Note: This document has been translated from the Japanese original version to English
for reference purposes only. In the event of any discrepancy between this translated
document and the Japanese original, the Japanese original shall prevail.

Corporate Governance Report
Nippon Sanso Holdings Corporation

Last updated: November 15, 2023

Nippon Sanso Holdings Corporation
Toshihiko Hamada, Representative Director, President CEO
Contact: +81-3-5788-8500
TSE Code: 4091
https://www.nipponsanso-hd.co.jp
The corporate governance of Nippon Sanso Holdings Corporation (the “Company”) is
described below:

I. Basic thinking on corporate governance, capital structure, corporate
attributes and other basic information
1. Basic Thinking on Corporate Governance
From the perspective of ensuring sustainable growth of the Company and long-term increaseof corporate value, taking into account the positions of shareholders and other stakeholders,customers, employees, and local communities, the Company believes that the essence ofcorporate governance involves ensuring transparency and fairness of decision-making,making effective use of the management resources available, and maximizing the efficiency
and strength of management through prompt and decisive decision-making. The Company
will work toward a full implementation of correct corporate governance based on the basic
approach below.
(1) The Company will respect shareholders’ rights and ensure their equality.
(2) The Company will consider the benefits of shareholders and other stakeholders and work
appropriately in partnership with those stakeholders.
(3) The Company will ensure transparency by releasing appropriate corporate information at
appropriate times.
(4) By separating supervisory and executive functions, the Company will improve
effectiveness of the Board of Directors’ supervisory function over the Company’s businessexecutions.
(5) The Company will engage in constructive dialogue with shareholders in order to contributeto the sustainable growth of the Group and the medium- to long-term improvement ofcorporate value.
[Reasons for Not Implementing the Principles of the Corporate Governance Code]
The Company has implemented all principles of the Corporate Governance Code.

1

[Disclosure Based on the Principles of the Corporate Governance Code] [Updated][Principle 1.4 Cross-Shareholdings]
The Company has established its policy on strategic holdings of listed stock and basic rules
on exercising voting rights in relation to strategic stock holdings in Article 4 of Principles ofCorporate Governance available on its corporate website. The Board of Directors annually
carries out a comprehensive assessment of each of strategic stock holdings bothquantitatively, by using the Return on Invested Capital (ROIC) indicator, and qualitatively, by
analyzing its business needs and other matters, and thereby verify whether there aresufficient reasons for each individual stock holding.
(https://www.nipponsanso-hd.co.jp/Portals/0/images/company/governance/nippon-sansoholdings-corporate-governance-principles_en.pdf)[Principle 1.7 Related Party Transactions]
The Company has established the framework of procedures for related party transactions in
Article 5 of Principles of Corporate Governance available on the Company’s website.
(https://www.nipponsanso-hd.co.jp/Portals/0/images/company/governance/nippon-sansoholdings-corporate-governance-principles_en.pdf)[Supplementary Principle 2.4.1 Ensuring Diversity in the Promotion of Core Human
Resources and Other Elements][Ensuring Diversity]
The Nippon Sanso Holdings Group has in place its “Global Policy on Respecting Human
Rights, Contributing to Communities, Employment, Labor and Health.” Under the “Code of
Conduct” based on the policy, all officers and employees are striving to establish anenvironment in which they can work while respecting diversity. Based on the recognition that
ensuring diversity is important to the Group’s development, we will be committed to thefollowing initiatives.
[Promotion of Women’s Active Participation]
Two of nine directors of the company are woman and the ratio of women to its total
employees is 18.2% at the end of fiscal year ended in March 2023. As a goal of the MediumTerm Management Plan, we have set the fiscal year ending March 2026 targets of 22% ormore in the ratio of women to the Group’s total employees (19.9% at the end of fiscal year
ended in March 2023) and 18% or more in the ratio of women to its total officers (15.7% asof the same date). Taiyo Nippon Sanso Corporation, a major operating company in Japanthat has been lagging behind in its efforts so far, established the Women's Advancement
Promotion Project in October 2022 and is currently considering specific measures with theaim of fostering a culture in which women can build careers based on their values, workviews, and lifestyles.
2

