Corporate Governance Report
Last Update: July 5, 2024

ADEKA Corporation
Hidetaka Shirozume, President and Chief Executive Officer
Contact: Fumitake Koyae, General Manager, Legal Affairs & Publicity Department
Securities Code: 4401
https://www.adeka.co.jp
The corporate governance of ADEKA Corporation (hereinafter the “Company”) is described below.

I.

Basic Views on Corporate Governance, Capital Structure, Corporate Profile and Other
Basic Information

1. Basic Views Updated
ADEKA Group recognizes that strengthening corporate governance is the most important management issue
in order to realize the Group’s business mission and management policy.
The Company has worked to further improve its management efficiency so as to enable speedy decisionmaking and clarify roles (responsibility and authority) of business execution by implementing a series ofmanagement system reforms, including the adoption of the Operating Officers System, the establishment of
the Management Committee, and the optimization of the number of Directors and shortening of their termsof office. The Company passed a resolution at its 159th Annual General Meeting of Shareholders held on June18, 2021, to make amendments to its Articles of Incorporation to transition from a company with an Audit &Supervisory Board to a company with an Audit and Supervisory Committee in order to further enhance
corporate governance by strengthening the function and system for supervision by the Board of Directors. In
addition, at the 161st Ordinary General Meeting of Shareholders held on June 23, 2023, we optimized the sizeand composition of the Board of Directors. The Company will further proceed the separation of management
supervision and business execution (transition to the monitoring board), through the introduction of adelegated executive officer system and revisions to the rules of the Board of Directors and detailed rules
concerning matters to be discussed by the Board of Directors which came into effect around the same time.
Furthermore, the Company reviewed and revised its officers’ remuneration system in June 2008, including
the abolition of a retirement benefit plan for officers, and adopted a stock-based rewards plan under which
compensation is paid in the form of restricted stock in June 2017. We also revised officers’ remuneration at
the 159th Annual General Meeting of Shareholders upon the transition to a company with an Audit andSupervisory Committee. We will proceed with further review to improve incentives.
The Company elected an External Director for the first time in June 2006 from the perspective ofstrengthening the function for supervision over the Board of Directors and ensuring transparency ofmanagement. The Company currently has five Independent External Directors (two of whom are Audit andSupervisory Committee members), account for half of the 10 directors.
The Company will continue to proactively work to reform its management system and further enhance its
corporate governance.
The Company also works to enhance its internal control system. The Internal Auditing Department,
established in July 2005, conducts internal audits of the adequacy and appropriateness of business execution
for all departments from a fair and independent standpoint, and reports on audit results and makes
recommendations, etc. for improvement to top management. In addition, the Internal Control Promotion
Committee, established in March 2007, works to improve and enhance the internal control system under theCompanies Act and the Financial Instruments and Exchange Act.
The Company attaches the greatest importance to constructive dialogues with shareholders, aiming to operate
an open General Meeting of Shareholders in order to reflect opinions of shareholders in its management.
-1-

The Company has established the ADEKA Group Corporate Governance Guidelines (hereinafter the “CGG”)
to explain the Group’s basic views and policy regarding corporate governance. We also defined action
guidelines to ensure that the Board of Directors of the Company and various conference bodies that support
the Board of Directors fully perform their respective roles and functions, and that Directors, Operating
Officers, and employees of the Company organically fulfill their respective roles in building and improving
the level of the corporate governance system. The CGG was revised on June 21, 2024.
(Website where the CGG is disclosed: https://www.adeka.co.jp/en/ir/library/pdf/cgge.pdf)[Reasons for Non-compliance with the Principles of the Corporate Governance Code] Updated
The following information is based on the Corporate Governance Code revised in June 2021 and is also inline with the principles that have been applicable to companies listed on the Prime Market since April 4, 2022.
[Supplementary Principles 3.1.3 (4.2.2)] Initiatives for Issues Related to Sustainability<Initiatives on Sustainability>
The ADEKA Group Management policy is based on “making social contributions through our main lines ofbusiness” and “co-existence and co-prosperity with the civil society.” In line with this management policy,
the Board of Directors of the Company established the ADEKA Group Fundamental Sustainability Policy,“The ADEKA Group contributes to the creation of a sustainable future by meeting stakeholders’ expectations
with technologies and reliability through fair and transparent corporate activities,” which is disclosed on the
Company’s website (https://www.adeka.co.jp/csr/en/csrpolicy.html).
The ADEKA Group Fundamental Sustainable Policy expresses the Group’s basic stance of contributing to asustainable society and ultimately achieve the sustainable growth of our company while fulfilling our basic
responsibilities as a member of society. Guided by this Fundamental Sustainability Policy, all ADEKA Group
employees fulfill the Group’s social responsibilities throughout the supply chain with an awareness ofsustainability, and provide value as a producer of materials that address a variety of social issues. We also
respond to stakeholders’ evolving expectations, enhancing our corporate value by contributing to sustainable
society through our main business.
In order to concretely promote corporate activities based on the Fundamental Sustainability Policy, theSustainability Committee (chaired by the President and Chief Executive Officer) has identified the following
seven Sustainability priority issues in priority domains of E (Environment), S (Social), and G (Governance)and specified a series of key performance indicators (KPIs) for 2030, the target year for achieving the SDGs,
and is implementing company-wide cross-sectional initiatives.
E (Environment)
Conserving the global environment
Supply of eco-friendly products
S (Social)
Creating value that meets society’s expectations
Conduct dialogue with stakeholders
Respect for human rights
Expand opportunities for utilizing human resources
G (Governance)
Enhance Group governance and risk management
In addition, ADX 2026, a three-year medium-term management plan that started in fiscal 2024, sets forth thebasic policy of "Improving social value and achieving sustainable growth through the promotion ofsustainability ~Earning power, sustainability, and a strong management foundation~." We will promotesustainability as a growth strategy and aim to further enhance corporate value through the co-creation of social
value and profits, and we will promote "strengthening earning power and shifting to a high-profit structure,""reducing greenhouse gas (GHG) emissions by expanding environmentally friendly products andtransforming our business structure," and "strengthening our management base."-2-

<TCFD>(An abbreviation for Task Force on Climate-related Financial Disclosures)
As efforts to realize a carbon-free society accelerate worldwide, our group will actively promote "Conserving
the global environment" and "Supply of eco-friendly products" as stated in our Sustainability priority issues
and contribute to the reduction of environmental impact throughout the supply chain. In line with the TCFD
recommendations, we analyze and evaluate the impact of climate change on our business activities, formulate
countermeasures based on multiple scenarios, and improve the resilience of our business. We will also
communicate these efforts to our stakeholders in an easy-to-understand manner.
[Promotion System]
The Company set up a project team for TCFD compliance under CSR Committee (at the time. Currently the
Sustainability Committee) in August 2021 to conduct scenario analysis, etc. of the impact of climate changerelated risks and revenue opportunities, etc. In addition, we established the Carbon-Neutral Strategy
Department in the Corporate Planning & Strategy Division on April 1, 2022, accelerating our initiatives toachieve carbon neutrality by 2050, including the reduction of GHG and environmental impact.
[History of Initiatives]
We announced our support for the TCFD recommendations in February 2022, and from May 2023, wedisclose information for all business segments.
(https://www.adeka.co.jp/csr/en/tcfd01.html)
NIHON NOHYAKU CO., LTD., a consolidated subsidiary positioned at the core of the Group’s life sciencebusiness announced its support for the TCFD recommendations in February 2022 and discloses information
on its mainstay agrochemical business in line with the TCFD framework.
(https://www.nichino.co.jp/csr/csr_climate.html (in Japanese))
We recognize that the challenge for the future is to incorporate countermeasures against risks andopportunities into our business strategy and strengthen our resilience to climate change.
<Investment in human capital and intellectual properties>
In order for the Group to continue its sustainable growth and development, it is essential to invest in humancapital and intellectual property, and we are working on the following initiatives.
[Invest in human capital]
The Group formulates personnel plans and human resource development plans based on the businessstrategies of each department when formulating its Mid-Term Management Plan and confirms the progress ofthe plans whenever necessary. As employees' values and work styles become more diverse, their attitudes
toward careers are also diversifying, and it is necessary to consider job assignments and career developmentthat focus more on the individuality of each individual. In October 2022, we introduced a talent management
system with the aim of visualizing human resources and realizing appropriate human resource management.
Combined with age-specific career training, we will focus on realizing each individual's desired career andfurther improving employee engagement. In May 2024, we decided to introduce two types of stock plans for
employees: (1) Stock Benefit Trust (J-ESOP) and (2) Special Incentive Scheme for Employee Stock
Ownership Association) with the aim of improving the motivation of Group employees.
（① https://www.adeka.co.jp/news/pdf/240419jesop.pdf）（② https://www.adeka.co.jp/news/pdf/240522esoai.pdf）
Through these measures, we aim to improve employee motivation and create opportunities for diverse humanresources to play an active role, as well as to create people who are tailored to the growth stage of eachbusiness.
For details on our efforts to improve human capital in the Medium-Term Management Plan, please refer tothe "Explanatory Materials for the Medium-Term Management Plan 'ADX 2026'" on our website.
（https://www.adeka.co.jp/ir/library/pdf/240530_ADX2026.pdf）[Invest in intellectual property]-3-

As for investment in intellectual properties, the ratio of R&D expenses to net sales for the fiscal 2023 was
4.0%. We will continue to consider technological collaboration with other companies and open innovation
through cooperation between industry and academia with the aim of entering into new business fields (lifescience, environment, energy, and next-generation ICT) that are considered to be the growth drivers for theGroup, in addition to creating new technologies and products by integrating the fundamental and specialized
technologies that the Company has cultivated so far in each business field while striving to promote DX in
production and R&D.
The Company will oversee the progress of the current Mid-Term Management Plan “ADX 2023” throughperiodic reviews, and when formulating new Mid-Term Management Plan, we will strive to disclose andprovide as much information as possible on the allocation of management resources, including investment in
human capital and intellectual properties.
Please refer to the "Explanatory Materials for the Medium-Term Management Plan ADX 2026" on the
Company's website for the investment policy of each business, including intellectual property, to achieve thebasic strategy of the Medium-Term Management Plan, which is to "strengthen earning power and shift to ahigh-profit structure." （https://www.adeka.co.jp/ir/library/pdf/240530_ADX2026.pdf）[Disclosure Based on the Principles of the Corporate Governance Code] Updated
The following information is based on the Corporate Governance Code revised in June 2021 and is also inline with the principles that have been applicable to companies listed on the Prime Market since April 4, 2022.
[Principle 1.4] Policy for Cross-Shareholding and Principle for Exercise of Voting Rights in Cross-Held
Shares<Policy for cross-shareholding>
The Company shall hold shares in companies that are expected to improve the Company’s businessperformance and corporate value, and strengthen the Company’s financial base through capital tie-up,
business collaborations such as joint research and development of new technology, etc., strengthening
business relationship or maintaining a continuous, friendly, and stable relationship with invested companies,
and that may contribute to business development of the Company over the mid- to long-term.
When newly acquiring shares of a business partner of the Company, the appropriateness of holding suchshares shall be determined from the perspective of whether strengthening business relationship with saidbusiness partner will contribute to the improvement of the Company’s business performance and corporate
value, taking into account the current and future profitability, etc. of said business partner.
Regarding shares of business partners held by the Company, the appropriateness of holding shares for all
issues shall be verified every year by comprehensively considering the reasonableness of holding such sharesbased on stock price trends, dividends, recent major financial results, etc., the results of the verification shallbe reported to the Board of Directors, and efforts shall be made to reduce cross-held shares by selling stocks
for which the reasonableness of holding is no longer recognized as reasonable.
In the fiscal year under review, as a result of the sale of 9 stocks (8 of which all shares were sold) and thepurchase of 1 new stock, the number of cross-shareholdings decreased by 7 stocks, or 793 million yen,
compared to the end of the previous fiscal year..
<Principle for the exercise of voting rights in cross-held shares>
In making decisions on the exercise of voting rights on individual proposals of the invested company, for
proposals deemed to possibly prejudice the relationship with the invested company as well as the invested
company’s corporate value seriously or deemed to possibly affect the Company’s interest as a shareholder or
the Company’s business development over the mid- to long-term, the Company shall make decisions on
approval or disapproval after carefully examining these factors. (Please refer to the CGG Exhibit 11.)
[Principle 1.7] Framework for Appropriate Procedures for Transactions with Related Parties
In making a transaction with related parties (officers, major shareholders, etc.), the Company shall go throughexamination by its legal department to ensure fairness in the contents and conditions of said transaction andthe appropriateness of the procedures leading to the decisions, and transactions in which a certain level ofimportance is recognized shall be subject to resolution by the Board of Directors where Independent External
Directors are attending. Furthermore, the Company shall have such procedures audited by the Audit andSupervisory Committee and the Internal Auditing Department in order to ensure the appropriateness of thetransactions and protect the benefit of minority shareholders. (Please refer to the CGG Article 26.)
-4-

