Established on August 20, 2015
Amended on June 21, 2024

Yamato Holdings
Corporate Governance Guidelines

Chapter 1

General Provisions

1. Objective
Yamato Holdings (“the Company”) and the Yamato Group have established Corporate
Governance Guidelines (“these Guidelines”) for the purpose of increasing the overall
corporate value and ensuring the survival and growth of the Group’s businesses byworking to enhance effective corporate governance aimed at securing soundmanagement and achieving prompt and accurate decision-making and businessexecution.
2. Basic Philosophy Concerning These Guidelines
The Company Precepts form the origin of the corporate spirit of both the Company andthe Yamato Group. Our Management Philosophy based on the Company Precepts
represents what we aim to be, and we shall strive to continually strengthen and enhancethese Guidelines from the standpoint that the pursuit of corporate governance that
contributes to the satisfaction of customers, shareholders, society and employees is the
top priority.
Company Precepts
1. We all represent the company.
2. We connect our customers’ hearts with every delivery.
3. We conduct ourselves both professionally and ethically.
Management Philosophy
Yamato helps enrich our society
by enhancing our social infrastructure,creating more convenient services
for evolving lifestyles and industries,
and developing innovative logistics and distribution systems.

1

3. Establishment, Amendment and Abolishment
These Guidelines shall be established, amended or abolished following a resolution by
the Board of Directors.

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Chapter 2

Relationships with Stakeholders

1. Ensuring Shareholders’ Rights and Equality
We shall strive to effectively ensure that all shareholders are treated equally throughdialogue and information disclosure. We shall proactively disclose information andprovide sufficient explanations about matters that may impact shareholders’ interests,
thereby creating an environment that protects the rights of shareholders and allows
shareholders to appropriately exercise rights.
(1) Protecting Rights at General Meeting of Shareholders
The General Meeting of Shareholders is the Company’s topmost decision-making bodyand comprises shareholders with voting rights, as well as being an important
opportunity to engage in constructive dialogue with shareholders. Based on therecognition stated above, the Company shall set the date, time and location of theGeneral Meeting of Shareholders so that as many shareholders as possible are able
to attend the meeting. We shall establish an environment where shareholders unable
to attend are able to exercise their voting rights by mail or via the Internet.
1) Provision of Information
To allow shareholders to sufficiently study agenda items of the General Meeting of
Shareholders and exercise their voting rights properly, we shall include information
thought to be necessary in the Notice of the General Meeting of Shareholders as wellas post such information on TDnet and the Company’s website in an appropriatemanner.
2) Clarification of Procedures for Exercising Rights
By explicitly stating the procedures for exercising shareholder rights in the“Regulations for the Handling of Shares,” we shall prevent arbitrary management by
the Company and fully make sure that shareholders are not hindered from exercising
their rights. With respect to the rights recognized for minority shareholders, we shallestablish a detailed method for exercising rights so that these rights may be
exercised appropriately. These regulations shall be available on the Company’s
website for shareholders to view at any time.
3) Creating an Environment for the Smooth Exercise of Voting Rights▪ The Company shall avoid holding the General Meeting of Shareholders on a datethat many other companies are also holding their general shareholders’ meetings,
so that as many shareholders as possible are able to exercise their voting rights
appropriately.

3▪ The Company shall select a location with good access by public transportation forthe site of the General Meeting of Shareholders, so that as many shareholders as
possible are able to attend.
▪ The Company shall aim to mail out the Notice of the General Meeting of
Shareholders three weeks before the date of the meeting. The content of the
Notice of the General Meeting of Shareholders shall be posted on the Company’s
website, the Tokyo Stock Exchange’s website and other sites prior to being sentout by mail.
▪ Based on the percentage of shares owned by institutional investors and overseas
investors, the Company shall participate in the electronic voting rights exercise
platform and post an English translation of the Notice of the General Meeting of
Shareholders at the same time as the Japanese language version is posted on the
Company’s website as well as the Tokyo Stock Exchange’s website.
▪ If institutional investors and other investors who own shares in the name of a trustbank or other similar institution make a request in advance to attend the General
Meeting of Shareholders and exercise voting rights, the Company shall discuss
the matter with the trust bank or other institution and respond with appropriate
procedures.
4) Analysis of Opposition Votes at General Meeting of Shareholders
With respect to Company-proposed agenda items which receive a significant numberof opposition votes at the General Meeting of Shareholders, the Company shallanalyze shareholders’ intentions and the background behind their voting behavior,and shall use the analysis for dialogue with shareholders. The analyses shall beshared at the Board of Directors Meeting, where discussions of the analyses are held.
(2) Capital Policy
1) Policy
The Company is a pure holding company, and engages in business with the objectiveof raising the corporate value of the entire Group. With respect to shareholder returns,
the Company shall distribute profits to shareholders while maintaining a soundfinancial position. With respect to dividends, the Company shall target a payout ratioof 40%, based on the profit attributable to owners of parent. In addition, in order toincrease shareholder value, the Company shall purchase treasury shares andotherwise maintain a flexible capital policy.