We will strive to improve institutional systems enabling proactive employment of women andpermitting their flexible work style, establish a management training scheme designed toappoint women to managerial posts, and undertake other measures in a proactive manner.
[Mid-career Recruitment]
In the Group’s overseas affiliated companies, most officers and employees are mid-careerhires, and we recognize that diversity is ensured continuously. In fiscal year ended in March
2023, Nippon Sanso Holdings Corporation and its main business company, Taiyo Nippon
Sanso Corporation, proactively recruited mid-career professionals equipped with necessary
skills, employing 30 of them. The ratio of mid-career officers and employees to the company’s
total officers and employees is 18.2 % and the ratio of mid-career officers to the company’s
total officers is 12.7% at the end of fiscal year ended in March 2023. In the future as well, we
will seek to employ mid-career professionals necessary from the viewpoint of placing theright person in the right position.
[Recruitment of Foreign Nationals]
The Group is operating globally, and employees of foreign nationality account for most of
employees in the Group companies except for the domestic operation of Taiyo Nippon Sanso
and Thermos groups, with their ratio reaching about 70% as of the end of fiscal year ended
in March 2023. As for the Nippon Sanso Holdings, two of its nine Board members and oneof its six executive officers are foreign nationals. Globally oriented management is in placeat the company, with important meetings and decision-making are basically conducted in
English. It has five non-Japanese employees, or 5% of the total, as of the end of fiscal year
ended in March 2023. Looking ahead, we will strive to realize proactive personnel exchanges
with overseas business companies, setting up a structure matching a global holding company.
[Employment of Persons with Disabilities]
Taiyo Nippon Sanso Corporation, the main domestic business company, has beenproactively hiring people with disabilities, and the ratio of people with disabilities to total
employees is 2.44%. that achieves the legally mandated 2.3% target of their employment.
We will continue to strive to employ such human resources and establish an easy-to-workenvironment in an effort to contribute to expansion of their working opportunities.
[Principle 2.6 Roles of Corporate Pension Funds as Asset Owners]
Taiyo Nippon Sanso Corporation (TNSC) which is the core business company of theCompany group has established the Corporate Pension Managing Committee that has
been engaged in deliberation of the management of corporate pension. TNSC has managed
the corporate pension fund in accordance with the basic policy of managing pension reserves
and based on the strategic asset contribution ratio necessary for achieving the target of thepension asset management in order to ensure stable management of the employee’s assets,
while properly controlling conflict of interests. Furthermore, TNSC has appointed the best
trustees based on the strategic asset contribution ratio, evaluated the quantitative and3qualitative aspects of the trustees designated by TNSC, and disclosed to employees thesummary of performance by trustee, including the investment results of corporate pension
fund.
[Principle 3.1 (1) Full Disclosure]
The Company has formulated its corporate philosophy and published it on its corporatewebsite.
(https://www.nipponsanso-hd.co.jp/en/company/mission.html)
The Company has formulated its Four-Year Medium-Term Management Plan “NS Vision2026～Enabling the Future” final fiscal year of which is fiscal 2025 ending March 2026 andpublished it on its corporate website.
https://www.nipponsanso-hd.co.jp/en/ir/management/plan.html[Principle 3.1 (2) Full Disclosure]
The Company has formulated Principles of Corporate Governance as its basic thinking andpolicy on corporate governance and published it on its corporate website.
(https://www.nipponsanso-hd.co.jp/Portals/0/images/company/governance/nippon-sansoholdings-corporate-governance-principles_en.pdf)[Principle 3.1 (3) Full Disclosure]
As regards the policy and procedures for the Board of Directors’ determining of the
remuneration of management personnel and directors, please refer to “Disclosure of Policy
on Determining Remuneration Amounts and Calculation Methods” in the subsection “Director
Remuneration” under the section “1. Matters on Organizational Composition and Operation”
under the part “Ⅱ. Business Management Organization and Other Corporate Governance
Systems regarding Decision-making, Execution of Business, and Oversight in Management”
of this report.
[Principle 3-1(4) Full Disclosure]
The Company has defined its policy and procedures for the Board of Directors’ appointmentof executive officers and nominating candidates of directors and Audit & Supervisory Board
members in Articles 13 through 15 of Principles of Corporate Governance available on its
corporate website.
(https://www.nipponsanso-hd.co.jp/Portals/0/images/company/governance/nippon-sansoholdings-corporate-governance-principles_en.pdf)[Principle 3-1(5) Explanations with respect to the individual appointments/dismissals andnominations of executive officers, candidates of directors and Audit & Supervisory Board
members]
Explanation of the reason for nominating as candidate for directors and Audit & Supervisory
Board members is made in the proposal for the election of directors and election of Audit &Supervisory Board members stipulated in the reference documentation for the General4Meeting of Shareholders. In the case the candidates are scheduled to be appointed as
executive officers at the board meeting to be held after the General Meeting of Shareholders,the explanation is made taking such appointment into consideration. The Company has
published the notice of convocation for the 19th Ordinary General Meeting of Shareholders
that includes reference documentation on its corporate website.
(https://www.nipponsanso-hd.co.jp/en/ir/stock/meeting.html)[Supplementary Principle 3.1.3 Disclosure of Company Initiatives on Sustainability]
The Company details its sustainability initiatives on its corporate website.
https://www.nipponsanso-hd.co.jp/en/sustainability/
The Company details its human capital investment on its corporate website.
https://www.nipponsanso-hd.co.jp/en/sustainability/society/Also, Taiyo Nippon Sanso Corporation, a principal operating company of the Group, explains
investment in intellectual property on its website.
(https://www.tn-sanso.co.jp/jp/rd/intellectual [in Japanese])
The Company collects and analyzes the necessary data on the impact of climate changerelated risks and earning opportunities on its business activities, profits, and other factors inaccordance with the Task Force on Climate-related Financial Disclosures (TCFD)
recommendations. The results are presented on its corporate website. Note that TCFDbased disclosure complies with the principle that applies to the companies listed on the Prime
Market.
(https://www.nipponsanso-hd.co.jp/en/sustainability/initiative/)[Principle 4.1.1 Roles and Responsibilities of the Board]
The Company has defined the scope and content of the matters for which the authority isdelegated to the management in Article 7.3 of Principles of Corporate Governance available
on its corporate website.
(https://www.nipponsanso-hd.co.jp/Portals/0/images/company/governance/nippon-sansoholdings-corporate-governance-principles_en.pdf)[Principle 4.9 Independence Standards and Qualification for Independent Directors]
The Company has defined the independence standards for independent outside directors in
Attachment 1 to Principles of Corporate Governance available on the Company’s website.
(https://www.nipponsanso-hd.co.jp/Portals/0/images/company/governance/nippon-sansoholdings-corporate-governance-principles_en.pdf)

5

[Supplementary Principle 4.10.1 Nomination and Remuneration Committees]
The Company outlines the mandates, roles, policy regarding the independence, and such,of its Advisory Committee on Appointments and Remuneration later in this Report: see theSupplementary Explanation to Voluntary Establishment of Committee(s), Members andAttributes of Chairperson in the Directors section of “1. Matters on Organizational
Composition and Operation” under “II. Business Management Organization regarding
Decision-making, Execution of Business, and Oversight in Management/ Other Corporate
Governance Systems.” Note that this disclosure complies with the principle that applies tothe companies listed on the Prime Market.
[Supplementary Principle 4.11.1 Preconditions for Board and Audit & Supervisory Board
Effectiveness]
The Company has determined its view on the appropriate balance between knowledge,
experience, and skills, as well as diversity and appropriate size, of the Board of Directors asa whole, which is set out in Article 9 of the Principles of Corporate Governance available on
its website.
(https://www.nipponsanso-hd.co.jp/Portals/0/images/company/governance/nippon-sansoholdings-corporate-governance-principles_en.pdf)
In addition, the Company creates a skills matrix that shows the knowledge, experience, skills,
and other expertise possessed by individual directors, as presented on its corporate website.
(https://www.nipponsanso-hd.co.jp/en/company/officer_list/)
Skill matrix of candidate for directors is presented on pages 16 of the reference
documentation of the convocation notice for the 19th Ordinary General Meeting of
Shareholders held on June 20, 2023.
(https://www.nipponsanso-hd.co.jp/en/ir/stock/meeting.html)[Supplementary Principle 4.11.2 Preconditions for Board and Audit & Supervisory Board
Effectiveness]
Outside director Miri Hara is also serving as outside director of SECOM CO., LTD. Outside
director Katsumi Nagasawa is also serving as outside director of Sugino Machine Limited, aprivate company. Outside director Masako Miyatake is also serving as director of Sumida
Corporation. None of outside Audit & Supervisory Board members has a concurrent positionof any other listed company.
[Supplementary Principle 4.11.3 Evaluation of Board of Directors’ Effectiveness]
The Company has published the process and result of evaluation of board of directors’
effectiveness on its corporate website.
(https://www.nipponsanso-hd.co.jp/Portals/0/images/company/governance/Evaluation-ofthe-Board-of-Directors-Effectiveness_20230511.en.pdf)
6

