CORPORATE GOVERNANCE
Last update: January 15, 2024

Moriroku Holdings Company, Ltd.
Takashi Kurita, Representative Director, President and CEO
Contact: Corporate Planning Division
TEL03-3403-6103
Securities Code: 4249
https://www.moriroku.co.jp
The status of the Company's corporate governance is as follows.

I

Basic Approach to Corporate Governance, Capital Structure, Corporate Attributes
and Other Basic Information

1. Basic Approach
Our Management Philosophy is “Moriroku Group will create high value with its future-oriented
creativity and advanced technologies, while contributing to the global society.” By practicing this,the Moriroku Group's basic approach to corporate governance is to ensure transparency, fairness,and timeliness in management decision-making. The aim is to continuously increase its corporate
value over the medium and long term, as well as to fulfill the Group's social responsibilities bymaintaining close relations with all types of stakeholders, including customers, business partners,
employees, local communities, and shareholders, in order to earn their trust.

[Reasons for not implementing Principles of the Corporate Governance Code]
The Company implements all the principles set in the Corporate Governance Code.

[Disclosure based on Principles of the Corporate Governance Code] Updated[Principle 1-4: Strategic shareholding policy]
The Company acquires and holds shares for strategic purposes in accordance with the following
policies.
(i)

The Company examines whether shares for strategic purposes will be able to help maintainand reinforce business relationships and realize sustainable growth and a medium- to longterm increase in corporate value and whether the holdings may cause risks, etc. Only in thecase that rationality can be recognized does the Company decides to acquire and hold suchshares.

(ii)

In the case of holding, the Board of Directors regularly verifies shareholdings based on
quantitative evaluation such as transaction amounts and profit margin, and does a qualitative
assessment on aspects such as future prospects, and then makes decisions on whether tocontinue holding. Based on the verification results, the Company sold 28 issues of shares

held for strategic purposes in FY2022.
(iii)

The Company shall, when exercising voting rights for listed shares held, consider whether toapprove or disapprove each proposal, while comprehensively taking into account the impactof the proposal on the medium- to long-term corporate value of the investee companies.

[Principle 1-7: Transactions with related parties]
The Company shall execute transactions with its Directors or those with conflicts of interest after
deliberation and approval by the Board of Directors.
In order to ensure the appropriateness of transactions with related parties, such as major
shareholders and affiliated companies, the Company shall establish regulations for managing
related party transactions, identify and manage transactions with related parties, and, if thetransaction falls under the category of a related party transaction, confirm the necessity, economic
rationality and appropriateness of the terms of the transaction, and then implement approval anddecision-making procedures based on the established regulations.
[Supplemental Principle 2-4-1: Ensuring diversity in appointment of core personnel, etc.]
Based on the concept that Moriroku cannot grow without the growth of diverse human resources,
we are working to secure and promote diverse human resources. Recognizing diversity in the age,gender, nationality, disability, and values of each and every employee, demonstrate teamwork andutilize each other's strengths. We believe that this is what will lead to the realization of "Futureoriented creativity" as stated in our Management Philosophy.
<Appointment of women to management positions>
The ratio of women managers in the Company exceeded 10% in 2021, and female executive officers
have been promoted internally at Group companies and female directors are active at overseas
affiliates.
We aim the ratio of women managers in the Company to than 20% by 2025, and the ratio of womenmanagers in the Group companies to than 5%.
The Company will maintain the ratio of new women graduates hired for career-track positions at
50%, while the Group companies will strengthen hiring with a target of 25%. In addition, we will
increase the number of women managers by supporting the autonomous growth of our employees
and continuously working to foster career awareness among women employees.
<Appointment of non-Japanese to management positions>
We are actively recruiting human resources regardless of nationality, and we currently have 18 nonJapanese employees in the Group companies, three of whom are active in management positions.
In addition, at our overseas affiliates in Canada, the U.S., China, South Korea, Thailand, India, and
the Philippines, non-Japanese employees are serving as Directors, and two of them are women.

We will continue to actively promote the training and appointment of non-Japanese employees, andplan to increase the number of non-Japanese employees appointed to the CEO position at overseas
affiliates to three or more by 2025.
<Appointment of mid-career hires to management positions>
We are promoting the mid-career hiring of highly specialized personnel and personnel with thetechnology, experience, and skills necessary for the future business of the Group, and more than
30% of mid-career hires have been promoted to management positions in the Group companies.
We will continue to strengthen our diversity by hiring mid-career personnel to account for about 50%of new hires each year.
<Policies on human resource development and internal environment improvement to ensure
diversity and their status>
We aim to create an environment and workplace where each employee can maximize their abilities
and individuality and work with vigor and enthusiasm. To this end, we are creating a corporate
culture that accepts and utilizes diverse values and new ideas, conducting training for managers toachieve this, and promoting flexible work styles regardless of where employees work, such as
flextime system and telecommuting. In addition, through the diversity & inclusion promotion
activities, we are actively working to create new systems and frameworks while envisioning how theactivities of diverse human resources will lead to “Future-oriented creativity.”[Principle 2-6: Functioning as an asset owner of corporate pension plan]
The Company formulates a strategic asset composition ratio for its defined-benefit pension funds
and manages them through dialogue and consultation with investment institutions by personnel with
relevant knowledge in the departments in charge of human resources, accounting and finance. In
managing assets, we entrust the management of pension assets to investment institutions that havedeclared their acceptance of the Stewardship Code. In addition, we have established a structure
under which the departments in charge of human resources and accounting and finance regularly
monitor the investment status of the entrusted investment institutions, and review and revise thestrategic asset composition ratio that has been established as necessary. Furthermore, by having
the relevant department staff participate in external training and seminars, the Company strives toconfirm market trends related to investment management and improve their knowledge. The
Company manages conflicts of interest appropriately by entrusting the selection of individual
investee companies and the exercise of voting rights to the investment trust management
organization.
[Principle 3-1: Enhancement of information disclosure](i)Management Philosophy, Management Strategies, and Management PlanManagement Philosophy: This is posted on the Company's website.
Management Strategies and Plan: The Company has formulated the medium-term
management plan, the first year being FY2022, which is posted on the Company's website.
(ii)

Basic Approach and Policy on Corporate Governance
It is described in "I. 1. Basic Approach" of this report.

(iii)

Policies and procedures for the Board of Directors in determining remuneration of Senior
Management and Directors
The amount of remuneration for Directors is determined by the Board of Directors within thescope of the remuneration resolved by the General Meeting of Shareholders after deliberationby the Nomination & Remuneration Advisory Committee. For details, please refer to[Directors' remuneration] in "II. 1. Matters Related to Institutional Structure & Organizational
Management, etc." of this report.

