CORPORATE GOVERNANCE
Last update: July 8, 2022

Earth Corporation
Katsunori Kawabata; President & Representative Director,
and Chairman of the Board of Directors at Group Companies
Inquiries: 03-5207-7458
Stock code: 4985
https://corp.earth.jp

The status of corporate governance at Earth Corporation is as follows.

ⅠBasic approach to corporate governance, capital structure, company attributes, and other basic information
1. Basic approachWith the basic philosophy that “We act to live in harmony with the Earth,” and with the “customer perspective” as a starting point, Earth Corporation(“the Company”) undertakes an unwavering pursuit of solutions to customers’ inconveniences and discontent, and strives to create and energize
markets by providing products and services that offer value for customers.
The Company positions the strengthening and enhancement of corporate governance as an important issue for management, and strives to earn
the trust of stakeholders as a company that offers value, makes management decisions quickly, monitors and directs the execution of operations,ensures thorough compliance, and discloses information appropriately, at the appropriate times.
Earth Corporation has created Corporate Governance Guidelines (the “Guidelines”) stipulating basic approaches and basic policies related tocorporate governance. These Guidelines can be viewed on the Company’s website.
Corporate Governance Guidelines
https://corp.earth.jp/jp/company/governance/pdf/guideline.pdf

Reasons for not implementing principles laid out in the Corporate Governance Code Updated
Supplemental principle 3-1-3Earth Corporation considers sustainability to be an important theme in the Medium-term Management Plan, and discloses various related activities
in the CSR report issued by the Company. The Company’s sustainability policy is that “Based on the management philosophy that Earth Corporation
will ‘Act to live in harmony with the Earth,’ we will collaborate with stakeholders to take on issues related to sustainability, and contribute tocontinuously increasing corporate value in building a sustainable society.” Based on this policy, the Company has identified material issues, andhas set non-financial KPIs. Moving forward, we will continue to monitor non-financial KPIs, and we are currently moving forward with disclosure
based on the Task Force on Climate-Related Financial Disclosures (TCFD) framework, with a plan to achieve disclosure during 2022.
(Earth Corporation’s material issues (on the Earth Corporation website))https://corp.earth.jp/jp/csr/outline/vision/pdf/sustainability-materiality.pdf
Supplemental principle 4-1-3
Earth Corporation selected a successor to the President & Representative Director following sufficient studies based on the management
environment at the time. At present, a concrete successor plan has not yet been established, but the Nomination and Compensation Committee
will consider it in the future, and the training of successor candidates is ongoing through individual in-house training including decisions on importantmanagement issues.
Supplemental principle 4-2-1
Regarding compensation for Earth Corporation’s directors: Approaches to compensation structures, frameworks, and decision-making aredisclosed in the “Decision policy on items related to compensation for individual directors.” Regarding procedures for compensation decisions,compensation is determined after consultation with the Nomination and Compensation Committee, in which independent outside directors
comprise the majority, and we are confident that judgments are made objectively. Moving forward, we will consider re-examining the design of thecompensation system as deemed necessary.