[Supplementary Principle 4.14.2 Director and Audit & Supervisory Board Members Training]
The Company has defined its training policy for directors and Audit & Supervisory Board
members in Article 17 of Principles of Corporate Governance available on the Company’s
corporate website.
(https://www.nipponsanso-hd.co.jp/Portals/0/images/company/governance/nippon-sansoholdings-corporate-governance-principles_en.pdf)[Supplementary Principle 5.1 Dialogue with Shareholders]
The Company has formulated Nippon Sanso Holdings Group Investor Relations (IR) Policy(Basic Principles for Dialogue and Disclosures Concerning IR Activities) as a policy on the
structure and initiatives to facilitate constructive dialogue with shareholders and published iton the Company’s website.
(https://www.nipponsanso-hd.co.jp/en/ir/management/irpolicy.html)[Status of Dialogues with Shareholders and etc.]
The Company has posted the status of dialogues with shareholders and other investors on
the Company’s website.
(https://www.nipponsanso-hd.co.jp/en/sustainability/dialogue_with_stakeholders/)[Action to Implement Management that is Conscious of Cost of Capital and Stock Price]
The Company’s policy on cost of capital, capital efficiency and etc., have been published on
the Company’s website as “CFO Message”.
(https://www.nipponsanso-hd.co.jp/en/ir/management/cfo-message.html)

2. Capital Structure
Foreign Shareholding Ratio

10% or more and less than 20%[Status of Major Shareholders] [Updated]
Name / Company Name
Mitsubishi Chemical Group Corporation
The Master Trust Bank of Japan, Ltd. (trust
account)
Taiyo Nippon Sanso Corporation stock holding
association for clients and suppliers
Custody Bank of Japan, Ltd. (trust account)
Meiji Yasuda Life Insurance Company
BANK LEUMI LE ISRAEL FOR CLIENTS GLOBAL
MARKETS
Mizuho Bank, Ltd.
7

Number of Shares
Owned
218,996,766
33,225,000

Percentage
(%)
50.59
7.67

16,974,621

3.92

11,751,300
9,006,771
4,749,800

2.71
2.08
1.10

4,332,847

1.00

The Norinchukin Bank
JP MORGAN CHASE BANK 385632
THE BANK OF NEW YORK(INTERNATIONAL) LIMITED 131800

MELLON3,500,440
3,379,327
3,206,800

0.81
0.78
0.74

Controlling Shareholder (except for
Parent Company)

N/A

Parent Company

Mitsubishi Chemical Group Corporation (TSE
Code: 4188)

Supplementary Explanation [Updated]
Status of Major Shareholders is as of September 30, 2023.

8

3. Corporate Attributes
Listed Stock Market and Market
SectionFiscal Year-End
Type of Business
Number of Employees (consolidated)
as of the End of the Previous Fiscal
Year
Sales (consolidated) as of the End of
the Previous Fiscal Year
Number of Consolidated Subsidiaries
as of the End of the Previous Fiscal
Year

Tokyo Stock Exchange
Prime Market
MarchChemical
1000 or more

¥1 trillion or more
100 or more and less than 300

4. Policy on Measures to Protect Minority Shareholders in Conducting Transactions
with Controlling Shareholder
When entering into a transaction with its controlling shareholder, the Company has a policy
to define reasonable contractual conditions and prices in reference to other transactions andmarket prices. Furthermore, the Company will obtain approval of the Board of Directors forany material transaction with its controlling shareholder that is not included in the ordinary
course of business. The Company seeks to secure the objectivity and transparency of theBoard of Directors in deliberations on transactions with the controlling shareholder, byappointing five independent outside directors who are independent of the controllingshareholder so that they make up majority of the nine-member Board of Directors.
5. Other Special Circumstances which may have Material Impact on Corporate
Governance
The Company has entered into the basic agreement with its parent company, Mitsubishi
Chemical Group Corporation, dated on May 13, 2014, whereby Mitsubishi Chemical Group
Corporation shall, under its Group Management Regulations, respect the Company’s
independence and provide it with full support and cooperation.
If a conflict of interest occurs between the parent company and other shareholders, Nippon
Sanso Holding’s directors take actions so as not to harm the interests of the othershareholders. We appoint five independent outside directors and two full-time independent
outside members of the Audit & Supervisory Board. They supervise that any conflict ofinterest between the parent company and other shareholders should not happen. In addition,
we have an Advisory Committee on Appointments and Remuneration that is establishedvoluntary for the Board of Directors to consult with regarding the nomination of candidates
for directors and members of the Audit & Supervisory Board, as well as the appointment anddismissal of CEO and other executive officers. The committee consists of six members, thepresident and five independent outside directors, one of them serving as the chairperson.
With such structure, we ensure independence from the parent company of the appointment
of senior executives.
9Ⅱ . Business Management Organization regarding Decision-making,Execution of Business, and Oversight in Management/
Governance Systems

Other Corporate

1. Matters on Organizational Composition and Operation
Organization Form
Company with an Audit & Supervisory Board[Directors]
Maximum Number of Directors Stipulated in Articles ofIncorporation
Term of Office Stipulated in Articles of Incorporation
Chairperson of the Board
Number of Directors
Appointment of Outside Directors
Number of Outside Directors
Number of Independent Outside Directors

15
One year
President CEO
9
Appointed
55Outside Directors’ Relationship with the Company (1)NameAttribute
Relationship with the Company*a b c d e
f g h i jkMiri Hara
CertifiedTax〇
Accountant
Katsumi Nagasawa
Ex. Executive of〇
Other Company
Masako Miyatake
Lawyer〇
Hideo Nakajima
Other〇
Katsuhito Yamaji
Ex. Executive of〇
Other Company*Categories for “Relationship with the Company”* “○” when the director presently falls or has recently fallen under the category;“△” when the director fell under the category in the past
* “●” when a close relative of the director presently falls or has recently fallen under the
category;“▲” when a close relative of the director fell under the category in the pasta. Executive of the Company or its subsidiaries
b. Non-executive director or executive of a parent company of the Company
c. Executive of a fellow subsidiary company of the Company
d. A party whose major client or supplier is the Company or an executive thereof
e. Major client or supplier of the Company or an executive thereof
f. Consultant, accountant or legal professional who receives a large amount of monetaryconsideration or other property from the Company besides compensation as a director/
audit & supervisory board member
g. Major shareholder of the Company (or an executive of the said major shareholder if theshareholder is a legal entity)
10

h. Executive of a client or supplier company of the Company (which does not correspond toany of d, e, or f) (the director himself/herself only)
i. Executive of a company, between which and the Company outside directors/ audit &supervisory board member are mutually appointed (the director himself/herself only)
j. Executive of a company or organization that receives a donation from the Company (thedirector himself/herself only)
k. Others
Outside Directors’ Relationship with the Company (2)Name
Designation Supplementary
Reasons of Appointment
asExplanation of
Independent
theDirector
Relationship
Miri Hara
Miri Hara has served as a director of realestate management company over many
years, and also has wide-ranging experienceof serving as Representative Certified Public
Tax Accountant of Tax Corporation, and an
outside director at a publicly listed company○―――
and thus the Company considers her qualified
to be an outside director. On top of that, theCompany has selected him as anindependent director who is unlikely to haveconflicts of interest with general shareholders
based on such background.
Katsumi○Katsumi Nagasawa had been engaged in the―――
Nagasawa
nuclear power business for many years in
Hitachi Ltd., and subsequently served as acorporate executive officer of the company
and as the chairman of the board of directorsof its group company, among other important
positions and thus the Company considers
him qualified to be an outside director. On topof that, the Company has selected him as anindependent director who is unlikely to haveconflicts of interest with general shareholders
based on such background.