42) Capital Increases, etc.
If a capital increase is necessary, the Company shall strive to adequately explain thesituation to shareholders.
(3) Policy on Cross-Shareholdings
1) Policy
The Company shall maintain a policy of owning stocks that are deemed meaningful,based on a comprehensive consideration, from a medium to long term perspective,of the relationship with the Group’s businesses, the profitability of the company, andthe possibility of creating business opportunities, among other factors. A decision
shall be made every year at the Board of Directors Meeting concerning whether tocontinue holding the stocks, based on quantitative and qualitative consideration
regarding primarily the benefits and risks associated with holding the stocks, in lightof various factors including the business track record with the company, and themarket price of the shares.
2) Exercising the Voting Rights of Shares Held
In exercising the voting rights of shares held, decisions on supporting or opposing
shareholders’ meeting agenda items shall be made on a case-by-case basis, withconsideration given to the issuing company raising its corporate value, the issuing
company’s compliance framework, and the possibility that the issue will have anegative impact on the Group’s business, among other factors.
(4) Anti-Takeover Measures
1) Policy on Anti-Takeover Measures
The Company shall strive to achieve continuous growth and increase corporate value,
and it shall not employ a scheme which would act as a defense against a takeover.
2) If the Company is the Object of a Tender Offer
Due to the fact that there is a possibility of a significant change in the Company’s
shareholder structure and that this could impact the interests of existing shareholders,the Board of Directors shall quickly announce its intentions. Also, the Company shallnot establish measures to unjustly obstruct the right of shareholders to release theirshares in response to the tender offer.

5(5) Business Transactions among Related Parties
In accordance with the Board of Directors Regulations and other regulations, the Boardof Directors shall make decisions with respect to matters such as officers with interests
in competing businesses and conflict-of-interest transactions. Also, if the Company ora Group company engages in business transactions with key shareholders or otherrelated parties, then in accordance with internal regulations, the persons giving
approval shall make sure that the interests of shareholders and the Company are notharmed, taking into consideration the importance and nature of the business
transaction in question.
2. Dialogue with Shareholders
In order to increase corporate value continuously and over the medium to long term
through constructive dialogue with shareholders and investors, the Company shall work
to enhance IR activities by developing systems centered on the officer responsible forInvestor Relations Strategy, and promote dialogue by the President and other membersof senior management, among other measures. The person responsible for Investor
Relations strategy shall act as the point of contact for individual interviews withshareholders, and the President, Directors, including Outside Directors, and othermembers of senior management shall respond appropriately within a reasonable scope
based on shareholders’ wishes, the purpose of the interviews, etc.
(1) IR Framework
The Company shall appoint an officer responsible for Investor Relations and promote
investor relations activities centered on activities such as dialogue by the President andother members of senior management. The Investor Relations department shall assist
the dialogue by the President and the officer responsible for Investor Relations andpromote daily coordination with other internal departments related to IR activities,
including the Management Strategy department, the Finance and Accounting
department, the Legal Affairs Strategy department, the ESG Strategy department andthe Corporate Communications Strategy department, thereby holding dialogue withshareholders and investors.