Disclosure based on principles laid out in the Corporate Governance Code Updated
Principle 1-4
Disclosure is in accordance with the Guidelines, Chapter 2: Ensuring shareholders’ rights and equality, (4) Policy regarding crossshareholdings.
Principle 1-7
Disclosure is in accordance with the Guidelines, Chapter 2: Ensuring shareholders’ rights and equality, (5) Transactions with related parties.
Supplemental principle 2-4-1
Earth Corporation has created the “Earth HR Philosophy” and the “Earth HR Management Policy” to clearly document HR initiatives aimed atrealizing the corporate philosophy and management goals. To ensure that diverse manpower can demonstrate their full capabilities, we promote
activities aimed at reflecting this philosophy and policy in various HR initiatives, and at increasing employee motivation.
(Earth HR Philosophy)
Growing together with employees=Challenge to Grow=
W E VALUE ALL OF OUR COLLEAGUES, AND TAKE ON CHALLENGES TOGETHER(Earth HR Management Policy)
1. Recruit people suited to Earth Policy
2. Foster independent people who can carry through on Earth Policy
3. Provide people who are willing to take on challenges with meaningful work and opportunities
4. Richly reward people who achieve results
5. Create workplaces where people can work with peace of mind
6. Achieve diverse workstyles
Following is an outline of the status of various initiatives in line with the HR Management Policy.
■ Recruit diverse individuals, and provide education and training (Policies 1, 2, and 6)
Recruiting activities in recent years include online company explanation meetings and interviews. The Company also collaborates in overseasinternships as part of projects involving collaborations between industry and academia, to support the training of people who will be active in the
global arena. Education/training includes three months of new employee training for new graduates who are only just entering the workforce; levelspecific training for division managers, section managers, leaders, and young employees, and periodic training sessions that take advantage of both
real and online venues for training targeting specific purposes, such as English conversation, skill building for sales staff, and learning to prevent
workplace harassment.
- Promoting participation by female employees
Approximately 40% of Earth Corporation’s employees are women, and we are working to put in place an environment where women can continue
working with a high level of motivation even amid changes in life stages. In terms of numerical targets for the ratio of female managers, we have set
action plan targets at 10% or more by 2023, 18% or more by 2026, and 30% or more by 2030, based on the Women's Advancement Promotion
Law.
- Mid-career hires
Employees joining the Company mid-career already account for more than 35% of all management positions. We will maintain this approximatelevel for the time being, while at the same time appointing outstanding employees who have achieved notable results to important posts
regardless of whether they were hired as new graduates or during mid-career, and encouraging these employees to take on challenges.
- Recruiting non-Japanese employees
There are currently only about 10 non-Japanese employees working with the Company, none of whom have held management positions. In theMedium-term Management Plan, however, we have set expanding the profit base in Asia as one important strategy, so moving forward, in order topromote the acceptance of diverse manpower and increase the number of non-Japanese employees, we have set aside slots for recruitment of
non-Japanese employees (both new graduates and mid-career hires), and we have set targets for recruiting non-Japanese employees at the
managerial level as well.
■ Personnel transfers and salary/evaluation systems (Policies 3 and 4)
In addition to regular personnel transfers, starting from 2019, we have put out in-house calls for positions in keeping with manpower demand, topromote HR management that places the appropriate parties in the most appropriate positions. In the evaluation system, we are increasing thetransparency of the HR system by clarifying the roles required at each level, and by clearly defining the various systems that govern levels andgoals, compensation, and evaluations, and ensuring a clear understanding among employees. In addition, we are striving to increase motivation
for all employees by improving incentives to work at Earth Corporation, through initiatives that include: Employee satisfaction surveys, employee
awards, awards for long years of service, improving the visibility of contributions by expanding the scope of awards presented upon retirement,
and the introduction of a framework designed to create an organizational culture of praise and encouraging active communications acrossdivisions by having employees give points to one another while sending messages of gratitude and recognition.
■ Workstyle reforms (Policy 5)
To achieve flexible workstyles, we continue to practice new workstyles that enable employees to work independently, for example through working
from home, flextime systems, “no overtime” days, and encouraging employees to take appropriate vacations. We are also incorporating IT
infrastructures into back-office operations, for example through the digitalization of various application documents and processing for expense
calculations and invoicing (paperless operations), as well as approvals using electronic seals. We are building environments that accommodate
flexible workstyles through which employees can work regardless of location, and we are striving to improve work efficiency and increase productivity
in Company operations.
Based on our awareness of employee health as an important management theme, we created the “Earth Health Declaration,” and in 2020, wewere certified as a Health & Productivity Management Outstanding Organization 2021 (“White 500” company). We continue our efforts in thisarea, for example by hiring Occupational Health Physicians, enhancing the health management organizational structure, promoting employee
health management, and making corrections to prevent long working hours.
■ Promoting diversity (Policy 6)- Promoting work-life balance
To ensure that employees are able to allocate time as required to both work and personal responsibilities, including child rearing and caring for
elderly family members, we have put in place flextime systems and short working hours systems that can be adjusted in increments of 10 minutes,
as well as a Work From Home system that only requires employees to come to the office once each month, and we continue our efforts to enhancethese systems. As a result of these various activities, such as increasing the number of male employees taking childcare leave, in 2021, we received
the Ministry of Health, Labour and Welfare "Kurumin" certification for the third time. To prevent employees from leaving the Company due to long-term care responsibilities, we have further expanded systems for supporting these employees; for example, in 2019, we expanded the leave period
to 366 days and shifted the burden of social insurance premiums during leave from the employee to the Company, and in 2020, Earth Corporation
joined a group insurance program that enables employees to receive income compensation while on leave.
- Employment of persons with disabilities
At the Sakoshi Plant and the Ako Plant, both located in Ako City, Hyogo Prefecture, we outsource some manufacturing operations to a local
facility for persons with disabilities, to support these individuals’ desire to work. We have also leased farmland in Miyazaki to provide disabled
persons with a place to work, from the perspective of regional revitalization, in terms of creating employment opportunities in regions with few
workplaces. Earth Corporation complies with the statutory requirement of 2.54% for the employment of disabled persons.
- LGBTQ initiatives
Earth Corporation provides e-learning for all employees to promote an understanding of LGBTQ issues, and has also put in place related in-house
regulations.
Principle 2-6
Earth Corporation operates a corporate pension through the Otsuka Pharmaceutical Group Pension Fund. This fund accepts the “Principles for
Responsible Institutional Investors: Japan's Stewardship Code.”
The Otsuka Pharmaceutical Group Pension Fund comprises the Delegation Committee, the Board of Directors, and the Asset Management
Committee, and participants from Earth Corporation have knowledge of either finances or human resources.
These parties regularly monitor the status of pension asset operations jointly with other companies participating in the Otsuka Pharmaceutical
Group Pension Fund, and review the pension asset configuration as deemed necessary.
Principle 3-1(1) The Company’s goals (including the management philosophy), management strategies, and management plans
Earth Corporation’s basic philosophy and management policies are disclosed in the Guidelines, Chapter 1: General provisions (1) Corporate
philosophy and (2) Management policy.
Management strategies and management plans are disclosed in performance explanation materials in the Medium-term Management Plan.
Relevant materials are also posted on the Company’s website.
(Medium-term Management Plan on Earth Corporation’s website)
https://corp.earth.jp/jp/ir/management-policy/management-plan/index.html(2) Basic approaches and basic policies related to corporate governance
These are disclosed in the Guidelines, Chapter 1: General provisions (3) Basic approach to corporate governance.
(3) Policies and procedures in the Board of Directors’ decisions on compensation for top management and directors
These are disclosed in the Guidelines, Chapter 5: Responsibilities of the Board of Directors, (1) Configuration, roles, and responsibilities of theBoard of Directors, 2. Roles and responsibilities and (3) Roles and responsibilities of independent outside directors.
(4) Policies and procedures in the Board of Directors’ selection of top management and nomination of director and auditor candidates
These are disclosed in the Guidelines, Chapter 5: Responsibilities of the Board of Directors, (6) Director/auditor candidate nomination policies,
executive officer nomination and dismissal policies and procedures.
(5) Explanations of selection of top management and nomination of director and auditor candidates by the Board of Directors
The reasons for nominating director and auditor candidates are disclosed in the Convocation Notice for the General Meeting of Shareholders.
Supplemental principle 4-1-1
Disclosed in the Guidelines, Chapter 5: Responsibilities of the Board of Directors, (1) Configuration, roles, and responsibilities of the Board of
Directors 2. Roles and responsibilities.
Principle 4-9Disclosed in the Guidelines, Chapter 5: Responsibilities of the Board of Directors, (6) Director/auditor candidate nomination policies,
executive officer nomination and dismissal policies and procedures, 3. Securing the independence of outside officers. Standards forjudgments on the independence of outside directors are disclosed in the Convocation Notice for the General Meeting of Shareholders.
Supplemental principle 4-10-1
Earth Corporation is a company with an Audit & Supervisory Board, and independent outside directors do not account for more than half of theBoard of Directors. Although issues related to director nomination and compensation are subject to consultation by the Nomination andCompensation Committee, in which independent outside directors constitute the majority, we strive to ensure transparency and objectivity so that
accountability is fulfilled in the consideration of important issues.
The configuration, authority and role of the Nomination and Compensation Committee are disclosed in the Guidelines, Chapter 5:
Responsibilities of the Board of Directors, (6) Director/auditor candidate nomination policies, executive officer nomination and dismissal policies
and procedures, 5. Configuration, Authority, and Role of the Nomination and Compensation Committee.

Supplemental principle 4-11-1
To ensure the vitality and effectiveness of discussions and meetings of the Board of Directors, Earth Corporation has set an upper limit of 10
directors. Furthermore, to ensure independence and objectivity in discussions and meetings of the Board of Directors, we have appointed several
independent outside directors, establishing a structure in which independent outside directors account for one third of all directors.
With the premise of achieving continuous growth for the Company and increasing corporate value in the medium and long term, we haveidentified the skills required of Earth Corporation’s Board of Directors, and have created the following skill matrix to give a visual presentation of
the knowledge and skills demonstrated by the various directors and auditors. Essential skills will be reviewed regularly.