[Supplementary Principle 2.4.1] Goals and Status for Promotion of Women, Foreign Nationals, and Midcareer Hires to Middle Managerial Positions / Policies for Human Resources Development and Internal
Environment Development to Ensure Diversity
The Group has identified “expand opportunities for utilizing human resources” as one of its Sustainability
priority issues in its “ADEKA VISION 2030” and strives to promote sustainable growth and enhance its
corporate value over the mid- to long-term by leveraging the perspectives and values of its diverse humanresources. We have developed a work environment where each employee can utilize their personal qualities
and demonstrate their abilities, regardless of gender, age, nationality, etc. Based on the belief that securing
and strengthening the diversity of human resources will create a flexible and resilient management foundationthat is resilient to changes in the environment, and will lead to the sustainable growth of the Group, we
proactively employ a diverse range of people including women, foreign nationals, mid-career hires, theelderly, and people with disabilities.
Please refer to “ADEKA VISION 2030/ Mid-Term Management Plan” on our website for details.
(https://www.adeka.co.jp/en/ir/strategy.html)<Promotion of female employees>
The Company works to expand its childcare leave system and promote work-life balance with the aim ofcreating an environment in which female employees can fully demonstrate their abilities and a workplace
where employees can balance work and childcare. The Company is also proactively promoting initiatives for
expanding its accumulated special leave system for childcare, and preparing brochures to inform employeesof its systems for childcare and nursing care. By reorganizing the task teams, which was established in April
2021, into the D&I project team in June 2022 (renamed the DE&I Project Team in November 2023),
implementing initiatives to foster a culture in which women can play an even more active role. Currently, thepercentage of female employees in the Company’s workforce is approximately 16%, and that in managerial
positions is 5.4%. Our goal is to increase the percentage of female employees in managerial positions to 10%
or more by fiscal 2030. Please refer to “Next generation nurturing support / Action plan to promote women’s
participation and advancement in the workplace” on our website (https://www.adeka.co.jp/csr/ngns.html) for
details on the current status and goals regarding the women’s participation and advancement in the workplace.
<Promotion of foreign nationals>
The Company has hired seven foreign employees in the five years from fiscal 2019 to fiscal 2023. The Grouphas expanded its global operations, and the ratio of overseas sales to total sales exceeded 50% in fiscal 2020.
The percentage of foreign employees in the Group is over 40%. The Group has many overseas offices, andthe percentage of foreign employees at overseas offices (including subsidiaries) has exceeded 90%. Since
localization is being promoted in overseas offices, many foreign executives and managers are playing anactive role (as of the end of March 2024, foreign executives account for 24.2% of all executives, and foreign
managers account for 84.8% of all managers in overseas offices). We will accelerate the assignment of global
human resources, including foreign nationals, to the right positions throughout the Group, by promoting the
introduction of the talent management system described below. Currently, one of our 11 foreign employees
has been appointed to managerial position (currently on secondment). The percentage of foreign employees
in the Company’s workforce is approximately 0.6%. We will continue to actively recruit foreign employees.
Aiming to raise the percentage of foreign employees in managerial positions to the same level as that offoreign employees in the Company’s workforce by 2030, we will work to develop and promote foreign
employees to managerial positions.
<Promotion of mid-career hires>
The Company believes that hiring human resources with experience in upstream and downstream industries
in the value chain or those with a high level of expertise is indispensable for the promotion of new innovationor business reform and is proactively recruiting mid-career hires. Currently, mid-career hires account for 16%
of our workforce, however, the percentage has increased in recent years. The Company employed 56 midcareer hires in the three years from fiscal 2021 to fiscal 2023, and the average ratio of mid-career hires overthe past three years has been 30%. Currently, mid-career hires account for 11% of employees in managerial
positions. Aiming to raise the percentage of mid-career hires in managerial positions to the same level as thatof mid-career hires in the Company’s workforce by 2030, we will work to develop and promote mid-careerhires to managerial positions.

-5-<Policies for human resource development and internal environment development to ensure diversity>
The Company has identified “respect the human nature and personal qualities of employees” as one of ourhuman resources principles. Based on this principle, we will recruit human resources with diverse values,
careers, and backgrounds as well as implement various development measures, including career developmenttraining, so that all employees can fully demonstrate their abilities and personal qualities and play an activerole globally. The Company believes that in order for diverse human resources to play an active role, we needto have a system that allows them to have a work-life balance and a flexible work style that suits eachindividual’s needs. The Company has adopted work styles that are not restricted by time or space, including
flextime systems, discretionary labor systems for professional work and discretionary working systems for
management-related work, and telework systems. The Company will further promote its current initiatives in
the future to work on further system revisions, including the formal introduction of a working hour interval
system to ensure appropriate intervals between each working shift that is currently being tried. In addition,
we also believe that in order for individual human resources to play an active role in the organization, we needto understand the aptitude of each person and create a career development and training plan suitable for eachindividual. To that end, we intend to assign employees to more suitable jobs and provide them with individual
training plans based on their work aptitude, wishes, and motivation, etc., and we proceed with the introduction
and development of the talent management system. Furthermore, We have organized a company-wide DE&I
project team and are working on various initiatives in order to develop an environment in which employees
accept and respect each other’s personal qualities. Starting with the promotion of women's careers, we willcontinue to promote initiatives aimed at diversity, equity and inclusion, such as conducting training to promote
understanding of LGBTQ, with the aim of becoming a company where all employees can actively play theirrole.
[Principle 2.6] Roles of Corporate Pension Funds as Asset Owners
As the Company’s retirement pension plan is a defined contribution corporate pension plan, there is no
investment in the corporate pension fund and no impact on the Company’s financial position.
[Principle 3.1] Full Disclosure(i) Company objectives (management policies, etc.), business strategies and management plan
The Group’s business mission is to grow in a sustainable way and raise its mid- to long-term corporate value,
through the provision of material products and solutions using advanced technologies, thereby contributing
to the creation of prosperous lives and sustainable society. In order to realize our business mission, we haveestablished the following two policies as “ADEKA Group Management Policies.” (CGG Article 2)• “To be a company that is progressive and dynamic with a keen attitude towards the new changing tide”• “Creating a better future for the people of the world”
The Group’s management policies and Mid-Term Management Plan are disclosed on our website.
Management policies: https://www.adeka.co.jp/en/company/philosophy.html
Mid-Term Management Plan: https://www.adeka.co.jp/en/ir/strategy.html(ii) Basic views and policies on corporate governance (entire CGG)
Please refer to “1. Basic Views” of this report.
(iii) Policies and procedures in determining the remuneration of the senior management and Directors (CGG
Exhibit 4)
The Company’s officers’ remuneration shall consist of officers’ remuneration as compensation for the
performance of their duties, bonuses linked to the business performance of the Company and individual
officers during the relevant fiscal year, and stock-based compensation as an incentive for the improvement of
mid- to long-term business performance and stock price. As for the remuneration of Directors, consultation
shall be made with the Nomination and Remuneration Committee, and decisions are made by the resolutionof the Board of Directors, taking into consideration opinions and advice of the Nomination and Remuneration
Committee.
For specific details, please refer to “Disclosure of Policy on Determining Remuneration Amounts andCalculation Methods” in [Director Remuneration] below.
(iv) Policies and procedures in the appointment/dismissal of the senior management and the nomination ofcandidates for Directors (CGG Exhibit 3)-6-

The Company discloses its policies and procedures for the appointment/dismissal of senior management andthe nomination of candidates for Directors in the CGG. In order to enhance transparency and fairness in theappointment/dismissal and nomination, consultation shall be made with the Nomination and Remuneration
Committee regarding the executive personnel proposal based on the criteria set forth in said policies anddecisions are made by the resolution of the Board of Directors, taking into consideration opinions and adviceof the Nomination and Remuneration Committee.
(v) Explanation with respect to the individual nomination of candidates for Directors and dismissals of
Directors
When nominating candidates for Directors and dismissing Directors, the Company shall disclose the reasonsfor each nomination and dismissal in the reference documents of the notice of the General Meeting of
Shareholders, in order to enhance the provision of information to shareholders, in light of the fact that theseare matters to be resolved at the General Meeting of Shareholders under the Companies Act.
[Supplementary Principle 4.1.1] Authorities of the Board of Directors, and the Scope of the Delegation of
Authorities to Managements from the Board of Directors<Authorities of the Board of Directors>
The Company defines important management matters that should be resolved by the Board of Directors in
the “Board of Directors Regulations,” details of which are provided for in the “Detailed Regulations for
Matters to be Resolved by the Board of Directors.”<Delegation of authorities from the Board of Directors to Managements or other business executors>
With respect to business execution other than matters to be resolved by the Board of Directors mentioned
above, that is, business execution delegated from the Board of Directors to managements or other businessexecutors, important matters are deliberated on and determined by the Management Committee in accordancewith the Management Committee Regulations, and other matters are approved by the authorized person(Representative Director & President, Operating Officer in charge, or General Manager of the relevant
department) in accordance with the Decision Regulations before being implemented. (Please refer to the CGG
Exhibit 1.)[Supplementary Principle 4.1.3] Establishment and Implementation of a Succession Plan for CEO and OtherTop Executives, and Development of Candidates for Successors
The Nomination and Remuneration Committee formulates a succession plan to appoint the most suitableperson as Representative Director who can strive to promote sustainable growth of the entire Group andenhance its corporate value over the mid- to long-term, in response to the business environment andmanagement issues surrounding the Group. The succession plan is reported to the Board of Directors. As forthe succession plan, the Nomination and Remuneration Committee shall be proactively involved in andappropriately supervise throughout the whole process under the plan, and the President and Representative
Director shall be determined by a resolution of the Board of Directors based on the results of the evaluationby the Nomination and Remuneration Committee.. In this way, transparency and objectivity are ensured in
executive appointments to nominate successors to top management.
[Principle 4.9] Criteria for Determining Independence of Independent External Directors
The Company nominates those who satisfy the externality requirements stipulated in the Companies Act ascandidates for External Directors. Of candidates for External Directors, the Company nominates as candidates
for Independent External Directors those who are not likely to have a conflict of interest with generalshareholders in light of personal relationship and capital relationship with, and existence and scale of business
relationship with the Company, in addition to independence standard set by Tokyo Stock Exchange, Inc., andthose who meet each of the requirements of the “Criteria for Determining Independence of External
Directors,” criteria established independently by the Company. (Please refer to the CGG Exhibit 2.)[Supplementary Principle 4.10.1] Involvement and Advice from the Independent External Directors regarding
Nomination, Remuneration, and Other Matters
The Company established the Nomination and Remuneration Committee in November 2020 for the purposeof strengthening fairness, transparency, and objectivity of the procedures for nominating candidates for
Directors and determining their remuneration, etc., thereby further enhancing its governance.