6(2) Ascertaining Shareholder Composition
In addition to ascertaining the Company’s shareholder composition through theshareholder registry at the end of March and the end of September each year, theCompany shall use a specialized organization which conducts investigations toregularly ascertain the situation regarding which overseas and domestic investors
actually own the Company’s shares. The Company shall utilize the information revealed
through the investigations in IR activities for holding constructive dialogue withshareholders and investors.
(3) Opportunities for Dialogue
The Company shall be aware that securing sufficient opportunities for dialogue withshareholders in order to have shareholders understand the Company’s management
strategy and businesses is important, and therefore the Company’s senior
management members shall play the lead role in IR activities. IR activities shall be
carried out in a planned manner, with the basic activities each year being as follows.
1) Financial results briefings by senior management: Four times a year
2) Small meetings with the President: Twice a year
3) Facility tours, etc.: At least twice a year4) Visits by the President to investors in the U.S., Europe and Asia: At least once a
year to each region5) Other reasonable activities as requested by shareholders
After engaging in such dialogue, the opinions of shareholders and investors shall be
provided as feedback at the Board of Directors Meeting as necessary, thereby allowing
the Company to have a shared understanding of the issues from an objective
standpoint.
Furthermore, the Investor Relations department shall proactively accept requests forindividual meetings, including those via the phone, from shareholders and otherinvestors on a daily basis, and assist the relevant officers to enable smooth dialogue.

7(4) Disclosure of Information Targeting Constructive Dialogue
We shall fulfill our accountability to shareholders and investors through appropriate andtimely explanations and disclosure of information about management including
progress being made towards achieving management policies and plans, quantitative
financial information, as well as non-financial information such as information about our
initiatives for corporate governance, environment and society. We recognize thatclimate change is a significant issue for increasing the Group’s medium to long-term
corporate value and to realize a sustainable society, and we understand and evaluate
risks, opportunities and their impacts related to climate change. Furthermore, we shallwork to enhance information disclosure based on TCFD (Task Force on Climate-related
Financial Disclosures) recommendations.
1) Formulation of Management Strategies and Management Plans
The Company shall have a policy that the Board of Directors and senior management
members shall recognize the medium-term management plan as one of thecommitments to shareholders and make their best effort to achieve the plan.
The important indicators the Company tries to achieve as targets shall be ROE and
ROIC, as management indicators in order to raise the level of shareholder
satisfaction.
The Company shall disclose and explain the specific measures aimed at achieving
the plan at financial results briefings and other events.
2) Information Dissemination
Besides timely disclosure to the Tokyo Stock Exchange, the Company shall post
necessary information on the Company’s website proactively and in a timely manner.
Such information shall include the monthly performance of key services, quarterly
financial results, historical financial data, the status of corporate governance andsustainable management along with other information. Also, in order to disseminate
information to overseas investors, the Company shall post key information in English
as well as in Japanese.

8(5) Management of Insider Information
The Company shall establish “Regulations to Prevent Insider Trading” and manage
insider information in accordance with these regulations. The Company also shallthoroughly educate employees and keep them aware of the management of insider
information by having employees sign a confidentiality oath when they join the
Company, as well as through periodic internal training utilizing e-learning andclassroom learning, thereby preventing leaks caused by human factors.
In handling important facts that are to be disclosed to the public, the Company shalluse a roster to manage which individuals have knowledge of the information, and shallhandle the information carefully until such disclosure. In addition, when resolutions are
passed at the Board of Directors Meeting, the Company shall disclose such facts
appropriately to the Tokyo Stock Exchange.
3. Collaboration with Stakeholders Other than Shareholders
Based on the Management Philosophy, the Company and the Yamato Group shall respecta variety of stakeholders, including employees, customers and local communities, andshall strive to build positive and smooth relationships and to work together appropriately
with the aim of increasing corporate value over the medium to long term.
(1) Sustainable Management
Based on the Management Philosophy and Environmental Policy, the Company shallprotect the global environment with various stakeholders as sustainable social
infrastructure, and work to realize a prosperous society.
1) Environmental and social issues are recognized as management issues that arelinked to decreasing the Company’s risk and creating opportunities. The Company
has set “Connect. Deliver the Future via Green Logistics” and “Through Co-Creation
and Fair Business Activities, Help Create a Society That Leaves No One Behind,”which are set forth in the transformation plan “YAMATO NEXT100,” as its vision,and shall carry out measures with specific targets set for each significant
management issue (materiality), such as climate change and human rights, toachieve long-term targets, including carbon neutrality in fiscal 2050. *Scope 1 & 2(in-house emissions)2) The President and other members of senior management are responsible for
implementing sustainable management, which is supervised by the Board of
Directors. Through these efforts, the Company shall work to appropriately addressenvironmental and social issues and increase corporate value.