11

Name

Designationas
Independent
Director

MasakoMiyatake○

Supplementary
Explanation ofthe
Relationship
―――

Hideo
Nakajima○―――

Katsuhito
Yamaji○―――

Reasons of Appointment

Having accumulated a wealth of experience
as an international lawyer over many years,
Masako Miyatake has been practicing law inthe fields of international transactions,finance, corporate governance, and litigation,
arbitration and conciliation. Furthermore, she
serves as an outside director at anotherpublicly listed company and thus theCompany considers her qualified to be an
outside director. On top of that, the Company
has selected her as an independent director
who is unlikely to have conflicts of interest withgeneral shareholders based on suchbackground.
Hideo Nakajima, currently assuming a special
advisor of a law firm that offers global
services, has held important positions at
Ministry of Finance and Japan Fair Trade
Commission and thus the Company considers
him qualified to be an outside director. On topof that, the Company has selected him as anindependent director who is unlikely to haveconflicts of interest with general shareholders
based on such background.
Katsuhito Yamaji had worked for many years
in the area of technology development,
production and procurement in Yamaha MotorCo., Ltd., and subsequently served as adirector of the company and thus theCompany considers him qualified to be an
outside director. On top of that, the Company
has selected him as an independent director
who is unlikely to have conflicts of interest withgeneral shareholders based on suchbackground.

Voluntary Establishment of Committee(s)Corresponding
toNomination
Committee
Remuneration Committee

12

EstablishedorVoluntary Establishment of Committee(s), Members and Attributes of Chairperson
Committee’s

All

Full-time

Internal

OutsideExternal

Other

Chair

Name

Committee

Members

Directors

Directors

experts

members

person

0

1

5

0

0

Members
Voluntary

Advisory

Committee

Committee on

Corresponding

Appointments

to Nomination

andCommittee

Remuneration

Voluntary

Advisory

Committee

Committee on

Corresponding

Appointments

to Remuneration

andCommittee

Remuneration

6

Outsidedirector

6

0

1

5

0

0

Outsidedirector

Supplementary Explanation[Updated]
The Company’s Advisory Committee on Appointments and Remuneration is an organ thatadvises the Board of Directors. The six-member Committee consists of the representative
director and president CEO and the five independent outside directors, and is chaired by an
Independent Outside Director, Mr. Katsumi Nagasawa. This composition—namely,
independent outside directors making up the majority with the chairperson being one ofthem—ensures the Committee’s independence as well as its objectivity and transparency indecision-making. The Committee operates in compliance with the Regulations of theAdvisory Committee on Appointments and Remuneration of Nippon Sanso Holdings
Corporation approved by the Board of Directors. It is consulted by the Board of Directors onsuch matters as the selection of candidates for the office of director or member of the Audit& Supervisory Board, appointment and dismissal of executive officers, selection of a
successor to the representative director and president CEO, and revision of the internal
regulations on director remuneration. After deliberations on the matters consulted upon, theCommittee decides by a majority vote and reports the results to the Board of Directors.
[Audit & Supervisory Board Members]
Establishment of Audit & Supervisory Board
Maximum Number of Audit & Supervisory
Board Members Stipulated in Articles ofIncorporation
Number of Audit & Supervisory Board
Members

Established5

4

Coordination among Audit & Supervisory Board Members, Independent Auditors andInternal Audit Departments
The Audit & Supervisory Board comprises four full-time members, three of whom are outside
members. Audit & Supervisory Board members attend meetings of the Board of Directors
13and the Management Committee to oversee directors’ business execution objectively andform and express opinions impartially. The Audit & Supervisory Board conducts its audit incoordination with Independent Auditors and Corporate Audit Office. The Audit & Supervisory
Board receives reports from the Independent Auditors about their auditing plans and thestatus of their audit, and also receives reports from Corporate Audit Office about the resultsof internal audit.
Furthermore, the secretariat of the Audit & Supervisory Board staffed by full-time personnel
has been in place to help Audit & Supervisory Board members with their duties and thereby
ensure the effectiveness of audit conducted by the Audit & Supervisory Board.
Appointment of Outside Audit & Supervisory
Board Members
Number of Outside Audit & Supervisory
Board Members
Number of Independent Audit & Supervisory
Board Members

Appointed
32Outside Audit & Supervisory Board Member’s Relationship with the Company (1)NameAttribute
Relationship with the Company*a b c d e
f g h i jkAkihiro Hashimoto
From another△company
Masahiro Osada
From another△△company
Kazuya Kobayashi
From another△company* 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;“▲”when a close relative of the audit & supervisory board member fell under the category
in the pasta. Executive of the Company or its subsidiaryb. Non-executive director or accounting advisor of the Company or its subsidiaries
c. Non-executive director or executive of a parent company of the Company
d. Audit & supervisory board member of a parent company of the Company
e. Executive of a fellow subsidiary company of the Company
f. A party whose major client or supplier is the Company or an executive thereof
g. Major client or supplier of the Company or an executive thereofh. Consultant, accountant or legal professional who receives a large amount of monetary14

consideration or other property from the Company besides compensation as an audit &supervisory board member
i. Major shareholder of the Company (or an executive of the said major shareholder if theshareholder is a legal entity)
j. Executive of a client or supplier company of the Company (which does not correspond toany of f, g, or h) (the audit & supervisory board member himself/herself only)
k. Executive of a company, between which and the Company outside directors/ audit &supervisory board member are mutually appointed (the audit & supervisory board member
himself/herself only)
l. Executive of a company or organization that receives a donation from the Company (theaudit & supervisory board member himself/herself only)
m. Others
Outside Audit & Supervisory Board Member’s Relationship with the Company (2)Name
Designation
Supplementary
Reasons of Appointment
asExplanation of the
Independent
Relationship
Audit &
Supervisory
Board
memberAkihiroMr. Hashimoto is invited Mr. Hashimoto is appointed as an
Hashimotofrom Mizuho Bank, Ltd. Outside Audit & Supervisory Board
which is the Company’s memberforhislong-term
lender.
The
group experience at financial institutions
companies’ outstanding and his substantial level ofborrowings to the bank accounting
andfinancial○was 267,292 million yen knowledge. On top of that, theat the end of March Company has selected him as an2023.
independent Audit & Supervisory
Board member who is unlikely tohave conflicts of interest withgeneral shareholders based onsuch background.
Masahiro
Mr. Osada is invited from Mr. Osada is appointed as an
Osada
Mitsubishi
Chemical Outside Audit & Supervisory Board
Corporation, which is the member for his experience at
Company’s
fellow accounting
departments
andcompany and client. The corporate management department
annualamountof of a chemical company and histransactions between the substantial level of financial andgroup companies and accounting knowledge.
Mitsubishi
Chemicalstood at 7,058 million
yen for the year ended in
March 2023.

