Last Update: January 31, 2022

Kanamoto Co., Ltd.
Tetsuo Kanamoto
President and CEO
Contact: +81-11-209-1620
Securities Code: 9678
https://www.kanamoto.co.jp
The corporate governance of Kanamoto 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 engages in its business activities based on a management philosophy of creating andstrengthening the trust of shareholders, customers, partner companies, local communities, employees andfamilies to ensure the sustainable development of the Company and the enhancement of its corporate value. To
this end, the Company has established an internal management system. Its fundamental approach to corporate
governance is to implement timely and appropriate business initiatives, striving to maintain and improvetransparency and fairness in the management of the business, and establishing a timely information disclosureand feedback system for management purposes. Please refer to the attached diagram 2 for the Summary ofTimely Disclosure System.
In addition, the Company sets forth the following action guidelines to ensure that this management philosophy
is clearly communicated throughout the Company:
1. Seek change, and mobilize every resource to energize the company
2. Always remember Kanamoto is a team competing to win profits
3. Maintain a self-directed and independent mind
[Reasons for Non-compliance with the Principles of the Japan’s Corporate Governance Code][Supplementary Principle 2-4 a). Ensuring Diversity of Core Human Resources]
The Company believes that it is important to promote human resources who hold a variety of perspectives andvalues in order to respond to new market needs, such as global business development, based on the idea thathuman resources in particular will be the driving force for sustainable growth.
The Company carries out promotions to management positions, which serve as the core of the Company,
chiefly based on character and after giving serious consideration to abilities and achievements, irrespective ofgender, nationality or age. Other details are published on the Company’s website.
URL：https://www.kanamoto.ne.jp/sustainability/sociall/index3[Supplementary Principle 3-1 c). Sustainability and TCFD Initiatives]
Details have not been explicitly stated in the currently disclosed Medium-term Management Plan. However,details regarding the Company’s sustainability initiatives are published on the Company’s website and in the
Company’s integrated report.
URL：https://www.kanamoto.ne.jp/sustainability/
Furthermore, TCFD initiatives are published on the Company’s website.
URL：https://www.kanamoto.ne.jp/sustainability/environmental/index2[Supplementary Principle 4-1 c). Planning for the Succession of the CEO]The Company has established a ranking of management roles and a system of responsibilities for its
management. Concerning the successors of the CEO, the Company considers such succession be based on theindividual’s experience and knowledge, and the succession process is being monitored appropriately.
This principle has applied for any changes in the President and CEO.

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[Supplementary Principle 4-2 a). Executive Compensation Linked to Performance and Based on the Balance ofCash and Company Stock-based Compensation]
Since the Group’s principal business is the rental of construction equipment, results are heavily dependent on
the levels of construction investment in Japan, so there is no compensation directly linked to performance.
However, in order to provide the Company’s Directors, etc. with incentive to sustainably increase theCompany’s corporate value and to further promote shared value between shareholders and them, the Company
will also provide compensation for the grant of restricted shares to eligible Directors, Corporate Officers andemployees. As for the compensation of such Directors, the balance of cash and company stock-based
compensation is determined within the compensation limits decided at the General Meeting of the Shareholders,
respectively.
[Supplementary Principle 4-3 b). Appointment of CEO]
There are no specific procedures in place regarding criteria and requirements for the appointment of the
President and CEO. However, any candidate should have been engaged in the Company’s primary business foran appropriate length of time and should have accumulated detailed experience and knowledge of the business.
The Board of Directors has decided as appropriate based on assessing the aforementioned qualities.
[Supplementary Principle 4-3 c). Dismissal of CEO]As with the appointment of the President and CEO, there are no specific procedures in place regarding thecriteria and requirements for dismissal from office. However, if the CEO has violated laws and regulations andthe Articles of Incorporation, or if the CEO has seriously damaged the corporate value of the Company or isdeemed to be ineligible to hold this office through failing to show the appropriate capabilities, the Board of
Directors will deliberate and decide upon the dismissal of the CEO.
[Supplementary Principle 4-8 a). Meetings Consisting Solely of Independent Outside Directors]
The Company has appointed five (5) Independent Outside Directors and three (3) Independent Outside
Corporate Auditors. The Board of Directors is deemed to be an environment in which individual opinions canbe expressed based on Directors’ respective experience and knowledge. Therefore, the Company does not plan
to hold any meetings consisting solely of independent outside parties. However, such a meeting may be held if
an Independent Outside Director requests it.
[Supplementary Principle 4-8 b). Decision on Leading Independent Outside Director]
There are currently five (5) Independent Outside Directors. At present situation, they communicate andcoordinate with the executive team and cooperate with the Board of Corporate Auditors. Therefore, a “leading
Independent Outside Director” has not been decided upon.
[Supplementary Principle 4-10 a). Establishment of an Optional Advisory Committee]
Independent Outside Directors and Corporate Auditors also attend meetings of the Board of Directors and makedecisions on nomination and compensation. Because necessary recommendations are made as required, noadvisory committee or similar has been established to deliberate matters such as remuneration and nomination.
[Principle 4-11. Prerequisite for Securing Effectiveness of the Board of Directors and the Board of Corporate
Auditors]
The Board of Directors consists of qualified personnel who are familiar with the Company’s business andtherefore able to fulfill their required roles. At least one third of the members of the Board of Directors are
Independent Outside Directors, and the Company has built a highly transparent governance system to utilize
knowledge, such as that concerning professional experience in other fields, and increase the effectiveness of theobjective supervision of management. The Company has also nominated a female Director as a member of theBoard of Directors to ensure diversity.
Also, with respect to the Corporate Auditors, we have appointed a large number of individuals with appropriate
experience and skills, as well as sufficient knowledge of necessary financial, accounting and legal matters.
In terms of assessing the effectiveness of the Board of Directors, the Company recognizes that it can secure theviability of the Board of Directors through listening to the opinions of participants in the Board of Directors
meetings as appropriate. Although no analysis or evaluation has been carried out, the Company receives
opinions about the management, etc. of the Board of Directors at every Board meeting from those in attendance.