9(2) Promoting Diversity
In order to respect employees’ diversity and enable each and every employee to display
their abilities to the fullest extent, the Company promotes diversity throughout theGroup based on the approach of “Inclusive Management,” which is the DNA of the
Yamato Group, by creating a working environment where diverse human resources canplay an active role and training diverse human resources.
Aiming to create an organization in which a diverse range of people are able toshowcase their talent regardless of gender, nationality, age, or other factors, theCompany shall create a department in charge of diversity promotion which takes thecentral role in promoting diversity-related initiatives.
(3) Whistle-blower System
In regard to compliance violations by the Company, employees, Directors, etc., theCompany shall ensure an appropriate framework related to whistle-blowing by
establishing a contact point for the President, a contact point managed by theCompliance and Risk Committee, and a contact point managed by an outside attorney.
The Company shall secure a framework in which employees who report on such
violations are protected under the whistle-Blower regulations. The reception status ofwhistle-blowing and the details of responses are periodically reported to theCompliance and Risk Committee and the Board of Directors.
(4) Role as the Asset Owner for the Corporate Pension PlanThe Yamato Group Employees Welfare Center manages the reserves for theCompany’s corporate pension plan.
The Company facilitates the professional development of said Center’s staff mainly byallocating personnel with expertise at the Center’s secretariat, and by sending staff
members to external seminars.
The Center’s management policies are decided by the board of Yamato Group
Employees Welfare Center, taking into consideration the deliberations of the Pension
Assets Management Committee. Personnel with the appropriate qualities are assigned
to the Pension Assets Management Committee and the board of Yamato Group
Employees Welfare Center, and a labor union official is assigned as a representative
for the beneficiaries.

10Chapter 3

Information Disclosure

1. Basic Stance on Information Disclosure
In order to build long-term relationships of trust with various stakeholders, the Company
shall have a policy of disseminating information that we believe to be necessary forstakeholders, as well as legally required disclosures, in a speedy, accurate, fair and justmanner. With respect to information that serves as a base for constructive dialogue withshareholders, we shall disclose information, including non-financial information,
appropriately and in a timely manner through a variety of tools, such as the Company’s
website and integrated reports.
2. Proactive Information Disclosure
The Company shall proactively disclose information in order to ensure the transparency
and fairness of the decision-making process, as well as to realize effective corporate
governance.
3. Increasing the Usefulness of Information Disclosure
The Company shall strive to make information to be disclosed useful for users when it
comes to engaging in dialogue with the Company.
(1) Detailed Information Disclosure
The Company shall strive to provide information in as much detail as possible, and touse expressions that make it easy for users to understand the information.
(2) Information Disclosure in English
The Company shall have an English language website, prepare English language
versions of various IR materials, including the Notice of the General Meeting of
Shareholders and financial results explanatory materials, and disclose suchinformation appropriately and in a timely manner.

11Chapter 4

Corporate Governance Framework

1. Organizational Design
The Company is a company with an Audit & Supervisory Board. In addition to the Board of
Directors supervising important management decision-making and business execution,
Audit & Supervisory Board Members and the Audit & Supervisory Board which are
independent from the Board of Directors shall audit the status of execution of duties byDirectors. In addition, to complement the oversight function of the Board of Directors, theCompany shall establish a Nomination and Compensation Committee, the majority ofwhose members are independent Outside Directors. Furthermore, the Company adopts
the executive officer system in order to separate the supervision and execution ofmanagement, and to ensure swift decision-making related to business execution.
2. Directors, Board of Directors
Aware of the fiduciary responsibility for management entrusted to them by shareholders,
as well as recognizing that they are responsible to various other stakeholders besides
shareholders, Directors shall aim to continuously increase corporate value.
(1) Board of Directors Composition
The Board of Directors comprises a diverse group of officers with different areas ofknowledge regarding the Yamato Group’s businesses, as well as differing backgrounds
including areas of professional expertise, experience, gender, and global awareness.
The number of Directors cannot exceed 12 as stipulated in the Articles of Incorporation.
In addition, at least half of the Directors shall be, in principle, independent Outside
Directors who supervise from an independent and objective position.
(2) Role and Duties of Board of Directors
The Board of Directors shall deliberate on and decide the basic policies aimed atincreasing the Company’s corporate value over the medium to long term, and supervise
the execution of business.
1) The Board of Directors shall make important decisions concerning the Company’sbusiness and supervise the execution of duties by Executive Directors and executive
officers.