-7-

Please refer to [Voluntary Establishment of Committee(s)] in “II. Business Management Organization andOther Corporate Governance Systems regarding Decision-making, Execution of Business, and Oversight inManagement” described below for more information on the authorities and roles of the Nomination andRemuneration Committee (Article 6 of the Nomination and Remuneration Committee Regulations),
composition, and our views on the independence of the Nomination and Remuneration Committee (Article 2of the Nomination and Remuneration Committee Regulations).
[Supplementary Principle 4.11.1] View on the Appropriate Balance between Knowledge, Experience, andAbilities of the Board of Directors as a Whole and on Diversity and Appropriate Board Size / Policies andProcedures for Nominating Directors
The Company believes that ensuring the appropriateness of scale of the Board of Directors and its diversity
is essential for improving the effectiveness of the Board of Directors and has defined its view on diversity andscale of the Board of Directors (Article 6) and “Criteria for nomination of candidates for Directors andappointment of Operating Officers” (Exhibit 3) in the CGG.
With the diversification of the Group’s business and the acceleration of its business expansion overseas,
incorporating diverse values into our business operations is consistent with our mission and policy. Therefore,
the Company strives to ensure diversity of members of the Board of Directors from a fair and broad
perspective when nominating candidates for Directors. As for the scale of the Board of Directors, the number
of Directors shall be eighteen or less as stipulated in the Articles of Incorporation (of which the number of
Directors who are Audit and Supervisory Committee Members shall be five or less) and shall be limited to
the necessary minimum number in order for the Board of Directors to make decisions in a flexible and speedy
manner.
In addition, the Company has identified skill items such as knowledge, experience, and abilities required for
Directors in light of the Company’s management policy and strategies (mid-and-long term visions, Mid-Term
Management Plan). A skills matrix of Directors listing the balance of skills of each Director has been
determined by the resolution of the Board of Directors after deliberation of the Nomination and Remuneration
Committee and disclosed on the Company’s website (https://www.adeka.co.jp/en/company/profile.html). A
list of skill items is also presented in Exhibit 3 in the CGG.
The skills matrix will be utilized to confirm the balance of skills of candidates when nominating candidates
for the next Director. It will also be disclosed in the notice of the General Meeting of Shareholders to provide
information to shareholders.
[Supplementary Principle 4.11.2] Status of Concurrent Positions of Directors
The status of concurrent positions of Directors of the Company is disclosed in “Officers” in the Business
Report as well as in the proposal for election of Directors in the reference documents of the notice of theGeneral Meeting of Shareholders.
[Supplementary Principle 4.11.3] Outline of Results of Analysis and Evaluation of the Effectiveness of theBoard of Directors as a Whole
The Company shall carry out an analysis and evaluation of the effectiveness of the Board of Directors at theend of each fiscal year for the purpose of enhancing the effectiveness of the Board of Directors and improving
the Company’s corporate value. (CGG Article 17)
In fiscal 2023, we evaluated the effectiveness of the Board of Directors through the following process.
[Evaluation Process] 1) Collect questionnaire responses from all Directors
2) Report the analysis results of the questionnaire to the Board of Directors3)Exchange Opinions at a meeting attended only by External Directors[Questionnaire Items] 1) Roles and functions of the Board of Directors
2) Scale and composition of the Board of Directors
3) Management of the Board of Directors
4) Cooperation with audit bodies
5) Relationship with External Directors
6) Relationship with shareholders and investors-8-7) Improvement status from the previous fiscal year
To ensure transparency and objectivity, the Company uses a third-party organization within the following
scope.
[Scope of Use of the Third-Party Organizations]
1) Consider the questionnaire contents
2) Distribute and collect the questionnaires and tabulate and analyze the results3) Report the analysis results of the questionnaires to Board of Directors, etc.
[Outline of Evaluation Results and Challenges]
As a result of the above evaluation, the Company confirmed that the Board of Directors engages in openminded discussions, against the backdrop of a well-balanced composition, the election of External Directors
with high levels of expertise, smooth communication between Directors, and proceedings that encouragecontribution to the discussions. The Company thus deemed that the results indicate an appropriate level of
effectiveness of the Board of Directors. In the evaluation of the effectiveness of the Board of Directors in theprevious fiscal year, we recognized issues such as "a slightly large number of directors" and "a somewhat
large number of items to be reported," but as a countermeasure in the current fiscal year, we narrowed down
the number of directors (16 → 10) and reviewed the agenda items of the Board of Directors, and as a result,
We have been able to obtain very positive evaluations such as " The Board of Directors is now able to devote
more time to discussions from a medium- to long-term perspective." and " It became easier for directors to
express their opinions, and discussions in the Board of Directors became more active." On the other hand,along with these changes, there were comments such as "It is desirable to enhance reporting on the progressand results of matters reported to the Board of Directors regarding decisions on business execution" and"Information on on-site activities has decreased slightly," and we recognized that "enhancement of postmortem reports" and "expansion of opportunities to learn and feel the workplace" are issues to further improvethe effectiveness of the Board of Directors in the future..
[Addressing the Challenges]
With regard to the enhancement of post-mortem reports, we will make timely reports in accordance withthe rules of the Board of Directors and the detailed regulations on matters to be discussed by the Boardof Directors, and we will strive to enhance the post-mortem reports.
In addition, in order to expand opportunities to learn about and feel the workplace, we are consideringenhancing opportunities for outside directors to visit sites and engage in dialogue with management andemployees by inspecting the sites of each division and exchanging opinions with management andemployees on product market conditions, the business environment, the competitive situation, and othermatters.
[Supplementary Principle 4.14.2] Training Policy for Directors
The Company provides officers with training before and after they take office. Thereafter, we offer periodic
training to update their knowledge and skills so that they can deal with the revision of laws, and trends of newpractices and risk problems. Furthermore, the Company provides External Directors with orientation on the
Company’s business lineup, finances, and organization, etc. before they take office so that they can fully
perform their functions. Thereafter, the Company provides them with training and information, etc. as
appropriate upon request of External Directors. (Please refer to the CGG Exhibit 5.)[Principle 5.1] Policy for Dialogues with Shareholders
The Company develops a system for and works on promoting dialogues with shareholders as follows. (Pleaserefer to the CGG Exhibit 9.)(1) Constructive dialogues with shareholders by Representative Directors and executives-9-(2) Designating the Legal Affairs & Publicity Department as a responsible department in charge of SR andIR, and designating the officer in charge of the Legal Affairs & Publicity Department as a Supervisory
Manager thereof(3) Building an IR cooperation structure with the Corporate Planning & Strategy Division, Finance &Accounting Department, and other departments(4) Carrying out a substantial shareholders survey to identify shareholders/investors with whom the Company
should have constructive communication(5) Expanding opportunities to have dialogues with shareholders, including individual interviews, small
meetings, IR results briefing, and General Meetings of Shareholders and shareholders meetings held
thereafter(6) Providing feedback to management on opinions and concerns of shareholders identified through dialogues
with them(7) Strictly managing insider information and thoroughly complying with the fair disclosure principle[Status of Dialogue with Shareholders](1) Results of dialogue
Dialogue with shareholders, investors, etc. conducted during fiscal 2023 is as follows.
<IR>・Financial results briefing: 4 (half year)
・Business-specific briefings: 1 (Life Science)・Exhibited at IR Fair: 3 (Nikkei IR Fair, Nomura Asset Management Fair, and “Individual Investor
Appreciation Day “Spring IR Festival 2024”)
・Individual IR interviews: 175 (including 5 IR interviews with the President and CEO and other directors)<SR>・Engagements with major institutional investors: 12 (handled by the director in charge of the Legal Affairs
and Public Relations Department)(2) Key responders to shareholder dialogue
We place emphasis on constructive dialogue with shareholders and strive to have dialogue withshareholders through various opportunities, management by the representative director and the executive
officers in charge of finance and accounting.
As an internal organizational structure to promote constructive dialogue with shareholders, the Legal
Affairs and Public Relations Department has been designated as the department responsible for SR(shareholder relations) and IR (investor relations), and the director in charge of the Legal Affairs and Public
Relations Department has been designated as the person responsible for these functions.
(3) Outline of Shareholders Who Have Conducted Dialogue
Domestic institutional investors were passive, actively managed investors, and foreign institutional
investors were primarily value stock managers. We held dialogues with analysts, fund managers, ESG
promoters, responsible investment promoters, and stewardship promoters. In fiscal 2023, we increased thenumber of dialogues and worked to improve the quality of dialogues by including external directors inattendance.
(4) Main topics of dialogue and shareholder concerns
The main topics of the dialogue were as follows.
Environment: Carbon neutrality, GHG reduction, palm oil, TNFD
Society : DE&I, Human Resource Strategy, Talent Management, Employee Engagement, Human Rights
Governance: Effectiveness of the Board of Directors, Nomination and Remuneration System, Succession
Planning, the Composition, Diversity and Independence of the Board of Directors, Term of
Office of External Directors, Director Skills Matrix, Listed SubsidiaryBusiness Portfolio: Life Sciences and Food Products
Financial Strategy: Capital Efficiency, Cash Allocation, Liquidity, Cross-shareholdings
Integrated Report: Materiality, Purpose, and Structure of the Integrated Report- 10 -

Dialogue: Enhancement of opportunities for dialogue with external directors, voices of external directors,
timing of dialogue(5) Examples of dialogues in which shareholders have become particularly aware and in which shareholders'
understanding has been gained through explanations by top management and others
In particular, we have received suggestions from shareholders on the following points and reaffirmed what
we should do in the future.
・Correlation and consistency between medium- to long-term targets and various ESG initiatives
・Importance of quantitation and planning (roadmap) in sustainability disclosure
・Human resource strategies to increase corporate value over the medium to long term
・Relationship between the external directors’ tenure and their independence, and our approach to skills of
external directors (emphasis on corporate management experience, etc.)
・Diversity of the Board of Directors (necessity of female directors and the number)・Improving the fairness and transparency of the nomination and remuneration decision process and successor
planning
・ Officer remuneration design (ratio of performance-linked remuneration, positioning of non-financial
information)
・Importance of management with an awareness of capital efficiency
・Creation of integrated reports that are easy to read and convey
On the other hand, we conveyed the followings and gained understanding.
・Impact of industrial complexes and raw material suppliers (upstream industries) on GHG emission
reductions
・Status of initiatives for responsible palm oil procurement
・Human resource strategy (talent management, employee engagement, etc.)
・Status of Initiatives to Address Human Rights (Human Rights Due Diligence, Grievance Mechanism)
・Progress of governance reform (improvement of the operation of the Board of Directors, succession
planning, transparency and fairness of the process of nominating and determining remuneration of
officers, positioning of non-financial information in executive remuneration, etc.)
・Approach to Capital Efficiency (Background of Disclosed ROIC Figures by Business, Future Initiatives,
etc.)
・Approach to business portfolio (progress of synergies in the life sciences business, etc.)(6) Implementation status of feedback to top management and the Board of Directors from the opinions andconcerns of shareholders identified in the dialogue
The results of the dialogue are reported to the board of directors, and also shared and discussed with theExternal Directors and related departments.
(7) Matters incorporated based on dialogue and subsequent feedback
Based on dialogue with shareholders, the Company has reviewed the composition, size, functions, and rolesof the Board of Directors. In addition, in the new Medium-Term Management Plan disclosed on April 1 thisyear, we have newly disclosed ROIC targets as financial indicators. We are also working to further enhance
the content of the Integrated Report, such as clarifying strategies for ESG initiatives, raising awareness of theroadmap, and expanding the voices of external directors with reference to dialogue with shareholders. In
addition, the results of the dialogue are shared with the meetings and projects in charge of each ESG field,
and are used as useful reference information for deepening our efforts in the future.
[Measures to realize management that is conscious of capital costs and stock prices]
In order to realize management that is conscious of the cost of capital and stock price, we believe that itis necessary to make investments and review our business portfolio to achieve sustainable growth, while fully
aware of the cost of capital and capital profitability. In addition to improving profitability, the Company will
- 11 -

continue to strive to reduce assets and improve capital efficiency. In the medium-term management plan
"ADX 2026" disclosed on April 1 this year, the basic strategy is to "strengthen earning power and shift to ahigh-profit structure." We will promote initiatives to improve capital efficiency by analyzing and evaluating
capital profitability based on ROIC by business, verifying the effects of capital investment, strengthening
asset management related to business activities, and reviewing cross-shareholdings. In addition, we will seek
to raise corporate awareness through TV commercials, briefings for individual investors, official websites,
etc., and promote initiatives such as continuing to hold business-specific briefings for institutional investors
and strengthening disclosure of ESG-related information, etc., thereby gaining the understanding ofshareholders regarding the Group's business strategies.