-2-[Supplementary Principle 4-11 c). Analysis and Evaluation of Effectiveness of the Board of Directors as a
Whole]At present, the Company recognizes that it can secure the viability of the Board of Directors through listening
to the opinions of participants at the Board of Directors meetings as appropriate. No analysis or evaluation of
the Board of Directors has been carried out, but the Company receives opinions about the management, etc. of
the Board of Directors at every Board meeting from those in attendance. The Company recognizes thatappropriate methods for the analysis and evaluation of the effectiveness of the Board of Directors, anddisclosure thereof, are an issue to be reviewed in future.
[Supplementary Principle 5-2 a). Basic Policy and Review Status of Business Portfolio]
Details have not been presented in the currently progressing Medium-term Management Plan. However, items
related to the business portfolio will be presented when formulating and publishing the next management
strategy, etc.
[Disclosure Based on the Principles of the Japan’s Corporate Governance Code][Principle 1-4. Cross-Shareholdings]
The Company holds cross-shareholdings in certain companies based on a comprehensive evaluation of its
business strategies, its policy of strengthening and maintaining relationships of trust with business partners, andthe potential for expansion of the business trading relationship and so forth. For each cross-holding, the Boardof Directors examines the purpose of holding the stock, the economic rationale for the investment, including
the benefits and risks associated with holding the stock, and its future prospects. If it is deemed that there islimited benefit or economic rationale for a cross-holding, the Company’s policy is to consider reducing theshareholding.
Also, with regard to the exercise of voting rights in cross-holdings, the Company makes a comprehensive
assessment as to whether this will contribute to the improvement of corporate value over the medium to longterm and whether this will enhance shareholder value.
[Principle 1-7. Transactions among Related Parties]
The employment regulations for officials include restrictions related to non-competition obligations, prohibitionof trading on one’s own account, guarantee of debts to Directors by the Company and conflict of interest
transactions. Any transactions that fall under these categories shall be disclosed to the Board of Directors inadvance for approval and shall also be reported to the Board after the transaction has been made.
[Supplementary Principle 2-4 a). Ensuring Diversity of Core Human Resources]
This is as stated in the first part of Reasons for Non-compliance with the Principles of Japan’s Corporate
Governance Code.
[Principle 2-6. Roles as Asset Owners of Corporate Pension Plan]
The Company’s Pension Plan was changed to a corporate defined contribution pension plan in October 2011.
The Company has no role as an asset owner.
[Principle 3-1. Enhancement of Disclosure](i) Company objectives (e.g., management philosophy), management strategies and management plans
These are described in the New Medium-term Management Plan. The New Medium-term Management Plan is
published on the Company’s website.
URL：https://www.kanamoto.co.jp/static/pressrelease/2019/pdf/191206/20191206_1.pdf(ii) Basic views and policies on corporate governance based on each of the principles of the Code
These are outlined in Basic Views in I-1 of this Report.
(iii) The Board of Directors’ policies and procedures in determining the compensation of the senior
management and Directors
Many Directors of the Company concurrently serve as Corporate Officers. Directors’ compensation is a fixedamount paid in respect of management decision-making and the performance of supervisory functions, while
Corporate Officers’ compensation is paid based on an assessment of business performance. Since a certain
portion of the compensation of Corporate Officers’ is linked to business performance and therefore functions as
an incentive, Directors’ compensation and Corporate Officers’ compensation are considered on a clearly
separate basis.
The compensation for Corporate Officers is stated in the Securities Report as employee salaries.
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Compensation for Outside Directors shall be a fixed amount in light of their roles and independent position.
Compensation for Corporate Auditors shall be determined by consultation of the Board of Corporate Auditors,
within the compensation limits decided at the General Meeting of the Shareholders.
Compensation for Directors is entrusted solely to the President and CEO according to a resolution of the Boardof Directors and is determined by evaluation of each Director within the compensation limits decided at theGeneral Meeting of the Shareholders. The compensation for Corporate Officers is determined in the same way.
The Board of Directors will decide on the grant of restricted shares to eligible Directors, Corporate Officers andemployees.
(iv) The Board of Directors’ policies and procedures in the appointment and dismissal of the senior
management and the nomination of candidates for Director and Corporate Auditor
Expert knowledge of or a considerable degree of insight into the rental of construction machinery andequipment, which is the Company’s principal business, is an important prerequisite when appointing executives
and nominating candidates as Directors and Corporate Auditors. On the other hand, the Company also needs
opinions from a wide range of perspectives other than its principal business. Taking this balance into account,
the President and CEO shall draw up proposals for those candidates as deemed necessary for the managementof the Company, and these candidates shall then be appointed by resolution of the Board of Directors.
Also, in terms of the dismissal of Directors or Corporate Auditors, the President and CEO or each Director shallreview from multiple aspects whether the Director concerned displays the required qualities to fulfill his or her
duties, not based simply on results. If dismissal is deemed to be appropriate, the Director shall be dismissed bya resolution of the Board of Directors.
(v) Explanation of the individual appointment and dismissal of the senior management and the nominations ofcandidates for Director and Corporate Auditor by the Board of Directors based on (iv) above
The background of each candidate for Director or Corporate Auditor and the reasons for each nomination are
explained in the reference documents for the General Meeting of the Shareholders. The same procedure applies
for the dismissal of Directors or Corporate Auditors.
There are no plans at the moment to provide explanations for the appointment or dismissal of other members of
the senior management.
[Supplementary Principle 3-1 c). Sustainability and TCFD Initiatives]
This is as stated in the first part of Reasons for Non-compliance with the Principles of Japan’s Corporate
Governance Code.
[Supplementary Principle 4-1 a). Summary of Scope of Delegation from Board of Directors to Executive
Management]
The Company has established and executed the regulations for the Board of Directors that important mattersrelating to the Company’s business, such as matters set forth by laws and regulations and matters set forth in
the Articles of Incorporation, shall require a resolution of the Board of Directors. The criteria for managementand discussion of the Board of Directors are also determined by the regulations for the Board of Directors.
[Principle 4-9. Criteria for Judging the Independence and Qualification for Independent Outside Directors]
The Company has formulated “Criteria for Judging the Independence of Outside Directors” that meets thestandards required by the Tokyo Stock Exchange and the Companies Act for Independent Officers, and has
appointed five (5) Independent Outside Directors who meet these criteria. These criteria are described in thisReport as well as the Notification and Invitation to the General Meeting of the Shareholders.
[Supplementary Principle 4-10 a). Establishment of an Optional Advisory Committee]
This is as stated in the first part of Reasons for Non-compliance with the Principles of Japan’s Corporate
Governance Code.
[Supplementary Principle 4-11 a). Views on Balance of Knowledge, Experience and Ability of the Board of
Directors as a Whole as well as Diversity and Scale]
The Board of Directors consists of directors with diverse perspectives, experience and advanced skills enablingthem to make prompt decisions in response to changes in the business environment. The Company has
appointed persons with professional knowledge and persons with management experience atother companies to be Independent Outside Directors. Please refer to the attached diagram 3 forthe skill matrix. In addition, each Corporate Auditor also attends the Board of Directors meetings. Most of-4-the Directors concurrently serve as Corporate Officers, enhancing cooperation with each of the Company’sbusinesses. The policy and procedures on election are as stated in Principle 3-1 (iv).
[Supplementary Principle 4-11 b). Concurrent Positions of Executives at Other Listed Companies]
The important concurrent positions of the Directors and Corporate Auditors are stated in the business report
every year.
[Supplementary Principle 4-11 c). Analysis and Evaluation of Effectiveness of the Board of Directors as a
Whole]
This is as stated in the first part of Reasons for Non-compliance with the Principles of Japan’s Corporate
Governance Code.
[Supplementary Principle 4-14 b). Policy on Training of Directors and Corporate Auditors]
The Company explains its business philosophy and overview of the business, etc. to new Outside Directors.
Directors and Corporate Auditors may attend various external seminars as required, if they express desire toattend such seminars to help them fulfill their role and such attendance is deemed to be useful for their duties.
[Principle 5-1. Policy for Constructive Dialogue with Shareholders]
The Company has formulated a disclosure policy, and has published “the Basic Policy,” “Criteria for
Information Disclosure,” “Methods of Information Disclosure,” “Silent Period” and “Establishment of In-house
Systems” on its website.
URL：https://www.kanamoto.ne.jp/sustainability/sociall/index.
2.

