Corporate Governance
Last Updated: June 28, 2024

OBIC Co., Ltd.
Shoichi Tachibana
President and COO
Contact: Tomonori Anan
Executive Officer (Administrator of Business Planning Office)
TEL: +81-3-3245-6510
Securities Code: 4684
https://www.obic.co.jp/
The corporate governance of OBIC Co., Ltd. (the “Company”) is described below.

Ⅰ

Basic Views on Corporate Governance, Capital Structure, Corporate Attributes and Other
Basic Information
1. Basic Views
The Company understands that strengthening risk management and guaranteeing transparency in management
are vital to continuous improvement of corporate value. The Company is a company with an Audit & Supervisory
Board through which, along with the Board of Directors, it monitors risks related to business. It has alsoestablished a voluntary Nomination & Remuneration Advisory Committee mainly comprised of outside Directors,
and works to strengthen managerial supervision functions. The Company also conducts accounting andoperational audits through internal audits and works on strengthening its ability to take remedial action while
ensuring compliance.
[Reasons for Non-compliance With the Principles of Japan’s Corporate Governance Code]
The Company complies with all principles of the Japan’s Corporate Governance Code.
[Disclosure Based on the Principles of Japan’s Corporate Governance Code] Updated[Principle 1.4 Shares Held as Cross-Shareholdings]
Policy on cross-shareholdings
The Company does not maintain ownership of cross-shareholdings as a matter of basic policy, unless it hasotherwise deemed that such holdings contribute to improving corporate value over the medium and long terms
upon having comprehensively taken into account factors that include necessity per business policy and rationaleof such shareholdings. The Company currently does not maintain ownership of any cross-shareholdings.
Verifying appropriateness regarding ownership of cross-shareholdings and standards for exercise of voting rights
The Company continues to verify appropriateness regarding ownership of respective shareholdings when
maintaining ownership of cross-shareholdings. Meanwhile, the Company exercises voting rights upon having
comprehensively assessed whether or not the exercise of voting rights will facilitate sustainable growth of theCompany and the investee, and whether or not it will give rise to improvement of corporate value over the
medium and long terms.
[Principle 1.7 Related Party Transactions]
In seeking to avoid harming its own interests and the common interests of its shareholders, the Company has
established the Regulations of the Board of Directors and other such rules essentially mandating prior approvalof the Board of Directors with respect to transactions between the Company and its Directors.

-1-

In addition, at the end of each fiscal year we confirm the existence of related parties and transactions involving
all officers as well as major shareholders and others when applicable.
When a transaction occurs between related parties, the transaction results are disclosed in the annual securities
report pursuant to the relevant laws and regulations. Terms and conditions for related party transactions are
determined in the same way as terms and conditions for general transactions pursuant to standard provisions.
[Supplementary Principle 2.4.1 Ensuring Diversity in Promotion of Core Human Resources]
Views on ensuring diversity
The Company deems that growth of each and every employee and increasing diversity make it possible toleverage mutual synergies. Guided by its corporate philosophies, “Company growth starts with employee growth”
and “Innovation ~Destruction and Creation~,” the Company strives to create environments where all employees
are able to work over the long haul while achieving growth by implementing employee training as well as
establishing a personnel system that enables flexible work styles. In promoting core human resources, theCompany seeks to create environments that enable women to play active roles by disclosing the plan of action
for general employers pursuant to Japan’s Act on Promotion of Female Participation and Career Advancement in
the Workplace.
The Company is particularly committed to hiring new graduates and accordingly deems that training employees
from scratch through work with its client companies across various types of business and industries in Japan
helps to ensure diversity, thereby contributing to its sustainable growth. Therefore, the Company has not set goals
such as those entailing promotion of foreign nationals and midcareer hires to middle managerial positions.
Voluntary and measurable goals for ensuring diversity and the current conditions
As of fiscal 2024, the ratio of women in managerial posts is 11.2%, however, we aim to increase it to 15% ormore in the future.
For details regarding the Company’s initiatives to promote diversity, please refer to the following website.
https://www.obic.co.jp/e/diversity.html[Principle 2.6 Functioning as Asset Owner of Corporate Pension Funds]
This is not applicable because the Company has not adopted a corporate pension fund.
[Principle 3.1 Enhancement of Information Disclosure](1) Company objectives (e.g., management philosophy), management strategies and business plans
The Company enlists a management philosophy of seeking to always contribute to society based on its useroriented approach.
The Company values the crucial role of its longstanding system of in-house development and direct sales,
and accordingly provides total support for corporate information systems encompassing configuration andoperation. To such ends, the Company enlists its one-stop solution services which seamlessly encompass
everything from consulting on initial system selection through installation and setup, day-to-day operation,and the provision of information. Going forward, the Company will continue to actively promote structuralreforms, thereby enhancing its sales capabilities and increasing its productivity.
In addition, the Company believes that it is important for management to always be aware of earnings inorder to realize stable corporate growth over the medium and long terms. Having set a target for return on
equity (ROE) of 10% or higher, the Company will strive to sustain and persist with efforts toward such ends.
(2) Basic views and policies on corporate governance based on each of the principles of the Code (final proposal)
The basic views and policies are identical to those listed under “Basic Views” of this report.

