.
V. Other

1. Adoption of Takeover Defense Measures
Adoption of Takeover Defense Measures
Supplementary Explanation

Not Adopted―――

2. Other Matters Concerning to Corporate Governance System
1. Fundamental policies for timely disclosure
We shall contribute to the optimization of securities trading and shall ultimately maintain our social
trust in the securities markets, by establishing internal regulations based on our Corporate
Philosophy, etc. to ensure the timely implementation of disclosure and prevent insider trading andby other means.
2. Response procedures concerning timely disclosure
The Company designated the General Manager of the Corporate Communications Dept. as the
person responsible for the management of internal information and has him/her handle mattersconcerning timely disclosure, and perform timely disclosure in accordance with the following
response procedures.
(1) Collection of information
Any important information concerning the Company and its subsidiaries shall be promptly reported
through a department in charge at the Company headquarters (each division and department of the
Corporate, and each in-house company and division) to the Corporate Communications Dept.
(2) Determination on information
Any corporate information consolidated in the Corporate Communications Dept. shall be considered
to determine whether or not any timely disclosure should be made by the Corporate
Communications Dept. through consultation with related departments as necessary. The person
responsible for the management of internal information shall make the determination on whether or
not any timely disclosure should be made while complying with the relevant provisions determinedby the stock exchanges.
(3) Implementation of disclosure
Under the instructions of the person responsible for the management of internal information,
appropriate and timely disclosure of information shall be made by the Corporate Communications
Dept.

〔Sustainability Management System〕

Business
execution

Sustainability issues(Materiality)

Audit
Committee

Promotion of resource circulation

Strengthening measures to address
global environmental issues

Sustainability Committee

Meetings & Organizations

Resource Circulation
Strategy Meeting

Management Strategy
Dept.

・ LIB recycling
・Copper-based recycling
・Medium- to long-term development
strategy・Overall resource recycling businessMonozukuri and R&D
Strategy Div.
DX Promotion Div.

Talent & Organization Development Dept.
Human Resources & Industrial Relations Dept.

Activation of Communication

Corporate Communications Dept.

CTO

Strengthening response to SCQ* issues(issues related to occupational safety and hygiene /health management / compliance /environmental management / quality management)

MetalsCompany

Global Environmental Affairs Dept.

Enhancement of human capital(including DE&I promotion)

Strengthening information security

Enhancement ofmanagement system

Remuneration
Committee

System Strategy Div. (ICT Promotion Dept.)
SCQ Promotion Office
S: Safety & HealthZero Disaster Promotion Panel,
Health and Productivity Management Panel
C: Compliance & Environment
Human Rights Panel, Personal Information Protection Law
Panel, Compliance Panel, Risk and Crisis Management Panel,
Environmental Management Panel
Q: The quality of goods & services supplied to customers
Quality Management Panel

Advanced
Products
Company

Safety,Environment &Quality Dept.
Legal &
ComplianceDiv.

Enhancement of sustainable SCM*

Procurement & Logistics Dept.

Deepening of DX

DX Promotion Div.

Pursuit of value creation

Monozukuri and R&D Strategy Div.

Geopolitical and geoeconomic* risks

Management Strategy Dept.

Financial risks

Accounting & Finance Div.

Metalworking
SolutionsCompany

Renewable
EnergyBusiness Div.

*SCQ: S: Safety & Health, C: Compliance & Environment, Q: Quality*SCM: Supply Chain Management*Geoeconomic risk: Risks relating to countries attempting to fulfill their geopolitical goals (national interests) through economic means

Group Companies

Nomination
Committee

Contribution to theenvironment and society

Board ofDirectors

〔Overview of Corporate Governance System〕
General Meeting of
Shareholders

Election

Election

Board of Directors
11 (including Seven Outside Directors)
Accounting
Auditor
Audit
Committee
OfficeCoordination

Instruction

Instructions from the
Audit Committee to theInternal Audit Div./Dept.
and cooperation

Audit
Committee
Five (including
Four Outside
Directors)

Election of
Executive Officers
and Supervision

ReportAudit

Nomination
Committee
Five (All are
OutsideDirectors)

Remuneration
Committee
Three (All are
OutsideDirectors)

Sustainability
Committee
Four (including
Three Outside
Directors)

Delegationof authority

ReportOperational Execution
ReportReportStrategic Management Committee
Chief Executive Officer

Instruction

Instruction

SCQ Promotion OfficeInstruction

Sustainability
Deliberative Council

ReportInstruction

ReportDeliberation

Consultation atExpert Committee

Each in-house Company

Corporate, etc.

Internal Audit
Div.
Audit

Each
Department,
etc.

OpinionCompany Management Meeting
President

Monitoring
Instruction
ReportReportInternal Audit
Dept.