Capital Structure
Foreign Shareholding Ratio

From 20% to less than 30%[Status of Major Shareholders]Name

Number of Shares Owned(Shares)

Shareholding Ratio(%)

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

3,368,500

8.91

Custody Bank of Japan, Ltd. (Trust account)

2,695,400

7.13

ORIX Corporation

960,000

2.54

Kanamoto Capital Company

915,825

2.42

The Hokkaido Bank, Ltd.

888,982

2.35

Tokio Marine & Nichido Fire Insurance Co.,Ltd.

802,586

2.12

North Pacific Bank, Ltd.

763,008

2.02

SSBTC CLIENT OMNIBUS ACCOUNT

756,631

2.00

CEP LUX-ORBIS SICAV

731,100

1.93

Denyo Co.,Ltd.

625,000

1.65

Controlling Shareholder
ParentParent company listing-5-

Supplementary Explanation
Supplementary explanations on the status of major shareholders are as follows:
1. In addition to the above, the Company owns treasury stock of 924,846 shares.
2. The above 3,368,500 shares which is held by The Master Trust Bank of Japan, Ltd., and 2,695,400 shares
held by Custody Bank of Japan, Ltd. are shares related to trust business.
3. In the Report of Possession of Large Volume provided for public viewing on September 7, 2021, thefollowing shareholding is reported to be attributed to Nomura Securities Co.,Ltd. as of August 31, 2021.
However, since the Company is unable to confirm the actual number of shares held as of October 31, 2021,
it is not included in the status of major shareholders above.
The contents of Change Report to the Report of Possession of Large Volume are as follows:
Name

Number of Shares Owned(Shares)

Nomura International PLC
Nomura Securities Co.

Percentage of shares owned (%)

98,0000.25

1,865,300

4.81

3. Corporate Attributes
Listed Stock Market and Market Section

Tokyo First Section, Sapporo Existing Market

Fiscal Year-End

October

Type of Business

Services

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

From 10 to less than 50

4. Policy for Measures to Protect Minority Shareholders in Conducting Transactions with Controlling
Shareholder
5. Other Special Circumstances Which May Have Material Impact on Corporate Governance
None

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 the Board of Corporate Auditors[Directors]
Maximum Number of Directors Stipulated in
Articles of Incorporation

20

Term of Office Stipulated in Articles ofIncorporation

1 year-6-

Chairperson of the Board

Chairman (excluding the case where the person
concurrently serves as President)

Number of Directors

14

Appointment of Outside Directors

Appointed

Number of Outside Directors

5

Number of Independent Officers Designated fromamong Outside Directors

5Outside Directors’ Relationship with the Company (1)Name

Relationship with the Company (*1)

Attribute

a

b

c

d

e

f

g

h

i

j

k

Susumu Naito

From another company○

Eiji Arita

From another company○

Motoki Yonekawa

From another company○

Ayako Tabata

From another company○

Tetsuya Okawa

From another company○*1 Categories for “Relationship with the Company”
a Executive (a person who executes business; hereinafter, the same) of the Company or its subsidiaryb. Non-executive director or executive of the parent of the Company
c. Executive of a fellow subsidiary of the Company
d. 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, 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. OtherOutside Directors’ Relationship with the Company (2)Name

Designation as
Independent
Officer

Supplementary
Explanation of
the Relationship-7-

Reasons for Appointment

Name

Susumu Naito

Eiji Arita

Designation as
Independent
Officer○○

Supplementary
Explanation of
the Relationship

Reasons for Appointment

Outside Directorof the Company
from January
2017

Since Susumu Naito has successively held
responsible positions in ORIX Corporation, andfurthermore, has gained experience ofmanagement of its subsidiary, he can use his
extensive experience and knowledge cultivated
to contribute to the management of theCompany and provide appropriate advice froma broad viewpoint concerning the Company’sbusiness activities. The Company deals withmultiple leasing companies, so is not unduly
influenced by ORIX Corporation. In addition,
Susumu Naito meets the Criteria for Judging
the Independence of Outside Directors set forth
by the Company, and has been designated as an
Independent Officer on the basis that there is norisk of conflicts of interest with generalshareholders.
The amount of transactions between the
Company and the ORIX Group where he works
is not more than 0.1% of the ORIX Group’s
and the Company’s respective consolidated
sales in the last fiscal year. Therefore, this has
no impact on his independence.

Outside Directorof the Company
from January
2020

Although Eiji Arita has successively held
responsible positions in ORIX Corporation, he
can use his extensive experience andknowledge cultivated to contribute to the
management of the Company and provide
appropriate advice from a broad viewpoint
concerning the Company’s business activities.
The Company deals with multiple leasing
companies so is not unduly influenced by
ORIX Corporation. In addition, Masayuki
Oikawa meets the Criteria for Judging theIndependence of Outside Directors set forth by
the Company, and has been designated as an
Independent Officer on the basis that there is norisk of conflicts of interest with generalshareholders.
Company and the ORIX Group where he works
is not more than 0.1% of the ORIX Group’s
and the Company’s respective consolidated
sales in the last fiscal year. Therefore, this has
no impact on his independence.

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Name

Motoki Yonekawa

Ayako Tabata

Tetsuya Okawa

Designation as
Independent
Officer○○○

Supplementary
Explanation of
the Relationship

Reasons for Appointment

Outside Directorof the Company
from January
2016

Although Motoki Yonekawa has notparticipated in corporate management, he canuse his experience and knowledge as an
executive at a medical institute, which is in anindustry different to that in which the Company
operates, to contribute to the management of
the Company and provide appropriate advice
from a broad viewpoint concerning theCompany’s business activities. In addition,
Motoki Yonekawa meets the Criteria for
Judging the Independence of Outside Directors
set forth by the Company, and has been
designated as an Independent Officer on thebasis that there is no risk of conflicts of interest
with general shareholders.