-2-(3) Policies and procedures of the Board of Directors in determining the remuneration of the senior management
and Directors
The Company has adopted a performance-linked remuneration system with respect to remuneration of thesenior management and Directors in order to facilitate further improvement of the Company’s businessperformance by providing them with greater incentive to improve business performance. However, outside
Directors and Audit & Supervisory Board Members are entitled to basic remuneration exclusively due totheir position independent of business execution.
The Board of Directors makes decisions on amounts of remuneration for Directors within a range determinedat the General Meeting of Shareholders, based on the results of consultation with the Nomination &Remuneration Advisory Committee, which is a voluntary advisory body in which outside Directors make up
a majority of the members. The amounts of remuneration for Audit & Supervisory Board Members arecalculated per discussions among the Audit & Supervisory Board Members.
(4) Policies and procedures of the Board of Directors in the appointment/removal of the senior management andthe nomination of Director and Audit & Supervisory Board Member candidates
The Company’s policy on appointing senior management as well as nominating Director and Audit &Supervisory Board Member candidates is that of selecting professionals equipped with outstanding personalqualities, insight and leadership, and who have specialized skills and extensive work experience as necessary
for the Company to achieve sustainable growth.
When determining nominations of Director and Audit & Supervisory Board Member candidates, the Boardof Directors resolves election proposals to be submitted to the General Meeting of Shareholders, based on
the results of consultation with the Nomination & Remuneration Advisory Committee, which is a voluntary
advisory body in which outside Directors make up a majority of the members (upon having gained
preliminary consent of the Audit & Supervisory Board with respect to Audit & Supervisory Board Member
candidates).
Decisions on appointment/removal of senior management are made upon having taken into account factorsthat include the aforementioned policy as well as their achievements during their term of office and the statusof their business execution. The Board of Directors comprehensively assesses such matters based on the
results of consultation with the Nomination & Remuneration Advisory Committee, which is a voluntary
advisory body in which outside Directors make up a majority of the members.
(5) Explanations with respect to individual appointments and removals of the senior management andnominations of Director and Audit & Supervisory Board Member candidates based on (4) above by the Boardof Directors.
The Company discloses professional backgrounds and reasons for appointment/removal of senior
management, and nominations of Director and Audit & Supervisory Board Member candidates on eachoccasion through Convocation Notice and other such channels.
[Supplementary Principle 3.1.3 Initiatives on Sustainability]
Guided by our corporate philosophies, “Company growth starts with employee growth” and “Innovation~Destruction and Creation~,” the Company aims to achieve sustainable growth for society and itself by engaging
in key priorities related to our business and corporate activities. As an organization serving directly under the
President and COO, the Sustainability Promotion Committee spearheads cross-departmental efforts to take on
key priorities related to the environment, society and corporate governance.
For details regarding the Company’s sustainability management, please refer to the following website.
https://www.obic.co.jp/e/Sustainability_Management.html
For details regarding the Company’s value creation process that takes into account non-financial factors such as
investment in human capital and intellectual capital, please refer to the “Integrated Report” below.
https://www.obic.co.jp/e/ir/reports.html-3-

In addition, the Company acts in accordance with recommendations of the Task Force on Climate-related
Financial Disclosures (TCFD) by strengthening its governance related to climate change, drawing up strategies
and goals based on analysis of risks and opportunities, and strives to disclose information on financial effects inthat regard.
For details regarding the Company’s governance, strategies, risk management, and goals related to climate change,
please refer to the following website.
https://www.obic.co.jp/e/sustainability/environment/environment_climatechange.html[Supplementary Principle 4.1.1 Scope of Matters Delegated to Management]
The Company stipulates matters to be resolved by the Board of Directors in its Regulations of the Board of
Directors, and the Board of Directors resolves matters of substantial importance to management, in addition tomatters prescribed by laws, regulations and the Company’s Articles of Incorporation. Moreover, the Company
has established separate internal rules whereby decision-making authority is delegated to management dependingon the extent of the transaction or duty, and depending on the nature of the matter.
[Principle 4.9 Independence Standards and Qualification for Independent Outside Directors]
The Company selects individuals equipped with extensive experience and insight in various fields upon having
deemed that their independence from management is assured, pursuant to regulations on independence such as
those stipulated in regulations of the Tokyo Stock Exchange.
[Supplementary Principle 4.10.1 Views on Independence of Nominating Committee and Remuneration
Committee, Etc.]
The Company has established the Nomination & Remuneration Advisory Committee as a voluntary advisory
body of the Board of Directors in order to heighten transparency and objectivity in the process of nominating
Director and Audit & Supervisory Board Member candidates and determining Director remuneration. The Boardof Directors makes decisions on nomination of Director and Audit & Supervisory Board Member candidates andDirector remuneration, based on the results of consultation with the Nomination & Remuneration Advisory
Committee, which is a voluntary advisory body in which outside Directors make up a majority of the members(upon having gained preliminary consent of the Audit & Supervisory Board with respect to Audit & Supervisory
Board Member candidates).
[Supplementary Principle 4.11.1 Overall Balance, Diversity and Size of the Board of Directors]
To ensure the effectiveness of the Board of Directors as a whole, the Company’s Articles of Incorporation
stipulate that the number of Directors (including outside Director(s)) is 13 or fewer. Membership of the Board of
Directors is to align with the Company’s basic policy of seeking balance taking into account a variety of attributes
such as knowledge, experience, ability and independence, with its membership consisting of a combination ofboth male and female inside Directors who are well-versed in the Company’s business operations, and outside
Directors equipped with extensive experience and broad insight external to the Company.
The Company’s policy on nominating Director candidates is that of selecting professionals equipped withoutstanding personal qualities, insight and leadership, and who have specialized skills and extensive work
experience as necessary for the Company to achieve sustainable growth. The Company has furthermore released
its “Corporate Guide 2021” containing a Skill Matrix listing attributes of the respective Directors such that
include their knowledge, experience, and abilities. In addition, when determining nominations, the Board of
Directors resolves election proposals to be submitted to the General Meeting of Shareholders, based on the resultsof consultation with the Nomination & Remuneration Advisory Committee, which is a voluntary advisory bodyin which outside Directors make up a majority of the members.
Corporate Guide 2021
https://www.obic.co.jp/ir/pdf/security_report/54cg.pdf-4-