15

Name

Designationas
Independent
Audit &
Supervisory
Board
memberKazuyaKobayashi○

Supplementary
Explanation of theRelationship

Reasons of Appointment

Mr. Kobayashi is invitedfrom Mizuho Bank, Ltd.
which is the Company’s
lender.
The
group
companies’ outstanding
borrowings to the bankwas 267,292 million yen
at the end of March
2023.

Mr. Kobayashi is appointed as an
Outside Audit & Supervisory Board
memberfor
hislong-term
experience at financial institutions
and his substantial level ofaccounting
andfinancialknowledge. On top of that, theCompany has selected him as anindependent Audit & Supervisory
Board member who is unlikely tohave conflicts of interest withgeneral shareholders based onsuch background.

[Independent Directors/ Audit & Supervisory Board member]
Number of Independent Directors/ Audit & 7
Supervisory Board member
Other Matters relating to Independent Directors
N/A[Incentives]
Implementation of incentive measures for Performance-linked bonuses
Directors
Supplementary Explanation on Relevant Matter [Updated]
The Board of Directors and the Audit and Supervisory Board consult with the Advisory
Committee on Appointment & Remuneration about the appropriateness of the remuneration
system for the directors and A&S Board members. The Advisory Committee on Appointment& Remuneration discusses the issue and submits the result to the Board of Directors and the
Audit and Supervisory Board.
Remunerations for directors consist of (i) fixed “Basic Monthly Remuneration,” which is abase salary specific to each rank; (ii) “Performance-linked Bonuses,” which vary according
to business results; and (iii) “Non-financial KPI-linked Bonuses,” which are linked to thedegree of achievement of “lost time injury frequency rate” and “rate of receiving compliancetraining” of non-financial KPIs set in the medium-term management plan. Remuneration for
directors is based, in principle, on the annual salary system, with the amount paid monthly
equivalent to one-12th of the annual salary. Revision of remuneration is reflected in thepayment made in July each year.
Of the remuneration, the amount of “(ii) Performance-linked Bonuses” is calculated
corresponding to the degree of achievement of each fiscal year’s budget based on mediumterm management plan targets and year-on-year improvements in business results, which isreflected in the remuneration paid from July the following business year (for example, the16amount calculated based on the business results, etc., for FYE March 2021 is reflected in
the directors’ remuneration paid from July in FYE March 2022).
The Board of Directors passed the resolution at its meeting held on June 17, 2022, to add(iii) “Non-financial KPI-linked Bonuses” to the remuneration from July 2022 onward. It is
calculated based on the degree of achievement of certain non-financial KPI targets. The
proportion of (i), (ii), and (iii) are approximately five to four to one, respectively.
However, for the fiscal year ended in March 2023, the amount equivalent to about 10% of
the total remuneration is set as the “Non-financial KPI-linked Bonuses,” and the calculation
method corresponding to the degree of achievement of certain targets will be applied fromthe remuneration to be paid in July of this fiscal year (FYE March 2024).
Also, outside directors and directors who mainly serve as officers of subsidiaries receive
the fixed “Basic Monthly Remuneration” only as remuneration for directors of the Company.
The Performance-linked Bonuses and Non-financial KPI-linked Bonuses are determinedon the basis of the following formulas, respectively.
•

Performance-linked Bonuses (variable) = Rank-specific standard amount x “coefficient
based on evaluation related to Performance-linked Bonuses” *•Non-financial KPI-linked Bonuses (variable) = Rank-specific standard amount x “coefficient
based on evaluation related to Non-financial KPI-linked Bonuses” (*)(Reflected from the amount paid in July FYE March 2024)* The following figures are applied to the “coefficient based on evaluation related to
Performance-linked Bonuses” and “coefficient based on evaluation related to Nonfinancial KPI-linked Bonuses,” respectively, in order to judge the status ofachievements of medium-term management plan targets while strengthening theextent of their interlocking with the Company’s business results as well as improving
their objectivity and transparency.
[Coefficient based on evaluation related to Performance-linked Bonuses]➢ Degree of achievements of each fiscal year’s budget based on medium-term
management plan targets (consolidated revenue and consolidated core operating
profit margin)➢ Year-on-year improvements in business results (consolidated revenue,
consolidated core operating profit, and profit attributable to owners of the parent
company)[Coefficient based on evaluation related to Non-financial KPI-linked Bonuses] (Reflectedfrom the amount paid in July FYE March 2024)➢ The degree of achievement each fiscal year of (certain) non-financial KPIs set in
the medium-term management plan (“year-on-year progress in lost time injury
frequency rate for the previous fiscal year” and “rate of receiving compliancetraining for the previous fiscal year”)

17

Targets & results of indicators tied to Performance-linked Bonuses, etc. for directors(excluding outside directors and directors who mainly serve as officers of subsidiaries) in
FYE March 2023 (Note)
Degree of achievement in the budget of the fiscal year ended March 31, 2022
Indicator forevaluation

Weight for evaluationFYE March 2022
TargetFYE March 2022
Results

Consolidated revenue

25%

865,000 mil. yen

957,169 mil. yen

Consolidated core
operating profit margin

25%

11.1%

10.7%

Year-on-year performance improvements from fiscal year ended March 31, 2021
Indicator for
Weight for
FYE March 2021
FYE March 2022
evaluation
evaluation
Results
Results
16.6%
Consolidated revenue
818,238 mil. yen
957,169 mil. yen
Consolidated core
operating profit
Net income
attributable to ownersof the parent

16.6%

87,251 mil. yen

102,710 mil. yen

55,214 mil. yen

64,103 mil. yen

16.6%(Note) As the medium-term management plan had not been formulated for the FYEMarch 2022, “Degree of achievement in the budget of the FYE March 2022
(Consolidated revenue and Consolidated core operating profit margin)” was used
to calculate directors’ performance-linked remuneration (approved by the Boardof Directors held on June 18, 2021), instead of “Degree of achievement in thebudget based on medium-term management plan targets (Consolidated revenue
and Consolidated core operating profit margin)” specified by the Company’s
internal regulations on remuneration for directors.
Recipients of Stock Options
Supplementary Explanation on Relevant Matter
N/A[Director Remuneration]
DisclosureofIndividual
Remuneration