2. Capital Structure
Foreign Shareholding Ratio

From 20% to less than 30%[Status of Major Shareholders] Updated
Name / Company Name
The Master Trust Bank of Japan, Ltd. (Trust account)
Custody Bank of Japan, Ltd. (Trust account)
Asahi Mutual Life Insurance Company
Custody Bank of Japan, Ltd. as trustee for Mizuho Bank,
Ltd. Retirement Benefit Trust Account re-entrusted by
Mizuho Trust and Banking Co., Ltd.
ADEKA Business Partners Shareholdings Association
National Mutual Insurance Federation of Agricultural
Cooperatives
The Norinchukin Bank
Zeon Corporation
THE BANK OF NEW YORK MELLON 140042
Showa Kosan Co., Ltd.
Controlling Shareholder (except for Parent
Company)
Parent Company

Number of Shares
Owned
12,180,000
9,183,500
4,053,600
3,770,000

Percentage (%)

3,156,500
2,334,600

3.06
2.27

2,244,000
2,188,500
2,153,042
1,870,440

2.18
2.12
2.09
1.82

–––
No

Supplementary Explanation–––

3. Corporate Attributes
Listed Stock Market and Market Section

Tokyo Stock Exchange (Prime Market)

Fiscal Year-End

MarchType of Business

Chemicals

Number of Employees (consolidated) as of
the End of the Previous Fiscal Year

More than 1,000

Sales (consolidated) as of the End of thePrevious Fiscal Year

From 100 billion yen to less than 1 trillion yen

Number of Consolidated Subsidiaries as of
the End of the Previous Fiscal Year

From 10 to less than 50- 12 -

11.83
8.92
3.94
3.66

4. Policy on Measures to Protect Minority Shareholders in Conducting Transactions with Controlling
Shareholder–––
5. Other Special Circumstances Which May Have Material Impact on Corporate Governance Updated
Significance of owing a listed subsidiary based on the views and policy of the Group management, andmeasures to ensure the effectiveness of governance system of the listed subsidiary<Views and policy of the Group management>
In order to realize the ADEKA Group’s management policy based on “making social contributions throughour main lines of business,” and “co-existence and co-prosperity with the civil society,” the Group is
conducting Group-wide management under ADEKA VISION 2030 “An Innovative Company Contributing
to a Sustainable future and Affluent Lifestyles.”In our new Mid-Term Management Plan “ADX 2026,” which is positioned as the Second stage toward therealization of ADEKA VISION 2030, we have set “the strengthening of our management foundation” as oneof our basic strategies. In order to strengthen the management foundation of the ADEKA Group, we willfurther strengthen group governance and group risk management, and aim to become a resilient company bybuilding a sound financial base..
Furthermore, the Group has identified seven Sustainability priority issues, including supply of eco-friendly
products, conserving the global environment, and creating value that meets society’s expectations, aiming tocontribute to the enrichment of people’s lifestyles around the world.
The Group’s basic management policy is to share its management policy and visions throughout the Group,and enhance the Group’s overall strength and, ultimately, the corporate value of the entire Group throughcooperation and collaboration among the Group companies so as to realize the common mission of“contributing to a sustainable future and affluent lifestyles.”To this end, we are striving to strengthen the Group's management foundation by developing a group risk
management system that includes the supply chain, in addition to by fostering common values for the ADEKA
Group and strengthening Group governance and group compliance.
<Significance of owning a listed subsidiary NIHON NOHYAKU CO., LTD.>
In “ADX 2026”, the ADEKA Group aims to further enhance corporate value through the co-creation of social
value and profits, with the basic policy of "Improving social value and achieving sustainable growth throughthe promotion of sustainability ~Earning power, sustainability, and a strong management foundation~."To this end, it is necessary to promote sustainability, develop new businesses that lead to the resolution ofsocial issues, and strengthen earning power..
As one of our measures to strengthen collaboration and demonstrate our overall strength in the life sciencebusiness, we entered into a capital and business alliance agreement with NIHON NOHYAKU CO., LTD. andmade it a consolidated subsidiary in September 2018, with the aim of adding the agrichemical business to ourportfolio and accelerating the expansion of our life science business. By combining and integrating
technologies of both companies, we hope to contribute to solving various social issues related to global foodproblems, health, and food safety and security.
As NIHON NOHYAKU CO., LTD. was established in 1928 by spinning off the agrichemical division of theCompany, the company has an extremely high affinity with the Company’s business and organizational
culture, and various technological exchanges have been conducted between research departments of the twocompanies. In order to pursue synergies between organic synthesis technologies of the Company andformulation technologies of NIHON NOHYAKU CO., LTD., we are promoting the exchange of humanresources, complementing each other in the R&D fields, and facilitating mutual use of production
technologies and bases of both companies, thereby working to expand the Group’s life science business.
In order to maximize synergies with NIHON NOHYAKU CO., LTD., it is necessary for the company toflexibly raise funds from the capital market while maintaining its managerial independence. The Company
also believes that maintaining the company as a listed subsidiary will contribute to maintaining and increasing
the motivation of the company’s employees as well as recruiting excellent human resources. Based on thisbelief, the basic policy of the capital and business alliance agreement with the company is to respect theindependence of the company’s management.
- 13 -

<Measures to ensure the effectiveness of governance system of the listed subsidiary NIHON NOHYAKUCO., LTD.>NIHON NOHYAKU CO., LTD. is listed on the Tokyo Stock Exchange. Pursuant to the basic policy of thecapital and business alliance agreement with the company, the Company shall respect the independence of thecompany’s management and will not engage in any conduct that may damage the benefit of minority
shareholders of the company or violate the principle of equality of shareholders in transactions, etc. with thecompany. In addition, as a parent company, the Company exchanges information and holds debriefing on
corporate governance and compliance systems and the status of their activities with the company as needed
and provides advice and guidance on compliance and the establishment of internal control systems, etc. asnecessary.
NIHON NOHYAKU CO., LTD. has increased the transparency of its Board of Directors’ decision-making byraising the ratio of independent external directors to the Board of Directors from 1/3 (5/15) to half (6/12) by
the resolution at the General Meeting of Shareholders held in June 2023 and by establishing a governancecommittee, thereby working to strengthen its oversight of conflicts of interest. From the perspective ofensuring the independence of management of NIHON NOHYAKU CO., LTD., the Company is not directly
involved in its management decision-making and business judgment. However, the Company shall require
NIHON NOHYAKU CO., LTD. to report in advance only on important matters (for example, matters that
may have a material impact on the consolidated financial statements and the Company’s timely disclosure) inorder to ensure governance as a parent company.

- 14 -

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

Company with an Audit and Supervisory Committee[Directors]
Maximum Number of Directors Stipulated in
Articles of Incorporation

18

Term of Office Stipulated in Articles ofIncorporation

1 yearChairperson of the Board

President

Number of Directors

10

Appointment of External Director

Appointed

Number of External Directors

5

Number of Independent Directors

5External Directors’ Relationship with the Company (1) Updated
Name

Attribute

Relationship with the Company*
a

b

c

d

e

f

g

h

i

j

k

Shigeru Endo
Other
Makoto Horiguchi
From another company
Naoya Takahashi
From another company
Akio Okuyama
CPA
Ikuko Hirasawa
Lawyer* 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 monetary consideration orother property from the Company besides compensation as a director/audit and supervisory committee
memberg. Major shareholder of the Company (or an executive of the said major shareholder if the shareholder is alegal entity)
h. Executive of a client or supplier company of the Company (which does not correspond to any of d, e, or f)(the director himself/herself only)
i. Executive of a company, between which and the Company external directors/audit and supervisorycommittee members are mutually appointed (the director himself/herself only)
j. Executive of a company or organization that receives a donation from the Company (the director
himself/herself only)
k. Others- 15 -

External Directors’ Relationship with the Company (2) Updated
Designationas
Independent
Director○

Supplementary
Explanation of
the Relationship

MakotoHoriguchi

○

-

Naoya
Takahashi〇

Name
Shigeru
Endo

Membership ofAudit andSupervisory
Committee

Reasons of Appointment
Shigeru Endo spent many years as an active diplomat
and has abundant international experience. He has had
no direct experience of involvement in company
management in the past except through his role asExternal Director of the Company, but the Company
judges that his broad knowledge and insights into
international affairs and his international sense, enable
him to offer advice on the general management of theCompany, and has therefore elected him as External
Director. In addition, there is no evidence that he hasserved as an executive of the Company’s subsidiaries,
major clients or suppliers, or major shareholders, andhe is considered to be highly independent. The
Company has therefore designated him as Independent
Director.
Makoto Horiguchi currently supervises the Sales
Division of Iwatani Corporation as Member of theBoard, Vice President of Iwatani Corporation, and has
been involved in the management of its overseas
operating companies. He possesses abundant
experience in management and corporate governance,broad insights, global knowledge and excellent
personality. The Company believes that he will offer
appropriate supervision and advice on the generalmanagement of the Company and has therefore elected
him as External Director. In addition, there is noevidence that he has served as an executive of theCompany’s subsidiaries, major clients or suppliers, or
major shareholders, and he is considered to be highly
independent. The Company has therefore designatedhim as Independent Director.
He has been involved in corporate management as a
top manager in the Hitachi Group for many years, andas the person responsible for overseeing the company's
information infrastructure, information systems
business, and research and development, he has awealth of experience, broad insight, global knowledge,
and personality in corporate management and the useof digital technologies (IT and DX). He is appointed as
an outside director with the expectation that he willcontribute to the enhancement of corporate value by
ensuring and improving the transparency andsoundness of the Company's management andstrengthening the supervisory function by providing
appropriate supervision and advice on the overallmanagement of the Company. In addition, there is noevidence that he has served as an executive of theCompany’s subsidiaries, major clients or suppliers, or
major shareholders, and he is considered to be highly
independent. The Company has therefore designatedhim as Independent Director.

-- 16 -Name
Akio
Okuyama

Ikuko
Hirasawa

Membership ofAudit andSupervisory
Committee○

Designationas
Independent
Director○○○

Supplementary
Explanation of
the Relationship

Reasons of Appointment
The Company believes that Akio Okuyama will
provide audit and advice based on his high level ofexpertise and abundant practical experience inaccounting and finance as a certified public accountant
and has therefore elected him as External Director. In
addition, there is no evidence that he has served as an
executive of the Company’s subsidiaries, major clientsor suppliers, or major shareholders, and he isconsidered to be highly independent. The Company
has therefore designated him as Independent Director.
Although Ikuko Hirasawa has not been involved incorporate management in any way other thanbecoming an External Director, she has been wellversed in labor and legal affairs and all other corporate
legal affairs over many years as a lawyer. She hasabundant experience and expertise in supervising legal
affairs and corporate management. She has also held
important positions in the Headquarters for the
Promotion of Gender Equality in the organizations inwhich she is engaged and has advanced knowledge
and expertise in human resource development anddiversity and inclusiveness. In addition, there is noevidence that she has served as an executive of theCompany’s subsidiaries, major clients or suppliers, or
major shareholders, and she is considered to be highly
independent. The Company has therefore designatedher as Independent Director.