[Supplementary Principle 4.11.2 Concurrent Positions Held by Officers]
A Director or Audit & Supervisory Board Member may hold a concurrent position as an officers of another listedcompany to the extent that such position does not constitute an impediment to fulfilling his or her responsibilities
as a Director or Audit & Supervisory Board Member.
The Company discloses concurrent positions held at other listed companies on each year in the Convocation
Notice.
[Supplementary Principle 4.11.3 Analysis and Evaluation of the effectiveness of the Board of Directors andDisclosure of Such Results]
The Company exchanges opinions about the effectiveness of the Board of Directors through individual
consultations with outside officers. The Company held discussions at the Board of Directors based on the resultsof those consultations, and has determined that the effectiveness of the Board of Directors is largely secure.
Summaries of the evaluation results are as follows.
 The Company’s Board of Directors is well balanced and comprised of members who understand theCompany’s management philosophy and policies and have a wide variety of experiences and knowledge. It
aims to carry out appropriate decision making and supervise the execution of operations.
 Free and active discussion as well as constructive exchange of opinions are conducted by all of the attending
Directors including two outside Directors.
 The Nomination & Remuneration Advisory Committee, which is a voluntary advisory body, also receives
appropriate advice and proposals from outside Directors, and works effectively.
Based on these evaluation results, the Company is working to improve the effectiveness of the Board of Directors
even further.
[Supplementary Principle 4.14.2 Policy for Training of Officers]
The Company strives to sustainably expand knowledge, experience, and abilities of its respective Directors andAudit & Supervisory Board Members by providing and arranging training opportunities encompassing business
management and legal knowledge necessary for them to execute their duties, and by providing financial support
for associated expenses.
In addition, the Company provides outside officers with information and explanations of issues in a manner thatfacilitates a better understanding of the Company’s business.
[Principle 5.1 Policy for Constructive Dialogue With Shareholders]
The Company seeks to promote constructive dialogue with its shareholders by carrying out investor relations(IR) activities primarily through the Business Planning Office.
The Company holds financial results briefing sessions for institutional investors and analysts twice per year, andhas its representatives furnish explanations and conduct question and answer sessions. In addition, the Business
Planning Office arranges individual meetings whereby it seeks to provide timely feedback to the Directors andseeks to share information with them particularly with respect to shareholder views gleaned through dialogue.
The Company seeks to prevent divulgence of insider information when conducting dialogue with its shareholders.

-5-[Measures to Promote Management With an Awareness of Cost of Capital and Share Price]
The Company believes that by ensuring a solid management foundation through growth in business performanceand continuing stable reinvestment and shareholder returns over the medium and long term, it can enhance
corporate value and have it appropriately reflected in the share price.
In terms of capital efficiency, our calculated cost of equity based on the Capital Asset Pricing Model (CAPM)
has generally remained below 10%, and the Company has been able to maintain a return on equity (ROE) of 15%
or higher.
Furthermore, market evaluation has shown a stable price-to-book ratio (PBR) of five times over the most recent
five years.
The future policies and initiatives of the Company are as follows.
Application of selection and concentration strategies to businesses to enhance added-value proposition
capability and productivity to increase the profitability of the Company’s main business.

Active investment in areas that lead to business growth over the medium and long term, including investment
in human resources training, cloud business, and the application and registration in business model patents
aimed at the accumulation of knowhow specific to each business and industry.

Strengthening of long-term, stable and continuous shareholder returns, mainly through dividends, in linewith growth in business performance.

The Company will continue to engage in dialogue with shareholders and investors to gain a deeper understandingof market needs and promote management with an awareness of cost of capital and share price.

-6-2. Capital Structure
Foreign Shareholding Ratio

30% or more

[Status of Major Shareholders] Updated
Name

Number of Shares Owned(Shares)

Shareholding Ratio(%)

MN Holdings Co., Ltd.

16,909,000

19.22

The Master Trust Bank of Japan, Ltd.

12,324,000

14.00

Custody Bank of Japan, Ltd.

6,029,407

6.85

Masahiro Noda

2,881,000

3.27

Mizuki Noda

2,781,000

3.16

JP Morgan Chase Bank 385632

2,374,168

2.69

SSBTC Client Omnibus Account2,032,504

2.31

STATE STREET BANK WEST CLIENT –TREATY 505234

1,598,194

1.81

NORTHERN TRUST CO.(AVFC) RE
FIDELITY FUNDS.

1,063,478

1.20

DANOX Co., Ltd.

1,050,000

1.19

Controlling Shareholder (except for Parent)―――

ParentN/A

Supplementary Explanation―――

3. Corporate Attributes
Listed Stock Market and Market Section

Tokyo Stock Exchange Prime Market

Fiscal Year-End

MarchType of BusinessInformation & Communication

Number of Employees (Consolidated) at Endof the Previous Fiscal Year

1,000 or more

Net Sales (Consolidated) for the Previous
Fiscal Year

From ¥100 billion to less than ¥1 trillion

Number of Consolidated Subsidiaries at Endof the Previous Fiscal Year

Less than 10

4. Policy for Measures to Protect Minority Shareholders in Conducting Transactions With Controlling
Shareholder―――

5. Special Circumstances Which May Have Material Impact on Corporate Governance
The Company has no matters to report.

-7-

Ⅱ Business Management Organization and Other Corporate Governance Systems Regarding
Decision-making, Execution of Business, and Supervision in Management
1. Organizational Composition and Operation
Organization Form

Company with Audit & Supervisory Board Members[Directors]
Maximum Number of Directors Stipulated in
Articles of Incorporation

13

Term of Office Stipulated in Articles ofIncorporation

1 yearChairperson of the Board

President

Number of Directors Updated

7

Appointment of Outside Directors

Appointed

Number of Outside Directors

3

Number of Independent Officers Designated from
Among Outside Directors

3Outside Directors’ Relationship With the Company (1)NameAttribute

Yasumasa Gomi

From another company

Takashi Ejiri

Attorney at law

Mime Egami

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 presently falls or has recently fallen under the category;“△” when the Director fell under the category in the past;“●” when a close relative of the Director presently falls or has recently fallen under the category; and“▲” when a close relative of the Director fell under the category in the past
Executive (a person who executes business; hereinafter, the same) of the Company or its subsidiaryNon-executive director or executive of the parent of the Company
Executive of a fellow subsidiary of the Company
Party whose major client or supplier is the Company or an executive thereof
Major client or supplier of the Company or an executive thereof
Consultant, accounting professional or legal professional who receives a large amount of monetaryconsideration or other property from the Company besides compensation as a Director
g Major shareholder of the Company (or an executive of the said major shareholder if the shareholder is a
corporation)h Executive of a client or supplier of the Company (which does not correspond to any of d., e., or f.) (theDirector himself/herself only)
i Executive of a corporation to which outside officers are mutually appointed (the Director himself/herself
only)
j Executive of a corporation that receives a donation from the Company (the Director himself/herself only)
k Other
a
b
c
d
e
f