(iv)

Policies and procedures for the Board of Directors’ election and dismissal of senior
management and nomination of candidates for Directors and Audit & Supervisory Board
Members
For the election of Directors and Audit & Supervisory Board Members, the Company elects
talented persons who have a high sense of ethics and a strong law-abiding spirit withknowledge, experience, expertise, etc. considered to be necessary for the Board of Directors
in light of the skill matrix, while paying attention to the balance and diversity of the Board of
Directors as a whole. This process is intended to enable the Board of Directors to makedecisions on execution of important business operations through full discussion between
themselves and perform the appropriate functions of supervising and auditing execution ofbusiness operations at high levels. In respect of Outside Directors and Outside Audit &Supervisory Board Members, the Company elects persons with abundant experience inbusiness management and advanced expertise, broad knowledge and experience in finance,accounting, legal affairs, etc. To elect a President and Representative Director, theNomination & Remuneration Advisory Committee, a majority of whose members are
independent Outside Directors, engages in repeated deliberations to clarify the election
process and ensure objectivity, timeliness and transparency, thereby electing an appropriate
talented person with a view in part to bringing the management philosophy and businessstrategy of the Company into reality.
In the case that any of the following events apply to any Director or Executive Officer, theBoard of Directors will lose no time and deliberate on the dismissal of the Director or
Executive Officer after receiving advice from the Nomination & Remuneration Advisory
Committee.
• Cases where violations of laws and regulations, the Articles of Incorporation, etc. or otherforms of malpractice are found• Cases where a substantial hindrance occurs to the execution of duties• Cases where there is an objective and reasonable reason for not fully fulfilling the rolerequired for the job
With regard to the procedure for nominating candidates for Director and Audit & Supervisory
Board Member, the Company establishes the Nomination & Remuneration Advisory
Committee, chaired by an independent Outside Director, as an advisory body to the Board of
Directors in order to ensure objectivity, timeliness and transparency in the functions
concerning the nomination of Directors and Audit & Supervisory Board Members. The
Nomination & Remuneration Advisory Committee provides advice on matters related to draft
agenda for the General Meeting of Shareholders concerning the election and dismissal of
Directors and Audit & Supervisory Board Members, the election and dismissal of Executive
Directors, and their positions. Candidates for Audit & Supervisory Board Members aredeliberated on by the Audit & Supervisory Board prior to deliberation by the Board of
Directors, which is required to obtain the consent of the Audit & Supervisory Board.
(v)

Explanation of individual elections and nominations when the Board of Directors elects anddismisses senior management and nominates candidates for Directors and Audit &Supervisory Board Members based on (iv) above
The reasons for each election and nomination are stated in the notice of convocation of theGeneral Meeting of Shareholders.

[Supplemental Principle 3-1-3: Sustainability initiatives]
The Group aims to realize a sustainable society by engaging in business activities that respect all
stakeholders and contributing to solving social issues, based on the "Moriroku Group Sustainability
Policy."For the promotion of sustainability, we have defined priority sustainability issues based on theGroup’s medium- to long-term vision, the demand from the international community andstakeholders, and the business environment. We are strengthening our efforts by sorting them out
for all issues and for each measure in terms of “governance,” “strategy,” “risk management,” and“indicators and targets.”
In particular, we consider the response to climate change issues (including TCFD requirements)
and the strengthening of human capital as our top priority issues. We have set key KPIs for resolving
these issues and are accelerating efforts to achieve the targets.
Additionally, for investment in intellectual property (IP), the Group moves forward with expansion
and utilization of intellectual property by integrating the three strategies of business, R&D, and IP,
and takes measures to reduce risks of infringement on others’ IP as well as respecting others’ IP.
This way, the Group makes efforts to build the Group’s global IP structure, polish the skills of IP
human resources, and strengthen business competitiveness.
Throughout the Group, we will continue to strive to “create shared values (social and economic)”
through our business, and contribute to solving social issues through our business.

・ The sustainability policy and promotion system of the Company are disclosed on the“Sustainability” page of the Company’s website.
https://www.moriroku.co.jp/sustainability/management/index.html
・The Company’s measures for priority sustainability issues are disclosed on the “Sustainability”
page of the Company’s website.
https://www.moriroku.co.jp/sustainability/index.html
・For human capital investment, we are actively promoting diversity in appointment of personnel as
described in the Supplemental Principle 2-4-1.
[Supplemental Principle 4-1-1: Matters to be resolved by the Board of Directors and scope ofdelegation to management]
The Board of Directors is responsible for making decisions on management policies and otherimportant management matters, as well as important business operations that are required to beresolved by the Board of Directors under laws and regulations, the Articles of Incorporation, and theBoard of Directors Regulations.
On non-Board of Directors agenda, the Company has established criteria for the President, officers
in charge, etc. to make decisions, and they are set forth in the Administrative Authority Regulations.
[Principle 4-9: Criteria for determining the independence of independent Outside Directors and their
qualities]
In accordance with the requirements for Outside Directors stipulated in the Companies Act and the
independence criteria stipulated by the stock exchanges, the Company appoints independent
Outside Directors on the premise that they have sufficient independence to perform their duties as
Outside Directors from the Company's management, based on their background and relationshipwith the Company.
[Supplementary Principle 4-10-1: Establishment of Nomination Committee and Compensation
Committee]
The current composition of the Board of Directors consists of six Directors, four of whom are
independent Outside Directors.
With regard to the nomination and remuneration of Directors and Audit & Supervisory Board
Members, the Company has established a voluntary Nomination & Remuneration Advisory
Committee, chaired by an independent Outside Director, as an advisory body to the Board of
Directors, as it is necessary to strengthen the independence, objectivity and accountability of theBoard of Directors' functions.
The Nomination & Remuneration Advisory Committee consists of two Outside Directors and one
inside Director, and the majority of members are independent Outside Directors to enhance theindependence and objectivity of the committee.

[Supplemental Principle 4-11-1: Views on the balance of knowledge, experience and ability,
diversity and size of the Board of Directors as a whole]
In order to ensure a high level of decision-making on important business operations throughsubstantial discussions at the Board of Directors meetings, as well as supervision and auditing ofappropriate business operations, the Company appoints people as Directors and Audit &Supervisory Board Members who have the knowledge and experience that the Company considers
material for its Board of Directors. Independent Outside Directors include those who havemanagement experience at other companies.
A skills matrix that summarizes the knowledge and experience of the Company's Directors and Audit& Supervisory Board Members is included as a reference for this report.
[Supplemental Principle 4-11-2: Concurrent Officer position held by Directors and Audit &Supervisory Board Members at other listed companies]
The Company discloses the status of important concurrent positions of Directors and Audit &Supervisory Board Members and their candidates (including Officers of other listed companies)
every year through the Notice of Convocation of the General Meeting of Shareholders, Securities
Report and Corporate Governance Report.
[Supplemental Principle 4-11-3: Effectiveness assessment of the Board of Directors]
The Company conducts self-evaluation and analysis of the effectiveness of the Board of Directors
with the aim of improving the functions of the Board of Directors and enhancing its corporate value.
Self-evaluation and analysis were conducted in the following ways while receiving advice fromexternal organizations.
In January 2023, the Company conducted a questionnaire survey about all Directors and Audit &Supervisory Board Members, who are members of the Board of Directors. The Company secured
anonymity by having respondents directly send their answers to an external organization. Based onreports of aggregate results from the external organization, the outcome of the questionnaire wasreported at the Board of Directors meeting held in March 2023, and it has been confirmed that theeffectiveness of the Board of Directors of the Company has remained generally secured.
In the previous effectiveness assessment, we recognized issues such as securing enough time forconstructive discussion and the exchange of opinions. We worked on improvements such as
ensuring distribution of materials in advance, and we have seen some results.
We recognize future issues, including the enhancement of discussions on management strategies,
management resources, capital efficiency, etc., and follow-up on the progress of management
plans. These are ongoing issues from the previous year, and we will work to further enhance our
discussion.
Going forward, the Company will continue to make an effort to enhance the functions of the Board