When nominating director candidates, candidate proposals are created by the President & Representative Director taking into account past
performance, experience, and capabilities , and the Nomination and Compensation Committee, in which independent outside directors constitutethe majority, is consulted, and decisions are made by the Board of Directors after a sufficient review period.
Supplemental principle 4-11-2
The status of concurrent duties of directors and auditors is disclosed in the Convocation Notice for the General Meeting of Shareholders and insecurities reports. The status of concurrent executive officer duties among Earth Corporation’s current directors and auditors is as follows.
- Outside director: Harold George Meij: Kewpie Corporation, Management Advisory Board
Alinamin Pharmaceutical Co., Ltd., outside director
COLOPL, Inc., outside director- Outside director: Naoko Mikami, Showa Sangyo Co., Ltd., outside director- Outside auditor: Shoji Kono, InfoNet Inc., outside auditor- Outside auditor: Yukako Ikukawa, TVE Co., Ltd., outside director (Audit & Supervisory Committee member)
Earth Corporation’s director and auditor duties are undertaken appropriately. Other directors and auditors have no concurrent duties as executive
officers at listed companies other than Earth Group companies.
Supplemental principle 4-11-3
An outline of evaluation results on the effectiveness of the Board of Directors can be found on Earth Corporation’s website.
(Earth Corporation website, Corporate Governance, Evaluation of the Board of Director’s effectiveness)
https://corp.earth.jp/en/company/governance/pdf/jikkousei.pdf
Supplemental principle 4-14-2
Disclosed in the Guidelines, Chapter 5: Responsibilities of the Board of Directors, (7) Training.
Principle 5-1
Disclosed in the Guidelines, Chapter 6: Dialogues with shareholders, etc.

2. Capital structure
Ratio held by non-Japaneseshareholders

10% or more, and less than 20%

Status of major shareholders
Name

Shares held

Ratio (%)

The Master Trust Bank of Japan, Ltd. (Trust Account)

2,341,500

10.62

Otsuka Pharmaceutical Co., Ltd.

2,200,000

9.98

Otsuka Pharmaceutical Factory, Inc.

1,948,500

8.84

Earth Corporation Employee Shareholding Association

1,054,400

4.78

Taiho Pharmaceutical Co., Ltd.

600,000

2.72

Custody Bank of Japan, Ltd. (Trust Account)532,900

2.42

HSBC BANK PLC A/C M AND G(ACS)409,200

1.86

Otsuka Chemical Co., Ltd.

400,000

1.81

The Chugoku Bank, Ltd.

340,600

1.55

SMBC Nikko Securities Inc.

254,300

1.15

Controlling shareholders(excluding the parent company)―――

Parent company

None

Supplementary explanations―――

3. Company attributes
Listed stock exchange and market
Tokyo Stock Exchange Prime Market
segment
Fiscal year-end

DecemberIndustry

Chemicals

Number of employees (consolidated)
at end of most recent business year

1,000 or more

(Consolidated) sales in most recent
business year

JPY 100 billion or more, and less than JPY 1 trillion

Number of consolidated subsidiaries at
end of most recent business year

10 or more, and less than 50

4. Policies regarding the protection of minority shareholders in the event of transactions involving
controlling shareholders―――

5. Other special conditions with significant impact on corporate governanceOtsuka Holdings Co., Ltd., which has under its umbrella major shareholders in Earth Corporation including Otsuka Pharmaceutical Co., Ltd.,
Otsuka Pharmaceutical Factory, Inc., and Taiho Pharmaceutical Co., Ltd., indirectly owns 24.4% of voting rights in Earth Corporation.
Otsuka Holdings Co., Ltd.’s corporate Group (the “Otsuka Group”) undertakes business activities related to healthcare, “Nutraceuticals*,”
consumer goods, and other business (e.g., warehouse/transport operations, liquid crystal and spectrometry business, and chemical products).
Earth Corporation is involved in the household products business, which includes the manufacture and sales of insecticides and daily sundries,
as well as the General Sanitary Management Business, which includes the design and development of quality assurance systems and relatedcomprehensive consulting services, and the Earth Group is the only entity undertaking these businesses within the Otsuka Group.
The Earth Group undertakes transactions with the Otsuka Group, including the mutual leasing of real estate, logistics outsourcing contracts, thepurchase of raw materials, and the provision of environmental sanitation management services. To protect minority shareholders, decisions onwhether these transactions can be undertaken are made fairly and appropriately, for example ensuring that the need for the transactions and thetransaction conditions do not differ substantially from regular transactions with third parties.

Business operations are executed based on independent decisions made mainly by the Board of Directors, and are not affected by transaction
relationships, capital relationships, or human relationships with the Otsuka Group.
* “Nutraceuticals” is a portmanteau of “Nutrition” and “Pharmaceuticals,” and refers to business handling functional foods and nutritional
supplements developed based on scientific evidence.

Ⅱ Status of corporate management organizations and other corporate governance structures related to
management decision-making, execution, and direction
1. Organizational Composition and Operation
Organization Form

Company with corporate auditors

Directors
Maximum number of directors stipulated
10
in Articles of Incorporation
Term of office stipulated in Articles
1 yearof Incorporation
Chairman of the Board

Company President

Number of directors

9

Appointment of outside directors

Appointed

Number of outside directors

3

Numberofoutsidedirectors
designated as independent directors

3

Relationship with the company (1)NameAttribute

Hideyuki Tamura

From another company

Harold George Meij

From another company

Naoko Mikami

From another company

Relationship with the Company*
A

b

c

d

e

f

g

h

i

j

k

△

* Categories for “relationship with the Company”* “○” when the director currently 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 currently falls or has recently fallen under the category; “▲” when the director fell under
the category in the pasta Executive of a listed company or its subsidiaries
b Executive or non-Executive Director of the parent company of a listed company
c Executive of a fellow subsidiary company of a listed company
d A party whose major client or supplier is a listed company, or an executive thereof
e Major client for supplier of a listed company, or an executive thereoff Consultant, accountant, or legal professional who receives a large amount of monetary consideration or other property from alisted company aside from executive compensationg Major shareholder of a listed company (or an executive of the said major shareholder when the shareholder is a corporate
entity)h Executive of a client or supplier company of a listed company (which does not correspond to any of d, e, or f)i Executive of a company between which and external directors are mutually appointed (the said individual only)
j Executive of a company or organization that receives a donation from a listed company (the said individual only)
k OtherRelationship with the company (2)Name

Independent
officer

Supplementary explanationof the applicable item

An independent officer of Earth Corporation
Hideyuki Tamura○

Mr. Tamura has held important positions,
including President & Representative
Director at Hokkaican Co., Ltd.