Outside Directorof the Company
from January
2020

Although Ayako Tabata has not participated incorporate management, she can use her
extensive experience and knowledge developed
as an attorney-at-law to contribute to the
management of the Company and provide
appropriate advice from a broad viewpoint
concerning the Company’s business activities.
In addition, Ayako Tabata meets the Criteria for
Judging the Independence of Outside Directors
set forth by the Company, and ｓhe currently
serves as Director of Lavender Law Office, butthere are no consultancy agreements ortransactions between said firm and theCompany. Therefore, this has been designatedas an Independent Officer on the basis that
there is no risk of conflicts of interest withgeneral shareholders.

Outside Directorof the Company
from January
2021

Although Tetsuya Okawa has not participatedin corporate management, he can use his
extensive experience and knowledge cultivatedas a lawyer to contribute to the management of
the Company and provide appropriate advice
from a broad viewpoint concerning theCompany’s business activities. Although theCompany has entered into a legal counsel
agreement with the lawyer corporation ofwhich Tetsuya Okawa serve as a representative
employee, the amount of compensation isimmaterial. He has been designated as an
Independent Officer on the basis that there is norisk of conflicts of interest with generalshareholders.

[Voluntary Committees]-9-Voluntary Establishment of Committee(s)Equivalent to Nominating Committee or
Compensation Committee

Not established

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

Committee Equivalent toCompensation Committee

Total Committee Members●●

Full-time Members●●

Inside Directors●●

Outside Directors●●

Outside Experts

●

●

Other

●

●

Inside director / Outside director /External expert / None

Inside director / Outside director /External expert / None

Committee’s Name

Chairperson
Supplementary Explanation[Corporate Auditors]

Establishment of the Board of Corporate
Auditors

Established

Maximum Number of Corporate Auditors
Stipulated in Articles of Incorporation

8

Number of Corporate Auditors

5

Cooperation among Corporate Auditors, Independent Auditor and Internal Audit DivisionInternal audits are conducted by Corporate Auditors and Independent Auditor working together and exchanging
information, regarding all aspects of operational activity in accordance with the annual audit plan.
Internal audits are also conducted by Corporate Auditors working together and exchanging information with
Internal Control and Auditing Office and Independent Auditor, regarding all aspects of operational activity inaccordance with the annual audit plan.
Appointment of Outside Corporate Auditors

Appointed

Number of Outside Corporate Auditors

3

Number of Independent Officers Designatedfrom among Outside Corporate Auditors

3

Outside Corporate Auditors’ Relationship with the Company (1)NameAttribute

Relationship with the Company (*1)
ab

- 10 -

c

d

e

f

g

h

i

j

k

l

m

Noriaki Ikushima
KatsunoriMatsushita
Yasushi Ishiwaka

From another company△

From another company△

Certified public
accountant○*1 Categories for “Relationship with the Company”
a Executive (a person who executes business; hereinafter, the same) of the Company or its subsidiaryb. Non-executive director or accounting advisor of the Company or its subsidiaryc. Non-executive or executive director of the parent of the Company
d. Corporate auditor of the parent of the Company
e. Executive of a fellow subsidiary of the Company
f. 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, accounting professional or legal professional who receives a large amount of monetaryconsideration or other property from the Company besides compensation as a corporate auditor
i. 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.) (thecorporate auditor himself/herself only)
k. Executive of a corporation to which outside officers are mutually appointed (the corporate auditor
himself/herself only)
l. Executive of a corporation that receives a donation from the Company (the corporate auditor
himself/herself only)
m. OtherOutside Corporate Auditors’ Relationship with the Company (2)Name

Noriaki Ikushima

Designation as
Independent
Officer○

Supplementary
Explanation of
the Relationship

OutsideCorporate
Auditor of theCompany fromJanuary 2019- 11 -

Reasons for Appointment
Although Noriaki Ikushima has not participatedin corporate management, he can use his
extensive experience and knowledge from his
involvement in administration and management
through his participation in municipal
government to contribute to the auditing systemof the Company and provide appropriate advice
from a broad viewpoint concerning theCompany’s business activities. He has been
designated as an Independent Officer on thebasis that he has no personal relationship with
the Company’s officers and that there is no riskof conflicts of interest with generalshareholders.

Name

KatsunoriMatsushita

Yasushi Ishiwaka

Designation as
Independent
Officer○○

Supplementary
Explanation of
the Relationship

OutsideCorporate
Auditor of theCompany fromJanuary 2019

Since Katsunori Matsushita has successively
held responsible positions in North PacificBank, Ltd., he can use his extensive experienceand knowledge cultivated in the corporate
management and financial field to contribute to
the auditing system of the Company andprovide appropriate advice from a broad
viewpoint concerning the Company’s businessactivities. Katsunori Matsushita is an Audit &Supervisory Board Member of North PacificBank, Ltd., which acts as a bank for theCompany. However, since the Company deals
with multiple financial institutions, it is not
unduly influenced by this bank. He has been
designated as an Independent Officer on thebasis that there is no risk of conflicts of interest
with general shareholders.

OutsideCorporate
Auditor of theCompany fromJanuary 2020

Although Yasushi Ishiwaka has notparticipated in corporate management, he
has considerable knowledge of finance andaccounting as a certified public accountant
which he can use to contribute to theauditing system of the Company and provide
appropriate advice from a broad viewpoint
concerning the Company’s businessactivities.He currently serves as Director of
Yasushi Ishiwaka Certified Public
Accountant Office, but there are no
consultancy agreements or transactions
between said firm and the Company. In
addition, he had been a member of Ernst &Young ShinNihon LLC in the past, but left
the company in June 2018. Therefore, he has
been designated as an Independent Officer
on the basis that there is no risk of conflictsof interest with general shareholders. Also,
the amount of transactions between the
Company and the Nippon High Strength
Concrete Co., Ltd. where he works is not
more than 0.5% of the Nippon High Strength
Concrete Co., Ltd.’s sales and theCompany’s consolidated sales in the last
fiscal year. Therefore, this has no impact on
his independence.