of Directors by resolving issues detected in evaluating the effectiveness of the Board of Directors
and push forward with management aimed at sustainable enhancement of corporate value.
[Supplemental Principle 4-14-2: Training Policy for Directors and Audit & Supervisory Board
Members]
When internal Directors and Audit & Supervisory Board Members assume office, the Company
requires them to attend training courses to learn the legal obligations to be observed and the roles
and responsibilities to be fulfilled as Directors and Audit & Supervisory Board Members.
The Company also provides training after the appointment of Directors and Audit & Supervisory
Board Members to ensure that they acquire and appropriately update the necessary knowledge andpromote understanding of the roles and responsibilities they should fulfill.
[Principle 5-1: Policy on constructive dialogue with shareholders]
The Officer in charge of IR supervises all dialogue and strives to enhance dialogue in cooperation
with other management members. The department in charge of IR makes an effort to promote
people’s understanding of the status of business of the Company and enhance dialogue throughmeasures such as holding briefings on financial results and the medium-term management plan,
holding briefings for individual investors, and disclosing information on the Company’s website inaddition to information disclosure required by laws and regulations. Opinions acquired throughdialogue will be fed back to the Board of Directors and operational companies so as to help themmake business judgments.
Regulations for the prevention of insider trading are established to prevent the leakage of insider
information.
[Measures for realizing management mindful of capital cost and stock price] [English language
disclosure available]
The Company is implementing initiatives to enhance corporate value after understanding our costof equity capital. We explain our measures and their progress once a year.
・Documents on the Company’s initiatives to improve its corporate value are disclosed in the
explanatory materials for briefings on financial results on the “Investors” page of the Company’s website.
https://www.moriroku.co.jp/ir/library/presentation.html

2. Capital Structure
Percentage of shares held by foreigners

Less than 10%[Major shareholders]Name

Number of
Shares Held(%)

Custody Bank of Japan, Ltd. (Sumitomo Mitsui Trust Bank, Limited
Re-trust account, Mitsui Chemicals, Inc. Pension Trust Account)
The Master Trust Bank of Japan, Ltd. (Trust Account)

1,416,000

9.29

1,265,100

8.30

1,182,006

7.76

Shigeru Mori

976,060

6.40

Honda Motor Co., Ltd.

792,000

5.20

The Awa Bank, Limited

526,000

3.45

CHARLES SCHWAB FBO CUSTOMER

461,100

3.03

Custody Bank of Japan, Ltd. (Trust Account)

357,400

2.34

Toshiko Izome

276,476

1.81

Toyoko271,576

1.78

Moriroku Employee Shareholding Plan

Mori

Controlling Shareholder (excluding Parent Company)―

Parent Company

None

Supplementary Notes
The percentage of shares held is calculated by deducting the number of treasury stock (1,718,719 shares)
and is rounded off to the second decimal place.

3.

Corporate Attributes
Stock exchange listing and market
Tokyo Stock Exchange, Prime Section
classification
Fiscal Year End

March

Industry

ChemicalNumber of (consolidated)
employees at previous fiscal year- 1,000 or more
end(Consolidated) net sales for
100 billion yen or more but less than 1 trillion yen
previous fiscal year
Number of consolidated
subsidiaries at previous fiscal
10 companies or more but less than 50
year-end

4. Guidelines on Measures to Protect Minority Shareholders in Transactions with
Controlling Shareholders, etc.
―――

5. Other Special Circumstances That May Have Material Impact on Corporate
Governance―――II Status of Management Control Organization and Other Corporate Governance
Structures Related to Management Decision-Making, Execution and Oversight
1. Matters related to Institutional Structure & Organizational Management, etc.
Form of organization

Company with Audit & Supervisory Board Members[Directors]
Number of Directors stipulated in
Articles of Incorporation
Term of office of Directors
stipulated in Articles ofIncorporation
Chairperson of the Board of
Directors

9
1 yearPresident

Number of Directors

6

Election of Outside Directors

ElectedNumber of Outside Directors

4

Number of Outside Directors
designated as Independent
Officer4

Relationship with the Company (1)NameAttribute

Relationship with the Company*
a

b

c

d

e

f

g

h

i

j

k

Koichiro Shibata

LawyerFrom another
Kenichi Hirai
company
From another
Ryo Otsuka
company
From another
Hitomi Yokote
company* Selection items on the relationship with the Company* If each item applies to the person in the "present or recently," "○"; for in the "past," "△".
* If each item applies to a close relative in the "present or recently," "●"; for in the "past," "▲".
a
Executives of the listed company or its subsidiaryb
Executives or non-executive Director of the parent company of listed companyc
Executives of the affiliates of listed companydA person whose major business partner is a listed company or Executive thereofeMajor business partner of a listed company or Executive thereoffConsultants, accounting experts, or legal experts who receive a large amount of money or otherassets from a listed company other than officer compensationg
Major shareholders of a listed company (if the major shareholder is a corporation, Executive

h
i
j
k

thereof)
Executives (only the principal) of listed company's business partners (not falling under any of d, e
and f)
Executives (only the principal) of a party in a relationship of mutual appointment as Outside Officer
Executives (only the principal) of a party to which a listed company has made a donation
OthersRelationship with the Company (2)Name

Independent
Officer

Supplementary Noteon Conformity Items

Koichiro Shibata○―――

Kenichi Hirai○―――

Reason for Appointment
He has abundant experience andextensive knowledge as a lawyer.
He is particularly well versed in thefields of legal affairs and risk
management, and has led theNominating and Compensation
Advisory Committee as a member
from an objective and professional
standpoint.
It is expected that he will continue tosupervise the execution of the duties
by Directors, etc. from an
independent position, thereby
reinforcing the function of theCompany’s Board of Directors. The
Company therefore elected him as a
candidate for Outside Director again.
There are no personal or business
relationships, etc., that fall under theitems described in the independence
criteria established by the financial
instruments exchanges. He has
been designated as Independent
Officer based on the judgment that
he can ensure sufficient
independence to perform his duties
as Outside Director from theCompany's management.
He has been involved in corporate
management in the automotive andchemical industries and is wellversed also in the industries of theCompany. He has extensive
knowledge and experience
particularly in the fields ofaccounting and finance, and has
provided appropriate advice andRyo Otsuka○―――

suggestions to the Nominating andCompensation Advisory Committee
as a member from an objective andprofessional standpoint.
It is expected that he will continue tosupervise the execution of the duties
by Directors, etc. from an
independent position, thereby
reinforcing the function of theCompany’s Board of Directors. The
Company therefore elected him as a
candidate for Outside Director again.
There are no personal or business
relationships, etc., that fall under theitems described in the independence
criteria established by the financial
instruments exchanges. He has
been designated as Independent
Officer based on the judgment that
he can ensure sufficient
independence to perform his duties
as Outside Director from theCompany's management.
He has been serving as
Representative Director in a
manufacturing company for many
years and is also well versed in theindustries of the Company.
The Company expects that he willsupervise the execution of the duties
by Directors, etc. from an
independent position by utilizing his
abundant experience and extensive
knowledge that he has accumulated
to date in management in general,
thereby reinforcing the function of
the Company’s Board of Directors.
The Company therefore elected him
as a candidate for Outside Director
again.
There are no personal or business
relationships, etc., that fall under theitems described in the independence
criteria established by the financial
instruments exchanges. He has
been designated as Independent
Officer based on the judgment that
he can ensure sufficientHitomi Yokote○