-[Audit and Supervisory Committee]
Committee’s Composition and Attributes of Chairperson

Audit andSupervisory
Committee

All Committee
Members

Full-timeMembers

Internal
Directors

External
Directors

Chairperson

3

1

1

2

Internal Director

Appointment of Directors and/or Staff to Support
the Audit and Supervisory Committee

Appointed

Matters Related to the Independence of Such Directors and/or Staff from Executive Directors
To assist the duties of the Audit and Supervisory Committee, the Audit and Supervisory Committee Staff
Secretariat is established within the Internal Auditing Department, and several concurrently serving staff
members are appointed as assistant employees. Assistant employees who have received instructions necessary
for audit operations from the Audit and Supervisory Committee shall follow such instructions and shall notreceive instructions or orders from Directors, etc. regarding matters covered by the instructions from the Audit
and Supervisory Committee.
Internal transfer, personnel evaluation, reward and punishment and so on of assistant employees shall be
subject to prior consent of the Audit and Supervisory Committee.
- 17 -

Cooperation among Audit and Supervisory Committee, Accounting Auditors and Internal Audit Department
The Audit and Supervisory Committee cooperates closely with the Accounting Auditors and the Internal
Auditing Department to improve each one’s supervisory function.
Internal audit reports by the Internal Auditing Department, which is the Company’s internal audit department,
are also made to the Audit and Supervisory Committee by the dual reporting line.
The Audit and Supervisory Committee receives explanation regarding audit quality control system from the
Accounting Auditors in writing, etc. and verifies its appropriateness.
[Voluntary Establishment of Committee(s)]Voluntary Establishment of Committee(s)Corresponding to Nomination Committee orRemuneration Committee

Established

Committee’s Name, Composition, and Attributes of Chairperson

All Committee Members

Committee Corresponding toNomination Committee
Nomination and Remuneration
Committee
3Committee Corresponding to
Remuneration Committee
Nomination and Remuneration
Committee
3

Full-time Members

00Internal Directors

1

1

External Directors

22

Outside Experts

0

0

Other

0

0

Committee’s Name

Chairperson

External Director

External Director

Supplementary Explanation Updated
The Company established the Nomination and Remuneration Committee in November 2020.
1. Purpose of the Nomination and Remuneration Committee
The Nomination and Remuneration Committee has been established to enhance the fairness, transparency,
and objectivity of procedures relating to nomination of candidates for Directors and determination of
remuneration and further improve corporate governance.
2. Roles of the Nomination and Remuneration Committee
The Nomination and Remuneration Committee deliberates the following matters and advises the Board of
Directors upon consultation by the Board of Directors:(1) Basic policy relating to the composition of the Board of Directors(2) Planning of successors to CEO, etc.
(3) Criteria relating to the nomination of candidates for Directors and appointment of Operating Officers, etc.
(4) Criteria for determining the independence of external officers(5) Policy for determining the amount of remuneration of Directors and Operating Officers, and criteria for
remuneration based on the said policy(6) Other important matters relating to the nomination and remuneration of officers
3.

Composition of the Nomination and Remuneration Committee- 18 -

The Nomination and Remuneration Committee consists of at least three members, the majority of whom are
Independent External Directors in principle. The chairperson is selected by the mutual election of themembers. The Nomination and Remuneration Committee currently consists of two Independent External
directors and one Internal director. An Independent External director serves as Chairperson of the Nomination
and Remuneration Committee, which enhance the fairness, transparency, objectivity, and independence of theBoard of Directors' functions related to nomination and remuneration of director candidates.
4.
Holding situation of the meeting
In fiscal 2023, the Nominating and Compensation Committee met three times to discuss proposals fornominating candidates for directors and individual directors' remuneration, to formulate and manage plans for
successors for the president and CEO, and to select the chairperson of the Nomination and Compensation
Committee (to change the chairperson from an External Director to another External Director).

[Independent Directors]
Number of Independent Directors

5

Matters relating to Independent Directors
The Company designates all External Directors who quality as Independent Directors as Independent
Directors.
[Incentives]
Incentive Policies for Directors

Other

Supplementary Explanation
We abolished the retirement benefit system for Directors and Corporate Auditors and reviewed the officers’
remuneration system in June 2008. We also introduced a stock-based rewards plan under which compensation
is paid in the form of restricted stock in June 2017. Furthermore, at the 159th Annual General Meeting of
Shareholders in June 2021, we revised the officers’ remuneration on the occasion of the transition to acompany with an audit and supervisory committee. We will continue with revisions to further improve
incentives.
The officers’ remuneration consists of officers’ remuneration as compensation for the performance of theirduties, bonuses linked to the business performance of the Company and individual officers during the relevant
fiscal year, and stock-based rewards granted in the form of restricted stock as incentives for improving midto long-term performance and stock price. (Bonus and stock-based rewards are not provided to Directors andExternal Directors who are Audit and Supervisory Committee Members.)
Furthermore, as incentives for improving mid- to long-term performance and stock price, we set criteria forthe number of shares held according to the job rank for Executive Directors and Operating Officers(shareholding criteria), and they are expected to acquire at least the standard number of shareholding bycontributing a part of remuneration to the officers’ shareholding association or purchasing shares in the market
and also make efforts to continue holding the shares during their term of office.
Recipients of Stock Options
Supplementary Explanation–––- 19 -

[Director Remuneration] Updated
Disclosure of Individual Directors’
Remuneration

No individual disclosure

Supplementary Explanation
Remuneration of Directors
In business reports and annual securities reports, we disclose the total amount of remuneration, etc., as wellas the number of recipients, for each officer category.
(Notice of the Ordinary General Meeting of Shareholders
https://www.adeka.co.jp/en/ir/library/results/index6.html)(Annual securities reports
https://www.adeka.co.jp/ir/libraty/results/index3.html (in Japanese))
Policy on Determining Remuneration Amounts
and Calculation Methods

Established

Disclosure of Policy on Determining Remuneration Amounts and Calculation Methods Updated
The officers’ remuneration consists of officers’ remuneration as compensation for the performance of theirduties, bonuses linked to the business performance of the Company and individual officers during the relevant
fiscal year, and stock-based rewards granted as incentives for improving mid- to long-term performance andstock price.
1. Basic policy
The amount of the remuneration of Directors (excluding the Directors who are Audit and Supervisory
Committee Members, the same shall apply hereinafter) shall be such that it will fully work as motivation for
appropriate and sound performance so that they can make a transparent, fair, prompt and brave decision which
will result in raising corporate value and therefore common interest of shareholders. Specifically, theremuneration of Directors consists of basic compensation as a fixed consideration, bonus as a performancelinked compensation, and stock-based rewards. External Directors in charge of supervisory function shall be
paid only basic compensation in view of their duties.
2. Policy for determining the amount of individual basic compensation (money compensation)
Basic compensation for Directors shall be monthly fixed compensation as determined in accordance with theposition and number of years in office.
3. Policy for determining performance-linked compensation and the contents and amount/number of nonmonetary compensation
Performance-linked remuneration shall be paid as a bonus at a certain time each year, the amount of whichshall be determined by comprehensively taking into account the evaluation of financial performance eachfiscal year, the performance of each fiscal year against the sustainability indicators (sales of environmentallyfriendly products, GHG emissions) stipulated in the Medium-Term Management Plan and in consideration ofother circumstances. Non-monetary compensation shall be restricted stock compensation in order to make ourcompensation system work as a mid- to long-term incentive to realize the increase of the Company’s corporate
value and therefor sustainable increase of shareholder value. The amount/number of restricted stockcompensation shall be determined in accordance with the position of each Director and shall be paid byresolution of the Board of Directors held within one month from the date of starting job execution by the
Director. The transfer restriction period shall be no less than three years from the payment due date, and thetransfer restriction shall be lifted provided that the Director is continuously in office during the period in
principle.
4. Policy for determining the proportion of monetary compensation, performance-linked compensation andnon-monetary compensation among Directors’ total compensation- 20 -

As for the proportion of Executive Directors’ compensation by type, the higher the position of the Director
is, the larger the weight of bonus as performance-linked compensation shall be.
The approximate proportion of compensation by type is as follows (in case the performance indicators areachieved 100%).
Position: Representative Director & Chairman, Representative Director & President
Basic compensation 51%, performance-linked compensation 19%, non-monetary compensation 30%
Position: Director & Senior Managing Executive Officer
Basic compensation 54%, performance-linked compensation 18%, non-monetary compensation 28%
Position: Director & Managing Executive Officer
Basic compensation 56%, performance-linked compensation 15%, non-monetary compensation 29%
Position: Director & Executive Officer
Basic compensation 56%, performance-linked compensation 13%, non-monetary compensation 31%(Note: Performance-linked compensation is a bonus, and non-monetary compensation is restricted stockcompensation.)
5. Policy for determining the contents and amount of compensation by individual
Among Directors’ compensation by individual, as for basic compensation, the Representative Director &President shall be delegated by the Board of Directors to develop the specific contents of each Directors’ basic
compensation based on the remuneration criteria determined in accordance with the position and number ofyears in office within the scope of the maximum limit resolved by the 159th Annual General Meeting of
Shareholders. And the Representative Director & President shall consult such compensation proposal with
the Nomination and Remuneration Committee, and determine the amount of each Director’s compensation,
taking into consideration opinions and advice of the Nomination and Remuneration Committee therefor.
Among Directors’ compensation by individual, as for bonus, the Representative Director & President shall bedelegated by the Board of Directors to develop the specific contents of each Directors’ basic compensationby comprehensively taking into account the evaluation of financial performance each fiscal year, theperformance of each fiscal year against the sustainability indicators (sales of environmentally friendly
products, GHG emissions) stipulated in the Medium-Term Management Plan and in consideration of othercircumstances within the scope of the maximum limit resolved by the 159th Annual General Meeting of
Shareholders. And the amount of each Director’s bonus based on such proposal shall be determined by the
resolution of the Board of Directors after consultation with the Nomination and Remuneration Committee,
taking into consideration opinions and advice of the Nomination and Remuneration Committee therefor.
Among Directors’ compensation by individual, as for stock-based rewards, the Representative Director &President shall develop the stock-based rewards proposal based on the Stock-based Rewards Regulations
determined by the Board of Directors within the scope of the maximum limit resolved by the 159th Annual
General Meeting of Shareholders. And the number of shares allocated to each Director based on such proposal
shall be determined by the resolution of the Board of Directors after consultation with the Nomination andRemuneration Committee.
6. Persons entrusted with the determination of individual remuneration, etc., and the reasons therefor
As described in Section 5 above, the Company has delegated the determination of individual remuneration,etc., to President and CEO Hidetaka Shirozume. The reason for delegating decisions to him is that he oversees
all operations as President and CEO, and that there are clear remuneration standards and other criteria thathave been deliberated and approved by the Nomination and Remuneration Committee as a prerequisite fordelegating the determination of individual remuneration, etc. The Company formulates remuneration
proposals based on remuneration standards and other factors within the limits resolved at the General Meetingof Shareholders and determines them in consultation with the Nomination and Remuneration Committee andbased on the opinions and advice of the Nomination and Remuneration Committee. Therefore, the authority
delegated to President and CEO Hidetaka Shirozume has been exercised appropriately.
[Supporting System for External Directors]- 21 -

1. We provide External Directors with orientation on the Company’s business lineup, finances, andorganization, etc. before they take office. Afterward, we provide them with training, visits to our facilities,
and information as necessary upon request.
2. Before convening a Board of Directors’ meeting, we distribute meeting materials to External Directors. If
External Directors request additional materials or information, the Secretariat to Board of Directors(Secretarial Department) serves as a liaison and coordinator between related departments.
3. We explain our operations and management situation to External Directors when they attend the Board of
Directors’ meetings and other meetings or as necessary. We also arrange consultation and liaison between
External Directors and Representative Directors as necessary to report the company’s management.
4. The Company and External Directors have entered into a limited liabilities contract.
5. To assist duties of the Audit and Supervisory Committee, we have established the Audit and Supervisory
Committee Staff Secretariat within the Internal Auditing Department, where several staff members serve
concurrently.
[Retired Presidents/CEOs Holding Advisory Positions (Executive Advisor, Advisor, etc.)]
Information on retired presidents/CEOs holding advisory positions (Executive Advisor, Advisor, etc.)