Harold George Meij○

An independent officer of Earth Corporation

Naoko Mikami○

An independent officer of Earth Corporation

Reasons for appointment
Mr. Hideyuki Tamura will appropriately execute hisrole in deciding important management items anddirecting the execution of operations from a fairand independent perspective as an outside
director. He has extensive experience and a broad
range of knowledge in the manufacturing field as amanager, and is expected to contribute tostrengthening supervisory functions in theexecution of operations and to provide advice andopinions from abroad management perspective.
Mr. Tamura has held the position of President &Representative Director at Hokkaican Co., Ltd.
Transactions between Earth Corporation andHokkaican Co., Ltd. account for less than 2% ofannual consolidated sales, which is the level that
the Company judges as “lacking independence.”
Furthermore, Mr. Tamura has no special interest
in Earth Corporation, and is deemed to be subject
to no conflicts of interests with regularshareholders, and so has been designated as anindependent officer.
Mr. Meij has extensive experience and diverse
managerial knowledge as a manager of aninternational company, and is expected to work tostrengthen the governance structure by providing
various opinions and advice to management inachieving medium and long-term corporate growthat Earth Corporation.
Furthermore, Mr. Meij has no special interest in
Earth Corporation, and is deemed to be at no riskof conflicts of interests with regular shareholders;
as this independence is deemed to be guaranteed,he has been designated as an independent officer.
By leveraging her extensive experience andknowledge in a broad range of fields, including
production, quality assurance, and managementin Japan over many years, she is expected toprovide advice and opinions on strengthening
management supervisory functions andappropriate decision-making by the Board of
Directors.
Furthermore, Ms. Mikami has no special interest in
Earth Corporation, and is deemed to be at no riskof conflicts of interests with regular shareholders;
as this independence is deemed to be guaranteed,she has been designated as an independent
officer.

Voluntary establishment of committee(s)corresponding to nominating committee or None
compensation committee

Auditors
Establishment of an Audit & Supervisory
Established
Board
Maximum number of auditors stipulated
5in Articles of Incorporation
Number of auditors

3

Status of collaborations with auditors, accounting auditors, and the internal auditing division
The Audit & Supervisory Board comprises three members (two of which are outside auditors). Based on auditing policies and annual auditing
plans, it conducts operational audits through visits to Earth Corporation’s main workplaces and internal/external subsidiaries, and also monitorsorganizational operation structures by attending regular meetings of the Board of Directors and other important meetings. It exchanges opinions
on important issues arising during audits with directors, including the President & Representative Director. Shoji Kono, an outside auditor, isqualified as a certified public accountant, and Yukako Ikukawa, an outside auditor, is qualified as a tax accountant, and so both have a substantial
degree of knowledge regarding finances and accounting.

Internal audits are conducted by the Auditing Division, with the staff comprising six persons, including the division manager. The Auditing
Division conducts operational audits for the Earth Group based on annual audit plans, and has established a structure to conduct internal audits
from the perspective of enhancing appropriate operations and internal management and strengthening risk management. The results of internal
audits are reported to the President & Representative Director and at management meetings.
The Audit & Supervisory Board and the Auditing Division collaborate with one another, and regular meetings are held with accounting auditors
to increase the effectiveness of audits through close collaborations, including active exchanges of information.

Appointment of outside auditors

Appointed

Number of outside auditors

2

Numberofoutsideauditors
designated as independent directors

2

Relationship with the Company (1)NameAttributeShoji Kono

Certified public accountant

Yukako Ikukawa

Tax accountantabRelationship with the Company*c d e f g h i j k lm△* Categories for “relationship with the Company”* “○” when the director currently 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 currently falls or has recently fallen under the category; “▲” when the director fell under the category
in the pasta Executive of a listed company or its subsidiaries
b Non-Executive Director or accounting advisor for a listed company or its subsidiaries
c Executive or non-Executive Director of the parent company of a listed company
d Auditor of the parent company of a listed company
e Executive of a fellow subsidiary company of a listed company
f A party whose major client or supplier is a listed company, or an executive thereof
g Major client for supplier of a listed company, or an executive thereofh Consultant, accountant, or legal professional who receives a large amount of monetary consideration or other property from alisted company aside from executive compensationi Major shareholder of a listed company (or an executive of the said major shareholder when the shareholder is a corporate
entity)j Executive of a client or supplier company of a listed company (which does not correspond to any of f, g, or h)k Executive of a company between which and external directors are mutually appointed (the said individual only)l Executive of a company or organization that receives a donation from a listed company (the said individual only)m OtherRelationship with the Company (2)Name

Shoji Kono

Yukako Ikukawa

Independent
officer

Supplementary explanationof the applicable item

Reasons forappointment○

Mr. Shoji Kono demonstrates outstanding
character as well as extensive specialized
knowledge and experience in finance andaccounting as a certified public accountant.
He makes substantial contributions tostrengthening auditing functions at Earth
Corporation. Moving forward, we believe that
he will be able to make suggestions andcomments to further strengthen the
An independent officer of Earth
Company’s auditing structure, and to
Corporation
Mr. Kono was involved in the execution execute his duties from a fair and objective
perspective.
of operations at Ernst & Young
ShinNihon LLC, but has not been
involved in the execution of these
The value of transactions between Earthoperation since leaving that firm in
Corporation and Ernst & Young ShinNihon
2016.
LLC account for less than 2% of annual
consolidated sales, which is the level that theCompany judges as “lacking independence.”
Furthermore, Mr. Kono has no special
interest in Earth Corporation, and is deemed
to be subject to no conflicts of interests withregular shareholders, and so has been
designated as an independent officer.

○

Ms. Yukako Ikukawa has a detailed
knowledge of corporate taxation based on
specialized knowledge as a tax accountant,
and we have made the judgment that she
will be able to provide suggestions andadvice and to supervise directors from a fairand neutral perspective.

An independent officer of Earth
Corporation

Independent officers
Number of independent officers

5

Other items related to independent officers
Earth Corporation designates all persons who fulfill the requirements of an independent officer as an independent officer.

Incentives
Status of measures related
incentives provided to directors

toIntroduction of performance-linked compensation system, etc.

Supplementary explanation of the items in question
Earth Corporation’s director compensation structure comprises basic compensation in keeping with the position and its responsibilities, aperformance-linked bonus as a short-term incentive tied into performance, and a restricted stock compensation plan as a long-term incentive tied
into shareholder benefits.

Persons receiving stock options

Supplementary explanation of the items in question―――Director compensation
Status of disclosure (ofdirectors’ compensation)individual

Individual disclosure for specified parties only

Supplementary explanation of the items in question
Individual disclosure of Earth Corporation’s director compensation is limited to persons for whom compensation exceeds JPY 10 0 million.
As of FY12/21, there were two directors whose compensation exceeded JPY 100 million; Chairman Tatsuya Otsuka and President &Representative Director Katsunori Kawabata.