independence to perform his duties
as Outside Director from theCompany's management.
She has abundant international
experience including in negotiations
with foreign governments andorganizations, as well as experienceand knowledge in a wide range offields including management, as theexecutive director of NPOs, andhuman resource development. It is
expected that she will supervise theexecution of the duties by Directors,
etc., from an independent position,
thereby reinforcing the function of
the Company’s Board of Directors.
The Company therefore elected her
as a candidate for Outside Director.
There are no personal or business
relationships, etc., that fall under theitems described in the independence
criteria established by the financial
instruments exchanges. She has
been designated as Independent
Officer based on the judgment that
she can ensure sufficient
independence to perform her duties
as Outside Director from theCompany’s management.

―――

Any voluntary committee equivalent
to Nomination Committee or
Yes
Compensation Committee
Status of establishment of voluntary committees, composition of members, and attributes of
Chairperson

Name ofCommittee
Voluntarycommittee
equivalent toNomination
Committee
Voluntarycommittee

NumberFull-time Internal Outside Outsideof
OthersMember Director Director Expert
Members

Chair

Nomination &Remuneration
Advisory
Committee

3

0

1

2

0

0

OutsideDirector

Nomination &Remuneration

3

0

1

2

0

0

OutsideDirector

equivalent toAdvisory
Compensation Committee
Committee

Supplementary Notes<Composition of committee members>
The Nomination & Remuneration Advisory Committee consists of up to five members appointed byresolution of the Board of Directors, the majority of whom are Outside Directors, and the Committee
Chair is selected from Outside Directors. The current Nomination & Remuneration Advisory
Committee consists of three members: Chaired by Koichiro Shibata (Outside Director) withmembers, Kenichi Hirai (Outside Director) and Takashi Kurita (Representative Director).
<Key deliberation items>• Matters concerning the formulation of policies and procedures for nominating candidates for
Directors and Audit & Supervisory Board Members• Matters concerning the election of candidates for Directors and Audit & Supervisory Board
Members• Matters concerning succession planning• Matters concerning the formulation of policies related to officers’ remuneration• Matters concerning the total amount of remuneration and proposed remuneration for eachindividual[Audit & Supervisory Board Members]
Establishment of Audit &Supervisory Board
Number of Audit & Supervisory
Board Members stipulated in
Articles of Incorporation
Number of Audit & Supervisory
Board Members

Established4

3

Status of cooperation among Audit & Supervisory Board Members, Accounting Auditors and Internal
Audit division
Audit & Supervisory Board Members exchange information regularly with the Internal Auditing
Division, and also exchange opinions with the Accounting Auditor and the Internal Audit Dept. on
their audit plans and results, etc., and conduct audits through mutual cooperation, whileconsidering the independence of each.

Election of Outside Audit &Supervisory Board Members
Number of Outside Audit &Supervisory Board Members
Number of Outside Audit &Supervisory Board Members
designated as Independent
Officer

Elected22

Relationship with the Company (1)NameAttribute

Fujio Furukawa

Tax accountant

Chiaki Tsuji

LawyerRelationship with the Company*a b c d e f

g h i

j

k l

m

* Selection items on the relationship with the Company* If each item applies to the person in the "present or recently," "○"; for in the "past," "△".
* If each item applies to a close relative in the "present or recently," "●"; for in the "past," "▲".
a
Executives of the listed company or its subsidiarybNon-executive Director or Accounting Advisor of the listed company or its subsidiaryc
Executives or non-executive Director of the parent company of listed companydAudit & Supervisory Board Member of the parent company of listed company
eExecutives of the affiliates of listed companyf
A person whose major business partner is a listed company or Executive thereofgMajor business partner of a listed company or Executive thereofhConsultants, accounting experts, or legal experts who receive a large amount of money or otherassets from a listed company other than officer compensationi
Major shareholders of a listed company (if the major shareholder is a corporation, Executive
thereof)j
Executives (only the principal) of listed company's business partners (not falling under any of f, g,or h)kExecutives (only the principal) of a party in a relationship of mutual appointment as Outside Officerl
Executives (only the principal) of a party to which a listed company has made a donationm Others
Relationship with the Company (2)Name

Fujio Furukawa

Independent Supplementary Note on
Officer
Conformity Items○―――

Reason for Appointment
He served in important positions at
the National Tax Agency for many
years, is familiar with finance andaccounting in addition to taxation,and has sufficient insight tosupervise overall management,
and we hope that he will utilize thisknowledge in auditing theCompany.
He has been designated as
Independent Officer because hehas no personal or business
relationships with the Company
that fall under the items describedin the independence criteria
established by the financial
instruments exchanges, nor does
he have any other special
interests.

Chiaki Tsuji○―――

She has a wealth of experienceand a high level of expertise
gained as a lawyer in Germany aswell as Japan. She hasinternational experience andadequate insights to supervise themanagement in general. The
Company has evaluated that she iscapable of performing audits ofmanagement and execution ofduties from an independent andfair position and has elected her asa candidate for Outside Audit &Supervisory Board Member.
She has been designated as
Independent Officer because she
has no personal or business
relationships with the Company
that fall under the items describedin the independence criteria
established by the financial
instruments exchanges, nor does
she have any other special
interests.

[Independent Officers]
No. of Independent Officers

6

Other matters concerning Independent Officers

The Company has designated all Outside Directors and Outside Audit & Supervisory Board

Members who meet the qualifications for Independent Officer as Independent Officers.

[Incentives]
Implementation status of
measures concerning provision of
incentives to Directors

Introduction of performance-linked remuneration system

Supplementary Note on Applicable Items

The performance-linked remuneration consists of bonuses and performance-linked stock-based
remuneration, and the ratio of performance-linked remuneration to total remuneration shall beapproximately 35%.
Bonuses are short-term incentive remuneration and are performance-linked monetary remunerationthat fluctuates based on the company's performance for each fiscal year (consolidated net sales
and consolidated operating income for the current fiscal year). The base amount of a bonus isdetermined by multiplying the basic remuneration amount by a coefficient set for each position
according to the degree of target achievement, etc., and is paid at a certain time each year.
Stock-based remuneration is performance-linked, restricted stock-based remuneration as anincentive for medium- to long-term performance and enhancement of corporate value, and is subject
to change based on corporate performance, management indicators, etc. It shall, in principle, be
granted in the first year of the medium-term management plan. The granting of shares during thetenure of office aims to promote further value-sharing with shareholders. The number of shares tobe granted is set as a percentage of the basic remuneration, and the financial indicator(consolidated net sales and consolidated operating income for the final year of the 13th Mediumterm Management Plan) and the sustainability indicator (enhancement of the reduction ratio of GHG
emissions and employee engagement) listed in the Medium-term Management Plan are used as
the conditions for the lifting of the restrictions on transfer upon achievement of the indicators.
We expect Outside Directors to provide us with objective opinions and suggestions from an outside
standpoint, and in light of their position, we have not introduced a performance-linked remuneration
system and pay only fixed basic remuneration to them.