[Independent Officers]
Number of Independent Officers

Reasons for Appointment8- 12 -

Matters relating to Independent Officers
The Company has established the following Criteria for Judging the Independence of Outside Directors.
The Company sets forth the Criteria for the Independence of Outside Directors as follows: if an Outside
Director does not fall under any of the following items, the Outside Director is deemed to be independent fromthe Company with no risk of conflicts of interest with general shareholders.
1. A person who is not a director involved in executing business operations, an executive officer, corporate
officer, manager, auditor, or other employee of the Company or a consolidated subsidiary, or has not been
executing business at the Company or a consolidated subsidiary within the previous ten years;
2. A person who is not a business partner who has received payments from the Company or a consolidated
subsidiary or made payments to the Company or a consolidated subsidiary within the most recent three fiscal
years equivalent to more than 2% of either of the party’s consolidated sales, or a person who is not currently
executing business at that company or has done so within the past three years;
3. A person who is not a specialist, such as a consultant, accounting professional or legal professional who
received monetary or other compensation, other than director compensation, equivalent to 10 million yen or
more per year on average from the Company or any of its consolidated subsidiaries within the last three fiscal
years;
4. A person who is not a spouse or relative within the second degree of kinship of, a director, an executive
officer or corporate officer of the Company, or a consolidated subsidiary, or a person deemed to be
insufficiently independent based on the conditions stipulated in 2 or 3 above;
5. A person who is not a major shareholder of the Company holding 10% or more of the current total voting
rights or a person executing the business of such a major shareholder;
6. A person who is not a director, corporate auditor, accounting advisor, executive officer, or corporate officer
of a company that accepts directors or auditors from the Company or a consolidated subsidiary, its parent
company, or subsidiary; or
7. A certified public accountant (or certified tax accountant) or staff, partner, or employee of the auditing
corporation (or certified tax accounting firm) serving as the Company’s or a consolidated subsidiary’s
independent auditor or accounting advisor, or a person who has been in charge of auditing operations for theCompany or a consolidated subsidiary within the past three years.
[Incentives]
Implementation of Measures to Provide
Incentives to Directors

Ohers

Supplementary Explanation
Although no incentives have been granted to Directors, the Company has a number of Directors concurrently
serving as Corporate Officers. Compensation for Corporate Officers reflects an assessment based on businessperformance. This acts as an incentive since a certain portion of the compensation is linked to businessperformance. The compensation for Corporate Officers is stated in the Securities Report as employee salaries.
As stock-based compensation, the Company introduced a restricted share-based compensation plan for
Directors (excluding Outside Directors) as of the time of the 56th Regular General Meeting of the Shareholders
held on January 28, 2021.
Recipients of Stock Options

None

Supplementary Explanation[Director Compensation]
Disclosure

No individual disclosure- 13 -

Supplementary Explanation
Since the Director’s compensation does not reach the level where disclosure is required, the total amount isshown. The amount of compensation is as follows:
Director compensation: 110 million yen (basic compensation: 99 million yen; restricted share compensation: 11
million yen); Corporate Auditor compensation: 30 million yen; Total compensation: 141 million yen
In addition to the above, the Company also paid 102 million yen in salaries (including bonuses) to employees
concurrently serving as Directors (eight [8] people).
Policy for Determining Compensation Amounts
or Calculation Methods Thereof

Established

Disclosure of Policy for Determining Compensation Amounts or Calculation Methods Thereof
Details are as stated in Principle 3-1. Enhancement of Disclosure in [Disclosure Based on the Principles of theJapan’s Corporate Governance Code].
[Supporting System for Outside Directors and/or Outside Corporate Auditors]
The Company provides Outside Directors and Outside Corporate Auditors with guidance when Board of
Directors meetings are held, along with summary briefings on proposals, and other necessary information
insofar as is possible.
[Status of Persons Who Have Retired from a Position Such as President and CEO]

Retired President and CEO, etc. Holding Advisory or Any Other Position in the Company

Name

Title/
Position

Responsibilities

Working Formand Conditions(Full-time/Part-time,
Paid/Unpaid,
etc.)

Total Number of Retired President and CEO, etc. Holding Advisory or Any
Other Position in the Company

Date of
Retirement
from
Position
Such asPresident

Term of
Office0

Other Matters
There is a system in place, but no one is eligible for mention at present.

2. Matters on Functions of Business Execution, Audit and Supervision, Nomination andCompensation Decisions (Overview of Current Corporate Governance System) Update
Of the five (5) Corporate Auditors of the Company, three (3) of these are Outside Corporate Auditors, and all
three (3) are Independent Officers. The appointment of highly independent Outside Corporate Auditors
strengthens the supervisory function of management and ensures that the Company makes effective use of thefunctions of the Corporate Auditors. The Company is committed to the improvement of corporate governance.
In addition to nine (9) Directors who are familiar with the Company’s business, the Board of Directors includes
five (5) highly independent Outside Directors, with experience and knowledge outside the Company’s sphere- 14 -

of industry. Therefore, the Company considers that the Board of Directors can make prompt and well-informed
management decisions.
Furthermore, based on the provision of Article 427 paragraph 1 of the Companies Act, the Company hasentered agreements with its outside directors and outside auditors that limits their liability for compensation fordamages under Article 423 paragraph 1 of the same law. The amount of the limit on the liability forcompensation for damages based on said agreement is the amount provided by the law.
(1) The Board of Directors
The Board of Directors consists of fourteen (14) members, including five (5) Outside Directors, in order toimplement decision-making and to oversee the execution of business activities from a broader perspective.
Based on the regulations for the Board of Directors, as the highest decision-making body for management
strategies and the implementation of and supervision of the Company’s business plan, the Board of Directors
holds regular board meetings and extraordinary board meetings if necessary to ensure that it responds quickly
to ever changing business conditions.
In addition, Corporate Auditors and Corporate Officers (nine [9] people, excluding those concurrently serving
as Directors) also attend the Board of Directors meetings.
In the fiscal year ended October 31, 2021, Board of Directors meetings were held five (5) times, with anattendance rate for Directors of one hundred (100) percent and for Auditors of one hundred (100) percent, andin addition to this, to achieve more rapid decision-making the Company implemented resolutions in writing
four (4) times based on the provision of Article 370 of the Companies Act.
(2) The Board of Corporate Auditors
The Company is a company with a Board of Corporate Auditors. The Board of Corporate Auditors fulfills anaudit function. It consists of five (5) members (three (3) of whom are Outside Corporate Auditors), and always
participates in the Board of Directors meetings to audit the Directors’ performance of their duties. An
environment is in place that allows for the exchange of opinions as appropriate, including the exchange of
information with management on a regular basis.
(3) Corporate Officer System
The Company introduced the corporate officer system in 2001 and has clarified the responsibilities for
execution of the Company’s business and has improved the communication function of top-down orders andinstructions, such as management policy. It has a system in place to ensure that all employees are aware of theCompany’s policies. The Company thoroughly carries out comprehensive management of each businessdivision and each of its affiliates, as well as formulating detailed management strategies to adapt promptly tochanges in the market environment. There are seventeen (17) Corporate Officers (of which eight (8) areconcurrently serving as Directors).
(4) Establishment of Various Committees
In addition to the above-mentioned structure, the Company has established the Sustainability Committee,
Internal Control Committee and Compliance Committee, making a structure that can respond to a variety ofmanagement issues.
The Sustainability Committee is chaired by Kanamoto’s President and CEO, and aims to establish a foundation
for sustainable growth, which is the Group vision, as well as contribute to the realization of a sustainable
society as a “good corporate citizen” that coexists with society. Matters resolved by the Sustainability
Committee will be monitored through the reporting of such details to the Board of Directors.
The Internal Control Committee is headed by the Administration Division General Manager, and monitors,
verifies and evaluates the preparation and operation of the internal controls pertaining to financial reporting at
the Company and its affiliates based on the “Basic Policy for Establishment of an Internal Controls System,”and carries out improvements and revisions.
The Compliance Committee is chaired by Kanamoto’s President and CEO, and collects important information,such as legal violations and fraudulent acts, and communicates these to the management team in its role ofoverseeing and providing guidance and advice on a company-wide basis to ensure the proper implementation of
the compliance system.
(5) Internal Audit, Audit by Corporate Auditors, and Accounting Audit
Internal audits are conducted by Internal Control and Auditing Office, Corporate Auditors, and Independent
Auditor working together and exchanging information, regarding all aspects of operational activity in- 15 -