Policy on determining compensation
amounts and calculation methods
UpdatedEstablished

Disclosure of policy on determining compensation amounts and calculation methods
The total amount of director compensation at Earth Corporation was approved within a scope of JPY 1 billion per year of compensation for
directors at the 97th regular General Meeting of Shareholders held on March 26, 2021 (nine directors at the end of the General Meeting of
Shareholders in question), and within the scope of JPY 40 million in compensation for auditors at the 81st regular General Meeting of
Shareholders held on March 30, 2005 (four auditors at the end of the General Meeting of Shareholders in question). Furthermore, at the 94th
regular General Meetings of Shareholders held on March 23, 2018, approval was received for a share-based compensation system with a 3-5
year restriction on transfer within the scope of JPY 150 million per year of total monetary compensation credit as investment assets for directors
excluding outside directors (nine directors at the end of the General Meeting of Shareholders in question). After that, at the 98th regular General
Meetings of Shareholders held on March 25, 2022, approval was received for a change in the period of restrictions on transfer from the record
date to the date of loss of position as director at Earth Corporation or its subsidiary, or other position as stipulated at a meeting of Earth
Corporation’s Board of Directors.
The Board of Directors has the authority to determine compensation amounts and calculation methods for Earth Corporation’s
officers.
Policies for deciding the details of individual compensation for directors were stipulated as follows at the meeting of the Board of
Directors held on February 14, 2022.
1. Policy for determining officers’ compensation
Individual compensation for Earth Corporation’s directors is set at an appropriate level based on the responsibilities of each position. To continually
increase corporate value and maintain compensation levels appropriate to securing outstanding members, the compensation structure incorporates
a performance-linked bonus as a short-term incentive tied into performance and a restricted stock compensation plan as a medium- to long-term
incentive tied into shareholder benefits.
2. Policies regarding decisions on the amount of compensation, etc. by individual for basic compensation (including policies regarding decisions
on the timing or conditions of granting compensation, etc.)
Basic compensation for Earth Corporation’s directors is decided as an annual amount and is paid on a monthly basis, in keeping with theindividual’s position and responsibilities. The amounts in question are considered comprehensively, taking into account the Company’s performanceand employee salary levels. Compensation for outside directors is limited to basic compensation alone.
3. Policies regarding the determination of the amount of performance-based compensation by individual (including policies regarding decisions
on the timing or conditions of granting compensation and the ratio of such compensation to the amount of compensation by individual).
In order to raise awareness of the need to improve business performance in each fiscal year, performance-linked compensation (performancelinked bonus) are paid to directors, excluding outside directors. The amount (not to exceed a total of 300 million yen) is calculated after the
performance index for each business year is determined according to the degree of achievement of the numerical target for consolidated operating
income for that year, and is paid on a monetary basis at a certain time each year. Performance-linked bonuses are not paid, however, in the eventthat consolidated operating income and net income attributable to owners of the parent are at 50% or less of a target value.The amount of
performance-linked bonuses paid to each director is set within the scope of approximately 0-30% of basic compensation, taking into consideration
the degree of achievement for both Company performance and the directors’ individual performance targets.
Target values for each performance index shall be set at the time of formulating the management plan for each business year, and shall be
reviewed in consultation with the outside directors in response to significant changes in the environment, such as business transfers or acquisitionof subsidiaries through share buy-backs.
4. Policies regarding the determination of the amount of compensation, etc. for each individual with respect to non-monetary compensation(including policies regarding the decisions on the timing or conditions of granting compensation and the ratio of such compensation to theamount of compensation, by individual).
In order to raise awareness of the need to enhance corporate value over the medium to long term, treasury stock compensation is offered todirectors other than outside directors in the form of stocks with restrictions on transfer, with an upper limit of 20,000 shares per business year
(equivalent to JPY 150 million/year). As a rule, in order to promote continued sharing of value as shareholders, it is recommended that during theirtenure, the directors in question continue ownership of the Company’s shares equivalent to the standard amount in keeping with their position,
based on current market value. The general target for the “standard amount” in question is twice the basic compensation for representative directors
and basic compensation for other directors receiving this compensation. The ratio of the company's treasury stock compensation to the amount ofcompensation shall be determined so that the President and Representative Director shall receive the largest amount, up to a maximum of
approximately 35% of base compensation depending on position, and the Board of Directors shall resolve the number of shares to be allocatedwith transfer restrictions for each director.
A contract on the allocation of shares with restrictions on transfer, including the following items, shall be completed between the Company anddirectors receiving allocation of common shares.
i. The period of restrictions on transfer shall be from the record date to the date of loss of position as director at Earth Corporation or its
subsidiary, or other position as stipulated at a meeting of Earth Corporation’s Board of Directors (hereinafter “Director, etc.”), and as a rule, theLumada and transfer shall be removed when the period of the restriction on transfer is complete.
ii. In the event that a director receiving treasury stock compensation loses a position as a director at Earth Corporation or its subsidiary before thecompletion of the regular General Meeting of Shareholders for the business year during which the shares were all located, the Company shallnaturally acquire the shares with restrictions on transfer in question, obviously at no charge, assuming that there are no reasons deemed fair by the
Board of Directors.

5. Delegation of decisions on individual compensation for directors
Decisions on specific details of individual compensation for directors shall be delegated to the representative director based on a resolution by
the Board of Directors, and the specific items delegated shall be the evaluation and distribution of bonuses based on the amounts of basic
compensation for each director and the performance of the respective duties of each director. To demonstrate that the authority in question is being
executed appropriately, the President & Representative Director shall report to the Board of Directors on the results of joint deliberations withoutside directors.
As indicated in the policies of, the index for performance-linked compensation shall be the degree of achievement of numerical targets forconsolidated operating income. This is because Earth Corporation places a high emphasis on “earning power” in the context of continuous growth,and because consolidated operating income is considered the most important management index.
In the process for deciding the amounts of earth Corporation’s officers’ compensation in FY2021, compensation proposals were brought toindependent outside directors for consultation and individual compensation amounts were decided following the resolution at the meeting of theBoard of Directors held on March 26, 2021. Bonuses were brought to independent outside directors for consultations and were reported at a
meeting of the Board of Directors held on January 26, 2022; payments totaling JPY 100 million were made following comprehensive considerationof the status of achievement of plans and the amounts of net income attributable to owners of the parent for the business year in question.
The amount of auditors compensations were decided following deliberations by auditors in keeping with the details of those
auditors’ duties and responsibilities.
The system of officers’ retirement benefits was eliminated with the completion of the 85th regular General Meeting of Shareholders
held on March 25, 2009.

Support system for outside directors (and outside auditors)
When deemed necessary, the Audit & Supervisory Board or an auditor may request that directors assist in auditing operations for a limited
period of time. The employee responsible for this support shall follow the directions and orders of the auditor.