Persons eligible for stock options

Supplementary Note on Applicable Items―――

[Directors' remuneration]
Status of disclosure (of individual
Director remuneration)

Individual remuneration is not disclosed.

Supplementary Note on Applicable Items

The Company discloses the total amount of remuneration to Directors and Audit & Supervisory
Board Members in the Annual Securities Report and Business Report.
Any policy for determining theamount of remuneration or its
calculation method

Yes

Disclosure of the policy for determining amount of remuneration or its calculation method

The Company positions the remuneration system for its officers as "a mechanism to secure,maintain, and motivate human resources essential for sustainable growth, based on the Company's
Basic Approach to Corporate Governance, in order to achieve sustainable enhancement ofcorporate value.” In addition, the level of officers’ remuneration is verified by comparison with thatof major companies of the same size as the Company and other indicators, while considering theCompany's business operations and environment.
The Company's remuneration for Directors (excluding Outside Directors) consists of fixed basic
remuneration, bonuses and stock-based remuneration, and the total amount of remuneration isdetermined by the Board of Directors based on the report of the Nomination & Remuneration
Advisory Committee within the scope of the total amount of remuneration approved by the General
Meeting of Shareholders. In addition, the President and Representative Director has beendelegated the authority to determine the fixed basic remuneration and bonuses for individual
Directors. The President and Representative Director determines the amount of fixed basic
remuneration for each Director and the amount of bonus based on the performance of each Director
for the relevant fiscal year, in line with the report of the Nomination & Remuneration Advisory
Committee. For stock-based remuneration, the Board of Directors will resolve the number of shares
to be allocated to each Director based on the report of the Nomination & Remuneration Advisory
Committee.

[Support Structure for Outside Directors (Outside Audit & Supervisory Board Members)]
1. Support Structure for Outside Directors
To the Outside Directors, Directors and the Secretariat provide timely explanations, as necessary,

of the contents of proposals, etc. to be submitted to the Board of Directors.
2. Support Structure for Outside Audit & Supervisory Board Members
For information-sharing, the full-time Audit & Supervisory Board Members provide explanations to
Outside Audit & Supervisory Board Members in advance regarding the contents of proposals, etc.
to be submitted to the Board of Directors, and report the results of on-site inspections and otherinformation obtained through daily audits to the Audit & Supervisory Board.

[Status of persons who have resigned as the President and Representative Director, etc.]
Name

Shigeru Mori

Title and
position

DutiesWork patternand conditions

Date ofresignation as
the President,
etc.

Advisor

Advice on mattersconsulted bymanagement

Part-time, withcompensation

2012/06/28

Number of persons who haveresigned as the President andRepresentative Director, etc.

Term of office

One year from
June 22, 2023

1

2. Matters Related to Business Execution, Auditing and Supervision, Nomination,
Remuneration Decision and Other Functions (Overview of Current Corporate
Governance System)[Board of Directors]
In order to enable substantive discussions at the Board of Directors meetings, the Articles ofIncorporation of the Company stipulate that the number of Directors shall be nine or less.
In accordance with the Board of Directors Regulations, the Board of Directors holds regularmeetings once a month and extraordinary meetings as necessary to make decisions on importantmanagement matters and supervise business execution. As of the date of submission of this report,
there are six Directors, four of whom are Outside Directors, and all four have been registered withthe financial instruments exchange as Independent Officer. In appointing Outside Directors who are
Independent Officers, the Company has made judgments assuming that sufficient independence
can be secured from the Company’s management to enable them to perform their duties as Outside
Officer, based on their career and relationships with the Company, in accordance with therequirements for Outside Directors stipulated in the Companies Act and the independence criteria
stipulated by the financial instruments exchanges. The Company expects Outside Directors tosupervise and assess the execution of duties by Directors and provide useful advice from a neutral

standpoint based on their expertise and experience, in order to ensure and improve theappropriateness and transparency of management decision-making.
Information related to the execution of duties by Directors is appropriately and reliably stored andmanaged, and is maintained in a condition where it can be viewed as necessary.
In FY2022, the Board of Directors met 17 times in total. Specific matters discussed by the Board of
Directors include various management issues such as management policies, corporate
governance, and sustainability, as well as priority business issues and matters related to businessexecution.
[Audit & Supervisory Board]
The Audit & Supervisory Board Members attend meetings of the Board of Directors and state theiropinions as well as monitor the legality and soundness of management in the execution of duties
by Directors based on audits by the Audit & Supervisory Board.
As of the date of submission of this document, we have three Audit & Supervisory Board Members,
two of whom are Outside Audit & Supervisory Board Members, both of whom have been reported
to the financial instruments exchange as Independent Officers. In appointing Outside Audit &Supervisory Board Members who are Independent Officers, the Company has made judgments
assuming that sufficient independence can be secured from the Company's management to enable
them to perform their duties as Outside Officer, based on their career and relationship with theCompany, in accordance with the requirements for Outside Audit & Supervisory Board Members
stipulated in the Companies Act and the independence criteria stipulated by the financial
instruments exchanges. In order to strengthen the function of monitoring the management, we
expect Outside Audit & Supervisory Board Members to ensure the adequacy and appropriatenessof the decision-making of the Board of Directors from their professional perspective and from a more
independent standpoint.
In order to ensure that the audits by Audit & Supervisory Board Members are conducted effectively,
we have established a system that allows Audit & Supervisory Board Members to conduct interviews
with Directors and employees about the execution of their duties, to inspect Approval Requests(ringisho) and other material documents related to the execution of business, and to promptly reportupon request to report on the execution of business.
[Executive Officer System]
The Company has introduced an Executive Officer System in order to divide the roles ofmanagement supervision and business execution functions.
As of the date of submission of this document, Executive Officers is currently five, including one
who concurrently serve as a Director.
[Nomination & Remuneration Advisory Committee]

With regard to the nomination and remuneration of Directors and Audit & Supervisory Board
Members, the Company has established a voluntary Nomination & Remuneration Advisory
Committee, chaired by an independent Outside Director, as an advisory body to the Board of
Directors, as it is necessary to strengthen the independence and objectivity, and accountability of
the Board of Directors’ functions.
As of the date of submission of this report, the Nomination & Remuneration Advisory Committee
consists of three members, two of whom are Outside Directors, and the majority of members are
Outside Directors to enhance the independence and objectivity of the Committee.
In FY2022, the Nomination & Remuneration Advisory Committee met eight times in total. Specificmatters discussed by the Nomination & Remuneration Advisory Committee include thedevelopment and operation of succession plans and important matters related to the nomination
and remuneration of officers.
[Accounting Audit]
The Company is audited by KPMG AZSA LLC.
Certified public accountants who performed the accounting audit of the Company are as follows:• Shinya Mikami• Atsushi Nagata[Outline of Contracts for Limitation of Liability]
Pursuant to the provisions of Article 427, Paragraph 1 of the Companies Act, the Company, each
Director (excluding those who are Executive Directors, etc.) and each Audit & Supervisory Board
Member have entered into an agreement to limit their liability for damages as provided for in Article
423, Paragraph 1 of the same Act.
The maximum amount of liability for damages under the said agreement shall be the higher of either
1 million yen or the amount stipulated by laws and regulations.