accordance with the annual audit plan. With regard to implementation, the Internal Control and Auditing Office
is composed of six (6) members that aim to visit every branch to conduct an audit once every three (3) years,
giving specific indications as to how to improve operations, as well as related guidance. Over the past year,
seventy-one (71) branches have been audited. Furthermore, after the completion of the audit, the audit situationis reported promptly to the President and the Board of Corporate Auditors as audit reports.
The Company’s Board of Corporate Auditors is composed of five (5) members, including three (3) highly
independent Outside Corporate Auditors, and audits the legality and appropriateness of the way that Directors
execute their duties, not only for the Company itself, but for all Group companies. Corporate Auditors work to
gain an understanding of management issues and important risks by attending meetings of the Board of
Directors, conducting interviews with individual Directors, and reading important documents, as well as
conducting audit visit and carrying out interviews at every division of the Company and each of its subsidiaries.
In terms of accounting audits, the Company is audited by Ernst & Young ShinNihon LLC, in accordance with
the Companies Act and the Financial Instruments and Exchange Act. The names of certified public accountants,
who undertake accounting audit duties of the Company and composition of assistants for audit duties, are as
follows.
Managing Partners: Tatsuro Hayashi, Mitsuhiro Fujimori (number of years engaged continuously in audit isseven (7) years or less for both persons)Composition of assistants: twenty-four (24) certified public accountants and twenty (20) others

3. Reasons for Adoption of Current Corporate Governance System
Corporate governance is the basis for enhancing the social value of the Company. The Company has introduced
each of the current systems respectively in order to operate the best and most advanced corporate governancesystem in accordance with the circumstances and scale of the Company and the Group.
The Company ensures transparency in its business in terms of efficient and sound management and corporate
decision-making through the adoption of the Outside Director system. It ensures that responsibilities foroverseeing and executing the Company’s business activities are clearly defined through the Corporate Officer
system.
In addition, by setting the term of office of Directors to one (1) year, the Company maintains a flexible andresponsive management framework. It has adopted the Board of Corporate Auditors system for management
audit purposes.
The Company has a group-wide set of action guidelines. These guidelines provide guidance on corporate
philosophy, and this philosophy forms the basis of the Company’s corporate governance. This is stated insummary format as follows:[Seek change, and mobilize every resource to energize the company]
The external environment in which the Company operates is constantly shifting and changing. If it does notreform itself in response to these changes, the Company may decline and face eventual bankruptcy. Constantself-reform is required for the organization to retain its vitality and energy. A past experience of success iscertain to cause hubristic side effects. All employees should be prepared to quickly put these successes out of
their minds and to learn from their mistakes.
[Always remember Kanamoto is a team competing to win profits]
The Company has various objectives such as contributing to society through the products and services it
provides, paying taxes and providing employment. However, these objectives have no purpose if the Company
does not survive. The survival of the Company can only be guaranteed by a generation of profit. This is within
the power of the Company to accomplish for itself.
However, this does not mean a generation of profit by any means. The Company must comply with rules andnorms of society on both a corporate and an individual level and must not commit any fraudulent or improper
acts in its capacity as a public entity.
[Maintain a self-directed and independent mind]
This means that we should protect the Company and our lives by ourselves, without relying on others. The
Company has the ability and capacity to make great strides in its own right. On the other hand, others do not
help to address or resolve any failures or mistakes the Company makes. The Company undertakes all its
activities at its own risk.
If the external environment is difficult, this is an opportunity for self-reform, which is a way for the Company
to differentiate itself from its competitors.

- 16 -

III

Implementation of Measures for Shareholders and Other Stakeholders

1. Measures to Energize General Meetings of the Shareholders and Smooth Exercise of Voting Rights
Supplementary Explanations
Early Notification of General
Meeting of the Shareholders

The Company provides notification of the General Meeting of the
Shareholders at least twenty (20) days in advance and publishes these details
on its website at an early date no later than the day before the notification(three [3] weeks before the General Meeting).

Scheduling General Meetingof the Shareholders Avoiding
the Peak Day

The Company’s fiscal year ends in October, and the Regular General
Meeting of the Shareholders is held in January, to ensure there are no
clashes with other General Meetings.

Allowing Electronic or
Magnetic Exercise of Voting
RightsVoting via the Internet has been in place since the Regular General Meetingof the Shareholders for the fiscal year ended October 2002 (the 38th
business period).

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

The Company has used an electronic voting platform since the Regular
General Meeting of Shareholders for the fiscal year ended October 2006
(the 42nd business period).

Providing Convocation Noticein English (Translated Fully or
Partially)

The Company provides documents such as convocation notices and business
reports in English on its website, the website for exercising voting rights andelectronic voting platform for voting purposes.

Other
No Measures Taken

2. IR Activities
Supplementary Explanations

Explanation byRepresentative

Preparation and Publication ofDisclosure Policy

The disclosure policy is published on the
Kanamoto’s IR website.
For detailed information, please refer to thefollowing URL.
https://www.kanamoto.ne.jp/jouhou/index.html#page
5

Regular Investor Briefings for
Individual Investors

In addition to participating in IR events and briefings
for individual investors, the Company holds
briefings for individual investors in various
locations.