Directors’ No Individual Disclosure

Supplementary Explanation on Relevant Matter
The Company discloses the total amount of remuneration for directors.
The total amount of remuneration for 11 directors was 206 million yen, including 54 million
yen for five outside directors.
Total amount of remunerations by type:・Basic Remuneration: 156 million yen, including 54 million yen for five outside directors
・Performance-tied Remuneration: 47 million yen
・Non-financial KPI-linked Bonuses: 3 million yen※ For the period from 1st April 2022 to 31 March 2023.
These amount includes remuneration for 2 director who retired during the year.
18

Policy on Determining Remuneration
Amounts and Calculation Methods

Established

Disclosure of Policy on Determining Remuneration Amounts and Calculation Methods
The total amount of remunerations for directors was limited to 800 million yen per year(including 50 million or less for outside directors, excluding their employee portion) under aresolution passed at the 11th Ordinary General Meeting of Shareholders held on June 23,
2015. Due to the increase in the number of outside directors, etc., a resolution was passed
at the 18th Ordinary General Meeting of Shareholders on June 17, 2022, to retain the limit of
800 million yen as remuneration for directors, of which the portion for outside directors willbe “up to 100 million yen on an annual basis”. The total amount of remunerations for Audit &Supervisory Board members is limited to 200 million yen per year under a resolution passed
at the 3rd Ordinary General Meeting of Shareholders held on June 28, 2007. The amount of
remuneration for each director is determined on the basis of the policy described in[Incentives] and supplementary explanation of “Implementation of incentive measures for
Directors” The board of directors has approved internal regulation that reflected the policy.
Outside directors and directors whose main jobs are directors of subsidiaries are paid thefixed “Basic Monthly Remuneration” only as remuneration for directors of the Company.
Remuneration for directors is based in principle on an annual salary system, with the amount
paid monthly equivalent to one-12th of the annual salary.
Representative Director who is authorized to decide the amount of each director’s
remuneration calculates it according to the internal regulations. The amount of
remuneration for directors is to be unambiguously calculated from their rank andperformance based on the internal regulations, and it is possible to verify the results ofcalculations by the Representative Director. The Company has established the advisorycommittee on appointments and remuneration that consisted of five members that are
President, Chairman of the Board and three independent outside directors and chaired byan independent outside director. The Committee continuously discusses directors’
remuneration at the consultation of the board of directors.
[Supporting System for Outside Directors and/or Audit & Supervisory Board Members]
For Audit & Supervisory Board members, full-time personnel are in place in the secretariat of
the Audit & Supervisory Board to help them perform their duties. For outside directors,
relevant materials are provided along with agenda items prior to a meeting of the Board of
Directors, and a person in charge of an agenda item gives explanation where necessary.
Further, outside directors and the Audit & Supervisory Board regularly meet to exchange
information and share the same recognition concerning the Company’s business, internal
control, corporate governance and other matters.
[Status of Persons Who Have Retired from a Position Such as Representative Director
and President]
Retired Representative Director and President, etc. Holding Advisory or Any Other Positionin the Company

19

Name

Title/
PositionYujiroIchihara

SpecialAdvisorResponsibilities

Give advice or
support on therequestofmanagement.

Working Form andConditions(Full-time/Part-time,
Paid/Unpaid, etc.)
Working Form:
No classification of
full-time/part-time
Remuneration:
Paid

Date of
Retirement
from
Positionsuch asPresident
June 17,2022

total Number of Retired Representative Director and Presidents, etc.
Holding Advisory or Any Other Pension in the Company

Term of
Office1 yearrenewal1

Other Matters
The Board of Directors appoints a special advisor based on the advice by the Advisory
Committee on Appointments & Remuneration.
The “Date of Retirement from Position such as President” in the “Retired Representative
Director and President, etc. Holding Advisory or Any Other Position in the Company”
described above states the date of retirement of the Chairman of the Board.
2. Matters on Functions of Business Execution, Auditing, Oversight, Nomination, andRemuneration Decisions (Overview of Current Corporate Governance System)
The Board of Directors consists of nine members, five of whom are independent, andoperates to ensure correct business judgement. The Articles of Incorporation stipulates thatthe maximum number of directors on the Board of Directors is 15. The Board of Directors
holds a regular monthly meeting to discuss important matters and hear reports aboutbusiness activities. The Company has established the Advisory Committee on Appointments
and Remuneration as a discretionary advisory committee under the Board of Directors. The
member of the committee is President (CEO) and five outside directors and the Committee
is chaired by an outside director. The Board of Directors consults this committee regarding
the selection of candidates for the position of director and Audit & Supervisory Board member,the appointment and dismissal of President (CEO) and executive ofﬁcers, the choosing of
successors to President (CEO) and revisions of the internal regulations on director’scompensation, and seeks advice from the independent outside directors to ensure thetransparency and objectivity of decision making.
In accordance with the Articles of Incorporation of the Company and Article 427(1) of theCompanies Act, the Company has entered into agreements with each outside director to limit
their liability for damages stipulated in Article 423(1) of the Companies Act, and has set theirmaximum liability for damages in accordance with Article 425(1) of the Companies Act.
In addition to the Board of Directors, the Company has established the Management
Committee consisting of directors and concerned executive officers for prompt decision
making. The term of a director has been limited to one year in order to facilitate responsible20management in each fiscal year. The Audit & Supervisory Board comprises four full-timemembers and three of them are outside members. Audit & Supervisory Board members
attend meetings of the Board of Directors and the Management Committee to oversee
directors’ business execution objectively and form and express opinions impartially. The Audit& Supervisory Board conducts its audit in coordination with Independent Auditors andCorporate Audit Office as well. The Audit & Supervisory Board receives reports from the
Independent Auditors about their auditing plans and the status of their audit, and also
receives reports from Corporate Audit Office about the results of internal audit. Furthermore,
the secretariat of the Audit & Supervisory Board staffed by full-time personnel has been inplace to help Audit & Supervisory Board members with their duties and thereby ensure theeffectiveness of audit conducted by the Audit & Supervisory Board.
Five outside directors and two outside Audit & Supervisory Board members are independent.
The Company appoints Ernst & Young ShinNihon LLC as an accounting auditor. In addition
to that the Company has established Code of Conduct of Nippon Sanso Holdings Group andstrives to ensure compliance and business ethics of the group companies.
3. Reasons for Adoption of Current Corporate Governance System
The Company considers that the system described above in “2. Matters on Functions ofBusiness Execution, Auditing, Oversight, Nomination, and Remuneration Decisions” is themost appropriate corporate governance system for the Company in light of characteristics
and size of the Group’s business.
The Company has five outside directors. The Audit & Supervisory Board comprises four fulltime members, three of whom are outside. Having the five outside directors and two out of
the three outside members of the Audit & Supervisory Board satisfies the independence
standard for outside directors/Audit & Supervisory Board members required by the Tokyo
Stock Exchange. The Company ensures the objectivity and fairness of management
oversight functions.