122) The Board of Directors shall recognize the medium-term management plan as oneof the commitments to shareholders, and shall supervise the effectiveness ofstrategies, such as the business portfolio and the optimal allocation of management
resources, to achieve the goals of the plan. In addition, the Board of Directors shallsufficiently analyze the initiatives aimed at realizing the goals of the medium-term
management plan as well as the extent to which the plan’s objectives are being
achieved. In addition to providing explanations to shareholders, such analyses shallbe reflected in future management plans.
3) The Board of Directors shall encourage executive officers to demonstrate a healthy
entrepreneurial spirit and not excessively avoid or curb risk, while at the same time
establishing a framework that enables it to ensure accountability.
4) The scope of responsibility of each executive officer shall be decided by the Boardof Directors and disclosed. Executive officers shall execute business in accordancewith internal regulations.
(3) Board of Directors Management
The Board of Directors Meetings shall be managed taking into account the following, inorder to ensure that the meetings involve constructive debates and exchange of
opinions, including the independent Outside Directors.
1) To allow Board of Directors Meeting attendees the opportunity to prepare formeetings in advance, the Board of Directors secretariat shall send agenda items andrelated materials to Directors well in advance of the meeting date, and provide
explanations in advance as needed.
2) The annual schedule of Board of Directors Meetings as well as anticipated agenda
items shall be decided in advance, and Directors as well as Audit & Supervisory
Board Members shall be notified.
3) The number of issues to be deliberated as well as the frequency of meetings shallbe appropriately set, and the time of meetings shall be decided so as to allow
sufficient time for deliberations.
4) As needed, meetings for the purpose of exchanging ideas shall be held comprising
Board of Directors Meeting attendees, thereby encouraging lively debate.

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(4) Evaluation of Board of Directors
In order to verify the effectiveness of the Board of Directors, the Company shall confirm
the opinions of all Directors and all Audit & Supervisory Board Members relating to thecomposition and management conditions of the Board of Directors, and, based on the
result of said confirmation, the Company shall deliberate regarding the effectiveness of
the Board of Directors’ management conditions, deliberation conditions, etc.
(5) Election and Removal of Directors and Audit & Supervisory Board Members
1) Items for electing and removing Directors and Audit & Supervisory Board Members
are deliberated on by the Nomination and Compensation Committee, and thendecided on by the Board of Directors. Furthermore, items for electing Audit &Supervisory Board Members require the approval of the Audit & Supervisory Board.
2) In appointing Directors and Audit & Supervisory Board Members, information suchas the candidate’s personal history and the reason for appointment is included in the
Notice of the General Meeting of Shareholders and thereby disclosed to the public.
3) Skills, etc. that the Board of Directors should have are identified based on the
management environment, business characteristics, etc., and the list of each
Director’s and Audit & Supervisory Board Member’s expertise and experience isincluded in the Notice of the General Meeting of Shareholders and other documents
and thereby disclosed to the public.
(6) Director Compensation
The compensation of Directors and executive officers comprises a basic compensation(fixed compensation) taking outside levels of compensation, etc. into consideration,compensation linked to short-term operating performance (variable compensation), as
well as performance-linked and share-based remuneration (variable compensation). A
certain part of the compensation is used to acquire shares of the Company through the
Officers and Executives’ Shareholding Association. The compensation of Outside
Directors comprises a basic compensation (fixed compensation) only.
(7) Internal Control
1) The Board of Directors shall appropriately construct and manage a system fordisclosing information in a timely and accurate manner as well as internal control anda risk management framework.