Name

Job Title/
Position

Masahiro
Iwashita

Executive
Advisor

Akio
Kohri

Executive
AdvisorResponsibilities
External activities ofindustrial organizations,etc.
Advice upon requests ofthe current management
External activities ofindustrial organizations,etc.
Advice upon requests ofthe current management

Number of Retired Presidents/CEOs Holding
Advisory Positions (Executive Advisor, Advisor,
etc.)

Employment Terms(Full/part time,
with/withoutcompensation, etc.)
Part time withoutcompensation

Date When
Former Roleas President/
CEO Ended
June 27,
2006

Renewedevery year

Full time withcompensation

June 29,
2020

Renewedevery year

Term

2

OthersExecutive Advisor, who has served as the Representative Director & President, etc. at the Company,
participates in external activities at organizations important for the Group, leveraging their experience andinsight gained during their involvement in the Company’s management over the years.
Executive Advisor also gives advice concerning important management matters upon requests of theRepresentative Directors. Executive Advisor is not involved in the decision-making of the Company’s
management.

2. Matters on Functions of Business Execution, Auditing, Oversight, Nomination and Remuneration
Decisions (Overview of Current Corporate Governance System) Updated
1. Situation of the supervisory function and operational execution function
The Company makes decisions upon flexible and thorough consideration along with deliberation at themonthly Board of Directors’ meetings, extraordinary Board of Directors’ meetings held as necessary, andManagement Committee meetings held several times a month. The Company has 10 Directors, 7 of which
are Directors who are not currently serving as Audit and Supervisory Committee Members including three
External Directors, and three Directors concurrently serve as Audit and Supervisory Committee Members
including two External Directors. The term of office of Directors who do not concurrently serve as Audit and- 22 -

Supervisory Committee Members is one year, and the term of office of Directors who concurrently serve as
Audit and Supervisory Committee Members is two years.
We have also introduced the Operating Officers System to clarify responsibilities and authorities for businessexecution, accelerate decision-making, and run operations efficiently. In June 2023, from the perspective ofstrengthening corporate governance, we introduced a delegated-type executive officer system aiming tofurther separate management supervisory functions and business execution functions.
Moreover, we have established various committees, including the Internal Control Promotion Committee,
Compliance Promotion Committee, Risk Management Committee, and Trade Control Committee, anddeliberate specific matters necessary for the execution of operations to achieve rational deliberation andmanagerial judgments and mutually check for compliance, etc.
2. Situation of the audit function(1) Audit by Audit and Supervisory Committee
Among the three Directors who concurrently serve as the Audit and Supervisory Committee Members, two
are External Directors, and one is Internal Director. The Audit and Supervisory Committee Members
supervise the execution of duties by the Directors through means such as attending the Board of Directors andinvestigating business and financial conditions, based on the auditing policy and division of duties set by the
Audit and Supervisory Committee. They also closely cooperate with the Accounting Auditors and the Internal
Auditing Department to mutually improve the supervisory function.
(2) Internal audit
The Internal Auditing Department, which is the Company’s internal audit department, internally audits thelegality and appropriateness of business execution in all departments from a fair and independent standpoint
based on the operational audit regulations and audit plans, reports the audit results, and proposes
improvements to the top management. The Internal Auditing Department also reports the audit results to the
Audit and Supervisory Committee by the dual reporting line.
(3) Accounting audit
The Company undergoes accounting audits by Ernst & Young Shin Nihon LLC, with which the Company
has concluded an audit agreement with. Accounting audit is executed by Messrs. Tatsuya Suzuki andKazunori Onuki, who are certified public accountants and engagement partners at the above company. The
Audit and Supervisory Committee has received an explanation concerning the audit’s quality control systemby the Accounting Auditors in writing, etc. and confirmed its appropriateness.
(Note) The number of years of audit is seven years or less for all Accounting Auditors and is therefore omitted.
3. Situation of nomination and determination of remuneration
Before nominating candidates for Directors, appointing Operating Officers, and making proposals regarding
the remuneration of the Directors and Operating Officers at the Board of Directors, the Board of Directors
consults the Nomination and Remuneration Committee and seeks its opinions or advice.

3. Reasons for Adoption of Current Corporate Governance System
Our business activities span a diversity of fields in chemicals, foods, and life science and are characterized byorganic links between each business. Therefore, the Directors and Operating Officers are required to be
familiar with the Group’s overall business and the industry, exchange information, and cooperate with eachother.
In view of the above, we believe that governance that enhances the mobility of management and improves
the supervisory function, while maintaining decision-making by consensus of the Board of Directors, is the
optimal system to effectively demonstrate and operate the Company’s management functions and decided totransition from a company with an Audit & Supervisory Board to a company with an Audit and Supervisory
Committee in June 2021.
Important decision-making matters are proposed at the Board of Directors upon deliberation at theManagement Committee to grasp and share the situation, transparency, appropriateness, and appropriatenessof business execution among all Directors and ensure the mutual monitoring function between the Directors.
Since the transition to a company with an Audit and Supervisory Committee, the Directors who concurrently
serve as the Audit and Supervisory Committee Members have gained voting rights at the Board of Directors,
which, together with their involvement in the nomination of candidates for officers and process of determining
their remuneration by the Nomination and Remuneration Committee, is expected to strengthen the supervisory
function of the Board of Directors.
- 23 -

The five Independent External Directors (two of whom are Audit and Supervisory Committee Members)
provide advice and supervise from objective viewpoints independent from the management to achieve theCompany’s sustainable growth and mid- to long-term improvement of corporate value. In addition, the Audit
and Supervisory Committee Members attend major meetings of the Board of Directors, Management
Committee, etc. to adequately monitor the execution of duties by the Directors.

- 24 -

III. Implementation of Measures for Shareholders and Other Stakeholders
1. Measures to Vitalize the General Shareholder Meetings and Facilitate the Smooth Exercise of Voting
Rights Updated

Early Notification of General
Shareholder Meeting

Scheduling AGMs Avoiding
the Peak Day
Allowing Electronic Exerciseof Voting Rights
Participation in Electronic
Voting Platform and Other
Efforts to Enhance the Voting
Environment for Institutional
Investors
Providing Convocation Noticein English
Other

Supplementary Explanations
In order to ensure that shareholders have sufficient time to consider the
proposals for the general meeting of shareholders, we sent out the
convocation notice for the 162nd Ordinary General Meeting of Shareholders
on June 4, 2024, three days before the statutory deadline. In addition, in
accordance with the provisions of Electronic Provisions Measures stipulated
in the Companies Act, we have posted documents related to the General
Meeting of Shareholders on the websites of the Company and the Tokyo
Stock Exchange, etc. on May 24, 2024.
We have been striving to avoid holding the Annual General Meeting of
Shareholders on peak days since 2000.
We have introduced electronic exercise of voting rights since the Annual
General Meeting of Shareholders in June 2007.
We have also introduced exercise of voting rights by QR code on smartphone
since the Annual General Meeting of Shareholders in June 2019.
We have been participating in electronic voting platform since the Annual
General Meeting of Shareholders in June 2010.

We provide convocation notices in English on the websites of the Company
and the Tokyo Stock Exchange as well as on the electronic voting platform
for institutional investors.
We have introduced visual materials (business reports using PowerPoint) at
the Annual General Meetings of Shareholders. Additionally, starting with the162nd Ordinary General Meeting of Shareholders held in June, 2024, we haveintroduced a system to receive advance questions from shareholders throughthe website “General Meeting Portal”.
We also aim to make the Annual General Meeting of Shareholders IRoriented by holding a social gathering for shareholders after the Annual
General Meeting every year as a place of communication between
shareholders and the management as well as between shareholders.
The general meeting of shareholders will be streamed on demand, and we will
provide an environment where you can watch it on our website.

2. IR Activities Updated
Supplementary Explanations
Preparation and Publication ofDisclosure Policy

We have established the following disclosure policy andpublished it online.
1. Criteria for disclosure
We disclose information in an accurate, timely, and fairmanner in accordance with the Rules on Timely Disclosureof Corporate Information by Issuers of Listed Securities(hereinafter the “Timely Disclosure Rules”) set forth byrelated laws and regulations, such as the Financial- 25 -

Explanation byRepresentativeInstruments and Exchange Act, and the Tokyo Stock
Exchange. We also disclose other information judged
necessary or useful for understanding the Company.
2. Method of information disclosure
We disclose information subject to the Timely Disclosure
Rules on the Timely Disclosure network (TDnet) provided
by the Tokyo Stock Exchange.
To the press, we disclose information via the press club at
the Tokyo Stock Exchange (Kabuto Club).
We submit reports such as annual securities reports
pursuant to the Financial Instruments and Exchange Act tothe competent Finance Bureau and the Tokyo Stock
Exchange without delay.
We keep reports such as annual securities reports and makethem available for public inspection.
We publish disclosed information on our website in atimely manner; however, we do not publish all information
disclosed on TDnet on our website.

Regular Investor Briefings for
Individual Investors

Regular Investor Briefings forAnalysts and Institutional
Investors
Posting of IR Materials on
WebsiteEstablishment of Department
and/or Manager in Charge ofIR

3. Quiet period
To prevent leakage of information that affects the stock
price, we set a quiet period on the day of announcing
financial statements for each term and refrain from giving
comments or answering inquiries concerning the financial
results.
However, if the financial results are expected to largely
deviate from the previously announced financial forecasts,
we disclose information as necessary even during the quiet
period.
We participate in company briefings, etc. for individual
investors. In 2023, We exhibited at the following events.
The 18th Nikkei IR/Individual Investor Fair 2023 Online(held on September 1st and September 2nd, 2023)
sponsored by Nihon Keizai Shimbun
The “Nomura IR Fair 2023 Online'' sponsored by Nomura
Investor Relations“Asset Management Fair 2024” (held from January 10th toJanuary 25th, 2024)“Individual Investor Appreciation Day “Spring IR
Festival 2024”” (held on March 2nd, 2024) co-sponsoredby Radio NIKKEI & Pronexus.
At such briefings, the Representative Director & President
and Legal Affairs and Publicity Department Officer
explained the Company’s growth strategies and materials
that contribute to enriching people’s lives under thetheme of EV, semiconductor, and plant-base food etc.
Since 2021, we hold quarterly financial results briefing
sessions. And we also hold business-specific briefings via
teleconference to help understanding on our business.
We have an IR page on our website and publish summaryof financial statements, annual securities reports, business
reports, and financial results briefing materials.
Legal Affairs & Publicity Department and Publicity &Administration Group are in charge of IR.

- 26 -

Available

Available

3. Measures to Ensure Due Respect for Stakeholders Updated
Stipulation of Internal Rules
for Respecting the Position of
Stakeholders

Implementation ofEnvironmental Activities,
Sustainability Promotion
Activities etc.