2. Items related to functions of business execution, auditing, oversight, nomination, and compensation
decisions (overview of current corporate governance system)
The Board of Directors comprises nine members, including three independent outside directors. As a rule, in addition to regular meetings of theBoard of Directors held once each month, provisional meetings of the Board of Directors are held as deemed necessary, to decide items
stipulated by law and important management items, and to appropriately supervise the execution of operations. The three independent outside
directors have extensive experience and a broad range of knowledge based on managerial experience with the Company, and contribute toincreasing corporate value in the medium to long-term by providing appropriate advice and opinions regarding management strategies and othermatters at meetings of the Board of Directors and other important meetings, and also by monitoring potential conflicts of interest based on
objective judgments.
Chairman: President & Representative Director Katsunori Kawabata
Members: Chairman Tatsuya Otsuka, Director Yoshiyuki Furuya, Director Yoshinori Kawamura, Director Hisaaki Karataki, Director Takeshi Shakata,
Outside Director Hideyuki Tamura, Outside Director Harold George Meij, Outside Director Naoko Mikami
Earth Corporation has adopted an executive officer structure to clarify management roles and responsibilities and increase the speed with whichplans are executed. At “strategy deliberation meetings” led by President & Representative Director Katsunori Kawabata and comprising executive
officers designated by the President, members conduct prior discussions about items to be raised at meetings of the Board of Directors, anddeliberate on particularly important management items among those to be approved by the President.
The Audit & Supervisory Board comprises three members, two of which are outside auditors, and meetings of the Board are held once eachmonth. In keeping with auditing policies and annual audit plans stipulated at meetings of the Audit & Supervisory Board, auditors undertake
operational audits emphasizing shareholder benefits and from a perspective of legal compliance, and monitor organizational operation structuresby attending meetings of the Board of Directors and other important meetings.
Chairman: Fulltime Auditor Yasuhiko Murayama
Members: Outside Auditor Shoji Kono, Outside Auditor Yukako Ikukawa
Earth Corporation’s accounting auditor is Ernst & Young ShinNihon LLC. There are no special interests between Earth Corporation and is
corporate auditor, or the employees executing operations at the corporate auditor handling Earth Corporation’s accounting audits. Ernst & Young
ShinNihon LLC has already independently taken steps to ensure that employees executing these operations are not involved in Earth’s
accounting audits for more than a specified period of time. The names of the two certified public accountants securing operations during thecurrent fiscal year (Designated Limited Liability Partners, Engagement Partners) are Takahiro Morita and Atsushi Yuasa; assistance involved inaccounting audit operations comprise 10 certified public accountant and 28 other members. Ernst & Young ShinNihon LLC witnesses
interregnum and year-end inventories, and accounting auditor’s exchange information and opinion at meetings held to report on and explaininterim audits and audits of financial statements, to increase the effectiveness of auditing.
Policies and procedures related to the nomination of director candidates in auditor candidates and decisions and directors’ compensation aredisclosed in the Guidelines, Chapter 5: Responsibilities of the Board of Directors (1) Configuration, roles, and responsibilities of the Board of
Directors; (2) Roles and responsibilities of directors; (3) Roles and responsibilities of independent outside directors; and (6) Director/auditor
candidate nomination policies, executive officer nomination and dismissal policies and procedures.

3. Reasons for selecting the current corporate governance system Updated
In addition to making rapid and appropriate management decisions at management meetings of the Board of Directors and the Strategic
Council, which is organized by the President and Representative Director and consists of executive officers appointed by the President andRepresentative Director, the Company strives to strengthen the supervision and direction structure, for example by having outside directors andauditors offer appropriate advice and opinions from a third-party perspective at meetings of the Board of Directors and other important meetings.
Earth Corporation has appointed three independent outside directors, to form a structure in which these outside directors account for one third or
more of all directors. These directors have extensive experience and a broad range of knowledge from their respective independent perspectives,and contribute to increasing corporate value in the medium to long term by providing appropriate advice (e.g., with regard to management strategies),
directing management through important decision-making processes at meetings of the Board of Directors, and monitoring potential conflicts ofinterest based on objective judgments.
The current structure was adopted to fully guarantee the effectiveness of corporate governance, taking into account a variety of factors,
including detailed conditions in relation to accounting in the execution of operations, through close collaborations among the Audit & Supervisory
Board, the Auditing Division (an internal auditing division), and accounting auditors.

Ⅲ Implementation of measures involving shareholders and other stakeholders
1. Measures to energize General Meetings of Shareholders and promote smooth exercise of voting rights
Supplementary explanations
Scheduling of General Meeting of
Shareholders to avoid overlap withother companies

The regular General Meeting of Shareholders for FY12/21 was held on March 25,
2022, to avoid overlap on the day that many other Japanese companies hold thesemeetings (on March 30, 2022).

Exercise of voting rights byelectromagnetic means

A designated website has been established by Earth Corporation to enable theexercise of voting rights via the Internet.

Measures to improve the voting
environment for institutional investors,
including participation in electronic
voting platforms

Earth Corporation has been participating in electronic voting platforms since the 98th
regular General Meeting of Shareholders.

Providing the Convocation Notice(summary) in English

To increase convenience for overseas institutional investors, summaries of theConvocation Notice for the General Meeting of Shareholders and proposals aretranslated into English for disclosure.

2. IR activities

Supplementary explanations

Creation and publication of disclosure
policyThe Basic IR Policy, which clearly documents policies related to
Earth Corporation’s IR structures and activities, is disclosed on the
Company’s website.

Regular briefings for analysts andinstitutional investors

Briefings for analysts and institutional investors are held twice
each year. The financial results briefing for FY12/21 was held
on February 16, 2022 (Wednesday), and was accessed by 43lines.
At these briefings, the President & Representative Director provides
explanations on items including the Company’s performance andfuture outlook. Individual meetings with investors and analysts arealso held appropriately, in an effort to build relationships with theseparties.

Posting of IR materials on the website

IR materials posted on the website include brief reports on financial
results, securities reports, performance reports, financial results
briefing materials, and press releases.

Establishment of IR division (staff)

Earth Corporation’s IR operations are handled within the Group
Business Management Department of the Group Management
Headquarters. IR operations are administered by the Senior
Executive Officer and General Manager of the GroupManagement Headquarters.

Explanationbyrepresentative

Provided3. Measures to ensure due respect for stakeholders
Supplementary explanations
Earth Corporation established “Earth Corporation Conduct Guidelines” as a standard of
Stipulation of internal rules for respecting conduct to promote fair activities in accordance with corporate ethics. These Guidelines
stipulate the ideal approach to be taken with regard to various stakeholders, including
the position of stakeholders
shareholders and investors, customers, society, transaction partner and competitor
companies, and employees.