-8-

Outside Directors’ Relationship With the Company (2)Name

Yasumasa Gomi

Designation as
Independent
Officer○

Supplementary
Explanation of
the Relationship

Reasons for Appointment
Outside Director Yasumasa Gomi has extensive
knowledge and experience in management
through his many years of service in banks andsecurities companies. The Company expects
that he will provide direction to business andchecking function in an objective way,
independent from the managers running thebusiness, utilizing his extensive knowledge andachievements. Therefore, the Company has
appointed him as outside Director. In addition,
he will continue to be appointed as a memberof the Nomination & Remuneration Advisory
Committee after his election.

―――

The Company has designated him as anindependent officer upon having determinedthat he is unlikely to have conflicts of interest
with general shareholders given that grounds
stipulated in the Enforcement Rules for
Securities Listing Regulations and the
Guidelines for the Listing Management are notapplicable to him.

Takashi Ejiri○

Outside Director Takashi Ejiri has been
involved in corporate legal affairs as attorney atlaw for many years, and has extensive
knowledge and achievements as legal expert.
The Company expects that he will provide
direction to business and checking function in
an objective way, independent from the
managers running the business, utilizing his
extensive knowledge and achievements.
Therefore, the Company has appointed him as
outside Director. In addition, he will continue
to be appointed as a member of the Nomination& Remuneration Advisory Committee after hiselection.

―――

The Company has designated him as anindependent officer upon having determinedthat he is unlikely to have conflicts of interest
with general shareholders given that grounds
stipulated in the Enforcement Rules for
Securities Listing Regulations and the
Guidelines for the Listing Management are notapplicable to him.

-9-

Name

Designation as
Independent
Officer

Mime Egami

Supplementary
Explanation of
the Relationship○―――

Reasons for Appointment
Outside Director Mime Egami has diversified
and multifaceted experience ranging frominternational finance to the promotion ofadvanced technology development andmanagement auditing. The Company expects
that she will provide direction to business andchecking function in an objective way,
independent from the managers running thebusiness, utilizing her extensive knowledge andachievements. Therefore, the Company has
appointed her as outside Director.
The Company has designated her as anindependent officer upon having determinedthat he is unlikely to have conflicts of interest
with general shareholders given that grounds
stipulated in the Enforcement Rules for
Securities Listing Regulations and the
Guidelines for the Listing Management are notapplicable to her.

Voluntary Establishment of Committee(s)Equivalent to Nominating Committee orRemuneration Committee

Established

Committee’s Name, Composition, and Chairperson’s Attributes
Committee Equivalent toNominating Committee

Committee Equivalent toRemuneration Committee

Committee’s Name

Nomination & Remuneration
Advisory Committee

Nomination & Remuneration
Advisory Committee

Total Committee Members

33

Full-time Members

00Inside Directors

11Outside Directors

22

Outside Experts

0

0

Other

0

0

Chairperson

Inside Director

Inside Director

Supplementary Explanation
The Company has established the Nomination & Remuneration Advisory Committee as a voluntary advisory
body of the Board of Directors in order to heighten transparency and objectivity in the process of nominating
Director and Audit & Supervisory Board Member candidates and determining Director remuneration.

- 10 -

The Board of Directors makes decisions on nomination of Director and Audit & Supervisory Board Member
candidates and Director remuneration, based on the results of consultation with the Nomination & Remuneration
Advisory Committee, which is a voluntary advisory body in which outside Directors make up a majority of themembers (upon having gained preliminary consent of the Audit & Supervisory Board with respect to Audit &Supervisory Board Member candidates).
[Audit & Supervisory Board Members]
Establishment of Audit & Supervisory Board

Established

Maximum Number of Audit & Supervisory
Board Members Stipulated in Articles ofIncorporation

4

Number of Audit & Supervisory Board Members

3

Cooperation among Audit & Supervisory Board Members, Accounting Auditor and Internal Audit
Department Updated
When it comes to audits of the Company and its subsidiaries and associates, the Company believes it is extremely
important to coordinate the three types of audit (internal audit, Audit & Supervisory Board Members’ audit, andexternal accounting audit) for the sake of improving audit quality and efficiency, and ensuring audit effectiveness.
The Audit & Supervisory Board plays a central role in efforts undertaken by the Internal Audit Department andthe Accounting Auditor to streamline and enhance audits. This entails regularly setting up forums for exchanging
opinions and information, drawing up respective audit plans (policy, implementation timeline, methodology, etc.),reporting on the status and results of audits as well as evaluating the appropriateness thereof, and coordinatingtasks and engaging in discussions regarding matters that include considering measures for addressing issues thathave been raised.
The Company’s internal audits involve conducting accounting and operational audits enlisting three to sevenindividuals, coordinated between the Accounting Department and the Audit & Supervisory Board with theBusiness Planning Office playing a central role. Whereas the accounting audits entail investigating compliancewith accounting standards and internal rules, the operational audits entail setting timely matters pertaining tomanagement as audit priorities and accordingly seeking to strengthen the Company’s practical ability to takeremedial action by investigating risks associated with business particularly in terms of social norms andcommercial practices. The internal audits play a crucial role in the Company’s management in that they involve
reporting internal audit findings to the Board of Directors, Audit & Supervisory Board, and the Accounting
Auditor, explaining issues that have been raised to the department subject to audit, promptly exploring
countermeasures, and applying such solutions to ensuring compliance and operational improvements.
The Audit & Supervisory Board consists of three members including two outside Audit & Supervisory Board
Members and serves to strengthen the management monitoring function. Its members conduct daily audits, attend
important meetings including those of the Board of Directors, and provide advice and recommendations as
appropriate. The Audit & Supervisory Board works smoothly, seeking to ensure objectivity and neutrality. Audit& Supervisory Board Member Kenta Nagao holds the qualification of certified public accountant, and has
considerable knowledge related to finance and accounting. In the current fiscal year, the Company holds the Audit& Supervisory Board meetings once a month in principle. Extraordinary meetings of the Audit & Supervisory
Board are also held as necessary. The Audit & Supervisory Board conducts audits based on annual audit plans.
The main matters for consideration by the Audit & Supervisory Board include examining attendance andresolution methods at meetings of the Board of Directors, auditing the status of Directors and Executive Officers
in executing their duties, examining the operational status of the internal control system, and querying the
Accounting Auditor about its audit methodology and audit findings, as well as examining the content thereof. In
addition to the aforementioned activities, the full-time Audit & Supervisory Board Members also attend important
meetings of the Management Strategy Committee and other such forums to collect information, and otherwise
routinely seek opinions from officers in charge of operations and employees regarding matters that include thestatus of their execution of business and duties. They also conduct on-site visits of major business sites andobserve fiscal year-end audits of the audit firms handling financial results audits. They accordingly seek