Instruction

Audit

ReportBusiness Divisions
Directly controlled
business sites

Subsidiaries

(Mitsubishi Materials Corporation - Summary of Internal Structures for Timely Disclosure)

Corporate Communications Dept.
＜Related Departments＞
Consultation＜Person responsible for the
management of internal information＞
General Manager,
Corporate Communications Dept.

Report of corporate information<Department in charge at the Company
headquarters>
Corporate, etc.,
Each in-house Company
Report of corporate information<Subsidiaries>

TimelyDisclosure

Stock
Exchanges

Appendix<<Remuneration System for Directors and Executive Officers>>
With the aim of creating an attractive remuneration system for outstanding management
personnel that will drive improvements in the Group's corporate value from a medium- tolong-term viewpoint and establishing remuneration governance that will enable the Company
to fulfill its accountability to stakeholders, including shareholders, the Company shallestablish a policy on determining the remuneration for Directors and Executive Officers(hereinafter referred to as "Officers") and a remuneration system as follows:
1.

Policy on Determining Remuneration for Officers(1) A system shall be created that provides competitive standards for remunerationcompared with companies of a business category and size similar to the Group.
(2) The performance of the functions and duties assumed by each Officer andcontributions to the improvement of medium- to long-term corporate value shall be
evaluated in a fair and equitable manner, and the evaluation results shall be reflected
in remuneration.
(3) As for the remuneration for Executive Officers, in order to have remuneration function
as a sound incentive to improve the Group's medium- to long-term corporate value,
remuneration shall consist of basic remuneration, an annual bonus based on
performance evaluations in each fiscal year, etc. and stock-based compensation,
which is a medium- to long-term incentive linked to medium- to long-term
performance and corporate value. The remuneration composition ratio shall be
determined appropriately in accordance with one's job position. Provided, however,that for the remuneration for Directors (excluding those who concurrently hold theposts of Director and Executive Officer), in principle, only basic remuneration shallbe paid in cash, in light of their function and role of supervising the performance ofjob duties by the Executive Officers. However, Directors who chair the Nomination
Committee, the Audit Committee, the Remuneration Committee and theSustainability Committee shall be paid an allowance in addition to their basic
remuneration in consideration of their responsibilities.
(4) An annual bonus shall be determined with the emphasis on the performance in eachfiscal year, while appropriately evaluating the relative results of Total Shareholder
Return (TSR)* and the status of each Executive Officer’s implementation of mediumto long-term management strategies, etc.

*TSR

=

Average closing price of thestock on each day in March of
the current year+

Total amount of dividends per
share in the current fiscal year

Average closing price of the stock on each day in March of theprevious year
(5) A medium- to long-term incentive shall be stock-based compensation that enables
Executive Officers to share awareness of profits with shareholders in order toenhance corporate value from a medium- to long-term viewpoint.
(6) The policies for determining remuneration and the amount of individual remuneration
shall be deliberated and determined by the Remuneration Committee composed ofa majority of Independent Outside Directors.
(7) Necessary information shall be disclosed actively so that stakeholders including
shareholders can monitor the relationship between performance, etc. andremuneration.
2.

Remuneration System for Officers(1) Directors (excluding those who concurrently hold the posts of Director and Executive
Officer)
The remuneration system for Directors shall be, in principle, only basic remuneration
paid in cash. However, Directors who chair the Nomination Committee, the Audit
Committee, the Remuneration Committee and the Sustainability Committee shall be
paid an allowance in addition to their basic remuneration in consideration of their
responsibilities. The amount shall be determined, taking into consideration an
individual Director’s job position, whether he/she is a full-time/part-time Director, etc.
and referring to the standards for remuneration of other companies based on the
research of outside experts.
(2) Executive Officers
The remuneration payable to Executive Officers shall consist of basic remuneration,
which is fixed remuneration, and an annual bonus and stock-based compensation,
which are performance-linked remuneration. The remuneration composition ratio
shall be in line with “Basic remuneration/Annual bonus/Stock-based compensation =1.0/0.6/0.4” (*In the case where the annual bonus payment rate is 100%) as to theChief Executive Officer, and for other Executive Officers, the ratio of performancelinked remuneration to basic remuneration shall be set lower than that for the Chief
Executive Officer.
Further, the standards for remuneration shall be determined by referring to thestandards of peer companies (similar-sized companies determined by the
Remuneration Committee) based on the research of outside experts.