3. Reasons for Selecting Current Corporate Governance System
The Company's Board of Directors, including four Outside Directors, makes important management
decisions and supervises the execution of duties by each Director. As a company with the Audit &Supervisory Board, our Audit & Supervisory Board Members, including two Outside Audit &Supervisory Board Members independent of the Board of Directors, and the Audit & Supervisory
Board audits the execution of duties by each Director.
We believe that the supervision and auditing of business execution is functioning properly under thecurrent system, and that the current system is optimal.

III Implementation Status of Measures Concerning Shareholders and Other Interested
Parties
1. Status of Initiatives to Revitalize General Meeting of Shareholders and Facilitate
Exercise of Voting Rights

Supplementary Notes
Early dispatch of convocation
notices for General Meeting of
Shareholders

The Company has made efforts to send out the convocation
notice early and also post it on the Company’s website.

Exercise of voting rights byelectromagnetic means

The Company has implemented the exercise of voting rights
through electromagnetic methods.

Participation in the Electronic
Voting Platform and otherenhancements for institutional
investors to exercise their voting
rightsThe Company has participated in a voting rights platform for
institutional investors operated by ICJ, Inc.

Provision of Convocation Notice(Summary) in English

The Company has prepared an English translation of theConvocation Notice (Summary) and posted it on the
Company's website.

2. Status of IR Activities
Supplementary Notes

Explanation byRepresentative

Preparation and publication of
disclosure policy

The Company has prepared its IR policy andposted it on the “Investors” page of theCompany’s website.

Periodic briefings for individual
investors

We are currently refraining from participating in
events and briefings for individual investors dueto the status of COVID-19.

Periodic briefings for analysts
and institutional investors

The Company holds briefings on financial results
twice a year: for the full fiscal year and thesecond quarter (planned), and explanatory
materials are posted on the Company’s website. Yes
Additionally, the Company holds individual
meetings with institutional investors uponrequest.

Periodic briefings for overseas
investors

Although we do not hold briefings at present, wehave translated our financial results, mediumterm management plan, and corporate
governance reports into English and posted
them on our website. We will continue to makeefforts to enhance the distribution of informationfor overseas investors.

Posting of IR materials on theSummary of financial results, businessNonewebsite

Establishment of IR department(person in charge)

forecasts, and other timely disclosure
documents, Annual Report, and Convocation
Notice of General Meeting of Shareholders areposted on our website. (For details, please refer
to https://www.moriroku.co.jp/ir/index.html)
The IR Department is responsible.

3. Status of Initiatives on Respect for Stakeholder Position
Supplementary Notes
Stipulation of respect for
stakeholder position ininternal rules, etc.

In order to respond to the demands of our stakeholders, we haveestablished the "Moriroku Group Conduct Guidelines" as a
guideline for actions to be taken by each and every officer andemployee of the Group.

Implementation of activities
for environmental
conservation, CSR, etc.

In the business domains of Moriroku and its major operatingcompanies, we have set objectives and targets and are working to
reduce the environmental impact of our operations. We are also
striving to earn the trust of society by raising the environmental
awareness of all employees through education and communication
activities, and by actively participating in local environmental
activities.(For details, please refer tohttps://www.moriroku.co.jp/sustainability/environment/index.html)

Others[Expanding support system for work-life balance]
We have established an environment in which employees withindividual restrictions, such as childcare and nursing care, can workwith peace of mind and continue their careers. We have also
implemented measures to support employees in balancing workand family life, such as paid child nursing care leave and short-termcare leave, which exceed the legal standard (unpaid by legal
standard).
[Work style reform]
We are working to create an environment where employees canincrease their productivity and fully demonstrate their abilities,
regardless of where they work, by promoting flexible work styles,
such as the introduction of a flextime system and promotion of
telecommuting.

Ⅳ Matters related to Internal Control System, etc.
1. Basic Approach to Internal Control System and Status of Its Development
The Group, consisting of the Company and its subsidiaries, recognizes that internal controls are an
important factor for strengthening corporate governance, and is developing and operating aninternal control system in accordance with the basic policies set by the Board of Directors of theCompany.
1. A structure to ensure that the execution of duties by Directors and employees complies with laws
and regulations and the Articles of Incorporation[Basic Policy](1) We shall formulate the "Moriroku Group Conduct Guidelines" regarding compliance with laws
and regulations, internal rules, corporate ethics, etc. as conduct guidelines to be applied to
officers and employees of the Group, and shall ensure thorough dissemination.
(2) We shall establish and operate a "Compliance Consultation Desk" independent from thebusiness execution line as a contact point for reporting and consultation regarding compliancewith laws and regulations, internal rules, corporate ethics, etc. in the Moriroku Group.
(3) We shall monitor the status of compliance with laws and regulations, internal rules, corporate
ethics, etc. in the Group, and shall take the necessary corrective measures for any problems
identified as a result of such monitoring.
(4) Regarding the Group’s internal control system, our Internal Auditing Division shall conduct
internal audits on the status of development and operation of the system, and Audit &Supervisory Board Members shall monitor and verify the content of resolutions of the Board of
Directors and the status of development and operation by Directors.
[Summary of development and operation status](1) We have formulated the "Moriroku Group Conduct Guidelines" to be applied to officers andemployees of the Group, and have prepared and distributed a booklet on the Conduct
Guidelines to ensure thorough dissemination.
(2) The Company and its subsidiaries conduct compliance training on a regular basis to raisecompliance awareness.
(3) As a contact point for reporting and consultation regarding compliance with laws andregulations, etc. in the Group, we have set up the "Moriroku Group Internal Whistleblower
Hotline" both internally and externally, and regularly disseminate information on its
establishment and take action on matters reported or consulted.
(4) The Internal Auditing Division and Legal & Intellectual Property Division conduct audits ormonitor the status of compliance with laws and regulations, etc. in the Group, and take thenecessary corrective measures for any problems identified as a result of such audits ormonitoring.
(5) Regarding the Group's internal control system, the Internal Auditing Division audits the status

of internal control promotion operations by the divisions in charge of internal controls, and Audit& Supervisory Board Members verify the content of resolutions of the Board of Directors andthe status of development and operation of the internal control system.
2. A structure for storage and management of information related to the execution of duties byDirectors[Basic Policy]
Information related to the execution of duties by Directors shall be prepared, stored and managed
in the form of documents or electromagnetic records in accordance with the "Board of Directors
Regulations" and other internal rules related to document and information management, and astructure shall be established and operated to enable Directors and Audit & Supervisory Board
Members to view such information as necessary.
[Summary of development and operation status]
In accordance with the "Board of Directors Regulations" and other internal rules related to document
and information management, information related to the execution of duties by Directors isappropriately stored and managed by each department in charge, and is available for inspection by
Directors and Audit & Supervisory Board Members as necessary.
3. Regulations and other systems for managing risk of loss
[Basic Policy](1) We shall establish and operate rules and systems to manage risks related to the Group’sbusiness activities.
(2) We shall establish and operate a system to respond quickly and appropriately to accidents anddisasters that may have a significant impact on the Company or its subsidiaries.
(3) In response to changes in the internal and external business environment, we shall assess
risks and review the systems and operations for risk management and accident/disaster
response.
[Summary of development and operation status](1) We have established the "Moriroku Group Risk Management Basic Policy" and "Moriroku
Group Risk Management Regulations," and each company identifies, assesses and responds
to risks, periodically reviews risk assessment and priority risks, and periodically confirms thestatus of response to priority risks at each company accordingly.
(2) In order to respond quickly and accurately to accidents and disasters, we have established the"Domestic Crisis Management Regulations," "Overseas Crisis Management Regulations," andother internal regulations and guidelines for crisis management, and responds to accidents
and disasters accordingly. In addition, safety confirmation drills are conducted on a regularbasis every year.