Development of Policies on
Information Provision to
Stakeholders

Supplementary Explanations
The ADEKA Group Code of Conduct and the Compliance Action
Guidelines, organized by relationship with each stakeholder, promote theimportance of business activities that take into consideration the demands
and interests of stakeholders.
In March 2022, we revised the ADEKA Group Code of Conduct to factor insocial contributions through our main lines of business and sustainability
management. (https://www.adeka.co.jp/en/company/philosophy.html)
The ADEKA Group has established its basic philosophy regarding humanrights as the ADEKA Group Human Rights Policy, based on international
norms such as the Universal Declaration of Human Rights and the United
Nations Global Compact, as well as the ADEKA Group Code of Conduct.
Based on this policy, our group respects the human rights of all people
involved in all aspects of our corporate activities, fulfills our corporate
responsibilities, and contributes to the realization of a sustainable society.
As a concrete initiative, in April 2024, we joined the Japan Center for
Engagement and Remedy on Business and Human Rights (JaCER) as aregular member and will respond to complaints and consultations fromrights holders regarding business and human rights issues through theorganization's platform. We have put in place a system to deal with humanrights issue. We are also working to establish a human rights due diligencesystem. (https://www.adeka.co.jp/csr/human_right.html)
We acquired ISO14001 Environmental Management System at all plants andstrive to develop environmentally friendly products, save energy andresources, and reduce waste. To help our stakeholders understand our efforts
to create value over the medium to long term, we also publish an integrated
report "ADEKA Report", which explains our management policies andstrategies for realizing our aspirations of "ADEKA VISION 2030" and our
initiatives related to environmental, social and governance. We also develop
an organizational structure centered on the Sustainability Committee chairedby the Representative Director & President, aimed at accelerating
sustainability promotion activities, and strive to solve priority social issues tobe tackled by the Group.
To further promote initiatives for sustainability, we have signed the UN
Global Compact (UNGC) advocated by the UN and registered as aparticipating company on April 6, 2021. We also joined the Global Compact
Network Japan comprising Japanese companies that have signed the UNGC.
By signing the UNGC and clarifying our company’s stance, we will performbusiness in compliance with the norms. And we will contribute to sustainable
society through our main business and improve corporate value by
responding to ever-changing expectations of stakeholders and contributing toachieving the 17 SDGs.
For more information on our initiatives concerning sustainability issues,
please see [Supplementary Principles 3.1.3 (4.2.2)] Initiatives for Issues
Related to Sustainability, [Reasons for Non-compliance with the Principlesof the Corporate Governance Code] in I. Basic Views on Corporate
Governance, Capital Structure, Corporate Profile and Other Basic
Information.
The disclosure policy, as well as the pledge for timely disclosure submitted
to the Tokyo Stock Exchange and its attached document “Status of Internal
System Concerning Timely Disclosure of Company Information” areavailable on our website.
- 27 -

Other[HR philosophy]
ADEKA Group declares to “secure a safe and healthy working environment
for employees, respect their human rights, give them an impartial and equal
treatment and realize their comfortable and wealthy life, thereby building avibrant company that appreciates their uniqueness and initiatives” in theGroup’s Code of Conduct.
In line with this above philosophy, we strive to respect the individuality anduniqueness of each employee, treat them fairly according to their level of skill
development and performance, and support their self-realization.
[Initiatives for active participation of women in the workplace]
Regarding our initiatives for ensuring diversity and developing humanresources including promotion of active participation of women in theworkplace, please see [Supplementary Principle 2.4.1] Goals and Status for
Promotion of Women, Foreign Nationals, and Mid-career Hires to Middle
Managerial Positions / Policies for Human Resources Development andInternal Environment Development to Ensure Diversity, [Disclosure Basedon the Principles of the Corporate Governance Code] in I. Basic Views on
Corporate Governance, Capital Structure, Corporate Profile and Other Basic
Information.
[Initiatives in FY2023]•
Revision of pamphlets and leaflets and start of operation of new tools
such as interview sheet to support returning from childcare leave for the
purpose of deepening understanding of the childcare and nursing caresystems and reducing career loss due to absence from work•
From the perspective of promoting DE&I, elements related to DE&I wereadded to the action assessment of managers from the second half of 2022.
•
Along with the diversification of values and diversification of careers, wehave a career training system in place with the purpose of raisingawareness and acquiring skills to enable employees to develop theircareers autonomously.
•
Since 2023, we have been conducting generational career training•
As an initiative to instill DE&I in all employees, we are Continuously
conducting diversity trainings for all employees[Support for work-life balance exceeding statutory standards]
Allow partial use of the accumulated special leave (paid) for childcare
leave (statutory standard: unpaid).
•
Allow shorter working hours for childcare in increments of a minimumof fifteen minutes to a maximum of two hours with the primaryconsideration being ease of use (statutory standard: in increments of twohours only).
•
Allow shorter working hours for childcare until the end of the child’s
fourth elementary school year (statutory standard: below three years old).
•
Allow sick/injured childcare leave of up to ten days regardless of thenumber of children (statutory standard: five days for the first child andten days for the second and later child).
•
Allow nursing care leave of up to 365 days in total (statutory standard:
93 days).
•- 28 -

IV. Matters Related to the Internal Control System
1. Basic Views on Internal Control System and the Progress of System Development
Under the recognition that an internal control system is a process that all members of the Company, including
the Board of Directors and the management, should work on together to ensure the (1) effectiveness andefficiency of operations, (2) reliability of financial reporting, (3) compliance with relevant laws andregulations and the Articles of Incorporation, and (4) reasonable assurance about the safeguarding of assets,
we have taken company-wide measures to develop and strengthen the system, led by the Internal Control
Promotion Committee (established in March 2007).
We will engage in specific promotion activities based on the “Basic policy for the systems to secure
appropriateness of operations (Internal Control System),” outlined below; implement the PDCA cycle; andestablish a more effective system.
1. System to ensure that performance of duties by Directors or employees conforms to the provisions ofapplicable laws and regulations and the Articles of Incorporation(1) Compliance promotion organization
The Company shall establish the Compliance Promotion Committee (with division-level authority) consistingof officers and one external lawyer and make an effort to develop a compliance system and grasp problems
thereof. The Company shall also appoint in each department a Compliance Promotion Responsible Manager(General Manager of the department, in principle) and a Compliance Promotion Manager.
(2) Group Compliance Regulations
The Company shall promote the development of the compliance promotion organization system, managementof compliance activities (including but not limited to education and enlightenment), and operation of thewhistle-blowing system based on the Group Compliance Regulations.
(3) Code of ethics/manuals
The Company shall ensure thorough compliance with laws and regulations by using various code of ethics
and manuals, including, but not limited to, the “ADEKA Group Code of Conduct,” “Compliance Action
Guidelines,” and “Compliance Casebook (collection of cases).” The code of ethics and manuals shall be
regularly reviewed.
(4) Compliance education/training
The Company shall thoroughly promulgate a spirit of compliance to all officers and employees by theeducation/training system with a combination of stratified training and training classified by theme/laws, aswell as in-house newsletters, e-mail newsletters, or other internal media.
(5) Monitoring and business auditi) Regular monitoring and survey on the status of compliance with laws and the degree of penetration of asense of compliance, etc.
ii) Cooperation between the Compliance Promotion Committee and the Internal Auditing Department, suchas the reporting of internal audit results related to compliance to the Compliance Promotion Committeeby the Internal Auditing Departmentiii) Reporting of the activity status of the Compliance Promotion Committee and problems on compliance tothe Board of Directors(6) Whistle-blowing system
The Company shall establish a Whistle-blowing Hot-line and make an effort to detect early and secure
information on any violation of compliance.
The Company shall also further strengthen and enhance the function of the whistle-blowing system andestablish the Compliance Whistle-blowing Regulations that clarify the obligation to whistle-blow, theprocedure for whistle-blowing to the Whistle-blowing Hot-line, the protection of whistle-blowers, and so on,
in response to the Whistle-Blower Protection Act.
(7) Internal control system promotion organization
The Company shall strive to strengthen the company-wide internal control system by establishing the Internal
Control Promotion Committee (with division-level authority) and subcommittees by business segment
thereunder for the purpose of building and improving the system for the “Evaluation of and Report on Internal
Control Over Financial Reporting” pursuant to the Financial Instruments and Exchange Act (Japanese
Sarbanes-Oxley Act), in addition to specific operation and promotion of the internal control system pursuant
to the Companies Act and the Ordinance for Enforcement of the Companies Act.
(8) Prevention of damage caused by, and a ban on relations with, anti-social forces- 29 -

As one of the important efforts for CSR and compliance, the Company shall make an effort to exclude antisocial forces. To prevent any damage caused by, and exclude any relations with, any anti-social forces, theCompany shall designate the Legal Affairs & Publicity Department as a department in charge of response to
the anti-social forces, develop manuals on reporting of and countermeasures for possible cases, and take afirm stand against anti-social forces, cooperating with the police and other agencies.
2. System concerning storage and control of information pertaining to exercise by Directors of their duties
To guarantee the appropriateness of business judgment, the Company shall, for any matters important forbusiness management, make a decision by the Board of Directors or the Management Committee under therules on review and meeting, and store the minutes thereof along with relevant materials used at such decisionmaking. For any duties delegated to the execution line, an approval procedure by Ringi or Decision (therequest for managerial decision) shall be taken, and the Ringi documents/Decision documents shall be stored
along with relevant materials.
To secure traceability of Directors’ management responsibility, the information concerning these decisionmaking procedures shall be stored and managed as follows:(1) The following documents shall be stored based on the document management regulations and the standards
for storage and disposal of documents:(i) Minutes of General Shareholders’ Meetings, (ii) Minutes of Board of Directors, (iii) Minutes ofManagement Committee, (iv) Ringi documents/Decision documents, (v) accounting books, financial
statements, (vi) other documents specified in the document management regulations(2) An effort shall be made to adopt a method easy to retrieve stored documents by using an index system orelectronic files.
3. Rules and other systems for management of risk of loss (risk management system)(1) Establishment of the Risk Management Committee
The Company shall establish the Risk Management Committee to identify and evaluate risks actually or
possibly faced by each department, design the "ADEKA Group Risk Management Regulations" and the"ADEKA Group Risk Management Manual", and review the risk management system.
(2) Risk Management Manual
The Company shall, based on the “ADEKA Group Risk Management Manual” issued by the Risk
Management Committee, designate responsible departments by risk category, and create a system that canminimize damage in case of emergency.
(3) Establishment of the Emergency Headquarters
In the event of an incident of high degree of urgency/importance, the Company shall establish the Emergency
Headquarters (with the officer of the department in charge of the said incident appointed as chief ofheadquarters) and address the said incident in an organized manner in accordance with the Risk Management
Manual.
(4) Audit on risk management
The Internal Auditing Department shall conduct and regularly report to the Representative Directors, Audit
and Supervisory Committee, and the Board of Directors the result of an audit on the status of eachdepartment’s risk management.
4. System to secure efficient performance by Directors of their duties(1) Operating Officers System
The Company shall strive to speed up decision-making procedures and to clarify the responsibility forbusiness execution by separating decision-making from business execution, based on the Operating Officers
System.
(2) Management Committee
The Company shall establish the Management Committee in order to preliminarily deliberate importantmatters for which an approval of the Board of Directors is required, to share the information on businessexecution among officers, and to speed up deliberation by the Board of Directors.
Each Management Committee’s Meeting shall have all full-time Directors and the relevant Operating Officers
relating to the agenda of the meeting as attendees, and the appropriate section leaders as proposers of thematter to be discussed.
(3) Term of office of officers
Term of office of Directors and Operating Officers shall be one year for the purpose of clarifying their
management responsibility and making operations more efficient.
- 30 -