Ⅲ. Measures Implemented for Shareholders and Other Stakeholders
1. Measures to Ensure Active General Meetings of Shareholders and Smooth Exerciseof Voting Rights

Early Notification of General
Shareholder Meeting
Scheduling GMs Avoiding
Overlapping with Other
AGMs
Allowing Electronic Exerciseof Voting Rights

Participation in an Electronic
Voting Platform and Other

Supplementary Explanation
Notices of convocation for General Meetings ofShareholders are mailed to shareholders at the earliest
possible date prior to the date designated by law.
The Company sets the date for annual General Meetings ofShareholders early to avoid dates on which many othershareholders’ meetings are held.
To enhance the convenience for exercising shareholders’voting rights, the Company has allowed shareholders to
exercise their voting rights electronically.
Supplementary Explanation
The Company has used the platform provided by ICJ, Inc.
to enable institutional investors to exercise their voting
21

Measures for Enhancing theExercise of Voting Rights ofInstitutional Investors
Provision of Convocation
Notice (Summary)in English

Other

rights electronically.

The Company has notices of convocation (in the narrow
sense) of, and reference documentation for, General
Meetings of Shareholders, business reports, part offinancial statements, independent auditor’s audit report andaudit report of the audit and supervisory board translated
into English, and posts them on its website and the Tokyo
Stock Exchange’s Company Announcements Service,along with Japanese version of the notices of convocation.
Notices of convocation of General Meetings ofShareholders are posted on the Company’s website andthe Tokyo Stock Exchange’s Company Announcements
Service, prior to being sent out to shareholders.

2. IR Activities
Supplementary Explanation

Regular Investor Briefings
for Analysts and Institutional
Investors

Twice a year, following announcement of
the full year and the first half consolidated
business performance respectively, theCompany holds investor briefings withpresentations by President (CEO) foranalysts from securities firms andinstitutional investors. CFO explains
business result every quarter via
telephone conference on the date theresult is disclosed. In addition to that CFO
or IR manager participates conference
held by investors and makes presentationof company’s business and financial
result.

Supplementary Explanation
Posting of IR Materials on

1. Financial Results
22

Provision of
Explanations
by theCompany
Representative
ProvidedCorporate website

EstablishmentofDepartment
and/orManager in Charge of IR

2. Notices of Convocation and Resolutionof General Meeting of Shareholders
3. Integrated Report
4. Annual Securities Report
5. Electronic Public Notice
OthersInvestor Relations of Group Finance andAccounting

3. Measures to Ensure Due Respect for Stakeholders
Supplementary Explanation
Stipulation of Internal Rules for Respecting The Group stipulates respect for thethe Position of Stakeholders
position of stakeholders in its Code of
Conduct and the related policies, all ofwhich are available on the Company’s
website.
Implementation of Environmental Activities, The Company prepares an Integrated
CSR Activities etc.
Reportfortheperformanceofenvironmental activities, CSR activities andother matters each year and publishes it on
its corporate website.

IV. Matters Related to the Internal Control System
1. Basic Thinking on Internal Control System and the Progress of System
Development
Basic Policy on Internal Control System
The Board of Directors of the Company has approved a resolution as follows regarding aframework for ensuring the appropriateness of business (internal control system) pursuant
to provisions in the Ordinance for Enforcement of the Companies Act.
(1) A system to ensure that the execution of duties by directors and employees of theGroup comply with laws and regulations and the Articles of Incorporation.
・The directors of the Company shall determine the basic policy of compliance in the Groupand establish the organization and rules to ensure its effectiveness.
・The Group Chief Compliance Officer (hereinafter referred to as “Group CCO”) is assigned to theCompany, and a Regional Chief Compliance Officer (hereinafter referred to as “Regional CCO”)
is assigned to each region. The Group CCO is in charge of supervision of compliance promotion
activities in the Group, and the Regional CCO is in charge of supervision of compliance promotion
23

activities in its region.
・The Group CCO and Regional CCO shall strive to enhance and establish the Group's compliancepromotion activities.
・The “Global Compliance Committee” is held by the Group CCO on a regular basis, to share thecompliance promotion policy and contents of compliance promotion activities in each region, andto discuss on the respective issue as necessary.
・We will establish a whistleblowing system in Japan and overseas to ensure a system thatallows us to report compliance violations within the Group and the possibility of such
violations without suffering any disadvantages.
・In order to ensure the reliability of financial reporting, an internal control reporting systemshall be established and its effective and efficient operation and evaluation shall be carriedout.
・Internal audit department of the Company shall carry out an internal audit of the operational
status of the above organizations, institutions.
(2) Matters concerning the storage and management of information related to the
execution of duties by directors･ Information related to the execution of duties by directors will be appropriately stored andmanaged based on the Information Security Management Regulations and other related
regulations based on the Information Management Basic Policy of the Group･ The above storage and management shall maintain the information available to directors
and Audit & Supervisory Board Members.
・The Company’s internal audit department shall carry out an internal audit of the above operational
status.
(3) Regulations and other systems for managing the risk of loss for the Group・The directors of the Company shall determine the basic policy of risk management in theGroup and establish the organization and rules to ensure its effectiveness.
・Risk management shall be carried out by the department in charge of the relevant field,
and Global Risk Management Committee shall be established to select important risks forthe entire Group and formulate countermeasure.
・Internal audit department of the Company shall carry out an internal audit of the operational
status of the above organizations, institutions.
(4) A system to ensure the efficient execution of duties by the directors of the Group・In order to ensure the efficiency of the duties of the directors, the board of directors shallmake reasonable division of duties and appoint appropriate executive officers.
24

・The Representative Director and President shall execute his duties based on the basic policy
specified by the Board of Directors, and discuss and decide on the necessary issues at the
management meeting.
・The Global Strategy Review Committee shall formulate the Group's management strategy
and manage its progress.
・A long-term management vision and a group medium-term management plan shall be
formulated, quantitative and qualitative targets shall be set in order to achieve the plan,and performance management shall be carried out through quarterly monitoring.
(5) A System to ensure the appropriateness of operations in the Group・Based on the above policy, group management rules and other related rules,

we manage

its business, and compliance promotion, risk management and other systems that makeup the internal control system shall cover the entire group, and as a holding company, thecompany shall maintain and operate the internal control system while respecting theindependence of each group company. We shall support and manage it according to thesituation.
・Internal audit department of the company shall cooperate with the internal audit departmentof each company of the Group, and shall grasp and evaluate the maintenance status of
the internal control system of the Group through the audit of each company of the Group.
(6) A system for employees when Audit & Supervisory Board Members request theappointment of employees to assist them・As an organization that assists the duties of Audit & Supervisory Board Members, thesecretariat of the Audit & Supervisory Board Members, which is independent of thecommand and order of directors, shall be established and dedicated employees shall beassigned.
(7) Matters concerning the independence of employees in the previous item fromdirectors and ensuring the effectiveness of instructions given to such employees
・The employee of the secretariat of Audit & Supervisory Board Members in the preceding
item shall not receive the command and order of the directors when receiving an ordernecessary for audit work from Audit & Supervisory Board Members.
・The evaluation of the employee shall be carried out by the Audit & Supervisory Board
Members, and the prior consent of the Audit & Supervisory Board Members shall beobtained for the transfer and disciplinary action.