- 11 -

consensus among all members of the Audit & Supervisory Board regarding corporate status and strive to enhanceaudits of the Audit & Supervisory Board.
The Company has asked Ernst & Young ShinNihon LLC to perform the accounting audit. The audits are
performed across the OBIC Group (the “Group”) in environments conducive to promptly addressing matters suchas changes in accounting systems. Two certified public accountants affiliated with Ernst & Young ShinNihon
LLC, Makoto Ishii and Yohei Ikeda, have undertaken accounting audit services on behalf of the Company. Audit
attestation service was assisted by 17 persons, comprising four certified public accountants and 13 other persons.
Going forward, the Company will keep striving to strengthen its corporate governance in a manner that involves
seeking more extensive coordination among the three types of audit to improve audit feasibility with the aim offurther developing a sound management system across the entire Group.
Appointment of Outside Audit & Supervisory
Board Members

Appointed

Number of Outside Audit & Supervisory Board
Members2

Number of Independent Officers DesignatedFrom Among Outside Audit & Supervisory
Board Members

2

Outside Audit & Supervisory Board Members’ Relationship With the Company (1)NameAttributeTakeo Tanaka

Attorney at law

Shigetsugu Yamada

Certified public
accountant

Relationship With the Company*
a

b

c

d

e

f

g

h

i

j

k

l

m

* Categories for “Relationship With the Company”“○” when the Audit & Supervisory Board Member presently falls or has recently fallen under the category;“△” when the Audit & Supervisory Board Member fell under the category in the past;“●” when a close relative of the Audit & Supervisory Board Member presently falls or has recently fallen
under the category; and“▲” when a close relative of the Audit & Supervisory Board Member fell under the category in the past
Executive (a person who executes business; hereinafter, the same) of the Company or its subsidiaryNon-executive director or accounting advisor of the Company or its subsidiary
Executive or Non-executive director of the parent of the Company
Audit & supervisory board member of the parent of the Company
Executive of a fellow subsidiary of the Company
Party whose major client or supplier is the Company or an executive thereof
Major client or supplier of the Company or an executive thereof
Consultant, accounting professional or legal professional who receives a large amount of monetaryconsideration or other property from the Company besides compensation as an Audit & Supervisory Board
Memberi Major shareholder of the Company (or an executive of the said major shareholder if the shareholder is a
corporation)j Executive of a client or supplier of the Company (which does not correspond to any of f., g., or h.) (theAudit & Supervisory Board Member himself/herself only)
k Executive of a corporation to which outside officers are mutually appointed (the Audit & Supervisory
Board Member himself/herself only)l Executive of a corporation that receives a donation from the Company (the Audit & Supervisory Board
Member himself/herself only)m Other

a
b
c
d
e
f
g
h

- 12 -

Outside Audit & Supervisory Board Members’ Relationship With the Company (2)Name

Takeo Tanaka

Designation as
Independent
Officer○

Supplementary
Explanation of
the Relationship

Reasons for Appointment
Outside Audit & Supervisory Board Member
Takeo Tanaka has been involved in corporate
legal affairs as an attorney at law for many
years, and has extensive knowledge andachievements as a legal expert. The Company
has appointed him as an outside Audit &Supervisory Board Member in order to utilize
his extensive knowledge and achievements toenhance and strengthen the Company’s auditing
system from a fair and neutral standpoint as an
attorney at law.

―――

The Company has designated him as anindependent officer upon having determinedthat he is unlikely to have conflicts of interest
with general shareholders given that grounds
stipulated in the Enforcement Rules for
Securities Listing Regulations and the
Guidelines for the Listing Management are notapplicable to him.

Shigetsugu Yamada○

Outside Audit & Supervisory Board Member
Shigetsugu Yamada has been involved incorporate accounting and tax affairs for many
years as a certified public accountant andcertified tax accountant, and has extensive
knowledge and achievements as an accounting
and tax expert. The Company has appointed
him as an outside Audit & Supervisory Board
Member in order to utilize his extensive
knowledge and achievements to enhance andstrengthen the Company’s auditing system.