Yes

Regular Investor Briefings forAnalysts and Institutional
Investors

Briefings are held at the time of the second quarterand full year settlement of accounts, where thePresident and officers in charge give explanations
about the management situation, strategies andmeasures, as well as forecasts. The briefings areposted on the Company’s IR website.
The President, officers in charge, and the IR staff
also hold conference calls, individual meetings, andsmall meetings in response to requests from analysts
and institutional investors.

Yes- 17 -

Supplementary Explanations

Regular Investor Briefings forOverseas Investors

In addition to participating in several conferences
organized by securities companies each year, thePresident, officers in charge, and the IR staff also
hold conference calls, individual meetings, and small
meetings.

Posting of IR Materials on
WebsiteOn the Company’s IR website, we post informationsuch as financial statements, securities reports,
quarterly reports, timely disclosure materials,
materials for financial results briefings, integrated
reports, annual reports, convocation notices, business
reports, bulletins for shareholders, and reports on
corporate governance.
For detailed information, please refer to thefollowing URL.
https://www.kanamoto.ne.jp/

Establishment of Department
and/or Manager in Charge ofIR

Public Relations Office

Explanation byRepresentative

Yes

Other
No Measures Taken

3.

Measures to Ensure Due Respect for Stakeholders
Supplementary Explanations
Provisions to Ensure Due
Respect for Stakeholders inInternal Rules, etc.

The Company’s Ethics Guidelines stipulate measures to ensure due respect
for stakeholders.

Implementation ofEnvironmental Conservation
Initiatives, CSR Activities, etc.

As well as actively using equipment types that comply with pollution
regulations for rental assets, the Company is committed to environmental
conservation activities, such as the use of low-emission vehicles for its
commercial vehicles.
The Company is committed to reporting these initiatives to its stakeholders
and ESG Section of the annual report contains details compliant with a CSR
Report.

Formulation of Policies for
Information Provision to
Stakeholders

The Company has formulated policies for information provision and has
established the Public Relations Committee to ensure there is no disparity
between information disclosed to individual investors and to general market
participants.

Other
No Measures Taken- 18 -

Ⅳ Matters Related to Internal Control System
1. Basic approach and Status of establishment of an internal controls system
As its internal controls system, Kanamoto has established an Internal Control and Auditing Office that
evaluates, improves and when necessary rectifies the status of compliance with the Company’s internal
procedures and rules and with laws and regulations relating to all business activities, the status of branchadministration, and the operation and effectiveness of Kanamoto’s internal controls pertaining to financial
reporting including consolidated subsidiaries, a Legal Office that addresses legal affairs-related issues, aCompliance Committee chaired by Kanamoto's President and CEO, and an Internal Control Committee headedby the Administration Division General Manager, which together comprise an organization corresponding to aninternal controls system.
Kanamoto’s Basic Policy for Establishment of an Internal Controls System is provided below.
(1) System to ensure directors and employees comply with laws and the Articles of Incorporation in theexecution of their duties
Kanamoto Company, Ltd. and its subsidiaries have prepared Ethics Guidelines as part of the corporate
philosophy, and use these as the Company standard for compliance. Under the Compliance Committee chairedby Kanamoto’s president, the Company has disseminated these Guidelines throughout the Company andestablished a system for compliance with laws and the Ethics Guidelines, and has prepared a handbook
summarizing Kanamoto’s corporate philosophy and employee conduct standards, which it distributes to all
executives and regular employees to increase compliance awareness. As a consultation and reporting system,
Kanamoto also has set up in-house and external compliance hotlines, and created a system to resolve problems
quickly when consultations or reports are received directly from employees and other individuals, while strictly
observing confidentiality and ensuring that individuals who report problems do not suffer any disadvantages.
Furthermore, the Company has established a Legal Section reporting directly to the president, to act as anadvisory panel for important legal issues, and a system to enable the Company to give proper legal
consideration to all decision making.
(2) System for preserving and managing information concerning the execution of directors’ duties
Kanamoto retains documents and various information in accordance with laws and ordinances and its internallyestablished document administration regulations and document retention rules. Information is controlled inaccordance with internal information management regulations and general data management rules, and personal
data are administered in accordance with the Kanamoto Rules on Personal Data Protection and the Company’s
personal data protection manual.
(3) Rules and other systems concerning management of loss risk
Kanamoto and its subsidiaries have established mechanisms to recognize and evaluate risks related to thebusiness activities of each division, and prepared systems to avoid such risks. This has created a system capableof clarifying the authority and responsibilities of each division, supervising risk management conditions
throughout the organization under the Board of Directors and discovering new risks. If unforeseen
circumstances have occurred that will have a serious effect on the Company operations, or if there is concern
such circumstances might occur, the Company and its subsidiaries will respond appropriately, and takemeasures to prevent a recurrence, based on its Emergency Response Manual (Contingency Plan).
(4) System for ensuring efficient execution of directors’ duties
In addition to its regular Board of Directors meetings, Kanamoto and its subsidiaries hold extraordinary Boardof Directors meetings from time to time as necessary to decide important matters and to make flexible decisions
concerning the execution and supervision of management strategies and the Company’s business plans. The
Company's Board of Directors receives reports on important matters including the financial condition and othermatters of the Company's subsidiaries. For its management plan, the Company establishes budgets for the next
business fiscal year and medium-term future, which gives the managers of each division the Company’s overall
objectives based on specific numerical targets. Each division sets division-wide objectives, and executes
progress management and specific measures aimed at achieving its goals. Kanamoto has also introduced thecorporate officer system to accelerate management decision-making and clarify supervisory authority andresponsibility for plan execution, and each corporate officer is responsible for achieving the management plan
approved by the Board of Directors. To respond quickly to the severe pace of change in its management
environment, the Company has also shortened the directors’ term of office to one year.