25

(8) A system for reporting to the Audit & Supervisory Board Members of the Company,
system for ensuring that the person who reported to the Audit & Supervisory Board
Members of the Company will not be treated unfavorably because of the report
・Audit & Supervisory Board Members and Directors shall hold regular meetings to share
information, and Directors and Employees shall report the following matters i. to v. to Audit& Supervisory Board Members without delay in addition to the legal matters.
・The directors and employees of the company and the directors, corporate auditors andemployees of each group company report to the department in charge of the company
regarding matters corresponding to iv. or v. below, and also report directly to the Audit &Supervisory Board Members or the Board of Corporate Auditors. It shall be possible.
・It is prohibited for a person who has made a report to the Audit & Supervisory Board
Members specified in this item to be treated unfavorably because of the reporti. Contents decided by the Directors regarding important matters that affect the
management of the Company or each Group company
ii. Results of internal audits conducted by the department in charge of the Company or eachGroup company
iii. Of the whistleblowing, the content that has a significant impact on the management of
the Company or each Group company
iv. Matters that violate compliance and have a significant impact on the management of theCompany or Group companies
v. Among matters related to quality defects and product defects, matters that have asignificant impact on the management of the Company or each Group company(9) Policy related to the processing of expenses or debts incurred in the execution ofduties by Audit & Supervisory Board Members
When an Audit & Supervisory Board Member make a request for prepayment or
reimbursement of expenses for the execution of their duties, they promptly apply unless it
is deemed that the expenses or obligations related to the request are not necessary forthe execution of his / her duties. Expenses or debts shall be dealt with.

26

(10) Other systems to ensure that audits by Audit & Supervisory Board Members are
conducted effectively
The Board of Auditors receives prior reports on the audit plans of Accounting Auditor andregularly receives reports on the Auditing Plan of Accounting Auditor in order to cooperatewith the internal audit department, supervise Accounting Auditor, and ensure theindependence of the Accounting Auditor from the directors. We shall maintain close
contact with each other by receiving reports of audit results.
2. Basic Thinking on Eliminating Anti-Social Forces and the Progress of System
Development
Basic Policy on Eliminating Anti-Social Forces
The Group’s Code of Conduct has the section titled “Rejection of Relationship with AntiSocial Forces” that specifies “the Group reacts resolutely towards anti-social forces andwill never have any relationship with anti-social forces. Moreover, the Group will resolutely
reject any unreasonable request made by anti-social forces or their equivalent and will not
try to solve the request with money.” The Company ensures that this principle is madeknown thoroughly to its officers and employees.

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

Not Adopted

Supplementary Explanation on Relevant Matter
N/A
2. Other Matters Concerning to Corporate Governance Organization
1. Our Approach to Timely Disclosure
The Company has established the Nippon Sanso Group Code of Conduct to guide theconduct of all Group officers and employees, which stipulates that: we are aware of theimportance of accountability in corporate activities, where we reserve transparency; wealways maintain an open stance to internal and external stakeholders and endeavor todisclose information in an appropriate manner; we are truly open to views and criticism
concerning information disclosure and have good faith communication, which we optimize incorporate activities.
The Company has also maintained Nippon Sanso Holdings Group Investor Relations (IR)Policy (Basic Principles for Dialogue and Disclosures Concerning IR Activities) and published
it on its corporate website.
(https://www.nipponsanso-hd.co.jp/en/ir/management/irpolicy.html)
2. Overview of Timely Disclosure
The specifics of the Company’s system for timely disclosures are as follows:
Executive Officer of the Group Finance and Accounting is responsible for handling27

information for timely disclosure, and Investor Relations of Group Finance and Accounting
and Accounting of Group Finance and Accounting are responsible for announcement thereof.
(1) Disclosure of Information on Decision
Decisions made by the Board of Directors that, in the opinion of Group Chief Compliance
Officer (“GCCO”), fall under the information subject to timely disclosure shall be disclosed ina timely manner by Investor Relations of Group Finance and Accounting or Accounting ofGroup Finance and Accounting.
(2) Disclosure of Information on Occurrence of Material Fact
When any fact that might constitute a material fact has occurred, a business division that
becomes aware of the occurrence must report on it to GCCO and then, where necessary, to
President (CEO), the Board of Directors, and the Management Committee. If GCCO
determines that the occurrence of the material fact falls under the information subject totimely disclosure, the information shall be disclosed in a timely manner by Investor Relationsof Group Finance and Accounting or Accounting of Group Finance and Accounting.
(3) Financial Information
Information on financial results shall be disclosed in a timely manner by Investor Relationsof Group Finance and Accounting and Accounting of Group Finance and Accounting under
the instructions of GCCO subject to prior approval of the Board of Directors.

28

General Meeting of Shareholders
Appointment/dismissal

Appointment/dismissal

Appointment/dismissal

Audit

Consultation

Advisory CommitteeonAppointments
and Remuneration

lath

ReportingBoard of Directors
Nine members
five of whom are outside

Response
Supervision

Appointment/dismissal

Management
Committee

Global Strategy Review Meeting
Chairperson: Representative Director,
President CEO

Audit ofoperations
Audit ofaccounts

Global Risk Management Meeting
Chairperson: Representative Director,
President CEO

Corporate Audit
Coordination

Audit ofaccounts

Ofﬁce
Global Compliance Committee
Internal audit

Holding Company
companies

Chairperson: Group CCO

Divisions

Coordination

29

and

AffiliatedBusiness

Independent auditors

Audit & Supervisory Board

Four members, three of whom are outside

Representative Director, President CEO

Organizational Structure for Timely Disclosure
1. Information on Decision:
2. Information on Occurrence of Material Fact:
3. Financial information:

Accounting data

Business divisions and subsidiaries

Group Chief Compliance Officer (Group CCO)
(Individual responsible for Groupwide information management)

Board of Directors

Representative Director,
President CEO

Management
Committee

Group Chief Compliance Officer (Group CCO)
(Individual responsible for groupwide information management)

Department responsible for timely disclosure(Investor Relations of Group Finance andAccounting)

Department responsible for timely disclosure(Accounting of Group Finance andAccounting )TDnet, corporate website,

EDINET

media, etc.

Investors

30