―――

The Company has designated him as anindependent officer upon having determinedthat he is unlikely to have conflicts of interest
with general shareholders given that grounds
stipulated in the Enforcement Rules for
Securities Listing Regulations and the
Guidelines for the Listing Management are notapplicable to him.
[Independent Officers]
Number of Independent Officers

5

Matters Relating to Independent Officers―――- 13 -

[Incentives]
Implementation of Measures to Provide
Incentives to Directors

Performance-linked remuneration

Supplementary Explanation
Director remuneration is comprised of monetary compensation as basic remuneration (monthly fixed
remuneration) and bonuses (performance-linked remuneration) (not paid to outside Directors) , and non-monetarycompensation as restricted shares compensation (performance-linked remuneration) (not paid to outside
Directors). Bonuses in the form of performance-linked remuneration are paid at a fixed period every year withprofit in the previous fiscal year on a non-consolidated basis, which is the ultimate profit from execution of duties
to which the Directors make direct contributions, as the performance index, thereby increasing the Directors’
ambition to improve performance. Furthermore, the rate of performance-linked remuneration is approximately
20–30% in the case of standard performance. Original proposals for the amount of remuneration are drafted basedon an additive and subtractive formula within a range determined at the General Meeting of Shareholders after
giving consideration to the Company’s performance based on remuneration according to position in relation to
the status of execution of each officer’s duties. Based on the results of consultation with the Nomination &Remuneration Advisory Committee, which is a voluntary advisory body in which outside Directors make up amajority of the members, a decision is made by the Board of Directors.
Recipients of Share Options
Supplementary Explanation―――[Director Remuneration]
Disclosure of Individual Directors’ Remuneration

Selected Directors

Supplementary Explanation Updated
The remuneration for officers is disclosed in the annual securities report. For the fiscal year ended March 31,
2024, total remuneration for Directors (except for outside Directors) amounted to ¥943 million, total
remuneration for Audit & Supervisory Board Members (except for outside Audit & Supervisory Board Members)
amounted to ¥12 million, and total remuneration for outside officers amounted to ¥57 million.
Total amounts of remuneration of those whose remuneration is ¥100 million or more has been disclosed on an
individual basis in the annual securities report.
Policy for Determining Remuneration Amounts
or Calculation Methods Thereof

Established

Disclosure of Policy for Determining Remuneration Amounts or Calculation Methods Thereof
Director remuneration is comprised of monetary compensation as basic remuneration (monthly fixed
remuneration) and bonuses (performance-linked remuneration) (not paid to outside Directors) , and non-monetarycompensation as restricted shares compensation (performance-linked remuneration) (not paid to outside
Directors). Bonuses in the form of performance-linked remuneration are paid at a fixed period every year withprofit in the previous fiscal year on a non-consolidated basis, which is the ultimate profit from execution of duties
to which the Directors make direct contributions, as the performance index, thereby increasing the Directors’
ambition to improve performance. Furthermore, the rate of performance-linked remuneration is approximately
20–30% in the case of standard performance. Original proposals for the amount of remuneration are drafted based- 14 -

on an additive and subtractive formula within a range determined at the General Meeting of Shareholders after
giving consideration to the Company’s performance based on remuneration according to position in relation to
the status of execution of each officer’s duties. Based on the results of consultation with the Nomination &Remuneration Advisory Committee, which is a voluntary advisory body in which outside Directors make up amajority of the members, a decision is made by the Board of Directors.
[Supporting System for Outside Directors and/or Audit & Supervisory Board Members]
Three outside Directors and two outside Audit & Supervisory Board Members have been attending meetings ofthe Board of Directors and other important meetings in seeking to better facilitate sharing of information. In
addition, the Company has established a system for reliably communicating information centered on its Business
Planning Office and General Affairs Department, yet the Company does not have a section exclusively dedicatedto taking on such responsibilities.

2. Matters on Functions of Business Execution, Audit and Supervision, Nomination and Remuneration
Decisions (Overview of Current Corporate Governance System) Updated
The Company has built a corporate governance system that enlists the Board of Directors to serve as a managerial
decision-making body, while also employing the Audit & Supervisory Board equipped with the managerial audit
function, and an Executive Officer system to further strengthen the corporate structure.
The Board of Directors consists of seven Directors, including three outside Directors. It meets regularly once amonth to deliberate on all important matters, and also discusses and explores countermeasures with respect toprogress achieved in business performance. The Company has 12 Executive Officers in addition to four Directors
who concurrently serve as Executive Officers. Adoption of the Executive Officer system has culminated in aframework that separates the managerial decision-making and supervision functions from the business executionfunctions and that makes it possible to promptly address changes in the business environment. At meetings of theManagement Strategy Committee, held on the same day as those of the Board of Directors, committee members
discuss matters reported particularly regarding the current status of business performance in respective
departments, and subsequently make decisions on specific measures in that regard.
When it comes to audits and supervision, the Company believes it is important to coordinate the three types ofaudit (internal audit, Audit & Supervisory Board Members’ audit, and external accounting audit) for the sake of
improving audit quality and efficiency, and ensuring audit effectiveness. Further details are as presented in thesection, “Cooperation among Audit & Supervisory Board Members, Accounting Auditor and Internal Audit
Department” under [Audit & Supervisory Board Members] of “1. Organizational Composition and Operation.”
In addition, in order to ensure proper business operation and close coordination within the Group, the Company
has built a framework where it has respective Group companies regularly provide relevant managers in charge
with reports on matters such as business conditions and risks, pursuant to Rules on Management of Subsidiaries
and Associates, and where it can effectively convey instructions and requests regarding matters such as internal
rules and personnel affairs. In this way, the Company strives to strengthen its corporate governance.
When determining nominations of Director and Audit & Supervisory Board Member candidates, the Board of
Directors resolves election proposals to be submitted to the General Meeting of Shareholders, based on the resultsof consultation with the Nomination & Remuneration Advisory Committee, which is a voluntary advisory bodyin which outside Directors make up a majority of the members (upon having gained preliminary consent of the
Audit & Supervisory Board with respect to Audit & Supervisory Board Member candidates).
The Company has adopted a performance-linked remuneration system with respect to remuneration of the senior
management and Directors in order to facilitate further improvement of the Company’s business performance by
providing them with greater incentive to improve business performance. However, outside Directors and Audit& Supervisory Board Members are entitled to basic remuneration exclusively due to their position independentof business execution.
The Board of Directors makes decisions on amounts of remuneration for Directors within a range determined at
the General Meeting of Shareholders, based on the results of consultation with the Nomination & Remuneration
Advisory Committee, which is a voluntary advisory body in which outside Directors make up a majority of themembers. The amounts of remuneration for Audit & Supervisory Board Members are calculated per discussions
among the Audit & Supervisory Board Members.