4. A structure to ensure efficient execution of duties by Directors, etc.
[Basic Policy](1) We shall establish and operate rules and systems concerning the division of duties, authority,and decision-making for appropriate and efficient business execution in the Group.
(2) We shall formulate policies concerning business operations, including management policies,
medium-term plans, and annual plans for the Company and the Group, and ensure that thesepolicies are thoroughly communicated.
[Summary of development and operation status](1) The Company has established the "Administrative Authority Regulations," "Table of
Administrative Authorities," and "Division of Duties Regulations," and efficient decision-making
and execution of duties are conducted accordingly.
(2) A three-year medium-term plan for the Group and annual business plan for each Group
company have been established, and based on these plans, each company and department
have formulated and been executing specific business promotion plans accordingly.
5. A structure to ensure proper operations of the corporate group consisting of the Company and its
subsidiaries[Basic Policy](1) Regarding the execution of business by our subsidiaries, we shall organize contracts andoperate rules and systems that mandate prior approval by and reporting to the Company.
(2) We shall establish and operate a reporting system to promptly identify and respond to important
issues, compliance problems, etc. in our subsidiaries.
[Summary of development and operation status](1) Affiliated companies shall report to the Company as necessary on matters stipulated in the"Affiliated Company Management Regulations" and shall obtain the Company's approval on
important matters, thereby establishing a cooperation structure within the Moriroku Group.
(2) The Company and its major subsidiaries have adopted an Audit & Supervisory Board system
and are working to enhance the effectiveness of the system by having Audit & Supervisory
Board Members audit the execution of duties by Directors. Audit & Supervisory Board Members
attend meetings of the Board of Directors and other important meetings, and audit theexecution of duties by Directors in accordance with the audit policy and audit plan.
(3) Our Internal Auditing Division, in accordance with the "Internal Audit Regulations," oversees or
conducts audits, including on affiliated companies, and works to establish cross-sectional risk
management and compliance systems to ensure proper operations in an integrated manner.
(4) In order to identify and respond to important issues and compliance problems at affiliatedcompanies at an early stage, we have established a reporting system in the "Moriroku Group
Basic Regulations for Internal Controls" and receive reports from affiliated companies on aregular and timely basis accordingly.

6. A structure to ensure appropriateness and reliability of financial reporting[Basic Policy]
We shall establish basic policies for internal controls over financial reporting in the Group, anddevelop, operate, and assess the system necessary to ensure appropriateness and reliability of thefinancial reporting.
[Summary of development and operation status]
We have established the "Moriroku Group Basic Policy for Internal Controls over Financial
Reporting" and the "Moriroku Group Basic Regulations for Internal Controls over Financial
Reporting," and are developing, operating and assessing the system that is necessary to ensure
appropriateness and reliability of the financial reporting accordingly.
7. Matters concerning employees that Audit & Supervisory Board Members request to assist themin their duties[Basic Policy]
When requested by Audit & Supervisory Board Members, the Company shall assign Audit &Supervisory Board Member staff to assist Audit & Supervisory Board Members in their duties.
[Summary of development and operation status]
The Company has assigned one member of the Audit & Supervisory Board Member staff, who
performs duties under the direction and orders of Audit & Supervisory Board Members.
8. Securing independence of employees who are to assist the duties of Audit & Supervisory Board
Members from Directors and ensuring the effectiveness of instructions to such employees[Basic Policy](1) Audit & Supervisory Board Member staff who are to assist Audit & Supervisory Board Membersin their duties shall perform such assistance work under the direction and orders of Audit &Supervisory Board Members, and shall not be subject to the direction and orders of officers
and employees of the Company.
(2) Personnel change, evaluation, and disciplinary action regarding Audit & Supervisory Board
Member staff shall be determined with the prior consent of Audit & Supervisory Board
Members.
[Summary of development and operation status]
The Audit & Supervisory Board Member staff performs their duties under the direction and ordersof Audit & Supervisory Board Members, and any personnel change, evaluation, and disciplinary
action will be decided with the prior consent of Audit & Supervisory Board Members.
9. Reporting system to Audit & Supervisory Board Members[Basic Policy]

(1) Officers and employees of the Group shall report matters related to the execution of theGroup's business operations in accordance with internal rules or at the request of Audit &Supervisory Board Members.
(2) We shall ensure that Audit & Supervisory Board Members have the opportunity to attend
important meetings and shall grant them the authority to inspect the agenda materials, minutes
and other meeting documents.
(3) Our Internal Auditing Division shall report the internal audit results of the Company and its
subsidiaries to Audit & Supervisory Board Members.
(4) We shall establish and operate a system to ensure that those who report to Audit & Supervisory
Board Members are not treated disadvantageously for the reason that they made such reports.
[Summary of development and operation status](1) Officers and employees of the Group report matters related to the execution of business
operations in accordance with internal rules or at the request of Audit & Supervisory Board
Members.
(2) The Company ensures that Audit & Supervisory Board Members have opportunities to attend
meetings of the Board of Directors and the Board of Executive Officers, and grants them theauthority to inspect the agenda materials, minutes, and other meeting documents.
(3) Our Internal Auditing Division reports the internal audit results of the Company and its
subsidiaries to Audit & Supervisory Board Members.
(4) The Company has established internal regulations to ensure that officers and employees who
have made whistle-blowing reports are not treated unfavorably on the basis of such reports,
and operates accordingly.
10. Matters concerning treatment policy on expenses and debts arising from execution of duties by
Audit & Supervisory Board Members[Basic Policy]
We shall process expenses and debts arising from the execution of duties by Audit & Supervisory
Board Members, except in cases where it is recognized that such expenses and debts are notnecessary for the execution of Audit & Supervisory Board Members' duties.
[Summary of development and operation status]
Expenses incurred in the execution of duties by Audit & Supervisory Board Members are budgetedin the amount deemed necessary by Audit & Supervisory Board Members, and the Company bears
the actual expenses incurred.
11. Other structures to ensure effective audits conducted by Audit & Supervisory Board Members[Basic Policy](1) The President and Representative Director and other Directors shall hold meetings with Audit& Supervisory Board Members as necessary to ensure smooth communication.