142) In accordance with the Companies Act, the Company shall establish a basic policy
for building an internal control system, and shall also reinforce internal controls at allof the Yamato Group companies.
3) To respond to the internal control report system pursuant to the Financial Instruments
and Exchange Act, the Company shall review business rules and standardize
operations, perform checks of whether or not business is being effectively conductedin accordance with the rules, and establish a framework to make immediate
improvements if there are any deviations.
3. Audit & Supervisory Board Members, Audit & Supervisory Board
Audit & Supervisory Board Members shall recognize their fiduciary responsibility forauditing the execution of duties by Directors which is entrusted to them by shareholders,and be also aware that they are responsible to various other stakeholders besides
shareholders. As an independent body, they shall audit the execution of duties by Directors.
(1) Audit & Supervisory Board Composition
At least half of the Audit & Supervisory Board Members shall be Outside Audit &Supervisory Board Members. At least one member of the Audit & Supervisory Board
shall be a full-time member.
In accordance with the Company’s Articles of Incorporation, the number of Audit &Supervisory Board Members shall be five or less, and individuals with appropriate
experience and ability as well as the necessary knowledge of finance, accounting, andlegal affairs, shall be elected. In particular, at least one member of the Audit &Supervisory Board shall have adequate knowledge of finance and accounting.
(2) Role and Duties of Audit & Supervisory Board
In fulfilling their role and duties, including auditing the execution of duties by Directors,
appointing and removing the Accounting Auditor and exercising authority with respect
to audit compensation, the Audit & Supervisory Board and its members shall makeappropriate decisions from an independent, objective position, based on their fiduciary
responsibility to shareholders.
1) In order to adequately fulfill its role and duties, including the function of auditing theCompany’s business and accounting, the Audit & Supervisory Board and its
members shall exercise their authority actively and proactively, and appropriately
state their opinions at Board of Directors Meetings as well as to members of senior
management.

152) The full-time Audit & Supervisory Board Members shall attend Board of Directors
Meetings and other important meetings related to the execution of business, express
reasonable opinions, hold effective Audit & Supervisory Board meetings, and ensurethat information is shared and that members work together in a coordinated manner.
3) The Audit & Supervisory Board shall regularly hold information exchange meetings
for the purpose of sharing information with Outside Directors, thereby ensuring morerobust gathering of information and encouraging teamwork.
4. Nomination and Compensation Committee
The Nomination and Compensation Committee shall be an advisory committee of theBoard of Directors, and deliberate on particularly important proposals such as nominationand compensation and submit to the Board of Directors, thereby raising managementtransparency.
(1) Nomination and Compensation Committee Composition
The Nomination and Compensation Committee shall comprise a majority of
independent Outside Directors and internal Directors.
(2) Role and Duties of Nomination and Compensation Committee
1) The Nomination and Compensation Committee shall deliberate on proposals related
to the appointment or removal of Directors, Audit & Supervisory Board Members andexecutive officers based on business performance and multi-faceted observations
and evaluation, verify the validity of such decisions, and then submit the results to
the Board of Directors.
2) The Nomination and Compensation Committee shall deliberate on policies related
to the compensation, etc. of Directors and executive officers and the details ofcompensation for each individual Director and executive officer, verify the validity ofsuch decisions, and then submit the results to the Board of Directors.
3) Election of the successor to a Representative Director shall be proposed to the Boardof Directors, after deliberation by the Nomination and Compensation Committee
based on multi-faceted observations and evaluation in regard to the track record,
human nature, etc. of multiple candidates, including those with a referral from theincumbent Representative Director.