- 15 -

3. Reasons for Adoption of Current Corporate Governance Framework
The Company understands that strengthening risk management and guaranteeing transparency in management
are vital to continuous improvement of corporate value. The Company is a company with an Audit & Supervisory
Board through which, along with the Board of Directors, it monitors risks related to business. It has alsoestablished a voluntary Nomination & Remuneration Advisory Committee mainly comprised of outside Directors,
and works to strengthen managerial supervision functions. The Company also conducts accounting andoperational audits through internal audits and works on strengthening its ability to take remedial action while
ensuring compliance.
The Company also concentrates efforts on fair and transparent information disclosures by actively carrying out
IR activities for investors primarily through the Business Planning Office. As a result, the Company ensures theeffectiveness of corporate governance and further enhances management organization at the Company as well as
its Group companies.
The Company has three outside Directors and two outside Audit & Supervisory Board Members.
The Company has appointed three outside Directors, both of whom have no material interest in the Company
involving personal relationships or otherwise, and both of whom are equipped with longstanding experience incorporate management as well as experience in the practice of corporate legal affairs serving as attorneys at law.
The Company expects that they will provide direction to business and checking function in an objective way,
independent from the managers running the business, utilizing their extensive knowledge and achievements.
Therefore, the Company has appointed them as outside Director. In addition, the two outside Audit & Supervisory
Board Members also have no material interest in the Company involving personal relationships or otherwise, andboth have official qualifications as attorney at law and certified public accountant, and are equipped withexperience in the practice of corporate legal affairs and corporate accounting. The Company has appointed themin order to utilize their extensive knowledge and achievements to enhance and strengthen the Company’s auditing
system.
The Company appoints as outside Directors and outside Audit & Supervisory Board Members individuals
equipped with extensive knowledge and achievements in various fields upon having deemed that their
independence from management is assured, pursuant to regulations on independence such as those stipulated inregulations of the Tokyo Stock Exchange.

- 16 -

Ⅲ Implementation of Measures for Shareholders and Other Stakeholders
1. Measures to Energize General Meetings of Shareholders and Smooth Exercise of Voting Rights
Supplementary Explanation
Early Notification of General
Meeting of Shareholders

The Company strives to provide notification about one week earlier thanrequired by law.

Allowing Electronic or
Magnetic Exercise of Voting
RightsThe Company has made it possible for shareholders to exercise their voting
rights via the Internet.

Participation in Electronic
Voting Platform and Other
Efforts to Enhance the Voting
Environment for Institutional
Investors

The Company participates in the electronic voting platform operated andadministered by ICJ, Inc.

Providing Convocation Noticein English (Translated Fully or
Partially)

The Company seeks to smooth exercise of voting rights by having theConvocation Notice partially translated into English and posting it to theCompany’s website and the Tokyo Stock Exchange website.

Other

The Company seeks to smooth exercise of voting rights by posting its
Convocation Notice to the Company’s website and Tokyo Stock Exchange
website.

2. IR Activities
Supplementary Explanation
Regular Investor Briefings forAnalysts and Institutional
Investors

The Company holds financial results briefing sessions for
institutional investors and analysts twice per year, and has
its representatives furnish explanations and conduct
question and answer sessions.

Posting of IR Materials on
WebsiteThe Company posts its annual securities reports, quarterly
securities reports, Consolidated Financial Results, Financial
Results Presentation materials, Integrated Report, timely
disclosure information, Notice of General Meeting of
Shareholders, and other reports (interim).

Establishment of Department
and/or Manager in Charge ofIR

The Business Planning Office engages in IR activities.

Explanation byRepresentativeYes

3. Measures to Ensure Due Respect for Stakeholders
Supplementary Explanation
Other

The Company’s aim of achieving the satisfaction of its shareholders,customers, and employees is cited as one of its Basic Management
Objectives.

- 17 -

Ⅳ Matters Related to Internal Control System
1. Basic Views on Internal Control System and Progress of System Development
The Company has resolved matters regarding basic policies on development of its internal control system withrespect to the following.
1. Framework ensuring that execution of duties by Directors and employees complies with laws and regulations
and the Articles of Incorporation
2. Framework for storing and managing information related to execution of duties by Directors
3. Regulations and other frameworks for managing risks of loss
4. Framework ensuring the efficiency of execution of duties by Directors
5. Framework ensuring the proper business operation of the Group6. Matters related to supporting personnel, when Audit & Supervisory Board Members request such personnel,
matters related to independence of such personnel from Directors, andmatters related to ensuring effectiveness of Audit & Supervisory Board Members’ instruction to such
personnel
7. Framework for the Group’s Directors and employees to report to its Audit & Supervisory Board Members,
framework for reporting otherwise to Audit & Supervisory Board Members, andframework ensuring that those reporting do not become subject to unfavorable treatment on the grounds of
having reported
8. Other frameworks ensuring the effectiveness of auditing by Audit & Supervisory Board Members
9. Framework for eliminating anti-social forces
10. Framework ensuring the reliability of financial reportingIn accordance with basic policies that have been resolved, the Company periodically reevaluates risk that pertains
to its compliance system and risk management system on a regular basis. Meanwhile, the Company’s General
Affairs Department serves a central role controlling and managing such risk on a company-wide basis. It ensurescompliance in overall operations while also preventing risks and ensuring swift action when risks materialize.
The Company’s system for execution of duties makes it more likely that it will achieve its targets. Each fiscal
period, it involves setting performance targets for the respective departments, gauging such progress by tracking
monthly performance at monthly meetings of the Management Strategy Committee, and considering measures
for improvement as necessary.
Under the auditing system, three types of audit (internal audit, Audit & Supervisory Board Members’ audit, andexternal accounting audit) are conducted for the Company and the entire Group. In conducting audits, the Audit& Supervisory Board regularly exchanges opinions and information with the Accounting Auditor and the Internal
Audit Department, while seeking to improve audit efficiency and ensure audit effectiveness.
Through such initiatives, the Company seeks to achieve aims that include strengthening the internal controls of
the Company and the entire Group, ensuring reliability of its disclosures, heightening operational effectivenessand efficiency, and attaining continuous improvement of corporate value.