(2) We shall establish and operate a system to ensure mutual cooperation between Audit &Supervisory Board Members, our Internal Auditing Division and Accounting Auditor, such as
exchanging information on audit results.
[Summary of development and operation status](1) Audit & Supervisory Board Members hold meetings with the President and Representative
Director and other Directors as necessary to foster communication.
(2) Audit & Supervisory Board Members hold monthly meetings with our Internal Auditing Divisionand quarterly meetings with the Accounting Auditor to exchange information and promotemutual cooperation.
12. A structure to eliminate antisocial forces[Basic Policy]
In order to cut off all relations with antisocial forces, we shall formulate, develop and operate a basic
policy for dealing with antisocial forces in the Group.
[Summary of development and operation status]
The Company has formulated the "Moriroku Group Basic Policy on Antisocial Forces" and the"Regulations for Dealing with Antisocial Forces," and is developing and operating a system to deal
with antisocial forces accordingly.

2. Basic Approach to Elimination of Antisocial Forces and Status of Its Development
1. Basic approach to eliminating antisocial forces
We have established the "Moriroku Group Basic Policy on Antisocial Forces" as follows: (1) Weshall cut off all relations, including transactions, with antisocial forces.
(2) We shall not provide any funds or conduct any backroom transactions with antisocial forces.
(3) We shall establish a system to deal with antisocial forces, and the entire organization will takeaction.
(4) We shall take appropriate measures against antisocial forces in cooperation with the policeand other external specialized organizations.
(5) We shall take legal action, both civil and criminal, against unreasonable demands fromantisocial forces.
2. Developing a structure to eliminate antisocial forces
The Company has established the "Regulations for Dealing with Antisocial Forces" and takes thefollowing measures:(1) Respond as an organization to unreasonable demands, etc. from antisocial forces, byappointing a Director in charge of general affairs as a chief officer to supervise the responseto antisocial forces, and assigning the general affairs division as the main department in charge

of managing the response to antisocial forces, as well as to assign a manager for preventing
unreasonable demands at each base.
(2) Investigate new business partners at the commencement of transactions and ongoing
business partners on a regular basis to ensure that they do not fall under the category ofantisocial forces, and conclude a contract or memorandum to the same effect that includes aclause to eliminate antisocial forces when concluding a transaction contract.
(3) Investigate employees to be hired to ensure that they do not fall under the category of antisocial
forces, and obtain a written pledge that includes a clause to eliminate antisocial forces uponjoining the company.

Ⅴ Others
1. Introduction of Takeover Defense Measure
Introduction of Takeover Defense
MeasureNone

Supplementary Note on Applicable Items―――

2. Other Matters Concerning Corporate Governance System, etc.
[Timely disclosure system]
The Group Management Philosophy and Conduct Guidelines uphold the following six principles:
Compliance, Respect for life and dignity, Customer satisfaction, Contribution to society, Progressive
spirit, and Total cooperation. We comply with domestic and international laws and regulations, andaim to be a trusted corporate group through fair and impartial corporate activities. Based on the
Philosophy and Guidelines, we have established and are operating an internal system toappropriately disclose corporate information in a prompt, accurate and fair manner, and will continue
to strengthen the system.
The officer in charge of IR and the IR Department shall be responsible for handling information as
Information Controller and Information Controlling Department, respectively, develop an internal
information communication and management system, and assess information, prepare materials,
and conduct timely disclosure. They shall do so in close cooperation with the Corporate Planning
Division, Human Resources Division, Administrative Division, Accounting & Finance Division,
Information System Division, Legal & Intellectual Property Division, Sustainability Promotion
Division, Corporate Communications Division, and administrative divisions of affiliated companies.
1.

Information related to decision-making facts and financial information, etc.

(1) Information on decision-making facts
The IR Department shall obtain in advance the agenda items of the Board of Directors' meetingsand other important meetings, and obtain the meeting minutes without delay after the completion of
the meetings. In addition, the Division consolidates information on matters for approval, investigates
whether or not there are any decision-making facts regarding the Company and its affiliates that are
subject to timely disclosure, reports the results to the Information Controller or Representative
Director, and, if applicable, immediately prepares materials for timely disclosure on the Timely
Disclosure Network (TDnet) and the Company's website.
(2) Information on financial results
The IR Department, led by the Accounting & Finance Division, prepares financial disclosurematerials (financial statements and quarterly summary of financial statements) jointly with the
Human Resources Division, Administrative Division, Legal & Intellectual Property Division, Internal
Auditing Division, and administrative divisions of affiliated companies. The results of suchinformation are reported to the Information Controller or Representative Director, and the IR
Department shall disclose the information on TDnet and the Company's website in a timely mannerbasically after a resolution by the Board of Directors.
2. Information on the fact of event
Accidents, disasters, and other incidents that occur at the Group companies are reported from thedepartment in charge of the Group and the plant or other business office where the incident occurred
to the Human Resources Division, Administrative Division, Accounting & Finance Division,
Information System Division, Legal & Intellectual Property Division, Sustainability Promotion
Division, Corporate Communications Division, or administrative divisions of affiliated companies.
Such information is consolidated by the IR Department, which investigates whether or not there areany events that are subject to timely disclosure by the Company and its affiliates, reports the results
to the Information Controller or Representative Director, and if applicable, immediately preparesmaterials for timely disclosure on TDnet and the Company's website.

[Diagram: Reference Document]

General Meeting of Shareholders
Appointment
and dismissal

Nomination &Remuneration
Advisory Committee

Appointment
and dismissal

Seek
adviceProvideadviceBoard of Directors
Four of six Directors are
Outside Directors
Supervision
Selection anddismissal

Instruction

Members are Outside Audit& Supervisory Board
Members(Report,Cooperation)
Accounting
audit(Cooperation)

Auditing firm

ReportInternal Auditing
Division

Approve
important matters
Management
guidance

Business
Audit & Supervisory Board
audit
Two of three Audit &Accounting
Supervisory Board
audit

ReportRepresentative
Director, President
and CEO

Appointment
and dismissal(Report, Cooperation)

Prior
consultation
After-the-fact
reporting

Subsidiaries, etc. (General Meeting of Shareholders, Board of Directors, etc.)

[Diagram: Overview of Timely Disclosure System]

Events

Decisions

Information on
financial results

Information-supervising
departments

Information-supervising
departments

Accounting & Finance
Division

Information Controlling Department (IR Department)
Decide whether
necessary or not

Information Controller (Officer in charge of IR)
Elevated to

TDnet
EDINET

Disclosure Instruction

Judgment by the Board of Directors(Judgment by the President and Representative Director on the event)

Information Disclosure (Stock Exchange/the Financial Services Agency/Website)[Knowledge and experience of the Company's Directors and Audit & Supervisory Board Members]
Knowledge and Experience of Officers
Corporate
Management

Legal & Risk
Management

Takashi Kurita○○

Hidehito Monji○

Audit &
Supervisory
Board Member

Directors

Name

Finance &Accounting

GlobalTechnology &Development

Sales &
Planning

○

○

○

○

Koichiro Shibata

OutsideIndependent

Kenichi Hirai

OutsideIndependent○

Ryo Otsuka

OutsideIndependent○○

Hitomi Yokote

OutsideIndependent○○

Koichi Tada

○

○
○

○

○

○
○

OutsideIndependent○

Chiaki Tsuji

OutsideIndependent○

Sustainability○○

Fujio Furukawa

Note:

Production &Quality

○

○
○

○

○
○

○

○

The above list does not represent all the knowledge and experience of Directors and Audit &Supervisory Board Members.

[Sustainability promotion system]