<Basic Remuneration>
Basic remuneration shall be paid in cash as fixed remuneration in accordance with
one’s job position.
<Annual Bonus (Short-term Incentive Remuneration)>
The annual bonus shall be determined based on the consolidated operating profit,
relative comparison of TSR, and status of achievement of the non-financial target set
for each Executive Officer, on a single-year basis.
The specific evaluation items shall be as follows:<<Evaluation Items>>(i) Evaluation based on consolidated operating profit, which measures the earning
capacity of the Company’s main business (or, in the case of an Executive Officer
in charge of business activities, operating earnings from the relevant businesssector);The consolidated operating profit evaluation factor is to be multiplied by anadjustment factor based on the consolidated operating profit growth ratecompared with other companies to enhance consciousness on growth greaterthan market growth (relative comparison with six domestic nonferrous metalcompanies and the companies chosen mainly among similar-sized domestic
manufacturing companies)(ii) Relative comparison of TSR (relative comparison with six domestic nonferrous
metal companies and the companies chosen mainly among similar-sized
domestic manufacturing companies)(iii) Non-financial evaluation that evaluates the status of achievement of the targets
set for each Executive Officer at the beginning of the term and other relevant
factors with regard to efforts aimed at improving medium- to long-term corporate
value, which is less likely to be represented in short-term performance, as wellas efforts in line with the Sustainability Policy*(*) Sustainability Policy Items
1. Build a Work Environment that puts Safety and Health First
2. Respect Human Rights
3. Promote Diversity, Equity and Inclusion
4. Cultivate Mutual Prosperity with Stakeholders
5. Strengthen Corporate Governance and Risk Management
6. Engage in Fair Business Transactions and Responsible Sourcing
7. Ensure Stable Provision of Safe, Secure, and High Value Added Products
8. Proactive Engagement for the Global Environment

<<Calculation Formula>>
By deeming the amount payable for achievement of the target (Base Annual Bonus)
as 100%, the amount for each individual shall be calculated by using the following
calculation formula:

Annual Bonus =*Base Annual Bonus
by Job Position

×

Payment Rate Based on
Performance Evaluation*“Payment Rate Based on Performance Evaluation” shall range from 0% toapprox. 200% based on a performance.

<<Evaluation Weight>>
The annual bonus shall be determined based on the evaluations of each portion of
60%*, 20% and 20% of the base annual bonus amount, which depends on one’s job
position, in terms of consolidated operating profit evaluation (or, in the case of an
Executive Officer in charge of business activities, operating earnings evaluation fromthe relevant business sector), relative TSR comparison and non-financial factors,
respectively.
* To be adjusted using consolidated operating profit growth rate compared with other companies.

<Target of consolidated operating profit for annual bonus>
With regard to the target of consolidated operating profit for annual bonuses, inprinciple, consolidated operating profit for the current period planned in the MediumTerm Management Strategy shall be applied (For operating earnings of the businessfor which the Executive Officer is responsible, planned consolidated operating
earnings from the relevant business sector shall be used.).
<Stock-based compensation (Medium- to Long-term Incentive Remuneration)*>
Stock-based compensation shall be a system that utilizes a trust for the purpose ofachieving the sharing of a common profit awareness with shareholders. This shall be
used as an incentive for improving the medium- to long-term corporate value of theGroup and under which the Company’s common shares and cash equivalent to theproceeds from the realization of the Company’s common shares (hereinafter referred
to as "the Company’s Stock, etc.") shall be granted in accordance with one's job
position, upon retirement from the post of Executive Officers. No performance
conditions nor stock price conditions shall be set with respect to the shares to bedelivered.
Please note that in the case of a non-resident staying in Japan, different treatment
may be applied under laws or for any other relevant circumstances.
*

The Officers’ remuneration system adopts a structure called BIP (Board
Incentive Plan) and grants to the Executive Officers the shares of theCompany’s Stock, etc. During the trust period, it is an incentive plan toaccumulate points to be given to Executive Officers, and to grant the sharesof the Company’s common stock equivalent to 70% of such accumulated
points (shares less than one unit shall be disregarded) and cash equivalent
to realized value of the shares of the Company’s common stock equivalent to
the remaining accumulated points as compensation to Executive Officers
after their retirement. One point is deemed equal to one share of theCompany’s common stock, and if a stock split or reverse stock split occurs
during the trust period, the number of the Company’s shares per point shallbe adjusted according to the stock split ratio or reverse stock split ratio of theCompany’s shares. The maximum number of points to be given to Executive
Officers during the three fiscal years including current fiscal year (fromFY2024 to FY2026) shall be 140,000 points in total.

<Claim for return of remuneration, etc. (Malus and Clawback System)>
If an Executive Officer violates laws and regulations or the duty of care of a goodmanager, the Company may, upon resolution of the Remuneration Committee,
revoke the right to receive an annual bonus or demand that the Executive Officer
return the bonus after it has been paid, and revoke the right to receive the shares of
the Company’s Stock, etc. or demand the return of an amount equivalent to theaccumulated number of points.