Environmental protection, CSR,
and related activities

Earth’s basic sustainability policy is that “Based on the management philosophy that
Earth Corporation will ‘Act to live in harmony with the Earth,’ we will collaborate withstakeholders to take on issues related to sustainability, and contribute to continuously
increasing corporate value and to building a sustainable society.” Based on this policy,
we have identified the following five material issues, and will work toward responding tothem appropriately.
- Provide products and services that contribute to safe and comfortable living- Respond to climate change- Pay attention to global environmental problems- Promote sustainable procurement- Create workplaces that support activities by diverse individuals
In keeping with the “Basic Environmental Policy,” Earth undertakes companywide
environmental protection activities, including compliance with various environmental
laws, reducing waste, and promoting recycling. The entire company has been certified
and registered with the Ministry of the Environment’s EcoAction 21 environmental
management system. The Company has issued CRS reports since 2017, publishing its
activities targeting sustainability issues.

Policies related to the provision of
information to stakeholders

Earth Corporation’s “Timely Disclosure Manual” defines the basic policy on timely
disclosure as an effort to promote understanding of the Company’s management policies
by always actively disclosing information from the perspective of shareholders andinvestors, based on the belief that timely and appropriate disclosure of information toshareholders and investors is an important duty of the Company.

Other

As a contact point for consultations from consumers, Earth has established a contact
division for making use of items noticed by customers, to respond sincerely to inquiries,
complaints, and requests from customers.

Ⅳ Items related to internal control systems
1. Basic approaches to internal control systems and the status of system implementation Updated
Earth Corporation decided on a “Basic Policy on Internal Control Systems” at meetings of the Board of Directors, and has put in place systems as
required to ensure that the execution of directors’ duties are in compliance with laws and the Articles of Incorporation, and to ensure theappropriateness of other operations at Earth Corporation.
The text of the “Basic Policy on Internal Control Systems” is as follows:
1. Systems to ensure that the Company’s directors and employees execute their duties in compliance with laws andregulations and the Articles of Incorporation(1) Earth Corporation created and complies with “Earth Corporation Conduct Guidelines,” and strives to be a “viable
company” by providing products from a customer perspective and fulfilling its social responsibilities as a company.
(2) Earth Corporation has established a contact point for internal reporting, which is operated by a Compliance Committee that
includes directors and auditors.
(3) The Audit Division, which is governed directly by representative directors, reports on the results of operational audits torepresentative directors and management meetings.
(4) Earth Corporation has absolutely no relationships with antisocial forces or related organizations, and when inappropriate
requests are received, the Company responds with a resolute attitude in collaboration with the police, lawyers, and other outside
agencies.
2. System for storage and management of information related to the execution of duties of the Company’s directors
In accordance with Document Management Regulations, Earth Corporation records, on paper or in electronic media, important meeting minutes,
circulars, contracts, and copies of important documents submitted to government agencies, and the divisions with jurisdiction take responsibility
for the storage and management of those documents.
3. Regulations and other systems related to the management of risks of losses at Earth Corporation(1) At Earth Corporation, the Crisis Management Committee leads studies on the status of risk management and response methods, inaccordance with basic regulations on crisis management.
(2) To ensure continuity in business even in the event of natural disasters or cases of inappropriate execution of operations, the Company’s Crisis
Management Committee has created a Business Continuity Plan (BCP), and has constructed a Business Continuity Management (BCM) system.
The status of the Crisis Management Committee’s activities is reported appropriately to the Board of Directors.
(3) Earth Corporation has created “Information Security Management Regulations” and a manual for the management of information assets. The
ISMS Committee leads activities aimed at preventing information leaks and system failures, and responding when such incidents occur.
4. Systems to ensure the efficient execution of the duties of the Company’s directors(1) As a rule, Earth Corporation holds meetings of the Board of Directors once each month, to deliberate and decide on important management
items, in accordance with the “Board of Directors Regulations.” Furthermore, a Strategy Council attended by executive officers, the president, andexecutive officers appointed by the president is held once a month in principle to discuss important matters such as the strategies of each divisionand business unit, in addition to preliminary discussions on matters to be brought up at the Board of Directors meetings.In addition, theNomination and Compensation Committee shall be established as an advisory body to the Board of Directors to ensure the transparency andobjectivity of procedures related to the nomination and compensation of directors.
(2) Earth Corporation creates comprehensive budgets for each business year and Medium-term Management Plans in accordance with thebudget management regulations, and following approval by the Board of Directors, shares these budgets and plans with directors andemployees.
(3) The Company has introduced an executive officer system, and separates management decision-making and supervisory functions fromoperational execution functions, to enable rapid management decision-making, strengthen supervision by the Board of Directors, and enable theefficient execution of operations.
(4) The Company holds business monitoring meetings attended by the President, executive officers, and persons nominated by the President.
Business monitoring meetings reports on the progress of business budgets and shares the status of business execution in each area of
responsibility.
(5) The Company has set the term of directors at one year, and clarifies the management responsibilities of directors during each business year,
establishing management systems to enable rapid response to changes in the management environment. Mobility of the Board of Directors is
ensured by setting the number of directors between three and 10.
5. System to ensure appropriate operations by a corporate group comprising Earth Corporation and its subsidiaries(1) Subsidiaries create regulations related to compliance and risk management, and provide education and training to ensure that behavior is incompliance with laws and regulations, while at the same time putting in place measures to prevent management risks in advance, and to respondwhen such risks materialize.
(2) Each subsidiary establishes its own contact point for internal reporting, and operates an internal reporting system.
(3) In accordance with the Group Company Management Regulations, subsidiaries submit information on their own management performance,
financial status, and other important information to the Group Management Headquarters, which is under the direct jurisdiction of Earth
Corporation’s representative director.
(4) Subsidiaries submit budget-related documents to Earth Corporation’s Group Management Headquarters, and receive approval from Earth’s
Board of Directors on budget decisions.
(5) Subsidiaries submit monthly performance and related information to Earth Corporation’s Group Management Headquarters.
(6) The Company analyzes differences between the subsidiaries’ budgets and performance, and submits monthly reports to Earth’s Board of
Directors.
(7) The Audit Division conducts internal audits of subsidiaries as deemed necessary, and subsidiaries cooperate in these audits.
(8) To systematically manage risks affecting the Earth Group, the Company has established a Crisis Management Committee, which deliberates on
issues and responses related to the promotion of risk management for the Group as a whole.
(9) To respond appropriately to internal control reporting systems related to financial reporting in the Earth Group, the Company has established an
Internal Control Promotion Committee, and strives to ensure fairness in financial reporting for the Group as a whole.
(10) The Company’s auditors may request opinions or information from the Earth Group’s directors, auditors, or key employees.
6. In cases where the Company’s auditors request the appointment of an employee to assist in auditing operations: Items related to the employees
in question, the independence of those employees from the Company’s directors, and ensuring the effectiveness of auditors’ instructions to those
employees(1) When deemed necessary, the Audit & Supervisory Board or an auditor may request that directors select an employee to assist in auditing
operations for a limited period of time.
(2) The employee responsible for the support described in (1) above shall follow all directions and orders of the auditor during this period.
(3) When an employee is selected for the support described in (1) above, personnel transfers, discipline, and HR evaluations for the employee inquestion during the required period shall be reported in advance to the Audit & Supervisory Board, and independence shall be secured by obtaining
the opinions of the Board.
7. Items related to the prepayment of costs arising from the execution of the Company’s auditors’ operations, costs arising from reimbursement
procedures or the execution of other duties, and policies involving the processing of debt
(1) Based on budget requests from the Company’s auditors or the Audit & Supervisory Board in relation to the execution of operations, a budget for
the invoice amount in question shall be created, and payment shall be made accordingly.
(2) The Administration Headquarters, General Affairs Department, shall assist in pre-payment of expenses related to the execution of duties fromauditors, and in reimbursement procedures or other required operations.
8. Systems for reporting to Earth Corporation’s auditors by the Company’s directors or employees or subsidiaries’ directors, etc., other systems
related to reporting to auditors, and systems for confirming that reporting parties are not subject to disadvantageous treatment as a result ofsubmitting such a reportwill (1) When deemed necessary, auditors shall attend strategy execution meetings, business execution meetings, branch manager meetings, andother important meetings, to monitor the status of execution for operations by directors and employees.
(2) In the event that a director or employee at Earth Corporation discovers a fact that could potentially result in substantial damage to the Company,that fact shall be reported to an auditor immediately.
(3) As members of the Compliance Committee, the Company’s auditors shall monitor the Company’s internal reporting system to ensure that thesystem is functioning.
(4) Earth Corporation prohibits the disadvantageous treatment of a director or employee of Earth Corporation or its subsidiary as a result of thatparty submitting a report to the Company’s auditors, and all directors and employees of Earth Corporation and its subsidiaries shall be made fully
aware of this prohibition.
9. Systems to ensure that other audits by the Company’s auditors are undertaken effectively(1) The Company’s auditors may request an audit of the Audit Division as deemed necessary.
(2) The Company’s auditors shall attend meetings of the Board of Directors, important meetings, and committee meetings to monitor important
decision-making processes and the status of execution of operations, and shall express opinions as deemed necessary.
(3) The Company’s Audit & Supervisory Board may appoint a lawyer, certified public accountant, consultant, or other outside advisor as deemednecessary.