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5. Outside Directors, Outside Audit & Supervisory Board Members
In order to obtain advice on overall management from an independent position, theCompany shall appoint Outside Audit & Supervisory Board Members as well as Outside
Directors who are highly independent and have no vested interests with the Company.
Through fair and transparent management, the Company shall put in place a highlyeffective management oversight framework.
(1) Role and Duties of Outside Directors
By ensuring, in principle, that at least half of Directors are independent Outside Directors,
the Company shall strive to increase corporate value over the medium to long term as theOutside Directors fulfill the following role and duties.
1) Outside Directors shall utilize their abundance of experience and breadth ofknowledge to offer necessary comments and advice about all aspects of management,
and work together with the accounting audit and internal audit divisions to provide
advice in order to increase corporate value.
2) Secure the management oversight function by reflecting opinions in the process ofmaking important decisions at the Board of Directors Meeting, as well as deliberating
on and verifying the validity of matters related to appointments of director candidates
and compensation received by Directors at Nomination and Compensation
Committee meetings.
3) Supervise conflicts of interest between the Company and management, controllingshareholders, etc., from an independent standpoint, and appropriately introduce
stakeholders’ opinions into Board of Directors Meetings.
4) Proactively exchange opinions with the core people responsible for businessactivities and other members of senior management and share an understanding of
the Company’s position so as to be able to proactively offer advice about all aspectsof management from an independent perspective.
(2) Role and Duties of Outside Audit & Supervisory Board Members
Outside Audit & Supervisory Board members shall utilize their individual professional
knowledge and abundant experience to make necessary comments from an
independent standpoint at Board of Director Meetings, thereby ensuring the soundnessof the Company.
(3) Criteria for Determining Independence
A party with respect to whom any of the following apply shall be deemed as not having
met the requirements for independence of an Outside Director or Outside Audit &Supervisory Board Member of the Company.

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1)

A party whose major business partner(Note 1) is the Company or a Group company(hereinafter collectively referred to as the “Company”), or otherwise if such party
is a corporation or other such entity, a person who executes business thereof;

2)

A major business partner(Note 2) of the Company, or otherwise if such party is a
corporation or other such entity, a person who executes business thereof;

3)

A consultant, accounting professional or legal professional who receives
substantial monetary consideration and/or other economic benefits(Note 3) from theCompany besides officer remuneration;

4)

A consultant, accounting professional, legal professional or other suchprofessional who is a member of a corporation or other such entity in theprofessional service industry whose major business partner(Note 4) is the Company;

5)

A major shareholder(Note 5) of the Company, or otherwise if such major shareholder
is a corporation or other such entity, a person who executes business thereof;

6)

A recipient of donations(Note 6) from the Company or a person who executes
business thereof;

7)

A person who falls under any of the aforementioned items in the past 3 years;

8)

A person who has served in the past 3 years as a certified public accountant or amember of an audit corporation that acts as the Company’s accounting auditor;

9)

A person who has served in the past 10 years as a Director (excluding Outside
Director), Audit & Supervisory Board Member (excluding Outside Audit &Supervisory Board Member), Executive Officer, or employee of either theCompany;10) A close relative(Note 8) of a person who falls under any of the aforementioned items(limited to significant persons(Note 7)).
Note 1: This refers to a business partner whose transaction amount in the most recent
fiscal year exceeds 2% of the annual consolidated operating revenue of suchgroup.
Note 2: This refers to a business partner whose transaction amount in the most recent
fiscal year exceeds 2% of the Company’s annual consolidated operating
revenue, or a financial institution whose financing to the Company in the mostrecent fiscal year exceeds 2% of the Company’s consolidated total assets.
Note 3: This refers to monetary consideration and/or other economic benefits thatexceed ¥10 million per annum in the most recent fiscal year.
Note 4: This refers to a corporation or other such entity that has received paymentsfrom the Company that make up 2% or more of the consolidated operating
revenue of the said corporation or other such entity on average in the past18

three fiscal years.
Note 5: This refers to a person or corporation who directly or indirectly holds voting
rights that constitute 10% or more of all voting rights of the Company.
Note 6: In the event that the donation exceeds ¥10 million in one fiscal year or if theparty receiving the donation is a corporation, this refers to donations thatexceed 2% of the annual operating revenue of the said party in the most recent
fiscal year.
Note 7: “Significant person” refers to Directors (excluding Outside Directors), executive
officers (Shikkoyaku), executive officers (Shikkoyakuin), and other persons
who execute business in positions of general manager or above; certified
public accountants belonging to audit corporations or accounting offices;
attorneys at law belonging to legal professional corporations or law firms; andother persons objectively and reasonably deemed to be in positions of similar
importance.
Note 8: A spouse or a relative within the second-degree of kinship.
(4) Disclosure of Concurrent Positions
The status of Outside Directors or Outside Audit & Supervisory Board Members having
concurrent positions with other organizations shall be disclosed annually in the Noticeof the General Meeting of Shareholders, the Japanese securities report and othermaterials.
6. Accounting Auditor
The Audit & Supervisory Board shall team with the Finance and Accounting department
and hold discussions in advance about the annual audit plan for the Accounting Auditor,
and the Accounting Auditor shall perform appropriate audits based on this audit plan.