- 19 -

(5) System to ensure appropriate activities at Kanamoto and within the corporate group comprised of theparent company and subsidiaries
To apply Kanamoto’s Ethics Guidelines correspondingly to each company in the Kanamoto Group, theCompany has decided to enlarge the scope of the Compliance Committee and the consultation and reporting
system to every group firm, to ensure the effectiveness of business activities is as extensive as possible.
In addition, in accordance with the provisions of the Financial Instruments and Exchange Act, the Company
and its affiliates maintain an excellent management environment, and work to strengthen company-wide
internal controls, internal controls pertaining to settlement of accounts financial reports and operating processcontrol activities, create internal control systems that enable the Company to make proper and effective
assessments and conduct appropriate operations. Furthermore, under Kanamoto’s internal management system
concerning financial reporting, each organization (individual) has affirmed the following roles.
[1] Managers have the final responsibility for all of the organization’s activities, and prepare and implement
internal controls based on this basic policy.
[2] The Board of Directors has supervisory responsibility for the preparation and operation of the managers’internal controls, and monitors and supervises managers to ensure the financial reporting and internal controls
are executed properly.
[3] The auditors monitor and verify the financial reporting and preparation and operation of the internal
controls from an independent standpoint.
[4] The Internal Control and Auditing Office objectively evaluates from an independent standpoint, theeffectiveness of the internal controls related to financial reporting at Kanamoto and its affiliated companies onbehalf of the Company’s managers in accordance with the audit rules, and when necessary makes proposals
concerning improvements and corrections and reports to the managers and Board of Directors.
(6) Matters concerning individuals requested by the auditors to assist with auditors’ activities
With regard to employees to assist auditors in their activities, the Company will appoint audit staff to provide
operational assistance upon request of auditors. With regard to the matters designated by auditors to beprovided assistance for, the management authority for the nominated employees will be transferred to theauditors, and the employees will not receive instructions or orders from the Company’s directors, thereby
ensuring the effectiveness of instructions from auditors.
(7) Matters related to the independence of employees in the preceding paragraph from directors
Personnel matters for employees assigned to audit activities (appointments, transfers and evaluations) will havethe consent of the auditors.
(8) System for directors and employees to report to the auditors, other systems concerning reports to auditors,
and other systems to ensure audits are performed effectively
To perform audits of the directors, the Company’s auditors attend the meetings of the Board of Directors, andalso attend important meetings and committees, in order to understand other important decisions and thecircumstances of execution of the Company’s business activities. If the directors and employees of Kanamotoand its subsidiaries discover facts that might cause the Company considerable harm, they are to report
immediately to the auditors. The standing auditors will circulate a report and request for managerial decision,and if necessary can request explanations from the directors and employees. Those who reported to the auditors
shall not be treated unfavorably on the grounds of giving such report.
The auditors also meet regularly with the president and representative director, to exchange opinions
concerning issues the Company should address and important audit matters. After audits are completed, theInternal Control and Auditing Office promptly submits an Auditors’ Report concerning the audit results to thepresident and representative director and the auditors.
The auditors and the Internal Control and Auditing Office also exchange information and cooperate in otherways with outside specialists, including the accounting auditors and the Company’s attorneys.
(9) Matters regarding policies related to processing of expenses or liabilities arising from the execution ofauditors' duties
In regards to procedures for prepayment or reimbursement of expenses arising from execution of auditors'
duties and processing of expenses or liabilities arising from execution of auditors' duties, such expenses or- 20 -

liabilities are accounted for upon requests made by the auditors, except where the requests cannot be considerednecessary for the execution of auditors' duties.
(10) System for eliminating antisocial forces
In its Ethics Guidelines, Kanamoto has adopted a resolute stance and set forth provisions to block alltransactions and relationships with antisocial forces, individuals and groups that threaten the order and safety ofsociety and the stable operation of firms. In addition to gathering information from specialized external
agencies and other sources at an internal division, the Company works to educate employees through programs
such as internal training. Moreover, in an emergency the Company will cooperate with the police authorities
having jurisdiction, its advising attorney and other institutions and individuals, to organizationally block andeliminate unwarranted demands from antisocial elements.
2. Operating Effectiveness of Internal Controls
In accordance with the provisions of the Financial Instruments and Exchange Act, Kanamoto and its
subsidiaries evaluate the design and operating effectiveness of internal controls for each period and have theaccounting auditor conduct audits on the appropriateness.
In addition, for the purpose of maintaining and enhancing the level of control, the Internal Control and Auditing
Office conducts audits of Kanamoto and its affiliated companies for each period, and when necessary, reports
to the managers, Board of Directors, Board of Auditors and Internal Control Committee.

Ⅴ

Other

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

Not adopted

Supplementary Explanation

2. Other Matters Concerning Corporate Governance System
For matters relating to corporate governance, compliance, internal controls, insider trading, etc., the Company
treats these matters as important agenda items for meetings and ensures all the Group’s executives are suitably
enlightened about these matters. Please refer to the attached diagram 1 for the Corporate Governance Structure.

- 21 -

Diagram １ Corporate Governance Structure

General Meeting of Shareholders
Election and dismissal

Election and dismissal

Accounting
auditsConsulation
and reporting

Accounting auditor(Audit corporation)

Electionand dismissal(Collaboration)[Decision-making andsupervise]
Board of Directors(Directors and Outside
Directors)

Audit byAuditors
Corporate Auditors(Auditors andOutside Auditors)

President and CEO

Sustainability
Committee

ReportingDirection

Internal Control
Committee
Compliance
Committee

Internal Control and
Auditing Office

Legal Office[Executionof activities]

Internal Audit

Consultation and Advice

Corporate Officers
Operating divisions

Consultation
and Advice- 22 -

Advising attorney

Electionand dismissal

Diagram ２ Summary of Timely DisclosureSystem
Occurrence of material events,
other related information

Decisions(including accounting and other financial information)

Project divisions and information aggregating divisions of subsidiaries(including information managers of Kanamoto Group companies)[Reporting and information confirmation]
Management Headquarters(Corporate administration)
Information managers
Division Manager of
Administration Division

Working groups

Instructions to each division to start work
[Information aggregation][Confirmation of legality]

Administration Division

Legal Advisor

Accounting Division[Confirmation of legality][Report]Board of Corporate
Auditors[Opinions]Credit Management Division

Independent Auditor

Operation Division
Human Resources Division[Materiality of information andexamination of timely disclosure]
Person responsible foraccounting information Public Relations Officeinquiries[Work of preparing
Division Manager of
disclosure material]
Accounting Division[Report]President and CEO

Board of Directors[Approval][Timely disclosure] Public Relations Office[Information disclosure]- 23 -[Approval][Confirmation of legality
and content]
Tokyo Stock ExchangeDiagram ３ skill matrix

Name

Corporate
Management

Dialogue withcapitalmarkets

Rentalbusiness /industryknowledge

GrobalBusiness

Finance/
Accountihg

Legal/
Compliance

KanchuKanamoto

●

●

●

●

●

●

TetsuoKanamoto

●

●

●

●

Hitoshi
Narita●●●TatsuoKanamoto●●●

Kazunori
Hashiguchi

●

●

●

●

Sales/
Marketing

●

●

Akira
Sannomiya

●

●

Jun
Watanabe

●

●

Shun
Hirose●HideakiYamashita

●

●

●

●

●

●

●

●

Susumu
Naito

●

●

●

●

Eiji
Arita

●

●

●

●

Motoki
Yonekawa●

Ayako
Tabata●●Tetsuya
Okawa

●

●

Note above matrix never represent all the knowledge and experience of each person