2. Basic Views on Eliminating Anti-Social Forces and Progress of Related Efforts
1. Basic views
The Group takes a resolute stance against anti-social forces and groups in seeking to earn the continued trustof each and every one of its stakeholders.
2. Progress
The General Affairs Department serves as department in charge of response and supervision in terms of
seeking to prevent and mitigate various risks involving anti-social forces with respect to the Company’sbusiness activities. The Group’s officers and employees are to reject improper requests, promptly contact the- 18 -

Company’s General Affairs Department when encountering problems, and take a systematic approach toaddressing such matters. The Company’s initiatives also involve coordinating efforts with professionalorganizations externally as well as with attorneys at law and other such experts, as well as collecting andmanaging information on anti-social forces.

- 19 -

Ⅴ Other
1. Adoption of Anti-Takeover Measures
Adoption of Anti-Takeover Measures

Not adopted

Supplementary Explanation―――

2. Other Matters Concerning Corporate Governance System
The status of internal systems for timely disclosure of the Company’s corporate information is as follows.
[Basic Policies on Information Disclosure]
The Company seeks to provide timely and accurate information to its shareholders and other investors in a fairmanner. To such ends, its efforts to disclose information in a timely and appropriate manner in principle include
information that is subject to the Rules on Timely Disclosure of Corporate Information by Issuer of Listed
Securities (the “Timely Disclosure Rules”) set forth by the Tokyo Stock Exchange, and also include otherwisematerial information.
[Methods of Information Disclosure]
The Company provides timely disclosure of events that are subject to the Timely Disclosure Rules without delay
immediately after they occur, and accordingly provides timely disclosure without delay immediately after
approval of the Board of Directors with respect to matters decided and financial results information. The
Company discloses information using the Timely Disclosure network (TDnet) provided by the Tokyo Stock
Exchange, and it discloses annual securities reports and other such disclosure documents subject to the Securities
and Exchange Act using the EDINET electronic disclosure system provided by the Kanto Local Finance Bureau.
In addition, the Company also strives to achieve accurate and fair disclosure by making information available
through various media channels as necessary and by posting it to the Company’s website.
[Insider Period]
The Company seeks to ensure impartiality by preventing any divulgence of financial results information andother forms of information that affect share prices. To such ends, it designates an “insider period” extending fromits fiscal closing date through to the date on which it releases its financial results. During the insider period, theCompany refrains from making any comments whatsoever regarding its financial results and matters associatedwith its financial results. Meanwhile, all of the Company’s employees recognize that the insider period serves asa particularly important period for information control and conduct themselves accordingly.
[Management Systems and Rules]
The Company designates as insider information any information that is subject to the Timely Disclosure Rules
and otherwise material information. It accordingly manages information, provides internal notification anddisclosure in accordance with its Insider Trading Prevention Regulations.
[Internal Systems of Information Disclosure]
1. The Company’s Business Planning Office and General Affairs Department are in charge of its timely
disclosure and internal management of information, under the direction of the overall supervisor of
information management, the Administrator of Business Planning Office.
2. If internal information arises within the Company, a consolidated subsidiary or an associate, then the relevant
departmental manager or Group company supervisor of information management is to immediately report
the matter to the overall supervisor of information management.

- 20 -

3. Upon having received such a report, the overall supervisor of information management is to take action thatinvolves immediately ensuring that it is managed as internal information, determining the necessity of timely
disclosure in light of discussions with departments in charge of timely disclosure and the Timely Disclosure
Rules, and convening a meeting of the Board of Directors as necessary. The Company provides timely
disclosure of events without delay immediately after they occur, and accordingly provides timely disclosure
without delay immediately after approval of the Board of Directors with respect to matters decided andfinancial results information.

- 21 -

Outline of Corporate Governance Framework
General Meeting of Shareholders
Election and dismissal

Election anddismissal

Consult
Supervision ofmanagement

Board of Directors

Election anddismissal

Nomination & Remuneration
Advisory Committee(discretionary advisory body)

Reportand propose

Audit
Reporting

ReportingElection and dismissal
Reporting
Supervision and instruction

Audit
ReportingBusiness
execution

Audit & Supervisory Board

Board of Executive
Officers

Coordination

Coordination

Three types
of auditInternal Audit Dept.
(Business Planning
Office)ReportingManagement Strategy
Committee
Instruction

Operating/ Administrative Dept.

Group companies

Complianceand riskmanagement

General Affairs
Dept.

Three types of audit (internal audit, Audit &Supervisory Board Members’ audit, andexternal accounting audit)- 22 -

Coordination

Accounting
AuditorOutline of Timely Disclosure System

Shareholders and investors
Tokyo Stock
Exchange(TDnet)Disclosure of matters decided,
financial results information,and eventsMedia channels
The Company’s
websiteKanto Local Finance
Bureau(EDINET)
Disclosure of matters decided,
financial results information,and events

Disclosure of matters decided,
financial results information,and events

OBIC Co., Ltd.
Overall supervisor of information
management

Matters decided

Board of Directors

Reporting of financial
results informationand events(Administrator of Business Planning Office)Approval and resolution

Information Management Dept.
(Business Planning Office andGeneral Affairs Dept.)

Reporting andconfirming financial
results information
Reporting events

Operating / Administrative Dept.
Reporting and confirming
financial results information

Group companies- 23 -

Reporting events