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(1) Evaluation and Confirmation by Audit & Supervisory Board
In accordance with the “Policy on Dismissal or Non-Reappointment of Accounting
Auditor,” the Audit & Supervisory Board shall decide whether or not to re-appoint the
Accounting Auditor based on an evaluation. In addition, the Audit & Supervisory Board
shall check the independence and expertise of the Accounting Auditor.
(2) Ensuring Appropriate Audits
To ensure that audits are properly performed, the Accounting Auditor shall holdsufficient discussions in advance with the finance and accounting division regarding theaudit plan schedule, the estimated auditing time, and other matters, while the Audit &Supervisory Board shall approve the validity of the audit plan. The Accounting Auditor
shall meet and talk with Directors, the officer responsible for finance and accounting,as well as senior management members including each executive officer on a planned
basis, as well as when necessary.
(3) Coordination with Audit & Supervisory Board Members and Internal Auditors
The Accounting Auditor and the Audit & Supervisory Board Members shall work
together through preparing the accounting audit report, the report on quarterly review
results, and on other initiatives. In addition, three-way meetings between the Audit &Supervisory Board Members, the Accounting Auditor and internal auditors shall be held
regularly, thereby allowing all parties involved to share information and build stronger
coordination.
(4) Handling Misbehavior, Improprieties and Problems
1) If the Accounting Auditor discovers any misbehavior and makes a request for
appropriate handling of the matter, or if the Accounting Auditor points out any
improprieties or problems, based on instructions from the Representative Director,
members of senior management including each business executive officer shall takethe central role in performing a speedy investigation and taking corrective measures.
2) The Audit & Supervisory Board shall receive a report on the investigation and theresults of corrective measures, etc. Full-time Audit & Supervisory Board Members
shall take the lead role in working with the internal audit division and other related
divisions to check the appropriateness of the investigation, as well as make a request
to the Representative Director for corrective measures if necessary.

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7. Support Framework, Training Policy
The Company shall have a support framework to continually provide Directors and Audit &Supervisory Board Members with necessary information to help them fulfill their roles andduties effectively.
(1) Support Framework
1) The Company shall establish a support framework that enables it to provide
necessary and adequate information at the necessary time to allow Directors toeffectively fulfill their role and duties.
2) By participating in key business strategy meetings for the overall Group, as well as
by observing key Group business sites, including those overseas, participants areable to better understand the business strategies and how these strategies are being
advanced, as well as given opportunities to proactively get involved in businessactivities.
3) As a system to help Audit & Supervisory Board Members smoothly perform theirduties, employees in the internal audit division shall be appointed to assist Audit &Supervisory Board Members.
4) Audit & Supervisory Board Members shall exercise their authority to perform
investigations in accordance with the Companies Act. In addition, if a Director or
employee discovers a fact that could potentially inflict marked damage on the
Company, he/she shall immediately report this fact to an Audit & Supervisory Board
Member, even if there is no request to do so from an Audit & Supervisory Board
Member.
5) If a Director or Audit & Supervisory Board Member believes it to be necessary, he/sheshall obtain advice from an outside expert at the Company’s expense.
6) The internal audit division shall regularly hold meetings with the full-time Audit &Supervisory Board Members, and provide audit reports in a planned manner to theBoard of Directors and the Audit & Supervisory Board, thereby enhancing theprovision of information to as well as bolstering coordination with Outside Directors
and Outside Audit & Supervisory Board Members.
(2) Training Policy
So that the Directors and Audit & Supervisory Board Members are able to fulfill theirvarious roles and duties, the Company shall ensure opportunities in a regular andplanned manner for them to obtain and improve the necessary knowledge regarding
laws and regulations, finance, the management environment that surrounds the Group,
new technology, etc.

21Furthermore, the Company shall ensure opportunities to deepen understanding of theGroup’s management strategy, business activities and conditions, etc., throughstrategy meetings held with all of the people responsible for business activities inattendance, lively debates at meetings with outside experts, business location
inspections, etc.
END

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