(4) Clarifying of rules on authorities, decision-making and business execution
The Company shall create a system capable of securing appropriate and efficient execution by officers of theirduties by clarifying rules on authorities, decision-making and business execution based on the internal
regulations.
(5) Budgetary management system
The Company shall secure efficiency of business operation by setting numerical targets for each department
at the beginning of a term, reviewing progress and status of the achievement using the managerial accounting
method, and providing feedback on the results.
The Company shall also improve business efficiency by using information technologies in the accounting
system.
5. System to secure proper operations in business group(1) Framework for reporting on the business execution by Group companies to the Company
The Representative Director of the Company shall, via the Corporate Planning & Strategy Division, receive
reports from representative directors of Group companies under the weekly/monthly report system, andrequest reports on their status of business and management issues at ADEKA Group President Meeting, Global
Strategy Meeting, and other meetings held by the Company.
The Company shall attend the general shareholders’ meetings of each Group company and receive a business
report there. The Company shall request reports on the status of business execution at the board of directors
meetings of each Group company and strive to collect information, via those who are dispatched from theCompany to a Group company as Directors or Audit & Supervisory Board Members of such Group company(hereinafter the “Dispatched Officers”).
(2) System for risk management of Group companies
The Company shall request Group companies to build and improve, and to report the status of operation ofrisk management systems according to business categories and business scales, including but not limited tothe establishment of organizations for risk management and appointment of responsible persons thereof.
The Company shall request a prompt report in the event that any accident, disaster, or violation of law occurs
or is likely to occur in any Group company.
In the event that a state of emergency in a Group company raises concerns about a possible serious impact on
the Company or any other Group company, the Company shall organize a Joint Emergency Team with theGroup company and address the concerns and minimize damage in cooperation with the Group company.
The Group Risk Management Council shall meet regularly to report on the status of risk management andissues at each Group company and to exchange information on risk management.
(3) System to secure efficient performance by directors, etc. of their duties in Group companies
The Company shall review the progress and the status of achievement of Group companies’ budgets using themanagerial accounting method and provide Group companies with feedback on the results.
The Company shall provide Group companies with useful information and improve business efficiency bysharing data for business management analysis with Group companies via the global business management
system and making it possible to immediately collect information.
(4) System to ensure that the execution by Group company’s directors, etc. and employees of their duties
conforms to the provisions of applicable laws and the Articles of Incorporation
The Company shall create a group-wide system for compliance by establishing and sharing with respective
Group companies, the code of ethics and various regulations/manuals applicable in common to the wholeGroup.
The Company shall request Group companies to build and improve, and to report the status of operation of acompliance system according to their business categories and business scales, including but not limited toestablishment of compliance promotion organizations and appointment of the compliance promotion
responsible persons thereof. The Company shall hold the Group Compliance Council consisting of thepresidents of respective Group companies and the compliance promotion responsible persons, discuss any
problems on compliance faced by respective Group companies, and strive to share the consciousness andinformation.
In addition, the Company shall strive for early detection of any violation of compliance by monitoring via
Dispatched Officers, the Audit and Supervisory Committee of the Company, and the Internal Auditing
Department and establishing a Whistle-blowing Hot-line accessible across Group companies.
6. Employees who should assist Audit and Supervisory Committee’s duties- 31 -

The Company shall establish the following system for securing the independence of employees who should
assist the Audit and Supervisory Committee’s duties (hereinafter the “Assistant Employees”) andeffectiveness of instructions of the Audit and Supervisory Committee, and then appoint Assistant Employees:(1) Assistant Employees who have received instructions necessary for audit operations from the Audit andSupervisory Committee shall follow such instructions and shall not receive instructions or orders from
Directors, etc. regarding matters covered by the instructions from the Audit and Supervisory Committee;(2) The Company shall appoint as Assistant Employees only persons who have skills and experience required
to carry out the Audit and Supervisory Committee’s instructions; and(3) Internal transfer, personnel evaluation, reward, and punishment and so on of Assistant Employees shall be
subject to prior consent of the Audit and Supervisory Committee.
7. Systems for reporting to Audit and Supervisory Committee, and other systems to secure the effectivenessof audits conducted by Audit and Supervisory Committee(1) Attendance at the Board of Directors’ meeting, etc., and regular liaison conference with the Representative
Director
Directors who are Audit and Supervisory Committee Members shall, in addition to attending the Board of
Directors’ meeting and other important meetings, regularly have a liaison conference with, and receive a reporton important matters concerning business management, compliance, etc. from, the Representative Director(2) Authorities of Audit and Supervisory Committee
The Audit and Supervisory Committee shall have the right to ask for a report on the result of internal audit
from the Internal Auditing Department Head, and to demand inspection of any materials of important in-housemeetings and any materials concerning decision procedures from Directors, Operating Officers andemployees.
(3) Cooperation with the Compliance Promotion Committeei) Attendance at the Compliance Promotion Committee’s meeting
Audit and Supervisory Committee Members shall, in addition to attending the Compliance Promotion
Committee’s meetings, receive a report on the status of the compliance activities from time to time.
ii) Whistle-blowing Hot-line• Upon receiving any whistle-blowing, the Secretariat of Compliance Promotion Committee shall timely
report it to the Audit and Supervisory Committee.
• In accordance with the internal regulations stipulating the securement of anonymity of whistle-blowers,
confidentiality, prohibition of disadvantageous treatment to whistle-blowers, and so on, the Company shall,in cooperation with the Audit and Supervisory Committee, strive to fairly operate the Whistle-blowing
Hot-line, appropriately deal with the whistle-blowing cases, and protect the whistle-blowers.
8. Matters related to policy on procedures for advance payment or reimbursement of expenses resulting fromexecution of duties of the Audit and Supervisory Committee and treatment of other expenses or liabilities
resulting from such execution of duties
The Audit and Supervisory Committee or Audit and Supervisory Committee Members may claim necessary
expenses from the Company, including those for seeking advice from attorneys-at-law, certified public
accountants, or other outside experts in conducting audits, or for commissioning them to perform
investigation, appraisement, or other tasks.
The Company shall respond to such claim unless the expenses pertaining to the claim are considered
unnecessary for the execution of audit duties or for the duties of the Audit and Supervisory Committee.

2. Basic Views on Eliminating Anti-Social Forces and the Progress of System Development
1. Basic policy on eliminating anti-social forces(1) Basic policy in the Code of Conduct
The ADEKA Group Code of Conduct states, “We totally exclude the relationship with any anti-social forcesand groups jeopardizing order and security in the civil society and putting undue pressure on businessactivities and reject their unreasonable demands aggressively.”(2) Submission of a declaration to the Tokubouren
The Company understands the reality of anti-social forces and groups, excludes any relations with them, andis firmly determined to eliminate them. This has been made clear internally and externally through adeclaration to break off relations with such forces and groups, submitted to the Tokubouren (Association forCountermeasures Against Anti-Social Forces in the Jurisdiction of the Metropolitan Police Department).
- 32 -

2. Progress of system development to eliminate anti-social forces(1) Department in charge of overseeing actions
The Legal Affairs & Publicity Department engages in company-wide awareness raising activities, serves as
the contact point for consultation, and takes other measures, as the department in charge of overseeing actions
to eliminate anti-social forces.
(2) Cooperation with specialized external agencies
The Company is a member of the Tokubouren and cooperates with the police stations that have jurisdiction
over the Head Office and each office, as well as with the legal advisor. For specific cases, we contact thesecretariat of Tokubouren via fax (Tokubou 110) and consult with them about the actions we should take.
(3) Collection and management of information on anti-social forces
We collect information on anti-social forces from materials provided by the Tokubouren and through theexchange of information at district meetings of the Council on Countermeasures Against Anti-Social Forces.
We manage the collected information under strict control to prevent external leaks.
(4) Development of manuals
We have created the “Manual for Responses to Unreasonable Demands” and the “Manual for Actions to
Eliminate Anti-Social Forces,” which contain cases of unreasonable demands and the basics of how to
respond. The manuals are published and shared on the company intranet to raise employee awareness.
(5) Training activities
In addition to holding briefing sessions as needed at the time of creation and revision of the above manuals,
we engage in training activities, such as offering e-learning courses and lending DVDs created by the
Tokubouren to each office.

- 33 -

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

Not adopted

Supplementary Explanation
At the Board of Directors meeting held on May 23, 2022, the Company decided to discontinue and abolishthe response measures to large-scale purchases of its shares, etc. (so-called “advance-warning type takeover
defense measures”), which had been in place since 2007. The decision was made after a series of thoroughdiscussions, taking into account the opinions of shareholders, including institutional investors in Japan andoverseas; recent trends in anti-takeover measures; changes in the business environment surrounding theCompany; and other factors.
After the abolishment of the measures, the Company will continue to work to secure and enhance its
shareholders’ common interests and corporate value. The Company will take appropriate measures against
those who make or attempt to make a large-scale purchase of its shares, etc., within the scope permitted by
the Financial Instruments and Exchange Act, the Companies Act, and other relevant laws and regulations.
Such measures include requesting necessary and sufficient information for our shareholders to properly
examine the appropriateness of the said purchase, disclosing the opinions of the Company’s Board of Directors
and other relevant information, and striving to secure necessary time and information for our shareholders toreflect on the matter.

2. Other Matters Concerning to Corporate Governance System Updated
The company structure for timely disclosure of ADEKA’s company information is as described below.
1. Basic Policy on Information Disclosure
ADEKA Corporation (hereinafter “ADEKA”) and ADEKA Group (hereinafter the “ADEKA Group”) have
ADEKA Group Code of Conduct, which sets forth “Foster corporate transparency by truthfully and accurately
disclosing information regarding our business activities” as one of guidelines:“We disclose business information that is useful for society in a timely and appropriate manner. We fully
acknowledge the key relevance of protection of confidential information, including privacy of customers, anddeal with such confidential information as customers data stored with us in accordance with the provisionsof our house rules, in an appropriate and rigorous way.”
2. Internal Policies and Standards
ADEKA and the ADEKA Group shall report, collect, centrally manage and timely disclose insider
information in accordance with the following policies and standards.
(1) Insider Trading Prevention Policy
Chapter 3 “Disclosure of Insider Information” of Insider Trading Prevention Policy sets forth (i) the disclosureof material fact without delay after occurrence thereof, (ii) the person who makes such disclosure (President
or Officer in charge of Legal Affairs & Publicity Department) and (iii) the disclosure desk (Legal Affairs &Publicity Department).
(2) ADEKA Group Operational Standards for Insider Trading Prevention
Since subsidiaries became subject to insider trading regulations under the Financial Instruments andExchange Act, ADEKA has established and operates “ADEKA Group Operational Standards for Insider
Trading Prevention.”i) Establishment of Information Management Office and Information Handling Manager
The office to aggregate and manage insider information (the “Information Management Office”) and the roleof Information Handling Manager are established at ADEKA and each of its subsidiaries.
ii) Aggregation of information at the Information Management Head Office
Insider information collected by the Information Management Office of each company is aggregated at andcentrally managed and disclosed by the Information Management Office of ADEKA Corporation (theInformation Management Head Office, which controls insider information management across the ADEKA
Group).
iii) Reporting obligation of insider information- 34 -

Officers and employees of ADEKA and its subsidiaries are obliged to report to the Information Management
Head Office through their own Information Management Office promptly when they obtain insider
information using the “Insider Information Report Form.”
3. Internal Organizational Structure(1) Information Handling Manager: Kiyoshi Masamune, Director and Operating Officer(2) Summary Chart of Internal Organization: As shown in the attached “Overview of Internal Organization
for Insider Information Management and Timely Disclosure”
4. Flow of Timely Disclosure with the Tokyo Stock Exchange
Information Handling Manager ensures that timely disclosures are made without delay:in the case of decisions, after they are approved by the Board of Directors;
in the case of financial information, after the financial results are finalized (usually approved by the Board of
Directors); andin the case of occurred facts, with respect to which officers or employees who become aware thereof are
obliged to report to the Information Management Office.
To ensure the accuracy and appropriateness of information disclosure, any disclosure is made after thecontents thereof are reported to and confirmed by the Board of Directors and the Representative Directors.

- 35 -