2. Basic approaches to eliminating antisocial forces, and status of related measures
The “Basic Policy on Internal Control Systems” and “Earth Corporation Conduct Guidelines” clearly stipulate that as a member of society, Earth
Corporation shall have absolutely no relationships with antisocial forces or related organizations that could threaten the safety or order of civilsociety, and all Earth Group Members are made fully aware of this stance. The Administration Headquarters, General Affairs Department, isdesignated as the division responsible for supervising responses, and persons responsible for preventing inappropriate requests shall beassigned to the Head Office and branches; in addition, the Company shall make efforts to prevent involvement by antisocial forces inmanagement activities and to prevent damages from such forces, for example by meeting regularly with local police to gather relevant
information.

Ⅴ Other
1. Adoption of anti-takeover measures
Adoption of anti-takeover measures

None

Supplementary explanation of the items in question―――

2. Other items related to corporate governance systems
As an issue for the future, the Company shall further strengthen compliance systems and corporate governance systems at consolidated
subsidiaries, and shall enhance the direction of nomination and compensation decision processes.
Outline of timely disclosure system
As the person responsible for handling information, the Senior Executive Officer and General Manager of the Group Management Headquarters
shall receive reports on all information subject to timely disclosure, and shall bear responsibility for managing the effectiveness of timely
disclosure systems, for example by making judgments on the need for timely disclosure and giving instructions on appropriate disclosure
procedures.
The Group Business Management Department of the Group Management Headquarters shall be the division responsible for timely disclosure.
At present, this division comprises five persons, including the division manager.
In the flow of the administration for timely disclosure, all information, regardless of its type (e.g., regarding decisions, occurrences, financial
results, information related to adjustments to performance forecasts and dividend forecasts, and other information), shall be aggregated by the
person responsible for handling information, where judgments will be made regarding the need for timely disclosure. Regarding information forwhich timely disclosure of is deemed necessary, the Board of Directors shall approve disclosure for facts regarding decisions and information on
financial results, and the President & Representative Director shall approve disclosure of information related to occurrences and information on
adjustments to performance forecasts and dividend forecasts and other related information. After these approvals, the party responsible forhandling information shall receive a report, and the division in charge of timely disclosure shall immediately disclose the information throughTDnet, in accordance with the Timely Disclosure Regulations. (Refer to the diagram below.) This system is clearly documented in the Company’s
IR Operation Regulations.
Procedures closely related to the above system have been put in place to prevent insider trading before it occurs. The Company has
established insider information management regulations, and has appointed a person responsible for information management and a person in
charge of information management as the parties who manage important information. Given the nature of the information in question, the person
responsible for information management is closely involved with timely disclosure information, so this person shall be the Senior Executive Officer
and General Manager of the Group Management Headquarters, and the persons in charge of information management shall be the generalmanagers of each relevant division. Based on this system, important information shall be quickly centralized with the person responsible for
information handling (the person responsible for information management), and we believe that this system ensures the effectiveness of thetimely disclosure system and the information management system.

System diagrams
1. Corporate Governance System Updated
General meeting of shareholders
Appointments/dismissals

Appointments/dismissals

Appointments/dismissals

Board of Directors

President & Representative Director

Corporate auditors

Strategy Council

Auditing Division

Audit & Supervisory Board

Collaborations

Business Monitoring Meeting
Nomination and Compensation Committee
Corporate Governance Promotion Committee

Executive Officers
Audit

CSR/Sustainability Promotion Committee
Accounting
auditInternal Control Promotion Committee
Audit
Operating divisions

Compliance Committee

Crisis Management Committee

Collaborations

2. Flow of timely disclosure administration

Financial results

Group
Management
HQ

Occurrences

Division inquestion:
Division

Revisions toperformance/dividend
forecasts

Proposingdivision:
Division

Other information

Proposingdivision:
Division

Aggregation of Disclosure
Publication
disclosure
procedures
information

Board of Directors

Board of Directors

President &Representative Director

President &Representative Director

President &Representative Director

TDnet, Press release, etc.

Proposingdivision:
Division

Disclosure
approvalGroup Management Headquarters,
Group Business Management Department

Facts on decisions

Judgment onneed forinformation disclosure

Person responsible for handling information

Source ofinformation

Person responsible for handling information

Type of information